TCR_Public/030711.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Friday, July 11, 2003, Vol. 7, No. 136

                           Headlines

AIRNET COMMS: Receives Additional Nasdaq Listing Extension
ALASKA AIR: Will Publish Second Quarter 2003 Results on July 22
ALLEGHENY TECH.: Will Webcast Q2 Conference Call on July 23
AMERALIA INC: Extends Short-Term Financing Due Date to July 31
AMERCO: Wants Blessing to Hire Ordinary Course Professionals

ARVINMERITOR: Commences Cash Tender Offer for Dana Corp. Shares
ASIA GLOBAL CROSSING: Robert Geltzer Appointed as Ch. 7 Trustee
AVALON DIGITAL: Completes Sale of Certain Assets to Silverpop
BANKUNITED: Preferreds Redeemed & Fitch Withdraws Rating
BASIS100 INC: Robert J. Smith Resigns as Chief Financial Officer

BAUSCH & LOMB: Will Host Investor Conference Call on July 24
BIOSPECIFICS TECH.: Cash Resources Insufficient to Fund Ops.
BREAKWATER RESOURCES: Reduces Term Credit Loan by $5 Million
CABLEVISION SYSTEMS: S&P Places Low-B Ratings on Watch Negative
C-BASS CBO: Low-B Ratings Assigned to Class E Notes & Preferreds

CALL-NET ENTERPRISES: Will Publish Q2 2003 Results on July 30
CHART INDUSTRIES: Wants More Time to File Schedules & Statements
CLAYTON HOMES: Brandywine Balks at Berkshire Hathaway's Offer
CNE GROUP: Reports Share Issuances Pursuant to SRC Merger Deal
CONSOLIDATED FREIGHTWAYS: Auctioning-Off Woodinville Facility

COVENTRY HEALTH: Acquiring Altius Health Plans for $41 Million
CROWN CASTLE: S&P Assigns CCC Rating to Convertible Senior Notes
CRUM & FORSTER: Fitch Assigns & Withdraws B Senior Debt Rating
DENBURY RESOURCES: Completes Exchange of B-Rated 7-1/2% Notes
DETROIT MEDICAL: S&P Hatchets Revenue Bond Rating to B from BBB-

DIRECTV: Removal Period Extension Hearing Slated for August 6
DUANE READE: Appoints Timothy R. LaBeau as SVP of Merchandising
EASYLINK SERVICES: Sets Annual Shareholders' Meeting for Aug. 7
ENRON CORP: Judge Gonzalez Clears Austin Energy Settlement Pact
EPICOR SOFTWARE: Completes Acquisition of ROI Systems for $20MM

EXIDE TECH.: Committee Wants to Investigate Insurance Assets
FACTORY 2-U: Reports Slight Decrease in Sales for June 2003
FLEMING: Herbert Baum et al. Want Advance Defense Costs Payment
FLEXIINTERNATIONAL: Brings-In Kingery Crouse as New Accountants
FOCAL COMMS: Fitch Ups & Withdraws Junk Sr. Sec. Facility Rating

FURR'S RESTAURANT: COLP Selling Assets to CIC-Buffet for $30MM
GENUITY INC: Plan Filing Exclusivity Extended to August 6, 2003
GLOBAL CROSSING: Court Extends Plan Filing Exclusivity to Oct 28
GOLDENTREE LOAN: S&P Assigns Three Prelim. BB Class Note Ratings
GREEN POWER ENERGY: Watts & Scobie Expresses Going Concern Doubt

HEADWAY CORPORATE: Section 341(a) Meeting to Convene on Aug. 13
IMCLONE SYSTEMS: Regains Compliance with Nasdaq Requirements
ISTAR FIN'L: Fitch Rates 7-7/8% Series E Preferreds at BB
JWS CBO: Fitch Affirms B+ Class D Senior Secured Note Rating
KAISER ALUMINUM: US Bank Has Until July 18, 2003 to File Claims

KMART CORP: Hires Fredrikson & Byron as Property Tax Counsel
L-3 COMMS: Will Publish Second Quarter Results on July 23, 2003
LNR PROPERTY: Calls 9-3/8% Sr. Subordinated Notes for Redemption
LTV: Copperweld Signs-Up Standard & Poor's as Valuation Advisors
LYONDELL CHEMICAL: Board Declares Regular Quarterly Dividend

MAGELLAN HEALTH: Wachovia Seeks Stay Relief to Prosecute Claims
MENNONITE GENERAL: Fitch Slashes Revenue Bond Rating to B+
MESA AIR: Inks LOI with USAir for Up to 55 CRJ-700 Regional Jets
MINERS FUEL: William Schwab Appointed as Chapter 11 Trustee
MITEC TELECOM: Bolts from BEVE Buy-Out Talks with Partnertech AB

MORGAN STANLEY: S&P Cuts Ratings on Series 2000-XLF Note Classes
NATIONAL EQUIPMENT: Has Until August 26, 2003 to File Schedules
NEW WORLD RESTAURANT: Completes Debt Refinancing Transactions
NEW WORLD RESTAURANT: S&P Assigns B- Rating over Industry Risks
NRG ENERGY: Files Second Amended Plan and Disclosure Statement

OWENS & MINOR: Names Mark A. Van Sumeren as SVP, OMSolutions(SM)
PACIFIC MAGTRON: Sells LiveMarket Unit's Assets to LiveCSP Inc.
PG&E NATIONAL: Asks Court to Restrict Trading to Preserve NOLs
POLAROID CORP: Challenges California Tax Claim's Validity
POLYONE CORP: Reduces Earnings Outlook for Second-Quarter 2003

PROVANT INC: Selling Certain Assets to Shed Debt Burden
RELIANT RESOURCES: Selling Desert Basin Plant for $288 Million
ROBOTEL ELECTRONIQUE: Liquidating Assets Due to Insolvency
STELCO INC: Pursuing Cost-Reduction Talks with U.S.W.A. Leaders
STELCO: Steelworkers Driven to Develop Own Cost-Cutting Plans

TELENETICS CORP: Peter E. Salas Discloses 9.999% Equity Stake
TRANSTEXAS GAS: Files First Amended Plan & Disclosure Statement
TRANSWITCH: Nasdaq Approves Listing Transfer to National Market
TY COBB HEALTHCARE: Fitch Cuts $17.8-Million Bonds Rating to BB+
UNITED AIRLINES: US Bank Seeks Stay Relief to Control LA Deposit

UNITED AIRLINES: Terminating Employee Stock Ownership Plan
UPC POLSKA: S&P Drops Corp. Credit Rating to D Over Bankruptcy
UPC POLSKA: Wants Approval to Hire Baker & McKenzie as Counsel
VICWEST CORP: Creditors Will Vote on CCAA Plan on August 1
WACKENHUT CORRECTIONS: Completes 8-1/4% Sr. Unsec. Note Offering

WACKENHUT CORRECTIONS: Buys-Back Group 4 Falck Controlling Stake
WEIRTON STEEL: Secures Court Nod to Hire Procurement Specialty
WESTPOINT STEVENS: Court Approves BSI as Ballot & Notice Agent
WORLDCOM INC: Selling Douglas Lake Ranch for $68.5 Million
YAHOO! INC: Reports Improved Second Quarter Financial Results

* Ernst & Young Strikes Merger with Blair Crosson in B.C. Canada
* Kristin Going Joins Gardner Carton's Restructuring Practice
* Tracy Treger Joins Gardner Carton's Restructuring Practice
* Morgan Lewis Elects 17 Lawyers as New Partners

*BOOK REVIEW: Lost Prophets -- An Insider's History of the
               Modern Economists

                           *********

AIRNET COMMS: Receives Additional Nasdaq Listing Extension
----------------------------------------------------------
The Nasdaq Listing Qualifications Panel has granted AirNet
Communications Corporation (Nasdaq:ANCC) an additional extension
to regain $1.00 closing bid price compliance.

On or before August 15, 2003, AirNet must evidence a closing bid
price of at least $1.00 per share and, immediately thereafter, a
closing bid price of at least $1.00 per share for a minimum of ten
consecutive trading days.

In the event AirNet fails to comply with any of the terms of the
exception or if the Company falls out of compliance with other
requirements, its securities may be transferred to The Nasdaq
SmallCap Market provided the Company is able to evidence
compliance, as well as an ability to sustain compliance, with all
requirements for continued listing on that Market. Otherwise,
AirNet's securities will be delisted from The Nasdaq Stock Market.

The Panel determined that an additional short extension was
merited given the Company appears to have diligently pursued its
plan on compliance as presented to the Panel. The Company
requested the extension from July 31, 2003 to August 15, 2003 in
order to give its shareholders sufficient time to consider all
proposals at the upcoming shareholders meeting.

The Company announced that it plans to hold its annual meeting of
stockholders in Melbourne, Florida at the Rialto Hilton on Friday,
August 8, 2003 at 10:00 A.M.

With regard to the previously announced investment agreement for
$16M in Senior Secured Convertible Notes, AirNet also announced
that the investors have agreed to extend the closing until no
later than August 15, 2003.

AirNet Communications Corporation is a leader in wireless base
stations and other telecommunications equipment that allow service
operators to cost effectively and simultaneously offer high-speed
data and voice services to mobile subscribers. AirNet's patented
broadband, software-defined AdaptaCell(R) base station solution
provides a high capacity base station with a software upgrade path
to high speed data. The Company's Digital AirSite(R) Backhaul
Free(TM) base station carries wireless voice and data signals back
to the wireline network, eliminating the need for a physical
backhaul link, thus reducing operating costs. AirNet has 69
patents issued or pending. More information about AirNet may be
obtained by visiting the AirNet Web site at
http://www.airnetcom.com

                           *    *    *

              Liquidity and Going Concern Uncertainty

In its Form 10-K filed on April 1, 2003, the Company stated:

"The [Company's] financial statements have been prepared on a
going concern basis, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course
of business; and, as a consequence, the financial statements do
not include any adjustments relating to the recoverability and
classification of recorded asset amounts or the amounts and
classifications of liabilities that might be necessary should we
be unable to continue as a going concern. We have experienced
net operating losses and negative cash flows since inception
and, as of December 31, 2002, we had an accumulated deficit of
$225.4 million. Cash used in operations for the years ended
December 31, 2002 and 2001 was $1.1 million and $48.2 million,
respectively. We expect to have an operating loss in 2003. At
December 31, 2002, our principal source of liquidity was $3.2
million of cash and cash equivalents. Such conditions raise
substantial doubt that we will be able to continue as a going
concern without receiving additional funding. As of March 28,
2003 our cash balance was $3.7 million, after the draw of $4.8
million against our Bridge Loan for interim funding. The amounts
drawn against the bridge loan are due and payable on May 24,
2003. In addition, on the same date we had a revenue backlog of
$5.3 million. Our current 2003 operating plan projects that cash
available from planned revenue combined with the $3.7 million on
hand at March 28, 2003 will not be adequate to defer the
requirement for additional funding. We are currently negotiating
additional financing of $16 million with two Investors, which if
successful, (a portion will be used to pay off the bridge loan)
would provide the capital we require to continue operations.
There can be no assurances that the proposed financing can be
finalized on terms acceptable to us, if at all, or that the
funding negotiated will be adequate to sustain operations
through 2003.

"Our future results of operations involve a number of
significant risks and uncertainties. The worldwide market for
telecommunications products such as those sold by us has seen
dramatic reductions in demand as compared to the late 1990's and
2000. It is uncertain as to when or whether market conditions
will improve. We have been negatively impacted by this reduction
in global demand and by our weak balance sheet. Other factors
that could affect our future operating results and cause actual
results to vary from expectations include, but are not limited
to, ability to raise capital, dependence on key personnel,
dependence on a limited number of customers (with one customer
accounting for 49% of the revenue for 2002), ability to design
new products, the erosion of product prices, ability to overcome
deployment and installation challenges in developing countries
which may include political and civil risks and risks relating
to environmental conditions, product obsolescence, ability to
generate consistent sales, ability to finance research and
development, government regulation, technological innovations
and acceptance, competition, reliance on certain vendors and
credit risks. Our ultimate ability to continue as a going
concern for a reasonable period of time will depend on our
increasing our revenues and/or reducing our expenses and
securing enough additional funding to enable us to reach
profitability. Our historical sales results and our current
backlog do not give us sufficient visibility or predictability
to indicate when the required higher sales levels might be
achieved, if at all. Additional funding will be required prior
to reaching profitability. To obtain additional funding, we have
entered into discussions with SCP II and TECORE concerning a
proposed financing of $16,000,000 discussed below. No assurances
can be given that either the proposed financing or additional
equity or debt financing will be arranged on terms acceptable to
us, if at all.

"If we are unable to finalize the proposed financing, we will
have to seek additional funding or dramatically reduce our
expenditures and it is likely that we will be required to
discontinue operations. It is unlikely that we will achieve
profitable operations in the near term and therefore it is
likely our operations will continue to consume cash in the
foreseeable future. We have limited cash resources and therefore
we must reduce our negative cash flows in the near term to
continue operations. There can be no assurances that we will
succeed in achieving our goals or finalize the proposed
financing, and failure to do so in the near term will have a
material adverse effect on our business, prospects, financial
condition and operating results and our ability to continue as a
going concern. As a consequence, we may be forced to seek
protection under the bankruptcy laws. In that event, it is
unclear whether we could successfully reorganize our capital
structure and operations, or whether we could realize sufficient
value for our assets to satisfy fully our debts. Accordingly,
should we file for bankruptcy there is no assurance that our
stockholders would receive any value.

"Prior to our initial public offering in December 1999, which
raised net proceeds of $80.4 million, we funded our operations
primarily through the private sales of equity securities and
through capital equipment leases. At December 31, 2002, our
principal source of liquidity was $3.2 million of cash and cash
equivalents.

"On May 16, 2001, we issued and sold 955,414 shares of preferred
stock to three existing stockholders, SCP Private Equity
Partners II, L.P., Tandem PCS Investments, LP and Mellon
Ventures LP, at $31.40 per share for a total face value of $30
million. The preferred stock is redeemable at any time after May
31, 2006 out of funds legally available for such purposes and
initially each share of preferred stock is convertible, at any
time, into ten shares of our common stock. Dividends accrue to
the preferred stockholders, whether or not declared, at 8%
cumulatively per annum. The preferred stockholders are entitled
to votes equal to the number of shares of common stock into
which each share of preferred stock converts and collectively to
designate two members of the Board of Directors. Upon
liquidation of the Company, or if a majority of the preferred
stockholders agree to treat a change in control or a sale of all
or substantially all of our assets (with certain exceptions) as
a liquidation, the preferred stockholders are entitled to 200%
of their initial purchase price plus accrued but unpaid
dividends before any payments to any other stockholders. In
association with this preferred stock investment, we issued
immediately exercisable warrants to purchase 2,866,242 shares of
our common stock for $3.14 per share, which expire on May 14,
2011. The proceeds from the sale of the preferred stock were
used to fund our operations from May 2001 into 2002. Effective
October 31, 2002, the preferred stockholders irrevocably and
permanently waived the right of optional redemption applicable
to the Series B Preferred Stock as set forth in the Certificate
of Designation and the right to treat a specific proposed "Sale
of the Corporation" as a "Liquidation Event," to the extent that
such treatment would entitle the Series B Holders to receive
their "Liquidation Amount" per share in a form different from
the consideration to be paid to holders of our common stock in
connection with such Sale of the Corporation.

"On January 24, 2003, we entered into a Bridge Loan Agreement
with SCP II, an affiliate of our Chairman, James W. Brown, and
TECORE, Inc., our largest customer based on revenues during the
fiscal year ended December 31, 2002, and a supplier of switching
equipment to us. We issued two Bridge Loan Promissory Notes
under the Bridge Loan Agreement, each in a principal amount of
$3.0 million. The Bridge Notes carry an interest rate of two
percent over the prime rate published in The Wall Street Journal
and become due and payable on May 24, 2003. The Bridge Loan
Agreement provides that the Bridge Notes are secured by a
security interest in all of our assets including, without
limitation, our intellectual property. To date, we have received
advances totaling $4.8 million under the Bridge Notes. We are
currently negotiating a definitive funding agreement, under
which SCP II and TECORE would provide us financing of $16.0
million in the form of secured notes convertible into our common
stock. The proceeds of this proposed financing would be used to
refund the advances under the Bridge Loan Agreement and to fund
our operations."


ALASKA AIR: Will Publish Second Quarter 2003 Results on July 22
---------------------------------------------------------------
Alaska Air Group, Inc. (NYSE:ALK) the parent company of Alaska
Airlines, Inc. and Horizon Air Industries, Inc., will announce its
second quarter 2003 financial results on Tuesday, July 22, 2003.
Interested parties may listen to the company's earnings release
conference call at 8:30 a.m. PT via webcast at
http://www.alaskaair.com

As reported in Troubled Company Reporter's March 21, 2003 edition,
Standard & Poor's Ratings Services assigned its 'B+' rating to
Alaska Air Group Inc.'s $150 million floating rate senior
convertible notes due 2023. The issue is a Rule 144A private
placement with registration rights. Standard & Poor's placed the
rating on these notes on CreditWatch with negative implications.

Standard & Poor's existing ratings on Alaska Air Group and
subsidiary Alaska Airlines Inc., including the 'BB' corporate
credit rating, remain on CreditWatch with negative implications,
where they were placed on March 18, 2003.

The CreditWatch listing reflects risks relating to an apparently
imminent attack by the U.S. and its allies against Iraq. The
CreditWatch listing is part of a broader industry review that
covers nine U.S. and three European passenger airlines, already
battered by the effects of the Sept. 11, 2001, attacks and their
aftermath, now face further financial damage from a war," said
Standard & Poor's credit analyst Betsy Snyder. "The airlines
have already been hurt by high fuel prices and the depressing
effect of uncertainty on business activity," the credit analyst
continued.


ALLEGHENY TECH.: Will Webcast Q2 Conference Call on July 23
-----------------------------------------------------------
Allegheny Technologies (NYSE:ATI) will provide live Internet
listening access to its conference call with investors and
analysts scheduled for July 23, 2003 at 1 p.m. ET. The conference
call will be conducted after the Company's planned release of
second quarter 2003 earnings. The conference call will be
broadcast at http://www.alleghenytechnologies.com To access the
broadcast, select "Second Quarter Conference Call". In addition,
the conference call will be available through CCBN.com. The
conference call will be available on both Web sites for 30 days.

Allegheny Technologies Incorporated (NYSE:ATI) is one of the
largest and most diversified specialty materials producers in the
world with revenues of approximately $1.9 billion in 2002. The
Company has approximately 9,650 employees world-wide and its
talented people use innovative technologies to offer growing
global markets a wide range of specialty materials. High-value
products include nickel-based and cobalt-based alloys and
superalloys, titanium and titanium alloys, specialty steels, super
stainless steel, exotic alloys, which include zirconium, hafnium
and niobium, tungsten materials, and highly engineered strip and
Precision Rolled Strip(R) products. In addition, we produce
commodity specialty materials such as stainless steel sheet and
plate, silicon and tool steels, and forgings and castings. The
Allegheny Technologies Web site can be found at
http://www.alleghenytechnologies.com

As reported in Troubled Company Reporter's June 26, 2003 edition,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Allegheny Technologies Inc., out of investment grade to
'BB+' from 'BBB' based on ongoing weak financial performance. The
current outlook is stable.

At the same time, Standard & Poor's lowered Allegheny's senior
unsecured debt rating to 'BB', one notch below the corporate
credit rating, from 'BBB', reflecting its disadvantaged position
in the capital structure due to the company's new $325 million
senior secured revolving bank credit facility. In addition, all
ratings were removed from CreditWatch, where they were placed on
April 15, 2003, with negative implications.


AMERALIA INC: Extends Short-Term Financing Due Date to July 31
--------------------------------------------------------------
On February 20, 2003, AmerAlia, Inc., through its indirect,
wholly-owned subsidiary, Natural Soda, Inc. (formerly named
"Natural Soda AALA, Inc."), purchased the assets of White River
Nahcolite Minerals Ltd. Liability Co., and certain related
contracts held by IMC Chemicals Inc. with short-term financing
provided by funds associated with The Sentient Group of Grand
Cayman.  Natural Soda, Inc., is owned by Natural Soda Holdings,
Inc. (formerly "Natural Soda, Inc."). AmerAlia owns 100% of the
outstanding stock of Natural Soda Holdings, Inc. White River
Nahcolite Minerals is an indirect, wholly-owned subsidiary of IMC
Global, Inc.  IMC Chemicals is a subsidiary of IMC.

The original terms of the short-term financing required repayment
on March 24, 2003, however, the parties extended the repayment
date to April 17, 2003, then to May 31, 2003, and then again until
June 30, 2003. Certain of the conditions precedent have not been
met and the parties have agreed to extend the due date of the
short-term financing until July 31, 2003.


AMERCO: Wants Blessing to Hire Ordinary Course Professionals
------------------------------------------------------------
AMERCO, pursuant to Sections 105(a), 327 and 331 of the Bankruptcy
Code, seeks the Court's authority to retain professionals it
utilized in the ordinary course of business and to compensate
these professionals for postpetition services without the need for
additional Court approval, subject to certain limitations.

Bruce T. Beesley, Esq., at Beesley, Peck & Matteoni, Ltd., in
Reno, Nevada, relates that AMERCO customarily retains the services
of various attorneys, accountants and other professionals to
represent it in matters arising in the ordinary course of business
and not in this bankruptcy proceeding.  Among them are:

     Amembal, Deane & Associates      Legal Services
     Gasparri and Associates          Legal Services
     Milbank Tweed Hadley & McCloy    Legal Services
     Seward and Kissel                Legal Services

Mr. Beesley notes that AMERCO may retain additional Ordinary
Course Professionals from time to time, as required in the
ordinary course of business.

AMERCO desires to continue to employ and retain the Ordinary
Course Professionals to render services to the estate similar to
those rendered prior to the Petition Date.

Mr. Beesley contends that the request is warranted because:

     (a) it would be more costly and inefficient for AMERCO to
         submit individual applications to the Court for each
         Ordinary Course Professional;

     (b) while generally the Ordinary Course Professionals wish
         to represent AMERCO on an ongoing basis, many might be
         unwilling to do so if they may be paid only through a
         formal application process;

     (c) if the expertise and background knowledge of the Ordinary
         Course Professionals with respect to the particular areas
         and matters for which they were responsible before the
         Petition Date are lost, AMERCO's estate undoubtedly will
         incur additional and unnecessary expenses associated with
         the retention of other professionals that will lack the
         expertise and background knowledge.

AMERCO proposes that it be permitted to pay, without formal Court
application, 100% of the interim fees and disbursements to each
Ordinary Course Professional upon submission to AMERCO of an
appropriate invoice.  However, the interim fees and disbursements
per Ordinary Course Professional should not exceed a total of
$50,000 per month throughout this Chapter 11 case.

To the extend that the requested payments exceed $50,000 per
month, AMERCO proposes that the request for payment will become
subject to Court approval pursuant to Sections 330 and 331 of the
Bankruptcy Code.

Furthermore, AMERCO proposes that every 120 days, or at other
Court-ordered interval, AMERCO will file a statement with the
Court and serve this Statement to the U.S. Trustee, and any
official committee that include these information:

     (a) the name of the Ordinary Course Professional;

     (b) the aggregate amount paid as compensation for services
         rendered and reimbursement of expenses incurred during
         the previous 120 days; and

     (c) a general description of the services rendered by the
         Ordinary Course Professional.

Furthermore, AMERCO recognizes the importance of providing
information regarding each Ordinary Course Professional that is
an attorney to the Court and the U.S. Trustee.  Accordingly,
AMERCO proposes that each Ordinary Course Professional that is an
attorney be required to file with the Court and served to
AMERCO's counsel, any official committee's counsel, AMERCO's
postpetition lenders and the U.S. Trustee, a verified statement
under Rule 2014 of the Federal Rules of Bankruptcy Procedure
within 60 days of the order granting this request.

The U.S. Trustee, any creditors' committee appointed in this case
and the postpetition lenders will have 20 days after receipt of
the Verified Statement of each Ordinary Course Professional to
object to the retention of the Professional.  If any objection
cannot be resolved within 20 days, the matter will be scheduled
for hearing before the Court at the next regularly scheduled
hearing date or at an agreeable time for the Parties and the
Court. (AMERCO Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


ARVINMERITOR: Commences Cash Tender Offer for Dana Corp. Shares
---------------------------------------------------------------
ArvinMeritor, Inc., (NYSE: ARM) is commencing a cash tender offer
for all of the outstanding common shares of Dana Corporation
(NYSE: DCN) common stock for $15.00 net per share.  Following
completion of the tender offer, ArvinMeritor intends to consummate
a second step merger in which all remaining Dana shareholders will
receive the same cash price paid in the tender offer.

ArvinMeritor's offer represents a premium of 56% over Dana's
closing stock price on June 3, 2003, the last trading day before
ArvinMeritor submitted its first proposal to Dana in writing, a
premium of 39% over Dana's average closing stock price for the
last 30 trading days, and a premium of 25% over Dana's closing
stock price on July 7, 2003, the last trading day before
ArvinMeritor publicly announced its intention to commence a tender
offer.

The proposed transaction has a total equity value of approximately
$2.2 billion assuming 148.6 million shares of Dana outstanding.
In addition, Dana has net debt and minority interests of
approximately $2.2 billion, accounting for Dana Credit Corporation
on an equity basis, bringing the total enterprise value to
approximately $4.4 billion.  The transaction is anticipated to be
significantly accretive to ArvinMeritor's earnings per share in
the first year after the transaction closes.

The tender offer and withdrawal rights are scheduled to expire at
5:00 p.m., on August 28, 2003, unless extended.

ArvinMeritor currently owns 1,085,300 shares of Dana's common
stock.

The Company noted that the offer will be conditioned upon, among
other things, acceptance by more than two-thirds of Dana's shares,
the removal of Dana's poison pill, receipt of necessary regulatory
approvals, obtaining necessary financing and other customary
conditions.  The complete terms and conditions will be set forth
in the Offer to Purchase, which will be filed with the Securities
and Exchange Commission and mailed to Dana's shareowners.

UBS Investment Bank is acting as financial advisor and dealer
manager, Gibson, Dunn & Crutcher LLP is acting as legal counsel
and MacKenzie Partners, Inc. is acting as information agent for
ArvinMeritor's offer.

ArvinMeritor, Inc. is a premier $7-billion global supplier of a
broad range of integrated systems, modules and components to the
motor vehicle industry.  The company serves light vehicle,
commercial truck, trailer and specialty original equipment
manufacturers and related aftermarkets.  In addition, ArvinMeritor
is a leader in coil coating applications.  The company is
headquartered in Troy, MI, and employs 32,000 people at more than
150 manufacturing facilities in 27 countries.  ArvinMeritor's
common stock is traded on the New York Stock Exchange under the
ticker symbol ARM.  For more information, visit the company's Web
site at: http://www.ArvinMeritor.com

As reported in Troubled Company Reporter's Thursday Edition,
Standard & Poor's Ratings Service placed its 'BB+' corporate
credit and senior unsecured debt ratings on ArvinMeritor Inc. on
CreditWatch with negative implications. In addition, Standard &
Poor's placed its 'BB' corporate credit and senior unsecured debt
ratings on Dana Corp., on CreditWatch with negative implications.

Fitch Ratings also downgraded the ratings of ArvinMeritor Inc.'s
senior unsecured debt to 'BB+' from 'BBB-' and capital securities
to 'BB-' from 'BB+' and placed the Ratings on Watch Negative. The
downgrade reflects ARM's intent to acquire growth through debt
financed acquisitions and a willingness to substantially raise the
leverage in its capital structure. If the transaction is completed
on the proposed terms, further rating action is expected. New
financing for the transaction is likely to be on a secured basis,
further impairing unsecured debt holders. The ratings have been
placed on Rating Watch Negative.


ASIA GLOBAL CROSSING: Robert Geltzer Appointed as Ch. 7 Trustee
---------------------------------------------------------------
The United States Trustee for Region 2, Carolyn S. Schwartz, has
appointed Robert Geltzer as the Interim Chapter 7 Trustee for the
Asia Global Crossing Debtors pursuant to Section 701(a) of the
Bankruptcy Code. If no trustee is elected, Mr. Geltzer will serve
as the Trustee by operation of law.  Mr. Geltzer is authorized to
operate the business of the estates in accordance with the
Bankruptcy Code. His address is Tendler Biggins & Geltzer, 1556
Third Avenue, Suite 505, New York, New York 10128, telephone (212)
410-0100 fax (212) 410-0400. (Global Crossing Bankruptcy News,
Issue No. 43; Bankruptcy Creditors' Service, Inc., 609/392-0900)


AVALON DIGITAL: Completes Sale of Certain Assets to Silverpop
-------------------------------------------------------------
Avalon Digital Marketing Systems, Inc., (Nasdaq: AVLN) has
completed the previously-announced sale of certain assets to
Silverpop Systems, Inc., a privately-held email marketing firm
headquartered in Atlanta, Georgia. The assets sold are primarily
related to email marketing services provided to large enterprise
clients from the company's California operations. Proceeds from
the sale were used to pay secured creditors and release liens
related to the assets. Silverpop also assumed certain liabilities
related to the assets transferred.

Post-closing, Avalon will focus its business on providing digital
marketing software and services to small business customers from
consolidated operations based in Utah. Historically, the small
business channel has represented a majority of revenues for
Avalon. However, market conditions and cash constraints have
forced the company to sell certain assets to satisfy creditors and
to consolidate operations. The company cautions that after the
asset sale that it will still face a significant negative working
capital position, and that it will require near-term financing and
additional restructuring to satisfy other liabilities.

Avalon Digital Marketing Systems Inc., with headquarters in Utah
and offices in Hong Kong, provides digital messaging software and
services that automate and enhance sales and marketing
communications for small and medium enterprises. Avalon's
technologies and services allow its customers to create, manage,
deliver and track rich media email marketing campaigns as well as
individual 1-to-1 communications.

                          *     *     *

                 "We Need Additional Financing"

In its Form 10-Q filed for the period ended December 31, 2002,
Avalon Digital reported:

"Our liquidity is significantly impacted by credit and collections
issues. Our Small Business channel has generated large balances of
receivables and, depending on the quality of the credit and cash
needs, we sell certain of the receivables, at a discount, to
financing sources. Receivables that have not been sold are
retained and billing and collecting administration have been
outsourced. A large portion of the Small Business customers have
historically had sub-prime credit. Accordingly, many of the
receivables generated by these customers may have high credit
risk.

"At December 31, 2002, our cash position required that we actively
seek additional capital. As of December 31, 2002, we had current
assets of approximately $2.4 million and current liabilities of
approximately $10.8 million. This represents a working capital
deficit of approximately $8.4 million. The negative working
capital balance includes as current liabilities approximately $1.3
of deferred revenues and is mitigated by approximately $0.8
million in net contracts receivables included in long-term assets.

"The Company's line of credit facility with Zions Bank includes
covenants for tangible net worth and debt coverage ratios.  As
of December 31, 2002, the balance on the line was  $247,822, and
the Company was in violation of these covenants, and has sought
waivers. As of the date hereof, the bank has not waived the
violations, and if it were to demand payment of the entire
balance, the Company's liquidity would suffer. In January 2003,
in exchange for an advance of $250,000 on the line, the Company
designated  a recurring revenue stream in the amount of
approximately $40,000 per month for repayment of the outstanding
balance on the line.

"The $250,000 principal payment due to Radical Communication,
Inc., on October 1, 2002 has not been made, and in February 2003,
$50,000 of the past due amount was converted into common stock at
$4 per share. We are seeking an extension or conversion into
equity of some or all of the balance.

"We have $820,000 of convertible notes payable that were due on
November 21, 2002. The notes were convertible into common stock
at the options of the holders, for the lower of $8.70 or the
price of a private placement of our common stock, but not
converted. In November 2002, the note holders agreed to amend
the repayment terms of the notes to increase the interest rate
to 14%, lower the conversion price to $3 per share, establish
payment terms calling for six equal monthly principal payments
beginning in January 2003 through June 2003. In January 2003,
$130,667 of the notes were converted into 43,570 shares of
common stock. As of February 10, 2003, the balance of the January
payment that was not converted into common stock amounted to
$50,107 and had not been paid.

