TCR_Public/090204.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

             Wednesday, February 4, 2009, Vol. 13, No. 34

                            Headlines


AMERICAN ELECTRIC: Moody's Reviews 'Ba1' Preferred Stock Rating
AMERICAN FIBERS: Wants Plan Filing Period Extended to April 21
AMERICAN FIBERS: Court Approves Private Sale of 25.1-Acre Lot
AMERICAN FIBERS: Court Extends Time to Remove Actions to March 23
AMERICAN FIBERS: Court Okays Sale of Various Assets to Maynards

ASYST TECHNOLOGIES: Sees Need to Obtain Loan Covenant Waivers
BERNARD L. MADOFF: Court to Hear Pacts on $535-Mil. Transfer Today
BERRY PETROLEUM: Moody's Reviews Low-B Ratings for Possible Cuts
BIOJECT MEDICAL: Enters Into Letter Agreements With 3 Officers
BLOUNT INTERNATIONAL: Closes Tennessee Production Facility

BON-TON STORES: To Implement Cost Saving Plan
BROADSTRIPE LLC: Court Sets March 23 as Claims Bar Date
BUFFETS HOLDINGS: Plan Hearing Suspended Due to Financing Delays
BUFFETS HOLDINGS: Seeks April 30 Solicitation Period Extension
BUFFETS HOLDINGS: Seeks April 24 Extension of Removal Period

BUFFETS HOLDINGS: Amends Letters of Credit Deal with U.S. Bank
CANAL CAPITAL: Reports $100,000 Net Loss of Year Ended Oct. 31
CAPITAL AUTOMOTIVE: Moody's Give Negative Outlook; Keeps Ratings
CELL THERAPEUTICS: Provides December Report to Italy's CONSOB
CELL THERAPEUTICS: Receives Additional Nasdaq Notification

CFM US: Plan Filing Deadline Pushed Back to February 6
CHRYSLER LLC: Sales Down 55% to 62,157 Units in January 2009
CITIGROUP INC: Releases 1st TARP Use Quarterly Progress Report
CITIGROUP INC: Mulls Backing Out of New York Mets Marketing Deal
CLEARWATER NATURAL: Section 341(a) Meeting Set for February 9

CLEARWATER NATURAL: Wants Asset Sale Bidding Procedures Approved
CMR MORTGAGE: Downsizes, Removes Manager's CEO and CFO Positions
CMS ENERGY: Fitch Affirms 'BB+' Long-Term Issuer Default Rating
CONCORD CAMERA: Zeff Capital Discloses 4.4% Equity Stake
CONEXANT SYSTEMS: Reports Results for 1st Quarter of Fiscal 2009

CONSTAR INTERNATIONAL: Court Sets March 30 as Claims Bard Date
CONSTAR INT'L: U.S. Trustee Forms 5-Member Creditors Panel
CONSTAR INT'L: Gets DS OK, Moves to Plan Confirmation Process
COOPER TIRE: Moody's Downgrades Corporate Family Rating to 'B3'
CPI CORP: NYSE Accepts Continued Listing Plan

CRESCENT RESOURCES: Bank Loan Sells at 84% Off; Continues Slide
CV THERAPEUTICS: Pictet Funds Reduces Equity Stake to 4.58%
DANA CORP: Bank Loan Sells at Substantial Discount
DOCUMENT SECURITY: Retains Stock Listing at NYSE Alternext
DUN & BRADSTREEET: Reports 2008 Results & 2009 Financial Guidance

EDGE PETROLEUM: Warns of Chapter 11 Filing; Taps Akin Gump
EDGE PETROLEUM: Taps Ex-Tronox Exec. As CFO; COO Pay Hiked
ENNIS HOMES: Files for Chapter 11 Bankruptcy Protection
EQUITY MEDIA: Section 341(a) Meeting Scheduled for February 20
EQUITY MEDIA: Secures $58 Million Credit Line From Silver Point

ESPRE SOLUTIONS: Files for Bankruptcy Protection; Texas CFM Sues
EXACT SCIENCES: Signs Strategic Transaction With Genzyme
EXACT SCIENCES: Sequenom Terminates Exchange Offer
FORD MOTOR: Credit Unit Posts $1.5 Billion Net Loss in 2008
FORD MOTOR: Secures Maximum $10.1 Billion Under Credit Line

FORD MOTOR: January Sales Decrease 39% to 90,596 Units
FORD MOTOR: May Need Financial Assistance From U.S. Gov't.
FORTUNOFF FINE JEWELRY: May Seek 2nd Bankruptcy & Liquidate
FREMONT GENERAL: Court Moves Plan Filing Deadline to Feb. 20
FRONTIER AIRLINES: Court Junks Teamsters' Bid to Impose Stay

FRONTIER AIRLINES: Orange County Disputes Cure Amount on Lease
FRONTIER AIRLINES: Asks Court to Approve LiveTV Service Deals
GENERAL MOTORS: Percy Barnevik Leaves Firm's Board of Directors
GENERAL MOTORS: Settlement Reached in "Soders v. GM" Class Suit
GENERAL MOTORS: Vehicle Deliveries Drop 49% to 129,227 in January

GLOBAL GENERAL: Court Grants Recognition of Foreign Proceedings
GMAC LLC: Reports $7.5 Billion Net Income in Fourth Quarter 2008
GPS INDUSTRIES: Board Appoints Benjamin Porter as President & COO
GRAHAM PACKAGING: Amends Transaction With Hicks & Blackstone
GWENCO INC: Kentucky Court Approves Disclosure Statement

HAWAIIAN TELCOM: HoldCo Files Schedules and Statements
HAWAIIAN TELCOM: Services Unit Files Schedules and Statement
HAWAIIAN TELCOM: 4 Affiliates File Schedules and Statements
HAWAIIAN TELCOM: Gets Go-Signal to Hire Zolfo's Nystrom as COO
HC INNOVATIONS: Dr. David Chess Resigns as Chairman & CEO

INNOVATIVE COMMUNICATION: Nat'l Rural Wants to Acquire Firm
INTERLAKE MATERIAL: Creditors' Panel Balks at Terms of DIP Loan
INTERSTATE BAKERIES: Emerges from Chapter 11; Has Union Support
ISCO INTL: Receives Notice of Intention to Delist from NYSE
JETBLUE AIRWAYS: Pilots Lack Votes to Meet Union Requirement

JETBLUE AIRWAYS: Reports $49-Mil. Pre-Tax Loss for 4th Quarter
LEHMAN BROTHERS: Unit Sues to Block $137MM Transfer to Ballyrock
LEHMAN BROTHERS: Slashes Unsecured Debt to $200-Bil., CEO Says
LEHMAN BROTHERS: Can't File Annual Report By Feb. 19 Deadline
LEHMAN BROTHERS: First BanCorp Has $1.4 Mil. Unsecured Exposure

LEHMAN BROTHERS: Seeks to Grant 1st Priority Liens to Brokers
LEHMAN BROTHERS: Seeks to Sell LBT Varlik to Vector
LEHMAN BROTHERS: Court Approves Trade Confirmation Decisions
MACY'S INC: Moody's Reviews 'Ba1' Subordinated Shelf Rating
MAGNA ENTERTAINMENT: Charlie Williams Resigns as Director

MASONITE INTL: Obtains Feb. 13 Extension of Forbearance Pact
MEDCOM USA: Appoints Michael Delagarza as Board Member
MERITAGE HOMES: Reports 4th Quarter and Full Year Results
MICRO COMPONENT: Implements 20% Salary Cut to Worldwide Employees
MORIN BRICK: Ct Denies Extension of Exclusive Period to File Plan

MXENERGY HOLDINGS: Ends Cash Tender Offer for 2011 Sr. Notes
NETVERSANT SOLUTIONS: Client Bankruptcies Cost Anixter $24 Mil.
NEWCASTLE INVESTMENT: Provides More Info on NYSE Delisting Issue
NORTEL NETWORKS: Anixter Has $24MM Loss on Customer Bankruptcies
NORTEL NETWORKS: Specifies Customer Arrangements to Be Honored

NORTHEAST BIOFUELS: Section 341(a) Meeting Set for February 20
NOVA CHEMICALS: Fitch Downgrades Issuer Default Rating to 'B-'
NOVADEL PHARMA: To Maintain Salaries & Withhold Annual Bonuses
PARALLEL PETROLEUM: Moody's Downgrades Note Ratings to 'Caa2'
PILGRIM'S PRIDE: To Reorganize and Emerge By Fall, CRO Says

PILGRIM'S PRIDE: U.S. Trustee Balks at Bid to Hire Ex-Officers
PILGRIM'S PRIDE: Parties Object to Bid to Reject 102 Contracts
PILGRIM'S PRIDE: Dispute Arises on Panel's Bid to Hire Moelis
PUGET ENERGY: Moody's Cuts Issuer Rating to 'Ba2' from 'Ba1'
QIMONDA AG: May Shut Down Business if No Investor Found

REFCO INC: Court Extends Claims Objection Deadline to June 5
REFCO INC: RCM Trustee Pays $31MM for Securities Customer Claims
REFCO INC: Protocol Set on Use of Classified Docs in Class Action
RETAIL PRO: To Seek Approval of Sale of All Assets on March 11
RIVIERA HOLDINGS: FXRE, Et. Al., Disclose 9.14% Equity Stake

RIVIERA HOLDINGS: Wayzata Investment Discloses 8% Equity Stake
ROCKETT BURKHEAD: Files for Chapter 11 Bankruptcy Protection
SAN JOAQUIN: Fitch Affirms 'BB' Underlying Rating on 1997A Bonds
SBARRO INC: Is Mum on $7.8 Million Interest Payment Due Feb. 1
SELECT MEDICAL: Moody's Gives Negative Outlook; Affirms Ratings

SPECTRUM BRANDS: Files for Chapter 11 Bankruptcy in Texas
SPECTRUM BRANDS: Files Projections, Targets Ch. 11 Exit by June 30
SPECTRUM BRANDS: Case Summary & 26 Largest Unsecured Creditors
SPORT CHALET: BofA Extends Forbearance Period Until March 2
STARWOOD HOTELS: Moody's Reviews 'Ba1' Rating for Likely Cut

STATION CASINOS: Debt From Colony Buyout May Cue Default
STATION CASINOS: Mulls Bankruptcy Filing with Pre-packaged Plan
SUN COUNTRY AIRLINES: Reports 1st Profitable Q4 in 5 Years
TALLYGENICOM LP: DIP Loan Has Loan and Sale Deadlines
THEATER XTREME: Uni Cap CEO Explains Side on Bankruptcy

TROPICANA ENTERTAINMENT: Opco Bank Debt Sells at 72% Discount
TOUSA INC: Court Amends 2nd Final Cash Collateral Order
TOUSA INC: Sues Five Homeowners For Return of Property
TOUSA INC: Begins Review of $7.2 Billion in Filed Claims
TVI CORP: BB&T Extends Forbearance Agreement to April 30

U.S. ENERGY: To Sell USEB's Asset to Silver Point for $94.5 Mil.
U.S. ENERGY: Gets More Time To File Schedules and Statements
VITRO SAB: Grace Period to Make $44.8MM Payments Ends March 4
VOLUME SERVICES: Moody's Confirms Caa1 Rating on Kohlberg Merger
WASHINGTON MUTUAL: Court Sets March 31 Bar Date for All Claims

WII COMPONENTS: Eroding Earnings Prompt Moody's Junk Rating
WORLDSPACE INC: AfriSpace Inc. Files Amended Schedules
WORLDSPACE INC: Committee May Retain Arent Fox as Counsel
WORLDSPACE INC: Panel May Hire Elliott Greanleaf as Local Counsel
WORLDSPACE INC: Panel May Hire ESBA as Financial Advisors

WORLDSPACE INC: Files Amended Schedules of Assets and Liabilities
WORLDSPACE INC: May Employ Baker & McKenzie as Special Counsel
WORLDSPACE INC: WorldSpace Systems Files Amended Schedules

* Christopher Jarvinen Joins Hahn & Hessen as Bankruptcy Partner

* Treasury to Disclose Financial Rescue Plans Next Week
* U.S. Economy Shrank at 3.8% Rate in 2008 Fourth Quarter
* New Homes Sales Lowest on Record in December

* Upcoming Meetings, Conferences and Seminars


                            *********


AMERICAN ELECTRIC: Moody's Reviews 'Ba1' Preferred Stock Rating
---------------------------------------------------------------
Moody's Investors Service placed the ratings of American Electric
Power Company's two Texas-based transmission and distribution
utilities, AEP Texas Central (Baa2 senior unsecured) and AEP Texas
North (Baa1 senior unsecured) on review for possible downgrade.

The review for possible downgrade primarily reflects the
expectation that the prospective financial profile and key cash
flow related credit metrics for each utility may not be sufficient
to justify their existing rating category.

"T&D utilities tend to have a lower overall business and risk
profile than the vertically integrated electric utilities, so
Moody's generally incorporate a view that they can withstand lower
financial credit metrics for a given rating category" said Jim
Hempstead, Senior Vice President.  "Because AEP's T&D utilities
are viewed to be functionally operated as a system, the likelihood
of ratings convergence is high" said Hempstead.

The review for possible downgrade will primarily focus on TCC and
TNC's financial projections, authorized recovery mechanisms and
financing plans.  In addition, the review for TCC will focus on
the effects that approximately $2.0 billion of Aaa-rated
securitization bonds has on both the reported and adjusted
financials.  The conclusion of the review for possible downgrade
will also be influenced, in part, on the relative comparisons to
numerous T&D peer utilities.

Moody's anticipates that TCC's ratio of CFO pre-w/c to debt will
not improve to the low teen's range for several more years and
that TNC's CFO pre-w/c to debt metrics, which have historically
been relatively strong, will decline towards the mid-teen range
for a sustained period of time.  Moody's financial credit metrics
include standard GAAP adjustments, and include debt associated
with TCC's securitization bonds which represent the majority of
debt but will not be affected by the review for possible
downgrade.

Moody's last rating action for AEP Texas Central occurred on
January 30, 2008, when the rating outlook was changed to negative
from stable.  Moody's last rating action for AEP Texas North
occurred on January 30, 2008, when the ratings and stable outlook
were affirmed.

AEP Texas Central and AEP Texas North are wholly-owned
subsidiaries of American Electric Power Company.  American
Electric Power Company is headquartered in Columbus, Ohio.

On Review for Possible Downgrade:

Issuer: AEP Texas Central Company

  -- Issuer Rating, Placed on Review for Possible Downgrade,
     currently Baa2

  -- Preferred Stock Preferred Stock, Placed on Review for
     Possible Downgrade, currently Ba1

  -- Senior Unsecured Regular Bond/Debenture, Placed on Review
     for Possible Downgrade, currently Baa2

Issuer: AEP Texas North Company

  -- Issuer Rating, Placed on Review for Possible Downgrade,
     currently Baa1

  -- Preferred Stock Preferred Stock, Placed on Review for
     Possible Downgrade, currently Baa3

  -- Senior Unsecured Regular Bond/Debenture, Placed on Review
     for Possible Downgrade, currently Baa1

Issuer: Guadalupe-Blanco River Authority, TX

  -- Senior Unsecured Revenue Bonds, Placed on Review for
     Possible Downgrade, currently Baa2

Issuer: Matagorda County Navigation District 1, TX

  -- Senior Unsecured Revenue Bonds, Placed on Review for
     Possible Downgrade, currently a range of Baa2 to Baa1

Issuer: Red River Authority of Texas

  -- Senior Unsecured Revenue Bonds, Placed on Review for
     Possible Downgrade, currently Baa1

Outlook Actions:

Issuer: AEP Texas Central Company

  -- Outlook, Changed To Rating Under Review From Negative

Issuer: AEP Texas North Company

  -- Outlook, Changed To Rating Under Review From Stable


AMERICAN FIBERS: Wants Plan Filing Period Extended to April 21
--------------------------------------------------------------
AFY Holding Compnay and its wholly owned subsidiary, American
Fibers and Yarns Company, ask the U.S. Bankruptcy Court for the
District of Delaware to extend their exclusive period to file a
Chapter 11 plan through and including April 21, 2009, and their
exclusive period to solicit acceptances of that plan to June 18,
2009.  This is the Debtors' first request for an extension of
their plan deadlines.

The Debtors tell the Court that they have still to complete
discussions with the Official Committee of Unsecured Creditors
regarding the terms of a consensual Chapter 11 plan and still have
a variety of other tasks to complete before it can propose a
meaningful plan.  These tasks include the sale of their Afton,
Virginia facility and certain finished goods and raw materials
inventory, the resolution of certain adversary proceeds to collect
outstanding accounts receivables, and the review and evaluation of
claims which must be considered before any plan or plans can be
formulated.  The Debtors relate that the requested extension will
not prejudice the legitimate interests of creditors, as the
Debtors continue to pay their debts as they fall due.

                       About American Fibers

Headquartered in Chapel Hill, North Carolina, American Fibers and
Yarns Company -- http://www.afyarns.com/-- manufactures solution-
dyed Polypropylene yarns in its Bainbridge, Georgia and Afton,
Virginia production facilities for distribution throughout the
United States.  American Fibers is 100% owned by AFY Holding
Company.

On Sept. 22, 2008, AFY Holding and American Fibers and Yarns filed
voluntary petitions seeking Chapter 11 relief (Bankr. D. Del. Lead
Case No. 08-12175).  Edward J. Kosmowski, Esq., Michael R. Nestor,
Esq., Robert F. Poppiti, Jr., Esq., and Nathan D. Grow, Esq., at
Young, Conaway, Stargatt & Taylor, LLP, represent the Debtors as
counsel.  RAS Management Advisors, LLC serves as the Debtors'
restructuring advisors.  Epiq Bankruptcy Solutions, LLC serves as
the Debtors' claims, noticing and balloting agent.

The U.S. Trustee for Region 3 appointed creditors to serve on an
Official Committee of Unsecured Creditors.  Kenneth A. Rosen,
Esq., Sharon L. Levine, Esq., Eric H. Horn, Esq., and Sean E.
Quigley, Esq., at Lowenstein Sandler PC, represents the Debtors as
counsel.  William P. Bowden, Esq., Don A. Beskrone, Esq, and
Amanda M. Winfree, Esq., at Ashby & Geddes, P.A., represent the
Committee as Delaware counsel.  When the Debtors sought bankruptcy
protection from their creditors, they listed assets of between $10
million and $50 million and debts of between
$10 million and $50 million.


AMERICAN FIBERS: Court Approves Private Sale of 25.1-Acre Lot
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
approved the private sale of AFY Holding Company and American
Fibers and Yarns Company's 25.1-acre property at 140 Industrial
Boulevard, Bainbridge, Georgia, for the purchase price of
$1,500,000, on an "as is, where is" basis, free and clear of all
liens, to the Development Authority of Bainbridge and Decatur
County, Georgia.

As reported in the Troubled Company Reporter on Jan. 5, 2009, the
official committee of unsecured creditors and General Capital
Corp., the Debtors' postpetition lender, have consented to the
sale.

Any liens, claims, encumbrances, and interests will attach to the
proceeds of the sale.

In their motion, the Debtors told the Court that, in their
informed business judgment, there is very little, if anything, to
be gained by conducting a formal auction of the Purchased Assets.
The Debtors related that they believe that it is unlikely there
will be other entities willing and able to overbid the Purchaser
for the Purchased Asset, and that the delay, uncertainty and added
administrative expenses attendant to the auction process would be
unfavorable to the Debtors, their estates and creditors.

                       About American Fibers

Headquartered in Chapel Hill, North Carolina, American Fibers and
Yarns Company -- http://www.afyarns.com/-- manufactures solution-
dyed Polypropylene yarns in its Bainbridge, Georgia and Afton,
Virginia production facilities for distribution throughout the
United States.  American Fibers is 100% owned by AFY Holding
Company.

On Sept. 22, 2008, AFY Holding and American Fibers and Yarns filed
voluntary petitions seeking Chapter 11 relief (Bankr. D. Del. Lead
Case No. 08-12175).  Edward J. Kosmowski, Esq., Michael R. Nestor,
Esq., Robert F. Poppiti, Jr., Esq., and Nathan D. Grow, Esq., at
Young, Conaway, Stargatt & Taylor, LLP, represent the Debtors as
counsel.  RAS Management Advisors, LLC serves as the Debtors'
restructuring advisors.  Epiq Bankruptcy Solutions, LLC serves as
the Debtors' claims, noticing and balloting agent.

The U.S. Trustee for Region 3 appointed creditors to serve on an
Official Committee of Unsecured Creditors.  Kenneth A. Rosen,
Esq., Sharon L. Levine, Esq., Eric H. Horn, Esq., and Sean E.
Quigley, Esq., at Lowenstein Sandler PC, represents the Debtors as
counsel.  William P. Bowden, Esq., Don A. Beskrone, Esq, and
Amanda M. Winfree, Esq., at Ashby & Geddes, P.A., represent the
Committee as Delaware counsel.  When the Debtors sought bankruptcy
protection from their creditors, they listed assets of between $10
million and $50 million and debts of between
$10 million and $50 million.


AMERICAN FIBERS: Court Extends Time to Remove Actions to March 23
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
extended for approximately 90 days to March 23, 2009, the time
period within which AFY Holding Company and American Fibers and
Yarns Company may file notices of removal or related proceedings
pursuant to Sec. 1452 of the Judiciary and Judicial Procedure and
Rule 9027 of the Federal Rules of Bankruptcy Procedure.

Specifically, Sec. 1452 provides that:

  [a} party may remove any claim or cause of action in a civil
  action other than a proceeding before the United States Tax
  Court or a civil action by a governmental unit to enforce such
  governmental unit's police or regulatory power, to the district
  court for the district where such civil action is pending, if
  such district court has jurisdiction of such claim or cause of
  action under section 1334 of this title.

Bankruptcy Rule 9027(a)(2) further provides, in pertinent part
that:

  [i]f the claim or cause of action in a civil action is pending
  when a case under the [Bankruptcy] Code is commenced, a notice
  of removal may be filed in the bankruptcy court only within the
  longest of (A) 90 days after the order for relief in the case
  under the Code, (B) 30 days after entry of an order terminating
  a stay, if the claim or cause of action in a civil action has
  been stayed under Sec. 362 of the Code, or (C) 30 days after a
  trustee qualifies in a chapter 11 reorganization case but not
  later than 180 days after the order for relief.

In its motion, the Debtors told the Court that they may be a party
to actions currently pending in the courts of various states and
federal districts.  The requested extension will afford the
Debtors and their professionals sufficient time to fully review
all of the prepetition actions to determine if any should be
removed pursuant to Bankruptcy Rule 9027(a).

                       About American Fibers

Headquartered in Chapel Hill, North Carolina, American Fibers and
Yarns Company -- http://www.afyarns.com/-- manufactures solution-
dyed Polypropylene yarns in its Bainbridge, Georgia and Afton,
Virginia production facilities for distribution throughout the
United States.  American Fibers is 100% owned by AFY Holding
Company.

On Sept. 22, 2008, AFY Holding and American Fibers and Yarns filed
voluntary petitions seeking Chapter 11 relief (Bankr. D. Del. Lead
Case No. 08-12175).  Edward J. Kosmowski, Esq., Michael R. Nestor,
Esq., Robert F. Poppiti, Jr., Esq., and Nathan D. Grow, Esq., at
Young, Conaway, Stargatt & Taylor, LLP, represent the Debtors as
counsel.  RAS Management Advisors, LLC serves as the Debtors'
restructuring advisors.  Epiq Bankruptcy Solutions, LLC serves as
the Debtors' claims, noticing and balloting agent.

The U.S. Trustee for Region 3 appointed creditors to serve on an
Official Committee of Unsecured Creditors.  Kenneth A. Rosen,
Esq., Sharon L. Levine, Esq., Eric H. Horn, Esq., and Sean E.
Quigley, Esq., at Lowenstein Sandler PC, represents the Debtors as
counsel.  William P. Bowden, Esq., Don A. Beskrone, Esq, and
Amanda M. Winfree, Esq., at Ashby & Geddes, P.A., represent the
Committee as Delaware counsel.  When the Debtors sought bankruptcy
protection from their creditors, they listed assets of between $10
million and $50 million and debts of between
$10 million and $50 million.


AMERICAN FIBERS: Court Okays Sale of Various Assets to Maynards
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
the sale of certain of the property and assets of AFY Holding
Company and American Fibers and Yarns Company to Maynards
Industries (1991) Inc., which submitted the highest and best offer
for the assets of the Debtors at the Auction Sale.  These assets
comprise of (1) machinery and equipment; (2) real estate; and (3)
inventory.

As reported in the Troubled Company Reporter on Jan. 5, 2009,
Maynards Industries (1991) Inc., a Delaware corporation, agreed to
purchase the above assets in cash for $1,550,000.

Maynards will pay the deposit of $155,000 by certified or bank
check or by wire transfer.  Maynards will also pay $295,000 by
wire transfer and will retain a holdback of $1,100,000 which will
be available to the Purchaser for any claims Purchaser may suffer
due to the owner of the premises at 1051 Colquitt Highway,
Bainbridge, Georgia, including if Landlord prevents any sale
taking place at its location on time.

The Holdback, less any claim of Purchaser due to the interference
from the Landlord, will be paid to the Debtors upon occurrence
of any of the following: (i) the Landlord Occupancy Agreement
being signed; (ii) completion of the Purchase Auction and removal
of all sold, unabandoned, assets from Seller Landlord Office prior
to April 19, 2009, or (iii) by April 19, 2009.

Full-text copies of the Asset Purchase Agreement, dated Dec. 20,
2008, among Maynards Industries (1991) Inc., AFY Holding company,
and American Fibers & Yarns Company, and a listing of the Acquired
Assets, are available for free at:

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

                       About American Fibers

Headquartered in Chapel Hill, North Carolina, American Fibers and
Yarns Company -- http://www.afyarns.com/-- manufactures solution-
dyed Polypropylene yarns in its Bainbridge, Georgia and Afton,
Virginia production facilities for distribution throughout the
United States.  American Fibers is 100% owned by AFY Holding
Company.

On Sept. 22, 2008, AFY Holding and American Fibers and Yarns filed
voluntary petitions seeking Chapter 11 relief (Bankr. D. Del. Lead
Case No. 08-12175).  Edward J. Kosmowski, Esq., Michael R. Nestor,
Esq., Robert F. Poppiti, Jr., Esq., and Nathan D. Grow, Esq., at
Young, Conaway, Stargatt & Taylor, LLP, represent the Debtors as
counsel.  RAS Management Advisors, LLC serves as the Debtors'
restructuring advisors.  Epiq Bankruptcy Solutions, LLC serves as
the Debtors' claims, noticing and balloting agent.

The U.S. Trustee for Region 3 appointed creditors to serve on an
Official Committee of Unsecured Creditors.  Kenneth A. Rosen,
Esq., Sharon L. Levine, Esq., Eric H. Horn, Esq., and Sean E.
Quigley, Esq., at Lowenstein Sandler PC, represents the Debtors as
counsel.  William P. Bowden, Esq., Don A. Beskrone, Esq, and
Amanda M. Winfree, Esq., at Ashby & Geddes, P.A., represent the
Committee as Delaware counsel.  When the Debtors sought bankruptcy
protection from their creditors, they listed assets of between $10
million and $50 million and debts of between
$10 million and $50 million.


ASYST TECHNOLOGIES: Sees Need to Obtain Loan Covenant Waivers
-------------------------------------------------------------
Asyst Technologies, Inc., discloses that while it was in
compliance with the covenants under its principal credit facility
as of Dec. 31, 2008, it is probable that the company will need a
waiver or amendment of certain covenants as of the quarter ending
Mar. 31, 2009.  The company believes that its bank relationships
are good and currently is negotiating with its banks for such a
waiver or amendment.  However, there can be no assurance that a
waiver or amendment will be granted or that the terms of any such
waiver or amendment will be favorable to the company.

On Tuesday, Asyst Technologies reported financial results for its
fiscal third quarter ended Dec. 31, 2008.  Net loss for the fiscal
third quarter in accordance with GAAP was $7.3 million.  This
compares with a net loss of $100.0 million in the fiscal second
quarter, which included the impact of a non-cash goodwill
impairment charge of $89.4 million.  Non-GAAP net loss for the
fiscal third quarter was $4.8 million, which compares with
$7.8 million, in the prior sequential quarter.

Net sales for the fiscal third quarter were $83.0 million, which
compares with $95.1 million in the prior sequential quarter.  Net
sales related to automated material handling systems (AMHS) were
$67.6 million, which compares with $70.1 million in the prior
sequential quarter.  Net sales related to tool and fab automation
solutions were $15.4 million, which compares with $25.0 million in
the prior sequential quarter.

Steve Schwartz, chair and chief executive officer of Asyst, said,
"We have taken significant action over the past several months to
reduce the company's cash breakeven level and to position the
business for the challenging economic environment. Over the first
three quarters of the current fiscal year, we have reduced ongoing
annual operating expenses by approximately $25 million and reduced
the quarterly cash breakeven sales level to approximately $75
million. In the fiscal fourth quarter we are taking further
actions, which we expect will result in an additional $30-$35
million of annual savings and a $55 million quarterly cash
breakeven level entering the fiscal year that begins April 1.  In
the fiscal third quarter we achieved gross margin of 31%, up
significantly from the prior sequential quarter despite lower
volume.  This is consistent with our objectives and reflects
continuing improvements in our supply chain. Bookings in the
fiscal third quarter were $92 million, which allowed us to build
backlog for the second consecutive quarter. All of these
accomplishments are positioning us to weather what we believe will
continue to be a challenging environment in the coming fiscal
year."

Cash as of the end of the quarter was $77 million, which compares
with $79 million in the prior quarter and $78 million for the same
quarter last year.  The company generated positive adjusted EBITDA
of $0.4 million in the quarter, compared with an adjusted EBITDA
loss of $2.6 million in the prior sequential quarter.  In the
current business conditions, Asyst said it is focused on
generating positive cash flow before changes in working capital to
support continued investment in new products and the servicing of
its debt.

For the fiscal fourth quarter ending Mar. 31, 2009, Asyst
expects consolidated net sales to be in the range of $65 million
to $75 million.  Net loss in accordance with GAAP is expected to
be in the range of $0.20 to $0.25 per share, including the impact
of $3 to $5 million of restructuring charges related to the
aforementioned cost reductions.  Non-GAAP net loss is expected to
be in the range of $0.15 to $0.19 per share.  In calculating non-
GAAP net loss per share, the company expects to exclude
approximately $4 million to $6 million for restructuring charges
and intangibles amortization, net of taxes.

                           About Asyst

Fremont, California-based Asyst Technologies, Inc. --
http://www.asyst.com-- provides integrated automation solutions
that enable semiconductor and flat panel display manufacturers to
increase their manufacturing productivity and protect their
investment in materials during the manufacturing process.  Asyst's
modular, interoperable solutions allow chip and FPD manufacturers,
as well as original equipment manufacturers, to select and employ
the value-assured, hands-off manufacturing capabilities that best
suit their needs.


BERNARD L. MADOFF: Court to Hear Pacts on $535-Mil. Transfer Today
------------------------------------------------------------------
Judge Burton R. Lifland of the U.S. Bankruptcy Court for the
Southern District of New York, is scheduled to convene a hearing
on February 4, 2009, to consider approval of stipulations signed
by Irving Picard, the trustee for Bernard L. Madoff Investment
Securities LLC, with Bank of New York Mellon Corp. and JPMorgan
Chase & Co. relating to the transfer of $535 million.

Bank of New York has agreed to transfer $301.4 million, while
JPMorgan about $233.5 million, to Mr. Picard by Feb. 6, 2009,
which funds they have held in an account in the name of the
Debtor.  Each of the stipulations provides, "It is the intention
of the Trustee, subject to further order of this Court, that the
funds from the Bank in the Account be allocated as customer
property and available for distribution to customers, pursuant to
the statutory scheme of SIPA."

Objections to the stipulations were due Feb. 3.

Judge Lifland is also scheduled to hear today objections, if any,
to the retention in office of Irving H. Picard, as trustee to
BLMIS, and Baker & Hostetler LLP, as counsel to the Trustee, upon
the ground that they are not qualified or not disinterested as
provided in SIPA Section 78eee(b)(6).  Objections were due five
days prior to the hearing.  The bankruptcy docket provides that no
objections were filed opposing Mr. Picard's or his counsel's
disinterestedness.

              First Meeting of Creditors on Feb. 20

The U.S. District of Court for the Southern District of New York
approved on Dec. 15, 2008, an application by the Securities
Investor Protection Corporation to send BLMIS to liquidation
pursuant to Securities Investor Protection Act of 1970.

Two months later, victims of Bernard L. Madoff's $50 billion Ponzi
scheme will finally be given an opportunity to seek more
information on the status of their claims.  According to a notice,
the first meeting of customers and creditors will be held on
February 20, 2009, at 10:00 a.m., at the Auditorium at the United
States Bankruptcy Court, Southern District of New York, One
Bowling Green, in New York, at which time and place customers and
creditors may attend, examine the Debtor, and transact such other
business as may properly come before said meeting.

                     About Bernard L. Madoff

Bernard L. Madoff Investment Securities LLC was a market maker in
US stocks, including all of the S&P 500 and more than 350 Nasdaq
stocks.  The firm moved large blocks of stock for institutional
clients by splitting up orders or arranging off-exchange
transactions between parties.  It also performed clearing and
settlement services.  Clients included brokerages, banks, and
other financial institutions.  In addition, Madoff Securities
managed assets for high-net-worth individuals, hedge funds, and
other institutional investors.

The firm is being liquidated in the aftermath of a fraud scandal
involving founder Bernard L. Madoff.

As reported by the Troubled Company Reporter on Dec. 15, 2008, the
Securities and Exchange Commission charged Bernard L. Madoff and
his investment firm, Bernard L. Madoff Investment Securities LLC,
with securities fraud for a multi-billion dollar Ponzi scheme that
he perpetrated on advisory clients of his firm.  The estimated
losses from Madoff's fraud were at least $50 billion

Also on Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S.
District Court for the Southern District of New York granted the
application of the Securities Investor Protection Corporation for
a decree adjudicating that the customers of BLMIS are in need of
the protection afforded by the Securities Investor Protection Act
of 1970.  Irving H. Picard, Esq., was appointed as trustee for the
liquidation of BLMIS, and Baker & Hostetler LLP was appointed as
counsel.


BERRY PETROLEUM: Moody's Reviews Low-B Ratings for Possible Cuts
----------------------------------------------------------------
Moody's Investors Service placed the ratings for Berry Petroleum
Company on review for possible downgrade and simultaneously
changed Berry's Speculative Grade Liquidity rating to SGL-4 from
SGL-3.  The ratings affected are Berry's B1 Corporate Family
Rating, B1 Probability of Default Rating, and Berry's B3 (LGD 6,
90%) senior subordinated notes rating.

The review for downgrade reflects Moody's concern that Berry's
liquidity position faces potential tightening, as well as concerns
that the company's operating and leverage metrics will not meet
the expectations of the previously positive outlook and B1 CFR.

The ratings review will assess the company's liquidity outlook and
its plans to raise capital, its ability to meet its covenants,
operating performance for 2008, including reserve replacement and
unit full cycle cost trends, as well as its expectations for
capital spending and operating results in 2009.  If Berry's
liquidity does not improve or if covenant compliance becomes an
issue, the ratings could be downgraded more than one notch.
However, if liquidity is bolstered and the company's year-end
results show good capital productivity and production trends are
positive, the ratings could be confirmed.

Like many other high yield E&P companies, Berry is facing lower
cash flows from the drop in commodity prices on its unhedged
production, as well as a possible reduction in borrowing base
under its senior secured revolving credit facility in early Q2'08.
Since commodity prices may negatively impact the company's year-
end reserves and prices have fallen further since year-end, it's
likely Berry will have reduced availability under its revolver.
Although the company currently has more than
$200 million of availability under the facility, a reduction in
the borrowing base, along with lower cash flows from weaker and
largely unhedged production through 2009, would significantly
weaken Berry's overall liquidity position, barring any asset
monetization and/or additional capital raising.

The review also reflects the challenges that Berry is experiencing
while transitioning from a pure California heavy oil producer to
also becoming a Rocky Mountain region and East Texas natural gas
producer in a weak commodity price and tightening credit markets
environment.  Berry's diversification strategy has been
accomplished through several sizeable debt funded acquisitions
which has been a financial policy departure from traditional
conservatism to a willingness to be more acquisitive.  As a
result, Berry has experienced significant increase in leverage
while facing a potential slow down in its operating momentum.
Moody's estimates pro-forma leverage at September 30, 2008 on the
PD reserve base has increased to over $9.00/boe compared to
$4.55/boe at year end 2007.  In addition, Moody's is concerned
that the revised 2009 capital expenditure program of $100 million
will likely have a material impact on Berry's development programs
in both the Rockies and East Texas which would inevitably lead to
weaker operational metrics both in terms of production and its
ability to replace reserves while generating competitive returns
over the course of 2009.

The downgrade of the SGL rating to SGL-4 reflects the expectation
that overall liquidity will likely to tighten from current levels
over the next twelve months.  Berry has more than $900 million
outstanding under its $1.25 billion secured revolving credit
facility ($1.25 borrowing base).  Moody's expects Berry's credit
facility Borrowing Base to be reduced due to re-determination in
April 2009.  The company is also expected to be at risk of
breaching its credit facility leverage maintenance covenant in the
second half of 2009 due to lower cashflows as the result of lower
commodity prices and production shut-ins.

Moody's last rating action for Berry dates from June 12, 2008, at
which time Moody's confirmed Berry's existing ratings concluding
the review for upgrade initiated by Moody's on April 8, 2008 and
assigned a positive outlook .

Berry Petroleum Company based in Denver, Colorado, is an
independent energy company engaged in the exploration,
development, production, acquisition, and exploitation of crude
oil and natural gas.  The company's reserves and production are
located in California, the Rocky Mountain, and Mid- Continent.


BIOJECT MEDICAL: Enters Into Letter Agreements With 3 Officers
--------------------------------------------------------------
On January 28, 2009, Bioject Medical Technologies Inc. entered
into a letter agreement with each of Ralph Makar, Bioject's
President and CEO, Christine M. Farrell, Bioject's Vice President
of Finance and member of the Executive Committee, and Richard R.
Stout, M.D., Bioject's Executive Vice President and Chief Medical
Officer and member of the Executive Committee, pursuant to which
each executive voluntarily agreed to reduce his or her monthly
base salary by 20%, commencing February 1, 2009, notwithstanding
any provision of any employment agreement between Bioject and the
executive to the contrary.

The base salary of each executive immediately prior to the
reduction will continue to be the executive's base salary for all
other purposes under executive's employment agreement or under
Bioject's personnel policies.  Bioject will revert to paying each
executive his or her base salary immediately prior to the
reduction upon the written request of the executive.

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

               http://researcharchives.com/t/s?3913

                     About Bioject Medical

Based in Portland, Oregon, Bioject Medical Technologies Inc.
(Nasdaq: BJCT) -- http://www.bioject.com/-- is a developer and
manufacturer of needle-free injection therapy systems (NFITS).
NFITS provide an empowering technology and work by forcing
medication at high speed through a tiny orifice held against the
skin.  This creates a fine stream of high-pressure fluid
penetrating the skin and depositing medication in the tissue
beneath.  The company is focused on developing mutually beneficial
agreements with leading pharmaceutical, biotechnology, and
veterinary companies.

                        Going Concern Doubt

As reported in the Troubled Company Reporter on April 18, 2008,
Moss Adams LLP expressed substantial doubt about Bioject Medical
Technologies Inc.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the years ended Dec. 31, 2007, and 2006.  The auditor reported
that the company has suffered recurring losses, has had
significant recurring negative cash flows from operations, and has
an accumulated deficit.

On September 30, 2008, the company's balance sheet showed total
assets of $6,171,014, total liabilities of $5,024,449 and total
stockholders' equity of $1,146,565.

The TCR reported on Oct. 14, 2008, that on Oct. 6, 2008, the
Nasdaq Stock Market said it will delist the company's common
stock.  Bioject's common stock was suspended from trading on
July 23, 2008, and has not traded on NASDAQ since that time.
NASDAQ filed a Form 25 with the Securities and Exchange Commission
on Oct. 6, 2008, to complete the delisting.  The delisting becomes
effective 10 days after the Form 25 was filed.  Trading in
Bioject's common stock was transferred to the Over-the-Counter
Bulletin Board, an electronic quotation service maintained by the
Financial Industry Regulatory Authority, effective with the open
of the market on July 23, 2008.  The symbol remains BJCT.


BLOUNT INTERNATIONAL: Closes Tennessee Production Facility
----------------------------------------------------------
Blount International, Inc. [NYSE: BLT] said it will permanently
close its Milan, Tennessee production facility.  It is anticipated
that the closure will be completed during the second quarter of
2009.  The Milan facility currently is one of the seven
manufacturing facilities supporting the company's core business,
the Outdoor Products segment.  The Milan facility employs close to
100 employees and accounted for approximately five percent of the
segment's production cost in 2008.  Products currently produced at
the Milan facility will be manufactured at the segment's remaining
facilities.

The company will record an estimated charge of between
$4.5 million and $5.5 million in the first quarter of 2009 related
to the Milan closure.  This non-recurring charge includes a non-
cash expense of approximately $3.0 million to $3.5 million related
to the disposal and write-down of assets that will not be
transferred to the other manufacturing facilities.  Cash expense
is estimated to be between $1.5 million and $2.0 million and is
primarily for severance benefits for qualifying Milan employees.

Based in Portland, Oregon, Blount International, Inc. [NYSE: BLT]
-- http://www.blount.com-- is a diversified international company
operating in two principal business segments: Outdoor Products and
Industrial and Power Equipment.  The company's Outdoor Products
segment provides chain, bars and sprockets to the chainsaw
industry, accessories to the lawn care industry and concrete
cutting saws.  Blount manufactures its products in the United
States, Canada, China, and Brazil, and sells them in more than 100
countries.

According to a Form 10-Q filing with the Securities and Exchange
Commission, Blount International's balance sheet showed
$485.2 million in total assets, $505.3 million in total
liabilities, resulting in stockholders' deficit of $20.0 million
and an accumulated deficit of $586.4 million as of September 30,
2008.  The company said total debt at September 30, 2008, was
$332.1 million, compared to $297.0 million at December 31, 2007.
The increase in debt during 2008 is attributable to borrowings
under the revolving credit facility to fund its acquisition of
Carlton Holdings, Inc., in May.

Blount International said its debt continues to be significant,
and future debt service payments continue to represent substantial
obligations.  The company said the degree of leverage may
adversely affect its operations and could have important adverse
consequences.


BON-TON STORES: To Implement Cost Saving Plan
---------------------------------------------
The Bon-Ton Stores, Inc. (NASDAQ: BONT), has performed a strategic
analysis of its operating structure and is implementing a cost
saving plan.

Bud Bergren, Bon-Ton President and Chief Executive Officer,
commented, "We are taking necessary actions to reduce costs in
response to additional pressure on the retail industry brought on
by significant deterioration in both the financial markets and
macroeconomic environment.  We believe the reduction in force and
other initiatives we have outlined will improve our cost structure
and will better position the company for the current difficult
economy and for the longer term.  We have been managing our
business conservatively and controlling expenses throughout 2008,
but it is necessary to take further action to ensure our
organization is appropriately structured for this environment and
emerges as a stronger company.  The decisions we made have not
been easy.  We realize these expense reductions will impact many
dedicated associates and we will assist in their transition.  The
affected employees will be provided with career transition
benefits, including severance according to established practices,
and state employment service support."

The estimated impact of the company's actions is an increase in
income from operations of $70 million on an annual basis.  The
benefit to cash flow in 2009 will reflect these expense savings as
well as the lower capital spending.

Actions to be taken in fiscal 2009 include:

    * reduce corporate and store personnel by approximately 1,150
      positions;

    * reduce other non-associate based costs;

    * eliminate 2008 bonus for senior executives;

    * eliminate 2009 merit-based wage increases across the entire
      company;

    * suspend employer contributions to the company's 401(k)
      plan;

    * reduce capital spending to $40 million, net of landlord
      contributions; and

    * adjust inventory levels in response to sales trend.

The one-time costs associated with these reductions, including
severance, are estimated to be $3.0 million.  Additionally, as
part of the strategic analysis and year-end close, the company is
reviewing the value of its intangible, long-lived and tax assets.
Based upon applicable accounting rules and other factors, which
take into account the difficult macroeconomic environment, the
company expects it will record a material non-cash charge to
reduce the reported value of these assets.  The impact of this
non-cash charge will be quantified during the year-end closing
process.

Mr. Bergren concluded, "We have a strong franchise with eight
regional nameplates, a loyal customer and associate base and a
merchandise mix that differentiates us from our competitors.  In
addition, we have strong vendor relationships and an experienced
and talented management team.  We believe the implementation of
our cost saving plan will further strengthen the company for the
short term and position it well for the future."

                      Employment Agreements

The Bon-Ton Stores, Inc., signed on January 23, 2009, an
Employment Agreement, Restricted Stock Agreement and Restricted
Stock Agreement - Performance Shares with each of Anthony J.
Buccina, the company's Vice Chairman, President of Merchandising,
and Stephen R. Byers, Vice Chairman, Stores, Visual, Construction,
Real Estate, Distribution & Logistics, Loss Prevention.  The
employment agreements are effective February 1, 2009, and continue
through April 30, 2011.

Bud Bergren, President and Chief Executive Officer, commented, "We
are extremely pleased to announce that Tony and Steve will
continue in their current positions as valuable members of Bon-
Ton's senior management team.  They have provided significant
insight and leadership to identify strategic initiatives as we
face today's challenging environment.  I look forward to working
with them to realize our plan for profitability."

                    About The Bon-Ton Stores

York, Pennsylvania-based The Bon Ton Stores Inc. (Nasdaq: BONT) --
http://www.bonton.com/-- operates 281 department stores, which
includes 12 furniture galleries, in 23 states in the Northeast,
Midwest and upper Great Plains under the Bon-Ton, Bergner's,
Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger's and
Younkers nameplates and, under the Parisian nameplate, three
stores in the Detroit, Michigan area.  The stores offer a broad
assortment of brand-name fashion apparel and accessories for
women, men and children, as well as cosmetics and home
furnishings.

Bon-Ton's balance sheet at Nov. 1, 2008, showed total assets of
$2.28 billion, total liabilities of $2.00 billion and total
shareholders' equity of about $284.30 million.

                           *     *     *

As reported in the Troubled Company Reporter on Jan. 23, 2009,
Moody's Investors Service downgraded the corporate family and
probability of default ratings of Bon-Ton Stores, Inc. to B3 from
B2.  Moody's also confirmed the rating on the company's senior
unsecured notes at Caa1 and affirmed its speculative grade
liquidity rating at SGL-3.  A negative outlook was assigned.  This
action completes the review for possible downgrade initiated on
October 24, 2008.


BROADSTRIPE LLC: Court Sets March 23 as Claims Bar Date
-------------------------------------------------------
The Hon. Christopher S. Sontchi of the United States Bankruptcy
Court for the District of Delaware set March 23, 2009, as the
deadline for creditors of Broadstripe LLC and its debtor-
affiliates to file proofs of claim.

Governmental units have until July 1, 2009, to file their proofs
of claim.

Headquartered in Chesterfield, Missouri, Broadstripe LLC --
http://www.broadstripe.com-- provide videos and telephone
services to consumers and business in Maryland, Michigan,
Washington and Oregon.  The company and fives of its affiliates
filed for Chapter 11 protection on January 2, 2009 (Bankr. D. Del.
Lead Case No. 09-10006).  Ashby & Geddes, and Gardere Wynne Sewell
LLP represent the Debtors in their restructuring efforts.  The
Debtors proposed FTI Consulting Inc. as their restructuring
consultant, and Epiq Bankruptcy Consultants LLC as their claims
agent.  Robert A. DeAngelis, the United States Trustee for Region
3, appointed six creditors to serve on an official committee of
unsecured creditors.  When the Debtors filed for protection from
their creditors, they listed assets and debts between
$100 million and $500 million in their filing.


BUFFETS HOLDINGS: Plan Hearing Suspended Due to Financing Delays
----------------------------------------------------------------
The hearing to consider confirmation of the First Amended Joint
Plan of Reorganization for Buffets Holdings Inc. and its
affiliates has been adjourned to a date and time to be determined,
Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor, LLP,
in Wilmington, Delaware, notifies parties-in-interest.

The United States Bankruptcy Court for the District of Delaware
originally set the Debtors' Plan Confirmation Hearing to
February 3, 2009, at 2:00 p.m., prevailing Eastern Time.  Parties
were given until January 27, at 4:00 p.m., to file objections to
the Plan.

The Debtors obtained court approval of the Disclosure Statement
explaining their Plan at a hearing held December 16, 2008.

In its request for an extension of its exclusive periods to seek
confirmation and approval of their Chapter 11 Plan, the Debtors
explained that since the last order extending the exclusive
periods, the Debtors completed negotiations with their most
significant creditor constituences concerning a consensual chapter
11 plan, received approval of their Disclosure Statement, and
commenced the process of soliciting acceptances of the Proposed
Plan.  However, the Debtors have not yet finalized the terms of
their exit financing to implement the Plan.  Accordingly, the
Debtors have asked the Court to adjourn the Confirmation Hearing.

"[O]nce a new date and time for the Confirmation Hearing has been
scheduled with the Bankruptcy Court, parties who have filed
objections to confirmation of the Plan will receive separate
notice of the date and time for the Confirmation Hearing," notes
Ms. Morgan.

                  Confirmation Objections

Various parties have filed objections to the Debtor's First
Amended Joint Plan of Reorganization including:

  -- Equal Employment Opportunity Commission,
  -- Margaret H. Craig,
  -- El Paso County,
  -- Michigan Department of Labor & Economic Growth,
     Unemployment Insurance Agency,
  -- Texas Comptroller of Public Accounts,
  -- Tennessee Department of Revenue,
  -- Missouri Department of Revenue,
  -- Tax Appraisal District of Bell County, et al.,
  -- Local Texas Tax Authorities and City of Memphis,
  -- Travis County,
  -- Douglas County Treasurer,
  -- United States Internal Revenue Service,
  -- LA Dept of Revenue,
  -- Treasurer of Douglas County, Colorado,
  -- Travis County, et al., and
  -- Kern County

A. EEOC

The Equal Employment Opportunity Commission asks the Court to
deny confirmation of the Debtors' Plan to the extent it calls for
the discharge of the "the debtor from any debt that arose before
the date of confirmation."

The EEOC says it has a $350,000 general unsecured claim against
the Debtors under Claim No.8177 pursuant to pending employment
discrimination in the U.S. District Court for the Western
District of Kentucky, Paducah Division.  The EEOC is also a
holder of Claim Nos. 496, 497 and 498, which it asserts against
the Debtors for an unspecified amount.  This claim is the subject
of pending employment discrimination litigation in the U.S.
District Court for the Southern District of California.

B. M. Craig

Mary H. Craig, a former employee of the Debtors, informs the
Court that she disagrees with the approval of the Debtors'
Disclosure Statement.  Ms. Craig asserts a Virginia Workers'
Compensation Claim for injuries she sustained from a work
accident in the course of her employment.

Counsel for Ms. Craig, Wesley G. Marshall, Esq., in
Fredericksburg, Virginia, says the Court's notice of the approval
of the Disclosure Statement is not specific on whether Ms. Craig
has a claim against the Debtors that is impaired under the Plan.
He said that by general description, it appears that Ms. Craig's
claim is a Class 1-Other priority Claim, which would be
unimpaired under the plan, and she was presumed to accept the
plan and was not entitled to vote to accept or reject it.

"If classification of Ms. Craig's claim is under any class which
is impaired under the plan, Ms. Craig seeks all available relief
and objects to any provisional plan which would impair her
entitlement to benefits in connection with ongoing Workers'
Compensation Claim," Mr. Marshall said.

C. El Paso

Having received notice of the Court's approval of the Debtors'
Disclosure Statement, El Paso County, Colorado, asks the Court
that its claim -- having been classified as Class 4 - Other
Secured Claim -- be reclassified as Unclassified Priority Tax
Claim because the claim is based on the tax assessment of
personal property.  El Paso's treasurer Sandra Damron tells the
Court that the County's assessment was based on information that
the Debtors had provided the El Paso County assessor.

D. MI Department of Energy

Roland Hwang, Esq., assistant attorney general for Michigan
Department of Energy, reminds the Court that Section 129(a)(9)(C)
of the Bankruptcy Code provides that interest on priority tax
claims must be paid at a rate determined by the "prevailing
market rate for a loan of a term equal to the payout period, with
due consideration of the quality of the security and the risk of
subsequent default."

Mr. Hwang contends that the Debtors fail to specifically provide
for the statutory interest at the established one percent per
month pursuant to Section 1129(a)(9)(C) and Section 421.15 of the
Michigan Compensation Laws.

E. Texas, Tennessee and Missouri Gov't. Agencies

The Texas Comptroller of Public Accounts, the Tennessee
Department of Revenue and the Missouri Department of Revenue ask
the Court to deny the confirmation of the plan unless matters are
raised to cure their objections.

The Texas Comptroller has filed a priority claim for Texas
franchise tax amounting to $145,426.  The Debtors were required
to file a Texas franchise tax return with the Texas Comptroller
on June 16, 2008, but failed to do so.  The franchise tax claim
is entitled to priority status under Sections 507(a)(8)(E) of the
Bankruptcy Code.

The Tennessee Department of Revenue is an administrative and
prepetition creditor holding tax claims against the Debtors.

The Missouri Department of Revenue has a priority tax claim
against the Debtors totaling $10,839.

The Texas Comptroller, Texas Department of Revenue and Missouri
Department of Revenue disagree with the plan because it provides
for payment of priority tax claims installments, but it does not
clearly specify that interest will be paid on the deferred
installments as provided for by Section 511(a) of the Bankruptcy
Code.

Furthermore, MDOR objects to Debtors' Plan because it fails to
provide remedies in the event of Debtors? default in making
payments.

F. Taxing Authorities

The Ad Valorem Taxing Jurisdictions in the State of Texas - Bell
County, Anderson County, Comal County, Longview Independent
School District and City of Mansfield; and Local Texas Tax
Authorities and City of Memphis composed of Bexar County, Dallas
County, El Paso, Galveston County, Harris County, Jefferson
County, Montgomery County, Tarrant County, McLennan County,
Victoria County, Greg County, Hunt County, Parker CAD, and Smith
County, oppose the confirmation of the Debtors' Amended Plan by
virtue of their claims, which they say are secured tax claims
described as Priority Claims, Administrative Expense Claims or
unpaid Ad Valorem property taxes on the Debtors' real and
personal property.

The Taxing Jurisdictions say that the claims arise from property
taxes for the 2007 and 2008 tax years, due on the Debtors'
personal and real property located in these tax jurisdictions, as
well as both personal liability and lien for the taxes for 2009
as of January 1, 2009.  The Taxing Jurisdictions assert that
their secured claims are impaired under the Plan and they have
not accepted the Plan within the time fixed to do so.

G. IRS

The U.S. Internal Revenue Service, having asserted claims against
the Debtors aggregating $4,488,608, for failing to file a number
of federal tax returns, objects to the Plan because it fails to
provide for the payment of an adequate rate of interest on its
property tax claims.  Furthermore, IRS says the Plan fails to
preserve its set-off and recoupment rights.

H. LA Dept. of Revenue

As a holder of priority tax claims, the Louisiana Department of
Revenue asks the Court to deny the Confirmation of the Debtors'
Plan unless the Plan provides for an interest of its claims and
an adequate means for the Plan's implementation.

The Department says it is entitled to interest on its priority
tax claims at the applicable rate under non-bankruptcy law
pursuant to Section 511 of the Bankruptcy Code. However, Article
the Plan does not provide for the interest rate as required. The
Plan fails to specifically provide for statutory interest
pursuant to La. R.S. 47:1601, which is the applicable non-
bankruptcy interest provision.  The Plan also fails to comply
with Section 1123(a)(5)(G) of the Bankruptcy Code which requires
that a plan "provide adequate means for the plan's
implementation" including the "curing or waiving of any default."
The Department further notes that the Plan fails to explain what
remedies are available to the Department in the event of a
default.

I. Douglas County Treasurer

The Treasurer of Douglas County, Colorado informs the Court that
it opposes to the confirmation of the Debtors' Amended Joint Plan
of Reorganization on the ground that the Plan characterizes
Douglas County's property tax claim as an unsecured priority
claim.  Sharon Jones, Treasurer of Douglas County, asserts that
Douglas County's Claim is a secured claim pursuant to Section 39-
1-107(2)of the Colorado Revised Statutes.

J. Travis County, et al.

Travis County, Colorado, the City of Austin, Austin Independent
School District, Austin Community College and Travis County
Hospital District, represented by Travis County's Tax Collector -
Treasurer Nelda Wells Spears, also inform the Court that they
oppose the Plan because their claims are secured claims pursuant
to Section 39-1-107(2) of the Colorado Revised Statutes, but the
Plan characterizes them as unsecured priority claim.

K. Kern County

Kern County objects to the Debtors' plan which specifically
provides that priority tax claim will be paid either on the
Effective Date or through annual installments over a five year
period.

Kern County says it has a priority claim against the Debtors
which is based on ad valorem property taxes that was supposed to
paid without interest on September 2, 2008.  Since the Debtors
have failed to timely pay the taxes, these taxes incur additional
charges.

Kern says it intends to receive an amount equal to the allowed
amount of its claim on the Effective Date, adding that the
Debtors' "five year plan" would have to compensate Kern for the
delay.  In this regard, Kern asks the Court that the Plan be
amended to reflect that priority tax claims paid over the five
year period are entitled to an annual interest rate of 18% in
compliance of non-bankruptcy law.

                     About Buffets Holdings

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

The company and all of its subsidiaries filed Chapter 11
protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to
08-10158).  Joseph M. Barry, Esq., M. Blake Cleary, Esq., and
Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP,
represent the Debtors in their restructuring efforts.  The Debtors
selected Epiq Bankruptcy Solutions LLC as claims and balloting
agent.  The U.S Trustee for Region 3 appointed seven creditors to
serve on an Official Committee of Unsecured Creditors.  The
Committee selected Otterbourg Steindler Houston & Rosen PC and
Pachulski Stang Ziehl Young & Jones as counsels.  The Debtors'
balance sheet as of Sept. 19, 2007, showed total assets of
$963,538,000 and total liabilities of $1,156,262,000.

As reported in the Troubled Company Reporter on Feb. 26, 2008, the
Court granted on February 22, 2008, final approval of the Debtors'
debtor-in-possession credit facility, consisting of
$85 million of new funding and $200 million carried over from the
company's prepetition credit facility.

Bankruptcy Creditors' Service, Inc., publishes Buffets Holdings
Bankruptcy News.  The newsletter tracks the Chapter 11 proceedings
of Buffets Holdings Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


BUFFETS HOLDINGS: Seeks April 30 Solicitation Period Extension
--------------------------------------------------------------
To ensure that they have sufficient time to pursue the
confirmation of their proposed First Amended Joint Plan of
Reorganization, Buffets Holdings Inc. and its affiliates ask the
U.S. Bankruptcy Court for the District of Delaware to further
extend the exclusive period within which they have the right to
solicit acceptances of their proposed Plan, through and including
April 30, 2009.

The Court already extended the Debtors' Exclusive Period to
solicit acceptances of the Plan from October 1, 2008, through and
including January 30, 2009.

Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP,
in Wilmington, Delaware, informs the Court that the initial 120-
day period and subsequent extension period in the Debtors'
bankruptcy cases have not provided them with an adequate
opportunity to complete solicitation of acceptances of the
Proposed Plan.

Ms. Morgan says that since the last order extending the exclusive
periods, the Debtors completed negotiations with their most
significant creditor constituences concerning a consensual chapter
11 plan, received approval of their Disclosure Statement,
and commenced the process of soliciting acceptances of the
Proposed Plan.  However, the Debtors have not yet finalized the
terms of their exit financing to implement the Plan.
Accordingly, the Debtors have asked the Court to adjourn the
Confirmation Hearing.

According to Ms. Morgan, a large amount of the Debtors' time and
attention has been devoted to renegotiations with landlords and
vendors in order to secure reasonable terms under hundreds of
non-residential real property leases, several master leases and
hundreds of other contracts.  At the same time, the Debtors have
been developing their go-forward business optimization strategy
and formulating and completing their Proposed Plan.

The sheer size of the Debtors' Chapter 11 cases, in itself
supports a finding of cause to extend the Exclusive Solicitation
Period, says Ms. Morgan.  The sheer number of creditors and
amount of prepetition liabilities in these cases has necessitated
an extended Chapter 11 plan process, she adds.

Judge Mary Walrath will convene a hearing on the Debtors'
Exclusivity Motion on March 4, 2009, at 10:30 a.m.  Pursuant to
Del.Bankr.LR 9006-2, the Debtors' Exclusive Solicitation Period is
automatically extended until the conclusion of that hearing.

                     About Buffets Holdings

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

The company and all of its subsidiaries filed Chapter 11
protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to
08-10158).  Joseph M. Barry, Esq., M. Blake Cleary, Esq., and
Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP,
represent the Debtors in their restructuring efforts.  The Debtors
selected Epiq Bankruptcy Solutions LLC as claims and balloting
agent.  The U.S Trustee for Region 3 appointed seven creditors to
serve on an Official Committee of Unsecured Creditors.  The
Committee selected Otterbourg Steindler Houston & Rosen PC and
Pachulski Stang Ziehl Young & Jones as counsels.  The Debtors'
balance sheet as of Sept. 19, 2007, showed total assets of
$963,538,000 and total liabilities of $1,156,262,000.

As reported in the Troubled Company Reporter on Feb. 26, 2008, the
Court granted on February 22, 2008, final approval of the Debtors'
debtor-in-possession credit facility, consisting of
$85 million of new funding and $200 million carried over from the
company's prepetition credit facility.

Bankruptcy Creditors' Service, Inc., publishes Buffets Holdings
Bankruptcy News.  The newsletter tracks the Chapter 11 proceedings
of Buffets Holdings Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


BUFFETS HOLDINGS: Seeks April 24 Extension of Removal Period
------------------------------------------------------------
Buffets Holdings Inc. and its affiliates seek an extension of
their deadline to file notices to remove prepetition actions for
approximately 120 days, through and including April 24, 2009.

Rule 9027 of the Federal Rules of Bankruptcy Procedure sets forth
the time periods for filing notices to remove claims or causes of
action.  Specifically, Rule 9027(a)(2) provides that if the claim
or cause of action in a civil action is pending when a case under
the Bankruptcy Code is commenced, a notice of removal may be
filed only within the longest of:

(a) 90 days after the order for relief in the case under the
     Bankruptcy Code,

(b) 30 days after entry of an order terminating a stay, if the
     claim or cause of action in a civil action has been stayed
     under Section 362 of the Bankruptcy Code, or

(c) 30 days after a trustee qualifies in a Chapter 11
     reorganization case but not later than 180 days after the
     order for relief.

According to Pauline K. Morgan, Esq., at Young Conaway Stargatt &
Taylor, LLP in Wilmington, Delaware, since the Petition Date, the
Debtors have focused primarily on reorganizing their business
operations which has involved analyzing the profitability of
their restaurant locations and determining the desirability of
assuming the leases to which the locations are subject, closing a
number of the Debtors' existing stores and selling various fee-
owned property, marketing and disposing of unnecessary leases and
personal property and developing a go-forward business
optimization strategy.

In addition, Chapter 11 imposes additional obligations on the
debtors to prepare schedules of assets and liabilities, produce
monthly operating reports and other reports, respond to creditor
inquiries, retain professionals and handle the other various
tasks of the administration of their bankruptcy estates.  Certain
of the Debtors' cases have also involved significant litigation,
which has further consumed the Debtors' time and attention, Ms.
Morgan avers.

Since the most recent extension of the deadline by which the
Debtors must remove the State Court Actions, the Debtors' primary
efforts have been focused on filing the Chapter 11 Plan of
Reorganization, Ms. Morgan maintains.  The Debtors have also:

  (i) participated in the resolution of the adversary proceeding
      between the Committee and the Debtors' prepetition
      lenders, and amended the Plan and Disclosure Statement to
      reflect the terms of the settlement;

(ii) negotiated two forbearance agreements and amendments of
      their DIP credit facility with their postpetition lenders;

(iii) obtained approval of their Disclosure Statement and have
      recently begun solicitation of votes in confirmation of
      the Plan; and

(iv) have continued with the claims review and resolution
      process, including the filing of eight omnibus claim
      objections in the period.

As a result, the Debtors have not had an opportunity to fully
investigate all of the State Court Actions to determine whether
removal is appropriate, Ms. Morgan explains.

Ms. Morgan submits that granting the Debtors the additional
opportunity to consider removal of the State Court Actions will
assure that their decisions are fully informed and consistent
with the best interests of the estates.  Furthermore, nothing
will prejudice any party to a proceeding that the Debtors may
ultimately seek to remove from seeking the remand of the action
under Section 1452(b) of the Judiciary and Judicial Procedures
Code at the appropriate time, she says.

                        Parties Object

David Farrell Sullivan, a customer at Ryan's Restaurant in
Gaffney on November 25, 2008, complained that he was injured when
he allegedly slipped and fell while dining at the restaurant.
Mr. Sullivan claimed that he suffered injury both physically and
emotionally as a result of the fall allegedly caused by the
negligence of the restaurant's employees.

Mr. Sullivan asks the Court to deny the Debtors' motion to extend
removal periods, saying that he has no other available remedy at
law to recover the cost of outstanding bills associated with
medical doctors and living expenses.  Mr. Sullivan asserts
further that harm is being done to his credit status due to
unpaid medical bills resulting from the injury he sustained.

Thelma K. Johnson, a personal injury claimant, also objects to
the Debtors' request.

                     About Buffets Holdings

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

The company and all of its subsidiaries filed Chapter 11
protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to
08-10158).  Joseph M. Barry, Esq., M. Blake Cleary, Esq., and
Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP,
represent the Debtors in their restructuring efforts.  The Debtors
selected Epiq Bankruptcy Solutions LLC as claims and balloting
agent.  The U.S Trustee for Region 3 appointed seven creditors to
serve on an Official Committee of Unsecured Creditors.  The
Committee selected Otterbourg Steindler Houston & Rosen PC and
Pachulski Stang Ziehl Young & Jones as counsels.  The Debtors'
balance sheet as of Sept. 19, 2007, showed total assets of
$963,538,000 and total liabilities of $1,156,262,000.

As reported in the Troubled Company Reporter on Feb. 26, 2008, the
Court granted on February 22, 2008, final approval of the Debtors'
debtor-in-possession credit facility, consisting of
$85 million of new funding and $200 million carried over from the
company's prepetition credit facility.

Bankruptcy Creditors' Service, Inc., publishes Buffets Holdings
Bankruptcy News.  The newsletter tracks the Chapter 11 proceedings
of Buffets Holdings Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


BUFFETS HOLDINGS: Amends Letters of Credit Deal with U.S. Bank
--------------------------------------------------------------
Pursuant to Section 105(a) and 363(b) of the Bankruptcy Code,
Buffets Holdings Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to amend the
Letter of Reimbursement and Security Agreement they entered into
with the U.S. Bank National Association and pay certain fees and
costs to U.S. Bank with respect to the L/C Facility Agreement.

Judge Mary Walrath approved in December 2008, a third amendment to
the Debtors' Debtor-in-Possession Credit Agreement with their
lenders.  The Calendar Maturity Date provided for the in the Third
Amendment is not a six-month extension that would give rise to an
extension of the Latest Issuance Date under the Postpetition L/C
Facility Agreement.

