TCRLA_Public/060518.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                    L A T I N   A M E R I C A

          Thursday, May 18, 2006, Vol. 7, Issue 98

                            Headlines

A R G E N T I N A

CLINICA ESPARTA: Filing of Proofs of Claim Ends on June 15
CONSULTORA KR: Trustee Stops Validating Claims on June 22
COR SERVICE: Verification of Proofs of Claim Ends on July 6
ESTEBAN S. CARRASCO: Enters Bankruptcy on Court Orders
INDAL S.A.: Verification of Proofs of Claim Ends by June 21

LATINSUR COMPANY: Proofs of Claim Filing Ends on May 24
METALURGICA GAONA: Deadline for Proofs of Claim Filing Is May 30
SERVICIO INTEGRAL: Filing of Claims Deadline Moved to May 31
TRANSENER: Posts ARS7.9 Million First Quarter Net Loss
TRANSPORTADORA DE GAS: Posts ARS17.9 Mil. First Quarter Net Loss

B A H A M A S

WINN-DIXIE: Revises Stalking Horse Bids Schedule & Cure Amounts
WINN-DIXIE: Court Denies Former Employees & Retirees' Motion

B O L I V I A

* BOLIVIA: Orders BBVA to Hand Back Shares of Oil Companies

B R A Z I L

BANCO BRADESCO: Pays BRL308 Million for Control of Bradesplan
BANCO NACIONAL: Adopts New Methods to Simplify Financing Process
BRASKEM SA: To Discuss Polialden Merger in Shareholders Meeting
COMPANHIA PARANAENSE: Net Profit Up 118% in First Quarter 2006
COMPANHIA VALE: Chinese Steelmakers Resist 19% Hike on Iron Ore

COMPANHIA VALE: Promotes Stock Auction of Preferred Shares
GERDAU SA: Moody's Assigns Ba1 Rating on US$450M Bonds Due 2016
SABESP: Posts BRL1,456M First Quarter Gross Operating Revenue
VARIG: Fourteen Entities Interested in Acquiring Assets
VARIG: Purchaser Need Not Shoulder Firm's Debts, Says Judge

C A Y M A N   I S L A N D S

CALIBRE 2003-III: Filing of Proofs of Claim Ends Tomorrow
JEMKA HOLDINGS: Final Shareholders Meeting Is Set for Today
PANTEL HOLDINGS: Holds Final Shareholders Meeting Today
S & J PROPERTY: Proofs of Claim Filing Ends Today
SHERPAS LIMITED: Filing of Proofs of Claim Ends Tomorrow

C O L O M B I A

* COLOMBIA: Will Form Microfinance Bank with COP120 Bil. Capital

C O S T A   R I C A

* COSTA RICA: Interested in Free Trade Agreement with Europe

E C U A D O R

* ECUADOR: Oxy Plans to Continue Operations in Country

E L   S A L V A D O R

MILLICOM INTERNATIONAL: Chinese Firm Likely to Win Auction

H A I T I

* HAITI: World Bank Urges More International Help to Country

H O N D U R A S

* HONDURAS: Plans Changes in Labor Schedule
* HONDURAS: President May Consider Buying Fuel from Venezuela

J A M A I C A

KAISER ALUMINUM: Court Approves AIG Settlement Agreement
KAISER ALUMINUM: Names Joseph Bellino as Chief Financial Officer
MIRANT CORP: Earns US$467 Million of Net Income in First Quarter
M E X I C O
J.L. FRENCH: Committee Hires Foley & Lardner as Bankr. Counsel

MERIDIAN AUTOMOTIVE: Hennigan Replaces Milbank as 1st Lien Atty.
SATMEX: Moves Satellite Launching to May 26
SSA GLOBAL: Infor to Buy Stock in US$19.50-Per-Share Merger Deal
TV AZTECA: Subsidiary Launches National Campaign in New York

P A N A M A

* PANAMA: Gov't Intensifies Courting for Canal Expansion Aid

P A R A G U A Y

* PARAGUAY: Accuses European Union of Obstructing Mercosur

P E R U

PETROLEO BRASILEIRO: Will Ink Exploration Accord with PeruPetro

* PERU: IDB Grants US$500,000 Loan to Promote Entrepreneurship

P U E R T O   R I C O

ADELPHIA COMMS: Judge Morris to Monitor Creditor Disputes
ADELPHIA COMMS: Court Allows Paying Interest to Unsec. Creditors
KMART CORP: Summary Judgment on Rubloff's Claims Draws Fire
KMART: FLOORgraphics Seeks Reconsideration of Court's Ruling
MUSICLAND HOLDING: Claims Classification & Treatment Under Plan

MUSICLAND HOLDING: Inks Termination Agreement with Wachovia Bank
NEWCOMM WIRELESS: Involuntary Chapter 11 Case Summary

V E N E Z U E L A

PETROLEOS DE VENEZUELA: 2006 Budget Includes US$2.6 Bil. Deficit
PETROLEOS DE VENEZUELA: PDVSA Gas Makes Domestic Record Sales


                         - - - - -


=================
A R G E N T I N A
=================


CLINICA ESPARTA: Filing of Proofs of Claim Ends on June 15
----------------------------------------------------------
Creditors of bankrupt company Clinica Esparta S.R.L. are
required to present proofs of their claims to Maria Susana
Taboada, the court-appointed trustee, by June 15, 2006, La
Nacion reports.  Creditors who fail to submit the required
documents by June 15 will not qualify for any post-liquidation
distributions.

Buenos Aires' Court No. 1 declared the company bankrupt, in
favor of Organizacion de Servicios Directos Empresarios, which
the company owes US$8,524.57.

Clerk No. 2 assists the court on the case.

The debtor can be reached at:

         Clinica Esparta S.R.L.
         Tacuari 1330
         Buenos Aires, Argentina

The trustee can be reached at:

         Maria Susana Taboada
         Juana Azurduy 2449
         Buenos Aires, Argentina


CONSULTORA KR: Trustee Stops Validating Claims on June 22
---------------------------------------------------------
The validation of creditors' proofs of claim against Consultora
KR y Asociados S.A., a company under reorganization, will end on
June 22, 2006, Argentine daily La Nacion reports.

Buenos Aires' Court No. 15 approved the company's petition for
reorganization filed after the company defaulted on its debt
payments.  Cecilia Montelvetti was appointed as trustee.

An informative assembly will be held on March 28, 2007.
Creditors will vote to ratify a completed settlement plan during
the said assembly.

The city's Clerk No. 30 assists the court on the case.

The debtor can be reached at:

         Consultora KR y Asociados S.A.
         Juana Azurduy 2449
         Buenos Aires, Argentina

The trustee can be reached at:

         Cecilia Montelvetti
         Urquiza 2134
         Buenos Aires, Argentina


COR SERVICE: Verification of Proofs of Claim Ends on July 6
-----------------------------------------------------------
Creditors of bankrupt company Cor Service S.R.L., a construction
company, are required to present proofs of their claims to
Nestor Jorge Vegetti, the court-appointed trustee, on or before
July 6, 2006, La Nacion reports.  Creditors who fail to submit
the required documents will not qualify for any post-liquidation
distributions.

Buenos Aires' Court No. 2 declared the company bankrupt in favor
of Aridos de Campana S.A., which the company owes US$3,057.72.

Clerk No. 3 assists the court on the case.

The debtor can be reached at:

         Cor Service S.R.L.
         Avenida Juan B. Alberdi 2316
         Buenos Aires, Argentina

The trustee can be reached at:

         Nestor Jorge Vegetti
         Montevideo 711
         Buenos Aires, Argentina


ESTEBAN S. CARRASCO: Enters Bankruptcy on Court Orders
------------------------------------------------------
Esteban S. Carrasco S.A. enters bankruptcy protection after a
court in Rosario, Santa Fe, ordered the company's liquidation.
The order effectively transfers control of the company's assets
to a court-appointed trustee who will supervise the liquidation
proceedings.

Argentine bankruptcy law requires the trustee to provide the
court with individual reports on the forwarded claims and a
general report containing an audit of the company's accounting
and business records.

The name of the trustee, the verification deadline and the dates
of submission of the reports are yet to be disclosed.

The debtor can be reached at:

         Esteban S. Carrasco S.A.
         Avenida Godoy 8590 Rosario
         Santa Fe, Argentina


INDAL S.A.: Verification of Proofs of Claim Ends by June 21
-----------------------------------------------------------
Manuel Alberto Fada, the court-appointed trustee, will stop
accepting creditors' proofs of claim by June 21, 2006, Infobae
reports.

Cordoba's Court No. 4 converted the company's reorganization
case into bankruptcy.  The court also ordered the trustee to
prepare individual and general reports after the verification
process is completed.  The dates of submission of these reports
are yet to be disclosed.

As reported in the Troubled Company Reporter on July 18, 2005,
Mr. Fada had validated the proofs of claim until April 29, 2005,
when the company was still undergoing reorganization.   The
trustee had submitted the validated individual claims for court
approval on June 13, 2005.  The presentation of the general
report on the case followed on Aug. 8, 2005.

The debtor can be reached at:

         Indal S.A.
         Manuel Pizarro 2072
         Ciudad de Cordoba
         Cordoba, Argentina

The trustee can be reached at:

         Manuel Alberto Fada
         Avenida General Paz 108
         Ciudad de Cordoba
         Cordoba, Argentina


LATINSUR COMPANY: Proofs of Claim Filing Ends on May 24
-------------------------------------------------------
Court-appointed trustee Jose Luis Carriquiry will stop
validating claims against bankrupt company Latinsur Company S.A.
after May 24, 2006, Infobae reports.  

Mr. Carriquiry will present the validated claims in court as
individual reports on June 29, 2006.  The trustee will also
submit a general report on the case on July 31, 2006.

A Buenos Aires court handles the company's bankruptcy case.

The trustee can be reached at:

         Jose Luis Carriquiry
         Loyola 660
         Buenos Aires, Argentina


METALURGICA GAONA: Deadline for Proofs of Claim Filing Is May 30
----------------------------------------------------------------
Court-appointed trustee Jacobo Luterstein will stop validating
claims against Metalurgica Gaona S.R.L. after May 30, 2006,
Infobae reports.

As reported in the Troubled Company Reporter on April 21, 2006,
Court No. 5 of Buenos Aires' civil and commercial tribunal
declared the company bankrupt.

Clerk No. 9 assists the court on the case.

The debtor can be reached at:

           Metalurgica Gaona S.R.L.
           Castro Barros 1193
           Buenos Aires, Argentina

The trustee can be reached at:

           Jacobo Luterstein
           Rodriguez Pena 694
           Buenos Aires, Argentina


SERVICIO INTEGRAL: Filing of Claims Deadline Moved to May 31
------------------------------------------------------------
Buenos Aires' Court No. 17 extended the submission of creditors'
claims against bankrupt firm Servicio Integral Telefonico S.A.
until May 31, 2006, from March 24, 2006.  Juan Jose O.
Castronuovo, the court-appointed trustee, will validate the
claims.

As reported in the Troubled company Reporter on March 3, 2006,
Servicio Integral was declared bankrupt after the court endorsed
the petition of Obra Social de Empleados de Comercio for the
company's liquidation.

Clerk No. 33 assists the court in this case.

The debtor can be reached at:

         Servicio Integral Telefonico S.A.
         Avenida Belgrano 2068
         Buenos Aires, Argentina

The trustee can be reached at:

         Juan Castronuovo
         Cerrito 1116
         Buenos Aires, Argentina


TRANSENER: Posts ARS7.9 Million First Quarter Net Loss
------------------------------------------------------
Transener SA, a transmission company in Argentina, reported to
the Comision Nacional de Valores, the country's securities
regulator, that it incurred ARS7.9 million net loss in the first
quarter of 2006.

Business News Americas recalls that the company acquired a
ARS14.7 million net profit in the same quarter last year.

According to BNamericas, exchange rate losses reached ARS14.3
million in this year's first quarter due to foreign currency
denominated debt compared to exchange rate gains of ARS44.7
million in the first quarter of 2005.

BNamericas relates that the financial losses offset a 31.5%
boost in revenue to ARS106 million due in part to increases in
rates after the a new concession contract was signed with
Uniren, the Argentine government's public service renegotiation
unit.

Operating profits in the first quarter of 2006 reached ARS10
million, a 140% increase compared to the first quarter of 2005,
BNamericas reports.

Transener owns the national network of high-voltage power
transmission lines, which consist of nearly 8,800km of lines
together with the approximately 5,500km in its Transba
subsidiary's network.

                        *    *    *

As reported on Dec. 16, 2005, the Argentine arm of Fitch Ratings
upgraded to BB(arg) from B(arg) its rating on the country's
largest power transmission company, Compania de Transporte de
Energia Electrica en Alta Tension aka Transener S.A.

                        *    *    *

On Feb. 23, 2006, Standard & Poor's Ratings Services raised its
local and foreign currency ratings on Argentina's largest
electricity transmitter, Compania de Transporte de Energia
Electrica en Alta Tension Transener S.A. aka Transener to 'B-'
from 'CCC+', and removed the ratings from CreditWatch with
positive implications.

S&P said the outlook is stable.  The ratings were originally
placed on CreditWatch Dec. 2, 2005.


TRANSPORTADORA DE GAS: Posts ARS17.9 Mil. First Quarter Net Loss
----------------------------------------------------------------
Transportadora de Gas del Norte aka TGN told CNV, the securities
regulator of Argentina, that it incurred ARS17.9 million net
loss and ARS8.4 million net profit in the first quarter of 2006.

Business News Americas reports that the company was affected by
currency exchange losses caused by debt due to a stronger
dollar.

BNamericas states that total revenue increased 10% to ARS122
million and operating profit increased 32.5% to ARS54.7 million.
Gas transport sales amounted to ARS118 million -- a 12.2% boost
-- while sales from the operation as well as maintenance of gas
pipelines dropped 26% to ARS4 million.

BNamericas relates that TGN said there have been no advances in
license renegotiation process with regards to the concession
contract with the government.

A company filing states that contracted network transport
capacity at the end of 2005 reached 53.4 million cubic feet a
day (Mf3/d).  It does not include 1Mf3/d from a gas trust fund
that came into effect in February 2006.  Of that 53.4Mf3/d, 73%
will be used to meet local demand while the rest will be sent to
Chile, Uruguay and Brazil.

                        *    *    *

As reported on Apr. 4, 2006, Standard & Poor's International
Ratings, LLC, Sucursal Argentina placed Transportadora de Gas del
Norte S.A.'s ordinary shares in circulation class A and B, of 1
vote each and nominal value US$1, in category 4.  The balance was
done on Dec. 31, 2005.

These issues carry S&P's default ratings:

   -- Obligaciones Negociables simples, not convertible into     
      shares, for US$175,000,000;

   -- Obligaciones Negociables Serie:

        * I for US$20 million,
        * II for US$154.5 million,
        * III for US$10.7 million,
        * IV for US$9.3 million and
        * VI for US$60.5 million

under the Global programme of ONs that were due on July 2001.

    -- ONs Serie III for US$50 million,
    -- IV for US$46 million,
    -- V for US$24 million and
    -- VII for US$20 million

under the global programe due on March 1999.




=============
B A H A M A S
=============


WINN-DIXIE: Revises Stalking Horse Bids Schedule & Cure Amounts
---------------------------------------------------------------
D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
in New York, relates that after filing their Motion to Sell,
Winn-Dixie Stores, Inc., and its debtor-affiliates continued to
solicit bids and negotiated the form of agreements with the
original Stalking Horse bidders.  

As a result, one of the original Stalking Horse bids was
terminated, another Stalking Horse bidder increased its bid for
four alternative stores for a total bid of US$2,500,000, and the
Debtors chose an additional Stalking Horse bid for Store No.
719, which had no prior bid.

