TCR_Public/030721.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

               Monday, July 21, 2003, Vol. 7, No. 142

                           Headlines

ALTERRA HEALTHCARE: Wants Until Sept. 22 to Decide on Leases
AMERCO: Asst. U.S. Trustee Amends Creditors' Panel Membership
AMERICREDIT: Will Publish Fourth Quarter 2003 Results on Aug. 6
ANC RENTAL: Cerberus Break-Up Fee Reduced to $11 Million
APARTMENT INVESTMENT: Offering $150 Million of 8.0% Preferreds

ARVINMERITOR INC: Appoints Jay McLean VP of Information Tech.
ASBURY AUTOMOTIVE: Will Publish 2nd Quarter Results on July 31
ASPECT COMMS: Reports Improved Financial Results for Q2 2003
ATMEL CORP: Red Ink Continues to Flow in Second Quarter 2003
BOISE CASCADE: Reports $4 Million Net Loss in Second Quarter

CALPINE: S&P Rates $3.3 Billion 2nd-Priority Senior Debt at B
CANWEST GLOBAL: 3rd Quarter Earnings Results Show Slight Decline
CASELLA WASTE: Will Host Fiscal Q4 2003 Conference Call Thursday
CENTERPOINT ENERGY: Transition Bond Co. to Enhance Disclosure
CLAYTON HOMES: Cerberus Reconfirms Interest in Acquiring Company

CHIPPAC: S&P Ups Bank Loan Rating to BB- after Balance Repayment
COM21: U.S. Trustee Convenes Sec. 341(a) Meeting on August 13
CYBEX INT'L: Arranges $19MM Working Capital & Term Loan Facility
CYPRESS SEMICON: Second Quarter 2003 Results Enter Positive Zone
DALEEN TECH: Receives Critical Vendor Payment from Allegiance

DELTA AIR LINES: Second Quarter Operating Revenues Tumble 4.8%
DOMAN IND.: Asks Canadian Court to Extend CCAA Stay to Sept. 30
DRIVER HARRIS: AMEX Begins Common Stock Delisting Process
DUANE READE: Will Webcast Q2 2003 Conference Call on Thursday
DVI: 9-7/8% Notes' Trustee Rescinds Notice of Default & Resigns

DVI INC: S&P Keeps Junk Counterparty Rating on Watch Negative
DVI INC: Hires BDO Seidman as External Auditor & Tax Consultant
EARL SCHEIB: Fiscal Fourth Quarter Net Loss Balloons to $746K
EASTERN PULP: Files Plan of Reorganization in Portland, Maine
ELITE PHARMA: Battling with Ex-CEO & Patent Rights In Limbo

EL PASO ELECTRIC: Mexican CFE Curtails Non-Firm Power Purchases
ENCOMPASS SERVICES: Resolves State of Texas' Plan Objection
ENRON: Judge Gonzales Okays Wind Debtors' CEC Settlement Pact
ENRON: Cabazon Power's Case Summary & Largest Unsec. Creditor
ENRON: Cabazon Holdings' Voluntary Chapter 11 Case Summary

EZENIA! INC: $2.9 Million Stock Repurchase Obligation Cancelled
FAIRCHILD SEMICON: Second Quarter Net Loss Widens to $64 Million
FAIRFAX FINANCIAL: Will Host Quarterly Conference Call on Aug. 1
GENERAL BINDING: Taking Initiatives to Improve Cost Structure
GEORGIA-PACIFIC: Second Quarter Results Show Marked Improvement

GLOBAL AXCESS: Provides Results Expectations for Second Quarter
GLOBAL CROSSING: FTI's Retention as Consultant Approved
GUAM POWER: S&P Drops Revenue Bond Ratings to BB+ from BBB
HASBRO INC: Board of Directors Declares Quarterly Cash Dividend
HOUSTON EXPLORATION: Completes Redemption of $100MM 8.625% Notes

ICN PHARMACEUTICALS: Court Ruling Spurs S&P to Cut Rating to BB-
ICO INC: Timothy Gollin Resigns & Jon Biro Appointed Interim CEO
IMC GLOBAL: $310-Mil Senior Unsecured Notes Get S&P's B+ Rating
IMCLONE SYSTEMS: Robert F. Goldhammer Resigns as Director of Co.
INTEGRATED HEALTH: Seeks Clearance to Use $3.7-Mil. Trust Funds

INTELLIGENT MOTOR: Lack of Capital Spurs Going Concern Doubts
INTERFACE INC: Will Publish Second Quarter Results on Wednesday
INTERMET CORP: Reports $6.6 Million in Net Loss for 2nd Quarter
INTERMET CORP: Appoints Gary F. Ruff as New President and CEO
LEAP WIRELESS: Wants to Honor Prepetition Withholding Taxes

LIQUIDIX: Sellers & Andersen Replaces Auditors Semple & Cooper
LORAL SPACE: Gets Court Nod to Honor $15 Million Vendor Claims
MEDCOMSOFT: Settles Outstanding Claims Filed by Ex-Employees
MEGO FINANCIAL: Gets Court OK to Hire Belding Harris as Counsel
METROMEDIA FIBER: S.D.N.Y. Court Approves Disclosure Statement

MIDWEST EXPRESS: Pursuing New Financing After Dodging Bankruptcy
MILACRON INC: Will Step Up Restructuring & Cost Cutting Measures
MILACRON INC: Weak End-Markets Prompt S&P to Cut Rating to B-
MIRANT CORP: S&P Drops Rating on TIERS Fixed Rate Certs. to D
MITEC TELECOM: Completes CDN$1.5MM Sale of Thailand Subsidiary

MOONEY AEROSPACE: Taps PMR and Associates as PR Consultants
NAPSTER: Bertelsmann Want Copyright Infringement Suits Dismissed
NATIONAL STEEL: Wants Sanction to Nix Certain Retiree Benefits
NBTY INC: S&P Rates Planned $375-Mil. Senior Secured Debt at BB
NORTHWEST AIRLINES: Second Quarter 2003 Results Show Improvement

PAYLESS SHOESOURCE: $200-Million Sr. Sub. Notes Get B+ Rating
PG&E NAT'L: USGen Allowed to Maintain Existing Bank Accounts
PORTLAND GENERAL: Parent Enron Continues Sale Process
RANGE RESOURCES: S&P Rates Proposed $100 Million Sr Notes at B-
REGUS BUSINESS: Wants to Stretch Lease Decision Time to Sept. 9

SAFETY-KLEEN: Establishing Special Account for Canadian Lenders
SHILOH IND.: S&P Ups Corporate Credit & Bank Loan Ratings to B
SPIEGEL GROUP: Seeks to Reject Butterfield Lease & Sublease
STERLING BANCSHARES: Fitch Affirms Ratings Following Unit's Sale
STONEVILLE FURNITURE: Case Summary & 20 Largest Unsec. Creditors

TIERS FIXED: Series 2001-14 Certificates Rating Lowered to D
TRIAD HOSPITALS: S&P Raises Ratings on Better Operating Results
UNITED AIRLINES: Bank One Gets Go-Ahead to Make O'Hare Payments
US DATAWORKS: Auditors Express Going Concern Doubts
WEIRTON STEEL: Committee Turns to Campbell & Levine for Advice

WHEELING-PITTSBURGH: Judge Bodoh OKs US EPA Claim Settlement
WINSTAR COMMS: Ch. 7 Trustee Seeks to Retain Seneca as Expert
WORLDCOM: Asks Court to Approve MicroVoice Settlement Pact

* Jack Seward Says Find the Pixie Dust & You'll Find the Money

* James Ricciardi Joins Mcguirewoods' New York Practice

* BOND PRICING: For the week of July 21 - July 25, 2003

                           *********

ALTERRA HEALTHCARE: Wants Until Sept. 22 to Decide on Leases
------------------------------------------------------------
Alterra Healthcare Corporation asks the U.S. Bankruptcy Court for
the District of Delaware to extend the time period within which it
must decide how to dispose of its unexpired leases.  The Debtor
tells the Court that it needs until September 22, 2003 to make
decisions about whether to assume, assume and assign, or reject
its unexpired nonresidential real property leases.

Alterra says that an extension of the time to assume or reject the
Unexpired Leases under Section 365(d)(4) is necessary to preserve
the status quo with respect to the Debtor's estate.  The value of
the Debtor's estate may be jeopardized if the Debtor loses the
right to assume and assign any of the Unexpired Leases.

The Debtor relates that since the Petition Date, its efforts have
been focused on implementing its restructuring initiatives and
ensuring a smooth transition into chapter 11.  The Debtor has also
been in discussions with its postpetition lenders and others
regarding a possible equity or equity-linked investment under a
plan of reorganization.  The anticipated Exit Equity Financing
plays an important role in shaping the Debtor's plan of
reorganization and the structure of the business after
confirmation.  Until these discussions have concluded and an
appropriate marketing and auction process has been conducted, the
Debtor will not be in a position to determine with finality which
Unexpired Leases will have continuing value.

The Debtor's real estate is largely owned through a series of non-
debtor subsidiaries or particular third-party landlords. As such,
substantially all of the Debtor's residences are leased either
directly from third parties or are leased or subleased from one of
the Debtor's non-debtor subsidiaries. Thus, the Unexpired Leases
govern the relationships of the Debtor with its direct and non-
debtor subsidiaries landlords regarding the key operating element
of the Debtor's business. Any decision about whether to reject or
assume the Unexpired Leases is, necessarily, a decision about the
future direction of the Debtor's business and operations.

Alterra Healthcare Corporation, one of the nation's largest and
most experienced healthcare providers operating assisted living
residences, filed for chapter 11 protection on January 22, 2003,
(Bankr. Del. Case No. 03-10254). James L. Patton, Esq., Edmon L.
Morton, Esq.. Joseph A. Malfitano, Esq., and Robert S. Brady,
Esq., at Young, Conaway, Stargatt & Taylor LLP represent the
Debtors in their restructuring efforts.  Ettta R. Wolfe, Esq., at
Richards, Layton & Finger, PA represents the Official Committee of
Unsecured Creditors of this case.  When the Company filed for
protection from its creditors, it listed $735,788,000 in assets
and $1,173,346,000 in total debts.


AMERCO: Asst. U.S. Trustee Amends Creditors' Panel Membership
-------------------------------------------------------------
Assistant United States Trustee, Nicholas Strozza, amends the
composition of the Official Committee of Unsecured Creditors in
AMERCO's Chapter 11 proceeding to add two new members, Mellon HBV
Alternative Strategies and The Bank of New York.  The Creditors'
Committee is now composed of:

        AIG Global Investment Group
        175 Water Street
        New York, NY 10038
           Contact: Kay Handley
                    Managing Director
                    Telephone (212) 458-2172
                    Fax (212) 458-2970

        Pacific Investment Management Company LLC
        840 Newport Center Drive
        Newport Beach, CA 92660
           Contact: Mohan V. Phansalkar
                    Executive Vice President
                    Telephone (949) 720-6180
                    Fax (949) 720-6361

        Law Debenture Trust Company of New York
        767 Third Avenue, 31st Floor
        New York, NY 10017
           Contact: Daniel Fisher
              Represented by: Arnold Gulkowitz, Esq.
                              Orrick, Herrington & Sutcliffe LLP
                              666 Fifth Avenue
                              New York, NY 10103
                              Telephone (212) 506-5000
                              Fax (212) 506-5151

        Bank of America, N.A.
        Strategic Solutions, Inc.
        555 South Flower Street, 9th Floor
        Los Angeles, CA 90071
           Contact: Timothy C. Hintz
                    Managing Director
              Represented by: Evan M. Jones, Esq.
                              O'Melveny & Myers LLP
                              400 South Hope Street
                              Los Angeles, CA 90071
                              Telephone (213) 430-6000
                              Fax (213) 430-6407

        G.E. Asset Management Inc.
        3003 Summer Street
        Stamford, CT 06905
           Contact: John Endres
                    Telephone (203) 326-4287
                    Fax (203) 356-4910

        Mellon HBV Alternative Strategies
        200 Park Ave., Ste. 3300
        New York, New York 10166
              Represented by: Jeremy Carton
                              George Konomos
                              Telephone (212) 808-3948
                              Fax (212) 808-3955

        The Bank of New York
        101 Barclay Street, 8W
        New York, New York 10286
              Represented by: Gerald Facendola
                              Telephone (212) 815-5440
(AMERCO Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


AMERICREDIT: Will Publish Fourth Quarter 2003 Results on Aug. 6
---------------------------------------------------------------
AMERICREDIT CORP., (NYSE:ACF) will release its fourth quarter 2003
operating results on August 6, 2003 after market close. Management
will host an analyst conference call on August 7 at 8:30 a.m.
Eastern to discuss AmeriCredit's operating results for the period.
This call will be broadcast live for all interested parties via
the Company's Web site at http://www.americredit.com It is
necessary to go to the Company's Web site to register, download
and install any necessary audio software prior to the call. For
those who cannot listen to the live broadcast, a replay will be
available shortly after the call.

AmeriCredit Corp. is one of the largest independent middle-market
auto finance companies in North America. Using its branch network
and strategic alliances with auto groups and banks, the company
purchases retail installment contracts entered into by auto
dealers with consumers who are typically unable to obtain
financing from traditional sources. AmeriCredit has more than one
million customers and over $15 billion in managed auto
receivables. The company was founded in 1992 and is headquartered
in Fort Worth, Texas. For more information, visit
http://www.americredit.com

As reported in Troubled Company Reporter's April 28, 2003 edition,
Fitch Ratings lowered AmeriCredit Corp.'s senior unsecured rating
to 'B' from 'B+'. The Rating Outlook remains Negative.
Approximately $375 million of senior unsecured debt is affected by
this rating action.

Fitch's rating action reflects heightened concern regarding the
trend in net charge-offs and continued macro economic pressures on
asset quality and used car prices. Unabated, these factors will
continue to erode the remaining cushion in charge-off related
covenants in the company's warehouse facilities. AmeriCredit's
warehouse covenants require the annualized managed net charge-off
ratio to be below an average of 8.0% for two consecutive quarters.
Annualized managed net charge-offs to average managed receivables
have risen in consecutive quarters from 3.6% for the second
quarter ended Dec. 31, 2000 to 7.6% for the most recent quarter
ended March 31, 2003, albeit some of the increase is attributed to
management's more proactive handling of delinquent accounts which
has contributed to the rise.

The negative outlook reflects continued liquidity constraints due
to weakened asset quality measures of securitizations and
increased enhancement requirements for new transactions. As
expected, some securitization transactions executed in the 2000
time frame began to hit cumulative loss triggers during March
2003, trapping excess cash in those trusts. Fitch remains
concerned that additional and more recent pools may also hit
cumulative net loss triggers as well. In Fitch's view, access to
the term asset-backed securitization market is potentially more
difficult and costly to obtain. The company's most recent
transaction required higher credit enhancement over previous deals
reflecting the weaker underlying performance of the collateral
pool. Furthermore, AmeriCredit continues to rely on monoline bond
insurers to execute its secured financings, however, the company
has recently executed a whole loan transaction, highlighting an
alternative financing option.


ANC RENTAL: Cerberus Break-Up Fee Reduced to $11 Million
--------------------------------------------------------
ANC Rental Corporation and its debtor-affiliates ask the Court to
approve the proposed termination fee in connection with the Asset
Purchase Agreement.

Cerberus and CAR Acquisition Company LLC conditioned its offer on
its receipt of a Termination Fee in the amount equal to:

     1. $12,500,000; plus

     2. its reasonable, actual out-of-pocket costs and expenses
        incurred by Cerberus Capital Management and CAR Acquisition
        Company with respect to due diligence expense
        reimbursement, not to exceed $1,500,000;

payable in the event Cerberus does not prevail in any competitive
bidding process.

In recognition of the benefit the Debtors will derive if a higher
and better qualified offer is submitted, the Debtors have agreed
to pay the Termination Fee to CAR Acquisition Company if the Sale
is not consummated; provided that, the Termination Fee will not
be payable to CAR Acquisition Company:

     1. if the Agreement is terminated by the Debtors on a breach
        of any covenant or agreement on the part of CAR Acquisition
        Company or Cerberus Capital Management set forth in the
        Agreement or if any representation or warranty of CAR
        Acquisition Company or Cerberus Capital Management set
        forth in the Agreement will not be true and correct as of
        the date of the Agreement or closing date, and the Debtors
        have not waived the breach or condition or, to the extent
        curable, any  breach or condition remains uncured after 30
        days following the delivery of notice of the breach or
        condition by the Debtors to CAR Acquisition Company and
        Cerberus Capital Management; or

     2. if the Sale is not consummated by CAR Acquisition
        Company because the Agreement is terminated by CAR
        Acquisition Company within 30 days after an appeal of the
        Sale Order, because of the appeal of the Sale Order.

The Termination Fee will be paid as an administrative priority
expense of Debtors under Section 503(b)(1) of the Bankruptcy Code
after the termination of the Agreement.

According to Bonnie Glantz Fatell, Esq., at Blank Rome LLP, in
Wilmington, Delaware, without the Termination Fee, CAR
Acquisition Company was not willing to enter into the Agreement,
and without the Agreement, the Debtors' ability to maintain its
fleet financing and operate its business is jeopardized.  In
addition, the Debtors' ability to continue to shop the Acquired
Assets without risk of losing CAR Acquisition Company's offer
would have been eliminated.  Therefore, the Termination Fee
induces a competitive bidding process by providing an incentive
to CAR Acquisition Company to enter into the Agreement, preserves
the fleet financing and allows the Debtors one last opportunity
to market their assets in search of better bids.

Ms. Fatell contends that the Termination Fee is fair and
reasonable, particularly in view of the magnitude of the
transaction, and benefits to the Debtors' estates by facilitating
the competitive process.  CAR Acquisition Company's $230,000,000
in cash offer, plus the assumption of over $3,000,000,000 in
Assumed Liabilities now establishes a floor against which other
bidders can comfortably base their bids without conducting the
same degree of expensive and time-consuming due diligence
conducted by CAR Acquisition Company.  Furthermore, the
Termination Fee is fair and reasonable in view of the amount of
intensive analysis, due diligence investigation and negotiation
undertaken by CAR Acquisition Company and the collateral benefit
this work product provides to the estates in the form of a
negotiated asset purchase agreement and market-tested valuation
of the Acquired Assets.

                         Committee Objects

The Official Committee of Unsecured Creditors argue that the
proposed $14,000,000 termination fee should be denied because it
does not provide any benefit to the Debtors' estates and is
excessive in light of the value offered by CAR Acquisition
Company.

Because the Termination Fee is triggered by the mere "acceptance"
of a Bid by the Debtors, CAR is entitled to the Termination Fee
under certain circumstances even if CAR itself ultimately
purchases the Debtors' businesses.  The Committee asserts that
CAR must be prohibited from obtaining the $14,000,000 Termination
Fee if CAR ultimately purchases the Debtors' businesses.

The Committee also notes that CAR is not required to keep its Bid
open for a period of time after an alternative Bid is selected.
CAR should not be entitled to the Termination Fee unless it
agrees to keep its Bid open for a reasonable period of time after
the acceptance of an alternative Bid, perhaps through closing of
an alternative sale transaction.

Furthermore, the Committee says, Section 7.1(a)(v)(A) of the
Agreement must be stricken because it allows for payment of the
Termination Fee after the filing of a motion to convert these
cases to Chapter 7 cases.  Because CAR's bid may likely leave
these estates administratively insolvent, it is foreseeable that
a motion to convert these cases may be filed prior to the Sale.

Thus, The Committee asks the Court to:

     a. reduce the amount of the Termination Fee to $8,000,000 plus
        $750,000 in expense reimbursement;

     b. modify Section 5.7 of the Agreement so that CAR is not
        entitled to the Termination Fee if it ultimately purchases
        the Debtors' businesses;

     c. require CAR, in the event that the Debtors accept an
        alternative Bid, to keep its bid open until the closing of
        an alternative transaction; and

     d. delete Section 7.1(a)(v)(A) from the Agreement.

                            *     *     *

After due deliberation, Judge Walrath authorizes the Debtors to
pay an $11,000,000 Termination Fee to CAR Acquisition Company
LLC, which is inclusive of all expenses up to $250,000 that were
authorized.  The Termination Fee will be paid in the event that
the Debtors:

     -- accept a Bid, other than that of CAR, as the highest and
        best offer;

     -- sell, transfer, lease or otherwise dispose directly or
        indirectly, including through an asset sale, stock sale,
        merger, reorganization or other similar transaction, all or
        substantially all or a material portion of the Acquired
        Assets in a transaction or series of transactions to a
        party or parties other than CAR within one year of June 26,
        2003; or

     -- choose not to sell, transfer, lease or otherwise dispose
        of, directly or indirectly, including through an asset
        sale, stock sale, merger, reorganization or other similar
        transaction, all or substantially all or a material portion
        of the Acquired Assets to CAR whether as a result of the
        proposal of a stand-alone plan of reorganization or
        otherwise. (ANC Rental Bankruptcy News, Issue No. 35;
        Bankruptcy Creditors' Service, Inc., 609/392-0900)


APARTMENT INVESTMENT: Offering $150 Million of 8.0% Preferreds
--------------------------------------------------------------
Apartment Investment and Management Company (NYSE: AIV) announced
a public offering of $150 million of newly issued 8.0% Class T
Cumulative Preferred Stock.  The Class T Cumulative Preferred
Stock is priced at $25 per share and is redeemable at Aimco's
option commencing on July 31, 2008.  The offering is scheduled to
close on July 31, 2003.

Proceeds from this offering will be used by Aimco to redeem:  all
shares outstanding of its 9.5% Class H Cumulative Preferred Stock
(NYSE: AIVPrH; CUSIP: 03748R-50-7); the remaining shares
outstanding of its 10.0% Class L Cumulative Convertible Preferred
Stock; and a pro rata portion ($37.5 million) of its 8.75% Class D
Cumulative Preferred Stock (NYSE: AIVPrD; CUSIP: 03748R-30-9).
These redemptions total $150 million.  In addition, Aimco will
redeem all shares outstanding of its $30 million, 9.25% Class M
Cumulative Convertible Preferred Stock to be funded from property
sales proceeds.  All redemptions will be made on August 18, 2003
at $25 per share plus all unpaid dividends up to and including the
redemption date of August 18.  The redemption price is payable
only in cash.

"The attractive pricing of new preferred stock has allowed Aimco
to reduce its cost on $150 million of preferred securities by over
150 basis points, or $2.3 million annualized," said Paul
McAuliffe, Aimco's executive vice president and chief financial
officer.

Wachovia Securities was sole lead manager for the Class T
Cumulative Preferred Stock offering.  Co-managers on the
transaction were Bear, Stearns & Co. Inc., Raymond James, RBC
Capital Markets and UBS Investment Bank.

Aimco (S&P, BB+ Corporate Credit Rating, Stable) is a real estate
investment trust headquartered in Denver, Colorado owning and
operating a geographically diversified portfolio of apartment
communities through 19 regional operating centers.  Aimco, through
its subsidiaries, operates approximately 1,760 properties,
including approximately 313,000 apartment units, and serves
approximately one million residents each year.  Aimco's properties
are located in 47 states, the District of Columbia and Puerto
Rico.  Aimco common stock is included in the S&P 500.


ARVINMERITOR INC: Appoints Jay McLean VP of Information Tech.
-------------------------------------------------------------
ArvinMeritor, Inc. (NYSE: ARM) has appointed Jay McLean as vice
president of Information Technology for its Commercial Vehicle
Systems group, including its aftermarket operation.  In his new
position, McLean will focus on developing a plan to achieve
systems synergies between the original equipment and aftermarket
applications.

Previously, McLean served as senior director of IT, Human
Resources and Financial Systems.  He has six years of experience
with the company.  Before joining ArvinMeritor, McLean spent 18
years in various accounting, IT and marketing roles at GKN
Automotive, where he last served as its product manager,
Asia/Pacific Business Unit.

McLean holds a bachelor's degree in accounting and a master of
business administration degree from Michigan State University.  He
and his family currently reside in Orion Township, Mich.

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, Mich., and employs 32,000 people at more
than 150 manufacturing facilities in 27 countries.  ArvinMeritor
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 previously reported in Troubled Company Reporter, 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.


ASBURY AUTOMOTIVE: Will Publish 2nd Quarter Results on July 31
--------------------------------------------------------------
Asbury Automotive Group, Inc. (NYSE: ABG) (S&P, BB- Corporate
Credit Rating, Stable), one of the largest automotive retail and
service companies in the U.S., will release its second quarter
financial results before the market opens on July 31, 2003.
Senior management, including Kenneth B. Gilman, President and CEO,
Thomas F. Gilman, Senior Vice President and CFO, and Robert D.
Frank, Senior Vice President of Automotive Operations, will host a
conference call later that morning, at 10:00 a.m. Eastern Time.

The conference call will be simulcast live on the Internet and can
be accessed by logging onto http://www.ccbn.comor
http://www.asburyauto.com A replay will be available at these
sites for 14 days.

In addition, a live audio of the call will be accessible to the
public by calling (888) 855-5428; international callers, please
dial (719) 457-2665. Callers should dial in approximately 5-10
minutes before the call begins.

A conference call replay will be available one hour following the
call for 14 days and can be accessed by calling (888) 203-1112
(domestic), or (719) 457-0820 (international); access code 749849.

Asbury Automotive Group, Inc., headquartered in Stamford,
Connecticut, is one of the largest automobile retailers in the
U.S., with 2002 revenues of $4.5 billion.  Built through a
combination of organic growth and a series of strategic
acquisitions, Asbury now operates through nine geographically
concentrated, individually branded "platforms."  These platforms
currently operate 92 retail auto stores, encompassing 132
franchises for the sale and servicing of 35 different brands of
American, European and Asian automobiles. Asbury believes that its
product mix includes one of the highest proportions of luxury and
mid-line import brands among leading public U.S. automotive
retailers.  The Company offers customers an extensive range of
automotive products and services, including new and used vehicle
sales and related financing and insurance, vehicle maintenance and
repair services, replacement parts and service contracts.


ASPECT COMMS: Reports Improved Financial Results for Q2 2003
------------------------------------------------------------
Aspect Communications Corporation (Nasdaq: ASPT), the leading
provider of enterprise customer contact solutions, reported
financial results for the quarter ended June 30, 2003.

                Second Quarter Financial Results

Revenues for the second quarter of 2003 totaled $89.4 million
compared to $84.4 million for the first quarter of 2003 and $98.1
million for the second quarter last year. Software License
revenues in the second quarter of 2003 were $16.3 million compared
to $15.0 million for the first quarter of 2003 and $17.8 million
for the second quarter last year. Hardware revenues totaled $11.2
million in the second quarter compared to $9.2 million for the
first quarter and $17.8 million for the second quarter last year.
Software License Updates & Product Support revenues totaled $53.7
million in the second quarter compared to $52.3 million for the
first quarter and $53.1 million for the second quarter last year.
Professional Services & Education revenues in the second quarter
were $8.3 million compared to $8.0 million for the first quarter
and $9.4 million for the second quarter last year.

Net income for the second quarter of 2003 was $6.5 million. Net
income attributable to common shareholders for the second quarter
was $4.5 million or a profit of $0.06 per share on a basic and
fully diluted basis. This compares with a net income attributable
to common shareholders of $1.7 million or a profit of $0.02 per
share for the first quarter of 2003 and a net loss of $14.3
million or a loss of $0.27 per share for the same period last
year.

"I am extremely pleased that we have improved our operating margin
to 10%. This is a significant milestone for the company as we
continue progress towards our steady-state operating model," said
Beatriz Infante, Aspect's Chairman, President and CEO. "We
achieved our highest gross margin and operating margin since the
third quarter of 1998, have delivered three consecutive quarters
of continuously improving profitability and 6 quarters in a row of
positive cash flow from operations, and are in a strong financial
position. Naturally I am disappointed at our year-over-year
revenue performance; however, revenues did strengthen in Q2 after
a disruption in Q1 as a result of the political climate."

For the second quarter of 2003, gross margins were 56.5%. This
compares to 53.0% for the first quarter of 2003 and 44.7% for the
second quarter of 2002. Operating expenses were $41.4 million for
the second quarter of 2003 compared to $37.7 million in the first
quarter of 2003 and $54.6 million for the same period last year.

Cash, cash equivalents, and short-term investments totaled $223.3
million as of June 30, 2003. This compares to $200.6 million as of
March 31, 2003. During the quarter, the company generated $25.4
million in cash from operations. Accounts receivable at quarter-
end totaled $43.3 million and days sales outstanding were 38 days
compared to 39 days at March 31, 2003.

                Second Quarter Operational Highlights

During the quarter, the company added several new customers to its
platinum customer base, including: Exelon Corp., National Asset
Recovery Services, Network Omni, RC Wiley, Option One Mortgage,
Chela Financial, Fossil, Phillips Medical Systems, Halifax
Cetelem, Debeka Bausparkasse and Nuon Holland.

Aspect's installed base of customers continued to be an important
source for new product revenues. The company received significant
revenue from these existing Aspect customers: Centrix, Pay Pal,
Sprint, Centerpoint Energy, Inc., AT&T, Comcast, AOL, RMH
Teleservices, Royal Bank of Scotland, HSBC, Direct Line, CJ
Garland & Co. LTD, Arvato and Bertelsman.

During the quarter, Aspect completed a 13 city seminar series in
North America, Maximize Your Contact Center ROI, that focused on
how leading companies are leveraging technology from Aspect.
Partners in this series included Deloitte Consulting, Bearing
Point, Onyx, Oracle, SAP, Siebel, and Speechworks. Over 700
attendees at the seminars learned how to improve their contact
center to provide superior customer service at the highest ROI and
lowest TCO.

                          Business Outlook

The following statements are forward-looking, and actual results
may differ materially:

-- While the company does see some increased stability in the
    business environment, our planning assumption is that revenue
    for the third quarter will remain flat from the second quarter.

-- The company is planning for gross margins to be consistent with
    the second quarter. Variability in gross margin percentages is
    dependent upon, among other factors, the mix and volume of
    revenues.

-- Operating expenses for the third quarter are expected to be
    flat from the second quarter, exclusive of non-recurring items
    from the second quarter.

-- The company expects to continue to generate positive cash flow
    from operations. After the redemption of the Convertible
    Subordinated Debentures, the company expects to maintain a
    minimum cash level of $90 million through the remainder of the
    year.

Aspect Communications Corporation is the leading provider of
business communications solutions that help companies improve
customer satisfaction, reduce operating costs, gather market
intelligence and increase revenue. Aspect is a trusted mission-
critical partner with more than two-thirds of the Fortune 50,
daily managing more than 3 million customer sales and service
professionals worldwide. Aspect is the only company that provides
the mission-critical software platform, development environment
and applications that seamlessly integrate voice-over-IP,
traditional telephony, e-mail, voicemail, Web, fax and wireless
business communications, while guaranteeing investment protection
in a company's front-office, back-office, Internet and telephony
infrastructures. Aspect's leadership in business communications
solutions is based on more than 18 years of experience and more
than 8,000 implementations deployed worldwide. The company is
headquartered in San Jose, Calif., with offices around the world
and an extensive global network of systems integrators,
independent software vendors and distribution partners. For more
information, visit Aspect's Web site at http://www.aspect.comor
call 877-621-3692.

As reported in Troubled Company Reporter's January 30, 2003
edition, Standard & Poor's affirmed its 'B' corporate credit
rating and 'CCC+' subordinated debt ratings on Aspect
Communications Corp. At the same time, the ratings were removed
from CreditWatch, where they had been placed on October 25, 2002.
The outlook is stable.

San Jose, California-based Aspect Communications is a provider of
software-based call center and customer relationship management
solutions. Total debt outstanding was $173 million as of
December 31, 2002.


ATMEL CORP: Red Ink Continues to Flow in Second Quarter 2003
------------------------------------------------------------
Atmel Corporation (Nasdaq:ATML), a worldwide leader in the
development, fabrication and sale of advanced semiconductors,
announced financial results for the second quarter ended June 30,
2003.

Revenues for the second quarter of 2003 totaled $318,472,000,
versus $296,478,000 in the first quarter of 2003 and $314,753,000
in the second quarter of 2002. This represents a sequential
increase in revenues of 7% and year over year growth of 1%. Net
loss for the second quarter of 2003 totaled $44,077,000 or $0.09
per share. In the first quarter of 2003, the Company reported a
net loss of $53,120,000 or $0.11 per share. In the second quarter
of 2002, the Company's net loss was $478,931,000 or $1.02 per
share. Included in the net loss for the second quarter of 2002
were approximately $341 million of restructuring and asset
impairment charges. The net impact of currency changes during the
second quarter of 2003 was approximately $5 million, lowering
results by one penny per share.

After adding back the $70 million non-cash expense of depreciation
and amortization to the net loss of $44 million for the second
quarter 2003, the Company generated $26 million to use towards the
reduction of debt. During the quarter, the Company paid off
approximately $135 million related to the 2018 convertible bond.
Cash and cash equivalents, short-term investments and restricted
cash as of June 30, 2003 were approximately $313 million.

"We are very excited to report that we saw an increase in demand
in the majority of our product lines during the second quarter,"
stated George Perlegos, Atmel's President and Chief Executive
Officer. "Revenue grew in each of our four business units, led by
continued market share gains in smart cards and record unit
shipments of our proprietary AVR microcontrollers."

Perlegos added, "During the quarter, we continued the migration to
higher density non-volatile memory products, introducing our 128Mb
DataFlash, the world's fastest serial interface flash memory.

"Additionally, we jointly introduced with Wavecom SA a single chip
GPS/GPRS baseband processor that will serve 2.5G phones as well as
future generations of phones. Through this partnership, we
anticipate the introduction of many wireless application
components over the coming quarters.

"The Company also introduced a new secure memory solution that
utilizes the strengths of our smart card products. This new family
of lower-cost products is focused on access control and secure
data applications such as PDAs and networking systems.
Additionally, this product family provides the industry with the
only secure memory with data encryption, demonstrating Atmel's
growing presence in the security industry," concluded Perlegos.

                             Outlook

The Company believes that in the third quarter of 2003, revenues
should be sequentially flat to up slightly, as much of the
European business is seasonally slow. Additionally, R&D should be
approximately $63-65 million, while SG&A should remain between
$34-36 million. Finally, gross margins should be sequentially flat
in the third quarter.