Accordingly, absent modification of the terms of the Postpetition
L/C Facility Agreement, U.S. Bank National Association had
asserted that it would not have any duty to issue further
Postpetition Letters of Credit after January 22, 2009.  This would
potentially place the Debtors out of compliance with the
contractual or other obligations to the beneficiaries of the
Letters of Credit, Sean Greecher, Esq., at Young Conaway Stargatt
& Taylor, LLP, in Wilmington, Delaware, says.

It was, therefore, necessary for the Debtors and U.S. Bank to
enter into the Postpetition L/C Amendment, Mr. Greecher relates.

The significant modifications made to the Postpetition L/C
Facility Agreement by the Postpetition L/C Amendments, among
others, are:

  * "Collateral Account" means account number 410000723 and
    account number 104790402556 maintained by the Debtors with
    the Bank, as each account may be re-numbered or re-captioned
    from time to time, all sub-accounts thereof, and any
    duplicate, corollary or replacement account thereof.

  * "Latest Issuance Date" means the earlier of (i) April 30,
    2009, provided that the date will be automatically extended
    until May 31, 2009, if the Prepetition Credit Agreement
    Agent notifies the Bank in writing that the "Calendar
    Maturity" set forth in Section 3.3(C) of the Third Amendment
    to the DIP Credit Agreement, (ii) the effective date of
    confirmation of any plan of reorganization in the Bankruptcy
    Cases, or (iii) the date on which the "New Money
    Commitments" are terminated or the New Money Loans" as
    defined in the DIP Credit Agreement, become due and payable.

  * "Third Amendment to the DIP Credit Agreement" means that a
    certain Forbearance Agreement, Limited Waiver and Third
    Amendment to Credit Agreement, dated as of December 8,
    2008, among the borrower, Buffets Holdings and certain
    subsidiaries of Buffets Holdings, and the lenders under the
    DIP Credit Agreement.

  * The Borrower will pay to the Bank a letter of credit fee
    in an amount equal to the product of 1% times the Stated
    Amount times the quotient of the number of days between the
    date of issuance or renewal, as applicable, and the
    Expiration of the Letter of Credit, divided by 360.

A full-text copy of the Postpetition L/C Amendment is available
for free at: http://bankrupt.com/misc/buffets_pp_lcamendment.pdf

                     About Buffets Holdings

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

The company and all of its subsidiaries filed Chapter 11
protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to
08-10158).  Joseph M. Barry, Esq., M. Blake Cleary, Esq., and
Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP,
represent the Debtors in their restructuring efforts.  The Debtors
selected Epiq Bankruptcy Solutions LLC as claims and balloting
agent.  The U.S Trustee for Region 3 appointed seven creditors to
serve on an Official Committee of Unsecured Creditors.  The
Committee selected Otterbourg Steindler Houston & Rosen PC and
Pachulski Stang Ziehl Young & Jones as counsels.  The Debtors'
balance sheet as of Sept. 19, 2007, showed total assets of
$963,538,000 and total liabilities of $1,156,262,000.

As reported in the Troubled Company Reporter on Feb. 26, 2008, the
Court granted on February 22, 2008, final approval of the Debtors'
debtor-in-possession credit facility, consisting of
$85 million of new funding and $200 million carried over from the
company's prepetition credit facility.

Bankruptcy Creditors' Service, Inc., publishes Buffets Holdings
Bankruptcy News.  The newsletter tracks the Chapter 11 proceedings
of Buffets Holdings Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


CANAL CAPITAL: Reports $100,000 Net Loss of Year Ended Oct. 31
--------------------------------------------------------------
Todman & Co., CPAs, P.C., in New York, in a letter dated
January 27, 2009, to the stockholders of Canal Capital Corporation
expressed substantial about the company's ability to continue as a
going concern.  The firm audited the consolidated balance sheets
of Canal Capital Corporation and subsidiaries as of October 31,
2008 and 2007, and the related consolidated statements of
operations and comprehensive (loss) income, stockholders' equity,
and cash flows for each of the three years in the period ended
October 31, 2008.

According to Todman & Co., the company has suffered recurring
losses from operations and is obligated to continue making
substantial annual contributions to its defined benefit pension
plan.  All of these matters raise substantial doubt about the
company's ability to continue as a going concern.

Canal recognized a net loss of $0.1 million for 2008 as compared
to the 2007 net loss of $0.9 million and the 2006 net loss of
$0.3 million.  After recognition of preferred stock dividend
payments, the results attributable to common stockholders were a
net loss of $0.1 million in 2008, a net loss of $1.1 million in
2007 and a net loss of $0.4 million in 2006.  Canal's 2008 net
loss of $0.1 million is due primarily to the $0.3 million decrease
in income from stockyard operations.  Canal's 2007 net loss of
$1.0 million was due primarily to the $0.3 million decrease in
income from stockyard operations, coupled with a
$0.2 million decrease in operating income generated by the sale of
real estate and a $0.1 million increase to the valuation reserve
on Canal's remaining antiquities art inventory.

Canal's revenues from continuing operations consist of revenues
from its real estate and stockyard operations.  Revenues in 2008
increased by $0.8 million to $4.4 million as compared with 2007
revenues which had decreased by $0.8 million to $3.6 million as
compared with 2006 revenues of $4.4 million.  The fiscal 2008
increase in revenues is due primarily to the $1.1 million increase
in sales of real estate offset to a certain extent by the $0.3
million decrease in revenues from stockyard operations.  The
fiscal 2007 decrease in revenues is due primarily to the
$0.5 million decrease in sales of real estate, coupled with, a
$0.3 million decrease in stockyard operations due primarily to the
loss of two independent commission firms at the Sioux Falls, South
Dakota stockyards.

As of October 31, 2008, the company's balance sheet showed total
assets of $3,297,260, total current liabilities of $748,777, total
non-current liabilities of $555,321, long-term debt of related
party of $1,262,000, and total stockholders' equity of $731,162.

Michael E. Schultz, president and chief executive officer,
disclosed that Canal continues to closely monitor and reduce where
possible its operating expenses and plans to continue its program
to develop or sell the property it holds for development or resale
as well as to reduce the level of its antiquities art inventories
to enhance current cash flows.  "Management believes that its
income from operations combined with its cost cutting program and
planned reduction of its antiquities art inventory will enable it
to finance its current business activities.  There can, however,
be no assurance that Canal will be able to effectuate its planned
art inventory reductions or that its income from operations
combined with its cost cutting program in itself will be
sufficient to fund operating cash requirements."

A full-text copy of the company's annual report is available for
free at: http://researcharchives.com/t/s?390d

                        About Canal Capital

Headquartered in Hauppauge, New York, Canal Capital Corporation
(OTC: COWP) is engaged in two distinct businesses -- stockyard and
real estate operations.  Canal's real estate properties are
located in Sioux City, Iowa, South St Paul, Minnesota, St Joseph,
Missouri, Omaha, Nebraska and Sioux Falls, South Dakota.  The
properties consist, for the most part, of a commercial office
space, land and structures leased to third parties as well as
vacant land available for development or resale.  Canal also
operates two central public stockyards located in St.
Joseph, Missouri and Sioux Falls, South Dakota.


CAPITAL AUTOMOTIVE: Moody's Give Negative Outlook; Keeps Ratings
----------------------------------------------------------------
Moody's Investors Service revised the rating outlook for Capital
Automotive LLC to negative from stable; all ratings were affirmed.
The negative rating outlook reflects the company's high leverage
metrics which is more of a concern considering the difficulty
accessing new capital.  The company is currently negotiating its
bank revolver maturing in December 2009, and it also has
significant maturities in late 2010.  The negative outlook also
considers declining earnings for the auto dealerships and less
than certain tenant rent coverage levels.

Capital Automotive's Ba1 ratings continue to reflect the issuer's
high occupancy and good rent coverage.  Moody's also believes
state franchise and zoning laws, which effectively create
monopolies for store sites and use, contribute to credit strength.
Furthermore, the business model is pure triple-net, with little
required capex and long-term leases.  This, plus Capital
Automotive's brand and franchise diversity, well located and
stronger dealership tenant names (which tend to focus more in
foreign manufacturers) combine to support the ratings.  However,
Moody's has also identified these challenges to the ratings:
concentration with speculative tenants; high secured debt levels
that are increasingly difficult to unwind quickly in the current
credit environment; the softening outlook for auto sales; and the
issuer's lack of experience with lease expirations or tenant
issues.

Moody's will return the outlook to stable if Capital Automotive is
able to demonstrate sufficient liquidity to support operations for
the next 24 months (including the refinancing of the credit
facility), and the issuer maintains steady earnings and fixed
charge coverage ratios consistently above 1.3x.  Conversely, any
sustained deterioration in fixed charge coverage below 1.2x or
sustained portfolio rent coverages below 2x will result in a
ratings downgrade.  Substantial declines in net operating income
(15% or more), likely due to loss of leadership, will also likely
lead to lower ratings.

Moody's previous rating action with respect to Capital Automotive
LLC took place on December 19, 2005 when the Ba1 Corporate Family
Rating was affirmed and the Ba1 Senior Secured Rating was
assigned.

These ratings were affirmed with a negative outlook:

  -- Capital Automotive LLC -- Ba1 corporate family; Ba1 senior
     secured.

Capital Automotive LLC is headquartered in McLean, Virginia and is
solely focused on providing sale-leaseback capital to the
automotive retail industry.  The company has more than
$3.8 billion invested in over 590 automotive franchise facilities,
and over 17.5 million square feet of buildings on more than 3,100
acres in 38 states and Canada.


CELL THERAPEUTICS: Provides December Report to Italy's CONSOB
-------------------------------------------------------------
Cell Therapeutics, Inc. (CTI) (NASDAQ and MTA: CTIC), said that
the Italian securities regulatory authority, CONSOB, pursuant to
Article 114, Section 5 of the Unified Financial Act, requested
that the Company issue at the end of each month, a press release
providing a monthly update of certain information relating to the
Company's management and financial situation.

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

               http://researcharchives.com/t/s?3912

The Company also directs its Italian shareholders to the Italian
language section of its Web site at:
http://www.celltherapeutics.com/italianowhere more complete
information about the Company and its products and operations,
including press releases issued by the Company, as well as the
Company's SEC filings and the Listing Prospectus authorized to be
published by CONSOB, can be found.

                       Company Performance

With respect to the operating performance of the Company
(Consolidated), Estimated Net Sales of the Company for December,
2008 were approximately $700,000.  Revenue related to the sale of
Zevalin for the period December 1, 2008 through December 15, 2008
was recorded on the Company's books.  For the period December 16,
2008 through December 31, 2008, revenue related to the sales of
Zevalin was included in the Company's share of the loss in the
joint venture.  As a result of the formation of RIT Oncology, LLC
on December 15, 2008, the Company no longer records sales related
to Zevalin.  Accordingly, sales related to Zevalin and related
commercial and development expenses are recorded by RIT Oncology,
LLC of which the Company has a 50% interest.

The Company's Research and Development costs for the month ended
December 31, 2008 are estimated to be approximately $5,059,000.
The Company is not expected to have expired liabilities as of
December 31, 2008.

In terms of the capacity to sustain the Company needs the Company
estimates that its current cash will be sufficient through
February, 2009.  The Company will need to raise additional capital
this year and is exploring alternatives to do so, which may
include potential partnerships or joint ventures, public or
private equity financings, debt financings or restructurings,
dispositions of assets or through other means in order to fund its
continued operations.

The Company's annual audited financials for the year ended
December 31, 2008 are required to be filed with the SEC on or
before March 16, 2009 and will be presented in the Company's
Annual Report of Form 10-K.

          Regulatory Matters and Products in Development

With respect to the period December 1, 2008 through December 31,
2008, the Company has no additional information to disclose
concerning regulatory matters and products in developments and has
received no additional information from the EMEA or the FDA
regarding the request for the marketing of products, in addition
to what the Company publicly disclosed in its press releases dated
December 1, 2008 with respect to Zevalin, and May 5, 2008 and
April 2, 2008 with respect to OPAXIO. These press releases were
published in both the US and in Italy.

The Company announced on January 27, 2009 that after communication
with the Food and Drug Administration (FDA), CTI expects to begin
submission of a rolling New Drug Application (NDA) and request
priority review for pixantrone to treat relapsed aggressive non-
Hodgkin's lymphoma (NHL) in the first quarter of 2009.  If granted
priority review a decision on the NDA could occur before the end
of 2009.

                   Update on Outstanding Shares

The numbers of shares issued and outstanding as of November 30,
2008 and December 31, 2008 were 79,464,334 and 186,411,922,
respectively.

During the month of December 2008, the following transactions
contributed to the change in our shares outstanding:

   * Conversions of the Company's 10% Convertible Senior Notes
     which resulted in the issuance of 106,943,947 shares

   * The issuance of 7,200 shares under the 2007 Employee Stock
     Purchase Plan

   * The cancellation of 3,559 shares under the 2007 Equity
     Incentive Plan

As a result of additional conversions, as of January 28, 2009, the
number of shares outstanding was 295,943,993.

The Company is not aware of any agreement for the resale of its
shares on the MTA.

                     About Cell Therapeutics

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

                        Going Concern Doubt

Stonefield Josephson Inc. in Los Angeles, California, expressed
substantial doubt about Cell Therapeutics Inc.'s ability to
continue as a going concern after auditing company's financial
statements for the year ended Dec. 31, 2007.  The auditing firm
reported that the company has substantial monetary liabilities in
excess of monetary assets as of Dec. 31, 2007, including
approximately $19.8 million of convertible subordinated notes and
senior subordinated notes which mature in June 2008.

The Troubled Company Reporter reported on Nov. 26, 2008, Cell
Therapeutics, Inc.'s balance sheet as of Sept. 30, 2008,
showed total assets of $93,746,000 and total liabilities of
$218,723,000, resulting in total shareholders' deficit of
$133,380,000.

For the three months ended September 30, 2008, the company posted
a net loss of $45,589,000 on total revenues of $2,600,000,
compared with a net loss of $48,471,000 on total revenues of
$20,000 for the same period a year earlier.

James A. Bianco, M.D., the company's chief executive officer,
relates that Cell Therapeutics has incurred losses since inception
and it expects to generate losses from operations for at least the
next year primarily due to research and development costs for
Zevalin, OPAXIO (paclitaxel poliglumex), pixantrone and
brostallicin.

"Our available cash and cash equivalents, securities available-
for-sale and interest receivable are approximately $11.7 million
as of Sept. 30, 2008.  In addition, in October 2008 we issued
$24.7 million of 9.66% convertible senior notes, or 9.66% notes,
for net proceeds, before fees and expenses, of $7.5 million after
taking into account $7.2 million placed in escrow to fund make-
whole payments and interest payments on the notes, our repurchase
of $18.2 million of our 15% notes as well as $8.2 million in cash
released from escrow related to the repurchased notes.  Even with
this additional financing, we will not have sufficient cash to
fund our planned operations through the end of the fourth quarter,
which raises substantial doubt about our ability to continue as a
going concern," Dr. Bianco says.  "Accordingly, we have
implemented cost saving initiatives to reduce operating expenses
and we continue to seek additional areas for cost reductions.
However, we will also need to raise additional funds and are
currently exploring alternative sources of equity or debt
financing."


CELL THERAPEUTICS: Receives Additional Nasdaq Notification
----------------------------------------------------------
On January 23, 2009, Cell Therapeutics, Inc., received an
Additional Staff Determination from The NASDAQ Stock Market
stating that the staff had concluded that the Company's recent
issuance of 38,185,911 shares of common stock in connection with
an amendment to the "earn-out" provision of the Acquisition
Agreement, dated as of July 27, 2007, by and among the
Corporation, Cactus Acquisition Corp., Saguaro Acquisition
Corporation LLC, Systems Medicine, Inc., and Tom Hornaday and Lon
Smith, in their capacities as representatives of the SMI
stockholders, whereby the Company acquired Systems Medicine, Inc.,
in a stock-for-stock merger, did not comply with the shareholder
approval requirements set forth in NASDAQ Marketplace Rule
4350(i)(1)(C).  Marketplace Rule 4350(i)(1)(C) requires
shareholder approval in connection with an acquisition if the
issuance or potential issuance is greater than 20% of the pre-
acquisition shares outstanding.

In response to the concerns raised by the NASDAQ staff, the
Company entered into a Cancellation Agreement dated January 23,
2009, with the Stockholder Representatives to cancel the Amendment
and rescind the issuance of the 38,185,911 shares and to reinstate
the original terms of the "earn-out" provision without
modification.

The Determination Letter also indicated that the Company has at
times not complied with Marketplace Rule 4310(c)(17), which
requires companies to submit a "Listing of Additional Shares" form
to NASDAQ no later than 15 days prior to entering into a
transaction that involves the issuance of additional securities,
including the form that was submitted in connection with the
Amendment, and based upon the Company's history of non-compliance
with certain of NASDAQ's corporate governance criteria, indicated
that the Staff had raised public interest concerns under
Marketplace Rule 4300.

The NASDAQ Listing Qualifications Panel recently granted the
Company's request to transfer the listing of its common stock from
The NASDAQ Global Market to The NASDAQ Capital Market, subject to
the Company evidencing compliance with all applicable requirements
for continued listing on The NASDAQ Capital Market, including the
$35 million market value of listed securities requirement or its
alternatives, by February 12, 2009.  The Determination Letter
provided formal notice that the Panel will consider the additional
matters raised by the Staff in rendering a determination regarding
the Company's continued listing on The NASDAQ Capital Market.
Pursuant to Marketplace Rule 4804(c), the Company will present its
views with respect to those matters for the Panel's review no
later than January 30, 2009.

                           Other Updates

On January 27, 2009, the Company disclosed that after
communication with the Food and Drug Administration, it expects to
begin submission of a rolling New Drug Application and request
priority review for pixantrone to treat relapsed aggressive non-
Hodgkin's lymphoma in the first quarter of 2009.

On January 28, 2009, the Company disclosed preliminary
progression-free survival results from its pivotal phase III
EXTEND trial of pixantrone that show patients with advanced,
relapsed aggressive non-Hodgkin's lymphoma (NHL) treated with
pixantrone experienced a statistically significant improvement in
median progression-free survival, compared with other single-agent
chemotherapeutic agents (4.7 months vs. 2.6 months, p < 0.01,
pixantrone vs. standard chemotherapy) based on an intent to treat
analysis.  PFS was a prospectively defined secondary endpoint in
the study.

By settlement agreement dated as of January 28, 2009, the Company
agreed to pay within three court days a total amount of $494,500
to settle all outstanding claims for attorneys' fees and expenses
-- these claims were previously disclosed to total $1.4 million --
by the qui tam Relator, in connection with an investigation by the
United States Attorney's Office into certain of the Company's
prior marketing practices relating to TRISENOX(R) (arsenic
trioxide).  This agreement fully and finally resolves all
remaining claims in the civil action.  The Company's separate
action seeking indemnification for all losses incurred in the qui
tam action is pending in the Ninth Circuit Court of Appeals.

As of January 28, 2009, the Company has 295,943,993 shares of its
common stock, no par value, issued and outstanding.

                     About Cell Therapeutics

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

                        Going Concern Doubt

Stonefield Josephson Inc. in Los Angeles, California, expressed
substantial doubt about Cell Therapeutics Inc.'s ability to
continue as a going concern after auditing company's financial
statements for the year ended Dec. 31, 2007.  The auditing firm
reported that the company has substantial monetary liabilities in
excess of monetary assets as of Dec. 31, 2007, including
approximately $19.8 million of convertible subordinated notes and
senior subordinated notes which mature in June 2008.

The Troubled Company Reporter reported on Nov. 26, 2008, Cell
Therapeutics, Inc.'s balance sheet as of Sept. 30, 2008,
showed total assets of $93,746,000 and total liabilities of
$218,723,000, resulting in total shareholders' deficit of
$133,380,000.

For the three months ended September 30, 2008, the company posted
a net loss of $45,589,000 on total revenues of $2,600,000,
compared with a net loss of $48,471,000 on total revenues of
$20,000 for the same period a year earlier.

James A. Bianco, M.D., the company's chief executive officer,
relates that Cell Therapeutics has incurred losses since inception
and it expects to generate losses from operations for at least the
next year primarily due to research and development costs for
Zevalin, OPAXIO (paclitaxel poliglumex), pixantrone and
brostallicin.

"Our available cash and cash equivalents, securities available-
for-sale and interest receivable are approximately $11.7 million
as of Sept. 30, 2008.  In addition, in October 2008 we issued
$24.7 million of 9.66% convertible senior notes, or 9.66% notes,
for net proceeds, before fees and expenses, of $7.5 million after
taking into account $7.2 million placed in escrow to fund make-
whole payments and interest payments on the notes, our repurchase
of $18.2 million of our 15% notes as well as $8.2 million in cash
released from escrow related to the repurchased notes.  Even with
this additional financing, we will not have sufficient cash to
fund our planned operations through the end of the fourth quarter,
which raises substantial doubt about our ability to continue as a
going concern," Dr. Bianco says.  "Accordingly, we have
implemented cost saving initiatives to reduce operating expenses
and we continue to seek additional areas for cost reductions.
However, we will also need to raise additional funds and are
currently exploring alternative sources of equity or debt
financing."


CFM US: Plan Filing Deadline Pushed Back to February 6
------------------------------------------------------
CFM U.S. Corp., and its affiliates have obtained a short extension
of their exclusive period to file a Chapter 11 plan.  According to
Bloomberg's Bill Rochelle, CFM reached an agreement with its
committee of unsecured creditors to extend its plan filing
deadline from Jan. 31 to Feb. 6.

The Creditors Committee and other parties-in-interest will be
entitled to file a plan for CFM on their own if CFM does not file
a plan by Feb. 6 or if it does not receive another extension.

CFM earlier obtained a Jan. 31 extension of its exclusive period
to file a liquidating Chapter 11 plan.

The Bankruptcy Court held that the creditors' committee may file a
plan if the company doesn't submit a Plan by the new deadline.

CFM announced in December that a settlement was reached in a
lawsuit brought by the creditors' committee against Ontario
Teachers Pension Plan Board, the head of a group that took the
company private in April 2005.  The settlement, according to Mr.
Rochelle's report, is to provide the foundation for a liquidating
Chapter 11 plan to be filed by the end of January.

The settlement and plan will also provide for wrapping up
proceedings begun simultaneously in Canada for protection from
creditors in the Ontario Court of Justice under the Companies'
Creditors Arrangement Act.

CFM has consummated the sale of substantially all of its assets.
According to Bloomberg, CFM was authorized in July to sell most of
the assets for $42.5 million after selling other assets in May to
two buyers for $4.6 million. It was permitted in August to sell
real estate in Huntington, Indiana, for $2 million.

Headquartered in Huntington, Indiana, CFM U.S. Corp. --
http://www.majesticproducts.com/-- manufactures two product
categories: Hearth and Heating Products and Barbecue and Outdoor
Products.  The company and its affiliate, CFM Majestic U.S.
Holdings, Inc., filed for chapter 11 protection on April 9,
2008 (Bankr. D. Del. Lead Case No. 08-10668).  William Pierce
Bowden, Esq., at Ashby & Geddes, represents the Debtors.  The
Debtors selected Administar Services Group LLC as their claims
agent.  The U.S. Trustee for Region 3 appointed seven creditors to
serve on an Official Committee of Unsecured Creditors.  Patrick J.
Reilley, Esq., at Cole Schotz Meisel Forman & Leonard, P.A.,
represents the Committee in these cases.  As reported in the
Troubled Company Reporter on June 18, 2008, the Debtors' summary
of schedules showed total assets of $91,316,300 and total debts of
$32,7367,890.


CHRYSLER LLC: Sales Down 55% to 62,157 Units in January 2009
------------------------------------------------------------
Chrysler LLC reported total January 2009 U.S. sales of 62,157
units, down 55 percent versus the same month in 2008 (137,392
units), and down 31 percent from December 2008 (89,813 units).
Total sales were suppressed by a significant reduction in fleet
sales, which is aligned with the company's sales strategy helping
to maintain or improve the overall residual value of Chrysler
vehicles for its customers.  Fleet sales were down 81 percent for
January compared to the same time last year.

"Chrysler LLC received the first $4 billion installment of our
$7 billion bridge loan from the U.S. Treasury in early January,"
said Chrysler President and Vice Chairperson Jim Press.  "However,
it wasn't until later in the month that Chrysler Financial
received its $1.5 billion loan, greatly enhancing its ability to
support our dealers and provide credit to our customers.  We were
very encouraged and working closely with Chrysler Financial, were
immediately able to introduce our zero percent financing for
customers."

Press emphasized the financial crisis still looms and must be
modified to allow dealers to stock more vehicles and to provide
customers with the financing to purchase those vehicles.  "While
the government has made funds available to stimulate the market,
these funds carry limitations, including stringent lending
guidelines and conduit restrictions.  At the same time, many
financial lenders are also operating with tighter standards and
significantly increased reserves to hold their credit rating.  All
these factors have limited the amount of funds that the financial
institutions can make available to consumers for the purchase of
Chrysler vehicles, making it more difficult for us to close
sales," he said.

January Sales Highlights

     -- Jeep(R) Wrangler sales increased 4 percent (6,362 units)
        compared to January 2008 (6,137 units).

     -- Dodge Journey sales continued to climb as sales reached
        3,092 units.

     -- Dodge Challenger sales reached 2,757 units, up 6 percent
        over December 2008.

     -- Dodge Avenger sales increased 6 percent (2,171 units)
        versus December 2008.

     -- The company finished the month with 359,980 units of
        inventory, or a 151-day supply.  Inventory is down 13
        percent compared with January 2008, when it totaled
        413,874 units.

"Consumer credit, versus consumer demand, influenced our January
retail results.  We saw a negative trend in December, we're seeing
it again this month and we could see it for the year.  Many more
consumers wanted to buy a vehicle than could qualify for financing
under the current credit conditions," said Steven Landry,
Executive Vice President, Sales, Marketing, MOPAR Parts and
Service.  "But, even though the economic environment remains
extraordinarily difficult, near the end of the month we began to
gain some sales traction with zero percent financing available
through Chrysler Financial, and the addition of our new Chrysler
Employee Pricing Plus Plus incentive."

Chrysler estimated in its submission to Congress last year that
the industry would sell 11.1 million units during calendar year
2009.  However, the company currently believes that if the January
trend for the SAAR continues, the industry could see
10 million units or fewer sold during the year, due to the
reduction of consumer credit and tightening of the lending
standards.

     -- Dealer retail was down 35 percent, compared to industry
        retail, which was down 30 percent.

     -- Fleet sales dropped 81 percent from last January, as
        outlined in the company's viability plan.

     -- Inventory reduction and day supply was very helpful to
        our dealers in reducing floorplan costs.

February Incentives

Chrysler will continue the Employee Pricing Plus Plus program
through February, which offers the employee price to all customers
purchasing or leasing a new 2008 or 2009 Chrysler, Jeep(R) or
Dodge vehicle.  In addition to the employee price, customers are
eligible for cash discounts of up to $3,500 for 2009 model year
vehicles and up to $6,000 on 2008 model year vehicles.  Chrysler
Financial is also offering zero percent financing to qualified
customers for up to 48 months.  Other finance terms and rates are
also available.

                       About Chrysler LLC

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

                         *     *     *

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

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

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

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


CITIGROUP INC: Releases 1st TARP Use Quarterly Progress Report
--------------------------------------------------------------
Citigroup Inc. has issued its first quarterly progress report
detailing the deployment of the $45 billion of capital the U.S.
Treasury invested in the company as part of the federal
government's TARP.  The report, which covers the fourth quarter of
2008, is titled, "What Citi is Doing to Expand the Flow of Credit,
Support Homeowners and Help the U.S. Economy."

Citigroup's goals in deploying TARP capital are:

     -- to help expand available credit for consumers and
        businesses;

     -- restore liquidity and stability to the capital markets;
        and

     -- support the recovery of the U.S. economy.

The report is available for free at:

             http://ResearchArchives.com/t/s?3916

The report describes the procedures Citigroup has established to
oversee its deployment of TARP capital, as well as other efforts
the company is making to help Americans remain in their homes,
assist distressed borrowers and support U.S. businesses and
communities.  Citigroup will update the report each quarter

Citigroup CEO Vikram Pandit said, "Americans from all walks of
life are facing real economic hardship, and Citi must do whatever
we can to help them.  Our responsibility is to put TARP capital to
work quickly, prudently, and transparently to support U.S.
consumers, businesses and our communities during these challenging
times.

"To this end, Citi is working in partnership with the Government
to increase available lending and liquidity in the U.S financial
markets and to help put the U.S. economy back on track," Mr.
Pandit added.  "We have already approved $36.5 billion in
initiatives backed by TARP capital that are consistent with the
objectives and spirit of the Treasury program.  And, as part of
our ongoing business, Citi continues to lend to consumers and
businesses in the United States, where we extended approximately
$75 billion in new loans during the fourth quarter."

Citigroup continues to focus on supporting the U.S. housing
market.  Since the start of the housing crisis in 2007, Citigroup
has worked successfully with approximately 440,000 homeowners,
whose combined mortgages total approximately $43 billion, to avoid
potential foreclosure.  Last year, Citigroup was able to keep
approximately four out of five distressed borrowers with mortgages
serviced by Citigroup in their homes.

Additionally, Citigroup is adopting the streamlined model for
post-delinquency loan modification programs developed by the
Federal Deposit Insurance Corporation.  Through the Citigroup
Homeowner Assistance Program, the company continues to reach out
to families and individuals who may be experiencing some form of
economic stress despite being current on their payments.
Citigroup is also continuing its foreclosure moratorium for
eligible borrowers with Citigroup-owned mortgages who seek to
remain in their primary residence and have sufficient income to
make affordable mortgage payments.  Citigroup has worked with
investors and owners of more than 90 percent of the 4.3 million
mortgages it services -- but does not own -- to make sure that
many more qualified borrowers can also receive the benefits of
this moratorium.

Shortly after Citigroup received the initial TARP investment, the
company created a Special TARP Committee of senior executives to
approve and track how the company uses these funds.  In the fourth
quarter of 2008, the Committee authorized $36.5 billion for
initiatives across its various businesses.

In the first stage of primary lending and secondary market
activities directly linked to the TARP investments, Citigroup is
putting capital to work in these five major areas:

     * U.S. residential mortgage activities -- $25.7 billion
          -- Citigroup is making mortgage loans directly to
             homebuyers and supporting the housing market through
             the purchase of prime residential mortgages and
             mortgage-backed securities in the secondary market.

    * Personal and business loans -- $2.5 billion
          -- This includes $1.5 billion of consumer lending and
             $1.0 billion for tailored loans to people and
             businesses facing liquidity problems.

    * Student loans -- $1 billion
          -- Citigroup is originating student loans through the
             Federal Family Education Loan Program (FFELP).

    * Credit card lending -- $5.8 billion
          -- Citigroup is offering special credit card programs
             that include expanded eligibility for balance-
             consolidation offers, targeted increases in credit
             lines and targeted new account originations.

    * Corporate loan activity -- $1.5 billion
          -- Citigroup is investing $1.5 billion in commercial
             loan securitizations, which will inject much needed
             liquidity into the U.S. corporate loan market.

Citigroup, the leading global financial services company, has some
200 million customer accounts and does business in more than 100
countries, providing consumers, corporations, governments and
institutions with a broad range of financial products and
services, including consumer banking and credit, corporate and
investment banking, securities brokerage, and wealth management.
Citigroup's major brand names include Citibank, CitiFinancial,
Primerica, Smith Barney, Banamex, and Nikko.

The Wall Street Journal reports that Mr. Pandit and other bank
CEOs will likely to be interrogated by the House committee next
week on how they use the taxpayer-funded capital through TARP.
Some Citigroup executives, states the report, are urging that the
firm scale back its advertising expenses to avoid public
controversy.

According to WSJ, Citigroup has recently been purchasing full-page
ads in some major newspapers, touting its stability and lending.

The New York Post relates that Citigroup was also planning last
week to buy an expensive new luxury jet.  Citigroup, WSJ states,
was allegedly using a portion of its TARP funds to pay for the new
jet.  At first, Citigroup defended its plans, arguing that it
placed the jet order in 2005 and that canceling the purchase would
lead to millions of dollars of penalties, says WSJ.  The new jet
was supposed to replace two old planes that Citigroup had put up
for sale, WSJ reports.  Citigroup nixed the order under pressure
from Treasury officials, according to WSJ.

                       About Citigroup

Based in New York, Citigroup (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.


CITIGROUP INC: Mulls Backing Out of New York Mets Marketing Deal
----------------------------------------------------------------
Citigroup Inc. is considering withdrawing from an almost
$400 million marketing deal with the New York Mets, to stop the
controversy on how lenders are using government bailout money,
David Enrich, Matthew Futterman, and Damian Paletta at The Wall
Street Journal report, citing people familiar with the matter.

According to WSJ, the sources said that the 20-year agreement
between Citigroup and Mets includes naming the Mets' new baseball
stadium after Citigroup.  WSJ states that the Mets deal calls for
Citigroup to pay the team about $20 million per year over two
decades.  The arrangement, says WSJ, helped cover the costs of
building the Citi Field stadium.  Citigroup underwrote more than
$600 million in bonds for the stadium, according to the report.

Citigroup said in a statement, "No TARP [Troubled Asset Relief
Program] capital will be used" for the stadium.  Citigroup,
according to WSJ, has acknowledged that the volatile political
climate could make it untenable for the bank to proceed with the
Metsdeal.

WSJ relates that Reps. Dennis Kucinich and Ted Poe wrote to
Treasury Secretary Timothy Geithner last week, asking him to push
Citigroup to dissolve the Mets deal, as the deal was an example of
misplaced spending by financial institutions that needed bailout
funds.  The report quoted Messrs. Kucinich and Poe as saying,
"Citigroup is now dependent on the support of the federal
government for its survival as an institution.  As such, we do not
believe Citigroup ought to spend $400 million to name a stadium at
the same time that they accept over $350 billion in taxpayer
support and guarantees."

Citing people familiar with the matter, WSJ reports that Citigroup
would likely pay a breakup penalty to Mets if it decides to back
out of the agreement.  According to the report, a Citigroup
spokesperson said that the bank "signed a legally binding
agreement with the New York Mets in 2006."

Some Citigroup executives, WSJ relates, disagreed with cutting off
the deal.  WSJ quoted a Citigroup official as saying, "If we cave
for political reasons, it will have enormous implications for our
ability to contract with third parties."

                       About Citigroup

Based in New York, Citigroup (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.


CLEARWATER NATURAL: Section 341(a) Meeting Set for February 9
-------------------------------------------------------------
Rirchard Clippard, the United States Trustee for Region 8, will
convene a meeting of creditors of Clearwater Natural Resources LP
on Feb. 9, 2009, at 10:30 a.m., in room 529, 100 E. Vine Street,
5th floor in Lexington, Kentucky.

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

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

                     About Clearwater Natural

Headquartered in Kansas City, Missouri, Clearwater Natural
Resources LP engages in coal mining in the Central Appalachian
region.  In August 2005, the company acquired 100% interest in
Miller Bros. that became a wholly-owned operating subsidiary of
the company.  The company also acquired in October 2006 all
interest in Knott Floyd Land Company, a medium scale coal mining
company and its operations were subsequently consolidated into
Miller.  Through Miller, the company produces and sells coal from
eleven mining operations in Eastern Kentucky and provide contracts
mining services for two third-party owned mines located within the
Appalachian region.  The company and two of its affiliates,
Clearwater Natural Resources LLC and Miller Bros. Coal LLC, filed
for January 7, 2009 (Bankr. E.D. Kent. Lead Case No. 09-70011).
Mary L. Fullington, Esq., at Wyatt, Tarrant & Combs LLP, and
Vinson & Elkins LLP, represent the Debtors in their restructuring
efforts.  The Debtors proposed Administar Services Group LLC as
their restructuring efforts.  Rirchard Clippard, the United States
Trustee for Region 8, appointed three creditors to serve on an
official committee of unsecured creditors.  When the Debtors filed
for protection from their creditors, they listed assets and debts
between $100 million and $500 million each.


CLEARWATER NATURAL: Wants Asset Sale Bidding Procedures Approved
----------------------------------------------------------------
Clearwater Natural Resources LP and its debtor-affiliates ask the
United States Bankruptcy Court for the Eastern District of
Kentucky to approved a proposed bidding procedures for the sale of
substantially all of their operating assets -- including the
assumption and assignment of certain executory contracts and
unexpired leases -- subject to competitive bidding and auction.

The Debtors will present the request before the Court on Feb. 9,
2009, at 2:00 p.m., to consider approval.

The Debtors propose that all bids for their assets must be
submitted by June 8, 2009, at 5:00 p.m. (prevailing Eastern time)
to Thomas B. Hensley of Parkman Whaling LLC in Houston, Texas,
with a copy to:

   i) Debtors' counsel, Tonya M. Ramsey, Esq., of Vinson & Elkins
      L.L.P. in Dallas, Texas; and

  ii) Ron M. Logan, the Debtors' chief restructuring officer, 717
      Texas Avenue in Houston, Texas.

An auction will take place on June 15, 2009, at 10:00 a.m., at the
offices of Vinson & Elkins followed by a sale hearing on
June 19, 2009, the Debtors say.  The sale is expected to close by
June 30, 2009, the Debtors note.

The Debtors propose a 3% break-up in the event they consummate the
sale to another party.

Bank of America, agent of the senior secured lenders including
under a certain credit agreement dated Oct. 2, 2006, is allowed to
bid for the Debtors' assets.  Other secured lenders are Royal Bank
of Canada, Guaranty Bank, Caterpillar Financial Service Corp., UBS
Loan Finance LLC, and NM Rothschild & Sons Ltd.

The Debtors tap Park Whaling LLC to serve as their investment bank
and financial advisor, and to assist them in securing a purchaser
for their assets.

                     About Clearwater Natural

Headquartered in Kansas City, Missouri, Clearwater Natural
Resources LP engages in coal mining in the Central Appalachian
region.  In August 2005, the company acquired 100% interest in
Miller Bros. that became a wholly-owned operating subsidiary of
the company.  The company also acquired in October 2006 all
interest in Knott Floyd Land Company, a medium scale coal mining
company and its operations were subsequently consolidated into
Miller.  Through Miller, the company produces and sells coal from
eleven mining operations in Eastern Kentucky and provide contracts
mining services for two third-party owned mines located within the
Appalachian region.  The company and two of its affiliates,
Clearwater Natural Resources LLC and Miller Bros. Coal LLC, filed
for January 7, 2009 (Bankr. E.D. Kent. Lead Case No. 09-70011).
Mary L. Fullington, Esq., at Wyatt, Tarrant & Combs LLP, and
Vinson & Elkins LLP, represent the Debtors in their restructuring
efforts.  The Debtors proposed Administar Services Group LLC as
their restructuring efforts.  Rirchard Clippard, the United States
Trustee for Region 8, appointed three creditors to serve on an
official committee of unsecured creditors.  When the Debtors filed
for protection from their creditors, they listed assets and debts
between $100 million and $500 million each.


CMR MORTGAGE: Downsizes, Removes Manager's CEO and CFO Positions
----------------------------------------------------------------
CMR Mortgage Fund II disclosed in a regulatory filing that as part
of a company-wide downsizing, the positions of chief executive
officer and chief financial officer will be eliminated.  James
Gala, the CEO and CFO of California Mortgage and Realty, Inc., the
manager of CMR Mortgage Fund II, LLC, will leave the manager on or
before March 31, 2009.

At the time of Mr. Gala's departure, the manager will have only
one executive officer, David Choo, its president and sole
director, that with Mr. Gala's departure Mr. Choo will effectively
assume the functions of principal executive officer, principal
financial officer and principal accounting officer.  Information
with respect to Mr. Choo's business experience and transactions
between Mr. Choo, the manager and the Fund have been reported by
the Fund in its filings with the SEC.

CMR Mortgage Fund II, LLC, is a California limited liability
company formed on Sept. 5, 2003, for the purpose of making or
investing in business loans secured by deeds of trust or mortgages
on real properties located primarily in California.  The real
properties predominantly consist of land held by businesses or
individuals, or commercial buildings.  The land can be income-
producing or may be held for commercial or residential
development.  Currently, most of the land securing the Fund's
loans are held for development or is in some stage of application
for development entitlements or building permits.  Its loans are
arranged and serviced by a managing company, California Mortgage
and Realty,Inc., a Delaware corporation, which is licensed as a
California real estate broker and a California finance lender.

                       Going Concern Doubt

As reported in the Troubled Company Reporter on Aug. 14, 2008,
Perry-Smith LLP raised on July 21, 2008, substantial doubt about
the ability of CMR Mortgage Fund II, LLC, which is managed by
California Mortgage and Realty, Inc., to continue as a going
concern after auditing the Fund's financial statements for the
year ended Dec. 31, 2007.

The auditor reported that the Fund has experienced a significant
decrease in cash flows.  In addition, a number of the Fund's loans
are in default.  The Fund's illiquid position may prevent the Fund
from protecting its position with respect to the property securing
the defaulted loans.


CMS ENERGY: Fitch Affirms 'BB+' Long-Term Issuer Default Rating
---------------------------------------------------------------
Fitch has affirmed the ratings for CMS Energy Co. and Consumers
Energy Co.:

CMS

  -- Long Term Issuer Default Rating at 'BB+';
  -- Senior Secured Bank Facility at 'BBB-';
  -- Senior Unsecured Debt at 'BB+';
  -- Preferred Stock at 'BB'.

CMS Energy Trust I

  -- Preferred Stock at 'BB'

Consumers

  -- Long Term IDR at 'BBB-';
  -- Senior Secured Debt at 'BBB+';
  -- Senior unsecured debt at 'BBB';
  -- Preferred Stock at 'BBB-'

The Outlook for both CMS and Consumers is Stable. Approximately
$6.3 billion of debt is affected.

The ratings for CMS are primarily supported by the cash flows of
its regulated electric and gas utility, Consumers.  Consumers
benefits from solid credit protection measures, stable operating
performance, and a more constructive legislative and regulatory
environment in Michigan.  CMS is highly dependent on Consumers'
cash distributions to service parent debt obligations.  The
utility received regulatory outcomes in its 2008 electric and gas
rate filings that were generally in line with Fitch's
expectations.  As is consistent with the company's strategy to
file rate cases at regular intervals, Consumers filed for a
$214 million increase in electric rates and an 11% return on
equity in November 2008.  A decision by the Michigan Public
Service Commission is required by November 2009, and the utility
has the ability to self-implement new rates, subject to refund, in
May 2009.

Fitch's ratings and Stable Outlook for CMS and Consumers
incorporate a balanced outcome in the electric rate case.

CMS continues to post improving credit metrics following several
years of asset divestitures to pay down legacy parent level debt.
For the 12-month period ended Sept. 30, 2008, CMS' ratio of
ongoing EBITDA to interest and cash flow interest coverage was 2.4
times (x) and 3.1x, respectively. Leverage, as measured by debt to
EBITDA, was high at 7.1x for the same time period.  Consumers'
credit ratios are strong for the 'BBB+' category, with the ratio
of EBITDA to interest at 5.4x and cash flow interest coverage at
6.3x for the 12-month period ended Sept. 30, 2008.  Leverage was
moderate at 3.4x for the same time period.  Credit protection
measures are forecasted by Fitch to remain at or near current
levels over the ratings horizon, assuming reasonable outcomes in
regulatory rate cases.

Rating concerns facing the company primarily relate to the
declining economy in Michigan, driven by the continued weakening
of the automotive sector, as well as upcoming debt maturities at
Consumers in 2009 and 2010.  Unemployment in the state was the
highest in the U.S. at 10.6% as of Dec. 31, 2008, compared with a
national average of 7.2%.  Consumers' exposure to the automotive
industry is somewhat limited, with the sector comprising 5% of
sales and only 3% of margin.  The largest auto customers are
General Motors Corp. (rated 'C' by Fitch) and Delphi; Consumers
has minimal sales to Ford (IDR 'CCC-', Negative Outlook) or
Chrysler (IDR 'C').  Favorably, the company is seeing expansions
in other industries, such as alternative energy manufacturing,
that are partially offsetting the weakness in the auto sector.
Nonetheless, Fitch expects flat to declining sales growth in the
electric and gas sectors over the next two years.  Consumers'
level of uncollectibles remains manageable.  The company intends
to seek funds from Michigan's low-income energy assistance effort
to maintain uncollectibles at their current levels.

Consumers has $350 million of first mortgage bonds due in 2009,
and $308 million of FMBs due in 2010.  The company is currently
planning to refinance these issuances in the credit markets, but
if conditions are unfavorable, management intends to use available
capacity under the utility's credit facilities, as well as cash
infusions from the parent company, to fund maturing debt.

Due to recent weak financial asset returns in 2008, CMS' defined
benefit pension plan faces a significant funding shortfall in
2009.  The company plans to make $300 million in cash
contributions throughout the year.  It will fund these
contributions with internally generated cash flows at Consumers,
which has benefitted from low commodity prices and decreased
capital spending.  In its November 2008 electric rate case filing,
Consumers is seeking regulatory recovery for a majority of these
pension costs.

In October 2008, Governor Jennifer Granholm signed into a law new
legislation that had a significant impact on the electricity
regulatory framework in the state of Michigan.  Overall, Fitch
considers the legislation to be supportive of the credit of
investor-owned electric utilities operating within the state
because it would increase certainty of cost recovery and reduce
regulatory lag.  The new law includes a certificate of need
process for capital projects that cost more than $500 million and
a 10% cap on customer choice.

Consumers filed for a $214 million increase in electric rates and
an 11% return on equity on Nov. 14, 2008.  Under the new
legislation, the MPSC must render a final decision by Nov. 19,
2009 and the utility has the ability to self-implement new rates,
subject to refund, in April 2009.  Consumers' most recent rate
order was received in June 2008, when the MPSC authorized a
$221 million increase in electric base rates and an allowed 10.70%
ROE.  In December 2008, the MPSC approved a settlement agreement
in the utility's gas rate case, which provided for a $22.4 million
increase and an ROE of 10.55%.  Consumers agreed to not file a new
gas general rate case prior to May 1, 2009.

CMS is a utility holding company whose primary subsidiary is
Consumers, a regulated electric and gas utility serving more than
3.5 million customers in Western Michigan.  CMS also has
operations in natural gas pipelines and independent power
production.


CONCORD CAMERA: Zeff Capital Discloses 4.4% Equity Stake
--------------------------------------------------------
In a filing with the Securities and Exchange Commission, four
related companies disclosed that they may be deemed to
beneficially own Concord Camera Corp.'s shares of common stock:

                                       Shares
                                       Beneficially
   Company                             Owned         Percentage
   -------                             ------------  ----------
Daniel Zeff                            386,971          6.5%
Spectrum Galaxy Fund Ltd.              129,147          2.2%
Zeff Capital Partners I, L.P.           257,824         4.4%
Zeff Holding Company, LLC               257,824         4.4%

At Nov. 10, 2008, the company's outstanding common stock, no par
value was 5,913,610.

A full-text copy of the Schedule 13G document filed by Zeff, et
al., is available for free at:

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

                     About Concord Camera Corp.

Headquartered in Hollywood, Florida, Concord Camera Corp.
(NASDAQ:LENS) -- http://www.concord-camera.com/-- through its
subsidiaries, provides easy-to-use 35mm single-use and traditional
film cameras.  Concord markets and sells its cameras on a private-
label basis and under the POLAROID and POLAROID FUNSHOOTER brands
through in-house sales and marketing personnel and independent
sales representatives.  The POLAROID trademark is owned by
Polaroid Corporation and is used by Concord under license from
Polaroid.

The Troubled Company Reporter reported on November 3, 2008, that
the Plan of Liquidation contemplates an orderly wind down of the
company's business and operations, the monetization of the
company's non-cash assets, the satisfaction or settlement of its
remaining liabilities and obligations and one or more
distributions to its shareholders.  In connection with the board's
approval of the Plan of Liquidation, the company also said that it
has ceased manufacturing and terminated certain of its employees
and, if the company's shareholders approve the Plan of
Liquidation, will terminate its remaining employees throughout the
wind down period.

The TCR added that if the company's shareholders approve the Plan
of Liquidation, the company intends to file a certificate of
dissolution, sell and monetize its non-cash assets, satisfy or
settle its remaining liabilities and obligations, including
contingent liabilities and claims, and make one or more
distributions to its shareholders of cash available for
distribution.  In connection with the shareholder approval of the
Plan of Liquidation, the company expects to delist its shares from
NASDAQ.


CONEXANT SYSTEMS: Reports Results for 1st Quarter of Fiscal 2009
----------------------------------------------------------------
Conexant Systems, Inc. (NASDAQ: CNXT), disclosed on January 29,
2009, financial results for the first quarter of fiscal 2009 that
were in line with updated guidance provided on Dec. 15, 2008.  The
company also completed expense-reduction actions that are expected
to save approximately $4 million per quarter.

               First Fiscal Quarter Financial Results

Revenues for the first quarter of fiscal 2009 were $86.5 million.
Core gross margins were 54.1 percent of revenues.  Core operating
expenses were $43.5 million, and core operating income was
$3.3 million.  Core net loss from continuing operations was
$2.9 million, or $0.06 per share.

On a GAAP basis, gross margins were 53.4 percent of revenues. GAAP
operating expenses were $46.5 million.  GAAP operating loss was
$0.4 million, and GAAP net loss from continuing operations was
$10.5 million, or $0.21 per share.

The company ended the quarter with $110.3 million in cash and cash
equivalents, a sequential increase of approximately
$4.4 million.

For the quarter ended January 2, 2009, the company posted a net
loss of $17.6 million.

As of January 2, 2009, the company's balance sheet showed total
assets of $419.8 million and total liabilities of $572.8 million,
resulting in total shareholders' deficit of $152.9 million.

                     Expense-reduction Actions

The company recently completed actions that resulted in the
elimination of approximately 140 positions worldwide, which
represented a total headcount reduction of more than 11 percent.
Conexant also announced that it has suspended the company match
for the domestic 401(k) plan and imposed stringent restrictions on
spending.

In total, the company expects to save approximately $4 million per
quarter when it realizes the full benefit of the headcount
reductions in the June-ending third quarter of fiscal 2009.

                       Business Perspective

"In an environment where we continued to see customer push-outs
and cancellations, I'm pleased to report that we met the updated
guidance we provided in December," said Scott Mercer, Conexant's
chairman and chief executive officer.  "Revenues of $86.5 million
were consistent with the range we anticipated, and core gross
margins of 54.1 percent of revenues were at the high end of our
revised expectations.  Core operating income of $3.3 million and a
core net loss from continuing operations of $2.9 million, or $0.06
per share, were also within the ranges we expected.

"The worldwide economic crisis that has impacted the financial
performance of many of our peers, customers, and suppliers has
dramatically affected us as well," Mercer said. "In response to
our declining revenues and deteriorating financial performance, we
recently completed cost-reduction actions that included a
significant headcount reduction. This reduction will not affect
any of our major product-development programs. By keeping our
teams and investments essentially intact, we put ourselves in a
position to gain market share when the economic recovery
eventually begins. Until then, we will continue to focus on
contributing to the success of our customers by delivering
innovative products on schedule."

                         Business Outlook

Conexant expects revenues for the second quarter of fiscal 2009 to
be in a range between $68 million and $74 million, or 14 to 21
percent lower sequentially, as a result of the effects of the
overall economic environment. Core gross margins for the second
fiscal quarter are expected to be between 52 and 53 percent of
revenues. The company expects core operating expenses to be
approximately $42 million. As a result, the company anticipates
that the second fiscal quarter core operating loss will be in a
range between $3 million and $7 million. Core net loss is expected
to be between $0.18 and $0.26 per share.

A full-text copy of the company's press release and selected
financial data is available for free at:

               http://researcharchives.com/t/s?390e

                         About Conexant

Headquartered in Newport Beach, California, Conexant Systems, Inc.
(NASDAQ: CNXT) -- http://www.conexant.com/-- has a comprehensive
portfolio of innovative semiconductor solutions which includes
products for Internet connectivity, digital imaging, and media
processing applications.  Conexant is a fabless semiconductor
company that recorded revenues of
$809.0 million in fiscal year 2007.  Outside the United States,
the company has subsidiaries in Northern Ireland, China, Barbados,
Korea, Mauritius, Hong Kong, France, Germany, the United Kingdom,
Iceland, India, Israel, Japan, Netherlands, Singapore and Israel.


CONSTAR INTERNATIONAL: Court Sets March 30 as Claims Bard Date
--------------------------------------------------------------
The Hon. Peter J. Walsh of the United States Bankruptcy Court for
the District of Delaware set March 30, 2009, as deadline for
creditors of Constar International Inc. and its debtor affiliates
to file proofs of claim.

Governmental units have until June 29, 2009, to file their proofs
of claim.

All proofs of claim must be delivered to:

   Constar International Claims Processing Center
   c/o Epiq Bankruptcy Solutions LLC
   FDR Station, P.O. Box 5011
   New York, NY  10150-5011

                           About Constar

Headquartered in Philadelphia, Pennsylvania, Constar International
Inc. (NASDAQ: CNST) -- http://www.constar.net-- produces
polyethylene terephthalate plastic containers for food, soft
drinks and water.  The company provides full-service packaging
services.  The company and five of its affiliates filed for
Chapter 11 protection on Dec. 30, 2008 (Bankr. D. Del. Lead Case
No. 08-13432).  Wilmer Cutler Pickering Hale and Dorr LLP
represents the Debtors as their bankruptcy counsel.  The Debtors
proposed Bayard, P.A., as local counsel; Pricewaterhouse Coopers
as auditors and accountants; Greenhill & Co. LLC as financial
advisor; and Epiq Systems Inc. Claims and Balloting Agent.


CONSTAR INT'L: U.S. Trustee Forms 5-Member Creditors Panel
----------------------------------------------------------
Roberta A. DeAngelis, the United States Trustee for Region 3,
appointed five creditors to serve on an official committee of
unsecured creditors for Constar International Inc. and its debtor-
affiliates.

The members of the committee are:

   1) U.S. Bank National Association, as Indenture Trustee
      Attn: Laura L. Moran
      One Federal St.
      Boston, MA 02110
      Tel: (617) 603-6429
      Fax: (617) 603-6640

   2) Aegon USA Investment Management, LLC
      Attn: Rishi Goel
      230 W. Monroe, Suite 1450
      Chicago, IL 60606
      Tel: (312) 596-5337
      Fax: (866) 453-9164

   3) Peritus Asset Management LLC
      Attn: Jason L. Pratt
      26 W. Anapamu St., 3rd Floor
      Santa Barbara, CA 93102
      Tel: (805) 680-3027
      Fax: (805) 879-5619

   4) R&D Tool and Engineering Co.
      Attn: Richard B. Lantefield
      1009 S.E. Browning Ave.
      Lee's Summit, MO 64081
      Tel: (816) 525-0353

   5) ROI Printing Companies
      Attn: John H. Strauss
      175 W. Ostend Street
      Baltimore, MD 21230
      Tel: (410) 576-1111
      Fax: (410) 576-0836

Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtor's
expense.  They may investigate the Debtor's business and financial
affairs.  Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.  Those
committees will also attempt to negotiate the terms of a
consensual Chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest.  If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee.  If the Committee concludes reorganization
of the Debtor is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.

                           About Constar

Headquartered in Philadelphia, Pennsylvania, Constar International
Inc. (NASDAQ: CNST) -- http://www.constar.net-- produces
polyethylene terephthalate plastic containers for food, soft
drinks and water.  The company provides full-service packaging
services.  The company and five of its affiliates filed for
Chapter 11 protection on Dec. 30, 2008 (Bankr. D. Del. Lead Case
No. 08-13432).  Wilmer Cutler Pickering Hale and Dorr LLP
represents the Debtors as their bankruptcy counsel.  The Debtors
proposed Bayard, P.A., as local counsel; Pricewaterhouse Coopers
as auditors and accountants; Greenhill & Co. LLC as financial
advisor; and Epiq Systems Inc. Claims and Balloting Agent.  When
the Debtors filed for protection from their creditors, they
disclosed $420,000,000 in total assets and $538,000,000 as of
Nov. 30, 2008.


CONSTAR INT'L: Gets DS OK, Moves to Plan Confirmation Process
-------------------------------------------------------------
The Hon. Peter J. Walsh of the United States Bankruptcy Court for
the District of Delaware approved a second amended disclosure
statement explaining a second amended Chapter 11 plan of
reorganization dated Feb. 3, 2009, filed by Constar International
Inc. and its debtor-affiliates.  Judge Walsh found that the
disclosure statement contains adequate information in accordance
to Section 1125 of the United States Bankruptcy Code.

Judge Walsh set on April 29, 2009, at 2:00 p.m., at to consider
confirmation of the Debtors' amended plan.  Objections, if any,
are due April 23, 2009.

                       Overview of the Plan

The amended plan contemplates these restructuring transactions:

   a) The Debtors will exchange 10 shares of common equity of the
      company for every $1,000 of principal amount of the 11%
      senior subordinated notes due 2012.  On the plan's
      effective date, in full and final satisfaction, settlement,
      release, and discharge of and in exchange for the senior
      subordinated notes, each holder of senior subordinated note
      claims will receive its pro rata portion of the
      distribution shares.  Upon the effective date, the senior
      subordinated noteholders will receive 100% of the new
      equity subject to any dilution from the management
      incentive plan and the reorganized Debtors will pay in cash
      and in full all reasonable fees and expense of the senior
      subordinated note trustee.

   b) On the plan's effective date, all equity interest will be
      canceled and extinguished.  Equity holders will not receive
      any distribution under the plan.

   c) The Debtors will either convert the DIP facility into an
      exit facility on the conversion date or enter into an
      alternative exit facility, if the Debtors elect not to
      convert the DIP facility and have negotiated an alternative
      exit facility sufficient to repay in full the DIP facility
      and to fund the Debtors' operation upon the effective date.

The amended plan classifies interests against and liens in the
Debtors in seven groups.  The classification of treatment of
claims and interests are:

                        Treatment of Claims

                     Type                        Estimated
             Class   of Claims       Treatment   Recovery
             -----   ---------       ---------   ---------
             1       other priority  unimpaired  100%
                     claims

             2       senior secured  unimpaired  100%
                     FRN claims

             3       other secured   unimpaired  100%
                     claims

             4       senior          impaired    pro rata
                     subordinated
                     note claims

             5       other general   unimpaired  100%
                     unsecured
                     claims

             6       Section 510(b)  impaired    0%

             7       Equity Interest impaired    0%

Under the plan, holders of Class 1 other priority claims will be
paid in full in cash.

Each holder of Class 2 senior secured FRN claims will be
deaccelerated and reinstated in full as of the date immediately
before the Debtors' bankruptcy filing.

At the Debtors' option, holders of Class 3 other secured claims
will, either, among other things:

   a) receive payment in full in cash of the holder's allowed
      other secured claim; or

   b) receive the collateral securing any of the allowed other
      secured claim and payment of any interest required to be
      paid under Section 506(b) of the Bankruptcy Code.

Holders of Class 4 senior subordinated note claims will receive
their pro rata share portion of the distribution shares.  Upon the
plan's effective date, the holders will get 100% of the new equity
subject to any dilution arising from the management incentive plan
and the Debtors will pay in cash in full all reasonable fees and
expenses of the senior subordinated note trustee.

Class 5 other general unsecured claims will be paid in full in
cash after the plan's effective date or when the unsecured claim
would be paid in the ordinary course of the Debtors' business.

Class 6 Section 510(b) and 7 equity interest claims will be
canceled and extinguished.

A full-text copy of the Debtors' Second Amended Disclosure
Statement is available for free at:

               http://ResearchArchives.com/t/s?3917

A full-text copy of the Debtors' Second Amended Chapter 11 Plan of
Reorganization is available for free at

               http://ResearchArchives.com/t/s?3918

A full-text copy of the Debtors' Blacklined Second Amended
Disclosure Statement is available for free at

               http://ResearchArchives.com/t/s?3919

                          About Constar

Headquartered in Philadelphia, Pennsylvania, Constar International
Inc. (NASDAQ: CNST) -- http://www.constar.net-- produces
polyethylene terephthalate plastic containers for food, soft
drinks and water.  The company provides full-service packaging
services.  The company and five of its affiliates filed for
Chapter 11 protection on Dec. 30, 2008 (Bankr. D. Del. Lead Case
No. 08-13432).  Wilmer Cutler Pickering Hale and Dorr LLP
represents the Debtors as their bankruptcy counsel.  The Debtors
proposed Bayard, P.A., as local counsel; Pricewaterhouse Coopers
as auditors and accountants; Greenhill & Co. LLC as financial
advisor; and Epiq Systems Inc. as claims and balloting agent.
Roberta A. DeAngelis, the United States Trustee for Region 3,
appointed five creditors to serve on an official committee of
unsecured creditors.  When the Debtors filed for protection from
their creditors, they disclosed $420,000,000 in total assets and
$538,000,000 as of Nov. 30, 2008.


COOPER TIRE: Moody's Downgrades Corporate Family Rating to 'B3'
---------------------------------------------------------------
Moody's Investors Service lowered Cooper Tire & Rubber Company's
Corporate Family and Probability of Default Ratings to B3 from B2;
and lowered the ratings of the company's unsecured notes to Caa1
from B3.  The company's ratings remain under review for further
possible downgrade.  The company's Speculative Grade Liquidity
Rating also was lowered to SGL-3 from SGL-2.

Cooper Tire's B3 Corporate Family Rating reflects Moody's
expectation of further weakness in the company's credit metrics
over the next several quarters.  These credit metrics are not
supportive of the prior B2 Corporate Family Ratings.  The
company's recent pricing and restructuring actions may somewhat
offset lower aftermarket tire demand in North America over the
near-term as passenger car-miles driven continue to soften.
Cooper Tire also may benefit from the potential positive impact of
currently lower raw material prices in 2009, including the impact
of the company's use of the LIFO (last-in-first-out) inventory
accounting method.  However, competitive pricing pressures may
offset the potential margin improvement.  The company's strong
cash balances provide some degree of financial flexibility over
the near term.

The review will assess the company's ability to rapidly realize
savings from the closure of its Albany, Georgia manufacturing
facility and from other restructuring actions taken to adjust to
lower aftermarket tire demand in North America.  The review will
also consider the risk of an extended period of reduced demand for
aftermarket tires in North America as the recessionary environment
further cuts into consumer driving patterns.  Finally, the review
will evaluate the company's ability to maintain an adequate
liquidity position subsequent to any cash burn involved in the
company's restructuring actions, weak operating performance in
2009, and the maturity of its unsecured notes due in December
2009.

Cooper Tire's Speculative Grade Liquidity rating of SGL-3
represents adequate liquidity over the next twelve months.  At
September 30, 2008 the company had $264 million of cash and cash
equivalents.  Current industry pressures, and the announced plant
closure, will likely result in significant negative free cash flow
for 2009.  With this cash burn, Moody's estimates that the company
will have sufficient liquidity to retire the remaining 7.75%
unsecured notes due in December 2009.  There are no financial
covenants under the company's $200 million asset based revolving
credit nor the $125 million accounts receivable securitization
facility.  As of September 30, 2008, Cooper Tire had borrowing
capacity of $254 million under the combined asset based revolving
credit and accounts receivable securitization facilities.  The
accounts receivable securitization matures in September 2010 and
the asset based revolving credit matures in November 2012.  Cooper
Tire also has some ability to develop incremental alternate
liquidity under the lien baskets of its unsecured notes.

As of September 30, 2008 the company's EBIT/interest expense
(including Moody's standard adjustments) was 0.2x and Debt/EBITDA
was 4.9x.

Ratings lowered and under review for possible downgrade:

  -- Corporate Family Rating, to B3 from B2:

  -- Probability of Default, to B3 from B2:

  -- Speculative Grade Liquidity, to SGL-3 from SGL-2;

  -- Senior Unsecured Notes, to Caa1 (LGD4, 66%) from B3 (LGD4,
     66%);

  -- Shelf filing for unsecured notes, to (P)Caa1 (LGD4, 66%)
     from (P)B3 (LGD4, 66%);

  -- Shelf filing for preferred stock, to (P)Caa2 LGD6 97% from
     (P)Caa1 LGD6 97%

The last rating action was on July 14, 2008 at which time the B2
Corporate Family Rating was affirmed and the outlook changed to
stable from positive. Cooper Tire's revolving credit facility is
not rated.

Cooper Tire & Rubber Company, headquartered in Findlay, OH, is the
fourth largest tire manufacturer in North America and is focused
on replacement markets for passenger cars and light & medium duty
trucks.  Revenues in 2007 were approximately
$2.9 billion.


CPI CORP: NYSE Accepts Continued Listing Plan
---------------------------------------------
CPI Corp. said that the New York Stock Exchange accepted the
Company's plan for continued listing.  As a result, the Company's
stock will continue to be listed on NYSE, subject to quarterly
reviews by the NYSE's Listing and Compliance Committee to ensure
the Company's progress toward its plan to restore compliance with
continued listing standards.

On November 12, 2008, the Company announced that it was below
continued listing criteria because its average global market
capitalization over a consecutive 30 trading-day period and total
stockholders' equity were each less than $75 million.

Renato Cataldo, CPI's CEO, commented, "We are confident that our
operational initiatives will bring the Company into full
compliance with the NYSE's criteria for continued listing, and we
are pleased that the NYSE has given us the opportunity to deliver
on those initiatives."

                       About CPI Corp.

CPI Corp. is the leading portrait studio operator in North America
offering photography services in approximately 3,062 locations in
the United States, Puerto Rico, Canada and Mexico, principally in
Sears and Wal-Mart stores.


CRESCENT RESOURCES: Bank Loan Sells at 84% Off; Continues Slide
---------------------------------------------------------------
Participations in a syndicated loan under which Crescent Resources
is a borrower continues its slide in secondary market trading.
For the week ended January 30, 2009, the bank loan traded at 16.20
cents-on-the-dollar, according to data compiled by Loan Pricing
Corp. and reported in The Wall Street Journal.  This represents a
drop of 4.40 percentage points from the previous week, the Journal
relates.  Crescent pays 300 basis points to borrow under the
facility.  The bank loan matures November 8, 2012, and carries
Moody's B1 rating and Standard & Poor's B+ rating.

The bank loan traded at 20.60 cents-on-the-dollar during the week
ended January 23, 2009, 3.90 percentage points from the previous
week.

Headquartered in Charlotte, North Carolina, Crescent Resources,
LLC is a private land and commercial property development company.
The firm is jointly owned by Duke Energy and Morgan Stanley Real
Estate.


CV THERAPEUTICS: Pictet Funds Reduces Equity Stake to 4.58%
-----------------------------------------------------------
Pictet Funds - Biotech disclosed in a regulatory filing with the
Securities and Exchange Commission that it may be deemed to
beneficially own 2,805,856 shares or 4.58% of CV Therapeutics
Inc.'s common stock.

Pictet Funds beneficially owned more than 5% of the common stock
as of Dec. 31, 2008, but has subsequently decreased its beneficial
ownership below 5% as of Jan. 16, 2008.

As of Oct. 31, 2008, 61,326,638 shares of CV Therapeutics's common
stock, $.001 par value, were outstanding.

A full-text copy of the SCHEDULE 13G is available for free at:

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

Headquartered in Palo Alto, California, CV Therapeutics Inc.
(NasdaqGM: CVTX) -- http://www.cvt.com/-- is a biopharmaceutical
company focused on applying molecular cardiology to the discovery,
development and commercialization of novel, small molecule drugs
for the treatment of cardiovascular diseases.

CV Therapeutics' approved products include Ranexa(R) (ranolazine
extended-release tablets), indicated for the treatment of chronic
angina in patients who have not achieved an adequate response with
other antianginal drugs, and Lexiscan(TM) (regadenoson) injection
for use as a pharmacologic stress agent in radionuclide myocardial
perfusion imaging in patients unable to undergo adequate exercise
stress.

For three months ended Sept. 30, 2008, the company posted net loss
of $25.3 million compared with net loss of $34.2 million for the
same period in the previous year.