Accordingly, the Debtors revised the schedule for the Stalking
Horse Bids:

       Bidder                       Store No.   Purchase Price
       ------                       ---------   --------------
       Sunrise Properties               208       US$300,000
       Sunrise Properties               211          300,000
       Sunrise Properties               339        1,050,000
       Sunrise Properties               372          850,000
       Fine Foods Gourmet Markets       719          325,000
       Publix Supermarkets              643          400,000
       Publix Supermarkets             2357          400,000
       WS Bravo Supermarket            2257          675,000

The Debtors' proposed cure amounts to each of the Additional
Stores are:

                     Store No.     Cure Amount
                     ---------     -----------
                       735           195,945
                       372           108,730
                       613            72,800
                       240            70,851
                      2650            56,681
                       149            50,309
                       738            32,506
                       301            31,304
                       409            27,703
                       185            15,011
                       215            11,024
                      2254             7,108
                       339             6,059
                      2298             4,363
                       659             2,971
                      2330             2,420
                      2357             1,264
                       217               757
                       208               212
                       719                26
                        71                 0
                       192                 0
                       205                 0
                       211                 0
                       310                 0
                       516                 0
                       602                 0
                       643                 0
                       695                 0
                       725                 0
                      1571                 0
                      1579                 0
                      2257                 0
                      2324                 0
                      2387                 0

               Landlords Object to Cure Amounts

Sixteen landlords dispute the Debtors' cure amounts and assert
the correct cure amount for their Leases:

                                                     Asserted
    Landlord                            Store No.   Cure Amount
    --------                            ---------   -----------
    Boggy Creek Marketplace, Inc.          2254     US$22,271
    Benderson Development                   613       145,178
    SKS Properties, L.C.                    659        47,597
    TA/Western, LLC                         217        66,594
    Gator Jacaranda, Ltd.                   211         9,047
    Gator Carriage Partners, Ltd.           339         6,066
    Inland Southeast Countryside LP         738        65,956
    JEM Investments, Ltd.                   602       122,882
    JDN Realty AL, Inc.                     409        56,122
    Gooding's Supermarkets, Inc.           2387        11,180
    Greater Properties, Inc.               2387        78,124
    Weston Road Shopping Center, LLC        310       105,654
    Cairo Sun Properties, Ltd., LLLP        192         5,715
    Treasure Coast Plaza Development JV    2357        60,350
    Turney Dunham Plaza Partners LP        2298        10,914
    Principal Life Insurance Company        643        16,023

The Landlords ask the U.S. Bankruptcy Court for the Middle
District of Florida to:

    (a) sustain their objections as to the cure amounts they
        asserted plus any additional amounts; and

    (b) require the Debtors or the assignee of the Leases to
        continue to comply with the obligations under the lease
        to pay indemnification obligations and accrued but not
        yet billed year-end adjustments in the regular course of
        business.

The Landlords also object to the assumption of the Leases absent
adequate assurance of future performance.

Principal Life contends that if Publix is not the Successful
Bidder for the lease of Store No. 643, it preserves its right to
review and approve the Successful Bidder and to require proof of
adequate assurance once the Successful Bidder is determined.

Principal Life objects to the Debtors' request to the extent
they will sell and assign the Lease without payment of all cure
amounts.

             Vogel's Objection and Cure Amount

Vogel and Vogel, owner and landlord for Store No. 1571, asserts
that while the rent for the Store has been paid through April
2006:

    (a) some of the 2005 real estate taxes due under the Lease
        are in arrears for 3,656;

    (b) a portion of the 2006 real estate taxes, in the pro
        rated amount of US$8,554, is owed through April 30,
        2006, and US$70 per day after;

    (c) it is also entitled to rent, pro-rated taxes and other
        rent-related charges through and including May 18, 2006,
        or such other date that any assumption and assignment
        becomes effective, plus reasonable attorneys fees and
        costs that it incurs in filing and pursuing its
        Objection and in collecting rent and other charges that
        may be due under the terms of its lease.

Karen K. Specie, Esq., at Scruggs & Carmichael, P.A., in
Gainesville, Florida, also asserts that the Debtors are
obligated under the Lease to return possession of the premises
in as good a condition as originally received.  Since Vogel has
not been able to inspect the premises, it is not known what
repair or reconditioning expenses will have to be incurred.

Vogel reserves the right to amend its Objection to include any
additional cure amounts.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King
& Spalding LLP, represent the Debtors in their restructuring
efforts.  Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors.  Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors.  Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee.  When the Debtors filed for protection from their
creditors, they listed US$2,235,557,000 in total assets and
US$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 37; Bankruptcy Creditors' Service, Inc., 215/945-
7000).


WINN-DIXIE: Court Denies Former Employees & Retirees' Motion
------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
denies Richard Ehster, Gary Osborne, Scott Hunt, Stan Timbrook
and John Gardner's request, provided that:

    (a) Winn-Dixie Stores, Inc., and its debtor-affiliates will
        provide available information to the Claimants;

    (b) the Official Committee of Unsecured Creditors will
        consider, as part of its examination of the Debtors, any
        information provided to it by the Claimants; and

    (c) the Creditors Committee will provide the Claimants with
        a copy of its examination report when it is publicly
        filed with the Court.

Judge Funk rules that the Order is without prejudice to the
Claimants' right to seek additional discovery in the event that
they determine their need for information is not available in
the Creditors Committee's examination.

                         Background

As reported in the Troubled Company Reporter on April 24, 2006,
Richard Ehster, Gary Osborne, Scott Hunt, Stan Timbrook and John
Gardner are former Winn-Dixie employees and retirees with claims
based on their interests in the Debtors' "MSP" retirement plan.

The Claimants seek to examine, pursuant to Rule 2004 of the
Federal Rules of Bankruptcy Procedure:

    (a) dividends paid and other transfers to shareholders of
        the Debtors;

    (b) the Debtor's "MSP" retirement plan;

    (c) life insurance policies owned by the Debtors; and

    (d) communications between Debtors and other persons, which
        concern, reflect or in any way relate to dividends, the
        retirement plan and life insurance policies.

The Claimants also ask the U.S. Bankruptcy Court for the Middle
District of Florida to direct Winn-Dixie Stores, Inc., and its
debtor-affiliates to produce all documents, which in any way
refer to, reflect, or relate to any fact within the scope of the
topics of inquiry.

                       Debtors Object

Winn-Dixie Stores, Inc., and its debtor-affiliates ask the U.S.
Court to deny Richard Ehster, Gary Osborne,
Scott Hunt, Stan Timbrook and John Gardner's motion because the
discovery they requested is:

    (a) duplicative of an examination of the Debtors being
        conducted by the Official Committee of Unsecured
        Creditors, and therefore would impose duplication and
        unnecessary expense on the Debtors' estates; and

    (b) overbroad, unduly burdensome, and oppressive.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King
& Spalding LLP, represent the Debtors in their restructuring
efforts.  Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors.  Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors.  Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee.  When the Debtors filed for protection from their
creditors, they listed US$2,235,557,000 in total assets and
US$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 37; Bankruptcy Creditors' Service, Inc., 215/945-
7000).




=============
B O L I V I A
=============


* BOLIVIA: Orders BBVA to Hand Back Shares of Oil Companies
-----------------------------------------------------------
The Bolivian government has ordered Spanish company Banco Bilbao
Vizacaya Argentaria S.A. or BBVA to hand over shares in oil
companies that were nationalized, El Pais, a Spanish newspaper,
reports.  The report also added that according to the Efe
newswire, the bank has to comply with the order in three days or
the government will take over energy facilities.

According to El Pais, the government's order was made in
connection with the shares of unnamed companies that are
currently controlled by pension funds.  This has underlined the
conflict between Bolivia and foreign oil and gas companies.

A bank in Switzerland, which was identified by the El Pais'
report as Zurich, was also given the same order, Dow Jones
Newswires reports.

Bolivia's natural gas and oil sales abroad totaled US$1.3
billion in 2005, accounting for half of the country's total
exports.  Bolivia has South America's second-largest natural gas
reserves after Venezuela.  The country has about 31 trillion
cubic feet of proven gas reserves.

                        *    *    *

Fitch Ratings assigned these ratings on Bolivia:

                     Rating     Rating Date
                     ------     -----------
   Country Ceiling    B-       Jun. 17, 2004
   Long Term IDR      B-       Dec. 14, 2005
   Local Currency
   Long Term Issuer
   Default Rating     B-       Dec. 14, 2005




===========
B R A Z I L
===========


BANCO BRADESCO: Pays BRL308 Million for Control of Bradesplan
-------------------------------------------------------------
Banco Bradesco SA, the largest private bank in Brazil, will pay
BRL308 million to Bradespar, its non-financial investment unit,
for 100% control of its other non-financial unit, Bradesplan,
Business News Americas reports.

This will bring in BRL58 million to the second quarter financial
results of Bradespar, which reported a 1.77% decrease in net
profits in the first quarter, Banco Bradesco told BNamericas.  
Bradespar's first quarter net profits was BRL120 million.

Headquartered in Sao Paulo, Brazil, Banco Bradesco S.A. Banco
-- http://www.bradesco.com.br/-- prides itself on serving
low-and medium-income individuals in Brazil since the 1960s.
Bradesco is Brazil's largest private bank, with more than 3,000
banking branches, and also a leader in insurance and private
pension management.  Bradesco has branches throughout Brazil as
well as one in New York, two in the Bahamas, and four in the
Cayman Islands.  Bradesco offers Internet banking, insurance,
pension plans, annuities, credit card services (including
football-club affinity cards for the soccer-mad population), and
Internet access for customers.  The bank also provides personal
and commercial loans, along with leasing services.

                        *    *    *

As reported in the Troubled Company Reporter on Feb. 23, 2006,
Moody's Investors Service shifted Banco Bradesco S.A.'s 'C-'
bank financial strength rating to positive from stable.


BANCO NACIONAL: Adopts New Methods to Simplify Financing Process
----------------------------------------------------------------
Banco Nacional de Desenvolvimento Economico e Social aka BNDES  
has adopted an additional collection of measures for the
simplification of its financing processes.  Accordingly, the
Bank follows a route to democratize the access to credit, by
reducing costs to the final borrower.  The steps adopted by
BNDES have already resulted in a significant drop in the average
time for approvals of the Special Agency for Industrial
Financing Operations:

   -- in January/April of current year, the average time was
      just five days; and  
   -- in January/April 2005, it was nine days.

In other words, a reduction of 44% in the period.  It should be
noted that, in 2002, the average time for approval was 25 days.

Among the measures now approved, it is highlighted the end of a
previous consultation requirement for BNDES Automatic operations
such as financing to investment projects up to BRL10 million, in
order to expedite the analysis and approval of operations with
the financial agents; and a flexibility in the requirement of
guarantees for BNDES Automatic operations.

These measures contribute mainly to facilitate the credit access
to micro, small and medium enterprises, which play an important
role in employment and income generation and represent around
25% of BNDES total disbursements.

In April, BNDES adopted rules and procedures to simplify export-
financing operations, creating the Agile pre-Shipment modality,
which allows the beneficiary enterprises an export confirmation
process, simpler in relation to the previous procedures.

                        *    *    *

As reported in the Troubled Company Reporter on March 3, 2006,
Standard & Poor's Ratings Services raised its foreign currency
counterparty credit rating on Banco Nacional de Desenvolvimento
Economico e Social S.A. aka BNDES to 'BB' with a stable outlook
from 'BB-' with a positive outlook.  The company's local
currency credit rating was also shifted to 'BB+' with a stable
outlook from 'BB' with a positive outlook.


BRASKEM SA: To Discuss Polialden Merger in Shareholders Meeting
---------------------------------------------------------------
Braskem SA and Polialden Petroquimica SA are inviting their
respective shareholders to participate in Extraordinary General
Shareholders' Meetings on May 31, 2006, at which the proposed
merger of Polialden with and into Braskem will be discussed.  
This proposed merger is consistent with Braskem's commitment to
add value for all of its shareholders, in addition to permitting
the company to streamline its corporate structure and capture
important synergy gains, thereby further improving its
competitiveness.

                      About Polialden

Polialden Petroquimica SA produces, processes, and markets high
density polyethylene and other chemical and petrochemical by-
products.

                       About Braskem

Braskem -- http://www.braskem.com.br/-- is a thermoplastic
resins producer in Latin American, and is among the three
largest Brazilian-owned private industrial companies.  The
company operates 13 manufacturing plants located throughout
Brazil, and has an annual production capacity of 5.8 million
tons of resins and other petrochemical products.

                        *    *    *

As reported in the Troubled Company Reporter on April 10, 2006,
Fitch Ratings and Standard& Poor's Ratings Services assigned
these ratings to Braskem S.A.:

   Fitch Ratings Services:

     -- BB- on the proposed offering of US$200 million senior
        unsecured perpetual bonds to be issued.

   Standard & Poor's Ratings Services:

     -- BB on local- and foreign-currency corporate credit
        ratings; and

     -- BB on forthcoming US$200 million perpetual bonds.


COMPANHIA PARANAENSE: Net Profit Up 118% in First Quarter 2006
--------------------------------------------------------------
Companhia Paranaense de Energia Companhia Paranaense de Energia
Sam aka Copel reported its operating results for the first
quarter of 2006.

   -- Net Operating Revenues:

      BRL1.3 billion -- a 14.3% increase compared to the same
      period of 2005.
   
   -- Operating Income:

      BRL273 million -- 110% higher than the amount recorded in
      the previous year.
    
   -- Net Income:

      BRL171 million or BRL0.62 per thousand shares, -- 117.7%
      higher than the amount recorded in 1Q05 with
      BRL78 million.

   -- Increase in total electric power consumption: 1.7%

   -- EBITDA:

      BRL364 million, 61.9% higher than the amount recorded
      in the first quarter of 2005.

   -- Return on Equity: 12.4% p.a.
    
   -- As of June 1, 2005, COPEL has not been recording
      provisions for payment under the gas supply contract
      among:

          * Copel,
          * Petrobras and
          * Compagas

      due to its termination.
    
   -- On April 13, 2006, ANEEL approved the constitution of      
      guarantees offered by COPEL in order to guarantee the
      agreement concerning the gas purchase for Araucaria
      Thermoeletric Power Plant.  The Company expects to revert
      in the next quarter to the surplus provisions that had
      been constituted for the gas supply contract. In the
      first quarter of 2006, COPEL booked the penalties and
      interest on the provisioned amounts.
   
   -- COPEL's consolidated balance sheet presents, in addition
      to the figures of wholly owned subsidiaries:

          * COPEL Geracao,
          * COPEL Transmissao,
          * COPEL Distribuicao,
          * COPEL Telecomunicacoes and
          * COPEL Participacoes,

       Compagas' and Elejor's figures.

Headquartered in Parana, Brazil, COPEL aka Companhia Paranaense
de Energia SA -- http://www.copel.com/-- transmits and
distributes electricity to more than 3 million customers in the
state of Paran and has a generating capacity of nearly 4,600 MW,
primarily from hydroelectric plants.  COPEL also offers
telecommunications, natural gas, engineering, and water and
sanitation services.  The company restructured its utility
operations in 2001 into separate generation, transmission, and
distribution subsidiaries to prepare for full privatization,
which has been indefinitly postponed.  In response, COPEL is
re-evaluating its corporate structure.  The government of Paran
controls about 59% of COPEL.

                        *    *    *

Copel's BRL100,000,000 debentures due March 1, 2007, is rated
Ba3 by Moody's.


COMPANHIA VALE: Chinese Steelmakers Resist 19% Hike on Iron Ore
---------------------------------------------------------------
As reported yesterday, Companhia Vale do Rio Doce aka CVRD
concluded iron ore price talks with German steelmaker Thyssen
Krupp Stahl AG.  As an outcome of the negotiations, iron ore
prices for Carajas aka SFCJ and Southern System aka SSF fines
increased by 19.0% compared with prices in 2005.  Blast furnace
pellets, both from Tubarao and Sao Luis, will be reduced by
3.0%.

As customary in previous years, the 19% rate would have become
the benchmark for global prices.

Price increases in previous years were normally set after a
first deal was reached between an iron-ore producer and a
steelmaker.

