TCR_Public/090130.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

             Friday, January 30, 2009, Vol. 13, No. 29

                            Headlines


107 ZELZAH: Voluntary Chapter 11 Case Summary
ABITIBIBOWATER INC: Names Richard B. Evans as Board Chairman
AIRTRAN HOLDINGS: Posts $273.8 Million Full Year 2008 Loss
ALLIED CAPITAL: Fitch Downgrades Issuer Default Rating to 'BB'
ALLIED CAPITAL: Moody's Downgrades Senior Unsec. Rating to 'Ba2'

ALTERNATE FUELS: Case Summary & Five Largest Unsecured Creditors
AMCORE FINANCIAL: Weak Asset Quality Cues Fitch's Junk Ratings
AMOR DE BRAZIL: Files for Chapter 7 Liquidation
AMR CORP: 8 US Airlines Post 2008 Losses Totaling $19.6 Billion
ANTARTICA CFO: Moody's Junks Rating on EUR29.250 Mil. Notes

ARES VII: Fitch Junks Ratings on $51 Million Class C Notes
ATA AIRLINES: To Sell Reagan Airport Slots to Airtran for $1.34MM
AVIS BUDGET: Rental Car Rental Industry Also Wants to Access TARP
BANK OF AMERICA: Andrew Cuomo to Probe Directors & Shareholders
BANKUNITED FSB: Weiss Ratings Assigns "Very Weak" E- Rating

BARBARA BAUER: Voluntary Chapter 11 Case Summary
BLACK GAMING: Amends Credit Deal, Wells Fargo Forbears Till Feb.
BOSTON SCIENTIFIC: Posts $2.43-Bil Net Loss in 4th Quarter 2008
BRIGHAM EXPLORATION: S&P Downgrades Corp. Credit Rating to 'B-'
BUDGET TOWING: Voluntary Chapter 11 Case Summary

CABLEVISION SYSTEMS: Harbinger Et Al. Disclose Equity Stake
CAMPBELL RESOURCES: Files for Bankruptcy Protection in Canada
CASCADE GRAIN: Files for Chapter 11 Bankruptcy in Oregon
CASCADE GRAIN: Case Summary & 20 Largest Unsecured Creditors
CHESAPEAKE ENERGY: Fitch Assigns 'BB' Ratings on Note Offering

CHESAPEAKE ENERGY: Moody's Assigns 'Ba3' Rating on $1 Bil. Notes
CHESAPEAKE ENERGY: S&P Assigns 'BB' Rating on $500 Mil. Notes
CHINA HEALTH: Amends & Restates Lease and Note with Lei Guo
CHINA HEALTH: Eight Executives Disclose Equity Stake
CIFG ASSURANCE: S&P Raises Ratings on 8 Classes of Notes to 'BB'

CITIGROUP INC: Treasury Deal May Further Restrict Operations
CLEARPOINT BUSINESS: Interim COO Says Not Owning Equity Stake
CLEARPOINT BUSINESS: Taps Brian Delle Donne as Interim COO
COLONIAL BANCGROUP: Reports $825 Million 4th Quarter Net Loss
COLONIAL BANCGROUP: Fitch Cuts Issuer Default Rating to 'BB'

COLONIAL BANCGROUP: Moody's Cuts Bank Strength Rating to 'D'
COMSTOCK HOMEBUILDING: Mathis Partners' Bankruptcy Case Dismissed
COMSTOCK HOMEBUILDING: Nasdaq Extends Suspension of Trading
COMSTOCK HOMEBUILDING: Restructures $13.5-Mil. Penderbrook Debt
CONTINENTAL AIRLINES: Posts $585 Million Full Year 2008 Loss

CORD BLOOD: Independence Blue Cross Discloses 4.86% Equity Stake
CUPERTINO SQUARE: To Seek Plan Confirmation on March 31
DBSI INC: DBSI Landsowne's Voluntary Chapter 11 Case Summary
DELTA AIR: Posts $8.9 Billion Full Year 2008 Loss
DOT VN INC: Names Kenneth Le as Strategic Advisory Board Member

EAD SANTA NELLA: Voluntary Chapter 11 Case Summary
EASTMAN KODAK: To Cut Up to 18% of Workforce; Posts $137MM Loss
EDGEWATER FOODS: Posts $346,946 Net Loss in Quarter ended Nov. 30
ENTERPRISE RENT-A-CAR: Rental Car Firms Also Want to Access TARP
FAIRFAX FINANCIAL: S&P Raises Sr. Unsec. Debt Rating From 'BB+'

FANNIE MAE: Eight Officers Dispose of Shares to Pay Taxes
FLYING J: Big West to Wind Down Rosedale Highway Operations
FORD MOTOR: Posts $5.9BB Net Loss in Quarter ended December 31
GENCORP INC: Board Approves Kathleen Redd's Appointment as CFO
GIANT CARPET: Declares Bankruptcy, Lists $5.2MM in Liabilities

GOLD & HONEY: Voluntary Chapter 15 Case Summary
GOODY'S LLC: Former Worker Sues Co. for Unpaid Wages, Benefits
GOTTSCHALK INC: Taps DJM Asset as Real Estate Consultant
GOTTSCHALK INC: Taps FD U.S. as Communications Advisor
GOTTSCHALK INC: Taps Financo Co. as Investment Banker

GEORGIA-PACIFIC LLC: Fitch Affirms Issuer Default Rating to 'B+'
GIBRALTAR INDUSTRIES: S&P Downgrades Corp. Credit Rating to 'BB-'
GMAC LLC: Moody's Downgrades Ratings on 14 Classes of Securities
GMAC LLC: Moody's Takes Rating Actions on Floorplan Notes
GUAM POWER: Fitch Affirms 'BB+' Rating on $375 Mil. Notes

HERTZ GLOBAL: Rental Car Industry Also Wants Access to TARP
HEXION SPECIALTY: Finalizes Severance Agreement With Sarah Coffin
HEXION SPECIALTY: Earnings Uncertainty Cues S&P's Junk Rating
HINES HORTICULTURE: Court Confirms Black Diamond-Backed Plan
HPG INTERNATIONAL: Can Use $1.2 Million BofA Facility on Interim

INERGY LP: Moody's Assigns 'B1' Rating on $200 Mil. Senior Notes
INERGY LP: S&P Assigns Issue-Level Rating at 'B+'
INTERSTATE BAKERIES: GE Capital Facility Reduced by $20 Million
IRVINE SENSORS: Files Amendment to Annual Report
LANDMARK HOMES: Case Summary & 20 Largest Unsecured Creditors

LEAR CORP: Violates Loan Covenant; In Talks with Primary Lenders
LEAR CORP: Posts $689.9 Million Net Loss for Full-Year 2008
LEHMAN BROTHERS: Examiner Anton Valukas Begins Investigation
LEHMAN BROTHERS: Replaced As Admin. Agent Under Jarden Facility
MATHIS PARTNERS: Bankruptcy Case Dismissed; FDIC Assumes Loan

MERISANT WORLDWIDE: Taps Blackstone as Financial Advisor
MERRILL CORPORATION: S&P Affirms 'B' Corporate Credit Rating
MIDLAND FOOD: Reports Dec. Profit, Asks for More Time for Plan
MODAVOX INC: Posts $1.2MM Net Loss in Nine Months Ended Nov. 30
MORTGAGES LTD: DS Hearing on Investors Committee Plan Set March 4

MOTOR COACH: Ct. Confirms Plan; FMA Subscribes to Rights Offering
NATIONAL HERITAGE: Files for Chapter 11 Bankruptcy Protection
NAVISTAR INTERNATIONAL: Harbinger Et Al. Discloses Equity Stake
NAVISTAR INTERNATIONAL: OppenheimerFunds Discloses 8.94% Stake
NAVISTAR INTERNATIONAL: To Close Indianapolis Engine Plant

NEWARK GROUP: Liquidity Pressures Prompt Moody's Junk Ratings
NORTEL NETWORKS: Oplink Discloses $805,000 in Receivables
NORTEL NETWORKS: Ends Joint Pact with Alvarion for Mobile WiMAX
NORTHWEST AIRLINES: Delta Posts $8.9 Billion Full Year 2008 Loss
OCEANOGRAFIA SA: Fitch Downgrades Issuer Default Rating to 'B-'

PARMALAT SPA: US Court Lets Lawsuit Against Deloitte to Proceed
PERFUMANIA HOLDINGS: To Pay Default Interest on $250MM Credit
PILGRIM'S PRIDE: Can Hire Baker & McKenzie as Special Counsel
PILGRIM'S PRIDE: Files Schedules of Assets and Liabilities
PILGRIM'S PRIDE: Gets Go-Signal to Hire Weil Gotshal as Counsel

PILGRIM'S PRIDE: Panel Taps Andrews Kurth as Bankruptcy Counsel
PILGRIM'S PRIDE: Files Amendment to Annual Report
POLAROID CORP: Names Genii as Lead Bidder for Brand & Key Assets
POLAROID CORP: Gets Permission to Access Lenders' Cash Collateral
PROGRESSIVE GAMING: Enter Into Various Pacts With Private Equity

QPC LASERS: Receives Notice of Default from 10% Debenture Holders
REGAL ENTERTAINMENT: Moody's Keeps 'Ba3' Corporate Family Rating
ROBERT L'ABBATE: Case Summary & Eight Largest Unsecured Creditors
ROYCE INTERNATIONAL: Files Bare-Bones Chapter 11 Petition
SAFENET INC: S&P Keeps 'B' Corp. Credit Rating; Outlook Positive

SEMGROUP LP: J. Catsimatidis May Present Plan by January 31
SEMGROUP LP: Serves Subpoenas to Former Executives
SEMGROUP LP: J. Aron to Tender $89.7-Mil. to Bankruptcy Estate
SEMGROUP LP: Oklahoma Producers Seek An Accounting of Deliveries
SENTINEL MANAGEMENT: Survives BNY Opposition to $500MM Suit

SMURFIT-STONE: Seeks March 27 Extension to File Schedules
SPARKS REGIONAL: Liquidity Declines Spur Moody's Junk Ratings
STAR TRIBUNE: U.S. Trustee Forms 7-Member Creditors Committee
SUPERIOR OFFSHORE: Court Confirms Plan, Denies Conversion Motion
TALLYGENICOM LP: Taps Donlin Recano as Claims and Noticing Agent

THERMADYNE HOLDINGS: Moody's Affirms Corp. Family Rating to 'B3'
TOYOTA OF AUGUSTA: Files for Chapter 7 Liquidation
TRANSNATIONAL AUTOMOTIVE: Nov. Balance Sheet Upside-Down by $2MM
TRIBUNE COMPANY: Fitch Affirms 'D' Issuer Default Rating
TUSKEENA OXFORD: Case Summary & 16 Largest Unsecured Creditors

TWEETER HOME: Seeks Release of $300,000 Utility Reserve
TWEETER OPCO: Gets Permission to Use Lenders' Cash Collateral
TWEETER OPCO: Court Rules on Disposition of Leases, Other Assets
TWEETER OPCO: Court Sets May 26 As General Claims Bar Date
TWEETER OPCO: Sec. 341 Meeting of Creditors Slated for Feb. 25

UAL CORP: 8 US Airlines Post 2008 Losses Totaling $19.6 Billion
US AIRWAYS: Posts $2.21 Billion Full Year 2008 Loss
VANGENT INC: Moody's Changes Outlook to Negative; Keeps B2 Rating
VCSP LLC: Case Summary & 20 Largest Unsecured Creditors
VITRO SAB: Not Certain on $45MM Interest Payment Due Feb. 1

WESTAFF INC: Auber Investments Et Al. Disclose 8.98% Equity Stake
WESTAFF INC: Negotiating With Koosharem on Acquisition Proposal
WHOLE FOODS: FTC Halts AntiTrust Suit to 2007 Wild Oats Buy
WIRELESS AGE: Challenge of Subsidiary Receivership Dismissed
YELLOWSTONE MOUNTAIN: Pre-Bankruptcy Lenders Want Sale of Assets

* SEC Charges ProTrust With TARP Purported Investments Fraud
* S&P Updates Its Ratings Criteria On Exchange Offers
* Auto Dealers Fear Industry Might Collapse

* Gov't Tries to Rescue Financial Institutions & Homebuyers
* Investors' Buying Into Junk Bond Deals Eases Funding Concerns
* Rental Car Companies Seek Financial Assistance From Gov't

* Eight of 9 US Airlines Post 2008 Losses Totaling $19.6 Billion

* BOOK REVIEW: Beyond the Quick Fix:
               Managing Five Tracks To Organizational Success


                            *********

107 ZELZAH: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: 107 Zelzah Inc.
        9142 Woodley Ave
        North Hills, CA 91343

Bankruptcy Case No.: 09-10566

Type of Business: The company is a single asset real estate
debtor.

Chapter 11 Petition Date: January 20, 2009

Court: United States Bankruptcy Court
       Central District Of California (San Fernando Valley)

Judge: Geraldine Mund

Debtor's Counsel: Shawna S. Nazari, Esq.
                  4854 Van Nuys Blvd Ste 5
                  Sherman Oaks, CA 91403
                  Tel: (818) 385-0797

Estimated Assets: $1,000,001 to $10,000,000

Estimated Debts: $1,000,001 to $10,000,000

A full-text copy of the Debtor's petition, including its largest
unsecured creditors, is available for free at:

            http://bankrupt.com/misc/nysb08-15173.pdf

The petition was signed by Reza Safaie, President of the company.


ABITIBIBOWATER INC: Names Richard B. Evans as Board Chairman
------------------------------------------------------------
AbitibiBowater Inc. appointed Richard B. Evans to the position of
chairman of the board of directors of the company, effective
Feb. 1, 2009.

Mr. Evans is a director of AbitibiBowater and a member of the
board of directors of Rio Tinto plc and Rio Tinto Ltd.  He has
disclosed his retirement from the Rio Tinto Boards, effective in
April.  Additionally, Mr. Evans is chief executive of Rio Tinto
Alcan until Feb. 1, 2009, when he will retire from this role.  He
is the former CEO of Alcan Inc., chairman of the board of the
International Aluminium Institute and past Chairman of the U.S.
Aluminum Association, and a director of the Canadian Council of
Chief Executives.  A graduate of Oregon State University with a
Bachelor's degree in engineering, he also holds a Master's in
management from the Stanford University Graduate School of
Business.  Mr. Evans and his wife have been residents of Montreal,
Canada since 2001.

"We are fortunate to have someone of the calibre of Dick Evans to
assume the Chairmanship of AbitibiBowater," stated David J.
Paterson, president and chief executive officer.  "As we continue
our work to better position the Company, we will benefit from [Mr.
Evans'] extensive experience and business insight."

The company also disclosed that John W. Weaver has resigned as
non-executive chair of AbitibiBowater, effective Feb. 1, 2009.  To
permit an orderly transition, he will remain as a director but
will not stand for re-election at the company's next Annual
Stockholders' Meeting.  Mr. Weaver was president and CEO of
Abitibi-Consolidated Inc. from 1999-2007, prior to being appointed
executive chairman of AbitibiBowater in October 2007.

"[Mr. Weaver] is an industry leader and has always worked
diligently to manage through challenging times," Mr. Paterson
commented.  "He was instrumental in the creation of
AbitibiBowater, and on behalf of all company stakeholders, I wish
[Mr. Weaver] the very best and thank him for his invaluable
dedication and contributions."

Additionally, Gordon D. Giffin will retire from the board of
directors, effective immediately.  Mr. Giffin has served on the
company's Audit, and Environment, Health and Safety committees.
He is a senior partner with the law firm McKenna, Long & Aldridge
LLP.

"I would also like to extend my thanks and appreciation to Gordon
for his wise counsel and support," stated Mr. Paterson.

                    About AbitibiBowater Inc.

Headquartered in Montreal, Canada, AbitibiBowater Inc. --
http://www.abitibibowater.com/-- produces a wide range of
newsprint, commercial printing papers, market pulp and wood
products.  It is the eighth largest publicly traded pulp and paper
manufacturer in the world.  AbitibiBowater owns or operates 27
pulp and paper facilities and 34 wood products facilities located
in the United States, Canada, the United Kingdom and South Korea.
Marketing its products in more than 90 countries, the company is
also among the world's largest recyclers of old newspapers and
magazines, and has more third-party certified sustainable forest
land than any other company in the world.  AbitibiBowater's shares
trade under the stock symbol ABH on both the New York Stock
Exchange and the Toronto Stock Exchange.

As reported in the Troubled Company Reporter on Nov. 13, 2008,
AbitibiBowater Inc. reported a net loss of US$302 million on sales
of US$1.7 billion for the third quarter 2008.  These results
compare with a net loss of US$142 million on sales of US$815
million for the third quarter of 2007, which consisted only of
Bowater Incorporated.  The company's 2008 third quarter results
reflect the full quarter results for Abitibi-Consolidated Inc. and
Bowater Incorporated as a combined company after their combination
on Oct. 29, 2007.

As reported by the Troubled Company Reporter on Jan. 23, 2009,
AbitibiBowater Inc. and its subsidiaries Abitibi- Consolidated
Inc. and Bowater Inc. received on January 20 two-notch downgrades
from Moody's Investors Service that took the rating one step lower
than the demotions issued in December by Standard & Poor's,
Bloomberg's Bill Rochelle notes.

As reported by yesterday's Troubled Company Reporter, Moody's
Investors Service downgraded the corporate family rating of
AbitibiBowater Inc.'s subsidiaries Abitibi-Consolidated Inc. and
Bowater Incorporated to Caa3 from Caa1.  The rating action,
according to Moody's, was prompted by AbitibiBowater's weakened
liquidity position and the deteriorating economic and industry
conditions.  "The Caa3 corporate family ratings of Abitibi and
Bowater reflect a heightened probability of default in the near
term given the anticipated challenges of refinancing or paying
down their significant short term debt obligations through asset
sales, either of which may prove to be difficult in the current
market environment." The ratings of both Abitibi and Bowater also
reflect the accelerating decline in demand for newsprint and other
paper grades manufactured by both companies as consumers continue
to migrate to online news and other forms of electronic media.


AIRTRAN HOLDINGS: Posts $273.8 Million Full Year 2008 Loss
----------------------------------------------------------
Eight of the nine major U.S. airlines that have disclosed fourth
quarter and full year 2008 results have posted losses aggregating
$19.6 billion.  Only Southwest Airlines posted a net profit.

                                Net Profit         Net Profit
                             Full Year 2008      Full Year 2007
                             --------------      --------------
Delta Air Lines, Inc.       ($8,900,000,000)     $1,600,000,000
AMR Corp.                    (2,100,000,000)        504,000,000
Southwest Air Lines             178,000,000         645,000,000
UAL Corp.                    (5,348,000,000)        403,000,000
US Airways Group Inc.        (2,210,000,000)        427,000,000
Continental Airlines  Inc.     (585,000,000)        459,000,000
Alaska Air Group Inc.          (135,900,000)        124,300,000
Skywest Inc.                         --                  --
JetBlue Airways Corp.           (76,000,000)         41,000,000
AirTran Holdings, Inc.         (273,829,000)         52,683,000

Skywest is expected to release its fourth quarter 2008 results on
February 11.  The figures provided by JetBlue were pre-tax profit
(or losses).

                                Net Profit         Net Profit
                            4th Quarter '08     4th Quarter '07
                            ---------------     ---------------
Delta Air Lines, Inc.       ($1,400,000,000)       ($70,000,000)
AMR Corp.                      (340,000,000)        (69,000,000)
UAL Corp.                    (1,303,000,000)        (53,000,000)
Southwest Airlines              (56,000,000)        111,000,000
US Airways                     (541,000,000)        (79,000,000)
Continental Airlines           (266,000,000)        (32,000,000)
Alaska Air Group Inc.           (75,200,000)         (7,400,000)
Skywest Inc.                         --                  --
Jetblue Airways Corp.           (49,000,000)         (3,000,000)
AirTran Holdings, Inc.         (118,391,000)         (2,171,000)

                       High Fuel Jet Prices

The airlines said high fuel prices for most of 2008 have
contributed to their losses.

AMR, the parent of American Airlines, said that historically high
and volatile jet fuel prices continued to challenge it in the
fourth quarter of 2008.  AMR paid $133 million and $2.7 billion
more for fuel in the fourth quarter and for all of 2008,
respectively, than it would have paid at prevailing prices from
the corresponding prior-year periods.

Delta faced over $2 billion in increased fuel costs in 2008.
While fuel prices dropped in the fourth quarter 2008, Delta paid
for high fuel prices due to its fuel hedging contracts.  Delta
would have reported a $167 million net profit excluding special
items in the December 2008 quarter, if fuel had been purchased at
market prices.

UAL said the historic peak in prices and the impact on hedges
driven by the rapid decline resulted in a $2.9 billion increase in
cost compared to 2007 fuel prices.  UAL recorded $370 million in
cash losses on fuel hedges that settled in the quarter, as the
recent fall in fuel prices drove losses on hedges put in place
earlier in the year to mitigate the steep increase in prices that
had occurred in the second and third quarters of 2008. In
addition, the company also recorded non-cash, net mark-to-market
losses on its fuel hedges of $566 million.

US Airways Group Chairman and CEO Doug Parker stated, "Like other
airlines that have reported before us, our financial results
reflect the staggering increase in fuel prices that we faced
throughout most of 2008.  In fact, had our 2008 fuel price
including realized gains and losses on fuel hedging instruments
remained at 2007 levels, the company's fuel expense would have
been approximately $1.4 billion lower.

                  Lower Revenues Due to Recession

Delta Air Lines, which completed its merger with Northwest
Airlines in 2008, said that during the fourth quarter, on a
combined basis, passenger revenue fell 1%, or $54 million,
compared to the prior year period due to a 4% decline in capacity,
partially offset by a 3% increase in unit revenue.  These results
reflect the weakening of the revenue environment during the
quarter caused by the global economic recession.

According to UAL, total passenger revenue for the quarter
decreased 8.7%  year-over- year as consolidated capacity declined
10.6% , consolidated yield increased 2.4%  and load factor
decreased 0.3 points.

Continental Airlines, which have been mentioned in possible merger
talks with other U.S. airlines in 2008, said weakening economic
conditions and highly volatile fuel prices presented financial
challenges for the airline in the fourth quarter 2008. Continental
recorded a fourth quarter net loss of $266 million.

Dave Barger, JetBlue's CEO, said that while he was appointed to
report a loss, he has been satisfied with JetBlue's performance in
2008.  "Against the backdrop of record fuel prices and
unprecedented economic challenges, we effectively managed our
capacity and strengthened our network.  We also made significant
progress in our efforts to further enhance the JetBlue experience
for our customers.  JetBlue's industry-leading unit revenue growth
throughout the year reflects the outstanding work of our
crewmembers.

"2008 was an especially tough and challenging year," said Bob
Fornaro, AirTran Airways' chairman, president and chief executive
officer. "We thank our dedicated, hard-working Crew Members and
our loyal customers for helping us overcome the many obstacles we
faced in 2008. Our Crew Members continue to strive to provide
exceptional customer service, and a high-quality product while
offering value to the traveling public. Despite the industry
challenge shifting from high oil costs to concerns regarding
consumer demand, our 2008 initiatives have us well positioned to
return to profitability in 2009."

                  Liquidity, Bankruptcy Concerns

Delta, UAL and AirTran said that they have strengthened their
liquidity that would allow them to face the challenges of 2009.

Michael Lowry, project manager for AVIATION WEEK's Top-
Performing Companies report, said in September 2008 that
USAirways, AMR, Northwest Airlines, AirTran and Continental would
have high bankruptcy risk in 2009.

The September report also said that USAir was a high risk to file
for bankruptcy again in 2008 -- it had entered and exited
bankruptcy protection twice -- but USAir has been able, so far, to
survive the crisis.  Only smaller airlines filed for bankruptcy in
2008.  These included Frontier Airlines, Skybus Airlines Inc.,
Aloha Airgroup Inc. and ATA Airlines Inc., who made its second
Chapter 11 filing.

Northwest Airlines has completed its merger with Delta Air to
form one of the world's largest airlines.  Delta noted that as of
Dec. 31, 2008, it had $6.1 billion in total liquidity and cash
collateral posted with hedge counterparties.  As of Dec. 31, 2007,
Delta had $3.3 billion in cash, cash equivalents and short-term
investments.

UAL said it completed several transactions during the fourth
quarter that helped strengthen its liquidity.  It raised
$215 million from aircraft financing transactions that closed
during the quarter along with $66 million in proceeds from asset
sales. The company also received net proceeds of $107 million
through equity issuances during the quarter.

AirTran noted that it ended the fourth quarter with $340.5 million
in unrestricted cash and investments, its highest year-end balance
since 2005.

                           2009 Outlook

Most of the airlines expect weak revenues in 2008, but expect
those revenues to be offset by lower fuel prices and savings from
cost cutting measures.  Some of the airlines have also disclosed
capacity cuts for 2009.

AMR has decided not to use MD-80s to backfill flying associated
with the seven 737s that no longer will be delivered in 2009.
Largely as a result of this decision, the company's 2009 mainline
capacity will decline by more than one percentage point compared
to previous guidance provided in October.

"Our fourth quarter and full-year 2008 results reflect the
difficulties all airlines faced last year, but we believe our
steps to reduce capacity, bolster liquidity, and improve revenue
helped us better manage the challenges of record fuel prices and a
weak economy," said AMR Chairman and CEO Gerard Arpey.

"While significant hurdles remain, I am guardedly optimistic we
can regain momentum in 2009," Mr. Arpey said.

"Despite the difficult economic environment, we expect to be
solidly profitable in 2009 driven by lower fuel costs, capacity
discipline, and merger synergies," said Richard Anderson, Delta's
chief executive officer.  "Delta people have a great track record
for achieving their goals, and I am confident that 2009 will be
another successful year."

"Delta's proactive decision to reduce domestic capacity during
2008 mitigated the impact of the decline in demand we saw over the
course of the fourth quarter. We expect the worldwide economy to
be difficult throughout 2009; however, if fuel prices remain at
current levels, we believe the benefit of lower fuel prices will
more than offset the revenue decline." said Edward Bastian,
Delta's president.  "Delta has the tools required to manage
through these tough economic times -- with the broadest, most
diverse network in the industry; an estimated $2 billion in annual
merger synergies to be obtained; best-in-class costs; a solid
liquidity balance; unmatched fleet flexibility; and the discipline
and drive of the new Delta team."

Delta projects that consolidated passenger revenue in 2009 will be
down 4% to $4.8 billion.  Fuel price will be $2.15 per gallon.
During the December 2008 quarter, Delta hedged 58% of its fuel
consumption, resulting in an average fuel price of $2.90 per
gallon -- included in the fuel price is $507 million in fuel hedge
losses in the fourth quarter.  In 2007, when Delta paid $2.21 a
gallon, it noted that its operating results were significantly
impacted by changes in the price and availability of aircraft
fuel. In 2007, its average fuel price per gallon rose 5% to $2.21,
as compared to an average price of $2.10 in 2006, which was 15%
higher than our average price of $1.79 in 2005.

UAL believes that for full year 2009 revenues will be down 8% to
7%.  United said it is on track to complete the previously
announced removal of 100 aircraft from its fleet by the end of
2009.   United added it is taking additional steps in 2009 to
reduce overhead costs.  The company will further reduce the number
of salaried and management employees by approximately 1,000
positions by the end of 2009. This is in addition to the 1,500
positions the company announced in the second quarter, and when
completed, will bring the total reduction in its salaried and
management staff to approximately 2,500, or nearly 30%, since the
beginning of 2008.

"Last year was by any measure a challenging year -- defined by
unprecedented volatility and unpredictability, but for United it
was also characterized by steady and durable improvements," said
Glenn Tilton, United's chairman, president and CEO. "Our
management team made timely decisions that resulted in fundamental
improvements across our business, which will hold us in good stead
in 2009."

Alaska Air Group, which operates Alaska Air and Horizon Air, noted
that excluding special items, it had net income of $16.4 million
in the 4th quarter of 2008 compared to a $17.9 million net loss in
the same period in 2007.  "In a year of unprecedented volatility
that included soaring fuel prices and an economic meltdown, we
were pleased to eke out a small profit for 2008, excluding special
items, and be one of only a few major airlines to do so," said
Bill Ayer, Alaska Air Group's chairman and chief executive
officer.  "Our concerted efforts to control costs, improve our
operation and tailor our schedule to better match customer demand
have prepared us to face whatever hurdles the current year
brings."

According to Mr. Parker, USAir CEO, measures executed by the
airlines before aimed at offsetting high fuel prices in 2008 have
significantly softened the blow from the economic downturn that
the airline industry now faces.  "As we begin the new year, US
Airways is well prepared for a difficult global macroeconomic
environment.  We are running a great operation, have restructured
our business model through the introduction of new fees, reduced
capacity and increased our liquidity. With the help of falling
fuel prices, we believe we are well positioned for the challenges
ahead," concluded Mr. Parker.

Larry Kellner, Continental's chairman and chief executive officer,
said, "While there are continuing hard times ahead, thanks to our
team, we are well-positioned to maintain our place as an industry
leader."  Continental said it will inaugurate daily nonstop
service between New York and Shanghai in March 2009.

For the full year 2009, JetBlue expects to report an operating
margin between 12 and 14%.  Capacity, according to JetBlue, for
the full year 2009 is expected to decrease between zero and 2%
over 2008 and stage length is expected to decrease about 6% over
full year 2008.

             Full Year 2008 Net Profit for Southwest

The usually profitable Southwest Airlines also posted a fourth
quarter loss -- $56,000,000 net loss.  However, Southwest noted
that excluding special charges and other items, its fourth quarter
2008 net income was $61 million, bringing it to its 71st
consecutive quarter of profitability.

Gary C. Kelly, CEO of Southwest, stated: "We are very proud to
report another profitable year in one of the most difficult years
in aviation's 100-year-plus history.  We certainly had our
challenges in 2008, but thanks to the extraordinary efforts and
Warrior Spirit of our People, we persevered to report our 36th
consecutive year of profitability."

"We celebrated many operational successes throughout 2008 and
enhanced our already exceptional Brand and Customer Experience.
With one full year of our new boarding system and Business Select
product offering, the Customer response has been overwhelmingly
favorable. We've made significant advancements in our revenue
management and network optimization capabilities.  And, we've made
great progress on the technology side to lay the foundation for
improved Customer Service, a new southwest.com, a new Rapid
Rewards program, and international codeshare agreements with
WestJet to Canada and Volaris to Mexico.

"Despite the difficult credit markets, we were able to boost our
liquidity by $1.1 billion during fourth quarter 2008 through
several financing transactions to end the year with $1.8 billion
in unrestricted cash and short-term investments. After yearend, we
raised an additional $173 million in cash upon the closing of the
second tranche of our sale and leaseback transaction for an
additional five of our 737-700 aircraft.

"Due to the rapid collapse in energy prices during fourth quarter
2008, we substantially reduced our net fuel hedge position to
approximately ten percent of our estimated fuel gallons in each
year from 2009 through 2013.  Based on this current 2009 portfolio
and future market prices for energy (as of January 20, 2009), we
estimate our economic fuel costs per gallon, including fuel taxes,
to be approximately $1.80 and under $1.90, for first quarter and
full year 2009, respectively.  This current full year 2009
projection is more than $1 billion lower than we were projecting
last summer for 2009.

                       About AirTran Airways

AirTran Airways, a subsidiary of AirTran Holdings, Inc. (NYSE:
AAI), a Fortune 1000 company, is ranked number one in the 2008
Airline Quality Rating study. The airline offers coast-to-coast
flights, North America's newest all-Boeing fleet, friendly service
and Business Class and complimentary XM Satellite Radio on every
flight. To book a flight, visit http://www.airtran.com.

                           *     *     *

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

                      About Delta Air Lines

With its acquisition of Northwest Airlines, Atlanta, Georgia-based
Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or
http://www.nwa.com/-- is now the world's largest airline.  From
its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St.
Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its
Northwest subsidiary and Delta Connection carriers offer service
to more than 376 destinations worldwide in 66 countries and serves
more than 170 million passengers each year.  Delta's marketing
alliances allow customers to earn and redeem either SkyMiles or
WorldPerks on more than 16,000 daily flights offered by SkyTeam
and other partners.

The merger closed on October 29, 2008.

Prior to the merger, Delta was the world's second-largest airline
in terms of passengers carried and Northwest was the world's
fourth largest airline.

Northwest and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R.
Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at
Cadwalader, Wickersham & Taft LLP in Washington, represented the
Northwest Debtors in their restructuring efforts. The Official
Committee of Unsecured Creditors retained Scott L. Hazan, Esq., at
Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy
counsel.  When the Northwest Debtors filed for bankruptcy, they
listed $14.4 billion in total assets and
$17.9 billion in total debts.  On May 21, 2007, the Court
confirmed the Northwest Debtors' amended plan.  That amended plan
took effect May 31, 2007.  (Northwest Airlines Bankruptcy News
Issue No. 114; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).

Delta and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall
S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta
Debtors in their restructuring efforts.  Timothy R. Coleman at The
Blackstone Group L.P. provided the Delta Debtors with financial
advice.  Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provided the Official
Committee of Unsecured Creditors with legal advice. John McKenna,
Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman
at Mesirow Financial Consulting, LLC, served as the Committee's
financial advisors.  On April 25, 2007, the Court confirmed the
Delta Debtors' plan.  That plan became effective on April 30,
2007.  The Court entered a final decree closing 17 cases on Sept.
26, 2007.  (Delta Air Lines Bankruptcy News; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).

                     About United Airlines

United Airlines (NASDAQ: UAUA) operates more than 3,000* flights a
day on United and United Express to more than 200 U.S. domestic
and international destinations from its hubs in Los Angeles, San
Francisco, Denver, Chicago and Washington, D.C. With key global
air rights in the Asia-Pacific region, Europe and Latin America,
United is one of the largest international carriers based in the
United States. United also is a founding member of Star Alliance,
which provides connections for our customers to 912 destinations
in 159 countries worldwide. United's 49,500 employees reside in
every U.S. state and in many countries around the world. News
releases and other information about United can be found at the
company's Web site at united.com.

                            *    *    *

As reported in the Troubled Company Reporter on July 29, 2008,
Standard & Poor's Ratings Services lowered its ratings on UAL
Corp. and subsidiary United Air Lines Inc. (both rated B-
/Negative/--), including lowering the long-term corporate credit
ratings on both entities to 'B-' from 'B', and removed the ratings
from CreditWatch, where they had been placed with negative
implications May 22, 2008, as part of an industrywide review.  The
outlook is negative.

                         About US Airways

US Airways, along with US Airways Shuttle and US Airways Express,
operates more than 3,100 flights per day and serves 200
communities in the U.S., Canada, Europe, the Caribbean and Latin
America. The airline employs nearly 34,000 aviation professionals
worldwide and is a member of the Star Alliance network, which
offers our customers more than 16,500 daily flights to 912
destinations in 159 countries worldwide. Travel + Leisure Magazine
named US Airways as one of the top-three airlines for 2008 in on-
time performance for the year (based on Department of
Transportation data for Sept. 1, 2007 through Aug. 31, 2008). And
for the tenth consecutive year, the airline received a Diamond
Award for maintenance training excellence from the Federal
Aviation Administration (FAA) for its Charlotte, North Carolina
hub line maintenance facility. For more company information, visit
usairways.com. (LCCF)

                          About JetBlue

New York-based JetBlue Airways has created a new airline category
based on value, service and style. Known for its award-winning
service and free TV as much as its low fares, JetBlue is now
pleased to offer customers Lots of Legroom and super-spacious Even
More Legroom seats. JetBlue introduced complimentary in-flight e-
mail and instant messaging services on aircraft "BetaBlue," a
first among U.S. domestic airlines. JetBlue is also America's
first and only airline to offer its own Customer Bill of Rights,
with meaningful and specific compensation for customers
inconvenienced by service disruptions within JetBlue's control.
Visit www.jetblue.com/promise for details. JetBlue serves 52
cities with 600 daily flights. New service to San Jose, Costa
Rica, begins in 2009. With JetBlue, all seats are assigned, all
travel is ticketless, all fares are one-way, and an overnight stay
is never required. For information or reservations call 1-800-
JETBLUE (1-800-538-2583) or visit www.jetblue.com.

                    About Continental Airlines

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

                          *     *     *

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

Continental Airlines, Inc. reported a working capital deficit of
US$202 million, with current assets of US$4.713 billion and
current liabilities of US$4.915 billion.

At Dec. 31, 2007, the Company had a positive working capital of
US$112 million, with US$4.561 billion in current assets and
US$4.449 billion in current liabilities.

As of Sept. 30, 2008, the Company had US$2.9 billion in
unrestricted cash, cash equivalents and short-term investments,
which is US$83 million higher than at Dec. 31, 2007. At Sept. 30,
2008, the Company also had US$164 million of restricted cash, cash
equivalents and short-term investments, which is primarily
collateral for estimated future workers' compensation claims,
credit card processing contracts, letters of credit and
performance bonds. Restricted cash, cash equivalents and short-
term investments at Dec. 31, 2007, totaled US$179 million.
Additionally, the Company held student loan-related auction
rate securities reported as long-term investments at Sept. 30,
2008 with a par value of US$147 million and a fair value of
US$130 million.


ALLIED CAPITAL: Fitch Downgrades Issuer Default Rating to 'BB'
--------------------------------------------------------------
Fitch Ratings has downgraded Allied Capital Corporation's Issuer
Default Rating and debt ratings:

  -- Long-term IDR downgraded to 'BB' from 'BBB';
  -- Senior unsecured debt downgraded to 'BB' from 'BBB'; and
  -- Secured debt downgraded to 'BB' from 'BBB'.

All ratings are on Rating Watch Negative. Approximately
$1.9 billion of debt is affected by these actions.

The downgrade reflects the expectation that Allied will be in
violation of its 200% asset coverage requirement following the
recognition of significant unrealized portfolio depreciation in
the fourth quarter of 2008.  The reduction in asset coverage will
result in a covenant violation on Allied's revolving credit
facility and private notes, which will result in an event of
default, unless the company can successfully re-negotiate
covenants with debt holders.  The reduction in asset coverage will
also violate Business Development Company requirements, which
means that Allied will be unable to borrow additional funds, and
dividend declarations will be limited until it is back above 200%.

In December 2008, Allied obtained relief on its tangible net worth
and interest coverage covenants in exchange for a higher interest
yield and a security interest in a large portion of its assets.
Allied planned to de-leverage materially in coming quarters in
order to build the cushion on its asset coverage ratio, but market
events in the 2008 fourth quarter have had a significant affect on
portfolio valuation.

Should Allied obtain relief from debt holders, Fitch believes the
company will be looking to sell assets in order to de-leverage.
Proceeds from asset sales are likely to be below management's
estimate of intrinsic value given the current environment and
Allied's relatively weak bargaining position.  Fitch believes this
process will take some time to complete, and Allied will be unable
to take advantage of attractive investment opportunities should
the market begin to turn in 2009.

The resolution of the Rating Watch Negative will be driven by
Allied's ability to obtain covenant waivers from private debt
holders in a timely manner; however, even if successful, the
Rating Outlook will likely be Negative given volatile market
conditions.  Failure to successfully re-negotiate covenants will
result in an event of default on private notes and the revolving
credit facility and could lead to an acceleration of payments on
public notes outstanding.

Rating stability will be driven by stabilization of market spreads
and valuation multiples, the ability to de-lever in coming
quarters in order to obtain compliance with asset coverage, and
Allied's ability to access the debt and equity markets to raise
capital when market conditions improve.


ALLIED CAPITAL: Moody's Downgrades Senior Unsec. Rating to 'Ba2'
----------------------------------------------------------------
Moody's Investors Service downgraded Allied Capital Corporation's
senior unsecured rating to Ba2 and placed its ratings under review
for further downgrade.

The downgrade and review for downgrade follows Allied's
announcement of potential covenant violations in its private notes
and revolving credit facility which could accelerate maturity of
these obligations if forbearance is not provided by the lenders
under these agreements.  Allied does not have alternative
liquidity sources to service acceleration of these debts, however
Moody's believe it is likely the company will receive some form of
forbearance, at least temporarily, in relation to these
violations.

This is the second time in the past quarter Allied has needed to
seek amendments to these agreements.  Although Allied may be
successful in obtaining additional amendments, this announcement
signals that the company's business model carries significant
event risk in times of economic stress.  "Moody's believes
Allied's business model characteristics -- highly levered and
illiquid investments, exposure to market-to-market accounting and
an inability to retain capital due to dividend requirements - are
inconsistent with an investment grade rating," said Moody's Vice
President and Senior Credit Officer Craig Emrick.

Allied announced that it believes its asset coverage ratio (the
ratio of assets to debt) will be less than 200% at December 31,
2008 and that it will be unable to complete the process of
granting to its private notes and revolving credit facility a
first priority lien on its assets by January 30, 2009.  Either of
these would represent a covenant violation that could accelerate
maturity of this debt.  At September 30, 2008 approximately
$1.1 billion of private notes were outstanding and $170 million
drawn on the revolving credit facility.

Allied was in danger of violating the minimum net worth covenants
in certain of these agreements at the end of third quarter but was
able to successfully amend such requirements.  However, in the
current environment, it is uncertain if Allied will be able to
structure a new covenant package that reduces the risk of future
covenant violations.

Maintenance of a coverage ratio greater than 200% is also required
under the terms of Allied's public notes and the Investment
Company Act of 1940.  However, the consequences of violating these
requirement is limited to the company being unable to incur
additional indebtedness.  Moody's does not believe violations of
the covenants in Allied's private notes and revolving credit
facility would trigger cross-default in the company's public
notes.

Allied's announcement that its asset coverage ratio could fall
below 200% signals that the company believes they will report a
sizeable fourth quarter loss.  This would represent Allied's fifth
quarterly loss in the past six quarters.

Positives to the company's credit quality are 1) its expertise and
scale in private equity investing, 2) diversification (both by
geography and business sector) and granularity of its investment
portfolio, and 3) large equity base as mandated by business
development company regulation.

During its review, Moody's will focus on the company's ability to
renegotiate the covenants in its private notes and revolving
credit facility.  Additionally, the review will focus on trends in
portfolio asset quality in the fourth quarter.

The last rating action was on November 10, 2008 when the ratings
were downgraded to Baa3 from Baa2 and placed on review for
downgrade.

Downgrades:

Issuer: Allied Capital Corporation

  -- Issuer Rating, Downgraded to Ba2 from Baa3

  -- Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2
     from Baa3

  -- Senior Unsecured Shelf, Downgraded to (P)Ba2 from (P)Baa3

Allied Capital Corporation is based in Washington DC and reported
total assets of $4.6 billion at September 30, 2008.


ALTERNATE FUELS: Case Summary & Five Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Alternate Fuels, Inc.
        2706 E. 8th
        Pittsburg, KS 66762

Bankruptcy Case No.: 09-20173

Type of Business: The Debtor engages in surface coal mining.

Chapter 11 Petition Date: January 28, 2009

Court: District of Kansas (Kansas City)

Debtor's Counsel: Gary H. Hanson, Esq.
                  gary@stumbolaw.com
                  2887 Macvicar
                  Topeka, KS 66611
                  Tel: (785) 267-3410

Total Assets: $4,910,807

Total Debts: $10,969,807

The Debtor's Largest Unsecured Creditors:

   Entity                      Nature of Claim    Claim Amount
   ------                      ---------------    ------------
Travelers Casualty &           indemnity contract $1,036,348
Surety Co
One Tower Square
Hartford, CT 06183

Continental Casualty           indemnity contract $998,839
Company
333 S Wabash Ave.
Chicago, IL
60685-4107

Beachner                       indemnity contract $677,250
Construction
Company, Inc
P.O. Box 128
Sixth and Central
St. Paul, KS 66771

State of Missouri                                 $512,209
Missouri Department
of Natural Resources

John Warmack                   loan               $22,692

The petition was signed by Larry W. Pommier, president.


AMCORE FINANCIAL: Weak Asset Quality Cues Fitch's Junk Ratings
--------------------------------------------------------------
Fitch Ratings has downgraded these long-term Issuer Default
Ratings and Individual Ratings on AMCORE Financial, Inc., and
AMCORE Bank, N.A.:

AMFI

  -- Long-term IDR to 'CCC' from 'BB-';
  -- Individual to 'E' from 'D'.

AMCORE Bank

  -- Long-term IDR to 'B-' from 'BB';
  -- Individual to 'E' from 'C/D'.

The rating downgrade reflects AMFI's weak asset quality, pressured
capital and parent company liquidity positions, and an increased
reliance on wholesale funding.  The ratings at the bank and
holding company highlight Fitch's view that AMFI is under
significant financial pressure.  Its financial flexibility is
becoming more limited and meaningful actions to address weaknesses
highlighted below are likely needed in the near term to avoid
further strain.

AMFI's level of problem assets deteriorated again during fourth
quarter-2008 due to the continued weakening of the economic
environment.  Nonperforming assets now represent a considerable
75% of equity and reserves.  Fitch notes that AMFI has taken
several steps to enhance its credit risk management function
during the year.  Nonetheless, problem assets, including loans 90
days or more past due, have increased to $225 million during 2008,
while the reserve for loan losses has increased only
$83 million.  The trend in and level of problem assets, combined
with the weakening economic environment, suggests the potential
for elevated credit costs to continue well into 2009.

Regulatory capital ratios do not afford much cushion above
regulatory well-capitalized guidelines.  Although AMFI indicated
that the company continues to explore capital raising activities,
no assurances can be made during this difficult operating
environment.  Consequently, additional losses and high loan loss
provisioning needs in 2009 will pressure the bank's regulatory and
other capital measures.  Fitch notes that there are currently
numerous government initiatives available to the banking industry
providing liquidity and capital.  Although the regulatory programs
would likely provide relief to AMFI, the government's willingness
to provide capital to AMFI is uncertain at this time.

The lower rating for the holding company relative to the bank
highlights Fitch's view that the more acute and immediate
challenges are present at the holding company level.  The parent
company liquidity profile also remains under strain.  With
approximately $10 million in cash as of Dec. 31, 2008 and no bank
dividend capacity in the foreseeable future, AMFI's ability to
meet parent obligations is challenged.  AMFI has taken some steps
to address this issue and is currently attempting to execute
additional actions to enhance parent company flexibility.

Fitch also notes that over the past twelve months, AMFI has
increased its reliance on wholesale funding.  Bank-issued deposit
funding was down 18% for the year, while wholesale funding was up
42% during 2008.  As of Sept. 30, 2008, AMFI reported $1.1 billion
in brokered deposits, or 28% of total deposits.  AMFI's ability to
issue brokered deposits could become more difficult if the bank
falls below well-capitalized status, thereby requiring a waiver
from the regulators and less flexibility for AMFI to freely
establish interest rates for its deposit products.

Fitch has downgraded these ratings:

AMFI

  -- Long-term IDR to 'CCC' from 'BB-';
  -- Short-term IDR to 'C' from 'B';
  -- Individual to 'E' from 'D'.

AMCORE Bank, N.A.

  -- Long-term IDR to 'B-' from 'BB';
  -- Short-term IDR to 'C' from 'B';
  -- Individual to 'E' from 'C/D';
  -- Long-term deposits to 'B' from 'BB'.

In addition, Fitch has affirmed these:

AMFI

  -- Support '5';
  -- Support Floor 'NF'.

AMCORE Bank, N.A.

  -- Support '5';
  -- Support Floor 'NF';
  -- Short-term deposits 'B'.


AMOR DE BRAZIL: Files for Chapter 7 Liquidation
-----------------------------------------------
Joyce Smith at The Kansas City Star reports that Amor de Brazil of
Kansas City LLC has filed for Chapter 7 liquidation in the U.S.
Bankruptcy Court in Kansas City, leaving clients holding almost
$50,000 in gift certificates.

Kansas City Star relates that gift certificate holders are now
Amor de Brazil's unsecured creditors.  Court documents say that
total outstanding gift certificates were more than $48,634.

According to Kansas City Star, Amor de Brazil listed $452,056 in
assets and $219,760 in liabilities.  The report says that Amor de
Brazil's gross sales in 2007 were $1.5 million with net losses at
$216,641.

Kansas City Star states that the Amor de Brazil restaurant at
11920 Metcalf Avenue, Overland Park, closed two weeks ago.

Former Kansas City Chiefs football player Neil Smith, who
previously ran Copeland's of New Orleans before changing it to
Amor de Brazil in 2007, is listed as a guarantor of the lease,
while Al Copeland Jr. is listed as manager, according to Kansas
City Star.

Amor de Brazil of Kansas City LLC is a Brazilian barbecue
restaurant that featured a prix-fixe menu offering unlimited
helpings of meat roasted over an open flame and carved tableside
by gaucho chefs.


AMR CORP: 8 US Airlines Post 2008 Losses Totaling $19.6 Billion
---------------------------------------------------------------
Eight of the nine major U.S. airlines that have disclosed fourth
quarter and full year 2008 results have posted losses aggregating
$19.6 billion.  Only Southwest Airlines posted a net profit.

                                Net Profit         Net Profit
                             Full Year 2008      Full Year 2007
                             --------------      --------------
Delta Air Lines, Inc.       ($8,900,000,000)     $1,600,000,000
AMR Corp.                    (2,100,000,000)        504,000,000
Southwest Air Lines             178,000,000         645,000,000
UAL Corp.                    (5,348,000,000)        403,000,000
US Airways Group Inc.        (2,210,000,000)        427,000,000
Continental Airlines  Inc.     (585,000,000)        459,000,000
Alaska Air Group Inc.          (135,900,000)        124,300,000
Skywest Inc.                         --                  --
JetBlue Airways Corp.           (76,000,000)         41,000,000
AirTran Holdings, Inc.         (273,829,000)         52,683,000

Skywest is expected to release its fourth quarter 2008 results on
February 11.  The figures provided by JetBlue were pre-tax profits
(or losses).

                                Net Profit         Net Profit
                            4th Quarter '08     4th Quarter '07
                            ---------------     ---------------
Delta Air Lines, Inc.       ($1,400,000,000)       ($70,000,000)
AMR Corp.                      (340,000,000)        (69,000,000)
UAL Corp.                    (1,303,000,000)        (53,000,000)
Southwest Airlines              (56,000,000)        111,000,000
US Airways                     (541,000,000)        (79,000,000)
Continental Airlines           (266,000,000)        (32,000,000)
Alaska Air Group Inc.           (75,200,000)         (7,400,000)
Skywest Inc.                         --                  --
Jetblue Airways Corp.           (49,000,000)         (3,000,000)
AirTran Holdings, Inc.         (118,391,000)         (2,171,000)

                       High Fuel Jet Prices

The airlines said high fuel prices for most of 2008 have
contributed to their losses.

AMR, the parent of American Airlines, said that historically high
and volatile jet fuel prices continued to challenge it in the
fourth quarter of 2008.  AMR paid $133 million and $2.7 billion
more for fuel in the fourth quarter and for all of 2008,
respectively, than it would have paid at prevailing prices from
the corresponding prior-year periods.

Delta faced over $2 billion in increased fuel costs in 2008.
While fuel prices dropped in the fourth quarter 2008, Delta paid
for high fuel prices due to its fuel hedging contracts.  Delta
would have reported a $167 million net profit excluding special
items in the December 2008 quarter, if fuel had been purchased at
market prices.

UAL said the historic peak in prices and the impact on hedges
driven by the rapid decline resulted in a $2.9 billion increase in
cost compared to 2007 fuel prices.  UAL recorded $370 million in
cash losses on fuel hedges that settled in the quarter, as the
recent fall in fuel prices drove losses on hedges put in place
earlier in the year to mitigate the steep increase in prices that
had occurred in the second and third quarters of 2008. In
addition, the company also recorded non-cash, net mark-to-market
losses on its fuel hedges of $566 million.

US Airways Group Chairman and CEO Doug Parker stated, "Like other
airlines that have reported before us, our financial results
reflect the staggering increase in fuel prices that we faced
throughout most of 2008.  In fact, had our 2008 fuel price
including realized gains and losses on fuel hedging instruments
remained at 2007 levels, the company's fuel expense would have
been approximately $1.4 billion lower.

                  Lower Revenues Due to Recession

Delta Air Lines, which completed its merger with Northwest
Airlines in 2008, said that during the fourth quarter, on a
combined basis, passenger revenue fell 1%, or $54 million,
compared to the prior year period due to a 4% decline in capacity,
partially offset by a 3% increase in unit revenue.  These results
reflect the weakening of the revenue environment during the
quarter caused by the global economic recession.

According to UAL, total passenger revenue for the quarter
decreased 8.7% year-over- year as consolidated capacity declined
10.6%, consolidated yield increased 2.4% and load factor decreased
0.3 points.

Continental Airlines, which have been mentioned in possible merger
talks with other U.S. airlines in 2008, said weakening economic
conditions and highly volatile fuel prices presented financial
challenges for the airline in the fourth quarter 2008. Continental
recorded a fourth quarter net loss of $266 million.

Dave Barger, JetBlue's CEO, said that while he was appointed to
report a loss, he has been satisfied with JetBlue's performance in
2008.  "Against the backdrop of record fuel prices and
unprecedented economic challenges, we effectively managed our
capacity and strengthened our network.  We also made significant
progress in our efforts to further enhance the JetBlue experience
for our customers.  JetBlue's industry-leading unit revenue growth
throughout the year reflects the outstanding work of our
crewmembers.

"2008 was an especially tough and challenging year," said Bob
Fornaro, AirTran Airways' chairman, president and chief executive
officer. "We thank our dedicated, hard-working Crew Members and
our loyal customers for helping us overcome the many obstacles we
faced in 2008. Our Crew Members continue to strive to provide
exceptional customer service, and a high-quality product while
offering value to the traveling public. Despite the industry
challenge shifting from high oil costs to concerns regarding
consumer demand, our 2008 initiatives have us well positioned to
return to profitability in 2009."

                  Liquidity, Bankruptcy Concerns

Delta, UAL and AirTran said that they have strengthened their
liquidity that would allow them to face the challenges of 2009.

Michael Lowry, project manager for AVIATION WEEK's Top-
Performing Companies report, said in September 2008 that
USAirways, AMR, Northwest Airlines, AirTran and Continental would
have high bankruptcy risk in 2009.

The September report also said that USAir was a high risk to file
for bankruptcy again in 2008 -- it had entered and exited
bankruptcy protection twice -- but USAir has been able, so far, to
survive the crisis.  Only smaller airlines filed for bankruptcy in
2008.  These included Frontier Airlines, Skybus Airlines Inc.,
Aloha Airgroup Inc. and ATA Airlines Inc., who made its second
Chapter 11 filing.

Northwest Airlines has completed its merger with Delta Air to
form one of the world's largest airlines.  Delta noted that as of
Dec. 31, 2008, it had $6.1 billion in total liquidity and cash
collateral posted with hedge counterparties.  As of Dec. 31, 2007,
Delta had $3.3 billion in cash, cash equivalents and short-term
investments.

UAL said it completed several transactions during the fourth
quarter that helped strengthen its liquidity.  It raised
$215 million from aircraft financing transactions that closed
during the quarter along with $66 million in proceeds from asset
sales. The company also received net proceeds of $107 million
through equity issuances during the quarter.

AirTran noted that it ended the fourth quarter with $340.5 million
in unrestricted cash and investments, its highest year-end balance
since 2005.

                           2009 Outlook

Most of the airlines expect weak revenues in 2008, but expect
those revenues to be offset by lower fuel prices and savings from
cost cutting measures.  Some of the airlines have also disclosed
capacity cuts for 2009.

AMR has decided not to use MD-80s to backfill flying associated
with the seven 737s that no longer will be delivered in 2009.
Largely as a result of this decision, the company's 2009 mainline
capacity will decline by more than one percentage point compared
to previous guidance provided in October.

"Our fourth quarter and full-year 2008 results reflect the
difficulties all airlines faced last year, but we believe our
steps to reduce capacity, bolster liquidity, and improve revenue
helped us better manage the challenges of record fuel prices and a
weak economy," said AMR Chairman and CEO Gerard Arpey.

"While significant hurdles remain, I am guardedly optimistic we
can regain momentum in 2009," Mr. Arpey said.

"Despite the difficult economic environment, we expect to be
solidly profitable in 2009 driven by lower fuel costs, capacity
discipline, and merger synergies," said Richard Anderson, Delta's
chief executive officer.  "Delta people have a great track record
for achieving their goals, and I am confident that 2009 will be
another successful year."

"Delta's proactive decision to reduce domestic capacity during
2008 mitigated the impact of the decline in demand we saw over the
course of the fourth quarter. We expect the worldwide economy to
be difficult throughout 2009; however, if fuel prices remain at
current levels, we believe the benefit of lower fuel prices will
more than offset the revenue decline." said Edward Bastian,
Delta's president.  "Delta has the tools required to manage
through these tough economic times -- with the broadest, most
diverse network in the industry; an estimated $2 billion in annual
merger synergies to be obtained; best-in-class costs; a solid
liquidity balance; unmatched fleet flexibility; and the discipline
and drive of the new Delta team."

Delta projects that consolidated passenger revenue in 2009 will be
down 4% to $4.8 billion.  Fuel price will be $2.15 per gallon.
During the December 2008 quarter, Delta hedged 58% of its fuel
consumption, resulting in an average fuel price of $2.90 per
gallon -- included in the fuel price is $507 million in fuel hedge
losses in the fourth quarter.  In 2007, when Delta paid $2.21 a
gallon, it noted that its operating results were significantly
impacted by changes in the price and availability of aircraft
fuel. In 2007, its average fuel price per gallon rose 5% to $2.21,
as compared to an average price of $2.10 in 2006, which was 15%
higher than our average price of $1.79 in 2005.

UAL believes that for full year 2009 revenues will be down 8%
to 7%.  United said it is on track to complete the previously
announced removal of 100 aircraft from its fleet by the end of
2009.   United added it is taking additional steps in 2009 to
reduce overhead costs.  The company will further reduce the number
of salaried and management employees by approximately 1,000
positions by the end of 2009. This is in addition to the 1,500
positions the company announced in the second quarter, and when
completed, will bring the total reduction in its salaried and
management staff to approximately 2,500, or nearly 30% , since the
beginning of 2008.

"Last year was by any measure a challenging year -- defined by
unprecedented volatility and unpredictability, but for United it
was also characterized by steady and durable improvements," said
Glenn Tilton, United's chairman, president and CEO. "Our
management team made timely decisions that resulted in fundamental
improvements across our business, which will hold us in good stead
in 2009."

Alaska Air Group, which operates Alaska Air and Horizon Air, noted
that excluding special items, it had net income of $16.4 million
in the 4th quarter of 2008 compared to a $17.9 million net loss in
the same period in 2007.  "In a year of unprecedented volatility
that included soaring fuel prices and an economic meltdown, we
were pleased to eke out a small profit for 2008, excluding special
items, and be one of only a few major airlines to do so," said
Bill Ayer, Alaska Air Group's chairman and chief executive
officer.  "Our concerted efforts to control costs, improve our
operation and tailor our schedule to better match customer demand
have prepared us to face whatever hurdles the current year
brings."

According to Mr. Parker, USAir CEO, measures executed by the
airlines before aimed at offsetting high fuel prices in 2008 have
significantly softened the blow from the economic downturn that
the airline industry now faces.  "As we begin the new year, US
Airways is well prepared for a difficult global macroeconomic
environment.  We are running a great operation, have restructured
our business model through the introduction of new fees, reduced
capacity and increased our liquidity. With the help of falling
fuel prices, we believe we are well positioned for the challenges
ahead," concluded Parker.

Larry Kellner, Continental's chairman and chief executive officer,
said, "While there are continuing hard times ahead, thanks to our
team, we are well-positioned to maintain our place as an industry
leader."  Continental said it will inaugurate daily nonstop
service between New York and Shanghai in March 2009.

For the full year 2009, JetBlue expects to report an operating
margin between 12 and 14% .  Capacity, according to JetBlue, for
the full year 2009 is expected to decrease between zero and 2%
over 2008 and stage length is expected to decrease about 6% over
full year 2008.

             Full Year 2008 Net Profit for Southwest

The usually profitable Southwest Airlines also posted a fourth
quarter loss -- $56,000,000 net loss.  However, Southwest noted
that excluding special charges and other items, its fourth quarter
2008 net income was $61 million, bringing it to its 71st
consecutive quarter of profitability.

Gary C. Kelly, CEO of Southwest, stated: "We are very proud to
report another profitable year in one of the most difficult years
in aviation's 100-year-plus history.  We certainly had our
challenges in 2008, but thanks to the extraordinary efforts and
Warrior Spirit of our People, we persevered to report our 36th
consecutive year of profitability."

"We celebrated many operational successes throughout 2008 and
enhanced our already exceptional Brand and Customer Experience.
With one full year of our new boarding system and Business Select
product offering, the Customer response has been overwhelmingly
favorable. We've made significant advancements in our revenue
management and network optimization capabilities.  And, we've made
great progress on the technology side to lay the foundation for
improved Customer Service, a new southwest.com, a new Rapid
Rewards program, and international codeshare agreements with
WestJet to Canada and Volaris to Mexico.

"Despite the difficult credit markets, we were able to boost our
liquidity by $1.1 billion during fourth quarter 2008 through
several financing transactions to end the year with $1.8 billion
in unrestricted cash and short-term investments. After yearend, we
raised an additional $173 million in cash upon the closing of the
second tranche of our sale and leaseback transaction for an
additional five of our 737-700 aircraft.

"Due to the rapid collapse in energy prices during fourth quarter
2008, we substantially reduced our net fuel hedge position to
approximately ten percent of our estimated fuel gallons in each
year from 2009 through 2013.  Based on this current 2009 portfolio
and future market prices for energy (as of January 20, 2009), we
estimate our economic fuel costs per gallon, including fuel taxes,
to be approximately $1.80 and under $1.90, for first quarter and
full year 2009, respectively.  This current full year 2009
projection is more than $1 billion lower than we were projecting
last summer for 2009.

                       About AirTran Airways

AirTran Airways, a subsidiary of AirTran Holdings, Inc. (NYSE:
AAI), a Fortune 1000 company, is ranked number one in the 2008
Airline Quality Rating study. The airline offers coast-to-coast
flights, North America's newest all-Boeing fleet, friendly service
and Business Class and complimentary XM Satellite Radio on every
flight. To book a flight, visit http://www.airtran.com.

                           *     *     *

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

                      About Delta Air Lines

With its acquisition of Northwest Airlines, Atlanta, Georgia-based
Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or
http://www.nwa.com/-- is now the world's largest airline.  From
its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St.
Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its
Northwest subsidiary and Delta Connection carriers offer service
to more than 376 destinations worldwide in 66 countries and serves
more than 170 million passengers each year.  Delta's marketing
alliances allow customers to earn and redeem either SkyMiles or
WorldPerks on more than 16,000 daily flights offered by SkyTeam
and other partners.

The merger closed on October 29, 2008.

Prior to the merger, Delta was the world's second-largest airline
in terms of passengers carried and Northwest was the world's
fourth largest airline.

Northwest and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R.
Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at
Cadwalader, Wickersham & Taft LLP in Washington, represented the
Northwest Debtors in their restructuring efforts. The Official
Committee of Unsecured Creditors retained Scott L. Hazan, Esq., at
Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy
counsel.  When the Northwest Debtors filed for bankruptcy, they
listed $14.4 billion in total assets and
$17.9 billion in total debts.  On May 21, 2007, the Court
confirmed the Northwest Debtors' amended plan.  That amended plan
took effect May 31, 2007.  (Northwest Airlines Bankruptcy News
Issue No. 114; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).

Delta and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall
S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta
Debtors in their restructuring efforts.  Timothy R. Coleman at The
Blackstone Group L.P. provided the Delta Debtors with financial
advice.  Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provided the Official
Committee of Unsecured Creditors with legal advice. John McKenna,
Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman
at Mesirow Financial Consulting, LLC, served as the Committee's
financial advisors.  On April 25, 2007, the Court confirmed the
Delta Debtors' plan.  That plan became effective on April 30,
2007.  The Court entered a final decree closing 17 cases on Sept.
26, 2007.  (Delta Air Lines Bankruptcy News; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).

                     About United Airlines

United Airlines (NASDAQ: UAUA) operates more than 3,000* flights a
day on United and United Express to more than 200 U.S. domestic
and international destinations from its hubs in Los Angeles, San
Francisco, Denver, Chicago and Washington, D.C. With key global
air rights in the Asia-Pacific region, Europe and Latin America,
United is one of the largest international carriers based in the
United States. United also is a founding member of Star Alliance,
which provides connections for our customers to 912 destinations
in 159 countries worldwide. United's 49,500 employees reside in
every U.S. state and in many countries around the world. News
releases and other information about United can be found at the
company's Web site at united.com.

                            *    *    *

As reported in the Troubled Company Reporter on July 29, 2008,
Standard & Poor's Ratings Services lowered its ratings on UAL
Corp. and subsidiary United Air Lines Inc. (both rated B-
/Negative/--), including lowering the long-term corporate credit
ratings on both entities to 'B-' from 'B', and removed the ratings
from CreditWatch, where they had been placed with negative
implications May 22, 2008, as part of an industrywide review.  The
outlook is negative.

                         About US Airways

US Airways, along with US Airways Shuttle and US Airways Express,
operates more than 3,100 flights per day and serves 200
communities in the U.S., Canada, Europe, the Caribbean and Latin
America. The airline employs nearly 34,000 aviation professionals
worldwide and is a member of the Star Alliance network, which
offers our customers more than 16,500 daily flights to 912
destinations in 159 countries worldwide. Travel + Leisure Magazine
named US Airways as one of the top-three airlines for 2008 in on-
time performance for the year (based on Department of
Transportation data for Sept. 1, 2007 through Aug. 31, 2008). And
for the tenth consecutive year, the airline received a Diamond
Award for maintenance training excellence from the Federal
Aviation Administration (FAA) for its Charlotte, North Carolina
hub line maintenance facility. For more company information, visit
usairways.com. (LCCF)

                          About JetBlue

New York-based JetBlue Airways has created a new airline category
based on value, service and style. Known for its award-winning
service and free TV as much as its low fares, JetBlue is now
pleased to offer customers Lots of Legroom and super-spacious Even
More Legroom seats. JetBlue introduced complimentary in-flight e-
mail and instant messaging services on aircraft "BetaBlue," a
first among U.S. domestic airlines. JetBlue is also America's
first and only airline to offer its own Customer Bill of Rights,
with meaningful and specific compensation for customers
inconvenienced by service disruptions within JetBlue's control.
Visit www.jetblue.com/promise for details. JetBlue serves 52
cities with 600 daily flights. New service to San Jose, Costa
Rica, begins in 2009. With JetBlue, all seats are assigned, all
travel is ticketless, all fares are one-way, and an overnight stay
is never required. For information or reservations call 1-800-
JETBLUE (1-800-538-2583) or visit www.jetblue.com.

                    About Continental Airlines

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

                          *     *     *

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

Continental Airlines, Inc. reported a working capital deficit of
US$202 million, with current assets of US$4.713 billion and
current liabilities of US$4.915 billion.

At Dec. 31, 2007, the Company had a positive working capital of
US$112 million, with US$4.561 billion in current assets and
US$4.449 billion in current liabilities.

As of Sept. 30, 2008, the Company had US$2.9 billion in
unrestricted cash, cash equivalents and short-term investments,
which is US$83 million higher than at Dec. 31, 2007. At Sept. 30,
2008, the Company also had US$164 million of restricted cash, cash
equivalents and short-term investments, which is primarily
collateral for estimated future workers' compensation claims,
credit card processing contracts, letters of credit and
performance bonds. Restricted cash, cash equivalents and short-
term investments at Dec. 31, 2007, totaled US$179 million.
Additionally, the Company held student loan-related auction
rate securities reported as long-term investments at Sept. 30,
2008 with a par value of US$147 million and a fair value of
US$130 million.


ANTARTICA CFO: Moody's Junks Rating on EUR29.250 Mil. Notes
-----------------------------------------------------------
Moody's Investors Service announced that it has downgraded these
debt securities of Antarctica CFO I Limited:

EUR 29,250,000 Class B Deferrable Floating Rate Notes due 2014

  -- Current Rating: Ba3, on review for possible downgrade
  -- Prior Rating: Ba1, on review for possible downgrade

EUR 29,250,000 Class C Deferrable Floating Rate Notes due 2014

  -- Current Rating: Caa2, on review for possible downgrade
  -- Prior Rating: B3, on review for possible downgrade

Originally rated on 30 July 2007, Antarctica CFO I Limited is a
collateralized fund obligation backed by equity interests in a
diversified fund of hedge funds.  The fund is managed by
Antarctica Asset Management Ltd.

The last rating action on the affected securities was on
December 22, 2008 when several debt tranches were downgraded and
all debt tranches remained on review for possible downgrade.  The
rating actions reflect concern over the vehicle's ability to
liquidate portfolio assets under stressed market conditions within
the covenanted timeframe.  Moody's incorporated an increase in
suspensions and gating of redemptions within hedge funds at the
underlying portfolio level into its rating analysis.  A negative
annual drift of 5% was utilized to reflect the recent downward
trend in the returns of portfolios of hedge funds.  A single
factor volatility assumption of 11% was used to simulate the NAV
process along with the standard volatility stresses.


ARES VII: Fitch Junks Ratings on $51 Million Class C Notes
----------------------------------------------------------
Fitch Ratings downgrades four classes of notes issued by Ares VII,
Ltd./Corp. Additionally, Fitch assigns outlooks to three classes.

These rating actions are effective immediately:

  -- $141,248,208 class A-1a downgraded to 'AA' from 'AAA';
     Outlook Stable;

  -- $161,022,957 class A-1b downgraded to 'AA' from 'AAA';
     Outlook Stable;

  -- $36,000,000 class B downgraded to 'BBB' from 'A'; Outlook
     Stable;

  -- $51,000,000 class C downgraded to 'CCC' from 'BBB-'.

Ares VII is a cash flow collateralized loan obligation that closed
in May 2003 and is managed by Ares Management, LLC.  Ares VII is
currently in its amortization period which began in May 2008. The
portfolio is comprised of 85.6% senior secured loans with the
remainder of the portfolio being second lien loans.  The three
largest Fitch industry concentrations in Ares VII are computer &
electronics (12.9%), broadcasting & media (12.4%) and health care
(10.9%).

The downgrades to the classes A-1a, A-1b, B and C notes are the
result of negative credit migration in the portfolio.  According
to the latest trustee report dated Dec. 24, 2008, the average
credit quality of the portfolio is 'B/B-' compared to 'B+' at last
review in January of 2008.

Approximately 11.6% and 34.5% of the portfolio is either on Rating
Watch Negative or has a Negative Outlook, respectively, by at
least one rating agency.  In accordance with Fitch's Corporate CDO
criteria, Fitch makes standard adjustments for any names on Rating
Watch Negative or Outlook Negative, reducing such ratings for
default analysis by two and one notch, respectively.

Of the portfolio, 16.5% was rated 'CCC+' or lower as reported by
the trustee.  Defaulted securities account for 2.8% of the
portfolio.  As a result of the deterioration in the portfolio, the
class C overcollateralization test is failing at 93.4% vs. the
threshold of 100.5%.  Class C received $19.2 million in additional
coupon and participation payments in addition to the stated coupon
through the Nov. 12, 2008 distribution date.  Due to the current
failure of the C OC Test, these distributions in excess of the
class C stated coupon which is positioned below the C OC Test cure
payments in the interest waterfall have ceased and are unlikely to
continue in the future.

Since May 2008, the classes A-1a and A-1b paid down $8.8 and
$10 million, respectively.  While this amortization has improved
credit enhancement levels for these classes, the expected losses
on defaulted and distressed assets offset this positive
development. Furthermore, the pace of the future paydowns is
likely to slow as refinancings by the underlying loan obligors is
likely to become more challenging.

Included in the review, Fitch conducted cash flow modeling to
measure the breakeven default rates relative to the cumulative
default rates associated with the current ratings of the note
liabilities.  The cash flow model incorporates the transaction's
structural features and updated default timing and interest rate
scenarios.

The ratings of the classes A-1a and A-1b notes address the
likelihood that investors will receive full and timely payments of
interest per the transaction's governing documents, as well as the
stated balance of principal by the legal final maturity date.  The
ratings of the class B and C notes address the likelihood that
investors will receive ultimate and compensating interest
payments, excluding the class C additional coupon and
participation payments, per the transaction's governing documents,
as well as the stated balance of principal by the legal final
maturity date.


ATA AIRLINES: To Sell Reagan Airport Slots to Airtran for $1.34MM
-----------------------------------------------------------------
ATA Airlines Inc., which has sold most of its assets to Southwest
Airlines, Inc., seeks approval from the U.S. Bankruptcy Court for
the Southern District of Indiana to sell its takeoff and landing
operating slots at the Ronald Reagan Airport to AirTran Airways,
Inc. for $1.34 million.

ATA Airlines disclosed in court papers that it has inked a
purchase agreement with AirTran for the acquisition of its two
daily takeoff and landing operating slots at the Ronald Reagan
Airport for $1.34 million.  The airline, however, will offer the
slots for public bidding in a move to rake in more profit.

The slots are among those assets comprising ATA Airlines'
business, which the company previously offered for bidding.
However, the letter of intent executed by the airline and
Southwest Airlines Co., which submitted the highest offer to
acquire the business, excludes the slots as among those assets to
be purchased.  ATA Airlines subsequently engaged in talks with
AirTran for the sale of the slots, which eventually led to the
signing of the purchase agreement.

Under the deal, ATA Airlines and AirTran agreed that the slots be
paid in 17 equal monthly installments of $20,000, with a balloon
payment of $1 million due on June 30 next year.  The slots will
serve as collateral for AirTran's obligation to pay the airline.
A full-text copy of the agreement is available for free at:

  http://bankrupt.com/misc/ATAPurchaseAgreement.pdf

ATA Airlines currently leases the airport slots to AirTran at a
monthly rent of $20,000.  The terms of the lease are set to
expire on Dec. 31, 2010.

                       Bidding Procedures

ATA Airlines will offer the slots for public bidding in order to
maximize their sale price.  If the airline receives bids, an
auction will be conducted Jan. 28, 2009.  The hearing on the
proposed sale has also been scheduled for Jan. 28.

Interested buyers willing to participate in the auction must
submit a bid conforming to these requirements:

  (1) The competing offer must be submitted in the form of a
      mark-up of the purchase agreement.  The bid must be for
      all of the slots; bids on individual slots will not be
      accepted.

  (2) The competing offer must include a purchase price in an
      amount not less than $100,000 greater than the purchase
      price offered by AirTran.

  (3) Competing offers must be cash offers without any financing
      contingencies and cannot be subject to further due
      diligence.

