TCR_Public/030728.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

              Monday, July 28, 2003, Vol. 7, No. 147

                          Headlines

ADELPHIA COMMS: Bringing-In Cole Raywid as Special Counsel
ADVANCED ENERGY: Red Ink Continued to Flow in Second Quarter
AIRGAS INC: Fiscal First Quarter Results Show Slight Improvement
ALTERRA HEALTHCARE: Court Okays Emeritus Bid to Acquire Assets
AMERCO: Amends Indemnification Agreement re Alvarez's Retention

AMERICAN TOWER: Posts $107 Million Net Loss in 2nd Quarter
AMERICAN WAGERING: Files for Chapter 11 Reorganization in Nevada
AMERICAN WAGERING: Case Summary & 10 Largest Unsecured Creditors
ARCHIMEDES: Fitch Further Drops Low-B Ratings on Class D Notes
ARMKEL LLC: Improved Ops. Performance Prompts S&P to Up Ratings

ASP VENTURES: GEM and Turbo Commence Foreclosure Proceedings
AVAYA INC: Fiscal Third Quarter Results Enter Positive Territory
BCE INC: Extends IS/IT Outsourcing Agreements with CGI Group Inc
BELL CANADA INT'L: Second Quarter Net Loss Stands at $35 Million
BONUS STORES: Files Chapter 11 Petition in Delaware

BONUS STORES: Case Summary & 20 Largest Unsecured Creditors
CALPINE CORP: Gilroy Unit Proposes $270M Secured Debt Offering
CARAUSTAR: S&P Assigns BB+ Bank Loan Rating to $75 Mil. Facility
CHAMPIONLYTE HOLDINGS: Secures $500K New Financing Commitment
CNH GLOBAL NV: Second Quarter 2003 Results In Line with Forecast

CORNING: Fitch Affirms Low-B Ratings & Changes Outlook to Stable
CREDIT SUISSE: Fitch Takes Ratings Actions on Ser. 1997-C1 Notes
CRITICAL PATH: June 30 Net Capital Deficit Balloons to $43 Mill.
CRITICAL PATH: Regains Compliance with Nasdaq Listing Standards
CYBEX INT'L: June 28 Working Capital Deficit Stands at $3 Mill.

DIVINE INC: Court Fixes August 8, 2003 General Claims Bar Date
DUANE READE: Reports Improved Second Quarter Financial Results
ENRON: Chapter 11 Plan will Appoint a Plan Administrator
E*TRADE GROUP: S&P Affirms B+ L-T Counterparty Credit Rating
EXIDE TECHNOLOGIES: Reorganized Debtor Valued at $950 Million

FANSTEEL INC: Files Plan and Disclosure Statement in Delaware
FAST FERRY: Files Plan and Disclosure Statement in New Jersey
FEDERAL-MOGUL: Asks For Extension of Exclusive Solicitation Period
FENWAY INT'L: Ex-Auditor Expresses Going Concern Uncertainty
FLEMING COS: Seeks Court's Go-Signal for C&S Purchase Agreement

FLEXTRONICS: June Quarter Net Loss More than Doubles to $290MM
GATEWAY INC: Reports Strong Performance for 2003 Second Quarter
GPN NETWORK: Ability to Continue Ops. as Going Concern Uncertain
HARRIS TRUST: Court Fixes Sept. 30, 2003 as Claims Bar Date
HYTEK MICROSYSTEMS: Shares Yanked Off Nasdaq Effective July 25

IMC GLOBAL: Red Ink Continued to Flow in Second Quarter 2003
INDYMAC: Fitch Takes Actions on 18 Classes from 3 Certificates
INSIGNIA SOLUTIONS: Pulls Plug on PwC's Retention as Accountants
INSITE SERVICES: All Proofs of Claim Due by August 11, 2003
INT'L PAPER: Reports Weaker Second Quarter Financial Performance

ISTAR FINANCIAL: Second Quarter 2003 Results Show Strong Growth
I-STAT CORP: June 30 Balance Sheet Insolvency Widens to $33 Mil.
IT GROUP: Wants Plan Filing Exclusivity Stretched to October 10
K2 DIGITAL: Convening a Shareholders' Meeting to Vote on Merger
KISTLER AEROSPACE: Files for Chapter 11 Protection in Washington

KISTLER AEROSPACE: Case Summary & 20 Largest Unsecured Creditors
LAND O'LAKES: Flat Financial Results in Second Quarter 2003
LEVEL 3 COMMS: Reports $462 Million Net Loss in 2nd Quarter
LORAL SPACE: Wants to Hire Ordinary Course Professionals
LTV CORP: Copperweld Seeks WCSR's Services as Exit Loan Counsel

LWTC CORP: Needs Until August 25 to Prepare & Deliver Schedules
LYONDELL CHEMICAL: Reports Sequential Decline in Net Loss for Q2
METRIS COS: S&P Further Junks Counterparty Credit Rating to CCC-
METRIS COMPANIES: Second Quarter 2003 Net Loss Tops $16 Million
MIRANT: U.S. Trustee Appoints Two Official Committees

MIRANT CORP: Turns to Haynes & Boone for Chap. 11 Legal Services
MORRIS PUBLISHING: S&P Assigns BB Speculative Grade Rating
NAT'L CENTURY: Asks Court to Extend Plan Filing Time to Nov. 17
NEXT GENERATION: Case Summary & 20 Largest Unsecured Creditors
NORTEL NETWORKS: Second Quarter 2003 Net Loss Tops $14 Million

PANAVISION INC: S&P Ratchets Junk Corp. Credit Rating Up a Notch
PG&E NATIONAL: Wants to Pull Plug on Three Tolling Agreements
PIONEER-STANDARD: Fiscal Q1 Net Loss Peters Out to $1.5 Million
PREMCOR INC: Second Quarter 2003 Results Enter Positive Zone
QUAIL PIPING: Hires Tactical Solutions as Turnaround Consultant

QUANTUM CORP: S&P Rates Proposed Sub. Convertible Bond at B
READ-RITE: Court Approves Sale of All Assets to Western Digital
ROSSBOROUGH REMACOR: Bringing-In Arter & Hadden as Attorneys
SAFETY-KLEEN: Obtains Clearance for South Carolina DHEC Pact
SAFETY-KLEEN: Court to Consider Chapter 11 Plan on August 1

SCIENTIFIC LEARNING: June 30 Balance Sheet Upside-Down by $8.4MM
SEA CONTAINERS: Closes Exchange Offer and Resumes Cash Dividend
SEITEL INC: Wants Nod for Delaware Claims' Appointment as Agent
SEITEL INC: Executes $1.7M Seismic Shoot Agreement with Contango
SELECT MEDICAL: S&P Affirms BB-/B Corp. Credit and Debt Ratings

SILICON GRAPHICS: June 28 Net Capital Deficit Swells to $178M
SPIEGEL GROUP: Court Extends Plan Filing Exclusivity to Nov. 15
SPIEGEL GROUP: Closing One Telephone & One Distribution Center
SUMMIT NATIONAL: Settles Claims Dispute with CCGI and Fontana
TANBRIDGE: CIBC Files Involuntary Bankruptcy Petition in Canada

TANBRIDGE: Conrad Riley and Alasdair Grant Resign as Directors
TEXAS PETROCHEMICALS: Has Until September 3 to File Schedules
TRITON CDO: S&P Places BB+ Class B Note Rating on Watch Negative
USI HOLDINGS: Improved Coverage Ratios Prompt S&P to Up Rating
VENTURES NATIONAL: Capital Losses Raise Going Concern Doubt

WAYZATA CORPORATE: Case Summary & 20 Largest Unsecured Creditors
WEIGHT WATCHERS: Proposed $504.7-Mill. Loan Gets S&P's BB Rating
WELLMAN INC: 2nd Quarter Operating Results Show Weak Performance
WEIRTON STEEL: Court Approves Bailey Riley as Local Counsel
WESTPOINT STEVENS: Taps Stein Riso as Special Conflicts Counsel

WILLIS GROUP: S&P Affirms BB+ Counterparty Credit Ratings
WORLDCOM INC: Seeks to Pull Plug on 85 Circuits Service Orders
WORLDCOM: MCI Wants Nod to Acquire Remaining Interest in Digex
WORLDCOM INC: NAACP Urges Congress to Reform Bankruptcy Process

* EYCF Promotes Borow, Llewellyn & Stevenson to Managing Dirs.

* BOND PRICING: For the week of July 28 - August 1, 2003

                          *********

ADELPHIA COMMS: Bringing-In Cole Raywid as Special Counsel
----------------------------------------------------------
The Adelphia Communication Debtors ask the U.S. Bankruptcy Court
for the Southern District of New York for permission to employ
Cole, Raywid & Braveman, LLP as their special counsel.  Cole will
assist Adelphia with, among other things, cable television
regulatory matters.

Shelley C. Chapman, Esq., at Willkie Farr & Gallagher, in New
York, explains that Cole is currently employed as an ordinary
course professional.  However, due to the volume of regulatory
matters that have arisen in these cases, the Debtors determined
that it is necessary to expand Cole's role and employ it as
special communications regulatory counsel.

According to Wesley R. Heppler, Esq., at Cole, Raywid & Braveman,
the firm specializes in communications law, including cable
television regulation and franchising issues.  Cole has extensive
expertise in business and regulatory issues affecting the cable
television and telecommunications industries.  Over the past 10
years, Cole has handled more cable television franchise renewals,
transfers and disputes than any other firm in the country.

Ms. Chapman notes that as an ordinary course professional since
June 27, 2002, Cole already understands the Debtors' businesses
and structures.  In addition, Cole has earned a national
reputation in assisting leading providers of cable television
services with all aspects of the cable industry, including
federal and state regulatory matters, franchising issues,
content-related issues and competition issues.

Ms. Chapman informs Judge Gerber that Cole will provide legal
advice on cable matters to the Debtors, including, but not
limited to:

    (i) local, state and federal issues under Title VI of the
        Communications Act;

   (ii) advocacy before local, state and federal agencies and
        other governmental units; and

  (iii) regulatory issues, including required regulatory filings
        as well as regulatory approvals.

In consideration for Cole's services, it will seek from the Court
compensation on an hourly basis, plus reimbursement of actual and
necessary expenses incurred.  Cole's hourly rates are:

       Attorneys            $150 - 480
       Paralegals            110 - 180

According to Mr. Heppler, Cole agreed to reduce all fees by 10%
from their standard hourly rates for work that will be performed
for the Debtors between July 1, 2003 and June 30, 2004.  To date,
Cole received $177,367 in compensation for services rendered and
expenses incurred in the Debtors' Chapter 11 cases.

Mr. Heppler tells the Court that Cole has not represented and has
no relationship, in any matter relating to these cases, with:

    (a) the Debtors and their attorneys;

    (b) the Debtors' creditors or equity security holders and
        their attorneys;

    (c) any other parties-in-interest in these cases; or

    (d) the U.S. Trustee or any person employed in the Office of
        the U.S. Trustee.

Moreover, Mr. Heppler discloses that Cole's professionals:

    -- do not have any connection with the Debtors, their
       creditors, or any party-in-interest, or their attorneys;

    -- do not hold or represent an interest adverse to the
       estate; and

    -- are "disinterested persons" within the meaning of Section
       101(14) of the Bankruptcy Code. (Adelphia Bankruptcy News,
       Issue No. 37; Bankruptcy Creditors' Service, Inc., 609/392-
       0900)


ADVANCED ENERGY: Red Ink Continued to Flow in Second Quarter
------------------------------------------------------------
Advanced Energy Industries, Inc. (Nasdaq: AEIS) reported financial
results for the second quarter ended June 30, 2003. Advanced
Energy is a leading global provider of critical solutions used in
the production of semiconductors, flat panel displays, data
storage products and other advanced thin film applications.

Revenue for the second quarter of 2003 was $62.9 million, a
decrease of 7 percent compared to second quarter 2002 revenue of
$67.9 million. Revenue for the second quarter of 2003 increased 12
percent compared to first quarter 2003 revenue of $56.2 million.
Net loss for the second quarter of 2003 was $5.8 million compared
to the second quarter 2002 net loss of $5.1 million. This compares
to the first quarter 2003 net loss of $8.6 million.

Revenue for the six months ended June 30, 2003 was $119.1 million
versus $110.8 million for the first six months of 2002. Net loss
for the 2003 six-month period was $14.4 million, compared with a
net loss of $13.9 million for the 2002 six-month period.

Doug Schatz, chairman and chief executive officer, said, "Our
second quarter results were in line with our expectations. Revenue
came in slightly above our prior guidance range as we experienced
some pick-up in demand in our power and mass flow control product
groups. We believe our demand momentum will continue to increase
moderately in the near term as we continue to penetrate new and
existing markets.

"Advanced Energy is well-positioned to extend our market and
technology positions by leveraging our product portfolio in power,
flow, plasma and ion sources, and thermal products to solve
critical manufacturing issues," said Mr. Schatz. "Our commitment
to investment in research and development focused on our four key
technology areas strengthens our product offerings and
opportunities, providing greater competitive advantage to our
customers."

Based on information currently available, the Company expects
third quarter revenue to increase 3 to 8 percent, in the $65
million to $68 million range, and expects a loss per share range
of $0.11 to $0.13.

Advanced Energy is a global leader in the development and support
of technologies critical to high-technology manufacturing
processes used in the production of semiconductors, flat panel
displays, data storage products, compact discs, digital video
discs, architectural glass, and other advanced product
applications.

Leveraging a diverse product portfolio and technology leadership,
AE creates solutions that maximize process impact, improve
productivity and lower cost of ownership for its customers. This
portfolio includes a comprehensive line of technology solutions in
power, flow, thermal management, plasma and ion beam sources, and
integrated process monitoring and control for original equipment
manufacturers and end-users around the world.

AE operates in regional centers in North America, Asia and Europe
and offers global sales and support through direct offices,
representatives and distributors. Founded in 1981, AE is a
publicly held company traded on the Nasdaq National Market under
the symbol AEIS. For more information, visit the Company's Web
site: http://www.advanced-energy.com

                         *    *    *

As reported in Troubled Company Reporter's December 20, 2002
edition, Standard & Poor's assigned its 'B+' corporate credit and
'B-' subordinated debt ratings to Advanced Energy Industries Inc.
The outlook is negative.

The company had total debt outstanding at September 30, 2002, of
$251 million, including capitalized operating leases.


AIRGAS INC: Fiscal First Quarter Results Show Slight Improvement
----------------------------------------------------------------
Airgas, Inc., (NYSE:ARG) reported earnings for its first quarter
ended June 30, 2003. Net earnings for the quarter were $18.5
million compared to $14 million in the same period a year ago. As
disclosed in the notes to the financial statements, the quarter
ended June 30, 2002 included a special charge of $2.7 million
($1.7 million after tax) related to the integration of the Air
Products acquisition.

First quarter sales increased 1% to $461 million, while total
same-store sales declined 1% compared to the same quarter a year
ago, reflecting continued weakness in manufacturing and other
industrial segments. Same-store sales in the Distribution segment
were down 2%, driven by a 4% decline in hardgoods. Same-store
sales for the Gas Operations segment increased 9%, attributed to
strong sales at the new Hopewell, Virginia CO2 plant, which began
operations in January 2003.

"We delivered a solid first quarter performance. The prolonged
weakness in the industrial sector continues to temper top-line
results, but strength in our growth platforms, such as medical and
bulk gas, and a focus on cost control contributed to the EPS
growth," said Airgas Chairman and Chief Executive Officer Peter
McCausland.

Free Cash Flow for the quarter ended June 30, 2003 was a negative
$3 million contributing to a $5 million increase in adjusted debt.
Free Cash Flow for the comparative quarter ended June 30, 2002 was
a negative $5 million. Negative free cash flow is typical in the
first quarter due to the timing of payments for interest and
annual bonuses; however, the recently completed quarter also
included $7 million of incremental capital spending versus the
prior year as the Company invested in cylinders, tanks and other
revenue generating assets to meet customer needs. The definition
of free cash flow and a reconciliation to the attached
Consolidated Statement of Cash Flows, as well as the definition of
adjusted debt and a reconciliation to the balance sheet are
attached.

McCausland continued, "Recent economic data on the industrial
sector seems to indicate a slight firming, but it appears we are
still bouncing along the bottom. We remain confident of our full
year earnings per share guidance of $1.05 to $1.12; however, we
expect same-store sales for the first half to be flat. We continue
to focus on enhancing our market-leading customer offerings and
service. Airgas has the financial capacity and the culture to
succeed and grow, both organically and through acquisition."

Airgas, Inc. (NYSE:ARG) (S&P, BB Corporate Credit Rating,
Positive) is the largest U.S. distributor of industrial, medical
and specialty gases, welding, safety and related products. Its
integrated network of nearly 800 locations includes branches,
retail stores, gas fill plants, specialty gas labs, production
facilities and distribution centers. Airgas also  distributes its
products and services through eBusiness, catalog and telesales
channels. Its national scale and strong local presence offer a
competitive edge to its diversified customer base. For more
information, visit http://www.airgas.com


ALTERRA HEALTHCARE: Court Okays Emeritus Bid to Acquire Assets
--------------------------------------------------------------
Emeritus Assisted Living (AMEX:ESC), a national provider of
assisted living and related services to senior citizens, announced
that the United States Bankruptcy Court for the District of
Delaware approved a Merger Agreement which provides that an entity
controlled by Emeritus Corporation, with capital from an affiliate
of Fortress Investment Group LLC, will acquire Alterra Healthcare
Corporation upon the closing of the merger. The total
consideration provided under the Merger Agreement, subject to
certain adjustments, is $76 million. Emeritus has guaranteed $6.9
million of such closing consideration.  The transaction is
conditioned on, among other things, confirmation of Alterra's
Chapter 11 Plan of Reorganization and the receipt of regulatory
approvals, and is expected to close in the fourth quarter of this
year. The Merger Agreement, approved by the Bankruptcy Court
yesterday, was selected as the winning bid at an auction held in
Delaware on July 17, 2003.

Emeritus Assisted Living is a national provider of assisted living
and related services to seniors. Emeritus is one of the largest
developers and operators of freestanding assisted living
communities throughout the United States. These communities
provide a residential housing alternative for senior citizens who
need help with the activities of daily living with an emphasis on
assistance with personal care services to provide residents with
an opportunity for support in the aging process. Emeritus
currently holds interests in 174 communities representing capacity
for approximately 18,000 residents in 33 states. Emeritus's common
stock is traded on the American Stock Exchange under the symbol
ESC, and its home page can be found on the Internet at
http://www.emeritus.com


AMERCO: Amends Indemnification Agreement re Alvarez's Retention
---------------------------------------------------------------
After due consideration, the U.S. Bankruptcy Court for the
District of Nevada authorizes Amerco to employ Alvarez and Marsal
as its financial advisor and consultant, subject to three changes
to an Indemnification Agreement attached to the Firm's engagement
letter dated May 22, 2003:

    (a) The provision that limits the Indemnified Parties'
        liability for contribution claims to the extent of the
        fees they have actually received pursuant to their
        retention in this case is deleted;

    (b) To the extent payment is sought under the indemnity, then
        until such time as either a confirmation order has been
        entered confirming a plan of reorganization in this
        Chapter 11 case, or the case has been dismissed -- or, in
        the event the case is converted to one under Chapter 7,
        the dismissal or filing of a final report of the trustee
        under the Chapter 7 case -- any such payment is subject to
        the approval of this Court; and

    (c) A&M's retention in this case is governed by the laws of
        the state of Nevada.

Serving as Amerco's restructuring advisor, Alvarez will:

    (a) Undertake, in consultation with members of management, a
        comprehensive study and analysis of the business,
        operations, financial condition and prospects of AMERCO;

    (b) Review with members of management AMERCO's financial
        plans and analyze its strategic plans and business
        alternatives;

    (c) Assist AMERCO in reviewing and assessing its cash flow
        and income projections;

    (d) Analyze existing direct and contingent liabilities of
        AMERCO and debt structural issues;

    (e) Advise AMERCO's management with respect to available
        capital and financial alternatives, including recommending
        specific courses of action;

    (f) Ascertain AMERCO's debt servicing capability under the
        current debt maturity structure and any additional
        funding requirements, including working capital, trade
        financing, equipment acquisition, export financing and
        other financing needs;

    (g) Determine AMERCO's overall enterprise value and the Group
        to serve as the basis for a restructuring or
        recapitalization plan;

    (h) Develop, together with AMERCO's President and staff, a
        restructuring or recapitalization plan;

    (i) Assist AMERCO with negotiating and structuring financing
        including new capital in the form of DIP facility and
        exit financing;

    (j) Assist AMERCO in its presentations to the creditors of
        its projections, valuations and restructuring plan;

    (k) Assist with bankruptcy strategy planning;

    (l) Assist AMERCO in negotiations with its key creditors;

    (m) Provide financial advice and assistance to AMERCO in
        developing and seeking approval of a restructuring plan,
        which may be a plan of reorganization under Chapter 11;

    (n) Participate in hearing before the Bankruptcy Court; and

    (o) Other activities as AMERCO or its Board of Directors
        approves and agreed to by Alvarez. (AMERCO Bankruptcy
        News, Issue No. 3; Bankruptcy Creditors' Service, Inc.,
        609/392-0900)


AMERICAN TOWER: Posts $107 Million Net Loss in 2nd Quarter
----------------------------------------------------------
American Tower Corporation (NYSE: AMT) reported financial results
for the quarter ended June 30, 2003.

For the three months ended June 30, 2003, rental and management
segment revenues increased to $151.9 million from $132.0 million
for the same period in 2002. Total revenues increased to $178.2
million for the three months ended June 30, 2003, from $165.8
million for the same period in 2002. Loss from continuing
operations increased to $81.0 million, for the three months ended
June 30, 2003 from $67.7 million for the same period in 2002. Net
loss increased to $107.7 million for the three months ended
June 30, 2003 from $101.2 million for the same period in 2002.
Loss from continuing operations and net loss for the three months
ended June 30, 2003 include a non-cash charge of $35.8 million
related to several convertible note exchanges.

Adjusted EBITDA ("income (loss) from operations before
depreciation and amortization and impairments and net loss (gain)
on sale of long-lived assets plus interest income, TV Azteca,
net") increased to $96.2 million for the three months ended June
30, 2003 from $72.9 million for the same period in 2002. Rental
and management segment operating profit ("rental and management
revenue less rental and management operating expenses plus
interest income, TV Azteca, net") increased to $101.2 million for
the three months ended June 30, 2003 from $78.4 million for the
same period in 2002. The Company generated free cash flow
("adjusted EBITDA less interest expense and capital expenditures
incurred, excluding acquisitions and divestitures") of $14.2
million for the three months ended June 30, 2003.

During the second quarter 2003, the Company also committed to sell
its steel fabrication and tall tower construction service
subsidiary, Kline Iron & Steel Co., Inc. As a result of its
intention to sell Kline Iron & Steel Co. Inc., within the next
twelve months, the Company has designated Kline Iron & Steel Co.,
Inc., as discontinued operations for the second quarter 2003, six
months ended 2003 and for comparative periods shown for 2002, in
accordance with generally accepted accounting principles.
Accordingly, services revenue and services segment operating
profit were reduced by $10.7 million and $0.2 million,
respectively, for the second quarter 2003 and by $24.5 million and
$2.0 million, respectively, for the same period in the prior year.

Steve Dodge, American Tower's Chairman and Chief Executive
Officer, stated, "Solid organic revenue growth from towers of 12%,
coupled with tight spending controls keyed strong margin expansion
and significant gains in sequential quarterly adjusted EBITDA and
free cash flow. We see these patterns continuing through this year
and beyond.

While our customers are also focused on delivering free cash flow,
the demands on their networks are increasing, so the deployment of
coverage and capacity sites continues. As the correlation between
network quality and financial performance grows stronger, and as
certain companies effectively promote perceived network
advantages, we believe the motivation to invest in new sites and
site upgrades will intensify.

It has been particularly satisfying for me to observe the work of
our managers, who keep delivering on a range of initiatives, both
operational and financial. The gains we have experienced each
quarter are taking on an aspect of consistency and predictability,
which bodes well for our future, and for which our managers
deserve much credit."

                       Operating Highlights

Organic same tower revenue and same tower cash flow growth on the
13,534 North American towers owned as of the beginning of the
second quarter 2002 and the end of the second quarter 2003 was 12%
and 19%, respectively, for the three months ended June 30, 2003 as
compared to the three months ended June 30, 2002.

Rental and management segment operating profit increased 29% to
$101.2 million for the three months ended June 30, 2003, from
$78.4 million for the same period in 2002. Rental and management
segment operating profit margins improved to 66.6% for the three
months ended June 30, 2003, from 59.4% in the same period in 2002.

Adjusted EBITDA increased to $96.2 million for the three months
ended June 30, 2003, from $72.9 million for the same period in
2002. Adjusted EBITDA margin improved to 54.0% for the three
months ended June 30, 2003, from 43.9% in the same period in 2002.

Free cash flow of $14.2 million was generated in the second
quarter 2003, which includes a deduction of approximately $20.3
million for non-cash interest expense from the accretion of our
discount notes and amortization of deferred financing costs.
(Excluding the $20.3 million of non-cash interest expense would
result in free cash flow of $34.4 million.)

                         Asset Transactions

During the second quarter 2003, the Company closed on $21.3
million of divestitures, consisting of $5.2 million of cash
proceeds and the elimination of $16.1 million of long-term debt.
Divestitures during the second quarter 2003 included certain non-
core tower assets and an office building, recorded as discontinued
operation in the first quarter, within our rental and management
segment.

As stated above, the Company intends to sell Kline Iron & Steel
Co. Inc. in the next twelve months. Accordingly, the Company has
adjusted its June 30, 2003 and 2002 financial statements, as well
as its 2003 Outlook, to reflect this services business as
discontinued operations. The Company has recognized a $14.0
million impairment in the value of this subsidiary in the current
period, resulting in a carrying value as of June 30, 2003 of $16.4
million, which is included on our balance sheet as net assets and
liabilities held for sale. The Company has also recognized an
additional $12.0 million impairment in the value of its Verestar
subsidiary, thus reducing its carrying value to $0. The Company
anticipates that it may receive in excess of $30 million of
proceeds from the sale of additional non-core assets in the
remainder of 2003, including the potential proceeds from the sale
of Kline Iron & Steel Co. Inc.

The Company has closed approximately $67.1 million of the $100
million NII Holdings Inc. tower acquisition, as of the end of the
second quarter 2003, including approximately $10.6 million in the
second quarter 2003. The Company expects to close the remaining
$32.9 million of the NII Holdings Inc. acquisition in stages
throughout the remainder of 2003.

In June 2003, the Company filed an income tax refund claim with
the Internal Revenue Service relating to net operating losses
generated by the Company in 1998, 1999 and 2001. The Company plans
to file a similar claim in September 2003, with respect to net
operating losses generated in 2002. The Company anticipates
receiving approximately $90 million as a result of these claims,
which will monetize a portion of the Company's deferred tax asset.
The Company estimates receipt of this amount within one to three
years of the dates the claims were filed with the IRS.

                      Financing Highlights

As of June 30, 2003, the Company had $300.5 million in cash and
cash equivalents, including $192.9 million of restricted cash and
investments. As of June 30, 2003, the Company had the ability to
draw $237.8 million of its revolving loan, which represents the
undrawn and available portion of that loan. Combined with cash on
hand as of June 30, 2003, the Company had a total of $538.3
million in total liquidity (which includes $192.9 million of
restricted cash and investments).

During the second quarter 2003, the Company repaid or eliminated a
total of $103.2 million of debt, consisting of $70.7 million of
accreted value of its 2.25% convertible notes, $18.9 million of
mortgages and other debt, and $13.6 million of scheduled payments
on its senior secured credit facilities. To date, the Company has
paid $27.2 million of scheduled payments and $224.5 million of
prepayments on its senior secured credit facilities.

During the second quarter 2003 and excluding previously announced
transactions, the Company exchanged approximately $22.0 million of
principal value (approximately $17.4 million accreted value) of
its 2.25% convertible notes for approximately 1.2 million shares
of its Class A common stock and $6.4 million in cash. The Company
recorded a non-cash charge of $6.8 million associated with these
additional transactions for a total of $35.8 million in non-cash
charges including previously announced transactions in the second
quarter 2003. During the six months ended June 30, 2003, the
Company exchanged approximately $93.5 million of principal value
(approximately $73.9 million accreted value) of the 2.25%
convertible notes for approximately 8.4 million shares of its
Class A common stock and $24.8 million in cash.

As of June 30, 2003, the accreted value of the remaining 2.25%
convertible notes that may be put to the Company on October 22,
2003 was $140.1 million. The Company had $192.9 million of
restricted cash and investments, as of June 30, 2003, that may be
used to retire the remaining 2.25% convertible notes. Restricted
cash and investments in excess of the accreted value of the
remaining 2.25% convertible notes may be used to retire the
Company's other senior and convertible notes.

               Quarterly and Full Year 2003 Outlook

The Company anticipates a solid lease-up environment for its
existing towers for the remainder of 2003 and maintains its
expectation for sequential organic revenue growth rates of 10% to
14%. The Company has adjusted its rental and management outlook to
reflect second quarter 2003 actual results and the lower than
anticipated level of new tower development and closings of the NII
Holdings, Inc. acquisition.

The Company has adjusted its full year 2003 services revenue
outlook to $89 million to $106 million and full year 2003 services
segment operating profit outlook to $6 million to $10 million to
reflect the discontinued operations of its steel fabrication and
tall tower construction service subsidiary, Kline Iron & Steel
Co., Inc., and current business conditions.

The Company has adjusted its expectation for full year 2003 total
capital expenditures incurred to between $48 million and $56
million. Rental and Management capital expenditures incurred are
expected to range from $39 million to $46 million, including $22
million to $24 million for constructing approximately 100 new
wireless towers, and approximately $17 to $22 million for tower
maintenance and augmentation. Services and corporate capital
expenditures incurred are expected to range from $4 million to $5
million and Verestar capital expenditures incurred are expected to
be approximately $5 million.

American Tower (S&P, B- Corporate Credit Rating, Negative) is the
leading independent owner, operator and developer of broadcast and
wireless communications sites in North America. Giving effect to
pending transactions, American Tower operates approximately 15,000
sites in the United States, Mexico, and Brazil, including
approximately 300 broadcast tower sites. Of the 15,000 sites,
approximately 14,000 are owned or leased towers and approximately
1,000 are managed and lease/sublease sites. For more information
about American Tower Corporation, visit
http://www.americantower.com


AMERICAN WAGERING: Files for Chapter 11 Reorganization in Nevada
----------------------------------------------------------------
American Wagering, Inc. (OTC Bulletin Board: BETM) and Leroy's
Horse & Sports Place, Inc., its wholly owned subsidiary, filed for
protection under Chapter 11 of the U.S. Bankruptcy Code in the
U.S. Bankruptcy Court for the District of Nevada, Northern
Division, in Reno, Nevada.  The filing does not affect
Computerized Bookmaking Systems, Inc., or any of the Company's
other subsidiaries.

The Companies are also in the process of filing an adversary
proceeding seeking to subordinate the claim of Michael Racusin
pursuant to 11 U.S.C. Section 510(b).  The claim arises out of a
judgment entered in favor of Racusin against the Companies in the
current amount of approximately $1,350,000 (after offsets for
amounts previously paid to Racusin) for breach of a contract to
issue Racusin common stock of the Registrant.

The Company said that during its Chapter 11 case, it will maintain
its ability to continue its operations and continue its long-
standing commitment to its customers. Chapter 11 permits a company
to continue operations in the normal course while it develops a
plan of reorganization to address its existing debt, capital and
cost structures.

Victor Salerno, the Company's chairman, president and chief
executive officer, said, "American Wagering and Leroy's will
continue to provide our customers with the same experience and
level of service they have come to expect. We stand by our
commitment to provide our customers with outstanding wagering
opportunities on horse races and sporting events, quality service
and the most extensive network of race and sports books in Nevada.
Most importantly, throughout this process, our responsibilities to
our customers will continue to be our number one priority. We have
a solid record as a reliable race and sports book operator, and we
intend to maintain and build upon that record. It is business as
usual; telephone account deposits are protected and all wagers and
winning tickets will be honored when presented."

To ensure smooth operation, the Company said that it has requested
relief from the bankruptcy court allowing it to, among other
things, continue operations and pay winning wagers when presented,
continue making regular and timely payments to vendors, obtain
debtor-in-possession financing, and pay employee salaries, wages
and benefits without interruption.

Salerno continued, "Over the last several quarters we have reduced
operating costs and increased profitability. However, due to a
court verdict, reorganization through Chapter 11 offers the best
way to provide uninterrupted service to our customers, safeguard
the value of our businesses and assets, and, ultimately, emerge as
a stronger, healthier and more competitive company."

Over the coming months, the Company will work with its creditors,
employee groups and other stakeholders to develop a plan of
reorganization that will serve as a roadmap for the Company's
future. The Company said that it will look at every aspect of its
operations and make changes that will ensure the Company continues
to be a major player in the Nevada race and sports industry. The
Company's plan of reorganization will be filed with the court at a
later date.

American Wagering, Inc. owns and operates a number of subsidiaries
including, but not limited to, the following: Leroy's Horse and
Sports Place: Leroy's operates 47 race and/or sports books
licensed by the Nevada Gaming Commission, giving it the largest
number of books in the state. Computerized Bookmaking Systems: CBS
is the dominant supplier of computerized sports wagering systems
in the state of Nevada.  AWI Manufacturing (formerly AWI Keno):
AWI Manufacturing is licensed by the Nevada Gaming Commission as a
manufacturer and distributor, and has developed a self-service
race and sports wagering kiosk.


AMERICAN WAGERING: Case Summary & 10 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: American Wagering, Inc.
        960 Matley Lane
        Suite 21
        Reno, Nevada 89502

Bankruptcy Case No.: 03-52529

Type of Business: Management company

Chapter 11 Petition Date: July 25, 2003

Court: District of Nevada (Reno)

Judge: Gregg W. Zive

Debtor's Counsel: Thomas H. Fell, Esq.
                  Gordon & Silver, Ltd.
                  3960 Howard Hughes Parkway
                  9th Floor
                  Las Vegas, NV 89109
                  Tel: 702-796-5555
                  Fax: 702-369-2666

Total Assets: $13,694,623

Total Debts: $13,688,935

Debtor's 10 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Michael Racusin             Litigation              $2,654,618
c/o Dennis L. Kennedy
Lionel Sawyer & Collins
300 South Fourth Street,
Suite 1700
Las Vegas, NV 89101

Sierra Health               Trade Debt                 $17,165

Astoria Financial           Trade Debt                  $2,302

Ameritas Life Insurance     Trade Debt                  $2,113

Mercedes Benz Credit        Trade Debt                  $1,311

Thomson West                Trade Debt                    $772

Best Software               Trade Debt                    $670

Ontrak Benefits of          Trade Debt                    $552
Colorado

Travel Marketing            Trade Debt                    $500

Cox Communications          Trade Debt                     $79


ARCHIMEDES: Fitch Further Drops Low-B Ratings on Class D Notes
--------------------------------------------------------------
Fitch Ratings downgrades two classes of notes issued by Archimedes
Funding III L.P., a collateralized debt obligation established in
November 1999. The following rating actions are effective
immediately:

        -- $5,000,000 class C-1 notes to 'BBB-' from 'BBB';
        -- $85,000,000 class C-2 notes to 'BBB-' from 'BBB';
        -- $5,000,000 class D-1 notes to 'B-' from 'BB-';
        -- $23,000,000 class D-2 notes to 'B-' from 'BB-';
        -- $17,000,000 class D-3 notes to 'B-' from 'BB-'.

The rating of the class C and D notes addresses the likelihood
that investors will receive ultimate and compensating interest
payments, as well as the stated balance of principal by the final
payment date.

Archimedes III is a CDO managed by ING Capital Advisors.
Archimedes III was established to issue approximately $1 billion
in debt and equity securities and invest the proceeds in a
portfolio of predominantly high-yield bank loans and high-yield
debt securities.

Due to the increased levels of defaults and deteriorating credit
quality of a portion of portfolio assets, Fitch has reviewed in
detail the portfolio performance of Archimedes III. In conjunction
with this review, Fitch discussed the current state of the
portfolio with the asset manager and their portfolio management
strategy going forward.

According to the latest available trustee report as of June 20,
2003, Archimedes III's portfolio includes $70.1 million par amount
of defaulted assets, representing roughly 9.42% of the total
pledged securities. Additionally, there are approximately $8.8
million of 'CCC' and below rated assets that are considered to be
distressed. The transaction has been failing its class C and D
overcollateralization tests since September and October 2002,
respectively. As a result, Archimedes III has been redeeming class
A notes.

The class C and D notes are currently deferring interest. The
class A/B, C and D OC ratios at June 20, 2003 were 122.01%,
105.11%, and 98.31%, relative to test levels of 118.20%, 106.30%,
and 100.5%, respectively.

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

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


ARMKEL LLC: Improved Ops. Performance Prompts S&P to Up Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit and
senior secured bank loan ratings on personal care company Armkel
LLC to 'BB-' from 'B+'. The subordinated debt rating was raised to
'B' from 'B-'. Total debt at March 28, 2003 was $415 million.

The outlook is stable.

"The ratings upgrade reflects Armkel's improved operating
performance stemming from sales growth, ongoing cost-saving
initiatives, and reduced debt levels, which have resulted in a
strengthening of the company's financial profile," said credit
analyst Lori Harris. Since its formation less than two years ago,
management has successfully operated the business and focused on
improving operating efficiencies, which has led to stronger than
expected credit measures.

Armkel's ratings are based on the company's high debt leverage,
narrow domestic product portfolio, and challenges faced by its
international operations, which represent about 45% of sales.
Partially offsetting these factors are the company's solid
operating margin (before depreciation, amortization, and
nonrecurring items) of 26% for the 12 months ended Mar. 28, 2003,
and strong defendable market share positions in certain domestic
categories (Trojan condoms, Nair depilatories, and First Response
pregnancy/ovulation test kits). In addition, Armkel is realizing
cost savings from manufacturing efficiencies, the elimination of
certain overhead expenses, and shared distribution channels with
Church & Dwight Co. Inc., a 50% owner of Armkel (remaining
ownership by affiliates of Kelso & Company LP, a private equity
firm).

The strength of Armkel's domestic brands, including its dominant
position in the high-margin condom business, with about a 70%
market share, should enable the company to continue to effectively
compete in the U.S. with other players, some of which have larger
financial resources. However, Armkel will be challenged to improve
operating margins in the competitive international market, given
its limited size. The international business generates operating
margins that are significantly lower than those of the domestic
business because of its much broader product portfolio, minimal
market dominance in its categories, and less efficient cost
structure.


ASP VENTURES: GEM and Turbo Commence Foreclosure Proceedings
------------------------------------------------------------
ASP Ventures Corp., (OTC Bulletin Board: APVE) is in default of
its $475,000 loan obligation to GEM Global Yield Fund Limited and
Turbo International Ltd. GEM and Turbo have commenced foreclosure
proceedings against APVE's Falcon Aircraft.

In April 2002, EliteJet entered into two loan agreements with GEM
and Turbo in the aggregate amount of $475,000. These loans were
collateralized with a Dassault-Breguet Falcon Aircraft and 2
General Electric CF-700-2d2 Engines. In April 2003, EliteJet
defaulted on these loan obligations and since that time GEM and
Turbo have attempted to negotiate in good faith with EliteJet
regarding payment options. On July 11, APVE completed its
acquisition of EliteJet in which it assumed all of the obligations
of EliteJet, including the $475,000 loan obligation.

GEM and Turbo have not been able to reach an equitable resolution
with APVE and therefore have commenced foreclosure proceedings in
New York against the Aircraft. Once the proceedings are complete,
the registered owner of the Aircraft with the Federal Aviation
Authority may officially be changed from EliteJet to GEM and
Turbo. The CIT Group also has a security interest in the Aircraft.
GEM and Turbo have been in negotiations with CIT regarding the
upcoming foreclosure.


AVAYA INC: Fiscal Third Quarter Results Enter Positive Territory
----------------------------------------------------------------
Avaya Inc. (NYSE: AV), a leading global provider of communications
networks and services for businesses, reported third fiscal
quarter results in accordance with generally accepted accounting
principles.

The company reported net income of $8 million and earnings per
diluted share of 2 cents for the third fiscal quarter ended
June 30, 2003. These results compare to a net loss of $41 million
or a loss of 11 cents per diluted share in the second fiscal
quarter of 2003.

Third fiscal quarter revenue of $1.072 billion was slightly below
second fiscal quarter revenue of $1.081 billion.

In the third fiscal quarter of 2002, Avaya reported a net loss of
$39 million or a loss of 11 cents per diluted share on revenue of
$1.219 billion.

Avaya noted its cash balance increased for the fourth straight
quarter to $843 million. Net debt decreased to $150 million and is
at the lowest level it has been since the company became an
independent business. Selling, General and Administrative expenses
declined $22 million sequentially from the second fiscal quarter
and $51 million from the same period last year.

                         CEO Comments

"The operational improvements we instituted across Avaya helped us
achieve positive earnings this quarter," said Don Peterson,
chairman and CEO, Avaya. "In the quarter, we saw revenue
stabilizing and positive signs that IT spending is strengthening.
It is also clear that customers are no longer buying technology
for technology's sake. Customers want investments to drive new
business models that improve business performance and deliver
bottom-line results. Our combination of services and solutions
makes us well-positioned to meet today's customers' needs."

                     Year-To-Date Results

Revenue for the first nine months of fiscal 2003 was $3.220
billion compared to revenue of $3.804 billion for the first nine
months of fiscal 2002, a decline of 15.4 percent.

The company had a net loss of $154 million or a loss of 41 cents
per diluted share for the first nine months of fiscal 2003,
compared to a net loss of $122 million or a loss of 81 cents per
diluted share for the first nine months of fiscal 2002.

                     Business Highlights

Since the end of the last quarter Avaya announced a number of key
sales, marketing agreements and new offers, including:

-- An agreement announced earlier today that Merrill Lynch will be
   implementing Avaya IP telephony solutions at the company's
   three-year-old corporate campus in Hopewell, New Jersey and at
   its new regional headquarters in Tokyo, Japan. The new
   solutions provide Merrill Lynch with greater flexibility and
   resiliency with a lower total cost of ownership in supporting
   7600 employees. Avaya Global Services will implement the
   solution.

-- A joint marketing agreement announced just this week with HP to
   bring IP solutions to small and mid-sized businesses. Avaya
   will combine its IP Office Solution with HP's ProLiant servers
   to give smaller customers fully integrated communications
   systems that make it easier to move to IP telephony.

-- An agreement with IBM that allows both companies to jointly
   provide a full complement of best-in-class voice services on
   multi-vendor platforms to customers in the United States.

-- Building the largest IP telephony network for Seoul Auto
   Gallery, Korea's largest auto complex. The wireless IP network
   will have nearly 5,000 telephone lines and 2,000 IP telephony
   users.

-- BA London Eye, London's top tourist attraction, with 3 million
   visitors, will expand its Avaya Contact Center to support
   increased sales and customer inquiries. It will use the contact
   center system to capture customer information and improve
   service to the more than 350,000 customers who are expected to
   use the telephone service over the next 12 months.

-- DIRECTV in Mexico has used its Avaya Contact Management
   solution to improve customer service and increase its
   subscriber base in Mexico by 23 percent in one year. DIRECTV
   was able to integrate its call centers to help it manage
   customer transactions, and deliver consistent and integrated
   customer service.

-- Avaya Enterprise Connect Solutions, which extends the advanced
   features and complete functionality of Avaya MultiVantage(TM)
   Communications Applications -- including Internet Protocol
   telephony, contact center, unified communication and messaging

-- from a central location to any size office or home in a
   distributed enterprise over a secure, high-performance
   converged network.

