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         T R O U B L E D   C O M P A N Y   R E P O R T E R

               Monday, July 7, 2003, Vol. 7, No. 132

                           Headlines

ACTERNA CORP: Wants to Implement Key Employee Retention Plan
ADELPHIA COMMS: Court Extends Exclusivity Period Until Oct. 30
AEROSTRUCTURES: Completes Asset Sale Transaction with Vought
AIR CANADA: Bank Asks Court to Cap D&O & Administrative Charges
AIR CANADA: Arranges New C$1.8 Bill. Exit and Aircraft Financing

AKORN: Sr. Lenders Intend to Extend Forbearance Pact to July 31
ALARIS MEDICAL: Underwriters Exercise Over-Allotment Option
ALLIANCE GAMING: BB- Rating Affirmed Following Divestiture Pact
AMERCO: Bankruptcy Court Gives Interim Okay on Cohen's Retention
AMERICAN AIRLINES: Lauds Appeals Court Ruling in Pricing Case

AMERICAN AIRLINES: Lays-Off 3,100 Flight Attendants to Cut Costs
AQUILA: Files Electric Rate Case with Missouri Regulatory Body
ATLAS AIR: Considering Chapter 11 Filing to Facilitate Workout
AUSPEX SYSTEMS: Closes $9.25-Million Asset and Patent Sales
THE AUXER GROUP: Changes Name to Viva International, Inc.

BRIDGE TECH: Nasdaq Modifies Terms for Co.'s Continued Listing
BUDGET: Obtains Approval to Expand Scope of KPMG's Retention
BUFFETS: Weak Oper. Performance Prompts S&P to Drop Rating to B+
BURLINGTON IND: Various Creditors Sell $1M Worth of Claims
CEDARA SOFTWARE: Ceases Trading on Nasdaq Effective Today

CHART INDUSTRIES: Sells Greenville Tube Operations for $15.5MM
CIRRUS LOGIC: Sells Semiconductor Test Operations to ChipPac
CLAYTON HOMES: Sets Record Straight re Berkshire Hathaway Deal
CMS ENERGY: Selling Loy Yang Power Plant & Mine for AUS$3.5 Bil.
COUGAR HOLDINGS: DeCoria Maichel Airs Going Concern Uncertainty

CROSS MEDIA: Wants Court Authority to Hire Kramer Levin
CRYOPAK INDUSTRIES: March 31 Working Capital Deficit Tops C$4MM
CSFB MORTGAGE: Fitch Takes Rating Actions on Ser. 2003-C3 Notes
DELTA AIR: Recommends Shareholders Nix 'Mini-Tender' Offer
DYNEGY INC: Reaches Pact with Kroger re 4 Power Supply Contracts

EMAGIN CORP: Shareholders Approve Adoption of Stock Option Plan
ENCOMPASS: Inks Stipulation Resolving Microsoft's Plan Objection
FEDERAL-MOGUL: Court Gives Go-Ahead to Amend Headquarters Leases
FLEMING COS: Sells 15 Inactive Arizona Liquor Licenses to Fry's
GAYLORD ENTERTAINMENT: Selling Majority Interest in Redhawks

GEORGIA-PACIFIC: Will Publish Second-Quarter Results on July 17
GMAC COMMERCIAL: Fitch Rates 7 Note Classes at Low-B/Junk Levels
GMAC COMM'L: Fitch Takes Rating Actions on Series 2001-C1 Notes
GUESS? INC: Comparable Store Sales Figures Climb 11.5% to 24.3%
HAWAIIAN HOLDINGS: Ernst & Young Severs Professional Ties

HEALTHSOUTH: Annual Meeting Set for 3:00 p.m. Today in New York
IMCLONE SYSTEMS: March 31 Net Capital Deficit Balloons to $220MM
INTERSTATE BAKERIES: Look for Q4 & Fiscal 2003 Results by Jul 14
J.P. MORGAN: Fitch Affirms Low-B Ratings of Classes F, G & H
J/Z CBO: Fitch Downgrades Ratings on Class C & D Notes to BB/CC

KINGSWAY FIN'L: Recently Closed Public Offering Raises $101.8MM
KRAMONT REALTY: Fitch Revises BB Pref. Rating Outlook to Stable
LOUDEYE: Appeals Nasdaq Delisting Decision & Requests Hearing
MORTGAGE ASSET: 3 Private Debt Offers Rated at Low-B Levels
MORGAN STANLEY: S&P Cuts Ratings on Classes G & H to B & CCC

MORTGAGE ASSET: Fitch Rates 3 Series 2003-6 Classes with Low-Bs
MEDIX: Ex-Auditors Ehrhardt Keefe Doubt Ability to Continue Ops.
MITEC TELECOM: Names Jean Marc Roberge as New VP - Global Ops.
NASH FINCH: Fitch Affirms & Removes Low-Bs from Watch Negative
NEVADA STAR: Commences Permitting Process for Gold Hill Project

NEXTEL COMMS: Will Host Q2 Earnings Conference Call on July 17
NORTHWEST AIRLINES: Flies 5.98BB Revenue Passenger Miles in June
NORTHWEST AIRLINES: Flight Attendants Sue for Contract Breach
ORBITAL SCIENCES: Issuing $135MM Senior Notes in Private Offering
OWENS CORNING: Court Okays $43-Mill. Enron Settlement Agreement

PICCADILLY CAFETERIAS: S&P Further Junks Credit Rating to CCC-
PHARMACEUTICAL FORMULATIONS: Elects Frank X. Buhler to Board
PREMCOR INC: Will Publish Second Quarter Results on July 24
QUEBECOR MEDIA: Eugene Marquis Resigns as Videotron Unit's CEO
RESI FINANCE: S&P Rates 5 Series 2003-CB1 Note Classes at Low-Bs

RELIANCE: Court Approves Settlement Pact with Unsecured Panel
SAFETY-KLEEN CORP: Seeks to Settle Bayonne Superfund Claims
SALOMON BROS: Fitch Affirms Ratings on Series 1999-C1 Classes
SALON MEDIA: Sells Promissory Notes & Warrants to W.R. Hambrecht
SCM COMMS: Class A Notes' Rating Cut from BBB- to B+

SECURITY INDEMNITY: Rehabilitation Prompts S&P's R Rating
SHC INC: Asks Court for Okay to Use Lenders' Cash Collateral
SPORTS CLUB: S&P Maintains CCC Rating & Says Outlook is Negative
STANDARD MOTOR: S&P Lowers Ratings to Single-B Territory
USG CORP: Court Clears Equis' Retention as Agent & Broker

VICWEST CORP: Canadian Court Extends CCAA Stay Until August 12
VICWEST CORP: Secures C$52MM Financing Commitment from GE Entity
WATERLINK: Asking Authority to Pay Vendors' Prepetition Claims
WEIRTON STEEL: Turns to Buck Consultants for HR Advice
WORLDCOM INC: Court Fixes September 30 Exclusivity Extension

YAHOO INC: S&P Assigns BB+ Corp. Credit & Senior Note Rating

* BOND PRICING: For the week of July 7 - July 11, 2003

                           *********

ACTERNA CORP: Wants to Implement Key Employee Retention Plan
------------------------------------------------------------
Since March 2001, Acterna Corp. has implemented seven rounds of
cost-cutting initiatives and has recently initiated its eighth
work force reduction.  Acterna's cost-cutting initiatives have
primarily focused on consolidating operations, closing excess
manufacturing and other facilities, reducing the size of the work
force and outsourcing the manufacture of certain of its product
lines.

Acterna has also enacted certain benefit reductions for existing
employees.  Through April 2003, Acterna has reduced its workforce
by 2,900 employees and has announced annualized cost savings of
$340,000,000.

In December 2002, the Debtors initiated a retention plan to
combat the anticipated turnover resulting from their continuing
financial decline and ongoing restructuring activities.  The
Prepetition Retention Plan covered 34 key employees and
executives whose responsibilities were directly and significantly
impacted by the ongoing restructuring efforts.

At the Debtors' request, Deloitte & Touche's Global People
Solutions consulting group reviewed the Prepetition Retention
Plan.  On March 26, 2003, Deloitte prepared a report, which
recommended modifications to the Prepetition Retention Plan.
Acterna's board of directors immediately approved the
modifications.

In modifying the Prepetition Retention Plan, Deloitte determined
which modifications were appropriate by:

     (a) interviewing the Chairman of the Board of Acterna
         Corporation, and the Debtors' Chief Executive Officer,
         Chief Financial Officer, General Counsel, and Director of
         Compensation and Benefits regarding the current strategic
         issues facing the Debtors and the immediate retention
         concerns the Debtors need to address;

     (b) reviewing the Prepetition Retention Plan, employment and
         letter agreements pertaining to severance, employee
         turnover statistics, and the Debtors' general severance
         policy to ascertain how well the programs retain and
         motivate employees and supplement the existing
         "employment proposition", which has been adversely
         affected by the Debtors' current financial condition; and

     (c) comparing each program to competitive practice in
         telecommunications and other industries, with a focus on
         restructuring compensation programs implemented by other
         companies that have filed petitions for reorganization
         under Chapter 11.  This review included a comparative
         analysis of 18 telecommunications companies' retention
         programs to determine competitive participation levels,
         opportunities, and total cost.

                               The KERP

Based on the recommendations of Deloitte and the Debtors' Chief
Restructuring Officer, and after extensive negotiations with the
Lenders, the Debtors modified the retention payments owing to key
employees by extending the vesting and payment dates, and
significantly reduced the severance benefits provided under the
Prepetition Retention Plan to develop the Key Employee Retention
and Severance Plan.  In addition, although the KERP provides
participants with reduced benefits, it covers 20 additional
employees and runs deeper through the organization than the
Prepetition Retention Plan in order to address the broader need
to retain employees in Chapter 11.

In drafting the KERP, the Debtors considered the magnitude and
difficulty of the proposed restructuring, balancing the need to
conserve cash against establishing the appropriate incentives for
Key Employees to:

     (1) implement the ambitious cost-reduction initiatives already
         underway;

     (2) implement a strategic refocus of the product portfolio,
         site and line of business shutdowns;

     (3) drive revenue opportunities in new directions; and

     (4) continue their business operations with the least amount
         of disruption to their major customers, vendors and
         suppliers.

The KERP has two principal components:

    (i) a retention component designed to retain the Key Employees,
        and

   (ii) a severance component designed to provide competitive job
        security for the Key Employees.

                        The Retention Program

The Retention Program provides for:

     -- bonuses that are designed to encourage Key Employees to
        remain employed by the Debtors throughout the restructuring
        process.

        In the ordinary course of their business and consistent
        with the Prepetition Retention Plan, the Debtors have made
        two payments, aggregating $2,800,000, to the Prepetition
        Key Employees pursuant to the Prepetition Retention Plan.
        These two prepetition payments, which were made on
        December 15, 2002 and April 15, 2003, total 50% of the
        payments due under the Prepetition Retention Plan.

     -- a stay bonus if the employee remains employed by the
        Debtors on specific target dates.

        The aggregate amount of Retention Payments to be paid to
        the Key Employees under the Plan is $2,700,000.  The
        Debtors propose to make the Retention Payments on
        occurrence of the earlier of:

          (i) one month after the effective date of a
              reorganization plan in these Chapter 11 cases; and

         (ii) May 6, 2004.

        A Key Employee is obligated to return the April 15, 2003
        Prepetition Retention Plan payment in the event that the
        employee is not employed by the Debtors on October 1, 2003.
        However, if a Key Employee is involuntarily terminated
        without cause before the Payment Date, then the Key
        Employee will be entitled to retain the April 15, 2003
        Prepetition Retention Plan payment and to receive a pro
        rata portion of the Retention Payment.  This payment will
        be pro rated based on the time of service during the period
        commencing on April 15, 2003 and continuing through the
        earlier of:

          (i) the effective date of a reorganization plan in
              these Chapter 11 cases; and

         (ii) May 6, 2004.

     -- the establishment of a $500,000 discretionary bonus pool
        for those individuals not entitled to an individual
        Retention Payment.  Eligibility for and awards from the
        discretionary pool will be based on recommendations from
        management, with the approval of the Chief Executive
        Officer and the Chief Restructuring Officer.  Awards under
        the discretionary pool are capped at $30,000 per
        individual.

                        The Severance Program

The Severance Program is intended to provide competitive security
for the Debtors' employees.  Benefits under the Severance Program
are calculated as a percentage of Base Salary.  Potential
severance amounts range from a low of one and one-half months'
Base Salary, to a maximum of nine months' Base Salary.  An
employee is not eligible for Severance Payments if:

    (i) the employee's employment with the Debtors is terminated
        for "Cause," or

   (ii) the employee voluntarily terminates employment with the
        Debtors before the effective date of a reorganization plan,
        provided, however, that an employee will be eligible for
        Severance Payments if the employee voluntarily terminates
        employment with the Debtors after a change of control,
        unless the employee is offered comparable employment.

A "Change of Control" is deemed to have occurred if:

     (1) an entity is or becomes the "beneficial owner" -- as
         determined pursuant to Rule 13d-3 of Section 13(d) of
         the Securities Exchange Act of 1934, as amended -- of
         Acterna securities representing more than 50% of the
         combined voting power of Acterna's then outstanding
         securities;

     (2) the Debtors will merge with or consolidate into any other
         corporation;

     (3) Acterna stockholders approve a plan of complete
         liquidation of Acterna or such a plan is commenced;

     (4) the sale and disposition of all or substantially all of
         the Debtors' assets; or

     (5) a Chapter 11 reorganization plan is confirmed and becomes
         effective in these Chapter 11 cases.

There are 38 Key Employees who have either letter agreements or
other contractual arrangements with the Debtors, which entitle
them to certain benefits, including severance.  Severance
payments to employees with employment contracts are made over
time, and are subject to mitigation by the recipients.  The KERP
provides that Key Employees who are severed will be entitled to
severance not to exceed nine months' Base Salary.

Moreover, the Debtors' prepetition severance program will be
continued for those employees who do not have contractual
arrangements with the Debtors.  However, severance payments to
these employees will be modified from the prepetition program so
that payments will be made over time.  Consistent with the
prepetition severance program, the payments will not be subject
to mitigation by the recipients.  The Debtors' severance program
provides for, upon termination, three-eighth month's Base Salary
per year of service with Acterna, with a minimum of one and one-
half months' Base Salary and a maximum of four and one-half
months' Base Salary.  For employees at or above the director
level, one additional month's Base Salary will be provided,
although the total amount will not exceed four and one-half
months' pay.  Based on the current business plan, the Debtors
contemplate that domestic severance obligations will reach
$3,500,000 during these Chapter 11 cases.

                        Other KERP Conditions

Benefits for a Key Employee are conditioned on the Key Employee's
release of all claims against the Debtors, including those
arising out of employment or the termination thereof, but
excluding rights under the KERP, postpetition compensation and
benefits, all ERISA plan claims, workers compensation,
unemployment insurance, and directors and officer indemnification
coverage.  In addition, a Key Employee's participation in the
KERP automatically terminates, without notice to or consent of
the Key Employee, on the first to occur of:

     -- termination of employment for cause; or

     -- voluntary termination of employment by the employee for
        any reason, other than as contemplated in the Change of
        Control provisions.

To the extent that an employee is otherwise entitled to a KERP
payment, the payment obligation will be triggered if there is a
Change of Control and the employee is not offered comparable
employment for a period of no less than three months at the same
base salary and with severance benefits that are comparable to
those offered in the KERP.

Moreover, the rejection of an employment agreement with a
Key Employee pursuant to Section 365 of the Bankruptcy Code will
not create an entitlement to severance, unless a Change of
Control has occurred and the employee is not offered comparable
employment for a period of no less than three months at the same
base salary and with severance benefits that are comparable to
those offered in the KERP.

                      The Need to Continue KERP

Michael F. Walsh, Esq., at Weil, Gotshal & Manges LLP, in New
York, tells the Court that the successful rehabilitation of the
Debtors' business operations is dependent on the continued
employment, active participation, and dedication of Key Employees
who possess knowledge, experience, and skills necessary to
support the Debtors' business operations.  The Debtors' ability
to stabilize and preserve their business operations and assets
will be substantially hindered if the Debtors are unable to
retain the services of these Key Employees.

By this motion, the Debtors seek the Court's authority to
continue to implement and effectuate the KERP, including, without
limitation, making the plan payments.

These reasons, Mr. Walsh says, justify the retention incentives:

     * The Debtors have expended significant time and resources in
       recruiting and retaining their Key Employees, which has been
       difficult given the pressures facing them;

     * A company in Chapter 11 is not a particularly appealing
       employment option for experienced job candidates, thus
       making it difficult to replace departing Key Employees;

     * To find suitable replacements for these departures, the
       Debtors will have to pay executive search firm fees,
       typically in the range of 25% to 35% of base salaries,
       signing bonuses, moving expenses and above-market salaries
       so as to induce qualified candidates to accept employment
       with a Chapter 11 debtor;

     * The loss of a particular Key Employee could lead to
       additional employee departures;

     * The loss of Key Employees may result in the loss of
       institutional knowledge and key contacts with vendors and
       customers; and

     * The loss of Key Employees will hinder, delay and disrupt the
       Debtors in their pursuit of a timely and successful
       reorganization.

The Debtors believe that the KERP is the most cost-effective
manner in which to protect against attrition and to improve
employee morale.  The KERP will offer financial incentives
designed to be paid only if the Key Employee remains actively
employed by the Debtors during the pendency of the Chapter 11
cases.  By adopting the KERP, the Debtors will be sending a
positive message to their Key Employees that they are a valuable
resource and that their continued employment with the Debtors is
essential to the future of the enterprise, Mr. Walsh maintains.
(Acterna Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


ADELPHIA COMMS: Court Extends Exclusivity Period Until Oct. 30
--------------------------------------------------------------
Marc Abrams, Esq., at Willkie Farr & Gallagher, in New York,
tells the Court that since the last extension of the exclusive
periods, the Adelphia Communications Debtors have been actively
engaged in numerous tasks incident to operating their businesses
in Chapter 11 and forming the predicate for their eventual
emergence.  Most importantly, the ACOM Debtors have:

     A. after a four-day trial and related post-trial issues,
        installed a new Chief Executive Officer and Chief Operating
        Officer;

     B. after analysis and careful consideration by ACOM's Board of
        Directors, relocated their corporate headquarters from
        Coudersport, Pennsylvania to Denver, Colorado.  The Debtors
        sought the Court's approval to enter into the new lease and
        responded to extensive litigation brought by the Equity
        Committee, the Rigas family and Potter County regarding the
        move;

     C. negotiated and set covenants with the DIP Lenders in
        connection with their $1,500,000,000 debtor-in-possession
        financing facility;

     D. hired a team of new senior managers, including a new Chief
        Financial Officer;

     E. selected and appointed Susan Ness and Philip Lochner to
        serve as new directors on the Board;

     F. obtained the Court's approval of a form employment
        agreement for senior management and a form indemnification
        agreement for future directors, including Susan Ness and
        Philip Lochner, to facilitate their efforts to attract and
        retain qualified senior managers and new directors;

     G. implemented a performance retention plan to cover 125
        management employees, including Executive Vice Presidents,
        Senior Vice Presidents, Vice Presidents, and Directors;

     H. continued their migration efforts from ABIZ and the
        attendant claims reconciliation process, including
        extensive negotiations with incumbent local exchange
        carriers and other major vendors that provide services
        pursuant to contracts with ABIZ that partially benefit
        ACOM's estates;

     I. negotiated with certain of their programmers regarding,
        among other things, affiliation agreements and claims
        reconciliation;

     J. negotiated and closed the sale of substantially all of the
        assets of Niagara Frontier Hockey, L.P. and its affiliates,
        amended the related broadcasting agreements and entered
        into a related lease for the "Adelphia Zone";

     K. continued to respond to discovery requests of ML Media
        Partners, L.P. in connection with ML Media's Motion To
        Dismiss Adelphia and Century's counterclaims, Strike
        Defendants' Affirmative Defenses, and Grant Summary
        Judgment in ML Media's favor on its complaint, dated
        March 26, 2003;

     L. managed requests to trade Adelphia equity securities, so as
        to preserve the Debtors' tax benefits, and continued to
        evaluate numerous tax issues;

     M. continued to prepare the Schedules of Assets and
        Liabilities and Statements of Financial Affairs for each of
        the Debtors;

     N. responded to the Equity Committee's "corporate governance"
        litigation;

     O. continued with their extensive audit and financial
        restatement process;

     P. continued to analyze their executory contracts and leases
        to determine whether these agreements should be assumed or
        rejected by the various estates and obtained court orders
        rejecting 57 leases and agreements;

     Q. continued to analyze potential dispositions of non-core
        assets;

     R. continued to cooperate with the SEC and the Department of
        Justice in connection with their ongoing investigations and
        proceedings; and

     S. worked closely with the Committees and senior secured
        lenders and their professionals to keep all parties fully
        informed of the Debtors' finances and efforts to formulate
        a business plan.  Throughout the postpetition period, the
        Constituents' professionals have been given access to the
        Debtors' senior management.  The Constituents' advisors
        have also had open access to the Debtors' counsel and other
        advisors.  The Debtors anticipate that this open exchange
        among the Debtors and the Constituents will continue.

Although their new management is in place and has accomplished a
great deal in a relatively short time, Mr. Abrams admits that the
Debtors have much more to accomplish before emerging from Chapter
11.  In the next four months, the Debtors hope to substantially
conclude the Equity Committee's "corporate governance"
litigation, complete their long-term budget and business model,
and formulate a long-range business plan.  This plan, which
requires input from the Constituents, will lay the foundation for
the development of a consensual plan or plans of reorganization.
A further extension of exclusivity is needed to accomplish these
goals.  While the Debtors intend to proceed as expeditiously as
possible, realistically, the process will take a significant
amount of time.

Mr. Abrams tells the Court that the sheer size and complexity of
these cases supports a finding of cause to extend the Exclusive
Periods.  The Debtors are the sixth largest operator of cable
television systems in the United States, having systems located
in 29 states and Puerto Rico.  As of June 1, 2002, the broadband
networks for the Debtors' cable systems passed in front of
9,000,000 homes and had 5,800,000 basic subscribers.  Currently,
the Debtors employ 14,785 employees.  In addition, the Debtors
operate and hold interests in several non-cable businesses,
including advertising, home security and long-distance telephone
reseller services.

As of June 1, 2002, Mr. Abrams notes that various Debtors owed
$6,800,000,000 in senior secured debt under six different credit
facilities.  In addition, as of June 1, 2002, ACOM owed:

     (i) $4,900,000,000 under 14 series of senior notes issued
         pursuant to nine indentures; and

    (ii) $2,000,000,000 under two series of convertible
         subordinated notes issued pursuant to a single indenture.

In addition to the ACOM Notes, ACOM has issued $1,600,000,000 in
cumulative exchangeable, mandatory and mandatory convertible
preferred stock.  Also, in addition to the ACOM Notes, certain of
the Debtors have issued $2,600,000,000 in various series of
unsecured senior and subordinated notes.

Mr. Abrams contends that the size of the Debtors' operations,
coupled with the multitude of legal and operational challenges
facing the Debtors, makes these cases exceedingly complex.  Since
the Debtors' last exclusivity extension, there have been over 200
entries in the case docket.  Despite the substantial efforts of
the Debtors and their advisors thus far, additional time is
required to stabilize the Debtors' operations and move forward to
the plan process.

According to Mr. Abrams, the Debtors have made substantial
progress towards completing numerous tasks that will help lay the
foundation for proposing a reorganization plan.  Nevertheless,
much remains to be done.  Simply put, the Debtors' new management
team was installed only recently and is focused on laying the
foundation necessary to negotiating a plan or plans of
reorganization.  Plan negotiations cannot commence in earnest
until more of this preparatory work is completed.

"The Debtors' efforts have been focused on stabilizing their
operations and getting their financial house in order," Mr.
Abrams says.  "[Extending the exclusive periods] cannot be
characterized as delaying the Debtors' reorganization for any
speculative purpose or to pressure creditors to accept an
unsatisfactory plan."

Considering the complex issues that continue to arise in these
cases and the sometimes strained dynamics among certain of the
Constituents, Mr. Abrams asserts that the Debtors have not yet
had sufficient time within which to determine how to best
maximize value in these cases, let alone negotiate the
distribution of this value in a plan.  Thus, terminating the
Debtors' Exclusive Periods before the process of negotiating a
plan of reorganization has even begun would defeat the very
purpose of Section 1121 of the Bankruptcy Code -- to afford a
Chapter 11 debtor a meaningful and reasonable opportunity to
negotiate with creditors and equity holders and propose a plan of
reorganization.

"Since the Petition Date, the Debtors have made great strides in
stabilizing their operations and laying the foundation for their
emergence from Chapter 11," Mr. Abrams maintains.  "[A]n
extension of the Exclusive Periods [is] not unreasonable given
the extraordinary facts and circumstances of these cases."

Mr. Abrams insists that the termination of the Debtors' Exclusive
Periods would adversely impact the Debtors' business operations
and the progress of these cases.  In effect, if this Court were
to deny the request for an extension of the Exclusive Periods,
any party-in-interest then would be free to propose a plan of
reorganization for each of the Debtors.  A chaotic environment
with no central focus would ensue.  Conversely, an extension of
exclusivity would enable the Debtors to attempt to harmonize the
diverse and competing interests that exist and to resolve
conflicts in a reasoned and balanced manner.  This role is
precisely what Congress envisioned for a debtor-in-possession in
the Chapter 11 process.

At the ACOM Debtors' request, the Court extended the exclusive
period to file a plan or plans of reorganization through and
including October 20, 2003 and the exclusive period to solicit
and obtain acceptances of that plan through and including
December 22, 2003. (Adelphia Bankruptcy News, Issue No. 36;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


AEROSTRUCTURES: Completes Asset Sale Transaction with Vought
------------------------------------------------------------
Vought Aircraft Industries, Inc. announced that its transaction to
acquire The Aerostructures Corp. closed Thursday last week.
Effective immediately, The Aerostructures Corp., operates as a
wholly owned subsidiary of Vought Aircraft Industries, Inc. Terms
of the agreement were not disclosed.

"The completion of this sales agreement marks the official
beginning of our combined entity," said Vought President and CEO
Tom Risley. "We'll now move forward to leverage the complementary
skills and strengths of our two companies."

The combined company, which designs and manufactures airframe
structures, will have annual revenues of approximately $1.4
billion and more than 6,000 employees in seven U.S. locations.

The Aerostructures Corp. is based in Nashville, Tenn., and also
has manufacturing sites in Brea, Calif., and Everett, Wash. It
employs approximately 1,400 people nationwide and has annual sales
exceeding $300 million. Its primary customers include Airbus,
Lockheed Martin, Gulfstream and Bell Helicopter.

Vought Aircraft Industries, Inc. -- http://www.voughtaircraft.com
-- is the world's largest independent supplier of aerostructures.
Headquartered in Dallas, the company provides wings, fuselage
subassemblies, empennages, nacelles, thrust reversers and other
components for prime manufacturers of aircraft. Vought has more
than 5,000 employees and annual sales exceeding $1 billion.
Vought's primary customers include Boeing, Gulfstream, Lockheed
Martin and Northrop Grumman. It has operations in Dallas;
Hawthorne, Calif.; Stuart, Fla.; and Milledgeville, Ga.

As reported in Troubled Company Reporter's June 20, 2003 edition,
Standard & Poor's Ratings Services revised the CreditWatch
implications of its ratings on Aerostructures Corp., including the
'BB-' corporate credit rating, to negative from developing.

According to S&P, the CreditWatch revision of Aerostructure's
rating reflects Vought's 'B+' corporate credit rating.


AIR CANADA: Bank Asks Court to Cap D&O & Administrative Charges
---------------------------------------------------------------
The Bank of Nova Scotia is the agent on behalf of a syndicate of
unsecured lenders -- R/T Syndicate -- who are owed $300,000,000
by Air Canada.  By this motion, The Bank of Nova Scotia asks the
Court to limit the indemnity provided to Air Canada directors and
officers and the corresponding charge granted to the D&Os to the
claims that arise on or after the Petition Date as well as limit
the administrative charge amount to $10,000,000.

Alex MacFarlane, Esq., at McMillan Binch LLP, in Toronto,
Ontario, asserts that the amendments represent an appropriate
balancing of interests of the Applicants and their various
stakeholders, including the R/T Syndicate.  If the D&O Indemnity
and D&O Charge secure pre-filing liabilities, Mr. MacFarlane
says, this will create a preference for certain otherwise
unsecured creditors and elevate those claims in priority to those
of the general body of creditors.

