TCR_Public/090526.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

               Tuesday, May 26, 2009, Vol. 13, No. 144

                            Headlines


7622 MEDICAL CENTER: Case Summary & 17 Largest Unsecured Creditors
ACCEPTANCE INSURANCE: 8th Cir. Says Granite Can Collect on Refund
ACTIVE RIDE: Seeks Court Nod on Sale of Assets to Zumiez Unit
ADVANCED MICRO: Fitch Changes Senior Debt Rating to 'CC/RR6'
ADVANTA CORP: To Close Customers' Accounts Effective May 30

AGS LLC: Moody's Raises Probability of Default Rating to 'Caa3/LD'
ALERIS INT'L: Courts Extends Plan Filing Deadline Until Dec. 9
ALLIS-CHALMERS ENERGY: Auction Tender Offer Cues S&P's Junk Rating
ANCHOR PROPERTIES: Case Summary & Four Largest Unsecured Creditors
AIRTRAN HOLDINGS: Shareholders Re-Elect Directors, Incentive Plan

ASYST TECHNOLOGIES: To Be Delisted From Nasdaq Effective May 29
ATRIUM COMPANIES: Moody's Changes Default Rating to 'Ca/LD'
BALLY TOTAL: AP Services Bills $898,633 for December-March Work
BALLY TOTAL: Court Approves Additional Roles for Deloitte
BALLY TOTAL: Court Extends Cash Collateral Order Until June 26

BALLY TOTAL: Court Extends Removal Period to September 1
BALLY TOTAL: Files Suit vs. Waterways Plaza for Breach of Lease
BALLY TOTAL: Kramer Levin Seeks $2.4MM for December-March Work
BANK OF AMERICA: Has Modified Mortgages for Over 50,000 Borrowers
BANKUNITED FINANCIAL: Files for Chapter 11 Bankruptcy Protection

BANKUNITED FINANCIAL: Case Summary & 10 Largest Unsec. Creditors
BERRY PLASTICS: S&P Downgrades Corporate Credit Rating to 'SD'
BOYD GAMING: Moody's Downgrades Corporate Family Rating to 'B1'
CANWEST MEDIA: Sells C$100MM in 12% Notes, Gets C$75MM Loan
CABLEVISION SYSTEMS: To Raise $423.8MM in Common Stock Offering

CAPMARK FINANCIAL: Extends Closing Date for $1.15-Bil. Facility
CHRYSLER LLC: Responds to Indiana State Treasurer Protest
CHRYSLER LLC: Proposes Tax Settlement Deal with Daimler, et al.
CHRYSLER LLC: Proposes GMAC, Treasury Deal to Give Dealer Loans
CHRYSLER LLC: Court Approves Jones Day as Lead Bankruptcy Counsel

CHRYSLER LLC: Court OKs Capstone Engagement as Financial Advisor
CHRYSLER LLC: Gets Green Light to Hire Togut as Conflicts Counsel
CHRYSLER LLC: Court Approves Schulte as Corporate Counsel
CHRYSLER LLC: Seeks to Hire Cahill as Counsel to Board Managers
CHRYSLER LLC: Creditors Panel Proposes Mesirow as Fin'l Advisors

CHRYSLER LLC: Proposes Sale Protocol for De Minimis Assets
CHRYSLER LLC: Seeks to Pay $400,000 to National Training Center
CINRAM INTERNATIONAL: S&P Raises Corporate Credit Rating to 'B'
CIRCUIT CITY: Systemax Completes Purchase, Re-Launches Web Site
CITY OF VALLEJO: Misses $26,000 Bond Payment

COMMERCIAL CAPITAL: WestLB Wants Adequate Protection on Loans
COMPASS MINERALS: Prices $100MM of 8% Senior Notes Due 2019
CONSTAR INT'L: Expects to Emerge From Chapter 11 by May 29
CORRECTIONS CORP: S&P Assigns 'BB/B+' Senior Debt Ratings
COYOTES HOCKEY: U.S. Trustee Forms Five-Member Creditors' Panel

COYOTES HOCKEY: Secured Lenders Cry Foul on S&E $17-Mil. DIP Loan
CRUCIBLE MATERIALS: U.S. Trustee Forms 5-Member Creditors' Panel
DANA HOLDING: S&P Raises 'SD' Corporate Credit Rating to 'B-'
DAYTON SUPERIOR: To Be Delisted From Nasdaq Effective May 29
DELPHI CORP: Court Orders Mediation Among Delphi Key Stakeholders

DELPHI CORP: Court OKs $4.35BB JPMorgan DIP Loan on Final Basis
DELPHI CORP: Files Documents in Harbinger Suit Under Seal
DELPHI CORP: Court OKs BeijingWest Deal; Amended Pact Filed
DELPHI CORP: Settles EEOC Lawsuit, Agrees to Pay $80,000
DFI PROCEEDS: Court Sets July 15 Plan Confirmation Hearing

EZRI NAMVAR: Seeks to Convert Case to Chapter 7 Liquidation
FIRST MIDWEST: Fitch Downgrades Preferred Stock Rating to 'BB+'
FLEETWOOD ENTERPRISES: Court OK Sale of Mexicali Assets to Krystal
FLEETWOOD ENTERPRISES: Seeks Sale of Military Housing Business
FOOTHILLS RESOURCES: Deregisters Unissued Common Shares

FREDDIE MAC: May Sell Almost $1BB of Commercial-Mortgage Bonds
FREMONT GENERAL: Court OKs Massachusetts, California Settlements
FREMONT GENERAL: Settles $27MM D&O Claims, Insurance Agency Suit
FREMONT GENERAL: Still Evaluating Proponents for Ch. 11 Plan
FRONTIER AIRLINES: Asks Court to Approve Amended WestLB Facility

FRONTIER AIRLINES: Court Extends Exclusivity Periods to October 9
FRONTIER AIRLINES: Primeflight Sells $1.4MM Claim to ASM Capital
FRONTIER AIRLINES: US Trustee Wants Reports Before Fees Are Paid
GENERAL MOTORS: Restructuring Deal Ratified by CAW Members
GENERAL MOTORS: Gov't May Name Preferred Opel Bidder by Wednesday

GENERAL MOTORS: Magna Int'l Submits EUR700 Million Offer for Opel
GENESIS WORLDWIDE: Closes Private Placement of C$1.500 Million
GEORGIA GULF: Moody's Downgrades Default Rating to 'Caa3/LD'
GHOST TOWN: May Obtain DIP Financing of Up To $500,000
GLOBAL GROUP: Has Until May 29 to File Schedules and Statements

GLOBAL GROUP: Proposes Forshey & Prostok as Bankruptcy Counsel
GLOBAL GROUP: Wants Access to Prepetition Lender's Cash Collateral
GLOBAL GROUP: Wants to Hire Decker Jones as Corporate Counsel
GUROSA CORPORATION: Court Prohibits Use of Compass Cash Collateral
HALO TECHNOLOGY: U.S. Trustee Wants Cases Converted to Chapter 7

HARTMAX CORP: Enters Stalking Horse Deal with Emirisque
HERBST GAMING: Court Approves Goldman Sachs as Financial Advisor
HERBST GAMING: Court OKs Brown Rudnick as Committee's Co-Counsel
HERBST GAMING: Court OKs XRoads Solutions as Restructuring Advisor
HERBST GAMING: Creditors Committee Can Hire S&MLF as Counsel

HERTZ GLOBAL: S&P Assigns 'B' Long-Term Corporate Credit Rating
HILL COUNTRY: Court Extends Schedules Deadline to June 9
HUNTINGTON BANCSHARES: Offers to Purchase Securities
IDEARC FIRM: Firm Leads 8% Bondholders in Class Suit
IED PINNACLE: Case Summary & 20 Largest Unsecured Creditors

J&D COMPANY: Case Summary & 30 Largest Unsecured Creditors
JENNIFER RENEE LEE: Case Summary & 12 Largest Unsecured Creditors
JUNE HAVOC: Stamford, Conn., Home Being Auctioned on June 1
KA & KM: Files for Chapter 11 Bankruptcy Protection
KABOOSE INC: Gets Ontario Court Nod for Plan Arrangement

KABUTO ARIZONA: Voluntary Chapter 11 Case Summary
LEXINGTON PRECISION: Sees $100,000 Loss From Operations for Q1
LOCALBIZUSA: Case Summary & 20 Largest Unsecured Creditors
M&D 1 LLC: Case Summary & 6 Largest Unsecured Creditors
MAHALO ENERGY: Case Summary & 20 Largest Unsecured Creditors

MCCLATCHY CO: S&P Downgrades Corporate Credit Rating to 'CC'
MERCEDES HOMES: Proofs of Claim Must be Filed by June 29
MERUELO MADDUX: Expects to Report $5.9MM in Revenues for Q1
MGM MIRAGE: MRI to Redeem $100-Mil. in 7.25% Debentures Due 2017
MGM MIRAGE: Raises $1.42BB in Private Offer of 2014, 2017 Notes

MGM MIRAGE: Kerkorian Buys 14.2MM Shares, Raises Stake to 37%
MID RIVER MINERALS: Case Summary & 20 Largest Unsecured Creditors
MONACO COACH: Court Approves Sale of Resort Assets to Four Buyers
MONACO COACH: Court OKs Sale of RV Biz. to Navistar Unit
MTI TECHNOLOGY: Court Extends Plan Filing Deadline to June 15

NCCS INC: Case Summary & 8 Largest Unsecured Creditors
NCI BUILDING: Obtains Waivers Until July 15 from Sr. Lenders
NOBLE INT'L: 691 Employees to Get Incentives Upon Sale of Assets
NORTEL NETWORKS: Court Extends Plan Deadline to Sept. 11
ORBITZ WORLDWIDE: S&P Puts 'B' Corporate Rating on Negative Watch

ORTHOFIX INTERNATIONAL: Moody's Comments on B1' Corporate Rating
OSCIENT PHARMA: Recieves Notice From NASDAQ on Delayed 10-Q Filing
PLANT INSULATION: Files Ch. 11 to Deal with Asbestos Claims
PLANT INSULATION: Wants to Keep Renfrew as Futures Representative
PLANT INSULATION: Wants Suit vs. Insurers to Proceed

PLANT INSULATION: Case Summary & 20 Largest Unsecured Creditors
POTTER'S LANDSCAPING: Case Summary & 24 Largest Unsec. Creditors
PRESERVE LLC: Wants Plan Filing Period Extended to September 23
PRINCETON COMMUNITY: Moody's Upgrades Bond Rating to 'Ba3'
RAILPOWER HYBRID: Monitor Has C$5.1 Million Bid for Assets

REDCORP VENTURES: Announces Reduction in Corporate Management
S&K FAMOUS: Will Shut Down 105 Stores; GOB Sales Has Started
S-TRAN HOLDINGS: Plan Filing Period Extended to June 1
SCHIMMEL'S RESTAURANT: Voluntary Chapter 11 Case Summary
SHANE SENTER: Files for Chapter 7 Liquidation

SHERIDAN GROUP: S&P Cuts Corporate Credit Rating to 'B' From 'B+'
SILICON GRAPHICS: Files Docs With SEC to Deregister Unsold Shares
SL GREEN: Fitch Assigns Issuer Default Rating at 'BB+'
SNOQUALMIE ENTERTAINMENT: S&P Junks Issuer Credit Rating From 'B'
SOURCE INTERLINK: Shareholders Want Plan Hearing Delayed 45 Days

SOURCECORP INC: S&P Gives Stable Outlook; Affirms 'B' Rating
SOUTH SOUND: Case Summary & 20 Largest Unsecured Creditors
SOUTHERN AUTOMOTIVE: Case Summary & 20 Largest Unsecured Creditors
STANLEY MEADOWS: Voluntary Chapter 11 Case Summary
TEREX CORP: S&P Downgrades Corporate Credit Rating to 'BB-'

TJ'S TREES & MORE: Voluntary Chapter 11 Case Summary
TRONOX INC: Asks Court to Set August 12 as Claims Bar Date
TRONOX INC: Court Denies Creditors' Bid to Scrap Equity Panel
TRONOX INC: Court Extends Plan Filing Deadline to Sept. 15
TRONOX INC: Court to Consider DIP Amendments at May 28 Hearing

TRONOX INC: Says Kerr-McGee Knew Spun-Off Company Won't Survive
TRONOX INC: Govt. Seeks to Join in Suit vs. Anadarko, Kerr-McGee
TRONOX INC: Seeks to Implement Severance, Incentive Programs
TXCO RESOURCES: Receives Nod to Loan $12.5-Mil. on Interim
US ENERGY: Proposes Aug. 26 Extension of Plan Solicitation Period

VINE INVESTMENTS: Voluntary Chapter 11 Case Summary
W WALT LOWE REVOCABLE: Case Summary & 20 Largest Unsec. Creditors
WINSTAR COMMUNICATIONS: Ch. 7 Trustee to Make $240MM Distribution
WINSTAR COMMUNICATIONS: Ch. 7 Trustee Modifies Herrick's Role
WINSTAR COMMUNICATIONS: Kasowitz Represents Prepetition Lenders

WINSTAR COMMUNICATIONS: Liberty Executes $30MM Individual Bond
WINSTAR COMMUNICATIONS: Lucent Withdraws Petition for Rehearing
WR GRACE: Court Denies Banks $100MM Interest Claims Under Sec. 502
WR GRACE: Paul Weiss Represents Bank Debt Holders' Group
WR GRACE: Seeks Approval of Venable Engagement as Special Counsel

WR GRACE: To Contribute $30.3 Million to Retirement Plans
WR GRACE: U.S. Trustee, Creditors Object to Plan Confirmation

* Initial Unemployment Insurance Claims Rise Again

* Large Companies With Insolvent Balance Sheets

                            *********

7622 MEDICAL CENTER: Case Summary & 17 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: 7622 Medical Center, P.C.
           dba 7622 Medical Center
           dba Allied Medical Group
           dba 1900 S.G. Associates
        7620-24 Ogontz Avenue

Bankruptcy Case No.: 09-13782

Chapter 11 Petition Date: May 21, 2009

Court: United States Bankruptcy Court
       Eastern District of Pennsylvania (Philadelphia)

Debtor's Counsel: Jami B. Nimeroff, Esq.
                  Brown Stone Nimeroff LLC
                  1818 Market Street, Suite 2300
                  Philadelphia, PA 19103
                  Tel: (267) 861-5330
                  Fax: (267) 350-9050
                  Email: jnimeroff@bsnlawyers.com

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

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

A list of the Company's 17 largest unsecured creditors is
available for free at:

           http://bankrupt.com/misc/paeb09-13782.pdf

The petition was signed by Arnold S. Lincow, president of the
Company.


ACCEPTANCE INSURANCE: 8th Cir. Says Granite Can Collect on Refund
-----------------------------------------------------------------
Granite Reinsurance Company, Ltd., a Barbados reinsurer, filed a
proof of claim against Acceptance Insurance Companies, Inc., in
its Chapter 11 proceeding claiming AICI owed it $9,000,000 of
premium, plus interest, pursuant to an MPCI Stop Loss Reinsurance
Contract issued by Granite Re.  Subsequently, Granite Re filed a
complaint in the United States District Court for the District of
Nebraska against AICI's wholly owned subsidiary, Acceptance
Insurance Company, alleging AIC also was liable to Granite Re on
the same Contract.  By consent, the district court transferred
Granite Re's proceeding against AIC to the United States
Bankruptcy Court for the District of Nebraska, which consolidated
the proceeding with proceedings in AICI's Chapter 11 proceeding as
Adversary Proceeding No. A06-8015.

AICI initiated a separate adversary proceeding against Granite Re
asserting a claim for unjust enrichment. (Adv. Pro. No. A06-8115).
AICI asserted the Contract lacked consideration, and that Granite
Re had been unjustly enriched by the $6,000,000 AICI paid to
Granite Re for reinsurance Granite Re did not in fact provide.
All issues associated with Granite Re's proof of claim asserted
against AICI, Granite Re's adversary complaint against AIC, and
AICI's adversary complaint against Granite Re were consolidated
for discovery and trial.

On May 9, 2007 the Bankruptcy Court ruled that: (i) Granite Re has
no right to premiums claimed and AICI and AIC have no right to a
refund of premiums paid; (ii) the adversary proceedings of Granite
Re and AICI will be dismissed and (iii) the Granite Re claim filed
in the bankruptcy case will be denied.

The ruling was appealed by Granite Re to the United States
Bankruptcy Appellate Panel for the Eighth Circuit.  On March 12,
2008, the Appellate Court (i) reversed the Bankruptcy Court's
judgment that Granite Re was not entitled to receive the
$9 million of premium, plus interest and (ii) affirmed that AICI
has no right to the refund of the premiums paid (In re: Acceptance
Insurance Companies Inc., United States Bankruptcy Appellate Panel
for the Eighth Circuit, Nos. 07-6027, 6029).

On April 10, 2008, the District Court for Lancaster County,
Nebraska (Case No: CI 08-1434) entered an order of rehabilitation
authorizing the rehabilitation of AIC, appointed a rehabilitator
and granted an injunction.  Pursuant to the order, among other
things, the rehabilitator has all the power of the directors and
officers of AIC, the rehabilitator took possession and control of
AIC's assets and administers them and the rehabilitator is vested
with title to all of the property, contracts, rights of action and
all of the books and records of AIC.  Under the injunction, among
other things, AIC is enjoined from transacting further business
except as directed by the rehabilitator, transferring its assets
and property or instituting or further prosecuting any actions or
proceedings.

AICI appealed the Appellate Court's rulings to the United States
Court of Appeals for the Eighth Circuit.  On May 18, 2009, the
Circuit Court affirmed the rulings of the Appellate Court (Case
No. 08-1933.)  There can be no assurance at this time what actions
may be taken in AICI's Chapter 11 bankruptcy proceeding or by the
Nebraska Department of Insurance with respect to AIC as a result
of the Circuit Court's decision.

                  About Acceptance Insurance

Headquartered in Council Bluffs, Iowa, Acceptance Insurance
Companies, Inc. -- http://www.aicins.com/-- owns, either
directly or indirectly, several companies, one of which is an
insurance company that accounts for substantially all of the
business operations and assets of the corporate groups.

The Company filed for Chapter 11 protection on January 7, 2005
(Bankr. D. Nebr. Case No. 05-80059).  The Debtor's affiliates --
Acceptance Insurance Services, Inc., and American Agrisurance,
Inc. -- each filed Chapter 7 petitions (Bankr. D. Nebr. Case Nos.
05-80056 and 05-80058) on January 7, 2005.  John J. Jolley, Esq.,
at Kutak Rock LLP, represents the Debtor in its restructuring
efforts.  Lawyers at McGrath North Mullin & Kratz PC, LLO,
represent the Official Committee of Unsecured Creditors in
Acceptance Insurance's case.


ACTIVE RIDE: Seeks Court Nod on Sale of Assets to Zumiez Unit
-------------------------------------------------------------
Erin Barajas at ApparelNews.net reports that Active Ride Shop has
sought approval from the U.S. Bankruptcy Court for the Central
District of California for the sale of its assets to Zumiez Inc.'s
subsidiary, Active Acquisition.

ApparelNews.net relates that the deal is valued at up to
$7.2 million.

Active Ride operates 21 stores and an online shop.  According to
ApparelNews.net, Active Ride closed eight stores and laid off
approximately 50 workers after its debt totaled more than
$15 million and the Company had to file for bankruptcy.

Court documents say that Active Ride has been searching for a
buyer since August 2008 with the help of its investment banker,
PCG Capital Growth.

Active Acquisition, says ApparelNews.net, would purchase Active
Ride's assets for "an amount greater than liquidation value" and
$100,000 per store it acquires.  Active Ride said that the cost of
its entire inventory was approximately $5.2 million on March 30,
2009, ApparelNews.net reports.

ApparelNews.net states that a hearing on the proposed sale is set
for June 4.

                  About The Active Wallace Group

Headquartered in Mira Loma, California, The Active Wallace Group,
doing business as Active Mail-Order, Inc., Active Sweats, Active
Sweats and Surf and Active Ride Shop, is a retailer.

Active Wallace filed for Chapter 11 protection on March 23, 2009
(Bankr. Case No. 09-15370).  Garrick A. Hollander, Esq., and Marc
J. Winthrop, Esq., represent the Debtor in its restructuring
efforts.  In its bankruptcy petition, the Debtor said it had
assets of $10 million to $50 million and debts of $10 million to
$50 million.


ADVANCED MICRO: Fitch Changes Senior Debt Rating to 'CC/RR6'
------------------------------------------------------------
Consistent with Fitch's updated ratings definitions, Fitch has
revised the senior unsecured debt rating on Advanced Micro Devices
Inc.'s to 'CC/RR6' from 'CCC/RR6'.  At the same time, Fitch has
affirmed AMD's Issuer Default Rating at 'B-'.  The Rating Outlook
is Negative.

As of March 28, 2009, AMD's total consolidated debt was
approximately $5.6 billion.  The senior unsecured debt includes
these rated notes:

  -- $1.5 billion of 5.75% senior notes due 2012;
  -- Approximately $2.0 billion of 6% senior notes due 2015; and
  -- $390 million of 7.75% senior notes due 2012.


ADVANTA CORP: To Close Customers' Accounts Effective May 30
-----------------------------------------------------------
Advanta Corp. said Friday that its securitization transactions
will effectively stop funding new receivables as of June 1, 2009,
and the Company expects to close its customers' accounts to future
use and activity effective May 30, 2009.

The Company had expected to close its customers' accounts to
future use on June 10, 2009.  The Company noted, however, that
upon further evaluation, it has been advised that, although the
determination of whether the three-month average excess spread is
below the contractually required minimum to avoid early
amortization may not be formalized until on or about June 10,
2009, the securitization transactions will effectively stop
funding new receivables as of June 1, 2009 if the early
amortization event occurs.  As a result, the Company expects to
close its customers' accounts to future use and activity effective
May 30, 2009.

Advanta on May 11, 2009, said its Board of Directors has approved
a plan designed to dramatically limit the Company's credit loss
exposure and maximize its capital and its liquidity measures.  The
plan includes:

   -- not preventing an early amortization of the Company's
      securitization transactions,

   -- closing customers' accounts to future use, and

   -- executing a tender offer by Advanta Corp. for the
      outstanding trust preferred securities issued by Advanta
      Capital Trust I and a tender offer by Advanta Bank Corp. for
      a portion of the AdvantaSeries securitization notes issued
      by the Advanta Business Card Master Trust, the Company's
      securitization trust.

The Company expected to use tools at its disposal to avoid early
amortization of the securitization trust unless it concluded there
was a better plan to maximize its capital and liquidity.

As part of the plan, Advanta Corp. commenced a tender offer for
any and all of the $100 million of outstanding Advanta Capital
Trust I 8.99% Capital Securities.  The Capital Securities Tender
Offer will expire at 5:00 p.m. EDT, on June 10, 2009, unless
extended or earlier terminated by Advanta Corp.

Also as part of the plan, Advanta Bank Corp., a wholly owned
subsidiary of Advanta Corp., commenced a tender offer for up to
$1.4 billion of Advanta Business Card Master Trust's Class A
senior securitization notes.  The ABCMT Notes Tender Offer has an
Early Participation Date of Wednesday, May 27, 2009 at 5:00 p.m.
EDT and an expiration date of June 10, 2009 at 5:00 p.m. EDT,
unless extended or earlier terminated.

The Company will be communicating with its customers in accordance
with applicable requirements and the Company remains committed to
assisting its customers during this account closure process.

Earlier this month, management disclosed that as of April 30, 2009
the Advanta Business Card Master Trust Receivables balance was
$4.5 billion.  The default rate for the April 2009 Monthly Period
was 20.15% compared to 17.31% for the March 2009 Monthly Period.
The aggregate outstanding balance of the Accounts which were
delinquent 90 days or greater as of the end of the April 2009
Monthly Period was 5.97% of total Receivables as compared to 5.96%
as of the end of the March 2009 Monthly Period.  The aggregate
outstanding balance of the Accounts which were delinquent 30 days
or greater as of the end of the April 2009 Monthly Period was
11.54% of total Receivables as compared to 11.92% as of the end of
the March 2009 Monthly Period.

Management also said that, regarding the AdvantaSeries Class A
(2006-A3) note maturity under early amortization, which management
expects will be determined on June 10, 2009, the note would not be
paid in full on its Expected Final Principal Payment Date of
June 22, 2009, but rather would share in the payments allocated to
the Class A senior notes on a pro-rata basis, in accordance with
the terms of the AdvantaSeries Indenture Supplement.

                        About Advanta Corp.

Advanta Corp. -- http://www.advanta.com/-- is one of the nation's
largest credit card providers, through Advanta Bank Corp., in the
small business market.  Advanta's focus on this market as well as
its size, experience, and service tailored to the needs of small
businesses differentiates the company from other credit card
companies.  Founded in 1951, Advanta has long been an innovator in
developing and introducing many of the marketing techniques that
are common in the financial services industry.

At March 31, 2009, the Company had $3.39 billion in total assets,
$2.97 billion in total liabilities and $427.7 million in
stockholders' equity.  The Company had $75.9 million in net loss
for the three months ended March 31, 2009, compared to net income
of $18.3 million for the same period in 2008.

                            *     *     *

As reported by the Troubled Company Reporter on May 14, 2009,
Standard & Poor's Ratings Services lowered its ratings on Advanta
Corp., including lowering the long-term counterparty credit rating
to 'CC' from 'CCC'.  At the same time, S&P lowered the
counterparty credit rating on Advanta's primary operating
subsidiary, Advanta Bank Corp., to 'CC' from 'B-'.  The rating on
the preferred stock of Advanta Capital Trust I remains at 'C'.
The outlook is negative.  The rating action, S&P said, follows
Advanta's announcement that its securitization trust, its primary
funding vehicle, will go into early amortization on June 10, 2009.
Also, the Company does not plan to fund any activity for the
accounts in the trust on its balance sheet; therefore, it will
shut these accounts down.

Earlier in May 2009, Moody's Investors Service downgraded the
long-term ratings of Advanta Corp. (senior unsecured rating to
Caa3 from Caa1).  The trust preferred securities rating of Advanta
Capital Trust I was lowered to C from Caa3.  The outlook for the
senior unsecured rating is negative; the outlook for the trust
preferred rating is stable.  The rating action reflects Moody's
view that Advanta's intrinsic credit quality has eroded as the
result of continued deterioration in asset quality, heightened
pressures on funding and liquidity, and the adverse effects of
these factors on the firm's core profitability.

Fitch Ratings also downgraded the long-term Issuer Default Rating
and outstanding debt ratings of Advanta Corp. and Advanta Bank
Corp. earlier in May 2009.  Advanta Corp.'s Long-term IDR was
lowered to 'CC' from 'BB-'; short-term IDR was lowered to 'C' from
'B'; and senior unsecured was lowered to 'CC/RR4' from 'BB-'.
Advanta Bank Corp.'s long-term IDR was lowered to 'CCC' from
'BB-'; Short-term IDR was lowered to 'C' from 'B'; and Long-term
deposits was lowered to 'B-' from 'BB'.  Advanta Capital Trust I's
Trust preferred stock was lowered to 'C/RR6' from 'B'.  Roughly
$2.7 billion of debt, deposits and preferred securities are
affected by these actions.  The downgrade, Fitch said, reflects
significant deterioration in profitability and portfolio credit
quality and the heightened risk of breaching early amortization
triggers on off-balance sheet ABS transactions, which could lead
to a possible shut-down of the business.


AGS LLC: Moody's Raises Probability of Default Rating to 'Caa3/LD'
------------------------------------------------------------------
Moody's Investors Service raised AGS, LLC's Probability of Default
rating to Caa3/LD (Limited Default) from Ca reflecting the closing
of AGS's debt repurchase.  AGS repurchased $10 million of existing
term loans at a significant discount to par.  Moody's upgraded
AGS's term loan and delayed draw term loan ratings to Caa2 to
reflect the new post-debt exchange capital structure.  In
approximately three business days, Moody's will remove the LD
designation from the PD rating.

AGS's Caa2 Corporate Family Rating reflects concerns with the
company's liquidity given tight financial covenants, as well as
the higher probability that AGS may pursue further debt
repurchases that Moody's would deem to be distressed exchanges.
Additionally, ratings consider the company's very small scale,
considerable business risks, and higher than expected debt/EBITDA
relative to original expectations.

The negative outlook reflects the risk of additional distressed
exchanges going forward as well as the potential need to
renegotiate covenants in an adverse credit market, or rely on
equity cure rights to maintain compliance.

Ratings upgraded

  -- Probability of Default Rating to Caa3/LD from Ca

  -- $30 million 6-year secured and guaranteed delayed draw term
     loan to Caa2 (LGD 3, 34%) from Ca (LGD 4, 50%)

  -- $125 million 6-year secured and guaranteed term loan to Caa2
     (LGD 3, 34%) from Ca (LGD 4, 50%)

Ratings affirmed:

  -- Corporate Family Rating at Caa2

  -- $20 million 5-year secured and guaranteed revolving credit
     facility at Caa2 (LGD 3, 34%)

Moody's latest rating action was on May 8, 2009, when the AGS
LLC's CFR and PDR were each downgraded to Caa2 and Ca,
respectively.

AGS LLC designs, manufactures, and distributes gaming machines for
the Native American casino market.


ALERIS INT'L: Courts Extends Plan Filing Deadline Until Dec. 9
--------------------------------------------------------------
At the behest of Aleris International, Inc. and its debtor-
affiliates, Judge Brendan Linehan Shannon of the U.S. Bankruptcy
Court for the District of Delaware extended the period within
which the Debtors may exclusively file a Chapter 11 plan of
reorganization until Dec. 9, 2009, and the period within which
they have the exclusive right to solicit acceptances for that plan
to Feb. 7, 2010.

The Debtors' counsel, Stephen Karotkin, Esq., at Weil, Gotshal &
Manges LLP, in New York, said Aleris intends to implement
operational initiatives and see some more stability in their key
markets -- the automotive, building and construction and aircraft
markets -- before they can develop a business plan that forms the
basis of a plan of reorganization.  With more stability in the
marketplace and postpetition performance metrics, the Debtors hope
to develop a business plan that focuses on longer-term viability
that is not skewed by the shorter-term economic crisis affecting
the company and its many key customers, he notes.

Mr. Karotkin further disclosed that the Debtors have consulted and
coordinated with the Official Committee of Unsecured Creditors and
representatives of their other creditor constituencies, on every
major issue in their cases.  Mr. Karotkin assured that Court that
the Debtors are working in good faith towards the filing of a
Chapter 11 plan.

                    About Aleris International

Aleris International, Inc., produces and sells aluminum rolled and
extruded products.  Aleris operates primarily through two
reportable business segments: (i) global rolled and extruded
products and (ii) global recycling.  Headquartered in Beachwood,
Ohio, a suburb of Cleveland, the Company operates over 40
production facilities in North America, Europe, South America and
Asia, and employs approximately 8,400 employees.  Aleris operates
27 production facilities in the United States with eight
production facilities that provided rolled and extruded aluminum
products and 19 recycling production plants.

Aleris International, Inc., aka IMCO Recycling Inc., and various
affiliates filed for bankruptcy on February 12, 2009 (Bankr. D.
Del. Case No. 09-10478).  The Hon. Brendan Linehan Shannon
presides over the cases.  Stephen Karotkin, Esq., and Debra A.
Dandeneau, Esq., at Weil, Gotshal & Manges LLP in New York, serve
as lead counsel for the Debtors.  L. Katherine Good, Esq., and
Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A. In
Wilmington, Delaware, serves as local counsel.  Moelis & Company
LLC, acts as financial advisors; Alvarez & Marsal LLC a as
restructuring advisors, and Kurtzman Carson Consultants LLC as
claims and noticing agent for the Debtors.  As of Dec. 31, 2008,
the Debtors had total assets of $4,168,700,000; and total debts of
$3,978,699,000.

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


ALLIS-CHALMERS ENERGY: Auction Tender Offer Cues S&P's Junk Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its long-
term corporate credit rating on Houston, Texas-based, Allis-
Chalmers Energy Inc. to 'CC' from 'B'.  At the same time, S&P
lowered the ratings on Allis' senior notes to 'CC' from 'B'.  S&P
also placed the ratings on CreditWatch with negative implications.

This rating action follows the company's announcement that it will
conduct a modified Dutch auction tender offer for approximately
$100 million of its senior notes due 2014 and $25 million of its
senior notes due 2017 (roughly 25% of face value in total) at a
discount to par.  Under S&P's criteria, S&P views a formal cash
tender offer or exchange offer at discount by a company under
substantial financial pressure as a distressed exchange and
tantamount to a default.

"Our downgrade does not reflect S&P's view of a perceived increase
in Allis-Chalmers' bankruptcy risk," said Standard & Poor's credit
analyst Amy Eddy.  "Rather, S&P bases its downgrade on the
financial pressure S&P believes Allis is under to reduce its debt
burden by retiring debt for less than originally contracted."

The company plans to apply estimated proceeds of slightly more
than $120 million from a common stock rights offering and
convertible perpetual preferred stock offering to repay the
approximately $40 million of outstanding debt under its
$90 million nonborrowing base revolving credit facility due 2012.
Allis will use the remainder amount from the stock offerings to
repurchase $80 million of its senior unsecured notes (up to
$100 million of face value of its senior notes due 2014 and up to
$25 million of its senior notes due 2017).

The ratings on Allis will remain on CreditWatch with negative
implications until the debt repurchase is finalized.  When and if
this happens, barring other factors, S&P expects to lower the
corporate credit rating on Allis to 'SD' (selective default) and
lower its ratings on issues repurchased under the tender offer to
'D' (default).

S&P expects the auction will end by June 18, 2009, and shortly
thereafter, S&P expects to assign a new corporate credit rating
and issue-level rating to Allis, representative of S&P's
assessment of its credit risk and capital structure following the
completion of the debt repurchase.  Although this proposed
transaction will eliminate debt and reduce interest expense, due
to unfavorable industry conditions it is S&P's preliminary
expectation that S&P will only raise the corporate credit rating
back to the previous 'B' level.


ANCHOR PROPERTIES: Case Summary & Four Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Anchor Properties, Inc.
        PO Box 640001
        Beverly Hills, FL 34464-0001

Bankruptcy Case No.: 09-04113

Chapter 11 Petition Date: May 21, 2009

Debtor-affiliates that filed Chapter 11 petitions:

                                                       Petition
        Entity                             Case No.      Date
        ------                             --------    --------
Beverly Hills Development Corporation      09-04111    05/21/09
Beverly Hills Waste Management Corp        09-4074     05/20/09
Rolling Oaks Utilities, Inc.               09-3861     05/13/09
Ronald J. Collins, chairman                09-13648    05/03/09

Type of Business: Anchor Properties is one of the Midwest's
                  premier developers of regional shopping centers
                  and quality single-tenant retail properties.
                  Anchor Properties was founded in 1987 by Steve
                  Hemberger and Doug Hynden in Cincinnati, Ohio as
                  a commercial development company specializing in
                  high-quality retail development.

Court: Middle District of Florida (Jacksonville)

Judge: Jerry A. Funk

Debtors' Counsel: Scott A. Underwood, Esq.
                  sunderwood@mws-law.com
                  Messana Weinsterin & Stern PA
                  Post Office Drawer 2485
                  Fort Lauderdale, FL 33303
                  Tel: (954) 712-7406
                  Fax: (954) 712-7401

Estimated Assets: $10 million to $50 million

Estimated Debts: $1 million to $10 million

The Debtors' Largest Unsecured Creditors:

   Entity                      Nature of Claim   Claim Amount
   ------                      ---------------   ------------
United Bank, Inc.              financing         $3,118,334
1085 Van Voorhis Rd # 150
Morgantown, WV 26505

MONY Life of America           policy            $794
P.O. Box 4720
Syracuse, NY 13221

Ronald J. Collins              contribution      unknown
35 St. George Place
Palm Beach Gardens, FL
33418

Veolia Water N. America        damages           unknown

Anchor's petition was signed by John W. Patton, III, president.


AIRTRAN HOLDINGS: Shareholders Re-Elect Directors, Incentive Plan
-----------------------------------------------------------------
AirTran Airways, a subsidiary of AirTran Holdings, Inc., said
shareholders re-elected Don L. Chapman, Geoffrey T. Crowley and
Lewis H. Jordan as Class 1 directors for a term ending in 2012.

The shareholders also voted to approve the company's fourth
amended and restated long-term incentive plan.  Additionally, the
shareholders ratified the appointment of Ernst & Young, LLP as the
company's independent public accounting firm for fiscal year 2009.

AirTran held its annual shareholders' meeting in Orlando, Florida,
on May 20, 2009.

The Plan increases the number of shares of the Company's common
stock authorized for the granting of awards to 13,500,000, extends
the term of the Plan to 2019, re-sets certain sublimits in light
of the increase in the number of authorized shares and makes other
changes the Company does not believe are material.

The Plan was approved by the Company's board of directors on
January 27, 2009, subject to the approval of the stockholders.

At the close of business on March 23, 2009, the record date for
the Annual Meeting, there were 119,908,521 shares of the Company's
common stock outstanding and eligible to be voted.  At the annual
meeting 110,068,454 shares of the Company's common stock were
represented in person or by proxy.

A full-text copy of management's presentation at the 2009
shareholders' meeting is available at no charge at:

                http://ResearchArchives.com/t/s?3d3e

At March 31, 2009, the Company had $2.09 billion in total assets
and $2.40 billion in total liabilities and $309.6 million in
stockholders' equity.  The Company posted a net income of
$28.7 million for the three months ended March 31, 2009, compared
to a net loss of $35.3 million, as adjusted, for the same period
in 2008.

                      About AirTran Holdings

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

                          *     *     *

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


ASYST TECHNOLOGIES: To Be Delisted From Nasdaq Effective May 29
---------------------------------------------------------------
The Nasdaq Stock Market, Inc., has determined to remove from
listing the common stock of Asyst Technologies, Inc., effective at
the opening of the trading session on May 29, 2009.

Based on a review of the information provided by the Company,
Nasdaq Staff determined that the Company no longer qualified for
listing on the Exchange pursuant to Marketplace Rules 5100,
5110(b) and IM-5100-1.  The Company was notified of the Staffs
determination on April 21, 2009.  The Company did not appeal the
Staff determination to the Hearings Panel, and the Staff
determination to delist the Company became final on April 30,
2009.

Headquartered in Fremont, California, Asyst Technologies, Inc. --
http://www.asyst.com/-- makes, sells and supports integrated
hardware and software systems primarily for semiconductor and flat
panel display manufacturing industries.

The Company filed for Chapter 11 on April 20, 2009 (Bankr. N.D.
Calif. Case No. 09-43246).  Ali M.M. Mojdehi, Esq., at the Law
Offices of Baker and McKenzie, represents the Debtor in its
restructuring efforts.  As of December 31, 2008, the Debtor had
total assets of $295,782,000 and total debts of $315,364,000.


ATRIUM COMPANIES: Moody's Changes Default Rating to 'Ca/LD'
-----------------------------------------------------------
Moody's Investors Service changed ACIH's Probability of Default
Rating to Ca/LD from Ca, and affirmed all other ratings.  The
ratings downgrade reflects Atrium Companies, Inc. announcement
that it did not make certain interest payments that were due on
May 11 under its credit agreement and that it entered into a
forbearance agreement.  Moody's considers the missed interest
payment to be a "limited default" and will maintain the LD
designation until the default is resolved.

These ratings/assessments for Atrium Companies, Inc. have been
affirmed:

  -- $190 million sr. subordinated notes due 2012 affirmed at C
      (LGD5, 88%);

  -- $42.3 million sr. subordinated notes due 2012 affirmed at C
      (LGD5-73%);

  -- $334.5 million gtd. senior secured term loan B, due 2012,
     affirmed at Caa3 (LGD3, 31%);

  -- $45.5 million senior secured revolving credit facility, due
     2011, affirmed at Caa3 (LGD3, 31%).

The rating outlook is negative.

These ACIH ratings/assessments have been affirmed or changed:
(ACIH is an intermediate holding company that is structurally
below Atrium Corporation, the ultimate parent company, but resides
above Atrium Companies, Inc., the primary operating company)

  -- Probability of Default Rating, downgraded to Ca/LD;

  -- Corporate Family Rating, affirmed at Ca;


  -- $174 million ($4.6m outstanding) senior discount notes due
     2012, affirmed at C (LGD5, 88%).

  -- Speculative Grade Liquidity Rating affirmed at SGL-4.

The rating outlook is negative.

The last rating action was April 22, 2009 when Moody's downgraded
various instrument ratings and also downgraded ACIH's Corporate
Family Rating to Ca from Caa2, and its Probability of Default
Rating, to Ca from Caa2.

Headquartered in Dallas, Texas, Atrium Companies, Inc. is one of
the largest window manufacturers in North America.  Revenues for
the trailing twelve months ended September 30, 2008 $665 million.


BALLY TOTAL: AP Services Bills $898,633 for December-March Work
---------------------------------------------------------------
AP Services, LLC, the crisis managers for Bally Total Fitness
Holding Corporation and its debtor-affiliates, filed with the U.S.
Bankruptcy Court for the Southern District of New York staffing
reports for these periods:

(a) for the Staffing Period from February 1 to February 28, 2009:

   Professional          Function                    Hourly Rate
   ------------          --------                    -----------
   Harvey Rubinson       Interim CFO                    $650
   Michael Feder         Advisor                         790
   Ryan Clark            Operational Restructuring       365
   Clifford Chen         Operational Restructuring       335

(b) for the Staffing Period March 1 to March 31, 2009:

   Professional          Function                    Hourly Rate
   ------------          --------                    -----------
   Harvey Rubinson       Interim CFO                    $650
   Michael Feder         Advisor                         790
   Ryan Clark            Operational Restructuring       365
   Clifford Chen         Operational Restructuring       365

APS was engaged to assist in, among other matters, evaluating and
implementing strategic and tactical options through the Debtors'
restructuring process.  In this regard, APS has agreed to provide
certain temporary employees to assist the Debtors in their
restructuring efforts, led by Mr. Rubinson, a director of
AlixPartners LLP, and associated with APS.

According to Michael Feder, Esq., at AP Services LLC, in
Southfield, Missouri, the Temporary Staff are tasked to (i) work
with the Company and its team to provide oversight to, and manage,
the Company's business operations, and (ii) provide leadership to
financial function, finance organization, planning, general
accounting, and financial reporting information management.

Mr. Feder noted that all Staffing is subject to review by the
Court in the event an objection is filed.

               AP Files Summary of Staffing Report

In a summary of staffing reports for the period from December 3,
2008, through March 31, 2009, Mr. Feder disclosed that the Debtors
were invoiced $898,633 in aggregate fees and expenses in
connection with their Chapter 11 cases.

The Debtors also made payments totaling $945,658 to these
professionals during the Reporting Period:

   Professional                  Total Amount Paid
   ------------                  -----------------
   Mr. Rubinson                       $582,240
   Mr. Feder                             7,819
   Mr. Clark                           253,346
   Mr. Chen                            102,252

During the Reporting Period, the Debtors' expenses aggregated
$39,525, Mr. Feder disclosed.

Mr. Feder further said that AP has provided the Debtors with
services, during the Reporting Period, which detailed time entries
will be served upon the Office of the U.S. Trustee.

A full-text copy of the Staffing Report from December 3, 2008, to
March 31, 2009, is available for free at:

   http://bankrupt.com/misc/BallyII_APReportDec3-March31.pdf

Based in Chicago, Illinois, Bally Total Fitness Holding Corp.
(Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates
fitness centers in the U.S., with over 375 facilities located in
26 states, Mexico, Canada, Korea, China, and the Caribbean under
the Bally Total Fitness(R), Bally Sports Clubs(R), and Sports
Clubs of Canada (R) brands.

Bally Total and its affiliates filed for Chapter 11 protection
on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after
obtaining requisite number of votes in favor of their pre-
packaged Chapter 11 plan.  Joseph Furst, III, Esq., at Latham &
Watkins, L.L.P., represents the Debtors in their restructuring
efforts.  As of June 30, 2007, the Debtors had US$408,546,205 in
total assets and US$1,825,941,54627 in total liabilities.

The Debtors filed their Joint Prepackaged Plan & Disclosure
Statement on July 31, 2007.  The Court confirmed the Plan in
September 2007.  The Plan was declared effective October 1, 2007.

Bally Total Fitness Holding Corp. and its debtor-affiliates and
subsidiaries again filed voluntary petitions under Chapter 11 on
December 3, 2008 (Bankr. S.D.N.Y., Lead Case No. 08-14818).
Their counsel is Kenneth H. Eckstein, Esq., at Kramer Levin
Naftalis & Frankel LLP, in New York.  As of September 30, 2008,
the Company (including non-debtor affiliates) had consolidated
assets totaling approximately $1.376 billion and recorded
consolidated liabilities totaling approximately $1.538 billion.

Bankruptcy Creditors' Service, Inc., publishes Bally Bankruptcy
News.  The newsletter provides gavel-to-gavel coverage of the
Chapter 11 proceedings of Bally Total Fitness Holding Corp. and
its debtor-affiliates (http://bankrupt.com/newsstand/or
215/945-7000)


BALLY TOTAL: Court Approves Additional Roles for Deloitte
---------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Bally Total Fitness Holding Corporation and its debtor-
affiliates to engage Deloitte Tax to render additional advisory
and compliance services, as their tax service providers in their
Chapter 11 cases.

Deloitte will:

   -- continue ongoing background analysis and initial planning
      of the Debtors' restructuring progress;

   -- conduct a study to determine the tax basis in the Company's
      assets on an entity basis;

   -- compute Cancellation of Debt Income and providing
      corresponding implications of debt and other liability
      restructurings on an entity basis;

   -- prepare a model that effects the Debtors existing
      limitation under Section 382 of the Bankruptcy Code, the
      impact of built in gains/losses and other various elements
      of the debt restructuring;

   -- assist the Debtors in determining the state of the
      reorganization, specifically for selected states with
      material presence; and

   -- perform a detailed tax stock basis study for purposes of
      executing the entity rationalization analysis without
      triggering tax issues.

                     About Bally Total Fitness

Based in Chicago, Illinois, Bally Total Fitness Holding Corp.
(Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates
fitness centers in the U.S., with over 375 facilities located in
26 states, Mexico, Canada, Korea, China, and the Caribbean under
the Bally Total Fitness(R), Bally Sports Clubs(R), and Sports
Clubs of Canada (R) brands.

Bally Total and its affiliates filed for Chapter 11 protection
on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after
obtaining requisite number of votes in favor of their pre-
packaged Chapter 11 plan.  Joseph Furst, III, Esq., at Latham &
Watkins, L.L.P., represents the Debtors in their restructuring
efforts.  As of June 30, 2007, the Debtors had US$408,546,205 in
total assets and US$1,825,941,54627 in total liabilities.

The Debtors filed their Joint Prepackaged Plan & Disclosure
Statement on July 31, 2007.  The Court confirmed the Plan in
September 2007.  The Plan was declared effective October 1, 2007.

Bally Total Fitness Holding Corp. and its debtor-affiliates and
subsidiaries again filed voluntary petitions under Chapter 11 on
December 3, 2008 (Bankr. S. D. N. Y., Lead Case No. 08-14818).
Their counsel is Kenneth H. Eckstein, Esq., at Kramer Levin
Naftalis & Frankel LLP, in New York.  As of September 30, 2008,
the Company (including non-debtor affiliates) had consolidated
assets totaling approximately $1.376 billion and recorded
consolidated liabilities totaling approximately $1.538 billion.

Bankruptcy Creditors' Service, Inc., publishes Bally Bankruptcy
News.  The newsletter provides gavel-to-gavel coverage of the
Chapter 11 proceedings of Bally Total Fitness Holding Corp. and
its debtor-affiliates (http://bankrupt.com/newsstand/or
215/945-7000)


BALLY TOTAL: Court Extends Cash Collateral Order Until June 26
--------------------------------------------------------------
Pursuant to an eighth interim order, Judge Burton R. Lifland of
the U.S. Bankruptcy Court for the Southern District of New York
authorized Bally Total Fitness Holding Corporation and its debtor-
affiliates to use their cash collateral in accordance with their
budget, consisting of a consolidated nine-week forecast from the
period from April 24 to June 26, 2009.

The Court allowed the Debtors to use the Cash Collateral from the
Petition Date through the earlier of (a) the date a further order
is entered granting or denying the Motion and (b) 11:59 p.m.,
Eastern Time, on June 4, 2009.

Judge Lifland clarified that the Cash Collateral may be used
during the Specified Period solely up to the amounts, not to
exceed 115% of the amounts set forth in the Budget on a
cumulative, aggregate rolling basis measured weekly as of the
close of business on Friday of each week.  The authorization for
the Debtors to use Cash Collateral will terminate at the
expiration of the Specified Period.

The Court further authorized, but not directed, Wells Fargo
Foothill, LLC, as revolving credit agent to the Credit Agreement
among the Debtors, Morgan Stanley Senior Funding, Inc., and the
CIT Group/Business Credit, Inc., to extend, amend, replace, renew
or reissue any Letter of Credit outstanding under the Agreement as
of the Petition Date, provided that:

  (i) the aggregate face amount of the sum of Letters of Credit
      outstanding after any Amendment does not exceed the
      aggregate face amount of the L/Cs outstanding as of the
      Petition Date; and

(ii) the Amendment is on substantially the same terms and
      conditions as any L/Cs outstanding under the Agreement as
      of the Petition Date.

No action taken by the Revolving Agent will adversely affect the
validity of the claims, or the validity and priority of the liens
of the Senior Secured Creditors in the Debtors' cases, the Court
ruled.

Pursuant to Section 362(a) of the Bankruptcy Code, the Court
granted Prepetition Secured Creditors with:

  (1) interest payments for the benefit of the lenders under
      the Revolver Facility;

  (2) reimbursement of administrative expenses and professional
      fees in connection with monitoring the Debtors' use of
      Cash Collateral and the Chapter 11 Cases, on a monthly
      basis and in accordance with the Budget.

  (3) Letter of Credit fees under the Credit Agreement in
      connection with L/Cs that have been extended, amended,
      replaced, renewed or reissued;

  (4) Senior Secured Lenders' Replacement Liens on all of the
      Debtors' rights in property acquired postpetition of the
      same type as the prepetition collateral; and the
      encumbered leases in the same relative priority as the
      prepetition liens of the Prepetition Secured Creditors;

  (5) Senior Secured Notes Replacement Liens for Senior Secured
      Noteholders, or second priority perfected replacement
      Liens on all of the Debtors' rights in the Postpetition
      Collateral;

  (6) Senior Secured Lenders' Real Estate Liens, which provides
      for first priority perfected liens on all of the Debtors'
      rights in the unencumbered leases in the same relative
      priority as the Prepetition Liens; and

  (7) Senior Secured Notes Real Estate Liens, or second priority
      perfected liens on the Unencumbered Leases.

A full-text copy of Bally II's Eight Interim Cash Collateral
Order is available for free at:

http://bankrupt.com/misc/BallyII_8thInterimCashCollOrder.pdf

Judge Lifland will convene a hearing to consider the Debtors' Cash
Collateral Motion, on a final basis, on June 3, 2009.

                     About Bally Total Fitness

Based in Chicago, Illinois, Bally Total Fitness Holding Corp.
(Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates
fitness centers in the U.S., with over 375 facilities located in
26 states, Mexico, Canada, Korea, China, and the Caribbean under
the Bally Total Fitness(R), Bally Sports Clubs(R), and Sports
Clubs of Canada (R) brands.

Bally Total and its affiliates filed for Chapter 11 protection
on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after
obtaining requisite number of votes in favor of their pre-
packaged Chapter 11 plan.  Joseph Furst, III, Esq., at Latham &
Watkins, L.L.P., represents the Debtors in their restructuring
efforts.  As of June 30, 2007, the Debtors had US$408,546,205 in
total assets and US$1,825,941,54627 in total liabilities.

The Debtors filed their Joint Prepackaged Plan & Disclosure
Statement on July 31, 2007.  The Court confirmed the Plan in
September 2007.  The Plan was declared effective October 1, 2007.

Bally Total Fitness Holding Corp. and its debtor-affiliates and
subsidiaries again filed voluntary petitions under Chapter 11 on
December 3, 2008 (Bankr. S. D. N. Y., Lead Case No. 08-14818).
Their counsel is Kenneth H. Eckstein, Esq., at Kramer Levin
Naftalis & Frankel LLP, in New York.  As of September 30, 2008,
the Company (including non-debtor affiliates) had consolidated
assets totaling approximately $1.376 billion and recorded
consolidated liabilities totaling approximately $1.538 billion.

Bankruptcy Creditors' Service, Inc., publishes Bally Bankruptcy
News.  The newsletter provides gavel-to-gavel coverage of the
Chapter 11 proceedings of Bally Total Fitness Holding Corp. and
its debtor-affiliates (http://bankrupt.com/newsstand/or
215/945-7000)


BALLY TOTAL: Court Extends Removal Period to September 1
--------------------------------------------------------
At the behest of Bally Total Fitness Holding Corporation and its
debtor-affiliates, Judge Burton R. Lifland of the U.S. Bankruptcy
Court for the Southern District of New York extended the period
within which the Debtors may remove civil actions and proceedings
in state and federal courts pending on or before the Petition
Date, to the later of:

  (a) September 1, 2009; or

  (b) 30 days after the entry of an order terminating the
      automatic stay with respect to the particular Civil Action
      sought to be removed.

The Order is without prejudice to (i) any position the Debtors may
take regarding whether Section 362 of the Bankruptcy Code applies
to stay any Actions, and (ii) the Debtors' right to seek from
further extensions of the Removal Period under Rule 9027(a) of the
Federal Rules of Bankruptcy Procedure, Judge Lifland ruled.

According to Bradley O'Neill, Esq., at Kramer Levin Naftalis &
Frankel LLP, in New York, the Debtors have devoted substantially
all their time and resources towards stabilizing their operations
and moving their Chapter 11 cases toward an expeditious and
efficient exit.  However, he says, due to the number of Civil
Actions involved and the complex nature of the Civil Actions, the
Debtors require additional time to determine which, if any, of the
Civil Actions should be removed and, if appropriate, transferred.

Mr. O'Neill assures the Court that the Debtors' Removal Period
Extension request will not prejudice the rights of the adverse
parties pursuant to the stayed Civil Actions because the parties
may not prosecute the Civil Actions absent relief from the
automatic stay.  Furthermore, if the Debtors remove any Civil
Action to a federal court, the affected adverse party will retain
its right to seek remand of the removed Civil Action back to state
court under Section 1452(b) of the Judiciary and Judicial
Procedures Code.

                     About Bally Total Fitness

Based in Chicago, Illinois, Bally Total Fitness Holding Corp.
(Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates
fitness centers in the U.S., with over 375 facilities located in
26 states, Mexico, Canada, Korea, China, and the Caribbean under
the Bally Total Fitness(R), Bally Sports Clubs(R), and Sports
Clubs of Canada (R) brands.

Bally Total and its affiliates filed for Chapter 11 protection
on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after
obtaining requisite number of votes in favor of their pre-
packaged Chapter 11 plan.  Joseph Furst, III, Esq., at Latham &
Watkins, L.L.P., represents the Debtors in their restructuring
efforts.  As of June 30, 2007, the Debtors had US$408,546,205 in
total assets and US$1,825,941,54627 in total liabilities.

The Debtors filed their Joint Prepackaged Plan & Disclosure
Statement on July 31, 2007.  The Court confirmed the Plan in
September 2007.  The Plan was declared effective October 1, 2007.

Bally Total Fitness Holding Corp. and its debtor-affiliates and
subsidiaries again filed voluntary petitions under Chapter 11 on
December 3, 2008 (Bankr. S. D. N. Y., Lead Case No. 08-14818).
Their counsel is Kenneth H. Eckstein, Esq., at Kramer Levin
Naftalis & Frankel LLP, in New York.  As of September 30, 2008,
the Company (including non-debtor affiliates) had consolidated
assets totaling approximately $1.376 billion and recorded
consolidated liabilities totaling approximately $1.538 billion.

Bankruptcy Creditors' Service, Inc., publishes Bally Bankruptcy
News.  The newsletter provides gavel-to-gavel coverage of the
Chapter 11 proceedings of Bally Total Fitness Holding Corp. and
its debtor-affiliates (http://bankrupt.com/newsstand/or
215/945-7000)


BALLY TOTAL: Files Suit vs. Waterways Plaza for Breach of Lease
---------------------------------------------------------------
Bally Total Fitness of Midwest, Inc., and Waterways Plaza, LLC,
are parties to a lease dated July 9, 1997, relating to a
commercial center located at 3455 NE 207th Street, in Aventura,
Florida.  The Premises, which Waterways owns, is leased by the
Debtors for their Aventura Club fitness center.

Jordan Kaye, Esq., at Frankel LLP, in New York, relates that in
May 2007, Waterways advised the Debtors regarding the need to make
necessary repairs on the roof of the Leased Premises.  Under the
terms of the Lease, Bally is obligated to ensure that the Leased
Premises, including its roof, are maintained in "good repair", in
"substantially equivalent in quality and workmanship as the
original work."  The Debtors subsequently notified Waterways that
they desired to install and pay for a new roof system.

In June 2007, Waterways filed an eviction action in Miami-Dade
County Court to recover possession of the Premises on the grounds
that Bally had defaulted in its obligation under the Lease to
maintain the premises in good repair.  While the Lease does not
require the Debtors to obtain Waterways' consent or approval
regarding the planning or implementation of the repair work, the
City of Aventura requires a landlord's signature on the permitting
documents necessary for a roof installation.  Accordingly, the
Debtors sought Waterways' approval of a proposal to permit the
immediate installation of the new roof system.

However, Waterways refused to sign the Permitting Documents,
effectively obstructing the Debtors' right under the Lease to
install a new roof, Mr. Kaye says.

Pursuant to a complaint filed by the Debtors for injunctive relief
and damages against Waterways, the Miami-Date Circuit Court
directed the Debtors and Waterways to "work together to permit the
necessary limited repairs to resolve the current roof leaks on an
interim basis without prejudice to either party."  But Waterways
still refused to sign the necessary Permits.

Mr. Kaye believes that Waterways desires to initiate a major
reconstruction and reconfiguration of the commercial complex in
which the Aventura Club is located.  For this plan to be
implemented, Waterways needs the Debtors to vacate the Leased
Premises so that the existing structure can be torn down.

However, because the Lease does not expire until 2017 and Bally
has several tenant options to extend the term of the Lease,
Waterways is "wrongfully interfering" with the Debtors' efforts to
replace the roof in an effort to gain additional leverage in its
attempt to convince the Debtors to relocate the Aventura Club, Mr.
Kaye maintains.

Pursuant to an agreement, Waterways agreed to temporary roof
repairs on the Premises in June 2008.  However, the temporary
repairs now prove insufficient to withstand another wet season,
and the roof is in need of immediate and complete replacement.

In this regard, the Debtors are being "irreparably harmed" because
the damaged roofs are causing and will continue to:

   -- cause damage to the Debtors' property;

   -- affect the Debtors' ability to generate new business; and

   -- affect the Debtors' ability to maintain goodwill with
      existing customers.

Accordingly, the Debtors seek entry on an order:

   (1) enjoining Waterways from obstructing the Debtors' efforts
       to install a new roof on the Leased Premises; and

   (2) directing payment of damages arising from Waterways'
       breach of the Lease.

                     About Bally Total Fitness

Based in Chicago, Illinois, Bally Total Fitness Holding Corp.
(Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates
fitness centers in the U.S., with over 375 facilities located in
26 states, Mexico, Canada, Korea, China, and the Caribbean under
the Bally Total Fitness(R), Bally Sports Clubs(R), and Sports
Clubs of Canada (R) brands.

Bally Total and its affiliates filed for Chapter 11 protection
on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after
obtaining requisite number of votes in favor of their pre-
packaged Chapter 11 plan.  Joseph Furst, III, Esq., at Latham &
Watkins, L.L.P., represents the Debtors in their restructuring
efforts.  As of June 30, 2007, the Debtors had US$408,546,205 in
total assets and US$1,825,941,54627 in total liabilities.

The Debtors filed their Joint Prepackaged Plan & Disclosure
Statement on July 31, 2007.  The Court confirmed the Plan in
September 2007.  The Plan was declared effective October 1, 2007.

Bally Total Fitness Holding Corp. and its debtor-affiliates and
subsidiaries again filed voluntary petitions under Chapter 11 on
December 3, 2008 (Bankr. S. D. N. Y., Lead Case No. 08-14818).
Their counsel is Kenneth H. Eckstein, Esq., at Kramer Levin
Naftalis & Frankel LLP, in New York.  As of September 30, 2008,
the Company (including non-debtor affiliates) had consolidated
assets totaling approximately $1.376 billion and recorded
consolidated liabilities totaling approximately $1.538 billion.

Bankruptcy Creditors' Service, Inc., publishes Bally Bankruptcy
News.  The newsletter provides gavel-to-gavel coverage of the
Chapter 11 proceedings of Bally Total Fitness Holding Corp. and
its debtor-affiliates (http://bankrupt.com/newsstand/or
215/945-7000)


BALLY TOTAL: Kramer Levin Seeks $2.4MM for December-March Work
--------------------------------------------------------------
Eight bankruptcy professionals in the Chapter 11 cases of Bally
Total Fitness Holding Corporation and its debtor-affiliates ask
the U.S. Bankruptcy Court for the Southern District of New York to
award them payment of their fees and reimbursement of their
expenses on account of services rendered to the Debtors and the
Official Committee of Unsecured Creditors during these fee
periods:

Professional                    Fees      Expenses   Fee Period
------------                    ----      --------   ----------
BDO Seidman, LLP, as          $558,516     $8,988     12/03/08
auditors for the Debtors                             to 03/31/09

Butler Rubin Saltarelli        124,275      1,369     12/19/08
& Boyd LLP, as conflicts                             to 03/31/09
counsel to the Committee

Curtis, Mallet-Prevost,        683,814     42,881     12/03/08
Colt & Mosle LLP, as                                 to 03/31/09
conflicts counsel
for the Debtors

Deloitte Tax LLP, as           792,267          0     12/03/08
tax services providers                               to 03/31/09
to the Debtors

FTI Consulting, Inc.           517,741      4,009     12/31/08
as financial advisors                                to 03/31/09
to the Committee

Houlihan Lokey Howard          590,322     28,884     12/03/08
& Zukin Capital                                      to 03/31/09
as financial advisors
to the Debtors

Kramer Levin Naftalis        2,432,184     85,986     12/03/08
& Frankel LLP, as                                    to 03/31/09
attorneys for the Debtors

Hilco Real Estate, LLC         262,500         56     12/15/08
as real estate consultants                           to 03/31/09
to the Debtors

Hilco previously requested payment of fees amounting to $300,000,
and subsequently filed an updated Fee Application reflecting
$262,500 as the corrected amount.

                     U.S. Trustee Reacts

Diana G. Adams, United States Trustee for Region 2 contends that
there should be a "significant percentage fee reduction . . . or
"hold back" of the Professionals' requested fees.

Ms. Adams says that a Chapter 11 plan and disclosure statement
have not been filed in the Debtors' cases.  Similarly, the
Debtors' statements of operations consistently report losses
aggregating more than $9 million for the months of December 2008
and January and February 2009.  In March 2009, the Debtors
reported losses of more than $4.8 million.

Consequently, the ultimate benefit to the estates of the
Professional Fees being requested simply cannot be assessed yet.
In the same manner, fees that have been previously awarded, but
were "held back", should not be paid at this time, she says.

The final outcome of the Debtors' cases is an important factor in
evaluating the results achieved by the Fee Applicants.  Because
those results still are unknown, the imposition of a significant
percent interim hold back is appropriate, Ms. Adams tells the
Court, citing In re Child World, Inc., 185 B.R. 14, 18 (Bankr.
S.D.N.Y. 1995).

                     About Bally Total Fitness

Based in Chicago, Illinois, Bally Total Fitness Holding Corp.
(Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates
fitness centers in the U.S., with over 375 facilities located in
26 states, Mexico, Canada, Korea, China, and the Caribbean under
the Bally Total Fitness(R), Bally Sports Clubs(R), and Sports
Clubs of Canada (R) brands.

Bally Total and its affiliates filed for Chapter 11 protection
on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after
obtaining requisite number of votes in favor of their pre-
packaged Chapter 11 plan.  Joseph Furst, III, Esq., at Latham &
Watkins, L.L.P., represents the Debtors in their restructuring
efforts.  As of June 30, 2007, the Debtors had US$408,546,205 in
total assets and US$1,825,941,54627 in total liabilities.

The Debtors filed their Joint Prepackaged Plan & Disclosure
Statement on July 31, 2007.  The Court confirmed the Plan in
September 2007.  The Plan was declared effective October 1, 2007.

Bally Total Fitness Holding Corp. and its debtor-affiliates and
subsidiaries again filed voluntary petitions under Chapter 11 on
December 3, 2008 (Bankr. S. D. N. Y., Lead Case No. 08-14818).
Their counsel is Kenneth H. Eckstein, Esq., at Kramer Levin
Naftalis & Frankel LLP, in New York.  As of September 30, 2008,
the Company (including non-debtor affiliates) had consolidated
assets totaling approximately $1.376 billion and recorded
consolidated liabilities totaling approximately $1.538 billion.

Bankruptcy Creditors' Service, Inc., publishes Bally Bankruptcy
News.  The newsletter provides gavel-to-gavel coverage of the
Chapter 11 proceedings of Bally Total Fitness Holding Corp. and
its debtor-affiliates (http://bankrupt.com/newsstand/or
215/945-7000)


BANK OF AMERICA: Has Modified Mortgages for Over 50,000 Borrowers
-----------------------------------------------------------------
Ruth Simon at The Wall Street Journal reports that Bank of America
Corp. has modified mortgages for more than 50,000 borrowers as
part of a settlement with state attorneys general against
Countrywide Financial Corp.

The move potentially saves financially troubled homeowners as much
as $823 million, WSJ said, citing a report provided to state
officials this week.

The settlement covers 390,000 borrowers, according to WSJ.  About
42 states have signed on to the settlement, the report states.

As reported by the Troubled Company Reporter on April 28, 2009,
Countrywide Financial had been blamed for aggressive lending
practices that helped, in part, to fuel the housing boom.
Countrywide faces a federal probe and several lawsuits concerning
its business practices.  BofA decided to let go of the Countrywide
name and to rebrand the home mortgage lender as Bank of America
Home Loans.

WSJ relates that as agreed with the state attorneys general, BofA
will modify the terms of certain subprime mortgages and option
adjustable-rate mortgages serviced by Countrywide.  It covers
modifications offered or made between December 2008 and March
2009, says WSJ.  The report states that about 42 states have
signed on to the settlement.

The modifications -- 93% of which involved subprime mortgages --
done are saving borrowers an average of $195 per month in
principal and interest payments, WSJ says, citing BofA.

According to WSJ, investors who own securities backed by
Countrywide Financial mortgages complained that BofA has shifted
the cost of the settlement to them.  BofA, says WSJ, owns 12% of
the loans at issue in the settlement.  An investor already filed a
complaint with the U.S. District Court for the Southern District
of New York on who should pay the modifications, WSJ states.

Based in Charlotte, North Carolina, Bank of America --
http://www.bankofamerica.com/-- is one of the world's largest
financial institutions, serving individual consumers, small and
middle market businesses and large corporations with a full range
of banking, investing, asset management and other financial and
risk-management products and services.  The Company serves more
than 59 million consumer and small business relationships with
more than 6,100 retail banking offices, nearly 18,700 ATMs and
online banking with nearly 29 million active users.  Following the
acquisition of Merrill Lynch on January 1, 2009, Bank of America
is among the world's leading wealth management companies and is a
global leader in corporate and investment banking and trading
across a broad range of asset classes serving corporations,
governments, institutions and individuals around the world.  Bank
of America offers support to more than 4 million small business
owners.  The company serves clients in more than 150 countries.
Bank of America Corporation stock is a component of the Dow Jones
Industrial Average and is listed on the New York Stock Exchange.

The bank needed the government's financial help in completing its
acquisition of Merrill Lynch.

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

As reported by the Troubled Company Reporter on March 27, 2009,
Moody's Investors Service lowered the senior debt rating of Bank
of America Corporation to A2 from A1, the senior subordinated debt
rating to A3 from A2, and the junior subordinated debt rating to
Baa3 from A2.  The preferred stock rating was downgraded to B3
from Baa1.  The holding company's short-term rating was affirmed
at Prime-1.


BANKUNITED FINANCIAL: Files for Chapter 11 Bankruptcy Protection
----------------------------------------------------------------
BankUnited Financial Corporation, the holding company to
BankUnited, FSB, has filed for Chapter 11 bankruptcy protection
before the U.S. Bankruptcy Court for the Southern District of
Florida.

As reported by the Troubled Company Reporter, the Office of Thrift
Supervision on May 21 closed BankUnited FSB, the largest among 36
banks so far closed this year, and the Federal Deposit Insurance
Corporation was appointed as receiver.  The FDIC has facilitated a
sale of the bank to a management team headed by John Kanas, a
veteran of the banking industry and former head of North Fork
Bank, and a group of investors led by W.L. Ross & Co.  BankUnited,
FSB, had assets of $12.80 billion and deposits of $8.6 billion as
of May 2, 2009.  Under the deal with the FDIC, the purchasing
entity, to be named BankUnited, will assume $12.7 billion in
assets and $8.3 billion in nonbrokered deposits.

BankUnited FSB was not included in the Chapter 11 filings.  A news
release by BankUnited Financial Corp. stated that the FDIC, as
receiver, by operation of law succeeds to "all rights, titles,
powers, and privileges of the insured depository institution, and
of any stockholder, member, accountholder, depositor, officer, or
director of such institution with respect to the institution and
the assets of the institution; and title to the books, records,
and assets of any previous conservator or other legal custodian of
such institution." 12 U.S.C. 1821(d)(2).  "Given the financial
condition of the Bank, it is unlikely that the Company will be
entitled to any distribution from the FDIC as receiver for the
Bank," BUFC said.

In its bankruptcy petition, BankUnited Financial Corp. said it has
assets of $37,729,520 against debts of $559,740,185.

On May 15, 2009, BankUnited Financial Corp. received a non-
compliance notice from the Nasdaq Stock Market stating that,
because the Company did not timely file its Quarterly Report on
Form 10-Q for the period ended March 31, 2009, it does not comply
with the rules for continued listing, including Rule 5250(c)(1),
which require the Company to file with Nasdaq, on a timely basis,
all reports and other documents required to be filed with the
Securities and Exchange Commission.  The Company received on
December 17, 2008 a non-compliance notice from the Nasdaq in
connection with its Form 10-K, and a similar non-compliance letter
in connection with its Quarterly Report on Form 10-Q for the
fiscal quarter ended December 31, 2008.  On February 18, 2009, the
Company submitted a plan to regain compliance through the filing
of its Annual Report on Form 10-K for the period ended September
30, 2008 and the 2009 First Quarter Form 10-Q, and was granted 180
calendar days from the due date of the Form 10-K, or until June
15, 2009, to regain compliance for its delinquent filings.  The
May 15 Notice requires the Company to provide by June 1, 2009, an
update to its original plan to regain compliance and restates the
date of June 15, 2009 as the deadline for the filing of its 2008
Form 10-K and its Quarterly Reports on Forms 10-Q.


BANKUNITED FINANCIAL: Case Summary & 10 Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: BankUnited Financial Corporation
        c/o Shutts & Bowen LLP
        201 South Biscayne Blvd.
        Miami, FL 33131

Bankruptcy Case No.: 09-19940

Debtor-affiliates filing Chapter 11 petitions:

        Entity                                     Case No.
        ------                                     --------
BankUnited Financial Services Incorporated         09-19941
CRE America Corporation                            09-19942

Type of Business: BankUnited Financial Corp. --
                  http://www.bankunited.com/-- was the holding
                  company for BankUnited FSB, the largest banking
                  institution headquartered in Coral Gables,
                  Florida.  On May 21, 2009, BankUnited FSB was
                  closed by regulators and the Federal Deposit
                  Insurance Corporation facilitated a sale of the
                  bank to a management team headed by John Kanas,
                  a veteran of the banking industry and former
                  head of North Fork Bank, and a group of
                  investors led by W.L. Ross & Co.  BankUnited,
                  FSB, had assets of $12.80 billion and deposits
                  of $8.6 billion as of May 2, 2009.  BankUnited
                  is the largest among 36 banks so far closed this
                  year.