-- Avaya Business Continuity Practice provides consulting services
   to help companies assess risks and speed the recovery of
   networks and communication applications in the event of a
   natural disaster or other business disruption. The practice
   provides expertise and planning tools to make converged voice
   and data networks more secure and reliable, for smoother
   restoration of operations when unexpected challenges arise.

Avaya Inc., whose March 31, 2003 balance sheet shows a total
shareholders' equity deficit of about $25 million, designs, builds
and managers communications networks for more than one million
businesses around the world, including 90 percent of the Fortune
500(R).  A world leader in secure and reliable Internet Protocol
telephony systems, communications software applications and
services, Avaya is driving the convergence of voice and data
application across IT networks, enabling businesses large and
small to leverage existing and new networks to enhance value,
improve productivity and gain competitive advantage.  For more
information visit the Avaya Web site: http://www.Avaya.com

Driving the convergence of voice and data communications with
business applications -- and distinguished by comprehensive
worldwide services -- Avaya helps customers leverage existing and
new networks to achieve superior business results. For more
information visit the Avaya Web site: http://www.avaya.com


BCE INC: Extends IS/IT Outsourcing Agreements with CGI Group Inc
----------------------------------------------------------------
BCE Inc. (BCE) (TSX; NYSE: BCE) and CGI Group Inc. (CGI) (TSX:
GIB.A; NYSE: GIB) announced that Bell Canada and CGI have extended
their current IS/IT outsourcing agreements. The companies have
also renewed and expanded their commercial alliance which
designates Bell Canada as CGI's preferred telecom services
provider and includes a new network management agreement.

Additionally, BCE and CGI signed a new shareholders' agreement
with respect to BCE's ownership in CGI. Among other details, the
put and call options with the majority shareholders have been
cancelled.

The companies have been engaged in discussions with the objectives
of enhancing the value of CGI by ensuring the continuity of CGI's
management and CGI's ability to deliver high quality services to
its customers, and allowing BCE to realize the maximum value of
its investment in CGI.

CGI - Bell Canada IS/IT Outsourcing Services Agreements Extended:
The two, 10-year Outsourcing Agreements between Bell Canada and
CGI dated May 1998 and June 2001, and the 10-year Outsourcing
Agreement between Bell Mobility and CGI dated May 1999, have been
amended and extended to June 30, 2012. These agreements will
provide significant savings to Bell Canada during the period of
the contract thus contributing to its goal of increased
productivity.

Renewed Commercial Alliance and Network Management Outsourcing
Arrangement: Bell Canada and CGI have renewed and extended the
existing Alliance Agreement under which Bell and CGI collaborate
to provide customers with integrated solutions offerings. In
addition, the parties have agreed to enter into a new Network
Services Outsourcing Agreement, under which CGI will outsource to
Bell the management of the telecommunications network used by CGI
to provide services to its customers. Both agreements extend to
June 30, 2012.

These new agreements demonstrate the broadening of the interests
of CGI and Bell in working together in Canada, enabling both
companies to more effectively offer their current and prospective
clients value-added IS/IT services from CGI and telecommunications
services from Bell Canada in a systems integration and an
outsourcing mode.

                    BCE's Ownership in CGI

BCE and CGI have entered into a new shareholders' agreement
regarding BCE's investment in CGI. Control of CGI remains with the
founders, namely Serge Godin, Andr, Imbeau and Jean Brassard.

The details of the new agreement are as follows:

- The Options Agreement signed in 1998 between CGI, BCE and CGI's
  Majority Shareholders has been terminated. Consequently, the put
  rights of CGI's Majority Shareholders and BCE's call rights with
  regards to the CGI shares held by the Majority Shareholders have
  been cancelled;

- BCE will immediately convert all of its 7,027,606 CGI Class B
  multiple voting shares into CGI Class A single voting shares on
  a one-for-one basis. BCE will then own 120,028,400 CGI Class A
  shares and hold 29.87% of the total equity in CGI;

- BCE has agreed to maintain its equity interest (as a percentage
  of the total of all outstanding Class A shares and Class B
  shares) below 30% on January 5, 2004. As a result, under the
  terms of CGI's charter, CGI's Class B multiple voting shares
  will not be automatically converted to Class A shares;

- In recognition of BCE's significant position in CGI, appropriate
  shareholder rights have been provided to BCE. This includes pre-
  emptive rights, CGI Board of Directors representation, and
  certain rights over certain significant transactions (see
  background information for more details); and,

- There are no restrictions on any future sale by BCE of its
  shares in CGI.

While BCE has no current intention to dispose of its investment in
CGI, if BCE were to decide to sell any or all of its investment at
any future date, the sale would be done in an orderly manner.

BCE will continue to proportionately consolidate CGI's results.

"The agreements we announced [Thurs]day not only meet all of the
objectives that we originally sought, they further solidify the
partnership between the two companies," said Michael Sabia,
President and Chief Executive Officer of Bell Canada Enterprises.
"We have achieved greater clarity regarding both companies' future
intentions and their on-going relationship. This will allow CGI's
current management to continue to focus on delivering high quality
services to its customers and for BCE to maximize the value of our
investment in CGI."

"The advancements announced [Thurs]day strengthen our relationship
with BCE as a partner and as a client," said Serge Godin, Chairman
and CEO of CGI. "Our renewed alliance will provide our clients and
future large enterprise clients and government markets with a more
integrated, end-to-end IT services and telecom offering. The new
Shareholders Agreement removes any uncertainty with regard to the
ownership and future direction of CGI. On behalf of CGI's
management team, we look forward to pursuing our mission of
becoming a world champion IT services provider, creating benefits
and value for our clients, members and shareholders for many years
to come."

BCE is Canada's largest communications company. It has 25 million
customer connections through the wireline, wireless, data/Internet
and satellite services it provides, largely under the Bell brand.
BCE's media interests are held by Bell Globemedia, including CTV
and The Globe and Mail. As well, BCE has e-commerce capabilities
provided under the BCE Emergis brand. BCE shares are listed in
Canada, the United States and Europe.

Bell Canada, Canada's national leader in communications, provides
connectivity to residential and business customers through wired
and wireless voice and data communications, local and long
distance phone services, high speed and wireless Internet access,
IP-broadband services, e-business solutions and direct-to-home
satellite service. Bell Canada is wholly owned by BCE Inc. For
more information please visit http://www.bell.ca

At Dec. 31, 2002, BCE Inc. reported a total working capital
deficit of about CDN$2.3 billion.

Founded in 1976, CGI is the fourth largest independent information
technology services firm in North America, based on its headcount.
CGI and its affiliated companies employ 20,000 professionals.
CGI's annualized revenue run- rate is currently CDN $2.9 billion
(US$1.9 billion) and at March 31, 2003, CGI's order backlog was
$11.2 billion (US$7.6 billion). CGI provides end-to- end IT and
business process services to clients worldwide from offices in
Canada, United States and Europe. CGI's shares are listed on the
TSX (GIB.A) and the NYSE (GIB) and are included in the TSX 100
Composite Index as well as the S&P/TSX Canadian Information
Technology and Canadian MidCap Indices. Website:
http://www.cgi.com

                    BACKGROUND INFORMATION
           SUMMARY OF NEW SHAREHOLDERS' AGREEMENT
                     BETWEEN BCE AND CGI

The following is a summary of additional material terms contained
in the new Shareholders' Agreement.

- BCE continues to have representation on the Board of Directors
  of CGI as follows:

- one nominee, so long as the outsourcing agreement between Bell
  Canada and CGI is in effect;

- two nominees, so long as such outsourcing contract is in effect
  and BCE holds at least a 10% equity position in CGI; or

- that number of nominees equal to 25% of the total number of
  directors on the Board of Directors of CGI, so long as BCE holds
  at least a 20% equity position in CGI. BCE is also entitled to
  one nominee to the Human Resources Committee of CGI's Board of
  Directors so long as BCE holds at least a 10% equity position in
  CGI, or one nominee to the Human Resources Committee and one
  nominee to the Corporate Governance Committee of CGI's Board of
  Directors, so long as BCE holds at least a 20% equity position
  in CGI.

- BCE continues to have veto rights over certain significant
  transactions. So long as BCE holds at least a 20% equity
  position in CGI, the following matters are subject to the prior
  consent of BCE:

- Any arrangement, amalgamation or merger of CGI with any other
  person, except for amalgamations of CGI with any of its wholly-
  owned subsidiaries or with other public corporations the market
  capitalization of which is less than 15% of the market
  capitalization of CGI.

- The making by CGI or any of its consolidated subsidiaries of any
  acquisition or disposition of assets or securities in an amount
  in excess of 15% of the market capitalization of CGI.

- Any transaction or operation involving CGI or any of its
  consolidated subsidiaries as a result of which certain specified
  financial ratios would not be met.

- The appointment, from time to time, of a Chief Executive Officer
  of CGI other than Serge Godin.

- Amendments or proposals to amend the articles or by-laws of CGI,
  but only if such amendment affects any class of equity shares
  then held by BCE or any of its wholly-owned subsidiaries.

- The acquisition of, or agreement to acquire (by amalgamation,
  merger, take-over bid, plan of arrangement, reorganization,
  recapitalization, liquidation or winding-up of, reverse take-
  over bid or other business combination or similar transaction
  involving CGI or any of its consolidated subsidiaries), any
  person or business primarily engaged in an activity other than
  information systems and information technology services.

- The launching of any new lines of business or any other material
  change in CGI's corporate strategy not forming part of
  information systems and information technology services.

- The adoption of any annual business plan or budget or the making
  of any amendment thereto showing a pre-tax margin of less than
  6%.

- Any material alliance or joint venture that BCE concludes,
  acting reasonably, is or would likely be inconsistent in a
  significant respect with the commercial interests of the BCE
  group of companies.

- BCE continues to have pre-emptive rights to acquire Class A
  Shares and other equity securities of CGI (other than Class B
  Shares) to enable it to maintain its equity position in CGI in
  the event of the issue by CGI of any equity shares or securities
  convertible into equity shares. Such pre-emptive rights remain
  in effect so long as BCE holds at least a 20% equity position
  and the outsourcing agreement with Bell Canada is in force.

- BCE continues to have registration rights with respect to the
  CGI shares held by it or its wholly owned subsidiaries pursuant
  to the terms of the Registration Rights Agreement entered into
  between BCE and CGI in 1998.

Furthermore, the Majority Shareholders have undertaken not to
transfer the Class B Shares held by them to any person other than
(a) between or among themselves and/or senior executives of CGI or
of affiliates thereof or (b) pursuant to a take-over bid made to
all holders of Class B Shares and Class A Shares at the same time,
at the same price and on the same conditions. They also have
agreed that, prior to any other transfers of their Class B Shares,
they will convert such Class B Shares into Class A Shares.


BELL CANADA INT'L: Second Quarter Net Loss Stands at $35 Million
----------------------------------------------------------------
As a result of the adoption on July 17, 2002 of the Plan of
Arrangement BCI's consolidated financial statements for the second
quarter of 2003 reflect only the activities of BCI as a holding
company. BCI's 75.6% interest in Canbras Communications Corp., is
recorded under Investments on the balance sheet at its estimated
net realizable value of $15 million and Canbras' operating results
are not reflected on BCI's consolidated statements of earnings.

                    Second Quarter Results

As at June 30, 2003, BCI's shareholders' equity was $213.1
million, down by $35.4 million from the first quarter of 2003.
This decrease was as a result of a $27.3 million provision for the
Vesper loan guarantees, interest expense of $4.6 million on the
BCI's 11% senior unsecured notes, administrative expenses of $3.2
million, foreign exchange losses of $1.9 million on cash and
temporary investments held in US dollars due to a decline in the
US dollar exchange rate since the first quarter of 2003 and a $1.4
million loss on Axtel S.A de C.V., partially offset by interest
income of $3.1 million.

The provision for the Vesper loan guarantees was as a result of
recent developments at the Vespers, a portion of whose bank
indebtedness is guaranteed by BCI. In particular, interest due in
May 2003 of approximately 22.4 million Brazilian reais has not
been paid by the Vespers, thereby allowing its banks to initiate a
process that could ultimately result in a call on BCI's
guarantees. Based on this information, BCI has prudently
established a provision in the second quarter of 2003 of $27.3
million (US$20.2 million), being the Corporation's best estimated
of its maximum exposure.

During the quarter, pursuant to the Axtel transaction announced on
March 27, 2003, BCI received cash payments of US$4 million, which
included US$1.2 million as the first installment on the Axtel
short term note. As a result, BCI's cash and temporary investments
reached $402 million at the end of the second quarter of 2003. The
remaining balance of the Axtel short-term note of $3.2 million,
being the equivalent of US$2.3 million, is recorded as notes
receivable on BCI's balance sheet.

Total liabilities include BCI's 11% senior unsecured notes due
September 2004 in the amount of $160 million. Accrued liabilities
were $22.3 million at the end of the second quarter of 2003, up
$4.7 million from the first quarter of 2003 mainly as a result of
the accrued interest on the BCI's 11% senior unsecured notes and
other administrative expenses.

Net costs from July 1, 2003 to December 31, 2004 are estimated at
approximately $19.1 million, including interest expenses on the
11% senior unsecured notes of approximately $23.0 million,
interest income of approximately $14.6 million and operating costs
of approximately $10.7 million. These future net costs exclude any
amounts that may be required to settle contingent liabilities such
as lawsuits and the Comcel voice over IP claim. These estimates
for future net costs are consistent with the estimates provided at
the end of the first quarter of 2003.

The net loss for the second quarter was $35.4 million, or $0.89
per share.

          Update on Remaining Asset Held for Disposition

- BCI is still actively seeking to dispose of its interest in
  Canbras. The following is a summary of the second quarter
  financial and operational results of Canbras, as well as an
  update on the company's liquidity situation:

Revenues were $15.5 million in the quarter, down $1.0 million or
6.3% compared to the second quarter of 2002. This decrease is
mainly as result of a 33% devaluation of the average translation
rate of the Brazilian real compared to the Canadian dollar
relative to the second quarter of 2002, partially offset by price
increases and cable and internet access subscriber growth. EBITDA
reached $5.0 million in the second quarter of 2003, up from $2.6
million a year ago. The increase was mainly due to lower cost of
service and operating expenses both resulting principally from the
devaluation of the average translation rate of the Brazilian real,
partially offset by lower revenues. For the first six months of
2003, revenues were $29.0 million, a decrease of $4.7 million, or
14%, relative to the same period a year ago. This decrease is
mainly as result of a 43% devaluation of the average translation
rate of the Brazilian real compared to the Canadian dollar
relative to the first half of 2002, partially offset by price
increases and cable and internet access subscriber growth. EBITDA
for the first half of 2003 reached $8.0 million up from $5.5 a
year ago. Debt at the second quarter of 2003 was $22.4 million.

During the second quarter of 2003, one of Canbras' subsidiaries,
Canbras TVA, was successful in refinancing its US$18.5 million of
bank debt. The US$9.25 million principal repayment due on May 14,
2003 was repaid with the proceeds of a new reais-denominated loan
facility (together with R$ 4.0 million of cash on hand), and the
final principal repayment due in May 2004 is expected to be repaid
at that time by a further draw-down under the reais-denominated
loan. Borrowings under the new loan facility are being repaid in
monthly installments with the final maturity in February 2007. The
new reais-denominated loan was also based on an agreement with
Canbras' partner in Canbras TVA, which should, if business plans
are achieved, provide the Canbras Group with access to enough
liquidity for it to be able to continue in operation in 2003 and
beyond.

                    Plan of Arrangement Update

On December 2, 2002, the Ontario Superior Court of Justice
approved a Claims Identification Process for BCI. The Claims
Identification Process established a procedure by which all claims
against BCI will be identified within a specified period. This
period began on May 31, 2003 following the Court's decision, on
May 9, 2003, to dismiss the motion for certification as a class
action of the $1 billion lawsuit filed by a common shareholder of
BCI. The claim identification period will continue until
August 31, 2003 (September 30 for taxation authorities), during
which time any persons believing that they have a claim against
BCI as at May 31, 2003 must submit the appropriate forms or be
forever barred from making such claims in the future against BCI.
Following the period for the identification of claims, it is
expected that the Court, upon the advice of Ernst & Young Inc.,
the Monitor under BCI's Plan of Arrangement, will make further
orders with respect to the timing, determination and resolution of
the identified claims. For a more detailed description on the
Claim Identification Process, please refer to note 1 of the
attached financial statements.

- On June 30, 2003, BCI announced that the plaintiff in the
  Shareholder Action, whose motion for certification was dismissed
  on May 9, 2003, had filed an amended statement of claim, again
  seeking to proceed by way of class action against BCE Inc. and
  BCI in connection with the $1 billion lawsuit originally filed
  on September 27, 2002. The plaintiff continues to seek $1
  billion in damages on behalf of the same class of shareholders.
  BCI remains of the view that the allegations contained in the
  lawsuit are without merit and intends to take all appropriate
  actions to vigorously defend its position.

BCI is operating under a court supervised Plan of Arrangement,
pursuant to which BCI intends to monetize its assets in an orderly
fashion and resolve outstanding claims against it in an
expeditious manner with the ultimate objective of distributing the
net proceeds to its shareholders and dissolving the company. BCI
is listed on the Toronto Stock Exchange under the symbol BI and on
the NASDAQ National Market under the symbol BCICF. Visit its Web
site at http://www.bci.ca

Bell Canada International Inc. is operating under a Plan of
Arrangement approved by the Ontario Superior Court of Justice,
pursuant to which BCI intends to monetize its assets in an orderly
fashion and resolve outstanding claims against it in an
expeditious manner with the ultimate objective of distributing the
net proceeds to its shareholders and dissolving the Corporation.
Accordingly, these financial statements have been prepared on a
basis which in the opinion of management provides useful and
relevant information to users of BCI's financial statements. The
consolidated balance sheet at June 30, 2003 reflects BCI's 75.6%
interest in Canbras Communications Corp., as a long-term
investment recorded at the lower of carrying value and net
realizable value. BCI's 49.9% interest in Genesis Telecom C.A. and
its 1.4% fully diluted interest in Vesper S.A., Vesper Sao Paulo
S.A. and Vento Ltda., have been previously written off. BCI's
remaining 1.5% interest in Axtel S.A. de C.V., was written off in
the second quarter of 2003 in connection with the disposition of
Axtel. Since July 1, 2002, the consolidated statements of earnings
and cash flows have reflected only the activities of BCI as a
holding company.

                      PLAN OF ARRANGEMENT

On July 12, 2002 the shareholders and noteholders of BCI approved
a Plan of Arrangement under the Canada Business Corporations Act.
Court approval for the Plan of Arrangement was received on
July 17, 2002.

The principal elements of the Plan of Arrangement are as follows:

   - Performance by BCI of all its obligations pursuant to the
     share purchase agreement to effect the Telecom Americas
     disposition;

   - A share consolidation such that following the consolidation,
     BCI would have 40 million shares outstanding;

   - With the assistance of a court-appointed monitor, Ernst &
     Young Inc., and under the supervision of the Court, BCI's
     continued management of its remaining assets for purposes
     of disposing of such assets in an orderly manner;

   - BCI's development, with the assistance of the Monitor, of
     recommendations to the Court with respect to the
     identification of claims against BCI and a process for
     adjudicating and determining such claims;

   - Following the disposition of all the assets of BCI and the
     determination and adjudication of all claims against BCI, the
     liquidation of BCI and the final distribution to BCI's
     shareholders with the assistance of the monitor and the
     approval of the Court; and

   - Following the liquidation of BCI and the final distribution
     to BCI's shareholders, the dissolution of BCI.

BCI has now discharged all of its obligations in connection with
the share purchase agreement to effect the Telecom Americas
disposition and has received and monetized the entire
consideration received in such disposition.

BCI's shares were consolidated in July 2002, on a basis of
approximately 1 share for every 120 held, resulting in 40 million
shares outstanding at that date.

BCI is continuing to manage, with the assistance of the Monitor,
its remaining assets, in particular, Canbras, for the purposes of
disposing of such assets in an orderly manner.

On December 2, 2002, the Court approved a claims identification
process for BCI. The claims identification process establishes a
procedure by which all claims against BCI will be identified
within a specified period. This period began on May 31, 2003
following the Court's decision with respect to the certification
as a class action of the lawsuit filed by a BCI shareholder. On
May 9, 2003, the Court dismissed the motion seeking certification
of this lawsuit as a class action and struck the statement of
claim on the basis that it disclosed no reasonable cause of
action.

Under the claims procedure, within 10 business days after May 31,
2003 the Monitor mailed to all of the creditors shown on BCI's
records a package containing a proof of claim form, an instruction
letter, and the claims procedure. Creditors asserting claims
against the Corporation as of May 31, 2003, must deliver completed
proofs of claim to the monitor no later than August 31, 2003
(September 30, 2003 for taxation authorities). A creditor that has
not submitted a proof of claim by the Claims Bar Date will not be
entitled to receive any payment in respect of that claim and will
be barred from making that claim in the future against BCI.

The following parties are not required to submit proofs of claim,
and their claims will not be barred:

- Members of the class action lawsuit filed against BCI, BCI's
  directors and BCE Inc. on behalf of all persons that owned 6.75%
  Debentures on December 3, 2001, which action was certified as a
  class proceeding under the Class Proceedings Act by order of the
  Court dated December 2, 2002 with respect to their claims in the
  Debenture Class Action.;

- The holders of BCI's $160-million 11% senior unsecured notes due
  September 29, 2004;

- Parties with claims relating to the supply of goods or services
  to BCI in the ordinary course, whether before or after May 31,
  2003;

- The holders of the Vesper Guarantees and

- Current or former employees of BCI in respect of employment-
  related claims, whether before or after May 31, 2003, other than
  employment-related claims in respect of which the current or
  former employee has initiated litigation against BCI.

  The claims procedure specifies that any creditor that is a
  present or former holder of securities of BCI, including a
  person that was formerly a member of the Debenture Class Action
  but has opted out of that class proceeding in the manner
  specified in the claims procedure, and that has claims of any
  nature against BCI or any of its affiliates arising out of the
  conduct of the affairs of BCI up to and including May 31, 2003,
  including, without limitation, any claim of oppressive conduct
  pursuant to section 241 of the Canada Business Corporations Act,
  must both commence an independent action in the Court and file a
  proof of claim with the Monitor no later than the Claims Bar
  Date, failing which such claim will be forever barred, against
  BCI or any of its affiliates.

  On December 2, 2002, the Court ordered that the Debenture Class
  Action be certified as a class action within the meaning of
  applicable legislation. The certification order does not
  constitute a decision on the merits of the class action, and BCI
  continues to be of the view that the allegations contained in
  the lawsuit are without merit and intends to vigorously defend
  its position. As part of the agreement among the parties, the
  plaintiffs in the class action abandoned their claim for
  punitive damages (the statement of claim originating the lawsuit
  sought $30 million in punitive damages).

  Following the period for the identification of claims, it is
  expected that the Court, upon the advice of the Monitor, will
  make further orders with respect to the timing, determination
  and resolution of the identified claims.


BONUS STORES: Files Chapter 11 Petition in Delaware
---------------------------------------------------
Bonus Stores, Inc., filed for chapter 11 protection Friday in
Wilmington, Delaware (Case No. 03-12284).  Bonus Stores operates
335 general merchandise stores operating under five nameplates:

     * Bill's Dollar Stores, Inc.;
     * Bill's;
     * Bonus Dollar Stores;
     * Bonus Stores; and
     * Bonus SuperCenter.

The stores -- each 7,600 square feet on average -- are located in
small to medium-sized rural communities in 11 southern states.
Low to middle-income consumers are Bonus Stores' target customers.

                   Internal Control Problems

Bonus Stores "discovered a deficiency in its internal controls as
they relate to management and monitoring of inventory shrinkage,"
Executive Vice President, Chief Financial Officer and Secretary
Alan R. Williams relates, "which in turn has resulted in reduced
borrowing capacity" under a secured revolver backed by Fleet
Retail Finance, Inc.  Sales have lagged and profitability's
declined.  Coupled with softening of the retail environment
nationwide (especially in lower income markets) and a significant
tightening of the global credit markets (particularly in the asset
based lending community), the chapter 11 filing becomes a
necessity.

                    Closing 2/3 of the Stores

Bonus enters the chapter 11 process with the intention of
"effectuating certain strategic restructuring initiatives,
including, but not limited to, closure of underperforming
locations and maximization of the values of the assets located
thereat, and reorganization around a smaller subset of core
contributing store locations."  That subset is less than 100
stores.

                Gordon Bros. & Hilco on the Scene

With the help of Hilco Merchant Resources, LLC, 214 stores began
going-out-of-business sales on July 18 and those will conclude by
October 12.  Gordon Brothers Retail Partners, LLC, Bonus Stores is
preparing to shutter 24 additional stores on August 15.

Bonus Stores, Inc., acquired its retail assets in a Sec. 363 sale
transaction in 2001 out of In re Bill's Dollar Stores, Inc.
(Bankr. Del. Case No. 01-435 (PJW)).  Lawyers at Traub, Bonacquist
& Fox, LLP, represent Bonus Stores in its restructuring.


BONUS STORES: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Bonus Stores, Inc.
        1401 Highway 13 North
        Columbia, Mississippi 39429
        dba Bill's Dollar Store
        dba Bill's
        dba Bonus Dollar Stores
        dba Bonus Stores
        dba Bonus SuperCenter

Bankruptcy Case No.: 03-12284

Type of Business: The Debtor is a chain of over 360 stores in 13
                  Southeastern states, that offers everyday deep
                  discount prices on basic everyday items.

Chapter 11 Petition Date: July 25, 2003

Court: District of Delaware

Judge: Mary F. Walrath

Debtors' Counsel: Joel A. Waite, Esq.
                  Young Conaway Stargatt & Taylor
                  The Brandywine Bldg.
                  1000 West Street, 17th Floor
                  PO Box 391
                  Wilmington, DE 19899-0391
                  Tel: 302 571-6600
                  Fax: 302-571-0453

Estimated Assets: $50 Million to $100 Million

Estimated Debts: $50 Million to $100 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                                            Claim Amount
------                                            ------------
Entertainment Resource           $755,248
290 Bryan Road
Dania, FL 33004
Tel: 954-925-7999
Attn: Jeff Jackson

The Proctor & Gamble Dist. Co.                        $703,503
8500 Governir's Hill Drive
Cincinnati, OH 45249
Tel: 513-774-1782
Attn: G.M. Jones

Memcorp                                               $439,032
PO Box 02-5188
Miami, FL 33102
Tel: 954-660-7000
Attn: David Hertz

Standard Distributing                                 $432,925
13691 Girardin
Detroit, MI 48212
Tel: 888-596-1561
Attn: Nicole Matthews

Pepsi Cola Co./Texas                                  $368,966
PO Box 841918
Dallas, TX 75284
Attn: Karen Davis

Archim Importing Co., Inc.                            $285,782
58 Second Avenue
Brooklyn, TX
Attn: Ed Weiner

GE Prepaid Calling Cards                              $272,652
6540 Powers Ferry Road
Atlanta, GA 30339
Attn: Amy Witzel

Prestige Global Inc.                                  $255,592
1350 Broadway
Suite 1505
New York, NY 10018

Warren Oil Co., Inc.                                  $229,174

Bentley Manufacturing                                 $216,758

Buffalo Rock                                          $214,356

Cook Publications, Inc.                               $210,125

Mead Products                                         $203,086

Real Pure Beverage                                    $191,451

Salland Inc. Ltd.                                     $180,600

Action Collectibles                                   $168,566

Collegeware U.S.A.                                    $166,477

DSA Factors                                           $149,540

Packaging Service Co., Inc.                           $147,047

American Greetings                                    $139,610


CALPINE CORP: Gilroy Unit Proposes $270M Secured Debt Offering
--------------------------------------------------------------
Calpine Corporation (NYSE: CPN), a leading North American power
company, announced that Gilroy Energy Center, LLC, a wholly owned,
stand-alone subsidiary of the Calpine subsidiary GEC Holdings,
LLC, intends to sell approximately $270 million of Senior Secured
Notes Due 2011.  The senior secured notes will be secured by GEC's
and its subsidiaries' 11 peaking units, located at nine power
generating sites in northern California.  The notes will also be
secured by a long-term power sales agreement for 495 megawatts of
peaking capacity with the State of California Department of Water
Resources, which is being served by the 11 peaking units.

Net proceeds will be used to reimburse costs incurred in
connection with the development, construction, and purchase of,
repairs, improvements or additions to, the peaker projects, and
for general corporate purposes.  The noteholders' recourse will be
limited to the assets of GEC and its subsidiaries.  Calpine will
not provide a guarantee of the Senior Secured Notes Due 2011 or
any other form of credit support.

In connection with this offering, GEC is negotiating with a third
party on a preferred equity investment in GEC, totaling
approximately $74 million, which the company does not expect to
complete by the closing of the Senior Secured Notes Due 2011.
Therefore, the net proceeds of the senior notes offering will be
held in an escrow account, pending completion of this preferred
equity investment.  If the preferred equity investment is not
completed, GEC will offer to repurchase the Senior Secured Notes
Due 2011 at a price of 101%, plus accrued interest.

The Senior Secured Notes Due 2011 will be offered in a private
placement under Rule 144A, have not been and will not be
registered under the Securities Act of 1933, and may not be
offered in the United States absent registration or an applicable
exemption from registration requirements.

                        *   *   *

As previously reported, Standard & Poor's Ratings Services
assigned its 'B' rating to Calpine Corp.'s $3.3 billion second-
priority senior debt. The $3.3 billion includes: a $750 million
term loan due 2007, $500 million floating rates notes due 2007,
$1.15 billion 8.5% secured notes due 2010, and $900 million
secured notes due 2013.

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

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


CARAUSTAR: S&P Assigns BB+ Bank Loan Rating to $75 Mil. Facility
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' senior
secured bank loan rating to recycled paperboard manufacturer
Caraustar Industries Inc.'s new $75 million senior secured
revolving credit facility.

Standard & Poor's said that at the same time it has affirmed its
'BB' corporate credit rating on the company. The outlook remains
negative.

The new facility replaces an existing $75 million revolving credit
facility and will be used to issue letters of credit and finance
working capital needs. "Although the facility commitment amount is
the same, the new facility improves liquidity since the previous
one had been limited to $47 million of borrowing capacity by
recent bank amendments that also accelerated the maturity to April
1, 2004, from March 29, 2005," said Standard & Poor's credit
analyst Pamela Rice.

Standard & Poor's said that it used its discrete asset method to
analyze recovery prospects because the facility is secured by
certain assets. Under this methodology, the collateral values were
discounted to reflect a distressed scenario. An increasingly
competitive environment or widespread substitution of recycled
paperboard by competing substrates could depress the cash flows of
this aggressively leveraged company. Nonetheless, Standard &
Poor's distressed collateral value was more than sufficient to
repay 100% of the facility, even assuming it is fully drawn, which
supports Standard & Poor's view that there is a strong likelihood
of full recovery in the event of default or bankruptcy.

The ratings reflect Austell, Georgia-based Caraustar's good market
position in tubes and cores, improving volumes, limited product
diversity, exposure to volatile raw material costs, and an
aggressive financial policy.


CHAMPIONLYTE HOLDINGS: Secures $500K New Financing Commitment
-------------------------------------------------------------
ChampionLyte Holdings, Inc. (OTC Bulletin Board: CPLY) has
received a $500,000 financing commitment for accounts receivables
and purchase orders. The financing facility was secured through
Churchill Investments, Inc. an affiliate of Knightsbridge Capital
which as been acting in the capacity of a financial advisor to the
company since a major management change in January.

This new facility is in addition to a recently announced $1
million dollar equity financing commitment from the Miami-based
Advantage Fund I LLC. The Advantage Fund had previously provided
the Company with interim funding in excess of $350,000 to assist
with the initial restructuring of the Company.

"This accounts receivable factoring and purchase order financing
provides us with the ability to better manage our cash flow and
build on existing sales," said ChampionLyte Holdings President,
David Goldberg. "By receiving payment in advance for purchase
orders we can continually fund the growing demand for product and
utilize funds from our equity financing commitment to further
support the ongoing marketing and sales effort in place to
re-launch ChampionLyte(R)."

ChampionLyte Holdings, Inc., through its operating company,
ChampionLyte Beverages, Inc. manufactures, markets, sells and
distributes ChampionLyte(R), the first completely sugar-free entry
in the multi-billion dollar isotonic sports drink market. It is
the only sports drink with no sugar, calories, sorbitol,
saccharin, aspartame caffeine or carbonation. The reformulated
product is now sweetened with Splenda(R), the trade name for
Sucralose produced by McNeil Nutritionals, a Johnson & Johnson
company. It does not have label warnings.

ChampionLyte Holdings, Inc. is a fully reporting public company
whose shares are quoted on the OTC Bulletin Board under the
trading symbol CPLY. Its recently formed beverage division,
ChampionLyte Beverages, Inc., a Florida corporation, manufactures,
markets and sells ChampionLyte(R), the first completely sugar-free
entry into the multi-billion dollar isotonic sports drink market.

At September 30, 2002, Championlyte Products' balance sheet shows
a working capital deficit of about $1 million and a total
shareholders' equity deficit of about $9 million.


CNH GLOBAL NV: Second Quarter 2003 Results In Line with Forecast
----------------------------------------------------------------
CNH Global N.V. (NYSE: CNH) reported net income of $36 million for
the second quarter of 2003. Consistent with the company's
forecast, CNH's second quarter bottom line, excluding
restructuring charges of $20 million, net of tax, was $56 million,
compared to $45 million for the second quarter of 2002, before
restructuring charges of $6 million, net of tax.

For the first half of 2003, CNH reported a net loss of $10
million, including restructuring charges of $26 million, net of
tax. Excluding restructuring charges, net of tax, in both years,
and excluding the cumulative effect of a change in accounting
principle in 2002, CNH recorded a profit of $16 million in the
first half of 2003, compared to a loss of $1 million for the same
period last year.

"We continue to deliver bottom line results consistent with our
plan, confirming our goal to bring CNH into the black for 2003,
excluding restructuring charges," Paolo Monferino, CNH president
and chief executive officer said. "With our improved balance
sheet, CNH is ideally positioned for profitability improvements
regardless of market conditions. New, higher margin products on
the agricultural side of the business will positively contribute
to the bottom line this year and in the future."

Second quarter net sales of agricultural equipment. Net sales of
agricultural equipment increased to $1.956 billion for the
quarter, compared to $1.778 billion in the second quarter of 2002.
Net of favorable currency, revenues were essentially unchanged.
During the quarter, CNH under-produced agricultural equipment
retail demand by 13% and continued its aggressive actions to
reduce dealer stocks.

Second quarter 2003 industry unit sales of agricultural equipment
in North and Latin America improved significantly compared to the
second quarter of 2002. In North America, industry sales improved
across all tractor segments with substantial gains in the under 40
horsepower segment, while combine sales were down slightly. In
Europe, agricultural equipment industry sales declined slightly
across all major product categories.

Retail unit sales of CNH agricultural equipment increased in the
quarter, particularly combines, for which sales both in Europe and
North America increased year-over-year in spite of the industry
decline. For over 40 horsepower tractors, CNH kept pace with the
industry in North America and in Western Europe.

Second quarter net sales of construction equipment. Net sales of
construction equipment were $798 million compared to $804 million
in the second quarter of 2002. Net of currency, net sales declined
by 9% in the quarter, as CNH under-produced construction equipment
retail demand by 15%. In North America, industry sales of light
equipment increased earlier in the year than expected, mainly due
to the renewal of captive rental fleets, while industry unit sales
of heavy equipment increased slightly. In Europe, industry sales
were down for heavy equipment but up for light equipment. In Latin
America, industry unit sales of heavy equipment were down
considerably.

Retail unit sales of CNH construction equipment declined slightly
in North America, mainly due to continued destocking actions and
the company's decision not to match certain competitor pricing
actions in the quarter. In Western Europe, unit sales of CNH heavy
equipment declined in line with the market.

Equipment Operations second quarter financial results. Second
quarter net sales of equipment were $2.754 billion, compared to
$2.582 billion for the same period in 2002. Net of favorable
currency, sales were slightly lower than in the same period last
year.

CNH Equipment Operations' gross margin for the quarter declined
slightly. An unfavorable mix, the reduction of production volumes
in order to reduce company and dealer inventory, unfavorable
economics, and increased medical and pension costs more than
offset higher margins on new products, favorable currency,
positive pricing on agricultural products, and the contributions
from the company's profit improvement initiatives.

In total, medical and pension costs for active employees and
retirees increased by approximately $23 million in the quarter.
New actions to reduce overhead costs were a partial offset.

Interest expense for the quarter was lower than in the prior year
mainly due to the equity offering in June 2002 and the debt
exchanges in June 2002 and April 2003.

First half net sales of equipment were $ 5.031 billion, compared
to $ 4.821 billion for the same period in 2002.

Financial Services second quarter financial results. In the second
quarter of 2003, CNH Capital reported net income of $27 million,
compared to net income of $12 million in the same period last
year. The significant improvement in the bottom line was due in
part to timing differences in the company's ABS transactions
between 2003 and 2002, and to the market's favorable reception for
the ABS transaction that occurred in the second quarter of 2003.

The total managed portfolio at the end of the quarter increased by
6% compared to December 31, 2002 levels and remained basically
unchanged compared to June 30, 2002. The second quarter of 2003
marked the fifth consecutive quarter in which past due and
delinquency rates in CNH Capital's core business have declined
year-over-year.

Balance Sheet. Following the $2 billion debt-for-equity exchange
early in the second quarter of 2003, Equipment Operations net
debt, defined as debt net of cash, cash equivalents and inter-
segment notes receivable, was 28% of total net capitalization at
the end of the second quarter of 2003, compared with 56% at the
end of 2002.

On June 30, 2003, Equipment Operations net debt stood at $1.84
billion, compared to $3.83 billion on June 30, 2002 and $3.66
billion on March 31, 2003. The increase in net debt in the
quarter, exclusive of the reduction in net debt resulting from the
debt exchange, is related primarily to unfavorable currency
translation and a seasonal increase in working capital.

On July 15, 2003, CNH announced its intention to issue $1 billion
of senior unsecured notes through the company's wholly-owned US
subsidiary, Case New Holland Inc.

Agricultural equipment market outlook for 2003. Based on the
results of the first six months, CNH believes that 2003 worldwide
industry sales of agricultural equipment should be up slightly. In
the second half of 2003, CNH expects industry sales of
agricultural tractors to remain flat in Europe while sales of
combines are expected to decrease slightly. However, the
unseasonably hot weather conditions and associated drought across
most of Europe could negatively impact industry sales in the
second half of the year.

In North America, industry sales of tractors over 40 horsepower
should be flat through the balance of the year, while sales in the
under 40 horsepower segment should remain above 2002 levels.
Industry sales of combines in North America are expected to be
slightly up. Industry sales in Latin America are expected to be up
across all major product categories now that government support
programs have been confirmed for the balance of the year.

Construction equipment market outlook for 2003. For the balance of
the year, CNH anticipates that industry sales of heavy
construction equipment will remain flat in North America and down
in Western Europe. Industry sales of light construction equipment
are also expected to be flat in North America. In Latin America,
the current political environment and high interest rates continue
to limit infrastructure spending, and this should negatively
impact industry sales of construction equipment through the
balance of the year.

CNH outlook for 2003. For the full year, CNH expects to report
continued and significant bottom line improvement driven by share
gains in high horsepower agricultural tractors and combines,
higher margins from new agricultural products and tight control of
costs.

Looking beyond the current year, the company's profit improvement
initiatives, new cost reduction actions and margins on new
products should create a solid base for earnings growth over the
next three years, irrespective of expected market recovery. CNH
has extended its planned profit improvement actions for an
additional year, and now expects to achieve a further $100 million
in savings by the end of 2006. This estimate is not based on any
assumption regarding an appreciable increase in industry volumes
from 2002 levels. Through the second quarter of 2003, CNH achieved
a total of $606 million in profit improvements.

The company's product renewal process is well underway. On the
construction equipment side, almost 50 new products were
introduced at the Intermat fair in Paris, in May of this year. For
the agricultural business, July has seen the launch of several new
core products by both the Case IH and New Holland brands,
including the Case IH MXU tractor, the Case IH AFX combine, and a
new range of New Holland hay tools. As the proportion of higher-
margin new products delivered to the dealer network increases, the
company's bottom line will benefit through the balance of the
year.

As previously announced, CNH is continuing to aggressively manage
its construction equipment business, moving rapidly to cut costs
now and restructure the business for sustained profitability. For
2003, CNH expects that the actions now underway should enable the
construction equipment business to reduce its operating loss by
50% compared to the prior year.

Employee medical and pension costs are expected to increase by
about $90 million in 2003. Continuing profit improvement
initiatives and new cost reduction actions totaling approximately
$100 million for the year should offset these increased costs.

Interest expense savings realized through the company's successful
debt reduction action at the start of the second quarter would be
partially offset by higher interest costs resulting from the
company's high yield bond offering now underway and by continuing
negative translation effects on non-dollar denominated interest
expenses.

For the full year, CNH continues to believe that it will record a
year- over-year bottom line improvement of about $100 million,
before restructuring charges, bringing CNH into the black for
2003.

During 2003, CNH will incur approximately $60 million in pre-tax
restructuring costs associated with the restructuring of its
construction equipment business. Most of the costs will be
incurred in Europe where the obligatory process of consultation
and discussion with affected parties is now underway. The total
costs already incurred during the first half amount to roughly $20
million.

Depending on the timing of the closure of the company's East
Moline, Illinois facility, during 2003, CNH may incur pre-tax
restructuring charges of up to $325 million, with a maximum 2003
cash impact of approximately $75 million.

CNH (S&P, BB Corporate Credit Rating, Negative) is the number one
manufacturer of agricultural tractors and combines in the world,
the leader in light construction equipment, and has one of the
industry's largest equipment finance operations. Revenues in 2002
totaled $10 billion. Based in the United States, CNH's network of
dealers and distributors operates in over 160 countries. CNH
agricultural products are sold under the Case IH, New Holland and
Steyr brands. CNH construction equipment is sold under the Case,
FiatAllis, Fiat Kobelco, Kobelco, New Holland, and O&K brands.


CORNING: Fitch Affirms Low-B Ratings & Changes Outlook to Stable
----------------------------------------------------------------
Fitch Ratings has affirmed Corning Inc.'s 'BB' senior unsecured
debt rating and 'B' convertible preferred stock. The company's 'B'
commercial paper rating is withdrawn. The Rating Outlook is
changed to Stable from Negative. Approximately $3.2 billion of
debt is affected by Fitch's rating action.

Corning's ratings reflect the continued weak telecommunications
end-markets which still ultimately comprises 47% of revenues,
strained but improved credit protection measures, and negative
free cash flow. Also recognized are the company's improved balance
sheet and liquidity and leading positions in diverse markets. The
telecommunications markets continue to experience weak
infrastructure spending and the uncertainty regarding the timing
or magnitude of a recovery. Those factors continue to pressure the
company's operating profitability and free cash flow. However,
Fitch believes that Corning's end markets have started to
stabilize from a volume perspective while pricing pressures are
anticipated to continue albeit at historical levels as industry-
wide capacity reductions have taken place.

Offsetting the weakness in the telecommunications segment is the
continued improved performance of the various technologies
businesses, with particular strength from the display (LCD) glass
business which has experienced more stable pricing than originally
anticipated. However, Fitch believes pricing pressures could
become more volatile. The LCD business is expected to increase 20-
40% in 2003 and should experience annual double digit growth
through 2007 driven by an LCD upgrade cycle. Corning further
benefits from the growth of this business via its ownership in
Samsung Corning Precision Glass; this is reflected in total equity
earnings. A majority of the company's near-term profitability is
dependent on the LCD business as telecommunications continues to
focus on reducing costs. Even as revenues from the
telecommunications segment are stabilizing, Fitch does anticipate
that it will become a significant profitability contributor for
the next few years.