For nine months ended Sept. 30, 2008, the company posted net loss
of $61.5 million compared with net loss of $146.8 million for the
same period in the previous year.

The company's cash utilized for the quarter ended Sept. 30, 2008,
was $14.8 million.  This compares to its cash utilized for the
prior quarter of $21.7 million.  The decrease in cash utilization
in the quarter ended Sept. 30, 2008, compared to the prior quarter
was due to higher cash receipts in the current quarter associated
with higher quarter-over-quarter product revenue.  At Sept. 30,
2008, the company had cash, cash equivalents and marketable
securities of $301.9 million compared to cash, cash equivalents,
marketable securities and restricted cash of
$274.7 million at June 30, 2008.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $391.9 million and total liabilities of $617.5 million,
resulting in a stockholders' deficit of $225.6 million.


DANA CORP: Bank Loan Sells at Substantial Discount
--------------------------------------------------
Participations in a syndicated loan under which Dana Corp. trades
in the secondary market at 42.50 cents-on-the-dollar for the week
ended January 30, 2009, according to data compiled by Loan Pricing
Corp. and reported in The Wall Street Journal.  This represents a
drop of 3.38 percentage points from the previous week, the Journal
relates.  Dana pays 375 basis points over LIBOR to borrow under
the facility.  The bank loan matures Jan. 15, 2015, and carries
Moody's B3 rating and Standard & Poor's B+ rating.

As reported by the Troubled Company Reporter, Dana Holding
Corporation was notified by the New York Stock Exchange in
December that the company has fallen below its continued listing
standards.  During a consecutive 30-day trading period -- under
NYSE rules -- the average closing price of Dana's common stock
must be a minimum of
$1 per share and its market capitalization must equal or exceed
$100 million.

The company has six months to return its average share price above
the required threshold, and 45 days to submit a plan demonstrating
its ability to comply with the market capitalization standard.
Under NYSE rules, Dana's common stock will continue to be listed
on the exchange during this period, subject to ongoing monitoring
and the company's compliance with other continued listing
requirements.

                 About Dana Holding Corporation

Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/
-- designs and manufactures products for every major vehicle
producer in the world, and supplies drivetrain, chassis,
structural, and engine technologies to those companies.  Dana
employs 46,000 people in 28 countries.  Dana is focused on being
an essential partner to automotive, commercial, and off-highway
vehicle customers, which collectively produce more than 60
million vehicles annually.

Dana has facilities in China in the Asia-Pacific, Argentina in
the Latin-American regions and Italy in Europe.

The company and its affiliates filed for chapter 11 protection
on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354).  As of
Nov. 30, 2007, the Debtors listed $7,131,000,000 in total assets
and $7,665,000,000 in total debts resulting in a shareholders'
deficit of $534,000,000.

Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day,
in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq.,
Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in
Cleveland, Ohio, represented the Debtors.  Henry S. Miller at
Miller Buckfire & Co., LLC, served as the Debtors' financial
advisor and investment banker.  Ted Stenger from AlixPartners
served as Dana's Chief Restructuring Officer.

Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel
LLP, represented the Official Committee of Unsecured Creditors.
Fried, Frank, Harris, Shriver & Jacobson, LLP served as counsel
to the Official Committee of Equity Security Holders.  Stahl
Cowen Crowley, LLC served as counsel to the Official Committee
of Non-Union Retirees.

The Debtors filed their Joint Plan of Reorganization on Aug. 31,
2007.  On Oct. 23, 2007, the Court approved the adequacy of the
Disclosure Statement explaining their Plan.  Judge Burton Lifland
of the U.S. Bankruptcy Court for the Southern District of New York
entered an order confirming the Third Amended Joint Plan of
Reorganization of the Debtors on Dec. 26, 2007.

The Debtors' Third Amended Joint Plan of Reorganization was deemed
effective as of Jan. 31, 2008.  Dana Corp., starting on
the Plan Effective Date, operated as Dana Holding Corporation.

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

                         *     *     *

As reported by the TCR on Jan. 15, 2009, Standard & Poor's Ratings
Services lowered its ratings on Dana Holding Corp., including the
corporate credit rating, which was lowered to 'B' from 'B+'.  The
ratings were also removed from CreditWatch, where they had been
placed with negative implications on Nov. 13, 2008.  The outlook
is negative.

"The downgrade reflects our view that very weak market conditions
in most of its business segments in 2009 will hinder the company's
post-bankruptcy restructuring efforts," said Standard & Poor's
credit analyst Nancy Messer.  "We expect revenues to be reduced by
weak auto sales and production in North America, weak auto sales
in Europe, and the U.S. recession, which has stalled the recovery
of commercial truck sales.  Lacking an expanding revenue base, S&P
believe the benefit from Dana's ongoing initiative to optimize its
manufacturing footprint will fall short of S&P's previous near-
term expectations," she continued.  For example, for the last
three months of 2008, the seasonally adjusted annual rate of
light-vehicle sales in the U.S. was below 11 million units, and
S&P expects sales in 2009 to be 10 million units, 24% below 2008
actual sales.


DOCUMENT SECURITY: Retains Stock Listing at NYSE Alternext
----------------------------------------------------------
Document Security Systems, Inc., says the NYSE Alternext US has
accepted the Company's plan of compliance and will continue to
list the Company's Common Stock while the Company works to regain
compliance with the Exchange's listing criteria before June 2,
2010.

The Company received notice from the Exchange on December 2, 2008
that based on a review of Document Security Systems' Form 10-Q for
the period ended September 30, 2008, the Company did not meet
certain of the Exchange's continued listing standards related to
stockholders' equity as set forth in Part 10 of the NYSE Alternext
US Company Guide.

The Company was afforded the opportunity to submit a plan of
compliance to the Exchange and on January 9, 2009 presented its
plan to the Exchange. On January 29, 2009, the Exchange notified
the Company that it accepted the Company's plan of compliance and
granted the Company an extension until June 2, 2010 to regain
compliance with the continued listing standards and that its
listing is being continued pursuant to this extension. The Company
will be subject to periodic review by Exchange Staff during the
extension period. Failure to make progress consistent with the
plan or to regain compliance with the continued listing standards
by the end of the extension period could result in the Company
being delisted from the Exchange.

                 About Document Security Systems

Based in Rochester, New York, Document Security Systems, Inc.,
(NYSE Alternext US LLC: DMC) -- http://www.documentsecurity.com/
and http://www.plasticprintingprofessionals.com-- develops
optical deterrent technologies that help prevent counterfeiting
and brand fraud from the use of the most advanced scanners,
copiers and imaging systems in the market.  The company's patented
and patent-pending technologies protect valuable documents and
printed products from counterfeiters and identity thieves.
Document Security Systems' customers, which include international
governments, major corporations and world financial institutions,
use its covert and overt technologies to protect a number of
applications including, but not limited to, currency, vital
records, brand protection, ID cards, internet commerce, passports
and gift certificates.


DUN & BRADSTREEET: Reports 2008 Results & 2009 Financial Guidance
-----------------------------------------------------------------
The Dun & Bradstreet Corporation reported on January 28, 2009,
results for the fourth quarter and year ended December 31, 2008.
The company also announced its 2009 financial guidance; its
expected financial flexibility savings for 2009; and an increase
in its first quarter 2009 dividend.

"2008 was a good year for us, despite the challenging
environment," cited Steve Alesio, D&B's Chairman and CEO. "As we
ended the year, however, the economic headwinds started to have a
significant impact on the company's US marketing-related
businesses, which is continuing into 2009, and is reflected in the
company's guidance.  The company intends to leverage the strength
of its team and its financially flexible business model to deliver
a solid performance in this challenging year and exit 2009 in a
stronger, more competitive position."

                   Fourth Quarter 2008 Results

Diluted earnings per share before non-core gains and charges for
the quarter ended December 31, 2008, were $1.87, up 14 percent
from $1.64 in the prior year similar period. On a GAAP basis,
diluted earnings per share for the quarter ended December 31,
2008, were $1.85, up 6 percent from $1.74 in the prior year
similar period.

Core and total revenue for the fourth quarter of 2008 was
$474.7 million, up 4 percent from the prior year similar period
before the effect of foreign exchange (up 2 percent after the
effect of foreign exchange).

Core and total revenue results for the fourth quarter of 2008
reflect:

   * Risk Management Solutions revenue of $282.6 million, up
     7 percent before the effect of foreign exchange (up
     4 percent after the effect of foreign exchange);

   * Sales & Marketing Solutions revenue of $160.0 million, down
     1 percent before the effect of foreign exchange (down
     3 percent after the effect of foreign exchange); and

   * Internet Solutions revenue of $32.1 million, up 10 percent
     before the effect of foreign exchange (up 9 percent after
     the effect of foreign exchange)

Operating income before non-core gains and charges for the fourth
quarter of 2008 was $174.8 million, up 9 percent from the prior
year similar period. On a GAAP basis, operating income was
$172.2 million, up 11 percent from the prior year similar period.
During the fourth quarter of 2008, the company also incurred
transition costs of $2.2 million compared with $3.9 million
incurred in the prior year similar period.

Net income before non-core gains and charges for the fourth
quarter of 2008 was $101.1 million, up 5 percent from the prior
year similar period. On a GAAP basis, net income for the quarter
was $100.1 million, down 2 percent from the prior year similar
period, primarily due to a non-core gain associated with the
company's Japanese joint venture in the fourth quarter of 2007.

Share repurchases during the fourth quarter of 2008 under the
company's discretionary repurchase program totaled $52 million.

The company ended the year with $164.2 million of cash and cash
equivalents.

                Fourth Quarter 2008 Segment Results

   -- United States

Core and total revenue for the fourth quarter of 2008 was
$369.6 million, up 2 percent from the prior year similar period.

U.S. core and total revenue results for the fourth quarter of 2008
reflect:

   * Risk Management Solutions revenue of $202.4 million, up
     4 percent;

   * Sales & Marketing Solutions revenue of $136.7 million, down
     2 percent; and

   * Internet Solutions revenue of $30.5 million, up 11 percent.

Operating income for the fourth quarter of 2008 was
$163.2 million, up 3 percent from the prior year similar period.
The increase was primarily due to revenue growth in the U.S.
segment, partially offset by costs associated with investments to
enhance the company's strategic capabilities.

   -- International

Core and total revenue for the fourth quarter of 2008 was $105.1
million, up 12 percent from the prior year similar period before
the effect of foreign exchange (up 3 percent after the effect of
foreign exchange).

International core and total revenue results for the fourth
quarter of 2008 reflect:

   * Risk Management Solutions revenue of $80.2 million, up
     15 percent before the effect of foreign exchange (up
     5 percent after the effect of foreign exchange);

   * Sales & Marketing Solutions revenue of $23.3 million, up
     5 percent before the effect of foreign exchange (down
     4 percent after the effect of foreign exchange); and

   * Internet Solutions revenue of $1.6 million, down 2 percent
     before the effect of foreign exchange (down 16 percent after
     the effect of foreign exchange).

Operating income for the fourth quarter of 2008 was
$29.8 million, up 27 percent from the prior year similar period.
The increase was primarily due to revenue growth in the
International segment and the timing of investments in the prior
year similar period, partially offset by the net impact of foreign
exchange.

                     Full Year 2008 Results

Diluted earnings per share before non-core gains and charges for
2008 were $5.27, up 16 percent from $4.55 in the prior year
similar period. On a GAAP basis, diluted earnings per share for
2008 were $5.60, up 12 percent from $4.99 in the prior year
similar period.

Core and total revenue for 2008 was $1,726.3 million, up 7 percent
from the prior year similar period before the effect of foreign
exchange (up 8 percent after the effect of foreign exchange).

Core and total revenue results for the full year 2008 reflect:

   * Risk Management Solutions revenue of $1,111.0 million, up
     7 percent before the effect of foreign exchange (up
     8 percent after the effect of foreign exchange);

   * Sales & Marketing Solutions revenue of $490.4 million, up
     6 percent before the effect of foreign exchange (up
     7 percent after the effect of foreign exchange); and

   * Internet Solutions revenue of $124.9 million, up 16 percent
     both before and after the effect of foreign exchange.

Operating income before non-core gains and charges for 2008 was
$501.1 million, up 11 percent from the prior year similar period.
On a GAAP basis, operating income for 2008 was $469.7 million, up
10 percent from the prior year similar period.  During 2008, the
company also incurred transition costs of $12.4 million compared
with $13.0 million incurred in the prior year similar period.

Net income before non-core gains and charges for 2008 was
$292.5 million, up 8 percent from the prior year similar period.
On a GAAP basis, net income for 2008 was $310.6 million, up
4 percent from the prior year similar period, primarily reflecting
a non-core gain associated with the company's Japanese joint
venture in 2007.

Free cash flow for 2008, excluding the impact of legacy tax
matters, was $351.9 million, up 16 percent from the prior year
similar period.  The company defines free cash flow as net cash
provided by operating activities less capital expenditures and
additions to computer software and other intangibles.  Net cash
provided by operating activities for 2008, excluding the impact of
legacy tax matters, was $411.4 million, up 9 percent from the
prior year similar period.  On a GAAP basis, net cash provided by
operating activities for 2008 was $433.9 million, compared to
$384.6 million in the prior year similar period.

Share repurchases during 2008 under the company's discretionary
repurchase program totaled $300 million, while repurchases made to
offset the dilutive effect of shares issued under employee benefit
plans totaled an additional $82 million.

                  Full Year 2008 Segment Results

   -- United States

Core and total revenue for 2008 was $1,321.1 million, up 6 percent
from the prior year similar period.

U.S. core and total revenue results for full year 2008 reflect:

   * Risk Management Solutions revenue of $792.4 million, up
     5 percent;

   * Sales & Marketing Solutions revenue of $410.7 million, up
     5 percent; and

   * Internet Solutions revenue of $118.0 million, up 18 percent.

Operating income for 2008 was $496.5 million, up 7 percent from
the prior year similar period. The increase was primarily due to
revenue growth in the U.S. segment, partially offset by costs
associated with investments to enhance the company's strategic
capabilities.

   -- International

Core and total revenue for 2008 was $405.2 million, up 12 percent
before the effect of foreign exchange (up 16 percent after the
effect of foreign exchange) from the prior year similar period.

International core and total revenue results for full year 2008
reflect:

   * Risk Management Solutions revenue of $318.6 million, up
     13 percent before the effect of foreign exchange (up
     16 percent after the effect of foreign exchange);

   * Sales & Marketing Solutions revenue of $79.7 million, up
     12 percent before the effect of foreign exchange (up
     14 percent after the effect of foreign exchange); and

   * Internet Solutions revenue of $6.9 million, down 1 percent
     before the effect of foreign exchange (down 3 percent after
     the effect of foreign exchange).

Operating income before non-core gains and charges for 2008 was
$87.7 million, up 26 percent from the prior year similar period.
The increase was primarily due to revenue growth in the
International segment, lower costs as a result of the company's
reengineering efforts and the favorable impact of foreign
exchange. On a GAAP basis, operating income for the year was
$87.7 million, up 27 percent from the prior year similar period.

                    Non-Core Gains and Charges

During the fourth quarter of 2008 and 2007, the company recorded:

   * A net pre-tax, non-core charge of $1.7 million in the fourth
     quarter of 2008 and a net pre-tax, non-core gain of
     $9.3 million in the fourth quarter of 2007;

   * A net after-tax, non-core charge of $1.0 million in the
     fourth quarter of 2008 and a net after-tax, non-core gain of
     $2.3 million in the fourth quarter of 2007.

For the years ending 2008 and 2007, the company recorded:

   * Net pre-tax, non-core charges of $29.2 million in 2008 and
     $4.4 million in 2007;

   * Net after-tax, non-core gains of $17.0 million in 2008 and
     $20.8 million in 2007.

D&B's restructuring charges may be viewed as recurring as they are
part of its Financial Flexibility initiatives.  In addition to
reporting GAAP results, the company reports results before
restructuring charges and other non-core gains and charges because
they do not reflect the company's underlying business performance
and they may have a disproportionate positive or negative impact
on the results of its ongoing business operations.

                     Full Year 2009 Guidance

D&B provided financial guidance for the full year 2009:

   * Core revenue growth of 2 percent to 5 percent, before the
     effect of foreign exchange;

   * Operating income growth of 5 percent to 8 percent, before
     non-core gains and charges;

   * Diluted EPS growth of 9 percent to 12 percent, before
     non-core gains and charges; and

   * Free cash flow of $360 million to $375 million, excluding
     the impact of legacy tax matters.

D&B does not provide guidance on a GAAP basis because D&B is
unable to predict, with reasonable certainty, the future movement
of foreign exchange rates or the future impact of non-core gains
and charges, such as restructuring charges and legacy tax matters,
which are a component of the most comparable financial measures
calculated in accordance with GAAP.  Non-core gains and charges
are uncertain and will depend on several factors, including
industry conditions, and could be material to D&B's results
computed in accordance with GAAP.

                   2009 Financial Flexibility

D&B continues to create financial flexibility through several
reengineering initiatives aimed at complexity reduction,
including:

   * Continuing to improve the company's organizational design
     and the efficiency of how D&B is organized;

   * Reducing product complexity and eliminating and
     consolidating systems and technology infrastructure;

   * Simplifying and automating data collection processes; and

   * Centralizing management of key cost drivers, consolidating
     vendors and contract negotiation.

D&B expects its ongoing reengineering initiatives to create
$90 million to $105 million of financial flexibility in 2009,
before any transition costs and restructuring charges and before
any reallocation of savings generated by the initiatives.  The
company expects to incur transition costs of approximately
$17 million to $22 million and pre-tax restructuring charges
totaling $22 million to $30 million associated with its ongoing
reengineering efforts.

                     Cash Dividend Increased

D&B said that its Board of Directors has declared an increased
quarterly cash dividend of $0.34 per share, up from D&B's prior
dividend payout of $0.30 per share.  This quarterly cash dividend
is payable on March 20, 2009, to shareholders of record at the
close of business on March 6, 2009.  This increase in D&B's
quarterly cash dividend is a reflection of the company's
confidence in its ability to generate continued strong free cash
flow growth in 2009.

A full-text copy of the company's press release and selected
financial data is available for free at:

               http://researcharchives.com/t/s?3909

                     About Dun & Bradstreet

Dun & Bradstreet (NYSE: DNB) -- http://www.dnb.com/-- is the
source of commercial information and insight on businesses.  D&B's
global commercial database contains more than 130 million business
records.  D&B provides solution sets that meet a diverse set of
customer needs globally.  Customers use D&B Risk Management
Solutions(TM) to mitigate credit and supplier risk, increase cash
flow and drive increased profitability; D&B Sales & Marketing
Solutions(TM) to increase revenue from new and existing customers;
and D&B Internet Solutions to convert prospects into clients
faster by enabling business professionals to research companies,
executives and industries.

As of September 30, 2008, the company's balance sheet showed total
assets of $1.6 billion and total liabilities of
$2.1 billion, resulting in total shareholders' deficit of
$558 million.


EDGE PETROLEUM: Warns of Chapter 11 Filing; Taps Akin Gump
----------------------------------------------------------
Edge Petroleum Corp., says that it may be required to seek
protection under Chapter 11 of the U.S. Bankruptcy Code if it is
unable to address its debt obligations.

Edge Petroleum has made changes to management as part of the
ongoing effort of the company to evaluate and assess the Company's
various financial and strategic alternatives, and in particular to
also address the previously announced $114 million borrowing base
deficiency, which now exists under its Fourth Amended and Restated
Credit Agreement, as amended.

As required by the Credit Facility, the company has elected to
prepay the Deficiency in six equal monthly installments with the
first $19 million installment being due on February 9, 2009,
though there can be no assurance that the Company will be able to
make any of such payments when they become due.

Although it is in discussions with its lending group with respect
to the possible restructuring of this payment obligation, Edge
Petroleum acknowledges that there can be no assurance that the
company will reach agreement with its lenders with respect to any
restructuring and if not, will be able to make the required
payments with respect to the Deficiency when they become due.

"Moreover, there can be no assurance that the Company's ongoing
efforts to evaluate and assess its various financial and strategic
alternatives (which may include the sale of some or all of the
Company's assets, the merger or other business combination
involving the Company, restructuring of the Company's debt or the
issuance of additional equity or debt) will be successful.  If
such efforts are not successful, the Company may be required to
seek protection under Chapter 11 of the U.S. Bankruptcy Code."

Edge Petroleum recorded a net loss of $84,012,000 for nine months
ended Sept. 30, 2008, compared with a net profit of $10,875,000
during the same period in 2007. The loss included a $129 million
impairment charge and $70.7 million for depreciation.  The company
recorded $627,681,000 in assets, and liabilities of only
$281,278,000 as of Sept. 30, 2008.  The company is scheduled to
release fourth quarter 2008 results on Feb. 23, 2009.

Mr. Rochelle notes that Edge Petroleum's stock closed unchanged
Jan. 30 at 18 cents in trading on the Nasdaq Stock Market.  In the
past two years, the closing high was $15.62 on June 15, 2007.

In mid-December 2008, Edge Petroleum said that its previously
announced merger agreement with Chaparral Energy, Inc., has been
mutually terminated.  Edge and Chaparral determined it was highly
unlikely that the conditions to the closing of the merger would be
satisfied or that the parties would be able to obtain sufficient
debt and equity financing to allow them to complete the Merger and
operate as a combined company, particularly in light of the
challenging environment in the financial markets and the energy
industry.

                        $114M Deficiency

On January 8, 2009, Union Bank of California, N.A., the
administrative agent under the company's Fourth Amended and
Restated Credit Agreement, as amended, notified the Company that
the lenders under the Credit Facility had completed their
redetermination of the company's borrowing base, lowering it from
$240 million to $125 million.  As of the date of, and after giving
effect to, the Borrowing Base Redetermination, the aggregate
principal amount of the advances currently outstanding under the
Credit Facility plus the aggregate existing letter of credit
exposure exceeds our borrowing base by approximately $114 million.

"As a result, and pursuant to the terms of the Credit Facility, we
are required to take one or more of certain actions to timely
eliminate such deficiency, including to prepay such borrowing base
deficiency (which prepayments may be made in six equal monthly
installments) or to pledge additional oil and gas properties as
collateral."

                         Advisors Tapped

The company, in its Jan. 14 statement, said intends to work with
its lenders to eliminate its borrowing base deficiency and in
connection therewith is evaluating all strategic alternatives,
including a capital restructuring.  The company has retained the
investment banking firm Parkman Whaling LLC to further assist in
an evaluation of its strategic alternatives for the Company.
However, there is no assurance that the Company will be successful
in pursuing any such alternatives.

The Company has also engaged Akin Gump Strauss Hauer & Feld LLP to
act as the company's legal advisor in connection with its
evaluation of various financial and strategic alternatives and to
represent the Company generally in its ongoing corporate and
securities matters as its primary outside counsel.

                 Changes in Board and Management

Effective as of January 26, 2009, the Board of Directors of Edge
Petroleum, a Delaware corporation, appointed Gary L. Pittman as
EVP and CFO.  Mr. Pittman replaces the Company's Acting Chief
Financial Officer, C.W. MacLeod, who will continue his role with
the company as Senior Vice President, Business Development and
Planning.  Prior to joining the company, Mr. Pittman, age 53,
served as the Vice President of Special Projects at Tronox
Incorporated from September 2008 to January 2009.  Mr. Pittman has
experience as Chief Financial Officer of four public companies of
which three were E&P related.

On Jan. 14, the company said that its board of directors has
selected Mr. David F. Work to be the Company's lead director and
the lead director role will no longer rotate among the respective
chairs of the three standing committees of the Board of Directors.
In the role as lead director, Mr. Work will preside over the
executive sessions of the Board of Directors' non-management and
independent directors and is also designated as the director to
which communications to the non-management and independent
directors is to be directed.  Mr. John W. Elias will remain
Chairman of the Board, President and Chief Executive Officer of
the company.

                       About Edge Petroleum

Edge Petroleum Corp. (NASDAQ: EPEX)is a Houston-based is an
independent oil and natural gas company engaged in the
exploration, development, acquisition and production of crude oil
and natural gas properties in the United States.  At December 31,
2007, the Company's net proved reserves were 163.5 billion cubic
feet equivalent (Bcfe), comprising 116.6 billion cubic feet of
natural gas, 4.8 million barrels of natural gas liquids and 3
million barrels of crude oil and condensate. Natural gas and
natural gas liquids accounted for approximately 89% of those
proved reserves. Approximately 77% of total proved reserves were
developed, as of December 31, 2007, and they were all located
onshore, in the United States. On January 31, 2007, the Company
completed the purchase of certain oil and natural gas properties
located in 13 counties in south and southeast Texas, and other
associated assets from Smith Production Inc. (Smith)


EDGE PETROLEUM: Taps Ex-Tronox Exec. As CFO; COO Pay Hiked
----------------------------------------------------------
Effective as of January 26, 2009, the Board of Directors of Edge
Petroleum Corp., a Delaware corporation, appointed Gary L. Pittman
as Executive Vice President and Chief Financial Officer.  Mr.
Pittman replaces the Company's Acting Chief Financial Officer,
C.W. MacLeod, who will continue his role with the company as
Senior Vice President, Business Development and Planning.

Meanwhile, the company said that it has increased John Tugwell's
salary from $246,000 to $250,000.  The remaining terms of Mr.
Tugwell's employment remain unchanged.

According to Forbes, Mr. Tugwell has served as Chief Operating
Officer and Executive Vice President since April 2005 and prior to
that served as Chief Operating Officer and Senior Vice President
of Production for the Company since March 2004. Prior to that, he
served as Senior Vice President of Production since December 2001

Edge Petroleum said it has hired Mr. Pittman as part of the
ongoing effort of the company to evaluate and assess the Company's
various financial and strategic alternatives, and in particular to
also address the previously announced $114 million borrowing base
deficiency which now exists under its Fourth Amended and Restated
Credit Agreement, as amended.

Edge Petroleum has said that it might be forced to seek Chapter 11
protection if it does not reach agreement with lenders regarding a
restructuring of its debt.

                    Terms of Pittman Employment

In connection with his employment with the company, Mr. Pittman
will be entitled to (i) an annual salary of $250,000, (ii)
medical, dental, vision, 401(k), disability and life insurance
benefits, (iii) four weeks of annual vacation and (iv) severance
as provided in the severance agreement.

Additionally, Mr. Pittman will be eligible to earn an annual cash
bonus (ranging from 60% to 120% of his base salary) and a $40,000
cash retention bonus payable upon the earlier of December 31, 2009
or the consummation of a merger or sale of the Company.   The
annual cash bonus will be based 80% on the Company's performance
and 20% on Mr. Pittman's achievement of individual performance
objectives with the performance objectives being tied to the
success of the company's pursuit of various strategic
alternatives.

Mr. Pittman does not have a family relationship with any director,
executive officer or person nominated or chosen by the company to
become a director or an executive officer.

Prior to joining the company, Mr. Pittman, age 53, served as the
Vice President of Special Projects at Tronox Incorporated from
September 2008 to January 2009.  Mr. Pittman has experience as
Chief Financial Officer of four public companies of which three
were E&P related.  In addition, he has extensive experience with
turnarounds and has also served as Vice President and Chief
Financial Officer of Vermillion Companies from March 2008 to
September 2008; as Chief Financial Officer (December 2002 to
August 2007), Senior Vice President and Secretary (May 2006 to
August 2007) and Treasurer (August 2004 to August 2007) of Pioneer
Companies, Inc.; and as Vice President and Chief Financial Officer
of Coho Energy, Inc. from 2000 to 2002.

                       About Edge Petroleum

Edge Petroleum Corp. (NASDAQ: EPEX)is a Houston-based is an
independent oil and natural gas company engaged in the
exploration, development, acquisition and production of crude oil
and natural gas properties in the United States.  At December 31,
2007, the Company's net proved reserves were 163.5 billion cubic
feet equivalent (Bcfe), comprising 116.6 billion cubic feet of
natural gas, 4.8 million barrels of natural gas liquids and 3
million barrels of crude oil and condensate. Natural gas and
natural gas liquids accounted for approximately 89% of those
proved reserves. Approximately 77% of total proved reserves were
developed, as of December 31, 2007, and they were all located
onshore, in the United States. On January 31, 2007, the Company
completed the purchase of certain oil and natural gas properties
located in 13 counties in south and southeast Texas, and other
associated assets from Smith Production Inc. (Smith)


ENNIS HOMES: Files for Chapter 11 Bankruptcy Protection
-------------------------------------------------------
Visalia Times-Delta reports that Ennis Homes said that it has
filed for Chapter 11 bankruptcy protection.

Citing Ennis Homes' President and CEO Brian Ennis, Visalia Times-
Delta relates that the company's collapse was mainly due to an
inability to secure money to complete construction of new homes.

Visalia Times-Delta quoted Ennis Homes as saying, "Although the
market is challenging, selling homes is not our key issue.  Our
key issue was some of our banks stopped lending money."

Of the 12 home-building projects, three have been dropped,
including Silver Oaks in Visalia and two other projects in Dinuba
and Wasco, Visalia Times-Delta states, citing Ennis Homes.  Silver
Oaks is a neighborhood in northwest Visalia with one- and two-
bedroom homes selling from the high $100,000s.

Porterville-based homebuilder Ennis Homes --
http://www.ennishomes.com/-- is founded by Ben Ennis in 1979.


EQUITY MEDIA: Section 341(a) Meeting Scheduled for February 20
--------------------------------------------------------------
The United States Trustee for Region 13 will convene a meeting of
creditors of Equity Media Holdings Corp. and its debtor-affiliates
on Feb. 20, 2009, at 9:30 a.m., at U.S. Trustee's office, Bank of
America Building, 200 W. Capitol, 12th Floor, Room 1210 in Little
Rock, Arkansas.

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

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

                        About Equity Media

Little Rock, Arizona-based Equity Media Holdings Corp. --
http://www.emdaholdings.com/-- fka Equity Broadcasting
Corporation, dba Coconut Palm Acquisition Corp. and Equity
Broadcasting Corp., operates 121 television stations including 23
full power, 38 Class A and 60 low power stations.  The company was
founded in 1998.  The company filed for Chapter 11 protection on
Dec. 8, 2008 (Bankr. E. D. Ark. Case No. 08-17646).  Patrick J.
Neligan, Jr., Esq., at Neligan Foley LLP, in Dallas, Texas, and
James F. Dowden, Esq., in Little Rock, Arizona, represents the
company in its restructuring effort.  The company listed assets of
$100,000,000 to $500,000,000 and debts of $50,000,000 to
$100,000,000.


EQUITY MEDIA: Secures $58 Million Credit Line From Silver Point
---------------------------------------------------------------
Mark Hengel at ArkansasBusiness.com reports that Equity Media
Holdings Corp. has secured a $58 million credit line from its
largest creditor, Silver Point Finance LLC.

Court documents say that Silver Point agreed to finance the
$58 million "debtor in protection" loan.  According to
ArkansasBusiness.com, the loan includes a $9 million revolving
credit line and a term loan of up to $46 million.  Silver Point
and Equity Media also agreed to make Kim D. Kelly as chief
restructuring officer, ArkansasBusiness.com states.  The
agreement, says ArkansasBusiness.com, resolves Silver Point's
motion to convert Equity Media's Chapter 11 reorganization case to
a Chapter 7 liquidation.

ArkansasBusiness.com relates that on the revolving loan, Equity
Media will pay the London Interbank Offered Rate on the first day
of an interest period plus 8%.  On the term loan, Equity Media
will pay the Libor rate on day of the interest period plus 10%,
the report states.

According to court documents, the loan will let Equity Media
continue operations, maintaining the value of properties.  Equity
Media said in a filing with the U.S. Securities & Exchange
Commission that it lost about $133 million between 2001 and
Sept. 30, 2008.

Court documents say that the availability of interim loans under
the DIP Facility will provide necessary assurance to the Debtors'
ability to meet their near-term obligations.  Failure to meet
these obligations and to provide these assurances likely would
have both a short-term and long-term negative impact on the value
of the Debtors' business, to the detriment of all parties in
interest, according to court documents.

Court documents state that Equity Media's board will have no say
in Mr. Kelly's actions as CRO.

Little Rock, Arizona-based Equity Media Holdings Corp. --
http://www.emdaholdings.com/-- fka Equity Broadcasting
Corporation, dba Coconut Palm Acquisition Corp. and Equity
Broadcasting Corp., operates 121 television stations including 23
full power, 38 Class A and 60 low power stations.  The company was
founded in 1998.  The company filed for Chapter 11 protection on
Dec. 8, 2008 (Bankr. E. D. Ark. Case No. 08-17646).  Patrick J.
Neligan, Jr., Esq., at Neligan Foley LLP, in Dallas, Texas, and
James F. Dowden, Esq., in Little Rock, Arizona, represents the
company in its restructuring effort.  The company listed assets of
$100,000,000 to $500,000,000 and debts of $50,000,000 to
$100,000,000.


ESPRE SOLUTIONS: Files for Bankruptcy Protection; Texas CFM Sues
----------------------------------------------------------------
Texas CFM Capital filed a lawsuit against ESPRE Solutions on
Jan. 27, 2009, alleging breach of a contract with CFM Capital
Limited for unpaid compensation in the amount of $225,000 plus
other expenses.

According to the records of ESPRE, CFM Capital is beneficially
owned by Peter Leighton, former president of ESPRE Solutions.  CFM
Capital assigned its rights under the contract to Texas CFM
Capital.  In addition, Media Distribution Solutions, LLC, filed
suit against ESPRE on Jan. 30, 2009, alleging breach of contract
seeking payment amounts in excess of $2 million.  ESPRE had
previously been in negotiations with MDS to terminate the
contract, but discussions ended when ESPRE refused assignment of
sub-licensing contracts MDS had sold to Vizeo Solutions, a company
owned by Peter Leighton, and, All Link Live, Inc., a company
planning services in the live video adult entertainment industry.
ESPRE does not believe a breach has occurred in either contract
and will dispute the claims.

As a result of these lawsuits, and probable liabilities previously
disclosed by ESPRE pertaining to rescission rights of investors
based on improper filings and commission payments to unregistered
broker dealers, ESPRE Solutions filed for protection under the
Chapter 11 bankruptcy laws on Jan. 30, 2009.  The company seeks to
re-organize and believes it has enough cash on hand to continue
operations until such time a plan can be approved.

ESPRE previously announced on Jan. 14, 2009, based on the opinion
of legal counsel, the company should notify its senior lender,
Dalcor Inc., of a likely default under the terms of their
$5 million senior secured note.  Subsequently, ESPRE received a
notice of default from Dalcor with a demand to accelerate re-
payment.  The company has stated it is not able to re-pay the note
at this time.  Additional defaults now exist under the terms of
the note, including the lawsuits from CFM and MDS.

Bill Hopke, ESPRE's President and CEO, stated, "We've been
weighing various options and due to recent events and previously
disclosed issues, made the decision to file under Chapter 11
giving us the ability to continue operating and developing our
world class video software solutions.  It's a very difficult time
for any company to raise additional investment capital and recent
disclosures recommended by our legal counsel increased our risk
profile even more."

                  About ESPRE Solutions, Inc.

Dallas, Texas-based ESPRE Solutions (OTCBB: EPRTE) --
http://www.espresolutions.com-- is a public company that is
reinventing how enterprises work and exchange information and
ideas by providing a truly viable solution for live, high-quality
multimedia video collaboration.  ESPRE harnesses the power of
collaboration to extract the benefits of visually connecting
global work groups and individuals to create, share and deliver
live video content over the Internet. At the core of ESPRE, is the
revolutionary video encoding and decoding (codec) services
provided by the patented wavelet based Lightning Strike LSVXT
Codec.  ESPRE's business strategy focuses on building strong
partnerships by investing in companies that define the leading
edge of video collaboration.


EXACT SCIENCES: Signs Strategic Transaction With Genzyme
--------------------------------------------------------
EXACT Sciences Corporation (NASDAQ: EXAS) has formed a strategic
relationship with Genzyme Corp. (NASDAQ: GENZ) pursuant to which
Genzyme has acquired certain intellectual property assets related
to the fields of prenatal and reproductive health as well as three
million shares of EXACT common stock.  Under the transaction,
EXACT retained exclusive worldwide rights to its colorectal cancer
screening and stool-based DNA testing intellectual property, and
will receive a share of Genzyme's sublicensing income derived from
the purchased intellectual property outside the fields of prenatal
and reproductive health.

Jeffrey R. Luber, EXACT's President and Chief Executive Officer,
said, "This strategic relationship with Genzyme is an important
milestone in EXACT's continued evolution and will serve as a solid
platform for us to grow our oncology diagnostics business.
Genzyme is one of the world's leading biotechnology companies and
this transaction offers an ideal relationship for EXACT.  In
addition to the substantial infusion of capital into EXACT, we
believe that our ability to access Genzyme's extensive development
and regulatory expertise will facilitate our efforts toward the
introduction of our next-generation platform for colorectal cancer
screening."

"This transaction will bring Genzyme intellectual property in
support of our development of non-invasive prenatal testing and
other advanced diagnostic testing services," said Jon L. Hart,
Senior Vice President and General Manager, Genzyme Genetics. "We
have a responsibility to bring forward more advanced testing
options for physicians and families and we are strongly committed
to driving continued innovation in this field.  We are pleased to
be shareholders in EXACT and believe that our relationship may
facilitate their important mission to bring novel stool-based
cancer diagnostics to the public."

On January 27, 2009, the company consummated the Sale Transaction
with Genzyme.

One of the company's directors, Connie Mack, III, is also a
director of Genzyme.  Mr. Mack recused himself from the approval
of the transactions between the company and Genzyme.

                     Terms of the Transaction

The transaction provides for EXACT to receive $24.5 million in
cash in total.  At closing, EXACT received $16.65 million, with an
additional $1.85 million to be received over the next 18 months,
contingent upon the non-occurrence of certain events, in exchange
for the sale and license of certain of EXACT's intellectual
property assets, including those relating to reproductive and
prenatal health.  In addition, Genzyme purchased 3.0 million
shares of EXACT common stock at $2.00 per share for an aggregate
purchase price of $6.0 million. The per share purchase price
represents a 127% premium to the 30-day average closing price of
EXACT shares as of Market close on Monday, January 26.

EXACT will retain rights to the technology for stool-based
detection of any disease and stool or blood-based screening assays
for colorectal cancer in patient samples.  Further, EXACT will
receive exclusive rights in these fields to improvements to the
purchased intellectual property that may be developed by Genzyme.
EXACT will also receive rights in these fields to improvements
resulting from any joint developments between EXACT and Genzyme.

In addition, EXACT and Genzyme have amended their March 1999
license to provide EXACT with the additional rights necessary to
distribute FDA approved kits for stool-based detection of disease
and colorectal cancer screening based on the detection of APC and
P53 mutations.  The license amendment as well as the ongoing
assumption by Genzyme of certain patent costs will reduce EXACT's
cash outlays going forward.

The companies have also agreed to form a joint advisory committee
to assist both parties in the achievement of product development
goals related to the purchased IP and to assist EXACT with its
regulatory goals.  Genzyme and EXACT's joint advisory committee
will consist of internal experts and outside advisors who are
recognized leaders in the technological, clinical, and regulatory
aspects of diagnostic testing who will advise both organizations
on their product development objectives.  Finally, Genzyme has
agreed to pay EXACT a double digit percentage of any sublicensing
income that it receives outside the field of reproductive and
prenatal health which utilize the intellectual property.

                      EXACT's Strategic Plan

Going forward, EXACT plans to focus on the development of a
Version 3 colorectal cancer screening test based on an improved
DNA detection technology developed by Johns Hopkins University.
Previously, EXACT announced the published results from a proof of
concept study using the BEAMing technology, an advanced form of
digital PCR, in which stool and blood plasma were assessed in a
head-to-head comparison for the detection of colorectal cancer
(CRC).  Study results demonstrated 92 percent sensitivity for
detecting CRC in stool samples.  These data were published in the
August 2008 issue of Gastroenterology in a paper entitled
"Analysis of Mutations in DNA Isolated from Plasma and Stool of
Colorectal Cancer Patients."  The newly expanded APC/P53 gene
license with Genzyme to the key genetic markers used in the August
BEAMing publication will facilitate the Company's efforts to offer
FDA-approved kits based on such a Version 3 technology.

EXACT intends to resume sample collection for a clinical trial
aimed at securing FDA clearance or approval for a new Version 3
technology for non-invasive colorectal cancer screening.  The
Company currently plans to design the trial based on its extensive
discussions held with the FDA in mid 2008 and will seek input from
Genzyme through the joint advisory committee.  EXACT intends to
re-start the sample accrual process during the current fiscal
quarter.  This should allow EXACT to submit an application for FDA
approval in 2011, assuming its platform development and sample
collection goals have been met prior to this date.  Achieving
development goals more quickly may allow EXACT to pursue CLIA
launch of a Version 3 test by early 2011, an opportunity the
company plans to evaluate as part of its strategic plan.  The
Company also intends to continue its evaluation of related
technologies, resources, and relationships that can accelerate its
overall progress and allow it to access adjacent opportunities
such as aero-digestive cancer screening.

EXACT remains encouraged by the recent momentum in state-based
mandates for coverage of sDNA testing following its inclusion in
the March 2008 American Cancer Society guidelines recommendation.
The Company intends to continue its work with health insurers and
other third party payors around the country to expand coverage.

Based on current expectations, EXACT believes that its cash
resources should last into 2011, which would allow the Company to
be opportunistic in seeking the further financing that will be
needed to develop and launch a Version 3 test.  The Company is
continuing to develop a detailed implementation plan for its
Version 3 technology.

Merriman Curhan Ford & Co. delivered an opinion to the board of
Exact Sciences as to the fairness of the transaction.

                        Management Update

In conjunction with the completion of this transaction, Jeffrey R.
Luber, EXACT's President and Chief Executive Officer, has
announced his intention to work with the Board to find a new CEO
with product and commercial development expertise directly aligned
with EXACT's next phase of growth.  To that end, the Board has set
up a search committee to initiate the search process for a new
Chief Executive Officer.  Mr. Luber intends to remain President
and CEO until the appointment of his replacement.

Patrick J. Zenner, Chairman of the Board of Directors of EXACT,
said, "We applaud Jeff for his many successes at EXACT, including
leading us through inclusion in the American Cancer Society
screening guidelines and this very successful strategic
relationship with Genzyme.  Jeff has played a pivotal role, on so
many levels, in putting in place a platform for EXACT's future
success, for which all of us on the Board are sincerely
appreciative."

"It remains a privilege to be part of a public health story as
important as EXACT Sciences," commented Mr. Luber.  "It is equally
gratifying to work with such a dedicated and passionate team of
board members and managers, all with the same goal in mind-
decreasing mortality from colorectal cancer through the power of
DNA.  I look forward to working with the Board through this
important period of transition."

On January 27, 2009, upon, and as a result of, the consummation of
the transactions with Genzyme, the Company's Board of Directors
awarded bonuses to certain of the Company's employees pursuant to
the terms of their Employee Retention Agreements with the Company,
each dated April 18, 2008.  The Transaction Bonuses included cash
bonuses of $315,000 to Mr. Luber, the Company's current President
and Chief Executive Officer, and $230,000 to Charles R. Carelli,
Jr., the Company's Senior Vice President, Chief Financial Officer,
Treasurer and Secretary.  The Transaction Bonuses were awarded in
lieu of the Company's annual bonus program.

                         About Genzyme

One of the world's leading biotechnology companies, Genzyme is
dedicated to making a major positive impact on the lives of people
with serious diseases. Since 1981, the company has grown from a
small start-up to a diversified enterprise with more than 10,000
employees in locations spanning the globe and 2008 revenues of
$4.6 billion.  In 2007, Genzyme was chosen to receive the National
Medal of Technology, the highest honor awarded by the President of
the United States for technological innovation.

With many established products and services helping patients in
nearly 90 countries, Genzyme is a leader in the effort to develop
and apply the most advanced technologies in the life sciences. The
company's products and services are focused on rare inherited
disorders, kidney disease, orthopaedics, cancer, transplant and
immune disease, and diagnostic testing.  Genzyme's commitment to
innovation continues today with a substantial development program
focused on these fields, as well as cardiovascular disease,
neurodegenerative diseases, and other areas of unmet medical need.

                       About EXACT Sciences

EXACT Sciences Corporation was incorporated in February 1995.  The
company has developed proprietary DNA-based technologies for use
in the detection of cancer.  The company has selected colorectal
cancer as the first application of its technologies.  The company
has licensed certain of its technologies, including improvements
to such technologies, on an exclusive basis through December 2010
to Laboratory Corporation of America(R) Holdings for use in a
commercial testing service for the detection of colorectal cancer
developed by LabCorp.  The company has devoted the majority of its
efforts to date on research and development and commercialization
support of its colorectal cancer detection technologies.

As reported in the Troubled Company Reporter on Nov. 25, 2008,
As of Sept. 30, 2008, Exact Sciences Corporation's consolidated
balance sheet showed total assets of $7,287,000, total current
liabilities of $6,106,000, and deferred license fees (less current
portion) of $1,688,000, resulting in a stockholders' deficit of
$507,000.

The audit opinion with respect to the company's consolidated
financial statements for the year ended December 31, 2007, issued
by its independent registered public accounting firm included an
explanatory paragraph to emphasize that there is substantial doubt
about the company's ability to continue as a going concern.


EXACT SCIENCES: Sequenom Terminates Exchange Offer
--------------------------------------------------
On January 28, 2009, Sequenom, Inc., said it is terminating its
exchange offer to acquire all of the outstanding shares of common
stock of EXACT Sciences Corporation (NASDAQ: EXAS) without
accepting for exchange or exchanging any shares of EXACT Sciences
common stock. Sequenom had previously announced that it would
terminate the exchange offer if EXACT Sciences entered into any
out-licensing agreement, collaboration or financial restructuring.
Sequenom continues to be committed to building its oncology
diagnostic franchise.

                         About Sequenom

Sequenom -- http://www.sequenom.com/-- is committed to providing
the best genetic analysis products that translate the results of
genomic science into solutions for noninvasive prenatal
diagnostics, biomedical research, translational research and
molecular medicine applications. Sequenom's proprietary
MassARRAY(R) system is a high-performance (in speed, accuracy and
cost efficiency) nucleic acid analysis platform that
quantitatively and precisely measures genetic target material and
variations. Sequenom has exclusively licensed intellectual
property rights for the development and commercialization of
noninvasive prenatal genetic tests for use with the MassARRAY
system and other platforms.

Sequenom(R) and MassARRAY(R) are registered trademarks of
Sequenom, Inc.

                       About EXACT Sciences

EXACT Sciences Corporation was incorporated in February 1995.  The
company has developed proprietary DNA-based technologies for use
in the detection of cancer.  The company has selected colorectal
cancer as the first application of its technologies.  The company
has licensed certain of its technologies, including improvements
to such technologies, on an exclusive basis through December 2010
to Laboratory Corporation of America(R) Holdings for use in a
commercial testing service for the detection of colorectal cancer
developed by LabCorp.  The company has devoted the majority of its
efforts to date on research and development and commercialization
support of its colorectal cancer detection technologies.

As reported in the Troubled Company Reporter on Nov. 25, 2008,
As of Sept. 30, 2008, Exact Sciences Corporation's consolidated
balance sheet showed total assets of $7,287,000, total current
liabilities of $6,106,000, and deferred license fees (less current
portion) of $1,688,000, resulting in a stockholders' deficit of
$507,000.

The audit opinion with respect to the company's consolidated
financial statements for the year ended December 31, 2007, issued
by its independent registered public accounting firm included an
explanatory paragraph to emphasize that there is substantial doubt
about the company's ability to continue as a going concern.


FORD MOTOR: Credit Unit Posts $1.5 Billion Net Loss in 2008
-----------------------------------------------------------
Ford Motor Credit Company reported a net loss of $1.5 billion in
2008, a decrease of $2.3 billion from net income of $775 million a
year earlier.  On a pre-tax basis, Ford Motor Credit reported a
loss of $2.6 billion in 2008, including the second quarter 2008
impairment charge of $2.1 billion for North America operating
leases, compared with earnings of $1.2 billion in the previous
year.  The decrease in full year pre-tax earnings is more than
explained by the impairment charge, a higher provision for credit
losses, and higher depreciation expense for leased vehicles.

In the fourth quarter of 2008, Ford Motor Credit's net loss was
$228 million, down $414 million from a year earlier.  On a pre-tax
basis, Ford Motor Credit reported a loss of $372 million in the
fourth quarter, compared with earnings of $263 million in the
previous year.  The decrease in fourth quarter pre-tax earnings
primarily reflected a higher provision for credit losses, higher
net losses related to market valuation adjustments to derivatives,
lower volume, and lower financing margin.  Lower operating costs
were largely offset by other expenses.

"The drastic and rapid deterioration in the economy, credit
markets and auto sales in 2008 brought unprecedented challenges to
Ford Motor Credit.  The historic decline in used-vehicle auction
prices across the industry affected our North American lease
portfolio and led to a second quarter impairment," Chairman and
CEO Mike Bannister said. "Tough external challenges are expected
in 2009.  However, we will continue to manage our business through
consistent and sound risk management, lending and servicing
practices."

On December 31, 2008, Ford Motor Credit's on-balance sheet net
receivables totaled $116 billion, compared with $141 billion at
year-end 2007.  Managed receivables were $118 billion on
December 31, 2008, down from $147 billion on December 31, 2007.
The lower receivables primarily reflected lower North America
receivables, changes in currency exchange rates, the impact of
divestitures and alternative business arrangements, and the second
quarter 2008 impairment charge for North America operating leases.

Ford Motor Credit also is restructuring its U.S. operations to
meet changing business conditions, including lower auto sales and
the planned reduction in Jaguar, Land Rover and Mazda receivables,
and to maintain a competitive cost structure. The restructuring
will affect servicing, sales and central operations and eliminate
about 1,200 staff and agency positions, or about 20 percent.  The
reductions will occur in 2009 through attrition, retirements and
involuntary separations.

                     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.


FORD MOTOR: Secures Maximum $10.1 Billion Under Credit Line
-----------------------------------------------------------
Ford Motor Company has drawn $10.1 billion, effectively using up
all available amounts under its $11.5 billion revolving credit
line.

"Due to concerns about the instability in the capital markets with
the uncertain state of the global economy, on January 29, 2009, we
gave notice to borrow the total unused amount (i.e., $10.9
billion) under our $11.5 billion secured revolving credit facility
entered into in December 2006," Ford said in a regulatory filing
with the Securities and Exchange Commission.

On February 3, 2009, the requested borrowing date, the lenders
under that facility advanced to FOrd $10.1 billion.  The $890
million commitment of Lehman Commercial Paper Inc., one of the
lenders under the facility, was not advanced because of Lehman
Commercial Paper Inc. having filed for protection under Chapter 11
of the U.S. Bankruptcy Code on October 5, 2008.

The $10.1 billion revolving loan will bear interest at LIBOR plus
a margin of 2.25% and will mature on December 15, 2011.

Ford is the only U.S. automaker to forego assistance from the U.S.
government.  Chrysler LLC and General Motors Corp. have obtained
loans from the U.S. Treasury to improve their liquidity position.

                     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 purpose.


FORD MOTOR: January Sales Decrease 39% to 90,596 Units
------------------------------------------------------
Ford Motor Company said that Ford, Lincoln and Mercury sales
totaled 90,596 in January, down 39% versus a year ago.  Retail
sales to individual customers were down 27%.  Fleet sales were
down 65% including a 90% decline in sales to daily rental
customers.

Ford and industry sales in January were consistent with Ford
planning assumptions.

"During the last four months, retail demand appears to have
stabilized, and the strength of our new products is a key reason
we're growing our share in these challenging market conditions,"
said Ken Czubay, Ford vice president, Sales and Marketing.  "We
expect new, recent and future fiscal and monetary actions to help
improve conditions in the second half of the year."

Ford inventories were 420,000 vehicles at the end of January,
which is 156,000 vehicles lower than a year ago.  During the past
12 months, Ford's inventories were reduced by 27% -- consistent
with the company's sales decline (22%) during this same period.

Ford's F-Series truck and Fusion mid-size sedan paced Ford to a
fourth consecutive month of retail market share increases.  Ford
estimates its share of the January retail market was 12.7%, up 0.3
point versus a year ago.  This marks the first time since 1995
Ford has achieved a retail market share increase four months in a
row.

In January, Ford's all-new F-150 truck picked up more accolades
and market share.  In January, the F-150 was named North American
Truck of the Year and earned a quadruple 5-star crash test rating
from the National Highway Traffic Safety Administration and a Top
Safety Pick from the Insurance Institute for Highway Safety.
Best-in-class capability and safety ratings and unsurpassed fuel
economy appear to be driving F-Series appeal among buyers.

In January, the Fusion posted its highest retail share since
August 2006.  In March, the 2010 Fusion arrives in dealer
showrooms as America's most fuel-efficient mid-size sedan for both
hybrid and conventional gasoline models.

The new Fusion Hybrid delivers 41 mpg in the city and 36 mpg on
highway, topping the Toyota Camry Hybrid by 8 mpg in the city and
2 mpg on the highway.  The new four-cylinder Ford Fusion S
achieves 34 mpg on the highway and 23 mpg in the city, beating
both the gasoline-powered Camry and Honda Accord.

The Ford Escape and Mercury Mariner small utility vehicles and the
Lincoln MKS luxury sedan also contributed to Ford's January market
share increase.

          Warranty Repair Costs Drop Further in 2008

Ford's steady vehicle quality improvement in recent years is
beginning to translate into significant savings for the company
and far fewer trips by customers to the repair shop.

In the past two years alone, Ford has reduced its warranty repairs
costs by $1.2 billion, according to the latest company figures.
These savings can be attributed to four straight years of quality
improvements on Ford, Lincoln and Mercury vehicles.  Ford's
initial quality is now in a virtual tie with Honda-Acura and
Toyota-Lexus-Scion for the 2008 model year, according to the
latest U.S. Global Quality Research System (GQRS) study.

Ford strives to be best in class in every phase of vehicle
development -- from design to pre-delivery -- internal measures
continue to show the company is making significant quality
strides.

The warranty repair rate for Ford, Lincoln and Mercury vehicles in
the United States is now almost 50 percent lower than it was in
2004.

Ford F-Series Super Duty and Lincoln Mark LT rank atop their
respective segments with fewest "things gone wrong" (TGW) and in
customer satisfaction.

Ford Mustang GT500 had the least number of TGWs among sports cars.

Overall, 18 of 24 Ford domestic brand vehicles posted TGW
improvements.

"Ford is following a set of standardized processes around the
world in product development, manufacturing and purchasing with a
discipline this company has never seen," said Bennie Fowler, Ford
group vice president, Global Quality.

Continued Improvements

The drive to improve quality is most evident during a new-model
launch. Since 2005, each new model from Ford has consistently
delivered better quality -- as measured by warranty rates and
things-gone-wrong metrics -- than the models they replaced.

"The last 24 months have revealed some of our best quality
results," said Curt Yun, director, Global Warranty.  "Our new
models have been achieving continuously declining warranty repair
rates and lower warranty costs, as a direct result of our overall
quality improvements."

In the U.S., for example, owners of Ford, Lincoln and Mercury
vehicles have reported fewer concerns at three years in service
for each of the past five years, according to the Global Quality
Research System (GQRS) survey, compiled for Ford by the research
firm RDA Group.

"We've reached the point where our initial quality is second to
none among the full-line manufacturers," said Mr. Fowler.  "We
expect that high quality to be reflected in future high-mileage
surveys as our new models age."

                     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.


FORD MOTOR: May Need Financial Assistance From U.S. Gov't.
----------------------------------------------------------
Jeff Green and Alan Ohnsman at Bloomberg News reports that
Barclays Plc analyst Brian Johnson said that Ford Motor Co. is
likely to need financial assistance from the U.S. government this
year.

Bloomberg relates that Ford Motor CEO Alan Mulally told analysts
and investors during a conference call last week that Ford Motor
wouldn't need assistance.  The report says that Ford Motor took
new precautions with a deeper cut in first quarter output, a lower
estimate of this year's domestic auto demand, and a decision to
tap a $10.1 billion credit line.  On Jan. 29, Ford Motor posted a
$14.6 billion full-year deficit, according to the report.  The
report states that Ford Motor used up $5.5 billion in cash in the
fourth quarter 2008 as its sales dropped 30%.

According to Bloomberg, Mr. Johnson cut his target forFord Motor
shares to $1 from $4 and rates the company as "underweight".

                     About Ford Motor Co.

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

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

                         *     *     *

As reported by the Troubled Company Reporter on Feb. 2, 2009,
Standard & Poor's Ratings Services said that its ratings on Ford
Motor Co. (CCC+/Negative/--) and related entities are not affected
by Ford Motor's announcement that it plans to immediately draw
nearly all of its $10.6 billion revolving credit facility.

According to the TCR on Feb. 2, 2009, Moody's Investors Service
said that Ford Motor Company's Caa3 Corporate Family Rating and
Probability of Default rating remain unchanged following the
company's announcement of net losses of $5.9 billion for the
fourth quarter of 2008 and $14.6 billion for the full year.


FORTUNOFF FINE JEWELRY: May Seek 2nd Bankruptcy & Liquidate
-----------------------------------------------------------
Fortunoff Fine Jewelry & Silverware LLC may file for bankruptcy
protection soon, Bloomberg reported, citing people familiar with
discussions between Fortunoff and liquidators.

Fortunoff Fine Jewelry closed its Manhattan store and is in talks
with companies to liquidate most of its merchandise, Bloomberg
said.

Bloomberg notes that the liquidation would come one year after
Fortunoff last sought bankruptcy protection and was purchased by
NRDC, owner of the Lord & Taylor department-store chain.

         About Fortunoff Fine Jewelry and Silverware LLC

New York-based Fortunoff Fine Jewelry and Silverware LLC --
http://www.fortunoff.com/-- started out as a family-owned
business founded by Max and Clara Fortunoff in 1922, until it
merged with M. Fortunoff of Westbury, L.L.C. and Source Financing
Corporation in 2004.  Fortunoff offers customers fine jewelry and
watches, antique jewelry and silver, everything for the table,
fine gifts, home furnishings including bedroom and bath, fireplace
furnishings, housewares, and seasonal shops including outdoor
furniture shop in summer and enchanting Christmas Store in the
winter.  It opened some 20 satellite stores in the New Jersey,
Long Island, Connecticut and Pennsylvania markets featuring
outdoor furniture and grills during the Spring/Summer season and
indoor furniture (and in some locations Christmas trees and decor)
in the Fall/Winter season.

Fortunoff and its two affiliates filed for chapter 11 petition on
Feb. 4, 2008 (Bankr. S.D.N.Y. Case Nos. 08-10353 through 08-10355)
in order to effectuate a sale to NRDC Equity Partners LLC, --
http://www.nrdcequity.com/-- a private equity firm that bought
Lord & Taylor from Federated Department Stores.

Due to the U.S. Trustee's objection, Fortunoff backed out of
its request to employ Skadden Arps Meagher & Flom LLC, as
bankruptcy counsel.  Fortunoff hired Togut Segal & Segal LLP,
as their general bankruptcy counsel instead, but Skadden Arps will
continue to serve the Debtors as special counsel in connection
with the sale the Debtors' assets.  Logan & Company, Inc., serves
as the Debtors' claims, noticing, and balloting agent.  FTI
Consulting Inc. are the Debtors' proposed crisis manager.

An Official Committee of Unsecured Creditors has been appointed in
this case.  Effective March 6, 2008, Morrison & Foerster LLP is
counsel to the Creditors Committee in substitution of Otterbourg
Steidler Houston & Rosen PC.  Mahoney Cohen & Company, CPA, P.C.,
serves as financial advisor to the Creditors' Committee.

In their schedules, Fortunoff Fine Jewelry listed $5,052,315 total
assets and $136,626,948 total liabilities; Source Financing Corp.
listed $154,680,100 total assets and $176,961,631 total
liabilities; and M. Fortunoff of Westbury LLC listed $6,300,955
total assets and $119,985,788 total liabilities.

Fortunoff sold substantially all of their assets, including their
"Fortunoff" and "The Source" trademarks, on March 7, 2008, to NRDC
Equity Partners LLC's H Acquisition LLC, now known as Fortunoff
Holdings LLC.

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


FREMONT GENERAL: Court Moves Plan Filing Deadline to Feb. 20
------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
extended Fremont General Corp.'s exclusive period to file a
Chapter 11 plan through Feb. 20.

The Court previously approved Fremont's first request for an
extension -- granting it additional 106 days, or until Jan. 31, to
prepare its Plan.  The Official Committee of Unsecured Creditors,
according to Bloomberg's Bill Rochelle, was unsuccessful in
blocking a second extension.

The Court scheduled another hearing on Feb. 19 to consider a
subsequent extension, Lee Bogdanoff, an attorney for the Creditors
Committee said in an interview, according to Bloomberg.

The Committee, Mr. Rochelle reported, said it was prepared to file
a confirmable plan to liquidate the remaining assets and
distribute the proceeds in the order of priority prescribed in
bankruptcy law.

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

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


FRONTIER AIRLINES: Court Junks Teamsters' Bid to Impose Stay
------------------------------------------------------------
Judge Robert Drain of the U.S. Bankruptcy Court for the Southern
District of New York denied a request of the Teamsters Airline
Division of the International Brotherhood of Teamsters to enforce
a stay in the bankruptcy cases of Frontier Airlines Inc. and its
debtor-affiliates, pending a ruling on the union's appeal brought
before the U.S. District Court for the Southern District of New
York.

Judge Drain denied the union's request for reasons stated at the
hearing held January 27, 2009.

In its Appeal, the Union asked the District Court to determine,
among other things, whether the Bankruptcy Court erred in
granting the Debtors' motion to reject its collective bargaining
agreements with the Teamsters, "notwithstanding evidence that the
airline failed to negotiate in good faith."

Judge Drain's Order was hinged upon Frontier's plan to furlough
its heavy maintenance workers during periods in which the airline
does not require heavy maintenance work, and recall these workers
during periods that Frontier has work available.

The Union maintained that a Stay pending the Appeal would apply
to the scope, and the subcontracting provisions of, the CBAs.

However, the Debtors argued that the imposition of the Stay is
not necessary because Frontier's outsourcing of C-check work is a
distant prospect or a last resort that, as all parties agree, is
not likely to occur in months or years.

The Teamsters reasoned out that the absence of a Stay will
potentially harm the Airline Division and the mechanics that the
Union represents because "the threshold needed to justify
permanent subcontracting of all heavy maintenance work can be
reached in a matter of weeks while the Appeal is pending."

        Teamsters: Halt Aircraft Repairs Outsourcing

Teamsters General President Jim Hoffa sent a letter to House
Speaker Nancy Pelosi urging her to include in the 2008-2009
National Economic Stimulus Bill a moratorium on outsourcing
aircraft maintenance to foreign repair stations, the Union
disclosed in an official statement posted on its Web site.

In his letter dated January 26, 2009, Mr. Hoffa noted that
"airlines that received taxpayer subsidies after the September 11
attacks laid off their aircraft mechanics and sent their
maintenance work to repair stations in developing countries."

"The outsourcing of skilled American jobs is best illustrated by
the plight of the thousands of highly skilled aviation mechanics
who work in the airline industry," Mr. Hoffa wrote.

Mr. Hoffa further pointed out that workers at foreign repair
stations are not required to hold a Federal Aviation
Administration license to work on an aircraft, to which he cited
that "the solution is simple: the international aviation industry
needs a single, high regulatory standard."

For more than a decade, the Transportation Department's office of
inspector general has cited problems stemming from a double
standard on aircraft maintenance.  For the 11 years ending in
2007, U.S. airlines' outsourced maintenance expenses increased
from 37 percent to 64 percent, Teamsters said in its official
statement.

A moratorium on outsourcing aircraft maintenance overseas would
preserve skilled American jobs, help stabilize the economy and
provide Congress an opportunity to examine this issue when the
FAA reauthorization is deliberated in the spring, the Union
affirmed.

"I urge you and your colleagues take every necessary step to
ensure that the stimulus package include a moratorium on any
additional outsourcing of foreign aircraft maintenance," Mr.
Hoffa wrote.

A full-text copy of Mr. Hoffa's Letter is available at no charge
At: http://ResearchArchives.com/t/s?38f7

                   About Frontier Airlines Inc.

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

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

Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines
Bankruptcy News.  The newsletter tracks the Chapter 11 proceedings
of Frontier Airlines Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


FRONTIER AIRLINES: Orange County Disputes Cure Amount on Lease
--------------------------------------------------------------
The county of Orange, a political subdivision of the state of
California, says it does not object to the request of Frontier
Airlines, Inc., to assume their prepetition Certificated Passenger
Airline Lease with Orange County dated January 1, 2006, under
which the County granted Frontier the right to operate at John
Wayne Airport.

The County, however, argues that contrary to the Debtors'
assertion, the amount to cure the default of the lease aggregates
$71,312, which should be satisfied pursuant to Section 365(b)
Bankruptcy Code.

The Debtors are seeking authority from the U.S. Bankruptcy Court
for the Southern District of Florida to assume the Lease, among 24
other Leases, effective as of February 9, 2009, and pay the cure
amount of $44,146.

Orange County's books and records reveal that as of January 27,
2009, the Cure Amount under the Lease is comprised of (i) $44,146
due as of the Petition Date; and (ii) $27,166 due postpetition,
on account of unpaid fees and charges, Mark A. Salzberg, Esq., at
Foley & Lardner LLP, in Washington, D.C., tells the Court.
Moreover, he adds, the Debtors should not be permitted to freeze
the Cure Payment to an amount which was calculated as of a date
prior to the Assumption Date.  Frontier's obligations under the
Lease continue to accrue during the pendency of their request and
will continue to accrue up through the date of assumption.

"Since the cure amount is an evolving number, the cure amount
must be calculated as of the effective date of the assumption and
assignment of the Lease," Mr. Salzberg tells Judge Drain.

As previously reported, the Debtors asked the Court to
(i) authorize their assumption of 24 Leases including the Lease
with Orange County, and (ii) extend the time period during
which they may assume or reject non-residential real property
leases, as consented by the Lessors.

                   About Frontier Airlines Inc.

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

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

Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines
Bankruptcy News.  The newsletter tracks the Chapter 11 proceedings
of Frontier Airlines Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


FRONTIER AIRLINES: Asks Court to Approve LiveTV Service Deals
-------------------------------------------------------------
LiveTV, LLC is a provider of in-seat video entertainment systems,
equipment and related services, which Frontier Airlines utilizes
in certain of its aircraft pursuant to these agreements:

Agreement                             Service Provided by LiveTV
---------                             --------------------------
Amended and Restated LTV2000          installation of hardware
In-Flight Entertainment Service       used to provide in-flight
Agreement, with an effective          entertainment
dated as of January 1, 2008
(Original IFE Service Agreement)

Amended and Restated LTV2000          programming and
In-Flight Entertainment               maintenance services
Hardware Agreement, with an
effective date of January 1, 2008
(Original IFE Hardware Agreement)

Onboard Sales System Lease and        electronic transaction
Service Agreement dated               hardware and services
April 19, 2007
(Cashless Cabin Agreement)

Pursuant to Sections 105(a) and 363(b) of the Bankruptcy Code, the
Debtors seek permission from the U.S. Bankruptcy Court for the
Southern District of New York to enter into and perform under the
terms of:

  (1) the Termination and Resolution Agreement with LiveTV,
      which provides for the termination of the Original IFE
      Hardware Agreement, the Original IFE Service Agreement and
      the Cashless Cabin Agreement;

  (2) a Replacement In-Flight Entertainment System Hardware
      Agreement; and

  (3) a Replacement In-Flight Entertainment System Service
      Agreement.

Damian S. Schaible, Esq., at Davis Polk & Wardwell, in New York,
relates that due to the rationalization of Frontier's fleet since
the Petition Date and the current market conditions, the Cashless
Cabin Agreement and the Original IFE Agreements are no longer
economical for Frontier.