To balance the interests of Air Canada's survival with the rights
of its creditors and other stakeholders and to provide a certain
degree of certainty as to the extent of the subordination of
other creditor rights, Mr. MacFarlane points out that the
Administrative Charge should be capped at $10,000,000 with
respect to the expenses reasonably incurred in connection with
Air Canada's restructuring.  Mr. MacFarlane contends that a
superpriority charge should only be granted by the Court in
exceptional circumstances. (Air Canada Bankruptcy News, Issue No.
7; Bankruptcy Creditors' Service, Inc., 609/392-0900)


AIR CANADA: Arranges New C$1.8 Bill. Exit and Aircraft Financing
----------------------------------------------------------------
Air Canada has reached a tentative agreement with General Electric
Capital Aviation Services on the restructuring of all GECAS
financed and managed aircraft as well as on new exit and aircraft
financing totaling approximately CDN$1.8 billion.

"This agreement with GECAS constitutes a major statement of
confidence and a solid endorsement from a global business leader
on the significant progress we are making and the strategic
direction we are taking with Air Canada's overall restructuring
plan," said Robert Milton, President and Chief Executive Officer.
"I am extremely pleased by the speed with which we have reached a
comprehensive agreement with our biggest financial provider that
not only addresses current aircraft obligations but also provides
significant additional exit financing and endorses our
restructured fleet plan.

"This agreement builds on the substantial progress made to date in
a very complex process and advances us considerably towards our
goal of restructuring Air Canada into a stronger airline that is
well positioned to compete profitably in the new industry
environment," said Mr. Milton.

The restructuring of the GECAS aircraft leases involves a
combination of lease rate reductions, lease payment deferrals,
early lease terminations and the cancellation of future aircraft
delivery commitments. The agreement encompasses 106 Air Canada and
Air Canada Jazz aircraft including operating, parked and
undelivered aircraft. It also includes leases on certain of the
106 aircraft that were cross-collateralized under the terms of the
debtor-in-possession (DIP) financing of US$700 million announced
April 1, 2003.

As part of the tentative agreement, GECAS has agreed to extend to
Air Canada as debt financing for emergence from the Companies'
Creditor Arrangement Act (CCAA) a secured loan of US$425 million
(approximately CDN$575 million) to be secured by a fixed and
floating charge over the unencumbered assets of Air Canada. This
will largely constitute the same collateral pool against which its
current DIP financing is secured. This new loan would come into
effect upon Air Canada's exit from CCAA) proceedings and would be
used for general corporate purposes to improve the Company's cash
position. The loan would also form an important portion of the
Company's previously announced exit debt and equity financing
requirements of approximately CDN$1.35 billion.

GECAS has also agreed to provide a maximum of approximately US$950
(CDN$1.285 billion) to finance up to 43 regional aircraft, for
which financing is expected to occur through a series of
transactions. This regional aircraft financing is subject to,
among other things, maintaining a specified credit rating
following Air Canada's emergence from CCAA.

As part of this tentative agreement, Air Canada has agreed that it
will immediately recommence payment of aircraft rent to GECAS.

GECAS' financing commitment and the tentative agreement are
subject to various conditions including the following:

- completion of definitive documentation;

- conversion of all Air Canada unsecured debt into equity under
   the Plan of Arrangement;

- substantial restructuring of Air Canada in accordance with the
   Restructuring Plan presented by the airline;

- GECAS' satisfaction with the amount of the overall exit
   financing and key terms of the equity investment;

- GECAS' satisfaction with the Air Canada business plan, ownership
   structure, capital structure and governance structure under the
   Company's Plan of Arrangement; and,

- no defaults under any existing GECAS-related entity transaction.

The detailed terms of the aircraft lease restructuring are
confidential. Details relating to the new exit financing and
aircraft financing will form part of Air Canada's overall Plan of
Arrangement to be presented to the Ontario Superior Court of
Justice.

Air Canada and its financial advisors are continuing intensive
negotiations with other aircraft lessors and lenders on revised
aircraft lease arrangements consistent with current market rates
and the Company's Restructuring Plan. The Company will resume
aircraft lease payments at restructured rates as new agreements
are reached.

Since filing for CCAA on April 1, 2003, Air Canada has achieved
significant progress in its restructuring process, including:

- completion of a USD$700 million (or an equivalent amount in
   Canadian dollars not to exceed $1.05 billion) debtor-in-
   possession secured financing facility from General Electric
   Capital Canada Inc.;

- permanent labor cost reductions of CDN$1.1 billion annually on
   a consolidated basis under new collective agreements reached
   with Air Canada's five major unions and Air Canada Jazz's four
   major unions;

- conclusion of an amended affinity agreement with CIBC with
   respect to the CIBC Aerogold Visa card program and completion of
   a CDN$350 million credit facility from CIBC;

- conclusion of an agreement in principle with American Express
   with respect to a new co-branded consumer and corporate charge
   card program and Aeroplan's participation in American Express'
   Canadian and international Membership Rewards Programs;

- completion of a going-forward Restructuring Plan based on fleet
   restructuring, lower operating costs, reduced debt, enhanced
   liquidity and a revised product strategy; and,

- commencement of detailed negotiations between Air Canada and its
   largest lessors, lenders and suppliers.

The airline has now revised its restructuring timetable and
anticipates filing its CCAA Restructuring Plan and CBCA Plan of
Arrangement with the Ontario Superior Court of Justice in the fall
of this year.


AKORN: Sr. Lenders Intend to Extend Forbearance Pact to July 31
---------------------------------------------------------------
Akorn, Inc. (AKRN) said its senior lenders have indicated their
intention to extend the expiration date of the Forbearance
Agreement relating to Akorn's senior debt from June 30, 2003 until
July 31, 2003 and to make up to an additional $1,000,000 available
to Akorn under its current line of credit. The formal extension of
the Forbearance Agreement and increase of the line of credit are
subject to a number of conditions, including the completion of
definitive documentation for the extension and increase and the
absence of any additional defaults by Akorn under its senior debt
agreements.

The Forbearance Agreement was originally executed in September
2002 following a default by Akorn on principal and interest
payments due on August 31, 2002. The Forbearance Agreement, as
amended and extended, provides that the senior lenders will
forbear from exercising their remedies as a result of existing
defaults by Akorn until the earlier of the expiration date and the
occurrence of any additional defaults by Akorn under its senior
debt agreements. The Forbearance Agreement also provides for a
revolving line of credit that currently allows Akorn to borrow up
to $1,750,000. The proposed amendments would extend the expiration
date until July 31, 2003 and increase the maximum amount available
under the line of credit from $1,750,000 to $2,750,000.

Akorn's sales levels were lower than expected in April, May and
June, which resulted in reduced collections from receivables in
the latter part of the second quarter and is expected to continue
to negatively impact cash flow in July and August. Even if the
increased availability under the line of credit is finalized,
there can be no assurance that the line of credit, together with
cash generated from operations, will be sufficient to meet the
cash requirements for operating Akorn's business.

Akorn, Inc. manufactures and markets sterile specialty
pharmaceuticals, and markets and distributes an extensive line of
pharmaceuticals and ophthalmic surgical supplies and related
products. Additional information is available on the Company's Web
site at http://www.akorn.com


ALARIS MEDICAL: Underwriters Exercise Over-Allotment Option
-----------------------------------------------------------
ALARIS Medical Systems Inc. (AMEX:AMI) announced that the
underwriters of the company's recent public offering of common
stock have exercised their over-allotment option in full to
purchase an additional 1,350,000 shares of common stock. As
previously disclosed, the over-allotment includes an additional
900,000 shares from the company and 450,000 shares from selling
stockholders. This purchase combined with the 9,100,000 shares
originally offered by the company brings to 10,450,000 the total
number of shares offered. The public offering price was $12.50 per
share.

The company received net proceeds of approximately $118.4 million
from the sale of the 10,000,000 shares it offered. The company
received none of the proceeds from the shares sold by the selling
stockholders other than proceeds received upon the exercise of
stock options underlying the shares they have sold.

The joint book-running managers of the equity offering were Bear,
Stearns & Co. Inc., CIBC World Markets Corp. and UBS Securities
LLC. This press release shall not constitute an offer to sell, or
the solicitation of an offer to buy, any securities. Offers,
solicitations and sales may be made only by means of the
prospectus copies of which may be obtained from these underwriters
or from the company.

ALARIS Medical Systems Inc. -- whose March 31, 2003 balance sheet
shows a total shareholders' equity deficit of about $27 million --
develops practical solutions for medication safety. The company
designs, manufactures and markets intravenous medication delivery
and infusion therapy devices, needle-free disposables and related
monitoring equipment in the United States and internationally.
ALARIS Medical Systems' proprietary Guardrails(R) Safety Software,
its other "smart" technologies and its "smart" services help to
reduce the risks and costs of medication errors, help to safeguard
patients and clinicians and also gather and record clinical
information for review, analysis and transcription. The company
provides its products, professional and technical support and
training services to over 5,000 hospital and health care systems,
as well as alternative care sites, in more than 120 countries
through its direct sales force and distributors. With headquarters
in San Diego, ALARIS Medical Systems employs approximately 2,900
people worldwide. Additional information on the company can be
found at http://www.alarismed.com


ALLIANCE GAMING: BB- Rating Affirmed Following Divestiture Pact
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed Alliance Gaming Corp's
'BB-' corporate credit rating following Alliance's announcement
that it signed a definitive agreement to sell both its slot route
operations (United Coin Machine Co. and Video Services, Inc.) and
its German wall machine manufacturing (Bally Wulff) segments.

The 'BB-' bank loan and 'B' subordinated debt ratings also were
affirmed. The outlook is stable. Proceeds from the sales are
expected to be approximately $144 million,  which includes cash,
preferred stock, and the assumption of about $6 million of
liabilities. Standard & Poor's expects most of the cash proceeds
(net of taxes) will be used to reduce debt.

"The affirmation stems from the fact that the two segments
Alliance plans to divest are not considered core, and combined
represented less than 20% of EBITDA for the nine months ended
March 31, 2003," said credit analyst Peggy Hwan. The Bally Wulff
segment has been less than steady because of the cyclical nature
of this business and significant regulation in the German wall
machine business. Although historically a relatively steady
performer, the route business recently exhibited weaker
performance because of the closure of a major supermarket chain
that was a significant customer. By divesting these two segments,
Alliance Gaming will be able to focus on its core division,
Bally's Gaming and Systems. Assuming the successful close of these
asset sales with most of the net proceeds used for debt reduction,
debt leverage is expected to improve modestly. Standard & Poor's
expects that the debt financing, which management is
contemplating, will benefit the company, as it is likely to
include the refinancing of high coupon fixed rate debt.

The ratings for Las Vegas, Nevada-based Alliance Gaming Corp.
reflect the company's number-two position in the North American
gaming equipment market, and its growing base of successful gaming
devices and game monitoring systems. This is offset by the
existence of a much larger and well-established competitor,
International Game Technology.

Alliance likely will benefit from a shorter life cycle for gaming
devices in the intermediate term. This is a response to consumer
preferences for new machines, and the introduction of cashless
technology, which are likely to spur a healthy replacement market
for gaming devices in the intermediate term. In addition, the
possible expansion of gaming in certain states provides future
growth opportunities for the Bally's division.


AMERCO: Bankruptcy Court Gives Interim Okay on Cohen's Retention
----------------------------------------------------------------
Bruce T. Beesley, Esq., at Beesley, Peck & Matteoni, Ltd., in
Reno, Nevada, tells Judge Zive that on April 18, 2003, AMERCO
sued PricewaterhouseCoopers filed in the U.S. District Court for
the District of Arizona.  AMERCO seeks damages incurred due to
PwC's violation of its professional responsibilities.  The case
was voluntarily dismissed on June 5, 2003.  However, that same
day, a new lawsuit was filed in Maricopa County Superior Court
for the State of Arizona, which encompasses a $2,500,000,000
dispute relating to complex accounting and auditing matters.  Mr.
Beesley contends that the lawsuit cannot be litigated without
expert legal counsel that specializes in these types of disputes
and that is familiar with the factual intricacies of the case.

Accordingly, AMERCO seeks the Court's authority to employ Cohen,
Kennedy, Dowd & Quigley, P.C. as its special litigation counsel
to perform the legal services in connection with the PwC
Litigation that will be necessary during this Chapter 11 case and
to approve the proposed compensation terms of Cohen's retention.

Mr. Beesley tells the Court that AMERCO selected Cohen as its
special litigation counsel primarily because of Cohen's extensive
knowledge of AMERCO's business and financial affairs, as well as
their recognized expertise in complex litigation matters.  In
fact, Cohen has become familiar with AMERCO's business, affairs
and capital structure when it was retained on October 23, 2002 to
conduct due diligence to determine the extent of any impact of
PwC's wrongful conduct.  Accordingly, Cohen has the familiarity
with AMERCO's historical financial and accounting practices that
is vital to effectively confront and resolve the myriad issues
that have arisen and will continue to arise in the PwC
Litigation.

As Special Counsel, Cohen will:

     -- advise AMERCO on legal strategy in the prosecution and
        resolution of the PwC Litigation;

     -- handle discovery matters;

     -- communicate and negotiate with PwC counsel;

     -- draft motions and other pleadings as required to advance
        AMERCO's interests;

     -- assist AMERCO in any mediation with PwC; and

     -- conduct a trial of the PwC Litigation and the prosecution
        of any appeal or appeals, as necessary.

Ronald Jay Cohen, Esq., founding partner of Cohen, Kennedy, Down
& Quigley, P.C., relates that Cohen's retention is memorialized
in an Engagement Agreement dated October 23, 2002.  With the
Court's approval, the Engagement Agreement, which provides the
fee structure, is filed with the Court under seal and not
available for public review.  The fee structure reflects:

     (a) the nature of the service to be provided; and

     (b) the fee structure Cohen and other leading commercial
         litigation firms typically utilized.

Mr. Cohen asserts that the fee structure contained reasonable
terms and conditions of employment in light of:

     -- industry practice,

     -- market rates charged for comparable services,

     -- Cohen's substantial experience with respect to providing
        commercial litigation services in complex disputes, and

     -- the nature and scope of work Cohen will perform.

Moreover, Cohen intends to apply to the Court for reimbursement
of all out-of-pocket expenses incurred in connection with
AMERCO's representation, including, among other things, long
distance telephone calls, facsimiles, photocopying, postage and
package delivery charges, messengers, court fees, transcript
fees, travel expenses, working meals and computer-assisted legal
research.

According to Mr. Cohen, his firm has conducted a conflicts check,
through its client database, regarding its connections with
AMERCO and PwC.  The conflicts check revealed that:

     -- Cohen has not previously been adverse to AMERCO, its
        subsidiaries, affiliates, officers and directors in any
        prior representation; and

     -- none of Cohen's prior representations of past or current
        clients prohibited it from being adverse to PwC in
        connection with the PwC Litigation.

Moreover, Mr. Cohen assures the Court that to the best of his
knowledge:

     (i) neither Cohen nor any of its attorneys is or was a
         creditor, an equity security holder or an AMERCO insider;

    (ii) neither Cohen nor any of its attorneys is or was an
         investment banker for any outstanding security of AMERCO;

   (iii) neither Cohen nor any of is attorneys is or was, within
         three years before the Petition Date, an investment
         banker for any of AMERCO's security, or an attorney for
         an investment banker in connection with the offer, sale
         or issuance of any security of AMERCO;

    (iv) neither Cohen nor any of is attorneys is or was, within
         two years prepetition, a director, officer or employee of
         AMERCO; and

     (v) does not have an interest materially adverse to the
         interests of the estate or any class of creditors or
         equity security holders, by reason of any direct or
         indirect relationship to, connection with or interest in
         AMERCO or an investment banker.

                          *    *    *

On an interim basis, the Court approves AMERCO's employment of
Cohen as its special litigation counsel as of June 20, 2003,
subject to final Court order after notice and a hearing.
(AMERCO Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


AMERICAN AIRLINES: Lauds Appeals Court Ruling in Pricing Case
-------------------------------------------------------------
American Airlines said it is pleased by Thursday's ruling by a
federal appeals court dismissing a predatory pricing complaint
against the airline.  The 10th U.S. Circuit Court of Appeals
Thursday upheld a lower court decision that the U.S. Department of
Justice failed to show that American had engaged in predatory
pricing on certain routes.

"This is very gratifying news," said Gary Kennedy, general counsel
and senior vice president for American.  "It has been our position
all along that we compete appropriately on all of our routes, and
we are pleased to put this chapter behind us."

In April 2001, a federal judge issued a summary judgment,
essentially dismissing a suit filed by the Justice Department in
1999, alleging predatory pricing on certain routes.  Federal
officials appealed the decision.

American said it will not comment further on the case. Current AMR
Corp. (NYSE: AMR) news releases can be accessed via the Internet
at http://www.amrcorp.com

AMR's main subsidiary is American Airlines, the US's #2 air
carrier based on revenue passenger miles (behind UAL's United
Airlines). With a fleet of nearly 700 jetliners and hubs in
Chicago, Dallas/Fort Worth, Miami, and San Juan, Puerto Rico,
American Airlines serves about 170 destinations in the Americas,
Europe, and the Pacific Rim (some through code-sharing). The
carrier will expand by absorbing the assets of TWA, which AMR has
acquired. With British Airways, American Airlines leads the
Oneworld global marketing alliance. AMR's regional feeder
subsidiary, American Eagle, has been aggressive in rolling out
regional jet service.

Standard & Poor's Ratings Services raised its ratings of AMR Corp.
(B-/Negative/--) and subsidiary American Airlines Inc.,
(B-/Negative/--), including raising the corporate credit ratings
of each to 'B-' from 'CCC'.

The ratings were removed from CreditWatch, where they were placed
with developing implications on March 28, 2003. The outlook is
negative.


AMERICAN AIRLINES: Lays-Off 3,100 Flight Attendants to Cut Costs
----------------------------------------------------------------
About 3,100 American Airlines flight attendants were furloughed
effective on Tuesday as part of a restructuring plan aimed at
saving the bankruptcy-threatened airline, Reuters reported. The
furloughs were expected and include about 1,750 flight attendants
who used to work for TWA, which was bought out by American, and
some 1,300 American flight attendants, a spokeswoman said. The
jobs account for about 3.5 percent of the workforce at the world's
largest carrier. American is trying to cut operating costs by
about an annual $4 billion, and earlier this year it reached deals
with its major unions aimed at saving $1.8 billion a year. The
airline has also reduced capacity and cut down on its fleet,
reported the newswire. (ABI World, July 2)


AQUILA: Files Electric Rate Case with Missouri Regulatory Body
--------------------------------------------------------------
Aquila, Inc. (NYSE:ILA) filed a request for an electric rate
increase with the Missouri Public Service Commission.

In its request, the company seeks to recover the higher costs of
natural gas needed to generate electricity as well as system
improvement costs for the company's former Missouri Public Service
properties. The company is requesting a 19 percent increase in
annual revenues.

The 220,000 electric customers in the former Missouri Public
Service properties currently pay rates that are at 1983 levels.

"We've taken a number of steps, totaling approximately $16 million
annually, to reduce the amount of the rate filing request," said
Jon Empson, senior vice president of Regulatory, Legislative and
Gas Supply Services for Aquila. "It's important for the company to
recover electrical system operating costs that were incurred to
provide safe and reliable service for our customers."

To further help reduce the rate increase, Aquila proposes to share
75 percent of the savings achieved through the consolidation of
St. Joseph Light & Power.  St. Joseph Light & Power was acquired
in 2001. The plan is to use 50 percent of those savings to reduce
the size of the rate increase. Aquila proposes that another 25
percent will be used to provide funds for residents in Aquila's
Missouri service territory who cannot afford to pay their utility
bills.

If the rate increase is approved by the commission, an average
residential customer using 10,000 kilowatt-hours (kwh) of
electricity a year would see an increase of approximately $13.25 a
month. The overall rate increase would total $65 million.

The key factors in the company seeking a rate increase are:

-- 44 percent is driven by higher costs for natural gas needed to
    generate electricity.

-- 21 percent reflects recovery of capital investments made to
    provide electric service to customers.

-- 14 percent is caused by loss of the opportunity to sell power
    to potential off-system customers.

-- 9 percent is caused by the contribution required to properly
    fund employee pension plans.

-- 12 percent results from other costs associated with providing
    safe and reliable electricity to customers.

The $16 million in annual savings was achieved through several
initiatives, including reducing operating costs through office and
service center consolidations, employee reductions and technical
improvements in the company's power plants, as well as adding new
growth through joint community efforts. Also, Aquila voluntarily
decided to reduce its rate request by $15 million, which puts the
company at risk to achieve more savings in the near future.

In addition, current Missouri electric customer rates allow for a
gas cost of about $2.80 per thousand cubic feet (Mcf), while the
current market price for natural gas is around $6 per Mcf. Aquila
is asking the commission to increase the rate the company is
allowed to include for natural gas costs from the current level of
$2.80 per Mcf to $5.64 per Mcf. The company also is recommending
that any amount collected above the company's actual gas costs
would be refunded to customers at the end of each year.

In addition, capital expenditures that Aquila already made to
update its power plants and electric distribution system total $50
million to $60 million annually. The current rate structure does
not have a provision for these necessary expenditures.

Likewise, the existing rate structure does not fully cover current
pension costs. Customer rates in past years were reduced to
reflect favorable market investment returns. But with the stock
market now depressed and interest rates lowered, those favorable
returns no longer exist. Aquila, like many other companies
throughout corporate America, must now make contributions to cover
these costs.

In the past, the company has been able to offset some of its
increased gas costs by selling excess power in the open market.
However, with the economy currently in recession, as well as an
abundance of excess power available throughout the area, Aquila
has seen a $9 million decline in those off-system sales and does
not expect to see opportunities to renew off-system sales in the
foreseeable future.

Prior to filing the rate increase, Aquila held outreach meetings
to discuss the proposed increase with Missouri community and
legislative leaders.

Aquila serves 338,000 electric and natural gas customers in
Missouri. Based in Kansas City, Missouri, Aquila operates
electricity and natural gas distribution networks serving
customers in the U.S., Canada, the United Kingdom and Australia.

In the U.S., the company provides energy service to 1.3 million
customers in Missouri, Kansas, Colorado, Michigan, Minnesota, Iowa
and Nebraska. More information is available at www.aquila.com.

As reported in Troubled Company Reporter's April 15, 2003 edition,
Fitch Ratings assigned a 'B+' rating to the new $430 million
senior secured 3-year credit facility of Aquila, Inc.
Concurrently, Fitch has downgraded the senior unsecured rating of
ILA to 'B-' from 'B+'. Approximately $3 billion of debt has been
affected. The senior unsecured rating of ILA is removed from
Rating Watch Negative. The Rating Outlook for ILA's secured and
unsecured ratings is Negative.

The Facility rating was based on the structural protections of the
Facility as well as the senior secured lenders' enhanced recovery
prospects relative to unsecured creditors. Secured and
structurally senior debt together account for approximately 25% of
total debt excluding pre-payment obligations. Facility collateral
includes first mortgage bonds registered in the name of the
collateral agent (Credit Suisse First Boston) on the regulated gas
distribution utilities in MI and NE, a pledge of stock of the
holding company of the Canadian regulated electricity distribution
businesses and a second lien on certain independent power plant
investments.

Standard & Poor's Rating Services lowered its corporate credit and
senior unsecured rating on electricity and natural gas distributor
Aquila Inc., to 'B' from 'B+'. The ratings have also been removed
from CreditWatch where they were placed with negative implications
on Feb. 25, 2003. The outlook is negative. The rating actions
reflect concerns resulting from the company's reliance on asset
sales to reduce debt levels and projected weak cash flows from
operations. At the same time, Standard & Poor's Rating Services
assigned a 'B+' rating to Aquila's new $430 million senior secured
credit facility. The issuer rating of Aquila Merchant Services
Inc. was withdrawn.


ATLAS AIR: Considering Chapter 11 Filing to Facilitate Workout
--------------------------------------------------------------
As part of its ongoing restructuring efforts first announced in
March 2003, Atlas Air Worldwide Holdings, Inc.'s (NYSE:CGO)
subsidiary, Atlas Air, Inc., has entered into a forbearance
agreement with the holders of a majority of its Class A Enhanced
Equipment Trust Certificates.

The EETCs were issued in 1998, 1999 and 2000 to finance Atlas
Air's initial fleet of 12 Boeing 747-400 freighter aircraft. Under
the EETC financing transactions, a payment was originally due from
Atlas Air on July 2, 2003. Pursuant to the forbearance agreement,
on July 2, 2003, Atlas Air paid $25 million, which was
approximately 50 percent of the amount originally due.

In consideration of this payment, the holders of a majority of the
Class A Certificates agreed to forbear from taking any action to
cause the exercise of remedies concerning any defaults under the
EETC financing transactions for an initial forbearance period of
60 days. The forbearance period will allow Atlas Air to continue
efforts to negotiate a restructuring of its EETC financing
transactions. The forbearance period is extended for an additional
30 days to the extent an agreement in principle concerning the
terms of a restructuring is reached prior to the end of the
initial forbearance period. In certain limited circumstances, the
forbearance period can be terminated early if Atlas Air defaults
in specific obligations under the forbearance agreement. The
forbearance agreement further provides that it is binding upon
successors, assignees and transferees of the holders of Class A
Certificates who are parties to the forbearance agreement.

Atlas Air also reached an agreement in principle, subject to
execution of final documentation, with its main bank group, led by
Deutsche Bank, to restructure its obligations in conjunction with
the comprehensive restructuring program. As a result, the company
will commence making payments on such obligations on a
restructured basis.

Negotiations with Atlas Air's remaining secured creditors and
lessors are ongoing. While the company is optimistic that it will
be successful in reaching satisfactory arrangements with its
creditors, there can be no assurance it will succeed. Atlas Air
Worldwide Holdings and its subsidiaries, Atlas Air and Polar Air
Cargo, plan to continue payments to all trade vendors in the
ordinary course of business and will continue to provide reliable
services to all of their customers.

As part of completing its restructuring efforts, the company is
considering various alternative methods to implement its
restructuring program, including the filing of a pre-negotiated
Chapter 11 plan of reorganization, with the goal of emerging from
Chapter 11 as quickly as possible with minimum disruption to its
businesses.

Atlas Air Worldwide Holdings is the holding company of Atlas Air
and Polar Air Cargo. Atlas Air offers its customers a complete
line of freighter services, specializing in ACMI (Aircraft, Crew,
Maintenance, and Insurance) contracts and charter services with a
fleet of Boeing 747 aircraft. Polar specializes in time-definite,
cost-effective airport-to-airport scheduled airfreight service
with a fleet of Boeing 747 freighters. Learn more at
http://www.atlasair.com


AUSPEX SYSTEMS: Closes $9.25-Million Asset and Patent Sales
-----------------------------------------------------------
On June 20, 2003, Auspex Systems, Inc., completed the sale of
(1)its issued and pending U.S. and foreign patents and patent
applications of the Company to Network Appliance, Inc. for a cash
purchase price of $8,975,000 and (2)certain assets relating to the
Company's customer service operation to GlassHouse Technologies,
Inc., for a cash purchase price of $280,000, the payment of
certain cure costs associated with assigned contracts and the
assumption of certain liabilities  pursuant to the terms and
conditions of Asset Purchase Agreements.

At the time the Company completed the Patent Sale and the Service
Sale, the Company was operating as a debtor in possession under
Chapter 11 of the United States Bankruptcy Code. The Patent Sale
and the Service Sale were approved by the United States Bankruptcy
Court for the Northern District of California, San Jose Division,
through the entry of an order. The Company is continuing to assess
the impact of the above mentioned sales on its creditors and
equity holders.

Auspex Systems, Inc., a manufacturer of network storage equipment,
filed for chapter 11 protection on April 22, 2003 (Bankr. N.D.
Calif. Case No. 03-52596). J. Michael Kelly, Esq., at the Law
Offices of Cooley Godward represents the Debtor in its
restructuring efforts. When the Company filed for protection from
its creditors, it listed $30,398,964 in total assets and
$13,987,908 in total debts.


THE AUXER GROUP: Changes Name to Viva International, Inc.
---------------------------------------------------------
On June 23, 2003, The Auxer Group's Amendment to its Certificate
of Incorporation was given effect in its NASDAQ OTCBB trading
market under its new symbol VIVI.  This new symbol reflects its
change of name from The Auxer Group, Inc. to Viva International,
Inc. and a 1 for 800 reverse split of its common stock which left
approximately 964,000 shares of common stock issued and
outstanding along with 16,500,000 preferred shares having
165,000,000 votes on any issue put before the shareholders.

