TCR_Public/030725.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

               Friday, July 25, 2003, Vol. 7, No. 146

                           Headlines

ACANDS INC: Disclosure Statement Hearing Set for July 29, 2003
ACETEX CORP: S&P Rates $75 Million Senior Note Add-on at B+
ADELPHIA COMMS: Needs Until Oct. 20 to Complete Schedules
AFC ENTERPRISES: Audit Panel Conducts Probe into Q3 Adjustments
AIRTRAN AIRWAYS: Flight Attendants Nix Tentative Labor Agreement

ALPHARMA INC: Posts $4.2 Million Net Loss for Second Quarter
AMERCO: Court Approves Cohen Kennedy's Engagement on Final Basis
AMERICA WEST: Plans to Sell $75 Million Issue Price of Sr. Notes
AOL TIME WARNER: June 30 Working Capital Deficit Stands at $2BB
ARVINMERITOR INC: Appoints Rakesh Sachdev VP and Controller

BANKAMERICA: Fitch Takes Various Rating Actions on 30 Classes
BIOMETRICS SECURITY: Will Seek New Funding or Cease Operations
BUDGET GROUP: BRACII Sues Jaeban U.K. to Recover GBP3 Million
BURLINGTON: Walker Rucker Wants to Conduct Rule 2004 Examination
CABLE SATISFACTION: Secures CCAA Stay Extension and New Facility

CALPINE: Fitch Rates $2.55-Billion Senior Secured Notes at BB-
CASELLA WASTE: Posts Q4 Results & Provides Fiscal 2004 Guidance
CENTENNIAL COMMS: Fiscal Year 2003 Net Loss Slides-Up to $746MM
CHARTER COMMS: Nancy Peretsman Elected Class A/Class B Director
CINCINNATI BELL: S&P Ratchets Corporate Credit Rating Up a Notch

CONCENTRA OPERATING: S&P Assigns B+ Rating to New $100M Facility
CORNING INC: Issuing 45 Million Shares via Public Offering
CUMULUS MEDIA: Completes Acquisition of 2 Stations from Athens
DAN RIVER INC: Second Quarter 2003 Net Loss Tops $19 Million
DELTA FUNDING: Fitch Further Junks Class B Note Rating at CC

DIAL CORP: Second Quarter 2003 Results Show Slight Improvement
DOFASCO: Lenders Waive Credit Pact Covenant Violations
DOBSON COMMS: S&P Hatchets Corporate Credit Rating a Notch to B-
ENRON CORP: Employee Committee Files Suit to Recover $72 Million
ENRON CORP: Provides Property Distribution Under Chapter 11 Plan

EURAMAX INT'L: S&P Rates Planned $200 Million Senior Notes at B
FAIRCHILD SEMICON.: Files Form S-3 Shelf Registration Statement
FARMLAND INDUSTRIES: Senators Urged to Clear Smithfield Deal
FLEMING: Selling Wholesale Distribution Business for $4 Million
FOSTER WHEELER LTD: Ability to Continue Operations Uncertain

GENSCI: Secures Accreditation by American Association of Tissue
GPN NETWORK: Brings-In Stonefield Josephson as New Accountants
GRUPO IUSACELL: Fintech Disappointed with Shareholders' Decision
GS MORTGAGE: S&P Hatchets Ratings on 3 Series 1999-C1 Notes
HANOVER COMPRESSOR: Will Host Q2 2003 Conference Call on July 30

HAWK CORP: Promotes Joseph Levanduski to VP-Chief Fin'l Officer
HAYES LEMMERZ: McKechnie Demands Prompt Payment of $1.7 Million
HEALTH-PAK INC: Board Resolves to File Reorg. Plan in New York
HEALTHTRAC INC: Needs Additional Funds to Continue Operations
HOST MARRIOTT: Second Quarter 2003 Net Loss Topping $14 Million

I2 TECH: S&P Affirms Ratings After 2002 Re-Audit & 10-K Filing
IMP INC: Fails to Comply with Nasdaq Listing Requirements
INTERFACE INC: Reports Second Quarter Net Loss of $5.4 Million
INTERNET CAPITAL: Falls Below Nasdaq Continued Listing Standards
L-3 COMMS: Extends Exchange Offer for 6-1/8% Notes Until July 30

LEAP WIRELESS: Court Okays Chanin Capital as Committee's Advisor
LNR PROPERTY: S&P Revises BB Rating Outlook to Stable from Pos.
LNR PROPERTY: Fitch Says Acquisition Won't Affect Ratings
LTV CORP: Asks Court to Fix Sept. 19 as Admin. Claims Bar Date
LTWC CORP: Reaches Pact to Sell All Assets to Markado for $1.12M

MEMC ELECTRONICS: Hosting Q2 2003 Conference Call on July 28
METRIS MASTER: Ratings on Various Related Transactions Lowered
MERIT SECURITIES: Fitch Affirms Ratings on Two Transactions
MIRANT CORP: Gets Blessing to Honor Prepetition Wages & Benefits
MORTGAGE CAPITAL: Fitch Takes Rating Actions on 1996-MC1 Notes

NAT'L BEEF PACKING: S&P Assigns BB- Corporate Credit Rating
NOVA CHEMICALS: Second Quarter 2003 Results Dips in Red Ink
OMEGA HEALTHCARE: Board Declares Preferred Share Dividends
PACIFIC GAS: Settlement Plan's Financial Forecasts through 2008
PERSONNEL GROUP: Amalgamated Gadget Discloses 36.9% Equity Stake

PG&E NAT'L: Brings-In Alvarez & Marsal as Restructuring Managers
PLAYTEX PRODUCTS: Second Quarter Results Show Earnings Decline
READER'S DIGEST: Files Reg. Statement for Secondary Offering
R.H. DONNELLEY: June 30 Net Capital Deficit Balloons to $72 Mil.
RH DONNELLEY: Plans to Move Headquarters to Raleigh-Durham, NC

SEA CONTAINERS: S&P Affirms BB- Rating Following Sale of Unit
SIX FLAGS: Disappointing 2Q Results Prompt S&P to Keep Watch
SMART & FINAL: Negotiating Covenant Amendment Under Credit Pact
SOUTH STREET: S&P Keeping Watch on Three Note Series Ratings
SOUTHERN STAR CENTRAL: S&P Assigns BB Corporate Credit Rating

SPIEGEL INC: Committee Wants Nod to Sue Holdings & Deutsche Bank
STONE TOWER: S&P Assigns Prelim. BB/B+ Ratings to Class D-1, D-2
TERAYON COMMS: Appoints Mark Slaven to Board of Directors
TOP-FLITE GOLF: Court Approves Callaway Golf's $125M Initial Bid
TROPICAL SPORTSWEAR: S&P Ratchets Credit Rating Down a Notch

UNITED STATIONERS: Second Quarter Earnings Results Show Decline
VENTAS INC: June 30 Net Capital Deficit Narrows to $47 Million
VENTURES NATIONAL: Liquidity Concerns Raise Going Concern Doubt
WASHINGTON MUTUAL: Fitch Upgrades & Affirms Various Ratings
WEIRTON STEEL: Court Okays Proposed Reclamation Claim Procedures

WESTPOINT STEVENS: Wants Nod for Holcombe Green Separation Pact
WINWIN GAMING: Pulls Plug on Smith & Co.'s Engagement as Auditor
WORLD AIRWAYS: Files Exchange Offer for Convertible Debentures
WORLDCOM INC: Wants Blessing to Pull Plug on Adelphia Agreements
W.R. GRACE: Net Capital Deficit Narrows to $168 Mill. at June 30

XTO ENERGY: Favorable Earnings Results Spurs S&P's BB+ Rating

* Fitch Says Defaults Down 69% While Recovery Rates Up 50% in H1

* BOOK REVIEW: The Rise and Fall of the Conglomerate Kings

                           *********

ACANDS INC: Disclosure Statement Hearing Set for July 29, 2003
--------------------------------------------------------------
ACandS, Inc., filed an amended Disclosure Statement with the U.S.
Bankruptcy Court for the District of Delaware to explain its
Amended Plan of Reorganization pursuant to Section 1125 of the
Bankruptcy Court.  The Debtor now asks the Bankruptcy Court to
find that document contains the right amount of the right kind of
information that will allow creditors to make informed decisions
about whether to vote to accept or reject the Plan.

A hearing to consider the adequacy of the Disclosure Statement
will convene before the Honorable Randall J. Newsome on
July 29, 2003, at 2:00 p.m. Eastern Time.

AcandS, Inc., was an insulation contracting company, primarily
engaged in the installation of thermal and mechanical insulation.
In later years, the Debtor also performed a significant amount of
asbestos abatement and other environmental remediation work.  The
Company filed for chapter 11 protection on September 16, 2002
(Bankr. Del. Case No. 02-12687). Laura Davis Jones, Esq., at
Pachulski Stang Ziehl Young Jones & Weintraub represents the
Debtor in its restructuring efforts. When the Company filed for
protection from its creditors, it listed estimated debts and
assets of over $100 million.


ACETEX CORP: S&P Rates $75 Million Senior Note Add-on at B+
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on acetyls producer Acetex Corp., and removed all
ratings from CreditWatch, where they were placed on June 23, 2003,
with negative implications following the company's announcement
that it had entered into a definitive agreement to merge with
specialty plastics manufacturer AT Plastics Inc. The current
outlook is stable.

At the same time, Standard & Poor's said that it assigned its 'B+'
rating to the company's proposed $75 million senior unsecured note
issue, an add-on to the company's existing 10.875%, $190 million
senior unsecured notes due August 2009. Pro forma for the
acquisition, the combined company will have approximately $305
million in total debt outstanding.

"If completed as proposed, the note issue removes the risk
associated with the assumption of AT Plastics' heavy debt burden",
said Standard & Poor's credit analyst Franco DiMartino. The
proceeds from the issue will be used to extinguish AT Plastics'
outstanding borrowings under its senior and subordinated term
credit facilities. Standard & Poor's noted that the affirmation
also reflects the company's increased measure of product and
end market diversity, as well as additional manufacturing
capabilities, which were acquired with the AT Plastics business.
AT Plastics is a leading North American manufacturer of specialty
polymer and films products. Integration risk is expected to be
manageable, as AT Plastics will continue to be run as a separate
business from Acetex's European acetyls operations. However, the
combined company, with revenues in excess of $400 million, will
still be subject to high leverage, cyclical swings in pricing and
profitability for many of its products, and exposure to volatile
raw material costs through its use of natural gas derivatives.

Completion of the acquisition is subject to the approval of 67% of
AT Plastics' shareholders at a special meeting scheduled for
Aug. 1, 2003. Should the AT Plastics acquisition not be completed,
Standard & Poor's said that it would affirm the existing ratings
on Acetex based on an assessment of the company as a stand-alone
entity.


ADELPHIA COMMS: Needs Until Oct. 20 to Complete Schedules
---------------------------------------------------------
Marc Abrams, Esq., at Willkie Farr & Gallagher, in New York,
says that the Adelphia Communications Debtors won't get their
Schedules of Assets and Liabilities, Lists of Executory Contracts
and Leases, and Statements of Financial Affairs filed before
August 1, 2003.  According to Mr. Abrams, the Debtors continue to
work diligently and expeditiously, with the assistance of their
professional advisors, on the preparation of their Schedules of
Assets. However, due to the complexity and diversity of their
operations and other demands of these cases, the Debtors fear that
it might not be possible for them to complete and file their
Schedules and Statements prior to the deadline.

Accordingly, the Debtors ask the Court to extend their deadline
to file Schedules and Statements to October 20, 2003.

Mr. Abrams asserts that the requested extension is warranted
because the Debtors are preoccupied in working on numerous
corporate, financial and legal issues involving, among other
things, the Securities and Exchange Commission, criminal
investigations, federal and state franchise regulatory
authorities, financial statement and audit activities, and the
myriad challenges incident to operating their cable and other
businesses.

While the request is without prejudice to ask for a further
extension should it become necessary, Mr. Abrams indicates that
the ACOM Debtors do, in fact, plan to file their Schedules by
August 1. (Adelphia Bankruptcy News, Issue No. 36; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


AFC ENTERPRISES: Audit Panel Conducts Probe into Q3 Adjustments
---------------------------------------------------------------
AFC Enterprises, Inc. (Nasdaq: AFCEE), the franchisor and operator
of Popeyes(R) Chicken & Biscuits, Church's Chicken(TM) and
Cinnabon(R), and the franchisor of Seattle's Best Coffee(R) in
Hawaii, on military bases and internationally, provided additional
information concerning the ongoing audit of its financial
statements for fiscal years 2000, 2001 and 2002 and the related
restatements.

The Company confirms that the Audit Committee of the Board of
Directors of AFC Enterprises, Inc. is engaged in an independent
investigation into quarter-end adjustments to reserve, asset and
accrual accounts on the books of the Company and certain related
matters.  The Audit Committee deemed it advisable to undertake the
investigation after the Company's independent auditors, KPMG LLP,
raised questions regarding certain quarter-end adjustments during
the course of the ongoing audit of the Company's financial
statements.

The purpose of the ongoing investigation is to, among other
things, determine whether the quarter-end adjustments were
properly recorded, and, if not, the reasons for the inaccuracies.
The Audit Committee has engaged an independent forensic accounting
firm to assist the Audit Committee and its independent counsel in
the investigation.  As disclosed in the Company's July 15, 2003
press release, the Audit Committee expects to complete its
investigation prior to the completion of the audit of the
Company's financial statements.

AFC Enterprises, Inc. (S&P, BB Corporate Credit & Senior Bank Loan
Ratings, Negative) is the franchisor and operator of 4,131
restaurants, bakeries and cafes as of May 18, 2003, prior to the
sale of Seattle Coffee Company to Starbucks Corporation, in the
United States, Puerto Rico and 32 foreign countries under the
brand names Popeyes(R) Chicken & Biscuits, Church's Chicken(TM),
Cinnabon(R) and the franchisor of Seattle's Best Coffee(R) in
Hawaii, on military bases and internationally.  AFC's primary
objective is to be the world's Franchisor of Choice(R) by offering
investment opportunities in highly recognizable brands and
exceptional franchisee support systems and services.  AFC
Enterprises had system-wide sales of approximately $2.7 billion in
2002 and can be found on the World Wide Web at http://www.afce.com


AIRTRAN AIRWAYS: Flight Attendants Nix Tentative Labor Agreement
----------------------------------------------------------------
AirTran Airways, a subsidiary of AirTran Holdings, Inc.
(NYSE:AAI), was informed by Association of Flight Attendants, AFL-
CIO, which represents AirTran Airways' work force of approximately
1,100 flight attendants, that the union membership has declined to
ratify its tentative agreement.

According to a statement issued by the AFA, AFA Master Executive
Council president Jon Edenfield stated, "The ultimate decision on
whether to accept or reject a tentative agreement lies in the
hands of the flight attendants. Our members have expressed their
concerns. Now we must sit back down with management to reach an
acceptable agreement that better addresses the issues that came to
light during this vote."

AirTran Airways is one of America's largest low-fare airlines -
employing more than 5,000 professional Crew Members and serving
492 flights a day to 43 destinations. The airline's hub is at
Hartsfield Atlanta International Airport, the world's busiest
airport (by passenger volume), where it is the second largest
carrier operating 189 flights a day. The airline never requires a
roundtrip purchase or Saturday night stay, and offers an
affordable Business Class, assigned seating, easy online booking
and check-in, the A-Plus Rewards frequent flier program, and the
A2B corporate travel program. AirTran Airways, a subsidiary of
AirTran Holdings, Inc., (NYSE:AAI), is the world's largest
operator of the Boeing 717, the most modern, environmentally
friendly aircraft in its class. In 2004, the company will begin
taking delivery of 100 Boeing 737-700s, one of the most popular
and reliable jet aircraft in its class. For more information and
reservations, visit http://www.airtran.com

As reported in Troubled Company Reporter's May 6, 2003 edition,
Standard & Poor's Ratings Services assigned its 'CCC' rating to
AirTran Holdings Inc.'s $100 million 7% convertible notes due
2023, offered under Rule 144A with registration rights. At the
same time, the rating was placed on CreditWatch with negative
implications. Existing ratings on AirTran Holdings and its major
operating subsidiary, AirTran Airways Inc., including the 'B-'
corporate credit rating, remain on CreditWatch with negative
implications, where they were placed on March 18, 2003. The
original CreditWatch placement reflected financial damage to the
airline industry from the effects of the Sept. 11, 2001, attacks
and their aftermath, and the Iraq war.


ALPHARMA INC: Posts $4.2 Million Net Loss for Second Quarter
------------------------------------------------------------
Alpharma Inc. (NYSE: ALO), a leading global specialty
pharmaceutical company, announced a second quarter 2003 net loss
and diluted loss per share of $4.2 million and $0.08,
respectively, including a $17.3 million ($0.33 per share) loss on
extinguishment of debt related to the April 2003 private placement
of Senior Notes due 2011.  Excluding the loss on extinguishment of
debt, net income and diluted earnings per share for the second
quarter were $13.1 million and $0.25 respectively, consistent with
company guidance of $0.23 to $0.27 DEPS.  In the second quarter of
2002, the company reported net income of $10.3 million and DEPS of
$0.20.  Revenues in the quarter were $334.4 million, an increase
of 11% versus 2002.  Excluding the impact of foreign currency,
revenues grew 5%.

"Human pharmaceutical revenues grew 19% in the second quarter, 12%
excluding currency, driven by our Active Pharmaceutical
Ingredients business and branded products in the U.S.
Pharmaceuticals business," commented Ingrid Wiik, President and
Chief Executive Officer of Alpharma. "International Generics
revenues increased modestly, excluding currency, as volume
increases were offset by price declines.  Animal Health revenues
declined reflecting the expected increased generic competition.
Overall, diluted earnings per share grew 25% versus last year,
excluding the loss on extinguishment of debt."

"Although second quarter diluted earnings per share met our
expectations, our U.S. Pharmaceuticals business had a difficult
quarter," said Ms. Wiik. "The remediation of our U.S. facilities
is a top priority for Alpharma and is challenging for our
operations.  Our remediation efforts continue to require a limited
liquid product offering and significantly reduced production in
Baltimore.  Remediation spending continues at high levels
resulting in lower operating margins.  In addition, the production
of branded products created a bottleneck for certain modified
release generic products that the company plans to correct in the
third quarter as additional capacity comes on line."

For the fourth consecutive quarter, free cash flow, excluding debt
placement fees was positive, amounting to approximately $6 million
in the quarter.  Free cash flow is defined as operating cash flow
after capital expenditures and dividend payments.  The debt
placement fees of $22.2 million, related to the private placement
of Senior Notes due 2011, negatively impacted free cash flow in
the quarter.  The proceeds from this private placement were used
to refinance existing debt at a more favorable interest rate.  The
effective interest rate on the associated debt was reduced from
12.5% to 8.625%. Total debt at June 30, 2003 was $892 million.

                 Second Quarter 2003 Business Review

Human Pharmaceuticals

U.S. Pharmaceuticals:  U.S. revenues increased 6.9% in the quarter
compared to the prior year driven by sales of the company's
branded product, Kadian.  Sales of generic products declined 12%
due to remediation efforts at the Baltimore liquids plant and
modified release capacity constraints in the Elizabeth solid dose
plant.  In the second quarter, specialized modified release
manufacturing capacity was dedicated to Kadian production in order
to address product shortages and expected demand.  The product
shortages were created by underproduction of Kadian in the first
quarter.  As a result, production was reduced on certain generic
products resulting in backorders at the end of the second quarter.
To eliminate the capacity constraint for this specialized
production, the company plans to expand its capacity in the third
quarter.  The company believes it now has sufficient branded
product in the marketplace to support expected demand.  Due to
increased remediation efforts, total annual production in
Baltimore has been reduced. Production at this site in the second
half of 2003, however, is expected to significantly increase
versus first half levels.

While operating margins in U.S. Pharmaceuticals were positively
impacted by branded sales, overall margins declined to 6.3% from
14.7% last year due primarily to lower generic production and
remediation efforts, including approximately $5 million of
external consulting spending.  Margins were further impacted by
the addition of internal quality and manufacturing personnel
associated with remediation efforts.  In addition, approximately
$3 million of inventory reserves were recorded in the second
quarter of 2003 for liquid products that have been discontinued.

International Generics:  Revenues increased 22% to $98.4 million
compared to $80.5 million in 2002.  Excluding positive currency
impacts, revenues grew 5% as the impact of new products and higher
volumes in key markets was offset by lower prices.

International Generics operating margins were 9.3% in 2003
compared to 12.1% in the second quarter of 2002.  New product
launches favorably impacted margins in 2002.  Margins in 2003 were
negatively impacted by lower prices.

Active Pharmaceutical Ingredients:  API revenues increased to
$35.7 million compared to revenues of $19.5 million in 2002.
Excluding the impact of foreign currency, revenues grew 76%.  This
growth was driven by significant price increases on selected
products, and higher volumes of Vancomycin.  Operating margins
increased to 62.2% compared to 48.2% in 2002, principally due to
increased pricing.

The expansion of Vancomycin capacity in the Copenhagen plant is
nearing completion with increased manufacturing scheduled for
August 2003.  The company plans to commence capacity expansion for
Tobramycin at the Copenhagen site in December 2003.

Animal Health

Second quarter 2003 revenues declined to $68.8 million compared to
$78.4 million in 2002.  Revenue declines reflect increased
competition in the swine and cattle segments.  Operating margins
declined to 4.4% compared to 8.8% in last year's second quarter
reflecting lower prices.

           Second Quarter Comparison of Other Consolidated
                      Income Statement Items

Interest expense and amortization of debt issuance costs decreased
$2.8 million year-to-year due to decreased debt levels, lower
interest rates, and reduced amortization caused by the write-off
of unamortized loan costs.

Loss on extinguishment/conversion of debt was $28.4 million in the
second quarter of 2003.  The loss includes $22.2 million of
placement fees paid to the initial purchasers of the related notes
and the write-off of $6.2 million of unamortized loan costs.

Other income (expense) was $1.2 million of income in 2003 compared
to ($1.7) million of expense in 2002, reflecting foreign exchange
gains in 2003 compared to losses in 2002.

The effective tax rate in the second quarter of 2003 was 29%
excluding the loss on extinguishment of debt and the related tax
benefit.  Including these costs, the tax benefit was 58%.

Remediation

Based on progress to date, the company has revised its estimate
for remediation spending in 2003.  The company originally
estimated that costs incurred at its Baltimore site would total
$30 million over 18-20 months, and costs incurred at its Elizabeth
site would be $8 million in 2003.  A total of $23 million in costs
was expected to impact 2003: $15 million related to the Baltimore
site and $8 million to the Elizabeth site.  These estimates
included both external spending on consultants and additional
quality and manufacturing personnel to comply with cGMP
requirements.  Year-to-date 2003 costs amount to $19 million, of
which $12 million relates to external consultants.

The current estimated cost for full year 2003 is $36 million of
which $18 million relates to external consultants. The increased
costs are largely due to the need for more extensive work in
Baltimore following the completion by the company of a systems
assessment, and the acceleration of certain remediation efforts in
Elizabeth from year-end 2003 to the third quarter of 2003.  The
company expects an FDA inspection of the Baltimore site in the
third quarter and an inspection of the Elizabeth facility late in
the third quarter or early in the fourth quarter.  The company
expects to substantially complete remediation in Elizabeth in 2003
and in Baltimore in 2004.

Approximately half of the estimated full year 2003 costs are the
result of increased internal resources with the remainder relating
to the costs of external consultants.  The additional internal
staffing levels are necessary to support the company's commitment
to FDA compliance.  The additional costs associated with these
added internal resources are expected to continue beyond the
remediation period and result in future productivity savings and
increased production.  External consulting costs declined
sequentially in the first and second quarters of 2003 and are
expected to continue to decline throughout the year.

                         2003 Outlook

The company is maintaining its previously announced full year DEPS
guidance of $1.15 to $1.25, excluding the loss on extinguishment
of debt.  The company's outlook for third quarter 2003 DEPS is
$0.25 to $0.30.  The second half outlook includes continued strong
performance by the API business, a significant increase in liquids
production, and normal seasonal patterns in our Animal Health
business.  The company's outlook also excludes to the potential
effect of any future transactions outside the ordinary course of
the company's business.  On a U.S. GAAP basis, including the loss
on extinguishment of debt, the company expects 2003 DEPS in the
range of $0.82 - $0.92.  The company also affirmed its full year
outlook for free cash flow of $70 million, excluding debt
placement fees.

"Our highest focus continues to be remediation in our U.S.
Pharmaceutical sites and we are making clear progress.  We have
significantly enhanced validation practices at both sites.  We
expect to substantially complete remediation in Baltimore in 2004,
and we have accelerated plans in Elizabeth," commented Ingrid
Wiik, President and Chief Executive Officer of Alpharma. "Our
operating profile continues to improve.  Our higher margin Kadian
and API businesses continue to grow, positioning the company for
margin improvement going forward.  Finally, we expect to continue
to improve working capital, generate free cash flow and reduce
debt levels."

In addition to the risks to its operations described in the
company's 2002 Annual Report on Form 10-K, the company's 2003
outlook assumes the ability to operate its Baltimore and Elizabeth
plants at presently estimated production levels and remediation
spending consistent with comments above.  Assumptions inherent in
the company's outlook could be impacted by future FDA actions or
new information acquired as the company continues to implement its
corrective action plan.  This outlook includes the company's
assessment of the full positive impact of its recent price
increases on selected API products.

Alpharma Inc. (NYSE: ALO) is a growing specialty pharmaceutical
company with expanding global leadership positions in products for
humans and animals. Uniquely positioned to expand internationally,
Alpharma is presently active in more than 60 countries.  Alpharma
is the #5 manufacturer of generic pharmaceutical products in the
U.S., offering solid, liquid and topical pharmaceuticals.  It is
also one of the largest manufacturers of generic solid dose
pharmaceuticals in Europe, with a growing presence in Southeast
Asia. Alpharma is among the world's leading producers of several
important pharmaceutical-grade bulk antibiotics and is
internationally recognized as a leading provider of pharmaceutical
products for poultry, swine, cattle, and vaccines for farmed-fish
worldwide. For more information on the Company, visit its Web site
at http://www.alpharma.com

As reported in Troubled Company Reporter's April 21, 2003 edition,
Standard & Poor's Ratings Services assigned a 'B+' senior
unsecured debt rating to generic drug maker Alpharma Inc.'s new
$220 million in senior unsecured notes due 2011.

At the same time, Standard & Poor's affirmed its 'BB-' corporate
credit and senior secured debt ratings on Alpharma, as well as
the company's 'B' subordinated debt rating. In addition, Standard
& Poor's affirmed ratings on a subsidiary company, Alpharma
Operating Corp., including its 'BB-' corporate credit and 'B'
subordinated debt ratings.


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

As Special Counsel, Cohen will:

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

      -- handle discovery matters;

      -- communicate and negotiate with PwC counsel;

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

      -- assist AMERCO in any mediation with PwC; and

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

Cohen's retention is memorialized in an Engagement Agreement dated
October 23, 2002.  With the Court's approval, the Engagement
Agreement, which provides the fee structure, is filed with the
Court under seal and not available for public review.  The fee
structure reflects:

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

      (b) the fee structure Cohen and other leading commercial
          litigation firms typically utilized. (AMERCO Bankruptcy
          News, Issue No. 3; Bankruptcy Creditors' Service, Inc.,
          609/392-0900)


AMERICA WEST: Plans to Sell $75 Million Issue Price of Sr. Notes
----------------------------------------------------------------
America West Airlines Inc., a wholly-owned subsidiary of America
West Holdings Corporation (NYSE: AWA), intends to sell, subject to
market and other conditions, $75 million issue price of Senior
Exchangeable Notes due 2023, to qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933.  The notes
are expected to be guaranteed by, and exchangeable for class B
common stock of, America West Holdings Corporation.

In addition, America West Airlines will grant the initial
purchasers a 30-day option to buy up to an additional $15 million
issue price of the notes. The interest rate, exchange rate
(including the circumstances in which a holder may exchange notes)
and offering price are to be determined by negotiations between
America West Airlines and the initial purchasers of the notes.
America West Airlines plans to place $42.9 million of the net
proceeds in a cash collateral account to secure scheduled
principal and interest payments on certain of its indebtedness
through September 30, 2004 and use the balance of the net proceeds
for working capital and general corporate purposes.

As reported in Troubled Company Reporter's July 24, 2003 edition,
Standard & Poor's Ratings Services affirmed its ratings on America
West Holdings Corp. and subsidiary America West Airlines Inc.,
including the 'B-' corporate credit ratings, and removed them from
CreditWatch, where they were placed on March 18, 2003. The outlook
is negative.

"The ratings on America West reflect risks relating to the adverse
airline industry environment, a weak balance sheet, and limited
financial flexibility," said Standard & Poor's credit analyst
Betsy Snyder. "After significant losses incurred since 2001, which
almost resulted in its filing for Chapter 11 bankruptcy
protection, the company finally reported a profit in the second
quarter of 2003, even before the inclusion of an $81 million
refund from the federal government," the credit analyst continued.


AOL TIME WARNER: June 30 Working Capital Deficit Stands at $2BB
---------------------------------------------------------------
AOL Time Warner Inc. (NYSE:AOL) reported financial results for its
second quarter ended June 30, 2003.

Revenues for the quarter increased 6% over the same period in 2002
to $10.8 billion, led by increases at the Filmed Entertainment,
Networks and Cable divisions.

Operating Income before Depreciation and Amortization decreased 4%
to $2.2 billion, including a total of $277 million in non-cash
impairments of goodwill and intangible assets, offset partially by
a $43 million gain on an asset sale. Excluding these impairments
and the gain, Operating Income before Depreciation and
Amortization increased 6% to $2.4 billion, reflecting double-digit
increases at the Networks, Cable and Filmed Entertainment
businesses, offset in part by declines at the America Online
division.

Operating Income declined 15% to $1.3 billion, further reduced by
higher levels of depreciation and amortization.

For the first six months of 2003, the Company generated $3.8
billion in Cash Flow from Operations, and Free Cash Flow totaled
$2.5 billion. Free Cash Flow benefited from the favorable timing
of working capital requirements and approximately $350 million of
net cash received through the settlements of certain litigation.

At the end of the quarter, the Company's net debt totaled $24.2
billion, versus $26.3 billion at March 31, 2003. The reduction in
net debt reflected proceeds of $1.225 billion received during the
quarter from the sale of a 50% ownership stake in the Comedy
Central cable TV network and the aforementioned net benefit from
certain litigation settlements, as well as the generation of
significant Free Cash Flow. This decrease was offset partially
during the quarter by $813 million of incremental borrowings for
the repurchase of all non-voting preferred shares in AOL Europe.

Chairman and Chief Executive Officer Dick Parsons said: "Our solid
results in this quarter and the first half of the year give us
confidence that we can deliver on all of our 2003 financial
objectives. During the second half of the year, we will continue
to focus on key priorities, especially reducing our absolute debt
levels through Free Cash Flow generation and other de-leveraging
initiatives -- including another $1 billion from last week's
agreement to sell Warner Music's DVD/CD manufacturing and physical
distribution businesses. At the same time, we'll look to prudently
invest in our businesses to keep them strong, and extend their
already leading competitive positions. Our goal for the remainder
of this year is to keep laying the foundation that will enable us
to exit 2003 with more momentum than we had when we entered it,
with an eye toward achieving strong, sustainable growth next year
and beyond."

                   Consolidated Reported Results

The Company reported Net Income of $1.1 billion, or $0.24 per
basic and $0.23 per diluted common share, respectively, for the
second quarter of 2003. The Net Income in 2003 includes $277
million of pretax non-cash impairments of goodwill and intangible
assets at the Networks and Publishing divisions, a $43 million
pre-tax gain on a Filmed Entertainment asset sale, $12 million of
merger and restructuring charges, $542 million of pre-tax gains
related to certain investments, principally related to the sale of
Comedy Central, a pre-tax gain of approximately $760 million
associated with the Microsoft settlement, and $151 million of non-
cash investment charges, due primarily to AOL Japan and NTV-
Germany.

This compares to Net Income from continuing operations of $394
million, or $0.09 per basic and diluted common share before
discontinued operations for the three months ended June 30, 2002,
including $364 million of pre-tax, non-cash investment charges and
$90 million in gains related to the sale of certain investments.
After discontinued operations, the Company recorded Net Income of
$396 million, or $0.09 per basic and diluted common share, for the
three months ended June 30, 2002.

At June 30, 2003, the Company's balance sheet shows that its total
current liabilities exceeded its total current assets by about $2
billion.

                          America Online

America Online's Operating Income before Depreciation and
Amortization decreased 9% in the quarter on revenues that declined
6%. Operating Income decreased 23%.

Growth in America Online's Subscription revenues was more than
offset by declines in Advertising and Other revenues. Subscription
revenues grew 6%, principally due to strong gains at AOL Europe,
which benefited primarily from favorable foreign currency exchange
rates ($71 million), year-over-year membership growth and higher
pricing, as well as a modest increase in the US that reflected the
impact of a year-over-year increase in the number of broadband
subscribers. This growth more than offset the effect of declines
in US narrowband membership. Advertising revenues decreased by
48%, as a result of the reduction in the benefits from prior-
period contract sales of approximately $140 million, as well as
lower intercompany revenues. Other revenues declined 62%, due
mainly to AOL's previously announced strategy to reduce the
promotion of its merchandise business.

The decrease in Operating Income before Depreciation and
Amortization versus the year-ago period reflects overall expense
reductions being more than offset by lower revenues. During the
quarter, America Online had lower Advertising revenues and
increased expenses relating to its broadband initiatives, which
were partially offset by improved results at AOL Europe and lower
domestic narrowband network costs. Operating Income was further
affected by higher depreciation due mainly to the continuing
impact of increased ownership of network assets.

At June 30, the AOL service had 25.3 million members in the US, a
decrease of 1.2 million from the same quarter last year (a decline
of 846,000 compared to the quarter ended March 31, 2003).
Approximately 45% of this quarterly sequential decline reflects
the Company's identification and removal from the subscriber base
of non-paying members, consisting principally of those with
service violations and members failing to appropriately complete
the registration and payment authorization process.

At June 30, the AOL service had 6.2 million members in Europe, an
increase of 238,000 versus the year-ago quarter (a decline of
52,000 compared to the quarter ended March 31, 2003).

                            Cable

Cable's Operating Income before Depreciation and Amortization
climbed 11% in the quarter on a 9% increase in revenues. Operating
Income increased 6%.

Subscription revenues grew a strong 13%, driven by higher basic
cable rates and increased basic, digital and high-speed data
subscribers. Advertising revenues declined 31%, due to decreases
in advertising purchased by programming vendors to promote new and
existing channels and in intercompany advertising, offset
partially by a 13% increase in other third-party advertising.

The increase in Operating Income before Depreciation and
Amortization reflected primarily the increase in subscription
revenues and the improved profitability of the high-speed data
business, offset partly by the decline in high-margin advertising
and higher programming costs. Operating Income was further
affected by an increase in depreciation expense stemming primarily
from the cumulative investment in customer premise equipment
(digital converters and modems).

Basic cable subscribers increased at an annual rate of 0.9%. Time
Warner Cable added 136,000 net digital video subscribers during
the quarter to reach a total of 4.1 million, representing 37% of
basic cable subscribers.

Time Warner Cable added 170,000 net residential high-speed data
subscribers this quarter for a total of 2.9 million, representing
16% of eligible homes passed.

                     Filmed Entertainment

Filmed Entertainment's Revenues were up 16% in the quarter.
Operating Income before Depreciation and Amortization rose $79
million (or 24%), including a $43 million gain from an asset sale.
Excluding this gain, Operating Income before Depreciation and
Amortization climbed 11%.

Operating Income grew 26%.

The increase in revenues was driven by worldwide theatrical
success, led by Warner Bros. Pictures' The Matrix Reloaded, as
well as continued worldwide growth in DVD revenues and increases
in television revenues related mainly to Seinfeld and Friends.

The growth in Operating Income before Depreciation and
Amortization as well as Operating Income reflected the revenue
increases and improved margin contribution from the theatrical
business, as well as the $43 million gain from the sale of Warner
Bros. Entertainment's consolidated theater chain in the UK.

Released May 15, The Matrix Reloaded has generated over $700
million in worldwide box office to date - already making it the
third highest-grossing film in the history of Warner Bros.

Warner Home Video ranked #1 in the US for the six months ended
June 30 in combined DVD and VHS sales and rentals - led by Warner
Bros.' Harry Potter and the Chamber of Secrets - capturing 22.9%
and 19.1% shares, respectively.

For the six months ended June 30, Warner Bros. Pictures and New
Line generated $572 million and $239 million, respectively, in
domestic box office - combining for an industry share of 19.6% -
and Warner Bros. Pictures also ranked first in international box
office having generated nearly $1.0 billion.

Warner Bros. Television will produce a record 27 series (13
returning and 14 new programs) for the Fall 2003-2004 primetime
schedule, supplying two or more shows to each of the six broadcast
networks. In addition, Telepictures Productions will have two
broadcast network primetime series on the air this Fall.

Last week, Warner Bros. Television received 38 Primetime Emmy
nominations, led by the "The West Wing" with 15 nominations,
including Outstanding Drama (which it has won the last three
years), as well as "Friends" with 11 nominations, including
Outstanding Comedy (which it won last year).

                          Networks

Network's Revenues were up 10% in the quarter. Operating Income
before Depreciation and Amortization decreased $61 million (or
15%), including a non-cash impairment charge of $178 million
related to the winter sports teams: the NHL's Atlanta Thrashers
and NBA's Atlanta Hawks. Excluding this impairment charge,
Operating Income before Depreciation and Amortization increased
28%.

Operating Income decreased 18%.

Subscription, Advertising and Content revenues all increased
during the quarter. Subscription revenue gains of 6% resulted from
an increase in subscribers and subscription rates at the Turner
networks and HBO. Advertising revenues increased a strong 17%,
with a 16% increase at the Turner networks and 23% at The WB, both
due primarily to higher CPMs and ratings as well as higher
revenues related to additional NBA playoff games on TNT. Content
revenues increased 15%, mainly reflecting higher ancillary sales
of HBO programming.

Operating Income before Depreciation and Amortization as well as
Operating Income benefited from revenue increases, particularly
high-margin advertising, and from lower marketing spend and the
absence of comparable reserves accrued in 2002 related to
receivables from a cable system operator. These gains were more
than offset by the aforementioned $178 million impairment of the
winter sports teams' intangible assets, which were originally
recorded at the time of the America Online-Time Warner merger, and
increases in entertainment and news programming costs.

For the quarter, TNT was the #1 basic cable network among adults
18-49 and 25-54 in both primetime and total day, while the TBS
Superstation ranked #1 among adults 18-34 and #2 among adults 18-
49 in total day.

Over the 2002-2003 season, The WB delivered the largest gains of
any broadcast network across all 18-34 demographics and adults 18-
49, while maintaining the youngest median age on broadcast network
television.

HBO last week received a record 109 Primetime Emmy nominations --
the most of any other network for the third year in a row. Six
Feet Under topped HBO's list of nominees with 16 nominations, the
most nominations of any show on TV this season.

                             Music

Warner Music Group's Operating Income before Depreciation and
Amortization rose 3% in the quarter on a revenue increase of 8%.
Operating Income decreased from $29 million to $6 million.

The revenue increase was driven mainly by increased shipments of
new and carryover recorded music releases and favorable foreign
currency exchange rates ($49 million).

The modest increase in Operating Income before Depreciation and
Amortization was due to improved results at Warner Music's
manufacturing and domestic recorded music operations. Those
improved results more than offset the recording of a $6 million
restructuring charge and lower results in its music publishing
business and international recorded music operations, due in part
to higher royalty advance write-offs. The increase in Operating
Income before Depreciation and Amortization was more than offset
by an increase in depreciation expense relating to DVD
manufacturing expansion and a year-over-year increase in the
amortization expense associated with a reduction in the
amortization period of the recorded music catalog and publishing
copyrights.

For the quarter, Warner Music improved its competitive position
despite difficult industry trends. According to Soundscan, Warner
Music's domestic album share through June 30 was 18.9% - ranking
second among all music companies - and up from 17.0% at year-end
2002.

Top worldwide sellers in the quarter included such artists as
Linkin Park, Cher, Fleetwood Mac, Madonna and Staind - whose
albums all reached Soundscan's top five.

                          Publishing

Publishing's Revenues were up 2% in the quarter. Operating Income
before Depreciation and Amortization decreased $107 million (or
32%), including a non-cash impairment charge of $99 million at the
AOL Time Warner Book Group. Excluding this charge, Operating
Income before Depreciation and Amortization decreased 2%.

Operating Income, including the $99 million charge, decreased $118
million (or 42%).

Revenue growth reflected modest increases in Advertising and
Content revenues. Advertising revenues grew 2%, led by gains at
Real Simple, Southern Living, Cooking Light and Parenting, which
more than offset declines at news and business magazines. The
Content revenues increase was driven by strong sales at the AOL
Time Warner Book Group. Other revenues slightly decreased, related
primarily to declines at Time Life, offset in part by an increase
at Southern Living At HOME.

Operating Income before Depreciation and Amortization decreased
primarily as a result of the aforementioned $99 million charge
related to the impairment of the AOL Time Warner Book Group's
goodwill and intangible assets originally recorded at the time of
the America Online-Time Warner merger. In addition, the results
also included a $17 million year-over-year decline at Time Life
(including a $6 million restructuring charge), offset principally
by the increase in advertising revenues and a reduction in
employee benefit accruals. Operating Income was further affected
by the increased amortization associated with the acquisition of
Synapse.

Based on Publishers Information Bureau data, Time Inc.'s 2003
industry-leading share of overall domestic advertising through
June 30 was 24.7%.

Time Inc. earned two National Magazine Awards this spring -
Parenting for General Excellence and Sports Illustrated for
Profile Writing.

The AOL Time Warner Book Group added 11 titles to the New York
Times bestsellers list this quarter, bringing the year-to-date
total to 32. Popular new titles included James Patterson's The
Lake House and Nicholas Sparks' The Guardian, as well as the mass
market releases of Patterson's The Beach House and Nelson
DeMille's Up Country.

                 Update on SEC Investigation

The SEC continues to investigate a range of transactions
principally involving the Company's America Online unit. In its
Form 10-K, filed in March of this year, the Company disclosed
that, with respect to two related transactions between America
Online and Bertelsmann, A.G., the staff of the SEC had expressed a
preliminary view that the accounting for those transactions was
not correct. Since that time, the SEC staff has reviewed those
transactions further, and the Office of the Chief Accountant of
the SEC has recently informed the Company that it has concluded
that the accounting for these transactions is not correct. Based
on their knowledge and understanding of the facts of these
transactions, the Company and its auditors continue to believe
that the accounting for those transactions is appropriate, but it
is possible that the Company may learn additional information as a
result of its own review, discussions with the SEC and/or the
SEC's ongoing investigation that would lead the Company to
reconsider its views of the accounting for these transactions. For
a more detailed discussion of this matter, please see Note 1 of
the Notes to Consolidated Financial Statements, included as part
of this release.

AOL Time Warner is the world's leading media and entertainment
company, whose businesses include interactive services, cable
systems, filmed entertainment, television networks, music and
publishing.


ARVINMERITOR INC: Appoints Rakesh Sachdev VP and Controller
-----------------------------------------------------------
ArvinMeritor, Inc. (NYSE: ARM) announced that Rakesh Sachdev has
been named to the position of vice president and controller,
effective Aug. 1, 2003. In this position, he is responsible for
worldwide financial controls; systems; financial planning and
management reporting; accounting policies, and external reporting.
Sachdev is also directly involved in the company's growth
strategies and analyst communications. Before being named to this
position, he was vice president and general manager for the
ArvinMeritor Commercial Vehicle Systems worldwide braking systems
product group. Sachdev will report directly to Carl Soderstrom,
senior vice president and chief financial officer.

"We are confident that Rakesh will be a real asset to the
organization in his new role," said Larry Yost, chairman and CEO
of ArvinMeritor. "His solid financial background and his in-depth
knowledge of our business will help ensure that we maintain the
highest standards in accounting practices and reporting."

Sachdev joined ArvinMeritor in 1999, after more than 18 years of
senior management experience with Cummins Inc., most recently as
chief financial officer of Cummins' Automotive Business Unit.
Prior to that, he served as managing director, chief operating
officer and chief financial officer for Cummins' manufacturing,
marketing and distribution business in Mexico.

A graduate of the Indian Institute of Technology in New Delhi,
India, with a bachelor's degree in mechanical engineering, Sachdev
holds a master's degree in business administration in finance from
Indiana University, as well as a master's degree in mechanical
engineering from the University of Illinois.

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.


BANKAMERICA: Fitch Takes Various Rating Actions on 30 Classes
-------------------------------------------------------------
Fitch Ratings has performed a review of the BankAmerica
Manufactured Housing Transactions. Based on the review, the
following rating actions have been taken:

Series 1995-BA1:

         -- Class A-3 affirmed at 'AAA';
         -- Class A-4 affirmed at 'AA-';
         -- Class B-1 affirmed at 'BBB';
         -- Class B-2 downgraded to 'CCC' from 'B'.

Series 1996-1:

         -- Classes A-5 - A-6 affirmed at 'AAA';
         -- Class A-7 affirmed at 'AA-';
         -- Class B-1 affirmed at 'C';
         -- Class B-2 affirmed at 'C'.

Series 1997-1:

         -- Classes A-7 - A-9 affirmed at 'AAA';
         -- Class M downgraded to 'CCC' from 'BB-';
         -- Class B-1 downgraded to 'C' from 'CCC';
         -- Class B-2 affirmed at 'C'.

Series 1997-2:

         -- Classes A-7 - A-9 affirmed at 'AAA';
         -- Class M downgraded to 'CCC' from 'B+';
         -- Class B-1 downgraded to 'C' from 'CC';
         -- Class B-2 affirmed at 'C'.

Series 1998-1:

         -- Class A-1 is affirmed at 'AAA';
         -- Class M, rated 'AA-', placed on Rating Watch Negative;
         -- Class B-1 rated 'BBB' placed on Rating Watch Negative;
         -- Class B-2 downgraded to 'B' from 'BB' and removed from
            Rating Watch Negative.

Series 1998-2:

         -- Classes A-6 - A-7 affirmed at 'AAA';
         -- Class M downgraded to 'BBB' from 'A+' and removed from
            Rating Watch Negative;
         -- Class B-1 downgraded to 'B' from 'BB';
         -- Class B-2 downgraded to 'CCC' from 'B'.

BankAmerica Housing Services was purchased by Greenpoint Credit in
1998. Although Greenpoint exited the manufactured housing lending
business in January 2002, the company continues to service its
portfolio of manufactured housing loans. The transactions reviewed
pay principal due to senior bonds prior to paying interest due to
subordinate bonds. Higher than expected losses have caused
significant interest shortfalls to various subordinate bonds in
the transactions. While the structures allow for interest
shortfalls to be recovered in the future in the event of
sufficient excess spread, Fitch assessed the likelihood of the
bondholder receiving all interest due when determining the bond's
credit rating.


BIOMETRICS SECURITY: Will Seek New Funding or Cease Operations
--------------------------------------------------------------
After completing and submitting to the SEC the fiscal year 2002
financial information on Form 10KSB on Friday, July 11, 2003,
Biometrics Security Technology (formerly Augment Systems, Inc.)
learned through reports from various media outlets that the United
States Securities and Exchange Commission obtained a court order
freezing the assets of, and appointing a receiver for, Lancer
Management Group. The action names Lancer Offshore, Inc., (the
Company's primary shareholder) as a relief defendant. The case,
pending in the U.S. District Court for the Southern District of
Florida, is styled SEC v. Michael Lauer, Lancer Management Group,
LLC Defendants and Lancer Offshore, Inc., Lancer Partners, LP,
Omnifund, Ltd., LSPV, Inc., and LSPV, LLC Relief Defendants #
(Case No. 03-80612-CIV-ZLOCH, SD Fla).

Because the Company depends upon Lancer as its primary funding
source, the Company will, in all likelihood, either seek
alternative funding sources or cease operations completely.

The Company lacks adequate funds and cannot carry out its business
plan or comply with its regulatory responsibilities on an ongoing
basis. Accordingly, Laurence S. Isaacson resigned as President and
Director of the Company, and Jeffrey Barocas resigned as the
Company's Chief Financial Officer effective July 14, 2003.


BUDGET GROUP: BRACII Sues Jaeban U.K. to Recover GBP3 Million
-------------------------------------------------------------
On March 5, 2001, BRAC Rent-A-Car International, Inc. and Jaeban
U.K. Limited signed an Umbrella Agreement, which included, among
other things, an International Prime License Agreement, whereby
BRACII agreed to license the Budget trademark to Jaeban in return
for certain royalty and other payments.  In addition to the
royalty payments, the License Agreement contemplates expenditures
by both licensor-BRACII and licensee-Jaeban.

Joseph A. Malfitano, Esq., at Young Conaway Stargatt & Taylor LLP,
in Wilmington, Delaware, informs the Court that since June 2002,
BRACII has expended considerable resources and devoted significant
time to reconciling amounts under the License Agreement.  Despite
these efforts, BRACII and Jaeban have been unable to agree on a
reconciliation of Jaeban's account under the License Agreement.
At issue are payments owed by Jaeban for, among other things,
royalties, airport concessions, rent, insurance, and customer
complaints during the calendar years 2001, 2002 and 2003.

As part of the sale process regarding the EMEA Operations, BRACII
notified Jaeban that the Debtors does not owe anything to Jaeban
under the License Agreement, and that in fact Jaeban owed a net
amount to BRACII.  Jaeban objected and disagreed with BRACII's
analysis.  Jaeban asserts that BRACII owes them a net cure
amount.

Despite ongoing negotiations between BRACII and Jaeban
representatives in 2002 and 2003, Jaeban declined BRACII's
proposed reconciliation for net amounts owed during 2001 to 2003,
and the parties have been unable to agree on any setoff amounts
to which Jaeban may be entitled.  According to BRACII's books and
records, Jaeban owes them GBP812,484.91 pursuant to the License
Agreement in 2001.  For 2002, Jaeban owes them GBP2,034,454.81.
For 2003, Jaeban owes them GBP159,150.38.  In sum, for 2001
through 2003, Jaeban owes BRACII GBP3,006,090.10.

For a period of at least 18 months, Jaeban has taken possession
of money belonging to BRACII.  Jaeban now refuses to turn over
this money to the Debtors.

Mr. Malfitano asserts that this money is property of the Debtors'
estate and is owed to BRACII pursuant to a matured debt payable
by Jaeban under the License Agreement and should be properly
turned over to the Debtors.

Pursuant to Section 542 of the Bankruptcy Code, the Debtors ask
the Court to compel Jaeban U.K. Limited to immediately turn over
GBP3,006,090.10, plus interest and costs owed to BRACII. (Budget
Group Bankruptcy News, Issue No. 23; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


BURLINGTON: Walker Rucker Wants to Conduct Rule 2004 Examination
----------------------------------------------------------------
Pursuant to Rule 2004 of the Federal Rules of Bankruptcy
Procedure, Walker Rucker seeks the Court's authority to examine
the Burlington Industries Debtors and its CEO, George Henderson,
and to direct the production of documents relating to the
examination.  Mr. Rucker is an equity security holder of the
Debtors and a party-in-interest under Section 1109(b) of the
Bankruptcy Code.

Jeffrey C. Wisler, Esq., at Connolly, Bove, Lodge & Hutz, in
Wilmington, Delaware, informs the Court that the scope of the
examinations of Mr. Henderson and a designated representative of
the Debtors will investigate whether any acts or conduct by the
Debtors' board of directors or management give rise to claims or
causes of action, including derivative actions, that have not
been identified or disclosed in the Debtors' schedules or
disclosure statement.

The acts and conduct to be investigated include, without
limitation:

     (1) the creation, capitalization, ownership in, financial
         dealings with and operation of Nano-Tex, LLC and Nano-Tex,
         Inc.;

     (2) the creation, capitalization, ownership in, financial
         dealings with and operation of Burlington Worldwide
         Limited, LLC; and

     (3) any changes or amendments to the Bank Credit Agreement
         during the one year before the Debtors' bankruptcy,
         including the communications and negotiations leading to
         those changes or amendments.

Mr. Wisler further informs the Court that the documents Mr.
Rucker wish to examine are:

     (1) Corporate Documents relating to Nano-Tex, LUC, Nano-Tex,
         Inc., and Burlington Worldwide Limited, LUC including
         without limitation:

         (a) any and all documents relating to capitalization of
             the entity, ownership interests, or options;

         (b) any and all documents relating to company structure,
             operation, and governance, like bylaws, operating
             agreements, etc.;

         (c) any and all minutes or other documents relating to
             meetings or communications between members;

         (d) any and all documents relating to any form of
             compensation paid to officers, managers, directors, or
             members.