In this regard, the Debtors and LiveTV have negotiated a
Resolution Agreement, which contemplates:

  -- that the Cashless Cabin Agreement and the Original IFE
     Agreements will be consensually terminated and will have no
     further force or effect;

  -- LiveTV's return to Frontier of a portion of the amounts
     that the airline paid LiveTV pursuant to the Cashless Cabin
     Agreement; and

  -- that the Original IFE Agreements constitutes complete
     payment of all obligations owed between the parties as of
     October 31, 2008, pursuant to the Cashless Cabin Agreement
     and the Original IFE Agreements.

According to Mr. Schaible, Frontier and LiveTV have each waived
any and all claims and causes of action of any kind against the
other party arising out of or relating to the Cashless Cabin
Agreement or the Original IFE Agreements.  The parties have
consequently agreed to enter into the Replacement IFE Agreements,
which contain terms more favorable to Frontier than the Original
IFE Agreements.

Mr. Schaible maintains that while the economics of the Cashless
Cabin Agreement and the Original IFE Agreements have become
unfavorable to Frontier, the Resolution Agreement and Replacement
IFE Agreements will (i) preserve the equipment and services
important to the Debtors' businesses and (ii) ensure that LiveTV
will not assert any claims or causes of action in connection with
the Terminations.

Additionally, the return of a portion of the amounts Frontier
paid to LiveTV pursuant to the Cashless Cabin Agreement and the
Original IFE Agreements provides an immediate liquidity benefit
to the Debtors' estates, he adds.

Therefore, the Debtors' request will have a positive financial
effect on their finances, as it eliminates the costs of
unnecessary cashless cabin hardware and services while
maintaining their critical in-flight entertainment hardware and
service relationship with LiveTV on terms more favorable to the
Debtors.

Mr. Schaible says that the Resolution Agreement, the Cashless
Cabin Agreement, the Original IFE Agreements and the Replacement
IFE Agreements each contain highly sensitive commercial
information and provisions requiring Frontier to keep the
Agreement terms confidential.

Accordingly, he notes, the Debtors will provide copies of the
Agreements to the Court, the U.S. Trustee and the Statutory
Committee of Unsecured Creditors.  Failure to describe in any
provision of the Agreements in their request will not affect
their enforceability.

The Court will convene a hearing on February 19, 2009, to
consider the Debtors' request.  Objections, if any, must be filed
on or before February 9.

                   About Frontier Airlines Inc.

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

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

Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines
Bankruptcy News.  The newsletter tracks the Chapter 11 proceedings
of Frontier Airlines Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


GENERAL MOTORS: Percy Barnevik Leaves Firm's Board of Directors
---------------------------------------------------------------
Percy N. Barnevik, retired chairperson of AstraZeneca PLC, has
resigned from General Motors Corp.'s Board of Directors for
personal reasons, effective Feb. 3, 2009.

"I have been proud to serve on GM's Board the past 12 years," Mr.
Barnevik said.  "I remain a strong supporter of management and the
Board of GM, and of the direction the company is taking.  I wish
the GM team ongoing success as they implement their restructuring
plan and position the company for long-term viability and success
in this most challenging of global industries."

"Percy has played a very active and important role on GM's Board,"
noted George M.C. Fisher, GM board's presiding director.  "We are
sorry that he is leaving, and wish him the best."

Mr. Barnevik was chair of GM's Public Policy Committee and served
on the Directors and Corporate Governance Committee.

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

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

As reported in the Troubled Company Reporter on Nov. 10, 2008,
General Motors Corporation's balance sheet at Sept. 30, 2008,
showed total assets of US$110.425 billion, total liabilities of
US$170.3 billion, resulting in a stockholders' deficit of
US$59.9 billion.

                       *     *     *

As reported in the Troubled Company Reporter on Nov. 11, 2008,
Standard & Poor's Ratings Services lowered its ratings, including
the corporate credit rating, on General Motors Corp. to 'CCC+'
from 'B-' and removed them from CreditWatch, where they had been
placed with negative implications on Oct. 9, 2008.  S&P said that
the outlook is negative.

Fitch Ratings, as reported in the Troubled Company Reporter on
Nov. 11, 2008, placed the Issuer Default Rating of General Motors
on Rating Watch Negative as a result of the company's rapidly
diminishing liquidity position.  Given the current liquidity level
of US$16.2 billion and the pace of negative cash flows, Fitch
expects that GM will require direct federal assistance over the
next quarter and the forbearance of trade creditors in order to
avoid default.  With virtually no further access to external
capital and little potential for material asset sales, cash
holdings are expected to shortly reach minimum required operating
levels.  Fitch placed these on Rating Watch Negative:

  -- Senior secured at 'B/RR1';
  -- Senior unsecured at 'CCC-/RR5'.

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


GENERAL MOTORS: Settlement Reached in "Soders v. GM" Class Suit
---------------------------------------------------------------
A proposed settlement has been reached in the class action lawsuit
"Soders v. General Motors Corp., No. CI-00-04255," involving GM's
marketing programs for its Chevrolet, GMC Truck, Cadillac,
Oldsmobile, Buick and Pontiac Divisions, as well a prices paid
paid for new vehicles in Pennsylvania.

The case revolves around GM adding 1% of the Manufacturers
Suggested Retail Price to the invoice for certain new vehicles it
sold to its dealers, as part of the U.S. automaker's  "Marketing
Initiative" programs.  The lawsuit claims that GM required dealers
to use the 1% amount for advertising, and that this violated
Pennsylvania Law.  The lawsuit also claims that dealers passed
this amount on to consumers when they purchased vehicles.  GM
disclaims any wrongdoing and asserts that the 1% was a legal,
wholesale price increase to its dealers, and that dealers did not
necessarily pass on the 1% amount to each purchaser.  Both sides
have to the settlement.

Under the proposed settlement, GM will provide rebate certificates
worth up to $200 which can be used toward the purchase or lease of
a new GM vehicle.  These certificates will be valid for a period
of three years from the date the court grants final approval to
the settlement.  Up to two certificates may be used toward the
purchase of one vehicle.

Only those who purchased a new GM vehicle at retail from a
franchised GM dealer in Pennsylvnia on or before March 31, 1999,
but after (a) Sept. 1, 1988, for Chevrolet or GMC Truck vehicles;
(b) July 1, 1989, for Cadillac or Oldsmobile vehicles;
(c) July 1,  1990, for Pontiac vehicles; and (d) Aug. 1, 2990 for
Buick vehicles, may ask for a rebate certificate.

More details about the proposed settlement can be found at
www.onepercentcase.com or by calling 1-888-866-1738.

At any time during the three years that the rebate certificates
are valid, members of the class may transfer them, at full value,
to anyone living at the same address or to their parents or
children.  During the last two years, the rebate certificates may
be transferred to anyone, but they will have a reduced value of
$75 or $150, depending on the value of the original certificate.

To get a rebate certificate, members of the class need to fill out
and send in a claim form postmarked no later than June 15, 2009.

The Court will hold hearing in this case on April 28, 2009, to
consider whether to approve the settlement and a request by the
lawyers representing all Class Members for up to $2,386,000 in
attorneys' fees and costs.  They will also ask for a $5,000
payment to Donna Soders, who helped the lawyers on behalf of the
whole Class.  These payments, once approved, will be shouldered
separately by GM, and will not affect the amount available for
rebates.

The deadline to object to the settlement or request to appear and
speak at the hearing is March 16, 2009.

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

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

As reported in the Troubled Company Reporter on Nov. 10, 2008,
General Motors Corporation's balance sheet at Sept. 30, 2008,
showed total assets of US$110.425 billion, total liabilities of
US$170.3 billion, resulting in a stockholders' deficit of
US$59.9 billion.

                       *     *     *

As reported in the Troubled Company Reporter on Nov. 11, 2008,
Standard & Poor's Ratings Services lowered its ratings, including
the corporate credit rating, on General Motors Corp. to 'CCC+'
from 'B-' and removed them from CreditWatch, where they had been
placed with negative implications on Oct. 9, 2008.  S&P said that
the outlook is negative.

Fitch Ratings, as reported in the Troubled Company Reporter on
Nov. 11, 2008, placed the Issuer Default Rating of General Motors
on Rating Watch Negative as a result of the company's rapidly
diminishing liquidity position.  Given the current liquidity level
of US$16.2 billion and the pace of negative cash flows, Fitch
expects that GM will require direct federal assistance over the
next quarter and the forbearance of trade creditors in order to
avoid default.  With virtually no further access to external
capital and little potential for material asset sales, cash
holdings are expected to shortly reach minimum required operating
levels.  Fitch placed these on Rating Watch Negative:

  -- Senior secured at 'B/RR1';
  -- Senior unsecured at 'CCC-/RR5'.

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


GENERAL MOTORS: Vehicle Deliveries Drop 49% to 129,227 in January
-----------------------------------------------------------------
General Motors Corp. dealers in the United States delivered
129,227 vehicles in January, down 49 percent compared with a year
ago, driven by an 80 percent reduction in fleet sales.

Retail sales were off 38 percent, but retail market share held
steady compared with December.  GM's retail share performance was
assisted by reduced-rate APR financing capacity through GMAC and a
GM loyalty cash offer.  GM January total car sales of 43,943 were
off 58 percent and total truck sales (including crossovers) of
85,284 were down 42 percent compared with a year ago.
Additionally, retail sales for GM cars and crossovers combined
were about 65 percent of sales mix in the month.

"We're attacking this unprecedented market as aggressively as
possible, while offering more vehicles than ever that provide
great value and that Americans enjoy owning," said Mark LaNeve,
vice president of GM North America Vehicle Sales, Service and
Marketing.  "Our retail market share is a bright spot, holding
steady above 21 percent for the second month in a row.  That's a
full point above the trailing 12-month average.  It's important to
realize that we accomplished this retail performance as the
overall market ran about 6 million vehicles behind where it was
last January (on a seasonally-adjusted annual rate) and every
manufacturer was deeply impacted."

The newly-launched Chevrolet Traverse crossover continues to gain
traction in the market place with total sales of more than 5,200
vehicles.  Chevrolet's crossovers, HHR, Equinox and Traverse had
11,666 retail sales, a 10 percent increase compared with last
year.  The strength of Traverse's launch helped push retail sales
of all GM crossovers to 20 percent of all retail vehicles sold by
the automaker in January, up about 3 percentage points from a year
ago.

"It is important for America to realize that in cars and
crossovers, Chevy is fully competitive with Toyota and Honda and
continues to gain strength.  The Malibu is performing well and the
Traverse is building momentum," Mr. LaNeve added.  "We're doing
our part to get vehicle sales moving again.  For example, GMAC is
providing more reduced-rate APR financing capacity with the
Presidents Day Sale, and we're offering bonus cash on select
models.  Additionally, our national roll-out of the credit union
'Invest in America' program offers supplier pricing and available
credit union financing for millions of members."

A total of 923 GM hybrid vehicles were delivered in the month,
illustrating the wide range of hybrid product offerings available.
GM offers the Chevrolet Tahoe, GMC Yukon and Cadillac Escalade 2-
mode hybrid SUVs, the Chevrolet Malibu and Saturn Aura mid-size
sedan, and Saturn Vue compact crossover hybrids.

GM has announced reductions in first quarter production to adjust
inventories for marketplace demand.  This strategic move helped
reduce inventories and related costs for GM and its dealers during
this historic downturn, but the lack of production also meant that
fleet vehicles, which typically are built to order, have been
delayed.  GM's fleet sales of just over 13,000 vehicles in January
were at their lowest levels since 1975.

GM inventories dropped compared with a year ago. At the end of
January, only about 801,000 vehicles were in stock, down about
103,000 vehicles (or 11 percent) compared with last year.  There
were about 363,000 cars and 438,000 trucks (including crossovers)
in inventory at the end of January.  Inventories were reduced
about 70,000 vehicles compared with December.  Importantly, of the
pickup trucks in stock, 96 percent of the GMC Sierras and 97
percent of the Chevrolet Silverados are all-new 2009 models.

Certified Used Vehicles

January 2009 sales for all certified GM brands continue to be
robust after a strong gain a month earlier.  GM Certified Used
Vehicles, Saturn Certified Pre-Owned Vehicles Cadillac Certified
Pre-Owned Vehicles, Saab Certified Pre-Owned Vehicles, and HUMMER
Certified Pre-Owned Vehicles, combined sold 39,293 vehicles.

GM Certified Used Vehicles, the industry's top-selling certified
brand, posted January sales of 33,695 vehicles, up 1 percent from
January 2008. Saturn Certified Pre-Owned Vehicles sold 947
vehicles, up 73 percent.  Cadillac Certified Pre-Owned Vehicles
sold 3,864 vehicles, up 20 percent.  Saab Certified Pre-Owned
Vehicles sold 538 vehicles, up 25 percent, and HUMMER Certified
Pre-Owned Vehicles sold 249 vehicles, up 93 percent.

"The certified used vehicle programs are starting the year strong
despite the tight credit market and slowdowns in consumer spending
and retail demand for both new and used vehicles," said Mr.
LaNeve.  "We continue to offer consumers the largest selection of
certified vehicles and a worry-free purchasing experience that
comes with one of the best warranties in the business and a
factory-certified, 117-point fully-inspected vehicle."

January 2009 Production

In January, GM North America produced 65,000 vehicles (6,000 cars
and 59,000 trucks).  This is down 232,000 vehicles or 78 percent
compared with January 2008 when the region produced 297,000
vehicles (106,000 cars and 191,000 trucks).  (Production totals
include joint venture production of 3,000 vehicles in January 2009
and 13,000 vehicles in January 2008.)

The region's 2009 first-quarter production forecast is 380,000
vehicles (118,000 cars and 262,000 trucks), which is down about 57
percent compared with a year ago.  GM North America built 885,000
vehicles (360,000 cars and 525,000 trucks) in the first-quarter of
2008.

                    About General Motors

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

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

As reported in the Troubled Company Reporter on Nov. 10, 2008,
General Motors Corporation's balance sheet at Sept. 30, 2008,
showed total assets of US$110.425 billion, total liabilities of
US$170.3 billion, resulting in a stockholders' deficit of
US$59.9 billion.

                       *     *     *

As reported in the Troubled Company Reporter on Nov. 11, 2008,
Standard & Poor's Ratings Services lowered its ratings, including
the corporate credit rating, on General Motors Corp. to 'CCC+'
from 'B-' and removed them from CreditWatch, where they had been
placed with negative implications on Oct. 9, 2008.  S&P said that
the outlook is negative.

Fitch Ratings, as reported in the Troubled Company Reporter on
Nov. 11, 2008, placed the Issuer Default Rating of General Motors
on Rating Watch Negative as a result of the company's rapidly
diminishing liquidity position.  Given the current liquidity level
of US$16.2 billion and the pace of negative cash flows, Fitch
expects that GM will require direct federal assistance over the
next quarter and the forbearance of trade creditors in order to
avoid default.  With virtually no further access to external
capital and little potential for material asset sales, cash
holdings are expected to shortly reach minimum required operating
levels.  Fitch placed these on Rating Watch Negative:

  -- Senior secured at 'B/RR1';
  -- Senior unsecured at 'CCC-/RR5'.

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


GLOBAL GENERAL: Court Grants Recognition of Foreign Proceedings
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
has granted the request of Thomas Klaus Freudenstein, as foreign
representative of Global General and Reinsurance Company Limited
and Globale Ruckversicherungs-Ag, for recognition of the foreign
main proceedings respecting the Schemes of the Global General and
Globale under the Companies Act in the High Court of Justice of
England and Wales.

The Schemes, including any modifications or amendments thereto,
are given full force and effect in the United States, and are
binding on and enforceable against any person or entity that is a
Scheme Creditor including without limitation, against such person
or entity in its capacity as a debtor of a Scheme Company in the
United States.

Thus, all Scheme Creditors are permanenly enjoined from taking any
action in contravention of, or inconsistent with, the Schemes, and
except as otherwise provided in the Order or in the Schemes, all
Scheme Creditors are permanently enjoined from seizing,
repossessing, transferring, relinquishing or disposing of any
property of any Scheme Company, or the proceeds thereof, in
connection with any claims in the United States.

All persons and entities in possession, custody or control of
property of a Scheme Company or the proceeds therof, are also
required to turn over and account for such property or proceeds
thereof to the Petitioner, such Scheme Company, or the Scheme
Manager, as defined in the Order.

Copies of the order, the Schemes and the Petitions may be obtained
upon written request attorneys to the Petitioner:

     Chadbourne & Parke LLP
     Attn: Howard Seife, Esq. and
           Francisco Vazquez, Esq.
     30 Rockefeller Plaza
     New York, NY 10112
     Tel: (212) 408-5100

                      About GLOBAL General

Headquartered in London, GLOBAL General and Reinsurance Company
Limited is an insurance and reinsurance company formed in
April 16, 1940.  Between 1940 and 2002, GLOBAL General wrote a
wide array of reinsurance business in England. The reinsurance
portfolio was underwritten in London, predominantly from the
early 1950's to the early 1980's.  The portfolio was mostly
accepted through placements made by London market brokers.  The
portfolio consists of facultative and treaty reinsurance, both
proportional and non-proportional, covering various classes
including, but not limited to, marine, non-marine and aviation.

Thomas Klaus Freudenstein, as foreign representative of the two
Scheme Companies, filed voluntary petitions for GLOBAL General and
its wholly owned subsidiary GLOBALE Ruckversicherrungs-AG on
Dec. 10, 2008, under Chapter 15 of the United States Bankruptcy
Code (Bankr. S.D. N.Y. Case Nos. 08-114939 and 08-014940).

The company listed assets of more than US$100 million and debts of
more than US100 million in its petition.  Howard Seife, Esq., at
Chadbourne & Parke LLP represents the Petitioners as counsel.


GMAC LLC: Reports $7.5 Billion Net Income in Fourth Quarter 2008
----------------------------------------------------------------
GMAC Financial Services reported 2008 fourth quarter net income of
$7.5 billion compared to a net loss of $724 million in the fourth
quarter of 2007.  Results in the quarter were largely driven by an
$11.4 billion after-tax gain from the extinguishment of debt
related to GMAC's fourth quarter bond exchange, which was
partially offset by losses in the global automotive finance and
mortgage businesses.  Adversely affecting results in the quarter
were an impairment on lease residuals due to falling used vehicle
prices, provisions for loan losses as credit quality trends and
asset values continued to decline, and impairments on equity
investments.

For the full-year 2008, GMAC reported net income of $1.9 billion,
compared to a net loss of $2.3 billion for 2007.  Affecting
results for the full year were significant losses at Residential
Capital, LLC (ResCap), as adverse mortgage and housing market
conditions domestically and internationally continued to persist.
In addition, weak credit conditions and impairments on lease
residuals led to losses in the automotive finance business.  The
insurance operation remained profitable throughout 2008.

"The past year was clearly an extraordinary period for GMAC.  Our
business, like many others, was significantly affected by the U.S.
recession, the global capital and credit market disruption,
falling auto sales and a mortgage market in turmoil," said GMAC
Chief Executive Officer Alvaro G. de Molina.  "These extraordinary
conditions called for nothing less than extraordinary actions, and
we closed 2008 with some encouraging steps toward a more positive
future for GMAC."

"In the past 45 days, GMAC received approval from the U.S. Federal
Reserve to become a bank holding company, successfully completed
the largest debt exchange in U.S. corporate history, received a
TARP investment, and completed a rights offering.  Today, GMAC has
a stronger capital base and is positioned to be more competitive
over the long-term," Mr. de Molina said.  "Our work is just
beginning, however, to enhance management practices, while also
operating through this difficult economic cycle and transitioning
and diversifying the company."

Liquidity and Capital

GMAC's consolidated cash and cash equivalents were $15.2 billion
as of Dec. 31, 2008, up from $13.5 billion at Sept. 30, 2008.  Of
these total balances, ResCap's cash and cash equivalents balance,
including GMAC Bank, was $7.0 billion at year-end, up slightly
from $6.9 billion at Sept. 30, 2008.  The change in consolidated
cash is related to increased deposits at GMAC Bank and the
$5 billion U.S. Department of Treasury investment under the TARP,
which was offset by costs associated with the bond exchange, lower
dealer deposits, and debt maturities.

GMAC Bank total assets were $32.9 billion at year-end, which
included $10.9 billion of assets at the automotive division and
$22.0 billion of assets at the mortgage division.  This compares
to $32.9 billion of total assets at Sept. 30, 2008.  Deposits
increased in the fourth quarter to $19.3 billion at Dec. 31, 2008,
which included $7.2 billion of retail deposits,
$10.6 billion of brokered deposits, and $1.5 billion of other
deposits.  This compares to $17.7 billion of deposits at the end
of the third quarter, with $4.5 billion of retail, $10.8 billion
of brokered and $2.3 billion of other deposits.

GMAC significantly bolstered its regulatory capital position
during the fourth quarter and its application to become a bank
holding company was approved on Dec. 24, 2008.  At the time of
GMAC's application to become a bank holding company, the U.S.
Federal Reserve established an initial regulatory capital target
for the company based on expected balance sheet structure and
size, as well as company performance.  Since then, GMAC's asset
levels had declined and estimates of the fourth quarter financial
results were revised.  Therefore, the regulatory capital
requirement target was adjusted using a risk-based ratio approach
when the bank holding company order was issued.

Total book equity at Dec. 31, 2008 was $21.9 billion, compared to
$9.2 billion at Sept. 30, 2008. Contributing to the increase were
an $11.4 billion gain from the bond exchange, $234 million of
capital from new preferred interests issued to bondholders,
$5 billion of preferred interests from the TARP investment, and
$750 million in additional common equity from the contribution by
General Motors and FIM Holdings LLC of their first-loss
participation interests in a ResCap credit facility.

In January 2009, GMAC completed a rights offering whereby GM and
FIM Holdings collectively purchased an additional $1.25 billion of
GMAC common equity interests.  In addition, GMAC completed a
transaction that extinguished certain debt and resulted in
approximately $600 million of equity.  Both transactions further
improved the company's capital position.  As a result of these
actions and by achieving a tangible equity-to-assets ratio of 10.9
percent at year-end, GMAC believes it has an appropriate level of
capital for the current market environment.

Global Automotive Finance

GMAC's global automotive finance business reported a net loss of
$1.3 billion in the fourth quarter of 2008, compared to net income
of $137 million in the year-ago period.  The decline was
attributable to impairments on operating leases in the U.S. car
portfolio and the international full-service leasing portfolio
related to a decline in used vehicle prices, higher provisions for
credit losses due to weaker consumer and dealer performance, and
mark-to-market adjustments on derivatives.

New vehicle financing originations for the fourth quarter of 2008
decreased significantly to $2.7 billion of retail and lease
contracts from $13.4 billion in the fourth quarter of 2007.
Reduced access to funding related to the global capital and credit
market disruption prompted GMAC to implement a more conservative
purchase policy for consumer auto financing in the United States
which significantly affected origination volumes in the quarter.
In addition, originations declined in the international operations
as the business began to implement plans to cease or curtail
operations in select countries in Asia-Pacific and Europe.  A
significant decline in global automotive sales also contributed to
reduced origination volumes.

GMAC began expanding its retail automotive financing activities in
the United States to include a broader spectrum of consumers
immediately after receiving the TARP investment on Dec. 29, 2008.
While this access to liquidity has improved the company's ability
to extend credit to qualified consumers, there are still
limitations on other funding sources for automotive assets.  GMAC
Bank remains a key funding source for GMAC, however, until GM is
no longer considered an affiliate of GMAC Bank, the Bank is
limited in the retail and wholesale assets that can be funded from
GM dealers due to the current regulations.

Credit losses increased sharply in the fourth quarter of 2008 to
2.10 percent of managed retail assets, versus 1.05 percent in the
fourth quarter of 2007.  The increase is related to higher loss
frequency and severity stemming from the U.S. economic recession.
Delinquencies also increased to 2.96 percent in the fourth quarter
of 2008, compared to 2.68 percent in the year-ago period.

Insurance

GMAC's insurance business reported net income of $95 million,
compared to net income of $68 million in the fourth quarter of
2007.  Results were attributable to a gain from the sale of the
reinsurance business, which was partially offset by a goodwill
impairment as well as fewer policies sold in the United States due
to an overall decline in vehicle sales.

The total value of the insurance investment portfolio was
$5.1 billion at Dec. 31, 2008, compared to $7.2 billion at
Dec. 31, 2007.  The decrease is attributable to assets transferred
in the sale of the reinsurance business, unfavorable foreign
currency movement, and lower asset values.

Real Estate Finance

ResCap reported a net loss of $981 million for the fourth quarter
of 2008, compared to a net loss of $921 million in the year-ago
period.  This reflects an after-tax gain of $754 million in the
fourth quarter of 2008 from the retirement of ResCap debt related
to the bond exchange.  The decline in performance is attributable
to continued adverse market conditions, which drove higher credit-
related provisions and funding costs.

ResCap's U.S. residential finance business was negatively affected
by lower mortgage production due to tight underwriting and the
closing of certain retail and wholesale lending channels, and
lower net servicing fees.

The international mortgage business experienced a net loss in the
fourth quarter related to suspension of all production with the
exception of Canadian insured loans and the continued decline of
credit quality and home prices overseas.  The business lending
operation experienced continued losses in the fourth quarter due
to lower net interest margins related to nonperforming loans and
an increase in loan loss reserves as inventories remained high and
demand for home purchases remained constrained.

In the fourth quarter, GMAC contributed $1.67 billion of equity to
ResCap, which included $690 million of debt forgiveness on the
mortgage servicing rights credit line and $976 million (face value
with accrued interest) of ResCap bonds that were contributed and
subsequently retired.  As a result of these actions, ResCap
remained in compliance with its tangible net worth covenant at
Dec. 31, 2008.

On Jan. 30, 2009, GMAC acquired 100 percent of ResCap's non-voting
equity interest in IB Finance Holdings, the parent company of GMAC
Bank.  As a result, all voting and economic interests in IB
Finance are now owned directly by GMAC.

Outlook

Weak economic conditions have continued into 2009 and the capital
and credit markets remained stressed.  As a bank holding company,
GMAC is better positioned to manage through this downturn with
improved access to funding and a stronger capital position.

"Looking ahead, challenges still remain and GMAC will focus on
transitioning the company to meet all bank holding company
requirements; further strengthening the liquidity and capital
position; building a world-class organization; expanding and
diversifying customer-focused revenue opportunities in auto and
mortgage; and driving returns by repositioning the risk profile
and maximizing efficiencies," Mr. de Molina said.  "This will be
the path to strengthening the enterprise for the long-term."

                         About GMAC LLC

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

GMAC is the biggest lender to GM's 6,500 dealers nationwide, most
of which get the financing they need to operate and buy vehicle
inventory from the automaker, CNNMoney.com notes.

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

On December 24, 2008, GMAC Financial Services' application to
become a bank holding company under the Bank Holding Company Act
of 1956, as amended, was approved by the Board of Governors of the
Federal Reserve System.  In addition, GMAC Bank received approval
from the Utah Department of Financial Institutions to convert to a
state bank.  As a bank holding company, GMAC will have expanded
opportunities for funding and access to capital, which will
provide increased flexibility and stability.

For three months ended Sept. 30, 2008, the company reported net
loss of $2.5 billion compared to net loss of $1.5 billion for the
same period in the previous year.

For nine months ended Sept. 30, 2008, the company incurred net
loss of $5.5 billion compared to $1.6 billion for the same period
in the previous year.

At Sept. 30, 2008, GMAC's balance sheet showed total assets of
$211.3 billion, total liabilities of $202.0 billion and members'
equity of about $9.3 billion.

                         *     *     *

As reported in the Troubled Company Reporter on Dec. 15, 2008,
Standard & Poor's Ratings Services said that its ratings on GMAC
LLC (CC/Watch Neg/C) and its 100% owned subsidiary, Residential
Capital LLC (CC/Watch Neg/C) are not affected by GMAC's
announcement that it extended the early delivery time with respect
to separate private exchange offers and cash tender offers to
purchase or exchange certain of its and its subsidiaries' and
Residential Capital's outstanding notes to provide investors with
a final opportunity to consider the GMAC and Residential Capital
LLC offers.


GPS INDUSTRIES: Board Appoints Benjamin Porter as President & COO
-----------------------------------------------------------------
Effective February 1, 2009, GPS Industries, Inc.'s board of
directors appointed Benjamin E. Porter as the company's president
and chief operating officer.

Before joining GPS Industries, Mr. Porter founded Golf Academies
Ltd in the UK in 1997 and, since its inception through the
present, has directed the operations and sales of that company as
the Managing Director.  That company markets and distributes
technology products for golf including simulators, digital video
arrangements, analyzers and global positioning satellite systems.
Golf Academies became the exclusive European and Middle East
distributor for GPS Industries in 2004 and was acquired by the
Company in 2007; since the acquisition Mr. Porter has continued in
the role he occupied prior to the acquisition.  Prior to founding
Golf Academies, Mr. Porter was a member of the British PGA, an
eight-year touring pro (Europe, Africa, US) and golf course owner.

The company has also appointed Russell R. Lee, III, as the
Company's chief financial officer.  Mr. Lee, who holds a Bachelor
Degree of Business Administration in Accounting from the
University of Toledo, is a Certified Public Accountant licensed in
Florida and Ohio, and has more than thirty (30) years' experience
in business and finance.  Before joining GPS Industries, Inc., Mr.
Lee was with Teltronics, Inc., a publicly traded manufacturer of
telecommunications equipment.  Mr. Lee joined Teltronics in 2004
and served most recently as its Vice President of Finance and
Chief Financial Officer.  Prior to joining Teltronics, Mr. Lee
served as Chief Financial Officer of SinoFresh HealthCare, Inc., a
publicly traded developer and marketer of antiseptic solutions for
respiratory problems and as Executive Vice President of Finance
for Esprix Technologies, LLP, a privately-held international fine
and specialty chemical company supplier.  From 1990 to 1998, Mr.
Lee served as Corporate Controller, and then Treasurer/Chief
Financial Officer of Gencor Industries, Inc., a publicly-held,
international manufacturer of processing equipment.  Mr. Lee
subsequently served on the Board of Directors of Gencor from 2004
through 2008.  Prior to his private industry experience, Mr. Lee
was a Senior Audit Manager in the Ernst & Young organization in
both Ohio and Florida.

             Club Car Adds GPSI to Solutions Network

Club Car disclosed on January 28, 2009, that GPS Industries has
joined the Club Car Solutions Network.  The Solutions Network is
an alliance of companies that help Club Car support its customers
by providing products and services that complement the Club Car
business.

The new alliance makes GPSI the preferred provider of GPS systems
for Club Car.  In addition, Club Car and GPSI will collaborate on
technology solutions that bring the benefits of GPS and Wi-Fi to
Club Car customers around the world, according to Robert
McElreath, vice president of global marketing for Club Car.  GPSI
played a strategic role in the development of Guardian SVC, a
GPS-based course management system that will be introduced by Club
Car at the PGA Merchandise Show.

"GPSI combines the industry's strongest technical expertise with
an experienced and highly respected management team," McElreath
said.  "We're very pleased to bring their capabilities to our
customers."

In January 2008, Sarasota, Fla.-based GPSI acquired UpLink Corp.,
a leading developer of GPS and Wi-Fi enabled applications for the
North American golf market. The acquisition expanded GPSI's
worldwide installed customer base to more than 300 golf
facilities.

"We look forward to a collaborative effort that increases revenues
and efficiencies for Club Car customers worldwide," said David
Chessler, CEO of GPSI.

The Club Car Solutions Network also includes Carts of Colorado,
which manufactures mobile merchandising units for Club Car
hospitality vehicles; and SolarDrive, which specializes in solar
technology for mobile solutions.

                      About GPS Industries

Headquartered in Surrey, B.C. Canada, GPS Industries Inc. (OTC BB:
GPSN.OB) -- http://www.gpsindustries.com/-- develops and markets
GPS and Wi-Fi multimedia solutions for use with golf course
operations and residential community developments.  The company's
primary business is the development, manufacture and sale of the
Inforemer HDX mobile display units (MDU) in both cart mounted and
hand held product lines along with the related infrastructure.

                       Going Concern Doubt

Sherb & Co., LLP, in New York, expressed substantial doubt about
GPS Industries 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 incurred significant losses and has a working capital
deficiency.

The company's operations currently do not generate sufficient cash
to internally fund its working capital needs.  Accordingly, to
date, its operating deficits have been funded by outside sources
of funding, including funds raised from (i) the sale of shares of
its common stock and preferred stock, (ii) the issuance of
debentures, (iii) the issuance of shares as payment for services
and in satisfaction of indebtedness, (iv) bank lines of credit,
(v) short-term loans, and (vi) the issuance of non-negotiable
convertible promissory notes made pursuant to loans by the
Company's affiliates and by third parties.  For at least the next
twelve months, the company anticipates that such funding
activities must continue in order for the company to maintain its
operations.

As of Sept. 30, 2008, the company's balance sheet showed total
assets of $30 million and total liabilities of $32.3 million,
resulting in total stockholders' deficit of $2.3 million.


GRAHAM PACKAGING: Amends Transaction With Hicks & Blackstone
------------------------------------------------------------
Hicks Acquisition Company I, Inc. (AMEX: TOH), a Dallas-based
special purpose acquisition company, Graham Packaging Holdings
Company and The Blackstone Group (NYSE: BX) disclosed on Jan. 28,
2009, that they have amended their previously announced agreement
under which Graham Packaging will go public through a transaction
with Hicks Acquisition in partnership with Blackstone and the
Graham Group.

The amendment stipulates, among other things, that:

   * Hicks Acquisition and Blackstone will each have the right to
     terminate the agreement by giving written notice to the
     other; and

   * Each party will be released from the agreement's exclusivity
     provisions and will be permitted to consider other possible
     transactions.

There can be no assurance that the transaction will be completed,
nor can there be any assurance, if the transaction is completed,
that the potential benefits of combining the companies will be
realized.

A full-text copy of the First Amendment to the Purchase Agreement
is available for free at: http://researcharchives.com/t/s?390a

As reported by the Troubled Company Reporter on July 3, 2008,
Graham Packaging Holdings Co. agreed in principle to combine with
Hicks Acquisition Company I Inc. in a deal valued at
$3.2 billion.  The company stated that the agreement to go public
through a transaction with Hicks Acquisition in partnership with
The Blackstone Group and the Graham Group, is believed to be the
largest ever between a SPAC and an industrial company.

              About Hicks Acquisition Company I, Inc.

Hicks Acquisition is a special purpose acquisition company,
launched in October 2007 in an initial public offering that was at
the time, at $552 million of gross proceeds, the largest SPAC IPO.
Founded by Thomas O. Hicks, Hicks Acquisition was formed for the
purpose of acquiring, or acquiring control of, through a merger,
capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination, one or more
businesses or assets. It currently has no operating businesses.

                    About The Blackstone Group

Blackstone (NYSE: BX) -- http://www.blackstone.com/-- is one of
the world's leading investment and advisory firms with total
assets under management of approximately $116 billion.  Blackstone
seeks to create positive economic impact and long-term value for
its investors, the companies it invests in, the companies it
advises and the broader global economy.  Blackstone accomplishes
this through the commitment of its extraordinary people and
flexible capital.  Blackstone's alternative asset management
businesses include the management of corporate private equity
funds, real estate funds, hedge funds, funds of funds, debt funds,
collateralized loan obligation vehicles (CLOs) and closed-end
mutual funds.  The Blackstone Group also provides various
financial advisory services, including mergers and acquisitions
advisory, restructuring and reorganization advisory and fund
placement services.

                     About Graham Packaging

Headquartered in York, Pennsylvania, Graham Packaging Holdings
company, -- http://www.grahampackaging.com/-- the parent company
of Graham Packaging Company, L.P., is engaged in the design,
manufacture and sale of customized blow molded plastic containers
for the branded food and beverage, household, automotive
lubricants and personal care/specialty product categories.  As of
the end of June 2008, the company operated 83 manufacturing
facilities throughout North America, Europe and South America.

The Blackstone Group is the majority owner of Graham Packaging
Holdings company.

Net income for the third quarter of 2008 was $5.68 million,
compared to a loss of $13.39 million for the third quarter of
2007.  For nine months ended Sept. 30, 2008, the company reported
net income of 37.75 million compared with net loss of
$23.87 million for the same period in the previous year.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $2.25 billion and total liabilities of $3.00 billion, resulting
in a partners' deficit of about $754.22 million.


GWENCO INC: Kentucky Court Approves Disclosure Statement
--------------------------------------------------------
Quest Minerals & Mining Corp., a Kentucky based operator of energy
and mineral related properties, said the U.S. Bankruptcy Court for
the Eastern District of Kentucky has approved the Second Amended
Disclosure Statement and Third Amended Plan of Reorganization for
Quest's subsidiary, Gwenco, Inc.  The Court also authorized Gwenco
to begin soliciting approval from its creditors for the Plan of
Reorganization.  With these developments, Gwenco is on schedule to
emerge from Chapter 11 protection during the second calendar
quarter of 2009.

The Court will hold a hearing March 17, 2009, to consider
confirmation of the Plan.

Eugene Chiaramonte, Jr., President of Quest, said, "Court approval
of the Disclosure Statement and authorization to begin the
solicitation of creditor approval of Gwenco's Plan of
Reorganization represents an important step toward emerging from
bankruptcy. We are confident that the Plan of Reorganization will
be confirmed at the confirmation hearing, which would put us on
schedule to emerge from Chapter 11 during the second calendar
quarter of 2009."

The Bankruptcy Court order found that Gwenco's Disclosure
Statement was adequate for the purposes of soliciting creditor
approval for the Plan of Reorganization. The Disclosure Statement
also resolved all prior creditor objections, and all objecting
creditors agreed to entry of the order.

In February, Gwenco will begin mailing notice of the proposed
confirmation hearing and begin the process of soliciting approvals
for the Plan of Reorganization from voting creditors. Assuming the
requisite approvals are received and the Court confirms the Plan
under Gwenco's current timetable, Gwenco should emerge from
Chapter 11 protection during the second calendar quarter of 2009.

Quest Minerals & Mining Corp. -- http://www.questmining.net/--
acquires and operates energy and mineral related properties in the
southeastern part of the United States.

Gwenco, Inc., based in Ashland, Kentucky, filed for bankruptcy on
February 28, 2007 (Bankr. E.D. Ky. Case No. 07-10081).  Paul
Stewart Snyder, Esq., in Ashland, ((606) 325-5555), serves as the
Debtor's counsel.  The Debtor disclosed both assets and debts to
be less than $10,000 when it filed for bankruptcy.


HAWAIIAN TELCOM: HoldCo Files Schedules and Statements
------------------------------------------------------
Debtor Hawaiian Telcom Holdco delivered to the U.S. Bankruptcy
Court for the District of Hawaii its schedules of assets and
liabilities, disclosing:

A.     Real Property                                         $0

B.     Personal Property
B.1    Cash on hand                                           0
B.2    Bank accounts                                          0
B.3    Security deposits                                      0
B.13   Business interests and stocks
         Hawaiian Telcom Communications, Inc.        54,289,155

        TOTAL SCHEDULED ASSETS                      $54,289,155
        =======================================================

C.   Property Claimed as Exempt                               -

D.   Secured Claim
        Lehman Commercial Paper Inc.               $484,700,000
        Lehman Commercial Paper Inc.                 89,800,000
        Goldman Sachs Bank USA                        7,218,246
        JP Morgan Chase Bank NA                       7,218,246

E.   Unsecured Priority Claims                                0

F.   Unsecured Non-priority Claims
        US Bank NA                                  211,375,000
        US Bank NA                                  157,601,750
        Deutsche Bank National Trust Company        160,937,500

        TOTAL SCHEDULED LIABILITIES              $1,118,850,743
        =======================================================

HoldCo also filed with the Court its statement of financial
affairs.  Robert F. Reich, senior vice president, chief financial
officer, and treasurer of Hawaiian Telcom Holdco, Inc., reports
that the Company's statements of financial affairs are presented
on a consolidated basis and are reported under Hawaiian Telcom,
Inc. He reveals that the Company did not generate income from the
operation of its business, nor any interest income, two years
immediately preceding the Petition Date.

Mr. Reich discloses that from March 7, 2008, until the present,
he supervises the upkeep of the Company's books of account and
records.  Those records have been audited by Deloitte & Touche
LLP within two years immediately preceding the Petition Date, he
avers.

These shareholders, officers and directors directly or indirectly
owns, controls, or holds 5% or more of the voting or equity
securities of the Company:

   Name                    Title
   ----                    -----
   Eric K. Yeaman          Director, President, CEO
   Kevin J. Nystrom        Chief Operating Officer
   Robert F. Reich         Sr. VP, CFO, Treasurer
   Rose M. Hauser          Senior VP, Chief Information Officer
   John T. Komeiji         Senior VP and general counsel
   Craig T. Inouye         Senior VP Sales
   Geoffrey W.C. Loui      Senior VP Strategy and marketing
   Michael F. Edl          Senior VP Network services
   John K. Duncan          VP and Controller
   Francis K. Mukai        VP, Associate Gen. Counsel, Secretary
   William G. Chung        VP Human Resources & Labor Relations
   Walter A. Dods, Jr.     Director, Chairman
   James A. Attwood, Jr.   Director, Vice chairman
   Stephen C. Gray         Director, Vice chairman
   Matthew P. Boyer        Director
   William E. Kennard      Director
   Alan M. Oshima          Director
   Raymond A. Ranelli      Director

The Company's parent corporation, Hawaiian Telcom Holdco, Inc.,
holds taxpayer-identification number 84-1659868, for taxpayer
purposes within six years immediately prior to its bankruptcy
filing.

Based in Honolulu, Hawaii, Hawaiian Telecom Communications, Inc.
-- http://www.hawaiiantel.com/-- operates a telecommunications
company, which offers an array of telecommunications products and
services including local and long distance service, high-speed
Internet, wireless services, and print directory and Internet
directory services.

The company and seven of its affiliates filed for Chapter 11
protection on Dec. 1, 2008 (Bankr. D. Del. Lead Case No. 08-
13086).  As reported by the Troubled Company Reporter on
December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court
for the District of Delaware approved the transfer of the Chapter
11 cases to the U.S. Bankruptcy Court for the District of Hawaii
before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005).

Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J.
Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in
their restructuring efforts.  The Debtors proposed Lazard Freres &
Co. LLC as investment banker; Zolfo Cooper Management LLC as
business advisor; Deloitte & Touche LLP as independent auditors;
and Kurztman Carson Consultants LLC as notice and claims agent.
An official committee of unsecured creditors has been appointed in
the case.  The committee is represented by Christopher J. Muzzi,
Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu,
Hawaii.

When the Debtors filed for protection from their creditors, they
listed total assets of $1,352,000,000 and total debts of
$1,269,000,000 as of Sept. 30, 2008.

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


HAWAIIAN TELCOM: Services Unit Files Schedules and Statement
------------------------------------------------------------
Debtor Hawaiian Telcom Services delivered to the U.S. Bankruptcy
Court for the District of Hawaii its schedules of assets and
liabilities, disclosing:

A.     Real Property                                         $0

B.     Personal Property
B.1    Cash on hand                                           0
B.2    Bank accounts
         First Hawaiian Bank - 01177443                       0
         First Hawaiian Bank - 01181017                       0
         First Hawaiian Bank - 01181033                       0
         First Hawaiian Bank - 01180878                       0
         First Hawaiian Bank - 01181009                       0
         First Hawaiian Bank - 01181025                       0
         First Hawaiian Bank - 01181068                       0
         First Hawaiian Bank - 01178792                       0
         First Hawaiian Bank - 01178784                       0
B.3    Security deposits                                      0
B.14   Interests in partnerships
         Hawaiian Telcom IP Service Delivery
           Investment, LLC                              Unknown
         Hawaiian Telcom IP Video Investment, LLC       Unknown
B.16   Accounts receivable
         Hawaiian Telcom Communications, Inc.       290,618,526
         Hawaiian Telcom, Inc.                      291,245,250
B.22   Patents                                          Unknown
B.23   Licenses, franchises, and intangibles            Unknown
B.24   Customer lists                                   Unknown
B.29   Machinery
         NGTV                                         4,622,983
         Internet assets                              1,062,694
         Wireless assets                                668,791
         NexGen products                                216,835
         CPE assets                                      71,338
         Other                                            4,244
B.30   Inventory
         Materials and supplies Moanalua Baseyard     3,735,753
         Materials and supplies Kahului                 766,353
         Materials and supplies Hilo                    517,059
         Materials and supplies Retail Stores           491,087
         Materials and supplies Kona                    407,012
         Materials and supplies Lihue                   176,803
         Materials and supplies Other                    65,293
         Inventory obsolescence reserve              (3,381,071)
         Other in transit adjustments                  (347,607)

        TOTAL SCHEDULED ASSETS                     $590,941,342
        =======================================================

C.   Property Claimed as Exempt                               -

D.   Secured Claim
        Lehman Commercial Paper Inc.               $484,700,000
        Lehman Commercial Paper Inc.                 89,800,000
        Goldman Sachs Bank USA                        7,218,246
        JP Morgan Chase Bank NA                       7,218,246

E.   Unsecured Priority Claims                                0

F.   Unsecured Non-priority Claims
        US Bank NA                                  211,375,000
        US Bank NA                                  157,601,750
        Hawaiian Telcom, Inc.                       198,287,785
        Deutsche Bank National Trust Company        160,937,500
        Other                                         6,450,788

        TOTAL SCHEDULED LIABILITIES              $1,323,589,316
        =======================================================

Hawaiian Telcom Services also filed with the Court its statement
of financial affairs.  Robert F. Reich, senior vice president,
chief financial officer, and treasurer of Hawaiian Telcom Services
Company, Inc., relates that the Company generated income from the
operation of its business two years immediately preceding 2008:

  Source           Period                         Amount
  ------           ------                      ------------
  CPE              Year 2006                    $25,719,244
                   Year 2007                    $32,628,433
                   Jan. to Nov. 30, 2008        $26,162,676

  Directories      Year 2006                    $67,032,983
                   Year 2007                    $61,437,939
                   Jan. to Nov. 30, 2008                 $0

  Internet         Year 2006                    $39,153,280
                   Year 2007                    $35,402,290
                   Jan. to Nov. 30, 2008        $31,276,652

  Long Distance    Year 2006                    $39,724,006
                   Year 2007                    $37,284,834
                   Jan. to Nov. 30, 2008        $32,943,203

  Wireless         Year 2006                     $6,896,788
                   Year 2007                    $10,097,533
                   Jan. to Nov. 30, 2008         $7,586,106

The Company also earned income other than from employment or the
operation of its business during the two years immediately
preceding the Petition Date:

  Source           Period                         Amount
  ------           ------                      ------------
  Interest         Year 2006                         $2,242
                   Year 2007                         $2,886
                   Jan. to Nov. 2008                $46,056

  Directory sale
  proceeds         Year 2007                   $437,000,000

Within 90 days before the Petition Date, the Company made
payments to certain creditors, a list of which is available for
free at: http://bankrupt.com/misc/HawTelServCreditors.pdf

Mr. Reich states that lawsuits and administrative proceedings to
which the Company is a party within one year immediately before
the Petition Date are reported on a consolidated basis and are
reported under Hawaiian Telcom, Inc.

The Company transferred $437,300,000 worth of directories to HYP
Media Finance LLC on November 30, 2007.

Mr. Reich adds that reports setoffs made by Hawaiian Telcom
Services within 90 days preceding the Petition Date:

   Creditor                Setoff Date       Amount
   --------                -----------      --------
   First Hawaiian Bank      11/21/2008        ($993)
   First Hawaiian Bank      11/03/2008      ($2,536)
   First Hawaiian Bank      10/20/2008      ($3,045)
   First Hawaiian Bank      10/01/2008      ($2,247)
   First Hawaiian Bank      09/01/2008      ($2,257)

The Company's inventory was valued at these amounts as of the
beginning of 2007 and 2008:

   Inventory Date           Supervisor   Dollar Value
   --------------           ----------   ------------
   1st week, January 2008   Diane Roy     $3,926,113
   1st week, January 2007   Diane Roy     $4,507,518

Mr. Reich discloses that from March 7, 2008, until the present,
he supervises the upkeep of the Company's books of account and
records.  Those records have been audited by Deloitte & Touche
LLP, within two years immediately preceding the Petition Date, he
avers.

These shareholders, officers and directors directly or indirectly
owns, controls, or holds 5% or more of the voting or equity
securities of the Company:

   Name                    Title
   ----                    -----
   Hawaiian Telecom
    Communications, Inc.   Shareholder (100%)
   Eric K. Yeaman          Director, President, CEO
   Kevin J. Nystrom        Chief Operating Officer
   Ryan H. Suzuki          Assistant treasurer
   Robert F. Reich         Sr. VP, CFO, Treasurer
   Rose M. Hauser          Senior VP, Chief Information Officer
   John T. Komeiji         Senior VP and general counsel
   Craig T. Inouye         Senior VP Sales
   Geoffrey W.C. Loui      Senior VP Strategy and marketing
   Michael F. Edl          Senior VP Network services
   John K. Duncan          VP and Controller
   Francis K. Mukai        VP, Associate Gen. Counsel, Secretary
   Steven P. Golden        VP External Affairs
   William G. Chung        VP Human Resources & Labor Relations
   Galen K. Haneda         VP Business sales
   James D. LaClair        VP Service centers
   Jeffrey A. Hoffman      VP Financial planning & analysis
   Alan M. Oshima          Director

The Company's parent corporation, Hawaiian Telcom Holdco, Inc.,
holds taxpayer-identification number 84-1659868, for taxpayer
purposes within six years immediately prior to its bankruptcy
filing.

Based in Honolulu, Hawaii, Hawaiian Telecom Communications, Inc.
-- http://www.hawaiiantel.com/-- operates a telecommunications
company, which offers an array of telecommunications products and
services including local and long distance service, high-speed
Internet, wireless services, and print directory and Internet
directory services.

The company and seven of its affiliates filed for Chapter 11
protection on Dec. 1, 2008 (Bankr. D. Del. Lead Case No. 08-
13086).  As reported by the Troubled Company Reporter on
December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court
for the District of Delaware approved the transfer of the Chapter
11 cases to the U.S. Bankruptcy Court for the District of Hawaii
before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005).

Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J.
Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in
their restructuring efforts.  The Debtors proposed Lazard Freres &
Co. LLC as investment banker; Zolfo Cooper Management LLC as
business advisor; Deloitte & Touche LLP as independent auditors;
and Kurztman Carson Consultants LLC as notice and claims agent.
An official committee of unsecured creditors has been appointed in
the case.  The committee is represented by Christopher J. Muzzi,
Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu,
Hawaii.

When the Debtors filed for protection from their creditors, they
listed total assets of $1,352,000,000 and total debts of
$1,269,000,000 as of Sept. 30, 2008.

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


HAWAIIAN TELCOM: 4 Affiliates File Schedules and Statements
-----------------------------------------------------------
Four debtor-affiliates of Hawaiian Telcom Communications, Inc.,
reported to the U.S. Bankruptcy Court for the District of Hawaii
assets of $0 and debts of $1,118,850,742, on account of secured
claims and unsecured non-priority claims:

  * Hawaiian Telcom IP Service Delivery Research, LLC,
  * Hawaiian Telcom IP Video Research, LLC,
  * Hawaiian Telcom IP Service Delivery Investment, LLC, and
  * Hawaiian Telcom IP Video Investment, LLC.

The Debtors listed secured claims, aggregating $588,936,492, owed
to these creditors:

  Creditor                             Claim Amount
  --------                             ------------
  Lehman Commercial Paper Inc.         $574,600,000
  Goldman Sachs Bank USA                  7,218,246
  JPMorgan Chase Bank NA                  7,218,246

The Debtors also listed unsecured non-priority claims,
aggregating $529,914,250:

  Creditor                             Claim Amount
  --------                             ------------
  US Bank NA, as Indenture Trustee     $368,976,750
  Deutsche Bank National Trust Co,      160,937,500
   as Successor Indenture Trustee

The four debtor-affiliates also delivered to the Court copies of
their unaudited Statements of Financial Affairs:

  * Hawaiian Telcom IP Service Delivery Research, LLC,
  * Hawaiian Telcom IP Video Research, LLC,
  * Hawaiian Telcom IP Service Delivery Investment, LLC, and
  * Hawaiian Telcom IP Video Investment, LLC.

Robert F. Reich, the Debtors' senior vice president, chief
financial officer, and treasurer, reported that the Debtors'
statements of financial affairs are presented on a consolidated
basis and are reported under Hawaiian Telcom, Inc.  He disclosed
that the Debtors did not generate income from the operation of
its business, nor any interest income, two years immediately
preceding the Petition Date.

Mr. Reich noted that from March 7, 2008, until the present, he
supervises the upkeep of the Debtors' books of account and
records.  Those records have been audited by Deloitte & Touche
LLP, within two years immediately preceding the Petition Date, he
avers.

According to Mr. Reich, Hawaiian Telcom Services Company, Inc.,
holds a 100% membership interest in Hawaiian Telcom IP Service
Delivery Investment, LLC, and Hawaiian Telcom IP Video
Investment, LLC.  Hawaiian Telcom IP Video Investment, LLC, holds
a 100% membership interest in Hawaiian Telcom IP Video Research,
LLC.  Moreover, Hawaiian Telcom IP Service Delivery Investment,
LLC, holds a 100% membership interest in Hawaiian Telcom IP
Service Delivery Research, LLC.

The Debtors' parent corporation, Hawaiian Telcom Holdco, Inc.,
holds taxpayer-identification number 84-1659868, for taxpayer
purposes within six years immediately prior to its bankruptcy
filing.

Based in Honolulu, Hawaii, Hawaiian Telecom Communications, Inc.
-- http://www.hawaiiantel.com/-- operates a telecommunications
company, which offers an array of telecommunications products and
services including local and long distance service, high-speed
Internet, wireless services, and print directory and Internet
directory services.

The company and seven of its affiliates filed for Chapter 11
protection on Dec. 1, 2008 (Bankr. D. Del. Lead Case No. 08-
13086).  As reported by the Troubled Company Reporter on
December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court
for the District of Delaware approved the transfer of the Chapter
11 cases to the U.S. Bankruptcy Court for the District of Hawaii
before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005).

Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J.
Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in
their restructuring efforts.  The Debtors proposed Lazard Freres &
Co. LLC as investment banker; Zolfo Cooper Management LLC as
business advisor; Deloitte & Touche LLP as independent auditors;
and Kurztman Carson Consultants LLC as notice and claims agent.
An official committee of unsecured creditors has been appointed in
the case.  The committee is represented by Christopher J. Muzzi,
Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu,
Hawaii.

When the Debtors filed for protection from their creditors, they
listed total assets of $1,352,000,000 and total debts of
$1,269,000,000 as of Sept. 30, 2008.

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


HAWAIIAN TELCOM: Gets Go-Signal to Hire Zolfo's Nystrom as COO
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Hawaii approved the
standard services agreement between Hawaiian Telcom
Communications, Inc. and Zolfo Cooper Management LLC, nunc pro
tunc to the Petition Date, subject to certain provisions.
Pursuant to the Agreement, the Debtors will continue to employ
Kevin Nystrom as their chief operating officer.

Judge Lloyd King ruled that Zolfo Cooper and its affiliates will
not act in any capacity other than as a financial advisor to the
Debtors in connection with their Chapter 11 cases.  In the event
the Debtors seek Zolfo Cooper personnel to assume executive
positions, they should file a motion to modify the firm's
retention.

Mr. Nystrom, a senior director of Zolfo Cooper, has been serving
as the Debtors' COO since February 2008 until the Petition Date.

Under the terms of the Zolfo Services Agreement, Mr. Nystrom will
have the responsibility for the overall design of Zolfo Cooper's
engagement team.  He will continue to serve as the Debtors' COO,
and will assign Zolfo Cooper's associate directors to perform
additional services, as needed.  Mr. Nystrom and Zolfo Cooper
will be authorized to make decisions with respect to all aspects
of the Debtors' management and business operations, including
organization and human resources, marketing and sales, logistics,
and finance and administration.

For the contemplated services, Mr. Nystrom and Zolfo Cooper will
be entitled to:

  (a) a $225,000 Monthly Fee in cash;

  (b) a $2,000,000 Restructuring Fee, 50% of which will be
      payable as definitive agreements are executed with respect
      to a restructuring plan and the other 50% payable as the
      restructuring is consummated; and

  (c) reimbursement of travel costs, reproduction, legal
      counsel, applicable state sales or excise taxes, and
      other direct expenses.

Consistent with the protocol established by the United States
Trustee with respect to the employment of critical management,
Zolfo Cooper consents to have its employees serving the Debtors
be entitled to receive any indemnities available during the term
of the Services Agreement.  The Firm agrees to waive
indemnification with respect to indemnitees that are not serving
the Debtors, if they are indemnified by the Debtors' board of
directors.

                           Objections

Tiffany Carroll, Acting United States Trustee for Region 15,
objected to the request, pointing out that she has not had an
adequate opportunity to review the standard services between the
Debtors and Zolfo Cooper.  Thus, she said the Zolfo Cooper Motion
should not be approved until all parties have adequately reviewed
and commented on the Zolfo Agreement.

Moreover, Ms. Carroll said Zolfo Cooper should disclose the names
of personnel identified for executive officer positions.  The Firm
should also include names and proposed functions for additional
staff, and indicate whether their engagement is part-time or full-
time, the Acting U.S. Trustee said.  Additionally, Zolfo Cooper
should disclose the existence of any claims asserted against it,
Ms. Carroll maintained.

Pacific Investment Management Company LLC and Capital Research and
Management Company, representing the Debtors' largest unsecured
creditors, opposed the request, arguing that the proposed $225,000
monthly fee for the services of Mr. Nystrom will incentivize the
Debtors' professionals to rush to confirmation or sale as quickly
as possible, at the risk of overlooking alternatives that may
maximize the Debtors' recoveries.  Thus, the Noteholders asked
that the Court reduce the monthly fee, in line with the
compensation provided to other officers of the Debtors.

In its order, the Court ordered that no principal, employee or
independent contractor of Zolfo Cooper and its affiliates will
serve as a director of the Debtors, during the pendency of the
Debtors' bankruptcy cases.  Within three yeas after their
engagement, Zolfo Cooper and its affiliates may not make
investments in the Debtors or the Reorganized Debtors.  All
compensation and reimbursement due to Zolfo Cooper and Mr. Nystrom
will be treated and allowed as administrative expenses of the
Debtors, in accordance with Section 503 of the Bankruptcy Code.

Based in Honolulu, Hawaii, Hawaiian Telecom Communications, Inc.
-- http://www.hawaiiantel.com/-- operates a telecommunications
company, which offers an array of telecommunications products and
services including local and long distance service, high-speed
Internet, wireless services, and print directory and Internet
directory services.

The company and seven of its affiliates filed for Chapter 11
protection on Dec. 1, 2008 (Bankr. D. Del. Lead Case No. 08-
13086).  As reported by the Troubled Company Reporter on
December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court
for the District of Delaware approved the transfer of the Chapter
11 cases to the U.S. Bankruptcy Court for the District of Hawaii
before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005).

Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J.
Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in
their restructuring efforts.  The Debtors proposed Lazard Freres &
Co. LLC as investment banker; Zolfo Cooper Management LLC as
business advisor; Deloitte & Touche LLP as independent auditors;
and Kurztman Carson Consultants LLC as notice and claims agent.
An official committee of unsecured creditors has been appointed in
the case.  The committee is represented by Christopher J. Muzzi,
Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu,
Hawaii.

When the Debtors filed for protection from their creditors, they
listed total assets of $1,352,000,000 and total debts of
$1,269,000,000 as of Sept. 30, 2008.

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


HC INNOVATIONS: Dr. David Chess Resigns as Chairman & CEO
---------------------------------------------------------
On January 25, 2009, HC Innovations, Inc., received notice from
David Chess, M.D., Chief Executive Officer and Chairman of the
Board of Directors, of his intention to resign from the position
of Chief Executive Officer, effective January 25, 2009.  Dr. Chess
will continue as Chief Medical Officer of the Company.  He will
also retain his position as Chairman of the Board and will remain
as a director of the Company.  Dr. Chess will continue to focus on
the long-term growth objectives of the Company and will remain
intimately involved in business and product development, clinical
protocols and investor relations.

The Company will appoint an interim Chief Executive Officer as
soon as possible.

Headquartered in Shelton, Conn., HC Innovations Inc. (OTC BB:
HCNV) -- http://www.hcinnovationsinc.com/-- is the holding
company for Enhanced Care Initiatives (ECI), which provides
complex care management services for medically unstable, complex
patients.  These services are performed through a program of 24/7
clinical support and intensive interventions based on care plans
guided by a proprietary electronic health record (EHR) system.
The company targets its offering to HMOs, other risk-bearing
managed care organizations, state Medicaid departments, and as an
on-site subcontractor for disease management companies.

                       Going Concern Doubt

As reported in the Troubled company Reporter on April 29, 2008,
Carlin, Charron & Rosen, LLP, in Glastonbury, Conn., expressed
substantial doubt about HC Innovations Inc.'s ability to continue
as a going concern after auditing the company's consolidated
financial statements for the years ended Dec. 31, 2007, and 2006.
The auditing firm pointed to the company's negative working
capital, net losses for the two years then ended, and accumulated
deficit.

The company sustained consolidated net losses for the nine-month
periods ended September 30, 2008 and 2007 of $10,530,240 and
$6,535,231, respectively.  At September 30, 2008, the company had
a working capital deficiency of approximately $10.9 million, and
accumulated deficits of approximately $26.5 million and
$16 million at September 30, 2008 and December 31, 2007.

As of September 30, 2008, the company's balance sheet showed total
assets of $6,637,596 and total liabilities of $14,427,493,
resulting in total stockholders' deficit of $7,789,897.


INNOVATIVE COMMUNICATION: Nat'l Rural Wants to Acquire Firm
-----------------------------------------------------------
The Associated Press reports that National Rural Utilities
Cooperative Finance Corp. said that it would acquire Innovative
Telephone Company and other assets of Innovative Communication
Corp., or ICC, to satisfy part of a bankruptcy judgment against
the Innovative Communication.

The AP relates that National Rural has offered to acquire
Innovative Communication, which owes the company about
$525 million.

Citing National Rural spokesperson Mike O'Brien, The AP states
that the company will seek to sell the Innovative Communication
assets.  National Rural said in a statement that it will look to
rehabilitate the telephone operator and other assets to "maximize
recovery."

National Rural will need the permission of the bankruptcy court to
acquire Innovative Communication, according to The AP.

Based in Christiansted, St. Croix, U.S. Virgin Islands,
Innovative Communication Corporation is telecommunications and
media company with extensive holdings throughout the Caribbean
basin.  The company's operations are in Belize, British Virgin
Islands, Guadeloupe, Martinique, Saint-Martin, Sint Maarten,
U.S. Virgin Islands and France and include local, long distance
and cellular telephone companies, Internet access providers,
cable television companies, business systems, and The Virgin
Islands Daily News, a Pulitzer Prize-winning newspaper.

On Feb. 10, 2006, creditors Greenlight Capital Qualified, L.P.,
Greenlight Capital, L.P., and Greenlight Capital Offshore, Ltd.,
filed involuntary chapter 11 petition againsts Innovative
Communication Company LLC and Emerging Communications, Inc., and
Jeffrey J. Prosser, the company's principal (Bankr. D. Del. Case
Nos. 06-10133 through 06-10135).  The Greenlight creditors
disclosed US$18,780,614 in total claims.

On July 31, 2006, Innovative LLC, Emerging, and Mr. Prosser,
filed voluntary chapter 11 petitions (Bankr. D. V.I. Case Nos.
06-30007 through 06-30009).  Pursuant to Rule 1003-1 of the
Local Bankruptcy Rules of the District Court of the Virgin
Islands, Bankruptcy Division, Mr. Prosser, and Bobby Lubana,
were designated as the individuals who are the principal
operating officers of the alleged debtor.  On Dec. 14, 2006, the
Delaware Bankruptcy Court entered an order transferring the
venue of the involuntary bankruptcy cases transferring to the
U.S. District Court for the District of the Virgin Islands,
Bankruptcy Division.

On July 5, 2007, the Greenlight creditors filed an involuntary
chapter 11 petition against Innovative Communication Corporation
(Bankr. D. V.I. Case No. 07-30012).  The creditors disclosed
total aggregate claims of US$56,341,843.  Matthew J. Duensing,
Esq., and Richard H. Dollison, Esq., at Stryker, Duensing,
Casner & Dollison, and Matthew P. Ward, Esq., at Skadden Arps
Slate Meagher & Flom LLP, represent the creditors.

Stan Springel of Alvarez & Marsal, the Court-appointed chapter
11 trustee, is represented by Andrew Kamensky, Esq., Hunton &
Williams.


INTERLAKE MATERIAL: Creditors' Panel Balks at Terms of DIP Loan
---------------------------------------------------------------
The official committee of unsecured creditors of Interlake
Material Handling Inc. objects to the proposed $41.5 million in
postpetition financing provided by the existing secured lenders.

The proposed $41.5 million DIP financing is inclusive of a roll-up
of $35.6 million owed to senior lenders, led by National City
Business Credit, Inc., hence, only $5.8 million in additional
financing is available to the Debtor.

Interlake has signed a deal to sell its assets to Mecalux SA,
Spain's largest maker of warehouse equipment, for $30 million,
subject to higher and better offers.  Although the assets will
still be auctioned off on March 4, the creditors committee has
expressed apprehension over the propose sale to Mecalux on grounds
that the proposed purchase price might leave second lien lenders
and unsecured creditors with no recovery.

The Creditors Committee also noted that, basing from the Debtors'
budget, they are projected to use $2.2 million of the $5.8 million
in additional financing.  The fees, protections, and benefits
granted to the existing lenders, given that they will only spend
$2.2 million, may be disadvantageous to other parties, the
Committee says.

The Committee's counsel, Joseph H. Huston, Jr., Esq., at Stevens &
Lee, P.C., asserts that the proposed DIP financing essentially
grants to the potentially undersecured first lien lenders the
entire value of the Debtors' estates in exchange for funding the
liquidation of their collateral.  "If the lenders wish to
liquidate their collateral through the chapter 11 process, they
must bear the costs of doing so, while leaving to unsecured
creditors those assets to which they are entitled."

The proposed DIP Financing provides that, upon entry of the final
order approving it, the pre-petition claims of the lenders will
become post-petition obligations, with a superpriority claim
senior to all other claims and secured by liens upon all of the
Debtors' assets.  This "roll up" feature of the DIP Financing is
not necessary under the facts of this case and is potentially
prejudicial to unsecured creditors, Mr. Huston asserts.

Furthermore, according to Mr. Huston, the DIP Financing makes it
clear that the lenders will not be obligated to fund the costs of
the chapter 11 cases in exchange for receiving the benefits
provided by chapter 11.  The DIP Financing Motion provides that
the lenders will receive a complete waiver of any claims for the
surcharge of their collateral pursuant to Section 506(c) of the
Bankruptcy Code or otherwise.

In addition to the new collateral and the shield against any
potential liability for the costs of these cases, the terms of the
DIP Financing also provide that the lenders are to receive a
$450,000 fee in exchange for the post-petition financing.
According to Mr. Huston, such a fee is an egregious overreach in a
case where (a) the purpose of the post-petition financing is to
enable the liquidation of the lenders' collateral and (b) the fee
represents approximately 20% of the projected, necessary post-
petition borrowings by the Debtors.

Finally, unsatisfied with the use of Chapter 11 to liquidate their
collateral while extracting exorbitant fees in the process, the
lenders also seek to take the chapter 5 avoidance actions as
additional collateral for their loans.  Accordingly, if the
lenders are unable to recoup the full amount of their claims in
this case, they will be in a position to sue, or control suits
against, third parties including unsecured creditors to make up
the deficiency, Mr. Huston points out.  "If it turns out that the
alleged secured lenders are undersecured, they should not be
permitted to use the estate's avoidance actions to make up the
shortfall."