"In February 2003, a group of investors led by East-West Capital
Associates, Inc., and its affiliate, East West Venture Group,
LLC agreed to fund the $175,000 remainder of its $3 million
obligation to purchase our common stock at $4 per share, by
providing $25,000 in cash and $150,000 through the conversion of
a portion of the note payable to Radical Communication, Inc.
into common stock on the same terms. In addition, the February
2003 amendment to the stock purchase agreement terminated the
remaining financing commitment of $800,000 in exchange for a
cash investment of $200,000 in the Company by East-West Capital
in the form of a convertible secured debenture, bearing interest
at 10% per annum, and maturing on the earlier of 120 days from
the funding date or the closing of a financing for at least an
additional $500,000 or more of equity or debt. The debenture may
be converted at the option of the holder at the lesser of (i)
$1.375 per share or (ii) the same terms and conditions as a
proposed new equity financing by the Company. The Company also
agreed to reprice previous warrants issued to East-West Capital
and its affiliates to $2.00 per share. East-West Capital agreed
to eliminate the protective provisions of the related investor
rights agreement and provide active assistance to the Company in
its proposed new equity financing efforts. To date, East-West
Capital has otherwise satisfied all of their original financing
commitments to the Company.

"Since the closing of the reverse acquisition of MindArrow, the
Company has taken steps to reduce monthly cash operating expenses
and identify new sources of revenue. We are currently seeking
additional debt and equity financing and are currently evaluating
proposals from investors under those terms. However, no binding
agreements have been signed and there is no certainty that terms
acceptable to the Company and investors can be reached.

"The accompanying consolidated financial statements have been
prepared in conformity with accounting principles generally
accepted in the United States of America, which contemplate
continuation of the company as a going concern.

"In our view, recoverability of a major portion of the recorded
asset amounts shown in the accompanying balance sheet is dependent
upon our continued operations, which in turn is dependent upon our
ability to meet obligations on a continuing basis. The
consolidated financial statements do not include any adjustments
relating to the recoverability and classification of recorded
asset amounts or amounts and classification of liabilities that
might be necessary should we be unable to continue in existence."


BANKUNITED: Preferreds Redeemed & Fitch Withdraws Rating
--------------------------------------------------------
Fitch Ratings is withdrawing its rating on BankUnited Capital
III's 9.0% Cumulative Trust Preferred Securities which have been
redeemed, in full, by Bank United Financial Corporation.
Rating Withdrawn:

      BankUnited Capital III -- Trust Preferred Stock 'BB'.


BASIS100 INC: Robert J. Smith Resigns as Chief Financial Officer
----------------------------------------------------------------
Basis100 Inc. (TSX: BAS), a business service provider for the
mortgage lending marketplace, announced the resignation of Robert
J. Smith as the company's Chief Financial Officer. Smith has
accepted a senior-level position with his former employer, Cendant
Mortgage. Brian Thompson, Basis100's controller, will serve as the
interim CFO until a new one can be appointed.

"It is with great sadness that I have accepted Bob's resignation,"
said Joseph J. Murin, President and CEO of Basis100. "His guidance
and leadership have played a pivotal role in the creation of
Basis100's new strategic direction. On behalf of the entire
Basis100 team, I'd like to thank Bob for his contributions to the
company and wish him the best of luck in his new position."

Smith joined Basis100 in April 2002 as President of U.S.
Operations and was promoted to the role of CFO in January 2003.
During his tenure, he facilitated the successful restructuring of
the company's U.S. operations; consolidated the operations and
support center to Jacksonville, Fla.; helped launch the company's
new strategic initiative that focuses on the U.S. mortgage lending
marketplace; and directed the sale of the company's Canadian
Lending Solutions division.

Smith will be actively involved in the recruitment of the
company's new Chief Financial Officer and will remain on staff
until the end of July to ensure the smooth transition of his
current responsibilities to Brian Thompson.

Thompson has held a variety of finance positions prior to joining
Basis100. He served as Vice President, Finance and Accounting at
National Auto Finance, and has held senior positions with Barnett
Banks, Deloitte & Touche and Beneficial of Florida. Brian
graduated from Florida State University in 1984 with a Bachelor of
Science degree in Finance. He is also a certified public
accountant.

"Although I'm excited about the challenges that lie ahead for me,
it's difficult to leave Basis100," added Smith. "I have thoroughly
enjoyed working for such a dynamic company and wish my colleagues
continued success in executing the company's U.S. strategy."

Basis100 (TSX:BAS), whose March 31, 2003 balance sheet shows a
working capital deficit of about CDN$5 million, is a business
solutions provider that fuses mortgage processing knowledge and
experience with proprietary technology to deliver exceptional
services. The company's delivery platform defines industry-class
best execution strategies that streamline processes and creates
new value in the mortgage lending markets. For more information
about Basis100, visit http://www.Basis100.com


BAUSCH & LOMB: Will Host Investor Conference Call on July 24
------------------------------------------------------------
Bausch & Lomb (NYSE: BOL) will host an investor conference call on
Thursday, July 24, at 10:00 a.m. Eastern time to discuss the
Company's 2003 second-quarter results.  The conference call will
be available by telephone and audio webcast.

-- By telephone - dial 913-981-5507 between 9:50 a.m. and
    10:00 a.m.;

-- By webcast - log on to http://www.Vcall.comor to the Investor
    Relations page of the Company's Web site http://www.Bausch.com

The investor conference call will be available by telephone
rebroadcast beginning at 1:30 p.m. Eastern time on July 24,
through midnight, Monday, July 28. The call-in number to listen to
the replay is 719-457-0820; the confirmation code is 410034.

A news release outlining the quarterly results will be issued by
8:00 a.m. Eastern time on July 24 on Business Wire and posted on
the Company's Web site: http://www.Bausch.com

Bausch & Lomb (Moody's, Ba1 Senior Notes Rating) is the eye health
company, dedicated to perfecting vision and enhancing life for
consumers around the world. Its core businesses include soft and
rigid gas permeable contact lenses and lens care products, and
ophthalmic surgical and pharmaceutical products. The Bausch & Lomb
name is one of the best known and most respected healthcare brands
in the world. Celebrating its 150th anniversary in 2003, the
Company is headquartered in Rochester, New York. Bausch & Lomb's
2002 revenues were $1.8 billion; it employs approximately 11,500
people worldwide and its products are available in more than 100
countries. More information about the Company can be found on the
Bausch & Lomb Web site at http://www.bausch.com


BIOSPECIFICS TECH.: Cash Resources Insufficient to Fund Ops.
------------------------------------------------------------
Biospecifics Technologies Corporation has been engaged in the
business of producing and licensing for sale a fermentation
derived enzyme named Collagenase ABC, approved by the U.S. Food
and Drug Administration for debriding chronic dermal ulcers and
severely burned areas (the "topical ointment business"). The
Company is also researching and developing additional products
derived from this enzyme for potential use as pharmaceuticals.

As of January 2003 the Company had limited cash resources
available to fund its operations. Over the past few months,
Biospecifics has been able to fund its operations only because (1)
the Company borrowed $100,000 from an unaffiliated individual and
an aggregate of $500,000 on seven separate occasions from an
individual who is a principal of Bio Partners LP, a private
investment group and unrelated third party, (2) the Company
received from Abbott Laboratories, its major U.S. customer, in May
2003, early payment of royalties earned from distribution of
Santyl(R) ointment from a supply that Biospecifics estimates will
be depleted by July 30, 2003, (3) Biospecifics Chairman has
deferred salary of approximately $100,000 since February 1, 2003
and in February and April repaid a total of $50,000 of the
$1,025,309 principal amount he and his affiliate owed to the
Company as of January 31, 2003, and (4) Biospecifics is deferring
or making partial payments to creditors.

On June 19, 2003, the Company entered into a financing transaction
with Bio Partners LP, a private investor group, under which the
Company sold to Bio Partners, in a private placement, I) a $1.575
million convertible note, issued at face value, and (II) 295,312
shares of Company common stock, issued at par value, or $.001 per
share.  The net proceeds to the Company were approximately
$890,000, after the payment of expenses and repayment of $500,000
previously advanced to the Company by a principal of Bio Partners.
Based on Biospecifics operating projections, the Company believes
these funds will enable it to continue operations to December 31,
2003.

The Company's projections assume that, among other things:

       -  The Company obtain FDA approval of its production
          facilities by August 2003;

       -  It is determined that the Company can sell its quarantine
          inventory (inventory produced at the renovated Curacao
          manufacturing facility, its primary manufacturing
          facility) in the United States;

       -  Its Chairman repays to the Company $325,000 of the amount
          he and his affiliate owe the Company by the end of July
          2003.  Biospecifics Chairman has indicated that he
          intends to refinance the mortgage on Biospecifics
          administrative headquarters in Lynbrook, New York, which
          is owned by the affiliate of Biospecifics Chairman, and
          use the proceeds of the refinancing to repay this
          $325,000 to the Company; and

       -  The Company receives a tax refund of $425,000 in August
          2003.

There is no assurance that any of these events will occur.  If any
of the assumptions on which the Company projections are based do
not occur, the Company may not be able to fund its operations past
the next several months.  In addition, the Company cannot assure
that it will be able to obtain any additional financing on
acceptable terms, or at all.  The Company is also in negotiations
to license its injectable collagenase product under development
for up-front license fees and milestone payments.  The Company's
projections do not assume this transaction.


BREAKWATER RESOURCES: Reduces Term Credit Loan by $5 Million
------------------------------------------------------------
Breakwater Resources Ltd., has made a principal prepayment of
US$5.0 million of its US$22.6 million Term Credit Facility. The
payment brings the outstanding balances on Breakwater's Term
Credit Facility and Supplemental Term Facility to US$17.6 million
and US$6.5 million respectively. The payment was made from a
portion of the proceeds from the sale of Breakwater's interests in
the Tonawanda and Lapa properties, as previously announced.

Breakwater Resources Ltd. is a mineral resource company engaged in
the acquisition, exploration, development and mining of base metal
and precious metal deposits in the Americas and North Africa.
Breakwater has four producing zinc mines: the Bouchard-Hebert mine
in Quebec, Canada; the Bougrine mine in Tunisia; the El Mochito
mine in Honduras; and the El Toqui mine in Chile.

                               *   *   *

                            Liquidity Risk

In the company's recent Sedar filing, it was reported that the
price of zinc is currently at a 15-year low in absolute terms and
in real terms at its lowest levels since the 1930's, and has
declined steadily to this level since the latter months of 2000.
The Company is unable to withstand continued low metal prices for
an extended period without the ability to source cash required
from sources other than operating cash flow. Recent debt financing
combined with the rights offering have supported the operations
during 2002. Going forward into 2003, a zinc price in excess of
US$800 is required to support operations to the end of the year.
In the event that the price of zinc does not exceed this level,
the Company will be required to find an alternative source of
financing. There is no certainty that an alternative source of
financing will be available to the Company.

World events, including the threat of war and bankruptcies of
several major companies, have put serious stress on the ability
of insurers to continue to provide support as they have in the
past. The surety market is shrinking and, as a result, the
availability of environmental bonding is being threatened. It is
not unlikely that some or all of the Company's environmental
bonds, which amount to approximately $13.0 million, may be
withdrawn or that the Company may be required to provide
security in the form of cash or letters of credit which would
use a significant portion of available credit lines. Provision
for such an event has not been included in the forecast for the
year. In the event that the bonds are cancelled and the Company
is unable to post adequate security, the Company could be in
default under the Syndicated Credit Facility. The Lenders are
secured with all of the assets of the Company and, in the event
of default, could realize on their security. Management is
pursuing alternative solutions to protect the assets in the
event that the bonds are cancelled. At this time there is no
assurance that such alternatives will be available.


CABLEVISION SYSTEMS: S&P Places Low-B Ratings on Watch Negative
---------------------------------------------------------------
Standard & Poor's Ratings Services placed the ratings on Bethpage,
New York-based cable operator Cablevision Systems Corp. and
related entities on CreditWatch with negative implications,
including the 'BB' corporate credit rating on the company.

At March 31, 2003, Cablevision's total debt outstanding was $6.4
billion, excluding collateralized indebtedness of $1.6 billion.
The company's preferred stock totaled another $1.6 billion.

The CreditWatch placement follows the company's Form 8K filing, in
which it revealed that it has received a formal order of
investigation from the Securities and Exchange Commission, as well
as a subpoena in connection with the order. This investigation
follows Cablevision's own recently reported internal investigation
of improper expense accruals at American Movie Classics Co., which
was disclosed by the company in June.

"While the magnitude of the discrepancies reported by Cablevision
does not appear to be material, Standard & Poor's cannot currently
quantify the potential impact of the formal SEC investigation at
this time," said credit analyst Catherine Cosentino. "Nor can
Standard & Poor's predict whether the review will extend beyond
the issues already raised by Cablevision or say what ramifications
an expanded review would have for Cablevision's business
prospects."

Standard & Poor's will continue to monitor the progress of the
investigation to try to gain additional clarity on what the review
means for Cablevision's financial and business prospects. One of
the events that will be monitored is the impact of the
investigation on the company's ability to complete the spin-off of
its satellite business later this year. However, there may not be
sufficient clarification to resolve the CreditWatch for an
extended period.


C-BASS CBO: Low-B Ratings Assigned to Class E Notes & Preferreds
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to C-BASS CBO VII Ltd./C-BASS CBO VII Corp.'s $333 million
floating- and fixed-rate notes, and preference shares.

This presale report is based on information as of July 9, 2003.
The ratings shown are preliminary. This report does not constitute
a recommendation to buy, hold, or sell securities. Subsequent
information may result in the assignment of final ratings that
differ from the preliminary ratings.

      The preliminary ratings reflect:

      -- The expected commensurate level of credit support in the
         form of subordination to be provided by the notes junior
         to the respective classes and the preference shares and
         overcollateralization;

      -- The cash flow structure, which is subject to various
         stresses requested by Standard & Poor's;

      -- The experience of the collateral manager;

      -- The coverage of interest rate risks through hedge
         agreements; and

      -- The legal structure of the transaction, which includes the
         bankruptcy remoteness of the issuer.

                     PRELIMINARY RATINGS ASSIGNED

             C-BASS CBO VII Ltd./C-BASS CBO VII Corp.

         Class          Rating     Amount (mil. $)
         A              AAA                  262.5
         B              AA                    17.5
         C              A                     17.5
         D              BBB                   23.5
         E              BB                     8.0
         Pref shares    BB-                    4.0


CALL-NET ENTERPRISES: Will Publish Q2 2003 Results on July 30
-------------------------------------------------------------
Call-Net Enterprises Inc. (TSX: FON, FON.B) will be releasing its
second quarter results before the markets open on Wednesday, July
30, 2003. The Company will host a conference call for investors
and media at 1:00 p.m. (EDT) the same day. Bill Linton, president
and chief executive officer and Roy Graydon, executive vice
president and chief financial officer will participate in the
call.

To participate in the conference call, please dial 416-695-5259 or
1-877-461-2816. The confirmation number is T434297S. If you
require assistance during the conference call, you can reach an
operator by pressing "0". The call will also be audio webcast live
at http://www.callnet.caor by entering
http://www.newswire.ca/webcastin your web browser.

Instant replay will be available until August 15, 2003 by dialing
416-252-1143 or 1-866-518-1010 and the audio webcast will be
archived at http://www.callnet.ca

Call-Net Enterprises Inc. (S&P, B Corporate Credit Rating, Stable)
is a leading Canadian integrated communications solutions provider
of local and long distance voice services as well as data,
networking solutions and online services to households and
businesses. It provides services primarily through its wholly
owned subsidiary, Sprint Canada Inc. Call-Net Enterprises and
Sprint Canada are headquartered in Toronto and own and operate an
extensive national fibre network with over 134 co-locations in
nine Canadian metropolitan markets. For more information visit
http://www.callnet.caand http://www.sprint.ca


CHART INDUSTRIES: Wants More Time to File Schedules & Statements
----------------------------------------------------------------
Chart Industries, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to extend the time
period within which they must file their Schedules of Assets and
Liabilities and Statements of Financial Affairs, as required by 11
U.S.C. Sec. 521 and Rule 1007 of the Federal Rules of Bankruptcy
Procedure.  The Debtors tell the Court that they need until
September 6, 2003 to prepare and deliver these documents.

In order to prepare the Schedules, the Debtors are required to
gather information from books, records and documents stored in
various locations throughout the country and in several
international locations.  Collection of necessary information is
complicated by the fact that many prepetition invoices have not
yet been received or entered into the Debtors' accounting systems.

Additionally, the Debtors point out, they already have fully
negotiated the Plan with the Senior Lenders, and votes on the Plan
have been solicited from, and the Plan has been approved by, the
Senior Lenders -- who fall within the only class of creditors
entitled to vote on the Plan.

Chart Industries, Inc., holds its headquarters in Cleveland, Ohio.
The Debtors are suppliers of standard and custom-engineered
products and systems serving a wide variety of low-temperature and
cryogenic operations. The Company filed for chapter 11 protection
on July 8, 2003 (Bankr. Del. Case No. 03-12114).  Mark S. Chehi,
Esq., at Skadden, Arps, Slate, Meagher & Flom, represents the
Debtors in their restructuring efforts.  When the Company filed
for protection from its creditors, it listed $268,082,000 in total
assets and $361,228,000 in total debts.


CLAYTON HOMES: Brandywine Balks at Berkshire Hathaway's Offer
-------------------------------------------------------------
Brandywine Asset Management LLC of Wilmington, Delaware, opposes
the previously announced acquisition of Clayton Homes, Inc. (NYSE:
CMH) by Berkshire Hathaway (NYSE: BRK.A) for $12.50 per share in
cash.  Brandywine, which holds approximately 2.3 million shares of
Clayton Homes, intends to vote its shares against the transaction
at the special meeting of stockholders to be held on July 16,
2003.

Brandywine Asset Management was established in 1986 and, since
1998, is a wholly owned subsidiary of Legg Mason, Inc.  Brandywine
offers value-based equity, fixed income, balanced, U.S., non-U.S.
and global strategies to serve the investment needs of a broad
range of clients, including public funds, corporations,
educational institutions, Taft-Hartley plans, eleemosynary funds,
healthcare organizations, religious organizations and high net
worth individuals.

Clayton Homes, Inc. (Fitch, BB+ Senior Unsecured Rating, Positive)
is a vertically integrated manufactured housing company with 20
manufacturing plants, 296 Company owned stores, 611 independent
retailers, 86 manufactured housing communities, and financial
services operations that provide mortgage services for 168,000
customers and insurance protection for 100,000 families.


CNE GROUP: Reports Share Issuances Pursuant to SRC Merger Deal
--------------------------------------------------------------
On April 23, 2003, CNE Group, Inc.  acquired all of the
outstanding stock of SRC Technologies, Inc. and Econo-Comm, Inc.
by merging these companies into its wholly-owned subsidiaries.

CNE issued to Michael and Carol Gutowski, the principal
stockholders of SRC, an aggregate of 4,867,937 shares of its non-
voting Series C Preferred Stock and a like number of ten year
Class C Warrants, each to purchase one share of its common stock
at $1.00 per share. The Class C Warrants are not exercisable and
are not detachable from the C Preferred Stock prior to 66 months
after their issuance. CNE issued to the other common stockholders
of SRC, including Larry Reid, SRC's Chief Operating Officer, an
aggregate of 899,976 shares of its common stock, 1,697,961 shares
of its non-voting Series A Preferred Stock and a like number of
ten year Class A Warrants, each to purchase one share of its
common stock at $1.00 per share. The Class A Warrants are not
exercisable and are not detachable from the A Preferred Stock
prior to 66 months after their issuance. The Company issued an
aggregate of 440,000 shares of its Series B Preferred Stock to the
holders of the SRC Series B Preferred Stock. The A Preferred Stock
has an aggregate liquidating preference over all other CNE equity
of $1,697,961 and the B Preferred Stock has an aggregate
liquidating preference over all other CNE equity except the A
Preferred Stock of $440,000. The C Preferred Stock has no
liquidating preference.

CNE issued to Gary Eichsteadt and Thomas Sullivan, the
stockholders of ECI, an aggregate of 4,867,938 shares of its
Series C Preferred Stock and a like number of Class C Warrants. In
addition, Messrs. Eichsteadt and Sullivan retained certain of
ECI's trade receivables aggregating in the amount of approximately
$100,000. The Company also acquired a patent related to the
operation of ECI's business from Mr. Eichsteadt for four notes
each in the principal amount of $500,000(aggregating $2,000,000),
bearing interest at the annual rate of 8% payable quarterly and
due on October 31, 2008.

There were no relationships between CNE or any of its affiliates
and any of the sellers of the assets acquired by the Company prior
to the acquisition transactions. Messrs. Gutowski and Reid and Ms.
Gutowski became directors and Mr. Gutowski became President and
Mr. Reid became Executive Vice President of the Company
immediately subsequent to the consummation of the acquisitions.
Ms. Gutowski and Messrs. Eichsteadt and Sullivan became executive
officers, respectively, of the Company's subsidiaries that merged
with SRC and ECI.

On April 23, 2003, CNE also effected a private financing pursuant
to which it issued its notes in the aggregate principal amount of
$750,000, of which $650,000 was contributed by officers of the
Company, and 3,124,350 ten year Class B Warrants, each warrant to
purchase one share of its common stock at $0.50 per share. The
Notes bear interest at the annual rate of 10% payable quarterly
and are due on April 30, 2004. The Warrants are non-dilutive until
the Notes have been repaid. The due date of the Notes may be
extended at the Company's option for an additional year in
consideration for the issuance of 10 year cashless warrants to
purchase 5% of the Company's then outstanding common stock at
$0.50 per share. These Warrants will also be anti-dilutive until
the Notes have been repaid.

The Company is using the funds obtained from this financing to pay
certain ECI notes payable and for working capital. The financing
was effected pursuant to the exemption from the registration
provisions of the Securities Act of 1933 provided by Section 4(2)
thereof.

On April 17, 2003, pursuant to the terms of Section 251(g) of the
Delaware General Corporation Law, CareerEngine Network, Inc.
became a wholly-owned subsidiary of CNE Group, Inc. Pursuant to
this transaction the Company acquired all of the assets of
CareerEngine, all former stockholders of CareerEngine became the
stockholders of the Company, which is the entity that is now
publicly traded on the American and Pacific Stock Exchanges under
the symbol "CNE," and the officers and directors of CareerEngine
became the officers and directors of the Company.

As a successor entity to CareerEngine, the Company's shares are
deemed to be registered under Section 12(g) of the Securities
Exchange Act of 1934 and Rule 12g-3 promulgated thereunder. The
shares have been issued without registration in reliance upon
exemptions provided in Section 3(a)(9) of the Securities Act of
1933 and Rule 145 promulgated thereunder. CareerEngine has been
subject to the reporting requirements of the Exchange Act since
1986. The last report filed by CareerEngine was its Annual Report
on Form 10-KSB for the year ended December 31, 2002.

CNE Group, Inc.'s March 31, 2003 balance sheet shows a working
capital deficit of about $4 million, and a total shareholders'
equity deficit of about $4 million.

CNE Group (formerly CareerEngine Network) may just hook you up
with that dream job. The company operates a network of six portal
career Web sites -- ITClassifieds.com, FinancialPositions.com,
EngineeringClassifieds.com -- that allow employers to post job
openings and allow job seekers to post resumes. It also develops
and manages career sites for clients. This is the latest in a
series of incarnations for CNE Group, which operated in merchant
banking and real estate as the Helmstar Group and in bond dealing
as the Matthews & Wright Group. Chairman and president George
Benoit owns about 29% of the company, which was forced to relocate
from its World Trade Center headquarters following the 2001
terrorist attack.


CONSOLIDATED FREIGHTWAYS: Auctioning-Off Woodinville Facility
-------------------------------------------------------------
As part of the largest real estate sale in transportation history
-- 220 total properties with an appraised value over $400 million
-- Consolidated Freightways is placing its Woodinville
distribution facility located at 18707 139th Avenue N.E. for sale
to the highest bidder, through an open auction process scheduled
for July 17, 2003.

The Woodinville property is a 31-door cross-dock distribution
facility situated on 3.69 acres and has been closed to operations
since September 3, 2002, when the 74-year-old company filed for
bankruptcy protection. Since then CF has been liquidating the
assets of the corporation under orders of the bankruptcy court. 45
CF employees formerly worked at the Woodinville terminal.

A contract price of $1,600,000 has been established for the CF
property. Interested parties who would like to participate in the
July 17 bankruptcy auction should submit the form Request to be
Designated a Qualified Bidder at Auction. That form can be found
at http://www.cfterminals.com/Overbidder.htmland must be
submitted prior to the date of the auction. The indicated deposit
must also be received, via wire or certified check, prior to the
date of the auction.

To date, 100 CF properties throughout the U.S. have been sold for
$218 million. Potential bidders should direct any questions about
the property and the bidding procedures that cannot be answered at
the company's Web site http://www.cfterminals.comto
Transportation Property Company at 800/440-5155.


COVENTRY HEALTH: Acquiring Altius Health Plans for $41 Million
--------------------------------------------------------------
Coventry Health Care, Inc. (NYSE:CVH) has signed a definitive
agreement to acquire Altius Health Plans Inc.  Altius is a
privately-owned, Utah-based commercial-only health plan with total
membership of approximately 160,000 consisting of 116,000 risk and
44,000 non-risk members and annual revenues of approximately $235
million.

"I am pleased to announce another new market expansion," said
Allen F. Wise, President and Chief Executive Officer of Coventry.
"Earlier this year we completed the PersonalCare acquisition which
opened up the central Illinois market for us. With the Altius
acquisition, we are entering the Utah market with considerable
mass through a well-run local health plan. Our proven business
model will allow Coventry to continue to provide high quality
health care to the current members of Altius, while enhancing
service to employer and provider customers. We will continue to be
opportunistic in growing our company through acquisition, both in
existing and new markets, as well as growing through organic sales
efforts which have been yielding excellent results thus far in
2003."

Coventry will purchase the stock of Altius for up to $41.0 million
in cash, subject to certain balance sheet true-up and other
provisions. Included in the purchase price is approximately $6.5
million of current statutory net worth. The transaction is
expected to close late in the third quarter of 2003, subject to
closing conditions, regulatory and other customary approvals. The
transaction is expected to be $0.01 accretive to earnings in 2003
and $0.06 in 2004.

Coventry Health Care is a managed health care company based in
Bethesda, Maryland operating health plans, insurance companies,
and provider networks under the names Coventry Health Care,
Coventry Health and Life, Carelink Health Plans, Group Health
Plan, HealthAmerica, HealthAssurance, HealthCare USA,
PersonalCare, SouthCare, Southern Health and WellPath. The Company
provides a full range of managed care products and services
including HMO, PPO, POS, Medicare+Choice, Medicaid, and Network
Rental to 2.9 million members in a broad cross section of employer
and government-funded groups in 13 markets throughout the Midwest,
Mid-Atlantic and Southeast United States. More information is
available on the Internet at http://www.cvty.com

As reported in Troubled Company Reporter's July 9, 2003 edition,
Fitch Ratings withdrew its 'Bq' quantitative insurer financial
strength rating on Coventry Health Care of the Carolinas.


CROWN CASTLE: S&P Assigns CCC Rating to Convertible Senior Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC' rating to
the $230 million convertible senior notes issued by wireless tower
operator Crown Castle International Corp. Proceeds from this
public issuance, due 2010, were used to redeem the company's
10-5/8% senior discount notes due 2007.

Simultaneously, Standard & Poor's affirmed its 'B-' corporate
credit rating on the Houston, Texas-based Crown Castle.

The outlook remains negative. The company had total debt of about
$3.2 billion at March 31, 2003.

"While Standard & Poor's views the tower business as having some
favorable business characteristics, the rating is dominated by
concerns about Crown Castle's longer term liquidity prospects,"
said credit analyst Michael Tsao. These concerns stem from the
fact that two of the company's subsidiaries generating modest free
cash flow--Crown Castle UK Ltd. and Crown Castle Atlantic Holding
Co. LLC--cannot upstream cash to the parent and other subsidiaries
(which together make up the restricted group).

Crown Castle has used substantial debt in the past several years
to acquire and build towers, anticipating steep growth in cash
flows. However, this growth did not materialize because wireless
carrier customers made cutbacks in capital expenditures after
facing their own capital constraints and sooner-than-expected
flattening of demand growth for services. The situation left Crown
Castle aggressively leveraged at about 8.5x on a consolidated
basis (and about 14.7x at the restricted group). At the end of
March 2003, the restricted group had access to about $409 million
of cash and $125 million in bank availability.

The restricted group is not projected to generate free cash flows
on a sustainable basis in the next two to three years. This is
based on assumptions of its mid-single-digit revenue growth,
limited expansion in EBITDA margin, and about $100 million in
annual capital expenditures. Standard & Poor's also assumes that
the restricted group will have about an additional $120 million in
annual interest and dividend payments. These are attributable to
two debt issues and exchangeable preferred stock becoming cash pay
by August 2004.

While Crown Castle's financial risk is high, its wireless tower
leasing business enjoys several favorable characteristics. First,
there is significant operating leverage. Because a tower has
mostly fixed costs and few variable costs, each additional tenant
on that tower adds to cash flow. Second, towers are not
technology-dependent. Third, there is less likelihood for the
tower industry to experience oversupply, as some other
telecommunications sectors have, because towers are regulated by
zoning laws and constraints relating to real estate and radio-
frequency engineering.

Crown Castle is among the largest wireless tower operators in the
industry, with about 10,797 sites in the U.S. and 3,428 sites in
the U.K. The company derives more than 80% of its revenues from
the tower leasing business and the remainder from network
services.


CRUM & FORSTER: Fitch Assigns & Withdraws B Senior Debt Rating
--------------------------------------------------------------
Fitch Ratings has assigned a 'B' rating to the senior debt of Crum
& Forster Holding Corp.'s. The Rating Outlook is Negative.
Additionally, Fitch has withdrawn the 'B' senior debt rating of
Crum & Forster Funding Corp.

CFHC recently assumed $300 million of senior notes from CFFC-a
special purpose corporation established to issue and retain the
above mentioned notes until Fairfax Financial Holdings Limited
successfully renegotiated its bank facility allowing for the
transfer of the notes to CFHC without creating an event of default
under the facility.

Proceeds from the note offering, barring issuance expenses and the
placement in escrow of the first four interest payments on the
notes, of more than $210 million will be distributed to Fairfax to
extinguish outstanding debt and/or invest in cash, short term
investments or marketable securities.

Fairfax's renegotiated bank facility, in addition to allowing the
transfer of the notes to CFHC, allows for borrowing by Northbridge
Financial Corp. and Odyssey Re Holdings Corp. and unlike its
predecessor, is secured--specifically by Fairfax's shares in
Northbridge, Odyssey Re and CFHC.

Crum & Forster Holdings Corp.

         -- Senior debt Assign 'B'/Negative.

Crum & Forster Funding Corp.

         -- Senior debt Withdrawn 'B'/Negative.

Fairfax Financial Holdings Limited

         -- Senior debt Affirm 'B+'/Negative.

TIG Holdings, Inc.

         -- Senior debt Affirm 'B'/Negative;

         -- Trust preferred Affirm 'CCC+'/Negative.

Members of The Crum & Forster Insurance Group

         -- Insurer financial strength Affirm 'BBB-'/Negative.

Members of the Northbridge Insurance Group

         -- Insurer financial strength Affirm 'BBB-'/Negative.

Odyssey Re Group

         -- Insurer financial strength Affirm 'BBB+'/Negative.

Members of the TIG Insurance Group

         -- Insurer financial strength Affirm 'BB+'/Negative.

Commonwealth Insurance Co.

         -- Affirm 'BBB-'/Negative.

Commonwealth Insurance Co. of America

         -- Affirm 'BBB-'/Negative

Ranger Insurance Co.

         -- Affirm 'BBB-'/Negative.

         The members of the Crum & Forster Insurance Group are:

Crum & Forster Insurance Co.

Crum & Forster Underwriters of Ohio

Crum & Forster Indemnity Co.

The North River Insurance Co.

United States Fire Insurance Co.

           Members of the Northbridge Insurance Group are:

Federated Insurance Co. of Canada

Lombard General Insurance Co. of Canada

Lombard Insurance Co.

Zenith Insurance Co. (Canada)

Markel Insurance Co. of Canada

              The members of the Odyssey Re Group are:

Odyssey America Reinsurance Corp.

Odyssey Reinsurance Corp.

             The members of the TIG Insurance Group are:

Fairmont Insurance Company

TIG American Specialty Ins. Company

TIG Indemnity Company

TIG Insurance Company

TIG Insurance Company of Colorado

TIG Insurance Company of New York

TIG Insurance Company of Texas

TIG Insurance Corporation of America

TIG Lloyds Insurance Company

TIG Premier Insurance Company

TIG Specialty Insurance Company


DENBURY RESOURCES: Completes Exchange of B-Rated 7-1/2% Notes
-------------------------------------------------------------
Denbury Resources Inc. (NYSE:DNR) has completed the exchange of
$225 million of its previously issued 7-1/2% Senior Subordinated
Notes Due 2013 (S&P/B/Stable), which were privately placed in
March 2003, for $225 million of 7-1/2% Senior Subordinated Notes
Due 2013 that have been registered under the Securities Act of
1933. One-hundred percent of the privately placed notes were
tendered for exchange.