Chapter 11 Petition Date: May 22, 2009

Court: Southern District of Florida (Miami)

Judge: Laurel M Isicoff

Debtor's Counsel: Stephen P. Drobny, Esq.
                  Peter Levitt, Esq.
                  Shutts & Bowen LLP
                  1500 Miami Center
                  201 S. Biscayne Blvd.
                  Miami, FL 33131
                  Tel: (305) 347-7362

The Debtors' financial condition as of March 31, 2009:

Total Assets: $37,729,520

Total Debts: $559,740,185

The Debtors have $237,261,000 trust preferred securities,
$120,000,000 convertible subordinated senior notes, $12,500,000
junior subordinated debentures, and $184,000,000 convertible
subordinated senior HiMEDS.

The Debtors listed 1,226,853 noncumulative convertible prefereed
stock, Series B; and $35,507,988 Class A and 719,947 Class B
shares of common stock.

The Debtors' Largest Unsecured Creditors:

   Entity                      Nature of Claim   Claim Amount
   ------                      ---------------   ------------
The Bank of New York           HiMEDS            $184,000,000
101 Barclay St. - 8W
New York, NY 10286
Tel: (212) 815-5845
Fax: (732) 667-9317

US Bank - Corporate Trust      senior notes      $120,000,000
Services
60 Livington Avenue
St. Paul, MN 55107
Tel: (651) 495-3800

Wilmington Trust Co.           securities        $118,171,000
1100 N. Market Street
Wilmington, DE 19890
Tel: (302) 636-6043

US Bank National Association   securities        $82,765,000
PO Box 960778
Boston, MA 02196
Tel: (617) 603-6599

Wells Fargo Delaware Trust     securities        $51,547,000
Company
919 North Market St., Ste 1600
Wilmington, DE 19801
Tel: (302) 575-2010

Waterford Township             litigation        unliquidated

Stearns Weaver                 legal             unknown

Tew Cardenas                   legal             unknown

Coffey Burlington              legal             unknown

Robert Morris                  vendor            unknown

BankUnited Financial Corp.'s petition was signed by Bradley S.
Weis, chief restructuring officer.


BERRY PLASTICS: S&P Downgrades Corporate Credit Rating to 'SD'
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
corporate credit rating on Berry Plastics Group Inc. to 'SD' from
'CC', and its rating on Group's senior unsecured term loan to 'D'
from 'C'.

This action follows the announcement that BP Parallel LLC, a
subsidiary of Group, agreed to pay about $147 million to purchase
assignments of $472.9 million principal amount of Group's senior
unsecured term loan, and that as of May 8, 2009, the company had
closed on $105.9 million of these assignments.  Management expects
to close on the remainder in the fiscal third quarter ending
approximately June 30, 2009.  The principal amount of the term
loan, which is currently pay-in-kind, was $580 million as of
March 28, 2009.

"We view the transaction as a distressed exchange because
debtholders will receive significantly less than the accreted
principal amount of the loan," said Standard & Poor's credit
analyst Cynthia Werneth.  "Once the transaction has been
completed, S&P plan to reassess Group's default risk and recovery
prospects."

At the same time, S&P affirmed all its ratings on Berry Plastics
Corp. (Berry; B-/Stable/--).

At March 28, 2009, Group's total adjusted debt was about
$4.3 billion.  S&P adjust debt to include about $270 million of
capitalized operating leases and unfunded postretirement
liabilities.

The ratings on Evansville, Indiana-based Berry reflect risks
associated with the company's very highly leveraged financial
profile and acquisition-driven growth strategy as well as its weak
business risk profile.  Berry is a leading producer of rigid
plastic packaging products for relatively stable dairy, food,
beverage, health care, and other consumer product applications.
It also manufactures plastic film products for which demand is
somewhat more cyclical.  Pro forma for the transaction,
consolidated leverage (including Group debt) declines slightly but
remains very aggressive at near 8x total adjusted debt to EBITDA.
Funds from operations to adjusted total debt also remains weak in
the mid-single-digit percentage area.

As of March 28, 2009, Berry had $135 million of cash and
$252 million of unused availability under a committed asset-based
credit facility (after accounting for outstanding letters of
credit and an $18.3 million reduction of the facility size to
$381.7 million following the bankruptcy of one of the lenders).
The facility is subject to a borrowing base of eligible accounts
receivable and inventory, and matures in 2013.  This facility has
no maintenance covenants unless availability falls below 10%.

Liquidity and free cash flow have improved in recent months,
helped by a significant decline in plastic resin costs.  S&P
expects raw material costs to remain lower in 2009 than 2008.  In
addition, benefits from significant operating cost reductions and
recent acquisitions should offset continued market softness.  S&P
expects capital spending to remain at about current levels (about
$100 million in the first half of fiscal 2009) as the company
continues to expand its thermoforming operations.  Debt maturities
are minimal during the next few years, with only $17 million to
$21 million maturing in each of the next few years.

Despite very aggressive debt leverage, S&P believes that, in the
absence of additional sizable debt repurchases or large
acquisitions, current operating trends and lower plastic resin
costs should result in sufficient liquidity to meet foreseeable
needs.  S&P could lower the ratings if demand for Berry's products
deteriorates beyond S&P's expectations, or if liquidity declines
meaningfully because of an unexpected spike in raw material costs,
acquisitions, or additional debt repurchases.


BOYD GAMING: Moody's Downgrades Corporate Family Rating to 'B1'
---------------------------------------------------------------
Moody's Investors Service lowered the ratings of Boyd Gaming
Corporation.  Boyd's Corporate Family Rating and Probability of
Default Rating were lowered to B1 from Ba3.  The company's senior
subordinated notes were lowered to B3 from B2, and its Speculative
Grade Liquidity rating was lowered to SGL-3 from SGL-2.  The
rating outlook is negative.  This rating action concludes the
review process that was initiated on February 24, 2009.

The downgrade was in response to Moody's expectation that there
will be a continuation of weak gaming demand trends in the Las
Vegas Locals market.  This will make it difficult for Boyd to
meaningfully reduce leverage over the near to medium term to
levels acceptable to the prior rating.  Debt/EBITDA (including
Borgata cash distributions only) is currently about 7 times.  This
high leverage reflects a considerable amount of debt-financed
development spending related Boyd's Echelon development, which has
been delayed indefinitely.  The Las Vegas Locals market accounts
for close to 50% of Boyd's wholly-owned property EBITDA and has
experienced a significant decline in EBITDA since the beginning of
2008.

The negative outlook acknowledges that Boyd remains weakly
positioned within its current rating category.  The continuation
or acceleration of weak gaming demand trends could pressure credit
metrics enough to prompt a downgrade.  The negative outlook also
incorporates the continued uncertainty regarding Boyd's bid to
acquire all or a portion of Station Casinos, Inc.

The revision of Boyd's Speculative Grade Liquidity rating to SGL-3
(adequate liquidity) from SGL-2 (good liquidity) considers Moody's
expectation that weak demand trends in the Las Vegas Locals market
will continue to pressure Boyd's operating cash flow and possibly
its ability to maintain compliance with its financial covenants.

These ratings were lowered:

  -- Corporate Family Rating to B1 from Ba3

  -- Probability of Default Rating to B1 from Ba3

  -- Speculative Grade Liquidity rating to SGL-3 from SGL-2

  -- 7.125% senior subordinated notes due 2016 to B3 (LGD 6, 92%)
     from B2 (LGD 5, 89%)

  -- 7.750% senior subordinated notes due 2012 to B3 (LGD 6, 92%)
     from B2 (LGD 5, 89%)

  -- 6.750% senior subordinated notes due 2014 to B3 (LGD 6, 92%)
     from B2 (LGD 5, 89%)

The last rating action for Boyd was on February 24, 2009 when
Moody's placed the company's Ba3 Corporate Family Rating, Ba3
Probability of Default Rating, and B2 senior subordinate notes on
review for possible downgrade.

Boyd Gaming Corporation wholly-owns and operates gaming and
entertainment facilities located in Nevada, Mississippi, Illinois,
Louisiana, and Indiana.  The company is also 50% partner in a
joint venture that owns and operates the Borgata Hotel Casino in
Atlantic City, New Jersey.  The company generates about $2 billion
of annual net revenue.


CANWEST MEDIA: Sells C$100MM in 12% Notes, Gets C$75MM Loan
-----------------------------------------------------------
Canwest Global Communications Corp. on Friday said its
subsidiaries, Canwest Media Inc. and Canwest Television Limited
Partnership, have closed transactions with certain members of the
ad hoc committee of 8% senior subordinated noteholders and CIT
Business Credit Canada Inc.

The Purchasers bought the U.S. dollar equivalent of C$105 million
principal amount of 12% senior secured notes of CMI and Canwest
Television Limited Partnership for an aggregate purchase price of
the U.S. dollar equivalent of C$100 million.  CIT will provide a
C$75 million senior secured revolving asset-based loan facility to
CMI.

These facilities are intended to provide Canwest with sufficient
credit availability to operate its business in the ordinary course
as it continues its work to effect a recapitalization transaction.
CMI has used proceeds from the two facilities to, among other
things, repay the current lenders all amounts owing under CMI's
existing senior credit facility and settle related obligations.

Senior lenders under the Company's existing credit facility
extended their waiver agreement until June 2, 2009, and also
agreed to defer certain payments aggregating roughly $10 million
until June 2, 2009, which will allow completion of the new
facilities.

CMI and the members of the Ad Hoc Committee have entered into a
further agreement and forbearance until June 15, 2009, subject to
completion of the issuance of the Senior Secured Notes.

CMI has agreed to satisfy certain milestones within certain time
frames, including:

     * On or before June 15, 2009, reaching an agreement in
       principle with members of the Ad Hoc Committee in respect
       of a recapitalization transaction.

     * On or before July 15, 2009, entering into a definitive
       agreement with members of the Ad Hoc Committee with respect
       to the recapitalization transaction.

Earlier this month, CMI agreed to sell its indirect interests in
four Turkish radio stations.  Completion of the sale is expected
to occur on or before June 2, 2009.

Terms of the sale of Super FM, Metro FM, Joy Turk, and Joy FM to
Spectrum Medya, a Turkey-based company, were not disclosed.  Net
proceeds will be applied to reduce obligations under the CMI
credit facility.

                     About Canwest Global

Canwest Global Communications Corp. -- http://www.canwest.com/--
(TSX: CGS and CGS.A,) an international media company, is Canada's
largest media company.  In addition to owning the Global
Television Network, Canwest is Canada's largest publisher of
English language daily newspapers and owns, operates and/or holds
substantial interests in conventional television, out-of-home
advertising, specialty cable channels, web sites and radio
stations and networks in Canada, New Zealand, Australia,
Turkey,Indonesia, Singapore, the United Kingdom and the United
States.

                         *     *     *

As reported in the Troubled Company Reporter on May 5, 2009,
Standard & Poor's Ratings Services said it assigned its 'CCC'
long-term corporate credit rating to Toronto-based newspaper
publisher Canwest Limited Partnership.  The outlook is negative.

At the same time, S&P lowered the senior secured debt rating on
the company to 'CCC' (the same as the corporate credit rating)
from 'CCC+'.  S&P also revised the recovery rating on Canwest LP's
senior secured debt to '3' from '2'.  The '3' recovery rating
indicates S&P's opinion of an expectation of meaningful (50%-70%)
recovery in the event of a default, in contrast to a '2' recovery
rating, which indicates S&P's opinion of an expectation of
substantial (70%-90%) recovery.  Standard & Poor's revised the
recovery rating due to S&P's use of a lower EBITDA amount
andEBITDA multiple in the event of default.


CABLEVISION SYSTEMS: To Raise $423.8MM in Common Stock Offering
---------------------------------------------------------------
Cablevision Systems Corp. filed a Form S-8 Registration Statement
with the Securities and Exchange Commission to register roughly
23,000,000 shares of Cablevision NY Group Class A Common Stock.
Cablevision will offer the shares at $18.43 apiece, and expects to
raise $423,890,000.

Cablevision early this month reported that consolidated net
revenues grew 10.6% to $1.903 billion for the first quarter ended
March 31, 2009, compared to the prior year period, reflecting
solid revenue growth in Telecommunications Services and the
addition of Newsday and Sundance in the 2009 results.
Consolidated adjusted operating cash flow increased 14.3% to
$590.0 million and consolidated operating income grew 21.3% to
$297.8 million, both compared to the prior year period.
Cablevision posted net income of $19.9 million for the first
quarter.

At March 31, 2009, Cablevision had $9.55 billion in total assets
and $14.90 billion in total liabilities resulting in $5.36 billion
in stockholders' deficit.

The Board of Directors of Cablevision has authorized the company's
management to explore the spin-off of its Madison Square Garden
business.

Cablevision Systems Corporation -- http://www.cablevision.com/--
is one of the nation's leading media and entertainment companies.
Its cable television operations serve more than 3 million
households in the New York metropolitan area.  The company's
advanced telecommunications offerings include its iO: Interactive
Optimum digital television, Optimum Online high-speed Internet,
Optimum Voice digital voice-over-cable, and its Optimum Lightpath
integrated business communications services.  Cablevision operates
several programming businesses, including AMC, IFC, Sundance
Channel and WE tv, through Rainbow Media Holdings LLC, and serves
the New York area as publisher of Newsday and other niche
publications through Newsday LLC.  In addition to these
businesses, Cablevision owns Madison Square Garden and its sports
teams, the New York Knicks, Rangers and Liberty.  The company also
operates New York's famed Radio City Music Hall, the Beacon
Theatre, and The Chicago Theatre, and owns and operates Clearview
Cinemas.

                            *     *     *

As reported by the Troubled Company Reporter on May 22, 2009,
Moody's Investors Service upgraded Cablevision Systems
Corporation's Corporate Family Rating and Probability of Default
Rating, each to Ba2 from Ba3.  In addition, Moody's upgraded the
instrument ratings of Cablevision's and its subsidiaries' debt as
detailed below.  Cablevision's speculative grade liquidity rating
remains at SGL-2 and the rating outlook is stable.


CAPMARK FINANCIAL: Extends Closing Date for $1.15-Bil. Facility
---------------------------------------------------------------
Capmark Financial Group Inc. said that the anticipated closing
date for its new term loan facility of up to $1.5 billion has been
extended to allow additional time to finalize the loan
documentation.

Capmark has been working with the lenders to prepare definitive
agreements for the Facility and the parties agreed that additional
time was required to complete the work.  Proceeds from the
Facility, along with $75.0 million in cash, will be used to
refinance a portion of Capmark's bridge loan agreement and senior
credit facility.

To facilitate the closing of the Facility and certain related
amendments to Capmark's bridge loan agreement and senior credit
facility to be executed in connection with the closing of the
Facility, Capmark has obtained a further extension of the maturity
date of 100% of the outstanding principal balance under its bridge
loan agreement until May 29, 2009, and a further waiver, which
will be effective until May 29, 2009, of its compliance with the
leverage ratio covenants in its bridge loan agreement and senior
credit facility for the quarters ended December 31, 2008, and
March 31, 2009.

The closing of the Facility is subject to the negotiation and
execution of mutually agreeable definitive documentation with
respect to the Facility and the bridge loan and senior credit
facility amendments, as well as other closing conditions.  Capmark
expects to execute the amendments and close the Facility by
May 29, 2009; however, there can be no assurances that Capmark
will be able to complete these transactions in this timeframe or
at all.

                          About Capmark

Based in Horsham, Pennsylvania, Capmark Financial Group Inc. --
http://www.capmark.com/-- is a diversified company that provides
a broad range of financial services to investors in commercial
real estate-related assets.  Capmark has three core businesses:
lending and mortgage banking, investments and funds management,
and servicing.  Capmark operates in North America, Europe and
Asia.

As reported by the TCR on Apr. 30, 2009, Moody's Investors Service
downgraded the senior unsecured ratings of Capmark Financial Group
Inc. to 'Caa1' from 'B2', with the rating remaining under review
for possible downgrade.  The rating action reflects the
explanatory note in Capmark's 10-K filing in which its auditors
raise doubt about the company's ability to continue as a going
concern, as well as the still unresolved nature of Capmark's
efforts to modify the terms of its bridge loan agreement and
senior credit facility, which could have implications for its
liquidity and funding.


CHRYSLER LLC: Responds to Indiana State Treasurer Protest
---------------------------------------------------------
Indiana State Treasurer Richard Mourdock is protesting Chrysler
LLC's Chapter 11 proceeding and sale on behalf of three state
pension funds that he oversees.

Chrysler strongly believes Indiana Treasurer Mourdock's position
is wrong. Satisfying the Indiana Treasurer's demands would lead to
the liquidation of Chrysler, resulting in the loss of more than
4,000 Chrysler jobs and 9,000 retiree pensions in Indiana alone.

The combined Chrysler-related investments in the three state
pension funds in question totaled approximately $17 million. The
cumulative loss on these investments under the proposed
transaction would be approximately $2 million. Chrysler's
liquidation analysis shows first lien lenders would get between
zero and 18 cents on the dollar in liquidation, versus 29 cents in
the proposed transaction. However, Chrysler believes this range is
unlikely and that there is low probability of a high-side outcome.

The Company believes it is more likely to be on the very low end,
as for the entire time that Chrysler has been in Chapter 11, it
has had very few bids for its assets. Thus, under a liquidation
scenario, the loss to Chrysler's employees, suppliers and dealers
would be far more: in the tens of billions of dollars.

Treasurer Mourdock has expressed that he takes his "oath of office
and fiduciary responsibilities very, very seriously." Chrysler
believes Treasurer Mourdock is risking significantly further loss,
and would be living up to his fiduciary responsibilities by
accepting the terms that 98 percent of other creditors accepted.
The Treasurer's actions lead one to wonder if his motives are
financial or political.

Chrysler is committed to supporting its operations in Indiana,
where more than $150 million are paid annually to Chrysler
employees, $20 million in state taxes are paid by Chrysler
employees, $3 billion of materials are purchased from more than
200 Indiana-based suppliers, and approximately 3,750 people are
employed at 75 Chrysler dealerships. Additionally, Chrysler has
donated more than $6.5 million to non-profit and community
organizations in Indiana statewide in the past 10 years.

The three funds Treasurer Mourdock oversees are:

      * Indiana State Teachers Retirement Fund -- This is a
        reported $7.8 billion fund.  The Chrysler debt is less
        than 1% of the fund ($32.2 million or 0.466% of
        Chrysler first lien debt)

      * Indiana State Police Pension Trust -- This is a reported
        $250 million fund. The Chrysler debt is less than 1%
        of the fund.  ($1.3 million or 0.019% of Chrysler first
        lien debt)

      * Indiana Major Move Construction -- This is a reported
        $2.5 billion fund.  The Chrysler debt is less than 1% of
        the fund ($8.8 million or 0.128% of Chrysler first
        lien debt)

The combined Chrysler debt to the three funds is $42.3 million
(0.6% of Chrysler's first lien debt).

While the three funds have a face value of $42.3 million, the
purchase price was approximately $17 million.  They would receive
$15 million, for a total investment loss of $2 million.

Under Chapter 11, Chrysler's first lien creditors were allocated
$2 billion (instead of the $7 billion in original debt).  About
98% of the first lien creditors have agreed to this allocation.

The Indiana Treasurer is willing to put Chrysler in liquidation
over less than 1% of the three funds assets.

                        About Chrysler LLC

Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures 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.

In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion.  Daimler AG kept a 19.9% stake.

Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC.  The Treasury purchased senior
preferred stock from GMAC LLC.  In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009.  Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability.  However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.

The U.S. Government told Chrysler March 31, 2009, it would provide
up to $6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the $4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.

On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002).  U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller
lenders,including hedge funds that he didn't name -- "a small
group of speculators" -- refused to make the concessions agreed to
by the Company's major debt holders and workers.

In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.

Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.

Chrysler says that as of December 31, 2008, it had $39,336,000,000
in assets and $55,233,000,000 in debts.  Chrysler had $1.9 billion
in cash at that time.

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


CHRYSLER LLC: Proposes Tax Settlement Deal with Daimler, et al.
---------------------------------------------------------------
Chrysler LLC and its affiliated debtors ask the U.S. Bankruptcy
Court for the Southern District of New York to approve a tax
settlement agreement with:

   * Daimler AG;
   * Daimler North America Finance Corporation;
   * Daimler Investments US Corporation; and
   * CG Investment Group LLC, a division of Cerberus Investment
     Advisors L.P.

The settlement deal was hammered out by the companies to resolve
the dispute among Chrysler, Chrysler Holding LLC, Chrysler Canada
Inc., Daimler North and Daimler Investments regarding Chrysler
entities' rights to indemnification for taxes under a contribution
agreement dated May 14, 2007.  The companies disputed over certain
transfer pricing issues that have arisen in Canada, and a dispute
over the amount of the deductible that Chrysler entities are
required to satisfy to claim tax indemnity payments from Daimler
AG pursuant to the contribution agreement.

The contribution agreement was inked as part of Cerberus'
acquisition of a controlling interest in Chrysler and Chrysler
Financial from Daimler AG.  Under the deal, Daimler North and
Daimler Investments agreed to indemnify Chrysler for "excluded
taxes" for the period ending on or before August 2007, and are
entitled to receive tax refunds for that period.

The transactions contemplated by the contribution agreement closed
and the Daimler divestiture became effective on August 3, 2007.

Attorney for Chrysler, Corinne Ball, Esq., at Jones Day, in New
York, says that approval of the tax settlement agreement will
assist in facilitating the deal that Chrysler entered into with
Italy-based automaker, Fiat S.p.A. and New CarCo Acquisition LLC.

"[The settlement] provides for [Chrysler's] rights to tax
indemnification on a going forward basis, and specifies that those
rights are fully assignable to [New CarCo] without being subject
to any third party consent," Ms. Ball says in court papers.  She
adds that the settlement would also eliminate uncertainties
regarding Chrysler's continued operations in Canada and would
provide Chrysler with an immediate cash flow benefit.

A copy of the tax settlement agreement is available without charge
at http://bankrupt.com/misc/ChryslerTaxSettlement.pdf

The hearing to consider approval of the settlement is scheduled
for May 27, 2009.  Creditors and other concerned parties have
until May 26, 2009 to file their objections.

                        About Chrysler LLC

Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures 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.

In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion.  Daimler AG kept a 19.9% stake.

Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC.  The Treasury purchased senior
preferred stock from GMAC LLC.  In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009.  Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability.  However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.

The U.S. Government told Chrysler March 31, 2009, it would provide
up to $6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the $4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.

On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002).  U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller
lenders,including hedge funds that he didn't name -- "a small
group of speculators" -- refused to make the concessions agreed to
by the Company's major debt holders and workers.

In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.

Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.

Chrysler says that as of December 31, 2008, it had $39,336,000,000
in assets and $55,233,000,000 in debts.  Chrysler had $1.9 billion
in cash at that time.

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


CHRYSLER LLC: Proposes GMAC, Treasury Deal to Give Dealer Loans
---------------------------------------------------------------
Chrysler LLC and its affiliates sought and obtained approval from
Judge Arthur Gonzalez, pursuant to Sections 105, 363(b) and 364(b)
of the Bankruptcy Code, to enter into the Master Transaction
Agreement, dated May 20, 2009, among Chrysler, GMAC LLC, the
United States Department of the Treasury and the U.S. Dealer
Automotive Receivables Transition LLC.

The Debtors filed the GMAC MTA under seal.  The Debtors said the
documents contain proprietary and sensitive information that
reflects the detailed terms and agreements among the parties.
They also noted that public release of the information would
compromise the arrangement and provide third parties with an
improvident glimpse into the confidential nature of the GMAC
transaction and of the parties to the GMAC MTA.

Corinne Ball, Esq., at Jones Day, in New York, said the Debtors
entered into the GMAC MTA to facilitate provision of financing to
the Debtors' dealers and retail customers, who are crucial to the
Debtors' ability to assure that the eventual purchaser of the
Debtors' assets is able to generate revenue once the assets are
sold, and New Chrysler recommences operations.

Following Chrysler LLC's bankruptcy filing, Chrysler Financial
Services Americas LLC, which provided wholesale financing to
approximately 62% of the Dealers as of the Petition Date,
announced that it would no longer provide additional funding under
the wholesale lines of the Dealers, because the filing of the
Chapter 11 cases caused Chrysler Financial's conduit sources of
financing to cease.

To address the lack of funding, Ms. Balls said, Chrysler, GMAC and
certain other parties entered into a binding term sheet of a
master autofinance agreement contemplating a series of agreements
to enable GMAC to provide substitute wholesale financing to
dealers previously financed by Chrysler Financial.  In
conjunction, Chrysler, Chrysler Financial and certain other
parties entered into a risk sharing arrangement, whereby Chrysler
Financial, which has liens on most of the Dealers' assets, agreed
to grant consents and waivers for Chrysler and GMAC to begin
operating under the GMAC MAFA.

The GMAC MTA, which is the product of numerous intense and
complicated negotiations among the parties, is designed to address
the loss sharing arrangement contemplated in the GMAC MAFA, Ms.
Ball said to Judge Gonzalez.  She said the LSA protects GMAC from
certain potential losses that it may incur due to its obligations
under the GMAC MAFA, hence, facilitating dealer financing that is
of crucial benefit to the bankruptcy estates.  Without the LSA,
GMAC is not obligated to perform under the GMAC MAFA.

The GMAC MAFA contemplated that GMAC would be provided with an LSA
to reimburse GMAC for certain losses, if any, which may be
incurred in connection with making financing available under the
GMAC MAFA.  Ms. Ball said Chrysler will be lent an additional $600
million in accordance with the terms of the debtor-in-possession
financing facility.  Pursuant to the GMAC MTA, the funds will be
transferred to U.S. Dealer Automotive and will be utilized for the
sole purpose of reimbursing GMAC and its subsidiaries for certain
losses, if any, that GMAC and its subsidiaries may incur in
connection with the financing arranged under the terms of the
previously approved GMAC MAFA.

Ms. Ball argued that the GMAC MTA provides GMAC with credit
support and a means to protect it against potential losses that it
could incur in connection with the financing it is providing
pursuant to the GMAC MAFA.  She said the protection will enable
GMAC to provide financing to the Debtors' dealer network so that
the Dealers can continue to operate, and thus, preserve the going
concern value for the benefit of the estates.

Put simply, the GMAC MTA is essential for the Debtors to preserve
their estates and provide enterprise value to the eventual
purchaser of their assets as contemplated by the proposed purchase
agreement with Fiat, or a sale on substantially comparable terms,
Ms. Ball says.  She points out that the Debtors' businesses cannot
survive and the sale process contemplated in the cases cannot work
without sufficient financing for the Dealers, and the GMAC MAFA
may be terminated without an efficient and otherwise satisfactory
LSA.

                        About Chrysler LLC

Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures 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.

In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion.  Daimler AG kept a 19.9% stake.

Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC.  The Treasury purchased senior
preferred stock from GMAC LLC.  In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009.  Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability.  However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.

The U.S. Government told Chrysler March 31, 2009, it would provide
up to $6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the $4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.

On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002).  U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller
lenders,including hedge funds that he didn't name -- "a small
group of speculators" -- refused to make the concessions agreed to
by the Company's major debt holders and workers.

In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.

Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.

Chrysler says that as of December 31, 2008, it had $39,336,000,000
in assets and $55,233,000,000 in debts.  Chrysler had $1.9 billion
in cash at that time.

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


CHRYSLER LLC: Court Approves Jones Day as Lead Bankruptcy Counsel
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Chrysler LLC and its affiliates to employ Jones Day as
counsel in their Chapter 11 cases, nunc pro tunc to the petition
date.

Jones Day will be paid for its services and reimbursed for any
related expenses in accordance with applicable provisions of
Sections 330 and 331 of the Bankruptcy Code.

Jones Day is authorized to: (a) complete its reconciliation of
prepetition fees and expenses actually incurred through the
Petition Date no later than the date of filing of its first
interim fee application; and (b) make a corresponding adjustment
to the amount and application of the Retainer.  However, Jones Day
will not apply any portion of the Retainer to fees and expenses
incurred from and after the Petition Date unless and until
authorized to do so by a further Court order.

If Jones Day's standard hourly billing rates change during the
Chapter 11 cases, Jones Day will notify the U.S. Trustee and any
official committee appointed in the Cases and file a notice of the
rate changes with the Court.

           Jones Day Files Supplemental Declaration

Prior to the Court's entry of its order approving Jones Day's
representation of the Debtors, the firm, as part of its ongoing
disclosure responsibilities under Rule 2014 of the Federal Rules
of Bankruptcy Procedure, reexamined its relationships with
interested parties in the Debtors' Chapter 11 cases.

According to the firm, it researched its client database for the
past two years to determine whether any entities not identified in
the Prior Disclosure, but that (a) were unknown to Jones Day at
the time of the Prior Disclosure or (b) may have taken a role in
matters relating to the Chapter 11 cases since the completion of
the Prior Conflict Searches, are current or former clients of the
firm.

The list of the Additional Parties is available for fee at:

http://bankrupt.com/misc/Chrysler_JonesDApp_1stSuppD_AdditionalParties.pdf

Corrine Ball, Esq., at Jones Day, in New York, said her firm does
not represent any of the Additional Parties in matters relating to
the Debtors or their Chapter 11 cases.

Furthermore, Jones Day filed an additional list of interested
parties that currently employ or have formerly employed Jones Day
in matters unrelated to the Debtors' Chapter 11 cases.  A list of
these parties is available for fee at:

http://bankrupt.com/misc/Chrysler_JonesDApp_1stSuppD_Sched2.pdf

Ms. Ball disclosed that Jones Day has represented Chrysler
Corporation, the predecessor of Debtor Chrysler LLC, in several
transactional matters.  These representations occurred
sporadically over a number of years.  The most notable was the
restructuring of the Hayden paint facility at the Debtors' Toledo
"supply park," a matter that lasted approximately two months.

In the Prior Declaration, Jones Day disclosed past or current
client relationships with these parties: (a) certain suppliers;
(b) certain of the Prepetition Secured Lenders; (c) certain of the
Debtors' competitors; (d) General Motors Corporation; (e) Cerberus
Bavarian Investments, B.V. Daimler AG.  Jones Day's work for each
of these entities represented less than 1% of the Firm's revenues
for the past 12 months, Ms. Ball relates.

Ms. Ball attested that no Jones Day employee holds equity in the
Debtors, which are privately held entities, and insofar has been
able to ascertain that Jones Day has no connection with the
Debtors, their creditors, the U.S. Trustee or any other party with
an actual or potential interest in the Chapter 11 cases, or their
attorneys or accountants.

Jones Day has applied the Retainer proceeds to actual fees and
expenses and, in one instance immediately prior to the Petition
Date, to estimated fees and expenses.  According to Ms. Ball,
these Prepetition Draws totaled $13,098,207.

A more detailed summary of Jones Day's invoices and the related
Prepetition Draws for the 12 months prior to the Petition Date
shows:

  Invoice Date   Invoice Fees   Invoice Expenses   Invoice Total
  ------------   ------------   ----------------   -------------
  11/30/2008        $942,373         $15,981           $958,355
  12/15/2008        $877,165          $8,450           $885,615
  12/22/2008      $2,732,076         $42,227         $2,774,303
  12/29/2008        $375,000              $-           $375,000
  01/21/2009        $857,443        $167,255         $1,024,699
  02/28/2009      $1,465,815         $77,124         $1,542,939
  04/09/2009        $418,509         $20,042           $438,551
  04/10/2009        $819,101         $12,269           $831,371
  04/27/2009      $1,508,848         $39,396         $1,548,245
  04/28/2009      $2,700,274         $18,851         $2,719,125
                 ------------   ----------------   -------------
  Total          $12,696,608        $401,599        $13,098,207

Ms. Ball said the Debtors constitute a multinational enterprise
with potentially millions of creditors and other relationships.
Consequently, although every reasonable effort has been made to
discover and eliminate the possibility of any conflicts, Jones Day
is unable to state with certainty whether every client
representation or other connection has been disclosed.  In this
regard, Ms. Ball said, if Jones Day discovers additional
information that requires disclosure, Jones Day will file an
additional supplemental disclosure with the Court as promptly as
possible.

Accordingly, Ms. Ball ascertained Jones Day has no interest
adverse to the Debtors or their estates in the matters for which
the Firm has been retained in the Chapter 11 cases.  Jones Day
continues to be a "disinterested person," as that term is defined
in Section 101(14) of the Bankruptcy Code, she said.

As reported by the TCR on May 21, Chrysler withdrew its request
that Jones Day's and Capstone Advisory Group, LLC's "fees and
expenses incurred in its representation of the [automaker be]
granted superpriority status, pursuant to section 364(c)(1) of the
Bankruptcy Code" after the Honorable Arthur J. Gonzalez signaled
at Wednesday's hearing that he would not be inclined to approve
that unusual provision absent evidence that no other competent law
firm or financial advisor would represent Chrysler in its Chapter
11 restructuring on normal payment terms.   Neither Judge Gonzalez
nor any other party-in-interest raised any complaint about Jones
Day's or Capstone's qualifications or disinterestedness.  The
Judge's discomfort focused solely on the issue of according
superpriority administrative expense claim status to Jones Day's
and Capstone's fees and expenses under 11 U.S.C. Sec. 364(c)(1) --
something that appears to have never happened in any chapter 11
case to date.  Judge Gonzalez entered orders on Wed., May 20, 2009
(Docs. 1311 and 1301) approving Jones Day's and Capstone's
employment . . . but without the superpriority administrative
claims expense status originally requested.

As a result, Jones Day and Capstone will share and share alike
with all other professionals representing Chrysler and its
creditors' committee.  If Chrysler's estate is administratively
insolvent, Jones Day, Capstone and all other professionals
employed and retained by Chrysler and its creditors' committee may
receive less than 100 cents-on-the-dollar for their services.

Court records suggest that Jones Day collected less than 100
cents-on-the-dollar in Levitz's Furniture's second chapter 11
filing (Bankr. S.D.N.Y. Case No. 07-13532).

                        About Chrysler LLC

Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures 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.

In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion.  Daimler AG kept a 19.9% stake.

Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC.  The Treasury purchased senior
preferred stock from GMAC LLC.  In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009.  Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability.  However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.

The U.S. Government told Chrysler March 31, 2009, it would provide
up to $6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the $4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.

On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002).  U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller
lenders,including hedge funds that he didn't name -- "a small
group of speculators" -- refused to make the concessions agreed to
by the Company's major debt holders and workers.

In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.

Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.

Chrysler says that as of December 31, 2008, it had $39,336,000,000
in assets and $55,233,000,000 in debts.  Chrysler had $1.9 billion
in cash at that time.

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


CHRYSLER LLC: Court OKs Capstone Engagement as Financial Advisor
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Chrysler LLC and its affiliates to employ Capstone
Advisory Group, LLC, nunc pro tunc to the petition date, as their
financial advisor.

The Engagement Letter between the parties has been further amended
to provide that Capstone will continue to provide professional
services to the Debtors' estates after the consummation of the
Fiat Transaction, including services relating to the winddown of
the Debtors' estates and the development of an orderly liquidation
plan or other alternative liquidation scenario.  Capstone will be
compensated for the Post-Sale Services on an hourly basis at rates
indicated in the Amended Engagement Letter, plus reimbursement of
Capstone's actual, necessary expenses incurred.

Capstone will maintain time records for Post-Sale Services in
accordance with the U.S. Trustee's guidelines for compensation and
reimbursement of expenses.  Capstone has agreed not to be
reimbursed on a monthly, interim or final basis in connection with
the Post-Sale Services until after September 30, 2009; provided
that the Transaction Fee will be paid at the closing of the
underlying sale transaction subject to subsequent review of the
Official Committee of Unsecured Creditors, and the U.S. Trustee.

Capstone will be compensated for its services and reimbursed for
any related expenses in accordance with applicable provisions of
Sections 328, 330 and 331 of the Bankruptcy Code.

The unapplied portion of the Retainer will constitute a general
security retainer for postpetition services and expenses, and will
be held by Capstone subject to further Court order.  Upon an Order
approving an interim and final fee application, Capstone will
apply the Retainer against its then-unpaid fees and expenses in
respect of Capstone's fee applications filed and approved in
accordance with the applicable provisions of the Bankruptcy Code.

Furthermore, prior to seeking reimbursement for any outstanding
fees and expenses against any carve-outs established in any
financing orders, Capstone will apply the remaining portion of its
Retainer against those outstanding fees.  The Retainer will not be
replenished as it is depleted during the course of the Chapter 11
cases.

The Debtors will indemnify Capstone, and hold Capstone harmless
against any claims to which Capstone may become subject arising in
connection with the rendering of services by Capstone under
the Amended Engagement Letter in a lawful manner, unless it is
finally judicially determined that the claims resulted from
Capstone's gross negligence, willful misconduct or breach of
fiduciary duty.

As reported by the TCR on May 21, Chrysler withdrew its request
that Jones Day's and Capstone Advisory Group, LLC's "fees and
expenses incurred in its representation of the [automaker be]
granted superpriority status, pursuant to section 364(c)(1) of the
Bankruptcy Code" after the Honorable Arthur J. Gonzalez signaled
at Wednesday's hearing that he would not be inclined to approve
that unusual provision absent evidence that no other competent law
firm or financial advisor would represent Chrysler in its Chapter
11 restructuring on normal payment terms.   Neither Judge Gonzalez
nor any other party-in-interest raised any complaint about Jones
Day's or Capstone's qualifications or disinterestedness.  The
Judge's discomfort focused solely on the issue of according
superpriority administrative expense claim status to Jones Day's
and Capstone's fees and expenses under 11 U.S.C. Sec. 364(c)(1) --
something that appears to have never happened in any chapter 11
case to date.  Judge Gonzalez entered orders on Wed., May 20, 2009
(Docs. 1311 and 1301) approving Jones Day's and Capstone's
employment . . . but without the superpriority administrative
claims expense status originally requested.

As a result, Jones Day and Capstone will share and share alike
with all other professionals representing Chrysler and its
creditors' committee.  If Chrysler's estate is administratively
insolvent, Jones Day, Capstone and all other professionals
employed and retained by Chrysler and its creditors' committee may
receive less than 100 cents-on-the-dollar for their services.

Court records suggest that Jones Day collected less than 100
cents-on-the-dollar in Levitz's Furniture's second chapter 11
filing (Bankr. S.D.N.Y. Case No. 07-13532).

                        About Chrysler LLC

Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures 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.

In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion.  Daimler AG kept a 19.9% stake.

Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC.  The Treasury purchased senior
preferred stock from GMAC LLC.  In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009.  Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability.  However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.

The U.S. Government told Chrysler March 31, 2009, it would provide
up to $6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the $4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.

On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002).  U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller
lenders,including hedge funds that he didn't name -- "a small
group of speculators" -- refused to make the concessions agreed to
by the Company's major debt holders and workers.

In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.

Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.

Chrysler says that as of December 31, 2008, it had $39,336,000,000
in assets and $55,233,000,000 in debts.  Chrysler had $1.9 billion
in cash at that time.

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


CHRYSLER LLC: Gets Green Light to Hire Togut as Conflicts Counsel
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Chrysler LLC and its affiliates to employ Togut, Segal
& Segal, LLP as their conflicts counsel on matters for which Jones
Day or the Debtors' other professionals cannot handle because the
matters involve their clients and could present a conflict of
interest, and other discrete duties.

As soon as a bankruptcy-related matter concerning any Counsel's
Client is identified in the Debtors' cases, Jones Day, in addition
to any duty it has under applicable statute or rule concerning
conflict matters, will have the duty to notify Togut of that fact
so that Togut may promptly advise the Debtors as it involves the
Counsel's Client.

If the Debtors are adverse to any Counsel's Client, Togut, and not
Jones Day, will represent the Debtors in the matter.

Togut will be paid in accordance with the standards and procedures
set forth in Sections 330 and 331 of the Bankruptcy Code.

                        About Chrysler LLC

Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures 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.

In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion.  Daimler AG kept a 19.9% stake.

Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC.  The Treasury purchased senior
preferred stock from GMAC LLC.  In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009.  Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability.  However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.

The U.S. Government told Chrysler March 31, 2009, it would provide
up to $6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the $4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.

On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002).  U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller
lenders,including hedge funds that he didn't name -- "a small
group of speculators" -- refused to make the concessions agreed to
by the Company's major debt holders and workers.

In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.

Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.

Chrysler says that as of December 31, 2008, it had $39,336,000,000
in assets and $55,233,000,000 in debts.  Chrysler had $1.9 billion
in cash at that time.

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


CHRYSLER LLC: Court Approves Schulte as Corporate Counsel
---------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Chrysler LLC and its affiliates to employ Schulte Roth
& Zabel LLP as their corporate counsel, nunc pro tunc to the
Petition Date.

The Firm will perform these services on behalf of the Debtors:

  (a) Schulte Roth will assist Jones Day in connection with
      these matters, whether in connection with the proposed
      transactions with Fiat or with respect to the post-closing
      winddown of the Debtors' estates,:

      * Completion of negotiations with Fiat regarding the
        various commercial agreements to be entered into in
        connection with the closing, including the Management
        Services Agreement, the Master Industrial Agreement, the
        Joint Procurement Agreement, the Master Product and
        Technology Agreement, the Global Distribution Agreement
        and the Information Technology Cooperation Agreement and
        their related agreements, and all schedules;

      * Completion of the Voluntary Employees' Beneficiary
        Association Trust indenture, the registration rights
        agreement for the common stock to be provided to the
        VEBA;

      * Completion of the negotiation and documentation of the
        Purchase Agreement;

      * Domestic and foreign antitrust clearance;

      * Documentation with respect to the transfer of real
        property and the preparation of documents to effectuate
        collateral for debtor-in-possession and exit financing;

      * Negotiation of transitional leases between Chrysler and
        the Purchaser for properties to be temporarily occupied
        by, but not acquired by, the Purchaser;

      * Advice on specialized areas of law, including tax,
        litigation and employment, where Schulte Roth has
        substantial pre-existing knowledge from its prior
        representation of the Debtors;

      * The Daimler Settlement pursuant to the Binding Term
        Sheet, dated as of April 27, 2009, by and among Daimler
        North America Finance Corporation, Daimler Investments
        US Corporation, Daimler AG, CG Investment Group, LLC,
        CG Investor, LLC, Chrysler Holding LLC, Chrysler LLC,
        Pension Benefit Guaranty Corporation.

      * The Tax Settlement pursuant to the Term Sheet, dated as
        of April 17, 2009, by and among DNAF, DIUS, Daimler,
        Investor, HoldCo, Chrysler LLC and Chrysler Canada
        Inc.;

      * Negotiation, documentation and implementation of those
        transaction documents for which Schulte Roth had, prior
        to the commencement of the Chapter 11 cases, primary
        responsibility; and

      * The consummation of the transactions contemplated by the
        Purchase Agreement.

  (b) Schulte Roth will not have any direct involvement in any
      matter that involves direct or indirect negotiations with
      (a) Cerberus Capital Management, L.P. or any of its
      affiliates, (b) Investor, (c) CGI, (d) HoldCo, or (e)
      Chrysler Financial Services Americas LLC.

  (c) Schulte Roth and Jones Day will use reasonable best
      efforts to avoid duplication or overlap of services.

Paragraph 5 of the parties' Engagement Letter dated April 21,
2009, is deleted in its entirety.

Schulte Roth will file fee applications for interim and final
allowance of compensation and disbursement of expenses pursuant to
the procedures set forth in Sections 330 and 331 of the Bankruptcy
Code.

                        About Chrysler LLC

Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures 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.

In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion.  Daimler AG kept a 19.9% stake.

Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC.  The Treasury purchased senior
preferred stock from GMAC LLC.  In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009.  Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability.  However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.

The U.S. Government told Chrysler March 31, 2009, it would provide
up to $6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the $4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.

On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002).  U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller
lenders,including hedge funds that he didn't name -- "a small
group of speculators" -- refused to make the concessions agreed to
by the Company's major debt holders and workers.

In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.

Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.

Chrysler says that as of December 31, 2008, it had $39,336,000,000
in assets and $55,233,000,000 in debts.  Chrysler had $1.9 billion
in cash at that time.

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


CHRYSLER LLC: Seeks to Hire Cahill as Counsel to Board Managers
---------------------------------------------------------------
Chrysler LLC and its affiliates seek permission from Judge Arthur
Gonzalez of the U.S. Bankruptcy Court for the Southern District of
New York to employ Cahill Gordon & Reindel LLP as special counsel
for three independent members of the board of managers of Chrysler
LLC in the Chapter 11 cases, nunc pro tunc to the Petition Date.

The Independent Managers -- James N. Chapman, George J. Zahringer
III, and Jonathan Gallen -- currently serve on the board of
managers of Chrysler, notes Holly E. Leese, senior vice president,
general counsel and secretary of Chrysler LLC.

The Independent Managers are unaffiliated with the Debtors, and in
general, their role is to supervise and review actions of the
Debtors and their affiliates, Ms. Leese notes.  Cahill has
represented the Independent Managers since December 2008.

According to Ms. Leese, the Debtors will engage Cahill to provide
legal services to the Independent Managers in connection with
their Chapter 11 cases.  The services will relate to the
responsibilities or obligations of the Independent Managers with
respect to a potential restructuring of the Debtors through their
proposed asset sale and otherwise, and any other issues likely to
be presented to or considered by the Independent Managers,
including:

  (a) reviewing documents, interviewing relevant personnel, and
      reporting to the Independent Managers regarding the
      Debtors' Chapter 11 cases;

  (b) advising the Independent Managers on bankruptcy and
      corporate law and other issues relating to the Debtors'
      Chapter 11 cases;

  (c) advising and assisting the Independent Managers in board
      and other meetings and communications with the Debtors,
      the Debtors' counsel, and other entities;

  (d) to the extent necessary, representing and advising the
      Independent Managers in any investigations or actions that
      may arise in connection with the Independent Manager's
      service on the board prior to and during the Chapter 11
      cases; and

  (e) performing the full range of services normally associated
      with matters specified.

Ms. Leese further notes that the Debtors will request that Cahill
undertake additional matters beyond the scope of responsibilities
disclosed.  Should Cahill agree in its discretion to undertake any
matter, the Debtors will take further appropriate action in
connection with the new scope of responsibilities.

By contrast to the roles to be served by the firms employed in the
Debtors' Cases, Cahill's postpetition work representing the
Independent Managers will not involve the conduct of the Chapter
11 cases themselves, Ms. Leese explains.  Accordingly, the
services rendered and the functions to be performed by Cahill will
not be duplicative of any bankruptcy-related work performed by any
other law firms employed by the Debtors, she says.  Furthermore,
Cahill will coordinate with the Debtors' other professionals to
ensure that its services are, to the maximum extent possible,
complementary to other professionals' services.

The Debtors will pay Cahill its fees, and reimburse Cahill of
actual and necessary out-of-pocket expenses.  Certain of the
amounts that may be incurred by Cahill in connection with the
proposed representation may be reimbursable by one or more
insurance policies, Ms. Leese points out.

Cahill's hourly rates are:

  Professional                      Hourly Rate
  ------------                      -----------
  Attorneys                        $368 and $888
  Paraprofessionals                $184 and $296

Cahill will maintain detailed contemporaneous time records and
apply to the Court for allowance of compensation and reimbursement
of expenses.

                     Disinterestedness

Ms. Leese informs the Court that Cahill has represented and may
continue to represent certain parties-in-interest in matters
unrelated to the Debtors' Cases and the matters upon which the
Firm will be retained.  A list of this Potential Creditors and
Parties-in-Interest can be found at the declaration of Joel H.
Levitin, Esq., a partner at Cahill.  A full-text copy of the
Declaration is available for free at:

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

Mr. Levitin further discloses that William T. Lifland, a retired
Cahill partner, is the cousin of the Honorable Burton R. Lifland,
United States Bankruptcy Judge for the Southern District of New
York; Thomas Kavaler, a Cahill partner, is the husband of the
Honorable Loretta Preska, United States District Judge for the
Southern District of New York; and David Owen, a Cahill Partner,
is the son of the Honorable Richard Owen, United States District
Judge for the Southern District of New York.

Mr. Levitin assures the Court that no other partner, associate, or
employee of Cahill is related to any current United States
Bankruptcy Judge or District Judge in the Southern District of New
York or is related to any employee of the United States Trustee's
office serving the Southern District of New York.

The Debtors believe that Cahill does not represent or hold any
interest adverse to them or their estates with respect to the
matters upon which it is to be employed.

The Court will convene a hearing to consider the Application on
June 3, 2009, at 11:00 a.m. (New York time).  Objections are due
on May 29, 2009, at 4:00 p.m. (New York time).

                        About Chrysler LLC

Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures 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.

In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion.  Daimler AG kept a 19.9% stake.

Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC.  The Treasury purchased senior
preferred stock from GMAC LLC.  In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009.  Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability.  However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.

The U.S. Government told Chrysler March 31, 2009, it would provide
up to $6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the $4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.

On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002).  U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller
lenders,including hedge funds that he didn't name -- "a small
group of speculators" -- refused to make the concessions agreed to
by the Company's major debt holders and workers.

In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.

Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.

Chrysler says that as of December 31, 2008, it had $39,336,000,000
in assets and $55,233,000,000 in debts.  Chrysler had $1.9 billion
in cash at that time.

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


CHRYSLER LLC: Creditors Panel Proposes Mesirow as Fin'l Advisors
----------------------------------------------------------------
The official committee of unsecured creditors in Chrysler LLC's
Chapter 11 cases seeks the U.S. Bankruptcy Court for the Southern
District of New York's authority to retain Mesirow Financial
Consulting, LLC, as its financial advisors, nunc pro tunc to
May 8, 2009.

As financial advisors to the Committee, Mesirow is expected to:

  (a) review and analyze the Debtors' sale procedures and
      proposed Fiat Alliance, including assets and liabilities
      retained by the Debtors and transferred to New Chrysler;

  (b) review and analyze potential recoveries to unsecured
      creditors and related liquidation analyses;

  (c) review and analyze cash flow budgets, including wind down
      costs and other transitional costs;

  (d) assist in the review of reports or filings as required by
      the Bankruptcy Court or the Office of the United States
      Trustee, including schedules of assets and liabilities,
      statements of financial affairs and monthly operating
      reports;

  (e) review of the Debtors' financial information, including
      analyses of cash receipts and disbursements, DIP budget,
      wind down budget, financial statement items and proposed
      transactions for which Bankruptcy Court approval is
      sought;

  (f) evaluate employee issues, including potential employee
      retention and severance plans, review and analyze
      pension funding and related liabilities, and other union
      related issues;

  (g) analyze assumption and rejection issues regarding
      executory contracts and leases, including dealers,
      suppliers, and other counterparties;

  (h) validate the Debtors' proposed restructuring and sale plan
      and the business and financial condition of the Debtors
      generally;

  (i) advice and assist the Committee in negotiations and
      meetings with the Debtors, the banks and other lenders,
      the United States Treasury, Cerberus Capital Management LC
      and its affiliates, Daimler-Benz AG and its affiliates,
      any other stakeholders and the financial and legal
      advisors for these parties;

  (j) advice and assist on the tax consequences of proposed
      transactions, including the Fiat Alliance and other asset
      sales;

  (k) assist with the claims resolutions and procedures,
      including analyses of creditors' claims by type and
      entity;

  (l) review and analyze potential fraudulent transfers,
      including specific transaction and forensic analyses;

  (m) provide litigation consulting services and expert witness
      testimony regarding confirmation issues, avoidance actions
      or other matters;

  (n) review and analyze exit and other new financing,
      including collateral analysis and cash flow validation;
      and

  (o) other functions as requested by the Committee or its
      counsel to assist the Committee in the chapter 11 cases.

The Firm will be paid based on its current normal and customary
hourly rates for financial advisory services:

  Level                                      Rates
  -----                                      -----
  Senior Managing Director,
   Managing Director and Director          $700 - $750
  Senior Vice-President                    $610 - $670
  Vice President                           $510 - $570
  Senior Associate                         $410 - $470
  Associate                                $220 - $350
  Paraprofessional                         $100 - $195

These are the professionals who will be working in connection with
Mesirow's representation of the Committee, together with their
hourly billing rate:

  Professional                                Hourly Rate
  ------------                                -----------
  Larry H. Lattig, Senior Managing Director       $750
  Ben Pickeirng, Senior Managing Director         $750
  Edna Lee, Managing Director                     $700
  Krysten Thomas, Senior Vice President           $640
  Kate McGlynn, Vice President                    $570
  Scott Baker, Associate                          $350
  Gregory Pierce, Associate                       $220
  David Neziroski, Paraprofessional               $160

The Debtors will pay Mesirow for fees it incurred in the Chapter
11 cases and reimburse Mesirow for necessary expenses and other
out-of-pocket expenses incurred in providing professional
services.  The Firm will also be indemnified by the Debtors.

Larry Lattig, senior managing director of Mesirow, discloses that
Mesirow Financial Holdings, Inc., parent company of Mesirow, has
established an "Ethical Wall" between Mesirow and its other
subsidiaries, divisions and units.  The Ethical Wall prohibits
Mesirow from sharing confidential or non-public information
concerning the Debtors with any other employees of Mesirow
Financial.

Mesirow Financial has also implemented certain "Trading Wall"
procedures to ensure that information concerning transactions by
the Mesirow BD/IA Subsidiaries in Related Securities, as well as
other securities transactions by the Mesirow BD/IA Subsidiaries,
will not be available to the employees of Mesirow.

The securities transacted by the Mesirow BD/IA Subsidiaries may
include securities issued by the Debtors, creditors, stakeholders
or other parties-in-interest in the Chapter 11 cases.

Mr. Lattig assures the Court that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.  Mesirow does not hold or represent an interest
adverse to the estates with respect to the matter on which it will
be employed, he says.

Mesirow has also submitted to the Court a list of parties that the
firm have had business relationships with, currently render or
have previously rendered services in matters unrelated to the
Chapter 11 case.  A full-text copy of the list is available for
free at http://bankrupt.com/misc/Chrysler_MesirowApp_ExB.pdf

                        About Chrysler LLC

Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures 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.

In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion.  Daimler AG kept a 19.9% stake.

Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC.  The Treasury purchased senior
preferred stock from GMAC LLC.  In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009.  Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability.  However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.

The U.S. Government told Chrysler March 31, 2009, it would provide
up to $6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the $4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.

On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002).  U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller
lenders,including hedge funds that he didn't name -- "a small
group of speculators" -- refused to make the concessions agreed to
by the Company's major debt holders and workers.

In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.

Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.

Chrysler says that as of December 31, 2008, it had $39,336,000,000
in assets and $55,233,000,000 in debts.  Chrysler had $1.9 billion
in cash at that time.

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


CHRYSLER LLC: Proposes Sale Protocol for De Minimis Assets
----------------------------------------------------------
Pursuant to Sections 105, 363 and 365 of the Bankruptcy Code,
Chrysler LLC and its affiliates seek authority to implement
procedures by which they may, from time to time, sell
miscellaneous assets that are no longer needed in their ongoing
business activities by private sale or public auction and pay
applicable broker commissions or auctioneer fees in the ordinary
course of business in connection with the sales without need for
further court approval, but subject to notice procedures.

Corinne S. Ball, Esq., at Jones Day, in New York, tells the U.S.
Bankruptcy Court for the Southern District of New York that the
Debtors continue to assess, evaluate and pursue opportunities for
further asset dispositions in an effort to maximize the value of
their estates and minimize excess costs.  In connection with these
efforts, the Debtors anticipate that they will dispose of certain
property on an ongoing basis.  She notes that given the relatively
de minimis value of the assets to be sold and the potential for a
significant number of sales, it is appropriate to establish
streamlined procedures for notice and approval of each
transaction.

Ms. Ball further submits that the use of brokers and auctions in
certain circumstances will significantly aid in the timely
disposition and realization of the maximum possible value for the
De Minimis Assets.

If the aggregate consideration for a De Minimis Asset is less than
or equal to $2,000,000 or the book value of assets to be sold at
an Auction is less than or equal to $2,000,000, the Debtors ask
that no notice or hearing be required for them to consummate a
sale or transfer.  Ms. Ball notes that the Debtors will maintain
records for all sales or transfers.

For the sale of De Minimis Assets outside the ordinary course of
business, the Debtors further propose that if (a) the aggregate
consideration to be provided for De Minimis Assets to be sold by
Private Sale or (b) the book value of De Minimis Assets to be sold
at an Auction, is greater than $2 million but less than $15
million, these procedures be approved and implemented in lieu of a
separate motion and hearing being conducted for each sale or
transfer:

  (a) The Debtors will serve a notice of each proposed sale on:
      (i) the Office of the United States Trustee for the
      Southern District of New York; (ii) counsel to any
      official committees appointed in the Chapter 11 cases;
      (iii) counsel to the DIP Lender; (iv) counsel to the
      administrative agent for the First Lien Prepetition
      Lenders; (v) any known holder of Other Liens asserted
      against the specific assets to be sold or transferred;
      (vi) the proposed purchaser or transferee if the
      transaction is to be completed by Private Sale; (vii) any
      known interested party in the De Minimis Assets proposed
      to be sold or transferred; and (viii) if applicable, the
      nondebtor counterparties to all executory contracts or
      unexpired leases that the Debtors propose to assume,
      assume and assign or reject in connection with the
      Proposed Sale.  The Sale Notice will be served by
      facsimile or e-mail, if possible, and by overnight mail.

  (b) The Sale Notice Parties will have until 5:00 p.m. New York
      Time on the fifth business day following the service of
      the Sale Notice to object to the Proposed Sale and the
      payment of any Commissions.

  (c) If no Objection is properly filed and served by the
      Objection Deadline, the Debtors will be authorized,
      without further notice and without further Court approval
      to: (i) either (A) for De Minimis Assets to be sold by
      Private Sale, consummate the Proposed Sale in accordance
      with the terms and conditions of the underlying contract
      or contracts or (B) for De Minimis Assets to be sold at
      Auction, conduct the Auction and sell the assets at the
      Auction, provided, however, that no sale at an Auction may
      be completed for consideration below the Minimum Bid
      identified in the applicable Sale Notice; and (ii) take
      other actions as are necessary to close the transaction
      and collect the proceeds of the sale, including, payment
      of any Commissions, and assumption, assumption and
      assignment or rejection of the executory contracts and
      unexpired leases described in the Sale Notice and payment
      of the Cure Claims proposed in the notice.

  (d) If a Sale Notice Party files and serves an Objection to
      the Proposed Sale by the Objection Deadline, the Debtors
      and the objecting party will use good faith efforts to
      resolve the objection consensually.  If the Debtors and
      the objecting Sale Notice Party are unable to resolve the
      objection, the Debtors will not consummate the proposed
      transaction without first obtaining Court approval of the
      Proposed Sale, including the payment of any Commissions,
      upon notice and a hearing; provided, however, that, with
      the agreement of the proposed purchaser, the Debtors may
      consummate any portion of the Proposed Sale that is not a
      subject of the Objection.

  (e) Any valid and enforceable liens on the property to be sold
      will attach to the net proceeds of the Proposed Sale in
      the same priority as existed prior to sale and subject to
      any claims and defenses that the Debtors may possess with
      respect thereto.  Net sale proceeds will be utilized by
      the Debtors in accordance with the terms of the DIP
      Financing Agreement, the Interim DIP Order, any Final DIP
      Order, the Interim Cash Collateral Order and any Final
      Cash Collateral Order or other financing arrangements as
      are in effect at the time.

  (f) If the sale transaction is to be completed by a Private
      Sale, to the extent that a competing bid is received for
      the purchase of De Minimis Assets in a particular Proposed
      Sale after service of the Sale Notice that, in the
      Debtors' sole discretion in the exercise of their business
      judgment, materially exceeds the value of the purchase
      price contained in the Sale Notice, then the Debtors may
      file and serve an amended Sale Notice for the Proposed
      Sale to the subsequent bidder pursuant to the Sale Notice
      Procedures, even if the proposed purchase price exceeds
      the Sale Cap.

  (g) The relevant Debtor or Debtors may consummate a Proposed
      Sale prior to the expiration of the applicable Objection
      Deadline if the Debtor or Debtors obtain each Notice
      Party's written consent to the Proposed Sale.  The
      applicable Proposed Sale, including the assumption,
      assumption and assignment or rejection of executory
      contracts and unexpired leases proposed in connection with
      the sale, will be deemed final and fully authorized by the
      Court upon either (i) for a Private Sale, (A) the
      expiration of the Objection Deadline without the assertion
      of any Objections or (B) the written consent of all Notice
      Parties; or (ii) for a sale by Auction, (A) the expiration
      of the Objection Deadline without the assertion of any
      Objections or the written consent of all Notice Parties
      and (B) the Debtors' acceptance of a qualifying bid in
      excess of the Minimum Bid at the Auction.

  (h) If the sale transaction is completed at an Auction, the
      applicable Debtor or Debtors will file with the Court and
      serve upon the Notice Parties a report of the results of
      the Auction within 10 days after the conclusion of the
      Auction.

Except as expressly set forth in any applicable Prepetition Sale
Agreement, all purchasers or transferees will take De Minimis
Assets sold or transferred by the Debtors "as is" and "where is"
without any representations or warranties from the Debtors as to
quality or fitness for either their intended purposes or any
particular purposes.

Nothing in the Sale Notice Procedures would prevent the Debtors,
in their sole discretion, from seeking Court approval of any
proposed sale transaction upon notice and a hearing or, if
necessary to comply with a condition on a sale imposed by a
purchaser, to submit a separate order to the Court along with a
notice of presentment to be entered without need for a hearing on
the matter.

Judge Arthur Gonzales will conduct a hearing of the Debtors'
request on June 3, 2009.  All objections must be filed on or
before May 29, 2009.

                        About Chrysler LLC

Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures 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.

In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion.  Daimler AG kept a 19.9% stake.

Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC.  The Treasury purchased senior
preferred stock from GMAC LLC.  In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009.  Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability.  However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.

The U.S. Government told Chrysler March 31, 2009, it would provide
up to $6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the $4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.

On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002).  U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller
lenders,including hedge funds that he didn't name -- "a small
group of speculators" -- refused to make the concessions agreed to
by the Company's major debt holders and workers.

In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.

Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.

Chrysler says that as of December 31, 2008, it had $39,336,000,000
in assets and $55,233,000,000 in debts.  Chrysler had $1.9 billion
in cash at that time.

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


CHRYSLER LLC: Seeks to Pay $400,000 to National Training Center
---------------------------------------------------------------
The UAW-Chrysler National Training Center was created as part of
the Debtors' collective bargaining agreements with the United Auto
Workers.  Currently, NTC oversees more than 30 joint programs that
provide education, training and support services for UAW-
represented employees at Chrysler.  Under the UAW CBAs, the NTC
receives its funding exclusively from the Debtors pursuant to a
formula pegged to hours worked in Chrysler's U.S. plants.

Corinne Ball, Esq., at Jones Day, in New York, tells the Court
that after meeting its most recent payroll, the NTC has become
perilously under funded, with a negative cash balance of $19,000.
Given that the Debtors' manufacturing plants are currently idled,
no postpetition amounts are currently accruing to the NTC.  Thus,
in order for the NTC to be able to continue to operate, it
requires $400,000 in cash over the next 45 days to pay operating
expenses, including payroll, utilities, taxes and insurance.

According to Ms. Ball, the Debtors owed at least $17.2 million to
the NTC, as of the Petition Date.

As has been represented by the Debtors in numerous pleadings filed
with the court, the UAW CBAs will be assumed and assigned to New
Chrysler as part of the Fiat Transaction, meaning that the NTC
Prepetition Claim will have to be satisfied in full as a condition
of assumption and assignment.

Pursuant to Sections 363(b)(1) and 105(a) of the Bankruptcy Code,
the Debtors ask the Court to authorize (a) them to make the NTC
Payment totaling $400,000 in the ordinary course of business and
(b) direct banks and other financial institutions to honor checks
or electronic payments made to the NTC.

Ms. Ball says that the payment of the $400,000 is warranted
pursuant to Section 363(b) of the Bankruptcy Code.  Section
363(b)(1) authorizes, after notice and a hearing, the Debtors to
"use, sell, or lease, other than in the ordinary course of
business, property of the estate."

Moreover, Ms. Ball says, the NTC Payment will ensure that the
Debtors' UAW workforce continues to receive vital training and
other aid, especially at a time when the Debtors' manufacturing
operations remain idled.  Because the Fiat Transaction provides
that the UAW CBAs will be assumed and assigned to New Chrysler,
the entire NTC Prepetition Claim will necessarily have to be
cured.  Thus, no party-in-interest will be prejudiced by the
request.

At the Debtors' behest, the Court will consider their Request, on
an expedited basis, on May 26, 2009, at 10:30 a.m.  Objections are
due on May 22, 2009, at 4:00 p.m.

                        About Chrysler LLC

Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures 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.

In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion.  Daimler AG kept a 19.9% stake.

Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC.  The Treasury purchased senior
preferred stock from GMAC LLC.  In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009.  Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability.  However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.

The U.S. Government told Chrysler March 31, 2009, it would provide
up to $6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the $4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.

On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002).  U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller
lenders,including hedge funds that he didn't name -- "a small
group of speculators" -- refused to make the concessions agreed to
by the Company's major debt holders and workers.

In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.

Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.

Chrysler says that as of December 31, 2008, it had $39,336,000,000
in assets and $55,233,000,000 in debts.  Chrysler had $1.9 billion
in cash at that time.

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


CINRAM INTERNATIONAL: S&P Raises Corporate Credit Rating to 'B'
---------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its long-term
corporate credit rating on Scarborough, Ontario-based Cinram
International Inc., a wholly owned indirect subsidiary of Cinram
International Income Fund, to 'B' from 'SD' (selective default).
The outlook is negative.

At the same time, S&P raised the senior secured revolving credit
facility rating on the company two notches to 'B' (the same as the
corporate credit rating) from 'CCC+'.  Furthermore, the 'D'
(default) rating on the senior secured term loan rating is
unchanged, and S&P expects to keep the 'D' rating in place until
March 29, 2010, or upon completion of Cinram's US$150 million cash
buyback.  The '4' recovery rating on the senior secured debt is
also unchanged, indicating S&P's expectation of an average (30%-
50%) recovery in the event of a payment default.

"The upgrade reflects the application of Standard & Poor's revised
criteria regarding distressed exchange offers," said Standard &
Poor's credit analyst Lori Harris.  "The revised criteria indicate
that the corporate credit rating should be raised to reflect
Cinram's credit risk after completion of the first debt buyback
below par, despite the fact that The Company has approval from its
bank group through an amendment to the credit agreement to buy
back debt below par until March 29, 2010," Ms. Harris added.  (See
"Rating Implications of Exchange Offers and Similar
Restructurings, Update," published May 12, 2009, on
RatingsDirect.)

This is in contrast to S&P's previous criteria, which indicated
that the corporate credit rating would remain at 'SD' until
completion of the debt buyback program.

The ratings on Cinram reflect what S&P views as the company's weak
operating performance, limited financial flexibility, and
vulnerable business risk profile (resulting from customer and
product concentration, seasonality, and the commodity-like nature
of the media replication industry).  Furthermore, the ratings
reflect Standard & Poor's concerns about long-term industry
fundamentals, including limited pricing power and S&P's
expectation that digital distribution will become a larger source
of studio revenues.  S&P believes these factors are partially
offset by Cinram's strong market position as the world's largest
manufacturer of prerecorded multimedia products and solid credit
protection measures for the ratings.

The negative outlook reflects Standard & Poor's view of Cinram's
challenges, including tight financial covenants and the
expectation of continued declining revenue and EBITDA, largely
resulting from difficult industry fundamentals and demand
uncertainty in the current economic recession.  S&P could consider
lowering S&P's ratings on Cinram if the company suffers a worse-
than-expected decline in EBITDA this year, which could pose a
renewed possibility of a covenant breach.  On the other hand, S&P
could revise the outlook to stable if there is a material increase
in covenant headroom as Cinram reduces debt leverage.


CIRCUIT CITY: Systemax Completes Purchase, Re-Launches Web Site
---------------------------------------------------------------
Systemax Inc. has completed the acquisition of the Circuit City e-
commerce business and launched the new and improved
CircuitCity.com Web site.  The new CircuitCity.com features low
everyday prices, great deals, a wide selection of products, fast
shipping, world-class 24/7 customer service, advanced search
capabilities, and enhanced content, including photo galleries and
videos of thousands of the most popular consumer electronics and
computer products.

Richard Leeds, Chairman and Chief Executive Officer of Systemax,
commented, "This acquisition and quick launch of the all new
CircuitCity.com further solidifies Systemax's position as a leader
in online retailing of value-priced, branded computers and
consumer electronics.  Circuit City is one of the iconic brands in
U.S. electronics retailing with a 60-year legacy.  With the
longstanding leadership of our TigerDirect.com business and the
growing contribution of our CompUSA business acquired last year,
we think Systemax is uniquely positioned to best carry forward the
great Circuit City brand in the online space."

On May 19, 2009, Systemax closed on its agreement to acquire
certain trademarks, trade names, domains including
www.CircuitCity.com, customer lists and information, and other
intangible assets of Circuit City's e-commerce business.  The
purchase price was $14 million in cash plus a share of future
revenue generated utilizing those assets over a 30-month period.
Under the terms of the agreement, the minimum future revenue
guaranteed to Circuit City is $3 million.  The Bankruptcy Court
issued its order approving the transaction on May 15, 2009,
following a public auction conducted on May 11, 2009.

                        About Systemax Inc.

Systemax Inc. -- http://www.systemax.com/-- a Fortune 1000
company, sells personal computers, computer supplies and
accessories, consumer electronics and industrial products through
branded e-commerce web sites, direct mail catalogs, relationship
marketers and retail stores in North America and Europe.  The
primary brands are TigerDirect, CompUSA, Misco and Global
Industrial.  It also manufactures and sells computers and
accessories under the Systemax and Ultra brands and develops and
markets ProfitCenter Software, a web-based application for
multichannel direct marketing companies.

                    About Circuit City Stores

Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- was a specialty
retailer of consumer electronics, home office products,
entertainment software and related services in the U.S. and
Canada.

Circuit City Stores together with 17 affiliates filed a voluntary
petition for reorganization relief under Chapter 11 of the
Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08-
35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian
operations, also sought protection under the Companies' Creditors
Arrangement Act in Canada.

Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel.  Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel.  The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc., and Rotschild Inc.
as financial advisors.  The Debtors' Canadian general
restructuring counsel is Osler, Hoskin & Harcourt LLP.  Kurtzman
Carson Consultants LLC is the Debtors' claims and voting agent.
The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of Aug. 31, 2008.

Circuit City has opted to liquidate its 721 stores.  It has
obtained the Bankruptcy Court's approval to pursue going-out-of-
business sales, and sell its store leases.

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


CITY OF VALLEJO: Misses $26,000 Bond Payment
----------------------------------------------
Bloomberg's Bill Rochelle reports that the City of Vallejo, in
California, told the indenture trustee for bondholders that it
won't make a $26,000 payment that was due May 1 on certificates of
participation sold in 1999.

Vallejo is currently undergoing reorganization under Chapter 9 of
Bankruptcy Code.  The U.S. Bankruptcy Court for the Eastern
District of California ruled in March that the city has the right
to terminate contracts with labor unions.  The bankruptcy judge
also ruled that the more cumbersome provisions for terminating
labor contracts applicable to companies in Chapter 11 don't apply
to municipalities reorganizing in Chapter 9.  The judge has
directed parties to engage in talks to resolve their contract
disputes.