     (2) Any and all documents involving Nano-Tex, LLC, Nano-Tex,
         Inc., and Burlington Worldwide Limited, LLC relating to
         licensing agreements or other agreements with any foreign
         or domestic entity, including those with the Debtors and
         its affiliated entities;

     (3) Any and all documents relating to the equity incentive
         plan adopted in April 2000 granting options and membership
         units in Nano-Tex to Messrs. Englar, Henderson, McGregor,
         Peters, McCallum, and certain other executive officers and
         members of Burlington; and

     (4) Any and all documents relating to amendments or changes
         during the year prior to the Debtors' bankruptcy filing to
         the Debtor's borrowing arrangements and relationship with
         the lenders who are parties to the $525,000,000 Bank
         Credit Agreement entered by the Debtors on December 5,
         2000. (Burlington Bankruptcy News, Issue No. 36;
         Bankruptcy Creditors' Service, Inc., 609/392-0900)


CABLE SATISFACTION: Secures CCAA Stay Extension and New Facility
----------------------------------------------------------------
Cable Satisfaction International Inc., (TSX: CSQ.A) announced the
execution of an amendment to the credit facility of its subsidiary
Cabovisao - Televisao por Cabo, S.A., providing Cabovisao with
access to an additional euro 6.0 million ($9.6 million as of
July 22, 2003) under an interim liquidity facility committed by
Caisse de depot et placement du Quebec. Under this agreement,
Cabovisao will have immediate access to euro 1.5 million and can
access an additional euro 4.5 million at a later date, subject to
satisfactory agreements with its trade creditors and the
satisfaction of other conditions. This financing will allow
Cabovisao to maintain normal service to customers and pay
employees under usual conditions over the coming months.

Csii also announced it has obtained from the Quebec Superior Court
an extension until October 15, 2003 of the court order granted
last month under the Companies' Creditors Arrangement Act. The
Company expects to file a formal plan of arrangement and
reorganization by July 25 and to mail details to creditors on or
before September 15, 2003. Cabovisao is not subject to this court
order.

In order for the recapitalization and restructuring plan announced
by Csii on June 13, 2003 to become effective, a court-supervised
vote will be required to obtain consent from the Company's
unsecured creditors as prescribed by Canadian law. In addition,
implementation of any court- sanctioned plan will require or be
subject to the approval of Cabovisao's bank syndicate,
satisfactory agreements with Cabovisao's trade creditors, the
execution of definitive documentation and the satisfaction of
other conditions. There can be no assurance that the
recapitalization and restructuring plan announced on June 13, 2003
will be completed successfully or on the terms announced.

Csii builds and operates large bandwidth (750 Mhz) hybrid fibre
coaxial networks and, through its subsidiary Cabovisao - Televisao
por Cabo, S.A. provides cable television services, high-speed
Internet access, telephony and high-speed data transmission
services to homes and businesses in Portugal through a single
network connection.

The subordinate voting shares of Csii are listed on the Toronto
Stock Exchange (TSX) under the trading symbol "CSQ.A".


CALPINE: Fitch Rates $2.55-Billion Senior Secured Notes at BB-
--------------------------------------------------------------
Calpine Corp.'s $500 million senior secured floating-rate notes
due 2007, $1.15 billion 8.50% senior secured notes due 2010, and
$900 million 8.75% senior secured notes due 2013 are rated 'BB-'
by Fitch Ratings. In addition, CPN's outstanding $7.5 billion
senior notes are downgraded to 'B-' from 'B+' and its $1.1 billion
outstanding convertible preferred securities/High TIDES to 'CCC'
from 'B-'. Proceeds from the new notes have been utilized to
refinance secured bank debt and provide funds for open-market
purchases of outstanding public debt. The Rating Outlook for CPN
is Stable.

CPN's senior secured rating is three notches higher than CPN's
revised senior unsecured rating reflecting the enhanced structural
position of secured creditors and Fitch's evaluation of the
underlying collateral package. The new notes are secured by a
second priority lien on substantially all of the assets owned
directly by CPN including natural gas reserves and certain
generating facilities. In addition, the notes are secured by a
second priority pledge of equity interests in most of CPN's first
tier domestic subsidiaries. Although the new secured notes are
effectively subordinated to approximately $6.2 billion of
subsidiary debt and lease obligations, in Fitch's view the secured
creditors are afforded reasonable asset protection given the lower
proportion of secured debt relative to total corporate debt at the
CPN holding company level.

The lowering of CPN's senior unsecured rating reflects Fitch's
lower assessment of residual asset value available to unsecured
creditors after giving effect to the recently completed secured
financings. In conjunction with the secured note offering, CPN has
executed a $750 million second priority secured term loan due 2007
and a $500 million first priority senior secured working capital
credit facility. As a result, total secured debt and/or available
credit at the CPN holding level has risen to approximately $3.8
billion compared with roughly $2 billion at March 31, 2003.

Fitch notes that the secured financings do have positive
implications for CPN's overall liquidity profile. In addition to
reducing CPN's dependence on short-term bank debt, the note
issuance along with a recently completed $800 million contract
monetization have provided CPN with additional cash to fund
capital expenditures and provide a backstop for future liquidity
events including the potential put of CPN's $1.2 billion
convertible senior notes in December 2004. The Stable Outlook
incorporates Fitch's expectation that CPN will be able to
restructure or extend its upcoming secured subsidiary construction
financings including the $970 million CCFC I term loan due
November 2003 and $2.5 billion CCFC II term loan due November
2004.

CPN's financial profile is aggressive, especially in light of
cyclical commodity market conditions which have reduced realized
returns on the unhedged portion of CPN's generating portfolio. In
addition, CPN's remaining plant construction program will continue
to place near-term pressure on the company's credit profile as
cash inflows and earnings tend to lag investment expenditures. For
the 12-month period ended March 31, 2003, lease adjusted total
debt to capitalization approximated 74% with lease adjusted debt
to EBITDAR of more than 10.0 times. Also, CPN has already
monetized some of its more liquid assets (e.g. the sale of certain
gas reserves in 2002 and recent monetization of California DWR
power sales contract), reducing financial flexibility going
forward. CPN's credit measures could strengthen over the next
several years as new projects enter commercial operation and begin
to produce cash flows. However, a full recovery will depend on a
cyclical recovery in spark spreads and CPN's success in
negotiating new term power sales agreements.

These concerns are offset in part by CPN's sound operating
fundamentals and the core competencies of CPN's power generating
activities. CPN operates a geographically diverse portfolio of
highly efficient base load natural gas fired generating units.
With more than 60% of its estimated 2003 power sales hedged under
long-term contracts primarily with creditworthy utilities,
municipalities, co-ops, and other load serving entities, CPN is
somewhat insulated in the near term from the depressed spark
spread environment. However, Fitch notes that absent any new
contracts, the percentage of CPN's generating portfolio under
contract would decline to around 37% by 2006.


CASELLA WASTE: Posts Q4 Results & Provides Fiscal 2004 Guidance
---------------------------------------------------------------
Casella Waste Systems, Inc. (Nasdaq: CWST), a regional, non-
hazardous solid waste services company, reported financial results
for the fourth quarter and its 2003 fiscal year, and gave guidance
on its expected performance for its 2004 fiscal year.

               Fourth Quarter and Fiscal 2003 Results

For the quarter ended April 30, 2003, the company reported
revenues of $94.5 million. The company's net loss per common share
from continuing operations was $0.13. Operating income for the
quarter was $250,000. The company's earnings before interest,
taxes, depreciation and amortization (EBITDA), and an impairment
charge, were $17.1 million.

The company's fourth quarter results include a one-time impairment
charge arising from the sale of the company's Passaic, N.J.
brokerage and commercial recycling businesses as well as the
reclassification of the commercial recycling business from a
discontinued operation to a continuing operation. The impact of
the impairment charge on an earnings per share basis is $0.16.

For the fiscal year ended April 30, 2003, the company reported
revenues of $420.9 million. The fiscal year net income per common
share from continuing operations was $0.13. Operating income for
the year was $34.0 million. EBITDA for the twelve-month period was
$86.7 million.

The company's twelve-month net income reflects a charge of $63.9
million from a change in accounting principle following the
company's adoption of SFAS 142.

The company also announced that cash provided by operating
activities for fiscal year 2003 was $65.0 million, and that the
company had generated $24.3 million of free cash flow for fiscal
year 2003*; as of April 30, 2003, the company had cash on hand of
$15.7 million, and had an outstanding total debt level of $310.2
million.

                    Company Well-Positioned

"Quarter after quarter over the past year was marked by the
company's very deliberate return to a growth strategy," John W.
Casella, chairman and chief executive officer, said. "We have
positioned this company well to capitalize on emerging
opportunities:

     -- "we implemented a new capital structure to execute our
        growth plan;

     -- "we have pursued and completed the addition of disposal
        capacity in our core solid waste markets;

     -- "we continue to identify and execute on tuck-in
        acquisitions that strengthen our market leadership and
        densify our existing franchise; and

     -- "we have aggressively implemented continuous improvement
        programs in every corner of our business, for every asset
        we own."

                         2001 Reaudit

PricewaterhouseCoopers has completed its reaudit of the company's
fiscal year 2001. The company expects no changes to the net income
previously reported. Following the requirements of SFAS 144, the
results of the Passaic operations have been reclassified from
discontinued operations to continuing operations both in fiscal
year 2001 and the following years.

                     Fiscal 2004 Outlook
The company also announced its guidance for its fiscal year 2004,
which began May 1, 2003.

For the fiscal year 2004, the company believes that its results
will be in the following ranges:

     -- Revenues between $395 million and $415 million, reflecting
        the sale of the company's commodities brokerage
        businesses($35 million included in 2003 revenues);

     -- EBITDA between $90 million and $94 million (operating
        income between $35 million and $39 million); and

     -- Capital expenditures between $43 million and $46 million.

The company said the following assumptions are built into its
fiscal year 2004 outlook:

     -- No improvement in the health of the national and regional
        economy;

     -- Flat volume growth;

     -- Price growth in the core solid waste business of one
        percent;

     -- Lower average commodity prices; and

     -- No major acquisitions; projections include primarily tuck-
        in acquisitions adding only $1 million in EBITDA in fiscal
        year 2004.

          Company Acquires Additional Disposal Capacity
                     in Eastern Region

The company also announced that it has entered into a twenty-year
service agreement with the Town of Templeton, Massachusetts to
construct and operate a new Subtitle D landfill.

"This is a successful execution of our partnership model, under
which we develop disposal capacity in cooperation with a municipal
government," John Casella said. "Our agreement with the town
provides for us to engineer, construct, operate and maintain this
facility as a regional resource and the town, in addition to
accruing various host community benefits, will provide support
during the permitting process at each stage of the landfill's
development."

The company said it expected the facility to be permitted within a
year to accept initially approximately 500 tons per day of
municipal solid waste; operation of the facility is expected to
commence in the middle of calendar year 2004. Development plans
call for a facility with an initial design capacity of 2.5 million
cubic yards and an expected operating life of at least 20 years,
the company said.

               Commodities Brokerage Divested

The company provided details on the sale of its non-core recycled
commodities brokerage and commercial recycling businesses located
in Passaic, New Jersey; this transaction was announced in early-
June.

The company said the businesses were sold to a group of employees
who had been responsible for the operation of the business in
exchange for notes receivable amounting to approximately $5
million, payable only out of the cash flow of the transferred
business.

In connection with the sale of the businesses, the company said it
was taking an impairment charge of $4.9 million, which includes a
reclassification adjustment.

This divestiture reduces the company's annual revenue by
approximately $18 million; combined with the previous sale of the
company's export brokerage business earlier this year, the
company's 2003 revenue from the divested brokerage businesses
totaled approximately $35 million with an operating loss of
approximately $100,000 including depreciation of approximately
$125,000.

Casella Waste Systems, headquartered in Rutland, Vermont, provides
collection, transfer, disposal and recycling services primarily in
the northeastern United States.

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.


CENTENNIAL COMMS: Fiscal Year 2003 Net Loss Slides-Up to $746MM
---------------------------------------------------------------
Centennial Communications Corp. (Nasdaq:CYCL) announced results
for the quarter and fiscal year ended May 31, 2003.

Consolidated revenues for fiscal year 2003 increased 4% from the
prior year to $745.7 million. Net loss was $111.9 million for
fiscal year 2003, an increase of $34.4 million versus the prior
year, primarily due to a $189.5 million pre-tax non-cash write
down of certain assets taken in the third quarter. "Adjusted
Operating Income" was $295.7 million, a 17% increase from the
prior year. Adjusted Operating Income is net income (loss) before
interest, taxes, depreciation, amortization, loss (gain) on
disposition of assets, loss on impairment of assets, minority
interest in loss of subsidiaries, income from equity investments
and non-cash charges. Please refer to Exhibit A -- "Non-GAAP
Financial Measures."

During the fiscal fourth quarter ended May 31, 2003, the Company
reported consolidated revenues of $191.1 million. Net income for
the fourth quarter was $61.4 million, an increase of $96.8 million
from the same quarter last year. The Company reported Adjusted
Operating Income of $81.0 million, an increase of 8% from the same
quarter last year. On June 20, 2003, the Company sold $500 million
of 10-1/8% senior unsecured notes due 2013 in a private placement
transaction. In connection with the sale of notes, the Company
amended its senior credit facility, which provides the Company
with additional flexibility under the financial and other
covenants in the credit facility. Net proceeds from the sale of
notes were used to permanently repay $300 million of term loans
under the senior credit facility, increase the Company's liquidity
and pay fees and expenses related to the transaction.

Other significant events reported during and after fiscal 2003
include:

-- The Company signed long-term roaming agreements with Cingular
    Wireless and AT&T Wireless. In conjunction with the AT&T
    Wireless agreement, AT&T Wireless granted the Company two
    separate options to purchase 10 MHz of spectrum covering
    approximately 4.2 million Pops in Michigan and Indiana. The
    aggregate exercise price of the options is $20 million.

-- The Company recorded a pre-tax non-cash charge of $189.5
    million to write-down the intangible assets associated with its
    Puerto Rico Cable Television business which has been
    experiencing subscriber losses, and to reduce the carrying
    value of certain of its undersea cable assets, in accordance
    with Statement of Financial Accounting Standards Nos. 142 and
    144.

-- The Company closed on the sale of 158 U.S. Wireless towers
    (which are being leased back) for gross proceeds of
    approximately $26.5 million.

-- The Company completed the digital upgrade of its Cable TV
    network and continued to grow its high-speed data customers.

-- The Company disposed of its 51% interest in its Jamaican
    wireless subsidiary.

-- The Company announced a contract with Ericsson to upgrade its
    U.S. Wireless operations' digital network with EDGE-ready 850
    MHz GSM/GPRS radio access and core network equipment.

"Strong operating results in fiscal 2003 coupled with the recent
$500 million financing and bank amendment provide a solid
foundation for our profitable growth in fiscal 2004 and beyond,"
said Michael J. Small, chief executive officer. "We are
particularly pleased with the strong growth of postpaid wireless
customers in the Caribbean".

The Company's wireless subscribers at May 31, 2003 were 939,500,
compared to 906,800 on the same date last year, an increase of 4%.
During fiscal year 2003, postpaid wireless subscribers increased
by 67,300 or 29% in the Caribbean, and by 11,900 or 2% in U.S.
Wireless. Overall, prepaid subscribers declined due to reduced
emphasis on this service in certain markets and to the divestiture
of the Jamaica wireless operation in August 2002, which was
comprised of 30,200 prepaid subscribers. Caribbean Broadband
switched access lines reached 40,400 and dedicated access line
equivalents were 182,000 at May 31, 2003, up 22% and 16%,
respectively from May 31, 2002. Cable TV subscribers were 78,200
at May 31, 2003, down 13,400 from the prior year.

For the year, total Caribbean revenues were $392.5 million and
Adjusted Operating Income (consisting of the Caribbean Wireless
and Caribbean Broadband segments) was $135.3 million. Adjusted
Operating Income for the year was up 30% from the prior year.
Caribbean Wireless revenues for the year reached $261.3 million,
an increase of 11% from the prior year. Caribbean Wireless
Adjusted Operating Income for the year was $96.6 million, an
increase of 23% from the prior year. Caribbean Broadband revenues
for the year were $141.3 million and Adjusted Operating Income
reached $38.6 million, up 2% and 53% from the prior year,
respectively.

U.S. Wireless revenues were $353.2 million for the year ended May
31, 2003 and Adjusted Operating Income was $160.4 million.
Adjusted Operating Income increased by 8% from the prior year due
to improved margins on retail revenue offset in part by a 16%
reduction in roaming revenue. U.S. Wireless Adjusted Operating
Income margin in fiscal 2003 was 45%, as compared to 42% last
year.

Consolidated capital expenditures for the year ended May 31, 2003
were $133.1 million or 18% of revenue. For the year ended May 31,
2002, consolidated capital expenditures were $214.7 million or 30%
of revenue. Net debt at May 31, 2003 was $1,680.2 million as
compared to $1,774.6 million at May 31, 2002.

The Company projects fiscal first quarter 2004 Adjusted Operating
Income to exceed the $75.8 million the Company generated in the
first quarter of fiscal 2003. The Company projects Adjusted
Operating Income growth for fiscal year 2004 of 5-10% as compared
to $295.7 million in fiscal 2003, despite a projected reduction of
approximately $20 million in roaming revenue in fiscal 2004 as
compared to fiscal 2003. The Company projects capital expenditures
of approximately $125 million in fiscal 2004. A reconciliation of
projected Adjusted Operating Income is not included as projections
for some components of such reconciliation, such as loss on
impairment of assets, are impossible to project at this time.

The Company adopted Statement of Financial Accounting Standards
No. 142 effective June 1, 2002. As a result, previously recorded
goodwill and other intangible assets with indefinite lives will no
longer be amortized but will be subject to impairment tests.
Depreciation and amortization expense for the year ended May 31,
2003 would have been $24.4 million higher in the absence of SFAS
No. 142. The aggregate effect of ceasing amortization decreased
net loss and loss per basic and diluted share by $17.8 million and
$0.19, respectively.

In addition to the financial results determined in accordance with
Generally Accepted Accounting Principles ("GAAP"), this press
release contains non-GAAP financial measures such as Adjusted
Operating Income. The non-GAAP financial measures should be
considered in addition to, but not as a substitute for, the
information prepared in accordance with GAAP. A reconciliation
from GAAP to this non-GAAP financial measure is provided in
Exhibit A to this press release.

Centennial is one of the largest independent wireless
telecommunications service providers in the United States and the
Caribbean with approximately 17.1 million Net Pops and
approximately 929,700 wireless subscribers. Centennial's U.S.
operations have approximately 6.0 million Net Pops in small cities
and rural areas. Centennial's Caribbean integrated communications
operation owns and operates wireless licenses for approximately
11.1 million Net Pops in Puerto Rico, the Dominican Republic and
the U.S. Virgin Islands, and provides voice, data, video and
Internet services on broadband networks in the region. Welsh,
Carson Anderson & Stowe and an affiliate of the Blackstone Group
are controlling shareholders of Centennial. For more information
regarding Centennial, visit its Web sites at
http://www.centennialcom.comand http://www.centennialpr.com

As reported in Troubled Company Reporter's May 1, 2003 edition,
Standard & Poor's Ratings Services lowered the corporate credit
ratings on Centennial Communications Inc. and subsidiary
Centennial Cellular Operating Company to 'B-' from 'B'. Standard &
Poor's also lowered the subordinated debt rating on Centennial
Communications to 'CCC' from 'CCC+'. At the same time, the secured
bank loan rating at Centennial Cellular Operating Company was
lowered to 'B-' from 'B'.

The ratings were all removed from CreditWatch, where they were
placed Oct. 25, 2002. The outlook is negative.


CHARTER COMMS: Nancy Peretsman Elected Class A/Class B Director
---------------------------------------------------------------
Charter Communications, Inc. (Nasdaq:CHTR), the nation's third
largest broadband communications company, convened its fourth
annual meeting of shareholders Wednesday.

Paul G. Allen, Chairman of the Board, told shareholders that cable
technology is the most efficient, most effective pipeline into the
home for a full range of broadband and interactive entertainment
and information services. "We're doing some very exciting things,
leveraging our first class infrastructure, rolling out advanced
services like video on demand, broadband data and HDTV. Our new
advanced set top boxes will make the cable converter of yesteryear
seem as antiquated as the electric typewriter.

"There is still much work to be done but we are up to the
challenge. I have great faith in Charter's leader Carl Vogel and
his bolstered management team."

President and Chief Executive Officer Carl Vogel told shareholders
that Charter believes it has the right products for the
marketplace, the right platform to deliver those products, and the
right people to execute its business plan. In outlining the
substantial operational and financial progress achieved by the
Company during the past year, Mr. Vogel told shareholders that
Charter "looks to the future with a renewed sense of purpose and
confidence in our business, our resiliency and our ability to
compete in the ever-changing world in which we do business.

"Our business plan can be summarized as striving to maximize the
return on invested capital by maximizing the products and services
we can sell to homes and businesses we pass with our advanced,
terrestrial infrastructure. We will attempt to meet this challenge
with value priced services, delivered in a reliable and consistent
fashion by members of the very local markets we are part of."

Commenting on the completion of a strategic restructuring of
Charter's field operations, and his recruitment of operations,
marketing, sales, programming and engineering talent, Mr. Vogel
said, "We've been fortunate to attract quality, experienced people
based on a simple premise of their having an opportunity to make a
difference with a prospect of significant personal growth, and the
satisfaction of working for a Company that has critical mass and
scale." He added that Charter's strategic shift to five
geographically clustered operating groups, resulting in a dramatic
reduction in management layers, providing efficiency and
consistency within the Company's operations, is expected to have a
positive impact on customer retention over the long-term.

Mr. Vogel also stressed management's ongoing commitment to
improving its capital structure for the benefit of all
constituencies. Less than two weeks ago, Charter announced its
refinancing plans to repay up to $500 million of its bank debt and
commenced tender offers for some of its other indebtedness. "This
is the first of many steps to address the feedback of the
financial markets. Rest assured that management takes our capital
structure seriously. We're working to reduce our debt levels."

Reiterating Charter's commitment to attaining free cash flow,
which the Company defines as revenue less operating expenses, less
capital expenditures and cash interest, Mr. Vogel said, "We have
been disciplined in all our areas of spending, whether capital or
operating expense, substantially improving our purchasing and
procurement process, consolidating inventories, and focusing our
capital spending on revenue producing or customer facing
activities."

During the course of Wednesday's meeting, Charter shareholders re-
elected Nancy B. Peretsman, Executive Vice President and Managing
Director at Allen & Co., as the Class A/Class B Director to the
Company's Board and ratified the appointment of KPMG LLP as
independent auditors for the company in 2003.

Shareholders also approved the amendment to the Company's 2001
Stock Incentive Plan to increase by 30,000,000 shares the number
of Class A common stock authorized for issuance under the Plan as
well as amendments to the 1999 Option Plan and the 2001 Stock
Incentive Plan to authorize the repricing of outstanding stock
options.

Mr. Allen, the sole holder of Charter's Class B common stock,
elected the Class B Directors. The Company's Board of Directors
had nominated seven of the eight current directors for re-election
along with David C. Merritt, most recently Managing Director in
the Entertainment Media Advisory Group at Gerard Klauer Mattison &
Company. Ronald L. Nelson had declined to stand for re-election
due to his time commitments required in connection with his new
responsibilities as Chief Financial Officer of Cendant Corp. The
other directors re-elected are Paul G. Allen, Marc B. Nathanson,
William D. Savoy, John H. Tory, Carl E. Vogel and Larry W.
Wangberg.

Charter Communications, A Wired World Company(TM), is the nation's
third-largest broadband communications company. Charter provides a
full range of advanced broadband services to the home, including
cable television on an advanced digital video programming platform
via Charter Digital Cable(R) brand and high-speed Internet access
marketed under the Charter Pipeline(R) brand. Commercial high-
speed data, video and Internet solutions are provided under the
Charter Business Networks(R) brand. Advertising sales and
production services are sold under the Charter Media(R) brand.
More information about Charter can be found at
http://www.charter.com

                           *    *    *

In early January, Moody's Investors Services warned that Charter
Communications, Inc., may breach a bank debt covenant in the
following quarter, and reacted negatively to talk that a
restructuring is "increasingly likely" in the near to medium term
and there's a "growing probability of expected credit losses."

                   Restructuring Advisers Hired

Charter reportedly chose Lazard as its restructuring adviser,
according to TheDeal.com (edging-out Goldman Sachs Capital
Partners, Carlyle Group, Thomas H. Lee Partners, UBS Warburg and
Morgan Stanley) to explore strategic alternatives. The New York
Post, citing unidentified people familiar with the situation, says
those alternatives may involve selling assets or bringing in
private equity partners.

Charter co-founder Paul Allen has brought Miller Buckfire Lewis &
Co. onto the scene to protect his 54% stake that cost him $7-plus
billion.  Alvin G. Segel, Esq., at Irell & Manella LLP in Los
Angeles has served as long-time legal counsel to Mr. Allen and his
investment firm, Vulcan Ventures.


CINCINNATI BELL: S&P Ratchets Corporate Credit Rating Up a Notch
----------------------------------------------------------------
Standard & Poor's Ratings Services raised the corporate credit
rating of incumbent local exchange carrier Cincinnati Bell Inc. to
'B' from 'B-'. Ratings on Cincinnati Bell's secured debt, which
includes its $941 million bank credit facility and $50 million
senior secured notes, are raised to 'B+' from 'B-'.

"The upgrade of the secured debt reflects both the higher
corporate credit rating and permanent reduction of bank debt,"
said credit analyst Michael Tsao. Ratings have been removed from
CreditWatch, where they had been placed with positive implications
on July 1, 2003 after Cincinnati Bell announced that it planned to
issue new notes to reduce bank debt. The outlook is positive.
Total debt is currently about $2.5 billion.

The upgrade reflects material improvement in Cincinnati Bell's
liquidity prospect after the company issued $500 million of 7.25%
Senior Unsecured Notes due 2013, net proceeds of which were used
to permanently reduce bank debt. Prior to the transaction, there
was concern over the company's ability to meet significant debt
maturities in 2006. This refinancing, along with between $200 and
$250 million in annual free cash flow that the company is
forecasted to generate, should allow Cincinnati Bell to meet all
debt maturities until 2009 when it will face the next set of
substantial debt maturities.  Bank loan maintenance covenants
offer a degree of headroom against execution risks.

The rating on Cincinnati Bell's bank loan and senior secured notes
are one notch above the corporate credit rating. As the result of
the refinancing, total bank commitment has been reduced to about
$941 million.

The company has regained its strong business risk profile, and
refocused on its well-managed ILEC and wireless operations. The
ILEC operation, which serves more than one million access lines,
accounts for about 70% of total revenues and 80% of EBITDA.
Because of the company's aggressive use of service bundling,
deployment of digital subscriber line (DSL) service, and
relatively small market area, this operation likely will face less
competitive challenges than regional Bell operating companies over
the intermediate term.


CONCENTRA OPERATING: S&P Assigns B+ Rating to New $100M Facility
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit ratings on privately held health services provider
Concentra Inc., and its operating subsidiary Concentra Operating
Corp. The ratings outlook is negative.

At the same time, Standard & Poor's assigned its 'B+' rating to
Concentra Operating Corp.'s proposed $100 million senior secured
revolving bank credit facility due in 2008; its 'B+' rating to the
company's proposed $335 million senior secured term loan due in
2009; and its 'B-' rating to the company's proposed $150 million
senior subordinated notes due in 2010.

The company is expected to use the majority of proceeds to repay
existing debt, including a portion of a loan from its financial
sponsor, and retire certain interest-rate hedge agreements. Pro
forma for the transaction, the workplace health provider will have
approximately $735 million of total debt outstanding.

"The ratings reflect the company's vulnerability to economy-driven
changes in national employment levels, as well as the competitive
limitations on Concentra's pricing power," said credit analyst
Jesse Juliano.

Despite the effects of the proposed transaction, the company's
leverage continues to be high, resulting from its 1999 sale to
financial sponsor Welsh, Carson, Anderson, & Stowe, which still
has a material equity stake in the company.

Addison, Texas-based Concentra provides health services for
workplace injuries, as well as preferred provider organization
network services designed to reduce medical and administrative
costs. The company also offers management services that coordinate
medical care to reduce disability duration. Concentra, which
operates nationwide, has a well-diversified clientele that
includes providers of workers' compensation, occupational health
care, automobile insurance, and group health and related employee
benefits. Revenue is paid on a fee-for-service, percentage-of-
savings, or a flat-fee basis. Competition from numerous smaller
local players, however, limits Concentra's pricing power.

In addition to modest free operating cash flow, Concentra should
have full availability of Concentra Operating Corp.'s $100 million
revolving credit facility, pro forma for the proposed transaction.
Although Standard & Poor's views the company's debt level as
aggressive, these liquidity sources and the absence of significant
debt maturities before 2008 should provide sufficient financial
flexibility to meet near-term needs. Despite the retirement of
some of Concentra's senior discount debentures, the financial
sponsor Welsh, Carson, Anderson, & Stowe retains a material
ownership stake. Even though the financial sponsor has made
significant equity contributions to Concentra in the past, the
ratings do not incorporate an expectation of additional liquidity
support.

Although the company has extended its debt maturity profile,
thereby improving its financial flexibility in the near-term, its
ability to maintain financial measures consistent with the rating
depends on national employment levels and management's ability to
maintain operating efficiencies. In the event that Concentra
cannot achieve appropriate cash flow levels, the company could
face a downgrade.


CORNING INC: Issuing 45 Million Shares via Public Offering
----------------------------------------------------------
Corning Incorporated (NYSE:GLW) announced a public offering of 45
million shares of its common stock at a price of $8.15 per share,
under the company's existing $5 billion universal shelf
registration statement. Goldman, Sachs & Co., is the sole
underwriter for this offering.

The net proceeds from this offering will be used to reduce debt
through open market repurchases, public tender offers or other
methods, and for general corporate purposes. Corning will invest
the net proceeds in short-term, interest bearing, investment grade
obligations until they are applied as previously described.

James B. Flaws, vice chairman and chief financial officer, said,
"A major part of our strategy for protecting the company's
financial health has been to reduce debt levels. Since 2001, we
have retired more than $2 billion in debt obligations. With the
proceeds from this offering, and our cash balances, we believe
that we have adequate liquidity to fund our debt reduction
objectives."

The shares represent new financing by Corning. This offering is
made by means of a prospectus supplement to a prospectus that is
part of Corning's universal shelf registration statement
previously filed with the SEC. For a copy of the prospectus and
prospectus supplement relating to this offering, contact: Goldman,
Sachs & Co., 85 Broad Street, New York, N.Y. 10004.

Established in 1851, Corning Incorporated creates leading-edge
technologies that offer growth opportunities in markets that fuel
the world's economy. Corning manufactures optical fiber, cable,
hardware and equipment in its Telecommunications segment.
Corning's Technologies segment manufactures high-performance
display glass, and products for the environmental, life sciences,
and semiconductor markets.


CUMULUS MEDIA: Completes Acquisition of 2 Stations from Athens
--------------------------------------------------------------
Cumulus Media Inc. (NASDAQ: CMLS) has completed the previously
announced acquisitions of two stations in Nashville, Tennessee
(Arbitron market rank #45) from Gaylord Entertainment Company and
four stations in Huntsville, Alabama (Arbitron market rank #118)
from Athens Broadcasting Company, Inc.

Cumulus' Chairman and CEO, Lew Dickey, commented, "We are pleased
to announce the completion of both the Nashville and Huntsville
acquisitions. The Nashville acquisition completes our cluster and
positions us to become the market leader in our largest market.
The Huntsville acquisition, which we paid for entirely with stock,
should prove to be accretive to our stockholders, have a de-
leveraging effect on our balance sheet and strengthen our
competitive position in the Southeast. Both acquisitions
complement our existing platform of stations and should improve
our ability to generate free cash flow."

The Nashville stations, WSM-FM and WWTN-FM, were acquired for
$65.0 million in cash. Cumulus has operated the stations under the
terms of local marketing agreement since April 21, 2003. As
previously announced, Cumulus also continues to manage the
advertising sales of a third station owned by Gaylord
Entertainment, WSM-AM, under the terms of a joint services
agreement.

The Huntsville stations, WZYP-FM, WUSX-FM, WVNN-AM and WUMP-AM,
were acquired in exchange for 1,213,168 shares of the Company's
Class A Common Stock. In addition to the broadcast licenses and
fixed assets of the four stations, Cumulus also received
approximately $2.5 million of working capital as part of the
transaction. Cumulus has operated the stations under the terms of
a local marketing agreement since April 1, 2003.

Cumulus Media Inc. is the second-largest radio company in the
United States based on station count. Giving effect to the
completion of all announced pending acquisitions and divestitures,
Cumulus Media will own and operate 270 radio stations in 55 mid-
size, U.S. media markets. The company's headquarters are in
Atlanta, Georgia, and its Web site is http://www.cumulus.com

As reported in Troubled Company Reporter's April 04, 2003 edition,
Standard & Poor's Ratings Services assigned its 'B+' rating to
Cumulus Media, Inc.'s $325 million senior secured term loan C due
2008. Proceeds were used to refinance existing debt and fund the
company's tender offer for its 10.375% senior subordinated notes
due 2008.

At the same time, Standard & Poor's affirmed its 'B+' corporate
credit rating on the company. The outlook is stable. Atlanta, Ga.-
based radio operator Cumulus had total debt outstanding of
approximately $433.7 million at Dec. 31, 2002.


DAN RIVER INC: Second Quarter 2003 Net Loss Tops $19 Million
------------------------------------------------------------
Dan River Inc. (NYSE:DRF) reported results for the second fiscal
quarter and six months ended June 28, 2003. For the second quarter
of 2003, the Company reported a net loss of $19.4 million. These
results include a $12.2 million pre-tax charge, primarily non-
cash, related to closing two manufacturing facilities, explained
below. Also included in these results is other expense of $1.3
million pre-tax, related to the write-off of unamortized costs
pertaining to financings which were prepaid in full during the
second quarter of 2003, and $1.0 million in increased interest
expense due to a one-month period during the second quarter when
both the Company's 1993 subordinated notes and its recently issued
12-3/4% notes were outstanding. The loss in the second quarter of
2003 compared to net earnings of $3.7 million for the second
quarter of 2002.

In mid June, the Company publicly announced two plant closings and
projected a loss for the second quarter in the range of $0.60 per
share. The difference between the actual and projected loss is
attributable to a $6.5 million adjustment to deferred income
taxes, which resulted in no tax benefit being recorded against the
loss for the current fiscal year. The realization of these tax
benefits is ultimately dependent on the generation of taxable
income in the future. Given the current business environment and
the near term outlook, accounting rules do not permit the Company
to recognize these tax benefits currently. The Company believes
that it will ultimately generate sufficient taxable income to
offset these losses, at which time it will be able to recognize
such benefits by reducing income tax expense in future years.

Net sales for the second quarter of fiscal 2003 were $116.3
million, down $37.6 million or 24.4% from $153.9 million for the
second quarter of fiscal 2002. Sales of Dan River's home fashions
products were $77.4 million, down $29.8 million or 27.8% compared
to the same quarter of last year. Sales of apparel fabrics were
$30.0 million, down $6.9 million or 18.7%. Sales of engineered
products were $8.9 million, down $0.9 million or 9.3%.

The Company reported a net loss of $16.7 million for the six
months ending June 28, 2003. In addition to the plant closing
costs and write-off of financing costs explained above, these
results include a $0.4 million pre-tax gain related to the sale of
surplus equipment. This compares to a net loss of $1.5 million for
the six months ending June 29, 2002, before the effect of an
accounting change related to the write-down of goodwill under SFAS
No. 142, "Impairment of Goodwill and Intangible Assets." Included
in the results for fiscal 2002 are an increase in income tax
expense of $2.8 million, attributable to the tax law changes
associated with the Job Creation and Worker Assistance Act of
2002, and a $1.4 million pre-tax charge for bad debt expense
related to the Chapter 11 filing of Kmart Corporation in January
of 2002.

For the first half of fiscal 2003, the Company's net sales were
$263.7 million, down $48.6 million or 15.6% from $312.4 million
for the first six months of fiscal 2002. Sales of Dan River's home
fashions products were $185.8 million, down $37.4 million or 16.7%
compared to the first half of last year. Sales of apparel fabrics
were $59.1 million, down $9.8 million or 14.2%. Sales of
engineered products were $18.8 million, down $1.5 million or 7.3%
compared to the first half of 2002.

Mr. Joseph Lanier, Jr., Chairman and CEO, commented on the
results, saying, "As we announced in June, the retail environment
continues to be weak, and this has negatively impacted our sales
and margins for the quarter. This led to our announcement in mid
June that we were closing two plants, a greige weaving facility in
Greenville, SC and a sewing facility in Fort Valley, GA. The
process to close these facilities has begun, and we recorded a
$12.2 million charge in the second quarter, $10.2 million of which
is non-cash. The cash portion primarily relates to employee
benefits for the 630 employees who have been affected by the
closures. These amounts will be substantially paid out over the
ensuing 12 months. As demand recovers, the Company plans to
transfer production capacity from the closed facilities to other
Company facilities in Danville, VA, and Morven, NC."

Mr. Lanier continued, "We continue to experience low levels of
incoming orders and therefore reduced manufacturing activity. This
will hamper our results for the foreseeable future. Accordingly,
it is no longer reasonable to assume that the back half of fiscal
2003 will be a mirror image of the first half as stated in our
press release of June 11th."

Mr. Lanier closed by saying, "We still expect to see business
improve in the back half of the year, although such improvement
may be later than we originally anticipated. After all the
promotional activity that has taken place, retail inventories
should be coming back in line. Consumer confidence has been rising
and is bolstered by lower taxes and interest rates. This, along
with fresh merchandise offerings, should bring consumers back into
the stores. And finally, there has been a rash of recently
announced industry-wide plant closings. These closures should
bring capacity more in line with demand. As this excess capacity
is wrung out, it will help the return to more normalized levels of
operations and profitability."

                            *  *  *

As reported in Troubled Company Reporter's April 28, 2003 edition,
Standard & Poor's Ratings Services raised its long-term corporate
credit rating on home furnishings manufacturer Dan River Inc. to
'B+' from 'B-'. The ratings are removed from CreditWatch, where
they were placed on March 17, 2003.

At the same time, Standard & Poor's assigned its 'B-' senior
unsecured debt rating to the Danville, Virginia-based company's
new 12.75% senior notes due 2009. The notes are rated two notches
below the corporate credit rating, reflecting their junior
position relative to the significant amount of secured bank debt.
Standard & Poor's also withdrew its existing rating on the $120
million subordinated notes due 2003.

The outlook is stable.

Dan River's total debt outstanding at Dec. 28, 2002, was about
$252 million.


DELTA FUNDING: Fitch Further Junks Class B Note Rating at CC
------------------------------------------------------------
Fitch Ratings has taken rating action on the following Delta
Funding Corporation issue:

         Series 2000-4

            -- Class B downgraded to 'CC' from 'CCC'.

The negative rating action taken on series 2000-4 reflects the
poor performance of the underlying collateral in the transaction.
The level of losses incurred has been higher than expected and
have resulted in the depletion of overcollateralization. As of the
July 2003 distribution, series 2000-4 has $0 in OC and the Class B
has taken a writedown of $92,110.81. Furthermore, the presence of
a 36-month Interest Only strip siphons off excess spread that
would otherwise be available to cover losses and to build OC in
the deal.


DIAL CORP: Second Quarter 2003 Results Show Slight Improvement
--------------------------------------------------------------
The Dial Corporation (NYSE:DL) announced its results for the
second quarter and commented on the Company's outlook for the
balance of the year.

                     Second Quarter 2003

For the second quarter ended June 28, 2003, net income was $35.5
million versus net income of $33.4 million in the second quarter
of 2002. Income from continuing operations was $33.4 million
versus $29.6 million in the year ago quarter, excluding a special
gain. The special gain in the second quarter of 2002 totaled $2.2
million associated with the previously dissolved joint venture
with Henkel and from the sale of the Company's Mexico City
facility, partially offset by a write down of fixed assets in its
Guatemala facility.

A $2.1 million reduction in the after tax loss on the sale of
Argentina was recorded in the second quarter of 2003 due to higher
cash proceeds and lower costs associated with the sale.

The Company's results in the second quarter of 2003 benefited from
an after tax gain of $0.7 million related to the sale of surplus
land at the Company's Aurora, Ill. facility. Excluding this gain,
net income from continuing operations was $0.34 per share
(diluted).

Net sales in the second quarter of 2003 rose 3.9 percent to $332.5
million from $320.0 million in last year's second quarter. Sales
increased 2.5 percent in the Company's Domestic Branded segment
and 20.7 percent in the International and Other segment. Herbert
M. Baum, The Dial Corporation chairman, president and chief
executive officer, said, "Overall, we achieved favorable results
for the second quarter in a challenging economic and retail
environment."

Mr. Baum continued, "Personal Cleansing generated sales growth of
7.5 percent due to strong performance from Dial liquid hand soap
and bodywash, offset in part by the continued decline of the bar
soap segment. Laundry Care posted a 1.7 percent decrease in sales
against strong sales comparisons in the year ago period, despite
continued growth in Purex liquid detergent. A 16.8% drop in dry
detergent sales and increased promotional spending were primarily
responsible for the overall decline in Laundry Care. Our Food
Products business increased 5.7 percent primarily due to Armour
Vienna sausage sales and an increase in private label. Our Air
Fresheners business was up slightly at 0.4 percent driven by our
Super Odor Neutralizer spray and Universal Scented Oil refill
products, both of which were introduced in the third quarter of
2002."

Mr. Baum added, "International and Other segment revenues rose
20.7 percent, led by an increase in Canada sales, favorable
foreign currency gains and growth in Branded Commercial Markets."
International and Other segment sales increased 17.2 percent
excluding the foreign currency gains.

Gross margin in the second quarter of 2003 was 37.4 percent
compared to 38.5 percent in the second quarter of 2002. The
decline resulted from higher energy and petroleum related costs,
higher raw material prices and increased promotional spending.
Also, gross margin in the second quarter of 2002 benefited from
the previously discussed special gain. SG&A declined as a
percentage of sales for the second quarter of 2003 compared to the
year ago period due mainly to lower performance-based compensation
expense. Operating margin was 18.6 percent versus 18.0 percent in
the year ago second quarter.

The Company generated operating cash flow of $77.6 million in the
second quarter of 2003. The Company's cash balance at the end of
the second quarter of 2003 was $320.3 million compared to $124.9
million at the end of the second quarter of 2002 and $219.6
million at the end of 2002.

                         First Half 2003

Net income for the six months ended June 28, 2003 rose to $65.2
million, compared to $15.0 million in the same period a year ago.
Earnings per share from continuing operations in the first half of
2003 were $0.66 (diluted), up 17.9 percent from $0.56 (diluted) in
the year ago period, excluding the previously discussed special
gain of $0.02 per share (diluted) in the first half of 2002.

Net sales for the first half of 2003 were up 4.9 percent to $644.9
million from $614.6 million in the first half of 2002. Sales in
the Domestic Branded segment increased 3.7 percent and in the
International and Other segment increased 19.9 percent.
International and Other segment sales were up 16.8 percent
excluding the foreign currency gains. Operating margin improved
130 basis points to 18.4 percent in the first half of 2003 versus
17.1 percent in the same period a year ago. This improvement was
driven by a reduction in SG&A as a percentage of sales, primarily
due to lower performance-based compensation expense.

Cash flow from operations for the first half of 2003 was $109.4
million compared to $113.2 million in the first half of 2002. Cash
flow in both periods benefited from favorable tax effects related
to discontinued operations.

After the end of the second quarter of 2003, the Company made a
tax deductible pension contribution of $50 million, which will
result in a net cash outflow of approximately $31 million after
the related tax deduction.

           IT Outsourcing and ERP Implementation Project

The Company announced that it has entered into an approximate $110
million, seven-year information technology outsourcing agreement
with Electronic Data Systems Corporation. Under this outsourcing
agreement, EDS will provide information technology infrastructure,
support and management services. In addition, EDS, teaming with
SAP, will lead a complete SAP software implementation for the
Company's enterprise operations, including the manufacturing,
supply chain, finance, accounting and performance management
environments as well as customer relationship management.

Mr. Baum commented that, "This arrangement will allow us to
concentrate on our core business, invest behind our brands and
reduce our investment in information technology hardware." The
Company currently expects capital and operational savings totaling
approximately $21 million over the term of the outsourcing
agreement with EDS. The Company also expects additional savings
upon implementation of SAP.

The implementation of SAP will commence in the third quarter of
2003 and currently is expected to be completed over the next 18
months. The implementation of SAP and related costs are expected
to be approximately $35 million. As a result of the move to SAP,
the Company will recognize approximately $8 million of accelerated
depreciation expense over the next 18 months related to its
current software system.

                           2003 Outlook

Looking to the second half, the Company currently expects energy
and petroleum related costs, such as resin, fuel and natural gas,
to continue to be higher than year ago levels. While initiatives
are in place to mitigate these increased costs, energy and
petroleum related prices are expected to exceed the anticipated
savings from these projects. Commenting on the year, Mr. Baum
noted, "Despite higher costs, we currently expect earnings per
share from continuing operations to be $0.34 for the third quarter
and $1.33 for the full year -- an increase of $0.02 per share from
our prior guidance for the full year. In addition, sales growth
for the second half of 2003 currently is expected to moderate
against higher comparisons in the second half of 2002. We are
expecting sales growth in the range of 3 percent for the full
year. Operating margin improvement in the second half of 2003 is
expected to be in the 100 basis point range compared to the same
period year ago."

The Dial Corporation, headquartered in Scottsdale, Ariz., is one
of America's leading manufacturers of consumer products, including
Dial(R) soaps, Purex(R) laundry detergents, Renuzit(R) air
fresheners and Armour(R) Star canned meats. Dial products have
been in the marketplace for more than 100 years. For more
information about The Dial Corporation, visit the Company's Web
site at http://www.dialcorp.com

                            *    *    *

As reported in Troubled Company Reporter's March 25, 2003 edition,
Standard & Poor's Ratings Services revised its rating outlook for
household products manufacturer Dial Corp., to positive from
stable. At the same time, Standard & Poor's affirmed its ratings
on Dial.

Total debt at Dec. 31, 2002, was about $458 million.

As previously reported, Standard & Poor's rates the Company's
$250,000,000 of 7% Notes due August 15, 2006, and $250,000,000
of 6-1/2% Notes sue September 15, 2008, in low-B territory.


DOFASCO: Lenders Waive Credit Pact Covenant Violations
------------------------------------------------------
Dofasco Inc., reported solid results for the second quarter of
2003, despite the difficult conditions affecting the North
American steel industry.

For the three months ended June 30, 2003, Dofasco's consolidated
net income was $38.8 million. After deducting preferred share
dividends, earnings were $0.51 per common share. In the second
quarter of 2002, Dofasco's net income was $69.7 million, or $0.93
per share.

Dofasco's President and CEO Don Pether said, "We are pleased by
Dofasco's solid results, especially under difficult business
conditions - a significant strengthening of the Canadian dollar
against the U.S. dollar, weak spot prices, increasing imports and
higher energy costs." He continued, "The excellence of Dofasco
people is clearly evident in the face of significant challenges.
Once again, Dofasco people have set the pace among North American
steel producers. They continue to deliver sustainable growth in
shareholder value through product and market mix improvements, and
an unwavering focus on cost control."

"For the fifth consecutive quarter, shipments from Hamilton
exceeded one million tons. We continued to increase the proportion
of high value-added galvanized, tinplate, cold rolled and
automotive tubular products in our product mix. Gallatin Steel,
our joint venture flat rolled facility in Kentucky, had a record-
breaking quarter for steel shipments, in spite of a weakening U.S.
market," said Pether.

Dofasco's consolidated sales of $923 million in the second quarter
of 2003 were almost identical to the same period in 2002, despite
a decline in steel shipments to 1,211,000 tons from 1,295,000 tons
a year earlier.

Dofasco's Steel Operations segment, which includes the company's
Hamilton operations, reported income before income taxes of $53.1
million in the quarter, compared to $93.7 million, restated for
the second quarter of 2002. Shipments from Hamilton were 1,019,000
tons, compared to 1,114,000 tons in the same quarter of 2002.
Higher contract prices, partially offset by lower spot prices, and
continued movement toward a higher value product mix, resulted in
a $38 increase in the average revenue realized per ton of steel
shipped from Hamilton in the second quarter of 2003 compared to
the same period in 2002.

The average cost per ton of steel shipped increased by $57
relative to the second quarter of 2002 due largely to lower
production levels, higher energy costs and to an increase in the
use and cost of purchased slabs.

Gallatin Steel shipped a record 385,000 tons in the quarter, up
from the 362,000 tons shipped in the second quarter of 2002.
Excellent operating performance and record quarterly shipments
reduced the impact of lower selling prices and higher scrap and
energy costs. Dofasco's share of Gallatin pre tax income decreased
to a loss of $0.7 million from a profit of $10.6 million in the
second quarter of last year.

Quebec Cartier Mining Company, Dofasco's joint venture iron ore
mine in Quebec, shipped 4.0 million tonnes of iron ore products in
the second quarter, up from 3.1 million tonnes in the second
quarter of 2002. Buoyed by significantly higher shipments,
contract price increases and lower operating costs, Dofasco's 50%
share of QCM's profit before income taxes was $4.4 million,
compared to a loss of $4.2 million in the second quarter of 2002.

"At the end of last year, we announced the QCM restructuring,"
said Pether. "We continue to work closely with all QCM
stakeholders -- including QCM's management and workforce, our
joint venture partner CAEMI of Brazil and the new Government of
Quebec -- to complete the process in the third quarter. QCM will
then be positioned to execute a new, multi-year mining plan, to
operate competitively and to contribute to the economy of Quebec's
North Shore."

Looking forward, Pether said, "North American steel markets are
showing preliminary signs of improving. But the sustainability of
the trend is still cloudy and uncertain. At Dofasco, we are
continuing to focus on product quality, customer service and cost
control. We continue to pursue initiatives to find immediate,
innovative and sustainable ways to increase revenues, reduce costs
and enhance margins, for the remainder of 2003 and beyond."

Dofasco has successfully started the first phase of its five-year,
$700 million Finishing Division Improvement Program in Hamilton
which will enhance quality and product mix, reduce costs and
improve customer service. "Our practice of continuously re-
investing in our facilities to maintain world-class standards will
help ensure that our most valuable competitive advantage -
Dofasco's people - are well equipped to ensure the company's
continued growth," said Pether.

Dofasco is a leading North American steel solutions provider.
Product lines include hot rolled, cold rolled, galvanized,
Extragal(TM), Galvalume(TM) and tinplate flat rolled steels, as
well as tubular products, laser welded blanks and Zyplex(TM), a
proprietary laminate. Dofasco's wide range of steel products is
sold to customers in the automotive, construction, energy,
manufacturing, pipe and tube, appliance, packaging and steel
distribution industries.

                      Report to Shareholders
                for the period ended June 30, 2003

Management's Discussion and Analysis:

                      RESULTS OF OPERATIONS

Net Income

Dofasco posted solid results in the second quarter under difficult
business conditions - the significant appreciation in the Canadian
dollar against the U.S. dollar, weak spot market pricing, high
offshore imports and high energy costs.

Consolidated net income for the three months ended June 30, 2003
was $38.8 million. After deducting preferred share dividends,
earnings per share was $0.51. Consolidated net income in the
second quarter of 2002 was $69.7 million or $0.93 per share.
(Results for 2002 have been restated - see Note 2 to the
Consolidated Financial Statements).

For the six months ended June 30, 2003 Dofasco's consolidated net
income was $85.9 million or $1.14 per share, virtually unchanged
from last year's results of $86.1 million or $1.14 per share.
However, the trends that led to these results were quite
divergent. In 2002, reduced supply due to facility closures in the
U.S. and the Section 201 trade initiative led to a strong recovery
in U.S. spot market selling prices in the first half of the year.
In 2003, U.S. spot market pricing has been in decline since its
peak in the third quarter of 2002, as previously idled facilities
have been restarted.

Gross Income

Consolidated gross income for the second quarter of 2003 was
$148.1 million, compared to $186.4 million for the same quarter of
2002. For the six months ended June 30, 2003, consolidated gross
income was $305.9 million, compared to $295.3 million in the same
period last year.