"If the lenders want to take the entire value of the estate, these
cases are not properly in chapter 11," the Unsecured Creditors
Committee asserts.  "If the lenders want to liquidate their
collateral through a chapter 11, they must be prepared to pay the
costs and to leave value for unsecured creditors."

                   About Interlake Material

Headquatered in Naperville, Illinois, Interlake Material Handling
Inc. -- http://www.interlake.com-- makes steel storage racks in
the United States.  The company and three of its affiliates filed
for protection on January 5, 2009 (Bankr. D. Del. Lead Case No.
09-10019).  Winston & Strawn LLP represents the Debtors in their
restructuring efforts.  The Debtors proposed Young, Conaway,
Stargatt & Taylor LLP, as their local counsel; Lake Pointe
Advisors LLC and Huron Consulting Services LLC as financial
advisors; and Kurtzman Carson Consultants LLC as claims agent.
When the Debtors filed for protection from their creditors, they
listed assets between $50 million and $100 million, and debts
between $100 million and $500 million.


INTERSTATE BAKERIES: Emerges from Chapter 11; Has Union Support
---------------------------------------------------------------
Interstate Bakeries Corporation emerged from its voluntary Chapter
11 financial reorganization on February 3, 2009.

IBC and eight of its subsidiaries successfully concluded their
financial reorganization, having finalized and executed all
required financing arrangements, and having satisfied all other
conditions that were necessary to put the company's Amended Joint
Plan of Reorganization into effect.

Importantly, 100% of the company's 423 union locals ratified
revised labor agreements that provide the company with operational
flexibility needed to deal with evolving market conditions.
Additionally, 100% of the holders of IBC's secured debt voted in
favor of the Amended Joint Plan of Reorganization, which was
confirmed by the U.S. Bankruptcy Court in Kansas City on December
5, 2008.

"Today marks a new beginning for Interstate Bakeries," said Chief
Executive Officer Craig Jung. "We are now a stronger and more
competitive company. With this period behind us, we can now
unleash and empower 22,000 IBC employees to better serve our
consumers and customers, revitalize our core brands, and launch
product innovation that will profitably grow our business."

He added, "I want to thank IBC's employees for the sacrifices they
have made and our union leaders for their commitment to our
company and saving jobs. Their actions made possible the financing
required to execute a business plan that will build competitive
advantage and secure our company's future."

"I would also like to thank Ripplewood Holdings L.L.C. for their
strong commitment to and investment in our company," he added.

John Cahill and Greg Murphy, Industrial Partners of Ripplewood, a
leading private equity firm, said, "We are pleased to have closed
this transaction. IBC has outstanding brands in the major bread
and snack cake categories that we believe best position the
Company for future success."

Mr. Cahill and Mr. Murphy will serve on IBC's Board of Directors
as Ripplewood representatives. Mr. Cahill was previously Chairman,
President and CEO of The Pepsi Bottling Group and Mr. Murphy had
been President and CEO of Kraft Food Bakery Companies. Both
executives have had extensive food and beverage industry
experience during their careers.

"I also wish to thank all the other companies who are
participating in our new financing, including GE Capital, J.P.
Morgan, McDonnell Investment Management LLC, Monarch Alternative
Capital L.P., and Silver Point Finance, LLC," Mr. Jung said.

"Finally, I extend sincere thanks to our customers and suppliers,
who have supported IBC throughout this process," Mr. Jung said.

                  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.

Bankruptcy Creditors' Service, Inc., publishes Interstate Bakeries
Bankruptcy News.  The newsletter tracks the chapter 11 proceedings
undertaken by Interstate Bakeries Corporation and its eight
affiliated debtors.  (http://bankrupt.com/newsstand/or
215/945-7000)


ISCO INTL: Receives Notice of Intention to Delist from NYSE
-----------------------------------------------------------
ISCO International, Inc. received notice from NYSE Alternext US
LLC (formerly AMEX) indicating that the Company is not in
compliance with the Exchange's continued listing standards and
that the Company's common stock is now subject to delisting from
the Exchange.

Specifically, the notice cited that the Company is not in
compliance with the Exchange Company Guide:

   (i) the Company has stockholders' equity of less than
       $2,000,000 and losses from continuing operations and net
       losses in two of its three most recent fiscal years
       (Section 1003(a)(i));

  (ii) the Company has stockholders' equity of less than
       $4,000,000 and losses from continuing operations and net
       losses in three of its four most recent fiscal years
       (Section 1003(a)(ii));

(iii) the Company has stockholders' equity of less than
       $6,000,000 and losses from continuing operations and net
       losses in its five most recent fiscal years
       (Section 1003(a)(iii)); and

  (iv) the Company has sustained losses which are so substantial
       in relation to its overall operations or its existing
       financial resources, or its financial condition has become
       so impaired that it appears questionable, in the opinion of
       the Exchange, as to whether the Company will be able to
       continue operations and meet its obligations as they mature
       (Section 1003(a)(iv)).

The notice also advised the Company of non-compliance with Section
1003(f)(v) of the Exchange Company Guide since the Company's
common stock has been trading at a low price per share for a
significant period of time.

The Company has until February 6, 2009 to appeal the Exchange's
determination, or it will become final. If the determination
becomes final, the Exchange will suspend trading in the Company's
common stock and submit an application to the Securities and
Exchange Commission to strike the Company's common stock from
listing and registration on the Exchange.  The Company does not
intend to seek an appeal of the Exchange's determination.

The Company is working with a market maker to apply for the
registration and quotation of the Company's common stock on the
OTC Bulletin Board. If the Company is not approved for quotation
on the OTC Bulletin Board before trading is suspended on the
Exchange, the Company expects that its common stock will be quoted
on the Pink Sheets until clearance is obtained for quotation on
the OTC Bulletin Board.

                     About ISCO International

Elk Grove Village, Illinois-based ISCO International -
http://www.iscointl.com/-- is a wireless telecommunications
solutions provider and global supplier of radio frequency
management and "spectrum conditioning" solutions for wireless
carriers.  ISCO International's solutions include adaptive
interference management and radio frequency spectrum conditioning
for all wireless technologies.


JETBLUE AIRWAYS: Pilots Lack Votes to Meet Union Requirement
------------------------------------------------------------
Susan Carey at The Wall Street Journal reports that JetBlue
Airways Corp. pilots failed to secure enough votes to form an
independent union to represent the 2,000 aviators.

WSJ states that most of the pilots who voted chose to be
represented by the JetBlue Pilots Association, but JetBlue Airways
said that federal officials who oversaw the election informed the
company that 646 pilots cast ballots, or about 33%, which is short
of the simple majority needed for the election to count.  About
1,291 eligible voters didn't cast ballots invalidated the
unionization effort, the report says.

According to WSJ, JebBlue Pilots said that it wanted unionized
status as protection in case of organizational changes or new
management.  JetBlue Airways, says WSJ, has about 11,500 workers,
and none are represented by unions.

JetBlue Airways CEO Dave Barger said in a statement, "We are very
pleased that JetBlue's Pilots have chosen to retain their direct
relationship with the company.  We will continue to work closely
with our Pilots and all JetBlue crewmembers to ensure JetBlue's
competitive position remains strong and our culture remains unique
in the industry.  We truly believe culture, an environment of
collaboration and the company's agility are key competitive
advantages for JetBlue."

                      About JetBlue Airways

Based in Forest Hills, New York, JetBlue Airways Corporation
(Nasdaq: JBLU) -- http://www.jetblue.com/-- is a passenger
airline that provides customer service primarily on point-to-
point routes.  As of June 30, 2008, the company operated a fleet
of 106 Airbus A320 aircraft and 36 EMBRAER 190 aircraft, of which
83 were owned, 55 were leased under operating leases and four were
leased under capital leases.

JetBlue currently serves 53 cities with 600 daily flights.

                          *     *     *

As reported in the Troubled Company Reporter on July 24, 2008,
Moody's Investors Service downgraded the Corporate Family and
Probability of Default Ratings of JetBlue Airways Corp. to Caa2
from Caa1, as well as the ratings of its outstanding corporate
debt instruments and certain Enhanced Equipment Trust
Certificates.  The outlook is negative.

The TCR reported on Oct. 20, 2008, that Standard & Poor's Ratings
Services affirmed its ratings on JetBlue Airways Corp.
(B-/Negative/--), and removed them from CreditWatch, where they
were placed with negative implications May 22, 2008, as part of an
industrywide review.  The outlook is negative.  Ratings on
pass-through certificates insured by bond insurers were not on
CreditWatch and are not affected.


JETBLUE AIRWAYS: Reports $49-Mil. Pre-Tax Loss for 4th Quarter
--------------------------------------------------------------
JetBlue Airways Corporation (NASDAQ: JBLU) reported on January 29,
2009, its pre-tax results for the fourth quarter and full year
2008:

   * Pre-tax loss of $49 million in the fourth quarter, which
     includes a special non-cash charge of $53 million related to
     the valuation of JetBlue's auction rate securities.
     Excluding this special charge, JetBlue reported pre-tax
     income for the quarter of $4 million. This compares to a
     pre-tax loss of $3 million in the year-ago period.

   * For the full year 2008, JetBlue reported a pre-tax loss of
     $76 million. Excluding the special charge, JetBlue reported
     a pre-tax loss of $23 million. This compares to pre-tax
     income of $41 million for the full year 2007.

   * JetBlue is evaluating the tax deductibility of the special
     charge, but has not yet finalized the amount given the
     technical nature of the issue. As a result, JetBlue is only
     reporting its pre-tax results. Once the tax treatment for
     this special charge is finalized, JetBlue will report its
     net results in its Annual Report on Form 10-K, which will be
     filed in mid-February.

"While we are disappointed to report a loss, I am very proud of
what JetBlue accomplished in 2008," said Dave Barger, JetBlue's
CEO.  "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."

                     Operational Performance

Operating revenues for the fourth quarter totaled $811 million,
representing growth of 9.8% over operating revenues of
$739 million in the fourth quarter of 2007.  For the full year,
operating revenues totaled $3.39 billion, representing growth of
19.2% over operating revenues of $2.84 billion for the full year
2007.

For the fourth quarter, revenue passenger miles decreased 5.0%
year-over-year to 5.9 billion on a capacity decrease of 7.4%,
resulting in a fourth quarter load factor of 78.6%, an increase of
2.0 points year over year.  Yield per passenger mile in the fourth
quarter was 12.23 cents, up 12.3% compared to the fourth quarter
of 2007.  Passenger revenue per available seat mile (PRASM) for
the fourth quarter 2008 increased 15.3% year-over-year to 9.62
cents.  For the full year 2008, PRASM increased 14.0% year over
year.

Operating expenses for the quarter increased 7.5%, or
$53 million, over the prior year period.  JetBlue's operating
expense per available seat mile (CASM) for the fourth quarter
increased 16.1% year-over-year to 10.14 cents.  Excluding fuel,
CASM increased 17.2% to 6.42 cents.  For the full year 2008,
JetBlue's CASM, excluding fuel, increased 8.7% to 5.94 cents.

                           Fuel Hedging

JetBlue hedged approximately 24% of its fuel consumption during
the fourth quarter, resulting in a realized fuel price of $2.67
per gallon, a 14.0% increase over fourth quarter 2007 realized
fuel price of $2.34.  JetBlue recorded $58 million in losses on
fuel hedges that settled during the fourth quarter.

Due to the rapid decline in fuel prices during the fourth quarter,
JetBlue modified its fuel hedge portfolio, effectively minimizing
fuel hedging losses and cash collateral requirements related to
further oil price declines.  At the end of the fourth quarter,
JetBlue had posted approximately $117 million in cash collateral
with fuel hedge counterparties related to its 2009 fuel hedge
contracts.

As of December 31, 2008, JetBlue had hedged approximately 8% of
its projected fuel requirements for 2009. JetBlue expects an
average price per gallon of fuel, including the impact of hedges,
of $2.07 in the first quarter and $1.99 for the full year 2009.
"We expect lower fuel prices will provide significant savings to
JetBlue in 2009," said Ed Barnes, JetBlue's CFO.

                       Balance Sheet Update

JetBlue ended the fourth quarter with $561 million in cash and
cash equivalents.  In addition, JetBlue had $258 million of
auction rate securities, net of impairment losses, at the end of
the quarter.  JetBlue recorded a $53 million accounting charge in
the fourth quarter to reflect a decline in the market value of
some of its auction rate securities. The accompanying financial
tables contain further information regarding this impairment
charge.

"We strengthened our balance sheet in 2008 by paying down almost
$700 million of debt, and we will continue to take steps to
bolster our liquidity," said Mr. Barnes.  "With minimal debt
maturities in 2009, we believe JetBlue is very well positioned to
successfully manage through this period of economic uncertainty
and build for the future."

               First Quarter and Full Year Outlook

Looking ahead, for the first quarter of 2009, JetBlue expects to
report an operating margin between six and eight percent.  Pre-tax
margin for the quarter is expected to be between zero and two
percent.  PRASM is expected to increase between two and four
percent year over year.  RASM is expected to increase between five
and seven percent year over year.  CASM is expected to increase
between zero and two percent over the year-ago period.  Excluding
fuel, CASM in the first quarter is expected to increase between 11
and 13 percent year over year.  Capacity is expected to decrease
between five and seven percent in the first quarter and stage
length is expected to decrease roughly six percent over the same
period last year.

For the full year 2009, JetBlue expects to report an operating
margin between 12 and 14 percent.  Pre-tax margin for the full
year is expected to be between six and eight percent.  PRASM for
the full year is expected to increase between one and four percent
year over year.  RASM for the full year is expected to increase
between three and six percent.  CASM for the full year is expected
to decrease between five and seven percent over full year 2008.
Excluding fuel, CASM in 2009 is expected to increase between 10
and 12 percent year over year.  Capacity for the full year 2009 is
expected to decrease between zero and two percent over 2008 and
stage length is expected to decrease about six percent over full
year 2008.

A full-text copy of the company's press release and Consolidated
Statements of Operations is available for free at:

               http://researcharchives.com/t/s?390f

On January 29, 2009, the company also provided an update for
investors presenting information relating to its financial outlook
for the first quarter ending March 31, 2009 and full year 2009,
and other information regarding our business.

A full-text copy of the company's investor update is available for
free at: http://researcharchives.com/t/s?3910

                      About JetBlue Airways

Based in Forest Hills, New York, JetBlue Airways Corporation
(Nasdaq: JBLU) -- http://www.jetblue.com/-- is a passenger
airline that provides customer service primarily on point-to-
point routes.  As of June 30, 2008, the company operated a fleet
of 106 Airbus A320 aircraft and 36 EMBRAER 190 aircraft, of which
83 were owned, 55 were leased under operating leases and four were
leased under capital leases.

JetBlue currently serves 53 cities with 600 daily flights.

                          *     *     *

As reported in the Troubled Company Reporter on July 24, 2008,
Moody's Investors Service downgraded the Corporate Family and
Probability of Default Ratings of JetBlue Airways Corp. to Caa2
from Caa1, as well as the ratings of its outstanding corporate
debt instruments and certain Enhanced Equipment Trust
Certificates.  The outlook is negative.

The TCR reported on Oct. 20, 2008, that Standard & Poor's Ratings
Services affirmed its ratings on JetBlue Airways Corp.
(B-/Negative/--), and removed them from CreditWatch, where they
were placed with negative implications May 22, 2008, as part of an
industrywide review.  The outlook is negative.  Ratings on
pass-through certificates insured by bond insurers were not on
CreditWatch and are not affected.


LEHMAN BROTHERS: Unit Sues to Block $137MM Transfer to Ballyrock
----------------------------------------------------------------
Debtor Lehman Brothers Special Financing Inc., has sued Ballyrock
ABS CDO 2007 1 Limited and Wells Fargo, N.A., acting in its
capacity as trustee under an indenture for the issuance of notes.
In its complaint filed with the U.S. Bankruptcy Court for the
Southern District of New York, LB Special Financing seeks
declaratory and injunctive relief, specifically to bar Wells Fargo
from distributing more than $137 million to Ballyrock.

Before the petition date, LB Special Financing and Ballyrock
entered into a contract, known as a credit default swap, pursuant
to which Ballyrock, a special purpose entity formed solely for
this transaction, agreed to pay LB Special Financing if losses
were incurred on certain underlying assets.  Most of these assets
consisted of residential mortgage-backed securities -- the now
"toxic" assets subject to much press and legislation. In return,
LB Special Financing agreed to pay a periodic premium to
Ballyrock, similar to an insurance premium.  LB Special Financing
thus purchased contractual protection that could potentially pay
it hundreds of millions of dollars if there were losses with
respect to the specified residential mortgage-backed securities,
while the investors in Ballyrock stood to profit if there were few
or no losses on such securities, explains Ralph I. Miller, Esq.,
at Weil, Gotshal & Manges LLP, in New York.  "Because of the steep
decline in the housing market and the ensuing poor performance of
residential mortgage-backed securities, LB Special Financing's
investment is now worth more than $400 million, while investors in
Ballyrock should be expected to receive little or none of their
investment since the deal has turned out so badly for them.

LB Special Financing sued Ballyrock and Wells Fargo to protect its
contractual right to more than $400 million from Ballyrock, and to
enjoin the Trustee from improperly distributing to Ballyrock's
investors the remaining assets -- over $137 million -- that are
rightfully the property of LB Special Financing.  The Credit
Default Swap Agreement at issue is "in the money" to LB Special
Financing by more than $400 million.  Nevertheless, the
Trustee seeks to distribute all the remaining assets of Ballyrock
to Ballyrock's investors instead of paying any of them to LB
Special Financing.  This proposal is based on a purported
technical default by LB Special Financing under the Credit Default
Swap Agreement that had no economic impact on Ballyrock or its
investors, Mr. Miller relates.  "Applicable New York and
bankruptcy law prevents this result, which will provide a
significant windfall to investors of Ballyrock, including third-
party foreign investors, at the expense of LB Special Financing
and its creditors."

According to Mr. Miller, solely as a result of the bankruptcy of
LBHI (the parent of LB Special Financing), Ballyrock purported to
terminate the Credit Default Swap Agreement with LB Special
Financing on September 16, 2008.  As a result of the purported
termination of the Credit Default Swap Agreement, the Trustee
intends to pay the remaining $137 million to the Ballyrock
investors on February 6, 2009.  According to the Trustee, after
such payment no money will remain to pay LB Special Financing,
even though the economics of the transaction are heavily in
LB Special Financing's favor.  The investors in Ballyrock -- who
made a poor investment decision -- will receive a windfall at the
expense of LB Special Financing and its creditors.

LB Special Financing thus raises two separate grounds for the
relief it seeks:

   -- Even if the termination of the Credit Default Swap Agreement
      was proper, the money should be distributed to LB Special
      Financing instead of providing a windfall to the Ballyrock
      investors.

   -- Because the termination of the credit default swap was
      improper, none of the money should be distributed to anyone
      at this time.

                     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: Slashes Unsecured Debt to $200-Bil., CEO Says
--------------------------------------------------------------
Lehman Brothers Holdings, Inc., according to its chief executive
officer Bryan Marsal, has reduced its unsecured liabilities to
about $200 billion, Bloomberg News said in a February 3, 2009,
report.

When LBHI filed for bankruptcy in September 2008, it declared
$613 billion in debt, of which $400 billion were short-term loans
offset by assets that "netted out."  Mr. Marsal told Bloomberg
that Lehman Brothers has $7 billion in cash so far to pay its
creditors.

In a recent filing with the U.S. Bankruptcy Court for the
Southern District of New York where Lehman's bankruptcy case is
pending, the company disclosed that it had about $360 billion in
liabilities, with $210 billion due to affiliates and
subsidiaries.

Mr. Marsal told Bloomberg in an interview that Lehman is
evaluating a plan to create a separate company for Lehman's real
estate assets and another company for the bank's illiquid assets,
including private equity investments.  He said Lehman's illiquid
real estate and private equity are expected to be sold in the
next two to three years.

Lehman may pay its creditors partly in cash and partly in stock,
the report quoted Mr. Marsal as saying.  The company created for
the illiquid assets would distribute stock to creditors.

"We have 500 people working the assets," Mr. Marsal further told
Bloomberg.  Based on Lehman's bond prices of 15 cents on the
dollar or less, investors anticipate recoveries of no more than
$30 billion, or 15% of liabilities, the news agency said.

The Financial Times elaborated that Mr. Marsal's plan would allow
Lehman to "cordon off difficult-to-sell assets and wait for the
markets to improve, preventing fire sales of its holdings."  One
those difficult-to-sell properties are Lehman's real estate
assets, which is valued at $43 billion, the FT said.

Bloomberg said some or all of Lehman's $8 billion in bank loans
may be converted to cash within two years.  Lehman, according to
FT, has private equity and proprietary investments like its stake
in SkyPower, a Canadian renewable energy company.

Martin Bienenstock, Esq., at Dewey & LeBoeuf LLP, in New York,
said creditors could not yet figure out how much they might get
from Lehman since the company has not yet filed up-to-date lists
of assets and liabilities for all its units.  "The delays in
filing schedules for the different entities are keeping creditors
in the dark.  [Mr.] Marsal's comments allow a little light into
the room," Bloomberg quoted Mr. Bienenstock as saying.  Mr.
Bienenstock represents several Lehman creditors, including The
Walt Disney Co.

Lehman Brothers recently got until March 16, 2009, to file its
schedules of assets and liabilities and statements of financial
affairs.

Lehman Brothers in December 2008 accepted $813.8 million in
dividend-paying preferred shares for its Neuberger Berman money
management unit.  Lehman also raised about $2 billion from
$26 billion in derivatives contracts.

The FT continued that Lehman may try to convince U.S. regulators
that the industrial bank it operates in Utah and its thrift bank,
Lehman Brothers Thrift, are financially viable and may be
eligible to sell loss-causing assets into the $700 billion relief
package granted by the U.S. Government.

                      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: Can't File Annual Report By Feb. 19 Deadline
-------------------------------------------------------------
Lehman Brothers Holdings, Inc., said in a Form NT 10-K filed with
the U.S. Securities and Exchange Commission that it is unable to
timely file its Annual Report on Form 10-K for the fiscal year
ended November 30, 2008, for these reasons:

  (1) the company's filing of a voluntary petition under
      Chapter 11 of the Bankruptcy Code;

  (2) the commencement of various administrative or civil
      rehabilitation proceedings of subsidiaries comprising
      significant parts of the company's European and Asian
      businesses; and

  (3) the sale since September 15, 2008, of significant
      businesses comprising the company's historical business.

"As a result of these developments, [Lehman Brothers] is
currently unable to complete the preparation of its consolidated
financial statements for the fiscal year ended November 30, 2008,
David J. Coles, the company's chief financial officer, said.

In addition, LBHI, Mr. Coles stated, currently has neither access
to major components of its internal systems nor the ability to
prepare its consolidated financial statements and the remainder
of the report, with all the required disclosures, to have them
properly certified by its current executive officers, and have
them reviewed by its independent auditors.

LBHI will not be in a position to file by February 19, 2009, Mr.
Coles said.  LBHI has also not filed its Quarterly Report for the
fiscal quarter ended August 31, 2008.

LBHI anticipates, based on the information currently available to
it, that results of operations for the fiscal year ended
November 30, 2008 will be significantly different from those for
the 2007 fiscal year, due to significant developments in the
business over the past year.

                      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: First BanCorp Has $1.4 Mil. Unsecured Exposure
---------------------------------------------------------------
First BanCorp reports that as of December 31, 2008, it has an
unsecured counterparty exposure with Lehman Brothers Special
Funding, Inc., which filed for bankruptcy on October 3, 2008, of
approximately $1.4 million.  This exposure has been reserved.

Lehman Brothers Special Financing, Inc. was counterparty to First
BanCorp on certain interest rate swap agreements. During the third
quarter of 2008, Lehman failed to pay the scheduled net cash
settlement due to the Corporation, which constitutes an event of
default under these interest rate swap agreements. First BanCorp
terminated all interest rate swaps with Lehman and replaced them
with another counterparty under similar terms and conditions.

First BanCorp also relates that it is in the process of reviewing
its options for the recovery of securities pledged under these
agreements with Lehman to guarantee First BanCorp's performance
thereunder.  The market value of the pledged securities as of
December 31, 2008 amounted to approximately $62 million. First
BanCorp believes that the securities pledged as collateral should
not be part of the bankruptcy estate. On January 30, 2009, First
BanCorp filed a customer claim with the trustee and at this time
the Corporation is unable to determine the claim resolution time
or whether it will succeed in recovering all or a substantial
portion of the collateral or its equivalent value.

                      About First BanCorp

First BanCorp -- http://www.firstbankpr.com/-- is the parent
corporation of FirstBank Puerto Rico, a state-chartered commercial
bank with operations in Puerto Rico, the Virgin Islands and
Florida; of FirstBank Insurance Agency; and of Ponce General
Corporation.  First BanCorp, FirstBank Puerto Rico and FirstBank
Florida, the thrift subsidiary of Ponce General, all operate
within U.S. banking laws and regulations. The Corporation operates
a total of 194 branches, stand-alone offices and in-branch service
centers throughout Puerto Rico, the U.S. and British Virgin
Islands, and Florida.  Among the subsidiaries of FirstBank Puerto
Rico are Money Express, a finance company; First Leasing and Car
Rental, a car and truck rental leasing company; and FirstMortgage,
a mortgage origination company.  In the U.S. Virgin Islands,
FirstBank operates First Insurance VI, an insurance agency, and
First Express, a small loan company. First BanCorp's common and
publicly-held preferred shares trade on the New York Stock
Exchange under the symbols FBP, FBPPrA, FBPPrB, FBPPrC, FBPPrD and
FBPPrE.

                      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: Seeks to Grant 1st Priority Liens to Brokers
-------------------------------------------------------------
Lehman Brothers Holdings Inc. and its affiliates seek authority
from Judge James Peck of the U.S. Bankruptcy Court for the
Southern District of New York to grant first priority liens to
certain broker dealers in cash, securities, and other collateral
that will be posted in connection with Institutional Futures
Account Agreements, Prime Brokerage Account Agreements, and other
related agreements that
the Debtors may enter into with the Broker Dealers.

These Agreements will enable the Debtors to engage in a variety
of hedging transactions aimed to reduce the risk associated with
market fluctuations that could cause the value in certain
prepetition derivative contracts to deteriorate, Lori R. Fife,
Esq., at Weil, Gotshal & Manges, LLP, in New York, explains.

As of the Petition Date, the Debtors were party to more than
900,000 prepetition derivative contracts.  The values and the
contractual obligations of the Debtors and their counterparties
to these Derivative Contracts are keyed to various assets or
indices of asset values.

To guard against the risk that movement in the financial markets
could change the net amounts owing and destroy the value
available to the Debtors' estates and stakeholders in the Chapter
11 cases under the Debtors' prepetition derivative contracts, the
Debtors in the ordinary course of their business would enter into
certain hedges.

To implement this strategy during the pendency of the Chapter 11
cases, the Debtors plan to enter into agreements with the Broker
Dealers to open futures accounts and prime brokerage accounts.
Through those Accounts, the Debtors will enter into a diverse
range of trading or hedging transactions including but not
limited to over-the-counter transactions that will serve as a
hedge against any potential future loss in value under the
applicable Derivative Contract.

The Debtors' entry into the Hedging Transactions will provide
them with a hedge against their short or long trading positions
under the Derivatives Contracts but require the posting of cash,
securities, or other collateral that is equal to a percentage of
the value of the Hedging Transaction, Mr. Fife tells the Court.

The Broker Dealer counterparties to the Hedging Transactions will
extend credit to the Debtors by making the full value of the
Hedging Transactions available to the Debtors while only
requiring the posting of Collateral that is less than the
transactions? full value.

In each case, the Collateral requirements will be determined by
the Broker Dealer and will be driven by industry standards that
take into consideration the type of transaction and the credit
risk associated with the Debtors as a counterparty.  The Debtors
will grant the Broker Dealers a first priority lien in the
Collateral to secure the Debtors' performance obligations under
the Agreements.

The Accounts and the Hedging Transactions are not being utilized
as an investment vehicle but only as a means to continue the
hedging practices the Debtors engaged in prior to the Petition
Date and in each case relate to transactions that the Debtors
entered into prior to the Petition Date, Mr. Fife assures the
Court.  Further, the Debtors will not enter into any Agreement
and open an Account with a Broker Dealer unless that dealer
agrees that the Collateral in the Accounts cannot and will not be
used to set-off any other prepetition or postpetition claims that
that Broker Dealer may have against the Debtors, Mr. Fife adds.

                      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: Seeks to Sell LBT Varlik to Vector
---------------------------------------------------
Lehman Brothers Holdings Inc. and its affiliates seek the
authority from Judge James Peck of the U.S. Bankruptcy Court for
the Southern District of New York to settle certain rights under
loan agreements and sell certain of their rights under those
agreements to Vector Holdings S.a.r.l.

LBT Varlik Yonetim Anonim Sirketi, an indirect, non-Debtor
subsidiary of Lehman Brothers Holding Inc., is the party to the
loan agreements.  LBT's assets include an asset management
license, a non-performing loan portfolio with a book value of
about $66,200,000, and a cash balance of about $2,600,000.  LBT
has liabilities for $69,400,000 under two loan agreements with
Lehman Brothers Bankhaus AG, another indirect, non-Debtor
subsidiary of LBHI, incorporated in Germany.  Bankhaus was later
placed in an insolvency proceeding in Germany in November 2008.

Bankhaus participated 100% of its interest in the Loan Agreements
to Lehman Commercial Paper Inc. prior to LCPI's Chapter 11 case.
The lack of formal documentation of the participation, however,
has resulted in a dispute as to the ownership of the rights,
title, interest and benefits in relation to the receivables under
the Loan Agreements, the Debtor tell the Court.

The Debtors have decided to market LBT for sale to a third party
and determined that an offer by Vector provided the greatest
recovery for LCPI's estate and creditors.  Vector offered
56,099,995 Turkish Lira in exchange for the sale and assignment
of all of LCPI's rights, title and interest in the Receivables.

Vector's purchase of the Receivables from LCPI is conditioned,
however, on the consummation of (i) Bankhaus' assignment of its
interest in the receivables to LCPI, and (ii) the sale of the
equity interests in LBT to Vector pursuant to a Share Sale and
Purchase Agreement dated January 9, 2009.

The Debtors now ask the Court to:

  (a) authorize and approve LCPI's purchase and acceptance from
      Bankhaus of any interest that Bankhaus may have in the
      Receivables; and

  (b) authorize and approve LCPI's assignment and sale of the
      Receivables to Vector, free and clear of any liens,
      claims, encumbrances, and other interests.

The Debtors maintain that they are not aware of any liens,
claims, encumbrances or other interests held by any other party
in respect of the Receivables.  They further maintain that LCPI
and Vector negotiated the Assignment Agreement at arms' length
and in good faith.

Hearing on the motion is set for February 25, 2009 at 10 a.m.
(Eastern Time).  Written objections must be filed no later than
February 20, 2009 at 4:00 p.m. (Eastern Time).

                      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: Court Approves Trade Confirmation Decisions
------------------------------------------------------------
Judge James Peck of the U.S. Bankruptcy Court for the Southern
District of New York approved the letter agreements between
Debtors Lehman Commercial Paper, Inc., and Lehman Brothers
Holdings, Inc., and each of these settling counterparties:

  * Morgan Stanley International Limited
  * JPMorgan Chase & Co.
  * Tennenbaum Opportunities Partners V, L.P.
  * Special Value Expansion Fund, LLC
  * Special Value Opportunities Fund, LLC
  * Wachovia Bank, National Association
  * Evergreen Investment Management Company, LLC
  * Bank of America, N.A.
  * Putnam Investments
  * M&G Investment Management Limited

With respect to the Open Trade Confirmations with Fir Tree
pertaining to CIT Group Inc., which will be closed through a
market standard form of participation agreement, Judge Peck ruled
that all payments received by the Debtors with respect to those
participated positions do not constitute property of the Debtors'
estates and will be conveyed by the Debtors to Fir Tree as and
when received.  Judge Peck further ruled that any payment made by
Fir Tree to the Debtors in accordance with the terms of that
participation agreement to satisfy a payment obligation under the
applicable credit agreement do not constitute property of the
Debtors' estates and will be conveyed by the Debtors to the
appropriate party in accordance with the terms of the
participation agreement.

The Court found that the Debtors have demonstrated adequate
assurance of future performance of the Assumed Trades and the
Amended Trades.  No Counterparty will be entitled to assert or
take any action to exercise a right to set off any prepetition
claim that it might have against either Debtor, including,
without limitation, claims for damages arising from the rejection
of a Rejected Trade, against any obligation payable to the
applicable Debtor under any Assumed Trade or Amended Trade,
provided, however, that nothing contained in the Order will
compromise the right that any Counterparty may have to file a
claim for damages arising from the rejection of a Rejected Trade
if such right is preserved in that Counterparty's letter
agreement.  Settlement of all Assumed Trades or Amended Trades
will include all appropriate, usual and customary settlement
adjustments, the Court held.

The Debtors and each of Field Point IV S.a.r.l. and Blue Mountain
Credit Alternatives Master Fund L.P. will agree on a discovery
schedule and submit to the Court a proposed pretrial order with
respect to litigation of Field Point and Blue Mountain's
objections.

The Court authorized the Debtors to assume several trades, lists
of which are available for free at:

     http://bankrupt.com/misc/LehmanAssumedTrades1.pdf
     http://bankrupt.com/misc/LehmanAssumedTrades2.pdf

The Court also authorized the Debtors to amend several trades and
assume those trades as amended.  A list of those trades is
available for free at:

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

The Court further authorized the Debtors to reject several
trades, a list of which is available for free at:

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

Prior to the Court's approval of the Debtors' motion, Hartford
Investment Management Company, on behalf of The Hartford Floating
Rate Fund, The Hartford High Yield Fund and Hartford High Yield
HLS Fund, object to the Debtors' proposed rejection of the trade
agreement with Lehman Commercial Paper, Inc., of $1 million face
value of debt of LyondellBassell at 82.25%.

                      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)


MACY'S INC: Moody's Reviews 'Ba1' Subordinated Shelf Rating
-----------------------------------------------------------
Moody's Investors Service placed Macy's, Inc.'s ratings on review
for possible downgrade.  The review for possible downgrade was
prompted by Moody's concern that Macy's significantly lower 2009
earnings guidance would result in the company maintaining credit
metrics that are more appropriate for a Ba rating level over the
medium term.

The company announced that its fiscal year 2009 earnings per share
would be between $0.40 and $0.55 per share, a level that is
significantly below its current fiscal year 2008 guidance of $1.10
to $1.20 per share.  Given the company's high debt load, Moody's
believe that this earnings level makes it unlikely that the
company will be able to maintain credit metrics appropriate for an
investment grade company.  Specifically, it is highly unlikely
that Macy's will be able to avoid violating the two credit metrics
that Moody's outlined in Moody's credit opinion dated October 16,
2008 as potentially prompting a downgrade.  These were debt to
EBITDA above 4.0 times and EBITA to interest expense below 2.5
times.  Moody's estimate that the midpoint of the earnings per
share guidance will result in EBITDA of nearly $2.2 billion and
debt to EBITDA of about 4.7 times.

The review for possible downgrade will focus on the likely level
of the company's credit metrics over the medium term considering
its 2009 earnings guidance, its $950 million debt tender, the cost
reduction program from the consolidation of its divisions, and the
national roll out of the My Macy's program.  The review will also
focus on the impact of the reduction in dividends and capital
expenditures on Macy's cash flow, as well as its future intentions
regarding share repurchase programs.  Finally, the review will
consider the likely impact of the difficult consumer spending
environment that Macy's is currently facing.

These ratings are placed on review for possible downgrade:
Macy's Inc.:

  -- Senior unsecured shelf at (P)Baa3

May Department Store Company:

  -- Senior unsecured at Baa3
  -- Macy's Retail Holdings, Inc.
  -- Senior unsecured at Baa3
  -- Subordinated shelf at (P) Ba1
  -- Commercial paper at Prime-3

The last rating action on Macy's was on October 15, 2008 when its
senior unsecured rating was affirmed at Baa3 and the rating
outlook was changed to negative.

Macy's, Inc. is one of the United States' largest department store
operators with more than 850 stores operating under the Macy's and
Bloomingdale's nameplates.  Revenues are approximately
$25.5 billion.


MAGNA ENTERTAINMENT: Charlie Williams Resigns as Director
---------------------------------------------------------
Magna Entertainment Corp. (NASDAQ: MECA; TSX: MEC.A) disclosed
that Charlie J. Williams has stepped down as a director of MEC.
Mr. Williams informed MEC that, "I have greatly enjoyed my time as
a director of MEC.  However, in the current environment there are
other business matters unrelated to MEC that require all of my
time and attention.  I will always maintain a strong interest in
MEC and a wish that it, and horse racing generally, will have a
bright future."

Frank Stronach, Chairman and Chief Executive Officer of MEC,
stated: "On behalf of everyone at MEC, I would like to thank
Charlie for his dedicated service.  His keen ability for strategic
thinking and fresh point of view were invaluable to MEC's Board of
Directors. Charlie has our gratitude and wishes for success in all
his future endeavors."

Mr. Williams' position on the Audit Committee will be filled by
Frank Vasilkioti effective immediately.

                    About Magna Entertainment

Headquartered in Aurora, Ontario, Magna Entertainment Corp.
(Nasdaq: MECA)(TSX: MEC.A) -- http://www.magnaentertainment.com/
-- acquires, develops, owns and operates horse racetracks and
related pari-mutuel wagering operations, including off-track
betting facilities.  The company also develops, owns and operates
casinos in conjunction with its racetracks where permitted by law.

                       Going Concern Doubt

As reported in the Troubled Company Reporter on March 20, 2008,
Ernst & Young LLP in Toronto, Canada, expressed substantial doubt
about Magna Entertainment Corp.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the years Dec. 31, 2007, and 2006.  The auditing
firm pointed to the company's recurring operating losses and
working capital deficiency.

Net loss for the three months ended Sept. 30, 2008, was
$48.4 million, an improvement of $1.5 million or 2.9% compared to
the same period last year.  Net loss for the nine months ended
Sept. 30, 2008, was $116.1 million, an increase of $45.3 million
or 64.0% compared to the same period last year.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $1.1 billion, total liabilities of $891.0 million and
shareholders' equity of $272.7 million.


MASONITE INTL: Obtains Feb. 13 Extension of Forbearance Pact
------------------------------------------------------------
Masonite International Inc. entered into a further extension, to
February 9, 2009, of the forbearance agreement dated
September 16, 2008, with its bank lenders.  Masonite also has
entered into a further extension, to February 13, 2009, of the
separate forbearance agreement it previously reached with holders
of a majority of the senior subordinated notes due 2015 issued by
two of the Company's subsidiaries.  Masonite continues to pursue
opportunities to develop an appropriate capital structure to
support its long-term strategic plan and business objectives.

As a result of its financial performance for the quarters ended
June 30, September 30, and, based on preliminary financial results
for the quarter ended December 31, 2008, Masonite was not in
compliance as of such dates with certain financial covenants
contained in its credit facility, which constituted an event of
default under the credit facility.  The financial covenants relate
to EBITDA metrics and reflect the challenging conditions in the
U.S. housing industry.

         Masonite's $1.175BB Term Loan & $350MM Revolver

According to the company's annual report for the year ended
December 31, 2007, the eight-year $1.175 billion term loan is due
April 6, 2013, and has an original interest rate of LIBOR plus
2.00% that amortizes at 1% per year.  The $350 million revolving
credit facility interest rate is subject to a pricing grid ranging
from LIBOR plus 1.75% to LIBOR plus 2.50%.  As of December 31,
2007, the revolving credit facility carried an interest rate of
LIBOR plus 2.50%.

The senior secured credit facilities provide for the payment to
the lenders of a commitment fee on the average daily undrawn
commitments under the revolving credit facility at a range from
0.375% to 0.50% per annum, a fronting fee on letters of credit of
0.125%, and a letter of credit fee ranging from 1.75% to 2.50%
(less the 0.125% fronting fee).

The senior secured credit facilities require the company to meet a
minimum interest coverage ratio of 1.65 times Adjusted EBITDA and
a maximum leverage ratio of 7.0 times Adjusted EBITDA as of
December 31, 2007.  These ratios will be adjusted over the passage
of time, ultimately reaching a minimum interest coverage ratio of
2.2 times Adjusted EBITDA, and a maximum leverage ratio of 4.75
times Adjusted EBITDA. In addition, the senior secured credit
facilities contain certain restrictive covenants which, among
other things, limit the incurrence of additional indebtedness,
investments, dividends, transactions with affiliates, asset sales,
acquisitions, mergers and consolidations, prepayments of other
indebtedness, liens and encumbrances and other matters customarily
restricted in such agreements.  They also contain certain
customary events of default, subject to grace periods, as
appropriate.

The company is permitted to incur up to an additional
$300 million of senior secured term debt under the senior secured
credit facilities so long as no default or event of default under
the new senior secured credit facilities has occurred or would
occur after giving effect to such incurrence, and certain other
conditions are satisfied.  The net debt to Adjusted EBITDA
calculation measures the debt the company has on its balance sheet
against its Adjusted EBITDA over the last 12 months.  This ratio
increased from 5.96:1.0 at December 31, 2006 to 6.00:1.0 at
December 31, 2007.  The company's cash interest coverage ratio
measures its Adjusted EBITDA as a multiple of its cash interest
expense over the last 12 months. This ratio was unchanged from the
prior year at 1.91:1.0.

            Masonite's $770MM Sr. Sub. Notes Due 2015

The $770 million senior subordinated loan initially carried an
interest rate of LIBOR plus 6.00% and increased over time to a
maximum interest rate of 11% per annum, which was reached in the
second quarter of 2006. On October 6, 2006, the senior
subordinated loan was repaid in full by the automatic issuance of
a new debt obligation comprising a Senior Subordinated Term Loan.
After October 6, 2006, the majority of the lenders elected to
convert their holdings of the Senior Subordinated Term Loan to
Senior Subordinated Notes due 2015, which bear interest 11%, and
are subject to registration rights.

            About Masonite International Corporation

Based in Ontario, Canada, Masonite International Corporation --
http://www.masonite.com/-- (TSE:MHM) is a vertically integrated
producer, manufacturing key components of doors, including
composite molded and veneer door facings, glass door lites and cut
stock.  The company provides these products to its customers in
more than 70 countries around the world.  The company is a wholly
owned subsidiary of Masonite International Inc.  It offers a range
of interior and exterior doors.  Masonite Canada operates Masonite
International's Canadian subsidiaries, well as certain other non-
United States subsidiaries.

                           *     *     *

As reported in the Troubled Company Reporter on Sept. 1, 2008,
Standard & Poor's Ratings Services lowered its long-term corporate
credit ratings on Masonite International Inc. (Masonite) and its
subsidiaries, Masonite International Corp. and Masonite US Corp.,
to 'CCC+' from 'B-'. S&P also lowered the senior secured debt
rating on Masonite to 'B' from 'B+'.  The ratings remain on
CreditWatch with negative implications, where they were placed
April 18, 2008.


MEDCOM USA: Appoints Michael Delagarza as Board Member
------------------------------------------------------
MedCom USA, Inc. (OTCBB:EMED), which recently signed letters of
intent to acquire PayMed USA, LLC, and Absolute Medical Software
Systems, has appointed an additional board member resulting in
three independent board members and one inside member.

Michael De La Garza, President and CEO, MedCom USA stated, "We are
pleased that we are able to bring in new management to steer this
company to success.  I look forward to working with current
management and believe I can bring leadership and specializations
in the HealthCare Industry to begin a successful era during these
trouble economic times."

On January 20, 2009, the Board of Directors removed William P.
Williams as President, Chief Executive Officer and Principle
Accounting Officer, and removed Eva Williams as the Secretary and
Treasurer of the Corporation.

Michael Malet resigned as Executive Vice President of the
Corporation.

On January 20, 2009, the Board of Directors appointed Michael
Delagarza as a member of the Board of Directors, as President and
as Chief Executive Officer of the Corporation.

Michael De La Garza is a health care executive with over 20 years
of experience.  His experiences have been most recently in acute
care hospitals serving in CIO/CTO and two medical software
companies serving as CEO and President.  His experience is also
complimented by serving as CEO and administrator of a chain of
diagnostic imaging centers in Texas and surrounding states. He has
been employed as a healthcare consultant for both profit and not
for profit health care facilities.

Mr. De La Garza has a thorough understanding of all aspects of
operations including the financial and physician side of the
health care environment.  He has served as CEO and founder of five
accidents and injury physician clinic comprised of over 15
physicians.  Other unique features in his career include serving
in a position of Director of Business Development for a large
medical billing company.  He has also been involved in
"certificate of need "review processes and community health
planning for the diagnostic imaging centers.

Mr. De La Garza has developed and operated his own consulting
firm.  The focus of his consulting activities was on hospitals and
physician practice development.  The consulting areas included
regulatory compliance, physician practice auditing, feasibility
studies for imaging facilities and insurance billing and
collection auditing.

Mr. De La Garza has a technology degree from Danforth College in
Texas City, Texas as well as attending South West Texas State
College in San Marcos, Texas.

                       About MedCom USA

Based in Scottsdale, Ariz., MedCom USA, Inc. (OTC BB: EMED) --
http://www.medcomusa.com/-- provides technology-based solutions
for the healthcare industry in the United States.  Its solutions
enable the users to collect, use, analyze, and disseminate data
from payers, healthcare providers, and patients.  The company
offers MedCom system that operates through a point-of-sale
terminal or Web portal, which consolidates insurance eligibility
verification; processes medical claims; and monitors referrals.
This system also allows customers to process their medical claims
through an online portal.

In addition, Medcom USA offers a combination of services for the
collection and approval of credit/debit card payments along with
the personal check guarantee from financial institutions.  The
company was founded in 1991 as Sims Communications, Inc., and
changed its name to Medcom USA, Inc., in 1999.

The Troubled Company Reporter reported on Oct. 2, 2008, that
Jewett, Schwartz, Wolfe & Associates raised substantial doubt
about the ability of MedCom USA, Inc., to continue as a going
concern after it audited the company's financial statements for
the year ended June 30, 2008.

At September 30, 2008, the company's balance sheet showed
$1,109,754 in total assets and $6,670,003 in total liabilities,
resulting in $5,560,248 total stockholders' deficit.

The company has year end losses from operations and had minimal
revenues from operations during the three months ended
September 30, 2008.  During the three months ended September 30,
2008, the company incurred a net income of $34,396 and has an
accumulated deficit of $91,237,055.  Further, the company has
inadequate working capital to maintain or develop its operations,
and is dependent upon funds from private investors and the support
of certain stockholders.  Medcom's total current liabilities at
September 30, 2008, of $3,544,310 exceeded total current assets of
$533,315.


MERITAGE HOMES: Reports 4th Quarter and Full Year Results
---------------------------------------------------------
Meritage Homes Corporation (NYSE: MTH) disclosed on January 28,
2009, fourth quarter and full year results for the periods ended
December 31, 2008.

Fourth Quarter Highlights (Percent Change 2008 vs. 2007):

   * Increased cash by $87M during the fourth quarter, to $206M
     at December 31, 2008

   * Adjusted pre-tax income slightly positive before
     impairments, compared to prior year $7M loss

   * Net loss of $79M includes $110M pre-tax impairments,
     partially offset by $30M of net tax benefits after deferred
     tax valuation allowance

   * Reduced fourth quarter general and administrative expenses
     by 47%

   * Reduced community count to 178 at year-end from 207 at
     September 30, 2008

Full Year Highlights (Percent Change 2008 vs. 2007):

   * Generated $200M cash flow from operations, paid off all bank
     debt, raised $83M in equity offering

   * Recognized tax losses resulting in anticipated $112M tax
     refund in early 2009

   * Reduced spec inventory by 31% to 768 or 4.3 homes per
     community

   * Reduced lot supply by 39% to 15,802, approximately 2.8 years
     inventory (on ttm closings)

   * Reduced full year general & administrative expenses by 36%,
     in line with decreases in home closing and total revenue

   * Reduced net debt-to-capital ratio at December 31 to 45% in
     2008, from 49% in 2007

   * Introduced more affordable homes with lower construction
     costs to improve profitability

         Increase in Cash and Cash Flow From Home Closings

Meritage increased its cash balance by $87 million during the
fourth quarter 2008, to end the year with $206 million in cash, no
borrowings outstanding under its credit facility and
$270 million available to borrow under the facility.  By
comparison, the Company reported $28 million in cash, $82 million
borrowed and $375 million available under its credit facility one
year earlier at December 31, 2007.

The Company generated $94 million positive cash flow from
operations during its fourth quarter, bringing the 2008 total to
approximately $200 million.

"As anticipated, we generated a significant amount of additional
cash, increasing our cash position by more than 70% during the
last three months of 2008.  And we expect to collect approximately
$112 million of tax refunds in the first part of 2009 for tax
losses we realized this year," said Steven J. Hilton, chairman and
CEO of Meritage.  "We further strengthened our balance sheet
during 2008 to better weather this recession."

           Cost Reductions in Construction and Overhead
                    Help Offset Revenue Decline

Fourth quarter 2008 home closing revenue declined 37% from the
prior year, due to 30% lower closings coupled with a 10% year-
over-year decline in average sale prices -- from $287,800 in the
fourth quarter of 2007 to $259,800 in the fourth quarter of 2008.

Fourth quarter gross margin including impairments was a negative
12.1% in 2008, compared to a negative 3.9% in the prior year.
Gross margins excluding real estate-related impairments of
$109 million improved to 13.9% in the fourth quarter 2008, from
12.7% in the previous quarter and 11.6% in the fourth quarter
2007.  The margin improvement was due to construction cost savings
and the effect of previous impairments, which lowered the cost
basis of homes closed.

"We have significantly reduced our costs to build, by re-designing
existing home plans, introducing new plans and re-negotiating
construction contracts in order to make our homes more affordable
and attract buyers in lower price ranges," said Mr. Hilton.
"We've been able to reduce the base cost of our homes in many
communities by 30% or more, combining a lower cost per square foot
with more efficient square footages, while allowing our customers
to choose additional features to suit their own style and budget.
More than half of our active communities outside of Texas were
redesigned in the latter months of 2008, and we anticipate
redesigning many of our remaining communities in 2009, to make our
homes more competitive with existing home inventories."

As sales and closings declined, Meritage also reduced overhead
costs, keeping them in line with lower revenue.  Fourth quarter
general and administrative expenses were 47% lower than the prior
year, on 35% lower total revenue.  As a result, these expenses
declined to 3.9% of total revenue in the fourth quarter 2008,
compared to 4.8% in the fourth quarter 2007.

               Further Impairments Result in Losses

Meritage reported a net loss of $79 million for the fourth quarter
of 2008, largely due to pre-tax real estate-related and joint
venture impairments of $109 million, plus $1 million impairment of
intangible assets, partially offset by a
$30 million net tax benefit.  By comparison, the net loss of
$129 million reported for the fourth quarter of 2007 included $130
million of pre-tax real estate-related and joint venture charges,
plus an additional $58 million pre-tax charge to impair goodwill
and intangible assets.  Excluding those and other primarily non-
cash charges in 2007, Meritage operated slightly above break-even
for the fourth quarter 2008, compared to a
$7 million pre-tax loss for the fourth quarter of 2007.

"Economic conditions in the fourth quarter of 2008 were the worst
we've experienced to date," said Mr. Hilton.  "We reduced our
number of active communities by 14% during the quarter, which we
expect to result in future overhead savings, and ended the quarter
with 178 actively selling communities, down from 207 at the
beginning of the period."

Impairments on land sold or held for sale accounted for
$23 million of the total fourth quarter 2008 real estate-related
charges recognized during the quarter.  Four property sales
generated $12 million of those impairments, but together with
prior impairments accounted for $47 million of the tax losses
realized during the quarter.  Additional impairments in the
quarter included $49 million of option terminations, $32 million
related to continuing projects and $5 million related to joint
venture impairments.  Geographically, $44 million of the total was
attributable to California, mainly from two large option
terminations and one bulk land sale.  In addition, option
terminations and lot sales in Texas made up most of the
$36 million of that region's total real estate-related charges in
the fourth quarter of 2008.

"Due to further weakening in our markets, we made strategic
decisions to cancel options and sell lots in certain marginal
projects," Mr. Hilton explained.  "Those actions accounted for
approximately $67 million of the total impairments in the fourth
quarter, which allowed us to realize approximately $106 million of
corresponding tax losses.  As a result, our total expected 2009
tax refunds increased from our prior quarter estimate, and we now
expect to receive a $112 million early refund in 2009.
Considering the difficult economic conditions, we believe that
taking swift action today regarding lot sales and cancellations of
options will limit our future losses, while strengthening our
balance sheet."

                 Economic Crisis Reduced Sales and
                      Increased Cancellations

Fourth quarter net orders declined 52% from 2007 to 2008 after a
56% cancellation rate in the quarter, sequentially higher than the
40% cancellation rate in the third quarter of 2008, and above the
47% rate experienced in the fourth quarter of 2007.  The total
dollar value of sales for the quarter was off 59% year over year,
reflecting a further decline of 14% in average selling price.
Texas experienced a 61% decline in net orders over the same period
in 2007, due to a large number of late-stage cancellations on
nearly-completed homes in December, believed to have been caused
by buyer anxiety over the financial crisis.  Colorado was the sole
division to record an increase in sales over the previous year's
final quarter.

"The reverberations from the financial crisis that began in
September 2008 impacted all of our markets, and we experienced a
substantial decrease in traffic and sales during the fourth
quarter, which is also traditionally a slower selling time due to
seasonality," said Mr. Hilton.  "One positive sign was that gross
sales hit their quarterly low point in November, and have inched
up a bit since then and into January."

Mr. Hilton added, "Texas remains our strongest region due to its
relatively strong population and employment growth, as well as
housing affordability.  Based on our experience in other markets
during this downturn, we were swift in taking aggressive actions
in Texas as our net sales there fell during the quarter.  We
closed certain communities, sold some assets and consolidated
operations in the region.  We'll continue to be cautious until we
are more comfortable with the activity in our Texas Region."

                         Full Year Results

Lower home closings, prices and revenue marked another year of
weaker market conditions for homebuilders.  Full year 2008 home
closing revenue declined 36% from the prior year, as a result of
27% lower closings and a 12% decline in average sale prices.

Meritage reported a full year net loss of $292 million in 2008,
including primarily non-cash real estate-related and joint venture
charges of $263 million (pre-tax), and $16 million of tax expense,
which is comprised of a $119 million deferred tax valuation
expense, partially offset by $103 million of tax benefits recorded
in 2008.  By comparison, the full year net loss of $289 million in
2007 included $398 million of pre-tax real estate-related and
joint venture charges, and $130 million of pre-tax charges to
impair goodwill.

The Company controlled overhead costs relative to declining
revenue, reducing general and administrative expenses by
$38 million or 36% from the previous year, to 4.5% of revenue in
2008, in line with 2007.  Excluding a $10 million benefit in the
second quarter 2008 related to a successful legal settlement, full
year general and administrative expenses were $78 million, or 5.1%
of full year revenue.

Cancellations increased as the economy weakened, adding to the
Company's inventory of unsold "accidental spec" homes.  Yet,
Meritage successfully reduced its spec inventory to 768 as of
December 31, 2008, from 809 the previous quarter, and 31% lower
than December 31, 2007.

Meritage controlled 15,802 lots at December 31, 2008, which was
71% lower than its peak three years earlier, and down from 20,738
at September 30, 2008.  Consistent with management's strategy to
reduce risks associated with owning long land positions in
depreciating markets, the Company owns 8,750 lots representing a
1.6-year supply (based on trailing twelve months' closings,) which
is one of the lowest in the homebuilding industry.

The Company was in compliance with all covenants under its amended
credit facility as of December 31, 2008.  Its net debt-to-capital
ratio was 45% at December 31, 2008, down from 49% at December 31,
2007.  The combined effect of Meritage's increase in cash,
reduction of debt and its $83 million equity offering more than
offset its 2008 decrease in stockholders' equity resulting from
net losses during the year.

                     Summary and Future Outlook

Mr. Hilton concluded, "2008 marks the end of our third year in
this housing recession, which has eliminated many of our
competitors and weakened all of our peers.  By executing our
asset-light option strategy as it was designed, we have managed a
lower lot supply and relatively stronger balance sheet than many
other homebuilders.  We have also built a substantial cash
position that should provide greater flexibility for the future.
In addition to the $206 million cash we had at the end of 2008, we
expect to collect approximately $112 million in tax refunds during
the first few months of 2009.

"Current tax law allows for losses to be carried back two years to
offset prior years' income, and we're at the end of that limit,
since 2006 was our last profitable year.  If a five-year carryback
is adopted as has been proposed, we could reverse much of the $127
million deferred tax valuation allowance we had as of the end of
the year.  The reversal would increase our book assets at the time
a change is adopted, by the amount of deferred tax assets we could
realize in 2009 and 2010.

"We fully expect 2009 will be another challenging year, and are
not hanging our hopes on 'rescue packages' that are out of our
control.  Having defended our balance sheet well to date, we are
focused on minimizing our losses and engineering our return to
profitability.  We have consolidated operations, reduced overhead
and limited purchases in order to preserve cash.  In addition, we
have redesigned our products -- eliminating home plans and
communities that didn't meet current market requirements,
introducing new plans or communities that appeal to more buyers,
and reducing our costs to allow us to sell homes at lower prices
while still earning an acceptable profit.

"Despite lower sales and current market conditions, we expect to
generate modest positive cash flow before tax refunds for the full
year 2009, before any potential limited land acquisitions.  We
have reduced our lot supply for the last ten consecutive quarters.
At some point, we intend to begin acquiring lots again at what we
expect will be greatly reduced prices.  However, we are keenly
aware of the risks in this environment, and therefore plan to
redeploy capital only where we believe we can achieve returns that
justify the risks," concluded Mr. Hilton.  "We look forward to
better market conditions that will enable us to take advantage of
such opportunities."

A full-text copy of the company's press release and selected
financial data is available for free at:

               http://researcharchives.com/t/s?3911

                       About Meritage Homes

Headquartered in Scottsdale, Arizona, Meritage Homes Corporation
(NYSE: MTH) -- http://www.meritagehomes.com/-- builds primarily
single-family homes across the southern and western United States
under the Meritage, Monterey and Legacy brands.  Meritage has
active communities in Houston, Dallas/Ft. Worth, Austin, San
Antonio, Phoenix/Scottsdale, Tucson, Las Vegas, the California
East Bay/Central Valley and Inland Empire, Denver and Orlando.
The company was ranked by Builder magazine in 2007 as the 12th
largest homebuilder in the U.S. and ranked #803 on the 2008
Fortune 1000 list.

Meritage Homes has reported consecutive quarterly net losses
beginning the second quarter ended June 30, 2007.

                          *     *     *

The Troubled Company Reporter reported on Dec. 16, 2008, that
Fitch Ratings affirmed Meritage Homes Corporation's Issuer
Default Rating and outstanding debt ratings:

  -- IDR at 'B+';
  -- Senior unsecured debt at 'BB-/RR3';
  -- Senior subordinated debt at 'B-/RR6'.


MICRO COMPONENT: Implements 20% Salary Cut to Worldwide Employees
-----------------------------------------------------------------
MCT, Inc., fka Micro Component Technology Inc., disclosed in a
regulatory filing with the Securities and Exchange Commission that
effective Jan. 19, 2009, the company implemented a 20% salary
reduction for all of its employees worldwide, in conjunction with
layoffs expected to affect a total of eleven of its employees.

The company expects to incur approximately $170,000 of expenses
related to the layoffs.

Based in St. Paul, Minnesota, Micro Component Technology Inc.
(OTC BB: MCTI) -- http://www.mct.com/-- is a smanufacturer of
test handling and automation solutions satisfying the complete
range of handling requirements of the global semiconductor
industry.

On Nov. 26, 2008, the name of the company was changed from Micro
Component Technology, Inc. to MCT, Inc. by an amendment to the
company's Articles of Incorporation.

At Sept. 27, 2008, the company's balance sheet showed total assets
of $6.655 million and total liabilities of
$13.401 million, resulting in a stockholders' deficit of about
$6.75 million.

For three months ended Sept. 27, 2008, the company posted net loss
of $2.2 million compared with net loss of $390,000 in the same
period in the previous year.

For nine months ended Sept. 27, 2008, the company posted net loss
of $4.0 million compared with net loss of $829,000 for the same
period in the previous year.

                       Going Concern Doubt

Olsen, Thielen & Co. Ltd., in St. Paul, Minnesota, expressed
substantial doubt about Micro Component Technology Inc.'s ability
to continue as a going concern after auditing the company's
consolidated financial statements for the years ended Dec. 31,
2007, and 2006.  The auditing frim reported that the company has
suffered recurring losses from operations and has a stockholders'
deficit.


MORIN BRICK: Ct Denies Extension of Exclusive Period to File Plan
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maine denied on
Jan. 14, 2009, Morin Brick Company, Inc.'s request to extend its
exclusive period to file a plan to April 1, 2009, and its
exclusive period to solicit aceptances of said plan to June 1,
2009.

The Debtor's exclusive period to file a plan expired on Jan. 1,
2009.

The request for extension of the Debtors' exclusive periods was
requested to allow TPG Advisory, LLC, the Debtor's proposed chief
restructuring officer, time to explore the market for a potential
sale or refinancing and allow the anticipate offers from
interested parties to continue to materialize.

Headquartered in Auburn, Maine, Morin Brick Company --
http://www.morinbrick.com/-- manufactures moulded and waterstruck
brick and extruded brick for customers primarily located in the
Northeastern United States and Canada.  The company filed for
Chapter 11 protection on Sept. 3, 2008 (Bankr. D. Maine Case No.
08-21022).  D. Sam Anderson, Esq., and Robert J. Keach, Esq., at
Bernstein Shur Sawyer & Nelson P.A., in Portland, Maine, represent
the Debtor as counsel.  Anthony J. Manhart, Esq., Fred W. Bopp
III, Esq., and Randy J. Creswell, Esq., at Perkins Thompson, P.A.,
represents the Official Committee of Unsecured Creditors as
counsel.  Tron Group is the Debtor's Chief Restructuring Officer.
When the Debtor filed for protection from its creditors, its
listed assets of between
$10 million and $50 million and debts of between $1 million and
$10 million.


MXENERGY HOLDINGS: Ends Cash Tender Offer for 2011 Sr. Notes
-------------------------------------------------------------
MXenergy Holdings Inc. said that, as of 12:00 p.m., New York City
time, on January 30, 2009, it had terminated its previously
announced cash tender offer for all of its outstanding Floating
Rate Senior Notes due 2011 and the related consent solicitation.
The tender offer and consent solicitation were made pursuant to an
Offer to Purchase and Consent Solicitation Statement, dated as of
December 15, 2008, and the related Letter of Transmittal and
Consent. The previously announced tender offer consideration and
consent payment will not be paid or become payable to holders of
the Notes who validly tendered their Notes and delivered their
consents in connection with the tender offer and consent
solicitation. All tendered Notes and delivered consents will be
returned to the holders thereof -- or, in the case of Notes
tendered by book-entry transfer, those Notes will be credited to
the account maintained at The Depository Trust Company from which
such Notes were delivered -- as promptly as practicable.

The Troubled Company Reporter reported on January 29, 2009, that
as of the close of business on January 23, 2009, approximately
$28.5 million in aggregate principal amount of the Notes have been
tendered.

MXenergy is a retail natural gas and electricity supplier in North
America, serving approximately 500,000 customers in 39 utility
territories in the United States and Canada.  Founded in 1999 to
provide natural gas and electricity to consumers in deregulated
energy markets, MXenergy helps residential customers and small
business owners control their energy bills by providing both fixed
and variable rate plans.

As of September 30, 2008, the company's balance sheet showed total
assets of $302,891,000, total liabilities of $285,220,000 and
redeemable convertible preferred stock totaling $50,242,000,
resulting in total stockholders' deficit of $32,571,000.

As reported by the Troubled Company Reporter on Dec. 22, 2008,
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on natural gas retail marketer MXEnergy Holdings
Inc.'s to 'CC' from 'CCC+'.  The rating remains on CreditWatch
with negative implications.

The TCR reported on Dec. 19, 2008, that Moody's Investors Service
maintained MXenergy Holdings Inc.'s Corporate Family Rating and
Probability of Default Rating of Caa3 and the Ca rating on its
floating rate senior notes due 2011 following the company's
announcement that it intends to commence a cash tender offer to
purchase its outstanding 2011 series notes.  The ratings remain
under review for possible downgrade.


NETVERSANT SOLUTIONS: Client Bankruptcies Cost Anixter $24 Mil.
---------------------------------------------------------------
Anixter International Inc. discloses that its fourth quarter 2008
operating income of $50.7 million and full year operating income
of $391.9 million were negatively affected by $24.1 million in bad
debt losses associated with the bankruptcies of NetVersant
Solutions Inc. and Nortel Networks Inc., the company's two major
customers.  The company's operating income was also impacted by
$4.2 million in costs associated with the retirement of the former
CEO; $8.1 million in severance and lease write-down costs incurred
in response to the deteriorating economic conditions; and $2.0
million in inventory markdowns resulting from sharply lower copper
prices.

On Tuesday, Anixter reported a net income of $9.4 million, which
was 87% lower than the $70.5 million reported in the year ago
quarter.  The company says the $50.7 million fourth quarter
operating income is 56% less than the $114.4 million reported in
the year ago period; and the $391.9 million full year operating
income is 11% lower than the $439.1 million reported in the prior
year.

Robert Eck, Anixter's President and CEO stated, "Our fourth
quarter results were negatively impacted by an accelerating
decline in macro economic trends, particularly in the last few
weeks of the quarter.  However, when fourth quarter sales trends
are evaluated without the effect of foreign exchange and
acquisitions, as detailed in the attached tables, we saw both the
influence of a softer economy, as well as examples of continuing
near-term market strength and success with specific growth
initiatives."

"The single greatest effect was the bankruptcies of NetVersant and
Nortel, which collectively caused us to take a charge of $24.1
million during the quarter for accounts receivable that we
estimate will not be collectible," Mr. Eck added.  "In markets
where we experienced measureable sales declines, we were
aggressive in reducing both headcount and facilities costs.
Together, headcount reductions and lease write-downs resulted in a
cost of $8.1 million in the quarter.  We anticipate 2009 expense
savings of $14.7 million associated with these actions.  Lastly,
while the rapidly softening economy drove down spot market copper
prices in the quarter it did not have a significant effect on
product pricing.  However, it did necessitate the recording of a
$2.0 million markdown on the carrying value of certain product
lines of our wire and cable inventory in Europe.  It is important
to note that this adjustment is less than 1% of the company's
total wire and cable inventory."

Anixter is a supplier of Supply Chain Services and products used
to connect voice, video, data and security systems.  Anixter also
provides specialty electrical and electronic wire and cable for
building construction, industrial maintenance and repair, and
original equipment manufacturing as well as the leader in
providing fasteners and "C" Class components to OEMs and
production lines.

                       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)

                    About NetVersant Solutions

Headquartered in Houston, Texas, NetVersant Solutions, Inc. --
http://www.netversant.com/-- provides wireless network
infrastructure services.  The company also provides an array of
voice, video and data communication services.  The company and 20
of its affiliates filed for Chapter 11 protection on November 19,
2008 (Bankr. D. Del. Lead Case No. 08-12973).  Daniel B. Butz,
Esq., and Gregory W. Werkheiser, Esq., at Morris, Nichols, Arsht &
Tunnell, represents the Debtors in their restructuring efforts.