  (4) Competing offers must be submitted so as to be received by
      Jan. 26, 2009, at 5:00 p.m. (prevailing eastern time) by
      mail, hand-delivery, facsimile, or electronic mail to:

      ATA Airlines, Inc.
      c/o Haynes and Boone, LLP
      Attn: Kourtney P. Lyda
      1 Houston Center
      1221 McKinney Street, Suite 2100
      Houston, Texas 77010
      Facsimile: (713) 236-5687
      Email: kourtney.lyda@haynesboone.com

      JPMorgan Chase Bank, N.A.
      c/o Simpson Thacher & Bartlett LLP
      Attn: Kathrine A. McLendon
      425 Lexington Avenue
      New York, New York 10017
      Facsimile: (212) 455-2502
      Email: kmclendon@stblaw.com

      The Official Committee of Unsecured Creditors a
      c/o Otterbourg, Steindler, Houston & Rosen P.C.
      230 Park Avenue
      New York, New York 10169
      Facsimile: (917) 368-7139
      Email: ssoll@oshr.com

      Office of the United States Trustee
      Attn: Ronald J. Moore
      101 West Ohio Street, Suite 1000
      Indianapolis, Indiana 46204
      Facsimile: (317) 226-6356
      Email: ronald.moore@usdoj.gov

Bidding at the auction will proceed in minimum bid increments of
$100,000.  A buyer may submit an incremental bid that is less
than $100,000, but only by announcing that the bid is its highest
or otherwise best bid and, if topped, that buyer can no longer
participate in the auction.  Bidding will continue to be in
$100,000 minimum bid increments.

Subject to court approval, ATA Airlines will announce the buyer
that offered the highest bid and the buyer that submitted the
next highest bid upon conclusion of the auction.  If for any
reason the buyer that submitted the highest bid fails to timely
consummate the sale, ATA Airlines may consummate the sale to the
buyer that has submitted the next highest bid.

If ATA Airlines does not receive bids on or before the deadline,
the Court may authorize the sale of the slots to AirTran at the
hearing.

                    About ATA Airlines

Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., was a
diversified passenger airline operating in two principal business
lines -- a low cost carrier providing scheduled passenger service
that leverages a code share agreement with Southwest Airlines; and
a charter operator that focused primarily on providing charter
service to the U.S. government and military.  ATA is a wholly
owned subsidiary of New ATA Acquisition, Inc. -- a wholly owned
subsidiary of New ATA Investment, Inc., which in turn, is a wholly
owned subsidiary of Global Aero Logistics Inc.  ATA Acquisition
also owns another holding company subsidiary, World Air Holdings,
Inc., which it acquired through merger on August 14, 2007.  World
Air Holdings owns and operates two other airlines, North American
Airlines and World Airways.

ATA Airlines and its affiliates filed for Chapter 11 protection on
Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868
through 04-19874).  The Honorable Basil H. Lorch III confirmed the
Debtors' plan of reorganization on Jan. 31, 2006.  The Debtors'
emerged from bankruptcy on Feb. 28, 2006.

Global Aero Logistics acquired certain of ATA's operations after
its first bankruptcy.  The remaining ATA affiliates that were not
substantively consolidated in the company's first bankruptcy case
were sold or otherwise liquidated.

ATA Airlines filed for Chapter 22 on April 2, 2008 (Bankr. S.D.
Ind. Case No. 08-03675), citing the unexpected cancellation of a
key contract for ATA's military charter business, which made it
impossible for ATA to obtain additional capital to sustain its
operations or restructure the business.  ATA discontinued all
operations subsequent to the bankruptcy filing.  ATA's Chapter 22
bankruptcy petition lists assets and liabilities each in the range
of $100 million to $500 million.

The Debtor is represented in its Chapter 22 case by Haynes and
Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel.

The United States Trustee for Region 10 appointed five members to
the Official Committee of Unsecured Creditors.  Otterbourg,
Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel to
the Committee.  FTI Consulting, Inc., acts as the panel's
financial advisors.  The Court gave ATA Airlines Inc. until
Feb. 26, 2009, to file its Chapter 11 plan and April 27, 2009, to
solicit acceptances of that plan.

ATA Airlines submitted to the Court its Chapter 11 Plan of
Reorganization and accompanying Disclosure Statement on Dec. 12,
2008, two weeks after it completed the sale of its key assets to
Southwest Airlines Inc.

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


AVIS BUDGET: Rental Car Rental Industry Also Wants to Access TARP
-----------------------------------------------------------------
Paulo Prada at The Wall Street Journal reports that Avis Budget
Group Inc., Hertz Global Holdings Inc., Enterprise Rent-A-Car Co.,
and other rental car companies are asking the Congress to let them
use Troubled Asset Relief Program funds to finance new auto
purchases.

WSJ relates that stagnant credit markets, declining demand for
travel, and the automobile industry's hardships have made it hard
for rental car companies to find buyers for their used automobiles
and secure financing to purchase new ones to replace them.

According to WSJ, the House of Representatives included a clause
in a TARP reform bill that it passed to the Senate last week to
give the government the authority to back loans to rental car
companies and other fleet purchasers.  WSJ states that the rental
car industry is the U.S. auto industry's biggest customer, buying
as many as 1.8 million new vehicles per year.  The report quoted
Steven Adamske -- a spokesperson for House Financial Services
Committee chairperson Barney Frank -- as saying, "If our desire is
to get car buying and credit flowing again, enabling people who
buy hundreds of cars at a time is a good way to do it."

                About Avis Budget Group, Inc.

Avis Budget Group (NYSE: CAR) -- www.avisbudgetgroup.com --is a
leading provider of vehicle rental services, with operations in
more than 70 countries. Through its Avis and Budget brands, the
company is the largest general-use vehicle rental company in each
of North America, Australia, New Zealand and certain other regions
based on published airport statistics.  Avis Budget Group is
headquartered in Parsippany, N.J. and has more than 28,000
employees.

Dow Jones Newswires says that Standard & Poor's Ratings Service
and Fitch Ratings both downgraded Avis Budget's credit rating to
junk in October 2008, citing long-lasting weakness in the auto
industry and refinancing concerns.


BANK OF AMERICA: Andrew Cuomo to Probe Directors & Shareholders
---------------------------------------------------------------
Susanne Craig at The Wall Street Journal reports that New York
Attorney General Andrew Cuomo will expand his probe on the bonuses
paid by Merrill Lynch & Co. to shareholders and directors.

Citing a person familiar with the matter, WSJ relates that
Mr. Cuomo wants to know whether directors and shareholders were
misled about huge losses at Merrill Lynch, before its merger with
Bank of America.  The report states that some Merrill Lynch
directors have denied being aware of the losses.

According to WSJ, the source said that Mr. Cuomo will question
former Merrill Lynch CEO John Thain on what he told Merrill Lynch
directors about the losses in December 2008.  Mr. Cuomo, says the
report, wants to know why Merrill Lynch didn't publicly disclose
that its condition was deteriorating.

WSJ states that Mr. Cuomo would include BofA Chairperson and CEO
Kenneth Lewis in his investigation.

WSJ quoted a person familiar with the matter as saying, "We plan
to look at the fiduciary duty of these two men [Messrs. Lewis and
Thain] and others at various points in this saga.  Looking at Bank
of America, if they did a bad deal and didn't tell anyone, it not
only hurt shareholders, it hurt taxpayers because of the
government funding that has been extended to the bank."

Mr. Cuomo's office, according to WSJ, is considering remedies
like:

     -- trying to recover bonuses already paid,
     -- imposing fines, or
     -- alleging securities-law violations.

Mr. Cuomo said in a statement that BofA faces a "$4 billion
question" about "why it failed to stop Merrill Lynch from issuing
year-end bonuses as it was taking over the company."

                       About Bank of America

Bank of America is one of the world's largest financial
institutions, serving individual consumers, small and middle
market businesses and large corporations with a full range of
banking, investing, asset management and other financial and risk-
management products and services.  The company provides unmatched
convenience in the United States, serving more than 59 million
consumer and small business relationships with more than 6,100
retail banking offices, nearly 18,700 ATMs and award-winning
online banking with nearly 29 million active users.  Following the
acquisition of Merrill Lynch on January 1, 2009, Bank of America
is among the world's leading wealth management companies and is a
global leader in corporate and investment banking and trading
across a broad range of asset classes serving corporations,
governments, institutions and individuals around the world.  Bank
of America offers industry-leading support to more than 4 million
small business owners through a suite of innovative, easy-to-use
online products and services.  The company serves clients in more
than 40 countries.  Bank of America Corporation stock is a
component of the Dow Jones Industrial Average and is listed on the
New York Stock Exchange.


BANKUNITED FSB: Weiss Ratings Assigns "Very Weak" E- Rating
-----------------------------------------------------------
Weiss Ratings has assigned its E- rating to Coral Gables, Fla.-
based UnitedBank, FSB.  Weiss says that the institution currently
demonstrates what it considers to be significant weaknesses and
has also failed some of the basic tests Weiss uses to identify
fiscal stability.  "Even in a favorable economic environment,"
Weiss says, "it is our opinion that depositors or creditors could
incur significant risks."

BankUnited is chartered as a savings association and primarily
regulated by the Office of Thrift Supervision.  Deposits have been
insured by the Federal Deposit Insurance Corporation since Oct. 3,
1984.  BankUnited's maintains a Web site at
http://www.bankunited.com/and has 86 branches located in Florida.
At Sept. 30, 2008, BankUnited disclosed $14.5 billion in assets
and $13.6 billion in liabilities in its regulatory filings.


BARBARA BAUER: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Barbara Jean Bauer
        4800 Encino Road
        Encino, CA 91316

Bankruptcy Case No.: 09-10508

Chapter 11 Petition Date: January 20, 2009

Court: United States Bankruptcy Court
       Central District Of California (San Fernando Valley)

Judge: Maureen Tighe

Debtor's Counsel: Jerome Bennett Friedman, Esq.
                  1900 Avenue of the Stars Ste 1800
                  Los Angeles, CA 90067-4409
                  Tel: (310) 552-9292
                  Fax: (310) 552-9291
                  Email: jfriedman@hkemlaw.com

Estimated Assets: $1,000,001 to $10,000,000

Estimated Debts: $1,000,001 to $10,000,000

The Debtor's Largest Unsecured Creditors:

   Entity                      Nature of Claim   Claim Amount
   ------                      ---------------   ------------
American Express                             -       $107,081

Diners Club                                  -         47,333

Rintals, Smoot, Jaenicke & Rees                        42,000

The petition was signed by Barbara Jean Bauer.


BLACK GAMING: Amends Credit Deal, Wells Fargo Forbears Till Feb.
-----------------------------------------------------------------
Black Gaming, LLC, and its subsidiaries and Wells Fargo Foothill,
Inc., entered into a First Amendment to Forbearance, Consent and
Third Amendment to Credit Agreement.  The First Amendment amends
the Forbearance, Consent and Third Amendment to Credit Agreement
between the Company and Wells Fargo Foothill dated Nov. 3, 2008.

Pursuant to the First Amendment, the termination date of the
forbearance agreement was extended from Jan. 15, 2009, to Feb. 2,
2009.  No other provisions of the Forbearance Agreement were
amended, and except as modified by the First Amendment, the terms
of the Forbearance Agreement remain in full force and effect in
accordance with their respective terms.

A full-text copy of the First Amendment Forbearance, Consent And
Third Amendment to Credit Agreement is available for free at:

               http://ResearchArchives.com/t/s?38c2

The Nov. 3, 2008 Forbearance Agreement amended a revolving credit
facility provided by Wells Fargo.  The Forbearance Agreement
provides, among other things, for:

    1. The LIBOR Rate Margin has been increased to 5% from 3.50%,
       and the Base Rate Margin has been increased to 5% from 2%.
       Therefore, the interest rate premium payable in respect of
       loans available under the Credit Agreement has been
       increased accordingly;

    2. The minimum EBITDA covenant has been reduced from
       $15.0 million to $10.0 million for the September 2008
       through December 2008 reporting periods;

    3. The Borrowing Base multiple has been increased from 1.0x to
       1.5x from the execution of the Forbearance Agreement until
       January 15, 2009;

    4. The Company has been allowed to temporarily shut down a
       currently operating casino during the Forbearance Period

                Grace Period for Notes Ends Feb. 14

On Jan. 15, 2009, Black Gaming 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 its subsidiaries Virgin
River Casino Corporation, RBG, LLC and B & B B, Inc.  The Company
is in discussions with an ad hoc committee of holders of the Notes
regarding the Company's financial alternatives.  Under the terms
of the Indenture, dated December 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 such 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 Wells Fargo Foothill Facility.  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.

                      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 a net
loss of $34.4 million compared with a 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 by the Troubled Company Reporter on Jan. 20, 2009,
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.


BOSTON SCIENTIFIC: Posts $2.43-Bil Net Loss in 4th Quarter 2008
---------------------------------------------------------------
Boston Scientific Corporation has disclosed financial results for
the fourth quarter and full year ended December 31, 2008, as well
as guidance for net sales and earnings per share for the first
quarter of 2009.

"During the quarter, we continued to gain share in our cardiac
rhythm management and drug-eluting stent businesses, driven by the
approval and successful launch of important new products," said
Jim Tobin, President and Chief Executive Officer of Boston
Scientific.  "Throughout the year, we made progress in critical
areas across the Company and positioned ourselves well for the
future.  We've transformed quality, revitalized our pipeline,
streamlined the organization, strengthened our financial
fundamentals and diversified our product portfolio.  We will build
on this solid foundation in 2009 and beyond."

Fourth Quarter 2008

Net sales for the fourth quarter of 2008 were $2.002 billion,
which included sales from divested businesses of $7 million, as
compared to net sales of $2.152 billion for the fourth quarter of
2007, which included sales from divested businesses of
$145 million.  Excluding the impact of foreign currency and sales
from divested businesses, net sales increased two percent over the
prior period.

Despite the company's strong financial performance, changes in CRM
market demand since our acquisition of Guidant -- coupled with the
recent disruptions in the credit and equity markets -- have caused
us to write down $2.7 billion of goodwill associated with the
acquisition.  This is a non-cash charge that has no impact on our
debt covenants.  The amount of the charge is subject to
finalization during the first quarter of 2009.

"This write-down in no way diminishes our confidence in our CRM
business," said Mr. Tobin.  "CRM is growing, it is taking market
share, and it will be a key driver of the company's sales and
earnings growth going forward."

Reported net loss for the fourth quarter of 2008 was
$2.430 billion, or $1.62 per share.  Reported results included
intangible asset impairments, acquisition-, divestiture-,
litigation- and restructuring-related net charges, and
amortization expense (after-tax) of $2.750 billion, or $1.83 per
share, which consisted of:

     -- $2.681 billion ($2.689 billion pre-tax) of intangible
        asset impairment charges, associated primarily with a
        write-down of goodwill;

     -- $25 million ($22 million pre-tax) of purchased research
        and development charges, associated primarily with the
        company's acquisition of Labcoat, Ltd.;

     -- $27 million ($34 million pre-tax) of restructuring
        charges associated with the company's on-going expense
        and head count reduction initiatives;

     -- $109 million of discrete tax benefits related to certain
        tax positions associated with acquisition-, divestiture-,
        litigation- and restructuring-related charges; and

     -- $126 million ($134 million pre-tax) of amortization
        expense.

Adjusted net income for the fourth quarter of 2008 excluding these
charges was $320 million, or $0.21 per share.

Reported net loss for the fourth quarter of 2007 was
$458 million, or $0.31 per share.  Reported results included
intangible asset impairments, acquisition-, divestiture-,
litigation- and restructuring-related charges and amortization
expense (after-tax) of $813 million, or $0.55 per share.  Adjusted
net income for the fourth quarter of 2007 excluding these charges
was $355 million, or $0.24 per share.

Full Year 2008

Net sales for the full year 2008 were $8.050 billion, which
included sales from divested businesses of $69 million, as
compared to net sales of $8.357 billion in 2007, which included
sales from divested businesses of $553 million.

Reported net loss for 2008 was $2.072 billion, or $1.38 per share.
Reported results for 2008 included intangible asset impairments,
acquisition-, divestiture-, litigation- and restructuring-related
charges, and amortization expense (after-tax) of $3.289 billion,
or $2.19 per share, which consisted of:

     -- $2.810 billion ($2.844 billion pre-tax) of intangible
        asset impairment charges, associated primarily with a
        write-down of goodwill;

     -- a $184 million gain ($250 million pre-tax) related to the
        receipt of an acquisition-related milestone payment from
        Abbott Laboratories;

     -- $44 million ($43 million pre-tax) of net purchased
        research and development charges, associated primarily
        with the company's acquisitions of CryoCor, Inc., and
        Labcoat, Ltd.;

     -- $100 million of charges ($133 million pre-tax) associated
        with the company's ongoing expense and head count
        reduction initiatives;

     -- a $185 million gain ($250 million pre-tax), associated
        with the sale of certain non-strategic businesses;

     -- $54 million of net losses ($80 million pre-tax) in
        connection with the sale of the company's non-strategic
        investments;

     -- $238 million of litigation-related charges ($334 million
        pre-tax) resulting primarily from a ruling by a federal
        judge in a patent infringement case brought against the
        company by Johnson & Johnson;

     -- $27 million of discrete tax benefits related to certain
        tax positions associated with prior period acquisition-,
        divestiture-, litigation- and restructuring-related
        charges; and

     -- $439 million of amortization expense ($543 million pre-
        tax).

Adjusted net income for 2008, excluding these charges, was
$1.217 billion, or $0.81 per share.

Reported net loss for 2007 was $495 million, or $0.33 per share.
Reported results for 2007 included intangible asset impairments,
acquisition-, divestiture-, litigation- and restructuring-related
charges, and amortization expense (after-tax) of $1.652 billion,
or $1.10 per share.  Adjusted net income for 2007, excluding these
charges was $1.157 billion, or $0.77 per share.

Guidance for First Quarter 2009

The company estimates net sales for the first quarter of 2009 of
between $1.950 billion and $2.070 billion.  Adjusted earnings,
excluding acquisition-, divestiture-, litigation- and
restructuring-related charges and amortization expense, are
estimated to range between $0.15 and $0.20 per share.  The company
estimates net income on a GAAP basis of between $0.05 and $0.11
per share.

                 BOSTON SCIENTIFIC CORPORATION
         CONDENSED CONSOLIDATED GAAP RESULTS OF OPERATIONS
                          (Unaudited)

                                        Three Months Ended
                                            December 31,
In millions, except per share data      2008          2007

Net sales                              $2,002        $2,152
Cost of products sold                     630           635
Gross profit                            1,372         1,517
Operating expenses:
Selling, general and
administrative expenses                  640           704
Research and development expenses         257           256
Royalty expense                            59            51
Amortization expense                      134           153
Intangible asset impairments            2,689            21
Purchased research and development         22            13
Loss on assets held for sale                            208
Restructuring charges                      19           176
Litigation-related charges                              365
3,820         1,947
Operating loss                         (2,448)         (430)
Other income (expense):
Interest expense                         (107)         (137)
Other, net                                 (2)          (29)
Loss before income taxes               (2,557)         (596)
Income tax benefit                       (127)         (138)
Net loss                              $(2,430)        $(458)
Net loss per common share - basic      $(1.62)       $(0.31)
Net loss per common share -
assuming dilution                     $(1.62)       $(0.31)
Weighted average shares
outstanding -basic                     1,501.5       1,490.8
Weighted average shares outstanding -
assuming dilution                       1,501.5       1,490.8

                                            Year Ended
                                            December 31,
In millions, except per share data      2008           2007

Net sales                              $8,050         $8,357
Cost of products sold                   2,469          2,342
Gross profit                            5,581          6,015
Operating expenses:
Selling, general and administrative
expenses                                2,566          2,909
Research and development expenses       1,006          1,091
Royalty expense                           203            202
Amortization expense                      543            620
Intangible asset impairments            2,844             21
Acquisition-related milestone            (250)
Purchased research and development         43             85
Gain on divestitures                     (250)
Loss on assets held for sale                             560
Restructuring charges                      78            176
Litigation-related charges                334            365
7,117          6,029
Operating loss                         (1,536)           (14)
Other income (expense):
Interest expense                         (468)          (570)
Other, net                                (58)            15
Loss before income taxes               (2,062)          (569)
Income tax expense (benefit)               10            (74)
Net loss                              $(2,072)         $(495)
Net loss per common share - basic         $(1.38)        $(0.33)
Net loss per common share - assuming
dilution                                 $(1.38)        $(0.33)
Weighted average shares
outstanding - basic                    1,498.5        1,486.9
Weighted average shares outstanding -
assuming dilution                       1,498.5        1,486.9

                                            December 31,
In millions                              2008          2007
(Unaudited)
  ASSETS
  ------
Current assets:
Cash and cash equivalents              $1,641        $1,452
Trade accounts receivable, net          1,402         1,502
Inventories                               853           725
Deferred income taxes                     931           679
Assets held for sale                       13         1,119
Other current assets                      607           464
Total current assets                    5,447         5,941
Property, plant and equipment, net      1,728         1,715
Investments                               113           317
Other assets                              181           157
Intangible assets, net                 19,611        23,067
                                      -------       -------
                                      $27,080       $31,197

               LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Short-term debt                            $2          $256
Accounts payable and accrued expenses   2,828         2,680
Liabilities associated with assets
held for sale                                           39
Other current liabilities                 380           275
Total current liabilities               3,210         3,250
Long-term debt                          6,743         7,933
Deferred income taxes                   2,262         2,284
Other long-term liabilities             1,727         2,633
Stockholders' equity                   13,138        15,097
                                      -------       -------
                                      $27,080       $31,197

                     About Boston Scientific

Boston Scientific -- http://www.bostonscientific.com/-- is a
worldwide developer, manufacturer and marketer of medical devices
whose products are used in a broad range of interventional medical
specialties.

As reported by the Troubled Company Reporter on Oct. 10, 2008,
Standard & Poor's Ratings Services said that the U.S. Supreme
Court's rejection of an appeal by Boston Scientific Corp.
(BB+/Negative/--) regarding the $703 million jury finding
(U.S. District Court in Delaware) will have no impact on the
rating.  Boston Scientific continues to explore other avenues of
appeal.  In the event that it was unsuccessful, the company had
$1.6 billion of cash as of June 30, 2008.

The TCR reported on Jan. 27, 2009 that founders of Boston
Scientific Corp. disposed of $484 million in shares to repay loans
after other assets were frozen by the Lehman Brothers Holdings
Inc. bankruptcy.  Peter Nicholas, Boston Scientific's chairman and
founding chief executive officer, and John Abele, 71, a director
and co-founder, have sold almost half their stake, or 4.2 percent
of company stock, since Oct. 7.


BRIGHAM EXPLORATION: S&P Downgrades Corp. Credit Rating to 'B-'
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
corporate credit rating on Brigham Exploration Co. to 'B-' from
'B'.  The outlook is negative.

At the same time, Standard & Poor's lowered the issue-level rating
on the company's senior unsecured debt to 'CCC+' from
'B-'.  The recovery rating remains at '5', indicating modest (10%
to 30%) recovery in the event of a payment default.

"The downgrade reflects our concerns about falling hydrocarbon
prices, and our expectations that Brigham's cash flow, credit
metrics, and liquidity will worsen in the near-term," said
Standard & Poor's credit analyst Amy Eddy.  "In particular, if
prices remain low Brigham could face challenges in complying with
its minimum interest coverage covenant of 3x."  In addition, the
company has more than 50% outstanding under its $145 million
borrowing-based revolving line of credit.  Any reduction to this
facility could quickly impair the company's liquidity.

As of Sept. 30, 2008, Austin, Texas-based Brigham had
$247 million in adjusted total debt.

Brigham's vulnerable risk profile incorporates its small,
geographically concentrated reserve base of 140.2 billion cubic
feet equivalent, a majority of which (76%) is natural gas and more
than half (51%) is proved undeveloped.  More than 60% of Brigham's
production and reserves (87 bcfe) is in the onshore Gulf Coast
region.  The geographic concentration in this area also results in
a short reserve life of slightly more than five years on a proved
developed basis.  This combination weighs on Brigham's business
profile because these assets are fast producing and require
constant reinvestment to offset steep decline curves.  However,
the company balances its Gulf Coast assets with significant
reserves in the Anadarko Basin (35 bcfe) and smaller positions in
the Rockies (11 bcfe) and West Texas (8 bcfe).  Furthermore,
Brigham's large percentage of proved undeveloped reserves and
considerable acreage in the Williston Basin should provide a
source of growth.

The negative outlook reflects S&P's expectation that near-term
cash flow, credit metrics, and liquidity will be poor based on
lower commodity prices.  S&P could take further negative rating
actions if Brigham's liquidity deteriorates from current levels.


BUDGET TOWING: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Budget Towing Inc. of St. Paul
        1145 Homer Street
        St. Paul, MN 55116

Bankruptcy Case No.: 09-30353

Chapter 11 Petition Date: January 21, 2009

Court: United States Bankruptcy Court
       District of Minnesota (St. Paul)

Judge: Nancy C. Dreher

Debtor's Counsel: Thomas Flynn, Esq.
                  Larkin Hoffman Daly & Lindgren
                  7900 Xerxes Ave. South, Suite 1500
                  Bloomington, MN 55431
                  Tel: (952) 896-3362
                  Email: tflynn@larkinhoffman.com

Estimated Assets: $0 to $50,000

Estimated Debts: $1,000,001 to $10,000,000

A full-text copy of the Debtor's petition, including its largest
unsecured creditors, is available for free at:

            http://bankrupt.com/misc/mnb09-30353.pdf

The petition was signed by e/Beverly C. Carlson, President of the
company.


CABLEVISION SYSTEMS: Harbinger Et Al. Disclose Equity Stake
-----------------------------------------------------------
Harbinger Capital Partners Master Fund I, Ltd., et al., disclosed
in a regulatory filing dated January 28, 2009, that they have
reduced their exposure to Cablevision Systems Corp. as part of
their ongoing portfolio management and rebalancing.

As of January 27, 2009, Harbinger, et al., may be deemed to
beneficially own these shares of Cablevision NY Group Class A
Common Stock:

                                      Shares
                                      Beneficially
  Company                             Owned          Percentage
  -------                             ------------   ----------
  Harbinger Capital Partners            10,841,958       4.6%
    Master Fund I, Ltd.

  Harbinger Capital Partners            10,841,958       4.6%
    Offshore Manager, L.L.C.

  HMC Investors, L.L.C.                 10,866,958       4.6%

  Harbinger Capital Partners             6,621,868       2.8%
    Special Situations Fund, L.P.

  Harbinger Capital Partners             6,621,868       2.8%
    Special Situations GP, LLC

  HMC - New York, Inc.                   6,621,868       2.8%

  Harbert Management Corporation         6,621,868       2.8%

  Philip Falcone                        17,463,826       7.5%

  Raymond J. Harbert                    17,488,826       7.5%

  Michael D. Luce                       17,488,826       7.5%

The percentage is based on the number of outstanding shares --
233,754,025 -- the company reported as of October 31, 2008.

Harbinger Capital Partners Offshore Manager, L.L.C. is the
investment manager of Harbinger Capital Partners Master Fund I,
Ltd.  HMC Investors, L.L.C., is its managing member.  HMC - New
York, Inc., is the managing member of Harbinger Capital Partners
Special Situations GP, LLC, which is the general partner of the
Harbinger Capital Partners Special Situations Fund, L.P.

Harbert Management Corporation is the parent of HMC - New York,
Inc.  Philip Falcone is a member of HMC Investors, a shareholder
of HMC and the portfolio manager of the Master Fund and the
Special Fund.  Raymond J. Harbert is also a member of HMC
Investors and a shareholder of HMC.  Michael D. Luce is a member
of HMC Investors and a shareholder of HMC.

                 About Cablevision Systems Corp.

Headquartered in Bethpage, New York, Cablevision Systems Corp.
(NYSE: CVC) -- is a cable operator in the United States that
operates cable programming networks, entertainment businesses and
telecommunications companies.  Through its wholly owned
subsidiary, Rainbow Media Holdings LLC, Cablevision owns interests
in and manages numerous national and regional programming
networks, the Madison Square Garden sports and entertainment
businesses, and cable television advertising sales companies.
Through Cablevision Lightpath Inc., its wholly owned subsidiary,
the company provides telephone services and Internet access to the
business market.

At September 30, 2008, the company's consolidated balance sheet
showed $9.7 billion in total assets and $14.6 billion in total
liabilities, resulting in a $4.9 billion total stockholders'
deficit.

                          *     *     *

As disclosed in the Troubled Company Reporter on June 6, 2008,
Standard & Poor's Ratings Services affirmed all its ratings,
including its 'BB' corporate credit rating, on based Cablevision
Systems Corp., a major cable operator in the New York City
metropolitan area, and its subsidiaries.  The outlook is negative.

On June 2, 2008, the TCR reported that Moody's Investors Service
assigned a B1 rating to the proposed new $500 million of senior
unsecured debt to be issued by Cablevision Systems Corporation's
subsidiary CSC Holdings, Inc.  Existing ratings for the company
and CSC were also affirmed.  The rating outlook remains stable.


CAMPBELL RESOURCES: Files for Bankruptcy Protection in Canada
-------------------------------------------------------------
The Canadian Press reports that Campbell Resources Inc. said that
it has filed for court protection from creditors, after financing
problems resulted in the shutdown of its Copper Rand mine.

Campbell Resources discontinued mining operations at its Copper
Rand mine on Dec. 31, 2008.  The decision to terminate operations
at Copper Rand was originally announced on Sept. 9, 2008.
Campbell Resources also suspended its bulk sample exploration
program at the Corner Bay property in October 2008 because of
extreme difficulties in securing financing in the current
marketplace and the decline in copper prices.  Manpower resources
are being reduced to care and maintenance levels.

The superior court in Quebec granted the initial order for
bankruptcy protection under the federal Companies' Creditors
Arrangement Act, The Canadian Press relates, citing Campbell
Resources.

Campbell Resources said in a statement that it hasn't decided on a
restructuring plan, but the management will provide updates
throughout the court-supervised process.

Campbell Resources also announced that it is now listed on the NEX
under the symbol CCH.H-X.  The NEX is a new and separate board of
TSX Venture Exchange which provides a trading forum for listed
companies that have fallen below TSX Venture's ongoing listing
standards.

Headquartered in Montreal, Canada, Campbell Resources Inc.
(Symbol: CCH) -- http://www.ressourcescampbell.com-- operates a
mining company.


CASCADE GRAIN: Files for Chapter 11 Bankruptcy in Oregon
--------------------------------------------------------
Bloomberg News reports that Cascade Grain Products LLC made a
voluntary petition under Chapter 11 in the United States
Bankruptcy Court for the District of Oregon.

Bloomberg says the company did not disclose events leading to
bankruptcy.

The company owes about $3.59 million to it unsecured creditors
including Gavilon Grain LLC asserted $1.8 million; Northstar
Chemical Inc. asserted $570,442; and Novozymes North America Inc.
asserted $434,055, court documents shows.  The company posted
assets and debts between $100 million and $500 million each.

Bloomberg relates the company said on Jan. 15, 2009, that its
Clatskanie plant will temporarily cease operation but it will
continue to operate within a few weeks.  Ethanol produces were
compelled to cut capacity this month through shutdowns or delays a
volatile corn prices curtailed profit, source notes.

Ethanol producer Northeast Biofuels LP and its affiliates filed
for bankruptcy citing a contractor's inability to deliver a
properly operating ethanol plant facility, according to the
Troubled Company Reporter on Jan. 15, 2009.

                       About Cascade Grain

Headquar Vancouver, Washingto, Cascade Grain Products LLC --
http://www.cascadegrain.com-- is a wholly-owned subsidiary of
Berggruen BioFuels Holdings, LLC, a Berggruen Holdings company.


CASCADE GRAIN: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Cascade Grain Products, LLC
        8513 NE Hazel Dell Avenue, Suite 201
        Vancouver, WA 98665

Bankruptcy Case No.: 09-30508

Type of Business: The Debtor is a wholly-owned subsidiary of
                  Berggruen BioFuels Holdings, LLC, a Berggruen
                  Holdings company.

                  The Debtors was formed in July 1999.  The
                  project is fully financed and began
                  construction in Clatskanie, Oregon on the
                  Columbia River in May 2006.  The Debtor is a
                  greenfield construction of a 108 MGPY
                  undenatured fuel-grade ethanol plant.  It
                  started commercial operation in June 2008.

                  The project is located on a 43.62 acre site in
                  Port Westward.  Port Westward is located at the
                  53 mile marker of the Columbia River and has a
                  1,200 foot long deep draft dock, giving the
                  Project ready access to both ocean-going and
                  Columbia River barge transportation.

                  The Delta-T/TIC alliance is the project's EPC
                  provider.  The Debtor has a business plan which
                  emphasizes close relationships with its
                  suppliers of feedstock for plant operations,
                  its customers, regulatory agencies, and the
                  local community.  In addition to Delta-T/TIC,
                  the Debtor's current partners include Gavilon,
                  Land O'Lakes, Eco-Energy, Northwest Natural
                  Gas, and BNSF Railroad.

                  See: http://www.cascadegrain.com/

Chapter 11 Petition Date: January 28, 2009

Court: District of Oregon

Judge: Elizabeth L. Perris

Debtor's Counsel: Douglas R. Pahl, Esq.
                  dpahl@perkinscoie.com
                  Perkins Coie LLP
                  1120 NW Couch St., 10th Floor
                  Portland, OR 97209-4128
                  Tel: (503) 727-2087

Estimated Assets: $100 million to $500 million

Estimated Debts: $100 million to $500 million

The Debtor's Largest Unsecured Creditors:

   Entity                      Nature of Claim   Claim Amount
   ------                      ---------------   ------------
Gavilon Grain LLC              trade vendor      $1,834,182
11 ConAgra Drive, Ste. 5022
Omaha, NE 68102
Tel: (888) 428-8723

Northstar Chemical Inc.        trade vendor      $570,442
14200 SW Tualatin Sherwood Rd.
Sherwood, OR 97140
Tel: (503) 625-3770

Novozymes North America Inc.   trade vendor      $434,055
77 Perrys Chapel Church Rd.
Franklinton, NC 27525
Tel: (919) 494-3000

North American Bioproducts     trade vendor     $105,218
Corporate Support Center

Portland & Western Railroad    trade vendor     $103,450

Ostrander Rock Construction    trade vendor     $83,490

Chadbourne & Parke LLP         trade vendor     $79,667

GEA Barr-Rosin Inc.            trade vendor     $63,395

PhibroChem                     trade vendor     $58,800

Nalco                          trade vendor     $52,028

Inspectorate America Corp.     trade vendor     $45,538

Jammie's Environmental         trade vendor     $38,960

Vescom Corporation             trade vendor     $29,147

Nixon Peabody LLP              professional     $24,423
                               services

Motion Industries              trade vendor     $24,415

Applied Industrial Tech. Inc.  trade vendor     $14,699

Alfa Laval                     trade vendor     $13,203

Natural Resource Group LLC     trade vendor     $12,133

Wilcox & Flegel                trade vendor     $10,382

Argo International             trade vendor     $9,073

The petition was signed by was signed by president Charles
Carlson.


CHESAPEAKE ENERGY: Fitch Assigns 'BB' Ratings on Note Offering
--------------------------------------------------------------
Fitch Ratings has assigned a 'BB' rating to Chesapeake Energy
Corporation's proposed senior note offering.  Fitch has also
affirmed Chesapeake's Issuer Default Rating and outstanding debt
ratings:

  -- IDR at 'BB';

  -- Senior unsecured debt at 'BB';

  -- Senior secured revolving credit facility and hedge
     facilities at 'BBB-';

  -- Convertible preferred stock at 'B+'.

The Rating Outlook remains Negative.

During its review of Chesapeake in October 2008, Fitch cited both
short and long term concerns about Chesapeake.  Short-term
concerns focus primarily on liquidity issues following
Chesapeake's full drawn down of its senior credit facility.  The
current debt offering should reduce these concerns as proceeds are
expected to be used to repay credit facility borrowings and not be
re-borrowed.  Additional liquidity improvements stem from
Chesapeake's execution of a fourth volumetric production payment,
the Marcellus shale joint venture agreement with StatoilHydro ASA
and the company's successful efforts to remove its knockout hedges
and therefore increase 2009 cash flow visibility.  Chesapeake
successfully executed a $460 million credit facility associated
with the company's midstream operations during the fourth quarter
and reduced outstanding convertible debt balances.  Cash balances
ended the year over $1.7 billion and serve as a good indication of
the company's ability to cut capital expenditures and leasehold
activity in the current commodity price environment.

Additional factors supporting Chesapeake's liquidity stem from the
lack of near-term debt maturities.  Chesapeake's next long-term
debt maturity is in 2013, while its $3.5 billion credit facility
matures in 2012.  As of Sept. 30, 2008, Chesapeake was in full
compliance with all debt covenants and is expected to be in
compliance as of Dec. 31, 2008 despite the $1.8 billion in asset
impairment charges during the fourth quarter of 2008.
Chesapeake's revolver contains both a debt-to-total cap test,
measured at 0.59 times (x) as of Sept. 30, 2008, versus the
covenant requirement of 0.70x, and a debt-to-EBITDA test measured
at 2.19x at Sept. 30, 2008, versus the covenant requirement of
3.75x.

Chesapeake was also in compliance with the incurrence covenant
test in its senior bonds (pre-2005 issues) as of Sept. 30, 2008.
Unrealized hedging gains and losses are excluded from the covenant
calculations and the company also has carve-outs in the credit
facility for ceiling-test write-down impacts on the capitalization
calculation.  It is important to note that Chesapeake's credit
facility contains a borrowing base which is subject to periodic
redeterminations.  As banks review their internal commodity price
assumptions used for lending purposes, risks remain for these to
be lowered due to the current commodity price levels and economic
conditions.  Chesapeake has currently pledged approximately 60% of
assets toward the credit facility and maintains the flexibility to
increase security levels in order to maintain the current
borrowing base as commodity prices remain at lower levels.

Fitch's primary concerns continue to focus on the longer-term
issues regarding Chesapeake's credit profile, including the
company's aggressive growth strategy, high leverage as measured by
debt/proven developed producing, the significant use of off-
balance sheet financings, the potential for weaker production
levels stemming from reduced capital expenditures and Chesapeake's
strategy to monetize producing properties and reinvest proceeds
into leaseholds which require significant capital expenditures
before production materializes.  Additionally, as Chesapeake has
focused growth efforts on the newly discovered Haynesville shale,
Fitch believes the company faces higher levels of operational risk
as this strategy carries with it increased risk of weaker than
expected drilling results.  Continued positive operational
announcements over time will mitigate this risk.

Chesapeake's next debt maturity isn't until 2013 ($364 million of
7.5% senior notes) which limits the company's ability to
significantly reduce debt near-term.  Fitch expects Chesapeake to
reduce revolver borrowings following the current debt issuance and
for the company to continue to maintain reduced capital
expenditure levels such that re-borrowing on the facility is not
needed.  Ultimately, Fitch would expect Chesapeake to use internal
cash flows to fund the continued development of its asset base.
In addition to high levels of on-balance sheet debt levels,
Chesapeake has also accelerated its use of off-balance sheet
financings to continue to fund the company's aggressive growth.
These off-balance sheet financing sources have come in the form of
volumetric production payments and sale-leaseback transactions.
As Chesapeake moves forward, it expects to continue to utilize
VPPs as a source of financing.  Because these sales result in a
continued obligation to produce by Chesapeake, Fitch continues to
consider this structure to have some 'debt-like' features.

Chesapeake's ratings continue to be supported by the size and low
risk profile of its oil and gas reserves which now approximate
12.1 trillion cubic feet equivalent.  In addition, Chesapeake
continues to post very robust reserve replacement results.  Both
organic reserve replacement and production growth remain strong
and support the company's ability to support higher leverage
levels. Chesapeake's one-year reserve replacement rate at year-end
2008 is estimated to be 239%.  Both the strong reserve replacement
metrics and the onshore location of Chesapeake's reserves
highlight the low risk nature of the company's reserves.

Chesapeake is an Oklahoma City-based company focused on the
exploration, production and development of natural gas.  The
company's proved reserves remain predominantly natural gas and are
based 100% in the U.S. Chesapeake's operations are concentrated
primarily in the Mid-Continent, South Texas, the Permian Basin and
the Appalachia Basin.  The company's reserve growth in recent
years reflects the company's aggressive acquisition strategy and
consistent success through the drill-bit.


CHESAPEAKE ENERGY: Moody's Assigns 'Ba3' Rating on $1 Bil. Notes
----------------------------------------------------------------
Moody's Investors Service assigned a Ba3 (LGD 4; 69%) rating to
Chesapeake Energy's pending $1 billion offering of senior
unsecured notes due 2015.  Moody's also affirmed CHK's Ba2
Corporate Family Rating, its SGL-3 Speculative Grade Liquidity
rating, and its other existing debt ratings but changed the LGD
statistics to LGD 4; 69% from LGD 4; 62%.  Net note proceeds will
repay secured borrowings under CHK's $3.5 billion secured
borrowing base bank revolver.

The rating outlook remains stable pending Moody's normal annual
review of CHK's year-end 2008 results and 10-K, including the
standard FAS 69 disclosures.  The review will cover the reserve
risk mix, components of finding and development costs and any
implications for the future, net book and adjusted leverage after
several forms of asset monetizations, as well as an update on
CHK's prospects for leverage reduction, asset monetizations, and
containing capital spending.

The ratings are supported by CHK's strong natural gas and oil
price hedging coverage for 2009, the work CHK has done to
strengthen its credit and liquidity profile, and continued sound
production trends.  The degree of strengthening in hand will be
more fully gauged after full year-end results are available.
Nevertheless, after a year of many strategic transactions (major
joint ventures, asset sales, equity and debt offerings, and four
volumetric production payments), CHK has improved its operating
risk profile, fortified its liquidity, and reduced its 2009
production growth target, and capital spending budget.

CHK also reports that it has removed a large proportion of its
knock-out hedge portfolio, albeit at a cost, removing the risk
that a large proportion of production could end up unhedged if
certain minimum natural gas price points were penetrated.  As long
as CHK remains leveraged and in aggressive expansion mode, a
hedging program that does not include knockouts or similar
features would be supportive to the ratings.  CHK also sustained
its track record of debt conversions to equity, converting
$765 million of convertible debt to common equity during fourth
quarter 2008.

One major factor incorporated into CHK's ratings and stable
outlook is its goal of restraining capital spending to within cash
flow.  In CHK's formation of three major drilling joint ventures,
in which it sold minority working interest positions in some of
its most promising plays, CHK considerably reduced its drilling
risk and its capital needs.  It may also have improved the odds
that its 2009 reserve replacement costs would be materially lower
than its elevated 2008 replacement costs.  The joint ventures were
formed in three areas CHK views to be core intermediate term
growth engines: the Haynesville Shale, Woodford Shale, and
Marcellus Shale/Appalachian Basin.

In forming the drilling joint ventures, CHK shed major risk
exposures and spending obligations.  At a time when it was already
fully leveraged for the rating, and natural gas and oil markets
were expected to remain cyclically weak, CHK faced multiple
proportionally large and highly capital intensive unconventional
resource developments.

The ratings are restrained by very full leverage for the ratings,
a highly challenging and uncertain sector outlook, weak natural
gas prices (especially at the wellhead level in key basins widely
discounted from benchmark natural gas prices), a reduced pool of
unpledged reserves with which to cushion against the risk of
negative borrowing base redeterminations, elevated reserve
replacement costs, a penchant for aggressive growth and large
strategic transactions, and a highly complex financial structure.
Moody's estimates that CHK's leverage

Nevertheless, these transactions have positioned CHK strongly with
a very large highly diversified drilling inventory and ample
opportunity to improve basin efficiencies, in multiple major
plays, adding to its strong core positions in those basins.
As of September 30, 2008, CHK fully drew down its $3.5 billion
secured corporate revolver as a precaution at a time of elevated
risk in the banking sector.  Its subsequent forth quarter joint
venture and volumetric production payment transactions added to
its resulting large cash balance.  Moody's believes CHK is soundly
covered on its bank revolver covenants.

CHK's ratings or outlook are not affected by its announced
$1.7 billion full cost ceiling test write down.  Neither book
fixed assets nor net worth factor into Moody's rating methodology
for independent exploration and production companies.  Moody's
utilizes operating performance, leverage, volumetric scale, and
diversification measures that encapsulate E&P's total capital
outlays, the reserve and production response to that capital
reinvestment, the combined unit economics of production and
reinvestment, and leverage on a range of reserve, production, and
free cash flow measures.

Moody's last rating action for CHK dates from May 20, 2008, at
which time Moody's assigned ratings to its new senior unsecured
note and contingent convertible senior unsecured note offerings,
affirmed CHK's ratings, and moved its rating outlook to stable
from negative.

Chesapeake Energy is headquartered in Oklahoma City, Oklahoma.


CHESAPEAKE ENERGY: S&P Assigns 'BB' Rating on $500 Mil. Notes
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' issue rating
and '4' recovery rating to oil and gas exploration and production
company Chesapeake Energy Corp.'s proposed $500 million senior
unsecured notes due 2016.  Proceeds will repay outstanding bank
debt.

The ratings on Chesapeake are unaffected by the company's
preliminary fourth-quarter 2008 operational and financial results,
and its announcement that it expects to report a
$1.7 billion noncash impairment charge.  As of Sept. 30, 2008,
Oklahoma City-based Chesapeake had $14 billion of balance sheet
debt.

                           Ratings List

                     Chesapeake Energy Corp.

     Corporate credit rating                      BB/Stable/--

                            New Rating

     $500 million senior unsecured notes due 2016   BB
       Recovery rating                              4


CHINA HEALTH: Amends & Restates Lease and Note with Lei Guo
-----------------------------------------------------------
China Health Resource, Inc., disclosed in a regulatory filing with
the Securities and Exchange Commission that the company and Lei
Guo, the trustee under a Property Trust Agreement dated Dec. 16,
2008, agreed to amend and restate a Convertible Promissory Note
dated as of December 30, 2008, in the original sum of $5,710,994,
after agreement of revised terms relating to the conversion
mechanism.  The remaining terms and conditions of the Note are
otherwise unaffected.

On Dec. 19, 2008, the company and Mr. Guo entered into a Contract
of Lease of Property for forestry property of 3,262 acres located
in Heiwengtang Valley, Xianping Forestry, Pingwu County, Mianyang
City, Sichuan Province, People's Republic of China.

The Trustee, a PRC citizen, holds the Leased Property pursuant to
a Property Trust Agreement under Chinese law, dated Dec. 16, 2008,
the trustor and beneficiary of which is Sichuan Yinfa Resource
Development Co., Ltd., a PRC company.  The company's president,
Mr. Jiayin Wang, is the controlling shareholder and founder of
Yinfa Resource.

The company will use the Leased Property for commercial planting.
The term of the Lease Agreement began on Dec. 30, 2008, and will
expire on Dec. 30, 2039.  The Note is expected to be issued to the
Trustee on Dec. 30, 2008, in the principal amount of $5,710,994,
with interest at the rate of 4% per annum.

As amended and restated, the principal amount and all accrued but
unpaid interest will automatically be converted in 4 tranches into
shares of Common Stock on the after dates and at the fixed prices.
The Conversion Price is not subject to any adjustment in the event
of any stock split, stock dividend, reverse stock split or similar
recapitalization event affecting the shares.  The Mandatory
Conversions will be implemented as:

   1) On March 30, 2009, outstanding principal in the amount of
      $2,500,000, plus accrued but unpaid interest to the date of
      conversion, at the Conversion Price of $0.20 per share of
      the Common Stock;

   2) On Dec. 30, 2009, outstanding principal in the amount of
      $1,000,000, plus accrued but unpaid interest to the date of
      conversion, at the Conversion Price of $0.40 per share of
      the Common Stock;

   3) On March 30, 2010, outstanding principal in the amount of
      $1,000,000, plus accrued but unpaid interest to the date of
      conversion, at the Conversion Price of $1.00 per share of
      the Common Stock; and

   4) On Dec. 30, 2010, the balance of the outstanding principal
      in the amount of $1,210,994, plus accrued but unpaid
      interest to the date of conversion, at the Conversion Price
      of $1.50 per share of the Common Stock.

A full-text copy of the Amended and Restated Convertible
Promissory Note is available for free at:

               http://ResearchArchives.com/t/s?38c0

                        About China Health

Headquartered in Si Chuan Province, P.R. China, China Health
Resource Inc. fka. Voice Diary Inc. (OTC BB: CHRI) -- was
incorporated in the State of Delaware on Feb. 26, 2002.  Through
its wholly owned subsidary, Yin Fa, the company operates as a
pharmaceutical company focused on developing and commercializing
the Dahurian Angelica Root, one of the more popular traditional
Chinese medicines.  Dahurian Angelica Root is a popular herb
employed extensively as an ingredient in food, medicine and
cosmetics.

                     Going Concern Doubt

Lake & Associates, CPA's LLC, in Boca Raton, Florida, expressed
substantial doubt about China Health Resource Inc.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the year ended Dec. 31,
2007.  The auditing firm reported that the company has suffered
recurring losses and has yet to generate an internal cash flow.


CHINA HEALTH: Eight Executives Disclose Equity Stake
----------------------------------------------------
Eight of China Health Resource Inc.'s executives disclosed in a
regulatory filing with the Securities and Exchange Commission
their beneficial ownership of the company's shares of common
stock:

                                      Shares
                                      Beneficially
   Name and Position                  Owned
   -----------------                  ------------
Wang Ji Guan, President               199,500 Class A Common Stock

Wang Jiayin, Director, 10% Owner,
President                             1,000 Class A Common Stock

Zhong Ying, Director,
Chief Financial Officer                     0

Zhou Yi, Director,
Chief Financial Officer                     0

Wang Gewei, Director                        0

Wang Bing, Director                         0

Guo Lei, 10% Owner                          0

Chen Jiang, Chief Executive Officer         0

The number of shares outstanding of the company's common stock as
of Nov. 15, 2008, was (i) 99,288,894 shares of Class A Common
Stock of par value $0.01 and (ii) 2,000 shares of Class B Common
Stock of par value US $0.01.

                        About China Health

Headquartered in Si Chuan Province, P.R. China, China Health
Resource Inc. fka. Voice Diary Inc. (OTC BB: CHRI) -- was
incorporated in the State of Delaware on Feb. 26, 2002.  Through
its wholly owned subsidary, Yin Fa, the company operates as a
pharmaceutical company focused on developing and commercializing
the Dahurian Angelica Root, one of the more popular traditional
Chinese medicines.  Dahurian Angelica Root is a popular herb
employed extensively as an ingredient in food, medicine and
cosmetics.

                       Going Concern Doubt

Lake & Associates, CPA's LLC, in Boca Raton, Florida, expressed
substantial doubt about China Health Resource Inc.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the year ended Dec. 31,
2007.  The auditing firm reported that the company has suffered
recurring losses and has yet to generate an internal cash flow.


CIFG ASSURANCE: S&P Raises Ratings on 8 Classes of Notes to 'BB'
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on eight
CIFG Assurance North America Inc. insurance-supported medium-term
note issues, and removed the ratings from CreditWatch with
developing implications, where they were placed Aug. 26, 2008.

These rating actions follow S&P's Jan. 22, 2009, raising of S&P's
financial strength rating on CIFG to 'BB' from 'B'.

The ratings are based solely on the full financial guarantee
insurance policies provided by CIFG, which guarantee the timely
payment of interest and principal according to the transaction's
terms.

Under S&P's criteria, the issue rating on an insured bond reflects
the higher of the rating on the bond insurer (monoline) or
Standard & Poor's underlying rating on the securities.  Since
these transactions do not have SPURs, however, the raised ratings
are based solely on the insurance policies that CIFG provides.

      Ratings Raised And Removed From Creditwatch Developing

                  Republic Holdings Texas II L.P.

                                              Rating
                                              ------
Issuer                      CUSIP        To           From
------                      -----        --           ----
2008-A                  760488AB2        BB           B/Watch Dev
2008-B                  760488AD8        BB           B/Watch Dev
2008-C                  760488AF3        BB           B/Watch Dev

                 Whitecap New York Growth Fund LLC

                                              Rating
                                              ------
Issuer                      CUSIP        To           From
------                      -----        --           ----
2004                    96466TAA9        BB           B/Watch Dev

               Whitecap New York Growth Fund II LLC

                                              Rating
                                              ------
Issuer                      CUSIP        To           From
------                      -----        --           ----
2005                    96466QAA5        BB           B/Watch Dev

               Whitecap Texas Opportunity Fund L.P.

                                              Rating
                                              ------
Issuer                      CUSIP        To           From
------                      -----        --           ----
2005                    96466VAA4        BB           B/Watch Dev

              Whitecap Texas Opportunity Fund II L.P.

                                              Rating
                                              ------
Issuer                      CUSIP        To           From
------                      -----        --           ----
2008A                   96466YAA8        BB           B/Watch Dev
2008B                   96466YAB6        BB           B/Watch Dev


CITIGROUP INC: Treasury Deal May Further Restrict Operations
------------------------------------------------------------
David Enrich and Damian Paletta at The Wall Street Journal report
that Citigroup Inc. regulatory agreement with the Treasury
Department might cause the company greater restrictions in its
operations.

Citigroup spokesperson Shannon Bell has denied that the agreement,
which was finalized at the end of last year, would restrict
Citigroup's activities, WSJ says.

According to WSJ, Citigroup has recently begun operating under the
regulatory agreement it disclosed in December 2008, which is part
of the government's rescue of the company.

WSJ relates that the Treasury required Citigroup to disclose
whether it or any of its subsidiaries are:

     -- subject to any cease-and-desist orders,
     -- memorandums of understanding,
     -- consent orders, or
     -- other enforcement actions or regulatory agreements.

WSJ states that Citigroup didn't check a box indicating that it
isn't operating under any such directives, but the document says,
"Certain items previously disclosed to the company's appropriate
federal banking agency."  According to WSJ, the document didn't
describe the nature of the regulatory agreement.

                       About Citigroup

Based in New York, Citigroup Inc. (NYSE: C) --
http://www.citigroup.com-- is organized into four major segments
-- Consumer Banking, Global Cards, Institutional Clients Group,
and Global Wealth Management.  Citi had $2.0 trillion in total
assets on $1.9 trillion in total liabilities as of Sept. 30, 2008.

As reported in the Troubled Company Reporter on Nov. 25, 2008, the
U.S. government entered into an agreement with Citigroup to
provide a package of guarantees, liquidity access, and capital.
As part of the agreement, the U.S. Treasury and the Federal
Deposit Insurance Corporation will provide protection against the
possibility of unusually large losses on an asset pool of
approximately $306 billion of loans and securities backed by
residential and commercial real estate and other such assets,
which will remain on Citigroup's balance sheet.  As a fee for this
arrangement, Citigroup will issue preferred shares to the Treasury
and FDIC.  In addition and if necessary, the Federal Reserve will
backstop residual risk in the asset pool through a non-recourse
loan.


CLEARPOINT BUSINESS: Interim COO Says Not Owning Equity Stake
-------------------------------------------------------------
Brian Delle Donne, interim COO of Clearpoint Business Resources,
Inc., disclosed in a Form 3 filing with the Securities and
Exchange Commission that he does not beneficially own any of the
company's common stock.

The number of shares outstanding of Clearpoint's common stock as
of Nov. 12, 2008, was 14,251,964.

Based in Chalfont, Pennsylvania, ClearPoint Business Resources
Inc., through its proprietary, technology-based iLabor network
platform, provides its clients a comprehensive web-based portal to
streamline the process involved in procurement and management of
temporary labor through a network of ClearPoint-approved staffing
vendors.

                       Going Concern Doubt

At Sept. 30, 2008, the company had an accumulated deficit of
$53,918,532 and working capital deficiency of $8,904,950.  For the
nine months ended Sept. 30, 2008, the company incurred a net loss
of $38,213,730.  Although the company restructured its debt and
obtained new financing in the second quarter of 2008, cash
projected to be generated from operations may not be sufficient to
fund operations and meet debt repayment obligations during the
next twelve months.  In order to meet its future cash and
liquidity needs, the company may be required to raise additional
financing. There is no assurance that the company will be
successful in obtaining additional financing.  If the company does
not generate sufficient cash from operations or raise additional
financing, there is substantial doubt about the ability of the
company to continue as a going concern.


CLEARPOINT BUSINESS: Taps Brian Delle Donne as Interim COO
----------------------------------------------------------
ClearPoint Business Resources, Inc., entered into a letter
agreement with XRoads Solutions Group, LLC.  Pursuant to the
XRoads Agreement, among other matters, XRoads agreed to provide
the services of Brian Delle Donne to serve as the company's
interim chief operating officer.  In the capacity, Mr. Delle Donne
will have direct responsibility over the company's day to day
operations and will report to Michael D. Traina, the company's
chief executive officer.  XRoads will submit bi-weekly oral or
written progress reports to the company's board of directors.
The term of the Engagement commenced on Jan. 13, 2009, and will
continue for 4 months.

The company agreed pay XRoads $50,000 per month for each of the
first four months of Mr. Delle Donne's services and the parties
will mutually agree to a new fee structure in the event Mr. Delle
Donne serves beyond that period.  The company also agreed to pay
XRoads a monthly fee based upon achievement of certain increases
in the company's earnings before interest, taxes, depreciation and
amortization, calculated pursuant to the XRoads Agreement.  The
fee will be equal to 10% of increases in the company's monthly
EBITDA during the term of the Engagement over the company's EBITDA
for the month ended Jan. 31, 2009, capped at $50,000 per month.
The company agreed to pay reasonable expenses incurred by XRoads
for services related to the Engagement and remitted a retainer in
the amount of $10,000 to XRoads for such purpose.  As of Jan. 20,
2008, pursuant to the XRoads Agreement, the company paid XRoads
$50,000 for the first monthly fee and the $10,000 retainer for
reimbursement of expenses.  Any amounts not paid by the company
when due pursuant to the XRoads Agreement will bear interest at an
annual rate of 12% or the maximum rate allowed by law, whichever
is less.

In addition, the company agreed to issue XRoads a warrant to
purchase up to 100,000 shares of the company's common stock at the
exercise price of $0.12 per share.  The warrant will be held in
escrow, to be released within 120 days of the date of the XRoads
Agreement, and will be exercisable upon such release through Dec.
31, 2010.  In the event the Engagement is extended, the company
agreed to issue an additional warrant to purchase 75,000 shares of
the company's common stock with an expiration date of April 30,
2011.

In the event the company elects to pursue a financing, either in
the form of debt or equity, within one year of the date of the
XRoads Agreement, XRoads will serve as the company's non-exclusive
financial advisor for such financing in accordance with the terms
of the XRoads Agreement.  If the financing is consummated pursuant
to the terms set forth in the XRoads Agreement, the company agreed
to pay XRoads a transaction fee based on the type and value of the
transaction.  The transaction fee will be prorated accordingly in
the event the company retains an additional financial advisor in
connection with the transaction, but such fee shall not be less
than $75,000 if XRoads' efforts result in a bona fide financing
alternative for the company.

Either the company or XRoads may terminate the XRoads Agreement at
any time with at least thirty days prior written notice.  In the
event of a material breach of the XRoads Agreement by either
party, including, but not limited to, the company's failure to
promptly pay amounts due for services rendered or for
reimbursement of expenses, the non-breaching party may terminate
the Engagement at any time thereafter upon 5 days advance notice.

The XRoads Agreement also includes various representations,
warranties, covenants and other provisions customary for a
transaction of this nature.

In accordance with the XRoads Agreement, Mr. Delle Donne has been
serving as the company's chief operating officer since Jan. 13,
2009.

Mr. Delle Donne has served as a Principal at XRoads, an
operational and performance improvement advisory firm, since
June 2008.  Mr. Delle Donne also has served as a director of UMS
Group, Inc., a worldwide management consulting firm, since 1999.
Mr. Delle Donne served as the executive vice president and chief
operating officer of Computer Horizons Corporation, an information
technology staffing and solutions provider, from 2005 through
2007.

Mr. Delle Donne worked as a private consultant after his service
with Computer Horizons Corporation until joining XRoads.  He also
served as executive vice president and COO of RCM Technologies,
Inc., a staffing services provider for various markets, from
1998 through 2005.  He served as director and member of the
executive committee of RCM Technologies, Inc. from 2000 through
2004. Mr. Delle Donne is a graduate of Brown University.

              About ClearPoint Business Resources Inc.

Based in Chalfont, Pennsylvania, ClearPoint Business Resources
Inc., through its proprietary, technology-based iLabor network
platform, provides its clients a comprehensive web-based portal to
streamline the process involved in procurement and management of
temporary labor through a network of ClearPoint-approved staffing
vendors.

                       Going Concern Doubt

At Sept. 30, 2008, the company had an accumulated deficit of
$53,918,532 and working capital deficiency of $8,904,950.  For the
nine months ended Sept. 30, 2008, the company incurred a net loss
of $38,213,730.  Although the company restructured its debt and
obtained new financing in the second quarter of 2008, cash
projected to be generated from operations may not be sufficient to
fund operations and meet debt repayment obligations during the
next twelve months.  In order to meet its future cash and
liquidity needs, the company may be required to raise additional
financing. There is no assurance that the company will be
successful in obtaining additional financing.  If the company does
not generate sufficient cash from operations or raise additional
financing, there is substantial doubt about the ability of the
company to continue as a going concern.


COLONIAL BANCGROUP: Reports $825 Million 4th Quarter Net Loss
-------------------------------------------------------------
The Colonial BancGroup, Inc., reported a net loss for the quarter
ended December 31, 2008, of $825 million, or $4.11 per share, and
$880 million, or $4.71 per share, for the year ended December 31,
2008.

Fourth quarter results included a non-cash charge of $575 million
and a tax benefit of $40.6 million from the impairment charge,
or $2.66 per share, net for goodwill impairment.  Excluding the
net goodwill impairment charge, operating loss for the quarter
was $291 million, or $1.45 per share.

"For the banking industry, the events of the past three months
have no parallel in modern history.  I want to emphasize that
Colonial's predominant goal is to reduce stressed credits, whether
through sales, charge-offs or loan workout efforts. The actions
taken in the fourth quarter demonstrate our adherence to that
goal," said Robert E. Lowder, Colonial's Chairman, CEO and
President.

Financial Stability Strategy and Capital

The economic environment in Colonial's markets deteriorated
significantly over the course of 2008. Colonial took proactive
steps through the year to maintain its capital and strong
liquidity positions:

  * Raised $350 million of common stock
  * Issued $250 million of subordinated debt
  * Sold $427 million of troubled assets
  * Provided $729 million for loan losses
  * Reduced risk weighted assets by $1.7 billion
  * Improved all key measures of liquidity

Colonial has received preliminary approval to receive $553 million
from the U.S. Treasury's Capital Purchase Program (TARP).  Such
participation is subject to Colonial's increasing equity by $300
million. "The Company is actively pursuing a variety of capital
raising alternatives to increase equity by $300 million which
would satisfy this condition of the TARP preliminary approval.
The Company is currently in negotiations with several investors.
One such investor group is SunTx Capital Partners of Dallas,
Texas, with which the Company has signed a non-binding letter of
intent with respect to a potential investment by SunTx Capital
Partners and prospective co-investors of up to 24.9% of the
Company's proforma capitalization with a price range per share of
$1.00 to $1.50, subject to the negotiations of a definitive
agreement and obtaining of necessary approvals," said Mr. Lowder.

Colonial is working informally with its regulators to increase its
capital ratios.  It said that the anticipated receipt of TARP
capital and additional equity will greatly improve its capital
position consistent with regulatory expectations.  The capital
raising activities are expected to be completed in the first
quarter of 2009.

                             Liquidity

Colonial's branch franchise of 347 locations continues to provide
a strong funding base, as deposits fund 72% of total assets.
Retail deposits at December 31, 2008 were $17.4 billion, an 11%
annualized increase over September 30, 2008, and a 2% increase
over December 31, 2007.  At December 31, 2008, Colonial had cash
balances of over $2 billion, a significant portion of
which is at the Federal Reserve.

                           Asset Quality

During the fourth quarter 2008, Colonial continued its aggressive
loan workout efforts and sold approximately $317 million of
problem assets and transferred another $49 million to held for
sale. As a result of the asset sales and continued declines in
collateral values, Colonial charged-off $415 million in the fourth
quarter of 2008.  Total net charge-offs for 2008 were $643
million, or 4.16% of average loans. Colonial's provision for loan
losses of $729 million for 2008 was in excess of annual net
charge-offs, increasing the allowance for loan losses to 2.24% of
net loans at December 31, 2008, from 1.50% at December 31,
2007. Nonperforming assets, excluding loans transferred to held
for sale, were $661 million at December 31, 2008, a decline of
$17 million from September 30, 2008.  The ratio of nonperforming
assets, excluding loans transferred to held for sale, to net
loans, other real estate and repossessions at December 31, 2008
was 4.51%, compared to 4.43% at September 30, 2008.  At
December 31, 2008, 79% of Colonial's nonperforming assets were in
the construction-related sector of the portfolio.  Colonial
has worked diligently to reduce the exposure to construction loans
in its portfolio, and as of December 31, 2008, the balances
had decreased $1.4 billion, or 22%, compared to December 31, 2007.

                    Mortgage Warehouse Lending

Warehouse lending is a critical link in the U.S. housing finance
chain, providing short-term funding for mortgage loans that are
eventually sold into the secondary market.  Colonial's support of
warehouse lending is essential to the industry.  Colonial is a top
10 mortgage warehouse lender in the United States and is the
market leader in the Southeast.  Through this division, in 2008
Colonial provided approximately $70 billion of interim funding
representing nearly 400,000 residential mortgage loans.  The
division is highly profitable with minimal credit losses.

                        Net interest income

Net interest income declined by $26 million from the third quarter
of 2008, and the Company's net interest margin declined to
2.37% from 2.85% over this same period.  The margin was negatively
impacted by the buildup of Colonial's cash position for liquidity
preservation, the decrease in earning assets from the Company's
deleveraging strategy and customer migration to higher cost time
deposits.

                        Noninterest income

Core noninterest income for 2008 decreased $8.6 million, or 4%,
from 2007.  The largest decline in noninterest income came from
mortgage warehouse fees of $17 million as a result of the
termination of the commercial paper conduit used to fund the
mortgage warehouse division.  This decrease was offset somewhat by
an excellent year in revenue from mortgage banking origination and
sales, which increased $15 million, or 101%, in 2008 over 2007 as
a result of increased secondary market FHA and VA loan sales.
Colonial continues to increase its mortgage origination staff to
further diversify its production to agency products which have
yielded higher volumes and margins.  Another line of business that
has performed well this year is wealth management services, which
saw an increase in revenue of 7% in 2008 compared to 2007.

                           Colonial 1st

Colonial has engaged Harvest Earnings Group to spearhead a revenue
enhancement and cost savings project which is named Colonial 1st.
The program is designed to encourage Colonial employees to submit
ideas that will result in earnings growth through revenue
enhancements and expense reductions. To date, thousands of ideas
have been generated, and at the conclusion of the project in late
first quarter of 2009, the best ideas will be implemented.
Colonial expects its results to be significant, based on the
results achieved at similar sized institutions that have
undertaken this program. Colonial anticipates cost savings of 5%
to 8% of noninterest expense.

                         Other Cost Savings

In addition to the Colonial 1st initiative, Colonial has frozen
salaries for executives in 2008 and 2009 and eliminated bonuses in
2008. Colonial also eliminated merit increases and non-production
incentive plans for all employees in 2009. "These unprecedented
times require the implementation of full-scale cost reduction
efforts. Those efforts are ongoing and will require further
scrutiny at all levels of the Company," said Mr. Lowder.

                      Moody's Lowers Ratings

Moody's Ratings has lowered Colonial BancGroup's senior rating
from investment grade at Baa2 by six notches to B2, noting that
non-performing loans increased 400% in the last year.  Moody's
Investors Service said it's "uncertain" the proposed $300 million
equity investment can be arranged.

According to Bloomberg's Bill Rochelle, Colonial BancGroup's stock
tanked following the company's Jan. 28 announcement.  The stock
lost almost half its value Jan. 28, in the process making a
52-week low and closing at 85 cents, down 73 cents in New York
Stock Exchange trading. The high over the last year was $16.06
Feb. 1, 2008.

                     About Colonial BancGroup

Colonial BancGroup -- http://www.colonialbank.com-- operates 347
branches in Florida, Alabama, Georgia, Nevada and Texas with over
$26 billion in assets.  The Company's common stock is traded on
the New York Stock Exchange under the symbol CNB. In some
newspapers, the stock is listed as ColBgp.


COLONIAL BANCGROUP: Fitch Cuts Issuer Default Rating to 'BB'
------------------------------------------------------------
Fitch Ratings has downgraded the ratings of the Colonial
Bancgroup, Inc., and its subsidiaries, and placed the ratings on
Negative Watch.

The degree of credit problems at CNB has accelerated beyond
Fitch's expectations, with credit costs increasing beyond
manageable levels, materially affecting the company's earnings,
and causing net charge-offs to increase to 11.15% (annualized) for
fourth-quarter 2008 (4Q'08).  Although CNB has been aggressive in
addressing its problem assets and has increased reserve levels,
the downgrade largely reflects the prospect of prolonged credit
stress, which Fitch believes will continue to hamper the company's
performance and weigh heavily on its financial condition.  The
preponderance of credit concerns remains in CNB's residential real
estate construction portfolio; the majority of the portfolio
resides in the troubled Florida market, which drove non-performing
assets to 4.83% at Dec. 31, 2008.

The company did receive preliminary approval to participate in the
Treasury's Capital Purchase Program, but it has yet to be funded.
Receipt of the funds is contingent upon the company's ability to
raise an additional $300 million in equity - a condition Fitch
believes will be difficult to meet, considering the prevailing
market environment.  CNB has indicated that it is in the process
of raising this external capital and has signed a non-binding
letter of intent with a private equity firm (SunTx Capital
Partners).  Management anticipates completing the capital raising
activities and accessing TARP capital funding by the end of 1Q'09.

A positive resolution of the Negative Watch hinges upon CNB's
receipt of the additional capital and the stabilization of asset
quality deterioration.  Conversely, should the company fail to
raise the necessary capital and significant credit quality
deterioration persist, multiple-notch downgrades would result.

Fitch has downgraded these ratings with a Negative Watch:

The Colonial BancGroup, Inc.

  -- Long-term Issuer Default Rating (IDR) to 'BB' from 'BBB-';
  -- Short-term IDR to 'B' from 'F3';
  -- Subordinated debt to 'BB-' from 'BB+'
  -- Individual to 'C/D' from 'C'.

Colonial Bank, N.A.

  -- Long-term IDR to 'BB+' from 'BBB-';
  -- Long-term deposits to 'BBB-' from 'BBB';
  -- Short-term IDR to 'B' from 'F3';
  -- Subordinated debt to 'BB' from 'BB+';
  -- Individual to 'C/D' from 'C'.

Colonial Capital Trust IV

  -- Preferred stock to 'BB' from 'BB+'.

CBG Florida REIT

  -- Preferred stock to 'BB' from 'BB+'.

In addition, Fitch has affirmed these ratings:

Colonial BancGroup, Inc.

  -- Support '5';
  -- Support Floor 'NF'.

Colonial Bank, N.A.

  -- Short-term deposits 'F3';
  -- Support '5';
  -- Support Floor 'NF'.


COLONIAL BANCGROUP: Moody's Cuts Bank Strength Rating to 'D'
------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Colonial
BancGroup (senior to B2 from Baa2) and its subsidiaries, including
its lead bank, Colonial Bank (financial strength to D from C-, and
long term bank deposits to Ba2 from Baa1).  Following the
downgrade, the ratings are on review for further downgrade.

Moody's ratings action follows Colonial's announcement that it
lost $825 million in the fourth quarter, as well as the company's
disclosure that the $550 million of Tarp capital that it received
preliminary approval for on December 2, 2008, is contingent on
Colonial's raising $300 million of common equity.  In Moody's
view, it is uncertain if Colonial can raise the required capital.
Although Colonial has a letter of intent from a private equity
investor to purchase up to 24.9% of the company on a pro-forma
basis, that falls well short of the $300 million target set for it
by the U.S. government.  The rating review will focus on the
company's ability to raise the common equity.

Colonial's sizable concentration in Florida commercial real
estate, residential development in particular, is the cause of the
magnitude of the downgrade.  Colonial's CRE accounts for
approximately 6 times tangible common equity, with construction
lending comprising approximately 60% of total CRE.  Colonial has
seen more than a four-fold increase in nonperforming assets from
the prior year end, largely in the residential construction and
land portfolio.  Given Moody's views of the likely credit costs in
this portfolio, the rating agency believes there is significant
risk of the firm becoming undercapitalized.  Without fresh capital
this puts severe pressure on the bank.

If Colonial is successful and ultimately receives the Tarp
funding, then Colonial's ratings could be confirmed.  If on the
other hand, Colonial is unsuccessful, its ratings will be further
downgraded.

Moody's last rating action on Colonial was on January 11, 2008,
when the bank's financial strength rating was downgraded to C-
from C and long term deposits to Baa1 from A3, and the outlook was
changed to negative from stable.

Colonial is headquartered in Montgomery, Alabama, and its reported
assets were $26 billion at December 31, 2008.

Downgrades:

Issuer: CBG Florida REIT Corp.

  -- Preferred Stock Preferred Stock, Downgraded to Caa2 from
     Ba1, under review

Issuer: Colonial BancGroup, Inc. (The)

  -- Issuer Rating, Downgraded to B2 from Baa2, under review

  -- Multiple Seniority Shelf, Downgraded to a range of (P)Caa2
     to (P)Caa1 from a range of (P)Ba1 to (P)Baa3, under review

  -- Subordinate Regular Bond/Debenture, Downgraded to Caa1 from
     Baa3, under review

Issuer: Colonial Bank

  -- Bank Financial Strength Rating, Downgraded to D from C-,
     under review

  -- Issuer Rating, Downgraded to Ba3 from Baa1, under review

  -- OSO Rating, Downgraded to NP from P-2

  -- Deposit Rating, Downgraded to NP from P-2

  -- OSO Senior Unsecured OSO Rating, Downgraded to Ba3 from
     Baa1, under review

  -- Subordinate Regular Bond/Debenture, Downgraded to B2 from
     Baa2, under review

  -- Senior Unsecured Deposit Rating, Downgraded to Ba2 from
     Baa1, under review

Issuer: Colonial Capital Trust IV

  -- Preferred Stock Preferred Stock, Downgraded to Caa1 from
     Baa3, under review

Outlook Actions:

Issuer: CBG Florida REIT Corp.

