TCR_Public/030815.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Friday, August 15, 2003, Vol. 7, No. 161

                          Headlines

ACP HOLDING: Section 341(a) Meeting Convenes on September 19
ACTERNA CORP: Court OKs Piper Jaffray as Advisor on Final Basis
ADELPHIA COMMS: Court Okays Spencer Stuart as Search Consultant
AGWAY: CEO Michael Hopsicker Meets with Syracuse-Base Employees
AIR CANADA: Reports Decline in July 2003 Revenue Passenger Miles

AIR CANADA: Projected Cash Budget through October 24, 2003
AIRNET COMMS: Closes $16 Million Senior Secured Debt Financing
ALASKA COMMS: S&P Ratchets Corp. Credit Rating Up a Notch to B+
AM COMMUNICATIONS: Considering Filing for Bankruptcy Protection
AMERCO REAL ESTATE: Case Summary & 19 Largest Unsec. Creditors

AMERICAN CELLULAR: Evades Bankruptcy Following Exchange Offers
AMERICAN HOMEPATIENT: June 30 Net Capital Deficit Down to $38MM
AMES DEPARTMENT: Gets OK to Hire Storch Amini as Special Counsel
AMPEX CORP: June 30 Balance Sheet Insolvency Narrows to $145MM
ATCHISON CASTING: Wants to Employ Ordinary Course Professionals

BAYOU STEEL: Brings-In James E. Howe as New Vice-Pres. of Sales
BEVSYSTEMS INT'L: Firms-Up Launching of Life O2 Distribution
BRIDGE INFO.: Plan Administrator Sues Gulfcoast to Recoup $2MM
BRIDGEWATER SPORTS: Wants Clearance for Cash Collateral Use
BUDGET GROUP: Wants Approval of Proceeds Allocation Procedures

BURLINGTON: Disclosure Statement Hearing Set for August 25, 2003
CABLETEL COMMS: Will Publish Second Quarter Results on Tuesday
COVANTA: Wrestles with Town of Babylon over Postpetition Claims
DRESSER INC: Obtains Waiver of Defaults Under Credit Agreement
DVI INC: Will File for Chapter 11 Protection Soon

EAGLE FOOD CENTERS: Inks Agreements to Sell Assets of 4 Stores
EL PASO CORP: Second Quarter Net Loss Hits $1.2 Billion Mark
ELDERTRUST: Completes Restructuring of Lease on Three Properties
FEDERAL-MOGUL: Wants Nod for Amended & Restated Credit Agreement
FLEMING COMPANIES: Court Okays KPMG as Committee's Accountants

FOAMEX INT'L: June 29 Balance Sheet Insolvency Tops $190 Million
GE COMMERCIAL: Fitch Rates Six Note Classes at Low-B Levels
GE HOME EQUITY: Fitch Further Junks Class B-2 Rating to C
GENSYM CORP: June 30 Working Capital Deficit Tops $1 Million
GLOBAL CROSSING: Pulling Plug on MFS Cable Capacity Sales Pact

GLOBALSTAR LP: Second Quarter Net Loss Widens 11% to $17 Million
GRAHAM PACKAGING: June 30 Net Capital Deficit Narrows to $437MM
HEALTHSOUTH: Sets August 29 as Record Date for Interest Payment
HOMESTORE INC: June 30 Working Capital Deficit Narrows to $57MM
I-INCUBATOR.COM: Hires Windes & McClaughry as New Accountants

INTEGRATED INFO.: June 30 Balance Sheet Upside-Down by $870K
KENZER CORP: Case Summary & 20 Largest Unsecured Creditors
LEAP WIRELESS: Committee Has Until Sept. 26 to Challenge Claims
LYNX THERAPEUTICS: Red Ink Continued to Flow in Second Quarter
MIRANT CORP: Seeks Approval of BSI's Appointment as Claims Agent

MOTELS OF AMERICA: Lease Decision Period Extended Until Dec. 8
MRS. FIELD'S: June 28 Working Capital Deficit Widens to $23 Mil.
NATIONAL CENTURY: Plan Filing Exclusivity Extended to Sept. 15
NEXSTAR FINANCE: Red Ink Continued to Flow in Second Quarter
NUCENTRIX BROADBAND: Exploring Alternatives Including Bankruptcy

OPAL CONCEPTS: Cheveux LLC Firms-Up Purchase of Fantastic Sams
OWENS CORNING: Akzo Nobel's $3-Mil. Claim Disallowed & Expunged
PACIFIC GAS: Court Fixes Solicitation and Tabulation Procedures
PETROLEUM GEO: Has Until Sept. 27 to File Schedules & Statements
PG&E CORP: Will Publish Second Quarter Fin'l Results on Tuesday

PG&E NATIONAL: Court Approves Clifford Chance as Special Counsel
PILLOWTEX CORP: Wants Approval of $120MM DIP Credit Agreement
PORTA SYSTEMS: Bankruptcy Filing Likely if Debt Workout Fails
PROCOM TECHNOLOGY: Nasdaq Yanks Shares Off Effective August 14
PROTARGA INC: Case Summary & 20 Largest Unsecured Creditors

ROMACORP INC: Taps Houlihan Lokey to Aid in Debt Restructuring
SALS 2001-2: Class D Credit-Linked Notes Rating Cut to BB+
SAMUELS JEWELERS: Secures $3 Million Interim DIP Financing
SMITHFIELD FOODS: Inks Definitive Pact to Acquire Cumberland Gap
SONA DEV'T: Hires LaBonte to Replace Grant Thornton as Auditors

SPECTRUM RESTAURANT: Case Summary & Largest Unsecured Creditors
STOCKHORN CDO: Fitch Cuts Class E Mezzanine Note Rating to BB-
TECH DATA: Will Publish Second Quarter Fin'l Results on Aug. 27
TENFOLD CORP: June 30 Net Capital Deficit Narrows to $12 Million
TESORO PETROLEUM: Improved Liquidity Spurs S&P to Affirm Ratings

THERMOVIEW INDUSTRIES: Reports Improved Second Quarter Results
TROPICAL SPORTSWEAR: S&P Places Low-B Rating on Watch Negative
UNION ACCEPTANCE: Indiana Court Confirms Plan of Reorganization
UNITED AIRLINES: AirLiance Secures Stay Relief to Setoff Claims
U.S. LIQUIDS: Violates Certain Covenants Under Credit Facility

U.S. STEEL: ISG Intends to Acquire Plate Facility in Indiana
USG CORP: Court Approves Scope Expansion of CIBC Engagement
VALEO INVESTMENT: S&P Lowers & Keeps Various Ratings on Watch
VENTAS INC: Files SEC Form 8-K to Comply with SFAS 145
VERTICAL COMPUTER: External Auditors Air Going Concern Doubt

VERTICALNET INC: June 30 Balance Sheet Upside-Down by $438,000
WASATCH CREST: S&P Assigns R Financial Strength Rating
WEIRTON STEEL: Wants to Implement Key Employee Retention Program
WESTAR FINANCIAL: Settles Claims Dispute with Bank One NA
WESTPOINT STEVENS: Intends to Assume Five Alabama Gas Contracts

WILSHIRE CREDIT: Fitch Takes Rating Actions on Two Issues
WORLDCOM INC: Names Richard Roscitt President and COO
WORLDCOM INC: Wants Approval to Assume Amended Trapelo Lease
WRC MEDIA: Reports Slight Decline in Second Quarter Results

* BOOK REVIEW: AS WE FORGIVE OUR DEBTORS: Bankruptcy and
               Consumer Credit in America

                          *********

ACP HOLDING: Section 341(a) Meeting Convenes on September 19
------------------------------------------------------------
The United States Trustee for Region III will convene a meeting of
ACP Holding Company and its debtor-affiliates' creditors on
September 19, 2003, 10:00 a.m., at J. Caleb Boggs Federal
Building, 2nd Floor, Room 2112, 844 King Street, Suite 2313 in
Wilmington, Delaware.  This is the first meeting of creditors
required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases.

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

Neenah Foundry Company, the operating subsidiary of ACP Holding
Company is headquartered in Neenah, Wisconsin.  The Company is in
the business of gray & ductile iron foundries, metal machining to
specifications and steel forging.  The Company filed for chapter
11 protection on August 5, 2003 (Bankr. Del. Case No. 03-12414).
Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl Young Jones &
Weintraub P.C., and James H.M. Sprayregen, P.C., Esq., and James
W. Kapp III, Esq., at Kirkland & Ellis LLP represent the Debtors
in their restructuring efforts. When the Company filed for
protection from its creditors, it listed $494,046,000 in total
assets and $580,280,000 in total debts.


ACTERNA CORP: Court OKs Piper Jaffray as Advisor on Final Basis
---------------------------------------------------------------
Acterna Corp., and its debtor-affiliates sought and obtained the
Court's authority to employ, on a final basis, U.S. Bancorp
Piper Jaffray Inc., as their financial advisor in connection with
the possible sale of all or substantially all of the assets of
da Vinci Systems, Inc., one of their principal business
segments.

Piper Jaffray, during its engagement under a letter agreement
dated August 8, 2002, agreed to devote substantial time and energy
to the potential sale of at least 20% of da Vinci capital stocks
or assets.  Piper Jaffray:

   (a) prepared an informational memorandum regarding da Vinci's
       business;

   (b) conducted a direct search for potential purchasers of da
       Vinci;

   (c) evaluated inquiries from interested parties; and

   (d) obtained bids and assisted the Debtors with the
       negotiation of a letter of intent and asset and stock
       purchase agreements with a potential acquirer of da
       Vinci's assets.

During the pendency of their Chapter 11 cases, the Debtors will
compensate Piper Jaffray through these terms:

   (1) A transaction fee equal to 2.5% of the aggregate
       transaction value up to $40,000,000, plus 3.5% of the
       aggregate transaction value from $40,000,000 to
       $50,000,000, plus 5% of the aggregate transaction value
       over $50,000,000.  The minimum Transaction Fee under the
       Agreement is $700,000;

   (2) The applicable transaction fee will be paid in
       immediately available funds on the consummation of the
       transaction; and

   (3) Notwithstanding the termination of the Agreement by Piper
       Jaffray or the Debtors, Piper Jaffray is entitled to the
       applicable transaction fee in the event that, at any time
       before the expiration of 12 months after the termination,
       an agreement is entered into with respect to a sale of 20%
       or more of the da Vinci capital stock or assets which
       is thereafter consummated.

The Debtors have paid Piper Jaffray $100,000 as a retention fee.
(Acterna Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


ADELPHIA COMMS: Court Okays Spencer Stuart as Search Consultant
---------------------------------------------------------------
Adelphia Communications and its debtor-affiliates obtained
permission from the Court to employ Spencer Stuart, nunc pro tunc
to April 30, 2003, which was the date that the firm began its
work.

As previously reported, the Company's Board is engaged in a
comprehensive search for new independent directors to replace the
directors that have left the Board since May 2002 when the Rigases
resigned.

Spencer Stuart will provide executive search services to the
Debtors, including:

      (i) developing position and candidate specifications to meet
          the Debtors' requirements and targets;

     (ii) identifying and researching potential executive
          candidates to create the largest and most qualified pool
          of potential candidates;

    (iii) interviewing and evaluating candidates;

     (iv) preparing candidate profiles in anticipation of
          introductory meetings between the Debtors and qualified
          candidates; and

      (v) advising the Debtors throughout the Board selection
          process.

In consideration for Spencer Stuart's services, Spencer Stuart is
entitled to a $110,000 fee for each of the first two search
assignments, billed in three installments of $37,000, $37,000 and
$36,000 for each search, plus related expenses.  Furthermore, as
the Debtors have already pursued other candidates, Spencer Stuart
will evaluate and close a third candidate, with whom the Debtors
have already initiated discussions, at no charge to the Debtors.
If Spencer Stuart is unable to close this candidate or any
individual already identified by the Debtors, Spencer Stuart will
initiate a third search assignment for a $55,000 flat fee plus
related expenses.  Thereafter, for each additional search, Spencer
Stuart will charge the Debtors a $55,000 flat fee plus related
expenses. (Adelphia Bankruptcy News, Issue No. 38; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


AGWAY: CEO Michael Hopsicker Meets with Syracuse-Base Employees
---------------------------------------------------------------
Agway Inc.'s Chief Executive Officer, Michael Hopsicker, met with
Syracuse-based employees on August 7, 2003 to provide a progress
report on the potential sale of the businesses and the Company's
Chapter 11 Plan, and to discuss the status of other issues
including the Pension Plan and retiree benefits.

Agway, an agricultural co-op, has 69,000 members, primarily in the
Northeast. The co-op's Agricultural Group sells feeds, seeds,
fertilizers, and other farm supplies to members and other growers.
Agway's Country Products Group processes and markets fresh produce
(mostly under the Country Best label). It also invests in new
agricultural technology. Agway Energy Products sells fuel and HVAC
systems and markets electricity and gas in deregulated states.
Agway also offers leasing services.

Agway filed for Chapter 11 protection on October 1, 2002, in the
U.S. Bankruptcy Court for the Northern District of New York
(Utica) (Bankr. Case No. 02-65872).


AIR CANADA: Reports Decline in July 2003 Revenue Passenger Miles
----------------------------------------------------------------
Air Canada mainline flew 13.4 percent fewer revenue passenger
miles (RPMs) in July 2003 than in July 2002, according to
preliminary traffic figures. Capacity decreased by 15.4 percent,
resulting in a load factor of 78.1 percent, compared to 76.2
percent in July 2002; an increase of 1.9 percentage points.

Jazz, Air Canada's regional airline subsidiary, flew 7.3 percent
more revenue passenger miles (RPMs) in July 2003 than in July
2002, according to preliminary traffic figures. Capacity decreased
by 7.1 percent, resulting in a load factor of 62.3 percent,
compared to 53.9 percent in July 2002; an increase of 8.4
percentage points.

"The year-over-year traffic shortfall, which progressively
declined for the past two months, is a clear indication that the
worst of the SARS related traffic decline is behind us. In
addition, the improved load factor, the first increase in nine
months, is a reflection of our ongoing efforts to better match
capacity with demand," said Rob Peterson, Executive Vice President
and Chief Financial Officer.

"Domestic mainline traffic, reflecting pent up demand as well as
lower average fares, came in just under last year's level while
transatlantic demand rose due to new services. U.S. transborder
traffic remained weak within a very competitive market
characterized by major increases in U.S. carrier capacity. While
currently at a low level, Pacific demand is beginning to show
encouraging signs. In response, we announced last month the
reinstatement of all daily services to Asia. We remain, however,
concerned with the weak overall pricing environment which reflects
the ongoing softness in the business market as well as the
continued reduction in travel demand worldwide," said Mr.
Peterson.


AIR CANADA: Projected Cash Budget through October 24, 2003
----------------------------------------------------------
Air Canada provides the Court and its creditors with updated cash
flow projections for the period July 26, 2003 to October 24,
2003.  The Applicants target a C$76,500,000 net cash inflow for
the next 13 weeks after payment of aircraft lease payments to
lessors who have executed restructured lease agreements.  This
would result in an ending cash balance at October 24, 2003 equal
to C$906,000,000.  Net cash outflow after all current contractual
lease payments is projected to be C$315,600,000.

The Applicants recorded C$405,600,000 in net cash inflow for the
period of April 1 to July 25, 2003.  As a result, the Applicants'
cash balance in its Canadian and United States bank accounts as
at July 25, 2003 was C$829,500,000.  This positive variance is
the result of delays in the timing of payments to various
suppliers as well as efforts to reduce costs wherever possible.

                            Air Canada
                  Consolidated Cash Flow Forecast
         For the Period June 26 through October 24, 2003

Receipts

   Credit card & direct passenger receipts      C$1,467,000,000
   Airtime and travel agent settlement              503,800,000
   Cargo/Freight                                     52,400,000
   Accounts receivable                               99,000,000
   Miscellaneous                                     37,500,000
   CIBC Facility                                              0
   Funding from pension plan                         23,800,000
                                               ----------------
   Total Receipts                               C$2,183,500,000
                                               ----------------

Disbursements

   Payroll & Benefits                            (C$612,100,000)
   Retiree payments                                 (23,800,000)
   Pension contributions                                      0
   Fuel                                            (323,200,000)
   Airport related charges                         (242,900,000)
   Aircraft maintenance                            (126,200,000)
   Food, Beverages & Supplies                       (80,200,000)
   IBM Advantis (Computer support)                  (60,500,000)
   Marketing                                        (21,700,000)
   Travel agent incentive commission                (25,100,000)
   Insurance                                        (25,300,000)
   Funding of foreign operations                    (24,300,000)
   Other operating costs                           (188,600,000)
   U.S. immigration tax remittances                 (24,100,000)
   Airport improvement fees                         (33,400,000)
   GST remittances                                  (35,900,000)
   Transportation tax                               (28,900,000)
   Security tax remittances                         (52,100,000)
   Professional fees                                (13,000,000)
                                               ----------------
   Operating Disbursements                     (C$1,941,300,000)
                                               ----------------

   Capital Expenditures                           (C$54,700,000)
   Repayment of CIBC Facility                       (83,600,000)
   Interest payments and fees re CIBC Facility       (3,200,000)
   Other                                                      0
                                               ----------------
   Non-Operating Disbursements                   (C$141,400,000)
                                               ----------------

   Net Aeroplan Cashflows                            40,200,000
   Net Air Canada Vacations Cashflows                22,200,000
                                               ----------------
   Cash Flows Re: Non-CCAA Applicants              C$62,400,000
                                               ----------------

Aircraft lease payments                             (86,600,000)

Net Cash Inflow/(Outflow)                            76,500,000

Opening cash balance                                829,500,000
                                               ----------------
Ending cash balance                               C$906,000,000
                                               ================
(Air Canada Bankruptcy News, Issue No. 10; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


AIRNET COMMS: Closes $16 Million Senior Secured Debt Financing
--------------------------------------------------------------
AirNet Communications Corporation (Nasdaq:ANCC) has issued
$16,000,000 senior secured convertible notes with voting rights.
The debt financing was provided by TECORE Wireless Systems,
AirNet's largest customer and an existing supplier, and SCP
Private Equity Partners, an existing investor in AirNet. The notes
will be advanced in installments and will accrue interest at the
rate of twelve percent. The debt will mature on August 12, 2007.

AirNet will use the proceeds from the investment, after payment of
transaction expenses and repayment of its bridge loan from TECORE
and SCP, to fund operations.

AirNet also announced that existing Series B preferred stock was
converted into common stock at the closing of the financing.

The debt securities described herein will not be registered under
the Securities Act of 1933, and were offered and sold under an
exemption from the registration provisions of that Act. The notes
will not be available for resale absent registration or an
exemption from registration under that Act.

TECORE Wireless Systems supplies turn-key wireless mobility
networks for regional and country-wide deployments and solutions
for migrating existing networks to advanced digital wireless
technologies while expanding coverage and capacity. The company's
turn-key solutions include its AirCore(R) Mobile Switching System
at the core of the network in conjunction with GSM/GPRS, CDMA and
TDMA base station solutions to deliver fully-integrated feature-
rich services. With over twenty-five network deployments
worldwide, TECORE has also achieved certification to the
prestigious ISO 9001:2000 Quality Standard. Named one of the "20
Firms for the Next Generation", TECORE is a global leader in
converging wireless and IP networks and wireless enterprise
systems solutions. For more information, please visit the TECORE
Web site at http://www.tecore.com

SCP Private Equity Partners is a private equity firm focused on
later stage companies in high growth industries, with an emphasis
on technology. SCP generally invests in companies with
commercially proven technologies that need capital to implement
and market their business concepts. SCP targets the information
technology, internet infrastructure, financial services, wireless
communications, life sciences, security and education sectors. SCP
supports its investment portfolio with a rich base of strategic,
operating and financial expertise and an extensive networking
capacity to access capital, recruit management and facilitate
favorable strategic alliances.

AirNet Communications Corporation is a leader in wireless base
stations and other telecommunications equipment that allow service
operators to cost effectively and simultaneously offer high-speed
data and voice services to mobile subscribers. AirNet's patented
broadband, software-defined AdaptaCell(R) base station solution
provides a high capacity base station with a software upgrade path
to high speed data. The Company's Digital AirSite(R) Backhaul
Free(TM) base station carries wireless voice and data signals back
to the wireline network, eliminating the need for a physical
backhaul link, thus reducing operating costs. AirNet has 69
patents issued or pending. More information about AirNet may be
obtained by calling 321.984.1990, or by visiting the AirNet Web
site at http://www.airnetcom.com

                           *    *    *

              Liquidity and Going Concern Uncertainty

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

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

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

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

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

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

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


ALASKA COMMS: S&P Ratchets Corp. Credit Rating Up a Notch to B+
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Alaska
Communications Systems Group Inc. and its intermediate holding
company, Alaska Communications Systems Holdings Inc. The corporate
credit rating was lowered to 'B+' from 'BB-'. The outlook is
stable.

"The downgrade reflects Standard & Poor's concern about heavy
competitive pressure in the core incumbent local access line
operations, reduced business and cash flow diversity following
ACS's sale of its high-margin directories business, slower-than-
anticipated progress in generating revenue from the integrated
services contract with the state of Alaska, and the potential for
increased competition in the wireless segment following Dobson
Communications Corp.'s acquisition of AT&T Wireless Services
Inc.'s Alaskan properties," said credit analyst Eric Geil.

Ratings on ACS are based on strong competition in the local retail
access line business that is eroding the retail access line base,
dependence on a narrow market with limited growth opportunities,
EBITDA losses in the Internet and long-distance segments, and
financial risk from acquisition and capital spending-related debt.
These factors are partially mitigated by the company's position as
the leading incumbent local exchange carrier in Alaska and second-
largest wireless provider in the state, as well as by a measure of
financial cushion from a roughly $65 million cash balance.

ACS had about $65 million cash as of June 30, 2003. The company
generates discretionary cash flow at a roughly break-even level.
ACS has historically funded discretionary cash flow losses with
its cash balance, which Standard & Poor's expects the company will
do in the event of future discretionary cash flow losses. ACS had
$75 million of available borrowing capacity under its revolving
credit facility as of June 30, 2003. Debt maturities are light
through 2005, consisting primarily of 1% annual bank principal
amortization payments prior to required bullet repayments in
2006. Bank covenant stepdowns are moderate and offer home cushion
for near-term operating weakness.


AM COMMUNICATIONS: Considering Filing for Bankruptcy Protection
---------------------------------------------------------------
AM Communications, Inc. (OTC Bulletin Board: AMCME), a leading
supplier of software-driven network reliability solutions for HFC
broadband network enterprises, has implemented a two-week furlough
of members of its corporate, sales and administrative staff as
part of a restructuring plan to reduce costs. The furlough plan
affects approximately 42% of this workforce. The length of the
furloughs may be extended if deemed necessary by the Company.

AM also announced that Kenneth (Chip) L. Wiltse, President and
CEO, William J. Stape, a director of the Company, and George L.
Kotkiewicz, a director of the Company, have each resigned for
personal reasons, effective August 8, 2003. The Board has
appointed Lawrence W. Mitchell, former in-house general counsel,
to serve as President and CEO. The Company has not yet filled the
vacancies in its Board of Directors caused by the resignations of
Mr. Stape and Mr. Kotkiewicz.

The difficult business and economic climate that has affected the
broadband communications industry as a whole continues to
negatively impact AM's sales and profitability. As a result, AM
and its subsidiaries continue to experience significant cash flow
difficulties and are in default of several financial covenants set
forth in their loan documents with their principal lenders,
LaSalle Business Credit, LLC and Chatham Investment Fund I, LLC.
While neither LaSalle nor Chatham has elected, to date, to pursue
any such remedy, as a result of said defaults by AM and its
subsidiaries, LaSalle and Chatham have the right to (a) refuse to
extend further advances to AM and its subsidiaries under any
credit facility, (b) demand payment in full of all outstanding
borrowings, and/or (c) foreclose on the collateral provided to
secure the credit facilities, which collateral represents
substantially all of the assets of AM and its subsidiaries. AM and
its subsidiaries would not have sufficient funds to pay the full
amount due in the event that LaSalle and Chatham demand payment in
full of the outstanding obligations owed to them.

AM is aggressively pursuing all available strategies to preserve
the value of its core businesses, including negotiating with its
existing lenders on restructuring its existing debt obligations,
seeking additional financing to provide short-term liquidity, and
considering protection pursuant to the US Bankruptcy Code. AM is
also in discussions with several entities relating to possible
sales of certain of its assets. No agreement has yet been reached
with respect to any of these proposed transactions.