The stable outlook reflects the company's strong progress through
its intensive restructuring actions, which included significant
headcount reductions and closure and consolidation of a number of
manufacturing locations. Corning has downsized its cost structure
dramatically to an estimated $3 billion revenue run rate from a $7
billion run rate at year end 2000. The company is realizing the
benefits of these cost reductions as it reported a small profit
excluding special charges for the second quarter of 2003 when
equity earnings are included. Revenues appear to have stabilized
and were up sequentially from the first quarter of 2003 even as
telecom continues to be pressured. While Fitch believes the
possibility of further revenue fluctuations exists, Corning should
continue to reduce operating losses from its cost cutting efforts
and could return to operating profitability by year-end 2003.
Corning has made solid strides improving its capital structure and
reducing its total debt. Particular focus has been placed on
reducing the zero coupon convertible debentures which are puttable
in 2005 and have clearly been a maturity risk and liquidity issue.
Through a series of open market purchases as well as a tender
offer, the company has reduced the puttable debentures from $2
billion to approximately $650 million as of July 2003. For the
same time period, total debt was reduced by $2 billion to $3.2
billion and currently consists primarily of various senior notes
as well as the zero coupon convertible debentures. The company has
minimal debt maturities through 2004.

Importantly, the company has maintained adequate liquidity of
about $1.5 billion cash and securities and still has access to a
$2 billion un-drawn revolver which expires in 2005. Corning's
liquidity position has benefited from asset dispositions, the
recent $630 million worth of common stock issuances, and $440
million of a 7% mandatory convertible preferred stock, all of
which were used for debt reduction and to strengthen liquidity.
However, free cash flow remains negative and Fitch expects the
company will continue to be a net user of cash through at least
the first half of 2004, due mostly to cash restructuring charges.

Credit protection measures and profitability have improved since
EBITDA had reached a low of $21 million for year end 2002 (pro-
forma of various asset dispositions). While on a latest twelve
months basis credit protection measures remain weak, the stable
rating outlook is supported by on-going improved profitability and
debt reduction. Fitch believes the company's operating
improvements (as evidenced by the second quarter results) will
result in interest coverage of between 2-3x and leverage of
approximately 8x. However, including the company's equity earnings
leverage improves to approximately 5x. It is Fitch's belief that
this level of quarterly EBITDA and equity earnings is sustainable
for the remainder of the year with modest improvement thereafter.
Further, the company's debt to capital ratio has decreased from a
high of 50% in 2002 to close to 40% in the second quarter of 2003
which is important given the one financial covenant in the
company's bank agreement is a debt/cap of 60%.


CREDIT SUISSE: Fitch Takes Ratings Actions on Ser. 1997-C1 Notes
----------------------------------------------------------------
Credit Suisse First Boston Mortgage Securities Corporation's
mortgage pass-through certificates, series 1997-C1 are upgraded by
Fitch Ratings as follows:

        -- $94.9 million class B to 'AAA' from 'AA+';
        -- $67.8 million class C to 'AA' from 'A+';
        -- $61 million class D to 'BBB+' from 'BBB'.

In addition, the following certificates are affirmed by Fitch:

        -- $77.3 million class A-1B 'AAA';
        -- $559.9 million class A-1C 'AAA';
        -- $47.4 million class A-2 'AAA';
        -- Interest-only class A-X 'AAA';
        -- $64.4 million class F at 'BB';
        -- $13.6 million class G at 'BB-';
        -- $27.1 million class H at 'B-';
        -- $17 million class I at 'CCC';
        -- $13.6 million class J at 'C'.

The $33.9 million class E and $1.8 million class K are not rated
by Fitch. Class A-1A paid off in November 2002 and the rating has
been withdrawn. The upgrades follow Fitch's annual review of the
transaction which closed in June 1997.

The upgrades are primarily the result of increased subordination
levels due to loan payoffs, amortization and the recent full
payoff of the Roosevelt Raceway Shopping Center (4%), the third
largest loan in the transaction. The loan had been specially
serviced and was real estate-owned (REO).

Wachovia Securities, Inc., the master servicer, collected year-end
2002 financials for 57% of the pool balance. Based on the
information provided, the resulting YE 2002 weighted average debt
service coverage ratio is 1.65 times, compared to 1.33x at
issuance for the same loans.

As of the July 2003 distribution date, the pool's aggregate
certificate balance has decreased by 20% since issuance, including
the payoff of the Roosevelt Raceway loan, to $1.10 billion from
$1.36 billion. Of the original 161 loans in the pool, 133 loans
remain outstanding. To date, the transaction has realized losses
in the amount of $11.8 million. Cumulative interest shortfalls due
to appraisal reductions total $2.1 million.

Currently six loans (9%) are in special servicing and include one
REO and two 90+ days delinquent loans. The largest is 90+ days
delinquent (1.6%) and secured by two parking facilities located in
Romulus, MI. The loan was transferred to special servicing in
December 2002 for payment default. The decline in air travel since
the fall of 2001 has negatively impacted the property's
performance and the special servicer is in the process of filing
for foreclosure. Another 90+ days delinquent loan (1%) is secured
by seven limited-service hotels located in Florida, Missouri,
California, Illinois and Kentucky and was transferred to special
servicing in June 2002 when the borrower filed for bankruptcy. The
borrower and special servicer are negotiating a 363 bankruptcy
sale for five of the seven properties. The REO loan (0.2%) is
secured by a multifamily property located in Corpus Christi, TX,
and was transferred to special servicing in February 2003 due to
payment default. The special servicer is making preparations to
place the property on the market for sale.

Fitch applied various stress scenarios taking into consideration
the expected losses on the above loans of concern. Even under
these scenarios, the subordination levels remain sufficient to
upgrade the ratings.

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


CRITICAL PATH: June 30 Net Capital Deficit Balloons to $43 Mill.
----------------------------------------------------------------
Critical Path, Inc. (Nasdaq: CPTH) a global leader in digital
communications software and services, announced financial results
for the second quarter ended June 30, 2003.

Revenues for the second quarter of 2003 were $18.1 million,
compared to $18.0 million in the first quarter of 2003. Cash
operating expenses, which exclude amortization, depreciation and
restructuring charges were $23.6 million in the second quarter of
2003, compared with $26.0 million in the first quarter of 2003.

Based on Generally Accepted Accounting Principles (GAAP) in the
United States, net loss attributable to common shares for the
second quarter of 2003 improved to $11.0 million, compared to
$26.9 million in the first quarter of 2003.

Earnings before interest, taxes, depreciation, and amortization,
adjusted to exclude special charges, amounted to a loss of $5.4
million in the second quarter, compared to an Adjusted EBITDA loss
of $7.9 million in the first quarter of 2003.

"Expenses continued to fall, a credit to our organization for
execution on our plan," said William McGlashan, Jr., Critical Path
chairman and chief executive officer. "We have continued to invest
in our hosted platform during the quarter as the opportunity is
tremendous. We have seen significant interest in our joint
offering with HP and are excited to be finishing the
implementation of our first customer on the new platform.

At June 30, 2003 the Company's cash and cash equivalents totaled
$24.5 million as compared with its March 31, 2003 balance of $31.4
million. During the quarter the Company used cash of approximately
$6.0 million to fund operating losses, approximately $2.1 million
in restructuring payments, approximately $3.3 million in capital
expenditures and $1.4 million in other cash expenses, for an
aggregate cash usage of $12.8 million. These uses were offset by
cash proceeds from the sale of certain equity investments of
approximately $2.1 million and the early release of approximately
$3.8 million from an escrow account established in connection with
the acquisition of The docSpace Company. In light of the Company's
current cash balance, the Company may consider funding and other
strategic alternatives in the coming quarters.

At June 30, 2003, the Company's balance sheet shows a total
shareholders' equity deficit of about $43 million.

Critical Path, Inc. (Nasdaq: CPTH) is a global leader in digital
communications software and services. The company provides
messaging solutions -- from wireless, secure and unified messaging
to basic email and personal information management -- as well as
identity management solutions that simplify user profile
management and strengthen information security. The standards-
based Critical Path Communications Platform, built to perform
reliably at the scale of public networks, delivers the industry's
lowest total cost of ownership for messaging solutions and lays a
solid foundation for next-generation communications services.
Solutions are available on a hosted or licensed basis. Critical
Path's customers include more than 700 enterprises, 190 carriers
and service providers, eight national postal authorities and 35
government agencies. Critical Path is headquartered in San
Francisco. More information can be found at
http://www.criticalpath.net


CRITICAL PATH: Regains Compliance with Nasdaq Listing Standards
---------------------------------------------------------------
Critical Path (Nasdaq:CPTH), a global leader in digital
communications software and services, has received notice from
Nasdaq that the Company has regained compliance with the
requirements for continued listing on The Nasdaq National Market.

The Company also announced that its Board of Directors has voted
to execute a one-for-four reverse stock split. Shareholders
granted the board authority to do so at the Company's annual
meeting held in June. To effect the reverse stock split, the
Company intends to file an amendment to its Articles of
Incorporation on August 1, 2003. The Company will begin trading
under the new symbol "CPTHD" on Monday, August 4, 2003. After 20
trading days, the symbol will revert back to "CPTH."

"Critical Path has made significant progress with customers and
partners, improved its financial results and is once again in
compliance with The Nasdaq National Market listing standards,"
commented William McGlashan, Jr., Critical Path chairman and chief
executive officer. "We believe a reverse stock split will make our
stock potentially more attractive to a broader set of investors
and remove any residual uncertainty concerning future listing
requirements."

Critical Path, Inc. (Nasdaq: CPTH) -- whose June 30, 2003 balance
sheet shows a total shareholders' equity deficit of about $43
million -- is a global leader in digital communications software
and services. The company provides messaging solutions -- from
wireless, secure and unified messaging to basic email and personal
information management -- as well as identity management solutions
that simplify user profile management and strengthen information
security. The standards-based Critical Path Communications
Platform, built to perform reliably at the scale of public
networks, delivers the industry's lowest total cost of ownership
for messaging solutions and lays a solid foundation for next-
generation communications services. Solutions are available on a
hosted or licensed basis. Critical Path's customers include more
than 700 enterprises, 190 carriers and service providers, eight
national postal authorities and 35 government agencies. Critical
Path is headquartered in San Francisco. More information can be
found at http://www.criticalpath.net


CYBEX INT'L: June 28 Working Capital Deficit Stands at $3 Mill.
---------------------------------------------------------------
Cybex International, Inc. (AMEX: CYB), a leading exercise
equipment manufacturer, reported results for the second quarter
ended June 28, 2003.

Net sales for the quarter ended June 28, 2003 were $21,114,000
versus $18,005,000 for the comparable 2002 period. The net profit
for the quarter ended June 28, 2003 was $183,000 compared to a net
loss of $22,243,000 for the second quarter of 2002. Net sales for
the six months ended June 28, 2003 were $41,722,000, compared to
$36,918,000 for the comparable 2002 period. The net loss for the
six months ended June 28, 2003 was $1,604,000 compared to a net
loss of $22,184,000 for the same prior year period. The results
for the second quarter and six months ended June 29, 2002 included
a non-cash charge to establish a valuation reserve for deferred
taxes of $21,316,000 in accordance with SFAS 109. In the future,
such related deferred tax valuation reserve will continue to be
re-evaluated and a benefit will be recorded upon realization of
the deferred tax assets or the reversal of the valuation reserve.

John Aglialoro, Chairman and CEO, commented, "This quarter
represents the fourth consecutive quarter of revenue growth. The
increase in revenue is a result of the Company's focus on new and
differentiated products. Our new Eagle strength line and treadmill
offerings have been marketed since mid-2002 and, as a result,
selectorized strength equipment and treadmill sales have increased
from 2002 levels. In addition, the ArcTrainer continues to outpace
our expectations and we anticipate increasing sales in this line
to existing customers as well as to first time purchasers. We
expect to introduce a totally new line of bikes in the first half
of 2004. Besides our traditional fitness market, Cybex will
proceed with plans to concentrate on the needs of particular
market segments which the Company believes we can best serve,
including the physical therapy/wellness, military,
school/university as well as other vertical market customers who
have space constraints such as hotels and corporate fitness
centers. By dedicating sales and product development efforts to
these market segments we hope to spark additional growth
initiatives."

As previously announced, Cybex refinanced in full its prior credit
facility on July 16, 2003. The new credit arrangements include a
$19,000,000 working capital and term loan facility from CIT
Group/Business Credit, Inc. and an $11,000,000 mortgage loan from
Hilco Capital LP. As part of the refinancing, Cybex' principal
shareholder, UM Holdings Ltd, exchanged $4,900,000 of subordinated
notes for a new series of Preferred Stock, and provided additional
credit support.

At June 28, 2003, the Company's balance sheet shows a working
capital deficit of about $3 million, while its capital shrinks
further to about $1 million.

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


DIVINE INC: Court Fixes August 8, 2003 General Claims Bar Date
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts,
Eastern Division, establishes August 8, 2003, as the deadline for
creditors of divine, Inc., and its debtor-affiliates, to file
their proofs of claim or be forever barred from asserting their
claims against the Company.  Requests for payment of
Administrative Claims are due the same day.

Proofs of Claim and Requests for Payment of Administrative
Expenses must be received by the Debtors' Claims Agent on or
before 4:30 p.m. (Eastern Time) on August 8 and must be delivered
to:

        Trumbull Services Company, LLC
        P.O. Box 721
        Windsor, Connecticut 06095

Parties do not need to file Proofs of Claim at this time on
account of:

        1. Claims not listed as disputed, unliquidated or
           contingent in the Debtors' Schedules;

        2. Claims already properly filed with the Bankruptcy
           Court;

        3. Claims previously allowed by Order of the Court;

divine, Inc., an affiliate of RoweCom Inc., is an extended
enterprise company, which serves to make the most of customer,
employee, partner, and market interactions, and through a holistic
blend of Technology, services, and hosting solutions, assist its
clients in extending their enterprise.  The Company filed for
chapter 11 protection on February 25, 2003 (Bankr. Mass. Case No.
03-11472).  Richard E. Mikels, Esq., Kevin J. Walsh, Esq.,
Adrienne K. Walker, Esq., at Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo and J. Douglas Bacon, Esq., Stephen R. Tetro, Esq., and
Adam R. Skilken, Esq., represent the Debtors in their
restructuring efforts.  When the Debtors filed or protection from
their creditors, they listed $271,372,593 in total assets and
$191,957,065 in total debts.


DUANE READE: Reports Improved Second Quarter Financial Results
--------------------------------------------------------------
Duane Reade Inc. (NYSE: DRD) reported sales and earnings for the
second quarter ended June 28, 2003.

                    SECOND QUARTER RESULTS

As previously announced, net sales increased 9.4% to $355.1
million, with pharmacy sales increasing 14.7% and comprising 43.7%
of net sales. Same-store sales increased 3.1%, reflecting an 8.0%
increase in pharmacy same-store sales and a 0.4% decline in front-
end same-store sales. Sales were adversely impacted by inclement
weather and a soft economy. The pharmacy same-store sales increase
was lower by approximately 4.0% resulting from higher rates of
generic substitution, conversion of prescription Claritin to an
over-the-counter item and declines in consumer demand for hormonal
replacement medications.

In line with recently announced expectations, net income for the
quarter was $4.1 million, compared to $2.3 million in the previous
year. As anticipated, the quarter's earnings reflect an increase
in the tax provision to account for the year-to-date impact of
recently enacted New York State tax legislation. The impact of the
higher tax provision amounted to $0.8 million. The previous year's
quarter included pre-tax debt extinguishment costs of $13.1
million, as well as pre-tax income of $9.4 million associated with
a partial payment of the Company's September 11 World Trade Center
business interruption insurance claim.

Commenting on the Company's results, Anthony J. Cuti, Chairman of
the Board and Chief Executive Officer, stated, "Second quarter
results reflect the continuing burdens of a sluggish economy, high
regional unemployment, and poor weather. Nevertheless, we remain
well positioned in our marketplace and anticipate that our more
prudent expansion program along with a number of cost-cutting
initiatives should begin to reap material benefits early in 2004.
While we continue to remain hopeful of an economic recovery,
current indicators require us to be cautious with our spending
levels and expectations."

Gross profit margin for the second quarter increased to 21.7% of
sales compared to 21.1% in the same period last year. The
improvement was primarily attributable to a comparison against an
unusually high promotional period in the prior year, partially
offset by an increased proportion of lower margin pharmacy sales,
lower volume related vendor discounts and allowances and higher
New York City real estate taxes in the current year. The LIFO
charge amounted to $150,000 in the current year compared to
$400,000 in last year's second quarter.

Selling, general and administrative expenses were 16.1% of sales
compared to 14.9% of sales in the previous year. The increase is
attributable to higher costs of property insurance, expenses for
an increased number of immature one-hour photo departments, and
litigation related expenses primarily associated with the World
Trade Center business interruption insurance claim.

Interest expense for the quarter declined to $3.5 million from
$5.0 million in the same period last year, primarily due to the
convertible note offering completed in April of last year, the
proceeds of which were used to retire higher cost debt.

The provision for income taxes reflects an effective rate of 44%
for the quarter, as well as a retroactive adjustment at the same
rate for the first quarter, attributable to recently enacted New
York State legislation. As previously disclosed, there may be a
need to record an additional tax provision reserve for New York
State taxes in a future quarter related to periods prior to 2003.
This amount cannot be determined at this time but is not expected
to exceed $5.0 million or to have any significant short-term cash
flow impact as a result of carry-forward tax credits.

The Company opened four new stores during the quarter compared to
ten new store openings in the same period last year. As of
June 28, 2003 the Company operated a total of 236 stores.

                         FIRST HALF RESULTS

Net sales for the 26 weeks ended June 28, 2003 increased 9.2% to
$688.8 million compared with $630.6 million the previous year.
Pharmacy sales increased 13.9% to $299.1 million and represented
43.4% of net sales. Front-end sales increased 5.9% to $389.7
million, compared to $368.0 million in the previous year. During
the first half of 2003, same-store sales increased 2.4%, with a
same-store increase of 7.2% in pharmacy sales and a same-store
decline of 1.2% in front-end sales.

Net income for the first half of fiscal 2003 amounted to $7.2
million, compared to $7.6 million before the cumulative effect of
an accounting change last year. The prior year results included
pre-tax debt extinguishment costs of $13.1 million, as well as
pre-tax income of $9.4 million associated with a partial payment
of the Company's September 11 World Trade Center business
interruption insurance claim. Including the cumulative effect of
the accounting change, last year's net loss was $1.7 million.

Gross profit margin was 21.4% of sales, compared to 21.9% in the
same period last year. The decline was primarily attributable to
the increased proportion of lower margin pharmacy sales, increased
first quarter holiday inventory clearance markdowns and higher
store occupancy costs resulting in part from a January 1, 2003 New
York City real estate tax increase. The LIFO provision amounted to
$300,000 in the current year compared to $800,000 in the same
period last year.

Selling, general and administrative expenses amounted to 16.1% of
sales, compared to 15.2% of sales in the previous year. The higher
expense ratio is attributable to lower than usual same-store sales
growth, higher first quarter promotional and advertising expenses,
increased costs associated with the large number of one hour photo
departments added since the same period in the previous year and
increased insurance costs.

Cash flow from operating activities for the 26-week period
amounted to $14.0 million, or 2.0% of sales, compared to $13.7
million, or 2.2% of sales in the previous year.

The Company opened a total of 11 stores and closed three locations
during the first six months of the year, compared with 20 new
stores opened and two stores closed in the prior year period. Pre-
opening expenses amounted to $0.6 million, compared to $1.3
million in the same period last year.

                         CURRENT OUTLOOK

The weak economy and historically high unemployment throughout our
markets have continued to manifest themselves in lower same-store
sales growth. The Company currently anticipates third quarter
sales of approximately $350 to $355 million, reflecting same-store
sales growth between 4.5% and 5.5% and diluted earnings per share
between $0.18 and $0.23. With respect to the full year, annual
sales are estimated to range between $1.410 and $1.420 billion,
with same store sales growth between 3.5% and 4.5% and diluted
earnings per share between $0.78 and $0.88. Expectations for
annual net income reflect the previously announced impact from the
reductions in New York State Medicaid reimbursements, which became
effective on July 1, 2003. The third quarter and full year
earnings guidance also include debt extinguishment costs of
approximately $0.02 per diluted share related to the replacement
of the Company's senior credit agreement with a new five year
secured financing that was announced Thursday last week.

Mr. Cuti concluded, "The pace of economic recovery in the metro
New York area, and more specifically in downtown Manhattan, has
been slower than anticipated and this, coupled with a very poor
spring selling season, is reflected in our expectations for the
balance of fiscal 2003. It is important to note that despite what
has been a challenging period, we believe the longer-term
prospects are positive for the Duane Reade chain. The Company has
retained and strengthened its leading position in New York City as
the primary supplier of pharmacy, healthcare and convenience
products and is well positioned to achieve improved performance
once economic and market conditions rebound."

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

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

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

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


ENRON: Chapter 11 Plan will Appoint a Plan Administrator
--------------------------------------------------------
On the Effective Date, a Plan Administrator will be appointed,
subject to the supervision of the Reorganized Enron Corporation
Debtors' Board of Directors. The Plan Administrator's
responsibilities will include:

    (a) facilitating the Reorganized Debtors' prosecution or
        settlement of objections to and estimations of Claims,

    (b) prosecution or settlement of claims and causes of action
        held by the Debtors and Debtors-in-Possession,

    (c) assisting the Litigation Trustee and the Special
        Litigation Trustee in performing their respective duties,

    (d) calculating and assisting the Disbursing Agent in
        implementing all distributions in accordance with the
        Plan,

    (e) filing all required tax returns and paying taxes and all
        other obligations on behalf of the Reorganized Debtors
        from funds held by the Reorganized Debtors,

    (f) periodic reporting to the Bankruptcy Court, of the status
        of the Claims resolution process, distributions on
        Allowed Claims and prosecution of causes of action,

    (g) liquidating the Remaining Assets and providing for the
        net proceeds distribution thereof in accordance with the
        Plan provisions, and

    (h) other responsibilities as may be vested in the
        Plan Administrator pursuant to the Plan, the Reorganized
        Debtor Plan Administration Agreement or Bankruptcy Court
        order or as may be necessary and proper to carry out the
        provisions of the Plan.

Additionally, Stephen F. Cooper, Acting President, Acting Chief
Executive Officer and Chief Restructuring Officer of Enron Corp.,
relates that the Plan Administrator's powers will, without any
further Bankruptcy Court approval in each of the cases, include:

    (a) the power to invest funds in, and withdraw, make
        distributions and pay taxes and other obligations owed by
        the Reorganized Debtors from funds held by the
        Plan Administrator or the Reorganized Debtors in
        accordance with the Plan,

    (b) the power to compromise and settle Claims and causes of
        action on behalf of or against the Reorganized Debtors
        other than Litigation Trust Claims, Special Litigation
        Trust Claims and claims and causes of action, which are
        the subject of the Severance Settlement Fund Litigation,
        and

    (c) other powers as may be vested in or assumed by the
        Plan Administrator pursuant to the Plan, the Reorganized
        Debtor Plan Administration Agreement or as may be deemed
        necessary and proper to carry out the Plan provisions.

As of the Effective Date, the Reorganized Debtors will assist
the Plan Administrator in:

    (a) holding the Operating Entities for the benefit of
        Creditors and providing certain transition services to
        those entities,

    (b) liquidating the Remaining Assets,

    (c) making distributions to Creditors pursuant to the terms
        of the Plan,

    (d) prosecuting Claim objections and litigation,

    (e) winding up the Debtors' business affairs, and

    (f) otherwise implementing and effectuating the Plan terms and
        provisions. (Enron Bankruptcy News, Issue No. 75;
        Bankruptcy Creditors' Service, Inc., 609/392-0900)


E*TRADE GROUP: S&P Affirms B+ L-T Counterparty Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' long-term
counterparty credit rating on E*TRADE Group Inc. and its 'BB/B'
counterparty credit ratings on E*TRADE Bank. At the same time, the
outlook on both has been revised to stable from negative.

The revision in the company's outlook is due to an improvement in
fundamental profitability from previously weak levels, as well as
an end to the cash burn. Both of E*TRADE's businesses, brokerage
and banking, are benefiting from favorable operating conditions.
The rebound in the stock market during the past several months has
jumpstarted retail brokerage activity, and historically low
interest rates continue to be a boon for mortgage origination.
Since this "best of both worlds" is clearly unsustainable, E*TRADE
has taken important measures to preserve profitability for when
market conditions turn. It has streamlined operations and wrung
out excess capacity, exiting unprofitable ventures. The retail
brokerage unit has substantially reduced its breakeven point to
just 50,000 trades per day. Similarly, it has been preparing for
the eventuality that the refi boom must end, even though the
mortgage origination pipeline stands at record levels. "E*TRADE
continues to diversify its banking business, adding new types of
consumer receivables to the loan book while maintaining good asset
quality," said credit analyst Baylor A. Lancaster.

At the same time, E*TRADE has been strengthening its balance sheet
by expanding its deposit base and generating free cash. Free cash
balances now cover nearly two-thirds of outstanding rated
convertible notes. Risk adjusted capital has been trending
downward as E*TRADE changes the loan mix, but remains quite
strong.

The stable outlook recognizes that E*TRADE's earnings are still
highly dependent on conditions in the capital markets. Revenues
would be vulnerable to a rise in long-term interest rates and/or a
downturn in the stock market. Nonetheless, the company has done
much to address the expense side of the equation and has broadened
its product offerings, so that it should remain at least nominally
profitable in more adverse business climates. While many e-
commerce firms have collapsed, E*TRADE is still standing thanks to
its ability to adapt to changing market conditions, successful
diversification strategy, and solid capital foundation.


EXIDE TECHNOLOGIES: Reorganized Debtor Valued at $950 Million
-------------------------------------------------------------
Exide Technologies (OTCBB: EXDTQ), a global leader in stored
electrical energy solutions, has filed a Disclosure Statement and
an amended Plan of Reorganization with the U.S. Bankruptcy Court
for the District of Delaware.

The Amended Plan is premised on a $950 million valuation of the
Reorganized Company.  Exide's secured lenders, for all intent and
purpose, will own the restructured company.   Holders of the 10%
Senior Notes recover about 1.4 cents-on-the-dollar.  Holders of
the 2.9% Convertibles take noting under the plan.  Shareholders,
of course, are wiped out.

Under the proposed Plan, which is subject to certain creditor
approval and confirmation by the Bankruptcy Court, Exide will
emerge from Chapter 11 with dramatically reduced debt and a
reorganized capital structure. The key elements of the Company's
proposed Plan include a debt-for-equity exchange and the
cancellation of all existing common stock.

The Company has requested a hearing date of August 25, 2003 for
consideration of the Disclosure Statement.

Craig Muhlhauser, Chairman, Chief Executive Officer and President
of Exide Technologies, said, "This Plan will reduce our current
debt by approximately $1.3 billion and the annual interest expense
by over $60 million. We are confident that this reorganization
provides Exide with a strong financial foundation for the future.
With this filing, we remain on track to emerge from Chapter 11
before the end of the year."

Exide Technologies, with operations in 89 countries and fiscal
2003 net sales of approximately $2.4 billion, is one of the
world's largest producers and recyclers of lead-acid batteries.
The Company's three global business groups -- transportation,
motive power and network power -- provide a comprehensive range of
stored electrical energy products and services for industrial and
transportation applications.

Transportation markets include original-equipment and aftermarket
automotive, heavy-duty truck, agricultural and marine
applications, and new technologies for hybrid vehicles and 42-volt
automotive applications. Industrial markets include network power
applications such as telecommunications systems, fuel-cell load
leveling, electric utilities, railroads, photovoltaic (solar-power
related) and uninterruptible power supply (UPS), and motive-power
applications including lift trucks, mining and other commercial
vehicles.

Further information about Exide and its financial results are
available at http://www.exide.com


FANSTEEL INC: Files Plan and Disclosure Statement in Delaware
-------------------------------------------------------------
Fansteel Inc. (Pink Sheets: FNST) and its subsidiary debtors filed
a joint reorganization plan and related disclosure statement with
the U.S. District Court in Delaware.

The reorganization plan is supported by the Creditors' Committee
as well as substantially all of the key creditor constituencies,
including the Nuclear Regulatory Commission, the United States
Environmental Protection Agency, the Pension Benefit Guaranty
Corporation, the Departments of Defense and the Navy, the National
Oceanic Atmospheric Administration and the Department of the
Interior.

Among other things, the reorganization plan will allow Fansteel to
satisfy its environmental remediation obligations over a period of
years, provide its non-environmental creditors a substantial
recovery on their outstanding claims, and, provide its current
shareholders with an ownership interest in the reorganized
company. The plan contemplates that the Company will emerge from
bankruptcy protection in the fourth quarter of this year.

"We believe that this day marks the turning point on our road
towards completion of our reorganization process," stated Gary
Tessitore, Fansteel's President and Chief Executive. "The filing
of this plan is the result of tremendous efforts on the part of
our employees, our customers and our vendors as well as many
months of negotiations and efforts among the Creditors' Committee
and the creditors of the Company who are supporting the plan. We
are looking forward to completing the reorganization process as a
stronger and more competitive organization and expect to emerge
from bankruptcy protection in the fourth quarter of this year.

"We are extremely pleased that we have been able to structure a
plan that will allow us to satisfy our environmental remedial
obligations, particularly at the Muskogee, Oklahoma site, a
concern that had led to our Chapter 11 filing. While the State of
Oklahoma has not supported the Plan after substantial effort and
negotiations, we will continue to engage the State to reach an
agreement. Fansteel is dedicated to providing for the full clean
up of its Muskogee facility and to promoting the health, safety
and welfare of Oklahomans, as well as to Oklahoma's landscape and
wildlife."

The disclosure statement filed with the plan details the estimated
recovery percentages for various classes of creditors. The plan
contemplates varies reorganization actions through consolidations
and divestures.

As previously reported, on January 15, 2002, Fansteel Inc. and its
U.S. subsidiaries filed voluntary petitions for reorganization
relief under Chapter 11 of the United States Bankruptcy Code in
the United States Bankruptcy Court in Wilmington, Delaware. The
cases have been assigned to the Honorable Judge Joseph J. Farnan,
Jr. and are being jointly administered under Case Number 02-10109.


FAST FERRY: Files Plan and Disclosure Statement in New Jersey
-------------------------------------------------------------
Fast Ferry I Corp., a New York Corp., and its debtor-affiliates
filed their Amended Liquidating Chapter 11 Plan and Disclosure
Statement with the U.S. Bankruptcy Court for the District of New
Jersey.  Full-text copies of the documents are available for a fee
at:

  http://www.researcharchives.com/bin/download?id=030718041659

                         and

  http://www.researcharchives.com/bin/download?id=030718041359

The Plan provides for the substantive consolidation of the three
Fast Ferry Debtors.  In these Chapter 11 Cases, there are
compelling reasons to substantively consolidate the three Debtors.
The Debtors, both before and since the Commencement Date, operate
their businesses as an integrated enterprise. The Debtors operate
an identical business lines and these operations and their
financial results are accounted for on a single legal entity
basis.

The Plan classifies claims and interests in various classes. The
Plan states whether each class of claims or interests is impaired
or unimpaired and provides the treatment each class will receive:

  Class   Description       Impairment Treatment
  -----   -----------       ---------  ---------
  N/A     Administrative       N/A     Paid in full on Effective
          Expenses and Fees            Date

  N/A     Priority Tax         N/A     Single lump sum payment
          Claims                       on effective date of plan

  1       Secured Claim     Impaired   Paid in full at closing
          of debris                    on sale of debtor's
          Financial                    assets; unsecured
                                       deficiency claim waived

  2       Secured Claim of  Impaired   No distribution claim to
          James Solakian               receive distribution as a
                                       general unsecured
                                       creditor in Class 8

  3       Secured Claim of  Impaired   No distribution claim to
          Flagg Transmis-              receive distribution as a
          sion                         general unsecured
                                       creditor in Class 8

  4       Secured Claim of  Impaired   Single lump sum distribu-
          Direktor Shipyards           tion of $30,000 on
                                       effective date of plan in
                                       full settlement of all
                                       claims of Class 4
                                       pursuant to Court
                                       approved settlement

  5       Secured Claim of  Impaired   No distribution claim to
          Atlantic Detroit receive     distribution as a
          Diesel                       general unsecured
                                       creditor in Class 8

  6      Secured Claim of   Impaired   Surrender of collateral
         Dell Computer                 in full settlement of
                                       claim

  7      Priority           Unimpaired Paid in full in cash on
         Unsecured Claim               Effective Date

  8      General unsecured  Impaired   Single distribution pro
         claims                        rate from net cash
                                       proceeds of sale of
                                       debtors' assets and any
                                       recovery from litigation

  9      Interest holders   Impaired   No distribution

Fast Ferry I Corp., and Fast Ferry II Corp., are affiliates of
Lighthouse Fast Ferry Inc., which are in the business of operating
high-speed, passenger ferry services in the greater New York City
harbor area.  The Company filed for chapter 11 protection on
January 10, 2003 (Bankr. N.J. Case No. 03-110303). Daniel Stolz,
Esq., at Wasserman, Jurista & Stolz represents the Debtors in
their restructuring efforts.  When the Debtors filed for
protection from its creditors, Fast Ferry I listed $4,840,876 in
assets and $5,318,028 in liabilities while Fast Ferry II listed
$4,841,021 in assets and $5,391,172 in liabilities.


FEDERAL-MOGUL: Asks For Extension of Exclusive Solicitation Period
------------------------------------------------------------------
On March 6, 2003, Federal-Mogul Corporation and its debtor-
affiliates filed a reorganization plan, which they jointly propose
with the Official Committee of Unsecured Creditors, the Official
Committee of Asbestos Claimants, the Legal Representative for
Future Claimants, and JPMorgan Chase Bank, as the Administrative
Agent for the Debtors' prepetition secured credit facility.

On April 21, 2003, the Co-Proponents filed a Disclosure
Statement.  The Plan together with the Disclosure Statement state
that additional issues remain to be resolved by the parties.
Each document contains certain "placeholder" provisions that are
anticipated to be revised once a consensual resolution is
reached.

While the Co-Proponents have made substantial progress in
resolving certain matters during the last several months, a
number of issues still have to be ironed out.  There are a number
of ongoing matters that remain to be finalized by the Co-
Proponents and other significant parties-in-interest, which
include:

    (1) resolving a number of issues concerning the scheme of
        arrangement to be proposed for the English Debtors;

    (2) addressing certain issues with respect to the Hercules
        policy covering a number of the English Debtors and
        ongoing litigation against the reinsurers of that policy
        presently pending in the United Kingdom;

    (3) the development of trust distribution procedures for the
        asbestos claims trust to be established under the Plan
        pursuant to Section 524(g) of the Bankruptcy Code;

    (4) resolving the ongoing litigation between the Debtors and
        the Center for Claims Resolution with respect to the
        claims asserted by the CCR against the surety bonds
        procured prepetition by the Debtors in CCR's favor which,
        if drawn, could give rise to substantial secured claims;

    (5) addressing issues related to the Court-ordered trial
        in connection with the valuation of the Debtors' business
        scheduled on July 21 and 22, 2003; and

    (6) outstanding matters relating to the "placeholder"
        provisions in the Plan.

For this reason, the Debtors ask the Court to further extend
their exclusive solicitation period by an additional four months,
through and including December 11, 2003.

Michael P. Migliore, Esq., at Pachulski, Stang, Ziehl, Young,
Jones & Weintraub, P.C., in Wilmington, Delaware, stresses that
each of the issues are essential to the successful proposal and
confirmation of the Plan.  The Debtors can seek Court approval of
the Disclosure Statement and solicit Plan acceptances once the
process of resolving all the outstanding issues is complete -- a
considerable undertaking, Mr. Migliore adds, given the number and
global scope of the Debtors' creditors.

In the interim, Mr. Migliore reports that the Debtors have
continued to pay their debts and have made considerable progress
in restructuring their business through the implementation of a
new five-year strategic plan.  The Debtors have also resolved and
reconciled 10,000 proofs of claim filed against them with respect
to prepetition claims. (Federal-Mogul Bankruptcy News, Issue No.
40; Bankruptcy Creditors' Service, Inc., 609/392-0900)


FENWAY INT'L: Ex-Auditor Expresses Going Concern Uncertainty
------------------------------------------------------------
On December 26, 2002, Moffitt & Company, P.C., Fenway
International Inc.'s independent accountant, resigned. Effective
as of May 23, 2003, the Company's new independent accountant is
Farber & Hass, LLP, certified public accountants. The Company
retained the accounting firm of Farber on May 23, 2003 to make an
examination of the financial statements of the Company for the
2002 fiscal year.  Fenway authorized Moffitt to respond fully to
any inquiries from Farber and to make its work papers available to
Farber.

The reports of Moffitt for the fiscal years ended Dec. 31, 2000
and Dec. 31, 2001 and through the period ended Dec. 26, 2002,
carried a modification as to Fenway's ability to continue as a
going concern. The Company has not filed any interim or year end
reports since March 31, 2002.


FLEMING COS: Seeks Court's Go-Signal for C&S Purchase Agreement
---------------------------------------------------------------
The Fleming Debtors ask the Court to approve their asset purchase
agreement with C&S Wholesale Grocers Inc. and C&S Acquisition LLC.
The Debtors believe that C&S Acquisition's offer for the Wholesale
Distribution Business assets pursuant to the Purchase Agreement is
the highest and best offer so far.

Under the Purchase Agreement, the Debtors will sell all assets
relating to the Wholesale Distribution Business, including, but
not limited to:

    (a) All operating and non-operating product supply centers and
        related assets;

    (b) Specified contracts and leases relating to the Wholesale
        Distribution Business, including certain real property
        leases and subleases, facility standby agreements and
        various equipment leases;

    (c) Notes receivable;

    (d) Leasehold improvements owned by the Debtors relating to
        the Wholesale Distribution Business;

    (e) All machinery, equipment, fixtures, trade fixtures and
        other similar items of personal property relating to the
        Wholesale Distribution Business;

    (f) The saleable inventory relating to the Wholesale
        Distribution Business;

    (g) All assignable permits and licenses relating to the
        operation of the Wholesale Distribution Business; and

    (h) Various parcels of owned real property relating to the
        Wholesale Distribution Business.

The Debtors will not sell Cash, remaining inventory at closed
product supply centers, trade accounts receivable, deposits, and
assets primarily relating to retail or convenience businesses.
Additionally, amounts under customer-related assets due and owing
through the Initial Closing Date, including interest are
excluded.

The Debtors also operate a convenience store distribution
business, which supplies products to traditional convenience
retailers.  The majority of the convenience business is operated
by Core-Mark International, Inc. and its subsidiaries.  Ms. Jones
clarifies that the proposed sale to C&S does not include the
Convenience Business or any of Core-Mark's assets, except those
not primarily related to the Convenience Business.

C&S Acquisition will also assume liabilities arising with respect
to the Acquired Assets and Contracts on and after the applicable
closing date for such Acquired Asset.  C&S Acquisition will not
assume all Liabilities arising before the Initial Closing Date,
including payables and accrued expenses, taxes, employment
matters including severance and WARN and liabilities relating to
the Excluded Assets.

The salient terms of the Asset Purchase Agreement include:

Estimated Purchase      The Purchase Price for the Assets has
Price                   three components:

                         Inventory Amount           $230,000,000
                         Faced Component              75,000,000
                         Royalties                    95,000,000
                                                    ------------
                         Purchase Price from C&S    $400,000,000

Inventory Amount        Generally, the amount is based on the
                         "net landed" cost of saleable inventory,
                         as determined in accordance with an
                         agreed upon valuation methodology.  If
                         any Inventory is considered to have no
                         value under the methodology or the
                         parties are unable to reach agreement on
                         the value of the Inventory, then the
                         Inventory will be an Excluded Asset and
                         will not be transferred to C&S
                         Acquisition.  Up to $250,000,000 of
                         Inventory Amount will be paid at the
                         initial closing.  Any amounts in excess
                         of $250,000,000 will be paid within 30
                         days of the initial closing.

Option Period           C&S Acquisition may purchase some or all
                         the Acquired Assets on the Initial
                         Closing Date and at any time up to six
                         months after the closing, it may elect to
                         designate additional assets for transfer
                         or assignment.  C&S may elect to purchase
                         some or all of the Acquired Assets
                         directly from the Debtors or may
                         designate one or more Third Party
                         Purchasers to acquire the Assets directly
                         from the Debtors.

Royalty Amount          Approximately 1% of sales to transferred
Generally               customers during the five-year period
                         after the initial closing.  Approximately
                         50% of the estimated first year sales
                         will be paid at the initial closing.  An
                         additional 25% of the estimated first
                         year sales will be paid 75 days after the
                         closing.  The remainder of the royalty
                         amount will be paid quarterly after
                         that.

Royalty Amount for      C&S Acquisition has option to pay:
Transferred Customers
further transferred     * 1% of sales associated with transferred
to a Third Party          customers during the five-year period
                           after the initial closing -- pro rated
                           for any sales a Third Party Purchaser
                           is already making to that transferred
                           customer.  The amount will be payable
                           quarterly.

                         * Lump sum payment equal to present value
                           of 1% of estimated sales to transferred
                           customers during the four-year period
                           after the initial closing -- at a 10%
                           discount rate, pro rated for any sales
                           that a Third Party Purchaser is already
                           making to that transferred customer.
                           Generally, estimate of sales will be
                           based on sales for the 60-day period
                           ending 30 days after the initial
                           closing with that Third Party
                           Purchaser.

Deposit                 $5,000,000 promptly after the signing of
                         the Purchase Agreement, $5,000,000 on
                         July 16, 2003 and $8,000,000 on the
                         business day immediately preceding the
                         day a third party bidder is required to
                         make deposits.

Cure Cap                $22,000,000

Escrow Amount           $15,000,000 which will be placed in
                         escrow for up to 18 months -- subject to
                         extension for the estimated amount
                         associated with any pending claim.

Indemnification         The Debtors will indemnify C&S
                         Acquisition for:

                         * breaches of representations and
                           warranties;

                         * breaches of covenants;

                         * Cure Costs; and

                         * Excluded Liabilities

                         All indemnity claims must first be
                         brought against the Escrow Amount and
                         the Escrow Amount will serve as a
                         liability cap for breaches of
                         representations and warranties.

Key Termination         Termination by either the Debtors or C&S:
Provisions
                         * C&S Acquisition is not selected as
                           successful bidder at the Auction

                         * If the closing date will not have been
                           consummated on or before August 29,
                           2003

                         Termination by C&S:

                         * Material breach by the Debtors under
                           the Asset Purchase Agreement that is
                           not cured after notice

                         Termination by the Debtors:

                         * Material breach by C&S Acquisition
                           under the Purchase Agreement that is
                           not cured after notice

                         * Cure amounts for the Acquired Contracts
                           exceed the $22,000,000 Cure Cap

Transition Services     In general, the Debtors will continue to
Agreement               operate the Acquired Assets not assigned
                         C&S or excluded prior to the initial
                         closing, for the account of, and under
                         the general direction of, C&S during the
                         Option Period, or shorter period of time
                         that each asset is assigned to C&S or
                         excluded, using the Debtors' employees.

Employees               C&S Acquisition is not obligated to hire
                         any employees or assume any obligations
                         associated with any employees, provided
                         that it is obligated to pay or reimburse
                         the Debtors for the post-closing cost of
                         any wages payable to employees utilized
                         under the Transition Services Agreement.