Founded in 1984, Atmel Corporation (S&P, B Corporate Credit
Rating, Negative) is headquartered in San Jose, California, with
manufacturing facilities in North America and Europe. Atmel
designs, manufactures and markets worldwide, advanced logic,
mixed-signal, nonvolatile memory and RF semiconductors. Atmel is
also a leading provider of system-level integration semiconductor
solutions using CMOS, BiCMOS, SiGe, and high-voltage BCDMOS
process technologies.


BOISE CASCADE: Reports $4 Million Net Loss in Second Quarter
------------------------------------------------------------
Boise Cascade Corporation (NYSE: BCC) reported a second quarter
2003 net loss of $3.9 million compared with net income of $3.2
million in second quarter 2002.  In first quarter 2003, Boise
reported a net loss of $27.5 million.

Sales in second quarter 2003 increased 2% to $1.93 billion,
compared with $1.89 billion in the second quarter a year ago.
Sales in first quarter 2003 were $1.85 billion.

Boise Office Solutions operating income in the second quarter was
$23.9 million, up from $23.4 million in second quarter 2002 but
down from $29.9 million, before a nonroutine item, in first
quarter 2003.  Segment sales, income, and operating margin
declined sequentially in the second quarter, as they typically do
every year.  The operating margin was 2.6% in second quarter 2003,
compared with 2.7% in second quarter 2002.  In first quarter 2003,
the operating margin was 2.2% as reported, or 3.2% before the
nonroutine item.

Second quarter 2003 sales, as well as sales for locations
operating in both periods, increased 6% year over year to $905
million.  Sales of office supplies and paper rose 1%, technology
products sales increased 14%, and furniture sales were up 11%.
Boise's office papers sold through Boise Office Solutions
increased 6% to 144,000 tons, compared with a year ago.

Boise Building Solutions reported operating income of $9.8 million
in second quarter 2003, compared with $14.0 million in the same
quarter a year ago and an operating loss of $8.5 million in first
quarter 2003.  After a long, wet, and cold spring, especially in
the eastern United States, the building season finally got under
way in the second quarter, led by strengthening oriented strand
board markets.  Plywood markets began to improve in late May and
June.  However, the building season improved too late in the
second quarter to yield consistently positive price comparisons
for most of Boise's products.

Relative to second quarter 2002, average plywood and lumber prices
declined 4% and 14%, respectively, while average OSB prices
increased 21%. Unit sales volumes of structural panels rose 5%
year over year, while lumber volume declined 14%.  Building
materials distribution sales increased 9%, compared with second
quarter 2002.  Sales of engineered wood products grew 12%.

Relative to first quarter 2003, average OSB and plywood prices
increased 17% and 4%, while average lumber prices fell 3%.  Unit
sales volumes were 3% higher in structural panels but were down
slightly in lumber.

Operating income in Boise Paper Solutions was $1.0 million in
second quarter 2003, compared with $8.8 million in second quarter
2002 and a slight loss in first quarter 2003.  Results were lower
than those of a year ago because a 5% increase in average paper
prices was more than offset by a 12% decline in sales volume and
higher manufacturing costs.

Volume declined because of market-related curtailment of 67,000
tons during the second quarter.  Volume was further reduced by
35,000 tons due to major maintenance projects at our pulp and
paper mills in Wallula, Washington, and DeRidder, Louisiana.  The
reduced volume led to higher unit costs relative to a year ago.
In addition, combined energy and chemical unit costs were more
than 10% higher than a year ago.  Fiber costs also rose, in part
because of continued wet weather in the South during the second
quarter.

Relative to first quarter 2003, costs and average prices were
about the same, and volume declined modestly.

                              OUTLOOK

"We are very pleased with our agreement to acquire OfficeMax,
which we announced on July 14.  However, because the acquisition
will not be completed before fourth quarter 2003, we do not expect
this transaction to have any effect on our third-quarter operating
financial performance," said George J. Harad, chairman and chief
executive officer.

"We expect all three of Boise's businesses to show improved
results in the third quarter," Harad said.  "Sales and income in
our office products business typically strengthen from second-
quarter levels and should again this year. We also expect same-
location sales growth comparisons to continue their positive trend
of recent quarters.  In wood products markets, the building season
should remain strong for at least the next few months.  Finally,
in our paper business market conditions remain sluggish.  However,
some pickup in volume and easing of unit costs should lead to
modestly stronger results in this business in the third quarter."

Boise delivers office, building, and paper solutions that help
customers manage productive offices and construct well-built homes
-- two of the most important activities in our society.  Boise's
24,000 employees help people work more efficiently, build more
effectively, and create new ways to meet business challenges.
Boise also provides constructive solutions for environmental
conservation by managing natural resources for the benefit of
future generations.  Boise posted sales of $7.4 billion in 2002.
Visit the Boise Web site at http://www.bc.comfor more
information.

As previously reported, Standard & Poor's assigned its 'BB+'
preliminary rating to Boise Cascade Corp.'s (BB+/Stable/--) $500
million shelf. Rating outlook is stable.

Standard & Poor's assigned its double-'B'-plus rating to Boise
Cascade Corp.'s $150 million 7.5% senior unsecured notes due
February 1, 2008.


CALPINE: S&P Rates $3.3 Billion 2nd-Priority Senior Debt at B
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating to
Calpine Corp.'s $3.3 billion second-priority senior debt. The $3.3
billion includes: a $750 million term loan due 2007, $500 million
floating rates notes due 2007, $1.15 billion 8.5% secured notes
due 2010, and $900 million secured notes due 2013.

The notes carry the same rating as other Calpine senior secured
debt and are rated two notches higher than the 'CCC+' rated senior
unsecured debt.

At the same time, Standard & Poor's affirmed its 'B' corporate
credit rating on Calpine, its 'B' rating on Calpine's secured
debt, its 'CCC+' rating on Calpine's senior unsecured bonds, and
its 'CCC' rating on Calpine's preferred stock. The 'BB-' rating on
the existing $950 million secured term loan and the $950 million
secured revolver are withdrawn, as this debt was refinanced with
the proceeds of the recent $3.8 billion financing.

Calpine's considerable liquidity needs through 2004 and the
execution risk of raising needed cash through asset sales and debt
financings indicate a negative outlook. Should Calpine's financial
performance deteriorate further, which would include higher
leverage, or if the company cannot refinance nearing maturities
soon, or both, the ratings could fall. A stable outlook or ratings
upgrade could come only after significant debt reduction and much
improved cash flow performance.


CANWEST GLOBAL: 3rd Quarter Earnings Results Show Slight Decline
----------------------------------------------------------------
CanWest Global Communications Corp., reported combined EBITDA of
$151 million for the quarter ended May 31, 2003, compared to a pro
forma combined result of $155 million for the same three-month
period last year. EBITDA for the quarter includes aggregate one-
time costs of $21 million related to certain restructuring
activities (mostly severance related), primarily in our publishing
operations and at Fireworks Entertainment. Excluding those one-
time costs, combined EBITDA was $172 million, an increase of 11%
compared to last year's pro forma result.

Combined revenues in the quarter were $689 million, a 6% increase
from the $649 million on a pro forma combined basis for the third
quarter of 2002. Combined cash flow from operations, before
investment in, and amortization of film and television programs,
and other changes in non-cash operating accounts, was $74 million
or $0.42 per share compared to $90 million or $0.51 per share
recorded for the third quarter of 2002.

The pro forma combined results cover the same basket of assets for
2002 as for 2003, excluding the results of certain newspapers and
related assets in Saskatchewan and the Atlantic provinces that
were sold in August 2002, and including only the first six months
of results of newspaper assets in Ontario that were sold in
February 2003.

The Company reported net earnings for the quarter of $12 million
compared to net earnings of $31 million for the same period last
year. Net earnings during the current period included the $21
million in restructuring charges noted above. Excluding one-time
items, net earnings for the current period would have been $33
million compared to $31 million for the same period last year. Net
earnings and earnings per share on a combined basis are the same
as net earnings and earnings per share reported on a consolidated
basis.

Financial results for the third quarter include the following:

- Publications reported EBITDA of $72 million, an increase of 5%
   from $69 million recorded on a pro forma basis for the third
   quarter of 2002. Pro forma results include the National Post but
   do not include results in 2002 from newspapers sold on August 9,
   2002 to GTC Transcontinental Group Ltd., and on February 14,
   2003 to Osprey Media Holdings Inc. The increase in EBITDA was
   mainly attributable to revenue growth of 4% to $301 million for
   the quarter, combined with system-wide cost reductions and
   reduced operating losses at the National Post.

- EBITDA for Canadian broadcasting operations was $83 million, an
   increase of 10% from the corresponding period last year.
   Revenues, affected by the NHL playoffs in which two Canadian
   teams progressed to the later rounds, and by the war in Iraq,
   declined slightly from the third quarter of last year. Despite
   these programming disruptions, Global Television continued to
   have 4 of the top ten shows in Toronto and 3 of the top ten in
   Vancouver. Survivor VI was the top-rated show in Toronto
   followed by Friends, Will and Grace, and The Simpsons, all which
   were in the top ten.

- The restructuring charge of $21 million noted above is a direct
   result of cost cutting activities across the Company, including
   integration initiatives such as the Canadian News Desk, the
   completion of corporate services consolidation projects in
   Winnipeg, and related staffing reductions at other locations.
   These projects include the CanWest Information Technology Group,
   the centralized customer contact centre, and accounting
   operations. In addition, the charge reflects one-time costs
   relating to the restructuring of Fireworks. The restructuring
   charge, which is related mainly to severance and lease
   termination charges, will generate immediate cost savings and
   provide a rapid payback on this significant cost reduction
   strategy.

- CanWest's share of broadcast operating profits at Network TEN
   (Australia) increased to $22 million from $16 million in the
   same period last year, an improvement of 32%. CanWest's share of
   Ten's revenues also increased by 20% for the quarter to $86
   million from $72 million last year. TEN maintained its
   consistent first place position among Australian television
   networks in its target market in the 16-39 age group. Eye Corp,
   TEN's out-of-home advertising subsidiary, continued to make
   steady progress following a major re-organization last year,
   registering positive EBITDA for the quarter.

- CanWest's share of EBITDA at TV3 Ireland increased by 31% to $3
   million.

- The Company's New Zealand television networks generated positive
   EBITDA for the quarter compared to a loss of almost $2 million
   for the same quarter last year. EBITDA from CanWest's New
   Zealand radio operations increased by 36% to over $4 million,
   from $3 million for the same quarter in 2002.

For the nine-month period from September 1, 2002 to May 31, 2003,
combined revenues increased by 6% to $2,032 million compared to a
pro forma result of $1,915 million last year. EBITDA increased by
7% to $481 million from the $449 million recorded on a pro forma
basis for the nine months ended May 31, 2002. Excluding the one-
time restructuring charges, incurred in the third quarter,
combined EBITDA increased by 11% to $502 million, compared to the
pro forma result of the same period last year.

Commenting on the third quarter results, Leonard Asper, President
and CEO of CanWest, said, "We remain encouraged by the sustained,
improving trend that has been evident over the past several
quarters, as advertising markets for both television and
newspapers rebound, and revenue and cost synergies begin to
manifest themselves. This year-over-year improvement is even more
apparent at all our international broadcasting operations where
revenues and EBITDA for the quarter grew at accelerated rates,
with Network TEN, our New Zealand radio operations and TV3 Ireland
all registering EBITDA growth in excess of 30%."

Mr. Asper added that the Company also made important progress on
other key goals including the launch of COOL FM, CanWest's first
Canadian radio station and the refinancing of $275 million in 12-
1/8% subordinated notes held by Hollinger, resulting in
significantly reduced annual interest costs.

Among other developments during and subsequent to the end of the
quarter:

- CanWest newspapers won 8 of the 20 National Newspaper Awards in
   2003 presented by the Canadian Newspaper Association, with three
   awards going to the Ottawa Citizen, three awards to the
   Vancouver Sun and one award each to the National Post and
   Montreal Gazette.

- Global National with Kevin Newman received three prestigious
   Radio and Television News Directors' Association (RTNDA) awards,
   including Best Spot News for its coverage of the discovery of
   the remains of missing women in Vancouver, Best Live Special
   Event Coverage, for its three-hour special on the anniversary of
   the World Trade Center disaster, and Best Continuing Coverage
   for its story on government over-taxing to cover costs of
   airport security.

- Global News Ontario was also recognized by the RTNDA, winning
   the Bert Cannings Award for Best Newscast in Canada.

- The CRTC awarded CanWest a second radio broadcast radio licence
   in May to launch a new FM radio station in Kitchener, Ontario.
   The new station, called The Beat, to be launched later this
   year, will appeal to the region's large number of young
   listeners. The Company has also applied to the CRTC for a
   license to launch a new FM radio station in Edmonton.

- Given a persistent weakness in international markets for
   programming the Company initiated a significant change in
   business strategy and focus at Fireworks, the Company's program
   production and distribution operation. Fireworks is focusing its
   development and production activities primarily upon supporting
   the programming needs of the Company's Canadian television
   operations, in the process making programming of appeal to the
   broader North American market.

- The Company named David Drybrough to the Company's Board of
   Directors. The addition of Mr. Drybrough, a Chartered
   Accountant, increases the number of independent directors on the
   Company's Board to six of the ten directors. Mr. Drybrough will
   also serve on the Audit Committee.

- On July 9, the Company sold its investment in 2,032,300 common
   shares of SBS Broadcasting. The net cash proceeds from the
   transaction, approximately $44.1 million, will be used to reduce
   corporate debt.

                           Outlook

Markets for all business segments continue to strengthen. Economic
indicators in all the economies in which CanWest operates suggest
that the positive trend in revenues and EBITDA should continue
into 2004.

In Canada, demand for television advertising rebounded in the
fourth quarter. The pace of sales and advance bookings indicate a
resumption of year- over-year revenue gains at a level consistent
with the significant improvement for the first six months of
fiscal 2003. Up-front sales for the first quarter of 2004, and the
launch of the new television season, have been significantly
stronger than in recent years. Global Television has acquired a
number of new drama, sitcom and reality programs to renew its
schedule in 2004, including Couplings, Tarzan and Jane, Happy
Family and Two and a Half Men.

The new Canadian programming hit Train 48, which debuted in the
summer, will return to Global for a full season. Global also
launched a sizzling new breakfast show in the summer in Ontario.
Global's news ratings also continue to climb.

Newspaper advertising linage and revenue continues to show modest
growth. Strong spending in the automotive, real estate and
technology sectors has more than offset the continued weakness in
some categories, such as careers advertising.

CanWest's main priorities are to build on the positive market
trends, to constantly seek operating improvements and cost savings
across the system and to pursue revenue gains from expanded multi-
media advertising campaigns and additional revenue streams.
Another important priority is the further integration of
management and management systems across the Company. As well, the
Company will expand on the significant progress already achieved
in generating quality enhancements and capturing efficiency
benefits from content sharing through the CanWest News Service and
other cross platform initiatives, including the building of
CanWest's radio business in Canada. Debt reduction through the
application of free cash flow also remains a priority of the
Company.

CanWest Global Communications Corp. (NYSE: CWG; TSX: CGS.S and
CGS.A) -- http://www.canwestglobal.com-- is an international
media company. CanWest, Canada's largest publisher of daily
newspapers, owns, operates and/or holds substantial interests in
newspapers, conventional television, out-of-home advertising,
specialty cable channels, Web sites and radio networks in Canada,
New Zealand, Australia, Ireland and the United Kingdom. The
Company's program production and distribution division operates in
several countries throughout the world.

                          *   *   *

As previously reported, Standard & Poor's lowered its long-term
corporate credit and senior secured debt ratings on multiplatform
media company CanWest Media Inc., to 'B+' from 'BB-'. At the same
time, the ratings on the company's senior subordinated notes were
lowered to 'B-' from 'B'. The outlook is now stable.

The downgrade reflects CanWest Media's continued relatively weak
financial profile, which was not in line with the 'BB' rating
category.


CASELLA WASTE: Will Host Fiscal Q4 2003 Conference Call Thursday
----------------------------------------------------------------
Casella Waste Systems, Inc. (Nasdaq: CWST), a regional, integrated
solid waste services company, will host a conference call on
Thursday, July 24, 2003 to discuss its financial results for the
quarter and fiscal year ended April 30, 2003.

The conference call will begin at 10:00 a.m. EDT.  Interested
investors can participate by dialing (719) 457-2628 at least 10
minutes prior to the start of the conference call.

The call will also be webcast; to listen, participants should
visit Casella Waste Systems' Web site at http://www.casella.com
and follow the appropriate link to the webcast.

A replay of the call will be available on the company's website,
or by calling 719-457-0820 (conference code #734114), until 11:59
p.m. EDT on Thursday, July 31, 2003.

Casella Waste Systems, headquartered in Rutland, Vermont, is a
regional, integrated, non-hazardous solid waste services company
that provides collection, transfer, disposal and recycling
services primarily in the northeastern United States.

For further information, visit the company's Web site at
http://www.casella.com

As reported in Troubled Company Reporter's January 17, 2003
edition, Standard & Poor's assigned its 'BB-' rating to solid
waste services company Casella Waste Systems Inc.'s $325 million
senior secured credit facilities and its 'B' rating to the
company's $150 million senior subordinated notes due 2013.

At the same time, Standard & Poor's affirmed its 'BB-' corporate
credit rating on Rutland, Vermont-based Casella. The outlook
remains stable.


CENTERPOINT ENERGY: Transition Bond Co. to Enhance Disclosure
-------------------------------------------------------------
CenterPoint Energy, Inc.'s (NYSE: CNP) indirect subsidiary,
CenterPoint Energy Transition Bond Company, LLC, will provide
increased disclosure to investors regarding credit and other
performance information as it relates to its approximately $729
million of outstanding transition bonds that were issued in
October 2001.

The transition bonds are a special form of asset-backed security
issued by a special purpose subsidiary of a sponsoring utility
according to the Texas electric restructuring law that was enacted
in 1999. A specific charge imposed on the distribution of
electricity to customers supports principal and interest payments
on these transition bonds, which were authorized by the Public
Utility Commission of Texas (Texas Utility Commission) under a
financing order that is now binding, irrevocable and cannot be
appealed.

Pursuant to its undertaking, the Transition Bond Company will,
among other things:

-- Continue filing regular 10-K, 10-Q and 8-K reports with the
    Securities and Exchange Commission as long as its transition
    bonds are outstanding, even if it is eligible to suspend such
    filings; and

-- Include in its SEC reports:

-- Quarterly disclosure of payments to the bond indenture trustee;

-- Quarterly disclosure stating whether, in all material respects,
    for each materially significant retail energy provider (REP),
    (i) each REP has been billed in compliance with the applicable
    financing order of the Texas Utility Commission, (ii) each REP
    has made all payments in compliance with the requirements
    outlined in the financing order, and (iii) each REP satisfies
    the creditworthiness requirements of the financing order;

-- Quarterly disclosure of collection account and sub-account
    balances and semi-annual disclosure of payments of principal on
    the transition bonds, as well as semi-annual updated summary of
    scheduled versus actual payments of principal on the transition
    bonds;

-- Annual statements required under the servicing agreement
    regarding transition bond balances, the balances of the
    collection account and sub-accounts and certain projections of
    those balances;

-- Any change in the long-term or short-term credit ratings
    assigned by the rating agencies to the affiliated servicer;

-- True-up filings made with the Texas Utility Commission (or web
    site links to those filings) as they relate to proposed
    adjustments to customer charges to meet payments by the
    Transition Bond Company to bondholders, and the actions taken
    on those filings by the Texas Utility Commission; and

-- Any regulatory or legislative changes that would reasonably be
    expected to have a material effect on the transition bonds.

Representatives of the Transition Bond Company will consult
periodically with the Texas Utility Commission's financial advisor
and with secondary market makers in the transition bonds to
discuss transition bond liquidity and trading. They will also
conduct informational meetings or conference calls and distribute
information to ABS research analysts and corporate fixed income
market participants. The company will also seek to make available
on a web page a monthly statement of payments made to the bond
indenture trustee, additional information regarding the transition
bonds, the company's SEC filings and the organizational structure
of the issuer and the affiliated servicer.

The Transition Bond Company is undertaking to provide this
information in response to a desire expressed by the Texas Utility
Commission through its financial advisor, Saber Partners, LLC, to
improve the amount and timeliness of information available in the
market regarding this type of ABS.

CenterPoint Energy, Inc., headquartered in Houston, Texas, is a
domestic energy delivery company that includes electric
transmission and distribution, natural gas distribution and sales,
interstate pipeline and gathering operations, and more than 14,000
megawatts of power generation in Texas. The company serves nearly
five million customers primarily in Arkansas, Louisiana,
Minnesota, Mississippi, Missouri, Oklahoma, and Texas. Assets
total more than $20 billion. CenterPoint Energy became the new
holding company for the regulated operations of the former Reliant
Energy, Incorporated in August 2002. With more than 11,000
employees, CenterPoint Energy and its predecessor companies have
been in business for more than 130 years. For more information,
visit the Web site at http://www.CenterPointEnergy.com

                          *   *   *

As reported in Troubled Company Reporter's March 5, 2003 edition,
Fitch Ratings affirmed the outstanding credit ratings of
CenterPoint Energy, Inc., and its subsidiaries CenterPoint Energy
Houston Electric LLC and CenterPoint Energy Resources Corp.  The
Rating Outlook for all three companies remains Negative.

          The following ratings were affirmed by Fitch:

                    CenterPoint Energy, Inc.

        -- Senior unsecured debt 'BBB-';
        -- Unsecured pollution control bonds 'BBB-';
        -- Trust originated preferred securities 'BB+';
        -- Zero premium exchange notes 'BB+'.

              CenterPoint Energy Houston Electric, LLC

        -- First mortgage bonds 'BBB+';
        -- $1.3 billion secured term loan 'BBB'.

               CenterPoint Energy Resources Corp.

        -- Senior unsecured notes and debentures 'BBB';
        -- Convertible preferred securities 'BBB-'.


CLAYTON HOMES: Cerberus Reconfirms Interest in Acquiring Company
----------------------------------------------------------------
Wednesday last week, the following letter was faxed to Kevin T.
Clayton, CEO and President of Clayton Homes, Inc.:

Kevin T. Clayton
Chief Executive Officer and President
Clayton Homes, Inc.
Clayton Homes Headquarters
5000 Clayton Road
Maryville, TN 37804

Dear Mr. Clayton:

"We were pleased to read the public announcement of your
willingness to negotiate with third parties for the acquisition of
the Company, and we hereby reaffirm our interest in pursuing such
an acquisition.  We are eager to commence due diligence as soon as
possible, particularly in view of the unreasonably short two-week
time frame proposed.  We have prepared information requests which
we would like to convey as soon as possible, and we have a team of
advisors prepared to commence due diligence immediately wherever
appropriate.  Please contact us so that we may begin this process.

"We are concerned that the two-week period you announced is
unreasonably short to permit adequate due diligence and
preparation of a definitive proposal, particularly as the speed
and substance with which the Company responds to information
requests will substantially impact whether this period will be
used productively.  However, we are prepared to work towards this
timetable.

"We also wish to reconfirm that our sole and genuine interest is
to acquire the Company.  We own no Clayton securities.  We have
not sought exclusivity arrangements, expense reimbursements or any
other benefit or advantage.  We only ask for a full and fair
opportunity to seek to reach agreement.

                                Very truly yours,
                                   /s/
                                Frank Bruno

At this time there will be no further comment by Cerberus
regarding this matter.

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.


CHIPPAC: S&P Ups Bank Loan Rating to BB- after Balance Repayment
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its bank loan rating for
ChipPAC Inc. to 'BB-' from 'B+', reflecting a material reduction
in the company's bank facility following the repayment of the
remaining balance of the outstanding term loan. The bank facility
retains an unused $50 million revolving credit facility. At the
same time, Standard & Poor's affirmed ChipPAC's corporate credit
and other ratings. The outlook remains negative.

Following a private offering of convertible subordinated notes
worth $150 million in June 2003, ChipPAC repaid more than $50
million in senior loans, including the balance outstanding on its
term loan in the company's bank facility.

The Santa Clara, California-based company had total lease-adjusted
debt as of March 2003, pro forma for the notes issue and debt
repayments, estimated at about $420 million.

"While unit volumes and average selling prices have recently shown
signs of stabilizing, we expect sequential revenue improvements to
be moderate," said Standard & Poor's credit analyst Emile
Courtney. "Although ChipPAC has made progress diversifying its
sales among computing, communications, and consumer end-markets,
customer concentration remains higher than for its peers."

The 'BB-' bank loan rating for ChipPAC reflects a strong
likelihood of full recovery of principal in the event of default
or bankruptcy. A potential default scenario could arise from a
prolonged contraction in ChipPAC's markets combined with excessive
financial leverage.

Given uncertain growth prospects in the semiconductor industry
over the near term, new capital spending by ChipPAC is largely
tied to specific revenue-generating customer programs. ChipPAC is
likely to rely on cash balances following its recent notes issue
to supplement internal cash flow to meet its expected capital-
spending program for 2003. As a result, leverage is likely to
remain elevated until profitability improves. Deterioration in
debt protection measure could result in lower ratings.


COM21: U.S. Trustee Convenes Sec. 341(a) Meeting on August 13
-------------------------------------------------------------
The United States Trustee will convene a meeting of Com21, Inc.'s
creditors on August 13, 2003, 10:00 p.m., at U.S. Federal
Building, 280 South 1st St., #130, San Jose, California 95113.
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.

Com21, Inc., headquartered in Milpitas, California, is a global
supplier of system solutions for the broadband access market.  The
Company filed for chapter 11 protection on July 15, 2003 (Bankr.
N.D. Calif. Case No. 03-54533).  David S. Caplan, Esq., at the Law
Offices of Brooks and Raub represents the Debtor in its
restructuring efforts.  As of March 31, 2003, the Debtor listed
$18,305,000 in total assets and $30,535,000 in total debts.


CYBEX INT'L: Arranges $19MM Working Capital & Term Loan Facility
----------------------------------------------------------------
Cybex International, Inc. (AMEX: CYB), a leading exercise
equipment manufacturer, has successfully refinanced in full its
prior credit facility. Cybex' new credit arrangements include a
$19,000,000 working capital and term loan facility from CIT
Group/Business Credit, Inc. and a $11,000,000 mortgage loan from
Hilco Capital LP. As part of the refinancing, Cybex' principal
shareholder, UM Holdings Ltd, exchanged $4,900,000 of subordinated
notes for a new series of Cumulative Convertible Preferred Stock,
and provided additional credit support.

John Aglialoro, Chairman and CEO, stated, "The new credit facility
removes a major uncertainty for the Company and provides Cybex
with liquidity to pursue its business plan. We appreciate the
confidence shown in us by CIT, Hilco and UM."

Cybex International, Inc., is a leading manufacturer of premium
exercise equipment for commercial and consumer use. Cybex and the
Cybex Institute, a training and research facility, are dedicated
to improving human performance based on an understanding of the
diverse goals and needs of individuals of varying physical
capabilities. Cybex designs and engineers each of its products and
programs to reflect the natural movement of the human body,
allowing for variation in training and assisting each unique user
- from the professional athlete to the rehabilitation patient - to
improve their daily human performance. For more information on
Cybex and its product line, visit the Company's Web site at
http://www.eCybex.com

As reported in Troubled Company Reporter's May 15, 2003 edition,
the Company's March 29, 2003 balance sheet shows a working capital
deficit of about $23 million, while its total shareholders' equity
dwindled to about $640,000 from about $2.4 million three months
ago.

The Company also reported on the status of its credit
arrangements. The Company entered into a forbearance agreement
with its lenders pursuant to which the lenders have agreed not to
exercise their rights with respect to certain financial covenant
defaults under its Credit Agreement during a forbearance period
that runs through June 30, 2003, subject to extension to
August 30, 2003 if certain conditions are met. UM Holdings Ltd., a
principal stockholder of the Company, has continued to provide
financial support, with $3,950,000 in subordinated loans
outstanding as of May 9, 2003.


CYPRESS SEMICON: Second Quarter 2003 Results Enter Positive Zone
----------------------------------------------------------------
Cypress Semiconductor Corporation (NYSE:CY) announced that revenue
for the 2003 second quarter was $203.1 million, up 12% from the
prior quarter revenue of $181.0 million and up slightly from the
year-ago second quarter revenue of $202.1 million. Pro forma net
income for the 2003 second quarter was $3.4 million, resulting in
a pro forma income per share of $0.03, compared with the prior
quarter pro forma loss per share of $0.10 and the year-ago second
quarter pro forma loss per share of $0.05.

Including amortization of intangibles and other acquisition-
related, restructuring and other special charges and credits,
Cypress posted a GAAP net loss of $12.4 million for the 2003
second quarter, resulting in a loss per share of $0.10, compared
with the prior quarter loss per share of $0.27, and the year-ago
second quarter loss per share of $0.23.

Cypress CEO T.J. Rodgers said, "We're very pleased with our return
to pro forma profitability and positive free cash flow (cash from
operations less capital expenditures) this quarter. The sequential
revenue growth of 12% in the second quarter included incremental
sales from the Micron synchronous (networking) SRAM business we
took over. Bookings and turns were strong all quarter, and we
ended the quarter with book-to-bill greater than 1.0, even with
the Micron billing considered. Backlog grew sequentially as well."

Rodgers continued, "Gross margin for the 2003 second quarter was
approximately 48%, aided by a 3% benefit from the sale of
previously reserved inventory. Operating expenses (Research &
Development; Sales, General and Administrative) as a percentage of
sales, improved approximately four percentage points in the 2003
second quarter, aided by cost reductions and incremental sales. We
ended the quarter with cash of $600 million, of which
approximately $328 million was earmarked for the redemption of our
convertible subordinated notes, which was completed shortly after
the end of the second quarter."

                          MARKET SEGMENTS

Wide Area Network and Storage Area Network (WAN/SAN)

Revenue from the WAN/SAN segment, which accounted for 32% of
second-quarter revenue, increased 17% from the prior quarter,
aided by the Micron SRAM transaction. The segment posted a gross
margin of approximately 55%. The datacom market continues to
suffer from demand weakness, which we expect to continue through
2003. We anticipate flat revenue in the third quarter. Segment
highlights include:

-- Cypress sampled the industry's first full-function, 72-Mbit
synchronous No Bus Latency(TM) (NoBL(TM)) SRAM, the highest-
density SRAM currently available. Manufactured on Cypress's
proprietary RAM9T 90-nanometer process technology, the CY7C1480
targets next-generation, high-speed networking applications.

-- Cypress sampled the Ayama(TM) 10000 family of network search
engines, optimized for multiprotocol packet classification and
forwarding at 266 million searches per second. In Internet
routers, switches, and other network-infrastructure applications,
NSEs accelerate packet processing by offloading search functions
from the application-specific integrated circuit or network
processor. The Ayama 10000 enables network equipment suppliers to
quickly deploy packet processing solutions at 10 gigabits per
second and beyond.

-- Cypress passed the 1.5 million-unit mark in NSE shipments. This
milestone demonstrates Cypress's leadership in network search
solutions, including TCAM-based NSEs and network coprocessors.

-- Cypress launched its Cynapse(TM) software platform, a unified
application-simulation and development environment for Cypress
NSEs. The software package provides a standard interface for
hardware and software simulations, system performance evaluations,
and reference applications and diagnostics. Software is fast
becoming a key differentiator in the NSE business.

-- Cypress announced that it will use the Intel(R) Control Plane
Platform Development Kit, a software toolkit based on standards
developed by the Network Processor Forum to stimulate the
development of a broad range of applications for NSEs and
coprocessors. Cypress's use of the toolkit will ensure that its
NSEs are compatible with both Intel NPUs and NPF standards.

-- Cypress announced first revenue on its FastEdge(TM) family of
high-performance clock and data drivers. The new devices leverage
Cypress's proprietary silicon germanium technology and advanced
design techniques to achieve jitter performance that is up to 90
percent better than alternative solutions. The FastEdge family
customizes a single base die with metal masks to provide a variety
of clock and data drivers for customers without sacrificing time-
to-market.

-- Cypress is ramping production of its field-programmable zero
delay buffer. The CY23FP12 device is a high-performance, 200-MHz
clock-distribution solution with a flexible architecture to fit a
wide range of applications. The programmable, single-chip ZDB can
replace multiple, fixed-function clock-distribution devices. It
uses Cypress's proprietary, non-volatile, silicon oxide nitride
oxide silicon (SONOS) technology.

Wireless Terminals and Wireless Infrastructure (WIT/WIN)

Revenue from the WIT/WIN segment, which accounted for 29% of
second-quarter revenue, increased 2% from the prior quarter with a
gross margin of approximately 36%. The increase in revenue is
attributable to a slightly higher-density product mix and to the
broadening of our customer base, which we believe resulted in some
market-share gains. We expect WIT/WIN sales to be up in the third
quarter of 2003, aided by seasonal trends. Segment highlights for
the quarter include:

-- Cypress realized first revenue on its 16-Mbit, one-transistor
pseudo-SRAM (PSRAM) product. The 1.8-V, 70-nanosecond PSRAM device
offers higher density than a conventional SRAM, at a lower cost.
PSRAMs are an integral part of Cypress's portfolio of
MicroPower(TM) SRAMs for cell phones.

-- Cypress sampled a 16-Mbit, second-generation More Battery
Life(TM) (MoBL2(TM)) MicroPower SRAM, manufactured using the
company's proprietary 0.13-micron R8(TM) technology. The
CY7C62167/8DV device is the world's smallest low-power 16-Mbit
SRAM, increasing battery life, talk time, and data storage
capabilities in cell phones.

-- Cypress introduced two FailSafe(TM) buffers (CY23FS04 and
CY23FS08) that provide an uninterruptible clock source for
applications such as storage area networking or wireless
basestations, where continuous operation of the system is required
to maintain mission-critical data in the event of a primary
reference clock failure.