Steel Operations

Dofasco's Steel Operations segment contributed strong sales and
gross income during the second quarter, despite the challenging
business conditions. Steel Operations' gross income was $133.5
million, down from $163.5 million in the second quarter of 2002.
The segment's gross income for the first six months of 2003 was
$282.1 million, a 4.8% improvement over the $269.1 million gross
income in the same period of last year. As in previous quarters,
the results of the Steel Operations segment were largely driven by
the Hamilton operations.

For the fifth consecutive quarter, Dofasco's Hamilton operations
shipped over one million tons at 1,019,000 tons compared to the
record 1,114,000 tons shipped in the second quarter of 2002. Steel
shipments in the first half of the year were 2,030,000 tons, a
decrease of 57,000 tons from the first half of 2002.

Hamilton revenue in the second quarter declined by 3.1% from the
same period in 2002. The decrease was mainly due to lower
shipments, partially offset by a $38 increase in average realized
revenue per ton. For the six-month period, average realized
revenue per ton increased by $49, mainly due to higher contract
prices and a continued move toward a higher value product mix.

Hamilton operations' average cost per ton increased by $57 in the
second quarter and $46 in the first half of the year compared to
the same periods in 2002. The increases were largely due to a
significant increase in the use and cost of purchased slabs
resulting from the shutdown of the oxygen steelmaking facility to
replace the vessel (December 8, 2002 to January 11, 2003). Also
contributing to the higher cost per ton were higher energy and
scrap costs and lower production levels at the hot mill and
finishing operations in the second quarter in response to the
weakening market demand.

Gallatin Steel

Continued excellent operating performance led to record shipments
in the second quarter. However, lower selling prices and higher
scrap and energy costs resulted in a decrease in Dofasco's share
of Gallatin's gross income to $5.1 million from $16.5 million in
the second quarter of last year. In the first six months of 2003,
Dofasco's share of Gallatin's gross income was $14.1 million
compared to $20.3 million in 2002.

Quarterly shipments were a record 385,000 tons compared to 362,000
tons in the comparative period, however average realized revenue
per ton fell to US $273 from US $287 in the second quarter of
2002. U.S. hot rolled selling prices faced downward pressure from
increased supply resulting from the restart of several facilities
that were idled in 2002. Average cost per ton increased by US $27
in the quarter compared to the second quarter of 2002 due to
significantly higher scrap and energy prices.

Quebec Cartier Mining

Dofasco's share of QCM's gross income for the second quarter of
2003 was $8.6 million, compared to $4.2 million in 2002. For the
first six months of 2003, Dofasco's share of QCM's gross income
was $5.3 million, compared to a loss of $1.7 million in 2002.

Significantly higher shipments, contract price increases and lower
operating costs contributed to the improvement despite lower
average revenue per tonne, which was impacted by a higher
proportion of lower-priced concentrate and the appreciation of the
Canadian dollar. QCM shipped over 4.0 million tonnes in the second
quarter of 2003, compared to 3.1 million tonnes in the second
quarter of 2002, when the mine was operating at reduced levels in
a difficult iron ore market. Cost reductions implemented since
December 2002 contributed to a $3 improvement in average cost per
tonne in the quarter.

Dofasco and CAEMI of Brazil, each 50% shareholders of QCM,
continue to work toward finalizing the agreements for the
restructuring of QCM with the new Quebec government and related
agencies. The final agreements and resulting capital restructuring
are now expected to be completed in the third quarter.

Depreciation and Amortization

Consolidated depreciation and amortization decreased by $2.2
million in the quarter and $5.3 million year-to-date from the same
periods in 2002. The lower depreciation was mainly due to the
asset impairment write-down at QCM in the fourth quarter of 2002.

Foreign Exchange

Consolidated foreign exchange loss was $16.2 million in the
quarter and $28.2 million year-to-date due to the impact of the
significant weakening of the U.S. dollar on the value of Dofasco's
net U.S. dollar working capital.

Income Taxes

The consolidated effective tax rate of 32.1% for the second
quarter and 33.3% for the first half of 2003 were consistent with
the company's manufacturing and processing rate.

                     CASH FLOW AND BALANCE SHEET

Cash Provided from Operations

In the second quarter of 2003, consolidated cash provided from
operations before changes in non-cash working capital was $108.0
million. After the increase in non-cash working capital of $28.0
million, net cash flow from operations was $80.0 million. The
increase in non-cash working capital was primarily attributable to
an increase in accounts receivable due to higher sales in the
second half of the quarter compared to the second half of the
first quarter. The increase was partially offset by a decrease in
inventories, mainly due to a seasonal decrease at QCM and record
June shipments at Gallatin.

For the six months ending June 30, 2003, consolidated cash
provided from operations before changes in non-cash working
capital was $225.4 million. After the increase in non-cash working
capital of $119.9 million, net cash flow from operations was
$105.5 million. The increase in non-cash working capital was
primarily attributable to an increase in accounts receivable and a
decrease in payables, partially offset by a seasonal decrease in
inventories. The increase in accounts receivable was mainly due to
higher sales in June 2003 compared to December 2002. Significant
first quarter payments for profit sharing, employee performance-
based compensation and the final 2002 income tax installment were
the main reasons for the decrease in payables.

Capital Expenditures

During the second quarter, consolidated capital expenditures were
$28.0 million, a slight increase from $25.8 million for the second
quarter of 2002. On a year-to-date basis, consolidated capital
expenditures were $62.0 million in 2003 compared to $57.6 million
in the first six months of 2002.

Capital expenditures will increase in the second half of the year
due to the first phase of the Finishing Division Improvement
Program in Hamilton and the start of the No. 2 Blast Furnace
rebuild.

Bank Borrowings of Joint Ventures

An increase in bank borrowings at QCM, partially offset by
repayments at Gallatin, resulted in a $2.4 million increase in
consolidated bank borrowings during the second quarter of 2003,
bringing the six month total increase to $10.2 million.

Long-Term Debt

Consolidated long-term debt decreased by $27.0 million during the
quarter, following a $18.0 million reduction in the first quarter
of the year, primarily due to scheduled debt repayments in
Hamilton, QCM and DNN.

At June 30, 2003, QCM remained in breach of certain of the
financial covenants of its long-term debt agreements. QCM
management has obtained a short-term waiver of the covenant
violations from its lenders, which is contingent on written
confirmation by the new Quebec government that it will proceed
with the capital restructuring. Dofasco's proportionate share of
QCM's bank term loan, $35.4 million, has been classified as a
current liability on the consolidated balance sheet.

Dividends

Dofasco paid $22.7 million in dividends in the second quarter,
bringing the year-to-date total to $43.1 million, compared to
$40.8 million in the first half of 2002. This reflects an 11%
increase in the common share dividend to 30 cents per share per
quarter approved by the Board of Directors effective April 1,
2003.

                           STEEL TRADE

The Government of Canada has not yet announced whether it will
implement remedies to address the injury suffered by the Canadian
steel industry, as determined by the Canadian International Trade
Tribunal in its 2002 safeguard investigation. The industry has
requested that tariffs be applied on offshore imports of the five
steel products (including cold rolled sheet) on which the CITT
found injury and that imports from the U.S. not be subject to a
remedy.

                          MARKET OUTLOOK

For 2003, GDP is expected to grow by just under 2% in Canada and
to slightly exceed 2% in the U.S., down from the 3% growth
expected in both countries at the beginning of the year. Demand
for flat rolled steel in North America continued above 2002 levels
through the first four months of 2003, up 2.3% in Canada and 4.5%
in the U.S. Imports into Canada increased by 28% while imports
into the U.S. were 2% lower.

North American car and truck sales to-date this year are down 2.7%
from last year. Third quarter production plans have been reduced
to bring inventories down to more normal levels. Both sales and
production are expected to be down by just over 3% year-over-year.

The expected rebound in the Canadian construction market has been
slow to materialize. The residential market has shown some
seasonal improvement, while non-residential is just beginning to
recover.

Economic conditions are expected to improve over the balance of
the year as confidence strengthens and fiscal and monetary policy,
particularly in the U.S., remains stimulative. Barring any
unforeseen events, overall steel demand in North America is
expected to be marginally higher this year than in 2002, with 2%
to 3% growth expected in 2004.

Reported U.S. spot market flat rolled prices appear to have
bottomed out, as several major U.S. mills announced planned price
increases of $20 per ton starting August 2003. This should help to
stabilize market prices in the months ahead.

                      NORMAL COURSE ISSUER BID

On May 21, the Toronto Stock Exchange approved Dofasco's normal
course issuer bid. Dofasco is now entitled to repurchase up to 6.4
million of its common shares (about 9.5% of the public float of 67
million common shares) over the twelve-month period starting May
23, 2003. All purchases would be made through the TSX, and any
shares repurchased would be cancelled. During the quarter, no
shares were repurchased under this plan.

                INDUSTRY & COMMUNITY RECOGNITION

Toyota Motor Manufacturing North America awarded Dofasco their
"Excellence in Quality Award" for 2002 for having met their
stringent quality performance criteria.

The Honourable Dianne Cunningham, Ontario's Minister of Training,
Colleges and Universities selected Dofasco for the "Minister's
Apprenticeship Award" for the significant contribution to the
province's apprenticeship training system. With 250 apprentices,
Dofasco now supports the second-largest industrial apprentice-
training program in the province.

                    EXECUTIVE APPOINTMENTS

At the May 2nd Annual Meeting, the Board of Directors announced
the following executive appointments. Allen Root was appointed to
the position of Executive Vice President and Chief Operating
Officer. Mr. Root, 59, began his Dofasco career in 1973 and
previously was Vice President, Commercial.

Brian Aranha will replace Allen Root as Vice President,
Commercial. Mr. Aranha, who is 47, started his career at Dofasco
in 1979 and previously was Director, Automotive Business.

                          B. F. MACNEILL D. A. PETHER
                          Chair of the Board President and Chief
                          Executive Officer
                          July 23, 2003


DOBSON COMMS: S&P Hatchets Corporate Credit Rating a Notch to B-
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Dobson Communications Corp. to 'B-' from 'B'.

"The ratings on Oklahoma City, Oklahoma-based Dobson are removed
from CreditWatch with negative implications, where they were
placed on May 1, 2003 because of weakened industry fundamentals
and uncertainty related to the Dobson family loan with Bank of
America," said credit analyst Rosemarie Kalinowski. The outlook is
stable.

As of March 31, 2003, Dobson Communications Corp.'s total debt
outstanding was about $1.3 billion. At the same time, Standard &
Poor's assigned its 'B-' corporate credit rating to rural wireless
carrier Dobson Communications Corp.'s subsidiary ACC Escrow Corp.
Standard & Poor's also assigned a 'B-' to ACC Escrow Corp.'s
corporate credit rating and its $900 million notes due 2011, to be
issued under Rule 144A with registration rights.  Proceeds of the
$900 million note issue will be used to repay American Cellular's
bank debt as part of its restructuring plan, at which time the
'CC' rating on this loan will be withdrawn. ACC Escrow Corp. is a
wholly owned, indirect subsidiary of Dobson Communications Corp.,
and was formed solely to issue the notes and merge with and into
American Cellular Corp. upon consummation of American Cellular
Corp.'s reorganization.

When the reorganization is completed, American Cellular Corp. will
be assigned a 'B-' corporate credit rating, with a stable outlook.
American Cellular will become a wholly-owned unrestricted
subsidiary of Dobson Communications Corp. For analytical purposes,
Standard & Poor's will assess Dobson on a consolidated basis with
American Cellular.

While unsecured debt at Dobson is rated two notches below the
corporate credit rating due to the high degree of concentration of
bank debt in the corporate structure, the unsecured ACC Escrow
Corp. notes are rated the same as the corporate credit rating
because of the minimal amount of priority obligations anticipated
in American Cellular's proposed capital structure. These notes are
non-recourse to Dobson Communications Corp.

Standard & Poor's had been concerned about the change of control
risk at Dobson Communications under the $320 million Dobson
Communications Corp. LP loan with Bank of America, which could
have required Dobson to offer to purchase its outstanding senior
notes at 101% of the principal amount plus accrued and unpaid
interest.  A change of control also constitutes an event of
default under Dobson's bank credit facility, entitling the lender
to accelerate the maturity of that debt. However, an agreement
closed on May 19 between the parties eliminates the change of
control risk at Dobson Communications related to possible future
default on the DCCLP loan. Under this agreement,  the DCCLP loan
has been reduced to $60 million and Bank of America permanently
released its lien on a sufficient number of shares of Dobson
Communications' common stock to ensure that DCCLP retain a
controlling interest in Dobson Communications. Yet, despite the
resolution of this overhang, the ratings on Dobson are lowered
because of weakened fundamentals for the rural wireless industry,
including continued declines in roaming yield, and the potential
for increased competition when number portability is implemented
in November 2003, particularly from the national carriers. Roaming
revenue is about 30% of total revenue. These factors are somewhat
offset by the company's somewhat below average churn rate of 2.2%
and above average EBITDA margin in the mid-40% area.


ENRON CORP: Employee Committee Files Suit to Recover $72 Million
----------------------------------------------------------------
The Employee-Related Issues Committee has filed suit against 292
select former employees, officers and executives of Enron. The
suits allege that these favored Enron employees lined their
pockets with excessive, wrongful bonuses in the days immediately
preceding and following Enron's declaration of bankruptcy on
December 2, 2001. The defendants hastily arranged the bonuses and
payments at the 11th hour, in many cases on the last business day
before Enron filed for bankruptcy protection. The Employee
Committee has been investigating these bonuses, and has now filed
these actions, as described in four separate lawsuits filed
against the 11th Hour Bonus recipients in the United States
Bankruptcy Court in Houston. Eleventh-hour Bonus recipients
collectively walked away from Enron with more than $72 million.

"We intend to hold 11th Hour Bonus recipients accountable for
their self- dealing as Enron fell into bankruptcy," said Richard
D. Rathvon, co-chair of the Employee Committee. "Even as thousands
of regular Enron employees and retirees were facing the loss of
life savings, health benefits, their jobs or pensions, these
favored few were scheming to get millions more for themselves.

David P. McClain of McClain, Leppert & Maney, special litigation
counsel to the Employee Committee noted, "Many defendants already
had lucrative employment contracts calling for significant
bonuses, but in the final days, they looked for new ways to
benefit themselves at the expense of other employees and
creditors. The Employee Committee filed these 11th Hour Bonus
suits to correct these wrongs and return the money to eligible
former employees."

The Employee Committee learned in its investigation that Enron
referred to some of the 11th Hour Bonuses as the "911 Project."
Said Rathvon, "Even as the ink was drying on the bankruptcy
filing, Enron continued its egregious behavior. The '911 Project'
is either a reference to a 911 emergency for the favored few
wanting to raid the piggy bank, or a crass reference to September
11th, with the twin towers of Enron coming down into the throes of
bankruptcy. Either way, the reference is appalling."

The Committee has filed four separate lawsuits: two against groups
of former favored employees and two against individuals. The
lawsuits cover the following actions taken by 11th Hour Bonus
recipients:

* Beginning 38 days prior to bankruptcy, a group of favored Enron
   employees began a frantic series of actions designed to award
   themselves dramatic increases to already lucrative bonuses and
   to ensure that they would be paid before the bankruptcy was
   filed. Many of these additional bonuses were for millions of
   dollars, up to $8 million. The closer Enron got to filing
   bankruptcy, the higher these traders raised their bonuses. For
   example, one bonus was for $5 million, or 5,333 percent higher
   than the employee's annual salary. Payments were made by checks
   dated November 30, 2001, the last business day before the
   bankruptcy filing.

* Selected employees were paid their 2001 performance benefits
   months in advance. Many of these bonus recipients were paid by
   cashier's checks -- the first time Enron had paid employee
   compensation in this manner -- a clear attempt to avoid the
   effect of the bankruptcy filing.

* The two individual executives took similar action, awarding
   themselves higher bonuses even as one helped prepare Enron's
   bankruptcy filing.

The Employee Committee has authority to seek the recovery of the
11th Hour Bonuses as part of an agreement reached with Enron in
August of 2002 regarding severance pay and approved by the U.S.
Bankruptcy Court. Any 11th Hour Bonus monies recovered as a result
of the Employee Committee's efforts will be placed in a trust fund
and later distributed to eligible former Enron employees.

"The Employee Committee continues to represent the interests of
current and former Enron employees and retirees," said Rathvon.
"Returning the millions taken wrongfully at the 11th hour is part
of that effort."

In summary, the Employee Committee filed four lawsuits in United
States Bankruptcy Court in Houston as follows:

           * 56 Defendants Suit ($44,399,999)
           * James B. Fallon Suit ($1,500,000)
           * 228 Defendants Suit ($24,491,300)
           * Jeffery McMahon Suit ($1,500,000)

A summary of these cases, the actual court documents and copies of
the Performance Bonus Letters to 11th hour Bonus Recipients can be
found on the Employee Committee Web site at
http://www.employeecommittee.com/pressreleases.asp

The Employee Committee is an official committee appointed by the
United States Trustee charged with representing the collective
interests of all current, former and retired Enron employees in
Enron's bankruptcy case. The Employee Committee serves as a strong
advocate for the interests of former and current Enron employees
during the bankruptcy process. Members of the Committee were
selected by the United States Trustee and the make-up of the
Committee was designed to reflect the broad diversity of Enron's
current and former workforce. The Committee is working to provide
employees with timely, accurate information on the status of the
bankruptcy case.


ENRON CORP: Provides Property Distribution Under Chapter 11 Plan
----------------------------------------------------------------
Enron Corporation's Proposed Chapter 11 Plan is premised on the
distribution of all of the Debtors' assets through Creditor Cash,
Plan Securities and Interests in the Litigation Trust and the
Special Litigation Trust in accordance with the priority scheme
contained in the Bankruptcy Code, Stephen F. Cooper, Acting
President, Acting Chief Executive Officer and Chief Restructuring
Officer of Enron Corp. tells the Court.

                            Creditor Cash

In addition to Cash available to pay Secured Claims,
Administrative Expense Claims, Priority Claims, and Convenience
Class Claims, Cash distributions will be made from available
Creditor Cash to holders of Allowed General Unsecured Claims,
Allowed Intercompany Claims, Allowed Wind Guaranty Claims, and
Allowed Enron Guaranty Claims.  Notwithstanding, upon the joint
determination of the Debtors and the Creditors' Committee, the
Remaining Assets will be transferred to the Remaining Asset
Trust, and the appropriate holders of Allowed Claims will be
allocated Remaining Asset Trust Interests.  As the Remaining
Assets are liquidated, Creditor Cash will be distributed to the
holders of the Remaining Asset Trust Interests.  The Remaining
Asset Trust Interests will be uncertificated and non-
transferable, except through descent or distribution; provided,
however, that a recipient may hold the remaining Asset Trust
Interests through a single wholly owned entity.

                           PGE Common Stock

Unless PGE is sold to a third party, the Reorganized Debtors will
hold common stock in PGE until the shares of common stock are
cancelled and newly issued shares of PGE Common Stock are
distributed to the holders of Allowed General Unsecured Claims,
Allowed Enron Guaranty Claims, Allowed Wind Guaranty Claims, and
Allowed Intercompany Claims.  Upon issuance, the PGE Common Stock
will be freely transferable by its recipients that are not
"underwriters" under Section 1145 of the Bankruptcy Code.  PGE
may list the PGE Common Stock on a national exchange or NASDAQ,
but there can be no assurances that it will do so.

In the event that all or part of PGE is sold prior to the PGE
Common Stock distribution, the net proceeds will be distributed
to Creditors in lieu of or in addition to PGE Common Stock.
Also, upon the joint determination of the Debtors and the
Creditors' Committee, before the PGE Common Stock is released to
the holders of Allowed Claims, the PGE Common Stock may first be
issued to the PGE Trust with the PGE Trust Interests being
allocated to the appropriate holders of Allowed Claims and the
reserve for Disputed Claims.   When there are sufficient Allowed
General Unsecured Claims to permit distribution of 30% of the PGE
Common Stock, the stock, if not sold prior to that time, will be
released from the PGE Trust to holders of Allowed Claims, with
the remainder to be held in reserve for Disputed Claims.

The Reorganized Debtors anticipate providing transition services
to PGE, including administrative services, insurance services and
certain employee benefits through approximately December 31, 2004
and may enter into other arrangements.

PGE and ENE agreed that PGE will be responsible for the amount of
income tax that it would have paid on a "stand alone" basis and
ENE will be obligated to make payments to PGE as compensation for
the use of PGE's losses or credits to the extent the losses or
credits have reduced the consolidated income tax liability.  It
is intended that ENE and PGE will file consolidated tax returns
until ENE no longer owns 20% of PGE's capital stock.

                      CrossCountry Common Stock

CrossCountry is a newly formed non-Debtor subsidiary of ENE,
ETSC, EOS, and Enron Operations, L.P.  As a newly formed holding
company, CrossCountry will hold the Debtors' Pipeline Businesses,
which provide natural gas transportation services through an
extensive North American pipeline infrastructure.  CrossCountry's
principal assets will consist of:

     (i) a 100% ownership interest in Transwestern,

    (ii) a 50% ownership interest in Citrus, and

   (iii) a 100% interest in Northern Plains.

Unless CrossCountry is sold to a third party, the Reorganized
Debtors will hold common stock in CrossCountry until:

     (i) the shares are cancelled and shares of CrossCountry
         Common Stock are issued to the Creditors; or

    (ii) the shares are assigned to a holding company and the
         holding company's shares are issued to the Creditors.

Pursuant to the Plan, at or subsequent to the Effective Date, ENE
will cause CrossCountry to distribute its common stock to holders
of Allowed General Unsecured Claims, Allowed Enron Guaranty
Claims, Allowed Wind Guaranty Claims, and Allowed Intercompany
Claims.  Upon issuance, the CrossCountry Common Stock will be
freely transferable by its recipients that are not "underwriters"
under Section 1145.  CrossCountry agreed to use its best efforts
to list the CrossCountry Common Stock on a national exchange or
NASDAQ, but there can be no assurances that it will do so.

In the event that all or part of CrossCountry is sold prior to
distribution of the CrossCountry Common Stock, the net proceeds
will be distributed to Creditors in lieu of or in addition to
CrossCountry Common Stock.  Also, upon the joint determination of
the Debtors and the Creditors' Committee, before the CrossCountry
Common Stock is released to the holders of Allowed Claims, the
CrossCountry Common Stock may first be issued to the CrossCountry
Trust with the CrossCountry Trust Interests being allocated to
the appropriate holders of Allowed Claims and the reserve for
Disputed Claims.  The CrossCountry Trust Interests will be
uncertificated and non-transferable, except through descent or
distribution.  When there are sufficient Allowed General
Unsecured Claims to permit distribution of 30% of the
CrossCountry Common Stock, the stock, if not sold prior to that
time, will be released from the CrossCountry Trust to the Allowed
Claims holders, with the remainder to be held in reserve for
Disputed Claims.

The Reorganized Debtors anticipate providing transition services,
including administrative operation management, through
approximately December 31, 2004.

                     InternationalCo Common Stock

InternationalCo is a Cayman Islands entity formed initially as a
shell holding company pending the transfer of certain
international energy infrastructure businesses that are
indirectly owned by ENE and certain of its affiliates.  If
all businesses that currently are designated to be transferred to
InternationalCo are successfully transferred, InternationalCo
will engage in the generation and distribution of electricity,
the transmission and distribution of natural gas and LPG, and the
processing of NGLs, and will have assets in 13 countries.

Unless InternationalCo is sold to a third party, the Reorganized
Debtors will hold common stock in InternationalCo until the
shares are cancelled and shares of InternationalCo Common Stock
are issued to the Creditors.

Pursuant to the Plan, at or subsequent to the Effective Date, ENE
will cause InternationalCo to distribute its common stock to
holders of Allowed General Unsecured Claims, Allowed Enron
Guaranty Claims, Allowed Wind Guaranty Claims, and Allowed
Intercompany Claims.  The InternationalCo Common Stock will be
freely transferable upon issuance by its recipients that are not
"underwriters" under Section 1145.  InternationalCo may list the
InternationalCo Common Stock on a national exchange or NASDAQ,
but there can be no assurances that it will do so.

In the event that all or part of InternationalCo is sold prior to
distribution of the InternationalCo Common Stock, the net
proceeds will be distributed to Creditors in lieu of or in
addition to InternationalCo Common Stock.  Also, upon the joint
determination of the Debtors and the Creditors' Committee, before
the InternationalCo Common Stock is released to the holders of
Allowed Claims, the InternationalCo Common Stock may first be
issued to the InternationalCo Trust with the InternationalCo
Trust Interests being allocated to the appropriate holders of
Allowed Claims and the reserve for Disputed Claims.  The
InternationalCo Trust Interests will be uncertificated and non-
transferable, except through descent or distribution.  When there
are sufficient Allowed General Unsecured Claims to permit
distribution of 30% of the InternationalCo Common Stock, the
stock, if not sold prior to that time, will be released from the
InternationalCo Trust to the holders of Allowed Claims, with the
remainder to be held in reserve for Disputed Claims.

The Reorganized Debtors anticipate providing transition services,
including administrative operation management, through
approximately December 31, 2004.

                           Operating Trust

On or after the Confirmation Date, but prior to the Effective
Date, and upon the joint determination of the Debtors and the
Creditors' Committee, the Debtors, on their own behalf and on
behalf of holders of Allowed Claims in Classes 3 through 177 and
357 through 365 will execute certain Operating Trust Agreements
and will take all other steps necessary to establish the
Operating Trusts.  The Operating Trusts will be established to
hold and liquidate the assets in the InternationalCo Trust, the
CrossCountry Trust and the PGE Trust.  Without limitation, the
Operating Trust Agreements will each provide that the applicable
Operating Trust will not distribute any of the InternationalCo
Common Stock, CrossCountry Common Stock or PGE Common Stock, as
the case may be.

The Operating Trusts will terminate no later than the third
anniversary of the Confirmation Date; provided, however, that, on
or prior to the date three months prior to the termination, the
Bankruptcy Court, upon motion by a party-in-interest, may extend
the term of the Operating Trusts if it is necessary to the
Operating Trusts' assets liquidation.  Notwithstanding, multiple
extensions can be obtained so long as Bankruptcy Court approval
is obtained at least three months prior to the expiration of each
extended term; provided, however, that the aggregate of all
extensions will not exceed three years from and after the third
anniversary of the Confirmation Date.

                        Remaining Asset Trusts

On or after the Confirmation Date, but prior to the Effective
Date, and upon the joint determination of the Debtors and the
Creditors' Committee, the Debtors, on their own behalf and on
behalf of holders of Allowed Claims in Classes 3 through 177 and
357 through 365 will execute Remaining Asset Trust Agreements and
will take all other steps necessary to establish the Remaining
Asset Trusts.  The Remaining Asset Trusts will be established to
hold and liquidate the assets in the Remaining Asset Trusts.
Upon the transfer of the Remaining Assets to the Remaining Asset
Trusts, the Debtors will have no interest in or with respect to
the Remaining Assets or the Remaining Asset Trusts.

The Remaining Asset Trusts will terminate no later than the third
anniversary of the Confirmation Date; provided, however, that, on
or prior to the date three months prior to termination, the
Bankruptcy Court, upon a party-in-interest's motion, may extend
the term of the Remaining Asset Trusts if it is necessary to the
Remaining Asset Trusts assets liquidation.  Notwithstanding,
multiple extensions can be obtained so long as Bankruptcy Court
approval is obtained at least three months prior to the
expiration of each extended term; provided, however, that the
aggregate of all extensions will not exceed three years from and
after the third anniversary of the Confirmation Date.

                           Litigation Trust

The Litigation Trust will be established for the sole purpose of
liquidating its assets, with no objective to continue or engage
in the conduct of a trade or business.  The transfer of the
Litigation Trust Claims to the Litigation Trust will be made for
the benefit of the Allowed Claims holders in Classes 3 through
176, only to the extent the Classes holders are entitled to
distributions under the Plan.  Upon the transfer of the
Litigation Trust Claims to the Litigation Trust, the Debtors will
have no interest in or with respect to the Litigation Trust
Claims or the Litigation Trust.

The Litigation Trustee, upon direction by the Litigation Trust
Board and the exercise of their collective reasonable business
judgment, will, in an expeditious but orderly manner, liquidate
and convert to Cash the assets of the Litigation Trust, make
timely distributions and not unduly prolong the duration of the
Litigation Trust.  The Litigation Trustee will be named in the
Confirmation Order or in the Litigation Trust Agreement and will
have the power to:

     (i) prosecute for the benefit of the Litigation Trust all
         claims, rights and causes of action transferred to the
         Litigation Trust, and

    (ii) perform the functions and take the actions provided for
         or permitted in the Plan or in any other agreement
         executed by the Litigation Trustee pursuant to the Plan.

The Litigation will have no liability for the outcome of its
decision except for any damages caused by willful misconduct or
gross negligence.  Any and all proceeds generated from claims,
rights, and causes of action will be the property of the
Litigation Trust.

The Litigation Trustee may incur any reasonable and necessary
expenses in liquidating and converting the assets to Cash and
will be reimbursed in accordance with the provisions of the
Litigation Trust Agreement.

The liquidation of the Litigation Trust Claims may be
accomplished either through the prosecution, compromise and
settlement, abandonment or dismissal of any or all claims, rights
or causes of action, or otherwise.

The Litigation Trust will terminate no later than the fifth
anniversary of the Effective Date; provided, however, that, on or
prior to the date three months prior to termination, the
Bankruptcy Court, upon a party-in-interest's motion, may extend
the term of the Litigation Trust if it is necessary to the
liquidation of the Litigation Trust Claims.  Notwithstanding,
multiple extensions can be obtained so long as Bankruptcy Court
approval is obtained at least three months prior to the
expiration of each extended term.

                       Special Litigation Trust

On the Effective Date, the Debtors, on their own behalf and on
behalf of the holders of Allowed Claims in Classes 3 through 176
will execute the Special Litigation Trust Agreement and will take
all other steps necessary to establish the Special Litigation
Trust.  On the Effective Date, the Debtors will transfer to the
Special Litigation Trust all of their right, title, and interest
in the Special Litigation Trust Claims.  Upon the transfer of the
Special Litigation Trust Claims, the Debtors will have no
interest in or with respect to the Special Litigation Trust
Claims or the Special Litigation Trust.

In connection with these rights and causes of action, any
attorney-client privilege, work-product privilege, or other
privilege or immunity attaching to any documents or
communications transferred to the Special Litigation Trust will
vest in the Special Litigation Trustee and its representatives,
and the Debtors and the Special Litigation Trustee are authorized
to take all necessary actions to effectuate the transfer of the
privileges.  The Special Litigation Trustee will be named in the
Confirmation Order or in the Special Litigation Trust Agreement
and will have any and all proceeds generated from the claims,
rights, and causes of action will be the property of the Special
Litigation Trust.

As soon as possible after the Effective Date, but in no event
later than 30 days thereafter, the Special Litigation Trust Board
will inform, in writing, the Special Litigation Trustee of the
value of the assets transferred to the Special Litigation Trust,
based on the good faith determination of the Special Litigation
Trust Board, and the Special Litigation Trustee will apprise, in
writing, the beneficiaries of the Special Litigation Trust of the
valuation.

The Special Litigation Trustee, upon the Special Litigation Trust
Board's direction and the exercise of their collective reasonable
business judgment, will, in an expeditious but orderly manner,
liquidate and convert to Cash the assets of the Special
Litigation Trust, make timely distributions and not unduly
prolong the duration of the Special Litigation Trust.  The
liquidation of the Special Litigation Trust Claims may be
accomplished either through the prosecution, compromise and
settlement, abandonment or dismissal of any or all claims, rights
or causes of action, or otherwise.  The Special Litigation
Trustee, upon the Special Litigation Trust Board's direction,
will have the power to:

     (i) prosecute for the benefit of the Special Litigation Trust
         all claims, rights and causes of action transferred to
         the Special Litigation Trust, and

    (ii) perform the functions and take the actions provided for
         or permitted herein or in any other agreement executed by
         the Special Litigation Trustee pursuant to the Plan.

The Special Litigation Trustee will have no liability for the
outcome of its decision except for any damages caused by willful
misconduct or gross negligence.  The Special Litigation Trustee
may incur any reasonable and necessary expenses in liquidating
and converting the assets to Cash.

The Special Litigation Trust will terminate no later than the
fifth anniversary of the Effective Date; provided, however, that,
on or prior to the date three months prior to termination, the
Bankruptcy Court, upon a party-in-interest's motion, may extend
the Special Litigation Trust terms if it is necessary to the
liquidation of the Special Litigation Trust Claims.
Notwithstanding, multiple extensions can be obtained so long as
Bankruptcy Court approval is obtained at least three months prior
to the expiration of each extended term.

                       Preferred Equity Trusts

On or after the Confirmation Date, but prior to the Effective
Date, the Debtors, on their own behalf and on behalf of the
holders of Allowed Equity Interests in Class 363 will execute the
Preferred Equity Trust Agreement and will take all other steps
necessary to establish the Preferred Equity Trust.  Subject to
appropriate or required governmental, agency or other consents,
and in accordance with and pursuant to the terms of the Plan, the
Debtors will transfer to the Preferred Equity Trust all of their
right, title, and interest in the Exchanged Enron Preferred Stock
subject to the Preferred Equity Trust Agreement.

The Preferred Equity Trust will be established to hold the
Exchanged Enron Preferred Stock in accordance with Treasury
Regulation Section 301.7701-4(d) and the Preferred Equity Trust
Agreement terms and provisions.  Without limitation, the
Preferred Equity Trust Agreement will provide that, to the extent
that the Preferred Equity Trust receives Cash distributions under
this Plan, it will redistribute the Cash to the Preferred Equity
Trust Interests holders, but in no event will any Preferred
Equity Trust Interests holder receive a distribution of Exchanged
Enron Preferred Stock.

The Preferred Equity Trust will terminate no later than the
Confirmation Date's third anniversary; provided, however, that,
on or prior to the date three months prior to termination, the
Bankruptcy Court, upon a party-in-interest's motion, may extend
the term of the Preferred Equity Trust if it is necessary to the
liquidation of the assets of Preferred Equity Trust.  Although,
multiple extensions can be obtained so long as Bankruptcy Court
approval is obtained at least three months prior to the
expiration of each extended term; provided, however, that the
aggregate of all extensions will not exceed three years from and
after the third anniversary of the Confirmation Date.

                        Common Equity Trust

On or after the Confirmation Date, but prior to the Effective
Date, the Debtors, on their own behalf and on behalf of the
holders of Allowed Enron Common Equity Interests in Class 364
will execute the Common Equity Trust Agreement and will take all
other steps necessary to establish the respective Common Equity
Trust.  Subject to appropriate or required governmental, agency
or other consents, and in accordance with and pursuant to the
Plan, the Debtors will transfer to the Common Equity Trust all of
their right, title, and interest in the Exchanged Enron Common
Stock subject to the Common Equity Trust Agreement.

The Common Equity Trust will be established to hold the
Reorganized Debtors' Common Stock in accordance with Treasury
Regulation Section 301.7701-4(d) and the Common Equity Trust
Agreement.  Without limitation, the Common Equity Trust Agreement
will provide that, to the extent that the Common Equity Trust
receives Cash distributions under the Plan, it will redistribute
the Cash to the Common Equity Trust Interests holders, but in no
event will any Common Equity Trust Interests holder receive an
Exchanged Enron Common Stock distribution.

The Common Equity Trust will terminate no later than the
Confirmation Date's third anniversary; provided, however, that,
on or prior to the date three months prior to termination, the
Bankruptcy Court, upon a party-in-interest's motion, may extend
the term of the Common Equity Trust if it is necessary to the
Common Equity Trust assets liquidation.  Notwithstanding,
multiple extensions can be obtained so long as Bankruptcy Court
approval is obtained at least three months prior to the
expiration of each extended term; provided, however, that the
aggregate of all extensions will not exceed three years from and
after the third anniversary of the Confirmation Date. (Enron
Bankruptcy News, Issue No. 75; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


EURAMAX INT'L: S&P Rates Planned $200 Million Senior Notes at B
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating to
Euramax International Inc.'s proposed $200 million senior
subordinated notes offering due 2011. Proceeds from the notes
offering are expected to be used to repurchase existing debt. The
company's 'BB-' corporate credit rating was affirmed, but Standard
& Poor's revised its outlook on the company to negative from
stable. As of March 31, 2003, the company had approximately $217
million of debt outstanding.

"The outlook revision reflects the potential for very constrained
liquidity and limited debt capacity if the company initiates both
a debt-financed dividend and acquisition at nearly the same time,"
said Standard & Poor's credit analyst Eric Ballantine.

Over the past several years, Euramax has focused on internal
growth, but the company has indicated that future niche
acquisitions are possible and would be funded either by excess
availability under a revolving credit facility or potentially
additional bank debt in the form of a new $45 million term loan.
In addition, the company has indicated that it may pay a dividend
of up to $70 million to its equity sponsors in the very near
term.

As a result, financial leverage would increase from current
levels, and the company's financial flexibility and excess debt
capacity would be limited.

Euramax International has solid market positions, especially in
certain geographic regions, in the do-it-yourself (DIY) market for
rain-carrying systems and products and is the only national
supplier. It is also the leading global supplier of aluminum
sidewalls to the towable recreational
vehicle and manufactured housing markets.

Most of Euramax's business segments are cyclical and subject to
pricing pressures; however, a diverse earnings base (together with
a sizable portion of sales from the more stable repair,
maintenance, and remodeling industries) helps reduce earnings and
cash flow volatility.


FAIRCHILD SEMICON.: Files Form S-3 Shelf Registration Statement
---------------------------------------------------------------
Fairchild Semiconductor International, Inc. (NYSE: FCS) has filed
a Form S-3 shelf registration statement with the Securities and
Exchange Commission to register 7,421,075 shares of common stock.
These are not newly issued shares of the company's stock.

They are currently outstanding, but were previously unregistered.
The sale of these shares will not add to Fairchild's outstanding
share count and will not dilute ownership of Fairchild
stockholders.

The shares being registered are owned by Court Square Capital
Limited, an affiliate of Citigroup Inc. The shares may be sold to
the public from time to time or at any time after the registration
statement becomes effective. Court Square Capital will receive all
of the proceeds from the sale of these shares. Fairchild
Semiconductor will not receive any proceeds.

A Form S-3 registration statement relating to these securities has
been filed with the Securities and Exchange Commission, but has
not yet become effective. These securities may not be sold under
this registration nor may offers to buy be accepted prior to the
time the registration statement becomes effective. This press
release shall not constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of those securities
in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such state. The registration statement and
all other SEC filings by the company are available for review at
http://www.sec.govor on Fairchild Semiconductor's Web site at
http://www.investor.fairchildsemi.com

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.

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


FARMLAND INDUSTRIES: Senators Urged to Clear Smithfield Deal
------------------------------------------------------------
"Every day that the creditors and bondholders of Farmland wait for
this transaction to be approved is a day their likely return is
diminished," said Joe Sebring, president of John Morrell, an Ohio-
based company that produces processed meats and fresh pork and a
subsidiary of Smithfield Foods. Many of these bondholders and
trade creditors are farmers and small business-owners.

Mr. Sebring was a witness at a hearing held here today by a Senate
subcommittee on agricultural consolidation and Smithfield's
proposal to acquire Farmland Foods. He was referring to the
Farmland Industries bankruptcy, in which Farmland owes some 11,000
bondholders almost $600 million and over 21,000 trade creditors
almost $800 million. In Iowa alone, Farmland owes more than 4,000
bondholders approximately $92 million and about 4,200 trade
creditors are owed $37 million.

Smithfield has made a bid to acquire certain pork production and
processing assets of Farmland Foods, a division of Farmland
Industries. Farmland and its Official Committee of Unsecured
Creditors and Official Committee of Bondholders chose Smithfield
as the "stalking horse" bidder after conducting an extensive
marketing process with other potential acquirers, and after
considering reorganizing the company around Farmland Foods.

"The Official Committee apparently concluded that the Smithfield
transaction provides the greatest opportunity to generate the
highest available value to creditors, in addition to offering
security and stability to the employees, independent hog
producers, customers and communities of Farmland Foods," said Mr.
Sebring.

"Under the terms of the agreement, Smithfield will honor all
current Farmland Foods hog production contracts. Smithfield and
Farmland Foods also will remain committed to purchasing
significant numbers of hogs on the open market," according to Mr.
Sebring. "In short, the acquisition should have no impact
whatsoever on the farmers currently supplying hogs to Farmland,
either on a contract or a negotiated basis," he said.

According to Mr. Sebring, all of the 6,100 employees of Farmland
Foods will be able to keep their jobs, and all of the Farmland
Foods facilities will remain open at current, and in some cases,
higher production levels. The United Food and Commercial Workers
will continue to be recognized at all of the unionized plants, and
Smithfield has offered to assume the Farmland Foods pension plan.
Smithfield also will assume and honor all of Farmland's current
hog production contracts. Farmland Foods will remain a stand-alone
business operated by its current management, with the same
entrepreneurial independence that Smithfield encourages in all of
its businesses. The current Farmland Foods management team and
headquarters employees will remain based in Kansas City. He said
that Smithfield would preserve and invest in the Farmland brand.

"You may hear [Wednes]day the argument that the acquisition will
somehow restrict small farmer's ability to sell their hogs at fair
prices in the areas surrounding the Midwest plants of Smithfield
and Farmland. That is speculation and is not supported by the
facts," noted Mr. Sebring. "Smithfield and Farmland today do not
compete for the same hogs, as an examination of the location of
the two companies' hog slaughter facilities and buying stations
will make clear," he said.

Mr. Sebring said that neither Smithfield nor Farmland (alone or
combined) is remotely in a position to exert control in the
Midwest for the purchase or slaughter of hogs. Smithfield and
Farmland are the fourth and sixth largest pork processing
competitors, respectively. Tyson will remain the largest
competitor, while the second and third largest competitors, Swift
and Excel, together will continue to be larger than
Smithfield/Farmland in the Midwest.

Mr. Sebring explained that Smithfield tried to make the
transaction into as much of a status quo proposal as possible,
because Farmland Foods remained a sound business within the
financially troubled Farmland Industries and a proposal that
preserved the strengths of Farmland was therefore a sound
investment for Smithfield, and more likely to gain favor with the
creditors, the bondholders and the bankruptcy court. He said that
John Morrell has no intention to close its existing facilities in
Sioux Falls, South Dakota or Sioux City, Iowa. As a result, there
will be no decrease in slaughter capacity (sometimes referred to
as "shackle space") as a result of the acquisition.


FLEMING: Selling Wholesale Distribution Business for $4 Million
---------------------------------------------------------------
Since the Petition Date, Fleming Companies Inc. and affiliates
Fleming Transportation Services, Inc., Piggly Wiggly Company, RFS
Marketing Services Inc. and Fleming International Ltd. have
operated under a significant cash constraint even with a
$150,000,000 DIP financing facility.  As a result, the Debtors
have been unable to service all of their customers at their
wholesale distribution business at consistent service levels that
they have historically achieved.  This has resulted in attrition
of their customer base and has compelled them to explore
strategic alternatives for the Wholesale Distribution Business.

The Debtors' wholesale grocery distribution business supplies a
full line of products to grocery stores, discount stores,
supercenters and specialty retailers.  The Debtors also operate
convenience store distribution, which supplies products to
traditional convenience retailers.  The majority of the
Convenience Business is operated under the corporate name of
Core-Mark International, Inc. and its subsidiaries.

The Debtors' efforts to stabilize their operations have included
a number of strategic initiatives to both reduce their cash bum
rate and consolidate inventory at critical locations to better
meet customer demand.  These efforts have included selling their
retail assets, disposing of non-core assets, shutting down
redundant facilities and eliminating certain other material
overhead costs.  But the Debtors have nonetheless continued to
experience weakened service levels with certain customers that do
not meet these customers' demands.

After considering their ability to survive as a stand-alone
entity in the face of liquidity issues, customer dissatisfaction
and the potential for further customer defection, the Debtors
concluded that the best way to maximize the value of their assets
and to preserve jobs would be through a prompt sale of their
businesses as a going concern.  The Debtors invested considerable
resources exploring various transaction structures with different
acquirers and heavily negotiated these potential transactions
with several suitors.  In consultation with their advisors, the
Debtors have determined that the best way to maximize the going-
concern value of the Wholesale Distribution Business is to offer
it for sale to a purchaser willing to purchase substantially all
of the Wholesale Distribution Business assets and enter into an
inventory supply arrangement to provide them with additional
liquidity pending a sale.

After examining all alternatives, the Debtors concluded that C&S
Wholesale Grocers, Inc.'s offer for the Wholesale Distribution
assets is most beneficial for the estates.  C&S has offered
$4,000,000 for the Assets.

On June 27, 2003, the parties entered into a letter of intent
pursuant to which the Debtors were obligated to negotiate only
with C&S for the sale of the Wholesale Distribution Business
through July 7, 2003.  The exclusivity enabled C&S and the
Debtors to document an asset purchase agreement with C&S
Acquisition LLC, a C&S subsidiary that will be designated as
purchaser for the assets.  C&S guarantees C&S Acquisition's
obligations under the Asset Purchase Agreement.

Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub P.C., tells the Court that the Debtors are highly
motivated to consummate a sale to C&S Acquisition or another
third party.  The Debtors believe that selling the assets to a
reputable third party in the food-service industry is the best
and most expedient method of stabilizing their customer base and
ensuring the continued uninterrupted flow of product to these
customers.

The Debtors are contemplating on consummating the sale of the
Wholesale Distribution Business Assets within a relatively short
time frame.  Ms. Jones explains that the value of the Wholesale
Distribution Business is extremely time-sensitive given the
importance of customer relationships to that business and the
threatened continued erosion of these relationships.  According
to Ms. Jones, the Debtors have determined that the value of their
estates will be maximized if they are able to consummate a sale
by early August 2003.  Any sale that might occur later than early
August 2003 would yield markedly less value.

Against this backdrop, the Debtors ask the Court to affirm their
business judgment and authorize the sale of their Wholesale
Distribution Business assets to C&S Acquisition, subject to
higher or better offers.  The Debtors propose to sell the assets
free and clear of all liens, claims and encumbrances. (Fleming
Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


FOSTER WHEELER LTD: Ability to Continue Operations Uncertain
------------------------------------------------------------
Foster Wheeler Ltd. updates its laundry list of risk factors in
its latest filing with the Securities and Exchange Commission to
say, "Foster Wheeler Ltd.'s financial statements are prepared on a
going concern basis, but we may not be able to continue as a going
concern."

The consolidated financial statements of Foster Wheeler Ltd. for
the fiscal year ended December 27, 2002, are prepared on a going
concern basis, which contemplates the realization of assets and
the satisfaction of liabilities in the normal course of business.
We may not, however, be able to continue as a going concern.
Realization of assets and the satisfaction of liabilities in the
normal course of business are dependent on, among other things,
our ability to return to profitability, to continue to generate
cash flows from operations, asset sales and collections of
receivables to fund our obligations, including those resulting
from asbestos related liabilities, as well as our maintaining
credit facilities and bonding capacity adequate to conduct our
business. We incurred significant losses in each of the years in
the two-year period ended December 27, 2002 and in the quarter
ended March 28, 2003, and had a shareholder deficit of
approximately $801 million at March 28, 2003. We have substantial
debt obligations and during 2002 were unable to comply with
certain debt covenants under our previous revolving credit
agreement. Accordingly, we received waivers of covenant violations
and ultimately negotiated new credit facilities in August 2002. In
November 2002, we amended the new agreement to provide covenant
relief of up to $180 million of gross pre-tax charges recorded in
the third quarter of 2002 and also to provide that up to an
additional $63 million in pretax charges related to specific
contingencies could be excluded from the covenant calculation
through December 31, 2003, if incurred. In March 2003, we again
amended the agreement to provide further covenant relief by
modifying certain definitions of financial measures utilized in
the calculation of the financial covenants and the minimum EBITDA
and senior debt ratio. There is no assurance that we will be able
to comply with the terms of our senior secured credit agreement,
as amended, and other debt agreements during 2003. These matters
raise substantial doubt about our ability to continue as a going
concern.

We might not be able to implement our financial restructuring plan
and might not be able to restructure our indebtedness in a manner
that would allow us to remain a going concern.

Our planned restructuring contemplates this exchange offer, the
expected exchange offer for Foster Wheeler Ltd.'s convertible
subordinated notes and the Robbins bonds and possible sales of
assets, including the sale of one or more of our European
operations. We may not be able to complete the components of our
restructuring plan on acceptable terms, or at all. Even if we
complete our restructuring plan, we may be left with too much debt
and too few assets to survive. If we are successful in our
restructuring plan, we will have to reform our business
operations, including our contracting and execution process, to
remain a going concern.

Our U.S. operations are cash-flow negative and our ability to
repatriate funds from our non-U.S. subsidiaries is restricted by a
number of factors. Accordingly, we are limited in our ability to
use these funds for working capital purposes, to repay debt or to
satisfy other obligations, which could limit our ability to
continue as a going concern.

Our U.S. operations are cash-flow negative and are expected to
continue to generate negative cash flow due to a number of
factors. These factors include costs related to the litigation and
settlement of asbestos related claims, interest on our
indebtedness, obligations to fund U.S. pension obligations and
other expenses related to corporate overhead. As of March 28,
2003, Foster Wheeler Ltd. and Foster Wheeler LLC had aggregate
indebtedness of $1,107 million, all of which must be funded from
distributions from subsidiaries of Foster Wheeler LLC. As of March
28, 2003, we had cash, cash equivalents and short-term investments
of approximately $473 million, of which approximately $327 million
was held by our non-U.S. subsidiaries. We require cash
distributions from our non-U.S. subsidiaries to meet an
anticipated $75 million to $100 million of our U.S. operations'
minimum working capital needs in 2003. There are significant legal
and contractual restrictions on our ability to repatriate funds
from our non-U.S. subsidiaries. These subsidiaries need to keep
certain amounts available for working capital purposes, to pay
known liabilities and for other general corporate purposes. In
addition, certain of our non-U.S. subsidiaries are parties to loan
and other agreements with covenants, and are subject to statutory
minimum capitalization provisions in their jurisdictions of
organization that restrict the amount of funds that the subsidiary
may distribute. Distributions in excess of these specified amounts
would cause us to violate the terms of the agreements or
applicable law which could result in civil or criminal penalties.
The repatriation of funds may also subject those funds to
taxation. As a result of these factors, we may not be able to
utilize funds held by our non-U.S. subsidiaries or future earnings
of those subsidiaries to fund our working capital requirements, to
repay debt or to satisfy other obligations of our U.S. operations,
which could limit our ability to continue as a going concern.

Our international operations involve risks that may limit or
disrupt operations, limit repatriation of earnings, increase
foreign taxation or otherwise have a material adverse effect on
our business and results of operations.

We have substantial international operations that are conducted
through foreign and domestic subsidiaries, as well as through
agreements with foreign joint venture partners. Our international
operations accounted for approximately 62% of our fiscal year 2002
operating revenues and substantially all of our operating cash
flow. We have international operations throughout the world,
including operations in Europe, the Middle East, Asia and South
America. Our foreign operations are subject to risks that could
materially adversely affect our business and results of
operations, including: uncertain political, legal and economic
environments; potential incompatibility with foreign joint venture
partners; foreign currency controls and fluctuations; energy
prices; terrorist attacks against facilities owned or operated by
U.S. companies; war and civil disturbances; and labor problems.

Events outside of our control may limit or disrupt operations,
restrict the movement of funds, result in the loss of contract
rights, increase foreign taxation or limit repatriation of
earnings. In addition, in some cases, applicable law and joint
venture or other agreements may provide that each joint venture
partner is jointly and severally liable for all liabilities of the
venture. These events and liabilities could have a material
adverse effect on our business and results of operations.

Our high levels of debt and significant interest payment
obligations could limit the funds we have available for working
capital, capital expenditures, dividend payments, acquisitions and
other business purposes which could adversely impact our business.

We have debt in the form of secured bank loans, other debt
securities that have been sold to investors and debt obligations
from the Robbins facility exit funding agreement. As of March 28,
2003, Foster Wheeler Ltd.'s total consolidated debt amounted to
approximately $1,107 million, $203 million of which was comprised
of limited recourse project debt of special purpose subsidiaries.
This debt includes $130 million of debt under the senior secured
credit agreement, $200 million of debt under the senior notes,
$210 million of convertible subordinated notes, $175 million of
trust securities and $109 million of Robbins obligations. In
addition, our senior secured credit agreement requires us either
to repay $100 million of indebtedness thereunder by March 31, 2004
or in the alternative pay a fee of up to approximately $14 million
and increase our annual interest rate on our borrowings thereunder
by an additional .50% per quarter until we have repaid $100
million of indebtedness thereunder.