Denbury Resources Inc. -- http://www.denbury.com-- is a growing
independent oil and gas company. The Company is the largest oil
and natural gas operator in Mississippi, holds key operating
acreage onshore Louisiana and has a growing presence in the
offshore Gulf of Mexico areas.


DETROIT MEDICAL: S&P Hatchets Revenue Bond Rating to B from BBB-
----------------------------------------------------------------
Standard and Poor's Ratings Services downgraded its ratings on
$562 million of Detroit Medical Center's revenue bonds to 'B' from
'BBB-', reflecting a rapid decline in liquidity and substantial
operating losses that are not likely to be eliminated without
direct government support or radical restructuring. The outlook
has been revised to negative from stable.

"If direct government support becomes a reality, it should help,
but not solve DMC's operating issues," said Standard & Poor's
credit analyst Liz Sweeney. "If direct government support fails,
DMC is likely to close two major hospitals with the goal of
slashing public mission costs, but the financial outcome of such a
radical restructuring is uncertain," she added.

The negative outlook reflects the uncertainty surrounding DMC's
ability to eliminate operating losses, with or without government
support, and stem the drain on cash that the operating losses are
causing.

A bankruptcy filing is not expected to be necessary for liquidity
reasons, as unrestricted cash and investments combined with an
available line of credit and other cash inflows during the year,
will be sufficient for operations during 2003.

The rating is in the 'B' category because it is Standard & Poor's
belief that whether DMC receives government support or not, the
DMC's financial outlook is very uncertain. In addition, if DMC
receives the government support it is seeking, it is likely to
lose some measure of flexibility and independence and is not
likely to be allowed to operate with the kind of cushion expected
of a higher rated entity.


DIRECTV: Removal Period Extension Hearing Slated for August 6
-------------------------------------------------------------
DirecTV Latin America, LLC may be party to actions pending in
courts of various jurisdictions, Joel A. Waite, Esq., at Young
Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, says.
During the initial stage of this case, DirecTV has been focused on
various matters including finalizing the DIP Financing and meeting
with and providing information to the Committee.  Thus, DirecTV
did not have the opportunity to fully investigate and determine
whether there are any pending matters that should be removed.

Rule 9027 of the Federal Rules of Bankruptcy Procedure and
Section 1452 of the Judiciary Procedures Code govern the removal
of pending civil actions.  Specifically, Section 1452(a)
provides:

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

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

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

By this motion, DirecTV asks the Court to extend the time for it
to file notices of removal of related proceedings under Bankruptcy
Rule 9027(a) to and including the latest to occur of:

     (a) September 15, 2003; or

     (b) 30 days after the order terminating the automatic stay
         with respect to the particular actions sought to be
         removed.

Mr. Waite asserts that the requested extension should be granted
because:

     (a) it will afford DirecTV an additional opportunity to make
         fully informed decisions concerning removal of any
         pending actions and will assure that it does not forfeit
         valuable rights under Section 1542 of the Judiciary
         Procedures Code; and

     (b) the rights of the parties-in-interests will not be
         prejudiced by the extension for they may seek to remand a
         pending action to the state court.

The Court will convene a hearing on August 6, 2003 to consider
the Debtor's request.  By application of Del.Bankr.LR 9006-2, the
current removal period is automatically extended through the
conclusion of that hearing. (DirecTV Latin America Bankruptcy
News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


DUANE READE: Appoints Timothy R. LaBeau as SVP of Merchandising
---------------------------------------------------------------
Duane Reade Inc. (NYSE: DRD) has appointed Timothy R. LaBeau to
the position of Senior Vice President of Merchandising and to the
Company's Executive Committee, effective Monday, July 21, 2003.
Mr. LaBeau, whose responsibilities will include managing
purchasing, merchandising and inventory control activities, will
report directly to Anthony J. Cuti, Chairman of the Board and
Chief Executive Officer.

Mr. LaBeau, 48, has extensive merchandising experience and has
held several important management positions throughout his 25-year
career in the consumer retail industry.  He most recently served
as Operating Group President at Fleming, Inc., a multi-billion
dollar full line grocery wholesaler.  Previously, he was President
and Chief Executive Officer of American Sales Company, a
subsidiary of Ahold USA, from 1998 to 2002.  From 1994 to 1998, he
served as Executive Vice President of Merchandising and
Procurement at Ahold USA.  Prior to this position, he spent 17
years working at ALDI Inc., a multi-billion dollar retail grocery
store chain operating in 12 states.  At ALDI Inc., he served as
President from 1986 to 1994, General Manager from 1983 to 1986,
and Operations Manager from 1980 to 1983.

Gary Charboneau, Senior Vice President of Sales and Marketing,
will continue in his marketing role with an increased focus on the
Company's advertising, loyalty marketing, photo marketing and in-
store merchandising activities.  Mr. Charboneau will partner with
Mr. LaBeau on related merchandise purchase activities and continue
to report to Mr. Cuti.

Commenting on the appointment, Anthony J. Cuti, stated, "We are
very pleased to have Tim join Duane Reade as a valuable addition
to our already strong senior management team.  In his new role,
Tim will play an important part in our ongoing effort to further
strengthen our sales performance, purchasing processes, and
inventory management. His significant leadership experience and
merchandising expertise will benefit the Company and we look
forward to his contributions as we continue to grow the business."

Founded in 1960, Duane Reade is the largest drug store chain in
the metropolitan New York City area, offering a wide variety of
prescription and over-the-counter drugs, health and beauty care
items, cosmetics, hosiery, greeting cards, photo supplies and
photofinishing.  As of June 28, 2003, the Company operated 236
stores.  Duane Reade maintains a Web site at
http://www.duanereade.com

As reported in Troubled Company Reporter's July 4, 2003 edition,
Standard & Poor's Ratings Services revised its outlook on Duane
Reade to negative from stable.

At the same time, Standard & Poor's affirmed its 'BB-' corporate
credit and senior unsecured debt ratings and its 'B' subordinated
notes rating.

The outlook revision follows Duane Reade's announcement that sales
and profits were weaker than expected in the second quarter of
2003 (ended June 28, 2003). The company continues to be affected
by the soft New York economy. The unusually wet and cold spring in
the New York-metropolitan area also contributed to the sales and
profit shortfall.


EASYLINK SERVICES: Sets Annual Shareholders' Meeting for Aug. 7
---------------------------------------------------------------
The Annual Meeting of Stockholders of EasyLink Services
Corporation, a Delaware corporation, will be held at 3 p.m. local
time on Thursday, August 7, 2003 at the Embassy Suites Hotel
located at 121 Centennial Avenue, Piscataway, NJ 08854 for the
following purposes:

       1. To elect seven directors of EasyLink to serve until the
          2004 Annual Meeting of Stockholders or until their
          respective successors are elected and qualified;

       2. To approve the Company's 2003 Stock Option Plan; and

       3. To transact such other business as may properly come
          before the Annual Meeting and any adjournment or
          postponement thereof.

The Board of Directors has fixed the close of business on June 12,
2003 as the record date for determining the stockholders entitled
to notice of, and to vote at, the Annual Meeting, and any
adjournment or postponement thereof.

                          *   *   *

As previously reported, EasyLink Services said it was seeking to
restructure substantially all of approximately $86.2 million of
outstanding indebtedness, including approximately $10.7 million
of capitalized future interest obligations. The Company is
currently in discussions with holders of its debt relating to
the proposed restructuring. To date, the holders of
approximately 70% of this debt have expressed interest in
completing a restructuring on the terms discussed.

Management seeks to restructure substantially all of the debt.
If all of the debt were successfully eliminated on the currently
proposed terms, the Company would pay approximately $2.0 million
in cash and issue up to 35 million shares of its Class A common
stock, including the shares issued to fund the cash payment. The
number of shares to be exchanged for each class of debt was
determined based on a deemed per share price of between $2.00
and $3.00.


ENRON CORP: Judge Gonzalez Clears Austin Energy Settlement Pact
---------------------------------------------------------------
Martin A. Sosland, Esq., at Weil, Gotshal & Manges LLP, in New
York, relates that Enron Sandhill Limited Partnership and Austin
Energy are parties to a Participation Agreement, dated as of
April 20, 2000, as amended, which provides, inter alia, for the
construction, operation, maintenance and terms of ownership of an
electric generation facility -- the Sandhill Project -- located
on a site owned by Austin Energy in Travis County, Texas -- the
Properties.

Austin Energy is the electric utility department of the City of
Austin, Texas.

Enron North America Corporation, through its ownership of Enron
Sandhill, owns 8.6% of the Sandhill Project while Austin Energy
owns the remaining 91.4% of the Sandhill Project.  Enron Sandhill
is obligated by the terms of the Participation Agreement to sell
its interest to Austin on November 3, 2003 for a nominal amount.
Enron Sandhill is entitled under the Participation Agreement to
an option to call up to 100MW from the Sandhill Project, which
option expires on November 3, 2003.  In addition, Enron Sandhill
is obligated to pay Austin Energy, among other things:

     (i) a fixed monthly operation and maintenance fee,

    (ii) a usage fee, equal to fixed dollar amount for each MWh of
         energy scheduled and delivered to or on behalf of Enron
         Sandhill in a given month, and

   (iii) a variable operation and maintenance fee based on the
         amount of MWh scheduled and received by Enron over a
         specified amount in a calendar year.

In connection with the Participation Agreement, Mr. Sosland
informs the Court that ENA entered into a Guaranty in favor of
Austin Energy dated as of April 20, 2000, pursuant to which ENA
has guaranteed certain Enron Sandhill obligations under the
Participation Agreement.

In connection with the construction of the Sandhill Project,
Enron Sandhill and ENA entered into the Separately Stated
Engineering Materials and Equipment Procurement and Construction
Agreement, dated April 20, 2000, as amended, pursuant to which
ENA was the general contractor.  ENA entered into an oral
contract with EPC Estate Services, Inc., formerly known as
National Energy Production Company, pursuant to which NEPCO
performed work for the Sandhill Project as a contractor.  NEPCO
further entered into Purchase Order No. FR04560001, dated as of
June 22, 2000, with Hamon Research-Cottrell, Inc., and Purchase
Order No. FR04560006, dated as of August 28, 2000, with Turbine
Air Systems, pursuant to which Hamon and TAS furnished equipment
and performed service and work for the Sandhill Project as
NEPCO's subcontractors.

Under the Participation Agreement, Austin Energy remains
indebted to Enron Sandhill for the construction of the Sandhill
Project in an amount that is disputed among the Parties.  Austin
Energy asserted that under the terms of the Participation
Agreement, Enron Sandhill and ENA, as guarantor, remain indebted
to Austin Energy for fuel costs, station work, and other charges
incurred or accrued before the Petition Date, and for station
work charges that accrued after the Petition Date -- the Unpaid
Energy Charges.

Moreover, Mr. Sosland notes, Austin Energy asserted that it
performed certain warranty work for the Sandhill Project on
behalf of the Developer Entities -- the Unplanned Warranty Work -
- and incurred costs and expenses in connection with its
performance of the warranty work.  In addition, Austin Energy
asserted that it is owed liquidated damages for delays in
substantial completion of the Sandhill Project and in performance
relating to subsequent warranty work  -- the Schedule LDs.

On the other hand, Mr. Sosland continues, NEPCO asserted a claim
against Austin Energy and the other Developer Entities for
payment of $2,991,656 for work performed pursuant to its oral
agreement with ENA and has filed a lien against the Properties in
the official records of Travis County, Texas.  Both Hamon and TAS
also asserted claims for $384,000 and $227,779, for equipment
supplied and work performed pursuant to NEPCO's purchase orders
to them and have filed liens against the Properties for those
amounts in the official records of Travis County, Texas.  In
connection with the Liens, Hamon filed a suit against Austin
Energy and NEPCO styled "Hamon Research Cottrell, Inc. vs. City
of Austin d/b/a Austin Energy and National Energy Production Co."
in the District Court of Travis County Texas.  TAS filed a suit
against Austin Energy styled "Turbine Air Systems, Ltd. vs. City
of Austin d/b/a Austin Energy" in the District Court of Travis
County Texas.

Thus, the Parties are in dispute with respect to the:

     (i) amounts owed by ENA to NEPCO for performance of
         additional construction work for the Sandhill Project
         under the Participation Agreement and the EPC Agreement;

    (ii) amounts owed to Austin for the Unplanned Warranty Work,
         the Unplanned Warranty Costs and Schedule LDs; and

   (iii) amounts owed to NEPCO, Hamon and TAS for the performance
         of construction work for the Sandhill Project.

According to Mr. Sosland, the Liens asserted against the
Properties jeopardize ENA's and Enron Sandhill's ability to
obtain the highest value for the Call Option.  Hence, the Parties
wish to resolve all claims and issues relating to the
Participation Agreement, the EPC Agreement, the Construction
Contracts, the Guaranty, the Sandhill Project Construction Work,
the Construction Costs, the Energy Charges, the Unpaid Energy
Charges, the Liens, the Lawsuits, and the Disputes; and to
release each other from all claims, obligations, liabilities,
liens and lawsuits related thereto on the terms and conditions of
a settlement agreement.

The Settlement Agreement and Mutual Release provides, among other
things, for the replacement of the Participation Agreement by a
Power Allocation Agreement to be executed simultaneously with the
Settlement Agreement, by and between Austin Energy and Enron
Sandhill, governing, among other things, the Call Option and
Enron Sandhill's right to electric energy generated by the
project.  Pursuant to the Settlement Agreement, Austin Energy
will pay Hamon, TAS and NEPCO a settlement payment in full
consideration of the Parties' Sandhill Project Construction Work
and full satisfaction of the Parties' claims and liens.
Specifically, Austin Energy will pay:

         --  $208,181 to Hamon,

         --  $171,131 to TAS, and

         --  $304,985 to NEPCO.

Interest will accrue on any overdue portion of the Settlement
Payments.  NEPCO will also retain an intercompany claim for
$1,845,677 against ENA for NEPCO's performance of additional
construction work for the Sandhill Project under the
Participation Agreement and the EPC Agreement.

Payment of any taxes to be paid on the Settlement Payments will
be paid in accordance with the terms of the Participation
Agreement, EPC Agreement, or the relevant Construction Contract,
as between the parties thereto, or in the event these agreements
are silent on the issue, by the Party incurring the taxes;

In addition, Enron Sandhill will transfer to Austin Energy its
undivided interest in the Sandhill Project and Austin Energy.
  From and after the date of such transfer of Enron Sandhill's
interest in the Sandhill Project, Austin Energy will automatically
assume, perform, and be fully responsible for any and all claims,
liabilities, penalties, fines, costs, expenses, and damages
arising out of or relating to in any respect the construction,
ownership, operation, or maintenance of the Sandhill Project,
whether relating to periods of time prior to or after the date of
transfer, other than claims, liabilities, penalties, fines, costs,
expenses, and damages attributable to Enron Sandhill's acts and
omissions; provided that this provision will not release either
Enron Sandhill nor Austin Energy from their obligations under the
Power Allocation Agreement. Moreover, Austin Energy will assume
all responsibility for the management of the warranty and
environmental obligations of Enron Sandhill, ENA, NEPCO and its
Subcontractors relating to the Sandhill Project, provided,
however, that NEPCO will not be released from liability on claims
relating to that certain United States Protection Agency
Administrative Order.

Finally, the Settlement Agreement provides that each party waives
and relinquish all claims it currently has or may have against
each other party relating to the Sandhill Claims pursuant to the
Settlement Agreement; and Austin Energy will release ENA from all
obligations pursuant to the Guaranty, which Guaranty will be
deemed null and void.

Because Enron Power Marketing, Inc. made certain payments to
Austin Energy on behalf of Enron Sandhill under the Participation
Agreement, Austin Energy has requested a limited release from
EPMI.  Accordingly, the Settlement Agreement provides that EPMI
agrees to join in the Settlement Agreement to provide a release
to Austin Energy for any claims arising out of, related to, with
respect to or in connection with any payments made by EPMI to
Austin Energy on behalf of Enron Sandhill under the Participation
Agreement.

Pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure, ENA and NEPCO ask the Court to approve the Settlement
Agreement and the contemplated transactions with Austin Energy.

Mr. Sosland argues that the Settlement is warranted since:

     (a) the Parties propose to resolve all issues related to the
         Sandhill Claims without any litigation, which could
         result in additional, unnecessary expense for Debtors ENA
         and NEPCO;

     (b) it provides a mechanism for the prompt payment of all
         claims arising from the Sandhill Claims;

     (c) it allows NEPCO to realize value on amounts Austin Energy
         owed;

     (d) it results in the final satisfaction of all claims
         between the Parties relating to the Sandhill Claims;

     (e) it facilitates a future sale of the Call Option by
         freeing the option from all liens and allowing a
         potential buyer to enjoy the benefits of the Call Option
         without being liable for the administrative fees and
         other responsibilities currently associated with ENA's
         and Enron Sandhill's ownership of the Sandhill Project;
         and

     (f) it excuses NEPCO from the subcontracting responsibilities
         it is no longer able to service.

                            *     *     *

After due consideration, Judge Gonzalez grants the Debtors'
request. (Enron Bankruptcy News, Issue No. 72; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


EPICOR SOFTWARE: Completes Acquisition of ROI Systems for $20MM
---------------------------------------------------------------
Epicor Software Corporation (Nasdaq: EPIC), a leading provider of
integrated enterprise software solutions for the midmarket, has
completed the acquisition of ROI Systems, a privately held ERP
provider of manufacturing software solutions for approximately
$20.7 million in an all cash transaction.

The acquisition of ROI Systems brings to Epicor not only a highly
experienced team, but also a strong customer base that extends
Epicor's position as a leading provider of extended, end-to-end
enterprise solutions for midmarket manufacturers. To date, Epicor
has delivered its solutions to over 15,000 customers worldwide,
and with the addition of the ROI customer base, Epicor's
manufacturing customer community now includes over 6,500
customers, implemented in more than 35 countries.

The company anticipates the acquisition to be accretive to
earnings in the fourth quarter 2003 and for the year 2004.
Concurrent with the closing, the company has completed a workforce
reduction related to the acquisition that combines the best
practices of the teams and leverages industry expertise to derive
planned cost efficiencies of over 20 percent for the combined
manufacturing group on a quarterly basis going forward. Costs
associated with the acquisition will be reflected in third quarter
2003 operations. The company will provide revised guidance for the
second half of 2003 and an outlook for 2004 revenue and earnings
estimates when it reports its final second quarter results on July
23.

"With this acquisition, we are executing on our previously
announced balanced growth strategy to leverage our strength
through both organic growth and acquisitions that meet our
stringent M&A criteria," said George Klaus, chairman, CEO and
president of Epicor. "The acquisition of ROI enables us to further
leverage our domain expertise in manufacturing and our industry-
endorsed road map to deliver next generation Web services to an
expanding base of midmarket customers. The success of this
business combination will be driven by continuing to deliver
excellent customer satisfaction and powerful, cost-effective
solutions, while accelerating the delivery of next generation
technologies and enhancements across all of our products.

"The combination of ROI Systems and Epicor will drive greater
value for both groups of manufacturing customers and in turn, will
contribute to our profitable growth and creation of shareholder
value going forward," stated Klaus.

ROI has enjoyed significant success with established industry
expertise and strong customer satisfaction in a number of
manufacturing verticals including consumer packaged goods, medical
devices and equipment, and transportation products. For 2002, ROI
reported profitability on over $20 million in annual revenues, and
despite the difficult economy, reported the best sales quarter in
its history for last quarter of 2002.

"ROI has sustained profitable growth in midmarket manufacturing
for nearly 20 years," said Paul Merlo, president of ROI Systems.
"Epicor has a strong track record of supporting the customers and
products that they have acquired, while continuing to invest in
and deliver their next generation products. Together, the Epicor
and ROI teams will be able to leverage significant manufacturing
expertise and set new standards for customer satisfaction in the
industry.

"This relationship will also allow for accelerated delivery of
advanced Web services technologies and collaborative applications
to ROI customers," continued Merlo. "The significant synergies and
opportunities created on both sides will be enormously positive
for our customers, employees, and partners."

Epicor and ROI provide a strongly aligned culture, customer focus,
and technology vision that will benefit the combined companies'
customer, employee and shareholder constituents. The company
anticipates numerous synergies from this acquisition including
technology skill sets, operating efficiencies, cross-selling
opportunities, and facilities consolidation of the ROI and the
Epicor manufacturing group offices, both currently located in
Minneapolis, Minn. Epicor will leverage ROI's strong presence in
its key vertical markets, as well as other specialized, non-
overlapping verticals, to create new sales opportunities that
complement Epicor's current market strengths in discrete, make-to-
order manufacturing, distribution, hospitality and services-
oriented industries.

Epicor will continue to develop and support the ROI MANAGE 2000
product line. MANAGE 2000 release 7.1 is currently scheduled for
limited release late in 2003. Epicor has successfully executed on
its strategy to deliver its CRM, SRM, e-business and other
extended enterprise applications across its installed base of
customers and it expects to achieve similar success with the
availability of these applications to ROI customers. In the first
half of 2004, Epicor plans to release its .NET manufacturing
solution, which will feature an n-tier architecture, that has been
designed from the ground up to support Microsoft .NET and Web
services. The solution will enable Epicor and ROI's manufacturing
customers to leverage Web services technology for maximum ease of
use, integration, and lower total cost of ownership (TCO).
Epicor's product road map enables manufacturers to adopt Web
services, on their own timeframe, while protecting their existing
technology investment.

Epicor is a leading provider of integrated enterprise software
solutions for global midmarket companies. Founded in 1984, Epicor
has over 15,000 customers and delivers end-to-end, industry-
specific solutions that enable companies to immediately improve
business operations and build competitive advantage in today's
Internet economy. Epicor's comprehensive suite of integrated
software solutions for Customer Relationship Management,
Financials, Manufacturing, Supply Chain Management, Professional
Services Automation and Collaborative Commerce provide the
scalability and flexibility to support long-term growth. Epicor's
solutions are complemented by a full range of services, providing
single point of accountability to promote rapid return on
investment and low total cost of ownership, now and in the future.
Epicor is headquartered in Irvine, California and has offices and
affiliates around the world. For more information, visit the
company's Web site at http://www.epicor.com

Epicor Software's December 31, 2002 balance sheet shows that
total current liabilities exceeded total current assets by about
$12 million, while net shareholders' equity has shrunk to about
$4 million, from about $7 million as recorded in the year-ago
period.


EXIDE TECH.: Committee Wants to Investigate Insurance Assets
------------------------------------------------------------
The Official Committee of Unsecured Creditors of Exide
Technologies and debtor-affiliates, seeks the Court's authority to
obtain documents and information concerning certain insurance
coverage of the Debtors, their estates, and their affiliates.  The
specific documents and information that the Committee seeks relate
to Exide's liability insurance coverage between 1960 and 2001.
The term "liability insurance" includes general liability
coverage, environmental coverage, premises' coverage, production
and products completed coverage, and liability coverage for
officers, directors, shareholders, and managers of Exide and its
predecessor companies.

According to David B. Stratton, Esq., at Pepper Hamilton LLP, in
Wilmington, Delaware, the Committee, through its professional
advisors, has attempted to work with the Debtors and their
advisors to conduct the necessary due diligence investigation
related to Exide's insurance coverage.  The Debtors have been
slow in providing the Committee with critical information that is
paramount to the Committee's review of insurance coverage that
may be available to Exide.  Although the Debtors recently have
agreed to provide some documents, such information to date has
not been provided.  The Debtors have also not made certain
persons who, on information and belief, have important information
about these matters available to the Committee. Accordingly, the
Committee finds itself with no choice but to request a Court order
compelling the Debtors' cooperation, and the cooperation of
certain current and former professionals of the Debtors.

Mr. Stratton explains that the Committee seeks the prompt
production of documents and information.  Given the Debtors'
recent statements that they are in the process of formulating
their plans of reorganization and the Debtors' disclosure that
they are in the process of negotiating with exit lenders, the
Committee believes that it is critical to obtain this information
and to hold these interviews as soon as possible.  Indeed, the
existence of any potential insurance coverage may have a dramatic
impact on any plans of reorganization.  The Committee submits
that the list of documents and the amount and type of documents
requested are consistent with what official creditors' committees
typically request in Chapter 11 cases of like size and
complexity.

To investigate the existence and scope of coverage, the Committee
needs access to insurance policies, internal memos, insurance
claims and other relevant information in the Debtors' possession
and control.  The Committee also seeks access to, and an
opportunity to interview, individuals who the Committee believes
to be the most knowledgeable about these matters.

Mr. Stratton explains that the purpose of the Committee's
investigation is to determine whether there are proceeds payable
to the Debtor with respect to liabilities it paid in the past or
which may still be outstanding.  This information is related to
the Debtors' "acts, conduct, or property or to the liabilities
and financial condition."  Consequently, the information sought
by the Committee is within the proper scope of Rule 2004
discovery.

The Committee also seeks an opportunity to interview the Debtors'
professionals who, on information and belief, are knowledgeable
of these matters, and in fact, may be the only persons affiliated
with the Debtors who have this knowledge.  Given the broad scope
of Rule 2004 investigation and the very language of the rule that
"the court may order . . . any entity" to submit to this
examination, the interviews sought by the Committee are likewise
within the proper scope of Rule 2004 discovery.

For the Committee to fulfill its statutory obligations to all of
the Debtors' unsecured creditors and to be an effective counter-
balance in these cases, Mr. Stratton contends that the Committee
must have a full understanding of the Exide Entities' insurance
coverage.  The Committee will not have this understanding unless
the Debtors provide the requested documents and information and
the Committee has an opportunity to interview individuals who
have important information about these matters. (Exide Bankruptcy
News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


FACTORY 2-U: Reports Slight Decrease in Sales for June 2003
-----------------------------------------------------------
FACTORY 2-U STORES, INC. (Nasdaq: FTUS) announced that sales for
the five-week period ended July 5, 2003 were $49.4 million, a
decrease of 1.0% over sales of $49.9 million for the five-week
period ended July 6, 2002. Comparable store sales for the five-
week period ended July 5, 2003 increased 3.0% versus a decrease of
6.3% for the same period last year. The Company did not open or
close any stores during the five-week period ended July 5, 2003.

Sales for the twenty-two week period ended July 5, 2003 totaled
$189.7 million compared to $203.5 million for the twenty-two week
period ended July 6, 2002, a decrease of 6.8%. Comparable store
sales for the twenty-two week period ended July 5, 2003 decreased
3.1% versus a decrease of 11.4% for the same period last year. For
the twenty-two weeks ended July 5, 2003, the Company opened 1 new
store and closed 3 stores: one of which was closed temporarily for
landlord repairs.

Bill Fields, Chairman and Chief Executive Officer, commented, "Our
June comparable store sales performance marked our third
consecutive month of positive comparable store sales results. With
advertising and promotional activities similar to last year, we
experienced a 15% increase in transaction counts on a comparable
basis. Our Home business performed the best with comparable sales
in the mid-teens, followed by our Children's category with
positive low single-digit results. Footwear performed the poorest
with negative high single-digit comparable sales. Geographically,
our best performing areas were in Texas, Las Vegas, Nevada and the
Pacific Northwest with comparable store sales in the range of
positive 10% to 30%. Orange County and high desert regions of
southern California and New Mexico performed the worst with
negative comparable store sales in the high single-digits."

Mr. Fields concluded, "We continue to make progress with our
merchandise offerings, value statement and in-store execution. We
also brought on-line our new distribution center in San Diego,
California and we simultaneously closed our two smaller
distribution centers in San Diego. As a result of start-up costs
associated with our new distribution center, distribution costs
will be higher for our second quarter. Our focus for the remainder
of our second quarter is to increase transaction counts and
continue building on our positive comparable store sales trend of
the past three months. Though July was extremely promotional last
year, we are targeting July comparable store sales to be in the
range of negative 2% to positive 2%. Looking beyond our second
quarter, we expect to be profitable in both our third and fourth
quarters as a result of anticipated improvement in comparable
store sales, lower promotional costs and lower distribution
costs."

We will provide a mid-month sales update for July on July 21, 2003
at 5:00 P.M. Eastern Daylight Time. Those interested can access
this update message at 1-888-201-9603. This message will remain
available until August 18, 2003. We will release our July sales
results on August 6, 2003 after the market closes, or
approximately 4:00 P.M. Eastern Daylight Time.

We expect to release our second quarter operating results on
August 13, 2003 after the market closes, or approximately 4:00
P.M. Eastern Daylight Time. We will host a real-time webcast
presentation and live conference call to discuss our second
quarter operating results and third quarter sales and operating
results expectations, the same day at 5:00 P.M. Eastern Daylight
Time. To participate in the call, dial 1-800-843-7949 five minutes
before the call or access the Internet at www.factory2-u.com. All
shareholders and other interested parties are encouraged to
participate. A replay of the call will remain available for 48
hours by telephone or on the Internet through August 27, 2003. You
may also obtain a transcript of the call by contacting Kehoe,
White & Co., Inc. at 1-562-437-0655.

FACTORY 2-U STORES, INC. operates 242 "Factory 2-U" off-price
retail stores which sell branded casual apparel for the family, as
well as selected domestics and household merchandise at prices
which generally are significantly lower than the prices offered by
its discount competitors. The Company operates 31 stores in
Arizona, 2 stores in Arkansas, 64 stores in southern California,
63 stores in northern California, 1 store in Idaho, 8 stores in
Nevada, 9 stores in New Mexico, 1 store in Oklahoma, 15 stores in
Oregon, 34 stores in Texas, and 14 stores in Washington.

At February 1, 2003, Factory 2-U Stores, Inc.'s balance sheet
shows that its total current liabilities exceeded its total
current assets by about $3 million, while its total
shareholders' equity shrank to $44 million, from about $70
million recorded a year earlier.


FLEMING: Herbert Baum et al. Want Advance Defense Costs Payment
---------------------------------------------------------------
Certain current and former directors and officers ask the Court
to lift automatic stay to allow Greenwich Insurance Company to
advance initial defense expenses amounting to $7,500,000, under a
Management Liability and Company Reimbursement Insurance Policy.
The initial advance is half of Greenwich's first-layer policy and
7.5% of the total coverage.

The request is made by current Fleming Companies, Inc. directors
Herbert Baum, Kenneth Duberstein, Archie Dykes, Carol Hallet,
Robert Hamada, Edward Joullian III and Alice Peterson; former
Fleming director Guy Osborn; current Fleming general counsel
Carlos Hernandez; and former Fleming officers Mark Hansen, Neal
Rider, Mark Shapiro, Thomas Dahlen, Stephen Davis and William
Marquard.

The Greenwich Management Liability and Company Reimbursement
Insurance Policy has a $15,000,000 aggregate liability limit.
Subject to all of its terms and conditions, the Policy affords
specified coverage for loss incurred by current and former
Fleming D&Os.  It also affords a special coverage to Fleming for
the loss incurred in connection with its indemnification of the
D&Os for the claims against them and in connection with the
securities claims against Fleming itself.  The Policy covers the
period from February 5, 2002 to February 5, 2003.

Beginning in September 2002, several lawsuits were filed against
Fleming and certain of its directors and officers in both federal
and state courts.  The Securities and Exchange Commission has
also instituted an investigation into certain activities on the
part of Fleming and its management.

Greenwich has received a request to advance defense expenses in
connection with the pending investigations.  Each of the D&Os is
incurring legal fees and expenses in connection with the
investigations.  However, Greenwich has agreed to advance defense
expenses only upon Court order.  The Fleming D&Os believe that
Greenwich would not violate the automatic stay by advancing the
defense expenses.

M. Blake Cleary, Esq., Young Conaway Stargatt & Taylor, in
Wilmington, Delaware, assures the Court that the Debtors' estates
will not be harmed by the advancement of the proceeds because it
ultimately may be required to indemnify the D&O for these defense
expenses if they are not advanced by insurance program contains a
$100,000,000 total limit, including $85,000,000 in coverage
excess of the $15,000,000 Greenwich Policy.  Even after the
advancement of the defense expenses, Mr. Cleary says, additional
insurance remains available. (Fleming Bankruptcy News, Issue No.
8; Bankruptcy Creditors' Service, Inc., 609/392-0900)


FLEXIINTERNATIONAL: Brings-In Kingery Crouse as New Accountants
---------------------------------------------------------------
On June 27, 2003, with the approval of the Audit Committee and the
concurrence of the Board of Directors, FlexiInternational
Software, Inc., engaged Kingery, Crouse & Hohl, P.A. as its
independent auditors.  Flexi dismissed its former independent
auditors, Hill, Barth & King LLC, effective as of that date.