                          *   *   *

As reported in the Troubled Company reporter's May 10, 2003,
edition, the Company has $163 of available cash at March 31, 2003.
Since inception the Company has accumulated a net loss of
approximately $11,252,732.

The Auxer Group, Inc. will require a minimum of $3,000,000 of
working capital to complete Viva Airlines, Inc, transition from
a development stage company to full operation.

Auxer does not currently have the funds necessary to provide
working and expansion capital to Viva Airlines, Inc. Auxer will
only be able to provide the needed capital by raising additional
funds.

The inability to raise funds or a continued lack of funds could
result in the failure to complete needed acquisitions of certain
aviation assets or payment of certain related expenses that
would delay or prevent the commencement of the operation of Viva
Airlines, Inc.

Management is optimistic that the Company will be able to borrow
sufficient capital to fund Viva Airlines, Inc.


BRIDGE TECH: Nasdaq Modifies Terms for Co.'s Continued Listing
--------------------------------------------------------------
Bridge Technology, Inc. (Nasdaq:BIGCE), a data storage and
communication components distribution Company, announced that its
common stock will continue to be listed on The Nasdaq SmallCap
Market via an exception from the 10K and 10Q filing requirements
for the year ended December 31, 2002 and the first quarter ended
March 31, 2003. This exception was set to expire on June 16, 2003
subject to further review. In light of termination by the Company
of BDO Seidman, LLC as its Company's auditors and the appointment
of BDO McCabe Lo & Co. by the company's Audit Committee, the
Nasdaq Panel modified its temporary exception for the filing of
the Company's 10-K and 10-Q to July 16, 2003.

With the regard to the $1.00 bid price requirement in the event
the Company files its 10-K and 10-Q by July 16, 2003, the Company
has until August 24, 2003 to satisfy that standard based on the
Company having a net worth of at least $5,000,000 as of March 31,
2003, which condition the Company believes it has met.

Finally, in complying with Marketplace Rule 4310, the Company must
(i) solicit proxies by August 15, 2003; (ii) hold its Annual
Meeting for the fiscal year ended December 31, 2002 by
August 31, 2003; and (iii) provide shareholders with the year 2002
Annual Report.

The temporary exceptions granted by the Nasdaq Panel expire on the
respective dates. In the event the Company is deemed to have met
the terms of the exceptions it will continue to be listed on the
Nasdaq SmallCap Market System.

The Company believes that it can meet these conditions; however
there can be no assurance that it will do so. If at some future
date the Company's securities should cease to be listed on the
Nasdaq SmallCap Market System, they may continue to be quoted on
the OTC Bulletin Board.

Please note that beginning with the opening of business on
June 10, 2003 the Company's trading symbol was changed from BRDGE
to BIGCE. The characters C and E will be removed from the symbol
once the Nasdaq Panel has confirmed compliance with the relevant
terms of the exception. At that time, The Company's trading symbol
will revert back to the original trading symbol of BRDG.

Bridge Technology, Inc. is a "time-to-market" Company that
distributes digital recording, storage, and communication
components and sub-assembly units, primarily to long standing OEM
customers. The Company operates through subsidiaries in the United
States, and Hong Kong. More information on Bridge Technology, Inc.
may be obtained over the Internet at http://www.bridgeus.com

                         *   *   *

In its SEC Form 10-Q filed on November 14, 2002, the Company
reported:

"The [Company's] unaudited consolidated financial statements
have been prepared assuming that the Company will continue as a
going concern. During the year ended December 31, 2001, the
Company incurred a net loss of $2,542,000 and used cash of
$3,635,000 in its operations. Management has undertaken certain
actions in an attempt to improve the Company's liquidity and
return the Company to profitability. On July 24, 2002, the
Company entered into a loan modification and extension agreement
with a commercial bank for its outstanding balance of $4 million
at December 31, 2001, which was reduced by $100,000 payment made
in 2002. Pursuant to the terms of the new agreement, monthly
interest only payments are to be made through maturity, $50,000
was due and paid by September 15, 2002 and no less than
$1,000,000 is due on November 30, 2002. The Company owns 90% of
all issued and outstanding shares in CMS and pledged 65% of all
issued and outstanding shares in CMS against this outstanding
balance and the maturity date of the note has been extended
until November 30, 2002. However, if the Company makes all of
the foregoing payments on a timely basis and has not otherwise
defaulted on the loan, the maturity date for the remaining
unpaid principal balance will be extended until June 30, 2003.
Additionally, the Company's major shareholders have subordinated
the outstanding loans to the Bank debt and have also indicated
an interest in converting their debt to equity along with the
acceptance of additional outside financing.

"Operationally, management's plans include continuing actions to
cut or curb nonessential expenses and focusing on improving
sales of Autec. No assurance can be given that the Company will
be successful in extending or modifying its line of credit or
that the Company will be able to return to profitable
operations.

"Looking for alternatives, the Company is currently seeking a
global financing agreement with a major international bank to
replace existing credit lines in the U.S. and Hong Kong. No
assurance can be given that the alternative funding source will
be available.

"Management of the Company is actively pursuing certain other
action plans, such as selling controlling interest in Autec and
Ningbo and/or selling a portion of its equity interest in CMS in
exchange for cash proceeds to provide working capital and repay
part or all of the outstanding bank loans.  At November 14,
2002, no formal binding offers and/or letter of credits have
been received.

"On October 1, 2001, a complaint was filed by a Trustee in U.S.
Bankruptcy Court against the Company for an alleged transfer of
assets, technology, trade secrets, confidential information,
business opportunities from Allied Web, a corporation owned by
the Company's former President and Director, which filed for
liquidation under federal bankruptcy laws on April 6, 2000. At
December 31, 2001, management of the Company was unable to
assess the possibility of incurring future liability and
estimate the reasonable amount of contingent liability.
Therefore, the Company did not record any accrued liability for
this matter. In July 2002, this case was settled in principal
with a major participation by the Company's insurance carrier.
Accordingly, the Company accrued a contingent liability of
approximately $265,000 as of September 30, 2002. On November 8,
2002, the Bankruptcy Judge dismissed this suit for failure to
appear or prosecute. The Company expects the Bankruptcy Judge
will set aside the dismissal and reinstate the action. However,
as of November 14, 2002, Bridge is unaware of whether the
Bankruptcy Judge has so acted. The Bankruptcy Trustee and the
Company have negotiated a tentative settlement, contingent upon
the approval of a prior Officer/Director, another individual and
other active Officers and Directors."


BUDGET: Obtains Approval to Expand Scope of KPMG's Retention
------------------------------------------------------------
Budget Group Inc., and its debtor-affiliates sought and obtained
the Court's approval to expand KPMG's role in their Chapter 11
cases.

KPMG will provide additional services necessary for the
development and execution of a successful plan in these cases
and to wind down the estates.  Accordingly, KPMG will provide
supplemental financial advisory services, as the Debtors and KPMG
deem necessary and appropriate, including:

     1. assistance with claims resolution procedures, including,
        but not limited to, analyses of creditors' claims by type
        and entity;

     2. assistance with the analysis and allocation of value
        received from the Debtors' various asset sales;

     3. assistance in preparing documents necessary for
        confirmation, including, but not limited to, financial and
        other information contained in the plan of reorganization
        and disclosure statement. (Budget Group Bankruptcy News,
        Issue No. 22; Bankruptcy Creditors' Service, Inc., 609/392-
        0900)


BUFFETS: Weak Oper. Performance Prompts S&P to Drop Rating to B+
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on restaurant company Buffets Inc. to 'B+' from 'BB-'.

Standard & Poor's also removed the ratings from CreditWatch, where
they were placed Feb. 5, 2003. The outlook is negative. Eagan,
Minnesota-based Buffets had $425 million of debt outstanding as of
April 9, 2003.

"The rating action is based on declining operating performance and
cash flow protection measures that are substantially weaker than
Standard & Poor's had anticipated," said credit analyst Robert
Lichtenstein.

Furthermore, Standard & Poor's does not expect that the company
will be able to reverse this trend in the near term. A weak
economy and an intensely competitive restaurant environment,
especially in the quick-service segment, have negatively affected
operating performance. Same-store sales fell 4.4% and operating
margins dropped to 9.5% from about 11.5% for the 40 weeks ended
April 9, 2003. The margin decrease was primarily because of a
decline in sales leverage. As a result, for the 40 weeks ended
April 9, 2003, EBITDA fell 24% to $71.8 million from $94.2
million, weakening credit measures with EBITDA coverage of
interest of 1.8x compared with 2.3x.

Liquidity is adequate with $9.2 million in cash and a $30 million
revolving credit facility, of which $21 million was available as
of April 9, 2003. Maturities are light as the company's $245
million term loan matures in 2009 and amortizes at only 1% per
year, and its $230 million subordinated notes mature in 2010.

Standard & Poor's expects cash balances and operating cash flow
will be sufficient to service its debt and fund its capital
expenditures of about $25 million in fiscal 2003.

The negative outlook reflects Standard & Poor's concern that
Buffets will be challenged to reverse negative sales and traffic
trends at its restaurants because of its vulnerability to a weak
economy and competition from other segments in the restaurant
industry. If credit measures continue to decline or if its
liquidity position deteriorates, the ratings could be lowered.


BURLINGTON IND: Various Creditors Sell $1M Worth of Claims
----------------------------------------------------------
Pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy
Procedure, the Court received 12 notices of claim transfers in the
Chapter 11 cases of the Burlington Industries Debtors totaling
$1,099,086:

Transferee          Transferor                       Amount
----------          ----------                       ------
Longacre Master     BYK-Chemie USA, Inc.             $11,440
Fund, Ltd           Omnova Solutions, Inc.           360,202
                     Central Virginia Laboratories     10,263
                     Boehme-Filatrex, Inc.             20,569

Waste Industries    Capital Markets                   11,679
West, Inc.

Trade-Debt Net      Wilson Walker House                  184
                     Metter Toledo Inc                  2,607
                     Control Dynamics Inc.                108
                     Intl Dyeing Equipment Co.          5,340

ASM Capital         Harriet & Henderson              614,270
                     Avert Dennison Corp               11,713

Hurley & Harrison   Capital Markets                   50,711
Inc. (Burlington Bankruptcy News, Issue No. 35; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


CEDARA SOFTWARE: Ceases Trading on Nasdaq Effective Today
---------------------------------------------------------
Cedara Software Corp. has not been able to meet the minimum
shareholders' equity requirement established in the Nasdaq Listing
Qualifications Panel decision issued on May 8, 2003. As a result,
Cedara's common shares will no longer trade on Nasdaq effective
with the opening of business today.

The Company's listing on the Toronto Stock Exchange, where the
overwhelming majority of the Company's shares have historically
traded, remains unaffected by this development. In addition, the
Company's shares are immediately eligible to trade on the OTC
Bulletin Board in the United States under the symbol "CDSW".

Cedara has worked diligently over the last several months to
investigate a number of options that would address the
shareholders' equity requirement for maintenance of the Nasdaq
listing. After careful consideration, the Company's board of
directors concluded that it would not be in the best interests of
the Company's shareholders to pursue these options at this time.

As circumstances evolve, the benefits of a Nasdaq listing may be
revisited.

Cedara Software Corp., whose March 31, 2003 balance sheet shows
a working capital deficit of about C$8 million, is a leading
independent provider of medical imaging software for many of the
world's leading medical devices and healthcare information
technology systems companies. Cedara has over 20,000 medical
imaging installations worldwide. Cedara's Imaging Application
Platform software is embedded in 30% of magnetic resonance imaging
devices shipped each year. Cedara's Picture Archiving and
Communications Systems technology has been installed globally in
over 4,300 workstations.


CHART INDUSTRIES: Sells Greenville Tube Operations for $15.5MM
--------------------------------------------------------------
As part of its operational restructuring strategy to exit certain
non-core business, Chart Industries, Inc. (OTCPK:CTIT) has sold
substantially all the assets of the Company's Greenville Tube
operations to a financial buyer for an aggregate purchase price of
$15.5 million, plus buyer's assumption of certain liabilities. The
Greenville Tube business manufactures small diameter stainless
steel tubing for sale to numerous distributors.

The Company said that the net proceeds of the sale will be used to
pay certain amounts owed its senior lenders under Chart's credit
facilities, including related expenses, and certain agreed upon
operational costs of Chart.

Chart also has received from its senior lenders final approval of
the previously announced agreement to further extend certain bank
waivers and defer debt service payments until July 15, 2003. On
July 1, 2003, Chart announced that its senior lenders had
tentatively agreed to the extensions and that the agreement was
subject to final approval by Chart's senior lenders. The agreement
also provides for permission to sell the Greenville Tube business
and allows the application of the net proceeds of the sale as
described above.

Chart Industries, Inc. is a leading global supplier of standard
and custom-engineered products and systems serving a wide variety
of low-temperature and cryogenic applications. Headquartered in
Cleveland, Ohio, Chart has domestic operations located in 11
states and an international presence in Australia, China, the
Czech Republic, Germany and the United Kingdom.

For more information on Chart Industries, Inc. visit the Company's
Web site at http://www.chart-ind.com

As reported in Troubled Company Reporter's Thursday Edition, Chart
Industries, Inc.'s senior lenders tentatively agreed to further
extend certain bank waivers and deferral of debt service payments
until July 15, 2003. The agreement is subject to final approval by
Chart's senior lenders.

On May 1, 2003, Chart announced that it had reached an agreement
in principle with its lenders to financially restructure the
Company. At that time the Company's senior lenders also agreed to
grant an extension through June 30, 2003 of previously announced
waivers and deferral of debt service payments. Chart and its
senior lenders have continued working towards finalizing the terms
of its debt restructuring. The extension until July 15 is intended
to give the parties sufficient time to accomplish that goal. As
previously announced, it is expected that, among other things, the
terms of the Company's proposed debt restructuring will result in
substantial dilution of current shareholders of the Company,
leaving them with approximately 5% of the equity of the
restructured Company, plus warrants which, under certain
conditions, will provide them with an opportunity to acquire up to
an additional 5% of Company equity after the restructuring is
completed.


CIRRUS LOGIC: Sells Semiconductor Test Operations to ChipPac
------------------------------------------------------------
Cirrus Logic Inc. (Nasdaq:CRUS), announced the resignation of
Steven D. Overly, its Senior Vice President of Administration,
Chief Financial Officer, General Counsel and Secretary, for
personal reasons. On July 2, 2003, W. Kirk Patterson, Vice
President and Controller, was appointed acting CFO.

Mr. Patterson has over 23 years of broad financial experience and
has been with Cirrus Logic for three years. Prior to joining
Cirrus Logic, Mr. Patterson was employed by PricewaterhouseCooper
and BP Corporation.

                               Outlook

The company said it expects revenue for its first fiscal quarter
of 2004, ended June 28, 2003, to be in the low end of the
company's revenue guidance. In addition, the company expects
double-digit percentage revenue growth in the September quarter.
"We are pleased to see that business conditions are improving and
that our backlog is substantially higher than it was 90 days ago,"
stated David D. French, President and Chief Executive Officer of
Cirrus Logic.

                          Sale of Assets

On June 30, 2003, the company closed the sale of its semiconductor
test operations in Austin, Texas, to ChipPAC Inc., which the
company announced on June 26, 2003.

Cirrus Logic will announce its first fiscal quarter results in a
conference call on July 23, 2003.

Cirrus Logic is a premier supplier of high-performance analog,
mixed-signal and digital processing solutions for consumer
entertainment electronics, automotive entertainment and industrial
product applications. Building on its global market leadership in
audio ICs and its rich mixed-signal patent portfolio, Cirrus Logic
targets audio, video and precision mixed-signal applications in
these growing markets. The company operates from headquarters in
Austin, Texas, with offices in California, Colorado, Europe, Japan
and Asia. More information about Cirrus Logic is available at
http://www.cirrus.com

As reported in Troubled Company Reporter's May 6, 2003 edition,
Standard & Poor's Ratings Services lowered its corporate credit
rating for Cirrus Logic Inc. to 'B' from 'B+', reflecting
expectations that operating losses are likely to continue over the
near term. The outlook is stable.

It currently has no funded debt, although lease obligations exceed
$85 million.


CLAYTON HOMES: Sets Record Straight re Berkshire Hathaway Deal
--------------------------------------------------------------
Clayton Homes, Inc. (NYSE:CMH) issued this letter to its
shareholders:

Dear Fellow Shareholders:

"We are pleased to provide you with additional information on the
Berkshire Hathaway transaction. There is some degree of
misunderstanding on a number of significant issues, and our goal
here is to set the record straight.

"Despite suggestions to the contrary, we did not solicit an offer
from Berkshire. Because Berkshire was interested in other
companies in the industry, a mutual friend suggested that Mr.
Warren Buffett read my father's autobiography for additional
information. He called discussing industry financing issues and
ultimately suggested we explore a transaction. Our board initially
expressed mild interest in the Berkshire offer.

"Independent directors controlled the selection of an investment
banker and outside counsel. Those directors engaged in a thorough
evaluation process without the presence of management. Ultimately
the independent directors concluded that the merger is in the best
interest of all shareholders. They did insist that ample time be
allowed for competing offers. Clayton Homes was free to accept
bids and negotiate with other bidders for more than 30 days after
the public announcement. Even today the board has the ability to
accept a higher offer, but there has not been one request for
information--much less a bid.

"Berkshire's interest in manufactured housing no doubt added
creditability and caused industry stocks to advance in sync with
the overall market rise. To surmise that CMH stock is worth more
than $12.50 assumes that all 20 plants are operating at high
utilization rates fueled by aggressive financing similar to that
of the 1990's. The addictive financing by a few competitors
brought the massive losses, the sub-prime label, and the
paralyzing 5% interest rate penalty over that of site-built
housing. In the process, our access to capital at competitive
rates has been practically destroyed. The press accounts reference
a new lender entering the industry. Like the other major bank
active in the industry, it will hold the loans on its balance
sheet and not securitize them.

"Clayton Homes must raise over $1 billion a year to fund home
sales. The securitizations in February and in November resulted in
our retaining over $60 million in bonds that could not be sold at
acceptable prices. Continuing to securitize would not only make us
less competitive, but would require the company to take on risky
levels of debt.

"The opposition states that the industry is improving. In fact,
industry shipments continue to plummet, decreasing 26% year to
date through April. The May flash report from the Manufactured
Housing Institute is even more disheartening--shipments down
another 29.5%. The industry has not bottomed. Even Fannie Mae has
announced that it is implementing tighter financing standards for
manufactured housing.

"The value of Clayton communities has been compared to those in
the pending sale of Chateau Communities. Ours are not built on
golf courses or marinas like some in the Chateau portfolio, and
occupancy is only 75% at CMH compared to nearly 90%. Average
Chateau site rent is 160% of Clayton's, and operating income per
site is 300% of ours. Consequently, Chateau's properties are worth
more.

"We take strong exception to the accusations that our
independence, fiduciary responsibility, and corporate governance
have been compromised. No compensation contracts, equity
agreements, or side deals of any kind have been entered into with
Berkshire Hathaway. The directors on our board have impeccable
credentials and fully realize that their duty is to maximize value
to all shareholders.

"Without the access to reliable capital and the lower cost of
funds provided by the merger, Clayton Homes will lose its
competitive advantages. We have a solid understanding of the
industry's dynamics and recognize the significant paradigm shift
in financing.

"Your vote in favor of this transition is important to all
shareholders. We urge you to vote in favor."

Yours truly,

Kevin Clayton
Chief Executive Officer and President
Clayton Homes, Inc.

                         *     *     *

As reported in Troubled Company Reporter's April 9, 2003 edition,
the ratings of Clayton Homes, Inc., and some of its Vanderbilt
Mortgage manufactured housing securitizations were placed on
Rating Watch Positive by Fitch Ratings. Currently, Fitch has an
indicative senior unsecured rating of 'BB+' for Clayton Homes.


CMS ENERGY: Selling Loy Yang Power Plant & Mine for AUS$3.5 Bil.
----------------------------------------------------------------
CMS Energy (NYSE: CMS) and its partners have reached a conditional
agreement to sell the 2,000-megawatt Loy Yang power plant and
adjacent coal mine in Australia to an international consortium for
about $3.5 billion Australian (approximately $2.4 billion in U.S.
dollars), including $165 million Australian for the project
equity.

CMS Energy owns 49.6 percent of the Loy Yang project. NRG Energy
Inc., and Horizon Energy Australia Investments each own
approximately a 25 percent share. Net proceeds to CMS Energy for
its equity share are subject to closing adjustments and
transaction costs.

The Great Energy Alliance Corporation was formed earlier this year
by the Australian Gas Light Company, the Tokyo Electric Power
Company, Inc., and a group of financial investors led by the
Commonwealth Bank of Australia to explore the possible acquisition
of Loy Yang.

The conditions to completion of the sale include consents from Loy
Yang's financiers to a restructuring of the project's debt,
satisfactory resolution of regulatory issues and approvals,
rulings on tax and stamp duty obligations, as well as approvals
from the investors in Horizon Energy and the creditors committee
of NRG Energy.

The sales agreement guarantees GEAC a period of exclusivity while
the conditions of the purchase are satisfied. The signing of the
agreement allows GEAC to begin discussions with Loy Yang's
financiers to pursue a debt restructuring.

The brown coal-fired plant is the largest generator in Victoria,
Australia, accounting for about 24 percent of the state's
electricity generation. The CMS-led partnership bought the complex
for $3.8 billion in 1997 as Australia privatized its electric
industry.

CMS Energy (S&P, senior secured rated 'BB-', Rating Outlook
Negative) is an integrated energy company, which has as its
primary business operations an electric and natural gas utility,
natural gas pipeline systems, and independent power generation.

For more information on CMS Energy, visit http://www.cmsenergy.com


COUGAR HOLDINGS: DeCoria Maichel Airs Going Concern Uncertainty
---------------------------------------------------------------
On June 11, 2003 the Board of Directors of Cougar Holdings Inc.
agreed unanimously to no longer retain DeCoria, Maichel & Teague
P.S. as the Company's independent public accountants.  The reports
of DeCoria, Maichel & Teague P.S. on the financial Statements for
each of the years ended June 30, 2002 and 2001 contained the
statement that the Company's losses raise substantial doubt about
its ability to continue as a going concern.


CROSS MEDIA: Wants Court Authority to Hire Kramer Levin
-------------------------------------------------------
Cross Media Marketing Corporation and its debtor-affiliates ask
the U.S. Bankruptcy Court for the Southern District of New York to
approve the employment of Kramer Levin Naftalis & Frankel LLP as
their attorneys in connection with the commencement and
prosecution of their chapter 11 cases.

The Debtors selected Kramer Levin primarily because the Firm's
Bankruptcy Department has extensive experience in the fields of
bankruptcy and creditors' rights and, in particular, and has
experience representing debtors in other large and complex chapter
11 reorganization cases.

The Debtors expect Kramer Levin's services will include:

      a. the administration of these cases and the exercise of
         oversight with respect to the Debtors' affairs,
         including all issues arising from or impacting the
         Debtors or these chapter 11 cases;

      b. the preparation on behalf of the Debtors of necessary
         applications, motions, memoranda, orders, reports and
         other legal papers;

      c. appearances in Court and at various meetings to
         represent the interests of the Debtors;

      d. representing the Debtors in examining and negotiating
         potential a potential sale of the Debtors' businesses or
         refinancing of the Debtors' prepetition credit facility;

      e. negotiating with the prepetition credit facility lenders
         and the DIP lender, as well as any creditors' committee
         appointed in these cases, for the benefit of the
         estates;

      f. formulating, negotiating, drafting, and pursuit of
         confirmation of a plan or plans of reorganization and
         matters related thereto;

      g. such communication with creditors and others as the
         Debtors may consider desirable or necessary; and

      h. the performance of all other legal services for the
         Debtors in connection with these chapter 11 cases, as
         required under the Bankruptcy Code and the Bankruptcy
         Rules, and the performance of such other services as are
         in the interests of Debtors.

The principal attorneys expected to represent the Debtors in this
matter and their current hourly rates are:

           Kenneth H. Eckstein      $675 per hour
           Amy Caton                $415 per hour
           Jack A. Hazan            $410per hour
           Gordon Z. Novod          $295 per hour

The range of Kramer Levin's hourly rates for Kramer Levin's
attorneys and legal assistants is:

           Partners                 $485 - $700
           Counsel                  $495 - $585
           Associates               $235 - $475
           Legal Assistants         $160 - $185

Cross Media Marketing Corporation is a direct marketer and seller
of magazine subscriptions. The Company filed for chapter 11
protection on May 16, 2003 (Bankr. S.D.N.Y. Case No. 03-13901).
Jack Hazan, Esq., and Kenneth H. Eckstein, Esq., at Kramer Levin
Naftalis & Frankel LLP represent the Debtors in their
restructuring efforts.  When the Company filed for protection from
its creditors, it listed $91,357,187 in total assets and
$77,668,088 in total debts.


CRYOPAK INDUSTRIES: March 31 Working Capital Deficit Tops C$4MM
---------------------------------------------------------------
Cryopak Industries Inc. (TSX-V:CII) (OTCBB:CYPKF) reported its
results for its year ended March 31, 2003. (All succeeding amounts
are expressed in Canadian dollars unless specified otherwise).

Revenue for the fiscal year ended March 31, 2003 was $14.2
million, a 68% increase over the $8.5 million reported in the
previous fiscal year. The increase in revenue over the prior
period was due to the Company's acquisition of Ice-Pak Ltd. in
October 2002 and the ongoing growth in the sale of the Company's
existing products. The net loss for the period was $2.4 million as
compared to a net loss of $0.3 million for the previous fiscal
period. The loss for the period was due to a reduction in gross
margin and increased operating expenses. A significant proportion
of the Company's sales are denominated in US funds and as a
result, the Company's gross margin was negatively impacted by the
strengthening Canadian dollar relative to the US dollar. As well,
the Company incurred increased transportation costs during the
year due in part to increases in petroleum costs. The net loss was
further compounded by disproportionate increases in sales and
marketing and administration expenditures. The higher sales and
marketing and administrative expenses were in part attributed to
the Company's pursuit of the pharmaceutical packaging segment of
the market and the integration of Ice-Pak Ltd. into its
operations.

As a result of a detailed review, the Company will restate its
previously reported results for each of the quarterly periods for
the fiscal year ended March 31, 2003. This restatement will
disclose net earnings of $0.2 million in the first quarterly
period and a loss of $0.3 million and $0.3 million in the second
and third quarterly periods, respectively. These restated figures
result from accounting adjustments recorded by the Company which
include (i) recognizing sales revenue at the time of product
delivery, (ii) recording of stock compensation expense for non-
employees which had not previously been recorded, (iii) improving
the accuracy of recording inventory, prepaid expenses and accrued
liability amounts, (iv) reclassifying the Company's outstanding
Convertible Loan Agreement amount from long term liabilities to
current liabilities, and (v) finalizing the purchase price
allocation for the acquisition of Ice-Pak Ltd. The Company will be
filing the restated quarterly financial statements and
accompanying notes shortly with the applicable regulatory
authorities.

The principal and accrued interest owing on the matured $3.6
million Convertible Loan Agreement remains outstanding. The
Company continues to hold discussions with representatives for the
holders of that loan with a view to formalizing an extension of
the loan maturity or other resolution.

The Company also reported that it continues to experience a
challenging market and expects to report a net loss for the
recently completed quarterly period.

To move forward, the Company announced further management
additions. Effective immediately, Mr. Steve Belitzky has been
appointed as the interim Chief Operating Officer. Mr. Belitzky is
one of the former owners of Ice-Pak Ltd. and brings to Cryopak
over 30 years operating experience in the cold chain management
field. As previously announced, Mr. Martin Carsky, has been
appointed the Company's new Chief Financial Officer. Mr. Carsky is
a Chartered Accountant and brings to the Company extensive capital
markets, acquisitions and restructuring experience. The Company
has also appointed Mr. Chris Ebbehoj to the position of Vice
President & Corporate Controller, effective July 15, 2003. Mr.
Ebbehoj is also a Chartered Accountant and has held senior
financial positions with various privately held Vancouver-based
companies in the past. Both Mr. Belitzky and Mr. Carsky will
report to the Company's Chief Executive Officer, Mr. John Morgan.
Mr. Ebbehoj will report to Mr. Carsky.

Cryopak Industries' March 31, 2003 balance sheet shows that its
total current liabilities outweighed its total current assets by
about $4 million.

Cryopak Industries Inc. develops, manufactures and markets quality
temperature-controlling products such as the premium patented
Cryopak Flexible Ice(TM) Blanket, as well as flexible hot and cold
compresses, gel packs, and instant hot and cold packs. For more
information about Cryopak Industries Inc. or its products, visit
the Company's Web site at http://www.cryopak.com

Cryopak Industries Inc. trades on both the TSX Venture Exchange
and the OTC Bulletin Board (TSX-V:CII and OTCBB:CYPKF).