However, China's steelmakers said that the increase won't become
the global benchmark, Bloomberg News reports.

The Association's vice chairman Qi Xiangdong told Bloomberg in a
phone interview that global price will be set by Shanghai-based
Baosteel Group Corp., Japan's Nippon Steel Corp. and Europe's
Arcelor SA.

According to Bloomberg, shares in Baoshan Iron & Steel Co., the
listed unit of Baosteel which is leading negotiations for the
Chinese steelmakers, have fallen 27% since April 1, 2005, the
date at which last year's record 71.5% increase in iron ore
prices took effect.

Meanwhile, Merrill Lynch & Co. said in a note to clients that
Japanese steelmakers will probably settle for the ThyssenKrupp
price as a benchmark, Bloomberg relates.

Vicky Binns at Merrill Lynch believes that once the Japanese
will adopt the 19% price hike, the Chinese firms won't have any
alternative but to follow, Bloomberg says.

Iron ore prices have jumped as a result of rising demands from
China.

Headquartered in Rio de Janeiro, Brazil, Companhia Vale do Rio
Doce -- http://www.cvrd.com.br/-- engages primarily in mining
and logistics businesses. It engages in iron ore mining, pellet
production, manganese ore mining, and ferroalloy production, as
well as in the production of nonferrous minerals, such as
kaolin, potash, copper, and gold.

                        *    *    *

On Jan. 5, 2006, Fitch Ratings assigned a long-term foreign
currency rating of 'BB' to Vale Overseas Limited's proposed
US$300 million issuance due 2016.  Vale Overseas is a wholly
owned subsidiary of Companhia Vale do Rio Doce, a large
diversified mining company located in Brazil.  The notes are
unsecured obligations of Vale Overseas and are unconditionally
guaranteed by CVRD.  The obligation to guarantee the notes
rank pari passu with all of CVRD's other unsecured and
unsubordinated debt obligations.  Fitch expects the proceeds of
this issuance to be used for general corporate purposes and
primarily to pay down US$300 million of Vale Overseas' 9.0%
guaranteed notes due 2013.

Fitch also maintains these ratings for CVRD and CVRD Finance
Ltd., a wholly owned subsidiary of CVRD:

  -- CVRD foreign currency rating: 'BB', Outlook Positive;
  -- CVRD local currency rating: 'BBB' Outlook Stable;
  -- CVRD national scale rating: 'AAA(bra)', Outlook Stable;
  -- CVRD Finance Ltd.: series 2000-1 and series 2000-3:
     'BBB';
  -- CVRD Finance Ltd., series 2000-2 and series 2003-1: 'AAA'.


COMPANHIA VALE: Promotes Stock Auction of Preferred Shares
----------------------------------------------------------
Companhia Vale do Rio Doce aka CVRD promoted a stock sale
auction of 3,309 preferred class A shares it issued regarding
the remaining fractions of its stock merger with Caemi Mineracao
e Metalurgia S.A approved during the Extraordinary General
Shareholders' Meetings held on March 31, 2006.

The average price for CVRD preferred class A shares that was
BRL90.25068 per share as well as the net value of this sale will
be available to the owners of fractions in a proportional basis.

Settlement and delivery date will be on May 19, 2006.

Headquartered in Rio de Janeiro, Brazil, Companhia Vale do Rio
Doce -- http://www.cvrd.com.br/-- engages primarily in mining
and logistics businesses. It engages in iron ore mining, pellet
production, manganese ore mining, and ferroalloy production, as
well as in the production of nonferrous minerals, such as
kaolin, potash, copper, and gold.

                        *    *    *

On Jan. 5, 2006, Fitch Ratings assigned a long-term foreign
currency rating of 'BB' to Vale Overseas Limited's proposed
US$300 million issuance due 2016.  Vale Overseas is a wholly
owned subsidiary of Companhia Vale do Rio Doce, a large
diversified mining company located in Brazil.  The notes are
unsecured obligations of Vale Overseas and are unconditionally
guaranteed by CVRD.  The obligation to guarantee the notes
rank pari passu with all of CVRD's other unsecured and
unsubordinated debt obligations.  Fitch expects the proceeds of
this issuance to be used for general corporate purposes and
primarily to pay down US$300 million of Vale Overseas' 9.0%
guaranteed notes due 2013.

Fitch also maintained these ratings for CVRD and CVRD Finance
Ltd., a wholly owned subsidiary of CVRD:

  -- CVRD foreign currency rating: 'BB', Outlook Positive;
  -- CVRD local currency rating: 'BBB' Outlook Stable;
  -- CVRD national scale rating: 'AAA(bra)', Outlook Stable;
  -- CVRD Finance Ltd.: series 2000-1 and series 2000-3:
     'BBB';
  -- CVRD Finance Ltd., series 2000-2 and series 2003-1: 'AAA'.


GERDAU SA: Moody's Assigns Ba1 Rating on US$450M Bonds Due 2016
---------------------------------------------------------------
Moody's Investors Service assigned a Ba1 foreign currency rating
to the senior unsecured bonds of to be issued by GTL Trade
Finance Inc., an indirect subsidiary of Gerdau S.A. based in the
British Virgin Islands, in the amount of approximately USD 450
million, with maturity in 2016. The proposed bonds will be
unconditionally, irrevocably, jointly and severally guaranteed
by Gerdau S.A. and its Brazilian operational subsidiaries:

   -- Gerdau Acominas S.A.,
   -- Gerdau Acos Longos S.A.,
   -- Gerdau Acos Especiais S.A., and
   -- Gerdau Comercial de Acos S.A.

Proceeds from the issuance will be used to prepay existing debt,
thereby reducing funding costs and improving the debt maturity
profile. The rating outlook is stable.

For the sole purpose of this report, the Brazilian operations of
the Gerdau group, represented by the operating company
guarantors, are herein referred to as "Gerdau Brazil".

The Ba1 foreign currency rating for the proposed bonds reflects
the Ba1 global local currency corporate family rating of Gerdau
Brazil, in addition to incorporating the probability of a
sovereign foreign currency default implied by the government's
Ba3 foreign currency bond rating and the likelihood that, in the
event of such a default, the government would impose a general
foreign currency payments moratorium.

Considered in the Ba1 foreign currency bond rating is Moody's
view of the possibility that Gerdau Brazil, as a key long steel
producer with a good position in the steel export markets, might
be exempt from a debt moratorium, if such were to be imposed.  
Finally, the Ba1 bond rating incorporates the fact that the
Gerdau group generates a substantial portion of its revenues in
foreign currencies, namely in North America by Gerdau
Ameristeel, and the low level of secured debt of Gerdau Brazil.

Gerdau Brazil's Ba1 corporate family rating recognizes its solid
market position in the Brazilian long-steel sector with a
nationwide market share of close to 50% and the operational
diversity provided by its eleven strategically located mills.  
In addition, cost-efficient manufacturing and distribution
operations somewhat mitigate the risks related to the industry's
cyclicality, erratic demand for long-steel in Brazil, and the
commodity nature of its products, ensuring relatively stable
EBITDA margins above 30% even during downturn cycles.
Furthermore, the Ba1 corporate family rating of Gerdau Brazil is
supported by its historically prudent financial management, with
the maintenance of a solid liquidity position and comfortable
financial leverage, duly supported by strong cash flow metrics.

The group plans to invest some US$2.5 billion in the expansion
of capacity and modernization of its Brazilian operations in the
period 2006 -- 2008, including the ongoing expansion of capacity
of the Ouro Branco plant by 50% to 4.5 million tpy of crude
steel.  The ratings of Gerdau Brazil are tempered by the event
risk, potential leverage increase and negative free cash flows
in the forthcoming years deriving from the planned investments.

Although Moody's recognizes the substantial improvement in
corporate governance of the Gerdau group, including the adoption
of Sarbanes-Oxley standards, we note that further enhancements
are needed with regard to the complex ownership structure that
includes many levels of holding companies ultimately controlled
by the Gerdau family.

Moody's has reviewed preliminary draft legal documentation for
the proposed bonds.  The rating assumes that there will be no
material variation from the drafts reviewed and that all legal
agreements are legally valid, binding and enforceable.

The stable outlook reflects Moody's view that Gerdau will
maintain its prudent financial management and comfortable
liquidity position. Accordingly, the ratings of Gerdau Brazil
could be under pressure for possible downgrade if EBIT margin
drops below 20% or Debt to EBITDA ratio grows beyond 2.0x on a
consistent basis, simultaneously with a sharp deterioration in
the liquidity position.  For the bonds in particular, a
substantial increase in the level of secured debt of the
guarantors could lead to a downgrade of the current bond rating.

On the other hand, the ratings of Gerdau Brazil could be under
pressure for possible upgrade if Free Cash Flow to Adjusted Debt
ratio is maintained in the mid teens over the coming years.

Headquartered in Porto Alegre, Brazil, Gerdau is the largest
long steel producer in Brazil and the second largest long steel
manufacturer in North America, with consolidated net revenues of
about US$9 billion in 2005.


SABESP: Posts BRL1,456M First Quarter Gross Operating Revenue
----------------------------------------------------------------
Sabesp aka Companhia de Saneamento Basico do Estado de Sao Paulo
posted its results for the first quarter 2006.

In the first quarter 2006, Sabesp's gross operating revenue
totaled BRL1,456.8 million and the EBITDA totaled BRL695.4
million.  The 16.4% increase in gross operating revenue is
mostly due to these factors:

     -- 4.6% increase in billed water and sewage volume,
     -- tariff readjustment of 9% as of August 2005, and
     -- the migration of customers to higher tariff brackets.
    
Net operating revenue for the period totaled BRL1.3 billion, a
BRL185.9 million increase in comparison to the same period of
2005.  EBIT recorded a substantial growth of 32.6% due to the
lower increase in costs and expenses in comparison to the gross
operating revenue.  EBITDA grew from BRL559.3 million in the
first quarter 2005, to BRL695.4 million in first quarter 2006,
and EBITDA margin grew from 48.3% to 51.7%.
    
The BRL327.9 million net income was BRL176.5 million higher than
recorded in the same period of 2005, resulting mainly from the
increase in sales and the appreciation of the Real in the
period.
    
                        *    *    *

As reported in the Troubled Company Reporter on Oct. 3, 2005,
Standard & Poor's Ratings Services assigned a 'BB-/Stable/--'
corporate credit rating to Companhia de Saneamento Basico do
Estado de Sao Paulo aka Sabesp.


VARIG: Fourteen Entities Interested in Acquiring Assets
-------------------------------------------------------
On May 9, 2006, Viacao Aerea Rio-Grandense or Varig's creditors
voted to accept a plan of reorganization for the company.  
Pursuant to the plan, the airline is allowed to auction its
assets.

Fourteen investors have expressed interest in acquiring Varig's
assets, Bloomberg News reports.

Marcelo Gomes, a consultant of Alvarez & Marsal, the court-
appointed bankruptcy administrator for Varig, said at a news
conference in Rio de Janiero, Brazil, that interested parties
include local and foreign airlines and investment funds.  Mr.
Gomes declined to provide more details, according to Bloomberg.

Varig officials, the Brazilian government bank Banco Nacional de
Desenvolvimento Economico e Social and Judge Luiz Roberto Ayoub
of the Eighth Corporate Court of the District of the State
Capital of Rio de Janeiro, who oversees Varig's bankruptcy case,
met with potential investors prior to the news conference.  The
potential bidders raised concerns about, among others, the
airline's debt, the maintenance of routes and flight schedules,
Bloomberg relates.

As previously reported, BNDES expressed willingness to finance
investors who may want to buy Varig.  BNDES plans to finance up
to 50% of the sale price, Bloomberg says, citing Mr. Gomes.  
Banco do Brasil SA, Latin America's largest bank, is also
willing to provide loans for potential investors, Mr. Gomes
said.

Varig has established a data room to allow potential bidders
access to information about the company starting June 9, 2006.

The auction is expected to take place sometime in July.  The
overall Varig fleet to be offered includes 46 planes.  The
domestic operation would consist of 30 aircraft.

                       About Varig

Headquartered in Rio de Janeiro, Brazil, Varig SA is Brazil's
largest air carrier and the largest air carrier in Latin
America.

Varig's principal business is the transportation of passengers
and cargo by air on domestic routes within Brazil and on
international routes between Brazil and North and South America,
Europe and Asia.  Varig carries approximately 13 million
passengers annually and employs approximately 11,456 full-time
employees, of which approximately 133 are employed in the United
States.

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a
competitive landscape, high fuel costs, cash flow deficit, and
high operating leverage.  The Debtors may be the first case
under the new law, which took effect on June 9, 2005.  Similar
to a chapter 11 debtor-in-possession under the U.S. Bankruptcy
Code, the Debtors remain in possession and control of their
estate pending the Judicial Reorganization.  Sergio Bermudes,
Esq., at Escritorio de Advocacia Sergio Bermudes, represents the
carrier in Brazil.

Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative.  In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402).  Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts.


VARIG: Purchaser Need Not Shoulder Firm's Debts, Says Judge
-----------------------------------------------------------
The purchaser of Varig aka Viacao Aerea Rio-Grandense need not
be obliged to take responsibility in paying the firm's BRL8
billion worth of debts, Luiz Roberto Ayoub -- the Rio de Janeiro
court judge handling the company's restructuring -- was quoted
by Dow Jones Newswires as saying.

According to Dow Jones, Judge Ayoub made the ruling during a
Monday meeting attended by:

    -- Varig directors,
    -- creditors,
    -- potential investors,
    -- Brazilian National Development Bank aka BNDES
    -- local newspaper Estado de S. Paulo,
    -- TAM SA,
    -- Gol Linhas Aereas Inteligentes,
    -- BRA,
    -- OceanAir, and
    -- WebJet.

Dow Jones reports that the judge said, "The Rio state judiciary
decided that the tax debts aren't passed along, adhering to an
opinion offered by the public prosecutors' office."

The ruling, says Dow Jones, clears the way for the company's
sale at an auction to be held in the next two months.  Varig's
operating assets will be put up for sale for a minimum price of
US$860 million, under the terms of the auction.  

While the Varig's domestic assets could be sold for a minimum
price of US$700 million, its commercial wing will not be sold
and instead be left with the company's debts, Dow Jones states.

Dow Jones relates that BNDES promised to offer a BRL167 million
bridge loan to Varig's future buyer to be used in paying the
short-term debts.

The company's data room will be opened on June 9, 2006, Dow
Jones reports.

                       About Varig

Headquartered in Rio de Janeiro, Brazil, Varig SA is Brazil's
largest air carrier and the largest air carrier in Latin
America.

Varig's principal business is the transportation of passengers
and cargo by air on domestic routes within Brazil and on
international routes between Brazil and North and South America,
Europe and Asia.  Varig carries approximately 13 million
passengers annually and employs approximately 11,456 full-time
employees, of which approximately 133 are employed in the United
States.

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a
competitive landscape, high fuel costs, cash flow deficit, and
high operating leverage.  The Debtors may be the first case
under the new law, which took effect on June 9, 2005.  Similar
to a chapter 11 debtor-in-possession under the U.S. Bankruptcy
Code, the Debtors remain in possession and control of their
estate pending the Judicial Reorganization.  Sergio Bermudes,
Esq., at Escritorio de Advocacia Sergio Bermudes, represents the
carrier in Brazil.

Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative.  In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402).  Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts.




===========================
C A Y M A N   I S L A N D S
===========================


CALIBRE 2003-III: Filing of Proofs of Claim Ends Tomorrow
---------------------------------------------------------
Creditors of Calibre 2003-III, Ltd., which is being voluntarily
wound up, are required to present proofs of claim on or before
May 19, 2006, to Martin Couch and Jon Roney, the company's
liquidators.

Creditors must present proofs of claim personally or through
their solicitors at the time and place that the liquidator
specified.  Failure to present claims would mean exclusion from
the benefit of any distribution that the company will make.

The company started liquidating assets on March 28, 2006.