Computation and Consumer

Revenue from the computation and consumer segment, which accounted
for 35% of second-quarter revenue, was up 18% from the prior
quarter and posted a gross margin of approximately 48%. While PC
clock demand was flat with the prior quarter, as anticipated, the
sales of other consumer-related clocks and USB controllers grew
briskly in the quarter, aided by a continuing increase in the USB
adoption rate. We expect the computation and consumer segment
sales to be up in the third quarter, aided by cyclically stronger
demand for consumer products. Segment highlights include:

-- Cypress sampled its fifth-generation USB 2.0-to-ATA/ATAPI
bridge device, the ISD-300LP, adding to its market-leading USB
portfolio a low-power solution for external mass storage, such as
hard drives, CD-R/Ws (read-write devices), and DVD players. The
best-in-class power efficiency of the ISD-300LP enables enhanced
portability for mass-storage products.

-- Fueled by growing consumer demand for USB 2.0-enabled PCs and
peripherals, Cypress shipped its 250 millionth USB controller
during the quarter, solidifying its overall No. 1 USB market
position. Cypress USB controllers are used in a variety of
products from mice, keyboards, hubs, and mass-storage peripherals,
to video and multimedia players, set-top boxes, and photo
printers.

-- Cypress and Envara Inc. announced joint development of a low-
cost, high-performance USB 2.0-to-Wireless LAN solution,
consisting of an external USB 2.0 adapter that enables users to
connect to IEEE802.11g or "multimode" IEEE802.11a/b/g WLANs at the
current top WLAN speed of 54 Mbps. The solution is designed to
extend the benefits of the popular, high-speed USB interface to
the growing number of wireless cafes and "hot spots" that are
proliferating in airports, coffee houses, and other retail
establishments, providing mobile PC users with fast, easy,
wireless connectivity.

-- Cypress's WirelessUSB(TM) solution, a revolutionary 2.4-GHz
radio frequency interconnect protocol, received several best-in-
class awards during the quarter. The new technology -- a wireless
solution for mice, keyboards, game controllers and other systems,
which offers an optimal combination of latency, power, bandwidth
and price -- was selected by EDN magazine as the winner of its
"Innovation of the Year" award in the Communications product
category. EDN is one of the industry's most widely read design
publications. The WirelessUSB product family also received the
"Electron d'Or 2003" award in the Network and Telecom Chipset
category from Electronique, the leading French design publication.

-- Cypress and NMB Technologies, the world's No. 1 keyboard
manufacturer, signed an agreement to co-develop WirelessUSB
keyboard and mouse solutions. Also during the quarter, Saitek -
one of the world's leading manufacturers of video-game peripherals
- selected Cypress's WirelessUSB solution for its PC and consumer
products.

-- Cypress continued to ramp production of a family of clock chips
targeting the digital still camera market. Cypress added several
million units per quarter in business with design wins to major
customers, including Sony(R) and Fuji Photo Film, which accounted
for 2.2 million units this quarter. The DSC clock business is
expected to grow 30% in the current quarter.

-- Cypress qualified its CY22313 frequency timing generator, which
combines into a single device all the primary timing functions for
the Sony PS2r gaming system. Shipments of the new clocking
solution are planned for the current quarter.

Cypress Subsidiaries

Revenue from Cypress subsidiaries, which accounted for 4% of
second-quarter revenue, was up 6% from the prior quarter. The
subsidiaries posted a gross margin of approximately 74%. The
excellent gross margin was offset by the high operating expenses
of the new ventures. As a group, the subsidiaries had a pre-tax
loss of $8.0 million in the quarter. We expect revenue
contribution from the subsidiaries to be up at least 15% in the
third quarter. Segment highlights include:

-- Cypress MicroSystems Inc., announced a new family of
Programmable System-on-Chip(TM) (PSoC(TM)) devices. PSoC Energy
Meter ICs harness the capabilities of the basic reconfigurable
PSoC mixed-signal array, which includes an onboard
microcontroller, in an application-specific solution for engineers
building commercial and residential power meters. PSoC devices
integrate analog and digital logic, memory, and processing
circuitry in one small package. When used in a power-metering
application, PSoC reduces the component count and enhances
functionality, compared with standard microcontroller-based
solutions that limit the ability of end manufacturers to provide
feature-rich products.

-- CMS also introduced a single-chip fluorescent ballast
controller capable of supporting the fast, cost-efficient
development of electronic lighting systems. The CY8C0100
controller solution, which includes a reference design kit,
enables the difficult-to-achieve automatic dimming of fluorescent
lighting in response to ambient lighting conditions, facilitating
substantial energy savings.

-- SunPower Corporation sampled the A-300 solar cell, the world's
most-efficient, low-cost silicon solar cell. Based on a unique
rear-contact design -- which maximizes the working cell area,
hides unsightly wires, and makes automated production easier --
the A-300 achieves over 20 percent efficiency, compared with
currently available cells in the 12%-15% range. Cypress holds a
57% ownership stake in SunPower and is lending its manufacturing
and business expertise to the company's 1-megawatt pilot
manufacturing line near Cypress's Fab 2 manufacturing facility in
Round Rock, Texas, as well as to its 25-megawatt production plant
in Manila, the Philippines, which is currently under construction.

-- Silicon Light Machines increased its profits during the
quarter, leveraging existing development contracts to create
faster, more precise optical modulators to be used in computer-to-
print and other lithography applications. The new products are
based on SLM's patented Grating Light Valve(TM) (GLV(TM))
technology -- a light-switching optical micro-electromechanical
system device. SLM will showcase its use of the GLV device for
lithography applications in San Francisco at the Semicon West
conference, the semiconductor manufacturing industry's largest
annual exhibition. In addition, SLM signed a licensing agreement
to commercialize its PyroFree(TM) technology, which dramatically
improves the manufacturability of lithium tantalite surface
acoustic wave devices by eliminating the electrical arcing
problems that have historically plagued the material.

                       Financing Developments

During the second quarter, Cypress issued $600 million of five-
year convertible subordinated notes with a coupon of 1.25%. Each
note is convertible into 55.172 shares of Cypress stock plus a
cash payment of $300.00. The notes are callable at anytime on or
after June 20, 2006. At anytime prior to maturity, Cypress may, at
its option, elect to terminate the holders' conversion rights if
the closing price of Cypress's common stock exceeds $21.75
(subject to certain adjustments) for 20 days out of a 30
consecutive trading day period. Cypress used approximately $400
million of proceeds to retire the company's existing convertible
debt as described below.

Simultaneous with the offering, the company purchased nine million
shares of Cypress stock for approximately $95 million in order to
reduce the potential dilutive impact of the offering.

The company also used approximately $49 million of the proceeds to
put in place issuer call-spread options to potentially reduce the
dilutive effect of the shares issuable upon conversion of the
convertible notes. The call spread expires July 15, 2004. This
transaction has the potential to reduce the number of shares
outstanding by up to 12 million shares.

Cypress also called for the full redemption of its 4% convertible
subordinated notes due February 2005. As of July 1, 2003, the
entire $283 million principal amount of debt was retired.

Cypress called for the redemption of its 3.75% convertible
subordinated notes due July 2005. As of July 8, 2003, all but
approximately $70 million of the $186 million principal amount of
debt was retired.

Between the redemptions and privately negotiated purchases,
Cypress retired approximately $400 million of its existing
convertible debt, consistent with its plans at the time of the
recent $600 million offering. Cypress intends to retire the
balance of the 3.75% convertibles at or before maturity, either
from its cash balance or cash generated from operations through
additional redemptions or other purchases.

On June 30, 2003, Cypress filed a resale Shelf Registration
Statement on Form S-3 for the registration of the shares
underlying the recently issued convertible debt. The registration
statement will become effective upon approval by the Securities
and Exchange Commission.

Other Developments

-- Cypress received the International Organization for
Standardization (ISO) 9001:2000 certification, the newest and most
demanding of the ISO 9001 standards. The certification covers all
Cypress locations and underscores the company's commitment to
provide the highest-quality products and services to customers.

Conclusion

Rodgers concluded, "We expect to grow revenue sequentially in the
third quarter of 2003, to continue to generate free cash and to
improve our pro forma profitability. The economy is still
struggling, but -- after a false start in 2002 -- this feels like
the beginning of a recovery."

Cypress Semiconductor Corporation (NYSE:CY) is Connecting from
Last Mile to First Mile(TM) with high-performance solutions for
personal, network access, enterprise, metro switch, and core
communications-system applications. Cypress Connects(TM) using
wireless, wireline, digital, and optical transmission standards,
including USB, Fibre Channel, SONET/SDH, Gigabit Ethernet, and
DWDM. Leveraging its process and system-level expertise, Cypress
makes industry-leading physical layer devices, framers, and
network search engines, along with a broad portfolio of high-
bandwidth memories, timing technology solutions, and programmable
microcontrollers. More information about Cypress is accessible
online at http://www.cypress.com

As reported in Troubled Company Reporter's June 2, 2003 edition,
Standard & Poor's Ratings Services assigned its 'B-' rating to
Cypress Semiconductor Corp.'s $500 million convertible
subordinated notes, sold under rule 144a. At the same time,
Standard & Poor's affirmed the company's 'B+' corporate credit
rating and its other ratings. The outlook remains negative.

Proceeds of the new issue will be used to redeem at least $400
million of Cypress' existing convertible subordinated notes, to
repurchase shares of its common stock, and to purchase call spread
options with respect to its common stock. San Jose, California-
based Cypress had about $542 million in debt and capitalized
operating leases outstanding at March 31, 2003.


DALEEN TECH: Receives Critical Vendor Payment from Allegiance
-------------------------------------------------------------
Daleen Technologies, Inc. has announced that it has received
payment from Allegiance Telecom, Inc. under the terms of the Order
Pursuant to Section 105(a) of the Bankruptcy Code Authorizing
Payment of Prepetition Claims of Critical Vendors, entered in the
case styled In re Allegiance Telecom, Inc., et al., case no.
03-13057 (RDD), pending in the United States  Bankruptcy Court for
the Southern District of New York.  This payment (in addition to
amounts received as reported on June 23, 2003) represents payment
in full for prepetition claims of the Company, and releases
Allegiance from any further payment to the Company of prepetition
claims. As a critical vendor, the Company believes it will
continue to receive payment for services rendered to Allegiance
post-petition in accordance with the terms of the Order; however,
there can be no assurance that this business relationship will
continue during the course of the bankruptcy proceedings. If
Allegiance ceases to do business with the Company and the Company
fails to obtain additional financing or fails to engage in one or
more strategic alternatives, it may have a material adverse effect
on the Company's ability to operate as a going concern.

                           *   *   *

             LIQUIDITY AND GOING CONCERN UNCERTAINTY

In its 2002 Annual Report filed on SEC Form 10-K, Daleen reported:

"Net cash used in operating activities was $9.2 million for the
year ended December 31, 2002, compared to $31.9 million for the
year ended December 31, 2001. The principal use of cash for both
periods was to fund our losses from operations.

"Net cash provided by financing activities was $3.6 million for
the year ended December 31, 2002, compared to $25.1 million for
the year ended December 31, 2001. In 2002, the cash provided was
primarily related to the net proceeds received from the 2002
Private Placement. In 2001, the cash provided was primarily
related to the net proceeds received from the 2001 Private
Placement.

"Net cash used in investing activities was $1.1 million for the
year ended December 31, 2002 compared to $1.9 million for the year
ended December 31, 2001. The cash used in 2002 was primarily
related to transaction costs associated with the 2002 Private
Placement. The cash used in 2001 was primarily related to a non-
recourse note receivable issued to our chairman and chief
executive officer for approximately $1.2 million and capital
expenditures of approximately $780,000.

"We continued to experience operating losses during the year ended
December 31, 2002 and had an accumulated deficit of $210.9 million
at December 31, 2002. Cash and cash equivalents at December 31,
2002 was $6.6 million. The cash used in operations during the year
ended December 31, 2002 was a significant improvement from
previous years. The 2001 Restructurings and 2002 Restructuring
resulted in a reduction in operating expense levels and cash usage
requirements in the year ended December 31, 2002.

"We intend to continue to manage our use of cash. We believe the
cash and cash equivalents at December 31, 2002, together with the
reduced cost structure resulting from the 2001 Restructurings and
2002 Restructuring, the acquisition of the revenue stream expected
from the BillingCentral service offering as well as our 2003
anticipated revenue, may be sufficient to fund our operations for
the foreseeable future. However, the telecommunications and
software industries are still faced with many challenges. In
addition, there is a high business concentration risk with certain
of our outsourcing services customers and if any of these
customers were to terminate their agreement with us it would
severely impact our business. We provide outsourcing services to
our largest customer pursuant to a contract expiring at the end of
December 2003. In addition, the customer has financial restraints.
If this customer were to cease doing business with us for any
reason, we may be required to further reduce our operations and/or
seek additional public or private equity financing or financing
from other sources or consider other strategic alternatives.
There can be no assurances that additional financing or strategic
alternatives will be available, or that, if available the
financing or strategic alternatives will be obtainable on terms
acceptable to us or that any additional financing would not be
substantially dilutive to our existing stockholders. If this
customer were to cease doing business with us for any reason, and
we failed to obtain additional financing or failed to engage in
one or more strategic alternatives it may have a material adverse
affect on our ability to meet our financial obligations and to
continue to operate as a going concern. Our audited consolidated
financial statements included elsewhere in this Form 10-K have
been have been prepared assuming that we will continue as a going
concern, and do not include any adjustments that might result from
the outcome of this uncertainty."


DELTA AIR LINES: Second Quarter Operating Revenues Tumble 4.8%
--------------------------------------------------------------
Delta Air Lines (NYSE: DAL) reported results for the quarter
ending June 30, 2003, and other significant news. The key points
are, Delta:

* Reports second quarter net income of $184 million, or $1.40
   diluted earnings per common share, which includes government
   reimbursements and a gain from the sale of Worldspan.

* Excluding unusual items described below, reports a second
   quarter net loss of $237 million, or $1.95 loss per common
   share, which is $75 million worse than the June 2002 quarter net
   loss.

* Ends quarter with $3.0 billion in cash, of which $2.8 billion is
   unrestricted cash.

* Reports operating profit of $31 million for the month of June.

* Continues to execute plans to address industry challenges while
   anticipating a slow recovery.

Delta Air Lines reported net income of $184 million and diluted
earnings per share of $1.40 for the June 2003 quarter, which
includes government reimbursements of security costs and a gain
from the sale of Delta's equity investment in Worldspan. In the
June 2002 quarter, Delta reported a net loss of $186 million and
loss per share of $1.54.

Excluding the unusual items described below, the June 2003 quarter
net loss and loss per share were $237 million and $1.95,
respectively, compared to a net loss of $162 million and loss per
share of $1.34 in the June 2002 quarter. The First Call consensus
estimate for the June 2003 quarter was a loss per share of $2.08,
excluding unusual items. Delta reported an operating profit of $31
million in the month of June. Positive cash flow from operations
was $335 million for the June 2003 quarter, which included
government reimbursements of $398 million.

                     Earnings Performance

"Even though we saw some initial post-war traffic recovery, the
overall revenue environment remains weak. One-time events played
the most significant role in Delta's June quarter results," said
Leo F. Mullin, chairman and chief executive officer. "While
encouraged by our progress, it is clear that Delta must remain
diligent in our efforts to establish a viable revenue-to-cost
relationship. Delta still faces many challenges as we cautiously
emerge from the worst business cycle in our company's history."

Second quarter operating revenues decreased 4.8 percent, compared
to the June 2002 quarter. Charter revenue for the June 2003
quarter was $71 million, including $51 million from military
charters. The significant increase in military charter revenue
offsets some of the negative revenue impact due to the military
action in Iraq. Passenger unit revenues increased 6.1 percent,
compared to the June 2002 quarter. Delta has outperformed the
industry in year-over-year unit revenue comparisons for each of
the last 13 months through May 2003 and expects to continue to
outperform the industry for the June 2003 quarter.

As a result of the government reimbursements, which were recorded
as an offset to operating expenses, operating expenses for the
June 2003 quarter decreased 13.6 percent and unit costs decreased
3.4 percent as compared to the June 2002 quarter.

Excluding unusual items, operating expenses decreased 1.9 percent,
compared to the June 2002 quarter. Excluding unusual items, unit
costs increased 9.7 percent and fuel price neutralized unit costs
increased 7.4 percent, principally due to significant capacity
reductions in the June 2003 quarter. The increase in total unit
costs was primarily war-related, driven by higher fuel costs and
short-term capacity reductions. Increases in fuel price drove unit
costs up 2.3 percent, while the war-related capacity reductions
caused an additional 7.1 percent year-over-year increase. Absent
these items, unit costs would have been flat to the prior year.

The load factor for the June 2003 quarter was 75.2 percent, a 1.8
point increase as compared to the June 2002 quarter. System
capacity was down 10.7 percent and mainline capacity was down 14.0
percent on a year-over-year basis. In the June quarter, Delta
restored approximately 4.0 percent of the total 12.0 percent of
system capacity that had been suspended as a result of the
conflict in Iraq. While demand has increased since the end of
major military combat in Iraq, it has not yet returned to pre-war
levels and the remaining capacity reductions are necessary in
order to best match capacity with demand.

In the June 2003 quarter, Delta's fuel hedging program reduced
costs by $36 million, pretax. Delta hedged 84 percent of its jet
fuel requirements in the quarter at an average price of $0.78 per
gallon, excluding fuel taxes. Delta's total fuel price for the
June 2003 quarter was $0.76 per gallon.

         Delta Remains Focused on Maintaining Liquidity

While Delta began the June 2003 quarter with a $2.5 billion
liquidity position, there were strategic opportunities in the
capital markets during the quarter that allowed Delta to improve
its liquidity position.

"While Delta is taking the right steps to navigate through the
financial crisis that has plagued the industry, the company still
faces a long road to recovery," said M. Michele Burns, executive
vice president and chief financial officer. "We continue to seek
out every opportunity to build a solid financial foundation for
the future."

As of June 30, 2003, Delta had $3.0 billion in cash, of which $2.8
billion is unrestricted. Delta also had unencumbered aircraft with
an estimated base value of $2.8 billion, of which approximately
$500 million is eligible under Section 1110 of the U.S. Bankruptcy
Code.

Delta had positive cash flow from operations for the June 2003
quarter of $335 million. Excluding unusual cash items, Delta
achieved breakeven cash flow from operations in the quarter.

Delta completed several significant financing transactions during
the June 2003 quarter that increased Delta's liquidity position
from $2.5 billion at March 31, 2003, to $3.0 billion at June 30,
2003. In April, Delta borrowed $490 million of new secured long-
term debt. Also during the quarter, Delta issued $350 million of
convertible senior notes, including a $50 million option exercised
by the initial purchaser. On June 30, 2003, Delta completed the
sale of its equity investment in Worldspan, which resulted in an
immediate cash payment of approximately $285 million. The gain
from this sale is recognized in other income (expense) on the
Consolidated Statements of Operations.

Delta had a $250 million receivables securitization agreement that
expired at the end of March. As a result, on April 2, 2003, Delta
paid $250 million, which represented the total amount owed under
this agreement. In addition, Delta terminated its $500 million
undrawn credit facility that was due to expire in August 2003.

Also during the quarter, Delta received a five-year $409 million
letter of credit facility that replaced an existing facility due
to expire in June 2003.

           Delta Continues Implementation of Cost Cutting
                 and Revenue Enhancing Initiatives

Delta recently announced details of its profit improvement
program, which includes company-wide initiatives intended to
reduce non-fuel unit costs by 15 percent by the end of 2005, as
compared to 2002. Delta recognizes that network carriers must make
structural changes in order to compete effectively in the ever
changing industry environment. The company's broad-based profit
improvement program is fundamentally transforming the way the
company does business, improving productivity, increasing
efficiencies and redesigning the travel process to provide
customers with consistency, control and choice. During the June
2003 quarter and as discussed below, Delta continued implementing
these initiatives and is currently realizing initial benefits from
the program.

The first phases of Delta's marketing agreement with Continental
Airlines and Northwest Airlines were launched in June. Delta and
Northwest began placing their codes on each other's flights out of
Memphis and Salt Lake City in June, while Delta and Continental
began codesharing on flights from Atlanta, Cleveland and Salt Lake
City in July. Other customer benefits, including reciprocal
frequent flyer point accrual and award redemption, airport lounge
reciprocity, and frequent flyer elite status benefits also went
into effect in June. By the end of 2003, Delta expects to operate
1,300 codeshare flights and place its code on an additional 1,300
flights operated by Northwest and Continental. The alliance is
expected to provide Delta with an annual revenue benefit of
approximately $200 million when fully implemented.

Song, Delta's new low-fare operation, was successfully launched on
April 15 and served nine markets with 10 aircraft during the June
2003 quarter. Song has consistently achieved load factors above
70.0 percent during the quarter. Song is exceeding operational
expectations with a completion factor of 99.9 percent and on-time
performance of 90.8 percent for the June 2003 quarter.
Furthermore, Song flights have consistently been able to achieve a
turn time of less than 50 minutes by using new, more efficient
processes. Due to the success of this initiative, turn time
efficiencies are currently being tested for use on Delta's
mainline flights. By November, Song will be fully implemented,
serving 28 markets with 36 aircraft.

Delta's initiative to enhance airport self-service through the use
of new technology and customer service agent roles was implemented
in 35 of Delta's largest airports during the quarter, providing
enhanced service to more than 60 percent of domestic passengers.
The new airport lobby design is intended to get customers through
the check-in process in less than two minutes. The program will be
rolled out to a total of 81 airports this year, benefiting 90
percent of Delta's customers.

                   Explanation of Unusual Items

June 2003 Quarter

In the June 2003 quarter, Delta recorded an offset to operating
expenses related to government reimbursements of security costs
received under the Emergency Wartime Supplemental Appropriations
Act, a gain on the sale of its equity investment in Worldspan, and
a charge related to derivative and hedging activities accounted
for under Statement of Financial Accounting Standard 133. These
items totaled a net gain of $421 million, net of tax, and are
further described below. The attached Consolidated Statement of
Operations for the June 2003 quarter shows Delta's net income as
reported under Generally Accepted Accounting Principles in the
United States, as well as net loss excluding these items. Delta
believes this information is helpful to investors to evaluate
recurring operational performance because (1) the reimbursements
received under the Appropriations Act and the gain from the sale
of Delta's equity investment in Worldspan are one-time events; and
(2) the SFAS 133 charge reflects volatility in earnings driven by
changes in the market which are beyond the company's control.

Items excluded are:

* A $251 million gain, net of tax, from government reimbursements
   received under the Appropriations Act;

* A $176 million gain, net of tax, from the sale of Delta's equity
   investment in Worldspan; and

* A $6 million charge, net of tax, for fair value adjustments of
   certain equity rights in other companies and fuel derivative
   instruments in accordance with SFAS 133.

June 2002 Quarter

In the June 2002 quarter, Delta recorded charges related to the
temporary carrying costs of surplus pilots and grounded aircraft
and SFAS 133 derivatives. These items totaled $24 million, net of
tax. In addition to net loss as reported under GAAP, Delta also
discloses net loss excluding these items because it believes this
information is helpful to investors to evaluate recurring
operational performance.

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

As reported in Troubled Company Reporter's July 10, 2003 edition,
Standard & Poor's Ratings Services affirmed its ratings on Delta
Air Lines Inc. (BB-/Negative/--) and removed them from
CreditWatch, where they were placed on March 18, 2003. The ratings
were lowered to current levels on March 28. The outlook is
negative.


DOMAN IND.: Asks Canadian Court to Extend CCAA Stay to Sept. 30
---------------------------------------------------------------
Doman Industries Limited announced that on July 21, 2003 it will
apply to the Supreme Court of British Columbia for an order, in
connection with proceedings under the Companies Creditors
Arrangement Act, to extend the stay of proceedings to
September 30, 2003.

The Company is seeking the extension on the basis that it will
require additional time to adequately consider a new proposal the
Company has just received on a confidential basis from the Tricap
Restructuring Fund, believed to be the holder of approximately 18%
of unsecured notes. This is materially different from the proposal
previously received from a group of unsecured noteholders,
including Tricap, and tabled with the Court on November 7, 2002.
Certain elements of the new proposal are more prejudicial to some
stakeholder groups. The Company expects that adequate
consideration of the new proposal will entail the exploration of
alternative refinancing alternatives, which may take up to 2
months. In addition, if the new proposal is ultimately accepted by
the Company, further negotiations with representatives of
unsecured noteholders and others will be required before a
revised plan of arrangement can be presented to the Court. Under
the circumstances, the Company does not expect to be in a position
to file a revised plan of arrangement before September.

Implementation of a revised plan is also dependent on the
implementation of the new forest legislative reform package,
introduced by the Government of British Columbia. The impact of
the legislative changes cannot be fully assessed until the
regulations under the various statutes have been published.
The timing of this is uncertain but the Government has indicated
that some regulations will not be available until September.

Doman is an integrated Canadian forest products company and the
second largest coastal woodland operator in British Columbia.
Principal activities include timber harvesting, reforestation,
sawmilling logs into lumber and wood chips, value-added
remanufacturing and producing dissolving sulphite pulp and NBSK
pulp. All the Company's operations, employees and corporate
facilities are located in the coastal region of British Columbia
and its products are sold in 30 countries worldwide.


DRIVER HARRIS: AMEX Begins Common Stock Delisting Process
---------------------------------------------------------
Driver Harris Company reported that it has received notification
from the American Stock Exchange "AMEX" of its intention to
initiate the removal of the common stock of the Company from
listing and registration on the exchange.  The AMEX states that it
is taking this action due to (i) the Company's failure to regain
compliance with continued listing standards over the past fourteen
months, (ii) the "going concern" opinion received from the
Company's independent auditors for the year ended December 31,
2002 and (iii) the Company's deficiency in paying annual listing
fees.

The Company is presently considering whether to appeal this
decision through a process available to it in accordance with
AMEX rules.


DUANE READE: Will Webcast Q2 2003 Conference Call on Thursday
-------------------------------------------------------------
Duane Reade Inc. (NYSE: DRD) invites investors to listen to a
broadcast of the Company's conference call to discuss second
quarter results.  The call will be broadcast live over the
Internet on Thursday, July 24, 2003 at 10:00 a.m. Eastern Time and
can be accessed by logging on to http://www.duanereade.com.
Anthony Cuti, Chairman, President, and Chief Executive Officer,
and John Henry, Senior Vice President and Chief Financial Officer,
will host the call.

An online archive of the broadcast will be available within one
hour of the completion of the call and will be accessible at
http://www.duanereade.comuntil August 7, 2003.

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.


DVI: 9-7/8% Notes' Trustee Rescinds Notice of Default & Resigns
---------------------------------------------------------------
DVI, Inc. (NYSE:DVI) announced (i) U.S. Bank National Association,
the trustee for DVI's 9-7/8% Senior Notes due 2004, has rescinded
the notice of default previously issued in respect of the Notes
and (ii) U.S. Bank has resigned as trustee under the indenture in
respect of the Notes and has been replaced by HSBC Bank USA.

U.S. Bank informed DVI that it was resigning as trustee because of
a potential future conflict of interest arising out of a separate
lending relationship.

The resignation has no effect on U.S. Bank's role as trustee and
custodian under other financing arrangements for DVI and its
affiliates, including various asset securitizations, which
continues unchanged.

DVI is an independent specialty finance company for healthcare
providers worldwide with $2.8 billion of managed assets. DVI
extends loans and leases to finance the purchase of diagnostic
imaging and other therapeutic medical equipment directly and
through vendor programs throughout the world. DVI also offers
lines of credit for working capital backed by healthcare
receivables in the United States. Additional information is
available at http://www.dvi-inc.com


DVI INC: S&P Keeps Junk Counterparty Rating on Watch Negative
-------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'CCC-'
counterparty credit and senior unsecured debt ratings on Jamison,
Pennsylvania-based DVI Inc. will remain on CreditWatch with
negative implications.

The CreditWatch update follows DVI's announcement that the notice
of default, issued by U.S. Bank National Association (U.S. Bank),
the trustee for DVI's 9 7/8% senior notes due in 2004, has been
rescinded. In addition, according to DVI's announcement, U.S. Bank
has resigned as trustee under the indenture with respect to the
notes and has been replaced by HSBC Bank USA. Standard & Poor's
also recognizes that DVI has made progress in its efforts to
replace its auditor. The company announced that it has named BDO
Seidman LLP its independent auditor to replace its former auditor,
which resigned in June 2003.

"Standard & Poor's remains concerned about DVI's short-term and
long-term liquidity and its ability to refinance its maturing
debt, namely its $155 million senior note maturity due in February
2004," said credit analyst Steven Picarillo.


DVI INC: Hires BDO Seidman as External Auditor & Tax Consultant
---------------------------------------------------------------
DVI, Inc. (NYSE:DVI) announced that the Audit Committee of its
Board of Directors engaged the services of the internationally
recognized firm, BDO Seidman, LLP, to serve as the Company's
independent outside auditor and tax consultant.

BDO Seidman, accountants and consultants whose firm was founded in
1910, offers services through 37 offices and more than 200
alliance firms nationwide. The firm with more than 2,300 employees
is also a member of BDO International, a global network of member
firms in 100 countries based in Brussels, Belgium.

Steven R. Garfinkel, DVI Executive Vice President and Chief
Financial Officer, remarked, "We are pleased to announce our
Board's decision to engage the services of BDO Seidman, LLP as the
Company's independent outside accounting firm. We look forward to
a long-term relationship with the professional staff at BDO
Seidman."

DVI is an independent specialty finance company for healthcare
providers worldwide with $2.8 billion of managed assets. DVI
extends loans and leases to finance the purchase of diagnostic
imaging and other therapeutic medical equipment directly and
through vendor programs throughout the world. DVI also offers
lines of credit for working capital backed by healthcare
receivables in the United States. Additional information is
available at http://www.dvi-inc.com


EARL SCHEIB: Fiscal Fourth Quarter Net Loss Balloons to $746K
-------------------------------------------------------------
Earl Scheib, Inc. (AMEX:ESH) its results for the fourth quarter
and fiscal year ended April 30, 2003.

Net sales for the fourth quarter of fiscal 2003 were $12,120,000,
a decrease of 9.4% from the fourth quarter of fiscal 2002 net
sales of $13,374,000. This decrease resulted primarily from the
Company operating eight fewer retail paint and body shops at
April 30, 2003 (pursuant to its previously-reported restructuring
of the retail paint and body business), as compared to April 30,
2002, and a same-shop (shops still open one year or more) sales
decrease of 4.7% during the fourth quarter of fiscal 2003 from the
fourth quarter of fiscal 2002. The Company believes that the same-
shop sales decrease was primarily as a result of less demand for
its services in the East and Midwest regions of the United States
due to harsh weather conditions. For the year ended April 30,
2003, net sales were $47,235,000, as compared to $52,126,000
during the prior fiscal year, a decrease of 9.4%, with same-shop
sales in the retail paint and body business decreasing by 1.3%.

The operating loss for the fourth quarter of fiscal 2003 was
$627,000, as compared to an operating loss of $884,000 in the
fourth quarter of fiscal 2002. The improved operating results were
primarily attributable to overall reduced costs and an improved
performance at the Company's fleet and truck center operations,
partially offset by a write-down to estimated net realizable value
of $169,000 to the carrying value of the fixed assets of three
shops. In fiscal 2002, the write-down totaled $183,000, also for
three shops.

The operating loss for the fiscal year ended April 30, 2003 and
2002 was $3,451,000 and $2,973,000, respectively. Despite an
overall reduction in operating costs, insurance, legal and
professional expenses for the fiscal year ended April 30, 2003
increased by a combined $453,000 from the fiscal year ended April
30, 2002.

During fiscal 2003, the Company sold four parcels of real estate
and disposed of other fixed assets for a pretax gain of
$1,479,000. During fiscal 2002, the Company sold 15 parcels of
real estate (including its corporate office building) and disposed
of other fixed assets for a pretax gain of $4,088,000.

During fiscal 2003, the Company recorded interest income of
$164,000 on refunds of federal income taxes paid for fiscal years
1999 and 1998. In addition, the Company recorded a benefit of
$425,000 for the excess of previously accrued interest expense
over that required at February 24, 2003 by the Internal Revenue
Service. As disclosed in previously filed annual and quarterly
reports, the accrued interest relates to a protest regarding the
disallowance by the IRS of a net operating loss carryback refund
received during fiscal 1997.

The net loss for the fourth quarter of fiscal 2003 was $746,000,
as compared to a net loss of $284,000 during the fourth quarter of
fiscal 2002. For the fiscal year ended April 30, 2003, the net
loss was $1,929,000 as compared to net income of $450,000 for the
fiscal year ended April 30, 2002. The Company did not recognize
any Federal or state income tax benefit for the pretax loss in
fiscal year 2003. Additionally, due to income allocation and state
income tax laws, only part of the Company's state income taxes in
fiscal 2003 were offset by the operating losses.

Chris Bement, Chief Executive Officer and President, stated that,
"Since the adoption of the retail paint and body restructuring
plan in the fourth quarter of fiscal year 2001, we have closed a
net 35 shops. However, despite the success of the closings,
increased insurance costs in primarily workers compensation and
group medical and the costs of the regulatory requirements of a
publicly-traded entity in relation to our size have impaired our
progress. Though we will continue implementing the restructuring
plan and strive to attain viability in our commercial coatings and
fleet and truck center operations, we also recognized that to
serve the best interests of our shareholders we must look at all
strategic alternatives.

"Our announcement in May of the hiring of Ryan Beck & Co.,
investment bankers specializing in middle market companies, to
explore the Company's strategic alternatives, demonstrates our
commitment to exploring all means to realize the true enterprise
value of the Company for our shareholders."

Earl Scheib, Inc., founded in 1937, is a nationwide operator of
122 auto paint and body shops located in more than 100 cities
throughout the United States.


EASTERN PULP: Files Plan of Reorganization in Portland, Maine
-------------------------------------------------------------
Eastern Pulp & Paper Corporation filed a Plan of Reorganization
with the U.S. Bankruptcy Court in Portland, Maine, and said it
would obtain new long-term financing to support its operations as
well as its financial obligations under the plan.

The reorganization plan is expected to be approved in the fourth
quarter of 2003 by the Hon. James B. Haines, Jr., the federal
bankruptcy judge overseeing the case. The new funds are expected
this Fall and will add to the existing financing arrangements
approved by the court last week.