A full-text copy of the Asset Purchase Agreement is available for
free at the Securities and Exchange Commission at:

http://www.sec.gov/Archives/edgar/data/352949/000095013403009994/d07337exv10
w1.txt

Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub P.C., represents that the Purchase Agreement is an
intensely negotiated, arm's-length transaction.  "The
negotiations involved substantial time and energy by the parties
and their professionals, and the APA reflects give-and-take and
compromises by both sides," Ms. Jones says. (Fleming Bankruptcy
News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


FLEXTRONICS: June Quarter Net Loss More than Doubles to $290MM
--------------------------------------------------------------
Flextronics International Ltd. (Nasdaq: FLEX) announced results
for the quarter ended June 30, 2003, as follows:

Net sales totaled $3.1 billion for the quarter ended June 30,
2003, reflecting a 1.5% sequential increase over the prior quarter
sales. Proforma net income was $20.4 million, which is down
moderately from $25.4 million, respectively, in the prior
sequential quarter. After including after-tax amortization expense
of $7.9 million and unusual charges of $302.2 million, Flextronics
incurred a GAAP loss of $289.7 million.

The unusual charges recorded in the June quarter of 2003 includes
a $8.7 million after-tax loss on the early retirement of debt and
an after-tax restructuring charge of $293.5 million, the cash
portion of which is $21.2 million. The restructuring charges
include $230.0 million for the closure of two facilities and an
asset impairment charge relating to our Multek PCB business. The
remaining restructuring charge relates to the closure and
consolidation of facilities in our other business units. In order
to optimize the operating efficiencies provided by our global
footprint, to reduce the overall risk profile of the Company, and
to provide for additional margin upsides in the future, we expect
to complete some final optimization of facilities during the
remainder of our fiscal year. This strategic decision, combined
with additional charges relating to the June quarter restructuring
that could not be accrued for in that quarter pursuant to GAAP,
will result in recognizing additional restructuring charges over
the next few quarters that should total approximately $85 million.

The Company strengthened its liquidity again in the June quarter
with cash increasing to $860 million and total liquidity reaching
$1.7 billion. Cash flow from operations contributed $246 million
while the Company continued to lead the industry in working
capital management with a cash conversion cycle of 25 days, a one-
day improvement over the prior quarter.

"The June quarter was very similar to the March quarter with the
exception of net interest expense, and to us that demonstrates
stability in our business and is in line with our belief that end
markets have stabilized as well," said Michael E. Marks, Chief
Executive Officer of Flextronics. "Whether an upturn is underway
is difficult to know, but in our view demand is slightly
improving. Restructuring activities and cost reductions are
continuing across the industry, and this should work to improve
margins." With regard to the business outlook, Mr. Marks continued
to say: "Our business is stable and we continue to generate cash.
We have aggressively invested over the last several years to
expand our portfolio of value-added services. We are making
excellent progress in a number of very important design related
initiatives, and we expect to see results from these efforts this
fiscal year. Our company is in fine financial shape, and is well
respected in the industry and by our customer base."

In terms of guidance, the Company indicated that the September
quarter should generate sales in the range of $3.3 - $3.5 billion
and proforma earnings of $0.06 - $0.08 per share and its
expectations for the December quarter are for sales of $3.5 - $3.9
billion, and earnings of $0.11 - $0.15 per share. GAAP earnings
are expected to be lower than proforma earnings reflecting
approximately 2 cents per diluted share of quarterly amortization
expenses as well as the further restructuring charges, which we
expect will total approximately $85 million, or 15 cents in total
per diluted share, spread over the next few quarters. The actual
timing of such charges, and accordingly the actual difference
between quarterly proforma and GAAP earnings, has yet to be
determined.

Mr. Marks concluded by saying, "We are committed to getting back
to 20% or more of year over year proforma earnings improvement. We
believe that we will achieve those kinds of numbers beginning in
the March quarter, and as we move into next fiscal year. If our
ODM activities develop as we hope, or if there is a more
generalized recovery in the end markets, we should do even
better."

Headquartered in Singapore, Flextronics is the leading Electronics
Manufacturing Services provider focused on delivering operational
services to technology companies. With fiscal year 2003 revenues
of $13.4 billion, Flextronics is a major global operating company
with design, engineering, manufacturing, and logistics operations
in 29 countries and five continents. This global presence allows
for manufacturing excellence through a network of facilities
situated in key markets and geographies that provide its customers
with the resources, technology, and capacity to optimize their
operations. Flextronics' ability to provide end-to-end operational
services that include innovative product design, test solutions,
manufacturing, IT expertise, network services, and logistics has
established the Company as the leading EMS provider. For more
information, visit http://www.flextronics.com

As reported in Troubled Company Reporter's May 6, 2003 edition,
Standard & Poor's Ratings Services assigned its 'BB-' rating to
Flextronics International Ltd.'s new $400 million senior
subordinated notes issue due 2013.

At the same time, Standard & Poor's affirmed its 'BB+' corporate
credit rating and its other ratings on Flextronics. The outlook
remains stable.


GATEWAY INC: Reports Strong Performance for 2003 Second Quarter
---------------------------------------------------------------
Gateway, Inc. (NYSE: GTW) reported revenue of $800 million for the
quarter ending June 30, 2003, compared to $844 million in the
first quarter and $1.0 billion in the prior year period. The
company reported a net loss of $73 million, or $0.22 per share,
better than the analysts' consensus estimates by $0.06 per share
compared with a net loss of $200 million (including a $78 million
restructuring charge), or $0.62 per share in the previous quarter,
and a net loss of $61 million, or $0.19 per share a year earlier.

Gateway's pre-tax loss in the quarter was $70 million, which
represents a 25 percent improvement from the prior year pre-tax
loss of $93 million. The company's pre-tax loss improved 65
percent sequentially; excluding the restructuring charge in the
first quarter, this improvement was 42 percent. As previously
indicated, second quarter results, particularly net loss and
earnings per share, do not reflect a benefit from income taxes
included in last year's comparable quarter results. The company
said its better than expected margin and EPS performance was a
result of accelerated cost savings and steadily increasing sales
of higher margin non-PC products.

"We're pleased with the progress we're making in transforming from
a traditional PC company to a branded integrator," said Ted Waitt,
Gateway's chairman and CEO. "We have a lot of work to do, but
every step in our transformation is being taken from a position of
increased strength and momentum, and we expect to keep delivering
on our milestones and goals through the balance of the year and
beyond."

                 Q2 2003 Performance Highlights

* Sales of Gateway's 42-inch plasma television, which remains the
  nation's number one selling plasma TV in its category, increased
  steadily throughout the quarter, particularly in the company's
  retail channel.

* The company continued to broaden its overall product line with
  the launch of 10 new products in two new categories in May and
  June, further enhancing the company's efforts to diversify its
  revenue streams. Gateway's non-PC revenue as a percentage of
  total revenue increased to 28 percent from 24 percent in the
  prior quarter, with non-PC products and services contributing 70
  percent of the company's overall gross margin versus 76 percent
  in the first quarter. Approximately eight percentage points of
  the 76 percent described above related to the first quarter
  restructuring charge.

* Gateway's Business segment continued its strong performance,
  increasing revenue 19 percent over the prior quarter and
  remaining profitable.

* Gateway began a pilot program to renovate its retail network
  late in the second quarter. The company officially opens its
  first new pilot store in San Diego's Mission Valley tomorrow,
  with four additional pilots to be opened in the coming weeks. In
  July, Gateway implemented its plan to remodel all 192 stores to
  better accommodate its broader product line and unique high-
  assist sales approach in time for the holiday selling season.

* The company's cash conversion cycle more than doubled from the
  prior quarter to minus seven days and Gateway ended the quarter
  with $1.17 billion in cash and marketable securities.

* Gateway continued to make significant progress in reducing its
  costs of goods sold by $200 million in 2003 and remains on track
  to meet its target to reduce selling, general and administrative
  expenses by $125 million in 2003 ($200 million on an annualized
  basis). The company's second quarter COGS savings of $48 million
  exceeded its target of $35-$40 million.

                         Quarterly Sales

In the second quarter, Gateway sold 490,000 PCs, down 3 percent
sequentially and 25 percent on a year-over-year basis. This
decline was due primarily to the effect of previously announced
store closures late in the first quarter and the company's stated
focus on mid to higher end PC sales. This strategy was reflected
in Gateway's average unit price (AUP) of $1,632, which was
slightly below the previous quarter's $1,670 (a two-year high),
and compared to $1,544 in the second quarter of 2002. AUP is
defined as total net sales divided by PC units.

Gateway will return to the low end of the PC market in the coming
weeks with a new desktop product line that will provide both high
value to the customer and enhance the company's efforts to return
its PC business to profitability.

                         Pre-Tax Loss

Gross margin was 17.2 percent, compared to 12.6 percent in the
previous quarter and 14.3 percent in the second quarter last year.
Gross margin in the previous quarter was negatively impacted by
1.5 percentage points due to restructuring costs. Gateway's strong
margin performance in the quarter was due to accelerated COGS
savings, including warranty cost reductions, and increased sales
of non-PC products and services.

SG&A was $212 million in the second quarter, down from $308 in the
first quarter of 2003 and $242 million in the second quarter of
2002. First quarter SG&A included $65 million in restructuring
costs. The reduction in SG&A primarily reflects the impact of
previously announced first quarter store closures, increased
efficiencies in marketing communications and other labor and non-
labor SG&A expense reductions.

Pre-tax loss was $70 million in the second quarter, significantly
better than the $93 million in the second quarter of 2002.

                         Outlook

Gateway confirmed that it is comfortable with analysts' consensus
of third quarter revenue of $874 million and fourth quarter
revenue of $954 million and is maintaining its prior guidance for
a third quarter loss of $0.19 per share, and a fourth quarter loss
of $0.09 per share, which is slightly better than analysts'
consensus. EPS guidance and anticipated SG&A savings do not
include the impact of additional costs and expenses the company
may incur in the third and fourth quarters relating to outsourcing
initiatives it is considering as part of its transformation from a
PC company to a branded integrator. These initiatives would be
undertaken only if they were believed to provide long-term cost
savings to the company, while enabling it to further improve
overall quality and customer satisfaction. The company also
reaffirmed its expectation to return to a positive cash flow
position in the fourth quarter and exit the year with more than $1
billion in cash and marketable securities.

Gateway expects to provide more detail on the exact costs and
benefits from these potential activities, as well as its retail
transformation costs, later in the third quarter.

Since its founding in 1985, Gateway (NYSE: GTW) (S&P, B+ Corporate
Credit Rating, Stable) has been a technology and direct-marketing
pioneer, using its call centers, web site and retail network to
build direct customer relationships. As it transforms itself from
being a leading PC company into a branded integrator of
personalized technology solutions, the company's line of Gateway-
branded products is expanding to include digital TVs, DLP
projectors, tablet PCs and systems and networking products and
services. Gateway is America's second most admired computer
company, according to Fortune magazine, and its products and
services received more than 125 awards and honors last year. For
more information, visit http://www.gateway.com


GPN NETWORK: Ability to Continue Ops. as Going Concern Uncertain
----------------------------------------------------------------
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.


HARRIS TRUST: Court Fixes Sept. 30, 2003 as Claims Bar Date
-----------------------------------------------------------
Harris Trust Company of New York has been granted approval to
close its operations by Order of the Honorable Kibbie F. Payne of
the Supreme Court of New York.

Any creditors must present their claims to the company on or
before Sept. 30, 2003, and deliver their claims to:

     Harris Trust Company of New York
     Attn: Martin J. McHale, Jr.
           Chairman and President
     111 W. Monroe Street, 4th Floor
     West Chicago, Illinois, 60603

Presentment may be made in person or in writing. If in writing,
the name and address of the Claimant and basis for the Claim must
be stated.


HYTEK MICROSYSTEMS: Shares Yanked Off Nasdaq Effective July 25
--------------------------------------------------------------
Hytek Microsystems, Inc. (Nasdaq: HTEK) withdrew its appeal of
delisting with NASDAQ and was delisted effective with the opening
of business on Friday, July 25, 2003. The Company securities
became immediately eligible for quotation on the OTC bulletin
board with the opening of business on July 25, 2003. The OTC
bulletin board symbol assigned to the Company will be "HTEK".

On December 19, 2002, the Company was notified that the bid price
of its common stock had closed at less than $1.00 per share over
the previous 30 consecutive trading days, and, as a result, did
not comply with Marketplace Rule 431(C)(4). The Company filed an
appeal, pursuant to the procedures set forth in the NASDAQ
Marketplace Rule 4800 series. The Company has not regained
compliance with the minimum $1.00 per share bid price, and as a
result has withdrawn its appeal.

Founded in 1974, Hytek, headquartered in Carson City, Nevada,
specializes in hybrid microelectronic circuits that are used in
oil exploration, military applications, satellite systems,
industrial electronics, opto-electronics and other OEM
applications.

As reported in Troubled Company Reporter's May 15, 2003 edition,
the Company, during the first quarter, paid down its loan with
Bank of the West by $20,000.  As of March 29, 2003, the bank
declared the Company to be in default with a financial covenant of
the business loan agreement dated May 21, 2001.  The Company
failed to maintain a minimum tangible net worth of not less than
$5,000,000.


IMC GLOBAL: Red Ink Continued to Flow in Second Quarter 2003
------------------------------------------------------------
IMC Global Inc. (NYSE: IGL) reported earnings from continuing
operations of $22.1 million, or 19 cents per diluted share, for
the quarter ended June 30, 2003 compared with earnings from
continuing operations of $6.7 million, or 6 cents per diluted
share, a year ago.

A loss from discontinued operations of $29.0 million, or 25 cents
per diluted share, was recorded in the quarter, predominantly
reflecting a non-cash charge for a reduction in expected proceeds
to a minimal amount in view of a non-binding letter of intent to
sell the Company's remaining IMC Chemicals assets. In the year ago
quarter, the Company reported a loss from discontinued operations
of $54.1 million, or 47 cents per diluted share.

Including losses from discontinued operations in both periods, the
Company reported a net loss of $6.9 million, or 6 cents per
diluted share, in the second quarter of 2003 compared with a net
loss of $47.4 million, or 41 cents per diluted share, a year ago.

2003 earnings from continuing operations included a pre-tax gain
of $52.0 million ($48.0 million after tax), or 41 cents per
diluted share, from two transactions in June with Compass Minerals
Group, Inc., to whom IMC Global sold its Salt and Great Salt Lake
businesses in November 2001. The two transactions included a pre-
tax gain of $16.5 million, recorded in operating earnings, and a
pre-tax gain of $35.5 million on the sale of most of the Company's
retained investment in Compass. The transactions included the sale
of about 15 percent out of the Company's 19.9 percent minority
economic interest in Compass and the sale of the sulphate of
potash (SOP) business line. Additional estimated proceeds of $5-10
million are expected in the fourth quarter.

Partially offsetting this gain was a non-cash, pre-tax loss from
the unfavorable impact of the strengthening Canadian dollar on IMC
Potash's U.S. dollar denominated receivables of $28.8 million
($19.6 million after tax), or 17 cents per diluted share. In the
year-ago quarter, the Company reported a non-cash loss from an
unfavorable foreign currency impact of $7.7 million ($5.2 million
after tax), or 5 cents per diluted share. As explained in hedging
activity disclosures in previous 10-K and 10-Q reports, the
Company fully hedges its Canadian dollar cash transactions, and
hedged gains and losses are recorded in IMC Potash's gross
margins, but the Company does not hedge against non-cash, U.S.
dollar denominated receivables translation risk.

2003 second quarter results were impacted by greatly increased
ammonia, natural gas and sulphur raw material costs, and higher
idle plant costs from the shutdown of the remaining Louisiana
phosphate production around June 1 and the idling of a Florida
rock mine for the month of April, partially offset by a
significant increase in phosphate selling prices. Ammonia and
sulphur costs increased 62 percent each versus the prior year,
while average diammonium phosphate realizations increased $23 per
short ton, or 17 percent. Interest expense increased 6 percent to
$46.0 million due to higher financing costs.

Net sales in the second quarter of 2003 fell 8 percent to $538.7
million from $588.3 million a year ago due to reduced phosphate
and potash volumes, partially offset by the higher phosphate
prices.

For the first half of 2003, the Company reported a loss from
continuing operations of $9.6 million, or 8 cents per diluted
share, compared with earnings from continuing operations of $11.5
million, or 10 cents per diluted share, a year ago. This included
a non-cash loss of $50.7 million, or 30 cents per diluted share,
in 2003's first half and a non-cash loss of $6.7 million, or 4
cents per diluted share, in the prior year, both from the impact
of the stronger Canadian dollar.

The Company reported a net loss of $43.5 million, or 37 cents per
diluted share, in the first half of 2003, which included the
cumulative effect of a change in accounting principle of $4.9
million, or 4 cents per diluted share, and a predominantly non-
cash loss from discontinued operations of $29.0 million, or 25
cents per diluted share. This compared with a 2002 first half net
loss of $42.6 million, or 37 cents per diluted share, which
included a predominantly non-cash loss from discontinued
operations of $54.1 million, or 47 cents per diluted share.

Second quarter capital expenditures declined 26 percent to $24.9
million; first half capital expenditures of $48.6 million compared
with $65.5 million in the year-ago period. Operating earnings and
depreciation, depletion and amortization expenses in the quarter
were $37.9 million and $43.1 million, respectively, compared with
$57.4 million and $41.8 million a year earlier.

                         IMC PhosFeed

IMC PhosFeed's second quarter net sales of $318.6 million
decreased 12 percent compared with $361.6 million last year as a
result of lower shipments, partially offset by higher prices.
Total concentrated phosphate shipments of approximately 1.3
million short tons were 26 percent below the prior-year level of
approximately 1.7 million primarily due to the poor U.S. spring
planting season, lower Chinese volumes as a result of the absence
of a Sinochem supply contract, and the shutdown of all Louisiana
phosphate production in June. Export and domestic volumes fell 28
and 24 percent, respectively, versus 2002. The average price
realization for DAP of $158 per short ton in the second quarter,
the highest level since the second quarter of 1999, increased $23,
or 17 percent, versus the prior year and $15, or 10 percent,
compared to the first quarter of 2003, reflecting a tightening of
supply-and-demand. Domestic and export DAP realizations rose 17
and 14 percent, respectively.

Second quarter gross margin losses of $13.4 million declined from
gross margins of $14.5 million a year ago due to greatly increased
ammonia and sulphur raw material costs, higher idle plant costs
from the shutdown of the balance of Louisiana production in June,
and the planned idling of a Florida rock mine for the month of
April, partially offset by the higher phosphate pricing.

Approximately 30 percent of IMC's Louisiana concentrated phosphate
output continued to be idled in April and May before a total
shutdown was implemented on June 1 to better balance supply and
current market demand.

First half revenues of $677.6 million were slightly higher than
$674.3 million a year ago as significantly improved phosphate
prices essentially offset reduced sales volumes. The average DAP
price per short ton of $149 increased 10 percent versus the prior-
year period as export and domestic realizations improved 10 and 11
percent, respectively. Phosphate shipments of 2.9 million short
tons fell 9 percent compared with 3.2 million short tons in the
first half of 2002.

Gross margin losses of $28.2 million in the first half of 2003
compared with gross margins of $32.5 million a year earlier due to
significantly higher ammonia, sulphur and natural gas costs,
higher production costs, and lower sales volumes, partially offset
by higher selling prices.

                         IMC Potash

IMC Potash's second quarter net sales declined 4 percent to $239.1
million versus last year's $249.4 million as reduced domestic
shipments from a disappointing U.S. spring season more than offset
slightly improved selling prices. Total shipments of 2.4 million
short tons fell 3 percent versus approximately 2.5 million a year
ago. A 3 percent increase in export volumes was more than offset
by a 6 percent decline in domestic shipments. The average selling
price, including all potash products, was $74 per short ton
compared to last year's $73 per short ton. Approximately $3 of the
February and March domestic muriate of potash (MOP) price
increases was achieved in the second quarter. The Company has
announced a $10 per short ton MOP domestic price increase,
effective July 15.

Second quarter gross margins of $62.7 million fell 5 percent from
the prior year due to higher production costs, including increased
natural gas prices.

First half net sales of $453.3 million were essentially equivalent
to last year's $454.6 million. Gross margins of $118.1 million
were slightly lower than $120.6 million a year ago. Sales volumes
rose 2 percent to approximately 4.6 million short tons from
approximately 4.5 million last year. Higher export shipments more
than offset reduced domestic volumes. The average selling price,
including all potash products, of $74 per short ton was unchanged
from the prior year.

                    Observations and Outlook

"Second quarter operating results from our phosphate and potash
businesses were essentially in line with previous guidance," said
Douglas A. Pertz, Chairman and Chief Executive Officer of IMC
Global. "Similar to the first quarter, the encouraging $23 per
short ton improvement in our realized DAP prices versus 2002 was
not sufficient to offset a continuation of much higher ammonia,
natural gas and sulphur costs, which again negatively impacted
phosphate margins. The total shutdown of Louisiana phosphate
production in June and the final month of the three-month idling
of one Florida rock mine in April also negatively impacted our
results in the quarter.

"As we previously indicated, U.S. spring season demand for our
products, especially phosphates, was disappointing," Pertz noted.
"Reduced planted corn acreage and very high nitrogen fertilizer
prices triggered by natural gas cost spikes, which limited
farmers' overall input purchasing flexibility, led to softer-than-
expected phosphate and potash shipments."

Pertz said higher domestic potash pricing trends continued in the
quarter, with about a $3 per short ton improvement in average
muriate of potash realizations achieved from a pre-season price
increase. Pertz also pointed to improved potash export volumes in
the quarter and first half, aided by strong Chinese and Brazilian
demand and the Company's increased Canpotex allocation.

Underlying phosphate price trends remain strong for the second
half of 2003, Pertz noted. 2003 DAP spot prices have been at their
highest levels since 1999, as evidenced by the current Tampa
export spot price of about $181 per metric ton, while producer and
dealer inventories are reportedly very low. A strong U.S. fall
season appears likely to replenish depleted stocks and soil
nutrient levels; export demand should remain firm primarily due to
increased imports by India and Pakistan and prospects for solid
fourth quarter Chinese shipments given low inventories in that
country.

With the likelihood of a continuation of improved DAP pricing, the
degree of raw material cost easement remains a key to expansion of
phosphate margins in the second half of 2003, Pertz noted. "While
ammonia and natural gas costs remain stubbornly high, we are
pleased to have achieved a $4 per long ton reduction in third
quarter sulphur contract prices versus the second quarter."

Through its continuous improvement program, the Company maintains
an aggressive focus on cost reduction, Pertz said. This includes
an expanding Six Sigma program that targets 2003 pre-tax savings
of about $12 million and a broad-based, multi-year Operational
Excellence initiative that aims for pre- tax savings of $70
million annually by 2005.

Prior guidance of improved earnings per share from continuing
operations in the second half of 2003, before any asset sales and
foreign currency translation impact, will ultimately depend upon
factors including overall phosphate pricing and volumes trends,
the strength of the domestic fall fertilizer season and fourth
quarter Chinese import demand, the degree of raw material cost
easement, and the duration of the total shutdown of Louisiana
phosphate production. The Company noted that second half results
will be negatively affected by pre-tax costs and expenses
connected with recent financing activities totaling approximately
$32 million, or 18 cents per diluted share. They approximate $26
million for 2005 bond tender premiums and fees to be incurred in
the third quarter, and $6 million of higher interest expense from
the issuance of $400 million of higher coupon, 10-year senior
notes.

                  Balance Sheet Strengthening

"Our recently completed financing program, coupled with the
Compass transactions, have significantly strengthened our balance
sheet by pushing out debt repayment dates, boosting our cash
reserves and restoring full borrowing capacity from our bank
revolver," said Pertz.

Emphasizing the Company's improved liquidity position, Pertz said
net cash proceeds of $133 million from a convertible preferred
share offering along with $57 million of cash from the Compass
Minerals transactions have predominantly accounted for about $185
million of cash on the balance sheet at June 30, even after
restoring full bank revolver availability.

"Upon the completion of our cash tender offers on August 1, we
expect to have well under $50 million outstanding on the original
amount of $450 million of 2005 debt maturities," Pertz noted. "We
have no other scheduled public debt maturity until July 2007.

"We chose to act now to resolve these balance sheet issues of
liquidity and debt maturities, which we believe is in the best
interests of our equity and debt holders," Pertz concluded. "We
believe we have now positioned IMC Global to fully focus on
reaping the benefits of a recovering phosphate market."

With 2002 revenues of $2.1 billion, IMC Global is the world's
largest producer and marketer of concentrated phosphates and
potash crop nutrients for the agricultural industry and a leading
global provider of feed ingredients for the animal nutrition
industry

As reported in Troubled Company Reporter's July 21, 2003 edition,
Standard & Poor's Ratings Services assigned its 'B+' rating to
fertilizer producer IMC Global Inc.'s proposed $310 million senior
unsecured notes due 2013.

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


INDYMAC: Fitch Takes Actions on 18 Classes from 3 Certificates
--------------------------------------------------------------
Following a review of the underlying collateral, Fitch Ratings has
taken rating actions on the following IndyMac Manufactured Housing
Contract pass-through certificates:

Series 1997-1:

        -- Classes A-2 - A-6 affirmed at 'AAA';
        -- Class M downgraded to 'B' from 'BBB';
        -- Class B-1 affirmed at 'C'.

Series 1998-1:

        -- Classes A-3 - A-5 affirmed at 'AAA';
        -- Class M downgraded to 'B' from 'BBB';
        -- Class B-1 affirmed at 'C'.

Series 1998-2:

        -- Classes A-2 - A-4 affirmed at 'AAA';
        -- Class M-1 downgraded to 'B' from 'BBB-';
        -- Class M-2 downgraded to 'CCC' from 'BB-';
        -- Class B-1 affirmed at 'C'.

Although IndyMac exited the manufactured housing lending business
in mid 1999, it continues to service its loans from Pasadena where
the company's mortgage loan servicing operation is located. The
lack of dealer relationships (as a result of exiting the
origination business) coupled with the oversupply of repossessed
homes in the marketplace, continues to put significant pressure on
recovery rates.

Since IndyMac exited the manufactured housing lending business,
Fitch has taken numerous rating actions on the company's
manufactured housing bonds. These actions are a result of the
continued poor performance of the underlying manufactured housing
loans in the transactions. The higher than expected losses has led
to the complete depletion of over-collateralization on all three
transactions. As of the June 2003 distribution date, the
cumulative loss percentages on series 1997-1, 1998-1 and 1998-2
are 17.50%, 16.45% and 14.89%, respectively.


INSIGNIA SOLUTIONS: Pulls Plug on PwC's Retention as Accountants
----------------------------------------------------------------
On July 1, 2003, Insignia Solutions plc dismissed
PricewaterhouseCoopers LLP as its independent accountants. The
decision to change independent accountants was approved by the
Company's Audit Committee and Board of Directors.

The report of PricewaterhouseCoopers LLP on the financial
statements for the year ended December 31, 2002 contained an
explanatory paragraph expressing substantial doubt regarding the
Company's ability to continue as a going concern.

On July 7, 2003, the Company engaged Burr, Pilger & Mayer LLP to
serve as the new independent auditors for the fiscal year ended
December 31, 2003. The decision to engage Burr, Pilger & Mayer LLP
was recommended by the Company's Management and the Audit
Committee of the Board of Directors, and unanimously approved by
the Board of Directors.


INSITE SERVICES: All Proofs of Claim Due by August 11, 2003
-----------------------------------------------------------
By Order of the U.S. Bankruptcy Court for the Southern District of
New York, August 11, 2003, is the deadline for creditors of Insite
Services Corporation to file their Proofs of Claim against the
Debtor or be forever barred from asserting their claims.

To be deemed timely, all proofs of claim must be received by the
Clerk of the Bankruptcy Court before 5:00 p.m. (Eastern Time) on
August 11.

Parties need not file Proofs of Claim if they are on account of:

        1. Claims already properly filed with the Bankruptcy
           Court;

        2. Claims not listed as disputed, contingent or
           unliquidated in the Debtor's Schedules;

        3. Claims previously allowed by Order of the Court;

        4. Claims paid in full by the Debtor;

        5. Claims for which specific deadlines has previously been
           fixed by the Court; and

        6. Administrative Expense Claims.

Holders of Equity Interests in the Debtor need not file proofs of
interest with respect to the Ownership of the equity interest at
this time.

Insite Services Corporation filed for Chapter 11 protection on
June 1, 2001, (Bankr. S.D.N.Y. Case No. 01-42074). Schuyler G.
Carroll, Esq., Robert E. Grossman, Esq., and Jeffrey D. Vanacore,
Esq., at Arent Fox Kintner Plotkin & Kahn, PLLC represent the
Debtor in its restructuring efforts.


INT'L PAPER: Reports Weaker Second Quarter Financial Performance
----------------------------------------------------------------
International Paper (NYSE: IP) today reported second-quarter 2003
net earnings of $88 million, compared with net earnings of $215
million in the second quarter of 2002 and net earnings of $44
million in the first quarter of 2003. Amounts in all periods
include the effects of special items.

Before special items, earnings for the second quarter of 2003 were
$89 million, compared with $169 million in the 2002 second quarter
and $68 million in the first quarter of 2003.

In addition to the special items outlined below, second-quarter
2003 earnings benefited from a $9 million reduction in the
provision for income taxes due to a reduction in the projected
2003 full year effective tax rate before special items from 31 to
28 percent. The full year effective tax rate projection is lower
due to a higher proportion of taxable income in lower tax rate
jurisdictions.

Net sales for the second quarter totaled $6.2 billion, compared
with $6.3 billion in the second quarter of 2002 and $6.1 billion
in the first quarter of 2003.

"Externally, we are disappointed by business conditions, but we
are pleased with what we've accomplished through our internal
focus. We improved our earnings since the first quarter in a
lackluster economy through our strong manufacturing operations,
better product mix and administrative cost control measures," said
John Dillon, International Paper chairman and chief executive
officer. "Energy and weather-related wood costs remained high,
volumes were slightly lower than the first quarter and prices
declined in uncoated paper, linerboard and boxes. We continue to
overcome these external pressures to improve our profitability
through manufacturing excellence, creating customer value, and
streamlining our cost structure."

                      Effects of Special Items

Special items in the second quarter included charges of $81
million before taxes ($50 million after taxes), consisting of $43
million for facility shut-down costs, and $38 million for
severance costs associated with organizational restructuring
programs, early debt extinguishment costs, and legal reserves.
Special items also included a $10 million pre-tax adjustment ($6
million after taxes) for previous divestitures and a $9 million
pre-tax reserve reversal ($5 million after taxes and minority
interest). In addition, a $50 million tax provision reduction was
recorded in the quarter reflecting settlements of prior period tax
issues. The net after-tax effect of these special items is $0.00
per share.

Special items in the second quarter of 2002 consisted of a pre-tax
charge of $79 million ($50 million after taxes) for facility
closures, administrative realignment and related severance costs,
and a net $28 million gain before taxes and minority interest ($96
million after taxes and minority interest) related to sales and
expenses of businesses held for sale.

Special items in the first quarter of 2003 included a net charge
of $23 million before taxes and minority interest ($14 million
after taxes and minority interest or $0.03 per share) for certain
costs related to the shutdown of the Natchez, Miss., dissolving
pulp mill, and other charges for organizational realignments and
related severance. Also in the quarter, the company adopted
Statement of Financial Accounting Standards (SFAS) No. 143,
"Accounting for Asset Retirement Obligations", resulting in a $10
million after-tax charge for the cumulative effect of a change in
accounting.

Commenting on the third-quarter outlook, Dillon said, "We
anticipate a very tough external environment. We expect flat
demand, but raw material and energy costs should improve versus
the second quarter. Internally, operating performance will
continue to improve, and we will maintain our intense customer
focus."

                    Segment Information

While operating profits of $448 million for the second quarter of
2003 were above first quarter totals of $410 million, operating
profits were down compared with the second quarter of 2002 amid
higher energy and fiber costs.

Second-quarter 2003 segment operating profits and business trends
compared with the first quarter were as follows:

Second-quarter operating profits for Printing Papers were $143
million compared with first-quarter operating profits of $122
million as intensive cost reduction efforts offset weaker volumes
and flat pricing across most grades.

Industrial and Consumer Packaging operating profits were $121
million in the second quarter, up from $89 million in the first
quarter as price declines in linerboard and boxes were offset by
cost reduction efforts as well as by somewhat better price
realization and volume in bleached board and higher containerboard
and box volumes.

The company's distribution business, xpedx, reported operating
profits of $22 million for the second quarter compared with
operating profits in the first quarter of $15 million. The
increase was largely due to operational cost improvements.

Second-quarter Forest Products operating profits of $143 million
were down from $161 million in the first quarter. The effect of
higher lumber and plywood volumes did not offset the impact of
weather-related lower harvest volumes in the South and adverse
Canadian foreign exchange rates that impacted earnings from
Weldwood.

Operating profits at Carter Holt Harvey, International Paper's
50.5 percent owned subsidiary in New Zealand, were $9 million in
the second quarter, compared with $16 million in the first
quarter, reflecting the impact of a labor strike at its Kinleith
mill.

International Paper -- http://www.internationalpaper.com-- is the
world's largest paper and forest products company. Businesses
include paper, packaging, and forest products. As one of the
largest private forest landowners in the world, the company
manages its forests under the principles of the Sustainable
Forestry Initiative(R) (SFI(R)) program, a system that ensures the
continual planting, growing and harvesting of trees while
protecting wildlife, plants, soil, air and water quality.
Headquartered in the United States, International Paper has
operations in over 40 countries and sells its products in more
than 120 nations.

As previously reported, Standard & Poor's Ratings Services
assigned its 'BB+' preferred stock ratings to International Paper
Co.'s $6 billion mixed shelf registration.


ISTAR FINANCIAL: Second Quarter 2003 Results Show Strong Growth
---------------------------------------------------------------
iStar Financial Inc. (NYSE: SFI) reported that adjusted earnings
for the quarter ended June 30, 2003 were $0.80 per diluted common
share, up from $0.65 per diluted common share for the quarter
ended June 30, 2002. Adjusted earnings allocable to common
shareholders for second quarter 2003 were $81.8 million on a
diluted basis, compared to $59.8 million for second quarter 2002.
Adjusted earnings represents net income to common shareholders,
computed in accordance with GAAP, before depreciation,
amortization, gain (loss) from discontinued operations,
extraordinary items and cumulative effect of change in accounting
principle.

Net income allocable to common shareholders for the second quarter
was $60.0 million, or $0.59 per diluted common share, compared
with $33.3 million, or $0.36 per diluted common share, in the
second quarter of 2002. Second quarter 2002 net income includes a
$12.2 million ($0.13 per diluted common share) charge relating to
early extinguishment of debt and a $6.1 million ($0.07 per diluted
common share) non-cash charge related to performance-based vesting
of restricted shares granted under the Company's long-term
incentive plan.

In the second quarter of 2003, iStar Financial achieved a return
on average book assets of 6.1% and a return on average common book
equity of 18.7%, while leverage increased to 1.8x book equity. Net
investment income for the quarter ended June 30, 2003 increased to
a record $86.9 million, up 41.1% from $61.6 million for the second
quarter of 2002. Excluding a $12.2 million charge relating to
early extinguishment of debt for second quarter 2002, net
investment income increased 17.8%. Net investment income
represents interest income, operating lease revenue and equity in
earnings from joint ventures and unconsolidated subsidiaries, less
interest expense and operating costs for corporate tenant lease
assets, in each case as computed in accordance with GAAP.

iStar Financial announced that during the second quarter, it
closed 13 new financing commitments for a total of $486.9 million,
of which $463.0 million was funded during the quarter. In
addition, the Company funded $13.9 million under seven pre-
existing commitments and received $329.3 million in principal
repayments. The Company's recent transactions continue to reflect
its core business strategy of originating structured financing
transactions for leading corporations and private owners of high-
quality commercial real estate assets across the United States.

Jay Sugarman, iStar Financial's chairman and chief executive
officer, stated, "This quarter iStar Financial continued to
deliver unique, value-added financing for its high-end real estate
customers. Our reputation for being a reliable source of capital
and dealing fairly with our customers is becoming widely
recognized in the market. We have now completed $4.2 billion of
financing transactions with repeat customers, which represents
over 50% of our financing volume since our business began in
1993."

Mr. Sugarman continued, "We are experiencing some interesting
market dynamics. The weak economic environment, combined with the
lowest interest rates the U.S. has seen in half a century, present
several opportunities and challenges as we look forward. In this
environment, we are seeing more financing opportunities from new
and existing customers, which enable us to build upon our
franchise and market-leading reputation. However, real estate
owners are seeking ways to refinance their assets with cheaper
debt, resulting in increased repayment activity. Similarly, while
net interest margins remain strong, ultra-low interest rates
generally offset the benefits of increased investment volume."

                       Transaction Volume

In the second quarter of 2003, iStar Financial generated $486.9
million in new financing commitments in 13 separate transactions.
The Company also funded an additional $13.9 million under seven
pre-existing financing commitments and received $329.3 million in
loan repayments. Of the Company's second quarter financing
commitments, 86.3% represented first mortgage and first mortgage
participation transactions, of which 57.0% were wholly-owned first
mortgages.

During the quarter, the weighted average first dollar and last
dollar loan-to-value ratio on new loan commitments was 27.9% and
69.1%, respectively. This ratio represents the average beginning
and ending points for the Company's lending exposure in the
aggregate capitalization of the underlying properties or companies
it finances.

Mr. Sugarman commented, "This quarter we continued to build
diversity and safety in our asset base with 13 separate investment
transactions, of which 58% were from repeat customers and the
majority of which were first mortgages. Our investment pipeline
remains strong, and we are beginning to evaluate interesting
opportunities in our corporate and junior lending product lines as
we reach the bottom of this real estate cycle."

Mr. Sugarman continued, "Given the strength of our core business,
we have chosen at the present time not to pursue any of the new
business initiatives that we have been exploring since the
beginning of the year."

                       Capital Markets

In May 2003, iStar Financial completed a private offering of
asset-backed bonds under the Company's proprietary match funding
program, iStar Asset Receivables. The STARs Series 2003-1 offered
bonds consist of 11 classes of investment-grade securities. The
Company received approximately $646 million of gross proceeds from
the offering. The STARs Series 2003-1 bonds create match funded
term financing for approximately $739 million of iStar Financial's
structured finance and corporate tenant lease assets. The weighted
average interest rate on the offered bonds, expressed on an all-
floating rate basis, is approximately LIBOR + 47 basis points. The
Company used the net proceeds from the offering to repay
outstanding borrowings under its credit facilities. At June 30,
2003, the Company had $1.1 billion outstanding under its five
primary credit facilities, which total $2.7 billion in committed
capacity.

In July 2003, iStar Financial completed an underwritten public
offering of 5,600,000 shares of its 7-7/8% Series E Cumulative
Redeemable Preferred Stock, having a liquidation preference of
$25.00 per share. The Series E Preferred Stock was issued in
exchange for 2,800,000 shares of iStar Financial's 9.50% Series A
Cumulative Redeemable Preferred Stock, having a liquidation
preference of $50.00 per share. The Company did not receive any
cash proceeds from the offering.

Catherine D. Rice, iStar Financial's chief financial officer,
stated, "Our financing activities over the last several months
demonstrate our continued success in accessing the capital markets
and reducing the Company's overall cost of capital. Our STARs
investors once again acknowledged the high quality of our
collateral and the value of iStar Financial's sponsorship in our
successful third issuance under the STARs program. In addition,
our recently completed exchange of $140 million of Series E
preferred stock for Series A preferred stock will result in over
$2.2 million of annual preferred dividend savings for the
Company."

Ms. Rice continued, "As we've stated in the past, our primary goal
for reducing our overall debt costs and increasing financial
flexibility is to achieve investment grade ratings from Moody's
and S&P. We have scheduled annual update meetings with each of the
rating agencies for this fall, and we believe our track record
presents a compelling case for an upgrade."

During May 2003, SOFI-IV SMT Holdings, a private investment fund
and the Company's then-largest shareholder, distributed
approximately 15.9 million of the 20.1 million iStar Financial
common shares held by SOFI-IV to the limited and general partners
of the fund. Some of the partners then sold 6.9 million of the
shares distributed to them in an underwritten public offering.
After the offering, SOFI-IV holds 4.2 million shares of iStar
Financial common stock, representing less than 5% of iStar
Financial's common stock on both a diluted and outstanding basis.

Ms. Rice commented, "Since October 2001, we have created over 50
million shares of demand for SOFI-IV and its affiliates, and the
recent distribution should eliminate any perceived "overhang" that
remained on our stock. Going forward, we expect that common stock
issuances will be focused on raising primary equity for the
Company as we continue to grow our asset and capital base."

Consistent with the Securities and Exchange Commission's
Regulation FD and the newly adopted Regulation G, iStar Financial
comments on earnings expectations within the context of its
regular earnings press releases. For fiscal year 2003, the Company
currently expects adjusted earnings per diluted common share of
$3.20-$3.25. iStar Financial also expects adjusted earnings per
diluted common share for the third quarter of $0.81-$0.82. iStar
Financial expects GAAP earnings per diluted common share of $2.34-
$2.44 for 2003. The Company also expects GAAP earnings per diluted
common share for the third quarter of $0.62-$0.64. The 2003
earnings guidance assumes net asset growth of $800 million to $1
billion, consistent with prior expectations. The $800 million to
$1 billion figures assume approximately $1.8 billion of gross
originations and approximately $900 million of loan repayments.

Ms. Rice commented, "Because interest rates have reached historic
lows, we expect loan repayments to increase in the latter half of
this year; however, this increased repayment activity should be
offset by investments in our pipeline. Our earnings guidance also
reflects the impact that extraordinarily low interest rates have
on our net income. With LIBOR near 1.10%, our match funded
investments deliver lower absolute earnings. In addition, the
increase in our stock price is expected to result in an additional
$0.03-$0.05 per share of dilution from in-the-money stock-based
compensation, stock options and warrants for the remainder of
2003. As a result, we have slightly reduced our earnings growth
guidance for 2003."

As of June 30, 2003, the Company's loan portfolio consisted of 60%
floating rate and 40% fixed rate loans. Approximately 60% of the
Company's floating rate loans have LIBOR floors with a weighted
average LIBOR floor of 2.29%. The weighted average GAAP LIBOR
margin, inclusive of LIBOR floors, was 5.36%. The weighted average
GAAP yield of the Company's fixed rate loans was 11.81%.

                         Risk Management

At June 30, 2003, first mortgages, participations in first
mortgages, corporate tenant leases and corporate financing
transactions collectively comprised 90.0% of the Company's asset
base. The weighted average first and last dollar loan-to-value
ratio for all structured finance assets (senior and junior loans)
was 28.0% and 68.7%, respectively. As of June 30, 2003 the
weighted average debt service coverage for all structured finance
assets, based on either actual cash flow or trailing 12- month
cash flow through March 31, 2003, was 2.2x.

At quarter end, the Company's corporate tenant lease assets were
94.9% leased with a weighted average remaining lease term of 9.2
years. Corporate tenant lease expirations for the remainder of
2003 represent 1.8% of annualized total revenue for second quarter
2003. At quarter end, 87.0% of the Company's corporate lease
customers were public companies (or subsidiaries of public
companies).

The Company establishes loss reserves based on a quarterly bottom-
up review of each of its assets, as well as using top-down
guidance from industry-wide loss data and market trends. On a
quarterly basis, the Company conducts a comprehensive credit
review, resulting in an individual risk rating assigned to each
asset. Attendance at the quarterly review sessions is mandatory
for each of the Company's professional employees. These quarterly
meetings are designed to enable management to evaluate and
proactively manage asset-specific credit issues and identify
credit trends on a portfolio-wide basis as an "early warning"
system.