Vallejo -- http://www.ci.vallejo.ca.us/GovSite-- is a city in
Solano County, in California. As of the 2000 census, the city had
a total population of 116,760. It is located in the San Francisco
Bay Area on the northern shore of San Pablo Bay.  The City is a
charter city organized and exercising governmental functions under
its charter and the laws and constitution of the state. Its
governing body is its City Council.

The City filed for protection under Chapter 9 of the U.S.
Bankruptcy Code on May 23, 2008 (Bankr. E.D. Calif. Case No.
08-26813). Marc A. Levinson, Esq., and Norman C. Hile, Esq., at
Orrick, Herrington & Sutcliffe LLP in Sacramento, California,
represent the City.  According to Vallejo's comprehensive annual
report for the year ended June 30, 2007, the city has $983 million
in assets and $358 million in debts.


COMMERCIAL CAPITAL: WestLB Wants Adequate Protection on Loans
-------------------------------------------------------------
WestLB AG, New York Branch, asks the U.S. Bankruptcy Court for the
District of Colorado to direct Commercial Capital Inc. and CCI
Funding I LLC to provide adequate protection for the diminution in
value of its collateral in light of:

  -- all foreclosure proceedings pending as of the Debtors'
     bankruptcy filing relating to all properties securing the
     mortgage loans;

  -- all properties the Debtors have by foreclosure, deed in
     lieu of foreclosure, or any other means; and

  -- the Debtors' use of its cash collateral.

WestLB AG says it provided to Debtors about $150 million in
secured loans credit and security agreement dated January 5, 2007,
which was used to purchase about 54 mortgage loans.  Among other
things, the credit agreement is secured by a first priority
security interest in the mortgage loans, WestLB AG notes.  About
35 of these loans are now in default and the Debtors have
completed foreclosure proceedings with respect to 13 of the
properties, WestLB AG relates.

According to WestLB AG, the Debtors have taken some of the
properties and may be using its cash collateral under the credit
agreement without providing adequate protection of its security
interests.

WestLB AG tells the Court that the Debtors have filed the
appropriate requesting seeking permission to use its cash
collateral at present.  It has not consented to the use of cash
collateral under the credit agreement, WestLB AG says.

Christopher L. Richardson, Esq., at Davis Graham & Stubbs LLP, and
Lester M. Kirshenbaum, Esq., at Kaye Scholer LLP, represents
WestLB AG.

                   About Commercial Capital, Inc.

Greenwood Village, Colorado-based Commercial Capital, Inc. --
http://www.commercialcapitalinc.com/-- and its affiliate, CCI
Funding I, LLC, are commercial real estate lenders and investment
partners engaging in short-term commercial mortgage.  Commercial
Capital and CCI Funding filed for separate Chapter 11 on April 22,
and April 27,  2009, (Bankr. D. Colo. Case No. 09-17238 and Bankr.
D. Colo. Case No. 09-17437).  Robert Padjen, Esq., at Laufer and
Padjen LLC, assists Commercial Capital in its restructuring
efforts.  In their bankruptcy petitions, the Debtors each listed
$100 million to $500 million in assets.  Commercial Capital listed
$50 million to $100 million in debts, wile CCI Funding listed $100
million to $500 million in liabilities.


COMPASS MINERALS: Prices $100MM of 8% Senior Notes Due 2019
-----------------------------------------------------------
Compass Minerals International, Inc., has priced its private
placement offering of $100.0 million in aggregate principal amount
of 8% Senior Notes due 2019.

The Notes will be sold at a price equal to 97.497% of their face
value, with an effective yield of 8.375%.  The Notes Offering is
expected to close on June 5, 2009, subject to the satisfaction or
waiver of customary closing conditions.

The net proceeds of the Notes Offering are intended to be used to
fund the concurrent tender offer announced on May 21, 2009, to
purchase any and all of Compass Minerals' outstanding
$89.6 million in aggregate principal amount 12% Senior
Subordinated Discount Notes due 2013, including any redemption of
any 2013 Notes that remain outstanding after the expiration of the
Tender Offer, and for general corporate purposes.

The senior notes being offered by Compass Minerals in the Notes
Offering will not be registered under the Securities Act of 1933,
as amended, and may not be offered or sold in the United States
absent registration or an applicable exemption from registration
requirements.  The senior notes are being offered only to
qualified institutional buyers under Rule 144A and outside the
United States in compliance with Regulation S under the Securities
Act.

                      About Compass Minerals

Overland Park, Kansas-based Compass Minerals International, Inc.,
through its subsidiaries produces and markets inorganic mineral
products with manufacturing sites in North America and Europe.
Its principal products are salt, which includes sodium chloride
and magnesium chloride, and sulfate of potash, a specialty
fertilizer.

As reported by the Troubled Company Reporter on May 25, 2009,
Moody's Investors Service affirmed Compass Minerals' Corporate
Family Rating of 'Ba2.'  Moody's also assigned a 'B1' rating to
Compass' proposed $100 million senior unsecured notes due 2019.
Proceeds from the new notes will be used to refinance $89.8
million of the 12% senior subordinated notes due 2013.  Moody's
gave a positive outlook to Compass' ratings, citing that it
reflects the expectation of a sustained increase in earnings from
its fertilizer segment.


CONSTAR INT'L: Expects to Emerge From Chapter 11 by May 29
----------------------------------------------------------
Constar International Inc. said in a regulatory filing that the
effective date of its confirmed plan of reorganization is
anticipated to be on or about May 29, 2009.  Constar, however,
cautioned that there's no assurance as to when, or ultimately if,
the Plan will become effective.  It is also possible that
additional technical amendments could be made to the Plan prior to
effectiveness, Constar said in its filing with the Securities and
Exhange Commission.

The U.S. Bankruptcy Court for the District of Delaware on May 14,
2009, entered an order confirming the Debtors' Second Amended
Joint Plan of Reorganization, as further modified.

Under the Plan, holders of Senior Subordinated Note Claims in
Class 4, holders of Section 510(b) claims in Class 6, and holders
of Equity Interests in Class 7 are impaired.  Each Allowed Senior
Subordinated Note Claim will receive payment with pro rata share
of new Common Stock issued on the Effective Date.  Claimants in
Classes 6 and 7 get nothing.

Holders of Other General Unsecured Claims in Class 6 will receive
either reinstatement in full or payment in the ordinary course of
business of their Claims.

The Debtors entered into a Senior Secured Super-Priority Debtor in
Possession and Exit Credit Agreement, dated as of December 31,
2008, among Constar as Borrower, the other Debtors as Guarantors,
Citicorp USA Inc., as Administrative Agent, Wells Fargo Foothill,
LLC, as Sole Syndication Agent and Sole Documentation Agent, and
Citigroup Global Markets Inc. as Book Manager and Arranger.  As
part of the Confirmation Order, the Bankruptcy Court approved the
conversion of the DIP Facility into the Exit Facility.  The Exit
Facility may be used for any purpose permitted by the Exit
Facility, including the funding of obligations under the Plan,
such as the payment of Administrative Claims and the satisfaction
of ongoing working capital requirements.

Pursuant to the Restated Certificate of Incorporation of Constar,
70,000,000 shares of common stock in Reorganized Constar will be
initially authorized for issuance, par value $0.01 per share, of
which up to 1,750,000 shares will be initially issued and
outstanding pursuant to the Plan as of the Effective Date.  Ten
shares of New Constar Common Stock will be issued for each $1,000
in face amount of the Senior Subordinated Notes to the holders of
Class 4 Claims.  In addition, 194,444 shares will be reserved for
issuance under the Management Incentive Plan. The New Constar
Common Stock, when issued or distributed as provided in the Plan,
will be duly authorized, validly issued, and, if applicable, fully
paid and nonassessable.

A full-text copy of the Debtors' Second Amended Joint Plan of
Reorganization, as Further Modified, Pursuant to Chapter 11 of the
Bankruptcy Code (as confirmed), is available at no charge at:

     http://ResearchArchives.com/t/s?3d3a

A full-text copy of the Findings of Fact, Conclusions of Law and
Order Confirming the Debtors' Second Amended Joint Plan of
Reorganization Pursuant to Chapter 11 of the United States
Bankruptcy Code, is available at no charge at:

     http://ResearchArchives.com/t/s?3d3b

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).  Attorneys at Bayard, P.A., are the Debtors'
counsel in the Chapter 11 cases, and attorneys at Wilmer Cutler
Pickering Hale and Dorr LLP are co-counsel.  Goodwin Procter LLP,
and Young, Conaway, Stargatt & Taylor, LLP, are the Official
Committee of Unsecured Creditors' bankruptcy counsel.


CORRECTIONS CORP: S&P Assigns 'BB/B+' Senior Debt Ratings
---------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its
preliminary 'BB/B+' senior unsecured/subordinated debt ratings to
Nashville, Tennessee-based Corrections Corp. of America's
unlimited Rule 415 shelf registration.  S&P also assigned its 'BB'
senior unsecured debt rating to the company's proposed
$465 million 7.75% notes due June 2017, which CCA will issue under
the new shelf filing.  S&P expects that the company will use the
proceeds from the new note issuance to repay its $450 million 7.5%
senior unsecured notes due 2011.  S&P also assigned this debt a
recovery rating of '3', indicating that lenders could expect
meaningful (50%-70%) recovery in the event of a payment default or
bankruptcy.  (For the complete recovery rationale, please see the
recovery report on CCA, to be published after this media release.)

At the same time, Standard & Poor's withdrew its preliminary
'BB/B+' senior unsecured/subordinated debt ratings on CCA's
previous shelf filing, which has expired.  The outlook is stable.
As of March 31, 2009, CCA had about $1.27 billion debt.

Standard & Poor's believes CCA's existing inmate population levels
and reduced near-term capital expenditure plans should enable the
company to sustain credit measures close to current levels.  Over
the next year, S&P expects adjusted leverage to remain in the low-
3x area and funds from operations to total debt to decline to the
high-teens level.  However, S&P estimate that if inmate population
levels begin to decline, margins fall by an amount greater than
S&P expected, or financial policy becomes more aggressive
(including share repurchases or increased capital expenditures)
resulting in adjusted leverage of 3.5x, S&P would consider an
outlook revision to negative.

                           Ratings List

                   Corrections Corp. of America
       Corp. credit rating                      BB/Stable/--

                         Ratings Assigned

       Senior unsecd debt sub debt              BB/B+ (prelim)
       Senior unsecd $465 million 7.75% notes   BB
         Recovery rating                        3

                        Ratings Withdrawn

       Senior unsecured/subordinated debt       BB/B+ (prelim)


COYOTES HOCKEY: U.S. Trustee Forms Five-Member Creditors' Panel
---------------------------------------------------------------
Ilene J. Lashinsky, United States Trustee for Region 14, appointed
five creditors to serve on the Official Committee of Unsecured
Creditors of Coyotes Hockey LLC and its debtor-affiliates.

The members of the Committee are:

   a) Clear Channel Radio
      Attn: Jason Weinmeister
      4686 E. Van Buren Street, #300
      Phoenix, AZ 85008
      Tel: (602) 374-6013
      Fax: (602) 374-6015

   b) Climatec Building Technologies Group, LLC
      Attn: Jimeen Hamblen
      10802 N. 23rd Avenue
      Phoenix, AZ 85029
      Tel: (602) 944-3330
      Fax: (602) 944-4759

   c) Coyotes Ice, LLC
      Attn: R. Taylor Burke, Jr.
      9375 E. Bell Road, #101
      Scottsdale, AZ 85260
      Tel: (480) 483-7444
      Fax: (480) 619-6350

   d) Landcorp Property Maintenance I, Inc.
      Attn: Ricardo Landaburu
      3230 E. Broadway Road, #130
      Phoenix, AZ 85042
      Tel: (480) 212-0032
      Fax: (480) 212-0033

   e) Maintenance Mart
      Attn: Al Kraus
      4648 N. 7th Avenue
      Phoenix, AZ 85013
      Tel: (602) 252-9402
      Fax: (602) 252-9086

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.

Glendale, Arizona-based Dewey Ranch Hockey LLC and its affiliates,
including Coyotes Hockey LLC, own the Phoenix Coyotes team and
franchise in the National Hockey League.

Dewey Ranch, together with affiliates Arena Management Group, LLC,
Coyotes Holdings, LLC, and Coyotes Hockey, LLC, filed for
Chapter 11 bankruptcy protection on May 5, 2009 (Bankr. D. Ariz.
Case No. 09-09488), to implement a court-approved sale of Phoenix
Coyotes under the Bankruptcy Code.  The filing included a proposed
sale of the franchise to PSE Sports & Entertainment, LP, which
would move the franchise to southern Ontario, Canada.  Thomas J.
Salerno, Esq., at Squire, Sanders & Dempsey, LLP, assists the
Debtors in their restructuring efforts.  Dewey Ranch listed
$100 million to $500 million in assets and $100 million to
$500 million in debts.


COYOTES HOCKEY: Secured Lenders Cry Foul on S&E $17-Mil. DIP Loan
-----------------------------------------------------------------
Three secured lenders object to Coyotes Hockey LLC and its debtor-
affiliates' proposal to obtain postpetition financing and use cash
collateral.  SOF Investments LP, White Tip Investments LLC and
Donatello Investments LLC tell the U.S. Bankruptcy Court for the
District of Arizona that the Debtors' use of cash collateral and
the priming of their liens in favor of the DIP lender would
further diminish the value of their collateral.  They say that the
proposed "adequate protection" consisting solely of a junior claim
and liens on asset in which they have a security interest and
budgeted amounts for regular payments of interest is inadequate.

The Debtors owe $79.6 million plus interests to SOF, et al., under
a certain credit agreement dated December 31, 2003.  The loans are
secured by substantially all of the Debtors' assets including cash
collateral.  The loan matured on December 31, 2008, and the
facility has been in default, according to papers filed with the
Court.  Attorneys at Vinson & Elkins LLP, in New York, represent
SOF, et al.

S&E Interim Facility Corporation has agreed to provide to the
Debtors as much as $17 million in financing, which will mature by
June 30, 2009, unless extended by the lender.  The facility incurs
interest at 7% per annum.  Proceeds of the facility will be used
to pay a postpetition retainer of $5 million for the benefit of
the Debtors' professionals, among others things.

The Court has set May 27, 2009, at 9:00 a.m., to consider approval
of the Debtors' access to postpetition financing.

                       About Coyotes Hockey

Glendale, Arizona-based Dewey Ranch Hockey LLC and its affiliates,
including Coyotes Hockey LLC, own the Phoenix Coyotes team and
franchise in the National Hockey League.

Dewey Ranch, together with affiliates Arena Management Group, LLC,
Coyotes Holdings, LLC, and Coyotes Hockey, LLC, filed for Chapter
11 bankruptcy protection on May 5, 2009 (Bankr. D. Ariz. Case No.
09-09488), to implement a court-approved sale of Phoenix Coyotes
under the Bankruptcy Code.  The filing included a proposed sale of
the franchise to PSE Sports & Entertainment, LP, which would move
the franchise to southern Ontario, Canada.  Thomas J. Salerno,
Esq., at Squire, Sanders & Dempsey, LLP, assists the Debtors in
their restructuring efforts.  Dewey Ranch listed $100 million to
$500 million in assets and $100 million to $500 million in debts


CRUCIBLE MATERIALS: U.S. Trustee Forms 5-Member Creditors' Panel
----------------------------------------------------------------
Roberta A. DeAngelis, United States Trustee for Region 3,
appointed five creditors to serve on the Official Committee of
Unsecured Creditors of Crucible Materials Corporation and its
debtor-affiliates.

The members of the Committee are:

   a) The Bank of New York Mellon Trust Co., N.A.
      Attn: Bridget Schessler
      525 William Penn Place, 7th Floor
      Pittsburgh, PA 15259
      Tel: (412) 234-7967
      Fax: (412) 236-9271

   b) Sims Metal Management Inc.
      Attn: James Nathan
      500 Flatbush Ave.
      Hartford, CT 06106
      Tel: (860) 550-7241
      Fax: (860) 724-9245

   c) United Steelworkers
      Attn: David R. Jury
      Five Gateway Center
      Pittsburgh, PA 15222
      Tel: (412) 562-2546
      Fax: (412) 562-2429

   d) Purther Recycling Inc.
      Attn: Don Purther
      31000 Northwestern Hwy., Ste. 250
      Farmington Hills, MT 48334
      Tel: (248) 865-6700
      Fax: (248) 865-6702

   e) Climax Molybdenum Marketing Corp.
      Attn: Georgeann Weinhandl
      One North Central Ave.
      Phoenix, AZ 85004
      Tel: (602) 366-8557
      Fax: (602) 366-7322

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 Crucible Materials Corporation

Based in Syracuse, New York, Crucible Materials Corporation --
http://www.crucible.com/-- aka Crucible Specialty Metals,
Crucible Service Centers, Crucible Compaction Metals, Crucible
Research and Trent Tube, makes stainless and alloy steel for use
in the aircraft, automotive, petrochemical, and other industries.
The Company sold its trent tubes unit to Plymouth Tube in 2007.

The Company and its affiliate, Crucible Development Corporation,
filed for Chapter 11 protection on May 6, 2009 (Bankr. D. Del.
Lead Case No. 09-11582).  Mark Minuti, Esq., at Saul Ewing LLP,
represents the Debtors in their restructuring efforts.  The
Debtors propose to employ Duff & Phelps Securities LLP as
investment banker; RAS Management Advisors LLC as business
advisor; and Epiq Bankruptcy Solutions LLC as claims agent.  The
Debtors listed assets and debts both ranging from $100 million to
$500 million.


DANA HOLDING: S&P Raises 'SD' Corporate Credit Rating to 'B-'
-------------------------------------------------------------
Standard & Poor's Ratings Services said it has raised its
corporate credit rating on Toledo, Ohio-based Dana Holding Corp.
to 'B-' from 'SD' (selective default) and raised its rating on the
company's outstanding $1.26 billion term loan bank facility to 'B'
from 'D'.  The recovery rating on the term loan is unchanged, at
'2', indicating S&P's expectation that lenders would receive
substantial (70% to 90%) recovery in the event of a payment
default.

The issue and recovery ratings on Dana's asset-backed loan
revolving facility are unchanged, at 'B+' and '1', indicating
S&P's expectation that lenders would receive very high (90% to
100%) recovery in the event of a payment default.

The rating action reflects S&P's review of Dana's prospects
following the completion of its dutch auction tender offer in
which it repurchased less than 10% of its term loan facility at a
substantial discount to par (at a price of 40% to 44% of face
value).  S&P viewed this action as a distressed debt exchange and
tantamount to a default.

"The ratings on Dana reflect our view that very weak market
conditions in most of Dana's business segments will pressure the
company's covenant compliance this year by reducing EBITDA, even
as Dana continues to realign overhead costs and refine operational
capacity," said Standard & Poor's credit analyst Nancy Messer.
"We believe Dana will be at risk of breaching its 2009 covenants -
- which tighten in the second half of the year -- given weak
industry conditions," she continued.

S&P also believe financial risk will remain relatively high for
most rated auto suppliers this year and next because of severe and
volatile auto markets in North America and Europe.  S&P expects
Dana's revenues to be reduced by weak auto production in North
America and Europe and the stalled recovery of commercial truck
demand because of the weak economy.  For 2009, S&P expects light-
vehicle sales in the U.S. to fall to 9.6 million units, down 27%
year over year.  Although S&P expects sales to improve to
11.4 million units in 2010, this level would still be
significantly below last year's weak level of 13.2 million units.

Dana has significant exposure to light trucks and SUVs, the sales
of which have fallen even more dramatically than sales in the
overall market.  Dana's customers for its axles, driveshafts, and
other structural, sealing, and thermal products are original
equipment manufacturers in the light-, heavy-duty commercial, and
heavy off-road vehicle markets.  Although the three Michigan-based
OEMs account for about 27% of Dana's global sales, its axle and
driveshaft businesses depend substantially on continued business
from Ford Motor Co., which is cutting production significantly.

In the first quarter of 2009, Dana reported that EBITDA had
declined precipitously, to $16 million compared to $134 million in
the first quarter of 2008.  The poor results were attributed to
low light-vehicle production and product mix combined with a
significant 47% decline in off-highway vehicle revenues, year over
year.

Dana had $1.2 billion of balance sheet debt at March 31, 2009,
reduced by only a small amount as a result of the recent debt
exchange.  The capital structure also includes $771 million of 4%
cash-pay convertible preferred stock.

Liquidity is limited because S&P does not expect the company to
generate meaningful free cash flow this year, and the covenants
tighten in the second half of 2009.

Dana had $191 million available on its asset-based revolving
credit facility as of March 31, 2009, after accounting for
$191 million in letters of credit and no borrowings.  S&P assume
that Lehman Brothers Inc., as a member of Dana's lending group,
will not fund its $65 million commitment, so S&P view the
revolving commitment as $585 million rather than the original
$650 million.

At March 31, 2009, Dana had $412 million in unrestricted balance
sheet cash, a certain amount of which was used to repurchase less
than 10% of the term loan under the recent tender offer, with 48%
of the cash in the U.S.

The outlook on Dana is negative. S&P could lower the ratings if
Dana's liquidity begins to tighten because of greater cash use
than S&P expects or if EBITDA remains weak because of ongoing
adverse market conditions.  S&P could also lower the ratings if
Dana is unable to remain in compliance with covenants, after
taking account of any waivers that may become necessary.  In S&P's
opinion, Dana needs to achieve adjusted EBITDA of $400 million
annually to maintain the current rating, given its pension- and
lease-adjusted total debt of $2.4 billion.  S&P does not expect
the company to pursue transforming acquisitions or large dividend
payouts that could pressure credit ratios in the year ahead.

S&P is unlikely to revise the outlook to stable or raise the
ratings in the next year because S&P does not expect market
conditions to improve materially.


DAYTON SUPERIOR: To Be Delisted From Nasdaq Effective May 29
------------------------------------------------------------
The Nasdaq Stock Market, Inc., has determined to remove from
listing the common stock of Dayton Superior Corporation, effective
at the opening of the trading session on May 29, 2009.

Based on a review of the information provided by the Company,
Nasdaq Staff determined that the Company no longer qualified for
listing on the Exchange pursuant to Marketplace Rules 5100,
5110(b) and IM-5100-1.  The Company was notified of the Staffs
determination on April 20, 2009.  The Company did not appeal the
Staff determination to the Hearings Panel, and the Staff
determination to delist the Company became final on April 29,
2009.

                      About Dayton Superior

Headquartered in Dayton, Ohio, Dayton Superior Corporation --
http://www.daytonsuperior.com/-- makes and distributes
construction products.  Aztec Concrete Accessories Inc., Dayton
Superior Specialty Chemical Corporation, Dur-O-Wa Inc., Southern
Construction Products Inc., Symons Corporation and Trevecca
Holdings Inc. were merged with the Company on December 31, 2004.
The Company filed for Chapter 11 protection on April 19, 2009
(Bankr. D. Del. Case No. 09-11351).  Keith A. Simon, Esq., Jude M.
Gorman, Esq., and Joseph S. Fabiani, Esq., at Latham & Watkins LLP
also represent the Debtor as counsel.  Russell C. Silberglied,
Esq., John H. Knight, Esq., Paul N. Heath, Esq., and Lee E.
Kaufman, Esq., at Richards, Layton & Finger, P.A., represent the
Debtor as Delaware counsel.  The Debtor posted $288,709,000 in
total assets and $405,867,000 in total debt as of February 27,
2009.


DELPHI CORP: Court Orders Mediation Among Delphi Key Stakeholders
-----------------------------------------------------------------
Judge Robert Drain of the U.S. Bankruptcy Court for the Southern
District of New York directed the mediation of Delphi Corporation
and its key constituents before Judge Cecila G. Morris.  The
parties are:

   1. Delphi Corporation
      Attn: John Wm. Butler, Jr., Esq.
      Skadden, Arps, Slate, Meagher & Flom LLP
      333 West Wacker Drive, Suite 2100
      Chicago, Illinois 60606
      (312) 407-0730
      jack.butler@skadden.com

   2. Official Committee of Unsecured Creditors
      Attn: Robert J. Rosenberg, Esq.
      Latham & Watkins LLP
      885 Third Avenue
      New York, New York 10022
      (212) 906-1370
      robert.rosenberg@lw.com

   3. General Motors Corporation
      Attn: Jeffrey L. Tanenbaum, Esq.
      Weil, Gotshal & Manges LLP
      767 Fifth Avenue
      New York, New York 10153
      (212) 310-8276
      jeff.tanenbaum@weil.com

   4. Certain lenders under Delphi's DIP Credit Facility or
      Tranche C Lenders

      Counsel for DIP Agent
      Attn: Donald S. Bernstein, Esq.
      Davis Polk & Wardwell
      450 Lexington Avenue
      New York, New York 10017
      (212) 450-4092
      donald.bernstein@dpw.com

      Counsel for the Tranche C Collective Lenders
      Marc Abrams
      Wilkie Farr & Gallagher LLP
      787 Seventh Avenue
      New York, New York 10019
      (212) 728-8200
      mabrams@wilkie.com

   5. U.S. Department of the Treasury Auto Task Force
      Attn: Assistant U.S. Attorney Joseph N. Cordaro, Esq.
      86 Chambers Street, 3rd Floor
      New York, New York 10007
      (212) 637-2800
      joseph.cordaro@usdoj.gov

      Assistant U.S. Attorney Matthew L. Schwartz, Esq.
      86 Chambers Street, 3rd Floor
      New York, New York 10007
      (212) 637-2800
      matthew.schwartz@us.doj.gov

      John J. Rapisardi, Esq.
      Cadwalader, Wickersham & Taft LLP
      One World Financial Center
      New York, New York 10281
      (212) 504-5585
      john.rapisardi@cwt.com

The Court entered the Mediation Order on May 20, 2009, upon
consideration of certain matters during a May 18 status conference
conducted in the Debtors' Chapter 11 cases.

The Court ordered that under the mediation:

  (1) Representatives of each Party with authority to negotiate a
      settlement and all other persons necessary to negotiate a
      settlement must attend the mediation;

  (2) The results of the mediation are non-binding, unless the
      parties agree otherwise;

  (3) There will be an absolute mediation privilege and all
      communications made during the mediation will be
      confidential, protected from disclosure, and will not
      constitute a waiver of any existing privileges and
      immunities, may not be disclosed to any third party for any
      reason, and may not be used for any purpose other than the
      mediation; and

  (4) At the end of the mediation, Judge Morris will send to the
      clerk of the Bankruptcy Court a memorandum reporting that
      she conducted a mediation, the names, addresses and
      telephone numbers of counsel who participated in the
      mediation, and whether the mediation was successful.

Moreover, each counsel will serve as contact representative for
each party and will receive directions from Judge Morris regarding
the scheduling of submissions and the initial mediation session.

Judge Drain says the Court is satisfied with how the parties are
conducting themselves in good faith regarding the "subject
matters" referred to Judge Morris, and understands that the
parties will proceed with their analyses and negotiations.  Judge
Drain nevertheless believes that mediation may contribute to a
consensual resolution of these Chapter 11 cases within the
"Accommodation Period" afforded by the DIP Lenders to the Debtors.

Subsequently, on May 21, 2009, Judge Drain approved, on a final
basis, the "third amendment" to the Debtors' DIP Accommodation
Agreement with JP Morgan Chase Bank, N.A., and certain lenders
under a $4.35 billion DIP Credit Facility.  Under the DIP
Accommodation Third Amendment, the Debtors were required to submit
a term sheet detailing their emergence from Chapter 11 and GM's
role in the reorganization by May 21, and the current
Accommodation Period is to terminate June 2 if the requisite
lenders do not find the required term sheet to be entered among
the Debtors, General Motors Corporation and the U.S. Department of
Treasury's Auto Task Force satisfactory.

          Delphi Given Until May 29 to Submit Term Sheet

At a May 21, 2009 omnibus hearing, Mr. Butler informed the Court
that mediation has begun, Bloomberg News reports.

More importantly, Mr. Butler said that Delphi's deadline to submit
a term sheet has been extended through May 29, 2009, according to
Bloomberg.  Hearing on approval of proposed modifications to
Delphi's First Confirmed Joint Plan of Reorganization is also
scheduled on the same day.

Other than the Court-mandated mediation, Mr. Butler said
negotiations among Delphi, GM, the Auto Task Force, Delphi's DIP
Lenders and creditors on related matters are also ongoing, the
Associated Press relates in a separate report.  "It is our
anticipation that there will be amendments to our proposals filed
next week and we would expect to be able to provide more
information to the court as far as our next steps at that time,"
AP quoted Mr. Butler as saying.

           GM Likely to Assume Certain Delphi Operations

GM is in talks with Delphi regarding its acquisition of certain
operations of Delphi to avoid interruption of essential auto
parts, Reuters reports, citing a source privy to GM's plan.

GM was in negotiation talks with Delphi in February 2009 for
possible reclamation of five Delphi plants to avoid disruption of
supply of auto parts.  It was believed that GM's reclamation of
the plants might help Delphi get exit financing and ensure GM's
supply of parts won't be affected by any liquidation.

In May 2009, New York Senator Charles also called for GM and
Delphi to reach an agreement for GM's quick reclamation of the
plants to avoid shutdown of GM's operations.

                    Exclusivity Periods Extended,
                         Hearings Adjourned

Judge Drain further extended the exclusivity periods, solely as
between the Debtors and the Court-approved Statutory Committees,
to:

   (a) file a plan of reorganization, through and including
       July 31, 2009; and

   (b) solicit acceptances of that plan, through and including
       September 30, 2009.

The Court adjourned hearings on Delphi's motions for approval of
the Option Agreement with GM for its purchase of Delphi's Global
Steering Business as well as the Fourth and Fifth Amendments to
GM's Liquidity Support Agreement to May 29, 2009.

Hearings on the GM-related matters have been adjourned several
times to give way to continued negotiations among the Debtors, GM
and the Auto Task Force.  The Auto Task Force has continuously
blocked the GM-Delphi deals, saying it needs additional time to
review the Delphi and GM relationship.  Indeed, GM Chief Executive
Officer Frederick A Henderson previously disclosed in a Form S-4
submitted to the Securities and Exchange Commission dated
April 27, 2009, that the Auto Task Force disapproved of the
contemplated increases of GM's liquidity commitments to Delphi.
Mr. Henderson also commented that given the current challenges
facing the auto-industry, it is unlikely that Delphi will emerge
from bankruptcy without government support.  Mr. Henderson pointed
to the possibility of Delphi's non-emergence from bankruptcy.

In its first quarter of 2009 results filed with the SEC on From
10Q dated May 11, 2009, Delphi disclosed that until a term sheet
is agreed upon and even assuming that the Term Sheet comprehends
additional liquidity, liquidity is expected to remain constrained
for the Company through the remainder of the year.  Delphi avers
it must continue implementing and executing its cash savings
initiatives to preserve liquidity in the current difficult
economic environment.

The Auto Task Force is yet to announce its decision on whether to
approve the additional $150 million to be provided by GM under the
GM-Delphi Liquidity Support Agreement, Bloomberg notes.

                        About Delphi Corp.

Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- is a global supplier of mobile
electronics and transportation systems, including powertrain,
safety, steering, thermal, and controls & security systems,
electrical/electronic architecture, and in-car entertainment
technologies.  Delphi technology is also found in computing,
communications, consumer accessories, energy and medical
applications.  Delphi has approximately 146,600 employees and
operates 150 wholly owned manufacturing sites in 34 countries with
sales of $18.1 billion in 2008.

The Company filed for Chapter 11 protection on October 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors.  As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.

The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the
solicitation of votes on the First Amended Plan on December 20,
2007.  The Court confirmed the Debtors' First Amended Plan on
January 25, 2008.  The Plan has not been consummated after a group
led by Appaloosa Management, L.P., backed out from their
proposal to provide US$2,550,000,000 in equity financing to
Delphi.

(Delphi Bankruptcy News, Issue No. 168; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)


DELPHI CORP: Court OKs $4.35BB JPMorgan DIP Loan on Final Basis
---------------------------------------------------------------
Judge Robert Drain of the U.S. Bankruptcy Court for the Southern
District of New York approved on a final basis, on May 21, 2009,
of a "fourth amendment" to the $4.35 billion DIP Facility entered
into by Delphi Corp. and its affiliates with JP Morgan Chase Bank,
N.A., as administrative agent, and certain lenders, and a "first
amendment" of the parties' related Security and Pledge Agreement.

The U.S. Department of Treasury's Auto Task Force is funding up to
$5 billion for a program, wherein participating suppliers would be
able to sell receivables owing from participating Original
Equipment Manufacturers at a modest discount to special purpose
vehicles supported by Treasury Department-funded credit facilities
at third party servicers.

The Debtors intend to participate in the Auto Supplier Program by
selling, pursuant to a Payment Option 2, qualifying receivables
owed to it by Chrysler LLC and its affiliates to Chrysler
Receivables SPV, LLC.  As a prerequisite under the Auto Supplier
Program, the Debtors are required to grant Chrysler SPV a first
priority security interest in the transferred receivables.
However, the Debtors are restricted from transferring those
eligible receivables under the Amended DIP Credit Agreement.
Thus, to facilitate the Debtors' participation in the Auto
Supplier Support Program, the Debtors entered into the Fourth DIP
Credit Agreement Amendments with the DIP Agent and the DIP
Lenders.

Pursuant to the Fourth DIP Credit Agreement Amendments, the DIP
Agent is authorized to execute and deliver agreements and
instruments, evidencing:

   (i) the release of the DIP Lenders' Liens on the Chrysler
       receivables sold to Chrysler SPV; and

  (ii) the subordination of the DIP Lenders' Liens on the
       Chrysler receivables sold to the Liens granted by the
       Debtors on the receivables to Chrysler SPV.

The DIP Financing Order will be deemed supplemented by the May 21,
2009 Order, and will continue in full force and effect as
supplemented, by the DIP Financing Extension Order, the Second DIP
Extension Order and the DIP Accommodation Order.

                        About Delphi Corp.

Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- is a global supplier of mobile
electronics and transportation systems, including powertrain,
safety, steering, thermal, and controls & security systems,
electrical/electronic architecture, and in-car entertainment
technologies.  Delphi technology is also found in computing,
communications, consumer accessories, energy and medical
applications.  Delphi has approximately 146,600 employees and
operates 150 wholly owned manufacturing sites in 34 countries with
sales of $18.1 billion in 2008.

The Company filed for Chapter 11 protection on October 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors.  As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.

The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the
solicitation of votes on the First Amended Plan on December 20,
2007.  The Court confirmed the Debtors' First Amended Plan on
January 25, 2008.  The Plan has not been consummated after a group
led by Appaloosa Management, L.P., backed out from their
proposal to provide US$2,550,000,000 in equity financing to
Delphi.

(Delphi Bankruptcy News, Issue No. 168; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)


DELPHI CORP: Files Documents in Harbinger Suit Under Seal
---------------------------------------------------------
Delphi Corp. and its affiliates seek authority from Judge Robert
Drain of the U.S. Bankruptcy Court for the Southern District of
New York to file in redacted form and under seal certain papers in
opposition to (i) the Partial Summary Judgment Motion filed by
Appaloosa Management L.P. and A- D Acquisition Holdings, LLC's,
and (ii) the Summary Judgment Motions filed by Harbinger Capital
Partners Master Fund I, Ltd., and Harbinger Del-Auto Investment
Company Ltd., Pardus DPH Holding LLC and Pardus Special
Opportunities Master Fund L.P., Merrill Lynch, Pierce, Fenner &
Smith Inc., and UBS Securities LLC.

Specifically, the Debtors will file under seal these Summary
Judgment Opposition Papers:

   * Memorandum of law in opposition to Motions for Summary
     Judgment submitted by all Appaloosa Defendants other than
     Goldman Sachs & Co.

   * Counterstatement of additional disputed material facts in
     opposition to the Summary Judgment Motions under Rule 7056-1
     of the Federal Rules of Bankruptcy Procedure

   * Response to AMLP and ADAH's Rule 7056-1 Statement

   * Response to Rule 7056-1 statement of Harbinger, Pardus,
     Merrill Lynch and UBS

   * Declaration of Andrew W. Schilling in opposition to Motions
     for Summary Judgment and the accompanying exhibits.

Edward A. Friedman, Esq., at Friedman Kaplan Seiler & Adelman LLP,
in New York, notes that certain materials included or referenced
in the Summary Judgment Opposition Papers have been designated
"confidential" or "highly confidential" pursuant to a Stipulation
and Agreed Protective Order Governing Production and Use of
Confidential Information, and are considered "Confidential
Discovery Material."  Although the Debtors do not believe that all
of the materials so designated are indeed confidential or highly
confidential within the meaning of the Confidentiality Order or
are entitled to protection under Section 107(b) of the Bankruptcy
Code, certain parties that produced those materials have refused
to waive the designations as to those materials, he points out.
Moreover, he informs the Court that the Debtors are currently
working with all parties that have designated materials
confidential or highly confidential to obtain agreement to file
those materials publicly.

The Debtors say their goal is to have as few redactions as
possible in the Summary Judgment Opposition Papers.  The Debtors
add that they intend to serve the unredacted Summary Judgment
Opposition Papers with the Court, the Appaloosa Defendants, and
certain other parties to the Confidentiality Order.

The Debtors reserve their right to seek permission from the Court
to unseal the Summary Judgment Opposition Papers.

As of May 18, 2009, the Summary Judgment Opposition Papers as well
as the Debtors' pre-trial disclosures pursuant to Rule
26(a)(3) of the Federal Rules of Civil Procedure, have been filed
under seal in the Appaloosa adversary dockets.

In a separate filing, the Debtors seek the Court's authority to
file under seal papers in opposition to Goldman Sachs & Co.'s
partial summary judgment motion, which include:

   * A memorandum of law in opposition to the Partial Summary
     Judgment Motion;

   * A declaration of Andrew W. Schilling in opposition to the
     Partial Summary Judgment Motion and the accompanying
     exhibits; and

   * A response to Rule 7056-1 Statement of Goldman Sachs.

Jacob W. Buchdahl, Esq., at Susman Godfrey LLP, in New York, notes
that a certain exhibit 6 of the Schilling Declaration is an e-mail
that has been designated "confidential" by Goldman Sachs pursuant
to the Confidentiality Order and is thus considered "Confidential
Discovery Material.  He says that although the Debtors do not
believe that the Exhibit is Confidential under the Confidentiality
Order or is entitled to protection under Section 107(b), Goldman
Sachs has refused to withdraw its Confidential designation.

Thus, the Debtors seek the Court's authority to file the Exhibit
to the Shilling Declaration under seal and redact references of
the Exhibit in the Summary Judgment Opposition Papers.

Mr. Buchdahl adds that the Debtors served, on May 22, 2009, the
unredacted Summary Judgment Opposition Papers with the Court, the
Appaloosa Defendants, and certain other parties to the
Confidentiality Order.

               AMLP and ADAH Seek Telephonic Conference

In a letter addressed to Judge Drain, AMLP, ADAH and all of other
Appaloosa Defendants except Goldman Sachs, ask the Court to
schedule a telephonic conference to address the trial schedule,
the timing of pretrial submissions, and how any trial may be
appropriately tailored to any issues remaining for trial after the
summary judgment decision.

Glenn M. Kurtz, Esq., at White & Case LLP, in New York, reminds
the Court that the hearings on the Summary Judgment Motions are
scheduled for June 5 and 8, 2009, only a week or so before the
trial-ready date on June 15.  He notes that the summary judgment
papers filed by the parties make clear that there a significant
number of issues ripe for adjudication, including issues of
contract interpretation as to which the parties' disputes are
purely legal.  He adds that a ruling on summary judgment may
eliminate or significantly narrow the issues for trial and save
considerable resources.

However, maintaining a June 15 trial-ready date would require the
parties, including the Debtors' estates, to prepare at great
expense, for a trial before the issues are set, Mr. Kurtz points
out.  He discloses that in the Debtors' pretrial disclosures
served on May 15, 2009, the Debtors expect to call 20 witnesses at
trial and may call 46 witnesses, plus rebuttal witnesses.
Clearly the time and cost of preparing for an extensive trial, as
well as the Court's setting aside weeks of trial time should be
avoided, if at all possible, he asserts.

Mr. Kurtz says a question exists as to when pretrial disclosures
are due.  The pretrial disclosures deadline is either as set by
the Court or 30 days before trial pursuant to Civil Rule 26(a)(3).
There is no trial date yet, only a trial-ready date, yet the
Debtors have served pretrial disclosures without any guidance from
the Court or agreement of the Appaloosa Defendants, he continues.

The Appaloosa Defendants aver that during the hearing of the
Debtors' Motion for Leave to Amend Complaint, they raised the need
to address matters after the summary judgment papers were filed
and the Court agreed.  The Court stated that it may be that the
trial could be very narrowly tailored if the Debtors defeat some
portion, but not all, of the Complaint.  The Court further noted
that until the summary judgment motions are filed, it is hard to
decide on whether the trial should be postponed or not and thus,
the Court wants the parties to assume that it's still a trial-
ready date.

With the service of the Debtors' Summary Judgment Opposition
Papers, the Appaloosa Defendants believe that the issue is ripe
and should be addressed in a telephonic conference.

As reported by the Troubled Company Reporter, the Court approved
Delphi's First Amended Joint Disclosure Statement and related
solicitation procedures for the solicitation of votes on the First
Amended Plan on December 20, 2007.  The Court confirmed the
Debtors' First Amended Plan on January 25, 2008.  The Plan has not
been consummated after a group led by Appaloosa Management, L.P.,
backed out from their proposal to provide US$2,550,000,000 in
equity financing to Delphi.  Delphi commenced the lawsuit to force
the Plan Investors to perform under their agreement.

                        About Delphi Corp.

Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- is a global supplier of mobile
electronics and transportation systems, including powertrain,
safety, steering, thermal, and controls & security systems,
electrical/electronic architecture, and in-car entertainment
technologies.  Delphi technology is also found in computing,
communications, consumer accessories, energy and medical
applications.  Delphi has approximately 146,600 employees and
operates 150 wholly owned manufacturing sites in 34 countries with
sales of $18.1 billion in 2008.

The Company filed for Chapter 11 protection on October 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors.  As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.

(Delphi Bankruptcy News, Issue No. 168; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)


DELPHI CORP: Court OKs BeijingWest Deal; Amended Pact Filed
-----------------------------------------------------------
Judge Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York approved the sale of Delphi Corp.
and its affiliates' brakes and ride dynamics businesses to
BeijingWest Industries Co., Ltd., free and clear of all liens, for
$90 million pursuant to the MSPA, on May 21, 2009.

The Sale is expected to close by the end of 2009.  The Brakes
Businesses employ 3,000 workers, primarily located in Poland,
China, Mexico, France and the United States.

The Debtors' March 2006 transformation identified the brakes and
suspension business as non-core product lines that no longer fit
into the Debtors' future strategic framework and could become more
profitable and competitive as stand-alone businesses or as part of
another organization with the working capital to invest in and
support those businesses.

On behalf of Delphi, John Wm. Butler, Esq., at Skadden, Arps,
Slate, Meagher & Flom LLP, in Chicago, Illinois, submitted to the
Court on May 20, 2009:

  * a "first amendment" to the Master Sale and Purchase Agreement
    entered between the Debtors and BeijingWest Industries Co.,
    Ltd., a full-text copy of which is available for free at:
    http://bankrupt.com/misc/Delphi_BrakesMSPAAmendment.pdf

  * a revised proposed Sale Order, a full-text copy of which is
    available for free at:

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

The First Amendment to the MSPA contains, among others, a language
stating that the "PBGC Purported Liens" refers to any lien or
liens claimed by the Pension Benefit Guaranty Corporation to exist
against acquired assets of the sellers who are non- debtor
affiliates in these Chapter 11 cases, including those purported
liens described in the PBGC's response to the Debtors'
Motion.

These provisions are inserted in the Revised Sale Order:

  (1) Withdrawal of Tokico (USA), Inc.'s objection to the
      Debtors' assumption and assignment of its purchase order
      to BeijingWest under the Brakes Business Sale; and

  (2) At any time after the entry of the sale order, (i)
      BeijingWest may not refuse to close or terminate the MSPA
      by reason of the existence of the PBGC Purported Liens
      unless the PBGC Purported Liens have been enforced in any
      local and applicable jurisdiction, and (ii) if any of the
      PBGC Purported Liens are enforced in any local and
      Applicable jurisdiction, only then do the PBGC Purported
      Liens constitute an encumbrance entitling BeijingWest,
      regardless of materiality of the encumbrance, by notice to
      the Debtors within 30 days after the date BeijingWest
      becomes aware of an enforcement, to refuse to close or to
      terminate the MSPA due to the encumbrance and entitle
      BeijingWest to the Break-Up Fee.  Neither BeijingWest nor
      the Debtors make any admission as to the extent, validity,
      priority, or enforceability of the PBGC Purported Liens.

In a separate filing, Tokico formally withdrew its objection to
the sale motion on May 19, 2009.

                        About Delphi Corp.

Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- is a global supplier of mobile
electronics and transportation systems, including powertrain,
safety, steering, thermal, and controls & security systems,
electrical/electronic architecture, and in-car entertainment
technologies.  Delphi technology is also found in computing,
communications, consumer accessories, energy and medical
applications.  Delphi has approximately 146,600 employees and
operates 150 wholly owned manufacturing sites in 34 countries with
sales of $18.1 billion in 2008.

The Company filed for Chapter 11 protection on October 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors.  As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.

The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the
solicitation of votes on the First Amended Plan on December 20,
2007.  The Court confirmed the Debtors' First Amended Plan on
January 25, 2008.  The Plan has not been consummated after a group
led by Appaloosa Management, L.P., backed out from their
proposal to provide US$2,550,000,000 in equity financing to
Delphi.

(Delphi Bankruptcy News, Issue No. 168; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)


DELPHI CORP: Settles EEOC Lawsuit, Agrees to Pay $80,000
--------------------------------------------------------
Delphi Corporation will pay $80,000 and agree to injunctive relief
to settle a disability discrimination lawsuit brought by the U.S.
Equal Employment Opportunity Commission, the agency announced.
The EEOC had charged that the company violated federal law by
subjecting employees to unlawful inquiries into their medical
conditions and retaliating against those who objected to the
inquiries.

In its lawsuit, the EEOC said that Delphi violated the Americans
With Disabilities Act because it required workers returning from
sick leave to sign releases permitting company representatives to
access their medical information.  In the case of an employee at
Delphi's Rochester-based facility, the EEOC said, his protest of
Delphi's policy resulted in his immediate dismissal.

The consent decree resolving the case, submitted for approval to
U.S. District Judge Michael A. Telesca, provides $80,000 to the
dismissed employee and injunctive relief, including changes in
Delphi's sick leave policy, training, and monitoring.

The lawsuit was filed in U.S. District Court for the Western
District of New York on September 28, 2007 (Civil Action No. 07 CV
6430), after the agency investigated, found that discrimination
had occurred, and first attempted to reach a voluntary settlement.

"The EEOC hopes this settlement encourages employers to review
their sick leave policies to ensure that they do not violate the
ADA's prohibitions on medical inquiries and examinations," said
Spencer Lewis, director of the EEOC's New York District Office.
"These provisions are intended to protect all employees from
discrimination based on disability or perceived disability."

Margaret A. Malloy, the EEOC trial attorney assigned to the case,
added, "The EEOC will continue to seek full relief from employers
whose policies violate the ADA."

According to company information, Troy, Mich.-based Delphi has
approximately 133,000 employees and operates 138 wholly owned
manufacturing sites in 34 countries with sales of $18.1 billion in
2008.

The EEOC enforces federal laws prohibiting employment
discrimination.  Further information about the EEOC is available
on its Web site at http://www.eeoc.gov/

                        About Delphi Corp.

Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- is a global supplier of mobile
electronics and transportation systems, including powertrain,
safety, steering, thermal, and controls & security systems,
electrical/electronic architecture, and in-car entertainment
technologies.  Delphi technology is also found in computing,
communications, consumer accessories, energy and medical
applications.  Delphi has approximately 146,600 employees and
operates 150 wholly owned manufacturing sites in 34 countries with
sales of $18.1 billion in 2008.

The Company filed for Chapter 11 protection on October 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors.  As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.

The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the
solicitation of votes on the First Amended Plan on December 20,
2007.  The Court confirmed the Debtors' First Amended Plan on
January 25, 2008.  The Plan has not been consummated after a group
led by Appaloosa Management, L.P., backed out from their
proposal to provide US$2,550,000,000 in equity financing to
Delphi.

(Delphi Bankruptcy News, Issue No. 168; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)


DFI PROCEEDS: Court Sets July 15 Plan Confirmation Hearing
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Indiana
will hold a hearing on July 15, 2009, at 11:10 a.m. to consider
confirmation of the Joint Plan of Liquidation proposed by DFI
Proceeds, Inc., and its official committee of unsecured creditors.

Objections to confirmation of the proposed plan must be filed with
the Court on or before June 24, 2009.

The Court also fixed June 24, 2009, as the last day for the
submission of ballots accepting or rejecting the proposed plan.

On April 27, 2009, the Court approved the adequacy of the joint
disclosure statement filed by the Debtor and the Committee.

                            Plan Terms

The Plan implements the distribution of the proceeds from the sale
of the Debtor's assets to Land-O-Sun Dairies, LLC, after the
payment of Allowed Secured Claims.  The sale closed on
September 22, 2008.

On the Plan's Effective Date, all remaining assets of the Debtor
and its estate, including all unencumbered assets and all Cash,
shall be transferred to and vest in the Liquidating Trust.  From
the proceeds held in the Liquidating Trust, the Liquidating
Trustee is to make distribution to claims in accordance with the
Plan terms.

The Plan segregates the claims against and interests in the Debtor
into 6 classes:

  Class 1   Secured Claims                 Unimpaired

  Class 2   Non-Tax Priority Claims        Unimpaired

  Class 3   General Unsecured Claims       Impaired; Entitled to
                                           Vote

  Class 4   Subordinated 510(c) Claims     Impaired and Deemed to
                                           Reject

  Class 5   Subordinated 510(b) Claims     Impaired and Deemed to
                                           Reject

  Class 6   Old Equity Interests           Impaired and Deemed to
                                           Reject

General Unsecured Claims will receive from the Liquidating
Trustee, in full satisfaction of its claim, its Pro Rata share of
the Class 3 Distribution Amount.  General Unsecured Claims is the
only Class that is entitled to vote to accept or reject the Plan.

On the Plan's Effective Date, the Old Equity Interests will be
cancelled and each holder thereof will not receive or retain any
property or interest on account of said Interests.

Holders of Subordinated 510(c) Claims under Class 4 and
Subordinated 510(b) Claims under Class 5 will not receive or
retain any property under the Plan and are deemed to reject the
Plan, and, therefore, are not entitled to vote to accept or reject
the Plan.

A full-text copy of the disclosure statement explaining the
Debtors' Joint Chapter 11 Plan of Reorganization is available at:

        http://bankrupt.com/misc/DFIProceeds.DSPart1.pdf
        http://bankrupt.com/misc/DFIProceeds.DSPart2.pdf
        http://bankrupt.com/misc/DFIProceeds.DSPart3.pdf

The Debtors reserve the right to seek confirmation of the Plan
pursuant to the "cramdown" provisions under Sec. 1129(b) of the
Bankruptcy Code.  Under said provision of the Bankruptcy Code, a
plan may still be confirmed notwithstanding the non-acceptance
thereof by one or more impaired classes, provided that it does not
"discriminate unfairly" and is "fair and equitable" with respect
to each non-accepting class.

                        About DFI Proceeds

Based in Decatur, Ind., Driggs Farms of Indiana Inc. nka. DFI
Proceeds, Inc., manufactures frozen desserts & novelties and dairy
products.  The Company filed for Chapter 11 protection on
June 20, 2008 (N.D. Indiana Case No. 08-11955).  Daniel J.
Skekloff, Esq., Sarah Mustard Heil, Esq., and Scot T. Skekloff,
Esq., at Skekloff, Adelsperger & Kleven, LLP, are bankruptcy
counsel to the Debtor.  Mark A. Warsco, Esq., and Christine M.
Marcuccilli, Esq., at Rothberg Logan & Warsco L.L.P., represent
the official committee of unsecured creditors.  When the Debtor
filed for protection from its creditors, it listed assets of
$10 million to $50 million and debts of $10 million to
$50 million.


EZRI NAMVAR: Seeks to Convert Case to Chapter 7 Liquidation
-----------------------------------------------------------
Daniel Miller at Los Angeles Business Journal reports that Ezri
Namvar is seeking to convert his Chapter 11 reorganization case to
Chapter 7 liquidation.

Business Journal relates that Mr. Namvar's counsel said in a
May 13 hearing that a Chapter 11 bankruptcy, which typically
results in a long-term payment plan for creditors, would constrain
Mr. Namvar to "a lifetime of servitude" and would make him fail to
provide for his family.  A hearing will be held on June 3 on the
conversion request, says Business Journal.

Creditors generally are against the bankruptcy conversion, which
could net them next to nothing since Mr. Namvar's properties are
encumbered with debt, Business Journal relates, citing people
familiar with the matter.

Ezri Namvar, Chairman, CEO, is founder and principal shareholder
of Namco Capital Group, Inc., a privately held holding company for
companies engaged in real estate investments and financial
services.  Creditors with $7.7 million in claims filed involuntary
Chapter 11 petitions on December 22, 2008, against Mr. Namvar and
Namco Capital (Bankr. C.D. Calif. Case No. 08-32349, and 08-32333.


FIRST MIDWEST: Fitch Downgrades Preferred Stock Rating to 'BB+'
---------------------------------------------------------------
Fitch Ratings has downgraded the long-term Issuer Default Ratings
of First Midwest Bancorp, Inc. and its subsidiary, First Midwest
Bank to 'BBB' from 'BBB+'.  The short-term IDRs of 'F2' have been
affirmed.  The Rating Outlook is Negative.  A complete list of
ratings follows the end of this release.

Fitch has lowered FMBI's long-term ratings and assigned a Negative
Rating Outlook based on FMBI's deteriorating credit quality and
Fitch's expectation of higher credit costs over the near term.
FMBI began reporting deteriorating asset quality in its
residential land and development portfolio a year ago as the
housing market in the Chicagoland area began to experience
significant stress.  This portfolio has continued to exhibit
considerable weakness, and now represents nearly 60% of the
company's nonaccrual assets.  However, more recently, signs of
weakness in other portfolios have emerged.  Most notably,
nonaccruing commercial loans increased 113% in the first quarter
of 2009, and now represent 2.20% of this portfolio segment.  In
addition, several commercial real estate categories, including
office, retail, and industrial, have deteriorated.  Although FMBI
has a history of solid operating performance, the need to build
reserves given the level of asset quality deterioration will
likely erode earnings through higher provisioning expenses.
Accordingly, Fitch has downgraded the company's ratings to reflect
a weaker credit profile, and assigned a Negative Rating Outlook
given the uncertainty surrounding the economic environment and its
effects on the bank's credit quality and earnings.

Fitch has also widened the notching on FMBI's outstanding hybrid
equity, which includes $193 million of preferred stock issued
under the Capital Purchase Program and $125 million in trust
preferred securities.  The widened notching to two notches below
the IDR is typical for issuers at the 'BBB' IDR level.  Fitch
acknowledges several mitigating factors, including solid levels of
capital and parent company liquidity; albeit both are enhanced by
the recent government preferred stock investment.  Prior to
considering any narrower notching of preferred securities in the
future, Fitch would like to see stabilization in the company's
profitability profile.  In resolving the Rating Outlook, Fitch
will also seek evidence that any credit deterioration is not
translating into higher loan losses.

Fitch views FMBI's solid capital base, diversified and stable
funding profile, and stable net interest margin as areas that help
mitigate the aforementioned areas of weakness and help support the
ratings at the newly assigned level.  FMBI maintains solid levels
of regulatory capital, which were augmented in the fourth quarter
2008 with the issuance of nearly $200 million in preferred stock
to the U.S. Treasury.  FMBI also recently cut its common dividend
to $0.01 per share, which will facilitate capital accumulation
through annual savings of $42 million.  FMBI's funding profile
remains good given its core deposit franchise, large investment
portfolio, and access to multiple sources of liquidity.
Profitability has been pressured in recent periods due to higher
provisioning expenses and securities losses; however, FMBI's
margin has remained relatively stable during this difficult
operating environment and the company's cost structure highlights
an efficient operation for the mix of FMBI's business activities.

Fitch downgrades these ratings:

First Midwest Bancorp, Inc.

  -- Long-term Issuer Default Rating to 'BBB' from 'BBB+';
  -- Individual to 'C' from 'B/C';
  -- Subordinated debt to 'BBB-' from 'BBB';
  -- Preferred stock to 'BB+' from 'BBB'.

First Midwest Bank

  -- Long-term IDR to 'BBB' from 'BBB+';
  -- Individual to 'C' from 'B/C';
  -- Long-term deposits to 'BBB+' from 'A-'.

First Midwest Capital Trust I

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

Fitch affirms these ratings:

First Midwest Bancorp, Inc.

  -- Short-term IDR 'F2';
  -- Support '5';
  -- Support floor 'NF'.

First Midwest Bank

  -- Short-term IDR 'F2';
  -- Short-term deposits 'F2';
  -- Support '5';
  -- Support floor 'NF'.


FLEETWOOD ENTERPRISES: Court OK Sale of Mexicali Assets to Krystal
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
has granted Fleetwood International, Inc., and Fleetwood Travel
Trailers of California, Inc. permission to sell their shares of
stock in Fleetwood De Mexico S.A. de C.V. and other assets related
to Fleetwood Enterprises, Inc.'s non-operating travel trailer
manufacturing facility in Mexico to Krystal Enterprises, LLC, and
to a principal of Krystal, Mr. Edward P. Grech.

Pursuant to the Stock Purchase Agreement, Krystal agreed to
arrange the release or indemnification of Fleetwood Enterprises
regarding FEI's potential liability as guarantor of the Mexicali
Lease.

Krystal is a California corporation that manufactures stretch
limousines, professional vehicles, and luxury mid-size buses.  The
Debtors tell the Court that in order to commence production for
its summer 2009 sales season, Krystal needs to close on the
proposed purchase of the Mexicali Assets by mid-May 2009.

As reported in the Troubled Company Reporter on May 11, 2009,
Krystal offered to pay $150,000 in cash for the Mexicali Assets.
Fleetwood International Inc. owns 49,999 out of the 50,000
outstanding shares of Fleetwood Mexico.  Fleetwood Travel Trailers
of California, Inc., owns the remaining one share in Fleetwood
Mexico.  Fleetwood Mexico in not a Chapter 11 debtor.

                    About Fleetwood Enterprises

Headquartered Riverside, California, Fleetwood Enterprises --
http://www.fleetwood.com/-- produces recreational vehicles and
manufactured homes.  Fleetwood motor home products are distributed
through a nationwide network of approximately 150 dealers.  The
Company and 19 of its affiliates filed for Chapter 11 protection
on March 10, 2009 (Bankr. C.D. Calif. Lead Case No. 09-14254).
Craig Millet, Esq., at Gibson, Dunn & Crutcher LLP, represents the
Debtors in their restructuring efforts.  The Debtors proposed
Ernst & Young LLP as auditor, FTI Consulting Inc. as consultant,
and Greenhill & Co. LLC as financial advisor.


FLEETWOOD ENTERPRISES: Seeks Sale of Military Housing Business
--------------------------------------------------------------
Fleetwood Enterprises, Inc., et al., ask the U.S. Bankruptcy Court
for the Central District of California to approve the expedited
sale of assets related to their military housing business in
Belton, Texas, to CMH Manufacturing, Inc., free and clear of all
liens and encumbrances, for the purchase price of $4,500,000,
plus:

(i) purchaser's agreement to relieve the Debtors of about
     $4,000,000 of the Debtors' bonding obligations relating to
     certain work in progress that CMH will complete, and

(ii) purchaser's agreement to assume approximately $1,000,000 of
     the Debtors' warranty obligations with respect to completed
     military housing projects.

There will be no formal auction or overbidding for these assets.

The sale is contingent upon CMH being awarded the Fort Sam Houston
III Contract in place of the Debtor.  The new contract is
scheduled to begin May 26, 2009.

The Debtors state that as a result of the transaction and the
obligations assumed by CMH, they will be able to reduce their
existing $25 million in bonding obligations to less than
$6 million.

The Debtors have been informed that, assuming the reduction in
bonding is achieved, its prepetition secured lender and the
official committee of unsecured creditors consent to the sale of
the Military Housing Assets as well as the consideration of the
motion on shortened time.

A copy of the Asset Purchase Agreement between CMH, as purchaser,
and the Debtors dated as of May 22, 2009, attached as Exhibit A to
the motion, is available at:

       http://bankrupt.com/misc/Fleetwood.CMH.APA.pdf

The Court has set a hearing on the motion for Wednesday, May 27,
2009, at 1:30 p.m. (Pacific Time).

Headquartered Riverside, California, Fleetwood Enterprises --
http://www.fleetwood.com/-- produces recreational vehicles and
manufactured homes.  Fleetwood motor home products are distributed
through a nationwide network of approximately 150 dealers.  The
Company and 19 of its affiliates filed for Chapter 11 protection
on March 10, 2009 (Bankr. C.D. Calif. Lead Case No. 09-14254).
Craig Millet, Esq., at Gibson, Dunn & Crutcher LLP, represents the
Debtors in their restructuring efforts.  The Debtors proposed
Ernst & Young LLP as auditor, FTI Consulting Inc. as consultant,
and Greenhill & Co. LLC as financial advisor.


FOOTHILLS RESOURCES: Deregisters Unissued Common Shares
-------------------------------------------------------
Foothills Resources, Inc., in separate regulatory filings said it
would deregister shares of common stock registered under certain
registration statements that remain unissued.

On June 23, 2008, Foothills Resources filed a Registration
Statement on Form S-1, File No. 333-137925, registering 48,700,960
shares of the Company's common stock, par value $0.001 per share,
and warrants to acquire 20,597,532 shares of Common Stock.
Foothills Resources early this month filed a Post-Effective
Amendment No. 2 with the Securities and Exchange Commission to
deregister all shares of Common Stock that remain unissued.

On July 7, 2008, Foothills Resources filed a Registration
Statement on Form S-8, File No. 333-152157, registering 2,000,000
shares of the Company's common stock, par value $0.001 per share
available for issuance under the Company's 2006 Equity Incentive
Plan and 5,000,000 shares of the Company's Common Stock available
for issuance under the Company's 2007 Equity Incentive Plan.  The
Company also filed a Post-Effective Amendment No. 1 early this
month to deregister all shares of Common Stock that remain
unissued.

Foothills Resources also filed a Form 15 with the SEC canceling
its duty to file reports.

Foothills Resources, Inc., is engaged in the acquisition,
exploration and development of oil and natural gas properties.
The company's operations are primarily through its wholly owned
subsidiaries, Foothills California, Inc., Foothills Texas, Inc.,
and Foothills Oklahoma, Inc.

On February 11, 2009, Foothills Resources and its wholly owned
subsidiaries, Foothills California, Foothills Oklahoma, and
Foothills Texas, filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No.
09-10452).  Judge Christopher S. Sontchi handles the Chapter 11
cases.  Akin Gump Strauss Hauer & Feld LLP is the Debtors' lead
bankruptcy counsel.  Norman L. Pernick, Esq., and Patrick J.
Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard,
represent the Debtors as Delaware counsel.  The Garden City Group,
Inc., is the claims agent for the Debtors.

Foothills Resources had $41.1 million in total assets;
$79.3 million in current liabilities, and $809,000 in asset
retirement obligations; resulting in $39.0 million in
stockholders' deficit at December 31, 2008.

Foothills Resources listed assets of $89.5 million and debts
totaling $78.8 million as of Sept. 30, with $71.2 million owed to
secured creditors on term loan and revolving credit agreements.


FREDDIE MAC: May Sell Almost $1BB of Commercial-Mortgage Bonds
--------------------------------------------------------------
Freddie Mac may sell almost $1 billion of commercial-mortgage
bonds backed by multifamily loans on Tuesday to boost the battered
apartment sector, Prabha Natarajan at The Wall Street Journal
reports, citing a person familiar with the matter.

WSJ notes that the transaction would open up a new way for Freddie
to support lending in the multifamily market.  WSJ relates that
apartment and condominium complexes have been the most troubled in
the real-estate sector.

According to WSJ, Freddie Mac and its sibling Fannie Mae have held
multifamily loans on their books without securitizing them.  WSJ
relates that Fannie Mae has begun securitizing home loans it holds
in its portfolio, but hasn't sold them to investors yet.  Freddie,
by packaging the multifamily loans into tradable bonds, will free
up capital so that it can invest in more multifamily loans, WSJ
notes.  According to the report, Freddie Mac has sold the
multifamily loans held in its investment portfolio to a Deutsche
Bank Trust, which will package and sell these bonds.  The report,
citing a person familiar with the matter, states that the deal
will be led by Deutsche Bank.

The Federal Home Loan Mortgage Corporation -- (FHLMC) NYSE: FRE --
commonly known as Freddie Mac, is a stockholder-owned government-
sponsored enterprise authorized to make loans and loan guarantees.
Freddie Mac was created in 1970 to provide a continuous and low
cost source of credit to finance America's housing.

Freddie Mac conducts its business primarily by buying mortgages
from lenders, packaging the mortgages into securities and selling
the securities -- guaranteed by Freddie Mac -- to investors.
Mortgage lenders use the proceeds from selling loans to Freddie
Mac to fund new mortgages, constantly replenishing the pool of
funds available for lending to homebuyers and apartment owners.

At December 31, 2008, the Company's balance sheet showed total
assets of $850.9 billion and total liabilities of $881.6 billion,
resulting in a stockholders' deficit of $30.7 billion.

                         Conservatorship

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

Being under Conservatorship, Freddie Mac said it is dependent upon
the continued support of Treasury and FHFA to continue operating
its business.


FREMONT GENERAL: Court OKs Massachusetts, California Settlements
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
on May 14, 2009, approved from the bench:

     (i) the Final Judgment By Consent between the Commonwealth of
         Massachusetts, Fremont General Corporation and Fremont
         Reorganizing Corporation, the Company's indirect wholly-
         owned subsidiary; and

    (ii) the Stipulation and Agreement regarding the global and
         integrated settlement and release of all claims and
         disputes by and among the Company; FRC; Fremont
         Compensation Insurance Group, Inc., which is a direct
         subsidiary of the Company; and the State of California
         Insurance Commissioner, as statutory liquidator of
         Fremont Indemnity, and as statutory conservator of
         Fremont Life Insurance Company in Conservation, an
         indirect subsidiary of the Company.

(A) Massachusetts Attorney General Action

In October 2007, the Commonwealth filed a lawsuit in Massachusetts
Superior Court in Suffolk County alleging that the Company and
FRC, formerly known as Fremont Investment & Loan, engaged in
unfair or deceptive practices in connection with the origination
and servicing of residential mortgage loans made to residents of
Massachusetts.  The lawsuit was brought on behalf of the
Commonwealth and such borrowers.  The complaint sought injunctive
relief, equitable relief for such Massachusetts borrowers and
civil penalties.  Since February 25, 2008, the Company and FRC
have been operating under a preliminary injunction issued by the
Superior Court, as modified on March 31, 2008, which enjoined the
Company and FRC from foreclosing on certain loans made to
Massachusetts residents without the approval of the Superior Court
and prevented the Company and FRC from selling, transferring, or
assigning any Massachusetts residential mortgage loan unless
certain conditions were met.

Pursuant to the Final Judgment -- entered into on April 17, 2009
-- FRC will pay $10 million to the Commonwealth on the Effective
Date.  If neither FRC nor Fremont General Credit Corporation, a
subsidiary of the Company, is the subject of a bankruptcy
proceeding under the Bankruptcy Code as of a date which is
approximately 95 days after the Effective Date, and no court has
determined that either the Company or FRC has violated any of the
terms of the Final Judgment, the Commonwealth will withdraw with
prejudice the proof of claim in the estimated amount of
$20 million that it previously filed with the Bankruptcy Court on
December 12, 2008.  In the event that either FRC or FGCC are in
bankruptcy proceedings on such date, then the Commonwealth may
void the Final Judgment and refund the $10 million as more fully
discussed below.

To the extent the Final Judgment becomes effective, the
Preliminary Injunction will be modified and will become a
permanent injunction that will only apply to loans to
Massachusetts residents or to loans secured by property in
Massachusetts.  The parties agree that the entry of the Permanent
Injunction may not be construed as, evidence that FRC or the
Company used or employed unfair or deceptive acts or practices.
Pursuant to the Permanent Injunction, the Company or FRC must
provide the Massachusetts Attorney General with prior notice
before initiating or advancing a foreclosure on any mortgage loan
originated by FRC.  If the Attorney General does not provide a
written objection, the Company or FRC may proceed with the
foreclosure.

Before the Company or FRC may sell, transfer or assign any
mortgage loan originated by FRC that is secured by any residential
property in Massachusetts, they must (i) provide the Attorney
General prior notice; (ii) a purchaser or assignee from FRC must
agree to be bound by the foreclosure and sale restrictions of the
Permanent Injunction; and (iii) a copy of the written assignment
must be provided to the Attorney General.

In consideration of the Company and FRC's compliance with the
provisions of the Final Judgment, upon the entry of Final Judgment
by the Superior Court, the Commonwealth will release and forever
discharge the Company and FRC from the claims set forth in the
Massachusetts Action.

If either FRC or FGCC is the subject of a bankruptcy proceeding
under the Bankruptcy Code as of a date which is approximately 95
days after the Effective Date, then the Commonwealth may elect to
void the release and file a notice with the Superior Court to
recommence the Massachusetts Action, provided, however, that the
notice must be filed on or before 125 days following the Effective
Date.  Upon the filing of the notice, the Commonwealth will have
the right to immediately recommence litigation against the Company
and FRC for any alleged misconduct, including for the conduct set
forth in the Massachusetts Action.  Before filing the notice with
the Superior Court, the Commonwealth must repay to FRC the
entirety of the $10 million paid by FRC on the Effective Date.  In
addition, if the Commonwealth exercises its right to recommence
the litigation, then nothing in the Final Judgment will limit the
total amount of the claim that may be sought by the Commonwealth
in any FRC bankruptcy or the rights of the Company, FRC or FGCC to
object to any claim sought by the Commonwealth.

(B) Fremont Indemnity Company (In Liquidation) v. Fremont General
    Corporation, et al.; Fremont Indemnity Company (In Liquidation
    as Successor in Interest to Comstock Insurance Company) v.
    Fremont General Corporation, et al.; and Insurance
    Commissioner of the State of California v. Fremont General
    Corp. et al.

In June 2004, the Commissioner, as statutory liquidator of Fremont
Indemnity, filed suit in Los Angeles Superior Court against the
Company alleging it improperly utilized certain net operating loss
deductions allegedly belonging to Fremont Indemnity.  In 2005, the
Commissioner filed an additional and separate complaint against
the Company on behalf of Fremont Indemnity as successor in
interest to Comstock Insurance Company, a former affiliate of
Fremont Indemnity, which was subsequently merged into Fremont
Indemnity.  This case alleged similar causes of action regarding
the utilization of the NOLs as in the Fremont Indemnity Case as
well as assertions of improper transactions with other insurance
subsidiaries and affiliates of Fremont Indemnity.  In 2008, FRC
was added as a defendant in both the Fremont Indemnity Case and
the Comstock Action.

As a result of disagreements as to whether Fremont Indemnity,
which is in liquidation, or its subsidiaries could be considered
as part of the Company's consolidated taxpayer group for federal
tax purposes, the Commissioner requested that the Internal Revenue
Service issue a private letter ruling to resolve the dispute,
which the IRS issued on July 26, 2006.  Based upon this IRS
private letter ruling, the Commissioner has taken the position
that Fremont Indemnity and its subsidiaries should be included in
the Company's consolidated taxpayer group and the Company has
maintained its objection to such tax treatment.