HBK informed the Company that it would not register with the
Public Company Accounting Oversight Board as required by the
Sarbanes-Oxley Act and thus would no longer be able to provide
audit services to public company registrants.  Prior to the
engagement of KCH, HBK had served as the independent auditors of
Flexi since December 2001.

FlexiInternational Software, Inc., whose March 31, 2003 balance
sheet shows a total shareholders' equity deficit of about $2.3
million, is a leading designer, developer and marketer of Internet
based financial and accounting software and services.


FOCAL COMMS: Fitch Ups & Withdraws Junk Sr. Sec. Facility Rating
----------------------------------------------------------------
Fitch Ratings has upgraded the senior secured credit facility of
Focal Communications to 'CCC-' from 'D' and withdrawn the rating.
The senior unsecured noteholders have received preferred stock and
warrants in the reorganization, therefore Fitch is withdrawing the
'D' rating on these securities.

This rating action is the result of Focal's completion of its
reorganization plan, which was approved by the bankruptcy court on
June 19, 2003. As a result of this reorganization plan, Fitch
estimates indebtedness at the company decreased from approximately
$450 million as of March 31, 2003, to $95 million on a March 31,
2003 pro forma basis, represented by the $78 million secured
credit facility and a $17 million equipment loan.

As of March 31, 2003, Focal had approximately $27 million of cash
and cash equivalents, and it reported positive EBITDA results of
$7.3 million in the first quarter of 2003. The rating of Focal is
based on public information. With the rating withdrawal, Fitch
will no longer be providing financial analysis on this company.


FURR'S RESTAURANT: COLP Selling Assets to CIC-Buffet for $30MM
--------------------------------------------------------------
Furr's Restaurant Group, Inc., announced that on July 2, 2003 its
principal operating subsidiary, Cafeteria Operators, L.P., signed
an Asset Sale and Purchase Agreement with CIC-Buffet Partners,
L.P., for the sale of substantially all of COLP's assets. The
transaction is valued at approximately $30 million, consisting of
$24.5 million in cash, $3 million in secured subordinated
promissory notes and the assumption of certain liabilities.
Closing of the transaction is targeted for completion in September
2003 in conjunction with confirmation of a joint plan of
reorganization for the Company and its subsidiaries that will be
proposed by the Company, the Company's senior secured lenders and
the Company's Official Committee of Unsecured Creditors. The
Company was advised by Murphy Noell Capital LLC, a Westlake
Village, California based investment banking firm, in its
negotiations with CIC.

The Company also announced that on July 3, 2003 the Bankruptcy
Court for the Northern District of Texas overseeing the Company's
pending Chapter 11 cases approved bidding procedures that
contemplate that qualified bidders will be allowed the opportunity
to make higher and better offers to purchase COLP's assets at an
auction planned for September 2003 in accordance with procedures
approved by the Bankruptcy Court under Sections 363 and 365 of the
U.S. Bankruptcy Code. Formal announcement of the auction and the
process of obtaining any additional offers is scheduled to
commence on or before August 1, 2003. The court's ruling gives CIC
"stalking horse", or priority, status, which will allow CIC to
collect a "breakup" fee should COLP agree to sell its assets to
another party bidding in the auction and under certain other
limited circumstances. The closing of the transactions described
in the Purchase Agreement is subject to satisfaction of a number
of conditions, including confirmation of the Company's plan of
reorganization and final Bankruptcy Court approval.

William Snyder, acting CEO of the Company, stated: "We are very
pleased that we have been able to agree with our senior secured
lenders and committee of unsecured creditors on the terms of a
jointly proposed plan of reorganization, and on the terms of the
Purchase Agreement with CIC. We expect to file the joint plan of
reorganization and related disclosure statement within the next
several weeks, and then to proceed onward with the necessary
hearings to allow the plan of reorganization to be confirmed in
September 2003 in conjunction with the planned auction. The
Company's turnaround plan has been fully implemented and is
continuing to show positive results, which we believe contributed
to the significant value offered for the COLP's assets by CIC."

If the proposed transactions do not close for any reason, the
Company's plan of reorganization will also provide for the
restructuring of the Company's debt, the cancellation of the
Company's existing equity interests and the Company's emergence
from bankruptcy as a viable, profitable restaurant company
operating 54 restaurants that will be owned by its senior lenders.
The Company's joint plan of reorganization will also provide for
unsecured creditors (excluding claims of the Company's senior
secured lenders) to share in a minimum cash payment of $1.5
million as well as recoveries from the estate's claims and causes
of action. These funds will be distributed to unsecured creditors
as beneficiaries of a creditors' trust to be created under the
joint plan of reorganization.

The Company, together with COLP, filed its voluntary petition in
the U.S. Bankruptcy Court for the Northern District of Texas in
Dallas on January 6, 2003. The Company operates 54 cafeterias in
six southwestern and western states. The Company also operates
Dynamic Foods, its food preparation, processing and distribution
division, in Lubbock, Texas.

CIC is a newly organized company affiliated with the Private
Equity Group of Cardinal Investment Company, Inc. Cardinal is an
investment firm founded in 1974 by Edward W. Rose, III in Dallas,
Texas. Its mission is to successfully invest the capital of the
firm's partners and their associates. Cardinal manages more than
$500 million in assets, investing in a wide range of public and
private securities utilizing a team of professionals dedicated to
each market. Its investments in the restaurant industry include
Cafe Express and Retail and Restaurant Growth Capital.


GENUITY INC: Plan Filing Exclusivity Extended to August 6, 2003
---------------------------------------------------------------
Having focused their efforts over the first three months of their
Chapter 11 cases on consummating the Level 3 Sale, Erin T.
Fontana, Esq., at Ropes & Gray LLP, in Boston, Massachusetts,
reports that Genuity Inc. and debtor-affiliates are now involved
in the task of working through the various complex inter-creditor
issues and proposing a liquidation plan.  The Debtors initiated
meetings to discuss the inter-creditor and intercompany issues
with the Creditors' Committee.  In those meetings, the Debtors
proposed certain possible structures for, and major terms of, a
liquidating plan.

The members of the Creditors' Committee are currently engaged in
negotiations among themselves to formulate their views and a view
of the Creditors' Committee regarding major plan features.  At
present, these discussions and negotiations are not complete, and
thus the Debtors have not received definitive feedback from these
major creditors.

Accordingly, the Debtors sought and obtained a Court order
extending their exclusive period to file a Chapter 11 plan to
August 6, 2003, and their exclusive period to solicit acceptances
of that plan to October 31, 2003.

Ms. Fontana explains that the Creditors' Committee has agreed to
these extensions, as part of their agreement with the Debtors
that each will negotiate in good faith with the other over the
terms of a plan that is acceptable to both parties.  The
Creditors' Committee has indicated that it intends to provide the
Debtors with definitive feedback regarding their preferences for
plan terms very soon.

In return, the Debtors have agreed that during the Exclusive
Filing Period, they will not file a plan that has not been
approved by the Creditors' Committee until the Debtors believe
that negotiations are not progressing in good faith toward filing
a plan within the extended exclusivity period.  In that event,
the Debtors will give the Committee 10 days' prior notice of the
filing of any plan.

Ms. Fontana asserts that for the moment, continued negotiation,
within these deadlines for the Debtors and the Creditors'
Committee, is the preferable method to rapidly achieve a plan of
liquidation that can be confirmed without objection from those
major creditors who are members of the Committee.  Ultimately, if
some consensus or Creditors' Committee position cannot be
reached, the more formal public proposal of a plan may become
necessary to move the plan process forward.  But this step is not
necessary at this time. (Genuity Bankruptcy News, Issue No. 14;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


GLOBAL CROSSING: Court Extends Plan Filing Exclusivity to Oct 28
----------------------------------------------------------------
U.S. Bankruptcy Court Judge Gerber believes that terminating the
Global Crossing Debtors' exclusive periods would have the
potential for serious prejudice to creditors.  There is at least a
risk, if not certainty, that terminating exclusivity now --
particularly when it would not be for the purpose of permitting a
creditor constituency to file a competing plan, but rather to
facilitate a competing bid -- would send the wrong message, and
could damage the regulatory approval process that is so important
to all creditors, or, at least, all creditors other than those who
are bidders.

Accordingly, Judge Gerber extends the Exclusive Filing Period to
the earlier of October 28, 2003, or in the event the Purchase
Agreement is terminated in accordance with its terms, two weeks
from the date of termination.  The Exclusive Solicitation Period
is also extended until 60 days after the Extended Exclusive
Filing Period. (Global Crossing Bankruptcy News, Issue No. 43;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


GOLDENTREE LOAN: S&P Assigns Three Prelim. BB Class Note Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to GoldenTree Loan Opportunities II Ltd.'s $403 million
fixed-rate, floating-rate, discount, and revolving notes, and
combination securities due 2015.

This presale report is based on information as of July 9, 2003.
The ratings shown are preliminary. This report does not constitute
a recommendation to buy, hold, or sell securities. Subsequent
information may result in the assignment of final ratings that
differ from the preliminary ratings.

      The preliminary ratings reflect:

      -- The expected commensurate level of credit support in the
         form of subordination to be provided by the notes junior
         to the respective classes;

      -- The cash flow structure, which is subject to various
         stresses requested by Standard & Poor's;

      -- The experience of the collateral manager;

      -- The coverage of interest rate and foreign currency risks
         through hedge agreements; and

      -- The legal structure of the transaction, which includes the
         bankruptcy remoteness of the issuer.

                     PRELIMINARY RATINGS ASSIGNED
                 GoldenTree Loan Opportunities II Ltd.

      Class                            Rating      Amount (mil. $)
      I-A                              AAA                   185.0
      I-B                              AAA                    60.0
      I-C*                             AAA                    10.0
      IIa                              AA-                    12.0
      IIb                              AA-                     8.0
      III                              A-                     34.0
      IV                               BBB                    34.0
      Va                               BB                     10.0
      Vb                               BB                      2.0
      Vc                               BB                      2.0
      A combination securities*        AAA                    13.0
      B combination securities         N.R.                   10.0
      C combination securities         N.R.                   10.5
      Preferred shares                 N.R.                   46.0

*The class I-C and A combination securities are rated to principal
(accreted value) only.


GREEN POWER ENERGY: Watts & Scobie Expresses Going Concern Doubt
----------------------------------------------------------------
According to the Auditors Report by Watts & Scobie, CPAs, dated
June 20, 2003, concerning Green Power Energy Holdings Corporation:
"[T]he Company has an immediate but unresolved need to obtain
significant long-term financing that raises substantial doubt
about its ability to continue as a going concern."

Subsequent to year end, the Company began implementing a plan to
convert the facility from a single fuel source, coal, to a
combination of coal, waste wood, and shredded tires.  The ultimate
cost of the conversion is estimated by management to be
approximately $400,000.  The Company expended approximately
$300,000 on this project during the first five months of 2003.

On April 23, 2003, Green Power Energy Holding, LLC was converted
into a regular corporation and merged with Dr. Owl Online, Inc.
(OWL), a publicly-held corporation which had no significant assets
or business operations.  As a result of this merger, the owners of
GPH hold 74% of the capital stock of Green Power Holdings Corp.,
the surviving parent company. This merger is expected to
facilitate the Company's access to sufficient capital to provide
operational funding and to liquidate the balance due under the
asset purchase agreement.

However, in June 2003, Cogentrix of North Carolina, Inc. agreed to
a 30-day extension of the due date for the $6,239,812  payment.
Management is negotiating with several financial institutions for
long-term financing to replace this debt, and expects to obtain it
in time to meet the extended due date but no firm commitment had
been received.  Failure to secure new long-term financing would
cause the Company to default on its debt to Cogentrix and to
create  substantial doubt with respect to its ability to continue
as a going concern.


HEADWAY CORPORATE: Section 341(a) Meeting to Convene on Aug. 13
---------------------------------------------------------------
The United States Trustee will convene a meeting of Headway
Corporate Resources, Inc.'s creditors on August 13, 2003, at 2:00
p.m., at 80 Broad Street, Second Floor, New York, New York 101004.
This is the first meeting of creditors required under 11 U.S.C.
Sec. 341(a) in all bankruptcy cases.

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

Headway Corporate Resources, Inc., with its headquarters in New
York, New York, provides human resource and staffing services. The
Company filed for chapter 11 protection on July 1, 2003 (Bankr.
S.D.N.Y. Case No. 03-14270).  Jeffrey L. Tanenbaum, Esq., at Weil,
Gotshal & Manges, LLP, represents the Debtor in its restructuring
efforts.  When the Company filed for protection from its
creditors, it listed estimated assets of over $10 million and
estimated debts of more than $50 Million.


IMCLONE SYSTEMS: Regains Compliance with Nasdaq Requirements
------------------------------------------------------------
ImClone Systems Incorporated (NASDAQ: IMCLE) has received written
notification from NASDAQ of its determination that the Company has
evidenced compliance with the current requirement for continued
listing on The Nasdaq National Market. As a result of the
Company's compliance, its trading symbol will revert back to
"IMCL" effective with the open of the market on July 10, 2003.

ImClone Systems Incorporated, whose March 31, 2003 balance sheet
shows a total shareholders' equity deficit of about $220 million,
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.


ISTAR FIN'L: Fitch Rates 7-7/8% Series E Preferreds at BB
---------------------------------------------------------
Fitch Ratings assigns a 'BB' rating to iStar Financial Inc.'s
7-7/8% series E cumulative redeemable preferred stock. The
securities rank pari passu with iStar's existing series A, B, C
and D cumulative redeemable preferred stock. iStar's senior
unsecured debt rating and Rating Outlook is 'BBB-' and Stable,
respectively.

The 2.8 million series E shares have an aggregate liquidation
preference of $140 million. The series E shares are being used to
redeem iStar's 9.5% series A cumulative redeemable preferred stock
with an aggregate liquidation preference of $140 million.
Approximately $80 million of the series A remains outstanding and
becomes callable in December 2003. The series E is non-callable
for a period of five years.

As this is an exchange of series E for series A securities, no
meaningful change to iStar's capitalization is expected as a
result of this transaction. However, the series E dividend is 163
basis points lower than the series A, and will save iStar
approximately $2.2 million per year, or approximately 6% of the
company's fiscal-year 2002 preferred dividend requirements.

Headquartered in New York City, iStar provides structured
financing and corporate leasing of high quality commercial real
estate nationwide. iStar leverages its expertise in real estate,
capital markets, and corporate finance to serve corporations with
sophisticated financing requirements. As of March 31, 2003, loans
and other lending investments totaled $3.2 billion and real estate
subject to operating leases totaled $2.3 billion.


JWS CBO: Fitch Affirms B+ Class D Senior Secured Note Rating
------------------------------------------------------------
Fitch Ratings affirms two classes of notes issued by JWS CBO 2000-
1, Ltd. These affirmations are the result of Fitch's annual review
process. The following rating actions are effective immediately:

-- $31,500,000 class C third priority senior secured notes 'BBB';

-- $23,250,000 class D fourth priority senior secured notes 'B+'.

Fitch does not rate the class A or class B notes of JWS CBO.

JWS CBO, a collateralized bond obligation managed by Stonegate
Capital Management, L.L.C., was established in July 2000 and
currently maintains most of its invested note proceeds in senior
unsecured and subordinated bonds. Fitch has reviewed in detail the
portfolio performance of JWS 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.

The JWS CBO portfolio has experienced some deterioration since its
inception, but has shown improvements over the last year of
performance. As of the most recent trustee report dated June 5,
2003, the current portfolio has 3.8% in defaulted securities and
18.6% in securities rated 'CCC+' or lower (excluding defaults)
calculated using the lower of the other agencies' ratings.
However, only 3.9% of the total collateral that is rated 'CCC+'
and below (excluding defaults) is trading below 70, which is
higher than Fitch's expected recovery rates on defaulted senior
unsecured bonds and subordinated bonds of 40% and 20%,
respectively.

Stonegate has been managing this portfolio well by trading premium
securities and reinvesting the proceeds in par or below assets,
thereby improving the structures overcollateralization levels.
Although there have been three payment dates with a failing OC
test, JWS CBO has had sufficient excess interest to cure the test
and continue paying current interest on the class C and D notes.
During this period, paydowns due to a failing OC test resulted in
a class A principal reduction of approximately $10 million. As of
the most recent trustee report, JWS CBO is passing all of its OC
tests and its interest coverage tests.

Fitch conducted cash flow modeling utilizing various default
timing and interest rate scenarios to measure the breakeven
default rates going forward relative to the minimum cumulative
default rates required for the rated liabilities. As a result of
this analysis, Fitch has determined that the current ratings
assigned to the class C and D notes still reflect the current risk
to noteholders.

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


KAISER ALUMINUM: US Bank Has Until July 18, 2003 to File Claims
---------------------------------------------------------------
In a Court-approved stipulation, Kaiser Aluminum Corporation and
its debtor-affiliates, and U.S. Bank National Association, the
indenture trustee for State Street Bank Trust Company, agree that
the new indenture trustee's deadline to file proofs of claim
against Alpart Jamaica Inc., KAE Trading, Inc., Kaiser Aluminum &
Chemical Investment Limited, Kaiser Aluminum & Chemical of Canada
Limited, Kaiser Bauxite Company, Kaiser Center Properties, Kaiser
Export Company, Kaiser Jamaica Corporation and Texada Mines Ltd. -
- the New Debtors -- on account of the Debtor-issued 12-3/4%
senior subordinated notes is extended from June 16, 2003 to
July 18, 2003.  U.S. Bank resigned as trustee for the securities.
The Debtors appointed Law Debenture Trust Company of New York as
successor trustee for the securities. (Kaiser Bankruptcy News,
Issue No. 29; Bankruptcy Creditors' Service, Inc., 609/392-0900)


KMART CORP: Hires Fredrikson & Byron as Property Tax Counsel
------------------------------------------------------------
For the past three years, the Kmart Debtors have turned to Burr
Wolff Co. for property tax advice and to manage the processing,
audit, payment, and, if necessary, challenges to of all Kmart real
and property taxes assessed by taxing authorities all over the
United States.  Among its responsibilities, Burr Wolff engages
counsel to pursue challenges and appeals of disputable tax
assessments.

Burr Wolff engaged Fredrikson & Byron, PA to litigate a variety
of property tax actions and appeals in Minnesota.  Burr Wolff
asked Fredrikson to pursue certain tax proceedings in the
Minnesota Tax Court, including appeals from certain assessors'
valuations as of January 2, 2002.  The appeals were filed on
April 30, 2003.

However, the Minnesota Tax Court has questioned Fredrikson's
authorization by the bankruptcy court to represent the Debtors in
the appeals.  For this reason, the Debtors ask the Court for
authority to employ Fredrikson as special property tax counsel to
pursue property tax protests, appeals, refunds and similar
proceedings in Minnesota.  Fredrikson will also render
professional services on special projects that may be assigned to
it in connection with the Minnesota tax proceedings.  The Debtors
believe that Fredrikson is well qualified and able to represent
them.

The Debtors propose to pay Fredrikson on a contingency basis.
The firm will be paid 26% if either the amount by which a
property tax is reduced or the amount a property tax refund is
increased due to its efforts.  The contingency fee will be
reduced to 20% when the additional 6% has yielded $70,000 in
compensation to the firm.  The Debtors will shoulder certain
expenses incurred in the prosecution of the tax proceedings.
Consistent with past practices, the Debtors will pay Burr Wolff,
who, in turn, will pay Fredrikson.

Thomas R. Wilhelmy, Esq., at Frederickson assures the Court that
his firm does not hold or present any adverse interest to the
Debtors or their estates.  Mr. Wilhelmy, however, discloses that
on January 18, 2002, Fredrikson filed a notice of attorney's lien
pursuant to Minn. Stat. Section 481.13 in the office of the
Michigan Secretary of State.  This was to perfect Fredrikson's
lien interest in any property tax refunds.  The firm anticipates
that Burr Wolff will pay the amounts owed to it.  As of the
Petition Date, Mr. Wilhelmy further reports, Fredrikson had
provided legal services valued at $558,179 for prepetition
services related to all Minnesota tax petitions. (Kmart Bankruptcy
News, Issue No. 59; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


L-3 COMMS: Will Publish Second Quarter Results on July 23, 2003
---------------------------------------------------------------
L-3 Communications (NYSE: LLL) intends to release its second
quarter results for the period ended June 30, 2003 on Wednesday,
July 23, 2003, before the open of the market. In conjunction with
this release, L-3 Communications will host a conference call on
the same day at 2:00 PM EDT that will be simultaneously broadcast
live over the Internet. Frank C. Lanza, chairman and chief
executive officer, Robert V. LaPenta, president and chief
financial officer, and Cynthia Swain, vice president - corporate
communications, will host the call.

                      Wednesday, July 23, 2003
                              2:00 PM EDT
                              1:00 PM CDT
                              12:00 PM MDT
                              11:00 AM PDT

Listeners may access the conference call live over the Internet at
the following web address:

   http://www.firstcallevents.com/service/ajwz384888983gf12.html

Allow fifteen minutes prior to the call to visit this site to
download and install any necessary audio software. The archived
version of the call may be accessed at this site or by dialing
(800) 642-1687 (passcode: 1691728) beginning approximately two
hours after the call ends through July 30, 2003 at 11:59 PM EDT.

Headquartered in New York City, L-3 Communications is a leading
merchant supplier of Intelligence, Surveillance and Reconnaissance
systems and products, secure communications systems and products,
avionics and ocean products, training devices and services,
microwave components and telemetry, instrumentation, space and
navigation products. Its customers include the Department of
Defense, Department of Homeland Security, selected U.S. Government
intelligence agencies, aerospace prime contractors and commercial
telecommunications and wireless customers. To learn more about L-3
Communications, visit the company's Web site at
http://www.L-3Com.com

                              *   *  *

As reported in Troubled Company Reporter's May 16, 2003 edition,
Standard & Poor's Ratings Services assigned its 'BB-' rating to
L-3 Communication Corp.'s new $300 million senior subordinated
notes due 2013. At the same time, Standard & Poor's affirmed its
'BB+' corporate credit rating on L-3. The outlook is stable.

"Ratings on New York, New York-based L-3 reflect a slightly below
average business profile and an active acquisition program, but
credit quality benefits from an increasingly diverse program base
and efficient operations," said Standard & Poor's credit analyst
Christopher DeNicolo. Acquisitions are an important part of the
company's growth strategy, and the balance sheet has periodically
become highly leveraged because of debt-financed transactions.
However, management has a good record of restoring financial
flexibility by issuing equity.


LNR PROPERTY: Calls 9-3/8% Sr. Subordinated Notes for Redemption
----------------------------------------------------------------
LNR Property Corporation (NYSE: LNR), one of the nation's leading
real estate investment, finance and management companies, has
called for redemption its 9-3/8% Senior Subordinated Notes due
2008.  The redemption date is August 8, 2003.  The redemption
price is 104.688% of the principal amount of the Notes.  The
redemption price will be paid, together with accrued interest from
March 16, 2003 to the August 8, 2003 redemption date, when the
Notes will be surrendered for redemption. Interest on the Notes
will stop accruing on the redemption date.

LNR will record a charge to its earnings for the quarter ending
August 31, 2003 to reflect the redemption of the Notes at a
premium.

LNR Property Corporation is a real estate investment, finance and
management company.

As previously reported in Troubled Company Reporter, Fitch Ratings
assigned a 'BB-' rating to LNR Property Corp's $350 million ten
year 7.625% senior subordinated notes. The notes have a final
maturity of July 15, 2013 and are pari passu with LNR's existing
senior subordinated debt. The Rating Outlook is Stable. Partial
proceeds from the transaction will be used to fully refinance
LNR's $200 million of 9.375% senior subordinated notes due in
2008.


LTV: Copperweld Signs-Up Standard & Poor's as Valuation Advisors
----------------------------------------------------------------
Copperweld Corporation asks Judge Bodoh's approval of its
employment of Standard & Poor's Corporate Value Consulting as
valuation advisors for its Chapter 11 case, nunc pro tunc to June
9, 2003, the day on which CVC actually began performing services
for Copperweld.

Shana F. Klein, Esq., at Jones Day in Cleveland, describes the
services to be rendered by CVC as:

        (1) estimation of the reorganization value of Copperweld,
            reflecting an estimate of Copperweld's enterprise
            value based on the Debtor's prospective 7-year plan
            of reorganization, including all administrative and
            legal costs of the Chapter 11 case; and
        (2) estimation of the liquidation value of Copperweld
            under two scenarios: going concern and orderly
            liquidation.

Mr. Myron Marcinkowski, Lead Managing Director for CVC, discloses
that CVC has a tiered fee structure.  For litigation matters or an
individual asset liquidation analysis, the fees are:

                                                             Hourly
            Professional               Position               Rate
            ------------               --------              ------
       Myron Marcinkowski      Lead Managing Director        $385
                               S&P - Atlanta
       James Marshall          Manager S&P - Atlanta         $285
       Senior Associate                                      $215
       Associate                                             $150

However, the expected fees for the services anticipated by CVC and
Copperweld are:

           Engagement Component                        Expected Fee
           --------------------                        ------------
     Service One - Reorganization value          $20,000 to $25,000
     Service Two -
       Liquidation Value for 3 operating groups  $35,000 to $45,000
     Service Three - Equity Allocation           $10,000 to $15,000
     Service Four - Disclosure Statement         Included
     Service Five - Attendance at confirmation
       Hearing                                   Included
                                                 ------------------
         Total expected fee                      $65,000 to $85,000

Mr. Marcinkowski discloses that CVC has done valuation work for
many parties-in-interest in these cases, although not in
connection with the matters on which CVC is to be employed.  These
parties in interest include:

         Interested Party                          Services
         ----------------                          --------
     Minnesota Power (potential purchaser)         Valuation
     Wellspring Capital (potential purchaser)      Price allocation
     Dewey Ballantine LLP                       Sell side advisory
     Kaye Scholer LLP                              Litigation
     Skadden Arps                                  Valuation
     McDermott Will & Emery (represents potential  Tax valuation;
       Purchasers)                                   litigation
     BP America                                    Valuation
     GATX Capital                                  Valuation
     State of Minnesota                            Market strategy
     First Energy (creditors' committee)           Valuation
     Citicorp Venture Capital (potential buyer)    Valuation
     Accenture                                     FAS 142 goodwill
                                                     impairment
     Volkswagen (customer)                         Valuation
     General Motors (customer)                     Market strategy
     Citicorp                                      Price allocation

Notwithstanding these and other relationships, Mr. Marcinkowski
avers that CVC is a disinterested party which neither holds nor
represents any interest adverse to the Debtor in the matters for
which CVC will be employed. (LTV Bankruptcy News, Issue No. 50;
Bankruptcy Creditors' Service, Inc., 609/392-00900)


LYONDELL CHEMICAL: Board Declares Regular Quarterly Dividend
------------------------------------------------------------
On July 9, 2003, the Board of Directors of Lyondell Chemical
Company (NYSE: LYO) (S&P, BB- Senior Secured Debt Rating,
Negative) declared a regular quarterly dividend of $0.225 per
share of common stock to stockholders of record as of the close of
business on August 25, 2003.

Lyondell has two series of common stock outstanding: Common Stock
and Series B Common Stock.  The regular quarterly dividend on each
share of outstanding Common Stock is payable in cash on
September 15, 2003.  Lyondell has elected to pay the regular
quarterly dividend on each share of outstanding Series B Common
Stock in kind in the form of additional shares of Series B Common
Stock on September 29, 2003.

Lyondell Chemical Company -- http://www.lyondell.com--
headquartered in Houston, Texas, is a leading producer of:
propylene oxide; PO derivatives, including propylene glycol,
butanediol and propylene glycol ether; toluene diisocyanate; and
styrene monomer and MTBE as co-products of PO production.  Through
its 70.5% interest in Equistar Chemicals, LP, Lyondell also is one
of the largest producers of ethylene, propylene and polyethylene
in North America and a leading producer of ethylene oxide,
ethylene glycol, high value-added specialty polymers and polymeric
powder. Through its 58.75% interest in LYONDELL-CITGO Refining LP,
Lyondell is one of the largest refiners in the United States
processing extra heavy Venezuelan crude oil to produce gasoline,
low sulfur diesel and jet fuel.


MAGELLAN HEALTH: Wachovia Seeks Stay Relief to Prosecute Claims
---------------------------------------------------------------
Wachovia Bank, National Association seeks relief from the
automatic stay to allow another tribunal to render a decision in a
pending civil action that will resolve the validity and amount of
Wachovia's prepetition claim against Magellan Health Services,
Inc.  If the stay is modified, Wachovia seeks limited abstention
by the Court from determining the validity and amount of the
Claim, except to the extent necessary to estimate the Claim.

Peter Janovsky, Esq., at Zeichner Ellman & Krause LLP, in New
York, informs the Court that Magellan has scheduled Wachovia's
Claim as a $30,000,000 contingent, unsecured, disputed claim.  As
of the Petition Date, Wachovia asserts a $40,000,000 claim,
including pre-judgment interest.  The Claim is the subject of a
lawsuit that Wachovia filed against Magellan in the Court of
Common Pleas for Richland County, South Carolina, in July 2000.
Magellan removed the case to the United States District Court for
the District of South Carolina, Columbia Division, where the case
is now pending.

The Claim is a prepetition claim arising from events that occurred
in 1988, 1989, and 1990 when Magellan was known as Charter Medical
Corporation and was headquartered in Macon, Georgia.  Wachovia
seeks to enforce two contractual indemnity agreements that Charter
executed for the benefit of The South Carolina National Bank,
which later merged into Wachovia.

Mr. Janovsky tells the Court that the principal fact witnesses
reside in South Carolina, North Carolina, or Georgia.  Wachovia's
two most important fact witnesses, neither of whom is employed by
Wachovia, reside in Columbia, South Carolina, where the lawsuit
is pending.  Two other very important fact witnesses for Wachovia,
neither of whom is employed by Wachovia, reside in or near
Charlotte, North Carolina, which is 90 miles from Columbia, South
Carolina.

Wachovia is represented by counsels who reside in Columbia, South
Carolina, and Magellan has been represented by counsel who also
resides in Columbia, South Carolina, or in Atlanta, Georgia.  The
lawsuit is assigned to the Honorable Margaret B. Seymour, United
States District Judge, who has two potentially dispositive
motions filed by Magellan under advisement.  The motions were
argued on February 20, 2003, and Judge Seymour would probably
have ruled on the motions in March if Magellan had not filed its
bankruptcy petition.

The facts of the case are somewhat complicated, and the parties
have consistently and repeatedly reported to the District Court
that a trial before a jury would require three weeks to complete.
If the case is tried non-jury by Judge Seymour, the trial could
probably be completed in two weeks.

Mr. Janovsky assures the Court that Wachovia does not, however,
seek to interfere with or limit the authority of the Bankruptcy
Court to estimate the claim pursuant to Section 502(c) of the
Bankruptcy Code.  Wachovia also does not seek relief from the
automatic stay with respect to enforcement of any judgment that
might be entered in Wachovia's favor on the Claim.  Any judgment
will be subject to the terms of a plan of reorganization
confirmed by the Court.