The Debtor selected Porter & Hedges LLP as local counsel.  When
they filed for protection from their creditors, they listed
assets and debts between $100 million and $500 million each.


NEWCASTLE INVESTMENT: Provides More Info on NYSE Delisting Issue
----------------------------------------------------------------
Newcastle Investment Corp. has said it received a notification
from the New York Stock Exchange that the Company was not in
compliance with one of the NYSE's continued listing standards.  In
that announcement, the Company stated that the Notice pertains
only to the Company's common shares and does not directly pertain
to any series of the Company's preferred shares, which remain
listed on the NYSE.

Newcastle Investment said Tuesday that, to provide additional
clarity regarding the impact of the Notice on the listing of the
Company's preferred shares, while the Notice itself pertains to
the Company's common shares, the NYSE has informed the Company
that if the Company's common shares are delisted, the NYSE would,
consistent with its typical practice, also contemporaneously
delist each series of the Company's preferred shares that are
listed on the NYSE.

The Company intends to notify the NYSE of its intention to cure
the deficiency related to the price of its common shares.  If the
Company cures the share price deficiency with respect to its
common shares, then both the Company's common shares and preferred
shares will remain listed on the NYSE, subject to the Company's
compliance with the NYSE's regulations and the NYSE's ongoing
right to evaluate the continued listing of both types of shares.
The Company's common shares, as well as its Series B, Series C and
Series D preferred shares, are currently listed on the NYSE.

                         About Newcastle

Newcastle Investment Corp. (NCT) -- http://www.newcastleinv.com/
-- invests in real estate debt and other real estate related
assets. Newcastle is organized and conducts its operations to
qualify as a real estate investment trust (REIT) for federal
income tax purposes.  Newcastle is managed by an affiliate of
Fortress Investment Group LLC, a global alternative asset manager
with approximately $34.3 billion in assets under management as of
September 30, 2008.


NORTEL NETWORKS: Anixter Has $24MM Loss on Customer Bankruptcies
----------------------------------------------------------------
Anixter International Inc. discloses that its fourth quarter 2008
operating income of $50.7 million and full year operating income
of $391.9 million were negatively affected by $24.1 million in bad
debt losses associated with the bankruptcies of NetVersant
Solutions Inc. and Nortel Networks Inc., the company's two major
customers.  The company's operating income was also impacted by
$4.2 million in costs associated with the retirement of the former
CEO; $8.1 million in severance and lease write-down costs incurred
in response to the deteriorating economic conditions; and $2.0
million in inventory markdowns resulting from sharply lower copper
prices.

On Tuesday, Anixter reported a net income of $9.4 million, which
was 87% lower than the $70.5 million reported in the year ago
quarter.  The company says the $50.7 million fourth quarter
operating income is 56% less than the $114.4 million reported in
the year ago period; and the $391.9 million full year operating
income is 11% lower than the $439.1 million reported in the prior
year.

Robert Eck, Anixter's President and CEO stated, "Our fourth
quarter results were negatively impacted by an accelerating
decline in macro economic trends, particularly in the last few
weeks of the quarter.  However, when fourth quarter sales trends
are evaluated without the effect of foreign exchange and
acquisitions, as detailed in the attached tables, we saw both the
influence of a softer economy, as well as examples of continuing
near-term market strength and success with specific growth
initiatives."

"The single greatest effect was the bankruptcies of NetVersant and
Nortel, which collectively caused us to take a charge of $24.1
million during the quarter for accounts receivable that we
estimate will not be collectible," Mr. Eck added.  "In markets
where we experienced measureable sales declines, we were
aggressive in reducing both headcount and facilities costs.
Together, headcount reductions and lease write-downs resulted in a
cost of $8.1 million in the quarter.  We anticipate 2009 expense
savings of $14.7 million associated with these actions.  Lastly,
while the rapidly softening economy drove down spot market copper
prices in the quarter it did not have a significant effect on
product pricing.  However, it did necessitate the recording of a
$2.0 million markdown on the carrying value of certain product
lines of our wire and cable inventory in Europe.  It is important
to note that this adjustment is less than 1% of the company's
total wire and cable inventory."

Anixter is a supplier of Supply Chain Services and products used
to connect voice, video, data and security systems.  Anixter also
provides specialty electrical and electronic wire and cable for
building construction, industrial maintenance and repair, and
original equipment manufacturing as well as the leader in
providing fasteners and "C" Class components to OEMs and
production lines.

                    About NetVersant Solutions

Headquartered in Houston, Texas, NetVersant Solutions, Inc. --
http://www.netversant.com/-- provides wireless network
infrastructure services.  The company also provides an array of
voice, video and data communication services.  The company and 20
of its affiliates filed for Chapter 11 protection on November 19,
2008 (Bankr. D. Del. Lead Case No. 08-12973).  Daniel B. Butz,
Esq., and Gregory W. Werkheiser, Esq., at Morris, Nichols, Arsht &
Tunnell, represents the Debtors in their restructuring efforts.

The Debtor selected Porter & Hedges LLP as local counsel.  When
they filed for protection from their creditors, they listed
assets and debts between $100 million and $500 million each.

                       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: Specifies Customer Arrangements to Be Honored
--------------------------------------------------------------
Nortel Networks Inc., and its affiliated debtors have submitted a
new motion with the U.S. Bankruptcy Court for the District of
Delaware in connection with their Court-approved procedures for
honoring customer programs.

According to Bloomberg's Bill Rochelle, the Court had entered a
generally worded order authorizing Nortel to honor pre-bankruptcy
arrangements with customers, but the order "wasn't specific enough
to mollify the customers."

The Debtors ask the Court to issue a clarification that the
Customer Obligations Order it previously issued authorizes them
to honor all of their ordinary course customer obligations,
programs and similar arrangements, including these programs:

(1) Customer Credit Arrangements

   A Customer Credit Arrangement is a program through which a
   customer accrues credits either up-front, upon signing of
   a contract, or at an agreed upon percentage of its annual
   purchases with Nortel.  Once accrued, a customer may apply
   Customer Credits towards future purchases of Nortel products
   and services under the terms of its agreement.

(2) Training Credits

   The products and systems that the Debtors provide to their
   customers incorporate complex technologies.  Thus, the
   Debtors sell training programs alongside their products in
   order to educate customers on their features and instruct
   them as to their proper uses.  The training is provided
   either by the Debtors or third-party providers.  From time to
   time, the Debtors grant Training Credits to customers to help
   them shoulder training costs.

(3) Trade-in Credits

   Certain carrier and enterprise customers have contractual
   rights to trade in products utilizing old technologies when
   Nortel releases products that utilize newer technologies.  In
   order to create an incentive for existing customers to take
   advantage of new products, the Debtors have offered those
   customers Trade-in Credits from time to time to facilitate
   the transition from older to newer technologies.

(4) Performance Compensation Payments and Liquidated Damages

   These Compensation Payments are typically made in the form of
   Customer Credits to customers if the Debtors do not meet
   certain milestones, delivery dates or performance standards.
   Building Compensation Payments into larger customer contracts
   is an industry standard practice that provides comfort to
   customers in the event that system outages occur or new
   technologies cannot be rolled out on time.

(5) Free Trial Equipment and Services

   The Debtors grant certain customers the right to receive free
   services, lab or trial equipment, hardware and software
   products prior to their commercial release in order to
   accommodate in-house customer testing requirements and
   for other business development purposes.  Customers earn the
   benefits up-front upon the signing of a contract in exchange
   for signing a contract with a minimum purchase commitment or
   upon a negotiated factor of annual spend.

(6) Advanced Billing

   From time to time, certain customers pay portions of their
   contracts in advance.  Under this arrangement, a customer for
   instance may pay for all of the Debtors' service obligations
   at the start of a year.  Various customers have paid the
   Debtors for certain services and products prepetition, and
   the Debtors sees the need to continue to honor their
   obligations under the agreements to maintain good relations
   with their customers.

(7) Co-marketing Agreements

   These are agreements among the Debtors and certain of their
   customers, under which the Debtors make funds available to
   the customers for the promotion of their products to the
   customers' subscribers.

(8) Return Rights

   Certain customers have contractual rights to return certain
   products for cash based on defined contingencies.

The Debtors estimate that honoring the additional customer
programs through December 31, 2008, will cost them these amounts:

      Customer Credit Arrangements          $82,000,000
      Training Credits                       14,000,000
      Performance Compensation Payments      18,000,000
      Free Trial Equipment & Services         9,000,000
      Co-marketing Agreements                 3,000,000
      Return Rights                           1,000,000

"Without this clarification, customers may engage in various
protective measures, including withholding payments due to the
Debtors and seeking alternative suppliers to replace the
Debtors," says Derek Abbott, Esq., at Morris Nichols Arsht &
Tunnell LLP, in Wilmington, Delaware.

The requested clarification and accompanying comfort generated
for customers will benefit all stakeholders because they will
ensure the maintenance of the Debtors' most critical customer
relationships, Mr. Abbott maintains.

                       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)


NORTHEAST BIOFUELS: Section 341(a) Meeting Set for February 20
--------------------------------------------------------------
The United States Trustee for Region 2 will convene a meeting of
creditors of Northeast Biodfuels LP and its debtor-affiliates on
Feb. 20, 2009, at 10:00 a.m., at Alexander Prime Federal Building
in room 106, 10 Broad Street in Utica, New York.

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

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

                     About Northeast Biofuels

Headquartered in Fulton, New York, Northeast Biofuels LP aka
Northeast Biofuels LLC -- http://www.northeastbiofuels.com--
Operate as ethanol plants.  The company and two of its affiliates
filed for Chapter 11 protection on January 14, 2009 (Bankr. N.D.
N.Y. Lead Case No. 09-30057).  Jeffrey A. Dove, Esq., at Menter,
Rudin & Trivelpiece, P.C., represents the Debtors in their
restructuring efforts.  Blank Rome LLP will serve as the Debtors'
counsel.  The Debtors proposed FTI Consulting Inc. as their
financial advisor.  When the Debtors filed for protection from
their creditors, they listed assets and debt between $100 million
to $500 million each.


NOVA CHEMICALS: Fitch Downgrades Issuer Default Rating to 'B-'
--------------------------------------------------------------
Fitch Ratings has downgraded the Issuer Default Rating of NOVA
Chemicals Corporation to 'B-' from 'BB-'.  Additionally, Fitch has
downgraded the senior secured revolver, unsecured revolver and
notes, and preferred shares to 'BB-' from 'BB+'.  The company's
ratings remain on Rating Watch Negative.

The downgrade is based on the news that the NOVA's bank group has
imposed new conditions on the use of the company's main
$350 million secured revolver.  While NOVA's bank group
unanimously voted to provide covenant relief for the company in
the first half of 2009, they have also required NOVA to come up
with $200 million in new financing over the first half of the
year, comprised of a $100 million financing requirement by
Feb. 28, 2009 and a second $100 million financing requirement by
June 1, 2009.  These financing requirements create considerable
new hurdles for the company given the difficulties of locating new
financing sources in the high-yield chemicals markets.  They also
suggest that the company's bank group may be less willing to show
forbearance than Fitch had previously considered.  Fitch notes
that the company's deeply depressed stock price (with equity
market capitalization of less than $200 million at Jan. 30, 2009),
makes equity financing a very dilutive option for the company at
this point.

NOVA has significant maturities due in 2009. Current liquidity
remains strong, with total availability across all of NOVA's
facilities at Dec. 31, 2008 of $573 million, at the top end of the
company's preferred liquidity range, versus $376 million in
maturities due this year -- including $250 million of 7.4% notes
due in April and $126 million in preferreds due in October.

To date, the company has retired $125 million of 7.25% 2028 notes
putable by bondholders in August 2008 and rolled over $126 million
in preferreds (net of restricted cash) to October 2009.  At Sept.
30, 2008, the company had a total of five separate revolvers
totaling $683 million and a $300 million A/R securitization
facility.  Its largest secured revolver ($350 million) matures in
June 2010.  Maturities across other revolvers vary but generally
range from 2010-2013.

Fitch's Recovery Rating of '1' on NOVA's secured revolving credit
facility, unsecured notes and revolver, and preferred issuance
indicate outstanding (90%-100%) recovery prospects for holders of
these debt issues.  Fitch applied a liquidation value analysis for
these RRs.  The high recovery value for these issues reflects the
fact that liquidity stress is the primary driver of the current
rating, and asset coverage remains strong.

Nova Chemicals is a multinational producer of commodity chemicals
including styrene, polystyrene, ethylene and polyethylene with
approximately 3,300 full-time employees.  A majority of its assets
are located in Canada and the U.S.  In North America, Nova is the
leading producer of styrene and expandable polystyrene and the
fifth largest ethylene producer.  The company reports three
business segments: olefins/polyolefins, performance styrenics, and
the INEOS-NOVA Joint Venture.  In 2007, the U.S. accounted for 43%
of sales, Canada for 35%, Europe and rest of the world for 22%.
Polyethylene and styrenic polymers are used in rigid and flexible
packaging, containers, plastic bags, plastic pipe, electronic
appliances, housing and automotive components and consumer goods.
Exports to Asia are enabled in part by low-cost back-haul shipping
economics from Western Canada.

Fitch has downgraded these ratings:

  -- IDR to 'B-' from 'BB-';

  -- Senior secured revolving credit facility to 'BB-/RR1' from
     'BB+';

  -- Senior unsecured notes and revolving credit facilities to
     'BB-/RR1' from 'BB+';

  -- Preferred shares to 'BB-/RR1' from 'BB+'.


NOVADEL PHARMA: To Maintain Salaries & Withhold Annual Bonuses
--------------------------------------------------------------
In connection with its annual review of executive compensation, on
January 22, 2009, the Board of Directors of NovaDel Pharma Inc.,
in light of the recent and continued downturn in the economy,
approved, as recommended by the Compensation Committee of the
company, the proposal to maintain employee salaries, including the
executive officers of the Company, at 2008 levels and to withhold
annual bonuses for 2008 performance.  Notwithstanding this, the
Board of Directors has approved, as recommended by the
Compensation Committee, the proposal to grant a one-time special
cash bonus of $50,000 to Dr. David H. Bergstrom in recognition of
his individual efforts in 2008 in connection with the company's
research and development efforts and clinical activities
including, but not limited to, the U.S. Food and Drug
Administration's approval of the New Drug Application for
Zolpimist (zolpidem tartrate) Oral Spray for the short-term
treatment of insomnia.

In addition, on January 22, 2009, the Board of Directors approved,
as recommended by the Compensation Committee, the proposal to
grant stock options, in accordance with the Company's 2006 Equity
Incentive Plan, to certain executives:

                  Stock Option
Named Executive       Award      Vesting
---------------   ------------   -------
Steven B. Ratoff     1,250,000     (i) Options to purchase
                                       450,000 shares of common
                                       stock are fully vested and
                                       exercisable on January 22,
                                       2009.

                                  (ii) Options to purchase
                                       400,000 shares become
                                       fully  vested and
                                       exercisable upon the
                                       company's execution of
                                       license agreements whereby
                                       the company will receive
                                       cumulative upfront
                                       payments of $2,500,000 or
                                       more.

                                 (iii) Options to purchase
                                       400,000 shares become
                                       fully vested and
                                       exercisable upon
                                       execution of license
                                       agreements whereby the
                                       company will receive,
                                       inclusive of any upfront
                                       payment received in (ii),
                                       a total payment of
                                       $5,000,000 or more.

David H. Bergstrom     400,000   Exercisable in equal monthly
                                 installments over a period of
                                 twenty-four months.

Michael E. Spicer      125,000   Exercisable in equal monthly
                                 installments over a period of
                                 twenty-four months.

Deni M. Zodda          125,000   Exercisable in equal monthly
                                 installments over a period of
                                 twenty-four months.

These options have an exercise price of $0.34 per share (equal to
the fair market value on the date of grant, which is the closing
price on January 22, 2009) and will expire on January 22, 2014.

In addition, on January 22, 2009, the Board of Directors approved,
as recommended by the Compensation Committee, the proposal that,
in the event that the company engages in a strategic transaction,
including a merger, sale, license, collaboration or other business
combination, in which the company will receive a payment or
payments in excess of an undisclosed dollar amount approved by the
Board of Directors, that Mr. Ratoff will be granted a one-time
special cash bonus of $500,000.  The Board of Directors and Mr.
Ratoff continue to work through the terms of the agreement. Such
agreement will be filed as an exhibit to the company's next
periodic report.

                       About NovaDel Pharma

Based in Flemington, New Jersey, NovaDel Pharma Inc. (NYSE
Alternext: NVD) -- http://www.novadel.com/-- is a specialty
pharmaceutical company developing oral spray formulations for a
broad range of marketed drugs.

J.H. Cohn LLP, in Roseland, N.J., expressed substantial doubt
about NovaDel Pharma Inc.'s ability to continue as a going concern
after auditing the company's financial statements for the years
ended Dec. 31, 2007, and 2006.  The auditing firm pointed to the
company's recurring losses from operations and negative cash flows
from operating activities.

As of September 30, 2008, the company's balance sheet showed total
assets of $5.5 million and total liabilities of
$7.2 million, resulting in total stockholders' deficit of
$1.6 million.


PARALLEL PETROLEUM: Moody's Downgrades Note Ratings to 'Caa2'
-------------------------------------------------------------
Moody's Investors Service downgraded Parallel Petroleum
Corporation's (Parallel) $150 million senior unsecured notes to
Caa2, LGD5 (80%) from Caa1, LGD5 (77%).  Moody's affirmed
Parallel's B3 Corporate Family Rating and Probability of Default
Rating, but changed the outlook to negative from stable.  The
speculative grade liquidity rating remains SGL-3.

"The downgrade of the notes rating is due to the increased size of
the senior secured bank facility relative to the amount of the
unsecured bonds and the low likelihood of that changing in the
near term," commented Pete Speer, Moody's Vice-President.
"Moody's changed the outlook to negative due to Parallel's
weakening credit metrics and tight liquidity."

When the initial ratings were assigned to the senior unsecured
notes in July 2007, the senior secured revolving credit facility
borrowing base was $150 million which resulted in the notes being
notched one rating beneath the CFR under Moody's Loss Given
Default Methodology.  The current size of the borrowing base
significantly exceeds the amount that results in a double notching
of the bonds under LGD, and there is little likelihood of Parallel
replacing senior secured borrowings with unsecured borrowings or
paying down secured debt with an equity offering given current
capital market conditions.  Therefore Moody's has downgraded the
senior unsecured notes to Caa2, or two notches beneath the B3 CFR.

The negative outlook reflects Parallel's tight liquidity, which is
currently adequate for operations assuming a significant reduction
in capital spending levels.  The company previously announced a
2009 capital budget of $118.8 million which Moody's believes will
be further reduced given the continued decline in commodity
prices.  Lower natural gas and crude oil prices will reduce
operating cash flows but that will be partially mitigated by
Parallel having hedged oil and gas production volumes
approximating 48% of its total 3rd Quarter 2008 production levels
with floors of approximately $70 for oil and $7 for gas.  This
should help the company to meet its stated objective of living
within cash flow for 2009.

However, Parallel's senior secured borrowing base will go through
the usual re-determination in April and could be reduced depending
on the bank's price deck and the company's final 2008 year-end
proved reserve volumes.  In addition to the liquidity risks, the
negative outlook also incorporates the deterioration in Parallel's
credit metrics in 2008 and the potential for continued
deterioration in 2009.  Increasing debt levels throughout 2008 and
substantial capital investments combined with meaningful negative
price revisions to proved reserve volumes are expected to result
in higher leverage metrics on proved reserves and high finding and
development costs.  The reduced level of capital expenditures in
2009 is necessary to preserve liquidity but could result in
another year of weak reserve replacement results, while there is
limited opportunity for meaningful debt reduction absent a
strengthening of commodity prices.

Parallel's ratings could be downgraded if the company's liquidity
were to tighten further or if the company has to reduce capital
expenditures to levels resulting in significant sequential
production declines that indicate a continued erosion of the
proved reserve base.  The outlook could be returned to stable if
the company is able to improve its liquidity and demonstrate a
track record of replacing reserves at competitive costs while
reducing leverage relative to its reserve base and production
levels.

The last rating action was on July 19, 2007 when Moody's assigned
Parallel's B3 CFR and the Caa1 rating to its senior unsecured
notes.

Parallel Petroleum Corporation is a small independent exploration
and production company based in Midland, Texas.


PILGRIM'S PRIDE: To Reorganize and Emerge By Fall, CRO Says
-----------------------------------------------------------
During the Section 341 meeting of Pilgrim's Pride Corporation and
its affiliates held on January 30, 2009, William K. Snyder, PPC's
chief restructuring officer, said "the Debtors will reorganize,
absolutely," The Canadian Press reported.

Mr. Snyder also predicted that the Debtors will emerge from
bankruptcy by fall this year, the news agency added.  "This whole
industry's in the ditch, so this company's going to have to try
to recoup for the next nine months."

During the meeting, lawyers for farmers, school districts,
personal injury victims due to crashes with PPC's trucks, and
other groups of creditors convened to ask PPC, the largest U.S.
chicken producer, when they'll get their money.

Some of the creditors asked how many PPC processing plants will
close.  My. Snyder, the Canadian Press related, said the company
is considering closing or cutting back operations at three to
five plants but has not decided which.

Mr. Snyder added that PPC has paid vendors in the ordinary course
and that the company plans to try to borrow money to pay property
taxes.  However, Mr. Snyder said personal injury claims pending
against PPC will not be addressed in the bankruptcy court.

                Interim President Steps Down

On January 28, 2009, Lonnie Ken Pilgrim resigned as interim
president and chairman of the board of directors of Pilgrim's
Pride Corporation, the company discloses with the U.S. Securities
and Exchange Commission.

Mr. Pilgrim will continue to serve as a member of the Company's
Board of Directors.  Lonnie "Bo" Pilgrim will continue to serve
as the Senior Chairman of the Board.

                 About Pilgrim's Pride Corp.

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: U.S. Trustee Balks at Bid to Hire Ex-Officers
--------------------------------------------------------------
William T. Neary, U.S. Trustee for Region 6, asks Judge D. Michael
Lynn of the U.S. Bankruptcy Court for the Northern District of
Texas to deny approval of the consulting agreements Pilgrim's
Pride Corp. entered into with each of former chief executive
officer Clint Rivers and former chief operating officer Robert
Wright.  The U.S. Trustee argues that the proposed consulting
agreements, which the Debtors sought to be approved pursuant to
Section 503(c)(3) of the Bankruptcy Code, are key employee
retention agreements and should be governed by Section 503(c)(1).

As reported by the Troubled Company Reporter on January 13, 2009,
J. Clinton Rivers and Robert A. Wright resigned as Pilgrim's Pride
Corporation's chief executive officer and president, and chief
operating officer.  Because of the executives' extensive
familiarity with the Debtors' business, the Debtors have
requested, and the executives have agreed, to continue to provide
short-term advisory and consulting services to the Debtors.  The
Debtors believe that the consulting services to be provided by Mr.
Rivers will be invaluable and will assist them in transitioning
the duties and responsibilities of president and CEO to Don
Jackson.  The Debtors entered into separate consulting agreements
with each of Messrs. Rivers and Wright.  The Debtors intend to
employ Mr. Rivers for four months and Mr. Wright for three months.
Their employment will begin on the date the agreements are
approved.

Messrs. Rivers and Wright will render advisory services based on
their expertise and knowledge of PPC's business, which will be
consistent with the services they provided while they were
actively employed by PPC.  The services to be provided will be in
addition to those to be provided under each of their separation
agreements.  Mr. Rivers will receive from PPC $83,500 for each
Contract Month while Mr. Wright will receive $50,000 for each
Contract Month.  Both executives will also be reimbursed for
reasonable out-of-pocket expenses they incur in connection with
their consulting services.

According to Mr. Neary, the proposed consulting agreements and
severance agreements with the former PPC executives should not be
approved because:

  (i) viewed as a whole, the consulting agreements and severance
      agreements are employee retention payments but the Debtors
      have no evidence establishing the three-prong evidentiary
      requirements of Section 503(c)(1);

(ii) if the Court determines that Section 503(c)(3) governs the
      consulting agreements, they should be denied approval
      because (x) they are outside the ordinary course of
      business and (y) they are not justified by the facts and
      circumstances of the Debtors' bankruptcy cases; and

(iii) in its analysis, the Court should also consider severance
      payments Rivers and Wright will receive in connection with
      their resignations.  These severance payments are
      governed by Section 503(c)(2) of the Bankruptcy Code,
      which requires the Debtors to demonstrate that the
      payments are part of a program applicable to all full-time
      employees and are not greater than ten times the amount of
      the mean severance pay given to non-management employees
      during the calendar year in which payment is made.

The proposed payments to Messrs. Rivers and Wright create an
incentive to remain with the Debtors, Mr. Neary avers.  The
payments are designed to induce the former executives to stay for
several months performing the exact duties that they performed
before they resigned, Mr. Neary adds.

The Debtors' proposed consulting and severance agreements do not
create incentives for defined improvements, the U.S. Trustee
argues.  They are "pay to stay" provisions, he asserts.

The U.S. Trustee tells the Court that the Debtors need to
establish that:

  * the payments is essential to the retention of the person
    because the individual has a bona fide job offer from
    another business at the same or greater rate of
    compensation;

  * the services provided by the person are essential to the
    survival of the business.

                 About Pilgrim's Pride Corp.

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: Parties Object to Bid to Reject 102 Contracts
--------------------------------------------------------------
Corporate Waste Alternatives, Inc.; several chicken growers in
Live Oak, Florida; Two by Two Poultry; and Stonewall Farm object
to the request of Pilgrim's Pride Corporation and its affiliates
to reject several contracts and leases.

(a) CWA

CWA asks Judge D. Michael Lynn of the U.S. Bankruptcy Court for
the Northern District of Texas to deny the Debtors' motion with
respect to the prepetition solid waste cost reduction consulting
agreements it entered into with Pilgrim's Pride Corporation.

Representing CWA, James G. Curenton, Jr., Esq., in Fairhope,
Alabama, argues that the Debtors' assertion that they will incur
administrative costs if they do not reject the CWA Agreement is
factually incorrect.  Mr. Curenton tells the Bankruptcy Court
that PPC is greatly benefiting from CWA's performance under the
contracts.

Mr. Curenton adds that at the Petition Date, a civil action filed
by CWA against the Debtors in the U.S. District Court for the
Southern District of Alabama.  In the civil action, CWA seeks to
recover $208,782 plus interest in damages for breach of contract
and unjust enrichment.

"PPC is not entitled to reject the contracts with CWA and that
the stay should be lifted to allow CWA to proceed with the
prosecution of the pending civil action to establish the amount
of its claim against PPC," Mr. Curenton asserts.

In a separate filing, CWA asks the Bankruptcy Court to lift the
automatic stay to allow CWA to pursue the civil action pending in
the Alabama District Court.

Mr. Curenton says the continuation of the civil action will not
hinder, burden, delay or be inconsistent with the Debtors'
bankruptcy proceedings, but rather will establish the amount owed
to CWA for services rendered.

(b) Live Oak Chicken Growers

R & C Farm; Moises Rodriguez; Loyce Roberts; Cullinane Farms LLC;
Abel T Farm; David Hines; James Fountain; Trinder Farms LLC; and
Maybuck Farms, Inc. -- the "Live Oak Chicken Growers" -- ask the
Bankruptcy Court to deny the Debtors' motion so that discovery
can be conducted so the Live Oak Chicken Growers can supplement
their objection.

The Growers tell the Bankruptcy Court that they are anticipating
the Debtors to file additional motions to reject the Live Oak
Chicken Growers' contracts.  The Growers say the Debtors have
recently informed them that their contracts are also being
terminated.  The Growers add that the Debtors have indicated that
despite the pendency of the rejection motion, the Debtors are not
currently providing any flocks to the Live Oak Chicken Growers.

The Debtors' selection of the Live Oak Chicken Growers for
rejection may violate the Packers and Stockyards Act, the Growers
contend.

The Growers, in a separate filing, has asked the Bankruptcy Court
for an expedited hearing on the Motion.  The Growers also ask
that the limited discovery they seek be answered by February 5,
2009, and a brief deposition of a PPC representative be scheduled
to occur no later than February 20.

(c) Stone Wall Farm and Two by Two Poultry

In separate letters to the Bankruptcy Court, Two by Two Poultry
and Stonewall Farm say they are not in favor of the Debtors'
proposal to reject the grower contracts because of the serious
financial hardships the rejection will bring to the poultry
operators.  Stonewall asks the Court to deny the motion.  Two by
Two asks the Court to consider some type of compensation if their
contracts are terminated.

(d) Marion Bartolotti

Ms. Bartolotti, a PPC independent contract grower for the
Debtors' facility in Live Oak, Florida, informs the Bankruptcy
Court that she and her husband, have been in the contract growing
business for 29 years.  She asserts that the Growers should be
compensated for the financial difficulty that they are now
facing.  The poultry business is the main source of their income.

The Bankruptcy Court heard arguments on the Debtors' Motion on
January 21, 2009.  Results from that hearing regarding the Motion
are not yet available to the public.

                    PPC to Assign Duluth Lease

Separately, the Debtors to assume a lease agreement for the
property located at Northmont Business Center, 1965 Evergreen
Parkway, Suite 100, in Duluth, Georgia.  The Debtors also seek to
assign the Lease to ConAgra Poultry Company.

ConAgra and ARI Northmont Business Center, LLC, as the landlord,
entered into the lease agreement on February 1, 2003.  The Lease
is for a 124-month term.  The Debtors' January 2009 rent for the
property is $75,000.  The Debtors' obligations under the Lease
are guaranteed by ConAgra.

The Debtors primarily use the Duluth Property for office space,
research and development, test kitchen, warehousing and
manufacturing of merchandise.  The Debtors have determined that
they no longer have any need for an administrative office in
Duluth.  The Debtors believe that they are in any default under
the Lease because ConAgra has paid the January 2009 Rent and
ConAgra has also agreed to pay the February 2009 Rent.

Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, in
Dallas, Texas, tells the Court that the assumption and assignment
of the Lease to ConAgra would benefit the Debtors' estates by
relieving the Debtors of onerous rental obligations under the
Lease in light of the fact that the Debtors no longer have use
for the property.  The assignment of the Lease also would enable
the Debtors to avoid any rejection damages claim that might have
resulted from rejection of the Lease, a claim that would diminish
recoveries to the estates' stakeholders.

                 About Pilgrim's Pride Corp.

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: Dispute Arises on Panel's Bid to Hire Moelis
-------------------------------------------------------------
Pursuant to Section 328(a) of the Bankruptcy Code and Rule 2014 of
the Federal Rules of Bankruptcy Procedure, the Official Committee
of Unsecured Creditors in Pilgrim's Pride Corp.'s cases seeks
authority from Judge D. Michael Lynn of the U.S. Bankruptcy Court
for the Northern District of Texas to retain Moelis & Company LLC
as its financial advisor and investment banker, nunc pro tunc to
December 10, 2008.

Representing the Committee, Jason S. Brookner, Esq., at Andrews
Kurth LLP, in Dallas, Texas, informs the Court that the Committee
conducted interviews with several financial advisory firms, and
received expressions of interest from several others.
Ultimately, the Committee selected Moelis because of its
excellent qualifications and its favorable fee structure.

As financial advisors and investment bankers, Moelis will:

  (a) undertake a comprehensive business and financial analysis
      of the Debtors;

  (b) to the extent necessary, appropriate and feasible, review
      and analyze the Debtors' assets and their operating and
      financial strategies;

  (c) review and analyze the business plans and financial
      projections prepared by the Debtors including, but not
      limited to, testing assumptions and comparing those
      assumptions to historical and industry trends;

  (d) evaluate the Debtors' debt capacity and assist in the
      determination of an appropriate capital structure for the
      Debtors;

  (e) identify, initiate, review, negotiate, and evaluate any
      Restructuring, and, if directed, develop and evaluate
      alternative proposals for a Restructuring;

  (f) solicit and evaluate indications of interest and proposals
      regarding any Restructuring from current or potential
      lenders, equity investors, acquirers or strategic
      partners;

  (g) assist the Committee in developing strategies to
      effectuate any Restructuring, including financing
      alternatives;

  (h) advise and assist the Committee in the course of its
      negotiation of any Restructuring, and participate in these
      negotiations as requested;

  (i) determine and evaluate the risks and benefits of
      considering, initiating and consummating any
      Restructuring;

  (j) assist the Committee in the development, preparation and
      distribution of selected information, documents and other
      materials to create interest in and to consummate any
      Restructuring;

  (k) assist the Committee in valuing the Debtors' assets or
      business, provided that any real estate or fixed asset
      appraisals will be undertaken by outside appraisers,
      separately retained and compensated from the Debtors?
      bankruptcy estates;

  (l) be available to meet with the Committee, the Debtors'
      management, the Debtors' board of directors, creditor
      groups, equity holders or other parties to discuss any
      Restructuring; and

  (m) participate in hearings before the Court and provide
      relevant testimony.

For its services, Moelis will be compensated:

  (i) a monthly fee of $200,000 for the first six months of the
      engagement and $175,000 per month thereafter; and

(ii) upon consummation of a Restructuring in the amount of
      $1,500,000, subject to a potential increase at the
      Committee's and the Court's discretion based on
      performance.

Moelis will be paid the Monthly Fee during the term of its
engagement.  One-half of the aggregate Monthly Fees actually paid
by the Debtors commencing with the 13th Monthly Fee will be
deducted from the Restructuring Fee otherwise payable to Moelis.
Moelis reserves the right to seek further compensation after
confirmation of a plan of reorganization, based on, among other
things, recoveries to the unsecured creditors and timing of the
Debtors' Chapter 11 cases.

Moelis will be reimbursed on a monthly basis for reasonable out-
of-pocket expenses incurred in connection with its activities
under its engagement.  The Engagement Letter also provides that
the Debtors will indemnify and hold harmless Moelis and its
affiliates from any losses and claims the firm incurs while
providing services to the Committee.

Robert Flachs, a member at Moelis & Company, LLC, assures the
Court that his firm is a "disinterested person" as the term is
defined in Section 101(14), and does not hold any interest
adverse to the Committee, the Debtors and their estates.

Mr. Flachs, however, discloses that Moelis previously rendered
services to Deloitte LLP, Ernst & Young, and AIG and certain of
its affiliates in matters unrelated to the Debtors and their
bankruptcy cases.

                    Bank of Montreal Objects

The Bank of Montreal, as DIP Lender and Agent for the Prepetition
BMO Lenders, opposes to the proposed retention of Moelis unless
the order approving the Moelis application provides that the
retention and compensation of Moelis will be pursuant to the
provisions of Section 330 and subject to a review by the Court
for reasonableness under the criteria set forth under Section
330.

BMO complains that the Committee prematurely seeks approval of a
success fee, in this case masquerading as a "restructuring fee,"
for its advisors regardless of the results obtained the Debtors'
Chapter 11 cases.  BMO argues that the Court should reserve on
the appropriateness of any restructuring fee until the efforts of
Moelis can be evaluated based on the outcome of the bankruptcy
cases.

BMO also complains that it is unclear from the application how
Moelis will increase creditor recovery so that a $1.5 million
"success fee" is warranted.  The Committee, BMO points out, notes
that the Moelis Restructuring Fee "is not based on or determined
by any specific asset sales or other transactions" because Moelis
might not be involved in any sale.  BMO further complains that
Moelis seeks a broad indemnification from the Debtors.

                      Committee Talks Back

The Creditors' Committee argues that BMO's opposition to the
Moelis retention application is incorrect and evidences a
misreading of the Committee's application in its entirety.

BMO's objection erroneously asserts that Moelis' indemnification
language may allow Moelis to be indemnified for acts of willful
misconduct, Mr. Brookner stresses.

Mr. Brookner tells the Court that before BMO filed its objection,
BMO was made aware through information that Moelis would abide by
and be subject to the Court's ruling with respect to the
employment of Lazard Freres & Co., the Debtors' financial
advisor.  Despite the express conversations, BMO filed its
objection for reasons which are unclear, Mr. Brookner points out.

The application clearly states that the indemnity does not apply
to losses "that are finally determined by a court or tribunal of
competent jurisdiction to have resulted primarily from the bad
faith, willful misconduct or gross negligence," Mr. Brookner
points out.  The application also clearly states that Moelis may
not settle any suit without the approval of the Debtors or the
Committee, as appropriate.

According to Mr. Brookner, prior to conferring with BMO, the
Committee counsel communicated the information to the Office of
the United States Trustee and counsel to the Debtors.  He says
that neither the Debtors nor the U.S. Trustee felt the need to
object to the Moelis Application in light of these discussions.

                 About Pilgrim's Pride Corp.

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)


PUGET ENERGY: Moody's Cuts Issuer Rating to 'Ba2' from 'Ba1'
------------------------------------------------------------
Moody's Investors Service downgraded the Issuer Rating of Puget
Energy, Inc. to Ba2 from Ba1.  Moody's also affirmed the long term
ratings of its regulated utility subsidiary, Puget Sound Energy,
Inc. (PSE; Baa2 senior secured), and the utility's affiliated
entity, Puget Sound Energy Capital Trust III (shelf for Trust
Preferred Securities (P)Ba1).  In addition, Moody's downgraded
PSE's short-term rating for commercial paper to Prime-3 from
Prime-2.  Concurrent with these rating actions, Moody's assigned
Baa3 ratings to PSE's three new committed five-year senior
unsecured bank revolvers aggregating $1.150 billion and Ba2
ratings to a committed $1.225 billion senior unsecured five-year
term loan and a committed $1.0 billion senior unsecured five-year
capital expenditure bank facility arranged by Puget Merger Sub,
Inc.  The rating outlook for all the companies is stable.

The rating actions take into account the impending completion of
the purchase of 100% of the common stock of Puget Energy, Inc., by
a consortium of infrastructure private equity investors led by
Macquarie Infrastructure Partners.  Following the recent receipt
of the final required regulatory approval for the transaction from
the Washington Utilities Transportation Commission, closing of the
transaction is expected by February 6, 2009.  Upon closing, Puget
Merger Sub, Inc., will merge with and into Puget Energy, Inc.,
leaving Puget Energy as the surviving entity and obligor for the
amounts drawn under the term loan and capital expenditure facility
at the close of the transaction.

"The rating downgrade for Puget Energy reflects Moody's concerns
about the significant increase in financial risk at the holding
company level as over $1.0 billion of standalone holding company
debt is being introduced into the capital structure" said Moody's
Vice President and Senior Analyst, Kevin Rose.  "In affirming
PSE's long-term ratings, while downgrading Puget Energy, a wider
notching of ratings between PSE and its parent is established,
reflecting initial debt reduction at the utility as the
transaction closes and ring-fencing mechanisms that afford
additional credit protection for the utility to the potential
detriment of Puget Energy's credit quality", Rose added.

The downgrade of PSE's short-term rating for commercial paper
reflects Moody's concerns about the demands for capital as PSE
faces high multi-year spending needs.  Although PSE will benefit
from access to its own bank revolvers to supplement internally
generated cash flow plus indirect access to the $1.0 billion
committed capital expenditure facility at the parent level, its
liquidity could be stretched if any unexpected challenges,
including potential cost overruns arise.  The three new PSE
facilities will replace prior arrangements effective at closing,
including a new $400 million liquidity facility available for
commercial paper backstop.  The quality of the alternate liquidity
provided by the new revolvers also benefits from not having any
ongoing material adverse change clause or any onerous financial
covenant requirements.  Importantly, Moody's expect that PSE
should maintain adequate headroom against the covenants given
expected financial performance and there are no rating triggers in
the bank facilities that might cause acceleration or puts of
obligations; however, they do contain rating sensitive pricing.

The use of proceeds from the financing of this transaction will
include initial debt reduction for the utility, thereby improving
PSE's capital structure in anticipation of the planned substantial
multi-year capital program and prospectively should on average
support cash flow from operations before the effects of changes in
working capital (CFO Pre W/C) to interest and debt metrics in
excess of 4x and 20%, respectively.  Financial performance that
delivers on these expectations, which assume continued support
from the WUTC for frequent rate increases over the next several
years, could suggest a higher rating is warranted for PSE;
however, PSE's rating is constrained due to the increased
financial risk at the holding company, even after considering the
protection provided by the institution of ring fence like
mechanisms.

The significant first time layer of standalone parent company debt
being introduced is expected to weaken Puget Energy's consolidated
metrics, including CFO Pre W/C to interest and debt on average in
the low-to-mid 3x range and the low teens, respectively.  At these
levels, the Ba2 rating more appropriately reflects the structural
subordination of payments on Puget Energy's obligations to those
of PSE, even as Moody's expect PSE to maintain flexibility under
covenants requiring a minimum equity component in its capital
structure and limiting distributions to its parent under certain
circumstances.

Rating downgraded for Puget Energy, Inc. includes:

  -- Issuer Rating to Ba2 from Ba1

Ratings assigned for Puget Merger Sub, Inc. include:

  -- $1.225 billion committed five-year term loan at Ba2

  -- $1.0 billion committed five year capital expenditure
     facility at Ba2

Ratings affirmed for Puget Sound Energy, Inc. include:

  -- Baa2 senior secured debt;
  -- Baa3 senior unsecured bank facility and Issuer Rating
  -- Ba2 preferred stock
  -- (P)Baa2 shelf registration for senior secured debt
  -- (P)Baa3 shelf registration for senior unsecured debt
  -- (P)Ba2 shelf registration for preferred stock

Rating affirmed for Puget Sound Energy Capital Trust III includes:

  -- (P)Ba1 shelf registration for Trust Preferred Securities

Ratings assigned for Puget Sound Energy, Inc. include:

  -- $400 million senior unsecured liquidity revolver at Baa3

  -- $400 million senior unsecured capital expenditure revolver
     at Baa3

  -- $350 million senior unsecured energy hedging revolver at
     Baa3

Rating downgraded for Puget Sound Energy, Inc. includes:

  -- Short-term rating for commercial paper to Prime-3 from
     Prime-2

Moody's last rating action was on October 29, 2007 when the Issuer
Rating of Puget Energy, Inc., was placed under review for possible
downgrade; the long-term ratings of Puget Sound Energy, Inc. were
affirmed, while the rating outlook was changed to stable from
positive; and Puget Sound Energy's short-term rating for
commercial paper was placed under review for possible downgrade.

Puget Sound Energy, Inc. is a combination electric and natural gas
utility subsidiary of Puget Energy, Inc., a holding company.  Both
companies are headquartered in Bellevue, Washington.


QIMONDA AG: May Shut Down Business if No Investor Found
-------------------------------------------------------
Qimonda AG will shut at the end of March unless an investor is
found, Bloomberg News reports citing a spokesman for preliminary
insolvency lawyer Michael Jaffe.

The company is having its first contact with potential investors
and will close by the end of March if an investor isn't found,
Jaffe's spokesman, who declined to be named, told Bloomberg News
in a telephone interview from Munich.

As reported in the Troubled Company Reporter, Qimonda filed an
application with the local court in Munich, Germany, on
January 23, 2009, to open insolvency proceedings.  Their goal is
to reorganize the companies as part of the ongoing restructuring
program.

According to Bloomberg News, Qimonda filed for insolvency after a
plan announced in December for a loan of EUR325 million
(US$418 million) from the German state of Saxony, Infineon
Technologies AG, Europe's second-largest maker of semiconductors,
and an unidentified Portuguese bank wasn't completed in time.

Qimonda AG (NYSE: QI) -- http://www.qimonda.com/-- is a leading
global memory supplier with a diversified DRAM product portfolio.
The company generated net sales of EUR1.79 billion in financial
year 2008 and had -- prior to its announcement of a repositioning
of its business --  approximately 12,200 employees worldwide, of
which 1,400 were in Munich, 3,200 in Dresden and 2,800 in Richmond
(Virginia, USA).  The company provides DRAM products with a focus
on infrastructure and graphics applications, using its power
saving technologies and designs.  Qimonda is an active innovator
and brings high performance, low power consumption and small chip
sizes to the market based on its breakthrough Buried Wordline
technology.


REFCO INC: Court Extends Claims Objection Deadline to June 5
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extended until June 5, 2009, the deadline by which RJM, LLC, the
plan administrator to reorganized Refco, Inc. and its affiliates,
and Marc S. Kirschner, the plan administrator to Refco Capital
Markets, Ltd., may file objections to administrative expense claim
payment requests and prepetition claims in the Debtors' cases.

The current Claims Objection Deadline expired on January 5, 2009.

According to Steven Wilamowsky, Esq., at Bingham McCutchen, LLP,
in New York, more than 14,700 filed claims and 8,300 unfiled
claims have been addressed by the Court since the Petition Date.
The Plan Administrators related they recently identified 70 more
claims subject to objections and 25 claims for additional claims
resolution.

Of the approximately 23,000 claims in these Chapter 11 cases,
roughly 225 of the claims were asserted as administrative claims
against Refco Capital Markets, Ltd., or the Reorganized Debtors.
The Plan Administrators noted that three administrative claims
have not yet been fully resolved.  Two administrative claims
remain outstanding pending resolution or actions and issues
related to insurance claims, and one administrative claim is
currently the subject of pending settlement negotiations.

The Claim Objection Deadline extension is appropriate to complete
the claims reconciliation process and will ensure that all non-
meritorious claims are properly challenged, Mr. Wilamowsky
maintained.

Headquartered in New York, Refco Inc. -- http://www.refco.com/
-- is a diversified financial services organization with
operations in 14 countries and an extensive global institutional
and retail client base.  Refco's worldwide subsidiaries are
members of principal U.S. and international exchanges, and are
among the most active members of futures exchanges in Chicago,
New York, London and Singapore.  In addition to its futures
brokerage activities, Refco is a major broker of cash market
products, including foreign exchange, foreign exchange options,
government securities, domestic and international equities,
emerging market debt, and OTC financial and commodity products.
Refco is one of the largest global clearing firms for
derivatives.  The company has operations in Bermuda.

The company and 23 of its affiliates filed for Chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.
Milbank, Tweed, Hadley & McCloy LLP, represents the Official
Committee of Unsecured Creditors.  Refco reported US$16.5 billion
in assets and US$16.8 billion in debts to the Bankruptcy Court on
the first day of its Chapter 11 cases.

The Court confirmed the Modified Joint Chapter 11 Plan of
Refco Inc. and certain of its Direct and Indirect Subsidiaries,
including Refco Capital Markets, Ltd., and Refco F/X Associates,
LLC, on Dec. 15, 2006.  That Plan became effective on Dec. 26,
2006.

Pursuant to the plan, RJM, LLC, was named plan administrator to
reorganized Refco, Inc. and its affiliates, and Marc S. Kirschner
as plan administrator to Refco Capital Markets, Ltd.  (Refco
Bankruptcy News; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


REFCO INC: RCM Trustee Pays $31MM for Securities Customer Claims
----------------------------------------------------------------
Marc S. Kirschner as plan administrator to Refco Capital Markets,
Ltd. notified the U.S. Bankruptcy Court for the Southern District
of New York that he distributed $31,000,000 in the aggregate on
December 31, 2008, to holders of Allowed Class RCM Securities
Customer Claims.

Allowed Class RCM Securities Customer Claims aggregate
approximately $2,835,617,507.

The RCM Plan Administrator has established two special reserves,
(1) the Capped Claims Special Reserve and (2) the 502(h) Special
Reserve, which are being withheld from the current distribution
pending resolution of certain disputes.

A dispute has been raised by the holders of RCM Securities
Customer Claims and RCM FX/Unsecured Claims regarding the
allocation of Additional Property distributions that otherwise
would be made to the Capped Claim Holders.  The Capped Claim
Holders have received aggregate distributions equal to 100% of
their Allowed RCM Securities Customer Claims, from a combination
of their RCM Securities Customer Claims and their guarantee
claims against the Contributing Debtors.  Subsequently, the RCM
Plan Administrator has reallocated distributions over the 100%
cap to other holders of Allowed Securities Customer Claims,
pursuant to his understanding of the terms of the Plan and the
Confirmation Order.

The RCM Plan Administrator has been advised that the holders of
RCM Securities Customer Claims and FX/Unsecured Claims believe
that the Additional Property should be distributed among both
holders of other Allowed RCM Securities Claims as a class, and
holders of Allowed FX/Unsecured Claims as a class.

Accordingly, $4,000,000 is placed into the Capped Claims Special
Reserve for the disputed allocations.  The RCM Plan Administrator
informs that it aims to distribute the Capped Claims Special
Reserve no later than March 31, 2009.

In addition, the RCM Plan Administrator recently settled a
preference litigation against two holders of RCM FX/Unsecured
Claims, who paid RCM $12,900,000 and $17,500,000.  Each
Claimholder received a Section 502(h) claim in the same amount
that was paid to RCM.  Those payments constitute Additional
Property, and comprise a major portion of the amounts to be
distributed in the Sixth Additional Property Distribution.  Under
a certain RCM Settlement Agreement, Additional Property must be
reallocated to adjust for the increase in the RCM FX/Unsecured
Claims pool resulting from the Section 502(h) claims.

As of December 19, 2008, no agreement or resolution has been
reached with respect to the reallocation.  Pending resolution of
the issue, the RCM Plan Administrator has created the 502(h)
Special Reserve out of Additional Property to hold in reserve
$3,000,000.

A complete list of the Allowed Class RCM Securities Customer
Claims can be accessed at no charge at:

    http://bankrupt.com/misc/Refco6thAddlPropClaims.pdf

Headquartered in New York, Refco Inc. -- http://www.refco.com/
-- is a diversified financial services organization with
operations in 14 countries and an extensive global institutional
and retail client base.  Refco's worldwide subsidiaries are
members of principal U.S. and international exchanges, and are
among the most active members of futures exchanges in Chicago,
New York, London and Singapore.  In addition to its futures
brokerage activities, Refco is a major broker of cash market
products, including foreign exchange, foreign exchange options,
government securities, domestic and international equities,
emerging market debt, and OTC financial and commodity products.
Refco is one of the largest global clearing firms for
derivatives.  The company has operations in Bermuda.

The company and 23 of its affiliates filed for Chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.
Milbank, Tweed, Hadley & McCloy LLP, represents the Official
Committee of Unsecured Creditors.  Refco reported US$16.5 billion
in assets and US$16.8 billion in debts to the Bankruptcy Court on
the first day of its Chapter 11 cases.

The Court confirmed the Modified Joint Chapter 11 Plan of
Refco Inc. and certain of its Direct and Indirect Subsidiaries,
including Refco Capital Markets, Ltd., and Refco F/X Associates,
LLC, on Dec. 15, 2006.  That Plan became effective on Dec. 26,
2006.

Pursuant to the plan, RJM, LLC, was named plan administrator to
reorganized Refco, Inc. and its affiliates, and Marc S. Kirschner
as plan administrator to Refco Capital Markets, Ltd.  (Refco
Bankruptcy News; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


REFCO INC: Protocol Set on Use of Classified Docs in Class Action
-----------------------------------------------------------------
Albert Togut, in his capacity as Chapter 7 Trustee for the estates
of Refco, LLC, and Refco Trading Services, LLC; Marc S. Kirschner,
as the litigation trustee of the Refco Litigation Trust; Thomas H.
Lee Partners, L.P.; Credit Suisse Securities (USA) LLC; Banc of
America Securities LLC; Deutsche Bank Securities Inc.; JPMorgan
Chase & Co.; Mayer Brown LLP; PricewaterhouseCoopers LLP; and
Grant Thornton LLP ask the U.S. Bankruptcy Court for the Southern
District of New York to approve a stipulation governing the
production of documents, including customer information and
personal information, for the Refco Investor Class Action, Case
No. 05-8626, pending before the U.S. District Court for the
Southern District of New York.

The Chapter 7 Trustee represents that Thomas Lee, the Bank
Defendants, Mayer Brown, PwC, and Grant Thornton have sought the
production of approximately 379 boxes of documents belonging to
Refco Inc. and its debtor-affiliates.  Those documents contain
information on former customers of Refco LLC, including customer
names, LLC account numbers, and wire transfer information with
bank account numbers, according to the Chapter 7 Trustee.  The
documents also indicate personal information of former Refco LLC
employees, including their home addresses, credit card numbers,
and passport information.

The parties stipulate that:

  1. All requested documents produced will be designated and
     treated as "Confidential" pursuant to the Amended
     Stipulation and Agreed Confidentiality Order, entered by
     Judge Gerard E. Lynch on February 8, 2008, in the U.S.
     District Court for the Southern District of New York.

  2. Prior to the production of any Requested Documents:

     (a)  counsel for the requesting parties will inspect the
          documents in hard copy form, on an "attorneys' eyes
          only" basis, under the supervision of the counsel for
          the Refco Litigation Trustee;

     (b)  the requesting parties will identify to the Refco
          Litigation Trustee the documents to be included;

     (c) the Refco Litigation Trustee will allow the Chapter 7
         Trustee opportunity to redact information contained
         in the identified documents; and

  3. The Refco Litigation Trustee will promptly notify the
     Chapter 7 Trustee on any document containing customer
     or personal information, to permit the Chapter 7 Trustee
     to take necessary action to safeguard that information.

Headquartered in New York, Refco Inc. -- http://www.refco.com/
-- is a diversified financial services organization with
operations in 14 countries and an extensive global institutional
and retail client base.  Refco's worldwide subsidiaries are
members of principal U.S. and international exchanges, and are
among the most active members of futures exchanges in Chicago,
New York, London and Singapore.  In addition to its futures
brokerage activities, Refco is a major broker of cash market
products, including foreign exchange, foreign exchange options,
government securities, domestic and international equities,
emerging market debt, and OTC financial and commodity products.
Refco is one of the largest global clearing firms for
derivatives.  The company has operations in Bermuda.

The company and 23 of its affiliates filed for Chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.
Milbank, Tweed, Hadley & McCloy LLP, represents the Official
Committee of Unsecured Creditors.  Refco reported US$16.5 billion
in assets and US$16.8 billion in debts to the Bankruptcy Court on
the first day of its Chapter 11 cases.

The Court confirmed the Modified Joint Chapter 11 Plan of
Refco Inc. and certain of its Direct and Indirect Subsidiaries,
including Refco Capital Markets, Ltd., and Refco F/X Associates,
LLC, on Dec. 15, 2006.  That Plan became effective on Dec. 26,
2006.

Pursuant to the plan, RJM, LLC, was named plan administrator to
reorganized Refco, Inc. and its affiliates, and Marc S. Kirschner
as plan administrator to Refco Capital Markets, Ltd.  (Refco
Bankruptcy News; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


RETAIL PRO: To Seek Approval of Sale of All Assets on March 11
--------------------------------------------------------------
Retail Pro Inc., will appear before the U.S. Bankruptcy Court for
the District of Delaware at a hearing on March 11 hearing to seek
approval of the sale of substantially all its assets.

Retail Pro and its affiliates submitted to the Court proposed
bidding procedures, which contemplate a March 10, 2009 auction of
their assets.

The Debtors have named a group by Laurus Master Fund Ltd., Valens
Offshore SPV II Corp., and Midsummer Investments Ltd. as the
stalk-horse bidder for their assets.  These bidders are also the
Debtors' postpetition lenders.  In addition, Laurus Master owns
5.1% and Midsummer owns 5.2% of the common stock of the Debtors.

The stalking horse bidder will be paid $400,000 if the Debtor
consummates the sale to another party.  If the stalking-horse
bidder is not the winning bidder and the cash payoff is less than
the purchase price, the Debtors may retain proceeds in an amount
equal to cure amount plus (i) $200,000 and (ii) the aggregate
amount of fees.

The Debtors have set a March 4, 2009, deadline for interested
purchasers to submit competing offers for their assets.

Bloomberg's Bill Rochelle notes that Laurus and Midsummer are also
providing a $1.3 million loan to maintain the company pending the
sale.  The order approving the financing, sign an order approving
the sale of Retail Pro by March 12.

                         About Retail Pro

Based in La Jolla, California, Retail Pro Inc. --
http://www.retailpro.com-- operates a chain of retail stores.
The company and three of its affiliates filed for Chapter 11
protection on Jan. 10, 2009 (Bankr. D. Del. Lead Case No.
09-10087).  Bruce Grohsgal, Esq., and Laura Davis Jones, Esq., at
Pachulski, Stang, Ziehl Young & Jones, represent the Debtors in
their restructuring efforts.  The Debtor proposed View Partners
Capital LLC as their investment banker and Kurtzman Carson
Consultants LLC as their notice, claims and solicitation agent.
As of Nov. 30, 2008, the Debtors have $24,652,353 in total assets
and $28,867,462 in total debts.


RIVIERA HOLDINGS: FXRE, Et. Al., Disclose 9.14% Equity Stake
------------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission, 15 related entities disclosed that they may be deemed
to beneficially own Riviera Holdings Corporation's shares of
common stock, par value $.001 per share:
                                       Shares
                                       Beneficially
   Company                             Owned         Percentage
   -------                             ------------  ----------
Flag Luxury Riv, LLC                      723,933        5.79%
RH1, LLC                                  418,294        3.35%
FX Luxury, LLC                            418,294        3.35%
FX Real Estate and Entertainment Inc.   1,142,227        9.14%
Robert F.X. Sillerman                   1,142,227        9.14%
Paul C. Kanavos                         1,142,227        9.14%
Brett Torino                            1,142,227        9.14%
Barry A. Shier                          1,142,227        9.14%
Robert Sudack                           1,142,227        9.14%
Mitchell J. Nelson                      1,142,227        9.14%
David M. Ledy                           1,142,227        9.14%
Harvey Silverman                        1,142,227        9.14%
Bryan E. Bloom                          1,142,227        9.14%
Michael J. Meyer                        1,142,227        9.14%
John D. Miller                          1,142,227        9.14%

As of Nov. 4, 2008, there were 12,498,555 shares of common stock,
$.001 par value per share, outstanding.

On Jan. 21, 2009, RH1 provided notice to the Trustee of its
intent to terminate the Trust Agreement.  Pursuant to the Trust
Agreement, the trust terminates 15 days from the date notice of
intent to terminate the trust is given.

As a result, RH1 may be deemed the beneficial owner of the 161,758
shares of Common Stock previously held in trust by the Trustee.

On Jan. 23, 2009, FXL transferred 100% of the membership
interests in FLR to FXRE.

As of Jan. 23, 2009:

   -- FLR may be deemed the direct beneficial owner of 723,933
      shares of Common Stock, which represent approximately 5.79%
      of the outstanding shares of Common Stock as of Nov. 4,
      2008.

   -- RH1 may be deemed the direct beneficial owner of 418,294
      shares of Common Stock, which represent approximately 3.35%
      of the outstanding shares of Common Stock as of Nov. 4,
      2008.

   -- FXL, as a member of RH1 with a 100% equity interest in RH1,
      may be deemed the indirect beneficial owner of 418,294
      shares of Common Stock, which represent approximately 3.35%
      of the outstanding shares of Common Stock as of Nov. 4,
      2008.

   -- FXRE, as the managing member of FXL holding 100% of the
      common membership interests in FXL, and as a member of FLR
      with a 100% equity interest in FLR, may be deemed the
      indirect beneficial owner of 1,142,227 shares of Common
      Stock, which represents approximately 9.14% of the
      outstanding shares of Common Stock as of Nov. 4, 2008.

   -- Robert F.X. Sillerman, as chairman and CEO of FXRE, may
      also be deemed to have indirect beneficial ownership of the
      foregoing shares of Common Stock with shared voting and
      dispositive power over the Common Stock.

   -- Paul C. Kanavos, as a director and president of FXRE, may
      also be deemed to have indirect beneficial ownership of the
      foregoing shares of Common Stock with shared voting and
      dispositive power over the Common Stock.

   -- Brett Torino, as chairman-Las Vegas Division of FXRE, may
      also be deemed to have indirect beneficial ownership of the
      foregoing shares of Common Stock with shared voting and
      dispositive power over the Common Stock.

   -- Barry A. Shier, as director and chief operating officer of
      FXRE, may also be deemed to have indirect beneficial
      ownership of the foregoing shares of Common Stock with
      shared voting and dispositive power over the Common Stock.

   -- Mitchell Nelson, as executive vice president, general
      counsel, and secretary of FXRE, may also be deemed to have
      indirect beneficial ownership of the foregoing shares of
      Common Stock.

   -- David M. Ledy, as a director of FXRE, may also be deemed to
      have indirect beneficial ownership of the foregoing shares
      of Common Stock with shared voting and dispositive power
      over the Common Stock.

   -- Harvey Silverman, as a director of FXRE, may also be
      deemed to have indirect beneficial ownership of the
      foregoing shares of Common Stock with shared voting and
      dispositive power over the Common Stock.

   -- Bryan E. Bloom, as a director of FXRE, may also be deemed
      to have indirect beneficial ownership of the foregoing
      shares of Common Stock with shared voting and dispositive
      power over the Common Stock.

   -- Michael J. Meyer, as a director of FXRE, may also be deemed
      to have indirect beneficial ownership of the foregoing
      shares of Common Stock with shared voting and dispositive
      power over the Common Stock.

   -- Robert Sudack, as director of FXRE, may also be deemed to
      have indirect beneficial ownership of the foregoing shares
      of Common Stock with shared voting and dispositive power
      over the Common Stock.

   -- John D. Miller, as director of FXRE, may also be deemed to
      have indirect beneficial ownership of the foregoing shares
      of Common Stock with shared voting and dispositive power
      over the Common Stock.

A full-text copy of the SCHEDULE 13D is available for free at:

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

               About Riviera Holdings Corporation

Headquartered in Las Vegas, Riviera Holdings Corporation (Amex:
RIV) -- http://www.rivierahotel.com/-- owns and operates the
Riviera Hotel and Casino on the Las Vegas Strip and the Riviera
Black Hawk Casino in Black Hawk, Colorado.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $218.2 million and total liabilities of $264.5 million,
resulting in a stockholders' deficit of about $46.3 million.

For three months ended Sept. 30, 2008, the company posted net loss
of $3.4 million compared with net loss of $18.2 million for the
same period in the previous year.

For nine months ended Sept. 30, 2008, the company posted net loss
of $826 million compared with net loss of $12.1 million for the
same period in the previous year.

At Sept. 30, 2008, the company has cash and cash equivalents of
$20.5 million.  The company's cash and cash equivalents
decreased by $8.3 million during the nine months ended Sept. 30,
2008 due to $18.0 million in net cash used in investing activities
partially offset by $7.2 million in net cash provided by operating
activities and $2.5 million in net cash provided by financing
activities.  Cash and cash equivalents increased
$7.7 million during the nine months ended Sept. 30, 2007, due to
$17.3 million in net cash from provided by operating activities
partially offset by $8.9 million in net cash used in investing
activities and $0.7 million in net cash used in financing
activities.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 14, 2008,
Moody's Investors Service downgraded Riviera Holding Corporation's
corporate family, probability of default, and senior secured
ratings to B3 from B2.  The rating outlook is negative.


RIVIERA HOLDINGS: Wayzata Investment Discloses 8% Equity Stake
--------------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission, two companies disclosed that they may be deemed to
beneficially own Riviera Holdings Corporation's shares of common
stock, par value $.001 per share:
                                       Shares
                                       Beneficially
   Company                             Owned         Percentage
   -------                             ------------  ----------
Wayzata Investment Partners LLC        1,004,000         8.0%
Patrick J. Halloran                    1,004,000         8.0%

As of Nov. 4, 2008, there were 12,498,555 shares of common stock,
$.001 par value per share, outstanding.

A full-text copy of the SCHEDULE 13G is available for free at:

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

               About Riviera Holdings Corporation

Headquartered in Las Vegas, Riviera Holdings Corporation (Amex:
RIV) -- http://www.rivierahotel.com/-- owns and operates the
Riviera Hotel and Casino on the Las Vegas Strip and the Riviera
Black Hawk Casino in Black Hawk, Colorado.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $218.2 million and total liabilities of $264.5 million,
resulting in a stockholders' deficit of about $46.3 million.

For three months ended Sept. 30, 2008, the company posted net loss
of $3.4 million compared with net loss of $18.2 million for the
same period in the previous year.

For nine months ended Sept. 30, 2008, the company posted net loss
of $826 million compared with net loss of $12.1 million for the
same period in the previous year.

At Sept. 30, 2008, the company has cash and cash equivalents of
$20.5  million.  The company's cash and cash equivalents
decreased by $8.3 million during the nine months ended Sept. 30,
2008 due to $18.0 million in net cash used in investing activities
partially offset by $7.2 million in net cash provided by operating
activities and $2.5 million in net cash provided by financing
activities.  Cash and cash equivalents increased
$7.7 million during the nine  months ended Sept. 30, 2007, due to
$17.3 million in net cash from provided by operating activities
partially offset by $8.9 million in net cash used in investing
activities and $0.7 million in net cash used in financing
activities.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 14, 2008,
Moody's Investors Service downgraded Riviera Holding Corporation's
corporate family, probability of default, and senior secured
ratings to B3 from B2.  The rating outlook is negative.


ROCKETT BURKHEAD: Files for Chapter 11 Bankruptcy Protection
------------------------------------------------------------
Chris Coletta at Triangle Business Journal reports that Rockett,
Burkhead & Winslow Inc. has filed for Chapter 11 bankruptcy
protection and has laid off 15 workers.

Court documents say that Rockett listed $1.6 million in assets and
$7.3 million in liabilities.  Triangle Business relates that
Rockett said it has between 200 and 999 creditors.  According to
court documents, Rockett listed large creditors like National
Cable Communications, Forbes Media LLC, Fortune magazine, FOX News
Network, and USA Today.

Citing Rockett CEO and President Grant O'Neal, Triangle Business
states that the company was harmed by decreased ad spending,
particularly among its large clients, which include BB&T, Dollar
Tree, and Old Dominion Freight Line.  Firms are setting plans for
their yearly advertising spending later in 2009 than they have
been, which has left Rockett in the lurch, the report states,
citing Mr. O'Neal.

Triangle Business quoted Mr. O'Neal as saying, "What we are
seeing, almost universally, is a real difficulty of clients
nailing down their plans.  That's what created the significant
problem for us.  We knew we couldn't operate as we exist today."

Mr. O'Neal said that part of Rockett's restructuring includes the
layoff of 15 workers.

Court documents say that Rockett's gross revenue was $38 million
in 2008, compared to $36 million in 2007.

Raleigh-based Rockett, Burkhead & Winslow Inc. is an advertising
agency founded in 1985 by businessmen Howard Rockett, Scott
Burkhead and Michael Winslow.  Messrs. Rockett and Burkhead
retired in 2006.  The company is paid by its clients to develop
and buy advertising in various media.


SAN JOAQUIN: Fitch Affirms 'BB' Underlying Rating on 1997A Bonds
----------------------------------------------------------------
Fitch Ratings affirms the underlying 'BB' rating on the San
Joaquin Hills Transportation Corridor Agency, California, insured
toll road refunding revenue bonds, series 1997A and the 'BB'
rating on the uninsured portion of the series 1997A bonds.  Fitch
also affirms the 'BB' rating on the $226 million senior lien roll
road revenue bonds, series 1993.  The Rating Outlook is Stable.
The bonds are secured by a net pledge of toll revenue collected at
the mainline and ramp toll plazas and a portion of development
impact fees assessed in the corridor.

The 'BB' rating reflects the strength of the SJHTCA's service
area, an established base of traffic, and management's
demonstrated willingness to raise rates and act in the interest of
bondholders.  The rating also incorporates significant cash
reserves providing liquidity for debt service payments, some
limited economic rate-making flexibility, and the project's role
as a congestion reliever.  In addition, the rating reflects the
future financial challenges faced by the SJHTCA which are
evidenced by high leverage and a continually increasing debt
service schedule with a $15 million or 16% increase in debt
service obligations in 2012, and similar increases every three to
four years until 2033.  Additionally, the SJHTCA will need to
remain at its revenue maximization point for the foreseeable
future to prevent a default, thus limiting its ability to deal
with short-to medium term disruptions from economic cycles between
now and the final maturity of the debt in 2036.  There is
additional near-term enhancement in the form $120 million in
mitigation payments made by the Foothill/Eastern Transportation
Corridor Agency.  However, if the F/ETCA does not construct the
Foothill/South project by 2015, the $120 million reverts to a loan
that must be repaid.