  -- Outlook, Changed To Rating Under Review From Negative

Issuer: Colonial BancGroup, Inc. (The)

  -- Outlook, Changed To Rating Under Review From Negative

Issuer: Colonial Bank

  -- Outlook, Changed To Rating Under Review From Negative

Issuer: Colonial Capital Trust IV

  -- Outlook, Changed To Rating Under Review From Negative


COMSTOCK HOMEBUILDING: Mathis Partners' Bankruptcy Case Dismissed
-----------------------------------------------------------------
Comstock Homebuilding Companies, Inc., says the bankruptcy filing
of its Mathis Partners, LLC subsidiary in Atlanta, Georgia, has
been dismissed.  At this time, Mathis Partners has retained
ownership of its sole asset, the Gates at Luberon property in
Forsyth County, Georgia.  Haven Trust Bank of Georgia, the lender
to Mathis Partners related to the Gates at Luberon project was
closed by the Federal Deposit Insurance Corporation in December
2008.  The loan is now owned by the FDIC.  The company is awaiting
information from the FDIC regarding its intended handling of the
loan.

                       About Mathis Partners

Reston, Virgina-based Mathis Partners, LLC --
http://www.comstockhomebuilding.com/-- is a single purpose
limited liability company that is a wholly owned subsidiary of
Comstock Homebuilding Cos., Inc.  It was formed by Parker Chandler
Homes, Inc., to develop the Gates of Luberon residential
development project in Forstyth County, Georgia, with Haven Trust
as its lender.

It filed its chapter 11 petition on March 31, 2008 (Bankr. N.D.
Ga. Case No. 08-65876).  Judge Margaret Murphy presides over the
case.  Paul Reece Marr, Esq., at Paul Reece Marr, PC, represents
the Debtor in its restructuring efforts.  The Debtor estimated
both its assets and debts to be between $1 million and
$10 million.

                   About Comstock Homebuilding

Based in Reston, Viginia, Comstock Homebuilding Companies, Inc.
(NasdaqGM: CHCI) -- http://www.comstockhomebuilding.com--
develops, builds and markets single-family homes, townhouses and
condominiums in the Washington D.C., Raleigh, North Carolina and
Atlanta, Georgia metropolitan markets.  The company also provides
certain management and administrative support services to certain
related parties.

                          *     *     *

As reported in the Troubled Company Reporter on April 3, 2008,
PricewaterhouseCoopers LLP raised substantial doubt about the
ability of Comstock Homebuilding Companies, 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 stated that
the company has experienced declining market conditions and has
significant debt maturing during 2008.

The Troubled Company Reporter said on July 11, 2008, that Comstock
has retained FTI Consulting Inc. as advisor to the company with
respect to strategic and financial alternatives in the face of a
prolonged real estate downturn.

On January 29, 2009, Comstock Homebuilding Companies, Inc. and
Comstock Penderbrook, L.C., a wholly owned subsidiary of the
Company, entered into a forbearance agreement with Guggenheim
Corporate Funding with respect to the $13.5 million outstanding
under the company's secured Penderbrook project loan.  The company
had receive a notice of default from Guggenheim on
August 22, 2008.  In connection with the forbearance agreement the
original maturity date of the loan was extended from
February 22, 2010 to March 6, 2011.  The terms of the forbearance
agreement provide for additional incremental extensions until
March 6, 2012, provided certain unit delivery requirement
thresholds are met.


COMSTOCK HOMEBUILDING: Nasdaq Extends Suspension of Trading
-----------------------------------------------------------
Comstock Homebuilding Companies, Inc., has received a notice from
the Nasdaq of its determination to extend its suspension of the
bid price and market value of publicly held shares requirements.
Enforcement of these rules is now scheduled to resume April 20,
2009.  As such, Comstock's delisting has been suspended until on
or about July 27, 2009, unless either the Company regains
compliance with the bid-price requirements or Nasdaq extends its
enforcement suspension further.

Based in Reston, Viginia, Comstock Homebuilding Companies, Inc.
(NasdaqGM: CHCI) -- http://www.comstockhomebuilding.com--
develops, builds and markets single-family homes, townhouses and
condominiums in the Washington D.C., Raleigh, North Carolina and
Atlanta, Georgia metropolitan markets.  The company also provides
certain management and administrative support services to certain
related parties.

                          *     *     *

As reported in the Troubled Company Reporter on April 3, 2008,
PricewaterhouseCoopers LLP raised substantial doubt about the
ability of Comstock Homebuilding Companies, 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 stated that
the company has experienced declining market conditions and has
significant debt maturing during 2008.

The Troubled Company Reporter said on July 11, 2008, that Comstock
has retained FTI Consulting Inc. as advisor to the company with
respect to strategic and financial alternatives in the face of a
prolonged real estate downturn.

On January 29, 2009, Comstock Homebuilding Companies, Inc. and
Comstock Penderbrook, L.C., a wholly owned subsidiary of the
Company, entered into a forbearance agreement with Guggenheim
Corporate Funding with respect to the $13.5 million outstanding
under the company's secured Penderbrook project loan.  The company
had receive a notice of default from Guggenheim on
August 22, 2008.  In connection with the forbearance agreement the
original maturity date of the loan was extended from
February 22, 2010 to March 6, 2011.  The terms of the forbearance
agreement provide for additional incremental extensions until
March 6, 2012, provided certain unit delivery requirement
thresholds are met.


COMSTOCK HOMEBUILDING: Restructures $13.5-Mil. Penderbrook Debt
---------------------------------------------------------------
Comstock Homebuilding Companies, Inc., and Comstock Penderbrook,
L.C., a wholly owned subsidiary of the Company, have entered into
a forbearance agreement with Guggenheim Corporate Funding with
respect to the $13.5 million outstanding under the company's
secured Penderbrook project loan.  The company had received a
notice of default from Guggenheim on August 22, 2008.

In connection with the forbearance agreement the original maturity
date of the loan was extended from February 22, 2010, to March 6,
2011.  The terms of the forbearance agreement provide for
additional incremental extensions until March 6, 2012, provided
certain unit delivery requirement thresholds are met.

Under the terms of the forbearance agreement the interest rate in
effect for each calendar year will be determined on the last day
of the year, retroactively for the year, based upon the cumulative
unit settlements during the year.  The interest rate will start to
step down from a high of LIBOR plus 1,400 bps to a floor of LIBOR
plus 400 bps each year based on a range of seven to twenty unit
settlements occurring in 2009 and a range of sixteen to twenty-six
unit settlements in 2010.  Prior to the execution of the
forbearance agreement, the interest rate spread on the loan was
fixed at 600 bps over LIBOR.  In addition, the forbearance
agreement provides Comstock a one-time option to retire the note
prior to May 26, 2009 at a discount of between 9% and 16% based
upon when the option is exercised.

"This debt restructuring is in keeping with our previously
announced plans to restructure a significant portion of our debts
in recognition of difficult market conditions," said Christopher
Clemente, Comstock's Chairman and Chief Executive Officer.  "Since
announcing in early 2008 our intent to focus on restructuring our
debts we have been successful in restructuring over $142 million
of debt.  We believe that the arrangement we have reached with the
lender at Penderbrook is particularly important because it allows
for both the orderly completion of the project and the recovery of
the significant amount of capital we have invested in the project.
The substantial reduction in sales pace requirements incorporated
into the forbearance agreement as compared to the requirements of
the original loan provides an opportunity to operate the property
substantially as a rental community while waiting for market
conditions to stabilize and improve.  We believe this is crucial
to our efforts to preserve the value of the units we still hold in
the community as well as the units previously delivered to our
customers."

"Regarding our efforts to stabilize the financial condition of
Comstock, our actual outstanding debt at December 31, 2008, was
approximately $98 million which represents a reduction of
$73 million from year end 2007," Mr. Clemente continued.  "In
addition to reducing debt we significantly reduced overhead costs
across the board including a reduction of overall compensation
costs of more then 50% during 2008. To that end we will not be
paying cash or stock bonuses in connection with 2008 results.
Further, in an effort to align executive compensation with market
realities, we have reduced planned executive compensation for 2009
as well.  During 2009 we will remain focused on our goals of
preserving and enhancing our liquidity, reducing costs, rebuilding
backlog, generating cash flow and positioning Comstock for a
return to profitability when the housing market recovers.  We
remain committed to achieving our goal of restoring shareholder
value."

The company also announced that Comstock Potomac Yard, LC, a
wholly owned subsidiary of the Company and developer of the
company's Eclipse at Potomac Yard project, has filed a
$13.8 million civil lawsuit against its general contractor,
Balfour Beatty Construction -- formerly Centex Construction.  The
lawsuit alleges, among other things, both that Balfour Beatty
breached its contractual obligations on multiple occasions
resulting in costly delays and that Balfour Beatty left
significant warranty claims unaddressed.  The trial is expected to
occur in late 2009.

                    About Comstock Homebuilding

Based in Reston, Viginia, Comstock Homebuilding Companies, Inc.
(NasdaqGM: CHCI) -- http://www.comstockhomebuilding.com--
develops, builds and markets single-family homes, townhouses and
condominiums in the Washington D.C., Raleigh, North Carolina and
Atlanta, Georgia metropolitan markets.  The company also provides
certain management and administrative support services to certain
related parties.

The Troubled Company Reporter said on July 11, 2008, that Comstock
has retained FTI Consulting Inc. as advisor to the company with
respect to strategic and financial alternatives in the face of a
prolonged real estate downturn.

                        Going Concern Doubt

As reported in the Troubled Company Reporter on April 3, 2008,
PricewaterhouseCoopers LLP raised substantial doubt about the
ability of Comstock Homebuilding Companies, 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 stated that
the company has experienced declining market conditions and has
significant debt maturing during 2008.


CONTINENTAL AIRLINES: Posts $585 Million Full Year 2008 Loss
------------------------------------------------------------
Eight of the nine major U.S. airlines that have disclosed fourth
quarter and full year 2008 results have posted losses aggregating
$19.6 billion.  Only Southwest Airlines posted a net profit.

                                Net Profit         Net Profit
                             Full Year 2008      Full Year 2007
                             --------------      --------------
Delta Air Lines, Inc.       ($8,900,000,000)     $1,600,000,000
AMR Corp.                    (2,100,000,000)        504,000,000
Southwest Air Lines             178,000,000         645,000,000
UAL Corp.                    (5,348,000,000)        403,000,000
US Airways Group Inc.        (2,210,000,000)        427,000,000
Continental Airlines  Inc.     (585,000,000)        459,000,000
Alaska Air Group Inc.          (135,900,000)        124,300,000
Skywest Inc.                         --                  --
JetBlue Airways Corp.           (76,000,000)         41,000,000
AirTran Holdings, Inc.         (273,829,000)         52,683,000

Skywest is expected to release its fourth quarter 2008 results on
February 11.  The figures provided by JetBlue were pre-tax profit
(or losses).

                                Net Profit         Net Profit
                            4th Quarter '08     4th Quarter '07
                            ---------------     ---------------
Delta Air Lines, Inc.       ($1,400,000,000)       ($70,000,000)
AMR Corp.                      (340,000,000)        (69,000,000)
UAL Corp.                    (1,303,000,000)        (53,000,000)
Southwest Airlines              (56,000,000)        111,000,000
US Airways                     (541,000,000)        (79,000,000)
Continental Airlines           (266,000,000)        (32,000,000)
Alaska Air Group Inc.           (75,200,000)         (7,400,000)
Skywest Inc.                         --                  --
Jetblue Airways Corp.           (49,000,000)         (3,000,000)
AirTran Holdings, Inc.         (118,391,000)         (2,171,000)

                       High Fuel Jet Prices

The airlines said high fuel prices for most of 2008 have
contributed to their losses.

AMR, the parent of American Airlines, said that historically high
and volatile jet fuel prices continued to challenge it in the
fourth quarter of 2008.  AMR paid $133 million and $2.7 billion
more for fuel in the fourth quarter and for all of 2008,
respectively, than it would have paid at prevailing prices from
the corresponding prior-year periods.

Delta faced over $2 billion in increased fuel costs in 2008.
While fuel prices dropped in the fourth quarter 2008, Delta paid
for high fuel prices due to its fuel hedging contracts.  Delta
would have reported a $167 million net profit excluding special
items in the December 2008 quarter, if fuel had been purchased at
market prices.

UAL said the historic peak in prices and the impact on hedges
driven by the rapid decline resulted in a $2.9 billion increase in
cost compared to 2007 fuel prices.  UAL recorded $370 million in
cash losses on fuel hedges that settled in the quarter, as the
recent fall in fuel prices drove losses on hedges put in place
earlier in the year to mitigate the steep increase in prices that
had occurred in the second and third quarters of 2008. In
addition, the company also recorded non-cash, net mark-to-market
losses on its fuel hedges of $566 million.

US Airways Group Chairman and CEO Doug Parker stated, "Like other
airlines that have reported before us, our financial results
reflect the staggering increase in fuel prices that we faced
throughout most of 2008.  In fact, had our 2008 fuel price
including realized gains and losses on fuel hedging instruments
remained at 2007 levels, the company's fuel expense would have
been approximately $1.4 billion lower.

                  Lower Revenues Due to Recession

Delta Air Lines, which completed its merger with Northwest
Airlines in 2008, said that during the fourth quarter, on a
combined basis, passenger revenue fell 1%, or $54 million,
compared to the prior year period due to a 4% decline in capacity,
partially offset by a 3% increase in unit revenue.  These results
reflect the weakening of the revenue environment during the
quarter caused by the global economic recession.

According to UAL, total passenger revenue for the quarter
decreased 8.7%  year-over- year as consolidated capacity declined
10.6% , consolidated yield increased 2.4%  and load factor
decreased 0.3 points.

Continental Airlines, which have been mentioned in possible merger
talks with other U.S. airlines in 2008, said weakening economic
conditions and highly volatile fuel prices presented financial
challenges for the airline in the fourth quarter 2008. Continental
recorded a fourth quarter net loss of $266 million.

Dave Barger, JetBlue's CEO, said that while he was appointed to
report a loss, he has been satisfied with JetBlue's performance in
2008.  "Against the backdrop of record fuel prices and
unprecedented economic challenges, we effectively managed our
capacity and strengthened our network.  We also made significant
progress in our efforts to further enhance the JetBlue experience
for our customers.  JetBlue's industry-leading unit revenue growth
throughout the year reflects the outstanding work of our
crewmembers.

"2008 was an especially tough and challenging year," said Bob
Fornaro, AirTran Airways' chairman, president and chief executive
officer. "We thank our dedicated, hard-working Crew Members and
our loyal customers for helping us overcome the many obstacles we
faced in 2008. Our Crew Members continue to strive to provide
exceptional customer service, and a high-quality product while
offering value to the traveling public. Despite the industry
challenge shifting from high oil costs to concerns regarding
consumer demand, our 2008 initiatives have us well positioned to
return to profitability in 2009."

                  Liquidity, Bankruptcy Concerns

Delta, UAL and AirTran said that they have strengthened their
liquidity that would allow them to face the challenges of 2009.

Michael Lowry, project manager for AVIATION WEEK's Top-
Performing Companies report, said in September 2008 that
USAirways, AMR, Northwest Airlines, AirTran and Continental would
have high bankruptcy risk in 2009.

The September report also said that USAir was a high risk to file
for bankruptcy again in 2008 -- it had entered and exited
bankruptcy protection twice -- but USAir has been able, so far, to
survive the crisis.  Only smaller airlines filed for bankruptcy in
2008.  These included Frontier Airlines, Skybus Airlines Inc.,
Aloha Airgroup Inc. and ATA Airlines Inc., who made its second
Chapter 11 filing.

Northwest Airlines has completed its merger with Delta Air to
form one of the world's largest airlines.  Delta noted that as of
Dec. 31, 2008, it had $6.1 billion in total liquidity and cash
collateral posted with hedge counterparties.  As of Dec. 31, 2007,
Delta had $3.3 billion in cash, cash equivalents and short-term
investments.

UAL said it completed several transactions during the fourth
quarter that helped strengthen its liquidity.  It raised
$215 million from aircraft financing transactions that closed
during the quarter along with $66 million in proceeds from asset
sales. The company also received net proceeds of $107 million
through equity issuances during the quarter.

AirTran noted that it ended the fourth quarter with $340.5 million
in unrestricted cash and investments, its highest year-end balance
since 2005.

                           2009 Outlook

Most of the airlines expect weak revenues in 2008, but expect
those revenues to be offset by lower fuel prices and savings from
cost cutting measures.  Some of the airlines have also disclosed
capacity cuts for 2009.

AMR has decided not to use MD-80s to backfill flying associated
with the seven 737s that no longer will be delivered in 2009.
Largely as a result of this decision, the company's 2009 mainline
capacity will decline by more than one percentage point compared
to previous guidance provided in October.

"Our fourth quarter and full-year 2008 results reflect the
difficulties all airlines faced last year, but we believe our
steps to reduce capacity, bolster liquidity, and improve revenue
helped us better manage the challenges of record fuel prices and a
weak economy," said AMR Chairman and CEO Gerard Arpey.

"While significant hurdles remain, I am guardedly optimistic we
can regain momentum in 2009," Mr. Arpey said.

"Despite the difficult economic environment, we expect to be
solidly profitable in 2009 driven by lower fuel costs, capacity
discipline, and merger synergies," said Richard Anderson, Delta's
chief executive officer.  "Delta people have a great track record
for achieving their goals, and I am confident that 2009 will be
another successful year."

"Delta's proactive decision to reduce domestic capacity during
2008 mitigated the impact of the decline in demand we saw over the
course of the fourth quarter. We expect the worldwide economy to
be difficult throughout 2009; however, if fuel prices remain at
current levels, we believe the benefit of lower fuel prices will
more than offset the revenue decline." said Edward Bastian,
Delta's president.  "Delta has the tools required to manage
through these tough economic times -- with the broadest, most
diverse network in the industry; an estimated $2 billion in annual
merger synergies to be obtained; best-in-class costs; a solid
liquidity balance; unmatched fleet flexibility; and the discipline
and drive of the new Delta team."

Delta projects that consolidated passenger revenue in 2009 will be
down 4% to $4.8 billion.  Fuel price will be $2.15 per gallon.
During the December 2008 quarter, Delta hedged 58% of its fuel
consumption, resulting in an average fuel price of $2.90 per
gallon -- included in the fuel price is $507 million in fuel hedge
losses in the fourth quarter.  In 2007, when Delta paid $2.21 a
gallon, it noted that its operating results were significantly
impacted by changes in the price and availability of aircraft
fuel. In 2007, its average fuel price per gallon rose 5% to $2.21,
as compared to an average price of $2.10 in 2006, which was 15%
higher than our average price of $1.79 in 2005.

UAL believes that for full year 2009 revenues will be down 8%
to 7%.  United said it is on track to complete the previously
announced removal of 100 aircraft from its fleet by the end of
2009.   United added it is taking additional steps in 2009 to
reduce overhead costs.  The company will further reduce the number
of salaried and management employees by approximately 1,000
positions by the end of 2009. This is in addition to the 1,500
positions the company announced in the second quarter, and when
completed, will bring the total reduction in its salaried and
management staff to approximately 2,500, or nearly 30% , since the
beginning of 2008.

"Last year was by any measure a challenging year -- defined by
unprecedented volatility and unpredictability, but for United it
was also characterized by steady and durable improvements," said
Glenn Tilton, United's chairman, president and CEO. "Our
management team made timely decisions that resulted in fundamental
improvements across our business, which will hold us in good stead
in 2009."

Alaska Air Group, which operates Alaska Air and Horizon Air, noted
that excluding special items, it had net income of $16.4 million
in the 4th quarter of 2008 compared to a $17.9 million net loss in
the same period in 2007.  "In a year of unprecedented volatility
that included soaring fuel prices and an economic meltdown, we
were pleased to eke out a small profit for 2008, excluding special
items, and be one of only a few major airlines to do so," said
Bill Ayer, Alaska Air Group's chairman and chief executive
officer.  "Our concerted efforts to control costs, improve our
operation and tailor our schedule to better match customer demand
have prepared us to face whatever hurdles the current year
brings."

According to Mr. Parker, USAir CEO, measures executed by the
airlines before aimed at offsetting high fuel prices in 2008 have
significantly softened the blow from the economic downturn that
the airline industry now faces.  "As we begin the new year, US
Airways is well prepared for a difficult global macroeconomic
environment.  We are running a great operation, have restructured
our business model through the introduction of new fees, reduced
capacity and increased our liquidity. With the help of falling
fuel prices, we believe we are well positioned for the challenges
ahead," concluded Parker.

Larry Kellner, Continental's chairman and chief executive officer,
said, "While there are continuing hard times ahead, thanks to our
team, we are well-positioned to maintain our place as an industry
leader."  Continental said it will inaugurate daily nonstop
service between New York and Shanghai in March 2009.

For the full year 2009, JetBlue expects to report an operating
margin between 12 and 14% .  Capacity, according to JetBlue, for
the full year 2009 is expected to decrease between zero and 2%
over 2008 and stage length is expected to decrease about 6% over
full year 2008.

             Full Year 2008 Net Profit for Southwest

The usually profitable Southwest Airlines also posted a fourth
quarter loss -- $56,000,000 net loss.  However, Southwest noted
that excluding special charges and other items, its fourth quarter
2008 net income was $61 million, bringing it to its 71st
consecutive quarter of profitability.

Gary C. Kelly, CEO of Southwest, stated: "We are very proud to
report another profitable year in one of the most difficult years
in aviation's 100-year-plus history.  We certainly had our
challenges in 2008, but thanks to the extraordinary efforts and
Warrior Spirit of our People, we persevered to report our 36th
consecutive year of profitability."

"We celebrated many operational successes throughout 2008 and
enhanced our already exceptional Brand and Customer Experience.
With one full year of our new boarding system and Business Select
product offering, the Customer response has been overwhelmingly
favorable. We've made significant advancements in our revenue
management and network optimization capabilities.  And, we've made
great progress on the technology side to lay the foundation for
improved Customer Service, a new southwest.com, a new Rapid
Rewards program, and international codeshare agreements with
WestJet to Canada and Volaris to Mexico.

"Despite the difficult credit markets, we were able to boost our
liquidity by $1.1 billion during fourth quarter 2008 through
several financing transactions to end the year with $1.8 billion
in unrestricted cash and short-term investments. After yearend, we
raised an additional $173 million in cash upon the closing of the
second tranche of our sale and leaseback transaction for an
additional five of our 737-700 aircraft.

"Due to the rapid collapse in energy prices during fourth quarter
2008, we substantially reduced our net fuel hedge position to
approximately ten percent of our estimated fuel gallons in each
year from 2009 through 2013.  Based on this current 2009 portfolio
and future market prices for energy (as of January 20, 2009), we
estimate our economic fuel costs per gallon, including fuel taxes,
to be approximately $1.80 and under $1.90, for first quarter and
full year 2009, respectively.  This current full year 2009
projection is more than $1 billion lower than we were projecting
last summer for 2009.

                       About AirTran Airways

AirTran Airways, a subsidiary of AirTran Holdings, Inc. (NYSE:
AAI), a Fortune 1000 company, is ranked number one in the 2008
Airline Quality Rating study. The airline offers coast-to-coast
flights, North America's newest all-Boeing fleet, friendly service
and Business Class and complimentary XM Satellite Radio on every
flight. To book a flight, visit http://www.airtran.com.

                           *     *     *

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

                      About Delta Air Lines

With its acquisition of Northwest Airlines, Atlanta, Georgia-based
Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or
http://www.nwa.com/-- is now the world's largest airline.  From
its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St.
Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its
Northwest subsidiary and Delta Connection carriers offer service
to more than 376 destinations worldwide in 66 countries and serves
more than 170 million passengers each year.  Delta's marketing
alliances allow customers to earn and redeem either SkyMiles or
WorldPerks on more than 16,000 daily flights offered by SkyTeam
and other partners.

The merger closed on October 29, 2008.

Prior to the merger, Delta was the world's second-largest airline
in terms of passengers carried and Northwest was the world's
fourth largest airline.

Northwest and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R.
Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at
Cadwalader, Wickersham & Taft LLP in Washington, represented the
Northwest Debtors in their restructuring efforts. The Official
Committee of Unsecured Creditors retained Scott L. Hazan, Esq., at
Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy
counsel.  When the Northwest Debtors filed for bankruptcy, they
listed $14.4 billion in total assets and
$17.9 billion in total debts.  On May 21, 2007, the Court
confirmed the Northwest Debtors' amended plan.  That amended plan
took effect May 31, 2007.  (Northwest Airlines Bankruptcy News
Issue No. 114; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).

Delta and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall
S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta
Debtors in their restructuring efforts.  Timothy R. Coleman at The
Blackstone Group L.P. provided the Delta Debtors with financial
advice.  Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provided the Official
Committee of Unsecured Creditors with legal advice. John McKenna,
Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman
at Mesirow Financial Consulting, LLC, served as the Committee's
financial advisors.  On April 25, 2007, the Court confirmed the
Delta Debtors' plan.  That plan became effective on April 30,
2007.  The Court entered a final decree closing 17 cases on Sept.
26, 2007.  (Delta Air Lines Bankruptcy News; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).

                     About United Airlines

United Airlines (NASDAQ: UAUA) operates more than 3,000* flights a
day on United and United Express to more than 200 U.S. domestic
and international destinations from its hubs in Los Angeles, San
Francisco, Denver, Chicago and Washington, D.C. With key global
air rights in the Asia-Pacific region, Europe and Latin America,
United is one of the largest international carriers based in the
United States. United also is a founding member of Star Alliance,
which provides connections for our customers to 912 destinations
in 159 countries worldwide. United's 49,500 employees reside in
every U.S. state and in many countries around the world. News
releases and other information about United can be found at the
company's Web site at united.com.

                            *    *    *

As reported in the Troubled Company Reporter on July 29, 2008,
Standard & Poor's Ratings Services lowered its ratings on UAL
Corp. and subsidiary United Air Lines Inc. (both rated B-
/Negative/--), including lowering the long-term corporate credit
ratings on both entities to 'B-' from 'B', and removed the ratings
from CreditWatch, where they had been placed with negative
implications May 22, 2008, as part of an industrywide review.  The
outlook is negative.

                         About US Airways

US Airways, along with US Airways Shuttle and US Airways Express,
operates more than 3,100 flights per day and serves 200
communities in the U.S., Canada, Europe, the Caribbean and Latin
America. The airline employs nearly 34,000 aviation professionals
worldwide and is a member of the Star Alliance network, which
offers our customers more than 16,500 daily flights to 912
destinations in 159 countries worldwide. Travel + Leisure Magazine
named US Airways as one of the top-three airlines for 2008 in on-
time performance for the year (based on Department of
Transportation data for Sept. 1, 2007 through Aug. 31, 2008). And
for the tenth consecutive year, the airline received a Diamond
Award for maintenance training excellence from the Federal
Aviation Administration (FAA) for its Charlotte, North Carolina
hub line maintenance facility. For more company information, visit
usairways.com. (LCCF)

                          About JetBlue

New York-based JetBlue Airways has created a new airline category
based on value, service and style. Known for its award-winning
service and free TV as much as its low fares, JetBlue is now
pleased to offer customers Lots of Legroom and super-spacious Even
More Legroom seats. JetBlue introduced complimentary in-flight e-
mail and instant messaging services on aircraft "BetaBlue," a
first among U.S. domestic airlines. JetBlue is also America's
first and only airline to offer its own Customer Bill of Rights,
with meaningful and specific compensation for customers
inconvenienced by service disruptions within JetBlue's control.
Visit www.jetblue.com/promise for details. JetBlue serves 52
cities with 600 daily flights. New service to San Jose, Costa
Rica, begins in 2009. With JetBlue, all seats are assigned, all
travel is ticketless, all fares are one-way, and an overnight stay
is never required. For information or reservations call 1-800-
JETBLUE (1-800-538-2583) or visit www.jetblue.com.

                    About Continental Airlines

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

                          *     *     *

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

Continental Airlines, Inc. reported a working capital deficit of
US$202 million, with current assets of US$4.713 billion and
current liabilities of US$4.915 billion.

At Dec. 31, 2007, the Company had a positive working capital of
US$112 million, with US$4.561 billion in current assets and
US$4.449 billion in current liabilities.

As of Sept. 30, 2008, the Company had US$2.9 billion in
unrestricted cash, cash equivalents and short-term investments,
which is US$83 million higher than at Dec. 31, 2007. At Sept. 30,
2008, the Company also had US$164 million of restricted cash, cash
equivalents and short-term investments, which is primarily
collateral for estimated future workers' compensation claims,
credit card processing contracts, letters of credit and
performance bonds. Restricted cash, cash equivalents and short-
term investments at Dec. 31, 2007, totaled US$179 million.
Additionally, the Company held student loan-related auction
rate securities reported as long-term investments at Sept. 30,
2008 with a par value of US$147 million and a fair value of
US$130 million.


CORD BLOOD: Independence Blue Cross Discloses 4.86% Equity Stake
----------------------------------------------------------------
Independence Blue Cross disclosed in a regulatory filing dated
January 26, 2009, that it may be deemed to beneficially own
14,685,366 shares of Cord Blood America, Inc.'s common stock or
4.86% of the total shares outstanding.

Headquartered in West Hollywood, Calif., Cord Blood America Inc.
(OTC BB: CBAI) -- http://www.cordblood-america.com/-- is an
umbilical cord blood stem cell preservation company with a
particular focus on the acquisition of customers in need of family
based products and services.  The company also provides
television, radio and internet advertising services to businesses
that sell family based products and services.

The company operates two core businesses:

  -- Cord Partners Inc., CorCell Co. Inc., CorCell Ltd. ("Cord")
     operates the umbilical cord blood stem cell preservation
     operations, and

  -- Career Channel Inc. dba. Rainmakers International ("Rain")
     operates the television and radio advertising operations.

As of September 30, 2008, the company's balance sheet showed total
assets $5,492,547 and total current liabilities of $12, 815,847,
resulting in total stockholders' deficit of $7,323,300.

CBAI has experienced recurring net losses from operations, which
losses have caused an accumulated deficit of approximately
$23.4 million as of September 30, 2008.  In addition, CBAI has a
working capital deficit of approximately $12.7 million as of
September 30, 2008.  These factors, among others, raise
substantial doubt about CBAI's ability to continue as a going
concern.


CUPERTINO SQUARE: To Seek Plan Confirmation on March 31
-------------------------------------------------------
Cupertino Square LLC will go to the U.S. Bankruptcy Court for
the Northern District California on March 31, 2009, to seek
confirmation of its Chapter 11 plan.

According to Bloomberg's Bill Rochelle, the Plan provides up to
25% recovery for creditors holding unsecured claims aggregating
$5.2 million.

Lenders have signed a deal to acquire Cupertino Square, and will
partly release $130 million of their secured claims as part of
their bid.  The company, however, is still entertaining competing
bids, and will hold an auction by March 6 if qualified bids are
received.

                      About Cupertino Square

Headquartered in Cupertino, California, Cupertino Square LLC
operates shopping centers.  The company and its affiliate, Vallco
International Shopping Center LLC, filed for Chapter 11 protection
on Sept. 2, 2008 (Bankr. N.D. Calif. Lead Case No.08-54897).
Richard A. Lapping, Esq., at Thelen LLP, represents the Debtors in
their restructuring efforts.  The U.S. Trustee for Region 17
appointed creditor to serve on an Official Committee of Unsecured
Creditors.  Marianne Dickson, Esq., and Scott H. McNutt, Esq., at
McNutt Law Group, represent the Committee. When the Debtors filed
for protection from their creditors, they listed assets and debts
between $100 million and $500 million each.


DBSI INC: DBSI Landsowne's Voluntary Chapter 11 Case Summary
------------------------------------------------------------
Debtor: DBSI Inc.
        1550 S. Tech Lane
        Meridian, ID 83642

Bankruptcy Case No.: 08-12687

Debtor-affiliates filing separate Chapter 11 petitions on
Jan. 28, 2008:

        Entity                                     Case No.
        ------                                     --------
DBSI Lansdowne LLP                                 09-10276

Debtor-affiliates filing separate Chapter 11 petitions on
Jan. 26, 2008:

        Entity                                     Case No.
        ------                                     --------
FOR 1031 Brookhollow One LLC                       09-10262
DBSI Brookhollow One LLC                           09-10263
DBSI Lone Peak Parkway LLC                         09-10264

Debtor-affiliates filing separate Chapter 11 petitions on Jan. 9,
2008:

        Entity                                     Case No.
        ------                                     --------
FOR 1031 Broadway Plaza LLC                        09-10080
Florissant Market Place Acquisition LLC            09-10081

Debtor-affiliates filing separate Chapter 11 petitions on Jan. 7,
2008:

        Entity                                     Case No.
        ------                                     --------
Belton Town Center Acquisition LLC                 09-10034
DBSI Broadway Plaza LeaseCo LLC                    09-10035
DBSI Collins Offices LLC                           09-10036
DBSI Development Services LLC                      09-10037
DBSI-Renaissance Flowood LLC                       09-10038
DBSI Land Development LLC                          09-10039
DBSI Lexington LLC                                 09-10040
DBSI Meridian 184 LLC                              09-10041
DBSI One Hernando Center North LLC                 09-10042
DBSI Republic LeaseCo LLC                          09-10043
South Cavanaugh LLC                                09-10044
DBSI 121/Alma Land L.P.                            09-10045
DBSI 121/Alma LLC                                  09-10046

Debtor-affiliates filing separate Chapter 11 petitions on
Nov. 10, 2008:

        Entity                                     Case No.
        ------                                     --------
DBSI South 75 Center LeaseCo LLC                   08-12688
DBSI 14001 Weston Parkway LeaseCo LLC              08-12689
DBSI CP Ironwood LeaseCo LLC                       08-12690
DBSI Lake Ellenor LeaseCo LLC                      08-12691
DBSI 12 South Place LeaseCo LLC                    08-12692
DBSI 13000 Weston Parkway LeaseCo LLC              08-12693
DBSI 2001A Funding Corporation                     08-12694
DBSI 2001B Funding Corporation                     08-12695
DBSI 2001C Funding Corporation                     08-12696
DBSI 2005 Secured Notes Corporation                08-12697
DBSI 2006 Secured Notes Corporation                08-12698
DBSI 2008 Notes Corporation                        08-12699
DBSI 2nd Street Quad LeaseCo LLC                   08-12700
DBSI 700 Locust LeaseCo LLC                        08-12701
DBSI Abbotts Bridge LeaseCo LLC                    08-12702
DBSI Allison Pointe LeaseCo LLC                    08-12703
DBSI Amarillo Apartments LeaseCo LLC               08-12704
DBSI Anna Plaza LeaseCo LLC                        08-12705
DBSI Arlington Town Square LeaseCo LLC             08-12706
DBSI Arrowhead LeaseCo LLC                         08-12707
DBSI Avenues North Center LeaseCo LLC              08-12708
DBSI Bandera Trails LeaseCo LLC                    08-12709
DBSI Battlefield Station LeaseCo LLC               08-12710
DBSI Belton Town Center LeaseCo LLC                08-12711
DBSI Breckinridge LeaseCo LLC                      08-12712
DBSI Brendan Way LeaseCo LLC                       08-12713
DBSI Brookfield Pelham LeaseCo LLC                 08-12714
DBSI Cambridge Place LeaseCo LLC                   08-12715
DBSI Carolina Commons LeaseCo LLC                  08-12716
DBSI Cedar East and Cypress LeaseCo LLC            08-12717
DBSI Clear Creek Square LeaseCo LLC                08-12718
DBSI Corporate Woods LeaseCo LLC                   08-12719
DBSI CP Clearwater LeaseCo LLC                     08-12720
DBSI Cranberry LeaseCo LLC                         08-12721
DBSI Cross Pointe LeaseCo LLC                      08-12722
DBSI Crosstown Woods LeaseCo LLC                   08-12723
DBSI Daniel Burnham LeaseCo LLC                    08-12724
DBSI Decatur LeaseCo LLC                           08-12725
DBSI Eagle Landing LeaseCo LLC                     08-12726
DBSI Embassy Tower LeaseCo LLC                     08-12727
DBSI Executive Dr LeaseCo LLC                      08-12728
DBSI Executive Park LeaseCo LLC                    08-12729
DBSI Fairlane Green LeaseCo LLC                    08-12730
DBSI Fairway LeaseCo LLC                           08-12731
DBSI Florissant Market Place LeaseCo LLC           08-12732
DBSI Gadd Crossing LeaseCo LLC                     08-12733
DBSI Ghent Road LeaseCo LLC                        08-12734
DBSI Grant Street Portfolio LeaseCo LLC            08-12735
DBSI Green Street Commons Leaseco LLC              08-12736
DBSI Guaranteed Capital Corporation                08-12737
DBSI Hampton LeaseCo LLC                           08-12738
DBSI Hickory Plaza LeaseCo LLC                     08-12739
DBSI Highlands & Southcreek LeaseCo LLC            08-12740
DBSI Houston Levee Galleria Leaseco LLC            08-12741
DBSI Kemper Pointe LeaseCo LLC                     08-12742
DBSI Kenwood Center LeaseCo LLC                    08-12743
DBSI Keystone Commerce LeaseCo LLC                 08-12744
DBSI Lake Natoma LeaseCo LLC                       08-12745
DBSI Lamar LeaseCo LLC                             08-12746
DBSI Landmark Towers Leaseco LLC                   08-12747
DBSI Lifestyle Center LeaseCo LLC                  08-12748
DBSI Lincoln Park 10 LeaseCo LLC                   08-12749
DBSI Mansell Forest LeaseCo LLC                    08-12750
DBSI Mansell Place LeaseCo LLC                     08-12751
DBSI Master Leaseco, Inc.                          08-12752
DBSI Meadow Chase Apartments LeaseCo LLC           08-12753
DBSI Megan Crossing LeaseCo LLC                    08-12754
DBSI Metropolitan Square LeaseCo LLC               08-12755
DBSI Missouri LeaseCo LLC                          08-12756
DBSI Network LeaseCo LLC                           08-12757
DBSI North Logan Retail Center LeaeCo LLC          08-12758
DBSI North Park LeaseCo LLC                        08-12759
DBSI North Stafford LeaseCo LLC                    08-12760
DBSI Northlite Commons II LeaseCo LLC              08-12761
DBSI Northpark Ridgeland LeaseCo LLC               08-12762
DBSI Northridge LeaseCo LLC                        08-12763
DBSI Oakwood Plaza LeaseCo LLC                     08-12764
DBSI Old National Town Center LeaseCo LLC          08-12765
DBSI One Executive Center LeaseCo LLC              08-12766
DBSI One Hanover LeaseCo LLC                       08-12767
DBSI Park Creek-Gainesville LeaseCo LLC            08-12768
DBSI Parkway III LeaseCo LLC                       08-12769
DBSI Peachtree Corners Pavilion LeaseCo LLC        08-12770
DBSI Phoenix Peak LeaseCo LLC                      08-12771
DBSI Pinehurst Square East LeaseCo LLC             08-12772
DBSI Pinehurst Square West LeaseCo LLC             08-12773
DBSI Plano Tech Center LeaseCo LLC                 08-12774
DBSI Portofino Tech Center LeaseCo LLC             08-12775
DBSI Properties Inc.                               08-12776
DBSI Real Estate Funding Corporation               08-12777
DBSI Realty Inc.                                   08-12778
DBSI Road 68 Retail Center LeaseCo LLC             08-12779
DBSI Sam Houston Tech Center LeaseCo LLC           08-12780
DBSI Sapphire Pointe LeaseCo LLC                   08-12781
DBSI Securities Corporation                        08-12782
DBSI Sherwood Plaza LeaseCo LLC                    08-12783
DBSI Shoppes at Misty Meadows LeaseCo LLC          08-12784
DBSI Shoppes at Trammel LeaseCo LLC                08-12785
DBSI Signature Place LeaseCo LLC                   08-12786
DBSI Silver Lakes Leaseco LLC                      08-12787
DBSI Southport Pavilion LeaseCo LLC                08-12788
DBSI Spalding Triangle LeaseCo LLC                 08-12789
DBSI Spring Valley Road LeaseCo LLC                08-12790
DBSI Springville Corner Leasco LLC                 08-12791
DBSI ST Tower LeaseCo LLC                          08-12792
DBSI St. Andrews Place LeaseCo LLC                 08-12793
DBSI Stone Glen Village LeaseCo LLC                08-12794
DBSI Stony Brook South LeaseCo LLC                 08-12795
DBSI Streetside at Towne Lake LeaseCo LLC          08-12796
DBSI Topsham Fair Mall LeaseCo LLC                 08-12797
DBSI Torrey Chase LeaseCo LLC                      08-12798
DBSI Treasure Valley Business Center LeaseCo LLC   08-12799
DBSI Trinity Ridge Business Center LeaseCo LLC     08-12800
DBSI University Park LeaseCo LLC                   08-12801
DBSI Vantage Drive LeaseCo LLC                     08-12802
DBSI Watkins LeaseCo LLC                           08-12803
DBSI West Oaks Square LeaseCo LLC                  08-12804
DBSI Wilson Estates LeaseCo LLC                    08-12805
DBSI Winchester Office LeaseCo LLC                 08-12806
DBSI Windcom Court LeaseCo LLC                     08-12807
DBSI Wisdom Pointe LeaseCo LLC                     08-12808
DBSI Woodlands Medical Office LeaseCo LLC          08-12809
DBSI Woodside Center LeaseCo LLC                   08-12810
DCJ Inc.                                           08-12811
DBSI Draper LeaseCo LLC                            08-12812
FOR 1031 LLC                                       08-12813
Spectrus Real Estate Inc.                          08-12814
DBSI Academy Park Loop LeaseCo LLC                 08-12815
DBSI Copperfield Timbercreek LeaseCo LLC           08-12816
DBSI Corporate Center II LeaseCo LLC               08-12817
DBSI Executive Plaza LeaseCo LLC                   08-12818
DBSI Northgate LeaseCo LLC                         08-12819
DBSI Two Notch Rd. LeaseCo LLC                     08-12820
DBSI Asset Management LLC                          08-12821
DBSI 2006 Land Opportunity Fund LLC                08-12822
DBSI Shoppes at Trammel LLC                        08-12823
DBSI 2007 Land Improvement & Development Fund LLC  08-12824
DBSI 2008 Land Option Fund LLC                     08-12825
DBSI Alma/121 Office Commons LLC                   08-12826
DBSI Cottonwood Plaza Development LLC              08-12827
DBSI Draper Technology 21 LLC                      08-12828
DBSI Escala LLC                                    08-12829
DBSI Short-Term Development Fund LLC               08-12830
DBSI Telecom Office LLC                            08-12831
DBSI Discovery Real Estate Services LLC            08-12834

Related Information: The Debtors operate a real estate company.

                     See: http://www.dbsi.com

Court: District of Delaware (Delaware)

Judge: Peter J. Walsh

Debtor's Counsel: James L. Patton, Esq.
                  bankfilings@ycst.com
                  Joseph M. Barry, Esq.
                  bankfilings@ycst.com
                  Michael R. Nestor, Esq.
                  bankfilings@ycst.com
                  Young, Conaway, Stargatt & Taylor LLP
                  The Brandywine Bldg.
                  1000 West Street, 17th Floor
                  PO Box 391
                  Wilmington, DE 19899-0391
                  Tel: (302) 571-6684
                       (302) 571-6600
                       (302) 571-1253
                  http://www.ycst.com

Notice Claims and Balloting Agent Claims: Kurztman Carson
                                          Consultants LLC

Estimated Assets: $100 million to $500 million

Estimated Debts: $100 million to $500 million

The Debtor's Largest Unsecured Creditors:

   Entity                      Nature of Claim   Claim Amount
   ------                      ---------------   ------------
Ellen Kwiatkowski-             investment        $26,743,328
Schwinge
402 Kilarney Pass
Mundeleim, IL 60060

Michael Kanoff                 investment        $18,696,689
3500 Flamingo Drive
Miami Beach, Fl 33140

Harold Rubin                   investment        $17,854,893
100 North Street
Teterboro, NJ 07608

Bill Ramsey                    investment        $15,500,000
PO Box 690
Salinas, CA 93902

Frederick Nicholas             investment        $14,250,863
3844 Culver Center Street
Suite B
Culver City, CA 90232

Peter Evans                    investment        $7,317,633
17046 Marina Bay Drive
Huntington Beach, CA 92649

Jeffrey Johnston               investment        $7,200,000
1751 Wst. Citracado Pkwy.
Clubhouse
Escondido, CA 92029

Yim Chow                       investment        $7,200,000
702 Los Pinos Avenue
Milpitas, CA 95035

Phyllis Chu                    investment        $6,191,068
3020 Gough Street
San Francisco, CA 94123

Elizabeth Noonan               investment        $5,395,000
316 Chapin Lane
Burlingame, CA 94010

John Roeder                    investment        $5,375,848
PO Box 23490
San Jose, CA 95153

Jim Nicholas                   investment        $5,325,000
385 Hilcrest Road
Englewood, NJ 07632

Robert Markstein               investment        $5,220,000
696 San Ramon Valley
Boulevard, #347
Danville, CA 94526

Robert Angelo                  investment        $4,542,500
33316 S.E. 34th Street
Washougal, WA 98671

Henry Vara                     investment        $4,509,982
16960 Bohlman Road
Saratoga, CA 95070

Alan Destefani                 investment        $4,500,000
PO Box 20968
Bakersfield, CA 93390

Kevin Pascoe                   investment        $4,476,000
9400 Etchart Road
Bakersfield, CA 93314

Martha Walker                  investment        $4,324,349
863 S. Bates Street
Birmingham, AL 48009

Tina Bernard                   investment        $4,277,596
19336 Collier Street
Tarzana, CA 91356

Paul Wendland                  investment        $4,208,999
1034 N. Datepalm Drive
Gilbert, AZ 85234

William Marvel                 investment        $3,579,289
492 Escondido Circle
Grand Junction, CO 81503

James Fritts                   investment        $3,424,900
309 W. Washington Street
Charlestown, WV 25414

Joan Kresse                    investment        $3,410,909
5100 Figueroa Mountain Road
Los Olivios, CA 93441

John Baklayan                  investment        $3,400,000
16105 Whitecap Land
Huntington Beach, CA 92649

Robert Rifkin                  investment        $3,360,000
697 Red Arrow Trail
Palm Desert, CA 92211

Gerard Keller                  investment        $3,200,783
12-161 Saint Andrews Drive
Ranco Mirage, CA 92270

Kristi Wells                   investment        $3,120,000
2860 Old Quarry Road
West Point, IA 92656

Michael Cooper                 investment        $3,000,000
6465 S. 3000 E, Suite
Salt Lake City, UT 84121

Gladys Esponda                 investment        $3,000,000
PO Box 609
Buffalo, NY 82834

Arthur Hossenlopp              investment        $3,000,000
228 18th Street
Ft. Madison, IA 52627

Richard Newman                 investment        $3,000,000
13679 Orchard Gate Road
Poway, CA 92064

Bernard Posner                 investment        $3,000,000
6222 Primrose Avenue
Los Angeles, CA 90068

Kent Schroeder                 investment        $3,000,000
5697 McIntyre Street
Golden, CO 80403

Bernard Ineichen               investment        $2,900,000
650 South Avenue, B122
Yuma, Arizona 85346

Alan Sacks                     investment        $2,900,000
5 Horizon Road, #1407
Fort Lee, NJ 07024

Joseph Stokley                 investment        $2,843,461
PO Box 1231
Bethel Island, CA 94511

JoAnn Picket                   investment        $2,800,000
3769 E. 125th Drive
Thornton, CO 80241

Bill Hall                      investment       $2,740,593
PO Box 16172
Lubbock, TX 79490

Max Buchmann                   investment       $2,716,186
14464 Rand Rail Drive
El Cajon, CA 92021

Brian Schuck                   investment       $2,701,027
700 Maldonado
Pensacola Beach, Fl 32561

James Jensen                   investment       $2,616,648
2125 Cypress Point
Discovery Bay, CA 94505

Robert Etzel                   investment       $2,600,000
2623 Avenue H.
Ft. Madison, IA 52627

Theodore Mintz                 investment       $2,554,458
751 Georgia Trail
Lincolnton, NC 28092

Joyce Jongsma                  investment       $2,540,000
2012 E. Burrville
Crete, IL 60417

Kent Wright                    investment       $2,488,694
2115 Marwood Circle
Salt Lake City, UT 84124

James Veugler                  investment       $2,442,397
c/o Georgia Veugler
Material Recovery Corp.
820 E. Terra Cotta Ave.
Unit 116
Crystal Lake, IL 60014

Virgil Gentzler                investment       $2,427,301
2707 Bressi Ranch Way
Carlsbad, CA 92009

Karen Hughes                   investment       $2,417,886
1050 The Old Drive
Pebble Drive, CA 93953

Robert Goldberg                investment       $2,407,915
PO Box 8807
Boise, ID 83707


DELTA AIR: Posts $8.9 Billion Full Year 2008 Loss
-------------------------------------------------
Eight of the nine major U.S. airlines that have disclosed fourth
quarter and full year 2008 results have posted losses aggregating
$19.6 billion.  Only Southwest Airlines posted a net profit.

                                Net Profit         Net Profit
                             Full Year 2008      Full Year 2007
                             --------------      --------------
Delta Air Lines, Inc.       ($8,900,000,000)     $1,600,000,000
AMR Corp.                    (2,100,000,000)        504,000,000
Southwest Air Lines             178,000,000         645,000,000
UAL Corp.                    (5,348,000,000)        403,000,000
US Airways Group Inc.        (2,210,000,000)        427,000,000
Continental Airlines  Inc.     (585,000,000)        459,000,000
Alaska Air Group Inc.          (135,900,000)        124,300,000
Skywest Inc.                         --                  --
JetBlue Airways Corp.           (76,000,000)         41,000,000
AirTran Holdings, Inc.         (273,829,000)         52,683,000

Skywest is expected to release its fourth quarter 2008 results on
February 11.  The figures provided by JetBlue were pre-tax profit
(or losses).

                                Net Profit         Net Profit
                            4th Quarter '08     4th Quarter '07
                            ---------------     ---------------
Delta Air Lines, Inc.       ($1,400,000,000)       ($70,000,000)
AMR Corp.                      (340,000,000)        (69,000,000)
UAL Corp.                    (1,303,000,000)        (53,000,000)
Southwest Airlines              (56,000,000)        111,000,000
US Airways                     (541,000,000)        (79,000,000)
Continental Airlines           (266,000,000)        (32,000,000)
Alaska Air Group Inc.           (75,200,000)         (7,400,000)
Skywest Inc.                         --                  --
Jetblue Airways Corp.           (49,000,000)         (3,000,000)
AirTran Holdings, Inc.         (118,391,000)         (2,171,000)

                       High Fuel Jet Prices

The airlines said high fuel prices for most of 2008 have
contributed to their losses.

AMR, the parent of American Airlines, said that historically high
and volatile jet fuel prices continued to challenge it in the
fourth quarter of 2008.  AMR paid $133 million and $2.7 billion
more for fuel in the fourth quarter and for all of 2008,
respectively, than it would have paid at prevailing prices from
the corresponding prior-year periods.

Delta faced over $2 billion in increased fuel costs in 2008.
While fuel prices dropped in the fourth quarter 2008, Delta paid
for high fuel prices due to its fuel hedging contracts.  Delta
would have reported a $167 million net profit excluding special
items in the December 2008 quarter, if fuel had been purchased at
market prices.

UAL said the historic peak in prices and the impact on hedges
driven by the rapid decline resulted in a $2.9 billion increase in
cost compared to 2007 fuel prices.  UAL recorded $370 million in
cash losses on fuel hedges that settled in the quarter, as the
recent fall in fuel prices drove losses on hedges put in place
earlier in the year to mitigate the steep increase in prices that
had occurred in the second and third quarters of 2008. In
addition, the company also recorded non-cash, net mark-to-market
losses on its fuel hedges of $566 million.

US Airways Group Chairman and CEO Doug Parker stated, "Like other
airlines that have reported before us, our financial results
reflect the staggering increase in fuel prices that we faced
throughout most of 2008.  In fact, had our 2008 fuel price
including realized gains and losses on fuel hedging instruments
remained at 2007 levels, the company's fuel expense would have
been approximately $1.4 billion lower.

                  Lower Revenues Due to Recession

Delta Air Lines, which completed its merger with Northwest
Airlines in 2008, said that during the fourth quarter, on a
combined basis, passenger revenue fell 1%, or $54 million,
compared to the prior year period due to a 4% decline in capacity,
partially offset by a 3% increase in unit revenue.  These results
reflect the weakening of the revenue environment during the
quarter caused by the global economic recession.

According to UAL, total passenger revenue for the quarter
decreased 8.7%  year-over- year as consolidated capacity declined
10.6% , consolidated yield increased 2.4%  and load factor
decreased 0.3 points.

Continental Airlines, which have been mentioned in possible merger
talks with other U.S. airlines in 2008, said weakening economic
conditions and highly volatile fuel prices presented financial
challenges for the airline in the fourth quarter 2008. Continental
recorded a fourth quarter net loss of $266 million.

Dave Barger, JetBlue's CEO, said that while he was appointed to
report a loss, he has been satisfied with JetBlue's performance in
2008.  "Against the backdrop of record fuel prices and
unprecedented economic challenges, we effectively managed our
capacity and strengthened our network.  We also made significant
progress in our efforts to further enhance the JetBlue experience
for our customers.  JetBlue's industry-leading unit revenue growth
throughout the year reflects the outstanding work of our
crewmembers.

"2008 was an especially tough and challenging year," said Bob
Fornaro, AirTran Airways' chairman, president and chief executive
officer. "We thank our dedicated, hard-working Crew Members and
our loyal customers for helping us overcome the many obstacles we
faced in 2008. Our Crew Members continue to strive to provide
exceptional customer service, and a high-quality product while
offering value to the traveling public. Despite the industry
challenge shifting from high oil costs to concerns regarding
consumer demand, our 2008 initiatives have us well positioned to
return to profitability in 2009."

                  Liquidity, Bankruptcy Concerns

Delta, UAL and AirTran said that they have strengthened their
liquidity that would allow them to face the challenges of 2009.

Michael Lowry, project manager for AVIATION WEEK's Top-
Performing Companies report, said in September 2008 that
USAirways, AMR, Northwest Airlines, AirTran and Continental would
have high bankruptcy risk in 2009.

The September report also said that USAir was a high risk to file
for bankruptcy again in 2008 -- it had entered and exited
bankruptcy protection twice -- but USAir has been able, so far, to
survive the crisis.  Only smaller airlines filed for bankruptcy in
2008.  These included Frontier Airlines, Skybus Airlines Inc.,
Aloha Airgroup Inc. and ATA Airlines Inc., who made its second
Chapter 11 filing.

Northwest Airlines has completed its merger with Delta Air to
form one of the world's largest airlines.  Delta noted that as of
Dec. 31, 2008, it had $6.1 billion in total liquidity and cash
collateral posted with hedge counterparties.  As of Dec. 31, 2007,
Delta had $3.3 billion in cash, cash equivalents and short-term
investments.

UAL said it completed several transactions during the fourth
quarter that helped strengthen its liquidity.  It raised
$215 million from aircraft financing transactions that closed
during the quarter along with $66 million in proceeds from asset
sales. The company also received net proceeds of $107 million
through equity issuances during the quarter.

AirTran noted that it ended the fourth quarter with $340.5 million
in unrestricted cash and investments, its highest year-end balance
since 2005.

                           2009 Outlook

Most of the airlines expect weak revenues in 2008, but expect
those revenues to be offset by lower fuel prices and savings from
cost cutting measures.  Some of the airlines have also disclosed
capacity cuts for 2009.

AMR has decided not to use MD-80s to backfill flying associated
with the seven 737s that no longer will be delivered in 2009.
Largely as a result of this decision, the company's 2009 mainline
capacity will decline by more than one percentage point compared
to previous guidance provided in October.

"Our fourth quarter and full-year 2008 results reflect the
difficulties all airlines faced last year, but we believe our
steps to reduce capacity, bolster liquidity, and improve revenue
helped us better manage the challenges of record fuel prices and a
weak economy," said AMR Chairman and CEO Gerard Arpey.

"While significant hurdles remain, I am guardedly optimistic we
can regain momentum in 2009," Mr. Arpey said.

"Despite the difficult economic environment, we expect to be
solidly profitable in 2009 driven by lower fuel costs, capacity
discipline, and merger synergies," said Richard Anderson, Delta's
chief executive officer.  "Delta people have a great track record
for achieving their goals, and I am confident that 2009 will be
another successful year."

"Delta's proactive decision to reduce domestic capacity during
2008 mitigated the impact of the decline in demand we saw over the
course of the fourth quarter. We expect the worldwide economy to
be difficult throughout 2009; however, if fuel prices remain at
current levels, we believe the benefit of lower fuel prices will
more than offset the revenue decline." said Edward Bastian,
Delta's president.  "Delta has the tools required to manage
through these tough economic times -- with the broadest, most
diverse network in the industry; an estimated $2 billion in annual
merger synergies to be obtained; best-in-class costs; a solid
liquidity balance; unmatched fleet flexibility; and the discipline
and drive of the new Delta team."

Delta projects that consolidated passenger revenue in 2009 will be
down 4% to $4.8 billion.  Fuel price will be $2.15 per gallon.
During the December 2008 quarter, Delta hedged 58% of its fuel
consumption, resulting in an average fuel price of $2.90 per
gallon -- included in the fuel price is $507 million in fuel hedge
losses in the fourth quarter.  In 2007, when Delta paid $2.21 a
gallon, it noted that its operating results were significantly
impacted by changes in the price and availability of aircraft
fuel. In 2007, its average fuel price per gallon rose 5% to $2.21,
as compared to an average price of $2.10 in 2006, which was 15%
higher than our average price of $1.79 in 2005.

UAL believes that for full year 2009 revenues will be down 8%
to 7%.  United said it is on track to complete the previously
announced removal of 100 aircraft from its fleet by the end of
2009.   United added it is taking additional steps in 2009 to
reduce overhead costs.  The company will further reduce the number
of salaried and management employees by approximately 1,000
positions by the end of 2009. This is in addition to the 1,500
positions the company announced in the second quarter, and when
completed, will bring the total reduction in its salaried and
management staff to approximately 2,500, or nearly 30% , since the
beginning of 2008.

"Last year was by any measure a challenging year -- defined by
unprecedented volatility and unpredictability, but for United it
was also characterized by steady and durable improvements," said
Glenn Tilton, United's chairman, president and CEO. "Our
management team made timely decisions that resulted in fundamental
improvements across our business, which will hold us in good stead
in 2009."

Alaska Air Group, which operates Alaska Air and Horizon Air, noted
that excluding special items, it had net income of $16.4 million
in the 4th quarter of 2008 compared to a $17.9 million net loss in
the same period in 2007.  "In a year of unprecedented volatility
that included soaring fuel prices and an economic meltdown, we
were pleased to eke out a small profit for 2008, excluding special
items, and be one of only a few major airlines to do so," said
Bill Ayer, Alaska Air Group's chairman and chief executive
officer.  "Our concerted efforts to control costs, improve our
operation and tailor our schedule to better match customer demand
have prepared us to face whatever hurdles the current year
brings."

According to Mr. Parker, USAir CEO, measures executed by the
airlines before aimed at offsetting high fuel prices in 2008 have
significantly softened the blow from the economic downturn that
the airline industry now faces.  "As we begin the new year, US
Airways is well prepared for a difficult global macroeconomic
environment.  We are running a great operation, have restructured
our business model through the introduction of new fees, reduced
capacity and increased our liquidity. With the help of falling
fuel prices, we believe we are well positioned for the challenges
ahead," concluded Parker.

Larry Kellner, Continental's chairman and chief executive officer,
said, "While there are continuing hard times ahead, thanks to our
team, we are well-positioned to maintain our place as an industry
leader."  Continental said it will inaugurate daily nonstop
service between New York and Shanghai in March 2009.

For the full year 2009, JetBlue expects to report an operating
margin between 12 and 14% .  Capacity, according to JetBlue, for
the full year 2009 is expected to decrease between zero and 2%
over 2008 and stage length is expected to decrease about 6% over
full year 2008.

             Full Year 2008 Net Profit for Southwest

The usually profitable Southwest Airlines also posted a fourth
quarter loss -- $56,000,000 net loss.  However, Southwest noted
that excluding special charges and other items, its fourth quarter
2008 net income was $61 million, bringing it to its 71st
consecutive quarter of profitability.

Gary C. Kelly, CEO of Southwest, stated: "We are very proud to
report another profitable year in one of the most difficult years
in aviation's 100-year-plus history.  We certainly had our
challenges in 2008, but thanks to the extraordinary efforts and
Warrior Spirit of our People, we persevered to report our 36th
consecutive year of profitability."

"We celebrated many operational successes throughout 2008 and
enhanced our already exceptional Brand and Customer Experience.
With one full year of our new boarding system and Business Select
product offering, the Customer response has been overwhelmingly
favorable. We've made significant advancements in our revenue
management and network optimization capabilities.  And, we've made
great progress on the technology side to lay the foundation for
improved Customer Service, a new southwest.com, a new Rapid
Rewards program, and international codeshare agreements with
WestJet to Canada and Volaris to Mexico.

"Despite the difficult credit markets, we were able to boost our
liquidity by $1.1 billion during fourth quarter 2008 through
several financing transactions to end the year with $1.8 billion
in unrestricted cash and short-term investments. After yearend, we
raised an additional $173 million in cash upon the closing of the
second tranche of our sale and leaseback transaction for an
additional five of our 737-700 aircraft.

"Due to the rapid collapse in energy prices during fourth quarter
2008, we substantially reduced our net fuel hedge position to
approximately ten percent of our estimated fuel gallons in each
year from 2009 through 2013.  Based on this current 2009 portfolio
and future market prices for energy (as of January 20, 2009), we
estimate our economic fuel costs per gallon, including fuel taxes,
to be approximately $1.80 and under $1.90, for first quarter and
full year 2009, respectively.  This current full year 2009
projection is more than $1 billion lower than we were projecting
last summer for 2009.

                       About AirTran Airways

AirTran Airways, a subsidiary of AirTran Holdings, Inc. (NYSE:
AAI), a Fortune 1000 company, is ranked number one in the 2008
Airline Quality Rating study. The airline offers coast-to-coast
flights, North America's newest all-Boeing fleet, friendly service
and Business Class and complimentary XM Satellite Radio on every
flight. To book a flight, visit http://www.airtran.com.

                           *     *     *

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

                      About Delta Air Lines

With its acquisition of Northwest Airlines, Atlanta, Georgia-based
Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or
http://www.nwa.com/-- is now the world's largest airline.  From
its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St.
Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its
Northwest subsidiary and Delta Connection carriers offer service
to more than 376 destinations worldwide in 66 countries and serves
more than 170 million passengers each year.  Delta's marketing
alliances allow customers to earn and redeem either SkyMiles or
WorldPerks on more than 16,000 daily flights offered by SkyTeam
and other partners.

The merger closed on October 29, 2008.

Prior to the merger, Delta was the world's second-largest airline
in terms of passengers carried and Northwest was the world's
fourth largest airline.

Northwest and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R.
Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at
Cadwalader, Wickersham & Taft LLP in Washington, represented the
Northwest Debtors in their restructuring efforts. The Official
Committee of Unsecured Creditors retained Scott L. Hazan, Esq., at
Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy
counsel.  When the Northwest Debtors filed for bankruptcy, they
listed $14.4 billion in total assets and
$17.9 billion in total debts.  On May 21, 2007, the Court
confirmed the Northwest Debtors' amended plan.  That amended plan
took effect May 31, 2007.  (Northwest Airlines Bankruptcy News
Issue No. 114; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).

Delta and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall
S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta
Debtors in their restructuring efforts.  Timothy R. Coleman at The
Blackstone Group L.P. provided the Delta Debtors with financial
advice.  Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provided the Official
Committee of Unsecured Creditors with legal advice. John McKenna,
Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman
at Mesirow Financial Consulting, LLC, served as the Committee's
financial advisors.  On April 25, 2007, the Court confirmed the
Delta Debtors' plan.  That plan became effective on April 30,
2007.  The Court entered a final decree closing 17 cases on Sept.
26, 2007.  (Delta Air Lines Bankruptcy News; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).

                     About United Airlines

United Airlines (NASDAQ: UAUA) operates more than 3,000* flights a
day on United and United Express to more than 200 U.S. domestic
and international destinations from its hubs in Los Angeles, San
Francisco, Denver, Chicago and Washington, D.C. With key global
air rights in the Asia-Pacific region, Europe and Latin America,
United is one of the largest international carriers based in the
United States. United also is a founding member of Star Alliance,
which provides connections for our customers to 912 destinations
in 159 countries worldwide. United's 49,500 employees reside in
every U.S. state and in many countries around the world. News
releases and other information about United can be found at the
company's Web site at united.com.

                            *    *    *

As reported in the Troubled Company Reporter on July 29, 2008,
Standard & Poor's Ratings Services lowered its ratings on UAL
Corp. and subsidiary United Air Lines Inc. (both rated B-
/Negative/--), including lowering the long-term corporate credit
ratings on both entities to 'B-' from 'B', and removed the ratings
from CreditWatch, where they had been placed with negative
implications May 22, 2008, as part of an industrywide review.  The
outlook is negative.

                         About US Airways

US Airways, along with US Airways Shuttle and US Airways Express,
operates more than 3,100 flights per day and serves 200
communities in the U.S., Canada, Europe, the Caribbean and Latin
America. The airline employs nearly 34,000 aviation professionals
worldwide and is a member of the Star Alliance network, which
offers our customers more than 16,500 daily flights to 912
destinations in 159 countries worldwide. Travel + Leisure Magazine
named US Airways as one of the top-three airlines for 2008 in on-
time performance for the year (based on Department of
Transportation data for Sept. 1, 2007 through Aug. 31, 2008). And
for the tenth consecutive year, the airline received a Diamond
Award for maintenance training excellence from the Federal
Aviation Administration (FAA) for its Charlotte, North Carolina
hub line maintenance facility. For more company information, visit
usairways.com. (LCCF)

                          About JetBlue

New York-based JetBlue Airways has created a new airline category
based on value, service and style. Known for its award-winning
service and free TV as much as its low fares, JetBlue is now
pleased to offer customers Lots of Legroom and super-spacious Even
More Legroom seats. JetBlue introduced complimentary in-flight e-
mail and instant messaging services on aircraft "BetaBlue," a
first among U.S. domestic airlines. JetBlue is also America's
first and only airline to offer its own Customer Bill of Rights,
with meaningful and specific compensation for customers
inconvenienced by service disruptions within JetBlue's control.
Visit www.jetblue.com/promise for details. JetBlue serves 52
cities with 600 daily flights. New service to San Jose, Costa
Rica, begins in 2009. With JetBlue, all seats are assigned, all
travel is ticketless, all fares are one-way, and an overnight stay
is never required. For information or reservations call 1-800-
JETBLUE (1-800-538-2583) or visit www.jetblue.com.

                    About Continental Airlines

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

                          *     *     *

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

Continental Airlines, Inc. reported a working capital deficit of
US$202 million, with current assets of US$4.713 billion and
current liabilities of US$4.915 billion.

At Dec. 31, 2007, the Company had a positive working capital of
US$112 million, with US$4.561 billion in current assets and
US$4.449 billion in current liabilities.

As of Sept. 30, 2008, the Company had US$2.9 billion in
unrestricted cash, cash equivalents and short-term investments,
which is US$83 million higher than at Dec. 31, 2007. At Sept. 30,
2008, the Company also had US$164 million of restricted cash, cash
equivalents and short-term investments, which is primarily
collateral for estimated future workers' compensation claims,
credit card processing contracts, letters of credit and
performance bonds. Restricted cash, cash equivalents and short-
term investments at Dec. 31, 2007, totaled US$179 million.
Additionally, the Company held student loan-related auction
rate securities reported as long-term investments at Sept. 30,
2008 with a par value of US$147 million and a fair value of
US$130 million.


DOT VN INC: Names Kenneth Le as Strategic Advisory Board Member
---------------------------------------------------------------
Kenneth Le has joined Dot VN, Inc.'s Strategic Advisory Board.
Mr. Le will assist the company with strategic planning for future
growth and development of key projects.

Mr. Le is president and CEO of Le Investment Group, LLC, and has
been an entrepreneur for over 20 years with experience in a
variety of sectors including real estate development, import-
export, food services, and Internet ventures.  Mr. Le is a co-
founder and vice-president of the Vietnamese American
Entrepreneurs Association.  The VAEA is a non-profit organization
dedicated to promoting business in the Vietnamese community,
developing and promoting trade between the United States and
Southeast Asia and supporting charitable organizations.  Mr. Le
also serves on the board of directors of 3 companies, Texatronics
Corp, My Viet Phu and Saigon Mall Corp.

"Given [Mr. Le's] deep expertise as an entrepreneur and his
understanding of the challenges associated with managing complex
business developments in Vietnam and Southeast Asia, we are
thrilled that he will be an active member of Dot VN's Advisory
board," said Thomas M. Johnson, Dot VN's chairman and chief
executive officer.  "As we work to continually lead the charge in
bringing advanced Internet services and wireless telecommunication
solutions, such as, secure online .VN Domain registrations,
Internet Data Centers, and wireless Virtual Fiber to Vietnam,
Kenneth's extensive background in pragmatic product innovation and
development, well as product commercialization will further assist
Dot VN in meeting these objectives.  We look forward to working
closely with [Mr. Le] and utilizing his 20 plus years of industry
experience to make Dot VN the leader in Internet and
Telecommunications throughout Vietnam and Southeast Asia."

"I am extremely pleased and deeply honored to join Dot VN's
Strategic Advisory Board," stated Mr. Le.  "I look forward to
working closely with Dot VN's management team and will endeavor to
bring my skills, relationships and experience to assist the
company in executing its business strategy to become an industry
leader in Internet and Telecommunications in Vietnam."

                         About Dot VN, Inc.

Dot VN, Inc. (OTC: DTVI.PK) -- http://www.dotvn.com-- offers
Internet services and related online business e-commerce services
in Vietnam and internationally.

At Oct. 31, 2008, the company's balance sheet showed total assets
of $2,268,318 and total liabilities of $10,681,016, resulting in a
shareholders' deficit of $8,412,698.

For three months ended Oct. 31, 2008, the company posted net loss
of $1,589,472 compared with net loss of $4,728,219 for the same
period in the previous year.

For six months ended Oct. 31, 2008, the company posted net loss of
$1,395,573 compared with net loss of $1,657,986.

Overall, the company's liquidity and access to capital is very
limited; it has not received any commitment for additional
financing and given the size of the company, it may be limited to
(i) continued deferral of salaries by its officers, (ii) the sale
of the company's common stock or the issuance of convertible
notes, or (iii) other debt instruments.  The company does not have
a written agreement with Hi-Tek Private and no funds were advanced
during the six months ended Oct. 31 2008.

                        Going Concern Doubt

As reported in the Troubled Company Reporter on Sept. 23, 2008,
Chang G. Park, CPA, from San Diego, California, expressed on
Sept. 10, 2008, substantial doubt about Dot VN Inc.'s ability to
continue as a going concern after auditing the company's condensed
consolidated balance sheet as of July 31, 2008.  The auditing firm
reported that the company experienced losses from operations.

The auditor said the company has had limited revenues due to
the early stage of its efforts to transition into the marketing of
its Internet resources.  Consequently, the company has incurred
recurring losses from operations.  These factors, as well as the
risks associated with raising capital through the issuance of
equity and debt securities creates uncertainty as to the company's
ability to continue as a going concern, the auditor continued.


EAD SANTA NELLA: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: EAD Santa Nella, LLC
        1109 South Santa Fe Avenue,
        Los Angeles, CA 90021

Bankruptcy Case No.: 09-11076

Type of Business: The company is a single asset real estate
debtor.

Chapter 11 Petition Date: January 20, 2009

Court: United States Bankruptcy Court
       Central District Of California (Los Angeles)

Judge: Ellen Carroll

Debtor's Counsel: Alan I. Nahmias, Esq.
                  Mirman & Bubman LLP
                  21860 Burbank Blvd. Ste. 360
                  Woodland Hills, CA 91367
                  Tel: (818) 995-2555
                  Fax: (818) 451-4620
                  Email: anahmias@mirmanbubman.com

Total Assets: $4,273,031

Total Debts: $2,955,941

A full-text copy of the Debtor's petition, including its largest
unsecured creditors, is available for free at:

            http://bankrupt.com/misc/nysb08-15173.pdf

The petition was signed by Abner Pajounia, Manager of the company.


EASTMAN KODAK: To Cut Up to 18% of Workforce; Posts $137MM Loss
---------------------------------------------------------------
Eastman Kodak Company expects to reduce its worldwide employment
by between 3,500 and 4,500 positions during 2009, approximately
14% to 18% of its total workforce.  This includes the reduction of
2,000 to 3,000 positions related to the company's 2009
restructuring program that is being reported today in a Form 8-K
filing with the U.S. Securities and Exchange Commission, as well
as actions that the company took in late 2008 that will be
implemented in 2009.  The 2008 actions were included in the
rationalization charges that the company recorded in the fourth
quarter.

The layoffs are part of Kodak's efforts to strengthen its
operations and become more competitive in the face of the
continuing global economic downturn.  These actions, which the
company has already begun, include more tightly focusing its
portfolio of investments, intensifying its emphasis on cash
generation, and further streamlining its cost structure.

The workforce reductions, which include executive positions, have
commenced and the company expects to implement the majority of the
actions associated with this program in the first half of 2009.
In connection with these restructuring actions, the company
expects to incur charges against earnings in 2009 in the range of
$250 million to $300 million, and make payments from corporate
cash in the range of $225 million to $275 million, including the
impact of carryover actions from 2008.

When combined with rationalization actions the company took in
late 2008 these new 2009 restructuring actions are expected to
generate annual savings in the range of $300 million to
$350 million and better align the company's cost structure with
the new economic environment.

Additionally, the company announced that on a global basis there
will be no salary increases for 2009 except where required by law
or local agreements.

"These are extraordinary times," said Eastman Kodak Antonio M.
Perez, Chairperson and CEO.  "In the face of this economic
environment we are focusing on those things within our control,
and we are taking aggressive yet prudent action to ensure that
Kodak remains a strong and enduring competitor.  Some of the
actions we are taking are especially difficult because they impact
our people, whose hard work and continued commitment I appreciate
during these difficult times.  Despite the challenges facing the
economy, we remain optimistic that we will rebuild the momentum we
had following our successful strategic transformation.  Our future
will be driven by our dedicated employees, our powerful brand, and
our unmatched expertise at the intersection of imaging science and
materials science."