The financial plan calls for fair and equitable treatment of all
creditors of Eastern Pulp & Paper and its wholly owned
subsidiaries, Eastern Fine Paper, Inc., and Lincoln Pulp & Paper
Co., Inc. The plan outlines the payoff of all bona fide debts to
secured lenders and creditors and a 10% payment to the holders of
unsecured obligations. Eastern said it is committed to continuing
its business relationships with these firms.

The plan further calls for the conversion to equity of $4.4
million in subordinated debt now held by shareholders of Eastern
Pulp & Paper.

"All of the developments announced today are major steps forward
for customers, employees, suppliers, the State of Maine and the
towns we operate in," said Eastern CEO and Chairman Joseph H.
Torras, Sr.

"They are the most important events to date toward emerging from
Chapter 11 protection," he added. "We are confident in our
business plan and are sharply focused on bringing cost-effective,
highly differentiated products to our customers across North
America."

Eastern Paper has continued operations since filing for Chapter 11
creditor protection in September of 2000. To reduce costs and
improve long-term financial health, it has reduced its workforce
by about 25% and idled a portion of its papermaking capacity at
its Brewer, Maine, manufacturing center. Wages also have been
reduced for all executive, administrative and unionized employees.

The company's two Maine manufacturing facilities in Lincoln and
Brewer produce pulp, fine printing and writing papers, specialty
tissue and coated technical papers for consumer and industrial
uses. Eastern employs more than 700 people in Maine and at its
Amherst, Mass. headquarters.

As for the view ahead, Torras said the company's $100 million
investment over the past decade puts it in compliance with U.S.
Environmental Protection Agency regulations--and makes it one of
the most environmentally sound pulp mills in North America.

The U.S. Government has certified Eastern's unique pulpmaking
process, which uses fine waste sawdust in lieu of virgin softwood,
as meeting EPA standards for 30% post-consumer waste. The company
has U.S. patents and patents pending on its digital printing
papers, its specialty tissue and on its high-pressure, two-stage
oxygen bleaching process.

Torras said his company is continuing its aggressive R&D programs
in pulpmaking and for printing papers used in new-generation
digital printing presses.

Eastern Pulp & Paper is one of the largest privately held, fully
integrated pulp and paper manufacturers in North America.


ELITE PHARMA: Battling with Ex-CEO & Patent Rights In Limbo
-----------------------------------------------------------
Elite Pharmaceuticals, Inc., states that to date the Company has
not been profitable, and since inception in 1990, it has not
generated any significant revenues. The Company indicates that it
may never be profitable or, if it becomes profitable, it may be
unable to sustain profitability. The Company has sustained losses
in each year since its incorporation in 1990. Net losses of
$4,061,422, $1,774,527 and $13,964,981 for the years ended
March 31, 2003, 2002 and 2001, respectively, have been incurred.
Further, the Company expects to realize significant losses in the
next year of operation. Elite expects to continue to incur losses
until it is able to generate sufficient revenues to support its
operations and offset operating costs.

On June 3, 2003, Dr. Atul M. Mehta, Elite's founder and former
President and Chief Executive Officer resigned from all of his
positions with Elite. In the past, the Company has been reliant on
Dr. Mehta's scientific expertise in developing its products. There
can be no assurance that the Company will successfully replace Dr.
Mehta's expertise. In addition, the loss of Dr. Mehta's services
may adversely affect Company relationships with its contract
partners.

On July 3, 2003, Dr. Mehta instituted litigation against Elite and
one of its directors, John Moore, in the Superior Court of New
Jersey, for, among other things, allegedly breaching his
employment agreement and for defamation, and claims that he is
entitled to receive his salary through June 6, 2006.  His salary
for that period would be approximately $1,000,000.

Elite believes Dr. Mehta's claims are without merit and intends to
vigorously contest this action. Prior to Dr. Mehta's resignation,
a majority of the Board of Directors had notified Dr. Mehta that
it believed that sufficient grounds existed for the termination of
his employment for "Severe cause" pursuant to his employment
agreement. If Elite is ordered to pay Dr. Mehta, it would have a
material adverse effect on the Company's financial condition and
results of operations.

In addition, all of Elite's patent applications were made in the
name of the inventor, former President and Chief Executive
Officer, Dr. Mehta. The patents that were granted were assigned by
Dr. Mehta to Elite. However, Dr. Mehta has not similarly executed
assignments to Elite of the pending patent applications. Nor has
Dr. Mehta executed an agreement to assign inventions made while he
was working for the Company, including the Company's oxycodone
once a day product, for which patent applications have not yet
been filed. Elite states it has requested that Dr. Mehta deliver
those assignments to it, and intends to consider all available
legal alternatives in obtaining those assignments if Dr. Mehta
refuses to provide them voluntarily. In addition, Dr. Mehta's
employment agreement contains a provision to the effect that if he
terminates his employment because of, among other reasons,
substantial interference with the discharge of his
responsibilities or Elite's purported change of his duties and
responsibilities without Dr. Mehta's consent, he would have non-
exclusive inventorship rights and copyrights in all inventions,
including compounds, formulations, processes and work product,
that were developed by Elite in the 12 months prior to the
termination of employment, through Dr. Mehta's efforts. Dr. Mehta
claims that he terminated his employment with Elite because of
substantial interference with the discharge of his
responsibilities and Elite's purported change of his duties and
responsibilities without Dr. Mehta's consent.

Elite maintains that Dr. Mehta does not own any of the
intellectual property. The Company also intends to oppose
vigorously any efforts by Dr. Mehta to enforce the provision in
his employment agreement that provides for non-exclusive
inventorship rights to Dr. Mehta. In the event that it is forced
to take legal action against Dr. Mehta to have the patent
applications and other intellectual property formally assigned to
it, there is no assurance that Elite will be successful in such
action. If not successful in its claims regarding Dr. Mehta and
the intellectual property, it would have a material adverse effect
on Elite's business and results of operations.


EL PASO ELECTRIC: Mexican CFE Curtails Non-Firm Power Purchases
---------------------------------------------------------------
El Paso Electric Company (NYSE: EE) announces that the Comision
Federal de Electricidad, the national electric utility of Mexico,
suspended its agreement to purchase non-firm power from EPE due to
reduced load requirements in Mexico as a result of mild weather
conditions and system problems in Mexico.

"We value our long-term relationship with the CFE," said Gary
Hedrick, President and CEO of EPE.  "We look forward to helping
CFE meet its future energy requirements should the opportunity
arise.  The curtailment of sales to the CFE will enable us to
pursue other opportunities in the economy market."

El Paso Electric is a regional electric utility providing
generation, transmission and distribution service to approximately
320,000 retail customers in a 10,000 square mile area of the Rio
Grande valley in west Texas and southern New Mexico, including
wholesale customers in New Mexico, Texas and Mexico.  EPE has a
net installed generating capacity of approximately 1,500 MW. EPE's
common stock trades on the New York Stock Exchange under the
symbol EE.

As reported in Troubled Company Reporter's April 28, 2003 edition,
Fitch Ratings withdrew the ratings of El Paso Electric Company. At
the time of withdrawal, the ratings were as listed below, and the
Rating Outlook was Stable.

          -- First mortgage bonds 'BBB-';

          -- Unsecured pollution control revenue bonds 'BB+'.


ENCOMPASS SERVICES: Resolves State of Texas' Plan Objection
-----------------------------------------------------------
The Comptroller of Public Accounts for the State of Texas
objected to the confirmation of Encompass Services Corporation and
its debtor-affiliates' Second Amended Reorganization Plan.  To
resolve the objection, both parties agreed to a stipulation, under
which:

     (a) The Reorganization Plan's terms and provisions will not
         be construed to:

         -- release, exculpate, or enjoin any of the Comptroller's
            claims or causes of action against any non-debtor third
            party; or

         -- expand the jurisdiction of the Bankruptcy Court over
            the Comptroller beyond the jurisdiction allowed by
            federal law and the U.S. Constitution;

     (b) On the Effective Date, interest will begin to accrue on
         all of the Comptroller's claims against the Debtors;

     (c) The Debtors, at a minimum, will pay the Comptroller the
         full amount of its claims within two years from the
         Effective Date or may pay the claims sooner or in full if
         they so elect;

     (d) If paid over two years, the payment will be made in at
         least two equal annual installments and will include
         accrued interest; and

     (e) Except as provided, the terms of the Confirmation Order
         and the Reorganization Plan will control. (Encompass
         Bankruptcy News, Issue No. 16; Bankruptcy Creditors'
         Service, Inc., 609/392-0900)


ENRON: Judge Gonzales Okays Wind Debtors' CEC Settlement Pact
-------------------------------------------------------------
Enron Wind Systems, LLC, Enron Wind LLC and ZWHC LLC ask Judge
Gonzalez, pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure, to approve the execution, delivery and performance of a
Settlement Agreement dated as of May 6, 2003 by and among the
California Energy Commission, on one hand, and the Wind Debtors,
ESI VG Limited Partnership, Victory Garden LLC, ESI Sky River
Limited Partnership, Sky River LLC, Cabazon Power Partners LLC,
Zond Windsystem Partners, Ltd. Series 85-A, Zond Windsystem
Partners, Ltd. Series 85-B, Sky River Partnership, Victory Garden
Phase IV Partnership and Painted Hills Wind Developers, on the
other hand.

To recall, on March 6, 2003, the Court approved the Wind Debtors'
entry into the Master Definitive Agreement -- the Edison
Settlement -- wherein the Wind Debtors settled their disputes
with FPL Energy entities and Southern California Edison Company.
However, Martin A. Sosland, Esq., at Weil, Gotshal & Manges LLP,
in New York, notes that the Edison Settlement requires the
additional approvals of the Federal Energy Regulatory Commission
and the California Public Utility Commission before it can be
effective.

Furthermore, on February 27, 2003, the Wind Debtors obtained the
Court's approval to perform on the Wind Trust Agreement.  The
Wind Trust Agreement allows the Wind Systems Trust to own 100% of
ZWHC.  The Trusts were established to liquidate the Trust Assets
and utilize the proceeds of the liquidation to discharge the Wind
Debtors' legal obligations in their non-electric utility
creditors.

Mr. Sosland informs the Court that the Edison Settlement,
together with a Consent Agreement among the FERC Trial Staff, the
Wind Debtors and certain FPL Energy LLC affiliates, was filed
with the FERC on January 31, 2003.  However, the CEC intervened
in the proceeding, asserting a claim against Enron Wind and
certain of the Wind Debtors' owned and managed wind power
projects.  CEC asserts claims for the refund of incentive payments
it made under their Existing Renewable Facilities Program -- a
program where renewable energy facilities may receive payments
from the CEC if they meet certain criteria.  As part of its
intervention, the CEC originally sought $3,550,000 from the Enron
Wind Parties, which represent the total amount the CEC paid to
Enron-affiliated projects from 1998 to 2002 under 19 power
purchase agreements.

The FERC administrative law judge assigned to the proceeding is
currently reviewing the Edison Settlement and the Consent
Agreement but has indicated that the claims CEC asserted should
be resolved before he will certify the Edison Settlement and the
Consent Agreement to FERC.  In addition, it is much more likely
that the Edison Agreement and the Consent Agreement will be
accepted by FERC as a resolution of the FERC proceeding if the
settlement package is uncontested.

Accordingly, on May 6, 2003, the Enron Wind Parties and the CEC
entered into a Settlement Agreement, which contains these terms:

     (a) CEC will release its $3,550,000 claim against the Enron
         Wind Parties;

     (b) CEC will support, or not object to, the Edison Settlement
         or the Consent Agreement at FERC;

     (c) CEC agrees not to intervene in any current or future
         proceedings at FERC, the CPUC, the Securities and
         Exchange Commission, or in any other judicial or
         regulatory proceeding that relates to or arises from the
         QF status of the Project Companies' energy producing
         wind facilities during the Settlement Period;

     (d) CEC will release the Enron Wind Parties from any further
         claims relating to the QF status of the Project Companies
         during the 1998-2002 time period;

     (e) CEC will release the Enron Wind Parties from any claims
         under the California False Claims Act; and

     (f) CEC will receive $633,78, payable as:

           (i) an offset against the payments it owed to ZWHC
               for $72,592;

          (ii) a payment of $44,600 by Victory Garden Phase IV
               Partnership; and

         (iii) the issuance by ZWHC of a promissory note to the
               CEC for an amount equal to $516,596 -- the ZWHC
               Note.

         The ZWHC Note will amortize in equal payments on a
         quarterly basis for a term of two years -- eight
         quarterly payments of $67,366, bearing interest at a
         rate of 3.80%.

According to Mr. Sosland, the Settlement Agreement should be
approved because:

     (a) it will resolve all issues related to the CEC without
         any further litigation;

     (b) it enables the Wind Debtors to eliminate or avoid
         associated risks, potential litigation and any damages
         the CEC may claim in connection with the QF status of
         the projects; and

     (c) it facilitates the Edison Settlement.

                            *     *     *

After due consideration, Judge Gonzalez grants the Wind Debtors'
request in all respects. (Enron Bankruptcy News, Issue No. 73;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


ENRON: Cabazon Power's Case Summary & Largest Unsec. Creditor
-------------------------------------------------------------
Debtor: Cabazon Power Partners LLC
         1400 Smith Street
         Houston, Texas 77002

Bankruptcy Case No.: 03-14539

Type of Business: The Debtor is an affiliate of Enron Corp.

Chapter 11 Petition Date: July 17, 2003

Court: Southern District of New York (Manhattan)

Judge: Arthur J. Gonzalez

Debtor's Counsel: Brian S. Rosen, Esq.
                   Weil, Gotshal & Manges LLP
                   767 Fifth Avenue
                   New York, NY 10153
                   Tel: 212-310-8602
                   Fax : 212-310-8007

Estimated Assets: $50 Million to $100 Million

Estimated Debts: $10 Million to $50 Million

Debtor's Largest Unsecured Creditor:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Southern California Edison  Electricity Expense        $43,326


ENRON: Cabazon Holdings' Voluntary Chapter 11 Case Summary
----------------------------------------------------------
Debtor: Cabazon Holdings LLC
         1400 Smith Street
         Houston, Texas

Bankruptcy Case No.: 03-14540

Type of Business: The Debtor is an affiliate of Enron Corp.

Chapter 11 Petition Date: July 17, 2003

Court: Southern District of New York (Manhattan)

Judge: Arthur J. Gonzalez

Debtor's Counsel: Brian S. Rosen, Esq.
                   Weil, Gotshal & Manges LLP
                   767 Fifth Avenue
                   New York, NY 10153
                   Tel: 212-310-8602
                   Fax : 212-310-8007

Estimated Assets: $10 Million to $50 Million

Estimated Debts: $0 to $50,000


EZENIA! INC: $2.9 Million Stock Repurchase Obligation Cancelled
---------------------------------------------------------------
Ezenia! Inc. (Nasdaq: EZEN), a leading provider of real-time
collaboration solutions for corporate and government networks and
eBusiness, announced that, in connection with an amendment to a
software development agreement, General Dynamics (NYSE: GD) has
agreed to terminate a put agreement it had with Ezenia! Inc. The
put agreement had required Ezenia! to repurchase 290,000 shares of
its own common stock, originally issued to General Dynamics in
connection with the InfoWorkSpace acquisition, at a price of $10
per share during a 30-day window beginning on March 31, 2004, and
expiring April 30, 2004.

"We are pleased that the stock repurchase obligation has been
cancelled," said Khoa Nguyen, Ezenia! chairman & CEO. "This comes
at a time when we believe we are beginning to realize some of the
opportunities available for InfoWorkSpace. For example the Joint
Interoperability Test Command and the Defense Information System
Agency have announced that InfoWorkSpace Version 2.5.1.2 has
completed and successfully passed all of their criteria for
interoperability with the Defense Collaborative Tool Suite. As we
have indicated before, the road ahead remains very challenging for
Ezenia!, both operationally and with respect to our liquidity and
capital resources. We believe the cancellation of this liability
is a significant step in our progress toward successfully meeting
these challenges."

Under Generally Accepted Accounting Principles, common stock that
was previously subject to the put option had been reported as
"temporary equity" on Ezenia!'s consolidated balance sheets.
Accordingly, the $2.9 million value related to these shares was
not included in calculating total stockholders equity (deficit)
for Ezenia!, although for purposes of computing diluted earnings
per share, such shares were included in the calculation using the
reverse treasury stock method, when dilutive. Since the repurchase
obligation has been cancelled, the $2.9 million will now be
reported as a part of stockholders equity.

Ezenia! Inc. (Nasdaq: EZEN), founded in 1991, is a leading
provider of real-time collaboration solutions, bringing new and
valuable levels of interaction and collaboration to corporate
networks and the Internet. By integrating voice, video and data
collaboration, the Company's award-winning products enable groups
to interact through a natural meeting experience regardless of
geographic distance. Ezenia! products allow dispersed groups to
work together in real-time using powerful capabilities such as
instant messaging, whiteboarding, screen sharing and text chat.
The ability to discuss projects, share information and modify
documents allows users to significantly improve team communication
and accelerate the decision-making process. More information about
Ezenia! Inc. and its product offerings can be found at the
Company's Web site at http://www.ezenia.com

At December 31, 2003, the Company's balance sheet shows a total
shareholders' equity deficit of about $1.5 million.


FAIRCHILD SEMICON: Second Quarter Net Loss Widens to $64 Million
----------------------------------------------------------------
Fairchild Semiconductor (NYSE: FCS), the leading global supplier
of high performance products that optimize power in multiple end
markets, reported results for the second quarter ended June 29,
2003. Second quarter sales were $347.1 million, down slightly from
the previous quarter and down 3.7% from second quarter 2002.

Fairchild reported a net loss in the quarter of $63.8 million,
compared to a net loss of $13.0 million reported in the second
quarter of 2002. Included in the second quarter 2003 results are
pretax charges for restructuring, impairments and debt refinancing
totaling $77.0 million.

On a pro forma basis, which excludes amortization of acquisition-
related intangibles, restructuring and impairments and other
items, Fairchild reported second quarter net income of $3.8
million, compared to pro forma net income of $7.5 million in the
second quarter of 2002.

"We're executing significant restructuring and debt refinancing
initiatives to lower our costs from the second quarter baseline,"
said Kirk Pond, president, CEO and chairman of the Board. "We
expect these steps to generate pretax savings of roughly $53 - 58
million annually. We expect to realize the impact of these savings
starting in the third and fourth quarters of 2003 with the full
benefit realized in the first half of 2004.

"In the second quarter, we adapted well and executed effectively
to meet our sales goals despite the SARS impact on demand in Asia
and especially in China, our fastest growing market, as well as
continued pricing pressure," commented Pond. "This demand slowdown
was widely discussed by many electronics manufacturers and
addressed in our mid-quarter guidance. There is still some excess
inventory in the Asian distribution channel and we expect this
will have some impact on the third quarter 2003. We're encouraged
by stronger bookings activity in early July and we currently
believe the SARS impact on demand to be a short term issue."

Underscoring continued momentum for Fairchild's strategic focus on
power markets, Pond continued. "The power market we address has
grown more than four times the rate of the overall semiconductor
industry during the last five years, and is forecasted by World
Semiconductor Trade Statistics to continue to significantly
outpace the market. During these five years Fairchild has expanded
its power business over fifteen fold, from less than 10% to 70% of
our total revenues. Notably, we're now the top supplier of power
discrete worldwide and have climbed to the number two market share
position in power analog according to the latest Gartner data for
2002. In order to focus even more effectively on this fast-growing
segment of our business, we're restructuring operations and
reducing our costs and investment in non-core businesses. This
will free additional resources, improve our overall cost
structure, reduce our capital spending needs, and demonstrate our
commitment to strengthening our position as the market leader in
the power semiconductor business."

           Restructuring Plans to Reinforce Power Leadership

Fairchild also announced a restructuring primarily focused on
consolidating manufacturing and reducing costs in non-core, non-
power businesses. These restructuring activities involve primarily
the closure or sale of the Kuala Lumpur, Malaysia, Wuxi, China and
Loveland, Colorado manufacturing sites; exit from the Non-Volatile
Memory and Hybrid businesses; consolidation of fab lines and phase
out of the 4" fab in South Portland, Maine; and additional
workforce reductions in non-core businesses. The total cost of
these actions, including the remaining charges for the previously
announced closure of the Mountaintop, Pennsylvania 6" fab, is
expected to be approximately $70 million, of which $53.6 million
is included in the second quarter results. The remaining charges
are expected to be taken over the next few quarters.

"We're restructuring the business to tighten our focus on the
power markets," explained Hans Wildenberg, executive vice
president and chief operating officer. "These actions allow us to
consolidate our presence in Malaysia, optimize our optoelectronics
business, significantly reduce costs and increase our emphasis on
our core power business. These manufacturing consolidations show
that we are transitioning the company to be a power analog and
power discrete business with a decreasing presence in non-core
markets.

"In addition to the restructuring activities, our new Suzhou,
China assembly and test facility began shipping production this
month which we expect to also improve our cost structure beginning
later this year," stated Wildenberg. "After initial ramp up costs
in third quarter, we expect to see more significant savings
starting in the fourth quarter 2003 and continuing through 2004
and beyond. Also, the closure of the Mountaintop, Pennsylvania 6"
fab is running ahead of schedule and will now be completed by mid-
fourth quarter this year."

                     End Markets and Design Wins

"In our major market segments, orders from automotive, game
consoles and portable power adapters were particularly strong,"
said Wildenberg. "Bookings from computing including notebooks,
desktops, and storage as well as televisions were down
sequentially. In our distribution channels, currently accounting
for approximately 65% of our total sales, inventories increased to
about 15 weeks, driven almost exclusively by a two week increase
in our Asian channel.

"We also continue to win key designs at major customers in our
focus power applications," stated Wildenberg. "Our power solutions
for the VRM10 specification desktop and server designs are winning
new business opportunities at a major PC manufacturer. This new
power supply controller combined with our industry leading drivers
and MOSFETs comprise a complete power management solution capable
of handling the most demanding microprocessor power requirements.
We continue to win new business with our IGBT products in ignition
control and induction heating applications. Our IGBT business is
up 20% from last quarter on the strength of design wins at several
major customers such as Visteon, Siemens and Bosch. We also won
new designs at a number of major consumer electronics customers
with our analog power switch products which integrate MOSFET and
analog power controllers into a single solution. Fairchild is
generating many exciting new products and now offers more complete
power solutions to customers than ever before."

           Second Quarter Financials and Debt Refinancing

"In the second quarter we maintained our focus on cost control,
cash generation and balance sheet management," said Matt Towse,
Fairchild's senior vice president and chief financial officer. "We
again generated positive operating cash flow, cut operating
expenses by 3%, and used the proceeds from our new credit facility
to refinance existing debt which we expect will save us more than
$18 million annually in interest expense. We remain committed to
our long-term strategy of de-levering our balance sheet. This
refinancing represents another significant step forward."

Also included in the second quarter results are charges of $23.4
million associated with the previously announced write-off of the
financing charges for the previous credit facility, the call
premium for redeeming the company's 10-3/8% senior subordinated
notes, and other related costs.

                     Third Quarter Guidance

"Historically, the third quarter is seasonally down and we expect
similar softness this year with revenues to be 4 - 6% lower than
the second quarter," said Towse. "Our entering backlog for the
third quarter was down more than 10% from a quarter ago and at
slightly lower margins, due mostly to cancellations and slower
order rates as the SARS-related inventory build is being worked
off. Overall, we expect the cost cuts associated with our
restructuring plans will help keep operating margins in the range
of flat to down 100 basis points in the third quarter. Net
interest expense should drop to about $16 million in the third
quarter. We believe a tighter focus on our core power business
will enable us to lower our capital budget to 8 - 10% of revenue
going forward.

"Beyond the third quarter, we expect to grow at or above the power
market growth rate driven by the strength of our new products and
a leaner, even more focused organization," said Towse. "Combining
our savings from refinancing with our restructuring cost
reductions we expect to generate pretax savings of $53 - 58
million in 2004. We plan to build on our success in the power
market and continue to strengthen our balance sheet."

Fairchild Semiconductor (NYSE: FCS) is a leading global supplier
of high performance products for multiple end markets. With a
focus on developing leading edge power and interface solutions to
enable the electronics of today and tomorrow, Fairchild's
components are used in computing, communications, consumer,
industrial and automotive applications. Fairchild's 10,000
employees design, manufacture and market power, analog & mixed
signal, interface, logic, and optoelectronics products from its
headquarters in South Portland, Maine, USA and numerous locations
around the world. Visit http://www.fairchildsemi.comfor more
information on the Company.

As reported in Troubled Company Reporter's June 4, 2003 Edition,
Standard & Poor's assigned its 'BB-' rating to Fairchild
Semiconductor International Inc.'s new senior secured bank loan.
The 'BB-' corporate credit and 'B' subordinated note ratings were
also affirmed. Proceeds from the new $300 million term loan will
be used to call the company's $300 million 10 3/8% subordinated
notes. The new $175 million revolving credit facility, undrawn at
closing, replaces an undrawn $300 million facility and provides
financial flexibility beyond the company's cash balances.

It had debt of $915 million at March 31, 2003, including
capitalized operating leases.


FAIRFAX FINANCIAL: Will Host Quarterly Conference Call on Aug. 1
----------------------------------------------------------------
Fairfax Financial Holdings Limited will hold its quarterly
conference call at 8:30 a.m. Eastern Time on Friday, August 1,
2003 to discuss its second quarter results which will be announced
after the close of markets on Thursday, July 31. The call,
consisting of a presentation by the company followed by a question
period, may be accessed at (416) 695-6120 or (877) 461-2814.
A replay of the call will be available from shortly after the
termination of the call until 10:00 p.m. Eastern Time on Friday,
August 15, 2003. The replay may be accessed at (416) 252-1143 or
(866) 518-1010.

Fairfax Financial Holdings Limited is a financial services holding
company which, through its subsidiaries, is engaged in property,
casualty and life insurance and reinsurance, investment management
and insurance claims management.

As reported in Troubled Company Reporter's April 1, 2003 edition,
Fitch Ratings downgraded the ratings of Fairfax Financial Holdings
Ltd. and most of its insurance company subsidiaries and affiliates
and removed the ratings from Rating Watch Negative. Included was a
downgrade of Fairfax's senior debt and long-term issuer ratings to
'B+' from 'BB'. The Rating Outlook is Negative.

These actions reflect Fitch's view that Fairfax has become
increasingly challenged over the past few years in its ability to
meet its considerable holding company debt obligations, and that
the margin of safety, at least in the near-to-intermediate term,
is inconsistent with the prior ratings level.


GENERAL BINDING: Taking Initiatives to Improve Cost Structure
-------------------------------------------------------------
General Binding Corporation (Nasdaq:GBND) announced several
measures to improve its cost structure and reduce its expenses.
These initiatives are expected to generate over $2 million of
profitability improvement in 2003 and more than $10 million of
annualized improvement by mid-year 2004.

GBC, as part of its ongoing Operational Excellence Program, has
begun relocating certain labor-intensive office products
manufacturing operations from its Booneville, MS facility to its
Nuevo Laredo, Mexico facility and outsourcing several other
product lines. As a result, the Booneville workforce will be
reduced by approximately 250 employees from a total of about 660
over the next 12 months.

In addition, a workforce reduction program has recently been
completed in other GBC locations, bringing the total number of
employees affected company-wide to approximately 365, or about 9%
of GBC's total employees.

The Company expects to take charges totaling approximately $9.5
million related to these cost reduction programs, about $8.4
million of which will be recognized in the second quarter of 2003.
The cash portion of the charges is estimated at about $4 million,
principally related to severance expenses. The remaining charges
will be non-cash and are mainly related to asset impairments at
the Booneville facility.

"While the weak economy continues to challenge certain areas of
our business, the steps we are announcing today will position us
well to generate higher earnings as the economy improves," said
Dennis Martin, Chairman, President and CEO. "These initiatives,
coupled with the significant interest savings from the successful
refinancing of our primary credit facility in June, should save us
approximately $14 million on an annualized basis. Collectively,
they represent our ongoing commitment to improving our
profitability and shareholder value."

GBC noted that these projections are preliminary and are based on
currently-available information. The Company will provide
additional details of today's announcements when it releases its
final 2nd quarter 2003 financial results on July 22, 2003. GBC
will also conduct a live webcast of its conference call to discuss
the 2nd quarter results at 10:00 am CST on July 23, 2003, which
can be accessed from a link on GBC's Web site at
http://www.gbc.com

GBC is a world leader in products that bind, laminate, and display
information enabling people to accomplish more at work, school and
home. GBC's products are marketed in over 100 countries under the
GBC, Quartet, and Ibico brands, and they help people enhance
printed materials and organize and communicate ideas.

As reported in Troubled Company Reporter's July 2, 2003 edition,
Standard & Poor's Ratings Services assigned its senior secured
'B+' rating to office supplies manufacturer General Binding
Corp.'s $197.5 million bank facility. At the same time, Standard &
Poor's affirmed its 'B+' corporate credit and 'B-' subordinated
debt ratings on the company.

Total debt outstanding at March 31, 2003, was $336.1 million.

The outlook on the Northbrook, Illinois-based General Binding is
stable.


GEORGIA-PACIFIC: Second Quarter Results Show Marked Improvement
---------------------------------------------------------------
Georgia-Pacific Corp., (NYSE: GP) reported second quarter 2003 net
income of $62 million compared with a net loss of $83 million in
the second quarter of 2002.  Last year's second quarter included a
$235 million pretax loss ($187 million after-tax loss) for the
impairment of assets in its former Unisource paper distribution
business, severance and business separation costs.

Georgia-Pacific's net sales during the second quarter 2003 were $5
billion compared with $6.2 billion in the second quarter 2002,
which included $1.4 billion from the Unisource paper distribution
business, 60 percent of which was divested in the fourth quarter
2002.  Georgia-Pacific accounts for its 40 percent investment in
Unisource using the equity method.

The company reduced its debt by nearly $500 million during the
second quarter 2003 to $11.4 billion at the quarter's end.

For the first six months of 2003, income before accounting change
was $6 million, compared with a loss before accounting change of
$22 million for the same period a year ago.  Net sales for the
first six months of 2003 were $9.6 billion compared with $12
billion in 2002, which included $2.8 billion from the Unisource
business.

In the first quarter of 2003, Georgia-Pacific adopted Statement of
Financial Accounting Standards No. 143, "Accounting for Asset
Retirement Obligations," resulting in an after-tax cumulative
benefit of $28 million for the first six months of 2003.
Effective in the first quarter of 2002, Georgia-Pacific adopted
Statement of Financial Accounting Standards No. 142, "Goodwill and
Other Intangible Assets," and recorded an after-tax cumulative
effect charge of $545 million for the first six months of 2002.

The company's North America consumer products segment recorded a
second quarter 2003 operating profit of $147 million, which
included $11 million in severance and business exit costs related
to the closure of a tissue machine and converting equipment at the
company's Old Town, Maine, facility versus $241 million in 2002,
which included $9 million mainly in severance and business exit
costs.  The North America consumer products segment includes the
retail and away-from-home tissue businesses as well as the Dixie
disposable tableware business in North America.

Georgia-Pacific's international consumer products segment recorded
a second quarter 2003 operating profit of $39 million compared
with $37 million during the same quarter a year ago.

The company's packaging segment recorded an operating profit of
$100 million, including an $18 million gain on the sale of certain
packaging assets during the second quarter of 2003.  This compares
with an operating profit of $94 million in the second quarter
2002.

The bleached pulp and paper segment, which is comprised of the
company's pulp, bleached board and communication papers businesses
as well as its minority ownership in Unisource, recorded an
operating profit of $13 million that included a $5 million loss
from Unisource.  This segment recorded $5 million in operating
profit for the second quarter 2002.

Georgia-Pacific's building products manufacturing segment, which
includes the company's structural panels, gypsum, lumber,
industrial wood products and chemical manufacturing businesses,
recorded second quarter 2003 operating profit of $39 million
versus $76 million for the second quarter 2002.

The company's building products distribution segment reported an
operating profit of $21 million in second quarter 2003 compared
with operating profit of $16 million in the same quarter a year
ago.

"The fundamentals in almost all of our businesses were weaker than
a year ago, impacting performance in every segment," said A.D.
"Pete" Correll, Georgia-Pacific chairman and chief executive
officer.  "In addition, typical seasonal improvements in building
products demand were much slower developing than originally
anticipated and did not begin having an effect until late in the
quarter.

"A strongly competitive environment persists in our North America
consumer products business and higher waste paper, energy and
fiber costs continued to impact results.  Overall, tissue prices
fell about 3 percent and shipments remained flat versus a year
ago.  Our Dixie business showed seasonal improvement from the
first quarter, and prices and shipments remained flat when
compared with the same quarter last year.

"Our international consumer products segment faced the same trends
with higher costs and lower prices in its local currencies.
However, shipments were up about 3 percent and the segment results
benefited from a weakened U.S. dollar.

"In the packaging business, average prices for corrugated
packaging were flat but shipments fell about 2 percent from the
same quarter a year earlier. Year-to-date, our packaging shipments
were up 1.6 percent, while the industry was down 1 percent.

"In the bleached pulp and paper segment, average paper prices were
flat and shipments were down about 4 percent from the same quarter
last year.  The segment benefited from improved pulp prices.
However, with the industry's growing inventories and reduced
demand from Asia, pulp prices are trending downward.

"In the building products manufacturing segment, the structural
panels business led the way as oriented strand board prices
increased significantly from a year ago and plywood prices also
strengthened each of the last six weeks of the quarter.  In
addition, we have launched a national marketing campaign aimed at
builders and dealers to reposition plywood as superior to
competing panel products.

"Our building products distribution segment improved from a year
ago due to inventory reductions and improvements in structural
panels prices," Correll said.

"As we noted in the first quarter of this year, we are emphasizing
cost control across our company and are slightly ahead of plan
with our previously announced overhead reduction goals.  We also
have established additional cost reduction goals for 2004 such as
a substantial reduction in our information technology budget.  In
addition, other groups are taking every measure possible to reduce
costs.

"This quarter we successfully executed a $500 million senior notes
offering and used the proceeds to pay down our revolving credit
facility. This financing significantly reduced our reliance on
bank financing, and moved maturities into years in which we
currently have low maturities.