The liquidators can be reached at:

           Martin Couch
           Jon Roney
           Maples Finance Limited
           P.O. Box 1093 George Town
           Grand Cayman, Cayman Islands


JEMKA HOLDINGS: Final Shareholders Meeting Is Set for Today
-----------------------------------------------------------
Shareholders of Jemka Holdings Limited will gather today,
May 18, 2006, for a final general meeting at the offices of:

           Cititrust (Cayman) Limited
           CIBC Financial Centre, George Town
           Grand Cayman, Cayman Islands

Accounts on the company's liquidation process will be presented
during the meeting.

As reported in the Troubled Company Reporter on May 15, 2006,
creditors were required to submit proofs of claims against the
company on today, May 18, 2006.

The company's liquidator can be reached at:

           Buchanan Limited
           Attention: Francine Jennings
           P.O. Box 1170, George Town
           Grand Cayman, Cayman Islands
           Tel: (345) 949-0355
           Fax: (345) 949-0360


PANTEL HOLDINGS: Holds Final Shareholders Meeting Today
-------------------------------------------------------
Pantel Holdings Limited will hold a final shareholders meeting
today, May 18, 2006, at:

            Cititrust (Cayman) Limited
            CIBC Financial Centre, George Town
            Grand Cayman, Cayman Islands
            
Accounts on the company's liquidation process will be presented
during the meeting.

As reported in the Troubled Company Reporter on March 16, 2006,
Pantel Holdings started liquidating assets on April 7, 2006.  
Creditors of the company were required to submit particulars of
their debts or claims on or before May 18, 2006, to Buchanan
Limited, the company's appointed liquidator.

Parties-in-interest may contact the liquidator at:

            Buchanan Limited
            Attention: Francine Jennings
            P.O. Box 1170, George Town
            Grand Cayman, Cayman Islands
            Tel: (345) 949-0355
            Fax: (345) 949-0360


S & J PROPERTY: Proofs of Claim Filing Ends Today
-------------------------------------------------
The last day of verification of creditors' proofs of claim
against S & J Property Co. Ltd. ends today, May 18, 2006.  The
claims are to be submitted to Mark Wanless and Liam Jones, the
company's liquidators.  Creditors who fail to file their proofs
of claims will be excluded from receiving any distribution or
payment that the company will make.

Creditors are required to send their full names, addresses,
descriptions, the full particulars of their debts or claims, and
the names and addresses of their lawyers, if any, to the
liquidators.

The company began liquidating assets on April 5, 2006.

The liquidators can be reached at:

        Mark Wanless
        Liam Jones
        Maples Finance Jersey Limited, 2nd Floor
        Le Masurier House, La Rue Le Masurier
        St. Helier, Jersey JE2 4YE


SHERPAS LIMITED: Filing of Proofs of Claim Ends Tomorrow
--------------------------------------------------------
Creditors of Sherpas Limited are required to present their
claims to Guy Major and Emile Small, the company's liquidators,
on or before May 19, 2006, or be excluded from receiving any
distribution or payment that the company will make.

Creditors are required to send by May 19 their full names,  
addresses, descriptions, the full particulars of their debts or  
claims, and the names and addresses of their lawyers, if any, to  
the liquidators.

The liquidators can be reached at:

        Guy Major
        Emile Small
        Maples Finance Limited
        P.O. Box 1093, George Town
        Grand Cayman, Cayman Islands




===============
C O L O M B I A
===============


* COLOMBIA: Will Form Microfinance Bank with COP120 Bil. Capital
----------------------------------------------------------------
The government of Colombia will form a new bank that will cater
to low-income individuals and provide micro-lending to small
businesses with a capital of COP120 billion, President Alvaro
Uribe told Dow Jones Newswires.

According to Dow Jones, the president said the amount would be
taken Bancafe, the country's state-run bank.

"I see this with a lot of emotion. I think this may be the first
step to prevent poor people from paying the expensive levy of
loan sharks," President Alvaro was quoted by the press as
saying.

As reported in the Troubled Company Reporter on March 30, 2006,
the Colombian government's plans to create a new bank was first
disclosed by Finance Minister Alberto Carrasquilla.

Dow Jones relates that Banco de las Oportunidades, the new bank,
will start operating by the end of June.  It will be funded by
proceeds from the sale of the state's assets.  The finance
minister did not say how much cash will be injected into the new
bank.

Minister Carrasquilla added that the government will not
subsidize the credits granted by the new bank.

"The poor are credible as a source of payment," Minister
Carrasquilla said.  "The behavior of the micro-loan portfolios
is even better than for the big portfolios. We Colombians don't
need alms, we need opportunities."

Finance Ministry's press officer said in a statement that the
new bank will not compete with private banks.  Instead, it will
grant special credit lines to existing banks to finance micro-
lending.  Through the private banks, the government "...will
seek to irrigate low income sectors with credit," the statement
said.

In areas without commercial banks, Oportunidades will open
branches to grant loans directly to micro-businesses.

The Colombian government aims to raise the number of people with
bank accounts and with access to credit.

"The new bank will increase competition in that sector, but I
don't think it will cause disarray among banks that already
developed the business," Edgar Jimenez, a stock analyst with
Promotora Bursatil, was quoted by Dow Jones as saying.  "The
customers will be the main winners."

Dow Jones reports that Andres Florez, head of the government
agency that insures bank deposits, said that the government
plans to sell Bancafe in a public auction after the creation of
Banco de las Oportunidades.  The auction will probably occur
before September.

Mr. Florez will give details about the auction on Wednesday,
President Uribe told Dow Jones.

                        *    *    *

On May 30, 2005, Fitch Ratings has affirmed Colombia's ratings
as:

      -- Long-term foreign currency 'BB';
      -- Country ceiling 'BB';
      -- Local currency 'BBB-';
      -- Short-term 'B'.

Fitch said the Rating Outlook is Stable.




===================
C O S T A   R I C A
===================


* COSTA RICA: Interested in Free Trade Agreement with Europe
------------------------------------------------------------
Costa Rica wants a Free Trade Agreement with Europe, Fresh Plaza
reports.

Roberto Tovar, Costa Rica's minister of foreign affairs, told
Fresh Plaza that an FTA with Europe would mean a historic
opportunity to Costa Rica.

However, Costa Rica will have to make a very serious and tough
proposition and be tough in eventual negotiations, Minister
Tovar was quoted by Fresh Plaza as saying.

Minister Tovar explained to Fresh Plaza that smaller parties
generally get swallowed up by others superior in size and the
European Union is possessive of its agriculture, strongly
protecting the industry with subsidies.  The imports of cheap
European agricultural products could be seen as a threat for
domestic producers.

The minister said that an FTA does not guarantee to favorable
results for banana exports, Fresh Plaza relates.

                        *    *    *

Costa Rica is rated by Moody's:

   -- CC LT Foreign Bank Depst Ba2
   -- CC LT Foreign Curr Debt  Ba1
   -- CC ST Foreign Bank Depst NP
   -- CC ST Foreign Curr Debt  NP
   -- Foreign Currency LT Debt Ba1
   -- Local Currency LT Debt   Ba1

Fitch assigned these ratings to Costa Rica:

   -- Foreign currency long-term debt, BB
   -- Local currency long-term debt, BB
   -- Foreign currency short-term debt, B

Costa Rica carries these ratings from Standard & Poor's:

   -- Foreign Currency LT Debt BB
   -- Local Currency LT Debt   BB+
   -- Foreign Currency ST Debt B
   -- Local Currency ST Debt   B




=============
E C U A D O R
=============


* ECUADOR: Oxy Plans to Continue Operations in Country
------------------------------------------------------
"Despite the actions taken by the government of Ecuador,
Occidental remains committed to an amicable settlement of this
dispute," U.S.-based company Occidental Petroleum said in a
statement in connection with the state's decision to rebuff a
renegotiation in its operating contract.

As reported by Prensa Latina, Fernando Gonzalez -- the chairman
of Petroecuador, the state-run oil firm of Ecuador -- rejected
the proposal made by Occidental Petroleum Corporation to
renegotiate its contract with the firm.

The government of Ecuador has withdrawn Oxy's operating contract
in the country and directed to confiscate the company's assets,
Agence France-Presse reports.

The announcement was made after Occidental was found guilty
selling its stock without proper government approval to Canada's
EnCana Corp. in 2000, LA times relates.

Ecuador's Energy Minister Ivan Rodriguez said in a press
conference, "We have decided to accept the suit and petition
brought by Petroecuador and the prosecutor's office, and the
joint venture contract has been declared void."  

Oxy tried to evade the injunction by offering to resolve the
dispute.  The company also told the LA Times that it is
currently reviewing legal options to defend its interests.

According to AFP, Oxy has been operating in the country since
the 1990s and has been obtaining 100,000 barrels of crude a day
from Ecuador's Amazon basin.  The company is a major investor in
the country's oil industry.

Mr. Rodriguez told reporters that Oxy would have to hand over
its oil fields and production machinery to Petroecuador right
away.
He also added that the state firm has sufficient technical and
economic capability of taking over Occidental's operations.

However, Oxy intends to continue operations in Ecuador as it is
currently trying to negotiate with the government to solve the
dispute, the Oxy's spokesman Larry Meriage told the LA Times.

"We are disappointed that they declined to discuss our offer,
but we're committed to seeking a resolution," Mr. Meriage
related to LA Times.

BNamericas reported that Petroecuador rejected in March
Occidental's offer to pay US$1 billion to end a legal dispute
between the two companies.  Oxy allegedly transferred a 40%
stake in block 15 to EnCana in 2000 without government
permission.  It was also reported that the company overproduced
on some wells and was not complying with its investment plan in
the block.

According to AFP, Petroecuador and the government jointly
discarded Occidental's offer of 20 million dollars and a 50%
share of increased profits from rising oil prices on world
markets.

Experts say that Oxy could still appeal in Ecuadoran and
international courts.

                        *    *    *

The Troubled Company Reporter - Latin America reported on
May 8, 2006, that Petroecuador's employees are threatening to
launch a strike if the government won't provide funding
necessary for the company's operations.  Reports said that
Petroecuador has no funds for maintenance and no funds to repair
pumps in diesel, gasoline and natural gas refineries.

Ecuador's Economy Minister Diego Borja demanded more efficiency
from the state oil company as well as transparency in its
accounts.

Petroecuador has asked the government for US$279 million to pay
debts to suppliers, outsourcing firms and other creditors
threatening to halt services.




=====================
E L   S A L V A D O R
=====================


MILLICOM INTERNATIONAL: Chinese Firm Likely to Win Auction
----------------------------------------------------------
China Mobile, the top telecom operator in China, is foreseen as
the likely winner to win in the Millicom International Cellular
SA auction with a US$6 billion bid, Sinocast reports.

Sinocast recalls that Millicom accepted bids from these firms at
the end of April:

   -- United Arab Emirates' Investcom LLC, which took the
      leading position in the bidding at first, offering over
      US$5 billion.  The firm, however, was surprisingly
      acquired by MTN Group Ltd. of South Africa for US$5.53
      billion.

   -- Kuwait's Mobile Telecommunications Co., and

   -- China Mobile, the most promising bidder.

According to Sinocast, the deal -- if accepted by Millicom --
will be China Mobile's largest overseas acquisition.

The parties involved gave no comments to Sinocast.

As reported in the Troubled Company Reporter on May 8, 2006,
Millicom entered in January a process of due diligence to
consider selling its operations.

According to Business News Americas, Millicom's Latin American
operators include:

   -- Telecel Paraguay,
   -- Telecel Bolivia,
   -- Comcel in Guatemala,
   -- Celtel in Honduras, and
   -- Telemovil in El Salvador.

America Movil S.A. de C.V. aka AMX, a Mexican mobile holding
group, has denied having any interest in acquiring Millicom
International Cellular's assets in Latin America, BNamericas
reports.

Millicom International Cellular S.A. -- http://www.millicom.com/
-- is a global telecommunications investor with cellular
operations in Asia, Latin America and Africa.  It currently has
cellular operations and licenses in 16 countries.  The Group's
cellular operations have a combined population under license of
approximately 391 million people.

The Central America Cluster comprises Millicom's operations in
El Salvador, Guatemala and Honduras.  The population under
license in Central America as at December 2005 is 26.4 million.

The South America Cluster comprises Millicom's operations in
Bolivia and Paraguay.  The population under license in South
America as at December 2005 is 15.2 million.

                        *    *    *

Millicom International's 10% senior notes due 2013 carry Moody's
B3 rating and Standard & Poor's B- rating.




=========
H A I T I
=========


* HAITI: World Bank Urges More International Help to Country
------------------------------------------------------------
A senior World Bank official told Reuters that the government of
Haiti needs more international aid to stabilize the country and
start solving the desperate problems on poverty and violence.

Reuters states that the US$700 million donated to the country is
not enough.

Caroline Anstey, World Bank Director for the Caribbean, informed
Reuters, "Haiti will need long-term support and long-term
resources to really be able to enter onto a path of sustainable
development and break what has been a cycle of conflict,
instability and poverty."

Reuters reports that the International Cooperation Framework, a
26-member group aimed at aiding Haiti, will meet in the country
on May 26 in Brasilia to discuss calls by President Rene Preval
for new funds.

According to Dow Jones, Ms. Anstey said that President Preval
had given the meeting a sense of urgency with recent warnings
that the lack of international aid would erode Haiti's latest
experiment with democracy and the chance to build a better
future.

The World Bank official informed Reuters that the opportunity
for Haiti will not be there forever and that authorities of the
country as well as the donors must move fast.

Donors have often lost interest in Haiti, having a history of
coming in with big money and, within two years, pulling out, Ms.
Anstey revealed to Reuters.  

                        *    *    *

As reported in the Troubled Company Reporter on April 12, 2006,
president-elect Preval appealed for urgent international help to
spur development in the Western Hemisphere's poorest country and
called on all Haitians to join in a national dialogue to promote
peace, democracy and stability.

"Poverty, widespread unemployment, the state of dilapidation of
basic infrastructures that are necessary for development,
chronic insecurity - these are all the major challenges to be
faced by the next government," President Preval was quoted by
the Associated Press as saying.

President Preval explained that increased international
assistance is "indispensable" to Haiti's economic recovery, to
create conditions for investment and job creation, to improve
social services, and to reform democratic institutions including
parliament, municipalities, the judicial system, and the
national police, the AP relates.




===============
H O N D U R A S
===============


* HONDURAS: Plans Changes in Labor Schedule
-------------------------------------------
The government will receive proposals to change the labor
schedule and consumption habits from the Honduran Council of the
Privada Company aka Cohep in the next few days, El Heraldo
reports.

According to El Heraldo, the president of Chohep -- Mario
Canahuati -- expected that the plan would save the country about
US$20 million yearly.

El Heraldo states that Cohep wants to strengthen the National
Electric Energy Company and reduce technical losses and better
power saving measures.

Industrialists, says El Heraldo, think that the recent changing
of the hour should be coupled with modifications to the labor
schedule, stating that some organizations including private
banks work a Tuesday to Saturday week, to improve traffic
problems and fuel consumption.

As reported in the Troubled Company Reporter on May 10, 2006,
Honduras plans to follow Guatemala and Nicaragua's move to
implement daylight saving time and advance official schedule by
one hour.  Jorge Arturo Reina, the Minister of the Interior and
Justice, revealed to Hondudiario that the government will be
considering advancing the time by an hour to take advantage of
the solar light.

Daylight saving time aka DST is a system of adjusting the
official local time forward -- usually one hour -- from its
official standard time for the summer months, to provide a
better match between the hours of daylight and the active hours
of work and school.

Kyodo News states that governments often consider it as an
energy conservation measure as it allows more effective use of
sunlight in summer time.  Because there is less darkness in the
waking day, there is less use of electric lights.