The company recognizes the need to continually rationalize its
workforce and streamline its operations to remain competitive in
the face of an ever-changing business and economic climate. In the
fourth quarter of 2008, the Company recorded rationalization
charges, net of reversals, of $103 million.

          $137MM 4th-Quarter Preliminary Net Loss

Eastman Kodak reported preliminary fourth-quarter 2008 results,
which reflect the impact of the global recession, the slowdown in
consumer spending and reduced business investment, as well as
changes in the value of the U.S. dollar.

For the fourth quarter, Kodak reported a preliminary loss from
continuing operations of $133 million, or $0.50 per share and
preliminary Net Loss of $137 million, or $.51 per share.  Fourth-
quarter sales were $2.433 billion, a 24% decline from the year-ago
quarter.  Digital sales for the fourth quarter were
$1.779 billion, a 23% decline from the year-ago quarter, and
traditional revenues were $652 million, a 27% decline from the
year-ago quarter.

For full-year 2008, the company reported preliminary earnings from
continuing operations of $54 million, or $0.19 per share.  Full-
year revenue totaled $9.416 billion, a 9% decline from 2007.
Full-year digital revenue totaled $6.422 billion, a 4% decline
from 2007, and traditional revenue totaled $2.987 billion, an 18%
decline.  The company is currently performing assessments of
goodwill and long-lived assets, consequently 2008 results are
preliminary pending the outcome of those assessments.

"The second half of 2008 will go down in history as one of the
most challenging periods we have seen in decades," said Mr. Perez.
"We built significant momentum following the completion of our
corporate transformation and our business results were on track
through most of 2008, with digital revenue up 10% in the first
half of the year, following double-digit growth in the second-half
of 2007.  However, during the last three months of the year, we
experienced dramatic declines in several of our key businesses due
to the slowdown in consumer spending and significantly reduced
demand for capital equipment. Despite these challenging
conditions, we held or improved our market position in key
businesses, maintained a solid balance sheet, and continued to
invest in innovative, differentiated products.  We are taking the
necessary steps to address this environment and to position Kodak
to recapture the momentum when the recovery occurs."

For the fourth quarter of 2008:

     -- Sales worldwide totaled $2.433 billion, a decrease of 24%
        from $3.220 billion in the fourth quarter of 2007.
        Revenue from digital businesses totaled $1.779 billion, a
        23% decline from $2.325 billion in the prior-year
        quarter.  Revenue from the company's traditional business
        decreased 27% to $652 million as a result of accelerated
        industry-related declines in Film Capture and Traditional
        Photofinishing.

     -- The company's preliminary fourth-quarter loss from
        continuing operations before interest expense, other
        income (charges), net, and  income taxes was
        $120 million, compared with earnings on the same basis
        of $130 million in the year-ago quarter.

On the basis of U.S. generally accepted accounting principles
(GAAP), the company reported a preliminary fourth-quarter loss
from continuing operations of $133 million, or $0.50 per share,
compared with earnings on the same basis of $92 million, or $0.31
per share, in the year-ago period.  Items of net expense that
impacted comparability in the fourth quarter of 2008 totaled $112
million after tax, or $0.42 per share, including restructuring and
rationalization charges of $96 million after tax, or $0.36 per
share, and a legal contingency of $21 million after tax, or $0.08
per share, partially offset by tax and other items totaling $5
million, or $0.02 per share.  Items of net expense that impacted
comparability in the prior-year quarter totaled
$15 million after tax, or $0.05 per share, primarily reflecting
restructuring and impairment costs of $93 million after tax, or
$0.30 per share, net gains on sale of property of $89 million
after tax, or $0.29 per share, and various tax and other items
totaling $11 million, or $0.04 per share.

Other fourth-quarter 2008 details:

     -- Gross Profit margin was 20.5% for the quarter, a decline
        from 24.7% in the year-ago period.  This margin decline
        reflects the impact of  negative price/mix, including
        lower intellectual property royalties,  along with
        unfavorable foreign exchange, partially offset by
        continued cost reductions.

     -- Selling, General and Administrative (SG&A) expenses were
        $403 million in the fourth quarter, down 23%, or
        $122 million, from $525 million in the year-ago quarter.

     -- Cash generation before dividends for the fourth-quarter
        was $472 million compared with $1.204 billion in the
        year-ago quarter.  This corresponds to net cash provided
        by continuing operations from operating activities
        on a GAAP basis of $516 million in the fourth quarter,
        compared with net cash provided of $1.045 billion in the
        fourth quarter of 2007.  Cash performance during the
        fourth quarter of 2008 reflects the change in earnings,
        partially offset by continued  improvements in working
        capital.

     -- Kodak held $2.145 billion in cash and cash equivalents as
        of December 31, 2008.

     -- The company's debt level stood at $1.303 billion as of
        December 31, 2008, a reduction of $294 million as
        compared to the year-end 2007 debt level of
        $1.597 billion.

     -- In the quarter, the company repurchased approximately
        6 million shares of its common stock at a cost of
        $82 million.  While the previously disclosed share
        repurchase authorization remains in effect through the
        end of 2009, Kodak is not currently repurchasing any of
        its shares.  The company will continue to provide updates
        on the program at the end of each quarter.

Segment sales and earnings from continuing operations before
interest, taxes, and other income and charges (segment earnings
from operations), are as follows:

     -- Consumer Digital Imaging Group full-year sales were
        $3.088 billion, a 5% decline from 2007.  Sales for the
        fourth quarter were $958 million, a 30% decrease from
        $1.372 billion in the prior-year quarter.  Fourth-quarter
        loss from operations for the segment was $40 million,
        compared with earnings of $91 million in the year-ago
        quarter.  The fourth-quarter loss was driven primarily by
        lower volume and price/mix impacts, particularly in
        Digital Capture and Devices, including lower intellectual
        property licensing royalties, and unfavorable foreign
        exchange, partially offset by cost improvements.

     -- Graphic Communications Group full-year sales were
        $3.334 billion, a 2% decline from 2007.  Sales for the
        fourth quarter were $821 million, a 14% decrease from
        $953 million in the year-ago quarter.  Fourth-quarter
        loss from operations for the segment totaled $4 million,
        compared with earnings of $30 million in the year-ago
        quarter.  This earnings decline was primarily driven by
        lower volume and price/mix across several product lines,
        along with a negative impact from foreign exchange,
        partially offset by reductions in selling, general and
        administrative cost.

    -- Film, Photofinishing and Entertainment Group full-year
        sales were $2.987 billion, an 18% decline from 2007.
        Fourth-quarter revenue was $652 million, down from
        $894 million in the year-ago quarter, representing a
        decrease of 27%, attributable to reduced sales volume of
        Film Capture and Traditional Photofinishing products and
        services.  Fourth-quarter earnings from operations for
        the segment increased to $39 million from $17 million in
        the year-ago quarter.  These earnings results were driven
        by significant cost reductions, and reflect the impact of
        previously announced changes in post-employment benefits,
        and lower depreciation expense related to the company's
        previously announced change in useful life assumptions.
        These were partially offset by the effects of lower
        consumer film sales volumes, price/mix  across several
        product lines, increased commodity costs, and foreign
        exchange impacts.

Balance Sheet Considerations

The reported company's earnings are preliminary, subject to the
completion of long-lived asset and goodwill impairment testing.
Given uncertainty surrounding the external economic conditions and
volatility of the company's market capitalization, the company is
performing impairment testing as of the end of 2008.  It is likely
that non-cash impairment charges, which could be material, will be
recorded in 2008 based on these analyses, which will be completed
prior to the filing of the company's Form 10-K in late February
2009.

At the end of 2008, the company maintained a substantial cash
balance and was in full compliance with all of the financial
covenants associated with its revolving credit agreement.  The
company maintains this credit arrangement in order to provide
additional financial flexibility and currently has no funds drawn
in connection with this arrangement, other than a modest amount of
outstanding letters of credit issued under the agreement.  In the
current environment, the company continues to experience an
earnings impact as a result of the economic downturn and also
expects its earnings to be seasonal in nature, as is typical.  The
company also expects to incur significant restructuring charges in
the first half of 2009.  The combination of these factors has an
impact on the metrics used to determine financial covenant
compliance.  For this reason, management is engaged in dialogue
with its agent and other key banks to ensure that the company
continues to have access to a revolving credit agreement.

As previously announced, the company will update the investment
community on its overall strategy and outlook for 2009 during a
meeting to be held on February 4, 2009, in New York City.

The company will provide a detailed outlook for 2009 at its annual
strategy meeting with the investment community on
February 4.

   No Payout for 2008 Executive Performance-Based Compensation

The company has in place compensation programs designed to drive
achievement of key financial goals and to align the interests of
Kodak executives with that of its shareholders.  Executive
performance-based compensation programs for 2008, including the
executive long-term equity program (Leadership Stock) and the
annual cash variable pay program (EXCEL), were based on
achievement of goals related to digital revenue growth, net cash
generation, and total earnings from operations.

As a result of the company's 2008 performance, Kodak executives
worldwide will receive no payout in 2009 for either the EXCEL
variable pay program or the executive Leadership Stock program.
In addition, the company previously announced that, where
permissible by law, its executives will receive no salary
increases in 2009.  The company also announced that for non-exempt
U.S. employees, there will be no U.S. Wage Dividend payout in 2009
based on 2008 performance.

                     EASTMAN KODAK COMPANY
   CONSOLIDATED STATEMENT OF FINANCIAL POSITION - UNAUDITED
         (in millions, except share and per share data)

                                          As of December 31,
                                           2008       2007
                                           ----       ----
ASSETS
CURRENT ASSETS
Cash and cash equivalents            $    2,145   $  2,947
Receivables, net                          1,716      1,939
Inventories, net                            948        943
Other current assets                        174        224
                                           ----       ----
Total current assets                      4,983      6,053
Property, plant and equipment, net        1,551      1,811
Goodwill                                  1,681      1,657
Other long-term assets                    1,745      4,138
                                          -----      -----
TOTAL ASSETS                         $    9,960   $ 13,659
                                          =====     ======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and
other current liabilities           $    3,267   $  3,794
Short-term borrowings and
current portion of long-term debt           51        308
Accrued income and other taxes              144        344
                                         ------     ------
Total current liabilities                 3,462      4,446
Long-term debt, net of current portion    1,252      1,289
Pension and other postretirement
liabilities                              2,382      3,444
Other long-term liabilities               1,122      1,451
                                         ------     ------

Total liabilities                         8,218     10,630
Commitments and Contingencies
SHAREHOLDERS' EQUITY
Common stock, $2.50 par value,
950,000,000 shares authorized;
391,292,760 shares issued as of
December 31, 2008 and 2007;
268,169,055 and 287,999,830
shares outstanding as of December 31,
2008 and 2007                              978        978
Additional paid in capital                  901        889
Retained earnings                         6,660      6,474
Accumulated other comprehensive
(loss) income                             (749)       452
                                         ------     ------
                                          7,790      8,793
Treasury stock, at cost
123,123,705 shares as of
December 31, 2008 and
103,292,930 shares as of
December 31, 2007                        6,048      5,764
                                         ------     ------
Total shareholders' equity                1,742      3,029
                                         ------     ------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY                $    9,960   $ 13,659
                                         ======     ======

                    EASTMAN KODAK COMPANY
      CONSOLIDATED STATEMENT OF CASH FLOWS - UNAUDITED

                                       Twelve Months Ended
                                           December 31
                                         2008         2007
                                    ------------  -----------
Cash flows from operating
activities:

Net earnings                         $      339   $    676
Adjustments to reconcile to
net cash provided by
operating activities:

Earnings from discontinued
operations, net of income taxes           (285)      (881)
Depreciation and amortization               500        785
Gain on sales of businesses/assets          (14)      (157)
Non-cash restructuring and rationalization
costs, asset impairments and other charges   16        336
Provision for deferred income taxes          20         54
Decrease in receivables                     148        161
(Increase) decrease in inventories          (20)       108
Decrease in liabilities excluding
borrowings                                (720)      (624)
Other items, net                           (127)      (107)
                                         -------    -------
Total adjustments                          (482)      (325)
                                         -------    -------
Net cash (used in) provided by
Continuing operations                     (143)       351
                                         -------    -------
Net cash provided by (used in)
discontinued operations                     296        (37)
-------    -------
Net cash provided by operating activities   153        314
                                         -------    -------
Cash flows from investing activities:
Additions to properties                    (254)      (259)
Net proceeds from sales of
businesses/assets                           92        227
Acquisitions, net of cash acquired          (38)        (2)
Marketable securities - sales               162        166
Marketable securities - purchases          (150)      (173)
                                         -------    -------
Net cash used in continuing operations     (188)       (41)
                                         -------    -------
Net cash provided by discontinued
operations                                    -      2,449
                                         -------    -------
Net cash (used in) provided by investing
activities                                 (188)     2,408
                                         -------    -------
Cash flows from financing activities:
Stock repurchases                          (301)         -
Proceeds from borrowings                    155        177
Repayment of borrowings                    (446)    (1,363)
Dividends to shareholders                  (139)      (144)
Exercise of employee stock options            -          6
                                         -------    -------
Net cash used in continuing operations     (731)    (1,324)
                                         -------    -------
Net cash provided by discontinued
operations                                   -         44
                                         -------    -------
Net cash used in financing activities      (731)    (1,280)
                                         -------    -------
Effect of exchange rate changes on cash     (36)        36
                                         -------    -------
Net (decrease) increase in cash and cash
equivalents                                (802)     1,478
Cash and cash equivalents, beginning of
year                                     2,947      1,469
                                         -------    -------
Cash and cash equivalents,
end of year                         $    2,145   $  2,947
                                         =======    =======

                    About Eastman Kodak

Eastman Kodak Company, headquartered in Rochester, New York,
provides imaging technology products and services to the
photographic, graphic arts commercial printing, consumer digital,
and entertainment imaging market.  Kodak reported $10.2 billion in
revenue for the twelve months ended September 30, 2008.

As reported by the Troubled Company Reporter on Dec. 16, 2008,
Moody's Investors Service placed the B1 corporate family and
probability of default ratings on Eastman Kodak Company under
review for possible downgrade.

According to the TCR on Dec. 15, 2008, Standard & Poor's Ratings
Services lowered its corporate credit and issue-level ratings on
Eastman Kodak Co. by one notch.  The corporate credit rating was
lowered to 'B' from 'B+'.  These ratings remain on CreditWatch
with negative implications, where they were initially placed
Nov. 3, 2008, because of the company's significant downward
revision in earnings guidance in October.


EDGEWATER FOODS: Posts $346,946 Net Loss in Quarter ended Nov. 30
-----------------------------------------------------------------
Edgewater Foods International Inc. disclosed in a filing with the
Securities and Exchange Commission that for three months ended
Nov. 30, 2008, it posted a net loss of $346,946 compared with a
net loss of $913,315 for the same period in the previous year.

At Nov. 30, 2008, the company's balance sheet showed total assets
of $6,110,762, total liabilities of $1,923,875 and stockholders'
equity of $4,186,887.

                   Liquidity and Cash Resources

At Nov. 30, 2008, the company had a cash balance of approximately
$292,000.  Prior to the completion of its initial Preferred Stock
Financing, its initial expansion had been largely funded by a
short term note with a maximum limit of approximately $1,451,000.

A full-text copy of the 10-Q filing is available for free at:

               http://ResearchArchives.com/t/s?38be

Based in Gaithersburg, Maryland, Edgewater Foods International
Inc. (OTC BB: EDWT) -- http://www.edgewaterfoods.com/-- is the
parent company of Island Scallops Ltd., a Vancouver Island
aquaculture company.  Established in 1989, ISL operates a scallop
farming and marine hatchery business.

                       Going Concern Doubt

LBB & Associates Ltd. LLP, in Houston, expressed substantial doubt
about Edgewater Foods International Inc.'s ability to continue as
a going concern after auditing the company's consolidated
financial statements for the year ended Aug. 31, 2007.  The
auditing firm pointed to the company's absence of significant
revenues, recurring losses from operations, and its need for
additional financing in order to fund its projected loss in 2008.


ENTERPRISE RENT-A-CAR: Rental Car Firms Also Want to Access TARP
----------------------------------------------------------------
Paulo Prada at The Wall Street Journal reports that Avis Budget
Group Inc., Hertz Global Holdings Inc., Enterprise Rent-A-Car Co.,
and other rental car companies are asking the Congress to let them
use Troubled Asset Relief Program funds to finance new auto
purchases.

WSJ relates that stagnant credit markets, declining demand for
travel, and the automobile industry's hardships have made it hard
for rental car companies to find buyers for their used automobiles
and secure financing to purchase new ones to replace them.

According to WSJ, the House of Representatives included a clause
in a TARP reform bill that it passed to the Senate last week to
give the government the authority to back loans to rental car
companies and other fleet purchasers.  WSJ states that the rental
car industry is the U.S. auto industry's biggest customer, buying
as many as 1.8 million new vehicles per year.  The report quoted
Steven Adamske -- a spokesperson for House Financial Services
Committee chairperson Barney Frank -- as saying, "If our desire is
to get car buying and credit flowing again, enabling people who
buy hundreds of cars at a time is a good way to do it."

Enterprise Rent-A-Car Company --
http://www.enterprise.com/car_rental/home.do-- is a privately
held St. Louis, Missouri-based rental car company serving
customers in the U.S., Canada, Germany, Ireland, Puerto Rico, and
the U.K.  They are also the owners of the Vanguard Automotive
Group, operator of National Car Rental and Alamo Rent A Car in
North America.

Enterprise Rent-A-Car is the largest rental car company in North
America, and has more than 6,900 offices.


FAIRFAX FINANCIAL: S&P Raises Sr. Unsec. Debt Rating From 'BB+'
---------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its counterparty
credit and senior unsecured debt ratings on Toronto-based Fairfax
Financial Holdings Ltd. to 'BBB-' from 'BB+'.  The outlook is
stable.

"The upgrade reflects S&P's enhanced view of the company's credit
profile, which benefits from its increasing ownership of Toronto-
based Northbridge Financial as well as from its improved financial
flexibility resulting from significant investment gains during a
period of challenging economic conditions," said Standard & Poor's
credit analyst Michael Gross.

Fairfax's competitive position is specifically enhanced by its
increasing ownership of Toronto-based Northbridge Financial and
its intent to secure 100% ownership in early 2009, subject to
shareholder approval.

Through its investment expertise, Fairfax reported substantial
realized investment gains of $1.9 billion through Sept. 30, 2008.
Although S&P does not view this level of investment performance as
sustainable, Fairfax has produced a record of above-average
investment performance for more than two decades.


FANNIE MAE: Eight Officers Dispose of Shares to Pay Taxes
---------------------------------------------------------
Eight officers of Federal National Mortgage Association or Fannie
Mae disclosed in separate regulatory filings that on January 26,
2009, they may be deemed to have disposed of a number of shares of
Fannie Mae's common stock at $0.65 per share.  The shares were
withheld by Fannie Mae to pay withholding taxes due upon the
vesting of restricted shares.

Following that transaction, the remaining shares directly owned by
Mr. Bacon total 110,831.  Mr. Bacon may also be deemed to
indirectly own 1,100,509 shares of Fannie Mae's common stock
through ESOP.

                                                         Shares
   Name                  Position                        Disposed
   ----                  --------                        --------
   Kenneth J. Bacon      EVP for Housing & Community Dev.   6,452
   David C. Benson       EVP - Capital Mkts & Treasury      1,810
   David C. Hisey        EVP & Deputy CFO                   2,280
   Linda K. Knight       EVP - Enterp. Ops & Securities     5,769
   Thomas A. Lund        EVP - Single Family Mortgage       8,851
   William B. Senhauser  SVP, Chief Compliance Officer      1,764
   Michael A. Shaw       EVP & Enterprise Risk Officer        910
   Michael J. Williams   EVP & COO                         16,234

Remaining shares beneficially owned after the transactions:

   Officer                Directly Owned     Indirectly Owned
   -------                --------------     ----------------
   Mr. Bacon                 110,831           1,100,509.0
   Mr. Benson                 35,033             480,908.0
   Mr. Hisey                  73,881                 917.7
   Ms. Knight                125,886.8             1,336.5
   Mr. Lund                  134,261                 707.9
   Mr. Senhauser              35,291             574,526.7
   Mr. Shaw                   29,228                 216.8
   Mr. Williams              351,536.8             1,621.1

                       About Fannie Mae

Fannie Mae exists to expand affordable housing and bring global
capital to local communities in order to serve the U.S. housing
market.  Fannie Mae has a federal charter and operates in
America's secondary mortgage market to enhance the liquidity of
the mortgage market by providing funds to mortgage bankers and
other lenders so that they may lend to home buyers. Our job is to
help those who house America.

As reported by the Troubled Company Reporter, the U.S. government
took direct responsibility for Fannie Mae and Freddie Mac, placing
the government sponsored enterprises under conservatorship on
September 7, 2008.  James B. Lockhart, director of Federal Housing
Finance Agency, said that Fannie Mae and Freddie Mac share the
critical mission of providing stability and liquidity to the
housing market.  Between them, the Enterprises have $5.4 trillion
of guaranteed mortgage-backed securities (MBS) and debt
outstanding, which is equal to the publicly held debt of the
United States.  Among the key components of the conservatorship,
the FHFA, as conservator, assumed the power of the Board and
management.


FLYING J: Big West to Wind Down Rosedale Highway Operations
-----------------------------------------------------------
KGET TV 17 reports that Big West Oil LLC said on Wednesday that it
will suspend operations at its Rosedale Highway refinery.

According to KGET TV, Big West's parent company, Flying J Inc.,
filed for Chapter 11 bankruptcy protection in December 2008.

Big West said in a statement that it has been trying to purchase
crude oil to refine into gasoline, but has failed to find a steady
source.  According to KGET TV, Big West has been seeking
alternative crude oil supply on normal terms and financing or
other business solutions that would help keep its Bakersfield
Refinery in operation.  KGET TV relates that Big West said it
still hopes to find a source of crude, but has to close the
refinery in the meantime.  "We hope this suspension will be short
lived  . . .  And we're working very hard to find a solution that
will allow resumption of operations," according to Big West's
statement.

KGET TV quoted Big West Executive Vice President Fred Greener as
saying, "Following the Chapter 11 filing on December 22, 2008, we
have not had the cash liquidity needed to purchase crude in the
necessary types and quantities under the terms being offered by
suppliers.  We are continuing to evaluate the full range of
options, but we have been unsuccessful in our efforts thus far to
find a workable solution.  For now, we will be winding down
refining operations at the facility as we continue to explore
opportunities.  We hope that this suspension will be shortlived,
and are working very hard to find a solution that will allow
resumption of operations.  However, at this time, we cannot
predict when that might occur.  We have reached out to the United
Steelworkers, Local 219, to begin discussions regarding the future
of the plant and its employees.  We remain committed to doing
everything within our power to achieve positive outcomes for our
company, our workforce, and for the Bakersfield community.  We
certainly wish the circumstances were different."

KGET TV states that Big West is asking the unions for a meeting
regarding the closure.  According to the report, Big West has
contacted the United Steelworkers Local 219 to start discussions
regarding the future of its contract with union workers at its
Bakersfield Refinery.

                           About Big West

Big West Oil is a small, refining and marketing company with
101,000 barrels per day rated throughput capacity at two
refineries in Bakersfield, California and Salt Lake City, Utah.
Big West markets its product through wholesale markets as well as
through sales to Flying J's retail network.

                           About Flying J

Headquartered in Ogden, Utah, Flying J Inc. --
http://www.flyingj.com-- operate an oil company with operations
in the filed of exploration and refining of petroleum products.
The Debtors engage in online banking, card processing truck
and trailer leasing, and payroll services.  The Debtors also
operate about 200 travel plazas in 41 states and six Canadian
provinces.  The company and six of its affiliates filed for
Chapter 11 protection on Dec. 22, 2008 (Bankr. D. Del. Lead Case
No. 08-13384).  Kirkland & Ellis LLP represents the Debtors' in
their restructuring efforts and Young, Conaway, Stargatt & Taylor
LLP as their Delaware Counsel.  The Debtors proposed The
Blackstone Group LP as financial advisor and Epiq Bankruptcy
Solutions LLC as claims agent.  When the Debtors filed for
protection from its creditors, they listed assets more than
$1 billion and debts between $100 million to $500 million.


FORD MOTOR: Posts $5.9BB Net Loss in Quarter ended December 31
--------------------------------------------------------------
Ford Motor Company reported net loss of $5.9 billion for fourth
quarter ended Dec. 31, 2008, compared with a net loss of
$2.8 billion in the fourth quarter of 2007.

Ford's fourth quarter pre-tax operating loss from continuing
operations, excluding special items, was $3.7 billion, a decline
from a loss of $620 million a year ago.  On an after-tax basis,
Ford lost $3.3 billion in the fourth quarter compared with a loss
of $487 million a year ago.

"Ford and the entire auto industry faced an extraordinary slowdown
in all major global markets in the fourth quarter that clearly had
an impact on our results," said Ford president and CEO Alan
Mulally.  "We continued to take the decisive actions necessary to
lower production to match the lower worldwide demand and reduce
costs, which we expect will allow us to significantly reduce
negative operating cash flow in 2009 and position Ford for growth
when the economy rebounds.

"The progress we continued to make in the fourth quarter gives us
great confidence that we have the right plan, the right people and
the right products to create a viable, profitably growing Ford for
all of our stakeholders," Mr. Mulally added.  "Our market share
growth in the fourth quarter in the U.S. and Europe is a positive
sign that customers recognize the value of our new products and
understand that a new and different Ford is emerging."

Based on current planning assumptions, Ford reiterated it has
sufficient liquidity to fund its business plan and product
investments.  Ford said it finished 2008 with $24 billion in
available Automotive liquidity, including $13.4 billion in
Automotive gross cash.  In January 2009, as permitted by its
underlying agreement with the UAW, Ford converted the Temporary
Asset Account funds into a new Ford note, payable at year-end.
This will provide the flexibility to utilize more than $2 billion
of funds to support operations, if needed.  As a result, this
amount will improve liquidity and be included as part of Ford's
Automotive gross cash beginning with the first quarter of 2009.

Ford also reconfirmed that, based on current planning assumptions,
it does not need a bridge loan from the U.S. government, barring a
significantly deeper economic downturn or a significant industry
event, such as the bankruptcy of a major competitor that causes
disruption to the company's supply base, dealers or creditors.

Ford also said it remains on track for both its overall and North
American Automotive pre-tax results to be breakeven or profitable
in 2011 -- excluding special items -- based on current planning
assumptions.

Due to concerns about the instability of the capital markets with
the uncertain state of the global economy, Ford disclosed it is
drawing its available credit lines.  The company said it expects
to receive the funds on Feb. 3 and will add the $10.1 billion to
its cash and reflect it on its first quarter 2009 balance sheet.

"Ford went to the credit markets two years ago when they were
functioning normally and obtained the funding necessary --
including our credit lines -- to support our product
transformation and restructuring," Mr. Mulally said.  "Given the
instability of the capital markets with the uncertain state of the
global economy, we believe it is prudent to draw these credit
facilities at this time."

Ford also said the United Auto Workers union has agreed to end the
"jobs bank" at Ford, known as the Job Security program.  The
company and the union presently are working out the details of
implementation.

On an after-tax basis, Ford's fourth quarter operating loss from
continuing operations, excluding special items, was $3.3 billion
compared with a loss of $487 million a year ago.

Ford's fourth quarter revenue was $29.2 billion, down from
$45.5 billion a year ago.  The decline is explained by lower
volume, the sale of Jaguar Land Rover and exchange translation.

Special items reduced pre-tax profits by $1.4 billion in the
fourth quarter which largely reflected costs associated with
worldwide personnel reductions and retiree health care charges
related to our VEBA agreement with the UAW, primarily reflecting
losses on the Temporary Asset Account.

Overall, the company's Automotive gross cash was reduced by
$5.5 billion in the fourth quarter, while its operating-related
cash flow was $7.2 billion negative.  The change in gross cash
reflects:

   -- An Automotive pre-tax loss of $3.3 billion, excluding
      special items.

   -- Capital spending during the quarter about $600 million
      higher than depreciation and amortization, because of
      spending associated with the launch of the all-new Ford F-
      150 and the favorable impact of the second quarter asset
      impairments on depreciation and amortization.

   -- Changes in working capital and other timing differences
      that were $2.7 billion negative.  This is explained by a
      reduction in trade payables of about $4 billion and other
      timing differences as a result of low production at the end
      of the quarter.  Significant reductions in inventory and
      receivables were offsets to the lower payables.

   -- Payments of $600 million to Ford Credit reflecting its
      change to up-front payment of subvention.

   -- Approximately $1.3 billion in tax-related payments
      primarily from Ford Credit.

Ford's negative Automotive operating-related cash flow during the
fourth quarter was significantly affected by declining worldwide
demand.  Ford said it expects operating-related cash outflows in
2009 to be significantly less than those incurred in 2008.  The
expected improvement assumes, among other things, stabilization of
trade payables as industry volumes begin to grow later in the
year, lower capital spending, structural cost reductions, lower
inventories and other factors.

"Ford continues to take the decisive actions necessary to match
our production in line with demand.  This allowed us to reduce
dealer stock by about 50,000 units and benefit from one the lowest
days supply in the U.S. industry," said Lewis Booth, Ford
executive vice president and chief financial officer.

"As production volumes stabilize, payables will stop declining and
generally will grow as volumes recover.  In addition, with the
major F-150 launch behind us, we expect spending to decline in
2009," Mr. Booth said.  "We expect this will allow us to
significantly reduce our negative operating cash flow in 2009 and
maintain the liquidity we need to fund our product-led
transformation."

Ford disclosed it was evaluating its strategic options for Volvo
Cars, including the possible sale of the automaker.  Volvo
continued to implement restructuring actions and substantially
implemented its worldwide personnel reduction of 25% by the end of
the quarter.

                              Outlook

Despite the severe worldwide downturn, Ford said it continues to
make progress on all four pillars of its plan:

   -- Restructuring to operate profitably at the demand and
      changing model mix;

   -- Accelerating the development of new products that customers
      want and value;

   -- Financing the plan and improving the balance sheet;

   -- Working together effectively as one team, leveraging Ford's
      worldwide assets

Ford anticipates weak volumes this year across all markets, with
worldwide sales down more than 10%.  Significant government policy
stimulus is being implemented in most markets and is expected to
improve the environment for sales later this year.  However,
financial markets remain under significant stress, and further
government and central bank actions to provide liquidity and
stabilize banks are needed, the company said.

For Ford, the year ahead will be marked by an unprecedented number
of new product introductions.  In North America, 2009 sees the
introduction and sale of upgraded gas and hybrid versions of the
Ford Fusion mid-size sedan, new Ford Mustang - including a new
convertible model and new Shelby GT500, new Ford Taurus and Taurus
with fuel-saving EcoBoost engine, Ford Flex with EcoBoost, an
entirely new type of small commercial van for the North American
market called the Transit Connect, upgraded Mercury Milan and new
Milan Hybrid, upgraded Lincoln MKZ, Lincoln MKS with EcoBoost,
all-new Lincoln MKT three-row premium crossover and the first full
sales year for the new Ford F-150 pickup.

In Europe, Ford will launch its fastest volume production model
ever - the new 300 horsepower Focus RS.  2009 also marks the first
full sales year for the Fiesta, while the new Ford Ka is
introduced progressively across the region.  The Ford Kuga
crossover will be available for the first time with a 2.5-litre 5-
cylinder Duratec Turbo engine and Durashift 5-tronic automatic
transmission, while "Ford Individual" vehicle personalization
interior and exterior styling packs will be extended across the
model range.

Volvo this year is launching the XC60 crossover in Europe now and
in the U.S. market this spring.  Volvo also will introduce low-
emission versions of seven cars, including the C30, S40, V50, V70,
XC70, XC 60 and S80.  A freshened S80 comes later this year for
Volvo's flagship sedan.

In Asia, 2009 sees the introduction in China of the all-new Ford
Fiesta five-door and four-door sedan built in Nanjing.  The Fiesta
also currently is being introduced in Australia and New Zealand.
Other product introductions in 2009 include the new Ranger compact
pickup and the Everest SUV, both with advanced and efficient TDCi
turbo-diesel engines.

In South America, 2009 provides still more evidence of the growing
strength of the company's "ONE Ford" plan.  Ford is bringing to
market the new European-based Ford Focus in Brazil, Argentina and
Venezuela.  Plus, in Brazil, the North American-based Ford Edge
arrives in dealerships, along with the European-based Transit.
Six additional product actions also are planned for introduction
in the region this year.

Ford also is on track with its plan to invest in new, smaller,
fuel-efficient vehicles and achieve a more balanced global product
portfolio.  With the company's "ONE Ford" product development
vision, all Ford vehicles competing in global segments will be
common in North America, Europe and Asia within the next five
years.  They include Fiesta- and Focus-sized small cars, Fusion-
and Mondeo-sized mid-size cars and utilities, and commercial vans.

Importantly, every new product will be the best or among the best
in its segment for fuel economy, while providing top quality,
safety, smart technologies and value.

Ford's leadership in connectivity and infotainment includes the
addition of two newly added features to its award-winning SYNC
technology -- 911 Assist and Vehicle Health Reports.  This summer,
Ford SYNC(TM) will be further expanded with Traffic, Directions
and Information technology.  The new services will be provided in
with no monthly subscription fees for the first three years.

Ford also this month confirmed that its SYNC technology will be
available globally beginning in 2010, starting in Europe and then
migrating to Asia Pacific.

The company also said it is on track to deliver the plan disclosed
in November to deliver $14 billion to $17 billion of cash
improvements by 2010.

The actions include:

   -- Reducing spending and inventories and achieving other
      working capital improvements;

   -- Reducing salaried personnel-related costs and achieving
      additional efficiencies in engineering, manufacturing,
      advertising, and information technology;

   -- Releasing capital consistent with Ford Credit's smaller
      balance sheet and focus on Ford brands;

   -- Developing incremental sources of funding, including sale
      of non-core assets.

In addition, Ford is pursuing other restructuring opportunities in
conjunction with its various stakeholders and will have more to
discuss at a later date.

Based on current planning assumptions -- many of which are
outlined below -- Ford reiterated that it remains on track for
both its overall and North American Automotive pre-tax results to
be at or above breakeven in 2011, excluding special items.

"Despite the tough fourth quarter, we saw many positive
developments that make us more confident than ever that we have
the right plan and are taking the right actions to survive this
downturn and emerge as a lean, globally integrated company poised
for long-term profitable growth," Mr. Mulally said.

                     About Ford Motor Co.

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

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

                         *     *     *

Moody's Investors Service in December 2008 lowered the Corporate
Family Rating and Probability of Default Rating of Ford Motor
Company to Caa3 from Caa1 and lowered the company's Speculative
Grade Liquidity rating to SGL-4 from SGL-3.  The outlook is
negative.  The downgrade reflects the increased risk that Ford
will have to undertake some form of balance sheet restructuring in
order to achieve the same UAW concessions that General Motors and
Chrysler are likely to achieve as a result of the recently-
approved government bailout loans.  Such a balance sheet
restructuring would likely entail a loss for bond holders and
would be viewed by Moody's as a distressed exchange and
consequently treated as a default for analytic purposes.


GENCORP INC: Board Approves Kathleen Redd's Appointment as CFO
--------------------------------------------------------------
On January 21, 2009, the Board of Directors of GenCorp Inc.
unanimously approved the appointment of Acting Chief Financial
Officer Kathleen E. Redd to Chief Financial Officer of the
company.  Ms. Redd, age 47, will also maintain her position as
Vice President at the company.

Since September 26, 2008, Ms. Redd has served as the company's
Vice President, Controller and Acting Chief Financial Officer.
Before that, Ms. Redd served as the company's Vice President,
Finance from August 2006 to September 2008 and as the company's
Assistant Corporate Controller from August 2002 to August 2006.
Before joining the company, Ms. Redd was Vice President of Finance
for Grass Valley Group in Nevada City, California from April 2001
to July 2002 and Vice President of Finance and Controller for
Jomed Inc. in Rancho Cordova, California from April 1996 to April
2001.

Ms. Redd will be paid an annual base salary of $300,000 and will
be eligible for the same benefits currently received.  There are
no other understandings or arrangements between Ms. Redd and any
other person pursuant to which Ms. Redd was selected or appointed
as the Chief Financial Officer of the company.

Ms. Redd does not have any family relationship with any director,
executive officer or person nominated or chosen by the Board of
Directors to become an executive officer.  Other than her
employment with the company, Ms. Redd did not have any material
interest, direct or indirect, in any material transaction to which
the company was a party since the beginning of the company's last
fiscal year, or which is presently proposed.

                           About GenCorp

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

GenCorp Inc.'s balance sheet as of Aug. 31, 2008, showed $1.01
billion in total assets, $1.04 billion in total liabilities,
resulting to $30.9 million in shareholders' deficit.  GenCorp
posted $2.7 million in net losses on $172.5 million in net
revenues for the third quarter ended Aug.31, 2008, compared with
$15.6 million in net profit on $198.5 million in net revenues for
the third quarter ended 2007.

As reported in the Troubled Company Reporter on Jan. 20, 2009,
Moody's Investors Service 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.


GIANT CARPET: Declares Bankruptcy, Lists $5.2MM in Liabilities
--------------------------------------------------------------
Torstar News Service reports that Giant Carpet and Flooring Ltd.
has declared bankruptcy.

Torstar News relates that Giant Carpet, hurt by the deteriorating
housing market, listed $5.2 million in assets.  According to the
report, Toronto-based liquidation firm Danbury Sales is handling
the sale of Giant Carpet's inventory.

Torstar News states that Giant Carpet's bankruptcy left an unknown
number of clients with unfilled orders.

Giant Carpet and Flooring Ltd. is a 40-year-old chain of
warehouse-style stores.


GOLD & HONEY: Voluntary Chapter 15 Case Summary
-----------------------------------------------
Chapter 15 Debtor: Gold & Honey, Ltd.
                   c/o Amir Bartov, Receiver
                   Lipa Meir & Co.
                   4 Itamar Ben Avi St.
                   Tel Aviv, Israel

Chapter 15 Case No.: 09-70463

Debtor-affiliate filing separate Chapter 15 petition:

        Entity                                     Case No.
        ------                                     --------
Gold & Honey (1995) LP                             09-70464

Debtor-affiliates filing separate Chapter 11 petitions on
Sept. 23, 2008:

        Entity                                     Case No.
        ------                                     --------
Almond Jewelers, Inc.                              08-75238
Gold & Honey (1995) LP                             08-75237

Chapter 15 Petition Date: January 28, 2009

Court: Eastern District of New York (Central Islip)

Judge: Alan S. Trust

Chapter 15 Debtors' Counsel: Paul H. Deutch, Esq.
                             paul.deutch@troutmansanders.com
                             Troutman Sanders LLP
                             The Chrysler Building
                             405 Lexington Avenue
                             New York, NY 10174
                             Tel: (212) 704-6000
                             Fax: (212) 704-6288

Estimated Assets: $1 million to $10 million

Estimated Debts: $10 million to $50 million


GOODY'S LLC: Former Worker Sues Co. for Unpaid Wages, Benefits
--------------------------------------------------------------
Court documents say that Richard McGrath, a former Goody's LLC
employee, has filed a lawsuit against the company on behalf of
himself and about 480 former workers for nonpayment of wages and
other benefits for 60 days.

Reuters reports that Mr. McGrath alleged that Goody's failed to
give workers at least 60 days advance notice of termination as
required by the Worker Adjustment and Retraining Notification Act.
The lawsuit, says the report, is seeking class action status.

                         About Goody's LLC

Headquartered in Wilmington, Delaware, Goody's LLC --
http://www.shopgoodys.com-- Goody's Family Clothing
Inc. -- http://www.shopgoodys.com/-- operates chains of clothing
stores.  The company and 13 of its affiliates filed for Chapter 11
protection on January 13, 2009 (Bankr. D. Del. Lead Case No.
09-10124).  M. Blake Cleary, Esq., at Young, Conaway, Stargatt &
Taylor LLP, represents the Debtors in their restructuring efforts.
The Debtor proposed Bass Berry & Sims PLC and Skadden Arps Slate
Meagher & Flom LLP as their special counsel; FTI Consulting Inc.
as financial advisor; and Hilco Merchant Resources LLC and Gordon
Brothers Retail Partners LLC as liquidation agent.

The company is owned by Goody's Holdings Inc., a non-debtor
entity.  As of May 31, 2008, the company operated 355 stores in
several states with approximately 9,868 personnel of which 170
employees are covered under a collective bargaining agreement.
The company and 19 of its affiliates filed for Chapter 11
protection on June 9, 2008 (Bankr. D. Del. Lead Case No.
08-11133).  Gregg M. Galardi, Esq., and Marion M. Quirk, Esq.,
at Skadden Arps Slate Meagher & Flom LLP, and Paul G. Jennings,
Esq., at Bass, Berry & Sims PLC, represented the Debtors.  The
Debtors selected Logan and Company Inc. as their claims agent.
The company emerged from bankruptcy Oct. 20, 2008, after closing
more than 70 stores.

When the Debtors filed for protection from their creditors for the
second time, they listed assets and debts between
$100 million to $500 million each.


GOTTSCHALK INC: Taps DJM Asset as Real Estate Consultant
--------------------------------------------------------
Gottschalk Inc. asks the United States Bankruptcy Court for the
District of Delaware for permission to employ DJM Asset Management
LLC as its real estate consultant.

The firm is expected to:

   a) meet with the Debtor to ascertain the its goals, objectives
      and financial parameters;

   b) negotiate the modification of certain leases, as directed
      by the Debtor to obtain rent reductions or other
      advantageous modifications;

   c) negotiate the potential termination, assignment of other
      disposition of certain of the leases as directed by the
      Debtor and the owned properties including assisting the
      Debtor at auction, if needed;

   d) negotiate waivers or reductions of prepetition cure amounts
      and claims asserted under Section 502(b)(6) of the
      Bankruptcy Code with respect to leases;

   e) assist the Debtor in the documentation of proposed
      transactions; and

   f) report periodically to the Debtor regarding the status of
      negotiations and disposition efforts.

The firm will be paid in accordance to the real estate consulting
and advisory services agreement.  A full-text copy of the
agreement is available for free at:

              http://ResearchArchives.com/t/s?38c5

To the best of the Debtor's knowledge, the firm does not hold any
interest adverse to the Debtor's estate and its creditors, and is
a "disinterested person" as defined in Section 101(14) of the
Bankruptcy Code.

                        About Gottschalks

Headquartered in Fresno, California, 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 claims agent.  The
U.S. Trustee for Region 3 appointed seven creditors serve on an
Official Committee of Unsecured Creditors.  In its bankruptcy
petition, Gottschalk listed $288,438,000 in total assets and
$197,072,000 in total debts as of Jan. 3, 2009.


GOTTSCHALK INC: Taps FD U.S. as Communications Advisor
------------------------------------------------------
Gottschalk Inc. asks the United States Bankruptcy Court for the
District of Delaware for permission to employ FD U.S.
Communications Inc. as its communications advisors.

The firm is expected to:

   a) develop and implement communications programs and related
      strategies and initiatives for communications with the
      Debtor's key constituencies regarding the Debtor's
      operations and financial performance and the Debtor's
      progress through the Chapter 11 process;

   b) develop public relations initiatives for the Debtor during
      this Chapter 11 case;

   c) prepare press release and other public statements for the
      Debtor including statements relating to major events in
      this Chapter 11 case;

   d) prepare other forms of communication to the Debtor's key
      constituencies and the media, potentially including
      materials to be posted on the Debtor's web site; and


   e) perform other communications consulting services as may be
      requested by the Debtor.

The Debtor paid $20,000 retainer fee to the firm.

The firm's professionals and their compensation rates are:

      Designation                  Hourly Rate
      -----------                  -----------
      vice chairman                $520
      senior managing director     $480
      senior vice president        $420
      vice president               $340
      assistant vice president     $300
      associate                    $240
      junior associate             $200
      administration               $100

To the best of the Debtor's knowledge, the firm is a
"disinterested person" as defined in Section 101(14) of the
Bankruptcy Code.

A full-text copy of the engagement letter between the Debtor and
the firm is available for free at:

              http://ResearchArchives.com/t/s?38c5

                        About Gottschalks

Headquartred in Fresno, California, 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 claims agent.  The
U.S. Trustee for Region 3 appointed seven creditors serve on an
Official Committee of Unsecured Creditors.  In its bankruptcy
petition, Gottschalk listed $288,438,000 in total assets and
$197,072,000 in total debts as of Jan. 3, 2009.


GOTTSCHALK INC: Taps Financo Co. as Investment Banker
-----------------------------------------------------
Gottschalks Inc. asks the United States Bankruptcy Court for the
District of Delaware for permission to employ Financo Inc. as its
investment banker.

The firm is expected to:

   a) work with the Debtor to determine the appropriate process
      for marketing the Debtor to potential purchasers;

   b) assist in the preparation of descriptive material
      concerning the Debtor;

   c) develop, update and review with the Debtor on an ongoing
      basis a list of parties which might be interested in
      acquiring the Debtor;

   d) conduct the overall sale process including investment
      banking sale, advisory and valuation services.

   e) consult with and advise the Debtor concerning the sale
      process, and participate in sale negotiations on the
      Debtor's behalf; and

   f) provide opinion to the board of directors of the Debtor as
      to whether, depending on the nature of the sale, the
      consideration to be received by the Debtor in connection
      with the proposed sale is fair from a financial point of
      view.

The firm will be paid for its rendered services in accordance to
the engagement letter dated Jan. 8, 2009.  A full-text copy of the
engagement letter is available for free at:

              http://ResearchArchives.com/t/s?38c6

To the best of the Debtor's knowledge, the firm is a
"disinterested person" as defined in Section 101(14) of the
Bankruptcy Code.

                        About Gottschalks

Headquartered in Fresno, California, 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 claims agent.  The
U.S. Trustee for Region 3 appointed seven creditors serve on an
Official Committee of Unsecured Creditors.  In its bankruptcy
petition, Gottschalk listed $288,438,000 in total assets and
$197,072,000 in total debts as of Jan. 3, 2009.


GEORGIA-PACIFIC LLC: Fitch Affirms Issuer Default Rating to 'B+'
----------------------------------------------------------------
Fitch Ratings has affirmed Georgia-Pacific LLC's ratings:

  -- Issuer Default Rating at 'B+';
  -- Senior unsecured at 'B+/RR4';
  -- Senior secured revolver at 'BB/RR2';
  -- First lien term loans at 'BB/RR2'.

The Rating Outlook is Negative.

The affirmation of GP's ratings recognizes the company's strong
position in North American tissue products (paper towels, cups,
plates and bathroom tissue) and the continued strong earnings
expectations for this business in a weak economy.  North American
tissue generates about two-thirds of GP's consolidated EBITDA, and
is presently characterized by firm pricing and a deflating cost
structure.  GP's other businesses (building products, packaging
and tissue products sold into Europe, the Middle East and Africa)
are not as strong; earnings expectations for the first two are
weak this year.  How weak is difficult to forecast; Fitch is
presuming EBITDA declines in these businesses on the order of 20%-
25% in 2009.  This is expected to hinder GP's debt repayment, to
around 40% of the $1.5 billion or so repayment expected to be
reported once 2008's results are released.

Risks to Fitch's prediction weigh in favor of a weaker rather than
stronger year for earnings, particularly in building products
(wood panels, gypsum board and lumber), packaging (containerboard,
bleached board and pulp) and possibly GP's offshore tissue
products, and are the reasons for the Negative Rating Outlook.  GP
is looking to trim its capital and operating budgets from last
year to improve free cash flow; Fitch expects this will not
materially move the company's leverage to earnings far from a 5
times multiple of net debt to EBITDA from the end of 2008.

GP was taken private in 2005 by Koch Industries, Inc. in a
transaction valued at just over $21 billion.  GP produces a wide
variety of products: consumer tissue, disposable tableware,
lumber, plywood, oriented strand board, gypsum wallboard,
corrugated packaging, and uncoated freesheet.  The company is
either No. 1, 2, or 3 in most of these markets.


GIBRALTAR INDUSTRIES: S&P Downgrades Corp. Credit Rating to 'BB-'
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
ratings on Gibraltar Industries Inc., including its corporate
credit rating, to 'BB-' from 'BB'.  The outlook is negative.

"The lower rating reflects our expectation that as a result of
likely further deterioration in Gibraltar's operating environment-
specifically its residential and automotive end-markets, which
account for about 60% of the company's revenues-credit measures
could deteriorate to a level that S&P would consider to be more
in-line with a lower rating," said Standard & Poor's credit
analyst Thomas Nadramia.  "Specifically, S&P expects the company's
debt to EBITDA could exceed 4x and EBITDA interest coverage could
fall below 3.5x over the next several quarters.  In addition,
given the challenging operating environment and the potential for
weaker credit measures, the cushion relative to the company's
total leverage covenant governing its bank facility, which is set
at 4.25x could decrease.

The ratings on Buffalo, New York-based building products
manufacturer and metal processor Gibraltar Industries Inc. reflect
the company's mature and cyclical markets, volatile raw material
costs, and aggressive growth strategy.  Still, the company
maintains a leading position in niche markets, relatively
consistent profitability, and a highly variable cost structure.

The negative outlook reflects S&P's expectation that the company's
performance will continue to be hurt by the challenging operating
environment as lower residential and commercial construction end-
market demand and weaker automotive results continue through 2009.
As a result, Gibraltar's credit metrics could deteriorate to a
level that S&P would consider to be weak for the rating, with
adjusted debt to EBITDA of more than 4x and EBITDA interest
coverage of less than 3.5x.  S&P could lower the rating if demand
in the company's end-markets declines more than S&P currently
expects, meaningfully affecting revenues and operating margins and
further reducing the cushion relative to its financial covenants.
Specifically, if there were no meaningful reductions in debt
levels and EBITDA were to decline to less than $85 million, the
company's liquidity position could become constrained.  A positive
rating action seems less likely in the near term given S&P's
expectations for weak residential and nonresidential construction
activity and depressed automotive sales.  However, if Gibraltar's
sales and operating margins improve allowing the company to
substantially reduce debt to a level that results in a leverage
ratio of about 3x, a positive action would be considered.


GMAC LLC: Moody's Downgrades Ratings on 14 Classes of Securities
----------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of 14 classes
of securities from 9 auto lease securitizations sponsored by GMAC
LLC.

The rating actions were motivated by the continued uncertainty on
future residual values, the creditworthiness of the manufacturer,
the credit enhancement available to the rated notes relative to
the remaining securitized residual value, and the timing of lease
terminations.

The rating actions conclude the review period of the 9
transactions that were downgraded on November 25, 2008 and placed
on review for possible further downgrade.  During the review
period, Moody's reviewed, among other things, additional
information relating to the performance of vehicle residual values
in these transactions.  Vehicle residual value losses have
increased significantly over the past several months, particularly
during the last quarter of 2008.  Moody's expects the residual
values to remain under stress in the current year due to the
challenging macroeconomic environment as well as the uncertainty
surrounding the US automotive sector.  Additionally, Moody's has
observed a significant industry-wide build up in the inventory of
turned-in vehicles that could further depress residual values in
the near term.

Moody's has recently downgraded the corporate family ratings of
General Motors to Ca (negative outlook).  This action reflects the
expectation that the pace and severity of erosion in the US
automotive sector will severely outpace the company's ability to
respond effectively.  Moody's believes that future residual values
could be adversely affected in the event of a manufacturer
bankruptcy.  Moreover, residual value exposure grows as a
percentage of the outstanding securitized pool balance over time.

In addition, Moody's analyzed recent residual value loss
experience to derive a probability-based loss expectation under
circumstances where the manufacturer is either in a non-bankrupt
status, a Chapter 11 bankruptcy or a Chapter 7 bankruptcy.  The
rating actions are based on the credit enhancement available
relative to the probability-based loss expectation.

The complete rating actions are:

Issuer: Capital Auto Receivables Asset Trust 2007-SN2

  -- Cl. A-2, Downgraded to Baa1 from Aa3; previously on
     11/25/2008 Downgraded to Aa3 from Aaa and Placed Under
     Review for further Possible Downgrade

  -- Cl. A-3, Downgraded to Baa1 from Aa3; previously on
     11/25/2008 Downgraded to Aa3 from Aaa and Placed Under
     Review for further Possible Downgrade

  -- Cl. A-4, Downgraded to Baa1 from Aa3; previously on
     11/25/2008 Downgraded to Aa3 from Aaa and Placed Under
     Review for further Possible Downgrade

  -- Cl. B, Downgraded to Baa3 from A1; previously on 11/25/2008
     Downgraded to A1 from Aa2 and Placed Under Review for
     further Possible Downgrade

  -- Cl. C, Downgraded to Ba3 from A3; previously on 11/25/2008
     Downgraded to A3 from A1 and Placed Under Review for further
     Possible Downgrade

  -- Cl. D, Downgraded to B3 from Ba1; previously on 11/25/2008
     Downgraded to Ba1 from Baa1 and Placed Under Review for
     further Possible Downgrade

Issuer: Capital Auto Receivables Asset Trust 2007-SNE

  -- Cl. A, Downgraded to Baa1 from Aa3; previously on 11/25/2008
     Downgraded to Aa3 from Aaa and Placed Under Review for
     further Possible Downgrade

Issuer: Capital Auto Receivables Asset Trust 2007-SNG

  -- Cl. A, Downgraded to Baa1 from Aa3; previously on 11/25/2008
     Downgraded to Aa3 from Aaa and Placed Under Review for
     further Possible Downgrade

Issuer: Capital Auto Receivables Asset Trust 2008-SNA

  -- Cl. A, Downgraded to Baa1 from Aa3; previously on 11/25/2008
     Downgraded to Aa3 from Aaa and Placed Under Review for
     further Possible Downgrade

Issuer: Capital Auto Receivables Asset Trust 2008-SNB

  -- Cl. A, Downgraded to Baa1 from Aa3; previously on 11/25/2008
     Downgraded to Aa3 from Aaa and Placed Under Review for
     further Possible Downgrade

Issuer: Capital Auto Receivables Asset Trust 2008-SND

  -- Cl. A, Downgraded to Baa1 from Aa3; previously on 11/25/2008
     Downgraded to Aa3 from Aaa and Placed Under Review for
     further Possible Downgrade

Issuer: Capital Auto Receivables Asset Trust 2008-SNE

  -- Cl. A, Downgraded to Baa1 from Aa3; previously on 11/25/2008
     Downgraded to Aa3 from Aaa and Placed Under Review for
     further Possible Downgrade

Issuer: Capital Auto Receivables Asset Trust 2008-SNF

  -- Cl. A, Downgraded to Baa1 from Aa3; previously on 11/25/2008
     Downgraded to Aa3 from Aaa and Placed Under Review for
     further Possible Downgrade

Issuer: Capital Auto Receivables Asset Trust 2008-SNH

  -- Cl. A, Downgraded to A2 from Aa2; previously on 11/25/2008
     Downgraded to Aa2 from Aaa and Placed Under Review for
     further Possible Downgrade

                             Servicer

GMAC LLC provides wholesale, retail, and lease financing,
primarily to GM dealers and is one of the world's largest auto
finance companies.  General Motor Corporation, headquartered in
Detroit, Michigan, is one the world's largest auto manufacturers.
GM's long-term unsecured bonds are rated Ca with a negative
outlook, while GMAC's long-term unsecured bonds are rated C.


GMAC LLC: Moody's Takes Rating Actions on Floorplan Notes
---------------------------------------------------------
Moody's Investors Service has taken these ratings actions on
dealer floorplan asset-backed notes issued by GMAC LLC.  The
ratings actions are due to the high degree of uncertainty around
several key variables associated with floorplan financings.  These
include the financial strength of the dealerships, the market
value of the vehicles that secure the loans, and the macroeconomic
and business challenges facing General Motor Corporation.  The
transactions feature revolving pools of receivables payable by
auto dealers and secured by the dealers' related inventory of
vehicles.  The dealers' accounts were originated and are serviced
by GMAC.

Superior Wholesale Inventory Financing Trust X

  -- Class A Notes, including RN1 and RN2, Downgraded to A3 from
     Aa3 and remain Under Review for further Possible Downgrade;
     previous on 11/25/2008 Downgraded to Aa3 from Aaa and Placed
     Under Review for further Possible Downgrade

  -- Class B Notes, remain Under Review for further Possible
     Downgrade; previous on 11/25/2008 Downgraded to B2 from A2
     and Placed Under Review for further Possible Downgrade

  -- Class C Notes, remain Under Review for further Possible
     Downgrade; previous on 11/25/2008 Downgraded to B3 from Baa2
     and Placed Under Review for further Possible Downgrade

Superior Wholesale Inventory Financing Trust XI

  -- Class A Notes, including RN1 and RN2, Downgraded to A3 from
     Aa2 and remain Under Review for further Possible Downgrade;
     previous on 11/25/2008 Downgraded to Aa2 from Aaa and Placed
     Under Review for further Possible Downgrade

  -- Class B Notes, Downgraded to B2 from B1 and remain Under
     Review for further Possible Downgrade; previous on
     11/25/2008 Downgraded to B1 from A2 and Placed Under Review
     for further Possible Downgrade

  -- Class C Notes, remain Under Review for further Possible
     Downgrade; previous on 11/25/2008 Downgraded to B3 from Baa2
     and Placed Under Review for further Possible Downgrade

Superior Wholesale Inventory Financing Trust 2007-AE-1

  -- Class A Notes, Downgraded to Aa2 from Aaa and remain Under
     Review for further possible downgrade

  -- Class B Notes, Downgraded to Aa3 from Aaa and remain Under
     Review for further Possible Downgrade; previous on
     11/25/2008 Placed Under Review for Possible Downgrade

  -- Class C Notes, Downgraded to Baa1 from Aa1 and remain Under
     Review for further Possible Downgrade; previous on
     11/25/2008 Downgraded to Aa1 from Aaa and Placed Under
     Review for further Possible Downgrade

  -- Class D Notes, Downgraded to Baa3 from Aa2 and remain Under
     Review for further Possible Downgrade; previous on
     11/25/2008 Downgraded to Aa2 from Aaa and Placed Under
     Review for further Possible Downgrade

SWIFT Master Auto Receivables Trust Series 2007-1

  -- Class A Notes, Downgraded to Aa2 from Aaa and remain Under
     Review for further possible downgrade

  -- Class B Notes, Downgraded to Aa3 from Aaa and remain Under
     Review for further Possible Downgrade; previous on
     11/25/2008 Placed Under Review for Possible Downgrade

  -- Class C Notes, Downgraded to Baa1 from Aa1 and remain Under
     Review for further Possible Downgrade; previous on
     11/25/2008 Downgraded to Aa1 from Aaa and Placed Under
     Review for further Possible Downgrade

  -- Class D Notes, Downgraded to Baa3 from A1 and remain Under
     Review for further Possible Downgrade; previous on
     11/25/2008 Downgraded to A1 from Aaa and Placed Under Review
     for further Possible Downgrade

SWIFT Master Auto Receivables Trust Series 2007-2

  -- Class A Notes, Downgraded to Aa2 from Aaa and remain Under
     Review for further possible downgrade

  -- Class B Notes, Downgraded to Aa3 from Aaa and remain Under
     Review for further Possible Downgrade; previous on
     11/25/2008 Placed Under Review for Possible Downgrade

  -- Class C Notes, Downgraded to Baa1 from Aa1 and remain Under
     Review for further Possible Downgrade; previous on
     11/25/2008 Downgraded to Aa1 from Aaa and Placed Under
     Review for further Possible Downgrade

  -- Class D Notes, Downgraded to Baa3 from A1 and remain Under
     Review for further Possible Downgrade; previous on
     11/25/2008 Downgraded to A1 from Aaa and Placed Under Review
     for further Possible Downgrade

                             Rationale

Since the rating actions on the GMAC auto floorplan deals on
November 25, 2008, Moody's further assessed, among other things,
the potential for bankruptcy at GM (reorganization and
liquidation), potential dealer default rates, collateral recovery
values, and servicer readiness to monitor dealers and secure
collateral should numerous dealers default simultaneously.  The
rating actions reflect Moody's updated view of key driving factors
in the floorplan transactions following the review process.

Moody's rating action reflects the high degree of uncertainty
around a number of assumptions, particularly those applicable to
Chapter 11 or Chapter 7 bankruptcy scenarios.  The ratings of the
subordinated notes also reflect high loss severities upon default
for the smaller sized bonds.

The notes remain on review for further possible downgrade due to
significant uncertainty surrounding GM in 2009.  On December 4,
2008, the Bush Administration approved $17.4 billion in short-term
emergency loans for General Motors and Chrysler.  The loans
provided near-term liquidity to both companies, but also
identified key targets against which the companies must show
substantial progress if the existing loans are to be extended
beyond March 31, 2009 and if additional requested funding is to be
provided.  Whether the funding will still be available and whether
a more complete agreement can be reached with the government in
early 2009 should have implications on GM's floorplan transactions
because of their direct exposure to GM.

                        Rating Methodology

Moody's floorplan analysis is based on a joint-default probability
analysis of both the manufacturer and dealers.  Loss given default
is determined by analyzing the collateral at risk net of
recoveries.  The total collateral at risk upon a joint-default of
manufacturer and dealer is the remaining unpaid floorplan loan
balance.  The balance is calculated based on total payments as
determined by monthly payment rate prior to dealer default.

The analysis is implemented through a simulation model, which
simulates losses during a two year amortization period following
an event of default based on a set of key modeled assumptions:

  -- Manufacturer bankruptcy scenarios
  -- Dealer default rates
  -- Recovery rates
  -- Payment rates

In addition, Moody's includes other assumptions in the simulation
model such as the impact of macroeconomic activity on manufacturer
and dealer default probability, the correlation of default between
manufacturer and dealer.  In addition, the model includes
assumptions about the frequency of diversion of vehicle sale
proceeds by the dealership.

The above modeled assumptions form the basis of the quantitative
analysis executed through a simulation model.  Manufacturer
default is simulated, which is further specified into Chapter 11
and Chapter 7 bankruptcies.  Manufacturer default probability is
modeled based on committee assessment, often with reference to the
manufacturer rating.  Next, the simulation model simulates dealer
default, which takes place randomly throughout the two-year
amortization period.  The final step in simulation is to calculate
total principal collections.  For defaulted dealers, the model
calculates total collateral at risk determined by payment rate
prior to dealer default and then applies a recovery rate under
different circumstances where the manufacturer is either in a non-
bankrupt status, a Chapter 11 bankruptcy or a Chapter 7
bankruptcy.

Each simulation run simulates a total loss and corresponding
internal rate of return reduction for each bond.  This IRR
reduction helps form the quantitative basis of Moody's rating
assessment.  Moody's also evaluates qualitative factors such as
the quality of provided information, servicer strength, and
dealership profile. Combining the qualitative and quantitative
analysis, a final rating level is determined.

                              Servicer

GMAC provides wholesale, retail, and lease financing, primarily to
GM dealers and is one of the world's largest auto finance
companies.  General Motor Corporation, headquartered in Detroit,
Michigan, is one the world's largest auto manufacturers.  GM's
long-term unsecured bonds are rated Ca with a negative outlook,
while GMAC's long-term unsecured bonds are rated C.


GUAM POWER: Fitch Affirms 'BB+' Rating on $375 Mil. Notes
---------------------------------------------------------
Fitch Ratings affirms the rating on Guam Power Authority's
$375 million of outstanding electric system revenue bonds at
'BB+'.  The Rating Outlook remains Positive.

The rating is supported by a continuation of the solid track
record of GPA's governance structure, a more stable financial
profile, and improving system reliability and operating
performance.  The Positive Outlook reflects the improved
relationship with the public utilities commission's approval of a
base rate increase and other charges, and the PUC's willingness to
respond to the fuel cost volatility in 2008 and provide GPA with a
third fuel cost recovery via the Levelized Energy Adjustment
Clause.

Fitch believes that a rating upgrade is dependent on continued
improvements in debt service coverage for full obligations
(including the capitalized lease), and increases in liquidity to a
level sufficient to protect against volatile fuel prices and
adverse economic impacts, and natural disasters (typhoons and
earthquakes).  Additionally, the rating and Outlook reflect the
continued progress on the pay down of government past account
receivables.

Other Rating considerations include:

  -- Absence of competition;

  -- Key load center transmission lines being placed underground,
     providing protection from outages due to typhoons;

  -- Ongoing exposure to natural disasters;

  -- Tourism-based economy (mitigated by current military
     presence and future expansion);

  -- Dependence on oil for generation and the need for the PUC to
     approve timely recovery of fuel costs thought the LEAC.

In order to mitigate the volatility of fuel oil prices in the
past, GPA has developed a fuel risk management program which
includes the use of a collar-hedging strategy to protect and
stabilize the price of fuel paid by the Authority's ratepayers.
In light of the sharp decline in fuel oil prices, the hedges are
currently out of the money on a marked-to-market basis.  GPA will
combine unspent construction fund monies that will not be utilized
in the next 12 months and grant monies into an investment
agreement that will be used as collateral for its fuel hedge
agreements.  The collateral only has to be posted for the
remaining term of the fuel hedge contracts, which is less than one
year.

Guam Power Authority, the only retail provider of energy on the
Island of Guam, serves 45,751 customer accounts and a population
of approximately 175,000.  Guam is the westernmost territory of
the U.S.


HERTZ GLOBAL: Rental Car Industry Also Wants Access to TARP
-----------------------------------------------------------
Paulo Prada at The Wall Street Journal reports that Avis Budget
Group Inc., Hertz Global Holdings Inc., Enterprise Rent-A-Car Co.,
and other rental car companies are asking the Congress to let them
use Troubled Asset Relief Program funds to finance new auto
purchases.

WSJ relates that stagnant credit markets, declining demand for
travel, and the automobile industry's hardships have made it hard
for rental car companies to find buyers for their used automobiles
and secure financing to purchase new ones to replace them.

According to WSJ, the House of Representatives included a clause
in a TARP reform bill that it passed to the Senate last week to
give the government the authority to back loans to rental car
companies and other fleet purchasers.  WSJ states that the rental
car industry is the U.S. auto industry's biggest customer, buying
as many as 1.8 million new vehicles per year.  The report quoted
Steven Adamske -- a spokesperson for House Financial Services
Committee chairperson Barney Frank -- as saying, "If our desire is
to get car buying and credit flowing again, enabling people who
buy hundreds of cars at a time is a good way to do it."

                        About Hertz Global

Hertz Global Holdings Inc. in Park Ridge, New Jersey, (NYSE: HTZ)
-- https://www.hertz.com/ -- through its subsidiaries, rents and
leases cars and trucks primarily in the U.S. and Europe.  It
operates in two segments, Car Rental and Equipment Rental.  The
Car Rental segment engages in the ownership and lease of cars.
The Equipment Rental segment rents earthmoving equipment, material
handling equipment, aerial and electrical equipment, air
compressors, generators, pumps, small tools, compaction equipment,
and construction-related trucks in North America and Europe.  The
company's products and services include Hertz #1 Club Gold;
NeverLost customized, onboard navigation systems; SIRIUS Satellite
Radio; and unique cars and SUVs offered through Hertz's Prestige,
Fun and Green collections.  Hertz also operates an equipment
rental companies with corporate locations in France and Spain.  It
is the corporate parent of Hertz Corporation.


HEXION SPECIALTY: Finalizes Severance Agreement With Sarah Coffin
-----------------------------------------------------------------
On January 7, 2009, Hexion Specialty Chemicals Inc. reported that
Sarah R. Coffin, Executive Vice President and President of the
Coatings and Inks Division, would be leaving the company effective
February 15, 2009.

Ms. Coffin's severance agreement was finalized on January 21,
2009.  The agreement provides for the continuation of her current
base salary of $400,000 for fifty-two weeks to be paid in bi-
weekly installments, and an additional transition bonus of
$126,000 to be paid by February 20, 2009.  The agreement also
provides for payment of a lump sum intended to cover the
approximate cost of the company's portion of medical care coverage
premiums under COBRA for twenty-six weeks following February 16,
2009, which amount will be grossed-up for federal income tax
withholding.  Ms. Coffin will receive payment for accrued but
unused vacation through her termination date and 12 months of
executive outplacement support.

Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. --
http://www.hexionchem.com/-- is a producer of thermosetting
resins, or thermosets.  Thermosets are a critical ingredient in
virtually all paints, coatings, glues and other adhesives produced
for consumer or industrial uses.  Hexion Specialty Chemicals is
controlled by an affiliate of Apollo Management L.P.

Hexion's balance sheet at Sept. 30, 2008, showed total assets of
$3.8 billion and total liabilities of $5.4 billion, resulting in a
shareholders' deficit of $1.6 billion.

The Troubled Company Reporter reported on Nov. 6, 2008, that
Standard & Poor's Ratings Services lowered its ratings on Hexion
Specialty Chemicals Inc., including the corporate credit rating to
'B-' from 'B'.  All of the ratings on Hexion remain on
CreditWatch, where they were placed with negative implications on
July 5, 2007.


HEXION SPECIALTY: Earnings Uncertainty Cues S&P's Junk Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
ratings on Columbus, Ohio-based Hexion Specialty Chemicals Inc.,
including the corporate credit rating to 'CCC+' from 'B-'.  The
ratings remain on CreditWatch, where they were placed with
negative implications on July 5, 2007.

"The ongoing CreditWatch listing reflects earnings uncertainty in
the current difficult business environment and the risk of a
financial covenant violation in the company's credit facilities
during the next few quarters," noted Standard & Poor's credit
analyst Paul Kurias.  The initial CreditWatch placement followed
the announcement of Hexion's proposed debt-financed acquisition of
Huntsman Corp. in a transaction valued at more than
$10 billion, including assumed debt.

"The downgrade reflects increasing concerns about Hexion's weak
financial performance relative to expectations for the rating,"
added Mr. Kurias.  "We believe that weak demand for chemicals in
the fourth quarter of 2008 and early 2009 will hurt earnings and
weaken Hexion's already stretched financial profile."  Hexion's
financial profile is already highly leveraged with the ratio of
total debt to EBITDA of more than 9x as of Sept. 30, 2008 (pro
forma for the $325 million financing of a breakup fee at the
parent holding company, Hexion LLC for the failed Huntsman
transaction).  S&P's adjustments to debt include tax-adjusted
unfunded employee benefit obligations and the capitalized
present value of operating leases.  The prospects for earnings in
2009 remain weak relative to 2008, which will likely forestall any
meaningful improvement in the financial profile.  S&P is concerned
that weak earnings in 2009 could lead to a further deterioration
in the financial profile.  S&P's concerns include weakening
cushions under a financial covenant in 2009, which could constrain
liquidity.

A meaningful portion of Hexion's sales are to cyclical end markets
such as construction and industrial, which are vulnerable to
demand contractions during economic downturns.  The ongoing global
economic slowdown is also expected to offset benefits to Hexion's
earnings from its global diversification, which has been a
strength, and from an ongoing cost reduction program initiated by
management to shore up earnings.

The risks to Hexion's financial profile are only partly offset by
a debt maturity profile which is not onerous during 2009 or 2010
despite the high leverage.  There is no meaningful debt maturity
until the fourth-quarter of 2011, when the $225 million revolving
credit facility matures.  In addition, the company has a provision
for equity cures under its financial covenants, which mitigates
some of the risk related to covenant compliance.  S&P also note
Huntsman's recent announcement that it has undertaken steps to
dismiss lawsuits and legal claims against Hexion, which S&P
believes considerably diminishes legal risks related to the
terminated Huntsman acquisition.  Still, overall financial risk is
expected to increase with the increase in leverage in 2009 and
with the potential for constraints on access to the revolving
credit facility as covenant cushions weaken.

The CreditWatch listing indicates that the ratings remain at risk
of a downgrade if earnings deteriorate meaningfully during the
next quarter, or if covenant cushions decline to negligible levels
or liquidity declines meaningfully below Sept. 30, 2008, levels.
S&P will resolve S&P's CreditWatch when operational results in the
fourth quarter of 2008 become available, and after S&P complete
S&P's review of operating prospects for 2009.  The CreditWatch
resolution will also address the pending changes to the company's
capital structure, which could affect S&P's recovery analysis and
notching of existing debt issues.


HINES HORTICULTURE: Court Confirms Black Diamond-Backed Plan
------------------------------------------------------------
Hines Horticulture Inc. has won from the U.S. Bankruptcy Court for
the District of Delaware approval of its reorganization plan.

According to Bloomberg's Bill Rochelle, the Court confirmed the
reorganization plan, which provides for:

    -- Full payment to secured creditors on their $35.9 million in
       claims;

    -- Payment to unsecured creditors, including holders of
       $175 million in 10.25% senior notes due 2011, from 7.2% of
       future profits of NewCo, the entity created by Black
       Diamond to conduct Hines' former businesses; and

    -- Zero recovery to holders of equity interests in the
       company.

As reported by the Troubled Company Reporter in December, the Hon.
Kevin J. Carey authorized the sale of substantially all assets of
Hines Horticulture Inc. and Hines Nurseries Inc. to an affiliate
of Black Diamond Capital LLC.  According to Bloomberg News, the
Black Diamond unit was declared the winning bidder when no other
competing offers were made.  The Black Diamond unit offered to pay
$58 million in cash and assume more than $45.9 million in debts.

The Plan requires the consummation of the sale before the Plan
could be declared effective. A copy of the Plan is available at:

A full-text copy of the Debtors' First Amended Joint Plan is
available for free at:

      http://bankrupt.com/misc/Hines_1stAmendedJointPlan.pdf

                     About Hines Horticulture

Headquartered in Irvine, California, Hines Horticulture, Inc. --
http://www.hineshorticulture.com/-- operates nursery facilities
located in Arizona, California, Oregon and Texas.  Through its
affiliate, the company produces and distributes horticultural
products.  The company and its affiliate, Hines Nurseries, Inc.,
filed for Chapter 11 protection on Aug. 20, 2008 (Bankr. D. Del.
Lead Case No.08-11922).  Anup Sathy, Esq., Ray C.Schrock, Esq.,
and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent
the Debtors in their restructure efforts.  Robert S. Brady, Esq.,
and Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor,
serve as the Debtors' co-counsel.  The Debtors selected Epiq
Bankruptcy Solutions LLC as their voting and claims agent, and
Financial Balloting Group LLC as their securities voting agent.
The U.S. Trustee for Region 3 appointed creditors to serve on an
Official Committee of Unsecured Creditors in the Debtors' case.
In its schedules, Hines Horticulture, Inc. listed total assets of
$30,068 and total debts of $218,052,380.  In its schedules, Hines
Nurseries, Inc. listed total assets of $229,231,003 and total
debts of $228,698,592.