"Our asbestos liabilities and defense costs through the second
quarter remained in line with our projections for the first six
months of this year. As expected, the number of new claims filed
against us in the first half of 2003 was higher than projected due
to the large number of claims in Mississippi filed by plaintiffs'
lawyers seeking to ensure their claims would be governed by law in
effect prior to passage of tort reform in that state effective at
the end of last year.  However, resolution of these cases is not
expected to materially affect settlement costs this year or in
future years. There were no developments in the second quarter
that altered our view of our current and projected asbestos
liabilities.  We are actively supporting the enactment of national
legislation that would provide fair compensation to everyone
affected by asbestos while eliminating excessive legal costs and
providing certainty about this issue to investors and employees.

"Looking ahead, we expect to see continuing improvement in several
of our businesses, including the North America consumer products
and building products segments.  Dynamics for a broader economic
recovery seem to be emerging, but the timing still remains
unclear.  We are focusing on managing our operations within our
run-to-demand strategy and wringing out additional costs to
maximize our results," Correll concluded.

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

                            *   *   *

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

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


GLOBAL AXCESS: Provides Results Expectations for Second Quarter
---------------------------------------------------------------
Global Axcess Corp. (OTC Bulletin Board: GLXS), one of the
Nation's only fully-integrated, one-stop sources for ATM
management solutions, expects to report record operating profit
and record net income for its second fiscal quarter, ended
June 30, 2003.

Based on an internal preliminary review of the Company's second
quarter financial performance, management expects to report
between $170,000 and $200,000 in net income on revenues of
approximately $2.5 million to $2.7 million. Actual results are
scheduled for release on or before August 14, 2003.

"Due to some one-time accounting gains associated with the debt
restructuring we recently announced, overall net profitability for
the quarter will be enhanced. Nonetheless, Global Axcess is
pleased to report that we fully expect to post record operating
profits, as well, reflecting our efforts to enhance gross profit
margins on sales and promote greater cost efficiencies in our day-
to-day operations," stated David Surette, Chief Financial Officer.

Headquartered in Ponte Vedra Beach, Florida, Global Axcess Corp.
was founded in 2001 with a mission to emerge as a leader in the
Automated Teller Machine industry. Through its wholly owned
subsidiary, Nationwide Money Services, Inc., the Company provides
turnkey ATM management solutions that include cash, project and
account management services. NMS currently owns and operates over
1600 ATMs in its national network spanning 39 states and provides
proprietary ATM branding and processing for 31 financial
institutions with over 300 branded sites nationwide. EFT
Integration, Inc., another 100%-owned subsidiary of Global Axcess,
provides traditional, certified transaction processing and
terminal driving to its valued customers and is developing
alternative processing solutions for expanding ATM functionality
through web-based products and services. Future product offerings
will be targeted towards traditional ATM users, cross-border
processing of transactions, and solutions to provide financial
services to the un-banked customer, such as check cashing,
international money transfer and pre-paid products/services. For
more information on the Company, please visit
http://www.globalaxcess.biz

                          *     *     *

                 Liquidity and Capital Resources

In its Form 10-QSB for the quarter ended March 31, 2003, the
Company reported:

"As of March 31, 2003, the Company had current assets of
$1,235,068 and current liabilities of $2,732,126, which results in
a working capital deficit of $1,497,058, as compared to current
assets of $3,431,766 and current liabilities of $5,655,429
resulting in a working capital deficit of $2,223,663 as of
March 31, 2002. The ratio of current assets to current liabilities
decreased to .45 at March 31, 2003 from .61 at March 31, 2002.
Thus, the overall working capital deficit decreased by $726,605.
The decrease in the deficit resulted from the pay-off of various
leases amounting to approximately $563,252, a reduction of Notes
Payable to related parties of $191,500 and Notes Payable in the
amount of approximately $176,000. These amounts were paid out of
Cash and collected Accounts Receivable for approximately $399,000.

                     Additional Funding Sources

"We have funded our operations and capital expenditures from cash
flow generated by operations, capital leases, and from the
settlement of various issues with third parties. Net cash provided
by operating activities was $44,827 and $129,627 during the 1st
quarters 2003 and 2002, respectively. Net cash provided by
operating activities in three month period ending March 31, 2003
consisted primarily of a loss of $(115,863) and depreciation and
amortization of $209,569, an increase in accounts receivable of
$6,997, a decrease in prepaid expenses of $26,843, a decrease in
accounts payable and accrued expenses of $52,725 and a decrease in
amounts due to related parties of $16,500. The cash provided by
operating activities allowed us to pay off or pay-down $68,505 for
various lease obligations.

"In order to fulfill its business plan and expand its business,
the Company must have access to funding sources that are prepared
to make equity or debt investments in the Company's securities."


GLOBAL CROSSING: FTI's Retention as Consultant Approved
-------------------------------------------------------
Judge Gerber permits Global Crossing Ltd. and its debtor-
affiliates to employ FTI as its consultant effective nunc pro tunc
to February 7, 2002, for the sole purpose of allowing FTI to
receive compensation and reimbursement of expenses for past
consulting services provided to the Debtors. Pursuant to an
agreement reached between the parties, FTI is permitted to receive
compensation for its fees amounting to $60,000 plus $8,051.76 in
disbursements for total compensation of $68,051.76. (Global
Crossing Bankruptcy News, Issue No. 43; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


GUAM POWER: S&P Drops Revenue Bond Ratings to BB+ from BBB
----------------------------------------------------------
Standard & Poor's Ratings Services said it lowered the ratings on
Guam Power Authority's revenue bonds to 'BB+' from 'BBB' based on
a number of factors, including the financial pressure caused by
recent typhoon damage, diminished operating liquidity, and weak
projected debt coverage in 2003. The ratings remain on CreditWatch
with negative implications.

"GPA's liquidity is currently very low, and it is uncertain
whether the authority will generate sufficient cash flow to fully
meet its operating and debt service payment obligations for the
remainder of fiscal 2003," said Standard & Poor's credit analyst
Leo Carrillo, commenting on the ratings being lowered below
investment grade. "Another serious concern is the current strategy
of GPA and its regulators to avoid rate increases, postpone fuel
cost surcharge adjustments and rely exclusively on non-recurring
government grants and transfers to meet minimal liquidity and
financial performance requirements." While GPA expects to receive
significant cash infusions from the Government of Guam and the
Federal Emergency Management Agency to help recoup costs from
severe damage cause by recent typhoons, the timing and size of
these payments are uncertain.

The lowered rating affects approximately $390 million in
outstanding revenue debt. The bonds were originally issued to fund
capital projects. GPA has no immediate plans to issue short- or
long-term debt, but the utility is considering the issuance of
between $100 and $150 million in bonds for capital projects.

Guam Power Authority is a vertically integrated electric utility
providing service to approximately 45,700 customers on the island
of Guam, an unincorporated U.S. territory located in the western
Pacific Ocean.


HASBRO INC: Board of Directors Declares Quarterly Cash Dividend
---------------------------------------------------------------
Hasbro, Inc.'s (NYSE:HAS) Board of Directors has declared a
quarterly cash dividend of $0.03 per common share. The dividend
will be payable on November 17, 2003 to shareholders of record at
the close of business on November 3, 2003.

Hasbro is a worldwide leader in children's and family leisure time
entertainment products and services, including the design,
manufacture and marketing of games and toys ranging from
traditional to high-tech. Both internationally and in the U.S.,
its PLAYSKOOL, TONKA, MILTON BRADLEY, PARKER BROTHERS, TIGER, and
WIZARDS OF THE COAST brands and products provide the highest
quality and most recognizable play experiences in the world.

As reported in Troubled Company Reporter's May 5, 2003 edition,
Hasbro, Inc.'s $380 million 'BB+' rated secured bank credit
facility and 'BB' rated senior unsecured debt were affirmed by
Fitch Ratings.

As of March 30, 2003, Hasbro had total debt outstanding of
approximately $876 million. The Rating Outlook was revised to
Stable from Negative, reflecting the progress Hasbro has made in
reducing debt as well as the apparent stabilization of revenues
following significant declines in 2000 and 2001.

The ratings reflected Hasbro's strong market presence and its
diverse portfolio of brands coupled with its improved financial
profile. The ratings also considered the challenges Hasbro
continues to face in refocusing its strategy on its core brands
and the dynamic nature of the toy industry.


HOUSTON EXPLORATION: Completes Redemption of $100MM 8.625% Notes
----------------------------------------------------------------
The Houston Exploration Company (NYSE: THX) has completed the
previously announced redemption of the entire $100 million
aggregate principal amount of the company's outstanding 8.625
percent senior subordinated notes due January 2008.  Houston
Exploration financed the redemption with a portion of the net
proceeds received from its private placement of $175 million 7.0
percent senior subordinated notes due 2013 that was completed
June 10, 2003.

The total redemption price, including the call premium, was
approximately $104.3 million.  The company will recognize debt
extinguishment expenses totaling $5.9 million ($3.9 million net of
tax) in the quarter ended June 30, 2003.  This includes the call
premium of $4.3 million and a non-cash charge of $1.6 million
representing the write-off the remaining unamortized debt issuance
costs relating to the $100 million 8.625 percent senior
subordinated notes.

The Houston Exploration Company is an independent natural gas and
oil company engaged in the development, exploitation, exploration
and acquisition of domestic natural gas and crude oil properties.
The company's operations are focused in South Texas, the shallow
waters of the Gulf of Mexico and the Arkoma Basin, with additional
production in East Texas, South Louisiana and West Virginia.  For
more information, visit the company's Web site at
http://www.houstonexploration.com

As reported in Troubled Company Reporter's June 6, 2003 edition,
Standard & Poor's Ratings Services raised its long-term corporate
credit ratings on natural gas and oil company The Houston
Exploration Co., to 'BB' from 'BB-'. At the same time, Standard &
Poor's assigned its 'B+' rating to Houston Exploration's proposed
$150 million senior subordinated notes offering. The proceeds will
be used to redeem the company's existing subordinated notes and
repay short-term debt. The outlook is stable.

Houston, Texas-based Houston Exploration's has about $175 million
in outstanding debt.


ICN PHARMACEUTICALS: Court Ruling Spurs S&P to Cut Rating to BB-
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on ICN Pharmaceuticals Inc. to 'BB-' from 'BB'. At the same
time, Standard & Poor's lowered the subordinated debt rating on
ICN's 6.5% convertible notes due July 15, 2008, to 'B' from 'B+'.
The outlook remains negative.

The action is in response to a recent court ruling that may allow
three generic drug manufacturers to begin selling a generic
version of Ribapharm's antiviral ribavirin. ICN currently owns 80%
of Ribapharm, and ribavirin sales account for 37% of ICN's annual
revenues.

"The speculative grade ratings on Costa Mesa, California-based
specialty pharmaceutical company ICN reflects the weakening of the
company's important ribavirin-related royalty stream, uncertainty
surrounding the company's ongoing restructuring plan, and the
likelihood of a more aggressive financial policy as it seeks to
meaningfully broaden its product portfolio," said Standard &
Poor's credit analyst Arthur Wong. "On the other hand, the company
continues to maintain a strong position in the hepatitis C
treatment market and has only minimal debt maturities over the
next five years."

Though ICN manufactures and distributes a wide range of
pharmaceutical products, Ribavirin provides its most important
source of revenue and cash flow. The oral version of the drug,
Rebetol, is licensed to Schering-Plough Corp. for sale in
combination with Schering-Plough's PEG-Intron/Intron A for the
treatment of hepatitis C.

However, PEG-Intron/Rebetol has been experiencing significant
competition from a new rival hepatitis C treatment, Roche's
Pegasys/Copegus. Roche is aggressively pricing its treatment and
is estimated to have already captured 30% of the market.
(Previously, PEG-Intron/Rebetol owned nearly 100% of the market.)
Lower PEG-Intron/Rebetol sales translate into a lower ribavirin
royalty stream for ICN. (ICN collects a royalty on Copegus sales
as well, as Copegus is essentially a branded version of ribavirin,
however, Standard & Poor's believes that the royalty rate is
lower.)

With the possibility of generic competition by the end of 2003,
the falloff in ribavirin related royalties could accelerate.

Given the uncertainty relating to the ribavirin royalties, ICN is
likely to re-evaluate its current $168 million tender offer for
the 20% of Ribapharm that it doesn't own. Sold in a partial
initial offering during 2002, Ribapharm holds the rights to
ribavirin, as well as the rights to ICN's internal drug
development pipeline.

Meanwhile, ICN is in the midst of a restructuring program. The
company is refocusing on its more profitable North American and
Western European pharmaceutical businesses, and seeking to divest
businesses that are deemed non-core. ICN recently completed the
sale of its Russian pharmaceutical operations for $55 million
cash. Standard & Poor's believes that the transaction improves
ICN's business profile, in that it reduces the company's exposure
to that more volatile market.


ICO INC: Timothy Gollin Resigns & Jon Biro Appointed Interim CEO
----------------------------------------------------------------
ICO, Inc. (Nasdaq: ICOC) announced that Timothy J. Gollin, Chief
Executive Officer, resigned effective July 17, 2003.

The Board of Directors has appointed Jon C. Biro, an ICO board
member and the Company's Chief Financial Officer, to assume
Gollin's responsibilities as CEO until a new CEO is elected. The
Company also announced that it has engaged a nationally-recognized
search firm to seek out a permanent CEO.

Biro said, "We have executed the major points of the restructuring
plan which this management team set out to complete. We remain
dedicated to production of proprietary polymer products serving a
variety of plastics industry segments, as well as to continued
provision of size reduction services under the well established
WEDCO(TM) service mark. ICO's employees are skilled and dedicated,
and they remain committed to serving our customers. I am looking
forward to serving as ICO's interim CEO and believe that the
Company is well positioned to increase its market share in its
core businesses." Biro remains the Company's Chief Financial
Officer, but Brad Leuschner, ICO's Chief Accounting Officer, will
assume his position as Treasurer on an interim basis.

The Board of Directors expressed their appreciation for Gollin's
service to the Company. Chris O'Sullivan, the Company's Chairman
of the Board, said, "ICO is grateful to Tim for his contribution
to the Company during the past two years. Tim has been an
important part of the management team that has sharpened the
Company's strategic focus, restructured its business, and laid the
groundwork for the next stage of the Company's evolution."

In conjunction with the termination of Gollin's employment
agreement, the Company will pay Gollin severance equal to one
year's base salary. Such severance will be in the amount of
$247,500, and will be paid to Gollin over the next six months.

Jon C. Biro, a certified public accountant, has been principally
employed as Chief Financial Officer and Treasurer of ICO since
April 2002. From September 1996 to April 2002, he was employed as
Senior Vice President, Chief Accounting Officer and Treasurer of
ICO, and from October 1994 to September 1996, he was employed as
Controller of ICO. Prior to that time, Mr. Biro was with a
predecessor of PricewaterhouseCoopers LLP.

Through twenty plants worldwide, ICO Polymers produces and markets
ICORENE(TM) and COTENE(TM) rotational molding powders, as well as
ICOFLO(TM) powdered processing aids and ICOTEX(TM) powders for
textile producers. ICO additionally provides WEDCO(TM) size
reduction services for specialty polymers. ICO's Bayshore
Industrial subsidiary produces specialty compounds, concentrates,
and additives primarily for the film industry.

As previously reported, Standard & Poor's withdrew its 'B+'
corporate credit and 'B-' senior unsecured debt rating on ICO
Inc., at the company's request.


IMC GLOBAL: $310-Mil Senior Unsecured Notes Get S&P's B+ Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating to
fertilizer producer IMC Global Inc.'s proposed $310 million senior
unsecured notes due 2013.

Standard & Poor's said that at the same time it has affirmed its
'B+' corporate credit rating on the company. Lake Forest, Ill.-
based IMC is one of the largest global producers of phosphate and
potash crop nutrients for the agricultural industry and has more
than $2.1 billion of debt outstanding. The outlook is stable.

"The ratings on IMC Global reflect the company's average business
profile, offset by a very aggressive financial profile," said
Standard & Poor's credit analyst Peter Kelly.


IMCLONE SYSTEMS: Robert F. Goldhammer Resigns as Director of Co.
----------------------------------------------------------------
ImClone Systems Incorporated (NASDAQ: IMCL) announced that Robert
F. Goldhammer, a Director of the Company since 1984, has resigned.
As previously announced, Mr. Goldhammer stepped down from his
position as Chairman of the Board in April 2003.

"Bob has been a valuable supporter of the Company throughout his
tenure as a Director and as Chairman of the Board," stated David
Kies, Lead Director of ImClone Systems Incorporated's Board of
Directors. "We respect this personal decision, thank him for his
many years of service and wish him well in his future endeavors."

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.


INTEGRATED HEALTH: Seeks Clearance to Use $3.7-Mil. Trust Funds
---------------------------------------------------------------
Pursuant to Section 363(b) of the Bankruptcy Code, Integrated
Health Services, Inc., and its debtor-affiliates seek the Court's
authority to use funds being held in trust by Citicorp Trust Bank,
as successor by merger to Smith Barney Private Trust Company,
pursuant to a December 22, 1997 Trust Agreement; and to direct
Citicorp to distribute the Funds to Debtor Integrated Health
Services.

Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor LLP, in
Wilmington, Delaware, informs the Court that prior to the
Petition Date, Debtor Integrated Health entered into a January 1,
1994 Employment Agreement with Dr. Robert N. Elkins.  Dr. Elkins
served as Chairman of the IHS Board of Directors, Chief Executive
Officer and President of Integrated Health until January 12,
2001, when he resigned his positions pursuant to a Court-approved
July 26, 2000 Separation Agreement.

In December 1997, pursuant to an amendment to the Employment
Agreement, the Debtors agreed to enter into an Integrated Health
Services, Inc. Key Employee Supplemental Executive Retirement
Plan A Trust Agreement, Trust 'B'.  Pursuant to the SERP Trust B
Agreement, the Debtors established and funded a trust, for the
purpose of providing IHS "with a source of funds to assist it in
meeting deferred compensation benefit liabilities with respect to
[Elkins]."  All assets held in Trust B were "subject to the
claims of the Company's creditors in the event of the Company's
Insolvency."

Pursuant to the Separation Agreement, Dr. Elkins and certain of
his relatives and affiliates released all claims against the
Debtors, which include Dr. Elkins' interests, if any, in the
assets held in Trust B.  Mr. Brady informs the Court that at this
time, the assets in Trust B include $3,700,000 in liquid assets.

In anticipation of the possible need to use the Funds, the
Debtors contacted Citicorp, the SERP Trustee, in June 2003 and
requested that the Funds promptly be distributed to Integrated
Health.  In response, the SERP Trustee requested the Debtors to
seek a Court order authorizing the distribution of the Funds to
Integrated Health.

Although the Debtors believe that the proposed use of the Funds
and the distribution of the Funds to Integrated Health fall
within the ordinary course of the Debtors' businesses, the
Debtors obliged Citicorp's request.

Mr. Brady points out that Dr. Elkins released his interests in
the Funds pursuant to the Separation Agreement.  There is no
longer a reason to incur the ongoing administrative expense of
segregating the Funds in Trust B.  A Court order will enable the
Debtors to have access to the Funds in the event that the Debtors
determine that it is necessary to use the Funds to fund working
capital needs. (Integrated Health Bankruptcy News, Issue No. 61;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


INTELLIGENT MOTOR: Lack of Capital Spurs Going Concern Doubts
-------------------------------------------------------------
For the three months ended March 31, 2003 and year ended
December 31, 2002, Intelligent Motor Cars Group Inc. suffered net
losses of approximately $397,000 and $2,443,000, respectively. The
Company also had a stockholders' deficiency of approximately
$1,069,000, as well as a working capital deficit of approximately
$955,000, at March 31, 2003. In February 2003, the Company entered
into a share exchange transaction with an entity which is subject
to the registration and reporting requirements of the Securities
and Exchange Commission.

This transaction required significant management and financial
resources on the part of the Company in connection with the
acquisition and subsequent assimilation of the two entities. This
caused the Company to have fewer resources, including working
capital and management time, to commit to operations.  These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.


INTERFACE INC: Will Publish Second Quarter Results on Wednesday
---------------------------------------------------------------
Interface, Inc. (Nasdaq: IFSIA) intends to release its second
quarter 2003 results on Wednesday, July 23, 2003, after the close
of the market.  In conjunction with this release, Interface will
host a conference call on Thursday, July 24, 2003 at 9:00 AM
Eastern Time that will be simultaneously broadcast live over the
Internet.  Certain information discussed on the conference call
will be available on Interface's Web site at
http://www.interfaceinc.com/results/investor/news.php

Daniel T. Hendrix, President and Chief Executive Officer, and
Patrick C. Lynch, Vice President and Chief Financial Officer, will
host the call.

                         Thursday, July 24, 2003
                          9:00 AM Eastern Time
                          8:00 AM Central Time
                          7:00 AM Mountain Time
                          6:00 AM Pacific Time

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

   http://www.firstcallevents.com/service/ajwz384823773gf12.html

Allow at least 15 minutes prior to the call to visit the site and
download and install any necessary audio software.  The archived
version of the conference call will be available at this site
beginning approximately one hour after the call ends through
July 24, 2004 at 11:59 PM Eastern Time.

Interface, Inc. is a recognized leader in the worldwide commercial
interiors market, offering floorcoverings, fabrics and interior
architectural products.  The Company is committed to the goal of
sustainability and doing business in ways that minimize the impact
on the environment while enhancing shareholder value.  The Company
is the world's largest manufacturer of modular carpet under the
Interface, Heuga, Bentley and Prince Street brands, and through
its Bentley Mills and Prince Street brands, enjoys a leading
position in the high quality, designer-oriented segment of the
broadloom carpet market.  The Company provides specialized carpet
replacement, installation, maintenance and reclamation services
through its Re:Source Americas service network.  The Company is a
leading producer of interior fabrics and upholstery products,
which it markets under the Guilford of Maine, Stevens Linen,
Toltec, Intek, Chatham, Camborne and Glenside brands.  In
addition, the Company provides specialized fabric services through
its TekSolutions business; produces raised/access flooring systems
under the TecCrete, TecFlor, TecSteel and InterCell brands; and
markets modular wiring systems under the Interface PeoplePower
brand.

As reported in Troubled Company Reporter's May 8, 2003 edition,
Standard & Poor's Ratings Services lowered its long-term corporate
credit and senior unsecured debt ratings on Atlanta, Ga.-based
carpet manufacturer Interface Inc. to 'B' from 'B+'. At the same
time, the subordinated debt rating was lowered to 'CCC+' from 'B-
'. The mixed shelf registration rating was also lowered to a
preliminary B/CCC+ from a preliminary B+/B-.

The outlook is negative. The company's total debt outstanding at
Dec. 29, 2002, was about $445 million.

The downgrade follows continued weakness in the commercial sector
and weaker than expected results for the first quarter ended March
2003, resulting in further volume declines and operating losses in
several of Interface's business segments.


INTERMET CORP: Reports $6.6 Million in Net Loss for 2nd Quarter
---------------------------------------------------------------
INTERMET Corporation (Nasdaq: INMT), one of the world's leading
manufacturers of cast-metal automotive components, reported a 2003
second-quarter net loss, including restructuring and other charges
associated with the previously announced closure of its Radford
Foundry, of $6.6 million. This compares with a 2002 second-quarter
net income of $4.8 million. The charges associated with the plant
closure were $7.2 million in restructuring charges, and $1.0
million in additional reserves for environmental remediation at
the facility, for a total of $8.2 million net of taxes. Net income
for the quarter excluding these charges would have been $1.6
million.

The company also reported 2003 second-quarter revenue of $196.8
million, compared with $218.0 million in the year-ago period. The
sales decline is less than what was experienced collectively by
the company's main customers in North America and Europe and
includes the effect of selling-price reductions.

Commenting on the second quarter, President and COO Gary F. Ruff
said, "These sales were slightly in excess of the company's
previous expectations, resulting in higher net income before the
Radford-related charges of 6 cents per diluted share, which is
better than the most recent guidance. Operations met performance
expectations, despite the soft economy in both North America and
Europe that has affected overall vehicle production, and the
continuing pressure on prices experienced by most automotive
suppliers over the last several years. INTERMET remains completely
focused on growing its business, increasing operating efficiency,
and reducing costs."

Vice President Finance and CFO Bob Belts said, "Gross margin for
the quarter was 8.9 percent, 1.6 percentage points lower than the
same period in 2002. The lower margin is directly attributable to
lower sales compared with last year along with lower selling
prices for our products. Our continuing efforts to improve
operations have been successful, which helped to mitigate the
effects of lower sales."

Selling and administrative expenses for the company tracked the
change in sales at 3.9 percent for the quarter. Cash flow from
operations was $5.6 million for the quarter, overall debt was
reduced $2.5 million to $284.9 million, and depreciation and
amortization was reported at $12.6 million.

INTERMET's six-month sales were $403.9 million, down $20.2 million
from the same period last year. The company also reported a six-
month net loss, including restructuring and other charges
associated with the closure of the Radford Foundry, of $3.4
million, or 13 cents per diluted share. Cash flow from operations
during the first six months was $5.3 million. The company's
effective tax rate for the first six months of 2003 was 38
percent, and depreciation and amortization was $25.6 million.
Capital spending to date totaled $6.1 million.

Ruff continued: "Obviously, we were disappointed with having to
close the Radford Foundry after extensive efforts to bring it to
profitability. But we believe the recent purchase of our joint
venture partner's interest in our Porto, Portugal, foundry clearly
demonstrates our commitment to grow globally and brings a
technologically advanced, world-class foundry completely into the
INTERMET fold."

Ruff also noted that the INTERMET "LASIK Vision" (Leveraging
Assets Strategically, Investing Knowledgeably) was finalized
during the quarter and rolled out corporate-wide. "LASIK provides
a common vision, as well as goals and action plans that we believe
will translate into enhanced services and products for our
customers -- and positions INTERMET for accelerated sales and
earnings performance well into the future," he said.

The INTERMET Board of Directors voted to approve a quarterly
dividend of 4 cents per share, payable October 1, 2003, to
shareholders of record as of September 1, 2003.

                       Third-Quarter Outlook

"Our third-quarter revenue will trend slightly lower due to the
normal summer shutdowns at most of our customers," said CFO Belts.
"We anticipate sales in the $187 to $195 million range, and
diluted earnings per share from continuing operations to be around
breakeven. Third-quarter results will include the consolidation of
the Porto, Portugal, foundry for the first time. The tax rate in
the third quarter is expected to be 38 percent and depreciation
and amortization is expected to be about $12 million. Capital
spending should come in at about $5 million," he said.

With headquarters in Troy, Michigan, INTERMET Corporation (S&P,
BB- Corporate Credit Rating, Stable) is a manufacturer of
powertrain, chassis/suspension and structural components for the
automotive industry. INTERMET's strategy is to be the world's
leading supplier of cast-metal automotive components. The company
has more than 5,500 employees at facilities located in North
America and Europe. More information is available on the Internet
at http://www.intermet.com


INTERMET CORP: Appoints Gary F. Ruff as New President and CEO
-------------------------------------------------------------
INTERMET Corporation (Nasdaq: INMT), one of the world's leading
manufacturers of cast-metal automotive components, announced that
Gary F. Ruff, 51, has been elected by the Board of Directors to
the position of President and Chief Executive Officer, effective
immediately.  He succeeds John Doddridge, 62, who continues as
Chairman, a position he has held since 1994.

Ruff, who had been President and COO of INTERMET since December of
last year, has over 34 years of experience in the metal-casting
and automotive industries.  He joined INTERMET in 1999 as Vice
President of Technical Services.

"Gary's energy, strategic insight and operations experience
combined with a clear vision of INTERMET's role as the industry
pacesetter, make him the ideal choice to lead our company into the
future," said Doddridge.  "Gary and I have had a productive
partnership as we have worked together to help make INTERMET one
of the automotive industry's most efficient and technologically
advanced casting suppliers."

Ruff, in commenting on the announcement, said, "I welcome this
opportunity to take a greater role in building on INTERMET's
strong foundation as we aggressively compete in the global
automotive industry.  Our material and process technologies,
together with broad manufacturing capabilities, have the company
well positioned for future growth."

Ruff began his automotive and casting career in 1969 as a process
engineer with the Chevrolet Division of General Motors.  He held a
variety of positions at GM, progressing to Chief Process Engineer
with the Central Foundry Division.  In 1987, he joined CMI
International, a leading metal caster, as Vice President,
Materials.  He went on to become Chief Technical Officer and
Executive Vice President and Director of CMI.  In early 1999, when
CMI was acquired by Hayes Lemmerz, he became President of North
American Wheels and Corporate Vice President.

Ruff received a PhD in metallurgy and materials science in 1977
from Case Western Reserve University after receiving a Master of
Science in Metallurgical Engineering in 1975 from the same
University.  In 1974 he earned a Bachelor of Mechanical
Engineering from General Motors Institute.  He also completed
executive and management education programs at Dartmouth, Michigan
State University, University of Michigan and National
Technological University in Norway.

Ruff is a member of the American Foundry Society, having served as
Chairman of numerous AFS committees.  He has won a number of
awards and has authored over 30 technical papers.  He is a member
of SAE, ASM International and American Society for Quality.  Ruff
is a member of the Visiting Committee for the Case School of
Engineering and an Adjunct Professor, Material Science and
Engineering, at Case Western Reserve University.  He also is a
Trustee of the Foundry Educational Foundation.

With headquarters in Troy, Michigan, INTERMET Corporation (S&P,
BB- Corporate Credit Rating, Stable) is a manufacturer of
powertrain, chassis/suspension and structural components for the
automotive industry. INTERMET's strategy is to be the world's
leading supplier of cast-metal automotive components. The company
has more than 5,500 employees at facilities located in North
America and Europe. More information is available on the Internet
at http://www.intermet.com


LEAP WIRELESS: Wants to Honor Prepetition Withholding Taxes
-----------------------------------------------------------
Robert A. Klyman, Esq., at Latham & Watkins LLP, in Los Angeles,
California, relates that under agreements executed in 1998 in
connection with the spin off by Qualcomm Incorporated of Leap
stocks, Qualcomm employees who were hired by Leap Wireless
International Inc. generally retained their right to exercise
previously granted Qualcomm stock options while they remained
employees of Leap.  When a Leap employee exercised previously
granted Qualcomm stock options, Leap's stock administrator would
notify Leap's payroll department of the terms of the exercise --
which included the appropriate tax withholdings with respect to
the exercised stock options. Thereafter, the Payroll Department
would record the withholdings of the applicable federal, state and
Medicare taxes from the affected employee and process a payment
from the affected employee for the Withholdings.  Leap typically
transferred an amount equal to the Withholdings to Leap's payroll
provider, ADP, who in turn would forward the Withholdings to the
applicable governmental taxing authority.

Generally, prior to the Petition Date, Cricket offered stock
options to certain Leap employees as part of their compensation
packages.  The Payroll Department would follow the same process
to record the terms of the stock option exercise and Withholdings
and to transfer the Withholdings to Leap's payroll provider, ADP,
for filing with the applicable governmental taxing authority.

In these instances, however, Leap inadvertently failed to
transfer the Withholdings to ADP so the withholdings were not
paid to the applicable governmental taxing authority:

     A. The Hutcheson Option Withholdings: On December 29, 1999,
        Leap's stock administrator notified the Payroll Department
        that Doug Hutcheson, Leap's then Vice President, Business
        Development had exercised certain of his previously granted
        Qualcomm stock options.  Those exercised options resulted
        $387,789 in income for Mr. Hutcheson at Leap.  Accordingly,
        $137,471.05 in Federal, State and Medicare taxes were
        withheld from Mr. Hutcheson's income on March 30, 2000.
        However, Leap inadvertently failed to forward the Hutcheson
        Option Withholdings to ADP or the appropriate taxing
        authorities.  In addition, Leap inadvertently failed to
        forward an additional $5,622.93 reflecting Leap's Medicare
        matching obligation.  The Hutcheson Option Withholdings
        will include the $5,622.93 in unpaid matching obligation,
        for a total of $143,093.98.  Once the Hutcheson Option
        Withholdings were withheld, Mr. Hutcheson no longer had any
        liability for their payment to the applicable taxing
        authorities.  Leap has not paid the Hutcheson Option
        Withholdings to the applicable taxing authorities.

     B. The White Option Withholdings: On March 23, 2000, Leap's
        stock administrator notified the Payroll Department that
        Leap's Chief Executive Officer, Harvey White, had exercised
        certain of his Cricket stock options.  Those exercised
        options resulted in $300,000 deemed income for Mr. White at
        Leap.  Accordingly, Leap withheld $102,000 of Federal,
        State and Medicare taxes from Mr. White's income on
        March 30, 2000.  However, Leap inadvertently failed to
        forward the White Option Withholdings to ADP or the
        appropriate taxing authorities.  In addition, Leap
        inadvertently failed to forward an additional $4,350
        reflecting Leap's Medicare matching obligation.  The White
        Option Withholdings will include the $4,350 in unpaid
        matching obligation, for a total of $106,350.  Once the
        White Option Withholdings were withheld, Mr. White no
        longer had any liability for their payment to the
        applicable taxing authorities.  On May 19, 2003, Leap paid
        the White Option Withholdings to the applicable taxing
        authorities as a result of a review and application of the
        Cricket Order.

     C. The Employee Award Withholdings: In 2000, Leap awarded
        trips to three employees in recognition of their
        outstanding work.  As part of the awards, Leap agreed to
        gross up the award to account for any resulting tax
        obligation for these employees and withheld tax payments
        from the employees' paychecks.  The Employee Award
        Withholdings aggregated $9,940.99.  However, Leap
        inadvertently failed to forward the Employee Award
        Withholdings to ADP or the appropriate taxing authorities.
        Once Leap withheld the Employee Award Withholdings from the
        applicable employee's paycheck, the employee no longer had
        any liability for their payment to the applicable taxing
        authorities.  On May 19, 2003, Leap paid the Employee Award
        Withholdings to the applicable taxing authorities as a
        result of a review and application of the Cricket Order.

Accordingly, the Debtors sought and obtained the Court's
authority to pay certain withholding taxes relating to
prepetition periods nunc pro tunc to May 19, 2003 to pay other
prepetition withholding taxes.