Over the last five years, we have been required to allocate a
significant portion of our earnings to pay interest on our debt.
After paying interest on our debt, we have fewer funds available
for working capital, capital expenditures, acquisitions and other
business purposes. This could limit our ability to respond to
changing market conditions, limit our ability to expand through
acquisitions, increase our vulnerability to adverse economic and
industry conditions and place us at a competitive disadvantage
compared to our competitors that have less indebtedness. In
addition, certain of our borrowings are at variable rates of
interest that expose us to the risk of a rise in interest rates.

Our various debt agreements and the preferred shares to be offered
in the expected exchange offer for the convertible subordinated
notes and the Robbins bonds impose significant operating and
financial restrictions, which may prevent us from capitalizing on
business opportunities and taking some corporate actions which
could materially adversely affect our business.

Our various debt agreements impose, and the preferred shares to be
issued in the expected exchange offer for the convertible
subordinated notes and the Robbins bonds will impose, significant
operating and financial restrictions on us. These restrictions
limit our ability to incur indebtedness, pay dividends or make
other distributions, make investments and sell assets. Failure to
comply with these covenants may allow lenders to elect to
accelerate the repayment dates. It is unlikely that we would be
able to repay amounts borrowed or cash collateralize standby
letters of credit issued under our senior secured credit agreement
if the banks were to elect their right to accelerate the payment
dates. Our failure to repay such amounts under our senior secured
credit agreement would have a material adverse effect on our
financial condition and operations and result in defaults under
the terms of the following indebtedness: our senior notes, our
convertible subordinated notes, the trust securities, the Robbins
obligations, the sale/leaseback agreement, and certain of the
special-purpose project debt that would allow such debt to be
accelerated. We would not be able to repay such indebtedness, if
accelerated and as a consequence may be unable to continue
operating as a going concern.

We face severe restrictions on our ability to obtain new letters
of credit, bank guarantees and performance bonds from our banks
and surety on the same terms as we have historically. If we are
unable to obtain letters of credit, bank guarantees or performance
bonds on reasonable terms, our business will be materially
adversely affected.

It is customary in the industries in which we operate to provide
letters of credit, bank guarantees or performance bonds in favor
of clients to secure obligations under contracts. We have
traditionally obtained letters of credit or bank guarantees from
our banks, or performance bonds from a surety on an unsecured
basis. Due to our financial condition and current credit ratings,
as well as changes in the bank and surety markets, we are now
required in certain circumstances to provide security to banks and
the surety to obtain new letters of credit, bank guarantees and
performance bonds. If we are unable to provide sufficient
collateral to secure the letters of credit, bank guarantees and
performance bonds, our ability to enter into new contracts could
be materially limited.

Providing security to obtain letters of credit, bank guarantees
and performance bonds increases our working capital needs and
limits our ability to repatriate funds or pay dividends. There can
be no assurance that we will be able to continue obtaining new
letters of credit, bank guarantees, and performance bonds on
either a secured or an unsecured basis in sufficient quantities to
match our business requirements. If our financial condition
further deteriorates, we may also be required to provide cash
collateral or other security to maintain existing letters of
credit, bank guarantees and performance bonds. If this occurs, our
ability to perform under our existing contracts may be adversely
affected.

Our current and future lump-sum, or fixed price, contracts may
result in significant losses if costs are greater than we
anticipate.

Many of our contracts are lump-sum contracts that are inherently
risky because we agree to the costs of the project at the time we
enter the contracts based on our estimates and we assume
substantially all of the risks associated with completing the
project as well as the post-completion warranty obligations. In
2002 and 2001, we took charges of approximately $216 million and
$160 million, respectively, relating to underestimated costs and
post-completion warranty obligations on lump-sum contracts. We
also assume the project's technical risk, meaning that we must
tailor our products and systems to satisfy the technical
requirements of a project even though, at the time the project is
awarded, we may not have previously produced such a product or
system. The revenue, cost and gross profit realized on such
contracts can vary, sometimes substantially, from the original
projections due to changes in a variety of factors, including but
not limited to: unanticipated technical problems with the
equipment being supplied or developed by us, which may require
that we spend our own money to remedy the problem; changes in the
costs of components, materials or labor; difficulties in obtaining
required governmental permits or approvals; changes in local laws
and regulations; changes in local labor conditions; project
modifications creating unanticipated costs; delays caused by local
weather conditions; and our suppliers' or subcontractors' failure
to perform.

These risks are exacerbated if the duration of the project is
long-term because there is an increased risk that the
circumstances upon which we based our original bid will change in
a manner that increases its costs. In addition, we sometimes bear
the risk of delays caused by unexpected conditions or events. Our
long-term, fixed price projects often make us subject to penalties
if portions of the project are not completed in accordance with
agreed-upon time limits. Therefore, significant losses can result
from performing large, long-term projects on a lump-sum basis.
These losses may be material and could negatively impact our
business, financial condition and results of operations.

We may be unable to successfully implement our performance
improvement plan which could negatively impact our results of
operations.

In order to mitigate future charges due to underestimated costs on
lump-sum contracts and to otherwise reduce operating costs, in
March 2002 we undertook and are continuing to implement a series
of management actions and performance interventions. While we
believe that our plan will reduce the occurrence of future charges
and our operating costs, we cannot assure you that this plan will
be successful, that we will not record significant charges in the
future or that our operating costs will not increase in the
future.

We have high working capital requirements and will be required to
refinance indebtedness within the next two years and may have
difficulty obtaining financing which would have a negative impact
on our financial condition.

Our business requires a significant amount of working capital and
our U.S. operations are, and are expected to continue to be, cash-
flow negative in the near future. In many cases, significant
amounts of our working capital are required to finance the
purchase of materials and performance of engineering, construction
and other work on projects before payment is received from
customers. We may need to incur additional indebtedness in the
future to satisfy our working capital needs. In addition, Foster
Wheeler LLC's senior notes and our senior secured credit agreement
mature in November 2005 and April 2005, respectively, and will
need to be repaid or refinanced. As a result, we are subject to
risks associated with debt financing, including increased interest
rate expense, insufficient cash flow to meet required payments on
our debt, inability to meet credit facility covenants and
inability to refinance or repay debt as it becomes due.

Our working capital requirements may increase when we are required
to give our customers more favorable payment terms under contracts
to compete successfully for certain projects. These terms may
include reduced advance payments, and payment schedules that are
less favorable to us. In addition, our working capital
requirements have increased in recent years because we have had to
advance funds to complete projects under lump-sum contracts and
have been involved in lengthy arbitration or litigation
proceedings to recover these amounts. All of these factors may
result, or have resulted, in increases in the amount of contracts
in process and receivables and short-term borrowings. Continued
increases in working capital requirements would materially harm
our financial condition and results of operations.

Projects included in our backlog may be delayed or cancelled which
could materially harm our cash flow position, revenues and
earnings.

The dollar amount of backlog does not necessarily indicate future
earnings related to the performance of that work. Backlog refers
to expected future revenues under signed contracts, contracts
awarded but not finalized and letters of intent which we have
determined are likely to be performed. Backlog projects represent
only business that is considered firm, although cancellations or
scope adjustments may occur. Due to factors outside our control,
such as changes in project scope and schedule, we cannot predict
with certainty when or if backlog will be performed. In addition,
even where a project proceeds as scheduled, it is possible that
contracted parties may default and fail to pay amounts owed. Any
delay, cancellation or payment default could materially harm our
cash flow position, revenues and earnings.

Backlog in the first quarter of 2003 declined 18% as compared to
the first quarter of 2002. Although we believe this decline is
primarily attributable to our completion of several large projects
in our North American unit that were booked in 2001 and executed
in 2002, our backlog in our European operations also declined
during that period. We cannot assure you that backlog will not
continue to decline.

The cost of our current and future asbestos claims could be
substantially higher than we have estimated which could materially
adversely affect our financial condition.

The total liability recorded on our balance sheet is based on
estimated indemnity payments and defense costs expected to be
incurred through 2018. We believe that it is likely that there
will be new claims filed after 2018, but in light of uncertainties
inherent in long-term forecasts, we do not believe that we can
reasonably estimate the indemnity payments and defense costs which
might be incurred after 2018. Our forecast contemplates that new
claims will decline from year to year. Failure of future claims to
decline as we expect will result in our aggregate liability for
asbestos claims being higher than estimated.

Our forecast is based on a curvilinear regression model, which
employs the statistical analysis of our historical claims data to
generate a trend line for future claims. Although, we believe this
forecast method is reasonable, other forecast methods that attempt
to estimate the population of living persons who could claim they
were exposed to asbestos at worksites where our subsidiaries
performed work or sold equipment, could also be used and might
project higher numbers of future claims than our forecast.

All of these factors could cause our actual claims, indemnity
payments and defense costs to exceed our estimates. We plan to
update our forecasts periodically to take into consideration
future claims experience and other developments, such as
legislation, that may affect our estimates of future asbestos-
related costs. The announcement of increases to our asbestos
reserves as a result of revised forecasts, adverse jury verdicts
or other negative developments involving our asbestos litigation
may cause the value or trading prices of our securities to
decrease significantly. These negative developments could cause us
to default under covenants in our indebtedness relating to
judgments against us and material adverse changes, cause our
credit ratings to be downgraded, restrict our access to the
capital markets and otherwise have a material adverse effect on
our financial condition, results of operations, cash flows and
liquidity.

The amount and timing of insurance recoveries of our asbestos-
related costs is uncertain. Failure to obtain insurance recoveries
would cause a material adverse affect on our financial condition.

We believe that substantially all of our liability and defense
costs for asbestos claims will be covered by insurance. Our
balance sheet as of March 28, 2003, includes as an asset an
aggregate of approximately $561 million in probable insurance
recoveries relating to (1)liability for pending and expected
future asbestos claims through 2018 and a liability related to
probable losses on asbestos-related claims of approximately $540
million and (2)amounts funded by us for which we are waiting for
reimbursement. Under an interim funding agreement in place with a
number of our insurers from 1993 through June 12, 2001, these
insurers paid a substantial portion of our costs incurred in
connection with resolving asbestos claims. Effective June 13,
2001, the interim funding agreement was terminated by certain of
the insurers. On February 13, 2001, litigation was commenced
against us by these insurers seeking to recover from other
insurers and us amounts previously paid by them under the interim
funding agreement and to adjudicate their rights and
responsibilities under our insurance policies.

With the exception of one of our insurers, with which we recently
entered into a settlement agreement, the insurers who were parties
to the interim funding agreement are not making their portions of
payments for asbestos claims received on or after June 13, 2001.
Notwithstanding the termination of the interim funding agreement,
the insurers that were party to that agreement continue making
their portions of payments for asbestos claims brought prior to
June 13, 2001, and we have entered into several commutation, or
buyout agreements, under which other insurers have paid us lump
sums. As a result of the termination of the interim funding
agreement, we have had to fund a substantial portion of our
settlement payments and defense costs out of pocket without
reimbursement and will continue to do so until our claims against
those insurers are settled or the insurance litigation is
resolved. This will reduce our cash flow and our working capital
and will adversely affect our liquidity.

Although we continue to believe that our insurers eventually will
reimburse us for substantially all of our asbestos-related costs,
our ability ultimately to recover a substantial portion our future
asbestos-related costs from insurance is uncertain and dependent
on our successful resolution of outstanding coverage issues
related to our insurance policies. These issues include:

- disputes regarding allocations of liabilities among us and the
   insurers;

- the effect of deductibles and policy limits on available
   insurance coverage; and

- the characterization of asbestos claims brought against us as
   product-related or non-product-related.

An adverse outcome in the insurance litigation on these coverage
issues could materially limit our insurance recoveries.

In addition, even if these coverage issues are resolved in a
manner favorable to us, we may not be able to collect all of the
amounts due under our insurance policies. Our recoveries will be
limited by insolvencies among our insurers. We are aware of at
least one of our significant insurers which is currently
insolvent, and other insurers may become insolvent in the future.
Our insurers may also fail to reimburse amounts owed to us on a
timely basis. If we do not receive timely payment from our
insurers, we may be unable to make required payments under
settlement agreements with asbestos plaintiffs or to fund amounts
required to be posted with the court in order to appeal trial
judgments. If we are unable to file such appeals, we may be
ordered to pay large damage awards arising from adverse jury
verdicts, and such awards may exceed our available cash. Any
failure to realize our expected insurance recoveries, and any
delays in receiving from our insurers amounts owed to us, will
reduce our cash flow and adversely affect our liquidity and could
have a material adverse effect on our financial condition.

Proposed federal legislation could require us to pay amounts in
excess of current estimates of our net asbestos liability which
would adversely affect our liquidity and financial condition.

The United States Senate is currently considering a proposed bill
that would purport to settle substantially all pending and future
asbestos litigation in the United States. The bill would require
claimants to seek compensation for asbestos-related injuries from
a $108 billion to $153 billion master settlement trust to be
funded approximately 50% by asbestos defendants and approximately
50% by insurance carriers. The bill would allocate each
defendant's share of required contributions to the trust fund
based on the amounts historically paid by each company for
asbestos-related claims in the tort system and on the gross
revenues of each company, with larger companies with the highest
historical asbestos payments being allocated the largest
contributions. As proposed, we believe this allocation schedule
would require us to contribute $25 million per year to the trust
fund. Under the terms of the bill, required contributions from
defendants to the trust fund would not be covered by insurance.
Consequently, our required contributions under the bill would be
unfavorable to us as compared to the expected cost, net of
insurance, of our asbestos litigation. The bill would permit
exemptions from adjustments of required contributions for cases of
severe financial hardship or demonstrated inequity, but we may not
receive any such exemption adjustment. If this bill or similar
legislation is enacted into law as currently proposed and we are
unable to obtain relief from our required contributions to the
trust fund, our cash flow and financial condition would be
adversely affected. In such case, we would have to consider our
restructuring and other alternatives. The bill is currently
pending and we cannot predict whether it will ultimately become
law.

Claims made by us against project owners for payment have
increased over the last few years and failure by us to recover
adequately on future claims could have a material adverse effect
upon our financial condition, results of operations and cash
flows.

Project claims increased as a result of the increase in lump-sum
contracts between the years 1992 and 2000. Project claims are
claims brought by us against project owners for additional costs
exceeding the contract price or amounts not included in the
original contract price. These claims typically arise from changes
in the initial scope of work or from owner-caused delays. These
claims are often subject to lengthy arbitration or litigation
proceedings. The costs associated with these changes or owner-
caused delays include additional direct costs, such as labor and
material costs associated with the performance of the additional
work, as well as indirect costs that may arise due to delays in
the completion of the project, such as increased labor costs
resulting from changes in labor markets. We have used significant
additional working capital in projects with cost overruns pending
the resolution of the relevant project claims. We cannot assure
you that project claims will not continue in the future.

We recently reduced our estimates of claim recoveries to reflect
recent adverse experience due to our desire to monetize claims,
and poor economic conditions. As of March 28, 2003, we had $7
million of claim recoveries. In 2002 and 2001, we recorded
approximately $136 million and $37 million, respectively, in pre-
tax contract-related charges as a result of claims reassessment.
We continue to pursue these claims, but there can be no assurance
that we will recover the full amount of the claims, or anything at
all.

We also face a number of counterclaims brought against us by
certain project owners in connection with several of the project
claims described above. If we are found liable for any of these
counterclaims, we would have to incur write-downs and charges
against our earnings to the extent a reserve is not established.
Failure to recover amounts under these claims and charges related
to counterclaims could have a material adverse impact on our
liquidity and financial condition.

Because our operations are concentrated in four particular
industries, we may be adversely impacted by economic or other
developments in these industries.

We derive a significant amount of our revenues from services
provided to corporations that are concentrated in four industries:
power, oil and gas, pharmaceuticals and chemical/petrochemical.
Unfavorable economic or other developments in one or more of these
industries could adversely affect our customers and could have a
material adverse effect on our  financial condition and results of
operations.

Our failure to successfully manage our geographically diverse
operations could impair our ability to react quickly to changing
business and market conditions and comply with industry standards
and procedures.

We operate in more than 30 countries around the world, with
approximately 6,300, or 70%, of our employees located outside of
the United States. In order to manage our day-to-day operations,
we must overcome cultural and language barriers and assimilate
different business practices. In addition, we are required to
create compensation programs, employment policies and other
administrative programs that comply with the laws of multiple
countries. Our failure to successfully manage our geographically
diverse operations could impair our ability to react quickly to
changing business and market conditions and comply with industry
standards and procedures.

We may lose business to our competitors who have greater financial
resources.

We are engaged in highly competitive businesses in which customer
contracts are often awarded through bidding processes based on
price and the acceptance of certain risks. We compete with other
general and specialty contractors, both foreign and domestic U.S.,
including large international contractors and small local
contractors. Some competitors have greater financial and other
resources than we have and may have significantly more favorable
leverage ratios. Because financial strength is a factor in
deciding whether to grant a contract in our business, our
competitors' more favorable leverage ratios give them a
competitive advantage and could prevent us from obtaining
contracts for which we bid.

A failure to attract and retain qualified personnel could have an
adverse effect on us.

Our ability to attract and retain qualified engineers and other
professional personnel will be an important factor in determining
our future success. The market for these professionals is
competitive, and there can be no assurance that we will be
successful in our efforts to attract and retain these
professionals. In addition, our success depends in part on
our ability to attract and retain skilled laborers. Our failure to
attract or retain these workers could have a material adverse
effect on our business and results of operations.

We are subject to various environmental laws and regulations in
the countries in which we operate. If we fail to comply with these
laws and regulations, we may have to incur significant costs and
penalties that could adversely affect our liquidity or financial
condition.

Our operations are subject to U.S., European and other laws and
regulations governing the generation, management, and use of
regulated materials, the discharge of materials into the
environment, the remediation of environmental contamination, or
otherwise relating to environmental protection. These laws include
U.S. Federal statutes, such as the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, or CERCLA, the Clean
Water Act, the Clean Air Act and similar state and local laws, and
European laws and regulations including those promulgated under
the Integrated Pollution Prevention and Control Directive issued
by the European Union in 1996 and the 1991 directive dealing with
waste and hazardous waste and laws and regulations similar to
those in other countries in which we operate. Both our E&C Group
and Energy Group make use of and produce as wastes or byproducts
substances that are considered to be hazardous under the laws and
regulations referred to above. We may be subject to liabilities
for environmental contamination as an owner or operator of a
facility or as a generator of hazardous substances without regard
to negligence or fault, and we are subject to additional
liabilities if we do not comply with applicable laws regulating
such hazardous substances, and, in either case, such liabilities
can be substantial.

We may be subject to significant costs, fines and penalties and/or
compliance orders if we do not comply with environmental laws and
regulations including those referred to above. Some environmental
laws, including CERCLA, provide for joint and several strict
liability for remediation of releases of hazardous substances,
which could result in a liability for environmental damage without
regard to negligence or fault. These laws and regulations and
common laws principles could expose us to liability arising out of
the conduct of our current and past operations or conditions,
including those associated with formerly owned or operated
properties caused by us or others, or for acts by us or others
which were in compliance with all applicable laws at the time the
acts were performed. In some cases, we have assumed contractual
indemnification obligations for environmental liabilities
associated with some formerly owned properties. Additionally, we
may be subject to claims alleging personal injury, property damage
or natural resource damages as a result of alleged exposure to or
contamination by hazardous substances. The ongoing costs of
complying with existing environmental laws and regulations can be
substantial. Changes in the environmental laws and regulations,
remediation obligations, enforcement actions or claims for damages
to persons, property, natural resources or the environment, could
result in material costs and liabilities.

Recent Developments:

Commercial operations under a contract retained by Foster Wheeler
Environmental Corporation that were to commence in the fourth
quarter of 2003 have been delayed. This change in timing will
delay our receipt of a material amount of domestic cash until
early 2004 that we previously expected to receive in the fourth
quarter of 2003. We continue to have plans in place to deal with
our liquidity issues, which will become more challenging in the
fourth quarter as a result of many factors, including this delay.
Our assessment of our liquidity is based upon, among other
analyses, our cash flow forecasts, which include cash on hand,
together with cash from operations, cash repatriated from our
foreign operations, assets sales, collections of receivables and
claims recoveries, and our working capital needs. We are currently
exploring alternatives to increase our domestic cash flow in the
fourth quarter. If we are unable to do so, we may not have
sufficient cash to operate our domestic business and we may not be
able to continue to operate as a going concern."

Foster Wheeler Ltd. is a global company offering, through its
subsidiaries, a broad range of design, engineering, construction,
manufacturing, project development and management, research, plant
operation and environmental services.


GENSCI: Secures Accreditation by American Association of Tissue
---------------------------------------------------------------
GenSci Regeneration Sciences Inc. (Toronto: GNS), the
OrthoBiologics Technology Company(TM), announced that its
subsidiary, GenSci OrthoBiologics, Inc., has been inspected by and
granted accreditation by the prestigious American Association of
Tissue Banks.

"GenSci has always partnered exclusively with AATB accredited
tissue banks while upholding the strict quality and safety
standards of this highly respected organization. We are proud to
be recognized as such. Our own accreditation by the AATB, in
addition to last year's ISO certification, allows GenSci to
continue to build important relationships within our industry and
validates our Company's tissue handling systems and controls,"
Douglass Watson, President and CEO of GenSci said.

The AATB, headquartered in McLean, Virginia, is a scientific, not-
for-profit, peer group organization founded in 1976 to facilitate
the provision of transplantable cells and tissues of uniform high
quality in quantities sufficient to meet national needs. The AATB
is dedicated to establishing and promoting the highest standards
of care for patients and donors in all aspects of tissue banking,
including tissue transplantation, both in the U.S. and
internationally. They have established and continue to promulgate
standards that provide tissue banks with performance requirements
intended to prevent disease transmission and assure optimum
clinical performance of transplanted cells and tissue.

The AATB's standards reflect the collective expertise and
conscientious efforts of tissue banking professionals to provide a
comprehensive foundation for the guidance of tissue banking
activities. These standards establish performance requirements for
donor selection as well as for processing, storage, packaging,
labeling, and distribution of transplantable human
musculoskeletal, skin reproductive, and cardiovascular cells
and/or tissue.

GenSci Regeneration Sciences Inc. has established itself as a
leader in the rapidly growing orthobiologics market, providing
surgeons with biologically based products for bone repair and
regeneration. Its products can either replace or augment
traditional autograft surgical procedures. This permits less
invasive procedures, reduces hospital stays, and improves patient
recovery. Through its subsidiaries, the Company designs,
manufactures, and markets biotechnology-based surgical products
for orthopedics, neurosurgery, and oral maxillofacial surgery.

On June 3, 2003, IsoTis SA (SWX and EURONEXT: ISON) and GenSci
announced their intention to merge to create a leading
orthobiologics player with a global presence. The merger will
create a dedicated and global orthobiologics player with a broad
presence in both "natural" demineralized bone matrix (DBM)
products and "synthetic" bone substitutes. As DBM products are
more common in North America and synthetic bone substitutes are
more common in Europe, the IsoTis/GenSci product portfolio is well
positioned to capitalize on significant commercial opportunities
in both of these major markets. With product sales exceeding US
$22 million and positive cash flow from operations in 2002, GenSci
is recognized as a significant participant in the North American
bone graft market. Its OrthoBlast(R) II, DynaGraft(R) II, and
Accell(R) DBM100 product lines are well recognized and accepted in
the orthopedic community. IsoTis has a solid cash position of euro
75 million (US$ 82 million) at March 31, 2003, a recent FDA
approval for its synthetic bone substitute OsSatura(TM), an
innovative product pipeline, and proven ability to execute a
complex cross border merger on a timely and efficient basis.

Gensci Regeneration filed for Chapter 11 protection on
December 20, 2001 in the U.S. Bankruptcy Court for the Central
District of California (Sta. Ana).


GPN NETWORK: Brings-In Stonefield Josephson as New Accountants
--------------------------------------------------------------
As of July 15, 2003, GPN Network, Inc., selected Stonefield
Josephson, Inc., Certified Public Accountants, an accountancy
corporation, to be its auditor. The Company's previous auditor was
notified on July 9, 2003 that the change would be effective as of
July 15, 2003.  According to GPN there has been no disagreement in
accounting principles or in the report of financial statements and
notes published by the Company's previous auditor.

The audit report of Singer Lewak Greenbaum & Goldstein  LLP on the
financial statements of the Company for the year ended  December
31, 2002 contained the following qualification:

"The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern.  As  discussed
in  Note 2 to the financial statements, during the year ended
December 31, 2002, the Company incurred a net loss of $222,384,
and it had negative cash flows from operations of $153,402.  In
addition, the Company had an accumulated deficit of $4,165,224 as
of December 31, 2002. These factors, among others, as discussed in
Note 2 to the financial statements, raise substantial doubt about
the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described
in Note 2.  The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty."

The decision to change accountants was approved by the Board of
Directors of GPN Network.


GRUPO IUSACELL: Fintech Disappointed with Shareholders' Decision
----------------------------------------------------------------
Grupo Iusacell, S.A. de C.V. (BMV:CEL) (NYSE:CEL) announced that
on July 22, 2003, its principal shareholders, Verizon
Communications Inc. and Vodafone Americas B.V., received a letter
from Fintech Advisory, Inc., in which Fintech again expressed
disappointment with the Principal Shareholders' decision not to
engage in discussions with Fintech and invited the Principal
Shareholders to meet with Fintech. The Third Fintech Shareholders
Letter also stated that Fintech expected to commence offers in
Mexico and the United States to acquire 100% of the outstanding
shares of capital stock of the Company and was prepared to
materially increase its offer price if the Principal Shareholders
participated in such tender offer.

Fintech also stated in the Third Fintech Shareholders Letter that
if the tender offer by Movil Access, S.A. de C.V., a wholly-owned
subsidiary of Biper, S.A. de C.V., for all of the outstanding
shares of capital stock of the Company, which was commenced on
June 30, 2003, is consummated, "we and other creditors will have
no choice but to accelerate the Company's debt to protect our
interests."

The Company will make further public announcements in connection
with the tender offers at the appropriate time and as required by
Mexican and United States securities laws.

The Company filed with the SEC a solicitation/recommendation
statement on Schedule 14D-9 on July 14, 2003, an Amendment No.1 to
the Schedule 14D-9 on July 16, 2003, an Amendment No.2 to the
Schedule 14D-9 on July 21, 2003 and an Amendment No.3 to the
Schedule 14D-9 on July 21, 2003. The Company's shareholders should
read the Schedule 14D-9, the Amendment No. 1, the Amendment No. 2,
the Amendment No. 3 and the Amendment No. 4 to the Schedule 14D-9,
which will be filed later today with the SEC, as they contain
important information. The Schedule 14D-9, the Amendment No. 1,
the Amendment No.2, the Amendment No. 3, the Amendment No. 4 and
other public filings made from time to time by the Company with
the SEC are available without charge from the SEC's Web site at
http://www.sec.gov

Grupo Iusacell, S.A. de C.V. (Iusacell, NYSE: CEL; BMV: CEL) is a
wireless cellular and PCS service provider in seven of Mexico's
nine regions, including Mexico City, Guadalajara, Monterrey,
Tijuana, Acapulco, Puebla, Leon and Merida. The Company's service
regions encompass a total of approximately 92 million POPs,
representing approximately 90% of the country's total population.


GS MORTGAGE: S&P Hatchets Ratings on 3 Series 1999-C1 Notes
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on three
classes of GS Mortgage Securities Corp. II's commercial mortgage
pass-through certificates series 1999-C1. At the same time,
ratings are affirmed on the remaining seven classes.

In December 2002, Standard & Poor's lowered its ratings on classes
G and H due to the fact that five of the 10 delinquent loans in
the pool at that time were in REO or foreclosure, and indications
of value for the three lodging properties that were in REO at that
time suggested that losses would be realized upon liquidation of
those loans. Since that time, two of those REO lodging loans have
been liquidated, resulting in a combined realized loss of $2.3
million. As a result, a total of $5.4 million in losses have been
realized by the trust to date.

Currently, there are four loans in REO or foreclosure, and recent
indications of value suggest that losses will be realized upon
liquidation of three of these loans. The delinquency rate for this
transaction has historically been high and remains so at 6.2% of
the mortgage pool balance as of July 2003. While reduced from
December 2002 levels, the amount of loans in special servicing
remains high at 7.8% of the mortgage pool balance. In addition,
the servicer's watchlist has increased to 30% of the mortgage pool
balance, up from 19.5% in December 2002. As a result, the lowered
ratings reflect both the losses realized since December 2002 and
the potential for additional losses associated with several loans
in special servicing and on the servicer's watchlist.

Of the 13 delinquent loans in this mortgage pool, two loans are
30-days delinquent, one is 60-days delinquent, six are more than
90-days delinquent, three are in REO, and another is in
foreclosure. A total of $3.0 million in appraisal reductions have
been taken to date. One of the larger 90-day delinquent loans,
known as the Atrium Hotel loan, has an outstanding loan balance of
$10.7 million and is secured by a 214-room hotel in Irvine,
California. A forbearance agreement is in place. An appraisal as
of January 2003 indicated an "as is" value of $12.4 million. The
loan to the Park Inn Club and Breakfast (a 130-room hotel in
Bradenton, Florida) has an outstanding loan balance of $5.0
million, and is more than 60-days delinquent. The flag has been
changed from a Park Inn to a Comfort Inn, and negotiations for
forbearance are in process.

Many of the top 10 loans (which comprise 16.6% of the outstanding
loan pool) continue to exhibit deteriorating operating
performance. They include the following:

      -- The second largest loan in the pool, which is secured by
         the Granada Apartments, a 746-unit multifamily rental
         apartment complex in Erie, Pennsylvania. The debt service
         coverage ratio (DSCR) on a net cash flow (NCF) basis for
         this loan has declined to 1.04x for the full year ended
         Dec. 31, 2002 from 1.30x at issuance due primarily to an
         increase in operating expenses. However, the loan remains
         current;

      -- The third largest loan in the pool, known as the Whitehall
         Hotel loan, which is secured by a 221-room hotel in
         downtown Chicago, Illinois. Year-end 2002 data is not
         available for this loan. However, the special servicer,
         Lennar Partners Inc., has indicated that the DSCR, on a
         net operating income (NOI) basis, for this loan declined
         to 1.0x for the 12 months ending June 30, 2002 from 1.1x
         for the full year ended Dec. 31, 2001 and from 1.7x for
         the full year ended Dec. 31, 2000. Additionally, the
         hotel's occupancy dropped to 66.5% for the month of
         June 2002 from 68.9% for the month of June 2001. The loan
         was recently brought current, and was returned to the
         master servicer on June 5, 2003. Nonetheless, Standard &
         Poor's expects this property will continue to struggle due
         to the downturn in the lodging industry; and

      -- The fourth largest loan in the pool, known as the Roswell
         Town Center loan, is secured by a 500,000-square-foot (sq.
         ft.) retail center in Roswell, Ga., and is more than 90-
         days delinquent. The DSCR on a NCF basis for this loan has
         declined to 0.79x for the full year ended Dec. 31, 2002
         from 1.27x at issuance. Lennar is currently negotiating an
         agreement, which calls for the borrower to put in new
         capital and use existing reserves to re-lease the
         property. The borrower has been working on a lease for
         65,000 sq. ft. of the vacated 90,000 sq. ft. Kmart space.
         A letter of intent is out for signature for the remaining
         25,000 sq. ft.

As of July 2003, the loan pool consisted of 290 fixed-rate
mortgage loans with an outstanding pool balance of $808.1 million.
Multifamily (32% of the pool) and retail (25%) predominate in
terms of property type composition. The pool is geographically
diverse, as it is spread throughout 37 states with some
concentrations in Texas (12%) and California (10%).

The servicer, GMAC Commercial Mortgage Corp., has provided 2002
year-end NCF data for 77% of the loan pool. Standard & Poor's
calculates that the weighted average DSCR for these loans has
increased to 1.51x, based on 2002 year-end data, up from 1.44x at
issuance.

Based on discussions with GMACCM and Lennar, Standard & Poor's
stressed the various loans mentioned herein as part of its
analysis. The potential losses and resultant credit levels
adequately support the rating actions.

                         RATINGS LOWERED

                   GS Mortgage Securities Corp. II
             Commercial mortgage pass-through certs 1999-C1

                     Rating
         Class     To        From    Credit Support (%)
         F         B+        BB                   7.31
         G         CCC+      B                    3.73
         H         CCC-      CCC+                 2.90

                         RATINGS AFFIRMED

                 GS Mortgage Securities Corp. II
            Commercial mortgage pass-through certs 1999-C1

         Class     Rating    Credit Support (%)
         A-1       AAA                   32.66
         A-2       AAA                   32.66
         B         AA+                   27.42
         C         A+                    21.91
         D         BBB                   14.75
         E         BBB-                  13.10
         X         AAA                     N/A


HANOVER COMPRESSOR: Will Host Q2 2003 Conference Call on July 30
----------------------------------------------------------------
Hanover Compressor Company (NYSE:HC), the leading provider of
outsourced natural gas compression services, will host a
conference call at 11:00 a.m. Eastern time, Wednesday, July 30,
2003 to discuss financial results for the second quarter ended
June 30, 2003 and other matters.

To access the call, participants should dial 800-245-1683 at least
ten minutes before the scheduled start time. For those unable to
participate, a replay will be available from 2:30 p.m. Eastern
time on Wednesday, July 30th until midnight on Wednesday, Aug.
6th. To listen to the replay, please dial 888-203-1112 in the
United States and Canada, or 719-457-0820 internationally, access
code 159784. Additionally, the conference call will be broadcast
live over the Internet. To access the webcast, log onto the
company's Web site -- http://www.hanover-co.com-- and click on
the webcast link located on the company's home page.

Hanover Compressor Company -- http://www.hanover-co.com-- is the
global market leader in full service natural gas compression and a
leading provider of service, financing, fabrication and equipment
for contract natural gas handling applications. Hanover sells and
provides this equipment on a rental, contract compression,
maintenance and acquisition leaseback basis to natural gas
production, processing and transportation companies that are
increasingly seeking outsourcing solutions. Founded in 1990 and a
public company since 1997, Hanover's customers include premier
independent and major producers and distributors throughout the
Western Hemisphere.

As previously reported in Troubled Company Reporter, Standard &
Poor's placed its ratings on Hanover Compressor Co., ('BB'
corporate credit rating) on CreditWatch with negative
implications.


HAWK CORP: Promotes Joseph Levanduski to VP-Chief Fin'l Officer
---------------------------------------------------------------
Hawk Corporation (NYSE: HWK) announced the promotion of Joseph J.
Levanduski to Vice President-Chief Financial Officer.  Levanduski
joined Hawk in 1995 as a divisional controller in what is now its
Wellman Products Division and received a series of divisional and
corporate promotions leading to his appointment as CFO.  His
responsibilities include Hawk's accounting, IT and finance
functions.

Hawk Corporation -- whose Corporate Credit Rating has been upgrade
by Standard & Poor's to 'single-B' -- is a leading worldwide
supplier of highly engineered products. Its friction products
group is a leading supplier of friction materials for brakes,
clutches and transmissions used in airplanes, trucks, construction
equipment, farm equipment and recreational vehicles.  Through its
precision components group, the Company is a leading supplier of
powder metal and metal injected molded components for industrial
applications, including pump, motor and transmission elements,
gears, pistons and anti-lock sensor rings.  The Company's
performance automotive group manufactures clutches and gearboxes
for motorsport applications and performance automotive markets.
The Company's motor group designs and manufactures die-cast
aluminum rotors for fractional and subfractional electric motors
used in appliances, business equipment and HVAC systems.
Headquartered in Cleveland, Ohio, Hawk has approximately 1,700
employees and 16 manufacturing sites in five countries.

Hawk Corporation is online at: http://www.hawkcorp.com


HAYES LEMMERZ: McKechnie Demands Prompt Payment of $1.7 Million
---------------------------------------------------------------
On May 30, 2003, McKechnie Vehicle Components USA Inc. sent the
Hayes Lemmerz Debtors a detailed calculation of the cure amount
due in connection with the Debtors' assumption of their Wheel
Cover Supply Agreement.  This calculation shows that the Debtors
owe McKechnie Vehicle $1,704,138 as of May 16, 2003.

However, in the Exclusive Schedule of Proposed Cure Amounts with
Respect to Executory Contracts and Unexpired Leases, the Debtors'
proposed cure amount with respect their agreement with McKechnie
Vehicle was listed as $0.

Michael P. Morton, Esq., argues that it is wrong for the Debtors
to suggest that they owe nothing to McKechnie Vehicle when the
cure amount calculation was submitted way ahead of the Debtors'
deadline to tender a proposed cure payment schedule.

McKechnie Vehicle, therefore, asks the Court to direct the
Debtors to pay the $1,704,138 cure amount.

Mr. Morton notes that all issues regarding disputes arising under
the Wheel Cover Supply agreement are to be settled by arbitration
and McKechnie Vehicle's request should not be deemed a waiver of
the arbitration provision. (Hayes Lemmerz Bankruptcy News, Issue
No. 36; Bankruptcy Creditors' Service, Inc., 609/392-0900)


HEALTH-PAK INC: Board Resolves to File Reorg. Plan in New York
--------------------------------------------------------------
Life Energy & Technology Holdings, Inc. (OTCBB: LETH) (Deutsche
Borse DE: LFT) will spinout Health-Pak, Inc., a wholly owned
subsidiary of Life Energy.

Life Energy & Technology Holdings Inc., formerly Health-Pak Inc.,
was incorporated in the State of Delaware on Dec. 28, 1987. In
November 2000, Life Energy & Technology Holdings, Inc. was
acquired by Health-Pak for stock and Health-Pak became a wholly
owned subsidiary of Life Energy.

Health-Pak, Inc. originally operated as a manufacturer of medical
disposable products through a wholly owned subsidiary, Health-Pak
Inc., a New York Corporation.

Management of Health-Pak, Anthony Liberatore and Michael
Liberatore was retained as part of the new management team of
LETH.

During fiscal 1999, Health-Pak New York filed for protection under
the United States Bankruptcy Laws. This proceeding is still
pending.

As of July 17, 2003, Anthony and Michael Liberatore have resigned
as Officers of Life Energy & Technology Holdings, Inc. "in order
to avoid any conflicts that may arise."

During a Special Meeting of the Board of Directors of Life Energy
on July 22, 2003, it was resolved by majority to present a plan of
reorganization to the Bankruptcy court in New York. As part of the
reorganization, Health-Pak will be spun-out into its own public
entity and current shareholders of Life Energy & Technology
Holdings, Inc. will receive property dividends in the form of
stock in the new company. Final details of the transaction will be
announced at a future date.

The Company plans to announce to current shareholders details of
the transaction in the very near future.

Life Energy -- http://www.le-th.com-- is rapidly becoming a
leader in the environmental infrastructure and electricity co-
generation markets. Life Energy's unique proprietary technology,
EcoTechnology(TM), supplies energy through a profitable and
environmentally safe process. The Biosphere Process(TM) System, a
central part of the EcoTechnology(TM) system, safely and
efficiently processes traditional and non-traditional waste
materials into electricity and other beneficial by-products. The
Biosphere Process(TM) assists in solving the global waste problem
by converting into clean, green electricity such waste materials
as: Municipal Solid Waste, agricultural, effluent, medical,
industrial, shale oil, sour natural gas and many other traditional
and non-traditional waste materials.


HEALTHTRAC INC: Needs Additional Funds to Continue Operations
-------------------------------------------------------------
Healthtrac Inc. is primarily engaged in providing health
management designed to improve the quality of care while reducing
overall healthcare costs and the operation of a call center. The
Company provides health management services to health plans, self-
insured employers and government agencies via programs designed to
postpone disease and disability through preventive practices and
chronic disease self-management. Healthtrac operates one call
center through its subsidiary, NorthNet Telecommunications, Inc.,
doing business as NorthStar TeleSolutions. It operates two
segments: Health Management and Call center.

The Company's ability to continue as a going concern and to
realize the carrying value of its assets is dependent on its
ability to obtain additional financing to fund future operations
and on its ability to translate its growth into profitable
operations. The outcome of these matters cannot be predicted with
any certainty at this time. Accordingly, its consolidated
financial statements contain note disclosures describing the
circumstances that led there to be doubt over the Company's
ability to continue as a going concern.

Those disclosures state that the Company has a working capital
deficiency of $1,706,241 at May 31, 2003 and the Company has
suffered recurring losses from operations. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern. The Company's consolidated financial statements
have been prepared without any adjustments that would be necessary
if Healthtrac became unable to continue as a going concern and
were therefore required to realize upon its assets and discharge
its liabilities in other than the normal course of operations.

As stated, as of May 31, 2003, the Company's net working capital
deficiency was $1,706,241, capital assets had a book value of
$157,635, intellectual property with a book value of $3,830,916
and obligations under long-term capital leases of $9,344 resulting
in a net equity of $2,272,966.

During the first quarter fiscal 2004, Healthtrac used $35,052 in
cash to fund operations compared to $175,638 in the first quarter
fiscal 2003. $1,814 was utilized to fund financing activities
which consisted primarily of payments for capital lease
obligations. No cash was obtained or used during the quarter from
investing activities for a net decrease in cash of $36,866. Cash
at May 31, 2003 was $150,007.

The Company has historically funded operations through the
issuance of common shares and expects the need to fund its working
capital deficit, future operations and investments will be through
the issuance of common shares and from operations. Subsequent to
May 31, 2003, there have not been any sales of common shares.
There can be no assurance that Healthtrac will be able to generate
proceeds from the sale of common shares during the balance of
fiscal 2004.

The Company estimates its cash requirements for capital asset
additions and for operations for fiscal 2004 to be approximately
$500,000. These funds are expected to be obtained through external
financing and cash flow from operations. There can be no assurance
that funds from external financings will be available when
required on an economical basis. The Company plans to continue to
search for appropriate acquisitions to compliment its existing
operations. Where possible, it will pay for acquisitions through
the issuance of its common shares.


HOST MARRIOTT: Second Quarter 2003 Net Loss Topping $14 Million
---------------------------------------------------------------
Host Marriott Corporation (NYSE: HMT), the nation's largest
lodging real estate investment trust, announced results of
operations for the second quarter of 2003. The second quarter
results reflect a difficult operating environment due to the
effects of the war in Iraq, the outbreak of severe acute
respiratory syndrome (SARS), and the generally weak economy, that
has resulted in reduced group and business travel. Second quarter
results include the following:

* Total revenue was $874 million and $1,679 million, respectively,
   for the second quarter and year-to-date 2003 as compared to $917
   million and $1,704 million, respectively, for the same periods
   of 2002.

* Net loss was $14 million and $48 million, respectively, for
   the second quarter and year-to-date 2003 as compared to net
   income of $24 million and $25 million, respectively, for the
   second quarter and year-to-date 2002.

* The Company's diluted loss per share was $.09 and $.25,
   respectively, for the second quarter and year-to-date 2003 as
   compared to diluted earnings per share of $.06 and $.03,
   respectively, for the same periods of 2002.

* Funds From Operations, or FFO per diluted share, was $.22 and
   $.37, respectively, for the second quarter and year-to-date
   2003 as compared to $.35 and $.58 per diluted share,
   respectively, for the second quarter and year-to-date 2002.

* Adjusted EBITDA, which is Earnings before Interest, Income
   Taxes, Depreciation, Amortization and other items, was $193
   million and $365 million, respectively, for the second quarter
   and year-to-date 2003 versus $233 million and $428 million,
   respectively, for the same periods of 2002.

                        Operating Results

Comparable RevPAR for the second quarter declined 8.2% as a result
of a 3.5% reduction in average room rate and an occupancy decline
of 3.6 percentage points compared to the same period in 2002.
Year-to-date comparable RevPAR declined 7.0% with a decline in
room rate of 3.0% and a decrease in occupancy of 3.0 percentage
points compared to the same period in 2002.

Christopher J. Nassetta, president and chief executive officer,
stated, "Despite the challenging operating environment, our
results were generally in line with our expectations. While
visibility is limited, we believe that the second half of the year
will be modestly weaker than we originally anticipated. We are,
however, cautiously optimistic that 2004 will be a solid year for
the lodging industry and for our portfolio."

                           Asset Sales

On July 18, 2003, the Company closed on the sale of the Norfolk
Waterside Marriott, the Palm Beach Gardens Marriott and the
Oklahoma City Waterford Marriott hotels for $71 million. The
Company expects the proceeds will be used primarily to retire
existing debt.

"We are pleased with the sale of these hotels and are continuing
to pursue additional asset sales in conjunction with the Company's
strategy of recycling capital by disposing of non-core assets,"
said James F. Risoleo, executive vice president, acquisitions and
development.

                          Balance Sheet

As of June 20, 2003, the Company had $312 million in cash on hand
and $250 million of availability under its credit facility. The
Company does not believe that it will need to borrow under the
credit facility in 2003.

During June 2003, the Company acquired the remaining outside
interests in the 772-room J.W. Marriott, Washington, D.C. for
approximately $3 million and began to consolidate the partnership
in the second quarter. The Company currently intends to refinance
the existing $95 million mortgage debt on the property, which
matures in December 2003, with floating rate debt.

W. Edward Walter, executive vice president and chief financial
officer, stated, "We continue to focus on liquidity and improving
our balance sheet in order to maximize our flexibility to be able
to address any uncertainties and to take advantage of
opportunities as they arise."

                          2003 Outlook

The Company's updated guidance for RevPAR for full year 2003 is
for a decline of approximately 3% to 5% and a third quarter RevPAR
decrease of approximately 2.5% to 4.0%. Based upon this guidance,
the Company estimates the following:

* Diluted loss per share should be approximately $.69 to $.60 for
   the full year and approximately $.29 to $.27 for the third
   quarter;

* Net loss should be approximately $148 million to $124 million
   for the full year and approximately $68 million to $63 million
   for the third quarter;

* FFO per diluted share should be approximately $.62 to $.70 for
   the full year and approximately $.00 to $.02 for the third
   quarter; the Company's previous full year forecast included $.04
   of FFO per diluted share for the income tax benefit related to
   the purchase of our leases, which has been excluded from this
   estimate.

* Adjusted EBITDA should be approximately $725 million to $750
   million for the full year. The Company's previous full year
   forecast of EBITDA included approximately $15 million of
   adjustments primarily related to non-cash stock compensation
   expense, fair market value adjustments for hedge instruments and
   foreign currency adjustments, which has been excluded from this
   estimate.

Although the Company has more than adequate liquidity, based upon
the current forecast, it is unlikely that the Company will pay a
fourth quarter 2003 dividend on its preferred shares due to
limitations in the Company's senior notes indenture and credit
facility, both of which restrict the Company's ability to pay
dividends when the Company's EBITDA to interest coverage ratio (as
defined in our senior notes indenture) is below 2.0 to 1.0. The
Company does not expect to pay a common dividend in 2003.

Host Marriott Corporation (S&P/B+/Stable) is a lodging real estate
company, which owns 122 upscale and luxury full-service hotel
properties primarily operated under Marriott, Ritz-Carlton, Four
Seasons, Hyatt, Hilton and Swissotel brand names. For further
information on Host Marriott Corporation, visit the Company's Web
site at http://www.hostmarriott.com


I2 TECH: S&P Affirms Ratings After 2002 Re-Audit & 10-K Filing
--------------------------------------------------------------
Standard & Poor's Ratings Services removed i2 Technologies Inc.
from CreditWatch, where it was placed on Jan. 27, 2003, with
negative implications. The CreditWatch removal follows the
completion of the company's re-audit of its financial statements
for 2000 and 2001 and the completion of the audit of its 2002
financial statements and the filing of its 2002 10-K. At the same
time, Standard & Poor's affirmed i2's 'CCC+' corporate credit
rating and its 'CCC-' subordinated debt rating. The outlook is
negative.

Dallas, Texas-based i2, a provider of software and services
focused on the supply chain and procurement sectors, has
experienced depressed license revenues and high cash-usage rates
following a severe spending slowdown in the company's software
markets.

i2's restatement of its financial statements increased revenue for
2002 and decreased and reversed revenue in 2001, 2000, and 1999.
The restatements had no impact on cash balances, which stood at
$355 million as of June 2003. i2 filed its 10-K for 2002 on July
21, 2003, the delay of which had resulted in a violation of a
covenant in the indenture governing its $350 million convertible
subordinated notes. i2 remains under investigation by the SEC
regarding the restatements.

i2 remains in violation of its indenture covenant for failure to
file on time its March 2003 10-Q. The company expects to file the
10-Q in August 2003. However, the reporting violation does not
have any financial impact unless and until bondholders give notice
to the company. If bondholders give notice, i2 has 60 days to file
its statements. Following the company's failure to file its 10-K,
bondholders did not give notice, and the cure period was never
started. Still, there is a risk that i2 could fail to file its
March 2003 10-Q in August 2003, bondholders could give notice, and
payment on the notes could be accelerated. Standard & Poor's will
continue to monitor i2's progress regarding the filing of its 10-Q
and the ongoing SEC investigation.

"The willingness of customers to close software deals with i2 has
been impaired and makes forecasting sales levels difficult. The
company is likely to face considerable challenges restoring
sustainable profitability under current conditions," said Standard
& Poor's credit analyst Emile Courtney. "Failure to comply with
financial reporting requirements in the company's indenture and to
stem i2's cash burn rate could lead to lower ratings."


IMP INC: Fails to Comply with Nasdaq Listing Requirements
---------------------------------------------------------
IMP, Inc. (Nasdaq:IMPX) received notice from the Nasdaq Stock
Market indicating that IMP, Inc., is no longer in compliance with
certain listing requirements, and that its stock would be delisted
at the opening of business on July 28, 2003, unless IMP, Inc.,
requests a hearing before the Nasdaq Listing Qualifications Panel.
IMP, Inc., has requested a hearing to appeal the decision of the
Nasdaq Staff.

Reasons cited by Nasdaq for the delisting are (i) IMP, Inc.'s
failure to timely file its Form 10-K for the fiscal year ended
March 31, 2003, (ii) failure to meet the Nasdaq minimum bid price
requirements, and (iii) failure to pay certain fees owed to
Nasdaq.

There can be no assurances that IMP, Inc.'s appeal will be
successful. If IMP, Inc. is unsuccessful in appealing the Nasdaq
Staff's decision, its stock will not be immediately eligible to
trade on the Over-the-Counter Bulletin Board (OTCBB) because IMP,
Inc. is not at this time, current in its reporting obligations
under the Securities Exchange Act of 1934 (a requirement on the
OTCBB). IMP, Inc. plans to take the necessary steps to become
eligible for quotation on the OTCBB, but there can be no
assurances that it will be successful.

IMP, Inc. undertakes no obligation to update any forward-looking
statement, whether as a result of new information relating to
existing conditions, future events or otherwise. However, readers
should carefully review future reports and documents that IMP,
Inc. files from time to time with the Securities and Exchange
Commission, such as its quarterly reports on Form 10-Q and any
current reports on Form 8-K.

As reported in Troubled Company Reporter's July 9, 2003 edition,
IMP, Inc. reported that its independent certified public
accountants, BDO Seidman, LLP has resigned effective June 26,
2003.

The report of BDO Seidman, LLP, dated July 12, 2002, on the
Company's financial statements for the fiscal year ended March 31,
2002, contained an explanatory paragraph that stated that "the
Company continues to experience severe liquidity problems and
absorb cash in its operating activities and, as of March 31, 2002,
the Company has a working  capital  deficiency, is in default
under the terms of certain financing agreements, is delinquent in
the payment of its federal employment taxes, and has limited
financial resources available to meet its immediate cash
requirements.  These matters raise substantial doubt about the
Company's ability to continue as a going concern."


INTERFACE INC: Reports Second Quarter Net Loss of $5.4 Million
--------------------------------------------------------------
Interface, Inc. (Nasdaq: IFSIA), a worldwide commercial interiors
products and services company, announced results for the second
quarter ended June 29, 2003.

Sales in the second quarter 2003 were $234.0 million, compared
with $233.8 million in the second quarter 2002.  The Company
recorded a pre-tax restructuring charge of $2.5 million during the
second quarter 2003 in connection with the completion of its
previously announced initiative designed to rationalize
manufacturing operations in its fabrics division and further
reduce workforce worldwide.  Operating income was $3.7 million in
the second quarter 2003, versus $13.1 million in the second
quarter 2002.  Loss from continuing operations, excluding the
restructuring charge, was $2.3 million, or $0.05 per diluted
share, in the second quarter 2003, compared with income from
continuing operations of $1.4 million, or $0.03 per diluted share,
in the second quarter 2002.  Net loss for the second quarter 2003
was $5.4 million, or $0.11 per diluted share, compared with second
quarter 2002 net income of $0.8 million, or $0.02 per diluted
share.