AM Communications, Inc., located in Quakertown, Pennsylvania, is a
leading supplier of software-driven network reliability solutions
for HFC broadband network enterprises. AM's advanced systems and
service offerings employ leading-edge technologies that embody the
Company's 25+ years of HFC experience and expertise. Through its
wholly owned subsidiary, AM Broadband Services, Inc., AM provides
technical services and solutions that are software-optimized for
the telecommunications industry. Services include design,
infrastructure development, system activation and certification,
network reliability and residential "last mile" fulfillment
services. Through a strategic partnership with NeST Technologies,
AM is the only systems and services provider in the broadband
sector that has CMM Level 5 credentials for software development.
Visit http://www.amcomm.comto learn more about the Company.


AMERCO REAL ESTATE: Case Summary & 19 Largest Unsec. Creditors
--------------------------------------------------------------
Debtor: Amerco Real Estate Company
        2727 N. Central Avenue
        Suite 500
        Phoenix, Arizona 85004-1126

Bankruptcy Case No.: 03-52790

Type of Business: The Debtor is an affiliate of AMERCO

Chapter 11 Petition Date: August 13, 2003

Court: District of Nevada (Reno)

Judge: Gregg W. Zive

Debtors' Counsel: Bruce Thomas Beesley, Esq.
                  Beesley, Peck, Matteoni, Ltd
                  5011 Meadowood Mall Way #300
                  Reno, NV 89502
                  Tel: (775) 827-8666

                        -and-

                  Craig D. Hansen, Esq.
                  Squire, Sanders & Dempsey LLP
                  40 North Central #2700
                  Phoenix, AZ 85004
                  Tel: (602) 528-4000

Estimated Assets: More than $100 Million

Estimated Debts: More than $100 Million

Debtor's 19 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
AMERCO                      Intercompany          $201,827,000
2727 N. central Avenue      Obligations
Phoenix, AZ 85004

The Northwestern Mutual     Unsecured Notes        $35,000,000
Life Insurance Co.         Series A
Securities Dept.
720 East Wisconsin Avenue
Milwaukee, WI 53202

Monumental Life Insurance   Unsecured Notes        $21,000,000
Company                    Series A
AEGON USA Investment Mgmt.
LLC
Director of Placements
4333 Edgewood Rd. NE
Cedar Rapids, IA 52499-5335

Nationwide Life Insurance   Unsecured Notes        $19,000,000
Company                    Series A
Corporate Fixed-Income
Securities
One Nationwide Plaza
(1-33-07)
Columbus, OH 43215-2220

Transamerica Life Insurance Unsecured Notes        $10,500,000
Co.                        Series A
AEGON USA Investment Mgt.
LLC
Director of Private
Placements
4333 Edgewood Road NE
Cedar Rapids, IA 52499-5335

The Canada Life Assurance   Unsecured Notes         $5,000,000
Co.                        Series B
Paul English, US Investments
Division
330 Universiy Avenue
SP-11
Toronto M5G 1R8 Canada

AUSA Life Insurance Co.,    Trade Debt              $3,500,000
Inc.
AEGON USA Investment Mgt.
LLC
Director of Private
Placement
4333 Edgewood Road N.E.
Cedar Rapids, IA 89155

Nationwide Indemnity Co.    Unsecured Notes         $3,000,000
Corporate Fixed-Income      Series A
Securities
One Nationwide Plaza
(1-33-07)
Columbus, OH 43215-2220

Cushman & Wakefield of      Trade Debt                $555,928
Arizona
2525 E Camelback Road
Suite 1000
Phoenix, AZ 85016

Landata Site Services,      Trade Debt                $259,900
Inc.
1421 Champion Suite 307
Carrollton, TX 75006

First American Title        Trade Debt                $250,000
Insurance
111 West Monroe Suite 410
Phoenix, AZ 85003

Du Page County Tax          Trade Debt                 $19,269
Collector

Mason Refrigeration, Inc.   Trade Debt                  $9,957

Richmond County Tax         Trade Debt                  $3,680
Collector

Robert A. Stranger &        Trade Debt                  $4,285
Co., Inc.

Clark County Treasurer      Trade Debt                  $7,683

Ford Jeter & Bowlus         Trade Debt                  $6,102

Lake County Treasurer       Trade Debt                  $5,068

Anthem Community Council    Trade Debt                  $4,071


AMERICAN CELLULAR: Evades Bankruptcy Following Exchange Offers
--------------------------------------------------------------
Dobson Communications Corporation (Nasdaq:DCEL) and American
Cellular Corporation have accepted all American Cellular's
outstanding 9-1/2% Senior Subordinated Notes (CUSIP No. 025058AF5)
that were tendered in connection with the proposed restructuring
of American Cellular's indebtedness and equity ownership.

The offers, which expired at 5 p.m. ET, Tuesday, August 12, 2003,
were extended to the holders of $700 million outstanding principal
amount of the Notes. As of the August 12 deadline, 97.4 percent of
the outstanding principal amount of the Notes had been tendered.
The companies have waived the condition of the exchange offers
that holders of at least 99.5 percent of the aggregate principal
amount of American Cellular's outstanding Notes accept the
exchange offers and tender their Notes in order for the exchange
to be completed.

Dobson and American Cellular expect to close the exchange
transaction on Monday, August 18, or as soon thereafter as is
practicable, and then promptly proceed with the out-of-court
restructuring of American Cellular's indebtedness and equity
ownership. Accordingly, there will not be a restructuring through
the alternative prepackaged bankruptcy plan.

Pursuant to the offer, Dobson Communications and American Cellular
will exchange an aggregate of up to $50 million in cash,
45,054,800 shares of Dobson Communications Class A common stock
and 700,000 shares of a new series of Dobson Communications
convertible preferred stock having an aggregate liquidation
preference of $125 million, convertible into a maximum of
14,285,714 shares of Dobson Communications Class A common stock,
for the $700 million outstanding principal amount of Notes.
American Cellular will become a wholly owned, indirect subsidiary
of Dobson Communications.

The companies have agreed to file a re-sale shelf registration
statement for the new Class A common and preferred stock within 20
days of the closing of the exchange.

At the time of the exchange, neither the common nor preferred
shares to be issued by Dobson Communications, nor any equity
securities that may be issued by American Cellular in the exchange
offers, will be registered under the Securities Act of 1933. Any
shares of Dobson Communications common and preferred stock, and
any equity securities of American Cellular that are issued in the
exchange offers may not be offered or sold in the United States
absent registration or an applicable exemption from the
registration requirements of the Securities Act of 1933.

Dobson Communications is a leading provider of wireless phone
services to rural markets in the United States. Headquartered in
Oklahoma City, the Company owns or manages wireless operations in
16 states. For additional information on the Company and its
operations, please visit its Web site at http://www.dobson.net


AMERICAN HOMEPATIENT: June 30 Net Capital Deficit Down to $38MM
---------------------------------------------------------------
American HomePatient, Inc. (OTC: AHOM) reported net income of $4.5
million and revenues of $82.9 million for the second quarter ended
June 30, 2003. For the six months ended June 30, 2003, the Company
reported net income of $8.9 million and revenues of $165.4
million.

The Company's net income of $4.5 million for the second quarter of
2003 compares to a net loss of $0.1 million for the second quarter
of 2002. Net income for the current quarter includes approximately
$2.0 million of reorganization items related to the bankruptcy
reorganization and excludes approximately $5.0 million in non-
default interest expense and related fees that would have been
paid during the period had the Company not sought bankruptcy
protection.

The Company's net income of $8.9 million for the first six months
of 2003 compares to a net loss of $66.9 million for the first six
months of 2002. Net income for the first six months of 2003
includes approximately $2.9 million of reorganization items and
excludes approximately $10.0 million of non-default interest
expense and related fees that would have been paid during the
period had the Company not sought bankruptcy protection. The
Company's net loss of $66.9 million for the six months ended
June 30, 2002 includes a $68.5 million charge for the cumulative
effect of a change in accounting principle associated with the
Company's adoption of Statement of Financial Accounting Standards
No. 142, an income tax benefit of $1.9 million, and a gain on the
sale of the assets of an infusion center of $0.7 million.
Excluding these items in 2002 and excluding the reorganization
items in 2003 and including non-default interest expense and
related fees in 2003 that the Company would have paid in 2003 had
the Company not sought bankruptcy protection, American
HomePatient's net income increased in the first six months of 2003
compared to the first six months of 2002 by approximately $2.7
million, primarily due to increased same-location revenues and
lower bad debt expense.

The Company's revenues of $82.9 million for the second quarter of
2003 represent an increase of $3.8 million, or 4.8%, over the
second quarter of 2002. The Company's revenues for the first six
months of 2003 of $165.4 million represent an increase of $6.5
million over the first six months of 2002. In March of 2002, the
Company sold substantially all of the assets of an infusion
center, which contributed $1.9 million in revenues during the
first six months of 2002. Excluding the revenues of the sold
center in the first six months of 2002, same-location revenues in
the first six months of 2003 increased $8.4 million, or 5.4%,
compared to the same period of last year.

Earnings before interest, taxes, depreciation, and amortization
(EBITDA) is a non-GAAP financial measurement that is calculated as
revenues less expenses other than interest, taxes, depreciation
and amortization. EBITDA for the second quarter of 2003 and for
the second quarter of 2002 was $10.6 million and $11.7 million,
respectively. For the second quarter of 2003, EBITDA, excluding
reorganization items of $2.0 million, was $12.6 million or 15.2%
of revenues. For the second quarter of 2002, EBITDA, excluding
Chapter 11 financial advisory expenses incurred prior to filing
bankruptcy of $0.3 million and other income of $0.1 million, was
$11.9 million or 15.1% of revenues. For the first six months of
2003, EBITDA, excluding reorganization items of $2.9 million and
other expense of $0.1 million, was $23.6 million or 14.2% of
revenues. For the first six months of 2002, EBITDA, excluding the
cumulative effect of change in accounting principle of $68.5
million, Chapter 11 financial advisory expenses incurred prior to
filing bankruptcy of $0.3 million, a gain on sale of assets of a
center of $0.7 million, and other income of $0.2 million, was
$22.4 million or 14.1% of revenues.

Overall, operating expenses increased in the second quarter and
first six months of 2003 compared to the second quarter and first
six months of 2002 by approximately $1.2 million and $2.1 million,
respectively, primarily due to personnel-related expenses
associated with the hiring of additional account executives to
improve the Company's sales and marketing efforts and increased
insurance expenses. These expenses were partially offset by lower
bad debt expense. As a percent of revenues, bad debt expense
declined from 3.4% in the second quarter of 2002 to 2.7% in the
second quarter of 2003 and declined from 4.3% in the first six
months of 2002 to 3.2% in the first six months of 2003. The
reduction in bad debt expense primarily is the result of continued
operational improvements and processing efficiencies at the
Company's billing centers.

At June 30, 2003, American HomePatient's balance sheet shows a
total shareholders' equity deficit of about $38 million.

                    Bankruptcy Proceeding Update

As announced previously, American HomePatient, Inc. and 24 of its
subsidiaries filed voluntary petitions for relief to reorganize
under Chapter 11 of the U.S. Bankruptcy Code on July 31, 2002. On
July 1, 2003, the Company's plan of reorganization became
effective and the Company emerged from bankruptcy protection.
Pursuant to the plan, all of the Company's creditors will be paid
in full and the shareholders of the Company will retain all of
their equity interests in the Company.

As previously announced, the hearing before the Bankruptcy Court
on confirmation of the plan of reorganization had been held on
April 23-25 and 28-29, 2003, and on May 15, 2003, the Bankruptcy
Court entered a memorandum opinion overruling the secured lenders'
objections to the plan. On May 27, 2003, the Bankruptcy Court
entered an order confirming the plan and on June 30, 2003, the
United States District Court in the Middle District of Tennessee
rejected the secured lenders' request to stay the effective date
of the plan. The secured lenders have appealed the order to
confirm the plan. The Company will contest the appeal and seek to
have the Bankruptcy Court's confirmed order affirmed on appeal.

American HomePatient, Inc. is one of the nation's largest home
health care providers with 289 centers in 35 states. Its product
and service offerings include respiratory services, infusion
therapy, parenteral and enteral nutrition, and medical equipment
for patients in their home. American HomePatient, Inc.'s common
stock is currently traded in the over-the-counter market or, on
application by broker-dealers, in the NASD's Electronic Bulletin
Board under the symbol AHOM.


AMES DEPARTMENT: Gets OK to Hire Storch Amini as Special Counsel
----------------------------------------------------------------
Ames Department Stores, Inc., and its debtor-affiliates obtained
the Court's permission to employ the law firm of Storch Amini &
Munves, P.C. as special counsel, effective as of July 1, 2003.
Pursuant to their agreement, Storch will:

    (a) undertake any investigation, litigation, mediation or any
        other action on the Debtors' behalf to avoid and recover
        any preferential payments or payments that are otherwise
        avoidable;

    (b) appear before the Court and any appellate court to protect
        the Debtors' interests; and

    (c) perform all other necessary legal services as requested by
        the Debtors in the Preference Actions and these Chapter 11
        cases.

The Debtors have transferred over $500,000,000 to creditors
within 90 days of the Petition Date.  The Debtors believe that a
significant number of these transactions may constitute
preferences pursuant to Sections 547, 550 and 551 of the
Bankruptcy Code.

With respect to the collection and litigation of the preference
claims, the Debtors will pay Storch 21% of collections realized on
the settlement or compromise of any preference claim as
contingency fee.  This Special Counsel Fee is the maximum fee that
Storch will charge the Debtors.  The Special Counsel Fee will be
calculated based on the settlement value realized from a recovery.
For instance, if a settlement were comprised of a $25,000 cash
payment and waiver of an existing claim that has an established
dividend value of $5,000, the Special Counsel Fee would be based
on a $30,000 total settlement value.

In addition to the Special Counsel Fee, the Debtors will reimburse
Storch for all reasonable out-of-pocket expenses incurred in
connection with the pursuit of potentially avoidable transfers on
their behalf.  The Debtors will advance to Special Counsel, or pay
directly, sums sufficient to cover Bankruptcy Court filing fees
for commencing adversary proceedings to recover preferences. (AMES
Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


AMPEX CORP: June 30 Balance Sheet Insolvency Narrows to $145MM
--------------------------------------------------------------
Ampex Corporation (Amex:AXC) reported net income of $2.3 million
for the second quarter of 2003. In the second quarter of 2002, the
Company reported a net loss of $0.7 million.

Revenues, which are comprised of royalties from licensing our
patents and product sales and service revenue of our Data Systems
subsidiary, totaled $13.9 million in the second quarter of 2003
compared to $9.3 million in the second quarter of 2002. Royalty
income from licensing totaled $5.6 million and contributed an
operating profit of $5.2 million in the second quarter of 2003
compared to royalty income of $1.3 million and operating profit of
$1.1 million in the second quarter of 2002. In June 2003, we
announced that we had entered into two new license agreements
authorizing the use of our patents in the manufacture of videotape
recorders, including digital camcorders. The agreements
collectively provided for a one-time royalty payment of $5.4
million as settlement of royalties due on products sold in prior
periods. In addition, the Company will receive a running royalty,
calculated as a percentage of the sales price of future product
sales. Operating income from Data Systems amounted to $1.6 million
in the second quarter of 2003 compared to $1.4 million in the
second quarter of 2002. Interest expense and other financing
costs, net, accounted for $2.3 million versus $2.1 million in the
second quarters of 2003 and 2002, respectively.

Giving effect to a benefit from extinguishment of preferred stock,
the Company reported net income applicable to common stockholders
of $3.3 million in the second quarter of 2003 versus net income
applicable to common stockholders of $0.3 million in the second
quarter of 2002.

At June 30, 2003, Ampex's balance sheet shows a total
shareholders' equity deficit of about $145 million.

At the Company's annual meeting on June 6, 2003, the stockholders
approved a 1 for 20 reverse stock split of Ampex Common Stock. The
reverse stock split became effective on June 12, 2003. The income
(loss) per share information reported above has been calculated
giving effect to the reverse stock split for all periods.

Ampex Corporation -- http://www.Ampex.com-- headquartered in
Redwood City, California, is one of the world's leading innovators
and licensors of technologies for the visual information age.


ATCHISON CASTING: Wants to Employ Ordinary Course Professionals
---------------------------------------------------------------
Atchison Casting Corporation and its debtor-affiliates are asking
for permission from the U.S. Bankruptcy Court for the Western
District of Missouri to continue employing the professionals
management turns to in the ordinary course of their businesses.

The Debtors report that they customarily retain the services of
certain professional persons to represent them in matters arising
in the ordinary course of business and certain professionals to
represent them in matters involving workers compensation claims.

Specifically, the Debtors employed ordinary course professionals
to render services relating to:

     i) tax preparation and other tax advice,

    ii) employee relations,

   iii) legal advice with respect to routine litigation (such as
        employment litigation and real estate issues),

    iv) workers compensation matters,

     v) regulatory matters, and

    vi) other matters requiring the expertise and assistance of
        professionals.

The Debtors desire these professionals to continue their
prepetition services without the necessity of a formal retention
application approved by this Court.  In this regard, the Debtors
also ask to pay the ordinary course professionals 100% of the
interim fees and disbursements upon the submission of an
appropriate invoice setting forth in reasonable detail the nature
of the services rendered.  Provided however that such interim fees
and disbursements do not exceed a total of $5,000 per month, and
no more than $50,000 per Professional for the entire Chapter 11
case.

The Debtors submit that the retention of the Ordinary Course
Professionals and the payment of interim compensation and
reimbursement of expenses to them on the basis set forth herein is
in the best interest of their estates and other parties in
interest.

While generally the Ordinary Course Professionals with whom the
Debtors have previously dealt wish to represent the Debtors on an
ongoing basis, many might be unwilling to do so if they are not
paid on a regular basis without the need for a cumbersome, formal
application process. Moreover, if the expertise and background
knowledge of certain of these Ordinary Course Professionals with
respect to the particular areas and matters for which they are
responsible prior to the Petition Date is lost, the estates
undoubtedly will incur additional and unnecessary expenses as
other professionals without such background and expertise will
have to be retained.

Atchison Casting Corporation, headquartered in St. Joseph,
Missouri, together with its affiliates, produce iron, steel and
non-ferrous castings and machining for a wide variety of
equipment, capital goods and consumer markets. The Company filed
for chapter 11 protection on August 4, 2003 (Bankr. W.D. MO. Case
No. 03-50965).  Mark G. Stingley, Esq., and Cassandra L. Writz,
Esq., at Bryan Cave LLP represent the Debtors in their
restructuring efforts.  When the Company filed for protection from
its creditors, it listed $136,750,000 in total assets and
$96,846,000 in total debts.


BAYOU STEEL: Brings-In James E. Howe as New Vice-Pres. of Sales
---------------------------------------------------------------
Bayou Steel Corporation (AMEX:BYX) announced that James E. Howe
has joined the organization as the Vice President of Sales.

Mr. Howe has spent his entire thirty-five year career in the steel
industry. Jim has served in sales, sales management, general
management, and corporate officer roles. He has extensive
knowledge and experience in managing the sales and marketing of
structural, bar and light structural shape products with J&L Steel
Corporation, LTV Steel Corporation, and most recently J&L
Structural Inc. This will serve Bayou Steel and its customers
well.

Mr. Pitts, President and COO, commented, "We are confident that
Jim will be an excellent addition to the organization as we
continue the development and implementation of our strategic plan
to restructure the company. Jim's familiarity with our product
line and his existing relationships with many of our customers
will allow him to hit the ground running. We believe he will
provide the sound leadership to successfully move forward our new
sales initiatives which are vital to increasing our capacity
utilization. We expect that Jim's contribution to the sales
function will be significant as we emerge from bankruptcy."

Bayou Steel Corporation manufactures light structural and merchant
bar products in LaPlace, Louisiana and Harriman, Tennessee. The
Company filed for Chapter 11 protection on January 22, 2003, in
the U.S. Bankruptcy Court for the Northern District of Texas
(Dallas) (Bankr. Case No. 03-30816).


BEVSYSTEMS INT'L: Firms-Up Launching of Life O2 Distribution
------------------------------------------------------------
BEVsystems International, Inc. (OTCBB:BEVI) is in the final stages
of launching distribution of Life 02 in five major cities with the
endorsement and support of local professional athletes.

G. Robert Tatum, BEVsystems' Chief Executive Officer, commented
today: "Many athletes drink Life 02 as part of their training
program. These athletes want to be part of the BEVsystems' family
and have agreed to invest their time and personal endorsement in
promoting Life 02 SuperOxygenated water."

As consideration for providing their endorsement, the athletes
will receive equity in BEVsystems. Their investment will be
administered through a fund managed by a private wealth
management-investment banking firm. The details on the fund and
its managers will be announced shortly.

The marketing program in these five major cites will include
billboards, radio, rapid transit signage on buses, subway
stations, and bus stop kiosks. The advertisements with the
athletes will be part of a promotional campaign with celebrity
visits to major distribution chains.

Life 02 will be produced with a private label for each of its
professional athletes. The unique, Life 02 see-thru label on every
bottle will each feature one of its athletes and their statistics
with the bottle produced in the team colors. These limited edition
bottles may potentially become collector's items.

BEVsystems expects to soon be releasing the identity of the
professional athletes and their endorsements of Life 02. The
announcement will be made on a city-by-city basis.

In another matter, an "e" was affixed to BEVsystems' symbol by the
Over-The-Counter Bulletin Board, which indicates that BEVsystems
is delinquent in filing its Form 10-KSB - Annual Report for the
fiscal year ending March 30, 2003. BEVsystems filed the
Notification for Late Filing with the Securities and Exchange
Commission on July 1, 2003. In the event that BEVsystems fails to
file its Form 10-KSB - Annual Report, it will be delisted from the
Over-The-Counter Bulletin Board. Although BEVsystems cannot
guarantee, it expects to soon file its Form 10-KSB - Annual Report
so that it will be able to maintain its listing on the Over-The-
Counter Bulletin Board. BEVsystems also intends to file the Form
10-QSB for the quarter ended June 30, 2003 soon thereafter. These
two filings will reflect changes in the Balance Sheet that are a
result of the previously announced re-structuring of BEVsystems.

Miami-based BEVsystems International, Inc. (OTCBB:BEVI) is a
provider of premium performance water. With sales in 22 countries,
the success of its flagship Life 02 SuperOxygenated Water brand,
infused with up to 1,500 percent more oxygen via patented process
and technology innovations, underscores BEVsystems' commitment to
research and technology to deliver superior quality beverage
products. A recently published peer review study in The European
Journal of Medical Research details the medical benefits of
oxygen-enriched water. Visit http://www.bevsystems.com

                         *     *     *

                   Going Concern Uncertainty

As previously reported in Troubled Company Reporter, BevSystems
International, Inc.'s primary source of liquidity has historically
consisted of sales of equity securities and debt instruments. The
Company is currently engaged in discussions with numerous parties
with respect to raising additional capital. The Company has
incurred operating losses, negative cash flows from operating
activities and has negative working capital.

These conditions raise substantial doubt about the Company's
ability to continue as a going concern. The Company has initiated
several actions to generate working capital and improve operating
performances, including equity and debt financing. There can be no
assurance that the Company will be able to successfully implement
its plans, or if such plans are successfully implemented, that the
Company will achieve its goals.

Furthermore, if the Company is unable to raise additional funds,
it may be required to reduce its workforce, reduce compensation
levels, reduce dependency on outside consultants, modify its
growth and operating plans, and even be forced to terminate
operations completely. The Company does not intend to manufacture
bottled water products without firm orders in hand for its
products. The Company intends to expend costs over the next twelve
months in advertising, marketing and distribution. These costs are
expected to be expended prior to the receipt of significant
revenues. There can be no assurance that the company will generate
significant revenues as a result of its investment in advertising,
marketing and distribution and there can be no assurance that the
company will be able to continue to attract the capital required
to fund its business plan. However, the Company has no definitive
plans or arrangements in place with respect to additional capital
sources at this time. The Company has no lines of credit available
to it at this time. There is no assurance that additional capital
will be available to the Company when or if required.