Mr. Klyman relates that Leap is obligated to pay the Withholdings
to the applicable governmental taxing authority.  These
Withholdings constitute "trust fund" taxes; consequently, the
payment of these taxes will not prejudice other creditors of
Leap's estate because the applicable governmental taxing
authority holds a priority claim under Section 507(a)(8)(C) of
the Bankruptcy Code with respect to these Tax Claims.

A claim falls under Section 507(a)(8)(C) if:

       (i) the claim is held by a governmental unit,

      (ii) the claim is for a tax,

     (iii) the tax is owed by a party other than the debtor,

      (iv) the tax must be collected or withheld from that party
           and transmitted to the governmental unit, and

       (v) the debtor is liable for payment of the tax in some
           capacity.

The Withholdings satisfy each of these requirements because:

     A. Leap owes the Withholdings to a governmental unit;

     B. Any claim with respect to the Withholdings constitutes a
        claim for taxes owed by Leap's employees;

     C. Leap collected the Withholdings and inadvertently failed to
        transmit the Withholdings to the applicable governmental
        taxing authority; and

     D. Leap is liable to pay the tax as the employer.

Mr. Klyman assures the Court that no Leap creditor will be
prejudiced by payment of the Withholdings because trust fund
taxes are not property of Leap's estate. (Leap Wireless Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


LIQUIDIX: Sellers & Andersen Replaces Auditors Semple & Cooper
--------------------------------------------------------------
Effective April 22, 2003, Semple & Cooper, LLP, the independent
accountant of Anscott Industries, Inc. (formerly Liquidix, Inc.),
resigned and provided written notice that the client-auditor
relationship between Anscott and Semple had ceased.

Semple's report on the financial statements for the year ended
March 31, 2002 included an explanatory paragraph reflecting an
uncertainty because the realization of a major portion of the
Company's assets is dependent upon its ability to meet its future
financing requirements and the success of future operations. These
factors raise substantial doubt about the Company's ability to
continue as a going concern.

The Company engaged, Sellers & Andersen, LLC, Salt Lake City, Utah
as its new independent auditors as of July 1, 2003.


LORAL SPACE: Gets Court Nod to Honor $15 Million Vendor Claims
--------------------------------------------------------------
Loral Space & Communications Ltd., and its debtor-affiliates
sought and obtained approval from the U.S. Bankruptcy Court for
the Southern District of New York to pay the prepetition claims of
certain critical vendors.

The Debtors report that in connection with the operation of their
fixed satellite services and satellite design and manufacturing
businesses, certain specialty and other vendors supply essential
services and equipment.  The Debtors' ability to continue their
operations will largely depend upon the continued access to these
Critical Vendors.  These critical services include maintenance,
construction and security services related to ensuring the
reliability of their crucial satellite communications equipment
and network software.  The Debtors' fixed satellite services
business also rely on other Critical Vendors. The custom tailored
networks used to access satellite capacity require specialized
equipment that is available from only a handful of companies
worldwide.

"At this precarious stage in the Debtors' business operations, an
interruption in the provision of services, equipment and other
goods by the Critical Vendors will have a severely prejudicial
effect on the Debtors' efforts to rehabilitate and reorganize,"
Loral Space tells the Court.  "The services and supplies provided
by the Critical Vendors must continue unabated for the duration of
these chapter 11 cases if substantial harm and loss of enterprise
value is to be avoided. "

Additionally, because many of the Critical Vendors are integrally
involved in the Debtors' billing and collection efforts, the
cessation of the services provided by such Critical Vendors would
have an immediate negative impact on the Debtors' ability to
generate revenue which would irreparably harm its operations and
severely impede its prospects for successful rehabilitation. In
the case of the Critical Vendors that provide specialized
satellite accessing equipment, an inability to obtain such
equipment would delay or perhaps even prevent the ability to
provide capacity to the various television networks and other
large services customers of the Debtors.  Such an outcome would
endanger some of the Debtors' most valuable customer
relationships.

The Debtors estimate that the amount of outstanding obligations to
the Critical Vendors relating to the period prior to the
Commencement Date aggregates to a total of $15,000,000. The
Debtors submit that authority to pay the Critical Vendor Claims
will not create an imbalance of their cash flows because many of
these obligations have customary payment terms and will not be
payable immediately. Cash maintained by the Debtors, together with
the cash gene rated in the ordinary course of the Debtors'
businesses, will provide more than sufficient liquidity for
payment of the Critical Vendor Claims in the ordinary course of
business.

Loral Space & Communications Ltd., headquartered in New York, New
York, and together with its affiliates, is one of the world's
leading satellite communications companies with substantial
activities in satellite-based communications services and
satellite manufacturing. The Company filed for chapter 11
protection on July 15, 2003 (Bankr. S.D.N.Y. Case No. 03-41710).
Stephen Karotkin, Esq., and Lori R. Fife, Esq., at Weil, Gotshal &
Manges LLP represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from its creditors, it
listed $2,654,000,000 in total assets and $3,061,000,000 in total
debts.


MEDCOMSOFT: Settles Outstanding Claims Filed by Ex-Employees
------------------------------------------------------------
MedcomSoft Inc. (TSX - MSF) announced that it had reached an out
of court settlement for the claim filed against the Company by a
former officer and director alleging wrongful dismissal and other
damages amounting to approximately $1.1 million, and a claim filed
by the Company against Nightingale Informatix Corporation and the
former officer and director referred to above and certain other
former employees of the Company who were employed by Nightingale.
Under the settlement agreement, the former officer and director
will receive 568,000 common shares in MedcomSoft Inc. and certain
costs to be paid in monthly installments of $5,000 starting
September 15, 2003 and ending April 15, 2005.

Also dismissed without cost, was the counterclaim filed by
Nightingale against MedcomSoft and its directors under a separate
action for damages amounting to approximately $51 million and by
certain Nightingale employees for damages amounting to
approximately $1.3 million.

This effectively removes all contingencies as referred to in the
notes of the latest interim financial statements of MedcomSoft
Inc.

Final releases have been executed by all parties.

MedcomSoft Inc. designs, develops and markets software solutions
for healthcare providers that are changing the way the healthcare
industry captures, manages and exchanges patient information. As a
result of MedcomSoft innovations, physicians and managed care
organizations can now easily and securely build and exchange
complete, structured, and codified electronic patient medical
records.

At March 31, 2003, the Company's balance sheet shows a working
capital deficit of about $1.4 million, and a total shareholders'
equity deficit of about $1.5 million.


MEGO FINANCIAL: Gets Court OK to Hire Belding Harris as Counsel
---------------------------------------------------------------
Mego Financial Corp., and its debtor-affiliates sought and
obtained approval from the U.S. Bankruptcy Court for the District
of Nevada to employ Belding, Harris & Petroni, Ltd., as their
attorneys in these proceedings.

The Debtors specifically request to employ Belding Harris to:

      a. prepare and file of Chapter 11 petition, lists of
         secured and unsecured creditors, and mailing matrix;

      b. prepare and file of schedules and statement of financial
         affairs;

      c. attend at hearings, pretrial conferences, and trials
         arising from the bankruptcy filing (specifically,
         excluding any representation in state court and federal
         court actions, unless previously agreed, or any
         litigation arising in connection therewith;

      d. prepare, file and present to the Bankruptcy Court of any
         pleadings necessary to protect the legal interests of
         Mego Financial Corp., including but not limited to,
         sales of real and personal property, injunctive relief
         requests under Section 105 and any appropriate adversary
         actions;

      e. prepare, file and present to the Bankruptcy Court of a
         disclosure statement and plan of reorganization under
         Chapter 11 of Title 11 of the United States Code;

      f. review all claims made by creditors and interested
         parties, and of any objections to claims which are
         disputed; and

      g. prepare and present a report of implementation of Plan
         and request for final decree closing the Chapter I 1
         case.

In consideration of the firm's legal services, the Debtors paid it
an advance retainer of $30,000. The firm's legal services are
billed at their current hourly rates of:

           Stephen R. Harris                $325 per hour
           Chris D. Nichols                 $275 per hour
           Gloria M. Petroni                $290 per hour
           paraprofessional services        $30 to $100 per hour

Mego Financial Corp., headquartered in Henderson, Nevada is in the
business of vacation time share resorts sales and management
business.  The Company filed for chapter 11 protection on
July 9, 2003 together with its 4 affiliated entities (Bankr. Nev.
Case No. 03-52300).  Stephen R Harris, Esq., at Belding, Harris &
Petroni, Ltd., represents the Debtors in their restructuring
efforts.  When the Company filed for protection from its
creditors, it listed more than $1 million in assets and
$39,319,861 in liabilities.


METROMEDIA FIBER: S.D.N.Y. Court Approves Disclosure Statement
--------------------------------------------------------------
Metromedia Fiber Network, Inc.'s disclosure statement received
approval of the United States bankruptcy court for the Southern
District of New York, clearing the way for a vote on MFN's
proposed plan of reorganization.

The Company's Creditors' Committee, including Franklin Mutual
Advisers, one of the Company's largest creditors, supports the
plan of reorganization and is recommending that creditors vote in
favor of its approval. A hearing on confirmation of the plan is
expected to take place in late August or early September. As
previously announced, MFN will become AboveNet, Inc. upon
emergence from Chapter 11.

In addition the Company announced that Fiber, LLC, an entity owned
by telecom industry pioneer and investor Craig McCaw, has
purchased certain significant trade claims. These claims will
translate into a significant equity ownership interest in the new
company, AboveNet, Inc.

"Craig McCaw has been a long-standing leader in the communication
industry and we are thrilled to have him as part of the new
company. The support of a visionary like Craig is a great vote of
confidence for us and for our future," said John Gerdelman,
president and chief executive officer of the company.

The plan of reorganization provides for a $50 million rights
offering to creditors, and Fiber, LLC and the Kluge Trust, a trust
associated with John Kluge, have agreed to purchase any
outstanding portion of the rights offering not purchased by other
creditors. Further, the Company has guaranteed Fiber, LLC a
minimum $12.5 million participation in the rights offering.

"With creditor support and additional funding through the rights
offering, we are confident that the new AboveNet will emerge as a
strong and nimble company poised for growth with a solid business
plan and a healthy balance sheet," said Gerdelman.

Metromedia Fiber Network, Inc., which plans to change its name to
AboveNet Inc. upon emergence from bankruptcy, combines the most
extensive metropolitan area fiber network with a global optical IP
network, state-of-the-art data centers and award winning managed
services to deliver fully integrated, outsourced communications
solutions for high-end enterprise companies. The all-fiber
infrastructure enables AboveNet customers to share vast amounts of
information internally and externally over private networks and a
global IP backbone, creating collaborative businesses that
communicate at the speed of light.

On May 20, 2002, Metromedia Fiber Network, Inc. and most of its
domestic subsidiaries commenced voluntary Chapter 11 cases in the
United States Bankruptcy Court for the Southern District of New
York. The Company has requested a hearing on confirmation of its
plan of reorganization on August 21.


MIDWEST EXPRESS: Pursuing New Financing After Dodging Bankruptcy
----------------------------------------------------------------
Midwest Express Holdings, Inc. (NYSE: MEH) has averted the
necessity of filing for reorganization under Chapter 11 of the
Bankruptcy Code.  Midwest Express Holdings is the parent company
of Midwest Airlines; Midwest Airlines' wholly owned subsidiary,
Skyway Airlines, Inc., operates Midwest Connect.

The airline holding company said it has achieved four
restructuring initiatives designed to restore it to long-term
financial health. Having reached closure on these items, the
company can now move forward with efforts to obtain new financing.

The restructuring efforts include:

-- Labor cost savings and productivity improvements from the
    company's employee unions. On Tuesday, all three of the
    company's represented employee groups -- the Midwest Air Line
    Pilots Association, the Skyway Air Line Pilots Association and
    the Midwest Association of Flight Attendants -- ratified
    agreements. The contracts are amendable after five years.

-- Identification of opportunities to enhance productivity for
    non-represented employees. Non-represented employee groups are
    currently working to develop process and productivity
    improvements, which are expected to be implemented by the end
    of 2003.

-- Renegotiation of aircraft finance agreements. The company has
    successfully renegotiated its existing finance agreements with
    11 aircraft lessors and lenders to reflect current market
    conditions. The new agreements reduce the present value of the
    agreements by $60-$70 million but do not require the return of
    any aircraft.

-- Adjustment of the company's fleet plan and delivery schedules
    to provide for more controlled growth. In light of current
    overcapacity in the industry, the company has completed
    negotiations with aircraft manufacturers to readjust the
    delivery schedule of its Boeing 717 aircraft program and defer
    its acquisition of Embraer regional jets. Midwest Airlines will
    continue to accept Boeing 717s at its current rate of one each
    month through March 2004, when deliveries will change to
    quarterly. Under the new schedule, Midwest will acquire the 25
    717s it has ordered by October 2006. Midwest Connect will defer
    its acquisition of 20 Embraer regional jets from January 2004
    to July 2006, during which time the availability of long-term
    aircraft financing is expected to improve.

These initiatives -- along with numerous internal cost-reduction
measures implemented since September 11, 2001 -- are targeted to
save the company approximately $70 million annually going forward.

In return for their contributions to the company's restructuring
efforts, lessors/lenders and employees will receive equity in the
company, allowing them the right to purchase stock at a pre-set
price over a 10-year period. Shareholders must approve the equity
participation plan, which provides the lessors/lender and employee
groups each 10% of the overall shares of stock.

With these restructuring objectives achieved out of court, Midwest
Express Holdings is now in a better position to approach capital
markets to obtain new financing, according to Timothy E. Hoeksema,
chairman and chief executive officer. "Our successful cost
restructuring and five-year business plan clearly demonstrate we
can return to profitability, and I believe our efforts to date
will be well received."

A critical part of the company's plans is a proposal currently
under consideration by the Milwaukee and Racine county boards that
would permit Milwaukee County to become the guarantor of payments
by Midwest Airlines on two industrial development revenue bonds
that were issued by the City of Milwaukee to fund construction of
two aircraft hangars on county-owned property.

Hoeksema pointed out that Midwest Airlines also continues to
aggressively pursue new revenue opportunities, including:

-- Replacing its existing fleet of DC-9s with new Boeing 717s. The
    717s, which seat 88 passengers in the airline's two-by-two
    Signature Service configuration, offer significantly lower
    operating costs in terms of fuel efficiency, utilization and
    maintenance.

-- Launching new low-fare Saver Service beginning in August. The
    new service is expected to enhance the airline's competitive
    position by serving a segment of the market that is growing
    more rapidly than the business travel market, expanding to
    destinations that have not been economically viable to serve
    with the premium product, and serving some existing
    destinations more cost efficiently.

-- Joining with Milwaukee-based The Mark Travel Corporation to
    offer new opportunities and value to leisure travelers. Midwest
    has named Mark Travel to operate its leisure vacation program,
    Midwest Vacations, starting in 2004. In addition, Midwest
    Airlines will provide Funjet Vacations -- the flagship brand of
    Mark Travel -- with aircraft capacity on some of Funjet's most
    popular routes, including Milwaukee-Las Vegas, Milwaukee-Puerto
    Vallarta and San Antonio-Las Vegas.

-- Significantly expanding its charter services, including
    contracts to provide team travel for various professional
    sports teams. The airline recently signed new contracts with
    the Atlanta Hawks and Atlanta Thrashers, and re-signed a
    contract with the Milwaukee Bucks for a total of nine
    professional sports teams as charter clients.

Being able to successfully restructure out of court is a
meaningful achievement, and one that wouldn't have been successful
without the support of the company's employees and the community,
and the cooperation of its lenders and lessors, according to
4Hoeksema.

He promised passengers they will continue to receive the excellent
customer service that earned Midwest Airlines its customer-
pleasing reputation. "Midwest Airlines and Midwest Connect will
continue to provide customers with the outstanding service they
expect from us. As always, customer safety will be our number one
priority, with maintenance and service remaining at the highest
level."

Midwest Airlines features nonstop jet service to major
destinations throughout the United States. Skyway Airlines, Inc. -
- its wholly owned subsidiary -- operates Midwest Connect, which
offers connections to Midwest Airlines as well as point-to-point
service between select markets on regional jet and turboprop
aircraft. Together, the airlines offer service to 51 cities. More
information is available at http://www.midwestairlines.com


MILACRON INC: Will Step Up Restructuring & Cost Cutting Measures
----------------------------------------------------------------
Citing intensified pricing pressure in both North American and
European markets for plastics equipment and supplies, Milacron
Inc. (NYSE:MZ) said it expects to report a pre-tax operating loss
from continuing operations of approximately $10 million in the
second quarter, about $3 million more than previously anticipated.

Boosted by successful efforts at the National Plastics Exposition
(NPE-2003) held in Chicago during the last week of June, new
orders came in slightly higher than expected, albeit too late for
shipment in the quarter. On the other hand, extremely competitive
conditions, primarily caused by low capacity utilization rates
throughout most of the plastics processing industries, continued
to hurt profitability in all three of Milacron's plastics
segments: Machinery Technologies-North America, Machinery
Technologies-Europe and Mold Technologies. Sales and earnings came
in on target, however, in the company's fourth segment, Industrial
Fluids.

"In the near term, we do not anticipate significant increases in
plastics processing production rates and, as a result, we expect
competitive pressures to continue," said Ronald D. Brown,
Milacron's chairman and chief executive officer. "Nonetheless, we
remain committed to returning to profitability by year-end.
Accordingly we must take the necessary actions to reduce costs and
resize our businesses to match current market conditions. We will
announce specific actions in two weeks' time when we report second
quarter results," he said, "and we will address the implications
for the outlook for the rest of the year at that time."

Milacron is scheduled to release its second-quarter results on
July 29, 2003.

First incorporated in 1884, Milacron (S&P, B+ Corporate Credit
Rating, Negative) is a leading global supplier of plastics-
processing technologies and industrial fluids, with 4,000
employees and major manufacturing facilities in North America,
Europe and Asia. For further information, visit
http://www.milacron.com


MILACRON INC: Weak End-Markets Prompt S&P to Cut Rating to B-
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Milacron
Inc. to 'B-' from 'B+'. The outlook is negative. At the same time,
Standard & Poor's lowered the ratings on the company's $75 million
senior secured bank facility to 'B-' from 'B+' and on the senior
unsecured debt to 'CCC+', from 'B'.

"The downgrades reflect the Cincinnati, Ohio-based company's
announcement that ongoing weakness in the end-markets is
continuing and that no significant improvements are expected,
heightening concerns over Milacron's prospective earnings, cash
generation, and range of financing alternatives, given at least
$115 million in debt maturities in March 2004," said Standard &
Poor's credit analyst Robert Schulz.

Milacron is the leader in the plastics machinery sector.

Milacron said it remains committed to returning to profitability
by year-end despite weak end-market conditions and will be
announcing actions to reduce costs and resize businesses to match
current market conditions when it reports second quarter results
on July 29, 2003.

The company is continuing to review alternatives to refinance its
$115 million in debt maturities in March 2004, but the outlook for
performance during the remainder of 2003 is likely to constrain
the range of available alternatives.

Milacron is mostly No. 1 in North America and No. 2 or No. 3 in
Europe and Asia for injection molding, blow molding, extrusion,
and mold bases, and also sells metalworking fluids, a more stable
and solidly profitable sector. Milacron's profitability has
declined materially.


MIRANT CORP: S&P Drops Rating on TIERS Fixed Rate Certs. to D
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on TIERS
Fixed Rate Certificates Trust Series 2001-14's certificates (TIERS
2001-14).

At the same time, the rating is removed from CreditWatch with
developing implications where it was placed June 4, 2003.

TIERS 2001-14 is a synthetic transaction, and its rating is weak-
linked to the rating on its underlying collateral, the senior
unsecured debt issued by Mirant Corp. This downgrade follows the
lowering of the rating on Mirant Corp.'s senior unsecured debt to
'D' on July 15, 2003.

The bankruptcy filing by Mirant Corp., constitutes a term assets
credit event under the trust agreement. As such, the call rights
buyer, Citibank N.A., is obligated to pay to the trustee an amount
equal to the present value of the remaining semiannual periodic
payments it is obligated to make to the trustee under the call
rights agreement and the related call rights agreement will
terminate. This call right payment will be made to the trustee,
U.S. Bank Trust N.A., in the amount of $45.95 per $1,000 of the
TIERS 2001-14 certificates. Additionally, TIERS 2001-14
certificateholders may opt to receive a pro rata share of the
underlying assets.

                          RATING LOWERED

         TIERS Fixed Rate Certificates Trust Series 2001-14
         $400 million fixed-rate trust certs series MIR 2001-14

                                 Rating
                Class    To                 From
                Certs    D                  CC/Watch Dev


MITEC TELECOM: Completes CDN$1.5MM Sale of Thailand Subsidiary
--------------------------------------------------------------
Mitec Telecom Inc. (TSX: MTM), a leading designer and provider of
wireless network products for the telecommunications industry,
announced that it has concluded the sale of Microwave Technology
Company (MTC), its subsidiary in Thailand, to the Thai management
team. The purchase price, as noted when the sale was first
announced on April 23, 2003, was CDN$1.5 million, of which
CDN$750,000 was paid upon closing. The cash will be used to reduce
Mitec's term debt.

"The sale of this non-core asset allows us to strengthen our
financial situation and consolidate our Asian initiatives in
Suzhou, China," said Rajiv Pancholy, Mitec's President and CEO.
"Our ambitious restructuring plan, launched last August, is now
entering its final stages. Mitec is emerging as a leaner,
revitalized and more focused operation."

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 and
China.

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.


MOONEY AEROSPACE: Taps PMR and Associates as PR Consultants
-----------------------------------------------------------
Mooney Aerospace Group, Ltd (OTCBB:MASG), a leading manufacturer
of high performance single engine piston aircraft, is commencing
an initiative to increase exposure and communications with
existing and potential shareholders. To support this initiative,
the company has retained the investor relations firm of PMR and
Associates, LLC of San Diego, California.

As one of the first of a series of steps designed to increase the
flow of information to current and potential investors, Mooney has
redesigned its Web site specifically for the investment community
to learn more about Mooney. The site features Information about
our products, management, and background of the Company. The site
also includes all of Mooney's news releases and SEC filings.

To further enhance communications, Mooney, along with PMR and
Associates, intends to begin distributing regular corporate
updates. J. Nelson Happy, President of Mooney Aerospace Group,
Ltd: commented, "Our goal is to ensure that current and future
investors have a clear channel of communication. We appreciate our
investors' loyalty and support and want to give them a consistent
update. Mooney is entering a very exciting phase in its
development and we feel it's critical to make it easy for our
investors to remain informed. Mooney encourages any interested
parties to visit the newly launched site."

Patrick Rost, President of PMR, commented, "I am extremely excited
about working with the management of Mooney Aerospace Group to
assist them with enhancing shareholder value. The Mooney plane has
an incredible history of producing over 10,000 planes in its fifty
years. With the recently announced infusion of capital and
financial restructuring Mooney is poised to accelerate its growth
in 2003."

Mooney Aerospace Group, Ltd. is a general aviation holding company
that owns Mooney Airplane Co., located in Kerrville, Texas. Mooney
currently sells three models; the highest performing four-place
single engine piston powered aircraft, the Bravo DX, and its
companions, the highly rated Ovation2 DX, and the economical
Ovation. Mooney is celebrating its 50th Anniversary in Kerrville,
Texas this year, where it has manufactured more than 10,000
aircraft that have been delivered worldwide. Complete information
about Mooney aircraft is available at http://www.Mooney.com

PMR and Associates, LLC provides consulting services to private
and public companies in areas ranging from corporate finance,
acquisitions, business development and investor relations, and
helps publicly traded companies increase investor awareness and
achieve better shareholder relations. Under the leadership of
Patrick M. Rost, PMR and Associates has developed a strong track
record in creating shareholder value for numerous NASDAQ and OTC
clients by integrating a broad range of services into the
corporate strategy of its clients.

Rost is a graduate of the Catholic University of America, Columbus
School of Law in Washington, D.C., and the Notre Dame London Law
Centre, Concannon School of International Law and Finance. He has
previously served on the board of directors of several
organizations, including the American Liver Foundation (San Diego
Chapter) and the Scripps Memorial Hospital Steven's Cancer Center
Annual Fund Raising Event. After working with one of the top law
firms in the country, Rost joined a holding company as the
Director of Legal Affairs and Business Development. He played a
major role in several acquisitions and initiated business
development resulting in revenue growth from $15 million to $75
million before he began his own firm.

As reported in Troubled Company Reporter's June 19, 2003 edition,
Mooney Aerospace Group reached agreement and implemented a
restructuring plan with all of its convertible note holders to
waive all outstanding defaults and set fixed note conversion
prices. The floating conversion features have been removed. In
connection with the restructuring, the Company has received more
than $5,000,000 of new funding.


NAPSTER: Bertelsmann Want Copyright Infringement Suits Dismissed
----------------------------------------------------------------
Bertelsmann AG and its U.S. subsidiaries Bertelsmann, Inc. and
BeMusic, Inc., moved in New York federal court for dismissal of
three copyright infringement actions relating to funding provided
to Napster in 2000 and 2001 to help transform it into a licensed
file-sharing service, charging that the lawsuits reflect
groundless and cynical efforts by music publishers and major
record labels to seek recovery from Bertelsmann's "deep pockets"
for Napster's alleged wrongdoings.

In its filing, Bertelsmann cites settled law and recent court
opinions to counter allegations by UMG Recordings, Inc., EMI-owned
record labels and Music Publishers that its entities were
"vicarious" and "contributory" infringers, emphasizing that U.S.
copyright law does not permit recovery from a third- party lender
for damages the plaintiffs failed to recover from Napster.

             "Discredited" Theory Already Rejected
                 by Judge Patel in Napster Case

Bertelsmann points out that no court has ever held that merely
providing funding to an accused infringer exposes the funder to
copyright infringement liability, and that entertaining such a
"groundless and discredited" theory would upset capital markets by
potentially expanding the reach of the copyright laws to actors
far removed from the actual infringers.

Specifically, Bertelsmann notes that Chief Judge Marilyn H. Patel
of the Northern District of California had already squarely
rejected the theory on which plaintiffs rely here -- that
Bertelsmann became indirectly liable for infringements by
Napster's users by providing a financial "lifeline" that prolonged
the file-sharing service's existence. In dismissing similar
infringement claims against venture capital firm Hummer Winblad,
an investor and controlling shareholder in Napster, Judge Patel
held that such an attenuated, "tertiary" theory of indirect
copyright infringement was "objective[ly] unreasonable" and
unsupported by existing copyright law. Bertelsmann argues that the
plaintiffs cannot escape the same result through forum-shopping.

           Plaintiffs Cannot Meet Elements of Vicarious
                   or Contributory Liability

Bertelsmann stated that its motion for dismissal was supported by
the fact that plaintiffs have not attempted and could not in good
faith attempt to provide evidence to prove the necessary elements
of "vicarious" or "contributory" infringement:

* That Bertelsmann had the right and ability not only to control
   Napster's activities but also to supervise or control the
   allegedly infringing activities of Napster's users;

* That Bertelsmann derived a direct financial benefit from those
   allegedly infringing activities; or

* That Bertelsmann substantially and knowingly participated in the
   alleged directly-infringing conduct of Napster's users.

The Bertelsmann motion also makes note of the fact that Napster's
legal status was still in question at the time of the loan. The
Court of Appeals for the Ninth Circuit had stayed a preliminary
injunction against the file- sharing service on the grounds that
there existed "substantial questions of first impression" as to
the "merits" of the infringement claims asserted by copyright
owners.

Bertelsmann notes as well that it could not have profited -- and
in fact did not profit -- directly or indirectly from any
copyright infringement that the pre-existing Napster service might
have been adjudicated to have committed, because the loan note was
convertible into a controlling equity stake only if and when
Napster achieved formal "acceptance" by the music industry at
large of a new, subscription-based business model. Bertelsmann in
fact lost all the loan funding it provided when Napster went into
bankruptcy in 2002.

           Bertelsmann's Actions Were Aimed at Benefiting
                     The Entire Music Industry

Bertelsmann points out that far from deliberately prolonging the
alleged massive infringement of copyrighted works, the $60 million
it loaned to Napster prior to its July 2001 shutdown was
specifically earmarked for the creation of a fully licensed file-
sharing service in which all the major record labels and music
publishers were invited to participate.

In fact, plaintiffs' failure to state viable claims against
Bertelsmann is especially ironic since the undisputed purpose of
its loan, to convert Napster to a fully-licensed subscription
service, was recognized by record industry representatives as a
productive step in the right direction, and one plaintiff is
actually pursuing a similar vision with the Napster brand. UMG
Recordings recently sold the "Pressplay" service to Roxio and
acquired equity in a Napster-branded subscription service designed
to achieve the same result that Bertelsmann sought to achieve
almost three years ago.


NATIONAL STEEL: Wants Sanction to Nix Certain Retiree Benefits
--------------------------------------------------------------
National Steel Corporation and its debtor-affiliates seek the
Court's authority to terminate retiree health benefits not covered
by a collective bargaining agreement, pursuant to a settlement
with the Official Committee of Retired Employees.

Timothy R. Pohl, Esq., at Skadden, Arps, Slate, Meagher & Flom,
at Chicago, Illinois, tells the Court that because the Debtors
have ceased their business operations and have no source of cash
to continue paying the costs associated with the Retiree Plans,
benefit obligations must be reduced.  Mr. Pohl explains that the
only realistic choice is to terminate these Retiree Plans and
retain the proceeds from the sale of their assets for the pro
rata benefit of all creditors, including Retirees.  The Debtors
believe that the termination of the Retiree Benefits is their
only option to confirm their Liquidating Plan and avoid conversion
to Chapter 7 liquidation.  The Debtors also represent that the
termination of the Retiree Benefits and approval of the Settlement
Agreement with the Retirees' Committee provide the estate with a
better opportunity to afford fair and equitable treatment to all
the affected parties.

Rule 9019 of the Federal Rules of Bankruptcy Procedure provides
that the Court may authorize the Debtors and the Retiree Committee
to enter into the Settlement Agreement.  The Debtors assert that
the termination of the Retiree Plans will allow the Debtors to
cease the continued accrual of postpetition administrative expense
claims.  The Retiree Committee represents 7,000 retired employees
not covered by collective bargaining agreements.

Mr. Pohl relates that the Debtors employed 8,229 people as of
December 31, 2002.  The Debtors had labor agreements with the
United Steelworkers of America, the International Chemical Workers
Council of the United Food and Commercial Workers and other labor
organizations, which collectively represented 83% of the Debtors'
employees.  Moreover, the Debtors have over 23,000 former
employees.  Healthcare and other obligations to these retirees
were a significant cost of operations.  According to Mr. Pohl, the
Debtors have negotiated with the USWA regarding the termination or
retiree benefits for their constituents.

                    Debtors' Retiree Plans

In the ordinary course of their business, the Debtors provide
"retiree benefits" as defined by Section 1114(a) of the Bankruptcy
Code under six employee benefit plans, policies and arrangements.
In general, these Retiree Plans provide hospital and medical
benefits to salaried employees, eligible pensioners, and surviving
spouses.

The Debtors estimate that the Retiree Benefits cost $29,500,000
in 2002 and will increase to $35,380,000 in 2003.  As of December
31, 2002, the Debtors' actual obligations under generally accepted
accounting principles for all future retiree welfare benefits
reached $300,000,000.  Moreover, each month that the Retiree Plans
remain existing, it costs the Debtors $2,900,000.

The Retiree Committee represents the Retirees with respect to
these six retiree plans of the Debtors:

     (a) Pellet Plan -- Pellet Business Division's Health Insurance
         Plan for Salaried Employees: Active Salaried Non-
         Represented;

     (b) Mines Plan -- National Mines Corporation's Program of
         Hospital, Physician's Services and Major Medical Expense
         Benefits for Eligible Pensioners and Surviving Spouses and
         Comprehensive Health Care, Dental and Vision Benefits;

     (c) Steel Plan 1 -- National Steel Corporation's Program of
         Hospital-Medical Benefits and Major Medical Expense
         Benefits for Eligible Pensioners and Surviving Spouses;

     (d) Steel Plan 2 -- National Steel Corporation's Salaried
         Comprehensive Health Care Plan for Eligible Pensioners and
         Surviving Spouses;

     (e) Steel Plan 3 -- National Steel Corporation's Program of
         Hospital-Medical Benefits and Major Medical Expense
         Benefits for Eligible Pensioners and Surviving Spouses;
         and

     (f) Steel Plan 4 -- National Steel Corporation's Program of
         Hospital, Physician's Services and Major Medical Expenses
         for Eligible Pensioners and Surviving Spouses.

The number of Retirees under the Plans is:

                                              Approximate Number
                    Retiree                    of Covered Lives
                    -------                   ------------------
     Pellet Plan Retirees (under age 65)              12
     Pellet Plan Retirees (over age 65)              124
     Mines Plan Retirees (under age 65)               20
     Mines Plan Retirees (over age 65)                77
     Steel Plan Retirees (under age 65)              558
     Steel Plan Retirees (over age 65)             6,277
                                              ------------------
               Total                               7,078

              Debtors' Proposal to the Retiree Committee

On May 29, 2003, the Debtors sent a letter to the Retiree
Committee explaining the Committee's ability to retain counsel.
The Debtors offered to host a meeting at their counsel's offices
on June 5, 2003 to make a short presentation regarding their
Chapter 11 cases and the Retiree Plans.

The Debtors initiated a teleconference with the Retiree
Committee's counsel on June 4, 2003.  The Debtors' counsel
provided information about National Steel's bankruptcy case and
reviewed and discussed the Liquidating Plan with the Retiree
Committee.  The Debtors, then, provided and described the various
Retiree Plans and the number of employees covered.  Subsequent to
this teleconference, the parties had numerous discussions
regarding the Retiree Plans, the Debtors' proposed liquidation
timeline and the Debtors' ability to provide Retiree Benefits in
the future.

The Debtors sent a letter dated June 16, 2003 to the Retiree
Committee in its capacity as the authorized representative
proposing to terminate the Retiree Plans.  The Debtors based the
Initial Proposal on their cash on hand, current and projected
wind-down expenses, current and projected retiree expenses,
estimated COBRA -- Consolidated Omnibus Budget Reconciliation Act
of 1985 -- rates, their general unsecured claims base and
projected distributions under the Liquidating Plan.