In re Sonnax Industries, Inc., 907 F.2d 1280, 1286 (2d Cir.1990),
adopted twelve factors enumerated by In re Curtis, 40 B.R. 795
(Bankr. D. Utah 1984), that a bankruptcy court should consider in
deciding whether to permit litigation to continue in another
forum.  Those twelve Sonnax factors and the manner in which they
apply, if at all, to this case are:

     1. Whether relief would result in a partial or complete
        resolution of the issues:  Granting the relief requested by
        Wachovia would clearly result in a complete resolution of
        all issues relating to the merits of Wachovia's Claim
        against Magellan and would leave no unresolved issues with
        which the Court would be required to deal;

     2. Lack of any connection with or interference with the
        bankruptcy case:  Wachovia's lawsuit against Magellan is
        connected to this bankruptcy case as it is a claim
        determination proceeding, but lifting the stay to allow
        determination of the claim in the District Court will not
        interfere with this bankruptcy case;

     3. Whether the other proceeding involves Magellan as a
        fiduciary:  Wachovia's lawsuit against Magellan does not
        involve Magellan as a fiduciary;

     4. Whether a specialized tribunal with the necessary expertise
        has been established to hear the cause of action:  No
        specialized tribunal has been established to hear
        Wachovia's lawsuit against Magellan, but the District Court
        before which the lawsuit is pending clearly has the
        expertise to deal with all issues in the case;

     5. Whether Magellan's insurer has assumed full responsibility
        for defending it:  Magellan has informed Wachovia that
        Magellan does not have any insurance to cover Wachovia's
        Claim;

     6. Whether the action primarily involves third parties:  No
        third parties are involved in Wachovia's lawsuit against
        Magellan;

     7. Whether litigation in another forum would prejudice the
        interests of other creditors:  Other creditors will not be
        prejudiced by allowing Wachovia's lawsuit to proceed in the
        court in which it is now pending;

     8. Whether the judgment claim arising from the other action is
        subject to equitable subordination:  The judgment claim
        that might arise from Wachovia's lawsuit against Magellan
        will not be subject to equitable subordination;

     9. Whether movant's success in the other proceeding would
        result in a judicial lien avoidable by the debtor:
        Wachovia is not proceeding in a state court forum seeking a
        lien by way of a money judgment or to transcribe any
        federal court judgment to state court.  Consequently, the
        resolution of the Claim would not result in a voidable
        judicial lien;

    10. The interests of judicial economy and the expeditious and
        economical resolution of litigation:  The interests of
        judicial economy will clearly be served by allowing
        Wachovia's lawsuit to proceed in the court in which it is
        now pending.  Judge Seymour is already familiar with the
        complex facts of the case and the legal issues remaining to
        be resolved, all of which must be decided under the laws of
        South Carolina.  Judge Seymour is in the best position to
        render an expeditious ruling on the pending motions filed
        by Magellan, and a trial before Judge Seymour in Columbia,
        South Carolina will be more economical for both Wachovia
        and Magellan;

    11. Whether the parties are ready for trial in the other
        proceeding:  The parties have completed discovery in
        Wachovia's lawsuit against Magellan and can be ready for
        trial on relatively short notice; and

    12. Impact of the stay on the parties and the balance of harms:
        The stay has completely halted Wachovia's lawsuit against
        Magellan.  But for the stay, the lawsuit would have been
        tried in June 2003.  Magellan will not be harmed by
        allowing the lawsuit to proceed in the court in which it is
        pending because Magellan's fact witnesses reside in
        Georgia, and counsel who have been defending Magellan in
        the lawsuit reside in Atlanta, Georgia, and Columbia, South
        Carolina.  By contrast, Wachovia's fact witnesses and
        counsel will be significantly inconvenienced by having to
        attend a trial before the Bankruptcy Court for the Southern
        District of New York.

                  Debtors and the Committee Object

In 1988, Wachovia's predecessor in interest, The South Carolina
National Bank, and WAF Acquisition Corporation, previously known
as Charter Medical Corporation and now known as Magellan, executed
a letter agreement, dated June 15, 1988, pursuant to which SCN
agreed to serve as the trustee of an employee stock option plan
that Charter formed in 1988.

Charter and SCN also executed an Employee Stock Ownership Trust
Agreement dated September 1, 1988, which formalized the trust
relationship between SCN and the ESOP.

In May, 1991, two participants in the ESOP filed a class action
against Charter, SCN and certain other parties.  The Knop Lawsuit
alleged that the defendants had breached certain of their
fiduciary duties to the members of the ESOP.  The Knop Lawsuit
was settled pursuant to a Stipulation and Agreement of Compromise
and Settlement, dated March 27, 1992.  The Settlement was
approved by, and incorporated in, an Order and Final Judgment by
the Honorable Seybourn H. Lynne, United States District Judge for
the Northern District of Alabama, dated April 30, 1992.  The Knop
Settlement Agreement contained, among other things, releases
among the parties, including a release of Charter by SCN.

In the later part of 1992, the Department of Labor filed a
lawsuit against SCN and the then president and chairman of
Charter, William A. Fickling, Jr., and members of his family, but
not Charter, alleging that the defendants had breached certain of
their fiduciary duties to the members of the ESOP.  The defendants
settled the DOL Lawsuit in June 2000.  In accordance with the
terms of the settlement, Wachovia, as successor by merger to SCN,
paid $30,000,000, $25,000,000 of which was paid to the ESOP and
the balance of which was paid to the United States Treasury as a
penalty.

In July 2000, Wachovia commenced the South Carolina Action against
Magellan, seeking indemnification of the $30,000,000 that Wachovia
paid to settle the DOL Lawsuit, plus attorneys' fees and expenses
and interest.  Specifically, Wachovia seeks in its Third Amended
Complaint to reform a certain indemnification provision in the
Trust Agreement and obtain contractual indemnification under the
Engagement Letter and/or the Trust Agreement.

The South Carolina Action was originally assigned to the Honorable
Dennis J. Shedd, United States District Judge.  In the fall of
2001, Judge Shedd was nominated to the United States Court of
Appeals for the Fourth Circuit.  On December 11, 2001, the South
Carolina Action was transferred to the Honorable Terry L. Wooten.
Judge Wooten ordered the parties to attend mediation and referred
all of Magellan's pending motions, including a motion to dismiss
the Third Amended Complaint in part and three motions for summary
judgment, to the Honorable Bristow Marchant, Magistrate Judge for
the District of South Carolina.

In March, 2002, Wachovia filed its Fourth Motion for Leave to
Amend Complaint and its proposed Fourth Amended Complaint.  The
proposed amended complaint adds a completely new cause of action
-- a plea for reformation of the Knop Settlement Agreement.
Magellan opposed the Fourth Motion for Leave to Amend on a number
of legal grounds.  The Fourth Motion for Leave to Amend Complaint
remains pending, and, thus, the proposed Fourth Amended Complaint
has not been deemed filed or served.

The parties attended mediation in April 2002 and, subsequently,
were able to reach a settlement conditioned on a number of
approvals.  As a result of the non-occurrence of such conditions,
however, the settlement was never consummated.

On December 12, 2002, the South Carolina Action was transferred
to the Honorable Margaret B. Seymour.  Shortly thereafter, Judge
Seymour conducted a telephonic scheduling conference.  At the
time, Magellan informed the Court that it would be re-filing four
dispositive motions that it had previously withdrawn without
prejudice to facilitate a possible settlement.  During the
conference, Judge Seymour indicated to the parties that the case
could be ready for trial in June if the pending motions did not
dispose of the case.  The case, however, was never scheduled for
trial in June.

On February 20, 2003, Judge Seymour held a hearing on all four of
Magellan's pending motions, issuing a written order denying
Magellan's motion to dismiss and an oral ruling denying one of
Magellan's motions for summary judgment.  Judge Seymour did not
rule on Magellan's two remaining motions for summary judgment,
nor did she rule on whether to allow Wachovia to file its Fourth
Amended Complaint.  The Judge did, however, direct Magellan not
to respond to the Third Amended Complaint until she had issued a
decision regarding the allowance of the Fourth Amended Complaint.
Consequently, Magellan has not answered the Third Amended
Complaint.

On the Petition Date, approximately three months after Judge
Seymour was assigned to the case and after only one hearing with
Judge Seymour presiding, all proceedings in the South Carolina
Action were stayed.

On May 15, 2003, Wachovia filed an unsecured claim against
Magellan in its Chapter 11 case with respect to the South Carolina
Action for $39,904,453.25.

Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New
York, argues that Wachovia's request should be denied because:

     1. There is no specialized tribunal to resolve Wachovia's
        Claims.  The South Carolina Action is nothing more than a
        traditional, run-of-the mill prepetition litigation.  No
        specialized tribunal is involved.  Wachovia's conclusory
        assertion that the District Court of South Carolina
        "clearly has expertise to deal with all issues in the
        case," does not serve to create a specialized tribunal
        where none exists.  Bankruptcy courts routinely adjudicate
        claims of this nature through the proof of claim process,
        and certainly can do so here and assure that these cases
        are not unduly delayed.

     2. The South Carolina Action directly involves Magellan and
        not third parties.  Unlike instances in which the stay is
        lifted to allow third parties to continue to assert their
        rights in litigation, Magellan is directly involved in the
        South Carolina Action.  In fact, the only parties to the
        South Carolina Litigation are Magellan and Wachovia.
        Accordingly, a vacation of the stay necessarily will
        involve substantial management attention and substantial
        cost to the Debtors' estates.

     3. Lifting the stay to permit the South Carolina Action to
        proceed will prejudice the interests of other creditors in
        the Debtors' Chapter 11 Cases.  Wachovia's assertion that
        lifting the stay will not prejudice other creditors could
        not be further from reality.  Vacating the stay
        unquestionably will not only significantly delay the
        administration of these cases, but could jeopardize the
        entire reorganization effort.  Confirmation of the Debtors'
        plan effectively is conditioned on the amount of allowed
        unsecured claims not being in excess of a certain amount.
        Accordingly, it is essential that contingent and disputed
        claims be determined expeditiously.  Permitting the South
        Carolina Action to proceed to liquidate the Wachovia Claim
        clearly will result in substantial delay, to the prejudice
        of all other creditors.  Moreover, the equity commitment
        proposals to be implemented pursuant to the Debtors' plan
        are conditioned on certain benchmarks being achieved.  If
        the Court were to cede claims resolution authority to the
        South Carolina court, these benchmarks likely will not be
        achieved and the entire reorganization process may be at
        risk.

     4. The interests of judicial economy favor resolution of
        Wachovia's claims in the Bankruptcy Court.  Wachovia has
        presented no evidence whatsoever showing that lifting the
        stay in this case would be in the interests of judicial
        economy and efficiency.  Wachovia infers that Judge Seymour
        is "in the best position to render an expeditious ruling on
        the pending motions" because the case is already pending
        before her and she is already familiar with the facts of
        the case.  Wachovia conveniently neglects to mention that
        Judge Seymour was only assigned to the South Carolina
        Action three months before the Petition Date, and
        apparently has no knowledge of the facts of this case that
        could not be gleaned from a thorough reading of the
        pleadings.

     5. It is evident that the parties are not ready for trial.  If
        Wachovia is permitted to proceed with its Fourth Amended
        Complaint, further discovery will be necessary and the
        issue regarding reformation of the Knop Settlement
        Agreement will have to be decided by the Northern District
        of Alabama, all of which will take significantly more than
        "just a few weeks."  Further, based on the court's
        published jury selection calendar, it appears that Judge
        Seymour will not even be available to schedule a trial on
        the matter until September.  The parties-in-interest in
        these cases simply cannot afford to have the parochial
        interest of one disputed claimant dictate the timing of the
        administration of these cases.

     6. The balance of harms weighs in favor of maintaining the
        stay.  Wachovia has presented no reason, much less a
        compelling reason, why the stay should be vacated.  The
        Wachovia Claim is not unique nor is the South Carolina
        Action.  It is the typical and customary type of claim that
        is routinely adjudicated by Bankruptcy Courts in the claims
        resolution process.  Simply stated, there is no undue harm
        or prejudice that Wachovia will suffer by reason of the
        stay and by requiring it to proceed like all other holders
        of disputed claims in these cases. (Magellan Bankruptcy
        News, Issue No. 10: Bankruptcy Creditors' Service, Inc.,
        609/392-0900)


MENNONITE GENERAL: Fitch Slashes Revenue Bond Rating to B+
----------------------------------------------------------
Fitch Ratings has downgraded to 'B+' from 'BBB-' the rating on
approximately $10.8 million Puerto Rico Industrial, Tourist,
Educational, Medical, and Environmental Control Facilities
Financing Authority hospital revenue bonds, series 1997 (Mennonite
General Hospital Project), and $36.5 million Puerto Rico
Industrial, Tourist, Educational, Medical, and Environmental
Control Facilities Financing Authority hospital revenue bonds
series 1996A (Mennonite General Hospital Project). Fitch maintains
a Negative Rating Outlook.

The downgrade stems from Mennonite's poor unaudited fiscal 2003
financial results, and extremely thin liquidity ratios. Mennonite
had an operating loss of $5 million in 2003 versus a break even
budget. These losses were primarily related to larger than
expected contractual allowances, inadequate premium pricing on its
health plan, and increasing supplies expense. Mennonite's
unrestricted cash and investments was $2.8 million at fiscal 2003
equaling a dangerously low 15 days cash on hand. Mennonite's days
in accounts receivable was also a very high 119 days at fiscal
2003. Bad debt expense continues to rise and was 5.2% of total
operating revenues in fiscal 2003 compared to 4.2% in fiscal 2002.
Both the increase in contractual allowances and rising bad debt
expense are factors of a weak economic climate in Mennonite's
primary service area with increasing unemployment.

Mennonite has responded to the losses in fiscal 2003 by increasing
premiums in its health plan, renegotiating its managed care
contracts and implementing case management initiatives. Through
the two months ended May 31, 2003, Mennonite had an operating loss
of $435,000 and has budgeted to lose $356,000 from operations in
fiscal 2004.

Although management intended to sell its medical office suites to
physicians, no action has been taken to date. Management estimated
that it could raise approximately $4.3 million in cash through
these sales which would equate to approximately 30 days cash on
hand, however, Fitch received no assurances that this will occur
over the short term. Mennonite will likely have a technical rate
covenant violation related to debt service coverage which was 0.9
times in fiscal 2003. Mennonite is in the process of retaining a
consultant to advise Mennonite on cost saving opportunities, which
Fitch believes will satisfy the bond document requirements.

The negative outlook reflects Fitch's belief that Mennonite will
continue to be impacted by the weak economic climate and rising
expenses. Despite this, Mennonite still maintains a strong market
share, which continues to result in good utilization growth.
Nonetheless, further deterioration in Mennonite's balance sheet or
operations could warrant further negative rating action.

Mennonite General Hospital is a two hospital system with a
combined 266 licensed beds (266 operated), located in Cayey and
Aibonito Puerto Rico. Mennonite had total operating revenues of
$71.3 million in fiscal 2003. Mennonite's disclosure to both Fitch
and bondholders has been excellent in terms of timeliness and
accuracy.


MESA AIR: Inks LOI with USAir for Up to 55 CRJ-700 Regional Jets
----------------------------------------------------------------
Mesa Air Group, Inc. (Nasdaq: MESA) has signed a Letter of Intent
with US Airways for a minimum of 25 and a maximum of 55 CRJ-700 70
seat regional jets. Under the LOI, the aircraft would be provided
by US Airways from its previously announced order from Bombardier.
All aircraft are expected to be put in service no later then
Dec. 31, 2004.

The LOI is subject to reaching a definitive agreement on terms and
conditions between Mesa and US Airways. The agreement with Mesa,
if finalized, conforms to the 'Jets for Jobs' provisions of the US
Airways collective bargaining agreement with the Air Line Pilots
Association.

Mesa currently has 52 50-seat regional jets under contract of
which 49 are currently operating in the US Airways system under a
long-term revenue guarantee agreement. The remaining three
aircraft are scheduled to be delivered this year.

"Regional jets are a critical piece of the US Airways
restructuring strategy," said Jonathan Ornstein, Mesa's Chairman
and CEO. "We are delighted to have the opportunity to
significantly expand this important part our operation. We would
like to thank our employees and employee leaders for their hard
work and vision which has made this possible."

Mesa currently operates 141 aircraft with 1,042 daily system
departures to 162 cities, 43 states, Canada and Mexico and the
Bahamas. It operates in the West and Midwest as America West
Express; the Midwest and East as US Airways Express; in Denver as
Frontier JetExpress and, commencing July 6, United Express; in
Kansas City with Midwest Express and in New Mexico and Texas as
Mesa Airlines. The Company, which was founded in New Mexico in
1982, has approximately 3,300 employees. Mesa is a member of the
Regional Airline Association and Regional Aviation Partners.


MINERS FUEL: William Schwab Appointed as Chapter 11 Trustee
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Pennsylvania
grants the request of the Acting United States Trustee for the
District of Region 3 to appoint William G. Schwab, Esq., as the
Chapter 11 Trustee to oversee Miners Fuel Company, Inc.

The U.S. Trustee tells the Court she consulted with three parties
before appointing Mr. Schwab:

      a) Michael Fiorillo, Esq., Counsel to the Debtor;

      b) Clayton W. Davidson, Esq., Counsel to LINC Credit, LLC;
         and

      c) Earl Gassaman, Service Tire Truck Center

The U.S. Trustee assures the Court that none of the parties
objected to the appointment of Mr. Schwab.  The U.S. Trustee
further stresses that Mr. Schwab has no connection with the
Debtor, creditors, or other parties in interest.

Miners Fuel Company Inc., with its headquarters in Tremont,
Pennsylvania, filed for chapter 11 protection on June 27, 2003
(Bankr. M.D. Pa. Case No. 03-53104).  The Miners Entities operate
a long haul solid waste transporting business, a fuel oil supply
business and a specialty waste company in Pennsylvania and New
Jersey.  Michael Fiorillo, Esq., at Fiorillo Law Office represents
the Debtors in their restructuring efforts.


MITEC TELECOM: Bolts from BEVE Buy-Out Talks with Partnertech AB
----------------------------------------------------------------
Mitec Telecom Inc. (TSX: MTM), a leading designer and manufacturer
of wireless network products, has discontinued discussions with
Partnertech AB of Sweden to sell to Partnertech all outstanding
shares of BEVE Electronics AB.

Mitec continues to explore disposing of its Swedish operations and
is currently in discussions with other parties with respect to
BEVE.

This does not reflect a change in Mitec's corporate strategy.

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.


MORGAN STANLEY: S&P Cuts Ratings on Series 2000-XLF Note Classes
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on classes
C, D, and E certificates of Morgan Stanley Dean Witter Capital I
Inc.'s commercial mortgage securities pass-through certificates
series 2000-XLF and removed them from CreditWatch negative, where
they were placed June 2, 2003. In addition, the 'AA' rating on
class B is affirmed and removed from CreditWatch negative, where
it was also placed June 2, 2003. Additionally, the 'AAA' is
affirmed on class A.

The rating actions stem from the recent appraisal reduction taken
in the amount of approximately $37.7 million based upon a value of
$82 million for the Market Center loan. The Market Center loan is
secured by a 744,401-square-foot office complex at 555 and 575
Market Street in San Francisco and represents 51% of the pool
balance, or $110 million out of a current deal balance of $215
million. The only other loan in the pool, 909 Third Avenue, is
expected to pay off in full at maturity this August. The appraisal
reduction has resulted in classes C, D, and E not receiving
timely interest payments. Based upon this most recent valuation,
it is likely that classes A, B, and C could be repaid upon
disposition of the property. The Market Center loan defaulted at
maturity on Feb. 1, 2003, and the special servicer, Midland Loan
Services Inc., expects to dispose of the property at a loss in the
next few months.

         RATINGS LOWERED AND REMOVED FROM WATCH NEGATIVE

             Morgan Stanley Dean Witter Capital I Inc.
                 Pass-through certs series 2000-XLF

                      Rating
         Class    To           From
         C        BB           BBB/Watch Neg
         D        CCC          B/Watch Neg
         E        D            CCC/Watch Neg

         RATING AFFIRMED AND REMOVED FROM WATCH NEGATIVE

             Morgan Stanley Dean Witter Capital I Inc.
                Pass-through certs series 2000-XLF

                      Rating
         Class    To           From
         B        AA           AA/Watch Neg

                         RATING AFFIRMED

             Morgan Stanley Dean Witter Capital I Inc.
               Pass-through certs series 2000-XLF

         Class     Rating
         A         AAA


NATIONAL EQUIPMENT: Has Until August 26, 2003 to File Schedules
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
gave National Equipment Services, Inc., and its debtor-affiliates
an extension to file their schedules of assets and liabilities,
statements of financial affairs and lists of executory contracts
and unexpired leases required under 11 U.S.C. Sec. 521(1).  The
Debtors have until August 26, 2003 to file these required
documents.

National Equipment Services, headquartered in Evanston, Illinois,
rents specialty and general equipment to industrial and
construction end users. The Company filed for chapter 11
protection on June 27, 2003 (Bankr. N.D. Ill. Case No. 03-27626).
James A. Stempel, Esq., at Kirkland & Ellis represents the Debtors
in their restructuring efforts.  When the Company filed for
protection from its creditors, it listed debts and assets of over
$100 million each.


NEW WORLD RESTAURANT: Completes Debt Refinancing Transactions
-------------------------------------------------------------
New World Restaurant Group, Inc. (OTC: NWCI.PK) has closed on an
offering of $160 million of 13% senior secured notes due 2008. The
company used the net proceeds of the offering, together with cash
on hand, to refinance its existing indebtedness, including its
senior secured increasing rate notes that had matured on June 15,
2003. New World also entered into a new $15 million senior credit
facility with AmSouth Capital.

"This refinancing of the company's debt, following upon the
recently announced equity restructuring agreement, will enable us
to overcome the final hurdle in our efforts to stabilize New
World's financial structure," said Anthony Wedo, chairman and
chief executive officer of New World. "With a rational capital
structure, we are now able to aggressively move forward with our
plans to strengthen and grow the company. We will now focus our
energies on continuing New World's role as a leading player and
innovator in the quick-casual restaurant industry."

The notes offering was made to qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as
amended. Jefferies & Company, Inc. acted as initial purchaser. The
notes have not been registered under the Securities Act or
applicable state securities laws, and may not be offered or sold
absent registration under the Securities Act and applicable state
securities laws or applicable exemptions from registration
requirements. Within 90 days, New World has agreed to file an
exchange offer registration statement with the Securities and
Exchange Commission pursuant to which it will offer holders freely
transferable notes.

New World Restaurant Group is a leading company in the quick
casual sandwich industry, the fastest-growing restaurant segment.
The company operates locations primarily under the Einstein Bros.
and Noah's New York Bagels brands and primarily franchises
locations under the Manhattan Bagel and Chesapeake Bagel Bakery
brands. The company's retail system currently consists of 455
company-owned locations and 288 franchised and licensed locations
in 32 states. The company also operates a dough production
facility and a coffee roasting plant.

As reported in Troubled Company Reporter's June 18, 2003 edition,
Standard & Poor's Ratings Services lowered its corporate credit
and senior secured ratings on quick-casual restaurant operator New
World Restaurant Group Inc. to 'D' from 'CCC-'.

All ratings were removed from CreditWatch, where they had been
placed May 20, 2003.


NEW WORLD RESTAURANT: S&P Assigns B- Rating over Industry Risks
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' rating to
Golden, Colorado-based New World Restaurant Group Inc.'s $160
million senior secured notes due 2008. The proceeds were used to
refinance its existing indebtedness including its $140 million
senior secured notes that matured on June 15, 2003.

Standard & Poor's also assigned its 'B-' corporate credit rating
to the company. The outlook is negative. A material adverse
outcome of the SEC and the Department of Justice investigations is
not factored into the rating.

"The ratings reflect the risks associated with New World's
relatively small size in the highly competitive restaurant
industry, its reliance on a single primary product and day part,
weak cash flow protection measures, and highly leveraged capital
structure," said credit analyst Robert Lichtenstein.

The restaurant industry is highly competitive, with many larger
and well-established restaurants that have substantially greater
financial and other resources than New World. In addition, many
competitors are less dependent on a single primary product
(bagels) and day part (breakfast) than the company. Barriers to
entry are low, because start-up costs associated with retail bagel
and similar food service establishments are not significant.
Moreover, local bagel shops provide effective competition.

The company expanded rapidly over the past several years,
acquiring Manhattan Bagel in 1998, Chesapeake Bagel in 1999, and
Einstein/Noah in June 2001. Although the company operates five
brands, management views the Einstein brand as its growth vehicle.
The company successfully consolidated corporate and manufacturing
facilities, and outsourced the remaining production, contributing
to an improvement in operating margins to 15.5% in 2002 from 13.5%
the year before. Same-store sales decreased 0.8% in the first
quarter of 2003, after gaining 1.9% in 2002 and 2.5% in 2001. The
company closed 10 underperforming stores in 2002, and more than
80 in previous years.

Standard & Poor's expects operating cash flow and the company's
revolving credit facility will be New World's primary sources to
service its debt and fund its capital expenditures.


NRG ENERGY: Files Second Amended Plan and Disclosure Statement
--------------------------------------------------------------
Scott J. Davido, Senior Vice President of NRG Energy, Inc.
relates that the NRG Energy Debtors' Second Amended Plan and
Disclosure Statement, which was delivered to the Court on June 26,
2003, classifies these entities as "Non-continuing Debtor
Subsidiaries":

     -- NRG FinCo,
     -- NRGenerating, and
     -- NRG Capital.

Furthermore, Mr. Davido reports that at any time prior to the
Confirmation Hearing, the Debtors may determine to remove NRG
Power Marketing Inc. from the Plan and pursue a liquidation of
PMI under a separate Chapter 11 plan.  This determination will
not affect the distributions under the Plan with respect to the
other entities treated under the Plan.

To facilitate the potential PMI liquidation, and an orderly
transition to a new power marketer to provide fuel supply, power
marketing and other services to NRG's generating facilities, on
June 16, 2003, NRG formed a new wholly owned subsidiary called
NRG Marketing Services LLC.  NRG Marketing is in the process of
qualifying itself to do business in several states and obtaining
tax identification numbers.

In addition, on June 17, 2003, NRG Marketing filed an application
with Federal Energy Regulation Commission under Section 205 of
the Federal Power Act for authority to sell power at market-based
rates.  After NRG Marketing receives all necessary qualifications
to engage in power marketing activities and establishes the
necessary business arrangements with counterparties, including
the posting of any necessary collateral, NRG Marketing will be in
a position to commence supplying fuel, marketing power and
providing other services to NRG's generating facilities.

Mr. Davido informs Judge Beatty that the Plan does not address
the reorganization of:

     (i) NRG Northeast Generating LLC, Arthur Kill Power LLC,
         Astoria Gas Turbine Power LLC, Connecticut Jet Power LLC,
         Devon Power LLC, Dunkirk Power LLC, Huntley Power LLC,
         Middletown Power LLC, Montville Power LLC, Norwalk Power
         LLC, Oswego Harbor Power LLC, and Somerset Power LLC --
         the Northeast Debtors, or

    (ii) NRG South Central Generating LLC, Louisiana Generating
         LLC, NRG New Roads Holdings LLC and Big Cajun II Unit 4
         LLC -- the South Central Debtors.

A significant factor in NRG's decision to exclude the Non-Plan
Debtors from the Plan is the Xcel settlement.  Xcel conditioned
its settlement that if NRG does not emerge from bankruptcy by
December 15, 2003, Xcel will be under no obligation to make the
Xcel Contribution.  December 15, 2003 is not an arbitrary date
because a significant portion of the cash that Xcel will use to
fund the Xcel Contribution would be derived from a worthless
stock deduction that Xcel expects to recognize as a result of the
loss of its NRG investment.  That loss is anticipated to arise at
the time Xcel's existing NRG common stock is cancelled as part of
the Plan.  If the plan becomes effective and NRG emerges from
bankruptcy in 2003, Xcel would expect to receive a cash refund
during the first part of 2004 of taxes paid in 2001 and 2002.
By contrast, if NRG emerges from bankruptcy in 2004, no refund
would be received until 2005 and the refund, when received, would
be significantly smaller.

Furthermore, if Xcel claims the loss in a year prior to the year
that NRG emerges from bankruptcy, NRG could lose its ability to
use a significant portion of its net operating loss carryforwards
that would otherwise be available to offset NRG's and its
subsidiaries' income in subsequent year.  The year's delay and
the smaller cash refund to Xcel would materially limit Xcel's
ability to fund the Xcel Contribution.

Given the magnitude of the potential payment from Xcel, Mr.
Davido concedes, it is imperative that NRG secure Plan
effectiveness by December 15, 2003.  Accordingly, NRG decided to
file a separate reorganization plan to move ahead as promptly as
possible.  With the varied issues involving the restructuring of
the Northeast Debtors and South Central Debtors, it is
questionable whether NRG would be able to address the Northeast
Debtors and South Central Debtors in the Plan and still emerge
from bankruptcy by December 15, 2003.

Rather than risk missing the Effective Date deadline and risk
forfeiting the Xcel Contribution, NRG decided that the interests
of the Debtors' creditors are best served by omitting the
Northeast Debtors and South Central Debtors from the Plan.
Nevertheless, NRG has continued to make substantial progress
towards reorganization of the Northeast Debtors and South Central
Debtors since the Petition Date.

Since the Petition Date, there has been substantial contact by
NRG and the South Central Debtors with the South Central
Noteholders' Committee, and its representatives regarding various
restructuring alternatives, including a sale of some or all of
the South Central assets.  In addition, the South Central Debtors
have regularly discussed all non-ordinary course transactions
involving the South Central assets with the South Central
Noteholders' Committee, and have reached an interim arrangement
with the South Central Noteholders regarding the use of cash
pledged under the South Central Notes.

While there is no final plan of reorganization for any of the
Non-Plan Debtors at this early stage of the Chapter 11 cases, NRG
does intend to file either separate plans or one or more joint
plans of reorganization for the Non-Plan Debtors as soon as
practicable.  It is NRG's current intention to maintain the
status of NRG Northeast and NRG South Central as its
subsidiaries.

In the course of the Chapter 11 Case, Mr. Davido explains, the
Debtors and the Non-Plan Debtors have endeavored to clearly
specify on the face of any order entered by the Court the Debtors
or Non-Plan Debtors to which the relief granted in the order
applies.  In the likely event that the Debtors emerge from
Chapter 11 before the Non-Plan Debtors:

     (a) to the extent an order specifies that the relief applies
         only to one or more Non-Plan Debtors, as of the Effective
         Date, the order will remain in full force and effect as to
         the Non-Plan Debtors, unless and until otherwise ordered
         by the Bankruptcy Court;

     (b) to the extent an order specifies that the relief applies
         only to one or more Debtors, as of the Effective Date, the
         Debtors will no longer be subject to the terms of the
         order on a prospective basis; and

     (c) to the extent an order specifies that the relief applies
         to both one or more Debtors and one or more Non-Plan
         Debtors, as of the Effective Date, the order will remain
         in full force and effect only as to the Non-Plan Debtors,
         and the Debtors will no longer be subject to the terms of
         the order on a prospective basis.

A full-text copy of NRG Energy's Second Amended Disclosure
Statement is available for free at:

http://bankrupt.com/misc/NRGEnergy::s_2nd_amended_disclosure_stat.pdf

(NRG Energy Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


OWENS & MINOR: Names Mark A. Van Sumeren as SVP, OMSolutions(SM)
----------------------------------------------------------------
Owens & Minor, (NYSE: OMI) (S&P/BB+/Stable) a FORTUNE 500 company
and the nation's leading distributor of national name-brand
medical and surgical supplies, has named Mark A. Van Sumeren as
senior vice president, OMSolutions(SM). Van Sumeren, most recently
a vice president at Cap Gemini Ernst & Young and a twenty-four
year veteran in healthcare, will assume leadership of the
OMSolutions(SM) group at Owens & Minor effective August 4, 2003.

Created in November 2002, OMSolutions(SM) is a supply chain
management consulting and implementation service, offering
healthcare customers programs such as outsourced materials
management, integrated operating room management, clinical
inventory management, and implementation of WISDOM(2)(SM), Owens &
Minor's innovative data mining tool. Current OMSolutions(SM)
engagements include consulting and outsourcing projects with
individual hospitals and hospital systems.

"We are extremely pleased that Mark Van Sumeren has agreed to lead
our OMSolutions(SM) group, which has gotten off to a fast start
this year," said Craig R. Smith, president and chief operating
officer of Owens & Minor. "His deep experience in healthcare
consulting, knowledge of the supply chain process, and general
knowledge of hospital customers will accelerate our already strong
momentum. Mark adds significant value to the team we have in place
and salutes our commitment to OMSolutions(SM) as a key
initiative."

Van Sumeren has been a national leader in CGEY's Health Provider
Supply Chain practice, which he created while at Ernst & Young. In
that position he was responsible for assisting healthcare clients
in making changes in organizational processes through redesign,
restructuring and reengineering. After joining Ernst & Young in
1983, Van Sumeren worked his way up the ranks to earn a
partnership position, and when Ernst & Young was acquired by Cap
Gemini in 2000, he was named a vice president.

"I'm truly excited about joining Owens & Minor," said Van Sumeren.
"I've always been impressed by the company, its people and
especially by their commitment to their customers. Further, the
OMSolutions(SM) team has already done an outstanding job
establishing and building the business. It is a tremendous honor
to be afforded the opportunity to join such a great team."

At CGEY, Van Sumeren served as engagement vice president for many
of the firm's largest healthcare clients, including Duke
University Health System, Northwestern Memorial Hospital, Lenox
Hill Hospital, Health Midwest, Medical University Health System,
Wm. Beaumont Health System, Rush System for Health and Stanford
University Medical Center. Other clients included academic medical
centers, teaching hospitals, integrated delivery systems and
community hospitals.