The Company assigns two separate quarterly risk ratings to its
structured finance assets using a "one" to "five" scale. The
Company assigns a rating representing the Company's evaluation of
the risk of principal loss, and a rating representing performance
compared to original underwriting. Corporate tenant lease risk
ratings reflect our assessment of the quality and longevity of the
cash flow yield from the asset. Assets with risk ratings of "four"
and "five" indicate management time and attention is required, and
a "five" rating denotes a potential problem asset. In addition to
the ratings system, the Company maintains a "watch list" of assets
that require highly proactive asset management.

Based upon the Company's second quarter 2003 review, the weighted
average risk ratings of the Company's structured finance assets
was 2.52 for risk of principal loss, compared to last quarter's
rating of 2.54, and 3.00 for performance compared to original
underwriting, compared to last quarter's rating of 2.95. The
weighted average risk rating for corporate tenant lease assets was
2.79 at the end of the second quarter, an increase from the prior
quarter's rating of 2.76.

For the second quarter, the Company added two loans and one
corporate tenant lease asset to its credit watch list. The Company
now has seven loans and three corporate tenant lease assets on the
list, with a combined book value of $188.5 million as of June 30,
2003, up from $115.2 million at March 31, 2003. The Company is
currently comfortable that it has adequate collateral to support
the book value for each of the watch list assets.

At quarter end, accumulated loan loss reserves and other asset-
specific credit protection represented an aggregate of
approximately 5.86% of the gross book value of the Company's
loans. In addition, cash deposits, letters of credit, allowances
for doubtful accounts and accumulated depreciation relating to
corporate tenant lease assets represented 9.84% of the gross book
value of the Company's corporate tenant lease assets at quarter
end. At June 30, 2003, the Company added two assets and removed
two assets from non-accrual status. The Company now has three
assets on non-accrual status with an aggregate gross book value of
$24.2 million, or 0.4% of the gross book value of the Company's
investments. Each of the Company's three non-accrual assets
continues to pay as agreed.

Timothy J. O'Connor, iStar Financial's chief operating officer,
stated, "Our overall asset quality remains strong despite the
continued weak economic and commercial real estate environment.
While we have experienced a slight decline in the overall
performance rating of our collateral, the better-than- average
rating for risk of principal loss shows the stability of our
portion in our borrowers' capital structures. Our risk management
team continues to proactively identify and address potential asset
issues and will continue to protect our capital by working with
borrowers when necessary."

                       Other Developments

On July 1, 2003, iStar Financial declared a regular quarterly cash
dividend of $0.6625 per common share for the quarter ended
June 30, 2003.

iStar Financial is the leading publicly traded finance company
focused on the commercial real estate industry. The Company
provides custom-tailored financing to high-end private and
corporate owners of real estate nationwide, including senior and
junior mortgage debt, senior, mezzanine and subordinated corporate
capital, and corporate net lease financing. The Company, which is
taxed as a real estate investment trust, seeks to deliver a strong
dividend and superior risk-adjusted returns on equity to
shareholders by providing innovative and value-added financing
solutions to its customers.

As previously reported, Fitch Ratings assigned a 'BB' rating to
iStar Financial Inc.'s 7-7/8% series E cumulative redeemable
preferred stock. The securities rank pari passu with iStar's
existing series A, B, C and D cumulative redeemable preferred
stock. iStar's senior unsecured debt rating and Rating Outlook is
'BBB-' and Stable, respectively.


I-STAT CORP: June 30 Balance Sheet Insolvency Widens to $33 Mil.
----------------------------------------------------------------
i-STAT Corporation (Nasdaq: STAT), a leading manufacturer of
point-of-care diagnostic systems for blood analysis, announced its
consolidated financial results for the second quarter and first
half of 2003.

                    Second Quarter Results

For the three months ended June 30, 2003, i-STAT's consolidated
net revenues were approximately $17.1 million, up 15.6% from $14.8
million for the quarter ended June 30, 2002. Gross margin on total
net revenues for the second quarter of 2003 was approximately $3.7
million, up 44.4% from $2.6 million in the second quarter of 2002.
The net loss for the second quarter of 2003 was approximately $1.6
million, an improvement of 55.6% from a net loss of $3.6 million
for the second quarter of 2002. The net loss to common
stockholders for the quarter was approximately $2.4 million, after
Preferred Stock dividends of approximately $0.7 million and
accretion of Preferred Stock of approximately $0.1 million. In the
quarter ended June 30, 2002, the Company recorded a net loss to
common stockholders of $4.0 million after Preferred Stock
dividends of approximately $0.3 million and accretion of Preferred
Stock of approximately $0.1 million.

"We are pleased with our results for the quarter and the half,
reflecting increased revenues, improved margins and very strong
capital management," said William P. Moffitt, i-STAT president and
chief executive officer. "Our most intent focus, however, is on
the completion of our efforts to put in place the operational
infrastructure needed to support our transition to direct product
distribution in 2004. These efforts are progressing well and we
believe will contribute to improved financial performance next
year."

Approximately 3.4 million cartridges were sold in the second
quarters of both 2003 and 2002. Worldwide average revenue per
cartridge recorded by the Company for the quarter ending June 30,
2003 was $3.48, up from $3.30 for the second quarter of 2002,
primarily as a result of exchange rate changes that favorably
impacted international sales. Average end-user cartridge pricing
in the US for the second quarter of 2003 was $4.35 as compared to
$4.34 in the second quarter of 2002, and for international sales,
$5.01 in 2003 versus $4.14 in 2002, reflecting the weaker US
dollar in 2003.

Analyzer sales for the second quarter of 2003 totaled 1,395 units,
up 64.9% from the 846 units shipped in the second quarter of 2002.
Analyzer sales were favorably impacted by shipment of
approximately 400 analyzers to China for use in special
respiratory care units set up to fight the epidemic of severe
acute respiratory syndrome (SARS). The Company expects analyzer
sales to stabilize at 800-1,000 units per quarter.

Other income for the quarter ending June 30, 2003 included
approximately $1.4 million in currency exchange gains related to
short-term, intercompany debt owed by the Company's Canadian
manufacturing subsidiary.

As of June 30, 2003, i-STAT had approximately $29.2 million in
cash, cash equivalents and total marketable securities, an
increase of $2.1 million over the balance on December 31, 2002.
During the first half of 2003, the Company recorded net cash
provided by operating activities of $3.2 million, $2.0 million of
which can be attributed to a marketing support payment received
from the Company's Japanese marketing partner, FUSO
Pharmaceuticals, Ltd.

At June 30, 2003, I-STAT's balance sheet shows a total
shareholders' equity deficit of about $33 million.

                       First Half Results

For the six months ended June 30, 2003, i-STAT's consolidated net
revenues were approximately $32.5 million, of which approximately
$22.9 million were generated from cartridge sales. For the six
months ended June 30, 2002, the Company's consolidated net
revenues were $29.2 million, of which $20.6 million were from
cartridge sales.

Gross margin for the first half of 2003 was approximately $7.6
million, up 80.2% from $4.2 million for the first half of 2002.
The increases in gross margin in the second quarter and first half
of 2003 over the same periods in 2002 were primarily the result of
reduced costs related to cartridge production, improved pricing
realized from the decline in value of the US dollar and reductions
in analyzer costs.

Net loss for the first half of 2003 improved to approximately $2.2
million from $7.3 million in the first half of 2002. The net loss
to common stockholders for the first half of 2003 was
approximately $3.5 million or $0.18 per share, a reduction of
$0.24 per share from the net loss to common stockholders of $8.4
million or $0.42 per share reported in the first half of 2002.

In the six months ended June 30, 2003, approximately 6.8 million
cartridges were sold, an increase of 11.9% from the approximately
6.1 million cartridges shipped in the first half of 2002.
Worldwide average revenue per cartridge recorded by the Company
for the first half of 2003 was $3.36, virtually unchanged from
$3.37 for the first half of 2002. Average end-user cartridge
pricing for the first half of 2003 was $4.37 in the US and $4.63
for international sales, reflecting the increased impact of the
weaker US dollar, compared with average end-user prices of $4.33
in the US and $3.97 for international sales for the same period of
2002. As a result of the expiration of the Abbott Distribution
Agreement, effective December 31, 2003, the Company expects a
material increase in net revenues resulting from the increase in
the average sales price it will recognize as a result of selling
the Company's products directly to end-user customers and
distributors.

Analyzer sales for the six months ended June 30, 2003, were 2,331
units, an increase of 15.3% from the 2,021 analyzers shipped in
the first half of 2002.

                      Corporate Update

Actions to build the Company's sales and marketing infrastructure
to support independent distribution commencing in January 2004
continued during the second quarter of 2003 with the addition of
13 sales and sales management personnel, bringing the total direct
field sales force to 24, with a target of 38 persons trained and
in their territories by year-end.

"We see continuing progress on installing the infrastructure
needed to support our independent product distribution in 2004,"
said Bruce F. Basarab, executive vice president of commercial
operations. Some of these projects include a customer call center;
internet ordering and order tracking capability; new billing, VAT,
customs and tax modules for our enterprise resource planning
system; outsourced logistics to support direct sales in Europe;
and establishment of a European technical services center. "We are
investing now to position i-STAT to succeed in 2004," he
concluded.

During the second quarter of 2003 important presentations were
made at cardiology and pediatric care conferences by leading
investigators supporting additional applications for two of the
Company's tests. The clinical benefit of the sensitivity available
from i-STAT's Troponin I cardiac marker test, now being reviewed
by the FDA, was described by Fred S. Apple, Ph.D., DABCC
(Professor - University of Minnesota, Laboratory Medicine and
Pathology; Director - Clinical Laboratories at Hennepin County
Medical Center) at the Sixth National Congress of Chest Pain
Centers. Meanwhile, significant reductions in mortality among
pediatric cardiovascular surgery patients were reported at the 4th
World Congress on Pediatric Intensive Care by Dr. Anthony Rossi,
Director of Pediatric Intensive Care at Miami Children's Hospital
in Miami, FL. Dr. Rossi has attributed these outcomes to the i-
STATr System's ability to provide rapid lactate results at the
patient's bedside. The Company is aware that pediatric
intensivists at other hospitals have begun to adapt their use of
the i-STAT System to more intensely utilize the lactate test on
the strength of Dr. Rossi's data. The Company presently supports
six independent studies aimed at documenting the impact upon
patient outcomes through the use of rapid testing at the patient's
bedside.

                      New Product Programs

Prothrombin Time -- In March of this year, i-STAT began commercial
distribution of a "finger stick" version of this product offering
ease-of-use superior to current, competitive point-of-care
products. Both production rate and number of hospital evaluations
continue to increase as early orders are received from customers
displacing competitive systems.

Troponin I -- A 510(k) Notification with the FDA for this cardiac
marker, the Company's first immunoassay test, was filed in early
June. Trials of this test have demonstrated sensitivity equivalent
to that available from central laboratory testing systems while
providing the clinician with a reading of the patient's Troponin I
level in approximately 10 minutes, compared to the 30-60 minute
answers provided by the best central labs.

Kaolin Activated Clotting Time -- In the fall of 2002, the Company
filed a 510(k) Notification with the FDA seeking permission to
market its kaolin ACT coagulation test. Following a formal
notification of deficiencies in the submission, the Company has
responded addressing the issues raised by the FDA and in
particular addressing the comparability of results between i-
STAT's test and that of the predicate device. While the Company
believes that submission of its response and a conclusion of the
FDA review will result in clearance to market its kaolin ACT test,
there can be no assurance that such clearance will occur. The
Company believes that the ability to market its cleared Celite(R)
ACT test along with the kaolin ACT test will increase the utility
of the i-STAT System in cardiovascular operating rooms.

i-STAT Corporation develops, manufactures and markets diagnostic
products for blood analysis that provide health care professionals
critical diagnostic information accurately and immediately at the
point of patient care. Through the use of advanced semiconductor
manufacturing technology, established principles of
electrochemistry and state-of-the-art computer electronics, i-STAT
developed the world's first hand-held automated blood analyzer
capable of performing a panel of commonly ordered blood tests on
two or three drops of blood in just two minutes at the patient's
side.


IT GROUP: Wants Plan Filing Exclusivity Stretched to October 10
---------------------------------------------------------------
At present, the IT Group Debtors, the Committee and the
Prepetition Lenders are in the process of negotiating a term sheet
to settle outstanding issues between them including a consensual
Chapter 11 plan for the Debtors.  However, the discussions
continue to be stalled, partly by the 7,000 proofs of claim filed
in the Debtors' bankruptcy cases asserting a total of
$16,000,000,000. The Debtors and the Committee need more time to
review and analyze the filed claims, which include substantial
duplicate claims.

Accordingly, the Debtors ask the Court to further extend its Plan
Proposal Period to October 10, 2003 and its Plan Solicitation
Period to November 7, 2003.

Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in Wilmington, Delaware, asserts that the extension will
afford the Debtors an opportunity to continue working with
creditor constituencies toward the common goal of a consensual
plan or plan of reorganization.  Without the extension, Mr.
Galardi believes that a protracted and contentious plan
solicitation and confirmation process might evolve which would
only serve to increase administrative expenses and decrease
recoveries to the Debtors' creditors.  This would also delay, if
not undermine, the Debtors' reorganization efforts.

Hence, the Debtors should be given additional time to negotiate
the final terms of their Chapter 11 Plan.

The Debtors further ask Judge Walrath to prohibit any other
party, other than the Committee, from filing a competing plan
during the extended Exclusive Periods.

Judge Walrath will consider the Debtors' request during the
hearing on August 4, 2003 at 2:00 p.m.  By application of Delaware
Local Rule 9006-2, the Debtors' Exclusive Filing Period is
automatically extended until the conclusion of that hearing. (IT
Group Bankruptcy News, Issue No. 31; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


K2 DIGITAL: Convening a Shareholders' Meeting to Vote on Merger
---------------------------------------------------------------
Gary W. Brown, President of K2 Digital, Inc. has written a letter
to shareholders about K2 Digital, Inc.'s proposed Merger with
FutureXmedia, Inc., f/k/a First Step Distribution Network Inc.

In connection with the merger, K2 will issue to FX an aggregate of
8,760,000 shares of common stock of K2. Upon completion of the
merger, K2 expects that the shareholders of FX will own
approximately 90% of the outstanding common stock of K2. K2's
common stock is traded on the NASDAQ Bulletin Board under the
trading symbol "KTWO.OB" and closed at a price of $0.035 per share
on July 15, 2003. The proposed reverse stock split and merger will
have a dilutive effect upon the shareholders of K-2. Each current
shareholder of K2 will own approximately .20 shares of K2 after
the merger for each one share currently owned.

K2 cannot complete the merger unless the shareholders of K2
approve the 1-for-5.1 reverse split of shares, the merger and the
issuance of K2 common stock to FX in connection with the merger.
Shareholders owning 50.6% of the issued and outstanding shares of
K-2's common stock have indicated that they will vote in favor of
these three items. These votes will be sufficient to approve the
items and management is therefore not requesting or soliciting
shareholder vote. Approval of these matters is not assumed until
the vote has been registered. If the matters are not approved, the
Company will assess other options which may include a liquidation.

All the Officers and Directors have indicated that they will vote
their K2 shares in favor of the merger, and when coupled with
other shareholders who have approved the merger, such shares
constitute 50.6% of the shares issued and outstanding.

The Company intends to conduct a meeting to approve these matters.
While shareholders are invited to the meeting, their presence is
not required. K2 is not asking for a proxy and requests
shareholders not send in a proxy.  At the meeting it is expected
that those shareholders who have indicated to management that they
will vote in favor of the merger will be asked to sign a written
consent. Under the Delaware General Corporation Law, the execution
of the consent by more than 50% of the issued and outstanding
shares of the Company is sufficient to approve all three agenda
items.

At June 30, 2002, the Company's total shareholders' equity deficit
is reported at about CDN$200,967.


KISTLER AEROSPACE: Files for Chapter 11 Protection in Washington
----------------------------------------------------------------
Faced with over $600 million in debt liabilities and a bleak
market outlook for its still-unfinished reusable rocket, Kistler
Aerospace Corp. filed to reorganize July 15 under chapter 11 of
the U.S. Bankruptcy Code, according to Space.com. The Kirkland,
Washington-based company is developing the K-1 reusable launch
vehicle with intentions to launch commercial and government
payloads into low Earth orbit, initially from the Woomera
Spaceport in Australia, and later the Nevada Test Site, the online
news portal reported.

Papers were filed in the U.S. Bankruptcy Court for the Western
District of Washington in Seattle, a move that will "facilitate
Kistler's restructuring, which is designed to restore the company
to long-term financial health while operating in the normal course
of business," the company said in a statement. "During the
restructuring period, Kistler will focus on preparing the K-1
contractor team and hardware for re-start, and will work with NASA
to prepare for demonstrating the ability of the K-1 vehicle to
deliver and recover cargo from the international space station,"
the statement said. (ABI World, July 24, 2003)


KISTLER AEROSPACE: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Kistler Aerospace Corporation
        Corporate Offices
        3760 Carillon Point
        Kirkland, Washington 98033-0000

Bankruptcy Case No.: 03-19155

Type of Business: The Debtor is developing a fleet of fully
                  reusable launch vehicles to provide lower cost
                  access to space for Earth orbiting satellites.

Chapter 11 Petition Date: July 15, 2003

Court: Western District of Washington (Seattle)

Judge: Samuel J. Steiner

Debtor's Counsel: Jennifer L. Dumas, Esq.
                  Youssef Sneifer, Esq.
                  Davis Wright Tremaine LLP
                  1501 4th Ave #2600
                  Seattle, WA 98101-1688
                  Tel: 206-622-3150
                  Fax: 206-628 7699

Total Assets: $6,256,344

Total Debts: $587,929,132

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Aerojet Propulsion Div.     Trade debt             $99,993,874
Attn: Michael F. Martin
PO Box 13222
Sacramento, CA 95813
Tel: 916-351-8555

Zico Limited                Notes                  $53,213,681
Attn: Jean-Marc Jorand
c/o GSF
Route des Acacias 48
1211 Geneva 24
Switzerland
Tel: 41-22-819-0777

Derencorp Ventures          Promissory note        $48,540,436
Mohammed Al Zubai
PO Box 2700
Riyadh 11461
Saudi Arabia
Tel: 617-573-5856

Emarview Impex Limited      Promissory note        $48,540,436
James Pollock
Emarview Impex Limited
Attn: Mohammed Al Zubair
PO Box 2700
Riyadh 11461
Saudi Arabia
Tel: 617-573-5856

Northrop Grumman Corp.      Trade debt             $46,815,972
Attn: Al Myers
1840 Century Park East
Los Angeles, CA 90067
Tel: 310-201-3219

Mellitus                    Note                   $24,461,896
Andreas von Albertini
Englischviertelstrasse 7
CH 8032 Zurich
Switzerland
Tel: 411-252-6342

Orca Bay Capital Corp       Notes and fees         $21,268,406
Attn: Stanley McCammon
999 3rd Avenue
Suite 4600
Seattle, WA 98104
Tel: 206-689-2402

High Mark Limited           Promissory notes Fees  $11,764,808
PO Box 2700
Riyadh 11461
Saudi Arabia
Tel: 966-1-464-8534

Bay Harbour Mgt. L.C.       Loans                  $10,051,683
Attn: Doug Teitelbaum
885 Third Avenue
34th Floor
New York, NY 10022
Tel: 212-371-2211

National Commercial Bank    L.C. Fees              $10,051,486
Samir El-Tanamly
PO Box 3555
Jeddah 21481
Saudi Arabia
Samir El-Tanamly
Tel: 966-5-537-9737

Honeywell                   Trade debt              $7,244,175
Attn: Dean M. Flatt
PO Box 2111
Phoenix, AZ 85086
Tel: 602-436-6555

C.S. Draper Laboratory      Trade debt              $2,600,690
Attn: Vincent Vitto
555 Technology Square
Cambridge, MA 02139
Tel: 617-258-2868

Irvin Aerospace             Trade debt              $1,162,026
Attn: Phillip Delurgio
3701 W Warner Ave
Santa Ana, CA 92704
Tel: 714-662-1400

Kistler, Walter             Loan                    $1,410,302
123 105th Avenue SE
Bellevue, WA 98004
Tel: 425-885-0647

Lee, Chih Lin               Alleged commissions/    $4,316,000
c/o Haig Kalbain Esq.       bonuses per 11/20/98
2001 L Street NW            Consulting Agreement
Suite 600
Washington, DC 20036-4967
Tel: 202-223-5600

Lockheed Martin Corp        Trade debt              $6,418,631
Attn: Dennis Deel
PO Box 29304 Dept 3000
New Orleans, LA 70189
Tel: 504-257-3700

Oceaneering                 Trade debt              $5,711,231
Attn: John R. Huff
16665 Space Center Blvd
Houston, TX 77058
Tel: 713-329-4500

Saudi Systems Corp          Notes                   $5,117,963
PO 22232
Riyadh, Saudia Arabia 11495
Tel: 966-1-488-0646

Al-Turki, Ameen             Loan                    $1,569,036
c/o Nat'l Commercial Bank
PO Box 61866
Riyadh 11575
Saudi Arabia
Tel: 966-1-450-1177

Alliance Yield Ltd.         Loan                    $1,836,703
Attn: Francis Chen
13 F No. 167, Sec 5
Min Sheng E. Road, Taipai
Taiwan ROC
Tel: 886-2-2767-0116


LAND O'LAKES: Flat Financial Results in Second Quarter 2003
-----------------------------------------------------------
Land O'Lakes, Inc., reported its second quarter and year-to-date
financial results, while also commenting on individual business
unit performance and progress against key strategic initiatives.

For the quarter, the company reported $1.40 billion in sales and
$44.7 million in net earnings, as compared to $1.42 billion and
$48.3 million, respectively, in the second quarter of 2002. Year-
to-date, sales are $2.85 billion and net earnings are $44.3
million, versus $2.95 billion and $47.3 million for the same
period one year ago. EBITDA (Earnings Before Interest, Taxes,
Depreciation, Amortization and other items, as defined in the
company's bond indenture) are at $85.5 million through June 30, as
compared to $100.8 million one year ago. Company officials
indicated that, when litigation settlement proceeds are excluded,
2003 first half EBITDA is $66.3 million, versus $68.1 million for
the first half of 2002. Due to the challenging operating
environment, Land O'Lakes revised its full-year EBITDA forecast
from $255 million to $230 million.

Land O'Lakes also reported progress against three key strategic
initiatives, as well as positive performance in its branded,
value-added and proprietary businesses and product lines.

                    Strategic Initiatives

Officials of the national dairy and agricultural cooperative
reported progress in paying down debt, portfolio management and
the building of its branded businesses.

Paying down debt. Land O'Lakes paid down term debt by
approximately $12 million during the second quarter and made an
additional $14 million payment earlier this month, bringing term-
debt reduction since the start of the year to $88 million. The
company closed the quarter with a long-term debt to capital ratio
of 49.5 percent, as compared to 52.4 percent one year ago.

The company retained strong liquidity, ending the quarter with
cash-on-hand of $105 million and unused borrowing authority of
approximately $240 million. The company remained in compliance
with all its financing covenants.

Portfolio Management. Land O'Lakes reported continued progress in
reducing capital expenditures and exposure to market risk in
Swine, significantly reducing the size of its Cost Plus (contract)
program. The company also reported progress in "right-sizing" its
dairy foods manufacturing business.

Building Branded Businesses. The company reported the successful
launch of two new branded dairy products (LAND O LAKES Spreadable
Butter with Canola Oil and LAND O LAKES Soft Baking Butter with
Canola Oil); noted continued positive momentum in CROPLAN
GENETICS-branded seed and AgriSolutions crop protection products;
and indicated the strength of the LAND O LAKES Feed and Purina
brands remains the foundation for its Feed business.

                          Dairy Foods

Land O'Lakes reported a $500,000 second quarter pretax loss, as
compared to a loss of $5.4 million for the second quarter of 2002.
The 2003 second quarter results included $13.1 million in positive
pretax earnings in its Value Added Dairy Foods operations, and a
pretax loss of $13.6 million in its Dairy Foods Industrial
(manufacturing) operations. Year-to-date, Dairy Foods is reporting
a pretax loss of $20.1 million, as compared to a pretax loss of
$9.3 million over the first two quarters of 2002.

Commenting on Value Added operations, company officials indicated
positive second quarter momentum resulted in year-to-date retail
branded butter and spreads volume being up 6 percent over 2002 and
private label butter volumes up 2 percent over the first two
quarters of last year. Total cheese volumes ran basically even
with one year ago, with a decline in retail cheese volumes offset
by increased volume in the Foodservice area. Overall Foodservice
volumes were up 5.5% over the first two quarters of 2002.

Land O'Lakes officials anticipate strong volumes in Dairy Foods
going forward, as a result of the performance of new branded
products; continued positive momentum in the Foodservice area; and
the company's traditionally strong fourth quarter.

On the Industrial side of the Dairy Foods business, while there
has been some improvement in commodity prices, the industry
continues to face a milk supply/processing demand imbalance and
depressed cheese, butter and milk prices (with prices through June
averaging 8-9 percent below the same period one year ago). In
addition, Land O'Lakes continued to face performance challenges
related to its Cheese and Protein International mozzarella and
whey operations, complicated by depressed prices in both those
markets. In the second quarter, Land O'Lakes reported progress in
repositioning and right-sizing its Dairy Foods Industrial
operations, with the sale of its Gustine, Calif., plant and
significant progress toward the sale of its idle Perham, Minn,
manufacturing facility.

                           Feed

In Feed, Land O'Lakes reported $11.5 million in pretax earnings
for the second quarter, as compared to pretax earnings of $29.4
million for the second quarter of 2002. Year-to-date, pretax
earnings in Feed are $26.7 million, down from $32.9 million
through June 2002. Company officials noted that 2002 earnings
included $32 million in proceeds from litigation settlements,
while 2003 earnings included approximately $19 million in
settlement proceeds.

The company continued to face significant challenge in the
livestock/commodity feed area, where volumes were down 13.5
percent year-to- date versus 2002. Economic pressure on dairy and
swine producers continued to constrain the livestock feed market,
as did herd reductions and geographic shifts in animal
populations. Company officials indicated futures markets are
beginning to show improvement, which could benefit producers and
the Feed business in the second half.

Companion animal feed volume was up 1 percent through June. Horse
feed reported a 5 percent volume increase over the first two
quarters of 2002.

Company officials also reported that cost-focused initiatives in
Feed produced nearly $10 million in savings relative to the first
half of 2002.

                             Swine

Swine continued to face a challenging market, although second
quarter prices began to show some improvement, which should have a
positive impact on this business segment. For the second quarter,
the company reported a $1.1 million pretax loss in Swine, as
compared to a $3.5 million loss for the second quarter of 2002.
Year-to-date, Swine is reporting a pretax loss of $5.2 million, as
compared to a loss of $4.0 million through June of 2002.

Volumes in Swine reflect the company's commitment to reducing
exposure to market risk, with year-to-date volumes in the higher
risk areas of Swine Programs and Farrow-to-Finish down 13 percent
and 6 percent, respectively, from one year ago.

During the quarter, Land O'Lakes offered producers in the Cost
Plus (contract) program, historically responsible for 40% of its
losses in Swine, an "Early Exit" option. Producers representing
nearly 40 percent of the total hogs in Cost Plus participated,
reducing the number of hogs in the program from approximately
230,000 to 130,000. By year-end, company officials anticipate the
program will be down to approximately 60,000 hogs.

                          Layers/Eggs

Land O'Lakes participates in the layer/eggs industry through MoArk
LLC, a joint venture in which the company exercises 50% control.
In Layers/Eggs, the company is reporting a pretax loss of $277,000
for the quarter, as compared to a loss of $7.1 million for the
second quarter of 2002. Year-to-date, the company has recorded
$629,000 in pretax earnings in Layers/Eggs.

Key drivers have been improved market prices and increased
volumes, up 1.4 percent to 365 million dozen eggs over the first
two quarters. LAND O LAKES-branded eggs also continued to gain
momentum, with sales up from 1.6 million dozen over the first two
quarters of 2002, to 2.3 million dozen through June 2003.

                              Seed

Seed continued its positive performance, with second quarter
pretax earnings of $5.0 million, as compared to pretax earnings of
$3.4 million for the second quarter of 2002. Year-to-date earnings
are up approximately $1 million, to $15.6 million.

This performance is attributable to the strength of the CROPLAN
GENETICS brand and solid volumes, with year-to-date corn volume up
25 percent, soybeans up 18 percent and alfalfa up 15 percent.

                             Agronomy

Land O'Lakes does its Agronomy business (crop nutrients and crop
protection products) through its 50-percent ownership position in
Agriliance. Land O'Lakes reported $42.0 million in Agronomy-
related pretax earnings for the quarter, which included Agronomy's
primary spring selling season, as compared to $41.0 million for
the second quarter of 2002. Year-to-date results show $33.2
million in pretax Agronomy earnings, up about $8 million from one
year ago.

Land O'Lakes is a national, farmer-owned food and agricultural
cooperative, with annual sales of approximately $6 billion. Land
O'Lakes does business in all 50 states and more than 50 countries.
It is a leading marketer of a full line of dairy-based consumer,
foodservice and food ingredient products across the United States;
serves its international customers with a variety of food and
animal feed ingredients; and provides farmers and local
cooperatives with an extensive line of agricultural supplies
(feed, seed, crop nutrients and crop protection products) and
services.

As previously reported in Troubled Company Reporter, Moody's
Investors Service downgraded the ratings on Land O'Lakes, Inc.
Outlook is stable.

     Rating Action                           To           From

  Land O'Lakes, Inc.

     * Senior implied rating                 B1            Ba2

     * Senior secured rating                 B1            Ba2

     * Senior unsecured issuer rating        B2            Ba3

     * $250 million Senior secured bank
       facility, due 2004                    B1            Ba2

     * $291 million Senior secured term
       loan A, due 2006                      B1            Ba2

     * $234 million Senior secured term
       loan B, due 2008                      B1            Ba2

     * $350 million 8.75% Senior unsecured
       guaranteed Notes, due 2011            B2            Ba3

  Land O'Lakes Capital Trust I

     * $191 million 7.45% Trust preferred
       securities                            B3            Ba3

The lowered ratings reflect the company's weaker-than-expected
operating performance, giving rise to a constrained financial
flexibility and the deterioration of credit protection measures.


LEVEL 3 COMMS: Reports $462 Million Net Loss in 2nd Quarter
-----------------------------------------------------------
Level 3 Communications, Inc. (Nasdaq: LVLT) announced its second
quarter results. Consolidated revenue was $941 million for the
second quarter compared to $1.23 billion for the previous quarter,
which excludes $17 million and $20 million of revenue,
respectively, from Software Spectrum's contact services business
which is included in discontinued operations. Consolidated revenue
for the second and first quarter includes $7 million and $326
million of revenue respectively, associated with customer
terminations and settlements that had no cash impact. Consolidated
revenue for the current quarter includes a full quarter of revenue
from the Genuity transaction, which closed on February 4, 2003.

The net loss for the second quarter was $0.95 per share, or $462
million. Included in the net loss was a $190 million expense, or
$0.39 loss per share, related to the premium that was paid for the
full conversion of the company's 9% Junior Convertible
Subordinated Notes due 2012.

Consolidated Adjusted EBITDA (Earnings before Interest, Taxes,
Depreciation and Amortization) was $113 million for the second
quarter, versus $95 million for the previous quarter. Consolidated
EBITDA was $114 million in the second quarter versus $403 million
for the previous quarter. Consolidated EBITDA for the previous
quarter included $326 million in customer settlement and
termination revenue that had no associated costs or cash impact.

                           Overview

"We exceeded our projections for the second quarter and continue
to make steady progress. We saw modest improvements in our
financial and operational metrics, including sales, for the
communications business," said James Crowe, CEO of Level 3.
"However, sales cycles continue to be longer than we would like.
Level 3 continues to be a strong financial partner for its
customers given our high incremental margins and the financial
strength of our balance sheet."

The company reports financial information based on three operating
segments: communications; information services; and other, which
consists primarily of coal mining operations.

               Consolidated Cash Flow and Liquidity

During the second quarter, unlevered cash flow was positive $65
million, versus negative $24 million for the first quarter (see
schedule of non-GAAP metrics). For the six months ended June 30,
2003, unlevered cash flow was $41 million. Consolidated free cash
flow was negative $31 million, versus the previous quarter of
negative $128 million.

As of June 30, 2003, the company's cash and marketable securities
balance was $1.3 billion, including $400 million in restricted
cash held as security under the company's senior secured credit
facility. The 2.875% Convertible Senior Notes issued in July 2003
increased the company's cash and marketable securities balance by
approximately $362 million. Including $400 million in restricted
cash held as security under the company's senior secured credit
facility, the company's pro-forma cash and marketable securities
balance was approximately $1.7 billion.

                    Communications Business

Revenue

Communications revenue for the second quarter was $434 million,
versus $708 million for the previous quarter. The previous quarter
included $326 million in customer settlement and termination
revenue. Total communications revenue for the second quarter
consisted of $396 million of communications services revenue and
$38 million of reciprocal compensation revenue. Included in
communications services revenue for the second quarter was $7
million of settlement and termination revenue. Communications
services revenue, excluding settlement and termination revenue,
increased by $48 million in the second quarter as compared to the
previous quarter, primarily due to a full quarter of revenue from
the Genuity transaction in the second quarter, versus the first
quarter, which included approximately two months of Genuity
revenue.

Cost of Revenue

Communications cost of revenue for the second quarter was $103
million, resulting in a 76 percent communications gross margin
(see schedule of non- GAAP metrics), versus cost of revenue of $89
million for the previous quarter, which resulted in an 87 percent
communications gross margin. Excluding termination and settlement
revenue of $7 million in the second quarter and $326 million in
the first quarter, communications gross margin declined by one
percent from the first quarter to the second quarter.

Communications cost of revenue increased in the second quarter due
to a full quarter of expenses associated with the Genuity
transaction, partially offset by lower circuit expenses as a
result of further optimization of the Genuity network.

Selling, General and Administrative Expenses

Communications SG&A expenses were $238 million for the second
quarter, versus $231 million for the previous quarter. For the
same periods, communications SG&A expenses include $24 million and
$21 million of non-cash stock compensation expenses. The total
number of employees in the communications business decreased to
approximately 3,650 at the end of the second quarter from
approximately 4,000 at the end of the previous quarter.

Communications SG&A expenses increased in the second quarter due
to a full quarter of expenses associated with the Genuity
transaction, partially offset by a reduction in costs associated
with the Genuity integration, such as the elimination of duplicate
facilities and reduction in headcount, and an $8 million reduction
in property tax expense.

Earnings Before Interest, Taxes, Depreciation and Amortization

Communications EBITDA was $112 million for the second quarter,
including a restructuring charge of $5 million, versus $398
million for the previous quarter, which included $326 million of
customer termination and settlement revenue and $11 million in
restructuring charges. Communications EBITDA margin (see schedule
of non-GAAP metrics) was 26 percent for the second quarter. For
the six months ended June 30, 2003, communications EBITDA was $510
million.

Genuity Integration

"We have made good progress on the integration of the acquired
Genuity operations into Level 3," said Kevin O'Hara, president and
COO of Level 3. "With five months of integration behind us, we are
increasingly confident about our integration timeline. We continue
to eliminate duplicative network capacity and facilities, combine
our network operating centers, and migrate customer traffic onto
the Level 3 network."

Information Services Business Results for the information services
business include the Software Spectrum and (i)Structure
subsidiaries. During the second quarter, the company sold Software
Spectrum's contact services business, and the results for this
business are reflected as discontinued operations in the statement
of operations. For the first six months of 2003, the contact
services business generated approximately $37 million in revenue.

"Given the softness in sales we began to experience at the
beginning of the year, we have taken steps to reduce overall
expenses through ongoing cost cutting and restructuring
activities," said Charles Miller, vice chairman of Level 3. "We
expect to be able to reduce our operating expense run rate by
approximately 15 percent to 20 percent by the end of the year."

Revenue and EBITDA

Information services revenue was $491 million for the second
quarter, versus $506 million for the previous quarter. The decline
in revenue for the second quarter was primarily the result of
softness in sales and the continued adoption by Software Spectrum
customers of Microsoft's new software licensing program.
Microsoft's new software licensing program continues to result in
a decline in revenue, but has no significant impact to
profitability levels.

EBITDA from the information services business was $0.4 million for
the second quarter, including $4 million in restructuring charges,
compared to $3 million for the previous quarter. The restructuring
charges recognized in the second quarter are a result of the
ongoing integration and restructuring of Software Spectrum, as
well as the closure of (i)Structure's operations in Ireland.

Primarily as a result of the sale of the contact services
business, the total number of employees in the information
services business decreased to approximately 1,800 at the end of
the second quarter from approximately 3,500 at the end of the
previous quarter.

                         Other Businesses

The company's other businesses consist primarily of coal mining
operations.

Revenue and EBITDA

Revenue and EBITDA from other businesses were $16 million and $2
million for the second quarter, unchanged from the previous
quarter.

                      Corporate Transactions

Capital Structure Changes

During the second quarter, Level 3 reduced its outstanding debt by
$580 million. The company converted $480 million of its 9% Junior
Convertible Subordinated Notes due 2012 into approximately 168
million shares of Level 3 common stock and retired $100 million of
9.125% senior notes for approximately 13 million shares of Level 3
common stock. Level 3 had approximately 641.5 million outstanding
shares of common stock as of June 30, 2003.

In July 2003, Level 3 completed an offering of approximately $374
million aggregate principal amount of its 2.875% Convertible
Senior Notes due 2010 in an underwritten public offering. Net cash
proceeds from the offering were $362 million.

"We're pleased with the improvement in our balance sheet," said
Sunit Patel, CFO of Level 3. "We converted $580 million of high-
coupon debt into equity and accessed the capital markets for the
first time in over three years to issue low-coupon convertible
debt."

                      Business Transactions

In May 2003, Level 3 exited the managed web hosting business it
acquired in the Genuity transaction through an agreement with
Computer Sciences Corporation. As part of the transaction, CSC
agreed to use Level 3's network services to serve hosting
customers.

In June 2003, Level 3 announced the sale of Software Spectrum's
contact services business to H.I.G Capital, a Miami-based private
equity firm. This business had revenue of approximately $37
million for the six months ended June 30, 2003. Historical results
for this business, including the second quarter, are reflected as
discontinued operations in the statement of operations.

Subsequent to the end of the second quarter, the company acquired
Telverse Communications Inc., a provider of IP-based voice and
data services headquartered in Dulles, VA. Consideration for the
acquisition was approximately $30 million in Level 3 common stock.

"Telverse is an important building block in our ongoing effort to
build a more significant presence in the voice-over-IP market,"
said Jack Waters, group vice president and president of softswitch
services.

Subsequent to the end of the second quarter, Level 3 sold the
former Genuity, Inc. headquarters building for approximately $20
million in cash.

                       Business Outlook

"We are realizing cost benefits as a result of our ongoing
integration of the Genuity business," said James Crowe. "We expect
to see further improvements in cash flow, particularly as we look
toward the fourth quarter 2003. We are focused on long-term value
creation by improving consolidated free cash flow through
recurring revenue growth and new product development, as well as
opportunistic acquisition activity."

Quarterly and Full Year Projections

Sunit Patel said, "For the full year 2003, we are tightening our
range for communications revenue from $1.94 billion - $2.04
billion to $1.98 billion - $2.0 billion. We are comfortable with
our previously issued full year projections for information
services revenue and other revenue, communications gross margin,
and unlevered cash flow, and we are increasing our projection for
consolidated EBITDA by $20 million."

"Our third quarter projections show a decrease in communications
revenue. This decrease is primarily a result of lower reciprocal
compensation revenue, which decreases from $38 million in the
second quarter to $25 million in the third quarter. The decrease
is being driven by the expiration of existing interconnection
agreements, which have either been renegotiated or by the adoption
of the Federal Communication Commission's (FCC) mandated rates for
dial-up traffic," said Patel. "Our recurring communications
revenue continues to show modest growth. Our projected
Consolidated EBITDA for the third quarter decreases due to the
reduction in reciprocal compensation, restructuring charges in the
information services business and the benefit of a reduction in
property tax expenses in the second quarter, which increased
Consolidated EBITDA by approximately $8 million."

The company expects cash and marketable securities, including $400
million in restricted cash held as security under the company's
senior secured credit facility, of approximately $1.6 billion at
year-end.

The company continues to expect to turn Consolidated Free Cash
Flow positive during the second quarter of 2004.

Summary

"I am encouraged by Level 3's ability to execute in this
environment," said Crowe. "I believe that our ability to
successfully integrate the Genuity transaction -- coupled with our
consistent financial and operating performance and our industry-
leading provisioning times and quality of service -- will enable
Level 3 to continue to differentiate itself in the marketplace
during 2003."

Level 3 (Nasdaq: LVLT) is an international communications and
information services company. The company operates one of the
largest Internet backbones in the world, is one of the largest
providers of wholesale dial-up service to ISPs in North America
and is the primary provider of Internet connectivity for millions
of broadband subscribers, through its cable and DSL partners. The
company offers a wide range of communications services over its
22,500 mile broadband fiber optic network including Internet
Protocol (IP) services, broadband transport and infrastructure
services, colocation services, and patented Softswitch managed
modem and voice services. Its Web address is http://www.Level3.com

The company offers information services through its subsidiaries,
(i)Structure and Software Spectrum. For additional information,
visit their respective Web sites at
http://www.softwarespectrum.comand http://www.i-structure.com

As reported in Troubled Company Reporter's July 3, 2003 edition,
Standard & Poor's Ratings Services assigned its 'CC' rating to
Level 3 Communications Inc.'s proposed shelf drawdown of $250
million convertible senior notes due 2010. Proceeds will be used
for general corporate purposes, including working capital, capital
expenditures, product development, debt repurchases, and
acquisitions. All ratings on the company are affirmed. The outlook
is negative.

Although cash proceeds improve Level 3's liquidity, Standard &
Poor's is still concerned about the company's ability to withstand
prolonged industry weakness, and risk from its acquisition
strategy.


LORAL SPACE: Wants to Hire Ordinary Course Professionals
--------------------------------------------------------
Loral Space & Communications Ltd., and its debtor-affiliates ask
for approval from the U.S. Bankruptcy Court for the Southern
District of New York to continue employing professionals they turn
to in the ordinary course of their businesses.

The Debtors want to continue to employ the Ordinary Course
Professionals to render a wide variety of services to these
estates in the same manner and for the same purposes as the
Ordinary Course Professionals did prior to the Commencement Date.
In the past, these professionals have rendered a wide range of
services relating to such broad topics as:

     - litigation,
     - regulatory matters both foreign and domestic,
     - contracts,
     - real estate,
     - financing transactions, and
     - tax.

It is essential that the employment of these Ordinary Course
Professionals, many of whom are already familiar with the Debtors'
businesses and affairs, be continued to avoid disruption of the
Debtors' normal business operations. The Debtors submit that the
employment of the Ordinary Course Professionals and the payment of
monthly compensation are in the best interest of their estates and
of their creditors. The employment will save the estates
substantial expenses associated with applying separately for the
employment of each professional. Further, this will avoid the
incurrence of additional fees relating to the preparation and
prosecution of interim fee applications.

The Debtors propose that they be permitted to pay each Ordinary
Course Professional, without a prior application to the Court,
100% of the fees and disbursements incurred, upon the submission
of an appropriate invoice setting forth in reasonable detail the
nature of the services rendered and disbursements actually
incurred, up to the lesser of:

     (a) $50,000 per month per Ordinary Course Professional or

     (b) $500,000 per month, in the aggregate, for all Ordinary
         Course Professionals.