BRIDGE INFO.: Plan Administrator Sues Gulfcoast to Recoup $2MM
--------------------------------------------------------------
Gulfcoast Workstation Corporation is an Illinois corporation with
a principal place of business in Largo, Florida.  Scott Peltz,
the Bridge Information Systems Debtors' Chapter 11 Plan
Administrator, relates that BIS America Administration, Inc. made
these transfers of money totaling $2,117,476 to, or for the
benefit of Gulfcoast Workstation:

   Check         Check          Check       Date
   Number        Date           Amount      Honored
   ------        -----          ------      -------
   8100970       11/15/00       $37,630     11/20/00
   8102252       12/06/00       383,850     12/12/00
   8102699       12/13/00        64,936     12/18/00
   8103705       12/27/00        64,407     01/02/01
   8104050       01/04/01       515,466     01/09/01
   8104861       01/18/01       176,840     01/23/01
   8105348       01/25/01       870,683     01/30/01
   8105782       01/31/01         3,665     02/05/01

According to Jennifer S. Kingston, Esq., at Bryan Cave LLP, in
St. Louis, Missouri, pursuant to Section 547(b) of the Bankruptcy
Code, each of the Transfers is avoidable because:

   -- it was a transfer of an interest of a Debtor in property;

   -- it was to, or for, the benefit of a creditor;

   -- it was for, or on account of, an antecedent debt owed by
      the Debtor before the transfer was made;

   -- it was made while the Debtor was insolvent;

   -- it was made on, or within, 90 days before the Petition
      Date; and

   -- it enabled Gulfcoast to receive more than it would have
      received if:

      (a) these cases had been filed as Chapter 7 cases;

      (b) the transfer had not been made; and

      (c) Gulfcoast had not received payment of the debt to the
          extent provided by the provisions of the Bankruptcy
          Code.

Ms. Kingston points out that Section 550(a)(1) of the Bankruptcy
Code that allows the Plan Administrator to recover all of the
Transfers from Gulfcoast, the latter being the initial transferee
of the Transfer.   Thus, on January 8, 2003, Mr. Peltz demanded
Gulfcoast to return the Transfers.  However, Gulfcoast did not
return any of the Transfers.

Thus, Mr. Peltz asks the Court to enter a judgment in his favor
amounting to $2,117,476, together with interests and costs.

                  Gulfcoast Workstation Responds

Dennis A. Dressler, Esq., at Askounis & Borst, P.C., in Chicago,
Illinois, recalls that on April 10, 2002, Gulfcoast and
Relational Funding Corporation filed an Adversary Complaint
against the Debtors to set off certain owed amounts.  The Debtors
made counterclaims against Gulfcoast for unjust enrichment, fraud
and negligent misrepresentation.

After several exchanges of documents and negotiations, the
Parties agreed to settle their disputes and advised the Court
that they are resolving all claims between them wherein Gulfcoast
would pay the Debtors $160,000 and retain an allowed $14,826
administrative Claim and the parties will exchange mutual
releases.  However, Mr. Dressler informs Judge McDonald that when
Gulfcoast gave Bridge a draft of the settlement agreement, Bridge
attempted to insert a provision that Bridge would retain the
right to pursue any claim it possessed under Chapter 5 of the
Bankruptcy Code.

Subsequently, the Debtors informed Gulfcoast that they have
evidence showing that they had made payment of over $2,000,000
during the 90 days prior to the Petition Date.  This Claim became
the basis of Mr. Peltz's Complaint.

Mr. Dressler contends that Mr. Peltz's Complaint should be
stricken and the Settlement Agreement between Gulfcoast and the
Debtors should be enforced because:

   (a) Mr. Peltz's Complaint constitutes a compulsory
       counterclaim as defined in Rule 13(a) of the Federal
       Rules of Civil Procedures, which bars the Debtors or Mr.
       Peltz from raising claims of preference at this time;

   (b) Gulfcoast and the Debtors' settlement resolves all issues
       existing between them, which bars Mr. Peltz from
       prosecuting a claim to avoid and recover preferential
       transfers; and

   (c) The doctrine of res judicata bars Mr. Peltz's claim to
       avoid and recover preferential transfers since the
       Debtors could have raised the Claim in their Counterclaim
       in Gulfcoast's Adversary Complaint. (Bridge Bankruptcy
       News, Issue No. 48; Bankruptcy Creditors' Service, Inc.,
       609/392-0900)


BRIDGEWATER SPORTS: Wants Clearance for Cash Collateral Use
-----------------------------------------------------------
Bridgewater Sports Arena, L.P., seeks approval from the U.S.
Bankruptcy Court for the District of New Jersey to continue using
cash collateral to fund post-petition operations.

The Debtor reports that the Trust Company of New Jersey, as
trustee for the New Jersey Economic Development Authority, is the
Company's primary secured creditor.   Trust Company asserts a lien
on virtually all of the Debtor's assets, including but not limited
to equipment, machinery, fixtures, accounts receivable and fixed
assets, together with the proceeds.  As of the Petition Date, the
Trust Company asserted that it was owed the amount of $11,102,472.

In order to permit the Debtor to continue in business, it is
necessary that the Debtor be authorized in accordance with Section
363 of the Bankruptcy Code to Use Cash Collateral.  In the first
four weeks of bankruptcy, the Debtor anticipates using up to
$242,523, to finance:

     -- payroll,
     -- inventory,
     -- rent,
     -- utilities,
     -- insurance and
     -- other operating expense

and in accordance with a Weekly Budget from August 6, 2003 through
September 2, 2003:

                            Week 1   Week 2  Week 3  Week 4
                            ------   ------  ------  ------
Cash Beginning              6,935   28,265   4,242   29,942
Total Receipts             49,800   58,100  74,600   58,400
Total Disbursements        28,470   82,123  48,900   83,030
Net Cash Flow              21,330  (24,023) 25,700  (24,630)
Cash End                   28,265    4,242  29,942    5,312

Bridgewater Sports Arena, L.P., headquartered in Bridgewater, New
Jersey, is a recreational facility in Central New Jersey.  The
Company filed for chapter 11 protection on August 5, 2003 (Bankr.
N.J. Case No. 03-35809).  Brian L. Baker, Esq., and
Morris S. Bauer, Esq., at Ravin Greenberg, PC represent 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.


BUDGET GROUP: Wants Approval of Proceeds Allocation Procedures
--------------------------------------------------------------
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor LLP, in
Wilmington, Delaware, recounts that on August 22, 2002, Budget
Group Inc., and its debtor-affiliates entered into an Asset and
Stock Purchase Agreement with Cendant Corporation and Cherokee
Acquisition Corporation, pursuant to which Cherokee agreed to:

   1. purchase the worldwide Budget trademark rights and
      substantially all of the Debtors' assets relating to the
      Debtors' operations in the United States, Canada, the
      Caribbean, Latin America, the Asia/Pacific region,
      Australia and New Zealand, including the equity securities
      of the non-debtor acquired companies; and

   2. assume certain of the Debtors' liabilities.

The Cendant Acquisition closed on November 22, 2002.

In exchange for the sale of the Cendant Acquisition Assets, the
Debtors were to receive, among other things, $110,000,000 in cash
consideration, the payment of certain transaction, bankruptcy and
reorganization related expenses, the assumption of certain
contracts and trade payables, and the assumption or repayment by
Cherokee of the Debtors' non-recourse asset-backed vehicle
related debt, which aggregated $2,800,000,000 as of September 30,
2002.  At closing, Cherokee remitted to the Debtors net cash
proceeds equal to $101,851,250 consisting of the $110,000,000
purchase price less certain deductions and certain amounts that
were required to be sent into escrow accounts that may be
subsequently available for distribution to creditors.

Additionally, BRACC and Cherokee entered into a license agreement
that allowed BRACC to continue to license to BRACII the Budget
trademark for use in the EMEA Operations.

Included in the Cendant Acquisition Assets sold to Cherokee was
the stock of Budget Rent a Car Australia Pty Ltd., Budget Rent-a-
Car Operations Pty Ltd., Camfox Pty Ltd., Budget Rent-a-Car
Limited, Budget Lease Management Ltd., Target Rent a Car Ltd.,
and Budget Locacao de Veiculos Ltda, all of which entities were
direct and indirect subsidiaries of BRACII.  No allocation of the
Cendant Acquisition Proceeds or the value of the Cendant
Acquisition Assets acquired by Cherokee has been made, other than
by Cherokee for tax-related purposes only.

                           EMEA Sale

After closing the Cendant Acquisition, the Debtors' estates
consisted of certain assets excluded from the Cendant
Acquisition, including the Debtors' operations in Europe, the
Middle East and Africa.  The EMEA Operations were conducted
primarily through BRACII and consisted of the rental of
automobiles, trucks and other vehicles throughout Europe, the
Middle East and Africa, directly by BRACII and its subsidiaries
or indirectly through various franchisees, dealers, licensees and
sub-licensees under the trademark Budget.

On February 24, 2003, the Court approved the EMEA Sale and
authorized the Debtors to hold the proceeds received from the
EMEA Sale in a bank account in the United States with the UK
Administrator's consent.  Upon closing of the EMEA Sale on
March 11, 2003, the Debtors received from Avis Europe PLC
$18,855,375 consisting of the $20,000,000 purchase price less
certain deductions for amounts owing to Avis in connection with
certain postpetition loans and additional payments required to be
made under the EMEA APA.  Additionally, the Debtors were required
to establish reserves for employee-related claims and disputed
cure payments related to the assumption and assignment of certain
contracts.

The EMEA Sale included the sale of assets owned by BRACII and its
subsidiaries and BRACC's rights to the Budget trademark granted
to it under the Cherokee License Agreement.  No allocation of the
EMEA Sale Proceeds or the value of the Debtors' assets sold in
the EMEA Sale has been made.

                        Additional Assets

In addition to the EMEA Sale Proceeds, the Cendant Acquisition
Proceeds and certain de minimis assets excluded from both sales,
there remain two categories of assets in the Debtors' estates --
avoidance actions and proceeds from the Sixt litigation.  The
avoidance actions consist of certain preferential and fraudulent
transfers, which may be recoverable by the Debtors pursuant to
Sections 544(b), 547, 548 and 550 of the Bankruptcy Code.

The Sixt litigation involves the termination of a license
agreement entered into between BRACII and a franchisee in
Germany, Sixt AG.  BRACII terminated Sixt's franchise agreement
effective May 1997 based on violations of provisions in the
underlying franchise agreement and is now proceeding to claim
damages related to, among other things, Sixt's continued use of
the Budget name and logo after the termination of the franchise
agreement.  Mr. Brady relates that any recoveries from avoidance
actions or the Sixt litigation would be property of the Debtors'
estates.

        Allocation of Sale Proceeds and Additional Assets

The Debtors anticipate filing both a Chapter 11 liquidating plan,
subject to approval by the U.S. Bankruptcy Court, and a
substantially identical company voluntary arrangement or scheme
of arrangement for BRACII, subject to approval by the English
Court.  The Debtors anticipate that the Plan will provide for
separate distributions to holders of claims and interests in
BRACII, and holders of claims and interests in the U.S. Debtors.

However, in order to proceed with the Plan and corresponding
company voluntary arrangement or scheme of arrangement, a
determination must be made regarding what portions of the Cendant
Acquisition Proceeds, the EMEA Sale Proceeds and the Additional
Assets are allocable to the U.S. Debtors and what portions can be
allocated to BRACII.

The EMEA Sale Order provides that the Court will retain
jurisdiction to determine the allocation of the EMEA Sale
Proceeds among the Debtors and that the UK Administrator will
have the right to participate fully in any and all the allocation
proceedings.  Moreover, the Court has jurisdiction to determine
the allocation of the Cendant Acquisition Proceeds because the
Cendant Acquisition Proceeds are located in the United States.

         Intercompany Claims Arising During the Ordinary
              Course of the Debtors' Operations

During the ordinary course operations of the Debtors' business,
the U.S. Debtors and BRACII typically owed each other amounts
arising from direct cash transfers, allocated overhead, marketing
costs and reciprocal rental and other revenue.  The Debtors'
Statements and schedules reflected significant intercompany
receivables from BRACII to certain of the U.S. Debtors as of the
Petition Date.  Subsequent to the Petition Date, the intercompany
balance owed to the U.S. Debtors continued to fluctuate as a
result of normal operations and increased as a result of certain
cash infusions authorized by the Court and approved by the
Committee.  BRACC believes that it is the largest creditor of
BRACII as a result of its intercompany claim.

The Debtors understand that the Committee intends to file a claim
on the U.S. Debtors' behalf against BRACII in the UK
Administration.  The UK Administrator has indicated that it is
not yet prepared to acknowledge the validity or priority of the
Intercompany Claim.

In addition, the UK Administrator, on BRACII's behalf, has filed
a proof of claim against BRACC in these Chapter 11 cases.  The
proof of claim sets forth BRACII's claim against BRACC for
damages arising from an alleged breach of the License Agreement
by BRACC.  Moreover, the Debtors understand that the Committee
intends to:

   1. challenge the claim filed against BRACC by the UK
      Administrator; and

   2. seek permission for BRACC to file a claim against BRACII in
      these Chapter 11 Cases for damages relating to an alleged
      breach of the License Agreement by BRACII.

Accordingly, the Debtors ask the Court to establish procedures
for:

   1. determining the proper allocation of the Cendant
      Acquisition Proceeds, the EMEA Sale Proceeds and the
      Additional Assets among BRACII and the U.S. Debtors; and

   2. to the extent the Court concludes that it is germane to
      resolution of the Allocation issues, resolving the
      Intercompany Issues.

                The Proposed Allocation Procedures

The salient terms of the proposed allocation procedures are:

   A. Alignment of the Parties:  The Debtors ask that the
      Committee and the UK Administrator be aligned as
      adversaries representing the interests of the U.S. Debtors
      and BRACII, respectively, in context of the Allocation
      proceedings.  Although the Committee technically represents
      creditors of all the Debtors, it is reasonable for the
      Committee to represent the interests of the U.S. Debtors
      for purposes of the Allocation proceedings because:

      1. British Telecom, the sole BRACII creditor appointed to
         the Committee, has since resigned from the Committee;
         and

      2. the UK Administrator will adequately represent the
         interests of BRACII and the BRACII creditors in the
         Allocation proceedings.

      The Debtors further ask the Court that the Allocation
      proceedings be designated as contested proceedings.

   B. Submission of Position Papers and Responses Subject to the
      views of the Committee and the UK Administrator:  The
      Debtors propose that the Committee and the UK Administrator
      each file a position paper on or before August 25, 2003.
      The Position Paper should be in the nature of an Adversary
      Complaint and should include a statement of the facts and
      legal theories that support each party's theory of
      allocation, together with the party's position concerning:

      1. whether the Intercompany Issues should be resolved in
         tandem with the Allocation hearings; and, if so,

      2. what Court should resolve the Intercompany Issues.

      The Debtors propose that responses to the Position Papers
      be filed and served on or before September 9, 2003.  Each
      party's Response should respond to each point raised in the
      other party's Position Paper in as much detail as is
      reasonably possible.  If and to the extent that, on the
      basis of the Position Papers and Responses, a dispute
      exists concerning the scope of the Allocation proceedings,
      the Debtors want the Court to conduct a hearing as soon
      after September 9, 2003 as the Court's calendar will
      permit so that the Court can determine the scope of the
      proceedings.

   C. Preliminary Disclosure:  The Debtors further propose that
      the Committee and the UK Administrator also file and serve
      on one another, on or before August 25, 2003, a preliminary
      disclosure document that includes:

      1. a description of the evidence, to the extent then known,
         that the parties believe must be adduced in order to
         properly allocate the Assets between BRACII and the U.S.
         Debtors;

      2. a description of any other evidentiary issues the
         parties believe must be addressed in connection with the
         Allocation;

      3. any suggested process by which the parties might
         consensually resolve one or more of the specific issues
         set forth in the Position Paper;

      4. a description of each of the Intercompany Issues the
         parties believe must be addressed;

      5. a description of the evidence, to the extent then known,
         that the parties believe must be adduced in order to
         resolve the Intercompany Issues; and

      6. any suggested process by which the parties might
         consensually resolve one or more of the Intercompany
         Issues cited the Position Paper.

   D. Document Requests/Exchanges and Witness Lists:  The Debtors
      further propose that the parties exchange document requests
      on or before September 2, 2003.  The parties will:

      1. deliver documents responsive to the document requests;
         and

      2. identify known witnesses, including expert witnesses,
         who will be the subject of discovery, on or before
         September 17, 2003.

   E. Deadline for Completion of Non-Expert Discovery:  The
      Debtors propose that all discovery, other than discovery
      relating to expert witnesses, be completed on or before
      September 29, 2003; provided, however, this deadline may be
      reasonably extended by Court order or the parties'
      agreement to accommodate the availability of witnesses.

   F. Deadline for Completion of Expert Discovery:  The Debtors
      propose that the parties:

      1. exchange expert reports on or before October 9, 2003;
         and

      2. complete depositions of experts on or before October 20,
         2003.

   F. Pre-Trial Statements and Dispositive Motions:  The Debtors
      propose that the parties submit by November 10, 2003 a
      joint pre-trial statement containing a statement of
      stipulated facts, issues to be resolved, witnesses to
      testify at trial and documents to be admitted into evidence
      in connection with the Allocation and, to the extent
      ordered by the Court, resolution of the Intercompany
      Issues.  The issues set forth in the joint pre-trial
      statement will be based primarily on the Position Papers,
      the Responses and issues emerging through discovery.  Any
      dispositive motions, like motions for summary judgment,
      should also be filed by November 20, 2003, and a trial
      should be set, subject to the Court's calendar, for the
      beginning of December 2003.

Mr. Brady points out that the Allocation and resolution of the
Intercompany Issues are necessary precursors to completing
distributions under a Plan and company voluntary arrangement.
Although all parties have been negotiating in good faith in an
attempt to resolve the Allocation and Intercompany Issues, no
agreement has been reached.  The Allocation Procedures will serve
the Debtors' goal of an expeditious resolution of the cases by
requiring the parties to address the Allocation and Intercompany
Issues on an aggressive but realistic timetable.  Moreover, the
Allocation and resolution of the Intercompany Issues are
necessary steps to the UK Administrator's fulfilling its
fiduciary duties, providing distributions to BRACII's creditors
and otherwise protecting the integrity of the UK Administration.
Thus, as the Chapter 11 Cases and UK Administration wind up, it
is imperative that procedures be implemented to facilitate a fair
Allocation and resolution of the Intercompany Issues.

The Debtors anticipate that the Allocation proceeding will be
conducted in the same manner, as are other adversary proceedings
and governed by Bankruptcy Rules, which are applicable to
adversary proceedings. (Budget Group Bankruptcy News, Issue No.
24; Bankruptcy Creditors' Service, Inc., 609/392-0900)


BURLINGTON: Disclosure Statement Hearing Set for August 25, 2003
----------------------------------------------------------------
Burlington Industries, Inc., and its debtor-affiliates ask the
Court to shorten the 25-day notice and objection period normally
required by Rule 2002(b) of the Federal Rules of Bankruptcy
Procedure and the seven-day Agenda filing date provided by the
Case Management Order, to enable the Debtors to conduct a hearing
on the Disclosure Statement on August 25, 2003.

Bankruptcy Rule 9006(c)(1) provides that "the court for cause
shown may in its discretion with or without motion or notice
order [this] period reduced."  Marc Foster, Esq., at Richards,
Layton & Finger, in Wilmington, Delaware, relates that cause
exists to shorten the notice period, establish a shortened
objection deadline and waive the requirement of the Case
Management Order regarding the filing of the Agenda seven
business days prior to the Disclosure Statement Hearing.

Mr. Foster points out that the Amended Plan contemplates the
effectuation of the Debtors' reorganization through the sale of
all the Debtors' businesses, pursuant to the Acquisition
Agreement, dated as of July 25, 2003, as amended, between
Burlington and WLR Recovery Fund II, L.P., in cooperation with
Mohawk Industries, Inc.  Mr. Foster says that it is imperative to
press forward with the confirmation process in an expeditious
manner to ensure that maximum recovery is provided to the
Debtors' creditor constituencies.  Furthermore, shortening the
notice and objection periods will not unduly prejudice the rights
of the non-debtor parties to object to the Disclosure Statement.
The Debtors intend to file and serve the Disclosure Statement and
Plan via regular mail as soon as possible and thus is providing
sufficient notice to the creditors of the Disclosure Statement
Hearing.

                          *     *     *

Accordingly, Judge Newsome:

   (a) schedules the Disclosure Statement Hearing for August 25,
       2003, at 2:00 p.m. Eastern Time;

   (b) shortens the notice and objection deadline so that
       objections to the Disclosure Statement must be filed on or
       before August 21, 2003 at 4:00 p.m., Eastern Time; and

   (c) permits the filing of the Agenda on August 22, 2003.
       (Burlington Bankruptcy News, Issue No. 37; Bankruptcy
       Creditors' Service, Inc., 609/392-0900)


CABLETEL COMMS: Will Publish Second Quarter Results on Tuesday
--------------------------------------------------------------
Cabletel Communications (AMEX: TTV, TSX: TTV) will be releasing
its operating results for the second quarter and first half ended
June 30, 2003, on Tuesday morning, August 19, 2003 prior to the
market opening.

The Company cordially invites the financial community, the media
and Cabletel's shareholders to participate in its SECOND QUARTER
AND FIRST HALF CONFERENCE CALL SCHEDULED FOR 11:00 AM (EST),
TUESDAY, AUGUST 19, 2003. President and CEO Greg Walling and CFO
Ron Eilath will review the results and discuss the Company's
outlook.

To participate

Call 1-888-343-7142 TEN MINUTES PRIOR TO CONFERENCE TIME or FIVE
MINUTES PRIOR TO CONFERENCE TIME log on to LIVE WEBCAST at

                  http://www.q1234.com or

http://www.newswire.ca/webcast/viewEventCNW.html?eventlD=616660

If you are unable to dial in for the 11:00 AM. call, you can
listen to a taped version from 1:00 PM that afternoon to 1:00 PM
the following day by calling 1-800-633-8284. Use reservation
number 21158107. The conference will be archived at
http://www.q1234.com

Cabletel Communications Corp. is a full-service distributor and
manufacturer of broadband equipment to the television and
telecommunications industries offering a wide variety of products
required to construct, build, maintain and upgrade broadcasting
and telecommunications systems. Stirling Connectors, Cabletel's
manufacturing division, supplies national and international
clients with proprietary products for deployment in cable, DBS and
other wireless distribution systems. More information about
Cabletel can be found at http://www.cabletelgroup.com

                          *   *   *

As reported in the August 5, 2003, issue of the Troubled Company
reporter, Cabletel Communications Corp. announced that, for its
second quarter ended June 30, 2003, it anticipated reporting lower
revenues of approximately CDN$9 million, compared to CDN$15
million reported in the same second quarter of 2002 and CDN$11
million for the first quarter of 2003. In addition, the Company
announced that for the quarter ended June 30, 2003, it anticipated
reporting an increased net loss and that it expects to take a
restructuring charge, the total amount of which has not yet been
determined. The Company attributed its lower revenues and
increased net loss to continued weakness in the cable and
satellite sector. The Company is due to release its second quarter
results on or about August 15, 2003.

In order to better position the Company to compete in the current
market, as announced at the Company's annual meeting held on July
27, 2003. The Company has undertaken a restructuring plan to seek
to reduce operating costs and total indebtedness. The
restructuring plan is expected to include the following key
components:

- A reduction in the size of its workforce by approximately 25%.

- Explore the sale of non-core assets.

- A reduction of occupancy costs through the consolidation of its
  operation into fewer facilities.

- Efforts to renegotiate terms with key suppliers.

The Company has commenced these efforts and believes that, if
successful, they should result in cost savings and increased
working capital. However, no assurances can be given that the
restructuring plan can be successfully completed.


COVANTA: Wrestles with Town of Babylon over Postpetition Claims
---------------------------------------------------------------
Debtor Covanta Babylon, Inc. seeks a preliminary injunction,
pursuant to Section 105(a) of the Bankruptcy Code, enjoining the
Town of Babylon from commencing, or taking any act in furtherance
of, an arbitration against the Debtor concerning postpetition
claims arising out of, or related to, a service agreement between
the Town of Babylon and the Debtor.