The Initial Proposal also enclosed relevant information for the
evaluation of the proposal:

     * The Sale Order,
     * The most recent Form 10-K, and
     * The most recent Monthly Operating Statement.

The Debtors originally sought to terminate the Retiree Benefits
on June 30, 2003, however, due to the complex nature of the
negotiation process, the parties did not believe that an agreement
would be reached by that date.  Accordingly, by letter dated June
18, 2003, the Retiree Committee asked National Steel to continue
funding benefits during negotiations.  On June 23, 2003, the
Debtors sent a letter to the Retiree Committee extending the
Retiree Benefits until July 15, 2003.

As a result of further discussions between the parties, the
Debtors agreed to modify the Initial Proposal.  On June 24, 2003,
the parties began drafting a settlement agreement and agreed on a
consensual termination of the Retiree Benefits.  The Settlement
was finalized on July 9, 2003.

The salient provisions of the Settlement Agreement are:

     (a) The Debtors will continue the Retiree Benefits until
         July 31, 2003;

     (b) The Debtors will offer COBRA continuation coverage for
         Retirees under the Retiree Plans -- Cobra Option A -- from
         August 1, 2003 through and including October 31, 2003;

     (c) The Debtors will offer medical benefit continuation
         coverage for Retirees -- COBRA Option B -- from and after
         August 1, 2003.  Effective October 31, 2003, the Debtors
         will transfer the Retiree Committee Plan and the National
         Voluntary Employee Beneficiary Association -- VEBA --
         Trust to the National Steel Retiree Association, which is
         a non-profit employee association established to continue
         sponsorship of the Retiree Committee Plan for purposes of
         continuing health coverage under this COBRA Option;

     (d) The Debtors and the Retiree Committee have agreed to
         exchange educational materials and conduct a series of
         meetings with Retirees to educate them regarding their
         options;

     (e) The Debtors will not have any liability arising from the
         Retiree Committee Plan, the VEBA Trust, or the exercise of
         their duties under Section 1114 and the Settlement
         Agreement, except for willful misconduct or gross
         negligence.  The Debtors' actions with respect to the
         COBRA Options are intended to satisfy their obligations
         under Section 4980B of the Internal Revenue Code and
         Section 601 of ERISA from and after the date the
         arrangement is adopted.  The COBRA Option B beneficiaries
         will be eligible for the Health Coverage Tax Credit
         established by the Trade Act of 2002; and

     (f) The Retiree Committee, the Association and related
         entities will not have any liability arising from COBRA
         Option A, or any action in connection with the exercise of
         their duties under Section 1114 and the Settlement
         Agreement, except for willful misconduct or gross
         negligence.

The Debtors assure the Court that they are aware of the hardship
that may be brought by the Plan termination to the Retirees.  The
Debtors intend to lessen the impact by working with the Retiree
Committee to provide the Retiree Committee Plan as a second
available medical coverage plan.  Offering COBRA Option B as an
employer sponsored plan addresses the Retiree Committee's concerns
about offering an alternative to COBRA Option A, which will be
available to all Retirees regardless of their state of residence
on a continuing basis.  Mr. Pohl notes that offering a choice of
alternatives permits the Retirees most in need of their current
benefit level to elect to continue it for a period of time, while
representing a more affordable option to those Retirees unable to
make the COBRA Option A payments.  In addition, Mr. Pohl
continues, the offering addresses the Retirees' desire to maintain
continuous coverage and positions the Retirees to take advantage
of the Health Coverage Tax Credit. By addressing these needs, the
Debtors and the Retire Committee have made the most of limited
resources in a difficult situation. Mr. Pohl adds. (National Steel
Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


NBTY INC: S&P Rates Planned $375-Mil. Senior Secured Debt at BB
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit and 'B+' subordinated debt ratings on vitamin manufacturer
NBTY Inc. Standard & Poor's removed the ratings from CreditWatch,
where they were placed on June 10, 2003.

At the same time, Standard & Poor's assigned is 'BB' senior
secured rating to NBTY's proposed $375 million senior secured
credit facility due 2007. The bank loan is rated the same as the
corporate credit rating because in a stressed scenario, Standard &
Poor's believes that senior lenders could expect meaningful but
less than full recovery of principal. In addition, Standard &
Poor's, upon closing of the new bank facility, will withdraw its
'BB+' senior secured ratings on the company's current $60 million
revolving credit facility due 2003, and $75 million term loan due
2005.

The outlook is negative.

Pro forma for the acquisition of Rexall Sundown Inc., total debt
would have been $431 million at March 31, 2003.

"The rating actions follow NBTY's recent announcement that it had
signed a purchase agreement to acquire Rexall from Royal Numico
N.V., for $250 million," said credit analyst Martin S. Kounitz.
"Standard & Poor's expects that the transaction will improve
NBTY's market position with its wholesale customers, but will
involve significant integration risks." Rexall's brands include
Sundown and Met-Rx, among others. Rexall product categories
include sports nutrition, diet, vitamin, and specialty items.
The transaction will be funded with bank debt.

The ratings reflect NBTY Inc.'s moderate debt leverage, its
aggressive growth strategy, and the risk of adverse publicity on
sales. These factors are somewhat mitigated by the company's
strong position and diversified distribution channels in the
vitamins, minerals, and supplements (VMS) industry. Standard &
Poor's ratings for NBTY further incorporate the integration risk
of the Rexall acquisition, which in sales terms is larger than
NBTY's wholesale division. The ratings also incorporate the need
to rebuild Rexall's business and expected cost savings from the
combination of the two businesses. The ratings assume that NBTY
will not make large debt-financed acquisitions in the intermediate
term, but will apply free cash flow to reduce debt.

Key to the success of this acquisition will be NBTY's ability to
integrate Rexall's manufacturing and marketing functions, to
retain customers, and to obtain expected results while reducing
overall advertising expenses. Rexall represents the largest
acquisition NBTY has undertaken. Somewhat mitigating these issues
is the significant number of customers the two companies have in
common, their similar information technology systems, and NBTY's
experience in making prior acquisitions.

NBTY is a vertically integrated VMS manufacturer and marketer,
with a strong retail presence in the U.K. The company's vertical
integration and ability to produce low-cost products provide an
advantage by enabling NBTY to price its products competitively.


NORTHWEST AIRLINES: Second Quarter 2003 Results Show Improvement
----------------------------------------------------------------
Northwest Airlines Corporation (Nasdaq: NWAC), the parent of
Northwest Airlines, reported a second quarter net profit of $227
million or $2.45 per diluted common share. This compares to a
second quarter 2002 net loss of $93 million or $1.08 per common
share.

Northwest's second quarter 2003 results included $387 million of
unusual items:

      - A $209 million reimbursement of security fees received from
        the U.S. government under the Emergency Wartime
        Supplemental Appropriations Act;

      - A $199 million gain resulting from the sale of Northwest's
        interest in Worldspan; and

      - A $21 million charge related to the write-down of certain
        aircraft.

Excluding these unusual items, Northwest reported a second quarter
2003 net loss of $160 million or $1.86 per common share.

"Second quarter results were impacted by the war in Iraq and SARS
(Severe Acute Respiratory Syndrome).  Moreover, we are still not
seeing meaningful improvement in the underlying financial
performance of the airline," said Richard Anderson, chief
executive officer.

"Excluding the unusual gains resulting from the sale of our
Worldspan investment and the one-time federal reimbursement
received under the Wartime Act, Northwest's $160 million loss was
its worst second quarter performance in company history," Anderson
continued.

Anderson added, "While we aggressively reduced capacity and parked
aircraft in response to the Iraq war and SARS, the revenue
environment, at best, is showing marginal improvement.  Clearly,
with losses of the magnitude that we are experiencing, our top
priority remains to bring the company's costs in line with our new
level of revenues.  We continue to work with our labor union
leaders and our suppliers to address our cost of operation, as
Northwest must align its cost structure with its revenue
expectations and with those of our major competitors."

                    Operating Results

For the June 2003 quarter, Northwest reported a $73 million
operating loss, which compares to last year's second quarter $46
million operating loss.

Second quarter 2003 operating revenues of $2.3 billion were 4.5%
lower than reported in the second quarter of 2002 on 9.1% fewer
available seat miles.

Operating expenses decreased 3.3%, primarily as a result of the
lower capacity and cost reductions achieved.  Second quarter 2003
unit costs, excluding fuel and unusual items, increased by 3.3%
year-over-year.

During the quarter, fuel price averaged 80 cents per gallon, which
was 16.6% higher than in the second quarter of last year.

Northwest's quarter-end unrestricted cash balance was $2.8
billion, which includes the one-time $209 million payment received
from the government, $278 million from the sale of Worldspan, and
$150 million from the issuance of additional debt in the form of
convertible notes.

"While our cash position remains strong at this time, it has been
achieved primarily through borrowings, asset sales and the one-
time government payment rather than generated by profits from
operations," said Bernie Han, chief financial officer.

                         Other Activity

In June, travelers began enjoying the benefits of the marketing
agreement between Northwest and Delta Air Lines. The two carriers,
along with Northwest's current partner, Continental Airlines,
expanded frequent flyer program options and announced codeshare
service.

On July 2, Delta and Northwest began placing their codes on each
other's flights from Memphis and Salt Lake City.  Also, Delta
customers began purchasing seats under the Delta code on
Northwest-operated flights from New York (Kennedy), San Francisco
and Seattle/Tacoma to Tokyo, Japan.

"Our customers now have the opportunity to earn WorldPerks
frequent flyer miles while traveling on three major U.S. carriers
-- Northwest, Continental and Delta.  In addition, elite members
of Continental, Delta and Northwest's frequent flyer programs can
now enjoy their benefits on the three airlines, including early
flight boarding, elite check-in and elite mileage qualification,"
said Doug Steenland, president.

Last week, Northwest WorldPerks members gained the ability to
redeem frequent flyer miles for itineraries that include the
combination of any Continental, Delta, and Northwest-operated
flights, by using just one award to travel to any of 374
destinations worldwide.

"During the quarter, Northwest expanded its comprehensive self-
service check-in program to every destination it serves
worldwide," Steenland added. In May, Northwest implemented
"interline" electronic ticketing with its partner KLM, making it
possible for customers to use a single e-ticket when flying on
both airlines, and opening up the remainder of its European
network to self-service check-in.

"We also expanded Internet check-in service to 11 Northwest Web
sites in Asia, with translations into four languages, services not
offered by any other airline," he continued.

In addition, during June, a majority of eligible customers used
Northwest's convenient self-service check-in options to obtain
their boarding pass, at either nwa.com or through one of 655
kiosks in 155 airports, more locations than any other airline.

Northwest Airlines is the world's fourth largest airline with hubs
at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam,
and approximately 1,500 daily departures. With its travel
partners, Northwest serves nearly 750 cities in almost 120
countries on six continents.

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

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


PAYLESS SHOESOURCE: $200-Million Sr. Sub. Notes Get B+ Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit rating on Payless ShoeSource Inc. and its 'BB' senior
unsecured bank loan rating on its wholly owned subsidiary, Payless
ShoeSource Finance Inc.

At the same time, Standard & Poor's assigned its 'B+' subordinated
debt rating to Payless' proposed $200 million senior subordinated
notes due 2013. The notes will be issued under Rule 144A with
registration rights. Proceeds will be used to repay all existing
indebtedness under the term loan portion of the company's credit
facility.

The outlook is stable. As of May 3, 2003, Payless had about $240
million of debt outstanding.

"The ratings reflect Payless' participation in the intensely
competitive and highly fragmented footwear retail industry, weak
operating performance, and deteriorating credit protection
measures," said credit analyst Ana Lai. These risks are mitigated
in part by the company's solid market position as the largest
specialty footwear retailer in North America, significant
economies of scale in distribution and sourcing, and good cash
flow generation capability.

Payless faces increased competition from mass discounters such as
Wal-Mart Stores Inc. and Target Corp. who have been expanding
their store base at a faster pace and gaining market share from
Payless. Still Topeka, Kansas-based Payless remains the largest
specialty footwear retailer with more than 5,000 retail locations
and with a market share of over 10% in terms of pairs of shoes
sold in the U.S.

Liquidity is adequately provided by cash flow from operations and
availability under its recently amended $150 million revolving
credit facility. As of July 15, 2003, no amounts were drawn
against the revolving line of credit. The availability under the
revolving facility has been reduced, however, by $13.4 million in
outstanding letters of credit.

The refinancing of the term loan with proceeds from the proposed
subordinate notes offering will improve Payless' financial
flexibility by extending debt maturities. The current term loan
requires debt repayment of about $66 million remaining in 2003.
Cash flow from operations and availability under its revolving
credit facility should be sufficient to fund seasonal working
capital needs.


PG&E NAT'L: USGen Allowed to Maintain Existing Bank Accounts
------------------------------------------------------------
Pursuant to the U.S. Trustee's operating guidelines for debtors-
in-possession, USGen, an affiliate of PG&E National Energy Group
Inc., is required to, among other things:

     (i) close all existing bank accounts and open new debtor-in-
         possession bank accounts;

    (ii) establish one debtor in possession account for all estate
         funds required for the payment of taxes, including payroll
         taxes;

   (iii) maintain a separate debtor in possession account for cash
         collateral;

    (iv) issue postpetition payments by check only; and

     (v) obtain checks for all debtor in possession accounts which
         bear the designation "Debtor in Possession" along with the
         bankruptcy case number.

These account-closing and related requirements of the U.S. Trustee
Guidelines are designed to provide a clear line of demarcation
between prepetition and postpetition transactions and operations
and to prevent the inadvertent postpetition payment of prepetition
claims.

However, John Lucian, Esq., at Blank Rome LLP, at Baltimore,
Maryland, asserts that requiring USGen to substitute new debtor-
in-possession accounts for its original bank account would cause
delays and confusion.  Mr. Lucian points that this substitution
would hinder the relief afforded by the Court's approval of the
continuation of the intercompany accounting and cash management
procedures and would inevitably lead to the disruption of the
Debtor's business.

USGen has one Bank Account -- a collection and disbursement
account maintained with Mellon Bank -- which serves as its
operating account.  USGen's receipts are deposited into its Bank
Account and its checks and electronic funds transfers are debited
from the same account.  Generally, excess funds are deposited
into high quality overnight money market funds and other short-
term investments, subject to USGen's investment policy.  Other
than the investment account, USGen's Bank Account is the only
account in its Cash Management System.

Through use of this Bank Account, Mr. Lucian says, substantial
efficiency and economical cash management is achieved with respect
to the Debtor's day-to-day funding.  USGen previously received
funds into its Bank Account from these primary sources:

     * Monthly sales of power to PG&E Energy Trading - Power, LP;

     * Standard offer receipts;

     * Power sales agreements;

     * Periodic inflows from hedging activity; and

     * Other miscellaneous sources like interest income and other
       miscellaneous reimbursements.

The primary disbursements made from the USGen Account are:

     (a) Fuel purchases, including coal, oil, natural gas and fuel
         transportation expenses;

     (b) Payments due under power purchase agreements to third-
         party power producers;

     (c) Cash payments to vendors respecting the operation of the
         generating facilities;

     (d) Matured hedges for different types of commodities and
         fuel;

     (e) Reimbursements to affiliates for expenses incurred on
         behalf of USGen;

     (f) Property taxes;

     (g) Periodic income taxes;

     (h) Interest and other bank related fees;

     (i) Lease payments under the Bear Swamp lease;

     (j) Payments to FERC and for other regulatory licenses; and

     (k) Other miscellaneous payments incurred with operating the 7
         Facilities such as payments to vendors for capital
         expenditures.

The only other account maintained by USGen is an investment
account maintained with Dreyfus Funds.  USGen has a $3,000,000
target balance for its Bank Account at Mellon Bank to satisfy
immediate cash needs and pay day-to-day operating expenses.  Any
excess funds at the close of business each day are deposited into
the Investment Account.

To protect against the possible inadvertent payment of prepetition
claims, USGen proposes to advise Mellon Bank not to honor checks
issued prepetition, except as may be otherwise ordered by the
Court.  Moreover, USGen has instituted internal cut-off procedures
to draw the necessary distinctions between prepetition and
postpetition obligations and payments without the need to close
its Accounts.

Mr. Lucian tells the Court that by preserving business continuity
and avoiding the operational and administrative complications
that closing USGen's Accounts and opening new ones would
necessarily entail, all parties-in-interest will be best served
and the Debtor will benefit considerably.

On an interim basis, Judge Mannes allows USGen to continue using
its existing bank account.  USGen is also authorized to open or
close bank accounts as it deems necessary in maintaining the Cash
Management System, or as required under further Court order.
Every bank at which a Debtor Account is maintained is authorized
to continue servicing and administering such Accounts as debtors-
in-possession accounts without interruption and in the usual and
ordinary course.  The banks are also directed to receive, process,
honor and pay any and all checks and drafts drawn on, and
electronic transfer requests made on, those Accounts on or after
the Petition Date.

USGen is also allowed to make disbursements from its Accounts
other than by check.  The U.S. Trustee Guidelines require all
disbursements from the estate to be made by check.

But in the ordinary course of its business, USGen conducts most
transactions by electronic fund transfer.  Many of its contract
counterparties, therefore, expect and rely on these non-paper
transfers to facilitate its own cash management systems.  Mr.
Lucian asserts that requiring USGen to cease all these transfers
would cause unnecessary disruptions of its business relationships
and create significant additional processing costs for its
bankruptcy estate. (PG&E National Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


PORTLAND GENERAL: Parent Enron Continues Sale Process
-----------------------------------------------------
On July 11, 2003, Enron Corp. and its debtor-in-possession
subsidiaries filed their proposed joint Chapter 11 plan and
related disclosure statement with the U.S. Bankruptcy Court for
the Southern District of New York. The Plan and Disclosure
Statement provide information about the assets that are in the
bankruptcy estate and how the value of those assets will be
distributed to the creditors. Portland General Electric Company is
not one of the Debtors. However, the common stock of PGE held by
Enron is part of the bankruptcy estate. Enron is continuing the
sale process for PGE. If PGE is not sold, under the Plan, the
shares of PGE's common stock will be distributed over time to the
Debtors' creditors.

The above description is a brief summary of information about PGE
contained in the Plan and the Disclosure Statement, both of which
are available at Enron's Web site located at
http://www.enron.com/corp/porand the Bankruptcy Court's website
located at http://www.nysb.uscourts.gov


RANGE RESOURCES: S&P Rates Proposed $100 Million Sr Notes at B-
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' rating to
independent petroleum company Range Resources Corp.'s proposed
$100 million senior subordinated notes due in 2013. Range is
engaged in the acquisition, exploration, development, and
production of crude oil and natural gas. The outlook on the
company is stable.

Texas-based Range currently has $358 million of long-term debt and
trust-preferred securities outstanding.

"Proceeds from the notes will be used to repay the remaining $68.8
million of Range's 8.75% subordinated notes that mature in 2007,"
said Standard & Poor's credit analyst Scott A. Beicke. "The
balance will be used for financing costs and to reduce debt under
the company's secured credit facility," he continued.

This note transaction will improve Range's debt profile by
extending maturities, lowering the average cost of the company's
long-term debt, and increasing the amount of availability on the
secured credit facility.

The cyclical and capital-intensive nature of the petroleum
industry contributes to Range's below-average business profile.
Furthermore, management's emphasis on debt reduction during the
past few years came at the expense of the capital program, making
it difficult for Range to replace or significantly increase
production.

Range's financial weakness stems from debt incurred through
disappointing 1997 and 1998 acquisitions. Although the company has
exchanged common stock for its fixed-income securities during the
past four years, total debt (including trust-preferred securities)
to total capital remains at roughly 65% as of March 31, 2003.

The outlook on Range's 'B+' corporate credit rating remains
stable, due to expectations that Range will continue to prudently
manage its financial profile. The company has stated that it may
pursue small, complementary acquisitions in addition to its
capital budget. Standard & Poor's expects that Range will maintain
capital spending in cash flow.


REGUS BUSINESS: Wants to Stretch Lease Decision Time to Sept. 9
---------------------------------------------------------------
Regus Business Centre Corp., and its debtor-affiliates ask for an
extension of time to make lease disposition decisions through
September 9, 2003.  This is the third extension the Debtors have
requested from the U.S. Bankruptcy Court for the Southern District
of New York.  The extension will give the Company more time to
decide whether to assume, assume and assign, or reject their
unexpired nonresidential real property leases.

The Debtors remind the Court that they are parties to some 85
Leases, which include office leases and other unexpired agreements
for use of non-residential real property. The Leases, and the
leased properties constitute the core asset of Debtors' operating
businesses and are fundamental to the successful consummation of
any plan of reorganization, the Debtors tell the Court.

One key to their reorganization strategy is the adjustment of the
amount of space leased to more closely comport with the capacity
Debtors' businesses can support.  Moreover, Debtors must be able
to continue to make efforts to renegotiate their rent obligations
under the Leases in accordance with market rates.

Moreover, the Debtors relate that they have, since the Petition
Date, been required to focus their attention on, among various
other matters, the renegotiation of the terms of many of their
Leases and numerous ongoing operational issues, including the
expedited preparation of their schedules of assets and liabilities
and statements of financial affairs.

Debtors require the extension to review their remaining Leases and
identify those that are suitable for rejection or assumption.
Moreover, the Debtors are still negotiating and documenting
business deals with landlords concerning these remaining Leases.
The Debtors must have adequate time to evaluate the economics of
the Leases in the perspective of the Bankruptcy Code to determine
whether the assumption or rejection of each of the remaining
Leases would inure to the benefit of their estates.

Regus Business Centre Corp., filed for chapter 11 protection on
January 14, 2003 (Bankr. S.D.N.Y. Case No. 03-20026). Karen Dine,
Esq., at Pillsbury Winthrop LLP represents the Debtors in their
restructuring efforts. When the Debtors filed for protection from
its creditors, it listed debts and assets of:

                                Total Assets:    Total Debts:
                                -------------    ------------
Regus Business Centre Corp.    $161,619,000     $277,559,000
Regus Business Centre BV       $157,292,000     $160,193,000
Regus PLC                      $568,383,000      $27,961,000
Stratis Business Centers Inc.      $245,000       $2,327,000


SAFETY-KLEEN: Establishing Special Account for Canadian Lenders
---------------------------------------------------------------
The Safety-Kleen Debtors, represented by Michael W. Yurkewicz,
Esq., at Skadden Arps Slate Meagher & Flom, in Wilmington,
Delaware, seek the Court's authority to:

        (i) establish a special account for the plan consideration
            that the holders of the Canadian Lender Administrative
            Claims are entitled to receive under the Plan on
            account of their administrative claims; and

       (ii) hold the Canadian Lenders' Plan Consideration in the
            Special Account pending the resolution of a dispute
            between certain of the Canadian Lenders and certain
            of the U.S. Lenders regarding the proper allocation
            of the Canadian Lenders' Plan Consideration among the
            Lenders under Section 14.7 of the Amended and Restated
            Credit Agreement, dated as of April 3, 1998.

Prior to the Petition Date, Debtor Safety-Kleen Services, Inc.,
and Safety-Kleen Ltd., a non-debtor Canadian subsidiary of Safety-
Kleen Services, entered into a certain amended and restated credit
agreement, dated as of April 3, 1998.  The Credit Agreement
established certain Canadian loan facilities, under which SK Ltd.
was the borrower and SK Services was a guarantor, and a United
States loan facility under which Safety-Kleen Services was the
borrower.

Subsequently, the Court on September 6, 2002 authorized the
restructuring and reclassification of Safety-Kleen Services'
secured obligations under the Canadian Facility in aid of
consummation of the sale of substantially all of the assets and
certain equity interests of the Debtors' Chemical Services
Division to Clean Harbors, Inc.  As a requirement to consummate
that sale, SK Services was required, under the acquisition
agreement with Clean Harbors, to satisfy certain release
conditions by restructuring the outstanding obligations of SK
Ltd. under the Canadian Facility so as to relieve SK Ltd. of its
obligations under that facility.

Under the terms of the Canadian Facility Restructuring Order, SK
Services became the primary obligor to repay the obligations under
the Canadian Facility in substitution for SK Ltd., and these
obligations were allowed as an administrative expense claim of
Safety-Kleen Services, provided that the administrative expense
claim is to be satisfied solely through a distribution to the
Canadian Lenders of the same form of consideration that is to be
distributed to the U.S. Lenders.  The Canadian Facility
Restructuring Order further directed that the consideration to be
received by the Canadian Lenders on account of such administrative
expense claim have a value equal to the amount of the outstanding
obligations owed by SK Services under the Canadian Facility.

In accordance with the terms of the Canadian Facility
Restructuring Order, Section 4.1(b) of the Debtors' Plan provides
that:

        The Canadian Lender Administrative Claims are, pursuant to
        the Assumption Order, Allowed Administrative Claims against
        SK Services in the approximate aggregate amount of U.S.
        $83.1 million (as of January 31, 2003) plus accrued
        interest at the contractual non-default rate through the
        Effective Date, which excludes any amounts with respect to
        any letter of credit posted by a Canadian Lender and
        outstanding as of the Effective Date that are replaced or
        backstopped under the Exit Facility.  On the Initial
        Distribution Date, or as soon as reasonably
        practicable thereafter, each holder of an Allowed Canadian
        Lender Administrative Claim shall receive, in full
        satisfaction, settlement, release and discharge of and in
        exchange for such Canadian Lender Administrative Claim,
        such holder's share of (i) New Common Stock, (ii) New
        Preferred Stock and (iii) New Notes; provided, however,
        that distributions made pursuant to this Section 4.1(b)
        shall be in full satisfaction, settlement and release of,
        and in exchange for, any and all Claims asserted by the
        Canadian Lenders.

The Plan defines Initial Distribution Date as "the date, occurring
as soon as reasonably practicable after the Effective Date, on
which the first distribution is made on account of Allowed Claims
in a particular Class."

Unless a Special Account is established for the Canadian Lenders'
Plan Consideration, under the terms of the Plan, the Debtors are
required to distribute New Common Stock and New Preferred Stock to
the holders of Canadian Lender Administrative Claims on the
Initial Distribution Date.

                     The Lenders' Dispute

The Debtors have been informed that certain of the Canadian
Lenders and certain of the U.S. Lenders disagree among themselves
as to the proper allocation of the Canadian Lenders' Plan
Consideration under Section 14.7 of the Credit Agreement.
Specifically, JP Morgan-Chase and Bear Stearns dispute the
applicability of Section 14.7 to their distribution under the
Plan.  The other Canadian Lenders -- The Toronto-Dominion Bank,
Goldman Sachs Credit Partners L.P., Franklin Mutual Advisers LLC,
AG Capital Funding Partners LP, GSC Recovery II, LLP, Baupost
Group Securities, LLP, and Silver Oak Capital, LLC -- all agree
that Section 14.7 applies to any distribution on the Canadian
Facility under the Credit Agreement under the Plan.

The Debtors believe that certain of the U.S. Lenders may vote
against the Plan, thereby preventing confirmation of the Plan, if
the Canadian Lenders' Plan Consideration is distributed directly
to the Canadian Lenders prior to resolution of the Dispute.
Consequently, the Debtors seek to establish the Special Account
for the Canadian Lenders' Plan Consideration, and hold the
Canadian Lenders' Plan Consideration in the Special Account
pending resolution of the Dispute between certain of the Canadian
Lenders and certain of the U.S. Lenders.

By granting the Debtors' request, confirmation of the Plan will
not be unnecessarily delayed to the detriment of the Debtors,
their estates, and their creditors.

The Debtors submit that these proposed transactions are necessary
to, and will aid implementation of, the Plan.  The Debtors further
contend that the rights of the Canadian Lenders in the Canadian
Lenders' Plan Consideration will be preserved and protected by the
Debtors' establishment of the Special Account and by holding the
Canadian Lenders' Plan Consideration in the Special Account
pending resolution of the Dispute. (Safety-Kleen Bankruptcy News,
Issue No. 60; Bankruptcy Creditors' Service, Inc., 609/392-0900)


SHILOH IND.: S&P Ups Corporate Credit & Bank Loan Ratings to B
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it raised its
corporate credit rating on Shiloh Industries Inc. to 'B' from
'CCC+'. At the same time, Standard & Poor's raised its bank loan
rating on Shiloh's $260 million secured revolving credit facility
to 'B' from 'CCC+'. The outlook is stable on the Cleveland, Ohio-
based manufacturer of steel blanks and stamped components for the
automotive industry. The company had total balance-sheet debt of
about $196 million at April 30, 2003.

"The upgrade reflects the progress Shiloh's new management team
has made during the past six quarters to stabilize the company's
operating results, improve the liquidity position, and reduce
debt," said Standard & Poor's credit analyst Nancy Messer.

Shiloh sells into highly competitive, cyclical, and seasonal
markets, since the vast majority of its customers are original
equipment manufacturers (OEM) in the automotive industry. The
company lacks geographic and customer diversity, as all of its
manufacturing capacity resides in North America and more than 50%
of its revenues are generated from the three U.S. OEMs. Shiloh's
products range from simple blanks, which are commodity in nature,
to engineered laser-welded blanks, which require a higher degree
of technological expertise.

The company expects to expand its higher-margin laser-welded
blanks segment, where Shiloh holds the largest market share,
through new business awards. Under the direction of Shiloh's new
management team, which has been in place since early 2002, the
company's growth should be organically driven.

Although it is 56%-owned by MTD Products Inc. (unrated), a private
company, Shiloh operates as a stand-alone entity.

Shiloh's financial profile is expected to improve during the next
several years, although leverage will remain high.

"We view the turnaround as a work in progress and would like to
see evidence of sustained credit-measure improvement over several
more quarters," said Ms. Messer. "We expect that Shiloh will be
able to renegotiate its revolving credit facility, but the terms
remain unknown at this time and the facility expires within a
year."


SPIEGEL GROUP: Seeks to Reject Butterfield Lease & Sublease
-----------------------------------------------------------
The Spiegel Group and its debtor-affiliates seek the Court's
authority to reject a real property lease with Butterfield Ridge
No. 2, Inc. and a sublease of the same property with Travel Realty
Corporation.

The Debtors entered into a lease with Butterfield for a two-story
stand-alone general office building located in Downers Grove,
Illinois on February 22, 1995.  The term of the Lease runs through
May 31, 2005.  The rental payments are currently $54,865 per month
through December 31, 2003.  By January 1, 2004, the rental
payments will increase to $55,792 per month through May 31, 2004.
Beginning June 1, 2004, the monthly rent will increase to $56,882
through December 31, 2004.  By January 1, 2005, the payment will
increase to $57,853 through the end of the lease term.  As of June
1, 2003, Spiegel's remaining obligations under the Lease total
$1,290,150.

Spiegel subleases the property pursuant to a June 22, 1998
agreement with Travel Realty.  The term of the Sublease runs
through May 31, 2005.  Under the Sublease, Travel Realty is
obligated to pay $56,207 as monthly rental to the Debtors through
June 30, 2003.  Beginning on July 1, 2003, the payments will
increase to $57,881 per month through June 30, 2004.  By July 1,
2004, the monthly rent will increase to $59,614 through the end
of the Sublease term.  Travel Realty's payments under the Lease
cover the amount Spiegel owes under the main Lease.

The Debtors want to walk away from both lease agreements because
they no longer need the office building for the continued
operation of their businesses.  The Sublease terms also do not
warrant the Debtors retaining it.  The Debtors owe Butterfield
$27,800 in prepetition payments under the Lease.  If they were to
assume both the Lease and the Sublease, the Debtors tell the
Court that they will receive $57,600 from Travel Realty as excess
rent, through the end of the Lease and Sublease terms.  Reducing
the aggregate excess rents they would receive under the Sublease
by the prepetition amounts owed to Butterfield, the Debtors note
that the benefit of assuming both agreements would be $29,800.
This benefit would be of de minimis value to the estates.

Moreover, the Debtors have determined to reject the Lease and
Sublease to avoid the negative effects of a potential default of
Travel Realty under the Sublease.  If Travel Realty were to
default under the Sublease as of June 1, 2003, the Debtors would
have $1,290,000 as remaining obligation under the Lease. (Spiegel
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


STERLING BANCSHARES: Fitch Affirms Ratings Following Unit's Sale
----------------------------------------------------------------
Fitch Ratings has affirmed the Ratings of Sterling Bancshares,
Inc. following the company's announcement of its sale of Sterling
Capital Mortgage Company (SCMC) to RBC Mortgage Company. The
Rating Outlook is Stable. A list of ratings is provided at the end
of this release.

The sale of SCMC, which is expected to close by the end of the
third quarter, is viewed favorably by Fitch. While SCMC added
diversity to SBIB's revenue stream during the initial periods of
declining interest rates, the volume of the mortgage pipeline
pressured balance sheet measures beyond expectations, particularly
funding and capital ratios. The mortgage business also possessed
an added element of volatility and required management's
attention, away from core banking operations. Given our historical
view on capital management, the impact from the mortgage banking
growth was a key factor to removing the Positive Outlook in
December of 2002. While Fitch is comforted by the positive impact
the divesture of SCMC will have on capitalization, we will remain
mindful of capital management activity going forward in light of
the 5% share repurchase program and potential acquisition
activity.

SBIB is viewed as a strong niche player serving a well-defined
customer base of owner/operator businesses in Texas. Ratings will
now be totally determined by the performance of core banking
operations. Fitch recognizes that the focus on small businesses
elevates SBIB's credit risk profile and recent softening of asset
quality measures will continue to be monitored. This view is
balanced with SBIB's demonstrated ability to manage credit risk
through various business cycles.

                         Ratings Affirmed:

Sterling Bancshares, Inc.

         -- Long-Term Senior 'BBB-';
         -- Short-Term Senior 'F3';
         -- Individual 'B/C';
         -- Support '5'.

Sterling Bancshares Capital Trust II and III

         -- Trust Preferred 'BB+'

Sterling Bank (TX)

         -- Long-Term Deposits 'BBB';
         -- Long-Term Senior 'BBB-';
         -- Short-Term Deposits 'F3';
         -- Short-Term Senior 'F3';
         -- Individual 'B/C';
         -- Support '5';

Rating Outlook 'Stable'.