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


LTV CORP: Copperweld Seeks WCSR's Services as Exit Loan Counsel
---------------------------------------------------------------
James Loveland, Interim Chief Financial Officer of Copperweld
Corporation, tells the Court that the LTV Corporation Debtors
currently have financial obligations over $200,000,000 due under
the Senior Secured Superpriority Debtor-in-Possession Credit
Agreement dated as of May 16, 2002. General Electric Credit
Corporation, the lead lender on the DIP Facility, heads a
syndicate of lenders.

By this application, the Copperweld Debtors seek the Court's
authority to employ the law firm of Womble Carlyle Sandridge &
Rice PLLC as special counsel to advise Copperweld with regard to
the structure and terms of a take-out facility for Copperweld's
DIP Facility.

Under the terms of the DIP Facility, as well as the terms of the
underlying loan document for the DIP Facility, Copperweld must
secure additional capital sufficient to liquidate the DIP
Facility, according to its terms, on the Effective Date, as that
date may be defined by any plan of reorganization that Copperweld
may confirm in its Chapter 11 case.

                         WCSR Services

Copperweld anticipates that WCSR will provide advice and services
in connection with the negotiation of the structure, terms and
conditions of the take-out facility, as well as assist with the
closing and implementation of that facility, including:

       (a) reviewing the documents associated with the existing
           DIP Facility in order to advise Copperweld regarding
           the specific terms and conditions under which the DIP
           Facility must be repaid and liquidated;

       (b) advising and assisting Copperweld with regard to the
           implications and obligations inherent in certain
           forms of potential credit facilities that may be used
           as part of the overall take-out facility;

       (c) drafting and reviewing all of the documentation
           necessary to evidence and implement the take-out
           facility;

       (d) preparing, reviewing and processing all documentation
           necessary to secure repayment of the take-out
           facility through liens and encumbrances against the
           assets of the post-confirmation Copperweld;

       (e) providing Copperweld with a review of the proposed
           terms and conditions of any proposed take-out
           facility in order to determine if the terms and
           conditions are competitive within the market for
           debt facilities to other similarly situated
           borrowers; and

       (f) advising Copperweld on the impact of Copperweld's
           proposed plan of reorganization, and the
           confirmation process, on the take-out facility.

                         WCSR Compensation

WCSR intends to charge a flat hourly rate for each professional,
depending on the level of experience required for the applicable
tasks.

The firm's specific professional levels and hourly billing rates
are:

                     Members            $300 - 500
                     Associates          150 - 290
                     Paralegals           75 - 150

Deborah J. Hylton, a member of WCSR, discloses that WCSR is not,
and has not been employed by any entity, other than Copperweld, in
matters related to these Chapter 11 cases, except that from
March 10, 2003 to May 12, 2003, WCSR represented James Smith and
James Loveland, individually, in the negotiation and
implementation of the terms and conditions under which they would
be engaged as Chief Restructuring Officer and Interim Chief
Financial Officer, for Copperweld.  This engagement has concluded,
and WCSR will render no further services to Smith or Loveland in
connection with their individual engagement by Copperweld.

Furthermore, Ms. Hylton says, WCSR represented Messrs. Smith and
Loveland, individually, in connection with an escrow agreement
required as a condition to their engagement by Copperweld.  This
engagement also has been concluded, and WCSR will render no
further services to these officers in connection with the escrow
agreement.

WCSR has previously represented creditors of the Debtors, like
Aetna Life Insurance Company in matters involving real estate
transactions, labor and employment litigation, and insurance
coverage litigation, all unrelated to these Chapter 11 cases; and
Air Products & Chemicals with regard to a construction-related
dispute unrelated to the Debtors. WCSR also has assisted Akin Gump
Strauss Hauer & Feld, counsel to the Official Committee of
Noteholders for the Debtors, as local counsel on certain matters
that Akin Gump had pending in WCSR's geographic area. These
matters were unrelated to the bankruptcy case and the engagements
have been completed.

WCSR has represented the Bank of America, which is the parent
corporation of Bank of America of Illinois, which provided
inventory and receivables financing to the Debtors, and its
subsidiary, Bank of America Leasing Corp., in connection with a
number of litigation, collection, consumer finance, municipal
finance, and real estate related transactions throughout WCSR's
geographic region that are unrelated to the Debtors.  WCSR
currently represents Bank of America in other commercial matters
unrelated to the bankruptcy case.  Ms. Hylton discloses other
relationships, all of which she says are unrelated to the
bankruptcy case, and promises that waivers of any conflict either
has been or could be obtained. (LTV Bankruptcy News, Issue No. 51;
Bankruptcy Creditors' Service, Inc., 609/392-00900)


LWTC CORP: Needs Until August 25 to Prepare & Deliver Schedules
---------------------------------------------------------------
LWTC Corporation and its debtor-affiliates ask for more time from
the U.S. Bankruptcy Court for the District of Delaware to file
their Schedules and Statements as required under 11 U.S.C. Sec.
521(1) and Rule 1007 of the Federal Rules of Bankruptcy Procedure.

The Debtors report they have more than 300 creditors, including
employees.  Because of the magnitude of the work required to
prepare and submit accurate and complete schedules and statements
for each of the Debtors, including the analysis of voluminous
records and documentation of the Debtors as well as the
examination of various creditor agreements, contracts, vendor
payments and other related matters, it will be extremely difficult
for the Debtors to submit fully accurate and complete schedules
and statements in the brief time allowed pursuant to Bankruptcy
Rule 1007.

Consequently, the Debtors seek an extension of time for filing the
required schedules and statements until August 25, 2003. This
extension will not interfere with the conduct of the first meeting
of creditors under Section 341 of the Bankruptcy Code, which has
not yet been scheduled by the Court. The Debtors aver that no harm
or prejudice will come to any party as a result of the requested
extension.

LTWC Corporation, headquartered in Stamford, Connecticut provides
permission email marketing and tracking services. The Company
filed for chapter 11 protection on July 23, 2003 (Bankr. Del. Case
No. 03-12272).  John C. Phillips, Jr., Esq., at Phillips, Goldman
& Spence represents the Debtors in their restructuring efforts.
As of March 31, 2003, the Debtors listed $5,016,000 in total
assets and $2,576,000 in total debts.


LYONDELL CHEMICAL: Reports Sequential Decline in Net Loss for Q2
----------------------------------------------------------------
Lyondell Chemical Company (NYSE: LYO) announced a net loss for the
second quarter of $68 million. This compares to net income of $2
million for the second quarter of 2002, and net loss of $113
million in the first quarter of 2003.

Compared to the second quarter of last year, the net loss
increased primarily as a result of reduced profitability of the
Intermediate Chemicals and Derivatives segment, largely from a
combination of the expiration of a significant MTBE contract at
the end of 2002 and lower MTBE market margins. Compared to the
first quarter of this year, the key factor that contributed to the
improved results was higher Equistar ethylene margins,
particularly for ethylene produced from liquid raw materials. This
raw material advantage was largely responsible for an improvement
of approximately $100 million in Equistar's net income. During the
second quarter 2003, financings and restructuring costs reduced
net income by $14 million or 9 cents per share. The year-to-date
2003 net loss increased to $181 million compared to a net loss of
$53 million for the prior year-to-date period, primarily as a
result of lower MTBE performance in IC&D and higher losses from
the Company's Equistar ownership.

"Results during the quarter showed improvement when compared to
the past two quarters, but were below the level that we
anticipated when we entered the quarter," said Lyondell President
and CEO Dan F. Smith. "Nonetheless, our continued focus on cash
and liquidity allowed us to finish the second quarter with
liquidity at Lyondell and Equistar at similar levels to those at
the beginning of the year."

"Equistar's Gulf Coast olefin plants that can consume liquid raw
materials demonstrated their differential cost advantage despite
crude oil prices remaining stubbornly high, averaging close to $30
per barrel for the second quarter. This advantage was partially
offset by depressed volumes in Equistar's products and across the
chemical industry, caused by post-Iraq war inventory reductions,
the impact of SARS, and generally poor economic conditions. In our
100%-owned IC&D segment, propylene oxide and derivatives performed
as expected, realizing a series of price increases in April; but
the MTBE business did not improve significantly. LYONDELL-CITGO
Refining (LCR) continued to have excellent operating performance
and strong cash distributions."

                              OUTLOOK

During the second quarter, product shipments in general
demonstrated a slow but steady improvement, and thus far this
trend has continued into the third quarter. The Company expects
Equistar to continue to benefit from its liquid raw material
advantage although to a somewhat reduced degree. IC&D has
benefited from lower raw material costs thus far in the third
quarter. The Company expects LCR's performance to continue to be
strong, assuming sustained deliveries of contract crude oil
volumes.

"Third quarter performance will be largely dependent on the pace
of global economic recovery," Smith said. "Under a scenario of
moderate economic recovery and improved global stability, we would
expect both Lyondell and Equistar to benefit from strengthening
volumes and moderating raw material prices. However, industry
operating rates remain depressed and, therefore, it will be
difficult to achieve and sustain margin improvements in the near
term. The potential for continued raw material cost volatility
represents an uncertainty for Equistar, but we believe that the
fundamentals will continue to favor Equistar's liquid-based
olefins position."

                    LYONDELL AND JOINT VENTURES

Lyondell's operations comprise: Lyondell's IC&D segment; Equistar,
a joint venture with Millennium Chemicals Inc.; and LCR, a joint
venture with CITGO Petroleum Corp.

For IC&D, the second quarter 2003 included costs of $5 million
related to financing activities.

2Q03 vs. 2Q02 -- Reduced profitability of MTBE accounted for the
majority of the decrease in operating income versus the second
quarter of 2002. The lower MTBE profitability resulted from a
combination of the expiration of a favorable contract with BP at
the end of 2002, higher raw material and utility costs related to
high U.S. natural gas prices, and weak MTBE market conditions
partially related to reduced demand in California. IC&D operating
income was also impacted by increased operating costs, largely due
to the new BDO-2 plant. Overall volumes for PO and derivatives, as
well as TDI, were relatively unchanged versus the year ago period.
Styrene profitability was relatively unchanged.

2Q03 vs. 1Q03 -- Compared to the first quarter of 2003, IC&D's
operating loss improved by $12 million based on improved business
results. PO and derivatives realized higher prices and margins in
the second quarter but, as expected, this was offset by lower
volumes driven by a seasonal decline in deicers and temporary
shifts in demand patterns resulting from April 2003 price
increases. MTBE benefited from increased sales volumes and
moderately increased European margins while U.S. margins continued
to be soft. Styrene showed moderate margin improvements, which
were partially offset by reduced export volumes. However, TDI
experienced both lower global sales volumes and lower European
prices. Lyondell net income and IC&D EBITDA in first quarter 2003
included an $18 million gain related to the restructuring of the
Nihon Oxirane joint venture in Asia.

Equistar's results in the second quarter 2003 included costs of
$19 million related to financing activities.

2Q03 v. 2Q02 -- Compared to the second quarter of 2002, the
current quarter was characterized by higher margins and lower
volumes. The margin improvement primarily resulted from ethylene
and polyethylene prices which were reported by Chemical Marketing
Associates, Inc., to be an average 7 cents to 10 cents per pound
higher than in the period a year ago. While purchased raw material
prices were significantly higher for both liquid and natural gas-
based raw materials in the second quarter of 2003, higher prices
realized for Equistar's co-products produced from processing
liquid raw materials offset most of the increase in liquid raw
material prices.

CMAI, an industry consultant, estimates that the average cost of
producing ethylene across the industry increased by approximately
3.5 cents per pound compared to the second quarter of 2002.
However, as a result of Equistar's flexibility to process liquid
raw materials, its equivalent costs only increased by
approximately 2 cents per pound.

Offsetting the increased margins were reduced sales volumes of
ethylene and derivative products (ethylene, ethylene oxygenates
and polyethylene) which, when taken together, were 20 percent
below year-ago levels. Polymer sales volumes also were negatively
impacted by approximately 85 million pounds of lower polypropylene
sales as a result of the first quarter 2003 sale of the Bayport
polypropylene unit.

2Q03 v. 1Q03 -- Compared to the first quarter of 2003, Equistar's
performance improvement was primarily a function of the lower cost
of ethylene production at its Gulf Coast liquid-based olefin
plants. This raw material advantage was largely responsible for an
improvement of approximately $100 million in Equistar's net
income. CMAI estimates that the average cost of producing ethylene
across the industry decreased by approximately 5.4 cents per pound
compared to the first quarter of 2003. However, as a result of
Equistar's flexibility to process liquid raw materials, its
equivalent costs decreased by nearly 8 cents per pound.
Complementing this improvement, CMAI estimates that polymer
pricing averaged 3 cents per pound higher than the first quarter
average price. The positive impacts of the lower ethylene
production costs and higher polymer prices were partially offset
by significant volume reductions in ethylene and derivatives.
Taken as a group, Equistar's ethylene and derivative products
sales volumes were about 13 percent below first quarter 2003 sales
levels. As noted above, Equistar's polymers sales volumes were
impacted by the first quarter 2003 sale of the Bayport
polypropylene unit.

LCR's second quarter results were reduced by a $6 million
restructuring charge related to personnel reductions.

2Q03 v. 2Q02 -- Compared to the second quarter of 2002,
performance at LCR was relatively unchanged. LCR's total crude
processing rate increased by 15,000 barrels per day compared to
the second quarter 2002, averaging 274,000 barrels per day. The
amount of Venezuelan crude oil processed by LCR under the Crude
Supply Agreement with PDVSA was 45,000 barrels per day higher than
in the second quarter of 2002, averaging 246,000 barrels per day.
Offsetting these positives was the negative effect of higher gas
costs and lower spot crude volumes.

2Q03 vs. 1Q03 -- In the first quarter of 2003, results were
negatively impacted by a $25 million charge related to the
restructuring of LCR's low sulfur gasoline project. Compared to
the first quarter, total crude processing rates increased 28,000
barrels per day and CSA crude processing rates increased 52,000
barrels per day. Lower volumes and margins related to spot crude
purchases partially offset the benefit of the higher CSA
processing rates.

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


METRIS COS: S&P Further Junks Counterparty Credit Rating to CCC-
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
counterparty credit and senior unsecured debt ratings on Metris
Cos. to 'CCC-' from 'CCC+'. The Minnetonka, Minnesota-based credit
card company's subordinated debt rating was lowered to 'CC' from
'CCC-'. The outlook remains negative.

"The downgrade reflects the ongoing challenge management faces in
returning the company to profitability and reestablishing access
to longer-term funding sources," said credit analyst Daniel
Martin.

Of immediate concern is the mounting funding pressure to which the
company is subject. The chief regulator of Metris' subsidiary bank
has requested that all FDIC-insured deposits, projected to amount
to $565 million at Sept. 30, 2003, be eliminated or the associated
risk to the FDIC be removed by the same date.

While Metris projects a sizable cash position of $365 million at
the time of the deadline, the company will need to find
alternative funding for approximately $200 million of receivables
at the bank. Currently, the company appears to have available only
renewable funding sources (conduits or secured lending facilities)
or asset sales. While some flexibility is afforded by a strong
capital base and the availability of unencumbered assets, the
company's reliance on short-term funding sources and stop-gap
measures such as asset sales does create a significant liquidity
risk.

If losses continue at elevated levels or if the company finds its
funding options narrowing further, the ratings could be lowered
again.


METRIS COMPANIES: Second Quarter 2003 Net Loss Tops $16 Million
---------------------------------------------------------------
Metris Companies Inc. (NYSE:MXT) reported a net loss for the
quarter ended June 30, 2003 of $15.7 million.

"We continue to focus on improving credit quality and ensuring
that we have adequate liquidity to operate the business," said
David Wesselink, Metris chairman and chief executive officer.
"Progress was made against both of these objectives during the
second quarter."

At June 30, 2003, consistent with its operating plan, the
Company's owned credit card portfolio was $633 million, down from
$846 million at December 31, 2002. Managed credit card loans at
June 30, 2003 declined by approximately $1.3 billion from previous
year-end to $10.1 billion. The decrease in managed portfolio
balances was due to continued slower account growth, tighter
underwriting standards and more stringent credit line management
strategies.

In the second quarter, Metris added more than 75,000 new credit
card accounts, resulting in 3.0 million active accounts as of
June 30, 2003.

In the second quarter, the owned net charge-off rate was 25.4
percent, compared with 4.5 percent in the prior quarter and 19.6
percent for the second quarter 2002. The managed net charge-off
rate for the second quarter was 19.1 percent, compared to 18.0
percent for the prior quarter and 14.9 percent for the second
quarter 2002. On July 18, 2003, the company sold a $29.1 million
portfolio of revoked and delinquent assets. Those assets were
written down to fair value and are reflected in "other assets" at
June 30, 2003. Excluding the sale, the owned net charge-off rate
would have been 9.7 percent and the managed net charge-off rate
would have been 18.1 percent in the second quarter 2003. The
Company continues to experience higher charge-off rates due to the
weak economic environment, higher bankruptcies, a declining
receivable base and the 2001 credit line increase program.

The owned delinquency rate was 7.6 percent at June 30, 2003,
compared to 8.2 percent at March 31, 2003, and 11.3 percent at
June 30, 2002. The managed delinquency rate was 11.2 percent at
June 30, 2003, compared to 11.5 percent at March 31, 2003, and
10.1 percent at June 30, 2002. Excluding the sale of revoked and
delinquent assets, the owned delinquency rate would have been 11.7
percent and the managed delinquency rate would have been 11.5
percent at June 30, 2003.

Since March 2003, the Company and Direct Merchants Bank have been
operating under an Operating Agreement with the Office of the
Comptroller of the Currency, which was filed as a Form 8-K. The
OCC has requested and the Bank has agreed to eliminate federally-
insured deposits at the Bank, or the risk thereof to the FDIC, by
September 30, 2003. The Bank estimates that it will have
approximately $565 million of insured deposits at September 30,
2003. The Bank estimates it will have approximately $375 million
of unencumbered cash and approximately $500 million of available
receivables at September 30, 2003 to meet this obligation. The
Company and the Bank have received preliminary proposals from
financing sources, and are working with their financial advisors
to review those proposals to develop other options. These options
may include the sale of certain assets to funding conduits or
third parties.

Metris Companies Inc. (NYSE: MXT) is one of the nation's leading
providers of financial products and services. The Company issues
credit cards through its wholly owned subsidiary, Direct Merchants
Credit Card Bank, N.A. Through its enhancement services division,
Metris also offers consumers a comprehensive array of value-added
products, including credit protection and insurance, extended
service plans and membership clubs. For more information, visit
http://www.metriscompanies.comor
http://www.directmerchantsbank.com


MIRANT: U.S. Trustee Appoints Two Official Committees
-----------------------------------------------------
George F. McElreath, the Assistant United States Trustee for
Region VI, convened an organizational meeting of the Debtors'
largest creditors for the purpose of forming one or more official
committees to participate in Mirant's chapter 11 cases on Friday,
July 25, 2003, at 10:00 a.m. in Dallas.

Mr. McElreath made it clear that this organizational meeting is
not the official meeting of creditors pursuant to 11 U.S.C. Sec.
341(a).  That meeting -- at which a representative of the Debtors
will appear to be examined by the U.S. Trustee and creditors under
oath -- will take place on August 21, 2003, at 02:00 p.m., and all
creditors will receive notice of that meeting.

Mr. McElreath made it clear that an official committee of
creditors represents, as a fiduciary, the interests of its
constituency as a whole.  Accordingly, Mr. McElreath said, a
committee is not a substitute for individual legal counsel when
the interests of one particular creditor diverge from the
interests of all creditors.

Mr. McElreath acknowledged that the U.S. Trustee received requests
for the appointment of multiple committees.  Holders of Mirant
Americas Generation, LLC, bonds (referred to as MAGi Bondholders),
made the loudest request.  After reviewing those requests,
however, the U.S. Trustee concluded that appointment of a single
committee would be appropriate in this case.  The Debtors have
made a strong case that all creditors will be paid in full.  If
the MAGi Bondholders don't agree, Mr. McElreath indicated, they
are free to take the matter to Judge Lynn for review.

Mr. McElreath introduced creditors to Robert N. Dangremond,
Mirant's new chief restructuring officer and Thomas E. Lauria,
Esq., Mirant's lead bankruptcy lawyer from White & Case LLP.

Messrs. Dangremond and Lauria reviewed:

     * Mirant's recent history that led up to the chapter
       11 filing,

     * the Company's failed effort to obtain acceptances of
       a prepackaged solution,

     * the chapter 11 filing and the Debtors' First Day
       Motions filed with the Court and the relief obtained
       which permitted operations to continue with minimal
       disruption; and

     * the business plan -- which is to restructure the
       loans along the same lines as pre-pre-petition
       proposal, with longer maturities and some security.

Mr. McElreath invited creditors to ask questions.  There were
none.

Messrs. Dangremond and Lauria indicated that the Debtors and their
professionals look forward to working with the members of the
committee and their professionals to achieve the goal of
reorganizing the Debtor and emerging from chapter 11 in the
shortest period of time.

Mr. McElreath advised creditors that he received indications of
willingness to serve on a committee from scores of creditors.
Following a recess, Mr. McElreath announced, pursuant to 11 U.S.C.
Sec. 1102(a)(1), the U.S. Trustee will appoint a single committee
of creditors in the Debtor's chapter 11 case, comprised of:

     Mirant Creditors:

          Citibank
          Hypovereins Bank
          Bank of America
          Dresdner Bank AG
          Wachovia Securities
          Appaloosa Management LP
          Creedon Keller Partners Inc.
          HSBC Bank USA, as Intendure Trustee
          The Royal Bank of Scotland

     MAGi Creditors:

          California Public Employee Retirement System
          Elliott Associates LP
          Mackay Shields Financial
          Wells Fargo Minnesota, as Indenture Trustee

Deutsche Bank AG complained that it holds a claim representing far
more than 1/13 of Mirant's debt structure.  "Work out an agreement
among yourselves," Mr. McElreath responded.

Mr. McElreath thanked all creditors and their representatives for
attending this organizational meeting and for their willingness to
serve on an official committee.  Mr. McElreath directed the
committee appointees to immediately convene their first meeting,
introduce themselves to one another, select a chairperson, decide
how to conduct their business and, if they wished, select
professionals to advise and assist them in carrying out their
statutory duties.

Mr. Lauria indicated that the Debtor would appreciate the
opportunity to meet with the Creditors' Committee as quickly as
possible in order to provide them with information packages,
obtain their consent to confidentiality agreements to allow the
Debtor to pass material non-public information to the Committee,
and to discuss matters pending before the Court.  Mr. McElreath
made it clear that the Committee is free to choose when it will
meet with the Debtor and may summon the Debtor at any time.

The newly appointed committee met for a half-hour and then
summoned Mr. McElreath.  The Committee announced that it hired
Cadwalader, Wickersham & Taft as its counsel.  Additionally, the
Committee voted 10 to 3 in favor of asking the U.S. Trustee to
split into two Committees.  And if the U.S. Trustee refuses,
Cadwalader is instructed to immediately file a motion with Judge
Lynn asking that he direct the appointment of separate Mirant and
MAGi creditor committees.  The Committee, without elaborating,
assured Mr. McElreath the issue is very important to everybody.

Mr. McElreath was stunned.  He's the longest-serving Assistant
U.S. Trustee in the country and has never had a committee make
such a request.  Mr. Lauria was equally amazed.

"Fine," Mr. McElreath said, "we'll have two committees."
Accordingly, Mr. McElreath appointed:

     THE MIRANT COMMITTEE:

          MIRANT BANKS:

               Citibank
                    John Dorans
                    Citibank, N.A.
                    250 West Street, 8th Floor
                    New York, NY 10013
                    Telephone (212) 723-3104
                    Fax (212) 723-3899
                    john.dorans@citigroup.com

               Hypovereins Bank
                    Lori Ann Curnyn
                    Hypovereins Bank
                    150 East 42nd Street
                    New York, NY 10017-4679
                    Telephone (212) 672-5935
                    Fax (212) 672-5908
                    loriann_curnyn@hvbcrediTadvisors.com

               Bank of America
                    Mike McKenney
                    Bank of America
                    101 South Tryon Street
                    Charlotte, NC 28255
                    Telephone (704) 388-5920
                    Fax (704) 386-1759
                    michael.j.mckenney@bankofamerica.com

               Dresdner Bank AG
                    James Gallagher
                    Thomas Brady
                    Dresdner Bank AG, New York Branch
                    75 Wall Street
                    New York, NY 10005-2889
                    Telephone (212) 429-2574
                    Fax (212) 429-2192
                    James.Gallagher@drkw.com
                    Thomas.Brady@drkw.com

               Wachovia Securities
                    Jill Akre
                    Wachovia Securities
                    1339 Chestnut Street
                    The Widener Bldg., 4th Floor, PA4810
                    Philadelphia, PA 19107
                    Telephone (267) 321-6663
                    Fax (267) 321-6903
                    jill.akre@wacovia.com

               Deutsche Bank AG
                    Mark B. Cohen
                    Deutsche Bank AG
                    60 Wall Street
                    New York, NY 10019
                    Telephone (212) 250-6038
                    Fax (212) 797-5695
                    mark.b.cohen@db.com

               Toronto Dominion Securities
                    Deborah G. Gravinese
                    TD Securities (USA) Inc.
                    31 West 52nd Street, 18th Floor
                    New York, NY 10019-6101
                    Telephone (212) 827-7777
                    Fax (212) 827-7244
                    deborah.gravinese@tdsecurities.com

          MIRANT BONDHOLDERS:

               Appaloosa Management LP
                    Ronald Goldstein
                    Appaloosa Management LP
                    26 Main Street, 1st Floor
                    Chatham, NJ 07928
                    Telephone (973) 701-7000
                    Fax (973) 701-7055
                    R.Goldstein@amlp.com

               Creedon Keller Partners Inc.
                    Sabina Bhatia
                    Creedon Keller & Partners, Inc.
                    123 Second Street, Suite 120
                    Sausalito, CA 94965
                    Telephone (415) 332-0111
                    Fax (415) 332-7811

               Trilogy Capital
                    Steven Gidumal
                    Trilogy Capital, LLC
                    780 Third Avenue, 16th Floor
                    New York, NY 10017
                    Telephone (212) 758-6200
                    Fax (212) 317-9260

               HSBC Bank USA, as Indenture Trustee
                    Russ Paladino
                    HSBC Bank USA
                    452 Fifth Avenue
                    New York, NY 10018
                    Telephone (212) 525-1324
                    Fax (212) 525-1366
                    russ.paladino@us.hsbc.com

     THE MAGi COMMITTEE:

          MAGi BANKS:

               J.P. Morgan Chase & Co.
               Lehman Brothers
               Royal Bank of Scotland

          MAGi BONDHOLDERS:

               California Public Employee Retirement System
               Elliott Associates LP
               Mackay Shields Financial
               Wells Fargo Minnesota, as Indenture Turstee


MIRANT CORP: Turns to Haynes & Boone for Chap. 11 Legal Services
----------------------------------------------------------------
Pursuant to Section 327(a) of the Bankruptcy Code, Mirant Corp.
and its debtor-affiliates seek the Court's authority to employ
Haynes and Boone, LLP as their co-counsel to perform the extensive
legal services in these Chapter 11 cases with Robin Phelan and
Judith Elkin acting as lead Haynes and Boone counsels for these
cases.

Robin E. Phelan, Esq., at Haynes and Boone LLP, in Dallas, Texas,
reports that Haynes and Boone will represent the Debtors in these
Chapter 11 cases along with co-counsel, White & Case LLP.  Both
law firms have discussed a division of responsibilities in
connection with their representation of the Debtors and will make
every effort to avoid and minimize duplication of services to the
Debtors.

The Debtors selected Haynes and Boone because of the firm's
extensive experience in bankruptcy and reorganization matters and
their substantial bankruptcy and reorganization practice in the
Northern District of Texas.  The Debtors believe that Haynes and
Boone and its attorneys are fully qualified to work with White &
Case to deal effectively and efficiently with many of the
potential legal issues and problems that may arise in the context
of the Debtors' Chapter 11 cases.

The Debtors expect Haynes and Boone to:

    (a) take all necessary actions to protect and preserve the
        estates of the Debtors, including the prosecution of
        actions on the Debtors' behalf, the defense of any actions
        commenced against the Debtors, the negotiation of disputes
        in which the Debtors are involved, and the preparation of
        objections to claims filed against the Debtors' estates;

    (b) prepare, on the Debtors' behalf, all necessary motions,
        applications, answers, orders, reports, and papers in
        connection with the administration and prosecution of the
        Debtors' Chapter 11 cases;

    (c) assist the Debtors in connection with any proposed sale of
        assets pursuant to Section 363 of the Bankruptcy Code;

    (d) advise the Debtors in respect of bankruptcy, energy, real
        estate, regulatory, securities, labor law, intellectual
        property, licensing and tax matters or other services as
        requested; and

    (e) perform all other legal services in connection with these
        Chapter 11 cases.

Judith Elkin, Esq., a partner at Haynes and Boone, discloses that
the firm's partners, counsel and associates do not have any
connection with or any interest adverse to the Debtors, their
creditors, or any other party-in-interest.  In connection with
Haynes and Boone's representation of the Debtors, there are
certain interrelationships between and among the Debtors.
However, Ms. Elkin attests that these relationships do not pose
any conflict of interest in these Chapter 11 cases because of
their general unity of interest at all levels.

According to Ms. Elkin, Haynes and Boone received from the
Debtors a $300,000 retainer for services to be rendered and
expenses to be incurred in connection with their representation
of the Debtors in these Chapter 11 cases, plus Haynes and Boone
received from the Debtors pre-payment of the approximately
$100,000 filing fee to be incurred in the filing of these cases.
To the extent the filing fee prepayment exceeds the amount of the
actual filing fee, the balance will be added to the $300,000 case
retainer.

Compensation will be payable to Haynes and Boone on an hourly
basis, plus reimbursement of actual, necessary expenses incurred
by Haynes and Boone.  The primary Haynes and Boone attorneys and
paralegals who will represent the Debtors and their current
standard hourly rates are:

      Robin E. Phelan      Partner          $550
      Judith Elkin         Partner           495
      Ian T. Peck          Associate         245
      Meredyth A. Purdy    Associate         260
      Kim Morzak           Paralegal         160

These hourly rates are subject to periodic adjustments to reflect
economic and other conditions.  From time to time, other
attorneys and paralegals from Haynes and Boone may serve the
Debtors in connection with the matters for which Haynes and Boone
will be retained.

Haynes and Boone began performing services for the Debtors on
July 14, 2003. (Mirant Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


MORRIS PUBLISHING: S&P Assigns BB Speculative Grade Rating
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' corporate
credit rating to Morris Publishing Group LLC.

At the same time, Standard & Poor's assigned its 'BB' rating to
the company's planned $450 million senior secured credit
facilities. These bank loan facilities will consist of a $200
million 7-year revolving credit facility and $250 million 7.5-year
term loan. In addition, a 'B+' rating was assigned to the planned
$200 million senior subordinated notes due 2013 of Morris
Publishing and its subsidiary, co-issuer Morris Publishing Finance
Co. Proceeds will be used to repay Morris Publishing's existing
debt to holding company parent Morris Communications Co. LLC,
which will repay its existing credit facilities. The outlook is
stable for the Augusta, Georgia-headquartered media company. Pro
forma for the debt transactions, Morris Publishing will have about
$550 million of debt outstanding.

The ratings on Morris Publishing are based on the consolidated
credit quality of Morris Communications. Morris Publishing
operates 26 daily newspapers and accounts for the majority of
Morris Communications' revenues and cash flow.

"The company has significant debt levels, a moderate-size cash
flow base, and a concentration of revenues and cash flow at its
largest newspaper in Jacksonville, Florida," said Standard &
Poor's credit analyst Donald Wong. "In addition, Morris is subject
to the impact of the economy on advertising revenues and the
variability of newsprint prices. These factors are tempered by the
company's strong and geographically diverse newspaper market
positions," Mr. Wong said. This reflects newspaper operations
primarily in small and mid-sized communities located in Florida,
Georgia, Texas, Kansas, Nebraska, Oklahoma, Michigan, Missouri,
Alaska, Arkansas, South Dakota, Tennessee and South Carolina where
there is generally no meaningful competition from other
newspapers. The company has also historically been a free cash
flow generator and pro forma for the debt financings, there are no
meaningful debt maturities until the credit facilities mature.
Standard & Poor's does not expect any significant acquisitions and
that excess cash flow will be used primarily for debt reduction in
the intermediate term.


NAT'L CENTURY: Asks Court to Extend Plan Filing Time to Nov. 17
---------------------------------------------------------------
Charles M. Oellermann, Esq., at Jones, Day, Reavis & Pogue, in
Columbus, Ohio, reports that in close consultation with their
major creditor constituencies, National Century Financial
Enterprises, Inc., and its debtor-affiliates have made substantial
progress in executing the orderly wind-down and liquidation of
their estates, and are now turning to the process of resolving
these Chapter 11 cases.  During the first extension of their
exclusive periods, the Debtors have devoted their efforts in:

    (1) responding to the numerous bankruptcies filed by the
        Debtors' provider clients, including the negotiation of or
        litigation regarding issues like the cash collateral
        orders, DIP financing, asset sales and plan exclusivity
        extensions in the providers' cases, as well as the
        commencement of business negotiations in many of these
        cases;

    (2) negotiating, documenting, obtaining Court approval and
        consummating the sale of the Debtors' claims against
        Medshares, Inc. and its affiliates;

    (3) negotiating, documenting, obtaining Court approval and
        consummating the sale of substantially all of the Allied
        assets;

    (4) negotiating, documenting and consummating cash buyouts
        with several provider clients to terminate the business
        relationship with those entities;

    (5) continuing to respond to numerous formal and informal
        requests for relief from the automatic stay brought by
        providers and other creditors;

    (6) continuing to respond to motions to dismiss the NPF VI and
        NPF XII cases and conducting related discovery;

    (7) preserving the Debtors' interests in the proceeds of their
        director and officer liability insurance policies by
        opposing the Gulf Insurance Company's request to lift the
        automatic stay;

    (8) participating in litigation relating to the "true sale"
        nature of the purchase of the providers' accounts
        receivable by the Debtors;

    (9) obtaining renewed access to portions of the Debtors' books
        and records seized on November 16, 2002 by the FBI;

   (10) cooperating with the ongoing FBI and the SEC
        investigations of the Debtors' business activities prior
        to the Petition Date; and

   (11) negotiating, documenting, obtaining Court approval and
        consummating the sale of certain of the Debtors' remaining
        real estate properties.

Despite these achievements, Mr. Oellermann relates that much
remains to be done before the plan process can be completed in
these cases.  In the next 120 days, the Debtors intend to proceed
along four fronts, in close consultation with their creditor
constituencies, including the Creditors' Committee, the official
subcommittees and their counsel, to keep them informed of the
status of the Debtors' Chapter 11 cases and to cooperate in
continuing to execute an action plan to maximize value for the
Debtors' stakeholders:

A. First Phase

    The Debtors will continue the controlled wind down of their
    operations, taking appropriate steps to preserve and maximize
    the value of their assets by collecting their remaining
    purchased accounts receivable and selling unnecessary assets.
    As part of this process, the Debtors will continue to evaluate
    their operations and take steps to retain those employees
    necessary to accomplish the remaining tasks of the business
    wind down, while eliminating those positions that are no
    longer needed.

B. Second Phase

    The Debtors will continue to devote efforts to maximizing
    the estates' recoveries on the Debtors' claims against their
    provider clients, including those that have filed for
    bankruptcy and those that have not.  The Debtors intend to
    continue to negotiate cash buyout transactions with as many
    non-bankrupt providers as possible.  The Debtors also intend
    to assert vigorously their rights as creditors in providers'
    bankruptcies and, where appropriate, to negotiate consensual
    arrangements regarding the use of cash collateral, replacement
    financing or the treatment of the Debtors' claims.  The
    Debtors are actively negotiating the terms of their recoveries
    in many of these cases.

C. Third Phase

    The Debtors intend to advance the plan process in these cases
    by:

    -- continuing negotiations with their creditor constituencies
       regarding a liquidation plan and the documentation of that
       plan;

    -- pursuing vigorously the claim reconciliation process in
       these cases; and

    -- filing claim objections, including objections to provider
       claims.

    Making substantial progress in the claims reconciliation and
    objection process will be necessary for the plan process to
    advance in an orderly fashion.

D. Fourth Phase

    The Debtors intend to go forward with their efforts, with the
    assistance of Gibbs law firm to investigate the events leading
    to the collapse of the Debtors' business and pursue estate
    claims against third parties, including the Debtors' founders
    and certain of the Debtors' prepetition advisors and
    professionals.  The Debtors anticipate that causes of action
    may be commenced against certain of these parties.

Therefore, to permit the orderly implementation of this well-
defined action plan in the coming months, the Debtors ask the
Court to extend their Exclusive Periods by four months.
Specifically, the Debtors want:

    -- an extension of the Exclusive Filing Period through and
       including November 17, 2003 and

    -- an extension of the Exclusive Solicitation Period through
       and including January 16, 2004.

Mr. Oellermann asserts that an extension of the Debtors'
Exclusive Periods is warranted because:

    (a) the Debtors' cases are large and complex;

    (b) the Debtors have made substantial progress in winding
        down their business operations, liquidating the assets of
        these estates, commencing the plan process and numerous
        other tasks necessary for the progress of these cases; and

    (c) it will not harm the Debtors' creditors or other
        parties-in-interests but would rather permit the plan
        process to move forward in an orderly fashion.

                          *    *    *

The Court will convene a hearing on August 6, 2003 to consider
the Debtors' request.  Accordingly, Judge Calhoun extends the
Debtors' Exclusive Filing Period until the conclusion of that
hearing. (National Century Bankruptcy News, Issue No. 20;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


NEXT GENERATION: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Next Generation Technology Holdings, Inc.
        33 City Center Drive, Suite 364
        Mississauga, Ontario L5B2N5
        Canada
        fka Delicious Brands, Inc.

Bankruptcy Case No.: 03-14711

Type of Business: Investment company

Chapter 11 Petition Date: July 24, 2003

Court: Southern District of New York (Manhattan)

Judge: Prudence Carter Beatty

Debtor's Counsel: Jonathan S. Pasternak, Esq.
                  Rattet, Pasternak & Gordon Oliver, LLP
                  550 Mamaroneck Avenue
                  Suite 510
                  Harrison, NY 10528
                  Tel: 914-381-7400
                  Fax: 914-381-7406

Estimated Assets: $1 Million to $10 Million

Estimated Debts: $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                                            Claim Amount
------                                            ------------
Pete's Bakery, LLC                                    $990,000
1450 Pate Plaza Drive
South Beloit, Illinois 61080

Sunshine Biscuit Co.                                  $452,570
677 North Larch Avenue
Elmhurst, Illinois 60126

Piper, Marbury, Rudnick & Wolf                        $193,620

Donald Schmitt                                        $121,260

Icahn Associates Corp.                                $117,942

Marcum & Kliegman, LLP                                 $28,000

News America FSI, Inc.                                 $22,772

Premium Financing Specialists, Inc.                    $19,174

VIX/Drug Emporium                                      $16,296

BDO Dunwoody, LLP                                      $15,479

Wilson Farms                                           $12,000

Commercial Bakeries Corp.                              $11,997

Retail Impact Services                                  $5,310

Marinucci & Company                                     $5,000

MBC Foods, Inc.                                         $4,625

CG Biscuit Company                                      $3,948

Brunner                                                 $2,800

Continental Stock Transfer                              $1,909

Power Budd, LLP                                           $248

Toledo Group                                              $180


NORTEL NETWORKS: Second Quarter 2003 Net Loss Tops $14 Million
--------------------------------------------------------------
Nortel Networks Corporation (NYSE:NT)(TSX:NT):

-- Revenues: US$2.33 billion, down sequentially approximately 3%

-- Net loss of US$14 million; US$0.00 per common share

-- Strong cash balance of US$4.2 billion, up sequentially
   approximately US$0.2 billion

Nortel Networks Corporation (NYSE:NT)(TSX:NT) reported results for
the second quarter and the first six months of 2003 prepared in
accordance with United States generally accepted accounting
principles.

Second Quarter 2003 Results

Revenues were US$2.33 billion for the second quarter of 2003
compared to US$2.40 billion for the first quarter of 2003 and
US$2.77 billion for the second quarter of 2002. Nortel Networks
reported a net loss in the second quarter of 2003 of US$14
million, or US$0.00 per common share, compared to net earnings of
US$54 million, or US$0.01 per common share, in the first quarter
of 2003 and a net loss of US$697 million, or US$0.20 per common
share, in the second quarter of 2002.

Net loss in the second quarter of 2003 included an aggregate of
US$37 million (net of tax) for the amortization of acquired
technology and deferred stock option compensation associated with
acquisitions and US$5 million of special charges for
restructuring. The company's results also included a benefit of
approximately US$51 million (pre-tax) related to the reduction in
provisions associated with the collection in the quarter of
certain customer financing receivables.

"Our second quarter results reflected the continued cautious
spending exhibited by our customers," said Frank Dunn, president
and chief executive officer, Nortel Networks. "Although the
industry conditions remained difficult, our momentum and
leadership position continued across our key focus areas. We
continued to engage and create value for our customers, focusing
on the growth opportunities and leveraging our technology and
solutions leadership."

Highlights of some of Nortel Networks recent announcements across
its focus areas included:

Wireless Data

-- Continued momentum of Nortel Networks GSM, GPRS and Enhanced
Data Rates for GSM Evolution (EDGE) solutions in North America
with the announcement of a four-year agreement estimated to be
worth US$300 million with T-Mobile USA as well as a Cingular
Wireless contract for Home Location Register (HLR); and

-- Growth in the deployment of CDMA2000 1X solutions with the
commercial launch by Midwest Wireless of its first phase 3G CDMA
1X network.

Voice over Packet

-- Continued to demonstrate success across the service provider
Voice over IP (VoIP) market with the deployment of a fully
featured VoIP network for cable operator Cox Communications and a
long distance VoIP network for MCI and the first major local
service commercial launch of VoIP service with Sprint; and

-- Established top position in global IP line shipments with 22
percent market share in the first quarter of 2003, as reported by
Dell'Oro Group.

Multimedia Services and Applications

-- Contract with SaskTel to support its plans to become the
world's first provider to deploy Advanced Multimedia and Packet
Voice Services using Nortel Networks Multimedia Communications
Portfolio and Succession VoIP equipment enabling unified
communications capabilities across multiple media and devices;

-- Contracts to provide secure broadband Internet access, IP-VPNs
and other IP services across a five province network for China
Netcom, China Railcom and China Telecom, based on Shasta 5000
Broadband Service Node and Passport 15000; and

-- Deployment of Visitor-Based Networking (VBN) solution enabling
hospitality operator Mandalay Resort Group to offer customizable
wired and wireless access based on Nortel Networks fully
interoperable portfolio of IP switches and WLAN devices.

Broadband Networking

-- Ongoing leadership in packet networks with Cincinnati Bell
Wireless GSM and GPRS core wireless data network and multiservice
broadband network in The Netherlands for Orange NL;

-- First deployments of Passport 20000 core multiservice
switching platforms in the Caribbean and Latin America region
with Cable & Wireless Jamaica and Dominican Republic's CODETEL;

-- Two contracts with British Telecom (BT) to deploy OPTera Metro
5200 Multiservice platform for storage area network (SAN)
connectivity services and OPTera Connect HDX optical switches in
BT's pan-European networks;

-- Contract to enable NTT Communications to provide fiber channel
leased line service for the disaster recovery market and leased
broadband network infrastructure for enterprise customers based
on OPTera Metro 5200 DWDM; and

-- University of Texas at Austin and School District of
Philadelphia to deploy multimedia and enhanced educational
applications based on the enriched OPTera Metro 5000 multiservice
platform, leveraging Fiber Availability Service and
standards-compliant Coarse Wavelength Division Multiplexing
(CWDM).