"On a sequential basis, we improved our operating income by $7.2
million, which shows evidence of our sustained efforts to
strengthen and improve each of our business segments," said Daniel
T. Hendrix, President and Chief Executive Officer.  "Through the
continued implementation of our market segmentation strategy, we
drove overall top-line growth and, as a result of our continued
focus on cost controls, we saw sequential improvements in
operating income in each of our businesses.  Even though the
corporate environment remains soft, order levels slightly exceeded
the first quarter of 2003 as a result of our ability to reach new
customers in the hospitality, education, healthcare, and
residential markets."

Mr. Hendrix continued, "Our broadloom business returned to
operating profitability during the second quarter, with a 34%
sequential increase in revenues and a $4.2 million sequential
turnaround in operating income.  In addition, our modular business
showed continued strength, most notably in the hospitality and
education markets where sales growth resulted from our targeted
marketing initiatives.  In the fabrics business, we are beginning
to capture the positive results of the integration and
restructuring programs that have been implemented over the past
few quarters, resulting in cost savings and improved efficiencies.
Our service business also showed improvement, benefiting from our
market segmentation strategy."

For the first six months of 2003, sales were $444.2 million,
compared with $460.4 million for the same period a year ago.
Operating income for the 2003 six-month period was $0.3 million
(which includes $4.6 million of restructuring charges), versus
operating income of $23.7 million for the comparable 2002 six-
month period.  During the 2003 six-month period, loss from
continuing operations was $13.0 million, or $0.26 per diluted
share, compared with income from continuing operations of $1.4
million in the same period a year ago.  Net loss for the six month
period was $15.8 million, or $0.31 per diluted share, compared
with net loss of $54.7 million, or $1.09 per diluted share, for
the first six months of 2002.  During the first six months of
2002, the Company's implementation of SFAS No. 142 resulted in an
after-tax write-down of $55.4 million, or $1.11 per diluted share,
primarily related to the impairment of goodwill.

Patrick C. Lynch, Vice President and Chief Financial Officer of
Interface, commented, "We took a number of steps during the second
quarter to improve our balance sheet and fortify our capital
structure.  Foremost among these was the amendment and restatement
of our credit facility, which provides Interface with ample
liquidity and financial flexibility, allowing us the opportunity
to pursue growth opportunities and fund our working capital needs
going forward."

Mr. Hendrix concluded, "While the depressed condition of the
interiors industry and the continued weakness in the corporate
office segment in particular give us reason for caution, we remain
optimistic about our ability to improve upon the first half of the
year.  We will remain focused on the elements that will keep our
business moving in the right direction -- streamlining our cost
structure, managing our working capital requirements, and
continuing to execute our market segmentation strategy."

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 carpets and textiles for
residential uses; and produces InterCell brand raised/access
flooring systems.

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 followed 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.


INTERNET CAPITAL: Falls Below Nasdaq Continued Listing Standards
----------------------------------------------------------------
Internet Capital Group, Inc. (Nasdaq: ICGE) received a letter from
the Nasdaq Stock Market Staff indicating that the Company has not
maintained compliance with the minimum $1.00 bid price per share
requirement for continued listing on the SmallCap Market, as set
forth in Nasdaq Marketplace Rule 4310(C)(4). As a result of this
deficiency, the Nasdaq Staff has informed the Company that its
stock will be subject to delisting from the SmallCap Market if the
Company fails to appeal the Nasdaq Staff determination within
seven days.

Internet Capital Group will appeal the Nasdaq Staff determination.
In accordance with Nasdaq's rules, Internet Capital Group's stock
will remain listed and continue to trade on the Nasdaq SmallCap
Market pending the outcome of the appeal hearing. If the Company
is unsuccessful in its appeal, Internet Capital Group expects its
common stock to be publicly traded on the OTC Bulletin Board.

Separately, the Securities and Exchange Commission is considering
a Nasdaq proposal to further extend the compliance period for
companies that do not comply with the $1.00 minimum bid price
requirement for continued listing, provided they meet other
applicable listing requirements. This proposal, if approved, could
provide Internet Capital Group with up to an additional 270 days,
or until April 2004, to regain compliance. There can be no
assurance the SEC will grant Nasdaq's request to extend the
compliance period, or that Internet Capital Group will be afforded
the extended compliance periods.

Internet Capital Group, Inc. -- http://www.internetcapital.com--
is an information technology company actively engaged in
delivering software solutions and services designed to enhance
business operations by increasing efficiency, reducing costs and
improving sales results. ICG operates through a network of partner
companies that deliver these solutions to customers. To help drive
partner company progress, ICG provides operational assistance,
capital support, industry expertise, access to operational best
practices, and a strategic network of business relationships.
Internet Capital Group is headquartered in Wayne, Pa. At December
31, 2002, Internet Capital's balance sheet shows a total
shareholders' equity deficit of about $52 million.


L-3 COMMS: Extends Exchange Offer for 6-1/8% Notes Until July 30
----------------------------------------------------------------
L-3 Communications (NYSE:LLL), has extended the expiration date of
its offer to exchange all outstanding 6-1/8% Senior Subordinated
Notes due 2013 for 6-1/8% Series B Senior Subordinated Notes due
2013, which have been registered under the Securities Act of 1933.
As a result of the extension, the exchange offer is now scheduled
to expire at 5:00 p.m., New York City time, July 30, 2003, unless
further extended.

The exchange offer was originally set to expire at 5:00 p.m., New
York City time, on July 23, 2003. As of 5:00 p.m., New York City
time, on July 23, 2003, $396,540,000 million aggregate principal
amount of the Old Notes had been tendered for exchange.

Except for the extension of the expiration date, all of the other
terms of the exchange offer remain as set forth in the exchange
offer prospectus. Copies of the exchange offer prospectus and
related documents may be obtained from The Bank of New York, as
exchange agent for the exchange offer, at the following addresses:

           By Mail:
           The Bank of New York
           Reorganization Unit
           101 Barclay Street-7 East
           New York, NY 10286
           Attention: William Buckley

           By Facsimile:
           The Bank of New York
           Attention: William Buckley
           212-298-1915

           Confirm receipt of Facsimile by telephone:
           212-815-5788

           By Hand or Overnight Delivery:
           The Bank of New York
           Reorganization Unit
           101 Barclay Street
           Lobby Level - Corp. Trust Window
           New York, NY 10286
           Attention: William Buckley

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

                             *   *  *

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

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


LEAP WIRELESS: Court Okays Chanin Capital as Committee's Advisor
----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Leap Wireless
International Inc., sought and obtained of the Court's authority
to retain Chanin Capital Partners LLC as its financial advisor
effective as of the Petition Date.

Since September 27, 2002, Chanin has advised and represented an
ad hoc committee of holders of Leap's bonds in connection with a
potential restructuring of the Debtors' indebtedness under the
bonds.  In the course of that representation Chanin received
$1,039,670.75 from Leap on account of the Firm's fees and
expenses for the prepetition period.

Committee Chairman Neil Subin explains that the Committee has
selected Chanin as its financial advisor based on the Firm's
significant expertise in debtors' and creditors' rights,
bankruptcy matters and business reorganizations, and based on the
Firm's significant familiarity with Leap, and the Debtors, their
affairs and their debt structure.  Chanin is a nationally
recognized, specialty investment bank that provides these
financial services -- Financial Restructurings, Mergers and
Acquisitions, Corporate Finance and Private Placements,
Valuations, and Fairness and Solvency Opinions.  With over 40
restructuring professionals, Chanin has one of the largest
dedicated restructuring practices in the country.  Since its
founding in 1990, the professionals of Chanin have completed over
$80,000,000,000 in financial restructuring transactions,
consummated over $40,000,000,000 in merger and acquisition
transactions, privately placed over $5,000,000,000 in debt and
equity securities, and provided hundreds of companies with
valuations and fairness and solvency opinions.

Mr. Subin believes that Chanin is uniquely qualified to advise
the Committee in this engagement by virtue of, among other
things, its experience working with and analyzing companies in
the telecommunications industry, and, as further explained, its
engagement as the financial advisor to the Unofficial Noteholders'
Committee.  Chanin employees have advised numerous
telecommunications companies over the last few years on a variety
of corporate finance matters, including equity and debt issuance
and merger and acquisition advice.

Chanin and its professionals also have an exceptional reputation
as advisors to financially troubled companies within the
telecommunications sector, and have provided services in numerous
recent financing and restructuring transactions, including Covad,
Focal Communications, Global Crossing, iPCS, Inc., ITC DeltaCom,
McLeodUSA, Nextel International, and Weblink Wireless.
Furthermore, Chanin and its professionals have acted as advisors
to creditors in a number of recent restructuring transactions
spanning several industries, including Assisted Living Concepts,
Fruit of the Loom, Mariner Post-Acute Network, Talon Automotive,
United Artists, and Washington Group International.

According to Mr. Subin:

      (i) Chanin and its senior professionals have an excellent
          reputation for providing high-quality financial advisory
          services to creditors in bankruptcy reorganizations and
          other debt restructurings; and

     (ii) Chanin has extensive knowledge of Leap's and the Debtors'
          financial and business operations.

The Committee expects Chanin to:

     A. analyze the Debtors' operations, business strategy, and
        competition in each of its relevant markets as well as an
        analysis of the industry dynamic affecting the Debtors;

     B. analyze the Debtors' financial condition, business plans,
        capital spending budgets, operating forecasts, management,
        and the prospects for its future performance;

     C. assist in the determination of an appropriate capital
        structure for the Debtors;

     D. determine a theoretical range of values for the Debtors on
        a going concern basis;

     E. advise the Committee on tactics and strategies for
        negotiating with the holders of the existing senior debt
        obligations and other purported stakeholders;

     F. render financial advice to the Committee and participate in
        meetings or negotiations with the Debtors and other
        purported stakeholders in connection with any
        restructuring, modification or refinancing of the Debtors'
        existing debt obligations; and

     G. provide the Committee with other and further financial
        advisory services with respect to the Debtors and a
        restructuring transaction as may be requested by the
        Committee.

Under the terms of the Engagement Letter, Mr. Subin reports that
Chanin will be paid a $100,000 monthly advisory fee.  In addition
to the Monthly Fee, the Debtors will pay Chanin a deferred fee
after consummation of a Restructuring Transaction equal to 1.5%
of the Total Consideration in excess of the $45,000,000 received
by the holders of the Notes.

The Deferred Fee will be payable in kind at closing on the
effective date of the Restructuring Transaction.  The Deferred
Fee also will be payable if Chanin's engagement is terminated by
the Committee without cause and a Restructuring Transaction is
consummated within 12 months of the effective date of the
termination.  Chanin will also be reimbursed for its out-of-
pocket expenses incurred in connection with the Firm's engagement
by the Committee, including the fees, disbursements and other
reasonable charges of its legal counsel, if any.

According to Mr. Subin, the Engagement Letter provides that Leap
will indemnify and hold harmless Chanin and its directors,
officers, employees, attorneys and other agents from and against
Liabilities and Expenses arising out of or relating to the
services provided by Chanin in connection with its engagement.
However, Leap will not be responsible for any Liabilities or
Expenses finally determined to have resulted from the indemnified
person's own negligence, bad faith or willful misconduct.

These professionals will have primary responsibility for
representing the Creditors' Committee:

     Russell Belinsky    Senior Managing Director
     Peter Corbell       Vice President
     Anurag Kapur        Associate
     Brian Rizkallah     Analyst

Chanin Senior Managing Director Russell A. Belinsky assures the
Court that the Firm does not hold or represent any interests
materially adverse to those of the Committee and, in addition, is
"disinterested" as that term is defined in Section 101(14) of the
Bankruptcy Code.  Furthermore, to the best of the Committee's
knowledge, Chanin's professionals do not have any material
connection with the Debtors, the Debtors' directors and officers,
professional advisors to the Debtors, the Debtors' secured
creditors, Leap's 20 largest unsecured creditors, the members of
the Committee, professional advisors to the Informal Vendor Debt
Committee, or the Office of the United States Trustee or its
employees. (Leap Wireless Bankruptcy News, Issue No. 7; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


LNR PROPERTY: S&P Revises BB Rating Outlook to Stable from Pos.
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Miami
Beach, Florida-based LNR Property Corp. to stable from positive.
The ratings on LNR, including the company's 'BB' long-term
counterparty credit rating, are affirmed.

The outlook revision follows LNR's announcement that it will form
a venture with Lennar Corp. (Lennar, BBB-/Stable/-) to acquire
Newhall Land and Farming (Newhall Land), a community planner in
north Los Angeles County, California. Additionally, in a
concurrent transaction, LNR will also acquire Newhall's existing
income-producing properties. The parties expect this transaction
to close by mid-2004.

"The outlook revision is based on the absolute size of this
transaction, as well as the geographic concentration of the assets
within it," said credit analyst Steven Picarillo. "The rating
affirmation is based on LNR's track record of managing a portfolio
of income-producing properties and its continued success in
managing the balance-sheet risk inherent in its investments in
CMBS, real estate properties, and real estate loans."

The stable outlook is based on Standard & Poor's expectations that
LNR will manage this portfolio of assets with a success similar to
that which it has historically enjoyed. The company has a
successful track record in acquiring, repositioning, operating,
and harvesting income-producing properties to realize gains.


LNR PROPERTY: Fitch Says Acquisition Won't Affect Ratings
---------------------------------------------------------
LNR Property Corp announced on July 21 that it, in partnership
with its former parent Lennar Corp., plans to acquire Newhall Land
and Farming Co. Based on the proposed structure of the
transaction, Fitch Ratings does not anticipate any rating actions
related to LNR's debt ratings or outlook. LNR's senior unsecured
debt and senior subordinated debt are rated 'BB+' and 'BB-',
respectively, by Fitch, respectively. The Rating Outlook is
Stable.

Newhall's assets will be purchased by a joint venture owned 50% by
LNR and 50% by Lennar. Simultaneously with the purchase, LNR will
purchase from the JV all of Newhall's income producing commercial
assets. These assets mostly consist of stabilized operating
properties, including hotels, retail space, and office space in
the vicinity of Valencia, California along the Interstate 5
corridor north of Los Angeles, California. The remaining JV assets
will largely consist of entitled undeveloped residential and
commercial property in the same geographic location as the
operating properties being purchased by LNR.

A portion of the acquisition is expected to be funded by secured
debt issued by the JV that is anticipated to be non-recourse to
both LNR and Lennar. LNR expects to source its funding from both
existing unsecured and secured liquidity lines. Fitch does not
believe that the acquisition will improve LNR's unencumbered asset
profile.

The strengths of the proposed transaction center on LNR's strong
historical track record of exceeding targeted performance for
similar joint ventures with Lennar, such as Lennar Land Partners
(LLP). LLP owns and develops land in California, Florida and Texas
and has a structure that is similar to that of the proposed JV.
The proposed land acquisition resides in one of the most supply
constrained residential property markets in the United States.
According to LNR, most of the proposed residential developments
have been entitled and cleared of all regulatory and environmental
challenges. In addition, LNR has indicated that the operating
properties being purchased have strong occupancy rates and will
contribute net operating income upon acquisition.

Undeveloped land owned by the JV will be developed by the
partnership and sold for residential or commercial construction to
third parties, Lennar, or LNR. LNR and Lennar have begun a 45-day
due diligence period, following which the transaction may not
close for as much as one year due to necessary regulatory
approvals.

Fitch's concerns regarding the proposed transaction are focused on
the geographic concentration of the property acquired.
Additionally, the acquisition will increase partnerships with
Lennar to nearly 10% of LNR's assets, raising concerns relating to
the companies' common ownership. The transaction will also raise
LNR's investment in land to nearly 10% of total assets, bringing
with it meaningful development risks. As the acquisition draws
closer to completion, Fitch will closely monitor the acquisition's
anticipated affect on LNR's unencumbered asset coverage and
quality.

Based in Miami, Florida, with roots dating to 1969, LNR
underwrites, purchases and manages real estate and real estate
driven investments. LNR has also developed one of the top
commercial mortgage backed securities special servicer franchises
in the U.S., with a market share of 21% at Feb. 28, 2003. LNR
primarily seeks investment opportunities where it can purchase
assets at a discount and utilize its due diligence, repositioning,
asset management, and workout expertise to improve cash flows and
profitability. Specifically, activities include the development or
purchase of office buildings, apartment buildings, affordable
housing communities, retail space, investments in subordinated
CMBS, and mortgage and real estate-backed loans.


LTV CORP: Asks Court to Fix Sept. 19 as Admin. Claims Bar Date
--------------------------------------------------------------
Certain of the non-operating LTV Debtors want the Court to set a
bar date by which all entities must file administrative proofs of
claim with respect to certain specified administrative expense
claims, and to approve the form and manner of notice of the
Administrative Claims Bar Date.

The Requesting Debtors are comprised of 39 non-operating Debtors
that are in the process of determining the best means by which to
complete the liquidation and/or administration of their estates.
The Requesting Debtors anticipate that certain Requesting Debtors,
including VP Buildings, will file a liquidating plan or plans of
reorganization, while other Requesting Debtors may conclude their
bankruptcy cases by alternative means.  To determine the
appropriate means of concluding each case, the Requesting Debtors,
among other things, must obtain complete and accurate information
regarding the nature, validity and amount of claims asserted
against each of their estates arising on or after the date of the
commencement of the applicable Requesting Debtor's Chapter 11 case
and seeking administrative expense priority under Sections 503 and
507(a)(1) of the Bankruptcy Code.  For example, to confirm a
liquidating plan of reorganization, Section 1129(a)(9)(A) provides
that Administrative Claims must be paid in full on the effective
date of the plan unless the claim holder agrees to different
treatment.

Obtaining accurate and complete information regarding potential
Administrative Claims is necessary for the Requesting Debtors to:

       (a) understand and analyze the liabilities that must be
           addressed in any liquidating plan of reorganization or
           other wind down, and

       (b) assess the viability of any strategy to conclude the
           Requesting Debtors' Chapter 11 cases.

The Debtors remind Judge Bodoh that, by an order dated October 15,
2002, the Court established December 3, 2002, as the general
claims bar date for the assertion of prepetition claims against
all of the Debtors with the exception of LTV Steel.  By orders
dated March 7, 2002 and November 12, 2002, the Court established
administrative claims bar dates for the assertion of certain
postpetition claims against LTV Steel -- i.e., May 20, 2002, for
administrative trade claims, and January 17, 2003 for other
administrative claims.

        Establishment of the Administrative Claim Bar Date

A bar date for Administrative Claims is necessary in the
Requesting Debtors' Chapter 11 cases.  Pursuant to Rule 3003(c)(3)
of the Federal Rules of Bankruptcy Procedure, the Court may fix a
time within which proofs of claim -- including administrative
claims -- must be filed. Upon approval of this request, the
Requesting Debtors will serve on all known entities holding
potential Administrative Claims:

        (a) notice of the Administrative Claim Bar Date, and

        (b) an administrative proof of claim form.

Although administrative expense claims typically are made by the
filing of requests for payment of such claims, the Requesting
Debtors have developed an administrative proof of claim form for
asserting Administrative Claims, consistent with the form used by
LTV Steel, which was previously approved by the Court.  The
Requesting Debtors believe that this form will simplify the
process for the holder of a potential Administrative Claim to
assert such claims, and will streamline the Requesting Debtors'
review and reconciliation of asserted Administrative Claims.

                     The Proposed Bar Date

The Requesting Debtors ask the Court to establish September 19,
2003 as the Administrative Claims Bar Date, which will be
approximately 45 days after the anticipated Service Date.  The
Administrative Claims Bar Date will be the date by which all
entities, including governmental units, must file administrative
proofs of claim against any Requesting Debtor with respect to any
alleged Administrative Claims against these entities.

        Entities That Must File Administrative Proofs of Claim
                 by the Administrative Claim Bar Date

With some specified exceptions, the Requesting Debtors propose
that the Administrative Claim Bar Date will apply to all entities
holding or asserting Administrative Claims against them,
including, among others, these entities:

          (a) vendors and suppliers;

          (b) employees and former employees;

          (c) customers;

          (d) parties to assumed or rejected executory contracts
              and unexpired leases;

          (e) unions;

          (f) taxing authorities and other governmental units;

          (g) the Pension Benefit Guaranty Corporation; and

          (h) parties to postpetition lawsuits.

        Entities That Are Not Required to File Administrative
        Proofs of Claim by the Administrative Claim Bar Date

The Requesting Debtors further propose that certain entities,
whose claims otherwise would be subject to the Administrative
Claim Bar Date, will not be required to file administrative proofs
of claim:

           (a) any professional retained in these cases
               pursuant to Section 327 or 1103 of the Bankruptcy
               Code;

           (b) the U.S. Trustee, on account of claims for fees
               payable pursuant to 28 U.S.C. Section 1930;

           (c) any entity that already has properly filed an
               administrative proof of claim for an
               Administrative Claim against the Requesting
               Debtors;

           (d) any entity whose Administrative Claim against the
               Requesting Debtors previously has been allowed by,
               or paid pursuant to, a Court order or that
               previously was paid in the ordinary course of the
               Requesting Debtors' businesses;

           (e) any entity that has an Administrative Claim
               against VP Buildings for goods and services
               provided to VP Buildings to the extent that such
               claim was:

                  (i) paid by Grupo IMSA or its affiliates;

                 (ii) designated as an assumed liability that will
                      be paid by Grupo IMSA or its affiliates in
                      connection with the VP Buildings Sale, or

                (iii) incurred by Grupo IMSA or its affiliates
                      after the consummation of the VP Buildings
                      Sale on September 19, 2001; and

           (f) any Debtor, including any Requesting Debtor, that
               holds an Administrative Claim against any
               Requesting Debtor.

In addition, the Administrative Claim Bar Date:

       (a) does not apply to:

              (i) any prepetition claims against the
                  Requesting Debtors subject to the
                  Prepetition Claim Bar Date;

             (ii) any postpetition administrative claims
                  against LTV Steel subject to the LTV Steel
                  Administrative Claims Bar Dates, or

            (iii) any postpetition administrative claims
                  against any Debtor other than a Requesting
                  Debtor;

       (b) does not in any manner extend or otherwise modify
           either the Prepetition Claims Bar Date or the LTV
           Steel Administrative Claims Bar Dates; and

       (c) does not require entities that filed proofs of
           claim in response to either the Prepetition
           Claims Bar Date or the LTV Steel Administrative
           Claims Bar Dates to refile such claims by the
           Administrative Claim Bar Date.

      Effect of Failure to File Administrative Proofs of Claim

The Requesting Debtors propose that, pursuant to Bankruptcy Rule
3003(c)(2), any entity that is required to file an administrative
proof of claim with respect to an Administrative Claim, but that
fails to do so by the Administrative Claim Bar Date will be:

       (a) forever barred from asserting such Administrative
           Claim against any Requesting Debtor or its assets;

       (b) barred from participating in any distribution from
           any Requesting Debtor's estate with respect to
           such Administrative Claim; and

       (c) bound by the terms of:

              (i) any liquidating plan or plans of reorganization
                  that may be confirmed by the Court in any
                  Requesting Debtor's Chapter 11 case, or

             (ii) any other order that authorizes the winding up
                  of any Requesting Debtor's estate.

         Procedures for Providing Notice of Administrative
     Claim Bar Date and Filing Administrative Proofs of Claim

The Requesting Debtors propose to serve on all known entities
holding potential Administrative Claims:

           (a) a written notice of the Administrative Claim Bar
               Date; and

           (b) an administrative proof of claim form
               substantially in the form of Official Form No. 10
               and modified as necessary or appropriate to
               reflect the assertion of Administrative Claims
               rather than prepetition claims.

The Administrative Claim Bar Date Notice states, among other
things, that administrative proofs of claim must be filed with the
Court on or before the Administrative Claim Bar Date.  Any
Administrative Claim asserted against a Requesting Debtor in any
form, including a request for payment of an administrative claim
or other claim form, will be deemed an administrative proof of
claim and will not be scheduled for any further proceeding before
the Court, except pursuant to an objection to such claim by the
Requesting Debtors.

The Debtors assure Judge Bodoh that the proposed form of the
Administrative Claim Bar Date Notice is substantially similar to
the forms of notice previously used to provide notice of the LTV
Steel Administrative Claims Bar Dates.  The Prior Notices were
approved by the Clerk of Court.

As soon as practicable, the Requesting Debtors intend to serve the
Bar Date Notice Package by first class United States mail, postage
prepaid, to:

       (a) all known potential holders of Administrative Claims,
           including:

              (i) the taxing authorities for the jurisdictions
                  in which the Requesting Debtors conducted
                  business;

             (ii) other governmental units;

            (iii) unions; and

             (iv) parties to postpetition lawsuits against the
                  Requesting Debtors;

       (b) all parties that have requested notice in these
           cases; and

       (c) the U.S. Trustee.

The proposed Administrative Claim Bar Date has been established to
ensure that potential claimants receive approximately 45 days'
notice of the Administrative Claim Bar Date, which exceeds the
minimum notice period provided by Bankruptcy Rule 2002(a)(7).
This will provide potential claimants with ample time after the
mailing of the Administrative Claim Bar Date Notice within which
to review their books and records and to prepare and file
administrative proofs of claim, if necessary.

Any entity asserting an Administrative Claim against more than one
Requesting Debtor must file a separate administrative proof of
claim with respect to each such Requesting Debtor.  In addition,
to the extent that any entity believes that it has an
Administrative Claim against any Requesting Debtor, but previously
filed an administrative proof of claim for such alleged liability
only against LTV Steel, the entity must file a separate
administrative proof of claim against each applicable Requesting
Debtor.  Consistent with this, any entity filing an administrative
proof of claim must identify on its administrative proof of claim
form the particular Requesting Debtor against which its claim is
asserted.

Moreover, for any claim to be validly and properly filed, a signed
original of a completed administrative proof of claim must be
delivered to the Court at the address identified on the
Administrative Claim Bar Date Notice so as to be received no later
than 4:00 p.m., Eastern Time, on the Administrative Claim Bar
Date, and must be accompanied by all available evidence in support
of such claim.  The Requesting Debtors propose that claimants be
permitted to submit administrative proofs of claim in person, by
overnight service or by regular United States mail.

Administrative proofs of claim submitted by facsimile or e-mail
will not be accepted.

Administrative proofs of claim will be deemed filed when actually
received by the Court.  If a claimant wishes to receive
acknowledgement of the Court's receipt of an administrative proof
of claim, the claimant also must submit to the Court by the
Administrative Claim Bar Date and concurrently with submitting its
original administrative proof of claim:

        (a) a copy of the original administrative proof of
            claim, and

        (b) a self-addressed, postage prepaid return envelope.

The Requesting Debtors reserve and retain the right to dispute, or
assert offsets or defenses against, any filed Administrative Claim
as to the nature, amount, liability, classification or otherwise.

                      Publication Notice

In light of the size, complexity and geographic diversity of the
Requesting Debtors' businesses, potential claims against the
Requesting Debtors may exist that the Requesting Debtors are
unable to identify. Such unknown potential claims may include, for
example:

       (a) claims of entities with potential unasserted causes
           of action against the Requesting Debtors; and

       (b) claims that, for various other reasons, are not
           recorded in the Requesting Debtors' books and
           records.

Accordingly, the Requesting Debtors believe that:

       (a) it is necessary to provide notice of the
           Administrative Claims Bar Date to entities whose
           names and addresses are unknown to the Requesting
           Debtors, and

       (b) it is advisable to provide supplemental notice to
           known holders of potential claims.

Therefore, pursuant to Bankruptcy Rule 2002(l), the Requesting
Debtors seek the Court's authority to publish notice of the
Administrative Claims Bar Date substantially in the form of the
Administrative Claim Bar Date Notice on the Service Date or as
soon as possible thereafter in the national editions of The Wall
Street Journal and The New York Times. (LTV Bankruptcy News, Issue
No. 51; Bankruptcy Creditors' Service, Inc., 609/392-00900)


LTWC CORP: Reaches Pact to Sell All Assets to Markado for $1.12M
----------------------------------------------------------------
LTWC Corporation (OTC Bulletin Board: LTWC) and certain
subsidiaries announced today that they have reached an agreement
for the sale of substantially all of their assets (other than cash
and cash equivalents) to Markado, Inc. The proposed sale is
pursuant to section 363 of Chapter 11 of the U.S. Bankruptcy Code.
The total price to be paid by Markado, Inc. for the acquired
assets will be approximately $1.125 million, subject to certain
adjustments.

To facilitate the sale, LTWC and certain subsidiaries will file
voluntary petitions for relief under Chapter 11 with the U.S.
Bankruptcy Court for the District of Delaware today. Under a
section 363 asset sale, all of the assets of a company may be sold
to a purchaser free and clear of virtually all liens, claims and
interests with any liens attaching to the proceeds. The sale of
LTWC's assets to Markado, Inc is subject to Bankruptcy Court
approval. LTWC expects to complete the sale to Markado, Inc.,
within 30 to 60 days.

LTWC has adequate cash balances to fully fund operations during
the Chapter 11 proceedings and will file various motions to enable
it to meet obligations related to certain customer programs and
other similar charges. As in all Chapter 11 cases, subject to
court approval, ordinary course post-petition obligations to
vendors, employees and others will be satisfied in the normal
course of business without the need to obtain further court
approval.

Paul A. Goldman, Chief Executive Officer of LTWC, said, "The
proposed sale of our assets to Markado, Inc. will allow the LTWC
permission based e-mail business to remain a strong competitor and
maximize our value for customers, employees and other
stakeholders. Markado, Inc. has expressed interest in keeping and
investing in our brands and offering employment to substantially
all of our employees."

During the Chapter 11 process LTWC will maintain business as
usual. Management does not expect any interruption to the
business, and all ordinary course vendors will be paid in the
normal course of business for post-petition obligations. In making
its filing to the Bankruptcy Court, Management has concluded that
in order to maximize the value to all stakeholders, the Chapter 11
protection is necessary to stabilize LTWC's business and preserve
its value during the process of selling its assets to Markado,
Inc.

The Board Of Directors has considered all possible alternatives,
and the combination of a bankruptcy filing and an immediate
Section 363 sale is the only viable course of action for the
Company's future. There is not expected to be any recovery for
LTWC's shareholders in the bankruptcy.

We provide permission-based e-mail marketing solutions and
services that allow our clients to build customer relationships
and make real-time business decisions based on campaign results.
Our services include: campaign strategy, creative development,
customized database management, message distribution, in-depth
reporting and response analysis. We are committed to technological
excellence and high service standards that result in secure,
successful direct marketing e-mail campaigns. Our tracking
solutions provide marketing intelligence to clients by tracking
and reporting conversion rates of clients' customers without
requiring any modification to the clients' website. Our clients
include category-leading businesses in various industries
including publishing, retail/e-tail, advertising and direct
marketing. For more information, visit http://www.ltwccorp.com


MEMC ELECTRONICS: Hosting Q2 2003 Conference Call on July 28
------------------------------------------------------------
Management of MEMC Electronic Materials, Inc. (NYSE: WFR) will
conduct a conference call to discuss the Company's operating
performance for the 2003 second quarter ended June 30, 2003.  The
call will take place:

        Monday, July 28, 2003, at 5:30 pm Eastern Time

To access the live webcast, please visit the Company's Web site at
http://www.memc.com

Please go to the Web site at least fifteen minutes prior to the
call to register, download and install any necessary audio
software.

A replay will also be available until 11:59 pm ET on August 1,
2003 on the Company's Web site at http://www.memc.com

MEMC, whose March 31, 2003 balance sheet shows a total
shareholders' equity deficit of about $3 million, is the world's
largest public company solely devoted to the supply of wafers to
semiconductor device manufacturers.  MEMC has been a pioneer in
the design and development of wafer technologies over the past
four decades.  With R&D and manufacturing facilities in the U.S.,
Europe and Asia, MEMC enables the next generation of high
performance semiconductor devices.


METRIS MASTER: Ratings on Various Related Transactions Lowered
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on various
Metris Master Trust-related transactions and removed them from
CreditWatch with negative implications, where they were placed
March 14, 2003. At the same time, the ratings on all classes of
Metris Master Trust 2001-1 and Metris Secured Note Trust 2001-1
are affirmed and removed from CreditWatch with negative
implications, where they were also placed March 14, 2003.

The lowered ratings reflect continued adverse performance trends
displayed by the Master Trust collateral, consisting of VISA and
MasterCard credit card receivables. The affirmed ratings on the
Metris Master Trust 2001-1 and Metris Secured Note Trust 2001-1
transactions reflect the short time horizon remaining until the
beginning of their accumulation period.

Standard & Poor's lowered its ratings on all series of Metris
Master Trust bonds in December 2002 based primarily on a sustained
increase in reported losses. Since that time, charge-off rates
have continued to increase. Although the Metris Master Trust-
related transactions have benefited from a lower interest rate
environment, the lower funding costs have not been able to wholly
offset the Master Trust's increased charge-off rates, which have
resulted in a significant drop in excess spread during the past
six months. June's excess spread is 1.14% and the three-month
average is 1.93%.

As of the June 2003 reporting period, the six-month rolling
average charge-off rate was 21.26%, with the June charge-offs
increasing to 22.17%. This level is increased from the two-year
average of 16.74% and from the level that was seen at the time of
Standard & Poor's previous Metris Master Trust downgrade in
December 2002. Charge-off rates are expected to decrease slightly
in the next six months, but to remain in the 20% range through the
end of the year. The increased charge-off rate has negatively
affected excess spread, causing it to fall from its one-year
average of 3.56% to a current three-month average of 1.93%. After
seeing an increase through 2001 and 2002, delinquencies during the
past eight months have begun to stabilize. The recent delinquency
and charge-off rates displayed by the master trust have been
affected by a reduction in trust aggregate receivables. Overall,
however, lagged charge-off and delinquency trends have not
improved enough to offset the rise in annualized charge-offs as a
percentage of current receivables.

The current payment rate of 6.62% is in line with the historical
payment rate for this trust. In addition, the trust yield has
remained stable, averaging between 26% and 27% during the past few
years, despite a decreasing interest rate environment.

The Metris Secured Note Trust transactions, which are issues that
are attached to specific master trust series, have benefited from
note reserve accounts, which are currently building funds by
trapping excess spread. The note reserve accounts are available to
make up any interest shortfalls to the Secured Note Trust
noteholders of each series, as well as any principal due to those
noteholders once the senior classes have been repaid.

Following a review of the Metris Master Trust portfolio
performance and a review of purchase rate assumptions for all
subprime credit card portfolios originated and serviced by non-
investment-grade and unrated banks, Standard & Poor's has revised
its performance assumptions for the trust receivables and
determined that the available credit support for the downgraded
classes is insufficient to support the ratings at their prior
levels.

         RATINGS LOWERED AND REMOVED FROM CREDITWATCH

                     Metris Master Trust
                        Series 2000-1

                            Rating
                 Class   To        From
                 A       A         AA-/Watch Neg
                 B       BBB       BBB+/Watch Neg

                      Metris Master Trust
                         Series 2000-3

                            Rating
                 Class   To        From
                 A       A         AA-/Watch Neg
                 B       BBB       BBB+/Watch Neg

                       Metris Master Trust
                         Series 2001-2

                            Rating
                 Class   To        From
                 A       A         AA-/Watch Neg
                 B       BBB       BBB+/Watch Neg

                       Metris Master Trust
                         Series 2001-3

                            Rating
                 Class   To        From
                 A       A         AA-/Watch Neg
                 B       BBB       BBB+/Watch Neg

                        Metris Master Trust
                           Series 2001-4

                            Rating
                 Class   To        From
                 A       A         AA-/Watch Neg
                 B       BBB       BBB+/Watch Neg

                        Metris Master Trust
                           Series 2002-1

                            Rating
                 Class   To        From
                 A       A         AA-/Watch Neg
                 B       BBB       BBB+/Watch Neg

                        Metris Master Trust
                          Series 2002-2

                            Rating
                 Class   To        From
                 A       A         AA-/Watch Neg
                 B       BBB       BBB+/Watch Neg

                      Metris Secured Note Trust
                          Series 2000-1

                            Rating
                 Class   To        From
                 Notes   B+        BB/Watch Neg

                      Metris Secured Note Trust
                          Series 2000-3

                            Rating
                 Class   To        From
                 Notes   B+        BB/Watch Neg

                      Metris Secured Note Trust
                          Series 2001-2

                            Rating
                 Class   To        From
                 Notes   B+        BB/Watch Neg

                       Metris Secured Note Trust
                          Series 2001-3

                            Rating
                 Class   To        From
                 Notes   B+        BB/Watch Neg

                       Metris Secured Note Trust
                           Series 2001-4

                            Rating
                 Class   To        From
                 Notes   B+        BB/Watch Neg

                       Metris Secured Note Trust
                            Series 2002-1

                            Rating
                 Class   To        From
                 Notes   B+        BB/Watch Neg

                       Metris Secured Note Trust
                            Series 2002-2

                            Rating
                 Class   To        From
                 Notes   B+        BB/Watch Neg

         RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH NEGATIVE

                         Metris Master Trust
                            Series 2001-1

                            Rating
                 Class   To        From
                 A       AA-       AA-/Watch Neg
                 B       BBB+      BBB+/Watch Neg

                        Metris Secured Note Trust
                            Series 2001-1

                            Rating
                 Class   To        From
                 Notes   BB        BB/Watch Neg


MERIT SECURITIES: Fitch Affirms Ratings on Two Transactions
-----------------------------------------------------------
Fitch Ratings affirms the following Merit Securities Corp.,
manufactured housing contracts, series 12-1 and 13.

      Series 12-1

         -- Classes A-2 - A-3 'AAA';
         -- Class M-1 'AA';
         -- Class M-2 'A';
         -- Class B-1 'BBB'.

      Series 13

         -- Classes A-2 - A-4 'AAA';
         -- Class M-1 'AA';
         -- Class M-2 'A';
         -- Class B-1 'BBB';
         -- Class B-2 'BB';
         -- Class B-3 'B'.


MIRANT CORP: Gets Blessing to Honor Prepetition Wages & Benefits
----------------------------------------------------------------
Mirant Corp., and its debtor-affiliates seek the Court's authority
to pay prepetition obligations owing to their employees,
including, but not limited to:

     (a) amounts owed to employees for wages, salaries,
         incentives, commissions, deferred and supplemental
         compensation;

     (b) reimbursement of employee business expenses incurred in
         the ordinary course like travel, meals and lodging;

     (c) maintenance of employee health and welfare plans; and

     (d) other miscellaneous employee expenses and benefits.

"It is axiomatic that continued loyalty of the Debtors' employees
is a necessary component to any successful reorganization," Robin
Phelan, Esq., at Haynes and Boone, LLP, in Dallas, Texas, says.
The Debtors' Chapter 11 case is stressful and an uncertain time
for their employees, most of whom are not familiar with the
nuances of bankruptcy that many practitioners often take for
granted.  Mr. Phelan points out that the stress and uncertainty
often cause poor employee morale at a time when the Debtors need
their employees to be most loyal.  Thus, Mr. Phelan contends that
honoring the Debtors' Prepetition Employee Obligations will:

     -- minimize the hardship that employees will certainly
        endure if payroll is interrupted; and

     -- prevent the wholesale loss of employees that would ensue
        as a result of the collective employees' loss of the
        reasonable expectation that they will be compensated for
        services rendered.

Mr. Phelan tells the Court that majority of the employees
entrusted to run and maintain the Debtors' power plants on a day-
to-day basis are employed pursuant to collective bargaining
agreements.  Hence, absence of the payment of the Prepetition
Employee Obligations will potentially lead to strikes or similar
job actions at the various power plants that would cripple the
Debtors' businesses, materially impair the supply of energy
across the country and jeopardize the health and safety of
countless individuals.

             Wages, Salaries and Other Compensation

According to Mr. Phelan, substantially of all of the Debtors'
U.S. employees are employed centrally at Mirant Services, LLC.
Depending on the position and location, the Debtors' employees
are paid either weekly or bi-weekly in arrears, current through
the date that is one week prior to the applicable payday.  The
Debtors' gross weekly payroll for all employees averages about
$4,900,000 in the aggregate.  Approximately 3% of that amount
represents compensation paid to "Senior Executives."

To alleviate hardship and undue stress on the Debtors' employees,
on July 14, 2003, the Debtors issued a special payroll under
which substantially all owed accrued wages, salaries and employee
reimbursements were paid to the Debtors' employees by either the
issuance of payroll check, expense check or through direct
deposit into the employees' bank accounts.  Accordingly, with the
exception of a limited number of payroll checks that may remain
in float and certain accrued but unpaid overtime, the Debtors are
current in paying the compensation due for prepetition services
the employees performed.

The special payroll consisted of $4,406,810 on wages and salaries
and $248,860 Employee Reimbursements.  While the vast majority of
the Debtors' employees did not receive more than the $4,650
priority limit under Section 507(a) of the Bankruptcy Code,
approximately 32 employees received wages and salaries exceeding
this statutory limitation.  The Debtors promise to provide the
U.S. Trustee with a list of employees receiving more than the
$4,650 limit as soon as possible.

Although the Debtors believe that most payroll checks issued
prepetition have been honored by the applicable drawee banks, the
Debtors recognize that certain employees may fail to cash or
deposit their paychecks in a timely manner.  Mr. Phelan is
concerned that banks may not honor those floating checks absent
explicit authority and direction to do so.  Thus, the Debtors
seek the Court's authority to honor payroll checks currently in
float.

In addition, Mr. Phelan explains that the Special Payroll was
based on the Debtors' estimate of amounts owed to employees on
account of salaries and wages for the period associated with the
Special Payroll.  Hence, certain employees may have received less
than what they were actually owed for the Special Payroll Period.
This is because some employees worked overtime or additional
shifts that were not yet accounted for in the Special Payroll.
Accordingly, the Debtors want to true up and pay the owed amounts
on account of deficiencies in the Special Payroll.

                     Incentive Compensation

Mr. Phelan relates that eligible employees are entitled to
participate in the Mirant Corporation Omnibus Incentive
Compensation Plan.  The Incentive Plan is intended to optimize
the Debtors' profitability and growth through annual and long-
term incentives, which are consistent with the Debtors' goals and
which link the personal interests of the participating employees
to those of the Debtors' stockholders to:

     -- provide the employees with an incentive for excellence
        in individual performance; and

     -- promote teamwork among participants.

Also, the Incentive Plan is designed to provide flexibility to
the Debtors in its ability to motivate, attract and retain the
services of participating employees who make significant
contributions to the Debtors' success and to allow employees to
share in the Debtors' success.  The awards under the Incentive
Plan are based on certain performance measures relating to the
Debtors' financial success, targeted at the median of general
industry incentive plans.

Generally, the Incentive Plan was paid annually in March.
However, this year, to boost retention efforts based on the
Debtors' troubling times, short-term incentives accruing under
the Incentive Plan will be paid in two installments for eligible
non-union employees.  The first installment -- the Mid-Year
Payout -- becomes due and owing on September 14, 2003 and based
on the individual employee's performance at mid-year review.  The
Mid-Year Payout does not consider nor compensate the employee
based on the Debtors' performance.  Thus, the Debtors anticipate
a 24% payout under the Incentive Plan for 2003.

The second installment under the Incentive Plan for 2003, which
includes the other half of the individual component and the total
corporate component, becomes due and owing in March 2004.

The Debtors estimate that the Mid-year Payout will total
$7,800,000 to be paid to approximately 1,600 non-union employees.
In addition, the Debtors estimate the payment in March 2004 to
reach $25,000,000 in short-term incentive awards to 1,760 union
and non-union employees and $15,000,000 in long-term incentives
that will be owed to 1,600 employees.

Mr. Phelan argues that the payments of amounts owed under the
Incentive Plan is crucial in maintaining the morale of the
Debtors' employees during this troubling time.  Moreover, the
Debtors believe that the Incentive Plan amounts are relatively
small when compared with the loss of value that may ensue in the
event the employees are not appropriately motivated to assist the
Debtors through these bankruptcy cases.

            2002 Trading and Marketing Incentive Plan

Some of the Debtors' energy traders and marketers also
participate in a Commercial Trading and Marketing Incentive Plan,
which is technically under the umbrella of the Incentive Plan.
Mr. Phelan explains that the 2002 Trading and Marketing Incentive
Plan is designed to provide a market-based short-term incentive
that compensates employees for incremental value creation as a
result of their individual contributions to the Debtors' growth
and profitability.  Incentive compensation under the current 2002
Trading and Marketing Incentive Plan is measured in three
components including:

     (a) a financial measure based on the individual's primary
         business entity;

     (b) a financial measure based on the individual's secondary
         business entity; and

     (c) an individual component.

According to Mr. Phelan, the individual component of the
potential bonus that an eligible employee can earn is uncapped,
but the pool available for payment under the Trading Plan is
limited to 5% of the value created by the participants.

Pursuant to the Trading Plan, the first $75,000 of a bonus earned
and 30% of any amounts over $75,000 is paid in cash as soon as
practicable after year end, typically at the beginning of March.
The remaining 70% of any bonus earned is deferred and paid in
six-month intervals of 50% in September of the year the award is
earned and 50% in March the following year.

Under the Trading Plan, the Debtors have accrued approximately
$4,417,268, which is due to be paid on September 12, 2003 to
approximately 43 eligible employees in amounts ranging from
$1,750 to $848,750.  The Debtors estimate the March 2004 payment
to be $4,417,268.

                 Special Incentive Award Bonuses

For those employees who achieve beyond the normal scope of their
position, the Debtors designed and implemented prior to the
Petition Date a Special Achievement Award Policy pursuant to
which certain employees receive awards that are above and beyond
any bonuses awarded under the 2002 Trading and Marketing
Incentive Plan and Incentive Compensation Plan.  Considerations
for determining eligibility in the Special Achievement Award
include, among other things:

     (a) whether the work performed by the employee was
         extraordinary and outside the scope of the employee's
         normal job;

     (b) whether the award of the Special Achievement Award to the
         employee would violate internal equity within the group or
         team that is working on the particular special project;
         and

     (c) whether the award is consistent with earlier pay
         practices.

Mr. Phelan informs Judge Houser that through July 11, 2003, the
Debtors have made 165 awards under the Special Achievement Award
totaling $619,045, ranging from $75 to $51,462 per award.  These
awards were granted to employees for outstanding performance in a
variety of areas, including, extraordinary support of asset
sales, project leadership beyond the bounds of current job
responsibilities, initiatives which save the enterprise
considerable money and the development of patents.

                  Construction Incentive Plan

In 2003, the Debtors brought four newly constructed power
generation facilities into commercial operation.  Currently, the
Debtors have one generation facility under construction.  Since
the cost associated with the construction of a generation
facility can reach more than $550,000,000, it is extremely
critical that construction stays on schedule -- generally three
to four years.  Construction delays can have severe cash flow
impacts on the Debtors.

In an effort to motivate the successful completion and operation
of new construction projects, the Debtors developed a
Construction Incentive Plan.  Incentives paid under the
Construction Incentive Plan are measured on:

     (a) business development;

     (b) construction milestones;

     (c) actual project costs versus budgeted project costs;

     (d) safety and environmental record of the construction
         project; and

     (e) the operational performance of the power plant.

Majority of the Constructive Incentives accruing are based on
safety, environmental and operational performance of the power
generating facility.  The Construction Incentives are provided to
eligible employees in lieu of participation in the individual
component of the Incentive Plan.  Thus, employees entitled to
receive Construction Incentives will not be entitled to the Mid-
Year Payout.

The eligible employees to receive the Construction Incentives are
critical to the success of the Debtors' construction projects.
In the first six months of 2003, the Debtors paid $687,734
incentives to 19 employees under the Construction Incentive Plan.
Although the Debtors currently have little construction activity,
the Debtors want to continue making payments in the ordinary
course of their operations.  Through September 2003, should
participating employees meet certain milestones, the Debtors
anticipate paying $228,712 in Construction Incentives.  Mr.
Phelan contends that this amount is minimal when compared to the
enormous costs associated with any potential construction delays.

                   Employee Retention Agreements

Recently, responsibilities of some of the Debtors' employees have
dramatically increased due to both internal and external factors,
including, but not limited to, various regulatory investigations,
class action lawsuits, audit and reaudit issues and increased
financial reporting requirements, resolution of which is
essential to the Debtors' restructuring efforts.  These
circumstances have not only placed severe pressure on certain
employees but have also heightened the employees' concerns
relating to job security.

To address these increased pressures and concerns, the Debtors
entered into various retention agreements with 67 employees it
judged as being individually and collectively critical to the
Debtors' restructuring efforts -- the Valued Employees.
Recognizing the importance of retaining the Valued Employees, the
Retention Agreements generally provide for payments to be made to
the Valued Employees at various intervals over a period of time
depending on the anticipated length of time the Valued Employees'
services are deemed necessary.

The Debtors seek interim approval to honor the Retention
Agreements with respect to those amounts becoming due within 50
days after the Petition Date to employees other than the Highly
Compensated Employees.  The Debtors also seek a hearing after the
formation of the Creditors' Committee to consider the Retention
Agreements on a final basis.

The Debtors believe that payments of the Retention Agreements
amounts are wholly appropriate given the "chaos" frequently
associated with the initial stages of a Chapter 11 case and the
ensuing increased attention that these Valued Employees will be
required to devote to the success of the Debtors' reorganization
efforts during this critical time.  Furthermore, the Debtors
believe that interim approval of the Retention Agreements with
respect to those payments due within the next 50 days balances
the Debtors' need to provide necessary certainty to their Valued
Employees that the amounts promised to them, and those that they
will continue to earn, will be paid, with the need to allow any
statutory committee of unsecured creditors appointed in these
cases to become fully informed with respect to payments not due
in the immediate term.

The total amounts due under the Retention Agreements through
September 2005 reach approximately $8,700,000.  The Debtors seek
interim authority to pay to 42 Valued Employees an aggregate
amount equal to $523,247, in amounts ranging from $2,975 to
$39,000 per employee as they come due in the ordinary course of
business pursuant to the terms of the Retention Agreements.

                  Reimbursable Business Expenses

Prior to the Petition Date and in the ordinary course of their
businesses, the Debtors reimbursed employees for certain business
expenses incurred in the scope of employment.  Based on
historical averages, approximately 700 employees incur expenses
monthly aggregating on average $850,000, relating to, among other
things, business-related travel expenses, business meals,
relocation, car rentals and a variety of miscellaneous expenses.

Mr. Phelan explains that all Reimbursable Expenses were incurred
on the Debtors' behalf in connection with the Debtors' employment
and in reliance on the understanding that the expenses would be
reimbursed.  The Debtors estimate that, as of the Petition Date,
the total amount owed is no more than $64,000 of Reimbursable
Expenses with no one employee estimated to receive in excess of
$10,000.

Although the Debtors believe that they are current on prepetition
Reimbursable Expenses, it is likely that a modest amount of
Reimbursable Expenses remain owing due to the lag time between
when the employee incurs an expense and when the employee
requests for reimbursement.  Accordingly, the Debtors seek to pay
Reimbursement Expenses in the ordinary course of business.

                         Employee Benefits

In the ordinary course of their business, the Debtors established
various employee benefit plans and policies that provide eligible
employees with medical, dental, prescription drugs, disability
and life insurance, employee savings and other similar benefits.

A. Employee Health Insurance Plans

     The Debtors maintain certain premium-based insurance policies
     that offer a variety of health care options.  The premiums
     are calculated annually and paid on a monthly basis for each
     participating employee at a predetermined rate.  The total
     monthly average cost of the premium-based Health Benefits is
     approximately $367,620 of which $313,530 is paid by the
     Debtors and the remainder is paid by the participating
     employees.

     The Debtors also maintain several self-insured health plans
     administered by Blue Cross/Blue Shield, Capital Care, Aetna,
     Optimum and United Healthcare -- the Self-Insured Plan
     Administrators.  Employees contribute to the cost of medical
     benefits, through direct payroll deductions that range from
     $2.80 to $80.18 per pay period depending on various factors,
     including the employee's location, plan selected and
     dependents covered.

     After a claim is filed with the Self-Insured Plan
     Administrators and processed, the Debtors, through the
     particular Self-Insured Plan Administrator, either:

     (a) reimburse the employee for the service costs; or

     (b) pay the health benefits provider for services rendered to
         the employee.