HPG INTERNATIONAL: Can Use $1.2 Million BofA Facility on Interim
----------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
authorized HPG International Inc. and VIG Holdings Ltd. to obtain,
on an interim basis, $1.2 million in postpetition financing from
Bank of America NA, successor by merger to LaSalle Business Credit
LLC.

A hearing is set for Feb. 18, 2009, at 12:00 p.m., to consider
final approval of the request.  Objections, if any are due
Feb. 11, 2009.

Troubled Company Reporter said on Jan 28, 2009, the proceeds of
the facility will enable the Debtors to execute an orderly
liquidation of their assets.

The facility will incur interest at Prime Rate plus 2.50% for all
loans with the exception of the $.7 million seller collateral term
loan which interest rate will remain at the Prime Rate provided no
event of default will occur under the DIP order.

The facility is expected to terminate by March 6, 2009.

The lender will be paid $100,000 postpetition financing fee under
the transaction.

The DIP facility is subject to carve-outs to pay any fees payable
to the clerk of the Court, and professionals retained by the
Debtors or any committee.

To secure their DIP obligations, the lender will receive a
superprioty administrative expense claim status over any and all
administrative expenses

The facility contains customary and appropriate events of default
including, among other things:

    i) order dismissing the Debtors' Chapter 11 cases or
       converting any of their cases;

   ii) appointment of a Chapter 11 trustee; and

  iii) failure to obtain final DIP order within 30 days after the
       Debtors' bankruptcy filing.

The lender and the Debtors are parties to a $26.84 million loan
and security agreement dated Jan. 11, 2006.  The lender
accelerated the Debtors' obligations and refused any further
funding when certain events of default under the agreement
occurred.

A full-text copy of the Loan and Security Agreement dated
Jan. 11, 2006, is available for free at:

               http://ResearchArchives.com/t/s?38a9

                      About HPG International

Headquartered in Mountaintop, Pennsylvania, HPG International Inc.
-- http://www.hpg-intl.com-- designs and make plastics PV sold
primarily to the fabricating industries throughout the United
States, Canada and Mexico for commercial use in roofs, pool,
liners, wallcoverings, label applications and shower panels.  The
company and its affiliate, VIG Holdings Ltd., filed for Chapter 11
protection on January 23, 2009 (Bankr. D. Del. Lead Case No. 09-
10231).  Jeffrey M. Carbino, Esq., Buchanan Ingersoll & Rooney PC,
represents the Debtors in their restructuring efforts.  The
Debtors proposed Kurtzman Carson Consultants LLC as their claims
agent.  When the Debtors filed for protection from their
creditors, they listed assets and debts between $10 million and
$50 million.


INERGY LP: Moody's Assigns 'B1' Rating on $200 Mil. Senior Notes
----------------------------------------------------------------
Moody's Investors Service assigned a B1 (LGD 4, 64%) rating to
Inergy, L.P.'s $200 million proposed senior unsecured notes
offering that will be used to pay down borrowings under the
company's senior secured revolving credit facility.

Simultaneously, Moody's affirmed NRGY's existing Ba3 Corporate
Family Rating, the Ba3 Probability of Default Rating, and the B1
(LGD 4) rating on the existing senior notes (though the point
estimate is changing from 67% to 64%), and the SGL-3 Speculative
Grade Liquidity rating.  The outlook remains stable.

The affirmation of the Ba3 CFR reflects the company's position as
the 5th largest distributor of propane in the U.S. and the
relative durability of the company's cash flows from that
business.  The Ba3 also reflects the increased business and
seasonal diversification from the company's growing natural gas
storage operations in the Northeastern U.S. and the stability of
the cash flow generated from that business.  Moody's expects that
after completing projects related to its US Salt acquisition and
the Thomas corners expansion, Inergy is poised to become one of
the largest natural gas storage providers in the Northeastern U.S.
When combined with the completion of the West Coast project, about
30% to 40% of NRGY's consolidated EBITDA is expected to be
generated from the more stable, largely fee-based midstream
segment.

The stable outlook assumes the company will continue to maintain,
if not improve its financial profile.  Leverage (adjusted
debt/EBITDA) had increased to approximately 4.1x after the US Salt
acquisition in August 2008, which is on the high end for the Ba3
CFR, but still within the range acceptable at the current ratings
level.  Given the amount of spending planned for its expansion
projects in FY 2009 and that NRGY intends to remain a consolidator
in the propane sector, Moody's expects leverage to remain at the
higher end for the Ba3 rating through 2009 barring any equity
issuances that could reduce debt sooner.  However, once completed,
these organic projects are expected to generate additional fee-
based EBITDA, which along with recent acquisitions could bring
run-rate leverage back to within the 3.5x range over the next 12
to 18 months assuming no new acquisitions.

The SGL-3 rating is supported by Moody's expectation that internal
cash flows will cover maintenance capital expenditures, interest
payments, working capital requirements, and cash distributions to
unit holders; the company will maintain sufficient cushion under
the facilities' covenants; and ample availability under the
revolving credit facilities.  The SGL-3 rating remains tempered by
the company's need to distribute all of its free cash flow to the
Master Limited Partnership unit holders which results in the need
for external funding to support its significant organic projects;
and the seasonality of the propane business which requires use of
the credit facilities during inventory build up and subsequent
receivable collections.  The credit facilities are secured by all
Inergy's assets leaving no alternate sources of readily available
liquidity.

Moody's last rating action for Inergy, L.P. dates from August 13,
2008, at which time Moody's affirmed the existing ratings and
changed the outlook to stable from positive.

NRGY, headquartered in Kansas City, Missouri, is a publicly traded
master limited partnership that owns and operates one of the
largest geographically diverse retail and wholesale propane
supply, marketing, and distribution businesses in the United
States.  Additionally, NRGY owns and operates a natural gas
storage facility located approximately 150 miles northwest of New
York City and a natural gas liquids business located near
Bakersfield, California.


INERGY LP: S&P Assigns Issue-Level Rating at 'B+'
-------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'B+'
issue-level rating to Inergy L.P.'s $200 million senior unsecured
notes due 2015, and at the same time, assigned its '5' recovery
rating to this debt.  The '5' recovery rating indicates that
lenders can expect modest (10%-30%) recovery in the event of a
payment default.  Standard & Poor's also affirmed Inergy's
corporate credit rating of 'BB-' and left unchanged its '5'
recovery rating on the company's unsecured debt.  The offering
proceeds will refinance debt on Inergy's revolving acquisition
credit facility.  The outlook remains stable.

As of Sept. 30, 2008, Inergy, a retail and wholesale propane
distributor and midstream energy company, had $1.1 billion of
debt.

The rating on Kansas City, Missouri-based Inergy reflects the
partnership's weak business risk profile and aggressive financial
profile.  Rating concerns include the propane business's exposure
to weather, seasonal demand patterns, customer conservation,
exposure to volatile commodity prices, the partnership's
aggressive growth strategy, and the master limited partnership
structure.

"These concerns are partially offset by the propane segment's high
percentage of residential customers in attractive markets,
improving per-gallon margins, and Inergy's growing midstream
business that provides more stable cash flows," said Standard &
Poor's credit analyst Michael Grande.

The stable outlook is based on S&P's expectation that Inergy can
maintain its operating performance over the next 12 to 18 months
as the midstream expansion provides incremental cash flow to
support its current financial metrics.  S&P could revise the
outlook to positive or raise the rating if sustained higher
propane margins, a disciplined acquisition strategy, and a growing
midstream business result in an FFO to debt ratio of 25% to 30%
and a total debt to EBITDA ratio of about 3.5x for several
quarters.  Standard & Poor's could lower the rating or revise the
outlook to negative if Inergy's capital spending program
experiences cost overruns that require additional debt, if there
is less than $100 million in available liquidity over the next
12 to 18 months, or if the propane and midstream businesses
underperform, resulting in FFO to debt in the mid-teens and debt
to EBITDA of above 4x for several quarters.


INTERSTATE BAKERIES: GE Capital Facility Reduced by $20 Million
---------------------------------------------------------------
Interstate Bakeries Corporation has reached an agreement in
principle with GE Capital Corp. on key terms for a revised asset-
based revolving credit financing facility.  The revisions include
reduction of the commitment amount by $20 million to $105 million.

Interstate Bakeries and its debtor-affiliates obtained October 3,
2008, the U.S. Bankruptcy Court for the Western District of
Missouri's approval of funding agreements which outlines the
capital structure for Reorganized IBC upon its emergence from
Chapter 11.

The funding agreements consist of:

* the ABL Facility -- a $125,000,000 asset-based senior
   secured revolving credit facility to be structured, arranged
   and syndicated by General Electric Capital Corporation and
   GE Capital Markets;

* the Term Loan Facility -- a term loan credit facility, by
   Silver Point Finance, LLC and Monarch Master Funding, Ltd.,
   which was increased to $344,000,000 from $339,000,000,
   pursuant to an agreement among the Debtors and the Commitment
   Parties on December 1, 2008; and

* the New Third Lien Term Loan Facility --a third priority
   secured term loan financing facility, under which Prepetition
   Lender Claimholders will receive Pro Rata share of the New
   Third Lien Term Loan in exchange for the Claims, which was
   decreased to $142,300,000 million from $147,300,000 under the
   December 2008 Agreement.

The Commitments contemplated Agreements that expire by their
terms on February 9, 2009.

In an official statement posted on IBC's Web site dated
January 26, 2009, Chief Executive Officer Craig D. Jung says that
the Debtors have reached an agreement in principle with the ABL
Commitment Parties to amend the key terms for a revised ABL
Facility.

"We are now working diligently with GE Capital and our other
financing providers to finalize all documentation for our exit
financing.  We are optimistic that we will emerge from Chapter 11
in the near future," Mr. Jung stated.

"Given today's challenging credit markets, our road to emergence
from Chapter 11 has been longer and more challenging than
anticipated, but we have now reached the final stretch," Mr. Jung
added.

Subsequently, the Debtors ask the Court to approve the Amended
ABL Facility.  The Debtors aver that the Amendments are
"necessary and appropriate," as part of their efforts to
consummate the transactions contemplated by their Amended New
Plan of Reorganization, which was confirmed on December 1, 2008.

Prior to the parties' agreement in principle, IBC confirmed on
January 13, 2009, that it was "engaged in productive discussions"
with the ABL Commitment Parties to further its attempts to emerge
from Chapter 11, maximize value for the Debtors' constituents,
and save more than 22,000 employees from losing their jobs.

                 Summary of Amended ABL Terms

The Debtors and the ABL Facility Commitment Parties have agreed
to amend certain terms of the ABL Facility to, among other
things, increase certain fees, increase the interest rate, and
decrease the aggregate amount of commitments under the Commitment
Letters.

The pertinent amendments to the terms of the ABL Facility, as
compared to the Court-approved terms are:

                   As Approved
  Term             by the Court              As Amended
  ----             ------------              ----------
Commitment         $125,000,000              $105,000,000
Amount

Expense            All reasonable            Fees and expenses of
Reimbursement      out-of-pocket fees        certain other
                   fees and expenses,        commitment parties
                   including single          may be payable
                   external legal counsel
                   for GE Capital
                   and GECM

Closing            Conditioned upon a        Based upon a
Availability       Borrowing Base            collateral audit
(Borrowing Base)   availability amount       conducted as of
                   of $90 million            9/20/08 which shows
                                             availability of
                                             $92.4 million; a
                                             subsequent "bring
                                             down" collateral
                                             audit will occur in
                                             the 30 days
                                             following closing
                                             which will provide
                                             the basis for the
                                             Borrowing Base on a
                                             go-forward basis;
                                             limited to $25
                                             million pending the
                                             earlier of (i)
                                             completion of the
                                             collateral audit or
                                             (ii) the 30th day
                                             following the
                                             closing date

Applicable         2.50% per annum, in       Increased by 50 bps
Margin             the case of Base
                   Rate Loans

                   3.50% per annum, in
                   the case of
                   Eurodollar Rate Loans

Unused             0.50% per annum           0.75% per annum
Commitment Fee

Pricing Flex       GE has the ability to     The Pricing Flex
                   increase the amount of    Language is to be
                   the commitment fee and    eliminated
                   certain other economic
                   terms in connection
                   with its syndication
                   efforts in order that
                   GE's total commitment
                   amount is equal to
                   $75 million or less

Fixed Charge       Tested when Borrowing     Tested when
Coverage Test      Availability is less      Borrowing
                   than 12.5% of the         Availability is
                   Borrowing Base            less than $25
                                             million and tested
                                             as to certain
                                             permitted
                                             investments,
                                             restricted payments
                                             and payments of
                                             other indebtedness
                                             if Borrowing
                                             Availability is less
                                             than $25 million and
                                             loans from the ABL
                                             Facility are going
                                             to be used

Collateral         The ABL Facility          Instead of a second
                   Lenders are to receive    priority lien and
                   a first priority lien     security interest
                   and security interest     on certain real
                   in accounts receivable    property located in
                   and their inventory       New York, the ABL
                   proceeds, subject to      Facility lenders
                   certain limited           will receive a first
                   exceptions, a second      priority lien and
                   priority lien and         security interest on
                   security interest in      certain real
                   the collateral that       property collateral
                   secures the obligations   that was previously
                   owed to the Term Loan     unencumbered; the
                   Facility Commitment       ABL Facility lenders
                   Parties                   will not receive a
                                             junior lien and
                                             security interest in
                                             certain cash
                                             deposited by the
                                             Debtors in order to
                                             cash collateralize
                                             outstanding letters
                                             of credit

According to J. Eric Ivester, Esq., at Skadden Arps Slate Meagher
& Flom LLP, in Chicago, Illinois, the Debtors have agreed to
increase the underwriting fee payable to the ABL Commitment
Parties.  At the Commitment Parties' request, the Underwriting
Fee will remain confidential, but will be disclosed to the Court
and, subject to applicable confidentiality agreements, the
Official Committee of Unsecured Creditors and the U.S. Trustee
upon their request.

In addition, certain other technical terms of the ABL Facility
will be amended including, among others, calculations of
availability, leverage ratios, mandatory prepayment provisions,
collateral and financial covenants, which will be discussed with
the Court or with the Creditors' Committee, the U.S. Trustee and
other parties-in-interest upon their request, and subject to
confidentiality agreements.

Mr. Ivester notes that the Debtors and the Original ABL Facility
Commitment Parties are currently discussing whether to execute
amendments to the ABL Facility Commitment Papers, as opposed to
merely executing definitive documents reflecting the foregoing
modifications.  In the event that amended ABL Facility Commitment
Papers are negotiated for execution, the Debtors will introduce
them into evidence or otherwise submit them at the hearing to
consider the Debtors' request.

Mr. Ivester adds that amendments to the Exit Financing Documents
-- including the ABL Facility -- do not constitute Plan
amendments.  Rather, he says, they are amendments to documents
implementing the Plan.  However, to the extent that the Court
finds that the modifications constitute an amendment to the Plan,
the Debtors seek relief to modify the Plan accordingly, pursuant
to Section 1127 of the Bankruptcy Code.

The Debtors also ask court to convene a hearing on January 29,
2009, to consider approval of their request.  The January 29
Hearing is imperative in order to afford the Debtors sufficient
time to close on the Plan Transactions in advance of (i) the
maturity date of the Debtors' current DIP Facility, and (ii) the
expiration of the commitments contemplated by the Commitment
Letters on February 9, 2009, Mr. Ivester tells the Court.

"While much work remains to be done to close our financing
transactions, we believe that our accord with GE Capital has
cleared the last significant obstacle to our emergence.
Negotiations with GE Capital over the past several days have been
constructive, and so I am optimistic we will have a timely
completion of this transaction," Mr. Jung added.

IBC, however, has cautioned that there can be no assurance that
its Exit Financing will close as expected.

Eric Palmer of The Kansas City Star notes that GE Capital has
faced some challenges of its own.  As credit markets have shrunk,
it has reduced its lending and even tapped some government
programs to refinance some of its own debt, Mr. Palmer says.

                  About Interstate Bakeries

Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh-baked
bread and sweet goods, under various national brand names,
including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and
Drake's(R).  Currently, IBC employs more than 25,000 people and
operates 45 bakeries, as well as approximately 800 distribution
centers and approximately 800 bakery outlets throughout the
country.

The company and eight of its subsidiaries and affiliates filed for
chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814).  J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts.  When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6% senior subordinated convertible notes due Aug. 15, 2014) in
total debts.

The Debtors first filed their Chapter 11 Plan and Disclosure
Statement on Nov. 5, 2007.  On Jan. 30, 2008, the Debtors received
court approval of the disclosure statement explaining their first
amended plan.  IBC did not receive any qualifying alternative
proposals for funding its plan in accordance with the court-
approved alternative proposal procedures.

The Debtors, on Oct. 4, 2008, filed another Plan, which
contemplates IBC's emergence from Chapter 11 as a stand-alone
company.  The filing of the Plan was made in connection with the
plan funding commitments, on Sept. 12, 2008, from an affiliate of
Ripplewood Holdings L.L.C. and from Silver Point Finance, LLC, and
Monarch Master Funding Ltd.

On December 5, 2008, the Bankruptcy Court confirmed IBC's Amended
New Joint Plan of Reorganization.  The plan was filed October 31,
2008.  The exit financings that form the basis for the Plan are
reflected in corresponding debt and equity commitments.


IRVINE SENSORS: Files Amendment to Annual Report
------------------------------------------------
Irvine Sensors Corporation filed with the Securities and Exchange
Commission on January 26, 2009, Amendment No. 1 to its Annual
Report for the fiscal year ended September 28, 2008.  The company
incorporated by reference Part III of its Initial Form 10-K from
the definitive Proxy Statement to be filed in connection with its
2009 Annual Stockholders' Meeting.

Part III includes information about directors, executive officers
and corporate governance; executive compensation; security
ownership of certain beneficial owners and management and related
stockholder matters; certain relationships and related
transactions, and director independence; and principal accountant
fees and services.

A full-text copy of Amendment No. 1 is available for free at:

               http://researcharchives.com/t/s?38d0

Irvine Sensors Corporation -- http:www.irvine-sensors.com --
headquartered in Costa Mesa, California, is a vision systems
company engaged in the development and sale of miniaturized
infrared and electro-optical cameras, image processors and stacked
chip assemblies and research and development related to high
density electronics, miniaturized sensors, optical interconnection
technology, high speed network security, image processing and low-
power analog and mixed-signal integrated circuits for diverse
systems applications.

As of September 28, 2008, the company's balance sheet showed total
assets of $22,884,000 and total liabilities of $31,343,200,
resulting in total stockholders' deficit of $8,459,200.

Grant Thornton LLP in Irvine, California, in a letter dated
January 9, 2009, pointed out that the company incurred net losses
of $21.6 million, $22.1 million, and $8.4 million for the years
ended September 28, 2008, September 30, 2007 and October 1, 2006,
respectively, and the company has a working capital deficit of
$16.1 million at September 28, 2008.  "These factors, among
others, raise substantial doubt about the company's ability to
continue as a going concern."

The Troubled Company Reporter reported on Jan. 21, 2009, that
Irvine Sensors Corporation received a written notice from
The Nasdaq Stock Market on January 14, 2009, indicating that the
company failed to comply with the minimum stockholders' equity,
market value and net income from continuing operations
requirements for continued listing set forth in Nasdaq Marketplace
Rule 4310(c)(3) because the company's stockholders' equity is
below the Nasdaq minimum stockholders' equity listing requirement
of $2,500,000, the market value of the company's listed securities
is below the Nasdaq minimum market value listing requirement of
$35,000,000 and the Company's net income from continuing
operations is below the Nasdaq minimum listing requirement of
$500,000 for the most recently completed fiscal year or two of the
three most recently completed fiscal years.


LANDMARK HOMES: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Landmark Homes and Development Inc.
        985 Damonte Parkway, Suite 300
        Reno, NV 89521

Bankruptcy Case No.: 09-50197

Type of Business: The Debtor is a homebuilder and developer.

Chapter 11 Petition Date: January 28, 2009

Court: District of Nevada (Reno)

Debtor's Counsel: John J. Dawson, Esq.
                  Quarles & Brady LLP
                  2 No. Central Avenue
                  Phoenix, AZ 85004
                  Tel: (602) 229-5200
                  Fax: (602) 229-5690
                  jdawson@quarles.com

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
   ------                      ---------------   ------------
Signature First LLC            trade debt        $491,315
PO Box 21441
Carson City, NV 89721
Tel: (775) 882-5500

Sommercal Construction         trade debt        $390,744
3690 33rd Avenue
Sacramento, CA 95824
Tel: (800) 520-0776

Peninsula Floors Inc.          trade debt        $370,928
PO Box 71
Livermore, CA 84551
Tel: (800) 326-1297

Sierra General Contractors     trade debt        $213,142

Engeo Incorporated             trade debt        $179,687

McDonald Carano Wilson         trade debt        $156,867

Artistic Fence                 trade debt        $154,726

Fleet Heating                  trade debt        $132,299

Leonard, Pete                  trade debt        $110,500

Express Plumbing               trade debt        $103,992

General Electric Company       trade debt        $83,777

Innerwest Advertising          trade debt        $67,007

Creative Touch Interiors       trade debt        $66,554

Reliable Framing               trade debt        $65,400

Padilla Construction           trade debt        $58,674

Environmental Protection       trade debt        $58,394

Door & Window Company          trade debt        $57,312

Paragon Civil Constructors     trade debt        $52,047
Inc.

Bawden, Catherine              trade debt        $51,800

Sierra Wes Drywall Inc.        trade debt        $51,598

The petition was signed by James F. Bawden, president.


LEAR CORP: Violates Loan Covenant; In Talks with Primary Lenders
----------------------------------------------------------------
Lear Corporation reports that during the fourth quarter of 2008,
it chose to borrow $1.2 billion under its primary credit facility
to protect against disruptions in the capital markets and to
further bolster its liquidity position.  The Company elected not
to repay the amounts borrowed at year end in light of continued
market and industry uncertainty.  As a result of this decision,
the Company is no longer in compliance with the leverage ratio
contained in its primary credit facility.

Lear has initiated discussions with the co-agents under its
primary credit facility to seek a long-term amendment.  The
discussions have been constructive and are continuing, according
to Lear.  Because the amendment will require support from lenders
holding a majority of outstanding commitments and borrowings under
the primary credit facility, the Company intends to pursue
discussions with a broader lender group before finalizing the
amendment proposal and launching the formal amendment process.  If
the Company is unable to obtain an amendment, upon a majority vote
of the lenders under the primary credit facility, the lenders
would have the right to exercise all remedies thereunder, which
would have a material adverse effect on the Company's financial
position.

Based in Southfield, Michigan, Lear Corp. is a global automotive
supplier, conducting business in two product operating segments:
seating and electrical and electronic.  The seating segment
includes seat systems and the components. The electrical and
electronic segment includes electrical distribution systems and
electronic products, primarily wire harnesses, junction boxes,
terminals and connectors, various electronic control modules, as
well as audio sound systems and in-vehicle television and video
entertainment systems. The assembly process with respect to the
electrical and electronic segment is performed in low-cost labor
sites in Mexico, Honduras, the Philippines, Eastern Europe and
Northern Africa.  Lear has divested substantially all of the
assets of its interior segment, which included instrument panels
and cockpit systems, headliners and overhead systems, door panels,
flooring and acoustic systems and other interior products.

As reported by the Troubled Company Reporter on Jan. 9, 2009,
Moody's Investors Service lowered the Corporate Family and
Probability of Default ratings of Lear Corporation, to Caa2 from
B3.  In a related action, the rating of the senior secured term
loan was lowered to Caa1 from B2, and the rating on the senior
unsecured notes was lowered to Caa2 from B3.  The ratings remain
on review for further possible downgrade.

According to the TCR on Jan. 15, 2009, Standard & Poor's Ratings
Services said it lowered its corporate credit rating on
Southfield, Michigan-based Lear Corp. to 'B-' from 'B'.  At the
same time, S&P also lowered its issue-level ratings on the
company's debt.  The ratings remain on CreditWatch, where they had
been placed with negative implications on Nov. 13, 2008.


LEAR CORP: Posts $689.9 Million Net Loss for Full-Year 2008
-----------------------------------------------------------
Lear Corporation reported preliminary financial results for the
fourth quarter and full year of 2008.  Lear reported a net loss of
$689.9 million, including the non-cash goodwill impairment charge
and restructuring costs, for the full-year 2008.  This compares
with net income of $241.5 million for the full-year 2007.  Free
cash flow in 2008 was negative $70.7 million as compared with free
cash flow of $433.6 million in 2007.  The decline primarily
reflects lower earnings and higher cash costs for restructuring.

For the full year 2008, Lear reported net sales of $13.6 billion
and a pretax loss of $604.1 million, driven largely by a non-cash
goodwill impairment charge of $530.0 million and restructuring
costs of $193.9 million.  Core operating earnings were
$418.4 million for the full year 2008.  This compares with net
sales of $16.0 billion, pretax income of $331.4 million and core
operating earnings of $748.5 million in 2007.

For the fourth quarter of 2008, Lear reported net sales of $2.6
billion and a pretax loss of $692.1 million, driven largely by a
non-cash goodwill impairment charge of $530.0 million and
restructuring costs of $66.2 million.  Income before interest,
other (income) expense, income taxes, restructuring costs and
other special items (core operating earnings) was $22.0 million in
the fourth quarter of 2008.  This compares with net sales of $3.9
billion, pretax income of $45.1 million and core operating
earnings of $178.6 million in the fourth quarter of 2007.

Lear says net loss was $688.2 million, including the non-cash
goodwill impairment charge and restructuring costs, for the fourth
quarter of 2008.  This compares with net income of $27.0 million
in the year earlier quarter.  In the fourth quarter of 2008, free
cash flow was negative $38.3 million, as compared with free cash
flow of $170.9 million in the fourth quarter of 2007.  The decline
in free cash flow compared with a year ago primarily reflects
lower earnings.

Lear says the production environment in the fourth quarter was
extremely challenging due to significantly lower production
volumes globally.  In North America, industry production compared
with a year ago was down 26%, the Domestic Three were down 30%,
and Lear's top 15 platforms were down 26%.  In Europe, industry
production was down 29%, and its top five customers were down 31%.
Globally, automotive production was down 21%.

"These sharp declines in automotive production in North America
and globally dramatically impacted our financial results in the
fourth quarter," said Bob Rossiter, Lear's chairman, chief
executive officer and president. "We have been aggressively
restructuring our global operations in response to changing
business conditions. Lear's strategy to manage through the
downturn is to accelerate and expand global restructuring and cost
reduction efforts, to narrow our investment focus to minimize cash
burn and to continue to provide our customers with superior
value."

For the year, Lear continued to make progress on its strategic
priorities, including further diversification of its global sales,
business development in emerging markets and the implementation of
an operating improvement plan for the electrical and electronic
segment.  Approximately two-thirds of Lear's 2008 net sales were
generated outside of North America.  In addition, Lear continues
to improve quality and win new business globally.  Lear's business
backlog for the 2009 to 2011 period currently stands at $1.1
billion, with 60% in the seating segment and 40% in the electrical
and electronic segment, including recent awards on the Chevy Volt
and several other new hybrid models.

In terms of liquidity, the Company had approximately $1.6 billion
in cash and cash equivalents as of December 31, 2008, providing
more than adequate resources to satisfy ordinary course business
obligations.  Lear had $6.8 billion in total assets, and
$3.5 billion in reported debt as of December 31, 2008.

Based in Southfield, Michigan, Lear Corp. is a global automotive
supplier, conducting business in two product operating segments:
seating and electrical and electronic.  The seating segment
includes seat systems and the components. The electrical and
electronic segment includes electrical distribution systems and
electronic products, primarily wire harnesses, junction boxes,
terminals and connectors, various electronic control modules, as
well as audio sound systems and in-vehicle television and video
entertainment systems. The assembly process with respect to the
electrical and electronic segment is performed in low-cost labor
sites in Mexico, Honduras, the Philippines, Eastern Europe and
Northern Africa.  Lear has divested substantially all of the
assets of its interior segment, which included instrument panels
and cockpit systems, headliners and overhead systems, door panels,
flooring and acoustic systems and other interior products.

As reported by the Troubled Company Reporter on Jan. 9, 2009,
Moody's Investors Service lowered the Corporate Family and
Probability of Default ratings of Lear Corporation, to Caa2 from
B3.  In a related action, the rating of the senior secured term
loan was lowered to Caa1 from B2, and the rating on the senior
unsecured notes was lowered to Caa2 from B3.  The ratings remain
on review for further possible downgrade.

According to the TCR on Jan. 15, 2009, Standard & Poor's Ratings
Services said it lowered its corporate credit rating on
Southfield, Michigan-based Lear Corp. to 'B-' from 'B'.  At the
same time, S&P also lowered its issue-level ratings on the
company's debt.  The ratings remain on CreditWatch, where they had
been placed with negative implications on Nov. 13, 2008.


LEHMAN BROTHERS: Examiner Anton Valukas Begins Investigation
------------------------------------------------------------
Anton Valukas, the examiner appointed by the U.S. Bankruptcy Court
for the Southern District of New York in Lehman Brothers Holdings
Inc.'s case, has started its probe on Lehman.

Mr. Valukas said he sought advice from the examiners in other
large bankruptcies including WorldCom Inc. and Refco Inc. about
conducting the investigation.

According to Bloomberg News, Mr. Valukas told Judge James Peck he
contacted Barclays Plc, which bought Lehman's North American
brokerage business, Lehman Brothers Inc., in September.

Mr. Valukas said he worked out an agreement to share information
with the U.S. Attorney's Office in Manhattan and the Securities
Investor Protection Corp. trustee James Giddens.

Judge Peck has said all the various entities probing Lehman need
to coordinate and share information to avoid duplicate efforts
and higher fees that would hurt creditors' returns.

As reported by the Troubled Company Reporter on Jan. 21, 2009,
former federal prosecutor Anton Valukas of the firm Jenner & Block
LLP has been selected by Diana J. Adams, the United States Trustee
for Region 2, to lead an independent investigation of the events
leading to Lehman Brothers Holdings Inc.'s collapse and the claims
creditors owed more than $613 billion may pursue.

The U.S. Trustee named an examiner at the direction of the U.S.
Bankruptcy Court for the Southern District of New York.  The Court
has approved the U.S. Trustee's selection.

The Walt Disney Company in October 2008 filed a request for an
appointment of an examiner who will, among other things,
investigate pre-bankruptcy transactions between Lehman Brothers
Holdings Inc., and its affiliates.  After negotiations, Lehman
Brothers reached an agreement with Walt Disney regarding an
examiner's appointment and the scope of the trustee's
investigation.

Alvarez & Marsal, which oversees Lehman's wind-down proceedings,
slammed New York State Comptroller Thomas DiNapoli's call for the
replacement of Lehman Brothers Holdings' board of directors and
Richard Fuld Jr., chairman and former chief executive officer, by
a trustee.  Alvarez & Marsal said that, contrary to the
Comptroller's accusations, Lehman was a victim of a financial
tsunami that was beyond its control and that Lehman executives
took appropriate action to strengthen Lehman's financial
conditions before its bankruptcy filing in Sept. 2008.

"The Lehman case needs sunshine from an independent and
learned voice," said Martin Bienenstock, counsel to Walt Disney,
Bloomberg News reported.  "We are thrilled the U.S. Trustee moved
so quickly and proposed a great lawyer from a great firm to serve
as examiner."

Mr. Valukas is the chairman of the Illinois-based Jenner & Block
LLP and a partner in Jenner & Block's litigation department.
"Throughout my legal career of over 40 years, I have led numerous
investigations of Fortune 500 companies and large international
corporations involving potential financial misconduct, accounting
irregularities, ethical issues, and alleged corporate fraud." He
also held several positions with the United States Department of
Justice, including United States Attorney for the Northern
District of Illinois (1985-1989), First Assistant United States
Attorney (1975-1976), Chief of Special Prosecutions Division
(1974), and Assistant United States Attorney (1970-1974).

Judge James Peck said that an examiner will instill "confidence
and trust" among those involved in Lehman's bankruptcy case.
He rules that the Examiner's duties will include an investigation
as to:

  (1) Whether Lehman Brothers Commercial Corporation or any
      other entity that currently is an LBHI Chapter 11 debtor
      subsidiary or affiliate has any administrative claims
      against LBHI resulting from LBHI's cash sweeps of cash
      balances, if any, from September 15, 2008, through the
      date that that LBHI affiliate commenced its Chapter 11
      case.

  (2) All voluntary and involuntary transfers to, and
      transactions with, affiliates, insiders and creditors of
      LBCC or its affiliates, in respect of foreign exchange
      transactions and other assets that were in the possession
      or control of LBHI Affiliates at any time commencing on
      September 15, 2008, through the day that each LBHI
      Affiliate commenced its Chapter 11 case.

  (3) Whether any LBHI Affiliate has colorable claims against
      LBHI for potentially insider preferences arising under the
      Bankruptcy Code or state law.

  (4) Whether any LBHI Affiliate has colorable claims against
      LBHI or any other entities for potentially voidable
      transfers or incurrences of debt, under the Bankruptcy
      Code or otherwise applicable law.

  (5) Whether there are more colorable claims for breach of
      fiduciary duties and aiding or abetting any breaches
      against the officers and directors of LBCC and other
      Debtors arising in connection with the financial condition
      of the Lehman enterprise prior to LBHI's Petition Date.

  (6) Whether assets of any LBHI Affiliates, other than Lehman
      Brothers, Inc., were transferred to Barclays Capital Inc.
      as a result of the sale to Barclays Capital Inc. that was
      approved by a Court order, and whether consequences to
      any LBHI Affiliate as a result of the consummation of the
      transaction created colorable causes of action that inure
      to the benefit of the creditors of that LBHI subsidiary or
      affiliate.

  (7) The inter-company accounts and transfers among LBHI and
      its direct and indirect subsidiaries, including but not
      limited to LBI, LBIE, Lehman Brothers Special Finance and
      LBCC, during the 30-day period preceding the commencement
      of the Chapter 11 cases by each debtor on September 15,
      2008, or thereafter as the Examiner deems relevant to the
      Investigation.

  (8) The transactions and transfers, including but not limited
      to the pledging or granting of collateral security
      interest among the debtors and the prepetition lenders and
      financial participants including but not limited to,
      JPMorgan Chase, Citigroup, Inc., Bank of America, the
      Federal Reserve Bank of New York and others.

  (9) The transfer of the capital stock of certain subsidiaries
      of LBI on or about September 19, 2008, to Lehman ALI Inc.

(10) The events that occurred from September 4, 2008, through
      September 15, 2008 or prior thereto that may have resulted
      in commencement of the LBHI chapter 11 case.

                      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)


LEHMAN BROTHERS: Replaced As Admin. Agent Under Jarden Facility
---------------------------------------------------------------
Jarden Corporation has reached an agreement to settle all of its
outstanding claims against Lehman Brothers related to the
bankruptcy of Lehman and related entities and the subsequent
defaults of Lehman Commercial Paper Inc., an affiliate of Lehman
Brothers, as agent and revolving lender under Jarden's Senior
Credit Facility.

As part of the settlement, Jarden completed an amendment to the
credit facility to replace Lehman Commercial Paper Inc. with
Deutsche Bank AG New York Branch as Administrative Agent.
Additionally, Deutsche Bank will replace Lehman in all of its
other administrative capacities under the credit facility.

The settlement and amendment include repayment of Lehman's
outstanding revolving credit loans to Jarden in an amount mutually
agreed upon by Lehman and Jarden, termination of Lehman's
commitment to make additional loans, and a mutual release of all
claims related to the credit agreement and certain defaults by an
affiliate of Lehman. The settlement has been approved by the
Bankruptcy Court overseeing Lehman's bankruptcy filing.  Lehman
accounted for less than 10% of the Company's total availability
under its revolving credit facility.

Martin E. Franklin, Chairman and Chief Executive Officer of Jarden
Corporation said, "We are happy to put the distraction of Lehman's
bankruptcy behind us and we look forward to our new expanded
relationship with Deutsche Bank. In this tough economic
environment it is a satisfying reflection on Jarden's strength and
steadiness that we received unanimous approval for the bank
amendment from participants in our revolving credit facility.
Jarden's liquidity position continues to be strong, and we remain
focused on maintaining a conservative fiscal position while
executing our long-term growth strategy."

As previously announced, Jarden expects to report its fourth
quarter and year-end results as scheduled for February 12, 2009,
and plans to discuss its longer-term growth strategy at its
analyst and investor day at the NYSE on March 3, 2009.

Jarden Corp. -- http://www.jarden.com-- operates in three primary
business segments through a number of well recognized brands,
including: Outdoor Solutions: Abu Garcia(R), Berkley(R),
Campingaz(R) and Coleman(R), Fenwick(R), Gulp!(R), JT(R), K2(R),
Marker(R), Marmot(R), Mitchell(R), Penn(R), Rawlings(R),
Shakespeare(R), Stearns(R), Stren(R), Trilene(R) and Volkl(R);
Consumer Solutions: Bionaire(R), Crock-Pot(R), FoodSaver(R),
Health o meter(R), Holmes(R), Mr. Coffee(R), Oster(R), Patton(R),
Rival(R), Seal-a-Meal(R), Sunbeam(R), VillaWare(R) and White
Mountain(R); and Branded Consumables: Ball(R), Bee(R), Bicycle(R),
Crawford(R), Diamond(R), Dicon(R), First Alert(R), Forster(R),
Hoyle(R), Kerr(R), Lehigh(R), Leslie-Locke(R), Loew Cornell(R) and
Pine Mountain(R). Headquartered in Rye, N.Y., Jarden has over
25,000 employees worldwide.

                Harmonic & XCel Disclose Exposure

SunnyVale, California-based Harmonic Inc. disclosed that it has
incurred a charge as a result of the fair value of the Company's
investment in the unsecured debt of Lehman Brothers Holdings,
Inc., being substantially reduced because of the bankruptcy of the
issuer.  As a result, the Company recorded an $845,000 "other-
than-temporary" impairment charge to reduce the carrying value of
this investment.  This impairment charge has been excluded from
Harmonic's non-GAAP net income because Harmonic expects the
impairment charge to be a non-recurring item.  Harmonic believes
that its inclusion in the calculation of non-GAAP net income would
not provide a meaningful comparison of current versus prior net
income.  Harmonic provides broadcast and on-demand video delivery
solutions.

Minneapolis, Minnesota-based Xcel Energy Inc. said commitments
under its credit facilities have been reduced by $73 million as a
result of the Lehman Brothers bankruptcy.  Xcel Energy has
$2.1 billion in total commitments.

                      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)


MATHIS PARTNERS: Bankruptcy Case Dismissed; FDIC Assumes Loan
-------------------------------------------------------------
Comstock Homebuilding Companies, Inc., says the bankruptcy filing
of its Mathis Partners, LLC subsidiary in Atlanta, Georgia, has
been dismissed.  At this time, Mathis Partners has retained
ownership of its sole asset, the Gates at Luberon property in
Forsyth County, Georgia.  Haven Trust Bank of Georgia, the lender
to Mathis Partners related to the Gates at Luberon project was
closed by the Federal Deposit Insurance Corporation in December
2008.  The loan is now owned by the FDIC.  The Company is awaiting
information from the FDIC regarding its intended handling of the
loan.

                    About Comstock Homebuilding

Based in Reston, Viginia, Comstock Homebuilding Companies, Inc.
(NasdaqGM: CHCI) -- http://www.comstockhomebuilding.com--
develops, builds and markets single-family homes, townhouses and
condominiums in the Washington D.C., Raleigh, North Carolina and
Atlanta, Georgia metropolitan markets.  The company also provides
certain management and administrative support services to certain
related parties.

                          *     *     *

As reported in the Troubled Company Reporter on April 3, 2008,
PricewaterhouseCoopers LLP raised substantial doubt about the
ability of Comstock Homebuilding Companies, 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 stated that
the company has experienced declining market conditions and has
significant debt maturing during 2008.

The Troubled Company Reporter said on July 11, 2008, that Comstock
has retained FTI Consulting Inc. as advisor to the company with
respect to strategic and financial alternatives in the face of a
prolonged real estate downturn.

On January 29, 2009, Comstock Homebuilding Companies, Inc. and
Comstock Penderbrook, L.C., a wholly owned subsidiary of the
Company, entered into a forbearance agreement with Guggenheim
Corporate Funding with respect to the $13.5 million outstanding
under the company's secured Penderbrook project loan.  The company
had receive a notice of default from Guggenheim on
August 22, 2008.  In connection with the forbearance agreement the
original maturity date of the loan was extended from
February 22, 2010 to March 6, 2011.  The terms of the forbearance
agreement provide for additional incremental extensions until
March 6, 2012, provided certain unit delivery requirement
thresholds are met.

                       About Mathis Partners

Reston, Virgina-based Mathis Partners, LLC --
http://www.comstockhomebuilding.com/-- is a single purpose
limited liability company that is a wholly owned subsidiary of
Comstock Homebuilding Cos., Inc.  It was formed by Parker Chandler
Homes, Inc. to develop the Gates of Luberon residential
development project in Forstyth County, Georgia, with Haven Trust
as its lender.

It filed its chapter 11 petition on March 31, 2008 (Bankr. N.D.
Ga. Case No. 08-65876).  Judge Margaret Murphy presides over the
case.  Paul Reece Marr, Esq., at Paul Reece Marr, PC, represents
the Debtor in its restructuring efforts.  The Debtor estimated
both its assets and debts to be between $1 million and
$10 million.


MERISANT WORLDWIDE: Taps Blackstone as Financial Advisor
--------------------------------------------------------
Merisant Worldwide Inc. and its debtor-affiliates ask the
United States Bankruptcy Court for the District of Delaware for
permission to employ Blackstone Advisory Services LP as their
financial advisor.

The firm will:

   a) assist in the evaluation of the Debtors' businesses and
      prospects;

   b) assist in the development of the Debtors' long-term
      business plan and related financial projections;

   c) assist in the development of financial data and
      presentations to the Debtors' Board of Directors, various
      creditors and other third parties;

   d) analyze the Debtors' financial liquidity and evaluate
      alternatives to improve such liquidity;

   e) analyze various restructuring scenarios and the potential
      impact of these scenarios on the recoveries of those
      stakeholders impacted by the Restructuring;

   f) provide strategic advice with regard to restructuring or
      refinancing the Debtors' Obligations;

   g) evaluate the Debtors' debt capacity and alternative capital
      structures;

   h) participate in negotiations among the Debtors and its
      creditors, suppliers, lessors and other interested parties;

   i) provide strategic advice and participate in discussions
      regarding the Debtors' communication plan and strategy
      with its creditors, suppliers, lessors and other interested
      parties;

   j) value securities offered by the Debtors in connection with
      a restructuring;

   k) advise the Debtors and negotiate with lenders with respect
      to potential waivers or amendments of various credit
      facilities;

   1) assist in arranging equity financing, DIP Financing and
      Exit Financing, each as requested;

   m) provide expert witness testimony concerning any of the
      subjects encompassed by the other financial advisory
      services; and

   n) provide such other advisory services as are customarily
      provided in connection with the analysis and negotiation of
      a restructuring, as requested and mutually agreed.

The firm will receive (i) a $175,000 advisory fee per month
payable by the Debtors in advance on the third day of each month;
(ii) $4,500,000 restructuring fee payable upon the consummation of
the restructuring; (iii) A debt financing fee equal to 1% of any
debt-related DIP and exit financing payable upon consummation of
such facility; however, such fee will be 100% creditable against
the restructuring fee; and (iv) an equity financing fee equal to
5% of the gross proceeds received from an equity financing
pursuant to an exit financing, payable upon consummation; however,
such fee will be 100% creditable against the Restructuring Fee;

In addition, the firm will credit against the restructuring fee:
50% of the monthly fees paid in excess of $875,000; Provided that
the monthly fee credit will not exceed the restructuring fee.

Nicholas P. Leone, senior managing director at the firm, assures
the Court that the firm does not hold any interest adverse to the
Debtors' estate and is a "disinterested person" as defined in
Section 101(14) of the Bankruptcy Code.

                     About Merisant Worldwide

Headquartered in Chicago, Illinois, Merisant Worldwide Inc. --
http://www.merisant.com/-- sell low-calorie tabletop sweetener.
The Debtor's brands are Equal(R) and Canderel(R).  The Debtor has
principal regional offices in Mexico City, Mexico; Neuchatel,
Switzerland; Paris, France; and Singapore.   In addition, the
Debtor owns and operates manufacturing facilities in Manteno,
Illinois, and Zarate, Argentina, and own processing lines that are
operated exclusively for the Debtor at plants located in Bergisch
and Stendal, Germany and Bangkrason, Thailand.

As of March 28, 2008, the Debtor has 20 active direct and indirect
subsidiaries, including five subsidiaries in the United States,
six subsidiaries in Europe, five subsidiaries in Mexico, Central
America and South America, and three subsidiaries in the Asia
Pacific region, including Australia and India.  Furthermore, the
Debtor's Swiss subsidiary holds a 50% interest in a joint
venture in the Philippines.

Merisant Worldwide holds 100% interest in Merisant Company.

The company and five of its units filed for Chapter 11 protection
on January 9, 2009 (Bankr. D. Del. Lead Case No. 09-10059).
Sidley Austin LLP represents the Debtors' in their restructuring
efforts.  The Debtors proposed Young, Conaway, Stargatt & Taylor
LLP as their Delaware counsel; Blackstone Advisory Services LLP as
financial advisor; and Epiq Bankruptcy Solutions LLC as claims
agent.  The Debtors have $331,077,041 in total assets and and
560,742,486 in total debts as of Nov. 30, 2008.


MERRILL CORPORATION: S&P Affirms 'B' Corporate Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Merrill Corporation and removed it from
CreditWatch, where it was placed with negative implications
June 27, 2008.  The rating outlook is negative.

In addition, S&P lowered the issue-level rating on the company's
senior secured credit facility to 'B' (at the same level as the
corporate credit rating) from 'B+'.  The recovery rating on the
facility was revised to '3', indicating S&P's expectation of
meaningful (50% to 70%) recovery for lenders in the event of a
payment default, from '2'.

The issue-level rating on the company's second-lien term loan
remains unchanged at 'CCC+' (two notches lower than the corporate
credit rating) with a recovery rating of '6', indicating S&P's
expectation for negligible (0% to 10%) recovery in the event of a
payment default.  (For the complete recovery analysis, see
Standard & Poor's recovery report on Merrill, to be published on
RatingsDirect immediately following the release of this report.)

The issue-level ratings on the credit facilities were also removed
from CreditWatch, in conjunction with the removal of the corporate
credit rating.

"The affirmation of the 'B' corporate credit rating recognizes the
company's surplus cash and ability to continue to generate
discretionary cash flow despite the difficult operating conditions
affecting many of Merrill's business segments, particularly
financial print and the consumer segment of its Marketing and
Communication Solutions business," said Standard & Poor's credit
analyst Michael Listner.  "We expect the surplus cash to provide
flexibility during the challenging operating environment."

Initially, S&P anticipate that part of the cash will be used to
repurchase a portion of Merrill's first-lien term loan at a
discount to par, as allowed per an amendment to its credit
facilities that was executed on Jan. 23, 2009.  The terms of the
amendment allow for total repurchases throughout fiscal 2010
(ending Jan. 31, 2010) of up to $125 million, and require that
cash on the balance sheet be used as the source of funds.

On Jan. 27, Merrill completed a tender offer for a repurchase
amount of $40 million of the first-lien term loan.  Although the
transaction occurred at a discount to par value, S&P views this
tender offer as opportunistic for the company since challenging
operating and credit market conditions have contributed to the
heavily discounted trading range for Merrill's first-lien term
loan.  S&P expects that the willingness of term loan investors to
accept the offer largely relates to their own investment
strategies and/or liquidity needs.  Standard & Poor's also
anticipates that Merrill will generate about $50 million to
$60 million in discretionary cash flow in fiscal 2009.  Thus, had
the tender been unsuccessful, Merrill would have had sufficient
liquidity to fund its fixed charges over the intermediate term.

Despite its excess cash balances and the repurchase of a portion
of its first-lien term debt through a below-par tender offer,
Standard & Poor's expects that Merrill is at risk of violating the
leverage covenant under this facility during fiscal 2010, possibly
as soon as the quarter ended April 30, 2009.  Merrill's first-lien
leverage covenant is calculated on a net debt basis, thus the
calculation already incorporates the company's excess cash
position.  The tender offer, therefore, will only improve the
company's position relative to this covenant to the extent of any
discount received through the tender process.  For the quarter
ended Oct. 31, 2008, total leverage based on the bank's
calculation of this measure was approximately one-half turn below
the covenant requirement.  The covenant threshold steps down by
0.25x for the quarter ending January 2009, and then again by
another 0.25x for the quarter ending July 2009.  As Standard &
Poor's expects Merrill to experience up to a mid- to high-teens
percentage decline in EBITDA in 2009, S&P believes the company has
limited cushion under this covenant.

As Merrill continues to have ample liquidity (from internally
generated sources) to service its obligations, S&P believes that
lenders would be amenable to amending covenants, although the
resulting increase to pricing would likely be significant.  S&P
currently expects that EBITDA coverage of interest expense will be
in the low-2x area for the 12 months ended Jan. 31, 2009.  Pro
forma for a mid- to high-teens percentage decline in EBITDA,
considering S&P's estimate for a re-pricing of the company's debt,
and assuming the existing tender offer is successful at a modest
discount to par, S&P expects interest coverage to fall to about
1.5x for the fiscal year ending Jan. 31, 2010.

Under this scenario, the company would continue to have excess
cash, likely in the $30 million to $40 million range, although the
cash could be a subject for negotiation with lenders in the event
of a covenant violation.  S&P expects the company's cash position
and ability to continue to generate discretionary cash flow --
even if higher pricing is assumed under the bank facilities --
will provide Merrill with the flexibility to manage the difficult
operating environment anticipated in fiscal 2010.


MIDLAND FOOD: Reports Dec. Profit, Asks for More Time for Plan
--------------------------------------------------------------
Midland Food Services LLC asks the U.S. Bankruptcy Court for the
District of Delaware to extend until June 2, 2009, its exclusive
period to file a Chapter 11 plan.

According to Bloomberg's Bill Rochelle, Midland says it's still
analyzing which stores to continue and which to close.

Bloomberg adds that Midland has recently submitted to the
bankruptcy court an operating report, disclosing net income of
$2.8 million for four weeks ended Dec. 22.

                         About Midland Food

Independence, Ohio-based Midland Food Services, L.L.C. is a Pizza
Hut franchisee.  Midland Food filed for Chapter 11 bankruptcy
before the United States Bankruptcy Court for the District of
Delaware on August 6, 2008 (Bankr. D. Del. 08-11802).  Tara L.
Lattomus, Esq., at Eckert Seamans Cherin & Melot, L.L.C.,
represented the Debtor in their restructuring efforts.

The Debtor first filed for Chapter 11 in October 2000. It emerged
from bankruptcy one year later on Aug. 7, 2001.


MODAVOX INC: Posts $1.2MM Net Loss in Nine Months Ended Nov. 30
---------------------------------------------------------------
Modavox Inc. disclosed in a regulatory filing with the Securities
and Exchange Commission its financial results for three and nine
months ended Nov. 30, 2008.

For three months ended Nov. 30, 2008, the company posted a net
loss of $634,963 compared with a net loss of $470,389 for the same
period in the previous year.

For nine months ended Nov. 30, 2008, the company posted a net loss
of $1,284,295 compared with a net loss of $650,207 for the same
period in the previous year.

                 Liquidity and Capital Resources

During the nine months ended Nov. 30, 2008, cash generated from
revenues was not adequate to pay the company's operating expenses,
fund research & development, and fund the Avalar, Inc. Asset
Purchase.

During the nine months ended Nov. 30, 2008, the company raised
$1,265,882 through the issuance of common stock.  These proceeds
were used in part, to provide payment to non-operational
activities such as the investigation of the former chief
executive officer & chairman, fund out patent strategies, increase
its product offering through the acquisition of the Avalar assets,
and resolve legal matters.  As of Nov. 30, 2008, Modavox has no
outstanding debt other than the related party note payable of
$17,069, has paid off the outstanding bank note, and intends to
close the credit line opened by former management in 2003.

The company believed that its required capital expenditures for
fiscal year 2009 will exceed $500,000.

While the company is making progress in achieving sustainable
positive cash flow, the future growth of the company and negative
cash flow until sustainable positive cash flow is achieved may
require that the company raise additional capital.

At Nov. 30, 2008, the company's balance sheet showed total assets
of $6,446,155, total liabilities of $1,715,169 and stockholders'
equity of $4,730,986.

A full-text copy of the 10-Q is available for free at:

               http://ResearchArchives.com/t/s?38bf

                        About Modavox Inc.

Modavox Inc. (OTC BB: MDVX.OB) -- http://www.modavox.com/--
offers Internet broadcasting and produces and syndicates online
audio and video.  It also offers innovative, effective and
comprehensive online tools for reaching targeted niche communities
worldwide.  Through patented Modavox technology, Modavox delivers
content straight to desktops and Internet-enabled devices.
Modavox provides managed access for live and on-demand Internet
Radio Broadcasting, E-learning and Rich Media Advertising.

                      Going Concern Doubt

Houston-based Malone & Bailey, PC, expressed substantial doubt
about Modavox Inc.'s ability to continue as a going concern after
auditing the company's consolidated financial statements for the
year ended Feb. 29, 2008.  The auditor pointed the company's
recurring losses.

Modavox believes that additional losses may be incurred as it
develops and executes a sales and distribution strategy for its
products and expands the number of sales locations.  These
potential losses and capital expenditures needed for Modavox to
expand its sales locations and fund increases in revenue will
likely require Modavox to raise additional capital through the
issuance of equity or debt.


MORTGAGES LTD: DS Hearing on Investors Committee Plan Set March 4
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona has
scheduled a March 4, 2009 hearing to consider the approval of the
disclosure statement explaining the Plan of Reorganization of the
Official Committee of Investors in Mortgage Ltd.'s Chapter 11
bankruptcy cases.

The Debtor filed several motions to extend exclusivity beyond the
original date of Oct. 24, 2007.  Radical Bunny LLC ("RBLLC") and
the Investors Committee filed a motion to end exclusivity and to
be allowed to file their own joint plan.  On Jan. 6, 2008, the
Court denied any further extensions of exclusivity and ended the
Debtor's exclusive right to file a Plan.

                          Plan Overview

Pursuant to the Plan, a Liquidating Trust is to be established to
which all the Debtor's Non-Loan Assets shall be transferred as of
the Effective Date.  The Liquidating Trustee will be tasked with
selling the Debtor's real estate and collecting two note
receivables previously owned by the Debtor which have been
transferred to the Liquidating Trust.  The Liquidating Trustee
will also be tasked with pursuing all of the Debtor's Causes of
Action and Avoidance Actions against third parties.

Distributions to General Unsecured Creditors, Radical Bunny LLC
("RBLLC"), MP Funds and Investors to the extent of their Investors
Damages and other holders of Unsecured Claims will be made by the
Liquidating Trust out of the Liquidation Fund in accordance with
the terms of the Plan and the Liquidating Trust Agreement.
Sufficient reserves shall be established to protect the Investor
Damage Claims for the MP Funds and the Pass-Through Investors and
for RBLLC's Claim, which are likely to be contingent and
unliquidated for a period of time.

General Unsecured Creditors who choose to participate in the
Liquidating Trust will waive their right to pursue and will be
estopped from pursuing the same targets of Causes of Action and
Avoidance Actions as the Liquidating Trust.

The net proceeds of any and all sales or refinancing of the Non-
Loan Assets collected by the Liqudating Trust shall, after payment
of the Secured Claims related thereto, be placed by the
Liquidating Trustee in the Liquidating Fund for payment of the
Administrative Expense Claims or Priority Non-Tax Claims, and
Unsecured Claims as provided by the Plan.  Recoveries from the
Avoidance Actions and Causes of Action shall also be placed by the
Liquidating Trustee in the Liquidation Fund for payment of the
Unsecured Claims as provided by the Plan.

A Trust Board shall be established on the Plan's Effective Date to
approve all actions to be taken by the Liquidating Trustee with
respect to the assets of the Liquidating Trust.

On the Effective Date, the existing stock or shares of Equity
Interests shall be extinguished and net stock in the Reorganized
Debtor shall be issued to the Liquidating Trust.

Confirmation of the Plan shall effectuate and approve the
settlement of all causes of actions and disputes and legal issues,
including (1) the validity of the security interest of RBLLC in
the RBLLC Collateral, (2) the acknowledgment of the ownership of
the ML Notes and ML Deeds of Trust by the MP Funds and Pass-
Through Investors, (3) the settlement of the Avoidance Actions and
Causes of Action as against RBLLC and the Investors (excluding
Insiders), (4) the sharing of the RBLLC Collateral with the non-
RBLLC, non-Borrower, and non-Investor General Unsecured Claimants,
as set forth in Sec. 3.6(g) of the Plan, (5) if not already
approved, the settlement between VTL Fund and the MP Funds, and
(6) the allowance of Investor Damages by the Investors as
unsecured Claims in the Liquidating Trust.

Prior to the Effective Date, a separate Loan LLC will be formed to
hold each of the ML Loans and the ML Loan Documents associated
with that ML Loan, including the ML Note and ML Deed of Trust.  On
the Effective Date, 100% of the fractional interests of each of
the ML Loans, including all ML Loan Documents related to such ML
Loan, will be transferred to the respective Loan LLC.  On the
Effective Date, membership interests in each applicable Loan LLC
will be issued to RBLLC, the Pass-Through Investors and the MP
Funds, in proportion to their respective fractional interests in a
particular ML Loan and related Loan Documents, including the ML
Deed of Trust.

             Classes of Claims Against and Interests

A. Unclassified Claims

Administrative Claims and Priority Tax Claims are not classified
for purposes of voting on, or receiving distributions under the
plan.  Allowed Administrative Claims will be paid, in full
satisfaction of such Claim: (a) a single Cash payment in the
Allowed amount of the Claim on the Effective Date, or as soon
thereafter as practical from the sale or refinancing of the
Debtor's Non-Loan Assets; (b) in the ordinary course of business
as said Claim matures; or (c) upon such other less favourable
terms as may be agreedupon, or as ordered by the Bankruptcy Court.

Each holder of an Allowed Priority Tax Claim will be paid: (i) the
amount of such holders' Priority Tax Claim, with interest, in
deferred Cash payments over a period of five (5) years, to be paid
in equal quarterly instalments of principal and interest from the
Liquidation Fund.

B. Classified Claims

The Plan segregates the Claims Against and Interests in the
Debtors into 13 Classes and describes the treatment for each
Class:

Class 1  -- Priority Non-Tax Claims     Unimpaired; Not Entitled
                                        to Vote

Class 2  -- Secured Tax Claims          Unimpaired; Not Entitled
                                        to Vote

Class 3  -- Stratera Secured Claims     Unimpaired; Not Entitled
                                        to Vote

Class 4  -- Artemis Secured Claims      Unimpaired; Not Entitled
                                        to Vote

Class 5  -- Arizona Bank Secured        Unimpaired; Not Entitled
            Claims                      to Vote

Class 6  -- Mechanics Lien Claims       Unimpaired; Not Entitled
            and Other Miscellaneous     to Vote
                      Secured Claims

Class 7  -- RBLLC Secured Claims        Impaired; Entitled to
                                        Vote

Class 8  -- MP Funds and MP Fund        Impaired; Entitled to
            Investors Claims            Vote

Class 9  -- VTC Fund Claims             Impaired; Entitled to
                                        Vote

Class 10 -- Pass-Through Investors      Impaired; Entitled to
            Claims                      Vote

Class 11 -- General Unsecured           Impaired; Entitled to
            Creditor Claims             Vote

Class 12 -- Borrowers Claims            Unimpaired; Not Entitled
                                        to Vote

Class 13 -- Equity Interest             Impaired; Deemed to
                                        Reject

As of the Effective Date, the RBLLC Notes under Class 7 will be
exchanged dollar for dollar for a pro rata membership interest in
each of the Loan LLCs proportional to the fractional interest of
the Debtor in each of the ML Loans.  RBLLC will also have a Class
11 General Unsecured Claim, and will be a beneficiary of the
Liquidating Trust to the extent that the unpaid obligations under
the RBLLC Notes are not exchanged for a membership interest in a
Loan LLC and for the amount of principal owed on the ML Loans that
RBLLC does not receive from the Loan LLC after the ML Notes are
paid in full or after reasonable collection eforts have been
exhausted by the Loan LLC.

On the Efective Date, each of the MP Funds under Class 8 will
relinquish its fractional interests in each of the ML Loans and
exchange those interests for membership interests in the
applicable Loan LLC that holds the aplicable ML Loan.  MP Funds
will also have a Class 11 General Unsecured Claim, and will be
beneficiaries of the Liquidating Trust to the extent of the
Investors Damages.

The VTL Fund under Class 9 will retain its lien in the MP Funds
but the repayment of the obligations will be modified and resolved
by the VTL Committee and the Investors Committee pursuant to the
Plan or separately.

On the Effective Date, holders of Class 10 Pass-Through Investors
Claims will relinquish their respective fractional interests in
each of the ML Loans and exchange those interests for membership
interests in the applicable Loan LLC that holds the applicable ML
Loan.  Holders of Class 10 Pass-Through Investors Claims will also
have a Class 11 General Unsecured Claim and will be beneficiaries
of the Liquidating Trust to the extent of their Investors Damages
as long as they do not exercise the Opt-Out Election.

Holders of Class 11 General Unsecured Claims will be beneficaries
of the Liquidating Trust to be established on the Effective Date
of the Plan in accordance with the Plan.  Claims and portions
thereof that are treated in Class 11 and are beneficiaries of the
Liquidating Trust become Channeled Claims unless they choose the
Opt-Out Provision under the Plan.

As of the Effective Date, all Equity Interests in the Debtor will
be canceled and extinguished.  Holders of Equity Interests will
receive nothing under the Plan and they are deemed to have
rejected the Plan.

                Financing the Plan and Operations

In order to consummate the Plan, the Investors Committee will
obtain credit financing.  The Investors Committee will obtain
financing in a sufficient amount to take out the Stratera Secured
Claims, the Priority Non-Tax Claims and the Administrative Claims.
The Investors Commitee will also obtain sufficient working capital
for the operations of the Reorganized Debtor and the Liquidating
Trust for 2009, as well as financing for the Loan LLC's to fund
the servicing and other special needs of the LLCs.

A full-text copy of the disclosure statement explaining the
Investors Committee's Plan of Reorganization for Mortgages Ltd. is
available for free at:

http://bankrupt.com/misc/MortgagesLtdDS.InvestorsCommitteePlan.pdf

A full-text copy of the Investors Committee's Plan of
Reorganization dated Jan. 21, 2009, is available for free at:

http://bankrupt.com/misc/MortgagesLtdInvestorsCommitteePlan.pdf

Phoenix, Arizona-based Mortgages Ltd. -- http://www.mtgltd.com/
-- originates, invests in, sells and services its own short-term
real-estate secured loans on properties within the state of
Arizona in the US.  It underwrites loans for commercial,
industrial and residential properties for acquisition,
entitlement, development, construction and investment.

Mortgages Ltd. was the subject of an involuntary chapter 7
petition dated June 20, 2008, filed by KGM Builders Inc. -- a
contractor for Grace Communities, a borrower of the company --
in the U.S. Bankruptcy Court for the District of Arizona.
Central & Monroe LLC and Osborn III Partners LLC, divisions of
Grace Communities, sought the appointment of an interim trustee
for Mortgages Ltd. in the chapter 7 proceeding.

Mortgages Ltd. is also facing lawsuits filed by Grace Communities
and Rightpath Limited Development Group for its alleged failure to
fully fund loans.  Mortgages Ltd. denied the charges.  It has
filed a motion to dismiss the Rightpath suit.

The Debtor's case was converted to a chapter 11 proceeding on
June 24, 2008 (Bankr. D. Ariz. Case No. 08-07465).  Judge Sarah
Sharer Curley presides over the case.  Carolyn Johnsen, Esq., and
Bradley Stevens, Esq., at Jennings, Strouss & Salmon P.L.C.,
replaced Todd A. Burgess, Esq., at Greenberg Traurig LLP, as
counsel to the Debtor.  As of Dec. 31, 2007, the Debtor had total
assets of $358,416,681 and total debts of $350,169,423.


MOTOR COACH: Ct. Confirms Plan; FMA Subscribes to Rights Offering
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware confirmed
on Jan. 28, 2009, the Debtors' Second Amended Joint Plan of
Reorganization, clearing the way for the Debtorsemergence of the
Debtors from Chapter 11 bankruptcy.

In confirming the Plan, the Court ruled that the Debtors
satisfied the requirements for confirmation pursuant to the
appliable provisions of the Bankruptcy Code.

                       Overview of the Plan

The plan contemplates the substantive consolidation of the
Debtors' estates for voting and distribution purposes,
reorganization of each of the Debtors upon consummation of the
plan, and the resolution of the outstanding claims against and
interests in the Debtors.

The plan will deleverage the Debtors' balance sheet by, among
other things:

  -- reduce the Debtors' total prepetition indebtedness by paying
     in full about $160 million of second lien obligations and
     discharging an additional $480 million in prepetition
     indebtedness;

  -- improve cash flows by reducing ongoing interest expense; and

  -- provide investment of as much as $160 million in new capital
     through the rights offering to (i) fund the Debtors'
     emergence from Chapter 11, (ii) appropriately capitalize the
     reorganized Debtors, and (iii) facilitate the implementation
     of the Debtors' business plan.

Under the plan, the Debtors will issue shares of new common stock
to holders of allowed Class 4 claims and new preferred stock to
the rights offering participants.

The plan classifies interests against and liens in the Debtors in
eight classes.  The classification of treatment of interests and
claims are:

                 Treatment of Interests and Claims

                   Types                        Estimated
         Class     of Claims       Treatment    Recovery
         -----     ---------       ---------    ---------

         1         other priority  unimpaired   100%
                   claims

         2         other secured   unimpaired   100%
                   claims

         3         secured second  impaired     100%
                   lien credit
                   agreement claim

         4         secured third   impaired     unknown
                   lien credit
                   agreement claim

         5         general         unimpaired   0%
                   unsecured claim

         6         intercompany    unimpaired   100%
                   claim

         7         equity interest impaired     0%

         8         intercompany    unimpaired   100%
                   interest

Because the Plan was not accepted by Classes 5A-5G (General
Unsecured Creditors, 7 (Equity Interests in Holdings) and 8A-8F
(Intercompany Interests), the Debtors sought confirmation of the
plan under Sec. 1129(b)(1), the "cramdown" provision of the
Bankruptcy Code.  The Court ruled that the Plan is confirmable
becuase the Plan does not discrimate unfairly and is fair and
equitable with respect to the Rejecting Classes.

Classes 4A-4G (Secured Third Lien Credit Agreement Claims), the
only voting Classes, have voted to accept the Plan, satisfying the
requirement that at least one Class of Claims that is impaired
under the Plan has accepted the Plan, determined without including
any acceptance by any insider, as required under Sec. 1129(a)(10)
of the Bankruptcy Code in all respects.

The Court also ruled that each of the conditions precedent to
confirmation set forth in Sec. 10.1 of the Plan has been satisfied
or waived in accordance with the provisions of the Plan.  These
conditions are:

  (a) the Lock Up Agreement shall be in full force and effect and
      shall not have been terminated.

  (b) the Bankruptcy Court shall have approved a disclosure
      statement with respect to this Plan in form and substance
      acceptable to the Debtors and FMA.

  (c) the Confirmation Order, the Plan, and all exhibits and
      annexes to each of this Plan and the Confirmation shall be
      in form and substance acceptable to the Debtors and FMA.

FMA refers to the following investment entitties affiliated with
Franklin Mutual Advisers LLC: Mutual Beacon Fund, Mutual Discovery
Fund, Mutual Qualified Fund, Mutual Shares Fund, Mutual Discovery
Securities Fund, Mutual Shares Securities Fund and Franklin Mutual
Recovery Fund.

Based on the Rights Offering Certification, the Third Lien Lenders
affiliated with FMA have subscribed for their pro rata share of
the New Preferred Stock.  The other Third Lien Lender, Monarch
Master Funding Ltd. did not subscribe.  Upon satisfaction of the
conditions, FMA will purchase the unsubscribed New preferred
Stock, thus providing the debtors with $160 million of cash
proceeds from the Rights Offering.

                        About Motor Coach

Wilmington, Delaware-based Motor Coach Industries International,
Inc. -- http://www.mcicoach.com/-- and its subsidiaries
manufacture intercity coaches for the tour, charter, line-haul,
scheduled service, and commuter transit sectors in the U.S. and
Canada.  They also operate seven sales centers and nine service
centers in the U.S. and Canada and is the industry's supplier of
aftermarket parts for most makes and models.

The company and six (6) of its debtor-affiliates filed separate
petitions for Chapter 11 relief on Sept. 15, 2008 (Bankr. D. Del.
Lead Case No. 08-12136), to implement a pre-negotiated
restructuring plan to be funded by Franklin Mutual Advisers, LLC
and certain of its affiliates.  The company's Canadian operations
are not included in the filing.  Kenneth S. Ziman, Esq., and
Elisha D. Graff, Esq., at Simpson Thacher & Bartlett LLP, in New
York; and Mark D. Collins, Esq., Jason M. Madron, Esq., and Lee E.
Kaufman, Esq., at Richards Layton & Finger, P.A., in Wilmington,
Delaware, represent the Debtors in their restructuring efforts.
Attorneys at Womble Carlyle Sandridge & Rice PLLC and Brown
Rudnick LLP, represent the Official Committee of Unsecured
Creditors as counsel.  Kurtzman Carson Consultants LLC serves as
claims and notice agent.  Rothschild Inc. and AlixPartners LLP
also provide restructuring advice.  At the time of filing, the
Debtors listed assets of between $500,000,000 and $1,000,000,000
and liabilities of between $100,000,000 and $500,000,000.


NATIONAL HERITAGE: Files for Chapter 11 Bankruptcy Protection
-------------------------------------------------------------
Forbes reports that the National Heritage Foundation has filed for
bankruptcy protection before the U.S. Bankruptcy Court for the
Eastern District of Virginia, after a family from Texas tried to
collect on the $6 million it was awarded in a case alleging that
the NHF had misled it.

According to Forbes, the NHF's Chapter 11 filing provides the
company with a relief from paying debt and some time to work out
deals with creditors.  The bankruptcy filing, says Forbes, could
also draw attention to fresh claims of the NHF's questionable
activities, which includes a $14 million investment in a nonpublic
firm operated by an unlicensed investment adviser to the
foundation.

Citing the NHF board of directors, Forbes relates that the charity
"is unable to meet its obligations as they become due in the usual
course of business . . . can no longer continue in business
profitably" and that "various creditors have threatened to
prosecute their claims."

The NHF said in its financial statement that the present value of
what the annuitants are owed was $15 million.  Court documents say
that the NHF listed 18 of its 20 largest unsecured creditors as
individual annuitants, owed as much as $165,000 per year.

According to the NHF's latest audited financial statement, for
2007, the company had a negative $7.5 million cash flow from
operations, increased borrowings, and $2.4 million in cash.
Forbes relates that contributions dropped by almost half to
$21 million from $41 million.

Forbes states that the NHF's balance sheet showed $208 million in
net assets, about $133 million of that was in donated non-cash
interests in charitable family limited partnerships and limited
liability firms that seem to put out little cash.  Forbes relates
that $12 million was listed in publicly traded stocks and bonds, a
sum that has likely dropped since the report, due to market
conditions last year.  Forbes says that about $49 million was
listed on the balance sheet as mutual funds.  Testimony in the
court case triggering the bankruptcy suggests that the mutual
funds category includes individual, illiquid securities generating
no return, Forbes reports.

Falls Church, Virginia-based National Heritage Foundation, Inc. --
http://www.nhf.org/-- is a non-profit tax-exempt charitable
institution.  The company filed for Chapter 11 bankruptcy
protection on Jan. 24, 2009 (Bankr. E.D. Va. Case No. 09-10525).
Alan Michael Noskow, Esq., at Patton Boggs LLP assists the company
in its restructuring effort.  The company listed more than $100
million in assets and $1 million to $100 million in debts.


NAVISTAR INTERNATIONAL: Harbinger Et Al. Discloses Equity Stake
---------------------------------------------------------------
Harbinger Capital Partners Master Fund I, Ltd., et al., disclosed
in a regulatory filing dated January 26, 2009, that they may be
deemed to beneficially own shares of Navistar International
Corporation's common stock:

                                                         Shares
                                                      Beneficially
Entity                                                   Owned
------                                               -----------
Harbinger Capital Partners Master Fund I, Ltd.         3,291,081
Harbinger Capital Partners Offshore Manager, L.L.C.    3,291,081
HMC Investors, L.L.C.                                  3,291,081
Harbinger Capital Partners Special Situations
  Fund L.P.                                             3,150,969
Harbinger Capital Partners Special Situations GP, LLC  3,150,969
HMC - New York, Inc.                                   3,150,969
Harbert Management Corporation                         3,150,969
Philip Falcone                                         6,442,050
Raymond J. Harbert                                     6,442,050
Michael D. Luce                                        6,442,050

As of November 30, 2008, the number of shares outstanding of
Navistar's common stock was 71,228,856, net of treasury shares.

Entity                                                 Percentage
------                                                 ---------
Harbinger Capital Partners Master Fund I, Ltd.             4.6%
Harbinger Capital Partners Offshore Manager, L.L.C.        4.6%
HMC Investors, L.L.C.                                      4.6%
Harbinger Capital Partners Special Situations Fund L.P.    4.4%
Harbinger Capital Partners Special Situations GP, LLC      4.4%
HMC - New York, Inc.                                       4.4%
Harbert Management Corporation                             4.4%
Philip Falcone                                             9.0%
Raymond J. Harbert                                         9.0%
Michael D. Luce                                            9.0%

Harbinger Capital Partners Offshore Manager, L.L.C. is the
investment manager of Harbinger Capital Partners Master Fund I,
Ltd.  HMC Investors, L.L.C., is its managing member.  HMC - New
York, Inc., is the managing member of Harbinger Capital Partners
Special Situations GP, LLC, which is the general partner of the
Harbinger Capital Partners Special Situations Fund, L.P.

Harbert Management Corporation is the parent of HMC - New York,
Inc.  Philip Falcone is a member of HMC Investors, a shareholder
of HMC and the portfolio manager of the Master Fund and the
Special Fund.  Raymond J. Harbert is also a member of HMC
Investors and a shareholder of HMC.  Michael D. Luce is a member
of HMC Investors and a shareholder of HMC.