In March 2008, the Commissioner filed a lawsuit in California
state court asserting, on behalf of Fremont Indemnity, claims of
ownership of substantial portions of certain artwork, including
any related proceeds from the sale of such artwork, that at any
time were in the possession or control of the Company or any of
its affiliates.  That state court lawsuit was removed to the
Bankruptcy Court on July 11, 2008, and is now a pending adversary
proceeding wherein the Commissioner has asserted ownership rights
to such artwork and related proceeds.

In connection with the actions, the Commissioner filed four proofs
of claim with the Bankruptcy Court asserting against the Company
all of the claims set forth in the Fremont Indemnity Case, the
Comstock Action, the Art Adversary Dispute, and the Tax
Consolidation Dispute.  Collectively, the liquidated amount of the
claims asserted by the Commissioner are approximately
$489 million, as well as claims based upon various alleged
unliquidated components.

On April 17, 2009, the Company, FRC, Fremont Compensation
Insurance Group, Inc., which is a direct subsidiary of the
Company, and the Commissioner, as the statutory liquidator of
Fremont Indemnity and the statutory conservator of Life, entered
into a Stipulation and Agreement regarding the global and
integrated settlement and release of all claims and disputes.

The Fremont Entities and the Commissioner agreed to:

   -- Tax Matters: Within 20 days of the Stipulation Effective
      Date, the Fremont Entities will make any necessary requests,
      enter into any agreements or make any necessary filings with
      the IRS to document that Fremont Indemnity has been
      deconsolidated from the group of affiliates of the Company
      that elect to participate in a consolidated federal taxpayer
      group so that Fremont Indemnity may utilize on its separate
      tax returns without limitation or restriction any NOL
      generated by Fremont Indemnity on or after January 1, 2003.
      In addition, after the Stipulation Effective Date, the
      Company will reasonably cooperate with the Commissioner in
      the preparation, filing, approval and consummation of the
      statutory liquidation case involving Fremont Indemnity as
      more fully set forth in the Stipulation.

   -- Life Stock: On the Stipulation Effective Date, FCIG, as the
      holder of all of the issued and outstanding stock of Life,
      will transfer to Fremont Indemnity all of its right, title,
      and interest in the stock of Life.

   -- Proofs of Claim: On the Stipulation Effective Date, each of
      the proofs of claim filed by the Commissioner with the
      Bankruptcy Court will be withdrawn, disallowed, and expunged
      in their entirety, with prejudice. The Commissioner will be
      allowed a $5 million general unsecured non-priority claim in
      the Company's bankruptcy proceeding, which claim will be
      the sole and exclusive right to payment the Commissioner,
      Fremont Indemnity and Life will have against the Company's
      bankruptcy estate.

   -- Disposition of the Artwork Adversary Dispute: On the
      Stipulation Effective Date, the Commissioner will receive
      $4.1 million of the funds, presently held in escrow, from
      the sale of certain of the Company's artwork.  The Company
      will receive the remaining proceeds held in an escrow
      account (approximately $300,000) and ownership rights to all
      of the remaining artwork, including any future proceeds from
      the sale or disposition of such artwork.

   -- Cash Payment: On the Stipulation Effective Date, FRC will
      pay to Fremont Indemnity $5.0 million in cash.

   -- Dismissal of Pending Litigation: As soon as practicable
      after the Stipulation Effective Date, the Commissioner will
      cause to be dismissed with prejudice all of the
      aforementioned actions, including any counterclaim or cross
      -complaint filed, and the Fremont Entities will cause to be
      dismissed with prejudice any proofs of claim filed in
      connection with the statutory liquidation case involving
      Fremont Indemnity.

   -- Exchange of Releases: Except for the agreements and
      obligations expressly undertaken or to be performed under
      the Stipulation, on the Stipulation Effective Date, in
      consideration of the payments and other consideration
      recited in the Stipulation, the Commissioner, Fremont
      Indemnity, Life and the Fremont Entities will mutually
      release, acquit, and forever discharge each party and
      certain related parties (subject to specified exceptions)
      from the claims set forth in the aforementioned actions.

Bankruptcy Court approval was the first step in the effectiveness
of the settlement agreements.

The Final Judgment will become effective once (i) the Bankruptcy
Court's order approving the Final Judgment becomes a final, non-
appealable order, which can only occur following entry of the
order and the expiration of a 10-day period to allow for the
filing of any appeal; and (ii) the Massachusetts Superior Court in
Suffolk County approves and enters the Final Judgment.

The Insurance Stipulation will become effective once (i) the
Superior Court of the State of California for the County of Los
Angeles assigned to preside over the statutory liquidation case
involving Fremont Indemnity and the state court overseeing the
conservation of Life approve the Insurance Stipulation; and (ii)
the Bankruptcy Court's order, the Liquidation Court's order and
the Life Court's order approving the Insurance Stipulation become
final, non-appealable orders, following the expiration of any
applicable waiting periods.

                     About Fremont General

Based in Santa Monica, Calif., Fremont General Corp. (OTC: FMNTQ)
-- http://www.fremontgeneral.com/-- was a financial services
holding company with $8.8 billion in total assets at September 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 Brian M. Metcalf, 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 October 30, 2008, disclosing
$330,036,435 in total assets and $326,560,878 in total debts.


FREMONT GENERAL: Settles $27MM D&O Claims, Insurance Agency Suit
----------------------------------------------------------------
Fremont General Corporation entered into a trilateral stipulation
and agreement on May 15, 2009, with Louis J. Rampino, James A.
McIntyre, Wayne R. Bailey, John A. Donaldson, Ronald A. Groden, W.
Brian O'Hara, and Raymond G. Meyers and the State of California
Insurance Commissioner, as statutory liquidator of Fremont
Indemnity Company, an indirect subsidiary of the Company that is
in liquidation.

The parties agree to settle the outstanding litigation between the
Rampino Defendants, as former officers and directors of the
Company or of Fremont Indemnity, and the Commissioner, as the
statutory liquidator of Fremont Indemnity, and to resolve 15
proofs of claim, asserting liquidated amounts that, in the
aggregate, exceed $27 million, and that contain substantial
contingent and unliquidated components, which were filed by the
Rampino Defendants in the Company's bankruptcy proceedings.

This Rampino Stipulation has been entered into as part of the
Company's initiative to resolve contingent and unliquidated
claims, including various litigation matters.  The Rampino
Stipulation is subject to Bankruptcy Court approval.

On October 12, 2006, the Commissioner, as statutory liquidator of
Fremont Indemnity, filed a First Amended Complaint in the Los
Angeles Superior Court (Case No. BC357691) against the Rampino
Defendants, as former directors and officers of Fremont Indemnity,
that alleged the Rampino Defendants breached their fiduciary
duties by allowing Fremont Indemnity to engage in an inappropriate
underwriting scheme that caused injury to Fremont Indemnity's
reinsurers, which in turn injured Fremont Indemnity by settlements
it made with those reinsurers.  Although neither the Company nor
any of its affiliates are defendants in the D&O Case, it is
possible that the Company could have indemnification obligations
to some or all of the Rampino Defendants pursuant to the Company's
governing documents and applicable state law.

After the Company commenced the Bankruptcy Case, each of the
Rampino Defendants filed one or more proofs of claim based upon,
among other things, the theory that the Company is liable to
indemnify each of the Rampino Defendants for any settlement
amounts or judgment that may be entered against the Rampino
Defendants in the D&O Case.

The Rampino Stipulation will only become effective after the
occurrence of these events: (i) the Company files a motion
requesting that the Bankruptcy Court approve the Rampino
Stipulation, which the Company expects to timely file; (ii) the
Commissioner files a motion requesting that the Superior Court of
the State of California for the County of Los Angeles assigned to
preside over the statutory liquidation case involving Fremont
Indemnity approve the Rampino Stipulation; (iii) the Bankruptcy
Court and the Liquidation Court each issue orders approving the
Rampino Stipulation; (iv) the Bankruptcy Court's order and the
Liquidation Court's order approving the Rampino Stipulation become
final, non-appealable orders, following the expiration of any
applicable waiting periods.

The parties agreed to exercise their reasonable best efforts to
complete all of these events before June 30, 2009.

In accordance with the terms of the Rampino Stipulation and in
consideration of the settlement of all claims and disputes among
them, the Commissioner, Fremont Indemnity, the Company and the
Rampino Defendants agreed to:

   -- $35 Million Allowed General Unsecured Commissioner Claim

      On the Effective Date, the Commissioner will be allowed for
      purposes of voting on any proposed plan of liquidation or
      reorganization, as the case may be, in the Bankruptcy Case
      and receiving any distributions made pursuant to the Chapter
      11 Plan or otherwise in the Company's bankruptcy case, a
      general unsecured non-priority claim against the Company for
      $35 million.  However, upon the Commissioner's actual
      receipt of distributions from the Company's bankruptcy
      estate totaling $22.0 million, the Allowed Commissioner
      Claim will be deemed to be satisfied in full, and the
      Commissioner will have no further right to any
      distributions or payment from the Company's bankruptcy
      estate on account of the D&O Case.  The Allowed Claim will
      be the sole and exclusive right to payment that the
      Commissioner will have against the Company's bankruptcy
      estate on account of the D&O Case.  The Allowed Claim will
      be in addition to the $5 million general unsecured non-
      priority claim against the Company's bankruptcy estate for
      an unrelated pending settlement of outstanding disputes
      between the Company and the Commissioner, in its capacity as
      statutory liquidator of Fremont Indemnity and statutory
      conservator of Fremont Life Insurance Company in
      Conservation, an indirect subsidiary of the Company.

   -- Final Disallowance of the Proofs of Claim

      On the Effective Date, each of the Rampino Defendants'
      proofs of claim will be deemed to have been withdrawn,
      disallowed, and expunged in their entirety and with
      prejudice.

   -- Allowed General Unsecured SERP Claims

      On the Effective Date, Messrs. Bailey, Rampino, McIntyre,
      Meyers will each be allowed for purposes of voting on any
      Chapter 11 Plan and receiving any distributions made
      pursuant to such Chapter 11 Plan or otherwise in the
      Company's bankruptcy case, a general unsecured non-priority
      claim against the Company:

                Bailey            $4.6 million
                Rampino           $5.6 million
                McIntyre          $5.2 million
                Meyers            $2.3 million

      However, upon Messrs. Bailey, Rampino, McIntyre, and Meyers'
      actual receipt of distributions from the Company's
      bankruptcy estate totaling:

                Bailey            $2.874 million
                Rampino           $3.470 million
                McIntyre          $3.227 million
                Meyers            $1.420 million,

      the Allowed SERP Claims will be deemed to be satisfied in
      full, and Messrs. Bailey, Rampino, McIntyre, and Meyers
      will have no further right to any distributions or payment
      from the Company's bankruptcy estate.  The Allowed SERP
      Claims will constitute only general unsecured non-priority
      claims and Messrs. Bailey, Rampino, McIntyre, and Meyers
      will have no right to any distribution or payment from
      either the Fremont General Corporation Supplemental
      Executive Retirement Plan, as amended, or the Fremont
      General Corporation Supplemental Executive Retirement Plan
      II, as amended.

   -- Dismissal of Pending Litigation

      As soon as is practicable after the Effective Date, the
      Commissioner and Fremont Indemnity will cause the D&O Case
      to be dismissed with prejudice, with all parties thereto to
      bear their own respective attorneys' fees and costs.  In
      addition, Messrs. Bailey, Rampino, McIntyre, and Meyers will
      cause each of their respective adversary proceedings pending
      before the Bankruptcy Court to be dismissed with prejudice
      against all defendants thereto other than the Company, with
      all parties thereto to bear their own respective attorneys'
      fees and costs, with dismissal against the Company
      conditioned upon Messrs. Bailey, Rampino, McImyre, and
      Meyers receiving full payment on their Allowed SERP Claims.

   -- Exchange of Releases

      Except for the agreements and obligations expressly
      undertaken or to be performed under the Rampino Stipulation,
      on the Effective Date, in consideration of the payments and
      other consideration recited in the Rampino Stipulation, the
      Commissioner, Fremont Indemnity, the Company and the Rampino
      Defendants will mutually release, acquit, and forever
      discharge each other and certain related parties from any
      and all past, present, and future claims, arising in whole
      or in part out of any facts, circumstances, or events in
      existence on or before the Effective Date provided, however,
      that nothing in the Rampino Stipulation is intended to
      release any claims that any of the parties may have with
      respect to any insurance policy issued by any insurer of any
      of the parties.  In addition, the Rampino Stipulation will
      not operate to release any claims that the Rampino
      Defendants' may have against the Company's bankruptcy estate
      as a result of their ownership of Company common stock or
      other securities of the Company or any of its affiliates.

                     About Fremont General

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

Fremont General filed for Chapter 11 protection on June 18, 2008,
(Bankr. C.D. Calif. Case No. 08-13421).  Robert W. Jones, Esq.,
and J. Maxwell Tucker, Esq., at Patton Boggs LLP, Theodore
Stolman, Esq., Scott H. Yun, Esq., and Whitman L. Holt, Esq., at
Stutman Treister & Glatt, represent the Debtor as counsel.
Kurtzman Carson Consultants LLC is the Debtor's Noticing
Agent/Claims Processor.  Lee R. Bogdanoff, Esq., Jonathan S.
Shenson, Esq., and Brian M. Metcalf, 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 October 30, 2008, disclosing
$330,036,435 in total assets and $326,560,878 in total debts.


FREMONT GENERAL: Still Evaluating Proponents for Ch. 11 Plan
------------------------------------------------------------
Fremont General Corporation failed to file its Quarterly Reports
on Form 10-Q for the quarter ended March 31, 2009, by the May 15,
2009 due date and does not expect to make that filing within the
15-day extension permitted by the rules of the U.S. Securities and
Exchange Commission.

Fremont General noted that it is still evaluating prospective plan
proponents for a plan of reorganization to determine whether the
implementation of any plan is in the best interest of the Company,
its creditors and its various other constituencies.  Fremont
General currently has the exclusive right to file and solicit
acceptances of a reorganization plan.  The Exclusive Periods end
June 1, 2009.

The Company said it cannot provide any assurance that any plan
would be acceptable to the Company's constituents or that any plan
of reorganization will be confirmed by the Bankruptcy Court.

The Company also has not completed its consolidated financial
statements for the year ended December 31, 2008, and the quarters
ended March 31, 2008, June 30, 2008, and September 30, 2008.

The Company said it is reviewing the feasibility of completing its
2008 consolidated financial statements in the context of the
Company's bankruptcy filing.  As a result of these matters
confronting the Company, the Company is not able to determine when
it will be able to file its March 10-Q with the SEC.  The Company
also is not in a position to quantify any significant change in
results of operations for the quarter ended March 31, 2009, as
compared to the prior year at this time.

                     About Fremont General

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

Fremont General filed for Chapter 11 protection on June 18, 2008,
(Bankr. C.D. Calif. Case No. 08-13421).  Robert W. Jones, Esq.,
and J. Maxwell Tucker, Esq., at Patton Boggs LLP, Theodore
Stolman, Esq., Scott H. Yun, Esq., and Whitman L. Holt, Esq., at
Stutman Treister & Glatt, represent the Debtor as counsel.
Kurtzman Carson Consultants LLC is the Debtor's Noticing
Agent/Claims Processor.  Lee R. Bogdanoff, Esq., Jonathan S.
Shenson, Esq., and Brian M. Metcalf, 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 October 30, 2008, disclosing
$330,036,435 in total assets and $326,560,878 in total debts.


FRONTIER AIRLINES: Asks Court to Approve Amended WestLB Facility
----------------------------------------------------------------
Frontier Airlines Holdings, Inc., and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the Southern District
of New York under Section 363(b) of the Bankruptcy Code to perform
under these amended agreements with WestLB AG, New York Branch:

   (a) Amendment No. 4 to the WestLB Facility or Credit Agreement
       dated as of March 21, 2005;

   (b) Amendment No. 1 to the Spare Parts Mortgage and Security
       Agreement dated as of March 21, 2005; and

   (c) Amendment No. 1 to the Amended and Restated Secured
       Superpriority Debtor-in-Possession Credit Agreement dated
       as of April 1, 2009, between and among the Debtors, the
       lenders party and Wells Fargo Bank Northwest, National
       Association, as administrative agent.

Full text copies of the Amended Agreements are available for free
at:

   * http://bankrupt.com/misc/FAH_AmendmentNo4WestLBFacility.pdf
   * http://bankrupt.com/misc/FAH_AmendmentNo1MortgagePact.pdf
   * http://bankrupt.com/misc/FAH_AmendmentNo1CreditPact.pdf

Damian S. Schaible, Esq., at Davis Polk & Wardwell, in New York,
relates that pursuant to the WestLB Facility, WestLB has issued
letters of credit on the Debtors' behalf that are required in the
ordinary course of the Debtors' businesses.  There is presently
$12,053,579 worth of L/Cs outstanding under the WestLB Facility,
which are principally issued to state and local governmental
authorities as part of airport lease agreements and workers'
compensation insurance underwriters.

Pursuant to the WestLB Mortgage, substantially all of the Debtors'
spare aircraft and engine parts serve as collateral for the WestLB
Facility.

According to Mr. Schaible, the WestLB Facility presently matures
on July 31, 2009, prior to which, the Debtors must replace each of
the L/Cs outstanding.  Two of the outstanding L/Cs are scheduled
to be renewed even prior to the Maturity Date, consisting of:

   (1) an L/C in the face amount of $4,500,000 issued to AIG
       Aviation, Inc.; and

   (2) an L/C in the face amount of $1,500,000 issued to ACE
       American Insurance Company.

At the Debtors' request, WestLB has agreed to renew these letters
of credit in order to provide the Debtors sufficient time to
replace them in the ordinary course.  Since WestLB's exposure
under the Remaining Letters of Credit will be significantly
smaller than it was under all of the L/Cs previously issued under
the WestLB Facility, the Debtors and WestLB will amend the WestLB
Mortgage to release WestLB's lien on a portion of the Spare Parts.

Mr. Schaible reasons out that the extension of the Remaining
Letters of Credit, pursuant to the WestLB Amendment, "will permit
the Debtors to comply with letter of credit or surety requirements
in vital operating agreements on terms not generally available in
the current market."

The WestLB Facility and the WestLB Mortgage are prepetition
obligations of the Debtors.  None of the Amendments constitute
(i) the Debtors' assumption of the WestLB Facility or the WestLB
Mortgage, (ii) an agreement to assume the WestLB Facility or the
WestLB Mortgage, or (iii) a postpetition reaffirmation of the
WestLB Facility or the WestLB Mortgage, Mr. Schaible clarifies.


Mr. Schaible further relates that the DIP Credit Facility has been
amended in various respects, including on April 1, 2009, in order
to, among other things, obtain postpetition refinancing of up to
$40 million with an outside maturity date of December 1, 2009.
Because the DIP Credit Facility, as previously amended,
contemplated that the WestLB Facility would not be extended past
its original maturity date, the DIP Amendment is required in order
to permit the Debtors to enter into the WestLB Amendment.

Furthermore, the Debtors seek to reinstate, as against Frontier
Airlines Holdings, Inc., WestLB's Claim Nos. 1361 and 1634 in
connection with the WestLB Mortgage and certain aircraft
transactions between the parties.  The Claims were previously
expunged by the Court in November 2008, at the Debtors' behest.

Mr. Schaible elaborates that the Debtors and WestLB recognize that
the Debtors' objection to the Claims was based upon the
classification of the Claims as being asserted against Frontier,
instead of against Frontier Holdings.  Accordingly, the Debtors
have agreed that although the Claims were expunged against
Frontier, the Claims should be reinstated against Frontier
Holdings, without prejudice.

Since the Claims are merely "contingent guaranty Claims" that
relate to the Agreements and are protected under Section 1110 of
the Bankruptcy Code, reinstating the Claims against Frontier
Holdings is appropriate, Mr. Schaible tells Judge Drain.
However, Mr. Schaible says, the reinstatement of the Claims will
not constitute an allowance of the Claims or prejudice in any way
the right of the Debtors to object to the Claims on any grounds.

The Debtors also ask the Court to convene an expedited hearing on
May 27, 2009, to consider their request.  "It is important that
the Debtors receive the relief requested . . . expediently because
[they] need to have assurance that the Remaining Letters of Credit
need not be replaced and will be extended past their present
expiry dates," Mr. Schaible avers.

                     About Frontier Airlines

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: Court Extends Exclusivity Periods to October 9
-----------------------------------------------------------------
Judge Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District New York extended the periods within which
Frontier Airlines Holdings, Inc., and its debtor-affiliates may:

(1) file a plan of reorganization through October 9, 2009; and

(2) solicit and obtain acceptances of that plan through
     December 9, 2009.

The Debtors have noted that the Extensions will allow them to:

   * continue to refine and implement their business model to
     deliver both a more efficient cost structure and future
     revenue growth;

   * finish the implementation of the Debtors' successful
     Restructuring initiatives;

   * finish the process of analyzing, rationalizing and, where
     appropriate, renegotiating with parties to the Debtors'
     executory contracts and related obligations;

   * continue the evaluation and reconciliation of the more
     than 1,400 proofs of claim filed in the Chapter 11 cases;

   * structure, secure and negotiate exit financing sufficient
     to permit emergence from Chapter 11 and a successful and
     sustained operations post-emergence; and

   * develop a plan of reorganization reflecting and
     effectuating the Debtors' initiatives and providing value
     to their stakeholders.

Ultimately, the Extended Exclusive Periods will prevent the
necessity of having to formulate a Chapter 11 plan prematurely,
while ensuring that the plan best addresses the interests of the
Debtors, their employees, creditors and estates.

The Debtors also filed with the Court a declaration stating that
there were no objections or responses to their Extension request.

                     About Frontier Airlines

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: Primeflight Sells $1.4MM Claim to ASM Capital
----------------------------------------------------------------
The Clerk of Court Vito Genna informed parties-in-interest in the
bankruptcy cases of Frontier Airlines Holdings, Inc., and its
debtor-affiliates that Claim No. 367, filed by Primeflight
Aviation Services, Inc., has been transferred as of May 6, 2009,
to ASM Capital LP.

Primeflight asserted that it is transferring "all of its right,
title, benefit and interest in Claim No. 367 for $1,40,133," to
ASM Capital.

Absent any objections, ASM Capital will be substituted as the
original Claimant without further Court order, Mr. Genna noted.

                     About Frontier Airlines

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: US Trustee Wants Reports Before Fees Are Paid
---------------------------------------------------------------
Diana G. Adams, United States Trustee for Region 2, objects to the
payment -- as opposed to the allowance -- of compensation and
reimbursement of expenses for the period December 1, 2008 through
March 31, 2009, in the bankruptcy cases of Frontier Airlines
Holdings, Inc., and its debtor-affiliates "until the Debtors are
current with the filing of all monthly operating reports and the
payment of all quarterly fees."

Ms. Adams relates that the Debtors' consolidated monthly operating
report for the period ended March 31, 2009, reported a net loss of
$129 million, and a cumulative net loss of $237 million since the
Petition Date.  The Debtors also disclosed "Cash and cash
equivalents" of $71 million as of March 31, 2009, she added.

As of May 2009, Frontier Airlines Holdings, Inc., and Lynx
Aviation, Inc., have outstanding quarterly fees of $325 and
$20,000, due for the first quarter of 2009, pursuant to Section
1930(a)(6) of the Judiciary and Judicial Procedures Code, Ms.
Adams told the Court.

Ms. Adams also asks the Court to reduce any fees awarded to the
Debtors' professionals "by a percent reduction pending the final
resolution of [the Chapter 11 cases]."  She explains that the
results that will be achieved serve as an important factor in
determining the success of the efforts of the Applicants.

"However, because these results are still unknown . . . a
percentage reduction is proper at this time," Ms. Adams contends,
citing In re Bank of New England Corp., 134 B.R. 450, 459 (Bankr.
D. Mass. 1991).

                     About Frontier Airlines

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: Restructuring Deal Ratified by CAW Members
----------------------------------------------------------
CAW members working at General Motors in Oshawa, Windsor, St.
Catharines and Woodstock, Ontario have voted overwhelmingly in
favour of a new collective agreement, ratifying the deal by 86 per
cent after a series of meetings were held over the past two days.

CAW President Ken Lewenza said this new deal should provide a
much-needed sense of security to the thousands of active members
and tens of thousands of retirees at General Motors in Canada.

"This has been a grueling restructuring process, and no one has
felt that more than our members and retirees," Lewenza said.
"Although we were forced to make a number of important sacrifices,
the support we received from our members is proof that they
recognize the incredible challenges the industry is facing, but
more importantly that they are prepared to stand by each other and
stand with their union."

Lewenza credited the solidarity and activism of CAW members who
held demonstrations across the province in recent weeks as having
played a critical role in pushing the restructuring talks forward.
The deal includes cost-saving provisions affecting cash
compensation, health benefits, other non-wage benefits, work
practices and productivity improvements as well as a comprehensive
restructuring of the company's pension plan.

CAW Local 222 President and CAW-GM Master Bargaining Committee
Chairperson Chris Buckley said the restructuring deal will help
secure the company's financial footing in Canada and protect
thousands of Canadian jobs in the face of a possible bankruptcy
protection filing.

"This deal has provided us the path on which we can move forward,
to ensure not only our members but all workers impacted by the
auto industry feel a bit more secure at a time of tremendous
economic uncertainty," Buckley said.

The ratification results for each location are:

   -- CAW Local 636, Woodstock
   -- Production: 87 per cent in favour
   -- Skilled Trades: 75 per cent in favour
   -- Combined total: 86.5 per cent in favour
   -- CAW Local 1973, Windsor
   -- Production: 97.2 per cent in favour
   -- Skilled Trades: 96.2 per cent in favour
   -- Combined total: 97 per cent in favour
   -- CAW Local 199, St. Catharines
   -- Production: 86.5 per cent in favour
   -- Skilled Trades: 87 per cent in favour
   -- Combined total: 86.7 per cent in favour
   -- CAW Local 222, Oshawa
   -- Production: 85 per cent in favour
   -- Skilled Trades: 73 per cent in favour
   -- Combined total: 82 per cent in favour
   -- Overall combined total: 86 per cent in favour

                     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.

GM Europe is based in Zurich, Switzerland, while General Motors
Latin America, Africa and Middle East is headquartered in Miramar,
Florida.

As reported by the Troubled Company Reporter, GM reported net loss
of $6.0 billion, including special items, in the first quarter of
2009.  This compares with a reported net loss of $3.3 billion in
the year-ago quarter.  Excluding special items, the Company
reported an adjusted net loss of $5.9 billion in the first quarter
of 2009 compared to an adjusted net loss of $381 million in the
first quarter of 2008.  As of March 31, 2009, GM had $82.2 billion
in total assets and $$172.8 billion in total liabilities,
resulting in $90.5 billion in stockholders' deficit.

On April 27, General Motors presented the U.S. Department of
Treasury with an updated plan as required by the loan agreement
signed by GM and the U.S. Treasury on December 31, 2008.  The plan
addresses the key restructuring targets required by the loan
agreement, including a number of the critical elements of the plan
that was submitted to the U.S. government on December 2, 2008.
Among these are: U.S. market competitiveness; fuel economy and
emissions; competitive labor cost; and restructuring of the
company's unsecured debt.  It also includes a timeline for
repayment of the Federal loans, and an analysis of the Company's
positive net present value.

The plan details the future reduction of GM's vehicle brands and
nameplates in the U.S., further consolidation in its workforce and
dealer network, accelerated capacity actions and enhanced
manufacturing competitiveness, while maintaining GM's strong
commitment to high-quality, fuel-efficient vehicles and advanced
propulsion technologies.

GM also launched a bond exchange offer for roughly $27 billion of
unsecured public debt.  If successful, the bond exchange would
result in the conversion of a large majority of this debt to
equity.

GM is also in talks with the UAW to modify the terms of the
Voluntary Employee Benefit Association, and with the U.S. Treasury
regarding possible conversion of its debt to equity.  The current
bond exchange offer is conditioned on the converting to equity of
at least 50% of GM's outstanding U.S. Treasury debt at June 1,
2009, and at least 50% of GM's future financial obligations to the
new VEBA.  GM expects a debt reduction of at least $20 billion
between the two actions.

In total, the U.S. Treasury debt conversion, VEBA modification and
bond exchange could result in at least $44 billion in debt
reduction.

GM filed with the Securities and Exchange Commission a
registration statement related to its exchange offer.  The filing
incorporates the revised Viability Plan.  A full-text copy of the
filing is available at http://ResearchArchives.com/t/s?3c09

A full-text copy of GM's viability plan presented in February 2009
is available at http://researcharchives.com/t/s?39a4

                      Going Concern Doubt

Deloitte & Touche LLP, has said there is substantial doubt about
GM's ability to continue as a going concern after reviewing GM's
2008 financial report.  Deloitte cited the Company's recurring
losses from operations, stockholders' deficit and failure to
generate sufficient cash flow to meet the Company's obligations
and sustain the its operations.  It said GM's future is dependent
on the Company's ability to execute the Company's Viability Plan
successfully or otherwise address these matters.  If the Company
fails to do so for any reason, the Company would not be able to
continue as a going concern and could potentially be forced to
seek relief through a filing under the U.S. Bankruptcy Code.

Standard & Poor's Ratings Services on April 10 lowered its issue-
level rating on GM's $4.5 billion senior secured revolving credit
facility to 'CCC-' (one notch above the 'CC' corporate credit
rating on the company) from 'CCC'.  It revised the recovery rating
on this facility to '2' from '1', indicating its view that lenders
can expect substantial (70% to 90%) recovery in the event of a
payment default.  The corporate credit rating remains unchanged,
at 'CC', reflecting its view of the likelihood that GM will
default -- through either a bankruptcy or a distressed debt
exchange.

Moody's Investors Service said February 18 that the risk of a
bankruptcy filing by GM and Chrysler remains high.  The last
rating action on GM and Chrysler was a downgrade of their
Corporate Family Ratings to Ca on December 3, 2008.


GENERAL MOTORS: Gov't May Name Preferred Opel Bidder by Wednesday
-----------------------------------------------------------------
Marcus Walker and John D. Stoll at The Wall Street Journal report
that the German government is hoping to name its preferred bidder
for General Motors Corp.'s Adam Opel GmbH by Wednesday night.

According to WSJ, German Chancellor Angela Merkel said on Monday
that decisions were needed by the middle of the week so that Opel
wouldn't be caught up in possible GM insolvency proceedings in the
U.S.

WSJ notes that the revelation of a favored bidder would open the
way for the German government to provide interim financing that
would let Opel continue operating.

WSJ states that several high-ranking German politicians and Opel
labor leaders expressed their support for the firm, making that
company the front-runner in the the bidding for Opel's assets.
According to WSJ, Magna International is bidding jointly with OAO
Sberbank.  It is proposing to acquire Opel, its British sister
company Vauxhall, and Chevrolet assets in Russia, says WSJ.  Magna
International, WSJ relates, also wants to form a car-production
alliance with Russian car maker OAO GAZ.

Fiat SpA, WSJ notes, has drawn skepticism from Opel workers and
some German politicians, even though Fiat already scaled down its
job-cutting plans.

According to WSJ, the outlook for a third bidder, RHJ
International SA, dimmed when the chancellor's spokesperson,
Ulrich Wilhelm, said that the company's proposals weren't as
detailed as Magna's or Fiat's.  RHJ has met with German officials,
but not with the chancellor, WSJ says, citing Mr. Wilhelm.

          Opel Is Better Off Bankrupt, Minister Says

The Local reports that German Economy Minister Karl-Theodor zu
Guttenberg said that all three bids for Opel have shortcomings.
He suggested that it might be better if Opel filed for bankruptcy,
The Local states, citing Minister Guttenberg.

According to The Local, Minister Guttenberg said that he wasn't
convinced that the three bidders would ensure that bridge loans
provided by the German government wouldn't be wasted.  The repot
quoted Minister Guttenberg as saying, "We must first have a high
degree of certainty that the significant tax money we will have to
provide is not lost.  From my point of view, none of the three
offers so far provides this certainty in a sufficient way....  If
these deficits were to remain, an orderly insolvency would clearly
be the better solution -- it also could open opportunities for the
future of Opel."

                     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.

GM Europe is based in Zurich, Switzerland, while General Motors
Latin America, Africa and Middle East is headquartered in Miramar,
Florida.

As reported by the Troubled Company Reporter, GM reported net loss
of $6.0 billion, including special items, in the first quarter of
2009.  This compares with a reported net loss of $3.3 billion in
the year-ago quarter.  Excluding special items, the Company
reported an adjusted net loss of $5.9 billion in the first quarter
of 2009 compared to an adjusted net loss of $381 million in the
first quarter of 2008.  As of March 31, 2009, GM had $82.2 billion
in total assets and $$172.8 billion in total liabilities,
resulting in $90.5 billion in stockholders' deficit.

On April 27, General Motors presented the U.S. Department of
Treasury with an updated plan as required by the loan agreement
signed by GM and the U.S. Treasury on December 31, 2008.  The plan
addresses the key restructuring targets required by the loan
agreement, including a number of the critical elements of the plan
that was submitted to the U.S. government on December 2, 2008.
Among these are: U.S. market competitiveness; fuel economy and
emissions; competitive labor cost; and restructuring of the
company's unsecured debt.  It also includes a timeline for
repayment of the Federal loans, and an analysis of the Company's
positive net present value.

The plan details the future reduction of GM's vehicle brands and
nameplates in the U.S., further consolidation in its workforce and
dealer network, accelerated capacity actions and enhanced
manufacturing competitiveness, while maintaining GM's strong
commitment to high-quality, fuel-efficient vehicles and advanced
propulsion technologies.

GM also launched a bond exchange offer for roughly $27 billion of
unsecured public debt.  If successful, the bond exchange would
result in the conversion of a large majority of this debt to
equity.

GM is also in talks with the UAW to modify the terms of the
Voluntary Employee Benefit Association, and with the U.S. Treasury
regarding possible conversion of its debt to equity.  The current
bond exchange offer is conditioned on the converting to equity of
at least 50% of GM's outstanding U.S. Treasury debt at June 1,
2009, and at least 50% of GM's future financial obligations to the
new VEBA.  GM expects a debt reduction of at least $20 billion
between the two actions.

In total, the U.S. Treasury debt conversion, VEBA modification and
bond exchange could result in at least $44 billion in debt
reduction.

GM filed with the Securities and Exchange Commission a
registration statement related to its exchange offer.  The filing
incorporates the revised Viability Plan.  A full-text copy of the
filing is available at http://ResearchArchives.com/t/s?3c09

A full-text copy of GM's viability plan presented in February 2009
is available at http://researcharchives.com/t/s?39a4

                      Going Concern Doubt

Deloitte & Touche LLP, has said there is substantial doubt about
GM's ability to continue as a going concern after reviewing GM's
2008 financial report.  Deloitte cited the Company's recurring
losses from operations, stockholders' deficit and failure to
generate sufficient cash flow to meet the Company's obligations
and sustain the its operations.  It said GM's future is dependent
on the Company's ability to execute the Company's Viability Plan
successfully or otherwise address these matters.  If the Company
fails to do so for any reason, the Company would not be able to
continue as a going concern and could potentially be forced to
seek relief through a filing under the U.S. Bankruptcy Code.

Standard & Poor's Ratings Services on April 10 lowered its issue-
level rating on GM's $4.5 billion senior secured revolving credit
facility to 'CCC-' (one notch above the 'CC' corporate credit
rating on the company) from 'CCC'.  It revised the recovery rating
on this facility to '2' from '1', indicating its view that lenders
can expect substantial (70% to 90%) recovery in the event of a
payment default.  The corporate credit rating remains unchanged,
at 'CC', reflecting its view of the likelihood that GM will
default -- through either a bankruptcy or a distressed debt
exchange.

Moody's Investors Service said February 18 that the risk of a
bankruptcy filing by GM and Chrysler remains high.  The last
rating action on GM and Chrysler was a downgrade of their
Corporate Family Ratings to Ca on December 3, 2008.


GENERAL MOTORS: Magna Int'l Submits EUR700 Million Offer for Opel
-----------------------------------------------------------------
Magna International Inc. confirmed that, together with Sberbank
Rossii, it has submitted a non-binding indicative offer for Opel.
The offer contemplates a total investment by Magna and Sberbank of
Euro 700 million, a portion of which would be guaranteed by the
German government.  Under the offer, the proposed equity interests
in Opel would be: General Motors -- 35%; Sberbank -- 35%; Magna --
20%; and Opel employees -- 10%.

General Motors and the German government are reviewing and
considering offers submitted this week and will determine the next
steps in the sale process.

There is no assurance that any transaction will result from
Magna's current involvement.

                    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.

GM Europe is based in Zurich, Switzerland, while General Motors
Latin America, Africa and Middle East is headquartered in Miramar,
Florida.

As reported in the Troubled Company Reporter on November 10, 2008,
General Motors Corporation's balance sheet at September 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.

General Motors Corp. admitted in its viability plan submitted to
the U.S. Treasury on February 17 that it considered bankruptcy
scenarios, but ruled out the idea, citing that a Chapter 11 filing
would result to plummeting sales, more loans required from the
U.S. government, and the collapse of dealers and suppliers.

A copy of GM's viability plan is available at:

              http://researcharchives.com/t/s?39a4

The U.S. Treasury and U.S. President Barack Obama's automotive
task force are currently reviewing the Plan, which requires an
additional $16.6 billion on top of $13.4 billion already loaned by
the government to GM.

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
November 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,
Dominion Bond Rating Service 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.


GENESIS WORLDWIDE: Closes Private Placement of C$1.500 Million
--------------------------------------------------------------
Genesis Worldwide Inc. has closed its previously announced private
placement of C$1,500,000 principal amount of secured convertible
debentures.

The proceeds of the private placement will be used for working
capital purposes. The Debentures were issued to Codding
Enterprises, L.P., as to $1,200,000 Cdn. principal amount, Bradley
Baker as to $50,000 Cdn. principal amount, Codding Baker
Investments Inc. as to $25,000 Cdn. principal amount, the
Constance L. Codding Trust as to $25,000 principal amount, the
Baker Family Trust as to $25,000 Cdn. principal amount and an
arm's length party as to $175,000 Cdn. principal amount.

The Debentures will mature on November 22, 2010, bear simple
interest at the rate of 10% per annum (payable on the earlier of
conversion or maturity) and be convertible, at any time, at the
option of the holders into an aggregate of 6,198,347 common shares
of the Corporation at a conversion price of $0.242 Cdn. per share,
subject to standard anti-dilution provisions.  The common shares
of the Corporation issuable upon the conversion of the Debentures
will represent approximately 20.01% of the 30,982,858 currently
issued and outstanding common shares of the Corporation on a non-
diluted basis.

Each Debenture is secured by a general security interest in all of
the assets of Genesis which ranks subsequent to the security
interest previously granted by Genesis to its secured lender and
pari passu with the security interest securing the $1,534,742 Cdn.
principal amount secured convertible debenture (the "Original
Debenture") of the Corporation currently held by Codding and the
security interests securing the other Debentures.  The Debentures
will automatically convert into common shares of the Corporation
at a conversion price of $0.242 Cdn. per share, subject to
standard anti-dilution provisions, if the Corporation completes an
equity financing or financings raising aggregate gross proceeds of
$1,500,000 Cdn. or greater.

In addition to the Original Debenture, which is currently
convertible into 6,341,909 common shares of the Corporation,
Codding is also the registered and beneficial holder of 1,051,400
common shares in the capital of the Corporation.  Prior to the
private placement, assuming only the conversion of the Original
Debenture, Codding held an aggregate of 7,393,309 common shares of
the Corporation representing approximately 19.81% of the issued
and outstanding common shares of the Corporation.  As a result of
the issuance to Codding of $1,200,000 Cdn. principal amount of the
Debentures, on a partially-diluted basis, assuming only the
conversion of the Original Debenture and all of the Debentures,
Codding holds 12,351,987 common shares of Genesis, representing
approximately 28.38% of the issued and outstanding shares of
Genesis.

Codding currently has two representatives on the board of
directors of the Corporation, being Bradley E. Baker and Richard
E. Pope.

Bradley E. Baker, the CEO of Codding and a director of Genesis,
exercises control or direction over the securities of Genesis held
by Codding, and also exercises control or direction over the
securities of Genesis owned by Codding Baker Investments Inc., the
Constance L. Codding Trust and the Baker Family Trust.  As a
result, on a partially-diluted basis, assuming only the conversion
of the Original Debenture and all of the Debentures, Bradley E.
Baker exercises control or direction over an additional 516,528
common shares of Genesis, representing approximately 1.20% of the
issued and outstanding shares of Genesis.

Due to the fact that Bradley E. Baker, Codding, and certain other
entities, the securities owned by which are subject to the control
and direction of Bradley E. Baker, the private placement was a
"related party transaction" for the purposes of Multilateral
Instrument 61-101 - Protection of Minority Security Holders in
Special Transactions.  The Corporation relied on the exemptions
from the valuation and minority approval requirements of MI 61-101
contained in paragraph (a) of Section 5.5 and paragraph (a) of
Section 5.7, respectively, of MI 61-101 as neither the fair market
value of the subject matter of, nor the fair market value of the
consideration for, the private placement exceeded 25% of the
Corporation's market capitalization.

The closing occurred on May 22, 2009, as the Corporation requires
the working capital that will be provided by the proceeds of the
private placement.

                    About Genesis Worldwide

Headquartered in Callery, Pennsylvania, Genesis Worldwide II, Inc.
-- http://www.gen-world.com/-- designs, engineers and
manufactures high-quality metal coil processing equipment through
its Herr-Voss Stamco(R) business unit.  The company also provides
mill roll reconditioning, texturing and grinding services in
addition to its rebuild, repair and spare parts business.  Genesis
II operates seven manufacturing facilities located in
Pennsylvania, Ohio, Indiana and California.

Headquartered in Dayton, Ohio, Genesis Worldwide Inc. (TSX/AIM:
GWI) -- http://www.genesisworldwide.com/-- fka The Monarch
Machine Tool Company, engineers and manufactures high quality
metal coil processing and roll coating and electrostatic oiling
equipment.  Genesis Worldwide and its debtor-affiliates filed for
chapter 11 protection on Sept. 17, 2001 (Bankr. S.D. Ohio Case No.
01-36605).  Nick V. Cavalieri, Esq., at Bailey Cavalieri LLC,
represents the Debtors in their chapter 11 proceedings.  Daniel M
Anderson, Esq., at Schottenstein Zox & Dunn represents the
Official Committee of Unsecured Creditors.  As of June 30, 2001,
the Debtors reported assets totaling $122,766,000 and debts
totaling $121,999,000.

At June 30, 2007, Genesis WorldWide Inc. balance sheet total
assets of $15,994,774 and total liabilities of $19054,251
resulting to a $3,059,477 total shareholders' deficit.


GEORGIA GULF: Moody's Downgrades Default Rating to 'Caa3/LD'
------------------------------------------------------------
Moody's Investors Service lowered Georgia Gulf Corporation's
Probability of Default Rating from Caa3 to Caa3/LD reflecting the
deemed limited default due to the non-payment of interest on its
9.5% Guaranteed Sr. Unsecured Notes due 2014 and the 10.75% Sr.
Subordinated Notes due 2016.  Georgia Gulf is currently operating
under a forbearance agreement with these noteholders and this debt
is subject to an exchange offer.

Moody's also affirmed GGC's Corporate Family Rating of Caa2, the
B3 ratings on its senior secured first lien debt and the C ratings
on its unsecured and subordinated notes. The outlook remains
negative.

On March 31, 2009, Georgia Gulf commenced a private exchange
offer.  This offer, which Moody's has deemed to be a distressed
exchange, could exchange up to $800 million of the company's
senior unsecured and subordinated notes (all of the notes
outstanding) for $250 million of second lien notes.  On April 14,
2009, the company announced it would withhold $34 million interest
payments on the 2014 and 2016 notes.  The indentures for these
notes allowed for a 30-day grace period prior to issuing a notice
of default and accelerating the debt.  GGC also amended it secured
facilities to permit it to withhold this interest payment.  On May
13, 2009, GGC announced that it had entered into forbearance
agreements with all senior unsecured and subordinated noteholders
that would delay the acceleration of any notes prior to June 15,
2009.

Coincident with the forbearance agreements, GGC extended the early
participation deadline and the expiration date of their exchange
offers to June 1, 2009 (noteholders who tendered by the early
participation deadline would also get a proportionate share of 6.9
million shares of common stock).  These exchange offers are
subject to certain conditions, which GGC may waive, including the
condition that it receives tenders and consents for at least 95%
of each of the outstanding unsecured and subordinated note issues.
Moody's notes that Georgia Gulf only needs tenders and consents
for 50.1% of each issue to modify their respective covenants.

If GGC has not reached agreement with noteholders on the terms of
the tender offer before June 15, 2009, noteholders could
accelerate their indebtedness and this would constitute a cross
default under GGC's other note issue and senior secured credit
facility, permitting all debt holders to accelerate their
indebtedness.  In the event of an acceleration, GGC would be
required to immediately explore alternatives including a potential
reorganization or restructuring under bankruptcy laws.

A successful completion of the tender offer on the current terms
could potentially have a positive impact on GGC's CFR as credit
metrics would improve significantly (pro forma 2008 Net
Debt/EBITDA would decline to 5.2x from 7.7x; these metrics
incorporate Moody's Standard Analytical Adjustments).  However,
the terms of this exchange offer are subject to modification and
there is significant uncertainty over GGC's ability to obtain
tenders and consents for 95% of each issue (only 3% of the notes
have been tendered).

Ratings lowered:

Georgia Gulf Corporation

  -- Probability of Default Rating to Caa3/LD from Caa3

Ratings affirmed:

Georgia Gulf Corporation

  -- Corporate Family Rating at Caa2
  -- Guaranteed Senior Secured Revolving Credit Facility at B3
  -- Guaranteed Senior Secured Term Loan at B3
  -- Guaranteed Senior Unsecured Notes at C
  -- Guaranteed Senior Subordinated Notes at C

The last rating action on Georgia Gulf Corporation was on April 1,
2009 when Moody's downgraded the ratings of Georgia Gulf's senior
unsecured notes of and its subordinated notes to C (from Caa3 and
Ca, respectively) following the announcement of an exchange offer
by the company.

Georgia Gulf Corporation, headquartered in Atlanta, Georgia, is a
producer of commodity chemicals including chlorovinyls (chlorine,
caustic soda, vinyl chloride monomer, polyvinyl chloride resins
and vinyl compounds), PVC fabricated products (pipe, siding,
window profiles, plastic lumber, etc.), and aromatics (cumene,
phenol and acetone).


GHOST TOWN: May Obtain DIP Financing of Up To $500,000
------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of North
Carolina has granted Ghost Town Partners, LLC, permission to
obtain secured postpetition financing of up to $500,000 from
Resurrection Partners, LLC.  The DIP Lenders' secured position
will be subject to and junior to the first lien of Branch Banking
& Trust Company.

The financing is being made in anticipation of the park's special
mechanical needs in time for the opening in May 2009.  The park
will require expenditures significantly in excess of $100,000.

Based in Waynesville, North Carolina, Ghost Town Partners, LLC,
operates an amusement park.  The Debtor filed for Chapter 11
protection on March 11, 2009 (Bankr. W. D. N.C. Case No. 09-
10271).  David G. Gray, Esq., at Westall, Gray, Connolly & Davis,
P.A., and William E. Cannon, Jr., at Brown, Ward & Haynes P.A.,
represent the Debtor in its restructuring efforts.  In its
bankruptcy petition, the Debtor listed total assets of $13,035,300
and total debts of $12,305,672.


GLOBAL GROUP: Has Until May 29 to File Schedules and Statements
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
extended until May 29, 2009, Global Group, Inc., time to file its
schedules of assets and liabilities, schedules of current income
and expenditures, schedules of executory contracts and unexpired
leases, statements of financial affairs, and lists of the Debtor's
equity security holders.

The Debtor related that the extension is in the best interest of
the estate, creditors and parties in interest.

Fort Worth, Texas-based Global Group, Inc., filed for Chapter 11
protection on May 4, 2009 (Bankr. N. D. Tex. Case No. 09-42719).
Jeff P. Prostok, Esq., at Forshey & Prostok, LLP represents the
Debtor in its restructuring efforts.  The Debtor's assets and
debts both range from $10 million to $50 million.


GLOBAL GROUP: Proposes Forshey & Prostok as Bankruptcy Counsel
--------------------------------------------------------------
Global Group, Inc., asks the U.S. Bankruptcy Court for the
Northern District of Texas for authority to employ Forshey &
Prostok, LLP, as counsel.

F&P will, among other things:

   a) advise the Debtor of its rights, powers and duties as debtor
      and debtor-in-possession;

   b) advise the Debtor concerning, and assist in the negotiation
      and documentation of, agreements, debt restructurings and
      related transactions; and

   c) review the nature and validity of liens asserted against the
      property of the Debtor and advise the Debtor concerning the
      enforceability of the liens.

Jeff P. Prostok tells the Court that the hourly rates of F&P
personnel are:

     Partners                          $475
     Associates                    $225 - $350
     Of Counsel                    $195 - $375
     Paralegals                    $125 - $175

Pre-bankruptcy, F&P received a $91,758 general retainer for
prepetition services and costs.  F&P has not received any other
payment for professional services rendered or expenses incurred on
behalf of the Debtor.

Mr. Prostok assures the Court that F&P is a "disinterested person"
as that term is defined in Section 101(14) of the Bankruptcy Code.

Mr. Prostok can be reached at:

     Forshey & Prostok, LLP
     777 Main St., Suite 1290
     Ft. Worth, TX 76102
     Tel: (817) 877-8855

                     About Global Group, Inc.

Fort Worth, Texas-based Global Group, Inc., filed for Chapter 11
protection on May 4, 2009 (Bankr. N. D. Tex. Case No. 09-42719).
Jeff P. Prostok, Esq., at Forshey & Prostok, LLP, represents the
Debtor in its restructuring efforts.  The Debtor's assets and
debts both range from $10 million to $50 million.


GLOBAL GROUP: Wants Access to Prepetition Lender's Cash Collateral
------------------------------------------------------------------
Global Group, Inc., asks the U.S. Bankruptcy Court for the
Northern District of Texas for authority to:

   -- access the cash collateral in which the prepetition lender
      assets a security interest; and

   -- grant adequate protection.

The Debtor has unpaid obligations to Bank of Texas, N.A., pursuant
to four promissory notes:

   a) $1 million pursuant to that promissory note dated April 17,
      2002;

   b) $3.5 million pursuant to that promissory note dated
      September 2, 2004;

   c) $1.2 million pursuant to that promissory note dated
      September 30, 2004; and

   d) $2.5 million pursuant to that promissory note dated
      March 15, 2005.

The loans are secured by the Debtor's inventory, accounts and
proceeds from the same.  The Debtor was indebted $4.3 million to
the prepetition lender as of the petition date.

The Debtor assets that the interest of the prepetition lender is
adequately protected.  In the course of its operations, the Debtor
is selling its inventory, collecting prepetition accounts
receivable and using the proceeds of the same to acquire new
inventory, perform new services and pay operating expenses.

                     About Global Group, Inc.

Fort Worth, Texas-based Global Group, Inc., filed for Chapter 11
protection on May 4, 2009 (Bankr. N. D. Tex. Case No. 09-42719).
Jeff P. Prostok, Esq., at Forshey & Prostok, LLP represents the
Debtor in its restructuring efforts.  The Debtor's assets and
debts both range from $10 million to $50 million.


GLOBAL GROUP: Wants to Hire Decker Jones as Corporate Counsel
-------------------------------------------------------------
Global Group, Inc., asks the U.S. Bankruptcy Court for the
Northern District of Texas for authority to employ Decker, Jones,
Mcmackin, McClane, Hall & Bates, P.C., as corporate counsel.

Decker Jones will, among other things:

   a) advise the Debtor in connection with various corporate
      governance considerations;

   b) advise the Debtor regarding employee benefit plans and
      matters related thereto; and

   c) advise or represent the Debtor on all matters and
      undertakings with respect to which Decker Jones may be
      requested to either undertake or advise the Debtor.

The hourly rates of Decker Jones personnel are:

     Shareholders                  $250 - $350
     Associates                    $150 - $285
     Paralegals                     $85 - $125

Pre-bankruptcy, Decker Jones performed certain legal services for
the Debtor and has been paid in full for the services except for
$630 which remains unpaid.  Decker Jones agrees to waive the
prepetition claim owed by the Debtor.  All funds paid to Decker
Jones prepetition were applied to prepetition legal fees.

To the best of the Debtor's knowledge, Decker Jones is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.

The firm can be reached at:

     Decker, Jones, Mcmackin, McClane, Hall & Bates, P.C.
     Burnett Plaza
     801 Cherry Street, Suite 2000, Unit No. 46
     Fort Worth, TX 76102-6836
     Tel: (817) 336-2400
          (817) 429-5260
     Fax: (817)332-3043

                     About Global Group, Inc.

Fort Worth, Texas-based Global Group, Inc., filed for Chapter 11
protection on May 4, 2009 (Bankr. N. D. Tex. Case No. 09-42719).
Jeff P. Prostok, Esq., at Forshey & Prostok, LLP represents the
Debtor in its restructuring efforts.  The Debtor's assets and
debts both range from $10 million to $50 million.


GUROSA CORPORATION: Court Prohibits Use of Compass Cash Collateral
------------------------------------------------------------------
Hon. Richard S. Schmidt of the U.S. Bankruptcy Court for the
Southern District of Texas prohibited Gurosa Corporation to use
its lenders' cash collateral.

The Court granted the motion of Compass Bank, as successor by
merger to Texas State Bank, to prohibit the Debtor's use of cash
collateral derived from property subject to bank's deed of trust.

The Court also ordered the Debtor to provide Compass Bank:

   -- a detailed written accounting of all unauthorized
      postpetition use of the cash collateral; and

   -- a copy of all notes, leases and contracts pertaining to the
      real property.

Compass Bank, as successor by merger to Texas State Bank, is the
owner and holder of a certain real estate promissory note dates
June 25, 2001, in the original amount of $170,000.

As of Gurusa Corporation's petition date, the total payoff due on
the note is $109,759 plus costs of collection and interests which
continue to accrue.

As security for the payment of note, the Debtor granted a lien in
2 tracts of improved real property as evidenced by a deed of trust
executed on June 29, 2001.

The Debtor was also ordered to segregate and deposit in debtor-in-
possession bank account at Compass Bank all cash collateral
received from real property, including but not limited to monies
received from Zandra Fernandez, tenants and insurance companies
pursuant to any and all leases and contract with real property,
and will provide the counsel of Compass every 15th of month
commencing June 15, 2009, a monthly accounting of the cash
collateral received and a copy of the monthly bank statement for
the DIP Cash Collateral account.

                      About Gurosa Corporation

Brownsville, Texas-based Gurosa Corporation filed for Chapter 11
on May 4, 2009 (Bankr. S.D. Tex. Case No. 09-10261).  Soliz Law
Firm PLLC represents the Debtor in its restructuring efforts.  The
Debtor listed $100 million to $500 million in assets and $100,000
to $500,000 in debts.


HALO TECHNOLOGY: U.S. Trustee Wants Cases Converted to Chapter 7
----------------------------------------------------------------
Diana G. Adams, the United States Trustee for Region 2, asks the
U.S. Bankruptcy Court for the District of Connecticut to convert
the Chapter 11 cases of Halo Technology Holdings, Inc., et al., to
cases under Chapter 7 of the Bankruptcy Code, or in the
alternative, dismiss the Debtors' bankruptcy cases, for failure to
file any monthly operating reports during the pendency of their
respective Chapter 11 cases and for failure to pay the quarterly
fees pursuant to Sec. 1930(a)(6) of the U.S. Code.

Greenwich, Connecticut-based Halo Technology Holdings, Inc. fka
Warp Technology Holdings Inc. -- http://www.haloholdings.com/--
is a holding company whose subsidiaries operate enterprise
software and information technology businesses.  The company and
its affiliates filed for chapter 11 protection on Aug. 20, 2007
(Bankr. D. Conn. Lead Case No. 07-50480).  David Wallman, Esq., at
The Wallman Law Firm, LLC; lawyers at Zeisler & Zeisler P.C.; and
Jeffrey R. Gleit, Esq., at Kasowitz Benson Torres & Friedman, LLP,
serve as the Debtors' counsel.  James C. Graham, Esq., Kristin B.
Mayhew, Esq., at Pepe & Hazard; and Patrick M. Birney, Esq., at
Robinson & Cole LLP, represent the pfficial committee of unsecured
creditors as counsel.  At March 31, 2007, the company reported
total assets of $47,344,373 and total liabilities of $45,494,297.


HARTMAX CORP: Enters Stalking Horse Deal with Emirisque
-------------------------------------------------------
Hartmarx Corporation has entered into a "stalking horse" asset
purchase agreement with Emerisque Brands U.K. Limited and SKNL
North America, B.V. for substantially all assets of Hartmarx.

Hartmarx said it filed motions late Thursday with the Bankruptcy
Court for the Northern District of Illinois to conduct what is
known as a 363 sale of assets, which allows for an expedited sale
process with the aim of preserving maximum value for all
stakeholders. Under the terms of the agreement, which is subject
to court approval and certain other closing conditions, the buyer
will acquire substantially all of the assets for $70.5 million in
cash and a Junior Secured Note with a face value of $15.0 million,
subject to adjustment as of the closing date for changes in the
company's borrowing base. The buyer has also agreed to assume
certain liabilities of Hartmarx estimated to total approximately
$33.5 million.

Homi B. Patel, chairman and chief executive officer of Hartmarx
Corporation, commented, "We are very pleased to have taken this
first yet very important step in resolving the future of Hartmarx
as a continuing enterprise.  In this challenging economic
environment, at the present time the Emerisque offer is the best
and highest offer we have received and sets a base-line for a
transaction to be completed consistent with our DIP financing
agreement.  However, we will need continuing lender and other
stakeholder support to meet the significant challenges of closing
this or any alternative transaction."

"We are extremely grateful to all our stakeholders, in particular,
our loyal retail customers who have gone out of their way to place
orders with us in this difficult period, our suppliers who have
continued to work with us, and most importantly, our almost 3,000
employees, both union and non-union who continue to be the
backbone of this company through thick and thin.  We hope that the
new owners, whoever they may ultimately be, understand that in
addition to our 120-year history and time-honored brands, our
customers, suppliers and employees are assets that you don't see
on our balance sheet," Mr. Patel concluded.

Michael Buenzow, senior managing director at FTI Consulting, Inc.,
and Hartmarx's chief restructuring officer, stated, "This is a key
step in a process designed to enhance the value of the Hartmarx
estates.  Hartmarx and its advisors will continue to work with all
potential bidders to maximize value for the benefit of all
stakeholders."

Moelis & Company LLC and FTI Consulting, Inc., are the Company's
financial advisors.  Skadden, Arps, Slate, Meagher & Flom, LLP,
are the company's legal advisors.

On January 23, 2009, Hartmarx Corporation and 50 of its wholly-
owned U.S. subsidiaries filed voluntary petitions for protection
under chapter 11 of the United States Bankruptcy Code.  Prior to
court approval of the Agreement, there will be a competitive
bidding process which is intended to achieve the highest possible
value for the Company's stakeholders.  Once the bidding procedures
have been approved by the court, the Company will announce the
initiation of the formal bidding process.  The bidding procedures,
if approved, call for qualified interested parties to submit
binding offers to acquire all or some of Hartmarx's assets within
approximately four weeks of court approval of the bidding
procedures.  Assuming qualified bids are submitted, an auction
would be held and then followed by a court hearing to approve the
sale to the winning bidder or bidders.

                     About Hartmax Corp

Hartmarx's Chapter 11 case in the United States Bankruptcy Court
for the Northern District of Illinois, Eastern Division, has been
assigned the number 09-02046, the Honorable Judge Black presiding.
Based in Chicago, Illinois, Hartmarx Corporation (HTMXQ) --
http://www.hartmarx.com/-- produces and markets business, casual
and golf apparel under its own brands, including Hart Schaffner
Marx, Hickey-Freeman, Palm Beach, Coppley, Monarchy, Manchester
Escapes, Society Brand, Racquet Club, Naturalife, Pusser's of the
West Indies, Brannoch, Sansabelt, Exclusively Misook, Barrie Pace,
Eye, Christopher Blue, Worn, One Girl Who . . . and b.chyll.  In
addition, the company has certain exclusive rights under licensing
agreements to market selected products under a number of premier
brands such as Austin Reed, Burberry men's tailored clothing, Ted
Baker, Bobby Jones, Jack Nicklaus, Claiborne, Pierre Cardin, Lyle
& Scott, Golden Bear, Jag and Dr. Martens.  The Company's broad
range of distribution channels includes fine specialty and leading
department stores, value-oriented retailers and direct mail
catalogs.

Hartmarx and certain affiliates filed for bankruptcy protection on
January 23, 2009 (Bankr. N.D. Ill. Lead Case No. 09-02046). George
N. Panagakis, Esq., Felicia Gerber Perlman, Esq., and Eric J.
Howe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent
the Debtors in their restructuring efforts.  When the Debtors
filed for bankruptcy, they listed $483,108,000 in total assets and
$261,220,000 in total debts as of August 31, 2008.


HERBST GAMING: Court Approves Goldman Sachs as Financial Advisor
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Nevada authorized
Herbst Gaming Inc. and its debtor-affiliates to employ Goldman,
Sachs & Co. as financial advisor.

Goldman Sachs is expected to, among other things:

   a) assist the Debtors in seeking confirmation and consummation
      of the prearranged Plan;

   b) review and analyze the Debtors' business Plan and financial
      projections; and

   c) advise the Debtors regarding their capital structure and
      debt capacity.

Goldman Sachs' compensation structure includes:

   a) an advisory fee of no less that $4,500,000, payable on the
      effective date of any Plan of Reorganization, in cash, by
      wire transfer of immediately available funds;

   b) reimbursement of expenses; and

   c) indemnification, contribution and related obligations of the
      indemnity provisions.

Pre-bankruptcy, Goldman Sachs received $9,500,000 in fee for
prepetition services and expenses.

To the best of the Debtors' knowledge, Goldman Sachs is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.

                     About Herbst Gaming Inc.

Headquartered in Reno, Nevada, Herbst Gaming Inc. --
http://www.herbstgaming.com/-- is an established casino and slot
route operator that operates casinos located in Nevada, Missouri
and Iowa.  The Debtors own and operate approximately 6,800 slot
machines in its slot route business and is a slot machine operator
in Nevada.  The Company and 17 of its affiliates filed for Chapter
11 protection on March 22, 2009 (Bankr. D. Nev. Lead Case No. 09-
50752).  Thomas H. Fell, Esq., Gordon Silver, represents the
Debtors in their restructuring efforts.  As of September 30, 2008,
the Debtors have $1,021,956,000 in total assets and $1,241,937,000
in total debts.


HERBST GAMING: Court OKs Brown Rudnick as Committee's Co-Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Nevada authorized
the Official Committee of Unsecured Creditors in Herbst Gaming
Inc. and its debtor-affiliates' Chapter 11 cases to employ Brown
Rudnick LLP As co-counsel.

Brown Rudnick is expected to:

   a. assist and advise the Committee in its discussions with
      the Debtors and other parties-in-interest regarding the
      overall administration of these cases;

   b. represent the Committee at hearings to be held before this
      Court and communicate with the Committee regarding the
      matters heard and the issues raised well as the decisions
      and considerations of this Court;

   c. assist and advise the Committee in its examination and
      analysis of the conduct of the Debtors' affairs;

   d. review and analyze pleadings, orders, schedules, and other
      documents filed and to be filed with this Court by
      interested parties in these cases, advise the Committee as
      to the necessity, propriety, and impact of the foregoing
      upon these cases and consent or object to pleadings or
      orders on behalf of the Committee, as appropriate;

   e. assist the Committee in preparing applications, motions,
      memoranda, proposed orders, and other pleadings as may be
      required in support of positions taken by the Committee,
      including all trial preparation as may be necessary;

   f. confer with the professionals retained by the Debtors and
      other parties-in-interest, well as with other professionals
      as may be selected and employed by the Committee;

   g. coordinate the receipt and dissemination of information
      prepared by and received from the Debtors' professionals,
      well as information as may be received from professionals
      engaged by the Committee or other parties-in-interest in
      these cases;

   h. participate in examinations of the Debtors and other
      witnesses as may be necessary in order to analyze and
      determine, among other things, the Debtors' assets and
      financial condition, whether the Debtors have made any
      available transfers of property, or whether causes of action
      exist on behalf of the Debtors' estates; and

   i. negotiate and formulate a Plan of Reorganization for the
      Debtors; and assist the Committee generally in performing
      other services as may be desirable or required for a
      discharge of the Committee's duties.

The hourly rates of Brown Rudnick personnel are:

     Edward S. Weisfelner, Esq., member          $950
     Steven D. Pohl, Esq., member                $780
     Partners                                $515 - $950
     Associates                              $325 - $605
     Paraprofessionals                       $100 - $295

Mr. Weisfelner assured the Court that Brown Rudnick is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.

Mr. Weisfelner can be reached at:

     Brown Rudnick LLP
     Seven Times Square
     New York, NY 10036
     Tel: (212) 209-4800

                     About Herbst Gaming Inc.

Headquartered in Reno, Nevada, Herbst Gaming Inc. --
http://www.herbstgaming.com/-- is an established casino and slot
route operator that operates casinos located in Nevada, Missouri
and Iowa.  The Debtors own and operate approximately 6,800 slot
machines in its slot route business and is a slot machine operator
in Nevada.  The Company and 17 of its affiliates filed for Chapter
11 protection on March 22, 2009 (Bankr. D. Nev. Lead Case No. 09-
50752).  Thomas H. Fell, Esq., Gordon Silver, represents the
Debtors in their restructuring efforts.  As of September 30, 2008,
the Debtors have $1,021,956,000 in total assets and $1,241,937,000
in total debts.


HERBST GAMING: Court OKs XRoads Solutions as Restructuring Advisor
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Nevada authorized
Herbst Gaming Inc. and its debtor-affiliates to employ XRoads
Solutions Group, LLC, as financial and restructuring advisor.

XRoads is expected to, among other things,:

   a) work with management to refine and update the Debtors'
      financial projections from time to time and analyze the
      Debtors' cash flow generating capacity under various
      operating/strategic scenarios;

   b) assist the management with refining and modifying the
      business plans for the Debtors' operating units; and

   c) facilitate due diligence when and if performed by potential
      third party investors, the Debtors' bank group and the
      Debtors' bondholders and interfacing with the principals and
      advisors for the parties.

XRoads will cooperate with the Debtors and their general
bankruptcy counsel, Gordon Silver, to avoid duplication of
efforts.

Pre-bankruptcy, XRoads received $2,148,352 for advisory services.
XRoads is currently holding a $168,214 retainer.

To the best of the Debtors' knowledge, XRoads is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.

                     About Herbst Gaming Inc.

Headquartered in Reno, Nevada, Herbst Gaming Inc. --
http://www.herbstgaming.com/-- is an established casino and slot
route operator that operates casinos located in Nevada, Missouri
and Iowa.  The Debtors own and operate approximately 6,800 slot
machines in its slot route business and is a slot machine operator
in Nevada.  The Company and 17 of its affiliates filed for Chapter
11 protection on March 22, 2009 (Bankr. D. Nev. Lead Case No. 09-
50752).  Thomas H. Fell, Esq., Gordon Silver, represents the
Debtors in their restructuring efforts.  As of September 30, 2008,
the Debtors have $1,021,956,000 in total assets and $1,241,937,000
in total debts.


HERBST GAMING: Creditors Committee Can Hire S&MLF as Counsel
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Nevada authorized
the Official Committee of Unsecured Creditors in Herbst Gaming
Inc. and its debtor-affiliates' Chapter 11 cases to employ
Schwartzer & McPherson Law Firm as counsel to the committee.

S&MLF is expected to:

   i) advise the committee of its rights and obligations and
      performance of its duties during administration of the
      bankruptcy cases;

  ii) represent the committee in all proceedings before the Court
      or other courts of jurisdiction over the Chapter 11 cases;

iii) assist the committee in developing legal positions and
      strategies with respect to all facets of the proceedings;
      and

  iv) provide other counsel and advise as the committee may
      require in connection with the proceeding.

The hourly rates of S&MLF personnel are:

     Lenard Schwartzer                    $475
     Jeannette E. McPherson               $425
     Jason A. Imes                        $275
     Lia Allen, paralegal                 $150
     Angela Hosey, legal assistant        $125
     Laura Kern, legal assistant          $125

S&MLF related that the firm did not request for a retainer.

Ms. McPherson assures that S&MLF is a "disinterested person" as
that term is defined in Section 101(14) of the Bankruptcy Code.

Ms. McPherson can be reached at:

     Schwartzer & McPherson Law Firm
     2850 South Jones Boulevard, Suite 1

     Las Vegas, NV 89146-5308

                     About Herbst Gaming Inc.

Headquartered in Reno, Nevada, Herbst Gaming Inc. --
http://www.herbstgaming.com/-- is an established casino and slot
route operator that operates casinos located in Nevada, Missouri
and Iowa.  The Debtors own and operate approximately 6,800 slot
machines in its slot route business and is a slot machine operator
in Nevada.  The Company and 17 of its affiliates filed for Chapter
11 protection on March 22, 2009 (Bankr. D. Nev. Lead Case No. 09-
50752).  Thomas H. Fell, Esq., Gordon Silver, represents the
Debtors in their restructuring efforts.  As of September 30, 2008,
the Debtors have $1,021,956,000 in total assets and $1,241,937,000
in total debts.


HERTZ GLOBAL: S&P Assigns 'B' Long-Term Corporate Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'B' long-term
corporate credit rating to Hertz Global Holdings Inc. and a 'CCC+'
rating to the company's 5.25% $450 million convertible senior
notes due 2014.  In addition, S&P assigned a '6' recovery rating
to the notes.  Hertz Global Holdings is the parent of car renter
Hertz Corp.

"The ratings on Hertz Global Holdings Inc. and Hertz Corp. reflect
an aggressive financial profile following its $14 billion
leveraged acquisition in December 2005 and the price-competitive
and cyclical nature of on-airport car rentals and equipment
rentals," said Standard & Poor's credit analyst Betsy Snyder.
"Ratings also take into account its exposure to the troubled
automobile manufacturing industry; and significant refinancing
risk-with close to $5 billion of debt maturities through 2010."
In addition, ratings incorporate the company's position as the
largest global car rental company and the strong cash flow its
businesses generate.

The rating incorporates S&P's expectation that Hertz's financial
profile will remain under pressure through 2009 due to anticipated
weaker earnings and cash flow.  The negative outlook reflects
refinancing risk.  The company's liquidity was aided by proceeds
of approximately $949 million from the sale of $450 million of
convertible senior notes and equity on May 20, 2009.  However, if
it appears that Hertz will be unable to refinance more of the $4.9
billion in debt that matures through 2010, which could be due to a
variety of reasons (including continued constrained credit markets
and the ongoing negative effect from problems related to the auto
manufacturers), S&P would likely lower ratings.  If the company
makes significant progress on refinancing its debt, S&P could
revise the outlook to stable.  While a bankruptcy of one or the
other auto manufacturers, in addition to Chrysler, could cause
some cash flow delays or further declines in used car values,
these would not necessarily cause sufficient damage to result in a
downgrade.  If the company purchases a portion of its term loan at
a discounted price through a tender offer, S&P would evaluate
whether S&P considered this a distressed debt purchase, which
could ultimately result in a downgrade to 'SD' (selective
default), if completed.


HILL COUNTRY: Court Extends Schedules Deadline to June 9
--------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Texas
extended until June 9, 2009, Hill Country Galleria, L.P.'s time to
file its schedules of assets and liabilities, lists, and statement
of financial affairs.

The Debtor related that the extension is in the best interest of
the estate, creditors and parties-in-interest.