The facility primarily serves Orange County, an area hit hard by
the housing and mortgage crisis and resulting employment
reductions.  Employment in Santa Ana has been declining year-over-
year since May 2007, weighed down principally by the large
concentration of mortgage related employers in the region.
Employment losses totaled 1.8% in the region for 2008 versus the
California average of -0.9%.  The finance and construction sectors
alone lost 12,000 jobs through the first three quarters of 2008.
Housing price declines have been severe in this region as well.
By December 2008, Orange County's median home price was down 30%
over a year earlier, and this is likely to well exceed the
national average, estimated at -18% in the October Case-Shiller
20-city index.  Additionally, new home construction is almost non-
existent in this area given the limited availability of space in
Orange County and the build-up of excess inventory, which is
negatively affecting revenue from development impact fees.  These
fees are pledged revenues and are derived from new residential and
commercial development in the region.  Fiscal 2008 net development
impact fees dropped 53.4% to $4.3 million.

Given the impact of high fuel prices and sliding employment,
traffic on the facility was down 3.3% in fiscal 2008.  For the
first half of fiscal 2009 traffic is down about 10.2% over the
same period last year.  Fiscal 2008 traffic declines represent the
largest decline in yearly traffic on record, exceeding the 2.3%
decline of 2001, and putting traffic levels not seen since fiscal
2003.  Fiscal 2007 traffic was up approximately 1.55% over 2006.
While traffic growth has historically been slow with an average
annual growth rate of about 3.7% between fiscal years 1998-2008,
it has come despite ten toll increases and an AAGR in toll rates
of 6.7%, or moderately above inflation.  Recent traffic declines
reflect a confluence of factors including the weakening housing
market with increasing foreclosures, a slowing economy, and
reductions in employment.

Despite the loss in traffic, revenue for fiscal 2008 was up 2.7%,
with fiscal 2007 revenues posting an 8.7% gain.  However, revenue
for the first half of fiscal 2009 is down approximately 5.3%.
Like traffic, revenue appears to be declining as well, despite the
toll increase.  Excluding ramp-up from 1997-2000, revenue has
grown at an AAGR of 8.73% through fiscal 2008.  Recently,
management has take steps to smooth peak hour toll increases at
the Catalina View mainline toll plaza with a 2009 increase of only
$0.25 with additional increases of $0.25 planned for 2010 and
2011.  Overall, planned toll increases on the SJHTCA include
increases of $0.50-$1.00 by 2016 on most of the major ramps, with
the Catalina View mainline tolls growing by $1.50-$1.75.  These
increases would represent an AAGR in toll rates of approximately
3-5% over the eight year period.  Given the historically slow 3.7%
traffic growth from 1998-2008, coupled with the 6.7% AAGR in toll
rates, the near-inflationary nature of the future planned rate
changes may allow for some traffic growth if the economy rebounds.
If current economic conditions persist into 2010, demand on the
facility could be less resilient to future toll increases.  The
current cash toll rate per mile on the facility of $0.35 per mile
is one of the highest for Fitch-rated toll roads in the U.S.

Debt service coverage for fiscal 2008 (including the use of
approximately $30 million from the Mitigation Payments from the
F/ETCA) was 1.31 times.  Coverage in fiscal 2007 was 1.35x
assuming $12 million available under the Federal letter of credit
and the $30 million Mitigation Payment from F/ETCA.  Without the
payment, fiscal 2008 coverage of debt service with net revenue was
1.08x.  Structured liquidity totals approximately
$270 million and consists of $56.7 million in the Toll Rate
Stabilization Fund, $12.7 million in the Mitigation Custody
Account, $185.9 million in the Debt Service Reserve Fund, and
$15 million in cash in the Use & Occupancy Fund as of June 30,
2008.

In Fitch's base case scenario (which assumes rate increases in
line with the SJHTCA's proposed toll rate increases through 2016
and at or above inflation thereafter), traffic could be expected
to continue to grow moderately over time and may very well provide
the SJHTCA with enough revenue to prevent a default.  Even under
Fitch's stress case scenario which assumes much lower traffic and
revenue growth, a payment default would be forestalled to 2025-
2030, with liquidity draws beginning in the next few years.  Fitch
does assume the receipt of the remaining $30 million mitigation
payment for the impact of the construction of Foothill/South.  In
addition, neither scenario assumes the availability of loan
proceeds from the F/ETCA, as Fitch believes that the legal hurdles
to actual construction and the high likelihood for construction
increases if ultimately approved may limit the availability of
surplus cash for the SJHTCA.

The last of the $30 million annual mitigation payments from F/ETCA
is scheduled for fiscal 2009, as structured under the 2005
Mitigation Payment and Loan Agreement.  If Foothill/South is not
under construction by Dec. 31, 2015, the $120 million in
mitigation payments revert to a loan.  The 2005 agreement also
establishes a revolving credit facility from F/ETCA in the amount
of $1.04 billion that is available to the SJHTCA in annual
installments from F/ETCA sufficient to meet its rate covenant of
1.3x annual debt service.  Principal repayment will occur to the
extent that the SJHTCA has surplus cash as defined in the 1997
indenture, making repayment deeply subordinate to outstanding debt
and is scheduled to begin in 2037 after outstanding SJHTCA debt is
retired.  Accrued interest will not count towards the outstanding
principal balance, and F/ETCA retains the right to demand
prepayment to the extent surplus cash is available.

With respect to the Foothill/South project, Fitch notes that
recently, the U.S. Commerce Department upheld the California
Coastal Commissions position to deny the Transportation Corridor
Agencies a coastal consistency certification, essentially
rejecting plans to construct the proposed route of the Foothill
South for various environment reasons.  The Foothill South is a
proposed 16-mile extension that would connect Rancho Santa
Margarita to Interstate 5 at Basilone Road in San Diego County
near Camp Pendelton, providing congestion relief to heavily-
trafficked area.  Alternative routes remain a possibility, as does
possible court action by the TCA; however, at this point future
actions are uncertain.

The San Joaquin Hills toll road is one of two projects managed by
the TCA of Orange County, California.  While toll revenues are the
primary source of income on the San Joaquin Hills toll road, net
development impact fees are also pledged to the bonds.  The TCA
also manages the Foothill/Eastern toll roads.  Fitch rates the
Foothill/Eastern project bonds 'BBB.'


SBARRO INC: Is Mum on $7.8 Million Interest Payment Due Feb. 1
--------------------------------------------------------------
Sbarro Inc. is mum on whether it made an interest payment due Feb.
1, 2009.  Bloomberg's Bill Rochelle says Sbarro faced a $7.8
million interest payment.

Sbarro has $1.8 million in long-term debt maturities this year.

As of Sept. 28, 2008, Sbarro had $31.8 million in total current
assets, including $13.4 million in cash and cash equivalents.

Sbarro issued $150.0 million of senior notes at 10.375% due 2015
in connection with a 2007 merger with an affiliate of MidOcean
Partners III, LP, a private equity firm.  The interest is payable
on February 1 and August 1 of each year.

In connection with the Merger, Sbarro also entered into senior
secured credit facilities, which provide for loans of $208.0
million under a $183.0 million senior secured term loan facility
and a $25.0 million senior secured revolving facility.  The
revolving facility also provides for the issuance of letters of
credit not to exceed $10.0 million at any one time outstanding and
swing line loans not to exceed $5.0 million at any one time
outstanding.  In addition, the Senior Credit Facilities provide
for an uncommitted incremental facility of up to $50.0 million.
In connection with the Merger, Sbarro borrowed the entire $183.0
million available under the term loan facility.  The term loan
facility will mature in 2014 and the revolving credit facility is
scheduled to terminate and come due in 2013.

According to Sbarro, there were $4.0 million letters of credit
outstanding as of September 28, 2008.  The letters of credit have
been issued instead of cash security deposits under the Company's
operating leases or to guarantee construction costs of the
Company's locations, and for run-out claims under its medical
plan.  On October 17, 2008, Sbarro borrowed $8 million under its
senior secured revolving facility.  The remaining borrowing
availability is $13 million.

The Company also faces these long-term debt obligations:

     2010                     $1.8 million
     2011                     $1.8 million
     2012                     $1.8 million
     2013 and thereafter    $323.1 million

In general, borrowings under the Senior Credit Facilities bear
interest based, at the Company's option, at either the Eurodollar
rate or an alternate base rate, in each case plus a margin. The
applicable margin will be based on the Company's total leverage
ratio at the time of determination.  The rate of interest for
borrowings under the Senior Credit Facilities is LIBOR plus 2.50%
or ABR plus 1.50%.  In addition to paying interest on outstanding
principal under the Senior Credit Facilities, Sbarro is required
to pay an unused line fee to the lenders with respect to the
unutilized revolving commitments at a rate that will not exceed 50
basis points per annum.

Sbarro's obligations under the Senior Credit Facilities are
unconditionally and irrevocably guaranteed by its domestic
subsidiaries.  In addition, the Senior Credit Facilities are
secured by first priority perfected security interests in
substantially all of the Company's and its domestic subsidiaries'
capital stock, and up to 65% of the outstanding capital stock of
its foreign subsidiaries.

According to Sbarro, the Senior Notes are senior unsecured
obligations of the company and are guaranteed by all of the
company's current and future domestic subsidiaries and rank
equally in right of payment with all existing and future senior
indebtedness.  The Senior Notes are effectively subordinated to
all of the Company's secured indebtedness to the extent of the
collateral securing such indebtedness, including the Senior Credit
Facilities.

The Company was in compliance with the covenants under its bank
credit agreement for the quarter ended September 28, 2008.

On Jan. 14, Sbarro appointed Dan Montgomery as CFO, effective
immediately, to replace Anthony Puglisi, Sbarro's former CFO, who
would be leaving the company to pursue other interests.  Mr.
Montgomery began his career in corporate banking at NationsBank
and became a Managing Director in the syndicated debt capital
markets group at its successor Bank of America Securities.
Following the events of 9/11, Mr. Montgomery was appointed as the
Executive Director of the Air Transportation Stabilization Board,
a congressionally authorized program to provide funding to the
airline industry.  Mr. Montgomery subsequently joined the
financial consulting firm of Kroll Zolfo Cooper where he worked on
a variety of assignments including Krispy Kreme Doughnuts.  In
2006, Mr. Montgomery joined the corporate finance group of Oliver
Wyman.

Based in Melville, New York, Sbarro Inc. -- http://www.sbarro.com/
-- operates Italian quick-service restaurants.  Sbarro has 1,075
restaurants in 43 countries.  Sbarro restaurants feature a menu of
popular Italian food, including pizza, a selection of pasta dishes
and other hot and cold Italian entrees, salads, sandwiches, drinks
and desserts.

Entities controlled by MidOcean Partners III, LP, a private equity
firm, and certain of its affiliates acquired the Company, pursuant
to an agreement and plan of merger on January 31, 2007.  MidOcean
SBR Acquisition Corp., a wholly-owned subsidiary of Sbarro
Holdings, LLC, merged with and into the Company, with the Company
surviving the Merger.  Sbarro Holdings, LLC is a wholly-owned
subsidiary of MidOcean SBR Holdings, LLC.  Sbarro Holdings, LLC
owns 100% of the Company's outstanding common stock and Holdings
owns 100% of the limited liability company interests of Sbarro
Holdings, LLC.

MidOcean owns approximately 74% of Holdings and thus acquired
control of the Company in the Merger.  Certain of the Company's
senior managers acquired approximately 5% of the outstanding
equity of Holdings in connection with the Merger, with the balance
of the equity of Holdings being owned by other investors.

                           *     *     *

As reported by the Troubled Company Reporter on Feb. 3, 2009,
Standard & Poor's Ratings Services cut its corporate credit rating
on Sbarro to 'CC' from 'CCC'.  The outlook is negative.  S&P also
lowered the ratings on the company's $25 million revolving
facility and $183 million first-lien term loan to 'CC' from 'CCC'.

The downgrade reflects S&P's belief that negative operating trends
will continue to erode Sbarro's liquidity, thereby limiting the
company's capability to service its debt, said Standard & Poor's
credit analyst Mariola Borysiak.

In January, Moody's Investors Service downgraded the probability
of default rating as well as the corporate family rating of Sbarro
to Caa2 from Caa1. Moody's also lowered the company's speculative
grade liquidity rating to SGL-4 from SGL-3.  The outlook is
negative.  Moody's said the ratings downgrade reflects Sbarro's
weaker than expected operating performance which continues to
pressure margins and cash flows.  The downgrade also reflects
Moody's view that -- given the company's weak operating
performance -- Sbarro may have difficulty meeting financial
covenants in its bank credit facility, which tighten over the next
several quarters.


SELECT MEDICAL: Moody's Gives Negative Outlook; Affirms Ratings
---------------------------------------------------------------
Moody's Investors Service revised the rating outlook of Select
Medical Holdings Corporation to negative from stable.  Moody's
also affirmed all the current ratings of Holdings and Select
Medical Corporation, a wholly owned subsidiary of Holdings.

The negative rating outlook reflects Moody's expectation that
liquidity will remain weak.  "A combination of aggressive
tightening of the financial covenants required in the company's
credit agreement and challenges in growing EBITDA in the face of
sector pressures will limit access to undrawn revolver amounts and
diminish the ability to absorb negative business developments
while maintaining compliance," said Dean Diaz, VP -- Senior Credit
Officer.

The affirmation of the B2 Corporate Family Rating reflects Select
Medical's considerable financial leverage and modest interest
coverage.  The company has been unfavorably impacted by industry
pressures in both the specialty hospital and outpatient
rehabilitation business segments.  However, Moody's continues to
believe that the provisions of the Medicare, Medicaid and SCHIP
Extension Act of 2007 and the CMS final rule for fiscal 2009
should provide some near-term stability in the specialty hospital
segment.  The ratings also reflect the company's strong
competitive position as one of the largest long-term acute care
and outpatient rehabilitation providers in the US.

The Speculative Grade Liquidity Rating of SGL-4 continues to
reflect the expectation of a weak liquidity position over the next
four quarters, characterized by a narrow level of compliance with
financial covenants resulting more from the aggressive tightening
of compliance levels than the company's ability to generate EBITDA
growth.  Compliance levels are also expected to constrain access
to undrawn amounts of the company's revolving credit facility.
For further details, refer to Moody's Credit Opinion for Select
Medical Holdings Corporation on Moodys.com.

Moody's rating actions are summarized below.

Rating outlook revised to negative from stable.

Ratings affirmed/LGD Assessments revised:

Select Medical Holdings Corporation:

  -- Senior floating rate notes due 2015 at Caa1 (LGD6, 91%)
  -- Corporate Family Rating, B2
  -- Probability of Default Rating, B2
  -- Speculative Grade Liquidity Rating, SGL-4

Select Medical Corporation:

  -- Senior secured revolving credit facility due 2012, to Ba2
     (LGD2, 19%) from Ba2 (LGD2, 20%)

  -- Senior secured term loan due 2012, to Ba2 (LGD2, 19%) from
     Ba2 (LGD2, 20%)

  -- 7.625% Senior subordinated notes due 2015, to B3 (LGD4, 69%)
     from B3 (LGD5, 70%)

Moody's last rating action was on June 24, 2008, when Select
Medical's Speculative Grade Liquidity Rating was downgraded to
SGL-4 from SGL-3.

Headquartered in Mechanicsburg, Pennsylvania, Select Medical
provides long-term acute care hospital services and inpatient
acute rehabilitative care through its specialty hospital segment.
The company also provides physical, occupational, and speech
rehabilitation services through its outpatient rehabilitation
segment.  For the twelve months ended September 30, 2008, the
company recognized net revenues of approximately $2.1 billion.


SPECTRUM BRANDS: Files for Chapter 11 Bankruptcy in Texas
---------------------------------------------------------
Spectrum Brands Inc., along with its subsidiaries, filed a
voluntary petition for reorganization under Chapter 11 in the
United States Bankruptcy Court for the Western District of Texas,
San Antonio Division after it failed to make a $25.8 million
interest payment on its 7-3/8% senior subordinated notes due 2015,
triggering a default with respect to the notes on Feb. 2, 2009.

The company said it filed for bankruptcy to implement the
refinancing in the most efficient manner and to take advantage of
certain tax benefits.  The company's non-U.S. operations, which
are legally separate, are not included in the Chapter 11
proceedings.

The company disclosed that it has reached agreements with
noteholders representing, in the aggregate, approximately 70% of
the face value of its outstanding bonds, to pursue a refinancing
that, if implemented as proposed, will significantly reduce the
company's outstanding debt and put it in a stronger financial
position for the future.  A refinancing on the agreed terms would
enable the company to reduce the amount of debt on its balance
sheet by approximately $840 million, eliminate approximately
$95 million in annual cash interest payments for at least each of
the next two years, and free up additional cash that can be
reinvested in its business to support meaningful revenue and
profit growth.  The company has outstanding indebtedness of
approximately $2.6 billion at present.

The company included in its filing a pre-negotiated plan of
reorganization, along with a proposed disclosure statement.  The
refinancing is provided for in the plan through the cancellation
of existing bond obligations in a principal amount of $1.05
billion and the issuance to the noteholders of new bonds in an
aggregate principal amount equal to 20% of the total unpaid
principal and interest on existing bonds together with shares of
new common stock to be created under the plan.  Existing common
stock will be extinguished under the plan, and no distributions
will be made to holders of the current equity.

Furthermore, the plan does not propose to impact any existing
creditors other than the noteholders and equity holders.  The
claims of existing secured and other general unsecured creditors
would be reinstated or unimpaired, and thus would receive payment
of the claims on existing terms either in the ordinary course or
upon consummation of the plan.  This means, for example, that
under the plan, if approved as proposed, the company would provide
pay and benefits to its employees as usual, honor all obligations
to its customers, and pay suppliers in full for their claims upon
consummation of the plan.  The company intends to move forward as
quickly as possible to obtain approval of the disclosure
statement, to solicit votes on the plan from the noteholders, and
to present the plan for approval by the Court.

The company and all of its operating units in the U.S. and around
the world expect to continue to meet their respective obligations,
subject to applicable limitations, to their suppliers, customers
and employees in the ordinary course of business during the
restructuring process, which is expected to be completed in
approximately four to six months.

The company said it has secured $235 million in debtor-in-
possession financing from certain of its existing asset backed
facility lenders with a participating interest from certain of its
existing noteholders, which represents an incremental
$70 million in cash availability at the outset of the proceedings,
subject to certain limitations and reserves based on the amount
drawn on the ABL at the time of filing and is expected to enable
the company and its U.S. businesses to continue to satisfy
customary obligations associated with their ongoing operations.
All of the company's ongoing international operations are cash-
flow positive.

Kent Hussey, Chief Executive Officer of Spectrum Brands, said: "We
are pleased to have the support of noteholders representing, in
the aggregate, approximately 70 percent of the face value of the
bonds outstanding to move forward with a restructuring that will
put our Company in a stronger financial position for the future.
Our businesses have attractive growth prospects that have been
encumbered by the level of debt the parent company is carrying.
After careful consideration, we decided that the approach
announced today would be the most effective and expedient path for
us to develop a more appropriate capital structure to support our
long-term business objectives.  We estimate that when this
refinancing has been completed, the company will generate in
excess of $100 million in annual free cash flow."

He continued, "We do not believe there is any current need -- and
we have no current plans -- to make any significant operating
changes to our three business units, which have been profitable
and have generated positive cash flow, and are meaningful
competitors in their respective industries.  e do plan to continue
the initiatives already underway to make our operations even more
efficient going forward, and we remain focused on driving
increased sales and profitability over the long term."

"Despite the global economic slowdown, we see important bright
spots in our outlook.  Our Global Batteries and Personal Care
segment delivered its eighth consecutive quarter of adjusted
EBITDA growth for the first quarter of 2009.  We continue to gain
market share in many product segments, and our traditional value
positioning, together with a more cautious consumer, is working to
our advantage in the current environment.  We are committed to
completing the restructuring and emerging a financially healthier
company, better positioned to capitalize on the many opportunities
we see," Mr. Hussey concluded.

The company has asked the court for "first day" authorization to
pay certain pre-filing obligations in the ordinary course of
business, as necessary to maintain continuing operations during
the case.  Any valid obligation not authorized for payment by the
Bankruptcy Court under these "first day" authorizations would in
any event be paid in full under the plan, if approved and
implemented as proposed.

The company's financial advisor is Perella Weinberg LLP and its
legal advisor is Skadden, Arps, Slate, Meagher and Flom LLP.

A full-text copy of the company's 13-Week Debtor-in-Possession
Budget is available for free at

               http://ResearchArchives.com/t/s?3915

In its annual report submitted to the Securities and Exchange
Commission, Spectrum disclosed $2,247,479,000 in assets and
$3,274,717,000 in debts as of Sept. 30, 2008.  Net loss was
$930,300,000 on $2,688,010,000 of sales for 2008, compared with
net loss of $596,713,000 on $2,564,587,000 of sales in 2007.  The
company recorded a $433,972,000 net loss in 2006.

                      About Spectrum Brands

Headquartered in Atlanta, Georgia, Spectrum Brands Inc. (PINK
SHEETS: SPC) -- http://www.spectrumbrands.com/-- is a supplier of
consumer batteries, lawn and garden care products, specialty pet
supplies, shaving and grooming products, household insect control
products, personal care products and portable lighting.

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


SPECTRUM BRANDS: Files Projections, Targets Ch. 11 Exit by June 30
------------------------------------------------------------------
Spectrum Brands Inc., which has filed Chapter 11 protection from
creditors, prepared the financial projections for the five years
ending Sept. 30, 2009, 2010, 2011, 2012 and 2013.

The financial projections, according to the company, take into
account the current macroeconomic environment including the recent
declines in key commodity inputs, slowdown in consumer spending,
and changes in foreign exchange rates, among other things.  The
company assumes the current consumer spending slowdown will last
through the end of calendar year 2009, with gradual growth in
consumer spending resuming in 2010.

The company said that the financial projections are based on the
assumption that its prepackaged plan will be confirmed as stated
in the disclosure statement and plan of reorganization and will
become effective June 30, 2009.

A. Projected Consolidated Statement of Operations

Sales Forecast:     A detailed 5-year forecast was prepared in
                    U.S. dollars.  Sales were projected by
                    business segment and by product category
                    within each segment.  FY 2009 projections
                    were based on a detailed bottoms-up analysis
                    and the projected periods were based off the
                    2009 estimates.  The company's growing
                    products business segment was shut-down
                    effective Jan. 31, 2009.

Cost of Sales
Assumptions:        Cost of sales were projected at a rate
                    relative to Sales.  The company estimates
                    slight decreases in the rate relative to
                    Sales due to declines in key commodity input
                    prices and the exiting of lower-/negative-
                    margin product lines, partly offset by a
                    consumer trend to lower-margin products in
                    certain regions due to the current economic
                    conditions.

Operating Expense
Assumptions:        Selling, marketing, distribution, advertising,
                    research and development and general and
                    administrative expenses were projected at
                    rates relative to net sales and individually
                    inflated based on the company's estimates.

Interest Expense:   Interest for the revolving credit facility
                    is projected based on the LIBOR forward curve
                    plus 4.5%.  The Exit Facility is projected to
                    include a Subordinated Participation Facility
                    which is projected based on the LIBOR forward
                    curve plus 14.0%.  The Exit Facility interest
                    and the Subordinated Participation Facility
                    interest are expensed and disbursed monthly.
                    The First Lien Term loan interest is
                    projected at LIBOR plus 4.0% per annum.  The
                    First Lien Term loan interest is expensed
                    monthly and disbursed on a quarterly basis.
                    The First Lien Term loan interest is
                    projected at LIBOR plus 4.5% per annum.  The
                    First Lien Term loan interest is expensed
                    monthly and disbursed on a quarterly basis.

Income Tax
Expense:            The company's tax advisors have estimated
                    post-emergence U.S. federal, state and local
                    tax expense to be incurred at an effective
                    rate of 38%.  The Debtors tax advisors have
                    also estimated post-emergence foreign tax
                    expense to be incurred at effective rates of
                    from 28% to 35% depending on the income mix
                    of various foreign jurisdictions.

B. Projected Consolidated Balance Sheets

Cash:               Cash is projected to be $70 million at the
                    end of 2009 and $50 million at the end of
                    each year thereafter, and is substantially
                    held by the Debtors' foreign entities.
                    Excess cash generated by the business is
                    utilized to pay-down the Exit Facility and
                    the term loan.

Accounts
Receivable:         The FY 2009 projected Accounts Receivable
                    balances were based on a detailed bottoms-up
                    analysis, which is based on the company's
                    historical experience.  The resultant days'
                    sales outstanding average is 66 days.  For
                    the projected periods, there is no assumption
                    to an improvement in the days' sales
                    outstanding.

Inventory:          The FY 2009 projected Inventory balances were
                    based on a detailed bottoms-up analysis,
                    which is based on the company's historical
                    experience.  The resultant days' carried
                    average is 95 days.  For the projected
                    periods, there is no assumption to an
                    improvement in the days carried outstanding.

A full-text copy of the company's pro forma financial projections
is available for free at: http://ResearchArchives.com/t/s?3914

                      About Spectrum Brands

Headquartered in Atlanta, Georgia, Spectrum Brands Inc. (PINK
SHEETS: SPC) -- http://www.spectrumbrands.com/-- is a supplier of
consumer batteries, lawn and garden care products, specialty pet
supplies, shaving and grooming products, household insect control
products, personal care products and portable lighting.

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


SPECTRUM BRANDS: Case Summary & 26 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Spectrum Brands Inc.
        aka Jungle Laboratories Corporation
        120 Industrial Drive
        Cibolo, TX 78108

Bankruptcy Case No.: 09-50456

Debtor-affiliates filing separate Chapter 11 petitions:

        Entity                                     Case No.
        ------                                     --------
Spectrum Jungle Labs Corporation                   09-50455
ROVCAL, Inc.                                       09-50454
ROV Holding, Inc.                                  09-50457
Tetra Holding (US), Inc.                           09-50459
United Industries Corporation                      09-50461
Schultz Company                                    09-50463
Spectrum Neptune US Holdco Corporation             09-50464
United Pet Group, Inc.                             09-50466
DB Online, LLC                                     09-50467
Aquaria, Inc.                                      09-50468
Perfecto Manufacturing, Inc.                       09-50469
Aquarium Systems, Inc.                             09-50470
Southern California Foam, Inc.                     09-50471

Type of Business: The Debtors supply consumer batteries, lawn and
                  garden care products, specialty pet supplies,
                  shaving and grooming products, household insect
                  control products, personal care products and
                  portable lighting.

                  The Debtors' business is operated in three
                  reportable segments: (a) Global Batteries and
                  Personal Car; (b) Global Pet Supplies; and (c)
                  Home and Garden.  The Debtors have
                  approximately 5,960 employees worldwide, with
                  about 2,700 of those employees working for the
                  Debtors within the United States.

                  In addition, Spectrum Brands holds a 50%
                  interest in a domestic entity; minority
                  interests (less than 25% each) in a domestic
                  entity and a foreign entity; a limited
                  partnership interest in a foreign entity; and a
                  100% interest in a foreign trust.

                  See: http://www.spectrumbrands.com/

Chapter 11 Petition Date: February 3, 2009

Court: Western District of Texas (San Antonio)

Judge: Ronald B. King

Debtors' Counsel: William B. Kingman, Esq.
                  Law Offices of William B. Kingman, P.C.
                  4040 Broadway, Suite 450
                  San Antonio, TX 78209
                  Tel: (210) 829-1199
                  Fax: (210) 821-1114

                  Harry A. Perrin, Esq.
                  D. Bobbitt Noel, Jr., Esq
                  Vinson & Elkins LLP
                  First City Tower
                  1001 Fannin Street, Suite 2500
                  Houston, Texas 77002
                  Tel: (713) 758-2222
                  Fax: (713) 615-2346

                  D. J. Baker, Esq.
                  Skadden, Arps, Slate, Meagher & Flom LLP
                  Four Times Square
                  New York, NY 10036
                  Tel: (212) 735-3000
                  Fax: (212) 735-2000

Special Counsel: Sutherland Asbill & Brennan LLP

Financial Advisor: Perella Weinberg Partners LP

Tax Consultant: Deloitte Tax LLP

Claims Agent: Logan & Company Inc.

Estimated Assets: More than $1 billion

Estimated Debts: More than $1 billion

The Debtor's Largest Unsecured Creditors:

   Entity                      Nature of Claim   Claim Amount
   ------                      ---------------   ------------
U.S. Bank National Association Indenture Trustee $700,000,000
60 Livingston Avenue           for 7-3/8% Senior
EP-MN-WS3C                     Subordinated
St. Paul, MN 55107-2292        Notes due 2015
Attn: Richard Prokosch
Tel: (651) 495-3918
Fax: (651) 495-8097

U.S. Bank National Association Indenture Trustee $347,000,000
60 Livingston Avenue           for Variable Rate
EP-MN-WS3C                     Toggle Senior
St. Paul, MN 55107-2292        Subordinated
Attn: Richard Prokosch         Notes due 2013
Tel: (651) 495-3918
Fax: (651) 495-8097

U.S. Bank National Association Indenture Trustee $3,000,000
60 Livingston Avenue           for 8-1/2% Senior
EP-MN-WS3C                     Subordinated
St. Paul, MN 55107-2292        Notes due 2015
Attn: Richard Prokosch
Tel: (651) 495-3918
Fax: (651) 495-8097

Goldman Sachs High Yield Fund  Noteholder;       $17,250,000
c/o Goldman Sachs Asset        $12,250,000 in
Management                     7-3/8%;
Goldman Sachs Funds            $5,000,000 in
4900 Sears Tower, 60th Floor   variable rate
Chicago, IL 60606
Attn: Andrew Jessop
Tel: (800) 621-2550

Putnam High Yield Trust        Noteholder;       $10,555,000
c/o Putnam Investment          $7,305,000 in
Management                     7-3/8%;
Putnam Investments             $3,250,000 in
One Post Office Square         variable rate
Suite 500
Boston, MA 02109
Paul D. Scanlon
Tel: (800) 225-1581
     (617) 292-1000
Fax: (617) 292-8545

JPM US High Yield Bond Mother  Noteholder;       $8,000,000
Qualified Inst                 $7,000,000 in
c/o JP Morgan Investment Mgmt  7-3/8%;
J.P. Morgan Funds              $1,000,000 in
522 Fifth Avenue               variable rate
New York, NY 10036

JP Morgan High Yield           Noteholder;       $7,975,000
Bond Fund                      $4,975,000 in
c/o Banc One Investment        7-3/8%;
Advisors                       $3,000,000 in
J.P. Morgan Funds              variable rate
522 Fifth Avenue
New York, NY 10036
William J. Morgan
Tel: (800) 348-4782
     (212) 837-2300

Nomura US Hi Yield Corp Bond   Noteholder;       $4,400,000
Mother Fund                    $2,975,000 in
c/o Nomura Corp. Research      7-3/8%;
    & Asset                    $1,425,000 in
    Nomura Asset Management    variable rate
    U.S.A. Inc.
2 World Financial Center
Building B, 22nd Floor
New York, NY 10281-1712
Mark Meyer,
Managing Director
Tel: (800) 833-0018
     (212) 667-9300
Fax: (212) 667-1058

Putnam High Yield Advantage    Noteholder;       $3,860,000
Fund                           $2,490,000 in
c/o Putnam Investment          7-3/8%;
    Management                 $1,370,000 in
Putnam Investments             variable rate
One Post Office Square
Suite 500
Boston, MA 02109
Paul D. Scanlon
Tel: (800) 225-1581
     (617) 292-1000
Fax: (617) 292-8545

Putnam VT High Yield Trust     Noteholder;       $2,865,000
c/o Putnam Investment          $1,850,000 in
    Management                 7-3/8%;
Putnam Investments             $1,015,000 in
One Post Office Square         variable rate
Suite 500
Boston, MA 02109

SEI Inst Investment Trust High Noteholder        $1,960,000
Yield Bond
c/o SEI Investments Fund
    Management
SEI Investments
One Freedom Valley Dr.
Oaks, PA 19456
Thomas Hauser
Tel: (800) 342-5734
     (610) 676-1000
Fax: (610) 676-1105

Pacholder High Yield Fund      Noteholder;       $1,800,000
Inc.                           $1,075,000 in
c/o Pacholders Associates      7-3/8%;
    Pacholder High Yield       $725,000 in
    Fund Inc.                  variable rate
8044 Montgomery Road
Cincinnati, OH 45236
William J. Morgan
Tel: (513) 985-3200
Fax: (513) 985-3217

SEI Institutional High Yield   Noteholder        $1,733,000
Bond Portfolio
c/o SEI Investments Fund
Management
SEI Investments
One Freedom Valley Dr.
Oaks, PA 19456
Robert Levine
Tel: (800) 342-5734
     (610) 676-1000
Fax: (610) 676-1105

Principal Investors Fund Inc   Noteholder;       $1,700,000
High Yield Fund                $1,000,000 in
c/o Principal Management Corp  7-3/8%;
The Principal Financial Group  $700,000 in
711 High Street                variable rate
Des Moines, IA 50392-0200
Gary Pokrzywinski
Tel: (800) 247-4123
     (515) 283-9330
Fax: (515) 698-5130

Putnam Global High Yield       Noteholder;       $1,345,000
Bond Fund                      $1,120,000 in
c/o Putnam Advisory Company    7-3/8%;
    Inc.                       $225,000 in
Putnam Investments Limited     variable rate
JPMorgan House
IFSC
Dublin 1, Ireland
Paul D. Scanlon
Tel: 353-1-637-6837
     (617) 292-0100
Fax: (617) 292-8545

Top Managers Funds             Noteholder;       $1,125,000
Global High Yield Fund         $750,000 in
c/o Mediolanum International   7-3/8%;
    Funds                      $375,000 in
    Mediolanum International   variable rate
    Funds Ltd.
Alexandra House
Sweepstakes, Ballsbridge
Dublin 4, Ireland
Tel: 01-2310800
Fax: 01-2310805

Alliance High Yield Open       Noteholder        $805,000
c/o Alliance Bernstein
    Japan Ltd.
Otemachi First Square
East Tower, 17F
1-5-1 Otemachi
Chiyoda-ku, Tokyo, 100-0004
Japan
Tel: 81-3-3240-8500
Fax: (352) 470-580

JPMorgan Fleming Fund ICVC -   Noteholder;       $705,000
UK Corporate Bond Fund
c/o JPMorgan Asset
    Management UK
JPMorgan Asset Management
10 Aldermanbury
London GB
Robert Cook
Tel: 44-080-072-7770
     44-795-895-8348

Factory Mutual Insurance       Noteholder;       $500,000
Company                        $250,000 in
c/o Factory Mutual Insurance   7-3/8%;
    Company                    $250,000 in
1301 Atwood Avenue             variable rate
Johnston, RI 02919-0750
Jeffrey Black
Tel: 401-275-3000-1559
Fax: 401-275-3029

JP Morgan Core Plus Bond Fund  Noteholder        $500,000
c/o Banc One Investment
    Advisors
J.P. Morgan Funds
522 Fifth Avenue
New York, NY 10036
Gary Madich
Tel: (800) 348-4782

JPM US High Yield Corporate    Noteholder        $500,000
Bond Mother Fund
c/o JP Morgan Asset Mgmt Jpn
J.P. Morgan Asset Management
Tokyo Building 28 F
2-7-3 Marunouchi
Chiyoda-ku, Tokyo, 100-6432
Japan
Gary Madich
Tel: (800) 348-4782

JPM US High Yield Corporate    Noteholder        $400,000
Bond Mother Fund
c/o JP Morgan Asset Mgmt Jpn
J.P. Morgan Asset Management
Tokyo Building 28 F
2-7-3 Marunouchi
Chiyoda-ku, Tokyo, 100-6432
Japan
Tel: 81-3-6736-2000

Harbinger Capital Partners     Noteholder        confidential
Master Fund I, Ltd.
555 Madison Avenue
16th Floor
New York, NY 10022
David M. Maura
Tel: (212) 508-3703
Fax: (212) 508-3721

Harbinger Capital Partners     Noteholder        confidential
Special Situations Fund LP
555 Madison Avenue
16th Floor
New York, NY 10022
David M. Maura
Tel: (212) 508-3703
Fax: (212) 508-3721

D.E. Shaw Laminar Portfolios   Noteholder        confidential
LLC
120 West Forty-Fifth Street
39th Floor
New York, NY 10036
David M. Maura
Tel: (212) 508-3703
Fax: (212) 508-3721

Avenue Capital Management II   Noteholder        confidential
LP
535 Madison Avenue
14th Floor
New York, NY 10022
Michael Elkins
Tel: (212) 878-3500
Fax: (212) 878-3565

Dune Capital Management        Noteholder        confidential
623 Fifth Avenue
New York, NY 10022
Andrew B. Cohen
Tel: (212) 301-8308
Fax: (212) 885-2473

The petition was signed by Anthony L. Genito, vice president.

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


SPORT CHALET: BofA Extends Forbearance Period Until March 2
-----------------------------------------------------------
Sport Chalet, Inc., discloses that on January 29, 2009, the
company and its wholly-owned subsidiary, Sport Chalet Value
Services, LLC, entered into a Second Amendment to Amended and
Restated Loan and Security Agreement and Limited Forbearance
Agreement, with Bank of America, N.A.  Under the Second Amendment,
Bank of America, N.A. has agreed to extend the period during which
it will forbear from exercising its rights with respect to certain
defaults by the Company under its credit facility from January 31,
2009 until March 2, 2009.

Sport Chalet and its subsidiary first entered into an Amendment to
Amended and Restated Loan and Security Agreement and Limited
Forbearance Agreement dated as of December 28, 2008, with Bank of
America, on January 9, 2009.  Under the First Amendment:

   (i) the Bank has agreed to forbear from exercising its rights
in respect of the Event of Default under the Amended and Restated
Loan and Security Agreement, as amended, dated as of June 20,
2008, among the Company, SCVS and the Bank,

  (ii) the Company may not select a LIBOR-based interest rate
under the Loan Agreement, and

(iii) the Bank has agreed to permit an overadvance in the amount
of $1.5 million until January 13, 2009.

As of December 31, 2008, an event of default had occurred under
the Loan Agreement due to the failure of the Company to maintain a
"Fixed Charge Coverage Ratio" under the Loan Agreement of not less
than 1.00 to 1.00.  On December 28, 2008, availability under the
Loan Agreement was less than $10.5 million, thereby requiring the
testing of the Fixed Charge Coverage Ratio.

The forbearance period initially ended January 31, 2009.  The
Company and SCVS acknowledged, among other things, that they had
no defenses, claims or set-offs to the obligations under the Loan
Agreement and provided the Bank a general release of claims.

Concurrently with entering into the First Amendment, the Company
and SCVS entered into a letter agreement with the Bank under which
the Company has agreed to engage, for a minimum of 90 days, a
consultant acceptable to the Bank to prepare cash flow and
operating budgets to be presented periodically to the Board of
Directors of the Company and to the Bank.  On January 9, 2009, the
Company retained FTI Consulting.

On February 2, 2009, Sports Chalet said its Board of Directors is
engaged in an evaluation of strategic alternatives. The Board has
retained Wedbush Morgan Securities as its financial advisor in
this process.

Craig Levra, Chairman and CEO, said, "While we remain focused on
meeting the challenges posed by the unprecedented macroeconomic
difficulties in our core market areas of California, Nevada and
Arizona, the Board is evaluating all alternatives to achieve
maximum value for Sport Chalet shareholders."

The review process may include such alternatives as raising
additional capital, amending or replacing the Company's current
bank credit facility, further reducing expenses, or continuing to
execute the Company's current operating plan. No timetable has
been set for completion of the review. The Company has no
commitment or agreement with respect to any transaction, and there
can be no assurance that any transaction will result. The Company
does not plan to make any further comment on the review until the
review is complete.

The Company will release third quarter fiscal 2009 earnings
results after the market closes on Wednesday, February 11, 2009.

Sport Chalet, Inc. (SPCHA) -- http://www.sportchalet.com--
founded in 1959 by Norbert Olberz, operates full service specialty
sporting goods stores in California, Nevada, Arizona and Utah.
The Company offers over 50 services for the serious sports
enthusiast, including backpacking, canyoneering, and kayaking
instruction, custom golf club fitting and repair, snowboard and
ski rental and repair, SCUBA training and certification, SCUBA
boat charters, team sales, racquet stringing, and bicycle tune-up
and repair throughout its 55 locations.

As of September 28, 2008, the Company had $200.0 million in total
assets; $98.6 million in total liabilities, all current; and
$26.0 million in deferred rent.


STARWOOD HOTELS: Moody's Reviews 'Ba1' Rating for Likely Cut
------------------------------------------------------------
Moody's Investors Service placed Starwood Hotels & Resorts
Worldwide, Inc.'s senior unsecured ratings on review for possible
downgrade in response to the company's reduced earnings guidance
for 2009.  Although, Starwood has taken action to reduce costs and
curtail capital spending in an effort to generate cash to reduce
debt, industry fundamentals continue to weaken.  This can be
evidenced by declining RevPAR (revenue per available room) trends
-- as leisure and business travelers continue to curtail travel.

Additionally, the lower earnings outlook coupled with limited
visibility regarding future trends increases the probability that
Starwood will need to amend its debt/EBITDA covenant.

The review for possible downgrade will focus on Starwood's RevPAR
trends and their likely impact on earnings and cash flow, the
company's ability to reduce debt through other means, as well as
the need to address potential covenant tightness.

Ratings placed on review for possible downgrade:

  -- Senior unsecured bonds and debentures at Baa3
  -- Senior unsecured shelf at (P)Baa3
  -- Senior subordinated shelf at (P)Ba1
  -- Preferred debt shelf at (P)Ba2

Moody's last action on Starwood took place on December 18, 2008,
when Moody's changed the company's rating outlook to negative.

Starwood Hotels & Resorts Worldwide Inc., headquartered in White
Plains, New York, is a leading hotel company with approximately
900 properties in more than 100 countries.


STATION CASINOS: Debt From Colony Buyout May Cue Default
--------------------------------------------------------
Bloomberg News reported that Station Casinos Inc. may go bankrupt,
after Colony Capital LLC added more than $2 billion of loans and
bonds to Station Casinos' books.

Los Angeles-based Colony Capital took Station Casinos private in
2007 and used loans and bonds to complete the $8.8 billion deal
with the casino company's founding family.

According to Las Vegas Review Journal, Station Casinos carried
$5.4 billion in debt in the third quarter ended Sept. 30, much of
it from the November 2007 management-led buyout with Colony
Capital.  Moody's Investors Service analyst Peggy Holloway said
that leverage puts Station at risk of defaulting on its bank debt.
"From a liquidity perspective, they are on the brink of
bankruptcy," she said.

Station Casinos announced Dec. 15 that it has determined that
certain of the conditions to its previously announced private
exchange offer for its outstanding 6% Senior Notes due 2012, 73/4%
Senior Notes due 2016, 61/2% Senior Subordinated Notes due 2014,
67/8% Senior Subordinated Notes due 2016 and 65/8% Senior
Subordinated Notes due 2018 described in the confidential
information memorandum dated November 25, 2008, will not be
satisfied and that it is terminating the Exchange Offer.
According to Bloomberg's Bill Rochelle, at the time of the
withdrawal, Moody's Investors Service said there was a "high
probability" of default unless the company could negotiate
covenant relief from its lenders and retain access to the
revolving credit.

On December 19, Station Casinos said it has submitted a borrowing
request for the remaining $257 million available under its
revolving credit facility.  As of the close of business on
December 19, $239 million of such borrowing request had been
funded.  "The proceeds of such borrowing will be used for general
corporate purposes," the company said.

                      About Station Casinos

Station Casinos, Inc. is the leading provider of gaming and
entertainment to the residents of Las Vegas, Nevada. Station's
properties are regional entertainment destinations and include
various amenities, including numerous restaurants, entertainment
venues, movie theaters, bowling and convention/banquet space, as
well as traditional casino gaming offerings such as video poker,
slot machines, table games, bingo and race and sports wagering.
Station owns and operates Palace Station Hotel & Casino, Boulder
Station Hotel & Casino, Texas Station Gambling Hall & Hotel,
Sunset Station Hotel & Casino, Santa Fe Station Hotel & Casino,
Red Rock Casino Resort Spa, Fiesta Rancho Casino Hotel, Fiesta
Henderson Casino Hotel, Wild Wild West Gambling Hall & Hotel,
Wildfire Casino Rancho, Wildfire Casino Boulder, formerly known as
Magic Star Casino, Gold Rush Casino and Lake Mead Casino.  Station
also owns a 50% interest in Green Valley Ranch Station Casino,
Aliante Station Casino & Hotel, Barley's Casino & Brewing Company,
The Greens and Renata's Casino in Henderson, Nevada and a 6.7%
interest in the joint venture that owns the Palms Casino Resort in
Las Vegas, Nevada.  In addition, Station manages Thunder Valley
Casino near Sacramento, California on behalf of the United Auburn
Indian Community.


STATION CASINOS: Mulls Bankruptcy Filing with Pre-packaged Plan
---------------------------------------------------------------
Station Casinos Inc. is negotiating a pre-packaged Chapter 11
plan.

According to Bloomberg News, Station Casinos proposed a
prepackaged bankruptcy transaction and said some senior secured
lenders have agreed to support the plan.

"Investors were offered a combination of secured notes and
cash in exchange for existing bonds under the plan, which would
reduce the overall debt and interest burden, Bloomberg said,
citing an e-mailed statement by Station Casinos.

                     About Station Casinos

Station Casinos, Inc. is the leading provider of gaming and
entertainment to the residents of Las Vegas, Nevada. Station's
properties are regional entertainment destinations and include
various amenities, including numerous restaurants, entertainment
venues, movie theaters, bowling and convention/banquet space, as
well as traditional casino gaming offerings such as video poker,
slot machines, table games, bingo and race and sports wagering.
Station owns and operates Palace Station Hotel & Casino, Boulder
Station Hotel & Casino, Texas Station Gambling Hall & Hotel,
Sunset Station Hotel & Casino, Santa Fe Station Hotel & Casino,
Red Rock Casino Resort Spa, Fiesta Rancho Casino Hotel, Fiesta
Henderson Casino Hotel, Wild Wild West Gambling Hall & Hotel,
Wildfire Casino Rancho, Wildfire Casino Boulder, formerly known as
Magic Star Casino, Gold Rush Casino and Lake Mead Casino.  Station
also owns a 50% interest in Green Valley Ranch Station Casino,
Aliante Station Casino & Hotel, Barley's Casino & Brewing Company,
The Greens and Renata's Casino in Henderson, Nevada and a 6.7%
interest in the joint venture that owns the Palms Casino Resort in
Las Vegas, Nevada.  In addition, Station manages Thunder Valley
Casino near Sacramento, California on behalf of the United Auburn
Indian Community.


SUN COUNTRY AIRLINES: Reports 1st Profitable Q4 in 5 Years
----------------------------------------------------------
Sun Country Airlines announced a net income of $955,000 for the
fourth quarter of 2008.  This compares to an $18.0 million loss in
the fourth quarter of 2007 and represents the first profitable
fourth quarter in the past five years.

"Our 2008 financial results reflect a significant improvement
based upon the successful turnaround of Sun Country Airlines. This
success was achieved through the hard work and dedication of our
employees as well as the changes to our business model over the
past several months," said Stan Gadek, Chairman and CEO of Sun
Country Airlines.

"Based on current booking and revenue trends, we expect to be
profitable in first quarter and full year 2009," continued Gadek.
"While we were faced with numerous challenges, including record
high fuel prices, we successfully positioned the company for
profitability and growth going forward. We appreciate the
continued support of our Sun Country customers and look forward to
providing the superior level of service that Sun Country is known
for."

On a full year basis, Sun Country reported a loss of $21.4 million
which compares to a $35.0 million loss in 2007. For the second
half of 2008, Sun Country recorded net income of $412,000, which
compares to a net loss of $ 7.8 million in the second half of
2007.

                         About Sun Country

MN Airlines, LLC, d.b.a. Sun Country Airlines is based in St.
Paul, Minnesota. Sun Country, which has earned a reputation for
offering world class service at an affordable price, was recently
named in the "Top Ten Domestic Airlines" by Travel+Leisure and
Condé Nast Traveler for the third year in a row. The airline flies
to popular destinations in the U.S., Mexico and the Caribbean. For
a complete list of destinations and more information, please visit
www.SunCountry.com.

Sun Country Airlines Inc. dba MN Airlines LLC, and its debtor-
affiliates Petters Aviation LLC and MN Airline Holdings Inc. filed
separate petitions for Chapter 11 relief on Oct. 6, 2008 (Bankr.
D. Minn. Lead Case No. 08-45136).  Brian F. Leonard, Esq., Matthew
R. Burton, Esq., at Leonard O'Brien et al., represented the
Debtors as counsel.  When Petters Aviation LLC filed for
protection from its creditors, it listed assets of $50 million
and $100 million, and the same range of debts.


TALLYGENICOM LP: DIP Loan Has Loan and Sale Deadlines
-----------------------------------------------------
TallyGenicom LP was given interim permission by the U.S.
Bankruptcy Court for the District of Delaware to access debtor-in-
possession financing provided by Ableco Finance LLC.

The Court will hold another hearing, on Feb. 11, to consider final
approval of the $29.5 million financing.

Bloomberg's Bill Rochelle notes that the loan requires:

   -- an auction for the business by March 2; and

   -- the Court's approval of the sale by March 4.

As reported by the Troubled Company Reporter, TallyGenicom filed
for bankruptcy to effectuate the sale of certain of its U.S.-based
assets to Printronix Inc., a developer, manufacturer and provider
of industrial and back-office printing solutions.  TallyGenicom
has signed an agreement to sell its U.S. assets to Printronix for
$36,600,000, although the bid is still subject to higher and
better offers at an auction.  According to Bloomberg, Printronix's
bid includes of assumption of $23 million in secured debt, $6.75
million in warranty claims and $4 million in accounts payable.

The Court will also hear Feb. 11 the proposed auction protocol,
which provides that Printronix will be the lead bidder and will be
entitled to bid protections.

                    Other Terms of the Loan

TallyGenicom LP entered into a postpetition agreement dated
Jan. 27, 2009, with a syndicate of financial institutions
including (i) Ableco Finance LLC, A3 Funding LP, A4 Funding LP and
A5 Funding LP, as lenders; and (ii) Dymas Funding Company LLC, as
administrative agent for the lenders.

The proceeds of the DIP facility will be used to (i) pay related
fees and expenses; (ii) finance working capital and general
corporate purpose of the Debtors; (iii) pay administrative
expenses arising in the Debtors' Chapter 11 cases in accordance to
the proposed DIP budget.

The DIP facility will bear interest at 6.5% per annum plus the
greater of 4% and the Base Rate.  Accrued interest on the
postpetiton debt will be payable in arrears on the first day of
each calendar month and on the termination date.

To secure their debt obligations, the lenders will be granted
superpriority administrative expense status with priority over all
costs and expense of administration of the cases that are incurred
under any provision of the Bankruptcy Code.

The DIP facility is subject to carve-out to pay fees and expenses
incurred by professionals of the Debtors.

The lenders will be paid a closing fee in an amount equal to 2% of
the DIP facility that will be fully earn upon entry of the interim
order.

The postpetition agreement contains customary and appropriate
events of default.

A full-text copy of the Debtors' postpetition agreement dated
Jan. 27, 2009, is available for free at:

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

             Prepetition Senior Secured Indebtedness

The Debtors prepetition operations were primarily funded by a
secured credit facility under a financing agreement dated May 24,
2005, with Dymas Funding, which facility consists of:

   i) a $31.0 million secured term loan credit facility; and

  ii) a $12.0 million secured revolving credit facility.

As of the Debtors' bankruptcy filing, the aggregate principal
amount outstanding under the facility was about $38.0 million
comprised of a $13.3 million revolving credit facility and $23.7
million term loan facility excluding interest, costs, fees and
expenses and other charges.

In addition, the Debtors borrowed $8 million in second lien term
loan under an amended and restated subordinated promissory note
dated Jan. 18, 2008, with Arsenal Capital LP, Arsenal Capital
Partners Qualified Purchaser Fund LP, Arsenal Capital Partners
Executive Fund LP and ACPFIF LLC.  The promissory note is a
secured term loan which replaced in their entirety both (i) that
certain promissory noted dated Sept. 11, 2007, in a principal
amount of $1 million and (ii) certain promissory noted dated Sept.
26, 2007, in a principal amount of $2 million.  As of the Debtors'
bankruptcy filing, the aggregate principal amount outstanding
under the promissory notes was $8.11 million plus interest, cost,
fees, expenses and other charges.

                        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 propose Proskauer Rose LLP as
their special corporate counsel; CRG Partners Group LLC as
financial advisor; and Donlin Recano & Company Inc. as their
claims agent.

Suzzanne Uhland, Esq., at O'Melveny & Myers LLP, and Mark D.
Collins, Esq., at Richards, Layton & Finger, P.A., represent
Printronix Inc., the 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 to $50 million each.


THEATER XTREME: Uni Cap CEO Explains Side on Bankruptcy
-------------------------------------------------------
Michael Queen, Universal Capital Management, Inc.'s Chief
Executive Officer, sent an open letter to its shareholders
regarding Theater Xtreme's bankruptcy.

       Open Letter to Universal Capital Management Shareholders

       Dear Shareholders:

       As many of you know, Theater Xtreme filed Chapter 7
       bankruptcy in December, 2008.  My staff and I have been
       asked repeatedly if there was anything Universal Capital
       Management could have done to prevent that from happening.

       Universal signed a management contract with Theater to
       assist them from 2004 to 2005.  The company was one of our
       first holdings.  In its initial year of operations it
       gained strong momentum and had a promising future.  As a
       result, Theater no longer needed our management expertise
       and did not renew the contract.  However, the company
       remained in our portfolio and we remained available to
       them if the need arose.

       When Theater began taking on too much debt, they sought
       Universal's assistance once again.  We found them a turn-
       around CEO and sent our controller there as interim CFO to
       attempt to remedy the situation.  We even signed a new
       management agreement in July 2008.  Despite capital
       raises, the debt was insurmountable.  We helped negotiate
       a possible joint venture with Circuit City, but
       unfortunately both companies succumbed to a failing
       economy.  We are truly disappointed by the outcome.

       However, from a financial standpoint, the loss of TXEG
       from our balance sheet was very minimal.  As we continue
       to grow and add new companies to our portfolio, Universal
       will retain investments with tremendous growth potential.
       Some of the companies may be highly successful, others may
       be less profitable.  Some will make it, some will fail.

       Universal's business plan is structured to allow for
       minimal investing and maximum management assistance while
       enhancing each company's ability to raise funds in order
       to enter the public marketplace.  We believe that
       investing in Universal Capital Management is safer than
       investing directly into a portfolio company due to the
       diversity of risk.  Our value is determined by the
       totality of our companies, not just one.  If a single
       holding does well, it will have a positive impact on our
       value.  In turn, if one fails, there is a good chance the
       others will compensate for it.  The risk is there, but so
       is the potential for great rewards.  We currently have
       eight companies in our portfolio in an array of
       industries.  We select them based on extensive due
       diligence regarding both the company and the market they
       are geared to.  Each holds its own value.  We are very
       excited about these companies and will continue to report
       on their progress.

       If you review Universal's year-end financials for the past
       two years you will see an increased Net Asset Value (NAV).
       Although our Sales and Income have been overwhelmingly
       good, these are not the best indicators when judging a
       closed-end fund's performance.  We believe NAV is.  For
       updates on our portfolio companies, visit
       www.unicapman.com.

       Sincerely,

       Michael D. Queen
       President and CEO
       February 3, 2009

Universal Capital Management, Inc. -- http://www.unicapman.com--
is a publicly traded Business Development Company created under
the Investment Act of 1940.  Its purpose is to assist its
portfolio companies with funding and management to facilitate
growth and increase their value.

As reported by the Troubled Company Reporter on December 17, 2008,
Theater Xtreme Entertainment Group filed for Chapter 7 protection
with the U.S. Bankruptcy Court in the District of Delaware (Case
No. 08-13320).  The company disclosed in a regulatory filing with
the Securities and Exchange Commission that it has not obtained a
sufficient amount of funding to enable it to resume its
operations.  In light of current economic recessionary factors and
tight credit and capital markets, the company said it could make
any assurances that it will ever obtain such funding.  The company
discussed the matter with several of its major debt holders and
creditors in an attempt to formulate potential future courses of
action.

Xtreme Entertainment suspended operations and the employment of
all of its executive officers and employees effective as of the
close of business on December 2, 2008.  The company explained that
it has insufficient amount of cash on hand.  The company had hoped
that the suspension would be temporary.

On November 20, 2008, Theater Xtreme said it raised $795,000 in
investment capital by way of a senior unsecured convertible
debenture offering which closed in November 2008.  The net
proceeds to Theater Xtreme from the offering were approximately
$662,600 after attorney's fees, commissions, and expenses
allowances.  Allen, Goddard, McGowan, Pak & Partners, LLC served
as the financial representative for the offering.  No underwriters
were utilized in the offering.

On December 1, 2008, the company received a letter from Vincent P.
Pipia, whereby Mr. Pipia resigned as a member of the company's
board of directors effective November 24, 2008.

Theater Xtreme Entertainment Group, Inc. is a specialty retailer
of real movie theaters for the home.  Theater Xtreme operates one
company-owned store and has 10 franchises in 12 states.
Bankruptcy Data says the Debtor is represented by Tobey M. Daluz,
Esq., at Ballard Spahr Andrews & Ingersoll.

The company's balance sheet as of September 30, 2008, shows
$1.9 million in total assets, $6.1 million in total liabilities,
resulting in $4.2 million in stockholders' deficit.


TROPICANA ENTERTAINMENT: Opco Bank Debt Sells at 72% Discount
-------------------------------------------------------------
Participations in a syndicated loan under which the Tropicana Opco
entities are borrowers trade in the secondary market at 28.20
cents-on-the-dollar for the week ended January 30, 2009, according
to data compiled by Loan Pricing Corp. and reported in The Wall
Street Journal.  This represents an increase of 6.58 percentage
points from the previous week, the Journal relates.  Tropicana
Opco pays 250 basis points over LIBOR to borrow under the
facility.  The bank loan matures Jan. 3, 2012.  The bank loan is
not rated.

As reported by the Troubled Company Reporter on Feb. 3, 2009,
Tropicana Entertainment, LLC, said the lenders who funded its
acquisition of five casinos pre-bankruptcy are now undersecured
and will only receive up to 72.7% recovery for their
over $1.3 billion in claims.

Tropicana and its affiliated debtors have sought permission from
the U.S. Bankruptcy Court for the District of Delaware to halt
interest payments to the OpCo Lenders.

In exchange for their use of their lenders' cash collateral to
partly fund their Chapter 11 cases, Tropicana previously obtained
permission to make adequate protection payments to the Opco
Lenders, headed by Credit Suisse, as administrative agent and
collateral agent; Credit Suisse Securities (USA) LLC, as sole
bookrunner and sole lead arranger; Barc1ays Bank PLC and Societe
Generale, as co-lead arrangers and co-syndication agents; and The
Royal Bank of Scotland, PLC and INO Capital, LLC.

Before filing for bankruptcy protection, Tropicana, in 2007,
entered into credit facilities to finance its acquisition of Aztar
Corp.'s five casinos.  The OpCo Credit Facility -- an aggregate
US$1,710,000,000 secured credit facility provided by Credit Suisse
as collateral agent and administrative agent -- constituted the
largest portion of the Aztar Acquisition financing.  As of
April 30, 2008, about $1,300,000,000 of the principal amount was
outstanding under a term loan facility, and $21,000,000 under a
revolving facility.

However, according to Mark D. Collins, Esq., at Richards, Layton &
Finger, P.A., Tropicana has determined that the value of the OpCo
Lenders' collateral does not exceed their claims under the
Prepetition Financing Documents.  Consequently, the OpCo Lenders
are undersecured.

In January, Tropicana Entertainment and its affiliates filed a
Chapter 11 plan of reorganization for entities led by Tropicana
Entertainment, which own 10 casinos and resorts in Atlantic City,
New Jersey and Evansville, Indiana; (OpCo Plan), and another by
Tropicana Las Vegas Holdings, which own a resort in Las Vegas
(LandCo Plan).

Mr. Collins relates that the valuation analysis included in the
OpCo Disclosure Statement reflects the fact that the value of the
reorganized OpCo Debtors is not sufficient to satisfy the
OpCo Lenders' claims in full.  The Debtors estimate that the OpCo
Lenders are likely to recover between 58.1% and 72.7% of the value
of their claims if the OpCo Plan is continued and between 36% and
48% in a liquidation scenario, if the Debtors' cases me converted
to chapter 7 liquidations.

Mr. Collins notes that the ad hoc group of OpCo Lenders in the
case -- the steering committee for the OpCo Lenders -- has
admitted at a hearing before Judge Kevin J. Carey that the value
of the assets is much less than the amount of their claims.

Absent Court approval of the proposal, Tropicana will be required
to make payments totaling $44.3 million between February 1, 2009
and June 30, 2009.

The Bankruptcy Court will convene a hearing on Feb. 17 to consider
the request.  Objections are due Feb. 9.

                 About Tropicana Entertainment

Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC --
http://www.tropicanacasinos.com/-- is an indirect subsidiary of
Tropicana Casinos and Resorts.  The company is one of the largest
privately-held gaming entertainment providers in the United
States.  Tropicana Entertainment owns eleven casino properties in
eight distinct gaming markets with premier properties in Las
Vegas, Nevada, and Atlantic City, New Jersey.

Tropicana Entertainment LLC filed for Chapter 11 protection on
May 5, 2008, (Bankr. D. Del. Case No. 08-10856).  Its debtor-
affiliates filed for separate Chapter 11 petitions but with no
case numbers assigned yet.  Kirkland & Ellis LLP and Mark D.
Collins, Esq., at Richards Layton & Finger, represent the Debtors
in their restructuring efforts.  Their financial advisor is Lazard
Ltd.  Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC.  Epiq Bankruptcy Solutions LLC is the Debtors'
Web site administration agent.  AlixPartners LLP is the Debtors'
restructuring advisor.

Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell
LLP represent the Official Committee of Unsecured Creditors in
this case.  Capstone Advisory Group LLC is financial advisor to
the Creditors' Committee.

Bankruptcy Creditors' Service, Inc., publishes Tropicana
Bankruptcy News.  The newsletter tracks the chapter 11
restructuring proceedings commenced by  Tropicana Entertainment
LLC and its affiliates.  (http://bankrupt.com/newsstand/or
215/945-7000).


TOUSA INC: Court Amends 2nd Final Cash Collateral Order
-------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida
amended a second final order dated January 9, 2009, allowing TOUSA
Inc. and its affiliates to continue using their prepetition
lenders' cash collateral.

In December 2008, Red River/El Dorado 6500, L.L.C., Rancho Sierra
Vista, L.L.C., and Circle Cross Ranch, LLC, complained that the
language of the Second Final Cash Collateral Order was
insufficient to adequate address their concerns.  Red River
asserted that the Debtors failed to clarify the effect of the Cash
Collateral Order on their rights and interests.  Red River, et
al., previously pointed out that it is unclear whether the
language of the Second Interim Cash Collateral Order was intended
to affect their rights and interests, or to alter the provisions
of the First Cash Collateral Order concerning the Lien Challenge
Period.

Red River noted that upon discussions with the Debtors, the
parties agreed that Red River would be allowed to review and
approve the final order before it was lodged with the Court.
This, however, was not done, S. Cary Forrester, Esq., at
Forrester & Worth, PLLC, in Phoenix, Arizona, said, on Red
River's behalf.  Subsequently, when Red River brought this
concern to the Debtors and the Prepetition Secured Lenders, they
agreed to lodge an Amended Final Order, which will include the
clarifying language, among others.  Accordingly, Red River, et
al., filed a Motion to Amend the 2nd Cash Collateral Order to
preserve their rights under Federal Rules of Bankruptcy
Procedure.

In an attempt to address Red River's concerns, the Debtors
delivered to the Court on January 22, 2009, a redlined version of
a proposed Amended Second Final Cash Collateral Stipulated Order.
Specifically, the proposed Amended Order included:

  (A) language clarifying that Citicorp North America, N.A., as
      administrative agent to the Debtors' prepetition credit
      facilities; Wells Fargo Bank, N.A., successor
      administrative agent to Second Lien Credit Agreement; the
      First Lien Lenders; and the Second Lien Lenders are not
      consenting to the use of their Cash Collateral.  The
      Secured Lenders further object to the use of Cash
      Collateral to fund the expenses incurred from the action
      commenced by the Official Committee of Unsecured Creditors
      against the Lenders; and

  (B) language resolving the objection of Red River, Rancho
      Sierra and Circle Cross with respect to the cash
      collateral use.

Under the proposed 2nd Amended Cash Collateral Order, the parties
agree that:

  (i) the liens granted by the First Cash Collateral Order,
      Second Interim Cash Collateral Order and the Second
      Amended Final Cash Collateral Order, including the
      Adequate Protection Liens, do not prime the valid
      prepetition liens and interests, if any, of Red River,
      Rancho Sierra and Circle Cross; and

(ii) the language concerning the waiver and release of Claims
      and Defenses will have no effect on Red River's, Rancho
      Sierra's and Circle Cross' rights to defend any challenge
      to the validity, extent, priority, perfection or
      enforceability of their deeds of trust and covenants that
      run with the land.

Accordingly, by virtue of the submission of the proposed 2nd
Amended Final Cash Collateral Order, Red River, Rancho Sierra and
Circle Cross formally withdrew their Motion to Amend.

At the Debtors' behest, Judge John K. Olson signed the Second
Amended Final Cash Collateral Order on Jan. 28, 2009.

The Debtors also added a projected cash flow for April 2009 of
their estimated operating cash flow:

      Month ended       Est. Total Operating Cash Flow
      -----------       ------------------------------
      Dec. 2008                 ($18,470,000)
      Jan. 2009                 ($16,885,000)
      Feb. 2009                  ($9,501,000)
      Mar. 2009                  ($4,453,000)
      Apr. 2009                  ($2,919,000)

A full-text copy of the Five Month Budget is available for free
at http://bankrupt.com/misc/Tousa_CashCollBudgettilApr09.pdf

The Debtors also added projected operating cash for the period
from January through April 2009:

          Period          Minimum Operating Cash Flow
    -------------------   ---------------------------
    12/01/08 - 12/31/08            $18,528,000
    01/01/09 - 01/31/09            $18,078,000
    01/01/09 - 02/28/09            $23,772,000
    01/01/09 - 03/31/09            $24,418,000
    01/01/09 - 04/30/09            $22,928,000

A full-text copy of the Second Amended Final Cash Collateral
Order is available for free at:

    http://bankrupt.com/misc/Tousa_2ndAmFinCashColORD.pdf

                      About TOUSA Inc.

Headquartered in  Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic
U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark
Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading
homebuilder in the United States, operating in various
metropolitan markets in 10 states located in four major geographic
regions: Florida, the Mid-Atlantic, Texas, and the West.  TOUSA
designs, builds, and markets high-quality detached single-family
residences, town homes, and condominiums to a diverse group of
homebuyers, such as "first-time" homebuyers, "move-up" homebuyers,
homebuyers who are relocating to a new city or state, buyers of
second or vacation homes, active-adult homebuyers, and homebuyers
with grown children who want a smaller home.  It also provides
financial services to its homebuyers and to others through its
subsidiaries, Preferred Home Mortgage Company and Universal Land
Title Inc.