     Payments of the Self-Insured Claims are made by the Self-
     Insured Plan Administrators who are reimbursed from the
     Services' main reimbursement account.  Ordinarily, there is a
     lag time between the time when an employee submits a claim and
     the time when a claim is paid by the various Self-Insured Plan
     Administrators -- the Pipeline Claims.  Based on an average of
     the most recent months prior to the Petition Date, the
     projected Self-Insured Claims, including any Pipeline Claims,
     the Debtors paid in total $1,114,971 monthly.  Due to the
     historical lag in the payment of Pipeline Claims, the Debtors
     estimate that approximately $2,242,587 of accrued but unpaid
     Pipeline Claims remain owing as of the Petition Date.

B. Employee Life Insurance

     The Debtors provide all of their eligible full-time employees
     with fully funded life insurance.  The benefit amount is
     based on a multiple of the employee's base compensation up to
     a $500,000 maximum benefit.  The Debtors make monthly payments
     of $66,141 on the life insurance.

C. Dental Coverage

     The Debtors' employees are eligible for dental insurance
     coverage, which cost is shared by both the participating
     employee and the Debtors.  The premiums are calculated
     annually and paid monthly in arrears for each participating
     employee at a predetermined rate.  The total monthly average
     cost of the Dental Benefits is $141,758 of which $122,458 is
     borne by the Debtors and the remainder is paid by the
     participating employees.

D. Long Term Disability Insurance

     The Debtors provide certain of their employees benefits
     under a long-term disability insurance program -- the LTD
     Benefits.  The LTD Benefits are 60% to 65% of the employee's
     monthly earnings less any deductible sources of income.  The
     total monthly average cost of the LTD Benefits is about
     $52,431, of which approximately $37,867 is borne by the
     Debtors with the remainder paid by the participating
     employees.

E. Business Travel Accident Insurance; Employee Assistance Plan
     and Vision Care -- the Miscellaneous Benefits

     The Debtors provide their employees business travel insurance
     -- the BTA Benefits -- benefits under an Employee Assistance
     Plan and benefits under a Vision Care Plan.  The Debtors'
     total monthly average cost of Miscellaneous Benefits is
     approximately $10,130.

                    Additional Welfare Plans

The Debtors' employees are also eligible to participate in a
number of group welfare plans, the cost of which is borne fully
by the employees.  These plans include Contributory Life
Insurance, Enhanced Vision Care, Accidental Death and
Dismemberment Plan, Accident and Sickness Insurance and a
Flexible Medical Spending or Dependent Care Account.  The Debtors
deduct amounts owing for each of these additional welfare plans
directly from each employee's paycheck and forward the amounts to
the various third party providers on the employees' behalf.

               Withholdings From Employee Paychecks

The Debtors deduct certain amounts from their employees'
paychecks to pay the employee portion of health and welfare
insurance premiums, college bound funds, flexible medical
spending amounts, 401(k) deductions and other miscellaneous
amounts.  The Employee Deductions are property of the Debtors'
employees, which the Debtors forward to third-party recipients at
varying times.  It is likely that funds have been deducted from
the employee wages but have not yet been forwarded to the
appropriate third-party recipients.  Thus, the Debtors seek the
Court's authority to forward the Employee Deductions to the
appropriate parties.

                      401(k) Contributions

The Debtors offer all eligible non-Union employees an opportunity
to participate in a 401(k) plan.  Under the 401(k) Plan, the
Debtors' eligible employees may contribute anywhere from 1% to
30% of base salary through before-tax or after-tax payroll
deduction.  The Debtors established a matching program to induce
all employees to participate in this valuable savings opportunity
-- the Non-Union Matching Obligation.  The Non-Union Matching
Obligation is 75% of the first 6% of wages an employee
contributes to the 401(k) Plan, which is usually satisfied on
each applicable pay date.

Separately, the Debtors offer all eligible Union Employees the
chance to participate in a Union 401(k) Plan.  Under the Union
401(k) Plan, the Debtors' eligible Union Employees may contribute
anywhere from 1% to 30% of base pay through before-tax or after-
tax payroll deduction, depending on the collective bargaining
units of which the employee is a participant.

A modest and limited matching program is also implemented -- the
Union Matching Obligations.  The Union Matching Obligation and
the eligibility to participate vary with each collective
bargaining unit and includes for certain Union Employees.

On a monthly average, the Debtors pay, on account of the Matching
Obligations, $510,500.  The Debtors estimate that as of the
Petition Date, the total amounts that will be owing on account of
the Matching Obligations will be less than $255,520.

                    Supplemental Benefit Plan

Certain employees participate in a supplemental benefit plan
designed to provide certain retirement and other deferred
compensation benefits for a select group of management or highly
compensated employees, which are not otherwise payable or cannot
be provided under the Pension Plan and 401(k) Plan and to
compensate the lost benefits from the employee's participation in
the Deferred Compensation Plan.  As of the Petition Date, the
Debtors estimate $550,000 in potential liabilities resulting from
obligations accruals under the Supplemental Benefit Plan owed to
112 employees.  Payment of Supplemental Benefits becomes due only
upon either voluntary or involuntary termination or upon death or
disability of the participating employee.

Accordingly, the Debtors seek to continue paying dues under the
Supplemental Benefit Plan for all postpetition employees except
the Highly Compensated Employees.

                          Pension Plan

According to Mr. Phelan, certain employees participate in a
pension plan wherein the Debtors contribute funds to a trust that
distributes a pension to the participating employees at different
levels at various retirement dates.  For the year 2003, on a
quarterly basis, the Debtors contributed $1,886,916 to the trust,
based on estimates of the annual funding requirements.  This
amount is owing as of the Petition Date.

Furthermore, on an annual basis, in September, the Debtors true
up the required annual minimum funding requirements for the prior
plan year under the Pension Plan.  The Debtors estimate that they
will be required to make a true-up payment amounting to
$4,667,649 for the 2002 plan year.

Mr. Phelan notes that non-payment of the Pension Contributions
could potentially have a debilitating effect on the Debtors'
reorganization efforts, including Pension Benefit Guaranty
Corporation's involuntary termination of the Pension Plan in
addition to interest, administrative burden and penalties
imposed.

                   Profit Sharing Contribution

Non-Union employees who are eligible to participate in the 401(k)
Plans but not eligible to participate in the Pension Plan may be
eligible for a profit sharing contribution from the Debtors in
the form of cash invested in accordance with the individual
employee's investment allocation each quarter equal to 3% of the
employee's eligible compensation for that quarter.  At the
Debtors' discretion, the employees may further be eligible for an
additional annual Employee Profit Sharing Contribution ranging
from 0% to 7% of the employee's eligible annual compensation,
again, invested in accordance with the individual employee's
investment allocation.  On a quarterly basis, the Debtors
contribute about $750,000 for the Non-Union Profit Sharing
Contributions.

Union employees who participate in a defined benefit plan may be
eligible for an annual discretionary profit sharing contribution
from the Debtors.  For the year ended December 31, 2002, the
Union Employee Profit Sharing Contribution was $57,155.

                        Severance Plan

The Debtors maintain a severance plan, subject to ERISA, to non-
union employees as part of their benefits package.  Non-Union
employees who lose their jobs involuntarily receive the Basic
Severance package.  Additionally, employees who agree to sign a
waiver and release of claims against the Debtors receive enhanced
severance benefits.

Under the Basic Severance Plan, eligible employees receive four
weeks straight time pay, one month company-paid medical coverage
via COBRA for employees and dependents currently enrolled in the
Debtors' medical plan and who elect COBRA medical coverage, three
months company-paid access to the Employee Assistance Program via
COBRA for employees who elect COBRA EAP coverage, and
outplacement assistance.

Under the Enhanced Severance Plan, eligible employees receive an
additional four weeks straight time pay, plus, additional
severance pay based on years of service; the cash equivalent of
six months of medical and life insurance premiums; additional
months of access to COBRA coverage up to a total of 36 months
based on years of service; extended stock option treatment;
payment of incentive awards and bonuses accrued or owed pursuant
to the employee's incentive compensation plan or Retention
Agreement, as the case may be; and with respect to those
employees who were relocated in the six months prior to their
termination, relocation expenses associated with relocating to
their original location.

                     Workers' Compensation

In the ordinary course of business, the Debtors maintain workers'
compensation coverage under which they are liable to current and
former employees.  The Debtors' ordinary expenses for workers'
compensation include uninsured claim expenses and certain
administrative and claims processing costs.

Currently, the Debtors purchase premium-based workers'
compensation insurance from The Travelers Indemnity Company and
The Phoenix Insurance Company and with Liberty Mutual.  The
Debtors also participate in the monopolistic state fund in
Washington State, which requires quarterly payments.

The Debtors' workers' compensation insurance with Travelers has a
$500,000 per incident deductible per accident and per person for
disease and a $1,985,000,000 annual aggregate deductible.  To
secure the Debtors' obligations under the workers' compensation
insurance, the Debtors posted an $880,000 letter of credit with
Travelers.  No letter of credit is required under the Liberty
Mutual arrangement.

The Debtors' monthly payment on account of their premium-based
workers' compensation insurance is about $49,000.  As of the
Petition Date, the Debtors estimate that they will ultimately be
obligated to pay $700,000 for the prepetition Workers'
Compensation Obligations.

In some states, Mr. Phelan notes, if the Debtors fail to pay the
Workers' Compensation Obligations timely pay the workers'
compensation obligation, then the applicable state agency may
interfere and assert a priority claim against the Debtors for
reimbursement, penalties or assessments.  In addition, some
applicable state agencies may challenge the Debtors' authority to
continue to do business for failure to remain current on workers'
compensation claims.  Accordingly, the Debtors seek to honor
their Workers' Compensation Obligations in the ordinary course.

                  Alternative Service Providers

In the ordinary course of business, the Debtors utilize certain
service providers, including health maintenance organization,
medical and dental plan and 401(k) administrators --
Administrative Service Providers.  Mr. Phelan says that the
continued support of the Administrative Service Providers are
crucial to the Debtors' ability to maintain accurate and
meaningful books and records, including, but not limited to,
books and records reflecting the Debtors' Employee Benefit
Obligations.  The total monthly average cost of service is
$105,000.

                        Expatriate Policy

In the course of their businesses, the Debtors transferred
certain employees overseas to work in foreign countries on their
behalf.  To facilitate this process, the Debtors maintain an
expatriate policy that provides for various benefits to these
expatriated employees to ease the burden associated with the
Expatriated Employee and his or her family being relocated
overseas.

Pursuant to the Expatriate Policy, in addition to the typical
benefits enjoyed by domestic full-time employees, the Debtors
provide to Expatriated Employees, among other things:

     -- payment of relocation expenses,

     -- cross-cultural orientation and foreign language training,

     -- goods and services differential based on the cost of
        living of a particular country,

     -- foreign housing costs,

     -- utility allowance,

     -- education allowance to cover the cost of the dependents'
        education,

     -- an incidental allowance equal to one month base pay,

     -- family vehicle differential allowance,

     -- payment of personal property and liability insurance,

     -- tax equalization benefits, and

     -- annual home leave allowance.

Currently, Mr. Phelan reports, the Debtors have 11 Expatriated
Employees who are covered by the Expatriate Policy.  As of the
Petition Date, the Debtors owe about $130,000 under the
Expatriate Policy, with no one employee owed more than $25,000.

                       Relocation Program

According to Mr. Phelan, the Debtors also provide relocation
benefits to certain employees requested to move under the
Relocation Program.  Pursuant to the Relocation Program, the
Debtors provide to Relocated Employees, among other things,
reimbursement for house-hunting expenses, miscellaneous expense
allowance ranging from one half to one month salary, home sale
assistance and loss protection, payment of lease cancellation
costs, shipment and storage of household goods and assistance to
employee's spouse in career transition.  Currently, the Debtors'
30 employees are participating in the Relocation Program.  The
Debtors believe that they are substantially current on all
Relocation Costs as of the Petition Date.

                   Temporary Relocation Program

For those employees who will only be temporarily relocated more
than 50 miles from their home for a minimum of 12 months, the
Debtors provide the Temporary Relocation Program.  Pursuant to
the Temporary Relocation Program, the Debtors provide to affected
employees, among other things, reimbursement for house-hunting
expenses, shipment and storage of household goods, assistance to
employee's spouse in career transition and a monthly lump sum
based on 25% of the employee's salary and costs associated with
relocating at the conclusion of the assignment.  Currently, seven
employees are participating in the Temporary Relocation Program.
On a monthly average, the Debtors pay $12,120 on account of the
monthly lump sums based on 25% of the employee's salary.  The
Debtors are current in their payments of all Relocation Costs.

                         Military Leave

The Debtors maintain a military leave policy in compliance with
and in addition to the Uniform Services Employment and
Reemployment Rights Act of 1994 under which various employees who
are called into service by the United States military receive
continued compensation while performing active duty services.
Pursuant to the Military Leave Policy, employees on military
leave receive differential pay for the difference between their
base pay received from the Debtors and the base military pay for
a period up to 12 months.  Furthermore, eligible employees are
entitled to continue participating in certain benefit programs
the Debtors offered including among other things, continued pro-
rata participation in the Incentive Compensation Plan.
Currently, five of the Debtors' employees are receiving benefits
under the Military Leave Policy amounting to $8,927 per month.
The Debtors wish to continue paying the eligible employees under
the Military Leave Policy in the ordinary course of their
businesses.

                   Employment Referral Policy

Mr. Phelan reports that instead of paying recruiters, the Debtors
provide a formal in-house process for referral of applicants for
open positions.  Under the Employee Referral Policy, current
employees are eligible for monetary awards if they refer
applicants that are subsequently hired and provide a satisfactory
performance at the end of a six-month probationary period.  These
awards range between $800 and $1,500 per referred employee
depending on the status of the eligible employee.  The Debtors
estimate that as of the Petition Date, $7,500 has accrued but has
not yet come due under the Employee Referral Policy.

                           Tuition

The Debtors provide their eligible employees with tuition
reimbursements in amounts up to $5,250 per employee per year.
The tuition reimbursements are paid to an eligible employee upon
successfully completing the reimbursable course.  During 2002,
the Debtors paid $126,771 in eligible tuition reimbursement.  The
Debtors anticipate that they will pay a similar amount to
eligible employees during the remainder of the year.

                        Miscellaneous

The Debtors may determine that there are additional de minimis
prepetition obligations, which are not identified in this
request.  Accordingly, the Debtors seek to pay any additional
obligations up to a $150,000 aggregate amount upon five business
days' notice to counsel of any creditors' committee, without
objection.

                        *     *     *

Judge Houser authorizes the Debtors, but does not direct them, to
pay:

     (a) amounts owed to the Debtors' employees on account of
         deficiencies in the Special Payroll;

     (b) amounts awarded under the Incentive Plan as they come due
         in the ordinary course of business;

     (c) amounts awarded under the 2002 Trading and Marketing
         Incentive Plan;

     (d) amounts awarded under the Special Achievement Award
         Policy as they come due in the ordinary course of
         business;

     (e) amounts awarded under the Construction Incentive Plan as
         they come due in the ordinary course of business;

     (f) retention payments under the Retention Agreements as they
         come due in the ordinary course of business, except for
         Highly Compensated Employees;

     (g) the Reimbursable Expenses and make further payments in
         the ordinary course of business;

     (h) the Employee Benefits and make further payments in the
         ordinary course of business;

     (i) directly to third parties, applicable Deductions,
         including, but not limited to Employee Deductions;

     (j) the Matching Obligations in respect of the Debtors' 401(k)
         Plan and make further payments in the ordinary course;

     (k) the Pension Plan Contributions in respect of the Debtors'
         Pension Plan as they come due in the ordinary course;

     (l) the Profit Sharing Contributions in respect of the
         Debtors' Profit Sharing Plan as they come due in the
         ordinary course;

     (m) obligations under the Severance Plans as they arise in the
         ordinary course, except for Highly Compensated Employees;

     (n) the Workers' Compensation premiums and make further
         payments in the ordinary course;

     (o) the Workers' Compensation Obligations and make further
         payments in the ordinary course;

     (p) the Relocation Costs and make further payments in the
         ordinary course;

     (q) the Temporary Relocation Costs and make further payments
         in the ordinary course;

     (r) the Military Leave Costs and make further payments in the
         ordinary course;

     (s) amounts owed in connection with Tuition claims; and

     (t) any additional obligations up to a $150,000 aggregate,
         without further Court order, provided that no objection
         is received from the creditors' committee after five
         business days' notice.

Furthermore, on an interim basis pending a final hearing, the
Court authorizes the Debtors to:

     -- honor the Retention Agreements with respect to amounts
        becoming due within 50 days after the Petition Date; and

     -- continue to pay Supplemental Benefits under the
        Supplemental Benefit Plan for all eligible employees,
        except with respect to Highly Compensated Employees.

Banks are directed to honor all checks, drafts or payments
requests without regard to the date the checks are issues. (Mirant
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


MORTGAGE CAPITAL: Fitch Takes Rating Actions on 1996-MC1 Notes
--------------------------------------------------------------
Mortgage Capital Funding, Inc.'s commercial mortgage pass-through
certificates, series 1996-MC1, $19.3 million class D is upgraded
to 'AAA from 'AA-' by Fitch Ratings. Fitch also upgrades the
following classes:

         -- $16.9 million class E to 'AAA' from 'A-';
         -- $7.2 million class F to 'AA+' from 'BBB+';
         -- $32.6 million class G to 'BBB+' from 'BB+';
         -- $18.1 million class H to 'BB' from 'B';
         -- $3.6 million class J to 'B' from 'B-'.

In addition, Fitch affirms the following classes:

         -- $125.8 million class A-2B 'AAA';
         -- $14.5 million class B 'AAA';
         -- $31.4 million class C 'AAA';
         -- Interest-only class X-2 'AAA'.

Fitch does not rate the $12.4 million class K certificates. The
upgrades follow Fitch's annual review of the transaction, which
closed in July 1996.

The upgrades reflect the increased subordination levels as a
result of amortization and loan payoffs. As of the July 2003
distribution date, the pool's aggregate collateral balance has
been reduced by approximately 41%, to $281.7 million from $482.4
million at closing. Fifty two of the original 162 loans have paid
off, including 17 since last year's review.

GMAC Commercial Mortgage Corp., the master servicer, collected
year-end 2002 financials for 81% of the pool balance. Based on the
information provided the resulting YE 2002 weighted average debt
service coverage ratio is 1.53 times, compared to 1.46x at
issuance for the same loans.

Currently, three loans (3.7%) are in special servicing. The
largest loan is secured by two Kmart properties located in
Elizabeth City (1.1%) and Rocky Mount (1.1%), NC. The loan was
transferred to special servicing after the borrower for the
Elizabeth City property informed the master servicer that Kmart
planned to vacate the property. Possible discounted payoff of this
property is being discussed and a loss is possible. A loss is also
possible on a loan collateralized by a healthcare property in
Longwood, FL (0.45%). The loan is 90+ days delinquent.

Fitch applied various hypothetical stress scenarios including the
expected losses on the above loans. Even under these stress
scenarios, the resulting subordination levels were sufficient to
upgrade the designated classes. Fitch will continue to monitor
this transaction, as surveillance is ongoing.


NAT'L BEEF PACKING: S&P Assigns BB- Corporate Credit Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit rating to beef processor National Beef Packing Co. LLC. At
the same time, Standard & Poor's assigned its 'B' rating to the
firm's proposed $160 million senior unsecured notes due 2011. The
company will use the proceeds of the senior unsecured notes along
with a $265 million senior secured credit facility (unrated), for
part of its $472 million refinancing and acquisition of Farmland
Industries' 71.2% ownership in Farmland National Beef Packing Co.

The senior unsecured notes are rated two notches below the
corporate credit rating, reflecting their junior position to the
large amount of secured debt in the capital structure.

As part of Farmland Industries Inc.'s bankruptcy reorganization
plan, Farmland, the current majority owner (71.2%) of Farmland
National Beef Packing Co. (the predecessor of National Beef
Packing Co.), is selling its ownership interest in National Beef.
Additionally, the current minority owner (28.8%), US Premium Beef
Ltd. (unrated), a producer-owned cooperative that raises cattle
for production, is rolling over its equity and making an
additional cash contribution for a 53% equity stake in the
new National Beef. Senior management and other outside investors
will own the remaining 47% of the firm.

The expected closing date is in early August 2003.

The outlook on the Kansas City, Missouri-based National Beef is
stable.

"The ratings reflect National Beef's debt levels, which are
relatively high for a largely commodity-oriented protein processor
with low margins operating in a very challenging environment,"
said Standard & Poor's credit analyst Ronald Neysmith. "Somewhat
mitigating factors are the company's niche position in value-added
cuts, a broad customer base, experienced management team, and the
high barriers for competitors entering the industry," the analyst
continued.

National Beef is the fourth-largest beef processing company in the
U.S., accounting for about 10.5% of the U.S.-fed cattle processed
in 2002. The company processes, packages, and delivers fresh beef
for sale to customers in the U.S. and in international markets.
Products include boxed beef and value-added beef under its own
brands and animal by-products from processing, such as hides and
offal. Branded products include Certified Premium Beef, Black
Angus Beef, and Black Canyon Angus Beef. The company markets
products to retailers, distributors, foodservice providers, and
the U.S. military.

The sector is inherently volatile, with results affected by
several factors outside of the firm's control, including weather,
supply of other proteins, and disease. Still, the company focuses
on its value-added business segment, which has represented about a
quarter of sales and over half of EBITDA, providing some cushion.

Standard & Poor's expects that National Beef will continue to
maintain its solid market position and strengthen credit measures
in the intermediate term.


NOVA CHEMICALS: Second Quarter 2003 Results Dips in Red Ink
-----------------------------------------------------------
NOVA Chemicals Corporation reported net income to common
shareholders of $75 million for the second quarter of 2003. This
included $117 million after-tax of unusual items related mainly to
the sale of non-strategic assets.

NOVA Chemicals' loss to common shareholders before unusual items
was $42 million for the quarter. This compares to $4 million of
net income to common shareholders before unusual items in the
first quarter of 2003 and a loss to common shareholders before
unusual items in the second quarter of 2002 of $22 million.

"Demand for our products declined in the quarter due to a
combination of a global industrial production(1) downturn and
customer inventory depletion. Operating performance in the second
quarter suffered because reduced demand limited price increases
and pricing did not keep pace with higher feedstock costs," said
Jeff Lipton, NOVA Chemicals' President and Chief Executive
Officer.

"Despite the very difficult market conditions, we substantially
improved our liquidity and increased our financial flexibility
this quarter by raising close to $600 million through the sale of
our interests in two non-strategic assets," Lipton continued. "We
sold our entire 37% interest in Methanex Corporation for $462
million and our 50% share in the Fort Saskatchewan Ethylene
Storage Facility for $135 million."

The Olefins/Polyolefins business reported a net loss of $5 million
in the second quarter, compared to first quarter net income of $4
million. Polyethylene price increases were more than offset by
higher feedstock costs. Ethylene and polyethylene sales volumes
declined slightly from the first quarter.

The Styrenics business reported a second quarter net loss of $42
million compared to a first quarter net loss of $17 million.
Volumes were down sharply from the first quarter and feedstock
costs, particularly benzene, increased more than polymer prices.

Equity earnings from Methanex declined to $12 million in the
second quarter from $25 million in the first quarter. NOVA
Chemicals stopped equity accounting for Methanex's earnings on
June 6, 2003.

                          Review of Operations

                          Olefins/Polyolefins

                          Second Quarter 2003

The Olefins/Polyolefins business reported a net loss of $5 million
in the second quarter, compared to net income of $4 million in the
previous quarter. Realized polyethylene prices rose, but were more
than offset by the flow through of higher feedstock costs and
lower ethylene sales prices. In addition, fixed costs increased
due to a seasonal increase in maintenance costs, a higher Canadian
dollar, and a power outage in the Sarnia, Ontario area that
reduced the output from our Corunna ethylene plant. Combined sales
volumes for ethylene and polyethylene were down 1%.

The net loss of $5 million in the second quarter of 2003 is
slightly larger than the net loss of $3 million in the second
quarter of 2002.

Feedstocks and Ethylene

Benchmark feedstock costs fell in the second quarter, with average
NYMEX natural gas prices down 17% and average WTI crude oil prices
down 15%. However, Olefins/Polyolefins feedstock costs were up as
the impact of higher crude oil costs from first quarter purchases
flowed through cost of sales in the second quarter.

Our Joffre, Alberta ethane-based crackers averaged approximately 4
cents per pound cash-cost advantage over similar U.S. Gulf Coast
(USGC) ethylene plants during the quarter. This is similar to the
advantage for the last five quarters, but remains lower than our
long-term historical average of 6 cents due to a depressed U.S.
Gulf Coast ethane market.

Polyethylene

Second quarter weighted-average benchmark polyethylene prices were
up 5 cents per pound from the first quarter of 2003. Benchmark
polyethylene prices rose a total of 11 cents per pound from year
end 2002, before falling back by approximately 4 cents per pound
by the end of the second quarter, as customers saw no basic demand
improvement and worked off inventory.

NOVA Chemicals' 5 cents per pound polyethylene price increase,
originally announced for Mar. 15, 2003, was delayed to Aug. 1,
2003, at which time NOVA Chemicals announced it will be
implementing the 5 cents per pound increase, without delay and
without price protection.

Total polyethylene sales volumes for the second quarter decreased
2% from the first quarter of 2003 and were flat with the second
quarter of 2002. North American volumes were down 1% from the
first quarter and international volumes were down 8%. Sales to
China were down 22%, due to very weak demand and inventory
reductions.

Advanced SCLAIRTECH(TM) Polyethylene Technology

Our Advanced SCLAIRTECH technology polyethylene plant continued to
step up production. We sold 155 million pounds of Advanced
SCLAIRTECH technology resins in the second quarter. New rotational
and injection molding products have been very well received.

Implementation of announced price increases depends on many
factors, including feedstock costs, market conditions and the
supply/demand balance for each particular product. Successful
price increases are typically phased in over several months, vary
from grade-to-grade, and can be reduced in magnitude during the
implementation period. Benchmark price indices sometimes lag price
increase announcements due to the timing of publication.

                     Review of Operations

                          Styrenics

                      Second Quarter 2003

The Styrenics business reported a net loss of $42 million in the
second quarter, compared to a net loss of $17 million in the first
quarter of 2003. Styrenics costs were up as higher-cost feedstocks
from first quarter purchases flowed through in the second quarter,
more than offsetting polymer price increases. NOVA Chemicals'
product prices increased 4% on average, while feedstock costs rose
close to 20%.

Total sales volume was down 9% and styrenic polymer volume was
down 12% from the first quarter with the majority of this volume
decline occurring in Europe. Global styrenic polymer markets were
down by similar rates. Our styrene monomer sales were down just
slightly from the first quarter.

Average prices in the second quarter increased in every polymer
product line. These price increases, however, failed to offset the
increase in feedstock costs. NOVA Chemicals realized an
approximate 5 cents per pound increase in the variable cost of
styrene monomer in the second quarter over the first quarter. NOVA
Chemicals' second quarter benzene costs were approximately 50
cents per gallon higher than first quarter costs, despite lower
second quarter benchmark benzene prices since the company uses the
first-in, first-out (FIFO) method of valuing inventory and has a
lag in the flow through of benzene costs. A 10 cents per gallon
change in the cost of benzene results in about a 1 cent per pound
change in the variable cost of producing styrene monomer.

The $31 million decline from the net loss of $11 million in the
second quarter of 2002 is primarily a result of higher feedstock
costs and lower volumes, which more than offset higher product
prices.

Styrene Monomer

On June 11, 2003, NOVA Chemicals had an explosion, which resulted
in a fire in the ethylbenzene manufacturing unit at its Bayport,
Texas, styrene monomer production facility. The fire was quickly
extinguished with no personal injuries and minimal environmental
impact. NOVA Chemicals has fully supplied all global styrene
monomer and polymer contract customers, and expects to continue to
meet all contractual supply requirements for the duration of the
outage. The styrene monomer unit at Bayport is expected to resume
operation in the third quarter using contracted ethylbenzene.
Preliminary indications are that the Bayport facility will be
fully operational in approximately six months. We expect to incur
about $6 million after-tax per quarter in additional costs until
we return to normal operations.

An unusual charge of $13 million (before-tax) was recorded in the
second quarter as a result of the explosion. The charge relates
primarily to the amount of property damage not covered by
insurance.

Industry wide styrene operating rates in North America were very
low in the second quarter. Domestic demand was soft and export
sales were minimal. The USGC average styrene spot price fell to 28
cents per pound in the second quarter from 36 cents per pound in
the first quarter.

Benchmark benzene feedstock costs remained high early in the
second quarter, before falling off in May and June. NOVA
Chemicals' second quarter styrene monomer margins were negatively
impacted as higher feedstock costs from Feb. through Apr. flowed
through. Contract styrene monomer pricing fell rapidly during the
quarter, with the benchmark styrene monomer price falling from 45
cents at the start of the second quarter to 38 cents by the end of
the quarter. On June 19, 2003, NOVA Chemicals announced a North
American styrene contract price increase of 4 cents per pound
effective July 1, 2003.

In Europe, styrene contract prices were 40 cents per pound in the
second quarter, up from the first quarter price of 36 cents per
pound. The third quarter 2003 price settled at 30 cents per pound
in Europe, where the current practice is to settle industry-wide
styrene prices quarterly.

Solid Polystyrene

Average North American solid polystyrene margins fell from the
first quarter as a result of higher feedstock costs. NOVA
Chemicals' North American sales volumes fell 6% from the first
quarter due to industry-wide destocking.

NOVA Chemicals' immediate price adjustment of 4 cents per pound on
North American SPS and high performance styrenics, implemented on
Mar. 1, 2003, was removed on May 1, 2003. NOVA Chemicals' 4 cents
per pound North American polystyrene price increase originally
announced for Apr. 1, 2003 was delayed under a temporary voluntary
allowance, as a result of short-term demand weakness in the North
American markets. NOVA Chemicals has reserved the right to remove
this TVA and implement the 4 cents per pound increase, without
delay and without price protection, at any time without notice.

European SPS prices did not keep pace with increased feedstock
costs in the second quarter and volume fell off substantially due
to reduced end use demand and inventory draw downs.

Expandable Polystyrene

NOVA Chemicals' second quarter North American EPS prices rose, but
were more than offset by higher feedstock costs. Sales volumes
fell as a result of industry-wide destocking and poor demand in
the packaging and construction markets.

In Europe, rising feedstock costs also outpaced higher EPS prices.
European EPS demand also fell because of weak economic conditions
and inventory consumption.

Implementation of announced price increases depends on many
factors, including feedstock costs, market conditions and the
supply/demand balance for each particular product. Successful
price increases are typically phased in over several months, vary
from grade-to-grade, and can be reduced in magnitude during the
implementation period. Benchmark price indices sometimes lag price
increase announcements due to the timing of publication.

On May 21, 2003, NOVA Chemicals announced the sale of its 46.9
million shares of Methanex. As part of this transaction, NOVA
Chemicals entered into an agreement with Methanex and a syndicate
of underwriters for the secondary offering of 37.9 million shares
at a price of Cdn. $13.30 per share or U.S. $9.85 per share for
proceeds of U.S. $373 million. This transaction closed on June 5,
2003. The remaining 9 million shares owned by NOVA Chemicals were
repurchased by Methanex on June 30, 2003, at U.S. $9.85, for
proceeds of U.S. $89 million. Total net proceeds received by NOVA
Chemicals from these two transactions was $441 million, after
deducting underwriting fees, legal costs and foreign exchange
differences. This resulted in a pre-tax gain of $29 million and an
after-tax gain of $61 million. The transaction was completed with
no cash taxes payable. A future income tax recovery of $32 million
was recorded to reverse income taxes provided for on Methanex
related equity earnings in prior periods.

NOVA Chemicals' original investment in Methanex was $265 million.
NOVA Chemicals has no remaining equity interest in Methanex.

During the second quarter, NOVA Chemicals' equity investment in
Methanex generated earnings of $12 million (after-tax), compared
with earnings of $25 million (after-tax) in the first quarter of
2003 and earnings of $3 million (after-tax) in the second quarter
of 2002. NOVA Chemicals accounted for its interest in Methanex
under the equity method until June 5, 2003.

        Sale of Fort Saskatchewan Ethylene Storage Facility

On June 24, 2003, NOVA Chemicals sold its 50% share of the Fort
Saskatchewan Ethylene Storage Facility in Alberta, Canada to
Pembina Pipeline Income Fund for gross proceeds of $135 million
(net proceeds of $123 million after deducting transaction costs).
This resulted in a $76 million gain before-tax ($64 million after-
tax). The total gain on this transaction was $114 million, of
which $38 million has been deferred and will be amortized over the
20-year term of the storage contract with Pembina. This deferral
will partially offset NOVA Chemicals' annual costs associated with
this new Fort Saskatchewan ethylene storage contract.

At June 30, 2003, NOVA Chemicals' debt to total capitalization
ratio improved to 40.0% from 43.5% at Mar. 31, 2003, due to
decreases in debt and increases in equity. Debt decreased as
amounts drawn on the revolving credit line were repaid from asset
sale proceeds. The increase in equity reflects the higher value of
investments in foreign operations as a result of higher foreign
currency exchange rates, primarily the Canadian dollar and Euro,
as well as gains from asset sales.

NOVA Chemicals' funds from operations were $12 million for the
second quarter of 2003, down $57 million from the first quarter of
2003, primarily due to the decline in earnings from operations.

Operating working capital decreased by $23 million in the second
quarter of 2003 mainly due to lower feedstock costs and declining
sales levels. NOVA Chemicals assesses its progress in managing
working capital through a Cash Flow Cycle Time measure. CFCT is a
metric that measures working capital from operations in terms of
the number of days sales (calculated as working capital from
operations divided by average daily sales). This metric helps us
determine what portion of working capital changes result from
factors other than price movements. CFCT remained unchanged at 27
days as of June 30, 2003, when compared with Mar. 31, 2003.

NOVA Chemicals sold its investments in Methanex Corporation and
the Fort Saskatchewan Ethylene Storage Facility for net proceeds
of $564 million. The cash proceeds were used to repay amounts
drawn on the revolving credit facility and fund other current
operations. Cash remaining on the balance sheet at June 30, 2003
was $440 million.

Capital expenditures were $29 million in the second quarter of
2003, compared to $14 million in the first quarter of 2003. NOVA
Chemicals expects total capital spending of approximately $125 to
$150 million in 2003.

                            Financing

Prior to June 5, 2003, NOVA Chemicals had a revolving credit
facility of $375 million. Upon the sale of our interest in
Methanex, the $50 million unsecured portion of this facility was
eliminated and the 3-year secured portion, expiring Apr. 1, 2006,
was reduced to $300 million. Also upon the sale of our interest in
Methanex, the minimum Consolidated Shareholders' Equity financial
covenant fell to $1 billion from $1.2 billion. All other terms and
covenants are unchanged. As of July 23, 2003, NOVA Chemicals had
no borrowings under its credit facility, except for operating
letters of credit of $43 million. NOVA Chemicals' operating
results and financial position were within the required financial
covenants in the second quarter of 2003.

The Aug. 15, 2026, 7%, $150 million debentures are redeemable at
the option of each of the holders on Aug. 15, 2003 at par. By
July 15, 2003, NOVA Chemicals received notice from all of the
holders of these debentures that they intend to require NOVA
Chemicals to redeem these debentures on Aug. 15, 2003. The
redemption will be made from available cash. Accordingly, these
debentures are classified as current borrowings. On a pro forma
basis, after giving effect to the repayment of $150 million on
Aug. 15, 2003, NOVA Chemicals' debt to total capitalization ratio
would be 36.9%. If we were to net the cash remaining against debt,
our total debt to capitalization ratio would be 30.1%.

On July 14, 2003, NOVA Chemicals renewed the availability of its
$195 million accounts receivable securitization program until July
12, 2004.

                          Total Return Swap

During the second quarter, NOVA Chemicals amended the total return
swap agreement. The amendments include the extension of the
termination date and the date the exchange rate will be fixed from
Oct. 1, 2003 to Mar. 15, 2005 and the reduction of the closing
price of the NOVA Chemicals share price at which the counterparty
rights may be triggered from $15.00 to $12.00.

On Apr. 1, 2003, NOVA Chemicals paid $37 million in cash to reduce
the net amount of the swap to $126 million. As of June 30, 2003
the total cash margin on deposit was $65 million.

                            FIFO Impact

NOVA Chemicals uses the first-in, first-out method of valuing
inventory. Most of our competitors use the last-in, first-out
method. Because we use FIFO, a portion of the lower cost second
quarter feedstock purchases are included in the value of inventory
and have not yet flowed through the income statement as they would
have under the LIFO methodology. Accordingly, this lower cost
inventory will be expensed in the third quarter of 2003 as the
inventory is sold. We have estimated that net income was
approximately $20 million lower in the second quarter and $20
million higher in the first quarter compared to what it would have
been had NOVA Chemicals followed the LIFO method of accounting for
inventory.

                     Outstanding Hedge Positions

NOVA Chemicals maintains a hedging program to manage its feedstock
costs. Outstanding natural gas and crude oil hedge positions had
an estimated fair-market value of $18 million ($5 million net of
crystallized positions) at June 30, 2003. There was no material
impact on earnings from positions realized in the second quarter.

NOVA Chemicals concluded its Canadian dollar hedging program in
the first quarter of 2003.

                          *     *     *

As reported in Troubled Company Reporter's May 29, 2003 edition,
Standard & Poor's Rating Services assigned its 'BB+' rating to
NOVA Chemicals Corp.'s proposed US$200 million senior unsecured
notes due 2011. At the same time, its 'BB+' long-term corporate
credit rating on the company was affirmed.

The outlook is positive.


OMEGA HEALTHCARE: Board Declares Preferred Share Dividends
----------------------------------------------------------
Omega Healthcare Investors, Inc.'s (NYSE:OHI) Board of Directors
declared a full catch-up of its cumulative, unpaid dividends for
all classes of preferred stock to be paid August 15, 2003 to
preferred stockholders of record on August 5, 2003. In addition,
the Board declared the regular quarterly dividend for all classes
of preferred stock to be paid on August 15, 2003 to preferred
stockholders of record on August 5, 2003.

Series A and Series B preferred stockholders of record on
August 5, 2003 will be paid dividends in the amount of
approximately $6.36 and $5.93 per preferred share, respectively,
on August 15, 2003. The Company's Series C preferred stockholder
will be paid dividends of approximately $27.31 per Series C
preferred share on August 15, 2003. The liquidation preference for
the Company's Series A, B and C preferred stock is $25.00, $25.00
and $100.00 per share, respectively, excluding cumulative unpaid
dividends. Total dividend payments for all classes of preferred
stock are approximately $55.1 million.

The table below sets forth the per share dividends payable on
August 15, 2003 to holders of record of preferred stock as of
August 5, 2003. Cumulative unpaid dividends represent unpaid
dividends accrued for the period from November 1, 2000 through
April 30, 2003. Regular quarterly dividends represent dividends
for the period May 1, 2003 through July 31, 2003.

                                   Series A   Series B   Series C
                                   ---------- ---------- ----------
Liquidation Preference Per Share   $25.00     $25.00    $100.00
                                   ========== ========== ==========

Aggregate Liquidation Preference
(in $ millions)                    $57.50     $50.00    $104.84
                                   ========== ========== ==========

Regular Quarterly Dividends Per Share
   Payable on August 15, 2003      $0.57813   $0.53906   $2.50000
Cumulative Unpaid Prior Dividends
   Per Share                        5.78125    5.39063   24.80670
                                   ---------- ---------- ----------
Total Dividends Per Share
   Payable on August 15, 2003      $6.35938   $5.92969  $27.30670
                                   ========== ========== ==========

The Board currently expects to consider the Company's common
dividend policy at its next regularly scheduled Board of Directors
meeting.

The Company will be conducting a conference call today at 10 a.m.
EDT to review the Company's 2003 second quarter results and
current developments. To listen to the conference call via
webcast, log on to http://www.omegahealthcare.comand click the
"earnings call" icon on the Company's home page. Listening via
webcast will require you to have Microsoft Media Player installed
on your computer, which can be downloaded at no charge from the
Company's website. Please allow up to 30 minutes prior to the call
to download this software. Webcast replays of the call will be
available on the Company's website for two weeks following the
call. Additionally, a copy of this press release is available to
investors on the "new releases" section of the Company's website.

Omega is a Real Estate Investment Trust investing in and providing
financing to the long-term care industry. At June 30, 2003, the
Company owned or held mortgages on 221 skilled nursing and
assisted living facilities with approximately 21,900 beds located
in 28 states and operated by 34 third-party healthcare operating
companies.

                          *     *     *

As previously reported in Troubled Company Reporter, Standard &
Poor's Ratings Services revised its ratings outlook for Omega
Healthcare Investors Inc., to stable from positive. At the same
time, the ratings were affirmed.

                          LIQUIDITY

Omega's new management team (and major investor) has achieved
success in restoring Omega's liquidity position through its
releasing efforts of the company's owned and operated portfolio,
using proceeds from asset sales and suspended dividends to
reduce outstanding debt. This, coupled, with extensive core
portfolio restructuring and a rights offering and private
placement in 2002, enabled the company to meet maturing debt
obligations, achieve an extension on its bank line, and reduce
leverage from 48% debt-to-book capitalization at fiscal year-end
2001 to 39% at fiscal year-end 2002. Debt coverage measures have
also been favorably impacted, increasing from 1.3x debt service
in 2001 to roughly 2x in 2002. The company currently has $112
million outstanding under its $160 million secured bank revolver
that expires December 31, 2003. Management is in the process of
negotiating an extension of the facility and/or arranging a new
bank financing to refinance the outstanding balance. The company
will have to work around covenants within Omega's public
unsecured notes ($100 mil. remaining), which require unsecured
asset coverage of 2x. With roughly $550 million in owned assets
(depreciated basis) and an additional $211 million in mortgage
and other investments, there appears to be sufficient room to
accommodate the expected refinancing. Unrestricted cash balances
have grown modestly throughout 2002, and currently stand at
roughly $15 million.

                         OUTLOOK REVISED

Omega Healthcare Investors Inc.
                                                   Rating
                                                To        From
    Corporate credit                         B/Stable    B/Positive

                         RATINGS AFFIRMED

Omega Healthcare Investors Inc.
                                                      Rating
    $100 mil. 6.95% senior notes due 2007             CCC+
    $57.5 mil. 9.25% cum pref stk ser A               D
    $50 mil. 8.625% cum pref stk ser B                D


PACIFIC GAS: Settlement Plan's Financial Forecasts through 2008
---------------------------------------------------------------
To confirm Pacific Gas and Electric Company's Settlement Plan, the
Plan Proponents will demonstrate at the Confirmation Hearing that
PG&E's restructuring pursuant to the Plan will not likely be
followed by liquidation or the need for further restructuring.  As
part of their analysis, the Proponents have prepared projections
of PG&E's financial performance for the period from January 1,
2004 through December 31, 2008, assuming the Effective Date of the
Plan will occur on January 1, 2004. Based on those projections,
the Proponents believe that Reorganized PG&E will be able to make
all required payments and distributions and continue to operate as
viable businesses.

A copy of the Proponents' financial forecast is available for
free at:

  http://www.sec.gov/Archives/edgar/data/75488/000100498003000156/exhibit2a.htm


The Proponents' financial projections depend on the successful
implementation of the Plan for Reorganized PG&E, and the validity
of the other assumptions made.  These projections reflect
numerous assumptions, including confirmation and consummation of
the Plan in accordance with its terms, continued access by
Reorganized PG&E to capital markets, the continued availability
of the working capital facilities contemplated by the Disclosure
Statement, the anticipated future performance of Reorganized
PG&E, certain assumptions with respect to its competitors,
general business and economic conditions and other matters, many
of which are beyond the control of Reorganized PG&E.  In
addition, the risk factors outlined in the Disclosure Statement
and unanticipated events and circumstances occurring subsequent
to the preparation of the projections may affect the actual
financial results of Reorganized PG&E.  Although the Proponents
believe that the projections are reasonably attainable,
variations between the actual financial results and those
projected may occur and may be material. (Pacific Gas Bankruptcy
News, Issue No. 60; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


PERSONNEL GROUP: Amalgamated Gadget Discloses 36.9% Equity Stake
----------------------------------------------------------------
Amalgamated Gadget, L.P. beneficially owns 25,093,480 shares of
the common stock of Personnel Group of America, Inc., representing
36.9% of the outstanding common stock of the Company.  Amalgamated
Gadget has sole voting and dispositive powers over the stock.

The securities were purchased by Amalgamated Gadget, L.P. for and
on behalf of R2 Investments, LDC pursuant to an Investment
Management Agreement.  Pursuant to such Agreement, Amalgamated
Gadget, L.P. has sole voting and dispositive power over such
securities and R2 has no beneficial ownership of such securities.

The securities held include 18,256,000 shares of common stock
obtainable upon conversion of 182,560 shares of the Company's
Series B Convertible Participating Preferred Stock, at the
conversion rate of 100 shares of common stock per share of
Preferred Stock.  The holding also includes 1,954,235 shares of
common stock that may be acquired upon the exercise of Warrants.

The stock held represents approximately 36.9% of the 68,031,872
shares of the Company's stock deemed to be outstanding pursuant to
Rule 13d-3(d)(1)(i).

Because of its position as the sole general partner of
Amalgamated, Scepter may also be deemed to be the beneficial owner
of 25,093,480 shares of the stock.  Additionally, because of his
position as the President and sole shareholder of Scepter, which
is the sole general partner of Amalgamated, Raynor may be deemed
to be the beneficial owner of 25,093,480 shares of the stock.

Personnel Group of America, Inc. is a nationwide provider of
information technology consulting and custom-software development
services; high-end clerical, accounting and other specialty
professional staffing services; and technology systems for human
capital management. The Company operates through a network of
proprietary brand names in strategic markets throughout the United
States.

At December 29, 2002, the Company's balance sheet shows a total
shareholders' equity deficit of about $52 million (a positive
$52 million, after pro forma adjustments).


PG&E NAT'L: Brings-In Alvarez & Marsal as Restructuring Managers
----------------------------------------------------------------
Given the breadth and scope of their operations, the PG&E National
Energy Group Debtors require the services of experienced
restructuring managers to assist in their reorganization.
Accordingly, the NEG Debtors sought and obtained the Court's
interim approval to appoint Joseph A. Bondi and William H. Runge
III, both Managing Directors of Alvarez and Marsal, Inc.  The
Debtors want to capitalize on A&M's expertise and successful
history of providing bankruptcy management and a broad range of
consulting services to other public companies in similar
financially complex, troubled situations.

A&M will provide the NEG Debtors with restructuring services and
individuals to act as officers and directors.  Joseph A. Bondi
will be designated to serve as Chief Restructuring Officer and
Chief Executive Officer, and as director of NEG.  William H.
Runge III will be assigned as Associate Restructuring Officer and
Interim Chief Financial Officer.  A&M will also provide other
personnel to serve as executive officers or directors in one or
more of the Debtors' and their non-debtor subsidiaries' board.

A&M was originally engaged by NEG effective October 16, 2002 to
provide advisory services, aiding NEG in its reorganization
efforts.  Mr. Bondi already has taken an active role in overseeing
those extensive advisory activities.  Mr. Bondi joined A&M in
August 1988 and is currently a Senior Managing Director. Most
recently, he has served as interim Chief Executive Officer of
Integrated Health Services, Inc. and Chief Restructuring Officer
of Iridium.  In addition, Mr. Runge is a Managing Director of A&M
and has more than twenty-seven years of restructuring experience,
having worked as chief financial officer and chief operating
officer in manufacturing, distribution and service industries.  He
has led numerous debtor and creditor advisory consulting
engagements.

The NEG Debtors expect A&M to:

     (a) assist in the overall management of the reorganization
         efforts in connection with its $4,000,000,000 in existing
         obligations;

     (b) assist in developing detailed business scenarios including
         operating and cash flow projection for each business
         entity and each operating unit in support of proposed
         restructuring plans and proposals for the NEG Debtors as a
         whole and for individual legal business entities;

     (c) assist in developing short term cash flow forecasts and
         liquidity plans for each business entity and the Debtors
         as a whole;

     (d) review operating and restructuring plans and, in
         conjunction with the NEG Debtors' investment banker and
         assist with presentation and communication of those plans
         to the Board of Directors, creditors and other
         constituents;

     (e) assist in financing issues including assistance in
         preparation of reports, liaison and negotiations with
         creditors and their advisors; and

     (f) assist in developing employee retention programs.

A&M will be entitled to these considerations for its services:

     (1) A $125,000 monthly fee for Mr. Bondi's services;

     (2) A $100,000 monthly fee for Mr. Runge's services;

     (3) The payment of fees based on the firm's customary,
         standard hourly rates for other personnel:

            Managing Directors         $525 - 650
            Directors                   400 - 475
            Associates                  250 - 350
            Analysts                    180 - 250

     (d) reimbursement of all reasonable out-of-pocket expenses.

In addition to the set compensation, Martin T. Fletcher, Esq., at
Whiteford, Taylor & Preston, LLP, in Baltimore, Maryland, informs
the Court that A&M will be entitled to receive $6,000,000 as
incentive compensation, payable on the earlier to occur of:

     -- the consummation of the NEG Debtors' reorganization plan;
        and

     -- the sale of all or a substantial portion of their assets.

Mr. Fletcher notes that the compensation to A&M is straightforward
and economical.  The A&M Employees are not entitled to any
compensation from the NEG Debtors and will continue to draw their
salary and receive health and other personal benefits from A&M,
relieving the NEG Debtors of any payroll expense.

Mr. Fletcher discloses that before the Petition Date, A&M received
$6,835,484 from the NEG Debtors for monthly fees and
reimbursements of expenses.  A&M has previously received and
continues to hold the retainer which aggregates $600,000.  The
NEG Debtors also agree to indemnify A&M in accordance with the
indemnification provisions that are set forth in the original
engagement letter of October 16, 2002, according to Mr. Fletcher.

Mr. Runge attests that A&M has not represented and has no
relationship with the Debtors, their creditors or equity security
holders and any other potential parties-in-interest in these
cases.  A&M does not hold or represent an interest adverse to the
estates.  Mr. Runge note that none of the A&M Employees will
become an officer or director of the Debtors until after the
Petition Date.  Therefore, A&M is a "disinterested persons"
within the meaning of Section 101(14) of the Bankruptcy Code.
But Judge Mannes clarifies that Messrs. Bondi and Runge's
appointment will not cause A&M to be a disinterested person under
Section 101(14). (PG&E National Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


PLAYTEX PRODUCTS: Second Quarter Results Show Earnings Decline
--------------------------------------------------------------
Playtex Products, Inc. (NYSE: PYX), reported that in the second
quarter of 2003, the Company earned $4.7 million. These results
compare with second quarter 2002 reported earnings of $16.7
million. For the six month period ended June of 2003, the Company
earned $16.1 million compared with 2002 results for the same
period of $32.9 million.

Net sales were $180.0 million in the second quarter of 2003, which
compare with prior year results of $201.6 million. Versus year
ago, Feminine Care net sales were 20% lower for the second
quarter. These results were affected by the impact of intense
competitive activity in the tampon category and a continuation of
differences in shipment versus consumption levels in tampons due
to promotional activities in the category in past quarters. Infant
Care net sales were 2% below the year ago quarter due to a non-
core baby wipes sales decline while the remaining segments were
approximately 1% above year ago. Within Sun Care, the Company
curtailed shipments during the quarter in response to the
unfavorable weather impact on the sun care category, consistent
with its returns reduction strategy launched last year. Sun Care
sales were below year ago by 11% for the quarter and by 1% on a
year to date basis. Household Products/Personal Grooming net sales
were down 12% in the quarter versus the prior year due to a
continuation of unfavorable category trends.

"The results for the quarter reflect the impact of the
continuation of economic and competitive factors as well as the
weather. Overall, our market share trends remain solid and our
brands continue to maintain leadership positions in their
respective categories. As previously reported, tampon shipments
began to mirror consumption levels in the month of June so it
appears that the promotional inventory impact is largely behind
us," said Michael R. Gallagher, Playtex's Chief Executive Officer.

The Company's financial results for the prior year were impacted
by accounting changes for intangibles, a favorable tax ruling, a
plant closing, and debt retirement costs. Please refer to the
attached Consolidated Statement of Earnings for a full
reconciliation of reported and as adjusted results.

Playtex Products, Inc. is a leading manufacturer and distributor
of a diversified portfolio of personal care and consumer products,
including Playtex infant feeding products, Wet Ones, Baby Magic,
Diaper Genie, Mr. Bubble, Playtex tampons, Banana Boat, Woolite
rug and upholstery cleaning products, Playtex gloves, Binaca and
Ogilvie.