James L. Bromley, Esq., at Cleary, Gottlieb, Steen & Hamilton, in
New York, advocates that the injunctive relief is necessary to
maintain the status quo and preserve the assets of the Debtor's
estates.  According to Mr. Bromley, without the relief, the
threatened actions of the Town will:

   -- severely delay and hinder the Debtors' ability to
      reorganize;

   -- undermine the entire claims resolution process in the
      proceeding; and

   -- potentially set off a chain reaction among the other waste-
      to-energy contracting communities.

All of these will cause the Debtors to defend themselves in up to
24 separate locations, thereby wasting the Debtors' assets and
jeopardizing their reorganization efforts.

Mr. Bromley relates that the Debtor and the Town are both parties
to a Service Agreement and other related documentation that
enables the Debtor to operate one of the Debtors' 24 waste-to-
energy facilities, located in Babylon, New York.  The Debtor
commenced operation of the Babylon WTE Facility and operated in
compliance with all capacity requirements set forth in the
Service Agreement from the date it entered service to the
present.  Pursuant to the Service Agreement:

   -- the Debtor is required to process an amount of waste; and

   -- the Town of Babylon is obligated to pay a Service Fee, and
      other costs, to the Debtor.

Mr. Bromley explains that the Town complained about some costs
the Debtors billed to it pursuant to the Service Agreement.
Consequently, the Town notified the Debtor that it disagrees with
some charges, and purported to preserve its rights under the
Service Agreement.  However, until very recently, the Town never
sought to commence an arbitration against the Debtor.  To the
contrary, it continued to act in accordance with the Service
Agreement by delivering waste to the Facility and paying the
Service Fee.

On August 9, 2002, the Town filed a perfunctory Proof of Claim
seeking $13,374,538 in damages the Debtors allegedly owed to it
for what must be presumed to be alleged breaches of the Service
Agreement.  Mr. Bromley explains that it can only be presumed
that the damages are based on alleged breaches of the Service
Agreement because the Town failed to explain the basis for its
claim other than to state that the damages "relate to" the
Service Agreement.

The Town's Claim is by far the largest single claim against the
Debtor's estate.  The Service Agreement, out of which the Town's
Claim appears to arise, is the single largest asset of the
Debtor's estate.  According to Mr. Bromley, the resolution of the
Town's Claim will be the cornerstone of the Debtor's successful
reorganization, which will be essential for the successful
reorganization of the Covanta energy business.  Thus, the
dispute, and any other dispute concerning the Service Agreement
or related documentation, constitutes a core matter pursuant to
Section 157(b)(2)(B) of Judiciary Code.

On March 26, 2003, the Debtors took one of their first steps
toward resolving Service Agreement issues with the filing of an
objection to the Town of Babylon Claim.  In response, the Town
sought to:

   (i) compel the Debtors to arbitrate their objection;

  (ii) stay the claim objection pending final resolution of the
       arbitration; and

(iii) modify the automatic stay to allow the arbitration to
       proceed up to the point of final determination.

The Town also informed the Debtor of its intention to serve a
notice that will purport to immediately commence arbitration
against the Debtor with respect to postpetition claims.  Although
the Arbitration Notice only refers to postpetition claims
allegedly arising under the Service Agreement, the Town expressly
admits that the purported postpetition claims are identical in
nature to those submitted to the Court in the Town's Claim.  Mr.
Bromley states that indeed, one of the rationales in lifting the
stay is to permit the prepetition and postpetition claims to be
litigated together.

The Debtors strongly disagree with the position that the two
claims are different claims.  In fact, there are no two claims --
there is but one claim and it arises out of the Service
Agreement.  Mr. Bromley says that what the Town has done is take
a dispute it claims goes back at least six years -- one that the
Town filed a proof of claim in the Court eight months ago -- and
attempt to bootstrap it on to what it claims to be a brief
continuation of the alleged prepetition breach into the
postpetition period to justify an arbitration of what is
undoubtedly a core proceeding central to the Debtors'
reorganization efforts.

Even if it were to be determined that the Town has two claims, it
concedes that the prepetition and postpetition claims are
identical.  While judicial economy would argue for a single forum
to resolve identical claims, the Town has articulated no reason
that an arbitral forum would be better suited to resolve the
issues than the Court, nor has -- nor could -- it articulate any
way that it would be prejudiced by having its claims resolved by
the Court as opposed to a not yet formed arbitral panel.  Mr.
Bromley asserts that the Town has detailed no prejudice because
none exists.

Mr. Bromley further argues that the Town's new impulse to
arbitrate is merely a last minute attempt to forum shop and, more
to the point, to gain extra leverage over the Debtors.  As the
Town undoubtedly knows, an arbitration, commenced now, would
unduly prolong the period of time it takes to resolve its claim
that has already been submitted to the claims resolution process
of the Court -- thus threatening the Debtor's intent to present a
plan within this year.

Mr. Bromley points out that the Town's Claims can be resolved far
more efficiently and swiftly in the Bankruptcy Court with
absolutely no prejudice to the Town.  On the other hand, if the
Debtor is forced to arbitrate, it will be severely prejudiced and
its presentation of a plan for emergence from Chapter 11 will be
needlessly delayed and complicated. (Covanta Bankruptcy News,
Issue No. 33; Bankruptcy Creditors' Service, Inc., 609/392-0900)


DRESSER INC: Obtains Waiver of Defaults Under Credit Agreement
--------------------------------------------------------------
Dresser, Inc., provided a business update for the second quarter
of 2003, and gave an update on its 2001 re-audit and 2002 audit.

               Second Quarter 2003 Business Update

As announced previously, the Company is currently restating its
2001 results and is not providing full financial statements until
the re-audit is complete. All financial information provided in
this release is unaudited and subject to change as the Company
completes its 2001 re-audit, 2002 audit, and review of the first
and second quarters of 2003.

The Company disclosed that cash and equivalents on June 30, 2003
were approximately $102 million, compared to approximately $123
million on March 31, 2003.

Total debt at the end of the second quarter of 2003 was
approximately $973 million, compared to approximately $974 million
at the end of the first quarter of 2003. The Company's revolving
credit facility remains undrawn, with approximately $32 million in
commitments for letters of credit outstanding as of June 30, 2003,
which was approximately the same amount outstanding as of March
31, 2003.

Capital expenditures in the second quarter of 2003 totaled
approximately $6 million, compared to approximately $4 million for
the second quarter of 2002.

Cash interest paid in the quarter ended June 30, 2003 was
approximately $32 million.

Patrick Murray, Chief Executive Officer of Dresser, Inc., said
"Net income and EBITDA were substantially weaker than the prior
year and the first quarter of 2003 primarily due to the impact of
the strike in our Waukesha Engine business of approximately $12
million, costs associated with the restatement and re-audit of
approximately $6 million, and other costs of approximately $5
million related primarily to previously announced plant
consolidations and a reduction in force in our retail fueling
business.

"Excluding the three items discussed above, EBITDA would have been
flat with the corresponding measure in the first quarter of 2003
and down substantially from the second quarter of the prior year.
The most significant change relative to expectations was a higher
than anticipated impact from the strike at Waukesha Engine. As a
result of this unexpected change, we amended our credit agreement
to expressly allow our EBITDA results to be adjusted for the
impact of the strike up to an aggregate maximum of $13 million
during the second and third quarters of 2003.

"On the positive side," continued Murray, "we ended the quarter
with cash and equivalents in excess of $100 million, and our
bookings and backlog picture continued to improve. Our bookings
have now exceeded revenues in both the first and second quarters
of the year, and our backlog has grown for six consecutive months
through June. This positive momentum in our business should lead
to a significantly stronger second half of the year."

         Flow Control Volumes Lower on Year-to-Year Basis;
                      Volumes Up Sequentially

"Volume declined in our Flow Control segment compared to the prior
year, in part due to the large volume we shipped in 2002 to the
Barracuda-Caratinga project offshore Brazil," commented Murray.
"Volumes were up sequentially from the first quarter although we
didn't see as much earnings improvement in our on/off valve
product line as we expected. This was primarily due to production
delays in an Italian manufacturing location. Market conditions in
other product lines in the Flow Control segment were essentially
unchanged from the first quarter with U.S. markets relatively soft
while international markets remain reasonably healthy."

"However," said Murray, "international project bookings and
backlog continue to strengthen and should provide for significant
sequential revenue growth from the second quarter. Throughput at
our Italian manufacturing location improved in July and we expect
to see better results in the third quarter from our Flow Control
segment.

     Measurement Systems Volume up Due to Addition of Tokheim
     Business and Increased Equipment and Service Sales in U.S.

"Volume in our Measurement Systems segment, both sequentially and
year-on-year, was positively impacted by the acquisition of
Tokheim North America. The positive contribution from the
increased volume was offset by transition-related expenses and
higher operating costs, as we consolidated the acquisition into
our Dresser Wayne business. With transition costs largely behind
us, our operating leverage should improve.

"Based on the rollout of point-of-sales systems contracts and
increased volumes on the dispenser side, we expect a stronger
second half in this segment, even after restructuring costs
related to the previously announced consolidation of our German
manufacturing facility into an existing plant in Sweden.

        Strike at Waukesha Engine Causes Year-on-Year Decline
             in Compression and Power Systems Segment

"In our Compression and Power Systems segment, the impact of the
Waukesha Engine strike was much greater than we originally
anticipated. The work stoppage began on May 2nd and continued
until the recent settlement on July 25th. Although we were able to
continue production through the use of temporary workers and our
non-union employees, the effect of the strike was a major
contributor to the disappointing operating results for the Company
and the segment for the quarter.

"The positive outcome of the strike is that we achieved
substantial rules changes and cost reductions, particularly in the
area of health care costs. In addition, it allowed us to implement
in a very short period of time many lean manufacturing and other
productivity improvement projects. The combination of these
factors should improve our operating leverage at Waukesha Engine
and provide a positive contribution going forward.

     Second Half 2003 Operating Results Projected to Be Higher

"Our overall bookings and backlog picture give us confidence that
the second half of the year will be stronger than the first half.
Certainly, settlement of the Waukesha Engine strike and completion
of the Tokheim integration will reduce much of the earnings drag
that occurred in the second quarter. That, combined with an
improving business picture, should give us a significant
sequential improvement in operating results for the third quarter.
However, we do expect to continue to incur costs associated with
previously announced plant consolidations and additional expenses
associated with the restatement and re-audit."

               2001 Re-Audit and 2002 Audit Update

On August 8, 2003, the Company announced that it had not met its
previous expectation to deliver audited financial statements by
August 5, 2003. The Company received from its senior lenders an
extension of its previous credit agreement waiver for delivering
audited financials, as well as a waiver of any defaults under the
credit agreement relating to previously delivered financial
statements. The Company is in compliance with the terms of its
credit agreement.

The Company has made, and expects to continue to make, all
interest payments due to its senior subordinated note holders.
However, due to its delay in filing its annual report on Form 10-K
for 2002, as previously announced, as well as subsequent delays in
filing of its quarterly reports on Form 10-Q for the first and
second quarters of 2003, the Company continues to be in default of
its reporting requirements to its senior subordinated note
holders. If the Company were to issue its financial statements
prior to a cure of that default, the notes and the Company's
borrowings under its senior credit facility would be presented as
current liabilities and the Company believes that any opinion of
its independent auditors would be qualified.

Although the re-audit has not been finished, substantial progress
has been made. Preliminary results of the restatements of prior
years resulted in no significant changes to cash or debt levels,
or the total changes in cash and equivalents. Net income and
EBITDA, however, will be substantially reduced in 2001 and prior
years. The Company expects to report for 2001 revised net income
of approximately $25 million, EBITDA of approximately $174
million, and Adjusted EBITDA of approximately $199 million. The
Company also expects to report net income and EBITDA declines for
each of the years 1998, 1999 and 2000 of approximately 15%-20% and
10%-15%, respectively.

The Company expects no significant changes in its 1998, 1999 and
2000 cash flow statements, but expects to revise its 2001 cash
flow statement. The total change in cash and equivalents for 2001
will increase approximately $4 million. Cash flows from operating
activities will decrease approximately $43 million in 2001 as the
result of an approximate $105 million reduction in the quarter
immediately prior to the recapitalization transaction, and an
approximate $62 million increase for the remainder of the year as
reflected in the following table:

                Anticipated Cash Flow Statement Impact

                                                    2001
                                           ----------------------
Changes in ($ millions):                    Q1    Q2 - Q4 Total
                                           -------- ------- -----
Cash flows from operating activities        (105)     62   (43)
Cash flows from financing activities
  and cash flows from investing activities   105     (58)   47
                                            -------- ------- -----
Change in cash and equivalents                $--      $4    $4

In the first quarter of 2001, prior to the recapitalization
transaction, the non-cash settlement of intercompany balances with
the Company's prior parent in anticipation of the recapitalization
were included as a source of cash in cash flows from operating
activities and a use of cash in cash flows from financing
activities. Correction of this error will decrease cash flows from
operating activities by approximately $105 million with a
corresponding increase in cash flows from financing activities.

For the remaining three quarters, cash flows from operating
activities will increase by approximately $62 million as a result
of the correction of errors principally associated with the
misclassification of deferred financing costs and non-cash
components of acquisitions as uses of cash flows from operating
activities. Correction of this error will also result in a
decrease in cash flows from financing and investing activities of
approximately $58 million.

During the course of the 2001 re-audit, the Company identified a
number of material weaknesses and significant deficiencies that
were the cause of accounting errors in addition to the previously
disclosed correction relating to pension and other retirement
benefit obligations. These errors include: 1) the accounting for
the acquisition of certain foreign entities as a purchase rather
than as part of the total leveraged recapitalization transaction
in April, 2001; 2) the exclusion from the Company's carve-out
financial statements of certain restructuring and other costs; 3)
the inclusion of reserves in the carve-out financial statements
that pertained to predecessor businesses and the subsequent
incorrect use of those reserves; 4) the inclusion of non-cash
changes in intercompany balances with our former parent as both a
source of cash flows from operating activities and a use of cash
flows from financing activities in the first quarter of 2001, as
described above; and 5) other items.

To fully address these and other known accounting errors, the
Company will restate financial results for 1998, 1999, and 2000,
which will be presented as unaudited. In addition, as previously
announced, the Company has been and expects to continue to review
the nature and origin of these errors and improve certain of its
internal controls and procedures, including a separate review by
the Company's audit committee.

"While we are disappointed that we were not able to complete the
re-audit within the timeframe we originally expected," said
Murray, "the remaining work to be done is well defined. As
expected, none of the corrections adversely impact the Company's
cash or debt levels. For 2002, we expect to report a net loss of
approximately $12 million, cash flows from operating activities of
approximately $133 million, EBITDA of approximately $143 million,
and Adjusted EBITDA of approximately $171 million, which is a
slight increase from the level we originally reported to our
senior lenders at the time of the announcement of our re-audit. In
addition, none of the corrections significantly impacts our
operating results in 2003."

Headquartered in Dallas, Dresser, Inc. is a worldwide leader in
the design, manufacture and marketing of highly engineered
equipment and services sold primarily to customers in the flow
control, measurement systems, and compression and power systems
segments of the energy industry. Dresser has a widely distributed
global presence, with over 7,500 employees and a sales presence in
over 100 countries worldwide. The Company's Web site can be
accessed at http://www.dresser.com


DVI INC: Will File for Chapter 11 Protection Soon
-------------------------------------------------
DVI, Inc. (NYSE:DVI) will seek to make a filing under Chapter 11
of United States Bankruptcy Code in the next few days. DVI has not
currently secured debtor-in-possession financing.

In addition, DVI's chief financial officer, Steven Garfinkel, has
been placed on administrative leave and Anthony Turek and John
Boyle have been assigned the functions of the office of chief
financial officer. Despite extensive discussion with potential
funding sources, DVI was unable to arrange for the funding
required to continue operations. Its attempts to address its
problems through a sale or recapitalization have been hindered by
the recent discovery of apparent improprieties in its prior
dealings with lenders involving misrepresentations as to the
amount and nature of collateral pledged to lenders. An
investigation into those improprieties has been commenced by DVI's
audit committee but is not yet complete.

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


EAGLE FOOD CENTERS: Inks Agreements to Sell Assets of 4 Stores
--------------------------------------------------------------
Eagle Food Centers, Inc., which owns and operates supermarkets in
Illinois and Iowa, has signed two separate purchase agreements for
the assets of four of its stores.

Hy-Vee signed a purchase agreement to purchase certain of the
assets related to stores in Dubuque, Iowa; Bettendorf, Iowa and
Moline, Illinois including the buildings and land of the Dubuque
and Bettendorf stores all for approximately $10.83 million in
cash. Under a separate agreement, J.B. Sullivan, Inc. signed a
purchase agreement to purchase certain of the assets of the store
in Rochelle, Illinois for $800,000 plus an amount to be determined
for inventory. Both agreements are subject to bankruptcy court
approval. A court hearing has been scheduled for August 21, 2003
to consider the sale of assets.

"The Company believes that under the new owners, these stores will
be able to capitalize on its individual strengths as well as have
greater access to financial resources necessary to continue to
prosper and grow," said Robert J. Kelly, Eagle Chairman and Chief
Executive Officer. "We want to thank our employees of those stores
for always giving one hundred percent to Eagle Foods and the
communities they serve, and wish them well in their future
endeavors."

The deadline for submitting bids for all other assets in the
competitive bid process being conducted under section 363 of the
U.S. Bankruptcy Code has been extended to August 18, 2003. The
auction of Eagle Foods' other assets will be conducted in Chicago
on August 20, 2003 and a hearing to confirm results of the auction
will be held before the U.S. Bankruptcy Court on September 11,
2003.

The Company operates 51 Eagle Country Markets in Iowa and
Illinois.


EL PASO CORP: Second Quarter Net Loss Hits $1.2 Billion Mark
------------------------------------------------------------
El Paso Corporation (NYSE: EP) reported results for the second
quarter of 2003 and updated its progress on its 2003 operational
and financial plan.

                         Highlights

-- The company announced that Douglas L. Foshee will become the
   new president and chief executive officer, effective
   September 2, 2003.

-- Year-to-date cash flow from operations increased to $1 billion
   from $527 million in the first half of 2002.

-- During the first six months of 2003, El Paso reduced its
   consolidated obligations senior to common stock by $1.5
   billion, net of non-recourse project finance debt.

-- The company continued to make progress on its asset sale
   program with approximately $2.7 billion (78 percent) of sales
   completed or announced against its 2003 goal of $3.4 billion.

-- The company continues to make substantial progress in its
   restructuring efforts by exiting non-strategic businesses,
   which will allow El Paso to focus on the future growth of its
   core businesses.

-- El Paso completed a number of important financings and extended
   its near-term debt maturities.

-- The company executed definitive settlement agreements
   associated with the western energy crisis.

-- The company completed its announced Clean Slate Initiative,
   which resulted in the identification of approximately $445
   million of cost savings and business efficiencies that will be
   phased in by the end of 2004.

-- While the pipeline, production, midstream, and power businesses
   achieved good second quarter results, financial results for
   energy trading were below expectations. The company is
   continuing its progress towards the liquidation of its trading
   book.

                       Financial Results

El Paso implemented two important strategic initiatives during the
second quarter that affected financial results. As previously
announced, El Paso's petroleum business was moved to discontinued
operations as a result of the decision to exit that business
within the next 12 months. In accordance with Generally Accepted
Accounting Principles (GAAP), prior periods have been restated
(with no impact to net income) to classify petroleum as a
discontinued operation. In addition, as part of the company's
efforts to simplify its balance sheet, El Paso purchased the
equity interests of Gemstone and Electron for a total of $225
million in the second quarter, and the associated assets and debt
were consolidated accordingly. Because the Electron acquisition
process began in the first quarter, GAAP required that first
quarter 2003 results be restated (with no impact to net income) to
reflect the consolidation of the Electron assets as of January 1,
2003.

                    SECOND QUARTER RESULTS

El Paso reported a net loss of $1.2 billion, or $1.99 per diluted
share, for the second quarter of 2003 compared with a loss of $45
million, or $.08 per diluted share, in the second quarter of 2002.
On a pro forma basis, the company had a second quarter 2003 loss
of $8 million, or $0.01 per diluted share, compared with earnings
of $283 million, or $.53 per diluted share, in the second quarter
of 2002. Second quarter 2003 results for discontinued operations
include an $836-million after-tax, or $1.40 per share, impairment
of its petroleum business, primarily related to the decision to
sell the Aruba refinery. Second quarter 2003 significant items
affecting continuing operations totaled $264 million, or $.44 per
diluted share, mostly attributable to an impairment of telecom
assets and the western energy settlement. Last year's second
quarter results included significant items totaling $226 million,
or $.42 per diluted share, primarily for ceiling test charges on
Canadian and other international natural gas and oil properties
and restructuring costs. A complete schedule of significant items
is attached to this release.

While not listed as significant items, two additional items
negatively impacted second quarter 2003 results. An increase in
the value of the Euro against the dollar affected the unhedged
portion of El Paso's Euro-denominated debt, causing an additional
$46 million of pre-tax corporate expense ($35 million after-tax,
or $.06 per diluted share). Also, the early repayment of a $1.2-
billion secured loan caused an additional $37 million of pre-tax
corporate expense ($28 million after-tax, or $.05 per diluted
share). This repayment results in annual interest expense savings
of $24 million.

El Paso reported strong cash flow from operating activities for
the first six months of 2003 of $1.0 billion. The company
generated $527 million of cash flow from operating activities
during the same period last year.

"Although this has been a difficult year for El Paso shareholders,
we believe that the actions we are taking will position us for
further debt reduction and earnings growth in 2004," said Ronald
L. Kuehn, Jr., chairman and chief executive officer of El Paso
Corporation. "We are making steady progress on our asset sale
program, simplifying our balance sheet, reducing our total
obligations senior to common stock, and continuing the liquidation
of our trading book. All of these are important components of our
concerted efforts to strengthen the company."

                SECOND QUARTER SEGMENT RESULTS

Pipeline Group

The Pipeline Group's second quarter reported EBIT was $145 million
compared with reported EBIT of $323 million during the second
quarter of 2002. Second quarter 2003 results include $154 million
of charges primarily related to the western energy settlement and
related expenses. After adjusting for significant items, second
quarter 2003 pro forma EBIT was $299 million compared with $324
million for the same 2002 period. The decline is due to the sale
of Colorado Interstate Gas Company's production properties in July
2002, the sale of ANR Pipeline's ownership in the Alliance
pipeline system in November 2002, and lower revenues on the El
Paso Natural Gas pipeline system. These factors were partially
offset by the reactivation of the Elba Island LNG facility and new
expansion projects, including Southern Natural Gas Company's South
System I expansion.

El Paso's Pipeline Group continues with its active expansion
program. In May, Cheyenne Plains Gas Pipeline Company filed an
application with the Federal Energy Regulatory Commission seeking
approval to construct, own, and operate a new, 560-thousand
dekatherm per day (MDth/d) interstate pipeline to transport
natural gas from the Rockies to markets in the Mid-continent. The
pipeline is scheduled to be in-service by mid-2005. In June,
Tennessee Gas Pipeline Company announced the completion of
construction and the beginning of service on its Can-East Project
that extends its system in northern Pennsylvania to Leidy,
Pennsylvania. Tennessee also placed its South Texas Expansion
Project into service on August 1, 2003. The project connects
Tennessee's existing South Texas system in Hidalgo County to
Gasoducto del Rio, a new natural gas pipeline in northern Mexico.

Production

Production's reported EBIT for the second quarter 2003 was $168
million versus $7 million during the second quarter of 2002.
Reported results for 2002 included a $234-million ceiling test
charge associated primarily with Canadian and other international
natural gas and oil properties. Second quarter equivalent
production declined 25 percent due largely to sales of proved
reserves since early 2002. The realized price for natural gas, net
of hedges, rose to $4.06 per thousand cubic feet (Mcf) in 2003
from $3.45 per Mcf in 2002, while the realized price for oil,
condensate, and liquids, net of hedges, rose to $25.15 from $22.14
per barrel (Bbl). Total per-unit costs increased to an average of
$2.69 per thousand cubic feet equivalent (Mcfe) in the second
quarter 2003 compared with $1.92 per Mcfe during the same 2002
period. The per-unit costs were affected by a higher depletion
rate resulting from higher finding and development costs
experienced over the last year and the sale of reserves that have
decreased the company's reserve base. In addition, the per-unit
costs were affected by increased corporate expense allocations on
lower equivalent production and tax credits taken in 2002 for
qualified natural gas wells.