Prior to joining Ernst & Young, Van Sumeren was an internal
consultant at the Detroit Medical Center. He received his
undergraduate degree in industrial and operations engineering and
an MBA from the University of Michigan.

Owens & Minor, Inc., a Fortune 500 company headquartered in
Richmond, Virginia, is the nation's leading distributor of
national name brand medical/surgical supplies. The company's
distribution centers throughout the United States serve hospitals,
integrated healthcare systems and group purchasing organizations.
In addition to its diverse product offering, Owens & Minor helps
customers control healthcare costs and improve inventory
management through innovative services in supply chain management
and logistics. The company has also established itself as a leader
in the development and use of technology. For more information,
visit the company's Web site at http://www.owens-minor.com


PACIFIC MAGTRON: Sells LiveMarket Unit's Assets to LiveCSP Inc.
---------------------------------------------------------------
Pacific Magtron International Corp. (OTCBB: PMIC) has sold the
assets of its Lea Publishing Inc./LiveMarket subsidiary to LiveCSP
Inc., a newly formed corporation owned by the former employees of
LiveMarket.

As part of its previously announced plan to refocus on its core
business, Pacific Magtron has sold the intangible assets and
associated hardware of its subsidiary, Lea Publishing Inc./dba
LiveMarket to the LiveCSP Inc. for $5,000 in cash and for 24
months of continuing software service and support from LiveCSP for
the company's LiveWarehouse.com subsidiary.

Ted Li, president and CEO of Pacific Magtron International Corp.,
said, "While it is difficult to part with products we strongly
believed in, it is in the best interest of the company to continue
to re-focus on its core competencies. We believe that the team at
LiveCSP is the best one to continue the development and support of
the LiveMarket products because this group was involved in the
original development of LiveMarket's flagship products (LiveSell
and LiveExchange)."

"We are excited about the acquisition of LiveMarket and feel its
customers will benefit from our knowledge and dedication to the
LiveSell and LiveExchange product offerings," stated Marc Huynen,
president of LiveCSP. "We expect that our purchase of LiveMarket
will enable LiveMarket to grow and prosper."

Pacific Magtron International Corp. is an enterprise dedicated to
providing total hardware solutions in the computer peripheral
marketplace. For more information, visit Web site at
http://www.pacificmagtron.com

                          *     *     *

                Liquidity and Capital Resources

In its most recent SEC Form 10-Q, the Company reported:

"It is our business plan that we finance our operations
primarily through cash generated by operations and borrowings
under our floor plan inventory loans and line of credit.  The
continued  decline in sales, the continuation of operating
losses or the loss of credit facilities could have a material
adverse effect on the operating cash flows of the Company.

"As of June 30, 2002, the Companies did not meet the revised
minimum tangible net worth and profitability covenants, giving
Transamerica,  among other things, the right to call the loan
and immediately terminate the credit facility. On October 23,
2002, Transamerica issued a waiver of the default occurring on
June 30, 2002 and revised the terms and covenants under the
credit agreement.  Under the revised terms, the credit facility
includes FNC as an additional borrower and PMIC continues as a
guarantor.  Effective October 2002, the new credit limit is
$3 million in aggregate for inventory loans and the letter of
credit facility. The letter of credit facility is limited to $1
million.  The credit limits for PMI and FNC are $1,750,000 and
$250,000, respectively. As of September 30, 2002, the Companies
did not meet the revised  covenants relating to profitability
and tangible net worth. This gives Transamerica, among other
things, the right to call the loan and immediately terminate the
credit facility.

"On May 31, 2002 the Company entered into a Preferred  Stock
Purchase  Agreement with an investor.  Under the agreement, the
Company agreed to issue 1,000 shares of its preferred stock at
$1,000 per share. The Company issued 600 shares of its preferred
stock and warrants for  purchasing  400,000  shares of the
Company's common stock for a net proceeds of $477,500 on May 31,
2002.  We expect to issue the additional 400 shares for an
estimated  gross  proceeds of $370,000 in the fourth quarter
2002. Even though we have completed the required  registration
of the  underlying  common stock in October 2002, there is no
assurance these remaining 400 shares will be sold.

"At September 30, 2002, the Company had  consolidated  cash and
cash equivalents totaling $2,667,400 (excluding $250,000 in
restricted cash) and working capital of $3,960,400, a decrease
of $1,774,500 compared to the working  capital at December 31,
2001.  At December 31, 2001, we had consolidated  cash and cash
equivalents  totaling  $3,110,000 (excluding $250,000) in
restricted cash) and working capital of $5,734,900.  The
decrease in working capital is primarily due to an increase in
accounts payable.

"Net cash used in operating activities during the nine months
ended September 30, 2002 was $233,600,  which principally
reflected the net loss incurred during the period,  and an
increase  in  inventories, which was partially offset by an
increase in accounts payable and a decrease in accounts
receivable.  On June 12, 2002, the Company received a Federal
income tax refund of $1,034,700.

"Net cash used by investing activities during the nine months
ended September 30, 2002 was  $102,300, resulting  from the
purchases of property and equipment of $128,000  and an increase
of $22,700 in deposits  and other  assets.  These uses were
partially offset by the proceeds from the sale of property and
equipment.

"Net cash used in financing  activities  was  $106,700 for the
nine months ended September 30, 2002,  primarily due to net
decreases in the floor plan inventory loans and principal
payments on the mortgages on our office facility.  This was
partially  offset by the net proceeds of $477,500 from the
issuance of preferred
stock.

"On July 13, 2001, PMI and PMIGA obtained  a new $4 million
(subject to credit and borrowing  base limitations) accounts
receivable and inventory  financing facility from Transamerica
Commercial Finance Corporation.  This  credit  facility  has a
term  of two years,  subject to automatic  renewal  from year to
year  thereafter.  The credit facility can be terminated by
either party upon 60 days' prior written notice and immediately
if the  Companies lose the right to sell or deal in any product
line of inventory. The Companies are subject to an early
termination  fee equal to 1% of the then established  credit
limit. The facility  includes a $2.4 million inventory line
(subject to a borrowing base of up to 85% of eligible  accounts
receivable plus up to $1,500,000 of eligible inventories), a
$600,000 working capital line and a $1 million letter of credit
facility used as security for inventory purchased on terms from
vendors in Taiwan. Borrowing under the inventory loans are
subject to 30 to 60 days  repayment,  at which time interest
begins to accrue at the prime rate,  which was 4.75% at
September 30, 2002.  Draws on the working capital line also
accrue interest at the prime rate.

"Under the agreement, PMI and PMIGA granted Transamerica a
security interest in all of their accounts,  chattel paper,
cash, documents, equipment, fixtures, general intangibles,
instruments, inventories, leases, supplier benefits and
proceeds of the foregoing.  The Companies are also required to
maintain certain financial covenants. As of December 31, 2001,
the Companies were in violation of the minimum tangible net
worth covenant. On March 6, 2002, Transamerica issued a
waiver of the default and revised the covenants  under the
credit  agreement retroactively to September 30, 2001. The
revised covenants require the Companies to  maintain  certain
financial  ratios  and  to  achieve  certain  levels  of
profitability. As of December 31, 2001 and March 31, 2002, the
Companies were in compliance with these revised covenants.  As
of June 30, 2002, the Companies did not meet the revised
minimum  tangible net worth and  profitability  covenants,
giving  Transamerica,  among  other  things,  the  right  to
call  the  loan and immediately terminate the credit facility.

"On October 23, 2002, Transamerica  issued a waiver of the
default  occurring on June 30, 2002 and revised the terms and
covenants  under the credit  agreement. Under the revised
terms,  the credit  facility  includes  FNC as an  additional
borrower and PMIC  continues as a guarantor.  Effective  October
2002,  the new credit limit was reduced to $3 million in
aggregate for inventory  loans and the letter of credit
facility.  The letter of credit facility  is limited to $1
million.  The credit limits for PMI and FNC are $1,750,000  and
$250,000, respectively. As of September 30, 2002, there were
outstanding draws of $990,800 on the credit facility. As of
September 30, 2002, the Companies did not meet the covenants as
revised on October 23, 2002 relating to profitability  and
tangible net worth, constituting a technical  default.  This
gives  Transamerica, among other things,  the right to call the
loan and  immediately  terminate the credit facility.  We are
currently in discussions with  Transamerica to obtain a waiver
of the covenant  default.  There is no assurance  that a waiver
will be obtained from Transamerica nor that the covenants will
be revised with terms favorable to us.

"In March 2001, FNC obtained a $2 million  discretionary  credit
facility  from Deutsche Financial Services Corporation to
purchase inventory.  To secure payment, Deutsche obtained a
security interest in all of FNC's inventory, equipment,
fixtures, accounts, reserves,  documents, general intangible
assets and all judgments, claims, insurance policies, and
payments owed or made to FNC. Under the loan  agreement,  all
draws matured in 30 days.  Thereafter, interest accrued at the
lesser of 16% per annum or at the maximum lawful contract rate
of interest permitted under applicable law.

"FNC was required to maintain  certain  financial  covenants  to
qualify for the Deutsche  bank credit  line,  and was not in
compliance  with  certain of these covenants  as of June 30,
2002 and  December 31, 2001, which  constituted  a technical
default under the credit line.  This gave Deutsche the right to
call the loan and terminate the credit line.  The credit
facility was  guaranteed by PMIC and could be terminated by
Deutsche immediately given the default. On April 30, 2002,
Deutsche  elected to terminate the credit facility  effective
July 1, 2002. Upon  termination,  the  outstanding  balance must
be repaid in accordance with normal terms and provisions of the
financing agreement. As of September 30, 2002, there were
outstanding  draws of $11,600 on the credit line.  The entire
outstanding balance was repaid on October 9, 2002.

"Pursuant to one of our bank mortgage loans  with  a  $2,393,700
balance at September 30, 2002, we are required to maintain
certain  financial  covenants. During 2001, we were in violation
of a consecutive  quarterly  loss covenant and an EBITDA
coverage ratio covenant, which is an event of default under the
loan agreement that gives the bank the right to call the loan. A
waiver of these loan covenant violations  was obtained from the
bank in March 2002,  retroactive to September  30, 2001,  and
through  December 31,  2002.  As a condition for this waiver,
we transferred  $250,000 to a restricted  account as a reserve
for debt servicing. This amount has been reflected as restricted
cash in the consolidated financial statements.

"We presently have insufficient working capital to pursue our
long-term growth plans with respect to expansion of our  service
and product offerings.  We believe, however, that  our  existing
cash, trade credits from  suppliers, anticipated  income tax
refunds, and proceeds from issuance of additional preferred
stock will satisfy our anticipated requirements for working
capital to support our present operations through the next 12
months,  provided we are able to maintain our existing credit
lines or obtain  comparable  replacement credit facilities.

"On May 31, 2002 we received  net proceeds of $477,500  from the
issuance of 600 shares of 4% Series A Preferred  Stock.  We
expect an additional 400 shares will be issued in the fourth
quarter 2002. Even though we have completed the required
registration of the underlying common stock in October 2002,
there is no assurance  these  remaining  400 shares  will be
sold or that we will be able to obtain additional capital beyond
the issuance of these 1,000 shares of Preferred stock.  Upon the
occurrence of a Triggering  Event,  such as the Company were a
party in a "Change of Control Transaction," among others, as
defined, the holder of the  preferred  stock has the rights to
require  us to redeem its  preferred stock in cash at a minimum
of 1.5 times the Stated Value.  As of September 30, 2002, the
redemption  value of the Series A Preferred  Stock,  if the
holder had required  us to redeem  the Series A Preferred  Stock
as of that  date, was $912,200. Even though we do not expect
those Triggering Events will occur, there is no assurance  that
those events will not occur.  In the event we are required to
redeem our Series A Preferred Stock in cash, we might
experience a reduction in our ability to operate the business at
the current level.

"We are actively seeking additional capital to augment our
working capital and to finance our new business. However, there
is no assurance that we can obtain such capital,  or if we can
obtain  capital that it  will  be on terms that are acceptable
to us."


PG&E NATIONAL: Asks Court to Restrict Trading to Preserve NOLs
--------------------------------------------------------------
PG&E National Energy Group Inc., and its debtor-affiliates ask
Judge Mannes to "enforc[e] the automatic stay and establish[]
notice and hearing procedures that must be satisfied before
certain transfers of claims against PG&E National Energy Group,
Inc., and its Subsidiaries, or any beneficial interest therein,
are deemed effective."  In other words, NEG wants to restrict
trading in its debt securities.

                $1 Billion of Tax Benefits at Risk

Vice President and Assistant Treasurer John C. Barpoulis explains
that NEG fears unrestricted trading in its debt securities may
jeopardize the value of more than $1 billion of tax losses,
including built-in losses (i.e., asset tax basis in excess of
asset fair market value) and net operating loss carryforwards the
Company's accumulated to date.

NEG currently estimates that the aggregate tax basis of its
assets exceeds the aggregate fair market value of such assets by
substantially more than $1 billion. Thus, NEG has a "net
unrealized built-in loss" of approximately that amount.  NEG may
have NOLs during or upon the consummation of its reorganization
plan under chapter 11, such as by reason of the disposition of
its built-in loss assets, referred to above, but the existence
and amount of such losses depends on future events and therefore
cannot be known presently.  The Tax Losses are a valuable asset
of NEG's estate, and may be used by NEG to offset income and gain
during the pendency of its chapter 11 proceeding and after
emergence from chapter 11, thereby significantly reducing its
future federal income tax liability under applicable rules set
forth in the Internal Revenue Code of 1986, as amended.

The Debtors are concerned about the viability of NEG's Tax
Losses, however, because certain transfers of claims against NEG
could occur prior to confirmation of NEG's chapter 11 plan. Those
transfers could severely limit NEG's ability to use the Tax
Losses and could have significant negative consequences for NEG,
its estate and its reorganization process.

If an ownership change occurs pursuant to the consummation of a
confirmed chapter 11 plan and Section 382(1)(5) of the I.R.C.
does not apply, NEG's ability to use the Tax Losses will be
limited under Section 382. Section 382(1)(5), also known as the
"Bankruptcy Exception," applies to any ownership change that
occurs pursuant to the consummation of a confirmed bankruptcy
plan in which at least 50% of the stock (by value) of the debtor
is received by existing shareholders or "qualified creditors."  A
debtor's ability to utilize its tax losses without restriction is
generally preserved if Section 382(l)(5) applies to an ownership
change.  Very generally, "qualified creditors" are creditors who
have held their claims against the debtors for 18 months or more
before the petition date or who acquired such claims in the
ordinary course of the debtor's business and have held such
claims since they arose.  See I.R.C. Sec. 382(1)(5)(E); Treas.
Reg. Sec. 1.382-9(d).

Based on NEG's current information, the Bankruptcy Exception may
apply to the ownership change that will occur pursuant to the
consummation of a confirmed bankruptcy plan. However, additional
trading in the claims against NEG may cause the Bankruptcy
Exception not to be available, because buyers of those claims may
not be "qualified creditors."

                   $183,000,000 Transfer Limit

In order to preserve to the fullest extent possible the
flexibility to craft a chapter 11 plan that maximizes the use of
NEG's Tax Losses, the Debtors want to closely monitor certain
transfers of claims, so as to be in a position to act
expeditiously to prevent such transfers if necessary.
Specifically, the Debtors want notice and hearing procedures put
in place that will govern the trading of more than $183,000,000
of NEG-related debt obligations.  The Debtors estimate that the
total claims (including maximum liability under contingent
claims) against NEG are approximately $3.86 billion, so transfers
of less than $183 million aren't likely to trigger any loss of
tax benefits.  While the Debtors may face an uphill battle to
prevent the transfer, they want to talk about it and slow it
down.

Courts have previously recognized that built-in losses, like
NOLs, are property of the estate and must be protected. See,
e.g., In re WorldCom, Inc., et al., Case No. 02-13533 (AJG)
(Bankr. S.D.N.Y. March 4, 2003) (approving notification
procedures and transfer restrictions in order to protect tax
basis and NOLs).  Various courts have commonly granted the relief
requested herein, i.e., the restriction or enjoining of transfers
of claims in order to protect debtors against the possible loss
of their NOLs and built-in losses. See, e.g., In re WorldCom,
Inc., et al., Case No. 02-13533 (AJG) (Bankr. S.D.N.Y. March 4,
2003) (approving notification procedures and restrictions on
certain transfer of claims against and interests in the debtors);
In re Williams Comm. Group, Inc., Case No. 02-11957 (BRL) (Bankr.
S.D.N.Y. July 24, 2002) (debtors provided 30 days' notice to
object to proposed transfers of claims against the debtors
that would increase the transferee's holdings to or above levels
that could reasonably be expected to lead to a distribution of 5%
of the stock in the reorganized debtors); In re Ames Dept.
Stores, Inc., Ch. 11 Case No. 01-42217 (REG) (Bankr. S.D.N.Y.
August 20, 2001) (enjoining and establishing procedures
respecting transfer of common stock and claims).  See also
similar protection of NOLs granted respecting transfer of equity
interest in debtor: In re Maxxim Medical Group, Inc., et al.,
Case No. 03-10438 (PJW) (Bankr. D. Del. February 13, 2003)
(approving notification and hearing procedures for trading in,
and claiming worthless stock deduction in respect of, equity
securities of the debtor); In re Conseco, et al., Case No.
02-49672 (CAD) (Bankr. N.D. Ill. December 17, 2002) (limiting
certain transfers of, and trading in, equity interests of the
debtors and approving related notification procedures); In re
Worldtex, Inc., Case No. 01-785 (MFW) (Bankr. D. Del. Apr. 2,
2001) (debtors provided 30 days' notice to object to proposed
transfers that would result in the transferee holding 5% or more
of the debtors' common stock or decrease the ownership interest
of an existing 5% or greater shareholder); In re First Merchants
Acceptance Corp, 1998 Bankr. LEXIS 1816 (Bankr. D. Del. 1998)
(debtors provided 30 days' notice to object to proposed transfers
of stock in the debtors that would increase the transferee's
holding to or above certain level); In re Metrocall, et al., Case
No. 02-11579 (RB) (Bankr. D. Del. June 6, 2002) (debtors provided
5 business days' notice to object to proposed transfers of stock
that would result in transferee holding 5% or more of the
debtors' stock or a reduction in the ownership interest of an
existing 5% or greater shareholder); In re US Airways Group,
Inc., et al., Case No. 02-83984 (SSM) (Bankr. E.D. Va. Oct. 2,
2002) (debtors provided 10 days' notice to object to proposed
transfers of equities to and from 5% holders); In re Casual Male
Corp, Case No. 01-41404 (REG) (Bankr. S.D.N.Y. May 18, 2001)
(enjoining transfers of common stock and convertible notes that
would result in the transferee's holdings increasing to or beyond
4.99% and providing debtors 30 days' notice to object to certain
transfers); In re Southeast Banking Corp., 1994 WL 1893513
(Bankr. S.D. Fla. July 21, 1994) (enjoining 5% trades of common
stock); and In re Phar-mor, Inc., 152 B.R. 924 (Bankr. N.D. Ohio
1993) (enjoining shareholders from selling stock in the debtors
unless they obtained relief from the automatic stay). (PG&E
National Bankruptcy News, Issue No. 1; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


POLAROID CORP: Challenges California Tax Claim's Validity
---------------------------------------------------------
Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in Wilmington, Delaware, tells the Court that in 1976,
Polaroid Corporation sued Eastman Kodak Company to enjoin Kodak's
infringement of Polaroid's U.S. patents and to recover damages
from the infringement.  In 1985, the trial court ruled for
Polaroid, enjoined Kodak, and reserved the damages issue for
later determination.

The lawsuit's damages phase extended to January 1991 when the
trial court awarded Polaroid $233,055,432 lost profits and
$204,467,854 hypothetical royalties as damages.  The court also
awarded $435,635,685 judgment interest.  Subsequently, by the
Parties' agreement, on July 25, 1991, Polaroid received
$437,523,286 in damages and $487,003,268 judgment to settle the
lawsuit.

For the tax year 1991, Polaroid reported $437,523,286 in damages
and $485,614,925 in interest as non-business income on its
California tax return, netting a $2,635,630 non-business income.
In so doing, the income was solely allocable to Massachusetts --
Polaroid's primary place of commercial domicile.  Hence, Polaroid
did not pay taxes with respect to the Kodak judgment in
California.

Mr. Galardi continues that on May 10, 1995, the California
Franchise Tax Board issued an audit report with respect to its
examination of Polaroid's California tax returns for the tax
years 1990 and 1991.  In the Audit Report, the Board asserted its
position that the damages and interest paid to Polaroid resulting
from the Kodak litigation were taxable in part by California.
After the issuance of the Audit Report, Polaroid received two
Notices of Proposed Assessment for tax years 1990 and 1991.  On
August 29, 1995, Polaroid filed a protest in connection with its
receipt of the NPAs.

More than three years after Polaroid's protest, the Board granted
a hearing on December 8, 1998.  Polaroid received the ruling, in
the form of Notices of Action, affirming the assessments set in
the NPAs.  The issuance of a Notice of Action effectively ended
Polaroid's proceedings before the Board.  Although, Mr. Galardi
relates that Polaroid continued to file an appeal of the Notices
of Action to the California State Board of Equalization.
However, SBE's decision on the appeal upheld the determinations
of the Board.  Mr. Galardi tells the Court that although the
Board has not yet computed Polaroid's final liability, it is
estimated that Polaroid will owe approximately $3,100,000 in
taxes and not less than $4,800,000 in interest.

On December 26, 2001, the Board filed a proof of claim asserting
a $7,922,421 priority claim pursuant to Section 507(a)(8)(A)(iii)
of the Bankruptcy Code.  Mr. Galardi argues that the Claim is not
entitled to priority under Section 507 because it was assessed
prior to the Petition Date.

By this motion, the Debtors and the Official Committee of
Unsecured Creditors ask the Court, pursuant to Sections 505 and
507 of the Bankruptcy Code:

     (a) to determine that the Board's Claim is a general,
         unsecured claim rather than a priority claim as asserted
         in the Proof of Claim, or

     (b) in the event that the Claim is determined to be entitled
         to priority, to set a discovery and briefing schedule with
         respect to an action to determine the Claim amount and
         validity.

Mr. Galardi points out that the taxes were assessed more than 240
days prior to the Petition Date.  Thus, by virtue of Section
507(a)(8)(A), the Claim is a general, unsecured claim rather than
a priority claim for taxes that arise from business activities
conducted prior to 1991 -- 10 full years prior to the Petition
Date.

Furthermore, the Bankruptcy Code does not define the terms
"assessed" or "assessable" nor does it provide any guidance for
determining when assessment occurs.  Mr. Galardi explains that
what constitutes assessment of state taxes under Section
507(a)(8) is therefore open to Court interpretation.  In essence,
the legislative history requires a court to balance the interests
of the debtors and the debtor's creditors against the interests
of the taxing authority.  Since the Debtors have ceased
operations and are contemplating the solicitation of a
liquidating plan, the Court must balance the interest of the
Debtors' unsecured creditors against the interests of the Board.

Mr. Galardi notes that the Debtors' assets primarily consists of
35% of the stock of the entity that purchased the Debtors' assets
July 2002 and a relatively small amount of cash.  If the Claim
that relates to business conducted in the 1970s and 1980s was
determined to be a priority claim, a substantial portion of the
distribution, that would otherwise be distributed to the Debtors'
unsecured creditors, would be paid instead solely to the Board.
The result would then be inequitable.

The Board, in contrast, has had over eight years to collect on
its Claim.  In making its initial assessment, the Board was
extremely aggressive in its audit and invited protest from
Polaroid.  The Board's Claim is the sole remaining claim of any
state taxing authority related to the Kodak judgment.  Since
Polaroid's receipt of the Kodak judgment, it has negotiated
numerous tax assessments related to the Kodak judgment.  "It
would be then incongruous to allow the Board alone to receive a
substantial portion of the value that is slated to be distributed
to unsecured creditors and to reward the Board's aggressive, yet
dilatory tactics with respect to its Claim," Mr. Galardi
emphasizes.

Furthermore, a decision finding that the Claim is entitled to
priority effectively instructs potential debtors that they must
abandon any litigation, no matter how meritorious, at an early
stage, lest the obligations be awarded priority over all other
claims merely because of a hyper-technical interpretation of when
the tax obligation was "assessed."  Mr. Galardi says that the
interpretation is manifestly unfair and twists Congress'
carefully crafted priority scheme.

Mr. Galardi clarifies that in the event that the Court finds that
the Claim is entitled to priority status because the underlying
tax was "not assessed before, but assessable under applicable law
or by agreement, after, the commencement of the case", the
Debtors, under Section 505, would want to determine the validity
and legality of the Claim.

The Debtors would contest the Claim on two fronts:

     (1) the amount and legality of the underlying tax as an
         initial matter; and

     (2) the Board's claim for interest prior to the "assessment."

The underlying tax was assessed prior to the Petition Date.  Mr.
Galardi argues that in the event the tax will be determined to be
entitled to priority, the determination must be based on a
finding that the tax is "assessed" for purposed of section
507(a)(8)(A)(iii).  Under California state law, the decision of
the SBE is subject to de novo review in California state court.
However, prior to bringing the state court action, the taxpayer
must pay the tax.  In state court, the taxpayer's appeal is
styled as a complaint for refund.

In addition, if the tax is found to be "assessed" postpetition on
SBE's decision, the Debtors want to exercise their right to have
the Court determine the appropriate amount and priority of
interest, if any, payable pursuant to the Claim.

It is illogical to presume that the Board would collect interest
on its Claim for the time period preceding the "assessment" of
the underlying tax.  Taking the Board's best argument, it would
appear that the portion of the Claim relating to interest prior
to the postpetition "assessment" would be a general, unsecured
claim, not entitled to priority.

The Debtors expect that their request to determine the amount and
validity of the underlying tax will be a time-consuming and
expensive process.  The endeavor would not be cost-effective in
the event that the Court agrees with the Debtors' initial
position that the Claim is a general, unsecured claim.  Thus, the
Debtors do not want to pursue the motion until the time it is
determined that the Claim is entitled to priority status.

Accordingly, the Debtors expressly reserve their rights to
contest the amount and validity of the underlying tax represented
in the Claim under Section 505. (Polaroid Bankruptcy News, Issue
No. 40; Bankruptcy Creditors' Service, Inc., 609/392-0900)


POLYONE CORP: Reduces Earnings Outlook for Second-Quarter 2003
--------------------------------------------------------------
PolyOne Corporation (NYSE:POL), a leading global polymer services
company, expects to report an after-tax loss before special items
between $3.5 million and $5.5 million, or $0.04 to $0.06 per
dilutive share, for second-quarter 2003. Special items will
consist primarily of restructuring costs. PolyOne projects that
the special items will increase the net loss by approximately
$0.03 to $0.04 per dilutive share.

"The slow demand we observed in our North American sales for April
continued into May and June, when we normally experience seasonal
pickup," said Thomas A. Waltermire, PolyOne chairman and chief
executive officer. "The decline in demand has been broad based and
appears consistent with other views of the U.S chemical industry
and U.S. industrial production overall. In fact, the U.S.
Industrial Production Index (less the high-tech component) is
below the trough level we experienced in the fourth quarter of
2002."

In its first-quarter 2003 earnings release, PolyOne projected that
second-quarter revenues would improve seasonally compared with
first-quarter 2003, but would not equal the 12 percent sequential
increase over the comparable 2002 period. It now appears that
sales in the second quarter of 2003 will be approximately 1
percent above first-quarter 2003 sales of $646 million and below
the second-quarter 2002 level of $671 million.

PolyOne projects that Performance Plastics segment sales will be
up modestly in the second quarter versus the first quarter of
2003, led by North American Vinyl Compounds and International
Plastic Compounds and Colors. The Elastomers & Performance
Additives and Distribution segments are projected to show
sequential revenue decrease.

The Company expects reduced margins in its North American
Performance Plastics operations. Raw material costs rose sharply
in second-quarter 2003, more than offsetting selling price
increases implemented in most business operations.

In the first-quarter 2003 outlook commentary, PolyOne estimated
that its Resin & Intermediates segment, which comprises
principally the Oxy Vinyls, LP and SunBelt Chlor-Alkali equity
joint ventures, would realize an operating income improvement of
$10 million to $13 million in second-quarter 2003 compared with
second-quarter 2002. The Company now estimates that the
improvement will be between $6 million and $7 million. This
revised estimate is due primarily to lower-than-anticipated
polyvinyl chloride resin shipments coupled with unrealized
anticipated market selling prices and higher-than-anticipated
costs for natural gas and ethylene.

The Company anticipates that second-quarter 2003 operating income
before special charges will increase $0.5 million to $3.5 million
over the preceding quarter, but will be well below the second-
quarter 2002 level.

As a result of the $300 million debt issuance in early May 2003
and the restructuring of PolyOne's short-term borrowing
facilities, interest expense will be higher by approximately $5
million, or $0.03 per share.

Company Results Mirror U.S. Industrial Production PolyOne's North
American sales trends historically have shown a general
correlation with the U.S. Industrial Production Index, less the
high-tech component. After a modest increase in the first half of
2002, the index started declining in third-quarter 2002 and,
despite an increase in January 2003, trended downward through May
2003. (See index chart by using the following hyperlink to
PolyOne's Web site:
http://www.polyone.com/corp/invest/USIndustrialProduction.pdf)

PolyOne Second-Quarter 2003 Earnings Release and Conference Call
PolyOne will release its second-quarter 2003 results after the
close of business on July 29, 2003, and host a conference call at
9 a.m. Eastern time on July 30, 2003. The conference dial-in
number is 888-489-0038 (domestic) or 706-643-1611 (international),
conference topic: PolyOne Earnings Call. Replay number is 800-642-
1687 (domestic) or 706-645-9291 (international). The conference ID
for the replay is 6571857. The call will be broadcast live and
then via replay for two weeks on the Company's Web site:
http://www.polyone.com

PolyOne Corporation, with revenues approximating $2.5 billion, is
an international polymer services company with operations in
thermoplastic compounds, specialty resins, specialty polymer
formulations, engineered films, color and additive systems,
elastomer compounding and thermoplastic resin distribution.
Headquartered in Cleveland, Ohio, PolyOne has employees at
manufacturing sites in North America, Europe, Asia and Australia,
and joint ventures in North America, South America, Europe, Asia
and Australia. Information on the Company's products and services
can be found at http://www.polyone.com

As reported in Troubled Company Reporter's May 27, 2003 edition,
Fitch Ratings affirmed PolyOne Corporation's senior unsecured debt
rating at 'B' and assigned a 'B' rating to the new 10.625% senior
unsecured notes. The senior secured rating related to the credit
facility was upgraded to 'BB-' from 'B'. The Negative Rating Watch
was removed. The Rating Outlook is Negative.

The ratings reflect PolyOne's continued weak financial
performance.


PROVANT INC: Selling Certain Assets to Shed Debt Burden
-------------------------------------------------------
Provant, Inc. (POVT:PK) is mailing the following letter to its
stockholders of record:

Dear Stockholders:

      Financial statements for the three and nine months ended
March 31, 2003 are in the process of being reviewed by our
auditors and will be posted shortly on our Web site. As you will
see, the financial statements cover only the parent company and
Star Mountain, our last remaining subsidiary. The results of the
divisions we sold in December 2002 to Drake, Beam, Morin-Japan and
of our Senn Delaney Leadership Consulting Group, which we sold in
April 2003, are being treated as discontinued operations.

      During the quarter ended March 31, 2003 we replaced the
senior management of Star Mountain, promoting Joe Swerdzewski, the
head of Star Mountain's FPMI division, to CEO. Joe has done an
excellent job streamlining Star Mountain's operations.

      Provant's problem today, as it has been for a long time, is
the burden of too much bank debt at the parent company level. Each
time the banks have granted us an extension (the latest of which
runs to July 31, 2003), the costs have been very high. The simple
fact is that Provant owes much more than it could borrow today on
a commercial basis. While we have explored numerous alternatives,
the only ones that have borne fruit so far are the asset sales
described above.

      Last summer in connection with an extension of our bank loan,
Provant committed to the banks that it would pursue a sale of Star
Mountain. We retained for that purpose Quarterdeck Investment
Partners, an investment-banking firm specializing in the sale and
financing of government businesses. Following an intensive
marketing process, I am pleased to report that we have executed a
letter of intent, the terms of which contemplate an upfront cash
payment sufficient to pay Provant's existing indebtedness, ongoing
cash payments to help cover parent company expenses, and retention
by Provant of an equity stake in Star Mountain. How much that
equity stake will prove to be worth depends on how well Star
Mountain performs over the next few years.