Bee Cave, Texas-based Hill Country Galleria, L.P., is a single
asset real estate company.  The company was formed for the purpose
of acquiring land and constructing, operating, managing, leasing
and disposing of a real estate development project known as Hill
Country Galleria.

The Company filed for Chapter 11 on May 4, 2009 (Bankr. W. D. Tex.
Case No. 09-11175).  Bryan L. Elwood, Esq., at Greenberg Traurig,
LLP, represents the Debtor in its restructuring efforts.  The
Debtor's assets and debts both range from $100 million to
$500 million.


HUNTINGTON BANCSHARES: Offers to Purchase Securities
----------------------------------------------------
Huntington Bancshares Incorporated commenced an offer to purchase
for cash trust-preferred securities listed in the table:


                        Accept-    Aggregate    Tender
                        ance      Liquidation   Offer      Early      Total
Title of     CUSIP     Priority   Amount       Consid-    Tender     Consid-
Security    Numbers    Level     Outstanding   eration    Premium    eration
--------    -------    ------    -----------   -------    --------   -------
Huntington
Capital III
6.65% Trust
Preferred
Securities   44628M AA9      1    $250,000,000     $570       $30     $600
Huntington
Capital I
Floating
Rate Capital
Securities    446283 AD5,
              446283 AA1 or
              U44558 AA9     2    $152,180,000     $420       $30     $450
Huntington
Capital II
Floating
Rate Capital
Securities,
Series B      446284 AA9     2     $68,000,000     $420       $30     $450

The offer to purchase, which is part of a broader series of
capital actions recently announced by Huntington, is being made to
registered holders of the above trust preferred securities on the
terms and subject to the conditions set forth in the Offer to
Purchase dated May 21, 2009, and related letter of transmittal.
Huntington is offering to purchase the trust preferred securities
as set forth in the table above for an aggregate purchase price of
up to $200 million, not including any accrued and unpaid
distributions.

The tender offer will expire at 11:59 p.m., New York City time, on
June 18, unless extended or terminated.

The tender offer consideration for each $1,000 liquidation amount
of each issue of the trust preferred securities tendered and
accepted for purchase pursuant to the offer will be the applicable
tender offer consideration for such issue of trust preferred
securities set forth in the table.

Holders of trust preferred securities that are validly tendered on
or before the Early Tender Date, not validly withdrawn on or
before the Withdrawal Date and accepted for purchase will receive
the applicable Tender Offer Consideration plus the applicable
early tender premium for each issue of trust preferred securities
set forth in the table and, together with the Tender Offer
Consideration.

In order to receive the Early Tender Premium, holders of trust
preferred securities must tender their trust preferred securities
on or before 5:00 p.m., New York City time, on June 4, 2009,
unless extended by Huntington.

Holders who tender their trust preferred securities after the
Early Tender Date will receive only the Tender Offer
Consideration.  Holders who tender their trust preferred
securities may withdraw such trust preferred securities at any
time on or before 5:00 p.m., New York City time, on June 4, 2009,
unless extended by Huntington.

To the extent that the Maximum Tender Amount that Huntington would
otherwise pay would exceed the net proceeds of the $350 million
discretionary equity issuance program (DEIP) announced May 20,
2009, Huntington will accept for payment only the aggregate
liquidation amount of securities that does not result in an
aggregate purchase price exceeding such proceeds, and the
securities will be purchased in accordance with the acceptance
priority level in the table above.

If some but not all of an applicable acceptance priority level
issue of trust preferred securities is accepted for purchase, the
securities within that issue will be prorated based on the
aggregate liquidation amount tendered with respect to such issue.
Trust preferred securities with a lower acceptance priority level
than the prorated issue of trust preferred securities will not be
accepted for purchase.  Completion of the tender offer is subject
to, and conditioned upon, the satisfaction or, where applicable,
waiver of certain conditions set forth in the Offer to Purchase.
Huntington may amend, extend or terminate the tender offer at any
time.

The complete terms and conditions of the Tender Offer are set
forth in the Offer to Purchase and the letter of transmittal that
are being sent to registered holders of the trust preferred
securities.  Holders are urged to read the Offer to Purchase and
the letter of transmittal carefully when they become available.

                    About Huntington

Huntington Preferred Capital, Inc. -- http://www.huntington.com/
-- is a real estate investment trust (REIT).  HPCI acquires, holds
and manages mortgage assets and other authorized investments.
HPCI is owned by four related parties: Huntington Capital
Financing LLC (HCF), Huntington Preferred Capital II, Inc.
(HPCII), Huntington Preferred Capital Holdings, Inc. (Holdings)
and Huntington Bancshares Incorporated (Huntington).

                    *      *     *     *

As reported by the Troubled Company Reporter on April 29, 2009,
the Dominion Bond Rating Service placed the long- and short-term
ratings of Huntington Bancshares Inc. and its related entities,
including Huntington's Issuer & Senior Debt rating of BBB (high)
and Preferred Stock rating of BB(low), Under Review with Negative
Implications.

The review will focus on Huntington ability to cope with the
continued asset deterioration.  Over the past year Huntington has
struggled with elevated credit costs and earnings erosion
associated with both the Company's non-core Franklin Credit
Management (Franklin) relationship and core loan portfolios,
particularly those related to the commercial real estate and
commercial & industrial loan lending.  Additionally, the Company's
recent performance has been negatively impacted by a narrowing net
interest margin (NIM), and recurrent other-than-temporary-
impairment (OTTI) charges related to its asset backed securities
portfolio.


IDEARC FIRM: Firm Leads 8% Bondholders in Class Suit
----------------------------------------------------
Walden Law Firm, PLLC, reported that a class action has been
commenced in the United States District Court for the Eastern
District of Arkansas on behalf of purchasers of Idearc bonds
styled "8% Senior Notes Due 2016" CUSIP/ISIN 451663AC2 between
March 27, 2008, and March 30, 2009.

The complaint charges Idearc and certain of its officers and
directors with violations of the Securities Exchange Act of 1934.
Idearc is a media company that manages and delivers print, online
and wireless publishing and advertising services on multiple
platforms.

The complaint alleges that during the Class Period, defendants
issued materially false and misleading statements regarding the
Company's ability to service its debt.  Specifically, defendants
failed to disclose that Idearc was suffering from a terminally ill
balance sheet, which it subsequently admitted before filing for
bankruptcy.  As a result of defendants' false and misleading
statements, Idearc's bonds traded at artificially inflated prices
during the Class Period, reaching a high of $74.250 on April 24,
2008.

On March 31, 2009, the Company issued a press release announcing
that it had initiated a voluntary Chapter 11 petition under the
United States Bankruptcy Code, stating specifically that the
Company had "good potential," but was "being held back by a
terminally ill balance sheet."

Walden Law Firm, PLLC, is a law firm with an office in Little
Rock, Arkansas, is active in major litigations pending in federal
and state courts throughout the United States and has taken a
leading role in many important actions on behalf of defrauded
investors.  The Walden Web site (http://www.waldenlawfirm.com)has
more information about the firm.

                        About Idearc Inc.

Headquartered in DFW Airport, Texas, Idearc Inc. (NYSE: IAR) --
http://www.idearc.com/-- fka Verizon Directories Disposition
Corporation, provides yellow and white page directories and
related advertising products in the United States and the District
of Columbia.  Products include print yellow pages, print white
pages, Superpages.com, Switchboard.com and LocalSearch.com, the
company's online local search resources, and Superpages Mobile,
their information directory for wireless subscribers.

Idearch is the exclusive official publisher of Verizon print
directories in the markets in which Verizon is currently the
incumbent local exchange carrier.  Idearc uses the Verizon
brand on their print directories in their incumbent markets, well
as in their expansion markets.

Idearc and its affiliates filed for Chapter 11 protection on
March 31, 2009 (Bankr. N. D. Tex. Lead Case No. 09-31828).  Toby
L. Gerber, Esq., at Fulbright & Jaworski, LLP, represents the
Debtors in their restructuring efforts.  The Debtors propose
Moelis & Company as their investment banker; Kurtzman Carson
Consultants LLC as their claims agent.  William T. Neary, the
United States Trustee for Region 6, appointed six creditors to
serve on an official committee of unsecured creditors of Idearc
Inc. and its debtor-affiliates.  The Committee selected Mark
Milbank, Tweed, Hadley & McCloy LLP, as counsel, and Haynes and
Boone, LLP, co-counsel.  The Debtors' financial condition as of
December 31, 2008, showed total assets of $1,815,000,000 and total
debts of $9,515,000,000.


IED PINNACLE: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: IED Pinnacle/Miller, LLC
        5920 S. Rainbow Blvd., Suite 11
        Las Vegas, NV 89119

Bankruptcy Case No.: 09-11222

Chapter 11 Petition Date: May 22, 2009

Court: District of Arizona (Phoenix)

Judge: Redfield T. Baum, Sr.

Debtor's Counsel: Eric Slocum Sparks, Esq.
                  eric@ericslocumsparkspc.com
                  Eric Slocum Sparks PC
                  110 S. Church Ave., #2270
                  Tucson, AZ 85701
                  Tel: (520) 623-8330
                  Fax: (520) 623-9157

Total Assets: $30,000,000

Total Debts: $27,600,000

The Debtor's Largest Unsecured Creditors:

   Entity                      Nature of Claim   Claim Amount
   ------                      ---------------   ------------
American Bankers Insurance     trade debt        unknown
20410 N. 19TH AVE.
SUITE 170
Phoenix, AZ 85027

AR Mays                        trade debt        unknown
6900 E. INDIAN SCHOOL RD.
Scottsdale, AZ 85251

Arizona Business Magazine      trade debt        unknown
3101 N. CENTRAL AVE.
SUITE 1070
Phoenix, AZ 85012

Black Eagle Nursery            trade debt        unknown

Business Real Estate Weekley   trade debt        unknown

Cactus Asphalt                 trade debt        unknown

City of Scottsdale             trade debt        unknown

Consolidated Reprographics     trade debt        unknown

Coreslab Structures            trade debt        unknown

CoStar Realty                  trade debt        unknown

Courier Graphics Corp.         trade debt        unknown

Creative Environments          trade debt        unknown

CT Corporation                 trade debt        unknown

Deaner, Deaner, Scan, Malan    legal services    unknown
and Larsen

Dick & Fritsche Design Group   trade debt        unknown

Fennemore Craig PC             legal services    unknown

Frazier Masonry                trade debt        unknown

Fugro Consultants              trade debt        unknown

HC Beck                        trade debt        unknown

Maricopa County Treasurer      trade debt        unknown

The petition was signed by Dale Dowers, manager.


J&D COMPANY: Case Summary & 30 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: J&D Company, LLC
        600 Hunter Lane
        Middletown, PA 17057

Bankruptcy Case No.: 09-11751

Debtor-affiliates filing separate Chapter 11 petitions:

        Entity                                     Case No.
        ------                                     --------
    Interlake Material Handling, Inc.              09-10019
    United Fixtures Company, Inc.
       fka National Store Fixtures
       fka J&D Associates and Retail Service       09-10020
           Solutions
    Conco-Tellus, Inc.                             09-10022
    UFC Interlake Holding Co.                      09-10021

Chapter 11 Petition Date: May 20, 2009

Court: United States Bankruptcy Court
       District of Delaware (Delaware)

Judge: Kevin J. Carey

Debtor's Counsel: Kenneth J. Enos, Esq.
                  Young, Conaway, Stargatt & Taylor
                  1000 West Street, 17th Floor
                  Wilmington, DE 19801
                  Tel: (302) 571-6600
                  Email: bankfilings@ycst.com

                  M. Blake Cleary, Esq.
                  Young, Conaway, Stargatt & Taylor
                  1000 West Street, 17th Floor
                  P. O. Box 391
                  Wilmington, DE 19899-0391
                  Tel: (302) 571-6600
                  Fax: (302) 571-1253
                  Email: bankfilings@ycst.com

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

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

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

          http://bankrupt.com/misc/deb09-11751.pdf

The petition was signed by Daniel P. Wikel, chief restructuring
officer of the Company.


JENNIFER RENEE LEE: Case Summary & 12 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Jennifer Renee Lee
        1822 Webster Street
        Baltimore, MD 21230

Bankruptcy Case No.: 09-19180

Chapter 11 Petition Date: May 21, 2009

Court: United States Bankruptcy Court
       District of Maryland (Baltimore)

Judge: Nancy V. Alquist

Debtor's Counsel: Howard M. Heneson, Esq.
                  810 Glen Eagles Court, Suite 301
                  Towson, MD 21286
                  Tel: (410) 494-8388
                  Fax: (410) 494-8389
                  Email: hheneson@bankruptcymd.com

Total Assets: $2,464,416

Total Debts: $2,598,200

A full-text copy of Ms. Lee's petition, including a list of her 12
largest unsecured creditors, is available for free at:

          http://bankrupt.com/misc/mdb09-19180.pdf

The petition was signed by Ms. Lee.


JUNE HAVOC: Stamford, Conn., Home Being Auctioned on June 1
-----------------------------------------------------------
The Hon. Alan H.W. Shiff will oversee an auction of June Havoc's
five-bedroom, four-bath, 3,739 square-foot 1756 Federal Colonial-
style home located at 405 Long Ridge Road, Stamford, Conn., at
3:00 p.m. on June 1, 2009, pursuant to an Order of the Bankruptcy
Court signed on May 19, 2009.

The property was recently advertised in The Wall Street Journal's
real estate section for $1,500,000.

At the auction and sale hearing, Judge Shiff will consider offers
for the purchase of all right, title and interest in and to the
real property of the Debtor, to be sold "as is" with no warranties
or contingencies being provided to the successful buyer.  The
Auction and Sale will be conducted in accordance with the
provisions of Section 363(b), (f) and (k) of the U.S. Bankruptcy
Code, and these additional terms and conditions:

    (1) Any party interested in bidding on said property may
        inspect the property on May 28, 2009, and May 29, 2009,
        between the hours of 10:00 a.m. and 5:00 p.m. by
        scheduling an appointment with counsel for the Debtor:

            Wanda Borges, Esq.
            Borges & Associates, LLC
            575 Underhill Blvd.
            Syosset, New York 11791
            Telephone (516) 677-8200 ext. 225

    (2) The auction sale of the real property will be by open bid
        in open court, with the minimum acceptable bid being set
        at $750,000 and each subsequent bid to be in incremental
        amounts of no less than $10,000.

    (3) Any interested party wishing to bid at the hearing must
        produce a bank check in the amount of $125,000 prior to
        the commencement of the auction and must be prepared to
        close on the sale of the Debtor's real property on or
        before June 30, 2009.  In the event the successful bidder
        does not close on the sale by June 30, then the Deposit
        will be forfeited and liquidated for the benefit of the
        estate and the bidder offering the second highest bid
        will be given the opportunity to close on the sale of
        said real property.  Each Deposit received by Counsel for
        the Debtor on or prior to the day of the auction will be
        maintained in an interest bearing segregated account until
        the closing on said sale has taken place.

    (4) The bidder offering the highest dollar amount for the real
        property will be deemed the successful bidder, with the
        court having the right to reject the highest bid, for
        cause shown.

    (5) The sale of the real property will be free and clear of
        liens, claims and encumbrances, with such liens to attach
        to the proceeds of the Sales in their respective order of
        priority.

June Havoc filed for Chapter 11 protection (Bankr. D. Conn. Case
No. 08-51132) on November 24, 2008.


KA & KM: Files for Chapter 11 Bankruptcy Protection
---------------------------------------------------
Richard Bilbao at Orlando Business Journal reports that KA and KM
Development, Inc., has filed for Chapter 11 bankruptcy protection
in the U.S. Bankruptcy Court for the Middle District of Florida.

Court documents say that KA and KM owes $45.2 million to
creditors.

According to Business Journal, KA and KM failed to secure
financing for potential buyers of its 176-unit Villas at Lake Eve
condos.  Business Journal relates that KA and KM had 157 of the
property's condo units under contract to sell, mostly to overseas
investors, but a lack of financing available to the buyers
resulted in the sales being lost.

Orlando-based KA and KM Development Inc. is the developer behind
the 176-unit Villas at Lake Eve condos at 12388 International
Drive South in Orlando.  The Company filed for Chapter 11
bankruptcy protection on May 6, 2009 (Bankr. M.D. Fla. Case No.
09-06245).  Elizabeth A. Green, Esq., assists the Company in its
restructuring efforts.  The Cjompany listed $10 million to
$50 million in assets.


KABOOSE INC: Gets Ontario Court Nod for Plan Arrangement
--------------------------------------------------------
Kaboose Inc. received approval from the Ontario Superior Court of
Justice of its statutory plan of arrangement under section 182 of
the Business Corporations Act, Ontario.

The plan of arrangement was previously approved by the
shareholders of Kaboose at a special meeting held on May 21, 2009.

With the Court's approval of the Plan Arrangement, Kaboose will
sell substantially all of its North American assets to Disney
Online for approximately $23.3 million in cash (subject to a
working capital adjustment).

The North American Transaction is expected to close on June 1,
2009, following the closing, on the same day, of the sale of
Kaboose's UK subsidiary, Kaboose Acquisition (UK) Company, to
Romeo Bidco Limited, an affiliate of Barclays Private Equity
Limited, for a purchase price of GBP54 million in cash less third-
party debt outstanding at closing (expected to be approximately
GBP10 million); and

Following the completion of a court-approved creditor claims
Process and liquidation, pursuant to which Kaboose expects to
distribute approximately $0.65 in aggregate per common share to
shareholders, Kaboose will be dissolved.  The first distribution,
following the completion of the creditor claims process, is
expected to occur during the third quarter of 2009, depending on
the nature of claims that are made during the creditor claims
process.  To the extent that, among other things: (i) transaction
and wind-up costs; (ii) Kaboose's net cash position at closing of
the UK Transaction and North American Transaction; (iii) the
absence of unidentified claims; (iv) working capital of the North
American business at the time of closing; or (v) foreign exchange
rates, are different than assumptions made by management,
shareholders may receive aggregate distributions amounting to less
than $0.65 per common share.  Accordingly, Kaboose can give no
assurances as to the total amount or timing of distributions to
shareholders.

                       About Kaboose Inc.

Kaboose Inc. is a global media company fully dedicated to meeting
the needs of moms and their families. Kaboose ranks as one of the
world's top five family destinations and is a respected leader in
the online parenting category in three of the largest English
speaking countries - the United States, Canada and the United
Kingdom. Kaboose provides parents with an extensive array of
relevant information, resources, tools and community that support
their efforts during the parenting life cycle. Kaboose's websites
include its award winning flagship, Kaboose.com, which gives moms
the tools they need to plan an active, healthy and rewarding
family life; Bounty, the UK's favourite parenting club, providing
information, support and products for young families;
BabyZone.com, serving the needs of expectant and new moms;
ParentZone.com, a family-focused local resource and event site;
AmazingMoms.com, providing simple and easy solutions for birthday
parties, family crafts and special occasions; and Funschool.com
which promotes learning while helping kids have fun. Kaboose
trades on the Toronto Stock Exchange under the symbol "KAB".


KABUTO ARIZONA: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Kabuto Arizona Properties, LLC
        300 East Wigwam Boulevard
        Litchfield Park, AZ 85340

Bankruptcy Case No.: 09-11282

Chapter 11 Petition Date: May 22, 2009

Court: District of Arizona (Phoenix)

Debtor's Counsel: David W.M. Engelman, Esq.
                    dwe@engelmanberger.com
                  Engelman Berger, P.C.
                  3636 N. Central Ave., #700
                  Phoenix, AZ 85012
                  Tel: (602) 271-9090
                  Fax: (602) 222-4999

Estimated Assets: $50 million to $100 million

Estimated Debts: $50 million to $100 million

The Debtor did not file a list of 20 largest unsecured creditors.

The petition was signed by Kun Sam Kim, chief financial officer.


LEXINGTON PRECISION: Sees $100,000 Loss From Operations for Q1
--------------------------------------------------------------
Lexington Precision Corporation expects to report net sales for
the three-month period ended March 31, 2009, of $14,165,000,
compared to net sales of $21,352,000 for the three-month period
ended March 31, 2008.  Lexington Precision said in a regulatory
filing with the Securities and Exchange Commission that the
decrease in net sales was primarily the result of a decline in net
sales of automotive components used by original equipment
manufacturers.

Lexington Precision expects loss from operations for the three-
month period ended March 31, 2009, to be roughly $100,000,
compared to income from operations of $1,337,000 for the three-
month period ended March 31, 2008.  The decline in income from
operations was primarily due to the reduction in net sales.

Lexington Precision has not been able to file its Quarterly Report
on Form 10-Q for the period ended March 31, 2009, within the
prescribed time period without unreasonable effort and expense due
to the additional demands placed on its accounting professionals
because the Company, on April 1, 2008, filed for Chapter 11
protection.  The Company intends to file the Form 10-Q as soon as
reasonably practicable.

The Company is slated to hold its annual meeting of stockholders
at the offices of Nixon Peabody LLP, 437 Madison Avenue, 24th
Floor, New York, on, May 28, 2009, at 11:00 A.M.  The purpose of
the meeting is to consider:

   1. The election of six directors by the holders of Common Stock
      and $8 Cumulative Convertible Preferred Stock, Series B;

   2. The ratification of Malin, Bergquist & Company, LLP, as
      independent auditors of the Company for the year ending
      December 31, 2009; and

   3. The transaction of such other business as may properly come
      before the meeting and any adjournments thereof.

The Board of Directors has fixed the close of business April 13,
2009, as the record date for determining the stockholders of the
Company entitled to receive notice of and to vote at the meeting.

                     About Lexington Precision

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

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

At December 31, 2008, the Debtors had total assets of $53,354,000,
total liabilities of $100,061,000, and a stockholders' deficit of
$46,707,000.


LOCALBIZUSA: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: LocalbizUSA, Inc., a New Jersey Corporation
        1 Orient Way
        Ste. 336
        Rutherford, NJ 07070

Bankruptcy Case No.: 09-23093

Chapter 11 Petition Date: May 21, 2009

Court: United States Bankruptcy Court
       District of New Jersey (Newark)

Debtor's Counsel: Barry W. Frost, Esq.
                  Teich Groh
                  691 State Highway 33
                  Trenton, NJ 08619-4407
                  Tel: (609) 890-1500
                  Email: bfrost@teichgroh.com

Estimated Assets: $100,001 to $500,000

Estimated Debts: $10,000,001 to $50,000,000

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

          http://bankrupt.com/misc/njb09-23093.pdf

The petition was signed by Pat Giglio, president and CEO of the
Company.


M&D 1 LLC: Case Summary & 6 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: M&D 1, LLC
        11704 Sugarland Rd.
        Herndon, VA 20170

Bankruptcy Case No.: 09-14067

Chapter 11 Petition Date: May 21, 2009

Court: United States Bankruptcy Court
       Eastern District of Virginia (Alexandria)

Debtor's Counsel: John Paul Forest, II, Esq.
                  11350 Random Hill Rd., Suite 700
                  Fairfax, VA 22030
                  Tel: (703) 691-4940
                  Email: j.forest@stahlzelloe.com

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

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

A list of the Company's 6 largest unsecured creditors is available
for free at:

           http://bankrupt.com/misc/vaeb09-14067.pdf

The petition was signed by Michael A. Iacovacci II, manager of the
Company.


MAHALO ENERGY: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Mahalo Energy (USA), Inc.
        Suite 101 5110 South Yale
        Tulsa, OK 74135

Bankruptcy Case No.: 09-80795

Chapter 11 Petition Date: May 21, 2009

Court: United States Bankruptcy Court
       Eastern District of Oklahoma (Okmulgee)

Judge: Tom R. Cornish

Debtor's Counsel: Stephen W. Elliott, Esq.
                  Kline, Kline, Elliot & Bryant, PC
                  720 N.E. 63rd St.
                  Oklahoma City, OK 73105
                  Tel: (405) 848-4448
                  Email: selliott@klinefirm.org

Estimated Assets: $10 million to $50 million

Estimated Debts:  $100 million to $500 million


The Debtor's Largest Unsecured Creditors:

   Entity                      Nature of Claim   Claim Amount
   ------                      ---------------   ------------
Williams Production Mid
Con Co                         Trade Debt          $3,951,424

Black Stone Natural
Resources II B LP              Trade Debt            $514,844
Suite 2020
1001 Fannin
Houston, TX 77022

Metro Energy Group             Trade Debt            $498,764
1783 East 71st
Tulsa, OK 74136

Trailblazer Drilling Corp.     Trade Debt            $433,156

Bravo Construction Inc.        Trade Debt            $367,565

BSAP II Inc                    RI/WI                 $358,248

Rose Resources Oil & Gas Inc   Trade Debt            $350,948

B and B Gas Well Service LLC   Trade Debt            $267,480

Williams Production Mid
Con Co                         OR/RI/WI              $253,553

Hijet Bit LLC                  Trade Debt            $114,451

Armstrong Tool LLC             Trade Debt            $110,251

Centerpoint Energy Field Serv  Trade Debt            $109,030

Multi Chem Group LLC           Trade Debt             $94,784

Ballard Contracting and
Oilfield Service               Trade Debt             $79,828

West Rock Energy
Consultants Ltd                Trade Debt             $77,670

Baker Hughes Bus
Support Serv                   Trade Debt        $68,511

Pason System USA Corp          Trade Debt             $66,701

Hoffman & Associates Inc       Trade Debt             $63,343

Bison Gas Company LLC          RI/WI                  $56,479

Wilson                         Trade Debt             $55,296


The petition was signed by James Burns, president and CEO.


MCCLATCHY CO: S&P Downgrades Corporate Credit Rating to 'CC'
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and issue-level ratings on Sacramento, California-based newspaper
publisher The McClatchy Co.:

  -- The corporate credit rating to 'CC' from 'CCC+' (the rating
     outlook is negative);

  -- The secured debt to 'CC' from 'CCC+'; and

  -- The existing senior unsecured debt issued by Knight Ridder
     Inc., to 'C' from 'CCC-'.

Also, S&P assigned McClatchy's proposed up to $175 million 15.75%
senior notes due 2014 an issue-level rating of 'CCC-' -- two
notches below the expected corporate credit rating of 'CCC+'
following S&P's assessment of the company's post-exchange capital
structure.  S&P also assigned this debt a recovery rating of '6',
indicating S&P's expectation of negligible (0% to 10%) recovery
for noteholders in the event of a payment default.

The rating actions follow McClatchy's announcement that it is
offering to exchange up to $60 million in cash and up to
$175 million in new 15.75% senior notes due 2014 ("the new notes")
for a portion (or potentially all, in some cases) of all of the
company's outstanding senior unsecured note issues in the
company's capital structure ("the old notes"--five issues in
total).  The cash offer will be funded by up to $60 million in
revolver drawings (availability under the revolver at May 20, 2008
was $141 million), and McClatchy has amended it credit facility to
allow this.  The cash offer is available only to two notes issues
due in 2011 and 2014, which have been given first acceptance
priority.  The new notes will be senior unsecured obligations
guaranteed by McClatchy's existing and future material domestic
subsidiaries, and are offered in exchange for all five notes
issues.  The old notes are not guaranteed.  The exchange for cash
and new notes would represent a substantial discount to the par
amount of the outstanding issues.

The rating downgrades reflect S&P's view that the exchange offer
is tantamount to a default given the distressed financial
condition of the company and S&P's previously stated concern that
debt at McClatchy would undergo a restructuring of some form.  S&P
previously lowered S&P's corporate credit rating for the company
on Feb. 6, 2009, following S&P's conclusion that McClatchy would
likely violate its 7x total leverage covenant in its credit
facility at the end of 2009.  In addition, S&P were uncertain that
lenders would grant temporary relief, and even if they did, S&P
believed that potential leverage of 7x or more would not be
manageable over the long term given secular trends in the
newspaper industry.

Upon completion of the exchange, S&P would lower its rating on the
exchanged unsecured notes to 'D' and would lower the corporate
credit rating to 'SD' (selective default).  As soon as possible
thereafter, S&P will reassess McClatchy's post-exchange capital
structure and assign ratings based on the amount of notes
successfully tendered.

"It is our preliminary expectation that, in the event the exchange
succeeds, S&P would not raise the corporate credit rating to
higher than the previous 'CCC+' level," noted Standard & Poor's
credit analyst Emile Courtney.  "We acknowledge that the post-
exchange capital structure could substantially reduce McClatchy's
outstanding debt balances.  However, until S&P is confident that
there is a substantial and sustainable moderation in the rate of
decline in newspaper advertising revenue at the company, S&P is
unlikely to consider a rating higher than 'CCC+'.  Nonetheless, if
the exchange is successful, McClatchy would have greater capacity
to weather the current downturn over the next several quarters."


MERCEDES HOMES: Proofs of Claim Must be Filed by June 29
--------------------------------------------------------
The Honorable Paul G. Hyman, Jr., directs creditors holding claims
arising prior to January 26, 2009, against Mercedes Homes, Inc.,
and its debtor-affiliates to file proofs of claim on or before
5:00 p.m. on June 29, 2009.  The June 29 Bar Date applies to any
"claim," as that term is defined in Bankruptcy Code sec. 101(5),
including, without limitation (i) unsecured claims incurred by
vendors, suppliers, and other trade-related entities involved in
the general operation of the Debtors' businesses; (ii) litigation
claims, including such claims that have been asserted in
litigation where the plaintiffs have sued or joined as co-
defendants present or former directors, officers, or employees of
one or more of the Debtors, or other individuals or entities, who
may have indemnification claims or contribution claims against one
or more of the Debtors, or who may expose one or more of the
Debtors to vicarious liability under various principles or
provisions of applicable state law; (iii) any worker's
compensation claims; and (iv) any administrative agency claims or
similar kinds of private enforcement claims, including, but not
limited to, wage and hour claims, wrongful termination and
discharge claims, loss of benefits claims, harassment claims,
employment discrimination claims, and other employment related
claims. Furthermore, any holder of an equity interest in the
Debtors need not file a proof of such equity interest, unless such
holder asserts a claim against the Debtors (including a claim
relating to an equity interest or the purchase or sale of such
equity interest).  The deadline for governmental units to filing
proofs of claims in this case is fixed as September 27, 2009.

Claim forms must be received no later than 5:00 p.m., Pacific
Time, on June 29, by Kurtzman Carson Consultants LLC at this
address:

   Mercedes Homes Claims Processing Center
   c/o Kurtzman Carson Consultants LLC
   2335 Alaska Ave.
   El Segundo, CA 90245

Proofs of claim will be treated as filed only when actually
received by the Kurtzman Carson Consultants LLC by mail or hand-
delivery.  Facsimile and e-mailed proofs of claim will not be
accepted.  Creditors are advised not to file or send copies of
proofs of claim directly to the Debtors, counsel for the Debtors,
counsel for any committees that may be appointed in these cases,
or to counsel for the United States Trustee.  If a creditor wishes
to receive an acknowledgement of receipt of its proof of claim,
the creditor must provide KCC with an additional copy of the proof
of claim with a self-addressed, postage-paid return envelope.

Headquartered in Melbourne, Florida, Mercedes Homes Inc. --
http://www.mercedeshomes.com-- operates a homebuilding company
that was established in 1983 by Howard Buescher, a 23-year veteran
of the homebuilding business and his daughter Susan Girard.  The
Company employs approximately 400 people who sell, and construct,
homes of distinctive quality in over 80 communities in Florida,
Texas and North and South Carolina.

The Company and 10 affiliates filed for Chapter 11 protection on
January 26, 2009 (Bankr. S.D. Fla. Lead Case No. 09-11191).  Sean
T. Cork, Esq., Tina M. Talarchyk, Esq., and Craig D. Hansen, Esq.,
at Squire, Sanders & Dempsey, LLP, represent the Debtors in their
restructuring efforts.  Richard M. Williamson and Alvarez & Marsal
North American LLC serve as the Debtors' chief restructuring
officer, Odyssey Capital Group LLC as valuation expert, Michael P.
Kahn & Associates LLC as financial advisor and Kurtzman Carson
Consultants LLC as claims and noticing agent.  The Debtors'
Schedules of Assets and Liabilities delivered to the bankruptcy
court in March 2009 show $309 million in assets available to pay
liabilities totalling $280 million, $224 million of which is owed
to secured creditors.  M. Bryant Gatrell, Esq., at Moore & Van
Allen PLLC, represents the agent for the Debtors' prepetition
first lien facilities.  Jay M. Sakalo, Esq., at Bilzin Sumberg
Baena Price & Exelrod, LLP, represents the agent for the Debtors'
prepetition second lien facility.


MERUELO MADDUX: Expects to Report $5.9MM in Revenues for Q1
-----------------------------------------------------------
Meruelo Maddux Properties, Inc., anticipates reporting total
revenue of roughly $5.9 million for the quarter ended March 31,
2009, as compared to total revenues of $6.0 million and a net loss
of $4.0 million for the quarter ended March 31, 2008.

With the exception of its high-rise apartment project at 717 W.
Ninth Street, the Company has suspended all development projects,
which will cause its net loss to increase as carrying costs such
as interest, property taxes and related development costs are
expensed rather than capitalized.

Because of the suspension of its development projects, the Company
expects combined rental expense, interest expense and general and
administrative expenses to increase by roughly $4.0 million.

The Company said it is unable to provide an estimate of its net
loss for the quarter ended March 31, 2009, primarily because it
has not completed its analyses related to real estate impairments.

Meruelo Maddux Properties, Inc. (the "Company"), the Company and
certain of its direct and indirect subsidiaries filed voluntary
petitions for relief under Chapter 11 of the United States
Bankruptcy Code in the United States Bankruptcy Court for the
Central District of California, San Fernando Valley Division on
March 26 and 27, 2009 (the "Bankruptcy Filing").

Meruelo Maddux has not been able to file its quarterly report for
the period ended March 31, 2009.  The Company told the Securities
and Exchange Commission on May 12, 2009, that in the months
leading up to and since its bankruptcy filing, the Company has
been principally engaged in addressing bankruptcy-related matters,
negotiating with creditors and potential strategic partners, and
reformulating its business strategy in an effort to emerge from
bankruptcy.  The Company said its financial, accounting and
administrative personnel have devoted substantially all of their
time to the maintenance of the Company's ongoing operations,
including the development of the Company's postpetition business
strategy, as well as the completion of the year-end audit process
and the preparation and filing of the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2008.  The
Company's ability to address all of these matters concurrently has
been further hindered by the loss of key personnel in the
Company's financial reporting department.

"As a result of the increased burdens placed upon the Company's
financial, accounting and administrative staff, the Company has
been unable to timely complete its quarterly financial reporting
process for the fiscal quarter ended March 31, 2009.  However, the
Company intends to file its quarterly report on Form 10-Q for the
fiscal quarter ended March 31, 2009 as soon as practicably
possible after completion of its financial reporting processes,"
the Company told the SEC.

                       About Meruelo Maddux

Based in Los Angeles, California, Meruelo Maddux Properties, Inc.,
-- http://www.meruelomaddux.com/-- together with its affiliates,
engage in residential, commercial and industrial development.

Meruelo Maddux and its affiliates filed for Chapter 11 protection
on March 26, 2009 (Bankr. C. D. Calif. Lead Case No. 09-13356).
Aaron De Leest, Esq., John J. Bingham, Jr., Esq., and John N.
Tedford, Esq., at Danning Gill Diamond & Kollitz, represent the
Debtors in their restructuring efforts.  Asa S. Hami, Esq., Tamar
Kouyoumjian, Esq., and Victor A. Sahn, Esq., at SulmeyerKupetz, A
Prof Corp, represent the official committee of unsecured creditors
as counsel.  The Debtors' financial condition as of December 31,
2008, showed estimated assets of $681,769,000 and estimated debts
of $342,022,000.


MGM MIRAGE: MRI to Redeem $100-Mil. in 7.25% Debentures Due 2017
----------------------------------------------------------------
Mirage Resorts, Incorporated, a wholly owned subsidiary of MGM
MIRAGE, on May 18, 2009, provided notice to Wells Fargo Bank,
N.A., of MRI's election to redeem all of the outstanding 7.25%
senior debentures due 2017.  The redemption date will be June 18,
2009.

Pursuant to the Indenture dated as of August 17, 1997, as
supplemented by a Supplemental Indenture dated as of August 17,
1997, and a Second Supplemental Indenture dated as of October 10,
2000, between MRI and the Trustee (as successor in interest to
First Security Bank, National Association), under which the MRI
Debentures were issued, MRI will pay an amount equal to the sum of
the present values of the remaining scheduled payments of
principal and interest, discounted to the redemption date at a
rate based on U.S. Treasury securities and described in the
Indenture.

As of May 18, 2009 the principal amount of outstanding Debentures
was $100 million.  The Company estimates that, based on current
rates of U.S. Treasury securities, MRI will be required to pay
approximately $129.5 million on the redemption date of the
Debentures.

MGM MIRAGE on May 19, 2009, sold, through a private placement
exempt from the registration requirements under the Securities Act
of 1933, as amended, $650 million in principal amount of its
10.375% Senior Secured Notes due May 2014 and $850 million in
principal amount of its 11.125% Senior Secured Notes due November
2017.

The Company said it plans to use the net proceeds of the offering
-- roughly $1.42 billion after giving effect to discounts,
commissions and offering expenses -- together with the net
proceeds from a concurrent offering of common stock -- roughly
$1.10 billion after giving effect to discounts, commissions and
offering expenses and taking into account the underwriters
exercise of the over-allotment option -- to:

      (i) repay a portion of the outstanding amount under the
          Company's senior credit facility, including a permanent
          prepayment of roughly $825.5 million from the net
          proceeds of the Notes;

    (ii) redeem all of the 7.25% senior debentures due 2017 of
         Mirage Resorts, Incorporated, a Nevada corporation,
         a wholly owned subsidiary of the Company;

   (iii) purchase all of the Company's 6.0% senior notes due 2009
         and the 6.5% senior notes due 2009 of Mandalay Resort
         Group tendered in the pending tender offer; and

    (iv) for general corporate purposes.

                        About MGM MIRAGE

Headquartered in Las Vegas, Nevada, MGM MIRAGE (NYSE: MGM) --
http://www.mgmmirage.com/-- is a hotel and gaming company.  It
owns and operates 17 properties located in Nevada, Mississippi and
Michigan, and has investments in three other properties in Nevada,
New Jersey and Illinois.

The report of Deloitte & Touche, LLP, MGM MIRAGE's independent
registered public accounting firm on the Company's consolidated
financial statements for the year ended December 31, 2008,
contains an explanatory paragraph with respect to the Company's
ability to continue as a going concern.

                       *     *     *

As reported by the Troubled Company Reporter on May 20, 2009,
Standard & Poor's Ratings Services raised its corporate credit
ratings on MGM MIRAGE and its subsidiaries to 'CCC+' from 'CCC',
reflecting the substantial boost to MGM MIRAGE's intermediate-term
liquidity profile provided by the recent $2.5 billion capital
raise (prior to any over-allotments on the equity offering).  S&P
also removed all ratings from CreditWatch, where they were placed
with positive implications on May 13, 2009, following MGM MIRAGE's
announced plans to raise at least $2.5 billion of capital.  The
rating outlook is developing.

The TCR said May 15 that Moody's Investors Service affirmed MGM
MIRAGE's Caa2 Corporate Family Rating and Caa3 Probability of
Default Rating following the company's announcement it intends to
issue $1.0 of new common equity and $1.5 billion of new senior
secured notes.  A B1 rating was assigned to the proposed
$1.5 billion senior secured guaranteed notes.  MGM has an SGL-4
Speculative Grade Liquidity rating and a negative rating outlook.


MGM MIRAGE: Raises $1.42BB in Private Offer of 2014, 2017 Notes
---------------------------------------------------------------
MGM MIRAGE on May 19, 2009, sold, through a private placement
exempt from the registration requirements under the Securities Act
of 1933, as amended, $650 million in principal amount of its
10.375% Senior Secured Notes due May 2014 and $850 million in
principal amount of its 11.125% Senior Secured Notes due November
2017.

The Notes are guaranteed on a senior basis by substantially all of
the Company's wholly owned U.S. subsidiaries.  The Notes and the
corresponding guarantees are secured by:

     (i) a first priority lien on the Bellagio Hotel and Casino,
         the real property on which Bellagio is located and all
         existing and future personal property of Bellagio, LLC, a
         Nevada limited liability, other than cash, deposit
         accounts, gaming and liquor licenses and other assets and
         properties in which the grant of security is restricted
         by law or contract;

    (ii) a first priority lien on The Mirage Hotel and Casino, the
         real property on which Mirage is located and all existing
         and future personal property of The Mirage Casino-Hotel,
         a Nevada corporation, other than cash, deposit accounts,
         gaming and liquor licenses and other assets and
         properties in which the grant of security is restricted
         by law or contract; and

   (iii) upon receipt of the necessary gaming approvals, a first
         priority pledge of the equity interests in (a) Bellagio
         LLC and (b) TMCH.

The Notes were sold in the United States only to accredited
investors pursuant to an exemption from the Securities Act of 1933
and subsequently resold by such investors to qualified
institutional buyers pursuant to Rule 144A under the Securities
Act and to non-U.S. persons in accordance with Regulation S under
the Securities Act.  The Notes have not been registered under the
Securities Act and may not be offered or sold in the United States
absent registration or an applicable exemption from registration
requirements.

The Company said it plans to use the net proceeds of the offering
-- roughly $1.42 billion after giving effect to discounts,
commissions and offering expenses -- together with the net
proceeds from a concurrent offering of common stock -- roughly
$1.10 billion after giving effect to discounts, commissions and
offering expenses and taking into account the underwriters
exercise of the over-allotment option -- to:

      (i) repay a portion of the outstanding amount under the
          Company's senior credit facility, including a permanent
          prepayment of roughly $825.5 million from the net
          proceeds of the Notes;

    (ii) redeem all of the 7.25% senior debentures due 2017 of
         Mirage Resorts, Incorporated, a Nevada corporation,
         a wholly owned subsidiary of the Company;

   (iii) purchase all of the Company's 6.0% senior notes due 2009
         and the 6.5% senior notes due 2009 of Mandalay Resort
         Group tendered in the pending tender offer; and

    (iv) for general corporate purposes.

In connection with the closing of the Private Placement, (i) the
Company and the Guarantors entered into an indenture, dated as of
May 19, 2009, with U.S. Bank National Association, as the trustee,
(ii) Bellagio LLC and TMCH entered into a security agreement,
dated May 19, 2009, with U.S. Bank, as the collateral agent, and
(iii) the Company and MRI entered into a pledge agreement, dated
May 19, 2009, with U.S. Bank, as the collateral agent.

Under the Indenture, the Company issued the (i) 2014 Notes bearing
an interest rate of 10.375% and maturing on May 15, 2014, and (ii)
2017 Notes bearing an interest rate of 11.125% and maturing on
November 15, 2017, to certain initial purchasers of such Notes.
Interest on the Notes will be payable semi-annually on May 15 and
November 15 of each year, beginning on November 15, 2009.
Pursuant to the Indenture, the Notes are guaranteed on a senior
basis by the Guarantors.  Furthermore, the Indenture contains
covenants that will limit the Company's and the Guarantors'
ability to (i) pay dividends or distributions, repurchase equity,
prepay subordinated debt or make certain investments, (ii) incur
additional debt or issue certain disqualified stock and preferred
stock, (iii) incur liens on assets (subject to, under certain
circumstances, regulatory approval), (iv) merge or consolidate
with another company or sell all or substantially all assets, (v)
enter into transactions with affiliates, (vi) allow to exist
certain restrictions on ability of Guarantors to transfer assets,
and (vii) enter into sale and lease-back transactions.

Pursuant to the Indenture, if the Company experiences certain
change of control or, under certain circumstances, if the Company
or a Guarantor sells assets or experiences an event of loss with
respect to the Asset Collateral, the Company will be required to
offer to repurchase all or a portion, as applicable, of the
outstanding Notes.  The 2014 Notes will be redeemable at the
option of the Company at any time prior to the maturity date at
100% of their principal amount plus any accrued interest and a
"make-whole" premium set forth in the Indenture.

The 2017 Notes will be redeemable at the option of the Company at
any time prior to May 15, 2013 at 100% of their principal amount
plus any accrued interest and a "make-whole" premium set forth in
the Indenture.  The 2017 Notes may be redeemed after May 15, 2013,
until May 14, 2014, at a price of 105.563% of their principal
amount plus any accrued interest.  From May 15, 2014, until
May 14, 2015, the 2017 Notes may be redeemed at a price of
102.781% of their principal amount plus any accrued interest.
Thereafter, the 2017 Notes may be redeemed at a price of 100% of
their principal amount plus any accrued interest.

Pursuant to the Security Agreement, Bellagio LLC and TMCH granted
a security interest on the Asset Collateral to the collateral
agent to secure the obligations by Bellagio LLC and TMCH under
their guarantees of the Notes.  Pursuant to the Pledge Agreement,
the Company and MRI agreed to pledge, upon receipt of the
necessary gaming approvals, the Equity Collateral to secure the
obligations of the Company under the Notes and the obligations of
MRI under its guarantee of the Notes.  The Security Agreement and
the Pledge Agreement contain customary representations and
warranties.

The holders of the Company's 13% Senior Secured Notes due 2013
have an equal and ratable lien in the Asset Collateral and will
have an equal and ratable lien on the Equity Collateral upon
receipt of necessary gaming approvals.

U.S. Bank also serves as the trustee under various other
indentures governing the terms and conditions of certain of the
Company's outstanding debt securities.

                        About MGM MIRAGE

Headquartered in Las Vegas, Nevada, MGM MIRAGE (NYSE: MGM) --
http://www.mgmmirage.com/-- is a hotel and gaming company.  It
owns and operates 17 properties located in Nevada, Mississippi and
Michigan, and has investments in three other properties in Nevada,
New Jersey and Illinois.

The report of Deloitte & Touche, LLP, MGM MIRAGE's independent
registered public accounting firm on the Company's consolidated
financial statements for the year ended December 31, 2008,
contains an explanatory paragraph with respect to the Company's
ability to continue as a going concern.

                       *     *     *

As reported by the Troubled Company Reporter on May 20, 2009,
Standard & Poor's Ratings Services raised its corporate credit
ratings on MGM MIRAGE and its subsidiaries to 'CCC+' from 'CCC',
reflecting the substantial boost to MGM MIRAGE's intermediate-term
liquidity profile provided by the recent $2.5 billion capital
raise (prior to any over-allotments on the equity offering).  S&P
also removed all ratings from CreditWatch, where they were placed
with positive implications on May 13, 2009, following MGM MIRAGE's
announced plans to raise at least $2.5 billion of capital.  The
rating outlook is developing.

The TCR said May 15 that Moody's Investors Service affirmed MGM
MIRAGE's Caa2 Corporate Family Rating and Caa3 Probability of
Default Rating following the company's announcement it intends to
issue $1.0 of new common equity and $1.5 billion of new senior
secured notes.  A B1 rating was assigned to the proposed
$1.5 billion senior secured guaranteed notes.  MGM has an SGL-4
Speculative Grade Liquidity rating and a negative rating outlook.


MGM MIRAGE: Kerkorian Buys 14.2MM Shares, Raises Stake to 37%
-------------------------------------------------------------
Kirk Kerkorian's Tracinda Corp. last week purchased 14,285,714
shares of MGM MIRAGE common stock in an underwritten public
offering of 143,000,000 shares of Common Stock for a per share
price of $7.00.  Tracinda raised its holdings to 163,123,044, or
roughly 37%, of the Company's shares.

Headquartered in Las Vegas, Nevada, MGM MIRAGE (NYSE: MGM) --
http://www.mgmmirage.com/-- is a hotel and gaming company.  It
owns and operates 17 properties located in Nevada, Mississippi and
Michigan, and has investments in three other properties in Nevada,
New Jersey and Illinois.

The report of Deloitte & Touche, LLP, MGM MIRAGE's independent
registered public accounting firm on the Company's consolidated
financial statements for the year ended December 31, 2008,
contains an explanatory paragraph with respect to the Company's
ability to continue as a going concern.

                       *     *     *

As reported by the Troubled Company Reporter on May 20, 2009,
Standard & Poor's Ratings Services raised its corporate credit
ratings on MGM MIRAGE and its subsidiaries to 'CCC+' from 'CCC',
reflecting the substantial boost to MGM MIRAGE's intermediate-term
liquidity profile provided by the recent $2.5 billion capital
raise (prior to any over-allotments on the equity offering).  S&P
also removed all ratings from CreditWatch, where they were placed
with positive implications on May 13, 2009, following MGM MIRAGE's
announced plans to raise at least $2.5 billion of capital.  The
rating outlook is developing.

The TCR said May 15 that Moody's Investors Service affirmed MGM
MIRAGE's Caa2 Corporate Family Rating and Caa3 Probability of
Default Rating following the company's announcement it intends to
issue $1.0 of new common equity and $1.5 billion of new senior
secured notes.  A B1 rating was assigned to the proposed
$1.5 billion senior secured guaranteed notes.  MGM has an SGL-4
Speculative Grade Liquidity rating and a negative rating outlook.


MID RIVER MINERALS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Mid River Minerals, Inc.
        4675-M Weitz Road
        Morris, IL 60450

Bankruptcy Case No.: 09-18465

Chapter 11 Petition Date: May 21, 2009

Court: United States Bankruptcy Court
       Northern District of Illinois (Chicago)

Judge: Carol A. Doyle

Debtor's Counsel: Chris D. Rouskey, Esq.
                  Rouskey and Baldacci
                  151 Springfield Ave
                  Joliet, IL 60435
                  Tel: (815) 741-2118
                  Fax: (815) 741-0670
                  Email: rouskey-baldacci@sbcglobal.net

Total Assets: $1,259,804

Total Debts: $1,841,039

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

          http://bankrupt.com/misc/ilnb09-18465.pdf

The petition was signed by Anthony P. Augius, president of the
Company.


MONACO COACH: Court Approves Sale of Resort Assets to Four Buyers
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
approved the sale of certain assets related to Monaco Coach
Corporation's motorhome resorts and La Quinta, California, real
property to 4 separate buyers who submitted the highest and best
offers for the "resort assets":

  -- The resort property located in Las Vegas, Nevada, is sold to
     Las Vegas Motorcoach Resort Owners Association for the
     purchase price of $2,500,000.

  -- The resort property located in Indio, California is sold to
     Motorcoach Country Club Property Owners Association, Inc.,
     for the purchase price of $400,000.

  -- The real property located in La Quinta, California is sold to
     BLF, LLC, for $2,050,000.

  -- The resort properties located in Naples, Florida, and Bay
     Harbor, Michigan are sold to Morgan Acquisitions, LLC.
     Morgan offered  $8,520,283 for the Naples Resort and
     $2,629,716 for the Bay Harbor Resort.

                        About Monaco Coach

Monaco Coach Corporation, a national manufacturer of motorized and
towable recreational vehicles, is ranked as the number one
producer of diesel-powered motorhomes.  Headquartered in Coburg,
Oregon, with manufacturing facilities in Oregon and Indiana, the
Company offers a variety of RVs, from entry-level priced towables
to custom-made luxury models under the Monaco, Holiday Rambler,
Safari, Beaver, McKenzie, and R-Vision brand names.  The Company
operates motorhome-only resorts in California, Florida, Nevada and
Michigan.  Monaco Coach is listed on the Pink Sheets under the
symbol "MCOAQ".

As of September 27, 2008, the Company had $442.1 million in total
assets and $208.8 million in total liabilities.

Monaco Coach Corporation and its affiliates filed for Chapter 11
on March 5 (Bankr. D. Del., Lead Case No. 09-10750).  Laura Davis
Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl
& Jones LLP, represent the Debtors as counsel.  Dennis A. Meloro,
Esq., Diane E. Vuocolo, Esq., Donald J. Detweiler, Esq., Kevin
Finger, Esq., Monica Loftin Townsend, Esq., and Sean Bezark, Esq.,
at Greenberg Traurig, LLP, represent the official committee of
unsecured creditors as counsel.  Omni Management Group LLC serves
as the Debtors' claims, balloting, noticing and administrative
agent.


MONACO COACH: Court OKs Sale of RV Biz. to Navistar Unit
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
approved the sale of substantially all of the assets of Monaco
Coach related to the Debtors' motorhome, towable recreational
vehicle, and chassis manufacturing business to Workhorse
International Holding Company who submitted the highest and best
offer in accordance with the approved bid procedures.  Workhorse
is a unit of Navistar, Inc.

Pursuant to the Asset Purchase Agreement, dated as of April 23,
2009, Workhorse offered $52 million in cash, subject to certain
adjustments, plus the assumed liabilities, for the Acquired
Assets.

As reported in the Troubled Company Reporter on May 6, 2009,
Monaco Coach was scheduled to hold an auction on May 21 to test
whether there is a buyer that will pay more than the $52 million
offered by Navistar International Corp. for most of its business.
According to The Washington Post, no other bids were presented for
the assets, and, accordingly, the auction was cancelled.

The sale is scheduled to close June 2.  Monaco's deal with truck-
maker Navistar International Corp. includes certain manufacturing
facilities located in Indiana and Oregon.  In addition, Navistar
will acquire all brands, intellectual property, inventories and
equipment relating to Monaco's motorized and towable recreational
vehicle segments.

Excluded from the transaction are the Motorhome Resorts segment,
the Roadmaster Cargo Trailer business and several industrial
properties.

                   About Navistar International

Based in Warrenville, Illinois, Navistar International Corporation
(NYSE: NAV) -- http://www.navistar.com/-- produces
International(R) brand commercial and military vehicles,
MaxxForce(TM) brand diesel engines, IC brand school and commercial
buses, and Workhorse(R) brand chassis for motor homes and step
vans, and is a private label designer and manufacturer of diesel
engines for the pickup truck, van and SUV markets.  Navistar is
also a provider of truck and diesel engine parts.  Another
affiliate offers financing services.

                        About Monaco Coach

Monaco Coach Corporation, a national manufacturer of motorized and
towable recreational vehicles, is ranked as the number one
producer of diesel-powered motorhomes.  Headquartered in Coburg,
Oregon, with manufacturing facilities in Oregon and Indiana, the
Company offers a variety of RVs, from entry-level priced towables
to custom-made luxury models under the Monaco, Holiday Rambler,
Safari, Beaver, McKenzie, and R-Vision brand names.  The Company
operates motorhome-only resorts in California, Florida, Nevada and
Michigan.  Monaco Coach is listed on the Pink Sheets under the
symbol "MCOAQ".

As of September 27, 2008, the Company had $442.1 million in total
assets and $208.8 million in total liabilities.

Monaco Coach Corporation and its affiliates filed for Chapter 11
on March 5 (Bankr. D. Del., Lead Case No. 09-10750).  Laura Davis
Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl
& Jones LLP, represent the Debtors as counsel.  Dennis A. Meloro,
Esq., Diane E. Vuocolo, Esq., Donald J. Detweiler, Esq., Kevin
Finger, Esq., Monica Loftin Townsend, Esq., and Sean Bezark, Esq.,
at Greenberg Traurig, LLP, represent the official committee of
unsecured creditors as counsel.  Omni Management Group LLC serves
as the Debtors' claims, balloting, noticing and administrative
agent.


MTI TECHNOLOGY: Court Extends Plan Filing Deadline to June 15
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
has approved a stipulation reached by MTI Technology Corporation
and its official committee of unsecured creditors for an extension
of the Debtor's exclusive period to file a plan until June 15,
2009.

The Committee and the Debtor told the Court that they will be
pursuing avoidance claims under Chapter 5 of the Bankruptcy Code
and other litigation claims.  The Committee is also exploring the
possibility of obtaining a buyer for the Debtor's corporate shell,
through a reverse merger transaction, which would be effected
through a Chapter 11 plan of reorganization.

Headquartered in Tustin, California, MTI Technology Corp. --
http://www.mti.com/-- was a global provider of end-to-end
information infastructure for mid to large size companies.  At the
time of its bankruptcy filing, the Debtor had three primary groups
of assets, the majority of which have now been sold:

  (1) European Subsidiaries - The Debtor owned all of the issued
      and outstanding capital sock of each of MTI Technology
      GmbH, incorporated in Germany, MTI Technology Limited,
      incorporated in Scotland, and MTI France S.A.S.,
      incorporated in France.

  (2) A U.S.-based service division known as "Collective", which
      was acquired by the Debtor approximately 18 months ago.

  (3) A separate, U.S.-based sales and service division other
      than Collective.

The Company filed for Chapter 11 protection on Oct. 15, 2007
(Bankr. C.D. Calif. Case No. 07-13347).  Ivan L. Kallick, Esq., at
Mannatt Phelps & Phil; Christine M. Fitzgerald, Esq., and Eve A.
Marsella, Esq., at Clarkson, Gore & Marsella APLC, represent the
Debtor as counsel.  Omni Management Group LLC serves as the
Debtor's claim, noticing and balloting agent.  The U.S. Trustee
for Region 16 appointed nine creditors to serve on an Official
Committee of Unsecured Creditors in the Debtor's case.  Winthrop
Couchot Professional Corporation represents the Committee as
general insolvency counsel.  As of Aug. 21, 2007, the Debtor had
total assets of $19,955,578 and total debts of $33,093,308.


NCCS INC: Case Summary & 8 Largest Unsecured Creditors
------------------------------------------------------
Debtor: NCCS, Inc.
        223A Cumberland Avenue
        Portland, ME 04101

Bankruptcy Case No.: 09-20735

Chapter 11 Petition Date: May 21, 2009

Court: United States Bankruptcy Court
       Maine (Portland)

Debtor's Counsel: James F. Molleur, Esq.
                  Molleur Law Office
                  419 Alfred Street
                  Biddeford, ME 04005
                  Tel: (207) 283-3777
                  Fax: (207) 283-4558
                  Email: jim@molleurlaw.com

Estimated Assets: $0 to $50,000

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

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

          http://bankrupt.com/misc/meb09-20735.pdf

The petition was signed by David O'Donnell.


NCI BUILDING: Obtains Waivers Until July 15 from Sr. Lenders
------------------------------------------------------------
NCI Building Systems, Inc., has obtained waivers from its senior
credit facility lenders, including waivers of its financial
maintenance covenants and of restrictions on the ability of the
Company to enter into an agreement for a substantial equity
investment in the Company.  The waivers are intended to provide
the Company with sufficient time to address its comprehensive
capital structure plans.

The waivers will remain in effect through July 15, 2009, and
automatically extend to September 15, 2009, upon the signing of a
definitive agreement for an equity investment.

NCI Building Systems retained J.P. Morgan Securities Inc. to
assist the Company in assessing a comprehensive range of potential
alternatives to strengthen its balance sheet and enhance its long
term financial position.  As a result of this effort, NCI has made
significant progress with a leading private equity firm with
regard to a substantial equity investment in the Company.

While NCI is in advanced stages of negotiations with that private
equity firm, any transaction will require considerable cooperation
from the Company's lenders and note holders, and will be subject
to customary closing conditions, including refinancing of its
existing credit facilities and a recapitalization or redemption of
its convertible notes.  While there can be no assurances that a
transaction will be concluded, the Company continues to work
diligently towards the successful consummation of a comprehensive
solution.  Greenhill & Co. has been retained by NCI to advise the
Company on these matters.

"I am very encouraged by the progress we have made to date in
addressing our capital structure," commented Norman C. Chambers,
Chairman, President and Chief Executive Officer.

"We have made significant progress with an experienced private
equity firm to make a substantial investment in the company.
Despite the challenges presented by the economy and the credit
markets, I am confident that we will finalize a transaction,
enabling us to have sufficient liquidity to grow our business as
the economy rebounds.  While this investment will be very dilutive
to our current shareholders, we believe it is in their best
interest to address our capital structure."

"The waivers announced today provide us additional time to work
through various issues with all of the relevant parties," noted
Mr. Chambers.  "Our team will continue to proceed expeditiously to
finalize a transaction within the coming months."

NCI Building Systems, Inc., has filed a Form 8-K today with
respect to the bank group waivers.

                   About NCI Building

Houston, Texas-based NCI Building Systems Inc. manufactures and
markets metal products and services for the nonresidential
construction industry in North America.

                    *     *      *     *

As reported by the Troubled Company Reporter on May 25, 2009,
Standard & Poor's Ratings Services lowered its ratings on NCI
Building Systems Inc.  The corporate credit rating was lowered to
'B+' from 'BB'.  All ratings remain on CreditWatch with negative
implications where they were placed on March 11, 2009.


NOBLE INT'L: 691 Employees to Get Incentives Upon Sale of Assets
----------------------------------------------------------------
Roughly 691 employees of Noble International, Ltd., including
Andrew J. Tavi, the Company's Chief Executive Officer and David
Fallon, the Company's Chief Financial Officer, may be eligible to
earn cash incentive payments under the Company's key employee
incentive plan, in the event the Company achieves these payment
milestones:


     (1) the transfer of substantially all of the Company's laser
         welding business by April 30, 2009; and

     (2) the sale or transfer of substantially all of the
         Company's U.S. roll forming business by May 31, 2009.

In the event a payment milestone does not occur by the date
specified, and the primary reason for the delay was not within the
Company's control, each eligible employee will receive the cash
payment that would have been due the employee had the payment
milestone been achieved.  The Company's DIP lenders agreed to the
payments as incentives to accomplish the conditions required for
the Company to receive its DIP financing.

On May 5, 2009, cash payments resulting from the timely transition
of the Company's laser-welded blank business were paid to eligible
employees, including $38,461 to Mr. Tavi and $33,654 to Mr.
Fallon.

In the event that substantially all of the Company's U.S. roll
forming business is sold or transferred by May 31, 2009, or it is
not sold or resourced for a reason other than the fault of the
Company, then Mr. Tavi is to receive approximately $39,000 and Mr.
Fallon is to receive approximately $34,000, subject to adjustment
depending on the number of remaining eligible participants in the
Incentive Plan.

The U.S. Bankruptcy Court for the Eastern District of Michigan
approved Incentive Plan on April 29, 2009.

As reported by the Troubled Company Reporter, Noble International
on May 8, 2009, entered into a Purchase Agreement with
ArcelorMittal S.A.  The Purchase Agreement contemplates the sale
of the Company's European business, consisting of the shares of
Noble European Holdings B.V., together with the direct and
indirect holdings and assets of Noble BV.  The Transferred Assets
include all of the direct and indirect wholly-owned subsidiaries
of Noble BV, as well as its interest in certain joint ventures in
India, China and Silao, Mexico.  The Transferred Assets do not
include Noble BV's 49% equity interest in Sumisho Noble (Thailand)
Co., Ltd., or the Company's 50% equity interest in WISCO Noble
(Wuhan) Laser Welding Technology Co., Ltd.

ArcelorMittal agreed to (a) accept the Transferred Assets subject
to roughly EUR80 million in borrowed money at the closing, (b)
deliver $2.1 million to the Company by wire transfer or other
immediately available funds at the closing and (c) allow the
Company to retain any consideration received by Noble BV for the
transfer of the Thailand Joint Venture prior to closing.

At the closing, each of the Company and ArcelorMittal will execute
and deliver a mutual general release of substantially all of the
claims that such party and its affiliates may have against the
other party.  The Company will not be released with respect to the
subordinated debt owed to ArcelorMittal and its affiliate by the
Company in the original principal amount of $65 million.

The closing of the transaction contemplated by the Purchase
Agreement is subject to the satisfaction of various conditions
including bankruptcy court approval.  The closing is also subject
to the Company not receiving a higher and better bid during the
bankruptcy approval process.

ArcelorMittal disclosed in the Amendment No. 6 to its Schedule 13D
filing that it is the beneficial owner of roughly 16,663,651, or
58.5%, of the Company's common stock.

As reported by the TCR on May 21, 2009, Noble International will
test ArcelorMittal's offer at an auction on May 28.  The Court
will convene a hearing May 29 to consider the results of the
auction.

Meanwhile, Noble International withdrew on May 11 its appeal of
the Nasdaq Staff Determinations.  Accordingly, the Nasdaq Stock
Market informed the Company that it would delist the Company's
common stock effective at the open of business on May 13, 2009.

In April, the Company received Nasdaq Staff Determination letters
indicating certain violations of Nasdaq Listing Rules and
subjecting the Company's common stock to delisting.  The Company
appealed the Nasdaq Staff Determinations to the Nasdaq Listing
Qualifications Panel.

                     About Noble International

Headquartered in Warren, Michigan, Noble International, Ltd. --
http://www.nobleintl.com/home.html/-- provides flat, tubular,
shaped and enclosed formed structures to automotive original
equipment manufacturers and their suppliers, for use in automobile
applications, including doors, fenders, body side panels, pillars,
bumpers, door beams, load floors, windshield headers, door tracks,
door frames, and glass channels.

Noble International and its affiliates filed for Chapter 11
protection on April 15, 2009 (Bankr. E. D. Mi. Case No. 09-51720).
The Debtors proposed Foley & Lardner LLP as their general
bankruptcy counsel.  Daniel M. McDermott, the United States
Trustee for Region 9, appointed three creditors to serve on an
official committee of unsecured creditors.  The Debtors disclosed
total assets of $190,763,000 and total debts of $38,691,000, as of
January 10, 2009.


NORTEL NETWORKS: Court Extends Plan Deadline to Sept. 11
--------------------------------------------------------
Nortel Networks Inc. and its debtor-affiliates won an extension of
their time to file their Chapter 11 plan and solicit votes for
that plan.  The U.S. Bankruptcy Court for the District of
Delaware have extend the period by which the Debtors have the
exclusive right to file a plan of reorganization through September
11, 2009, and the period by which they have exclusive right to
solicit votes for that plan through November 10, 2009.

Attorney for the Debtors, Andrew Remming, Esq., at Morris Nichols
Arsht & Tunnell LLP, in Wilmington, Delaware, told the Court
that the Debtors need more time to coordinate with the Official
Committee of Unsecured Creditors and other parties-in-interests
to formulate a global plan to evaluate and maximize value for
their businesses and to develop a plan of reorganization.

The Debtors, Mr. Reming said, are still in the early stages of
building a consensus among their constituencies regarding the
formulation of a global plan since they have diligently worked on
a variety of time-consuming tasks necessary for the administration
of their bankruptcy proceedings since the Petition Date.  These
activities include:

   -- the creation of a global key employee retention and
      incentive plan;

   -- the implementation of procedures to resolve reclamation
      claims asserted against the Debtors;

   -- the rejection of certain executory contracts and
      non-residential leases;

   -- the negotiation and implementation of a multi-
      jurisdictional sale of the Debtors' non-core assets to
      Radware Ltd.;

   -- efforts aimed at stabilizing the Debtors' business and cash
      management operations in multiple jurisdictions around the
      world;

   -- engaging suppliers and customers of the Nortel companies'
      worldwide operations;

   -- the preparation of schedules of assets and liabilities and
      other reports required in the Debtors' bankruptcy cases,
      including assisting their publicly reporting Canadian
      affiliates to continue to timely file periodic reports
      required of a public company;

   -- the evaluation and coordination of the Debtors' U.S.
      restructuring efforts and court proceedings in the context
      of multi-jurisdictional proceedings;

   -- solicitation of input and coordination of restructuring
      efforts with the Creditors Committee; and

   -- spending substantial time and resources in providing
      information and due diligence to the Creditors Committee
      and the ad hoc group of bondholders.

In light of the accomplishments the Debtors thus far have achieved
in their Chapter 11 cases as well as the extraordinary complexity
and breadth of the Debtors' global business model, the Debtors'
request for an extension of their Exclusive Periods is justified,
Mr. Remming said.

Mr. Reming said the extension request is consistent with the
purpose of Section 1121 and will not harm creditors.  The
extension request, he adds, does not preclude parties-in-interest
from seeking a reduction or termination of the Exclusive Period
for cause.

                       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)


ORBITZ WORLDWIDE: S&P Puts 'B' Corporate Rating on Negative Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Orbitz
Worldwide Inc., including the 'B' corporate credit rating, on
CreditWatch with negative implications.

"The CreditWatch placement is based on the company's May 21, 2009,
announcement that it is seeking an amendment to its $685 million
credit agreement that would permit it to make open market
purchases of this debt," said Standard & Poor's credit analyst
Betsy Snyder.  "If the amendment is approved and the company buys
back bank debt at a material discount, S&P believes this could
qualify as a distressed debt purchase under our criteria."

Ratings on Orbitz Worldwide Inc. reflect the controlling stake in
the company held by Travelport and affiliates of the Blackstone
Group, one of the owners of Travelport Ltd.; an aggressive
financial profile; and the seasonal and cyclical nature of the
travel industry.  Ratings also incorporate the company's major
position in on-line travel distribution and the strong cash flow
this business typically generates.

In July 2007, Orbitz completed an IPO, which generated
$475 million of net proceeds, and closed on a $685 million secured
credit facility.  Most of the proceeds from these financings were
used to reduce Travelport's debt.  From the date of the IPO
through January 2008, Travelport continued to own approximately
59% of Orbitz.  At that time, it divested a portion of its stake
so that it no longer owns a controlling interest (just under 50%).
However, the shares were transferred to affiliates of the
Blackstone Group, one of Travelport's owners, who together still
own over 50%.

Orbitz is a leading on-line consumer travel distributor through a
diverse group of brands that include Orbitz, Cheap Tickets,
ebookers, and several others.  Orbitz is a major full-service U.S.
on-line travel agency.  Cheap Tickets is an on-line travel agency
focusing on price-sensitive travelers.  Ebookers is a U.K. based
European on-line and off-line travel agency.

If the company's proposed amendment to its credit agreement is
approved and it subsequently completes open market purchases of
its term loan at a discounted price, S&P will evaluate whether S&P
consider this a distressed debt purchase.  This could ultimately
result in a downgrade to 'SD' (selective default), based on S&P's
criteria, if completed.


ORTHOFIX INTERNATIONAL: Moody's Comments on B1' Corporate Rating
----------------------------------------------------------------
Moody's commented on the ratings and outlook of Orthofix
International NV.  Moody's acknowledges several recent
developments at Orthofix, which appear to signal early progress in
the stabilization of the spinal implant business (i.e, Blackstone)
as well as improved liquidity.  However, there is currently no
change to the rating outlook, which remains negative, as Moody's
believe there continues to be risks associated with litigation,
near-term product transitions and the continued restructuring of
the spine division.  There is no change to the B1 Corporate Family
Rating or the B2 Probability of Default Rating.

The last rating action was on March 26, 2008 when Moody's
downgraded the Corporate Family Rating to B1 from Ba3 and changed
the outlook to negative.

Orthofix is a provider of pre and post operative products to
address bone and joint health needs of patients.  Orthofix offers
surgical and non-surgical products primarily for the spine,
orthopedics and sports medicine markets.  The company reported
revenues of $521 million for the twelve months ended December 31,
2008.


OSCIENT PHARMA: Recieves Notice From NASDAQ on Delayed 10-Q Filing
------------------------------------------------------------------
Oscient Pharmaceuticals has received notification from the
Listings Qualifications Department of The NASDAQ Stock Market LLC
that since the Company has not filed its Form 10-Q for the period
ended March 31, 2009, the Company is no longer in compliance with
Marketplace Rule 5250(c)(1).

The Company has 60 calendar days, or until July 20, 2009, to
submit a plan to regain compliance.  Following such submission,
NASDAQ may provide the Company with up to 180 calendar days from
the filing's due date, or until November 11, 2009, to regain
compliance.


If NASDAQ does not accept the Company's plan to regain compliance,
the Company will receive written notification of delisting from
NASDAQ and at that time will be entitled to request a hearing
before a NASDAQ Listing Qualifications Panel to appeal the NASDAQ
decision.

The NASDAQ notice has no effect on the listing of the Company's
common stock on The NASDAQ Global Market at this time.

                About Oscient Pharmaceuticals

Waltham, Massachusetts-based Oscient Pharmaceuticals Corporation
is a commercial-stage pharmaceutical company marketing two FDA-
approved products in the United States: ANTARA(R) (fenofibrate)
capsules, a cardiovascular product and FACTIVE(R) (gemifloxacin
mesylate) tablets, a fluoroquinolone antibiotic.  ANTARA is
indicated for the adjunct treatment of hypercholesterolemia (high
blood cholesterol) and hypertriglyceridemia (high triglycerides)
in combination with diet.  FACTIVE is approved for the treatment
of acute bacterial exacerbations of chronic bronchitis and
community-acquired pneumonia of mild to moderate severity. Oscient
promotes ANTARA and FACTIVE through a national sales force calling
on primary care physicians, cardiologists, endocrinologists and
pulmonologists.