"I am pleased that our business model performed well in this
challenging market," said Doug Beatty, chief financial officer,
Nortel Networks. "Going forward, we will continue to manage each
of our businesses based on individual performance and market
opportunities."

Outlook

Frank Dunn said, "I am encouraged, based on our customer
engagement and their support for our solutions, in our ability to
improve our market position going forward. Given the ongoing
global economic pressures and industry conditions, we will
continue to manage our business cautiously in the near term."

Consistent with last quarter, Nortel Networks is not providing
any specific revenue or earnings guidance at this time.

Breakdown of Second Quarter 2003 Revenues

Revenues by segment

Compared to the first quarter of 2003, Wireless Networks revenues
increased 4 percent, Enterprise Networks revenues decreased 11
percent, Wireline Networks revenues decreased 12 percent and
Optical Networks revenues increased 10 percent. Compared to the
second quarter of 2002, Wireless Networks revenues decreased 12
percent, Enterprise Networks revenues decreased 14 percent,
Wireline Networks revenues decreased 16 percent and Optical
Networks revenues decreased 27 percent.

Revenues by geographic region

Compared to the first quarter of 2003, the United States
decreased 5 percent, the Europe, Middle East and Africa region
(EMEA) decreased 9 percent, Canada increased 6 percent and Other
increased 10 percent. Compared to the second quarter of 2002, the
United States decreased 24 percent, Canada decreased 31 percent
and EMEA decreased 8 percent while Other increased 4 percent.

Gross margin

Gross margin was 43.7 percent of sales in the second quarter of
2003, up from 42.9 percent in the first quarter of 2003, and 34.5
percent in the second quarter of 2002.

Expenses

Selling, general and administrative expenses were US$416 million
in the second quarter of 2003, which included a benefit of
approximately US$51 million related to the reduction in
provisions associated with the collection in the quarter of
certain customer financing receivables. Including this benefit,
SG&A expenses were down approximately US$71 million compared to
the first quarter of 2003 and approximately US$351 million
compared to the second quarter of 2002.

Research and development expenses were US$479 million in the
second quarter of 2003, compared to US$489 million for the first
quarter of 2003 and US$579 million for the second quarter of
2002.

Six-Month Results

For the first half of 2003, revenues from continuing operations
were US$4.73 billion compared to US$5.69 billion for the same
period in 2002. Nortel Networks reported net earnings of US$40
million, or US$0.01 per common share for the first half of 2003,
compared to a net loss of US$1.54 billion, or US$0.46 per common
share, in the first six months of 2002. These results included
US$190 million of net earnings from discontinued operations - net
of tax; US$139 million of special charges for restructuring; and
an aggregate of US$73 million (net of tax) for the amortization
of acquired technology and deferred stock option compensation
associated with acquisitions.

Other Matters

Given in 2003 relatively minor amounts may have greater effect on
reported results, the Company has initiated a comprehensive
review and analysis of its assets and liabilities. The outcome of
the activity may result in the elimination of certain assets and
liabilities but is not expected to have a negative impact to net
assets. No amounts relating to the elimination of any such assets
and liabilities have been included in the results for the second
quarter of 2003.

Nortel Networks is an industry leader and innovator focused on
transforming how the world communicates and exchanges
information. The company is supplying its service provider and
enterprise customers with communications technology and
infrastructure to enable value-added IP data, voice and
multimedia services spanning Wireless Networks, Enterprise
Networks, Wireline Networks, and Optical Networks. As a global
company, Nortel Networks does business in more than 150
countries. This press release and more information about Nortel
Networks can be found on the Web at http://www.nortelnetworks.com

                        *   *   *

As previously reported, Moody's Investors Service lowered the
senior secured and senior implied ratings on the securities of
Nortel Networks Corp., and its subsidiaries to B3 and Caa3 from
Ba3 and B3 respectively.


PANAVISION INC: S&P Ratchets Junk Corp. Credit Rating Up a Notch
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Panavision Inc. to 'B-' from 'CCC'.

At the same time, Standard & Poor's assigned its 'B-' rating to
the company's proposed $20 million senior secured revolving credit
facility due 2005 and its proposed Rule 144A $275 million senior
secured notes due 2008. Proceeds from the proposed notes will be
used to retire Panavision's existing bank debt. The outlook is
stable. Woodland Hills, California-based Panavision is the leading
designer and manufacturer of high-quality camera systems. On a pro
forma basis, the company will have about $350 million in debt.

"The rating actions reflect the improvement in Panavision's
capital and maturity structure that would result from the
refinancing," according to Standard & Poor's credit analyst Steve
Wilkinson. He continued, "The proposed capital structure would
eliminate the risk of a near-term default by deferring until 2008
more than $230 million in maturities that are due in 2003 and
2004. In addition, access to liquidity should improve with the
new revolving credit facility and an increase in the line of
credit provided by its parent company, Mafco Holdings Inc. The
maturity of the parent company facility will also be extended to
2006. At closing, the bank facility is expected to be undrawn and
the parent company line will have a draw of about $3.5 million."

Panavision should have sufficient resources to meet its short- to
intermediate-term needs, absent any unfavorable shift in industry
demand or its competitive position. Ratings could be lowered if
the company's limited liquidity deteriorates or if it does not
successfully refinance its subordinated bonds before the first
half of 2005.


PG&E NATIONAL: Wants to Pull Plug on Three Tolling Agreements
-------------------------------------------------------------
As of the Petition Date, PG&E Energy Trading - Power, L.P. is the
non-owner party to three electricity tolling agreements:

    1. Dependable Capacity and Conversion Services Agreement dated
       June 1, 2000 with Southaven Power, LLC at Charlotte, North
       Carolina;

    2. Dependable Capacity and Conversion Services Agreement dated
       September 20, 2000 with Caledonia Generating at Charlotte,
       North Carolina; and

    3. Tolling Agreement with Liberty Electric Power, LLC at
       Herndon, Virginia dated April 14, 2000.

An electricity tolling agreement, generally, is an agreement that
allows a non-owner of a generating facility to provide a
specified amount of fuel to operate that facility and then take
the electricity generated by it.  In exchange for converting the
non-owner's fuel into electricity, the facility owner is paid a
"tolling fee" based upon a contractually predetermined price.
The non-owner party to the agreement benefits by securing the
ability to run its fuel through the facility and then control the
related electricity generation output without incurring the
capital expense of owning the generating facility.  The facility
owner, on the other hand, benefits from the counter-party's fee
for operating the facility, without regard to the full price paid
or the revenues received by that counter-party for the
electricity generated by the facility.  The tolling agreement
protects the facility owner from the vicissitude of what has in
recent years become a very volatile energy market.

According to Paul M. Nussbaum, Esq., at Whiteford, Taylor &
Preston LLP, in Baltimore, Maryland, the ET Power Agreements are
long-term contracts, with varying terms from 20 to 25 years.  The
tolling fee paid by the NEG Debtors to the plant owners is fixed,
subject to an escalation clause tied in part to inflation.  Given
the expected growth in demand for electricity in the long term,
the Agreements were projected to be profitable for the Debtors in
later years.  In the short term, however, a decline in
electricity demand and prices coupled with an increase on fuel
prices has made the Agreements unprofitable.  The monthly
payments required under the Agreements represent an enormous
drain on the NEG Debtors' cash.  Accordingly, the NEG debtors
want to walk away from the Tolling Agreements.

Mr. Nussbaum notes that two of the Agreements were properly
terminated before the Petition Date.  In November 2002, ET Power
declared Southaven and Caledonia to be in default under the
Agreements because of their failure to meet interconnection and
delivery of power obligations.  After Southaven and Caledonia
failed to cure the breach, ET Power gave notice of termination of
the Agreements in February 2003.  Southaven and Caledonia
contested the termination and obtained a state court order
compelling ET Power to continue performing under the Agreements.
The Debtors are awaiting a decision from the Maryland Court of
Appeals on the propriety of the issuance of the order.  In June
2003, ET Power declared a further default after Southaven and
Caledonia failed to post $50,000,000 in letters of credit in
accordance with the Agreements. (PG&E National Bankruptcy News,
Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-0900)


PIONEER-STANDARD: Fiscal Q1 Net Loss Peters Out to $1.5 Million
---------------------------------------------------------------
Pioneer-Standard Electronics, Inc., (Nasdaq: PIOS) announced
fiscal 2004 first-quarter sales of $280 million, an increase of
2.3 percent compared with first-quarter sales of $273 million last
year. For the first quarter ended June 30, 2003, the Company
reported a net loss of $1.5 million, compared with a net loss of
$34 million in first quarter fiscal 2003. The Company's guidance
for fiscal 2004 first quarter, issued on May 13, 2003, anticipated
break-even to a loss of $0.05 per share for the quarter.

Last year's first-quarter net loss included a charge of $34.8
million, net of tax related to the adoption of Statement of
Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets." The charge was recorded as a cumulative effect
of change in accounting principle.

First-quarter operating income was $2.8 million, a 22 percent
increase over $2.3 million for the first quarter last year.
Included in fiscal 2004 first-quarter operating income are
restructuring charges of approximately $463,000 related to
facilities and other costs associated with the continuation of the
Company's fiscal 2003 reorganization.

"I am very pleased with the progress we have made in our initial
quarter as a stand-alone enterprise computer solutions company,
particularly in light of the difficult economic environment," said
Arthur Rhein, chairman, president and chief executive officer.
"Following the divestiture of our electronic components business,
we were able to grow sales, reduce costs and significantly improve
operating income."

The Company reported a loss from continuing operations of
$708,000, net of tax in first quarter fiscal 2004, compared with
$1.5 million, in the first quarter last year. The Company also
reported a loss from discontinued operations of $749,000, net of
tax, related to activities associated with the divestiture of the
Company's electronic components distribution business.

                        Business Outlook

"Although our second quarter is generally our weakest, typically
down from the first quarter, we expect fiscal 2004 second-quarter
sales to be about the same level as the first quarter," said
Rhein. "We continue to expect the second half of fiscal 2004 to be
substantially stronger than the first half, which is consistent
with historical trends."

Consistent with the guidance provided on May 13, 2003, revenue is
expected to grow between 3 percent and 6 percent for the fiscal
year ending March 31, 2004. For fiscal 2004, gross margin is
expected to approximate 13 percent and selling, general and
administrative expenses are anticipated to be 10.5 percent to 11.0
percent of sales.

Subsequent to June 30, 2003, the Company purchased an additional
$28.0 million of its 9.5 percent senior notes, at approximately
111.66 percent of face value. The premium was approximately $3.3
million and will be reported in second-quarter 2004 results. In
addition, interest expense is now expected to be approximately
$8.7 million for fiscal 2004. Previously, the Company anticipated
interest expense of approximately $10.0 million for the year.

The net after tax impact of the senior note repurchase will
decrease net income by approximately $1.2 million, or $0.04 per
share for the year. The Company, therefore, now anticipates net
income of $0.11 to $0.16 per share for fiscal 2004, excluding the
impact of any further debt reductions.

"As we execute our plan to grow Pioneer-Standard, our focus is to
be the best at driving the adoption of enterprise computer
solutions to satisfy the business needs of our customers," Rhein
said. "We also intend to deliver industry-leading financial
results, including improving our return on capital and reducing
our debt, to benefit the Company and our shareholders over the
long term."

Pioneer-Standard Electronics, Inc. is one of the foremost
distributors and premier resellers of enterprise computer
technology solutions from HP, IBM and Oracle, as well as other
leading manufacturers. The Company has a proven track record of
delivering complex servers, software, storage and services to
resellers and corporate customers across a diverse set of
industries. Headquartered in Cleveland, Ohio, Pioneer-Standard has
sales offices throughout the U.S. and Canada. For more
information, visit the Company's Web site at
http://www.pioneerstandard.com

As reported in Troubled Company Reporter's May 29, 2003 edition,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Pioneer-Standard Electronics Inc., to 'B+' from 'BB-'
and removed it from CreditWatch, where it had been placed on
Jan. 14, 2003. The downgrade reflected a narrower business base,
the expectation of weak profitability measures in the near term,
and the expectation of a more acquisitive growth strategy.

At the same time, Standard & Poor's assigned its 'B+' rating to
Pioneer-Standard's $110 million senior unsecured revolving credit
facility maturing April 2006.


PREMCOR INC: Second Quarter 2003 Results Enter Positive Zone
------------------------------------------------------------
Premcor Inc. (NYSE: PCO) reported net income from continuing
operations before special items of $37.2 million, or $.50 per
share, for its second quarter ended June 30, 2003, compared to a
net loss from continuing operations before special items of $17.3
million, or $.35 per share, in the second quarter of 2002.

Special items for the second quarter of 2003 included a $3.4
million pretax loss on the early retirement of long-term debt and
a pretax charge of $0.7 million related to the planned relocation
of the company's St. Louis general office to its Connecticut
headquarters. In the second quarter of 2002, pretax special items
included losses of $19.3 million related to the early retirement
of long-term debt, $6.5 million related to the restructuring of
the company's St. Louis general and administrative operations,
$6.2 million related to the closure of the Hartford, Illinois
refinery, $2.5 million related to the restructuring of the
company's Sabine River Holdings Corp. subsidiary, and $1.4 million
for idled equipment.

For the six months ended June 30, 2003, Premcor reported net
income from continuing operations before special items of $92.6
million, or $1.28 per share, compared to a net loss from
continuing operations before special items of $29.7 million, or
$.74 per share, for the first six months of 2002.

For the first six months of 2003, pretax special items included a
loss of $16.6 million related to the expected disposition of the
company's Hartford, Illinois refinery assets, a loss of $10.4
million on the early retirement of debt, a $1.6 million reduction
in the corporate office restructuring reserve established in 2002,
and a loss of $0.7 million related to the planned relocation of
the St. Louis office. The pretax special items for the first six
months of 2002 included losses of $137.4 million related to the
closure of the Hartford refinery, $19.3 million related to the
early retirement of long- term debt, $17.3 million related to the
restructuring of the St. Louis general and administrative
operations, $2.5 million related to the Sabine restructuring, and
$1.4 million for idled equipment.

In addition to the special items, in the second quarter and first
six months of 2003, Premcor had an after-tax loss from
discontinued operations of $2.2 million and $6.5 million,
respectively, related to certain retail lease obligations
resulting from the bankruptcy of the purchaser of the company's
former retail operations. There were no results from discontinued
operations in either prior-year period. Including the effect of
the special items and the loss from discontinued operations,
Premcor reported net income of $32.3 million, or $.43 per share,
for the second quarter of 2003, compared to a net loss of $40.1
million, or $.82 per share, for the second quarter of 2002.
Including the effect of the special items and the loss from
discontinued operations, for the first six months of 2003, Premcor
reported net income of $69.8 million, or $.97 per share, compared
to a net loss of $139.8 million, or $3.47 per share, during the
first six months of 2002.

Premcor's results include pretax stock-based compensation expense
of $4.4 million, or $.04 per share after-tax, and $3.8 million, or
$.05 per share after-tax, for the second quarter of 2003 and 2002,
respectively. Premcor remains one of the few major U.S.
independent refiners that currently expense this non-cash
compensation item. Absent the stock-based compensation expense,
Premcor's second quarter net income from continuing operations,
excluding special items, would have been $.54 per share and a net
loss of $.30 per share in 2003 and 2002, respectively.

Thomas D. O'Malley, Premcor's Chairman and Chief Executive
Officer, said, "Premcor's second quarter results were acceptable
in light of the weakening industry conditions as the quarter
progressed. Refining margins and light- heavy crude oil
differentials fell during the period from their strong first
quarter levels. Weak industry conditions in June pushed our
results to the low end of our expectations. Cool wet weather,
particularly in the Northeast, continued to dampen demand for
gasoline. The first six months of 2003, according to the API,
represented the first six-month decline in average U.S. gasoline
consumption in the last twelve years.

"On the expense side, Premcor's second quarter earnings were once
again reduced by high prices for natural gas, an important fuel
for complex refiners. Our average cost for natural gas for the
first half of 2003 was $5.84 per mmbtu, compared to less than
$3.00 per mmbtu for the first half of last year. Premcor has
historically consumed approximately 29 million mmbtu of natural
gas annually, but we have taken steps to significantly reduce our
usage of this expensive fuel through the use of internally
produced fuels and other measures. These steps have partially
mitigated the financial impact of higher prices in the first half
of the year and we will continue to take appropriate action to
minimize the impact of high natural gas prices on our financial
results going forward.

"Our refineries continued to operate well during the second
quarter. In particular, I am pleased to say that the Memphis
refinery met all of our operating and financial expectations
during its first full quarter under Premcor's ownership. Port
Arthur ran extremely well, averaging over 245,000 barrels per day
during the quarter. Lima fell short of its expected throughput due
to minor unscheduled maintenance during the period. Going forward,
Port Arthur has scheduled maintenance in the third quarter as we
begin our announced expansion project there with a turnaround and
expansion of the hydrocracker. Memphis and Lima have no major
scheduled maintenance during the third quarter.

"During the second quarter, Premcor took advantage of the
historically low interest rate environment to raise $300 million
in twelve year 7-1/2% senior unsecured debt at Premcor Refining
Group. We intend to use the proceeds for capital projects,
including the Port Arthur expansion that begins this quarter, as
well as other corporate purposes. We continued to improve the
company's capital structure and lower its cost of capital by
retiring $14.7 million of Port Arthur Coker Company's 12-1/2%
notes, and by eliminating a high-cost third party crude oil
linefill arrangement through the purchase of the $80 million of
crude oil pipeline inventory needed to operate Lima. We ended the
quarter with $518.8 million in cash, and now are in a secure
position to complete our clean fuel investments and Port Arthur
expansion over the next three years with no additional financing.

"On the subject of clean fuel, we are pleased that our estimated
spending requirements to make the new clean fuels are dropping.
Our engineers continue to examine all technological alternatives,
explore the synergies of our changing collection of assets, and
refine our capital investment plan accordingly. We now estimate
our total capital investment for Tier II gasoline at $310 million,
down from our earlier $335 million estimate. The clean gasoline
upgrade at Port Arthur will be completed well under its original
budget and in production prior to year-end, with Memphis to follow
in early 2004 and Lima by the end of 2005. Our investment to make
ultra low- sulfur diesel fuel by 2006, previously estimated at
$347 million, is now estimated at $330 million. These reductions,
combined with the timing flexibility that the addition of the
Memphis refinery to our corporate pool has given us, provide a
meaningful improvement to Premcor's cash flow over the next few
years. We hope to further reduce the investment necessary to make
clean fuels."

Looking ahead, O'Malley said, "The Gulf Coast 2/1/1 crack spread
has improved for the month of July to-date versus its second
quarter average, but Chicago refining margins and light-heavy
crude oil differentials are lower. Inventory levels for oil
products suggest that we will see an improvement going forward. If
the economy improves, as expected, we believe Premcor will benefit
from increased consumption."

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

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

The outlook was revised to negative from stable.


QUAIL PIPING: Hires Tactical Solutions as Turnaround Consultant
---------------------------------------------------------------
Quail Piping Products, Inc., asks for permission from the U.S.
Bankruptcy Court for the Northern District of Texas to retain
Tactical Solutions, LLC as its Turnaround Management Consultants.

The Debtor tells the Court that it needs the services of Tactical
Solutions to:

     i) stabilize its operations;

    ii) manage and conserve its cash;

   iii) maintain relations with the Debtor's senior secured
        lender; and

    iv) assist the Debtor in marketing and selling its business.

With the assistance of Tactical Solutions and its principal,
Patrick J. Furnari, the Debtor believes that it will be better
positioned to successfully consummate the sale of its assets and
generate a meaningful distribution to its creditors.

Additionally, the Debtor seeks to employ Tactical Solutions to
provide it with ongoing financial consulting services and
assistance with its efforts to market and sale its business
operations.

The Debtor reports that in consideration of its services to the
Debtor for the months of July and August 2003, Tactical Solutions
has agreed to accept a fixed fee of $25,000 per month plus a
success fee equal to 5% of any consideration paid to the Debtor in
connection with a sale of substantially all of the Debtor's
assets, but only to the extent that that consideration exceeds the
consideration proposed to be paid by J-M Manufacturing, Inc.

Quail Piping Products, Inc., headquartered in Wichita Falls,
Texas, manufactures pressure pipes and corrugated pipes. The
Company filed for chapter 11 protection on July 15, 2003 (Bankr.
N.D. Tex. Case No. 03-70583).  Charles A. Dale, III, Esq., at
Gadsby Hannah, LLP, represents the Debtor in its restructuring
efforts.  When the Company filed for protection from its
creditors, it listed estimated debts and assets of over $10
million each.


QUANTUM CORP: S&P Rates Proposed Sub. Convertible Bond at B
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' corporate
credit and senior unsecured ratings on Quantum Corp. and assigned
a 'B' rating to Quantum's proposed $175 million subordinated
convertible bond. The outlook is stable. Quantum had $288 million
of debt outstanding as of June 30, 2003.

Milpitas, California-based Quantum is a leading designer and
manufacturer of tape-based storage drives and systems as well as
tape media.

Proceeds from the bond offering, along with cash on the balance
sheet, will be used to redeem Quantum's portion of the $288
million of subordinated convertible bonds due August 2004, which
amounts to approximately $192 million. Quantum also expects to
redeem the remaining $96 million of the existing bonds that are
backed by a receivable from Maxtor Corp. (unrated). Following the
offering and the Maxtor contribution, Quantum is expected to have
approximately $176 million of debt outstanding.

"We expect that, despite recent setbacks, profitability will
improve and that adequate balance sheet liquidity will continue to
provide ratings support," said Standard & Poor's credit analyst
Joshua Davis.


READ-RITE: Court Approves Sale of All Assets to Western Digital
---------------------------------------------------------------
Western Digital Corp. (NYSE: WDC) announced that the bankruptcy
court presiding over the assets of Read-Rite Corp., approved the
sale to Western Digital of substantially all of the assets of
Read-Rite Corp., including its wafer fabrication operation in
Fremont, Calif. and an option to purchase its operations in
Thailand. The assets are being acquired for cash consideration of
approximately $95.4 million. The Thailand operations have un-
negotiated debt obligations of approximately $62 million. Western
Digital said it intends to fund the acquisition through working
capital. The transaction is expected to close within 10 days,
subject to the terms of the sale order issued by the bankruptcy
court.

Western Digital indicated that the planned acquisition is aimed at
improving its access to recording head technologies over the long
term and increasing its operational flexibility. In the near term,
the company has secured adequate supply of recording heads for the
foreseeable future, including 80 GB technology, from merchant
market suppliers.

Western Digital, one of the storage industry's pioneers and long-
time leaders, provides products and services for people and
organizations that collect, manage and use digital information.
The company produces reliable, high-performance hard drives that
keep users' data close-at-hand and secure from loss.

Western Digital was founded in 1970. The company's storage
products are marketed to leading systems manufacturers and
selected resellers under the Western Digital brand name. Visit the
Investor section of the company's Web site --
http://www.westerndigital.com-- to access a variety of financial
and investor information.


ROSSBOROUGH REMACOR: Bringing-In Arter & Hadden as Attorneys
------------------------------------------------------------
Rossborough-Remacor, LLC, seeks approval from the U.S. Bankruptcy
Court for the Northern District of Ohio of its application to
retain and employ Arter & Hadden LLP as Counsel.

Arter & Hadden is one of the largest law firms in the City of
Cleveland, with a national practice, and has experience in all
aspects of the law that may arise in this chapter 11 case.
Additionally, the firm is also intimately familiar with the
Debtor's business, having rendered a variety of services since
March 1986.  Hence, the Debtor believes that Arter & Hadden is
well-qualified to represent the Debtor in this case.

In this retention, the Debtor expects Arter & Hadden to:

     a) advise the Company of its rights, powers and duties as
        debtor and debtor-in-possession continuing to operate
        and manage its business and properties under Chapter 11
        of the Bankruptcy Code;

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

     c) advise the Company concerning and prepare responses to,
        applications, motions, other pleadings, notices and
        other papers that may be filed and served in this
        Chapter 11 case;

     d) advise the Company regarding its ability to initiate
        actions to collect and recover property for the benefit
        of the estate;

     e) advise and assist the Company in connection with the
        formulation, negotiation and promulgation of a plan of
        reorganization, an accompanying disclosure statement and
        any related documents;

     f) advise and assist the Company in connection with any
        potential property disposition;

     g) advise the Company concerning executory contracts and
        unexpired lease assumptions, assignments and rejections
        and lease restructuring and re-characterization;

     h) assist the Company in reviewing, estimating and
        resolving claims asserted against the bankruptcy estate;

     i) commence and conduct any and all litigation necessary or
        appropriate to assert rights held by the Company,
        protect assets of the Company's Chapter 11 estate, or
        otherwise further the goal of completing the Company's
        successful reorganization;

     j) provide general corporate, employee benefits, litigation
        and other non-bankruptcy services for the Company to the
        extent that A&H provided such services prior to the
        Petition date or as requested by the Company; and

     k) perform all other necessary or appropriate legal
        services in connection with this Chapter 11 case for or
        on behalf of the Company in connection with any
        bankruptcy proceeding initiated by or against the
        Company.

Diana M. Thimmig, Esq., a partner of Arter & Hadden, discloses the
hourly rates of professionals in her firm:

          Michael Bertsch    Partner     $260 per hour
          Henry Billingsley  Partner     $325 per hour
          Nicole Braden      Associate   $180 per hour
          John Doheny        Partner     $305 per hour
          Michael Elliott    Partner     $340 per hour
          Rob Hanna          Partner     $295 per hour
          Kim Huff           Associate   $185 per hour
          Joseph Leonti      Associate   $195 per hour
          Tim Manning        Associate   $250 per hour
          Keith Raker        Associate   $260 per hour
          Alan Ross          Partner     $410 per hour
          Diana Thimmig      Partner     $310 per hour
          Nick York          Partner     $250 per hour

Rossborough-Remacor, LLC, headquartered in Avon Lake, Ohio, is a
producer of additives used to deoxidize, desulfurize and condition
steel slag.  The Company filed for chapter 11 protection on June
18, 2003 (Bankr. N.D. Ohio Case No. 03-18020).  Diana M. Thimmig,
Esq., at Arter & Hadden LLP represents the Debtor in its
restructuring efforts.  When the Company filed for protection from
its creditors, it listed $18,709,681 in total assets and
$22,644,854 in total debts.


SAFETY-KLEEN: Obtains Clearance for South Carolina DHEC Pact
------------------------------------------------------------
The Safety-Kleen Debtors sought and obtained Judge Walsh's
permission to enter into and make a payment under an Interim
Agreement and Stipulated Order between the Debtors and The South
Carolina Department of Health and Environmental Control, to obtain
the assignment and release of various claims DHEC has or may have
against Laidlaw, Inc., or any of its subsidiaries or affiliates.

Safety-Kleen (Pinewood), Inc., operated a hazardous waste
treatment, storage and disposal facility and a hazardous waste
landfill in Sumter County, South Carolina.  On March 21, 1994,
DHEC issued a final permit to Safety-Kleen Pinewood, which allowed
SK Pinewood to operate the Pinewood Facility and required SK
Pinewood to maintain certain financial assurances for closure,
post-closure and liability coverage for the Pinewood Facility.

As a result of DHEC's orders, SK Pinewood has ceased accepting and
no longer accepts waste for treatment, storage or disposal at the
Pinewood Facility.  DHEC has asserted that SK Pinewood and other
Debtors are responsible for undertaking closure and post-closure
care activities at the Pinewood facility.  DHEC also asserted that
it should be allowed an administrative expense claim for
$111,477,474 to be used towards any necessary remediation of any
releases of hazardous constituents from the Pinewood Facility
during the 100 years following closure of that facility.

On October 15, 2002, following lengthy and complex negotiations,
the Debtors and DHEC entered into a settlement agreement resolving
DHEC's claims with respect to the Pinewood Facility.  The DHEC
Settlement Agreement is incorporated into the Plan, which
provides, among other things, that to the extent necessary, the
Plan constitutes a motion for approval of the Settlement
Agreement.  Under the Plan and pursuant to the terms of the DHEC
Settlement Agreement, certain things will occur on the Effective
Date in full satisfaction, settlement, release and discharge of
and in exchange for the Allowed DHEC's Administrative Claim:

        (a) SK Pinewood will transfer the Pinewood Facility and
            related personal property, including vehicles,
            machines, equipment and supplies, located at the
            Pinewood Facility to the Pinewood Site Trust;

        (b) The Debtors will:

              (i) pay $13,162,768 -- subject to adjustment for
                  work performed prior to the Effective Date and
                  for certain administrative costs of the Pinewood
                  Site Trust -- to the Pinewood Site Trust, and

             (ii) transfer to the Pinewood Site Trust ownership of
                  a single-payment, fully guaranteed annuity,
                  which will pay out $133,000,000 -- subject to
                  adjustment for certain administrative costs of
                  the Pinewood Site Trust -- over the next 100
                  years;

        (c) The Debtors will create the new Environmental
            Impairment Trust Fund into which the funds presently
            in the GSX Contribution Trust Fund will be deposited;
            and

        (d) The Debtors will pay an additional $14,500,000 into
            the New Environmental Impairment Trust Fund.

The Debtors intend to make all payments on account of the DHEC
Administrative Claim from the proceeds of the Laidlaw Recovery.
The DHEC Settlement Agreement also provides that DHEC will assign
or transfer to SK Pinewood or its designee any and all claims that
DHEC may have against Laidlaw, which will allow the Debtors to
release claims and receive distributions from Laidlaw.

                Terms of the Interim Agreement

Rather than wait until the Effective Date of the Plan to receive
the Laidlaw Recovery, DHEC and the Debtors have agreed to enter
into the Interim Agreement.  The Interim Agreement provides, among
other things, that:

        (1) DHEC will assign and transfer to SK Pinewood or its
            designee any and all claims DHEC may have against
            Laidlaw;

        (2) SK Pinewood will deposit $5,000,000 into an escrow
            account which:

               (a) will be released to the New Environmental
                   Impairment Trust Fund and reduce the
                   $14,500,000 obligations to fund the New
                   Environmental impairment Trust Fund by
                   $5,000,000 if the DHEC Settlement Agreement
                   is approved, or

               (b) will be transferred into the existing GSX
                   Contribution Trust Fund, if the Plan is not
                   approved;

        (3) The $5,000,000 escrow will be funded solely from the
            Laidlaw Recovery, which will be made available to the
            Debtors as a result of the Interim Agreement;

        (4) The escrow agreement will be mutually acceptable to
            all parties and be made with a financial institution;

        (5) The Settlement Agreement will be deemed amended in
            accordance with the terms of the Interim Agreement;

        (6) The Interim Agreement is conditional upon a final non-
            appealable order approving the Debtors' entry into the
            Interim Agreement. (Safety-Kleen Bankruptcy News,
            Issue No. 60; Bankruptcy Creditors' Service, Inc.,
            609/392-0900)


SAFETY-KLEEN: Court to Consider Chapter 11 Plan on August 1
-----------------------------------------------------------
Safety-Kleen Corp., expects the confirmation hearing on its
proposed plan of reorganization to proceed as scheduled on
August 1, 2003.  The Company has also voluntarily extended until
July 29, 2003, the period of time for lenders under the Company's
pre-petition secured credit facility to cast their votes regarding
the plan.  The previous deadline was July 25, 2003.

Safety-Kleen voluntarily filed for Chapter 11 protection on
June 9, 2000, and the disclosure statement associated with the
Company's proposed Chapter 11 reorganization plan was approved by
the U.S. Bankruptcy Court for the District of Delaware on
March 20, 2003.

"We expect that the confirmation hearing will go forward as
scheduled," said Safety-Kleen Chairman, CEO and President Ronald
A. Rittenmeyer.  "And we are happy to accommodate those of our
lenders who wanted a little additional time before the voting
period closes."

Rittenmeyer is encouraged by the support for the plan shown to
date and, pending final Court approval, he believes the Company
can complete the remaining steps in the bankruptcy court approval
process within the third quarter of this year.

A copy of the Company's modified plan of reorganization, as well
as revised exhibits and projected financials, is available on
http://www.safety-kleen.comand on http://www.safetykleenplan.com
Recent revisions to the plan include technical modifications and
details on a proposed exit facility.


SCIENTIFIC LEARNING: June 30 Balance Sheet Upside-Down by $8.4MM
----------------------------------------------------------------
Scientific Learning (OTC BB: SCIL) announced its revenue for the
quarter ended June 30, 2003 was $7.4 million, compared to $4.4
million for the quarter ended June 30, 2002, an increase of 65%.

"Financial results for the quarter were very strong," stated
Robert C. Bowen, Chairman and Chief Executive Officer. "Higher
than planned revenue, strong gross margins and aggressive expense
management resulted in our first operating profit, a quarter ahead
of plan."

Gross margins were 79% in the second quarter of 2003 compared to
81% in the same quarter of 2002. Operating expenses in the second
quarter of 2003 totaled $5.6 million compared to $6.3 million in
the second quarter of 2002. The operating profit for the quarter
was $260,000 compared to a $2.7 million operating loss in the
second quarter of 2002.

The net loss for the quarter was $56,000 compared to a net loss of
$2.9 million in the second quarter of 2002.

At June 30, 2003, the Company's balance sheet shows a working
capital deficit of about $13 million, and a total shareholders'
equity deficit of about $8.4 million.

"Education spending remains under pressure. However,
Philadelphia's purchase of Fast ForWord(R) licenses for 50 schools
in the second quarter is an example of the broadening acceptance
of our neuroscience-based reading intervention software," said Mr.
Bowen. "K-12 sales grew 22% in the second quarter, well above
industry rates and set a new company record. We made 21 sales in
excess of $100,000 during the quarter compared to 16 in the second
quarter of 2002."

Deferred revenue increased 31% year over year and totaled $16.3
million at quarter-end compared to $12.5 million on June 30, 2002.
Approximately 90% of deferred revenue is expected to be recognized
as revenue in the next four quarters.

Accounts receivable declined to $6.5 million on June 30, 2003
compared to $7.4 million on June 30, 2002.

"We had positive operating cash flow this quarter, ahead of our
plans," commented Mr. Bowen.

Revenue for the six months ended June 30, 2003 was $13.7 million,
an 80% increase compared to $7.6 million reported in the same
period last year. The net loss was $665,000 for the first six
months of 2003 compared to $6.8 million in the same period of
2002.

                       Business Outlook

Scientific Learning expects continued growth in the balance of
2003. For the year ending December 31, 2003, revenue is expected
to be in the range of $28 to $30 million. The company expects to
report an operating profit of about $1.0 million.

"We anticipate education spending will remain under pressure for
the balance of 2003 and into 2004," said Mr. Bowen. "Despite this
challenging environment, we believe educators will continue to
spend on products and solutions that help reach those children who
will otherwise be left behind."

For the third quarter of 2003, Scientific Learning expects revenue
to be in the range of $7.7 to $8.0 million compared to $6.4
million in the same period of 2002. The Company expects to report
an operating profit of $500,000 to $800,000 in the third quarter
of 2003, compared to an operating loss of $113,000 in the same
period of 2002.

The above targets represent the Company's current revenue and
earnings goals as of the date of this release and are based on
information current as of July 24, 2003. Scientific Learning does
not expect to update the business outlook until the release of its
next quarterly earnings announcement. However, the Company may
update the business outlook or any portion thereof at any time for
any reason.

Headquartered in Oakland, CA, Scientific Learning (OTC BB: SCIL)
sells the patented Fast ForWord(R) family of products that develop
and enhance cognitive skills required to read and learn
effectively. The Fast ForWord software is based on more than 30
years of neuroscience research on how to improve learning in
children, adolescents and adults. Significant gains are frequently
achieved in as few as 20 to 40 instructional sessions. To learn
more about Scientific Learning's neuroscience-based products,
visit the Company's Web sites at http://www.scientificlearning.com
and http://www.brainconnection.com


SEA CONTAINERS: Closes Exchange Offer and Resumes Cash Dividend
---------------------------------------------------------------
Sea Containers Ltd. (NYSE: SCRA, SCRB) --
http://www.seacontainers.com-- marine container lessor, passenger
and freight transport operator and leisure industry investor,
today announced its board had decided to resume quarterly dividend
payments on the company's Class A and B common shares. The
quarterly dividend has been set at 2.5 cents per Class A share and
2.25 cents per Class B share with the next payment to be made on
August 21, 2003 to shareholders of record August 7, 2003.

Mr. James B. Sherwood, President, said that in the board's view
the new 15% tax rate in the U.S. made it a priority for the
company to resume dividend payments for a portion of its profits.
He said that the company had recently repaid about $238 million of
expensive securitized and bond debt from the proceeds of an asset
sale which would reduce annual interest costs by $21.7 million.
$22.5 million of senior notes were exchanged for new such debt at
an increased interest cost of $0.7 million p.a. but the net
savings in annual interest is still significant totalling $21
million.

He indicated that the company has closed on July 23, 2003 its
exchange offer for its December 1, 2004 maturing senior
subordinated debenture debt of $99 million and had received
acceptances for $19.1 million of new senior notes due 2009 at the
same annual interest rate of 12.5%. The company intends to redeem
the balance of this debt either from net proceeds of asset sales,
lower cost bank debt, sale of new debentures or equity or a
combination of the four to achieve the lowest overall cost. The
company owns 14.4 million common shares in Orient-Express Hotels
which are currently trading at approx. $15 per share. No further
action with respect to 2004 debenture redemption is expected this
year.

As reported in Troubled Company Reporter's July 17, 2003 edition,
Moody's Investors Service downgraded the ratings of Sea Containers
Ltd. Ratings outlook is negative.

Downgraded Ratings                                  To       From

   * $115 million 10.75% Sr. Notes due 2006         B3        B1
   * $150 million 7.875% Sr. Notes due 2008         B3        B1
   * $98 million 12.5% Sr. Sub. Notes due 2004      Caa1      B2
   * Senior implied                                 B2        B1
   * Issuer rating                                  B3        B1

The downgrades conclude the ratings review Moody's started on
December 2002. The actions reflect the company's high debt levels,
weak cash flow and weak operating performance. These are however
offset by the company's fixed asset base, its position in certain
markets and improving financial performance.

Moody's is also concerned that "near-term debt maturities will not
be covered by the company's current level of operating cash flows,
and that additional asset sales or refinancing may be required to
meet debt obligations."


SEITEL INC: Wants Nod for Delaware Claims' Appointment as Agent
---------------------------------------------------------------
Seitel, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware to approve the appointment of
Delaware Claims Agency, LLC, as the official Claims Agent for the
Clerk of the Bankruptcy Court.

The Debtors submit that the number of parties requiring notice in
the Debtors' cases makes it impractical for the Clerk's Office to
send notices, maintain a claims register, and tabulate ballots.

Delaware Claims will:

     a) prepare and serve required notices in these Chapter 11
        cases, including:

          i) notice of the commencement of these Chapter 11
             cases and the initial meeting of creditors under
             Section 341 (a) of the Bankruptcy Code;

         ii) notice of the claims bar date;

        iii) notice of objection to claims;

         iv) notice of any hearings on a disclosure statement
             and confirmation of plan of reorganization; and

          v) other miscellaneous notices to any entities, as the
             Debtors, the Clerk or the Court may deem necessary
             or appropriate for an orderly administration of
             these Chapter 11 cases;

     b) file with the Clerk's office, a certificate of affidavit
        of service that includes a copy of the notice involved,
        a list of persons to whom the notice was mailed, and the
        date and manner of mailing;

     c) maintain copies of all proofs of claim and proofs of
        interest filed;

     d) maintain official claims registers, including among
        other things, the following information for each proof
        of claim or proof of interest:

          i) the name and address of the claimant and any agent
             thereof, if the proof of claim or proof of interest
             was filed by an agent;

         ii) the date received;

        iii) the claim number assigned; and

         iv) the asserted amount and classification of the
             claim;

     e) provide ministerial administrative assistance to the
        Debtors in the preparation, maintenance and amendment as
        necessary of their bankruptcy schedules and statements,
        including the creation and administration of a claims
        database upon a review of the claim against the Debtors'
        estates and the Debtors' books and records;

     f) implement necessary security measures to ensure the
        completeness and integrity of the claims registers;

     g) transmit to the Clerk's office a copy of the claims
        registers on a weekly basis, unless requested by the
        Clerk's office on a more or less frequent basis; or in
        the alternative, make available (to the Clerk's office)
        the Proof of Claim docket on-line via the claims system;

     h) maintain an up-to-date mailing list for all entities
        that have filed a proof of claim or proof of interest,
        which list shall be available upon request of a party in
        interest or the Clerk's office;

     i) provide access to the public for examination of copies
        of the proofs of claim or interest without charge during
        business hours;

     j) record all transfers of claims pursuant to Bankruptcy
        Rule 3001(e) and provide notice of such transfers as
        required by Bankruptcy Rule 3001(e);

     k) comply with applicable federal, state, municipal, and
        local statutes, ordinances, rules, regulations, orders
        and other requirements;

     l) provide temporary employees to process claims, as
        necessary;

     m) provide such other claims processing, noticing and
        related administrative services as may be requested from
        time to time by the Debtors; and

     n) promptly comply with such further conditions and
        requirements as the Clerk's office or the Court may at
        any time prescribe.

Joseph L. King, Directors of Case Administration of Delaware
Claims, reports that the current hourly rate charged by Delaware
Claims professionals are:

          Senior Consultants           $130 per hour
          Technical Consultants        $115 per hour
          Associate Consultants        $100 per hour
          Processors and Coordinators  $50 per hour

Seitel, Inc., headquartered in Houston, Texas, markets its
proprietary seismic information/technology to more than 400
petroleum companies, licensing data from its library and creating
new seismic surveys under multi-client projects.  The Company
filed for chapter 11 protection on July 21, 2003 (Bankr. Del. Case
No. 03-12227).  Scott D. Cousins, Esq., at Greenberg Traurig LLP
represents the Debtors in their restructuring efforts.  When the
Company filed for protection from its creditors, it listed
$379,406,000 in total assets and $345,525,000 in total debts.


SEITEL INC: Executes $1.7M Seismic Shoot Agreement with Contango
----------------------------------------------------------------
Contango Oil & Gas Company (AMEX:MCF) and Alta Resources, LLC have
entered into an agreement with Seitel Data Ltd. for a 3-D seismic
shoot covering 39 square miles in southern Duval County, Texas.
The estimated cost to Contango for the shoot is approximately $1.7
million. The seismic shoot is scheduled for completion by November
2003, and processing, evaluation and prospect identification is
expected by January 2004. As part of the participation agreement
between Contango and Alta, Contango will receive a 50% working
interest (an approximate 32% net revenue interest) in natural gas
and oil leases owned by Alta in Duval County, Texas and will have
the right to participate in any wells drilled on identified
prospects.

Kenneth R Peak, Contango's Chairman and Chief Executive Officer,
said, "Alta Resources generated this exploration play, and we are
pleased to have the opportunity to work with both Seitel and Alta.
Operationally, our EBITDAX continues to average between $2.5 -
$3.0 million per month. Higher commodity prices appear to be
increasing the opportunities available to Contango and the
industry. We are currently evaluating another new 3-D seismic
shoot as well as two high-quality ready-to-drill prospects."

Joseph G. Greenberg, President of Alta Resources, said, "Alta
Resources has leased approximately 9,000 acres directly on trend
with two nearby Queen City discoveries with initial production
between 5 and 8 MMcfd of natural gas per well. Alta has identified
multiple prospects on the acreage using advanced processing of
vintage 2-D data. We welcome the experience that both Contango and
Seitel bring to the play."

Larry Lenig, Chief Executive Officer of Seitel, said, "We are very
pleased to have been selected to work with Alta and Contango on
this project. The shoot complements Seitel's existing database and
leverages our experience in undertaking and managing new surveys
in conjunction with aggressive and growth oriented exploration and
production companies. The new survey extends two existing Seitel
surveys in the area, and when completed, will provide more than
125 square miles of contiguous 3-D coverage."