The company has hedged approximately 108 trillion British thermal
units (TBtu) of its remaining expected 2003 natural gas production
at a NYMEX price of $3.45 per million British thermal unit (MMBtu)
or $3.65 per Mcf. For 2004, El Paso has hedged approximately 75
TBtu of its natural gas production at a NYMEX price of $2.55 per
MMBtu or $2.70 per Mcf. The company expects that its 2003 realized
price for natural gas will be approximately $.50 less than the
NYMEX spot price due to transportation costs and regional price
differentials.

El Paso's exploration program has delivered good results so far
this year, particularly in the deep shelf Gulf of Mexico and
Brazil. The company has been successful on eight of 11 deep-shelf
exploration wells. These discoveries have resulted in
approximately 130 billion cubic feet equivalent (Bcfe) of proved
reserves, with another 50 Bcfe of probable reserves identified.
These discoveries will add an estimated 185 million cubic feet
equivalent per day (MMcfe/d) of production, net to El Paso's
interest. To date, only one well has been placed on stream for 20
MMcfe/d. Offshore Brazil, El Paso has made two discoveries in the
Camamu Basin and the Santos Basin that are adding an initial 256
Bcfe of proved reserves with another 374 Bcfe of probable reserves
that could be added with additional drilling and testing.

While El Paso's exploration and development drilling programs have
yielded good results this year, delays in connecting new wells,
the loss of production from existing Gulf of Mexico and South
Texas wells, and a faster than anticipated decline of base
production have caused reduced expectations for 2003 production.
The company now believes that its full year 2003 production will
be between 450 and 470 Bcfe, approximately 85 percent of which is
natural gas.

Field Services

Field Services reported an EBIT loss of $54 million for the second
quarter 2003 compared with income of $54 million during the second
quarter of 2002. Reported results for 2003 include an $80-million
impairment of a joint venture interest in the Dauphin Island
pipeline system, Mobile Bay gas processing plant and related
assets plus $3 million of restructuring costs offset by $6 million
of asset sale gains. Quarterly results for 2002 included a $10-
million asset sale gain. Second quarter 2003 pro forma EBIT was
lower than 2002 levels, primarily due to the sale of approximately
$1 billion of midstream assets in the past year to GulfTerra
Energy Partners (NYSE: GTM) and other third parties. As a result
of these asset sales, El Paso's remaining midstream business is
largely comprised of certain gas processing plants and its
interest in GulfTerra.

The earnings contribution from GulfTerra increased to $42 million
this quarter from $18 million during the second quarter of 2002.
GulfTerra had a very successful second quarter due to significant
contributions from the onshore San Juan and Permian Basin assets
and the offshore Viosca Knoll pipeline and Falcon Nest platform
and pipeline. Cash distributions from GulfTerra totaled $31
million during the quarter compared with $19 million in the second
quarter of 2002.

The decrease in gathering and transportation volumes from prior-
year levels is due to asset sales. Processing margins were reduced
during the quarter due to higher gas prices and reduced
petrochemical and refinery demand for natural gas liquids.

Merchant Energy

The Merchant Energy Group, consisting of domestic and
international power, LNG, and energy trading, reported second
quarter 2003 EBIT of $76 million compared with $123 million in the
prior-year period. Significant items for 2003 include an $18-
million reduction in the estimated western energy settlement
liability, net of related expenses, plus offsetting net asset sale
gains, impairments and restructuring costs, while 2002 results
included $11 million for restructuring costs.

El Paso's power business had pro forma second quarter EBIT of $169
million versus $213 million in 2002. Second quarter results
reflect the consolidation of earnings from Electron, which earned
$70 million during the period compared with $78 million last year,
including $46 million of management fees earned in 2002. EBIT from
the Gemstone investment consolidated in April 2003 increased by
$33 million for the quarter compared with last year. Also
contributing to 2003 results was higher income from domestic power
assets. Last year's results also benefited from the $90-million
gain from a buyout of a power contract in El Salvador.

Trading operations had a second quarter pro forma EBIT loss of $95
million compared with a $132-million EBIT loss in the same 2002
period. Several factors contributed to the second quarter 2003
loss. A lower spread between natural gas prices and power prices
at quarter end caused a $31-million mark-to-market loss on a power
tolling arrangement in the Midwest. El Paso also incurred
approximately $15 million of demand charges for transportation and
storage contracts that were not fully utilized due to decreased
activity as the company continues to exit trading and focus on
conserving cash. The remainder of the losses came primarily from
general and administrative expenses, including $12 million of
accretion for the western energy settlement liability.

LNG and Other had a pro forma EBIT loss of $17 million in the
second quarter of 2003 versus income of $53 million last year. The
decrease was primarily due to mark-to-market income from the
execution of the Snovhit LNG supply contract in 2002 and mark-to-
market losses on LNG supply contracts in 2003.

El Paso continues to show consistent progress in exiting the
trading business. Since the beginning of the year through June 30,
2003, forward contract positions have declined 40 percent,
including the liquidation of its European trading portfolio and
its coal, currency, and interest rate books. In addition, the
company's transportation capacity has declined 57 percent, and
storage capacity has declined 78 percent. The company also
continues to pursue the sale of its domestic power facilities and
LNG supply contracts.

Detailed operating statistics for each of El Paso's businesses are
available at http://www.elpaso.comin the Investors section.

                       INTEREST EXPENSE

Interest expense on outstanding debt and preferred interests of
consolidated subsidiaries (which includes payments on financings
such as preferred securities and Clydesdale) increased to $479
million in the second quarter of 2003 versus $347 million in the
prior year. The increase is due to higher average debt balances in
2003 and the consolidation of Electron, Gemstone, and the Lakeside
operating lease.

El Paso has created a Board-level Long Range Planning Committee,
which is preparing a course of action to optimize and streamline
the company's core natural gas businesses, achieve improved
earnings and additional debt reduction, and generate free cash
flow. The plan will undergo further review by Douglas L. Foshee
after he becomes El Paso's president and chief executive officer
on September 2, 2003.

On a reported basis for 2003, El Paso expects to realize a loss of
approximately $2.35 to $2.65 per diluted share. This forecast
assumes that discontinued operations will break even for the rest
of the year and that there will not be any additional significant
items. El Paso now expects to achieve pro forma earnings per
diluted share for continuing operations for 2003 of approximately
$.15 to $.45. This is based primarily on lower natural gas and oil
production and current natural gas prices, the movement of
petroleum to discontinued operations and greater-than-expected
trading losses.

                         LIQUIDITY UPDATE

As of July 31, 2003, El Paso had $3.0 billion of available cash
and lines of credit as detailed below.

                                         Sources
                                      (in billions)

Available cash                             $1.5
2-year bank facility                        3.0
Multi-year bank facility                    1.0

Subtotal sources                           $5.5

Uses

2-year bank facility                       $1.5
2-year facility letters of credit           1.0
Multi-year bank facility                     --
Multi-year facility letters of credit        --

Subtotal uses                              $2.5

Net available cash and lines of credit     $3.0

As of June 30, 2003, El Paso had $1.8 billion of total cash, $1.4
billion of which was readily available. El Paso's multi-year bank
facility expired on August 4, 2003, and was not renewed in
accordance with its previously announced financing plans.

El Paso Corporation (S&P, B+ L-T Corporate Credit Rating,
Negative) is the leading provider of natural gas services and the
largest pipeline company in North America.  The company has core
businesses in pipelines, production, and midstream services.  Rich
in assets, El Paso is committed to developing and delivering new
energy supplies and to meeting the growing demand for new energy
infrastructure.  For more information, visit http://www.elpaso.com


ELDERTRUST: Completes Restructuring of Lease on Three Properties
----------------------------------------------------------------
ElderTrust (NYSE:ETT), an equity healthcare REIT, has restructured
its lease transactions with Crozer/Genesis ElderCare Limited
Partnership and satisfied its $14.0 million loan obligation
secured by the Harston Hall and Pennsburg properties. Under the
terms of the agreements:

-- The Harston Hall property was sold to Genesis Health Ventures,
   Inc. (NASDAQ:GHVI) for $2,600,000;

-- The annual rent on the Pennsburg Manor property was reduced to
   $656,000 per year in exchange for a one-time payment by Genesis
   of $2,500,000; and

-- The leases for the Pennsburg, Chapel Manor and Belvedere
   properties were extended for approximately twelve years, and
   certain other changes were made to the leases, including but
   not limited to elimination and return of the security deposits,
   the addition of a lease coverage ratio test of at least 1.25:1
   and the addition of lease guarantees by Genesis. Following
   Genesis' proposed spin-off to its shareholders of its Eldercare
   businesses, the leases will be guaranteed by HealthCare.

The $14.0 million non-recourse loan securing the Harston Hall and
Pennsburg properties was also settled as a result of the above
transaction. This loan was satisfied in full for a cash payment of
$11.5 million, consisting of the $5.1 million received by the
Company from Genesis, $5.5 million obtained by the Company under
its credit facility with Wachovia Bank and $0.9 million from cash
held on its balance sheet.

As previously announced, ElderTrust recorded an impairment charge
on the Harston Hall property of $2.0 million in the quarter ended
June 30, 2003. During the quarter ended September 30, 2003, the
Company will record a gain of approximately $2.5 million
corresponding to the amount of debt forgiven by the lender in the
above transaction.

The Company estimates that, were this transaction consummated on
April 1, 2003, reported Funds from Operations for the quarter
ended June 30, 2003 would have been approximately $0.41 per
diluted share, or approximately $0.01 less than that reported for
the quarter.

"This is an excellent outcome for this portfolio,' said D. Lee
McCreary, Jr., ElderTrust's President and Chief Executive Officer.
'Leasing these assets to Genesis represents a greatly improved
credit situation and, coupled with the satisfaction of the
Harston/Pennsburg debt, represents a significant step forward for
our organization."

ElderTrust is a real estate investment trust that invests in real
estate properties used in the healthcare services industry,
principally along the East Coast of the United States. Since
commencing operations in January 1998, the Company has acquired
interests in 30 properties.

For more information on ElderTrust visit ElderTrust's Web site at
http://www.eldertrust.com

ElderTrust -- whose June 30, 2003 balance sheet shows a working
capital deficit of about $12 million -- is a real estate
investment trust that invests in real estate properties used in
the healthcare services industry, principally along the East Coast
of the United States. The Company currently owns or has interests
in 31 properties.


FEDERAL-MOGUL: Wants Nod for Amended & Restated Credit Agreement
----------------------------------------------------------------
On August 6, 2003, Federal-Mogul Corporation filed a motion with
the U.S. Bankruptcy Court in Delaware for approval of its Amended
and Restated Revolving Credit, Term Loan and Guaranty Agreement,
dated as of August 6, 2003 with JP Morgan Chase Bank, as
Administrative Agent for the lenders. The Amended Credit Agreement
amends the Company's current debtor in possession financing
facility, which is scheduled to expire on September 30, 2003.

As requested by the Company, the Amended Credit Agreement will
reduce the Company's total borrowing capacity from $675 million to
$600 million, $350 million of which will be in the form of a
revolving credit facility. The expiration of the borrowing
facility will be extended to February 6, 2005. In addition, the
Amended Credit Agreement will reset the Company's financial
covenants to reflect changes in the Company's business.

A hearing to approve the terms of the Amended Credit Agreement is
currently scheduled to be held on August 27, 2003.


FLEMING COMPANIES: Court Okays KPMG as Committee's Accountants
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of Fleming
Companies, Inc., and debtor-affiliates, obtained permission from
the Court to retain KPMG LLP, as its accountants and restructuring
advisors.

KPMG will:

    (a) analyze and comment on reports or filings that are
        prepared pursuant to the Bankruptcy Code, the Federal
        Rules of Bankruptcy Procedure, or the Local Bankruptcy
        Rules for the District of Delaware, in accordance with
        the Court orders, or at the request or direction of the
        Office of the United States Trustee, including, but not
        limited to schedules of assets and liabilities, statements
        of financial affairs, and monthly operating reports;

    (b) analyze and consult on the Debtors' financial information,
        including, but not limited to, cash receipts and
        disbursements, financial statement items and proposed
        or potential transactions for which Court approval is or
        may be sought;

    (c) monitor any debtor-in-possession or other financing
        arrangements, including budgets and reports;

    (d) assist in identifying, analyzing and evaluating potential
        cost containment and liquidity enhancement opportunities;

    (e) assist in identifying and analyzing potential improvement
        and asset redeployment opportunities and coordinate with
        Compass SRP Associates LLP regarding an assessment of the
        improvements and opportunities;

    (f) analyze assumption and rejection issues regarding
        executory contracts and leases;

    (g) analyze and consult on the Debtors' proposed business
        plans and their operations and financial condition.  KPMG
        will coordinate with Compass regarding the assessment of
        these areas;

    (h) assist in reviewing and analyzing reorganization
        strategies and alternatives;

    (i) analyze and critique the Debtors' financial projections
        and assumptions;

    (j) analyze the liquidation and reorganization values and
        coordinate with Compass regarding the assessment of such
        values;

    (k) assist in preparing and documenting a plan of
        reorganization, including, but not limited to, analyzing
        feasibility and preparing, developing and analyzing
        information necessary for confirmation;

    (l) advise and assist the Committee and, where appropriate,
        participate in negotiations and meetings with the Debtors,
        lenders and other parties-in-interest and coordinate with
        Compass regarding the assessment of these areas;

    (m) analyze and monitor the Debtors' tax positions, and advise
        and assist in evaluating the tax consequences of proposed
        plans of reorganization and other transaction events;

    (n) evaluate compensation and benefit issues, including
        pension and other post-retirement employee benefit
        obligations, labor agreements and potential employee
        retention and severance plans;

    (o) assist with the analysis of claims, including analyses of
        creditor's claims by type and entity;

    (p) investigate and conduct forensic analysis of the Debtors'
        prepetition transactions and other transfers of cash or
        other assets;

    (q) provide litigation support services and expert witness
        testimony regarding confirmation issues, avoidance actions
        or other matters; and

    (r) provide other functions by the Committee or its counsel to
        assist the Committee in the Cases.

KPMG will be compensated for its services in accordance with its
standard hourly rates plus reimbursement of actual, necessary
expenses.  KPMG's customary hourly rates are:

       Partners                         $540 - 560
       Managing Directors/Directors      450 - 510
       Senior Managers/Managers          360 - 420
       Senior/Staff Consultants          270 - 330
       Associate                         180 - 240
       Paraprofessionals                 120
(Fleming Bankruptcy News, Issue No. 10; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


FOAMEX INT'L: June 29 Balance Sheet Insolvency Tops $190 Million
----------------------------------------------------------------
Foamex International Inc. (NASDAQ: FMXI), the leading manufacturer
of flexible polyurethane and advanced polymer foam products in
North America, announced second quarter earnings of $0.10 per
diluted share. The Company also announced that it is presently
finalizing a comprehensive refinancing of its bank debt.

                    Second Quarter 2003 Results

Sales

Net sales for the second quarter were $334.3 million, down 3% from
$345.9 million in the record quarter of a year ago. Gross profit
was $40.2 million in 2003, down 14% from $46.9 million in 2002.
Sequentially, the second quarter gross margin of 12.0% was higher
than the 9.5% reported in the first quarter of 2003, representing
a significant step in the Company's efforts to return to
historical levels of profitability. The improvement primarily
reflects the implementation of selling price increases and
manufacturing efficiencies derived from the execution of Foamex's
profit restoration plan.

Earnings

Net income for the quarter was $2.7 million, or $0.10 per diluted
share. This compares with a net income of $81.4 million, or $3.04
per diluted share in the second quarter of 2002, which included a
$77.3 million income tax benefit related to a reversal in that
period of a valuation allowance on deferred income tax assets.

Income from operations was $21.2 million for the second quarter of
2003, compared to $25.2 million in the second quarter of 2002,
reflecting the impact of raw material cost increases that have not
been fully recovered through selling price increases. Selling,
general, and administrative expenses in the quarter were $19.8
million, down 9% from the 2002 quarter. Interest and debt issuance
expense for the second quarter was $19.4 million, an increase of
12% from the 2002 quarter, due to higher effective interest rates
and slightly higher average debt levels.

Foamex International's June 29, 2003 balance sheet shows a total
shareholders' equity deficit of about $190 million.

Commenting on the results, Tom Chorman, President and Chief
Executive Officer of Foamex, said: "Despite a difficult economic
environment and the major challenge we faced in addressing the
steep increases in our raw material costs, we have met our profit
restoration goals for the quarter and are building strength in our
business for the future. This represents the third quarter of
sequential gross profit improvement and reduced SG&A for Foamex,
and this performance should send a positive message to our
shareholders, customers and competitors that Foamex will continue
to be an industry leader."

                      Year to Date Results

Sales

Net sales for the six months ended June 29, 2003 were $662.1
million, up marginally from the $660.0 million in the first half
of 2002. Gross profit was $71.5 million, down 16% from $84.6
million in 2002. Gross profit as a percentage of sales decreased
to 10.8% in 2003 from 12.8% in 2002.

Earnings

Net loss for the first half of 2003 was $5.4 million, or $0.22 per
diluted share, compared to net income of $13.9 million, or $0.52
per diluted share in 2002. The 2002 period includes the $77.3
million benefit from a deferred income tax adjustment and a $70.6
million charge from accounting changes related to goodwill.

Income from operations was $32.0 million for the first half of
2003, down from $46.7 million in the 2002 period. The impact of
raw material cost increases experienced in the second half of 2002
has only been partially recovered by selling price increases.

Interest and debt issuance expense for the first half of 2003 was
$38.5 million, a 7% increase from 2002 due to higher average debt
levels, higher effective interest rates and higher amortization of
debt issuance costs. The 2002 period also included a $4.3 million
charge relating to the write-off of debt issuance costs as a
result of an early extinguishment of debt.

                    Business Segment Performance

Foam Products

Foam Products net sales for the second quarter were $123.2
million, up 3% from $119.1 million in the second quarter of 2002.
Income from operations for the second quarter was $7.3 million, as
compared to $12.1 million in the second quarter of 2002. The
decrease primarily reflects the higher cost of raw materials.
Sequentially, second quarter operating margins improved from 1.8%
in the first quarter of 2003 to 5.9% primarily due to selling
price increases and manufacturing efficiencies.

For the six months ended June 29, 2003, Foam Products net sales
were $241.3 million, up 2% from $236.6 million in 2002. Increased
selling prices and increased volumes of consumer products were
partially offset by lower volumes in other markets. Income from
operations declined 57% to $9.5 million, primarily as a result of
increased raw material costs.

Automotive Products

Automotive Products net sales for the second quarter were $119.1
million, down 4% from the second quarter of 2002, due to lower
volumes. Income from operations for the second quarter was $7.0
million, down 17% from the same period one year ago, due to higher
raw material costs and lower revenue.

For the first six months of 2003, Automotive Products net sales
increased 5% to $240.3 million from $228.1 million in the 2002
first half. Income from operations decreased 18% to $14.0 million,
primarily due to higher raw material costs.

Carpet Cushion Products

Carpet Cushion Products net sales for the second quarter were
$54.3 million, down 10% from the second quarter of 2002 due to
lower volume related to facility closures and a strategic
refocusing of this business for improved profitability. Loss from
operations in the second quarter was $0.3 million, compared to a
$1.2 million loss in the same period of 2002. Sequentially, the
loss from operations improved by $2.8 million from the first
quarter of 2003 from the actions under the Company's profit
restoration plan.

For the first six months of 2003, Carpet Cushion Products net
sales decreased 9% to $103.2 million from $113.2 in the 2002 first
half. Loss from operations was $3.4 million in the first half of
2003 compared to a $4.2 million loss during the same period in
2002 primarily due to higher selling prices and operating
efficiencies.

Technical Products

Net sales for Technical Products in the second quarter were $30.6
million, down 9% from the second quarter of 2002 primarily due to
lower sales of commodity products. Income from operations for the
second quarter was $8.4 million, up 10% from the second quarter of
2002, due primarily to favorable product mix and lower operating
costs.

For the first six months of 2003, Technical Products net sales
decreased 2% to $63.0 million from $64.4 million in 2002. Income
from operations increased 16% to $16.0 million for the first six
months of 2003 compared to the same period in 2002 primarily as
the result of a favorable product mix.

Refinancing

Foamex is presently finalizing a transaction with Bank of America,
GE Capital and Silver Point Capital on a comprehensive refinancing
of its bank debt. The refinancing is expected to include a new
$240 million asset based credit facility and an $80 million second
lien loan. The new facilities would replace the existing $262
million bank facility, and will result in increased financial
flexibility and liquidity. The loans are contemplated to mature in
April 2007. The Company expects to announce consummation of this
transaction shortly. However, there is no assurance that the
transaction will close. The Company continues to be in compliance
with the terms of its existing credit agreement.

Foamex, headquartered in Linwood, PA, is the world's leading
producer of comfort cushioning for bedding, furniture, carpet
cushion and automotive markets. The Company also manufactures
high-performance polymers for diverse applications in the
industrial, aerospace, defense, electronics and computer
industries as well as filtration and acoustical applications for
the home. For more information visit the Foamex Web site at
http://www.foamex.com


GE COMMERCIAL: Fitch Rates Six Note Classes at Low-B Levels
-----------------------------------------------------------
GE Commercial Mortgage Corporation, series 2003-C2, commercial
mortgage pass-through certificates are rated by Fitch Ratings as
follows:

        -- $66,719,000 class A-1 'AAA';
        -- $165,053,000 class A-2 'AAA';
        -- $54,285,000 class A-3 'AAA';
        -- $406,087,000 class A-4 'AAA';
        -- $283,896,000 class A-1A 'AAA';
        -- $1,183,079,997* class X-1 'AAA';
        -- $1,142,026,000* class X-2 'AAA';
        -- $35,493,000 class B 'AA';
        -- $14,788,000 class C 'AA-';
        -- $26,620,000 class D 'A';
        -- $14,788,000 class E 'A-';
        -- $14,789,000 class F 'BBB+';
        -- $14,788,000 class G 'BBB';
        -- $14,789,000 class H 'BBB-';
        -- $19,225,000 class J 'BB+';
        -- $7,394,000 class K 'BB';
        -- $8,873,000 class L 'BB-';
        -- $4,437,000 class M 'B+';
        -- $7,394,000 class N 'B';
        -- $2,958,000 class O 'B-';
        -- $20,703,997 class P 'NR';
        -- $4,002,000 class BLVD-1 'A';
        -- $2,501,000 class BLVD-2 'A-';
        -- $4,502,000 class BLVD-3 'BBB+';
        -- $3,549,000 class BLVD-4 'BBB';
        -- $7,960,750 class BLVD-5 'BBB-'.

             *Interest-only

Classes A-1, A-2, A-3, A-4, B and C are offered publicly, while
classes A-1A, X-1, X-2, D, E, F, G, H, J, K, L, M, N, O, P, BLVD-
1, BLVD-2, BLVD-3, BLVD-4 and BLVD-5 are privately placed pursuant
to rule 144A of the Securities Act of 1933. The certificates
represent beneficial ownership interest in the trust, primary
assets of which are 138 fixed-rate loans having an aggregate
principal balance of approximately $1,183,079,998, as of the
cutoff date.


GE HOME EQUITY: Fitch Further Junks Class B-2 Rating to C
---------------------------------------------------------
Fitch Ratings has downgraded the following GE Home Equity Issue:

                     Series 1997-HE4

-- Class B-1 to 'BB' from 'BBB' and removed from Rating Watch
   Negative;

-- Class B-2 to 'C' from 'CCC'.

The credit support for the class B-2 has been depleted due to the
amount of losses. On July 25, 2003, the bond took a principal
writedown. Although the transaction's structure allows for the
writedown amount to be repaid from future recoveries, the
structure does not allow for interest on the written down amount
to be repaid.


GENSYM CORP: June 30 Working Capital Deficit Tops $1 Million
------------------------------------------------------------
Gensym Corporation (OTC Bulletin Board: GNSM), a leading provider
of software and services for expert operations management,
reported revenues of $3,350,000 and a net loss of $1,228,000, or
$0.18 per diluted share, for the quarter ended June 30, 2003. In
the corresponding quarter of 2002, Gensym had revenues of
$4,480,000 and net income of $571,000, or $0.08 per diluted share.
Included in the loss for the current quarter were restructuring
charges of $250,000 relating to the reduction of personnel in the
United States and Europe.