PLANT INSULATION: Files Ch. 11 to Deal with Asbestos Claims
-----------------------------------------------------------
Plant Insulation Co. filed a Chapter 11 petition on May 20 before
the U.S. Bankruptcy Court for the Northern District of California.
The Company has been haunted by asbestos personal-injury claims
arising from products it stopped selling and installing about 35
years ago.

The Debtor, formerly known as both Plant Asbestos Company and
Asbestos Company of California, was formed to engage in the
business of selling, installing and repairing asbestos, brick,
cement, concrete, stone and all other types of fire proofing and
insulating materials.  Plant was an insulation contractor; its
work regularly involved installing and removing asbestos products
during a wide range of years.  From January 1948 through the
1990s, Plant was the exclusive Northern California distributor and
contract applicator of Fibreboard Corp.'s "Pabco" and later
"CalTemp" brand high-temperature pipe and block insulation.  At
all times through about September 1971, the Fibreboard products
contained asbestos.  Plant's installation of asbestos containing
Fibreboard products likely ended sometime in 1972. As it had
before 1972, Plant thereafter continued to repair, maintain,
remove and displace asbestos-containing materials at various job
sites where it performed insulation work.

                      Asbestos Related Claims

As a result of Plant's sale and installation of asbestos-
containing products dating back to the 1930s, Plant has been
embroiled in asbestos-related litigation for many years.  From
early 1978 and continuing through its bankruptcy filing on May 20,
Plant had been subjected to thousands of asbestos bodily injury,
wrongful death and loss of consortium claims and lawsuits for
damages allegedly caused in whole or in part by exposure to
asbestos-containing materials installed or supplied by Plant
dating back to the 1930s.

As of the Petition Date, thousands of Asbestos Cases were pending
against Plant in California, primarily in Alameda and San
Francisco counties. Prior to the bankruptcy filing, approximately
40 new complaints were being filed against Plant each month, and
Plant anticipates that numerous additional asbestos related
claims will be asserted against it for many years to come.  The
potential liabilities represented by present and anticipated
future asbestos related claims against Plant far exceed the value
of Plant's assets. Plant believes that its historical
comprehensive general insurance assets provide coverage
for many of the present and future liabilities although Plant's
insurers dispute their liability in the Asbestos Cases.

                        Bankruptcy Filing

Plant is managing thousands of asbestos cases in numerous
unrelated actions and venues. The status quo has numerous
inefficiencies: The demand upon the courts is significant and
Plant has been unable to consolidate the pending actions in a
single or coordinated proceedings; Plant's resources have dwindled
to the point that it is challenged in its efforts to fairly
respond to plaintiffs' demands for discovery or the needs of
counsel and its insurers to properly defend claims; plaintiffs
with limited resources lack a streamlined means of submitting
claims and having them considered, adjudicated, and paid; and
insurers seeking to fully and finally limit their exposure lack
the ability to protect themselves against unknown and future
claimants that may be entitled to recourse against Plant's
policies.

In authorizing channeling injunctions pursuant to section 524(g)
of the Bankruptcy Code, Congress has established a mechanism by
which Plant can serve the legitimate needs of its creditors,
essentially plaintiffs holding asbestos claims, and those
individuals, now unknown, who will assert asbestos-related
personal injury and wrongful death claims in the future.  Section
524(g) also provides a vehicle by which those insurers who wish to
do so will be able to resolve permanently their prospective
liability for existing and future asbestos claims.  In filing its
chapter 11 case, the Debtor intends to invoke section 524(g) as a
means of resolving the otherwise intractable set of issues
associated with thousands of claims now pending against it in
various jurisdictions, and the future lawsuits on future claims
that would certainly be filed but for this bankruptcy case.

                    About Plant Insulation Co.

Plant Insulation Co., formerly known as both Plant Asbestos
Company and Asbestos Company of California, was formed to engage
in the business of selling, installing and repairing asbestos,
brick, cement, concrete, stone and all other types of fire
proofing and insulating materials.  From January 1948 through the
1990s, Plant was the exclusive Northern California distributor and
contract applicator of Fibreboard Corp.'s "Pabco" and later
"CalTemp" brand high-temperature pipe and block insulation.  At
all times through about September 1971, the Fibreboard products
contained asbestos.

Plant Insulation Co. filed a Chapter 11 petition on May 20, 2009
(Bankr. N.D. Calif. Case No. 09-31347) in San Francisco to resolve
asbestos personal-injury claims arising from products it stopped
selling and installing about 1972.


PLANT INSULATION: Wants to Keep Renfrew as Futures Representative
-----------------------------------------------------------------
Plant Insulation Company, pursuant to Sections 105(a), 327 and
524(g)(4)(B)(1) of the Bankruptcy Code, asks the U.S. Bankruptcy
Court for the Northern District of California to appoint the
Honorable Charles B. Renfrew (Ret.) as legal representative for
the purpose of protecting the rights of persons who might
subsequently assert against the Debtor personal injury or wrongful
death claims for damages allegedly caused by the presence of, or
exposure to, asbestos or asbestos containing products in
connection with Debtor's past operations.

After careful consideration concerning the selection of a
disinterested, highly qualified individual to represent Future
Asbestos Claimants, the Debtor selected Judge Renfrew, a former
United States District Judge for the Northern District of
California and the former Deputy Attorney General of the United
States.  He has previously served as the Futures Representative in
the jointly administered chapter 11 cases of Thorpe Insulation
Company and Pacific Insulation Company in the Central District of
California, Los Angeles Division, Case No. 07-19271; In re Western
Asbestos Company, Western MacArthur Co. and MacArthur Co. in the
Northern District of California, Oakland Division, Case No. 02-
46284; and In re. J.T. Thorpe, Inc. in the Central District of
California, Los Angeles Division, Case. No. 02-14216-BB.

The Debtor believes that Judge Renfrew is a "disinterested person"
as that term is defined in Section 101(14) of the Bankruptcy Code.

On February 13, 2009, the Debtor engaged Judge Renfrew in a
contractual capacity to serve as the Futures Representative
pursuant to an engagement letter.  As part of that engagement, the
Debtor expressly acknowledged that Judge Renfrew's sole
responsibility as Futures Representative, either in a contractual
capacity or as a retained professional under Section 524(g) of the
Bankruptcy Code, will be to protect the interests of future
holders of asbestos related personal injury claims against the
Debtor, or any successor in interest or alter ego, which may
require Judge Renfrew to take positions adverse to the Debtor.

Prior to the Petition Date, Judge Renfrew was compensated by the
Debtor at his current customary hourly rate of $700 per hour, plus
out of pocket expenses, in the amount of $6,734.99.

Judge Renfrew has retained the services of Gary S. Fergus, Esq.,
to represent him in his capacity as Futures Representative.  Mr.
Fergus' prepetition fees and costs were also paid by the Debtor
prior to the Petition Date, and Judge Renfrew intends to seek
Court approval of his postpetition retention of Mr. Fergus in this
chapter 11 case.  Mr. Fergus is currently holding in his client
trust account, on behalf of Judge Renfrew and professionals to be
retained by Judge Renfrew post-petition, approximately $250,000 in
funds provided by Plant pre-petition for payment of postpetition
services.  To date, the proposed Futures Representatives services
have consisted primarily of reviewing and being briefed by Debtor
on the status of the Debtor's operations as well as its insurance
coverage.

The Debtor requests that the appointment of a Futures
Representative be made on these terms and conditions:

   (a) Standing: The Futures Representative shall have standing
       to be heard as a party-in-interest in every matter relevant
       to the interests of Future Asbestos Claimants in the
       Debtor's chapter 11 case and in every matter relevant to 11
       U.S.C. Sec. 524(g) and any trust established thereunder
       (whether in the Bankruptcy Court, the District Court or any
       appellate court), including but not limited to,
       participating in any claims objection, estimation and plan
       negotiation processes, and applying to the Court for an
       order seeking clarification or expansion of his authority
       or duties.  Furthermore, the Futures Representative shall
       be authorized to exercise the powers and duties delegated
       to official committees with respect to participation in the
       formulation of the plan as enumerated in section 1103 of
       the Bankruptcy Code;

   (b) Engagement of Professionals: Attorneys and other
       professionals may be retained by the Futures Representative
       with prior approval from the Court pursuant to Sections
       105(a) and 327 of the Bankruptcy Code, consistent with the
       treatment afforded other professionals in this case;

   (c) Compensation: Compensation, including professional fees and
       reimbursement of expenses, shall be payable to the Futures
       Representative and the Futures Representative's
       professionals from the Debtor's estate, subject to approval
       by the Court, consistent with the treatment afforded to
       other professionals in this case pursuant to the applicable
       provisions of the Bankruptcy Code, the Federal Rules of
       Bankruptcy Procedure, the United States Trustee Guidelines,
       the Local Bankruptcy Rules and any order of this Court.
       The Debtor understands that the proposed Futures
       Representative's current hourly rate is $700 per hour and
       that from time to time his regular hourly rate may
       increase;

   (d) Removal of the Futures Representative: The Futures
       Representative may be removed or replaced at any time by
       the entry of an order of this Court, either on its own
       motion or on a motion of any party-in-interest;

   (e) Liability of Futures Representative: The Futures
       Representative shall not be liable for any damages, or have
       any obligations other than the duties prescribed in the
       order of appointment; provided, however, that nothing shall
       relieve the Futures Representative from liability arising
       out of his or her willful misconduct or gross negligence.
       The Futures Representative shall not be liable to any
       person as a result of any action or omission taken or
       made by the Futures Representative in good faith; and

   (f) Right to Receive Notice: The Futures Representative and his
       counsel shall be entitled to receive all notices and
       pleadings that are served upon any committee appointed in
       this case.

According to David J. Gordon, president and chief executive
officer of the Debtor, one of the key elements of any plan of
reorganization proposed by the Debtor in this case will be to
establish a trust and channeling injunction pursuant to which all
current and future asbestos-related personal injury and wrongful
death claims involving the Debtor will be channeled for
liquidation and payment. In order to properly establish such a
trust, the interests of both current and future asbestos-related
claimants must be assessed and accommodated, Mr. Gordon said.

Proposed counsel to the Debtor, Peter J. Benvenutti, Esq., at
Jones Day, relates current claimants are claimants who have a
"claim" as defined in the Bankruptcy Code against the Debtor
during the proceedings leading to the confirmation of the plan.
The interests of current asbestos-related claimants are protected
in this case by the right of each individual claimant to file a
proof of claim and appear and be heard in the case and by the
appointment of the Official Committee of Unsecured Creditors.

Future Asbestos Claimants are persons and entities that do not
currently have an asbestos-related personal injury or wrongful
death claim against the Debtor but may in the future have such a
claim. The rights of such Future Asbestos Claimants are referred
to as "future demands" under Section 524(g) of the Bankruptcy
Code.  In order to best protect the interests of Future Asbestos
Claimants with respect to their asbestos-related Demands, a
Futures Representative should be appointed.  In particular, a
Futures Representative has the responsibility of acting as a legal
representative for the purpose of protecting the rights of persons
that might subsequently assert Demands.

The Debtor believes, based upon the numerous asbestos related
bodily injury lawsuits that continue to be filed against it that
numerous claims will continue to be asserted in the future.  As
a result, the Debtor believes it is important to appoint a Futures
Representative at the inception of this case.  According to Mr.
Benvenutti, appointing a Futures Representative at the outset of
this chapter 11 case will facilitate negotiations among the
various constituencies over the terms of a plan of reorganization
and result in a more efficient process by involving the Futures
Representative in issues that will affect his constituency, such
as any proposed settlements with the Debtor's insurers.

The Debtor recognizes that potential conflicts exist between the
interests of the Future Asbestos Claimants and those asbestos
claimants who currently have claims against the Debtor's estate.
These conflicts are the reason for the Debtor's request that an
independent Futures Representative be appointed to represent the
interests of the Future Asbestos Claimants.  Moreover, because the
identities of Future Asbestos Claimants are currently unknowable,
a Futures Representative is necessary to act as a fiduciary to
protect those claimants' interests with regard to the treatment of
asbestos claims.

                    About Plant Insulation Co.

Plant Insulation Co., formerly known as both Plant Asbestos
Company and Asbestos Company of California, was formed to engage
in the business of selling, installing and repairing asbestos,
brick, cement, concrete, stone and all other types of fire
proofing and insulating materials.  From January 1948 through the
1990s, Plant was the exclusive Northern California distributor and
contract applicator of Fibreboard Corp.'s "Pabco" and later
"CalTemp" brand high-temperature pipe and block insulation.  At
all times through about September 1971, the Fibreboard products
contained asbestos.

Plant Insulation Co. filed a Chapter 11 petition on May 20, 2009
(Bankr. N.D. Calif. Case No. 09-31347) in San Francisco to resolve
asbestos personal-injury claims arising from products it stopped
selling and installing about 1972.


PLANT INSULATION: Wants Suit vs. Insurers to Proceed
----------------------------------------------------
Plant Insulation Co. has been embroiled in asbestos-related
litigation for many years as a result of its sale and installation
of asbestos containing products dating back to the 1930s.
Thousands of asbestos bodily injury, wrongful death and loss of
consortium claims and lawsuits have been pursued against Plant on
account of its distribution until 1972 of Fibreboard Corp.'s
"Pabco" and later "CalTemp" brand insulation, which contained
asbestos.

Plant maintained comprehensive general or excess liability
insurance from various insurers.  Beginning in 1988, certain of
Plant's insurers defended Plant against the asbestos cases, and
the following year they began to pay settlements or other
indemnity amounts.  Beginning in 1991, Plant's insurers, however,
began advising it that their policies had been "exhausted" and
that they would no longer defend or indemnify Plant.  Each
insurer, in turn professed "exhaustion" of its policies until, by
2001, all of Plant's insurers had stated that they would no longer
defend or indemnify Plant against the asbestos cases.

Plant had insufficient resources with which to defend itself
against the asbestos cases, or to pay settlements or judgments in
more than a handful of the cases that were pending against it when
the last insurer asserted exhaustion.  In addition, new asbestos
cases were regularly filed against Plant.

Plant was not aware, and did not understand, that its insurance
policies operated so as to cover, without any aggregate limit, so
called "operations" or "non-product" claims, i.e., bodily injury
claims caused by asbestos exposure before a product is
relinquished or an operation is completed.  Consequently, when
Plant's various insurers told it that their policies were
"exhausted", Plant accepted the representation and turned to other
insurers until, in 2001, all of Plant's then solvent insurers had
claimed exhaustion.

                     Declaratory Relief Action

In an effort to resolve certain coverage disputes with its
Insurers, on January 17, 2006, Plant filed an action in the
California Superior Court for the County of San Francisco,
captioned Plant Insulation Company v. Fireman's Fund Insurance
Company, et al. (No. CGC-06-448618).

The Declaratory Relief Action is designated as complex litigation
and is assigned for all purposes to the Honorable John E. Munter,
Judge of the Superior Court.  The current operative pleading
seeking relief on behalf of Plant in the Coverage Litigation is
the Second Amended Complaint, filed on April 16, 2007.  The
Amended Complaint names certain insurers, and alleges that those
insurers issued insurance policies to Plant over a period of
years.  The Amended Complaint seeks declaratory relief only in the
form of policy interpretations, including approximately 13
separate declarations pertaining to how the policies apply to
asbestos injury and death claims asserted against Plant.  It does
not seek damages.  For example, Plant seeks a declaration that,
notwithstanding the exhaustion of aggregate limits for
products/completed operations, Plant is entitled to additional
coverage for asbestos-related bodily injury claims.  It also seeks
a declaration based on the premise that all such coverage is
"occurrence"-based and asserts that certain of the Insurers have
acted inequitably toward Plant in certain respects, thereby
affecting Plant's rights under the policies issued to it by such
Insurers.  Certain of the Insurers have filed cross-complaints
against Plant which seek, generally speaking, declarations
concerning insurance policy interpretation, including that the
policies at issue do not provide coverage for the asbestos claims
against Plant.

The Declaratory Relief Action has been phased or staged for trial.
First, after the parties engaged in voluminous discovery, a 22-day
"Phase I" trial without a jury commenced on May 6, 2008.  The
Phase I trial addressed three issues: (1) the existence and
material terms of policies allegedly issued by American Automobile
Insurance Company to Plant covering the period from July 23, 1942
to July 23, 1952; (2) the material terms of policies issued by
American Employers' Insurance Company to Plant from January 1,
1962 to January 1, 1965; and (3) equitable defenses to Plant's
Phase I allegations relating to those policies.  The trial
included 3068 pages of transcript, 20 witnesses (appearing either
live or by deposition designation), and over 350 admitted
exhibits. A tentative decision was entered by the trial court on
the Phase I issues on or about October 29, 2008, and a final
decision was entered on or about January 9, 2009.  The Phase I
decision was unfavorable to Plant in that, among other things, the
trial court found that Plant had failed to prove the existence and
certain content of the "missing" polices at issue in that trial
phase.

No final judgment has been entered in the Declaratory Relief
Action.  Judge Munter has scheduled a Phase II trial to commence
on Tuesday, May 26, 2009.  That trial involves three affirmative
defenses interposed by the Insurers -- "judicial estoppel",
"unclean hands" and waiver.  It will be tried to the Court without
a jury. The Insurers contend that if established, the defenses, or
any of them, should result in the dismissal of Plant's complaint
in the Declaratory Relief Action.  The Insurers have declined to
state whether they will continue to prosecute their cross-
complaints against Plant if Plant were to lose the Phase II trial,
and if Plant's complaint in the declaratory relief action were to
be dismissed.  The contentions of the parties with respect to the
impending Phase II trial are generally as set out in the trial
brief of the Insurers.

While the relief sought by Plant in the Declaratory Relief Action
would substantially advance the parties' ability to finally
resolve coverage issues relating to those Policies, Plant believes
that coverage issues relating to the Insurers' policies will
survive the Declaratory Relief Action regardless of its outcome.

                    CIGA Dispute and Settlement

By order entered February 24, 1987, the Los Angeles Superior Court
declared two of Plant's asbestos insurers, Mission Insurance
Company and Mission National Insurance Company, insolvent and
placed such insurers into liquidation.

In early 2001, Plant began efforts to convince the California
Insurance Guarantee Association that it should provide Plant with
statutory "backup" with respect to the policies issued by the
Mission Insurers.  Plant and CIGA entered into a settlement
agreement whereby CIGA agreed to provide statutory coverage to
Plant under the Mission Insurers' policies in the amount of $35
million.  By letter agreement dated January 28, 2002, CIGA
retained Travis & Pon ("T&P") and John M. Gregory to handle Plant
asbestos claims and attempt to resolve them without costly
litigation.  Eventually, Plant established the Plant Insulation
Company Asbestos Case Valuation Matrix which provided a vehicle
for equitably sharing the limited CIGA funds among deserving
claimants with reduced case handling costs, compared to how cases
had been handled by Plant's insurers before they all declared
exhaustion.

In late 2005, Plant retained Morgan Lewis & Bockius LLP.  Morgan
Lewis was and is a firm with substantial experience with
Operations Coverage issues.  In January 2006, Plant sued the
insurers who had previously claimed exhaustion, and tendered to
those insurers several thousand Asbestos Cases then pending
against Plant.  The Insurers accepted the tender under a full
reservation of rights.  Asbestos Cases continue to be filed
against Plant at a rate of about 40 per month.  Since January 2006
asbestos cases newly filed and served on Plant have been referred
18 to the Insurers and have been defended by them.  Beginning in
March 2007, Plant settled with two of its primary insurers for
cash payments in excess of the stated limits of liability in their
respective policies.  Certain primary insurers have also paid cash
to asbestos claimants in settlement of lawsuits against Plant.

The Insurers' decision to provide Plant with a defense against
Asbestos Cases and to settle a limited number of such claims for
cash notwithstanding their prior statements that the policies or
aggregate limit thereof had been "exhausted" raised the
possibility from CIGA's perspective that insurance was still
available to cover certain asbestos claims against Plant, which in
turn raised the possibility that certain asbestos claims against
Plant which were being evaluated and processed through the Plant
Matrix were not "covered claims" within the meaning of Insurance
Code section 1063.1.  As a result, on August 1, 2007, CIGA and
Plant agreed that processing of cases submitted to the Plant
Matrix would be suspended for an indefinite period, except for
certain claims then subject to a recommendation that they be paid
under the Plant Matrix.  Accordingly, as of the Petition Date,
CIGA settlement proceeds in the amount of approximately
$15 million remain available for future distribution to claimants
and payment of associated counsel costs, if Plant can provide
proof to CIGA that all solvent insurance coverage has been
exhausted.

Because a substantial quantity of asbestos-containing materials
sold and installed by Plant from 1948 through at least the early-
1970s were Pabco and CalTemp pipe and block insulation, a vast
majority ofthe claimants with legitimate asbestos health claims
against Plant also have claims against Fibreboard.  Accordingly,
Plant filed a number of indemnification claims against Fibreboard
in Alameda County, and a total of 2,211 such asbestos claims were
settled and 15 paid between 1994 and October 5, 2000, the date
Fibreboard went into bankruptcy.  Thereafter, Plant filed its
indemnity claims in the Fibreboard bankruptcy case.  In the
absence of a settlement with the Owens Coming/Fibreboard Asbestos
Personal Injury Trust, Plant intends to file and will file
indemnity claims against the Fibreboard Trust for more than
$103,000,000.  Plant believes that the Fibreboard Trust will
assert defenses to liability on those claims, but the Fibreboard
Trust has not taken a formal position on the Plant indemnity
claims as of the Petition Date.

                     Settlement with Insurers

Beginning in March 2007, Plant settled with two of its insurers
for cash payments in excess of the stated limits of liability in
their respective policies.  Certain primary insurers have also
paid cash to asbestos claimants in settlement of lawsuits against
Plant.  Thus far, in the aggregate, these settlements have
resulted or may result in the Debtor receiving up to $27 million
from those insurers for the benefit of asbestos claimants.
Certain of the settlements are conditioned upon this Court
approving those agreements.  Also, the insurers' obligation to
fund portions of the settlement amount are conditioned upon this
Court confirming a plan that provides protection to the settling
insurer pursuant to section 524(g) of the Bankruptcy Code. The
Debtor anticipates filing motions seeking the required Court
approvals of those settlements.

                    Sale of Plant's Assets and
                 Wind Down of Business Operations

On May 17, 2001, Shahram Ameli, who had been Plant's Vice
President and manager of operations for a number of years, formed
Bayside Insulation, Inc..  Pursuant to an agreement as of that
same date, Plant sold substantially all of its business assets to
Bayside.  By 2002, Plant had ceased active insulation operations,
but continued to defend itself against claims and lawsuits and to
pursue indemnity claims against Fibreboard.

On January 1, 2004, Plant Equitable and Asbestos Claims
Enterprise, LLC, a California limited liability company ("PEACE")
acquired 100% of the outstanding shares of capital stock of Plant.
Travis and Gregory each owned 50% of the outstanding shares of
PEACE.   On February 18,2009, PEACE transferred all its stock in
Plant to The Plant Insulation Trust, which as a result became, and
is now, the owner of 100% of the outstanding shares of Plant.
David J. Gordon is the President and Chief Executive Officer of
Plant. Plant has no other officers or directors.

At present, Plant has no material liabilities except for
liabilities unrelated to asbestos claims.  Plant's assets consist
principally of cash derived from settlements with certain insurers
and claims against Insurers and the Fibreboard Trust.

                         Lift Stay Motion

Plant is managing thousands of asbestos cases in numerous
unrelated actions and venues.  The status quo has numerous
inefficiencies: The demand upon the courts is significant and
Plant has been unable to consolidate the pending actions in a
single or coordinated proceedings; Plant's resources have dwindled
to the point that it is challenged in its efforts to fairly
respond to plaintiffs' demands for discovery or the needs of
counsel and its insurers to properly defend claims; plaintiffs
with limited resources lack a streamlined means of submitting
claims and having them considered, adjudicated, and paid; and
insurers seeking to fully and finally limit their exposure lack
the ability to protect themselves against unknown and future
claimants that may be entitled to recourse against Plant's
policies.  In authorizing channeling injunctions pursuant to
section 524(g) of the Bankruptcy Code, Congress has established a
mechanism by which Plant can serve the legitimate needs of its
creditors, essentially plaintiffs holding asbestos claims, and
those individuals, now unknown, who will assert asbestos-related
personal injury and wrongful death claims in the future.
In filing this chapter 11 case, the Debtor intends to invoke
Section 524(g) as a means of resolving the otherwise intractable
set of issues associated with thousands of claims now pending
against it in various jurisdictions, and the future lawsuits on
future claims that would certainly be filed but for this
bankruptcy case.

As for the Declaratory Relief Action, Plant asks the Bankruptcy
Court to enter an order, pursuant to Section 362 of the Bankruptcy
Code, modifying the automatic stay to the extent necessary to
permit the "Phase II" trial involving the interpretation of
certain of the Debtor's insurance policies now pending before the
Superior Court of California to proceed through final decision.
While the relief sought by Plant in the Declaratory Relief Action
would substantially advance the parties' ability to finally
resolve coverage issues relating to those Policies, Plant believes
that coverage issues relating to the Insurers' policies will
survive the Declaratory Relief Action regardless of its outcome.
Because of the imminence of the Phase II trial, and in order to
avoid either disrupting the long established trial schedule, or
placing a cloud on the validity of the Phase II trial proceedings,
Plant seeks the modification of the automatic stay - namely,
confirmation by this Court that the parties may proceed before
Judge Munter solely for the purposes of completing the Phase II
trial.  Plant or the Insurers may thereafter seek broader relief
on full notice to all affected parties (presumably including an
official committee of unsecured creditors and a future claims
representative).

Proposed counsel to the Debtor, Peter J. Benvenutti, Esq., at
Jones Day, notes that the Ninth Circuit in Gruntz v. Los Angeles
(In re Gruntz), 202 F.3d 1074, 1082-83, has made it clear that the
bankruptcy court -- not the state court -- has the exclusive
authority to determine the extent to which the automatic stay
applies in any particular situation.

Plant, according to Mr. Benvenutti, believes it essential to
proceed with the Phase II trial on the scheduled timetable:

(1) For over three years, Plant and its insurers have litigated
     the Declaratory Relief Action before the Superior Court, and
     the case has reached an important stage -- adjudication of
     certain alleged "defenses" to Plant's request for
     construction of its policies.  The Phase II trial has been
     scheduled for many months, and the parties -- including Plant
     -- are prepared to proceed as planned.  If the trial cannot
     go forward as currently scheduled on May 26, 2009, because of
     the number of parties and counsel and Judge Munter's heavy
     docket, it will likely be difficult for the Superior Court,
     the Debtor's professionals, the Insurers, their counsel and
     all other interested parties involved to establish a new
     trial date in the near future, and the resulting disruption
     and delay would impose very substantial costs on all parties,
     including Plant.  The claims at issue are contract claims
     that arise under non-bankruptcy law.  Accordingly, it is most
     efficient and in the best interests of creditors and the
     estate to allow the trial to proceed as scheduled.

(2) Second, if the Phase II trial is stayed, there could be an
     associated delay in the Debtor's ability to promptly
     reorganize.  The construction of the insurance policies at
     issue in the Declaratory Relief Action reflect fundamental
     disputes between Plant and the Insurers.  A delay in the
     commencement of Phase II trial could impede the Debtor's
     ability to propose and confirm a plan in this case, and make
     the likelihood of consensual resolution far more difficult.

(3) Neither Debtor nor its creditors will suffer undue prejudice
     or hardship if the automatic stay is modified.  Plant's
     litigation counsel is serving on a contingency basis.
     Plant's creditors, the plaintiffs, will get rulings that will
     clarify the extent to which Plant can respond to their
     claims.  Plant cannot identify any party that will be
     prejudiced.

                    About Plant Insulation Co.

Plant Insulation Co., formerly known as both Plant Asbestos
Company and Asbestos Company of California, was formed to engage
in the business of selling, installing and repairing asbestos,
brick, cement, concrete, stone and all other types of fire
proofing and insulating materials.  From January 1948 through the
1990s, Plant was the exclusive Northern California distributor and
contract applicator of Fibreboard Corp.'s "Pabco" and later
"CalTemp" brand high-temperature pipe and block insulation.  At
all times through about September 1971, the Fibreboard products
contained asbestos.

Plant Insulation Co. filed a Chapter 11 petition on May 20, 2009
(Bankr. N.D. Calif. Case No. 09-31347) in San Francisco to resolve
asbestos personal-injury claims arising from products it stopped
selling and installing about 1972.


PLANT INSULATION: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Plant Insulation Company
        c/o Law Offices of Travis & Pon
        2271 California Street
        San Francisco, CA 94115
        Tel: (415) 923-1200

Bankruptcy Case No.: 09-31347

Type of Business: The Debtor provides insulation products and
services.

Chapter 11 Petition Date: May 20, 2009

Court: United States Bankruptcy Court
       Northern District of California (San Francisco)

Judge: Thomas E. Carlson

Debtor's Counsel: Michaeline H. Correa, Esq.
                  Jones Day
                  555 California St. 26th Fl
                  San Francisco, CA 94104
                  (415) 875-5897
                  Email: mcorrea@jonesday.com

                  Peter J. Benvenutti, Esq.
                  Jones Day
                  555 California St. 26th Fl.
                  San Francisco, CA 94104
                  (415) 875-5826
                  Email: pjbenvenutti@JonesDay.com

                  Tobias S. Keller, Esq.
                  Jones Day
                  555 California St. 26th Fl.
                  San Francisco, CA 94104
                  (415) 626-3939
                  Email: tkeller@jonesday.com

Estimated Assets: $500 million to $1 billion

Estimated Debts:  $500 million to $1 billion

The Debtor's Largest Unsecured Creditors:

   Entity                      Nature of Claim   Claim Amount
   ------                      ---------------   ------------

Christine Collins              Judgment            $1,920,815
C/o Steve Kazan, Esq.
Kazan, McClain, et al.,
171 12th st., Suite 300
Oakland, CA 94607

James M. Harris                Unpaid Settlement   $1,535,155
C/o Paul & Hanley
5716 Corsa Ave., Suite 203
Westlake Village, CA 91362

Franklin Yancy                 Unpaid Settlement   $1,064,736
C/o Paul & Hanley
5716 Corsa Ave., Suite 203
Westlake Village, CA 91362



Nicholas Ernser                Asbestos personal     Unstated
                               injury and/or
                               wrongful death

James Strauss                  Asbestos personal     Unstated
                               injury and/or
                               wrongful death

Gina Bennett                   Unpaid Settlement     $375,000

Jim Sullivan Whinery           Unpaid Settlement     $150,000

Zelina C. Hanson               Unpaid Settlement      $75,000

Carol A. White                 Unpaid Settlement      $90,000

Ronald Silva                   Asbestos personal     Unstated
                               injury and/or
                               wrongful death

Karen Garner                   Asbestos personal     Unstated
                               injury and/or
                               wrongful death


Donald Henderson               Asbestos personal     Unstated
                               injury and/or
                               wrongful death


Darden Lyles                   Asbestos personal     Unstated
                               injury and/or
                               wrongful death

Joe Radley                     Asbestos personal     Unstated
                               injury and/or
                               wrongful death


Allan Edwards                  Asbestos personal     Unstated
                               injury and/or
                               wrongful death


Robert Bachman                 Asbestos personal     Unstated
                               injury and/or
                               wrongful death

Raymund Jenkins                Asbestos personal     Unstated
                               injury and/or
                               wrongful death

Linda Seiler                   Asbestos personal     Unstated
                               injury and/or
                               wrongful death

Tommy Hughes                   Asbestos personal     Unstated
                               injury and/or
                               wrongful death

Noble Morris                   Asbestos personal     Unstated
                               injury and/or
                               wrongful death


The petition was signed by David J. Gordon, president and CEO.


POTTER'S LANDSCAPING: Case Summary & 24 Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: Potter's Landscaping LLC
        359 Paoli Pike
        Malvern, PA 19355-3309

Bankruptcy Case No.: 09-13791

Chapter 11 Petition Date: May 21, 2009

Court: United States Bankruptcy Court
       Eastern District of Pennsylvania (Philadelphia)

Debtor's Counsel: John Albert Wetzel, Esq.
                  One South Church Street, Suite 400
                  West Chester, PA 19382
                  Tel: (610) 692-9500
                  Fax: (610) 692-4936
                  Email: jwetzel@swartzcampbell.com

Total Assets: $355,825

Total Debts: $3,387,333

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

          http://bankrupt.com/misc/paeb09-13791.pdf

The petition was signed by Francis Smith, member and manager of
the Company.


PRESERVE LLC: Wants Plan Filing Period Extended to September 23
---------------------------------------------------------------
The Preserve, LLC, asks the U.S. Bankruptcy Court for the Central
District of California to extend its exclusive period to propose a
plan until September 23, 2009, and its exclusive period to solicit
acceptances of said plan to November 23, 2009.

This is second extension requested by the Debtor in this case.

The Debtor states that it requires additional time to formulate
its reorganization plan due "in substantial part" to the delaying
tactics employed by Point Center Financial in the Point Center
Litigation and the as yet unresolved matter of the California
Environmental Quality Act (CEQA) Challenge.

                   Point Center Litigation

The dispute with Point Center revolves around the nature, extent
and validity of the interest Point Center claims as the purported
"agent" for other investors in the approximately 700 acres of real
property within the "Legacy Highlands" project in West Beaumont,
in California, which is the Debtor's most valuable asset.

Prior to the Petition Date, in September 2006, the Debtor entered
into a loan transaction arranged by Point Center for a $39,000,000
fully funded development loan with 24 months of draws, and was
promised 2 one-year extensions (to extend the loan to September
2010), secured by a Deed of Trust on the Legacy Highlands project.

Pursuant to the loan terms, $9,650,000 would be retained by Point
Center as a 24-month interest reserve.  In addition, a further
soft cost holdback of $7,251,736 was to be placed in a trust
account on behalf of the Debtor.  Point Center was paid a loan
broker fee of $2,340,000 which was calculated based upon a fully
funded $39 million loan.

In October 2007 the Debtor was advised by Point Center that the
loan was not fully funded as previously represented and that there
was a shortfall of approximately $7,675,980.  As a direct result
of the missing funds of approximately $7,675.890, there were no
funds available after the tenth draw to pay for "soft costs" or
related interest reserves.

A lawsuit was filed by the Debtor against Point Center and others
in the Superior Court of California, County of Riverside relating
to the transaction which is the subject matter of that claimed
interest prior to the Petition Date.

The Debtor is asserting claims for significant monetary damages
which necessarily will impact the claim filed by Point Peter and
its treatment under a plan once a dialog with true investors is
opened.

The case is presently before the Bankrupty Court as a result of a
Notice of Removal filed by the defendants on October 30, 2008.  A
second status conference is set for May 27, 2009, at 2:00 p.m.
The Debtor anticipates that the discovery problems will be
addressed at that time.

                         CEQA Challenge

The Debtor has been advised by its professionals and consultants
that it is likely that the correction activities regarding the
portions of CEQA's requirements that were found wanting can be
completed within the next 4 to 6 months and then submitted to the
Riverside Superior Court for confirmation.  The Debtor believes
that the CEQA Challenge will be resolved within the next 4 to 6
months either through corrective actions with the City and the
Superior Court or through a settlement with the CEQA Challenge
plaintiffs.

Riverside, California-based The Preserve, LLC, is in the business
of acquiring and making real estate investments.  The Company
filed for Chapter 11 relief on Sept. 25, 2008 (Bankr. C.D. Calif.
No. 08-23006).  Jeffrey W. Broker, Esq., at Broker & Associates
Professional Corporation represents the company as counsel.  The
company listed assets of $100 million to $500 million and debts of
$10 million to $50 million.


PRINCETON COMMUNITY: Moody's Upgrades Bond Rating to 'Ba3'
----------------------------------------------------------
Moody's Investors Service has upgraded Princeton Community
Hospital's bond rating to Ba3 from B1.  The rating applies to
$39.6 million of outstanding rated debt (listed at the conclusion
of this report) issued by the City of Princeton, West Virginia.
The rating upgrade reflects improvement in operating performance
and cash position in FY 2008 and the successful
closure/reconfiguration of the loss generated at the St. Luke's
facility, indicating an improved credit position over the last
several years.  The outlook remains stable.

Legal Security: The bonds are secured by a pledge of gross
revenues of PCH

Interest Rate Derivatives: None

                            Strengths

* A leading 50% market share in Mercer County

* Improved operating performance in FY 2008 with a peak $13.8
  million operating cash flow (12.2% margin) from $8.3 million
   (6.8% margin) in FY 2007; although through 8-months FY 2009,
  performance has shown some weakening but still favorable with
  operating cash flow of $5.8 million (7.7% margin)

* Increased cash flow generation in FY 2008 resulted in improved
  debt service coverage ratios with 2.9 times Moody's adjusted
  maximum annual debt service coverage and 3.0 times debt-to-
  cashflow

* Unrestricted cash and investments increased to approximately
  $28.4 million (101 days cash on hand and 70% cash-to-debt) at
  fiscal year end 2008; As of February 28, 2009, unrestricted
  liquidity has declined to approximately $25.3 million (87 days
  cash on hand and 55% cash-to-debt)

* All fixed rate debt outstanding

                            Challenges

* Operating in a weak demographic service area characterized by
  declining population (2.3% decline from 2000 to 2008) and low
  median income levels compared to state and national levels

* High dependence on government payors and self pay (Medicare and
  Medicaid combined represent 64% and Self pay represents 6% of
  gross revenues)

* History of variable utilization trends, although some inpatient
  volume growth noted in FY 2008 and has continued through 8-
  months FY 2009; outpatient visit volume continues to be strong
  as result of increases in lab and diagnostic imaging services

* Despite improved trend line of operating performance and
  strengthened balance sheet measures over the last several years,
  financial performance exhibits volatility

                   Recent Developments/Results

Following softer operating performance in FY 2007, PCH posted a
strong and improved operating income (adjusted for non-recurring
items) of $5.9 million (5.2% margin) and operating cash flow of
$13.8 million (12.2% margin) from $290,000 (-0.2% margin)
operating loss and $8.3 million operating cash flow (6.8% margin)
in FY 2007.  The improved performance was attributed to the
closure of St. Luke's Hospital, price increases of 5%, and good
volume growth for inpatient and outpatient services.  Inpatient
volume grew by 1.6% from a decline of 1.3% in FY 2007.  Outpatient
visit volume increased by a strong 11.7% from 4.7% in FY 2007,
primarily for lab and diagnostic imaging services.  However,
through 8-months FY 2009, which Moody's believe is more reflective
of ongoing performance, operating performance is down from the
prior year period with a reported $782,000 operating income (1.0%
margin) from $6.7 million (9.1% margin) through 8-months FY 2008.
Operating cash flow declined to a still favorable $8.7 million
(7.7% margin) through 8-months FY 2009 from $11.9 million (16.4%
margin) from the prior period.  Despite positive volume growth,
the decline in performance is driven largely by high expense
growth of 13% particularly in chemotherapy drug costs, supplies,
and health benefits.

Absolute unrestricted liquidity improved for the fourth
consecutive year to $28.4 million at FYE 2008 from $25 million at
FYE 2007 due to improved operating cash flow and cash collections.
As a result, unrestricted liquidity measures improved to 101 days
cash on hand and 70% cash-to-debt in FY 2008 from 79 days cash on
hand and 53% cash-to-debt in FY 2007.  As of February 28, 2009,
absolute unrestricted liquidity has declined slightly to $25.3
million, reducing days cash on hand to 87 days cash on hand and
63% cash-to-debt.  The decline in liquidity is primarily due to
weaker operating cash flow generation through 8-months FY 2009 and
unrealized investment losses.  PCH's unrestricted cash and
investments is currently held 80% in fixed income securities and
cash and 20% in equities with diversification among six fund
managers.  Management has no plans to change PCH's investment
strategy.

Due to strong cash flow generation in FY 2008, debt coverage
measures improved with Moody's adjusted maximum annual debt
service coverage increasing to a good 2.9 times in FY 2008 from
1.90 times in FY 2007 and debt-to-cash flow measuring an improved
and favorable 3.0 times in FY 2008 from a high 6.3 times in FY
2007.  PCH's trend of improved financial performance, coverage
measures, and balance sheet metrics (most exceeding B and Ba
rating category levels) are the primary drivers of the rating
upgrade.

Capital spending has been modest with typically less than one
times depreciation over the past several years.  In FY 2008, PCH
spent approximately $3.5 million and is budgeting to spend about
$6.0 million in FY 2009 (PCH has spent approximately $3 million
through 8-months FY 2009).  In FY 2010, PCH is projecting to spend
$8 million in capital primarily for renovations to the former St.
Luke's Hospital facility in Bluefield, WV which will be converted
into a 95-bed Psychiatric Facility, scheduled to open in January
FY 2010.  PCH has entered into a management agreement with Diamond
Healthcare Corporation, a management and consulting company
specialized in behavioral health, to oversee the operations of the
facility and will share 50% of the profits of the facility.  The
estimated cost of the project is approximately $5.5 million
primarily for renovations and will be financed from a line of
credit with Diamond Healthcare Corporation.

PCH is located in the City of Princeton in southern West Virginia
approximately nine miles from the Virginia border.  The primary
service area encompasses Mercer, McDowell, and Monroe County,
where PCH maintains 50%, 20%, and 19% market share.  PCH's primary
competitor in the region is 265-bed Bluefield Regional Medical
Center, located 20 miles away in Bluefield, West Virginia.  PCH
also experiences out migration to tertiary providers in
Charleston, West Virginia, and Roanoke, Virginia for select
services.  The service area exhibits weak demographics
characterized by declining population growth, low median income
levels compared to state and national levels and high Medicare,
Medicaid, and self-pay populations (combined accounting for 70% of
PCH's gross revenues).

                             Outlook

The stable outlook reflects improved operating performance and
strengthening of balance sheet over the past several years, and
Moody's expectation PCH will continue to generate and sustain
elevated operating cash flow to support debt service and improve
cash balance.

                 What could change the rating--UP

Growth and stability in inpatient and outpatient volume trends;
improvement in operating performance and ability to sustain
improved levels for multiple years; growth in liquidity; gain in
market share

               What could change the rating--DOWN

Volume declines; material decline in operating performance;
deterioration in liquidity; increase in debt without commensurate
increase in cash and operating cash flow; loss in market share

                          Key Indicators

Assumptions & Adjustments:

  -- Based on financial statements for Princeton Community
     Hospital Association, Inc., Subsidary, and Affiliate

  -- First number reflects audit year ended June 30, 2007

  -- Second number reflects audit year ended June 30, 2008

  -- Investment returns normalized at 6% unless otherwise noted

* Inpatient admissions: 7,972, 8,099

* Total operating revenues: $121.8 million; $113.2 million

* Moody's-adjusted net revenue available for debt service: $10.7
  million; $16.4 million

* Total debt outstanding: $48.1 million; $40.3 million

* Maximum annual debt service (MADS): $5.7 million; $5.7 million

* MADS Coverage with reported investment income: 1.5 times; 2.8
  times

* Moody's-adjusted MADS Coverage with normalized investment
  income: 1.9 times; 2.9 times

* Debt-to-cash flow: 6.2 times; 3.0 times

* Days cash on hand: 79 days; 101 days

* Cash-to-debt: 53%; 70%

* Operating margin: -0.2%; 5.2%

* Operating cash flow margin: 6.8%; 12.2%

Rated Debt (debt outstanding as of June 30, 2008)

  -- Series 1993 Hospital Revenue Bonds fixed rate ($5.6 million
     outstanding) rated Ba3

  -- Series 1999 Hospital Revenue Bonds fixed rate ($34.0 million
     outstanding) rated Ba3

The last rating action was on March 24, 2008 when the rating of
Princeton Community Hospital was upgraded to B1 from B2 and
outlook was revised to stable from positive.


RAILPOWER HYBRID: Monitor Has C$5.1 Million Bid for Assets
----------------------------------------------------------
The foreign representative of Railpower Hybrid Technologies, Inc.,
asks the U.S. Bankruptcy Court for the Western District of
Pennsylvania for an order authorizing the private sale of
substantially all of the debtor's assets free and clear of all
liens and encumbrances.  A hearing to consider the Sale Motion
will be held on May 28, 2009 at 2:00 p.m., in Erie, Pa., at which
higher and better offers will be considered.  The assets to be
sold consist of substantially all of the assets of the Railpower
Hybrid Technologies, Inc., and the assets of Railpower
Technologies, Inc.  The Railpower Entities have accepted, subject
to Bankruptcy Court approval, an offer of C$5,100,000.  The
foreign representative indicates that C$2,388,302 of the Purchase
Price will be allocated for Railpower Hybrid Technologies, Inc.'s
assets, and C$2,711,698 of the Purchase Price will be allocated to
Railpower Technologies, Inc.'s assets.

For more information or for a copy of the Sale Agreement, contact:

      Paul J. Cordaro, Esq.
      Campbell & Levine, LLC
      1700 Grant Building
      Pittsburgh, PA 15219,
      Telephone (412) 261-0310
      Fax (412) 261-5066
      E-mail: pjc@camlev.com

Railpower Technologies Corp. (TSX: P) -- http://www.railpower.com/
-- is engaged in the development, construction, marketing and
sales of high performance, clean locomotives and power plants for
the transportation and related industries.  Railpower has designed
and is marketing a range of locomotives for the North American low
and medium horsepower locomotive market.  It has also designed and
is marketing hybrid power plants for rubber tyred gantry cranes
(Eco-Cranes(R)).  Its technologies have broader potential and
applications in other markets and industries.

Railpower Technologies Corp. and its U.S. subsidiary, Railpower
Hybrid Technologies Corp., have obtained court protection under
the Companies' Creditors Arrangement Act in Canada pursuant to the
initial order granted by the Quebec Superior Court (No. 500-11-
035434-097).  Lawyers at McCarthy Tetrault LLP represent Railpower
in the CCAA proceedings, and Martin P. Rosenthal at Ernst & Young,
Inc., serves as the Canadian Monitor.  Mr. Rosenthal filed a
Chapter 15 petition (Bankr. W.D. Pa. Case No. 09-10198) to protect
Railpower Hybrid Technologies Corp.'s assets from U.S. creditors
on February 5, 2009, and ask the U.S. Court to recognize the CCAA
proceeding as the foreign main proceeding.


REDCORP VENTURES: Announces Reduction in Corporate Management
-------------------------------------------------------------
Redcorp Ventures Ltd. reported that pursuant to its filing
together with Redfern Resources Ltd. under the Companies'
Creditors Arrangement Act on March 4, 2009, its Chairman of the
Board, Mr. Ken Lowe, who was also a director of The Company has
resigned and its Chief Financial Officer, Mr. Mike Bardell, has
left the employ of the Company.

Since the Initial Order the Petitioners have worked closely with
the Monitor and have, among other things, held regular conference
calls between the Petitioners, the Committee of Secured Note
Holders and the Monitor, developed and commenced implementation of
a plan for putting the Tulsequah Project on a "care and
maintenance" basis, initiated proceedings in the United States
Bankruptcy Court for recognition of the Initial Order, arranged
for a central storage facility to be rented, consolidated its
equipment in that facility and developed a plan for the care of
the site to minimize environmental issues.

Implementation of that plan is subject to the Company's
forthcoming application to the Court for additional relief,
currently set for May 27, 2009, failing which it is anticipated
that a receiver will be appointed at the request of the Committee
of Secured Note Holders.

Redcorp Ventures Ltd. (CA:RDV) -- http://www.redcorp-ventures.com
and http://www.redfern.bc.ca-- is a Vancouver, British Columbia-
based mineral exploration and development company with active
projects in British Columbia, Canada and Portugal.

Redcorp and Redfern sought and were granted protection under the
Companies' Creditors Arrangement Act by order of the Supreme Court
of British Columbia on March 4, 2009.  KPMG Inc. was appointed
Monitor.


S&K FAMOUS: Will Shut Down 105 Stores; GOB Sales Has Started
------------------------------------------------------------
Austin Business Journal reports that S&K Famous Brands Inc. will
close its 105 stores.  According to Business Journal, S&K Famous
filed for Chapter 11 bankruptcy hoping to reorganize its business,
but then moved to liquidate.

As reported by the Troubled Company Reporter on May 25, 2009, S&K
Famous started a going-out-of-business sale last week.  S&K Famous
chief restructuring officer Jonathan Tibus said, "In spite of our
best efforts, the current economic climate left us with no choice
but to close down the business."

Headquartered in Glen Allen, Virginia, S & K Famous Brands, Inc. -
- http://www.skmenswear.com/-- sells men's swimwear.  The Debtor
filed for Chapter 11 protection on February 9, 2009 (Bank. E.D.
Va. Case No. 09-30805).  Lynn L. Tavenner, Esq., Paula S. Beran,
Esq., at Tavenner & Beran, PLC and McGuireWoods LLP represent the
Debtor in its restructuring efforts.  Its financial advisor is
Alvarez & Marsal North America LLC.  The Debtor's DIP Lender is
Wells Fargo Retail Finance LLC as administrative and collateral
agent.  The Debtor listed total assets of $41,440,100 and total
debts of $35,499,00.


S-TRAN HOLDINGS: Plan Filing Period Extended to June 1
------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
extended S-Tran Holdings, Inc., et al's exclusive periods to
propose a plan and solicit acceptances of that plan to June 1,
2009, and August 3, 2009, respectively.

A hearing to consider confirmation of the First Amended Plan of
Liquidation is presently scheduled for July 16, 2009.  The
deadline for the service of solicitation packages is June 1, 2009.

On April 11, 2008, the Court approved the disclosure statement
explaining the Debtors' First Amended Plan of Liquidation and
fixed the voting procedures associated with approval of the Plan.

Headquartered in Cookeville, Tennessee, S-Tran Holdings, Inc.,
provides common carrier services and specialized in less-than-
truckload shipments and also supplies overnight and second day
service to shippers in 11 states in the Southeast and Midwestern
United States.  The company and its debtor-affiliates filed for
Chapter 11 relief on May 13, 2005 (Bankr. D. Del. Case No.
05-11391).

Bruce Grohsgal, Esq., Laura Davis Jones, Esq., Michael
Seidl, Esq., and Sandra G.M. Selzer, Esq., at Pachulski Stang
Ziehl Young & Jones LLP represent the Debtors as counsel.
Christopher A. Ward, Esq., at Polsinelli Shalton Flanigan
Suelthaus, Mary E. Augustine, Esq., at Ciardi, Ciardi & Astin,
P.C., and Steven M. Yoder, Esq., at Potter Anderson & Corroon LLP,
represent the Official Committee of Unsecured Creditors as
counsel.  When the Debtors filed for protection from their
creditors, they listed total assets of $22,508,000 and total debts
of $30,891,000.


SCHIMMEL'S RESTAURANT: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Debtor: Schimmel's Restaurant, LLC
        2615 North State Street
        Jackson, MS 39216

Bankruptcy Case No.: 09-01759

Chapter 11 Petition Date: May 21, 2009

Court: United States Bankruptcy Court
       Southern District of Mississippi
       (Jackson Divisional Office)

Judge: Neil P. Olack

Debtor's Counsel: Samuel L. Begley, Esq.
                  P.O. Box 287
                  Jackson, MS 39205
                  Tel: (601) 969-5545

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

Estimated Debts: $500,001 to $1,000,000

The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.


SHANE SENTER: Files for Chapter 7 Liquidation
---------------------------------------------
Michael Hinman at Airlock Alpha reports that Shane Senter, doing
business as New Hampshire Travel Agency, has filed for Chapter 7
bankruptcy protection in the U.S. Bankruptcy Court for the
District of New Hampshire.

According to Airlock Alpha, Mr. Senter has listed up to $10,000 in
assets and $1 million to $10 million in liabilities.  Airlock
Alpha relates that Deborah Notinger, Esq., at Donchess Notinger &
Tamposi of Nashua, N.H., assists the Debtor in his restructuring
efforts.

Airlock Alpha relates that Mr. Senter was indicted in April 2009
on two counts of theft and four counts of unfair or deceptive
business practices from his failed JumpCon convention.  Airlock
Alpha notes that it is unclear why Mr. Senter filed under his
travel agency, rather than JumpCon LLC, the business entity he
conducted the convention planning under.  No entity for "New
Hampshire Travel Agency" could be found in state corporate records
in New Hampshire, Airlock Alpha states.  The report says that
state records list JumpCon to not be "in good standing."

Other than the prepaid ticket holders for JumpCon, Mr. Senter also
owes some $542,125 to a number of celebrity guests that he had to
cancel, Airlock Alpha states.

Airlock Alpha reports that a meeting with creditors is set for
June 11.


SHERIDAN GROUP: S&P Cuts Corporate Credit Rating to 'B' From 'B+'
-----------------------------------------------------------------
Standard & Poor's Ratings Service lowered its corporate credit and
senior secured debt ratings on Hunt Valley, Maryland-based The
Sheridan Group Inc., to 'B' from 'B+'.  At the same time, S&P
placed the ratings on CreditWatch with negative implications.

The ratings downgrade reflects S&P's updated view that operating
performance in 2009 will be worse than S&P previously expected.
While S&P believes management has made strides in managing
expenses, S&P is concerned that a weak operating environment will
continue to pressure earnings.

"Our ratings now assume that EBITDA in 2009 will fall in the
midteens percent area, resulting in leverage of around 5x, which
is weak for the previous rating given our current view of the
company's business profile," said Standard & Poor's credit analyst
Ariel Silverberg.  "Our expectation for 2009 performance stems
from our assumption that Sheridan will continue to experience
volume declines across all of its segments, including books and
journals, resulting in a midteens percent revenue decline in
2009," she continued.  As of March 31, 2009, adjusted debt to
EBITDA was 4.3x, and EBITDA coverage of interest was 2.1x.

The CreditWatch listing reflects the uncertain status around
Sheridan's revolving credit facility.  Standard & Poor's had
previously expected lenders to renew or significantly extend it
before its May 15, 2009, maturity date.  Current lenders extended
the facility maturity date to June 25, 2009, while the company
continues to negotiate a longer-term solution with its banks.

In resolving S&P's CreditWatch listing, S&P will monitor
management's progression with respect to negotiating a new
revolving facility, and assess the new terms of the facility.


SILICON GRAPHICS: Files Docs With SEC to Deregister Unsold Shares
-----------------------------------------------------------------
Silicon Graphics Inc. filed documents with the Securities and
Exchange Commission to deregister certain shares of the Company's
common stock.

Silicon Graphics filed three Form S-8 POS and a Form POS AM with
the SEC on May 14, six days after it closed on the sale of
substantially all of its assets -- excluding certain intellectual
property assets -- to Rackable Systems, Inc. for $42.5 million in
cash, plus the assumption of certain liabilities associated with
the acquired assets.

Silicon Graphics filed Post-Effective Amendment No. 1 to various
registration statements to:

   -- deregister all unsold shares of the Company's common stock
      pursuant to a Registration Statement declared effective by
      the SEC on February 14, 2008;

   -- deregister all shares of Company Common Stock, par value
      $0.01 per share, issuable pursuant to the April 17, 2007
      Restricted Stock Unit Award that remain unissued.  The
      relevant Registration Statement became effective on
      April 17, 2007;

   -- deregister all shares of Common Stock, par value $0.01 per
      share, issuable by the Company pursuant to the Silicon
      Graphics, Inc., Management Incentive Plan that remain
      unissued.  The relevant Registration Statement became
      effective on January 26, 2007; and

   -- deregister all shares of Common Stock, par value $0.01 per
      share, issuable by the Company pursuant to the Company's
      Management and Incentive Plan and 2007 Employee Stock
      Purchase Plan that remain unissued.  The relevant
      Registration Statement became effective on February 2,
      2008.

Headquartered in Sunnyvale, California, Silicon Graphics Inc. --
http://www.sgi.com/-- delivers an array of server, visualization,
and storage software.

This is the second bankruptcy filing for Silicon Graphics.  The
Debtors first filed for Chapter 11 on May 8, 2006 (Bankr. S.D.N.Y.
Case Nos. 06-10977 through 06-10990).  Gary Holtzer, Esq., and
Shai Y. Waisman, Esq., at Weil Gotshal & Manges LLP, represent the
Debtors in their restructuring efforts.  The Court confirmed
the Debtors' Plan of Reorganization on September 19, 2006.  When
the Debtors filed for protection from their creditors, they listed
total assets of $369,416,815 and total debts of $664,268,602.

The Company and 14 of its affiliates filed for protection for the
second time on April 1, 2009 (Bankr. S.D. N.Y. Lead Case No.
09-11701).  Mark R. Somerstein, Esq., at Ropes & Gray LLP,
represents the Debtors in their restructuring efforts.  The
Debtors proposed AlixPartners LLC as restructuring advisor;
Houlihan Lokey Howard & Zukin Capital, Inc., as financial advisor;
and Donlin, Recano & Company, Inc., as claims and noticing agent.
When the Debtors filed for protection from their creditors, they
listed $390,462,000 in total assets and $526,548,000 in total
debts as of 2008.


SL GREEN: Fitch Assigns Issuer Default Rating at 'BB+'
------------------------------------------------------
Fitch Ratings has assigned Issuer Default Ratings and outstanding
debt ratings to SL Green Realty Corp. and its subsidiary, SL Green
Operating Partnership, L.P.:

SL Green Realty Corp.

  -- IDR 'BB+'.
  -- Perpetual preferred stock 'BB-'.

SL Green Operating Partnership, L.P.

  -- IDR 'BB+';
  -- Revolving credit facility 'BB+';
  -- Senior unsecured notes 'BB+';

Fitch has affirmed the ratings of Reckson Operating Partnership,
L.P.:

Reckson Operating Partnership, L.P.

  -- IDR affirmed at 'BB+'
  -- Senior unsecured notes affirmed at 'BB+'.

Fitch has revised the Rating Outlook to Negative from Stable.

The ratings reflect Fitch's view that the consistent performance
of SLG's portfolio as evidenced by a 94.8% occupancy as of March
31, 2009, same-store NOI growth during the quarter ended March 31,
2009 of 2.5%, and unencumbered asset coverage of unsecured debt,
which at 1.4 times (x) as of March 31, 2009, based on Fitch's
calculation, provides modest protection to unsecured bondholders.

The ratings are further supported by SLG's leverage and coverage
ratios.  SLG's debt-to-recurring EBITDA ratio was 8.3x as of March
31, 2009 compared to 8.5x at Dec. 31, 2008 and 9.6x at Dec. 31,
2007, and SLG has a solid fixed-charge coverage ratio (defined as
recurring EBITDA less capital expenditures and straight-line
rents, divided by interest expense, capitalized interest, and
distributions on preferred stock) of 1.9x for the 12 months ended
March 31, 2009, up from 1.7x in 2008.

While SLG has drawn approximately $1.4 billion of its $1.5 billion
line of credit, Fitch estimates that the company has over $700
million of cash, pro forma for net proceeds of approximately $387
million from its recent common equity offering.  Fitch notes that
SLG's liquidity surplus of over $400 million, supported by a
sizeable cash balance, a manageable debt maturity schedule, and
SLG's most recent actions to reduce its common dividend and issue
equity to delever the balance sheet provide SLG with adequate
liquidity and limit refinance risk over the next two years.

The ratings also point to the strength of SLG's management team.
In addition, the company's ratios under its unsecured credit
facilities' financial covenants do not hinder the company's
financial flexibility.

Offsetting these credit positives, Fitch notes that while same
property NOI growth was positive for the quarter ended March 31,
2009, it has declined from 4.2% and 12.2% as of fourth quarter
2008 (4Q'08) and 1Q'08, respectively, while occupancy for the
Manhattan portfolio has remained relatively stable at 96.2% in
1Q'09, compared to 96.7% and 96.3% as of 4Q'08, and 1Q'08,
respectively.  Fitch anticipates further deterioration in
operating performance, as challenging New York City office
property fundamentals are likely to persist for several years.

Fitch remains concerned that SLG's usage of secured debt limits
financial flexibility and protection for unsecured creditors.
Fitch calculates that SLG's unencumbered assets - based on
undepreciated book values, to unsecured debt coverage has been
below 1.5x since 2007.  The ratings also acknowledge the volatile
Manhattan office market, where the bulk of SLG's assets exist, the
impact of the constrained credit markets and SLG's exposure to
financial services tenants, which account for 41% of SLG's
combined base rental revenues, all of which expose SLG's portfolio
to increased market risk and refinance risk, respectively.

Consistent with Fitch's criteria, 'Parent and Subsidiary Rating
Linkage' dated June 19, 2008 and available on
'www.fitchratings.com', the Reckson IDR ranks pari passu with that
of SLG due to strong legal, operational and strategic ties between
SLG and Reckson and a stronger Reckson standalone credit profile
relative to that of standalone SLG.

The two notch differential between SLG's IDR and its preferred
stock is consistent with Fitch's criteria for corporate entities
with an IDR of 'BB+' and further reflects the fact that SLG's
preferred stock does not contain covenant protections comparable
to those within debt agreements governing SLG's senior unsecured
debt obligations.

In addition, based on Fitch's criteria report, 'Equity Credit for
Hybrids & Other Capital Securities', SLG's preferred stock is 75%
equity-like and 25% debt-like since SLG's preferred stock is
perpetual and has no covenants, but has a cumulative deferral
option.  Debt plus 25% of preferred stock-to-recurring EBITDA was
8.4x as of March 31, 2009, compared with 8.6x as of Dec. 31, 2008.

The Negative Outlook centers on the weakening office property
fundamentals in Manhattan, the geographic concentration of SLG's
portfolio of office properties in only New York City, Connecticut
and Westchester, New York, SLG's modest pool of unencumbered
assets relative to its unsecured debt, and the increased potential
for refinance risk due to SLG's sizeable mortgages on single
assets.

Fitch's existing ratings and Outlook for SLG could come under
pressure if (i) Fitch-defined fixed charge coverage were to fall
to 1.5x or lower for several consecutive quarters, (ii) if SLG
were to have a liquidity shortfall, (iii) if total debt to
annualized recurring EBITDA were to increase above 10.0x and (iv)
if SLG's unencumbered asset to unsecured debt coverage ratio were
to fall below 1.1x.

Conversely, the current ratings or Outlook may improve if (i)
Fitch-defined fixed charge coverage were to remain above to 2.5x
for several consecutive quarters, (ii) if SLG were to sustain a
liquidity surplus of at least $100 million, (iii) if total debt to
annualized recurring EBITDA were to sustain below 8.5x and (iv) if
SLG's unencumbered asset to unsecured debt coverage ratio were to
sustain above 1.75x.

SLG is a self-administered and self-managed real estate investment
trust that predominantly acquires, owns, repositions and manages
Manhattan and suburban office properties.  As of March 31, 2009,
the company owned 29 New York City office properties totaling
approximately 23,211,200 square feet, and 32 suburban assets
totaling 6,986,500 sf.  SLG also held investment interests in,
eight retail properties, three development properties, and two
land interests.  SLG had $11.1 billion in total book assets and
$3.7 billion in total shareholders' equity as of March 31, 2009.


SNOQUALMIE ENTERTAINMENT: S&P Junks Issuer Credit Rating From 'B'
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its issuer credit and
senior unsecured debt ratings for the Seattle, Washington area-
based Snoqualmie Entertainment Authority to 'CCC' from 'B'.  The
ratings were removed from CreditWatch, where they were placed with
negative implications on April 2, 2009.  The rating outlook is
negative.  The Snoqualmie Entertainment Authority is an
unincorporated instrumentality of the Snoqualmie Indian Tribe,
which was created to develop and operate the Snoqualmie Casino.

"The ratings downgrade reflects significantly weaker-than-expected
operating performance in the first five months of operations (the
Snoqualmie Casino opened Nov. 6, 2008) and S&P's concern that the
property may have difficulty ramping up quickly enough to a level
of EBITDA generation that is sufficient to cover all fixed
charges," said Standard & Poor's credit analyst Melissa Long.

In addition, the Authority's capital structure includes a
furniture, fixtures, and equipment facility that contains
financial maintenance covenants that will be measured beginning in
the June 2009 quarter.  S&P does not believe the Authority will be
able to meet those covenants in the June 2009 quarter and will
need to negotiate a waiver and amendment with FF&E lenders.

The 'CCC' issuer credit rating reflects S&P's near-term liquidity
concerns (as further described in the Liquidity section of this
report), high debt levels, a narrow business focus (with only one
casino operating in a single market), and significantly weaker-
than-expected initial operating results.

The Authority does not publicly disclose its financial
information. However, operating performance since the opening five
months ago has been meaningfully below initial expectations.
Severe weather conditions in the Pacific Northwest and much
greater-than-anticipated operating costs negatively affected the
facility's initial performance.  The current weakened state of the
economy and the resulting pullback in consumer discretionary
spending also had an effect.  S&P expects the current weak
economic climate to continue through at least the next few
quarters.  As a newly opened property, the Snoqualmie Casino needs
to ramp up quickly in order for the Authority to meet its fixed
obligations.


SOURCE INTERLINK: Shareholders Want Plan Hearing Delayed 45 Days
----------------------------------------------------------------
According to Bloomberg's Bill Rochelle, a group of shareholders of
Source Interlink Cos. has asked the U.S. Bankruptcy Court for the
District of Delaware to delay the May 28 confirmation hearing for
45 days.  If the present schedule stands, the prepackaged
reorganization plan will have been confirmed in one month and one
day.

The stockholders argue that the Company's value should be tested
in the market before the plan is approved and their stock is wiped
out.

On April 28, 2009, the Company reached a restructuring agreement
to take the Company private and eliminate nearly $1 billion of its
existing debt.  To facilitate the restructuring, the Company filed
lender-approved pre-packaged Plan of Reorganization under Chapter
11 of the U.S. Bankruptcy Code.  The Plan proposes to pay holders
of term loan claims 66.4% of their allowed claims.  General
unsecured claimants will get 100% of the amount they're owed.
Holders of Senior Notes and equity securities won't get a dime.

A full-text copy of Source Interlink's plan summary is available
at no charge at:

     http://bankrupt.com/misc/SourceInterlinkPlanSummary.PDF

Bonita Springs, Florida-based Source Interlink Companies, Inc., --
http://www.sourceinterlink.com/-- is a U.S. distributor of home
entertainment products and services and one of the largest
publishers of magazines and online content for enthusiast
audiences.  Source Interlink Media, LLC publishes more than 75
magazines and 90 related Web sites.  Source Interlink Distribution
services tens of thousands of retail store locations throughout
North America distributing DVDs, music CDs, magazines, video
games, books, and related items.  In addition to distributing more
than 6,000 distinct magazine titles annually, the Company
maintains the largest in-stock catalog of CDs and DVDs in the US
-- a combined total of more than 260,000 titles.  Supply chain
relationships include consumer goods advertisers, subscribers,
movie studios, record labels, magazine, book, and newspaper
publishers, confectionary companies and manufacturers of general
merchandise.

Source Interlink Companies, Inc. and 17 affiliates filed for
bankruptcy on April 27, 2009 (Bankr. D. Del. Case No. 09-11424).
Judge Kevin Gross presides over the case.  David Eaton, Esq., and
David Agay, Esq., at Kirkland & Ellis LLP; and Laura Davis Jones,
Esq., Mark M. Billion, Esq., and Timothy P. Cairns, Esq., at
Pachulski Stang Ziehl Young Jones in Wilmington, Delaware, serve
as bankruptcy counsel.  Meolis & Company LLC serves as the
Debtors' financial advisors, while Kurtzman Carson Consultants LLC
is the Debtors' claims and notice agent.

As of April 24, 2009, the Debtors had $2,436,005,000 in total
assets and $1,995,504,000 in total debts.


SOURCECORP INC: S&P Gives Stable Outlook; Affirms 'B' Rating
------------------------------------------------------------
Standard & Poor's Ratings Services said that it revised its
outlook on SOURCECORP Inc. to stable from negative.  The 'B'
corporate credit rating is affirmed.

"The outlook revision reflects a fairly stable revenue profile
despite challenging market conditions, consistent profitability,
and adequate liquidity.  S&P's ratings on SOURCECORP reflect its
leveraged financial profile, a niche position in the large,
fragmented, business process outsourcing market, and relatively
modest annual earnings and cash flow," said Standard & Poor's
credit analyst Martha Toll-Reed.  These factors are partly offset
by a material level of recurring revenues, significant barriers to
entry and customer switching costs, and a diverse customer base.

SOURCECORP had fiscal 2008 revenues of $356 million, down 4.5%
from the prior year.  The company provides solutions that enable
its customers to automate high-volume, document-intensive workflow
processes through services that include: document
scanning/digitization, Web-based electronic document hosting and
retrieval, and customer statement processing.  In addition, the
company offers specialized services that include class action
claims administration services, and professional economic research
and litigation services.

SOURCECORP focuses its operations primarily in the financial
services, healthcare, legal, and government markets.  The majority
of its BPO solutions -- about 60% of revenues -- are contractual
and recurring in nature, with significant customer switching
costs, providing some revenue stability and predictability.
Although the company's operations are based in the U.S., it uses
international partner relationships to provide flexible, cost-
effective service solutions.

SOURCECORP's focus on building expertise within a limited number
of industry verticals helps the company achieve competitive
differentiation and greater operational scale.  SOURCECORP
experienced a significant decline in its mortgage industry
customer base over the past two years, but preserved EBITDA
through growth in other industry verticals and cost reductions.
S&P believes revenue and EBITDA growth will continue to be
constrained in the near term by the decline in the company's
remaining mortgage processing base, as well as difficult economic
conditions.  Nevertheless, S&P expects EBITDA margins (adjusted
for non-recurring expenses) will at about 20% based on
SOURCECORP's track record of expense management and consistent
profitability.


SOUTH SOUND: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: South Sound Property Development, L.L.C.
        673 Woodland Square Loop SE, Ste 310
        Lacey, WA 98503

Bankruptcy Case No.: 09-43633

Type of Business: The Debtor is engaged in the real estate
business.

Chapter 11 Petition Date: May 21, 2009

Court: United States Bankruptcy Court
       Western District of Washington (Tacoma)

Debtor's Counsel: Benjamin J. Riley, Esq.
                  Brian L Budsberg PLLC
                  1801 West Bay Drive Ste 301
                  Olympia, WA 98507
                  Tel:(360) 584-9093
                  Email: ben@budsberg.com

Estimated Assets: $10 million to $50 million

Estimated Debts:  $10 million to $50 million


The Debtor's Largest Unsecured Creditors:

   Entity                      Nature of Claim   Claim Amount
   ------                      ---------------   ------------
Architectural Glass Joint                             $95,667
5703 16th Ave. S.E. Ste B
Lacey, WA 98503

S&H Electric                   Subcontract            $51,684
855 Trosper Rd. Bldg. 108
Box 365
Olympia, WA 98512

Black Hills Excavation         Subcontract            $29,763
7216 187th Ave. SW
Yelm, WA 98597

Olympia Sheet Metal Inc.       Subcontract            $27,227

North Pacific Drywall          Subcontract            $24,805

Kell-Chuck Glass                                      $16,618

Sherwood Woodworks, Inc.       Subcontract            $14,375

Auburn Mechanical              Work performed         $13,966

Coastal Steel, Inc.           Subcontract            $10,775

Systems Solution               Subcontract            $10,083


Exterior Metals                Subcontract             $9,930

Ryan Swanson Cleveland         Subcontract             $7,741

South Central Concrete                                 $6,998

Madsen Roofing                 Subcontract             $6,695

Owens Davies et al                                     $5,833

Lakeridge Paving Company       Subcontract             $5,120

Todd Robinson Painting         Subcontract             $4,503

Puget Sound Energy                                     $4,379

Accoustics Northwest Inc.      Labor for building      $4,438

Johnson Brothers               Subcontract             $3,569

The petition was signed by Michael Weinand, managing member.