CSFB MORTGAGE: Fitch Takes Rating Actions on Ser. 2003-C3 Notes
---------------------------------------------------------------
CSFB 2003-C3, commercial mortgage pass-through certificates are
rated by Fitch as follows:

         -- $127,000,000 Class A-1, 'AAA';
         -- $214,000,000 Class A-2, 'AAA';
         -- $212,000,000 Class A-3, 'AAA';
         -- $55,000,000 Class A-4, 'AAA';
         -- $862,414,000 Class A-5, 'AAA';
         -- $1,724,825,640 Class A-X, 'AAA';
         -- $1,613,358,000 Class A-SP, 'AAA';
         -- $171,206,187 Class A-Y, 'AAA';
         -- $47,432,000 Class B, 'AA';
         -- $19,405,000 Class C, 'AA-';
         -- $38,808,000 Class D, 'A';
         -- $19,405,000 Class E, 'A-';
         -- $19,404,000 Class F, 'BBB+';
         -- $12,936,000 Class G, 'BBB';
         -- $19,404,000 Class H, 'BBB-';
         -- $19,405,000 Class J, 'BB+';
         -- $12,936,000 Class K, 'BB';
         -- $6,468,000 Class L, 'BB-';
         -- $10,780,000 Class M, 'B+';
         -- $2,156,000 Class N, 'B';
         -- $4,312,000 Class O, 'B-';
         -- $21,560,640 Class P, 'NR';
         -- $2,534,000 Class 622A, 'BBB-';
         -- $6,010,000 Class 622B, 'BBB-';
         -- $6,009,000 Class 622C, 'BBB-';
         -- $6,010,000 Class 622D, 'BBB-';
   -- $17,836,000 Class 622E, 'BB';
         -- $1,601,000 Class 622F, 'BB'.

Classes A-1, A-2, A-3, A-4, A-5, B, C, D, and E are offered
publicly, while classes A-X, A-SP, A-Y, F, G, H, J, K, L, M, N, O,
P, 622A, 622B, 622C, 622D, 622E, and 622F are privately placed
pursuant to Rule 144A of the Securities Act of 1933. The
certificates represent beneficial ownership interest in the trust,
primary assets of which are 249 fixed-rate loans having an
aggregate principal balance of approximately $1,724,825,640, as of
the cutoff date.


DELTA AIR: Recommends Shareholders Nix 'Mini-Tender' Offer
----------------------------------------------------------
Delta Air Lines, (NYSE: DAL) strongly recommended last week that
stockholders reject an unsolicited below-market "mini-tender"
offer for up to 3,000,000 shares of Delta's common stock (which is
approximately 2.43 percent of Delta's outstanding common stock) by
a Canadian firm named TRC Capital Corporation.  The offer is being
made at the cash price of $13.55 per share, which was 4.71 percent
below the closing price of Delta stock on the date of the offer.

Mini-tender offers, which typically seek less than five percent of
a company's common stock -- thereby avoiding many disclosure
requirements of the Securities and Exchange Commission -- are the
subject of an SEC bulletin, which is available on the SEC Web
site: http://www.sec.gov/investor/pubs/minitend.htm

That bulletin states that "some bidders make mini-tender offers at
below-market prices, hoping that they will catch investors off
guard if the investors do not compare the offer price to the
current market price."  Later, the bulletin says, "with most mini-
tender offers, investors typically feel pressured to tender their
shares quickly without having solid information about the tender
offer or the people behind it."

Delta shareholders are cautioned that TRC has made numerous below-
market "mini-tender" offers for the shares of other companies,
that TRC offers no assurances that it will have the financial
resources to complete the offer, and that TRC can extend the offer
and delay payment beyond the scheduled expiration date or amend
the offer, including the price.

Shareholders should also be aware that they will have no
withdrawal rights from the scheduled expiration date of July 25,
2003, until Aug. 5, 2003, even if TRC is unable to make payment on
the scheduled expiration date and is attempting to obtain funds to
pay for the tendered shares.

Delta shareholders who may have already tendered their shares are
advised that they have the right to withdraw their shares by
prescribed written notice and procedures at any time prior to the
scheduled expiration time of the offer which is 12:00 Midnight ET
on Friday, July 25, 2003, and in other circumstances as set forth
in the TRC's Offer to Purchase.

Delta Air Lines, the world's second largest airline in terms of
passengers carried and the leading U.S. carrier across the
Atlantic, offers 5,734 flights each day to 444 destinations in 79
countries on Delta, Song, Delta Express, Delta Shuttle, Delta
Connection and Delta's worldwide partners.  Delta is a founding
member of SkyTeam, a global airline alliance that provides
customers with extensive worldwide destinations, flights and
services.  For more information, go to http://www.delta.com

As reported in Troubled Company Reporter's June 9, 2003 edition,
Fitch Ratings assigned a rating of 'B+' to the $300 million in
convertible senior unsecured notes issued by Delta Air Lines, Inc.
The privately placed notes carry a coupon rate of 8% and mature in
2023. Additionally, the notes are callable by the company in five
years and contain investor put options at years 5, 10, and 15. The
Rating Outlook for Delta is Negative.

The 'B+' rating reflects considerable uncertainty over Delta's
ability to quickly realign its cost structure with a sharply
diminished airline industry revenue base. While Delta has
benefited from a relatively strong liquidity position and
continued access to the capital markets during the U.S. airline
industry's financial crisis, the carrier faces a need to reduce
unit labor costs in line with the contractual changes already made
at American, United and US Airways. With an uncompetitive pilot
contract still in force, Delta's operating performance will remain
relatively weak as the U.S. network carriers look for signs of a
meaningful traffic and yield recovery. Delta's pilots, represented
by the Air Line Pilots Association are scheduled to respond to
management's request for cost concessions as early as next week.
At this time there is no clear evidence that an agreement with
ALPA can be reached quickly.


DYNEGY INC: Reaches Pact with Kroger re 4 Power Supply Contracts
----------------------------------------------------------------
Dynegy Inc. (NYSE:DYN) has reached an agreement with the Kroger
Company (NYSE:KR) related to four power supply contracts. Under
the terms of the proposed settlement agreement, which must be
approved by the Federal Energy Regulatory Commission, Kroger will
pay Dynegy $110 million to terminate two of four power contracts
and to restructure the remaining two contracts through which
Dynegy indirectly provides electricity to Kroger subsidiary stores
in California. The parties have also agreed to resolve an
outstanding FERC dispute related to contract pricing. The FERC is
expected to rule on the proposed settlement within the next 60
days.

As part of the settlement, Dynegy will continue to provide Kroger
subsidiary stores in California with 50 megawatts of electricity
through 2006 under the two restructured contracts. Dynegy expects
to record a pre-tax, non-cash charge of approximately $30 million
in its customer risk management segment in the second quarter
2003. The $110 million cash payment is expected during the third
quarter and represents an accelerated payment under the terminated
and restructured contracts.

Dynegy Inc. provides electricity, natural gas, and natural gas
liquids to wholesale customers in the United States and to retail
customers in the state of Illinois. The company owns and operates
a diverse portfolio of energy assets, including power plants
totaling more than 13,000 megawatts of net generating capacity,
gas processing plants that process more than 2 billion cubic feet
of natural gas per day and approximately 40,000 miles of electric
transmission and distribution lines.

As previously reported in Troubled Company Reporter, ratings for
Dynegy Holdings Inc., Dynegy Inc. and affiliated companies,
Illinois Power and Illinova Corp. were affirmed and removed from
Rating Watch Negative by Fitch Ratings. They were originally
placed on Rating Watch Negative on Nov. 9, 2001.

The Rating Outlook for DYN and its affiliates is Stable.

In addition, Fitch assigned a 'B+' rating to DYNH's secured $1.1
billion revolving credit facility and $200 million term loan A,
both maturing on Feb. 15, 2005. Fitch also assigned a 'B' rating
to its $360 million term loan B, maturing on Dec. 15, 2005.

The removal of the Negative Rating Watch status reflects the
lessening of near-term default risk as a result of several
favorable actions and events. On April 2, 2003, DYNH entered into
its new $1.66 billion secured bank credit facility. The facility
requires no scheduled amortization of principal and should be
adequate to fund ongoing collateral and operating needs through
2004. In addition, the risk of a default and resulting debt
acceleration triggered by certain financial covenants contained in
the prior credit facilities and Polaris lease has been eliminated.
Other favorable recent events were: the filing of audited
financial statements for years 1999 through 2002 with material
disclosures consistent with expectations, the sale of DYN's U.S.
communications business, the reporting of stronger than
anticipated operating results for the first quarter of 2003, and
the closing of an agreement with Southern Co. to terminate three
wholesale tolling arrangements eliminating $1.7 billion of future
capacity payments.

Current ratings at DYN reflect Fitch's latest assessment of the
company's overall credit profile and recognize the structural
subordination of unsecured lenders to its secured bank lenders and
project debt. The revolver and term loan A are secured by a first
priority interest in substantially all assets and stock of DYNH
and a second priority interest in the assets and stock of DYN,
including the stock of ILN. The term loan B is secured by a first
priority interest in the assets and stock of DYN and a second
priority interest in substantially all assets and stock of DYNH.
The new facilities are secured on a subordinated basis to more
than $1.8 billion of DYNH project debt. The one notch separation
between the bank facilities recognizes the expected higher
collateral coverage for the revolver and Term Loan A to that for
the term loan B.


EMAGIN CORP: Shareholders Approve Adoption of Stock Option Plan
---------------------------------------------------------------
eMagin Corporation (AMEX:EMA), a leading developer of organic
light emitting diode microdisplay technology, announced results of
its annual general meeting held on July 2, 2003. Shareholders
holding 23,555,038 shares were represented at the annual general
meeting in person or by proxy.

At the meeting, the Company's shareholders approved all of the
proposals presented at the meeting, which included the following
matters:

1. Gary W. Jones and Jack Rivkin were elected as Class A members
    and Paul Cronson was elected as a Class B member to the board
    of directors;

2. The amendment to the articles of incorporation to increase the
    number of authorized shares of common stock from 100,000,000 to
    200,000,000;

3. The granting to the board of directors of the authority to
    amend the articles of incorporation to effect a one-for-ten
    reverse stock split, upon determination by the board that such
    a reverse stock split is in the best interests of the Company
    and its shareholders;

4. The adoption of eMagin's 2003 Stock Option Plan; and

5. The Ratification of Grant Thornton LLP as eMagin's independent
    accountants for fiscal years 2002 and 2003.

In addition, following the approval of all proxy proposals, the
board of directors passed a resolution to amend the 2003 Stock
Option plan to limit the evergreen provision to 2,000,000
additional shares for 2004 and an additional 3% per year for each
year thereafter instead of an additional 20% per year.

Forward-looking statements or additional information provided at
the meeting included the following:

1. Guidance was given for an expectation, pending additional audit
    review, of a profitable second quarter 2003, primarily driven
    by benefits from the debt restructuring;

2. Following the company's recent financing, materials for
    production of microdisplays were on order and on schedule for
    delivery, but a prior lack of materials has reduced the volume
    of shipments the past quarter;

3. The company's backlog of purchase agreements is intact, but the
    schedules of customer product launches and required shipment
    schedules were being revised;

4. Typical pricing of SVGA displays is in the $75-600 range
    depending on quantities, terms, and specifications, with sample
    quantities typically being priced higher. These displays
    include built-in light sources, drivers, and primary
    controllers, providing for low system cost;

5. Disclosure was made of a display and integrated circuit design
    collaboration with Rohm Corporation for small size displays
    with larger numbers of displays per wafer to permit lower
    pricing. Displays will be developed for use as viewfinders for
    potential use in high volume consumer products such as
    camcorders and cameras. (Additional information will be
    provided by the companies in a forthcoming announcement).

A leading developer of virtual imaging technology, eMagin combines
integrated circuits, OLED microdisplays, and optics to create a
virtual image similar to the real image of a computer monitor or
large screen TV. eMagin provides near-eye microdisplays
incorporated in products such as viewfinders, digital cameras,
video cameras and personal viewers for cell phones as well as
headset-application platforms which include mobile devices such as
notebook and sub-notebook computers, wearable computers, portable
DVD systems, games and other entertainment. eMagin's corporate
headquarters and microdisplay operations are co-located with IBM
on its Hudson Valley campus in East Fishkill, N.Y. Wearable and
mobile computer headset/viewer system design and full-custom
microdisplay system facilities are located at its wholly owned
subsidiary, Virtual Vision, Inc., in Redmond, WA. Visit
http://www.emagin.comfor more information on the Company.

At March 31, 2003, eMagin's balance sheet shows a total
shareholders' equity deficit of about $15 million.


ENCOMPASS: Inks Stipulation Resolving Microsoft's Plan Objection
----------------------------------------------------------------
The Encompass Services Debtors, on one hand, and Microsoft
Corporation and MSLI GP, on the other hand, reached a stipulation
pursuant to which the parties agreed that:

     (a) Neither the Second Amended Plan of Reorganization nor the
         Confirmation Order will have any effect on the Enterprise
         Agreement and two select agreements;

     (b) The Debtors will assume, assign, or reject the Enterprise
         Agreements and the Select Agreements no later than
         June 28, 2003.  Otherwise, the Enterprise Agreements and
         the Select Agreements are deemed rejected effective
         June 29, 2003;

     (c) Pending assumption, assignment, or rejection of the
         Agreements, absent Microsoft's written consent, the
         Debtors will not transfer any software, whether loaded on
         hardware or otherwise, licensed pursuant to the Agreements
         to any third party.  The Debtors may transfer software
         properly licensed pursuant to the Agreements provided the
         transfer is effected in accordance with the terms of the
         Agreements and applicable licensing agreements;

     (d) The terms of the stipulation will not modify or alter the
         rights or obligations of the parties under the Agreements;
         and

     (e) Microsoft withdraws its Objection to the Debtors'
         Reorganization Plan. (Encompass Bankruptcy News, Issue No.
         15; Bankruptcy Creditors' Service, Inc., 609/392-0900)


FEDERAL-MOGUL: Court Gives Go-Ahead to Amend Headquarters Leases
----------------------------------------------------------------
Federal-Mogul Corporation and its debtor-affiliates sought and got
the Court's approval to enter into amended and restated real
estate property leases and certainly ancillary agreements relating
to their corporate headquarters in Southfield, Michigan.

Under the amended and restated leases, the Debtors will remain
in the Headquarters Facility for an extended period and reduce
the costs of their rental obligations by $38,500,000 through
2015.

With the Amended and Restated Leases, the Debtors' aggregate
annual rent obligations will be $2,400,000 through 2015.
Thereafter, if they exercise the option to remain the Facility,
the Debtors' rent obligations during any extension period will be
$95% of the fair market rental value of the Headquarters Facility.
The fair market value will be determined by an independent
appraiser mutually selected by the Debtors and the landlords.
The Debtors will also have one year of free rent -- beginning
February 1, 2003 -- and certain other concessions.

Other minor considerations under the Amended and Restated Leases
include a provision that allows the Debtors to sublease up to
40% of the Headquarters Facility absent the landlords' consent.
The Debtors may sublease additional portions but with the
landlords' consent.  The Amended Leases also allow the landlords
to purchase the Debtors' interest in the land underneath the
Headquarters Facility.  The purchase price for the land will be
equal to the net present value -- discounted at 9.5% -- of the
annual ground lease rent, which is $130,000, times the number of
years remaining until the expiration of the ground leases at the
time the landlords exercise the option. (Federal-Mogul Bankruptcy
News, Issue No. 39; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


FLEMING COS: Sells 15 Inactive Arizona Liquor Licenses to Fry's
---------------------------------------------------------------
Fleming Companies, Inc., ABCO Food Group, Inc. and Richmar Foods,
Inc. own 15 inactive liquor licenses.  The Debtors have not used
the Liquor Licenses for many months and have no business need for
them.  Arizona liquor licenses are inactivated after 30 days of
non-use and, unless they are sold, relocated or put back into use
by the owner within 36 months of becoming inactive, they revert
to the State.  During the first five months of non-use, there are
no fees; however, there is a $100 per month surcharge on each
inactive license thereafter.

Before the Petition Date, Nicholas C. Guttilla, Esq., on the
Debtors' behalf, negotiated a sale of the Pinal County Liquor
License to Smith's Food & Drug Centers, Inc., also known as Fry's
Food & Drug Centers, for $30,000.  Mr. Guttilla also negotiated a
sale of 12 Maricopa County and two Pima County licenses as a
package to Fry's for $1,400,000.

The Debtors relate that liquor licenses in Arizona can only be
used in counties where they are issued.  The value of a license
depends on where it is issued and on how many are on the market
at any one time for that county.  The more licenses available on
the market will lessen its value.  The current value of a single
license on the market at a time is between $125,000 and $135,000
in Maricopa County and between $30,000 and $35,000 in Pima
County.  The Debtors believe that the purchase price offered by
Fry's is the best offer attainable.  There are very few companies
that are in a position to purchase 15 liquor licenses at one
time.

Accordingly, the Debtors sought and obtained the Court's
permission to sell the Arizona Liquor Licenses to Fry's, free of
existing liens, claims or interests. (Fleming Bankruptcy News,
Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392-0900)


GAYLORD ENTERTAINMENT: Selling Majority Interest in Redhawks
------------------------------------------------------------
Gaylord Entertainment Company has agreed to sell its approximate
76% interest in the Oklahoma City RedHawks, a AAA baseball team,
to The Oklahoma Baseball Club LLC. The transaction is expected to
close this fall pending required approvals from the Pacific Coast
League and Major League Baseball. Purchase price was not
disclosed.

"This sale is another step in our nearly completed divestiture
program. Sales of our non-core assets have enabled us to pay down
debt and invest in our two most valuable brands - Gaylord Hotels
and the Grand Ole Opry," said Colin Reed, president and CEO of
Gaylord Entertainment. "With the anticipated sale of the RedHawks,
our focus on our two brands will become more intense."

Since initiating its divestiture program in April 2001, Gaylord
has sold non-core assets grossing more than $330 million.

The Oklahoma Baseball Club LLC was formed by principal owners
Robert A. Funk and E. Scott Pruitt to purchase the baseball team.
Funk is a local Oklahoma City businessman who is founder and
chairman of Express Personnel Services. Pruitt is an Oklahoma
state senator from Broken Arrow who played Division I baseball at
the University of Kentucky. He will be the ownership general
managing partner and will play an active role in the RedHawk's
day-to-day operations.

"Scott and I are delighted to have the opportunity to purchase one
of Oklahoma City's most recognizable and cherished assets," Funk
said. "I have always had a strong commitment to give back to the
community which has helped me prosper."

"The RedHawks provide a competitive and entertaining brand of
baseball, and with the Bricktown Ballpark, have one of the most
unique venues in all of professional baseball," Pruitt said. "We
will seek out new, innovative promotions to ensure that the
RedHawks continue to provide quality entertainment to Oklahoma
families for generations to come."

"We are pleased to have found two respected and capable Oklahoma
leaders to purchase the RedHawks," Reed said. "In their hands, we
are confident that the RedHawks will continue to be an integral
part of the Oklahoma City community."

Gaylord Entertainment (NYSE:GET), a leading hospitality and
entertainment company based in Nashville, Tenn., owns and operates
Gaylord Hotels branded properties, including the Gaylord Opryland
Resort & Convention Center in Nashville and the Gaylord Palms
Resort & Convention Center in Kissimmee, Fla., and the Radisson
Hotel Opryland in Nashville. The company's entertainment brands
include the Grand Ole Opry, the Ryman Auditorium, the General
Jackson Showboat, the Springhouse Golf Club, the Wildhorse Saloon
and WSM-AM. For more information about the company, visit
http://www.gaylordentertainment.com

As reported in Troubled Company Reporter's May 27, 2003 edition,
the National Hockey League's Nashville Predators filed suit
against Gaylord Entertainment Company (NYSE:GET) for failure to
meet its financial obligations regarding the naming rights of the
Gaylord Entertainment Center.

The suit was filed in the Chancery Court for Davidson County,
Tenn.

According to Predators attorney, Gaylord Entertainment did not
make its scheduled semi-annual payment of $1,186,565.50 that was
due in January 2003, despite formal written notification and
verbal contact. As a result, Gaylord is now in default. In
addition, the Predators reserve the right to pursue future claims
(more than $60,000,000) for the entire remaining term of the
naming rights agreement.


GEORGIA-PACIFIC: Will Publish Second-Quarter Results on July 17
---------------------------------------------------------------
Georgia-Pacific Corp. (NYSE: GP) will announce second quarter 2003
earnings results July 17, prior to market opening.

Following the release of results, Georgia-Pacific management will
participate in a live audio Webcast and conference call beginning
at 11 a.m. Eastern time.

To access the Webcast, visit http://www.gp.com/investoron July 17
and follow the link. The Webcast will contain a supplemental
presentation, which will also be available for download.

Call participants may dial toll free (888) 467-8159 or (484) 630-
9765 for international callers. The password for the conference
call is "GAPAC." Please allow ample time to access the conference
call and Webcast.

Replay of the conference call will be available until 5 p.m.
Eastern time, Aug. 15, by calling toll-free (888) 568-0691 or
(402) 998-1464 for international callers. The replay also will be
available on the Investor Information section of Georgia-Pacific's
Web site, at http://www.gp.com/investor

Headquartered at Atlanta, Georgia-Pacific is one of the world's
leading manufacturers of tissue, packaging, paper, building
products, pulp and related chemicals.  With 2002 annual sales of
more than $23 billion, the company employs approximately 61,000
people at 400 locations in North America and Europe.  Its familiar
consumer tissue brands include Quilted Northern(R), Angel Soft(R),
Brawny(R), Sparkle(R), Soft 'n Gentle(R), Mardi Gras(R), So-
Dri(R), Green Forest(R) and Vanity Fair(R), as well as the
Dixie(R) brand of disposable cups, plates and cutlery. Georgia-
Pacific's building products distribution segment has long been
among the nation's leading wholesale suppliers of building
products to lumber and building materials dealers and large do-it-
yourself warehouse retailers.  For more information, visit
http://www.gp.com

                           *   *   *

As reported in the Troubled Company Reporter's May 29, 2003
edition, Standard & Poor's Ratings Services assigned its 'BB+'
senior unsecured debt rating to Georgia-Pacific Corp.'s $350
million senior notes due 2008 and $150 million senior notes due
2014.

Standard & Poor's at the same time affirmed its 'BB+' corporate
credit rating on the company. The outlook remains negative. Debt
at Georgia-Pacific, excluding capitalized operating leases and
unfunded postretirement obligations, totals about $11.9 billion.


GMAC COMMERCIAL: Fitch Rates 7 Note Classes at Low-B/Junk Levels
----------------------------------------------------------------
GMAC Commercial Mortgage Securities, Inc.'s mortgage pass-through
certificates, series 2001-C2, $130.2 million class A-1, $437.7
million class A-2, and interest-only classes X-1 and X-2 are
affirmed at 'AAA' by Fitch Ratings. In addition, Fitch affirms the
following classes: $34 million class B at 'AA'; $11.3 million
class C at 'AA-'; $15.1 million class D at 'A'; $9.4 million class
E at 'A-'; $15.1 million class F at 'BBB+'; $10.4 million class G
at 'BBB'; $9.4 million class H at 'BBB-'; $23.6 million class J at
'BB+'; $5.7 million class K at 'BB'; $5.7 million class L at 'BB-
'; $11.3 million class M at 'B+'; $3.8 million class N at 'B';
$3.8 million class O at 'B-'; and $3.8 million class P at 'CCC'.
Fitch does not rate the $11.3 million class Q certificates. The
rating affirmations follow Fitch's annual review of the
transaction, which closed in June 2002. No loans have paid off
since issuance.

The rating affirmations reflect the consistent loan performance
and minimal reduction of the pool collateral balance since
closing.

GMAC Commercial Mortgage Corp, the master servicer, collected
year-end (YE) 2002 financials for 64% of the pool balance. Based
on the information provided the resulting YE 2002 weighted average
debt service coverage ratio (DSCR) is 1.31 times (x) unchanged
from issuance for the same loans. Currently, there are no
delinquent or specially serviced loans.

Fitch will continue to monitor this transaction, as surveillance
is ongoing.


GMAC COMM'L: Fitch Takes Rating Actions on Series 2001-C1 Notes
---------------------------------------------------------------
GMAC Commercial Mortgage Securities, Inc.'s mortgage pass-through
certificates, series 2001-C1, $93.6 million class A-1, $546.8
million class A-2, and interest-only classes X-1 and X-2 are
affirmed at 'AAA' by Fitch Ratings. In addition, Fitch affirms the
following classes: $41 million class B at 'AA+'; $32.4 million
class C at 'A+'; $13 million class D at 'A'; $17.3 million class E
at 'BBB+'; $13 million class F at 'BBB'; $13 million class G at
'BBB-'; $25.9 million class H at 'BB+'; $6.5 million class J at
'BB'; $6.5 million class K at 'BB-'; $13 million class L at 'B+';
$4.3 million class M at 'B'; $4.3 million class N at 'B-'; and the
$4.3 million class O at 'CCC'. Fitch does not rate the $13 million
class P certificates. The rating affirmations follow Fitch's
annual review of the transaction, which closed in April 2001. No
loans have paid off since issuance.

The rating affirmations reflect the consistent loan performance
and minimal reduction of the pool collateral balance since
closing.

GMAC Commercial Mortgage Corp, the master servicer, collected
year-end 2002 financials for 74% of the pool balance. Based on the
information provided, the resulting YE 2002 weighted average debt
service coverage ratio is 1.30 times, compared to 1.31x at
issuance for the same loans.

Currently, two loans (2%) are in special servicing. The largest
loan ($14.1 million or 1.7%), North Central Plaza, is secured by
an office property in Dallas, Texas and is currently real estate-
owned (REO). The property is currently 62% occupied and is being
marketed for sale. The appraised value of the property was $10.5
million as of November 2002 and therefore losses are expected. The
other specially serviced loan ($2.9 million or 0.35%) is secured
by an office property in Hauppauge, New York. This loan is current
and is expected to be returned to the master servicer within a few
months. There are 25 loans on the master servicer watchlist,
including two of the top five loans in the transaction. However,
all of the loans on the watchlist remain current.

Fitch will continue to monitor this transaction, as surveillance
is ongoing.


GUESS? INC: Comparable Store Sales Figures Climb 11.5% to 24.3%
---------------------------------------------------------------
Guess?, Inc. (NYSE:GES) reported that total June retail sales for
the four weeks ended June 28, 2003 were $29.2 million, an increase
of 24.3% from sales of $23.5 million for the four weeks ended
June 29, 2002. Comparable store sales for the June period
increased 16.2%. Comparable store sales for the Company's full
priced retail stores increased 16.3%, and comparable store sales
at the factory outlet stores increased 15.8%.

Carlos Alberini, President and Chief Operating Officer, commented,
"We are very pleased with the sales improvement we have achieved
over the last few months.  However, we remain cautious about our
overall business, especially wholesale, given the continued
difficult retail environment and ongoing pressures on margins."

For the second quarter ended June 28, 2003, total retail sales
increased 19.8% to $95.7 million from $79.9 million for the second
quarter of 2002.  Comparable store sales for the quarter increased
11.7%.

Beginning with the announcement of July 2003 retail sales, which
is scheduled for August 6, 2003, the Company will continue to
report total comparable store sales changes for each month, but
will no longer break out comparable store sales changes for retail
and factory stores separately.

Guess?, Inc. designs, markets, distributes and licenses one of the
world's leading lifestyle collections of contemporary apparel,
accessories and related consumer products.

As reported in Troubled Company Reporter's January 17, 2003
edition, Standard & Poor's lowered its corporate credit rating on
apparel manufacturer and retailer Guess? Inc., to 'BB-' from 'BB'.

At the same time, Standard & Poor's lowered its subordinated debt
rating on the company to 'B' from 'B+'. The outlook is negative.
The Los Angeles, California-based company had approximately $86
million in total debt outstanding as of September 28, 2002.

"The downgrade reflects the continued erosion of Guess?'s
operating performance and weakened credit protection measures. The
company's performance in recent years has been hurt by the
intensely competitive retail environment, waning consumer
confidence, and consumers' poor response to its product line,"
said Standard & Poor's credit analyst Diane Shand.