"Our revenues, down $1,130,000 from the corresponding quarter of
last year, continue to be negatively impacted by the situation in
the Middle East and, to a lesser extent, by the poor economic
climate in Europe," said Lowell Hawkinson, Gensym's chairman,
president and CEO. "Our business in the Americas and Asia-Pacific
regions showed some growth over the first quarter of 2003, but it
was insufficient to offset the decline in our revenues in the
chemical, oil, and gas industries, major market areas for us, each
of which has been adversely affected by recent events in the
Middle East.

"As it remains uncertain when conditions in the Middle East and
Europe will improve, we have taken actions to reduce our expenses
to a level that is commensurate with current levels of revenue.
Some of the impact of these actions will be realized immediately,
and we expect that additional savings will be demonstrated by the
fourth quarter of this year. We have been careful in our cost
reduction efforts to protect our ability to serve our customers
efficiently and continue to enhance our product offerings.

"I am pleased to announce that David Ramsdell has just this week
been engaged, on a part-time basis, to perform the chief financial
officer function. Dave had served Gensym in a similar role from
late 1998 to early 2000, and thus can provide immediate and
substantial experience in Gensym's business, structure, and
operations."

Cash and cash equivalents at June 30, 2003 were $2,969,000
compared to $3,884,000 at December 31, 2002. The company continues
to have minimal debt.

At June 30, 2003, Gensym Corporation's balance sheet shows that
its total current liabilities exceeded its total current assets by
about $1 million. The Company's net capital has dwindled to about
$409,000 from about $2 million six months ago.

Gensym Corporation -- http://www.gensym.com-- is a provider of
software products and services that enable organizations to
automate aspects of their operations that have historically
required the direct attention of human experts. Gensym's product
and service offerings are all based on or relate to Gensym's
flagship product G2, which can emulate the reasoning of human
experts as they assess, diagnose, and respond to unusual operating
situations or as they seek to optimize operations.


GLOBAL CROSSING: Pulling Plug on MFS Cable Capacity Sales Pact
--------------------------------------------------------------
Global Crossing Ltd., and its debtor-affiliates seek the Court's
authority, pursuant to Section 365(a) of the Bankruptcy Code and
Rules 6006 and 9014 of the Federal Rules of Bankruptcy Procedure,
to reject a Capacity Sales Agreement between Debtor International
Exchange Networks, Ltd. and MFS Cable Company (Bermuda) Ltd., a
subsidiary or affiliate of WorldCom, Inc., dated July 13, 1999.

Robert N. H. Christmas, Esq., at Nixon Peabody LLP, in New York,
explains that the Contract relates to an indefeasible right of
use in a unit of capacity MFS owned, on the transatlantic fiber
optic submarine and terrestrial cable network operated by Gemini
Submarine Cable System Ltd. between London and New York.

While the $3,600,000 IRU purchase price has been fully paid, the
Contract obligates IXNET to pay significant annual operation,
maintenance and repair charges.  For example, the current O&M
Cost for 2003 is $414,690, due on December 20, 2003.  The O&M
Costs increase at a rate of 3.5% per annum for the useful life of
the Gemini network, which according to the Contract is expected
to be another 20 years from now.

Mr. Christmas discloses that the Debtors' obligations under the
contract are more burdensome than beneficial.  The downturn in
the market for telecommunications services and the Debtors'
businesses eliminated the need for the capacity the Contract
provides.  Thus, the IRU capacity under the contract is now
unnecessary to the operation of the Debtors' business.

Mr. Christmas notes that the O&M Cost obligations that remain to
be performed by the Debtors under the contract are substantial --
potentially more than $11,000,000 -- and would constitute a drain
on the Debtors' estates with no corresponding incremental value.
However, rejecting the Contract will not harm the Debtors'
capacity to service their ongoing operations.  Moreover, the
Debtors are not interested in marketing the Contract's IRU
capacity for resale because the O&M Costs under the Contract are
significantly greater than the Contract's current market value.

                        *     *     *

Judge Gerber authorizes the Debtors to reject the MFS Cable
Capacity Sales Agreement effective July 30, 2003. (Global Crossing
Bankruptcy News, Issue No. 45; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


GLOBALSTAR LP: Second Quarter Net Loss Widens 11% to $17 Million
----------------------------------------------------------------
Globalstar, the world's most widely-used handheld satellite
telephone service, announced its results for the quarter ended
June 30, 2003. Growth in both usage and subscriber levels received
a substantial boost during the quarter with the initiation of
service in Iraq, and the company further expanded its sales
potential with the introduction of new products and pricing plans
for the aviation market.

During the quarter, Globalstar also received court approval for an
agreement under which Globalstar will transfer substantially all
of its assets to a newly created Delaware corporation in exchange
for a minority interest in the new corporation. Under the
agreement, ICO Global Communications (Holdings) Limited will
acquire a majority interest in the new corporation in exchange for
an investment of $55 million. Following the closing of these
transactions, which remains subject to certain conditions,
Globalstar expects to distribute its interest in the new company
to its creditors as called for under a Chapter 11 plan. Globalstar
anticipates completing its restructuring and conclude the Chapter
11 process before the end of 2003.

Globalstar, L.P.'s total revenue for the second quarter of 2003
was $13.9 million, an increase of 20% over the previous quarter,
and a 216% increase over the same quarter in 2002. The company's
new service in Iraq, now one of Globalstar's top markets in call
traffic, helped to push minutes of use (MOUs) up 28% over the
previous quarter to 14.5 million minutes, which is also 88% higher
than usage levels seen in the second quarter of 2002.

For the second quarter of 2003, Globalstar's net loss widened 11%
over the first quarter to $16.8 million. This figure includes a
non-cash charge of $2.5 million relating to the write-off of
certain satellite assets.

"Globalstar's business continues to strengthen in virtually all of
our major markets," said Tony Navarra, president of Globalstar.
"In addition to the extraordinary growth we've seen in the Middle
East, usage in North America has also been setting new records.
Meanwhile, we are moving ahead with plans for further product
development and expansion of our service, while at the same time
finalizing our future business plan, based on the broader
resources and skills that should become available to us when the
ICO transaction is complete."

As of June 30, 2003, Globalstar had approximately 93,000
subscribers worldwide, an increase of 11% over the previous
quarter, and the company had $18.3 million cash-on-hand.

A full discussion of Globalstar's financial performance and
operations for the second quarter can be found in the company's
Report on Form 10-Q, to be filed shortly with the U.S. Securities
and Exchange Commission.

Globalstar is a provider of global mobile satellite
telecommunications services, offering both voice and data services
from virtually anywhere in over 100 countries around the world.
For more information, visit Globalstar's Web site at
http://www.globalstar.com

Globalstar L.P. filed for Chapter 11 protection on February 15,
2002 (Bankr. Del. Case No. 02-10504-PJW).


GRAHAM PACKAGING: June 30 Net Capital Deficit Narrows to $437MM
---------------------------------------------------------------
Graham Packaging Holdings Company, parent company of Graham
Packaging Company, L.P., reported a 3 percent gain in operating
income for the second quarter of 2003, compared to the second
quarter of last year.

Chief Financial Officer John E. Hamilton said operating income was
$35.9 million for the quarter ended June 29, 2003, up from $34.8
million for the quarter ended June 30, 2002. Hamilton said
covenant compliance EBITDA was $56.6 million for the second
quarter of 2003, compared to $55.6 million for the second quarter
of 2002.

Net sales for the second quarter were $261.1 million, an increase
of $24.7 million, or 10.4 percent, on an 8.1 percent gain in units
sold, compared to the second quarter of last year.

For the first six months of 2003, net sales totaled $493.8
million, an increase of $25.9 million, or 5.5 percent, on a 4.7
percent increase in units sold, over the same period in 2002.
Operating income for the first half was $64.2 million, or 6.3
percent greater than the first half of 2002. Covenant compliance
EBITDA was $105.6 million for the first half, an increase of 3
percent over the same period last year.

At June 29, 2003, the Company's balance sheet shows a total
partners' capital deficit of about $437 million.

"We have continued to build our business in the face of difficult
economic conditions and softer-than-expected customer demand.
Although there are general signs of an improving economy, we have
yet to see it reflected in our customers' order patterns," CEO
Philip R. Yates said. "The fact that we have been able to increase
sales and improve operating income against this backdrop attests
to the soundness of our core strategy and market positioning.

"To reinforce the core strategy and our initiatives, we have just
completed a significant organizational restructuring, primarily
focused on North American Food & Beverage and administrative
support, which will enhance our market effectiveness and improve
our ongoing cost base," added Yates.

The company estimates the effect of these actions will reduce 2003
operating income by a net amount of approximately $2.6 million,
including one-time reorganization expenses of approximately $3.3
million, offset by cost savings of approximately $0.7 million. For
2004, the company estimates a net increase in operating income of
$2.5 million as a result of this reorganization.

Graham has also wrapped up an extended period of consolidation
involving its European operations-including the sale of two
locations in Germany and the closure of a plant in France in the
second quarter of 2003. "Excluding business impacted by this
restructuring," Hamilton noted, "our sales and unit volume for the
second quarter would have increased by approximately 14 percent
and 11 percent, respectively, compared to last year."

Hamilton said the company's net income totaled $13.0 million for
the second quarter of this year, compared to $14.0 million for the
second quarter of last year. For the first six months, net income
was $8.5 million compared to $17.2 million for the same period in
2002. Hamilton noted that net interest expense increased by $11.0
million in the first half of 2003, primarily due to the write-off
of debt issuance fees related to the refinancing of the company's
senior credit agreement during the first quarter. The refinancing
also caused the company to reclassify into expense amounts that
had previously been recorded in other comprehensive income related
to certain interest rate swap agreements. This refinancing
increased liquidity and extended the maturity dates of the
company's revolving credit facility and term loans.

Graham Packaging, based in York, Pennsylvania, USA, is a worldwide
leader in the design, manufacture and sale of customized blow-
molded plastic containers for the branded food and beverage,
household and personal care, and automotive lubricants markets.
The company employs approximately 3,900 people at 55 plants
throughout North America, Europe and South America. It produced
more than nine billion units and had total worldwide net sales of
$906.7 million in 2002. Blackstone Capital Partners of New York is
the majority owner of Graham Packaging.


HEALTHSOUTH: Sets August 29 as Record Date for Interest Payment
---------------------------------------------------------------
HealthSouth Corporation (OTC Pink Sheets: HLSH) has set a record
date of August 29, 2003, for the payment of past due interest to
the holders of its outstanding notes. As previously announced, on
August 12, 2003, HealthSouth paid $117 million to its lending
banks and the trustees under its indentures representing payment
of all past due interest owed by the Company under its various
borrowing agreements. It is expected that payment of the past due
interest will be made to the holders of Company's notes shortly
after the record date.

HealthSouth also noted that its banks had previously issued a
payment blockage notice with respect to the Company's 10.75%
Senior Subordinated Notes due 2008 and its Convertible
Subordinated Debentures, which blockage would preclude holders of
those instruments from receiving past due interest. The Company
has requested that its banks waive such payment blockage to allow
past due interest to be paid to the holders of its subordinated
indebtedness. No assurance can be made that such waiver will be
granted.

HealthSouth is the nation's largest provider of outpatient
surgery, diagnostic imaging and rehabilitative healthcare
services, with nearly 1,700 locations in all 50 states and abroad.
HealthSouth can be found on the Web at http://www.healthsouth.com


HOMESTORE INC: June 30 Working Capital Deficit Narrows to $57MM
---------------------------------------------------------------
Homestore Inc. (Nasdaq: HOMS), the leading provider of real estate
media and technology solutions, reported financial results for the
second quarter ended June 30, 2003. Revenue for the second quarter
totaled $53.9 million versus $54.9 million for the first quarter
of 2003. The two percent decline in revenue was entirely
attributable to a $1.4 million reduction in related party revenue
from Cendant Corporation. Revenue from non-related customers
increased from $51.9 million to $52.3 million in the second
quarter. The gross margin for the quarter remained constant at 72
percent.

The loss from continuing operations for the second quarter was
$94.0 million, compared to income from continuing operations of
$87.0 million for the first quarter of 2003. The net loss for the
second quarter was $91.7 million, compared with net income of
$87.2 million in the first quarter of 2003. The results for both
quarters include substantial non-recurring items. Charges totaling
$75.8 million related to the settlements with the California State
Teacher's Retirement Systems and Cendant are included in the
results for the second quarter. The prior quarter included a one-
time non-recurring gain of $104.1 million related to the
settlement with AOL.

Excluding these charges, and certain other non-cash expenses,
principally stock based charges, depreciation and amortization,
Homestore's loss from operations was $7.6 million in the second
quarter of 2003 compared to a loss of $4.1 million in the first
quarter of 2003. This information is provided because management
uses it to monitor and assess the company's performance and
believes it is helpful to investors in understanding the company's
business. The increased loss is a function of the decline in
related party revenue, additional legal expense in negotiating the
settlements with CalSTRS and Cendant and the additional investment
in the sales force and product development initiatives announced
earlier this year.

Homestore's chief executive officer, Mike Long, commented on the
quarter, "We are pleased with our progress toward resolving our
legacy financial and litigation challenges. The settlements of the
CalSTRS securities class action lawsuit and the Cendant dispute
allow us to increase management's attention to Homestore's more
tightly focused operations. While it is still early in our
turnaround, we believe the significant investments we are making
in distribution, product development, sales and customer service
are paying off. Increased consumer traffic to our Web sites, new
relationships with MSN and Yahoo!, and the successful rollout of
our new media-based pricing model increase our confidence in our
ability to deliver on our commitment of making real estate
professionals more profitable and productive."

         SETTLEMENT IN SECURITIES CLASS ACTION LAWSUIT

Earlier today, Homestore announced that a settlement agreement had
been reached between Homestore and CalSTRS to settle the
consolidated class action lawsuit pending against Homestore in the
U.S. District Court for the Central District of California. Under
the settlement agreement, which is subject to court approval,
Homestore will pay $13.0 million in cash and issue 20 million new
shares of Homestore common stock to members of the class and will
adopt certain corporate governance provisions designed to enhance
shareholder interests.

The $13.0 million cash portion of the settlement will be funded
from Homestore's existing cash resources, and together with the
common stock currently valued at $50.6 million (based on the
closing market price on August 12, 2003), will result in a one-
time litigation settlement charge of $63.6 million, which is
reflected in the Company's June 30, 2003 financial statements.
Homestore will place $10.0 million in escrow upon preliminary
approval by the Court, with an additional $3.0 million due upon
final judicial approval of the settlement. Following this
approval, the $13.0 million and 20 million shares of newly issued
common stock will be distributed to the class.

                     SETTLEMENT WITH CENDANT

On August 6, 2003 Homestore announced that it had settled a
dispute with Cendant Corporation (NYSE: CD) and certain of its
affiliates arising out of Homestore's 2001 acquisition of
Move.com, Inc. and Welcome Wagon International Inc. from Cendant.
The settlement also terminated and replaced several agreements
that Homestore and Cendant entered into at the time of and
following the original transaction. As a result of the settlement,
Homestore recorded a $12.2 million one-time, non-cash, impairment
charge in its second quarter financial statements.

                 YEAR OVER YEAR QUARTERLY RESULTS

Revenue for the second quarter totaled $53.9 million versus $65.9
million for the second quarter of 2002. The decline in revenue is
due to the expiration of certain legacy revenue agreements with
Cendant, the sale of our Hessel business in early 2003, the
transition of our Top Producer from a desktop product to a
subscription model and weak demand for advertising in the
Company's Print segment.

The loss from continuing operations for the second quarter was
$94.0 million, compared to a loss of $62.4 million for the second
quarter of 2002. The net loss for the second quarter was $91.7
million, compared with net loss of $52.3 million in the second
quarter of 2002.

                        SIX MONTHS RESULTS

Revenue for the first six months of 2003 was $108.7 million
compared to $140.0 million for the same period in 2002. The loss
from continuing operations was $7.0 million, compared to $98.1
million in the same period of 2002. The net loss for the six
months ended June 30, 2003 was $4.5 million, compared with net
loss of $87.1 million in the first six months of 2002.

At June 30, 2003, Homestore Inc.'s balance sheet shows that its
total current liabilities outweighed its total current assets by
about $57 million, while total shareholders' equity is down to $37
million.

Homestore Inc. (Nasdaq: HOMS) is the leading provider of real
estate media and technology solutions. The company operates the
number one network of home and real estate Web sites including
flagship site Realtor.com(R), the official Web site of the
National Association of Realtors(R); HomeBuilder.com(TM), the
official new homes site of the National Association of Home
Builders; Homestore(R) Apartments & Rentals; Senior Housing; and
Homestore.com(R), a home information resource. Homestore's print
businesses are Homestore(TM) Plans and Publications and Welcome
Wagon(R). Homestore's professional software divisions include
Computers for Tracts(TM), Top Producer(R) Systems and WyldFyre(TM)
Technologies. For more information: http://ir.homestore.com


I-INCUBATOR.COM: Hires Windes & McClaughry as New Accountants
-------------------------------------------------------------
On July 23, 2003, I-Incubator.com, Inc., through its wholly-owned
subsidiary, American Automotive Group Acquisition Corp. acquired
American Automotive Group, Inc., a California corporation, under a
merger agreement. In the merger, shareholders of American
Automotive acquired a majority interest in I-Incubator.com, Inc.
When the Company acquired American Automotive Group and management
of American Automotive became management of the Company, it was
determined that I-Incubator-com's principal independent
accountant, Salibello & Broder, LLP, was to be dismissed.

On July 24, 2003, the Company engaged Windes & McClaughry as its
principal independent accountant. The action to dismiss S&B and
engage Windes & McClaughry was taken upon the unanimous approval
of the Board of Directors of I-Incubator.com.

I-Incubator.com attempted to contact S&B prior to filing of the
initial Form 8-K announcing the dismissal of S&B, but was unable
to make contact. Subsequent to the filing of the initial Form 8-K,
it was discovered that S&B resigned as the Company's accountants
on September 30, 2002. American Automotive Group was not aware of
this information upon execution of the merger agreement and made a
diligent effort to contact S&B on July 28, 2003 prior to filing
the Form 8-K.

During the last two fiscal years ended December 31, 2001 and
December 31, 2000 and through September 30, 2002, S&B's report on
the Company's financial statements was modified by the inclusion
of an explanatory paragraph raising substantial doubt about the
ability of the Company to continue as a going concern.


INTEGRATED INFO.: June 30 Balance Sheet Upside-Down by $870K
------------------------------------------------------------
Integrated Information Systems Inc. (OTCBB: IISX), a leading
provider of secure integrated information solutions, announced
results for its second quarter ended June 30, 2003.

For the second quarter of 2003, IIS reported a net loss of
$924,000, compared to net loss of $1.7 million for the first
quarter ended March 31, 2003. Revenue for the second quarter was
$2.1 million, compared to revenue of $2.9 million for the first
quarter of 2003. The net loss of $924,000 in the second quarter of
2003 included $212,000 in depreciation and amortization costs and
$159,000 in interest expense. Continuing overhead expense
reduction efforts during the second quarter of 2003 are expected
to result in an estimated $190,000 reduction in general and
administrative expenses in the third quarter of 2003.

At June 30, 2003, Integrated Information's balance sheet shows a
working capital deficit of about $3 million, and a total
shareholders' equity deficit of about $870,000.

"We have continued to close the gap and move closer to a profile
where we can be profitable again. We expect that the third and
fourth quarters of 2003 will each bring another improvement in our
quarterly results. We feel that we are investing in the right
service offerings and the right business model for serving the IT
needs of middle market organizations. Additionally, we are
confident that we have adequate financing to execute on our
plans," said Jim Garvey, chairman, chief executive officer and
president of IIS.

Integrated Information Systems(TM) is a leading provider of secure
integrated information solutions. IIS specializes in securely
optimizing, enhancing and extending information applications and
networks to serve employees, partners, customers and suppliers.
IIS new technology solutions help organizations "do more with
less." Founded in 1988, IIS has operations in Denver; Madison and
Milwaukee, Wis.; Phoenix; Portland, Ore. and Bangalore, India.

For more information on Integrated Information Systems, visit its
Web site: http://www.iis.com


KENZER CORP: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: The Kenzer Corporation
        11 Pennsylvania Plaza
        22nd Floor
        New York, NY 10001

Bankruptcy Case No.: 03-15130

Type of Business: The Debtor is an executive search firm
                  specializing in the placement of retail,
                  wholesale/manufacturing, financial, food, high-
                  tech, hospitality, e-commerce and health care
                  executives.

Chapter 11 Petition Date: August 13, 2003

Court: Southern District of New York (Manhattan)

Judge: Robert D. Drain

Debtor's Counsel: Alan David Halperin, Esq.
                  Halperin & Associates
                  1775 Broadway
                  Suite 515
                  New York, NY 10019
                  Tel: 212-765-9100
                  Fax: 212-765-0964

Total Assets: $580,551

Total Debts: $4,521,486

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
7 Third Ave. Leasehold LLC  Rent                      $515,966
777 Third Ave.
New York, NY 10017
Tel: 212-758-0437

625 NMA Associates LLC                                $128,403

Cornick, Garber &           Accounting                 $61,750
Sandler, LLP

Property Minnesota II LLP   Rent                       $53,085

Carr American Realty        Rent                       $48,172

WorldCom/MCI                Telephone Service          $41,999

First Great West Life &     Employee deductions        $36,819
Annuity Ins. Co. -         for 401K plan
401K Oper.

Utica                       General Insurance          $33,978

Herrick, Feinstein, LLP     Legal                      $31,344

AT&T                        Telephone                  $26,810

IMRA                        Trade                      $24,200

R.C. Auletta                Advertising/Marketing      $21,883

Canon Financial Services,   Copier Lease               $19,998
Inc.

Thompson Media Inc.         Rent                       $17,384

Platinum Plus RK            Corporate Credit Card      $12,204

Platinum Plus ES            Corporate Credit Card      $11,968

Platinum Plus MM            Corporate Credit Card      $11,589

Canon Business              Copier                      $9,738
Solutions-NE

OxFord                      Health Insurance            $9,402

Int'l Network Associated    Membership fee              $9,000


LEAP WIRELESS: Committee Has Until Sept. 26 to Challenge Claims
---------------------------------------------------------------
Leap Wireless International Inc., and its debtor-affiliates are
authorized to use cash collateral of Cricket Communications, Inc.
on an interim basis pursuant to an Interim Stipulated Order
entered April 14, 2003.  Specifically, the Interim Stipulated
Order provides that any person or entity can only assert Claims
and Defenses in an action or other appropriate proceeding
commenced in the Court on or before 75 days after the date of
entry of the Interim Stipulated Order, subject to the right to
seek an extension of the Objection Deadline for cause or at a
later date as may be agreed by the Informal Vendor Debt
Committee.

At present, the Official Committee of Unsecured Creditors of Leap
Wireless International, Inc. and the Informal Vendor Debt
Committee agree to an extension of the Objection Deadline.
Accordingly, the Court approves the Stipulation entered by both
parties, which provides that the Objection Deadline for the
Official Committee to commence an action is extended to the
earlier of the date of substantial consummation of the Plan or
September 26, 2003. (Leap Wireless Bankruptcy News, Issue No. 8;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


LYNX THERAPEUTICS: Red Ink Continued to Flow in Second Quarter
--------------------------------------------------------------
Lynx Therapeutics, Inc., (Nasdaq: LYNX) reported an operating loss
of $1.9 million for the quarter ended June 30, 2003, as compared
to an operating loss of $4.9 million for the same period in 2002.
Lynx's operating loss was $3.1 million in the first quarter of
2003.

Lynx recorded non-cash, non-operating expense of $0.9 million in
the second quarter of 2003 and $0.7 million in the comparable 2002
period related to its pro-rata share of the net loss of Axaron
Bioscience AG. Lynx's net loss was $2.9 million for the quarter
ended June 30, 2003, as compared to a net loss of $5.5 million for
the 2002 period. The loss per share amounts for the 2003 and 2002
periods reflect the effect of the 1-for-7 reverse split of Lynx's
common stock completed on January 15, 2003.

Lynx's June 30, 2003 balance sheet shows that its total current
liabilities eclipsed its total current assets by about $2 million,
while total shareholders' equity shrank to $5 million from about
$12 million six months ago.