      The letter of intent is non-binding and subject to various
conditions, including satisfactory completion of further due
diligence by the buyer and negotiation of a definitive agreement.
Of course, there are no guarantees that a transaction will be
completed. The transaction will require shareholder approval, and
the proxy statement for the shareholders meeting will contain a
more complete description.

      Your Board of Directors has been working hard in a difficult
situation to preserve value for the stockholders while meeting the
Company's obligations. Although many companies in similar
circumstances have simply given up and turned their assets over to
the banks, we continue to persevere.

      Questions have been raised regarding trading in Provant
stock. We are advised that the stock is trading on the pink sheets
under the ticker POVT.PK. Information regarding the pink sheets is
available at http://www.pinksheets.com

      We look forward to providing you more information regarding
the Star Mountain transaction in the upcoming weeks.

                     Sincerely,
                     John E. Tyson, Chairman

Stockholder information is also available on the World Wide Web at
http://www.provant.com


RELIANT RESOURCES: Selling Desert Basin Plant for $288 Million
--------------------------------------------------------------
Reliant Resources, Inc. (NYSE: RRI), has entered into a definitive
agreement for the sale of its 588-megawatt Desert Basin plant,
located in Casa Grande, AZ, to Salt River Project Agricultural
Improvement and Power District, of Phoenix, for $288.5 million.

The transaction is subject to regulatory approvals, including the
Federal Energy Regulatory Commission, and certain third-party
consents and approvals. The transaction is expected to close by
the end of 2003.

"The sale of our Desert Basin plant is consistent with our
strategy of tightening our strategic focus and strengthening our
balance sheet," said Joel Staff, chairman and chief executive
officer.

Reliant will use the proceeds to prepay indebtedness under its
existing credit facility or for the possible acquisition of
CenterPoint Energy, Inc.'s 81 percent interest in Texas Genco
Holdings, Inc.  The sale is expected to be neutral to earnings per
share in 2004.

Desert Basin, a combined-cycle facility, started commercial
operation in 2001 and is currently providing all of its power to
SRP under a 10-year power-purchase agreement.

Reliant Resources, Inc., based in Houston, Texas, provides
electricity and energy services to retail and wholesale customers
in the U.S. and Europe, marketing those services under the Reliant
Energy brand name.  The company provides a complete suite of
energy products and services to approximately 1.7 million
electricity customers in Texas ranging from residences and small
businesses to large commercial, industrial and institutional
customers.  Its wholesale business includes approximately 22,000
megawatts of power generation capacity in operation, under
construction or under contract in the U.S.  The company also has
nearly 3,500 megawatts of power generation in operation in Western
Europe.  For more information, visit
http://www.reliantresources.com

As reported in Troubled Company Reporter's July 1, 2003 edition,
Reliant Resources, Inc.'s $550 million 9.25% senior secured notes
due 2010 and $550 million 9.50% senior secured notes due 2013 were
rated 'B+' by Fitch Ratings.


ROBOTEL ELECTRONIQUE: Liquidating Assets Due to Insolvency
----------------------------------------------------------
Electrohome Limited has been informed that all of the assets of
its 90%- owned insolvent subsidiary Robotel Electronique Inc., of
Laval, Quebec, are in the process of being liquidated, with all of
the proceeds directed to Robotel's bank as a secured creditor.
Robotel ceased operations on May 30, 2003 and all of its officers
and directors, including those nominated by Electrohome, have
resigned.

It appears that Robotel will not repay any of its secured or
unsecured obligations to Electrohome. As a result and as
previously announced, Electrohome will write off the entire $6.0
million it has invested in Robotel, including equity shares, loans
and advances. On a consolidated basis before tax, the loss is
expected to be $2.8 million and will be recorded in the third
quarter. Of this amount, only $0.3 million represents a cash
outlay.

Electrohome continues to hold a 26% interest in the newly merged
Fakespace Systems Inc., which is the largest international company
exclusively in the advanced visualization marketplace, and a small
minority interest in Immersion Studios Inc., which produces
specialty digital interactive cinema. Electrohome also owns its
300,000 sq. ft. facility in Kitchener, Ontario, most of which is
leased to external tenants. Electrohome's shares are traded on the
TSX under the symbols ELL.X.


STELCO INC: Pursuing Cost-Reduction Talks with U.S.W.A. Leaders
---------------------------------------------------------------
Stelco Inc. senior management representatives from the Corporation
and its business units met on July 8 with United Steelworkers of
America national, district and local union executives to discuss
Stelco's current position.

The purpose of the meeting was to enable Stelco officials to
outline current business conditions, the Corporation's financial
position and its plans for improving performance. The Corporation
requested that the union and the hourly employees they represent
support the Corporation's need for cost reduction with significant
labor cost reductions and productivity improvements.

Jim Alfano, Stelco's President and Chief Executive Officer, stated
that, "This was an important meeting. It is imperative that we
address all areas of cost reduction to improve our financial
performance and competitive position, and labor costs are a
critical component. All of our people have a very significant
stake in the Corporation, and it is in their best interest to
fully support our improvement plans. I believe, with their support
for our initiatives, we will be successful in addressing the
current challenges and improving our competitive position."

No further comments will be made at this time given the
confidential nature of the discussions between the Corporation and
the U.S.W.A.

Stelco Inc. is Canada's largest and most diversified steel
producer. Stelco is involved in all major segments of the steel
industry through its integrated steel business, mini-mills, and
manufactured products businesses. Stelco has a presence in six
Canadian provinces and two states of the United States.
Consolidated net sales in 2002 were $2.8 billion.

                            *   *   *

As previously reported, Standard & Poor's Ratings Services lowered
its long-term corporate credit rating on integrated steel producer
Stelco Inc. to 'B' from 'BB-', senior unsecured debt rating to 'B-
' from 'BB-', and subordinated debt to 'CCC+' from 'B'. At the
same time, the ratings were removed from CreditWatch, where they
were placed April 29, 2003. The outlook is negative.


STELCO: Steelworkers Driven to Develop Own Cost-Cutting Plans
-------------------------------------------------------------
United Steelworkers' directors and local union leaders from Stelco
Inc.'s operations across Canada agreed Wednesday that information
received Tuesday from Stelco Inc. senior management should not be
taken at face value, and that the union will develop its own plan
to make improvements that will ensure Stelco's future
sustainability.

The statement makes it clear that the union has always been
prepared to work with the company to make improvements to Stelco's
competitiveness.

The leaders from six local unions and the Steelworkers' four
elected directors met for three days, including a historic meeting
for two hours on Tuesday with Stelco CEO Jim Alfano and other
senior management.

"Right from the beginning of our union we have always been
prepared to work with Stelco to reduce costs and improve its
competitiveness," the statement said. "But we've never been
prepared just to accept what Stelco says without question.

"We will address these issues on our own terms, not theirs.
"We are prepared to work with the company to reduce costs, on a
local-by-local basis. "We are not prepared to open our collective
agreements."

The six local union presidents are: Rolf Gerstenberger, Local
1005, Hilton Works, Hamilton; Bill Ferguson, Local 8782, Lake Erie
Works; Scott Duvall, Local 5328, Stelwire, Hamilton; Serge
Gailloux, Local 6951, McMaster Works, Contracoeur, QC; Guy
Gaudette, Stelfil, Lachine, QC; Paul Perreault, Alta Steel,
Edmonton.

                            *   *   *

As previously reported, Standard & Poor's Ratings Services lowered
its long-term corporate credit rating on integrated steel producer
Stelco Inc. to 'B' from 'BB-', senior unsecured debt rating to
'B-' from 'BB-', and subordinated debt to 'CCC+' from 'B'. At the
same time, the ratings were removed from CreditWatch, where they
were placed April 29, 2003. The outlook is negative.


TELENETICS CORP: Peter E. Salas Discloses 9.999% Equity Stake
-------------------------------------------------------------
Peter E. Salas, as General Partner of Dolphin Offshore Partners,
L.P., is the beneficial owner of 11,826,907 Telenetics
Corporation's common shares and 3,599,878 warrants (which are
subject to contractual limitations that prohibit exercise of the
warrants if such conversion or exercise would result in the
beneficial owner owning in excess of 9.999% of Telenetics
Corporation's shares of common stock).  11,935,807 shares are
approximately 25.10% of the 47,549,965 shares of the Company's
common stock outstanding as of May 14, 2003. 7,585,858 common
shares were received as part of an exchange for the $2,115,000
face value of convertible debentures due January 2003.

Mr. Salas has the exclusive right to vote and/or dispose of the
shares of common stock at any regular or special meetings of the
shareholders of the Company and/or any actions in lieu of meetings
or shareholder proceedings.

Based in Lake Forest, Telenetics designs, manufactures and
distributes wired and wireless data communications products for
customers worldwide. Telenetics offers a wide range of industrial
grade modems and wireless products, systems and services for
connecting its customers to end-point devices such as meters,
remote terminal units, traffic and industrial controllers and
remote sensors.

Telenetics also provides high-speed communications products for
complex data networks used by financial institutions, air traffic
control systems and public and private wireless network operators.
Additional information is available at http://www.telenetics.com

As reported in Troubled Company Reporter's April 23, 2003 edition,
the Company's auditors Haskell & White LLP stated in its report
for the period December 31, 2002: "The [Company's] consolidated
financial statements have been prepared assuming that the Company
will continue as a going concern. . . .  [T]he Company has
suffered recurring losses from operations, has used cash in
operations on a recurring basis, has an accumulated deficit, and
is involved in a dispute with a significant contract manufacturer
that, among other things, raise substantial doubt about its
ability to continue as a going concern. Management's plans in
regard to these matters. The consolidated financial statements do
not include any adjustments that might result from the outcome of
this uncertainty."


TRANSTEXAS GAS: Files First Amended Plan & Disclosure Statement
---------------------------------------------------------------
TransTexas Gas Corporation, (OTCBB:TTXGQ), announced that on
June 27, 2003, the Company, together with its wholly owned
subsidiaries, Galveston Bay Processing Corporation and Galveston
Bay Pipeline Company, filed its First Amended Joint Plan of
Reorganization for Debtors under Chapter 11 of the Bankruptcy Code
dated as of July 8, 2003, and First Amended Joint Disclosure
Statement for Debtors' Joint Chapter 11 Plan of Reorganization
under Chapter 11 of the Bankruptcy Code, dated as of July 8, 2003,
in Case No. 02-21926 (Jointly Administered) in the United States
Bankruptcy Court for the Southern District of Texas, Corpus
Christi Division.

On that same date, Thornwood Associates, LP filed a competing
Disclosure Statement for Creditor's Joint Plan of Reorganization
and Creditor's Joint Plan of Reorganization regarding TransTexas
and its subsidiaries. The Debtors' Amended Disclosure Statement,
Debtors' Amended Plan, Thornwood Disclosure Statement and
Thornwood Plan are available on the Company's Web site at
http://www.transtexasgas.com

A Confirmation Hearing is scheduled at 9:00 a.m. (Central Time) on
Aug. 5, 2003, in the Bankruptcy Court. The time fixed for filing
objections in the Bankruptcy Court to the confirmation of Debtors'
Amended Plan and/or the Thornwood Plan is July 25, 2003. The time
fixed for receipt of ballots accepting or rejecting the Debtors'
Amended Plan and/or the Thornwood Plan is July 31, 2003.

TransTexas is engaged in the exploration, production and
transmission of natural gas and oil, primarily in South Texas,
including the Eagle Bay field in Galveston Bay and the Southwest
Bonus field in Wharton County. Information on the Company,
including the Company's filings with the Securities and Exchange
Commission may be found on the Internet at
http://www.transtexasgas.com/


TRANSWITCH: Nasdaq Approves Listing Transfer to National Market
---------------------------------------------------------------
TranSwitch Corporation (NASDAQ: TXCC) a leading developer and
global supplier of innovative high-speed VLSI solutions for
communications applications, announced that its request to
transfer the listing of its common stock from The Nasdaq SmallCap
Market to The Nasdaq National Market has been approved by Nasdaq.
TranSwitch will begin trading on The Nasdaq National Market
effective at the opening of business on July 10, 2003.

TranSwitch's common stock will continue to trade under its current
symbol TXCC.

"We are pleased that TranSwitch is able to return to The Nasdaq
National Market," stated Dr. Santanu Das, President and Chief
Executive Officer of TranSwitch Corporation. "This is an important
milestone for the company and one we believe reflects the progress
TranSwitch has been making during this past year."

TranSwitch Corporation, headquartered in Shelton, Connecticut, is
a leading developer and global supplier of innovative high-speed
VLSI semiconductor solutions - Connectivity Engines(TM) - to
original equipment manufacturers who serve three end-markets: the
Worldwide Public Network Infrastructure, the Internet
Infrastructure, and corporate Wide Area Networks. Combining its
in-depth understanding of applicable global communication
standards and its world-class expertise in semiconductor design,
TranSwitch Corporation implements communications standards in VLSI
solutions which deliver high levels of performance. Committed to
providing high-quality products and service, TranSwitch is ISO
9001 registered. Detailed information on TranSwitch products, news
announcements, seminars, service and support is available on
TranSwitch's home page at the World Wide Web site at
http://www.transwitch.com

As previously reported, Standard & Poor's affirmed its 'B-'
corporate credit and senior unsecured debt ratings on Traswitch
Corp. At the same time, Standard & Poor's revised the company's
outlook to negative from stable. The outlook revision reflects
diminished liquidity and ongoing cash usage, stemming from a
severe decline in the company's markets. Transwitch's quarterly
revenue run rate has been below $5 million and negative free cash
flow has been about $20 million per quarter since June of 2001.

The company may face difficulties increasing revenues from a
very low base, given substantial competition and a rapidly
evolving technology environment in the communications equipment
market.


TY COBB HEALTHCARE: Fitch Cuts $17.8-Million Bonds Rating to BB+
----------------------------------------------------------------
Fitch Ratings downgraded Ty Cobb's outstanding $17,812,000
Hospital Authority of the City of Royston, GA revenue anticipation
certificates (Ty Cobb Healthcare System, Inc. Project) series 1999
to 'BB+' from 'BBB-'. The bonds have been removed from Rating
Watch Evolving. The Rating Outlook is Negative.

Over the past seventeen months Fitch has reviewed and analyzed Ty
Cobb's internal financial statements on a monthly basis, through
May 30, 2003. Despite overall financial improvement in 2002, Ty
Cobb fell short of its year-end projections of 70 days cash on
hand, days in accounts receivables below 75 days, and breakeven
bottom line performance.

While Fitch views Ty Cobb's improvements favorably, the downgrade
to 'BB+' is based on the organizations weak balance sheet,
operating performance, and debt service coverage. Furthermore,
Fitch believes numerous underlying issues and industry pressures
(revenue cycle management, nursing shortage, rising supplies and
insurance expenses, volatile utilization statistics, physician
recruitment, and continued losses at Barrow Community Hospital)
will continue to challenge management over the near-term. At
Dec. 31, 2002, Ty Cobb reported an operating margin equal to a
negative 2.6%, excess margin of negative 1.4%, and maximum annual
debt service coverage of 1.6x, all of which improved over 2001,
but are substantially below Fitch's 'BBB' medians. Additionally, a
slight decline in days in accounts receivables (81 days in 2002
compared to 84 days in 2001) led to an improvement in day's cash
on hand from 38 days to 48 days (Fitch's 'BBB' median is 98 days).

Revenue cycle management is one of Fitch's major concerns. Fitch
notes that the consulting team hired to improve Ty Cobb's
collections and revenue cycle is no longer providing its services
to the organization, which recently resulted in the complete
outsourcing of Ty Cobb's billing office operations. The overall
outcome of the prior consulting team was very positive during
their employment with the organization, resulting in dramatic
improvements in liquidity (through the seven months ended July 31,
2002 days cash on hand was 75 days), but once the consultants left
the organization, a noticeable decline in overall financial
performance could be seen. Fitch believes the outsourcing of Ty
Cobb's collections is positive, but could take some time to
realize significant improvements given its relatively poor payor
mix.

Additional concerns include the overall staffing shortages across
the system (both nursing and physicians), and the continued
operating losses at Barrow. In 2002, Ty Cobb showed substantial
improvements in its salary expenses, but, similar to its other
projections, fell short of its stated goals. The need for
additional physicians continues to increase given the recent and
projected increases in population and the departure of some
physicians over the past year. The lack of adequate staff resulted
in lower inpatient admissions in 2002 and through the first five
months of 2003. Management has implemented some major incentive
plans for the recruitment and retention of nurses and physicians,
which is viewed positively and has resulted in additional staff
over the past few months.

Despite positive six month interim period results from Barrow,
2002 audited results showed a substantial deterioration of all
financial ratios because of rising nursing expenses and a
significant increase in bad debt expenses and contractual
allowances due to a change in accounting methodology. Barrow's
operating performance at year-end was negative $3.8 million, which
represented more than a $5 million decline over the first half of
2002 (Barrow reported positive $1.3 million from operations
through June 30, 2002). External obstacles have prevented the
expected financial turnaround at Barrow, which has been a
financial drain since its acquisition in 2000 and will continue to
hinder the system's operating performance over the near-term.

On a positive note, Ty Cobb's other remaining facilities have
showed solid improvements in operating and bottom line
performance. Ty Cobb, Franklin and Madison County Facilities
improved operations by more than $1.4 million and bottom line
performance by nearly $1.8 million in 2002. Additionally Hart
County Hospital improved its operations by more than $2 million
and its bottom line by more than $1.5 million. The improvements at
these facilities are viewed very favorably, but do not completely
mitigate the external pressures on the organization or the
continued losses at Barrow.

The Negative Outlook is based on the various concerns facing
management over the next 2-3 years. Overall expenses are expected
to increase going forward and unless Ty Cobb is able to properly
address its accounts receivables, staffing situation, and improve
its volume and reimbursement, operational improvements made over
the past year may not be sustainable. Fitch believes management
has the capacity to improve this organization over the medium-term
and their ability to do so will play a vital role in Ty Cobb's
ultimate success or failure. If Ty Cobb is unable to maintain its
current liquidity, profitability, and coverage levels there could
be additional negative rating pressure.

Ty Cobb Healthcare System consists of 3 hospitals (210 operated
beds) and 3 nursing facilities (350 operated beds). The system had
$70.7 million in total operating revenue in FY 2002. Ty Cobb's
annual and quarterly disclosure to Fitch has been adequate in
terms of content, accuracy, and timeliness of financial
statements.


UNITED AIRLINES: US Bank Seeks Stay Relief to Control LA Deposit
----------------------------------------------------------------
U.S. Bank serves as Trustee for the California Statewide
Communities Development Authority.  On April 1, 2001, the CSCDA
issued the California Statewide Communities Development Authority
Special Facilities Revenue Bonds Series 2001, for $34,590,000.
The Bonds were to finance the acquisition, construction,
improvement, installation and equipping of the LAX Project.

The CSCDA deposited the proceeds in an interest account,
construction fund and a capitalized interest fund.  The CSCDA
loaned a portion of the proceeds to United Airlines by allowing it
to make draws from the Construction Fund.  United is obligated to
pay the principal and interest on the Bonds.  As of May 13, 2003,
the Construction Fund contained $2,968,808.

U.S. Bank received draw requests on the Construction Fund from
United on December 5, 2002 and December 13, 2002, for $1,191,547
and $233,824.  U.S. Bank has possession of the money in the
Construction Fund, which does not constitute property of United's
estate.  Consequently, U.S. Bank believes that the automatic stay
does not apply to its actions on these funds.  Out of an
abundance of caution, U.S. Bank asks Judge Wedoff to confirm that
the exercise of its rights to the Construction Fund is not a
violation of the automatic stay.

Katherine A. Constantine, Esq., at Dorsey & Whitney, in
Minneapolis, informs the Court that U.S. Bank's request is
substantially identical to those filed by HSBC Bank USA and
SunTrust.  On the hearing day for those requests, U.S. Bank and
United agreed on similar orders for the benefit of Bondholders
that U.S. Bank served as Indenture Trustee.  However, United
changed its mind and refused to submit the agreed orders unless
U.S. Bank agreed to release construction funds connected to the
indenture of trust and bonds that are completely separate and
totally unrelated to the indenture of trust. (United Airlines
Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


UNITED AIRLINES: Terminating Employee Stock Ownership Plan
----------------------------------------------------------
UAL Corporation has announced that it is terminating its employee
stock ownership plan and, with the participation and approval of
the International Association of Machinists and the Air Line
Pilots Association, distributing to participants in the ESOP the
assets in their respective ESOP accounts.

The ESOP termination follows the issuance of a regulation by the
Internal evenue Service that permits the ESOP to distribute the
ESOP shares to plan participants without jeopardizing UAL's net
operating loss tax benefits, which the Company believes are
important to its successful emergence from Chapter 11. To preserve
the NOL, the bankruptcy court earlier this year enjoined the sale
of UAL shares by major holders of the stock, such as the ESOP. As
a result of the IRS regulation, which effectively exempted
distributions of ESOP shares from the terms of the injunction, the
Company and its Creditors' Committee were able to approve the
distribution to ESOP participants.


UPC POLSKA: S&P Drops Corp. Credit Rating to D Over Bankruptcy
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Polish cable operator UPC Polska Inc. to 'D' from 'CC'
and lowered the senior unsecured debt rating on the company to 'D'
from 'C'. The downgrade follows the company's announcement that it
filed a petition for relief under Chapter 11 of the United States
Bankruptcy Code with the United States Bankruptcy Court for the
Southern District of New York on July 7, 2003. The company has
also filed a pre-negotiated plan of reorganization.

UPC Polska has already entered into a debt restructuring agreement
with United Pan Europe Communications N.V. subsidiaries UPC
Telecom and Belmarken Holding B.V. and a committee of third-party
bondholders that collectively hold the majority of UPC Polska
bonds. The ratings will subsequently be withdrawn.


UPC POLSKA: Wants Approval to Hire Baker & McKenzie as Counsel
--------------------------------------------------------------
UPC Polska, Inc., asks for permission from the U.S. Bankruptcy
Court for the Southern District of New York to employ and retain
Baker & McKenzie as its General Counsel.

"Baker & McKenzie is well suited for the type of representation,"
UPC Polska tells the Court.  Baker & McKenzie is a leading
multinational law firm, and has considerable experience in
virtually all aspects of law that may arise in this Chapter 11
Case.

Furthermore, Baker & McKenzie is familiar with the Debtor's
businesses and financial affairs.  The Debtor relates that
Baker & McKenzie has represented the Company in various corporate
and securities matters since its inception in 1997.  Moreover,
during the months preceding the Petition Date, Baker & McKenzie
assisted the Debtor in its negotiations with various debt holders
regarding a restructuring of the Debtor's capital structure, and,
ultimately in connection with its preparations to commence this
case, including the drafting of the Debtor's proposed Chapter 11
plan of reorganization and accompanying disclosure statement.

Specifically, Baker & McKenzie will:

      (a) advise the Debtor of its rights, powers and duties as
          debtor and debtor in possession under Chapter 11 of the
          Bankruptcy Code;

      (b) prepare on behalf of the Debtor all necessary and
          appropriate applications, motions, draft orders, other
          pleadings, notices, schedules and other documents, and
          review all financial and other reports to be filed in
          this Chapter 11 Case;

      (c) perform certain tasks required of professionals under
          the Bankruptcy Code and Bankruptcy Rules, the Local
          Rules of this Court and United States Trustee
          Guidelines, including the finalization of this
          retention application and related documents, and the
          preparation of fee applications and related documents;

      (d) advise the Debtor concerning, and prepare responses to,
          applications, motions, and other pleadings and notices
          that may be filed and served in this Chapter 11 Case;

      (e) advise the Debtor with respect to, and assist in the
          negotiation and documentation of, any appropriate
          financing agreements and related transactions;

      (f) review the nature and validity of any liens asserted
          against the Debtor's property and advise the Debtor
          concerning the enforceability of such liens;

      (g) advise the Debtor regarding its ability to initiate
          actions to collect and recover property for the benefit
          of its estate;

      (h) counsel the Debtor in connection with the confirmation
          and consummation of a plan of reorganization and
          related documents;

      (i) advise and assist the Debtor in connection with any
          potential property dispositions;

      (j) advise the Debtor concerning executory contract and/or
          any unexpired lease assumptions, assignments and
          rejections;

      (k) assist the Debtor in reviewing, estimating and
          resolving claims asserted against the Debtor's estate;

      (l) commence and conduct litigation necessary or
          appropriate to assert rights held by the Debtor,
          protect assets of the Debtor's estate or otherwise
          further the goal of completing the Debtor's successful
          reorganization; and

      (m) perform all other necessary or appropriate legal
          services in connection with this Chapter 11 Case for or
          on behalf of the Debtor.

Ali M.M. Mojdehi, Esq., a Baker & McKenzie partner, reports that
the hourly rates currently charges by the firm range from:

           partners                             $410 to $600
           counsel and associates               $100 to $425
           legal assistants and support staff   $125 to $220

UPC Polska, Inc., headquartered in Denver, Colorado, is an
affiliate of United Pan-Europe Communications N.V.  The Debtors is
a holding company, which owns various direct and indirect
subsidiaries operating the largest cable television systems in
Poland.  The Company filed for chapter 11 protection in July 7,
2003 (Bankr. S.D.N.Y. Case No. 03-14358).  Ali M.M. Mojdehi, Esq.,
and Ira A. Reid, Esq., at Baker & McKenzie represent the Debtor in
its restructuring efforts.  As of March 31, 2003, the Debtor
listed $704,000,000 in total assets and $940,000,000 in total
debts.


VICWEST CORP: Creditors Will Vote on CCAA Plan on August 1
----------------------------------------------------------
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 filed a material change report with
the Canadian securities regulators on their Web site
http://www.sedar.comattached to which are copies of the following
materials that have been mailed to Vicwest's affected creditors:

(1) a notice to affected creditors of Vicwest regarding a meeting
     of affected creditors of Vicwest scheduled to be held on
     August 1, 2003;

(2) the Vicwest plan of compromise and reorganization dated
     July 2, 2003 pursuant to the CCAA and the Business
     Corporations Act (Ontario);

(3) an information circular dated July 2, 2003 with respect to the
     Plan;

(4) an order of Ontario Superior Court of Justice the obtained on
     July 2, 2003 approving the claims procedure for affected
     creditors of Vicwest and the holding of, and the manner of
     notice for and conduct at, the Meeting;

(5) the fifth report dated July 2, 2003 of Deloitte & Touche Inc.,
     in its capacity as monitor of Vicwest; and

(6) certain other materials related to the Meeting, voting at the
     Meeting and the claims procedure.

Copies of the materials that were mailed to Vicwest's affected
creditors are also available at http://www.deloitte.com/ca/vicwest
on the Monitor's Web site.  The Plan has been filed with the
Court.

As previously announced, the preparation and filing of Vicwest's
consolidated financial statements for the year ended
December 31, 2002 and the quarter ended March 31, 2003 have been
delayed as a result of Vicwest's restructuring activities under
the CCAA. Vicwest anticipates that it will be able to comply with
its financial statement filing requirements after completion of
its restructuring process. At this time it is anticipated that
Vicwest will emerge from its restructuring process in
August, 2003.

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


WACKENHUT CORRECTIONS: Completes 8-1/4% Sr. Unsec. Note Offering
----------------------------------------------------------------
Wackenhut Corrections Corporation (NYSE: WHC) has completed the
sale of $150 million in aggregate principal amount of ten-year,
8-1/4% senior unsecured notes in a private offering to qualified
institutional buyers under Rule 144A of the Securities Act and to
persons outside the United States pursuant to Regulation S and the
amendment of its senior secured credit facility, consisting of a
$100 million 6-year term loan and a $50 million 5-year revolver.
The interest rate for the Term Loan B and the Revolver is LIBOR
plus 3%.

The notes have not been registered under the securities laws of
the United States and may not be offered or sold in the United
States except to qualified institutional buyers. WCC has used the
net proceeds from the offering, together with approximately $100
million of borrowings under its amended senior secured credit
facility and approximately $16 million in cash-on-hand, to
repurchase 12 million shares of its common stock from Group 4
Falck A/S, its former 57% shareholder, and to refinance amounts
outstanding under its previous senior secured credit facility.

As reported in Troubled Company Reporter's May 5, 2003 edition,
Standard & Poor's Ratings Services placed its 'BB-' corporate
credit and 'BB' senior secured debt ratings on Wackenhut
Corrections Corp., on CreditWatch with negative implications.
Negative implications mean that the ratings could be lowered or
affirmed, following Standard & Poor's review.

Boca Raton, Florida-based WCC, a provider of a comprehensive range
of prison and correctional services, had about $125 million of
debt outstanding at Dec. 29, 2002.


WACKENHUT CORRECTIONS: Buys-Back Group 4 Falck Controlling Stake
----------------------------------------------------------------
Wackenhut Corrections Corporation (NYSE: WHC) has completed the
repurchase of all 12 million shares of WCC common stock held by
its former majority shareholder, Group 4 Falck of Denmark. The two
Group 4 Falck members of the WCC Board of Directors have tendered
their resignations, reducing the WCC Board from nine to seven
members.

George C. Zoley, Chairman of the Board and Chief Executive Officer
of WCC, stated: "This historic transaction transforms WCC from a
corporate subsidiary into a truly independent company with full
access to the capital markets and the ability to grow at its own
pace. We have recently moved our corporate offices to Boca Raton,
Florida and will be establishing a new name for the company within
the next year pursuant to the Group 4 Falck share repurchase
agreement. We are confident that the elimination of the
uncertainty created by Group 4 Falck's 12 million share overhang
will represent a long term benefit for WCC shareholders."

WCC had previously given investor guidance for 2003 earnings per
share within the range of $1.04 to $1.06, which did not assume
either the repurchase of 12 million shares from Group 4 Falck or
the sale of WCC's 50% interest in the UK joint venture, Premier
Custodial Group Limited.

With the repurchase of the 12 million shares, which reduces the
number of outstanding shares to 9.4 million (or 15.3 million
weighted average shares for 2003), and with the sale of WCC's 50%
interest in PCG, WCC estimates 2003 earnings per share to be
within the range of $3.00 to $3.20, inclusive of an after-tax book
gain of approximately $32 million from the sale of PCG. Investor
guidance previously given by WCC for 2004 did not reflect the sale
of WCC's interest in PCG. Since WCC has not yet allocated the
proceeds from that sale for any specific purpose, WCC is not
providing any updated investor guidance for 2004 at this time.

Mr. Zoley further stated: "With the approximately $80 million in
pre-tax proceeds, or $52 million in after-tax proceeds, that the
company received from the sale of its 50% interest in the UK joint
venture and the company's enhanced ability to access the capital
markets, WCC plans to pursue one or more acquisitions during the
next nine months, rather than pay down borrowings under its senior
credit facility. The company will be considering opportunities in
the US and international markets within its existing business
lines of correctional and mental health care services."

WCC also announced that its Board of Directors has adopted a
shareholder rights plan. The rights plan is intended to assist the
company in pursuing its long-term business strategies and to
enhance stockholder value.

WCC is a world leader in the delivery of correctional and
detention management, health and mental health services to
federal, state and local government agencies around the globe. WCC
offers a turnkey approach that includes design, construction,
financing and operations. The Company represents 31 government
clients servicing 48 facilities in the United States, Australia,
South Africa, New Zealand, and Canada with a total design capacity
of approximately 36,000 beds.

As reported in Troubled Company Reporter's May 5, 2003 edition,
Standard & Poor's Ratings Services placed its 'BB-' corporate
credit and 'BB' senior secured debt ratings on Wackenhut
Corrections Corp., on CreditWatch with negative implications.
Negative implications mean that the ratings could be lowered or
affirmed, following Standard & Poor's review.

Boca Raton, Florida-based WCC, a provider of a comprehensive range
of prison and correctional services, had about $125 million of
debt outstanding at Dec. 29, 2002.


WEIRTON STEEL: Secures Court Nod to Hire Procurement Specialty
--------------------------------------------------------------
Weirton Steel Corporation obtained permission from the Court to
employ Procurement Specialty Group, Inc. as procurement
consultants, effective as of the Petition Date.