                        *    *    *

Moody's Investor Service assigned these ratings on Honduras:

                     Rating     Rating Date
                     ------     -----------
   Senior Unsecured    B2       Sept. 29, 1998
   Long Term IDR       B2       Sept. 29, 1998


* HONDURAS: President May Consider Buying Fuel from Venezuela
-------------------------------------------------------------
Honduran President Manuel Zelaya told reporters during a press
conference that he's not aversed to buying fuel from Venezuela
to prevent a potential domestic energy crisis.

Experts consider that the move will cause political troubles, El
Universal says.

"I want to remove prejudices and blindness of some people who
think that making deals with Venezuela will put us at a distance
from traditional US friends," President Zelaya was quoted by El
Universal as saying during the press conference.

"The country sovereignty is not on sale. Honduras is independent
and dignified enough as to pursue agreements with other
countries," the Associated Press quoted the President.

Venezuela provides preferential terms under its PetroCaribe
program.  The country would sell fuel with 60% of the value paid
immediately, while the rest will be paid over a long period of
time.

                        *    *    *

Moody's Investor Service assigned these ratings on Honduras:

                     Rating     Rating Date
                     ------     -----------
   Senior Unsecured    B2       Sept. 29, 1998
   Long Term IDR       B2       Sept. 29, 1998

                        *    *    *

Venezuela's foreign currency long-term debt is rated B2 by
Moody's, B+ by Standard & Poor's, and BB- by Fitch.




=============
J A M A I C A
=============


KAISER ALUMINUM: Court Approves AIG Settlement Agreement
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
Kaiser Aluminum Corporation and its debtor-affiliates'
Settlement Agreement with AIG Member Companies.

As previously reported, Kaiser Aluminum & Chemical Corporation
and the AIG Parties have reached a settlement that resolves all
claims against the AIG Parties with respect to the Subject
Policies, including coverage for Channeled Personal Injury
Claims, as well as other present and future liabilities, and all
Tort Claims against the AIG Parties with respect to the Other
AIG Parties Policies.

The principal terms of the Settlement Agreement are:

   (a) The AIG Member Companies will pay 37.5% of trust expenses
       and the liquidation values of Asbestos Personal Injury
       Claims liquidated by the PI Asbestos Trust and Silica
       Personal Injury Claims liquidated by the PI Silica Trust,
       subject to (i) certain quarterly caps and associated
       rollover provisions, and (ii) an aggregate cap of
       US$567,885,590.  The AIG Member Companies will pay the
       Settlement Amount to the Funding Vehicle Trust.

   (b) The AIG Parties have specifically contracted to receive
       all of the benefits of being designated as Settling
       Insurance Companies in the Plan, including, but not
       limited to, the PI Channeling Injunctions.

   (c) KACC Parties agree to release all of their rights under
       the Subject Policies and certain other rights under the
       Other AIG Parties Policies and to dismiss each of the AIG
       Member Companies from the Coverage Actions.

   (d) The Settlement Agreement covers all claims that might be
       covered by the Subject Policies.  KACC will sell the
       Subject Policies back to the AIG Member Companies, and
       the AIG Member Companies will buy back the Subject
       Policies, free and clear of all liens, claims or
       interests, with the AIG Member Companies' payment of the
       Settlement Amount constituting the consideration for the
       buy-back.

   (e) If any claim is brought against any of the AIG Parties
       that is subject to a PI Channeling Injunction, the
       Funding Vehicle Trust will exercise its reasonable best
       efforts to establish that those claims are enjoined as to
       the AIG Parties by the PI Channeling Injunction.

   (f) The AIG Parties will not seek reimbursement of any
       payments that the AIG Member Companies are obligated to
       make under the Settlement Agreement.

A full-text copy of the AIG Settlement Agreement is available
for free at http://bankrupt.com/misc/kaiser_AIGsettlement.pdf

                   About Kaiser Aluminum

Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading  
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications.  The Company, along with its Jamaican subsidiaries
-- Alpart Jamaica Inc. and Kaiser Jamaica Corporation -- filed
for chapter 11 protection on February 12, 2002 (Bankr. Del. Case
No. 02-10429), and has sold off a number of its commodity
businesses during course of its cases.  Corinne Ball, Esq., at
Jones Day, represents the Debtors in their restructuring
efforts.  On June 30, 2004, the Debtors listed US$1.619 billion
in assets and US$3.396 billion in debts.  (Kaiser Bankruptcy
News, Issue No. 96; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


KAISER ALUMINUM: Names Joseph Bellino as Chief Financial Officer
----------------------------------------------------------------
Joseph P. Bellino has joined Kaiser Aluminum Corporation as
executive vice president and CFO.  Mr. Bellino previously was
with Steel Technologies Inc., where he served as CFO and
treasurer for nine years and was a member of the board of
directors from 2002 to 2004.

Mr. Bellino has extensive executive-level expertise in the
manufacturing and distribution industries, primarily in the
areas of business strategy, finance, acquisitions, institutional
investor relationships, corporate governance and building
shareholder value.

"Joe will be a significant asset to the company as he has a
tremendous depth of expertise in finance as well as a solid
background in metals and manufacturing," said Jack A. Hockema,
president and CEO of Kaiser Aluminum.  "He will immediately step
in and help guide the company through a critical time as we
emerge a new company with a solid platform for growth."

From 1996 to 1997, Mr. Bellino was president of Beacon Capital
Advisors Company, a consulting firm specializing in mergers and
acquisitions, valuations and executive advisory services.  
Fifteen years prior, he worked with Rhawn Enterprises, a
privately owned Louisville, Ky.-based holding company with
investments in the manufacturing and distribution industries,
where he rose from chief financial officer to president in 1989.  
Mr. Bellino began his business career in 1974 with the Mead
Corporation.

Mr. Bellino graduated cum laude with a Bachelor of Science
degree in finance from The Ohio State University.  He also holds
a Master of Business Administration degree from the Fisher
College of Business at The Ohio State University.

                Bellino's Employment Agreement

In a regulatory filing with the Securities and Exchange
Commission, Daniel D. Maddox, Kaiser's vice president and
controller, reports that on May 8, 2006, the Company and Mr.
Bellino entered into an employment agreement.

Under the terms of the Employment Agreement, Mr. Bellino will
receive a $350,000 initial base salary and an annual short-term
incentive target equal to 50% of his base salary.  The short-
term incentive is:

      (i) payable in cash;

     (ii) subject to the Company meeting the applicable
          underlying performance thresholds; and

    (iii) subject to an annual cap of three times the target.

For 2006, Mr. Bellino's short-term incentive award will not be
prorated.

The Employment Agreement also provides that Mr. Bellino will
receive 15,000 in restricted shares of the Company's new common
stock at emergence as an initial long-term incentive grant, Mr.
Maddox notes.  Starting in 2007, Mr. Bellino will receive a
US$450,000 annual equity award.  The terms of all equity grants
will be similar to the terms of equity grants made to other
senior executives at the time they are made.

Mr. Bellino is also entitled to severance and change in control
benefits under the terms of the Employment Agreement.

A full-text copy of Mr. Bellino's Employment Agreement is
available for free at:

    http://researcharchives.com/t/s?922

                  About Kaiser Aluminum

Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading  
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications.  The Company, along with its Jamaican subsidiaries
-- Alpart Jamaica Inc. and Kaiser Jamaica Corporation -- filed
for chapter 11 protection on February 12, 2002 (Bankr. Del. Case
No. 02-10429), and has sold off a number of its commodity
businesses during course of its cases.  Corinne Ball, Esq., at
Jones Day, represents the Debtors in their restructuring
efforts.  On June 30, 2004, the Debtors listed US$1.619 billion
in assets and US$3.396 billion in debts.  (Kaiser Bankruptcy
News, Issue No. 96; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


MIRANT CORP: Earns US$467 Million of Net Income in First Quarter
--------------------------------------------------------------
Mirant Corporation (NYSE: MIR) today reported net income of
US$467 million for the quarter ended March 31, 2006, as compared
to US$11 million in net income for the same period in 2005.

Adjusted net income for the first quarter of US$142 million
excludes unrealized mark-to-market gains of US$298 million along
with other non-recurring charges, principally a US$40 million
gain on the sale of assets.  Adjusted EBITDA for the quarter was
US$340 million. The US$173 million increase in adjusted EBITDA
compared to the first quarter of 2005 was driven largely by
higher realized margins from hedging activities by the company's
U.S. business.

"Our hedging strategy has been effective," said Edward R.
Muller, chairman and chief executive officer.  "We are
substantially hedged for the year, which has produced more
predictable financial results mitigating milder weather
experienced across much of the U.S. during the quarter.  Our
performance demonstrates the value created by our hedging
program."

Net cash used in operating activities was US$246 million for the
quarter. Adjusted for bankruptcy payments, operating cash flow
provided a net of US$500 million during the period.

As of March 31, 2006, the company had cash and cash equivalents
of US$1.73 billion. The company's total debt balance is
currently US$4.5 billion.

                         Guidance

Mirant narrowed its adjusted EBITDA guidance for 2006 from
US$1.1 to US$1.3 billion to US$1.15 to US$1.3 billion and
provided initial adjusted EBITDA guidance for 2007 of US$1.3 to
US$1.7 billion.

A full-text copy of Mirant Corporation's Form 10-Q Report is
available at no charge at http://ResearchArchives.com/t/s?929

Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE:
MIR) -- http://www.mirant.com/-- is a competitive energy  
company that produces and sells electricity in North America,
the Caribbean, and the Philippines.  Mirant's investments in the
Caribbean include three integrated utilities and assets in
Jamaica, Grand Bahama, Trinidad and Tobago and Curacao.  Mirant
owns or leases more than 18,000 megawatts of electric generating
capacity globally.  Mirant Corporation filed for chapter 11
protection on July 14, 20032003, (Bankr. N.D. Tex. 03-46590),
and emerged under the terms of a confirmed Second Amended Plan
on January 3, 2006.  Thomas E. Lauria, Esq., at White & Case
LLP, represented the Debtors in their successful restructuring.  
When the Debtors filed for protection from their creditors, they
listed US$20,574,000,000 in assets and US$11,401,000,000 in
debts.  (Mirant Bankruptcy News, Issue No. 97; Bankruptcy
Creditors' Service, Inc., 215/945-7000)

                         *     *     *

As reported in the Troubled Company Reporter on Dec. 8, 2005,
Standard & Poor's Ratings Services placed a 'B+' corporate
credit rating on Mirant and said the outlook is stable.  




===========
M E X I C O
===========


J.L. FRENCH: Committee Hires Foley & Lardner as Bankr. Counsel
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave the
Official Committee of Unsecured Creditors appointed the chapter
11 cases of in J.L. French Automotive Castings, Inc., and its
debtor-affiliates permission to hire Foley & Lardner LLP as its
counsel nunc pro tunc to Feb. 21, 2006.

As reported in the Troubled Company Reporter on April 7, 2006,
Foley & Lardner expected to:

   a) advise the Committee with respect to its rights, powers
      and duties;

   b) advise the Committee in its consultations with the Debtors
      relative to the administrative of the Chapter 11 cases;

   c) advise the Committee in analyzing the claims of the
      Debtors' creditors and in negotiating with the creditors;

   d) advise the Committee with respect to its investigation of
      the acts, conduct, assets, liabilities, and financial
      condition of the Debtors, the operations of the Debtors'
      businesses and the desirability of the continuance of any
      businesses, and any other matters relevant to the Chapter
      11 cases or to the formulation of a plan;

   e) assist the Committee in its analysis of, and negotiations
      with, the Debtors or any third party concerning matters
      related to, among other things, DIP financing to be
      obtained in these cases and the terms of a chapter 11 plan
      or plans for the Debtors;

   f) assist and advise the Committee with respect to its
      communications with the general creditor body regarding
      significant matters in these cases;

   g) represent the Committee at hearings and other proceedings;

   h) review and analyze all applications, orders, statements of
      operations, and schedules filed with the Court and advise
      the Committee as to their propriety;

   i) assist the Committee in preparing pleadings and
      applications as may be necessary in furtherance of the
      Committee's interests and objections; and

   j) perform any other legal services as may be required and
      are deemed to be in the interests of the Committee in
      accordance with the Committee's powers and duties.

The Firm's professionals bill:

      Professional               Designation         Hourly Rate
      ------------               -----------         -----------
       Judy A. O'Neill            Partner              US$550
       William McKenna            Partner                 490
       Nicole Y. Lamb-Hale        Partner                 425
       Daljit s. Doogal           Partner                 425
       Laura J. Eisele            Partner                 430
       John A. Simon              Associate               385
       David G. Dragich           Associate               370
       James Harrington           Associate               350
       Veronica L. Crabtree       Paraprofessional        150

Judy A. O'Neill, Esq., a Foley & Lardner partner, assures the
Court that the Firm is a "disinterested person" as that term is
defined in Section 101(14) of the US Bankruptcy Code.

Headquartered in Sheboygan, Wisconsin, J.L. French Automotive
Castings, Inc. -- http://www.jlfrench.com/-- is one of the
world's leading global suppliers of die cast aluminum components
and assemblies.  There are currently nine manufacturing
locations around the world including plants in the United
States, United Kingdom, Spain, and Mexico.  The company has
fourteen engineering/customer service offices to globally
support its customers near their regional engineering and
manufacturing locations.  The Company and its debtor-affiliates
filed for chapter 11 protection on Feb. 10, 2006 (Bankr. D. Del.
Case No. 06-10119 to 06-06-10127).  James E. O'Neill, Esq.,
Laura Davis Jones, Esq., and Sandra G.M. Selzer, Esq., at
Pachulski Stang Ziehl Young & Jones, and Marc Kiesolstein, P.C.,
at Kirkland & Ellis LLP, represent the Debtors in their
restructuring efforts.  When the Debtor filed for chapter 11
protection, it estimated assets and debts of more than US$100
million.


MERIDIAN AUTOMOTIVE: Hennigan Replaces Milbank as 1st Lien Atty.
----------------------------------------------------------------
James C. Tecce, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in
New York, advises Judge Walrath of the U.S. Bankruptcy Court for
the District of Delaware that Bruce Bennett, Esq., and the law
firm of Hennigan, Bennett & Dorman LLP now represent the
Informal Committee of First Lien Secured Lenders in connection
with the Debtors' Chapter 11 cases.

Hennigan Bennett substituted in as counsel after the Judge
Walrath disqualified Milbank from further representation of the
First Lien Committee.

Milbank withdrew its notice of appearance and request for
papers.

As reported in the Troubled Company Reporter on May 8, 2006,
the Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware has no difficulty concluding that Milbank,
Tweed, Hadley & McCloy LLP's violation of Model Rule 1.9 and
dogged refusal to acknowledge this violation, warrant
disqualification from its further representation of the First
Lien Committee in Meridian Automotive Systems, Inc., and its
debtor-affiliates' bankruptcy cases.

For these reasons, the Court grants Stanfield Capital Partners,
LLC's request to disqualify Milbank from further representation
of the First Lien Committee.

According to Judge Walrath, the Model Rules of Professional
Conduct of the American Bar Association govern the practice of
law before the United States Bankruptcy Court for the District
of Delaware.  For conduct inconsistent with the Model Rules, an
attorney may be reprimanded or subjected to other disciplinary
action as the circumstances may warrant.

              Concurrent Conflict of Interest

Stanfield Capital Partners, LLC, argued that Milbank's
representation of the Informal Committee of First Lien Secured
Lenders is prohibited by Model Rule 1.7(a), which provides that
"a lawyer shall not represent a client if the representation of
. . . [that] client will be directly adverse to another client."

The Court finds that Stanfield terminated the attorney-client
relationship with Milbank before Milbank undertook the First
Lien Committee representation.  Consequently, the Court
concludes that Model Rule 1.7 is not implicated.

Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies   
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and
other interior systems to automobile and truck
manufacturers.  Meridian operates 22 plants in the United
States, Canada and Mexico, supplying Original Equipment
Manufacturers and major Tier One parts suppliers.  The Company
and its debtor-affiliates filed for chapter 11 protection on
April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-
11176).  James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S.
Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown &
Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq.,
Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young
Conaway Stargatt & Taylor, LLP, represent the Debtors in their
restructuring efforts.  Eric E. Sagerman, Esq., at Winston &
Strawn LLP represents the Official Committee of Unsecured
Creditors.  The Committee also hired Ian Connor Bifferato, Esq.,
at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an
adversary proceeding against Meridian's First Lien Lenders and
Second Lien Lenders to invalidate their liens.  When the Debtors
filed for protection from their creditors, they listed US$530
million in total assets and approximately US$815 million in
total liabilities.  (Meridian Bankruptcy News, Issue No. 27;
Bankruptcy Creditors' Service, Inc., 215/945-7000).


SATMEX: Moves Satellite Launching to May 26
-------------------------------------------
Satelites Mexicanos, S.A. de C.V., a Mexican satellite operator,
moved the launching of its Satmex 6 satellite to May 26,
according to local daily Milenio.

Milenio states that the satellite, which will provide cable TV
service to the US and Latin America, was initially scheduled to
launch on May 17 in French Guiana.

The company did not disclose the reasons for the delay, Business
News Americas reports.

Reports say that Satmex is investing about US$270 million and
has even signed an agreement with Arianespace for the launching
of the satellite.  

Satmex 6 is expected to start operating in July, BNamericas
relates.

Headquartered in Mexico, Satelites Mexicanos, S.A. de C.V.
-- http://www.satmex.com/-- is the leading provider of fixed
satellite services in Mexico and is expanding its services to
become a leading provider of fixed satellite services throughout
Latin America.  Satmex provides transponder capacity to
customers for distribution of network and cable television
programming and on-site transmission of live news reports,
sporting events and other video feeds.  Satmex also provides
satellite transmission capacity to telecommunications service
providers for public telephone networks in Mexico and elsewhere
and to corporate customers for their private business networks
with data, voice and video applications, as well as satellite
internet services.  The Debtor is an affiliate of Loral Space &
Communications Ltd., which filed for chapter 11 protection on
July 15, 2003 (Bankr. S.D.N.Y. Case No. 03-41710).  Some holders
of prepetition debt securities filed an involuntary chapter 11
petition against the Debtor on May 25, 2005 (Bankr. S.D.N.Y.
Case No. 05-13862).  The Debtor, through Sergio Autrey Maza, the
Foreign Representative, Chief Executive Officer and Chairman of
the Board of Directors of Satmex filed an ancillary proceeding
on Aug. 4, 2005 (S.D.N.Y. Case No. 05-16103).

Matthew Scott Barr, Esq., Luc A. Despins, Esq., Paul D. Malek,
Esq., and Jeffrey K. Milton, Esq., at Milbank, Tweed, Hadley &
McCloy LLP represent the Debtor.  When the Debtor filed an
ancillary proceeding, it listed US$900,000,000 in assets and
US$688,000,000 in debts.


SSA GLOBAL: Infor to Buy Stock in US$19.50-Per-Share Merger Deal
----------------------------------------------------------------
SSA Global Technologies, Inc., and Infor Global Solutions AG
entered into a definitive agreement for Infor to acquire SSA
Global.

Under the terms of the agreement, Infor has agreed to pay
US$19.50 per share in cash to SSA Global's shareholders.  SSA
Global's Special Committee of independent directors, as well as
the Board of Directors approved the agreement.  The parties
anticipate closing the transaction in the third calendar quarter
of 2006.  The closing is subject to certain customary
conditions, including receipt of regulatory approvals and SSA
Global shareholder approval.  Certain shareholders representing
approximately 84% of SSA Global's outstanding shares have
entered into voting agreements to support the merger.

"With this acquisition, Infor will become the third largest
enterprise software provider in the industry with approximately
US$1.6 billion in revenue," said Jim Schaper, Infor's chairman
and CEO.  "Infor has become a significant force in the industry
by assembling and innovating market-specific, best-in-class
enterprise software solutions, which provides customers with a
flexible choice in the market."

"In a rapidly consolidating marketplace we have seen that size
and scale matter," said Mike Greenough, chairman, president and
CEO of SSA Global.  "This transaction brings value to all of our
key stakeholders . our investors, our customers and our
employees."

Kirkland & Ellis LLP advised Infor.  Financing for the
acquisition will be arranged by J.P. Morgan Securities Inc. and
Credit Suisse (USA) LLC and is expected to include a combination
of senior secured first-lien credit facilities and second-lien
debt denominated in both US dollars and Euros.

The Special committee of independent directors was advised by
Mayer, Brown, Rowe & Maw LLP and received a fairness opinion
from Houlihan, Lokey, Howard & Zukin.  Schulte Roth and Zabel
LLP and J.P. MORGAN SECURITIES INC advised SSA Global.

The definitive agreement to acquire SSA Global Technologies,
Inc. was signed by Magellan Holdings, Inc., a wholly owned
subsidiary of Infor Global Solutions AG.  Infor is a portfolio
company of Golden Gate Capital and Summit Partners.

                         About Infor

Infor Global Solutions AG -- http://www.infor.com/-- is one of  
the largest global software providers focused on delivering
world-class enterprise applications to select verticals in the
manufacturing and distribution industries.  Infor delivers
integrated solutions that address the essential challenges its
customers face in areas such as supply chain planning,
enterprise asset management, relationship management, demand
management, ERP, warehouse management, and business
intelligence.  With more than 3,100 employees in 50 global
offices, Infor provides enterprise solutions to almost 24,700
customers in over 100 countries.  

                       About SSA Global

Headquartered in Chicago, Illinois, SSA Global Technologies Inc.
(Nasdaq: SSAG) -- http://www.ssaglobal.com/-- is a leading  
provider of extended ERP solutions for manufacturing,
distribution, retail, services and public organizations
worldwide.  In addition to core ERP applications, SSA Global
offers a full range of integrated extension solutions including
corporate performance management, customer relationship
management, product lifecycle management, supply chain
management and supplier relationship management.  SSA Global has
over 50 locations worldwide, including offices in Mexico,
Argentina and Brazil, and approximately 13,000 active customers
in over 90 countries use its product offerings.  SSA Global(TM)
is the corporate brand for product lines and subsidiaries of SSA
Global Technologies, Inc.  SSA Global, SSA Global Technologies
and SSA GT are trademarks of SSA Global Technologies, Inc.  
Other products mentioned in this document are registered,
trademarked or service marked by their respective owners.

                         *     *     *

Standard & Poor's Ratings Services placed a 'BB-' corporate
credit rating on Chicago, Illinois-based SSA Global Technologies
Inc. in July 2005.  At the same time, Standard & Poor's puta
'BB-' rating, with a recovery rating of '3', to SSA Global's
US$225 million senior secured bank facility, which will consist
of a US$25 million revolving credit facility due 2010 and a
US$200 million term loan due 2011.  S&P said the outlook is
negative.


TV AZTECA: Subsidiary Launches National Campaign in New York
------------------------------------------------------------
TV Azteca, S.A. de C.V., a producer of Spanish language
television programming, disclosed that its fully-owned
subsidiary for the U.S. Hispanic market, Azteca America,
launched its fourth national upfront campaign in New York City.
    
The event gathered more than 500 people, primarily advertisers
related to the dynamic U.S. Hispanic market, who received
thorough information on:

   -- the network's coverage gains,
   -- the performance of its audience levels,
   -- its programming for 2006 and 2007, and
   -- advertising opportunities with Azteca America.
    
"Five years ago we started developing our dream of creating a
U.S. Hispanic broadcast network, and launched our first station
in Los Angeles.  Today we reach all major Hispanic populations
and have a national network status by Nielsen Media Research,"
said Azteca America Chairman, Luis J. Echarte. "Our popular
content, together with a firm determination to succeed, has made
our network to be officially one of ten national U.S. networks,
and poised to become a strong participant."
    
In addition to Azteca America's solid coverage, the popularity
of the network's programming has an unprecedented momentum.  
Full day audiences composed of adults between 18 and 49 years
old grew 150% to a 5% share among U.S. Hispanic audiences,
according to Nielsen Hispanic Television Index, from February
2005 to February 2006.  During the weekends, from 12:00 noon to
7:00 p.m., share has grown to 12% for the same target audiences.
    
"We are not just gaining larger audiences; our programming
attracts superior quality viewers compared with our
competitors," said Adrian Steckel, President and CEO of Azteca
America.  "Our audiences are younger, more affluent and with
more kids than those who watch other Spanish language
broadcasters, in other words they are more likely to spend money
on the products and services advertisers want to sell."
    
In terms of options for advertising, Azteca America produces
substantially all of its shows -- either through TV Azteca or
its production facilities in Los Angeles -- which allows
offering product integration opportunities like no other Spanish
language network in the U.S. Azteca America presents flexible
and creative alternatives that go beyond traditional
advertising, and provide with ample product recall among
audiences, which is essential for a well- rounded media plan.
    
Azteca America executives presented upcoming thrilling
programming that further boost the network's exciting
programming grid, such as:

   -- "Los Protagonistas a Nivel Mundial" with soccer updates
      from Germany;
   -- top quality boxing from "Boxeo Latino";
   -- two new novelas with success in Mexico, "Amor sin
      Condiciones" and "Amores Cruzados";
   -- new versions of their musical reality shows,
      "La Academia V" and "La Academia USA"; and
   -- newscasts and entertainment shows produced in Azteca
      America's digital studio in L.A.

Carlos de la Garza, Head of Sales of Azteca America, presented a
comprehensive study that illustrated how advertising with Azteca
America creates additional value for clients, "A segment of the
audience simply does not watch Univision, Telemundo or
Telefutura, which means that shifting a portion of the ad
budgets to our network brings an unparalleled opportunity to
extend reach at no incremental cost for advertisers."
    
"Media planners base their advertising decisions on elements
that are effectively found in Azteca America, making a buy with
us the smartest decision for clients to successfully tap the
viewers they are most interested in reaching," said Mr. de la
Garza.  He added that Azteca America will be listed in Nielsen's
National Television Index alongside the major English-language
networks starting fourth quarter of 2006.
    

TV Azteca is one of the two largest producers of Spanish-
language television programming in the world, operating two
national television networks in Mexico -- Azteca 13 and Azteca 7
-- through more than 300 owned and operated stations across the
country.  TV Azteca affiliates include Azteca America Network, a
new broadcast television network focused on the rapidly growing
US Hispanic market, and Todito, an Internet portal for North
American Spanish speakers.

                        *    *    *

Moody's Investor Services rated TV Azteca's senior unsecured
debt at B1.




===========
P A N A M A
===========


* PANAMA: Gov't Intensifies Courting for Canal Expansion Aid
------------------------------------------------------------
The government of Panama has increased its efforts in seeking
foreign support for the expansion of its Panama Canal, which is
expected to bring in more than 240,000 jobs to nationals, Prensa
Latina reports.

Prensa Latina recalls that Panama's high-ranking officials
successfully presented the expansion plan abroad and have
captured the interest of the European Union as well as the
United States.

Panamians, however, remain divided with regards to the
expansion, according to Prensa Latina.  A survey conducted by
marketing and research consultants Dichter Neira indicates that:

    -- 57.3% support canal expansion,
    -- 27.2% reject it, and
    -- 15.5% have not made a decision.

Prensa Latina relates that the final decision -- to be disclosed
during a national referendum after the legislature and the
executive have endorsed the proposal -- must come from the
nationals.

As reported in the Troubled Company Reporter on May 16, 2006, a
construction of a new lane along the Panama Canal is being
recommended by the Panama Canal Authority aka ACP to double the
waterway's capacity at an estimated cost of US$5.25 billion.  
ACP had told Business Times that the expansion will be paid by
users of the canal through a graduated toll system.

                        *    *    *

Fitch Ratings assigned these ratings on Panama:

                     Rating     Rating Date
                     ------     -----------
   Country Ceiling    BBB      Apr.  8, 2005
   Long Term IDR      BB+      Dec. 14, 2005
   Short Term IDR       B      Dec. 14, 2005
   Local Currency
   Long Term Issuer
   Default Rating     BB+      Dec. 14, 2005




===============
P A R A G U A Y
===============


* PARAGUAY: Accuses European Union of Obstructing Mercosur
----------------------------------------------------------
Paraguay's President Nicanor Duarte claimed that the European
Union is hindering the free trade agreement with the Southern
Common Market, MERCOSUR, with their protectionist measures,
Prensa Latina reports.

According to Prensa Latina, President Duarte said in a Latin
American integration conference organized by the Belgian
International Affairs Institute, "They want a free market and
flexibility from us, but they don't always practice what they
preach."

President Duarte pointed out that European leaders fiercely
defend subsides and tariffs and affirmed that the EU gives
priority to the United States, putting Latin America in second
place, Prensa Latina states.

Prensa Latina relates that President Duarte also accused the US
of trying to mar the south trade bloc.

Prensa Latina recalls that 2001 free trade negotiations between
Paraguay and the US in Mar del Plata, Argentina, had failed due
to Washington's firm position on agricultural subsidies.

                        *    *    *

Moody's assigned these ratings on Paraguay:

     -- CC LT Foreign Bank Deposit, Caa2
     -- CC LT Foreign Curr Debt, Caa1
     -- CC ST Foreign Bank Deposit, NP
     -- CC ST Foreign Currency Debt, NP
     -- LC Currency Issuer Rating, Caa1
     -- FC Curr Issuer Rating, Caa1
     -- Local Currency LT Debt, WR

                        *    *    *

Standard & Poor's assigned these ratings on Paraguay:

     -- Foreign Currency LT Debt B-
     -- Local Currency LT Debt   B-
     -- Foreign Currency ST Debt C
     -- Local Currency ST Debt   C




=======
P E R U
=======


PETROLEO BRASILEIRO: Will Ink Exploration Accord with PeruPetro
---------------------------------------------------------------
Petroleo Brasileiro aka Petrobras, the federal energy firm of
Brazil, will sign an accord for oil exploration and production
with PeruPetro, the hydrocarbons promotion agency of Peru,
according to a statement by PeruPetro.

Business News Americas relates that the contract will allow
Petrobras to explore the 1.36 million hectare block 117 in Peru
for seven years, with a possible extension of 10 years.  The
block is located in Loreto department's Maranon basin in
northern Peru.

The contract for the block was authorized in March by the
government, BNamericas recalls.

The contract also gives Petrobras production rights on oil for
30 years and on natural gas for 40 years, BNamericas relates.

Petrobras will invest about US$35 million in the minimum work
program, which includes geological and geophysical studies,
seismic works and the drilling of exploratory wells, PeruPetro
said in the statement.

Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro
S.A. aka Petrobras was founded in 1953.  The company explores,
produces, refines, transports, markets, distributes oil and
natural gas and power to various wholesale customers and retail
distributors in the country.

                        *    *    *

Petroleo Brasileiro SA's long-term corporate family rating is
rated Ba3 by Moody's and its foreign currency long-term debt is
rated BB- by Fitch.

                        *    *    *

As reported in the Troubled Company Reporter on April 26, 2006,
in conjunction with the roll out of Issuer Default Ratings and
Recovery Ratings for Latin America Corporates, Fitch Ratings has
taken rating actions on Petroleo de Brasileiro SA.  These
ratings were affected:

  Foreign Currency:

    -- Previous Rating: 'BB-'
    -- New RR: 'BB', Rating Outlook Positive

  US$2.5 billion, Senior Unsecured Notes due 2008, 2013, 2014
  and 2018:

    -- Previous Rating: 'BB-'
    -- New IDR: 'BB+'


* PERU: IDB Grants US$500,000 Loan to Promote Entrepreneurship
--------------------------------------------------------------
The Inter-American Development Bank's Multilateral Investment
Fund disclosed the approval of a US$500,000 loan and US$845,000
grant to promote entrepreneurship among those at the base of the
economic pyramid in Peru.

The initiative will help improve and strengthen a business
incubation model and business development services for:

   -- new undertakings,
   -- foster productive synergies and economies of scale,
   -- finance entrepreneurial initiatives, and
   -- evaluate and disseminate the experience gained.