HAWAIIAN HOLDINGS: Ernst & Young Severs Professional Ties
---------------------------------------------------------
On June 18, 2003, Hawaiian Holdings, Inc. received a letter from
Ernst & Young LLP notifying the Company that Ernst & Young had
resigned as the Company's auditors, effective immediately. Ernst &
Young will continue to serve as the auditors of Hawaiian Airlines,
Inc., the Company's wholly-owned operating subsidiary, which is
currently operating its business under the jurisdiction of the
United States Bankruptcy Court for the District of Hawaii and in
accordance with the applicable provisions of the United States
Bankruptcy Code and orders of the Bankruptcy Court.

Ernst & Young's report dated March 31, 2003 on the Company's
consolidated financial statements as of, and for, the year ended
December 31, 2002 was modified as to the existence of substantial
doubt about the Company's ability to continue as a going concern.

During Ernst & Young's audit of the Company's financial statements
for the year ended December 31, 2001, there was a disagreement
between the Company and Ernst & Young regarding the accounting for
certain non-passenger related excise taxes. The Company ultimately
agreed to record an accrual for such excise taxes, which resulted
in the matter being resolved to the satisfaction of Ernst & Young.
If this matter had not been resolved to the satisfaction of Ernst
& Young, it would have been referred to in Ernst & Young's
auditors' report on the Company's financial statements for the
year ended December 31, 2001. The Audit Committee of the Company's
Board of Directors has discussed the disagreement with
representatives of Ernst & Young, and Ernst & Young has been
authorized to respond fully to the inquiries of any successor
independent accounting firm regarding this disagreement.


HEALTHSOUTH: Annual Meeting Set for 3:00 p.m. Today in New York
---------------------------------------------------------------
HealthSouth Corporation (OTC Pink Sheets: HLSH) announced that its
meeting for creditors and stockholders today will be held at the
One Madison Avenue Auditorium, One Madison Avenue, New York, New
York. Individuals attending the meeting in person should use the
Park Avenue South entrance at 24th Street.  Photo identification
will be required and participants should allow ample time for
security.

As previously announced, the meeting will begin at 3:00 pm Eastern
Time and is being held to review HealthSouth's preliminary
business plan and to provide current financial projections for the
next twelve months. The meeting will be hosted by Joel C. Gordon,
Interim Chairman of the Board, Robert P. May, Interim Chief
Executive Officer, and Bryan Marsal, Chief Restructuring Officer.

Individuals may access the meeting by phone by dialing 888-913-
9967. International callers should dial 773-756-4625. A digital
recording will be available, beginning two hours after the
completion of the meeting, from July 7, 2003 to July 17, 2003. To
access the recording, please dial 800-839-2153 and enter the pass
code 3393. International callers should dial 402-998-1179.

A live Internet broadcast will also be available at
http://www.healthsouth.comby clicking on an available link. The
Webcast will be archived for replay purposes for one week after
the live broadcast on the same Web site.

A copy of the slide presentation that HealthSouth plans to use
during the meeting will be filed with the U.S. Securities and
Exchange Commission and will also be posted on the Company's Web
site at http://www.healthsouth.com

HealthSouth, which is currently in default under its credit
facility with JPMorgan Chase Bank and Wachovia Securities, is the
nation's largest provider of outpatient surgery, diagnostic
imaging and rehabilitative healthcare services, with nearly 1,700
locations in all 50 states and abroad.


IMCLONE SYSTEMS: March 31 Net Capital Deficit Balloons to $220MM
----------------------------------------------------------------
ImClone Systems Incorporated (NASDAQ: IMCLE) announced its
financial results for the quarter ended March 31, 2003. Total
revenues for the first quarter of 2003 were $19.6 million as
compared with $18.6 million for the first quarter of 2002. Net
loss was $34.8 million for the first quarter of 2003, compared
with a net loss of $30.1 million for the same period in 2002.

Total operating expenses for the three months ended March 31, 2003
were $53.9 million as compared with $48.2 million for the first
quarter of 2002. Research and development expenses for the three
months ended March 31, 2003 were $46.7 million as compared with
$37.8 million for the first quarter of 2002. Marketing, general
and administrative expenses for the three months ended March 31,
2003 were $7.2 million as compared with $8.1 million for the first
quarter of 2002.

The Company had $228.9 million in cash, cash equivalents and
securities available for sale at March 31, 2003, compared with
$247.7 million at December 31, 2002.

The Company believes that its existing cash on hand, marketable
securities and amounts to which it is entitled under licenses and
other agreements should enable it to maintain its current and
planned operations through at least June 2004.

At March 31, 2003, the Company's balance sheet shows a total
shareholders' equity deficit of about $220 million.

The NASDAQ Listing Qualifications Panel will notify the Company
regarding the timing of the removal of the "E" attached to its
trading symbol, which was added as a result of the Company's
inability to timely file its 2002 Annual Report on Form 10-K and
its First Quarter 2003 Quarterly Report on Form 10-Q. Once the "E"
is removed, the trading symbol will revert back to "IMCL".

ImClone Systems Incorporated is committed to advancing oncology
care by developing a portfolio of targeted biologic treatments,
designed to address the medical needs of patients with a variety
of cancers. The Company's three programs include growth factor
blockers, angiogenesis inhibitors and cancer vaccines. ImClone
Systems' strategy is to become a fully integrated
biopharmaceutical company, taking its development programs from
the research stage to the market. ImClone Systems' headquarters
and research operations are located in New York City, with
additional administration and manufacturing facilities in
Somerville, New Jersey.


INTERSTATE BAKERIES: Look for Q4 & Fiscal 2003 Results by Jul 14
----------------------------------------------------------------
Interstate Bakeries Corporation (NYSE:IBC) announced that as a
result of a revision to its self-insurance reserve estimates, it
anticipates reporting results for its fourth quarter and 2003
fiscal year, which ended May 31, 2003, that are approximately 10
to 12 cents per diluted share below previously issued guidance.

The self-insurance revision primarily reflects a change in the
Company's estimated expense for workers' compensation claims
resulting from recent incurred loss development experience
reported to the Company by its workers' compensation service
provider. The revised estimate is expected to result in an
approximate eight percent increase in the Company's overall self-
insurance reserves.

IBC is scheduled to announce results for its fourth quarter and
2003 fiscal year on July 14, 2003. The Company also has announced
a conference call to discuss those results and the outlook for
fiscal year 2004 at 9:00 a.m. CDT on July 14. The call-in number
is 1-800-915-4836, and participants may call in beginning at 8:50
a.m. CDT. The call will also be webcast at
http://www.interstatebakeriescorp.com

An audio tape of the call will be available at approximately Noon
(CDT) on July 14, 2003 until Midnight on July 25, 2003. You may
listen to the audio tape by calling 973-709-2089 and the Passcode
I.D. is 300287.

Interstate Bakeries Corporation is the nation's largest baker and
distributor of fresh baked bread and sweet goods in the U.S.,
under various national brand names including Wonder, Hostess,
Dolly Madison, Merita and Drake's. The Company, with 58 bread and
cake bakeries located in strategic markets from coast-to-coast, is
headquartered in Kansas City, Missouri.

As reported in Troubled Company Reporter's May 5, 2003 edition,
Standard & Poor's Ratings Services lowered its corporate credit
and bank loan ratings on fresh baked goods manufacturer Interstate
Bakeries Corp. to 'BB+' from 'BBB-'.

At the same time, the preliminary senior unsecured and
subordinated debt ratings on the company were both lowered to 'BB-
' from 'BBB-' and 'BB+', respectively. All the ratings have been
removed from CreditWatch where they were placed on April 9, 2003.
The outlook is negative.


J.P. MORGAN: Fitch Affirms Low-B Ratings of Classes F, G & H
------------------------------------------------------------
Fitch Ratings upgrades J.P. Morgan Commercial Mortgage Finance
Corp.'s mortgage pass-through certificates, series 1999-C7, $40.1
million class B certificates to 'AA+' from 'AA'. In addition, the
following classes are affirmed by Fitch: $121.8 million class A-1,
$357 million class A-2 and interest-only class X at 'AAA'; $40.1
million class C at 'A+'; $52.1 million class D at 'BBB'; $12
million class E at 'BBB-'; $38.1 million class F at 'BB'; $26
million class G at 'B'; and $4 million class H at 'B-'. The $24
million class NR certificates are not rated by Fitch. The rating
actions follow Fitch's review of the transaction, which closed in
April 1999.

The upgrade is primarily the result of increased subordination
levels due to loan payoffs and amortization. As of the June 2003
distribution date, the pool's aggregate principal balance has been
reduced by 10.3% to $715.1 million from $801.4 million at
issuance. The certificates are collateralized by 142 fixed-rate
mortgage loans, consisting primarily of multifamily (33%), office
(28%) and retail (23%) properties, with significant concentrations
in California (17%), Maryland (15%) and Florida (11%). No loans
are delinquent or specially serviced, and there have been no
realized losses.

Midland Loan Services, Inc. (Midland) provided year-end (YE) 2002
financials for 96% of the pool. According to the information
provided, the pool's weighted average debt service coverage ratio
(WADSCR) increased to 1.62 times from 1.56x at issuance (for the
same loans). Eleven loans (10%) are secured by hotels. The YE 2002
WADSCR for the hotels remains rather strong, at 1.76x, although it
was down from 1.84x at issuance. Also, two loans (0.8%) reported
YE 2002 DSCR below 1.00x.

Thirty-five loans (24%) are currently on Midland's watchlist,
primarily due to the decline in occupancy and/or DSCR. The largest
of these loans (2.5%) is secured by an office property in the
Baltimore central business district. The property's performance
declined after one of the major tenants had vacated. However,
recently, a new 10-year lease has been signed which will increase
occupancy to 85%.

Fitch identified several loans of concern and applied various
stress scenarios. Even under these stress scenarios, subordination
levels remain sufficient to upgrade class B and affirm the
remaining classes. Fitch will continue to monitor this
transaction, as surveillance is ongoing.


J/Z CBO: Fitch Downgrades Ratings on Class C & D Notes to BB/CC
---------------------------------------------------------------
Fitch Ratings affirms two classes of notes and downgrades two
classes of notes issued by J/Z CBO (Delaware), LLC (J/Z CBO). The
following rating actions are effective immediately:

-- $105,988,060 class A floating-rate notes affirmed at 'AAA';

-- $21,775,000 class B fixed-rate notes affirmed at 'A';

-- $19,400,000 class C fixed-rate notes downgraded to 'BB' from
    'BBB';

-- $19,400,000 class D fixed-rate notes downgraded to 'CC' from
    'BB'.

J/Z CBO is a collateralized bond obligation (CBO) managed by
Jordan/Zalaznick Advisors, Inc. (Jordan/Zalaznick) consisting
primarily of mezzanine debt and high yield bonds. Jordan/Zalaznick
was established in August 1986 to invest in mezzanine debt and
related equity securities. Due to the increased levels of defaults
and deteriorating credit quality of a portion of portfolio assets,
Fitch has reviewed in detail the portfolio performance of J/Z CBO.
In conjunction with this review, Fitch discussed the current state
of the portfolio with the asset manager and their portfolio
management strategy going forward.

Since June 2002, J/Z CBO has continuously failed its interest
coverage test. The current IC ratio as calculated on the most
recent trustee report dated June 16, 2003 is 42.35% with a trigger
of 142%. The IC ratio is calculated by dividing the total
collateral interest proceeds, excluding excess CCC collateral
interest proceeds, senior expenses and senior collateral
management fees by the class A hedge amount and accrued interest
on the class B, class C and class D notes. In addition, J/Z has
been failing its class A overcollateralization test since
September 2002. On the last two payment dates in November 2002 and
May 2003, a portion of the class A notes were redeemed due to the
failure of the class A OC and IC tests. This principal paydown was
not sufficient to cure the test failures. It is expected that the
class C and class D notes will continue to defer current interest
payments and excess interest will continue to be used to pay down
the class A notes. Although the redemption of the class A notes is
beneficial to the senior noteholders, the extended period of
deferring interest at rates of 10.09% and 14.59% for the class C
and class D notes respectively, impairs the ability of the
structure to repay principal and deferred and compensating
interest on the notes at maturity. Additionally, the redemption of
the floating rate class A notes, in conjunction with the low
interest rate environment, causes a gap in the notional balance of
the assets being hedged, as well as the strike rate relative to
current LIBOR rates.

The current J/Z CBO portfolio is failing its CCC+ and below
limitation of 10% and its single issuer limitation. As of June 16,
2003, defaulted assets including paid in kind collateral totaled
$65.8 million representing 31% of the total collateral debt
securities including cash. At this time, J/Z CBO has 16% of its
total collateral debt securities in cash or cash equivalents.
Jordan/Zalaznick has two years until the end of the revolving
period, to deploy this cash before it will be used to paydown the
liabilities. After discussing the portfolio with Jordan/Zalaznick,
Fitch believes that the collateral manager is making efforts to
improve the credit quality and the yield of the portfolio.

Fitch conducted cash flow modeling utilizing various default
timing and interest rate scenarios to measure the breakeven
default rates the structure can withstand going forward relative
to the minimum cumulative default rates for the rated liabilities.
As a result of this analysis, Fitch has determined that the
original ratings assigned to the class C and class D notes no
longer reflect the current risk to noteholders.

Fitch will continue to monitor and review this transaction for
future rating adjustments.


KINGSWAY FIN'L: Recently Closed Public Offering Raises $101.8MM
---------------------------------------------------------------
Kingsway Financial Services Inc. (TSX:KFS, NYSE:KFS) announced
that it has completed its previously announced public offering.
6,100,000 common shares were issued at Cdn$16.70 per share from
treasury on a bought deal basis to a syndicate of underwriters led
by Scotia Capital Inc. for total gross proceeds of $101,870,000.

The underwriters of the offering were Scotia Capital Inc., CIBC
World Markets Inc., BMO Nesbitt Burns Inc., RBC Dominion
Securities Inc., Sprott Securities Inc., Desjardins Securities
Inc., Griffiths McBurney & Partners and HSBC Securities (Canada)
Inc.

The net proceeds from this offering will be used for general
corporate purposes.

Kingsway's primary business is the insuring of automobile risks
for drivers who do not meet the criteria for coverage by standard
automobile insurers and trucking insurance. The Company currently
operates through nine wholly-owned insurance subsidiaries in
Canada and the U.S. Canadian subsidiaries include Kingsway General
Insurance Company, York Fire & Casualty Insurance Company and
Jevco Insurance Company. U.S. subsidiaries include Universal
Casualty Company, American Service Insurance Company, Southern
United Fire Insurance Company, Lincoln General Insurance Company,
U.S. Security Insurance Company, American Country Insurance
Company and Avalon Risk Management, Inc. The Company also operates
reinsurance subsidiaries in Barbados and Bermuda. Kingsway
Financial, Lincoln General Insurance Company, Universal Casualty
Insurance Company, Kingsway General, York Fire, Jevco and Kingsway
Reinsurance (Bermuda) are all rated "A-" Excellent by A.M. Best.
The Company's senior debt is rated 'BBB' (investment grade) by
Standard and Poor's and by Dominion Bond Rating Services. The
common shares of Kingsway Financial Services Inc. are listed on
the Toronto Stock Exchange and the New York Stock Exchange, under
the trading symbol "KFS".

                          *   *   *

As previously reported in the Troubled Company Reporter's Sept.
16, 2002, edition, Standard & Poor's Ratings Services assigned its
triple-'B' rating to Kingsway Financial Services's Canadian senior
debt issue of approximately C$100 million.

Standard & Poor's also assigned its double-'B'-plus preferred
stock rating to Kingsway Financial Capital Trust I's trust
preferred securities of up to US$75 million.

In addition, Standard & Poor's affirmed its triple-'B'
counterparty credit rating on KFS. The outlook is stable.


KRAMONT REALTY: Fitch Revises BB Pref. Rating Outlook to Stable
---------------------------------------------------------------
Fitch Ratings has affirmed the 'BB-' rating on the 9.75% series B-
1 convertible preferred stock and the 9.5% series D Perpetual
Preferred Stock issued by Kramont Realty Trust (NYSE: KRT). The
Rating Outlook has been revised to Stable from Negative.

Fitch's Outlook revision follows a series of positive developments
that have taken place since the assignment of the Negative Outlook
in January 2002, including KRT's recent closing of a $190 million
mortgage financing, a $125 million senior secured credit facility
refinancing, $61 million (net proceeds) in common stock issuance
and the formation of the company's first joint venture, all of
which have broadened KRT's sources of capital. Earnings stability
of the portfolio has also improved with the signing of good-
quality tenants, such as Wal-Mart, Kohl's and Redner's
Supermarket, offsetting occupancy lost through store closings and
lease rejections by Kmart, Ames and Cub Foods.

As a result of these financing activities, leverage has improved
from January 2002 levels to 70% of undepreciated book
capitalization on a debt-plus-preferred basis from 76% previously.
Moreover, net operating income (NOI) contributed from unencumbered
properties has risen from a near-zero level to offer a partial
offset to preferred dividend distributions, although, going
forward, a portion of this unencumbered NOI may be traded away
through dispositions of non-core assets. Due to the roughly $3.3
million in annual interest savings from the mortgage financing,
fixed charge coverage is also expected to rise to a pro forma 1.8
times (adjusted for straight-line rents, capital expenditures and
preferred dividends) from 1.5x in 2001.

Despite the considerable improvement in financial flexibility,
including the lengthening of debt maturities, funding requirements
on committed projects will continue to stress KRT's access to
capital. Upcoming capital expenditures related to two new
development projects, nine ongoing redevelopment properties and
regularly scheduled lease rollovers will be only partially covered
by near-term funds from operations. Other expected funding
sources, which include cash balances on hand of $9 million,
property-level construction financing and additional draws on the
$26 million in remaining credit line availability (subject to a
$65 million borrowing base limitation), stand barely adequate to
cover the remainder of funding needs. Furthermore, until this new
development and repositioning activity can yield positive NOI
results, increased interest carry will weigh down coverage ratios.

Fitch regards KRT's growth strategy, which targets the
repositioning of poorly performing assets in well-located markets,
as fundamentally more stable and less capital-intensive than the
pure ground-up development model pursued by many of the company's
peers. Nonetheless, KRT's small capitalization and substantially
encumbered asset base, both of which significantly constrain its
access to capital, underscore the need for a very careful
monitoring of the firm's financial flexibility. Ratings are
expected to remain at their current level until KRT can
demonstrate either an increase in its pool of unencumbered assets
or a further reduced debt load on the properties that remain
encumbered.

Headquartered in Plymouth Meeting, PA, Kramont is an $800 million
(undepreciated book capitalization) owner, manager, developer and
redeveloper of neighborhood and community shopping centers located
primarily in the Mid-Atlantic, Northeast and Southeast regions.
The largest market concentrations on an NOI basis include
Philadelphia (26%), Allentown-Bethlehem, Pennsylvania (13%), New
York City (9%) and Atlanta (7%). As of March 31, 2003, KRT's
portfolio consisted of 80 shopping centers, two office properties
and an additional five centers operated on a third-party
management basis, representing a total of 11.5 million square
feet.


LOUDEYE: Appeals Nasdaq Delisting Decision & Requests Hearing
-------------------------------------------------------------
Loudeye Corp. (Nasdaq: LOUD), a leading provider of services for
the management, promotion and distribution of digital media, has
requested a hearing to appeal a Nasdaq Staff Determination that
the Company no longer complies with the $1.00 minimum bid price
requirement for continued listing, and that the Company's common
stock is, therefore, subject to delisting from the Nasdaq SmallCap
Market, pursuant to Nasdaq Marketplace Rule 4310(c)(4).

The Company received a letter from Nasdaq dated June 27, 2003
indicating that the Company's common stock would be delisted
pursuant to Nasdaq Marketplace Rule 4310(c)(4) unless the Company
requested a hearing by July 7, 2003.  Today, Loudeye formally
requested an oral hearing before a Nasdaq Listing Qualifications
Panel to review the Staff's determination. The request
automatically stays the delisting of Loudeye's common stock
pursuant to Nasdaq Marketplace Rule 4800 Series. Until the Panel's
ultimate determination, Loudeye's common stock will not be
delisted and will continue to be traded on the Nasdaq SmallCap
Market under its current ticker symbol LOUD. Hearings with the
Panel typically occur within thirty to forty-five days of a
company's request.

If, during the appeal process, Loudeye's common stock complies in
full with the minimum bid price requirement, and continues to meet
all other listing requirements, Loudeye could regain full
compliance to remain listed on the Nasdaq SmallCap Market without
requiring further actions or proceedings with the appeal hearing.

The Company intends to present a comprehensive plan to the Nasdaq
Listing Qualifications Panel for achieving compliance with the
Nasdaq Marketplace Rules, but there can be no assurance that the
Panel will grant the Company's request for continued listing.

If the appeal is denied, the Company's common stock will be
delisted from the Nasdaq SmallCap Market. In such event, the
Company's common stock will trade on the OTC Bulletin Board's
electronic quotation system, or another quotation system or
exchange on which the shares of the Company may qualify. There can
be no assurance that the Company's application to trade its shares
in such a manner will be accepted.

Loudeye provides the business infrastructure and services for
managing, promoting and distributing digital content for the
entertainment and corporate markets.  For more information, visit
http://www.loudeye.com

As reported in Troubled Company Reporter's April 16, 2003 edition,
the company's independent auditors issued in connection with the
company's audited financial statements for the year ended December
31, 2002 contains a statement expressing substantial doubt
regarding the company's ability to continue as a going concern.
While the company took a number of steps in 2002 to reduce its
operating expenditures and conserve cash, the company has suffered
recurring losses and negative cash flows, and has an accumulated
deficit. The company is currently pursuing efforts to increase
revenue, reduce expenses and conserve cash in the near future,
however can provide no assurances that these efforts will be
successful.


MORTGAGE ASSET: 3 Private Debt Offers Rated at Low-B Levels
-----------------------------------------------------------
Mortgage Asset Securitization Transactions, Inc. mortgage pass-
through certificates, series 2003-6, MASTR Asset Securitization
Trust 2003-6 classes 1-A-1, 2-A-1, 3-A-1 through 3-A-5, 4-A-1, 5-
A-1, 6-A-1 through 6-A-9, 7-A-1, 8-A-1, 9-A-1 through 9-A-7, PO,
PP-A-X, 15-A-X, 30-A-X, and A-R (senior certificates) ($1,402.8
million) are rated 'AAA' by Fitch Ratings. In addition, Fitch
rates the $853,000 class 15-B-2 certificates 'A', $285,000
privately offered class 15-B-5 certificates 'B', $4.3 million
class 30-B-2 certificates 'A', $1.3 million privately offered
class 30-B-4 certificates 'BB' and $1.3 million privately offered
class 30-B-5 certificates 'B'.

The 'AAA' rating on the 1-A-1, 2-A-1, 5-A-1, 6-A-1 through 6-A-9,
7-A-1, 8-A-1, 9-A-1 through 9-A-7, PO, PP-A-X, 15-A-X, 30-A-X, and
A-R senior certificates reflects the 2.85% subordination provided
by the 1.45% class 30-B-1, 0.50% class 30-B-2, 0.40% class 30-B-3,
0.15% privately offered class 30-B-4, 0.15% privately offered
class 30-B-5 and 0.20% privately offered class 30-B-6
certificates. The 'AAA' rating on the 3-A-1 through 3-A-5 and 4-A-
1, senior certificates reflects the 1.25% subordination provided
by the 0.65% class 15-B-1, 0.15% class 15-B-2, 0.20% class 15-B-3,
0.10% privately offered class 15-B-4, 0.05% privately offered
class 15-B-5 and 0.10% privately offered class 15-B-6
certificates. Classes 15-B-2, 15-B-5, 30-B-2, 30-B-4 and 30-B-5
are rated by Fitch based on their respective subordination.

Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults as well as bankruptcy, fraud and
special hazard losses in limited amounts. In addition, the ratings
also reflect the quality of the underlying mortgage collateral,
strength of the legal and financial structures and the master
servicing capabilities of Wells Fargo Bank Minnesota, N.A., rated
'RMS1 by Fitch.

The mortgage loans have been divided into nine groups. The class
1, 2, 5, 6, 7, 8 and 9 senior certificates represent an ownership
interest in the Group 1, 2, 5, 6, 7, 8 and 9 mortgage loans,
respectively. The related subordinate certificates (30-B) are
cross-collateralized and represent an ownership interest in the
mortgage loans of groups 1, 2, and 5 through 9 in the aggregate.
The class 3 and 4 senior certificates represent an ownership
interest in the Group 3 and 4 mortgage loans, respectively. The
related subordinate certificates (15-B) are cross-collateralized
and represent an ownership interest in the mortgage loans of
groups 3 and 4 in the aggregate.

Loan Groups 1, 2 and 5 through 9 in the aggregate ($865,531,602)
consist of conventional, fully amortizing, mostly 30-year fixed-
rate, mortgage loans secured by first liens on one- to four-family
residential properties. As of the cut-off date (June 1, 2003), the
mortgage pool demonstrates a weighted average original loan-to-
value ratio (OLTV) of 66.82%. Approximately 35.90% of the loans
were originated under a reduced (non Full/Alternative)
documentation program. Cash-out and rate/term refinance loans
represent 22.41% and 56.54% of the mortgage pool, respectively.
Second homes account for 1.91% of the pool. The average loan
balance is $475,256. The weighted average FICO score is 737. The
three states that represent the largest portion of the mortgage
loans are California (52.75%), New Jersey (8.12%), and New York
(5.27%).

Loan Groups 3 and 4 in the aggregate ($569,069,170) consist of
conventional, fully amortizing, mostly 15-year fixed-rate,
mortgage loans secured by first liens on one- to four-family
residential properties. As of the cut-off date (June 1, 2003), the
mortgage pool demonstrates a weighted average OLTV of 57.29%.
Approximately 35.93% of the loans were originated under a reduced
(non Full/Alternative) documentation program. Cash-out and
rate/term refinance loans represent 24.18% and 68.17% of the
mortgage pool, respectively. Second homes account for 5.68% of the
pool. The average loan balance is $504,548. The weighted average
FICO score is 738. The three states that represent the largest
portion of the mortgage loans are California (38.84%), New Jersey
(12.16%), and Florida (6.24%).

None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws.

MASTR, a special purpose corporation, deposited the loans into the
trust, which issued the certificates. Wachovia Bank, National
Association will act as trustee. For federal income tax purposes,
elections will be made to treat the trust fund as three real
estate mortgage investment conduits.


MORGAN STANLEY: S&P Cuts Ratings on Classes G & H to B & CCC
------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on four
classes of Morgan Stanley Capital I Inc.'s commercial mortgage
pass-through certificates series 1997-XL1. Additionally, ratings
are lowered on two classes from the same transaction. At the same
time, the ratings on three other classes are affirmed.

The raised ratings reflect increased credit enhancement since
issuance due to the paydown in the mortgage pool balance as well
as the defeasance of the three largest loans in the mortgage pool.
This transaction initially consisted of 12 fixed-rate loans. Two
loans, totaling $113.5 million, have paid off. As a result of
these payoffs and the amortization of eight of the 10 loans
remaining in the trust, the mortgage pool balance has been reduced
by 21% since issuance. Additionally, the largest loan in the pool
(known as the 605 Third Avenue loan), with an outstanding loan
amount of $120 million, was fully defeased in 2002. The second-
largest loan (known as the Edens & Avant loan), with an
outstanding loan balance of $82.75 million, was fully defeased
July 1, 2003. Eight of the 15 properties in the Ashford Financial
Pool loan, which GMAC Commercial Mortgage Corp. (the
servicer/ABOVE AVERAGE ranking) has placed on its watchlist, have
been defeased at 125% of their allocated loan amounts. Therefore,
40% of the total mortgage pool balance has been defeased.

The lowered ratings on classes G and H reflect the deterioration
in the operating performance of four of the seven remaining, non-
defeased loans, representing 25% of the outstanding pool balance.