With the Court's approval, PSG will be:

     (a) reviewing and analyzing the Debtor's procurement
         contracts, including but not limited to contracts to
         purchase maintenance, repair, and operating supplies, raw
         materials, services, transportation, construction,
         and capital equipment, and advising the Debtor which
         contracts can be renegotiated to reduce the costs to the
         Debtor;

     (b) assisting the Debtor in negotiating procurement contracts,
         including but not limited to contracts to purchase
         maintenance, repair, and operating supplies, raw
         materials, services, transportation, construction, and
         capital equipment;

     (c) reviewing and analyzing the Debtor's purchasing processes
         to identify deficiencies and recommend improvements;

     (d) reviewing and analyzing the Debtor's purchasing personnel
         organizational charts to recommend improvements;

     (e) working with Debtor's purchasing personnel to improve
         vendor communications and relations;

     (f) assisting the Debtor in the development and approval of
         multiple vendor sources for critical materials; and

     (g) performing other procurement-related duties as PSG and the
         Debtor will deem appropriate and feasible.

PSG has and will likely provide general consulting services to the
Debtor's suppliers in the future.  PSG assists these suppliers in
negotiating lower prices for the commodities that the suppliers
purchase from other entities.

The Debtor will compensate PSG with:

     (a) Initial Fee

         The Debtor will pay PSG a $70,000 initial cash retainer,
         to be held pending completion of the engagement.

     (b) Project Fee

         The Debtor will compensate PSG for its services pursuant
         to the firm's ordinary billing rates.  Currently, PSG
         employees are compensated at $175 per hour for
         professionals and $25 per hour for clerical staff.  These
         hourly rates will be applied in full to travel time spent
         in the performance of the services described.

     (c) Percent of Savings

         The Debtor will pay PSG an amount equal to 17.5% of
         savings that are realized as a result of PSG services
         during the first 18 months after each savings program
         becomes effective.

     (d) Expenses

         The Debtor will reimburse PSG for the costs of all of its
         travel expenses, including transportation, lodging and
         meals, incurred in the performance of services to the
         Debtor.  The Debtor will pay PSG a flat fee equal to $250
         per month to cover all administrative expenses, including
         but not limited to postage, phone and facsimile charges,
         and office supplies. (Weirton Bankruptcy News, Issue No.
         5; Bankruptcy Creditors' Service, Inc., 609/392-0900)


WESTPOINT STEVENS: Court Approves BSI as Ballot & Notice Agent
--------------------------------------------------------------
WestPoint Stevens Inc., and its debtor-affiliates sought and
obtained authority to employ Bankruptcy Services LLC as the
Court's noticing agent and their claims and balloting agent
pursuant to the terms and conditions of a Standard Bankruptcy
Services Agreement.

Section 156(c) of the Judiciary Procedures Code, which governs
the staffing and expenses of the Bankruptcy Court, authorizes the
Court to use facilities other than those of the Clerk's Office
for the administration of bankruptcy cases.

WestPoint Stevens Chief Financial Officer Lester D. Sears tells
the Court that given the size and complexity of this Chapter 11
case, the Debtors believe that the most effective and efficient
manner in which to accomplish the process of notifying creditors
and receiving, docketing, maintaining, photocopying, and
transmitting proofs of claim is to engage an independent third
party to act as the noticing and claims agent.

BSI is a nationally recognized specialist in Chapter 11
administration.  Since its formation, BSI has been involved in a
number of cases in the Southern District of New York, as well as
other districts throughout the region and has vast experience in
noticing and claims administration in large Chapter 11 cases.

Under the BSI Agreement, BSI, at the Debtors' or the Clerk's
Office's request, will provide the Clerk's Office with these
services as Claims Agent:

     a) relieve the Clerk's Office of all noticing under any
        applicable bankruptcy rule and processing of claims;

     b) at any time, after request, satisfy the court that the
        outside claims agent has the capability to efficiently and
        effectively notice, docket and maintain the proofs of
        claim;

     c) notify all creditors of the filing of the bankruptcy
        petition and of the setting of the first meeting of
        creditors, pursuant to Section 341(a) of the Bankruptcy
        Code, under the proper provision of the Bankruptcy Code;

     d) furnish a last date for the filing of a proof of claim and
        a form for filing a proof of claim to each creditor
        notified of the filing;

     e) maintain an up-to-date copy of the Debtors' schedules which
        lists all creditors and amounts owed;

     f) provide the creditor with the scheduled amount and
        classification and Debtor with which it holds a claim;

     g) file with the clerk a certificate of service within 10
        days, which includes a copy of the notice, a list of
        persons to whom it was mailed, and the date mailed;

     h) provide Mylar labels to the clerk's office with these
        information:

          (i) FILED S.D.N.Y.B.C.,

         (ii) case name and number, and

        (iii) claim number beginning with 00001 and continuing;

     i) microfilm, or by some similar electronic means, reproduce
        the first page of any proof of claim;

     j) after reproducing, cause to be removed all proofs of claims
        from the office of the clerk to the outside claims agent;

     k) maintain all proofs of claim filed;

     l) maintain an official claims register by docketing all
        proofs of claim on a claims register;

     m) maintain all original proofs of claim in correct claim
        number order, in an environmentally secure area and protect
        the integrity of these original documents from theft and
        alteration;

     n) transmit to the clerk an official copy of the claims
        register on a weekly basis, unless authorized by the clerk
        on a more/less regular basis;

     o) maintain an up-to-date official mailing list for all
        entities which will be available after request of a party-
        in-interest or the clerk;

     p) be open to the public for examination of the original
        proofs of claim, without charge, during regular business
        hours;

     q) maintain a telephone staff to handle inquiries as related
        to procedures in filing proofs of claim;

     r) make any necessary changes to the claims register pursuant
        to court order;

     s) make all original documents available to the clerk on an
        expedited and immediate basis;

     t) provide notices to any entities, not limited to creditors,
        that the Debtors or the court deem necessary for an orderly
        administration of the bankruptcy case; and

     u) at the close of the case, box and ship all original
        documents in proper format, as provided by the clerk's
        office, to the Federal Archives and Record Administration
        located at Central Plains Region, 200 Space Center Drive in
        Lee's Summit, Missouri 64064.

The Debtors want to compensate and reimburse BSI in accordance
with the terms of the BSI Agreement for all services rendered and
expenses incurred in connection with the Debtors' Chapter 11
cases.  The Debtors believe that these compensation rates are
reasonable and appropriate for services of this nature and
comparable to those charged by other providers of similar
services.  Any additional professional services will be charged
at BSI's hourly rates:

        Kathy Gerber                     $210
        Senior Consultants                185
        Programmer                        130-160
        Associate                         135
        Data Entry/Clerical                40-60
        Schedule Preparation              225

BSI President Ron Jacobs assures the Court that neither BSI nor
any of its members or employees hold or represent any interest
adverse to the Debtors' estates or creditors with respect to the
services described and in the BSI Agreement.  BSI also represents
that:

     a) it is not employed by the Government and will not seek any
        compensation from the Government;

     b) by accepting employment in this case, it waives any rights
        to receive compensation from the Government;

     c) it is not an agent of the United States and is not acting
        on behalf of the United States;

     d) it will not misrepresent any fact to the public; and

     e) it will not employ any past or present employee of the
        Debtors for work on this particular case involving the
        Debtors. (WestPoint Bankruptcy News, Issue No. 4;
        Bankruptcy Creditors' Service, Inc., 609/392-0900)


WORLDCOM INC: Selling Douglas Lake Ranch for $68.5 Million
----------------------------------------------------------
Marcia Goldstein, Esq., at Weil Gotshal & Manges LLP, in New
York, relates that Bernard Ebbers, WorldCom's former chief
executive officer, is the legal and beneficial owner of all of
the issued and outstanding shares of the capital stock of Douglas
Lake Properties, Inc. and all of the issued and outstanding
partnership interests in Douglas Lake Land & Timber Company, LLP.
In turn, Douglas Lake Properties is the legal and beneficial
owner of all of the issued and outstanding shares of the capital
stock of Douglas Lake Cattle Company.  Douglas Lake Cattle owns
and operates a ranch located in the Nicola Valley in the southern
interior of British Columbia, known as "Douglas Lake Ranch".

Pursuant to a prepetition pledge and security agreement, dated
April 18, 2002, Ms. Goldstein informs the Court that Mr. Ebbers
pledged to WorldCom his shares in Douglas Lake Properties and his
99% partnership interest in Douglas Lake Land & Timber as partial
security for certain prepetition loans made to him by WorldCom.
By letter agreements dated April 17, 2002, Mr. Ebbers granted
WorldCom certain rights with respect to his ownership interests
in Douglas Lake Properties and Douglas Lake Land.  The Control
Agreements provide that WorldCom may exercise sole and exclusive
control of those ownership interests after providing Douglas Lake
Properties and Douglas Lake Land with written notice.

By letters each dated October 24, 2002, Ms. Goldstein recounts
that WorldCom informed Douglas Lake Properties and Douglas Lake
Land that WorldCom was exercising its rights under the Control
Agreements.  On January 10, 2003, WorldCom directed Douglas Lake
Properties and Douglas Lake Land to replace their officers and
directors with individuals specified by WorldCom.  Following the
replacement of the officers, directors and managers, Douglas Lake
Properties and Douglas Lake Land undertook a marketing process
for the sale of the Ranch.  Specifically, Douglas Lake Properties
and Douglas Lake Land, with the assistance of WorldCom, Hilco
Real Estate, LLC and Colliers International, sent information
regarding the Ranch to various publications and to certain
contacts.  In addition, the Sellers contacted six parties that
had expressed an interest in the Ranch prior to WorldCom's
involvement.

As a result of the marketing process for the Ranch, Ms. Goldstein
reports that the Sellers received expressions of interest from
more than 100 parties, a subset of which entered into non-
disclosure agreements and received due diligence materials on the
Ranch.  Subsequently, the Sellers received three qualified and
conforming bids.  The three qualifying bidders delivered letters
of intent that were not contingent on financing, and submitted a
deposit of 5% of the purchase price.

Of the three qualified and conforming bids, the Sellers
determined that the offer from E. Stanley Kroenke for $68,500,000
was the highest and best offer, and thereafter, entered into
negotiations with Stanley Kroenke with respect to the terms of
the contemplated sale and to document the contemplated
transaction.  In May 2003, the Sellers and Douglas Lake Cattle
entered into a Purchase and Sale Agreement, dated May 29, 2003,
which provides for the sale to Stanley Kroenke of (i) the shares
and shareholder loans of Douglas Lake Cattle, and (ii) certain
timber rights and beneficial interests in real property owned by
Douglas Lake Land, for $68,500,000, subject to adjustment.

By transfer of the shares of Douglas Lake Cattle, Ms. Goldstein
states that Stanley Kroenke will also become the owner of the
Ranch.  The Debtors expect that, after satisfaction of, or
reserve for, Sellers' obligations to their creditors and
deductions for fees, taxes and for certain stay agreements,
dividends and distributions representing net proceeds of the
sale, estimated to be $55,000,000, will be recovered by WorldCom.

Under the contemplated sale transaction, because WorldCom has the
right to exercise sole and exclusive control of the voting rights
with respect to the Sellers, Ms. Goldstein submits that WorldCom
must approve and authorize the sale transaction, which involves
substantially all of the Sellers' assets.  Although the Debtors
believe that the giving of this approval and authorization does
not, as a general matter, require Court approval, out of an
abundance of caution and to apprise the Court and parties-in-
interest of the status of a transaction which effectively
represents a recovery by the estates on an asset, the Debtors
seek Judge Gonzalez's permission to give approval and to take all
actions necessary or appropriate to consummate the sale
transaction.

The general terms of the contemplated transaction are:

     A. Sellers: Douglas Lake Properties Inc. and Douglas Lake Land
        & Timber LLC.

     B. Purchaser: E. Stanley Kroenke.

     C. Purchase Price: $68,500,000.

     D. Purchased Assets: All of the shares and shareholder loans
        of the Sellers' Assets.

     E. Adjustment for Liabilities: The Purchase Price will be
        decreased by:

        -- the outstanding amount of certain bank debt of Douglas
           Lake Cattle;

        -- net amounts outstanding to Douglas Lake Land and other
           related parties, which will be repaid on closing;

        -- the Sellers' contribution to certain stay programs; and

        -- a net working capital adjustment to be determined at
           closing.

     F. Holdbacks: The Sellers are liable for standard
        representations and warranties.  There will be a 5%
        holdback of the sale price, which will be the Purchaser's
        sole recourse for any claims arising out of the Sellers'
        breach of representations and warranties.  The
        representations and warranties survive until June 30, 2005.
        In addition, there is a $500,000 holdback for certain
        potential Canadian tax liabilities of the Sellers arising
        prior to the closing.  If not drawn down by June 30, 2005,
        the holdback will be remitted to the Sellers.

     G. Releases: WorldCom waives and releases all claims and
        rights it has or may have against Douglas Lake Cattle or
        the Assets or Stanley Kroenke.

     H. Termination Fee: In the event that an alternative
        transaction for the Assets is consummated with a party
        other than Stanley Kroenke, Stanley Kroenke is entitled to
        $2,000,000, plus the reimbursement of expenses up to
        $500,000.

The Debtors believe that the consent to the sale of the Assets is
an exercise of their sound business judgment.  Ms. Goldstein
points out that the sale of the Assets will enable the Debtors to
recover an estimated $55,000,000 on a net basis for Assets that
are not needed in the Debtors' ongoing business operations.
Therefore, the Sellers and the Debtors will directly benefit
economically as a result of the transaction. (Worldcom Bankruptcy
News, Issue No. 31; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


YAHOO! INC: Reports Improved Second Quarter Financial Results
-------------------------------------------------------------
Yahoo! Inc. (Nasdaq: YHOO) reported results for the second quarter
ended June 30, 2003. Net revenues for the second quarter totaled
$321.4 million, a 42 percent increase over the $225.8 million
reported for the same period in 2002. Operating income for the
second quarter of 2003 was $62.8 million, compared to $7.5 million
for the same period of 2002. Operating income before depreciation
and amortization for the second quarter of 2003 was $97.3 million,
compared to $35.0 million for same period of 2002. Cash flow from
operating activities for the second quarter of 2003 was $92.1
million, compared to $103.4 million for same period of 2002. Free
cash flow for the second quarter of 2003 was $67.7 million,
compared to $64.0 million for same period of 2002.

Net revenues for the six months ended June 30, 2003 totaled $604.4
million, a 44 percent increase over the $418.5 million reported
for the same period in 2002. Operating income for the six months
ended June 30, 2003 was $117.7 million, compared to $3.3 million
for same period of 2002. Operating income before depreciation and
amortization for the six months ended June 30, 2003 was $181.3
million, compared to $53.8 million for same period of 2002. Cash
flow from operating activities for the six months ended June 30,
2003 was $190.8 million, compared to $150.8 million for same
period of 2002. Free cash flow for the six months ended June 30,
2003 was $142.8 million, compared to $102.3 million for same
period of 2002.

"We're very excited about the results we have seen in the second
quarter, the largest revenue producing quarter in our history.
Each piece of our engine is working smoothly with the others, and
the numbers show that over the last eighteen months, our
performance has been stronger and better," said Terry Semel,
chairman and chief executive officer, Yahoo!. "Some of the key
drivers of success this quarter include more balanced growth in
marketing services, from both traditional advertising and
sponsored search, as well as ongoing success in converting
consumers and small businesses to fee-based services. We are
optimistic about the future and we remain steadfastly focused on
execution against our priorities."

                     Business Outlook

"This quarter's results demonstrate continued balanced growth
across all of our revenue contributors and strong trends in our
key financial metric of overall free cash flow generation. As we
exit our fifth consecutive quarter of GAAP profitability, we
continue to execute upon the key business and financial objectives
we have laid out as a company, resulting from a steadily increased
base of hundreds of blue-chip traditional marketers, thousands of
small- and medium-sized businesses, and millions of worldwide
consumers. We are also upwardly revising our business outlook for
revenues and operating income before depreciation and amortization
for the full year 2003, and we are pleased that our own visibility
in our financial prospects has increased," said Susan Decker,
chief financial officer, Yahoo!. Please refer to the "Notes to
Unaudited Condensed Consolidated Statements of Operations"
attached to this press release for our business outlook.

           Second Quarter 2003 Financial Highlights

Revenues: In the second quarter of 2003, Yahoo! reported net
revenues of $321.4 million, a 42 percent increase from the same
period in 2002. For the six months ended June 30, 2003, net
revenues were $604.4 million, a 44 percent increase from the
$418.5 million reported in the same period in 2002.

Marketing services revenues for the second quarter of 2003 totaled
$219.2 million, a 44 percent increase from the same period in
2002. Marketing services revenues for the six months ended June
30, 2003 totaled $409.2 million, a 41 percent increase from the
same period in 2002. These increases resulted from a combination
of a strong increase in revenues from Yahoo!'s sponsored search
services, as well as growth in the balance of Yahoo!'s global
marketing services revenues.

Fees revenues for the second quarter of 2003 totaled $69.9
million, a 43 percent increase compared to the same period in
2002. Fees revenues for the six months ended June 30, 2003 totaled
$133.7 million, a 51 percent increase compared to the same period
in 2002. These increases were primarily driven by the growth in
paying relationships for Yahoo!'s premium services, including the
SBC Yahoo! DSL and Dial products, Yahoo! Personals, and our small
business and communications suites of premium services, partially
offset by a decrease in our event webcasting business.

Listings revenues for the second quarter of 2003 totaled $32.3
million, a 29 percent increase compared to the same period in
2002. Listings revenues for the six months ended June 30, 2003
totaled $61.5 million, a 52 percent increase compared to the same
period in 2002. These increases were driven primarily by the
incremental contribution of revenue from HotJobs, which was
acquired in February 2002, as well as increases in our search and
marketplace services revenues.

Operating income and Operating income before depreciation and
amortization: Operating income for the second quarter of 2003
totaled $62.8 million, compared to $7.5 million in the same period
of 2002. Operating income before depreciation and amortization for
the second quarter of 2003 totaled $97.3 million, a 178 percent
increase compared to the $35.0 million reported in the same period
of 2002. Operating income margin was 20 percent of net revenues in
the second quarter of 2003 compared to 3 percent of net revenues
for the same period of 2002. Operating income before depreciation
and amortization margin doubled to 30 percent of net revenues in
the second quarter of 2003 compared to 15 percent of net revenues
in the same period of 2002. The substantial increase in Operating
income and operating income before depreciation and amortization
reflects strong growth in net revenues and only an 18 percent
increase in costs on a year over year basis as a result of our
ongoing cost discipline.

Operating income for the six months ended June 30, 2003 totaled
$117.7 million, compared to $3.3 million in the same period of
2002. Operating income before depreciation and amortization for
the six months ended June 30, 2003 totaled $181.3 million, a 237
percent increase compared to the $53.8 million reported in the
same period of 2002. Operating income margin was 19 percent of net
revenues for the six months ended June 30, 2003 compared to 1
percent of net revenues for the same period of 2002. Operating
income before depreciation and amortization margin increased to 30
percent of net revenues for the six months ended June 30, 2003
compared to 13 percent of net revenues in the same period of 2002.

Cash flow from operating activities and Free cash flow: Cash flow
from operating activities for the second quarter of 2003 totaled
$92.1 million, compared to $103.4 million for the same period of
2002. Free cash flow for the second quarter of 2003 totaled $67.7
million, a 6 percent increase compared to the $64.0 million
reported for the same period of 2002.

Cash flow from operating activities for the six months ended June
30, 2003 totaled $190.8 million, compared to $150.8 million for
the same period of 2002. Free cash flow for the six months ended
June 30, 2003 totaled $142.8 million, a 40 percent increase
compared to the $102.3 million reported for the same period of
2002.

Net Income (Loss): Net income for the second quarter of 2003 was
$50.8 million or $0.08 per diluted share, compared with $21.4
million or $0.03 per diluted share for the same period of 2002.

Net income for the six months ended June 30, 2003 was $97.5
million or $0.16 per diluted share, compared with income before
the cumulative effect of accounting change of $31.9 million or
$0.05 per diluted share for the same period of 2002. Net loss was
$32.3 million or $0.05 per diluted share for the six months ended
June 30, 2002, including the charge of $64.1 million for the
cumulative effect of the accounting change for the implementation
of Statement of Financial Accounting Standard No. 142 ("SFAS
142"). SFAS 142, which the Company adopted January 1, 2002,
requires companies to assess the goodwill recorded from previous
acquisitions, and as necessary, record an impairment charge that
does not affect cash or the Company's operations.

Yahoo! Inc. is a leading provider of comprehensive online products
and services to consumers and businesses worldwide. Yahoo! is the
No. 1 Internet brand globally and the most trafficked Internet
destination worldwide. Headquartered in Sunnyvale, Calif.,
Yahoo!'s global network includes 25 World properties and is
available in 13 languages.

As reported in Troubled Company Reporter's July 7, 2003 edition,
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.


* Ernst & Young Strikes Merger with Blair Crosson in B.C. Canada
----------------------------------------------------------------
Two of British Columbia's leading accounting firms have merged,
creating the premier business valuation and litigation support
practice in the province. Ernst & Young, a global leader in
professional services, and the Vancouver based valuations,
litigation support and tax firm Blair Crosson Voyer (BCV)
officially announced the merger. The full team at Blair Crosson
Voyer will now operate within the Transaction Advisory Services
and Tax groups of Ernst & Young.

"This transaction fits with Ernst & Young's goal of expanding our
presence in British Columbia," says Fred Withers, managing partner
with Ernst & Young in Vancouver. "The merger decision was
ultimately based on our strong belief in the B.C. economy, and
thus a market need for expanded transaction advisory services.
With today's announcement - our acquiring the leading firm in
business valuation and litigation support, as well as BCV's
seasoned tax group - Ernst & Young adds some of the profession's
key expertise and top- ranked valuators to its growing transaction
advisory team. That puts us in a dominant position in business
valuation and litigation support, and leaves us prepared to serve
clients fully as the economy strengthens," Mr. Withers says.

Blair Crosson Voyer is a Vancouver success story, becoming the
pre- eminent business valuation and litigation support practice in
British Columbia by building a strong presence in the community
and the market with work for an impressive list of clients.

Richard Crosson who joins Ernst & Young as partner and will lead
the valuations practice as senior vice president with Ernst &
Young Transaction Advisory Services, says the merger makes a lot
of sense for clients of both BCV and Ernst & Young. "Ernst & Young
is stronger in valuations and litigation support through this deal
-- something the market will be better for -- and the BCV team can
now offer our clients the impressive scope of services and
resources that the global reach of Ernst & Young provides," he
says.

Along with Mr. Crosson, Vern Blair becomes a senior vice president
with Ernst & Young Transaction Advisory Services. Ron Voyer
becomes a partner in taxation with Ernst & Young LLP. In all, six
Blair Crosson Voyer people will join Ernst & Young Transaction
Advisory Services; four people join the tax group at Ernst &
Young, as well as one administrative person.

The Ernst & Young and BCV merger is the second recent transaction
for Ernst & Young. In late June, Ernst & Young Corporate Finance
Inc. and Synergy Partners merged, forming the largest mid-market
M&A firm in Alberta.

Ernst & Young, a global leader in professional services, is
committed to restoring the public's trust in professional services
firms and in the quality of financial reporting. Its 106,000
people in more than 140 countries around the globe pursue the
highest levels of integrity, quality, and professionalism to
provide clients with solutions based on financial, transactional,
and risk- management knowledge in Ernst & Young's core services of
audit, tax, and corporate finance. Further information about Ernst
& Young and its approach to a variety of business issues can be
found at http://www.ey.com/perspectives Ernst & Young refers to
all the members of the global Ernst & Young organization.

Ernst & Young Corporate Finance Inc. is Canada's largest financial
advisory business focused on the mid-market. We have more than 25
years of experience providing transaction advisory services and
more than 280 professionals in nine cities, specializing in
specific industry sub-sectors. Our clients benefit from our
multidisciplinary team approach, which seamlessly integrates Ernst
& Young's M & A, Financing, Business Valuation, Litigation
Support, Restructuring, M&A Tax and Transaction Support practices
to ensure that every aspect of a transaction is effectively
managed.

Blair Crosson Voyer specializes in taxation, valuation and
litigation support services. Founded in 1989 and with six
chartered business valuators, Blair Crosson Voyer is the largest
independent valuations and litigation support practice in British
Columbia. Blair Crosson Voyer provides valuations services for a
wide variety of business needs and has acted as experts in many of
the largest commercial damages claims in British Columbia. Blair
Crosson Voyer tax consultants specialize in corporate
reorganizations, serving a variety of industries and principally
the real estate and technology sectors.


* Kristin Going Joins Gardner Carton's Restructuring Practice
-------------------------------------------------------------
Gardner Carton and Douglas, a leading law firm with offices in
Chicago and Washington D.C., is pleased to announce the addition
of Kristin K. Going as a senior associate in its Washington D.C.
office.

Ms. Going, who has an LLM in Bankruptcy and is a member of the
Maryland and Ohio Bars, concentrates her practice in the
representation of debtors, creditors committees, indenture and
securitization trustees, assignees for the benefit of creditors,
and individual creditors in insolvency proceedings in state and
federal courts.

We are further expanding our already highly recognized national
insolvency practice, which is only further enhanced with the
addition of Kristin Going in the D.C. office, says Harold L.
Kaplan, Chair of the Firm s Corporate Restructuring Practice
resident in Chicago, and Stephanie Wickouski who leads the
Practice out of the D.C. office.

The Corporate Restructuring Practice of Gardner Carton & Douglas
has a national reputation particularly in representing indenture
trustee and bondholder interests in major cases throughout the
United States (representing in excess of $6 billion in bond
defaults in the last year), as well as creditor committees and
other interests.  The practice Chair, Mr. Kaplan, was named one of
thirteen Outstanding Bankruptcy Attorneys in the United States in
2001 by Turnaround and Workouts Magazine.  Ms. Wickouski is the
author of the definitive treatise entitled Bankruptcy Crimes.

Gardner, Carton & Douglas -- http://www.gcd.com/-- was
established in Chicago in 1910. The firm's 230 attorneys practice
in Chicago and Washington D.C.  Diverse and geographically
widespread, the firm s extensive client base includes major
domestic and foreign manufacturing and technology companies;
hospitals and other nonprofit organizations; commercial and
investment banks; insurance companies and other financial service
institutions; Native American tribes, universities and
municipalities; broadcasters, common carriers and private
communication users; advanced technology businesses; and
individuals.


* Tracy Treger Joins Gardner Carton's Restructuring Practice
------------------------------------------------------------
Gardner Carton and Douglas, a leading law firm with offices in
Chicago and Washington D.C., is pleased to announce the addition
of Tracy L. Treger, a nationally recognized corporate bankruptcy
lawyer, as a principal in its Chicago Corporate Restructuring
Practice.

Ms. Treger has ten years of experience in complex reorganization
cases before federal bankruptcy courts throughout the country.
Previously, Ms. Treger was with Altheimer & Gray.

Ms. Treger is the author of numerous bankruptcy, lending and
creditors rights articles.  She also has a national reputation
representing landlords and equipment lessors in insolvency
situations, as well as experience with SIPA liquidations of
brokerage firms, trustee representations, and fraud and fraudulent
conveyance matters.  Her articles have appeared in The Commercial
Lending Review, Wiley Bankruptcy Update, Illinois Banker, Chicago-
Kent and Whittier Law Reviews, and various local publications.

With Tracy Treger, we are further expanding our already highly
recognized national insolvency practice, says Harold L. Kaplan,
Chair of the Firm's Corporate Restructuring Practice resident in
Chicago, and Stephanie Wickouski who leads the Practice out of the
D.C. office.

The Corporate Restructuring Practice of Gardner Carton & Douglas
has a national reputation particularly in representing indenture
trustee and bondholder interests in major cases throughout the
United States (representing in excess of $6 billion in bond
defaults in the last year), as well as creditor committees and
other interests.  The practice Chair, Mr. Kaplan, was named one of
thirteen Outstanding Bankruptcy Attorneys in the United States in
2001 by Turnaround and Workouts Magazine.  Ms. Wickouski is the
author of the definitive treatise entitled Bankruptcy Crimes.

Gardner, Carton & Douglas -- htpp://www.gcd.com/ -- was
established in Chicago in 1910. The firm's 230 attorneys practice
in Chicago and Washington D.C.  Diverse and geographically
widespread, the firm s extensive client base includes major
domestic and foreign manufacturing and technology companies;
hospitals and other nonprofit organizations; commercial and
investment banks; insurance companies and other financial service
institutions; Native American tribes, universities and
municipalities; broadcasters, common carriers and private
communication users; advanced technology businesses; and
individuals.


* Morgan Lewis Elects 17 Lawyers as New Partners
------------------------------------------------
Morgan Lewis, one of the 10 largest U.S. law firms, announced that
17 lawyers have been elected to the partnership.

"We are enormously proud to welcome these exceptional attorneys to
the partnership," says Francis M. Milone, Chairman of Morgan
Lewis. "Our commitment to excellence in client service is
consistently strengthened by the attraction and promotion of
dynamic and talented attorneys," he adds.

The diversity of practice groups and offices from which this
year's rising partners have been selected reflects the depth and
breadth of Morgan Lewis. A chart of the new partners, their
practice groups, and their home offices follows.

Morgan Lewis, with a team of nearly 1,200 lawyers in 16 offices,
is a fully-integrated, multipractice law firm that serves global
clients. For more than a century, Morgan Lewis has represented
Fortune 500 companies, multinational financial services and
investment banking organizations, as well as leaders in the life
sciences, technology, energy, securities, real estate and media
sectors. For more information about Morgan Lewis, visit
http://www.morganlewis.com


*BOOK REVIEW: Lost Prophets -- An Insider's History of the
               Modern Economists
----------------------------------------------------------
Author: Alfred L. Malabre, Jr.
Publisher: Beard Books
Softcover: 256 pages
List Price: $34.95
Review by Henry Berry

Order your personal copy today at
http://www.amazon.com/exec/obidos/ASIN/1587981807/internetbankrupt

Alfred Malabre's personal perspective on the U.S. economy over the
past four decades is firmly grounded in his experience and
knowledge.  Economics Editor of The Wall Street Journal from 1969
to 1993 and author of its weekly "Outlook" column, Malabre was in
a singular position to follow the U.S. economy in recent decades,
have access to the major academic and political figures
responsible for economic affairs, and get behind the crucial
economic stories of the day.  He brings to this critical overview
of the economy both a lively, often provocative, commentary on the
picture of the turns of the economy.  To this he adds sharp
analysis and cogent explanation.

In general, Malabre does not put much stock in economists. "In
sum, the profession's record in the half century since Keynes and
White sat down at Bretton Woods [after World War II] provokes
dismay."  Following this sour note, he refers to the belief of a
noted fellow economist that the Nobel Prize in this field should
be discontinued.  In doing so, he also points out that the Nobel
for economics was not one originally endowed by Alfred Nobel, but
was one added at a later date funded by the central bank of Sweden
apparently in an effort to give the profession of economists the
prestige and notice of medicine, science, literature and other
Nobel categories.

Malabre's view of economists is widespread, although rarely
expressed in economic circles.  It derives from the plain fact
that modern economists, even hugely influential ones such as John
Meynard Keynes, are wrong as many times as they are right.  Their
economic theories have proved incomplete or shortsighted, if not
basically wrong-headed.  For example, Malabre thinks of the
leading economist Milton Friedman and his "monetarist colleagues"
as "super salespeople, successfully merchandising.an economic
medicine that promised far more than it could deliver" from about
the 1960s through the Reagan years of the 1980s.  But the author
not only cites how the economy has again and again disproved the
theories and exposed the irrelevance of wrong-headedness of the
policy recommendations of the most influential economists of the
day.  Malabre also lays out abundant economic data and describes
contemporary marketplace and social activities to show how the
economy performs almost independently of the best analyses and
ideas of economists.

Malabre does not engage in his critiques of noted economists and
prevailing economic ideas of recent decades as an end in itself.
What emerges in all of his consistent, clear-eyed, unideological
analysis and commentary is his own broad, seasoned view of
economics-namely, the predominance of the business cycle.  He
compares this with human nature, which is after all the substance
of economics often overlooked by professional and academic
economists with their focus on monetary policy, exchange rates,
inflation, and such.  "The business cycle, like human nature, is
here to stay" is the lesson Malabre aims to impart to readers
interested in understanding the fundamental, abiding nature of
economics.  In Lost Prophets, in language that is accessible and
jargon-free, this author, who has observed, written about, and
explained economics from all angles for several decades,
persuasively makes this point.

In addition to holding a top position at The Wall Street Journal,
Malabre is also the author of the books, Understanding the New
Economy and Beyond Our Means, which received the George S. Eccles
Prize from the Columbia Business School as the best economics book
of 1987.

                           *********

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-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher
Beard at 240/629-3300.

                    *** End of Transmission ***