              About Navistar International Corporation

Based in Warrenville, Illinois, Navistar International Corporation
(NYSE: NAV) -- http://www.navistar.com/-- produces
International(R) brand commercial and military vehicles,
MaxxForce(TM) brand diesel engines, IC brand school and commercial
buses, and Workhorse(R) brand chassis for motor homes and step
vans, and is a private label designer and manufacturer of diesel
engines for the pickup truck, van and SUV markets.  Navistar is
also a provider of truck and diesel engine parts.  Another
affiliate offers financing services.

The Troubled Company Reporter reported on Jan. 7, 2009, that
Navistar had $10.3 billion in total assets and $11.7 billion in
total liabilities, resulting in $1.4 billion in stockholders'
deficit as of October 31.  The company also had $2.3 billion in
accumulated deficit as of October 31.

The TCR reported on June 2, 2008, that Fitch Ratings affirmed and
simultaneously removed from Rating Watch Negative the ratings for
Navistar International Corporation and Navistar Financial Corp. to
reflect progress in filing audited financial statements.  The
ratings are:

Navistar International Corp.
  -- Issuer Default Rating 'BB-';
  -- Senior unsecured bank facility 'BB-'.

Navistar Financial Corp.
  -- IDR 'BB-';
  -- Senior unsecured bank lines 'BB-'.

The TCR also reported on Feb. 25, 2008 that Standard & Poor's
Ratings Services removed its 'BB-' corporate credit ratings on
Navistar International Corp. and subsidiary Navistar Financial
Corp. from CreditWatch with negative implications, where they were
placed Jan. 17, 2006.


NAVISTAR INTERNATIONAL: OppenheimerFunds Discloses 8.94% Stake
--------------------------------------------------------------
OppenheimerFunds, Inc., disclosed in a regulatory filing dated
January 27, 2009, that it may be deemed to beneficially own
6,368,099 shares of Navistar International Corporation's Common
Stock or 8.94% of the total outstanding shares.

OppenheimerFunds, Inc., is an investment adviser.

Based in Warrenville, Illinois, Navistar International Corporation
(NYSE: NAV) -- http://www.navistar.com/-- produces
International(R) brand commercial and military vehicles,
MaxxForce(TM) brand diesel engines, IC brand school and commercial
buses, and Workhorse(R) brand chassis for motor homes and step
vans, and is a private label designer and manufacturer of diesel
engines for the pickup truck, van and SUV markets.  Navistar is
also a provider of truck and diesel engine parts.  Another
affiliate offers financing services.

The Troubled Company Reporter reported on Jan. 7, 2009, that
Navistar had $10.3 billion in total assets and $11.7 billion in
total liabilities, resulting in $1.4 billion in stockholders'
deficit as of October 31.  The company also had $2.3 billion in
accumulated deficit as of October 31.

The TCR reported on June 2, 2008, that Fitch Ratings affirmed and
simultaneously removed from Rating Watch Negative the ratings for
Navistar International Corporation and Navistar Financial Corp. to
reflect progress in filing audited financial statements.  The
ratings are:

Navistar International Corp.
  -- Issuer Default Rating 'BB-';
  -- Senior unsecured bank facility 'BB-'.

Navistar Financial Corp.
  -- IDR 'BB-';
  -- Senior unsecured bank lines 'BB-'.

The TCR also reported on Feb. 25, 2008 that Standard & Poor's
Ratings Services removed its 'BB-' corporate credit ratings on
Navistar International Corp. and subsidiary Navistar Financial
Corp. from CreditWatch with negative implications, where they were
placed Jan. 17, 2006.


NAVISTAR INTERNATIONAL: To Close Indianapolis Engine Plant
----------------------------------------------------------
Navistar International Corporation will close its Indianapolis
engine plant and Indianapolis Casting Corporation foundry as a
result of changes in its business relationship with Ford Motor
Company, the facilities' primary customer.  Ford and Navistar
previously announced that they will end their diesel engine supply
agreement.  Navistar intends to cease operations at its
Indianapolis campus as of July 31, 2009.

On November 12, 2008, Navistar International Corporation concluded
that it would incur material charges related to its VEE Business
Unit.  These charges were occasioned by the significant reduction
in demand from Ford Motor Company for diesel engines produced by
Navistar, Inc., at the VEE Business Unit and the expectation that
Ford's demand for diesel engines would continue to be below
previously anticipated levels.

The company further disclosed on January 14, 2009 that Ford and
the company reached an agreement to restructure their ongoing
business relationship, settle all existing litigation between the
companies and end their diesel engine supply agreement effective
December 31, 2009.  The company disclosed that it was assessing
the impact of the Ford settlement on its ongoing business and
would take the necessary actions to address excess capacity and
fixed costs.

On January 23, 2009, executive management of the company concluded
that as a result of these events, it committed to close its
Indianapolis Engine Plant and its foundry.  The major type of
charges expected to be incurred relate to employee related costs
and other contractual obligations.  The assessment of these costs
is ongoing and the company will provide an estimate of the amount
or range of charges expected to be incurred once a good faith
determination can be made.

"This is a difficult decision because of the impact it has on our
employees and the community where we live and work," said Eric
Tech, vice president and general manager, Navistar Engine Group,
in a press release.  "But the significant change in Ford's
business plans has forced us to make this decision."

Navistar will continue to produce diesel engines for Ford through
2009.  The companies also will continue to collaborate on a range
of initiatives, including their existing Blue Diamond Truck and
Parts joint ventures and their diesel engine supply agreement in
South America.

"Over the past 30 years, Ford and Navistar dominated the diesel-
powered, heavy-duty pickup truck market, providing value to both
companies' customers and shareholders," Tech added.  "While this
phase of our relationship will end, we look forward to continuing
to work together through our existing joint ventures and South
American partnership."

Meanwhile, Navistar has continued to ensure the viability its
engine business through successful customer and product
diversification efforts.  These include expansion into China and
India, as well as a broadening of product offerings through the
introduction of the MaxxForce(TM) 11/13 and recently announced
plans to produce a proprietary 15-liter engine.  In addition, the
company's mid-range diesel engine business has grown beyond
International Truck, due to the strength of Navistar's military
business, as well as new business with global and OEM customers.

Navistar International Corporation (NYSE: NAV) is a holding
company whose wholly owned subsidiaries produce Internationalr
brand commercial and military trucks, MaxxForceT brand diesel
engines, IC brand school and commercial buses, and Workhorser
brand chassis for motor homes and step vans. It also is a private-
label designer and manufacturer of diesel engines for the pickup
truck, van and SUV markets. The Company also provides truck and
diesel engine parts and service. Another affiliate offers
financing services. Additional information is available at.

              About Navistar International Corporation

Based in Warrenville, Illinois, Navistar International Corporation
(NYSE: NAV) -- http://www.navistar.com/-- produces
International(R) brand commercial and military vehicles,
MaxxForce(TM) brand diesel engines, IC brand school and commercial
buses, and Workhorse(R) brand chassis for motor homes and step
vans, and is a private label designer and manufacturer of diesel
engines for the pickup truck, van and SUV markets.  Navistar is
also a provider of truck and diesel engine parts.  Another
affiliate offers financing services.

The Troubled Company Reporter reported on Jan. 7, 2009, that
Navistar had $10.3 billion in total assets and $11.7 billion in
total liabilities, resulting in $1.4 billion in stockholders'
deficit as of October 31.  The company also had $2.3 billion in
accumulated deficit as of October 31.

The TCR reported on June 2, 2008, that Fitch Ratings affirmed and
simultaneously removed from Rating Watch Negative the ratings for
Navistar International Corporation and Navistar Financial Corp. to
reflect progress in filing audited financial statements.  The
ratings are:

Navistar International Corp.
  -- Issuer Default Rating 'BB-';
  -- Senior unsecured bank facility 'BB-'.

Navistar Financial Corp.
  -- IDR 'BB-';
  -- Senior unsecured bank lines 'BB-'.

The TCR also reported on Feb. 25, 2008 that Standard & Poor's
Ratings Services removed its 'BB-' corporate credit ratings on
Navistar International Corp. and subsidiary Navistar Financial
Corp. from CreditWatch with negative implications, where they were
placed Jan. 17, 2006.


NEWARK GROUP: Liquidity Pressures Prompt Moody's Junk Ratings
-------------------------------------------------------------
Moody's Investors Service downgraded the Corporate Family Rating
and Probability of Default Rating of The Newark Group Inc. to Caa3
from B3 while concurrently downgrading the senior secured credit-
linked facility to Caa1 and the senior subordinated notes to Ca.
The SGL-4 Speculative Grade Liquidity rating was affirmed and the
ratings outlook remains negative.

The downgrade to Caa3 was driven by near-term liquidity pressures.
At the end of the second fiscal quarter ended
October 31, 2008, TNG reported $8 million of cash, predominantly
held outside the United States, and $20 million of availability on
its $85 million senior secured borrowing base revolver (unrated by
Moody's).  Since then, however, demand has deteriorated sharply in
TNG's end markets and, in Moody's opinion, will lead to a steep
shortfall in revenue over the medium term.  Free cash flow
generation has been negative in each of the last five quarters
and, despite a recent decline in input costs, Moody's expects the
drop-off in sales volumes to materially impact EBITDA and
exacerbate the company's cash drain.  Record low recycled fiber
costs may cause TNG's inventory balance, and thus the borrowing
base calculation and revolver availability, to shrink.  In
addition, the maximum senior leverage covenant on the credit-
linked facility is scheduled to step down a turn to 3.5 times as
of January 31, 2009, and Moody's does not believe TNG will be in
compliance, which could prevent further access to the revolver.
The $9.3 million semi-annual interest payment on the subordinated
notes is due on March 15, 2009 and required pension payments are
also due in the fiscal fourth quarter.

The negative outlook reflects the general macroeconomic outlook
for both the U.S. and Europe, as well as industry-wide demand
trends within the recycled paperboard markets.  The ratings
outlook also incorporates Moody's concerns over whether TNG can
meet its liquidity requirements over the intermediate term under
its current capital structure.

Moody's downgraded these ratings:

  -- Corporate Family Rating, to Caa3 from B3

  -- Probability of Default Rating, to Caa3 from B3

  -- $90 million senior secured credit-linked facility due 2012,
     to Caa1 (LGD2, 22%) from Ba3 (LGD2, 22%)

  -- $175 million senior subordinated notes due 2014, to Ca
     (LGD5, 75%) from Caa1 (LGD5, 75%)

This rating was affirmed:

  -- Speculative Grade Liquidity Rating, SGL-4

The last rating action occurred on September 19, 2008, when
Moody's downgraded TNG's CFR to B3, downgraded the liquidity
rating to SGL-4 and changed the ratings outlook to negative.

The Newark Group Inc., headquartered in Cranford, New Jersey, is
an integrated producer of 100% recycled paperboard and paperboard
products in North America and Europe.  For the twelve months ended
October 31, 2008, the company generated revenues of approximately
$1 billion.


NORTEL NETWORKS: Oplink Discloses $805,000 in Receivables
---------------------------------------------------------
Fremont, California-based Oplink Communications, Inc., said it has
$805,000 in shipments of products for Nortel Networks.  Oplink on
Thursday reported its financial results for its fiscal 2009 second
quarter, ended December 31, 2008. Oplink said revenue for the
quarter was $37.6 million, compared to revenue of $43.0 million
reported for the first quarter of fiscal 2009.  Oplink said
revenue for the second quarter of fiscal 2009 excluded the
$805,000 related to the Nortel shipments.  Revenue for the second
quarter would have been $38.4 million if this revenue had not been
deferred, Oplink said.

Incorporated in 1995, Oplink provides design, integration and
optical manufacturing solutions for optical networking components,
modules and subsystems.  The Company offers advanced and cost-
effective optical-electrical components and subsystem
manufacturing through its facilities in Zhuhai and Shanghai,
China.  In addition, Oplink maintains optical-centric front-end
design, application, and customer service functions at its offices
in Fremont and Calabasas, California and has research facilities
in Zhuhai and Wuhan, China and Hsinchu Science-Based Industrial
Park in Taiwan.  The company's customers include
telecommunications, data communications and cable TV equipment
manufacturers around the globe.

                        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)


NORTEL NETWORKS: Ends Joint Pact with Alvarion for Mobile WiMAX
---------------------------------------------------------------
Nortel Networks Inc. said it has decided to discontinue its mobile
WiMAX business and end its joint agreement with Alvarion Ltd.
This decision, which will have no impact on Nortel's other
solutions, will allow Nortel to narrow its focus, better manage
its investments and strengthen its broader carrier business to
better position itself for long-term competitiveness.

Nortel will work closely with Alvarion to transition its mobile
WiMAX customers to help ensure that ongoing support commitments
are met without interruption.

"We are taking rapid action to narrow our strategic focus to areas
where we can drive maximum return on investment. We will work
closely with Alvarion to transition our mobile WiMAX customers to
them and assure customers that they will continue to benefit from
leading-edge technology and high-quality service," said Richard
Lowe, president of carrier networks, Nortel. "Our continued
success in the wireless business requires us to focus our energy
on opportunities with long-standing customers. This will position
Nortel more effectively to capitalize on future resurgence of
carrier spend levels and drive value to the business."

The agreement, announced in June 2008, outlined the integration of
Alvarion's advanced radio access network technology with Nortel's
core network solutions, backhaul solutions, and global services.
It also covered the resale by Nortel of the Alvarion platform of
WiMAX access products.

"Our priority is to minimize the effect on customers," said Tzvika
Friedman, president and CEO, Alvarion. "We will work closely with
Nortel to ensure that the transition will be as smooth as
possible."

                       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)


NORTHWEST AIRLINES: Delta Posts $8.9 Billion Full Year 2008 Loss
----------------------------------------------------------------
Eight of the nine major U.S. airlines that have disclosed fourth
quarter and full year 2008 results have posted losses aggregating
$19.6 billion.  Only Southwest Airlines posted a net profit.

                                Net Profit         Net Profit
                             Full Year 2008      Full Year 2007
                             --------------      --------------
Delta Air Lines, Inc.       ($8,900,000,000)     $1,600,000,000
AMR Corp.                    (2,100,000,000)        504,000,000
Southwest Air Lines             178,000,000         645,000,000
UAL Corp.                    (5,348,000,000)        403,000,000
US Airways Group Inc.        (2,210,000,000)        427,000,000
Continental Airlines  Inc.     (585,000,000)        459,000,000
Alaska Air Group Inc.          (135,900,000)        124,300,000
Skywest Inc.                         --                  --
JetBlue Airways Corp.           (76,000,000)         41,000,000
AirTran Holdings, Inc.         (273,829,000)         52,683,000

Skywest is expected to release its fourth quarter 2008 results on
February 11.  The figures provided by JetBlue were pre-tax profit
(or losses).

                                Net Profit         Net Profit
                            4th Quarter '08     4th Quarter '07
                            ---------------     ---------------
Delta Air Lines, Inc.       ($1,400,000,000)       ($70,000,000)
AMR Corp.                      (340,000,000)        (69,000,000)
UAL Corp.                    (1,303,000,000)        (53,000,000)
Southwest Airlines              (56,000,000)        111,000,000
US Airways                     (541,000,000)        (79,000,000)
Continental Airlines           (266,000,000)        (32,000,000)
Alaska Air Group Inc.           (75,200,000)         (7,400,000)
Skywest Inc.                         --                  --
Jetblue Airways Corp.           (49,000,000)         (3,000,000)
AirTran Holdings, Inc.         (118,391,000)         (2,171,000)

                       High Fuel Jet Prices

The airlines said high fuel prices for most of 2008 have
contributed to their losses.

AMR, the parent of American Airlines, said that historically high
and volatile jet fuel prices continued to challenge it in the
fourth quarter of 2008.  AMR paid $133 million and $2.7 billion
more for fuel in the fourth quarter and for all of 2008,
respectively, than it would have paid at prevailing prices from
the corresponding prior-year periods.

Delta faced over $2 billion in increased fuel costs in 2008.
While fuel prices dropped in the fourth quarter 2008, Delta paid
for high fuel prices due to its fuel hedging contracts.  Delta
would have reported a $167 million net profit excluding special
items in the December 2008 quarter, if fuel had been purchased at
market prices.

UAL said the historic peak in prices and the impact on hedges
driven by the rapid decline resulted in a $2.9 billion increase in
cost compared to 2007 fuel prices.  UAL recorded $370 million in
cash losses on fuel hedges that settled in the quarter, as the
recent fall in fuel prices drove losses on hedges put in place
earlier in the year to mitigate the steep increase in prices that
had occurred in the second and third quarters of 2008. In
addition, the company also recorded non-cash, net mark-to-market
losses on its fuel hedges of $566 million.

US Airways Group Chairman and CEO Doug Parker stated, "Like other
airlines that have reported before us, our financial results
reflect the staggering increase in fuel prices that we faced
throughout most of 2008.  In fact, had our 2008 fuel price
including realized gains and losses on fuel hedging instruments
remained at 2007 levels, the company's fuel expense would have
been approximately $1.4 billion lower.

                  Lower Revenues Due to Recession

Delta Air Lines, which completed its merger with Northwest
Airlines in 2008, said that during the fourth quarter, on a
combined basis, passenger revenue fell 1%, or $54 million,
compared to the prior year period due to a 4% decline in capacity,
partially offset by a 3% increase in unit revenue.  These results
reflect the weakening of the revenue environment during the
quarter caused by the global economic recession.

According to UAL, total passenger revenue for the quarter
decreased 8.7%  year-over- year as consolidated capacity declined
10.6% , consolidated yield increased 2.4%  and load factor
decreased 0.3 points.

Continental Airlines, which have been mentioned in possible merger
talks with other U.S. airlines in 2008, said weakening economic
conditions and highly volatile fuel prices presented financial
challenges for the airline in the fourth quarter 2008. Continental
recorded a fourth quarter net loss of $266 million.

Dave Barger, JetBlue's CEO, said that while he was appointed to
report a loss, he has been satisfied with JetBlue's performance in
2008.  "Against the backdrop of record fuel prices and
unprecedented economic challenges, we effectively managed our
capacity and strengthened our network.  We also made significant
progress in our efforts to further enhance the JetBlue experience
for our customers.  JetBlue's industry-leading unit revenue growth
throughout the year reflects the outstanding work of our
crewmembers.

"2008 was an especially tough and challenging year," said Bob
Fornaro, AirTran Airways' chairman, president and chief executive
officer. "We thank our dedicated, hard-working Crew Members and
our loyal customers for helping us overcome the many obstacles we
faced in 2008. Our Crew Members continue to strive to provide
exceptional customer service, and a high-quality product while
offering value to the traveling public. Despite the industry
challenge shifting from high oil costs to concerns regarding
consumer demand, our 2008 initiatives have us well positioned to
return to profitability in 2009."

                  Liquidity, Bankruptcy Concerns

Delta, UAL and AirTran said that they have strengthened their
liquidity that would allow them to face the challenges of 2009.

Michael Lowry, project manager for AVIATION WEEK's Top-
Performing Companies report, said in September 2008 that
USAirways, AMR, Northwest Airlines, AirTran and Continental would
have high bankruptcy risk in 2009.

The September report also said that USAir was a high risk to file
for bankruptcy again in 2008 -- it had entered and exited
bankruptcy protection twice -- but USAir has been able, so far, to
survive the crisis.  Only smaller airlines filed for bankruptcy in
2008.  These included Frontier Airlines, Skybus Airlines Inc.,
Aloha Airgroup Inc. and ATA Airlines Inc., who made its second
Chapter 11 filing.

Northwest Airlines has completed its merger with Delta Air to
form one of the world's largest airlines.  Delta noted that as of
Dec. 31, 2008, it had $6.1 billion in total liquidity and cash
collateral posted with hedge counterparties.  As of Dec. 31, 2007,
Delta had $3.3 billion in cash, cash equivalents and short-term
investments.

UAL said it completed several transactions during the fourth
quarter that helped strengthen its liquidity.  It raised
$215 million from aircraft financing transactions that closed
during the quarter along with $66 million in proceeds from asset
sales. The company also received net proceeds of $107 million
through equity issuances during the quarter.

AirTran noted that it ended the fourth quarter with $340.5 million
in unrestricted cash and investments, its highest year-end balance
since 2005.

                           2009 Outlook

Most of the airlines expect weak revenues in 2008, but expect
those revenues to be offset by lower fuel prices and savings from
cost cutting measures.  Some of the airlines have also disclosed
capacity cuts for 2009.

AMR has decided not to use MD-80s to backfill flying associated
with the seven 737s that no longer will be delivered in 2009.
Largely as a result of this decision, the company's 2009 mainline
capacity will decline by more than one percentage point compared
to previous guidance provided in October.

"Our fourth quarter and full-year 2008 results reflect the
difficulties all airlines faced last year, but we believe our
steps to reduce capacity, bolster liquidity, and improve revenue
helped us better manage the challenges of record fuel prices and a
weak economy," said AMR Chairman and CEO Gerard Arpey.

"While significant hurdles remain, I am guardedly optimistic we
can regain momentum in 2009," Mr. Arpey said.

"Despite the difficult economic environment, we expect to be
solidly profitable in 2009 driven by lower fuel costs, capacity
discipline, and merger synergies," said Richard Anderson, Delta's
chief executive officer.  "Delta people have a great track record
for achieving their goals, and I am confident that 2009 will be
another successful year."

"Delta's proactive decision to reduce domestic capacity during
2008 mitigated the impact of the decline in demand we saw over the
course of the fourth quarter. We expect the worldwide economy to
be difficult throughout 2009; however, if fuel prices remain at
current levels, we believe the benefit of lower fuel prices will
more than offset the revenue decline." said Edward Bastian,
Delta's president.  "Delta has the tools required to manage
through these tough economic times -- with the broadest, most
diverse network in the industry; an estimated $2 billion in annual
merger synergies to be obtained; best-in-class costs; a solid
liquidity balance; unmatched fleet flexibility; and the discipline
and drive of the new Delta team."

Delta projects that consolidated passenger revenue in 2009 will be
down 4% to $4.8 billion.  Fuel price will be $2.15 per gallon.
During the December 2008 quarter, Delta hedged 58% of its fuel
consumption, resulting in an average fuel price of $2.90 per
gallon -- included in the fuel price is $507 million in fuel hedge
losses in the fourth quarter.  In 2007, when Delta paid $2.21 a
gallon, it noted that its operating results were significantly
impacted by changes in the price and availability of aircraft
fuel. In 2007, its average fuel price per gallon rose 5% to $2.21,
as compared to an average price of $2.10 in 2006, which was 15%
higher than our average price of $1.79 in 2005.

UAL believes that for full year 2009 revenues will be down 8%
to 7%.  United said it is on track to complete the previously
announced removal of 100 aircraft from its fleet by the end of
2009.   United added it is taking additional steps in 2009 to
reduce overhead costs.  The company will further reduce the number
of salaried and management employees by approximately 1,000
positions by the end of 2009. This is in addition to the 1,500
positions the company announced in the second quarter, and when
completed, will bring the total reduction in its salaried and
management staff to approximately 2,500, or nearly 30% , since the
beginning of 2008.

"Last year was by any measure a challenging year -- defined by
unprecedented volatility and unpredictability, but for United it
was also characterized by steady and durable improvements," said
Glenn Tilton, United's chairman, president and CEO. "Our
management team made timely decisions that resulted in fundamental
improvements across our business, which will hold us in good stead
in 2009."

Alaska Air Group, which operates Alaska Air and Horizon Air, noted
that excluding special items, it had net income of $16.4 million
in the 4th quarter of 2008 compared to a $17.9 million net loss in
the same period in 2007.  "In a year of unprecedented volatility
that included soaring fuel prices and an economic meltdown, we
were pleased to eke out a small profit for 2008, excluding special
items, and be one of only a few major airlines to do so," said
Bill Ayer, Alaska Air Group's chairman and chief executive
officer.  "Our concerted efforts to control costs, improve our
operation and tailor our schedule to better match customer demand
have prepared us to face whatever hurdles the current year
brings."

According to Mr. Parker, USAir CEO, measures executed by the
airlines before aimed at offsetting high fuel prices in 2008 have
significantly softened the blow from the economic downturn that
the airline industry now faces.  "As we begin the new year, US
Airways is well prepared for a difficult global macroeconomic
environment.  We are running a great operation, have restructured
our business model through the introduction of new fees, reduced
capacity and increased our liquidity. With the help of falling
fuel prices, we believe we are well positioned for the challenges
ahead," concluded Parker.

Larry Kellner, Continental's chairman and chief executive officer,
said, "While there are continuing hard times ahead, thanks to our
team, we are well-positioned to maintain our place as an industry
leader."  Continental said it will inaugurate daily nonstop
service between New York and Shanghai in March 2009.

For the full year 2009, JetBlue expects to report an operating
margin between 12 and 14%.  Capacity, according to JetBlue, for
the full year 2009 is expected to decrease between zero and 2%
over 2008 and stage length is expected to decrease about 6% over
full year 2008.

             Full Year 2008 Net Profit for Southwest

The usually profitable Southwest Airlines also posted a fourth
quarter loss -- $56,000,000 net loss.  However, Southwest noted
that excluding special charges and other items, its fourth quarter
2008 net income was $61 million, bringing it to its 71st
consecutive quarter of profitability.

Gary C. Kelly, CEO of Southwest, stated: "We are very proud to
report another profitable year in one of the most difficult years
in aviation's 100-year-plus history.  We certainly had our
challenges in 2008, but thanks to the extraordinary efforts and
Warrior Spirit of our People, we persevered to report our 36th
consecutive year of profitability."

"We celebrated many operational successes throughout 2008 and
enhanced our already exceptional Brand and Customer Experience.
With one full year of our new boarding system and Business Select
product offering, the Customer response has been overwhelmingly
favorable. We've made significant advancements in our revenue
management and network optimization capabilities.  And, we've made
great progress on the technology side to lay the foundation for
improved Customer Service, a new southwest.com, a new Rapid
Rewards program, and international codeshare agreements with
WestJet to Canada and Volaris to Mexico.

"Despite the difficult credit markets, we were able to boost our
liquidity by $1.1 billion during fourth quarter 2008 through
several financing transactions to end the year with $1.8 billion
in unrestricted cash and short-term investments. After yearend, we
raised an additional $173 million in cash upon the closing of the
second tranche of our sale and leaseback transaction for an
additional five of our 737-700 aircraft.

"Due to the rapid collapse in energy prices during fourth quarter
2008, we substantially reduced our net fuel hedge position to
approximately ten percent of our estimated fuel gallons in each
year from 2009 through 2013.  Based on this current 2009 portfolio
and future market prices for energy (as of January 20, 2009), we
estimate our economic fuel costs per gallon, including fuel taxes,
to be approximately $1.80 and under $1.90, for first quarter and
full year 2009, respectively.  This current full year 2009
projection is more than $1 billion lower than we were projecting
last summer for 2009.

                       About AirTran Airways

AirTran Airways, a subsidiary of AirTran Holdings, Inc. (NYSE:
AAI), a Fortune 1000 company, is ranked number one in the 2008
Airline Quality Rating study. The airline offers coast-to-coast
flights, North America's newest all-Boeing fleet, friendly service
and Business Class and complimentary XM Satellite Radio on every
flight. To book a flight, visit http://www.airtran.com.

                           *     *     *

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

                      About Delta Air Lines

With its acquisition of Northwest Airlines, Atlanta, Georgia-based
Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or
http://www.nwa.com/-- is now the world's largest airline.  From
its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St.
Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its
Northwest subsidiary and Delta Connection carriers offer service
to more than 376 destinations worldwide in 66 countries and serves
more than 170 million passengers each year.  Delta's marketing
alliances allow customers to earn and redeem either SkyMiles or
WorldPerks on more than 16,000 daily flights offered by SkyTeam
and other partners.

The merger closed on October 29, 2008.

Prior to the merger, Delta was the world's second-largest airline
in terms of passengers carried and Northwest was the world's
fourth largest airline.

Northwest and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R.
Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at
Cadwalader, Wickersham & Taft LLP in Washington, represented the
Northwest Debtors in their restructuring efforts. The Official
Committee of Unsecured Creditors retained Scott L. Hazan, Esq., at
Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy
counsel.  When the Northwest Debtors filed for bankruptcy, they
listed $14.4 billion in total assets and
$17.9 billion in total debts.  On May 21, 2007, the Court
confirmed the Northwest Debtors' amended plan.  That amended plan
took effect May 31, 2007.  (Northwest Airlines Bankruptcy News
Issue No. 114; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).

Delta and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall
S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta
Debtors in their restructuring efforts.  Timothy R. Coleman at The
Blackstone Group L.P. provided the Delta Debtors with financial
advice.  Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provided the Official
Committee of Unsecured Creditors with legal advice. John McKenna,
Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman
at Mesirow Financial Consulting, LLC, served as the Committee's
financial advisors.  On April 25, 2007, the Court confirmed the
Delta Debtors' plan.  That plan became effective on April 30,
2007.  The Court entered a final decree closing 17 cases on Sept.
26, 2007.  (Delta Air Lines Bankruptcy News; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).

                     About United Airlines

United Airlines (NASDAQ: UAUA) operates more than 3,000* flights a
day on United and United Express to more than 200 U.S. domestic
and international destinations from its hubs in Los Angeles, San
Francisco, Denver, Chicago and Washington, D.C. With key global
air rights in the Asia-Pacific region, Europe and Latin America,
United is one of the largest international carriers based in the
United States. United also is a founding member of Star Alliance,
which provides connections for our customers to 912 destinations
in 159 countries worldwide. United's 49,500 employees reside in
every U.S. state and in many countries around the world. News
releases and other information about United can be found at the
company's Web site at united.com.

                            *    *    *

As reported in the Troubled Company Reporter on July 29, 2008,
Standard & Poor's Ratings Services lowered its ratings on UAL
Corp. and subsidiary United Air Lines Inc. (both rated B-
/Negative/--), including lowering the long-term corporate credit
ratings on both entities to 'B-' from 'B', and removed the ratings
from CreditWatch, where they had been placed with negative
implications May 22, 2008, as part of an industrywide review.  The
outlook is negative.

                         About US Airways

US Airways, along with US Airways Shuttle and US Airways Express,
operates more than 3,100 flights per day and serves 200
communities in the U.S., Canada, Europe, the Caribbean and Latin
America. The airline employs nearly 34,000 aviation professionals
worldwide and is a member of the Star Alliance network, which
offers our customers more than 16,500 daily flights to 912
destinations in 159 countries worldwide. Travel + Leisure Magazine
named US Airways as one of the top-three airlines for 2008 in on-
time performance for the year (based on Department of
Transportation data for Sept. 1, 2007 through Aug. 31, 2008). And
for the tenth consecutive year, the airline received a Diamond
Award for maintenance training excellence from the Federal
Aviation Administration (FAA) for its Charlotte, North Carolina
hub line maintenance facility. For more company information, visit
usairways.com. (LCCF)

                          About JetBlue

New York-based JetBlue Airways has created a new airline category
based on value, service and style. Known for its award-winning
service and free TV as much as its low fares, JetBlue is now
pleased to offer customers Lots of Legroom and super-spacious Even
More Legroom seats. JetBlue introduced complimentary in-flight e-
mail and instant messaging services on aircraft "BetaBlue," a
first among U.S. domestic airlines. JetBlue is also America's
first and only airline to offer its own Customer Bill of Rights,
with meaningful and specific compensation for customers
inconvenienced by service disruptions within JetBlue's control.
Visit www.jetblue.com/promise for details. JetBlue serves 52
cities with 600 daily flights. New service to San Jose, Costa
Rica, begins in 2009. With JetBlue, all seats are assigned, all
travel is ticketless, all fares are one-way, and an overnight stay
is never required. For information or reservations call 1-800-
JETBLUE (1-800-538-2583) or visit www.jetblue.com.

                    About Continental Airlines

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

                          *     *     *

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

Continental Airlines, Inc. reported a working capital deficit of
US$202 million, with current assets of US$4.713 billion and
current liabilities of US$4.915 billion.

At Dec. 31, 2007, the Company had a positive working capital of
US$112 million, with US$4.561 billion in current assets and
US$4.449 billion in current liabilities.

As of Sept. 30, 2008, the Company had US$2.9 billion in
unrestricted cash, cash equivalents and short-term investments,
which is US$83 million higher than at Dec. 31, 2007. At Sept. 30,
2008, the Company also had US$164 million of restricted cash, cash
equivalents and short-term investments, which is primarily
collateral for estimated future workers' compensation claims,
credit card processing contracts, letters of credit and
performance bonds. Restricted cash, cash equivalents and short-
term investments at Dec. 31, 2007, totaled US$179 million.
Additionally, the Company held student loan-related auction
rate securities reported as long-term investments at Sept. 30,
2008 with a par value of US$147 million and a fair value of
US$130 million.


OCEANOGRAFIA SA: Fitch Downgrades Issuer Default Rating to 'B-'
---------------------------------------------------------------
Fitch Ratings has downgraded these ratings of Oceanografia S.A. de
C.V.:

  -- Foreign currency Issuer Default Rating to 'B-' from 'B';

  -- Local currency IDR to 'B-'from 'B';

  -- US$335 million senior secured notes due 2015 to 'B/RR3' from
     'B+/RR3'.

In addition, all of these ratings have been placed on Rating Watch
Negative.

The downgrade reflects poor cash flow generation in the third
quarter of 2008 which resulted in a latest-12-months EBITDA of
US$104 million, a decline from US$135 million during 2007.  The
poor performance of the company during the past quarter
exacerbates the company's weak liquidity position.

As of Sept. 30, 2008, Oceanografia's liquidity comprised
US$10 million of cash and marketable securities and a
US$9 million revolver.  Short-term debt was approximately
US$200 million.  The strong liquidity restrictions in the national
and international markets and the difficulty to monetize accounts
receivables of about $300 million have raised Oceanografia's
refinancing risk.  Most of these receivables are with PEMEX, the
company's key client, whose accounts receivables can not be
securitized under Mexican law.

As of Sept. 30, 2008, Oceanografia had US$633 million of total
debt compared to $499 million at the end of 2007, resulting in a
leverage ratio (Debt/EBITDA) of 6.1 times compared to 3.7x in
2007.  Including Oceanografia's pending vessels acquisitions
leverage would increase even further.  Credit protection measures
are likely to remain under pressure in the near term due to the
expected lower cash flow generation at the end of the year and the
depreciation of the Mexican peso.

The Negative Watch is based on the difficulties that Oceanografia
will have to re-establish its liquidity position in the short term
and a more uncertain business environment.  In 2009, lower oil
prices could drive PEMEX to postpone investments or delay payments
to Oceanografia.  In 2008, the company received covenant relief
from its banks.  Given the company's current situation, it likely
will have to request waivers and/or ask for an extension of
maturity dates with its banks.

Oceanografia is a privately held marine contracting service
company that provides marine services to PEMEX.  The company began
operations primarily as an engineering and consulting company over
40 years ago and has grown to be a key provider of vessel
chartering, inspection, maintenance and repair.  In 2005,
Oceanografia entered the underwater pipeline construction
business, which is a higher margin, more cyclical segment than
Oceanografia's traditional business segments.  During 2007, 72% of
Oceanografia's revenues were derived from pipeline construction.
Maintenance and repair work were the second largest segment of the
company's business portfolio, accounting for 17% of revenues,
while vessel chartering accounted for the remaining 11% of
revenues.


PARMALAT SPA: US Court Lets Lawsuit Against Deloitte to Proceed
---------------------------------------------------------------
Grant McCool at Reuters reports that Judge Lewis Kaplan of the
U.S. District Court in Manhattan has allowed a lawsuit by Parmalat
SpA shareholders against Deloitte Touche Tohmatsu -- the parent
company of accounting firm Deloitte & Touche LLP -- and its
affiliates.

Reuters relates that buyers of Parmalat shares between January
1999 and December 2003, the month that the dairy company was
declared insolvent in Italy, filed the lawsuit against Deloitte
Touche in 2004.  The report says that Parmalat and its
subsidiaries collapsed after the discovery of a fraud involving
the understatement of the company's debt by almost $10 billion and
overstatement of net assets by $16.4 billion.

According to Reuters, Judge Kaplan denied Deloitte's request to
dismiss the complaint against Parmalat's accountants, banks, and
others.  Deloitte Touche had "exercised substantial control over
the manner in which the member firms conducted their professional
activities," Reuters says, citing Judge Kaplan.  The report states
that Deloitte Touche's members are Deloitte & Touche SpA in Italy
and Deloitte & Touche in the U.S.

Deloitte, according to Reuters, said that it was "confident of
victory" at any trial of the matter.  Deloitte said in a
statement, "Deloitte U.S. issued no audit reports on Parmalat and
had nothing to do with Parmalat's alleged misconduct.  The same
judge has dismissed two complaints filed against Deloitte U.S. for
their audits of Parmalat's U.S. operations.  Deloitte Touche
Tohmatsu is a Swiss Verein (membership association) and provided
no services of any kind to any Parmalat entity."

Reuters quoted Stuart Grant, the attorney for the Parmalat
shareholders, as saying, "Judge Kaplan's ruling finally makes the
law meet with reality.  These accounting firms sell themselves as
a seamless worldwide organization and finally they are going to be
held responsible for the organization they created."

Deloitte had argued that the Parmalat shareholders failed t
present any facts as to whether Deloitte Touche and Deloitte Italy
had a principal-agent relationship, Reuters states, citing Judge
Kaplan.  "Plaintiffs, however, point to numerous facts that could
be taken as indicating that DTT structured and conducted itself in
a manner that permitted it to exercise control over its member
firms, including Deloitte Italy," Reuters quoted him as saying.

Headquartered in Milan, Italy, Parmalat S.p.A.
-- http://www.parmalat.net/-- sells nameplate milk products
that can be stored at room temperature for months.  It also has
about 40 brand product lines, which include yogurt, cheese,
butter, cakes and cookies, breads, pizza, snack foods and
vegetable sauces, soups and juices.

The company's U.S. operations filed for chapter 11 protection on
Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139).  Gary
Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal &
Manges LLP, represent the Debtors.  When the U.S. Debtors filed
for bankruptcy protection, they reported more than
US$200 million in assets and debts.  The U.S. Debtors emerged from
bankruptcy on April 13, 2005.

Parmalat S.p.A. and its Italian affiliates filed separate
petitions for Extraordinary Administration before the Italian
Ministry of Productive Activities and the Civil and Criminal
District Court of the City of Parma, Italy on Dec. 24, 2003.
Dr. Enrico Bondi was appointed Extraordinary Commissioner in
each of the cases.  The Parma Court has declared the units
insolvent.

On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No.
04-14268, in the United States Bankruptcy Court for the Southern
District of New York.

Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat
Capital Finance Ltd., and Food Holdings Ltd.  Dairy Holdings and
Food Holdings are Cayman Island special-purpose vehicles
established by Parmalat S.p.A.  The Finance Companies are under
separate winding up petitions before the Grand Court of the Cayman
Islands.  Gordon I. MacRae and James Cleaver of Kroll (Cayman)
Ltd. serve as Joint Provisional Liquidators in the cases.  On Jan.
20, 2004, the Liquidators filed Sec. 304 petition, Case No. 04-
10362, in the United States Bankruptcy Court for the Southern
District of New York.  In May 2006, the Cayman Island Court
appointed Messrs. MacRae and Cleaver as Joint Official
Liquidators.  Gregory M. Petrick, Esq., at Cadwalader, Wickersham
& Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon,
Herlands Randolph, represent the Finance Companies in the Sec. 304
case.

The Honorable Robert D. Drain presides over the Parmalat Debtors'
U.S. cases.  On June 21, 2007, the U.S. Court granted Parmalat
permanent injunction.

(Parmalat Bankruptcy News, Issue No. 108; Bankruptcy Creditors'
Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000).


PERFUMANIA HOLDINGS: To Pay Default Interest on $250MM Credit
-------------------------------------------------------------
Perfumania Holdings Inc., said it would pay additional interest
after it violated a leverage covenant on its $250 million
revolving credit, which violation constitutes an event of default.

Perfumania said in a regulatory filing that at November 1, 2008,
it was not in compliance with the maximum leverage ratio covenant
under its $250 million revolving credit facility with a syndicate
of banks for which General Electric Capital Corporation serves as
agent.  Non-compliance with this covenant constitutes an Event of
Default under the Senior Credit Facility.

On January 22, 2009, GE notified Perfumania that, effective on
January 23, 2009, based on the continuance of the Event of
Default, GE has elected to impose the Default Rate of interest on
outstanding borrowings as permitted by the Senior Credit Facility.
The Default Rate is 2% higher than the interest rate otherwise
applicable to outstanding borrowings under the Senior Credit
Facility, which is currently the higher of (i) The Wall Street
Journal corporate "base rate" or (ii) the federal funds rate plus
0.50%, plus in either case a margin of 1.25%. The Default Rate
will apply until the Event of Default has been cured or waived.

Perfumania also has outstanding obligations aggregating $55
million to certain trusts established by, and $35 million to a
corporation owned by, members of the Nussdorf family, who are
principal shareholders of the Company. These obligations bear
interest at a rate equal to 2%, for the trusts, and 1%, for the
corporation, over the rate in effect from time to time on the
revolving loans under the Senior Credit Facility.  Accordingly, as
of January 23, 2009, the 2% increase in the interest rate on the
Senior Credit Facility caused similar increases in the rates
payable on these obligations. No interest was payable under any of
these obligations until January 31, 2009. However, all these
obligations are subordinated to the Senior Credit Facility, and no
payments may be made on any of these obligations until the Event
of Default under the Senior Credit Facility has been cured or
waived.  This constitutes a default under each of the subordinated
obligations.

As a result, commencing on February 13, 2009, each of the
subordinated obligations will also accrue additional interest at
the 3% default rate provided by their terms until the Company is
permitted to begin making payments on those obligations.  As
provided in the subordination agreement with GE, this additional
default interest amount may not be paid until the Senior Credit
Facility is paid in full and terminated.

In addition, Perfumania has outstanding a $5 million convertible
note held by Stephen and Glenn Nussdorf. This note, which is also
subordinated to the Senior Credit Facility, bears interest at the
prime rate plus 1%, requires quarterly interest payments, and
matures on January 29, 2009. As a result of the Event of Default
under the Senior Credit Facility, the Company was prohibited by
the subordination agreement with GE from making the December 31,
2008 interest payment under the convertible note. This triggered a
default under the convertible note, resulting in an increase of 2%
in the applicable interest rate. As provided in the subordination
agreement with GE, neither the principal of the convertible note
nor this additional default interest amount may be paid until the
Senior Credit Facility is paid in full and terminated.

The Event of Default under the Senior Credit Facility also permits
the lenders to accelerate the indebtedness and terminate the
Senior Credit Facility, which would cause all amounts outstanding,
including all accrued interest and unpaid fees, to become
immediately due and payable. Management has requested a waiver of
non-compliance from the lenders and while management believes that
the Company will receive such waiver, there can be no assurance
that the waiver will be received or that there will not be a
material cost for a waiver. Any such action taken by the lenders
could result in the Company's having to refinance the Senior
Credit Facility and obtain an alternative source of financing. Due
to the current weakness in the credit markets, there is no
assurance that such financing would be obtained, or if such
refinancing is obtained, that the terms of a new facility would be
on terms comparable to the current Senior Credit Facility. If the
Company is unable to obtain such financing, its operations and
financial condition would be materially adversely affected and it
would be forced to seek an alternative source of liquidity, such
as by selling additional securities, to continue operations, or to
limit its operations.

According to Bloomberg's Bill Rochelle, the stock fell 41 cents
Jan. 28 to a 52-week low of $3.46 in trading on the Nasdaq Stock
Market. The one-year high was $27.96 on Feb. 13, 2008.

                    About Perfumania Holdings

Perfumania Holdings Inc., formerly E Com Ventures, Inc., performs
all its operations, through two wholly owned subsidiaries,
Perfumania, Inc. (Perfumania), which is a specialty retailer and
wholesaler of fragrances and related products, and perfumania.com,
Inc., (perfumania.com), which is an Internet retailer of
fragrances and other specialty items. Perfumania operates a chain
of retail stores in the sale of fragrances at discounted prices up
to 75% below the manufacturers' suggested retail prices.
Perfumania's wholesale division distributes fragrances and related
products to an affiliate. Perfumania.com offers a selection of the
Company's products for sale over the Internet and serves as an
alternative shopping experience to Perfumania retail customers.
The Company operates in two industry segments, specialty retail
sales and wholesale distribution of fragrances and related
products. In August 2008, the Company announced that it had
completed the acquisition of Model Reorg, Inc.


PILGRIM'S PRIDE: Can Hire Baker & McKenzie as Special Counsel
-------------------------------------------------------------
Judge Michael Lynn of the U.S. Bankruptcy Court for the Northern
District of Texas authorizes Pilgrim's Pride Corporation and its
debtor-affiliates to employ Baker & McKenzie LLP as special
counsel.

William Snyder, the Debtors' chief restructuring officer, has said
the Debtors require Baker & Mckenzie's assistance with several
important matters, including asset sales, postpetition financing
transactions, corporate matters that are supportive of the
bankruptcy restructuring, collection and analysis of information
needed in these Chapter 11 cases, and litigation.

Baker & Mckenzie's long-standing relationship with the Debtors
gave it great deal of knowledge about the Debtors' business and
financial affairs, Mr. Snyder has told the Court.  Baker and
Mckenzie has been the Debtors' primary corporate, securities,
finance, intellectual property, employment benefits, immigration,
tax and litigation counsel for a number of years, he tells the
Court.

As special counsel, Baker & Mckenzie will represent and advise
the Debtors in connection with:

  * general corporate Securities and Exchange Commission
    matters;

  * domestic and international labor, employment, benefits and
    immigration  matters;

  * intellectual property matters;

  * ongoing litigation and governmental investigation matters
    and future litigation or governmental investigation matters;

  * tax matters;

  * other non-bankruptcy matter;

  * postpetition financing transactions; and

  * corporate matters that are supportive of the Chapter 11
    case.

Baker & McKenzie will also assist the Debtors with gathering
information needed in their Chapter 11 cases.

Baker & Mckenzie will be compensated on an hourly basis, plus
reimbursement of actual, necessary expenses incurred by the law
firm.  Baker & Mckenzie's hourly rates are:

  Professional                    Hourly rate
  ------------                    -----------
  Partners                        $400 - $850
  OF counsel                      $395 - $825
  Associates                      $250 - $570
  Para-professionals               $80 - $210

David W. Parham, a partner at Baker & McKenzie, has ascertained
that his law firm is a "disinterested person" as defined by
Section 101(14), and does not hold any interest adverse to the
Debtors' estates.

Mr. Parham said the Debtors paid $6,846,570 to Baker & Mckenzie
for the services and expenses it incurred during the first 90 days
prior to the Petition Date.  The firm has $350,000 remaining as
retainer balance.  The Debtors have agreed that any portion of the
advance payment remaining in retainer not used as compensation for
Baker & Mckenzie for its prepetition services and expenses will be
used by Baker & Mckenzie to apply against other Baker & Mckenzie
bills and will be placed in a segregate account.

Mr. Parham further said, among others, that Baker & McKenzie
currently represents certain of the Debtors' officers, directors
and employees in litigation in which those individuals' interests
are aligned with the Debtors' interests.  In particular, Baker &
McKenzie represents Pilgrim's Pride Corporation and Lonnie "Bo"
Pilgrim, Lonnie Ken Pilgrim, Rick Cogdill, Clinton Rivers and
Clifford Butler in two class action securities cases brought
against Pilgrim's Pride Corporation and those individuals.

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 Corp. and six other affiliates filed Chapter 11
petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No.
08-45664).  The Debtors' operations in Mexico and certain
operations in the United States were not included in the filing
and continue to operate as usual outside of the Chapter 11
process.

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.

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


PILGRIM'S PRIDE: Files Schedules of Assets and Liabilities
----------------------------------------------------------
Pilgrim's Pride Corp. delivered to the U.S. Bankruptcy Court for
the Northern District of Texas its schedules of assets and
liabilities, disclosing:

A.    Real Property                                 $709,271,024
     See list at http://bankrupt.com/misc/ppc_props.pdf

B.    Personal Property
B.1   Cash on hand - Petty cash                          145,962
B.2   Bank Accounts
      Checking, Savings or other financial
      accounts Certificates of deposit, or
      shares in banks savings and loan, thrift,
      building and loan brokerage houses, or
      cooperatives                                   16,826,410

B.3   Security Deposit
        Prepaid Insurance                               468,711
        Prepaid Commodity Futures                     1,664,157
        Prepaid Legal Services                        5,491,523
        Prepaid - Other                               1,996,431
        Security Deposits                               595,550

B.9   Insurance Policies
      John Hancock Life Insurance Company
      (Lonnie "Bo" Pilgrim as insured) with
      Pilgrim's Pride Corp. as beneficiary              554,757

      Northwest Mutual Life Insurance Co.
      (various former Gold Kist employees
      listed as insured and Gold Kist Inc.
      as listed beneficiary                           7,148,749

B.12  Interests in IRA, ERISA, or other pension plans
        Deferred trust assets in company's
        deferred compensation plan                   16,051,620

        GoldKist Benefit Plan Trusts                  4,029,951

B.13  Business Interests and Stocks
        Agriland Stock                                    1,000
        Valley Rail                                     201,631
        PPC Marketing                                       272
        Pilgrim's Pride Funding                       2,501,000
        Pilgrim's Pride Affordable Housing              201,000
        Pilgrim's Pride of Nevada                    11,100,004
        Avicola Pilgrim's Pride de Mexico            32,989,202
        Luker Inc.                                      398,170
        GC Properties                                     9,894
        PPC of Alabama, Inc.                            559,816
        PPC of Delaware                                  26,980
        PFS Distribution Company                      4,908,123
        PPC of West Virginia, Inc.                   69,899,077
        Texas Egg Products LLC                          135,959
        Tyson Rail Partnership                          584,432
        ADM/Pilgrim's Pride LLC Equity                4,166,204
        CoBank Equity "E" Stock                       2,948,927
        Universal Cooperative                         2,920,747
        Farm Credit Services                              2,000
        Southern Hens, Inc.                             178,550
        Mayflower Insurance Company                   1,250,000
        GK Insurance Company                          2,500,000
        Other Cooperatives                               35,552
        Merit Provisions, LLC                           490,000
        Delaware Business Trust                      23,526,547
        Pilgrim's Turkey Co.                         20,218,568

B.16  Accounts Receivable
        Trade, net of uncollectible accounts        292,168,875
        Property, plant & equipment sold
           awaiting receipt of proceeds               2,147,191

B.18  Other Liquidated Debts
         Tax refund - Internal Revenue Service       16,240,997

B.22  Patents
         Gold Kist Trade Name                         4,766,662

B.23  Licenses, franchises & other intangibles
         Gold Kist Non-compete Agreements               108,338
         Gold Kist Customer Relationships            43,480,770

B.25  Vehicles
         Trucks                                         107,934
         Utility Equipment                            1,838,349
         Trailers                                        23,829

B.28  Office Equipment, furnishings, and supplies     34,224,454
B.29  Machinery, fixtures, equipment and supplies    530,592,003
B.30  Inventory                                      740,126,234
B.35  Other Personal Property
        Assets Held for Sale: Land                      188,955
        Assets Held for Sale: Buildings               8,347,158
        Assets Held for Sale: Equipment               5,765,592
        Assets Held for Sale: Furniture                 176,167
        Assets Held for Sale: Vehicles                   37,526
        Deferred Tax Asset                           13,919,979
        Investment in Lake Property                   3,252,735
        Capitalized Loan Financing Costs             23,021,184
        Land under Construction                       4,577,956
        Buildings under Construction                 14,596,782
        Furniture under Construction                     49,813
        Equipment under Construction                 33,974,703
        Other Items under Construction                4,247,401

    TOTAL SCHEDULED ASSETS                       $2,723,980,108
    ===========================================================

C.    Property Claimed as Exempt                              $0

D.    Creditors Holding Secured Claims
         BMO Capital Markets Financing, Inc.        310,795,372
         CoBank, as Administration Agent          1,126,398,471

E.    Creditors Holding Unsecured Priority Claims
        Payroll                                         468,236
        Austin, Texas Internal Revenue Service        4,906,054
        Other Taxes                                     911,374

  See list at: http://bankrupt.com/misc/ppc_unsec_prioclaims.pdf

F.    Creditors Holding Unsecured
        Airgas Dryice                                 1,319,084
        American Express, Inc.                        1,263,587
        Aviagen, Inc.                                 2,905,094
        Bank of New York Mellon                       7,344,731
        C R England & Sons, Inc.                      1,793,320
        Cobb Vantress, Inc.                           2,040,144
        CSXT N/A 105577                               1,446,733
        Demeter LP                                    1,067,710
        Elkhart Grain                                 1,290,843
        Motion Industries, Inc.                       1,003,659
        Packaging Specialties, Inc.                   1,087,791
        Riceland Foods, Inc.                          1,637,718
        Tate & Lyle Ingredients                       1,148,641
        Trouw Nutrition USA, LLC                      1,365,016
        Union Pacific Railroad Co.                    1,013,911
        Wells Fargo                                 262,155,381
        Younglove Construction                        1,354,790
        Others                                      191,694,539

  See lists at:
    http://bankrupt.com/misc/ppc_unsec_nonprio_claims1.pdf
    http://bankrupt.com/misc/ppc_unsec_non_prio_claims2.pdf

   TOTAL SCHEDULED LIABILITIES                   $1,926,412,199
   ============================================================

Pilgrim's Pride also filed with the Court its statement of
financial affairs.  Pilgrim's Pride Corp. reports that during the
two years immediately preceding the Petition Date, it received
income from gross sales from operations, excluding intercompany
operations:

  Amount              Date
  ------              ----
  $1,229,726,796      Sept. 28, 2008 to Nov. 29, 2008
   7,678,730,560      Sept. 30, 2007 to Sept. 28, 2008
   6,661,106,030      Oct. 1, 2006 to Sept. 29, 2007

The Debtor said that it received $301,569 in the form of interest
income for the period September 30, 2007 to September 27, 2008
for the fiscal year 2008.

According to William Snyder, Pilgrim's Pride Corp.'s chief
restructuring officer, the Debtor made payments to more than a
thousand creditors within 90 days immediately preceding the
Petition Date, with the value of each transfer not less than
$5,475.  A list of the 90-Day transfers is available for free at:

      http://bankrupt.com/misc/ppc_90day_transfers.pdf

Mr. Snyder says that the Debtor also gave gifts or charitable
contributions within one year preceding the Petition Date, except
ordinary and usual gifts to family members aggregating less than
$200 in value per individual family, and charitable contributions
aggregating less than $1,000 per recipient.  A list of the gifts
and contributions is available for free at:

           http://bankrupt.com/misc/ppc_gifts.pdf

The losses of the Debtor from fire, theft, other casualty or
gambling within one year preceding the Petition Date or since the
Petition Date are:

  Description                Description of
  Property value             Circumstance                  Date
  --------------            --------------                 ----
  Protein Conversion         Electrical arc ignited    7/21/2008
  Facility in Mt. Pleasant,  destroying 75% of the
  Texas                      protein conv. facility

  Processing Facility in     Fuel ignited and caused   1/14/2008
  Gainsville, GA             a boiler explosion

The payments or property transfers made by the Debtor to any
other person on behalf of the Debtor's consultation concerning
debt consolidation, relief under the bankruptcy law or
preparation of the petition in bankruptcy within one year
immediately preceding the Petition Date were paid to:

  Name of Payee                          Amount         Date
  ---- --------                          ------         ----
  Ableco Finance LLC                   $250,000     10/09/08
  Alvarez & Marshall                  1,025,970     11/25/08
  Bain Corporate Renewal Group, LLC   2,147,500     11/04/08
  Baker & McKenzie                    6,367,092     11/28/08
  Bank of Montreal                      325,240     10/27/08
  Caylon                                147,000     11/25/08
  Campbell Killin Brittan & Ray, LLC     13,999     10/27/08
  CoBank                              1,169,725     11/25/08
  CRG Partners                          751,931     11/28/08
  Fairway Finance Company, LLC          363,160     11/25/08
  FTI Consulting                      1,161,641     11/26/08
  Fullbright & Jaworski LLP             644,625     11/25/08
  ING                                   426,000     11/28/08
  Kurtzman Carson Consultants            77,715     11/21/08
  Lazard Freres & Co. LLC             1,765,284     11/28/08
  Mayer Brown LLP                       238,741     11/28/08
  Merrill Communications LLC              5,413     10/23/08
  Morgan Lewis & Bockius LLP            502,117     11/23/08
  Patton Bogs LLP                        20,859     11/26/08
  Weil Gotshal & Manges LLP           2,700,000     11/24/08

PPC acquired the assets of Gold Kist in January 2007, for
$1,139,000,000.  PPC sold assets of its Turkey Business for
$18,600,000 in March 2008.

Within two years immediately preceding the Petition Date, Richard
A. Cogdill, chief financial officer, secretary and treasurer,
served as bookkeeper or accountant and supervised the keeping of
PPC's books and records.  Within two years preceding the filing
of the Debtors' bankruptcy Case, the corporation's books of
accounts and records were audited by Ernst & Young LLP.

At the Petition Date, PPC's books and records were in the
possession of Richard A. Cogdill and Gary D. Tucker.

These officers or directors own, control, or hold 5% or more of
the voting securities of PPC:

Direct Ownership
----------------
Pilgrim's Pride Corporation            Sole Shareholder

Indirect Ownership
------------------
Lonnie "Bo" Pilgrim                     Shareholder
Lonnie Ken Pilgrim                      Shareholder
Pilgrim Interests, Ltd.                 Shareholder
FMR LLC                                 Shareholder
M&G Investment Management Ltd           Shareholder
S.A.C. Capital Advisors, LLC            Shareholder
Eastbourne Capital Management, LLC      Shareholder

Directors
-----------
Lonnie "Bo" Pilgrim                     Senior Chairman
Lonnie Ken Pilgrim                      Chairman
Charles L. Black                        Director
Linda Chavez                            Director
S. Key Coker                            Director
Keith W. Hughes                         Director
Blake D. Lovete                         Director
Vance C. Miller, Sr.                    Director
Donald L. Wass, PhD                     Director
James G. Vetter, Jr.                    Director

Officers
--------
J. Clinton Rivers                       President and CEO
Richard A. Cogdill                      Chief Financial Officer
Robert A. Wright                        Chief Operating Officer

The last two inventories on PPC's property were taken in October
and November 2008.  The amount of the October inventory was
$805,967,151 and the amount of the November inventory was
$740,126,234.  Both inventories were supervised by Jason
Brownlee.

Pilgrim's Pride made withdrawals within one year immediately
preceding the Petition Date.  A list of those withdrawals is
available for free at:

  http://bankrupt.com/misc/ppc_withdrawals.pdf

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 Corp. and six other affiliates filed Chapter 11
petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No.
08-45664).  The Debtors' operations in Mexico and certain
operations in the United States were not included in the filing
and continue to operate as usual outside of the Chapter 11
process.

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.

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


PILGRIM'S PRIDE: Gets Go-Signal to Hire Weil Gotshal as Counsel
---------------------------------------------------------------
Judge Michael Lynn authorizes Pilgrim's Pride Corp. and its
affiliates to employ Weil Gotshal & Manges, LLP, as lead
bankruptcy counsel.

As bankruptcy counsel, WG&M will:

  (a) take all necessary action to protect and preserve the
      Debtors' estates, including the prosecution of actions on
      the Debtors' behalf, the defense of any actions commenced
      against the Debtors, the negotiation of disputes in which
      the Debtors are involved, and the preparation of
      objections to claims filed against the Debtors' estates;

  (b) prepare on behalf of the Debtors, as debtors-in-
      possession, all necessary motions, applications, answers,
      orders, reports, and other papers in connection with the
      administration of their estates;

  (c) to take all necessary actions in connection with a Chapter
      11 plan of reorganization and related disclosure statement
      and all related documents, and further actions as may be
      required in connection with the administration of the
      Debtors' estates; and

  (d) perform all other necessary legal services in connection
      with the prosecution of the Chapter 11 cases.

The Debtors will pay WG&M's according to its current customary
hourly rates at:

  Professional               Hourly Rates
  ------------               ------------
  Members and counsel        $675 to $950
  Associates                 $355 to $630
  Paraprofessionals          $155 to $290

The Debtors will also reimburse WG&M of its necessary expenses.

Stephen A. Youngman, a member of WG&M, attests that his firm is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code, and does not represent any interest
adverse to the Debtors or their estates.

Mr. Youngman discloses that in the one year prior to December 1,
2008, WG&M received $2,700,000 from the Debtors on account of
services to be performed and expenses incurred in connection with
the services to be provided by WG&M, including  the commencement
and prosecution of the Debtors' Chapter 11 cases.

As of the Petition Date, the fees and expenses incurred by WG&M
and debited, or input into WG&M's billing system to be debited,
against the amounts advanced to it by the Debtors approximated
$2,393,000.  The precise amount will be determined upon the final
recording of all time and expense charges.

Accordingly, as of the Petition Date, WG&M had a remaining credit
balance in favor of the Debtors in the approximate amount of
$300,000 for additional professional services performed and to be
performed and expenses incurred and to be incurred in connection
with the Chapter 11 cases.  After application of amounts for
payment of any additional prepetition professional services and
related expenses, the excess advance amount will be held by WG&M
in accordance with the Local Rules for the Northern District of
Texas, in a trust account for application to and payment of
postpetition fees and expenses that are allowed by the Court.

Mr. Youngman also discloses that WG&M has, in the past,
represented underwriters in connection with certain debt
instruments issued by the Debtors, including Credit Suisse,
Lehman Brothers, Legacy Partners Group, LLC, Merrill Lynch & Co.,
JP Morgan Chase, Morgan Stanley, Donaldson, Lufkin & Jenrette,
and A.G. Edwards.  WG&M will not represent these entities in
connection with the Chapter 11 cases.

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 Corp. and six other affiliates filed Chapter 11
petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No.
08-45664).  The Debtors' operations in Mexico and certain
operations in the United States were not included in the filing
and continue to operate as usual outside of the Chapter 11
process.

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.

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


PILGRIM'S PRIDE: Panel Taps Andrews Kurth as Bankruptcy Counsel
---------------------------------------------------------------
Judge Michael Lynn of the U.S. Bankruptcy Court for the Northern
District of Texas approved, on an interim basis, request of the
Official Committee of Unsecured Creditors in the bankruptcy cases
of Pilgrim's Pride Corp. and its affiliates, to hire Andrews Kurth
LLP, as bankruptcy counsel.

Judge Lynn gave parties-in-interest until February 1, 2009, to
file an objection.  If no objections are timely filed and
received, the Order will become final without any further action
or the Court.

The Committee selected AK because of its significant expertise in
the bankruptcy and restructuring arenas.  The Committee has told
the Court that the retention of AK as counsel is necessary and
appropriate under the circumstances given that the firm has
substantial experience in the bankruptcy and restructuring,
corporate, and tax areas.  Due to the breadth of practice
disciplines and expertise within AK, the Committee said AK has
the ability to assist it and its constituents.

As counsel, Andrews Kurth will:

  (a) advise the Committee with respect to its rights, powers
      and duties in these cases;

  (b) advise and consult with the Committee concerning (i)
      legal questions arising in administering the Debtors?
      estates and (ii) unsecured creditors' rights and remedies
      in connection with the estates;

  (c) analyze the various facets of the Debtors' cases,
      including acts, conduct, assets, liabilities, intercompany
      relationships and claims and financial condition of the
      Debtors, the existence of estate causes of action and the
      operation of the businesses;

  (d) work with the Debtors concerning the administration of
      their Chapter 11 cases;

  (e) preserve, protect and maximize the value of the
      Debtors' assets;

  (f) prepare pleadings, motions, answers, notices, orders,
      and reports that are necessary or required for the
      protection of the Committee's interests and the orderly
      administration of the Debtors' estates;

  (g) work to formulate, prepare and confirm a Chapter 11
      plan of reorganization for the Debtors which maximizes
      value to creditors;

  (h) review and analyze all applications, motions, orders,
      statements of operations and schedules filed with the
      Court and advising the Committee with respect thereto; and

  (i) perform any and all other legal services for the
      Committee that the Committee determines are necessary
      and appropriate to faithfully discharge its duties or
      otherwise relevant to these Chapter 11 cases.

For its services, Andrews Kurth will be compensated at its
established hourly rates and reimbursed of reasonable necessary
out-of-pocket expenses.  The firm's hourly rates are:

  Professional                    Hourly rate
  ------------                    -----------
  Paul N. Silverstein, Esq.              $910
  Jason S. Brookner, Esq.                 585
  Jonathan I. Levine, Esq.                545
  Other Attorneys                $250 to $910
  Paraprofessionals               $90 to $275

Paul N. Silverstein, Esq., a member at Andrews Kurth, has assured
the Court that his firm does not hold or represent any interest
adverse to the Committee or to its constituents in connection
with the Debtors' Chapter 11 cases.

Bank of Montreal, as agent for the DIP Lenders and as Prepetition
BMO lenders, on behalf of the Lenders, disagreed with the
Debtors' application for the employment of Andrews Kurth pursuant
to Section 328, unless the orders providing for its employment
specifically provide that its compensation will be pursuant to
the provisions of Section 330.

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 Corp. and six other affiliates filed Chapter 11
petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No.
08-45664).  The Debtors' operations in Mexico and certain
operations in the United States were not included in the filing
and continue to operate as usual outside of the Chapter 11
process.

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.

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


PILGRIM'S PRIDE: Files Amendment to Annual Report
-------------------------------------------------
Pilgrim's Pride Corporation filed on January 26, 2009, Amendment
No. 1 on Form 10-K/A to the company's Annual Report for the fiscal
year ended September 27, 2008, originally filed on December 11,
2008.  The Amendment includes information required by Part III and
not included in the Original Filing as the company will not file
its definitive proxy statement within 120 days of the end of the
Company's fiscal year ended September 27, 2008.

Part III refers to:

   -- directors, executive officers and corporate governance

   -- executive compensation

   -- security ownership of certain beneficial owners and
      management and related stockholder matters

   -- certain relationships and related transactions, and
      director independence

   -- principal accountant fees and services

A full-text copy of Amendment No. 1 is available for free at:

              http://researcharchives.com/t/s?38cf

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).  The Debtors' operations in Mexico and certain
operations in the United States were not included in the filing
and continue to operate as usual outside of the Chapter 11
process.

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.

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


POLAROID CORP: Names Genii as Lead Bidder for Brand & Key Assets
----------------------------------------------------------------
Polaroid Holding Company has entered into a "stalking horse" Asset
Purchase Agreement with PHC Acquisitions, LLC, an affiliate of
Genii Capital, S.A., a Luxembourg based private equity firm. Under
the terms of the agreement, PHC Acquisitions would acquire certain
of the company's assets including, but not limited to, all of
Polaroid's intellectual property rights and the "Polaroid" name
and brand.

Genii Capital is a shareholder in Zink Imaging Inc., inventor and
manufacturer of ZINK Paper(TM) and the Zero Ink(TM) Printing
Technology. The technology is used in the Polaroid PoGo(TM)
Instant Mobile Printer and the recently introduced Polaroid
PoGo(TM) Instant Digital Camera.

Mary L. Jeffries, Polaroid's chief executive officer, said
entering into the Asset Purchase Agreement marks progress in
Polaroid's financial restructuring and provides a key milestone on
the path out of bankruptcy protection. "Genii Capital's interest
in Polaroid affirms the viability of the company and the brand.
Polaroid is going to emerge a sustainable business where people
are employed and vendors and customers will have an opportunity to
continue to do business with Polaroid."

Consummation of the transactions contemplated by the Asset
Purchase Agreement is subject to higher or otherwise better
offers, approval of the Bankruptcy Court and customary closing
conditions.

As part of the Asset Purchase Agreement, Polaroid Holding Company
is filing motions for orders granting authority to sell certain
assets to PHC Acquisitions, establishing bidding procedures,
designating PHC Acquisitions as the stalking horse bidder and
setting a hearing date on the sale of the assets. Upon the
Bankruptcy Court's approval of bidding procedures, Polaroid
Holding Company intends to engage in a bidding process with all
interested parties. The Asset Purchase Agreement and bidding
procedures specify terms with which any competing bids must comply
to be considered qualified for the bidding process.

                        About Genii Capital

Genii Capital(TM) is a private investment firm that focuses on
value creation by investing in innovative ideas, brands and
projects. Based in Luxembourg, Genii Capital's portfolio includes
cutting-edge companies in sectors such as telecommunication,
security, hosting services, alternative energies and consumer
electronics.

                   About Polaroid Corporation

Polaroid Corporation -- http://www.polaroid.com-- makes and
sells films, cameras, and other imaging products.  The company and
20 of its affiliates first filed for bankruptcy protection on
October 12, 2001 (Bankr. D. Del. Lead Case No. 01-10864).
Skadden, Arps, Slate, Meagher & Flom LLP represented the Debtors
in their previous restructuring efforts.  At that time, the
company blamed steep decline in its revenue and the resulting
impact on its liquidity.

On June 28, 2002, the U.S. Bankruptcy Court for the District of
Dealware approved the purchase of substantially all of Polaroid's
business by One Equity Partners.  The bid provides for cash
consideration of $255 million plus a 35% interest in the new
company for unsecured creditors.

Polaroid Corp., together with 11 affiliates, filed its second
voluntary petition for Chapter 11 on Dec. 18, 2008 (Bankr. D.
Minn., Lead Case No. 08-46617).  Judge Gregory F. Kishel handles
the Chapter 22 case.  James A. Lodoen, Esq., at Lindquist & Vennum
P.L.L.P, is the Debtors' counsel.

According to the company, the financial structuring process and
the second bankruptcy filing are the result of events at Petters
Group Worldwide, which has owned Polaroid since 2005.  The founder
of Petters Group and certain associates are currently under
investigation for alleged acts of fraud that have compromised the
financial condition of Polaroid and other entities owned by
Petters Group.  The company and its leadership team are not
subjects of the ongoing investigation involving Petters Group.


POLAROID CORP: Gets Permission to Access Lenders' Cash Collateral
-----------------------------------------------------------------
Polaroid Corp. obtained from the U.S. Bankruptcy Court for the
District of Minnesota permission to use its lender's cash
collateral.

According to Bloomberg's Bill Rochelle, Polaroid will survive at
least for now in the new reorganization begun Dec. 18 as a result
of having been granted authorization this week to use cash over
creditors' objections.

                   About Polaroid Corporation

Polaroid Corporation -- http://www.polaroid.com-- makes and
sells films, cameras, and other imaging products.  The company and
20 of its affiliates first filed for bankruptcy protection on
October 12, 2001 (Bankr. D. Del. Lead Case No. 01-10864).
Skadden, Arps, Slate, Meagher & Flom LLP represented the Debtors
in their previous restructuring efforts.  At that time, the
company blamed steep decline in its revenue and the resulting
impact on its liquidity.

On June 28, 2002, the U.S. Bankruptcy Court for the District of
Dealware approved the purchase of substantially all of Polaroid's
business by One Equity Partners.  The bid provides for cash
consideration of $255 million plus a 35% interest in the new
company for unsecured creditors.

Polaroid Corp., together with 11 affiliates, filed its second
voluntary petition for Chapter 11 on Dec. 18, 2008 (Bankr. D.
Minn., Lead Case No. 08-46617).  Judge Gregory F. Kishel handles
the Chapter 22 case.  James A. Lodoen, Esq., at Lindquist & Vennum
P.L.L.P, is the Debtors' counsel.

According to the company, the financial structuring process and
the second bankruptcy filing are the result of events at Petters
Group Worldwide, which has owned Polaroid since 2005.  The founder
of Petters Group and certain associates are currently under
investigation for alleged acts of fraud that have compromised the
financial condition of Polaroid and other entities owned by
Petters Group.  The company and its leadership team are not
subjects of the ongoing investigation involving Petters Group.


PROGRESSIVE GAMING: Enter Into Various Pacts With Private Equity
----------------------------------------------------------------
Between January 16, 2009 and January 19, 2009, Progressive Gaming
International Corporation and certain of its subsidiaries entered
into various agreements with Private Equity Management Group
Financial Corporation, PGIC's senior secured lender, and
International Game Technology and certain of its affiliates,
pursuant to which IGT acquired substantially all of PGIC's
domestic and foreign assets, along with all of PEM's rights under
PGIC's existing senior credit facility, for an aggregate cash
purchase price of $16,237,000.

Specifically, IGT acquired:

   1. all right and title of PGIC and its subsidiaries in
      collateral pledged by PGIC to PEM, pursuant to a Secured
      Party Assignment and Bill of Sale, dated January 16, 2009,
      executed by PEM for the benefit of IGT and its designees,
      accepted and consented to by IGT, PGIC and various PGIC
      subsidiaries;

   2. all shares in the capital of Progressive Gaming
      International (Netherlands) B.V., pursuant to a Share
      Purchase Agreement, dated January 16, 2009, among PGIC, PEM
      and IGT-Europe B.V.;

   3. all of the stock capital of PGIC Holdings Limited, pursuant
      to a Share Purchase Agreement, dated January 16, 2009,
      among PEM, PGIC and IGT-UK Gaming Limited;

   4. substantially all of the assets of Progressive Gaming
      International (Australasia) Pty Ltd, pursuant to an Asset
      Purchase Deed, dated January 16, 2009, among PEM, PGI
      Australia and IGT (Australia) Pty Ltd;

   5. all of the share capital of PGI (Macao) Limited, pursuant
      to a Sale of Shares in Share Capital, dated January 19,
      2009, among PGIC; PGI Australia; PGI Macao; PEM; IGT Asia,
      LDA; and IGT; and

   6. all of PEM's rights under PGIC's existing senior credit
      facility, pursuant to an Assignment and Acceptance
      Agreement, dated January 16, 2009, between PEM and PGIC and
      consented to by PEM and PGIC.

The company further disclosed that effective January 16, 2009,
Robert A. Parente resigned from the position of Executive Vice
President-Americas of PGIC to pursue other interests.

                     About Progressive Gaming

Progressive Gaming International Corporation --
http://www.progressivegaming.net/-- is a leading global supplier
of integrated casino and jackpot management solutions for the
gaming industry.

Standard & Poor's Ratings Services said that it lowered its
corporate credit rating on Progressive Gaming International
Corporation to 'D' from 'CCC', after Progressive announced on
Dec. 24, 2008, that it will allow its secured lender to foreclose
on its assets.