STONEVILLE FURNITURE: Case Summary & 20 Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: Stoneville Furniture Acquisition, Inc.
         525 S. Henry Street
         Stoneville, North Carolina 27048

Bankruptcy Case No.: 03-12330

Chapter 11 Petition Date: July 10, 2003

Type of Business: This is a "Chapter 33" case.  Stoneville
                   Furniture Co. is a leading manufacturer of
                   casual dining furniture, parson chairs, bar
                   stools, and 50's dinettes.  See
                   http://www.stonevillefurnitureco.com/

Court: Middle District of North Carolina (Greensboro)

Judge: Catharine R. Carruthers

Debtor's Counsel: John A. Northen, Esq.
                   Northern Blue, LLP
                   100 Europa Drive,
                   Suite 500
                   P.O. Box 2208
                   Chapel Hill, NC 27514-2208
                   Tel: 919-968-4441

Total Assets: $2,704,000

Total Debts: $5,189,837

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
US Bank                     Business Machinery,       $650,000
PO Box 1038                 Fixtures, Equipment and
Cincinnati, OH 45201        Supplies Book
Value

T&B Tube Co., Inc.          Trade Debt                 $71,755

Penske Truck Leasing Co.    Trade Debt                 $63,086

Trendler Components         Trade Debt                 $48,720

Tietex Interiors            Trade Debt                 $44,842

Ace Glass                   Trade Debt                 $24,596

Alphia Corp                 Trade Debt                 $21,720

Beeson Hardware Co.         Trade Debt                 $16,810

Duke Power Company          Trade Debt                 $35,891

Fedex Freight East          Trade Debt                 $19,324

Global Exchange Services    Trade Debt                 $25,271

Global Link Logistics Inc.  Trade Debt                 $20,380

Intex Plastics              Trade Debt                 $27,787

J&J Corrugated              Trade Debt                 $23,210

LTV Copperweld              Trade Debt                 $26,882

Marx Industries, Inc.       Trade Debt                 $24,604

Nevamar Company, LLC        Trade Debt                 $18,104

Nicholson, Reb              Trade Debt                 $18,600

Southeastern Board Inc.     Trade Debt                 $19,044

Unisys Corporation          Trade Debt                 $21,420


TIERS FIXED: Series 2001-14 Certificates Rating Lowered to D
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on TIERS
Fixed Rate Certificates Trust Series 2001-14's certificates (TIERS
2001-14). At the same time, the rating is removed from CreditWatch
with developing implications where it was placed June 4, 2003.

TIERS 2001-14 is a synthetic transaction, and its rating is weak-
linked to the rating on its underlying collateral, the senior
unsecured debt issued by Mirant Corp. This downgrade follows the
lowering of the rating on Mirant Corp.'s senior unsecured debt to
'D' on July 15, 2003.

The bankruptcy filing by Mirant Corp. constitutes a term assets
credit event under the trust agreement. As such, the call rights
buyer, Citibank N.A., is obligated to pay to the trustee an amount
equal to the present value of the remaining semiannual periodic
payments it is obligated to make to the trustee under the call
rights agreement and the related call rights agreement will
terminate. This call right payment will be made to the trustee,
U.S. Bank Trust N.A., in the amount of $45.95 per $1,000 of the
TIERS 2001-14 certificates. Additionally, TIERS 2001-14
certificateholders may opt to receive a pro rata share of the
underlying assets.

                      RATING LOWERED

         TIERS Fixed Rate Certificates Trust Series 2001-14
         $400 million fixed-rate trust certs series MIR 2001-14

                          Rating
         Class    To                 From
         Certs    D                  CC/Watch Dev


TRIAD HOSPITALS: S&P Raises Ratings on Better Operating Results
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on Triad
Hospitals Inc., including its corporate credit rating to 'BB-'
from 'B+'.

Dallas, Texas-based Triad is the third-largest proprietary
hospital company in the U.S. Total debt outstanding as of
March 31, 2003, was $1.7 billion. The outlook is positive.

"The upgrade reflects the expectations that the company's improved
operating results are sustainable, and the likelihood that the
company has the capacity to fund growth, including acquisitions
within the constraints of the rating," said Standard & Poor's
credit analyst David Peknay.

The speculative-grade ratings on Triad reflect Standard & Poor's
concern about the company's aggressive growth strategies, risks
associated with potentially weaker future reimbursement by the
government and other third-party payors, and the challenges it
faces to maintain or improve its local market position.

The company's strategy for increasing profitability centers on
increasing the number of services offered, recruiting additional
physicians, and strengthening relationships with physicians.
Additional growth is expected to be generated from an aggressive
strategy that incorporates joint venture partnerships with not-
for-profit hospitals, potentially large acquisitions, and new
construction projects. Results support the success of this
strategy to date, as funds from operations to lease adjusted debt
improved to 23% in 2002 from 13% in 2001, and return on capital
improved to 10.0% from 7.4% in 2001.


UNITED AIRLINES: Bank One Gets Go-Ahead to Make O'Hare Payments
---------------------------------------------------------------
The City of Chicago issued $100,000,000 Chicago O'Hare
International Airport Special Facility Revenue Bonds (United Air
Lines, Inc. Project) Series 2001A-2.  The Bond proceeds were used
to finance the construction, improvement and modification of
buildings and other facilities at Chicago's O'Hare International
Airport.  Bank One is the Trustee.

Pursuant to a Trust Agreement dated February 1, 2001, between the
City of Chicago and Bank One Trust Company, as Trustee, a
Capitalized Interest Fund was established to insure payment of
interest installments due on the Bonds.  United agreed to make
payments to Bank One, and the payments were then transferred and
held in the Capitalized Interest Fund.  Under the terms of the
issuance, $11,843,106 was to be held in the Fund, to be applied to
interest payments through November 1, 2005.

The Capitalized Interest Fund's current balance is $1,395,559.
Meanwhile, United owes $3,187,500.  Therefore, the amount due is
more than the amount in fund.

Bank One and Chicago obtained Judge Wedoff's assurance that
United will not have access to the resources in the Capitalized
Interest Fund.  Furthermore, the Court granted them permission to
disburse the funds, in compliance with the Agreement, to the
Bondholders. (United Airlines Bankruptcy News, Issue No. 22;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


US DATAWORKS: Auditors Express Going Concern Doubts
---------------------------------------------------
US Dataworks is a developer of payment processing software,
serving several of the top 25 banking institutions, top 10 credit
card issuers, and the United States Government. It generates
revenue from the licensing, system integration and maintenance of
its core products: MICRworks, Returnworks, Remitworks and
Remoteworks for the financial services industry. The software
developed by it is designed to enable organizations to transition
from traditional paper-based payment and billing processes to
electronic payment solutions. US Dataworks' products include check
processing, point-of-purchase transactions and turnkey Automated
Clearing House, or ACH, payments. Its products are designed to
provide organizations with an in-house solution that will
complement and enhance such organizations' existing technologies,
systems and operational workflow. US Dataworks' strategy is to
identify, design and develop products that fill specific niches in
the payment processing industry.

The Company's net loss decreased by $7,892,904, or 72%, from a net
loss of $11,009,621 in fiscal 2002 to a net loss of $3,116,717 in
fiscal 2003.

Cash and cash equivalents decreased by $125,452 to $8,564 at
March 31, 2003 from $134,016 at March 31, 2002. Cash used for
operating activities was $1,155,614 in fiscal 2003 compared to
$2,273,286 in fiscal 2002, of which $883,424 was used in
discontinued operating activities. Net loss from continuing
operations reduced cash by $3,116,717 and $9,589,746 in fiscal
2003 and fiscal 2002, respectively.

US Dataworks recognizes the need for the infusion of cash during
fiscal 2004 and is actively pursuing various financing options.
However, there can be no assurance that it will be able to raise
additional funds on favorable terms or at all.

In addition, according to the Company, it may wish to pursue
possible acquisitions of, or investments in businesses,
technologies or products complementary to its technologies or
products, in order to expand its geographic presence, broaden its
product offerings and achieve operating efficiencies. The Company
may not have sufficient liquidity, or it may be unable to obtain
additional financing on favorable terms or at all, in order to
finance such an acquisition or investment. US Dataworks is not
currently contemplating or in negotiations for any specific
acquisition or investment.

The Company believes that it currently has adequate cash to fund
anticipated cash needs for at least the next 6 months. An adverse
business or legal development may also require it to raise
additional financing sooner than anticipated. The Company
recognizes that it may be required to raise such additional
capital, at times and in amounts, which are uncertain, especially
under the current capital market conditions. If unable to acquire
additional capital, or required to raise it on terms that are less
satisfactory than desired, there may be a material adverse effect
on the Company's financial condition. If necessary, the Company
may be required to consider curtailing its operations
significantly or to seek arrangements with strategic partners or
other parties that may require the Company to relinquish
significant rights to products, technologies or markets. In the
event it raises additional equity financings, these financings may
result in dilution to existing shareholders.

These conditions raise substantial doubt about US Dataworks'
ability to continue as a going concern. As disclosed in the
financial statements for the year ended March 31, 2003, the
opinion of the Company's independent auditor included an
explanatory fourth paragraph stating that there is substantial
doubt about US Dataworks' ability to continue as a going concern.


WEIRTON STEEL: Committee Turns to Campbell & Levine for Advice
--------------------------------------------------------------
Campbell & Levine LLC is a law firm of approximately 15 attorneys
with its principal offices located in Pittsburgh, Pennsylvania.
Campbell & Levine and its members have previously represented or
currently represent fiduciaries in a large number of steel-related
bankruptcy proceedings, and are currently serving as Debtor
Weirton Steel Corporation's counsel in the pending case of Anker
Coal Company, which is administratively consolidated at Docket No.
02-13597.

Pursuant to Sections 328 and 1103(a) of the Bankruptcy Code and
Rule 2014 of the Federal Rules of Bankruptcy Procedure, the
Official Committee of Unsecured Creditors sought and obtained the
Court's authority to retain Campbell & Levine nunc pro tunc to
May 30, 2003, as its local counsel.

Lisa M. Watson, Chairperson of the Committee, relates that
Campbell & Levine will render the legal services, as the
Committee may consider desirable to discharge the Committee's
responsibilities and further the interests of the Committee's
constituents in the case.  Campbell & Levine's services will
include, at Blank Rome's request and without limitation,
assisting, advising and representing the Committee in these
matters:

     (a) The administration of the Case and the exercise of
         oversight with respect to the Debtor's affairs including
         all issues arising from or impacting the Debtor or the
         Committee in the Case;

     (b) The preparation on the Committee's behalf of all necessary
         applications, motions, orders, reports and other legal
         papers;

     (c) Appearances in the Bankruptcy Court and at statutory
         meetings of creditors to represent the Committee's
         interests;

     (d) The negotiation, formulation, drafting and confirmation of
         any plan of reorganization and matters related thereto;

     (e) The exercise of oversight with respect to any transfer,
         pledge, conveyance, sale or other liquidation of the
         Debtor's assets;

     (f) The investigation, if any, as the Committee may desire
         concerning the assets, liabilities, financial condition
         and operating issues concerning the Debtor that may be
         relevant to this case;

     (g) The communication with the Committee's constituents and
         others as the Committee may consider desirable in
         furtherance of its responsibilities; and

     (h) The performance of all of the Committee's duties and
         powers under the Bankruptcy Code and the Bankruptcy Rules
         and the performance of other services as are in the
         interests of those represented by the Committee or as
         maybe ordered by the Court.

David B. Salzman, Esq., a member of Campbell & Levine, discloses
that Campbell & Levine has conducted a conflicts check of the
parties named and identified in the Debtor's petition and initial
pleadings which include the creditors listed on the Debtor's
consolidated list of creditors holding 20 largest unsecured
claims, including the Committee members and the Debtor's secured
lenders.  Upon review, Mr. Salzman confirms that neither Campbell
& Levine, any member of the firm, nor any associate has, had or
presently has any connection with the Debtor, its creditors, or
any party-in-interest.  Mr. Salzman maintains that Campbell &
Levine is a "disinterested person" as that term is defined in
Section 101(14) of the Bankruptcy Code.

Furthermore, the Court has granted Campbell & Levine the
authority to charge the Debtor based on these hourly rates:

     Douglas A. Campbell      Senior Member               $350
     Stanley E. Levine        Senior Member                350
     David B. Salzman         Senior Member                350
     Roger M. Bould           Junior Member                290
     Philip E. Milch          Junior Member                290
     Ronald B. Roteman        Associate                    250
     Erik Sobkiewicz          Associate                    240
     Paul J. Cordaro          Associate                    175
     Jonathan G. Babyak       Of Counsel                   200
     Mark S. Frank            Of Counsel                   300
     Rudy A. Fabian           Of Counsel                   240
     Paralegals                                       95 - 100

The Court ordered that all compensation and expense reimbursement
to be paid to Campbell & Levine for the professional services
rendered and expenses incurred on the Committee's behalf will be
subject to interim and final Court approval. (Weirton Bankruptcy
News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


WHEELING-PITTSBURGH: Judge Bodoh OKs US EPA Claim Settlement
------------------------------------------------------------
Wheeling-Pittsburgh Corporation, following up on the settlement
among WPSC, the United States Environmental Protection Agency, and
the United States Coast Guard, presents a Stipulation settling the
Debtors' Objection to allowance of the final claim by the US EPA.

By agreement, the US EPA claim is reduced to $1,550,000 and
allowed as a general, unsecured claim classified in Class 5 under
the Plan. $1,500,000 of the claim is allocated to the satisfaction
of WPSC's arrangement for disposal of hazardous substances at the
Breslube-Penn Superfund Site in Coraopolis, Pennsylvania, and the
remaining $50,000 is in satisfaction of the claim of the United
States arising from WPC's alleged arrangement for disposal of
hazardous substances at the Four County Landfill in Fulton County,
Indiana.  The US EPA waives all other claims against the Debtors,
and is represented in this matter by David E. Street, Esq., Senior
Attorney, Environmental Enforcement Section in Washington.

Judge Bodoh approves this stipulation. (Wheeling-Pittsburgh
Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


WINSTAR COMMS: Ch. 7 Trustee Seeks to Retain Seneca as Expert
-------------------------------------------------------------
Christine C. Shubert, the Chapter 7 Trustee in the cases of
Winstar Communications, Inc., and its debtor-affiliates, seeks the
Court's authority to employ Seneca Financial Group, Inc., nunc pro
tunc to July 7, 2003.

Sheldon K. Rennie, Esq., at Fox Rothschild O'Brien & Frankel LLP,
in Wilmington, Delaware, recounts that CitiCapital Commercial
Corporation, General Motors Acceptance Corporation and Lucent
Technologies, Inc. have asserted liens in the Sale Proceeds
pursuant to certain agreements that they entered into with the
Debtors.  As a result of their assertions, the Trustee commenced
an adversary proceeding seeking to:

     1. require these Defendants to prove the validity, priority
        and extent of their liens;

     2. determine the validity, priority and extent of the
        Defendants' alleged liens; and

     3. to the extent the Defendants have valid, perfected liens
        that rightfully attach to the Sale Proceeds:

        a. determine the value of the collateral securing the
           liens; and

        b. determine the appropriate allocation of the
           Sale Proceeds, if any, that may be attributable to any
           valid secured claims the Defendants may hold.

On June 3, 2003, the Court entered a scheduling order directing
the parties to designate experts by July 2, 2003, complete expert
reports by July 16, 2003 with rebuttal reports to be completed by
July 25, 2003, complete discovery on August 8, 2003 and that a
trial of the Adversary Proceeding will commence on September 8,
2003.

Mr. Rennie relates that although the Trustee and her
professionals have been diligently working towards compliance
with the timing contemplated in the Scheduling Order, they have
encountered a major and unexpected setback regarding the
Trustee's employment of an expert in connection with the
Adversary Proceeding.  After interviewing prospective experts,
the Trustee decided to engage a certain professional firm to
serve as her expert and assist her in the prosecution of the
Adversary Proceeding.  After working with the proposed expert for
two weeks, a conflict of interest was discovered which precluded
the Trustee's engagement of the proposed expert.

The Trustee's professionals then interviewed additional
prospective experts and had difficulty finding a satisfactory
substitute before interviewing Seneca.  The Trustee and Seneca
are now in the unfortunate position of having to produce an
expert report in an unreasonably short time frame due to the
circumstances surrounding Seneca's proposed employment.

By this motion, in order to attempt to meet the deadlines
contemplated by the Scheduling Order, the Trustee asks the Court
to:

     1. hold a telephonic hearing at the Court's earliest
        convenience with respect to the Trustee's request to employ
        Seneca as her consulting expert in connection with the
        Adversary Proceeding;

     2. approve the Trustee's employment of Seneca; and

     3. approve the Trustee's proposed compensation of Seneca.

According to Mr. Rennie, Seneca is a merchant banking firm
specializing in the restructuring of public and private
companies.  Seneca provides advisory services like in-depth
financial performance reviews, liquidity stress tests, financial
planning, business planning, industry peer analyses, business
valuations, and capital investment planning.  In particular,
Seneca has access to many types of comparable valuations for
public and private companies, and provides clients with prompt,
accurate and cost-effective valuation services.  Seneca offers
professional testimony on business valuations for clients
requiring the assistance.  Seneca's professionals are qualified
as expert witnesses in valuation matters, and can be called on to
develop highly professional testimony on many complex valuation
issues.  Seneca's retention is absolutely necessary for the
Trustee to diligently prosecute the Adversary Proceeding.

As expert, Seneca will:

     1. prepare the expert report and rebuttal report contemplated
        by the Scheduling Order;

     2. assist the Trustee's professionals in their review and
        analysis with respect to the proper allocation of the Sale
        Proceeds among the Acquired Assets;

     3. serve as testifying expert at trial of the Adversary
        Proceeding;

     4. assist the Trustee in any negotiations that may ensue with
        the Defendants; and

     5. perform any other services commensurate with the Trustee's
        needs and Seneca's expert knowledge in connection with
        issues concerning the Adversary Proceeding, including
        rendering assistance to the Trustee's professionals in
        connection with discovery and trial preparation.

Seneca is typically compensated at these hourly rates:

              President James W. Harris      $600
              Managing Directors              550
              Associates                      270
              Analysts                        150

The Trustee also seeks the Court's authority to reimburse
Seneca's reasonable out-of-pocket expenses.

In light of the extraordinary amount of services that the Trustee
is going to require from Seneca on an extremely shortened time-
frame, the Trustee seeks to compensate 80% of Seneca's fees and
100% of Seneca's expenses on a monthly basis since the majority
of Seneca's work will be completed before the next omnibus fee
application hearing date in these cases.  The Trustee proposes
that these payments will be made within 15 days after the
Trustee's receipt of a monthly invoice setting forth in detail
the services rendered for the period and subject to disgorgement
absent the Court's final approval of an interim fee application
to be filed by Seneca on the next available omnibus fee
application date in this matter.

James M. Sullivan, Managing Director of Seneca, assures the Court
that none of the members or associates of Seneca holds or
represents any interest adverse to the Debtors' estates.
Specifically, neither Seneca, nor any of its members or
associates:

     1. is a creditor of the Debtors' estates;

     2. is a direct or indirect equity security holder of the
        Debtors;

     3. is or has been an officer, director or employee of the
        Debtors, or an "insider" of the Debtors, as that term is
        defined in Section 101(31) of the Bankruptcy Code;

     4. is or has been an investment banker for any security of
        the Debtors, or an attorney for an investment banker in
        connection with the offer, sale, or issuance of a security
        of the Debtors, or a director, officer or employee of an
        investment banker for any security of the Debtors;

     5. presently represents a creditor or equity security holder
        of the Debtors, or a person otherwise adverse or
        potentially adverse to the Debtors' estates, on any matter
        that is related to the Debtors' estates;

     6. has any connection with the Debtors, creditors of the
        Debtors, the Office of the United States Trustee or any
        employee of that office, or any other parties-in-interest;
        or

     7. has any other interest, direct or indirect, which may
        affect or be affected by the proposed representation.

However, Mr. Sullivan discloses that:

     1. Seneca previously advised Siemens Carrier Networks LLC with
        respect to its loan to Winstar Communications.  Seneca
        devised a cash flow budget for the duration of the Chapter
        11 proceedings, analyzed risks associated with Winstar's
        business plan, and developed a strategy to maximize
        Siemens' recovery.  Seneca no longer represents Siemens in
        matters related to the Debtors' cases and will not do so
        during the pendency of this engagement; and

     2. Telergy, Inc., a New York State facilities-based
        Competitive Local Exchange Carrier, or CLEC, previously
        engaged James Sullivan and James Harris of Seneca, to
        provide crisis and interim management services.  Telergy
        operated an integrated broadband telecommunications
        network.  Seneca directed the management and day-to-day
        operations of the Company, implemented a significant cost
        reduction plan, and represented the Company in its Chapter
        11 Bankruptcy proceeding and conversion to Chapter 7.  The
        Chapter 7 Trustee then engaged Seneca.  James W. Harris
        served as Chief Executive Officer and President and was the
        sole Board member of Telergy, Inc. prior to the conversion
        to Chapter 7.  Additionally, James M. Sullivan served in
        the capacities of interim COO/CFO up to the conversion of
        the case, and worked with the Chapter 7 Trustee through
        Spring of 2002.  As a facilities-based CLEC, Telergy was a
        party to many agreements with various vendors and other
        telecom providers.  In this regard, Telergy was a party to
        various disputed arrangements including one with Winstar.
        Furthermore, the company had dealings and disputes with
        many other parties in the normal course of business,
        several of whom ultimately became creditors and litigants
        in its Chapter 11 proceedings.  These parties include
        WorldCom/MCI, Metromedia Fiber Networks, Hugh O'Kane
        Electric, Williams Communications, Verizon, Level 3,
        Cambrian Communications, Cisco Systems and various others.
        Seneca no longer represents Telergy in matters related to
        the Debtors' cases and will not do so during the pendency
        of this engagement. (Winstar Bankruptcy News, Issue No. 45;
        Bankruptcy Creditors' Service, Inc., 609/392-0900)


WORLDCOM: Asks Court to Approve MicroVoice Settlement Pact
----------------------------------------------------------
Adam P. Strochak, Esq., at Weil Gotshal & Manges LLP, in New
York, reports that MicroVoice Applications, Inc. and MicroVoice
Applications, Inc. Hong Kong are wholesalers of 900 number
telecommunications services.  900 Services are those where the
person making a telephone call pays a per-minute or per call
charge for information or services provided by an "Information
Provider".  The IP sets the price for calls to access its
services.  In addition to being a wholesaler, MicroVoice is also
an IP.

MCI WorldCom Network Services, Inc. is a leading interexchange
telephone carrier that provides long distance telephone service.
As an interexchange carrier, MCI is allocated certain 900 prefix
telephone numbers, for which MCI provides "transport" services to
wholesalers like MicroVoice.  In addition, through its
contractual relationship with the various local exchange carriers
nationwide, MCI provides billing and collection services for
calls to the 900 numbers.

Mr. Strochak recounts that, on August 19, 1996, MCI and
MicroVoice entered into a Carrier Agreement whereby MCI provided
telecommunications services to MicroVoice pursuant to account
numbers 114127WFS, MV01, 03319402, 01819035 and 04497946.  At the
same time, MCI and MicroVoice also entered into an Order Form and
Agreement for MCI 900 Service Billing and Collection, whereby MCI
provided billing and collection services for "900 numbers" used
by MicroVoice and its customers.  Over the years, the Carrier
Agreement and Billing & Collection Agreement have been amended
from time to time.

MicroVoice alleges that prior to the Petition Date, it forwarded
to MCI $2,000,000 per month in calls for billings and collections
under the B&C Agreement.  MCI charges MicroVoice a fee for
carrying the calls and for providing Billing & Collection
services, and then pays the remainder to MicroVoice, subject to
certain holdbacks for bad debt, unbillable calls and caller
chargebacks.  MCI did not pay MicroVoice the amount due under the
B&C Agreement for two months prior to the Petition Date.  As of
the Petition Date, MicroVoice alleged that the Debtors had a
$7,400,000 prepetition balance due to MicroVoice.  Because of
adjustments for bad debt, unbillable calls and customer
chargebacks, MCI believes that the actual amount of the
prepetition balance due MicroVoice under the Billing & Collection
Agreement was $3,780,000 as of April 15, 2003.  MicroVoice
contends that the prepetition balance due is substantially
higher.  Separately, MicroVoice has an outstanding prepetition
balance due to MCI, which MCI believes to be $215,655.79 for
services used under the Carrier Agreement.  MicroVoice believes
the balance to be $107,000.

On August 29, 2002, MicroVoice commenced adversary proceeding
number 02-03063 in these Chapter 11 cases.  On October 17, 2002,
the Debtors moved to dismiss the adversary proceeding with
prejudice.  On January 14, 2003, the Court referred MicroVoice
and the Debtors to mediation.  On January 21, 2003, MicroVoice
filed a Proof of Claim, numbered 16092, in connection with the
prepetition balance it alleged it is owed under the B&C
Agreement.  On April 30, 2003 and May 1, 2003, the parties
engaged in mediation, which led to a settlement.

The Debtors and MicroVoice entered into an agreement on June 17,
2003 to settle all claims related to the Disputes, the Proof of
Claim, as well as to resolve certain outstanding issues in the
business relationship between the parties.  The salient terms of
the Settlement Agreement are:

     A. The Debtors will pay MicroVoice $940,000 in full
        satisfaction of its claims, and for MicroVoice's withdrawal
        of its Proof of Claim.  This amount fully satisfies any
        dispute the parties have regarding the prepetition balance
        due each of the parties;

     B. The Debtors will assume the Carrier Agreement on its
        current terms, and the Billing and Collection Agreement
        subject to certain amendments; and

     C. The $940,000 encompasses any cure amount owed in connection
        with the assumption of the Billing & Collection Agreement.

The Debtors also seek the Court's authority to assume the Carrier
Agreement and the Billing & Collection Agreement subject to the
amendments set forth in the Settlement Agreement.

Mr. Strochak tells the Court that the Carrier Agreement will be
continued on its current terms.  The Billing & Collection
Agreement will be amended to bring its terms in conformance with
the 900 Billing & Collection Agreement offered to other MCI
customers.  In particular, MCI will be permitted, after 30 days
notice to MicroVoice, to amend the rate charged for billing and
collection services.  Either Party will also be permitted, after
30 days notice, to terminate the billing and collection
relationship without cause.  Any cure amounts owed to MicroVoice
by the Debtors in connection with the assumption of these
agreements is subsumed into the payment.

Mr. Strochak admits that litigation of the issues in this case
would involve a detailed evidentiary battle over the
interpretation of each contract and the parties' course of
dealing.  MicroVoice was prepared to fully litigate its claims,
which it believed were meritorious.  The risks and costs of the
litigation for the Debtors outweigh the probability of success.
It appears that each party holds a good faith belief in the
accuracy of its position; therefore, it is unclear whose
testimony the Court would believe regarding the Disputes.

Mr. Strochak believes that litigation regarding the Disputes
would likely involve a complex evidentiary battle on which would
necessitate discovery, including document production and numerous
depositions.  Additionally, the Debtors likely would have to
prepare several key employees for depositions and court testimony
on the nature of the relationship with MicroVoice and the "900
number" business.  The time and energy of these key employees is
better spent focusing on business responsibilities to ensure that
the Debtors' operations run smoothly during this critical period
of their reorganization.  The Debtors estimate that this
litigation could take months to complete at significant costs to
the estate.  The Settlement avoids these direct and indirect
costs of litigation while paying out an amount relatively
commensurate with what MicroVoice would receive under the
proposed plan of reorganization.

Any litigation over the equitable and other issues would be
complex, and expensive, even if the Debtors prevailed.

The Debtors also ask that the Court grant them leave to file
under seal the Settlement Agreement and that the Settlement
Agreement be made available, on a confidential basis, only to the
statutory committee of unsecured creditors and their
professionals.

Mr. Strochak asserts that good cause exists for the Court to
grant the Debtors leave to file the Settlement Agreement under
seal as it contains confidential proprietary information
regarding the business relationship between MCI and MicroVoice.
This includes proprietary information relating to MicroVoice's
monthly 900 revenue and MCI charges, as well as pricing terms and
the rights and powers of each party.  The confidentiality of
these terms is particularly important given that MicroVoice
competes directly with other 900 number service providers who
contract with MCI. (Worldcom Bankruptcy News, Issue No. 32;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


* Jack Seward Says Find the Pixie Dust & You'll Find the Money
--------------------------------------------------------------
Written by Jack Seward, "The Debtor's Digital Autopsy(c) or
Where's the Money!" is the feature article in the Summer 2003
issue of NABTalk(R), the Journal of the National Association of
Bankruptcy Trustees.   Jack provides Trustee's and Creditors with
the answer.  Find the "Pixie Dust" -- the recorded electronic data
found on computer hard disk drives, PDA and other digital devices.

A full-text copy of Mr. Seward's article is available at no charge
at http://bankrupt.com/misc/seward.pdf

A panel Trustee has the duty to investigate the financial affairs
of the Debtor and to ensure that books and records are properly
turned over to the trustee in accordance with Section 704. Most
panel Trustees may not have the technical expertise to properly
investigate in the modern financial world of computer technology.
The article discusses how digital devices, computer networks, e-
mail and the Internet have utterly changed the way business is
conducted and the need for digital forensic accounting
investigations.  This article will demonstrate the need for
qualified forensic accountants with specific computer forensic
skills as it relates to the bankruptcy process.

How it is almost impossible for unscrupulous Debtors or their
officers to escape from the trail of e-data left behind in today's
digitized business environment.  Indeed this is the digital age,
and in the Bankruptcy arena that means the Trustee has powerful
resources available to sift through the electronic sand pit of the
unscrupulous Debtor. Obviously, in any bankruptcy case today,
computers and digital devices contain the critical information
necessary to obtain money for creditors and eliminate abuses of
the Bankruptcy Code.

To accomplish this, the Trustee will need the skills of the
"eSleuthHound", the forensic accountant for the 21st Century.  The
digital forensic accounting specialist, the eSleuthHound, is
cognizant that business operates, and ultimately survives or
fails, using digital information.  After a failure, the
eSleuthHound must be prepared to uncover and recover the Debtor's
e-data from any available data-storage source.

Exactly what are we talking about?  Promptly examining the Pixie
Dust to find where the money went and who has the money now,
before it is all gone, are obvious goals for both the eSleuthHound
and Trustee.  The eSleuthHound, the forensic accountant,
experienced in bankruptcy, litigation, financial and accounting
matters represents the best of breeds.  Knowledgeable, with
sophisticated computer accounting applications and especially
effective in the analysis of financial information, the
eSleuthHound provides maximum results for the Trustee.  The
Trustee should always consider engaging the services of the
eSleuthHound in those cases where the "smell" of money exists.
The eSleuthHound is the Trustee's entree into and solution for the
digital 21st Century.

In this same issue of NABTalk(R), Robert C. Furr the Editor
discusses under EDITOR'S NOTES, how "Bankruptcy has just gotten
very, very COMPLICATED".  Furr states that "This month's
NABTalk(R) has a terrific article by Jack Seward, a forensic
expert from New York, about performing a digital autopsy on a
debtor's computers to discover what he calls Pixie Dust.  He warns
you to preserve and extract hidden digital information before it
is lost.  This is what we now face in our cases"

Prior to its official release, Jack received positive comments on
his article, including those from academia, and the computer
forensics and bankruptcy communities.  To-date comments have been
received from seven countries outside the US.  The Editor of the
Victorian Bar News in Australia has asked permission to print this
article.  Jack shares the one comment that means the most to him
from Andrew Rosen, the computer forensic expert who discovered and
recovered the deleted Andersen/Enron e-mails.  "Well written, easy
to read and understand.  Good blend of accounting and technical
issues presented."

                        About the Author

Jack Seward is a manager at RosenfarbWinters, LLC, a New York
metropolitan area forensic accounting firm, and has, for many
years, specialized in the recovery and analysis of digital
information.  He may be contacted at JackSeward@msn.com
RosenfarbWinters, LLC, 386 Park Avenue South, Suite 700, New York,
NY 10016, Office 212-686-0220, Fax 212-686-0219


* James Ricciardi Joins Mcguirewoods' New York Practice
-------------------------------------------------------
James P. Ricciardi, a restructuring attorney with extensive
experience in the restructuring of distressed businesses, has
joined the New York office of McGuireWoods LLP. He will continue
to focus his practice on the representation of debtors, acquirers,
bankruptcy, and companies in or about to enter Chapter 11.
Ricciardi joins McGuireWoods' bankruptcy and restructuring
practice in New York.

Before joining McGuireWoods, Ricciardi was a partner at Millbank,
Tweed, Hadley & McCloy LLP in New York City, N.Y., in the
Financial Restructuring Group. Ricciardi was also a partner of
Gibson, Dunn & Crutcher LLP in the Business Restructuring and
Reorganization Group in New York City, New York. He served
as the creditors' committee counsel for Enron, as well as serving
as the secured indenture trustee's counsel for Wells Fargo in the
Chapter 11 case of York Research Corporation.

William J. Strickand, the managing partner of McGuireWoods,
commented, "Jim will be a strong addition to one of this firm's
core practice groups. We foresee the need to provide our clients
with additional restructuring expertise in New York, as well as
other markets. Jim is an outstanding fit for our growth
initiatives, including our merger with Ross & Hardies."

Ricciardi is a member of the Association of the Bar of the City of
New York, former member of its Bankruptcy and Reorganization
Committee, and chaired a subcommittee on the retention of crisis
mangers in Chapter 11 cases. In addition, he was a member of the
Bank and Reorganization Committee of New York City for three
years. Prior to becoming active in law practice, he was a
business executive.

Ricciardi earned his law degree from Harvard Law School in
Cambridge, Massachusetts. He received his bachelor of science cum
laude from the Ohio State University in Columbus, Ohio with
distinction in Computer and Information Sciences.

McGuireWoods LLP is a full-service law firm with approximately 575
Lawyers in 14 offices in the United States, Europe and Central
Asia providing legal counsel to clients around the world. The
firm's New York office is located at 9 West 57th Street. For more
information, visit http://www.mcguirewoods.com/


* BOND PRICING: For the week of July 21 - July 25, 2003
-------------------------------------------------------

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

                           *********

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

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

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

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

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

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

                           *********

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

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

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

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

The TCR subscription rate is $675 for 6 months delivered via e-
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 ***