"Our operating performance in the second quarter of 2003 improved
over the 2002 quarter primarily due to growth in our genomics
revenues and our continued aggressive management of our expenses,"
said Kevin P. Corcoran, Lynx's President and Chief Executive
Officer. "Our second quarter 2003 revenues of $4.6 million grew by
approximately 61% and 40%, respectively, over our revenues of $2.9
million in the second quarter of 2002 and $3.3 million in the
first quarter of this year. Our goal remains to build our revenues
through increasing the number of Massively Parallel Signature
Sequencing, or MPSST, analyses we perform for our customers.
During the second quarter of 2003, we completed more than twice as
many MPSST analyses than we did in the first quarter of this
year."

Mr. Corcoran added, "We are pleased with the productivity of our
business development efforts that have resulted in four agreements
during the last three months, with Pfizer, IBM and the Institute
for Systems Biology, Innovative Dairy Products and the
International Livestock Research Institute, and nine agreements
since the beginning of 2003 (see "Collaborations and Agreements"
below). Additionally, the modification of our collaboration with
Takara Bio brought us approximately $3 million of cash in July and
provides Takara Bio with a larger installed base of MPSST
instruments for providing genomics discovery services in its
licensed territories. We will continue to receive payments from
Takara in connection with the supply of proprietary and other
reagents as well as the sale of any additional MPSST instruments."

Mr. Corcoran continued, "We ended the second quarter with $3.0
million in cash and $1.2 million in accounts receivable.
Additionally, we received a payment of approximately $3 million
from Takara Bio in July. While our primary goal is to improve our
financial position and fund our operations through payments to us
under existing and prospective relationships with customers,
collaborators and licensees, we will be considering various other
options, which include securing additional equity financing."

Revenues for the second quarter of 2003 were $4.6 million and
included technology access and service fees of $4.4 million.
Revenues of $2.9 million for the same period in 2002 included
technology access and service fees of $2.6 million. Lynx's
revenues have historically fluctuated from quarter to quarter and
year to year and may continue to fluctuate in future periods due
primarily to the nature of its MPSS(TM) service fees. These fees
are impacted principally by the timing and number of biological
samples received from customers and collaborators and the timing
of Lynx's performance of related analyses on these samples.

Operating costs and expenses were $6.5 million for the quarter
ended June 30, 2003, compared to $7.3 million for the same period
in 2002, excluding the restructuring charge of $0.5 million
related to workforce reduction in the second quarter of 2002. For
the 2003 quarter, the cost of services fees was $1.4 million,
compared to $0.4 million for the corresponding period in 2002, and
reflects the costs of providing our genomics discovery services.
Research and development expenses were $3.2 million for the 2003
quarter, compared to $5.4 million for the corresponding period in
2002. The decrease in research and development expenses in 2003
reflects a decrease in materials consumed in research and
development efforts and lower personnel expenses, primarily
resulting from the workforce reductions that occurred in the first
quarter of 2003 and the second quarter of 2002. General and
administrative expenses were $1.9 million for the three-month
period ended June 30, 2003, compared to $1.4 million for the
corresponding period in 2002. The increase in general and
administrative expenses in 2003 over the same period in 2002
reflects primarily expenses for outside services in support of our
commercial and business development efforts.

                    Six Months Ended June 30

For the six months ended June 30, 2003, Lynx had an operating loss
of $5.0 million, as compared to an operating loss of $8.8 million
for the same period in 2002.

Lynx recorded a non-cash, non-operating expense of $1.7 million in
the six months ended June 30, 2003 and $1.5 million in the
comparable 2002 period related to its pro-rata share of the net
loss of Axaron Bioscience AG. Other income in the six-month period
of 2002 included a realized gain of $0.9 million from the sale of
shares of common stock of Inex Pharmaceuticals Corporation in the
first quarter of 2002.

Lynx's net loss was $6.8 million for the six months ended June 30,
2003, as compared to a net loss of $9.2 million for the 2002
period. The loss per share amounts for the 2003 and 2002 periods
reflect the effect of the 1-for-7 reverse split of Lynx's common
stock completed on January 15, 2003.

Revenues for the six months ended June 30, 2003 were $7.8 million
and included technology access and service fees of $7.6 million.
Revenues of $7.9 million for the same period in 2002 included
technology access and service fees of $5.0 million and other
revenues of $2.9 million, including $2.6 million from the sale of
certain of Lynx's antisense technology assets.

Operating costs and expenses, excluding the restructuring charge
of $0.3 million in 2003 that comprised primarily severance charges
for former Lynx employees affected by the workforce reduction in
the first quarter of 2003, were $12.5 million for the six months
ended June 30, 2003, compared to $16.2 million for the same period
in 2002, excluding the restructuring charge of $0.5 million that
comprised primarily severance charges for former Lynx employees
affected by the workforce reduction in that period. For the six-
month period in 2003, cost of services fees was $2.1 million,
compared to $0.7 million for the corresponding period in 2002, and
reflects the costs of providing our genomics discovery services.
Research and development expenses were $6.8 million for the 2003
period, compared to $12.3 million for the corresponding period in
2002. The decrease in research and development expenses in 2003
reflects a decrease in materials consumed in research and
development efforts and lower personnel expenses, primarily
resulting from the workforce reductions that occurred in the first
quarter of 2003 and the second quarter of 2002. General and
administrative expenses were $3.7 million for the six-month period
ended June 30, 2003, compared to $3.1 million for the
corresponding period in 2002. The increase in general and
administrative expenses in 2003 over the same period in 2002
reflects primarily expenses for outside services in support of our
commercial and business development efforts.

As of June 30, 2003, Lynx had cash and cash equivalents of $3.0
million, including restricted cash of $1.2 million, and accounts
receivable of approximately $1.2 million. Additionally, Lynx
received a payment of approximately $3 million from Takara Bio in
July 2003 related to an amendment of Lynx's existing collaboration
with that company.

                    Collaborations and Agreements

To date in 2003, Lynx has added the following customers to its
genomics business, in line with its commercialization strategies
and tactics for establishing MPSS(TM)the technology of choice in
systems biology applications. In general, Lynx will perform
genomics discovery services to generate comprehensive and
quantitative gene expression profiles for the following customers
in the areas and/or for the purposes noted below:

-- Pfizer: Cell samples from normal and disease-affected patients
   in an effort to provide information on specific genes involved
   in disease progression.

-- Millennium Pharmaceuticals: To identify cell-specific gene
   markers for a certain blood cell type and to evaluate gene
   expression patterns from RNA in peripheral blood monocytes in
   response to treatments with specific compounds.

-- IBM and Institute for Systems Biology: Samples from human
   immune system cells to study how such cells respond to
   infectious diseases.

-- Institute for Systems Biology: Prostate cancer samples to
   develop a systems biology approach to understanding cancer.

-- National Institute on Aging: Human stem cell samples to
   understand the underlying principles of normal as well as
   abnormal cell differentiation, which research may lead to the
   development of novel approaches for prevention and treatment of
   many diseases including Alzheimer's and Parkinson's, spinal
   cord injuries, stroke and heart disease.

-- Genome Institute of Singapore: Human, mouse and fish tissue
   samples to provide a more complete picture of the activity of
   all genes that are critically important in normal development
   and in disease.

-- Northeastern University: Antarctic icefish samples for the
   potential discovery of genes involved in red and white blood
   cell development, which research may lead to new treatments and
   diagnostic probes for anemia, neutropeniea and leukemia.

-- Innovative Dairy Products: Mammary tissue of three diverse
   animal systems in an attempt to accelerate research in dairy
   genetics, particularly with regard to lactation performance

-- International Livestock Research Institute: Certain livestock
   parasites and the arthropod vectors that are responsible for
   transmission of these pathogens, including ticks and tsetse
   flies.

                         Financial Guidance

Revenues

Assuming sufficient funding for its operations, Lynx estimates
that it can grow its aggregate genomics revenues in fiscal 2003 to
approximately $20 million, with revenues estimated in the range of
$4 million to $5 million for the third quarter of 2003. The level
of revenues for 2003 will depend primarily on Lynx's MPSST service
fees, which are impacted principally by the timing and number of
biological samples received from existing customers and
collaborators, as well as Lynx's performance of related analyses
on these samples. Additionally, the number, type and timing of new
collaborations and agreements and the related demand for, and
delivery of, Lynx's services or products will impact the level of
future revenues.

Lynx is a leader in the development and application of novel
genomics analysis solutions that provide comprehensive and
quantitative digital gene expression information important to
modern systems biology research in the pharmaceutical,
biotechnology and agricultural industries. These solutions are
based on Megaclone(TM) and MPSS(TM), Lynx's unique and proprietary
cloning and sequencing technologies. For more information, visit
Lynx's Web site at http://www.lynxgen.com


MIRANT CORP: Seeks Approval of BSI's Appointment as Claims Agent
----------------------------------------------------------------
Pursuant to Section 156(c) of the Judiciary Code, the Mirant
Debtors seek the Court's authority to employ Bankruptcy Services
LLC effective July 14, 2003 to, among other things:

    (a) serve as the Court's noticing agent and mail notices to
        the Debtors' creditors and other parties-in-interest;

    (b) maintain the official claims register; and

    (c) serve as the Debtors' solicitation and balloting agent in
        connection with any plan of reorganization to which a
        disclosure statement has been approved.

According to Ian T. Peck, Esq., at Haynes and Boone LLP, in
Dallas, Texas, BSI will:

    (a) relieve the Clerk's Office of all noticing under any
        applicable rule of bankruptcy procedure;

    (b) file with the Clerk's Office a certificate of service,
        within 10 days after each service, which includes a copy
        of the notice, a list of persons to whom it was mailed
        and the date mailed;

    (c) maintain an up-to-date mailing list of all entities that
        have requested service of pleadings in these cases and a
        master service list of creditors and other parties-in-
        interest, which lists will be available upon request of
        the Clerk's Office;

    (d) comply with applicable state, municipal and local laws
        and rules, orders, regulations and requirements of
        Federal Government Departments and Bureaus;

    (e) relieve the Clerk's Office of all noticing under any
        applicable rule of bankruptcy procedure relating to the
        institution of a claims bar date and the processing of
        claims;

    (f) at any time, upon request, satisfy the Court that it has
        the capability to efficiently and effectively notice,
        docket and maintain proofs of claim;

    (g) furnish a notice of bar date approved by the Court for
        the filing of a proof of claim, including the coordination
        of publication, if necessary, and a form for filing a
        proof of claim to each creditor notified of the filing;

    (h) maintain all proofs of claim filed against each of the
        Debtors' estates;

    (i) maintain an official claims register by docketing all
        proofs of claim on a register containing certain
        information, including, but not limited to:

          (i) the name and address of claimant and agent, if
              agent filed proof of claim;

         (ii) the date received;

        (iii) the claim number assigned;

         (iv) the amount and classification asserted;

          (v) the comparative, scheduled amount of the creditor's
              claim, if applicable; and

         (vi) pertinent comments concerning disposition of claims;

    (j) maintain the original proofs of claim in correct claim
        number order, in an environmentally secure area, and
        protecting the integrity of these original documents from
        theft or alteration;

    (k) transmit to the Clerk's Office an official copy of the
        claims register on a monthly basis, unless requested in
        writing by the Clerk's Office on a more or less frequent
        basis;

    (l) maintain an up-to-date mailing list for all entities that
        have filed a proof of claim, which list will be available
        upon request of a party-in-interest or the Clerk's
        Office;

    (m) provide access to the public for examination of copies of
        the proofs of claim or proofs of interest filed in these
        cases without charge during regular business hours;

    (n) record all transfers of claims pursuant to Rule 3001(e) of
        the Federal Rules of Bankruptcy Procedure and provide
        notice of the transfer as required by Bankruptcy Rule
        3001(e);

    (o) maintain court orders concerning claims resolution;

    (p) make all original documents available to the Clerk's
        Office upon request on an expedited immediate basis;

    (q) promptly comply with such further conditions and
        requirements as the Clerk's Office may hereafter
        prescribe; and

    (r) provide balloting services in connection with the
        solicitation process for any Chapter 11 plan to which a
        disclosure statement has been approved by the Court.

Mr. Peck asserts that BSI is well qualified to serve as noticing,
claims and balloting agent because:

    (a) given the size of the Debtors' creditor body, it will be
        more efficient and less burdensome on the Clerk of the
        Court to have BSI undertake the tasks associated with
        noticing the Debtors' thousands of creditors and parties-
        in-interest and processing proofs of claim; and

    (b) BSI is one of the nation's leading agents for noticing,
        claims administration and balloting.

Moreover, Kathy Gerber, Senior Vice President of Bankruptcy
Services LLC, assures the Debtors, among other things, that:

    (a) BSI will not consider itself employed by the United
        States government and will not seek any compensation from
        the United States government in its capacity as the Agent
        in these Chapter 11 cases;

    (b) by accepting appointment in these Chapter 11 cases, BSI
        waives any rights to receive compensation from the United
        States government;

    (c) in its capacity as the Agent in these Chapter 11 cases,
        BSI will not be an agent of the United States and will
        not act on behalf of the United States;

    (d) in its capacity as the Agent in these Chapter 11 cases,
        BSI will not misrepresent any fact to any person; and

    (e) BSI will not employ any past or present employees of the
        Debtors in connection with its work as the Agent in these
        Chapter 11 cases.

Ms. Gerber adds that BSI's officers and employees do not have any
connection with or any interest to the Debtors' their creditors,
or any other party-in-interest, or their attorneys and
accountants except that in connection with BSI's representation
of the Debtors, there are certain interrelationships between and
among the Debtors.  However, Mr. Peck tells Judge Lynn that the
Debtors' relationship to one another 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. Gerber, BSI will charge the Debtors fees and
expenses upon submission of monthly invoices summarizing, in
reasonable detail, the services for which compensation is sought.
BSI will follow these compensation schedule:

A. Claims Agent and Reconciliation

    Set-Up Fee                          Waived
    Claims Docketing
      -- Document Handling              Waived
      -- Document Storage               Waived
      -- Input Records
         (a) Tape/Diskette              $0.10/each
         (b) Other Data Formats          125/hour
      -- Input Filed Claims              0.95/claim + hourly rates
      -- Database Maintenance            250 + 0.10/creditor/month
          and Claims Tracking

B. Balloting

    Printing and mailing of ballots to be incorporated with a
    Disclosure Statement and Plan mailing is subject to unit price
    for Mailing.  Set-up, tabulation and verification of the votes
    are charged hourly.

C. Professional Fees per hour

    Kathy Gerber                      $210
    Senior consultants                 186
    Programmer                         130 - 160
    Associate                          135
    Data Entry/Clerical                 40 - 60
    Schedule Preparation               225

D. Disbursements

    BSI will seek disbursement on agreed rates of expenses.

                           *     *     *

On an interim basis, the Court authorizes the Debtors to employ
Bankruptcy Services LLC effective July 14, 2003. (Mirant
Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


MOTELS OF AMERICA: Lease Decision Period Extended Until Dec. 8
--------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the Northern District of
Illinois, Motels of America obtained an extension of its lease
decision period.  The Court gives the Debtor until December 8,
2003 to determine whether to assume, assume and assign, or reject
its unexpired nonresidential real property leases.

Motels of America LLC, headquartered in Des Plaines, Illinois
filed its chapter 11 protection on July 10, 2003 (Bankr. N.D. Ill.
Case No. 03-29135).  Mohsin N. Khambati, Esq., Nathan F. Coco,
Esq., and Stephen Selbst, Esq., at McDermott Will & Emery
represent the Debtor in its restructuring efforts.  When the
Company filed for protection from its creditors, it listed
estimated debts and assets of over $100 million each.


MRS. FIELD'S: June 28 Working Capital Deficit Widens to $23 Mil.
----------------------------------------------------------------
Mrs. Field's Original Cookies, Inc.'s total net store and food
sales, which includes sales from stores and sales of frozen cookie
dough product to retail markets, were $41.5 million for the 26
weeks ended June 28, 2003, a decrease of $17.2 million, or 29.2
percent, from $58.7 million for the 26 weeks ended June 29, 2002.
Frozen cookie dough product sales were $200,000 and $300,000 for
the 26 weeks ended June 28, 2003 and June 29, 2002, respectively.

Store sales were $41.3 million for the 26 weeks ended June 28,
2003, a decrease of $17.1 million, or 29.3 percent, from $58.4
million for the 26 weeks ended June 29, 2002. The decrease in
store sales was principally due to i) approximately 2,300 fewer
store weeks (excluding Wal-Mart locations) for the 26 weeks ended
June 28, 2003 compared to the same period in 2002 resulting in a
sales shortfall from unit week average of $12.4 million, ii) a 5.9
percent reduction or $2.6 million in same store sales, which
management believes was a result of reduced mall traffic due to
the continued economic instability, the war in Iraq and lower
consumer confidence and iii) a decrease in sales from the
Company's Wal-Mart locations of $2.1 million for the 26 weeks
ended June 28, 2003 compared to the same period in 2002 due to the
closure of Wal-Mart locations in September 2002.

Cost of sales was $9.9 million for the 26 weeks ended June 28,
2003, a decrease of $4.1 million, or 29.7 percent, from $14.0
million for the 26 weeks ended June 29, 2002.

Cost of sales, stores only, was $9.7 million for the 26 weeks
ended June 28, 2003, a decrease of $4.1 million, or 29.7 percent,
from $13.8 million for the 26 weeks ended June 29, 2002. This
decrease was due to fewer operating stores as a result of the
closure of the Wal-Mart locations, approximately 2,300 fewer unit
weeks (excluding Wal-Mart locations) and cost containment
strategies implemented, including the closing of non-performing
stores. Cost of sales, stores only, as a percent of sales was 23.5
percent and 23.6 percent for the 26 weeks ended June 28, 2003 and
June 29, 2002, respectively.

Total selling and store occupancy costs were $27.1 million for the
26 weeks ended June 28, 2003, a decrease of $10.5 million, or 28.1
percent, from $37.6 million for the 26 weeks ended June 29, 2002.
This decrease was due to fewer stores opened during the 2003 26
week period compared to the 2002 26 week period. Selling and store
occupancy costs increased from 64.5 percent of sales for the 2002
26 week period to 65.5 percent of sales for the 2003 26 week
period. This increase was principally due to increases in store
occupancy costs, primarily base rents, and other store expenses.

Labor costs were 29.5 percent of sales and 30.9 percent sales for
the 26 weeks ended June 28, 2003 and June 29, 2002, respectively.
This decrease was primarily the result of tightening of staffing
levels in conjunction with the lower sales volumes and the closure
of the Wal-Mart locations.

Store occupancy costs were 25.7 percent of sales and 24.3 percent
of sales for the 26 weeks ended June 28, 2003 and June 29, 2002,
respectively. This increase in store occupancy costs was due to
increases in base rents and the inability to obtain leverage on
the rents as a result of lower store sales volumes.

Other store expense was 10.3 percent of sales and 9.2 percent of
sales for the 26 weeks ended June 28, 2003 and June 29, 2002,
respectively. This increase was due to increased costs for
property and liability insurance and other costs for which the
stores were unable to obtain leverage as a result of lower store
sales volumes.

Franchising and licensing revenues were $15.4 million for the 26
weeks ended June 28, 2003 and for the 26 weeks ended June 29,
2002. Franchising revenues were $12.9 million for the 2003 26 week
period, an increase of $900,000, or 7.5 percent, from $12.0
million for the 2002 26 week period. This increase was primarily
due to increases in franchise royalties of $600,000 and batter
sales to Great American Cookie franchisees of $300,000. These
increases were principally the result of 61 additional franchised
stores.

Licensing revenues were $2.4 million for the 26 weeks ended June
28, 2003, a decrease of $900,000, or 27.0 percent, from $3.3
million for the 26 weeks ended June 29, 2002. This decrease was
principally due to decreases in licensing revenues from the sale
of certain recipes under a licensing agreement with a national
manufacturer of soft-baked cookies of $1.6 million and
international and domestic license income of $100,000 offset by
increases in licensing royalties for Mrs. Fields branded soft
baked cookies of $800,000.

Franchising and licensing expenses were $4.7 million for the 26
weeks ended June 28, 2003, a decrease of $200,000, or 4.0 percent,
from $4.9 million for the 26 weeks ended June 29, 2002. This
decrease was principally due to decreases in administrative costs
associated with the Company's international and domestic licensing
group of $100,000 and other operating expenses of $100,000.

Mail order revenues were $6.0 million for the 26 weeks ended June
28, 2003, an increase $1.4 million, or 30.3 percent, from $4.6
million for the 26 weeks ended June 29, 2002. Mail order revenues
consist of sales through the Company's catalog and web-site. This
increase in revenues was due to increased sales to affiliations
with other gift catalogs, Internet customers and the airline
industry.

Mail order expenses were $4.8 million for the 26 weeks ended June
28, 2003, an increase of $900,000, or 23.5 percent, from $3.9
million for the 26 weeks ended June 29, 2002. This increase in
expense was due to an increase in cost of sales of $500,000 and
marketing and operating costs of $400,000 associated with the
increased sales volume.

Management fee revenue was $5.2 million for the 26 weeks ended
June 28, 2003, a $700,000 decrease, or 11.7 percent, from $5.9
million for the 26 weeks ended June 29, 2002. The decrease was due
to a decrease in the management fee effective October 1, 2002 as a
result of an amendment to the TCBY Management Agreement.

Other operating revenue was $36,000 for the 26 weeks ended June
28, 2003, a decrease of $1.6 million, from $1.7 million for the 26
weeks ended June 29, 2002. This decrease was principally due to
insurance proceeds received in 2002 under the Company's business
interruption insurance policy for the loss of its World Trade
Center location as a result of the events of September 11, 2001.

General and administrative expenses were $14.7 million for the 26
weeks ended June 28, 2003, a decrease of $1.8 million, or 10.8
percent, from $16.5 million for the 26 weeks ended June 29, 2002.
General and administrative expenses include supervision costs
associated with store and franchise operations and general and
administrative costs of the Company.

Operations and supervision expenses were $3.2 million for the 26
weeks ended June 28, 2003, a decrease of $500,000, or 13.5
percent, from $3.7 million for the 26 weeks ended June 29, 2002.
This decrease was principally due to decreases in payroll and
related costs of $300,000 and travel and related costs of $200,000
resulting from the Company's staff reductions in late 2002.

General and administrative expenses, excluding operations and
supervision expenses, were $11.5 million for the 26 weeks ended
June 28, 2003, a decrease of $1.3 million, or 10.2 percent, from
$12.8 million for 26 weeks ended June 29, 2002. This decrease in
expenses was principally due to reductions in advertising and
marketing expenses of $1.0 million, payroll and related costs of
$600,000 resulting from the Company's staff reductions in late
2002, office, printing and supplies of $600,000, professional
expenses of $100,000, occupancy costs of $100,000 and other cost
saving measures of $100,000 offset with severance costs of $1.2
million relating to the resignation of the Company's Chief
Executive Officer.

Store closure provision was $310,000 for the 26 weeks ended June
28, 2003, an increase of $272,000, from $38,000 for the 26 weeks
ended June 29, 2002. This was principally due to additional
reserves established for lease abatements made during the period
on stores sold to franchisees.

Impairment of long-lived assets was $1.3 million for the 26 weeks
ended June 28, 2003, an increase of $700,000 from $600,000 for the
26 weeks ended June 29, 2002. This increase was principally due to
continued decrease of net contribution of certain store locations.

Total depreciation and amortization expense was $3.7 million for
the 26 weeks ended June 28, 2003, a decrease of $2.1 million, or
48.3 percent, from $5.8 million for the 26 weeks ended June 29,
2002. Depreciation expense was $3.1 million for 26 weeks ended
June 28, 2003, a decrease of $2.1 million, or 41.3 percent, from
$5.2 million for 26 weeks ended June 29, 2002. This decrease was
principally due to fewer store assets as a result of store
closures, the sale of corporate stores to franchisees and
impairment of store assets recorded in fiscal 2002. Amortization
expense was $667,000 for the 26 weeks ended June 28, 2003, an
increase of $43,000, or 6.9 percent, from $624,000 for the 26
weeks ended June 29, 2002.

Other operating income, net was $1.2 million for the 26 weeks
ended June 28, 2003, an increase of $1.3 million from other
operating expense, net of $100,000 for the 26 weeks ended June 29,
2002. The increase in other operating income was the result of a
$1.2 million net gain on stores sold to franchisees during the 26
weeks ended June 28, 2003 compared to $200,000 net loss on stores
sold to franchisees during the 26 weeks ended June 29, 2002.