As reported in Troubled Company Reporter's June 24, 2003 edition,
Standard & Poor's Ratings Services lowered its long-term corporate
credit and senior secured bank loan ratings on personal care
company Playtex Products Inc. to 'B+' from 'BB-'. The subordinated
debt rating was lowered to 'B-' from 'B'. All ratings remain on
CreditWatch with developing implications, where they were placed
Nov. 13, 2002. Developing implications means that the ratings
could be raised, lowered, or affirmed, depending on the outcome of
Standard & Poor's review.

About $856 million in total debt was outstanding on March 29,
2003.


READER'S DIGEST: Files Reg. Statement for Secondary Offering
------------------------------------------------------------
The Reader's Digest Association, Inc. (NYSE: RDA) announced that
The Wallace Foundation (formerly the DeWitt Wallace-Reader's
Digest Fund and the Lila Wallace-Reader's Digest Fund) intends to
offer up to all of the 12,638,487 shares of the company's common
stock that it currently owns in a public offering.  The total
shares to be offered include an overallotment option to the
underwriters to purchase up to 1,648,498 shares.  The registration
statement has been filed pursuant to a registration right granted
to The Wallace Foundation under the 2002 recapitalization
agreement with the company. The company is not selling any shares
in the offering.  The managing underwriters for the offering are
Goldman, Sachs & Co. and Merrill Lynch & Co.

A registration statement relating to these securities has been
filed with the Securities and Exchange Commission, but has not yet
become effective. These securities may not be sold nor may offers
to buy be accepted prior to the time the registration statement
becomes effective.

Printed copies of the preliminary prospectus relating to the
offering may be obtained, when available, from Goldman, Sachs &
Co., 85 Broad Street, New York, NY 10004 and Merrill Lynch & Co.,
4 World Financial Center, New York, NY, 10080.

The Reader's Digest Association, Inc., is a global publisher and
direct marketer of products that inform, enrich, entertain and
inspire people of all ages and all cultures around the world.
Global headquarters are located at Pleasantville, NY.

As reported in Troubled Company Reporter's May 2, 2003 edition,
Standard & Poor's Ratings Service placed its 'BB+' corporate
credit rating for Reader's Digest Association Inc. on CreditWatch
with negative implications.

Pleasantville, New York-based Reader's Digest Association
publishes one of the world's highest circulating paid magazines
and is a leading direct marketer of books. Total debt as of
March 31, 2003, was $917 million.


R.H. DONNELLEY: June 30 Net Capital Deficit Balloons to $72 Mil.
----------------------------------------------------------------
R.H. Donnelley Corporation (NYSE: RHD), a leading publisher of
yellow page directories, announced a net loss to common
stockholders of $24.9 million for the second quarter of 2003.
Excluding purchase accounting and other adjustments related to the
Sprint Publishing and Advertising (SPA) acquisition and related
financing described within the attached Schedules, R.H.
Donnelley's adjusted second quarter 2003 net income available to
common shareholders was $28.4 million. The Company also announced
free cash flow of $39.7 million.

"We are pleased with the performance of the business through the
first half of the year," said David C. Swanson, Chairman and Chief
Executive Officer. "Cash flow continues to be stronger than
expected and the integration of the SPA directories business is
progressing ahead of schedule. We are also excited about the
launch of our new Internet yellow pages and city guide product in
the Las Vegas market. The bestredyp.com provides another venue for
RHD to generate qualified leads for our advertisers and an easy-
to-use, content-rich resource for those searching for products and
services. New products like this, combined with some economic
improvement, should drive stronger top line growth."

             Second Quarter - Reported GAAP Results

Second quarter net revenue was $38.6 million compared to $19.9
million last year. Expenses were $63.4 million compared to $20.4
million last year. Operating loss before partnership income was
$24.8 million compared to an operating loss of $0.5 million last
year. Partnership income was $35.3 million for the quarter versus
$40.9 million reported last year. Total operating income for the
Company in the quarter was $10.5 million versus operating income
of $40.4 million last year.

         Second Quarter Results - Including Adjustments
                      and Non-GAAP Measures

Publication sales for RHD's Sprint-branded directories during the
second quarter were $132.9 million, up 0.3% from adjusted pro
forma publication sales of $132.5 million last year. Publication
sales represent the total billing value of advertising in
directories that published in the period. Results were driven by
continued improvement in advertiser renewal rates offset by weaker
performance in several military markets due to troop deployment in
connection with the Iraqi conflict.

Adjusted revenue in the quarter was $143.6 million, up 0.8% from
$142.5 million of adjusted pro forma revenue in the second quarter
of 2002. Adjusted expenses were $82.8 million, a decrease of 9.6%
from $91.6 million of adjusted pro forma expenses for the same
period last year. This decrease was primarily attributable to
continued improvement in bad debt, lower paper costs and the
timing of expense recognition caused by the difference between SPA
and RHD accounting policies. Adjusted operating income before
partnership income was $60.8 million, up 19.5% from adjusted pro
forma operating income before partnership income of $50.9 million
last year.

Partnership income from DonTech was $35.3 million, down 3.6% from
$36.6 million reported last year. (DonTech operating results are
described below.) As a result, total adjusted operating income for
the Company was $96.1 million, an increase of 9.8% from adjusted
pro forma operating income for last year's second quarter of $87.5
million. Adjusted EBITDA for the quarter was $112.5 million, an
increase of 8.5% from adjusted pro forma EBITDA of $103.7 million
last year. Interest expense for the quarter was $43.3 million
compared to adjusted pro forma interest expense for last year's
second quarter of $46.3 million, reflecting lower interest rates
and a lower average debt balance.

                     DonTech Operating Results

Publication sales at DonTech were $90.8 million for the quarter,
an increase of 0.2% compared to $90.6 million last year.

Calendar sales for DonTech, which represent the value of actual
sales contracts signed in the period, were $120.1 million in the
quarter, down 4.1% from $125.2 million last year. This decrease
was driven by the continued effect of weak economic conditions in
the Midwest and intense competition in the local media market, as
well as the shift of advertising sales previously serviced in the
first quarter. For the first six months, calendar sales at DonTech
were $205.4 million down 0.8% from $207.0 million last year.
Partnership income from DonTech for the second quarter 2003 was
$35.3 million, down 3.6% from $36.6 million reported last year.
For the six months, partnership income from DonTech was $59.0
million, up 0.9% from $58.5 million last year.

The Company does not report revenue from DonTech, rather only its
share of DonTech's income and revenue participation income from
SBC Communications (NYSE: SBC), which are both based on DonTech's
calendar sales and reported collectively as partnership income.
DonTech is a perpetual partnership between R.H. Donnelley and SBC
Communications to sell yellow pages advertising in Illinois and
northwest Indiana.

                     Second Quarter Cash Flow

The Company generated cash flow from operations of $42.7 million
in the quarter, which reflects the payment of $51.2 million of
semi-annual bond interest. Free cash flow (cash flow from
operations less capital expenditures and software investment) was
$39.7 million or $0.99 per share for the second quarter.

Cash flow used in investing activities was $19.3 million. This was
comprised of a SPA acquisition purchase price adjustment of $16.3
million and $3.0 million of capital expenditures and software
investment.

Cash used in financing activities was $35.6 million in the
quarter. Proceeds from stock option exercises in the quarter were
$3.4 million. Debt repaid in the quarter was $39.0 million. The
$39.0 million debt repayment in the quarter was funded from
existing cash, as well as free cash flow generated in the quarter.
On June 30, 2003 net debt was $2,206.3 million, a decrease of
$26.8 million from net debt of $2,233.1 million at March 31, 2003.
For the six months, the Company repaid $128.7 million of debt.

At June 30, 2003, the Company's balance sheet shows a total
shareholders' equity deficit of about $72 million.

                            Outlook

The Company continues to expect full year 2003 publication sales
growth of approximately 1.0% for the Sprint-branded directories,
which should translate into flat reported revenue. DonTech
continues to feel the effects of a sluggish Chicagoland economy
and sales into third quarter directories have not shown
improvement. As a result, calendar sales and partnership income at
DonTech will be flat to down slightly for the full year.

The Company also affirms guidance for adjusted EBITDA of
approximately $400 million for the year, reflecting improved
operating results to date offset by previously unexpected
incremental costs associated with the relocation of the Company's
headquarters. Expected full-year reported operating income of
approximately $80 million after anticipated depreciation and
amortization expenses of approximately $65 million reflects the
impact of purchase accounting rules. Adjusted operating income
excluding the purchase accounting adjustments is expected to be
approximately $335 million.

The Company is increasing its forecast for cash flow from
operations to $215 million from $170 million and for free cash
flow to $195 million from $150 million after capital expenditures
and software investment of approximately $20 million. This
increase is primarily attributable to the absence of cash tax
payments in 2003 (previously forecast at $30 million). The Company
has determined that it will be able to amortize some items related
to the acquisition over a shorter life than originally
anticipated, and as a result, does not expect to pay any cash
taxes in 2003. The increase is also due to lower cash interest
expense (to $175 million from $185 million) from lower short term
interest rates and lower average debt balances, as well as
improving collections experience which also results in a lower use
of funds from working capital (to $10 million from $15 million).
Assuming the entire $195 million of free cash flow is used for
debt repayment, at the end of 2003 debt would be approximately
$2,140 million, or roughly 5.4 times 2003 EBITDA.

The Company also is increasing its expectations for 2003 adjusted
EPS to approximately $2.25 from approximately $2.10 and free cash
flow per share to approximately $4.80 from approximately $3.80. On
a reported basis, the Company expects 2003 EPS to be a loss of
approximately $3.95, compared to previous expectations of a loss
of approximately $4.00.

                     Comparative Financial Results

As a result of the SPA acquisition, the related financing and
associated accounting, 2003 and 2002 results reported in
accordance with GAAP are not comparable, nor do they reflect the
Company's underlying operational or financial performance.
Accordingly, management is presenting several non-GAAP financial
measures in addition to results reported in accordance with GAAP
in order to better communicate underlying operational and
financial performance and to facilitate comparison of 2003
performance with 2002 adjusted pro forma results. While the
adjusted pro forma statements reasonably represent results as if
the two businesses had been combined for the full year 2002,
because of differences between current and historical accounting
policies, management does not believe these statements are
strictly comparable to 2003 on a quarterly basis.

The primary 2003 adjustments were recognition of pre-acquisition
deferred revenue and deferred expenses that are not reportable
under GAAP due to purchase accounting requirements but that absent
purchase accounting would have been recognized during the periods
presented and exclusion of preferred dividends related to a
beneficial conversion feature in connection with preferred stock
issued to finance the acquisition. The 2002 adjustments give pro
forma effect to the SPA transaction as if it occurred on
January 1, 2002, and also exclude non-cash preferred dividends
associated with the BCF.

See the Company's Current Report on Form 8-K filed with the SEC on
May 2, 2003 for further details regarding the adjustments and non-
GAAP financial measures and also the Company's Current Report on
Form 8-K filed with the SEC on July 23, 2003 for disclosure of all
quarterly 2002 as adjusted pro forma results and reconciliations
to 2002 reported GAAP amounts.

R.H. Donnelley is a leading publisher of yellow pages directories
which publishes 260 directories under the Sprint Yellow Pages(R)
brand in 18 states, with major markets including Las Vegas,
Orlando and Lee County, Florida. The Company also serves as the
exclusive sales agent for 129 SBC directories under the SBC Smart
Yellow Pages(R) brand in Illinois and northwest Indiana through
DonTech, its perpetual partnership with SBC. Including DonTech,
R.H. Donnelley serves more than 250,000 local and national
advertisers. For more information, please visit R.H. Donnelley at
http://www.rhd.com


RH DONNELLEY: Plans to Move Headquarters to Raleigh-Durham, NC
--------------------------------------------------------------
R.H. Donnelley Corporation (NYSE: RHD), a leading publisher of
yellow page directories, is consolidating its Purchase, New York
headquarters, along with recently acquired Sprint Publishing's
Overland Park, Kansas headquarters, into a new location to be
chosen in the Raleigh-Durham, North Carolina area. The moves are
expected to be completed toward the end of the first quarter of
2004.

"With our acquisition of Sprint Publishing and Advertising earlier
this year, R.H. Donnelley became a significantly larger
organization, and this move is the logical next step in the
evolution of the combined organization, as we build for our
Company's future," said David C. Swanson, Chairman and CEO of R.H.
Donnelley. "By consolidating these two locations into a single
facility in Raleigh-Durham, we can enhance our effectiveness while
cultivating a more cohesive corporate culture, which will enable
us to maximize opportunities for both employees and shareholders."

The Company will be transferring to Raleigh-Durham all 60
positions currently located in its Purchase headquarters, along
with about 80 corporate function positions (out of 230 total
positions) in Overland Park. All of the approximately 140
employees whose positions are being moved will be offered the
opportunity to relocate to Raleigh-Durham.

Approximately 150 employees primarily from sales, billing,
collections, print and distribution will remain in Overland Park.
R.H. Donnelley currently operates its 240-person Directory
Services organization from Morrisville, N.C.

Raleigh-Durham was selected for several reasons according to
Swanson. Key among these reasons is a substantial economic
incentive program provided by the State of North Carolina awarded
through the Job Development Investment Grant Program. "After
carefully considering all of our options, North Carolina's offer
of $4.3 million in economic incentives over the next ten years
clinched our decision. I'd like to thank Governor Easley,
Secretary Fain and the staff at North Carolina's Department of
Commerce for recognizing what RHD offers to the State and for
their enthusiastic support," said Swanson. Also significant,
Raleigh-Durham is centrally located to a large number of the
Company's customers, markets and sales offices, which will allow
for easier and more efficient travel to and from the location. Its
business friendly atmosphere is expected to provide the Company
with a lower operating cost environment and an outstanding labor
market fueled by its numerous universities and colleges. "Raleigh-
Durham is regarded as one of this country's best places to live
and work. These are important elements to our employees and their
families and instrumental in helping us recruit future employees
as we grow," said Swanson.

R.H. Donnelley --- whose senior secured $1.5 billion facility
has been rated by Standard & Poor's at BB -- is a leading
publisher of yellow pages directories which publishes 260
directories under the Sprint Yellow Pages(R) brand in 18 states,
with major markets including Las Vegas, Orlando and Lee County,
Florida. The Company also serves as the exclusive sales agent
for 129 SBC directories under the SBC Smart Yellow Pages brand
in Illinois and northwest Indiana through DonTech, its perpetual
partnership with SBC. In total, R.H. Donnelley serves more than
250,000 local and national advertisers. For more information,
please visit R.H. Donnelley at http://www.rhd.com


SEA CONTAINERS: S&P Affirms BB- Rating Following Sale of Unit
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on Sea
Containers Ltd., including the 'BB-' corporate credit rating, and
removed them from CreditWatch, where they had been placed on
Nov. 14, 2002. The ratings were lowered to current levels on April
10. The outlook is negative.

"Ratings on Sea Containers were affirmed after the company's
completion of the sale of the Isle of Man Steam Packet Co. in July
2003, proceeds of which were used to refinance outstanding debt,"
said Standard & Poor's credit analyst Betsy Snyder. "The company
redeemed $158 million of debt that matured on July 1, 2003, with a
new $158 million bridge facility and the exchange of $22.5 million
of the maturing notes for new debt securities, alleviating near-
term refinancing concerns," she continued.

The ratings on Bermuda-based Sea Containers reflect its heavy
upcoming debt maturities, and reduced financial flexibility,
partially offset by fairly strong competitive positions in its
major businesses. Sea Containers is involved in passenger
transport operations and marine cargo container leasing. It also
has a 47% stake in Orient-Express Hotels Ltd. Passenger transport
is the largest operation, accounting for approximately 79% of
total revenues. This business includes passenger and vehicle ferry
services in the English Channel, the Irish Sea, and the
Northern Baltic Sea; and passenger rail service between London and
Scotland, GNER (Great North Eastern Railway). While Sea Containers
is one of the larger ferry participants on routes it serves, this
is a highly competitive business, with several participants. In
2002, Sea Containers acquired the 50% of Silja OyjAbp, a major
ferry operator in the Baltic Sea, that it did not already own.
GNER operates under a U.K. government franchise that expires in
2005. Marine cargo container leasing primarily includes Sea
Containers' share of its joint venture with General Electric
Capital Corp., GESeaCo SRL, one of the largest marine cargo
container lessors in the world. Leisure investments include the
company's 47% stake in OEH, which owns and/or manages deluxe
hotels, tourist trains, river cruise ships, and restaurants
located around the world. Sea Containers had previously owned
100%, but has been selling its stake over the past few years,
using proceeds to reduce debt. Sea Containers also owns a variety
of smaller businesses.

Sea Containers' earnings and cash flow have recovered somewhat
since 2002, due to improving conditions at the passenger transport
and GESeaCo operations, but are still below levels achieved in the
late 1990s. Silja's results were consolidated from May 1, 2002 on,
and demand for marine cargo containers has remained strong since
mid-2002. Leisure operations have continued to be negatively
affected by reduced travel levels that began in 2001. However,
despite the improvement in earnings and cash flow, the company's
credit ratios remain at relatively weak levels and will likely
continue to be constrained by its high debt leverage and
increasing financing costs. At March 31, 2003, balance sheet debt
had increased to $1.8 billion from $1.7 billion a year earlier, as
the consolidation of Silja's debt more than offset the
deconsolidation of OEH's debt. In addition, the company's
financial flexibility has weakened. It has substantial debt
maturities through 2004, which it has reduced somewhat through
asset sales and the exchange of certain outstanding debt
securities for new debt securities with higher coupons and longer
maturities. While the assets that were already sold or are in the
process of being sold are noncore, their sale will leave the
company with reduced cash flow and fewer assets available for sale
if financial difficulties persist.

Earnings from several of Sea Containers' businesses have begun to
improve and the company was successful in redeeming $158 million
of debt securities that matured on July 1, 2003. However, it still
has heavy debt maturities through 2004, resulting in continuing
refinancing risk.


SIX FLAGS: Disappointing 2Q Results Prompt S&P to Keep Watch
------------------------------------------------------------
Standard & Poor's Ratings Service placed its 'BB-' corporate
credit rating for Six Flags Inc. on CreditWatch with negative
implications.

Oklahoma City, Oklahoma-based Six Flags is the largest regional
theme park operator and the second-largest theme park company in
the world. Total debt and preferred stock as of June 30, 2003, was
roughly $2.8 billion, which includes more than $100 million in
seasonal debt.

"The CreditWatch listing is based on the decline in EBITDA in the
second quarter ended June 30, 2003, and a lackluster operating
outlook for the key third quarter," said Standard & Poor's analyst
Hal F. Diamond. EBITDA declined about 60% in the second quarter as
poor weather partially resulted in a 6% decline in attendance. In
addition, season passes and group sales, which have historically
provided an offset to volatile weather, were weak in the first
half of 2003. Season pass sales declined while group bookings have
also weakened, reflecting both the difficult economy and decreased
school outings as a result of budgetary constraints and policies
restricting travel, related to terror alert levels.

The rating had anticipated improvement in credit measures in 2003,
which is now unlikely given the weak operating outlook. Six Flags
expects EBITDA to decline for the full 2003, and the amount of the
shortfall, which could be material, will depend on performance
over the balance of the season, especially the remainder of July
and August. Discretionary cash flow, which has been minimal during
the past two years despite reduced capital spending, will likely
be negatively affected in 2003 by weak profitability.

Based on current performance trends, the company expects to remain
in compliance with covenants in its credit agreement, which
excludes all public debt at the parent company. Standard & Poor's
expects that downgrade potential will be limited to one notch, to
the 'B+' level. Standard & Poor's will reevaluate the company's
future business strategies and operating outlook in its key third
quarter in completing the CreditWatch review.


SMART & FINAL: Negotiating Covenant Amendment Under Credit Pact
---------------------------------------------------------------
Smart & Final Inc. (NYSE:SMF) reported second quarter 2003 results
and said that it is proceeding as previously announced with the
divestiture of its Florida foodservice direct delivery and stores
operations.

Smart & Final indicated that it recorded $68.0 million net of tax
in special charges in the second quarter, including $40.2 million
related to the estimated loss on sale of the company's Florida
foodservice and stores businesses, $11.5 million in restructuring
charges related to the northern California foodservice operation,
and $16.3 million in other charges including the cumulative effect
of accounting change for financial statement consolidation of the
company's synthetic lease facility. The special charges are not
expected to have a material effect on company cash flow.

Primarily due to the charges, the company reported a net loss of
$69.2 million, or $2.31 per diluted share, for the twelve-week
quarter ended June 15, 2003. Second quarter 2002 net income was
$2.1 million, or $0.07 per diluted share.

Ross Roeder, Smart & Final chairman and chief executive officer,
commented, "The charges recorded in the second quarter result from
our commitment to improve return on investment and allocate
capital to profitable growth opportunities. By divesting our
Florida operations, Smart & Final will be better able to focus
resources on our continuing western U.S. operations, which year-
to-date represented 86 percent of our total company sales and all
of our operating earnings."

Prior to the charges, pretax income in the company's western U.S.
stores grew by 18 percent to $13.6 million for the second quarter,
compared to $11.5 million in the second quarter 2002. The
company's northern California foodservice operations recorded a
pretax loss of $7.2 million for the second quarter including $4.4
million in expenses detailed below, compared to a pretax loss of
$2.7 million in the second quarter 2002.

Roeder added, "Our core western U.S. store performance in the
second quarter was very strong, with pretax income increasing by
18 percent versus the prior year quarter on a 3.7 percent increase
in year-to-year comparable store sales. Both our Smart & Final and
Cash & Carry store formats posted solid sales and margins and
generated significant operating cash flow increases over prior
year periods. On an operating basis overall, our Stores segment
pretax income as a percentage of sales increased to 3.5 percent as
compared to the prior year quarter of 3.1 percent. For the first
half of 2003, net cash provided by operating activities for the
company more than doubled to $43.5 million, compared to $20.8
million in the first half of 2002. We're continuing our store
expansion plans with both new units and remodeling activity
planned throughout 2003 and we have invested approximately $10
million in the first two quarters of 2003 in support of these
programs."

One store was relocated during the 2003 second quarter, in Rancho
Palos Verdes, Calif. At the end of the second quarter, excluding
the Florida stores, the company operated 228 stores compared with
223 stores at the end of the 2002 second quarter.

The company's western U.S. store operations and northern
California foodservice direct delivery business are presented as
continuing operations in the company's statement of operations.
Total continuing operations sales for the second quarter 2003
increased 4.8 percent to $431.6 million as compared to $411.7
million for the second quarter of 2002. Stores sales increased 5.1
percent to $392.7 million, with comparable store sales up 3.7
percent year-to-year for the quarter. The northern California
foodservice distribution sales increased 1.6 percent to $38.9
million in the quarter.

Total continuing operations gross margin increased to $66.8
million for the quarter. Stores gross margin, as a percentage of
sales, increased to 17.0 percent for the second quarter 2003
compared to 15.6 percent for the second quarter 2002.

The northern California foodservice distribution gross margin, as
a percentage of sales, decreased to 0.1 percent for the second
quarter 2003 compared to 5.3 percent for the second quarter of
2002. The northern California foodservice distribution gross
margin was adversely affected in the second quarter of 2003 as a
result of recording approximately $2.2 million of valuation
charges related to inventory and vendor receivables.

In the second quarter 2003, the company adopted the provisions of
Emerging Issues Task Force Issue No. 02-16, "Accounting by a
Customer (Including a Reseller) for Cash Consideration Received
from a Vendor." This guidance requires that vendor allowances be
treated as a reduction of inventory costs unless specifically
identified as a reimbursement of costs to advertise the vendor's
products or payment for other services. The effects of adoption of
EITF 02-16 are presented within the financial statements for
continuing operations. As a result of the implementation of the
provisions of EITF 02-16, the company has changed the
classification of certain vendor allowances, that previously were
recorded as a reduction of operating and administrative expenses
when received, to classification of a reduction in cost of sales.
Approximately $2.9 million of such vendor allowances were recorded
as a reduction of cost of sales in the second quarter of 2003,
which represented approximately 0.7 percent of Stores sales which
contributed to the increase in Stores gross margin, as a
percentage of sales, as compared to the prior year period. In the
second quarter 2003 the effect on pretax income from adoption of
EITF 02-16 was immaterial.

Operating and administrative expenses from total company
continuing operations increased to $63.1 million for the quarter
as compared to $51.8 million for the prior year quarter. Stores
operating and administrative expenses, as a percentage of sales,
increased to 13.5 percent for the second quarter of 2003 compared
to 12.5 percent for the second quarter of 2002. The
re-classification of $2.9 million of certain vendor allowances
resulting from the adoption of EITF 02-16, contributed
approximately 0.7 percent to the increase in Stores operating and
administrative expenses as a percentage of sales while the
remaining 0.3 percent increase was primarily due to increased
fringe benefit costs.

The northern California foodservice distribution operating and
administrative expenses, as a percentage of sales, increased to
18.6 percent for the quarter as compared to 12.3 percent for the
prior year quarter. The operating and administrative expenses of
the northern California foodservice distribution business for the
second quarter of 2003 were adversely affected as a result of
recording approximately $2.2 million of expenses, primarily
related to sales tax liability and bad debt expense.

Also in the second quarter of 2003, the company recorded $37.5
million of pretax charges related to restructuring initiatives of
the company's northern California foodservice distribution
business, litigation reserves and financing costs. The financial
statement presentation of these charges is as a single line item,
before tax, captioned "restructuring and other charges." The
company implemented restructuring activities with respect to the
northern California foodservice distribution business in the
second quarter, including transition of distribution for northern
California Smart & Final format stores from the Stockton, Calif.,
facility to the company's principal stores distribution facility
in Commerce, Calif., and the exit of national account and cruise
line business sales segments. As a result, a $19.1 million pretax
restructuring charge was recorded consisting primarily of
impairment charges related to goodwill and property, plant and
equipment, lease termination costs, severance and other costs. The
company recorded other charges of $18.4 million pretax in the
Corporate segment related to litigation reserves and financing
costs.

Pretax loss from continuing operations for the second quarter of
2003 was $36.5 million compared to pretax income of $5.7 million
for the prior year second quarter. Within continuing operations,
Stores pretax income increased to $13.6 million in the quarter as
compared to $11.5 million for the second quarter of 2002. The
northern California foodservice distribution pretax loss increased
to $26.3 million in the quarter as compared to a pretax loss of
$2.7 million for the second quarter of 2002. The $26.3 million
pretax loss in the second quarter 2003 includes the $19.1 million
of restructuring charges and $4.4 million of charges related to
inventory and vendor receivable valuation, sales tax liability and
bad debt expense, as detailed above.

The company's June 15, 2003 balance sheet shows that its total
current liabilities outweighed its total current assets by about
$120 million.

Smart & Final previously announced that it is in negotiations with
Gordon Food Service to sell the company's Florida operations, with
the transaction expected to close later in 2003. The company
anticipates entering into a definitive agreement with GFS
regarding the Florida operations during the third quarter.

Discontinued operations in Florida are presented as a single line
item net of tax, captioned "discontinued operations," comprising
the loss from operating activities and estimated loss on sale and
divestiture. The second quarter 2003 results from discontinued
operations were a loss of $41.7 million net of tax. Of this
amount, $40.2 million net of tax reflects the estimated loss on
sale and divestiture. The company anticipates that charges of an
additional $6 million after-tax will be recorded in the balance of
2003, associated with lease termination costs and severance costs
related to the Florida stores business.

The company has obligations under a revolving credit facility and
the synthetic lease facility that are subject to certain financial
ratio covenants. Following the recording of the special charges
the company was not in compliance with certain of these covenants
at the end of the second quarter 2003, and by operation of the
covenants the company would not be in compliance for a 12 month
period thereafter. As a result, the company's obligations under
the revolving credit facility and the synthetic lease facility
have been classified as current liabilities in the company's
balance sheet as of June 15, 2003. The company has received
waivers of default effective as of June 15, 2003 and intends to
negotiate amendment of certain covenants to achieve compliance in
future periods.

At the end of the second quarter 2003 the company reported balance
sheet cash of $39.5 million and had approximately $14 million in
available liquidity under the revolving credit agreement.

The company expects that because of the substantial non-cash
nature of the total of $68 million after-tax charges taken in the
second quarter 2003, when combined with the additional charges to
be recorded in the balance of 2003 and the proceeds from the GFS
transaction and other asset sales, will result in a combined
immaterial net effect on cash flow.

Founded in 1871 in downtown Los Angeles, Smart & Final Inc.
operates 228 non-membership warehouse stores for food and
foodservice supplies in California, Oregon, Washington, Arizona,
Nevada, Idaho and northern Mexico at the end of the 2003 second
quarter. The company also operates a foodservice distribution
business in northern California. As of the end of the second
quarter the company has classified as held for sale the Florida
foodservice distribution business and the 14 Florida Smart & Final
stores. For more information, visit the company's Web site at
http://www.smartandfinal.com


SOUTH STREET: S&P Keeping Watch on Three Note Series Ratings
------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on the class
A-2L, A-3L, and A-3 notes issued by South Street CBO 2000-1 Ltd.,
a high-yield arbitrage CBO transaction managed by Colonial
Advisory Services Inc., on CreditWatch with negative implications.
At the same time, the 'AAA' rating on the class A-1L notes is
affirmed. Additionally, the 'CCC' ratings on the class A-4 notes
remain on CreditWatch negative, where they were placed
April 25, 2003.

The CreditWatch placements reflect factors that have negatively
affected the credit enhancement available to support the notes
since the ratings on the class A-4 notes were placed on
CreditWatch. These factors include continuing par erosion of the
collateral pool securing the rated notes and a negative migration
in the overall credit quality of the assets within the collateral
pool.

All of the overcollateralization test ratios continue to be out of
compliance and have deteriorated since the April 2003 CreditWatch
placement. As of the June 17, 2003 trustee report, the senior
class A overcollateralization ratio was 119.75% (the required
minimum is 120.00%), versus a ratio of 120.78% in April 2003. The
class A overcollateralization ratio was 100.37% (the required
minimum is 110.00%), versus a ratio of 101.53% in April 2003.
Finally, the class B ratio was 90.90% (the required minimum is
103.00%) versus a ratio of 92.46% in April 2003.

The credit quality of the collateral pool has also deteriorated.
As of the June trustee report, the transaction holds $18.75
million worth of securities that are in default, $3.0 million of
which has defaulted in the last one month.

Standard & Poor's noted that the transaction was failing its
Trading Model Test, a measure of the overall credit quality within
the portfolio and its ability to support the ratings initially
assigned to the liability tranches issued by the CDO. The failure
of the transaction to remain in compliance with the Trading Model
Test is a reflection of a reduction in the overall credit quality
of the assets within the portfolio. Furthermore, $21.28 million
(approximately 9%) of the securities currently in the portfolio
come from obligors with ratings currently on CreditWatch
with negative implications.

Standard & Poor's will be reviewing the results of the current
cash flow runs generated for South Street CBO 2000-1 Ltd. to
determine the level of future defaults the rated classes can
withstand under various stressed default timing and interest rate
scenarios, while still paying all of the rated interest and
principal due on the notes. The results of these cash flow runs
will be compared with the projected default performance of the
performing assets in the collateral pool to determine whether the
ratings currently assigned to the notes remain consistent with the
credit enhancement available.

                 RATINGS PLACED ON CREDITWATCH NEGATIVE

                      South Street CBO 2000-1 Ltd.

                       Rating                 Balance
         Class   To               From        (mil. $)
         A-2L    AAA/Watch Neg    AAA            95.0
         A-3L    BBB+/Watch Neg   BBB+           15.0
         A-3     BBB+/Watch Neg   BBB+           30.0

                            RATING AFFIRMED

                      South Street CBO 2000-1 Ltd.

                           Balance
         Class   Rating    (mil. $)
         A-1L    AAA          61.7

                RATINGS REMAIN ON CREDITWATCH NEGATIVE

                     South Street CBO 2000-1 Ltd.

                                Balance
         Class   Rating         (mil. $)
         A-4L    CCC/Watch Neg     20.0
         A-4A    CCC/Watch Neg      8.0
         A-4C    CCC/Watch Neg     10.0

                     OTHER OUTSTANDING RATING

                 South Street CBO 2000-1 Ltd.

                           Balance
         Class   Rating    (mil. $)
         B-2     CC            4.7


SOUTHERN STAR CENTRAL: S&P Assigns BB Corporate Credit Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' corporate
credit rating to Southern Star Central Corp. and its wholly owned
subsidiary, Southern Star Central Gas Pipeline Inc.

Standard & Poor's also assigned its 'BBB-' rating to Central
Pipeline's existing $175 million 7.375% 144A senior notes due 2006
and new $60 million senior secured credit facility, comprised of a
$50 million senior secured term loan due 2006 and a $10 million
working capital facility. The rating reflects the pledged security
of the gas shippers' throughput contracts.

At the same time, Standard & Poor's assigned its 'B+' rating to
Southern Star Central's $180 million senior secured notes due 2010
to reflect the subordinated position of this debt.

The Southern Star Central debt is secured by a preferred first-
priority security interest in all the outstanding common stock of
all current and future directly owned domestic subsidiaries, and
65% of the outstanding common stock of any future directly owned
foreign subsidiaries. This debt is callable in 2007.

The outlook is stable. The Owensboro, Ky.-based company will have
approximately $415 million of debt outstanding when the financing
is completed.

"Ratings stability for Southern Star Central reflects the
predictable cash generation from the pipeline's operations, which
is expected to cover funding requirements. Southern Star Central's
high leverage will remain a challenge in achieving a higher rating
in the foreseeable future," said Standard & Poor's credit analyst
Judith Waite.

The ratings on Southern Star Central reflect the company's high
leverage, balanced by its above-average business position,
characterized by the company's good market and strong competitive
position, as well as its strong customer base.

The pipeline transports gas from the Rockies and Mid-Continent to
customers in major metropolitan areas in Kansas, Missouri, and
Oklahoma. Southern Star Central acquired the pipeline from The
Williams Cos. Inc. in November 2002.


SPIEGEL INC: Committee Wants Nod to Sue Holdings & Deutsche Bank
----------------------------------------------------------------
The Official Committee of Unsecured Creditors of The Spiegel Inc.
Debtors, asks the Court for permission to initiate an avoidance
action, including preference claims and fraudulent transfer
claims, on behalf of Spiegel Inc.'s estate against Spiegel
Holdings, Inc., a non-debtor.

Spiegel has a meritorious claim to recover $50,000,000 from its
parent, Spiegel Holdings.  The Committee reports that $30,000,000
of that claim is currently held by Deutsche Bank Trust Company
Americas, as escrow agent, and will likely become available to
Spiegel Holdings in a matter of days.  Spiegel Holdings has
directed Deutsche Bank to transfer the available funds to its
bank account at Commerzbank International S.A. in Luxembourg.  To
the Committee's knowledge, Spiegel Holdings has no other assets.
Unless these funds are restrained, Spiegel Holdings may become
effectively judgment-proof.

The Committee tells the Court that the Avoidance Action seeks to
recover $50,000,000 for the benefit of Spiegel's estate and its
general unsecured creditors.  Spiegel has not commenced the
Avoidance Action against Spiegel Holdings.  While it has not
completed its review of potential causes of action, Spiegel
Holdings' imminent transfer of $30,000,000 to accounts beyond the
Bankruptcy Court's reach caused the Committee to take immediate
action to assert the Avoidance Action on the estate's behalf.

Spiegel Holdings is a Delaware corporation, but since its
principal place of business is in Germany, the Committee says, it
is not qualified to do business in New York.  Spiegel Holdings
owns all of Spiegel Inc.'s voting common stock.

Spiegel, in turn, owns 100% of the common stock of First Consumers
National Bank, a nationally chartered bank that historically
engaged in two banking activities -- accepting and maintaining
deposits and operating two credit card lending programs.  First
Consumers is currently engaged in the wind-down of its activities.

In early 2002, the Office of Comptroller of the Currency, a U.S.
Department of Treasury bureau regulating and supervising all
nationally chartered banks, determined that there were "serious
problems" with FCNB's credit card programs.  In May 2002, the OCC
and FCNB entered into a Consent Order requiring FCNB to take
specific actions to remedy unsafe or unsound banking practices
that posed a threat to the bank's ability to meet its obligations
to its depositors.  The Consent Order required FCNB to file a
plan for its sale, merger or liquidation.

FCNB owed in excess of $110,000,000 in deposit liabilities so the
OCC required it to establish a fund that would provide security
for the performance of obligations to its depositors.

To enable FCNB to comply with the Consent Order, Spiegel Holdings
arranged for a $120,000,000 deposit in an escrow account at
Deutsche Bank.  Spiegel Holdings, FCNB and Deutsche Bank entered
into a Deposit Escrow and Custody Agreement, which the OCC
approved.

The Escrow Agreement provided, inter alia, that:

     -- the escrowed funds would be used exclusively for:

          (i) the payment of principal, interest, and any cost
              associated with any withdrawal, on FCNB's deposit
              liability obligations; or

         (ii) the payment of any sales price for any deposits FCNB
              sold until its obligations were sold or repaid;

     -- at times the Escrow Deposit exceeded 100% of FCNB's deposit
        liability obligations, Spiegel Holdings had the right to
        ask Deutsche Bank, on notice to the OCC, to release any
        excess funds and the OCC had the right to object to any
        release.

Spiegel Holdings and Spiegel entered into an Indemnification
Agreement where Spiegel acknowledged that Spiegel Holdings had:

     -- borrowed funds to provide the $120,000,000 Escrow Deposit,

     -- executed certain Loan Documents, and

     -- executed the Escrow Agreement.

Spiegel tried to retire the FCNB deposits as quickly as possible
and to provide sufficient funding so that the Escrow Deposit
would not have to be used to satisfy FCNB's obligations to
depositors.  Moreover, Spiegel agreed:

       "to indemnify Spiegel Holdings and to hold it harmless
       from and against any and all liability . . . and expenses
       . . . and costs of funds . . . of or against it resulting
       from or arising out of: (a) the Loan Documents; or
       (b) the Escrow Agreement."

Under the Escrow Agreement, FCNB satisfied millions of dollars of
its deposit obligations.  As of November 30, 2002, FCNB's deposit
obligations had been reduced to less than $50,000,000.  Spiegel
Holdings then requested and received portions of the original
$150,000,000 Escrow Deposit.  As of December 13, 2002, the
Deposit Amount exceeded $50,000,000.

Spiegel Holdings asked Deutsche Bank, on notice to the OCC, to
release $49,000,000 from the Escrow Deposit.  In January 2003,
Deutsche Bank released $18,600,000 to Spiegel Holdings.  On
February 6, 2003, Spiegel Holdings asked Deutsche Bank to release
an additional $29,680,000 and to remit this amount to its
Luxembourg account.  The OCC objected to the release, evidently
because of a concern that FCNB might not yet have satisfied all
of its deposit liability obligations.

On March 17, 2003, Spiegel Holdings commenced an action in the
United States District Court for the District of Oregon against
FCNB, Deutsche Bank, the OCC and the Comptroller of the Currency,
seeking the release of the $29,680,000.  FCNB and Deutsche Bank
have answered the Complaint; OCC has moved to dismiss for lack of
subject matter jurisdiction.  The action remains pending.

The OCC is free to withdraw its objection to the release of the
Escrow Deposit at any time, at which time Spiegel Holdings would
receive the Escrow Deposit from the escrow agent.  The OCC has
stated in court papers that "it is contemplated that the entire
issue will be rendered moot by June 30, 2003."

However, the Committee points out that Spiegel's transfer of
$50,000,000 to FCNB in December 2002 directly benefited Spiegel
Holdings because in the absence of the Transfer, FCNB would have
used the Escrow Deposit to pay its obligations.  As a result of
the Spiegel Transfer, the Escrow Deposit is now free to be
returned to Spiegel Holdings, subject to OCC approval.  The
Indemnification Agreement created an antecedent obligation on
account of which the Spiegel Transfer was made.  Moreover, the
Committee continues, Spiegel was insolvent at the time of the
Transfer.  Since the Spiegel Transfer was made within 90 days of
the Petition Date, it is a preferential transfer under Section
547 of the Bankruptcy Code and Spiegel is entitled to recover the
Transfer amount from Spiegel Holdings, which benefited from it.

The Committee further contends that the Indemnification Agreement
and the Spiegel Transfer are invalid as fraudulent conveyances in
that:

     (a) Spiegel was insolvent at all relevant times, and

     (b) Spiegel received no consideration for these transfers
         because FCNB was hopelessly insolvent and was winding
         down its affairs. (Spiegel Bankruptcy News, Issue No. 8;
         Bankruptcy Creditors' Service, Inc., 609/392-0900)


STONE TOWER: S&P Assigns Prelim. BB/B+ Ratings to Class D-1, D-2
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Stone Tower CLO Ltd./Stone Tower CLO Corp.'s $325.5
million floating-rate notes and preferred shares.

The preliminary ratings are based on information as of
July 23, 2003. Subsequent information may result in the assignment
of final ratings that differ from the preliminary ratings.

      The preliminary ratings reflect:

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

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

      -- The experience of the collateral manager; and

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

Stone Tower CLO Ltd./Stone Tower CLO Corp. is the first CDO
managed by Stone Tower Debt Advisors LLC.

                  PRELIMINARY RATINGS ASSIGNED
           Stone Tower CLO Ltd./Stone Tower CLO Corp.

   Class                     Rating               (Amount mil. $)
   A-1                       AAA                          262.750
   A-2                       AA                            12.000
   B                         A-                            14.750
   C                         BBB                           11.250
   D-1                       BB                             4.750
   D-2                       B+                             4.875
   Preferred shares          N.R.                          15.125


TERAYON COMMS: Appoints Mark Slaven to Board of Directors
---------------------------------------------------------
Terayon Communication Systems, Inc. (Nasdaq: TERN), a leading
provider of broadband solutions, announced the expansion of its
board of directors with the appointment of Mark Slaven, 46,
Executive Vice President and Chief Financial Officer for 3Com
Corporation (Nasdaq: COMS). Slaven will also serve on the
company's audit committee.

Slaven has more than 21 years of corporate finance and executive
management experience in the high technology and manufacturing
industries. Prior to his June 2002 appointment as CFO of 3Com,
Slaven served in a variety of executive-level finance roles within
the provider of voice and data networking products, services and
solutions. Slaven joined 3Com through its 1997 acquisition of U.S.
Robotics, where he was Vice President of Finance for U.S.
Robotics' manufacturing division. Before joining U.S. Robotics,
Slaven was CFO of the personal printer division of Lexmark
International, Inc., a developer, manufacturer and supplier of
printing solutions. Slaven also held a number of financial
management positions at IBM, including serving as CFO of its PS/1
Personal Computer division.

"We are confident that Mark's extensive experience in all aspects
of financial management and operations will make him a strong
complement to Terayon's board and I look forward to working
closely with him," said Zaki Rakib, Terayon's Chief Executive
Officer.  "His counsel will help us take full advantage of the
growth opportunities our leadership in DOCSIS(R) 2.0 (Data Over
Cable Service Interface Specification) cable data equipment
provides us."

Slaven holds a master's in business administration from the
University of Chicago and a bachelor's degree from Tufts
University.

Terayon Communication Systems, Inc. provides innovative broadband
systems and solutions for the delivery of advanced, carrier-class
voice, data and video services that are deployed by the world's
leading cable television operators. Terayon, headquartered in
Santa Clara, California, has sales and support offices worldwide,
and is traded on the Nasdaq under the symbol TERN. Terayon can be
found on the Web at http://www.terayon.com

                          *     *     *

As previously reported, Standard & Poor's revised its outlook on
cable Internet equipment company Terayon Communications Systems
Inc., to negative from stable after Terayon said that it had
expected lower revenues for the June 2002 quarter than it had
previously.

At the same time, Standard & Poor's affirmed Santa Clara,
California-based Terayon's single-'B'-minus corporate credit
rating and triple-'C' subordinated debt rating.

Terayon lowered its revenue expectations following a drop in sales
of proprietary cable products. The company also faces cable modem
pricing pressures and customer financial difficulties.


TOP-FLITE GOLF: Court Approves Callaway Golf's $125M Initial Bid
----------------------------------------------------------------
Callaway Golf Company (NYSE:ELY) announced the U.S. Bankruptcy
Court in Wilmington, Delaware, has established a process and a
timetable for the sale of substantially all the assets of The Top-
Flite Golf Company. Pursuant to the official order approved by the
Court at a hearing held today, Callaway Golf's initial bid of $125
million will be the "stalking horse" bid under a process where
other qualified bidders will have the opportunity to submit
"higher and better" offers.

Under the Court's approved bidding process, parties interested in
submitting a bid must become "qualified" and submit a bid not
later than August 27, 2003. Thus far, two parties in addition to
Callaway Golf have been officially designated "qualified bidders,"
and several others have indicated an interest in becoming
qualified. Bids must, among other things, provide for an aggregate
purchase price of at least $1.0 million over Callaway Golf's bid;
be on terms that are not materially more burdensome or conditional
than Callaway Golf's bid; and not be conditioned on obtaining
financing or the outcome of any due diligence. The breakup fee and
expense reimbursement provisions initially proposed as a part of
Callaway Golf's bid have been eliminated, and any competing bid
must also exclude any request for breakup fee or expense
reimbursement. In addition, Top-Flite must determine that a bid
submitted by a party other than Callaway Golf would likely be
consummated if selected.

If one or more qualified bids are received by the deadline, then
an auction will be held on September 3, 2003. Callaway Golf and
any qualified bidder who actually submitted a qualified bid will
be permitted to participate in the auction process on that day.
Top-Flite will select the best qualified bid presented during the
auction. If no qualified bid superior to Callaway Golf's initial
bid is received by the bid deadline, then Callaway Golf will be
the selected bidder and the auction process will not occur.

On September 4, 2003, Top-Flite will submit the best bid received
during this process to the Bankruptcy Court for approval.

"We are pleased to complete this important step, permitting us to
move closer to obtaining final approval of our bid for the assets
of Top-Flite," said Ron Drapeau, Chairman, President and CEO of
Callaway Golf. "Not only have we been selected as the lead bidder
for Top-Flite in the Section 363 process, but we have also
completed the antitrust review process required by the Hart-Scott-
Rodino Premerger Notification Act -- something that any other
bidder would need to complete. We stand ready to close our
transaction as soon after Bankruptcy Court approval as reasonably
possible."

The court rejected a request filed by adidas-Salomon AG to replace
Callaway Golf as the "stalking horse" bidder in the bankruptcy
process. That request had been filed after Callaway Golf and Top-
Flite had announced their agreement. Adidas-Salomon is the parent
company of Taylor Made Golf Company, Inc.

Callaway Golf Company makes and sells Big Bertha(R) Metal Woods
and Irons, including Great Big Bertha(R) II Titanium Drivers and
Fairway Woods, Big Bertha Steelhead(TM) III Stainless Steel
Drivers and Fairway Woods, Hawk Eye VFT Tungsten Injected(TM)
Titanium Irons, Big Bertha Stainless Steel Irons, Steelhead X-
16(TM) and Steelhead X-16 Pro Series Stainless Steel Irons, and
Callaway Golf Forged Wedges. Callaway Golf Company also makes and
sells Odyssey(R) Putters, including White Hot(R), TriHot(R),
DFX(TM) and Dual Force(R) Putters. Callaway Golf Company makes and
sells the Callaway Golf(R) HX(R) Blue and HX Red balls, the CTU
30(R) Blue and CTU 30 Red balls, the HX 2-Piece Blue and HX 2-
Piece Red balls, the CB1(R) Blue and CB1 Red balls, and the
Warbird(TM) golf balls. For more information about Callaway Golf
Company, visit its Web sites at http://www.callawaygolf.comand
http://www.odysseygolf.com


TROPICAL SPORTSWEAR: S&P Ratchets Credit Rating Down a Notch
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on apparel manufacturer Tropical Sportswear International
Corp. to 'B+' from 'BB-', and its subordinated debt to 'B-' from
'B'. These ratings remain on CreditWatch with developing
implications where they were placed June 3, 2003, following the
company's announcement that it has retained Merrill Lynch & Co. to
act as a financial advisor to explore strategic alternatives to
maximize long-term shareholder value.

"At the same time, Standard & Poor's assigned its 'BB-' senior
secured debt rating to Tropical Sportswear's $95 million revolving
bank credit facility due 2006," said credit analyst Jean C. Stout.
This rating also is on CreditWatch with developing implications.
The bank loan is rated one notch above the corporate credit
rating, reflecting the strong likelihood of full recovery of
principal under a default scenario. The 'BB' rating on the
company's prior bank loan has been withdrawn.

Tampa, Florida-based Tropical Sportswear had about $140 million of
debt outstanding at June 28, 2003.

Developing implications mean the ratings could be lowered,
affirmed, or raised following Standard & Poor's review of any
proposed transaction and its impact on the company's credit
quality.

The downgrade reflects weaker-than-expected financial performance,
which has resulted in credit protection measures that are below
Standard & Poor's expectations. The company's performance has been
affected by the weak economy and challenging conditions in the
retail apparel industry. Revenues and operating profits were
affected by adverse weather conditions during the spring and early
summer selling season that reduced store traffic especially at
department stores, destocking by retailers, greater than expected
sales returns and allowances and heavy discounting on excess
inventory. Moreover, Standard & Poor's expects Tropical
Sportswear's credit ratios will remain weak in the near term,
despite management's efforts to consolidate and reorganize its
Savane division, dispose of unprofitable businesses, shift
production to the Dominican Republic and reduce operating
expenses, because sales and operating earnings will continued to
be affected by the intense competition within the apparel
industry. The rating also reflects that Fleet Capital has agreed
to assume a real estate loan and remove its financial covenants, a
loan that was in technical default, and the agreement by all
lenders in the new revolving credit facility to waive the cross
default provision that was triggered by the situation of the real
estate loan.


UNITED STATIONERS: Second Quarter Earnings Results Show Decline
---------------------------------------------------------------
United Stationers Inc. (Nasdaq: USTR) reported net sales for the
second quarter ended June 30, 2003, of $955 million, up 6.4%
compared with sales of $898 million for the second quarter of
2002. Net income for the second quarter of 2003 was $15.1 million,
a 4.0% decrease from $15.7 million in the comparable period last
year. Earnings per share were $0.46 for the quarter, compared with
$0.46 for last year's three-month period. Earnings per share for
the second quarter of 2003 include a charge of $5.9 million, or
$0.11 per share, related to the early retirement of debt.
Excluding this charge, earnings per share were up 24% to $0.57,
compared with $0.46 in the prior-year quarter.

Net sales for the first half of 2003 reached $1.9 billion, up 4.3%
compared with sales of $1.8 billion in the same period last year.
Net income for the first half of 2003 was $27.8 million, or $0.85
per share, compared with $39.9 million, or $1.16 per share, in the
comparable prior-year period. For the six months ended June 30,
2003, income before the cumulative effect of a change in
accounting principle and the early retirement of debt was $38.0
million, or $1.16 per share. The results for the first six months
of 2002 include a favorable pre-tax restructuring charge reversal
(representing a portion of the restructuring accrual recorded in
the third quarter of 2001) of $2.4 million, or $0.04 per share. A
reconciliation of these items to the most comparable GAAP measure
is presented at the end of this release.

For the first half of 2003, net cash used in investing activities
was $1.7 million. This includes $5.3 million of capital
expenditures, partially offset by approximately $3.6 million in
proceeds from the sale of the company's Milwaukee and Charlotte
distribution centers. In addition, capitalized software costs were
$1.3 million, resulting in net capital spending of $3.0 million.
For 2003, the company expects net capital spending will be
approximately $20 million.

                     Early Retirement of Debt

As previously announced, in March 2003, the company expanded its
receivables securitization program and entered into a new senior
credit facility. The senior secured revolving credit facility has
an aggregate committed amount of $275 million and matures in March
2008. The expanded third-party receivables securitization program
provides maximum funding of $225 million.

On April 28, 2003, the company redeemed the entire $100 million
outstanding principal amount of its 8-3/8% Senior Subordinated
Notes due 2008, at a redemption price of 104.188% of the principal
amount, plus accrued interest. In connection with the refinancing
and the redemption of the Notes, the company recorded pre-tax
charges of $0.8 million, or $0.02 per share, in the first quarter
of 2003 and an additional $5.9 million, or $0.11 per share, in the
second quarter of 2003. The redemption of the Notes was financed
by cash generated from operations, the sale of accounts receivable
under the company's receivables securitization program, and
borrowings under the company's new revolving credit facility.