The market at the base of the pyramid -- approximately 350
million people in Latin America and the Caribbean with an annual
per capita income of less than US$3,500 - represents an
underserved population for which companies could develop new
products and services.  To effectively respond to the special
needs of the BOP market, however, companies have to reformulate
their business models and marketing strategies.

"The project will promote an entrepreneur-friendly environment
to facilitate new business opportunities by strengthening
sponsor companies in the sectors of construction, basic
education and information technologies and by providing these
companies and the resulting enterprises with the best business
practices to ensure their success," said MIF Team Leader Miguel
Aldaz.

Comunion, Promocion, Desarrollo y Liberacion or Coprodeli will
be in charge of the program.  Coprodeli is a Peruvian nonprofit
organization that assists vulnerable groups of the population,
primarily in underprivileged parts of Callao and Lima, through
social advocacy and entrepreneurial activities.  It is also
incorporated in Spain and the United States, where it invites
monetary and volunteer patronage and has access to advisers,
volunteers and donors from the business sector.

Coprodeli is developing an innovative, integral incubation
concept, combining all its social activities and offering
sponsorship and monitoring through three sponsor companies:

   -- Coprovidig SAC focused on low-income housing and
      construction of educational centers,

   -- Copronet SAC  for technical support for free software
      and the information society, and

   -- Ceten SAC to provide primary education services for
      low-income social sectors.  

The Multilateral Investment Fund is an autonomous fund,
administered by the IDB.  It provides grants, investments and
loans to promote private sector growth, labor force training and
small enterprise modernization in Latin America and the
Caribbean.

This MIF-financed program will complement other initiatives
undertaken in Peru, such as training in micro and small business
management, promotion of youth startups, promotion of youth
entrepreneurship and support to artisans of Cuzco, Ayacucho and
Puno.  Its actions are being coordinated through the Foro
Peruano de Capacitacion Laboral.

                        *    *    *

Fitch Ratings assigned these ratings on Peru:

                     Rating     Rating Date
                     ------     -----------
   Country Ceiling     BB      Nov. 18, 2004
   Long Term IDR       BB      Dec. 14, 2005
   Short Term IDR      B       Dec. 14, 2005
   Local Currency
   Long Term Issuer
   Default Rating      BB+     Dec. 14, 2005




=====================
P U E R T O   R I C O
=====================


ADELPHIA COMMS: Judge Morris to Monitor Creditor Disputes
---------------------------------------------------------
The Honorable Robert E. Gerber of the U.S. Bankruptcy Court for
the Southern District of New York appointed U.S. Bankruptcy
Judge Cecelia Morris of the Poughkeepsie, New York, court to
monitor creditor disputes over recovery amounts in the chapter
11 cases of Adelphia Communications Corporation and its debtor-
affiliates, Bloomberg News reports.

Judge Gerber wants to ensure that the ACOM Debtors complete
their sale to Time Warner Inc., and Comcast Corp.

Based in Coudersport, Pa., Adelphia Communications Corporation
-- http://www.adelphia.com/-- is the fifth-largest cable  
television company in the country.  Adelphia serves customers in
30 states and Puerto Rico, and offers analog and digital video
services, high-speed Internet access and other advanced services
over its broadband networks.  The Company and its more than 200
affiliates filed for Chapter 11 protection in the Southern
District of New York on June 25, 2002.  Those cases are jointly
administered under case number 02-41729.  Willkie Farr &
Gallagher represents the ACOM Debtors.  PricewaterhouseCoopers
serves as the Debtors' financial advisor.  Kasowitz, Benson,
Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP
represent the Official Committee of Unsecured Creditors.  
(Adelphia Bankruptcy News, Issue Nos. 129 & 130; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


ADELPHIA COMMS: Court Allows Paying Interest to Unsec. Creditors
----------------------------------------------------------------
Adelphia Communications Corporation and its debtor-affiliates
relate that a number of parties-in-interest have filed
confirmation objections and motions relating to the appropriate
rate of interest, if any, that should accrue on allowed
unsecured claims under their Fourth Amended Joint Plan of
Reorganization.

The holders of the Term Note issued by Ft. Myers Acquisition
Limited Partnership in the outstanding principal amount of
US$108,000,000 as of the Petition Date and secured by an
interest in Olympus Communications, L.P., tell Judge Gerber that
although classified as a secured claim, the FPL Note Claims may
now be treated as an unsecured claim considering that the ACOM
Debtors' Modified Fourth Amended Joint Plan of Reorganization
creates uncertainty about how the Ft. Myers Noteholders' claim
will be treated.

The Ft. Myers Noteholders ask the U.S. Bankruptcy Court for the
Southern District of New York to clarify that any relief granted
with respect to the unsecured creditors' entitlement to pendency
interest will have no evidentiary value or preclusive effect
with respect to the Ft. Myers Noteholders' entitlement, as
secured creditors, to postpetition interest, fees and expenses
under Section 506(b) of the Bankruptcy Code or otherwise.

To the extent that the Ft. Myers Noteholders' claim is treated
as an unsecured claim, the Ft. Myers Noteholders join in the
arguments made by certain unsecured creditors regarding the
entitlement to and rate of postpetition interest on unsecured
claims.

The Ad Hoc Committee of ACC Senior Noteholders asserts that no
postpetition interest is payable because, among others:

    a. the payment of postpetition interest to some but not all
       unsecured creditors would be unfair and inequitable;

    b. rejection of the Plan does not entitle an unsecured
       creditor to postpetition interest at the contract rate;

    c. there is no basis for the payment of contract, default or
       compound interest; and

    d. the "settlement" with the unsecured claims of "trade"
       creditors is inappropriate.

The Official Committee of Equity Security Holders supports all
of the ACC Committee's arguments.

The Equity Committee emphasizes that:

    a. the ACOM Debtors do not have sufficient assets to pay all
       creditors the full principal amount of their allowed
       claims on the Effective Date, thus it is neither fair nor
       equitable to pay postpetition interest to any unsecured
       creditors; and

    b. if the Court finds that unsecured creditors are entitled
       to postpetition interest, that interest should only be
       paid at the federal judgment rate, which is the "legal
       rate."

On the other hand, the Ad Hoc Committee of Arahova Noteholders
asserts that:

    a. the unsecured creditors of solvent bankruptcy estates are
       entitled to postpetition interest on their claims
       because:

       -- the solvency exception is applicable to the ACOM
          Debtors' Case; and

       -- equitable considerations do not weigh against the
          payment of postpetition interest;

    b. the Arahova Noteholders are entitled to postpetition
       interest at the rate specified in their governing
       indentures because:

       -- interest on the Arahova Notes continues to accrue
          postpetition;

       -- equity has no basis to object to the contract interest
          payment;

       -- the Second Circuit has not adopted the federal
          judgment rate approach; and

       -- payment of interest to Arahova Noteholders at the
          contract rate is required to satisfy the fair and
          equitable test pursuant to Section 1129(b)(2)(B) of
          the Bankruptcy Code;

    c. the Arahova Noteholders are entitled to compound interest
       pursuant to their governing indentures; and

    d. the Plan must provide for postpetition interest accruing
       from the Petition Date through the Effective Date.

U.S. Bank National Association, as indenture trustee, supports
the Arahova Committee's arguments.

                  ACOM Debtors' Statement

According to Paul V. Shalhoub, Esq., at Willkie Farr &
Gallagher, in New York, the Modified Plan gives effect to the
state law expectations and entitlements of structurally senior
creditors, with due regard to equitable considerations and the
circumstances through the limitation of those rights to:

    -- contractual simple interest for holders of Notes Claim;
       and

    -- 8% simple interest for holders of Trade Claims and other
       unsecured claims.

The ACOM Debtors believe that the Modified Plan strikes the
appropriate balance between those creditors arguing for full
compound or default rate interest and those arguing that no
interest should accrue at all.

Mr. Shalhoub asserts that the ACOM Debtors' approach on the
interest calculations set in the Modified Plan is fair because
it does not ignore, as some of the objections do, the structural
seniority of creditors of solvent subsidiary Debtors that have
not been substantially consolidated with structurally junior
Debtors.

               US$1 Billion in Interest Allowed

The ACOM Debtors obtained Judge Gerber's approval to pay
US$1,230,000,000 in interest to unsecured creditors under their
Modified Fourth Amended Plan of Reorganization, Bloomberg News
reports.

Judge Gerber said that the interest payments were fair and
appropriate for creditors who have waited to get paid since ACOM
filed for bankruptcy in June 2002, according to Tom Becker at
Bloomberg.

"I think it would be an abuse of my discretion to deny the
payment of pendency interest here," Mr. Becker quotes Judge
Gerber as saying at a hearing last week.

Bloomberg notes that under the terms of the plan, ACOM will pay
unsecured creditors interest at a non-default rate ranging from
6% to 11.875%, depending on the nature of the claim.  Judge
Gerber also authorized ACOM to pay its trade creditors 8%
interest on their claims.

Based in Coudersport, Pa., Adelphia Communications Corporation
-- http://www.adelphia.com/-- is the fifth-largest cable  
television company in the country.  Adelphia serves customers in
30 states and Puerto Rico, and offers analog and digital video
services, high-speed Internet access and other advanced services
over its broadband networks.  The Company and its more than 200
affiliates filed for Chapter 11 protection in the Southern
District of New York on June 25, 2002.  Those cases are jointly
administered under case number 02-41729.  Willkie Farr &
Gallagher represents the ACOM Debtors.  PricewaterhouseCoopers
serves as the Debtors' financial advisor.  Kasowitz, Benson,
Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP
represent the Official Committee of Unsecured Creditors.  
(Adelphia Bankruptcy News, Issue No. 130; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


KMART CORP: Summary Judgment on Rubloff's Claims Draws Fire
-----------------------------------------------------------
As previously reported, Rubloff Development Group, Inc., asks
the U.S. Bankruptcy Court for the Northern District of Illinois
to deny Kmart Corporation's request for a summary judgment
disallowing Rubloff's claims and grant summary judgment in its
favor instead.

Thomas J. Lester, Esq., at Hinshaw & Culbertson LLP, in
Rockford, Illinois, asserted that summary judgment allowing the
Claims in their entirety should be granted because:

    (1) the clear language of the Lease Assumption and
        Assignment Agreement executed between Kmart and Rubloff
        did not release Kmart from its obligations under eight
        subleases entered into by the parties between 1998 and
        2000; and

    (2) Rubloff was damaged in the amounts set forth in its
        Claims by Kmart's breach of contractual obligations
        under the Subleases.

                       Kmart Replies

Kmart Corporation asserts that none of the arguments made by
Rubloff Development Group, Inc., creates any genuine issue,
which would preclude summary judgment in Kmart's favor.

William J. Barrett, Esq., at Barack Ferrazzano Kirschbaum
Perlman & Nagelberg LLP, in Chicago, Illinois, cites Article 27
of the Subleases, which provides that:

    "The covenants and obligations of Sublessor [Kmart] under
    this Sublease shall not be binding upon the Sublessor
    [Kmart] herein named or any subsequent sublessor with
    respect to any period subsequent to the transfer of all its
    interests in the Demised Premises, and, in the event of any
    such transfer, Sublessee [Rubloff] agrees to look solely to
    the transferee [Rubloff] for the performance of any term,
    covenant, obligation, warranty or representation of
    Sublessor [Kmart] hereunder, but only with respect to the
    period beginning with such transfer and ending with a
    subsequent transfer of such interest."

Rubloff has not offered the Court coherent explanation as to why
Article 27 is not fatal to its argument and its Claims, Mr.
Barrett asserts.  Article 27 clarifies that in the event Kmart
transferred its lessee interests, Rubloff would look only to the
new lessee -- in this case, itself -- for performance of the
Sublease, and not to Kmart, which would no longer be able
to deliver possession.

Mr. Barrett contends that Rubloff's argument that Kmart
purportedly breached the Subleases prior to the transfer,
rendering Article 27 inapplicable, fails for two reasons:

    (1) the premise for Rubloff's argument that Kmart breached
        the Subleases by filing a rejection motion is incorrect
        as a matter of law because the motion did not create an
        actionable breach of the Subleases; and

    (2) even if Kmart's filing of the Rejection Motion could be
        construed as a breach, Kmart's status as a debtor
        empowered it to cure that breach, rather than be subject
        to an irreversible acceleration of years of damages.

Mr. Barrett argues that none of the representations Rubloff made
to the Court in seeking approval of the Assignment and
Assumption Agreement is consistent with its current position
that the Court's approval spawned a US$28,000,000 claim for
breach of the Subleases.

By entering into the Assignment and Assumption Agreement,
Rubloff not only took over Kmart as lessee under the Master
Leases but also assumed the obligation as sublessor under the
Subleases, Mr. Barrett says.

Rubloff has also failed to establish any basis upon which the
Court could find that it is entitled to compensation for Kmart's
alleged breach of the Subleases, Mr. Barrett concludes.

Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART
Holding Corporation) -- http://www.bluelight.com/-- operates  
approximately 2,114 stores, primarily under the Big Kmart or
Kmart Supercenter format, in all 50 United States, Puerto Rico,
the U.S. Virgin Islands and Guam.  The Company filed for chapter
11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474).  Kmart emerged from chapter 11 protection on May 6,
2003.  John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps,
Slate, Meagher & Flom, LLP, represented the retailer in its
restructuring efforts.  The Company's balance sheet showed
US$16,287,000,000 in assets and US$10,348,000,000 in debts when
it sought chapter 11 protection.  Kmart bought Sears, Roebuck &
Co., for US$11 billion to create the third-largest U.S.
retailer, behind Wal-Mart and Target, and generate US$55 billion
in annual revenues.  The waiting period under the Hart-Scott-
Rodino Antitrust Improvements Act expired on Jan. 27, without
complaint by the Department of Justice.  (Kmart Bankruptcy News,
Issue No. 110; Bankruptcy Creditors' Service, Inc., 215/945-
7000)


KMART: FLOORgraphics Seeks Reconsideration of Court's Ruling
------------------------------------------------------------
As previously reported, the U.S. Bankruptcy Court for the
Northern District of Illinois barred the introduction of the
March 24, 1998 letter from Ken Kramer to George Rebh for the
purpose of varying the terms of the Retail Advertising License
Agreement dated March 18, 1998, or for the purpose of supporting
a claim of promissory estoppel.

Shortly after the Court entered its ruling, FLOORgraphics, Inc.,
took the deposition of Mr. Kramer, wherein Mr. Kramer testified
unambiguously that his Letter was:

    * a subsequent modification of the RALA;

    * written in response to negotiations that occurred after
      execution of the RALA; and

    * agreed to in writing by both parties.

J. Mark Fisher, Esq., at Schiff Hardin LLP, in Chicago,
Illinois, relates that in summary, Mr. Kramer testified that:

    (a) The Kramer Letter was intended by Kmart, to modify the
        RALA to change the provisions regarding renewal, and to
        bind Kmart and FGI to the new provisions;

    (b) The "discussions" referred to in the Kramer Letter and
        the Rebh Letter as the basis for the modification
        included discussions that occurred after the execution
        of the RALA; and

    (c) As a later writing signed by Kmart and FGI which
        referred to the RALA, the Kramer Letter complied with
        the requirements set forth in the RALA for a contract
        modification.

Gary Ruffing, Mr. Kramer's supervisor at Kmart, corroborates
Mr. Kramer's testimony.

According to Mr. Fisher, based on the new evidence, Kmart's
argument that the Kramer Letter was a mere recitation of
negotiations occurring prior to the execution of the RALA has no
factual basis.

FGI submits that the Kramer Letter should not be barred as parol
evidence because it is a subsequent modification of the RALA
based on subsequent negotiations.  The parol evidence rule does
not apply because the Kramer letter was negotiated, written and
executed after the RALA, Mr. Fisher explains.

FGI, therefore, asks the Court to reconsider its ruling that,
"the Kramer Letter is inadmissible parol evidence."