PGIC had violated covenants under its senior credit facilities for
the quarter ended Sept. 30, 2008.  On Nov. 7, 2008, PGIC's senior
lender issued an acceleration notice for the company's senior
secured revolving credit facility and term loan.  Subsequent to
this, the lenders entered into a forbearance agreement which
expired on Nov. 21, 2008.  The ratings were lowered ratings to 'D'
because the forbearance agreement between the lenders and PGIC has
expired without the loans being repaid, and because the lenders
are now pursuing recovery through the sale of collateral.


QPC LASERS: Receives Notice of Default from 10% Debenture Holders
-----------------------------------------------------------------
QPC Lasers, Inc., received a formal notice of default from one of
the holders of its May 2007 10% Secured Convertible Debentures.
The holder has demanded payment in cash for all amounts due under
the debentures.

Under the 2007 Debentures, upon the occurrence of an "Event of
Default", a holder of a 2007 Debenture may elect upon written
notice to the company to require the company to immediately pay
The holder an amount equal to the greater of

   i) 115% times the sum of (x) the aggregate outstanding
      principal amount of such debenture plus (y) all accrued and
      unpaid interest thereon for the period beginning on the
      issue date and ending on the date of payment of the Default
      Amount, plus (z) any accrued and unpaid Debenture Failure
      Payments and other required cash payments, if any (the
      outstanding principal amount of the debenture on the date
      of payment plus the amounts referred to in (y) and (z) is
      collectively known as the "Default Sum"); or

  ii) (a) the number of shares of the company's Common Stock that
      would be issuable upon the conversion of such Default Sum
      in accordance with the terms of 2007 Debentures, without
      giving any effect to any ownership limitations on the
      conversion of the 2007 Debentures contained therein,
      multiplied by (b) the greater of (i) the Closing Price (as
      defined therein) for the Common Stock on the default notice
      date or (ii) the Closing Price on the date the company pays
      the Default Amount.

If the Default Amount is not paid within five business days of
written notice that such amount is due and payable, then interest
will accrue on the Default Amount at 18% per annum, compounded
monthly.

A holder of a 2007 Debenture may elect upon written notice to the
company to require the company to issue, in lieu of payment of all
or any specified portion of the unpaid portion of the Default
Amount, a number of shares of Common Stock, subject to the
ownership limitations on the conversion of the 2007 Debentures
contained therein and the availability of sufficient authorized
shares), equal to all or the specified portion of the Default
Amount divided by the Default Reset Price then in effect.

As of Jan. 19, 2009, the aggregate outstanding principal amount
due under the 2007 Debentures was $16,030,420 and accrued and
unpaid interest totaled $921,487.

In addition, holders of the Debentures may have additional
remedies under the terms of the Security Agreements entered into
with the company as part of the financing with respect to the
collateral securing the company's obligations under the
Debentures, which consists of substantially all of the company's
assets.

                  January Conversion Price Reset
                  under 2007 and 2008 Debentures

The company is in default of its obligations under its 10% Secured
Convertible Debentures issued in April and May of 2007.  After an
Event of Default, the conversion price for the 2007 Debentures
will be decreased on the first trading day of each calendar month
thereafter until the Default Amount is paid in full, to a
conversion price equal to the lesser of (i) the conversion price
then in effect, or (ii) the lowest "Market Price" that has
occurred on any Default Adjustment Date since the date the Event
of Default began.  The "Market Price" is defined in the 2007
Debentures as the volume weighted average price of the common
stock during the ten consecutive trading days period immediately
preceding the date in question.  As of Jan. 1, 2009, the Default
Reset Price is $0.0004.

A holder of a 2007 Debenture may elect upon written notice to
require the company to issue, in lieu of payment of all or any
specified portion of the unpaid portion of the Default Amount, a
number of shares of common stock, subject to the ownership
limitations on the conversion of the 2007 Debentures contained
therein, equal to all or the specified portion of the Default
Amount divided by the Default Reset Price then in effect.
However, with the new lower conversion price, the company will not
be able to honor any conversions that cause its issued shares to
exceed the 180,000,000 shares authorized for issuance under its
Articles of Incorporation unless the company obtains shareholder
consent to authorize the issuance of additional shares.  As of
Jan. 16, 2009, the company has 170,021,623 shares of common stock
issued and outstanding.

In addition, the conversion price of the company's 10% Secured
Convertible Debentures issued in May and July of 2008 has been
adjusted to the Default Reset Price pursuant to the conversion
price adjustment provisions of the 2008 Debentures.  It is very
likely that the company will file for protection under Chapter 7
or Chapter 11 of the federal bankruptcy laws due to its lack of
cash and that its common stock will have no value after
liquidation of the company is completed.

                     About QPC Lasers, Inc.

QPC Lasers, Inc. designs and manufactures laser diodes through its
wholly-owned subsidiary, Quintessence Photonics Corporation.
Quintessence was incorporated in November 2000 by Jeffrey Ungar,
Ph.D. and George Lintz, MBA.  The Founders began as entrepreneurs
in residence with DynaFund Ventures in Torrance, California and
wrote the original business plan during their tenure at DynaFund
Ventures from November 2000 to January 2001.  The business plan
drew on Dr. Ungar's 17 years of experience in designing and
manufacturing semiconductor lasers and Mr. Lintz's 15 years of
experience in finance and business; the primary objective was to
build a state of the art wafer fabrication facility and hire a
team of experts in the field of semiconductor laser design.

As reported by the Troubled Company Reporter on Dec. 15, 2008, QPC
Lasers, Inc., disclosed in a regulatory filing with the
Securities and Exchange Commission that as of Dec. 1, 2008, the
Default Reset Price is $0.0021.

The company is in default of its obligations under its 10% Secured
Convertible Debentures issued in April and May of 2007.  After an
Event of Default, the conversion price for the 2007 Debentures
will be decreased on the first trading day of each calendar month
thereafter until the Default Amount is paid in full, to a
conversion price equal to the lesser of (i) the conversion price
then in effect, or (ii) the lowest "Market Price" that has
occurred on any Default Adjustment Date since the date the Event
of Default began.  The "Market Price" is defined in the 2007
Debentures as the volume weighted average price of the common
stock during the ten consecutive trading days period immediately
preceding the date in question.


REGAL ENTERTAINMENT: Moody's Keeps 'Ba3' Corporate Family Rating
----------------------------------------------------------------
Moody's Investors Service affirmed its Ba3 corporate family and
probability of default ratings for Regal Entertainment Group, as
well as the Ba2 ratings for Regal Cinemas Corporation's
$1.8 billion of senior secured bank credit facilities ($100
million revolving credit facility due 2011 and $1.65 billion term
loan facility due 2013).  The rating outlook remains stable.

The rating affirmations follow Regal's recent announcements
related to the amendment of its bank credit facilities and the
reduction of its quarterly dividend to $0.18 per share (from
$0.30 per share).  The dividend reduction improves free cash flow
(annual savings of approximately $75 million), more than
offsetting the modest impact of increased pricing, and the
amendment increases the cushion of compliance with bank financial
covenants.  As such, both actions modestly enhance liquidity and
lend support to maintenance of the Ba3 CFR and stable rating
outlook.

In conjunction with lower capital expenditures as projected and
notwithstanding increased pricing under the bank credit
facilities, Moody's anticipates that the reduced dividend will
result in modest yet positive free cash flow, with debt-to-EBITDA
expected to remain in the mid-5x range deemed acceptable for the
rating category.  Moreover, the bank amendment lessens the
restrictiveness of the company's financial maintenance covenants
(both the maximum consolidated adjusted leverage and maximum
consolidated leverage covenant will remain at current levels
through the second quarter of 2011), allows for the repurchase of
up to $300 million of the credit facility (for 270 days after the
effective date of the amendment, and permits the incurrence of
subordinated debt (up to $200 million) which would be excluded
from certain financial covenant calculations as a means of
potentially repaying amounts outstanding under its term loan
facility prior to maturity (the latter two of which presumably
would only occur at less than face values, if at all).  In
connection with the amendment, the company paid a 50bp fee and
will incur a 2% increase in pricing.

Moody's has taken these rating actions:

Regal Entertainment Group

  * Corporate Family Rating -- Affirmed Ba3
  * Probability of Default Rating -- Affirmed Ba3

Regal Cinemas Corporation

  * Senior Secured Bank Credit Facility -- Affirmed Ba2 (to LGD
    3, 40% from LGD 3, 39%)

The last rating action was on March 11, 2008 when Moody's affirmed
Regal's Ba3 CFR and PDR.

Regal Entertainment Group is the parent company of Regal Cinemas
and its subsidiaries.  Regal operates the largest theater circuit
in the United States, consisting of 6,782 screens in 551 theaters
in 39 states and the District of Columbia (as of September 25,
2008).  The company maintains its headquarters in Knoxville,
Tennessee.  The company's revenues for the twelve months ended
September 25, 2008 were $2.7 billion.


ROBERT L'ABBATE: Case Summary & Eight Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Robert Julius L'Abbate
        93 President Road
        Township Of Washingt, NJ 07676

Bankruptcy Case No.: 09-11845

Debtor-affiliates filing separate Chapter 11 petitions:

        Entity                                     Case No.
        ------                                     --------
LD II, LLC                                         09-11850
LRI II, LLC                                        09-11852
SkyMark Holdings, Inc.                             09-11853
Lakeview Liquors, LLC                              09-11855
Bergen 73, LLC                                     09-11856
Lancaster Property Management, LLC                 09-11857
High Point Holdings, LLC                           09-11858
Lakeview at High Point, LLC                        09-11859
High Point Golf Club, LLC                          09-11860
411 Brinkerhoff Avenue, LLC                        09-11861
Club Drive, LLC                                    09-11863

Chapter 11 Petition Date: January 28, 2009

Court: District of New Jersey (Newark)

Judge: Rosemary Gambardella

Debtor's Counsel: Heidi J. Sorvino, Esq.
                  hsorvino@sgrlaw.com
                  Smith, Gambrell & Russell, LLP
                  250 Park Avenue, Suite 1900
                  New York, NY 10177
                  Tel: (212) 907-9700
                  Fax: (212) 907-9800

Estimated Assets: $1 million to $10 million

Estimated Debts: $50 million to $100 million

The Debtor's Largest Unsecured Creditors:

   Entity                      Nature of Claim   Claim Amount
   ------                      ---------------   ------------
Oritani                        personal guaranty $2,0370,000
370 Pascack Road
Township Of Washington, NJ
07676

Grand Pacific Finance Corp.    personal guaranty $ 6361168
Wells Fargo NA
41-99 Main Street
Flushing, NY 11355

Kuiken Brothers Company, Inc.  vendor service    $500,000
PO Box 1040
Fair Lawn, NJ 07410

Mobile Group, LLC              297 Palisades Ave. $350,000
                               personal guaranty

Kind and Dasoff                personal guaranty $106,312

Lowenstein Sandler Attorneys   attorney services $103,922
at Law

Stuart Katz                    hold harmless     $103,908
                               agreement

Martin Ender                   hold harmless     $100,000
                               agreement


ROYCE INTERNATIONAL: Files Bare-Bones Chapter 11 Petition
---------------------------------------------------------
According to Bloomberg's Bill Rochelle, Royce International
Investment Co. filed a "bare-bones" Chapter 11 petition on Jan. 26
before the U.S. Bankruptcy Court for the Central District of
California.

According to Bloomberg, Royce's petition wasn't accompanied by the
motions and other papers typically filed on the first day of a
bankruptcy reorganization.  In its bankruptcy petition, it
estimated assets of $100 million to $500 million, and debts of
$50 million to $100 million.

Royce's largest unsecured creditor is American Integrated
Services, owed $685,595.

Daniel J. McCarthy, Esq., at Hill Farrer & Burrill LLP, in Los
Angeles California, represents Royce in its bankruptcy case.

Santa Barbara, California-based Royce International Investment Co.
owns partially developed real property in California and Colorado.


SAFENET INC: S&P Keeps 'B' Corp. Credit Rating; Outlook Positive
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it revised its
outlook on Belcamp, Maryland-based SafeNet Inc. to positive from
negative as a result of the completion of its 2006 and 2007
audited financial statements, and an improved financial profile
since its LBOtransaction in April 2007.  At the same time, S&P
affirmed the ratings on the company, including the 'B' corporate
credit rating.

"SafeNet had not filed its financial statements with the SEC since
the quarter ended March 2006 because of investigations into stock
options grant backdating," said Standard & Poor's credit analyst
David Tsui.  In April 2007, the company was acquired by its
sponsors in an LBO transaction, funded with proceeds from first
and second lien term loans totaling $370 million.  Under the terms
of the credit agreement, SafeNet has until March 31, 2009, to file
its 2008 and earlier audited financial statements.  The company
recently completed and filed its 2006 and 2007 audited financial
statements and S&P anticipates that 2008 will be completed in the
required timeframe.

The rating on SafeNet reflects S&P's view of the risks of
competition from larger vendors with stronger financial profiles,
its acquisitive growth strategy, and a still highly leveraged
financial profile.  At the same time, S&P believes these factors
are offset partially by the company's diversified product
portfolio and strong customer and partner relationships.

SafeNet's classified government segment faces competition from
larger defense contractors with greater financial resources and
broader technical capabilities.  Maintaining strong relationships
with the National Security Agency, the Department of Defense, and
other government agencies will be key to the company's growth in
this segment.  Revenues during the 12 months ended Sept. 30, 2008,
were up 7% year over year.  S&P believes SafeNet's revenue base is
supported by the current equipment upgrade cycle in the government
information technology security market, repeat businesses from the
commercial enterprise segment, and, to a lesser extent,
maintenance contracts and royalties.  SafeNet also has a modest
backlog, and S&P expects sales growth will be supported by ongoing
government IT security initiatives and an increase in wireless
network usage and security needs.  Operational streamlining
efforts have lifted EBITDA margins to the low-20% area from 19% in
2006.

Favorable market dynamics and acquisitions have enabled SafeNet to
diversify its product portfolio, resulting in strong revenue
growth over the past few years, and a quadrupling in size since
2003.  In January 2009, SafeNet's sponsor announced the proposed
acquisition of Aladdin Knowledge Systems, an Israel-based digital
rights management and enterprise security solutions provider, and
that it will eventually merge the two companies.  The nature of
the merger transaction is unclear at this point, but for purposes
of the rating, S&P assume SafeNet will fund the eventual net cost
of the acquisition of Aladdin with additional debt issuance.  The
merger transaction could potentially be more favorable from a
credit perspective.

Operating lease-adjusted leverage improved, with debt to EBITDA of
5.5x on September 30, 2008, down from 6.6x one year ago.  Beyond
Aladdin, S&P expects the company to limit itself to small tuck-in
acquisitions, and that cost savings and organic growth will
continue to increased EBITDA.  Based on S&P's assumption of debt
financing for the original net acquisition cost of the Aladdin
purchase, S&P expects that the eventual merger with Aladdin will
not materially impact leverage.


SEMGROUP LP: J. Catsimatidis May Present Plan by January 31
-----------------------------------------------------------
John A. Catsimatidis, chairman of Red Apple Group, may have a
plan of reorganization ready for SemGroup, L.P., and its debtor
affiliates by Jan. 31, 2009, the Tulsa World reported.

Mr. Catsimatidis previously said reorganization of SemGroup will
deliver far more value to the oil and energy trader's creditors
than liquidation.  Mr. Catsimatidis has met with various SemGroup
employees in late December 2008 to announce his intent of leading
the company's reorganization.  He obtained five of the nine seats
on SemGroup G.P., L.L.C.'s Management Committee, equivalent of
SemGroup L.P.'s board of directors, thus giving him enough
controlling stake to change the course of the oil company's
reorganization.

During a recently concluded omnibus hearing in SemGroup's
bankruptcy case, the Tulsa World related that Mr. Catsimatidis
informed Judge Brendan Linehan Shannon of the U.S. Bankruptcy
Court for the District of Delaware, of his timeline for the
company's reorganization.

SemGroup's chief executive officer, Terence Ronan said in a public
statement that the company will consider all restructuring
proposals, including any plan Mr. Catsimatidis may file for the
company.  Mr. Ronan also clarified that any reorganization plan
Mr. Catsimatidis may file still need the nods of SemGroup's
creditors and the approval of Judge Shannon.

SemGroup's bankruptcy counsel, Martin Sosland, Esq., at Weil,
Gotshal & Manges LLP, in Dallas, Texas, told Tulsa World on Jan.
23 that Mr. Catsimatidis has met with SemGroup's creditors and
financial advisers but has not offered a specific plan.

Tulsa World said Mr. Catsimatidis has vowed to put in
$450 million of his own money and $1 billion from a consortium of
possible investors to hold SemGroup and its affiliates together.

Mr. Ronan, in his statement, did not rule out the possibility of
selling SemGroup and its affiliates by selling off some units and
reorganizing other units.  Mr. Ronan did assure creditors that
SemGroup's management committee and officers are "committed to
maximizing recoveries for its creditors and equity holders as
required by the Bankruptcy Code."

Mark Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP, in
Wilmington, Delaware, represents Mr. Catsimatidis in SemGroup's
bankruptcy case.  Skadden Arps has filed a notice of appearance
in the bankruptcy case.

SemGroup and its debtor affiliates' exclusive right to file
reorganization plan runs until March 19, 2009.

                        About SemGroup LP

SemGroup L.P. -- http://www.semgrouplp.com/-- is a
midstream service company providing the energy industry means to
move products from the wellhead to the wholesale marketplace.
SemGroup provides diversified services for end users and consumers
of crude oil, natural gas, natural gas liquids, refined products
and asphalt.  Services include purchasing, selling, processing,
transporting, terminaling and storing energy.  SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.

SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-
11525).  These represent the Debtors' restructuring efforts: John
H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq.
at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P.
Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges
LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil
Gotshal & Manges LLP.  Kurtzman Carson Consultants L.L.C. is the
Debtors' claims agent.  The Debtors' financial advisors are The
Blackstone Group L.P. and A.P. Services LLC.

Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.

SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008.  Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act.  The CCAA stay expires on
Nov. 21, 2008.

SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts.  In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.


SEMGROUP LP: Serves Subpoenas to Former Executives
--------------------------------------------------
Louis J. Freeh, the Court-appointed examiner in Semgroup L.P. and
its affiliates' Chapter 11 cases, notifies the U.S. Bankruptcy
Court for the District of Delaware that he has served subpoenas
on:

  * Brent Cooper, former treasurer of SemGroup LP, and
  * PricewaterhouseCoopers LLP.

The Examiner is investigating the Debtors' prepetition trading
activities and any fraudulent acts by its former officers and
directors that could have led to the Debtors' bankruptcy filings.

SemGroup L.P. -- http://www.semgrouplp.com/-- is a
midstream service company providing the energy industry means to
move products from the wellhead to the wholesale marketplace.
SemGroup provides diversified services for end users and consumers
of crude oil, natural gas, natural gas liquids, refined products
and asphalt.  Services include purchasing, selling, processing,
transporting, terminaling and storing energy.  SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.

SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-
11525).  These represent the Debtors' restructuring efforts: John
H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq.
at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P.
Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges
LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil
Gotshal & Manges LLP.  Kurtzman Carson Consultants L.L.C. is the
Debtors' claims agent.  The Debtors' financial advisors are The
Blackstone Group L.P. and A.P. Services LLC.

Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.

SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008.  Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act.  The CCAA stay expires on
Nov. 21, 2008.

SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts.  In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.


SEMGROUP LP: J. Aron to Tender $89.7-Mil. to Bankruptcy Estate
--------------------------------------------------------------
J. Aron & Company seeks authority from the U.S. Bankruptcy Court
for the District of Delaware to tender $89,776,874 of net pre-
bankruptcy amounts to SemGroup, L.P., subject to deductions for
legal fees and other costs under a certain trading agreement.
Aron reserves its right to appeal any decision or any final
declaratory judgment.

Separately, J. Aron also filed an adversary complaint against
these parties seeking declaration that no oil producer, interest
owner, or other claimant has a valid lien, constructive trust, or
other type of claim against Aron:

  * the Debtors;

  * Bank of America, as administrative agent for secured
    parties;

  * producers of oil and gas products;

  * operators and interest owners of oil and gas wells that sell
    products to the Debtors;

  * the Official Producers' Committee;

  * the Official Committee of Unsecured Creditors; and

  * individuals or entities asserting a right or claim on the
    tendered amount or the trading agreement.

In the complaint, Aron also seeks a declaration that no secured
lender or any other party-in-interest has a valid claim against
Aron.  It also seeks a declaration that Aron will have no
obligation to pay more than the Tendered Amount.

William P. Bowden, Esq., at Ashby & Geddes, P.A., in Wilmington,
Delaware, tells the Judge Brendan Linehan Shannon that Aron seeks
to efficiently and equitably resolve fundamental legal disputes in
connection with the Debtors' bankruptcy, which have a real
potential to create inter-jurisdictional chaos.  Aron is currently
facing litigation in the Court, as well as in two proceedings in
the State of Oklahoma, and is threatened by the filing of
additional claims by numerous other claimants.

On November 1, 2008, Aron and SemGroup agreed that Aron will
tender approximately $90,000,000 for the benefit of SemGroup's
estate.  Subject to the Court's approval, the declarations sought
by Aron will ensure that Aron will not have to pay the amount
twice.

Specifically, Aron seeks a declaration that no oil producer,
interest owner, or other claimant has a valid lien, constructive
trust, or other type of claim against Aron.  Additionally, no
secured lender or any other party-in-interest has a valid claim
against Aron.  It also seeks a declaration that Aron will have no
obligation to pay more than the Tendered Amount.

To memorialize the agreement, Aron and SemGroup entered into a
stipulation on November 1, 2008, calculating the net obligations
at $89,776,874.  The Tendered Amount will be in full and complete
satisfaction of all amounts owed under the Trading Agreement.

The Official Producers' Committee, joined by New Dominion, LLC,
Samson, and Pioneer Natural Resources (USA), Inc., had opposed
the Stipulation, stating that the producers' asserted lien and
constructive trust rights are attached to the funds owed between
Aron and SemGroup.  Subsequently, the Debtors unilaterally
withdrew the Stipulation on November 25, 2008.

Mr. Bowden reasserts before the Court that the proposed payment
should be approved since the Debtors have agreed that the
calculation is correct under the Trading Agreement.  Relief from
the automatic stay should also be granted to Aron, to the extent
required by the Court.

The Court will convene a hearing on February 26, 2009, to
consider Aron's request.  Objections are due on February 10.

In a separate filing, J. Aron seeks permission to file an answer
and counterclaims in eight state-specific adversary proceedings:

  Plaintiff                                   Case Number
  ---------                                   -----------
  Arrow Oil & Gas, Inc., et al.                08-51444
  Samson Resources Company, et al.             08-51445
  Mull Drilling Company, et al.                08-51446
  Samson Resources Company                     08-51448
  DE Exploration, Inc.                         08-51453
  Mull Drilling Company                        08-51454
  Prima Exploration, Inc., et al.              08-51455
  Samson Resources Company                     08-51458

Aron is party to an ISDA Master Agreement with SemGroup, L.P.,
dated November 19, 2007, under which it engaged in numerous
financial derivatives and physical oil transactions with
SemGroup, involving hundreds of millions of dollars.  Prior to
the Petition Date, Aron terminated all transactions under the
Trading Agreement after the Debtors defaulted on their
obligations, and exercised its express contractual rights to
settle the transactions on a net basis.

On September 26, 2008, the Court entered an order establishing
procedures for resolution of liens asserted by the Debtors' oil
and gas producers.  Under the Producer Procedures Order, the
Court had ruled that "any party-in-interest wishing to actively
participate in one or more of the Declaratory Judgment Actions,
by way of briefing, argument, or otherwise, may do so."

Aron insists that it is a party-in-interest to the State-Specific
Adversary Proceedings, since the determination of the Producers'
alleged lien and trust rights under the various state-law
statutes can potentially affect Aron's rights to net obligations
existing under the Trading Agreement.

                        About SemGroup LP

SemGroup L.P. -- http://www.semgrouplp.com/-- is a
midstream service company providing the energy industry means to
move products from the wellhead to the wholesale marketplace.
SemGroup provides diversified services for end users and consumers
of crude oil, natural gas, natural gas liquids, refined products
and asphalt.  Services include purchasing, selling, processing,
transporting, terminaling and storing energy.  SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.

SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-
11525).  These represent the Debtors' restructuring efforts: John
H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq.
at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P.
Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges
LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil
Gotshal & Manges LLP.  Kurtzman Carson Consultants L.L.C. is the
Debtors' claims agent.  The Debtors' financial advisors are The
Blackstone Group L.P. and A.P. Services LLC.

Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.

SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008.  Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act.  The CCAA stay expires on
Nov. 21, 2008.

SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts.  In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.


SEMGROUP LP: Oklahoma Producers Seek An Accounting of Deliveries
----------------------------------------------------------------
Samson Resources Company, Lone Star, LLC, Samson Contour Energy
E&P, LLC, JMA Energy Company, L.L.C., New Dominion, L.L.C.,
Benson Mineral Group, Inc., The Mint Limited Partnership,
Chesapeake Exploration Limited Liability Company, Chesapeake
Energy Marketing, Inc., Special Energy Corporation, DC Energy,
Inc., Dunne Equities, Inc., Lario Oil & Gas Company, McCoy
Petroleum Corporation, Braden-Deem, Inc., W.D. Short Oil Co.,
L.L.C., Short & Short, L.L.C., Weinkauf Petroleum, Inc., Special
Energy Corporation, Veenker Resources, Inc., Lance Ruffel Oil &
Gas Corporation, and St. Mary Land Exploration Company, filed a
complaint against the Debtors, seeking declaratory relief
pursuant to Rule 7001(9) of the Federal Rules of Bankruptcy
Procedure.

The Oklahoma Producers ask that the U.S. Bankruptcy Court for the
District of Delaware require the Debtors to provide an accounting
of:

  (i) all Oklahoma Products sold during the period from
      June 1 to July 22, 2008;

(ii) the sale and disposition of all Oklahoma Products sold to
      the Debtors during the period;

(iii) the amount of Oklahoma Products, the Oklahoma Receivables
      and the Oklahoma Cash on hand as of the Petition Date;
      and

(iv) the use or disposition of all Oklahoma Products, Oklahoma
      Receivables and Oklahoma Cash since the Petition Date.

The Oklahoma Producers own and represent working interests,
royalty interests, overriding interests and other interests under
applicable law in the mineral acreage and oil and gas produced
from various wells in the State of Oklahoma.  They also operate
numerous wells pursuant to operating agreements executed with
non-operating interest owners as well as pooling orders issued by
the Oklahoma Corporate Commission.

As of the Petition Date, during the period from June 1 to
July 22, 2008, the Debtors held unsold oil and gas product from
wells located in the State of Oklahoma.  The Debtors also held
receivables representing accounts generated from the sale of
Oklahoma Products, as well as cash representing payments for the
sale of Oklahoma Products.

Since the Petition Date, the Debtors continued to sell Oklahoma
Products, generating additional Oklahoma Receivables.  They have
also made collections on account of the sale of Oklahoma
Products, resulting in additional cash.

The Oklahoma Producers assert that pursuant to the Oklahoma
Production Revenue Standards Act, all proceeds from the sale of
the Oklahoma Products will be regarded separate and distinct from
all other funds until they are paid to legally entitled Oklahoma
Producers, and any person holding proceeds from the sale is
required to hold those for the benefit of the legally entitled
owners of the proceeds.  The Oklahoma Producers are owners, they
assert, thus all revenue derived from the sale of Oklahoma
Products must be held in trust until the Debtors have remitted
the full payment.

The Oklahoma Producers maintain that they hold a security
interest and lien on all Oklahoma Products sold and delivered in
June and July 2008, to secure the obligations of the Debtors.
They also hold a security interest and lien in the Oklahoma
Products, the Oklahoma Receivables and the Oklahoma Cash.

According to the Oklahoma Producers, Bank of America, as
administrative agent for the secured parties, asserts that it
hold a first and prior security interest and lien in the Oklahoma
Products, the Oklahoma Receivables and the Oklahoma Cash.  The
Oklahoma Producers contest the validity of BofA's liens and
interests on the Oklahoma Products, and insist that those
interests are subordinate to their own.  They maintain that
BofA's lien and interests do not attach to the Oklahoma Products
because they constitute property held in trust.

                        About SemGroup LP

SemGroup L.P. -- http://www.semgrouplp.com/-- is a
midstream service company providing the energy industry means to
move products from the wellhead to the wholesale marketplace.
SemGroup provides diversified services for end users and consumers
of crude oil, natural gas, natural gas liquids, refined products
and asphalt.  Services include purchasing, selling, processing,
transporting, terminaling and storing energy.  SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.

SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-
11525).  These represent the Debtors' restructuring efforts: John
H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins,
Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael
P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal &
Manges LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq.
at Weil Gotshal & Manges LLP.  Kurtzman Carson Consultants L.L.C.
is the Debtors' claims agent.  The Debtors' financial advisors are
The Blackstone Group L.P. and A.P. Services LLC.

Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.

SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008.  Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act.  The CCAA stay expires on
Nov. 21, 2008.

SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts.  In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.


SENTINEL MANAGEMENT: Survives BNY Opposition to $500MM Suit
-----------------------------------------------------------
The U.S. Bankruptcy Court, Northern District of Illinois (Chicago)
has allowed the liquidation trustee of Sentinel Management Group
Inc., to move forward with its $500 million against Bank of New
York Mellon Corp.

The Court, according to Bloomberg's Bill Rochelle, allowed the
suit to move forward with 5 of the 9 counts, despite a motion by
BoNY to dismiss the suit.  According to the report, the lawsuit
alleged that BoNY aided the fraud conducted by Sentinel's
management, which led to Sentinel's collapse in August 2007.

As reported by the Troubled Company Reporter on January 2, 2009,
the Court confirmed on December 15, 2008, the plan of liquidation
of Sentinel. Frederick J. Grede, who was appointed trustee to
manage the liquidation of Sentinel while in Chapter 11, has been
appointed as liquidation trustee pursuant to the Plan.  A copy of
the Plan is available for free at:

http://bankrupt.com/misc/SentinelManagement_4thAmendedPlan.pdf

                    About Sentinel Management

Based in Northbrook, Illinois, Sentinel Management Group Inc. --
http://www.sentinelmgi.com/-- is a full service firm offering a
variety of security solutions.  The company filed a voluntary
chapter 11 petition on Aug. 17, 2007 (Bankr. N.D. Ill. Case No.
07-14987).  Ronald Barliant, Esq., Randall Klein, Esq., and
Kathryn A. Pamenter, Esq., at Goldberg, Kohn, Bell & Black
Rosenbloom & Moritz, Ltd. represent the Debtor as counsel.  Quinn,
Emanuel Urquhart Oliver & Hedges, LLP, represents the Official
Committee of Unsecured Creditors as counsel.  DLA Piper US LLP is
the Committee's co-counsel.  When the Debtor sought bankruptcy
protection, it listed assets and debts of more than $100 million.

On Aug. 28, 2007, the Court approved Frederick Grede as the
Debtor's Chapter 11 Trustee.  Marc I. Fenton, Esq., at DLA Piper
US LLP, and Vincent E. Lazar, Esq, at Jenner & Block LLP,
represent the Chapter 11 Trustee as counsel.


SMURFIT-STONE: Seeks March 27 Extension to File Schedules
---------------------------------------------------------
Smurfit-Stone Container Corporation and its debtor affiliates ask
the U.S. Bankruptcy Court for the District of Delaware to extend
until March 27, 2009, the deadline to file their schedules of
assets and liabilities and statement of financial affairs.

Section 521 of the Bankruptcy Code and Rule 1007 of the Federal
Rules of Bankruptcy Procedure require a debtor to file its (i)
schedules of assets and liabilities; (ii) schedules of current
income and expenditures; (iii) schedules of executory contracts
and unexpired leases; and (iv) statements of financial affairs
within 15 days after a debtor's bankruptcy filing.

James P. Conlan, Esq., at Sidley Austin LLP, in Chicago,
Illinois, the Debtors' proposed counsel, asserts that the Debtors
may not be able to complete the documents within a month after
the bankruptcy filing, given the size of their businesses.

"Given the size and complexity of the Debtors' businesses, a
significant amount of time must be accumulated, reviewed and
analyzed to properly prepare the schedules and statements," Mr.
Conlan maintains.  "The data necessary for the schedules and
statements is stored in numerous accounting systems and compiling
and consolidating the data is a complex and time intensive task."

The Debtors assure creditors and other parties-in-interests that
their interests will not be harmed by the proposed extension of
the filing deadline since the Schedules and Statements will be
filed in advance of any planned bar date or other significant
milestone event in the Debtors' cases.

Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com--
is one of the leading integrated manufacturers of paperboard and
paper-based packaging in North America and one of the world's
largest paper recyclers.  The company operates 162 manufacturing
facilities that are primarily located in the United States and
Canada.  The company also owns roughly one million acres of
timberland in Canada and operates wood harvesting facilities in
Canada and the United States.  The company employs approximately
21,250 employees, 17,400 of which are based in the United States.
For the quarterly period ended September 30, 2008, the company
reported approximately $7.450 billion in total assets and
$5.582 billion in total liabilities on a consolidated basis.

Smurfit-Stone and its U.S. and Canadian subsidiaries filed to
reorganize under Chapter 11 on January 26, 2009 (Bankr. D. Del.
Lead Case No. 09-10235).  Certain of the company's affiliates,
including Smurfit-Stone Container Canada Inc., a wholly owned
subsidiary of SSCE, and certain of its affiliates, filed to
reorganize under the Companies' Creditors Arrangement Act in the
Ontario Superior Court of Justice in Canada.

According to Bloomberg News, Smurfit-Stone joins other pulp- and
paper-related bankruptcies as rising Internet use hurts magazines
and newspapers.  Corp. Durango SAB, Mexico's largest papermaker,
sought U.S. bankruptcy in October.  Quebecor World Inc., a
magazine printer and Pope & Talbot Inc., a pulp-mill operator,
also sought cross-border bankruptcies for their operations in the
U.S. and Canada.

James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M.
Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in
Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton,
Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware,
serve as the Debtors' bankruptcy counsel.  PricewaterhouseCooper
LLC, serves as the Debtors' financial and investment consultants.
Lazard Freres & Co. LLC acts as the Debtors' investment bankers.
Epiq Bankruptcy Solutions LLC, acts as the Debtors' notice and
claims agent.

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


SPARKS REGIONAL: Liquidity Declines Spur Moody's Junk Ratings
-------------------------------------------------------------
Moody's Investors Service has downgraded the bond rating assigned
to Sparks Regional Medical Center to Caa1 from B2.  Moody's last
review was on November 14, 2008.  The current rating downgrade is
attributable to further liquidity declines, higher operating
losses in recent months, and Moody's belief that the possibility
of a bankruptcy filing is higher than it was two months ago.  At
this time Moody's are removing the rating from Watchlist and
revising the outlook to negative.

Legal security: The bonds are secured by a lien on the hospital
and a gross revenue pledge of SRMC and are further secured by a
joint and several guaranty of the Sparks Health System and Sparks
Medical Foundation (an affiliated physician organization).

Interest rate derivatives: None

                            Challenges

* Significant reduction in unrestricted cash and investments to a
  balance of $5.5 million as of December 31, 2008.  The Sparks
  Foundation, an unaffiliated group, has committed to lend up to
  $2 million to Sparks, resulting in a combined balance of
  $7.5 million, translating into a weak 11 days cash on hand and
  12% cash to debt.  Moody's note that capital expenditures have
  totaled $6.9 million since FYE 2008, consuming additional cash.

* Significant operating losses continue through six months FY
  2009, with the system posting a consolidated operating loss of
  $12.9 million, and negative operating cash flow of
  $4.3 million.  Management attributes the decline in recent
  months to a deteriorating payer mix.

* Sizeable operating lease commitments of approximately
  $6 million annually.  Conversion of operating lease commitments
  to debt equivalents stresses debt measures further.

                   Recent Developments/Results

The downgrade follows the receipt of six-month (unaudited) fiscal
year 2009 statements showing a continuation of large operating
losses and further deterioration in SRMC's unrestricted cash
position.  The downgrade is also based on Moody's belief that the
likelihood of bankruptcy is higher than two months ago based on a
very weak cash position and Moody's belief that SRMC's viable
alternatives to restoring liquidity to meet debt service payments
and operating needs are limited.

Turnaround plans implemented by management have yet to result in
significant operational improvements.  Through six months FY 2009,
consolidated operating losses totaled $12.9 million (-10.5%
operating margin) and operating cash flow was a negative
$4.3 million (-3.5% operating cash flow margin), ultimately
resulting in a decline of the hospital's cash position to
$5.5 million at December 31, 2008 from $7.7 million in November
2008 and $31.2 million at FYE 2008.  Moody's also note that the FY
2008 audit was recently completed with the auditor expressing a
qualified opinion regarding SRMC's ability to continue operations
as a going concern.

After declining precipitously during FY 2008 and the Q1 2009,
SRMC's unrestricted cash and investments position has fluctuated
between $5.5 million and $7.7 million for the last two months.
Following an inability to secure a line of credit from a local
bank, the Sparks Health System Foundation (an affiliated group
that is not obligated on the bonds) recently agreed to lend SRMC
up to $2 million.  SRMC has not yet borrowed money from the
Foundation, and continues to make bond monthly payments.
For additional information, please see the report dated
November 14, 2008.

                             Outlook

The negative outlook reflects the deteriorating financial position
of SRMC and Moody's belief that if SRMC files for bankruptcy a
lower rating may be warranted based on the estimated recovery
value of the bonds.

                 What could change the rating -- UP

Given the near term liquidity and operating stresses.  If SRMC is
able to secure additional liquidity from an external source to
provide at least medium-term liquidity and implement more
significant turnaround initiatives to reduce operating losses, a
rating upgrade would be considered.

                What could change the rating -- DOWN

A further rating downgrade would be considered if there are
further declines in unrestricted cash, a bankruptcy filing, or a
payment default.  Additionally, in the event of a default, a lower
estimated recovery value could result in a lower rating.

                          Key Indicators

Assumptions & Adjustments:

  -- Based on financial statements for Sparks Health System

  -- First number reflects audit year June 30, 2008

  -- Second number reflects un-audited year six months ended
     December 31, 2008

  -- Investment returns normalized at 6% unless otherwise noted

* Inpatient admissions: 12,776; 6,097

* Total operating revenues: $244.0 million; $123.3 million

* Moody's-adjusted net revenue available for debt service:
  ($0.05) million; ($4.1) million

* Total debt outstanding: $65.0 million; $62.0 million

* Maximum annual debt service (MADS): $6.3 million; $6.3 million

* MADS Coverage with reported investment income: 0.3 times; (0.7)
  times

* Moody's-adjusted MADS Coverage with normalized investment
  income: (0.01) times; (1.93) times

* Days cash on hand: 46 days; 11 days

* Cash-to-debt: 48%; 12%

* Operating margin: (6.6%); (10.5%)

* Operating cash flow margin: (0.5%); (3.5%)

Rated Debt (debt outstanding as of December 31, 2008)

  -- Series 2001; fixed rate ($53.1 million outstanding) rated
     Caa1

The last rating action was on November 14, 2008, when the rating
of Sparks Regional Medical Center was downgraded to B2 from Baa3
and placed on Watchlist for further downgrade.


STAR TRIBUNE: U.S. Trustee Forms 7-Member Creditors Committee
-------------------------------------------------------------
Diana G. Adams, the U.S. Trustee for Region 2, selected seven
members to the official committee of unsecured creditors in the
Chapter 11 cases of Star Tribune Company and Star Tribune Holdings
Corporation.

The committee members are:

   1. Wilmington Trust Company
      591 Broadway - 2nd Floor
      New York, New York 10012
      Attn: Mr. Boris Treyger, Vice President

   2. Pension Benefit Guaranty Corporation
      1200 K Street, N.W.
      Washington, D.C. 20005-4026
      Attn: Marie-Christine Fogt, Financial Analyst

   3. Global Leveraged Capital Management LLC
      50 California Street, Suite 3260
      San Francisco, CA 94111
      Attn: Abraham T. Han, Principal

   4. The Minnesota Newspaper Guild/Typographical Union
      2855 Anthony Lane S, Suite 110
      St. Anthony, Minnesota 55418-3265
      Attn: Mike Bucsko, Executive Officer

   5. Teamsters Local No. 120
      9422 Ulysses ST NE, Suite 120
      Blaine, MN 55434
      Attn: Brad Slawson, Sr., Secretary-Treasurer

   6. APAC Customer Services, Inc.
      2333 Wauregan Road - Suite 100
      Bannockburn, IL 60015
      Attn: Robert Nachwalter, SVP and General Counsel

   7. Royle Printing Company
      745 S. Bird
      Sun Prairie, WI 53590
      Attn: Scott Pierquet, Director of Finance

Bloomberg's Bill Rochelle notes that the panel consists of the
PBGC, two unions, one indenture trustee, two trade suppliers, and
one investor.

                        About Star Tribune

Headquartered in Minneapolis, Minnesota, The Star Tribune Company
-- http://www.startribune.com-- operate the largest newspaper in
the U.S. state of Minnesota and published seven days each week in
an edition for the Minneapolis-Saint Paul metropolitan area.  The
company and its affiliate, Star Tribune Holdings Corporation,
filed for Chapter 11 protection on January 15, 2009 (Bankr. S.D.
N.Y. Lead Case No. 09-10245).  Marshall Scott Huebner, Esq., at
Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts.  The Debtors proposed Blackstone Group LP
as their financial advisor; and Curtis, Mallet-Prevost, Colt &
Mosle LLP as conflict counsel; and Garden City Group Inc. as
claims agent.  When the Debtors filed for protection from their
creditors, they listed assets and debts between $100 million to
$500 million each.


SUPERIOR OFFSHORE: Court Confirms Plan, Denies Conversion Motion
----------------------------------------------------------------
Judge Wesley Steen of the U.S. Bankruptcy Court for the Southern
District of Texas confirmed on January 28, 2009, the First Amended
Joint Plan of Liquidation filed by Superior Offshore
International, Inc. and its Official Committee of Unsecured
Creditors.

Bankruptcy Law360 reports that the Court, at the same time, denied
a request by Louis E. Schaefer, Jr., and Schaefer Holdings LP, the
Debtor's founder and equity holder, to convert the Debtor's
Chapter 11 restructuring case to a Chapter 7 liquidation
proceeding.

As reported by the Troubled Company Reporter, Superior Offshore
and the Committee filed the Amended Plan and an accompanying
disclosure statement on December 16, 2008.  The Disclosure
Statement was approved on January 9.

The TCR says the Plan divides the claims and interests into 9
classes:

     Class 1   Administrative Claims
     Class 2   Priority Tax Claims
     Class 3   Priority Non-Tax Claims
     Class 4   Secured Claims
     Class 5   General Unsecured Claims
     Class 6   Subordinated Claims
     Class 7   Subordinated Securities Claims
     Class 8   Interests
     Class 9   Subordinated Interests

All Allowed Class 1, Class 2 and Claims shall receive payment in
full, in Cash.  In the sole discretion of the Plan Agent, the
holder of an allowed Class 4 Claim shall receive either (i) the
proceeds of the Collateral securing such Claimant's Allowed
Secured Claim after satisfaction in full of all superior liens up
to the Allowed Amount of the Claimant's Class 4 Claim; or (ii) the
Collateral securing such Claimant's Allowed Secured Claim in full
and final satisfaction of such claim.

Holders of Allowed General Unsecured Claims under Class 5 will
receive a Pro Rata share of Distributions from Available Cash and
any Plan Agent Recovery up to the Allowed Amount of such Class 5
Claim.  The Plan Agent shall make additional future distributions
to holders of Allowed Class 5 Claims from Available Cash and the
Plan Agent Recovery as the Plan Agent determines appropriate.
Each holder of an Allowed Class 6 Subordinated Claim will receive
a Pro Rata share of Available Cash and Plan Agent Recovery up to
the Allowed Amount of such Claim after payment in full of all
Allowed Class 5 Claims.

Each holder of an Allowed Class 7 Subordinated Securities Claim
shall look first to the proceeds of the Debtor's available
insurance policies for satisfaction of its Claim to the extent
that such Claim is covered by insurance.  Any remaining unpaid
Allowed Class 7 Subordinated Securities Claim shall receive a Pro-
Rata share with all Allowed Class 8 Interests of all remaining
Available Cash and Plan Agent Recovery after payment in full of
all Class 1, 2, 3, 4, 5, and 6 Claims.

All Equity Interests under Class 8 shall be canceled as of the
Effective Date.  Holders of Allowed Equity Interests shall receive
a Pro-Rata share with all Allowed Class 7 Claims remaining after
application of any available insurance proceeds of all remaining
Available Cash and Plan Agent Recovery after payment in full, with
interest, of all Class 1, 2, 3, 4, 5, and 6 Claims.

All Subordinated Interests under Class 9 shall be canceled as of
the Effective Date and shall receive no Distributions.

On the Effective Date, all remaining property of the Debtor and of
the Estate will vest in the Liquidating Debtor, free and clear of
liens, claims and encumbrances, except as otherwise provided in
the Plan.  From and after the Effective Date of the Plan, the
Liquidating Debtor is authorized to (i) take such action as is
necessary to complete an orderly wind-down of its operations,
including completing all audits by the IRS; (ii) file claim
objections; (iii) make distributions; (iv) prosecute causes of
action owned by the Estate, including all claims and causes of
action arising under the Bankruptcy Code; (v) pursue, liquidate
and administer Estate property; (vi) file tax returns; and (vii)
take such other action as provided for under the Plan.

Pursuant to the Confirmation Order, these individuals will
constitute the initial members of the Post-Confirmation Committee:

   -- Claire Davis
   -- Michael Parker
   -- Bruce Lucas
   -- Terry Braud
   -- L. Don Miller

A full-text copy of the Debtors' and the Official Committee of
Unsecured Creditors First Amended Joint Plan of Liquidation is
available for free at:


http://bankrupt.com/misc/SuperiorOffshore_1stAmendedJointPlan.pdf

In his Conversion Motion, Mr. Schaefer said there is no reasonable
likelihood that a plan will be confirmed.  He said that Amended
Plan is defective, and will not yield and equal or higher payout
to claimants that would a case under Chapter 7.

According to Mr. Schaefer, the amended plan violated the fair and
equitable requirements of Section 1129 of the United States
Bankruptcy Code.  He said, among other things, that the amended
plan improperly provide for the treatment of Class 7 and 8 claims
because the procedure for the claims in not to be determined until
postconfirmation.  Mr. Schaefer said the Chapter 7 will maximize
the value to creditors and will eliminate unnecessary
administrative expenses incurred by various committees and
professionals in the Debtor's case.

Headquartered in Houston Texas, Superior Offshore International
Inc. (Nasdaq: DEEP) -- http://www.superioroffshore.com/--
provides subsea construction and commercial diving services to the
offshore oil and gas industry.  The company's construction
services include installation, upgrading and decommissioning of
pipelines and production infrastructure.  The company operates a
fleet of seven service vessels and provides remotely operated
vehicles and saturation diving systems for deepwater and harsh
environment operations.

Superior Offshore International, Inc., filed for bankruptcy
protection on April 24, 2008 (Bankr. S.D. Tex. Case No. 08-32590).
The Debtors listed total assets of $67,587,927 and total
liabilities of $54,359,884 in its schedules.  David Ronald Jones,
Esq., and Joshua Walton Wolfshohl, Esq., at Porter & Hedges LLP,
represent the Debtor as counsel.  The U.S. Trustee for Region 7
appointed five creditors to serve on an Official Committee of
Unsecured Creditors.  Douglas S. Draper, Esq., at Heller Draper
Hayden Patrick & Horn LLC, and Michael D. Rubenstein, Esq., at
Liskow Lewis, represent the Committee as counsel.


TALLYGENICOM LP: Taps Donlin Recano as Claims and Noticing Agent
----------------------------------------------------------------
TallyGenicom LP and its debtor-affiliates ask the United States
Bankruptcy Court for the District of Delaware for permission to
employ Donlin Recano & Company Inc. as their claims, noticing and
balloting agent.

The firm will:

   a) prepare and serve required notices in these chapter 11
      cases, including, without limitation:

       i) the notice under section 341(a) of the Bankruptcy Code;

      ii) the notice of bar date for filing claims against the
          Debtors;

     iii) notice of hearings on a disclosure statement and
          confirmation of a plan of reorganization; and

      iv) other miscellaneous notices to any entities, as the
          Debtors or the Court may deem necessary or appropriate
          for an orderly administration of these chapter 11
          cases.

   b) within five business days after the mailing of a particular
      notice, file with the Clerk's Office a declaration of
      service that includes a copy of the notice involved, an
      alphabetical list of persons to whom the notice was served
      and the date and manner of service;

   c) comply with applicable federal, state, municipal and local
      statutes, ordinances, rules, regulations, orders and other
      requirements;

   d) promptly comply with such further conditions and
      requirements as the Clerk's Office or Court may at any time
      prescribe;

   e) provide claims recordation services and maintain the
      official claims register;

   f) provide balloting and solicitation services, including
      preparing ballots, producing personalized ballots and
      tabulating creditor ballots on a daily basis;

   g) provide such other noticing, disbursing and related
      administrative services as may be required from time to
      time by the Debtors; and

   h) provide assistance with, among other things, certain data
      processing and ministerial administrative functions,
      including, but not limited to, such functions related to:

   1) the Debtors' schedules, statements of financial affairs and
      master creditor lists, and any amendments thereto; and (2)
      the processing and reconciliation of claims.

The Debtors have paid a $15,000 retainer to the firm.

The firm's professionals will be paid at these rates:

      Designation                        Hourly Rate
      -----------                        -----------
      Senior Bankruptcy Consultant       $205-250
      Case Manager                       $180-200
      Technology/Programming Consultant  $115-195
      Senior Analyst                     $115-175
      Jr. Analyst                        $70-110
      Clerical                           $40-65

Louis A. Recano, president of the firm, assures the Court that the
firm does not hold any interest adverse to the Debtors' estate and
is a "disinterested person" as defined in Section 101(14) of the
Bankruptcy Code.

                        About TallyGenicom

Headquartered in Chantilly, Virginia, TallyGenicom, L.P. aka
Datacom Manufacturing LP -- http://www.tallygenicom.com-- provide
an array of business and industrial imaging devices and printer
parts.  The company and two of its affiliates filed for Chapter 11
protection on January 27, 2009 (Bankr. D. Del. Lead Case No.
09-10266).

Ann C. Cordo, Esq., and Gregory Thomas Donilon, Esq., at Morris
Nichols Arsht & Tunnell LLP, represent the Debtors in their
restructuring efforts.  The Debtors proposed CRG Partners Group
LLC as their financial advisor; Proskauer Rose LLP as special
counsel.  Suzzanne Uhland, Esq., at O'Melveny & Myers, LLP, and
Mark D. Collins, Esq., at Richards, Layton & Finger, P.A.,
represent Printronix Inc., Stalking Horse Bidder.  Randall L.
Klein, Esq., at Goldberg Kohn Bell Black Rosenbloom & Moritz,
Ltd., and Steven K. Kortanek, Esq. at Womble Carlyle Sandridge &
Rice, PLLC, represent Dymas Funding Company LLC, agent to
Printronix' lenders.

When the Debtors filed for protection from their creditors, they
listed assets and debts between $10 million and $50 million in
their filing.


THERMADYNE HOLDINGS: Moody's Affirms Corp. Family Rating to 'B3'
----------------------------------------------------------------
Moody's Investors Service affirmed Thermadyne Holdings
Corporation's corporate family rating at B3 and changed the
outlook to negative.  In addition, Moody's affirmed the
probability of default rating at B3 and the senior subordinated
notes at Caa1.

The negative outlook reflects the likelihood that global demand
will remain soft and the uncertain business environment will have
an adverse impact on Thermadyne's sales and earnings.  As a
result, Moody's anticipates that reduced earnings will tighten
headroom under certain of Thermadyne's covenants while increasing
prospective interest costs.  Moody's cautions that precipitous
declines in EBITDA, similar in scale to the drop in the fourth
quarter, caused by either diminished demand or the inability to
maintain gross margins due to the deterioration of a rational
pricing environment, could be detrimental to the company's
existing ratings.  Moody's would likely consider further rating
action if such a decline results in a deterioration of the
company's liquidity, either in terms of revolver availability or
the ability to generate positive cash flows.

The rating affirmation reflects Thermadyne's solid credit metrics,
on a trailing basis, and adequate liquidity profile.  The ratings
incorporate Thermadyne's dominant market position, geographic and
end-market diversification, modest leverage, strong cash
generation and the inherent cyclicality of its operations caused
by its correlation to steel consumption.

Ratings affirmed:

  -- Corporate Family Rating at B3;

  -- Probability of Default Rating at B3;

  -- Rating of Senior Subordinated Notes due 2014 at Caa1 (LGD
     assessment revised to LGD4/64% from LGD5/70%)

The previous rating action on Thermadyne was the April 21, 2008,
upgrade to B3 with a stable outlook.

Thermadyne is a global designer and manufacturer of cutting and
welding equipment.  For the twelve months ending September 30,
2008, its sales totaled approximately $537 million.


TOYOTA OF AUGUSTA: Files for Chapter 7 Liquidation
--------------------------------------------------
News 12 reports that Toyota of Augusta has filed for Chapter 7
liquidation.

Citing Toyota of Augusta's general manager, News 12 relates that
the company was closed on Monday and Tuesday, and was open for
business on Wednesday.

Toyota of Augusta is negotiating a deal with the Milton Ruben
Dealership to take over the company, News 12 states.

Toyota of Augusta said in a statement, "We are negotiating a sale
of assets transaction for a single dealership that is subject to a
number of contingencies without a specific closing date.  Some
creditors were concerned about payment of outstanding obligations
and 'jumped the gun' and filed an involuntary petition in
bankruptcy.  Upon the transaction closing, we have every
expectation that the obligations to creditors will be paid.  In
any event, creditors will be paid before any owners will receive
any of the proceeds of the company's assets.  We will continue to
be open for business selling and serving vehicles and satisfying
customer needs."

Toyota of Augusta is a dealership on Washington Road.


TRANSNATIONAL AUTOMOTIVE: Nov. Balance Sheet Upside-Down by $2MM
----------------------------------------------------------------
Transnational Automotive Group Inc.'s balance sheet at Nov. 30,
2008, showed total assets of $ 6,924,900 and total liabilities of
$9,683,147, resulting in a stockholders' deficit of $2,758,247.

For the three month ended Nov. 30, 2008, the company posted net
loss of 805,173 compared with net loss of $1,729,796 for the same
period in the previous year.

For the nine month ended Nov. 30, 2008, the company posted net
loss of $295,556 compared with net loss of 5,235,019 for the same
period in the previous year.

                  Liquidity and Capital Resources

As of Nov. 30, 2008, the company had cash and cash equivalents of
$1,231,100 compared to cash and cash equivalents of $1,496,442 as
of Nov. 30, 2007, representing a decrease in its cash and cash
equivalents of $265,342.  The decrease in its cash balances
compared to the prior year was attributed to $4,227,500 of cash
provided from the issuance of common stock and warrants in the
prior year.

A full-text copy of the -Q filing is available for free at:

               http://ResearchArchives.com/t/s?38c1

                  About Transnational Automotive

Based in Los Angeles, California, Transnational Automotive Group
Inc. (OTC BB: TAMG) -- http://www.transauto-group.com/-- and its
wholly-owned and majority-owned subsidiaries are engaged in the
development and operations of mass public transportation systems
in Cameroon, Africa.  The company's current operations are
comprised of an intra-city bus transit system in the capital city
of Yaounde under the brand name, LeBus, and an inter-city bus
transit system between Yaounde and Douala, known as LeCar.

                          Going Concern

Kabani & Company Inc., in Los Angeles, expressed substantial doubt
about Transnational Automotive Group Inc.'s ability to continue as
a going concern after auditing the company's consolidated
financial statements for the years ended Feb. 29, 2008, and 2007.
The auditing firm pointed to the company's significant loss for
the year ended Feb. 29, 2008, and working capital deficit.


TRIBUNE COMPANY: Fitch Affirms 'D' Issuer Default Rating
--------------------------------------------------------
Fitch Ratings has affirmed and withdrawn these ratings on Tribune
Company:

  -- Issuer Default Rating 'D';
  -- Senior guaranteed revolving credit facility 'CC/RR4';
  -- Senior guaranteed term loan 'CC/RR4';
  -- Senior unsecured bridge loan 'C/RR6';
  -- Senior unsecured notes 'C/RR6';
  -- Subordinated exchangeable debentures due 2029 'C/RR6'.

Ratings may be withdrawn after 30 days have elapsed following a
default.  The withdrawal of Tribune's ratings reflects the
company's Dec. 8, 2008 filing to voluntarily restructure its debt
obligations under the protection of Chapter 11 of the U.S.
Bankruptcy Code in the U.S. Bankruptcy Court for the District of
Delaware.


TUSKEENA OXFORD: Case Summary & 16 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Tuskeena Oxford Center LLC
        P O Box 8860
        Mobile, AL 36689

Bankruptcy Case No.: 09-00268

Type of Business:

Chapter 11 Petition Date: January 28, 2009

Court: Southern District of Mississippi (Jackson Divisional
       Office)

Debtor's Counsel: Nicholas Van Wiser, Esq.
                  nwiser@byrdwiser.com
                  Byrd & Wiser
                  P.O. Box 1939
                  Biloxi, MS 39533
                  Tel: (228) 432-8123
                  Fax: (228)432-7029

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
   ------                      ---------------   ------------
Merchants & Farmers Bank       bank loan;        $9,704,716
1111 East Jackson Avenue       collateral:
Oxford, MS 38655               $7,000,000

Gargis Construction            trade debt        $57,504
P.O. Box 883
Southhaven, MS 38671

City Of Oxford                 trade debt        $45,822
107 Courthouse Square
Oxford, MS 38655

Lafayette County Tax Collector trade debt        $20,700

Hill's Construction LLC        trade debt        $14,029

Hartford Insurance Company     trade debt        $5,044

Mirror Lawn & Turf             trade debt        $4,040

Howorth & Associates           trade debt        $2,738

Matthews Landscape &           trade debt        $2,071
Maintenance

City Of Oxford Electric        trade debt        $849
Department

Simplex Grinnell               trade debt        $299

AT&T                           trade debt        $268

Southeast Real Investment      trade debt        $105
Corp

CT Corporation                 trade debt        $112

Burr & Foreman LLP             trade debt        $66

Centerpoint Energy             trade debt        $27

The petition was signed by Christopher White.


TWEETER HOME: Seeks Release of $300,000 Utility Reserve
-------------------------------------------------------
Judge Peter J. Walsh of the U.S. Bankruptcy Court for the District
of Delawere permits General Electric Capital Corporation to
release to Tweeter Home Entertainment Group, Inc., and its
affiliates $300,000 from the segregated blocked reserved funds.
The Debtors will no longer be subject to additional adequate
protection procedures under the Court's Utility Order.

In connection with the previous operation of their businesses,
the Debtors obtained utility services for water, natural gas,
oil, electricity and telephone.  To obtain continued services
from the Utility Providers after the Petition Date, the Debtors
deposited funds to serve as an adequate assurance of payment
under Section 366 of the Bankruptcy Code.

Sarah E. Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in Wilmington, Delaware, relates the Debtors have sold
substantially all of their assets and accordingly maintain no
property at which they use any utility services.  The Debtors no
longer use or require any of the utility services, she avers.

Ms. Pierce certified to the Court that no objection has been filed
with respect to the Debtors' Motion.

                       About Tweeter Home

Based in Canton, Mass., Tweeter Home Entertainment Group Inc.
-- http://www.tweeter.com/-- retails mid-to high-end audio and
video consumer electronics products.  Tweeter and seven of its
affiliates filed for chapter 11 Protection on June 11, 2007
(Bankr. D. Del. Case Nos. 07-10787 through 07-10796).  Gregg M.
Galardi, Esq., Mark L. Desgrosseilliers, Esq., and Sarah E.
Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP,
represented the Debtors.  Kurtzman Carson Consultants LLC acted as
the Debtors' claims and noticing agent.

Bruce Grohsgal, Esq., William P. Weintraub, Esq., and Rachel Lowy
Werkheiser, Esq., at Pachulski Stang Ziehl & Jones LLP; and Scott
L. Hazan, Esq., Lorenzo Marinuzzi, Esq., and Todd M. Goren, Esq.,
at Otterbourg, Steindler, Houston & Rosen, P.C., represented the
Official Committee of Unsecured Creditors.

As of Dec. 21, 2006, Tweeter had total assets of $258,573,353 and
total debts of $190,417,285.  The Debtors' exclusive period to
file a plan of reorganization expired on June 5, 2008.

                         About Tweeter Opco

Tweeter Opco, LLC, was formed in July 2007 to acquire the business
operations and assets of Tweeter Home Entertainment Group, Inc.
Tweeter Opco filed for Chapter 11 protection on
Nov. 5, 2008 (Bankr. D. Del. Case No. 08-12646).  Chun I. Jang,
Esq., and Cory D. Kandestin, Esq., at Richards, Layton & Finger,
P.A., assisted the company in its restructuring effort.  The
company listed assets of $50 million to $100 million and debts
of $50 million to $100 million.

Judge Mary Walrath of the U.S. Bankruptcy Court for the District
of Delaware converted the Opco Debtors' Chapter 11 cases to
Chapter 7 liquidation proceedings effective as of December 5,
2008.  George L. Miller from the accounting firm Miller Coffey
Tate has been appointed to serve as trustee of the Chapter 7
proceedings of Tweeter Opco, LLC, and its affiliates.

Bankruptcy Creditors' Service, Inc., publishes Tweeter Bankruptcy
News.  The newsletter tracks the bankruptcy proceedings of Tweeter
Home Entertainment Group, Inc., and its affiliates, and the
subsequent bankruptcy cases of its buyer, Tweeter Opco LLC.
(http://bankrupt.com/newsstand/or 215/945-7000)


TWEETER OPCO: Gets Permission to Use Lenders' Cash Collateral
-------------------------------------------------------------
Judge Mary Walrath of the U.S. Bankruptcy Court for the District
of Delaware authorized, on a final basis, George L. Miller, as the
Chapter 7 trustee overseeing the liquidation proceedings of
Tweeter Opco LLC and its affiliates, to use cash collateral of
their prepetition lenders, consisting any of the sales proceeds,
from December 5, 2008 to the conclusion, of the disposition and
liquidation of the Debtors' estate property by Apto Solutions,
Inc.

Judge Walrath has ordered the Chapter 7 Trustee to establish a
reserve for his compensation and all his legal fees incurred in
connection with the disposition of the Opco Debtor's estates.

Upon payment by Apto Solutions of the Estates' Net Sale Proceeds,
the Court authorizes the Chapter 7 Trustee to:

  (i) deduct his legal fees from the Net Sale Proceeds;

(ii) deduct the estate's portion equal to 12.5%; and

(iii) pay to the Second Lien Agent the remaining 87.5% of the
      Net Recovery.

As adequate protection for the release and application of the
Cash Collateral of the Prepetition First Lien and Second Lien
Lenders, Judge Walrath prohibits the Chapter 7 Trustee to recover
from the cash collateral (a) any amounts paid to or retained by
Apto Solutions under the Chapter 7 Trustee's agreement with the
firm, (b) the Trustee Fee; and (c) the Legal Fees.

                   Parties' Objections
                  to Cash Collateral Use

Before the Court entered the Final Cash Collateral Order, several
parties made known their objections to the Opco Debtors' request.
Among those parties are:

  * SB Capital Group, LLC, Tiger Capital Group, LLC and Hudson
    Capital Partners, LLC, as liquidating consultants to the
    Opco Debtors;

  * Wells Fargo Bank Retail Finance LLC, as agent for the First
    Lien Lenders; and

  * Fort Bend County, Harris County, Montgomery County, and
    Cypress-Fairbanks Independent School District.

The Consultants opposed the use of the cash collateral until
portion of the sale proceeds are turned over to them.  According
to the Consultants, they have earned $1,752,162 in Consulting
Fees; furniture, fixture & equipment fees; and unreimbursed
expenses for the services they provided to the Opco Debtors
pursuant to a Consulting Agreement they entered into the Debtors.
The Consultants also sought $40,000 in legal fees and expenses.
The Consultants note that as of January 6, 2009, they only
received $1,324,622 of the sale proceeds.  Thus, the Consultants
sought the turnover of the remaining $467,539 to them.  In the
alternative, the Consultants sought that all proceeds be placed
in an interest-bearing escrow account pending a full evidentiary
hearing on the merits determining the nature and extent of their
interest in the proceeds; and to the extent appropriate, that
they be provided adequate protection for the Chapter 7 Trustee's
use of the cash collateral.

Wells Fargo Bank Retail Finance LLC, as administrative agent for
the DIP Lenders, also opposed the use of its cash collateral to
the extent that it is not provided adequate protection or an
adequate indemnity reserve against any potential exposure for
expenses which may be chargeable to it, pursuant to Section
506(c) of the Bankruptcy Code.

Fort Bend County, Harris County, Montgomery County and Cypress-
Fairbanks Independent School District, objected to the carve out
agreement to the extent that it purports to pay Schultze Asset
Management, a junior secured creditor of the Opco Debtors, from
collateral in which they hold valid and perfected liens against.
As senior secured creditors, the Taxing Authorities sought that
approval of the Carve Out Agreement be conditioned on the
inclusion of a carve out provision for the ad valorem tax liens.
Subsequently, however, the Objecting Taxing Authorities withdrew
their limited objection without prejudice.

                      Objections Resolved

Upon review of the cash collateral objections, Judge Walrath
directs Wells Fargo to set aside and hold in reserve $106,114,
which represents the claim amount of the Texas Taxing
Authorities, pending further Court order.

The Court also overruled the objection asserted by the
Consultants, without prejudice to the Consultants' right to bring
an appropriate proceeding or motion seeking payment of their
postpetition claim.

                         About Tweeter Opco

Tweeter Opco, LLC, was formed in July 2007 to acquire the business
operations and assets of Tweeter Home Entertainment Group, Inc.
Tweeter Opco filed for Chapter 11 protection on
Nov. 5, 2008 (Bankr. D. Del. Case No. 08-12646).  Chun I. Jang,
Esq., and Cory D. Kandestin, Esq., at Richards, Layton & Finger,
P.A., assisted the company in its restructuring effort.  The
company listed assets of $50 million to $100 million and debts
of $50 million to $100 million.

Judge Mary Walrath of the U.S. Bankruptcy Court for the District
of Delaware converted the Opco Debtors' Chapter 11 cases to
Chapter 7 liquidation proceedings effective as of December 5,
2008.  George L. Miller from the accounting firm Miller Coffey
Tate has been appointed to serve as trustee of the Chapter 7
proceedings of Tweeter Opco, LLC, and its affiliates.

                       About Tweeter Home

Based in Canton, Mass., Tweeter Home Entertainment Group Inc.
-- http://www.tweeter.com/-- retails mid-to high-end audio and
video consumer electronics products.  Tweeter and seven of its
affiliates filed for chapter 11 Protection on June 11, 2007
(Bankr. D. Del. Case Nos. 07-10787 through 07-10796).  Gregg M.
Galardi, Esq., Mark L. Desgrosseilliers, Esq., and Sarah E.
Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP,
represented the Debtors.  Kurtzman Carson Consultants LLC acted as
the Debtors' claims and noticing agent.

Bruce Grohsgal, Esq., William P. Weintraub, Esq., and Rachel Lowy
Werkheiser, Esq., at Pachulski Stang Ziehl & Jones LLP; and Scott
L. Hazan, Esq., Lorenzo Marinuzzi, Esq., and Todd M. Goren, Esq.,
at Otterbourg, Steindler, Houston & Rosen, P.C., represented the
Official Committee of Unsecured Creditors.

As of Dec. 21, 2006, Tweeter had total assets of $258,573,353 and
total debts of $190,417,285.  The Debtors' exclusive period to
file a plan of reorganization expired on June 5, 2008.

Bankruptcy Creditors' Service, Inc., publishes Tweeter Bankruptcy
News.  The newsletter tracks the bankruptcy proceedings of Tweeter
Home Entertainment Group, Inc., and its affiliates, and the
subsequent bankruptcy cases of its buyer, Tweeter Opco LLC.
(http://bankrupt.com/newsstand/or 215/945-7000)


TWEETER OPCO: Court Rules on Disposition of Leases, Other Assets
----------------------------------------------------------------
Judge Mary Walrath of the U.S. Bankruptcy Court for the District
of Delaware authorized George L. Miller, as the Chapter 7 trustee
overseeing the liquidation proceedings of Tweeter Opco LLC and its
affiliates, to sell 65 vehicles owned by the Opco Debtors, free
and clear of liens for not less than $2,000 per van.  The Court
directs the Chapter 7 Trustee to file a certification of counsel,
identifying the buyer and the purchase price for each vehicle.

Judge Walrath also authorized the Chapter 7 trustee to reject
effective as of December 31, 2008, more than 70 non-residential
real property leases, a list of which can be accessed for free at
http://researcharchives.com/t/s?3657 Judge Walrath directed the
Chapter 7 Trustee's representatives to promptly return all keys,
cards, or codes for the respective premises to the landlords.

Before the Court entered its ruling, Highway 9 LLC contended that
the Chapter 7 Trustee should not be permitted to reject its
lease, without first surrendering possession of the premises.
According to Highway 9, if the Chapter 7 Trustee is unable to do
so by December 31, 2008, then it should be permitted to cut any
locks at the premises, to disarm any security codes, and to take
whatever actions necessary to gain access to the premises as of
December 31, 2008.

In a separate order, Judge Walrath authorized the Opco Debtors to
reject 32 non-residential leases effective as of November 30,
2008.  A list of the Rejected Leases can be accessed for free at:

               http://ResearchArchives.com/t/s?375d

Peter C. Hughes, Esq., at Dilworth Paxson LLP, in Wilmington,
Delaware, had informed the Court that no objections were filed
against the Debtors' request.

Pursuant to the Court's instructions, rejection of the PRGL
Paxton Limited Partnership Lease will become effective on the
earlier of (i) the date on which the Chapter 7 Trustee surrenders
the property to PRGL; or (ii) December 31, 2008.

       Ch. 7 Trustee to Abandon Property in Rejected Leases

Before their cases were converted to Chapter 7, the Opco Debtors
rejected certain of their unexpired leases effective as of
November 30, 2008.  The lease rejection did not address the
treatment of any of the personal property that remained on the
leased premises.

The Chapter 7 Trustee told the Court that he was informed that the
First and Second Lien Lenders, Wells Fargo Retail Finance, LLC,
and Schultze Agency Services, LLC, do not object to the
abandonment of the personal property on the leased premises.  Mr.
Miller said that he has been informed that Suncoast
Marketing, Inc., currently store printed invoices, sale slips, and
signage, supposedly used by the Opco Debtors in the operation of
their former business.

Mr. Miller said he is presently has possession of titles to three
vehicles that have been sold by the Opco Debtors prior to the
Conversion Date.  According to Mr. Miller, the purchasers have
been in possession of the vehicles but the Opco Debtors have not
conveyed title of the sold vehicles to the purchasers.  The
vehicles are:

           Unit         Model            Plate
           ----         -----            -----
           04259        Astro Cargo       M76098
           05292        G 2500 Cargo      YWT6742
           07401        G 3500 Cargo      BDT0353

In this regard, Mr. Miller seeks the Court's authority to:

  (a) abandon any personal property of the Opco Debtors on
      premises previously leased, which leases were rejected as
      of November 30, 2008;

  (b) abandon any and all of the Opco Debtors' invoices, sale
      slips and other printed property currently being stored by
      Suncoast Marketing at various warehouses; and

  (c) transfer title of the three vehicles previously sold by
      the Opco Debtors prior to the Conversion Date.

                         About Tweeter Opco

Tweeter Opco, LLC, was formed in July 2007 to acquire the business
operations and assets of Tweeter Home Entertainment Group, Inc.
Tweeter Opco filed for Chapter 11 protection on
Nov. 5, 2008 (Bankr. D. Del. Case No. 08-12646).  Chun I. Jang,
Esq., and Cory D. Kandestin, Esq., at Richards, Layton & Finger,
P.A., assisted the company in its restructuring effort.  The
company listed assets of $50 million to $100 million and debts
of $50 million to $100 million.

Judge Mary Walrath of the U.S. Bankruptcy Court for the District
of Delaware converted the Opco Debtors' Chapter 11 cases to
Chapter 7 liquidation proceedings effective as of December 5,
2008.  George L. Miller from the accounting firm Miller Coffey
Tate has been appointed to serve as trustee of the Chapter 7
proceedings of Tweeter Opco, LLC, and its affiliates.

                       About Tweeter Home

Based in Canton, Mass., Tweeter Home Entertainment Group Inc.
-- http://www.tweeter.com/-- retails mid-to high-end audio and
video consumer electronics products.  Tweeter and seven of its
affiliates filed for chapter 11 Protection on June 11, 2007
(Bankr. D. Del. Case Nos. 07-10787 through 07-10796).  Gregg M.
Galardi, Esq., Mark L. Desgrosseilliers, Esq., and Sarah E.
Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP,
represented the Debtors.  Kurtzman Carson Consultants LLC acted as
the Debtors' claims and noticing agent.

Bruce Grohsgal, Esq., William P. Weintraub, Esq., and Rachel Lowy
Werkheiser, Esq., at Pachulski Stang Ziehl & Jones LLP; and Scott
L. Hazan, Esq., Lorenzo Marinuzzi, Esq., and Todd M. Goren, Esq.,
at Otterbourg, Steindler, Houston & Rosen, P.C., represented the
Official Committee of Unsecured Creditors.

As of Dec. 21, 2006, Tweeter had total assets of $258,573,353 and
total debts of $190,417,285.  The Debtors' exclusive period to
file a plan of reorganization expired on June 5, 2008.

Bankruptcy Creditors' Service, Inc., publishes Tweeter Bankruptcy
News.  The newsletter tracks the bankruptcy proceedings of Tweeter
Home Entertainment Group, Inc., and its affiliates, and the
subsequent bankruptcy cases of its buyer, Tweeter Opco LLC.
(http://bankrupt.com/newsstand/or 215/945-7000)


TWEETER OPCO: Court Sets May 26 As General Claims Bar Date
----------------------------------------------------------
The Bankruptcy Court for the District of Delaware set May 26,
2009, as the deadline for entities wishing to assert prepetition
claims against Tweeter Opco LLC and its debtor-affiliates to file
proofs of claim in their Chapter 7 cases.

The Court has also set June 3, 2009, as the deadline for
governmental units to file proofs of claim against the Opco
Debtors.