The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No. 08-10928).
The Debtors have selected M. Natasha Labovitz, Esq., Brian S.
Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at
Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger
Singerman, to represent them in their restructuring efforts.
Lazard Freres & Co. LLC is the Debtors' investment banker.  Ernst
& Young LLP is the Debtors' independent auditor and tax services
provider.  Kurtzman Carson Consultants LLC acts as the Debtors'
Notice, Claims & Balloting Agent.

TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008,
(Bankr. S.D. Fla. Case No.: 08-20746).  It listed assets between
$1 million and $10 million, and debts between $1 million and
$10 million.

The Official Committee of Unsecured Creditors hired Patricia A.
Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff &
Sitterson, P.A., as its local counsel.

TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets
of $1,734,422,756 and total liabilities of $2,300,053,979.

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


TOUSA INC: Sues Five Homeowners For Return of Property
------------------------------------------------------
Tousa Homes, Inc., doing business as Engle Homes South Florida,
filed with the U.S. Bankruptcy Court for the Southern District of
Florida separate adversary proceedings against SunTrust Bank, as
escrow agent, and these parties:

1. Kevin J. Collette
2. David J. and Ilene H. Gottlieb
3. Steven L. and Sheryl S. Levinson
4. Marc E. and Randi J. Jaro
5. Daniel M. and Heather M. Gottlieb

Under the individual Complaints, the Debtor seeks for the return
of certain property of its estate pursuant to Sections 541 and
542 of the Bankruptcy Code and Rule 7001 of the Federal Rules of
Bankruptcy Procedure.

Mr. Collette and the Debtor entered into a contract wherein the
Debtor will sell and construct a residence for Mr. Collette at
419 SW Lost River Road Stuart, in Martin County, Florida, for
$755,000.  Mr. Collette paid a $75,550 deposit for the Residence
and the Deposit was placed in an escrow account with SunTrust.
The Debtor completed construction of the Residence and scheduled
for its closing in October 2008.  Mr. Collette, however, failed
to close on the Residence and refused to consummate the purchase
of the Residence.

David and Ilene Gottlieb and the Debtor are parties to a contract
for the purchase of a residence to be constructed at 3838 NW 88
Terrace, Cooper City, in Broward County, Florida, for a total
purchase price for $694,490.  The Gottliebs paid a $69,449
deposit for the Residence.  The Deposit was placed in an escrow
account with SunTrust.  The Debtor completed the construction of
the Residence and scheduled for its closing in July 2008.  The
Gottliebs, however, failed to close on the Residence and refused
to consummate the purchase of the Residence.

Similarly, the Levinsons and the Debtor are parties to a contract
for the sale and purchase of a residence to be constructed at
15644 Glencrest Avenue, Delray Beach, in Palm Beach County,
Florida for $588,240.  The Levinsons paid a $58,824 deposit for
the Residence, which was placed in an escrow account with
SunTrust.  The Debtor completed the construction of the Residence
and scheduled for its closing in June 2008.  The Levinsons failed
to close the Residence and refused to consummate the purchase of
the Residence.

The Jaros and the Debtor entered into a contract for the sale and
purchase of a residence to be constructed in 16036 Glencrest
Avenue, Delray Beach, in Palm Beach County, Florida for $498,995.
The Jaros paid a $49,899 deposit for the Residence, which was
placed in an escrow account with SunTrust.  The Debtor completed
construction of the Residence and scheduled for its closing in
November 2008.  The Jaros, however, failed to close on the
Residence and refused to consummate the sale transaction of the
Residence.

In addition, Daniel and Heather Gottlieb and the Debtor entered
into a contract for the sale and purchase of a residence to be
constructed at 3530 NW 87 Avenue, Cooper City, in Broward County,
Florida for $696,490.  Daniel and Heather Gottlieb paid a $69,649
deposit for the Residence, which was placed in an escrow account
with SunTrust.  The Debtor completed the construction of the
Residence and scheduled for its closing in February 2008.  Daniel
and Heather Gottlieb, however, failed to close on the Residence
and refused to consummate the purchase of the Residence.

James P.S. Leshaw, Esq., at Greenberg Traurig, P.A., in West Palm
Beach, Florida, relates that under the Contracts, the Debtor is
entitled to retain the Deposits as liquidated damages upon the
Potential Purchasers' breach of the Contracts.  The Contracts
require the Potential Purchasers to purchase the Residences.
Each Potential Purchaser, however, breached the Contract by
refusing to close upon the sale transaction.  The Potential
Purchasers' failure to close on the Residences and failure to
purchase the Residences constitute a default under the Contracts,
Mr. Leshaw asserts.  The Debtor has suffered and continues to
suffer damages as a result of the Potential Purchasers' breach of
the Contracts, he points out.

Pursuant to Section 541(a)(1), the Deposits are a property of the
Debtor's estate by virtue of the Potential Purchasers' default
under the Contracts.  The Debtor is entitled to a declaratory
judgment that the Deposits are property of its estate under
Section 541, Mr. Leshaw contends.  Moreover, under Section
542(a), the Deposits are not of inconsequential value or benefit
to the Debtor's estate.  The Debtor is thus entitled to an order
and judgment under Section 542 directing SunTrust, as escrow
agent, to release and turnover the Deposits to the Debtor, Mr.
Leshaw adds.

Accordingly, the Debtor asks the Court for:

  (a) an order declaring that the Deposits are a property of its
      estate under Section 541;

  (b) a judgment against the Potential Purchasers with respect
      to the Deposits, plus interest;

  (c) an order directing SunTrust, as escrow agent, to release
      the escrowed Deposits, plus all accrued interest; and

  (d) an order against the Purchasers, awarding the Debtor of
      its attorney's fees and costs pursuant to Section
      501.01375 of the Revised Florida Statutes.

                      About TOUSA Inc.

Headquartered in  Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic
U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark
Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading
homebuilder in the United States, operating in various
metropolitan markets in 10 states located in four major geographic
regions: Florida, the Mid-Atlantic, Texas, and the West.  TOUSA
designs, builds, and markets high-quality detached single-family
residences, town homes, and condominiums to a diverse group of
homebuyers, such as "first-time" homebuyers, "move-up" homebuyers,
homebuyers who are relocating to a new city or state, buyers of
second or vacation homes, active-adult homebuyers, and homebuyers
with grown children who want a smaller home.  It also provides
financial services to its homebuyers and to others through its
subsidiaries, Preferred Home Mortgage Company and Universal Land
Title Inc.

The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No. 08-10928).
The Debtors have selected M. Natasha Labovitz, Esq., Brian S.
Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at
Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger
Singerman, to represent them in their restructuring efforts.
Lazard Freres & Co. LLC is the Debtors' investment banker.  Ernst
& Young LLP is the Debtors' independent auditor and tax services
provider.  Kurtzman Carson Consultants LLC acts as the Debtors'
Notice, Claims & Balloting Agent.

TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008,
(Bankr. S.D. Fla. Case No.: 08-20746).  It listed assets between
$1 million and $10 million, and debts between $1 million and
$10 million.

The Official Committee of Unsecured Creditors hired Patricia A.
Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff &
Sitterson, P.A., as its local counsel.

TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets
of $1,734,422,756 and total liabilities of $2,300,053,979.

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


TOUSA INC: Begins Review of $7.2 Billion in Filed Claims
--------------------------------------------------------
As of December 31, 2008, about 4,000 proofs of claim have been
filed against TOUSA Inc. and its affiliates, aggregating
$7.2 billion.  The filed proofs of claim comprise of:

      * $1.1 million in administrative claims,
      * $186 million in secured claims,
      * $75 million in priority claims, and
      * $7 billion in unsecured claims.

In addition, more than 1,400 claims have been asserted in
unliquidated amounts.

In light of the significant number of the Claims that have been
asserted in these Chapter 11 cases, preparing and filing
individual pleadings for each objection to a Claim would be
extremely time consuming and expensive, the Debtors say.

Accordingly, the Debtors ask the U.S. Bankruptcy Court for the
Southern District of Florida to establish uniform procedures to
govern the claims objection process and claims settlements.

The Debtors propose to file omnibus objections to claims that
will identify all claims to which they object and the bases for
each objection.  Each Omnibus Objection will include a schedule
that will list all Disputed Claims and will set forth (i) the
official claim number, (ii) the name and address of the
Claimholder, (iii) the asserted amount of the Claim, (iii) the
asserted priority or security status of the Claim, (iv) the
specific Debtor to which the Claim is asserted, and (v) the
amount the Debtors propose as an allowed amount of the Claim.
Each Omnibus Objection, including the Objection Schedule, will be
filed with the Court and served on the Official Committee of
Unsecured Creditors and the U.S. Trustee for Region 21.  The
Debtors will send each holder of a Disputed Claim an individual
notice of the claim objection.  The Individual Objection will
identify (i) the name of the Claimant, (ii) the claim number,
(iii) the name of the Debtor against which the Claim is asserted,
and (iv) the basis of the Objection along with the response date
and procedures.

Any response a Claimant files to a Claim Objection must contain,
among the others, the name of the Claimant and the claim number,
the basis for the amount underlying the Claim and a statement why
the Court should not sustain the Objection.  The Response must be
served within 30 days after service of the Individual Objections
or the Claim will be disallowed, reduced, reclassified or treated
consistent with the Claim Objections without further notice or
hearing.  The Debtors may file a reply to any Response to an
Individual Objection up to three days before any hearing
scheduled on the Individual Objection.

If a Response to the Objection is timely filed, the Debtors will
review the Response and enter into negotiations with the Claimant
for a resolution of the Objection.  If, in its Response, the
Claimant fails to include copies of all documents supporting the
Claim, the Claimant will have 10 days from the Debtors' written
request to provide documentation.  Failure of the Claimant to
provide the documentation will result to subject the Claim being
disallowed, reduced or treated in accordance to the Objections
without further notice or hearing.  Upon review of the Claims to
which Responses have been filed, the Debtors may amend or
withdraw their Objections to the Claims to the extent
communications with the Claimants lead the Debtors to conclude
that those Claims are valid.  In the event the Debtors and the
Claimant reach a consensual resolution of the Claim, the Debtors
will provide notice of that resolution to the Committee and the
U.S. Trustee and will present the agreed claim treatment at the
next scheduled Omnibus Claims Objection Hearing.

If a Claimant timely files and serves a Response, and if the
Claimant and the Debtors are unable to agree on a consensual
treatment of the Claim, then the Debtors may schedule a hearing
on the Claim along with other unresolved claims.

The Debtors will have the right to negotiate and settle Disputed
Claims.  The Committee and the U.S. Trustee will have five days
after service of notice to object to or ask for additional time
to evaluate the proposed settlement.  If no objection for
additional time is received, the Debtors will be authorized to
enter into the proposed settlement.  If the Committee or the U.S.
Trustee timely objects to the proposed settlement, the Debtors
and the Committee will consensually resolve the objection to the
proposed settlement.  If the parties fail to achieve a consensual
resolution, the Debtors will not proceed with the proposed
settlement but may seek Court approval of the proposed
settlement.

The Debtors note that the proposed Claim Objection Procedures
recognize that recoveries to unsecured creditors in their Chapter
11 cases will likely depend on the outcome of the Adversary
Complaint commenced by the Official Committee of the Unsecured
Creditors against the Debtors' Prepetition Lenders as well as
certain other potential litigation recoveries.  The Claims
Procedures, the Debtors maintain, are designed to strike a
balance between the desire to avoid expending time and money
resolving and objecting to unsecured claims that may get little
or no recovery and the need to preserve evidence with respect to
claims objections the Debtors would wish to prosecute.

The Debtors believe that the Claims Objection Procedures will:

  (a) preserve the Claimants' due process protections in the
      claims objection process;

  (b) provide greater certainty in administering the claims
      objection process;

  (c) assist in streamlining the prosecution of claims
      objections;

  (d) assist in administering the discovery and hearing process
      relating to any contested Objections;

  (e) promote the consensual resolution of Claims without
      litigation;

  (f) establish and efficient mechanism to implement the
      settlement of Claims, while providing appropriate notice
      to parties-in-interest depending on the size and nature of
      the settlement; and

  (g) help minimize the expense, delay and uncertainty in the
      claims objection and settlement process.

                      About TOUSA Inc.

Headquartered in  Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic
U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark
Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading
homebuilder in the United States, operating in various
metropolitan markets in 10 states located in four major geographic
regions: Florida, the Mid-Atlantic, Texas, and the West.  TOUSA
designs, builds, and markets high-quality detached single-family
residences, town homes, and condominiums to a diverse group of
homebuyers, such as "first-time" homebuyers, "move-up" homebuyers,
homebuyers who are relocating to a new city or state, buyers of
second or vacation homes, active-adult homebuyers, and homebuyers
with grown children who want a smaller home.  It also provides
financial services to its homebuyers and to others through its
subsidiaries, Preferred Home Mortgage Company and Universal Land
Title Inc.

The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No. 08-10928).
The Debtors have selected M. Natasha Labovitz, Esq., Brian S.
Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at
Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger
Singerman, to represent them in their restructuring efforts.
Lazard Freres & Co. LLC is the Debtors' investment banker.  Ernst
& Young LLP is the Debtors' independent auditor and tax services
provider.  Kurtzman Carson Consultants LLC acts as the Debtors'
Notice, Claims & Balloting Agent.

TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008,
(Bankr. S.D. Fla. Case No.: 08-20746).  It listed assets between
$1 million and $10 million, and debts between $1 million and
$10 million.

The Official Committee of Unsecured Creditors hired Patricia A.
Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff &
Sitterson, P.A., as its local counsel.

TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets
of $1,734,422,756 and total liabilities of $2,300,053,979.

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


TVI CORP: BB&T Extends Forbearance Agreement to April 30
--------------------------------------------------------
TVI Corporation discloses that the forbearance period under the
Company's forbearance agreement with Branch Banking & Trust
Company has been extended through April 30, 2009. BB&T concurred
that TVI satisfied the requirements of the November 20, 2008
forbearance agreement, scheduled to expire January 30, 2009,
qualifying the Company for the three-month extension.

The terms of the forbearance agreement included $3.5 million of
additional capital for TVI and a deferral of TVI's obligation to
make regularly scheduled principal loan payments in exchange for
certain financial and non-financial terms and other agreements.
The extension provides TVI the short-term operating funding needed
to continue its turnaround and improve its operating results. It
also allows TVI additional time to address its loan covenants and
prepare arrangements for a longer-term financial restructuring.
"BB&T continues to be a valuable and supportive lender to TVI, and
we are grateful for the forbearance agreement extension," said Lt.
General Harley A. Hughes, USAF (Ret.), TVI's President and CEO.
"The additional 90 days provides us with even more flexibility to
proceed with our turnaround and to pursue the most effective long-
term growth strategy for our company."

                     About TVI Corporation

Headquartered in Glenn Dale, Maryland, TVI Corporation (TVIN) --
http://www.tvicorp.com/-- is an international supplier of
military and civilian emergency first responder and first receiver
products, personal protection products and quick-erect shelter
systems.  These products include powered air-purifying
respirators, respiratory filters and quick-erect shelter systems
used for decontamination, hospital surge systems and command and
control.  The users of these products include military and
homeland defense/homeland security customers.


U.S. ENERGY: To Sell USEB's Asset to Silver Point for $94.5 Mil.
----------------------------------------------------------------
The Hon. Robert D. Drain of United States Bankruptcy Court for the
Southern District of New York approved bidding procedures for the
sale of substantially all assets of U.S. Energy Biogas Corp.
proposed by U.S. Energy Systems Inc. and its debtor-affiliates,
subject to competitive bidding and auction.

Silver Point Finance LLC, the designated stalking-horse bidder,
agreed to purchase USEB's assets for about $94.5 million
including:

   a) the assumption of the entire amount of the outstanding USEB
      indebtedness, which amount currently is $83.8 million, but
      is subject to adjustment prior to closing in accordance
      with the terms of the USEB indebtedness;

   b) the assumption of the entire outstanding amount under the
      Net Profit Interest agreement dated May 31, 2007, between
      the Debtors and Silver Point, which amount will be fixed
      solely for purposes of calculating the purchase price at
      $5.8 million;

   c) the assumption or release of at least $500,000 of the U.S.
      Energy Overseas Investments LLC indebtedness in accordance
      with the terms of the USEO indebtedness;

   d) cash in the amount of $100,000 payable by wire transfer
      of immediately available funds made to the account of USEY
      designated in writing by the company on behalf of USEY to
      proposed purchaser at least two business days prior to the
      closing date;

   e) the assumption of the reasonable, documented administrative
      expenses of the Debtors under Section 503(b)(1) of the
      Bankruptcy Code in the USEB bankruptcy Case, regardless of
      whether incurred prior to or after the consummation of the
      transactions contemplated by the agreement plus reasonable,
      documented administrative expenses of USEY and the Debtors
      under Section 503(b)(1) of the Bankruptcy Code in the
      USEY bankruptcy case, provided that in no event will the
      administrative expenses assumed and payable by Silver
      Point hereunder exceed $4.3 million in the aggregate; and

   f) the assumption of the other assumed liabilities listed in
      the asset purchase agreement dated Jan. 23, 2009.

Bids for USEB's assets plus a $5 million good faith deposit must
be submitted by March 9, 2009, at 12:00 p.m. (prevailing Eastern
Time) followed by an auction on March 12, 2009, at 10:00 a.m.
(prevailing Eastern Time) at the offices of Hunton & Williams LLP
at 200 Park Avenue in New York.  Sale hearing to consider approval
will take place on March 13, 2009, at 10:00 a.m. (prevailing
Eastern Time).  Objections to the sale, if any, are due March 10,
2009.

Silver Point will be paid $3.0 million break-up fee if the Debtors
consummate the sale of USEB's asset to another party under the
sale agreement.

Jefferies & Company Inc., investment and financial advisory firm,
will assist and advice the Debtors for the sale of USEB's assets.

A full-text copy of the Debtors' asset purchase agreement is
available for free at: http://ResearchArchives.com/t/s?390b

                     About U.S. Energy Systems

Based in Avon, Connecticut, U.S. Energy Systems, Inc., (Pink
Sheets: USEY) -- http://www.usenergysystems.com/-- owns green
power and clean energy and resources.  USEY owns and operates
energy projects in the United States and United Kingdom that
generate electricity, thermal energy and gas production.  The
company filed for Chapter 11 protection on Jan. 9, 2008 (Bank.
S.D. N.Y. Case No. 08-10054).  Subsequently, 34 affiliates filed
separate Chapter 11 petitions.  Peter S. Partee, Esq., at
Hunton & Williams LLP, represents the Debtor in its restructuring
efforts.  Jefferies & Company, Inc., serves as the company's
financial advisor.  The Debtor selected Epiq Bankruptcy Solutions
LLC as noticing, claims and balloting agent.  The Official
Committee of Unsecured Creditors has yet to be appointed in these
cases by the U.S. Trustee for Region 2.  When the Debtors filed
for protection from their creditors, they listed total assets of
$258,200,000 and total debts of $175,300,000.

On Jan. 23, 2009, U.S. Energy Biogas Corp and eight of its
subsidiaries filed their respective voluntary petitions for relief
under chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court for the Southern District of New
York.  The USEB Debtors' cases are being jointly administered for
procedural purposes with the cases of the USEY Debtors.


U.S. ENERGY: Gets More Time To File Schedules and Statements
------------------------------------------------------------
The Hon. Robert D. Drain of United States Bankruptcy Court for
the Southern District of New York granted U.S. Energy Systems Inc.
and its debtor-affiliates an additional 15 days extension of time
from U.S. Energy Biogas Inc.'s bankruptcy filing to file their
schedules of assets and liabilities, and statements of financial
affairs.

The Debtors told the Court that the initial period within which to
filed schedules and statements is not sufficient give the natured
of USEB's business and limited personnel available to perform the
required internal review of USEB's affairs.

                     About U.S. Energy Systems

Based in Avon, Connecticut, U.S. Energy Systems, Inc., (Pink
Sheets: USEY) -- http://www.usenergysystems.com/-- owns green
power and clean energy and resources.  USEY owns and operates
energy projects in the United States and United Kingdom that
generate electricity, thermal energy and gas production.  The
company filed for Chapter 11 protection on Jan. 9, 2008 (Bank.
S.D. N.Y. Case No. 08-10054).  Subsequently, 34 affiliates filed
separate Chapter 11 petitions.  Peter S. Partee, Esq., at
Hunton & Williams LLP, represents the Debtor in its restructuring
efforts.  Jefferies & Company, Inc., serves as the company's
financial advisor.  The Debtor selected Epiq Bankruptcy Solutions
LLC as noticing, claims and balloting agent.  The Official
Committee of Unsecured Creditors has yet to be appointed in these
cases by the U.S. Trustee for Region 2.  When the Debtors filed
for protection from their creditors, they listed total assets of
$258,200,000 and total debts of $175,300,000.

On Jan. 23, 2009, U.S. Energy Biogas Corp and eight of its
subsidiaries filed their respective voluntary petitions for relief
under chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court for the Southern District of New
York.  The USEB Debtors' cases are being jointly administered for
procedural purposes with the cases of the USEY Debtors.


VITRO SAB: Grace Period to Make $44.8MM Payments Ends March 4
-------------------------------------------------------------
Vitro, S.A.B. de C.V.'s deadline to make scheduled interest
payments of $12.9 million dollars on its 8.625% Senior Notes due
2012 and $31.9 million dollars on its 9.125% Senior Notes due
2017, expired February 2.

The company has a 30 day-grace period to make the interest
payments.  Non-payment within the 30-day period would constitute a
separate event of default under the indentures governing the 2012
Notes and the 2017 Notes.

Vitro said Jan. 29 that four of the counterparties have provided
notice, invoking the agreements governing derivative financial
instruments, stating that the failure of the company to pay an
aggregate of approximately $293 million dollars -- including
approximately $80 million held as cash collateral by such
Counterparties -- constitutes events of default under the DFI
Agreements, and have effectively demanded payment of such amounts.
As of December 31, 2008, the company  had a net loss of
approximately  $358 million dollars, including a loss of
approximately $33 million dollars related to the only open
derivative financial instruments covering natural gas contracts
from 2009-2011 with Pemex.

The events of default under the DFI Agreements result in an event
of default under the indentures governing the Senior Notes, as
described below and the 11.75% Senior Notes due 2013, enabling the
trustees of such Notes, or with respect to each of the 2012 Notes,
the 2017 Notes, and the 2013 Notes, the holders of 25% or more in
principal amount of such Notes, to declare the $300 million
dollars principal amount (and accrued interest) of the 2012 Notes,
the $700 million dollars principal amount (and accrued interest)
of the 2017 Notes, respectively and the $216 million dollars
principal outstanding amount (and accrued interest) of the 2013
Notes, to be immediately due and payable.

The failure of the company to make the payments due under the DFI
Agreements also results in events of default under various other
financing agreements of the Company and its subsidiaries,
aggregating approximately $81 million dollars and permitting
lenders under such facilities to declare borrowings under these
agreements to be immediately due and payable. In addition, the
Company and its subsidiaries are also in default under loan
agreements of approximately $17 million dollars, and the Lenders
may declare such debt to immediately due and payable. As of
December 31, 2008, the Counterparties held an aggregate of
approximately $85 million dollars (not including accrued
interest), as cash collateral for the obligations of the Company
and/or its subsidiaries under the DFI Agreements.

In light of these four Counterparties notices and in order to
preserve the necessary cash to continue operations, the company
said it does not intend to make scheduled payments due February 2,
2009 of interest of $12.9 million dollars on its 8.625% Senior
Notes due 2012 and $31.9 million dollars on its 9.125% Senior
Notes due 2017.  The failure of the Company to make the interest
payments within 30 days after the scheduled payment date would
constitute a separate event of default under the indentures
governing the 2012 Notes and the 2017 Notes.

Vitro intends to maintain its operations and continue its business
relationships with its customers and suppliers as it seeks to
achieve a restructuring of its indebtedness. As of December 31,
2008, the Company had unrestricted cash on hand and cash
equivalents of approximately $103 million dollars, for operating
costs and expenses.

Vitro has initiated discussions with the Counterparties, its
bondholders and its creditors to achieve an organized financial
restructuring to improve its balance sheet and it continues to
analyze its alternatives in regard with the DFI Agreements. There
can be no assurance that the Company's discussions with the
Counterparties, its bondholders, and other creditors will be
successful. Vitro will provide information, from time to time, as
appropriate, about developments of these discussions with the
Counterparties, its bondholders, and its creditors.

The Company has adopted a significant and focused cost reduction
plan, which includes reducing the Company's workforce, canceling
airplane leasing contracts, divesture of non productive assets and
eliminating the outsourcing of non-strategic services, as part of
the measures that have been adopted by the Company to improve its
Balance Sheet. It is estimated that these initiatives, as well as
those aimed at reducing operating costs, drastically reducing
corporate expenses and improve efficiency, will represent annual
savings between $80 and $120 million dollars. Vitro is confident
that it is taking the right steps to position the Company for the
future.

                           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'.


VOLUME SERVICES: Moody's Confirms Caa1 Rating on Kohlberg Merger
----------------------------------------------------------------
Moody's Investors Service confirmed all the ratings of Volume
Services America Inc.'s, including its Corporate Family Rating of
Caa1, after the company completed a merger with an affiliate of
Kohlberg & Company.  The rating outlook is stable.  This concludes
the review of ratings initiated on
December 15, 2008.

All ratings will be subsequently withdrawn because of the
reorganization (due to change of control).

Rating actions are:

  * Corporate Family Rating -- Caa1, confirmed and will be
    withdrawn

  * Probability of Default Rating -- Caa1, confirmed and will be
    withdrawn

  * Senior Secured Credit Facilities - B3 (LGD3, 35%), confirmed
    and will be withdrawn

  * Rating Outlook -- stable and will be withdrawn

  * Speculative Liquidity Rating -- SGL-4, will be withdrawn

The last rating action was on December 15, 2008 when all ratings
were placed under review, direction uncertain, while SGL was
affirmed at SGL-4.

Volume Services America, Inc. is the rated subsidiary of
Centerplate, Inc. which operates concession, catering and
merchandise services in sports facilities, convention centers and
other entertainment facilities.  Centerplate, the ultimate parent
of Volume Services, Inc. and Service America Corporation, has its
principal executive office in Stamford, Connecticut and a
corporate office in Spartanburg, South Carolina.  Through these
subsidiaries, Centerplate generated revenues totaling
approximately $741 million during fiscal 2007.


WASHINGTON MUTUAL: Court Sets March 31 Bar Date for All Claims
--------------------------------------------------------------
Washington Mutual, Inc. and WMI Investment Corp. obtained approval
of its request to set March 31, 2009, as the deadline for all
persons or entities, including governmental units, to file
prepetition proofs of claim against them in their Chapter 11
cases.

Washington Mutual also proposed to the U.S. Bankruptcy Court for
the District of Delaware to require claims arising from the
rejection of an executory contract or unexpired lease to be filed
on or before the later of (i) March 31, 2009, or (ii) 20 days
after the effective date of the rejection.

Washington Mutual's proposed procedures exempt from filing proofs
of claim holders of claims for repayment of outstanding principal
or interest arising under, or with respect to, unsecured notes.
The indenture trustees will file claims for holders of the notes.
The notes consist of:

     Principal Amt.
     as of Date                     Description            Due
     of Issuance       CUSIP        of Notes               Date
     --------------    -----        -----------            ----
     $1,000,000,000    939322AL7    4.00% Fixed Rate       2009
        500,000,000    939322AW3    Floating Rate          2009
        600,000,000    939322AP8    4.2% Fixed Rate        2010
        250,000,000    939322AQ6    Floating Rate          2010
        500,000,000    939322AE3    8.250% Subordinated    2010
        400,000,000    939322AX1    5.50% Fixed Rate       2011
        400,000,000    939322AT0    5.0 Fixed Rate Notes   2012
        450,000,000    939322AS2    Floating Rate          2012
        500,000,000    939322AU7    Floating Rate          2012
        750,000,000    939322AN3    4.625% Subordinated    2014
        750,000,000    939322AV5    5.25% Fixed Rate       2017
        500,000,000    939322AY9    7.250% Subordinated    2017
        N/A            N/A          Trust PIERS            2041

     Trust PIERS refers to Trust Preferred Income Equity
     Redeemable Securities Units issued by Washington Mutual
     Capital Trust 2001.

The proposed procedures also required holders of claims that are
scheduled as disputed, contingent or unliquidated to file proofs
of claim.  Roberta A. DeAngelis, the Acting United States Trustee
for Region 3, said that she is "mindful" of the administrative
burden associated with the filing of proofs of claim by the
Debtors' creditor body, specifically the 7,000 claims that are
listed in the Debtors' schedules as employee compensation and
benefit claims.  Ms. DeAngelis asserts that the Claims are listed
as contingent, liquidated and disputed because Washington Mutual
Bank may be primarily liable for the plan-related obligations in
light of the Debtors' records, which reflect that certain of the
plan-related liabilities were attributable to, or listed on,
WMB's books.  In addition, she says, it is unclear whether
JPMorgan Chase, as WMB's acquirer, assumed some or all of the
scheduled obligations.  Ms. DeAngelis adds that she is "presently
considering the Debtors' position with regard to the manner in
which Employee Claims have been scheduled."

JPMorgan Chase, on the other hand, opposed the March 31 deadline,
insisting that it needs more time to continue its ongoing efforts
to understand and evaluate the claims and assets it has acquired
from the Federal Deposit Insurance Corporation in its capacity as
receiver for WMB.  Adam G. Landis, Esq., at Landis Rath & Cobb
LLP, in Wilmington, Delaware, told the Court that setting the
Claims Bar Date to March 31, 2009, would be "shoehorning" the
complex issues regarding jurisdiction, competing insolvency
regimes, ownership of assets and setoff rights into the claims
adjudication process in the Debtors' cases.

                  About Washington Mutual

Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- is a holding company for Washington Mutual
Bank as well as numerous non-bank subsidiaries.  The company
operates in four segments: the Retail Banking Group, which
operates a retail bank network of 2,257 stores in California,
Florida, Texas, New York, Washington, Illinois, Oregon, New
Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and
Connecticut; the Card Services Group, which operates a nationwide
credit card lending business; the Commercial Group, which conducts
a multi-family and commercial real estate lending business in
selected markets, and the Home Loans Group, which engages in
nationwide single-family residential real estate lending,
servicing and capital markets activities.

Washington Mutual Bank was taken over Sept. 25 by U.S. government
regulators.  The next day, WaMu and its debtor-affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively).  Wamu owns
100% of the equity in WMI Investment.  Weil Gotshal & Manges
represents the Debtors as counsel. When WaMu filed for protection
from its creditors, it listed assets of $32,896,605,516 and debts
of $8,167,022,695.  WMI Investment listed assets of $500,000,000
to $1,000,000,000 with zero debts.

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


WII COMPONENTS: Eroding Earnings Prompt Moody's Junk Rating
-----------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating and probability of default rating for WII Components Inc.
to Caa1 from B2 and the ratings on its senior unsecured notes due
2012 to B3 from B1 as a result of its declining operating
performance and a weakened liquidity profile.  The rating outlook
remains negative.

The rating downgrade reflects WII's ongoing earnings
deterioration, challenging end market conditions and the resulting
impact on cash flow generation, leverage and interest coverage
metrics.  Further, Moody's believes that the continued
deterioration of credit protection metrics will pressure covenant
compliance over the near term as the precipitous drop in demand
weighs on both sales and margins.

The negative ratings outlook reflects Moody's view that WII's
reliance on residential construction and remodeling expenditures
in the U.S. will pressure demand for its core cabinet products in
the near term given the decline in household wealth and reduced
access to consumer borrowings across the U.S.  As a result, the
deterioration of credit metrics witnessed over the past 18 months
is expected to continue.  Moody's believes that the company's
reduced scale will make it increasingly difficult to maintain cash
flow levels over the near term.

While cash flows have historically been positive, Moody's believes
that recent operating declines and existing interest requirements
will weaken the company's liquidity profile in 2009.  Moody's
anticipates that available cash will likely be used, in part, to
fund 2009 interest payments and possibly debt reduction.  Moody's
notes that the company does not generally rely on its revolver,
however, failure to meet current expectations increases the
likelihood that revolver usage will occur during the second half
of 2009.

These ratings were downgraded:

  -- Corporate family rating, downgraded to Caa1 from B2

  -- Probability of Default, downgraded to Caa1 from B2; and

  -- Senior Unsecured Notes, due 2012, downgraded to B3 (LGD3 --
     34%) from B1 (LGD3 -- 32%).

The last rating action on WII Components was the change in outlook
to Negative from Stable on May 29, 2008.

WII is a leading manufacturer of hardwood cabinet doors and
related components in the United States, selling primarily to
kitchen and bath cabinet original equipment manufacturers.
Revenues for the twelve months ending September 30, 2008 were
$214 million.


WORLDSPACE INC: AfriSpace Inc. Files Amended Schedules
------------------------------------------------------
AfriSpace, Inc. a debtor-affiliate of WorldSpace, Inc., filed with
the U.S. Bankruptcy Court for the District of Delaware, an amended
schedule of its assets and liabilities, disclosing:

     Name of Schedule               Assets        Liabilities
     ----------------               ------      -------------
  A. Real Property
  B. Personal Property              $7,477
  C. Property Claimed as
     Exempt
  D. Creditors Holding                            $72,987,617
     Secured Claims
  E. Creditors Holding                                $68,454
     Unsecured Priority
     Claims
  F. Creditors Holding                           $221,252,554
     Unsecured Non-priority
     Claims
                                    ------       ------------
TOTAL                               $7,477       $294,308,625

WorldSpace, Inc. (WSI) -- http://www.1worldspace.com/-- and its
debtor- and non-debtor affiliates provide satellite-based radio
and data broadcasting services to paying subscribers in ten
countries throughout Europe, India, the Middle East, and Africa.
The Debtors and their affiliates operate two geostationary
satellites, AfriStar and Asia Star, which are in orbit over Africa
and Asia.  The Debtor and two of its affiliates filed for Chapter
11 bankruptcy protection on Oct. 17, 2008 (Bankr. D. Del., Case
No. 08-12412 - 08-12414).  James E. O'Neill, Esq., Laura Davis
Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl
& Jones, LLP, represent the Debtors as counsel.

The U.S. Trustee for Region 3 appointed creditors to serve on an
Official Committee of Unsecured Creditors.  Neil Raymond Lapinski,
Esq., and Rafael Xavier Zahralddin-Aravena, Esq., at Elliot
Greenleaf represent the Committee as counsel.


WORLDSPACE INC: Committee May Retain Arent Fox as Counsel
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware granted the
Official Committee of Unsecured Creditors appointed in Worldspace,
Inc., and its debtor-affiliates' bankruptcy cases permission to
retain Arent Fox LLP as its counsel, nunc pro tunc to Oct. 29,
2008.

As the Committee's counsel, Arent Fox will:

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

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

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

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

  e) assist the Committee in the review, analysis and negotiation
     of any lan of reorganization or liquidation that may be
     filed and to assist the Committee in the review, analysis
     and negotiation of the disclosure statement accompanying any
     plan of reorganization or liquidation;

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

  g) take all necessary action to protect and preserve the
     interests of the Committee, including, without limitation,
     the prosecution of actions on its behalf, negotiations
     concerning all litigation in which the Debtors are involved,
     and review and analysis of all claims filed against the
     Debtors;

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

  i) appear, as appropriate, before this Court, the appellate
     courts, and other courts in which matters may be heard and
     to protect the interests of the Committee before said courts
     and the United States Trustee; and

  j) perform all other necessary legal services in these cases.

Andrew I. Silfen, Esq., a partner at Arent Fox, assured the Court
that the firm does not hold or represent any interest adverse to
the Debtors or their estates or creditors, and that the firm is a
"disinterested person" as that term is defined in Sec. 101(14) of
the Bankruptcy Code.

As compensation for their services, Arent Fox's professionals bill
at these hourly rates:

          Parners               $455-$790
          Of Counsel            $455-$750
          Associates            $290-$515
          Paraprofessionals     $145-$260

                         About WorldSpace

WorldSpace, Inc. (WSI) -- http://www.1worldspace.com/-- and its
debtor- and non-debtor affiliates provide satellite-based radio
and data broadcasting services to paying subscribers in ten
countries throughout Europe, India, the Middle East, and Africa.
The Debtors and their affiliates operate two geostationary
satellites, AfriStar and Asia Star, which are in orbit over Africa
and Asia.  The Debtor and two of its affiliates filed for Chapter
11 bankruptcy protection on Oct. 17, 2008 (Bankr. D. Del., Case
No. 08-12412 - 08-12414).  James E. O'Neill, Esq., Laura Davis
Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl
& Jones, LLP, represent the Debtors as counsel.

The U.S. Trustee for Region 3 appointed creditors to serve on an
Official Committee of Unsecured Creditors.  Neil Raymond Lapinski,
Esq., and Rafael Xavier Zahralddin-Aravena, Esq., at Elliot
Greenleaf represent the Committee as Delaware counsel.    In its
schedules, WorldSpace, Inc. listed total assets of $17,827,889 and
total debts of $391,643,749.  WorldSpace Systems Corp. listed
total assets of $25,148,520 and total debts of $562,751,052.
AfriSpace, Inc. listed total assets of $7,477 and total debts of
$294,308,625.


WORLDSPACE INC: Panel May Hire Elliott Greanleaf as Local Counsel
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware granted the
Official Committee of Unsecured Creditors appointed in WorldSpace,
Inc., and its debtor-affiliates' bankruptcy cases permission to
retain Elliott Greenleaf as their Delaware counsel and conflicts
counsel, nunc pro tunc to the Oct. 29, 2008.

As the Committee's Delaware counsel and conflicts counsel, Elliot
Greenleaf will:

  (a) render legal advice with respect to the powers and duties
      of the Committee and the other participants in the Debtors'
      cases;

  (b) assist the Committee in its investigation of the acts,
      conduct, assets, liabilities and financial condition of the
      Debtors, the operation of the Debtors' business and any
      other matter relevant to the bankruptcy cases, as and to
      the extent such matters may affect the Debtors' creditors;

  (c) participate in negotiations with parties-in-interest with
      respect to any disposition of the Debtors' assets, plan of
      reorganization and disclosure statement in connection with
      such plan, and otherwise protect and promote the interests
      of the Debtors' unsecured creditors;

  (d) prepare all necessary applications, motions, answers,
      orders, reports and papers on behalf of the Committee at
      Court hearings as necessary and appropriate in connection
      with the bankruptcy cases;

  (e) render legal advice and perform legal services in
      connection with the foregoing;

  (f) perform all other necessary legal services in connection
      with the bankruptcy case, as may be requested by the ]
      Committee;

  (g) render legal advice with respect to all Delaware
      substantive and procedural matters, including, but not
      limited to local rules and practices of the United States
      Court for the District of Delaware and the United States
      Bankruptcy Court for the District of Delaware; and

  (h) to serve as Conflicts Counsel, as needed.

Rafael X. Zahralddin-Aravena, Esq., a managing shareholder at the
Wilmington Office of Elliott Greenleaf, assured the Court that the
firm does not hold any interest materially adverse to the estates
or of any class of creditors or equity security holders, and that
the firm is a "disinterested person" as that term is defined in
Sec. 101(14) of the Bankruptcy Code.

As compensation for their services, Elliott Greenleaf 's
professionals bill:

     Professional                        Hourly Rate
     ------------                        -----------
     Rafael X. Zahralddin-Aravena, Esq.     $525
     Henry F. Siedzikowski, Esq.            $550
     Kevin S. Anderson, Esq.                $375
     Brian R. Elias, Esq.                   $260
     Neil R. Lapinski, Esq.                 $300
     William M. Kelleher, Esq.              $350
     Elizabeth A. Williams, Esq.            $195
     Kristin A. McCloskey                   $190
Aron M. Pillard                        $190
Phil A. Giordano                       $160

                         About WorldSpace

WorldSpace, Inc. (WSI) -- http://www.1worldspace.com/-- and its
debtor- and non-debtor affiliates provide satellite-based radio
and data broadcasting services to paying subscribers in ten
countries throughout Europe, India, the Middle East, and Africa.
The Debtors and their affiliates operate two geostationary
satellites, AfriStar and Asia Star, which are in orbit over Africa
and Asia.  The Debtor and two of its affiliates filed for Chapter
11 bankruptcy protection on Oct. 17, 2008 (Bankr. D. Del., Case
No. 08-12412 - 08-12414).  James E. O'Neill, Esq., Laura Davis
Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl
& Jones, LLP, represent the Debtors as counsel.

The U.S. Trustee for Region 3 appointed creditors to serve on an
Official Committee of Unsecured Creditors.  In its schedules,
WorldSpace, Inc. listed total assets of $17,827,889 and total
debts of $391,643,749.  WorldSpace Systems Corp. listed total
assets of $25,148,520 and total debts of $562,751,052.  AfriSpace,
Inc. listed total assets of $7,477 and total debts of
$294,308,625.


WORLDSPACE INC: Panel May Hire ESBA as Financial Advisors
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware granted the
Official Committee of Unsecured Creditors appointed in Worldspace,
Inc., and its debtor-affiliates' bankruptcy cases authority to
employ of Executive Sounding Board Associates Inc. as its
financial advisors, nunc pro tunc to Oct. 30, 2008.

As the Committee's financial advisors, Executive Sounding Board
Associates Inc. is expected to conduct financial investigations
that are necessary and appropriate to these proceedings and will
provide assistance, including, but not limited to, analyzing the
Debtors' assets and operations, assisting in the marketing and
sales efforts of the Debtors, analyzing asset sales proposed by
the Debtors and analyzing the Debtors' prepetition and proposed
postpetition financing.

Daniel Kerrigan, Esq., a managing director at Executive Sounding
Board Associates Inc., assured the Court that the firm does not
hold or represent any interest adverse to the Debtors or their
estates or creditors, and that the firm is a "disinterested
person" as that term is defined in Sec. 101(14) of the Bankruptcy
Code.

As compensation for their services, Executive Sounding Board
Associates Inc.'s professionals bill at these hourly rates:

          Managing Director          $395-$450
          Director                   $310-$350
          Consultant                 $220-$350
          Administrative Support       $120

                         About WorldSpace

WorldSpace, Inc. (WSI) -- http://www.1worldspace.com/-- and its
debtor- and non-debtor affiliates provide satellite-based radio
and data broadcasting services to paying subscribers in ten
countries throughout Europe, India, the Middle East, and Africa.
The Debtors and their affiliates operate two geostationary
satellites, AfriStar and Asia Star, which are in orbit over Africa
and Asia.  The Debtor and two of its affiliates filed for Chapter
11 bankruptcy protection on Oct. 17, 2008 (Bankr. D. Del., Case
No. 08-12412 - 08-12414).  James E. O'Neill, Esq., Laura Davis
Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl
& Jones, LLP, represent the Debtors as counsel.

The U.S. Trustee for Region 3 appointed creditors to serve on an
Official Committee of Unsecured Creditors.  Neil Raymond Lapinski,
Esq., and Rafael Xavier Zahralddin-Aravena, Esq., at Elliot
Greenleaf represent the Committee as Delaware counsel.  In its
schedules, WorldSpace, Inc. listed total assets of $17,827,889 and
total debts of $391,643,749.  WorldSpace Systems Corp. listed
total assets of $25,148,520 and total debts of $562,751,052.
AfriSpace, Inc. listed total assets of $7,477 and total debts of
$294,308,625.


WORLDSPACE INC: Files Amended Schedules of Assets and Liabilities
-----------------------------------------------------------------
WorldSpace, Inc., filed with the U.S. Bankruptcy Court for the
District of Delaware, an amended schedule of its assets and
liabilities, disclosing:

     Name of Schedule               Assets        Liabilities
     ----------------            -----------    -------------
  A. Real Property
  B. Personal Property           $17,827,889
  C. Property Claimed as
     Exempt
  D. Creditors Holding                            $74,593,885
     Secured Claims
  E. Creditors Holding                               $300,000
     Unsecured Priority
     Claims
  F. Creditors Holding                           $316,749,864
     Unsecured Non-priority
     Claims
                                 -----------     ------------
TOTAL                            $17,827,889     $391,643,749

                         About WorldSpace

WorldSpace, Inc. (WSI) -- http://www.1worldspace.com/-- and its
debtor- and non-debtor affiliates provide satellite-based radio
and data broadcasting services to paying subscribers in ten
countries throughout Europe, India, the Middle East, and Africa.
The Debtors and their affiliates operate two geostationary
satellites, AfriStar and Asia Star, which are in orbit over Africa
and Asia.  The Debtor and two of its affiliates filed for Chapter
11 bankruptcy protection on Oct. 17, 2008 (Bankr. D. Del., Case
No. 08-12412 - 08-12414).  James E. O'Neill, Esq., Laura Davis
Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl
& Jones, LLP, represent the Debtors as counsel.

The U.S. Trustee for Region 3 appointed creditors to serve on an
Official Committee of Unsecured Creditors.  Neil Raymond Lapinski,
Esq., and Rafael Xavier Zahralddin-Aravena, Esq., at Elliot
Greenleaf represent the Committee as counsel.


WORLDSPACE INC: May Employ Baker & McKenzie as Special Counsel
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware granted
WorldSpace Inc. and its debtor-affiliates authority to employ
Baker & McKenzie LLP, as their special counsel, nunc pro tunc to
the Petition Date.

As special counsel to the Debtors, Baker & McKenzie will provide
bankruptcy advice relating to corporate and securities matters,
including the securitization sale or other disposition of assets.

Jeffrey E. Cohen, Esq. a partner at Baker & McKenzie, told the
Court that the the firm has a prepetition claim totaling
$1,265,670.   Mr. Cohen, however, assured the Court that
regardless of its prepetition claim, the firm does not represent
or hold any interest adverse to the Debtors or their estates.

As compensation for their services, Baker & McKenzie's
professionals bill:

                               Hourly Rate
                               -----------
          Partners              $625-$900
          Associates            $310-$545
          Paraprofessionals     $175-$200

                         About WorldSpace

WorldSpace, Inc. (WSI) -- http://www.1worldspace.com/-- and its
debtor- and non-debtor affiliates provide satellite-based radio
and data broadcasting services to paying subscribers in ten
countries throughout Europe, India, the Middle East, and Africa.
The Debtors and their affiliates operate two geostationary
satellites, AfriStar and Asia Star, which are in orbit over Africa
and Asia.  The Debtor and two of its affiliates filed for Chapter
11 bankruptcy protection on Oct. 17, 2008 (Bankr. D.Del., Case No.
08-12412 - 08-12414).  James E. O'Neill, Esq., Laura Davis Jones,
Esq., Timothy P. Cairns, Esq., at Pachulski Stang Ziehl &  Jones,
LLP, and represent the Debtors as counsel.

The U.S. Trustee for Region 3 appointed creditors to serve on an
Official Committee of Unsecured Creditors.  Neil Raymond Lapinski,
Esq., and Rafael Xavier Zahralddin-Aravena, Esq., at Elliot
Greenleaf represent the Committee as counsel.  In its schedules,
WorldSpace, Inc. listed total assets of $17,827,889 and total
debts of $391,643,749.  WorldSpace Systems Corp. listed total
assets of $25,148,520 and total debts of $562,751,052.  AfriSpace,
Inc. listed total assets of $7,477 and total debts of
$294,308,625.


WORLDSPACE INC: WorldSpace Systems Files Amended Schedules
----------------------------------------------------------
WorldSpace Systems Corp., Inc., a debtor-affiliate of WorldSpace,
Inc., filed with the U.S. Bankruptcy Court for the District of
Delaware, an amended schedule of its assets and liabilities,
disclosing:

     Name of Schedule               Assets        Liabilities
     ----------------            -----------    -------------
  A. Real Property
  B. Personal Property           $25,148,520
  C. Property Claimed as
     Exempt
  D. Creditors Holding
     Secured Claims                               $73,020,761
  E. Creditors Holding
     Unsecured Priority
     Claims                                        $2,105,517
  F. Creditors Holding
     Unsecured Non-priority
     Claims                                      $487,624,773
                                 -----------     ------------
TOTAL                            $25,148,520     $562,751,052

                         About WorldSpace

WorldSpace, Inc. (WSI) -- http://www.1worldspace.com/-- and its
debtor- and non-debtor affiliates provide satellite-based radio
and data broadcasting services to paying subscribers in ten
countries throughout Europe, India, the Middle East, and Africa.
The Debtors and their affiliates operate two geostationary
satellites, AfriStar and Asia Star, which are in orbit over Africa
and Asia.  The Debtor and two of its affiliates filed for Chapter
11 bankruptcy protection on Oct. 17, 2008 (Bankr. D. Del., Case
No. 08-12412 - 08-12414).  James E. O'Neill, Esq., Laura Davis
Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl
& Jones, LLP, represent the Debtors as counsel.

The U.S. Trustee for Region 3 appointed creditors to serve on an
Official Committee of Unsecured Creditors.  Neil Raymond Lapinski,
Esq., and Rafael Xavier Zahralddin-Aravena, Esq., at Elliot
Greenleaf represent the Committee as counsel.


* Christopher Jarvinen Joins Hahn & Hessen as Bankruptcy Partner
----------------------------------------------------------------
The New York based law firm of Hahn & Hessen LLP reported that
Christopher Andrew Jarvinen has been made a partner in the Firm,
effective Feb. 1, 2009.

"It is a distinct pleasure to welcome Christopher as a member of
the Firm," said Hahn & Hessen Managing Partner, Steven J. Seif.
"Christopher possesses extensive corporate restructuring
experience and embodies the Firm's ideals of professional
excellence, personal integrity and collegiality."  Mr. Seif added,
"The addition of Christopher to the partnership strengthens the
Firm and enhances our 78-year commitment to contribute to the
success of our clients."

Mr. Jarvinen's practice focuses on bankruptcy, reorganization and
creditors' rights.  For the past nine years, he has represented
debtors, official and unofficial committees and creditors in
complex Chapter 11 restructurings and non-bankruptcy workouts.
Christopher possesses particular expertise with cross-border
insolvency matters as well as Chapter 15, the chapter of the U.S.
Bankruptcy Code governing ancillary and other cross-border cases.

Prior to joining Hahn & Hessen, Mr. Jarvinen practiced as an
associate in the bankruptcy and restructuring groups of the former
Kronish Lieb Weiner & Hellman LLP and later with Paul, Weiss,
Rifkind, Wharton & Garrison LLP.  Mr. Jarvinen has authored more
than a dozen articles analyzing a range of restructuring issues
and is regularly invited to make presentations to professional
organizations, educational institutions and private groups located
in the United States and Latin America.

Mr. Jarvinen is a 1999 graduate of Boston College Law School and
has attended Brown, Harvard, Yale, and Columbia universities.  He
is currently obtaining a global executive MBA degree from the
Fundacao Getulio Vargas - Escola de Administracao de Empresas de
Sao Paulo and has lived and worked in Brazil.  Mr. Jarvinen is
admitted to practice in New York, Florida and Massachusetts and
before federal courts located in the First, Second and Eleventh
circuits.

                     About Hahn & Hessen

Founded in 1931, Hahn & Hessen LLP -- http://www.hahnhessen.com--
is a full service commercial firm serving primarily financial
institutions and creditors holding distressed debt. It has
received substantial recognition for its unique capabilities in
those situations where the creditworthiness of a client's existing
or potential borrower, counterparty or customer is of concern.


* Treasury to Disclose Financial Rescue Plans Next Week
-------------------------------------------------------
Deborah Solomon at The Wall Street Journal reports that a U.S.
Treasury official said that next week, Treasury Secretary Timothy
Geithner will give a speech outlining the Obama administration's
financial-rescue plans.

According to WSJ, the plan will include an aid to homeowners at
risk of foreclosure and additional steps to shore up the financial
sector.

WSJ relates that many economists no longer expect that the second
half of the $700 billion financial bailout that the Congress
recently approved would be sufficient in fixing the ailing
financial sector.

The administration, says WSJ, is considering a series of steps
that would inject money into financial firms while relieving them
of their toxic assets.  According to the report, the
administration is considering buying a portion of the ailing
firms' bad assets while offering guarantees against future losses.
The report states that Mr. Geithner has assigned teams of staff to
explore alternatives and is expected to present a plan to Mr.
Obama shortly.

The administration, WSJ reports, is also expected to disclose this
week tougher executive-compensation restrictions for some firms
that get financial assistance from the government.

Tougher rules would apply to banks that get a substantial amount
of money from the government, WSJ relates.  Chief executives of
companies that receive "exceptional" aid will be banned from
receiving any severance payments and they, along with the top 50
executives, will see their bonus pools decline by 40% from 2007
levels, WSJ states.

Citing government officials, Deborah Solomon at WSJ says that
officials are considering splitting off the Troubled Asset Relief
Program from the Treasury and creating an independent entity.


* U.S. Economy Shrank at 3.8% Rate in 2008 Fourth Quarter
---------------------------------------------------------
Real gross domestic product -- the output of goods and services
produced by labor and property located in the United States --
decreased at an annual rate of 3.8% in the fourth quarter of 2008,
according to advance estimates released by the U.S. Commerce
Department's Bureau of Economic Analysis.

In the third quarter, real GDP decreased 0.5 %.

The Bureau emphasized that the fourth-quarter "advance"
estimates are based on source data that are incomplete or subject
to further revision by the source agency.

The decrease in real GDP in the fourth quarter primarily reflected
negative contributions from exports, personal consumption
expenditures, equipment and software, and residential fixed
investment that were partly offset by positive contributions from
private inventory investment and federal government spending.
Imports, which are a subtraction in the calculation of GDP,
decreased.

Most of the major components contributed to the much larger
decrease in real GDP in the fourth quarter than in the third.  The
largest contributors were a downturn in exports and a much larger
decrease in equipment and software.  The most notable offset was a
much larger decrease in imports.

Highlights:

   -- Final sales of computers subtracted less than 0.01
      percentage point from the change in real GDP after
      subtracting 0.01 percentage point from the third-quarter
      change.

   -- Motor vehicle output subtracted 2.04 percentage points from
      the fourth-quarter change in real GDP after contributing
      0.16 percentage point to the third-quarter change.

   -- The price index for gross domestic purchases, which measures
      prices paid by U.S. residents, decreased 4.6% in the fourth
      quarter, in contrast to an increase of 4.5% in the third.
      Excluding food and energy prices, the price index for gross
      domestic purchases increased 1.2% in the fourth quarter,
      compared with an increase of 2.8% in the third.

   -- Real personal consumption expenditures decreased 3.5% in the
      fourth quarter, compared with a decrease of 3.8% in the
      third.  Durable goods decreased 22.4%, compared with a
      decrease of 14.8%.  Nondurable goods decreased 7.1%, the
      same as in the third.  Services expenditures increased 1.7%,
      in contrast to a decrease of 0.1%.

   -- Real nonresidential fixed investment decreased 19.1% in the
      fourth quarter, compared with a decrease of 1.7% in the
      third.  Nonresidential structures decreased 1.8%, in
      contrast to an increase of 9.7%.  Equipment and software
      decreased 27.8%, compared with a decrease of 7.5%.  Real
      residential fixed investment decreased 23.6%, compared with
      a decrease of 16.0%.

   -- Real exports of goods and services decreased 19.7% in the
      fourth quarter, in contrast to an increase of 3.0% in the
      third.  Real imports of goods and services decreased 15.7%,
      compared with a decrease of 3.5%.

   -- Real federal government consumption expenditures and gross
      investment increased 5.8% in the fourth quarter, compared
      with an increase of 13.8% in the third.  National defense
      increased 2.1%, compared with an increase of 18.0%.
      Nondefense increased 14.5%, compared with an increase of
      5.1%.  Real state and local government consumption
      expenditures and gross investment decreased 0.5%, in
      contrast to an increase of 1.3%.

   -- The real change in private inventories added 1.32 percentage
      points to the fourth-quarter change in real GDP after adding
      0.84 percentage point to the third-quarter change.  Private
      businesses increased inventories $6.2 billion in the fourth
      quarter, following a decrease of $29.6 billion in the third
      quarter and a decrease of $50.6 billion in the second.

   -- Real final sales of domestic product -- GDP less change in
      private inventories -- decreased 5.1% in the fourth
      quarter, compared with a decrease of 1.3 percent in the
      third.

                           2008 Results

Real GDP increased 1.3% in 2008, compared with an increase of 2.0%
in 2007.

The major contributors to the increase in real GDP in 2008 were
exports, personal consumption expenditures (PCE) for services,
federal government spending, nonresidential structures, and state
and local government spending.  These were partly offset by
residential fixed investment, PCE for goods, equipment and
software, and private inventory investment.  Imports, which are a
subtraction in the calculation of GDP, decreased.

The deceleration in real GDP primarily reflected a sharp
deceleration in PCE, a downturn in equipment and software, and
decelerations in exports and in state and local government
spending that were partly offset by a sharp downturn in imports,
an acceleration in federal government spending, and a smaller
decrease in private inventory investment.

The price index for gross domestic purchases increased 3.2 percent
in 2008, compared with an increase of 2.8% in 2007.

Current-dollar GDP increased 3.4%, or $473.1 billion, in 2008.
Current-dollar GDP increased 4.8%, or $629.2 billion, in 2007.

During 2008, real GDP decreased 0.2%.  Real GDP increased 2.3%
during 2007.  The price index for gross domestic purchases
increased 1.8% during 2008, compared with an increase of 3.3%
during 2007.

                           *     *     *

Bill Rochelle of Bloomberg News notes that the decline last month
in stock averages was the worst ever for January.  The Dow Jones
Industrials were down 8.8% while the Standard & Poor's 500 Index
was off 8.6%.


* New Homes Sales Lowest on Record in December
----------------------------------------------
Sales of new one-family houses in December 2008 were at a
seasonally adjusted annual rate of 331,000, according to estimates
released jointly today by the U.S. Census Bureau and the
Department of Housing and Urban Development.

This is 14.7% (plus/minus 13.9%) below the revised November of
388,000 and is 44.8 percent (plus/minus 10.8%) below the December
2007 estimate of 600,000.

The median sales price of new houses sold in December 2008 was
$206,500; the average sales price was $246,900.  The seasonally
adjusted estimate of new houses for sale at the end of December
was 357,000. This represents a supply of 12.9 months at the
current sales rate.

An estimated 482,000 new homes were sold in 2008. This is 37.8
percent (˝2.7%) below the 2007 figure of 776,000.

According to Bloomberg's Bill Rochelle, the new home sales figures
during December in the U.S. were the fewest on record.  He added
that the annual sales rate of 331,000 units was lower than the
estimate by every one of the 70 economists surveyed by Bloomberg.


* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Feb. 5-7, 2009
  AMERICAN BANKRUPTCY INSTITUTE
     Caribbean Insolvency Symposium
        Westin Casurina, Grand Cayman Island, Alabama
           Contact: 1-703-739-0800; http://www.abiworld.org/

Feb. 25-27, 2009
  AMERICAN BANKRUPTCY INSTITUTE
     Valcon
        Four Seasons, Las Vegas, Nevada
           Contact: 1-703-739-0800; http://www.abiworld.org/

Mar. 2, 2009
  ASSOCIATION OF INSOLVENCY AND RESTRUCTURING ADVISORS
     Chicago Regional Conference
        Union League Club of Chicago, Chicago, Illinois
           Contact: 1-541-858-1665; http://www.airacira.org/

Mar. 13, 2009
  AMERICAN BANKRUPTCY INSTITUTE
     Bankruptcy Battleground West
        Beverly Wilshire, Beverly Hills, California
           Contact: 1-703-739-0800; http://www.abiworld.org/

Mar. 14-16, 2009
  AMERICAN BANKRUPTCY INSTITUTE
     Conrad Duberstein Moot Court Competition
        St. John's University School of Law, New York City
           Contact: 1-703-739-0800; http://www.abiworld.org/

Apr. 1-4, 2009
  AMERICAN BANKRUPTCY INSTITUTE
     27th Annual Spring Meeting
        Gaylord National Resort & Convention Center,
        National Harbor, Md.
           Contact: 1-703-739-0800; http://www.abiworld.org/

Apr. 16-19, 2009
  COMMERICAL LAW LEAGUE OF AMERICA
     2009 Chicago/Spring Meeting
        Westin Hotel on Michigan Ave., Chicago, Ill.
           Contact: (312) 781-2000; http://www.clla.org/

Apr. 17-18, 2009
  NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES
     NABT Spring Seminar
        The Peabody, Orlando, Florida
           Contact: http://www.nabt.com/

Apr. 20, 2009
  AMERICAN BANKRUPTCY INSTITUTE
     Consumer Bankruptcy Conference
        John Adams Courthouse, Boston, Massachusetts
           Contact: 1-703-739-0800; http://www.abiworld.org/

Apr. 27-28, 2009
  TURNAROUND MANAGEMENT ASSOCIATION
     Corporate Governance Meetings
        Intercontinental Hotel, Chicago, Illinois
           Contact: www.turnaround.org

Apr. 28-30, 2009
  TURNAROUND MANAGEMENT ASSOCIATION
     TMA Spring Conference
        Intercontinental Hotel, Chicago, Illinois
           Contact: www.turnaround.org

May 1, 2009
  AMERICAN BANKRUPTCY INSTITUTE
     Nuts and Bolts for Young Practitioners
        Alexander Hamilton Custom House, New York City
           Contact: 1-703-739-0800; http://www.abiworld.org/

May 4, 2009
  AMERICAN BANKRUPTCY INSTITUTE
     New York City Bankruptcy Conference
        New York Marriott Marquis, New York City
           Contact: 1-703-739-0800; http://www.abiworld.org/

May 7-8, 2009
  RENASSANCE AMERICAN MANAGEMENT, INC.
     6th Annual Conference on
     Distressted Investing - Europe
        The Le Meridien Piccadilly Hotel, London, U.K.
           Contact: 1-903-595-3800 or
                    http://www.renaissanceamerican.com/

May 7-10, 2009
  AMERICAN BANKRUPTCY INSTITUTE
     27th Annual Spring Meeting
        Gaylord National Resort & Convention Center
        National Harbor, Maryland
           Contact: http://www.abiworld.org/

May 12-15, 2009
  AMERICAN BANKRUPTCY INSTITUTE
     Litigation Skills Symposium
        Tulane University, New Orleans, La.
           Contact: http://www.abiworld.org/

May 14-16, 2009
  ALI-ABA
     Chapter 11 Business Reorganizations
        Langham Hotel, Boston, Massachusetts
           Contact: http://www.ali-aba.org

June 11-14, 2009
  AMERICAN BANKRUPTCY INSTITUTE
     Central States Bankruptcy Workshop
        Grand Traverse Resort and Spa
           Traverse City, Michigan
              Contact: http://www.abiworld.org/

June 21-24, 2009
  INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY &
     BANKRUPTCY PROFESSIONALS
        8th International World Congress
           TBA
              Contact: http://www.insol.org/

July 16-19, 2009
  AMERICAN BANKRUPTCY INSTITUTE
     Northeast Bankruptcy Conference
        Mt. Washington Inn
           Bretton Woods, New Hampshire
              Contact: http://www.abiworld.org/

July 29-Aug. 1, 2009
  AMERICAN BANKRUPTCY INSTITUTE
     Southeast Bankruptcy Conference
        The Westin Hilton Head Island Resort & Spa,
        Hilton Head Island, S.C.
           Contact: http://www.abiworld.org/

Aug. 6-8, 2009
  AMERICAN BANKRUPTCY INSTITUTE
     Mid-Atlantic Bankruptcy Conference
        Hotel Hershey, Hershey, Pa.
           Contact: http://www.abiworld.org/

Sept. 10-11, 2009
  AMERICAN BANKRUPTCY INSTITUTE
     Complex Financial Restructuring Program
        Hyatt Regency Lake Tahoe, Incline Village, Nevada
           Contact: http://www.abiworld.org/

Sept. 10-12, 2009
  AMERICAN BANKRUPTCY INSTITUTE
     17th Annual Southwest Bankruptcy Conference
        Hyatt Regency Lake Tahoe, Incline Village, Nevada
           Contact: http://www.abiworld.org/

Oct. 2, 2009
  AMERICAN BANKRUPTCY INSTITUTE
     ABI/GULC "Views from the Bench"
        Georgetown University Law Center, Washington, D.C.
           Contact: http://www.abiworld.org/

Oct. 5-9, 2009
  TURNAROUND MANAGEMENT ASSOCIATION
     TMA Annual Convention
        Marriott Desert Ridge, Phoenix, Arizona
           Contact: 312-578-6900; http://www.turnaround.org/

Oct. 20, 2009
  AMERICAN BANKRUPTCY INSTITUTE
     NCBJ/ABI Educational Program
        Paris Las Vegas, Las Vegas, Nev.
           Contact: http://www.abiworld.org/

Dec. 3-5, 2009
  AMERICAN BANKRUPTCY INSTITUTE
     21st Annual Winter Leadership Conference
        La Quinta Resort & Spa, La Quinta, California
           Contact: 1-703-739-0800; http://www.abiworld.org/

Apr. 29-May 2, 2010
  AMERICAN BANKRUPTCY INSTITUTE
     Annual Spring Meeting
        Gaylord National Resort & Convention Center, Maryland
           Contact: 1-703-739-0800; http://www.abiworld.org/

June 17-20, 2010
  AMERICAN BANKRUPTCY INSTITUTE
     Central States Bankruptcy Workshop
        Grand Traverse Resort and Spa, Traverse City, Michigan
           Contact: 1-703-739-0800; http://www.abiworld.org/

July 7-10, 2010
  AMERICAN BANKRUPTCY INSTITUTE
     Northeast Bankruptcy Conference
        Ocean Edge Resort, Brewster, Massachusetts
           Contact: 1-703-739-0800; http://www.abiworld.org/

July 14-17, 2010
  AMERICAN BANKRUPTCY INSTITUTE
     Southeast Bankruptcy Conference
        The Ritz-Carlton Amelia Island, Amelia, Fla.
           Contact: http://www.abiworld.org/

Aug. 5-7, 2010
  AMERICAN BANKRUPTCY INSTITUTE
     Mid-Atlantic Bankruptcy Workshop
        Hyatt Regency Chesapeake Bay, Cambridge, Maryland
           Contact: 1-703-739-0800; http://www.abiworld.org/

Oct. 4-8, 2010
  TURNAROUND MANAGEMENT ASSOCIATION
     TMA Annual Convention
        JW Marriott Grande Lakes, Orlando, Florida
           Contact: http://www.turnaround.org/

Dec. 2-4, 2010
  AMERICAN BANKRUPTCY INSTITUTE
     22nd Annual Winter Leadership Conference
        Camelback Inn, Scottsdale, Arizona
           Contact: 1-703-739-0800; http://www.abiworld.org/

Mar. 31-Apr. 3, 2011
  AMERICAN BANKRUPTCY INSTITUTE
     Annual Spring Meeting
        Gaylord National Resort & Convention Center, Maryland
           Contact: 1-703-739-0800; http://www.abiworld.org/

June 9-12, 2011
  AMERICAN BANKRUPTCY INSTITUTE
     Central States Bankruptcy Workshop
        Grand Traverse Resort and Spa
           Traverse City, Michigan
              Contact: http://www.abiworld.org/

Dec. 1-3, 2011
  AMERICAN BANKRUPTCY INSTITUTE
     23rd Annual Winter Leadership Conference
        La Quinta Resort & Spa, La Quinta, California
           Contact: 1-703-739-0800; http://www.abiworld.org/

The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday.  Submissions via
e-mail to conferences@bankrupt.com are encouraged.

Last Updated: Jan. 23, 2009



                            *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com/

On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts.  The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

The Sunday TCR delivers securitization rating news from the week
then-ending.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911.  For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                            *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA.  Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Carlo Alejandro B. Fernandez, Christopher
G. Patalinghug, and Peter A. Chapman, Editors.

Copyright 2009.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $775 for 6 months delivered via e-
mail.  Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each.  For subscription information, contact Christopher
Beard at 240/629-3300.

                   *** End of Transmission ***