The four loans whose collateral has experienced a decline in value
since issuance include:

      -- Grand Kempinski Hotel (now known as the Hotel Inter-
         Continental Dallas) is the seventh-largest loan in the
         pool, with a $50.4 million loan balance, and is on the
         servicer's watchlist. The loan is secured by a
         528-room luxury hotel located in Addison, Texas. Net cash
         flow (NCF) for this property has declined by 25% for the
         12 months ending Dec. 31, 2002 from its level at issuance
         in October 1997. As a result, Standard & Poor's estimates
         the value has declined by 13% since issuance. Standard &
         Poor's recently visited the hotel and found this sub-
         market to be over-supplied in terms of hotel product, and
         doubts that this sub-market north of Dallas will return to
         equilibrium before 2005. Indeed, the downward trend has
         continued, as revenue per available room (RevPar) for the
         hotel for the first four months of 2003 is down by 34%
         compared to last year;

      -- Mark Centers Pool is also on the servicer's watchlist and
         is the eighth-largest loan in the pool, with a loan
         balance of $41.4 million. The loan is secured by 17
         community and neighborhood retail centers totaling 2.3
         million square feet (sq. ft.) located in seven eastern
         etates. Three of the centers are currently anchored by
         Kmart Corp. and four were previously anchored by Ames
         Department Stores Inc. The servicer has indicated that
         these three Kmart stores should remain in place. The four
         Ames stores had represented 11% of the gross leaseable
         area in the portfolio. Only one of these four vacated
         store spaces has been re-leased. NCF decreased by 18% for
         the 12 months ending Dec. 31, 2002 from its level at
         issuance; and occupancy for the portfolio as a whole has
         declined to 79% as of Feb. 28, 2003 from 98% as of
         Dec. 31, 2002. The resultant decline in value is 7%;

      -- Westgate Mall is the ninth-largest loan in the pool with a
         loan balance of $39.2 million, and is currently being
         specially serviced by GE Capital Realty Group Inc. The
         mall contains 789,222 total sq. ft., 617,222 sq. ft. of
         which serves as collateral for the loan, located in
         Fairview Park, Ohio. NCF for the mall has declined by 40%
         for the 12 months ending Dec. 31, 2002 from its level at
         issuance. It is estimated that the value has declined by
         32% since issuance. Standard & Poor's recently visited the
         property and found it to be inferior to surrounding
         competition in terms of physical condition and layout,
         location, and tenancy. Management is looking to re-
         position the property; and

      -- Westshore Mall is the 10th-largest loan in the pool with a
         loan balance of $19.6 million. It is secured by 393,949
         sq. ft. of a 473,619-sq.-ft. mall located in Holland,
         Michigan. NCF for the mall has declined by 7% for the 12
         months ending Dec. 31, 2002 from its level at issuance.

The overall operating performance of the mortgage pool has
improved since issuance. The servicer provided year-end 2002 NCF
data for six loans and year-end 2001 NCF data for the Mansion
Grove Apartments loan. Using these results, the weighted average
debt service coverage ratio on a NCF basis for the remaining non-
defeased loan balance increased to 1.60x from 1.53x at issuance.

                         RATINGS RAISED

                  Morgan Stanley Capital I Inc.
         Commercial mortgage pass-thru certs series 1997-XL1

                     Rating
         Class     To        From     Credit Support
         B         AAA       AA+               34.2%
         C         AAA       AA                30.4%
         D         AA        A                 22.8%
         E         A         BBB               15.2%

                        RATINGS LOWERED

                 Morgan Stanley Capital I Inc.
         Commercial mortgage pass-thru certs series 1997-XL1

                     Rating
         Class     To        From     Credit Support
         G         B         BB                 3.8%
         H         CCC       B                  0.0%

                        RATINGS AFFIRMED

                 Morgan Stanley Capital I Inc.
         Commercial mortgage pass-thru certs series 1997-XL1

         Class     Rating      Credit Support
         A-1       AAA                 38.0%
         A-2       AAA                 38.0%
         A-3       AAA                 38.0%


MORTGAGE ASSET: Fitch Rates 3 Series 2003-6 Classes with Low-Bs
---------------------------------------------------------------
Mortgage Asset Securitization Transactions, Inc. mortgage pass-
through certificates, series 2003-6, MASTR Asset Securitization
Trust 2003-6 classes 1-A-1, 2-A-1, 3-A-1 through 3-A-5, 4-A-1, 5-
A-1, 6-A-1 through 6-A-9, 7-A-1, 8-A-1, 9-A-1 through 9-A-7, PO,
PP-A-X, 15-A-X, 30-A-X, and A-R (senior certificates) ($1,402.8
million) are rated 'AAA' by Fitch Ratings. In addition, Fitch
rates the $853,000 class 15-B-2 certificates 'A', $285,000
privately offered class 15-B-5 certificates 'B', $4.3 million
class 30-B-2 certificates 'A', $1.3 million privately offered
class 30-B-4 certificates 'BB' and $1.3 million privately offered
class 30-B-5 certificates 'B'.

The 'AAA' rating on the 1-A-1, 2-A-1, 5-A-1, 6-A-1 through 6-A-9,
7-A-1, 8-A-1, 9-A-1 through 9-A-7, PO, PP-A-X, 15-A-X, 30-A-X, and
A-R senior certificates reflects the 2.85% subordination provided
by the 1.45% class 30-B-1, 0.50% class 30-B-2, 0.40% class 30-B-3,
0.15% privately offered class 30-B-4, 0.15% privately offered
class 30-B-5 and 0.20% privately offered class 30-B-6
certificates. The 'AAA' rating on the 3-A-1 through 3-A-5 and 4-A-
1, senior certificates reflects the 1.25% subordination provided
by the 0.65% class 15-B-1, 0.15% class 15-B-2, 0.20% class 15-B-3,
0.10% privately offered class 15-B-4, 0.05% privately offered
class 15-B-5 and 0.10% privately offered class 15-B-6
certificates. Classes 15-B-2, 15-B-5, 30-B-2, 30-B-4 and 30-B-5
are rated by Fitch based on their respective subordination.

Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults as well as bankruptcy, fraud and
special hazard losses in limited amounts. In addition, the ratings
also reflect the quality of the underlying mortgage collateral,
strength of the legal and financial structures and the master
servicing capabilities of Wells Fargo Bank Minnesota, N.A., rated
'RMS1 by Fitch.

The mortgage loans have been divided into nine groups. The class
1, 2, 5, 6, 7, 8 and 9 senior certificates represent an ownership
interest in the Group 1, 2, 5, 6, 7, 8 and 9 mortgage loans,
respectively. The related subordinate certificates (30-B) are
cross-collateralized and represent an ownership interest in the
mortgage loans of groups 1, 2, and 5 through 9 in the aggregate.
The class 3 and 4 senior certificates represent an ownership
interest in the Group 3 and 4 mortgage loans, respectively. The
related subordinate certificates (15-B) are cross-collateralized
and represent an ownership interest in the mortgage loans of
groups 3 and 4 in the aggregate.

Loan Groups 1, 2 and 5 through 9 in the aggregate ($865,531,602)
consist of conventional, fully amortizing, mostly 30-year fixed-
rate, mortgage loans secured by first liens on one- to four-family
residential properties. As of the cut-off date (June 1, 2003), the
mortgage pool demonstrates a weighted average original loan-to-
value ratio of 66.82%. Approximately 35.90% of the loans were
originated under a reduced (non Full/Alternative) documentation
program. Cash-out and rate/term refinance loans represent 22.41%
and 56.54% of the mortgage pool, respectively. Second homes
account for 1.91% of the pool. The average loan balance is
$475,256. The weighted average FICO score is 737. The three states
that represent the largest portion of the mortgage loans are
California (52.75%), New Jersey (8.12%), and New York (5.27%).

Loan Groups 3 and 4 in the aggregate ($569,069,170) consist of
conventional, fully amortizing, mostly 15-year fixed-rate,
mortgage loans secured by first liens on one- to four-family
residential properties. As of the cut-off date (June 1, 2003), the
mortgage pool demonstrates a weighted average OLTV of 57.29%.
Approximately 35.93% of the loans were originated under a reduced
(non Full/Alternative) documentation program. Cash-out and
rate/term refinance loans represent 24.18% and 68.17% of the
mortgage pool, respectively. Second homes account for 5.68% of the
pool. The average loan balance is $504,548. The weighted average
FICO score is 738. The three states that represent the largest
portion of the mortgage loans are California (38.84%), New Jersey
(12.16%), and Florida (6.24%).

None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws.

MASTR, a special purpose corporation, deposited the loans into the
trust, which issued the certificates. Wachovia Bank, National
Association will act as trustee. For federal income tax purposes,
elections will be made to treat the trust fund as three real
estate mortgage investment conduits.


MEDIX: Ex-Auditors Ehrhardt Keefe Doubt Ability to Continue Ops.
----------------------------------------------------------------
On June 20, 2003, upon recommendation and approval of the
Company's Audit Committee, Medix Resources, Inc. dismissed
Ehrhardt Keefe Steiner & Hottman, PC and engaged BDO Seidman, LLP
as the Company's independent auditors for the fiscal year ending
December 31, 2003.

Ehrhardt Keefe Steiner & Hottman's reports of the Company's
consolidated financial statements for each of the years ended
December 31, 2002 and 2001 contained an explanatory paragraph as
to the Company's ability to continue as a going concern.

During the years ended December 31, 2002 and 2001 the Company was
advised by its independent auditors of certain reportable
conditions which related to controls over documentation for
certain of the Company's equity transactions and accounting for
certain exit costs associated with office closings.  In the
opinion of management these reportable conditions were largely
impacted by the Company closing its Colorado office and moving all
accounting records from Colorado to New York City, in addition to
significant changes in responsible accounting personnel during the
period.  The Company indicates that it has taken corrective
measures to alleviate such conditions in its internal control by
hiring new personnel and organizing the accounting records in its
New York City office.


MITEC TELECOM: Names Jean Marc Roberge as New VP - Global Ops.
--------------------------------------------------------------
Mitec Telecom Inc. (TSX: MTM), a leading designer and provider of
wireless network products for the telecommunications industry,
announced the appointment of Mr. Jean Marc Roberge to the position
of Vice President, Global Operations and Supply Chain Management.

Mr. Roberge brings to Mitec over 17 years of in-depth operations
experience with Sanmina-SCI and Nortel Networks, for whom he held
a variety of leadership positions.

"I am delighted to welcome Mr. Roberge to our management team,"
said Rajiv Pancholy, Mitec's President and Chief Executive
Officer. "His appointment brings us a wealth of industry
expertise, and fills an important new position at Mitec. Over the
past year we have concentrated on consolidating and streamlining
our operations around the world, and we are now able to address
the needs of our global client base with a seamless operational
and supply chain structure."

Mitec Telecom is a leading designer and provider of wireless
network products for the telecommunications industry. The Company
sells its products worldwide to network providers for
incorporation into  high-performing wireless networks used in
voice and data/Internet communications. Additionally, the Company
provides value-added services from design to final assembly and
maintains test facilities covering a range from DC to 60 GHz.
Headquartered in Montreal, Canada, the Company also operates
facilities in the United States, Sweden, the United Kingdom, China
and Thailand.

Mitec Telecom Inc. is listed on the Toronto Stock Exchange under
the symbol MTM. On-line information about Mitec is available at
http://mitectelecom.com.

The Company's January 31, 2003 balance sheet shows a working
capital deficit of about C$17 million, while total shareholders'
equity is down to $26 million from about $48 million recorded at
April 30, 2002.


NASH FINCH: Fitch Affirms & Removes Low-Bs from Watch Negative
--------------------------------------------------------------
Fitch Ratings has removed Nash Finch from Rating Watch Negative
following the company's filing of its financial statements for the
third and fourth quarter of FY 2002. The senior secured bank
credit facility rating of 'B+' and the subordinated notes rating
of 'B-' are affirmed by Fitch. The Rating Outlook is Negative.
Approximately $380 million of debt is affected.

The ratings were initially placed on Rating Watch Negative on
November 11, 2002 following the company's announcement that it was
under an informal inquiry by the SEC for practices related to
Count-Recount (an industry practice related to vendor allowances)
and was postponing the release of its third quarter earnings.
Subsequently, the company delayed filing financial statements for
the third and fourth quarters of fiscal 2002. The dispute as to
how to account for the count-recount issue has now been resolved
and the SEC's Office of the Chief Accountant has approved of the
company's accounting for this issue at this time which allowed the
company to file its delinquent financial statements in May of
2003. However, the SEC investigation is still open.

The ratings reflect the company's highly competitive operating
environment and the low margined nature of its food wholesale and
retail businesses. In addition, the food wholesale industry is
currently undergoing a dramatic consolidation given that the
number one operator in the industry (Fleming) has recently filed
Chapter 11 and the bulk of its operations are being sold. Also,
many of the company's wholesale customers, the independent
supermarkets and regional chains, are facing consolidation. The
Negative Outlook reflects NAFC's weak sales trends in its retail
business (which represents 27% of FY 2002 revenues) and is
currently experiencing negative 11% comparable store sales for the
last two quarters as well as the likelihood of more competition.
Offsetting these negatives is the company's stable credit profile
and its ability to grow its business as the dynamics of the
industry change as well as its select opportunities to build its
business through niche offerings such as its Avanza stores (a
Hispanic grocery store format).

Nash Finch's financial profile has remained relatively steady over
the past year despite the intense competition - which bodes well
for its ability to compete against larger, geographically
diversified supermarkets as well as alternative formats such as
Wal-Mart and Target. EBITDAR/total interest plus rents for FY 2002
was 2.7 times vs. 2.4x for FY 2001. Similarly total adjusted
debt/EBITDAR was 4.3x vs. 4.1x for FY 2001. Going forward,
opportunities to expand its business may in fact pressure balance
sheet leverage and the assigned ratings do not afford the company
much flexibility to increase debt unless offset by a commensurate
increase in profitability.

Nash Finch is a food wholesale company supplying products to
independent supermarkets and military bases in approximately 30
states. The company owns and operates approximately 111 retail
supermarkets throughout the Midwest.


NEVADA STAR: Commences Permitting Process for Gold Hill Project
---------------------------------------------------------------
Nevada Star Resource Corp. announces that Round Mountain Gold
Corp., a 50:50 joint venture between Kinross Gold Corporation and
Barrick Gold Corporation, is starting the permitting process for a
proposed mine at the Company's Gold Hill project, Nevada. RMGC
General Manager Mike Doyle, quoted in the Elko Daily Free Press,
said that drilling continues to define the gold deposit and will
continue until fall. RMGC is filing a plan of operations for an
open pit mine at Gold Hill with the U.S. Bureau of Land
Management.

RMGC can earn a 100% interest in the Gold Hill property from
Nevada Star subject to a 1% to 2% NSR, depending on the price of
gold, capped at US$10 million per the agreement between the
Company and RMGC on May 2, 2000. RMGC has made its 2003 advance
royalty payment of US$50,000 to the Company.

The Gold Hill property is four miles north of the main Round
Mountain open pit mine. Round Mountain produced 755,493 ounces of
gold at an average cash cost of $187 per ounce in 2002, and is
expected to produce 660,000 ounces of gold in 2003 at an estimated
cash cost of $210 per ounce. Kinross has reported that its share
of production for the first two months of 2003 was 64,034 ounces
at a cash cost of $192.

The Company is pleased to see this progress towards a production
decision at Gold Hill, from which it has the opportunity to
receive significant cash flow.

The reader is referred to the Barrick ( http://www.barrick.com)
or Kinross ( http://www.kinross.com) web pages for more
information on Round Mountain and Gold Hill.

                         *   *   *

As reported in the Troubled Company Reporter's January 2, 2003
edition, the Company has a history of losses and no revenues from
operations but is making preparations for a significant
exploration campaign on its MAN Ni-Cu-PGE property in Alaska.
This program will include geological, geochemical and geophysical
surveys, followed by diamond drilling. Final budgeting for this
proposed program has not yet been completed.

The Company does not currently have sufficient funds to satisfy
cash demands for operations for the next 12 months, including
general and administrative costs and the proposed exploration
program. The Company is examining two options. One would be to
option all or a part of the MAN project to a major mining company
who would then finance the required exploration. To that end, the
Company is in discussion with a number of companies.
Alternatively, the Company is examining the feasibility of making
an offshore private placement of its common stock to certain
Canadian investors under a Regulation S exemption from
registration under the Securities Act or to certain accredited
investors in the United States pursuant to Rule 506 of Regulation
D of the Securities Act. There can be no assurance that the
Company will successfully complete this offering.

Smythe Ratcliffe, Chartered Accountants of Vancouver, British
Columbia added "COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA-
US REPORTING DIFFERENCES" to it auditors report concerning
Nevada Star Resource Corporation, dated December 5, 2002.  "In the
United States, reporting standards for auditors require the
addition of an explanatory paragraph, following the opinion
paragraph, when the financial statements are affected by
conditions and events that cast substantial doubt on the Company's
ability to continue as a going concern, such as those described in
note 2 to the consolidated financial statements. Our report to the
shareholders dated December 5, 2002 is expressed in accordance
with Canadian reporting standards which do not permit a reference
to such events and conditions in the auditors' report when these
are adequately disclosed in the financial statements."


NEXTEL COMMS: Will Host Q2 Earnings Conference Call on July 17
--------------------------------------------------------------
Nextel Communications, Inc. (NASDAQ:NXTL), will host its second-
quarter 2003 financial results conference call with its senior
management.

           When:     Thursday, July 17, 2003

           Time:     8:30AM - 9:15AM Eastern Time

           Phone:    (Domestic)            800-548-9057
                     (International)       801-303-7424

All participants are asked to dial in 10-15 minutes prior to the
start of the conference call. If you are unable to participate, a
rebroadcast of the conference call will be available until
Tuesday, July 22. The rebroadcast numbers are as follows:

           800-839-0860 (domestic)
           402-220-1490 (international)
           passcode 1484 for both

The conference call is also available via a live Webcast on two
sites: http://www.nextel.comand also on
http://www.StreetEvents.com It will be archived on both sites for
1 week following the call.

Nextel Communications, a Fortune 300 company based in Reston, Va.,
is a leading provider of fully integrated wireless communications
services and has built the largest guaranteed all-digital wireless
network in the country covering thousands of communities across
the United States. Nextel and Nextel Partners, Inc. currently
serve 198 of the top 200 U.S. markets. Through recent market
launches, Nextel and Nextel Partners service is available today in
areas of the U.S. where approximately 240 million people live or
work.

                         *     *     *

As reported in the Troubled Company Reporter's March 12, 2003
edition, Fitch Ratings revised the Rating Outlook on Nextel
Communications Inc. to Positive from Stable. The Positive Outlook
applies to Nextel's senior unsecured note rating of 'B+', the
senior secured bank facility of 'BB' and the preferred stock
rating of 'B-'. The Positive Outlook reflects Fitch's view that
favorable financial and operating trends will continue over the
next several quarters based on the positive momentum produced from
the following factors during 2002:

       -- The significant improvement in operating performance
          through strong cost containment, low churn and solid
          ARPUs despite a somewhat unfavorable climate within the
          wireless industry and a weak economic environment.

       -- The reduction in financial risk due to the repurchase
          of $3.2 billion in debt and associated obligations.

       -- A strong competitive position relative to other
          operators due to the unique push-to-talk application
          that allows Nextel to target higher-value and lower
          churn business users.


NORTHWEST AIRLINES: Flies 5.98BB Revenue Passenger Miles in June
----------------------------------------------------------------
Northwest Airlines (Nasdaq: NWAC) announced a systemwide June load
factor of 81.8 percent, 0.3 points above June 2002.  Systemwide,
Northwest flew 5.98 billion revenue passenger miles (RPMs) and
7.31 billion available seat miles (ASMs) in June 2003, a traffic
decrease of 10.2 percent on a 10.5 percent decrease in capacity
versus June 2002.

Northwest Airlines is the world's fourth largest airline with hubs
at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam,
and approximately 1,500 daily departures. With its travel
partners, Northwest serves nearly 750 cities in almost 120
countries on six continents. In 2002, consumers from throughout
the world recognized Northwest's efforts to make travel easier. A
2002 J.D. Power and Associates study ranked airports at Detroit
and Minneapolis/St. Paul, home to Northwest's two largest hubs,
tied for second place among large domestic airports in overall
customer satisfaction. Readers of TTG Asia and TTG China named
Northwest "Best North American airline."

For more information pertaining to Northwest, visit its Web site
at http://www.nwa.com

As reported in Troubled Company Reporter's May 22, 2003 edition,
Fitch Ratings has assigned a rating of 'B' to the $150 million in
convertible senior unsecured notes issued by Northwest Airlines
Corp. The privately-placed notes carry a coupon rate of 6.625% and
mature in 2023. The Rating Outlook for Northwest is Negative.

The 'B' rating reflects continuing concerns over Northwest's
capacity to deliver the substantial improvements in operating cash
flow that will be necessary if the airline is to meet growing cash
financing obligations (interest, scheduled debt and capital lease
payments, rents and required pension plan contributions). In light
of the weak business travel demand environment that clouds
prospects for a quick rebound in industry unit revenue,
Northwest's future liquidity position will be influenced primarily
by the company's success in negotiating labor cost reductions with
its unionized employees. While the dialogue with labor is ongoing,
there are no signs that a substantial reduction in labor costs is
imminent.


NORTHWEST AIRLINES: Flight Attendants Sue for Contract Breach
-------------------------------------------------------------
The Professional Flight Attendants Association filed a lawsuit to
compel Northwest Airlines (Nasdaq:NWAC) to honor the terms of the
current labor contract covering the airline's flight attendants.
The suit was filed in the U.S. District Court for the Central
District of California.

The lawsuit seeks an injunction to force Northwest to permit union
dues to be deducted from flight attendants' paychecks. The lawsuit
also seeks compensation for the amount of dues and service fees
PFAA has been unable to collect since it replaced the Teamsters as
the flight attendants' collective bargaining agent on June 20,
2003.

After that date, Northwest refused to make the required payroll
deductions, pointing to a "poison pill" contract clause designed
to erase this requirement if the Teamsters were ever replaced.

"The goal of this provision was to discourage employees from ever
replacing the Teamsters," said PFAA Interim President Guy Meek.
"That in itself is illegal. The Railway Labor Act and subsequent
case law have clearly established that labor contracts are made
between employees and the employer. The terms of a contract cannot
be changed when employees replace one union with another, as
happened in this case."

Jose Arturo Ibarra noted that PFAA recently reached an agreement
with the Northwest Airlines Federal Credit Union to deduct union
dues from accounts of flight attendants who belong to the credit
union. More than 90 percent of the flight attendants are credit
union members.

"During this difficult period for our industry, Northwest
management and employees should be pulling together to help the
airline and increase passenger satisfaction," Ibarra said.
"Instead, management is alienating flight attendants by trying to
bust the union the flight attendants legally elected. Northwest
flight attendants have shown overwhelming support for PFAA since
the company cut off payroll dues deductions."

"Northwest flight attendants are customer-focused and safety
professionals. We want to assure the public that our differences
with Northwest management will not affect our dedication to
Northwest passengers," said Patti Lutz, PFAA member-at-large.

Northwest Airlines is the world's fourth largest airline with hubs
at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam,
and approximately 1,500 daily departures. With its travel
partners, Northwest serves nearly 750 cities in almost 120
countries on six continents. In 2002, consumers from throughout
the world recognized Northwest's efforts to make travel easier. A
2002 J.D. Power and Associates study ranked airports at Detroit
and Minneapolis/St. Paul, home to Northwest's two largest hubs,
tied for second place among large domestic airports in overall
customer satisfaction. Readers of TTG Asia and TTG China named
Northwest "Best North American airline."

For more information pertaining to Northwest, visit its Web site
at http://www.nwa.com

As reported in Troubled Company Reporter's May 22, 2003 edition,
Fitch Ratings has assigned a rating of 'B' to the $150 million in
convertible senior unsecured notes issued by Northwest Airlines
Corp. The privately-placed notes carry a coupon rate of 6.625% and
mature in 2023. The Rating Outlook for Northwest is Negative.

The 'B' rating reflects continuing concerns over Northwest's
capacity to deliver the substantial improvements in operating cash
flow that will be necessary if the airline is to meet growing cash
financing obligations (interest, scheduled debt and capital lease
payments, rents and required pension plan contributions). In light
of the weak business travel demand environment that clouds
prospects for a quick rebound in industry unit revenue,
Northwest's future liquidity position will be influenced primarily
by the company's success in negotiating labor cost reductions with
its unionized employees. While the dialogue with labor is ongoing,
there are no signs that a substantial reduction in labor costs is
imminent.


ORBITAL SCIENCES: Issuing $135MM Senior Notes in Private Offering
-----------------------------------------------------------------
Orbital Sciences Corporation (NYSE:ORB) has entered into a
purchase agreement for a private offering of $135 million Senior
Notes. Interest on the notes is payable semi-annually at 9% per
annum and the notes will mature in July 2011. Closing of the sale
of the new notes is expected to occur on or about July 10, 2003.
The initial purchasers of the debt intend to reoffer the
securities only to qualified institutional buyers and certain
accredited investors in accordance with Rule 144A of the
Securities Act of 1933, as amended. Orbital will use the net
proceeds of the transaction, together with cash on hand, to
repurchase or redeem all of its outstanding $135 million 12%
second priority notes due 2006.

The securities offered will not be registered under the Securities
Act of 1933, as amended, and may not be offered or sold in the
United States absent registration or an applicable exemption from
registration requirements.

As reported in Troubled Company Reporter's Friday Edition, Fitch
Ratings affirmed Orbital Sciences Corporation's 'B+' senior
secured credit facility rating and 'B' second priority secured
notes rating, and simultaneously withdrew the ratings.


OWENS CORNING: Court Okays $43-Mill. Enron Settlement Agreement
---------------------------------------------------------------
Prior to the Petition Date, Owens Corning and Owens Corning
Fiberglas A.S. Limitada were parties to a number of agreements
with Enron Corp. affiliates.  Generally, these agreements
obligated Enron-related entities to provide energy and related
services to Owens Corning and certain of its affiliates.

Due to concern that a bankruptcy filing was imminent, and based on
statements made by certain Enron employees that Enron Corp., Enron
Energy Services, Enron Energy Services Operations and Enron Energy
Services International Leasing would no longer honor their
obligations under some or all of the parties' agreements, the OC
Parties terminated some or all of the Enron Agreements by notices
sent on December 1, 2001.

Enron Corp. and certain of its affiliates, including Enron
Energy Services and Enron Energy Services Operations, filed
Chapter 11 bankruptcy cases on December 2, 2001 in the United
States Bankruptcy Court for the Southern District of New York.
At the time the Enron Debtors filed for bankruptcy, a number of
issues existed between and among the parties.

The OC Parties, the Enron Parties and the OC Energy LLC have
held certain discussions with respect to these issues and have
entered into a Settlement Agreement.

Consequently, the Debtors sought and obtained Judge Fitzgerald's
approval for their Settlement Agreement with Enron.

The principal terms of the Settlement Agreement are:

   1. The ESA, the Construction Management Agreement, the
      Commodity Management Agreement, the Promotions License
      Agreement, the Facilities and Services Agreement, the
      Consulting Services Agreement, 2001 Master Lease Agreement
      and the Other Agreements are deemed to have been terminated
      as of December 1, 2001.

   2. At Closing, the Master OC Energy LLC Lease Agreement and
      any "lease schedules" will be deemed terminated by mutual
      consent, Owens Corning will be deemed to have timely
      exercised the purchase option set forth in Section 25.3 of
      the Master OC Energy LLC Lease Agreement, and all "units"
      will be transferred by the OC Energy LLC to Owens Corning
      "as is, where is and with all faults" with no
      representations or warranties and free and clear of the
      liens or encumbrances, other than the Excluded Liens, as
      defined in the Settlement Agreement.

   3. At Closing, the DSM Projects Master Lease Agreement and
      any "lease schedules" will be deemed terminated by mutual
      consent, Owens Corning will be deemed to have timely
      exercised the purchase option set forth in Section 25.3 of
      the DSM Projects Master Lease Agreement, and all "units"
      will be transferred by Enron Energy Services Operations to
      Owens Corning "as is, where is and with all faults" with no
      representations or warranties and free and clear of the
      liens or encumbrances described in the Settlement
      Agreement, other than the Excluded Liens.

   4. At Closing, Enron Energy Services International Leasing
      will assign the Brazil Master Lease Agreement and any
      "lease schedules" to Owens Corning and all "units" will be
      transferred by Enron Energy Services International Leasing
      to Owens Corning "as is, where is and with all faults" with
      no representations or warranties and free and clear of the
      liens or encumbrances, other than the Excluded Liens.

   5. In settlement of Owens Corning's and the OC Energy LLC's
      obligations, if any, to the Enron Parties under the
      Transaction Agreements and Owens Corning's obligations, if
      any, to the OC Energy LLC under the Transaction Agreements,
      Owens Corning will, at the Closing, pay to Enron Energy
      Services Operations, Enron Energy Services International
      Leasing and the OC Energy LLC $43,000,000 in cash on
      these terms:

      a. $13,805,312 to the OC Energy LLC; and

      b. $427,505 to Enron Energy Services International Leasing
         and the remainder to Enron Energy Services Operations.