SOUTHERN AUTOMOTIVE: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Southern Automotive Marketing, Inc.
        645 Auto Center Drive
        San Bernardino, CA 92408

Bankruptcy Case No.: 09-20734

Chapter 11 Petition Date: May 20, 2009

Court: United States Bankruptcy Court
       Central District of California (Riverside)

Judge: Sheri Bluebond

Debtor's Counsel: Michael S. Kogan, Esq.
                  Ervin Cohen & Jessup LLP
                  9401 Wilshire Blvd 9th Fl
                  Beverly Hills, CA 90212-2974
                  Tel: (310) 273-6333
                  Fax: (310) 859-2325
                  Email: mkogan@ecjlaw.com

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

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

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

          http://bankrupt.com/misc/cacb09-20734.pdf

The petition was signed by Michael Graeber, president of the
Company.


STANLEY MEADOWS: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Stanley Meadows Inc.
        326 Hawksbill Road
        Stanley, VA 22851

Bankruptcy Case No.: 09-50797

Chapter 11 Petition Date: May 21, 2009

Court: United States Bankruptcy Court
       Western District of Virginia (Harrisonburg)

Judge: Chief Judge Ross W. Krumm

Debtor's Counsel: Garren Robert Laymon, Esq.
                  Magee Foster Goldsteing & Sayers PC
                  P. O. Box 404
                  Roanoke, VA 24003
                  Tel: (540) 343-9800
                  Email: glaymon@mfgs.com

                  Andrew S. Goldstein, Esq.
                  Magee Foster Goldsteing & Sayers PC
                  P. O. Box 404
                  Roanoke, VA 24003
                  Tel: (540) 343-9800
                  Fax: (540) 343-9898

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

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

The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.

The petition was signed by Vivek Prabhakar, president of the
Company.


TEREX CORP: S&P Downgrades Corporate Credit Rating to 'BB-'
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on Terex Corp., a manufacturer of equipment for the
construction, infrastructure and mining industries, to 'BB-' from
'BB'.  The outlook is negative.

"The rating action reflects continued weak end-market conditions
which appear likely to result in credit measures deteriorating
beyond our range of expectations," said Standard & Poor's credit
analyst Dan Picciotto.  The company is exposed to the highly
cyclical construction sector which has seen significant demand
declines because of the global economic downturn.  Terex's sales
were down 45% in the first quarter with the most pronounced
decline in its aerial work platform segment, which experienced a
66% decline.  Markets remain weak and credit measures are likely
to worsen meaningfully.  Still, Terex benefits from good cash
balances and its cash flow generation should benefit from working
capital reductions this year.  Nevertheless, if market conditions
remain poor, the benefits of working capital reduction will
subside and cash flow generation in future years could become
constrained.

The ratings on Westport, Conn.-based Terex reflect the company's
participation in the highly cyclical and competitive construction
equipment industry and its aggressive financial profile.  These
factors are mitigated by the company's satisfactory business
position as a major provider of construction equipment and by its
good geographic and product diversity.

Terex manufactures a broad range of equipment for the
construction, infrastructure, and mining industries.  Its business
strengths include well-known brands, low-cost products, and good
aftermarket parts sales.  It has geographic diversity, with more
than half of its sales coming from outside the U.S. Through a
number of acquisitions, Terex has grown to become a sizable global
construction equipment company.  Terex has funded acquisitions
with a combination of debt and equity to temper leverage.

Standard & Poor's Ratings Services considers Terex's financial
risk profile aggressive.  S&P expects the company to remain
acquisitive.  At March 31, 2009, total debt to EBITDA (adjusted
for estimated postretirement obligations and operating leases) was
about 2.6x and funds from operations to total debt was about 24%.
However, credit measures appear likely to deteriorate meaningfully
this year.  In addition, Terex has stated it expects to close its
acquisition of the port equipment businesses of Fantuzzi
Industries, which could add approximately $230 million in debt.
At the current rating, S&P expects Terex to maintain FFO to total
debt of 15%-20%, although metrics are likely to be volatile.  S&P
would expect any large acquisition to include an equity component,
at the current rating.

S&P could lower the ratings if headroom under covenants is limited
and the company is delayed in obtaining adequate relief.  In
addition, if Terex's operating performance continues to
deteriorate or if credit measures did not appear likely to rebound
in 2010, S&P could lower the ratings.  If, for instance, FFO were
likely to become negative and there were not significant excess
cash balances, S&P could lower the ratings.


TJ'S TREES & MORE: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: TJ's Trees & More, LLP
        PO Box 822933
        NRH, TX 76182-933

Bankruptcy Case No.: 09-42953

Chapter 11 Petition Date: May 21, 2009

Court: United States Bankruptcy Court
       Northern District of Texas (Ft. Worth)

Debtor's Counsel: Richard G. Grant, Esq.
                  7018 Primrose Lane
                  Colleyville, TX 76034
                  Tel: (214) 210-2929
                  Fax: (214) 224-0198
                  Email: rgrant@robertsandgrant.com

Estimated Assets: $100,001 to $1,000,000

Estimated Debts: $1,000,001 to $100,000,000

The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.

The petition was signed by T.J. Stankiewicz, president of the
Company.


TRONOX INC: Asks Court to Set August 12 as Claims Bar Date
----------------------------------------------------------
Tronox Inc. and its affiliates anticipate that thousands of
parties-in-interest potentially may file claims in their Chapter
11 Cases.  As listed in their statements of financial affairs and
schedules of assets and liabilities, filed March 30, 2009, with
the U.S. Bankruptcy Court for the Southern District of New York,
the Debtors have assets and liabilities in excess of $1 billion,
and thousands of known creditors with claims arising from the
Debtors' operating businesses.

Moreover, the Debtors are also burdened by a variety of
environmental, tort, pension, workers' compensation and other
post-employment liabilities arising from discontinued chemical,
refining, coal, nuclear, offshore contract drilling, and other
businesses that were formerly conducted by Kerr-McGee Corporation
as a result of the Debtors' spin off from Kerr-McGee in 2006.
Thus, the Debtors anticipate that thousands of parties-in-
interest potentially may file claims against them related to the
Legacy Businesses, in addition to the creditors and parties in
interest with claims arising from their operating businesses.

In this regard, the Debtors ask the Court to set August 12, 2009,
at 8:00 p.m. (Eastern Time) as the deadline by which proofs of
claim must be filed by persons or entities, including governmental
units, holding claims against the Debtors arising from prepetition
obligations of the Debtors.

The Debtors also ask the Court to approve the proposed Proof of
Claim Form, the proposed Bar Date Notice, and the proposed
publication notice.

The Debtors further seek the Court's authority to establish
supplemental bar dates as needed in certain circumstances upon
written consent of the Official Committee of Unsecured Creditors.
The Debtors anticipate that Supplemental Bar Dates in these
instances:

   (a) In the event the Debtors amend their Schedules, the
       Debtors ask the Court to establish the later of the
       Bar Date, or 30 days from the date on which they notify
       affected creditors of the amendment to the Schedules as
       the deadline by which the creditors may file a Proof of
       Claim.

   (b) The Debtors anticipate rejecting various executory
       contracts and unexpired leases pursuant to Section 365(a)
       of the Bankruptcy Code during the Chapter 11 cases.  The
       Debtors ask the Court to establish the later of (a) the
       Bar Date, (b) the date provided in the order authorizing
       the rejection, or notice of rejection, of the contract or
       lease, or (c) if no date is provided, then 30 days after
       the date the order is entered or notice is provided, as
       the deadline by which counterparties may file a Proof of
       Claim asserting damages arising from the rejection of the
       contract or lease.

   (c) The Debtors anticipate that it may be appropriate to
       supplement the initial mailing of the Bar Date Package in
       certain instances, including when (a) other creditors
       become known to the Debtors after the initial mailing, (b)
       notices are returned by post office with forwarding
       addresses, and (c) certain parties acting on behalf of
       other parties-in-interest provide appropriate names and
       addresses of those other parties-in-interest for direct
       mailing by the Debtors.  To the extent that the Debtors
       determines that a re-mailing is appropriate under the
       circumstances, but the re-mailing cannot be accomplished
       in time to provide at least 30 days' notice of the Bar
       Date to the impacted creditors, then the Debtors proposes
       that the Court establish a deadline which provides the
       impacted creditors with at least 30 days' notice to file a
       Proof of Claim.

               Parties Excluded from the Bar Dates

As a matter of law, parties should not be required to file a
Proof of Claim on account of certain categories of Claims that
they may hold against the Debtors.  Specifically, the Bar Dates
should not apply to:

   (a) Any Claim for which a Proof of Claim has previously been
       filed against the Debtors with the Clerk of the Court in a
       form substantially similar to Official Bankruptcy Form
       No. 10;

   (b) Any Claim that is listed on the Debtors' Schedules;
       provided that (i) the Claim is not scheduled as
       "disputed," "contingent" or "unliquidated;" (ii) the
       Claimant does not disagree with the amount, nature and
       priority of the Claim as set forth in the Schedules; and
       (iii) the Claimant does not dispute that the Claim is an
       obligation of the specific Debtors as set forth in the
       Schedules;

   (c) Any Claim that has been allowed pursuant to an order of
       the Court;

   (d) Any Claim against a Debtor that has been paid in full by
       any of the Debtors or any other party;

   (e) Any Claim that is subject to specific deadlines, aside
       from those established pursuant to the Bar Date Motion,
       fixed by the Court;

   (f) Any Claim held by a Debtor in the Chapter 11 cases;

   (g) Any Claim of a current Debtors employee for Wages and
       Benefits;

   (h) Any Claim that is limited exclusively to the repayment of
       principal, interest and other applicable fees and charges
       owed under any bond or note issued by the Debtors pursuant
       to an indenture; provided that (i) an indenture
       trustee under a Debt Instrument must file one proof of
       claim, on or before the Bar Date, with respect to all of
       the amounts owed under each of the Debt Instruments and
       (ii) any holder of a Debt Claim wishing to assert a claim,
       other than a Debt Claim, arising out of or relating to a
       Debt Instrument must file a Proof of Claim on or before
       the Bar Date;

   (i) Any Claimant whose Claim is based on an interest in an
       equity security of the Debtors; provided, however, that
       any Claimant who wishes to assert a Claim against the
       Debtors based on Claims for damages or rescission based on
       the purchase or sale of an equity security, must file a
       Proof of Claim on or before the Bar Date; and

   (j) Any Claim allowable under Sections 503(b) and 507(a)(1) of
       the Bankruptcy Code as administrative expenses of the
       Debtors' Chapter 11 cases, with the exception of Claims
       allowable under Section 503(b)(9), which are subject to
       Bar Date.

The Debtors ask the Court to approve a Proof of Claim form based
on Official Form 10, a full-text copy of which is available for
free at http://bankrupt.com/misc/Tronox_ProofOfClaimForm.pdf

With the assistance of their notice and claims agent, Kurtzman
Carson Consultants LLC, the Debtors propose to provide a
"personalized" Proof of Claim to each of the creditors listed on
their Schedules.  Each Proof of Claim will include information
reflected in the Schedules as to the appropriate creditor's name,
the amount of the Claim against the applicable Debtor, the type
of Claim held by the creditor and whether the Claim is disputed,
contingent or unliquidated.

The personalized Proof of Claim Form will facilitate the
Chapter 11 cases by reducing delay, confusion and expense, and
will make possible the matching of scheduled and filed Claims
while providing scheduled creditors with an opportunity to
correct any erroneous information, Colin M. Adams, Esq., at
Kirkland & Ellis LLP, in New York, tells the Court.

            Requirements for Filing Proofs of Claim

With respect to preparing and filing of Proofs of Claim, the
Debtors propose that each Proof of Claim must:

   -- be signed by the creditor or, if the creditor is not an
      individual, by an authorized agent of the creditor;

   -- be written in English;

   -- include a Claim amount denominated in United States
      dollars;

   -- state a Claim against only one Debtor; and

   -- clearly indicate the Debtor against which the creditor is
      asserting a Claim.

Each Proof of Claim must also include supporting documentation.
If the documentation is voluminous, the Proof of Claim may
include a summary or an explanation as to why the documentation
is not available; provided that any creditor that received the
written consent will be required to transmit the writings to the
Debtors' counsel upon request no later than 10 days from the date
of the request.

All Proofs of Claim must be actually received by no later than
August 12, 2009 at 8:00 p.m. (Eastern Time) at:

       Tronox Claims Processing Center
       c/o Kurtzman Carson Consultants LLC
       2335 Alaska Ave.
       El Segundo, California 90245

Proofs of Claim may be delivered only by first class U.S. mail,
postage prepaid, in person, by courier service, or by overnight
delivery.  KCC will not accept a Proof of Claim sent by facsimile
or e-mail.  A creditor who wishes to receive acknowledgment of
receipt of its Proof of Claim Form must submit a copy of the
Proof of Claim Form and a self-addressed, stamped envelope to KCC
along with the original Proof of Claim Form.

                  Mailing of Bar Date Notices

The Debtors, with the assistance of KCC, proposes to provide
actual notice of the Bar Date to their known creditors.
Specifically, the Debtors intend to mail by first class U.S.
mail, postage prepaid, of these materials no later than five
business days after the date of entry of the Bar Date Order (a)
written notice of the Bar Date; and (b) the Proof of Claim Form
to their known creditors.  The Bar Date Notice contains
information that will notify parties of the Bar Date and inform
them as to whether they must file a Proof of Claim, the procedure
for filing a Proof of Claim, and the consequences of not timely
filing a Proof of Claim.

KCC will serve the Bar Date Package on these parties:

   (a) The U.S. Trustee;

   (b) Counsel to the agent for the Debtors' prepetition and
       postpetition secured lenders;

   (c) Counsel to the Creditors' Committee;

   (d) Counsel to the Official Committee of Equity Security
       Holders;

   (e) All persons or entities that have requested notice of the
       proceedings in the Chapter 11 cases;

   (f) All persons or entities that have filed Claims against
       the Debtors as of the date of entry of the Bar Date Order;

   (g) All creditors and other known holders of Claims against
       the Debtors as of the date of entry of the Bar Date Order,
       including all persons or entities listed in the Schedules
       as holding Claims against one or more of the Debtors;

   (h) All parties to the Debtors' executory contracts and
       unexpired leases as listed on the Schedules;

   (i) All parties to litigation with the Debtors or, where
       individual addresses are not available, through their
       counsel of record;

   (j) Anadarko Petroleum Corporation, as the successor-in-
       interest to Kerr-McGee;

   (k) The Internal Revenue Service;

   (l) The United States Attorney for the Southern District of
       New York on behalf of the Environmental Protection Agency,
       and other agencies and instrumentalities of the Unites
       States of America;

   (m) State attorneys general for states in which the Debtors'
       property is located; and

   (n) The Debtors' current employees, and former employees, to
       the extent that contact information for former employees
       is available in the Debtors' records.

A full-text copy of the proposed Bar Date Notice is available for
free at http://bankrupt.com/misc/Tronox_BarDateNO.pdf

                    Notice to Tort Plaintiffs

The Debtors are presently aware of approximately 120 tort
lawsuits pending against them related to the Legacy Businesses
inherited from Kerr-McGee.  The Debtors do not have personal
information for many of the plaintiffs in these lawsuits.
Specifically, due to the manner in which certain of these alleged
claims are handled by plaintiffs' counsel, the Debtors does not
have, and cannot reasonably obtain, the name and address of each
individual Tort Claimant.

The Debtors intend to mail the Bar Date Notice to individual Tort
Claimants where individual contact information is known and,
where individual contact information for Tort Claimants is not
known, to their counsel of record on their behalf.

The Debtors believe that these procedures will reduce the
administrative and economic burdens placed on the Debtors and
will not adversely affect the rights of the Tort Claimants,
because they will receive notice of the Bar Date through their
counsel of record in their respective lawsuits.

                       Supplemental Mailings

After the initial mailing of the Bar Date Package, the Debtors
anticipates it may be appropriate to make supplemental mailings
of notices in a number of situations, including in the event that
(a) notices are returned by the post office with forwarding
addresses, (b) certain parties acting on behalf of other parties
in interest that decline to pass along notices to these parties
and instead return the names and addresses of these parties-in-
interest to the Debtors for direct mailing, and (c) additional
creditors that become known as the result of the Bar Date
noticing process.

The Debtors ask the Court authorize supplemental mailings of the
Bar Date Notice in similar circumstances.  If the mailings are
made at any time up to 30 days in advance of the Bar Date, the
Debtors asks that the Court deem the mailings timely and deem the
Bar Date applicable to the recipient creditor.

                       Bar Date Publication

In the interest of ensuring that as many potential creditors as
possible receive notice of the Bar Dates in the Chapter 11 cases,
the Debtors intend to give additional notice of the Bar Date by
(a) a general publication notice in the national edition of The
Wall Street Journal, on one occasion, on or before July 12, 2009;
and (b) supplemental site-specific notices in local publications
in those areas in which the Debtors believe unknown creditors
with Legacy Business Claims are most likely to be located.

Based on a review, the Debtors preliminarily has determined that
there is a reasonable basis to assume that a majority of the
Legacy Claimants presently unknown to the Debtors may live in the
areas immediately surrounding 35 sites owned or operated by the
Legacy Businesses.  These sites include Manville, New Jersey and
West Chicago, Illinois.  To provide potential Legacy Claimants
near these identified sites with information regarding the Bar
Date, the Debtors intend to supplement the General Publication
Notice with 35 site-specific notices.  Each Site-Specific
Publication Notice will contain additional information regarding
the particular site at issue and will be published adjacent to
the General Publication Notice in local and regional newspapers
or periodicals within the impacted areas on one occasion on or
before July 12, 2009.

Pursuant to Bankruptcy Rule 3003(c)(2), any creditor who is
required to file a Proof of Claim in accordance with the Bar Date
Order on or before the Bar Date or Supplemental Bar Date, as
applicable, but fails to do so will be forever barred, estopped
and enjoined from asserting the claim against the Debtors.  The
Debtors will be forever discharged from any liability with
respect to the Claim, and that the creditor will not be permitted
to vote to accept or reject any plan of reorganization filed in
the Chapter 11 cases, participate in any distrib4ution on account
of the Claim, or receive further notices regarding the Claim.

                         About Tronox Inc.

Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets:
TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer
of titanium dioxide pigment, with an annual production capacity of
535,000 tonnes.  Titanium dioxide pigment is an inorganic white
pigment used in paint, coatings, plastics, paper and many other
everyday products.  The Company's four pigment plants, which are
located in the United States, Australia and the Netherlands,
supply high-performance products to approximately 1,100 customers
in 100 countries.  In addition, Tronox produces electrolytic
products, including sodium chlorate, electrolytic manganese
dioxide, boron trichloride, elemental boron and lithium manganese
oxide.

Tronox has $1.6 billion in total assets, including $646.9 million
in current assets, as at September 30, 2008.  The Company has
$881.6 million in current debts and $355.9 million in total
noncurrent debts.

Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D.
N.Y. Case No. 09-10156).  The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors.  The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.

An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases.  The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.

Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B.  Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK.  As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of
class B common stock.

Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News.  The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


TRONOX INC: Court Denies Creditors' Bid to Scrap Equity Panel
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
denied a motion by the Official Committee of Unsecured Creditors
in Tronox Incorporated's cases to dissolve the Official Committee
of Equity Security Holders Committee of Tronox without prejudice
to any party-in-interest to file a subsequent motion to dissolve
the Equity Committee or to further limit the Equity Committee's
role in the Debtors' Chapter 11 cases.

The Court ruled that the Equity Committee will not retain, at the
expense of the Debtors' estate, any professionals, including
investment bankers or financial advisors, other than a single law
firm, to represent the panel, unless the Equity Committee can
demonstrate that the Creditors' Committee or the Debtors have
unreasonably failed to provide the Equity Committee with access to
the Creditors' Committee's or the Debtors' financial advisors and
their respective non-privileged work-product as set forth in the
Court's Order granting the retention of Pillsbury Winthrop Shaw
Pittman LLP, or that failure to obtain the assistance of the
professionals would unduly prejudice the Equity Committee's rights
in the bankruptcy cases.

As reported by the Troubled Company Reporter on April 2, 2009, the
Creditors Committee asked Judge Allan L. Gropper to dissolve the
Equity Committee appointed by the U.S. Trustee on March 13, 2009,
on the grounds that the appointment is "an extraordinary remedy"
in the Debtors' Chapter 11 cases.

Brian S. Hermann, Esq., at Paul, Weiss, Rifkind, Wharton &
Garrison LLP, in New York, said that on January 29, 2009, the
Debtors and the Creditors' Committee each sent reply letters to
the U.S. Trustee expressing their oppositions to the appointment
of an equity committee.  Mr. Hermann said that, as indicated in
their Letters, the overwhelming market evidence confirm that the
Debtors appear to be hopelessly insolvent, which circumstance does
not warrant the appointment of an equity committee.  Moreover, he
argues that the Debtors' unliquidated environmental, tort and
other contingent liabilities -- which amounts are unknown --
account for the insolvency determination and became major factors
in the Debtors' decision to seek Chapter 11 relief.

Mr. Hermann said if the Debtors' cases continue on their present
trajectory, estate recoveries will largely depend on the success
of:

  (i) the asset sale necessitated by Tronox's debtor-in-
      possession credit facility; and

(ii) litigation against third parties, including, most
      prominently, Anadarko Petroleum Corporation, the
      successor-in-interest to Kerr-McGee, over responsibility
      for various of the Debtors' significant legacy
      environmental, tort and retiree liabilities inherited from
      its former parent company, Kerr-McGee.

                         About Tronox Inc.

Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets:
TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer
of titanium dioxide pigment, with an annual production capacity of
535,000 tonnes.  Titanium dioxide pigment is an inorganic white
pigment used in paint, coatings, plastics, paper and many other
everyday products.  The Company's four pigment plants, which are
located in the United States, Australia and the Netherlands,
supply high-performance products to approximately 1,100 customers
in 100 countries.  In addition, Tronox produces electrolytic
products, including sodium chlorate, electrolytic manganese
dioxide, boron trichloride, elemental boron and lithium manganese
oxide.

Tronox has $1.6 billion in total assets, including $646.9 million
in current assets, as at September 30, 2008.  The Company has
$881.6 million in current debts and $355.9 million in total
noncurrent debts.

Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D.
N.Y. Case No. 09-10156).  The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors.  The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.

An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases.  The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.

Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B.  Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK.  As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of
class B common stock.

Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News.  The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


TRONOX INC: Court Extends Plan Filing Deadline to Sept. 15
----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extended the periods within which Tronox Incorporated and its
affiliates have the exclusive right to file and solicit
acceptances of a bankruptcy plan.  The Court ruled that the
Debtors' Exclusive Filing Period is extended until September 15,
2009; and the Debtors' Exclusive Solicitation Period is extended
until November 15.

The Order is without prejudice to the Debtors' ability to seek
further extensions of the Exclusive Periods pursuant to Section
1121(d) of the Bankruptcy Code.

The Official Equity Security Holders Committee of Tronox Inc.
commented that it does not object to the Debtors' request, and
even hopes that the Debtors will use any additional time granted
by the Court to work toward formulation of a confirmable plan of
reorganization that preserves the future profitability of a
reorganized Debtors to maximize the potential value of their
estates for the benefit of all stakeholders, particularly those
most at risk with the Debtors' current forced "fire sale" approach
-- the unsecured creditors and equity security holders.

The Equity Committee asserts that the exclusivity period should
not be continued solely for the purpose of continuing a one-track
fire sale approach at the behest of the DIP lenders at the expense
and risk of all of the other stakeholders.

                          Debtors Respond

The Debtors state that their sale efforts to date evidence their
awareness of their fiduciary duty to maximize value for all
stakeholders.  To maximize value, the Debtors must maintain its
businesses as a going concern, and operating liquidity is the
cornerstone on which any going concern rests.

The Debtors relate that they engaged in an exhaustive search for
debtor-in-possession financing to ensure they would have
sufficient liquidity to operate during the Chapter 11 Cases.  The
financing that the Debtors eventually obtained provides them with
the liquidity they need to operate their businesses, while
imposing certain requirements on the Debtors, including the
requirement to commence a sale process.

The Debtors contend that their active engagement in the sale
process does not mean that they are unreceptive to viable
proposals for maximizing value that do not involve a sale,
including the possibility of alternate debtor in possession
financing.  Indeed, the Debtors assert, they are committed to
evaluating all strategies for maximizing value and have recently
engaged with their key stakeholders regarding the formulation and
evaluation of all restructuring alternatives.  However, at this
juncture, the Debtors are unaware of alternative financing sources
that would provide them with the liquidity they require on
demonstrably better terms than the DIP Facility.

Until an alternate source of financing emerges that can offer the
Debtors liquidity on terms that justify replacing the DIP
Facility, the Debtors submit that their fiduciary duty to
stakeholders requires them to make every effort to comply with the
terms of its existing financing.

In a separate order, the Court extended the time within which the
Debtors must assume or reject certain Unexpired Leases through and
including August 10, 2009, without prejudice for the Debtors to
request further extensions upon prior written consent of the
lessor.

The Order is without prejudice to the right of any lessor under
any of the Unexpired Leases to request that the Court fix an
earlier date by which the Debtors must assume or reject an
Unexpired Lease and is also without prejudice to the Debtors'
right to oppose the request.

A list of Unexpired Leases subject to the Order is available for
free at:

  http://bankrupt.com/misc/Tronox_UnexpiredLeaseORD050609.pdf

                         About Tronox Inc.

Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets:
TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer
of titanium dioxide pigment, with an annual production capacity of
535,000 tonnes.  Titanium dioxide pigment is an inorganic white
pigment used in paint, coatings, plastics, paper and many other
everyday products.  The Company's four pigment plants, which are
located in the United States, Australia and the Netherlands,
supply high-performance products to approximately 1,100 customers
in 100 countries.  In addition, Tronox produces electrolytic
products, including sodium chlorate, electrolytic manganese
dioxide, boron trichloride, elemental boron and lithium manganese
oxide.

Tronox has $1.6 billion in total assets, including $646.9 million
in current assets, as at September 30, 2008.  The Company has
$881.6 million in current debts and $355.9 million in total
noncurrent debts.

Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D.
N.Y. Case No. 09-10156).  The case is before Hon. Allan L.
Gropper.  Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors.  The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.

An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases.  The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.

Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B.  Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK.  As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of
class B common stock.

Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News.  The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


TRONOX INC: Court to Consider DIP Amendments at May 28 Hearing
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
will convene a hearing May 28, 2009, at 11:00 a.m. (Eastern Time)
to consider approval of the DIP Amendments obtained by Tronox Inc.
and its debtor affiliates.  The DIP Hearing was originally
scheduled for May 18.

Tronox and its debtor affiliates, according to Colin M. Adams,
Esq., at Kirkland & Ellis LLP, in New York, are presently not in
compliance with certain covenants and representations and
warranties in the DIP Agreement primarily as a result of two
recent developments:

   (1) insolvency filings of the Debtors' German subsidiaries,
       Tronox GmbH and Tronox Pigments GmbH, under German law on
       March 13, 2009; and

   (2) the Debtors' failure to timely provide the DIP Lenders
       with audited financial statements for the fiscal year
       ended December 31, 2008, on account of the Debtors'
       ongoing analysis and investigation of their environmental
       and other contingent reserves.

As a consequence of the German subsidiaries' insolvency
proceedings, the Debtors are not in compliance with Section
5.01(a) of the DIP Agreement, which requires them to cause each of
their subsidiaries to do "all things necessary to preserve, renew
and keep in full force and effect their legal existence."

The Debtors are also not in compliance with Section 5.04(a) of the
DIP Agreement, which requires them to deliver their audited
financial statements to the DIP Lenders within 100 days of the end
of the fiscal year.

As of April 30, 2009, the aggregate amount of borrowings
outstanding under the DIP Financing was approximately $50 million,
Mr. Adams tells the U.S. Bankruptcy Court for the Southern
District of New York.

To resolve the issues raised by the Debtors' failure to comply
with several terms of the DIP Agreement, the Debtors and their
advisors entered into good faith, arms'-length negotiations with
the DIP Lenders to waive or amend certain terms of the DIP
Agreement.  On May 4, 2009, the proposed terms of the First
Amendment were provided to the DIP Lenders for their
consideration.  On May 11, the First Amendment was approved by the
requisite number of DIP Lenders.

A full-text copy of the First Amendment is available for free at
http://bankrupt.com/misc/Tronox_FirstWaiverOfAgreement.pdf

The First Amendment provides the Debtors with these key benefits:

   (a) Waiver of Defaults: To allow the Debtors to continue to
       borrow under the DIP Agreement and to obtain necessary
       liquidity for the operation of their businesses, the First
       Amendment permanently waives any Default that may have
       occurred as a result of any non-compliance with the
       provisions of the DIP Agreement or related documents
       related to (a) the investigation of the Debtors'
       environmental and other contingent reserves, and any
       related understatement of said reserves in accordance with
       applicable accounting standards, (b) the failure to timely
       deliver audited financials and related auditors' opinions,
       reports and certifications and (c) the insolvency filings
       of the Debtors' German subsidiaries.

   (b) Borrowing Requests: To enable the Debtors to make valid
       borrowing requests prior to the conclusion of their
       analysis of their environmental and other contingent
       reserves, the First Amendment modifies certain
       representations, warranties and covenants in the DIP
       Agreement, which may be impacted by the outcome of that
       analysis.

   (c) Consolidated Financial Results: To conform to applicable
       accounting principles relating to the accounting of gains
       and losses for the Debtors' German subsidiaries, the First
       Amendment modifies the definition of "Consolidated Net
       Income," which included the net income or loss of Tronox
       Incorporated's "consolidated Subsidiaries" to exclude the
       income or loss of the German subsidiaries.

   (d) Audited Financial Statements: To allow the Debtors
       additional time to complete their investigation of their
       environmental and other contingent reserves, the First
       Amendment extends the time within which the Debtors must
       provide the DIP Lenders with audited financing statements
       for fiscal year ended December 31, 2008, until August 8,
       2009.

   (e) Financial Assistance to Foreign Subsidiaries: To enable
       the Debtors to provide additional financial assistance to
       their foreign subsidiaries, the First Amendment modifies
       Section 6.04 of the DIP Agreement, which restricted the
       aggregate principal amount of loans and advances made by
       the Debtors to their non-debtor foreign subsidiaries to
       $5 million, to allow them to make up to $7.5 million
       in the loans and advances to their foreign subsidiaries
       plus up to $5 million to their Dutch subsidiary.

   (f) DACAs: To provide the Debtors with relief occasioned by
       the Royal Bank of Canada's refusal to enter into a deposit
       account control agreement, the First Amendment modifies
       Section 5.07(a) of the Guarantee and Collateral Agreement,
       which required the Debtors to establish and maintain
       Deposit Accounts subject to control agreements for the
       benefit of the Collateral Agent, to permit the Debtors not
       to enter into a control agreement with the Royal Bank of
       Canada; provided that the balance in the account at that
       bank not exceed $250,000 at any time.

In addition, the DIP Lenders have agreed not to object to certain
of the Debtors' important operational decisions -- including the
payment of a certain secured claim held by one of the Debtors'
key vendors as part of a settlement agreement and the payment of
severance benefits to certain of the Debtors' employees in the
event of their termination pursuant to a non-insider severance
program.

In exchange for these benefits, the Debtors and the DIP Lenders
agreed to these requirements:

   (a) The affirmative covenant set forth in the DIP Agreement
       regarding the Debtors' sale efforts is modified to require
       them to execute an asset purchase agreement with respect
       to the sale of all or substantially all of its operating
       assets with a "stalking horse" bidder by May 31, 2009.  In
       addition, the Debtors will be required to file a motion
       with the Court seeking approval of the terms of the
       "stalking horse" bid and establishing procedures for a
       public auction immediately after the execution of the
       asset purchase agreement.

   (b) The Debtors will be required to hold weekly calls with the
       DIP Agent and the DIP Lenders regarding the status of the
       Chapter 11 cases and to provide the DIP Agent's legal and
       financial advisors with certain information regarding the
       asset purchase agreements received by the Debtors from
       potential bidders.

   (c) The Debtors agree to pay a waiver fee to the DIP
       Lenders, an arrangement fee to the DIP Agent, and the
       expenses of the DIP Agent as consideration for the First
       Amendment and the concessions.

The effectiveness of the First Amendment is conditioned
specifically on the Debtors (a) paying a waiver fee equal to 0.5%
of the outstanding commitment of each DIP Lender who consent to
the First Amendment by a certain deadline; (b) paying the DIP
Agent an arrangement fee of $400,000 for the arrangement,
negotiation and preparation of the First Amendment; and (c)
reimbursing the DIP Agent for all expenses incurred in connection
with the First Amendment.

Accordingly, the Debtors seek authority from Judge Allan L.
Gropper of the U.S. Bankruptcy Court for the Southern District of
New York to enter into the First Amendment and to pay certain
Amendment Fees to the DIP Agent and the DIP Lenders in connection
the Amendment.

Mr. Adams asserts that the resulting waiver and amendment is
essential to maximizing the value of the Debtors' estates.
According to Mr. Adams, the First Amendment will enable the
Debtors to borrow under the DIP Agreement, which they cannot
presently do.  Without the ability to borrow, the Debtors, he
says, would face a liquidity crisis before the end of May which
would significantly impair their ability to operate in the
ordinary course.  He adds, the First Amendment will eliminate the
serious risks posed to the Debtors' estates by the DIP Lenders'
rights under the DIP Agreement to exercise remedies against them
on account of the defaults.  These remedies include the ability
to declare the amounts presently outstanding under the DIP
Financing due and payable in full, an act which would likely
force the Debtors to liquidate, he asserts.

                       DIP Objections

(a) The Official Committee of Unsecured Creditors

The DIP Lenders seek to take advantage of certain technical
defaults under the DIP Agreement to put a stranglehold on the
Debtors' cases and foreclose the estates' ongoing pursuit of a
value maximizing alternatives to a sale, and seek to further
compensate themselves through additional amendment and arranger
fees, the Official Committee of Unsecured Creditors complains.

The Court should not countenance that blatant opportunism,
counsel for the Creditors' Committee, Brian S. Hermann, Esq., at
Paul, Weiss, Rifkind, Wharton & Garrison LLP, in New York,
argues.

According to Mr. Hermann, much has changed since the Debtors
entered into the DIP Agreement in January 2009, noting that the
DIP and credit markets have improved, as have industry
conditions, creating an opening for the Debtors to pursue
reorganization.  Mr. Hermann says it is for these reasons that
the Creditors' Committee has focused much of its efforts in
recent weeks pursuing a value maximizing reorganization
alternative with the Debtors and other key constituents in the
cases.  However, he says the Creditors' Committee needs more time
and approval of the First Amendment, with its accelerated
liquidation timeline, all but forecloses pursuit of any
alternative.

Mr. Hermann argues that the consideration provided to the DIP
Lenders under the First Amendment seems wildly disproportionate
to any alleged "harm" to the DIP Lenders resulting from the
Debtors' technical defaults.  Ironically, he points out, in their
effort to avoid liquidation in the theoretically possible, but
highly unlikely event the DIP Lenders were to accelerate and
commence exercising remedies based on the Debtors' technical
defaults, the First Amendment all but ensures the Debtors' prompt
liquidation.

According to Mr. Hermann, the Creditors' Committee is exploring
the ability to obtain replacement DIP financing to eliminate the
sale requirement contained in the DIP Agreement, and, in so
doing, permitting the Debtors more time to pursue a restructuring
alternative.  The Creditors' Committee believes that improvements
in the credit markets, as well as the market for the titanium
dioxide, warrant exploration of alternative sources of financing
that would not require an imminent sale of the Debtors'
businesses.

The Creditors' Committee takes no issue with the current sale
covenant, with which the Debtors have complied, applying to the
Debtors' use of cash collateral.  However, the Creditors'
Committee does not think it appropriate that the amended sale
covenant included in the First Amendment should survive a
refinancing of the DIP.  If replacement DIP financing is secured
in the short term, the existing DIP Financing, as amended by the
First Amendment, should not continue to haunt the Debtors'
bankruptcy cases, Mr. Hermann asserts.

(b) Official Equity Security Holders Committee

The Official Equity Security Holders Committee complains that
while the Debtors assert that the DIP Amendment Motion is
"essential to maximizing the value of the estates," they fail to
demonstrate that the significant and material concessions provided
for in the First Amendment are reasonable under current market
conditions or in any way relate to the covenant defaults at issue.

Counsel for the Equity Committee, Karen B. Dine, Esq., at
Pillsbury Winthrop Shaw Pittman LLP, in New York, argues that the
Debtors posit that they will face a liquidity crisis before the
end of May 2009 if the First Amendment is not approved, but
nowhere do the Debtors supply the amount of cash needed to remedy
the current shortfall and nowhere is there any evidence that the
Debtors have investigated whether alternative financing is
available that would not impose the new draconian terms embodied
in the First Amendment.

According to Ms. Dine, there is no discretion in the proposed
amendment for the Debtors to determine whether the bids received
justify the sale of the business at this point in time or whether
accepting the bids is the best manner to maximize the value of
these estates for all constituencies.

Ms. Dine asserts that the Debtors' agreement to a forced sale on
these terms without the Debtors retaining any discretion with
respect to the acceptance of bids is not in the best interests of
these estates and certainly not consistent with a goal of
maximizing estate value for all stakeholders.

There is no reason for the Court to permit the Debtors to enter
into an agreement that unnecessarily grants exclusive control over
the sale process to the DIP Lenders who have no duty to any other
party, Ms. Dine argues.   According to her, the sale process must
remain under the control of the Debtors and their independent
judgment to determine the course of action that maximizes the
value of the estates for all stakeholders, rather than focusing
solely on the return of value to the DIP Lenders who already have
the benefit of senior liens and other significant statutory
protections not to mention their existing security of liens in the
Debtors' substantial assets.

                         About Tronox Inc.

Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets:
TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer
of titanium dioxide pigment, with an annual production capacity of
535,000 tonnes.  Titanium dioxide pigment is an inorganic white
pigment used in paint, coatings, plastics, paper and many other
everyday products.  The Company's four pigment plants, which are
located in the United States, Australia and the Netherlands,
supply high-performance products to approximately 1,100 customers
in 100 countries.  In addition, Tronox produces electrolytic
products, including sodium chlorate, electrolytic manganese
dioxide, boron trichloride, elemental boron and lithium manganese
oxide.

Tronox has $1.6 billion in total assets, including $646.9 million
in current assets, as at September 30, 2008.  The Company has
$881.6 million in current debts and $355.9 million in total
noncurrent debts.

Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D.
N.Y. Case No. 09-10156).  The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors.  The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.

An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases.  The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.

Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B.  Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK.  As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of
class B common stock.

Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News.  The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


TRONOX INC: Says Kerr-McGee Knew Spun-Off Company Won't Survive
---------------------------------------------------------------
Debtors Tronox Incorporated, Tronox Worldwide LLC formerly known
as Kerr-McGee Chemical Worldwide LLC, and Tronox LLC formerly
known as Kerr-McGee Chemical LLC, tell the U.S. Bankruptcy Court
for the Southern District of New York that Kerr-McGee Corporation
breached its fiduciary duties to Tronox by failing to act in good
faith.  They tell the Court that New Kerr-McGee failed to disclose
to Tronox, its future bondholders, and its future shareholders all
material facts regarding Tronox, including the true nature and
scope of the Legacy Liabilities that were being foisted upon
Tronox.  New Kerr-McGee failed to act in good faith by creating
and promoting Tronox when it knew Tronox could never survive as an
independent company.  According to the Debtors, Anadarko Petroleum
Corporation and New Kerr-McGee were unjustly enriched at Tronox's
expense.

As reported by the Troubled Company Reporter, the Debtors filed an
adversary proceeding against Anadarko and Kerr-McGee seeking
recovery for the fraudulent transfer of massive actual and
contingent environmental, tort, retiree and other liabilities to
Tronox in Kerr-McGee's 2006 spin-off of its Chemical subsidiary.

The Debtors allege that Kerr-McGee Corporation created massive
actual and contingent environmental, tort, retiree, and other
liabilities during its more than 70-year history and then dumped
them on the Debtors so that Kerr-McGee's senior executives could
obtain windfall profits during a wave of lucrative consolidation
in the oil and gas industry.  In the process, the Debtors further
allege:

   -- Kerr-McGee left Tronox grossly undercapitalized and without
      sufficient assets to pay the debts;

   -- misled potential investors regarding the true magnitude of
      the Legacy Liabilities;

   -- loaded down Tronox with debt;

   -- forced Tronox to provide sweeping indemnities to New Kerr
      McGee and substantially above-market benefits to retirees;

   -- defrauded creditors; and

   -- set Tronox on a path to an inevitable bankruptcy.

According to the Debtors, Old Kerr-McGee devised a two-step
fraudulent scheme to escape its toxic past and attempt to place
its valuable oil and gas assets safely beyond the reach of the
EPA, tort claimants, and other creditors:

   (1) Old Kerr-McGee would isolate the Legacy Liabilities by
       transferring all of its valuable oil and gas assets out of
       the historical business and into a new "clean" entity.

   (2) Old Kerr-McGee then would sever the historical business
       containing the Legacy Liabilities-achieving a "clean
       break" between its valuable oil and gas assets and the
       Legacy Liabilities.

The Debtors' counsel, David J. Zott, P.C., Esq., at Kirkland &
Ellis LLP, in New York, relates that New Kerr-McGee realized that
it could never achieve its goal of a clean break from its Legacy
Liabilities with an arm's-length buyer.  So it elected to spin-off
the Chemical Business as Tronox.  A Spin-Off, Mr. Zott says,
enabled New Kerr-McGee to unilaterally dictate the terms of the
deal, avoid third-party due diligence, and eliminate standard
representations and warranties regarding its massive Legacy
Liabilities.

The two-step scheme concluded with the completion of the Spin-Off
on March 31, 2006, Mr. Zott says.  New Kerr-McGee not only
offloaded the massive Legacy Liabilities but also stripped
$785 million out of the Chemical Business tax free on the way out
the door.

Less than 90 days after the spin off, Anadarko offered to acquire
New Kerr-McGee for $18 billion on June 22, 2006.  The transaction
was approved and New Kerr-McGee became a wholly owned subsidiary
of Anadarko on August 10, 2006.

According to Mr. Zott, the primary architect of the two-step
scheme, New Kerr-McGee Chairman and Chief Executive Officer Luke
R. Corbett, personally profited by more than $200 million from the
Anadarko deal.  New Kerr-McGee Senior Vice President and Chief
Financial Officer Robert M. Wohleber, who also served as Chairman
of the Board of Tronox until the completion of the Spin-Off,
pocketed more than $20 million.  New Kerr-McGee Senior Vice
President and General Counsel Gregory F. Pilcher, another
architect of the Spin-Off, walked away with more than $9 million.
Other New Kerr-McGee senior executives also enjoyed windfalls, the
Debtors say.

As a result of the Legacy Liabilities, despite valiant efforts to
survive, including significant personnel reductions, efforts to
streamline its operations, and reductions in retiree benefits
programs, Tronox was left with no choice but to file for
bankruptcy protection on January 12, 2009.

Mr. Zott asserts that through the two-step fraudulent scheme, New
Kerr-McGee transferred valuable assets from Tronox, Tronox
Worldwide LLC, Tronox LLC and their affiliates and predecessors,
including valuable oil and gas assets and proceeds from Tronox's
secured and unsecured loans and the initial public offering of
the Class A common stock of Tronox, while simultaneously
transferring to and causing the Tronox Entities to assume
liabilities and debt, including the Legacy Liabilities and
$550 million in secured and unsecured loans.  Each of the
Transfers and Obligations was made to or for the benefit of New
Kerr-McGee.

At the time the Transfers and Obligations were undertaken, New
Kerr-McGee was the parent of the Tronox Entities.  As a result,
New Kerr-McGee was in a position to, and in fact did, control and
dominate the Tronox Entities.

According to Mr. Zott, the Tronox Entities made the Transfers and
incurred the Obligations with the actual intent to hinder, delay,
or defraud the creditors or future creditors of the Tronox
Entities.  As a result of the Transfers and Obligations, the
Tronox Entities and their creditors have been harmed.

The Tronox Entities were insolvent at the time or became insolvent
as a result of the Transfers and Obligations, Mr. Zott points out.
Tronox has multiple unsecured creditors as to whom the Transfers
and Obligations are voidable under applicable law and who hold an
unsecured claim allowable under Section 502 of the Bankruptcy
Code.

Tronox did not receive reasonably equivalent value from Anadarko
and New Kerr-McGee in exchange for payments it made or became
obligated to make for Anadarko's and New Kerr-McGee's benefit
within two years of Tronox's bankruptcy filing, the Debtors
complain.  Tronox was engaged in a transaction for which its
remaining assets were unreasonably small in relation to the
transaction.  Mr. Zott argues that at the time of the Transfers
and Obligations, the Tronox Entities intended to incur debts
beyond their ability to pay as they became due.

The Debtors allege that Anadarko conspired with New Kerr-McGee to
effectuate the fraudulent conveyance of the Transfers and
Obligations through the Spin-Off.  By agreeing to purchase New
Kerr-McGee once it shed the Legacy Liabilities, Anadarko
intentionally furthered the conspiracy by providing New Kerr-McGee
with monetary incentive to complete the Spin-Off, thereby harming
Tronox and its creditors.  Anadarko and New Kerr-McGee benefited
from the fraudulent conveyance of the Transfers and Obligations or
exercised dominion and control over the fraudulently conveyed
assets.

Anadarko, the Debtors add, knowingly provided substantial
assistance to New Kerr-McGee in the fraudulent conveyance of the
Transfers and Obligations by agreeing to purchase New Kerr-McGee
once it shed the Legacy Liabilities and by providing New Kerr-
McGee with monetary incentive to complete the Spin-Off, thereby
harming Tronox and its creditors.

Accordingly, the Debtors ask the Court to:

   (a) award them compensatory damages for all damages sustained
       as a result of New Kerr-McGee and Anadarko's wrongdoing,
       in an amount to be proved at trial, including interest;

   (b) award them appropriate restitution to Tronox from New
       Kerr-McGee and Anadarko for Defendants' unjust enrichment;

   (c) award them punitive and exemplary damages where the
       damages are available;

   (d) award them reasonable costs and expenses incurred in the
       Action, including attorneys' fees and expert fees;

   (e) equitably subordinate or equitably disallow any claims
       asserted by New Kerr-McGee and Anadarko; and

   (f) disallow any claims asserted by New Kerr-McGee and
       Anadarko.

                     Anadarko Denies Liability

According to Dow Jones Newswires, in response to recent
developments, Anadarko said that Tronox's woes were unrelated to
Anadarko and Kerr-McGee.  It noted that Tronox attributed its
deteriorating financial condition to the downturn in the housing
and construction markets.

"We conduct our business with the utmost integrity, and we are not
responsible for Tronox's financial condition," said Anadarko
spokesman John Christiansen, according to Dow Jones.

Mr. Christiansen said Tronox was solvent and adequately
capitalized at the time of its IPO, saying Tronox was able to
issue stock at about $14 per share, and also enter into a credit
facility and issue unsecured bonds.

                         About Tronox Inc.

Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets:
TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer
of titanium dioxide pigment, with an annual production capacity of
535,000 tonnes.  Titanium dioxide pigment is an inorganic white
pigment used in paint, coatings, plastics, paper and many other
everyday products.  The Company's four pigment plants, which are
located in the United States, Australia and the Netherlands,
supply high-performance products to approximately 1,100 customers
in 100 countries.  In addition, Tronox produces electrolytic
products, including sodium chlorate, electrolytic manganese
dioxide, boron trichloride, elemental boron and lithium manganese
oxide.

Tronox has $1.6 billion in total assets, including $646.9 million
in current assets, as at September 30, 2008.  The Company has
$881.6 million in current debts and $355.9 million in total
noncurrent debts.

Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D.
N.Y. Case No. 09-10156).  The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors.  The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.

An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases.  The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.

Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B.  Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK.  As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of
class B common stock.

Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News.  The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


TRONOX INC: Govt. Seeks to Join in Suit vs. Anadarko, Kerr-McGee
----------------------------------------------------------------
The United States of America seeks to intervene in the adversary
proceeding commenced by Tronox Inc. against Kerr-McGee Corp. and
Anadarko Petroleum Corp., which acquired Kerr-McGee for $18.4
billion in August 2006.

In its complaint, Tronox asserts claims to recover environmental
remediation costs it was given when spun off from Kerr-McGee in
March 2006.  Tronox and its affiliates, the U.S. government notes,
has maintained that they were forced into bankruptcy in large part
by crippling environmental liabilities at dozens, if not hundreds,
of sites throughout the country.  In its Motion to Intervene, the
U.S. government points out that the Debtors have been equally
adamant that those liabilities "are almost entirely unrelated" to
their ongoing operations, and have foreshadowed a fraudulent
conveyance action against their former parent, Kerr-McGee
Corporation, as well as Anadarko Petroleum Corporation, which
acquired Kerr-McGee almost immediately after the Debtors -- along
with all of Kerr-McGee's environmental liabilities -- were spun
off.

The U.S. government says that it has maintained from the start
that it has a unique statutory cause of action against Anadarko
and Kerr-McGee under the Federal Debt Collection Procedures Act,
28 U.S.C. Section 3301, et seq., to the extent that those parties
fraudulently avoided debts to the United States of America.

On May 12, 2009, the Debtors filed their adversary complaint -- a
compelling account of corporate greed in which Kerr-McGee sought
to "jettison [its] toxic legacy" by spinning off Tronox, so that
Kerr-McGee could be acquired by Anadarko for $18 billion, paying
rich bonuses to its senior management in the process.  According
to the Complaint, the defendants' "need to evade the Legacy
Liabilities was underscored when the U.S. Environmental Protection
Agency . . . notified Old Kerr-McGee that it was allegedly
responsible for hundreds of millions of dollars in cleanup costs
at a former wood treatment plant in Manville, New Jersey. Old
Kerr-McGee knew that Manville was just the tip of the iceberg and
that it would face similar potential liability at numerous other
sites like Manville."

Now that the suit against Anadarko and Kerr-McGee is on file, the
United States seeks to intervene to protect its interests. As the
largest creditor in Tronox' Chapter 11 cases, the U.S. Government
is obviously a party-in-interest within the meaning of 11 U.S.C. 
1109(b), and so has an "unconditional right to intervene" in this
adversary proceeding under the Second Circuit's decision in In re
Caldor Corp., 303 F.3d 161 (2d Cir. 2002). Moreover, given that
the United States has a unique statutory cause of action to the
extent that the defendants fraudulently avoided debts to the
United States - which the complaint makes plain was the case - the
Government must be permitted to assert those claims under the
FDCPA.

The U.S. Government and the Debtors have already reached an
agreement permitting the United States to file its complaint-in-
intervention and defining the Government's role in the litigation
of this action in such a way that will enhance the Debtors'
efforts to efficiently and effectively litigate this case, while
also protecting the Government's interests.  The Official
Committee of Unsecured Creditors, the Official Committee of Equity
Security Holders, and the Debtors' prepetition Agent and DIP Agent
likewise consent to the Government's intervention in this case.

The bankruptcy judge will hold a June 9 hearing to decide
whether the government can become a plaintiff in the suit.
Objections to the motion are due June 2.

                      Anadarko Denies Liability

According to Dow Jones Newswires, in response to recent
developments, Anadarko said that Tronox's woes were unrelated to
Anadarko and Kerr-McGee.  It noted that Tronox attributed its
deteriorating financial condition to the downturn in the housing
and construction markets.

"We conduct our business with the utmost integrity, and we are not
responsible for Tronox's financial condition," said Anadarko
spokesman John Christiansen, according to Dow Jones.

Mr. Christiansen said Tronox was solvent and adequately
capitalized at the time of its IPO, saying Tronox was able to
issue stock at about $14 per share, and also enter into a credit
facility and issue unsecured bonds.

                         About Tronox Inc.

Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets:
TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer
of titanium dioxide pigment, with an annual production capacity of
535,000 tonnes.  Titanium dioxide pigment is an inorganic white
pigment used in paint, coatings, plastics, paper and many other
everyday products.  The company's four pigment plants, which are
located in the United States, Australia and the Netherlands,
supply high-performance products to approximately 1,100 customers
in 100 countries.  In addition, Tronox produces electrolytic
products, including sodium chlorate, electrolytic manganese
dioxide, boron trichloride, elemental boron and lithium manganese
oxide.

Tronox has $1.6 billion in total assets, including $646.9 million
in current assets, as at September 30, 2008.  The company has
$881.6 million in current debts and $355.9 million in total
noncurrent debts.

Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D.
N.Y. Case No. 09-10156).  The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors.  The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.

An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases.  The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.

Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B.  Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK.  As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of
class B common stock.

Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News.  The newsletter tracks the chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


TRONOX INC: Seeks to Implement Severance, Incentive Programs
------------------------------------------------------------
Tronox Inc. and its affiliates are seeking authority from the U.S.
Bankruptcy Court for the Southern District of New York to
implement:

   -- The Tronox Incorporated 2009 Involuntary Termination Plan, a
      non-insider severance program; and

   -- a Key Employee Incentive Plan.

The Court will convene a hearing to consider approval of the
Motion on June 9, 2009, at 11:00 a.m. (Eastern Time).  Objections
are due June 2.

                   Non-Insider Severance Program

The commencement of the Chapter 11 cases has caused great
uncertainty and concern among certain of the Debtors' employees,
Colin M. Adams, Esq., at Kirkland & Ellis LLP, in New York, tells
the Court.

At this juncture, Mr. Adams says, it is unclear how the Chapter 11
cases will conclude and whether the Debtors will have positions
for all employees.  Employees' concerns have been exacerbated by
the fact that the Debtors are presently engaged in a process to
sell substantially all their operating assets, some of which have
already resulted in reductions in force.  In addition, the Debtors
presently do not have a uniform severance policy that is
consistently applied throughout the organization.  According to
Mr. Adams, the absence of a coherent severance policy, against the
backdrop of the Chapter 11 cases and ongoing efforts to control
costs, reinforces the perception of job insecurity among certain
of the Debtors' employees.

To counter these concerns, maintain a meaningful level of
stability, and improve focus and morale among its workforce, the
Debtors have developed a Severance Program.  Mr. Adams avers that
the Debtors have determined that, in its business judgment, the
Severance Program is in the best interests of the estates because
implementing the program will effectively and appropriately
motivate eligible non-insider employees to focus on maximizing
value during this critical period, regardless of whether the
Chapter 11 cases result in further force reductions among the
impacted employees.

Recognizing the need for a severance program, certain members of
the Debtors' senior management worked to develop an appropriate
program.  They evaluated the concerns and morale of the Debtors'
employees, the best ways to address these concerns and the
potential structure, and cost of the program.  Based on this
analysis, they developed a severance program targeted at the
Debtors' 323 eligible, non-unionized, non-insider, and salaried
employees.  They determined that the Eligible Employees were the
employees whose performance was most likely to suffer as a result
of the distractions and uncertainties attendant to the Chapter 11
cases.

Mr. Adam assures that none of the Eligible Employees is an
"insider", as that term is defined in Section 101(31) of the
Bankruptcy Code.  Nor are any of the 323 Eligible Employees
officers, directors or senior executives of Tronox with a control
position.  The Eligible Employees are, instead, at or below the
manager level.

In formulating the terms of the Severance Program, the Debtors
balanced the need to maintain the morale, focus and loyalty of
the Eligible Employees with the financial constraints under which
the Debtors now operates as a Chapter 11 debtor.  The Severance
Program is carefully structured to avoid unnecessary benefits
while focusing and aligning the Eligible Employees' goals with
those of Tronox.

The resulting Severance Program consists of:

   (a) Eligibility: Benefits will be provided only to those 323
       employees of the Debtors (i) who are not directors,
       officers or senior executives of the Debtors with the
       ability to exert control over corporate policy or decision
       making, (ii) who work on a full time basis, (iii) who are
       not unionized, and (iv) whose employment is terminated
       involuntarily by the Debtors.  Employees who are
       terminated for cause or a "Discharge" event are not
       eligible for severance pay under the Severance Program.

   (b) Severance Pay: An Eligible Employee will receive a one-
       time lump-sum payment equal to the product of (i) one week
       of the Eligible Employee's base salary multiplied by (ii)
       the number of years of continuous service; provided,
       however, the total payment may not exceed 3 months of the
       Eligible Employee's annual base salary.

   (c) Unused Vacation Pay: Terminated Eligible Employees will
       also receive payment for any unused vacation benefits in
       accordance with the company's vacation plan.

   (d) Release: Severance pay is contingent on the terminated
       Eligible Employee's execution of a general release and
       waiver of all claims against the Debtors.

   (e) Severance Mitigation: Any terminated Eligible Employee who
       (i) is reemployed within 30 days by an entity that
       purchases assets from the Debtors or (ii) receives
       severance benefits under any other agreement or program
       will not be eligible to receive severance pay under the
       Severance Program.  The amount of Severance Pay will be
       reduced by any legally required payment under the Worker
       Adjustment and Retraining Notification Act.

The Debtors anticipate two types of potential buyers for their
business: "strategic" and "financial" buyers.  The Debtors
project that if their operating assets are acquired by a
financial buyer, the Severance Program will cost approximately
$1.4 million, which includes Unused Vacation Payments to Eligible
Employees of approximately $550,000.  If the Debtors' operating
assets are acquired by a strategic buyer, the Debtors project
that the Severance Program will cost approximately $3.9 million,
which includes Unused Vacation Payments to Eligible Employees of
approximately $1.6 million.

After completing development and cost projections, the Debtors
submitted the Severance Program to Alvarez & Marsal North America
LLC for review and comment.  Thereafter, the Debtors, in
consultation with its financial and legal advisors, presented the
Severance Program, cost projections, and other related materials
to the Compensation Committee of Tronox's Board of Directors,
which approved the Severance Program on March 26, 2009.

The Debtors also provided a comprehensive information package
detailing the terms and likely costs of the Severance Program to
key stakeholders, including advisors to the prepetition and
postpetition secured lenders, the Official Committee of Unsecured
Creditors, the Official Committee of Equity Security Holders, and
the U.S. Trustee.  These parties have advised the Debtors that
they have no objection to the Severance Program.

Mr. Adams asserts that if the Debtors are not permitted to
implement the Severance Program and make severance payments to
involuntarily terminated Eligible Employees, the morale and focus
of the Eligible Employees would suffer.  He adds that given the
Debtors' status as a Chapter 11 debtor engaged in a sale process,
there is no guarantee that they could attract new employees of
comparable quality and character should existing Eligible
Employees leave the company.  And, even if otherwise available, a
new employee would lack the unique knowledge and historical
perspective held by the Eligible Employees, Mr. Adams contends.

                    Key Employee Incentive Plan

Before the Petition Date, the Debtors and their advisors engaged
in discussions with certain parties regarding potential strategic
transactions, including a sale of all or substantially all of the
Debtors' assets.  In connection with the sale discussions, the
Board of Directors of Tronox Incorporated was advised by
management and the Debtors' business and financial advisors that a
management incentive plan should be explored to properly
incentivize employees that would be critical to the sale process.

During the week of April 13, 2009, the Debtors provided an initial
Key Employee Incentive Plan proposal to counsel for the agent to
the Debtors' secured lenders, the Official Committee of Unsecured
Creditors, and the Official Committee of Equity Security Holders.
The Creditors' Committee provided a revised KEIP proposal to the
Debtors.  Following discussions and negotiations between the
Debtors, their secured lenders and the Creditors' Committee, the
Debtors modified certain terms and the structure of the KEIP.

The Debtors initially proposed a sale incentive threshold to
stakeholders based on its estimate of a probable purchase price
from prepetition sale negotiations.  After input from its secured
lenders, and the Creditors' Committee, the Sale Incentive
Threshold was increased above the Debtors' initial proposed
threshold.  With these modifications, the Creditors' Committee
supports the KEIP.  The Board voted to adopt the KEIP, as amended.

The KEIP covers key employees who (a) are likely to have the most
significant impact on Tronox's profitability, and (b) have
substantial oversight and control over any sale of the Assets. The
Participants, certain of whom are "insider[s]" within the meaning
of Section 101(31), are:

   * Dennis L. Wanlass, Interim Chairman of the Tronox Board and
     Chief Executive Officer;

   * Michael J. Foster, Vice President, General Counsel and
     Secretary;

   * John D. Romano, Vice President for Sales and Marketing;

   * Robert C. Gibney, Vice President for Human Resources and
     Corporate Affairs; and

   * Non-insider sales and management personnel who, in the
     discretion of the Debtors' senior management, deliver
     outstanding performance during the Chapter 11 cases.

Under the KEIP, each of the Participants is eligible to receive a
specified percentage of cash set aside in an incentive pool.  If
profitability-based or asset sale-based targets are met, cash is
allocated to the Incentive Pool.  The Incentive Pool is divided
into two tiers.  At the first tier, the Incentive Pool is funded
if the Debtors meet an initial set of targets.  At the second
tier, additional cash is allocated to the Incentive Pool if the
Debtors meet a second and higher set of targets.

The profitability-based portion of the KEIP is structured to
incentivize the Participants to meet profitability targets that
are based on the Debtors' 2009 EBITDAR projections, which were
established in discussions between the Debtors and the Creditors'
Committee.  Target EBITDAR will be adjusted for certain factors
beyond the control of the Participants including currency
exchange rates.  If one of the Assets is sold, the EBITDAR
associated with that asset will be subtracted from Target
EBITDAR.

The asset sale-based portion of the KEIP is based on the gross
proceeds realized from any sale of the Assets.  Amounts allocated
to the Incentive Pool would increase as the amount of
consideration received for the sale of the Assets increases.  For
purposes of the KEIP, the Assets include only the assets of the
Debtors' titanium dioxide pigment business and its electrolytic
and other specialty chemicals business.  Notably, if no sale of
the Assets is completed, or if the amounts received from the sale
of the Assets do not exceed the threshold amount, no payments
will be made under the asset sale-based portion of the KEIP.

The asset sale-based portion of the KEIP provides for incentive
payments to the participants whether the Assets are sold in one
transaction or as a series of related or unrelated transactions.

The Participants will only receive payments under the KEIP, if at
all, under one of the components of the KEIP.  To the extent the
Participants receive any payments under the profitability-based
component of the KEIP and the Assets are sold, the payments would
be credited against any payments calculated under the asset sale-
based component.  Likewise, if the Participants receive payments
under the asset sale-based component of the KEIP and the Debtors
exit Chapter 11 under a plan of reorganization, the payments
would credited against any payments calculated under the
profitability-based component.

In addition to their ordinary course activities overseeing the
Debtors' businesses and maintaining key relationships with
employees, long-standing customers and suppliers, the
Participants must work with potential purchasers to assist in the
diligence necessary for purchasers to increase their bids during
the sale process.  These managers and their skills, knowledge and
motivation are essential to achieving Target EBITDAR or the
highest or otherwise best possible value for the Businesses
through a sale, Colin M. Adams, Esq., at Kirkland & Ellis LLP, in
New York, asserts.

                         About Tronox Inc.

Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets:
TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer
of titanium dioxide pigment, with an annual production capacity of
535,000 tonnes.  Titanium dioxide pigment is an inorganic white
pigment used in paint, coatings, plastics, paper and many other
everyday products.  The Company's four pigment plants, which are
located in the United States, Australia and the Netherlands,
supply high-performance products to approximately 1,100 customers
in 100 countries.  In addition, Tronox produces electrolytic
products, including sodium chlorate, electrolytic manganese
dioxide, boron trichloride, elemental boron and lithium manganese
oxide.

Tronox has $1.6 billion in total assets, including $646.9 million
in current assets, as at September 30, 2008.  The Company has
$881.6 million in current debts and $355.9 million in total
noncurrent debts.

Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D.
N.Y. Case No. 09-10156).  The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors.  The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.

An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases.  The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.

Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B.  Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK.  As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of
class B common stock.

Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News.  The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


TXCO RESOURCES: Receives Nod to Loan $12.5-Mil. on Interim
----------------------------------------------------------
TXCO Resources Inc. reported that the U.S. Bankruptcy Court for
the Western District of Texas has granted the Company interim
authorization to borrow up to $12.5 million under its proposed
$32 million debtor-in-possession (DIP) credit facility.  The DIP
facility authorization will provide immediate liquidity to the
Company to help fund operations during the reorganization, subject
to customary conditions.

The Bankruptcy Court also approved the Company's other "first-day
motions," providing for the continued payment of employee wages
and other compensation, reimbursable employee expenses, and
medical and other benefits without interruption; the continued
payment of royalties in the ordinary course of business; and the
continued use of its cash collateral and cash management systems.

As announced in its press release on May 18, 2009, the Company and
its subsidiaries filed a voluntary petition for reorganization
under chapter 11 of the U.S. Bankruptcy Code with the Court.

The Company also reported that it was notified by The Nasdaq Stock
Market on May 18, 2009, that Nasdaq will suspend trading of the
Company's common stock on The Nasdaq Global Select Market,
effective at the opening of business on May 28, 2009, in
accordance with Nasdaq Listing Rules 5100, 5110(b), and IM 5100-1.

The notification also stated that Nasdaq will file a Form 25-NSE
with the Securities and Exchange Commission to remove the
Company's securities from listing and registration on The Nasdaq
Stock Market.  The Company does not intend to appeal Nasdaq's
decision and anticipates that its common stock will be delisted
from The Nasdaq Global Select Market.  TXCO is seeking a listing
on the OTCBB, which it believes will provide a reasonable trading
market for its shares.  In the interim, the Company's common stock
will be quoted on the Pink Sheets OTC market.

                     About TXCO Resources

TXCO Resources is an independent oil and gas enterprise with
interests in the Maverick Basin, the onshore Gulf Coast region and
the Marfa Basin of Texas, and the Midcontinent region of western
Oklahoma. TXCO's business strategy is to acquire undeveloped
mineral interests and internally developing a multi-year drilling
inventory through the use of advanced technologies, such as 3-D
seismic and horizontal drilling.  It accounts for its oil and gas
operations under the successful efforts method of accounting and
trades its common stock on Nasdaq's Global Select Market under the
symbol "TXCO."

TXCO Resources Inc. and 10 affiliates filed for Chapter 11 on May
17, 2009 (Bankr. W. D. Tex. Case No. 09-51807).  Judge Ronald B.
King handles the case.  Deborah D. Williamson, Esq., and
Lindsey D. Graham, Esq., are the Debtors' general restructuring
counsel.  Attorneys at Fulbright and Jaworski, L.L.P. are
corporate and conflicts counsel. FTI Consulting Inc. is financial
advisor, and FTI's Albert S. Conly is chief restructuring officer.
Goldman, Sachs & Co. is the financial advisors for asset sales,
while Global Hunter Securities, LLC, is the investment banker.
Administar Services Group LLC is the Debtors' investment banker.
As of March 31, 2009, TXCO has assets of $431,898,000 against
debts of $323,833,000.


US ENERGY: Proposes Aug. 26 Extension of Plan Solicitation Period
-----------------------------------------------------------------
U.S. Energy Systems Inc. and U.S. Energy Overseas Investments LLC
ask the U.S. Bankruptcy Court for the Southern District of New
York to further extend the exclusive period to solicit acceptances
of their joint liquidation plan of reorganization until Aug. 26,
2009.

The Debtors need more time to complete the liquidation of their
assets and come up with an amended plan.

Under this Plan, a Liquidation Trust would be established, and
USEY and Overseas would transfer any remaining assets -- including
any net proceeds from USEY's sale of 100% of the common stock of
USEB and any residual ownership interests in GBGH, LLC -- into the
Liquidation Trust for liquidation and the subsequent distribution
of net liquidation proceeds to USEY equity holders, according to
the Troubled Company Reporter in August 2008.

The Debtors' initial solicitation period will expire on Thursday,
May 28, 2009.

A hearing is set for May 26, 2009, at 10:00 a.m., to consider the
Debtors' extension of time.

A full-text copy U.S. Energy and U.S. Energy Overseas' Chapter 11
plan is available for free at http://ResearchArchives.com/t/s?3162

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 January 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 January 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.


VINE INVESTMENTS: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Vine Investments Inc.
        801 East Apache Blvd
        Tempe, AZ 85281

Bankruptcy Case No.: 09-11069

Chapter 11 Petition Date: May 21, 2009

Court: United States Bankruptcy Court
       District of Arizona (Phoenix)

Judge: Randolph J. Haines

Debtor's Counsel: Allan D. Newdelman, Esq.
                  80 E. Columbus Ave.
                  Phoenix, AZ 85012
                  Tel: (602) 264-4550
                  Fax: (602) 277-0144
                  Email: anewdelman@qwestoffice.net

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

Estimated Debts: $500,001 to $1,000,000

The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.

The petition was signed by Joseph Kennedt, president of the
Company.


W WALT LOWE REVOCABLE: Case Summary & 20 Largest Unsec. Creditors
-----------------------------------------------------------------
Debtor: The W. Walt Lowe Revocable Trust of October 29, 1994
        as Amended
        4601 Covert Avenue
        Evansville, IN 47714

Bankruptcy Case No.: 09-70820

Debtor-affiliates filing separate Chapter 11 petition:

        Entity                                     Case No.
        ------                                     --------
The D. Lynn Lowe Revocable Trust of October 29     09-70821

Chapter 11 Petition Date: May 21, 2009

Court: United States Bankruptcy Court
       Southern District of Indiana (Evansville)

Judge: Basil H. Lorch III

Debtor's Counsel: Marilyn Ratliff, Esq.
                  123 NW 4th St
                  Ste 304
                  Evansville, IN 47708
                  Tel: (812) 434-4918
                  Fax: (812) 424-3526
                  Email: marilyn.ratliff@gmail.com

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

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

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

      http://bankrupt.com/misc/insb09-70820.pdf

The petition was signed by W. Walt Lowe, trustee of the Company.


WINSTAR COMMUNICATIONS: Ch. 7 Trustee to Make $240MM Distribution
-----------------------------------------------------------------
Christine C. Schubert, as Chapter 7 Trustee for the estate of
Winstar Communications, Inc., asks the U.S. Bankruptcy Court for
the District of Delaware to authorize an interim distribution of
$240,861,808 with respect to the DIP Lenders' claims from the
proceeds of her settlement agreement with Lucent Technologies Inc.

In the alternative, if there are objections to the Asserted
Amount, the Chapter 7 Trustee asks the Court to authorize an
interim distribution of the undisputed portion of $240,861,808 of
the DIP Lenders' claims and establish a protocol to determine the
allowance of the remainder of the DIP Lenders' claims.

The Chapter 7 Trustee sought and obtained Bankruptcy Court
approval of a settlement agreement she entered into with Lucent,
with respect to Lucent's appeal of a December 2005 Bankruptcy
Court Order allowing the Chapter 7 Trustee to recover more than
$250 million of preferential payments Lucent received within the
90-day period before the Petition Date.  Under the parties'
settlement, Lucent will (i) dismiss its continued appeal to the
U.S. Court of Appeals for the Third Circuit and its right to seek
a further appeal to the U.S. Supreme Court; and (ii) immediately
pay to the Chapter 7 Trustee $320 million in full and final
satisfaction of the Third Circuit's affirmation of the December
2005 Order.

Sheldon K. Rannie, Esq., at Fox Rothschild LLP, in Wilmington,
Delaware, relates that as a result of the Settlement Agreement,
the Chapter 7 Trustee intends to make a distribution to pay
certain allowed secured claims asserted against Winstar's Chapter
7 estate.  Since certain creditors may  object to the amount of
the DIP Lenders' claims, the Chapter 7 Trustee avers that she is
interested in ensuring that (i) an interim distribution is
authorized with respect to the undisputed portion of the DIP
Lenders' claims so that interest does not continue to accrue and
needlessly diminish any potential recovery by other creditors, and
(ii) a process is established by the Court to resolve any dispute
promptly, so that the remaining funds from the Settlement
Agreement can be appropriately distributed at the earliest
possible juncture.