                       Reduction in Debt

"During the first half of 2003, we reduced total debt and
securitization financing by approximately $28 million," said
Richard Gochnauer, president and chief executive officer. "As a
result, our debt-to-total capitalization (including the
securitization financing) was 32.5% at June 30, 2003, compared
with 36.1% at December 31, 2002." A reconciliation of these items
to the most comparable GAAP measures is presented at the end of
this release.

             Second Quarter Reflects Continuing Trends

Gross margin trends reflect the ongoing shift in the company's
product mix toward a higher percentage of lower margin computer
consumables. The company's growth in this category has
accelerated, due in part to the addition of new customers, as well
as the bankruptcy filing of Daisytek International. At the same
time, the weak economic environment continues to shift customer
demand for other product categories toward consumable items and
away from higher margin, discretionary purchases. Gross margin for
the second quarter of 2003 declined to 14.1%, compared with 14.6%
in the prior-year quarter and 14.3% in the first quarter of 2003.

Operating expenses for the second quarter of 2003 were $102.2
million, or 10.7% of sales, compared with $101.4 million, or 11.3%
of sales, in the same period last year. Operating margin for the
second quarter of 2003 was 3.4%, up slightly from 3.3% in the
comparable year-ago quarter.

                            Outlook

"Our second quarter performance benefited from changes in the
competitive environment in addition to our efforts to build sales
while controlling costs," said Gochnauer. "The balance of the year
also should benefit from these favorable industry dynamics.
However, we are not yet seeing signs of any significant economic
improvement. We expect the rest of 2003 to be challenging from a
product mix perspective. We anticipate continuing growth in
consumables while other categories remain negatively affected by
the economy. Our year-over-year sales growth rate for July is
tracking in line with our second quarter growth rate. This growth
is primarily driven by computer consumables."

"Going forward, we are building the business to create a
sustainable competitive advantage. While our long-term objective
is to reduce our cost structure, we will be investing in people
and technology during the remainder of the year. We believe it is
prudent to invest now in marketing and operations. We are in the
process of recruiting product category managers who will focus on
driving sales growth, which will enable us to further leverage our
infrastructure. They will be responsible for developing tailored
marketing programs for specific product categories and sales
channels. In addition, we are strengthening our operations team
with the addition of several top operations executives. This team
will lead the effort to bring operational excellence into all
aspects of our business," explained Gochnauer.

"In 2004, we believe our organization will be well positioned to
achieve strong financial and operating performance, as well as to
capitalize on what we expect will be an improving economy,"
concluded Gochnauer.

United Stationers Inc., with trailing 12 months sales of
approximately $3.8 billion, is North America's largest broad line
wholesale distributor of business products and a provider of
marketing and logistics services to resellers. Its integrated
computer-based distribution system makes more than 40,000 items
available to approximately 15,000 resellers. United is able to
ship products within 24 hours of order placement because of its 35
United Stationers Supply Co. distribution centers, 24 Lagasse
distribution centers that serve the janitorial and sanitation
industry, two Azerty distribution centers in Mexico that serve
computer supply resellers, and two distribution centers that serve
the Canadian marketplace. Its focus on fulfillment excellence has
given the company an average order fill rate of better than 97%, a
99.5% order accuracy rate, and a 99% on-time delivery rate. For
more information, visit www.unitedstationers.com .

As reported in Troubled Company Reporter's January 15, 2003
edition, Standard & Poor's affirmed its 'BB' corporate credit
rating on United Stationers Supply Co., and revised its outlook
on the company to negative from positive.

Approximately $248 million of the Des Plains, Illinois-based
company's debt is affected by this action.


VENTAS INC: June 30 Net Capital Deficit Narrows to $47 Million
--------------------------------------------------------------
Ventas, Inc. (NYSE:VTR) said that normalized Funds From Operations
for the second quarter 2003 rose 18 percent to $31.2 million from
$23.0 million for the comparable 2002 period.

The increase in FFO resulted from increased rents from Ventas's
annual lease escalations, income from its 2002 investments, lower
debt balances that reduced interest expense, and its June 30, 2003
sale of 16 skilled nursing facilities in Florida and Texas to the
Company's largest tenant, Kindred Healthcare, Inc. (NASDAQ: KIND).

"Ventas's second quarter was excellent. Our 18 percent increase in
FFO reflects the Company's strong internal growth from its lease
escalators, the results of its consistent debt pay down efforts
and the impact of 2002 acquisitions," Chairman, President and CEO
Debra A. Cafaro said. "In addition, the successful sale of 16
skilled nursing assets to Kindred represented a major positive for
both companies. We are entering the second half of the year with
our focus clearly set on implementing our diversification strategy
and maintaining reliable and growing cash flow."

Normalized FFO for the six months ended June 30, 2003 was $59.1
million, or $0.74 per diluted share, a 16 percent increase from
the same period in the prior year of $45.0 million, or $0.64 per
diluted share.

Normalized FFO for all periods excludes (a) gains on sales of
Kindred common stock, (b) a $20.2 million reversal of a previously
recorded contingent liability, which was recorded as income in the
first quarter of 2003, (c) losses from extinguishment of debt and
(d) a one-time swap breakage incurred in connection with the
Company's refinancing in April 2002.

After discontinued operations of $0.5 million related to the sale
of the 16 skilled nursing facilities, Ventas reported second
quarter net income of $16.1 million, or $0.20 per diluted share.
After discontinued operations of $23.4 million, or $0.34 per
share, net income for the second quarter ended June 30, 2002 was
$26.5 million, or $0.38 per diluted share. A breakdown of
discontinued operations is included in a schedule attached to this
Press Release.

After discontinued operations of $1.3 million, or $0.01 per
diluted share, net income for the six months ended June 30, 2003
was $53.4 million, or $0.67 per diluted share. Net income for the
six months ended June 30, 2002 was $39.2 million, or $0.56 per
diluted share, after discontinued operations of $25.2 million, or
$0.36 per diluted share.

At June 30, 2003, the Company's balance sheet shows a total
shareholders' equity deficit of about $47 million.

      SECOND QUARTER HIGHLIGHTS AND OTHER RECENT DEVELOPMENTS

-- Ventas completed its sale of 16 skilled nursing facilities in
    Florida and Texas to its primary tenant, Kindred, for $59.7
    million, plus a $4.1 million lease termination fee. Annualized
    rent on the 16 facilities was $9 million.

-- Ventas and Kindred amended the Master Leases (1) to increase
    rent on certain facilities by $8.6 million on an annualized
    basis for approximately seven years and (2) to make all lease
    escalations payable in cash.

-- Ventas used a portion of the net proceeds from the sale of the
    16 skilled nursing facilities to repay in full the Company's
    settlement agreement with the Department of Justice.

-- The Company reduced its indebtedness during the second quarter
    by $30.3 million.

-- Ventas appointed Thomas C. Theobald, a Managing Director with
    William Blair and the retired Chairman and Chief Executive
    Officer of Continental Bank Corporation, to its Board of
    Directors.

-- The Company sold a total of 140,000 shares of Kindred common
    stock at an average price of $18.73 per share. As of June 30,
    2003, the Company owned 780,814 shares of Kindred common stock.
    During the period July 1, 2003 through July 15, 2003, the
    Company sold an additional 428,407 shares of Kindred common
    stock at an average net price of $22.35 per share. As of
    July 15, 2003, the Company owned 352,407 shares of Kindred
    common stock.

-- The 237 skilled nursing facilities and hospitals leased to
    Kindred produced EBITDAR to rent coverage of 1.7x for the
    trailing twelve month period ended March 31, 2003.

                 SECOND QUARTER 2003 RESULTS

Revenue for the quarter ended June 30, 2003 was $50.2 million, of
which $46.0 million (or 91.6 percent) resulted from leases with
Kindred. Expenses for the quarter ended June 30, 2003 totaled
$34.5 million, and included $10.2 million of depreciation expense,
$16.1 million of interest expense on debt financing and $3.8
million of interest expense on the United States Settlement, which
was paid in full without prepayment penalty or premium. General,
administrative and professional expenses for the second quarter
totaled $3.8 million.

                     SIX MONTH 2003 RESULTS

Revenue for the six months ended June 30, 2003 was $98.4 million,
of which $90.9 million (or 92.4%) resulted from leases with
Kindred. Expenses for the six months ended June 30, 2003 totaled
$46.3 million, were reduced by the $20.2 million reversal of a
contingent liability and included $20.4 million of depreciation
expense, $32.4 million of interest expense and $4.9 million of
interest expense on the United States Settlement, which was paid
in full. General and administrative and professional expenses for
the six months ended totaled $7.7 million.

Ventas said that, as required by accounting principles generally
accepted in the United States ("GAAP"), it will re-issue three
prior years' financial statements (2000-2002) in an updated format
in accordance with the adoption of SFAS 145 to reclassify the loss
on extinguishment of debt as continuing operations. SFAS 145,
"Rescission of FASB Statements No. 4, 44, and 64, Amendment of
FASB 13, and Technical Corrections" was adopted by the Company in
2003, as required by GAAP.

This reclassification does not change the Company's net income or
normalized FFO for any period and only affects the presentation of
results for the prior periods by conforming the presentation of
those prior financial statements to the format adopted in 2003. As
required, the loss on the extinguishment of debt will be reflected
as a separate line item in the Consolidated Statements of
Operations and will be included in continuing operations rather
than being shown as an extraordinary loss. The Company incurred
charges for the extinguishment of debt in connection with the
refinancing of the entire outstanding principal balance of its
indebtedness during Kindred's bankruptcy proceedings in 2000 and
again in 2001 and 2002 to reposition itself following Kindred's
successful restructuring. The Company has excluded extinguishment
of debt charges from normalized FFO.

Under SEC requirements for transitional disclosure, the
reclassification of extraordinary items to continuing operations
required by SFAS No. 145 is required for previously issued annual
financial statements for each of the three years shown in the
Company's last annual report on Form 10-K if those financials are
incorporated by reference in subsequent filings with the SEC made
under the Securities Act of 1933, as amended, even though those
financial statements relate to periods prior to adoption of SFAS
No. 145.

In addition, Ventas will include in the re-issued financial
statements the reclassification of the results of 15 Florida
facilities and 1 Texas facility sold to Kindred on June 30, 2003
as discontinued operations. This reclassification does not change
the Company's net income or normalized FFO and only affects the
presentation of results for the prior periods by conforming the
presentation of those prior financial statements to the format
adopted in 2002. In accordance with SFAS No. 144 "Accounting for
the Impairment or Disposal of Long Lived Assets" ("SFAS No. 144"),
the results of operations and gain/(loss) on real estate
properties sold or held for sale subsequent to December 31, 2001
are reclassified into a single line in the Consolidated Statement
of Operations as discontinued operations for all periods
presented.

The financial statements attached to this Press Release reflect
the reclassification for all periods presented.

                           FFO GUIDANCE

Ventas said it reaffirmed its 2003 normalized FFO guidance of
$1.50 to $1.52 per diluted share and its 2004 normalized FFO
guidance of $1.55 to $1.57.

The Company's FFO guidance (and related GAAP earnings projections)
for 2003 and 2004 exclude gains and losses on the sales of assets,
the non-cash effect of swap ineffectiveness under SFAS 133 and the
impact of acquisitions, additional divestitures and other capital
transactions. Reconciliation of the FFO guidance to the Company's
projected GAAP earnings is provided on a schedule at the
conclusion of this press release. The Company may from time to
time update its publicly announced FFO guidance, but it is not
obligated to do so.

The Company's FFO guidance is based on a number of assumptions,
which are subject to change and many of which are outside the
control of the Company. If actual results vary from these
assumptions, the Company's expectations may change. There can be
no assurance that the Company will achieve these results.

Ventas, Inc. is a healthcare real estate investment trust that
owns 44 hospitals, 204 nursing facilities and nine other
healthcare and senior housing facilities in 37 states. The Company
also has investments in 25 additional healthcare and senior
housing facilities. More information about Ventas can be found on
its Web site at http://www.ventasreit.com


VENTURES NATIONAL: Liquidity Concerns Raise Going Concern Doubt
---------------------------------------------------------------
Ventures National Inc. is a manufacturer of time sensitive, high
tech, prototype and pre-production rigid and rigid flex printed
circuit boards providing time-critical printed circuit board
manufacturing services to original equipment manufacturers and
electronic manufacturing services providers through its wholly-
owned subsidiaries Titan EMS, Inc. and Titan PCB East, Inc. Its
prototype printed circuit boards serve as the foundation in many
electronic products used in  telecommunications, medical devices,
automotive, military applications, aviation components, networking
and computer equipment.

As of May 31, 2003, Titan had a working capital deficit of
$1,558,263 and an accumulated deficit of $5,275,757.  Through
May 31, 2003, the Company has not been able to generate sufficient
revenue from its operations to cover its costs and operating
expenses.  Although the Company has been able to issue its common
stock through private placements to raise capital in order to fund
its operations, it is not known whether the Company will be able
to continue this practice, or be able to obtain other types of
financing or if its revenue will increase significantly to be able
to meet its cash operating expenses. This, in turn, raises
substantial doubt about the Company's ability to continue as a
going concern.  Management anticipates revenue to grow as a result
of additional products offered to its customers after the move to
its new facility.  Management believes that the private equity
financing and new product offerings will enable the Company to
generate positive operating cash flows and continue its
operations.  However, no assurances can be given as to the success
of these plans.


WASHINGTON MUTUAL: Fitch Upgrades & Affirms Various Ratings
-----------------------------------------------------------
Fitch Ratings has taken rating actions on the following Washington
Mutual residential mortgage-backed certificates:

Washington Mutual, mortgage pass-through certificates, series
1999-WM3 Group 1

         -- Class 1-A affirmed at 'AAA';
         -- Class 1-M-1 affirmed at 'AAA';
         -- Class 1-M-2 upgraded to 'AAA' from 'AA+';
         -- Class 1-M-3 upgraded to 'AA' from 'AA-';
         -- Class 1-B-1 upgraded to 'A+' from 'A';
         -- Class 1-B-2 upgraded to 'BB+' from 'BB'.

Washington Mutual, mortgage pass-through certificates, series
1999-WM3 Group 2

         -- Class 2-A affirmed at 'AAA';
         -- Class 2-M-1 affirmed at 'AAA';
         -- Class 2-M-2 upgraded to 'AAA' from 'AA+';
         -- Class 2-M-3 upgraded to 'AAA' from 'AA-';
         -- Class 2-B-1 upgraded to 'AA' from 'A';
         -- Class 2-B-2 affirmed at 'BB'.

These rating actions are being taken as a result of low
delinquencies and losses, as well as increased credit support.

Realized losses are allocated to the subordinated classes of the
related group until all of the subordinated classes in the related
group are reduced to zero before being allocated to the other loan
group. The rating changes above reflect this particular loss-
allocation structure.


WEIRTON STEEL: Court Okays Proposed Reclamation Claim Procedures
----------------------------------------------------------------
Weirton Steel Corporation received reclamation demands from 31
creditors totaling approximately $4,111,691 from vendors seeking
to reclaim goods sold to the Debtor on credit prior to the
Petition Date. According to Robert G. Sable, Esq., at McGuireWoods
LLP, in Pittsburgh, Pennsylvania, most of the Reclamation Claims
are subject to several defenses relating to a claimant's failure
to establish a prima facie claim for reclamation, including, but
not limited to:

     (1) the timeliness of the reclamation notice,

     (2) the condition of the goods,

     (3) goods were not in the Debtor's possession, or

     (4) were not identifiable at the time the Reclamation Claim
         was received.

Accordingly, the Debtor sought and obtained the Court's authority
to:

     -- deny any demand for the reclamation of goods asserted by
        any vendor asserting Reclamation Claims, and

     -- establish procedures for the administration of Reclamation
        Claims to streamline the process and evaluate each
        Reclamation Claim in the most efficient and cost effective
        manner.

Specifically, the Court authorizes the Debtor to implement these
procedures:

     (a) All demands for the return of goods that are the subject
         of Reclamation Claims will be denied, and Reclamation
         Claimants will be enjoined from seeking to reclaim goods
         sold to the Debtor prepetition; however, the Debtor may,
         at its own election, in an exercise of its reasoned
         business judgment, determine to surrender goods subject to
         Reclamation Claims in satisfaction of the Reclamation
         Claim of any Reclamation Claimant;

     (b) The Debtor is required to file a report and serve the
         Reclamation Report on each Reclamation Claimant
         identifying:

         (1) the name of each Reclamation Claimant,

         (2) the date on which each Reclamation Claim was received
             by the Debtor,

         (3) the alleged amount of each Reclamation Claim,

         (4) the amount, if any, of each Reclamation Claim to which
             the Debtor consents as allowable in accordance with
             Section 546(c) of the Bankruptcy Code; and

         (5) the defenses to each Reclamation Claim, if any,
             asserted by the Debtor;

     (c) Each Reclamation Claimant will be afforded a 20-day period
         from the date of service of the Reclamation Report by the
         Debtor in which to file a response to the Reclamation
         Report, which Response will state with specificity the
         reasons why the amount of the Allowable Reclamation Claim
         or the defenses asserted by the Debtor to a Reclamation
         Claim in the Reclamation Report are alleged to be
         incorrect by each Reclamation Claimant.  The Reclamation
         Claimant's failure to file a Response to the Reclamation
         Report on or before the Response Deadline will be deemed
         to be a consent by each Reclamation Claimant to the amount
         of the Allowed Reclamation Claim asserted by the Debtor in
         the Reclamation Report;

     (d) The Debtor and each Reclamation Claimant filing a Response
         will be afforded a 20-day period from the Response
         Deadline in which to attempt to resolve issues relating to
         disputed Reclamation Claims.  After which, the Debtor
         will file a Supplemental Reclamation Report indicating the
         Reclamation Claims that remain unresolved, and request a
         hearing to establish a trial schedule for resolution of
         disputed Reclamation Claims.  At trial, the Reclamation
         Claimant will be required to prove:

         (1) timely submission of the reclamation request,

         (2) the value of the goods submitted to the Debtor in the
             applicable reclamation period, and

         (3) compliance with all other applicable state or common
             law reclamation requirements; and

     (e) All Reclamation Claims that are allowed pursuant to these
         procedures will be treated as administrative expenses of
         the Debtor's estate, payable on confirmation of a
         reorganization plan.  Reclamation Claimants will not be
         required to initiate adversary proceedings or to take any
         procedural steps, other than those set forth, to preserve
         or perfect their Reclamation Claims.

Mr. Sable notes that a vendor asserting a reclamation claim bears
the burden of proof by a preponderance of the evidence to
demonstrate that it has satisfied all requirements entitling it
to a right of reclamation under applicable state law and Section
546(c)(1).  In the case at bar, Mr. Sable asserts that majority
of the Reclamation Claims are invalid for one or more of the
these reasons:

     (1) The Debtor did not receive the reclamation demand within
         the timeframe established by Section 546(c);

     (2) The Reclamation Claimant cannot meet its burden to
         demonstrate that the reclaimed goods were identifiable and
         in the Debtor's possession when the Debtor received the
         relevant Reclamation Demand;

     (3) The Reclamation Claimant had knowledge of the Debtor's
         insolvency when it delivered some or all of the reclaimed
         goods; and

     (4) The Reclamation Claim does not adequately describe the
         reclaimed goods.

In any event, Section 546(c)(2) provides that the Court may deny
reclamation to a seller that has made a demand, if the Court
grants the seller an administrative claim or secures the claim by
a lien.  Thus, even if a vendor properly establishes a
reclamation claim, the Court may preclude the vendor from
recovering the goods when the necessity of the goods to the
debtor's reorganization outweighs the seller's need to recover
and resell the goods.

Mr. Sable relates that a significant majority of the goods
subject to Reclamation Claims were not in the Debtor's possession
or were not otherwise identifiable at the time the Reclamation
Claim was received.  Moreover, the goods subject to Reclamation
Claims are at the core of the Debtor's business operations and
are necessary to its reorganization.  Particularly, a portion of
the goods subject to Reclamation Claims comprise of parts and
equipment associated with the Debtor's Tandem Mill, Hot Mill and
Tin Mill.

On the Petition Date and thereafter, Mr. Sable reminds the Court,
JP Morgan Trust Company, N.A., as indenture trustee held a lien
and security interest in, inter alia, equipment and fixtures now
owned or existing or created relating to and associated with the
Debtor's Tandem Mill, Hot Mill and Tin Mill.

Absent the establishment of an orderly process in which to
address Reclamation Claims, the Debtor will be forced to address
several hundred Reclamation Claims on an individual basis.  In
contrast, Mr. Sable emphasizes, the Reclamation Claims Procedures
will establish a uniform procedure for the efficient resolution
of Reclamation Claims, establish the treatment of Allowable
Reclamation Claims, and ensure the continuous supply and use of
goods that are essential to the Debtor's business operations and
integral to its successful reorganization.

The Court rules that allowable Reclamation Claims will be granted
administrative priority claim status in accordance with Sections
503(b) and 507(a)(1) of the Bankruptcy Code, payable upon
confirmation of a reorganization plan. (Weirton Bankruptcy News,
Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-0900)


WESTPOINT STEVENS: Wants Nod for Holcombe Green Separation Pact
---------------------------------------------------------------
Holcombe T. Green, Jr., has been Chairman and Chief Executive
Officer of WestPoint Stevens Inc. since October 22, 1992.
Mr. Green is a member of the Board of Directors and WestPoint
Stevens' Management Pension Committee that is responsible for,
among other things, monitoring the performance of plan trustees
and investment managers for WestPoint Stevens' pension and
retirement plans.  Mr. Green has provided leadership and
direction in many aspects of WestPoint Stevens' business for over
11 years, including the period leading up to the Petition Date.

Before the Petition Date, the Debtors entered into arm's-length
negotiations with certain of their bondholders in an effort to
restructure, among other things, their outstanding debt
obligations arising under the 7-7/8% senior unsecured notes due
2005 and the 7-7/8% senior unsecured notes due 2008.  The
extensive negotiations culminated in the parties' agreement to
the terms of a Restructuring Proposal on May 31, 2003.  Among
other things, the parties agreed that Mr. Green would resign as
Chairman and CEO.

Accordingly, the Debtors engaged in negotiations with Mr. Green
regarding the payments and benefits he may be entitled to receive
in connection with his resignation and his performance of certain
services at the Debtors' request subsequent to his resignation.
The purpose of the negotiations was to substitute a new severance
package for the one that would be due Mr. Green in accordance
with his pre-existing severance agreement.

Under the Existing Employment Agreement, if Mr. Green were
terminated without "Cause" or if he were to terminate his
employment for "Good Reason" as those terms are defined in the
Existing Employment Agreement, Mr. Green would be entitled to
these severance payments:

    (i) His annual base salary times the number of whole and
        fractional years of the remaining employment term;

   (ii) The applicable target bonus amount payable under the
        Debtors' Management Incentive Plan times the number of
        years of the remaining employment term; and

  (iii) All outstanding unvested awards under the Debtors' Key
        Employee Stock Bonus Plan and the Omnibus Stock Incentive
        Plan, which would become immediately vested and
        exercisable, as applicable.

The Debtors estimate that under the Existing Employment
Agreement, Mr. Green would be entitled to receive $4,078,8002 in
cash payment in addition to the value to be subscribed to the
other awards and incentives under the Plans.  The $4,078,800
represents the Debtors' estimate of the severance due based on
the Existing Employment Agreement.  The amount includes
$2,549,250 in salary and the remainder attributable to Mr.
Green's entitlement under the Management Incentive Plan based on
last year's performance target, and other unvested Stock plans.

The Debtors have reached an agreement with regard to Mr. Green's
resignation in accordance with a Separation and Settlement
Agreement, which the Debtors now ask the Court to approve.

The Separation Agreement is made up of three components:

     1. The severance payments,

     2. The consulting services, and

     3. The releases.

(A) The Severance Payments

      Pursuant to the Separation Agreement, Mr. Green will receive
      a $1,000,000 cash payment due immediately on his resignation
      rather than the $4,000,000 cash payment immediately due under
      his Existing Employment Agreement.

(B) Consulting Services

      Mr. Green has agreed to continue to make himself available to
      WestPoint Stevens, as a consultant through December 31, 2005,
      for a minimum of 40 hours per month.  In return for these
      consulting services, Mr. Green will be paid, in bi-weekly
      installments -- $425,000 for the remainder of 2003 and
      $475,000 per year for each of 2004 and 2005.  Thus, the
      total cash payments under the Separation Agreement as
      severance and services to be rendered through 2005 are
      $2,375,000.

(C) The Releases

      The Debtors have agreed to release Mr. Green and related
      companies from all obligations due and owing to WestPoint
      Stevens as a result of the joint venture with HTG Corp., a
      corporation wholly owned by Mr. Green.

      In 2000, WestPoint Stevens acquired an interest in a limited
      liability company, HTG Falcon, LLC.  The only other member of
      HTGF was HTG.  At the time of the acquisition, HTG Falcon was
      the beneficial owner of a Falcon 2000 jet aircraft, which had
      been contributed by HTG along with other property at a
      valuation of $23,400,000.  After accounting for liens and
      other obligations relating to the property, HTG had a
      $4,300,000 equity position in HTG Falcon.

      In 2001, HTG Falcon sold the aircraft to an unrelated third
      party at a price below its book value, resulting in a loss.
      HTG's portion of the loss from the sale of the airplane,
      along with distributions and other charges, created a
      negative capital account balance for HTG in HTG Falcon
      amounting to $4,500,000.  WestPoint Stevens recorded
      $7,500,000 as non-cash charge representing its entire
      investment in HTG Falcon.  On November 29, 2001, WestPoint
      Stevens entered into a letter agreement with HTG pursuant to
      which HTG agreed to restore its $4,500,000 negative capital
      account deficit plus interest -- the Amount Due -- in
      installment payments, with the last payment due on
      November 29, 2004.

      In connection with the entry into the Letter Agreement, Mr.
      Green also caused Vytech Holdings, Inc., another company
      wholly owned by him, to enter into a guaranty agreement in
      WestPoint Stevens' favor.  Under the Guaranty Agreement,
      Vytech guaranteed payment of the Amount Due as well as HTG's
      performance under the Letter Agreement.  Mr. Green also
      agreed to provide support, to the extent necessary, including
      contributions to Vytech's capital, to permit Vytech to
      maintain a value of at least two times the outstanding Amount
      Due.

      On November 29, 2002, HTG made a $1,306,737 initial payment
      on the Amount Due consisting of $651,616 in cash and the
      surrender of $655,121 worth of Mr. Green's rights to
      WestPoint Stevens stocks reducing the total amount owed to
      the Debtors to $3,886,180.

In exchange for his entry into the Separation Agreement, Mr.
Green has agreed to release and forever discharge the Debtors
from any and all arbitrations, claims, demands, damages, suits,
proceedings, actions, and causes of action. (WestPoint Bankruptcy
News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


WINWIN GAMING: Pulls Plug on Smith & Co.'s Engagement as Auditor
----------------------------------------------------------------
On July 15, 2003, Smith & Company, the independent certified
public accountants and auditors of WinWin Gaming, Inc., for fiscal
2002, were terminated by WinWin Gaming, Inc., from further audit
services to the Company. The termination was approved by the Board
of Directors of the Company.

During the fiscal year ended December 31, 2002, the report dated
April 11, 2003, of Smith & Company for such fiscal year indicated
conditions which raised substantial doubt about the Company's
ability to continue as a going concern.

Effective July 15, 2003, Livingston, Wachtell & Co., L.L.P.
located at 1140 Avenue of the Americas, New York, New York 10036-
5803 was engaged by the Company to audit the consolidated
financial statements of the Company for its fiscal year ending
December 31, 2003, and the related statements of income,
stockholders' equity, and cash flows for the year then ending.


WORLD AIRWAYS: Files Exchange Offer for Convertible Debentures
--------------------------------------------------------------
World Airways, Inc., (Nasdaq: WLDA) has filed a registration
statement, a tender offer statement and other related documents
with the Securities and Exchange Commission to commence an
exchange offer for its outstanding 8% Convertible Senior
Subordinated Debentures due 2004.

World Airways is offering to exchange up to $40,545,000 principal
amount of newly issued 8% Convertible Senior Subordinated
Debentures due 2009 for its existing 8% Convertible Senior
Subordinated Debentures due 2004.  The new convertible debentures
will be exchanged for an equal principal amount of existing
convertible debentures tendered.

Hollis Harris, chairman and CEO of World Airways, said,
"Restructuring our bonds is a key condition to securing approval
of the federal loan guarantee from the Air Transportation
Stabilization Board (ATSB).  The completion of the federal loan
guarantee, combined with our other recent achievements and
financial results, would put us on solid ground."

He added, "Over the last six months, our work with the U.S.
military has remained strong, we've increasingly diversified our
business, and we've built our contract backlog and pipeline.
Renegotiating with our bondholders and receiving the loan
guarantee represent an important milestone, paving the way for our
future growth plans."

World Airways, Inc. received conditional approval from the Air
Transportation Stabilization Board on April 23, 2003, for a
federal loan guarantee of $27.0 million, representing 90% of a new
$30 million term loan facility.  The ATSB guarantee is subject to
a number of conditions, including a requirement that World
Airways, Inc. restructure its existing convertible debentures to
extend their maturity beyond the maturity of the ATSB guaranteed
loan.

The exchange offer is subject to the satisfaction or waiver by the
Company of several conditions, including one that a minimum of
$38,500,000 of the principal amount of the existing convertible
debentures, representing approximately 95% of the outstanding
existing convertible debentures, has been validly tendered and not
withdrawn prior to the expiration date of the exchange offer and
concurrent funding of the ATSB guaranteed loan.

World Airways' goal is to complete the debenture exchange and
receive approval from the ATSB for the federal loan guarantee by
the middle of September.

Utilizing a well-maintained fleet of international range, wide-
body aircraft, World Airways, Inc. has an enviable record of
safety, reliability and customer service spanning more than 55
years.  The Company is a U.S. certificated air carrier providing
customized transportation services for major international
passenger and cargo carriers, the United States military and
international leisure tour operators.  Recognized for its modern
aircraft, flexibility and ability to provide superior service,
World Airways, Inc. meets the needs of businesses and governments
around the globe.  For more information, visit the Company's Web
site at http://www.worldair.com

World Airways Inc.'s March 31, 2003 balance sheet shows a working
capital deficit of about $22 million, and a total shareholders'
equity deficit of about $22 million.


WORLDCOM INC: Wants Blessing to Pull Plug on Adelphia Agreements
----------------------------------------------------------------
Worldcom Inc., and its debtor-affiliates seek authority to reject
the Service Orders effective 30 days following the notice of
disconnect under the Service Orders with Adelphia Communications
Corporation and Adelphia Business Solutions Inc.

Thomas R. Califano, Esq., at Piper Rudnick LLP, in New York,
informs the Court that UUNET Technologies Inc. entered into a
Master Services Agreement with Adelphia Business Solutions Inc.
effective as of July 26, 2000 pursuant to which the parties
entered into a Primary Rate Interface Service Schedule also
effective as of July 26, 2000.  Pursuant to the PRI Service
Schedule, UUNET had the right to enter into an agreement for the
use of a specific PRI circuit on Adelphia Business'
telecommunications network by issuing a service order.  UUNET
issued a number of service orders for PRI circuits. Specifically,
these service orders include service orders for 670 PRI circuits
which UUNET is no longer utilizing.  Thus, WorldCom has determined
that the circuits under those certain specific PRI Service Orders
provide no benefit to its bankruptcy estates.

Mr. Califano adds that MCImetro Access, as assignee of MCI
Telecommunications Corporation, is a party to a Master Services
Agreement dated December 10, 1993, with Hyperion
Telecommunications, Inc., now known as Adelphia Business, by
which MCImetro Access had the right to enter into separate
agreements for the use of specific egress circuits.  MCImetro
Access entered into a number of service agreements for egress
circuits.  The Master Services Agreement expired of its own terms
in June 2002; however, a number of service agreements have
remaining terms which continue beyond the term of the Master
Services Agreement.  Specifically, these service agreements
include service agreements for 18 egress circuits which MCImetro
Access is no longer utilizing.  Thus, WorldCom has determined
that the circuits under these specific Egress Service Orders
provide no benefit to its bankruptcy estates.  The total monthly
cost under the PRI Service Orders and the Egress Service Orders
is $203,444 or $2,441,328 per annum.

Based on representations made by Adelphia Business in its
bankruptcy case and by Adelphia Communications in its separately
administered bankruptcy case, Mr. Califano reports that in two
separate transactions in December 2000 and October 2001, Adelphia
Communications acquired certain assets, including contract
rights, from Adelphia Business.  Further, at the time of the
Acquisition, Adelphia Communications owned 79% of the outstanding
stock of Adelphia Business.  Both parties have indicated that it
is unclear whether all of the assets and contracts that were to
be assigned in connection with the Acquisition were, in fact,
legally transferred or assigned.  Moreover, there is a concern
that the other contracting parties may not have been notified of
certain assignments to Adelphia Communications and therefore,
understand that Adelphia Business is still a party to assigned
contracts.  For this reason, WorldCom is also seeking relief as
against Adelphia Communications in the event it is determined
that the Service Orders were in fact assigned to Adelphia
Communications.

Mr. Califano insists that UUNET no longer needs the capacity
under the PRI Circuits obtained pursuant to the PRI Service
Orders and MCImetro Access no longer needs the capacity under the
Egress Circuits under those specific Egress Service Orders.  All
of the traffic that was previously on the Circuits under the
Service Orders has been re-routed to other systems.  Thus,
WorldCom expects to have no use in its ongoing business for the
Circuits obtained under these specific service orders, defined
herein as the Service Orders.  Continued use of the Service
Orders would be a cash drain on the WorldCom bankruptcy estates.

In the course of reviewing its network needs and availability,
WorldCom has reviewed the Service Orders and has determined that
there is no longer any value or utility to them for their
bankruptcy estates.  Mr. Califano asserts that WorldCom is no
longer using any of the Circuits under the Service Orders because
all of the remaining traffic has been diverted to other systems.
By rejecting the Service Orders, WorldCom will save its
bankruptcy estates $2,400,000 per annum for circuitry that are
unnecessary.  There is no market for the Circuits under the terms
of the Service Orders as these Circuits were provided to meet
WorldCom's unique network requirements.  In addition, any entity
wishing these services would purchase them directly from Adelphia
or another carrier at today's rates.  The Service Orders are a
cash drain on the WorldCom bankruptcy estates and should be
rejected. (Worldcom Bankruptcy News, Issue No. 32; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


W.R. GRACE: Net Capital Deficit Narrows to $168 Mill. at June 30
----------------------------------------------------------------
W. R. Grace & Co. (NYSE:GRA) reported that 2003 second quarter
sales totaled $503.4 million compared with $471.8 million in the
prior year quarter, a 6.7% increase. Favorable currency
translation effects from a weaker U.S. dollar accounted for most
of the increase, with revenue from acquisitions and added volume
in certain product lines also contributing. Second quarter net
income was $6.5 million, compared with net income of $21.2 million
in the second quarter of 2002. Pre-tax income from core operations
in the second quarter of 2003 was $33.6 million compared with
$56.6 million in the second quarter of 2002. Operating results
continued to be adversely affected by economic weakness,
particularly in U.S. commercial construction, and by higher
manufacturing and energy costs. The 2003 second quarter also
includes higher pension expense to account for the effect of
negative investment returns on Grace's defined benefit pension
plans in recent years.

"We continued to experience a difficult operating environment in
the second quarter," said Grace Chairman, President and Chief
Executive Officer Paul J. Norris. "While we have seen some signs
of economic recovery, demand for our products generally remained
soft. When combined with continued higher production costs and
significant increases in pension expense, we realized lower
operating profits for the quarter. We are beginning to see some
improvement in our production costs and are looking to our growth
programs and cost management initiatives to deliver a better
second half of the year."

For the first six months of 2003, Grace reported sales of $948.2
million, a 7.1% increase over 2002. Currency translation accounted
for 5.5 percentage points of the increase, with acquisition
revenue in catalyst products also contributing. Net income and
diluted EPS were $4.2 million and $0.06 per share in 2003,
compared with $33.6 million and $0.51, respectively, for the first
six months of 2002. Pre-tax income from core operations was $47.1
million, compared with $90.4 million for the first six months of
2002. Year-to-date pre-tax operating margin was 5.0%, about half
of the prior year level. The decline in year-to-date operating
profit and margins was caused by a combination of lower sales of
building materials, an unfavorable regional sales mix with sales
down in North America, and overall higher costs for pensions,
certain raw materials, natural gas and plant maintenance, offset
by productivity gains.

                          CORE OPERATIONS

Davison Chemicals

Catalyst and Silica Products

Second quarter sales for the Davison Chemicals segment were $261.6
million, up 7.8% from the prior year quarter. Excluding the
effects of favorable currency translation, sales were up 1.0% for
the quarter. Sales of catalyst products, which include refining
catalysts, polyolefin catalysts and other chemical catalysts, were
$186.6 million, up 6.1% compared with the prior year quarter,
primarily attributable to currency effects and an acquisition
completed in Japan in August 2002. Catalyst sales were notably
lower in North America, primarily due to lower demand compared
with the second quarter of 2002. Sales of silica products were
$75.0 million, up 12.4% compared with the second quarter of 2002,
primarily from currency effects of the stronger Euro. Volume
increases from growth programs in digital printing and separations
applications were offset by lower sales of base products.

Operating income of the Davison Chemicals segment was $27.3
million, 28.5% lower than the 2002 second quarter; operating
margin was 10.4%, lower than the prior year quarter by 5.3
percentage points. Operating income and margins in the second
quarter of 2003 were negatively affected by higher manufacturing
costs, primarily from higher natural gas prices and maintenance
requirements at certain production facilities.

Year-to-date sales for the Davison Chemicals segment were $500.7
million, up 9.7% from 2002 (excluding currency translation
impacts, sales were up 2.9%). Year-to-date operating income was
$47.6 million, compared with $63.8 million for the prior year, a
25.4% decrease. Year-to-date operating results reflect similar
economic and cost factors as experienced in the second quarter.

Performance Chemicals

Construction Chemicals, Building Materials, and Sealants and
Coatings

Second quarter sales for the Performance Chemicals segment were
$241.8 million, up 5.5% from the prior year quarter. Favorable
currency translation accounted for 4.5 percentage points of the
increase. Volume gains outside of North America were offset by
continued weakness in North American commercial construction.
Sales of specialty construction chemicals, which include concrete
admixtures, cement additives and masonry products, were $114.0
million, up 7.1% versus the year-ago quarter (2.1% excluding
currency translation impacts). Sales were strong in geographic
regions other than North America, reflecting the success of new
product programs and sales initiatives in key economies worldwide.
Sales of specialty building materials, which include waterproofing
and fire protection products, were $59.6 million, down 0.7% (down
3.5% before translation impacts) compared with a strong second
quarter in 2002. The decline reflects continued softness in North
American construction and re-roofing activity, due partly to an
unusually rainy spring and the effects of new building codes that
permit less fire protection materials to be applied to structural
steel. Sales of specialty sealants and coatings, which include
container sealants, coatings and polymers, were $68.2 million, up
8.6% compared with the second quarter of 2002 (up 3.3% before the
effect of currency translation), reflecting growth initiatives in
coatings and closure compounds, particularly in Europe and Asia.

Operating income for the Performance Chemicals segment was $25.8
million, compared with $28.2 million in the prior year quarter.
Operating margin of 10.7% was 1.6 percentage points lower than
2002 second quarter margin, reflecting higher raw material and
transportation costs and unfavorable regional and product mix.
Operating income, although favorably impacted by sales growth in
construction chemicals (outside North America) and in coatings and
closure compounds, was adversely affected by lower sales of
building materials.

Year-to-date sales of the Performance Chemicals segment were
$447.5 million, up 4.4% from 2002 (excluding currency translation
impacts, sales were up 0.4%). Year-to-date operating income was
$37.9 million, compared with $46.8 million for the prior year, a
19.0% decrease, reflecting continued softness in U.S. construction
and weather-delayed projects.

Corporate Costs

Second quarter corporate costs related to core operations were
$19.5 million, a $9.7 million increase from the prior year
quarter. The increase is primarily attributable to added costs for
pension benefits to account for the negative financial market
factors that have impacted the funded status of defined benefit
pension plans in recent years.

                     CASH FLOW AND LIQUIDITY

Grace's cash flow provided by operating activities was $36.0
million for the first six months of 2003, compared with $66.3
million for the comparable period of 2002. Year-to-date pre-tax
income from core operations before depreciation and amortization
was $97.1 million, 28.9% lower than 2002, reflecting the lower
operating income described above. Cash used for investing
activities was $50.2 million year-to-date, primarily for capacity
expansion and capital replacements. Cash provided by financing
activities included a $30.0 million draw under Grace's debtor-in-
possession credit facility to fund the cash needs of Grace's
Chapter 11 filing entities.

At June 30, 2003, Grace had available liquidity in the form of
cash ($317.9 million), net cash value of life insurance ($91.8
million) and unused credit under its debtor-in-possession facility
($188.0 million). Grace believes that these sources and amounts of
liquidity are sufficient to support its strategic initiatives and
Chapter 11 proceedings for the foreseeable future.

At June 30, 2003, Grace's balance sheet shows a total
shareholders' equity deficit of about $168 million.

                     CHAPTER 11 PROCEEDINGS

On April 2, 2001 Grace and 61 of its United States subsidiaries
and affiliates, including its primary U.S. operating subsidiary W.
R. Grace & Co.-Conn., filed voluntary petitions for reorganization
under Chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court for the District of Delaware.
Grace's non-U.S. subsidiaries and certain of its U.S. subsidiaries
were not a part of the Filing. Since the Filing, all motions
necessary to conduct normal business activities have been approved
by the Bankruptcy Court.

The Bankruptcy Court had established a bar date of March 31, 2003
for claims of general unsecured creditors, asbestos property
damage claims and medical monitoring claims related to asbestos.
The bar date did not apply to asbestos-related bodily injury
claims or claims related to Zonolite(R) Attic Insulation, which
will be dealt with separately. Approximately 15,000 claims were
submitted by the bar date for all debtor entities. Grace is in the
process of assessing the validity of such claims and determining
what effect such claims may have on Grace's recorded liabilities.
Grace also has begun to file bankruptcy court motions objecting to
certain of these claims.

Most of Grace's noncore liabilities and contingencies (including
asbestos-related litigation, environmental remediation claims, tax
disputes and other potential obligations), are subject to
compromise under the Chapter 11 process. The Chapter 11
proceedings, including litigation and the claims resolution
process, could result in allowable claims that differ materially
from recorded amounts. Grace will adjust its estimates of
allowable claims as facts come to light during the Chapter 11
process that justify a change, and as Chapter 11 proceedings
establish court-accepted measures of Grace's noncore liabilities.
See Grace's recent Securities and Exchange Commission filings for
discussion of noncore liabilities and contingencies.

Grace is a leading global supplier of catalysts and silica
products, specialty construction chemicals, building materials,
and sealants and coatings. With annual sales of approximately $1.8
billion, Grace has over 6,000 employees and operations in nearly
40 countries. For more information, visit Grace's Web site at
http://www.grace.com


XTO ENERGY: Favorable Earnings Results Spurs S&P's BB+ Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' corporate
credit rating on independent oil and gas exploration and
production company XTO Energy Inc.

The outlook remains positive. Fort Worth, Texas-based XTO has
approximately $1.3 billion of debt and operating leases
outstanding.

The ratings affirmation follows the company's second quarter
earnings release, which listed a number of accomplishments that
are favorable for credit quality.

The accomplishments include the reduction in lease-adjusted total
debt to book capitalization to about 50.4% from 53.4% in the first
quarter of 2003; a 7% sequential increase in natural gas
production of which about half was internally generated, which
confirms the continued development potential of XTO's resource
base; and the implementation of additional hydrocarbon price
hedges, which now cover about 45% of projected 2004 gas production
at an average NYMEX price of $4.69 per thousand cubic feet
equivalent. The more extensive hedge position should ensure that
XTO has sufficient internal cash flow to fund its capital spending
program for 2004.

"Although all of these factors have improved XTO's credit quality
and are enabling the company to move closer to meriting an
upgrade, Standard & Poor's is not raising its rating on the
company at this time," said Standard & Poor's credit analyst Bruce
Schwartz.

"XTO has intimated that it will pursue acquisitions in the range
of $300 million to $500 million and that the acquisitions will
likely be funded to a large degree with new debt. If XTO further
lowers its debt leverage such that additional acquisitions can be
funded without causing debt leverage to spike significantly beyond
50%, we could raise our debt ratings on XTO. Given strong natural
gas fundamentals, an upgrade could occur during the next 12
months," added Mr. Schwartz.

The ratings on XTO (formerly known as Cross Timbers Oil Co.)
reflect the company's long-lived, relatively low-cost, natural
gas-oriented asset base, offset by somewhat aggressive debt
leverage and an acquisitive growth strategy.


* Fitch Says Defaults Down 69% While Recovery Rates Up 50% in H1
----------------------------------------------------------------
With $2.3 billion in defaults, June brought to a close a promising
first half for the U.S. high yield market. Ten issuers defaulted
on their bond obligations in June, led by textile manufacturer
WestPoint Stevens. The default was the third in 2003 to top $1
billion. In 2002, twelve companies had produced billion dollar
bond defaults by June. The defaulted issuer count through June of
this year totaled 57, down 47% from 108 for the comparable period
in 2002. The decline was even more pronounced for the volume
tally, which fell 69% from $57.3 to $17.9 billion. Fitch
calculated a year-to-date default rate for the first half of 2003
of 2.8%, a dramatic reduction from the 9.5% rate recorded in the
first half of 2002. The trailing-twelve-month default rate dropped
to 10.3% in June, from the December 2002 peak of 16.4%. The
decline is due to the market's stronger credit mix following the
record bankruptcies and restructurings of 2001 and 2002. This is
particularly evident in the telecom sector. Following 2002's
extraordinary default rate of 43.5%, a leaner telecom sector
posted a default rate of 4.9% in the first half of 2003.

Not to be ignored, the receptive funding environment this year has
also kept defaults in check. The six month price movement of the
most vulnerable high yield issues, those rated 'CCC' or lower,
offers the strongest evidence of the market's greater risk
appetite in 2003 and willingness to extend credit across the
rating spectrum. Fitch examined the price levels of 283 bonds
rated 'CCC' or lower at the end of June and at the end of 2002.
Over the six month period, the number of issues priced at 60% of
par or below fell from 101 to 30, and the number of bonds priced
above 80% of par rose from 91 to 178. In addition to this, new
issuance, mostly used to refinance at historically low interest
rates or extend debt maturities, boomed. Approximately $90 billion
of high yield bonds were sold in the first six months of the year
compared with $120 billion for all of 2002.

Finally, rating activity for the U.S. high yield market, while
still negative, showed some notable improvement in the second
quarter. Volume downgrades (excluding defaults) in the second
quarter totaled $22.4 billion, down from $48.4 billion in the
first quarter. In addition, the ratio of dollar downgrades to
upgrades improved from a margin of 10:1 in the first quarter to
2.5:1 in the second quarter. Rating activity in the second quarter
was the most favorable for the U.S. high yield market in over a
year.

      Summary of Default Activity for the First Half of 2003

-- Defaults through June were concentrated in telecommunication
    ($4 billion); health care and pharmaceutical ($3.8 billion);
    transportation ($2 billion); metals and mining ($1.2 billion);
    food, beverage and tobacco ($1.2 billion); and textiles ($1.1
    billion);

-- The top five industry default rates for the first half
    included: health care and pharmaceutical; 12.6%, textiles and
    furniture; 12.6%, transportation; 8.8%, metals and mining; 8.4%
    and food; beverage and tobacco; 7.1%. Eight sectors (out of 25)
    experienced default rates above the market average of 2.8%.
    (The rates noted here consider defaults relative to each
    sector's size using the same methodology used to calculate the
    market default rate.);

-- The five largest defaults in the first half included:
    HealthSouth, $2.8 billion; Fleming, $1.2 billion; WestPoint
    Stevens, $1 billion; Leap Wireless, $.9 billion; and Magellan
    Health Services, $.9 billion. The average size of bond defaults
    per issuer fell to $314 million in the first half of this year,
    from $674 million in 2002 and $452 million in 2001. The absence
    of large telecommunication and fallen angel defaults helped
    contain the size of defaults.

-- The weighted average recovery rate moved up to 33% of par for
    defaulted issues through June compared with 22% of par for full
    year 2002. The improvement was a product of fewer low value
    telecommunication defaults. Defaulted telecommunication issues
    which have consistently posted recovery rates in the low teens
    since they emerged several years ago severely dampened recovery
    rates in 2001 and 2002. In 2002, for example, the weighted
    average recovery rate excluding telecommunication was 34% of
    par rather than the all-in rate of 22% of par. Nonetheless,
    even excluding the telecom factor, recovery rates were still up
    in the first half of 2003, reaching a weighted average of 38%
    of par for non-telecom defaults compared with 34% of par for
    non-telecom defaults in 2002.

       Overview of the Fitch U.S. High Yield Default Index

Fitch's default index is based on the U.S., dollar denominated,
non-convertible, speculative grade bond market (the rating
equivalent of 'BB+' and below, rated by Fitch or one of the two
other major rating agencies). Fitch includes rated and non-rated,
public bonds and private placements with 144A registration rights.
Defaults include missed coupon or principal payments, bankruptcy,
or distressed exchanges. Default rates are calculated by dividing
the volume of defaulted debt by the average principal volume
outstanding for the period under observation.

Fitch's high yield default studies are available on the Fitch
Ratings Web site at http://www.fitchratings.com


* BOOK REVIEW: The Rise and Fall of the Conglomerate Kings
----------------------------------------------------------
Author:     Robert Sobel
Publisher:  Beard Books
Softcover:  240 pages
List Price: $34.95
Review by David Henderson

Order your personal copy today at

http://www.amazon.com/exec/obidos/ASIN/1893122476/internetbankrupt


The marvelous thing about capitalism is that you, too, can be a
Master of the Universe.  If you are of a certain age, you will
recall that is the name commandeered by Wall Street bond traders
in their Glory Days.  Being one is a lot like surfing: you have to
catch the crest of the wave just right or you get slammed into the
drink, and even the ride never lasts forever.  There are no
Endless Summers in the market.

This book is the behind-the-scenes story of the financial wizards
and bare-knuckled businessmen who created the conglomerates, the
glamorous multi-form companies that marked the high noon of post-
World War II American capitalism.  Covering the period from the
end of the war to 1983, the author explains why and how the
conglomerate movement originated, how it mushroomed, and what
caused its startling and rapid decline.  Business historian Robert
Sobel chronicles the rise and fall of the first Masters of the
Universe in the U.S. and describes how the era gave rise to a
cadre of imaginative, bold, and often ruthless entrepreneurs who
took advantage of a buoyant stock market to create giant
enterprises, often through the exchange of overvalued paper for
real assets.  He covers the likes of Royal Little (Textron), Text
Thornton (Litton Industries), James Ling (Ling-Temco-Vought),
Charles Bludhorn (Gulf & Western) and Harold Geneen (ITT).  This
is a good read to put the recent boom and bust in a better
perspective.

While these men had vastly different personalities and processes,
they had a few things in common: ambition, the ability to seize
opportunities that others were too risk-averse to take, willing
bankers, and the expansive markets of the 1960s.  There is
something about an expansive market that attracts and creates
Masters of the Universe.  The Greek called it hubris.

The author tells a good joke to illustrate the successes and
failures of the period.  It seems the young son of a
Conglomerateur brings home a stray mongrel dog.  His father asks,
"How much do you think it's worth?" To which the boy replies, "At
least $30,000." The father gently tries to explain the market for
mongrel dogs, but the boy is undeterred and the next afternoon
proudly announces that he has sold the dog for $50,000.  The
father is proudly flabbergasted,  "You mean you found some fool
with that much money who paid you for that dog?"  "Not exactly,"
the son replies, "I traded it for two $25,000 cats."

While it lasted, the conglomerate struggles were a great slugfest
to watch: the heads of giant corporations battling each other for
control of other corporations, and all of it free from the rubric
of "synergy."  Nobody could pretend there was any synergy between
U.S. Steel and Marathon Oil.  This was raw capitalist power at
work, not a bunch of fluffy dot.commies pretending to defy market
gravity.

History repeats itself, endlessly, because so few people study
history.  The stagflation of the 1970s devalued the stock of
conglomerates and made it useless a currency to keep the schemes
afloat.  The wave crashed and waiting on the horizon for the next
big wave: the LBO Masters of the 1980s.

Robert Sobel was born in 1931 and died in 1999.  He was a prolific
chronicler of American business life, writing or editing more than
50 books and hundreds of articles and corporate profiles.  He was
a professor of business history at Hofstra University for 43 years
and he a Ph.D. from NYU.

                           *********

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 ***