   6. Effective at Closing, the Enron Parties, the OC Parties
      and the OC Energy LLC, on behalf of their affiliates,
      subsidiaries, officers, employees and agents, will release
      each other and every past and present officer, director,
      shareholder, partner, principal, subsidiary, parent
      company, agent, servant, employee, representative and
      attorney of the other from any and all issues, claims,
      demands, causes of action, costs, expenses, suits,
      liabilities, damages, obligations and rights of any kind
      whatsoever, direct or indirect, known or unknown, absolute
      or contingent, at law or in equity or otherwise that any of
      the parties have, had or may in the future have under or
      pursuant to the Transaction Agreements or related to the
      OC Energy LLC.

   7. Effective at Closing, the Projects will be transferred
      to Owens Corning free and clear of all liens, claims and
      encumbrances, other than the Excluded Liens.

   8. Owens Corning will withdraw with prejudice, as of the
      Closing, any claims filed in the Enron Bankruptcy Case
      arising out of the Transaction Agreements.

   9. The Enron Parties will withdraw with prejudice, as of the
      Closing, any proof of claim filed by them or any controlled
      affiliate in the OC Bankruptcy Cases arising out of the
      Transaction Agreements.

  10. The Settlement Agreement provides for the notes issued by
      the OC Energy LLC to Enron Energy Services Operations to be
      deemed satisfied in full, and for the Security Agreement
      dated December 16, 1999 by the OC Energy LLC in Enron
      Energy Services Operations' favor to be terminated and all
      security interests to be released.

  11. At Closing, Owens Corning will assign its interests in the
      OC Energy LLC to Enron Energy Services Operations.

  12. At Closing, the Enron Parties will transfer to Owens
      Corning any natural gas currently stored at Owens Corning's
      natural gas storage facilities.

  13. Closing under the Settlement Agreement is subject to
      certain conditions including:

      a. entry of orders in the OC Bankruptcy Cases and the Enron
         Bankruptcy Cases approving the agreement;

      b. the conveyance of the "units" to Owens Corning free and
         clear of Lessor Liens and any Lien; and

      c. Board of Director approval for the OC Parties and the
         Enron Parties.

  14. The Settlement Agreement requires Closing to occur by
      July 15, 2003.

Under the terms of the Settlement Agreement, the Debtors will make
a $43,000,000 Settlement Payment, $28,767,183 of which will be
paid to Enron Energy Services Operations, $427,505 to Enron Energy
Services International Leasing and $13,805,312 to the OC Energy
LLC.  In exchange, the Debtors will settle, among other things,
all claims with the Enron Parties and the OC Energy LLC regarding
amounts owed on account of commodities purchases, all disputes
regarding ownership or disposition of property subject to the
Master Lease Agreements, and all issues regarding energy-saving
projects under construction. (Owens Corning Bankruptcy News, Issue
No. 54; Bankruptcy Creditors' Service, Inc., 609/392-0900)


PICCADILLY CAFETERIAS: S&P Further Junks Credit Rating to CCC-
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior secured debt ratings on Piccadilly Cafeterias Inc. to
'CCC-' from 'CCC+'. The downgrade is based on the company's
announcement that its Board of Directors has authorized management
to pursue a range of strategic options including bankruptcy.

The outlook is negative. Baton Rouge, Louisiana-based Piccadilly
had $36.5 million of debt outstanding at April 1, 2003.

"Piccadilly has experienced prolonged sales declines as it
struggles to attract a younger segment of the population. The
company's sales also have been negatively affected by a reduction
in shopping mall traffic related to the general economic
downturn," stated Standard & Poor's credit analyst Robert
Lichtenstein. About half of the company's stores are located in
shopping malls.

In the first nine months of fiscal 2003, ended April 1, 2003,
same-store sales fell 4.9% (7% in the third quarter) while traffic
decreased 7.7% (9.9% in the third quarter), following a 4.0%
decline in same-store sales and a 7.0% drop in traffic in fiscal
2002. Operating margins for the 12 months ended April 1, 2003,
fell to about 10%, from 11% the year before, primarily because of
a decline in sales leverage. As a result, liquidity tightened and
cash flow protection measures weakened, with lease-adjusted EBITDA
coverage of interest for the 12 months ended April 1, 2003, of
1.5x, compared with 2x the year before.

Standard & Poor's is concerned that continued weakness could
further pressure liquidity and credit measures. In addition,
covenants currently provide very limited cushion.

Leverage is high, with lease-adjusted total debt to EBITDA of
5.0x, and total debt (including unfunded pension and post-
retirement liabilities) to EBITDA approaching 7x.

Liquidity is limited to $2 million in cash and $6 million of
availability on a $20 million revolving credit facility as of
April 1, 2003.

Capital expenditures for the remainder of fiscal 2003 are expected
to be about $1 million. Standard & Poor's believes the company
will be challenged to service its debt and fund its capital
expenditures through operating cash flow, availability under its
revolving credit facility, and asset sales.

Management faces significant challenges in reversing negative
sales and traffic trends at its restaurants. If the outcome of any
restructuring is detrimental to bondholders, the ratings could be
lowered.


PHARMACEUTICAL FORMULATIONS: Elects Frank X. Buhler to Board
------------------------------------------------------------
On June 16, 2003 Pharmaceutical Formulations, Inc. completed an
offer to holders of its 8% and 8.25% convertible subordinated
debentures to extend the payment terms on those bonds, which were
due to mature on June 16, 2003.  An aggregate of $1,508,000 of the
debentures were extended in accordance with the offer.  The
outstanding remaining balances are $1,179,000 on the 8% debentures
and $329,000 on the 8.25% debentures.  The offer to debenture
holders extended the payment date to June 15, 2004 at the current
interest rate of 8% or 8.25%, depending on which bonds are held.
In exchange for the debenture holders' agreement to extend the
maturity date on the debentures, they received a one-time up-front
fee of $10 per $1,000 of debenture principal held by them. The
privilege to convert the debentures into common stock of PFI at
$.34 per share was also extended. The remaining principal balance
of $542,000, due to debenture holders, who did not accept the
extension offer, was repaid in cash.

The Company did not make the June 16, 2003 interest payment due
under its 8% Convertible Subordinated Debentures due 2004.  Also,
the Company did not make the June 30, 2003 interest payment due
under its 8% Convertible Subordinated Debentures due 2004.  It is
the Company's intention to make such payments within the 30 day
period allowed before such nonpayment would become an event of
default under the respective debenture indenture.

At the Company's Annual Meeting of Stockholders, held on June 18,
2003, Mr. Frank X. Buhler was elected to the Board of Directors.
Mr. Buhler had been President of Konsyl Pharmaceuticals, Inc.,
which became a subsidiary of the Company on May 15, 2003.  All
other incumbent directors were reelected.

The Company's March 29, 2003, balance sheet posted a shareholders'
equity deficiency of about $17.8 million.


PREMCOR INC: Will Publish Second Quarter Results on July 24
-----------------------------------------------------------
Premcor Inc. (NYSE:PCO) will host a conference call on July 24,
2003 at 11:00 a.m. EDT to discuss second quarter 2003 results and
to provide an update on company operations.  Second quarter
results will be released earlier that day.

Interested parties may listen to the live conference call on the
Internet by logging on to the investor relations section of the
Premcor Inc. Web site at http://www.premcor.com  There will also
be a recorded playback available until July 31, 2003 at (888) 567-
0389 or (402) 998-1762.

Premcor Inc. is one of the largest independent petroleum refiners
and marketers of unbranded transportation fuels and heating oil in
the United States.

As previously reported, Standard & Poor's Ratings Services
assigned its 'BB-' rating to independent petroleum refiner Premcor
Refining Group Inc.'s new $250 million senior unsecured notes due
2015. At the same time, Standard & Poor's affirmed its ratings on
Premcor and parent Premcor USA Inc.

The outlook has been revised to negative from stable.


QUEBECOR MEDIA: Eugene Marquis Resigns as Videotron Unit's CEO
--------------------------------------------------------------
Mr. Eugene Marquis, President and Chief Executive Officer of
Videotron Telecom Ltd., has tendered his resignation to the
company's Board of Directors, which had no choice but to accept
it.  Mr. Marquis was appointed to the position in February 2001,
several months after the takeover of Groupe Videotron, the former
majority shareholder in Videotron Telecom, by Quebecor Media. At
the time, Videotron Telecom was on the verge of bankruptcy and Mr.
Marquis had to act swiftly to restore the company to financial
health. Under his leadership, Videotron Telecom not only recovered
but expanded, particularly in Toronto and southern Ontario, the
country's largest business market.

"We are saddened that Eugene is leaving us," said Pierre Karl
Peladeau, President and Chief Executive Officer of Quebecor Media,
the majority shareholder in Videotron Telecom. "His determination
and vision turned the company around in short order, saving
Videotron Telecom from the sad fate of many other industry
players, the majority of which have gone bankrupt in the last few
years. He quickly got Videotron Telecom back in the black.
Unfortunately, the shareholders' agreement between the former
management of Groupe Videotron and minority shareholder Carlyle
Group of the US made his job impossible. In this sense, we
understand the reasons for his decision."

Mr. Marquis will remain in his position until July 11, 2003. The
Board of Directors will have to find a successor.

Videotron Telecom Ltd., a subsidiary of Quebecor Media Inc., is a
state-of-the-art business telecommunications provider delivering
robust, high-quality services to large and medium-sized
businesses, Internet Service Providers, Application Service
Providers, broadcasters and to government institutions. VTL offers
customers a complete portfolio of network solutions and Internet,
hosting, local and long-distance telephony as well as studio-
quality audiovideo services. VTL's 10,000 km-plus fiber-optic
network is accessible to over 80% of businesses in the
metropolitan areas of Ontario and Quebec. VTL, established in
1989, employs more than 550 people.

Quebecor Media Inc., a subsidiary of Quebecor Inc. (TSX: QBR.A,
QBR.B), operates in Canada, the United States, France, Italy and
the UK. It is engaged in newspaper publishing (Sun Media
Corporation), cable television (Videotron ltee), broadcasting (TVA
Group Inc.), Web technology and integration (Nurun Inc. and
Mindready Solutions Inc.), Internet portals (Netgraphe Inc.),
magazines (TVA Publishing Inc.), books (a dozen associated
publishing houses), distribution and retailing of cultural
products (Archambault Group Inc. and Le SuperClub Videotron ltee)
and business telecommunications (Videotron Telecom Ltd.).

As reported in Troubled Company Reporter's February 13, 2003
edition, Standard & Poor's Ratings Services removed its ratings on
diversified media company, Quebecor Media Inc., from CreditWatch
with negative implications, where they were placed on Sept. 16,
2002, following the completion of Sun Media's refinancing that was
carried out largely as expected. In addition, outstanding ratings
on Quebecor Media, including the 'B+' long-term corporate credit
rating, along with all ratings on subsidiaries Sun Media Corp.,
and Videotron Ltee, were affirmed. The outlook is stable.

At the same time, ratings on Sun Media's US$97.5 million 9.5%
senior subordinated notes due February 2007, and US$53.5 million
9.5% senior subordinated notes due May 2007, were withdrawn to
reflect Sun Media's intention to call these notes in the near
term.


RESI FINANCE: S&P Rates 5 Series 2003-CB1 Note Classes at Low-Bs
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its ratings to RESI
Finance L.P. 2003-CB1/RESI Finance DE Corp. 2003-CB1's $143.564
million real estate synthetic investment securities series 2003-
CB1.

The ratings on the trust are based on a level of credit
enhancement that meets Standard & Poor's requirements given the
quality of the loans; the distribution of the mortgaged
properties; and a legal structure designed to minimize potential
losses to certificateholders caused by the insolvency of the
issuer.

                       RATINGS ASSIGNED
RESI Finance L.P. 2003-CB1/RESI Finance DE Corp. 2003-CB1
Real estate synthetic investment securities series 2003-CB1

         Class         Rating      Amount (mil. $)
         B3            A+                   30.453
         B4            A                    17.402
         B5            A-                   21.752
         B6            BBB+                 13.051
         B7            BB+                  21.752
         B8            BB                    6.091
         B9            BB-                   8.701
         B10           B+                    6.961
         B11           B                     4.350


RELIANCE: Court Approves Settlement Pact with Unsecured Panel
-------------------------------------------------------------
On June 19, 2003, the Commonwealth Court of Pennsylvania entered
an order which, among other things, approved a settlement
agreement and related side letter, together with the Settlement
Agreement, between the Commissioner of Insurance for the
Commonwealth of Pennsylvania, in her capacity as liquidator of
Reliance Insurance Company and the Official Committee of Unsecured
Creditors and the Official Unsecured Bank Committee.

Previously, on May 28, 2003, the United States Bankruptcy Court
for the Southern District of New York entered an order in the
Company's Chapter 11 cases, which approved the Settlement
Agreement.

The terms of the Settlement provided that it was effective only on
receipt of the Pennsylvania Order and of the Bankruptcy Court
Order.


SAFETY-KLEEN CORP: Seeks to Settle Bayonne Superfund Claims
-----------------------------------------------------------
Beginning in the 1940s, Bayonne Barrel and Drum Superfund Site
located in Newark, New Jersey was operated as a drum recycling
facility.  As a result of these operations, the Bayonne Site is
contaminated with metals, industrial solvents, PCBs, and dioxin.
In 1996, the United States Environmental Protection Agency issued
an administrative order identifying the PRP Group, including
Debtor Solvent Recovery Service of New Jersey, as potential
responsible parties.  SRSNJ is a PRP in connection with its
alleged use of the Bayonne Site as a solvent disposal site.  Under
the Administrative Order, the PRP Group was responsible for
immediate waste removal actions at the Bayonne Site. The initial
remediation under the Administrative Order is complete.

Nevertheless, the EPA has made other long-term remediation demands
on the PRP Group.  Currently, the PRP Group is negotiating with
the EPA to resolve the issues; however, if an agreement for
remediation is not reached, the EPA will pursue litigation against
the PRP Group to resolve the issues.

The Safety-Kleen Debtors reached a settlement with Dupont, BASF
Corporation (Inmont Corporation); Hoffman-LaRoche, Inc.; National
Starch and Chemical Company; Kewanne Industries, Inc. (Colonial
Printing Ink Company); United States Printing Ink; Zeneca, Inc.
(Converters Ink); 3M Company; Akzo Nobel Coatings, Inc. (Reliance
Universal, Inc.); SRSNJ; Johnson and Johnson (Personal Products);
The Sherwin-Williams Company; Kurz Hastings, Inc.; PPG Industries,
Inc.; Honeywell International, Inc.; The Valspar Corporation
(Lilly Industries, Inc.); Sequa Corporation (General Printing
Ink); Solutia, Inc. (Monsanto Company); Ford Motor Company; Nestle
USA, Inc.; PRC-DeSote International, Inc. (Products Research and
Chemical Corporation); Alumax Mill Products Inc. (Howmet
Aluminum); Reckitt Benckiser Inc. (Airwick Industries, Inc.);
Borden Chemical Inc.; D.A. Stuart Oil Company; S & W Waste, Inc.;
Whittaker Corporation (North Brunswick Coating & Chemicals
Division); Reichhold, Inc.; Technical Coatings Co.; Millennium
Petrochemicals, Inc. (U.S. Industrial Chemicals, PL);
Tuscan/Lehigh Dairies LP; General Motors Corporation; Volkswagen
of America, Inc.; Engelhard Corporation; ICI Americas Inc.;
Waste Management (SCA Chemical Services); and their successors and
predecessors, assigns, parents, subsidiaries, and affiliates.

According to Michael W. Yurkewicz, Esq., at Skadden Arps, in
Wilmington, Delaware, DuPont, the largest volume generator to the
Bayonne Site, has offered to lead remediation of the Bayonne Site
and permit various Settling Parties to "cash out" of their
liabilities for the Site under the Settlement Agreement.  DuPont,
and various other Performing Parties, will also provide
indemnification to the Cash-Out Parties for certain covered
matters.  SRSNJ has been given the opportunity to enter into the
Settlement Agreement and elect the Cash-Out Option.

                       The Settlement Agreement

After extensive negotiations, SRSNJ and the Settling Parties
reached an agreement as to the:

        (a) aggregate settlement amount to be paid by SRSNJ and
            the Settling Parties, and

        (b) proportional allocated amounts to be paid by each PRP.

Although the Settlement Agreement allocates various liabilities,
under the Settlement Agreement, each of the Settling Parties, with
the exception of DuPont, have the option to become either a Cash-
out Party, and be indemnified by the Performing Parties, or a
Performing Party that performs remediation.

Under the Settlement Agreement, DuPont will be a Settling Party, a
Performing Party, and an Indemnitor, because a sufficient number
of PRPs at the Bayonne Site have agreed to become Settling
Parties.  The Performing Parties will participate in the
settlement at the Percent Shares assigned to them on the agreed
upon contribution schedule.  The Cash-Out Parties have the option
to elect among various pay-out schemes that differ as to cost
based on, among other things, the ability to re-open the potential
for liability if remediation costs exceed $28,000,000.

SRSNJ has elected to accept the complete Cash-Out Option with no
potential for the re-opening of liability in the event remediation
costs exceed $28,000,000.  Under the Settlement Agreement, SRSNJ's
cash-out payment will be $465,319.  SRSNJ will pay $300,000 of the
Settlement Amount within 60 days of signing the Term Sheet or at
the time of Bankruptcy Court approval, whichever is later, and pay
the remainder of the Settlement Amount, plus interest, by
March 31, 2004.

                       The Debtors' Arguments

By entering into the Settlement Agreement, SRSNJ will avoid future
liability with respect to the Bayonne Site.  In consideration of
the payments made by SRSNJ under the terms of the Settlement
Agreement, the Indemnitors under the Settlement Agreement will
execute a Covenant Not to Sue and Indemnify, whereby they agree to
release, indemnify, and hold harmless SRSNJ from and against any
claims for Covered Matters, including attorneys, fees, if any.
Therefore, regardless of whether the EPA and PRP Group enter into
a final agreement regarding the Bayonne Site, the Indemnitors will
indemnify SRSNJ under the Settlement Agreement.

Absent the Settlement Agreement, SRSNJ will be considered a
recalcitrant PRP and will likely be forced to defend itself in
litigation at a significant cost to its estate.  Furthermore,
given its inherent uncertainties, litigation could result in one
or more awards against SRSNJ significantly greater than the
settlement costs it would incur under the Settlement Agreement, as
SRSNJ could be held jointly and severally liable for remediation
of the Site and be forced to pay all remaining remediation costs.
This amount could be substantially more than the Settlement
Amount.

The Debtors propose that SRSNJ resolve its disputes regarding the
Bayonne Site without litigation.  If these disputes were not
settled pursuant to the Settlement Agreement, litigation with
respect to SRSNJ's liability at the Bayonne Site would require,
among other things:

        (a) discovery and review of voluminous records relating to
            the Site;

        (b) numerous depositions of expert witnesses with respect
            to various Bayonne Site issues; and

        (c) litigation, including the possibility of a lengthy
            trial, to determine the nature and extent of SRSNJ's
            liability, if any.

Balanced against the cost to SRSNJ and its estate, it is well
within the Debtors' business judgment for SRSNJ to enter into the
Settlement Agreement and satisfy its environmental obligations
with respect to the Bayonne Site. (Safety-Kleen Bankruptcy News,
Issue No. 59; Bankruptcy Creditors' Service, Inc., 609/392-0900)


SALOMON BROS: Fitch Affirms Ratings on Series 1999-C1 Classes
-------------------------------------------------------------
Salomon Brothers Mortgage Securities VII, Inc.'s commercial
mortgage pass-through certificates, series 1999-C1, $123.0 million
class A-1, $355.7 million class A-2, and the interest-only class X
are affirmed at 'AAA' by Fitch Ratings. In addition, the following
classes are also affirmed by Fitch: the $38.6 million class B at
'AA', the $38.6 million class C at 'A', the $11.0 million class D
at 'A-', the $27.6 million class E at 'BBB', the $11.0 million
class F at 'BBB-', the $14.7 million class G at 'BB+', the $20.2
million class H at 'BB', the $9.2 million class J at 'BB-', the
$16.5 million class K at 'B', and the $7.3 million class L at 'B-
'. Fitch does not rate the $16.5 million class M certificates. The
rating affirmations follow Fitch's annual review of the
transaction, which closed in August 1999. The rating affirmations
reflect the consistent loan performance and minimal reduction of
the pool collateral balance since closing.

GMAC Commercial Mortgage Corp., the master servicer, collected
year-end (YE) 2002 financials for 76% of the pool balance. Based
on the information provided the resulting YE 2002 weighted average
debt service coverage ratio is 1.65 times compared to 1.49x at
issuance for the same loans. Two loans (0.51%) reported YE 2002
DSCRs below 1.00x.

Currently, 3 loans (2.58%) are in special servicing and are also
90+ days delinquent. The largest loan (1.00%) is secured by a
multifamily property in Houston, TX. The property has mold
infestation, with 21% of the units off line. The next largest
specially serviced loan (0.93%) is secured by a hotel in Altamonte
Springs, FL. A receiver is in place and negotiations regarding the
sale of the property continue. Losses are expected on this loan.
The third specially serviced loan (0.64%) is secured by a retail
property in North Randall, OH. The property is currently 74%
vacant; losses are expected.

Fitch will continue to monitor this transaction, as surveillance
is ongoing.


SALON MEDIA: Sells Promissory Notes & Warrants to W.R. Hambrecht
----------------------------------------------------------------
On June 12, 2003, Salon Media Group, Inc., sold and issued two
convertible promissory notes and warrants in a financing
transaction in which it raised gross proceeds of $100,000. The
transaction was entered into between the Company and two entities
associated with W.R. Hambrecht. The Note may be convertible at a
future date into equity securities of the Company at a conversion
price to be determined. The warrants grant the holders thereof the
right to purchase an aggregate of approximately 300,000 shares of
the Company's common stock at an exercise price of $0.0575 per
share. The Company will use the capital raised for working capital
and other general corporate purposes.

The Note automatically converts upon the first closing of the
Company's proposed Series D Preferred Stock securities proposed to
be issued and, if no such Financing shall have occurred by the
close of business on September 30, 2003, then the Note shall
automatically convert into shares of the Company's common stock.
In the event of an automatic conversion of the Note upon a
Financing, the number of shares of preferred or common stock to be
issued upon conversion of this and other notes shall equal the
aggregate amount of the Note obligation divided by the price per
share of the securities issued and sold in the Financing. In the
event of an automatic Note conversion into common stock absent a
Financing, the number of shares of the common stock to be issued
upon conversion of Notes shall equal the aggregate amount of each
Note obligations divided by the average closing price of the
Company's common stock over the sixty (60) trading days ending on
September 30, 2003, as reported on such market(s) and/or
exchange(s) where the common stock has traded during such sixty
trading days.

In connection with the Financing, the Company granted the Investor
security interests in the Company's assets, subject to the rights
of any Senior Indebtedness (as such term is defined in the
Agreement) and pre-existing rights.

Neither the Notes, warrants, nor the shares of common stock
underlying the warrants have been registered for sale under the
Securities Act of 1933, as amended, and may not be offered or sold
in the United States absent registration under such Act or an
applicable exemption from registration requirements.

                           *   *   *

                Liquidity and Going Concern Uncertainty

In its SEC Form 10-Q for the period ended December 31, 2002, the
Company reported:

"As of December 31, 2002, Salon had $0.2 million in available
cash remaining from the issuance of a convertible redeemable
note issued in December 2002. Salon also had $0.5 million of
restricted cash held primarily as deposits for various lease
arrangements and $0.5 million of restricted cash from a deposit
against a future transaction from a stockholder who is also a
director of Salon.

"Net cash used in operations was $2.8 million for the nine
months ended December 31, 2002, compared to $4.0 million for the
nine months ended December 31, 2001. The principal use of cash
during the nine months ended December 31, 2002 was to fund the
$4.3 million net loss for the period and $0.5 million to
restrict the cash deposit received from a stockholder, offset
partly by non-cash charges of $1.5 million. The principal use of
cash during the nine months ended December 31, 2001 was to fund
the $6.6 million net loss for the period and a $0.7 million
decrease in liabilities, offset partly by non-cash charges of
$2.8 million and $0.5 million in deferred revenue, primarily
from the implementation of Salon Premium subscriptions in April
2001.

"No cash was used in investing activities for the nine months
ended December 31, 2002, compared to an immaterial amount for
the nine months ended December 31, 2001. Salon does not expect
any significant capital expenditures during the current fiscal
year.

"Net cash provided from financing activities was $1.4 million
for the nine months ended December 31, 2002, compared to $3.1
million for the nine months ended December 31, 2001. The
principal source of funds for the nine months ended December 31,
2002 was $0.9 million from the issuance of convertible
redeemable notes, $0.2 million from the issuance of a promissory
note, a $0.5 million deposit against a future transaction from a
stockholder, partly offset by $0.2 million of lease payments.
The principal source of funds for the nine months ended December
31, 2001 was $3.2 million from the issuance of Series A
convertible preferred stock, partly offset by $0.1 million of
lease payments.

"As of December 31, 2002, Salon's available cash resources were
sufficient to meet working capital needs for approximately one
month. Subsequent to December 31, 2002, Salon finalized an
agreement with a stockholder who had made a $0.5 million deposit
against a future transaction with Salon. Under the terms of the
agreement, $0.1 million was made available for general operating
use and $0.4 million was transferred to a segregated account. On
February 11, 2003 Salon finalized an additional agreement with
another investor and received $0.1 million. Effective January
22, 2002, Salon began to restrict access to predominately all of
Salon's content to either Salon Premium subscribers or to
website visitors who are willing to view some form of
advertisement. The additional restriction to Salon content is
anticipated to increase Salon Premium subscriptions with a
corresponding increase in cash receipts from the new
subscriptions. Since this is a substantial change of Salon's
business strategy, Salon cannot predict how much and when new
cash will be generated from the change. Salon believes with the
cash on hand on December 31, 2002, $0.2 million from the above
mentioned agreements, incremental new cash to be generated from
the restriction of Salon's content, together with collections of
accounts receivable, that it will be difficult to meet working
capital needs during February 2003.

"Salon needs to raise additional funds and is currently in the
process of exploring financing options. If it is unable to
complete the financial transactions it is pursuing or if it is
unable to otherwise fund its liquidity needs, then it may not be
able to continue as a going concern. Liquidity continues to be a
constraint on business operations, including Salon's ability
to react to competitive pressures or to take advantage of
unanticipated opportunities. If Salon raises additional funds by
selling equity securities, or instruments that convert into
equity securities, the percentage ownership of Salon's current
stockholders will be reduced and its stockholders will most
likely experience additional dilution. Given Salon's recent low
stock price, any dilution will likely be very substantial for
existing stockholders.

"Salon is contemplating selling its prepaid advertising rights
valued at $5.6 million as of December 31, 2002. It is possible
that the rights might be sold for $1 million to $3 million in
cash, which would result in recording a loss of $2.6 million to
$4.6 million. Salon cannot predict when and if such a sale will
occur.

"Salon has a ten-year operating lease for office space at its
San Francisco location with approximately seven years remaining.
Salon is attempting to reduce this commitment and has suspended
applicable lease payments effective December 2002. On January
29, 2003 Salon received a demand letter for $0.2 million from
the landlord. Payment of this demand would have a great adverse
effect on Salon's current financial position. To a lesser
extent, Salon has an operating lease for office space in New
York, NY with approximately two years remaining. Salon is
currently negotiating with the landlord to reduce this
commitment.

"Salon's independent accountants have included a paragraph in
their report for the fiscal years ending March 31, 2002 and 2001
indicating that substantial doubt exists as to Salon's ability
to continue as a going concern because it has recurring
operating losses and negative cash flows, and an accumulated
deficit. Salon has eliminated various positions, not filled
positions opened by attrition, implemented a wage reduction of
15% effective April 1, 2001, and has cut discretionary spending
to minimal amounts."


SCM COMMS: Class A Notes' Rating Cut from BBB- to B+
----------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
A notes issued by SCM Communications CBO I Ltd. and managed by
Shenkman Capital Management Inc. At the same time, the rating is
removed from CreditWatch with negative implications, where it was
placed April 22, 2003.

The lowered rating reflects factors that have negatively affected
the credit enhancement available to support the class A notes.
These factors include par erosion of the collateral pool securing
the rated notes and a downward migration in the credit quality of
the assets within the pool.

The principal coverage tests for SCM Communications CBO I Ltd.
continue to be out of compliance and there has been further
deterioration in the transaction's principal coverage ratios since
the transaction was last downgraded in October 2002. As of the
June 2, 2003 monthly trustee report, the class A principal
coverage ratio was 106.7% (the minimum required is 120%), versus a
ratio of 109.8% in October 2002. The class B principal coverage
ratio was 91.5% (the minimum required is 110%), versus a ratio of
95.8% in October 2002. The class C principal coverage ratio was
86.0% (the minimum required is 107%), versus a ratio of 90.7% in
October 2002.