Accordingly, Mr. Rennie reminds the Court that pursuant to the
Final DIP Order, the DIP Lenders were granted valid, binding,
enforceable and perfected liens, subject to a specified carveout,
in all existing and after acquired property and assets of the
Debtors, and all proceeds, products, rents and profits, senior to
the liens of Prepetition Lenders and other creditors.  He notes
that during the course of the Chapter 7 Trustee's administration
of the Debtors' estates, she has sought and obtained Court
approval to make these interim distributions to the DIP Lenders of
amounts due under the DIP Agreement:

             Date                 Distribution
             ----                 ------------
             12/30/2002            $11,959,314
             11/28/2003            $31,953,041
             12/27/2003            $36,342,034
             08/20/2004             $1,554,905
             05/24/2004             $3,445,094

Mr. Rennie says that according to the DIP Agent, as of March 26,
2009, taking into account the previous interim distributions,
$240,861,808 is due and owing under the DIP Agreement.  A table
showing the calculation of the Asserted Amount is available for
free at http://bankrupt.com/misc/Winstar_DIPClaimsCalculation.pdf

Moreover, the Debtors are obligors under a Revolving Credit and
Term Loan Agreement entered into with The Bank of New York, as
administrative agent and collateral agent, Citicorp North America,
Inc., as syndication agent, CIBC World Markets Corp., and Credit
Suisse First Boston, as documentation agents and other lenders.
The Debtors, other than WCI Capital Corporation, jointly and
severally guaranteed all obligations under the Prepetition Credit
Agreement.  Mr. Rennie says that as of the Petition Date,
$1,372,033,000 is outstanding under the Prepetition Credit
Agreement, plus interest and fees incurred, as well as $6,021,939
arising from certain hedging transactions.

Under the Final DIP Order, the Prepetition Lenders hold the next
two places in the line for distribution of the assets of the
Chapter 7 estates behind the DIP Lenders.

Mr. Rennie stresses that the Chapter 7 Trustee, who was not
involved in the negotiation of the DIP Agreement, takes no
position on whether the Asserted Amount of the DIP Lenders'
claims has been correctly calculated, or whether any objections of
the Prepetition Lenders, if made, should be sustained.
However, consistent with her fiduciary duty to maximize the value
of the Debtors' estates, the Chapter 7 Trustee believes that she
should be permitted to make an interim distribution on the DIP
Lender claims, he points out.  He says that a Chapter 7 Trustee is
authorized to make distribution under Section 726 of the
Bankruptcy Cod and that although distributions ordinarily occur at
the end of a Chapter 7 case, a trustee may make an interim
distribution when it is in the best interests of the estate and
its creditors to do so.

Moreover, the Chapter 7 Trustee suggests these uniform procedures
in the event objections to the Motion are received:

  (1) Any Prepetition Lender or other party-in-interest wishing
      to object to payment of the Asserted Amount to the DIP
      Lenders will be required to file its objection within 10
      days after entry of an order granting the DIP Claim Interim
      Distribution Motion, including (i) its calculation as to
      what the DIP Lenders are due, and (ii) any documentary
      evidence or legal authorities on which it relies to support
      its position.

  (2) The Order on the Interim Distribution Motion will authorize
      the Chapter 7 Trustee to immediately distribute to the DIP
      Lenders the lowest calculation of what any objector asserts
      the DIP Lenders are due by the Objection Deadline based
      on all objections received by the Objection Deadline.

  (3) The DIP Lenders will be entitled to file a response to the
      Objections, setting forth any documentary evidence and
      Legal authorities upon which they rely to support the
      Asserted Amount, within 10 days of the Objection Deadline.

  (4) The Court will then advise whether it wishes to hold a
      hearing to take evidence or hear arguments from the
      creditors, and will then render a decision as to the
      correct amount of the DIP Lenders' claims.

  (5) If objections are received to the Motion, the Chapter 7
      Trustee will not make any distribution on that portion of
      the DIP Lender claims, which are disputed by any party
      unless authorized by further Court order.

        Prepetition Lenders Object to Proposed Procedures

Credit Suisse Loan Funding LLC, GSO Capital Partners, L.P. and
Solus Alternative Asset Management, L.P., as the Debtors'
Prepetition Senior Secured Lenders, oppose the proposed interim
distribution procedures.  The Objecting Prepetition Lenders hold
$694 million or 56% of the principal amount loaned to the Debtors
under the Prepetition Credit Agreement.

Dennis A. Meloro, Esq., at Greenberg Traurig, LLP, in Wilmington,
Delaware, points out that after the Debtors' estate funds are
distributed to satisfy the allowed claims of the DIP Lenders, as
well as the allowed claims for fees of the Chapter 7 Trustee and
her professionals, the remainder of the estate funds will be
dedicated to make a relatively small distribution with respect to
the Prepetition Credit Agreement Claim.  He asserts that the
Proposed Procedures require an objecting party to dispute the
Asserted Amount without the bereft of knowing any of the
contractual and legal authorities to be cited by the DIP Lenders
in support of their Asserted Amount.  He adds that the only
publicly available information supporting the DIP Lenders'
Asserted Amount is a spreadsheet of unknown origin and without
explanation.

Moreover, the Prepetition Lenders object to the DIP Lenders'
entitlement to (i) default interest and (ii) compound interest as
part of the Asserted Amount because the default interest and daily
compounding interest add $75 million to the DIP Lenders'
Claims.  "Every dollar of default interest and daily compounded
interest that is included in the DIP Lenders' Claim diminishes,
dollar for dollar, the recovery of the Prepetition Lenders," Mr.
Meloro stresses.

The Prepetition Lenders say they tried to seek amicable resolution
of their concerns with Halcyon Asset Management, LLC, the Debtors'
DIP Lender and holder of substantially all of the DIP Lenders'
claims, but Halcyon has not responded.

The Prepetition Lenders suggest that the Proposed Procedures
incorporate a language stating that right of each objecting party
to file reply, within 10 days after the DIP Lenders file their
response to the initial objection filed by the objecting party.
Absent this language, the Prepetition Lenders ask the Court to
deny the Chapter 7 Trustee's request for interim distribution of
the DIP Lenders Claims.

Subsequently, on behalf of the Chapter 7 Trustee, Seth A.
Niederman, Esq., at Fox Rothschild LLP, in Wilmington, Delaware,
filed with the Court a revised form of order on the Interim
Distribution Motion, a full-text copy of which is available for
free at http://bankrupt.com/misc/WinstarProposedDistOrder.pdf

Mr. Niederman relates that the Court held a hearing on April 23,
2009 and asked that the parties submit a revised form of order
agreeable to all parties.

Accordingly, upon review, Judge Kevin Carey approved the
Procedures for resolving objections to the DIP Lenders' Asserted
Amount.  The Court also established these deadlines:

   May 12, 2009     Date by which the Chapter 7 Trustee will have
                    made an interim distribution to the DIP
                    Lenders of the Undisputed Amount, without
                    prejudice to the right of the DIP Lenders to
                    receive other and further distribution on
                    claims as may be subsequently authorized by
                    the Court.  The Chapter 7 Trustee, however,
                    is not entitled to make any distribution in
                    respect of the Disputed Portion until the
                    Court authorizes and directs the Chapter 7
                    Trustee to do so.

   May 26, 2009     Deadline to respond to filed objections to
                    the Asserted Amount.

   June 9, 2009     Deadline to file counterreplies to the
                    Responses.

   June 18, 2009    Hearing Date on the objections, responses and
                   replies.

         Prepetition Lenders Find Interests Exorbitant

The Prepetition Lenders subsequently filed an objection, insisting
that the aggregate amount of default interest and compound
interest for $82.4 million represents a 50% bonus on top of the
$165,766,236 portion of the DIP Lenders' Asserted Amount that
comprises outstanding principal and accrued and unpaid simple
interest as of June 30, 2009.  If the Asserted Amount is to be
paid in full, the Prepetition Lenders note that they would recover
$30.2 million, which represents only 2.2% of the Prepetition
Credit Agreement Claim.

"The magnitude of the $82.4 million of default interest and
compound interest sought by the DIP Lenders can only be
interpreted as flagrant, unconscionable and unenforceable penalty
for default that bears absolutely no monetary relationship to any
actual damages possibly suffered by the DIP Lenders as a
consequence of a default," Mr. Meloro argues.

Mr. Meloro contends that the equities in these Chapter 7 cases
weigh heavily in favor of disallowing the award of default
interest and compound interest to the DIP Lenders.  He notes that
the Debtors' estates are irrevocably insolvent as evidenced in
their liabilities exceeding their assets by more than $1 billion.
He reiterates that every dollar of default interest and daily
compounded interest that is included in the DIP Lenders' Claim
diminishes, dollar for dollar, the already de minimis recovery of
the Prepetition Lenders.  Given that outcome, which results from a
senior creditor class obtaining an exorbitant premium at the
extreme expense of a junior creditor class that is recovering only
a tiny fraction of its claim, is patently inequitable, and does
not pass scrutiny under the balancing of the equities test that
the Court must apply in considering the request for allowance of
those sums, Mr. Meloro emphasizes.

The Prepetition Lenders thus leave the DIP Lenders to their proof
of burden concerning the amount and proper calculation of default
interest and compound interest, which they may be properly
entitled under the DIP Credit Agreement.

On behalf of Halcyon Fund L.P., Carl N. Kunz, III, Esq., at Morris
James LLP, in Wilmington, Delaware, tells the Court that the
parties are engaged in ongoing discovery, and a deposition of one
party-in-interest could not be scheduled and will not be completed
until May 27, 2009.  He notes that the parties believe that it is
best for the deposition to be completed and to permit information
from the deposition to be included in any response filed to the
Objection.

Accordingly, in a Court-approved stipulation, the Chapter 7
Trustee, Halcyon, Credit Suisse, GSO Capital and Solus agree to
these new deadlines for filing responses and replies:

      May 28, 2009   Deadline to file responses.
      June 11, 2009  Deadline to file replies to responses.

The June 18, 2009 hearing on the objections, responses and replies
will remain in place.

                 About Winstar Communications

Based in New York, Winstar Communications, Inc., provides
broadband services to business customers.  The company and its
debtor-affiliates filed for chapter 11 protection on April 18,
2001 (Bankr. D. Del. Case Nos. 01-01430 through 01-01462).  As
part of their chapter 11 restructuring strategy, the Debtors sold
their domestic telecom assets to IDT Winstar Acquisition, Inc.
IDT later sold the Winstar Assets to GVC Networks, LLC, resulting
in the creation of GVCwinstar, a wholly owned subsidiary of GVC
Networks.

On January 24, 2002, the Bankruptcy Court converted the Debtors'
cases to a Chapter 7 liquidation proceeding .  Christine C.
Shubert serves as the Debtors' Chapter 7 trustee.  The Chapter 7
trustee is represented by Fox Rothschild LLP and Kaye Scholer LLP.
When the Debtors filed for bankruptcy, they listed $4,975,437,068
in total assets and $4,994,467,530 in total debts.

The Debtors are currently embroiled in a legal battle before the
U.S. Court of Appeals for the Third Circuit to recover about
$200 million in payments made to Lucent Technologies.  The parties
also allege breach of contract claims.

(Winstar Bankruptcy News, Issue No. 89; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


WINSTAR COMMUNICATIONS: Ch. 7 Trustee Modifies Herrick's Role
-------------------------------------------------------------
Pursuant to Section 328 of the Bankruptcy Code, Christine C.
Schubert, as Chapter 7 Trustee for the estate of Winstar
Communications, Inc., sought and obtained authority from the U.S.
Bankruptcy Court for the District of Delaware to further modify
the retention of Herrick Feinstein LLP as her special litigation
counsel.

The Chapter 7 Trustee told the Court that she intended to expand
the retention of Herrick Feinstein to enable it to assist her in
distribution of a $320 million payment under her settlement
agreement with Lucent Technologies Inc.

The Chapter 7 Trustee and Lucent entered into the Settlement
Agreement in which Lucent will pay the Chapter 7 Trustee
$320 million in full and final satisfaction of judgment entered by
the Bankruptcy Court on December 28, 2005 with respect to
preferential payments made to Lucent.  Lucent also agreed to
dismiss its petition for rehearing and its right to further seek
an appeal before the U.S. Supreme Court.  The Bankruptcy Court
approved the $320 million Settlement on March 25, 2009.  The
Chapter 7 Trustee said the Settlement Payment will provide a
substantial benefit to the Debtors' creditors because the
Settlement Payment will provide sufficient funds to pay (i) all
Chapter 7 administrative expenses; (ii) the entire balance of the
DIP loan; and (iii) a further distribution to other creditors of
the estates.

By this Modified Retention Order, Herrick Feinstein will render
certain services to the Chapter 7 Trustee, including:

   -- assisting the Chapter 7 Trustee with the distribution of
      funds emanating from the Settlement Payment; and

   -- handling any subsequent issues which may arise in
      connection with the Lucent Settlement Agreement and
      the settlement payment.

The Chapter 7 Trustee will pay Herrick Feinstein out of the
Settlement Payment proceeds, on an hourly basis, at its current
customary hourly rates and in accordance with the original
Retention Application.

Stephen M. Rathkopf, Esq., partner at Herrick Feinstein, assures
the Court that his firm:

   (i) does not have any connection with the Chapter 7 Trustee or
       the Debtors' estates;

  (ii) does not hold or represent any interest materially adverse
       to the Chapter 7 Trustee or the Debtors' estates, their
       creditors, or any other parties-in-interest;

(iii) is a "disinterested person" as the term is defined in
       Section 101(14) of the Bankruptcy Code;

  (iv) is not an insider as the term is defined in Section
       101(31) of the Bankruptcy Code; and

   (v) has no professionals that are related to any judge of the
       Court, or the United States Trustee for the Region 3 or
       its employee.

The Modified Retention Order will not affect Herrick Feinstein's
right to payment of a contingency fee for $19,200,000 pursuant to
an order modifying its retention dated March 18, 2003, Judge Carey
held.

                 About Winstar Communications

Based in New York, Winstar Communications, Inc., provides
broadband services to business customers.  The company and its
debtor-affiliates filed for chapter 11 protection on April 18,
2001 (Bankr. D. Del. Case Nos. 01-01430 through 01-01462).  As
part of their chapter 11 restructuring strategy, the Debtors sold
their domestic telecom assets to IDT Winstar Acquisition, Inc.
IDT later sold the Winstar Assets to GVC Networks, LLC, resulting
in the creation of GVCwinstar, a wholly owned subsidiary of GVC
Networks.

On January 24, 2002, the Bankruptcy Court converted the Debtors'
cases to a Chapter 7 liquidation proceeding .  Christine C.
Shubert serves as the Debtors' Chapter 7 trustee.  The Chapter 7
trustee is represented by Fox Rothschild LLP and Kaye Scholer LLP.
When the Debtors filed for bankruptcy, they listed $4,975,437,068
in total assets and $4,994,467,530 in total debts.

The Debtors are currently embroiled in a legal battle before the
U.S. Court of Appeals for the Third Circuit to recover about
$200 million in payments made to Lucent Technologies.  The parties
also allege breach of contract claims.

(Winstar Bankruptcy News, Issue No. 89; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


WINSTAR COMMUNICATIONS: Kasowitz Represents Prepetition Lenders
---------------------------------------------------------------
Pursuant to Rule 2019(a) of the Federal Rules of Bankruptcy
Procedure, Richard F. Casher, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, tells the U.S. Bankruptcy Court for the District of
Delaware that his firm represents certain of Winstar
Communications, Inc.'s Prepetition Senior Secured Lenders.  They
are:

   * Credit Suisse Loan Funding LLC
     11 Madison Avenue
     New York, New York 10010
     Attn: Kenneth Hoffman

   * Solus Alternative Asset Management LP
     430 Park Avenue
     New York, New York 10022
     Attn: Stephen Blauner

   * GSO Capital Partners
     280 Park Avenue
     New York, New York 10017
     Attn: Jason New

Each Prepetition Senior Secured Lender is either a holder of loans
of the Debtors under the Prepetition Credit Agreement, or is
acting on behalf of, or as an investment manager for, certain of
its managed funds or accounts that are holders of loans.

Mr. Casher maintains that Kasowitz Benson does not own nor
previously owned any claim against, or interest in, the Debtors.

                 About Winstar Communications

Based in New York, Winstar Communications, Inc., provides
broadband services to business customers.  The company and its
debtor-affiliates filed for chapter 11 protection on April 18,
2001 (Bankr. D. Del. Case Nos. 01-01430 through 01-01462).  As
part of their chapter 11 restructuring strategy, the Debtors sold
their domestic telecom assets to IDT Winstar Acquisition, Inc.
IDT later sold the Winstar Assets to GVC Networks, LLC, resulting
in the creation of GVCwinstar, a wholly owned subsidiary of GVC
Networks.

On January 24, 2002, the Bankruptcy Court converted the Debtors'
cases to a Chapter 7 liquidation proceeding .  Christine C.
Shubert serves as the Debtors' Chapter 7 trustee.  The Chapter 7
trustee is represented by Fox Rothschild LLP and Kaye Scholer LLP.
When the Debtors filed for bankruptcy, they listed $4,975,437,068
in total assets and $4,994,467,530 in total debts.

The Debtors are currently embroiled in a legal battle before the
U.S. Court of Appeals for the Third Circuit to recover about
$200 million in payments made to Lucent Technologies.  The parties
also allege breach of contract claims.

(Winstar Bankruptcy News, Issue No. 89; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


WINSTAR COMMUNICATIONS: Liberty Executes $30MM Individual Bond
--------------------------------------------------------------
Liberty Mutual Insurance Company, as surety, on behalf of
Christine C. Schubert, the Chapter 7 Trustee for the estate of
Winstar Communications, Inc., executed an individual bond for
$30,000,000.

Liberty Mutual relates that in consideration of the premium
charged for the Bond, the parties agree to increase the aggregate
limit from $30,000,000 to $65,000,000.  However, Liberty Mutual
notes that the Bond will be subject to agreements, limitations and
conditions.  Moreover, Liberty Mutual clarifies that its liability
under the Bond, as amended, will not be cumulative.

The Bond rider is effective as of March 26, 2009.

                 About Winstar Communications

Based in New York, Winstar Communications, Inc., provides
broadband services to business customers.  The company and its
debtor-affiliates filed for chapter 11 protection on April 18,
2001 (Bankr. D. Del. Case Nos. 01-01430 through 01-01462).  As
part of their chapter 11 restructuring strategy, the Debtors sold
their domestic telecom assets to IDT Winstar Acquisition, Inc.
IDT later sold the Winstar Assets to GVC Networks, LLC, resulting
in the creation of GVCwinstar, a wholly owned subsidiary of GVC
Networks.

On January 24, 2002, the Bankruptcy Court converted the Debtors'
cases to a Chapter 7 liquidation proceeding .  Christine C.
Shubert serves as the Debtors' Chapter 7 trustee.  The Chapter 7
trustee is represented by Fox Rothschild LLP and Kaye Scholer LLP.
When the Debtors filed for bankruptcy, they listed $4,975,437,068
in total assets and $4,994,467,530 in total debts.

The Debtors are currently embroiled in a legal battle before the
U.S. Court of Appeals for the Third Circuit to recover about
$200 million in payments made to Lucent Technologies.  The parties
also allege breach of contract claims.

(Winstar Bankruptcy News, Issue No. 89; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


WINSTAR COMMUNICATIONS: Lucent Withdraws Petition for Rehearing
---------------------------------------------------------------
Lucent Technologies Inc. filed a petition to rehear certain issues
that it alleged the U.S. Court of Appeals for the Third Circuit
erred in holding, pursuant to the decision it entered February 3,
2009, with respect to the December 2005 Bankruptcy Court ruling on
the alleged preferential payments the Debtors made to Lucent
within the 90-day period before the Petition Date.

Subsequently, Christine C. Shubert, as Chapter 7 Trustee for the
estate of Winstar Communications, Inc., and Lucent entered into a
settlement contemplating the payment of $320 million by Lucent to
the Chapter 7 Trustee.  Under the Settlement Agreement, Lucent
also agreed to dismiss its continued appeal to the Third Circuit
and its right to seek a further appeal to the United States
Supreme Court.  Lucent told the Third Circuit that if the
Settlement Agreement is approved, it would withdraw its Petition
for Rehearing.  The U.S. Bankruptcy Court for the District of
Delaware approved the Settlement Agreement on March 25, 2009.

Accordingly, Lucent formally withdrew its Petition for Rehearing,
which has been mooted by the Settlement Agreement, on April 20,
2009.

Subsequently, the Third Circuit issued a certified judgment on
April 21, 2009 in lieu of a formal mandate.  The Certified
Judgment contains the judgment entered by Judge Sloviter,
Greenberg and Irenas of the Third Circuit on February 3, 2009,
which affirmed in part and denied in part, the order of the U.S.
District Court for the District Court of Delaware entered on
April 26, 2007, affirming the Bankruptcy Court's judgment.

Marcia M. Waldron, clerk of the Third Circuit sent a copy of the
Certified Judgment to Peter T. Dalleo, clerk of the District Court
saying that the Certified Judgment is to be treated at all
respects as a mandate.

                 About Winstar Communications

Based in New York, Winstar Communications, Inc., provides
broadband services to business customers.  The company and its
debtor-affiliates filed for chapter 11 protection on April 18,
2001 (Bankr. D. Del. Case Nos. 01-01430 through 01-01462).  As
part of their chapter 11 restructuring strategy, the Debtors sold
their domestic telecom assets to IDT Winstar Acquisition, Inc.
IDT later sold the Winstar Assets to GVC Networks, LLC, resulting
in the creation of GVCwinstar, a wholly owned subsidiary of GVC
Networks.

On January 24, 2002, the Bankruptcy Court converted the Debtors'
cases to a Chapter 7 liquidation proceeding .  Christine C.
Shubert serves as the Debtors' Chapter 7 trustee.  The Chapter 7
trustee is represented by Fox Rothschild LLP and Kaye Scholer LLP.
When the Debtors filed for bankruptcy, they listed $4,975,437,068
in total assets and $4,994,467,530 in total debts.

The Debtors are currently embroiled in a legal battle before the
U.S. Court of Appeals for the Third Circuit to recover about
$200 million in payments made to Lucent Technologies.  The parties
also allege breach of contract claims.

(Winstar Bankruptcy News, Issue No. 89; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


WR GRACE: Court Denies Banks $100MM Interest Claims Under Sec. 502
------------------------------------------------------------------
Judge Judith K. Fitzgerald of the U.S. Bankruptcy Court for the
District of Delaware ruled that the group of bank lenders, led by
their agent, JP Morgan Chase Bank, who extended prepetition loans
to W.R. Grace & Co., is not entitled to payment of postpetition
interest at default rate.

Judge Fitzgerald concluded that the Bank Lenders are not entitled
to the postpetition default rate of interest as part of their
allowed claims pursuant to Section 502 of the Bankruptcy Code
because Debtors have not been established to be solvent and Bank
Lenders are unsecured creditors that, pursuant to the proposed
plan, will be paid 100% of the principal balance of their claims
plus interest thereon at a rate greater than the nondefault rate
provided in their contracts. "Thus, as a matter of claims
allowance in the current posture of this case, Debtors' objection
to the claims with respect to default interest is sustained and
default interest is disallowed as part of the allowed claim," the
judge said.

Judge Fitzgerald, however, acknowledged, "Whether default interest
is appropriate to be paid on the Bank Lenders' allowed claims in
the context of plan confirmation must await the plan confirmation
hearing and the evidence adduced at that time."

JPMorgan filed Claim Nos. 9159 and 9168 as unsecured claims
against the W.R. Grace and its debtor affiliates and included
demands for interest that was due on the date of the filing of the
Debtors' bankruptcy.  The Debtors objected to the Claims to the
extent they seek postpetition default interest.  The Debtors
premised their objection on Sections 502(b), 105(a), 726 and 1129
of the Bankruptcy Code.

Judge Fitzgerald sustained the Debtors' objection to the Claims on
the limited Sections 502(b) and 726 grounds but deferred decision
regarding Section 1129.

Judge Fitzgerald, in a memorandum opinion, found that (i) the
Bank Lenders' presumption that the Debtors are solvent is not
established; (ii) that issues concerning whether the Debtors'
First Amended Joint Plan of Reorganization, filed in 2008 is fair
and equitable or is in the best interests of creditors must be
reserved for the plan confirmation hearing; and (iii) no evidence
presented substantiated a default on the Bank Lenders' claims.

Judge Fitzgerald also found insufficient evidence supporting the
Bank Lenders' allegations that reporting failures under the loan
documents constitute a default of a type that would trigger any
default interest provision in the loan documents.  Judge
Fitzgerald pointed out that:

   (a) the Bank Lenders did not specify the reporting
       requirements that were not met and do not deny that during
       the course of the bankruptcy cases the Debtors have
       complied with the reporting requirements of the Bankruptcy
       Code; and

   (b) the Bank Lenders, which continued to serve as lenders
       postpetition, have never, in the eight-year bankruptcy
       case, expressed dissatisfaction with the Debtors'
       reporting or filed any requests in connection with the
       reporting requirements until they responded to the
       Debtors' objection to their Claims.

Judge Fitzgerald found that the Bank Lenders are not entitled to
the postpetition default rate of interest as part of their
allowed claims pursuant to Section 502 because the Debtors have
not been established to be solvent and the Bank Lenders are
unsecured creditors that, pursuant to the proposed plan, will be
paid 100% of the principal balance of their claims plus interest
thereon at a rate greater than the non-default rate provided in
their contracts.  Thus, as a matter of claims allowance in the
current posture of the Debtors' bankruptcy cases, the Debtors'
objection to the claims with respect to default interest is
sustained and default interest is disallowed as part of the
allowed claim, Judge Fitzgerald maintained.

As a matter of law, the bankruptcy filing per se is not a
permissible basis for invoking the contract default interest
rate, Judge Fitzgerald said.  Section 365(e) prohibits
enforcement of ipso facto clauses in contracts, she noted citing
In re IT Group, Inc., Co., 302 B.R. 483, 486 (D. Del. 2003).

Judge Fitzgerald held that an unsecured creditor is not entitled
to unmatured postpetition interest unless (a) debtor is shown to
be solvent after all distributions are made, or (b) the creditor
is oversecured.  Section 502(b)(2), she said, prohibits the
allowance of unmatured interest as part of an allowed unsecured
claim.  If interest is paid with respect to an unsecured claim at
all, it is paid on an allowed claim, not as an allowed claim, she
noted.  Furthermore, non-payment of postpetition interest is not
a default.

On the issue of solvency, Judge Fitzgerald held that the Bank
Lenders cite no cases and that their research pointed them to no
authority that stands for the proposition that a debtor is
presumed to concede solvency when a proposed plan provides for
retention of interest by, or distribution to, equity.  She said
the Debtors' solvency or lack thereof has not yet been
established at this stage of the Debtors' bankruptcy cases.  The
issue of solvency, she added, concerns plan confirmation
standards and the Debtors are not yet at that stage.

Section 726(a)(5) provides that, if a debtor is solvent, interest
is to be paid at the legal rate, not at the contract default
rate.  Section 726(a)(5) is applicable to Chapter 11 cases
through Section 1129(a)(7) and provides for payment of interest
"at the legal rate" if the creditor has not accepted the plan.
Judge Fitzgerald maintains that the issue of solvency has not yet
been determined in the Debtors' bankruptcy cases.

Whether default interest is appropriate to be paid on the Bank
Lenders' allowed claims in the context of plan confirmation must
await plan confirmation hearing and the evidence adduced at that
time, Judge Fitzgerald held.

A full-text copy of Judge Fitzgerald's Memorandum is available
for free at http://bankrupt.com/misc/wrgrace_bankclaimopinion.pdf

                         About W.R. Grace

Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.

The Company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts.  The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.  Stroock &
Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors.  The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice.  David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants.  The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it.  Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.

As reported by the Troubled Company Reporter on March 11, 2009,
the Bankruptcy Court approved the disclosure statement explaining
the First Amended Chapter 11 Joint Plan of Reorganization filed by
W.R. Grace and its debtor affiliates, the Official Committee of
Asbestos Personal Injury Claimants, the Asbestos PI Future
Claimants' Representative and the Official Committee of Equity
Security Holders, and authorized Grace to begin soliciting plan
votes.

The Court scheduled a two-phase confirmation hearing:

  -- Hearings on June 22 to 25 to deal with objections by
     insurance companies; and

  -- Hearings on September 8 to 11 for objections related to
     claims from the facility in Libby, Montana.

The Chapter 11 plan is built around an April 2008 settlement for
all present and future asbestos personal injury claims, and a
subsequent settlement for asbestos property damage claims.

Parties entitled to vote on the Plan must file objections to Plan
confirmation, if any, no later than 4:00 p.m. Eastern time on
May 20, 2009.  Supplements to the Plan may be filed until May 10.

Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News.  The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates.  (http://bankrupt.com/newsstand/or 215/945-7000)


WR GRACE: Paul Weiss Represents Bank Debt Holders' Group
--------------------------------------------------------
Andrew N. Rosenberg, Esq., at Paul, Weiss, Rifkind, Wharton &
Garrison LLP, in New York, disclosed in an amended statement
pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure
that his firm represents bank debt holders of W.R. Grace & Co. in
these cases:

    * Anchorage Advisors, LLC
      610 Broadway, 6th Floor
      New York, NY 10012

    * Avenue Capital Group
      535 Madison Avenue, 14th Floor
      New York, NY 10022

    * Bass Companies
      Wells Fargo Tower
      Suite 3200
      201 Main Street
      Fort Worth Texas 76102

    * Catalyst Investment Management Co., LLC
      767 Third Avenue, 32nd Floor
      New York, NY 10017

    * Allen & Co.
      711 Fifth Avenue
      New York, NY 10022

    * Babson Capital Management, Inc.
      680 Fifth Avenue, 26th Floor
      New York, NY 10019

    * Caspian Capital Advisors, LLC
      500 Mamaroneck Avenue
      Harrison, NY 10528

    * Cetus Capital LLC
      8 Sound Shore Drive, Suite 303
      Greenwich, CT 06830

    * D.E. Shaw Laminar Portfolios, LLC
      120 West 45th Street, 39th Floor
      New York, NY 10036

    * Halcyon Asset Mgmt., LLC
      120 West 45th Street, 39th Floor
      New York, NY 10036

    * JP Morgan Chase, N.A. Credit Trading Group
      270 Park Avenue, 8th Floor
      New York, NY 10017

    * MSD Capital, L.P.
      645 Fifth Avenue, 21st Floor
      New York, NY 10022

    * Onex Debt Opportunity Fund, Ltd.
      910 Sylvan Avenue
      Englewood Cliffs, NJ 07632

    * Restoration Capital Management, LLC
      909 Third Avenue, 30th Floor
      New York, NY 10022

    * Goldman Sachs & Co.
      as ex officio member
      1 New York Plaza
      New York, NY 10004

    * Intermarket Corp.
      660 Madison Avenue, 22nd Floor
      New York, NY 10065

    * Loeb Partners Corporation
      61 Broadway, Suite 2400
      New York, NY 10006

    * Normandy Hill Capital, L.P.
      150 East 52nd Street, 10th Floor
      New York, NY 10022

    * P. Schoenfeld Asset Management, LLC
      350 Avenue of the Americas, 21st Floor
      New York, NY 10019

    * Royal Bank of Scotland, PLC
      600 Steamboat Road
      Greenwich, CT 06830

The Bank Debt Holders collectively hold about 72.03%, or
$360.16 million of the $500 million, in outstanding principal of
the loans and advances granted to the Debtors under the
prepetition bank credit facilities.

                         About W.R. Grace

Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.

The Company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts.  The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.  Stroock &
Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors.  The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice.  David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants.  The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it.  Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.

As reported by the Troubled Company Reporter on March 11, 2009,
the Bankruptcy Court approved the disclosure statement explaining
the First Amended Chapter 11 Joint Plan of Reorganization filed by
W.R. Grace and its debtor affiliates, the Official Committee of
Asbestos Personal Injury Claimants, the Asbestos PI Future
Claimants' Representative and the Official Committee of Equity
Security Holders, and authorized Grace to begin soliciting plan
votes.

The Court scheduled a two-phase confirmation hearing:

  -- Hearings on June 22 to 25 to deal with objections by
     insurance companies; and

  -- Hearings on September 8 to 11 for objections related to
     claims from the facility in Libby, Montana.

The Chapter 11 plan is built around an April 2008 settlement for
all present and future asbestos personal injury claims, and a
subsequent settlement for asbestos property damage claims.

Parties entitled to vote on the Plan must file objections to Plan
confirmation, if any, no later than 4:00 p.m. Eastern time on
May 20, 2009.  Supplements to the Plan may be filed until May 10.

Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News.  The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates.  (http://bankrupt.com/newsstand/or 215/945-7000)


WR GRACE: Seeks Approval of Venable Engagement as Special Counsel
-----------------------------------------------------------------
W.R. Grace & Co. and its affiliates seek authority from the U.S.
Bankruptcy Court for the District of Delaware to employ Venable
LLP as their special litigation counsel in regard to the lawsuit
filed by Global Printing & Design Solutions, Inc., which is
currently pending in the Circuit Court for Howard County,
Maryland.

The Debtors have employed Venable under the Ordinary Course
Professional Order pursuant to which payment to each of the OCPs
by the Debtors is limited to $50,000 per month and up to a total
$1,200,000 per OCP professional during the pendency of the
Debtors' Chapter 11 Cases.  Because Venable's fees in relation to
the Global Printing Litigation, as well as fees for other
services the firm provides to the Debtors, have begun to exceed
the monthly cap and are expected to do so for some time to come,
the Debtors are filing the application so that Venable may be
regularly compensated for its services pursuant to Sections 330
and 331 of the Bankruptcy Code.

As special litigation counsel, Venable will:

   (a) advise the Debtors, their counsel, and their board of
       directors with respect to employment, employee benefit,
       workers' compensation and corporate and securities
       matters;

   (b) act as counsel for the Debtors and any related party in
       the Global Printing Litigation; and

   (c) perform other related services as the Debtors may deem
       necessary or desirable.

The Debtors will pay Venable based on these fees:

     Professional                         Hourly Rate
     ------------                         -----------
     G. Stewart Webb, Jr., Esq.               $635
     Colleen M. Mallon, Esq.                  $415
     Alexander W. Major, Esq.                 $285
     Mathew R. Swinburne, Esq.                $265
     Jeffery P. Ayres, Esq.                   $495
     Elizabeth R. Hughes, Esq.                $580
     Other Partners                      $415 to $660
     Associates                          $265 to $400
     Paralegals                          $175 to $225

James E. O'Neill, Esq., Pachulski Stang Ziehl & Jones, LLP, in
Wilmington, Delaware, says Venable, upon the Court's approval of
the application, will no longer be compensated pursuant to the
OCP Order for fees and expenses incurred in their Chapter 11
cases going-forward, and will be entitled to seek application for
its currently outstanding fees and expenses in excess of the OCP
caps and all fees and expenses going forward pursuant to Sections
330 and 331 and other applicable procedures and orders of the
Court in these cases.

G. Stewart Webb, Jr., Esq., a partner at Venable LLP, in
Baltimore, Maryland, assures the Court that his firm is a
"disinterested person" within the meaning of Section 101(14), and
does not represent or hold any interest adverse to the Debtors or
their estates with respect to the matters for which the firm is
to be employed, Venable has been the Debtors' long-time advisors
with respect to matters involving labor and employment, employee
benefits.

                         About W.R. Grace

Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.

The Company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts.  The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.  Stroock &
Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors.  The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice.  David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants.  The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it.  Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.

As reported by the Troubled Company Reporter on March 11, 2009,
the Bankruptcy Court approved the disclosure statement explaining
the First Amended Chapter 11 Joint Plan of Reorganization filed by
W.R. Grace and its debtor affiliates, the Official Committee of
Asbestos Personal Injury Claimants, the Asbestos PI Future
Claimants' Representative and the Official Committee of Equity
Security Holders, and authorized Grace to begin soliciting plan
votes.

The Court scheduled a two-phase confirmation hearing:

  -- Hearings on June 22 to 25 to deal with objections by
     insurance companies; and

  -- Hearings on September 8 to 11 for objections related to
     claims from the facility in Libby, Montana.

The Chapter 11 plan is built around an April 2008 settlement for
all present and future asbestos personal injury claims, and a
subsequent settlement for asbestos property damage claims.

Parties entitled to vote on the Plan must file objections to Plan
confirmation, if any, no later than 4:00 p.m. Eastern time on
May 20, 2009.  Supplements to the Plan may be filed until May 10.

Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News.  The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates.  (http://bankrupt.com/newsstand/or 215/945-7000)


WR GRACE: To Contribute $30.3 Million to Retirement Plans
---------------------------------------------------------
W.R. Grace & Co. seek authority from the U.S. Bankruptcy Court for
the District of Delaware to contribute $30,375,532 for minimum
contributions required by applicable federal law to one or more
of the Grace Retirement Plans for the 09-10 funding period from
July 15, 2009, to January 15, 2010.

The Grace Retirement Plans are underfuded by most accepted
measures, discloses Laura Davis Jones, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Wilmington, Delaware.  As of January 1,
2009, the amount by which the Grace Retirement Plans were funded
ranges from ($113 million) to ($375 million), depending on the
measure used.  Moreover, the total market value of assets as of
January 1, 2009, was about $560 million, with a decrease of about
$214 million from January 1, 2008, when the market value was
$774 million.

According to Ms. Davis, the decrease in the asset value during
2008 was caused by the result of asset return of (25.9%) during
2008 and $59.2 million that was paid out of the Grace Retirement
Plans during the year, offset by the Debtors' contribution of
about $49.0 million.  She adds that virtually all of the Debtors'
current employees are covered by one of the Grace Retirement
Plans.  The Grace Salaried Plan alone covers over 1,900 active,
salaried employees, of a total U.S. workforce of approximately
3,000 employees, or more than 60% of the Debtors' U.S. workforce.

The legally required minimum contributions to the Grace
Retirement Plans for the 09-10 Funding Period are:

       Payment
       Due Date              Contributions     Plan Year
     -------------           -------------     ---------
     July 15, 2009            $8,164,422         2009
     Sept. 15, 2009            4,824,756         2008
     Oct. 15, 2009             8,628,679         2009
     Jan. 15, 2010             8,757,675         2009

The Debtors' management believes that continuing to make at least
the legally required minimum contributions to each of the Grace
Retirement Plans is essential to maintaining the morale of the
Debtors' workforce and its confidence in management, and thereby
the productivity and long-term profitability of the Debtors'
businesses.  The employees are vital to maintaining and enhancing
the value of the Debtors' estates and to the Debtors' successful
reorganization, Ms. Davis contends.

The Debtors relate that the contributions have been finalized,
and are not subject to change as a result of future market
performance of the assets of the Grace Retirement Plans or any
anticipated changes in applicable law.  There are also no
anticipated changes in applicable federal law that could affect
the amount of the minimum contributions required to be made to
the Grace Retirement Plans during the 09-10 Funding Period,
according to the Debtors.

Ms. Davis asserts that it is necessary to secure Court approval
for the payment of legally required minimum contributions for the
09-10 funding period at this time because the first due date with
respect to the contributions is July 15,2009 -- less than one
month after the June 29, 2009, hearing for the motion.

Consistent with the most recent prior funding motions, the 09-10
funding approach does not include the objective of eliminating
the requirement of the Grace Retirement Plans to pay variable
rate premiums of Pension Benefit Guaranty Corporation.  It is
estimated that the Grace Retirement Plans will be required to pay
some $2.3 million in Pension Benefit Guaranty Corporation
variable rate premiums for 2009.  To avoid the requirement to pay
all the premiums for 2009, the Debtors would be required to
contribute approximately $261.5 million to the Grace Retirement
Plans by September 15, 2009, in addition to the legally required
minimums.  Additionally, the Debtors may slightly accelerate the
timing of the legally required minimum contributions during the
09-10 funding period to maximize tax benefits.  All contributions
specified in the motion have been calculated by the actuary of
the Grace Retirement Plans, Ms. Davis tells the Court.

Written objections to the motion must be filed by June 12, 2009,
the Debtors inform parties-in-interest.

                         About W.R. Grace

Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.

The Company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts.  The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.  Stroock &
Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors.  The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice.  David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants.  The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it.  Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.

As reported by the Troubled Company Reporter on March 11, 2009,
the Bankruptcy Court approved the disclosure statement explaining
the First Amended Chapter 11 Joint Plan of Reorganization filed by
W.R. Grace and its debtor affiliates, the Official Committee of
Asbestos Personal Injury Claimants, the Asbestos PI Future
Claimants' Representative and the Official Committee of Equity
Security Holders, and authorized Grace to begin soliciting plan
votes.

The Court scheduled a two-phase confirmation hearing:

  -- Hearings on June 22 to 25 to deal with objections by
     insurance companies; and

  -- Hearings on September 8 to 11 for objections related to
     claims from the facility in Libby, Montana.

The Chapter 11 plan is built around an April 2008 settlement for
all present and future asbestos personal injury claims, and a
subsequent settlement for asbestos property damage claims.

Parties entitled to vote on the Plan must file objections to Plan
confirmation, if any, no later than 4:00 p.m. Eastern time on
May 20, 2009.  Supplements to the Plan may be filed until May 10.

Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News.  The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates.  (http://bankrupt.com/newsstand/or 215/945-7000)


WR GRACE: U.S. Trustee, Creditors Object to Plan Confirmation
-------------------------------------------------------------
Several parties lodge objections with the U.S. Bankruptcy Court
for the District of Delaware to the confirmation of the First
Amended Chapter 11 Plan of Reorganization of W.R. Grace & Co. and
its debtor-affiliates.

(A) U.S. Trustee

Acting U.S. Trustee for Region 3, Roberta A. DeAngelis, complains
about certain "overbroad" provisions under the Debtors' First
Amended Chapter 11 Plan of Reorganization.

Specifically, Ms. DeAngelis complains that the Plan is overbroad
with regard to:

   (a) the Asbestos Personal Injury and Asbestos Property Damage
       Channeling Injunctions, with respect to the inclusion of
       certain entities that are not entitled to the injunctions;

   (b) the general releases, citing that certain beneficiaries of
       those releases are not permitted to be released from all
       prepetition conduct under relevant law; and

   (c) the exculpation clause in the Plan.

Ms. DeAngelis asserts that the inclusion in the channeling
injunctions of professionals of certain asbestos protected
parties, including the Debtors and their non-Debtor affiliates,
the Sealed Air Indemnified Parties, and the Fresenius Indemnified
Parties, is not appropriate and violates Third Circuit law.  The
Plan Proponents cannot rely solely on Section 105 of the
Bankruptcy Code as support for the approval of the injunction, she
argues.

Moreover, Ms. DeAngelis asserts that the Debtors need to prove
under relevant law why certain entities who did not contribute to
the reorganization, including former officers and directors and
representatives of Grace's non-debtor affiliates, should be
released or exculpated from virtually any postpetition conduct.

(B) Creditors' Committee

The Official Committee of Unsecured Creditors complains that the
First Amended Joint Plan improperly designates as unimpaired claim
under Class 9 consisting of general unsecured claims.

"This is a significant flaw, premised on the failure of the Plan
to expressly provide for the payment of the full amount of
postpetition interest to claimants holding claims in Class 9,"
Michael R. Lastowski, Esq., at Duane Morris LLP, in Wilmington,
Delaware, argues.  He points out that:

    (i) the Holders of Bank Claims are not being provided with
        postpetition interest at the applicable default rate
        under the Prepetition Credit Facilities, thus leaving
        their contractual rights altered; and

   (ii) as to Holders of non-Bank Claims designated as Class 9
        Claims, the Plan is ambiguous as to whether it provides
        for the payment of the full amount of postpetition
        interest on these "other" Class 9 Claims that have
        provisions in each of their agreements for the payment of
        interest, including default interest or some other late
        payment amount, or that may be entitled to appropriate
        state statutory rates of interest in excess of the 4.19%
        interest rate provided in the Plan.

As a result of the impairment of Class 9 claims, the Plan
violates the absolute priority rule and therefore is not fair and
equitable under Section 1129(b)(2)(B) of the Bankruptcy Code, the
Committee complains.

The Committee further complains that the Debtors further violate
Section 1129 in regard to the Plan's "attempt to provide for the
dissolution of the Creditors' Committee on the Plan effective
date."  The Creditors' Committee, accordingly, seeks to strike
out that "offending" section of the Plan.

The Committee asserts that the Plan cannot be confirmed unless
the Plan is amended in the manner described in its objection.

(C) Bank Lenders

By the First Amended Plan of Reorganization, the Debtors seek to
maximize value for their shareholders at the expense of the
Debtors' creditors, a group of bank lenders led by JP Morgan
Chase, as agent, alleges.

The Plan, the Bank Lenders complain, violates the best interest of
creditors test under Section 1129(a)(7) of the Bankruptcy Code and
the absolute priority rule of Section 1129(b).

The Bank Lenders point out that under the Plan, the Debtors'
shareholders will get equity that the Debtors themselves value at
between $430 million and $821 million while simultaneously
depriving the Bank Lenders of more than $91 million of contract
default interest, which has accrued at 2% over almost nine years
on the Bank Lenders' more than $503 million of claims.

The Bank Lender Group includes:

   * Anchorage Advisors, LLC
   * Allen & Co.
   * Avenue Capital Group
   * Babson Capital Management LLC
   * Bass Companies
   * Caspian Capital Advisors, LLC
   * Catalyst Investment Management Co., LLC
   * Cetus Capital, LLC
   * DE Shaw Laminar Portfolios, LLC
   * Goldman Sachs & Co., as ex-officio member
   * Halcyon Asset Management LLC
   * Intermarket Corp.
   * JP Morgan Chase, N.A. Credit Trading Group
   * Loeb Partners Corporation
   * MSD Capital, L.P.
   * Normandy Hill Capital, L.P.
   * Onex Debt Opportunity Fund Ltd.
   * P. Schoenfield Asset Management, LLC
   * Restoration Capital Management, LLC
   * Royal Bank of Scotland, PLC

The Bank Lenders ask the Court to deny confirmation of the Plan.

(D) Insurers

More than 15 insurers of asbestos-related liabilities against the
Debtors separately object to the confirmation of the Debtors'
First Amended Chapter 11 Joint Plan of Reorganization:

  -- OneBeacon America and Seaton Insurance Company;

  -- Zurich Insurance Company and Zurich International (Bermuda)
     Ltd.;

  -- Allstate Insurance Company, as successor-in-interest to
     Northbrook Excess and Surplus Insurance Company, formerly
     Northbrook Insurance Company;

  -- Federal Insurance company;

  -- Government Employees Insurance Co. and Republic Insurance
     Company, n/k/a Starr Indemnity & Liability Company;

  -- General Insurance Company of America;

  -- AIU Insurers consisting of:
     * American Home Assurance Company
     * AIU Insurance Company
     * Birminghan Fire Insurance Company
     * Granite State Insurance Company,
     * Illinois National Insurance Company,
     * Insurance Company of the State of Pennsylvania,
     * Lexington Insurance Company, and
     * New Hampshire Insurance Company

  -- Maryland Casualty Company;

  -- Travelers Casualty and Surety Company;

  -- Continental Casualty Company and Continental Insurance
     Company;

  -- TIG Insurance Company

  -- Hartford Accident and Indemnity Company, First State
     Insurance Company, Twin City Fire Insurance Company, and New
     England Reinsurance Corporation;

  -- AXA Belgium, as successor to Royal Belge SA;

  -- London Market Insurance Companies;

  -- Longacre Master Fund, Ltd. And Longacre Capital Partners
     (QP), L.P.

  -- National Union Insurance Company of Pittsburg, P.A.;

  -- Fireman's Fund Insurance Company, Allianz S.P.A., formerly
     Riunione Adriatica Di Sicurta, and Allianza SE, formerly
     Aktiengesellschaft; and

  -- Arrowood Indemnity Company, formerly Royal Indemnity
     Company.

Morgan Stanley Senior Funding, Inc.; and plaintiffs Aaron C.
Edwards, James T. Beam, Edward E. Storey, John M. Thomas, and
Sheila Martin, in the asbestos personal injury complaint against
Grace, separately object to the Plan in connection with the
claims of certain insurers.

The Insurers generally complain that:

   (a) their contract claims for indemnity with respect to
       asbestos-related tort claims against the Debtors are
       improperly classified as Class 6 claims;

   (b) the Plan is "not insurance neutral;" and

   (c) the Plan abrogates their contractual rights under Asbestos
       Insurance Reimbursement Agreements entered into with
       W.R. Grace & Co.

Representing OneBeacon and Seaton, David P. Primack, Esq., at
Drinker Biddle & Reath LLP, in Wilmington, Delaware, cites
Section 1122(a) of the Bankruptcy Code as providing that a plan
may place a claim or an interest in a particular class only if
that claim or interest is substantially similar to the other
claims or interests of that class.  OneBeacon's and Seaton's
claims are substantially dissimilar to, and broader in scope
than, the asbestos-related tort claims that dominate Class 6
under the Plan, Mr. Primack tells the Court.

Zurich and Continental Casualty point out that the Plan impairs
their contractual rights.  Zurich adds that the Plan provides for
overpayment of meritorious claims and payment of non-meritorious
claims.  Specifically, Zurich objects to the Plan to the extent
that the Plan would obligate Zurich to pay to the Asbestos PI
Trust excess amounts over that actually paid by the Asbestos PI
Trust to the holder of an allowed Asbestos PI Claim, and to the
extent that the Plan would impair any coverage defenses under the
Debtors' insurance contracts with Zurich, including defenses on
assignment of rights under those contracts.

Raising a similar concern, Allstate Insurance Company cites
Section 7.2.2 (d)(iv) of the First Amended Plan as providing that
on the Plan effective date, the Asbestos PI Trust will be the
successor to all rights of Grace under each Asbestos Insurance
Reimbursement Agreement, where the Asbestos PI Trust's payment of
an asbestos PI claim under the PI Trust Distribution Procedures
will be deemed to constitute settlement and payment of that claim
by or on behalf of Grace.  Representing Allstate, James S. Yoder,
Esq., at White & Williams, LLP, in Wilmington, Delaware, says
this provision ostensibly eviscerates all contractual rights
Allstate has to ensure that the various prerequisites of payment
under its settlement agreement with the Debtors have been been
met and that payment is in fact contractually done.

Federal cites that under the Plan, Grace's asbestos insurance
rights under policies issued by Federal will be transferred to
the Asbestos PI Trust, notwithstanding any anti-assignment
provision in any asbestos insurance policy.  Federal objects to
the transfer of asbestos insurance rights under its policies to
the Asbestos PI Trust.

The Plan and Plan documents are "absolutely silent" with respect
to whether the Trust will assume or comply with the Debtors'
duties and obligations under the Asbestos Insurance Policies,
relate Government Employees Insurance Co. and Republic Insurance
Company, who disclose that their policies also contain identical
anti-assignment provisions.

AXA Belgium contends that the insurance transfer agreement strips
its contractual rights when the agreement transfers all of the
insured's asbestos insurance rights, but none of its obligations
under the policies.

The London Market Insurance Companies complain that the Plan
attempts to assume and assign its settlement agreement to the
Asbestos PI Trust without complying with the requirements for
assumption and assignment of an executory contract.

General Insurance wants to ensure neutrality as to any coverage
litigation that may ensue pertaining to its settlement agreement
with Grace.  General Insurance also wants to ensure that the Plan
is clarified or modified to provide that its contract claims
against Grace arising from the settlement agreement are not
channeled to the Asbestos Trust or Indirect Asbestos PI Trust
Claims.

The AIU Insurers complain that the Plan is silent with respect to
the terms of the settlement they entered into with Grace.
According to the AIU Insurers, Grace is obligated to provide them
certain continuing indemnification rights for claims that might
be asserted by others against the AIU Insurers in connection with
certain disputed claims.  The AIU Insurers also complain that the
Asbestos PI Claimants' submissions to the Asbestos PI Trust be
kept secret, pursuant to the Plan, inconsistent with the terms
under their settlement that the AIU Insurers have the right to
review all documents relating to billings and payments of covered
asbestos related claims.

Longacre Master Fund complains that other claims substantially
similar to its Claim No. 9553 are being paid in full, whereas
under the Plan, Class 6 claims, under which Claim No. 9553 is
classified, can recover as against assets funded into the
Asbestos PI Trust only, and can obtain no further recovery from
the Debtors.  National Union Fire Insurance Company of
Pittsburgh, P.A., predecessor-in-interest to Longacre's Claim,
joins in Longacre's objection.

Morgan Stanley Senior Funding, Inc., assignee to the claims filed
by Bank of America, N.A., with respect to standby letters of
credit drawn by National Union, complains that the Plan fails to
provide the appropriate rate of postpetition interest on the
claims Morgan Stanley acquired from BofA.  Morgan Stanley says
the Plan provides for differing treatments within the four
subclasses of Class 9, in violation of the requisite equality
treatment within the class.  Morgan Stanley files a notice of
postpetition interest determination pursuant to the approved
notice of procedures relating to the payment of postpetition on
general unsecured claims against the Debtors.

Morgan Stanley and the Plan Proponents later reach a Court-
approved stipulation allowing Morgan Stanley's claims, as
acquired from BofA, as Class 9 General Unsecured Claims against
the Debtors, notwithstanding any provisions to the contrary in
the Plan and Disclosure Statement.  Neither Morgan Stanley, BofA,
nor any other party, will not be required to file a disputed
classification declaration with respect to the claim, pursuant to
the Disclosure Statement Order, the parties further stipulate.

Travelers Casualty and Surety Company, joined by Hartford
Accident and Indemnity Company, et al., files under seal its
objections to the Plan, and TIG Insurance Company joins in the
objections raised by the insurers.

Arrowood complains that the Plan fails to satisfy Section 524(g)
of the Bankruptcy Code, citing, among others, that the Debtors
have not established that their contributions to the trust are
fair and equitable, and if non-debtor persons and entities who
would be protected by the channeling injunction have derivative
liability for the Debtors' asbestos problems. Also, Arrowood
points out that the exculpation and release provisions under the
Plan are exceptionally broad and materially impair the rights of
Arrowood and other insurers.

Aside from its complaint that its indemnity claim is
inappropriately classified as a Class 6 Claim rather than as a
Class 9 Claim, Fireman's Fund also complains that the Plan also
seeks to violate Fireman's contractual rights by excluding
Fireman's from the process by which Asbestos PI Claims are to be
processed and paid.  Fireman's asserts a claim pursuant to an
Indemnity Agreement arising from a $43-million bond it issued on
Grace's behalf in connection with its appeal of a judgment
awarded in favor of plaintiffs Aaron C. Edwards, James T. Beam,
Edward E. Storey, John M. Thomas, and Sheila Martin.

The Asbestos Plaintiffs assert that the treatment of their
claims, or claims to be liquidated by supersedeas bonds, in
general, is ambiguous under the Plan.  The treatment, if not
amended, may possibly exclude the claims in the Edwards Judgment,
they say.

Fireman's Fund and Maryland Casualty separately file disputed
classification declarations, pursuant to the order approving the
Disclosure Statement to the Debtors' First Amended Chapter 11
Plan of Reorganization, so that they may vote provisionally to
accept or reject the Plan.

(E) State of Montana

The State of Montana contends that its claims are improperly
classified as Class 6 Asbestos Personal Injury Claims under the
First Amended Plan.  Montana filed proofs of claim against the
Debtors for contribution and indemnification resulting from
Montana's purported failure to warn about asbestos-containing
vermiculite produced by the Debtors, allegedly in violation of a
governmental duty imposed under Montana law.

Francis A. Monaco, Jr., at Womble Carlyle Sandridge & Rice, PLLC,
in Wilmington, Delaware, on behalf of Montana, argues that
Montana's claims are of a different nature -- contribution and
indemnification, as opposed to personal injury, wrongful death,
or property damage -- and based on different acts -- alleged
failure to warn, as opposed to production of asbestos-containing
products -- from the types of claims to which a Section 524(g) of
the Bankruptcy Code injunction may apply.  By attempting to
expand the scope of Section 524(g) to apply to Montana's claims,
the Plan fails to comply with the requirements of Section
524(g)(2)(B), and accordingly does not comply with the
"applicable provisions" of the Bankruptcy Code, as required by
Section 1129(a)(1).

Montana further objects to the Plan because it disregards the
absolute priority rule and prohibition on unfair discrimination
by seeking to cram down the Plan on the impaired Class 6 Asbestos
PI Claims while, at the same time, leaving classes that are equal
or junior in priority unimpaired.  The Plan, Mr. Monaco asserts,
is also unfair in that it fails to clarify the procedures
pursuant to which Class 6 Asbestos PI Claims will be paid, or the
percentage that claimholders in that class will receive on their
claims.

In addition, Mr. Monaco complains that the Plan unfairly
discriminates against Montana in particular in two ways:

   (1) the Plan provides for a distribution to Montana that
       violates the Montana Constitution; and

   (2) the Plan attempts to pay Class 6 Asbestos PI Claims on a
       first-in-first-out mechanic.

(F) Libby Claimants

Claimants injured by exposure to asbestos from the Debtors'
operations in Lincoln County, Montana, complain that the Plan
discriminates their Claims.  The Libby Claimants note that the
Plan purports to pay Asbestos PI Claims on a pro rata basis based
on their value in the tort system, yet as to the Libby Claims, the
Plan will pay on the basis of a fraction of tort system value.

The Libby Claimants assert that the Plan is unconfirmable because
it denies them their right to a trial by jury.  The Libby
Claimants add that the Plan deprives them of the benefit of
insurance coverage for which they do not compete with other
claims.

The Libby Claimants also object to being required to file an
objection to confirmation of the Plan at a time when the Plan
Proponents have not yet fully disclosed their contentions with
respect to confirmation of the Plan and, specifically, in
response to the preliminary plan objection by the Libby
Claimants.

The Libby Claimants seek leave from the Court to file its
objection in excess of the 40-page limitation.

(G) Anderson Memorial, et al.

Several other parties-in-interest object to confirmation of the
Debtors' First Amended Plan of Reorganization:

   * Anderson Memorial Hospital;

   * The City of Vancouver;

   * The School District 68 Nanaimo-Ladysmith;

   * BNSF Railway Company and its predecessors, the Great
     Northern Railway Company, the Burlington, Northern Railroad
     Company, and the Burlington Northern & Santa Fe Railway
     Company;

   * Garlock Sealing Technologies;

   * Kaneb Pipe Line Operating Partnership, L.P., and Support
     Terminal Services, Inc.;

   * ERISA Plaintiffs, Keri Evans, Timothy Whips and Mark Siamis;

   * Tyco Healthcare Group, doing business as Covidien;

   * The Scotts Company LLC; and

   * Michigan Department of Treasury.

Anderson Memorial Hospital, party-in-interest to asbestos
property damage claims against W.R. Grace & Co., complains that
the Plan is not proposed in good faith as, among others, it fails
to afford creditors in the same class with the same treatment,
and improperly releases third parties.  According to Christopher
D. Loizides, Esq., at Loizides, P.A., in Wilmington, Delaware,
the Debtors' Plan singles out Anderson for a treatment not
afforded to any other asbestos creditor, citing that every other
asbestos claim either has been settled and will be paid on the
plan effective date, is subject to alternative resolution
procedures with lowered proof thresholds, or is permitted to
litigate in its chosen forum.  He says only Anderson, of all the
asbestos claims filed against the Debtors, is required to
litigate its claims in order to be entitled to payment, but that
Anderson is precluded from doing so in the forum it chose prior
to these Chapter 11 cases.  The City of Vancouver and the School
District 68 Nanaimo-Ladysmith, both holders of asbestos property
damage claims, join in Anderson's objections.

BNSF Railway Company, a counterparty to a contract under which
BNSF transported through its rail network the vermiculite mined
by Grace, complains that the Asbestos PI Trust Distribution
Procedures are not fair and equitable.

Garlock Sealing Technologies, who asserts indirect claims for
contribution and indemnity for asbestos personal injury claims
against the Debtors, asserts that the Plan should not be
confirmed as the TDP fails to provide a procedure for liquidating
the Trust's liability for indirect claims.  Garlock explains that
the Trust, under the TDP, is permitted to settle an indirect
claim only after the indirect claimant has paid the Trust's
liability to the direct claimant.

Kaneb Pipe Line Operating Partnership, L.P., and Support Terminal
Services, Inc., relate that the Plan, in order to pay asbestos-
related claims,  proposes the use of an Asbestos PI Trust and an
Asbestos PD Trust that are funded in part by insurance coverage.
Kaneb says it objects to the Plan to the extent the Debtors use
insurance policies that are not property of the estates.

Keri Evans, Timothy Whips and Mark Siamis, plaintiffs in the
complaint against certain directors of Grace for violation of the
Employee Retirement Income Security Act of 1974, point out that
the Plan's language pertaining to release and injunction is
ambiguous so that it may be interpreted to release the claims of
the ERISA Plaintiffs.

Tyco Healthcare Group, doing business as Covidien, complains that
the Plan omits reference to a stipulation resolving its Claim No.
12789 against the Debtors in connection with the Blackburn &
Union Privileges, a Superfund site in Walpole, Massachusetts.
Covidien seeks to include reference to that stipulation in the
Plan.

The Scotts Company LLC, in a separate objection, complains that
the Plan would improperly enjoin claims of nondebtors against
other nondebtors who have not made a substantial financial
contribution to the Asbestos PI Trust.  The Scotts Company
further complains that the Plan provides for an asbestos entity
injunction that directly benefits non-settling asbestos insurance
companies by enjoining claims against them.  Scotts asserts that
the Plan is not confirmable because it purports to enjoin claims
against the nonsettling asbestos insurance companies while
failing to channel, treat or otherwise provide for the payment of
those enjoined claims.  Scotts holds asbestos-related personal
injury claims against the Debtors from products it sold
containing Grace-mined vermiculite.

The Michigan Department of Treasury opposes to the 4.19% interest
rate proposed under the Plan for priority tax claims, asserting
that interest at the prevailing market rate must be paid on its
priority claims.  Assistant attorney general and counsel to the
Michigan Treasury, Deborah Benedict Waldmeir, declares in a
separate filing, that she is an attorney of good standing.

                   Grace Files Supplement to Plan

The Debtors amended their proposed directors and officers for
reorganized W.R. Grace, a list of which is available for free at:

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

             Amended Plan-Related Case Management Order

Judge Judith K. Fitzgerald signed the protective order governing
discovery in connection with the confirmation of the Debtors'
Chapter 11 Plan of Reorganization.  The Protective Order limits
the use of certain documents and information that may contain
medical, trade, financial, business or litigation information that
may be of a confidential or proprietary nature, while ensuring
that parties-in-interest can obtain discovery with a minimum of
delay and expense.  General Insurance Company of America, in a
separate filing, joins in the protective order.

A full-text copy of the Protective Order is available for free
at http://bankrupt.com/misc/grace_protctvOrd.pdf

In a separate order, Judge Fitzgerald ruled to strike the cross-
motion filed by the Libby Claimants seeking entry of a protective
order regarding the confidentiality of certain medical
information.  The Libby Claimants have filed the cross-motion in
response to Arrowood Indemnity Company's motion to strike the
report of the Libby Claimants' expert, Dr. Alan C. Whitehouse.
Adam G. Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington,
Delaware, has disclosed, in a certification filed prior to entry
of the order, that the Libby Claimants incorporated changes
suggested by Arrowood and the State of Montana.  The Court
ruling, however, is without prejudice to the Libby Claimants'
right to refile their motion.

Prior to the entry of the order, the Debtors a proposed order
granting in part Arrowood's motion to strike Dr. Whitehouse's
report, or alternatively, for the entry of a confidentiality
order, or to compel production of documents and databases on
which Dr. Whitehouse relies on for his report.  The Debtors
disclosed that the the Plan Proponents and the Libby Claimants
could not agree on a common form of the proposed order reflecting
the Court's ruling on the motion during the May 14, 2009 hearing.

The Debtors also submitted a proposed form of order on the
Court's ruling pertaining to the Libby Claimants' motion to amend
the case management order.  According to the Debtors, the Libby
Claimants agreed on the draft order circulated by the Plan
proponents.

                         About W.R. Grace

Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.

The Company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts.  The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.  Stroock &
Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors.  The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice.  David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants.  The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it.  Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.

As reported by the Troubled Company Reporter on March 11, 2009,
the Bankruptcy Court approved the disclosure statement explaining
the First Amended Chapter 11 Joint Plan of Reorganization filed by
W.R. Grace and its debtor affiliates, the Official Committee of
Asbestos Personal Injury Claimants, the Asbestos PI Future
Claimants' Representative and the Official Committee of Equity
Security Holders, and authorized Grace to begin soliciting plan
votes.

The Court scheduled a two-phase confirmation hearing:

  -- Hearings on June 22 to 25 to deal with objections by
     insurance companies; and

  -- Hearings on September 8 to 11 for objections related to
     claims from the facility in Libby, Montana.

The Chapter 11 plan is built around an April 2008 settlement for
all present and future asbestos personal injury claims, and a
subsequent settlement for asbestos property damage claims.

Parties entitled to vote on the Plan must file objections to Plan
confirmation, if any, no later than 4:00 p.m. Eastern time on
May 20, 2009.  Supplements to the Plan may be filed until May 10.

Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News.  The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates.  (http://bankrupt.com/newsstand/or 215/945-7000)


* Initial Unemployment Insurance Claims Rise Again
--------------------------------------------------
The U.S. Department of Labor said May 21 that in the week ending
May 16, the advance figure for seasonally adjusted initial claims
was 631,000, a decrease of 12,000 from the previous week's revised
figure of 643,000.  The advance seasonally adjusted insured
unemployment rate was 5.0% for the week ending May 9, an increase
of 0.1 percentage point from the prior week's unrevised rate of
4.9%.

The advance number for seasonally adjusted insured unemployment
during the week ending May 9 was 6,662,000, an increase of 75,000
from the preceding week's revised level of 6,587,000.  The rise of
Americans receiving jobless benefits to over 6,660,000 is a record
for the 16th consecutive week, Bloomberg's Bill Rochelle said.

Separately, the newly released minutes of a late-April meeting
show Federal Reserve officials as seeing possible signs of
"stabilization" in the U.S. economy, although they perceive
"significant downside risks" to the outlook for the economy and
said the global financial system is still "vulnerable to further
shocks," Bill Rochelle said.


* Large Companies With Insolvent Balance Sheets
-----------------------------------------------
                                             Total
                                            Share-    Total
                                 Total     holders  Working
                                Assets      Equity  Capital
Company             Ticker        ($MM)       ($MM)    ($MM)
-------             ------      -------     -------  ------
ABSOLUTE SOFTWRE    ABT CN          107         (7)      24
AFC ENTERPRISES     AFCE US         132        (39)      (3)
AMR CORP            AMR US       24,518     (3,108)  (3,545)
ARBITRON INC        ARB US          189         (3)     (22)
AUTOZONE INC        AZO US        5,235       (187)     112
BLOUNT INTL         BLT US          499        (43)     175
BOARDWALK REAL E    BEI-U CN      2,318         (5)    N.A.
BOARDWALK REAL E    BOWFF US      2,318         (5)    N.A.
BOEING CO           BA US        55,339       (509)  (2,160)
BOEING CO           BAB BB       55,339       (509)  (2,160)
BOEING CO-CED       BA AR        55,339       (509)  (2,160)
CABLEVISION SYS     CVC US        9,551     (5,349)    (367)
CENTENNIAL COMM     CYCL US       1,413       (992)     148
CENVEO INC          CVO US        1,501       (221)     163
CHENIERE ENERGY     CQP US        1,975       (408)      79
CHENIERE ENERGY     LNG US        2,892       (444)     278
CHOICE HOTELS       CHH US          333       (146)     (10)
CLOROX CO           CLX US        4,464       (309)    (866)
DELTEK INC          PROJ US         191        (48)      42
DISH NETWORK-A      DISH US       7,063     (1,666)    (422)
DOMINO'S PIZZA      DPZ US          473     (1,396)      99
DUN & BRADSTREET    DNB US        1,614       (785)    (176)
EMBARQ CORP         EQ US         8,050       (527)    (163)
ENERGY SAV INCOM    SIF-U CN        551       (423)    (162)
EPICEPT CORP        EPCT SS          12         (5)      (2)
EXELIXIS INC        EXEL US         355        (88)      53
EXTENDICARE REAL    EXE-U CN      1,833        (51)      98
FORD MOTOR CO       F US        207,270    (16,476)  12,631
FORD MOTOR CO       F BB        207,270    (16,476)  12,631
GENTEK INC          GETI US         425        (21)      88
GLG PARTNERS INC    GLG US          345       (382)     101
GLG PARTNERS-UTS    GLG/U US        345       (382)     101
HEALTHSOUTH CORP    HLS US        1,921       (656)     (53)
HOLLY ENERGY PAR    HEP US          469          0       (6)
IMAX CORP           IMX CN          226        (98)      19
IMAX CORP           IMAX US         226        (98)      19
INTERMUNE INC       ITMN US         193        (82)     121
IPCS INC            IPCS US         545        (41)      62
JOHN BEAN TECH      JBT US          559         (6)      78
KNOLOGY INC         KNOL US         635        (52)      25
LINEAR TECH CORP    LLTC US       1,491       (288)     995
MEAD JOHNSON-A      MJN US        1,707       (897)     380
MEDIACOM COMM-A     MCCC US       3,700       (463)    (281)
MOODY'S CORP        MCO US        1,802       (919)    (482)
NATIONAL CINEMED    NCMI US         604       (514)      89
NAVISTAR INTL       NAV US        9,623     (1,492)   1,367
NPS PHARM INC       NPSP US         200       (225)      87
OCH-ZIFF CAPIT-A    OZM US        1,821       (177)    N.A.
OVERSTOCK.COM       OSTK US         136         (4)      33
PALM INC            PALM US         656        (84)      30
PDL BIOPHARMA IN    PDLI US         219       (422)      79
QWEST COMMUNICAT    Q US         19,711     (1,164)    (344)
REGAL ENTERTAI-A    RGC US        2,563       (246)     (78)
RENAISSANCE LEA     RLRN US          52         (3)     (11)
REVLON INC-A        REV US          784     (1,095)     103
SALLY BEAUTY HOL    SBH US        1,433       (702)     389
SANDRIDGE ENERGY    SD US         2,670       (114)     118
SEMGROUP ENERGY     SGLP US         314       (130)    (431)
SOLARWINDS INC      SWI US           91        (40)      23
SONIC CORP          SONC US         821        (43)      26
STANDARD PARKING    STAN US         231          0      (15)
SUCCESSFACTORS I    SFSF US         162         (7)       0
SUN COMMUNITIES     SUI US        1,197        (68)    N.A.
SYNTA PHARMACEUT    SNTA US          97        (58)      57
TAUBMAN CENTERS     TCO US        2,922       (276)    N.A.
TENNECO INC         TEN US        2,742       (304)     272
THERAVANCE          THRX US         214       (144)     152
UAL CORP            UAUA US      19,100     (2,655)  (2,348)
UNITED RENTALS      URI US        3,976        (56)     266
VENOCO INC          VQ US           730       (107)      33
VERIFONE HOLDING    PAY IT          840        (38)     308
VERIFONE HOLDING    PAY US          840        (38)     308
VERIFONE HOLDING    VF2 GR          840        (38)     308
VIRGIN MOBILE-A     VM US           323       (281)    (141)
WALTER INVESTMEN    WAC US           12        (44)    N.A.
WARNER MUSIC GRO    WMG US        4,256       (110)    (394)
WEIGHT WATCHERS     WTW US        1,087       (848)    (313)
WR GRACE & CO       GRA US        3,726       (374)     892



                           *********

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.  Ma. Theresa Amor J. Tan Singco, Ronald C. Sy, Joel Anthony
G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Editors.

Copyright 2009.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $775 for 6 months delivered via e-
mail.  Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each.  For subscription information, contact Christopher
Beard at 240/629-3300.

                  *** End of Transmission **