Contango is a Houston-based, independent natural gas and oil
company. The Company explores, develops, produces and acquires
natural gas and oil properties primarily onshore in the Gulf Coast
and offshore in the Gulf of Mexico. Contango also own a 10%
partnership interest in a proposed LNG terminal in Freeport,
Texas. Additional information can be found on our web page at
www.mcfx.biz.

Seitel Data Ltd. is a wholly owned subsidiary of Seitel, Inc.
(OTCBB:SEIE) (TORONTO:OSL) and markets its proprietary seismic
information to more than 400 petroleum companies, licensing data
from its library and creating new seismic surveys under multi-
client projects. Seitel has announced that it filed a joint plan
of reorganization with the Delaware Bankruptcy Court. The
reorganization plan is to be financed by Berkshire Hathaway Inc.
(NYSE:BRK.A) (NYSE:BRK.B). As a result of this funding, if the
reorganization plan is confirmed and consummated, Seitel will
become a wholly owned subsidiary of Berkshire Hathaway. Berkshire
Hathaway is a holding company owning subsidiaries engaged in a
number of diverse business activities, the most important of which
is the property and casualty insurance business conducted on both
a direct and reinsurance basis through a number of subsidiaries.

Alta Resources, LLC is a Houston-based, private exploration and
production company.


SELECT MEDICAL: S&P Affirms BB-/B Corp. Credit and Debt Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' corporate
credit and 'B' senior subordinated ratings on Select Medical
Corp., and assigned its 'B' senior subordinated rating to the
company's proposed $175 million senior subordinated notes due in
2013. Select will use the proceeds from the notes to help finance
the announced acquisition of Kessler Rehabilitation Corp. The
Mechanicsburg, Pennsylvania-based company has about $390 million
of debt outstanding.

The outlook remains stable.

"The speculative-grade rating on Mechanicsburg, Pennsylvania-based
Select Medical Corp. reflects its relatively narrow service niche,
risk of future adverse changes in reimbursement, and ongoing
expansion efforts that may limit its ability to extend its recent
successes," said credit analyst David Peknay.

By using a strategy that includes a combination of acquisitions
and new development, Select Medical has established itself as the
second-largest operator of specialty acute-care hospitals for
long-term-stay patients in the United States, and the second-
largest operator of outpatient rehabilitation clinics. The company
currently operates 74 long-term, acute-care hospitals in 24
states, and 739 outpatient rehabilitation clinics in the U.S. and
Canada. All but a few of the hospitals operate in a "hospital-
within-a-hospital" business model, with each separately licensed
facility residing in leased space within general acute-care
hospitals.

Expansion and improvement of physician-referral relationships and
the development of about eight to 10 new hospitals per year have
been the company's key growth strategies. Expanding programs and
services, new clinic development, and modest acquisitions will
fuel more modest growth in the company's outpatient rehabilitation
clinic segment. However, with the acquisition of Kessler
Rehabilitation, Select is expanding into inpatient rehabilitation,
and this is likely to be a precursor to other acquisitions in this
business as well as more LTAC acquisitions.

The company remains vulnerable to changes in reimbursement.
Although it appears Medicare's prospective payment system for
LTACs will be favorable for the company, future adverse changes
could have a significant effect, because Medicare contributes 40%
of Select Medical's total revenues. The currently favorable
managed-care environment is expected to moderate in the next year
or two. Moreover, the company's acquisition plan could accelerate
even further, hurting credit strength.


SILICON GRAPHICS: June 28 Net Capital Deficit Swells to $178M
-------------------------------------------------------------
SGI (NYSE: SGI) announced results for its fourth fiscal quarter
and fiscal year 2003, which ended June 27, 2003. Revenue for the
fourth quarter was $240 million, compared with $217 million in the
preceding quarter. Gross margin increased to 40.3% from 37.1% in
the previous quarter.

GAAP operating expenses for the fourth quarter were $131 million,
including $12.6 million in restructuring and non-cash impairment
charges, compared with $128 million for the previous quarter.
SGI's fourth-quarter net loss on a GAAP basis was $36.6 million
compared with $35 million from the third quarter. These results
are consistent with the preliminary results announced on July 10,
2003.

"Our fiscal year 2003 was a challenge. Although we have seen a
sequential increase in our Q4 revenues and gross margin, we still
need to take aggressive steps to reduce costs and to drive revenue
from our new line of products," said Bob Bishop, chairman and
chief executive officer of SGI.

As of June 27, 2003, unrestricted cash, cash equivalents and
marketable investments were $141 million, which was unchanged from
the previous quarter.

Revenue for full fiscal year 2003 was $962 million, compared with
$1.3 billion from fiscal year 2002. Net loss for the year was $130
million, compared with $46 million from the previous year.

At June 28, 2003, SGI's balance sheet shows a working capital
deficit of about $12 million, and a total shareholders' equity
deficit of about $178 million.

SGI, also known as Silicon Graphics, Inc., is the world's leader
in high-performance computing, visualization and storage. SGI's
vision is to provide technology that enables the most significant
scientific and creative breakthroughs of the 21st century. Whether
it's sharing images to aid in brain surgery, finding oil more
efficiently, studying global climate or enabling the transition
from analog to digital broadcasting, SGI is dedicated to
addressing the next class of challenges for scientific,
engineering and creative users. SGI was named on FORTUNE
magazine's 2003 list of "Top 100 Companies to Work For." With
offices worldwide, the company is headquartered in Mountain View,
California, and can be found on the Web at http://www.sgi.com


SPIEGEL GROUP: Court Extends Plan Filing Exclusivity to Nov. 15
---------------------------------------------------------------
The Spiegel Group Debtors explain that the size and complexity of
their businesses, corporate structure, employee and vendor
relationships, and financing arrangements place a heavy burden on
their management and personnel.  Since the Petition Date, the
Debtors have devoted significant resources to reviewing their
businesses, developing a business plan, and taking immediate steps
to restructure their businesses to enhance the value of their
estates for the benefit of their creditors and other stakeholders.
In this regard, the Debtors explain that they are not in a
position to create and build acceptance for a plan at this time.

Consequently, the U.S. Bankruptcy Court for the Southern District
of New York granted the Debtors' motion to extend their exclusive
period to file a reorganization plan to November 12, 2003 and to
extend the exclusive period to solicit acceptances of that plan to
January 11, 2004. (Spiegel Bankruptcy News, Issue No. 9;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


SPIEGEL GROUP: Closing One Telephone & One Distribution Center
--------------------------------------------------------------
The Spiegel Group plans to close one of its customer contact
centers and to further consolidate its merchandise order
fulfillment operations. These actions are part of the company's
ongoing initiatives to streamline its operations, reducing its
cost structure and improving efficiencies.

The company's Spiegel Group TeleServices division, which handles
the customer sales and service calls for The Spiegel Group
merchant companies, will close a customer contact center located
in Rapid City, S.D., which employs approximately 240 associates.
The facility is scheduled to close at the end of December 2003.
The company's network of customer contact centers located in
Hampton, Va., Saint John, New Brunswick, Canada, and Sydney, Nova
Scotia, Canada, will handle the customer sales and service needs
for the Group's merchant companies -- Eddie Bauer, Newport News
and Spiegel Catalog.

In the consolidation of its order fulfillment operations, the
company will close a distribution center, which employs
approximately 400 associates and supports the company's Newport
News division. Located in Newport News, Va., the facility is
scheduled to close at the end of December 2003.

At the beginning of January 2004, the company will begin
processing and shipping merchandise orders for all its merchant
divisions through Distribution Fulfillment Services, a wholly
owned subsidiary of Spiegel, Inc., which now serves Eddie Bauer
and Spiegel Catalog, and is headquartered in Groveport, Ohio.

Also, as part of the consolidation, the company is moving its DFS
retail distribution operations from its facility in Columbus,
Ohio, to its facility in Groveport, Ohio, a Columbus, Ohio suburb.
The company expects that most of the associates who are working in
retail distribution at the Columbus facility will transfer to the
Groveport facility when this part of the consolidation is
completed in September 2003. However, as a result of this action,
approximately 40 associates in support positions at DFS will be
released in September 2003.

The company will provide severance and other benefits to employees
affected by these actions.

"These actions are based on the results of an analysis of the
capacity and facility costs of the company's customer contact
center network and its warehousing and logistics operations," said
Alexander Birken, senior vice president and chief administrative
officer for The Spiegel Group. "Consolidating the company's
logistical support at DFS improves the utilization of the Group's
operations while better leveraging the company's fixed costs. DFS
is well equipped to handle current distribution and fulfillment
for all our merchant companies while offering flexibility for the
future," Birken said.

"Reducing the number of customer contact centers provides the most
cost- effective structure for our network while allowing us to
continue to deliver excellent customer service, and offering us
the flexibility to manage the seasonality of our business and
efficiently route call volume across the network," Birken said.

"We are proud of our dedicated, hard-working associates at the
customer contact center in Rapid City, S.D., and at the
distribution center in Newport News, Va. We salute their
achievements in customer service, efficiency and accuracy," Birken
said. "They have demonstrated their professionalism time and
again, and I know they will continue to provide excellent customer
service throughout the transition period. We regret having to
close these facilities; however, this is the right business
decision for the Group," he said.

                         Background

The Rapid City, S.D., customer contact center opened in 1991 and
is located at 2700 N. Plaza Drive in Rapid City, S.D.

The Newport News distribution center opened in 1973 and is located
at 5201 City Line Road in Newport News, Va.

Distribution Fulfillment Services opened in 1994 and serves the
catalog and e-commerce fulfillment and distribution needs, as well
as the retail distribution needs, of Eddie Bauer and Spiegel
Catalog. Its Columbus facility is located at 4545 Fisher Road and
its Groveport facility is located at 6600 Alum Creek Drive.

The Spiegel Group is a leading international specialty retailer
marketing fashionable apparel and home furnishings to customers
through catalogs, specialty retail and outlet stores, and e-
commerce sites, including eddiebauer.com, newport-news.com and
spiegel.com. The Spiegel Group's businesses include Eddie Bauer,
Newport News and Spiegel Catalog. Investor relations information
is available on The Spiegel Group Web site at
http://www.thespiegelgroup.com


SUMMIT NATIONAL: Settles Claims Dispute with CCGI and Fontana
-------------------------------------------------------------
Summit National Consolidation Group, Inc. (Pink Sheets:SMNC)
announces a group of creditors, including CCGI Settlement Group,
LLC and John Fontana, has settled with the company.

The CCGI and Fontana Group obtained two judgments against a
predecessor in interest to Summit National, dated 10-04-01 and 2-
19-02, in the cumulative amount of $532,196. The CCGI and Fontana
group has agreed to a settlement in lieu of cash and will receive
an undisclosed amount of common restricted voting shares. Upon the
issuance of the shares, the filing of sanctions of judgment for
the two aforementioned judgments will be undertaken.

"Certain conditions within SMNC had to be satisfied prior to the
resolution of these creditor judgments," said Mario Quenneville,
President and CEO of SMNC. "With the conditions met, the creditor
groups are settling with the company and allowing us to focus on
our business. In fact, certain members of the creditor groups have
expressed an interest in working with us. It's a positive
development in the present, and for the future."

SMNC conceives, designs and formulates unique cosmetic and
cleaning products from organic materials with a variety of
applications including fingernail polish remover, make up remover,
sneaker cleaner wipes, instant shoe shine wipes, acne treatment
wipes, eye glass, cleaner and defogger, car interior leather
cleaning pads, vitamin E applicators, etc. Superwipe(R) products
are sold in leading food, drug, convenience and beauty supply
stores throughout North America and Europe. More Superwipe(R)
products are in various stages of development, and should be
released throughout 2003.

As reported in Troubled Company Reporter's July 23, 2003 edition,
Summit National Consolidation Group announced a motion for the
dismissal of the Chapter 11 bankruptcy proceeding has been entered
on July 17th, 2003 in United States Bankruptcy court for the
Southern District of Texas, Houston Division.

          SUMMIT NATIONAL CONSOLIDATION GROUP, INC.
          CASE NO. 02- 39372 - H1- 11
          Manuel Leal
          United States Bankruptcy Judge

The Chapter 11 Proceeding above entitled and numbered is on file;
a response must be filed within twenty days of the 17th, otherwise
the court may treat it as unopposed and grant relief.


TANBRIDGE: CIBC Files Involuntary Bankruptcy Petition in Canada
---------------------------------------------------------------
The Tanbridge Corporation received from its principal banker
Canadian Imperial Bank of Commerce a demand for repayment of its
indebtedness and a notice indicating that CIBC intended to enforce
its security against Tanbridge. Tanbridge was not in a position to
repay its indebtedness to CIBC and CIBC petitioned Tanbridge into
bankruptcy in Canada shortly.

It is expected that there will be an orderly wind-down of the
operation of Tanbridge's Winnipeg plant and Toronto cutting
facility.

It is expected that Tanbridge's subsidiaries, Wickett & Craig of
America, Inc.  Freeze-Dry Foods Limited and Freeze-Dry Foods Inc.
will not be placed in bankruptcy and they are expected to continue
to operate in the normal course. Tanbridge has also been advised
by The Toronto Stock Exchange that its listing on the TSX has been
put on review for possible suspension.


TANBRIDGE: Conrad Riley and Alasdair Grant Resign as Directors
--------------------------------------------------------------
The Tanbridge Corporation's remaining directors, Mr. Conrad S.
Riley and Mr. Alasdair L. Grant have resigned. Tanbridge has also
waived the requirement for the passage of ten days prior to
enforcement of security held by its principal banker Canadian
Imperial Bank of Commerce and that Tanbridge has also consented to
the abridgement of time for the hearing of a bankruptcy petition
against Tanrbridge brought by the CIBC heard Friday in Winnipeg.

As noted in a previous press release, it is expected that there
will be an orderly wind-down of the operation of Tanbridge's
Winnipeg plant and Toronto cutting facility.

It is expected that Tanbridge's subsidiaries, Wickett & Craig of
America, Inc. Freeze-Dry Foods Limited and Freeze-Dry Foods Inc.
will not be placed in bankruptcy and they are expected to continue
to operate in the normal course.


TEXAS PETROCHEMICALS: Has Until September 3 to File Schedules
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas gave
Texas Petrochemicals LP and its debtor-affiliates an extension to
file their schedules of assets and liabilities, statements of
financial affairs and lists of executory contracts and unexpired
leases required under 11 U.S.C. Sec. 521(1).  The Debtors have
until September 3, 2003 to file these required documents.

Texas Petrochemicals LP, headquartered in Houston, Texas, along
with its debtor-affiliates, are one of the largest producers of
butadiene, butene-1 and third largest producer of methyl tertiary-
butyl ether in North America. The Company filed for chapter 11
protection on July 20, 2003 (Bankr. S.D. Tex. Case No. 03-40258).
Mark W. Wege, Esq., at Bracewell & Patterson, LLP represents the
Debtors in their restructuring efforts.  When the Company filed
for protection from its creditors, it listed $512,417,000 in total
assets and $448,866,000 in total debts.


TRITON CDO: S&P Places BB+ Class B Note Rating on Watch Negative
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its rating on the class
B notes issued by Triton CDO IV Ltd., an arbitrage CBO transaction
managed by Triton Partners, on CreditWatch with negative
implications. At the same time, the rating on the class A notes is
affirmed due to the level of overcollateralization available to
support the notes.

The CreditWatch placement reflects factors that have negatively
affected the credit enhancement available to support the class B
notes since the transaction was originated in December 1999. 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.

Since the previous rating action, where both the class A and B
notes were downgraded Sept. 30, 2002, approximately $9.4 million
in new asset defaults have occurred. According to the most recent
monthly report (June 16, 2003), the class A/B
overcollateralization ratio is at 105.6% versus its minimum
required ratio of 121.0%. However, following a $17.328 million
paydown to the class A notes on the June 24, 2003 payment date,
the class A/B overcollateralization ratio has improved to a value
of approximately 107%.

The credit quality of the collateral pool has also deteriorated
somewhat since the previous rating action. As per the most recent
monthly report (June 16, 2003), approximately 22.24% of the assets
in the portfolio currently come from obligors with Standard &
Poor's ratings of 'CCC+' or below, and 9.9% of the performing
assets within the collateral pool come from obligors with ratings
on CreditWatch negative. Furthermore, the transaction is not in
compliance with Standard & Poor's Trading Model test, a measure of
the amount of credit quality in the current portfolio to support
the ratings assigned to the liabilities.

Standard & Poor's will be reviewing the results of current cash
flow runs generated for Triton CDO IV Ltd. to determine the level
of future defaults the rated tranches 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 rating currently assigned
to the notes remains consistent with the amount of credit
enhancement available.

              RATING PLACED ON CREDITWATCH NEGATIVE

                      Triton CDO IV Ltd.

                     Rating
     Class    To                From    Current Balance ($ mil.)
     B        BB+/Watch Neg     BB+                      26.750

                        RATING AFFIRMED

                       Triton CDO IV Ltd.

     Class    Rating     Current Balance ($ mil.)
     A        A                          101.872


USI HOLDINGS: Improved Coverage Ratios Prompt S&P to Up Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its counterparty credit
and bank loan ratings on USI Holdings Corp. to 'BB-' from 'B+'
because of the company's improving coverage ratios, prospective
ability to satisfy debt covenants, much improved operating
results, and reduced debt leverage. Offsetting the much improved
company profile are USI's short tenure as a public company and
lack of a consistent, sustained, profitable track record.

Standard & Poor's also said that the outlook on USI is stable.

"Many of the company's full-year 2002 performance measures place
it squarely at the bottom tier of its peer group of insurance
brokers," noted Standard & Poor's credit analyst Donovan Fraser.
However, excluding charges related to discontinued operations in
the first quarter of 2002, the company's trailing 12-months
performance as of March 31, 2003, is more comparable to that of
its peers. "Standard & Poor's considers the 12-month period
beginning with second quarter of 2002 to be more indicative of
USI's prospective operating results," Mr. Fraser added.

Standard & Poor's expects that full-year 2003 cash flow from
continuing operations (adjusted for interest and lease expenses)
will provide a 50% cushion to fund expected interest, principal,
and lease obligations. Though USI is currently in compliance with
its debt covenants, it has had to renegotiate and amend debt
covenants several times since 1999 to remain in compliance. USI is
in the unique position of being partially owned by one of its note
holders, J.P. Morgan Chase & Co. Consequently, banks have
historically shown a willingness to renegotiate terms and debt
covenants so that USI remains in compliance. Given the improved
fundamentals of the company, Standard & Poor's expects that USI
will not only continue to remain in compliance with its existing
credit facility but will be able to enter into a more stable,
manageable long-term capital structure in the near future.

USI has continued to benefit from the hard market in the
property/casualty industry, and revenues are up 6.8% over first-
quarter 2002. However, given that the company derives only about
58% of its revenue base from property/casualty commissions, it has
not experienced the same magnitude of top-line growth as have
other pure insurance brokers. As of March 31, 2003, the company
derived about 27% of its revenue from the Group Employee Benefits
sector within the Insurance Brokerage segment and the remaining
15% from the Specialized Benefits segment. Prior to 2002, the
company's Specialized Benefits segment had historically produced
EBITDA margins in excess of Insurance Brokerage margins. However,
over the past few quarters, lingering increases in the
unemployment rate and corporate trends in scaling back company-
sponsored benefit packages have negatively affected this segment.
Standard & Poor's considers USI's long-term strategy of earnings
diversification to be prudent given the relatively noncorrelated
cyclicality of the property/casualty sector.

USI is well positioned to continue to further penetrate its target
niche market of businesses with 20 to 999 employees and grow both
organically and through measured acquisitions. USI enjoys cross-
selling opportunities as a distributor of insurance and financial
products to a consortium of business partners, including Zurich
Financial Services Group, Ceridian Corp., Sovereign Bancorp, and
UnumProvident Corp., which collectively own a significant interest
in USI. The company is able to offer various products to its
clients, either as part of traditional company-
sponsored/subsidized benefits packages during annual benefit
election periods or via employee-paid ancillary products. Though
USI is the ninth-largest domestic insurance broker based on 2002
brokerage revenues, the company is able to maintain local and
regional focuses through its 350 sales professionals and product
specialists in 61 offices in 20 states.


VENTURES NATIONAL: Capital Losses 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.


WAYZATA CORPORATE: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Wayzata Corporate Partners LLC
        7525 Mitchell Road
        Eden Prairie, Minnesota 55334

Bankruptcy Case No.: 03-45135

Type of Business: Leasing of executive suites

Chapter 11 Petition Date: July 18, 2003

Court: District of Minnesota (Minneapolis)

Judge: Robert J. Kressel

Debtor's Counsel: William I. Kampf, Esq.
                  Kampf & Associates PA
                  821 Marquette Avenue S
                  Suite 901
                  Minneapolis, MN 55402
                  Tel: 612-339-0522

Total Assets: $2,983,578

Total Debts: $830,960

Debtor's 20 Largest Unsecured Creditors:

Entity                                            Claim Amount
------                                            ------------
Great Plains                                           $60,383

Marcon                                                 $43,911

Stahl Construction Co.                                 $31,296

Gilbert/Encompass                                      $21,980

Prism                                                  $20,334

St. Paul Linoleum and Carpet                           $15,873

UBC                                                    $14,540

Cambridge Commercial Realty                            $12,000

BDH & Young                                            $11,763

Midwest Blinds                                         $11,739

Tekton                                                 $10,434

Grazzini                                                $8,640

Glewwe Doors, Inc.                                      $7,201

Prestige                                                $5,879

G/C Communications                                      $4,497

Clock Tower                                             $4,369

Northern Glass & Glazing                                $3,745

Eschelon Telecom, Inc.                                    $933

IKON Office Solutions                                     $423

Registered Locksmiths                                      $90


WEIGHT WATCHERS: Proposed $504.7-Mill. Loan Gets S&P's BB Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' rating to
commercial weight-loss service provider Weight Watchers
International Inc.'s proposed $504.7 million term loan B facility
due Dec. 31, 2009.

At the same time, Standard & Poor's affirmed its 'BB' corporate
credit and senior secured debt ratings and its 'B+' subordinated
debt rating for WWI. The bank loan rating continues to be rated
the same as the corporate credit rating because in a stressed
scenario, Standard & Poor's believes that lenders could expect
meaningful, but less than full, recovery of principal. The outlook
is stable.

Woodbury, New York-based WWI had about $454 million of total debt
outstanding at March 29, 2003.

The rating on the proposed term loan is based on preliminary
offering statements and is subject to review upon final
documentation. Proceeds from the new term loan will be used to
finance the announced tender of up to all $264 million of the
company's 13% senior subordinated notes (plus related tender
premiums and transaction fees) and to repay about $204.7 million
of its existing term loan B, transferable loan certificate, and
term loan D facilities.

"Standard & Poor's expects WWI will continue to maintain strong
credit protection measures for the ratings and that the proposed
transaction will serve to lower WWI's debt service costs, as
higher interest rate senior subordinated notes and term facilities
will be refinanced with lower rate bank debt," said credit analyst
David Kang.

WWI competes in the commercial weight loss segment of the weight-
control industry (other segments include self-help weight loss
products, weight-loss drugs, and weight loss services administered
by doctors, nutritionists, and dieticians). However, the
commercial weight loss segment is relatively narrow; in the U.S.
(WWI's largest market), this segment represented only about 7% of
the overall industry in 2000.

WWI's liquidity is expected to be adequate for the current
ratings. Pro forma for the proposed transaction, WWI is expected
to have full availability under its $45 million revolving credit
facility. Total cash at March 29, 2003, was $153 million.

Near-term debt maturities and capital expenditures are minimal.
The company is expected to generate significant free operating
cash flows that are more than adequate to cover capital
expenditure and debt amortization requirements. Standard & Poor's
expects the company to use its excess free operating cash flow to
pay down debt.


WELLMAN INC: 2nd Quarter Operating Results Show Weak Performance
----------------------------------------------------------------
Wellman, Inc. (NYSE: WLM) reported normalized net earnings from
continuing operations for the quarter ended June 30, 2003 of $1.1
million. Normalized net earnings from continuing operations
exclude a cost incurred related to the preferred stock investment
and restructuring costs, which total $0.8 million.

The cost related to this investment resulted from the accelerated
vesting of outstanding stock options, which we do not expect to be
a recurring charge. The Company only incurs restructuring charges
when it believes it can improve its future operating income by
incurring current costs that improve its business operations.
Earnings from continuing operations, which include these costs,
were $0.3 million. This compares to net earnings from continuing
operations of $12.8 million, for the quarter ended June 30, 2002.
Net earnings available for common stockholders in second quarter
2003, after the effect of the preferred stock accretion, were $0.2
million, compared to $9.4 million in the second quarter 2002.

Normalized earnings from continuing operations for the first six
months of 2003 were $7.7 million, compared to normalized net
earnings from continuing operations, of $18.4 million for the same
period in 2002. Including the above, net income available for
common stockholders was $6.0 million for the first half of 2003
compared to a net loss available to common stockholders of $202.2
million in the same period in 2002.

Second quarter 2003 earnings were negatively impacted by volatile
chemical raw material costs, lower volumes, and competitive
pressures, particularly in our domestic PET resins business. In
response to current business conditions, the Company is
immediately implementing significant cost reduction programs.

Tom Duff, Chairman and CEO, stated, "Our strong first quarter
earnings were offset by weak earnings in the second quarter. While
poor market conditions and volatile chemical raw material costs
are concerns for the remainder of 2003, our cost reduction
programs will have a meaningful impact in that period. We expect
market conditions in the domestic PET resin industry to improve in
2004, driven by increased capacity utilization as growing demand
absorbs the recent capacity increases. "

Wellman, Inc. manufactures and markets high-quality polyester
products, including PermaClear(R) and EcoClear(R) brand PET
(polyethylene terephthalate) packaging resins and Fortrel(R) brand
polyester fibers. The world's largest PET plastic recycler,
Wellman utilizes a significant amount of recycled raw materials in
its manufacturing operations.

As reported in Troubled Company Reporter's February 19, 2003
edition, Standard & Poor's Ratings Services revised its outlook on
Wellman Inc., to stable from negative following the company's
announcement of a $125 million private equity investment from
Warburg Pincus.

At the same time, Standard & Poor's affirmed its 'BB+' corporate
credit and preliminary senior unsecured debt ratings on the
company. Wellman, based in Shrewsbury, New Jersey, is a producer
of polyester staple fibers and polyethylene terephthalate resins
and has about $235 million of reported debt outstanding.


WEIRTON STEEL: Court Approves Bailey Riley as Local Counsel
-----------------------------------------------------------
Weirton Steel Corporation sought and obtained Court permission to
retain the law firm of Bailey, Riley, Buch & Harman, LC to act as
its local counsel to assist McGuireWoods in the prosecution of the
Debtor's Chapter 11 case.

Weirton will compensate Bailey on an hourly basis and will
reimburse its actual, necessary expenses and other charges
incurred.  The Firm's current hourly rates are:

          Partners                  $175 - 300
          Associates                 125 - 175
          Legal assistants            75 - 100

As local counsel, Bailey is expected to:

    A. advise the Debtor with respect to its powers and duties
       as a debtor in possession in the continued management and
       operation of its businesses and properties as required by
       the Debtor and in consultation with McGuireWoods, LLP;

    B. attend meetings and negotiate with representatives of
       creditors and other parties-in-interest as required by
       the Debtor and in consultation with McGuireWoods, LLP;

    C. take necessary action to protect and preserve the
       Debtor's estate, including the prosecution of actions on
       the Debtor's behalf, the defense of actions commenced
       against the Debtor, negotiations concerning all
       litigation in which the Debtor is involved, and
       objections to claims filed against the estate as required
       by the Debtor and in consultation with McGuireWoods, LLP;

    D. prepare on behalf of the Debtor as motions, applications,
       answers, orders, reports and papers necessary to the
       administration of the estate as required by the Debtor
       and in consultation with McGuireWoods, LLP;

    E. negotiate and prepare on the Debtor's behalf a plan of
       reorganization, disclosure statement, and all related
       agreements and documents, and take any necessary action
       on behalf of the Debtor to obtain confirmation of the
       plan as required by the Debtor and in consultation with
       McGuireWoods, LLP;

    F. assist in the representation the Debtor in connection
       with postpetition financing if obtained as required by
       the Debtor and in consultation with McGuireWoods, LLP;

    G. advise the Debtor in connection with any potential sale
       of assets as required by the Debtor and in consultation
       with McGuireWoods, LLP;

    H. appear before the Court, any appellate courts, and the
       United States Trustee and protect the interests of the
       Debtor's estate before the courts and the United States
       Trustee;

    I. consult with the Debtor regarding tax, labor and
       employment, real estate, corporate finance, corporate and
       litigation matters as required by the Debtor and in
       consultation with McGuireWoods, LLP;

    J. represent the Debtor in matters in which a conflict of
       interest might arise with McGuireWoods; and

    K. perform all other necessary legal services and provide
       all other necessary legal advice to the Debtor in
       connection with the Debtor's Chapter 11 case as required
       by the Debtor and in consultation with McGuireWoods, LLP.
       (Weirton Bankruptcy News, Issue No. 6; Bankruptcy
       Creditors' Service, Inc., 609/392-0900)


WESTPOINT STEVENS: Taps Stein Riso as Special Conflicts Counsel
---------------------------------------------------------------
WestPoint Stevens Inc. and its debtor-affiliates seek the Court's
authority to employ Stein Riso Mantel, LLP as special conflicts
counsel in connection with claims, litigation or other matters now
pending or which may arise as to which Weil, Gotshal and Manges
LLP, is or becomes unable to represent the Debtors due to an
actual or potential conflict of interest.

John J. Rapisardi, Esq., at Weil Gotshal & Manges LLP, in New
York, explains that the Debtors selected Stein Riso to represent
them as Special Conflicts Counsel in their Chapter 11 cases
because of the Firm's extensive experience and knowledge in the
field of debtors' and creditors' rights and business
reorganizations under Chapter 11 of the Bankruptcy Code.

Mr. Rapisardi reports that Stein Riso intends to charge the
Debtors for its legal services in accordance with its ordinary
and customary hourly rates in effect on the date such services
are rendered.  The hourly billing rates currently charged by
Stein Riso for legal services rendered by its professionals are:

       Partners                      $300 - 500
       Of Counsel                     325
       Associates                     250 - 300
       Paralegals                     100 - 125

The Debtors understand that Stein Riso intends to apply to the
Court for allowances of compensation in accordance with the
applicable provisions of the Bankruptcy Code, the Federal Rules
of Bankruptcy Procedure, the Local Bankruptcy Rules for the
Southern District of New York, the guidelines established by the
Office of the United States Trustee, and further Court orders for
all services performed and expenses incurred after the Petition
Date.

Mark Chinitz, Esq., assures the Court that Stein Riso does not
have any connection with or interest adverse to the Debtors,
their creditors, or any other party-in-interest or their
attorneys and accountants.  Stein Riso will not represent any
parties other than the Debtors in these Chapter 11 cases or in
connection with any matters that would be adverse to the Debtors
arising from, or related to, these cases. (WestPoint Bankruptcy
News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


WILLIS GROUP: S&P Affirms BB+ Counterparty Credit Ratings
---------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' counterparty
credit ratings on Willis Group Holdings Ltd. following the
company's second-quarter 2003 earnings announcement.

The outlook has been revised to positive from stable.

"The change in outlook reflects Willis's continued improvement in
operating performance in 2003 and consistent improvement following
the company's IPO in June 2001," said Standard & Poor's credit
analyst Donovan Fraser. As of June 30, 2003, Willis's long-term
debt totaled $490 million; down from $677 million at midyear 2002
(and in excess of $900 million before the IPO) as the company has
continued to pay down debt from free cash flow. Operating
performance continues to trend positively--as measured by an
EBITDA margin of 32.6% at midyear 2003 compared with 20.2% as of
June 30, 2002. Because of lower leverage and improved operating
performance, EBITDA and EBIT interest coverage measured 12.2x and
11.5x, respectively, as of June 30, 2003, compared with 5.1x and
4.6x in the prior-year period.

The change in outlook reflects Willis's continued improvement in
operating performance in 2003, and consistent improvement
following the company's IPO in June 2001. Willis's improved
operating performance has coincided with the current, though
moderating, hard market in property/casualty insurance. Given the
company's concentration in this sector, Standard & Poor's will be
meeting with senior management within the next few weeks to assess
the sustainability of Willis' performance throughout the
underwriting cycle.

Willis is the third-largest insurance broker in the world and has
a global presence, as demonstrated by a team of about 13,000
associates located in more than 100 countries worldwide.


WORLDCOM INC: Seeks to Pull Plug on 85 Circuits Service Orders
--------------------------------------------------------------
Since the Petition Date, Worldcom Inc. has reviewed the operating
capacity of its network.  This network rationalization process is
an ongoing, integral component of WorldCom's long-range business
plan.  WorldCom determined that it does not require the capacity
relating to:

      (i) 55 circuits purchased through tariff service orders, of
          which 30 were purchased from SBC or its affiliates, and
          25 were purchased from Qwest or its affiliates; and

     (ii) 30 circuits purchased under MSAs, of which 29 were
          purchased from Verizon or its affiliates, and one was
          purchased from SBC or one of its affiliates.

In determining to reject the Service Orders, WorldCom considered,
among other things, network overcapacity, costs, overlap, and
other inefficiencies, as well as WorldCom's ability to move
traffic to alternative circuits in a more cost-effective manner.

Accordingly, the Debtors seek authority to reject the Service
Orders associated with the Circuits.

The Debtors currently have no traffic on the Circuits purchased
under the Service Orders under which they incur $96,855 in
monthly charges.  Thus, the Circuits provided under the Service
Orders are unnecessary and costly to the Debtors' estates.  By
rejecting the Service Orders, the Debtors save the estates
$1,098,854 in administrative expense per annum, or $2,147,578 for
the remainder of the terms of the Service Orders for capacity
that the Debtors do not need or use.  For these reasons, in the
Debtors' business judgment, the Service Orders for the Circuits
should be rejected effective as of the disconnect date set forth
in the disconnect notice for each Circuit. (Worldcom Bankruptcy
News, Issue No. 32; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


WORLDCOM: MCI Wants Nod to Acquire Remaining Interest in Digex
--------------------------------------------------------------
MCI (WCOEQ, MCWEQ) has filed a motion with the U.S. Bankruptcy
Court for the Southern District of New York seeking authorization
to purchase all outstanding publicly traded common stock of Digex,
Incorporated for a total of approximately $18 million dollars. The
purchase enables MCI to expand its managed services portfolio -- a
key strategic objective of its Plan of Reorganization -- while
assuring Digex and MCI customers that MCI is committed to
supporting their hosting services.

Subject to the Bankruptcy Court's approval, MCI intends to make an
offer to acquire all of the outstanding shares of Digex's publicly
traded common stock. If MCI acquires approximately 75% of the
outstanding shares of publicly traded common stock, MCI would then
purchase all of the outstanding Digex preferred stock pursuant to
an agreement with the owners of this stock. Digex would then merge
with an MCI subsidiary. The transactions have been approved by
MCI's Board of Directors.

MCI's offer, if and when made, would involve required filings with
the Securities and Exchange Commission and the mailing of
appropriate materials to the public stockholders of Digex. Digex's
stockholders should read the tender offer statement on Schedule TO
(including a "going private" statement on Schedule 13E-3) to be
filed by MCI, which such stockholders will be able to obtain free
of charge from the SEC's Web site at http://www.sec.govor from
MCI by directing a request to WorldCom, Inc., 22001 Loudoun County
Parkway, Ashburn, VA 20147.

WorldCom, Inc. (WCOEQ, MCWEQ), which currently conducts business
under the MCI brand name, is a leading global communications
provider, delivering innovative, cost-effective, advanced
communications connectivity to businesses, governments and
consumers. With the industry's most expansive global IP backbone,
based on company-owned POPs, and wholly-owned data networks,
WorldCom develops the converged communications products and
services that are the foundation for commerce and communications
in today's market. For more information, go to http://www.mci.com


WORLDCOM INC: NAACP Urges Congress to Reform Bankruptcy Process
---------------------------------------------------------------
The National Association for the Advancement of Colored People
(NAACP) is calling on Congress to amend the U.S. Bankruptcy Code
to prohibit WorldCom and other companies from using the process to
"shed debt and other financial responsibilities."

In a June 22, 2003 letter to Senators Orrin Hatch and Patrick
Leahy -- the chair and ranking member of the Senate Judiciary
Committee -- Hilary O. Shelton, director of the NAACP Washington
bureau, wrote: "As you know, fraudulent bookkeeping causes
tremendous harm to employees, creditors, suppliers and investors;
many lose their life savings as a result. Many of the individuals
may well have become involved in these companies only after a
careful review of their finances. If it is proven that the
bookkeeping available to the public was fraudulent, those
companies should not, under Chapter 11 of the U.S. Bankruptcy
Code, be allowed to regroup and continue on, with little or no
remittance to the people whose lives were ruined by their lies and
deceit."

NAACP members passed a resolution at the 94th Annual NAACP
Convention in Miami calling for "Congressional Legislation to
Prevent Chapter 11 Corporate Bankruptcy Abuse." The resolution
points out that such fraud-riddled companies as WorldCom/MCI,
Enron and Global Crossing have "disproportionately" hurt
minorities and other groups. The resolution notes that Chapter 11
currently allows "bankrupt companies to shed debt and other
financial responsibilities, reorganize and then return to the
marketplace relatively unhampered by past obligations."

The NAACP resolution objects to the fact that current bankruptcy
laws permit "re-emergent companies (to) enjoy the competitive
advantages of greatly reduced debt and therefore a greatly reduced
cost structure, allowing them to employ artificially aggressive
pricing in competition with those companies." The resulting
situations constitute "unfair competition that puts companies that
are careful stewards of their finances at a competitive
disadvantage," according to the resolution.

The resolution states that "the National NAACP shall immediately
call upon the United States Congress and Senate to enact
legislation amending the U.S. Bankruptcy Code to prohibit the
filing of Chapter 11 bankruptcies by companies found guilty of
fraudulent bookkeeping."

Founded in 1909, the NAACP is the nation's oldest and largest
civil rights organization. Its half-million adult and youth
members throughout the United States and the world are premier
advocates for civil rights in their communities, conducting voter
mobilization and monitoring equal opportunity in the public and
private sectors.


* EYCF Promotes Borow, Llewellyn & Stevenson to Managing Dirs.
--------------------------------------------------------------
Ernst & Young Corporate Finance LLC announced the promotions of
Elizabeth Borow, John Llewellyn and Alexander Stevenson to
Managing Director, expanding the firm's restructuring capability
in two key markets.

Peter Schwab, president, EYCF, said, "We are fortunate to add the
talents of Borow, Llewellyn and Stevenson to our Managing Director
group. Borow and Llewellyn will enhance our strength in New York
while Stevenson will launch a new EYCF presence in the Northwest.
The wealth of restructuring insight and experience that these
talented professionals offer will help us better serve our
clients."

Borow focuses on advising and restructuring airlines and general
manufacturing in distressed situations. She joined EYCF in 2002
from Bank of America and Banc of America Securities, where she
spent 14 years originating, structuring and underwriting debt for
highly leveraged transactions and restructuring distressed
companies. Borow has a B.S. in Economics from the Wharton School
of Business and an M.B.A. from New York University.

Llewellyn joined Ernst & Young LLP in 1995 and has more than 10
years' experience restructuring transactions, strategic business
planning, and advising companies and lenders in the troubled
credit environment, with concentration in the telecommunications
and power industries.  He received his B.A. in economics from
Boston College in 1989 and his M.B.A. from the Fuqua School of
Business in 1995.

Stevenson is currently located in San Francisco but is planning to
relocate in the next few months to open and supervise a new office
in Seattle, Washington.  He has more than nine years' experience
in financial restructurings, recapitalizations, and mergers and
acquisitions.  Stevenson graduated from Michigan State University
in 1993 with a B.S. in Accounting.  He is a member of the
Northwest chapter of the Turnaround Management Association and the
Association of Restructuring Advisors.

Ernst & Young Corporate Finance LLC is a boutique investment bank
and an affiliate of Ernst & Young LLP, one of the world's premier
professional services organizations.  EYCF provides capital
markets, mergers and acquisitions, and restructuring advisory
services to companies, lenders, creditors, and other parties-in-
interest in troubled or potentially troubled credit situations.
Our financial advisory services are provided in the context of
early interventions, informal workouts, out-of-court
restructurings, and formal bankruptcy proceedings.  With 12
offices located across the United States, EYCF maintains one of
the largest groups of professionals fully dedicated to investment
banking and restructuring advisory services.


* BOND PRICING: For the week of July 28 - August 1, 2003
--------------------------------------------------------

Issuer                                Coupon   Maturity  Price
------                                ------   --------  -----
Adelphia Communications               10.875%  10/01/10    70
American & Foreign Power               5.000%  03/01/30    69
American Cellular                      9.500%  10/15/09    65
AMR Corp.                              9.000%  08/01/12    69
AMR Corp.                              9.000%  09/15/16    71
AnnTaylor Stores                       0.550%  06/18/19    66
Aurora Foods                           9.875%  02/15/07    49
Best Buy Co. Inc.                      0.684%  06/27/21    72
Burlington Northern                    3.200%  01/01/45    54
Comcast Corp.                          2.000%  10/15/29    31
Coastal Corp.                          6.950%  06/01/28    73
Conseco Inc.                           8.750%  02/09/04    36
Conseco Inc.                           8.750%  08/09/06    62
Conseco Inc.                           9.000%  04/15/08    63
Conseco Inc.                          10.750%  06/15/09    63
Continental Airlines                   8.388%  11/01/20    73
Cox Communications Inc.                0.348%  02/23/21    72
Cox Communications Inc.                0.426%  04/19/20    50
Cox Communications Inc.                2.000%  11/15/29    38
Cummins Engine                         5.650%  03/01/98    70
Dynex Capital                          9.500%  02/28/05     2
Elwood Energy                          8.159%  07/05/26    72
Finova Group                           7.500%  11/15/09    45
Fleming Companies Inc.                10.125%  04/01/08    14
Goodyear Tire & Rubber                 7.857%  08/15/11    74
Gulf Mobile Ohio                       5.000%  12/01/56    65
Health Management Associates           0.250%  08/16/20    63
Level 3 Communications Inc.            6.000%  09/15/09    65
Level 3 Communications Inc.            6.000%  03/15/10    64
Liberty Media                          3.500%  01/15/31    70
Liberty Media                          3.750%  02/15/30    58
Liberty Media                          4.000%  11/15/29    60
Lucent Technologies                    6.450%  03/15/29    68
Lucent Technologies                    6.500%  01/15/28    65
Magellan Health                        9.000%  02/15/08    48
Mirant Corp.                           2.500%  06/15/21    42
Mirant Corp.                           5.750%  07/15/07    42
Missouri Pacific Railroad              4.750%  01/01/30    71
Missouri Pacific Railroad              5.000%  01/01/45    66
NTL Communications Corp.               7.000%  12/15/08    19
Northern Pacific Railway               3.000%  01/01/47    52
Northwestern Corporation               6.950%  11/15/28    65
Northwestern Corporation               7.875%  03/15/07    74
Northwestern Corporation               8.750%  03/15/12    72
Redback Networks                       5.000%  04/01/07    41
Revlon Consumer Products               8.125%  02/01/06    64
Revlon Consumer Products               8.625%  02/01/08    47
United Airlines                       10.670%  05/01/04     9
US Timberlands                         9.625%  11/15/07    60
Westpoint Stevens                      7.875%  06/15/08    22
Xerox Corp.                            0.570%  04/21/18    65

                          *********

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

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

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

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

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

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

                          *********

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

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

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

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

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

                *** End of Transmission ***