The credit quality of the assets in the collateral pool has also
deteriorated since the transaction was last downgraded. Currently,
$27,100,000 of the collateral (or approximately 10.13% of the
collateral pool) is defaulted. In addition, $27,911,404 (or
approximately 11.61%) of the performing assets in the collateral
pool come from obligors with Standard & Poor's ratings currently
in the 'CCC' range, and $19,550,000 (or approximately 8.13%) of
the performing assets in the collateral pool come from obligors
with Standard & Poor's ratings that are currently on CreditWatch
negative.

In addition, Standard & Poor's notes SCM Communications CBO I Ltd.
triggered a technical event of default May 15, 2003, as per
section 5.1(d) of the Indenture, by failing to maintain an
aggregate principal amount of collateral debt securities and
eligible investments at least equal to 100% of the aggregate
principal amount of the class A notes and class B notes.

Standard & Poor's has reviewed current cash flow runs generated
for SCM Communications CBO I Ltd. to determine the future defaults
the transaction can withstand under various stressed default
timing scenarios, while still paying all of the rated interest and
principal due on the class A notes. Upon comparing the results of
these cash flow runs with the projected default performance of the
current collateral pool, Standard & Poor's determined that the
rating previously assigned to the class A notes was no longer
consistent with the credit enhancement currently available,
resulting in the lowered rating. Standard & Poor's will continue
to monitor the performance of the transaction to ensure that the
rating assigned to the class A notes remains consistent with the
credit enhancement available.

         RATING LOWERED AND OFF CREDITWATCH NEGATIVE

      SCM Communications CBO I Ltd./SCM Communications CBO I Corp.

      Class      Rating                    Balance (Mil. $)
              To        From             Orig.       Current
      A       B+      BBB-/Watch Neg     279.000     239.157


SECURITY INDEMNITY: Rehabilitation Prompts S&P's R Rating
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'R' financial
strength rating to Security Indemnity Insurance Co. (Security
Indemnity) reflecting the company's current state of
rehabilitation. This is the result of a decision by the Mercer
County Superior Court on June 27, 2003, to place Security
Indemnity under rehabilitation.

Security Indemnity can no longer send out renewal notices for its
21,000 auto insurance policies, beginning with those up for
renewal Sept. 1, 2003. The company must also send out midterm
cancellation notices for its commercial policies by July 31, 2003.

"This action stems from Security Indemnity's surplus of about
$710,000 as of year-end 2002, which was significantly less than
the $4.1 million minimum reserve established by the Department of
Banking and Insurance," said Standard & Poor's credit analyst
Ovadiah N. Jacob. "The decline in reserves was caused by an
extended reinsurance contract dispute between Security Indemnity
and General Motors Corp.'s insurance division. Security Indemnity
suffered losses as they were forced to handle the claims
directly." The resultant decline in surplus is a direct effect of
this, and New Jersey State officials acted to protect Security
Indemnity's policyholders.

Security Indemnity is a property/casualty insurer, which
originally specialized in providing coverage to New Jersey bars
and restaurants and then began providing auto insurance in 1998.

An insurer rated 'R' is under regulatory supervision owing to its
financial condition. During the pendency of the regulatory
supervision, the regulators may have the power to favor one class
of obligations over others or pay some obligations and not others.
The rating does not apply to insurers subject only to nonfinancial
actions such as market conduct violations.


SHC INC: Asks Court for Okay to Use Lenders' Cash Collateral
------------------------------------------------------------
SHC, Inc., and its debtor-affiliates ask for authority from the
U.S. Bankruptcy Court for the District of Delaware to use their
Lenders' Cash Collateral to finance their ongoing operations while
in chapter 11.

The Debtors' secured debt includes a bank facility and a state
industrial development loan.  The Bank Facility was obtained from
Bank of America, NA as Administrative Agent.  The Debtors admit
that, as of the Petition Date:

      i) the aggregate outstanding principal amount of the
         prepetition loans was $420,489,670; and

     ii) the aggregate undrawn amounts on account of letters of
         credit was $7,442,318.

The Prepetition Lenders assert that the Prepetition Obligations
are secured by fully perfected, non-avoidable first priority
security interests in and liens on substantially all of the
Debtors' assets, including, without limitation, inventory,
accounts, general intangibles, equipment and notes, and all
profits, income, and proceeds derived from the Prepetition
Collateral.

The Debtors agree to limit use of the Lenders' cash collateral in
accordance with a weekly budget projecting:

                            4-Jul 11-Jul 18-Jul 25-Jul
                            ----- ------ ------ ------
Payroll and Other Expense   814  1,381    873    814
SG&A                        148    582    190    148
Advertising Promo           493  1,721    493    493
Total Cash Disbursements  3,598  6,949  4,863  4,199

                            1-Aug  8-Aug 15-Aug 22-Aug
                            -----  ----- ------ ------
Payroll and Other Expense   814  1,381    873  1,381
SG&A                        148    970    315    273
Advertising Promo           373    373    349    373
Total Cash Disbursements  3,251  3,068  3,164  4,085

                           29-Aug  5-Aug 12-Aug 19-Aug  26-Aug
                           ------  ----- ------ ------  ------
Payroll and Other Expense   814  1,381    814    873     814
SG&A                        148    148    624    148     148
Advertising Promo           155    155    155    155   1,015
Total Cash Disbursements  2,692  2,696  3,168  1,833  10,834

The Debtors submit that using the Cash Collateral will maintain
the Debtors' business and the going concern value of these estates
for the benefit of creditors. The Debtors believe that to the
extent the Prepetition Liens asserted by the Pre-Petition Lenders
are valid, such interests will be best preserved by permitting the
Debtors to use Cash Collateral to prevent diminution in the value
of the Prepetition Collateral. As protection against and to secure
the extent of any diminution in the value of the Pre-Petition
Collateral resulting from the Debtors' use of Cash Collateral, the
Debtors propose to provide the Prepetition Lenders with
replacement liens in the form of security interests in and liens
upon all assets and property of the Debtors

SHC, Inc., headquartered in Chicopee, Massachusetts is a
manufacturer of golf balls and clubs and other sporting goods.
The Company filed for chapter 11 protection on June 30, 2003
(Bankr. Del. Case No. 03-12002).  Pauline K. Morgan, Esq., at
Young, Conaway, Stargatt & Taylor represents the Debtors in their
restructuring efforts.


SPORTS CLUB: S&P Maintains CCC Rating & Says Outlook is Negative
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'CCC' corporate
credit rating on fitness club operator The Sports Club Co Inc.,
based on improvement in membership enrollment and liquidity.

Standard & Poor's at the same time said it has removed its ratings
on the Los Angeles, California-based company from CreditWatch,
where they were placed with negative implications. The outlook is
negative. As of March 31, 2003, Sports Club had total debt of
$123.2 million outstanding.

"The rating action reflects Sport Club's improvement in membership
enrollment and liquidity," said credit analyst Andy Liu. The
company has benefited from increased enrollment in its newer clubs
and higher monthly dues. On a year-over-year basis, total
memberships grew by 8.4%, with most of the increase coming from
its five most recently opened clubs. The company's financial risk
remains high with strained liquidity, high debt leverage, and
significant discretionary cash flow deficits. Capital spending has
declined but commitments to complete the Beverly-Hills Club,
together with regular maintenance, represent meaningful uses. The
issuance of a $20 million note secured by its Irvine Sports Club
and guaranteed by its two Co-CEOs enabled the company to retire
its revolving credit facility and prepare for its September
interest payment. It is unclear how the company will meet its
ongoing debt service, absence a dramatic improvement in cash flow.
Also, the absence of a committed credit facility reduces Sports
Club operating cushion in an uncertain economic environment.


STANDARD MOTOR: S&P Lowers Ratings to Single-B Territory
--------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on engine management and temperature control systems
manufacturer Standard Motor Products Inc., to 'B+' from 'BB-', and
its subordinated debt ratings, to 'B-' from 'B', and removed them
from CreditWatch where they were placed on Feb. 10, 2003. The
actions were based on the company's completed acquisition of the
engine management division (DEM) of Dana Corp. (BB/Stable/--) for
$121 million. The acquisition, funded by debt and equity of
Standard Motor, resulted in significantly increased near-term
leverage.

The outlook is negative.

The acquisition of DEM will increase Standard Motor's overall net
sales by 50% and double existing engine management sales,
reflected in pro forma segment market share of about 30%.

"With increased engine management business, exposure to the more
volatile temperature control business should be reduced, also
allowing Standard Motor to better manage seasonal working capital
requirements that typically peak in the second quarter," said
Standard & Poor's credit analyst Linli Chee.

The ratings could be lowered if the company fails to turn around
the current unprofitable state at DEM and EBITDA improvement from
lean manufacturing initiatives stalls thereby affecting the
company's ability to reduce leverage and/or comply with bank
covenants.


USG CORP: Court Clears Equis' Retention as Agent & Broker
---------------------------------------------------------
Judge Newsome authorizes USG Corporation and its debtor-affiliates
to employ Equis Corporation as real estate agent and broker for
the Principal Office in these Chapter 11 cases nunc pro tunc as of
May 7, 2003.  However, Judge Newsome denies the Debtors' request
to file under seal the Miscellaneous Details Agreement as an
exhibit to the application because:

     (1) The Miscellaneous Details Agreement was not attached to
         the application; and

     (2) The application failed to specify which portions of the
         Agreement were sensitive and why these portions could not
         have been redacted.

As Agent, Equis will:

(a) identify and analyze all available options and alternatives
     with respect to the location of their principal office;

(b) contact current or potential landlords regarding
     renegotiation or termination of the current lease for the
     Principal Office or its relocation to a different site under
     new lease;

(c) analyze and negotiate the terms and conditions of any
     proposal for the Principal Office lease; and

(d) assist with other appropriate real estate and management
     matters with respect to the Principal Office as may be
     mutually agreed upon.

Under the Agreements, the Debtors have no obligation to pay any
commission, fee or other compensation or reimbursement to Equis
for its services.  Equis will collect a commission from the other
parties to any transaction involving the selection of a site as
the Primary Office.  No retainer has been paid to Equis and no
payments have been made within one year of the Petition Date. (USG
Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


VICWEST CORP: Canadian Court Extends CCAA Stay Until August 12
--------------------------------------------------------------
As previously announced, Vicwest Corporation and certain of its
Canadian subsidiaries obtained an order on May 12, 2003 to begin
Vicwest's restructuring under the Companies' Creditors Arrangement
Act.

Vicwest obtained on July 2, 2003 from the Ontario Superior Court
of Justice an order granting it and the Subsidiaries an extension
to August 12, 2003 of protection under the CCAA.

Vicwest also obtained an order of the Court approving the claims
procedure for affected creditors of Vicwest and the holding of,
and the manner of notice for and conduct at, a meeting of affected
creditors of Vicwest scheduled to be held at 10:00 a.m. (Toronto
time) on August 1, 2003 at the Metro Toronto Convention Centre,
Room 205B, 255 Front Street West, North Building, Toronto,
Ontario. A copy of the order will be filed by Vicwest with the
Canadian securities regulators and will be available on their Web
site, http://www.sedar.com.

Deloitte & Touche Inc., the Monitor, will be mailing materials to
affected creditors of Vicwest in accordance with the requirements
of the order. Certain known trade creditors of Vicwest will be
receiving a notice of unsecured creditor claims specifying the
amount of such creditor's claim. A creditor who receives such
notice and agrees with the amount specified in the notice is not
required to file a proof of claim or a notice of dispute of claim
in order to be entitled to vote at the Meeting or receive a
distribution in respect of such claim. A creditor who receives
such notice and who disputes the amount specified in it, must
provide to the Monitor a notice of dispute of claim so that it is
received by the Monitor on or before July 25, 2003, failing which
the amount of the claim specified in the notice will be deemed
to be the creditor's proven claim. A holder of senior subordinated
notes of Vicwest issued pursuant to the trust indenture dated as
of March 10, 2000, as amended, is not required to file a proof of
claim in order to prove its claim. All other affected creditors of
Vicwest must provide to the Monitor a proof of claim so that it is
received by the Monitor on or before July 25, 2003. Otherwise the
claims of such other affected creditors will be barred and
extinguished and such creditor will not be entitled to vote at the
Meeting or receive a distribution in respect of such claims. The
full text of the Court order should be reviewed in its entirety as
the foregoing is only a summary of the order.

Vicwest, with corporate offices in Oakville, Ontario, is Canada's
leading manufacturer of metal roofing, siding and other metal
building products.


VICWEST CORP: Secures C$52MM Financing Commitment from GE Entity
----------------------------------------------------------------
As previously announced, Vicwest Corporation and certain of its
Canadian subsidiaries obtained an order on May 12, 2003 to begin
Vicwest's restructuring under the Companies' Creditors Arrangement
Act.

Vicwest announced that it has entered into a commitment agreement
with GE Corporate Financial Services to obtain financing in the
maximum amount of Cdn. $52 million upon implementation of
Vicwest's plan of compromise and reorganization under the CCAA.
Implementation of the plan is conditional upon it having been
approved by the requisite majorities of Vicwest's affected
creditors and approved by the Ontario Superior Court of Justice.

Vicwest, with corporate offices in Oakville, Ontario, is Canada's
leading manufacturer of metal roofing, siding and other metal
building products.


WATERLINK: Asking Authority to Pay Vendors' Prepetition Claims
--------------------------------------------------------------
Waterlink, Inc., and its debtor-affiliates ask for authority from
the U.S. Bankruptcy Court for the District of Delaware to pay the
prepetition claims of the critical shipping and employee charges.
The Debtors estimate that the aggregate amount of such claims is
less than $50,000.

In the normal course of the Debtors' provision of services and
products to their customers across the United States, the Debtors
ship product handled by independent third party commercial common
carriers, including trucking companies. The Debtors believe that,
unless paid, Shippers may withhold delivery of, or access to, the
Debtors' goods, and that the value of such goods in most cases
exceeds the amounts of the claims o f such parties.

Accordingly, to protect and preserve and maximize the value of the
Debtors' assets, the Debtors request authority to pay the
prepetition claims of the Shippers in the ordinary course of
business.

Additionally, in the ordinary course of business, the Debtors
utilize Columbus Custom Brokers, a third party paying agent, to
pay certain of the Shippers. CCB pays invoices from these Shippers
for services rendered to the Debtors at the port and then submits
invoices to Debtors for amounts paid to the Shippers.

The Debtors do not have an alternate system in place to pay
certain Shippers absent use of CCB. Therefore, the Debtors believe
that the continued use of CCB to process such Shippers' invoices
is critical to the Debtors' efforts to maximize the value of its
assets and, therefore, request authority to continue paying CCB
all amounts owed for outstanding prepetition shipping charges, as
well as CCB's standard fees for processing and paying the
Shippers, including payment of any prepetition amounts outstanding
in the ordinary course of business.

The Debtors also rely on the services provided by certain
temporary labor firms, including QA Human Resources and Personnel
Services and Office Team for the normal operation of their
businesses. The Temporary Labor is integral to the Debtors'
ability to process customer returns in the ordinary course of
their business. The services performed by the Temporary Labor that
the Debtors have been receiving are specialized services that
cannot, without training, be filled by any provider of temporary
staffing needs. The Debtors do not have the time and resources
necessary to provide training to new temporary employees. The
Debtors believe that absent payment of the prepetition claims of
the Temporary Labor, the Temporary Labor may cease doing business
with the Debtors, which will severely damage Debtors' ability to
process returns thereby damaging relationships with customers and
impairing the Debtors' ability to collect receivables.

The Debtors further request that any Shipper, CCB or Temporary
Labor who accepts a payment pursuant to the order granting this
Motion be deemed to have accepted the terms of such order and to
have agreed to continue to provide postpetition services to the
Debtors on ordinary and customary trade terms as were in effect
prior to the Petition Date.

The Debtors further request that if any Shipper, CCB or Temporary
Labor accepts payment pursuant to the order and subsequently fails
or refuses to continue to provide goods or services on Customary
Terms in these Chapter 11 cases, then any payment received on
account of a Shipper Claim or Temporary Labor Claim will be deemed
to be an avoidable postpetition transfer and, accordingly,
recoverable by the Debtors in cash upon written request, and upon
recovery by the Debtors, any such prepetition Shipper Claim or
Temporary Labor Claim will be reinstated as if the payment had not
been made.

Waterlink, Inc., headquartered in Columbus, Ohio, is an
international provider of integrated water and air purification
solutions for both industrial and municipal customers.  The
Company filed for chapter 11 protection on June 27, 2003 (Bankr.
Case No. 03-11989).  Kurt F. Gwynne, Esq., at Reed Smith LLP
represents the Debtors in their restructuring efforts.  As of
March 31, 2003, the Debtors listed $36,719,000 in total assets and
$51,081,000 in total debts.


WEIRTON STEEL: Turns to Buck Consultants for HR Advice
------------------------------------------------------
Weirton Steel Corporation and its debtor-affiliates sought and
obtained the Court's blessing to employ Buck Consultants, Inc. as
its human resources consultant during this Chapter 11 case in
accordance with that certain engagement letter dated May 8, 2003,
by and between Buck Consultants and Weirton.

Buck Consultants will provide valuable consultation to Weirton
with respect to its human resource management and identification
and retention of key employees.  Specifically, the consultation to
be provided by Buck Consultants will include:

A. Preservation of Human Capital and Resources Management

     (a) assisting in the design and development of a Key Employee
         Retention Program, which may include these program
         components:

         -- a pay-to-stay component;
         -- a management incentive compensation plan;
         -- severance benefits;
         -- an emergence bonus, and
         -- a discretionary incentive pool;

     (b) conducting appropriate research and benchmarking market-
         competitive cash compensation levels; long-term incentive
         opportunities; and retention awards and severance benefits
         prevalent in the general market and approved in major
         bankruptcy cases;

     (c) addressing issues related to Weirton's human resource
         needs;

     (d) responding to issues that could influence the Board's
         ability to retain key people at all organizational levels;

     (e) presenting findings and recommendations to management and
         the Board;

     (f) representing Weirton before professional advisors,
         attorneys, and, if called upon, by the bankruptcy court;
         and

     (g) any other services Weirton will request with respect to
         human capital and human resource management.

B. Employee Benefits Consulting

     (a) defining alternative services to delivering health
         benefits;

     (b) efficient delivery options to take advantage of the health
         coverage tax credit;

     (c) restructuring retirement benefit programs and
         administration of both qualified and nonqualified plans;

     (d) employee benefit plan redesign and negotiations; and

     (e) communication of employee benefit plan changes.

Buck Consultants has in the past provided general human resources
consulting advice to Weirton on an as needed basis, and also
regularly provides consulting services regarding Weirton's
supplemental retirement income plan.  Both Parties intend to
continue Buck Consultants' services pursuant to this application.

Buck Consultants will charge for its professional services on an
hourly basis in accordance with its ordinary and customary hourly
rates in effect on the date services are rendered.  Buck
Consultants will maintain detailed, contemporaneous records of
time and any actual and necessary expenses incurred in connection
with the rendering of the services described.

Buck Consultants' customary hourly rates for the human resources
consulting services to be provided to Weirton are:

     Principal                   $464 - 500
     Associate Principal          380 - 452
     Senior Consultant            272 - 360
     Consultant                   240 - 272
     Senior Associate             196 - 216
     Associate                    140 - 192
     Administrative Professional  140

As of the Petition Date, Mr. Freedlander adds, Buck Consultants
held a $40,000 retainer, which will be applied to the final
invoice for this engagement. (Weirton Bankruptcy News, Issue No.
5; Bankruptcy Creditors' Service, Inc., 609/392-0900)


WORLDCOM INC: Court Fixes September 30 Exclusivity Extension
------------------------------------------------------------
Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New
York, notes that in the largest Chapter 11 case ever filed, the
Worldcom Inc. Debtors filed their plan of reorganization on April
14, 2003, less than nine months after the Petition Date.  This
demonstrates the Debtors' firm commitment to achieve their
reorganization as expeditiously as practicable.  The existence of
good faith progress toward reorganization and the need for more
time to continue this progress has been recognized as a
significant factor in establishing cause for extending the
Exclusive Periods under Section 1121(d) of the Bankruptcy Code.
See, e.g., In re McLean Industries, Inc., 87 B.R. 830, 834 (Bankr.
S.D.N.Y. 1987) ("In finding cause, courts have relied on, in
addition to the need of the creditors committee to negotiate with
the debtor . . . the existence of good faith progress toward
reorganization"); see also In re Ames Dep't Stores, Inc., No. M-47
(PKL), 1991 WESTLAW 259036, *2-3 (S.D.N.Y. 1991) (debtors' good
faith effort in moving case forward toward reorganization is a
factor constituting cause for an extension of the exclusive
periods; District Court also noted that "purpose of the Bankruptcy
Code's exclusivity period is to allow the debtor flexibility to
negotiate with its creditors"); In re Interco, Inc., 137 B.R.
999, 1001 (Bankr. E.D. Mo. 1992) ("The Court finds and concludes
from the record that the Debtors are making good faith progress
toward reorganization, and that they are acting in good faith as
these cases progress toward reorganization").

Ms. Goldstein contends that the filing of the Plan and the
approval of the Disclosure Statement evidences the substantial
progress made by the Debtors towards the confirmation of the
Plan.  However, in view of the recently scheduled vote
solicitation period of June 13, 2003 through August 12, 2003 and
the August 25, 2003 Confirmation Hearing, the current deadline
for the Debtors' Exclusive Solicitation Period is insufficient to
allow the Debtors to solicit the requisite votes and confirm the
Plan without the possible disruption of competing plans.

Ms. Goldstein explains that the Debtors need to confirm and
consummate a reorganization plan that will maximize returns to
creditors and preserve their numerous businesses.  The Debtors
believe that, at this time, the filing of a competing plan or
plans, or even the mere threat of such a filing, would prove
extremely disruptive to the reorganization process.  The course
of events would likely serve no other purpose than to introduce
delay and additional administrative expenses to these cases
without any commensurate benefits.  Any plan or plans could not
realistically offer a greater return to creditors than that which
the Debtors propose under the Plan.  The Debtors submit that an
extension of the Exclusive Solicitation Period is essential to
allow them to prosecute confirmation of the Plan in an efficient
and timely manner.

Accordingly, the Debtors sought and obtained a Court order
extending their Exclusive Solicitation Period under Section
1121(c)(3) of the Bankruptcy Code to and including September 30,
2003, without prejudice to their right to seek other or further
extensions as may be appropriate under the circumstances then
prevailing. (Worldcom Bankruptcy News, Issue No. 31; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


YAHOO INC: S&P Assigns BB+ Corp. Credit & Senior Note Rating
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' corporate
credit rating to Yahoo! Inc. At the same time, Standard & Poor's
assigned its 'BB+' rating to Yahoo's $750 million senior
convertible notes due 2008. Net proceeds will be used for general
corporate purposes, including acquisitions. Sunnyvale, California-
based Yahoo had no debt outstanding at March 31, 2003. The outlook
is stable.

"The rating reflects the company's well-established Internet
brand, high profit margins, good discretionary cash flow, and
ample cash cushion, along with concerns regarding the company's
revenue and earnings concentration from advertising and
sponsorship, competition in the Internet search business, and the
challenge of retaining its market position in an evolving Internet
medium as Internet usage migrates to broadband," said credit
analyst Andy Liu.

Founded in 1995 as an Internet information directory, Yahoo has
been a major player in Internet information services and related
marketing services for more than five years. The company provides
a wide array of services to both consumers and businesses. The
majority of its services are currently free. However, the company
has been aggressively introducing premium fee-based services such
as Yahoo! Premium Mail and Yahoo! Platinum.

Yahoo's marketing services, including banner advertisement,
sponsored search, paid inclusion, and sponsorships, are well
established and are generating the majority of the company's
revenue. Yahoo, through its agreement with Overture Services Inc.,
generated about 14% of its 2002 revenue from sponsored search (or
about $130 million). More importantly, the company expects
sponsored search will grow between 40% to 60% in the next two to
four years and Yahoo, with its significant online traffic, is
expected to benefit greatly from this fast growing segment of the
Internet.

Yahoo's current challenge is to generate and increase subscription
revenue from its registered user base and a meaningful cash flow
stream from broadband content and services. Although Yahoo has
more than 230 million registered unique users, only about 2.6% of
its registered users are paid relationships. The company will need
to establish much more extensive broadband access relationships
and launch more compelling broadband content and services.


* BOND PRICING: For the week of July 7 - July 11, 2003
------------------------------------------------------

Issuer                                Coupon   Maturity  Price
------                                ------   --------  -----
Adelphia Communications               10.875%  10/01/10    63
American Airline                       7.377%  05/23/19    56
American Airline                       7.379%  05/23/16    52
American & Foreign Power               5.000%  03/01/30    68
AMR Corp.                              9.000%  08/01/12    67
AMR Corp.                              9.000%  09/15/16    65
AnnTaylor Stores                       0.550%  06/18/19    67
Aurora Foods                           9.875%  02/15/07    50
Best Buy Co. Inc.                      0.684%  06/27/21    74
Burlington Northern                    3.200%  01/01/45    58
Charter Communications, Inc.           4.750%  06/01/06    66
Charter Communications, Inc.           5.750%  01/15/05    70
Charter Communications Holdings        8.625%  04/01/09    71
Charter Communications Holdings        9.625%  11/15/09    74
Charter Communications Holdings       10.000%  05/15/11    72
Comcast Corp.                          2.000%  10/15/29    32
Conseco Inc.                           6.400%  02/10/49    29
Conseco Inc.                           8.750%  02/09/04    29
Cox Communications Inc.                0.348%  02/23/21    72
Cox Communications Inc.                2.000%  11/15/29    39
Cummins Engine                         5.650%  03/01/98    73
Delta Air Lines                        8.300%  12/15/29    69
Delta Air Lines                        9.000%  05/15/16    72
DVI Inc.                               9.875%  02/01/04    75
Dynex Capital                          9.500%  02/28/05     2
Elwood Energy                          8.159%  07/05/26    72
Finova Group                           7.500%  11/15/09    44
Fleming Companies Inc.                10.125%  04/01/08    14
Internet Capital                       5.500%  12/21/04    37
Kmart Corporation                      9.375%  02/01/06    20
Level 3 Communications Inc.            6.000%  09/15/09    74
Level 3 Communications Inc.            6.000%  03/15/10    71
Lehman Brothers Holding                8.000%  11/13/03    71
Liberty Media                          3.750%  02/15/30    61
Liberty Media                          4.000%  11/15/29    65
Lucent Technologies                    6.450%  03/15/29    68
Lucent Technologies                    6.500%  01/15/28    68
Magellan Health                        9.000%  02/15/08    47
Mirant Americas                        7.200%  10/01/08    63
Mirant Americas                        8.300%  05/01/11    62
Mirant Americas                        8.500%  10/01/21    57
Mirant Americas                        9.125%  05/01/31    58
Mirant Corp.                           5.750%  07/15/07    68
Missouri Pacific Railroad              4.750%  01/01/20    75
Missouri Pacific Railroad              4.750%  01/01/30    72
Missouri Pacific Railroad              5.000%  01/01/45    69
NTL Communications Corp.               7.000%  12/15/08    19
Northern Pacific Railway               3.000%  01/01/47    56
Northwestern Corporation               6.950%  11/15/28    66
Revlon Consumer Products               8.625%  02/01/08    47
United Airlines                       10.670%  05/01/04    10
US Timberlands                         9.625%  11/15/07    60
WCI Steel Inc.                        10.000%  12/01/04    31
Westpoint Stevens                      7.875%  06/15/08    21
Xerox Corp.                            0.570%  04/21/18    65

                            *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.

Bond pricing, appearing in each Thursday's edition of the TCR, is
provided by DebtTraders in New York. DebtTraders is a specialist
in global high yield securities, providing clients unparalleled
services in the identification, assessment, and sourcing of
attractive high yield debt investments. For more information on
institutional services, contact Scott Johnson at 1-212-247-5300.
To view our research and find out about private client accounts,
contact Peter Fitzpatrick at 1-212-247-3800. Real-time pricing
available at http://www.debttraders.com/

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                           *********

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

Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard
Group, Inc., Washington, DC USA. Yvonne L. Metzler, Bernadette C.
de Roda, Donnabel C. Salcedo, Ronald P. Villavelez and Peter A.
Chapman, Editors.

Copyright 2003.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $675 for 6 months delivered via e-
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for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher
Beard at 240/629-3300.

                 *** End of Transmission ***