Mr. Fisher emphasizes that the Kramer Letter imposes new
obligations on FGI, including the duty to continue to provide
Kmart with floor advertising as long as Kmart desires it.  As a
result, new consideration flowed to Kmart for its agreements in
the modification.

                       Kmart Objects

"The Court ruled correctly on this matter, and there is no
reason it should change its ruling," William J. Barrett, Esq.,
at Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP, in
Chicago, Illinois, asserts.

Mr. Barrett recounts that in Mr. Kramer's January 2002
declaration, Mr. Kramer stated that he "reiterated" the supposed
pre-execution agreement on contract renewal.  Mr. Kramer made no
claim that his letter amended, or was intended to amend, the
RALA.

FGI now relies on Mr. Kramer's 2006 deposition testimony that
contradicts his previous declaration, Mr. Barrett points out.

Mr. Barrett contends that FGI had ample opportunity during the
nearly four years since filing its proof of claim to seek and
present the evidence on which it now seeks to rely on.

However, FGI has not given any excuse for failing to:

    * timely present the evidence;

    * make its arguments based on the evidence in response to
      Kmart's request; and

    * explain the inconsistencies in Mr. Kamer's testimony.

According to Mr. Barrett, the Court's January 25 ruling met the
criteria for a partial summary judgment ruling.  FGI, on the
other hand, failed to "put-up-or-shut-up" as required to defeat
a summary judgment ruling.  For this reason, FGI is bound by the
Court's ruling.

Furthermore, Mr. Barrett argues that even if the Court were to
revisit FGI's argument, the Court will determine that the Kramer
Letter does not support a claim for promissory estoppel.

"FGI is belatedly attempting to create a factual issue by
contradicting the sworn statements of its own officers that FGI
previously submitted to [the] Court," Mr. Barrett asserts.

When FGI argued that the Kramer Letter merely clarified the RALA
and presented sworn statements in support of the argument, FGI
was estopped from:

    (i) changing its position; and

   (ii) arguing that its "new evidence" shows the parties
        intended to amend the RALA, or even creates an issue of
        fact when its old evidence and former arguments shows
        they had no intention to do so.

Mr. Kramer's deposition testimony is not only of highly
questionable value, but his statements are inadmissible parol
evidence as well, Mr. Barrett says.

Even if the Court credits Mr. Ruffing's 2006 declaration and
Mr. Kramer's 2006 deposition testimony as showing that Kmart
intended to amend the RALA, FGI did not, Mr. Barrett continues.

The declarations and amendments that FGI submitted to the Court
and to the Federal District Court in the Eastern District of
Michigan prior to, and up until its current request, contained
testimony that FGI's principals and even Mr. Kramer did not
intend to amend the RALA or make a new agreement, but that
instead, the Kramer Letter only recited a prior agreement or
understanding.

                       FGI Talks Back

Mr. Fisher asserts that the Kramer Letter meets all the
requirements needed for a binding contract modification.

Mr. Fisher says FGI's request for reconsideration should be
granted because:

    * The Court's January 25 Ruling expressly refused to grant
      summary judgment ruling, granting in limine relief which
      is "subject to change when the case unfolds";

    * Mssrs. Kramer and Rebh consistently testified that they
      intended the Kramer Letter to be a written modification of
      the RALA so that it would accurately and completely
      memorialize the agreement regarding renewal that the
      parties reached after the RALA was signed;

    * The Kramer Letter, considered without extrinsic evidence,
      constitutes a modification in conformity with the RALA;
      and

    * Kmart cannot bar Mr. Kramer's testimony about the Kramer
      Letter after Kmart invited the Court to interpret the
      letter based on far less probative extrinsic evidence in
      the form of Mr. Rebh's memorandum.

"The [Bankruptcy] Court is free to reconsider its in limine
Ruling as evidence develops throughout the case, and is not
barred by its initial determination," Mr. Fisher reminds Judge
Sonderby.  "Evidence has now developed which supports FGI's
position, and is consistent with the express words of the RALA
and the Kramer Letter."

Headquartered in Troy, Michigan, Kmart Corporation (n/k/anka
KMART Holding Corporation) -- http://www.bluelight.com/--  
operates approximately 2,114 stores, primarily under the Big
Kmart or Kmart Supercenter format, in all 50 United States,
Puerto Rico, the U.S. Virgin Islands and Guam.  The Company
filed for chapter 11 protection on January 22, 2002 (Bankr. N.D.
Ill. Case No. 02-02474).  Kmart emerged from chapter 11
protection on May 6, 2003.  John Wm. "Jack" Butler, Jr., Esq.,
at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the
retailer in its restructuring efforts.  The Company's balance
sheet showed US$16,287,000,000 in assets and US$10,348,000,000
in debts when it sought chapter 11 protection.  Kmart bought
Sears, Roebuck & Co., for US$11 billion to create the third-
largest U.S. retailer, behind Wal-Mart and Target, and generate
US$55 billion in annual revenues.  The waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27,
without complaint by the Department of Justice.  (Kmart
Bankruptcy News, Issue No. 110; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


MUSICLAND HOLDING: Claims Classification & Treatment Under Plan
---------------------------------------------------------------
Under their Joint Plan of Liquidation, Musicland Holding Corp.
and its debtor-affiliates group claims and interests into five
classes:

Class  Description             Claim Treatment
-----  -----------             ---------------
N/A   Administrative Expense  Each holder will receive cash
      Claims                  equal to the unpaid portion of the
                              Allowed Administrative Expense
                              Claim, or other treatment as to
                              which the Debtors and the holder
                              of the Administrative Expense
                              Claim will have agreed upon in
                              writing.

N/A   Wachovia Obligations    Wachovia will receive, in full
                              satisfaction, settlement, release
                              and discharge of, and in exchange
                              for any Allowed Wachovia
                              Obligations treatment as to which
                              the Debtors and Wachovia have
                              agreed upon in the Release
                              Agreement.

N/A   Priority Tax Claims     At the sole option of the Debtors
                              and in full satisfaction of an
                              Allowed Priority Tax Claim, each
                              holder will be entitled to
                              receive:

                               * cash in an amount equal to the
                                 amount of the Allowed Priority
                                 Tax Claim;

                               * other treatment as to which the
                                 Debtors and the holder have
                                 agreed upon in writing; or

                               * equal cash payment on the last
                                 business day of each three-
                                 month period after the
                                 Effective Date, during a period
                                 ending no later than January
                                 11, 2001, totaling the
                                 aggregate amount of the
                                 Allowed Priority Tax Claim plus
                                 simple interest on any
                                 outstanding balance from the
                                 Effective Date calculated at
                                 the interest rate available on
                                 90 day United States Treasuries
                                 on the Effective Date but in no
                                 event greater than 7% per
                                 annum.

  1    Other Priority Claims   Each holder will receive, in full
                               satisfaction and release of the
                               Allowed Other Priority Claim:

                               * cash in an amount equal to the
                                 amount of the Allowed Other
                                 Priority Claim; or

                               * other treatment as to which the
                                 Debtors and the Claimholder
                                 will have agreed upon in
                                 writing.

  2   Other Secured Claims     Each holder will receive, in full
                               satisfaction and release of the
                               Allowed Other Secured Claim:

                               * cash in an amount equal to the
                                 amount of the Allowed Other
                                 Priority Claim; or

                               * other treatment as to which the
                                 Debtors and the Claimholder
                                 will have agreed upon in
                                 writing.


  3    Secured Trade Claims    Except as otherwise provided in
                               the Plan, each holder will
                               receive, in full satisfaction and
                               release of the Secured Trade
                               Claim:

                               * its Pro Rata Share of available
                                 assets and remaining assets;
                                 and

                               * the Secure Trade Creditor
                                 Release.

  4    General Unsecured       Each holder will not be entitled
       Claims                  to receive anything on account of
                               its Claim.

  5    Interests and           On the Effective Date, the
       Interest-related        Existing Stock and Interests will
       Claims                  be cancelled.  Each holder will
                               not receive anything on account
                               of its Interest or Claim.

Headquartered in New York, New York, Musicland Holding Corp., is
a specialty retailer of music, movies and entertainment-related
products.  The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064).  James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts.   Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they estimated more than US$100
million in assets and debts.  (Musicland Bankruptcy News, Issue
No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000)


MUSICLAND HOLDING: Inks Termination Agreement with Wachovia Bank
----------------------------------------------------------------
Musicland Holding Corp., its debtor-affiliates, and Wachovia
Bank, National Association, as successor by merger to Congress
Financial Corporation, as administrative agent, acting for and
on behalf of certain lenders, previously entered into a number
of financing agreements.

On March 27, 2006, the U.S. Bankruptcy Court for the Southern
District of New York approved the sale of substantially all of
the Debtors' assets to TransWorld Entertainment Corporation.

The Debtors have informed Wachovia and the Lenders that as of
March 29, 2006, all obligations are being and will have been
indefeasibly paid in full other than certain continuing
obligations.

The Debtors and Wachovia entered into a termination agreement.  
The parties agree that:

   (a) Wachovia, on behalf of itself and the other Lenders,
       consents to the TWEC Sale;

   (b) The Debtors, at their sole cost and expense, will pay or
       cause to be paid to Wachovia, for the benefit of itself
       and the other Lenders, by federal funds wire transfer:

          * US$4,255,225, which includes accrued interest and
            other charges for each day through March 29, 2006,
            in payment of the outstanding Obligations due to
            Wachovia and the Lenders;

          * US$5,891,843, which will be pledged by the Debtors
            to Wachovia as Cash Collateral; and

          * US$3,500,000, which will be pledged by the Debtors
            to Wachovia as Professional Fee-Carve-Out Cash
            Collateral.

      The Debtors will deliver to Wachovia $13,647,068 in total.

  (c) Upon Wachovia's receipt of the Pay-off Amount:

      * the financing agreements between the Debtors with
        Wachovia and the Lenders are terminated, cancelled and
        of no further force and effect, except for those
        provisions of the Financing Agreement relating to the
        Continuing Obligations;

      * Wachovia and the Lenders will have no further obligation
        to make any Loans, provide any Letters of Credit or
        other financial accommodations in connection with the
        Financing Agreements; and

      * except with respect to the Cash Collateral and the
        Professional Fee Carve-Out Cash Collateral, all security
        interests in and liens upon any and all of the Debtors'
        properties and assets granted to Wachovia, for the
        benefit of itself and the other Lenders, pursuant to the
        Financing Agreements are released and terminated; and

   (d) The parties exchange mutual releases.

A full-text copy of the Wachovia Termination Agreement is
available for free at http://ResearchArchives.com/t/s?956

Headquartered in New York, New York, Musicland Holding Corp., is
a specialty retailer of music, movies and entertainment-related
products.  The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064).  James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts.   Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they estimated more than US$100
million in assets and debts.  (Musicland Bankruptcy News, Issue
No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000)


NEWCOMM WIRELESS: Involuntary Chapter 11 Case Summary
-----------------------------------------------------
Alleged Debtor: Newcomm Wireless Services, Inc.
                P.O. Box 71569
                San Juan, Puerto Rico 00936-8669

Involuntary Petition Date: May 16, 2006

Case Number: 06-00971

Chapter: 11

Court: District of Puerto Rico (Old San Juan)

Petitioner's Counsel: Ruben Nigaglioni, Esq.
                      Nigaglioni & Ferraiuoli Law Offices P.S.C.
                      P.O. Box 195384
                      San Juan, Puerto Rico 00919-5384
                      Tel: (787) 765-9966
                      Fax: (787) 751-2520
         
Petitioner: Atento De Puerto Rico, Inc.
            P.O. Box 908
            Caguas, Puerto Rico 00726

Amount of Claim: Unknown




=================
V E N E Z U E L A
=================


PETROLEOS DE VENEZUELA: 2006 Budget Includes US$2.6 Bil. Deficit
----------------------------------------------------------------
Petroleos de Venezuela SA disclosed on May 12 its 2006 budget in
the Official Gazette, El Universal reports.

Revenues are estimated at US$27.4 billion, an increase of 12% in
comparison to 2005 revenues of US$ 24.5 billion, El Universal
states.

The figures, El Universal says, show a US$2.6 billion deficit.

Experts said that the deficit means PDVSA doesn't have enough
cash flows to meet its investment plans, El Universal relates.  
In 2006, infusion of cash in PDVSA was increased because of the
migration of 32 operating contracts to joint ventures, giving
the state company majority stakes in each field.

The Official Gazette reported that PDVSA's 2006 investments are
estimated at US$9.5 billion.

As previously reported, PDVSA Finance Director Eudomario Carruyo
told Bloomberg News that the company may seek financing of up to
US$3.5 billion from international banks to fund part of its
investment program.

Petroleos de Venezuela SA aka PDVSA is Venezuela's state oil
company in charge of the development of the petroleum,
petrochemical and coal industry, as well as planning,
coordinating, supervising and controlling the operational
activities of its divisions, both in Venezuela and abroad.

                        *    *    *

On Jan. 23, 2005, Fitch Ratings upgraded the local and foreign
currency ratings of Petroleos de Venezuela S.A. aka PDVSA to
'BB-' from 'B+'.  The rating of PDVSA's export receivable
future flow securitization, PDVSA Finance Ltd, was also upgraded
to 'BB+' from 'BB'.  In addition, Fitch has assigned PDVSA a
'AAA(ven)' national scale rating.  The Rating Outlook is
Stable.  Both rating actions follow Fitch's November 2005
upgrade of Venezuela's sovereign rating.


PETROLEOS DE VENEZUELA: PDVSA Gas Makes Domestic Record Sales
-------------------------------------------------------------
PDVSA Gas, Petroleos de Venezuela SA's unit, made a new record
in gas sales within the domestic market.  

The company, on April 24, hit 2,404 million cubic feet a day.  
This figure breaks the highest level reached with this type of
commercial activity on March 22, 2002, when PDVSA Gas registered
2,393 million.

Within this new record in gas sales in Centered- Eastern and
Western Systems, the daily average consumption is generated by:

   -- the electrical sector which registered a total of 520
      million cubic feet standard day;

   -- the petrochemical sector measured a consumption of
      415 million cfsd;

   -- the iron and steel industry showed an average consumption
      of 448 million cfsd; and  

   -- the aluminium sector registered 59 million cfsd.

In this regard, consumption showed by different refineries all
over the country amounted to 181 million; in the oil realm, it
was calculated a consumption of 148 million cfsd and other
economical sectors like textile, glass, paper and domestic
registered a total of 259 million cfsd.

It is important to mention that this new record was set thanks
to a coordinated work and high quality in operations carried out
by the staff working for PDVSA Gas Methane, Production and
Processing Management Departments, as well as workers of PDVSA
Exploration and Production.  It is also relevant to highlight
the valuable support offered by Mixed Companies through their
different sources.

The record broke by PDVSA Gas shows the firm commitment of the
New PDVSA's workers towards an economic and social development
of Venezuela.  Through actions like this, PDVSA Gas makes
possible the timely delivery of gas, a resource useful for
different economic and productive activities in Venezuela; all
this in compliance with the Oil Sowing Plan boosted by the
Bolivarian Administration.

Petroleos de Venezuela SA aka PDVSA is Venezuela's state oil
company in charge of the development of the petroleum,
petrochemical and coal industry, as well as planning,
coordinating, supervising and controlling the operational
activities of its divisions, both in Venezuela and abroad.

                        *    *    *

On Jan. 23, 2006, Fitch Ratings upgraded the local and foreign
currency ratings of Petroleos de Venezuela S.A. aka PDVSA to
'BB-' from 'B+'.  The rating of PDVSA's export receivable
future flow securitization, PDVSA Finance Ltd, was also upgraded
to 'BB+' from 'BB'.  In addition, Fitch has assigned PDVSA a
'AAA(ven)' national scale rating.  The Rating Outlook is
Stable.  Both rating actions follow Fitch's November 2005
pgrade of Venezuela's sovereign rating.


                       ***********


S U B S C R I P T I O N   I N F O R M A T I O N

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Copyright 2006.  All rights reserved.  ISSN 1529-2746.

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