Proofs of claim must be filed on or before the Claims Bar date
with the Clerk of the Bankruptcy Court at:

           Clerk of the Bankruptcy Court
           824 Market Street, 3rd Floor
           Wilmington, Delaware 19801
           Phone (302) 252-2900

Separately, George L. Miller, the Chapter 7 Trustee of the
liquidations proceedings of the Opco Debtors, has asked the Court
to establish:

  (a) March 30, 2009, as the last date of filing requests for
      payment of administrative expense claims or the
      "Administrative Expense Claim Bar Date," and

  (b) June 7, 2009, as the last date for governmental units to
      assert request for payment of Administrative Claim or
      Governmental Claim Bar Date.

Mr. Miller asserts that a Bar Date will facilitate the resolution
of claims in the Opco Debtors' Chapter 7 cases.

He further points out that the use of the motion process for
determination of each Chapter 11 Administrative Claim places an
administrative burden on each Claimant and would cause additional
litigation expenses.  Thus, to avoid piecemeal litigation and
unnecessary expenditure of the Claimant and estate resources, Mr.
Miller proposes the use of a customized Claim Form, a copy of
which can be accessed for free at:

                http://researcharchives.com/t/s?3802

Moreover, to efficiently evaluate and provide for the payment of
Chapter 11 Administrative Claims, Mr. Miller asks the Court's
authority to establish uniform procedures for the allowance of
Chapter 11 administrative claims.  Mr. Miller proposes that:

  (1) All proofs of claim for Chapter 11 Administrative Claims
      will conform substantially to the customized proof of
      claim form created by the Chapter 7 Trustee;

  (2) All proofs of claim for Chapter 11 Administrative Claims
      must be (i) be signed by the Claimant or its authorized
      agent; (ii) include supporting documentation; (iii) be in
      the English language; and (iv) denominated in United
      States currency;

  (3) Any holder of more than one Chapter 11 Administrative
      Claim must file a separate proof of claim with respect to
      each claim;

  (4) Any holder of a Chapter 11 Administrative Claim against
      more than one Debtor must file a separate proof of claim
      with respect to each Debtor;

  (5) All holders of Chapter 11 Administrative Claims must
      identify on their proofs of claim the specific Debtor
      against which their claim is asserted and the case number
      of the Debtor's bankruptcy case;

  (6) All Chapter 11 Administrative Claims that were filed by
      way of motion or application prior to the entry of the
      Admin Claims Procedures Motion and all Chapter 11
      Administrative Claim that may be filed pursuant to the
      Court will be deemed to be timely filed Chapter 11
      Administrative Claims in these bankruptcy cases;

  (7) Claimants who have or will file Chapter 11 Administrative
      Claims will not be entitled to immediate payment of those
      claims;

  (8) The allowance of all timely filed Chapter 11
      Administrative Claims will be determined in accordance
      with the claims allowance process that generally applies
      to general prepetition and governmental claims filed in
      these bankruptcy cases;

  (9) Any hearings presently scheduled on any Motion or
      Application related to Administrative Claims filed before
      January 13, 2009, will be canceled upon the entry of a
      Administrative Claims Procedures Order.

(10) Nothing in the Administrative Claims Procedures affects
      the rights and remedies of the Chapter 7 Trustee or any
      other party-in-interest to pursue any potential avoidance
      actions or other claims that the Chapter 7 Trustee or
      other estates may have, or to assert any rights under
      Chapter 11, all of which claims, rights and defenses are
      reserved and preserved.

Claimants who have previously sought allowance and payment of a
Chapter 11 Administrative Claim are not required to re-file their
claims on the Claim Form.  Any motion or application for
allowance and payment of administrative claim that has been filed
will be treated as having been timely and properly filed in
accordance with the Procedures.

Any person or entity that files an Administrative Expense Claim
and asserts that all or any portion of that claim is chargeable
against a property securing an allowed secured claim must be
required to specifically indicate (l) that the claim is subject
to Section 506(a) of the Bankruptcy Code and (2) the basis for
its assertion.

Each Administrative Claimant who failed to file within the Bar
Date deadline will be forever barred, restrained and enjoined
from asserting a claim against the Opco Debtors or their estates;
and will not receive distribution on account of the claim.

The proposed Procedures will provide clear guidance to all
parties as to the process by which Chapter 11 Administrative
Claims may be allowed and paid, Mr. Miller avers.

Accordingly, Mr. Miller asks the Court to:

  (i) approve a customized claim form to be used by holders of
      Chapter 11 administrative expense claims;

(ii) approve the proposed uniform procedures for the filing,
      allowance and payment of all Chapter 11 Administrative
      Claims; and

(iii) terminate certain hearings relating to requests for
      allowance and payment of Chapter 11 Administrative Claims.

                         About Tweeter Opco

Tweeter Opco, LLC, was formed in July 2007 to acquire the business
operations and assets of Tweeter Home Entertainment Group, Inc.
Tweeter Opco filed for Chapter 11 protection on
Nov. 5, 2008 (Bankr. D. Del. Case No. 08-12646).  Chun I. Jang,
Esq., and Cory D. Kandestin, Esq., at Richards, Layton & Finger,
P.A., assisted the company in its restructuring effort.  The
company listed assets of $50 million to $100 million and debts
of $50 million to $100 million.

Judge Mary Walrath of the U.S. Bankruptcy Court for the District
of Delaware converted the Opco Debtors' Chapter 11 cases to
Chapter 7 liquidation proceedings effective as of December 5,
2008.  George L. Miller from the accounting firm Miller Coffey
Tate has been appointed to serve as trustee of the Chapter 7
proceedings of Tweeter Opco, LLC, and its affiliates.

                       About Tweeter Home

Based in Canton, Mass., Tweeter Home Entertainment Group Inc.
-- http://www.tweeter.com/-- retails mid-to high-end audio and
video consumer electronics products.  Tweeter and seven of its
affiliates filed for chapter 11 Protection on June 11, 2007
(Bankr. D. Del. Case Nos. 07-10787 through 07-10796).  Gregg M.
Galardi, Esq., Mark L. Desgrosseilliers, Esq., and Sarah E.
Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP,
represented the Debtors.  Kurtzman Carson Consultants LLC acted as
the Debtors' claims and noticing agent.

Bruce Grohsgal, Esq., William P. Weintraub, Esq., and Rachel Lowy
Werkheiser, Esq., at Pachulski Stang Ziehl & Jones LLP; and Scott
L. Hazan, Esq., Lorenzo Marinuzzi, Esq., and Todd M. Goren, Esq.,
at Otterbourg, Steindler, Houston & Rosen, P.C., represented the
Official Committee of Unsecured Creditors.

As of Dec. 21, 2006, Tweeter had total assets of $258,573,353 and
total debts of $190,417,285.  The Debtors' exclusive period to
file a plan of reorganization expired on June 5, 2008.

Bankruptcy Creditors' Service, Inc., publishes Tweeter Bankruptcy
News.  The newsletter tracks the bankruptcy proceedings of Tweeter
Home Entertainment Group, Inc., and its affiliates, and the
subsequent bankruptcy cases of its buyer, Tweeter Opco LLC.
(http://bankrupt.com/newsstand/or 215/945-7000)


TWEETER OPCO: Sec. 341 Meeting of Creditors Slated for Feb. 25
--------------------------------------------------------------
Roberta DeAngelis, the acting United States Trustee for Region 3,
will convene a meeting of the creditors of Tweeter Opco, LLC, and
its debtor affiliates in their Chapter 7 proceedings at 11:00
a.m., on February 25, 2009, at 844 King Street, Room 2112, in
Wilmington, Delaware.

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

Attendance by the Debtors' creditors at the meeting is welcome,
but not required.  The Sec. 341(a) meeting offers the creditors a
one-time opportunity to examine the Debtors' representative under
oath about the Debtors' financial affairs and operations that
would be of interest to the general body of creditors.

                         About Tweeter Opco

Tweeter Opco, LLC, was formed in July 2007 to acquire the business
operations and assets of Tweeter Home Entertainment Group, Inc.
Tweeter Opco filed for Chapter 11 protection on
Nov. 5, 2008 (Bankr. D. Del. Case No. 08-12646).  Chun I. Jang,
Esq., and Cory D. Kandestin, Esq., at Richards, Layton & Finger,
P.A., assisted the company in its restructuring effort.  The
company listed assets of $50 million to $100 million and debts
of $50 million to $100 million.

Judge Mary Walrath of the U.S. Bankruptcy Court for the District
of Delaware converted the Opco Debtors' Chapter 11 cases to
Chapter 7 liquidation proceedings effective as of December 5,
2008.  George L. Miller from the accounting firm Miller Coffey
Tate has been appointed to serve as trustee of the Chapter 7
proceedings of Tweeter Opco, LLC, and its affiliates.

                       About Tweeter Home

Based in Canton, Mass., Tweeter Home Entertainment Group Inc.
-- http://www.tweeter.com/-- retails mid-to high-end audio and
video consumer electronics products.  Tweeter and seven of its
affiliates filed for chapter 11 Protection on June 11, 2007
(Bankr. D. Del. Case Nos. 07-10787 through 07-10796).  Gregg M.
Galardi, Esq., Mark L. Desgrosseilliers, Esq., and Sarah E.
Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP,
represented the Debtors.  Kurtzman Carson Consultants LLC acted as
the Debtors' claims and noticing agent.

Bruce Grohsgal, Esq., William P. Weintraub, Esq., and Rachel Lowy
Werkheiser, Esq., at Pachulski Stang Ziehl & Jones LLP; and Scott
L. Hazan, Esq., Lorenzo Marinuzzi, Esq., and Todd M. Goren, Esq.,
at Otterbourg, Steindler, Houston & Rosen, P.C., represented the
Official Committee of Unsecured Creditors.

As of Dec. 21, 2006, Tweeter had total assets of $258,573,353 and
total debts of $190,417,285.  The Debtors' exclusive period to
file a plan of reorganization expired on June 5, 2008.

Bankruptcy Creditors' Service, Inc., publishes Tweeter Bankruptcy
News.  The newsletter tracks the bankruptcy proceedings of Tweeter
Home Entertainment Group, Inc., and its affiliates, and the
subsequent bankruptcy cases of its buyer, Tweeter Opco LLC.
(http://bankrupt.com/newsstand/or 215/945-7000)


UAL CORP: 8 US Airlines Post 2008 Losses Totaling $19.6 Billion
---------------------------------------------------------------
Eight of the nine major U.S. airlines that have disclosed fourth
quarter and full year 2008 results have posted losses aggregating
$19.6 billion.  Only Southwest Airlines posted a net profit.

                                Net Profit         Net Profit
                             Full Year 2008      Full Year 2007
                             --------------      --------------
Delta Air Lines, Inc.       ($8,900,000,000)     $1,600,000,000
AMR Corp.                    (2,100,000,000)        504,000,000
Southwest Air Lines             178,000,000         645,000,000
UAL Corp.                    (5,348,000,000)        403,000,000
US Airways Group Inc.        (2,210,000,000)        427,000,000
Continental Airlines  Inc.     (585,000,000)        459,000,000
Alaska Air Group Inc.          (135,900,000)        124,300,000
Skywest Inc.                         --                  --
JetBlue Airways Corp.           (76,000,000)         41,000,000
AirTran Holdings, Inc.         (273,829,000)         52,683,000

Skywest is expected to release its fourth quarter 2008 results on
February 11.  The figures provided by JetBlue were pre-tax profit
(or losses).

                                Net Profit         Net Profit
                            4th Quarter '08     4th Quarter '07
                            ---------------     ---------------
Delta Air Lines, Inc.       ($1,400,000,000)       ($70,000,000)
AMR Corp.                      (340,000,000)        (69,000,000)
UAL Corp.                    (1,303,000,000)        (53,000,000)
Southwest Airlines              (56,000,000)        111,000,000
US Airways                     (541,000,000)        (79,000,000)
Continental Airlines           (266,000,000)        (32,000,000)
Alaska Air Group Inc.           (75,200,000)         (7,400,000)
Skywest Inc.                         --                  --
Jetblue Airways Corp.           (49,000,000)         (3,000,000)
AirTran Holdings, Inc.         (118,391,000)         (2,171,000)

                       High Fuel Jet Prices

The airlines said high fuel prices for most of 2008 have
contributed to their losses.

AMR, the parent of American Airlines, said that historically high
and volatile jet fuel prices continued to challenge it in the
fourth quarter of 2008.  AMR paid $133 million and $2.7 billion
more for fuel in the fourth quarter and for all of 2008,
respectively, than it would have paid at prevailing prices from
the corresponding prior-year periods.

Delta faced over $2 billion in increased fuel costs in 2008.
While fuel prices dropped in the fourth quarter 2008, Delta paid
for high fuel prices due to its fuel hedging contracts.  Delta
would have reported a $167 million net profit excluding special
items in the December 2008 quarter, if fuel had been purchased at
market prices.

UAL said the historic peak in prices and the impact on hedges
driven by the rapid decline resulted in a $2.9 billion increase in
cost compared to 2007 fuel prices.  UAL recorded $370 million in
cash losses on fuel hedges that settled in the quarter, as the
recent fall in fuel prices drove losses on hedges put in place
earlier in the year to mitigate the steep increase in prices that
had occurred in the second and third quarters of 2008. In
addition, the company also recorded non-cash, net mark-to-market
losses on its fuel hedges of $566 million.

US Airways Group Chairman and CEO Doug Parker stated, "Like other
airlines that have reported before us, our financial results
reflect the staggering increase in fuel prices that we faced
throughout most of 2008.  In fact, had our 2008 fuel price
including realized gains and losses on fuel hedging instruments
remained at 2007 levels, the company's fuel expense would have
been approximately $1.4 billion lower.

                  Lower Revenues Due to Recession

Delta Air Lines, which completed its merger with Northwest
Airlines in 2008, said that during the fourth quarter, on a
combined basis, passenger revenue fell 1%, or $54 million,
compared to the prior year period due to a 4% decline in capacity,
partially offset by a 3% increase in unit revenue.  These results
reflect the weakening of the revenue environment during the
quarter caused by the global economic recession.

According to UAL, total passenger revenue for the quarter
decreased 8.7%  year-over- year as consolidated capacity declined
10.6% , consolidated yield increased 2.4%  and load factor
decreased 0.3 points.

Continental Airlines, which have been mentioned in possible merger
talks with other U.S. airlines in 2008, said weakening economic
conditions and highly volatile fuel prices presented financial
challenges for the airline in the fourth quarter 2008. Continental
recorded a fourth quarter net loss of $266 million.

Dave Barger, JetBlue's CEO, said that while he was appointed to
report a loss, he has been satisfied with JetBlue's performance in
2008.  "Against the backdrop of record fuel prices and
unprecedented economic challenges, we effectively managed our
capacity and strengthened our network.  We also made significant
progress in our efforts to further enhance the JetBlue experience
for our customers.  JetBlue's industry-leading unit revenue growth
throughout the year reflects the outstanding work of our
crewmembers.

"2008 was an especially tough and challenging year," said Bob
Fornaro, AirTran Airways' chairman, president and chief executive
officer. "We thank our dedicated, hard-working Crew Members and
our loyal customers for helping us overcome the many obstacles we
faced in 2008. Our Crew Members continue to strive to provide
exceptional customer service, and a high-quality product while
offering value to the traveling public. Despite the industry
challenge shifting from high oil costs to concerns regarding
consumer demand, our 2008 initiatives have us well positioned to
return to profitability in 2009."

                  Liquidity, Bankruptcy Concerns

Delta, UAL and AirTran said that they have strengthened their
liquidity that would allow them to face the challenges of 2009.

Michael Lowry, project manager for AVIATION WEEK's Top-
Performing Companies report, said in September 2008 that
USAirways, AMR, Northwest Airlines, AirTran and Continental would
have high bankruptcy risk in 2009.

The September report also said that USAir was a high risk to file
for bankruptcy again in 2008 -- it had entered and exited
bankruptcy protection twice -- but USAir has been able, so far, to
survive the crisis.  Only smaller airlines filed for bankruptcy in
2008.  These included Frontier Airlines, Skybus Airlines Inc.,
Aloha Airgroup Inc. and ATA Airlines Inc., who made its second
Chapter 11 filing.

Northwest Airlines has completed its merger with Delta Air to
form one of the world's largest airlines.  Delta noted that as of
Dec. 31, 2008, it had $6.1 billion in total liquidity and cash
collateral posted with hedge counterparties.  As of Dec. 31, 2007,
Delta had $3.3 billion in cash, cash equivalents and short-term
investments.

UAL said it completed several transactions during the fourth
quarter that helped strengthen its liquidity.  It raised
$215 million from aircraft financing transactions that closed
during the quarter along with $66 million in proceeds from asset
sales. The company also received net proceeds of $107 million
through equity issuances during the quarter.

AirTran noted that it ended the fourth quarter with $340.5 million
in unrestricted cash and investments, its highest year-end balance
since 2005.

                           2009 Outlook

Most of the airlines expect weak revenues in 2008, but expect
those revenues to be offset by lower fuel prices and savings from
cost cutting measures.  Some of the airlines have also disclosed
capacity cuts for 2009.

AMR has decided not to use MD-80s to backfill flying associated
with the seven 737s that no longer will be delivered in 2009.
Largely as a result of this decision, the company's 2009 mainline
capacity will decline by more than one percentage point compared
to previous guidance provided in October.

"Our fourth quarter and full-year 2008 results reflect the
difficulties all airlines faced last year, but we believe our
steps to reduce capacity, bolster liquidity, and improve revenue
helped us better manage the challenges of record fuel prices and a
weak economy," said AMR Chairman and CEO Gerard Arpey.

"While significant hurdles remain, I am guardedly optimistic we
can regain momentum in 2009," Mr. Arpey said.

"Despite the difficult economic environment, we expect to be
solidly profitable in 2009 driven by lower fuel costs, capacity
discipline, and merger synergies," said Richard Anderson, Delta's
chief executive officer.  "Delta people have a great track record
for achieving their goals, and I am confident that 2009 will be
another successful year."

"Delta's proactive decision to reduce domestic capacity during
2008 mitigated the impact of the decline in demand we saw over the
course of the fourth quarter. We expect the worldwide economy to
be difficult throughout 2009; however, if fuel prices remain at
current levels, we believe the benefit of lower fuel prices will
more than offset the revenue decline." said Edward Bastian,
Delta's president.  "Delta has the tools required to manage
through these tough economic times -- with the broadest, most
diverse network in the industry; an estimated $2 billion in annual
merger synergies to be obtained; best-in-class costs; a solid
liquidity balance; unmatched fleet flexibility; and the discipline
and drive of the new Delta team."

Delta projects that consolidated passenger revenue in 2009 will be
down 4% to $4.8 billion.  Fuel price will be $2.15 per gallon.
During the December 2008 quarter, Delta hedged 58% of its fuel
consumption, resulting in an average fuel price of $2.90 per
gallon -- included in the fuel price is $507 million in fuel hedge
losses in the fourth quarter.  In 2007, when Delta paid $2.21 a
gallon, it noted that its operating results were significantly
impacted by changes in the price and availability of aircraft
fuel. In 2007, its average fuel price per gallon rose 5% to $2.21,
as compared to an average price of $2.10 in 2006, which was 15%
higher than our average price of $1.79 in 2005.

UAL believes that for full year 2009 revenues will be down 8%
to 7%.  United said it is on track to complete the previously
announced removal of 100 aircraft from its fleet by the end of
2009.   United added it is taking additional steps in 2009 to
reduce overhead costs.  The company will further reduce the number
of salaried and management employees by approximately 1,000
positions by the end of 2009. This is in addition to the 1,500
positions the company announced in the second quarter, and when
completed, will bring the total reduction in its salaried and
management staff to approximately 2,500, or nearly 30% , since the
beginning of 2008.

"Last year was by any measure a challenging year -- defined by
unprecedented volatility and unpredictability, but for United it
was also characterized by steady and durable improvements," said
Glenn Tilton, United's chairman, president and CEO. "Our
management team made timely decisions that resulted in fundamental
improvements across our business, which will hold us in good stead
in 2009."

Alaska Air Group, which operates Alaska Air and Horizon Air, noted
that excluding special items, it had net income of $16.4 million
in the 4th quarter of 2008 compared to a $17.9 million net loss in
the same period in 2007.  "In a year of unprecedented volatility
that included soaring fuel prices and an economic meltdown, we
were pleased to eke out a small profit for 2008, excluding special
items, and be one of only a few major airlines to do so," said
Bill Ayer, Alaska Air Group's chairman and chief executive
officer.  "Our concerted efforts to control costs, improve our
operation and tailor our schedule to better match customer demand
have prepared us to face whatever hurdles the current year
brings."

According to Mr. Parker, USAir CEO, measures executed by the
airlines before aimed at offsetting high fuel prices in 2008 have
significantly softened the blow from the economic downturn that
the airline industry now faces.  "As we begin the new year, US
Airways is well prepared for a difficult global macroeconomic
environment.  We are running a great operation, have restructured
our business model through the introduction of new fees, reduced
capacity and increased our liquidity. With the help of falling
fuel prices, we believe we are well positioned for the challenges
ahead," concluded Parker.

Larry Kellner, Continental's chairman and chief executive officer,
said, "While there are continuing hard times ahead, thanks to our
team, we are well-positioned to maintain our place as an industry
leader."  Continental said it will inaugurate daily nonstop
service between New York and Shanghai in March 2009.

For the full year 2009, JetBlue expects to report an operating
margin between 12 and 14% .  Capacity, according to JetBlue, for
the full year 2009 is expected to decrease between zero and 2%
over 2008 and stage length is expected to decrease about 6% over
full year 2008.

             Full Year 2008 Net Profit for Southwest

The usually profitable Southwest Airlines also posted a fourth
quarter loss -- $56,000,000 net loss.  However, Southwest noted
that excluding special charges and other items, its fourth quarter
2008 net income was $61 million, bringing it to its 71st
consecutive quarter of profitability.

Gary C. Kelly, CEO of Southwest, stated: "We are very proud to
report another profitable year in one of the most difficult years
in aviation's 100-year-plus history.  We certainly had our
challenges in 2008, but thanks to the extraordinary efforts and
Warrior Spirit of our People, we persevered to report our 36th
consecutive year of profitability."

"We celebrated many operational successes throughout 2008 and
enhanced our already exceptional Brand and Customer Experience.
With one full year of our new boarding system and Business Select
product offering, the Customer response has been overwhelmingly
favorable. We've made significant advancements in our revenue
management and network optimization capabilities.  And, we've made
great progress on the technology side to lay the foundation for
improved Customer Service, a new southwest.com, a new Rapid
Rewards program, and international codeshare agreements with
WestJet to Canada and Volaris to Mexico.

"Despite the difficult credit markets, we were able to boost our
liquidity by $1.1 billion during fourth quarter 2008 through
several financing transactions to end the year with $1.8 billion
in unrestricted cash and short-term investments. After yearend, we
raised an additional $173 million in cash upon the closing of the
second tranche of our sale and leaseback transaction for an
additional five of our 737-700 aircraft.

"Due to the rapid collapse in energy prices during fourth quarter
2008, we substantially reduced our net fuel hedge position to
approximately ten percent of our estimated fuel gallons in each
year from 2009 through 2013.  Based on this current 2009 portfolio
and future market prices for energy (as of January 20, 2009), we
estimate our economic fuel costs per gallon, including fuel taxes,
to be approximately $1.80 and under $1.90, for first quarter and
full year 2009, respectively.  This current full year 2009
projection is more than $1 billion lower than we were projecting
last summer for 2009.

                       About AirTran Airways

AirTran Airways, a subsidiary of AirTran Holdings, Inc. (NYSE:
AAI), a Fortune 1000 company, is ranked number one in the 2008
Airline Quality Rating study. The airline offers coast-to-coast
flights, North America's newest all-Boeing fleet, friendly service
and Business Class and complimentary XM Satellite Radio on every
flight. To book a flight, visit http://www.airtran.com.

                           *     *     *

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

                      About Delta Air Lines

With its acquisition of Northwest Airlines, Atlanta, Georgia-based
Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or
http://www.nwa.com/-- is now the world's largest airline.  From
its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St.
Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its
Northwest subsidiary and Delta Connection carriers offer service
to more than 376 destinations worldwide in 66 countries and serves
more than 170 million passengers each year.  Delta's marketing
alliances allow customers to earn and redeem either SkyMiles or
WorldPerks on more than 16,000 daily flights offered by SkyTeam
and other partners.

The merger closed on October 29, 2008.

Prior to the merger, Delta was the world's second-largest airline
in terms of passengers carried and Northwest was the world's
fourth largest airline.

Northwest and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R.
Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at
Cadwalader, Wickersham & Taft LLP in Washington, represented the
Northwest Debtors in their restructuring efforts. The Official
Committee of Unsecured Creditors retained Scott L. Hazan, Esq., at
Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy
counsel.  When the Northwest Debtors filed for bankruptcy, they
listed $14.4 billion in total assets and
$17.9 billion in total debts.  On May 21, 2007, the Court
confirmed the Northwest Debtors' amended plan.  That amended plan
took effect May 31, 2007.  (Northwest Airlines Bankruptcy News
Issue No. 114; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).

Delta and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall
S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta
Debtors in their restructuring efforts.  Timothy R. Coleman at The
Blackstone Group L.P. provided the Delta Debtors with financial
advice.  Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provided the Official
Committee of Unsecured Creditors with legal advice. John McKenna,
Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman
at Mesirow Financial Consulting, LLC, served as the Committee's
financial advisors.  On April 25, 2007, the Court confirmed the
Delta Debtors' plan.  That plan became effective on April 30,
2007.  The Court entered a final decree closing 17 cases on Sept.
26, 2007.  (Delta Air Lines Bankruptcy News; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).

                     About United Airlines

United Airlines (NASDAQ: UAUA) operates more than 3,000* flights a
day on United and United Express to more than 200 U.S. domestic
and international destinations from its hubs in Los Angeles, San
Francisco, Denver, Chicago and Washington, D.C. With key global
air rights in the Asia-Pacific region, Europe and Latin America,
United is one of the largest international carriers based in the
United States. United also is a founding member of Star Alliance,
which provides connections for our customers to 912 destinations
in 159 countries worldwide. United's 49,500 employees reside in
every U.S. state and in many countries around the world. News
releases and other information about United can be found at the
company's Web site at united.com.

                            *    *    *

As reported in the Troubled Company Reporter on July 29, 2008,
Standard & Poor's Ratings Services lowered its ratings on UAL
Corp. and subsidiary United Air Lines Inc. (both rated B-
/Negative/--), including lowering the long-term corporate credit
ratings on both entities to 'B-' from 'B', and removed the ratings
from CreditWatch, where they had been placed with negative
implications May 22, 2008, as part of an industrywide review.  The
outlook is negative.

                         About US Airways

US Airways, along with US Airways Shuttle and US Airways Express,
operates more than 3,100 flights per day and serves 200
communities in the U.S., Canada, Europe, the Caribbean and Latin
America. The airline employs nearly 34,000 aviation professionals
worldwide and is a member of the Star Alliance network, which
offers our customers more than 16,500 daily flights to 912
destinations in 159 countries worldwide. Travel + Leisure Magazine
named US Airways as one of the top-three airlines for 2008 in on-
time performance for the year (based on Department of
Transportation data for Sept. 1, 2007 through Aug. 31, 2008). And
for the tenth consecutive year, the airline received a Diamond
Award for maintenance training excellence from the Federal
Aviation Administration (FAA) for its Charlotte, North Carolina
hub line maintenance facility. For more company information, visit
usairways.com. (LCCF)

                          About JetBlue

New York-based JetBlue Airways has created a new airline category
based on value, service and style. Known for its award-winning
service and free TV as much as its low fares, JetBlue is now
pleased to offer customers Lots of Legroom and super-spacious Even
More Legroom seats. JetBlue introduced complimentary in-flight e-
mail and instant messaging services on aircraft "BetaBlue," a
first among U.S. domestic airlines. JetBlue is also America's
first and only airline to offer its own Customer Bill of Rights,
with meaningful and specific compensation for customers
inconvenienced by service disruptions within JetBlue's control.
Visit www.jetblue.com/promise for details. JetBlue serves 52
cities with 600 daily flights. New service to San Jose, Costa
Rica, begins in 2009. With JetBlue, all seats are assigned, all
travel is ticketless, all fares are one-way, and an overnight stay
is never required. For information or reservations call 1-800-
JETBLUE (1-800-538-2583) or visit www.jetblue.com.

                    About Continental Airlines

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

                          *     *     *

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

Continental Airlines, Inc. reported a working capital deficit of
US$202 million, with current assets of US$4.713 billion and
current liabilities of US$4.915 billion.

At Dec. 31, 2007, the Company had a positive working capital of
US$112 million, with US$4.561 billion in current assets and
US$4.449 billion in current liabilities.

As of Sept. 30, 2008, the Company had US$2.9 billion in
unrestricted cash, cash equivalents and short-term investments,
which is US$83 million higher than at Dec. 31, 2007. At Sept. 30,
2008, the Company also had US$164 million of restricted cash, cash
equivalents and short-term investments, which is primarily
collateral for estimated future workers' compensation claims,
credit card processing contracts, letters of credit and
performance bonds. Restricted cash, cash equivalents and short-
term investments at Dec. 31, 2007, totaled US$179 million.
Additionally, the Company held student loan-related auction
rate securities reported as long-term investments at Sept. 30,
2008 with a par value of US$147 million and a fair value of
US$130 million.


US AIRWAYS: Posts $2.21 Billion Full Year 2008 Loss
---------------------------------------------------
Eight of the nine major U.S. airlines that have disclosed fourth
quarter and full year 2008 results have posted losses aggregating
$19.6 billion.  Only Southwest Airlines posted a net profit.

                                Net Profit         Net Profit
                             Full Year 2008      Full Year 2007
                             --------------      --------------
Delta Air Lines, Inc.       ($8,900,000,000)     $1,600,000,000
AMR Corp.                    (2,100,000,000)        504,000,000
Southwest Air Lines             178,000,000         645,000,000
UAL Corp.                    (5,348,000,000)        403,000,000
US Airways Group Inc.        (2,210,000,000)        427,000,000
Continental Airlines  Inc.     (585,000,000)        459,000,000
Alaska Air Group Inc.          (135,900,000)        124,300,000
Skywest Inc.                         --                  --
JetBlue Airways Corp.           (76,000,000)         41,000,000
AirTran Holdings, Inc.         (273,829,000)         52,683,000

Skywest is expected to release its fourth quarter 2008 results on
February 11.  The figures provided by JetBlue were pre-tax profit
(or losses).

                                Net Profit         Net Profit
                            4th Quarter '08     4th Quarter '07
                            ---------------     ---------------
Delta Air Lines, Inc.       ($1,400,000,000)       ($70,000,000)
AMR Corp.                      (340,000,000)        (69,000,000)
UAL Corp.                    (1,303,000,000)        (53,000,000)
Southwest Airlines              (56,000,000)        111,000,000
US Airways                     (541,000,000)        (79,000,000)
Continental Airlines           (266,000,000)        (32,000,000)
Alaska Air Group Inc.           (75,200,000)         (7,400,000)
Skywest Inc.                         --                  --
Jetblue Airways Corp.           (49,000,000)         (3,000,000)
AirTran Holdings, Inc.         (118,391,000)         (2,171,000)

                       High Fuel Jet Prices

The airlines said high fuel prices for most of 2008 have
contributed to their losses.

AMR, the parent of American Airlines, said that historically high
and volatile jet fuel prices continued to challenge it in the
fourth quarter of 2008.  AMR paid $133 million and $2.7 billion
more for fuel in the fourth quarter and for all of 2008,
respectively, than it would have paid at prevailing prices from
the corresponding prior-year periods.

Delta faced over $2 billion in increased fuel costs in 2008.
While fuel prices dropped in the fourth quarter 2008, Delta paid
for high fuel prices due to its fuel hedging contracts.  Delta
would have reported a $167 million net profit excluding special
items in the December 2008 quarter, if fuel had been purchased at
market prices.

UAL said the historic peak in prices and the impact on hedges
driven by the rapid decline resulted in a $2.9 billion increase in
cost compared to 2007 fuel prices.  UAL recorded $370 million in
cash losses on fuel hedges that settled in the quarter, as the
recent fall in fuel prices drove losses on hedges put in place
earlier in the year to mitigate the steep increase in prices that
had occurred in the second and third quarters of 2008. In
addition, the company also recorded non-cash, net mark-to-market
losses on its fuel hedges of $566 million.

US Airways Group Chairman and CEO Doug Parker stated, "Like other
airlines that have reported before us, our financial results
reflect the staggering increase in fuel prices that we faced
throughout most of 2008.  In fact, had our 2008 fuel price
including realized gains and losses on fuel hedging instruments
remained at 2007 levels, the company's fuel expense would have
been approximately $1.4 billion lower.

                  Lower Revenues Due to Recession

Delta Air Lines, which completed its merger with Northwest
Airlines in 2008, said that during the fourth quarter, on a
combined basis, passenger revenue fell 1%, or $54 million,
compared to the prior year period due to a 4% decline in capacity,
partially offset by a 3% increase in unit revenue.  These results
reflect the weakening of the revenue environment during the
quarter caused by the global economic recession.

According to UAL, total passenger revenue for the quarter
decreased 8.7%  year-over- year as consolidated capacity declined
10.6% , consolidated yield increased 2.4%  and load factor
decreased 0.3 points.

Continental Airlines, which have been mentioned in possible merger
talks with other U.S. airlines in 2008, said weakening economic
conditions and highly volatile fuel prices presented financial
challenges for the airline in the fourth quarter 2008. Continental
recorded a fourth quarter net loss of $266 million.

Dave Barger, JetBlue's CEO, said that while he was appointed to
report a loss, he has been satisfied with JetBlue's performance in
2008.  "Against the backdrop of record fuel prices and
unprecedented economic challenges, we effectively managed our
capacity and strengthened our network.  We also made significant
progress in our efforts to further enhance the JetBlue experience
for our customers.  JetBlue's industry-leading unit revenue growth
throughout the year reflects the outstanding work of our
crewmembers.

"2008 was an especially tough and challenging year," said Bob
Fornaro, AirTran Airways' chairman, president and chief executive
officer. "We thank our dedicated, hard-working Crew Members and
our loyal customers for helping us overcome the many obstacles we
faced in 2008. Our Crew Members continue to strive to provide
exceptional customer service, and a high-quality product while
offering value to the traveling public. Despite the industry
challenge shifting from high oil costs to concerns regarding
consumer demand, our 2008 initiatives have us well positioned to
return to profitability in 2009."

                  Liquidity, Bankruptcy Concerns

Delta, UAL and AirTran said that they have strengthened their
liquidity that would allow them to face the challenges of 2009.

Michael Lowry, project manager for AVIATION WEEK's Top-
Performing Companies report, said in September 2008 that
USAirways, AMR, Northwest Airlines, AirTran and Continental would
have high bankruptcy risk in 2009.

The September report also said that USAir was a high risk to file
for bankruptcy again in 2008 -- it had entered and exited
bankruptcy protection twice -- but USAir has been able, so far, to
survive the crisis.  Only smaller airlines filed for bankruptcy in
2008.  These included Frontier Airlines, Skybus Airlines Inc.,
Aloha Airgroup Inc. and ATA Airlines Inc., who made its second
Chapter 11 filing.

Northwest Airlines has completed its merger with Delta Air to
form one of the world's largest airlines.  Delta noted that as of
Dec. 31, 2008, it had $6.1 billion in total liquidity and cash
collateral posted with hedge counterparties.  As of Dec. 31, 2007,
Delta had $3.3 billion in cash, cash equivalents and short-term
investments.

UAL said it completed several transactions during the fourth
quarter that helped strengthen its liquidity.  It raised
$215 million from aircraft financing transactions that closed
during the quarter along with $66 million in proceeds from asset
sales. The company also received net proceeds of $107 million
through equity issuances during the quarter.

AirTran noted that it ended the fourth quarter with $340.5 million
in unrestricted cash and investments, its highest year-end balance
since 2005.

                           2009 Outlook

Most of the airlines expect weak revenues in 2008, but expect
those revenues to be offset by lower fuel prices and savings from
cost cutting measures.  Some of the airlines have also disclosed
capacity cuts for 2009.

AMR has decided not to use MD-80s to backfill flying associated
with the seven 737s that no longer will be delivered in 2009.
Largely as a result of this decision, the company's 2009 mainline
capacity will decline by more than one percentage point compared
to previous guidance provided in October.

"Our fourth quarter and full-year 2008 results reflect the
difficulties all airlines faced last year, but we believe our
steps to reduce capacity, bolster liquidity, and improve revenue
helped us better manage the challenges of record fuel prices and a
weak economy," said AMR Chairman and CEO Gerard Arpey.

"While significant hurdles remain, I am guardedly optimistic we
can regain momentum in 2009," Mr. Arpey said.

"Despite the difficult economic environment, we expect to be
solidly profitable in 2009 driven by lower fuel costs, capacity
discipline, and merger synergies," said Richard Anderson, Delta's
chief executive officer.  "Delta people have a great track record
for achieving their goals, and I am confident that 2009 will be
another successful year."

"Delta's proactive decision to reduce domestic capacity during
2008 mitigated the impact of the decline in demand we saw over the
course of the fourth quarter. We expect the worldwide economy to
be difficult throughout 2009; however, if fuel prices remain at
current levels, we believe the benefit of lower fuel prices will
more than offset the revenue decline." said Edward Bastian,
Delta's president.  "Delta has the tools required to manage
through these tough economic times -- with the broadest, most
diverse network in the industry; an estimated $2 billion in annual
merger synergies to be obtained; best-in-class costs; a solid
liquidity balance; unmatched fleet flexibility; and the discipline
and drive of the new Delta team."

Delta projects that consolidated passenger revenue in 2009 will be
down 4% to $4.8 billion.  Fuel price will be $2.15 per gallon.
During the December 2008 quarter, Delta hedged 58% of its fuel
consumption, resulting in an average fuel price of $2.90 per
gallon -- included in the fuel price is $507 million in fuel hedge
losses in the fourth quarter.  In 2007, when Delta paid $2.21 a
gallon, it noted that its operating results were significantly
impacted by changes in the price and availability of aircraft
fuel. In 2007, its average fuel price per gallon rose 5% to $2.21,
as compared to an average price of $2.10 in 2006, which was 15%
higher than our average price of $1.79 in 2005.

UAL believes that for full year 2009 revenues will be down 8%
to 7%.  United said it is on track to complete the previously
announced removal of 100 aircraft from its fleet by the end of
2009.   United added it is taking additional steps in 2009 to
reduce overhead costs.  The company will further reduce the number
of salaried and management employees by approximately 1,000
positions by the end of 2009. This is in addition to the 1,500
positions the company announced in the second quarter, and when
completed, will bring the total reduction in its salaried and
management staff to approximately 2,500, or nearly 30% , since the
beginning of 2008.

"Last year was by any measure a challenging year -- defined by
unprecedented volatility and unpredictability, but for United it
was also characterized by steady and durable improvements," said
Glenn Tilton, United's chairman, president and CEO. "Our
management team made timely decisions that resulted in fundamental
improvements across our business, which will hold us in good stead
in 2009."

Alaska Air Group, which operates Alaska Air and Horizon Air, noted
that excluding special items, it had net income of $16.4 million
in the 4th quarter of 2008 compared to a $17.9 million net loss in
the same period in 2007.  "In a year of unprecedented volatility
that included soaring fuel prices and an economic meltdown, we
were pleased to eke out a small profit for 2008, excluding special
items, and be one of only a few major airlines to do so," said
Bill Ayer, Alaska Air Group's chairman and chief executive
officer.  "Our concerted efforts to control costs, improve our
operation and tailor our schedule to better match customer demand
have prepared us to face whatever hurdles the current year
brings."

According to Mr. Parker, USAir CEO, measures executed by the
airlines before aimed at offsetting high fuel prices in 2008 have
significantly softened the blow from the economic downturn that
the airline industry now faces.  "As we begin the new year, US
Airways is well prepared for a difficult global macroeconomic
environment.  We are running a great operation, have restructured
our business model through the introduction of new fees, reduced
capacity and increased our liquidity. With the help of falling
fuel prices, we believe we are well positioned for the challenges
ahead," concluded Parker.

Larry Kellner, Continental's chairman and chief executive officer,
said, "While there are continuing hard times ahead, thanks to our
team, we are well-positioned to maintain our place as an industry
leader."  Continental said it will inaugurate daily nonstop
service between New York and Shanghai in March 2009.

For the full year 2009, JetBlue expects to report an operating
margin between 12 and 14% .  Capacity, according to JetBlue, for
the full year 2009 is expected to decrease between zero and 2%
over 2008 and stage length is expected to decrease about 6% over
full year 2008.

             Full Year 2008 Net Profit for Southwest

The usually profitable Southwest Airlines also posted a fourth
quarter loss -- $56,000,000 net loss.  However, Southwest noted
that excluding special charges and other items, its fourth quarter
2008 net income was $61 million, bringing it to its 71st
consecutive quarter of profitability.

Gary C. Kelly, CEO of Southwest, stated: "We are very proud to
report another profitable year in one of the most difficult years
in aviation's 100-year-plus history.  We certainly had our
challenges in 2008, but thanks to the extraordinary efforts and
Warrior Spirit of our People, we persevered to report our 36th
consecutive year of profitability."

"We celebrated many operational successes throughout 2008 and
enhanced our already exceptional Brand and Customer Experience.
With one full year of our new boarding system and Business Select
product offering, the Customer response has been overwhelmingly
favorable. We've made significant advancements in our revenue
management and network optimization capabilities.  And, we've made
great progress on the technology side to lay the foundation for
improved Customer Service, a new southwest.com, a new Rapid
Rewards program, and international codeshare agreements with
WestJet to Canada and Volaris to Mexico.

"Despite the difficult credit markets, we were able to boost our
liquidity by $1.1 billion during fourth quarter 2008 through
several financing transactions to end the year with $1.8 billion
in unrestricted cash and short-term investments. After yearend, we
raised an additional $173 million in cash upon the closing of the
second tranche of our sale and leaseback transaction for an
additional five of our 737-700 aircraft.

"Due to the rapid collapse in energy prices during fourth quarter
2008, we substantially reduced our net fuel hedge position to
approximately ten percent of our estimated fuel gallons in each
year from 2009 through 2013.  Based on this current 2009 portfolio
and future market prices for energy (as of January 20, 2009), we
estimate our economic fuel costs per gallon, including fuel taxes,
to be approximately $1.80 and under $1.90, for first quarter and
full year 2009, respectively.  This current full year 2009
projection is more than $1 billion lower than we were projecting
last summer for 2009.

                       About AirTran Airways

AirTran Airways, a subsidiary of AirTran Holdings, Inc. (NYSE:
AAI), a Fortune 1000 company, is ranked number one in the 2008
Airline Quality Rating study. The airline offers coast-to-coast
flights, North America's newest all-Boeing fleet, friendly service
and Business Class and complimentary XM Satellite Radio on every
flight. To book a flight, visit http://www.airtran.com.

                           *     *     *

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

                      About Delta Air Lines

With its acquisition of Northwest Airlines, Atlanta, Georgia-based
Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or
http://www.nwa.com/-- is now the world's largest airline.  From
its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St.
Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its
Northwest subsidiary and Delta Connection carriers offer service
to more than 376 destinations worldwide in 66 countries and serves
more than 170 million passengers each year.  Delta's marketing
alliances allow customers to earn and redeem either SkyMiles or
WorldPerks on more than 16,000 daily flights offered by SkyTeam
and other partners.

The merger closed on October 29, 2008.

Prior to the merger, Delta was the world's second-largest airline
in terms of passengers carried and Northwest was the world's
fourth largest airline.

Northwest and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R.
Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at
Cadwalader, Wickersham & Taft LLP in Washington, represented the
Northwest Debtors in their restructuring efforts. The Official
Committee of Unsecured Creditors retained Scott L. Hazan, Esq., at
Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy
counsel.  When the Northwest Debtors filed for bankruptcy, they
listed $14.4 billion in total assets and
$17.9 billion in total debts.  On May 21, 2007, the Court
confirmed the Northwest Debtors' amended plan.  That amended plan
took effect May 31, 2007.  (Northwest Airlines Bankruptcy News
Issue No. 114; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).

Delta and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall
S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta
Debtors in their restructuring efforts.  Timothy R. Coleman at The
Blackstone Group L.P. provided the Delta Debtors with financial
advice.  Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provided the Official
Committee of Unsecured Creditors with legal advice. John McKenna,
Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman
at Mesirow Financial Consulting, LLC, served as the Committee's
financial advisors.  On April 25, 2007, the Court confirmed the
Delta Debtors' plan.  That plan became effective on April 30,
2007.  The Court entered a final decree closing 17 cases on Sept.
26, 2007.  (Delta Air Lines Bankruptcy News; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).

                     About United Airlines

United Airlines (NASDAQ: UAUA) operates more than 3,000* flights a
day on United and United Express to more than 200 U.S. domestic
and international destinations from its hubs in Los Angeles, San
Francisco, Denver, Chicago and Washington, D.C. With key global
air rights in the Asia-Pacific region, Europe and Latin America,
United is one of the largest international carriers based in the
United States. United also is a founding member of Star Alliance,
which provides connections for our customers to 912 destinations
in 159 countries worldwide. United's 49,500 employees reside in
every U.S. state and in many countries around the world. News
releases and other information about United can be found at the
company's Web site at united.com.

                            *    *    *

As reported in the Troubled Company Reporter on July 29, 2008,
Standard & Poor's Ratings Services lowered its ratings on UAL
Corp. and subsidiary United Air Lines Inc. (both rated B-
/Negative/--), including lowering the long-term corporate credit
ratings on both entities to 'B-' from 'B', and removed the ratings
from CreditWatch, where they had been placed with negative
implications May 22, 2008, as part of an industrywide review.  The
outlook is negative.

                         About US Airways

US Airways, along with US Airways Shuttle and US Airways Express,
operates more than 3,100 flights per day and serves 200
communities in the U.S., Canada, Europe, the Caribbean and Latin
America. The airline employs nearly 34,000 aviation professionals
worldwide and is a member of the Star Alliance network, which
offers our customers more than 16,500 daily flights to 912
destinations in 159 countries worldwide. Travel + Leisure Magazine
named US Airways as one of the top-three airlines for 2008 in on-
time performance for the year (based on Department of
Transportation data for Sept. 1, 2007 through Aug. 31, 2008). And
for the tenth consecutive year, the airline received a Diamond
Award for maintenance training excellence from the Federal
Aviation Administration (FAA) for its Charlotte, North Carolina
hub line maintenance facility. For more company information, visit
usairways.com. (LCCF)

                          About JetBlue

New York-based JetBlue Airways has created a new airline category
based on value, service and style. Known for its award-winning
service and free TV as much as its low fares, JetBlue is now
pleased to offer customers Lots of Legroom and super-spacious Even
More Legroom seats. JetBlue introduced complimentary in-flight e-
mail and instant messaging services on aircraft "BetaBlue," a
first among U.S. domestic airlines. JetBlue is also America's
first and only airline to offer its own Customer Bill of Rights,
with meaningful and specific compensation for customers
inconvenienced by service disruptions within JetBlue's control.
Visit www.jetblue.com/promise for details. JetBlue serves 52
cities with 600 daily flights. New service to San Jose, Costa
Rica, begins in 2009. With JetBlue, all seats are assigned, all
travel is ticketless, all fares are one-way, and an overnight stay
is never required. For information or reservations call 1-800-
JETBLUE (1-800-538-2583) or visit www.jetblue.com.

                    About Continental Airlines

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

                          *     *     *

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

Continental Airlines, Inc. reported a working capital deficit of
US$202 million, with current assets of US$4.713 billion and
current liabilities of US$4.915 billion.

At Dec. 31, 2007, the Company had a positive working capital of
US$112 million, with US$4.561 billion in current assets and
US$4.449 billion in current liabilities.

As of Sept. 30, 2008, the Company had US$2.9 billion in
unrestricted cash, cash equivalents and short-term investments,
which is US$83 million higher than at Dec. 31, 2007. At Sept. 30,
2008, the Company also had US$164 million of restricted cash, cash
equivalents and short-term investments, which is primarily
collateral for estimated future workers' compensation claims,
credit card processing contracts, letters of credit and
performance bonds. Restricted cash, cash equivalents and short-
term investments at Dec. 31, 2007, totaled US$179 million.
Additionally, the Company held student loan-related auction
rate securities reported as long-term investments at Sept. 30,
2008 with a par value of US$147 million and a fair value of
US$130 million.


VANGENT INC: Moody's Changes Outlook to Negative; Keeps B2 Rating
-----------------------------------------------------------------
Moody's Investors Service has changed the ratings outlook of
Vangent, Inc., to negative from stable and affirmed the company's
B2 corporate family and probability of default ratings, and the
speculative grade liquidity rating of SGL-3.

The change in outlook to negative reflects several factors: 1)
concern regarding Vangent's unprofitability; 2) weaker interest
coverage and free cash flow generation over the first 9 months of
2008; 3) dependence on key contracts- one of which expires in mid-
2009; 4) financial covenant ratio step downs over 2009-2010; 5)
the presence of larger, better capitalized competitors.

The affirmation of Vangent's B2 corporate family rating reflects
the company's historically high contract win rate, a good total
backlog level, an adequate liquidity profile, and the likelihood
that continued outsourcing of federal IT processing work,
particularly healthcare related, should provide steady demand for
Vangent's service offerings.

The affirmation of the SGL-3 speculative grade liquidity reflects
Vangent's $18 million of cash on hand and nearly full availability
under the $50 million, multi-year revolving credit line.  Although
internal cash flow generation over the first nine months of 2008
has been below $5 million, cash on hand and the committed revolver
availability should cover anticipated 2009 growth requirements.
As of September 2008, financial ratio covenant headroom cushion
was adequate; test step downs could tighten headroom cushion
should material earnings growth not be achieved.

The negative rating outlook reflects concerns that weak leverage,
coverage and cash flow generation metrics, which have proved to be
persistent, may persist in 2009 and pressure the ratings.  The
ratings outlook could stabilize if the company begins generating
sustained profits that convert into a steady mid-single digit free
cash flow to debt ratio level.

In addition, these ratings have been affirmed:

  -- $50 million senior secured revolver due 2012 Ba3, LGD 2 to
     23% from 25%

  -- $240 million senior secured term loan due 2013 Ba3, LGD 2 to
     23% from 25%

  -- $190 million 9 5/8% senior subordinated notes due 2015 Caa1,
     LGD 5, to 79% from 84%

Moody's last rating action on Vangent occurred January 30, 2007
when the B2 corporate family rating was assigned.

Vangent, Inc., with corporate headquarters in Arlington, Virginia,
is a provider of information management and business process
outsourcing services.  Revenues for the last twelve months ended
September 30, 2008, were $546 million.


VCSP LLC: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: VCSP LLC
        3400 Carillon Point
        Kirkland, WA 98033

Bankruptcy Case No.: 09-10625

Type of Business:

Chapter 11 Petition Date: January 28, 2009

Court: Western District of Washington (Seattle)

Judge: Philip H. Brandt

Debtor's Counsel: Gayle E. Bush, Esq.
                  Bush Strout & Kornfeld
                  601 Union St., Ste. 5000
                  Seattle, WA 98101
                  Tel: (206) 292-2110
                  gbush@bskd.com

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
   ------                      ---------------   ------------
LF Harris and Company, Inc.    trade debt        $414,488
6312 West Cheyenne Ave.
Las Vegas, NV 89108
Tel: (702) 876-4246

Terra Contracting, Inc.        trade debt        $344,666
5980 W. Cougar Ave.
Las Vegas, NV 89139
Tel: (702) 651-8100

Western Landscape              trade debt        $266,552
Construction
4670 S. Polaris Ave.
Las Vegas, NV 89103
Tel: (702) 739-6201

Select Build Nevada, Inc       trade debt        $142,574

Clark County Treasurer         trade debt        $76,537

Carpenter Sellers Associates   trade debt        $48,060

Rafael Framers                 trade debt        $40,165

Production Plumbing & A/C      trade debt        $33,651

HD Supply Waterworks Ltd.      trade debt        $33,500

Stantec Consulting Inc.        trade debt        $24,338

Play Space Designs Inc.        trade debt        $21,837

Johnson Electric Inc.          trade debt        $21,647

ThyssenKrupp Elevator          trade debt        $21,129

The Original Roofing Co.       trade debt        $20,056

The Masonry Group Nevada       trade debt        $19,717

The Painting Co. LLC           trade debt        $19,644

Alpine Steel                   trade debt        $17,506

Constructors Bonding Inc. of   trade debt        $16,329
NV

Riggio Brothers Construction   trade debt        $15,900

Diamond Patios, LLC            trade debt        $15,404

The petition was signed by Pau Bressan.


VITRO SAB: Not Certain on $45MM Interest Payment Due Feb. 1
-----------------------------------------------------------
Vitro, S.A.B. de C.V, told bondholders to prepare for
restructuring negotiations, Thomas Black of Bloomberg News
reports, citing Carlos Legaspy, president of Precise Investment
Management, an investment firm in San Diego, and James Harper, an
analyst with BCP Securities in New York.

According to Moody's Investors Service, Vitro has $45 million in
interest due Feb. 1 on two issues of notes.  Another $20 million
of maturities is scheduled for the first quarter.

Bloomberg relates that Blackstone Group LP, hired by Vitro in
November to help restructure its liabilities, held the call with
creditors on January 27, but declined to say on the call if Vitro
will make the interest payment by the Feb. 1 due date.

"They want the creditors to organize to start talks," President
Legaspy told Bloomberg in a telephone interview.

Bloomberg News notes Vitro's bonds due in 2012 and 2017, which
both have Feb. 1 interest payments, have sunk to below 25 cents on
the dollar as the company's profit has been eroded by slumping
demand for glass and losses from derivatives on natural gas
prices.

"Vitro representatives as well as legal and financial advisors
have been engaged in discussions with our bondholders and
counterparties over the last several weeks in order to enhance the
company's financial flexibility," Vitro said in an e-mailed
statement in response to Bloomberg questions.  "We continue to
work with our bondholders to reach a solution that is in our
mutual interest," the company said.

Bloomberg notes that within the last week, Moody's lowered the
corporate credit to Ca while the rating from Standard & Poor's is
an essentially equivalent CC. Both noted that Vitro's cash is less
than half its short term debt.

                           About Vitro

Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV:
VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases
Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global
glass producer, serving the construction and automotive glass
markets and glass containers needs of the food, beverage, wine,
liquor, cosmetics and pharmaceutical industries.

                           *    *    *

As reported by the Troubled Company Reporter-Latin America on
January 28, 2009, Moody's Investors Service downgraded Vitro,
S.A.B. de C.V.'s senior unsecured debt and corporate family
ratings to Ca from Caa1.  The ratings outlook is negative.

Fitch Ratings also downgraded these ratings for Vitro, S.A.B. de
C.V.:

  -- Long-term Issuer Default Rating to 'CC' from 'B-';

  -- Long-term local currency IDR to 'CC' from 'B-';

  -- US$300 million senior notes due 2012 to 'CC/RR4' from 'B-
     /RR4';

  -- US$225 million senior notes due 2013 to 'CC/RR4' from 'B-
     /RR4';

  -- US$700 million senior notes due 2017 to 'CC/RR4' from 'B-
     /RR4'.


WESTAFF INC: Auber Investments Et Al. Disclose 8.98% Equity Stake
-----------------------------------------------------------------
Auber Investments Ltd., Prince Resources LDC, Prince Capital
Partners LLC and David Mayer disclosed that each may be deemed to
beneficially own 1,500,000 shares of Westaff, Inc.'s common stock
or 8.98% of the total shares outstanding.

Auber Investments Ltd. is indirectly wholly owned by Prince
Resources LDC.  Prince Capital Partners LLC is the investment
manager with respect to the shares.  Mr. Mayer is a managing
member of Prince Capital Partners LLC, the investment manager with
respect to the shares held by Auber Investments Ltd.

Based in Walnut Creek, California, Westaff Inc. (Nasdaq: WSTF)
-- http://www.westaff.com/-- provides staffing services and
employment opportunities for businesses in global markets.
Westaff annually employs in excess of 125,000 people and services
more than 20,000 client accounts from more than 177 offices
located throughout the United States, Australia and New Zealand.

                         *     *     *

The company has incurred operating losses and negative operating
cash flow since the second quarter of fiscal 2007, offset by
slight operating income in the fourth quarter of fiscal 2007.  The
company says it expects to incur additional losses in the
future, particularly because of current soft economic conditions.

In addition, the company is currently in default under the primary
credit facility that it uses to finance its operations.   If the
company is unable to obtain a waiver or continued forbearance from
the U.S. Bank National Association on acceptable terms, the
company may be unable to access the funds necessary for its
liquidity requirements or may be unable to obtain letters of
credit under the facility needed for the company to obtain
workers' compensation insurance.  In that case, its business and
operating results would be adversely affected.

The Troubled Company Reporter reported on Dec. 22, 2008, that
Westaff (USA), Inc., a subsidiary of Westaff, Inc., entered into a
Second Amendment to Second Amended and Restated Forbearance
Agreement, with the company, as parent guarantor, certain lenders
party thereto and U.S. Bank National Association, as agent for the
Lenders.  The parties to the Second Amendment to Second Amended
and Restated Forbearance Agreement are parties to a Financing
Agreement, dated as of Feb. 14, 2008.  Pursuant to the terms of
the Second Amendment to Second Amended and Restated Forbearance
Agreement, the Agent and the Lenders have agreed to continue to
forbear from exercising any of their default rights and remedies
through Dec. 19, 2008, with regard to the Existing Events of
Default so long as no additional Events of Default occur through
Dec. 19, 2008.


WESTAFF INC: Negotiating With Koosharem on Acquisition Proposal
---------------------------------------------------------------
On December 29, 2008, Westaff, Inc., received a proposal from
Koosharem Corporation under which Select Staffing would acquire
all of the outstanding shares of Westaff common stock not owned by
DelStaff, LLC for $1.25 per share in cash and all of the shares
owned by DelStaff, LLC -- which shares represent approximately
49.3% of the outstanding shares of Westaff common stock -- for
first lien debt issued by Select Staffing having a value roughly
equivalent to $1.25 per share.

On January 15, 2009, Westaff, Inc., agreed to extend through
January 26, 2009, the exclusive period of negotiation with
Koosharem Corporation in connection with Select Staffing's
previously announced proposal to acquire all of the outstanding
shares of Westaff common stock not owned by DelStaff, LLC for
$1.25 per share in cash and all of the shares owned by DelStaff,
LLC, for first lien debt to be issued by Select Staffing.

                          $500,000 Loan

On January 9, 2009, Westaff, Inc., Westaff (USA), Inc., which is a
wholly owned subsidiary of the company, Westaff Support, Inc. and
MediaWorld International, which are wholly-owned subsidiaries of
Westaff (USA), were advanced a loan in an aggregate principal
amount of $500,000 from DelStaff, LLC under the previously-
announced loan agreement, dated as of August 25, 2008, among
DelStaff, LLC, and the Borrowers.

Stephen J. Russo was named President of Westaff and its
subsidiaries, in addition to his position as Chief Operating
Officer, effective January 1, 2009.  Michael T. Willis will remain
as Chief Executive Officer and Chairman of the Board.

                          About Westaff

Based in Walnut Creek, California, Westaff Inc. (Nasdaq: WSTF)
-- http://www.westaff.com/-- provides staffing services and
employment opportunities for businesses in global markets.
Westaff annually employs in excess of 125,000 people and services
more than 20,000 client accounts from more than 177 offices
located throughout the United States, Australia and New Zealand.

                         *     *     *

The company has incurred operating losses and negative operating
cash flow since the second quarter of fiscal 2007, offset by
slight operating income in the fourth quarter of fiscal 2007.  The
company says it expects to incur additional losses in the
future, particularly because of current soft economic conditions.

In addition, the company is currently in default under the primary
credit facility that it uses to finance its operations.   If the
company is unable to obtain a waiver or continued forbearance from
the U.S. Bank National Association on acceptable terms, the
company may be unable to access the funds necessary for its
liquidity requirements or may be unable to obtain letters of
credit under the facility needed for the company to obtain
workers' compensation insurance.  In that case, its business and
operating results would be adversely affected.

The Troubled Company Reporter reported on Dec. 22, 2008, that
Westaff (USA), Inc., a subsidiary of Westaff, Inc., entered into a
Second Amendment to Second Amended and Restated Forbearance
Agreement, with the company, as parent guarantor, certain lenders
party thereto and U.S. Bank National Association, as agent for the
Lenders.  The parties to the Second Amendment to Second Amended
and Restated Forbearance Agreement are parties to a Financing
Agreement, dated as of Feb. 14, 2008.  Pursuant to the terms of
the Second Amendment to Second Amended and Restated Forbearance
Agreement, the Agent and the Lenders have agreed to continue to
forbear from exercising any of their default rights and remedies
through Dec. 19, 2008, with regard to the Existing Events of
Default so long as no additional Events of Default occur through
Dec. 19, 2008.


WHOLE FOODS: FTC Halts AntiTrust Suit to 2007 Wild Oats Buy
-----------------------------------------------------------
Brent Kendall at The Wall Street Journal reports that the Federal
Trade Commission has temporarily halted its antitrust challenge to
Whole Foods Market Inc.'s $565 million acquisition of Wild Oats
Markets Inc. in 2007.

Citing FTC chief competition enforcer David Wales, WSJ relates
that Whole Foods has sent the commission a settlement proposal.
"We're going to roll up our sleeves and take a look at what
they're offering.  We're hopeful that a settlement can be
reached," the report quoted him as saying.

Whole Foods, WSJ relates, said on Thursday that it welcomes the
opportunity to hold "constructive discussions" with the FTC.

According to WSJ, the FTC has claimed that the Whole Foods-Wild
Oats merger will lessen competition in the market for natural and
organic foods.  The merger is pro-consumer and good for
competition, the report says, citing Whole Foods.  The report
states that the Whole Foods-Wild Oats merger has been completed,
but the FTC is seeking to undo the deal.

As reported by the Troubled Company Reporter on Aug. 1, 2008, the
United States Court of Appeals for the District of Columbia
Circuit held that Whole Foods' $565 million purchase of Wild Oats
must be re-examined to determine whether it violated antitrust
rules and would hurt consumers.

The appeals court rejected last week Whole Foods' counter-suit
against the FTC that sought to block a coming administrative trial
on its merger's legality.

                    About Whole Foods Market

Founded in 1980 in Austin, Texas, Whole Foods Market Inc. (NASDAQ:
WFMI) -- http://www.wholefoodsmarket.com/-- is a natural and
organic foods supermarket.  Whole Foods Market employs more than
50,000 Team Members.

                          *     *     *

As reported by the Troubled Company Reporter on Nov. 12, 2008,
Moody's Investors Service lowered Whole Foods Market, Inc.'s
ratings following the company's announcement of lower reported
earnings for most recent quarter.  Whole Foods' Corporate family
rating, Probability of default, and senior secured bank loan
ratings were lowered to Ba3 from Ba2.  The ratings remain on
review for further possible downgrade.

According to the TCR on Nov. 11, 2008, Standard & Poor's Ratings
Services lowered the corporate credit rating to 'BB-' from 'BB' on
Austin, Texas based-Whole Foods Markets Inc.  S&P said that the
outlook is stable.


WIRELESS AGE: Challenge of Subsidiary Receivership Dismissed
------------------------------------------------------------
The Court of Queen's Bench for Saskatchewan, Canada, dismissed the
challenge by Wireless Age Communications, Inc., of the Interim
Receivership Order obtained by Saskatchewan Telecommunications.

Early this month, SaskTel served Wireless Age subsidiaries
Wireless Age Communications Ltd. and Wireless Source Distribution
Ltd. with a Notice of Intention to Enforce Security under the
Bankruptcy and Insolvency Act, and also obtained a Court Order to
immediately appoint an interim receiver.  Wireless Age challenged
the Court Order in a hearing on January 22, 2009.

On January 27, 2009, the judge presiding over the matter dismissed
Wireless Age's challenge.  The result is that the assets of
Wireless Ltd. and Wireless Source remain under the control of the
receiver.

John Simmonds, Chairman and CEO of Wireless Age Communications,
Inc., will be hosting an investor conference all on February 3,
2009, at 4:15 p.m. EST.

   Conference Call Access:
   Local participant: (416) 644-3418
   Toll free participant: (800) 731-5774
   Replay Access (available for one week): (416) 640-1917 or
                                           (877) 289-8525
   Pass Code: 21296787#

                      About Wireless Age

Based in Toronto, Ontario, Wireless Age Communications, through
its 99.7% owned subsidiary, Wireless Age Communications Ltd., is
in the business of operating retail cellular and
telecommunications outlets in cities in western Canada.  Through
its other wholly owned subsidiary, Wireless Source Distribution
Ltd., the company distributes two-way radio products, prepaid
phone cards, wireless accessories and various battery and
ancillary electronics products in Canada.


YELLOWSTONE MOUNTAIN: Pre-Bankruptcy Lenders Want Sale of Assets
----------------------------------------------------------------
The pre-petition lenders of Yellowstone Mountain Club LLC, ask the
U.S. Bankruptcy Court for the District of Montana to direct the
Debtor to promptly commence a marketing and sale process for its
assets.

According to Bloomberg's Bill Rochelle, the lenders allege that
private-equity investor CrossHarbor Capital Partners LLC, using
its power as the postbankruptcy lender, is precluding the
initiation of a marketing and sale process by threatening to
default the financing.  Bloomberg relates that CrossHarbor's loan
has deadlines requiring a confirmed plan by March 31 where it will
buy the project or, alternatively, a sale by April 30.

Bloomberg adds that a court filing by the Rancho Mirage says
Yellowstone's 13,600-acre  property was appraised in June for $778
million, not including the value of unsold club memberships.

Yellowstone Mountain Club previously sought permission to increase
the debtor-in-possession financing funded by CrossHarbor Capital
Partners LLC from $19.75 million to $22.6 million.  The
CrossHarbor loan, according to the report, requires having a
confirmed plan of reorganization by March 31 or the immediate
commencement of a process for selling the project.

                    About Yellowstone Club

Yellowstone Club -- http://www.theyellowstoneclub.com/-- is a
private golf and ski community with more than 350 members,
including Bill Gates and Dan Quayle.  It is located near Big Sky,
Montana.  It was founded in 1999.

As reported in the Troubled Company Reporter on Nov. 13, 2008,
Yellowstone Club filed for Chapter 11 bankruptcy protection in the
U.S. Bankruptcy Court for the District of Montana.  In its
bankruptcy petition, it listed debts of more than $360 million.


* SEC Charges ProTrust With TARP Purported Investments Fraud
------------------------------------------------------------
The U.S. Securities and Exchange Commission has taken emergency
action to charge Nashville, Tenn.-based investment advisor Gordon
B. Grigg and his firm ProTrust Management, Inc., with securities
fraud, and obtained a court order freezing their assets.  The SEC
alleges that Mr. Grigg and ProTrust defrauded clients out of at
least $6.5 million and misrepresented that their money was
invested in the federal government's Troubled Asset Relief Program
(TARP) and other securities that, in reality, do not exist.

According to the SEC's complaint, Mr. Grigg is a self-purported
financial planner and investment advisor, but neither he nor his
firm is registered with the SEC or a state regulator.  The SEC
alleges that Mr. Grigg obtained control over funds of at least 27
clients since 2007 and falsely claimed to have invested their
money in securities described as "Private Placements."  Mr. Grigg
created fraudulent account statements reflecting his clients'
ownership of these non-existent securities.  The SEC further
alleges that Mr. Grigg began falsely claiming in December that
ProTrust had the ability to invest client funds in government-
guaranteed commercial paper and bank debt as part of the TARP
program.  Mr. Grigg also falsely claimed to have partnerships and
other business relationships with several of the nation's top
investment firms.

"As alleged in our complaint, Grigg and ProTrust preyed upon
investors' desire for safety by claiming associations with
reputable investment firms and the government's TARP program,"
said Katherine Addleman, Regional Director of the SEC's Atlanta
Regional Office.  "Investors should carefully check any purported
affiliations.  In this case, not only were such claims false, but
there is in fact no program in which investors can buy debt
guaranteed by the TARP program."

According to the SEC's complaint, filed in the U.S. District Court
for the Middle District of Tennessee, Nashville Division, the
defendants have violated the antifraud provisions of the federal
securities laws, Section 17(a) of the Securities Act of 1933,
Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-
5 thereunder, and Sections 206(1) and 206(2) of the Investment
Advisers Act of 1940.  As relief, the SEC's complaint seeks:

     (i) a temporary restraining order, preliminary and permanent
         injunctions;

    (ii) an asset freeze;

   (iii) an accounting of all funds raised;

    (iv) an order expediting discovery and preventing the
         destruction of documents;

     (v) disgorgement of ill-gotten gains plus prejudgment
         interest thereon; and

    (vi) the imposition of financial penalties.

After the SEC's complaint was filed, Grigg and ProTrust consented
to the emergency relief sought by the SEC, and the Honorable Judge
William J. Haynes, Jr., U.S. District Judge for the Middle
District of Tennessee, Nashville Division, issued a temporary
restraining order to prevent the defendants from further
violations and freezing their assets.

The Commission acknowledges the assistance of the Special
Inspector General of the TARP program and looks forward to
continued coordination in this and other matters.


* S&P Updates Its Ratings Criteria On Exchange Offers
-----------------------------------------------------
Standard & Poor's Ratings Services published an update to its
criteria concerning the ratings impact of distressed exchanges and
other restructurings.

The article says that entities in distress often restructure their
obligations, offering less than the original promise.  The
alternative of a general default, in which the investor or
counterparty stands to fare even worse, motivates (at least
partially) their acceptance of such an offer.  S&P treat such
offers analytically as equivalent to a default on the part of the
issuer.  Therefore, upon completion of an exchange that S&P view
as distressed, Standard & Poor's rates the affected issues 'D',
and the issuer credit rating is usually reduced to 'SD' (selective
default), assuming the issuer continues to honor its other
obligations.  This is the case even though the investors,
technically, may accept the offer voluntarily and no legal default
occurs.

S&P's approach to such transactions pertains equally to the
restructuring of any financial obligation of the entity -- debt
security, loan, or derivatives contract.  The restructuring may
take the form of an exchange offer or renegotiation.

The article updates and supersedes.  The methodology explained in
this report is substantially similar; however, S&P has widened the
scope to include:

  -- Methodology for considering whether the renegotiation of a
     derivative contract is equivalent to a distressed exchange
     and, therefore, tantamount to default for the issuer rating
     and, if the derivative is a rated obligation, a default for
     the issue-level rating;

  -- Specific discussion on how S&P applies the methodology to
     equity hybrid instruments, such as preferred stock;

  -- Specific discussion on how S&P apply the methodology to
     structured finance transactions; and

  -- Additional discussion on when S&P considers an exchange or
     tender offer as "distressed," including reference to the
     current rating of the issuer and/or instrument.

S&P expects a limited number of rating downgrades following the
release of this criteria update as a result of S&P's now more
explicit explanation that a distressed renegotiation of a
derivative contract will be considered a default at the issuer
rating level.


* Auto Dealers Fear Industry Might Collapse
-------------------------------------------
Richard Gibson at The Wall Street Journal reports that auto
dealers are bracing for the biggest shakeout in U.S. franchising
history, with thousands of dealer-franchisees at risk of losing
their businesses in the coming months.

According to WSJ, franchisees are hurt by dropping sales and
uncertainty over the future of auto makers General Motors Corp.,
Ford Motor Co., and Chrysler LLC, and their many brands.  Citing
auditing firm Thornton LLP, WSJ states that about 3,800 of the
20,000 dealerships in the U.S. would need to close to maintain
sales per dealer at the 2008 level.  The report says that GM
expects to cut at least 1,700, or about a fourth, of its dealers
by 2012 as part of its planned restructuring.

WSJ relates that the dealers' attorneys are urging customers to
review their franchise contracts to better understand what options
they might have in case their franchiser-manufacturer decide to
cut a brand, merge with another firm, or go out of business.

WSJ says that big dealership chains have been writing off the
value of their Detroit-brand franchises.  According to the report,
Jim Moors -- National Automobile Dealers Association's franchising
and state laws director -- said that his trade organization is
"working very hard to keep dealers in existence.  They didn't
create the financial situation hampering these companies."


* Gov't Tries to Rescue Financial Institutions & Homebuyers
-----------------------------------------------------------
Mark Maremont at The Wall Street Journal reports that federal
regulators, to prevent financial upheaval at America's credit
unions, have guaranteed tens of billions of dollars in uninsured
deposits at the powerful financial institutions that service them.

According to WSJ, this government effort isn't aimed at "retail"
credit unions, but rather at wholesale or "corporate" credit
unions that provide financing, check-clearing, and other vital
tasks for the retail institutions.

WSJ quoted regulator National Credit Union Administration
chairperson Michael E. Fryzel as saying, "We are trying to
institute confidence in the system, and we think this will do so."

Regulators, according to WSJ, injected about $1 billion of new
capital into U.S. Central Federal Credit Union of Lenexa -- the
largest wholesale credit union -- after that company's unexpected
2008 loss of $1.1 billion.

National Credit will employ investment-management company Pimco to
evaluate the investment portfolios of the wholesale credit unions,
WSJ states, citing Mr. Fryzel.  The report says that the regulator
wants to measure the depth of the industry's losses on mortgage-
backed securities and other investments.

WSJ relates that National Credit, to further boost confidence,
issued a blanket guaranty of uninsured deposits in the corporate
network.  Citing Mr. Fryzel, WSJ says that some retail credit
unions had been withdrawing funds from the corporate system.  Mr.
Fryzel said that the guaranty would keep that trend from
accelerating in light of U.S. Central's losses, according to the
report.

The initial guaranty would last through February 2009, WSJ states,
citing National Credit.  WSJ relates that each corporate credit
union would then be included on a voluntary basis for a new
guaranty program that would last to Dec. 31, 2010.

          Gov't to Create Bad Bank for Toxic Assets

Michael R. Crittenden at WSJ reports that the Obama administration
will create a "bad bank" to buy up toxic assets.  The report
quoted House Financial Services Chairperson Barney Frank as
saying, "It has to be done quickly.  There are a variety of ideas,
and this is something they should focus on."

The government could create an entity to buy the assets from
financial institutions, while raising money by selling government-
backed securities, WSJ relates.

According to WSJ, Treasury Secretary Timothy Geithner, said that
he hopes to disclose a comprehensive plan to stabilize the
financial sector "relatively soon."  Mr. Geithner sought to
reassure the financial markets about the possible nationalization
of certain U.S. ba