Interest expense, net was $8.9 million for the 26 weeks ended June
28, 2003, an increase of $200,000, or 2.9 percent, from $8.7
million for the 26 weeks ended June 29, 2002. This increase was
primarily due to increased amortization of loan fees incurred for
the replacement of the Company's credit facility.

Provision for income taxes was $35,000 for the 13 week period
ended June 28, 2003 compared to $100,000 for the 13 week period
ended June 29, 2002. Provision for income taxes primarily consists
of state and foreign income taxes. Included in the provision for
income taxes for the 26 weeks ended June 28, 2003 is compensation
of $150,000 paid by TCBY to the Company for utilization of the
Company's net operating loss carryforwards under the Amended and
Restated Tax Allocation Agreement with MFFB and Mrs. Fields'
Holdings.

At June 28, 2003, the Company had $1.2 million of unrestricted
cash and $1.9 million available under its $9.9 million revolving
line of credit. The terms of the Company's indenture governing its
outstanding senior notes limit the Company's ability to borrow
under the credit facility to a total of $9.9 million, excluding
letters of credit. At June 28, 2003, the Company had outstanding
borrowings of $8.0 million and outstanding letters of credit
totaling $1.3 million.

Management believes the Company's operations have been negatively
impacted over the past two years by reduced mall traffic due to
the recession during 2001 and the continued economic instability,
the events of September 11, 2001 and the war in Iraq that
commenced during the first quarter of 2003. The Company has
incurred net losses from the date of its formation resulting in a
stockholder's deficit of $75.7 million at June 28, 2003. The
Company used $2.8 million of cash for operating activities during
the 26 weeks ended June 28, 2003. The Company generated $1.6
million of cash from investing activities during the 26 weeks
ended June 28, 2003, primarily from proceeds from the sale of 27
company owned stores to franchisees offset by purchases of
property and equipment. The Company used $200,000 of cash for
financing activities during the 26 weeks ended June 28, 2003,
principally for a distribution to parent under the tax sharing
agreement and payments of debt financing costs, long-term debt and
capital leases offset by borrowings under the revolving line of
credit.

As of June 28, 2003, the Company had liquid assets (unrestricted
cash and cash equivalents and accounts receivable) of $6.1
million, a decrease of $3.4 million from December 28, 2002 when
liquid assets were $9.5 million. Current assets were $10.2 million
at June 28, 2003, a decrease of $3.1 million from $13.3 million at
December 28, 2002. This decrease was primarily the result of a
decrease in cash and cash equivalents, accounts receivable and
amounts due from franchisees and licensees offset by an increase
in inventories and prepaid rent. Long-term assets were $92.8
million at June 28, 2003, a decrease of $5.5 million from $98.3
million at December 28, 2002. This decrease was due to recurring
depreciation of property and equipment, impairment of long-lived
assets, sale of company owned stores and amortization of
intangibles.

Current liabilities were $33.1 million at June 28, 2003, a
decrease of $300,000 from $33.4 million at December 28, 2002. This
decrease was primarily due to a decrease in accounts payable,
amounts due to affiliates and sales tax payable offset by an
increase in bank borrowings, accrued salaries and wages and
deferred revenue

The Company's working capital deficit of $22.9 million at June 28,
2003 increased by $2.8 million from a deficit of $20.1 million at
December 28, 2002 for the reasons described above.

As previously reported, Standard & Poor's Ratings Services lowered
its corporate credit rating on specialty food retailer Mrs. Fields
Original Cookies Inc. to triple-'C' from triple-'C'-plus based on
the company's very constrained liquidity position and payment
default risk.  The outlook is negative. Salt Lake City, Utah-based
Mrs. Fields had $152 million total debt outstanding as of June 29,
2002.


NATIONAL CENTURY: Plan Filing Exclusivity Extended to Sept. 15
--------------------------------------------------------------
National Century Financial Enterprises, Inc., and its debtor-
affiliates wish to extend their Exclusive Periods.  However,
Metropolitan Life Insurance Company and Lloyds TSB Bank Plc want
the Court to terminate the Debtors' Exclusive Periods or
alternatively, convert the Debtors' cases to Chapter 7.

To compromise and settle their dispute, the Debtors, the Official
Committee of Unsecured Creditors, the Subcommittees, MetLife and
Lloyds stipulate and agree that:

A. The Exclusive Filing Period is extended through and including
   September 15, 2003;

B. The Debtors, the Creditors' Committee and the Subcommittees
   will exchange lists of what they believe are the open issues
   remaining to be resolved prior to the confirmation of a
   consensual liquidating plan for the Debtors;

C. FTI Consulting, Inc., financial advisor to the Creditors'
   Committee, will provide its then current report regarding
   prepetition intercompany transfers and other forensic data
   relevant to intercompany transfers to the Debtors, the
   Subcommittees and, subject to the execution of a
   confidentiality agreement acceptable to the Debtors and the
   Creditors' Committee, MetLife and Lloyds;

D. On or before August 29, 2003, the Debtors and the
   Subcommittees will come to an agreement regarding:

   (1) the identities of the Trustees for the Litigation Trust
       and Liquidation Trust to be established under the plan of
       liquidation to be filed by September 15, 2003; and

   (2) the professionals that will be retained by the Liquidating
       Trust to pursue collections against the Debtors' various
       health care provider clients from and after the effective
       date of a plan of liquidation for the Debtors;

E. On or before August 29, 2003, the Subcommittees will exchange
   proposals for the relative treatment under the Plan for the
   claims held by the Noteholders issued by NPF VI, Inc. and the
   claims held by Noteholders issued by NPF XII, Inc.;

F. If the Debtors file a Plan by September 15, 2003, the
   Exclusive Solicitation Period will be extended through and
   including November 17, 2003.  Otherwise, the Exclusive
   Periods will be terminated;

G. If the Exclusive Solicitation Period is so extended, the
   Creditors' Committee, the Subcommittees or MetLife and Lloyds
   will have the right, on an expedited basis, at any time after
   September 15, 2003 to move to terminate the Exclusive
   Solicitation Period; and

H. MetLife and Lloyds agree not to oppose the entry of an order
   authorizing the Debtors to utilize cash collateral through
   October 31, 2003.  However, MetLife and Lloyds have the right,
   from September 15, 2003, to withdraw their consent to the
   Debtors' use of the cash collateral.

Judge Calhoun approves the Stipulation and Agreed Order in all
respects. (National Century Bankruptcy News, Issue No. 21;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


NEXSTAR FINANCE: Red Ink Continued to Flow in Second Quarter
------------------------------------------------------------
Nexstar Broadcasting Group reported financial results for Nexstar
Finance, L.L.C., for the quarter ended June 30, 2003.

                         Reported results

Net revenues in the second quarter of 2003 were $34.3 million, an
increase of 18.3% over net revenues of $29.0 million in the second
quarter of 2002. Broadcast cash flow for the second quarter of
2003 was $15.0 million compared to $12.4 million in the second
quarter of 2002, an increase of 21.2%, and adjusted EBITDA for the
second quarter of 2003 was $13.7 million compared to adjusted
EBITDA of $11.5 million for the second quarter of 2002. For the
six months ended June 30, 2003, net revenues were $61.8 million
compared to $54.9 million for the same period in 2002, an increase
of 12.4%. Broadcast cash flow for the first six months of 2003 was
$24.0 million, an increase of 9.9% over broadcast cash flow of
$21.8 million for the first six months of 2002. Adjusted EBITDA
was $21.5 million and $20.0 million for the first six months of
2003 and 2002, respectively. A reconciliation of earnings as
determined in accordance with Generally Accepted Accounting
Principles to broadcast cash flow and adjusted EBITDA is included
in the attached exhibits.

Nexstar recognized a net loss for the second quarter of 2003 of
$1.0 million, compared to a net loss in the second quarter of 2002
of $4.2 million. For the first six months of 2003, Nexstar's net
loss was $14.0 million compared to a net loss of $38.2 million for
the first six months of 2002. The six month loss in 2002 included
a transition impairment charge for goodwill of $27.4 million. In
the first quarter of 2003, the Company recorded a write off of
$5.8 million of debt financing costs related to the refinancing of
our senior credit facilities. The write off of debt financing
costs is included in interest expense.

                         Balance Sheet

Debt, net of cash, on June 30, 2003 was $340.0 million, and
leverage at the operating company was 5.6x. The debt and leverage
calculations are pursuant to the Company's senior secured credit
agreement. The Company's current covenant with respect to
consolidated total leverage, as defined in the credit agreement,
is 7.25x. Capital expenditures for the quarter ended June 30, 2003
totaled $4.1 million. Cash on hand as of June 30, 2003 totaled
$97.7 million.

                     Recent Developments

On May 9, 2003 Mission Broadcasting announced it had reached a
definitive agreement to acquire WBAK TV, the Fox affiliate serving
Terre Haute, IN, from Bahakel Communications for $3.0 million.
Mission began operating the station effective that date and
entered into a Shared Services Agreement and Joint Sales Agreement
with Nexstar's Terre Haute NBC affiliate, WTWO TV. The transaction
is expected to close in the fourth quarter of this year. On June
13, 2003 Mission closed on its acquisition of NBC affiliates KRBC
TV, Abilene, TX, and KACB TV, San Angelo, TX, from Lin
Broadcasting. The previously announced acquisition of KARK TV
(NBC), Little Rock, AR and WDHN TV (ABC), Dothan, AL, from Morris
Multimedia closed on August 1, 2003.

                         CEO Comment

Perry A. Sook, Nexstar Broadcasting Group President and Chief
Executive Officer said, "I am proud of the resiliency shown by our
sales and management teams in the second quarter while facing an
uncertain advertising environment not yet fully recovered from the
war in Iraq. On a pro-forma same station basis, our "core" local
and national revenue held flat to the prior year. Political
revenues were $1.3 million in the second quarter of 2003 compared
to $2.1 million in the same period of 2002. Our total net revenue
on a same station pro-forma basis finished at $34.4 million in the
second quarter of 2003, down 1.7% as compared to the $35.0 million
in the second quarter of 2002. I am particularly pleased that our
concerted effort to contain costs allowed us to deliver a same
station operating margin increase for the quarter. Station
operating expenses finished 3% under second quarter of 2002,
excluding program payments which were down 9.3% on a same station
basis for the quarter. This produced a station operating margin of
43.6% for the second quarter of 2003, versus 42.2% for the same
period last year."

Nexstar owns or provides services to 25 television stations
(including a pending acquisition) serving markets covering
approximately 3.5% of all U.S. television households. Nexstar has
certain local service agreements including Shared Services
Agreements, Time Brokerage Agreements, Joint Operating Agreements
and Joint Sales Agreements with other stations. The following is a
list of the company's owned stations, as well as those with which
it has local service agreements:

As reported in Troubled Company Reporter's March 20, 2003 edition,
Standard & Poor's Ratings Services assigned its 'B-' rating to
Nexstar Finance Holdings LLC's $50 million senior discount notes
due in 2013.

At the same time, Standard & Poor's affirmed its 'B+' corporate
credit ratings on Nexstar Finance Holdings and Nexstar. The
outlook is negative. Based in Irving, Texas, Nexstar had total
debt outstanding of about $320.1 million at Dec. 31, 2002.


NUCENTRIX BROADBAND: Exploring Alternatives Including Bankruptcy
----------------------------------------------------------------
Nucentrix Broadband Networks, Inc. (Nasdaq:NCNX), a provider of
broadband wireless services in medium and small markets, is
exploring strategic alternatives to maximize stakeholder value.

The Company previously had announced in its public filings that it
had retained Houlihan Lokey Howard & Zukin as its financial
advisor in connection with a potential financing for $15 million -
$20 million. To date, the Company has not secured such financing.
Strategic alternatives currently being explored by HLHZ and the
Company include a sale of the Company's assets in the ordinary
course and under Section 363 of the U.S. Bankruptcy Code. The
Company can provide no assurance that a transaction for any
strategic option that the Company believes would be in the best
interest of the Company and its stakeholders can be completed in a
timely manner or at all.

The Company also announced that it has filed a Form 15 with the
Securities and Exchange Commission to terminate registration of
the Company's common stock under the Securities Exchange Act of
1934 (Exchange Act). In connection with filing the Form 15, the
Company will suspend the filing of periodic reports under the
Exchange Act, including its Form 10-Qs and Form 10-K. In addition,
as a result of the filing of the Form 15 with the SEC, the
Company's common stock will be delisted from the Nasdaq National
Market effective immediately prior to the opening of the Nasdaq
National Market on August 14, 2003. The Company expects that its
common stock will be available for quotation on the Pink Sheets
Electronic Quotation Service after the filing with the NASD of a
Form 211 by interested market makers and the approval of such form
by the NASD.

Nucentrix Broadband Networks, Inc. provides broadband wireless
Internet and multichannel video services using radio spectrum
licensed by the Federal Communications Commission at 2.1 GHz and
2.5 GHz. This spectrum commonly is referred to as MMDS
(Multichannel Multipoint Distribution Service) and ITFS
(Instructional Television Fixed Service). Nucentrix currently
offers high-speed wireless Internet services in Austin and
Sherman-Denison, Texas. Nucentrix holds the rights to an average
of approximately 128 MHz of MMDS and ITFS spectrum, covering an
estimated 8.2 million households, in 92 primarily medium and small
markets across Texas, Oklahoma and the Midwest. Nucentrix also
holds the rights to 20 MHz of WCS (Wireless Communications
Services) spectrum at 2.3 GHz covering over 2 million households,
primarily in Texas.


OPAL CONCEPTS: Cheveux LLC Firms-Up Purchase of Fantastic Sams
--------------------------------------------------------------
The owners of Cheveux, LLC have finalized the purchase of
Fantastic Sams, the world's leading full service franchise hair
salon company. Cheveux, which already holds the regional
franchising rights to Fantastic Sams Hair Salons throughout much
of New England, bought the company's corporate assets from Opal
Concepts after Opal filed for Chapter 11 Bankruptcy in July 2002.

Jack Keilt, a founder of Cheveux and the new President and CEO of
Fantastic Sams, states, "We recognize that the strength of the
Fantastic Sams brand as well as its enormous potential for growth
lies in the commitment that the Regional Owners and their
franchisees have to the salons and their customers. The Regional
Owners and their franchisees have built a terrific, solid company
with a promising future. After almost three years of owning and
operating Fantastic Sams on a regional level we've gained an
intimate understanding of the business. Now that we can operate
the company as a stand alone entity we can provide them with the
support and resources they'll need to make their future bright."

"Fantastic Sams is now a well funded company with experienced
management and strong sponsorship. We are dedicating substantial
resources to hiring additional employees, training at all levels
of the operation, developing new product and expanding the number
of salons."

In addition to the four principles of Cheveux - Tim Halvorsen,
Anne Halvorsen, Jack Keilt and Stephen Freyer - equity funding was
provided by Pouschine Cook Capital Management, LLC; a New York-
based, middle-market private equity firm that specializes in
providing equity to growing, private, middle-market companies.

GE Capital Franchise Finance Corporation provided debt financing.
John Hourihan of Edison Advisors in Miami, FL provided investment
banking counsel to Cheveux.

Founded in 1974 in Memphis, TN, Fantastic Sams is the world's
leading value priced, full-service hair care franchise with more
than 1300 salons in the U.S., Canada and Asia. The majority of the
salons are individually owned and operated by entrepreneurs. For
additional information visit http://www.fantasticsams.com


OWENS CORNING: Akzo Nobel's $3-Mil. Claim Disallowed & Expunged
---------------------------------------------------------------
At the Owens Corning Debtors' request, the Court disallowed and
expunged Akzo Nobel Coatings, Inc.'s claim for $3,000,000, which
has been designated as Proof of Claim No. 6934.

The Debtors objected to the Disputed Claim on the grounds that it
was not accompanied by any supporting documents showing that Akzo
Nobel incurred any cleanup costs, and therefore the Disputed
Claim was unsubstantiated.

Akzo Nobel asserts that Owens Corning is liable for contribution
under the Comprehensive Environmental Response Compensation and
Liability Act, Sections 9601 to 9675 of the Public Health and
Welfare Code, on the grounds that:

   1. Akzo Nobel is a liable party at a CERCLA cleanup site in
      Alexandria, Ohio named the "John Mercer Drum Site";

   2. Akzo Nobel has incurred costs in connection with
      contamination at the Site; and

   3. Owens Corning is also a potentially responsible party at
      the Site.

Akzo Nobel asserts that Owens Corning is a potentially
responsible party at the Site on the grounds that Owens Corning
arranged for disposal, or transportation for disposal, of
hazardous substances at the Site.  However, Owens Corning denies
that it ever arranged for any materials to be transported to, or
disposed at, the Site.

J. Kate Stickles, Esq., at Saul Ewing LLP, in Wilmington,
Delaware, relates that Akzo Nobel provided no valid proof that
the Debtors transported materials to or arranged for transport of
materials to or disposal at the Site.  Akzo Nobel's only
purported proof is a single page form apparently generated by
Ohio EPA labeled "Initial Pollution Incident Report 1990."  The
form contains handwritten comments reflecting a conversation with
a person identified only as "ANON."

Ms. Stickles asserts that the statement made by the anonymous
informant is hearsay.  Since the informant is anonymous, he could
not be a witness testifying at trial and it cannot be shown that
he is a party or the agent of any party.   The statements are,
therefore, inadmissible.

Assuming for the purposes of argument that the form is admissible
proof that Owens Corning is a potentially responsible party at
the Site, Akzo Nobel still failed to provide sufficient proof to
support its contribution claim under CERCLA.  As a party bringing
a contribution action under CERCLA, Akzo Nobel not only bears the
burden of proving that Owens Corning is a potentially responsible
party, but Akzo Nobel also bears the burden of proving the
correct allocable share or proportion of cleanup costs, which
allegedly should be borne by Owens Corning.

Akzo Nobel has not met this burden.  Instead, Akzo Nobel only
asserts that it has incurred $6,000,000 in cleanup costs at the
Site and seeks reimbursement of $3,000,000 from Owens Corning.
Akzo Nobel has not disclosed any basis for allocating 50% of the
cleanup costs to Owens Corning.  Presumably, this alleged
proportion results solely from the fact that Akzo Nobel's and
Owens Corning's barrels were allegedly both found at the Site,
according to the state report.

Akzo Nobel apparently is arguing that, because two parties'
barrels were supposedly identified, the Debtors' allocable share
should be half.  However, the information in the state form is
inadequate to meet Akzo Nobel's burden of proving the Debtors'
allocable share, if any.  The state form does not disclose the
number of barrels present at the Site, nor does it disclose the
number of barrels "apparently" from either "Columbus Coated
Fabrics" or from Owens Corning.  It also fails to disclose the
number of drums not "apparently" from any identifiable party.

Moreover, Ms. Stickles adds, the proof of claim includes a
document entitled "Update Fact Sheet John Mercer Drum Site",
which demonstrates that there are at least five different, non-
contiguous areas at the Site where "drums" have been discovered
as well as a sixth area where additional drums are suspected.

The state form, based on third-hand information, does not
identify which, if any, of these separate areas is the location
of the barrels, which it describes as "apparently" from Owens
Corning.

The Update Fact Sheet indicates that at least 600 drums have been
removed from two of the areas alone.  Nothing in either the
Update Fact Sheet or the state form demonstrates how many of
these drums or barrels were "apparently" from Owens Corning.
Therefore, Akzo Nobel has failed to meet its burden of proving
the Debtors' allocable share based on volume, even assuming that
volume alone constitutes a valid basis for allocation.  At most,
Akzo Nobel's proffered proof shows that there were over 600
barrels, an unknown number of which supposedly came from
Owens Corning, with the rest presumably originating from other
parties, including Akzo Nobel. (Owens Corning Bankruptcy News,
Issue No. 55; Bankruptcy Creditors' Service, Inc., 609/392-0900)


PACIFIC GAS: Court Fixes Solicitation and Tabulation Procedures
---------------------------------------------------------------
U.S. Bankruptcy Court Judge Montali approves a joint request by
Pacific Gas and Electric Company, its parent, PG&E Corporation,
and the Official Committee of Unsecured Creditors to establish
procedures for the solicitation and tabulation of votes to accept
or reject the Settlement Plan.

Specifically, Judge Montali approves:

   * the continued employment of Innisfree M&A Incorporated as
     voting agent;

   * the procedures for soliciting the votes of impaired classes
     of creditors on the Plan;

   * the voting ballots modified for each Voting Class, and the
     balloting procedures;

   * the voting schedule for the Plan;

   * the procedures for tabulating votes of impaired creditors
     with respect to acceptance or rejection of the Plan;

   * the notices of the voting record date and voting deadline;
     and

   * the exclusion of the non-voting parties from receiving
     copies of the Plan and Disclosure Statement.

                          Voting Agent

On May 20, 2002, the Plan Co-Proponents obtained authority from
the Bankruptcy Court to expand Innisfree's role to act as Voting
Agent for both the Original PG&E Plan and the California Public
Utilities Commission's competing Plan.  Now, at the Plan Co-
Proponents' request, Judge Montali extends Innisfree's employment
as Voting Agent to:

   (a) coordinate all mailings related to the Plan, including
       both voting and non-voting documents;

   (b) respond to inquiries from creditors, equity security
       holders and other interested parties;

   (c) receive and account for all Voting Ballots, and tabulate
       the votes; and

   (d) assist in researching certain information regarding equity
       security holders and bondholders.

                        Voting Eligibility

A. Voting Classes

Section 1126 of the Bankruptcy Code provides that only holders of
allowed claims or equity interests are entitled to vote to accept
or reject a Chapter 11 plan of reorganization.  Certain classes
are not entitled to vote, like classes of claims or equity
security interests who are not impaired, and classes in which the
holders will receive no recovery.

Under the Plan, eight classes or subclasses of claims are
entitled to vote, while nine classes or subclasses of claims and
equity security interests are unimpaired, and therefore are not
entitled to vote.  There are no classes in which the holders will
receive no recovery.

B. Voting Record Date

In accordance with Rule 3018(a) of the Federal Rules of
Bankruptcy Procedure and Section 105(a) of the Bankruptcy Code,
the Court sets August 4, 2003 as the voting record date for the
Plan to avoid confusion in soliciting and tabulating votes and to
afford the Plan Co-Proponents necessary time to compile an
accurate list of claimholders entitled to vote.

C. Holders Entitled to Vote

These particular holders of impaired claims are entitled to vote:

   (a) Holders of claims, as of the Voting Record Date, that
       are not listed as contingent, unliquidated, or disputed
       in the Debtors' Amended and Restated Schedules;

   (b) Holders of filed proofs of claim listed on the official
       claims register maintained by Robert L. Berger &
       Associates, LLC, the Court-appointed Claims Agent; and

   (c) Registered record holders of PG&E bonds, notes or
       debentures, and beneficial owners holding securities
       through nominee holders, shown in the records of the
       applicable trustee or transfer agent and the depository
       trust companies, Euroclear and Clearstream.

D. Notices of Non-Voting Status

The Plan Co-Proponents will no longer mail copies of the Plan and
Disclosure Statement to:

   (a) the holders of claims or interests in the Unimpaired
       Class;

   (b) parties to executory contracts and unexpired leases
       who do not hold filed or scheduled claims; or

   (c) the holders of Disputed Claims.

Innisfree may be otherwise requested for copies in writing by
facsimile (212) 446-3605 or e-mail pge@innisfreema.com

                Solicitation and Balloting Process

A. Solicitation

The Plan Co-Proponents will transmit a solicitation package
containing:

   * an appropriate Voting Ballot, and accompanying postage-
     prepaid return envelope;

   * copies of the Plan and the Disclosure Statement;

   * the Confirmation Hearing Notice;

   * a letter asking creditors to vote in favor of the Plan; and

   * any other documents approved by the Court.

B. Voting Ballots

Plan votes must:

   -- be in writing;

   -- be signed by the creditor or equity security holder or an
      authorized agent; and

   -- conform to the appropriate Official Form.

The Plan Co-Proponents have separate Voting Ballots for the eight
Voting Classes to either accept or reject the Plan.  With respect
to the holders of publicly held debt securities, the Plan
Co-Proponents have prepared two types of Voting Ballots:

   (1) a "Beneficial Owner Ballot" to be submitted, by registered
       holders of PG&E bonds, notes or debentures, and beneficial
       holders holding their voting securities through nominee
       holders; and

   (2) a "Master Ballot" to be submitted by nominee holders on
       behalf of beneficial owners of PG&E bonds, notes or
       debentures.

The Plan Co-Proponents also prepared a "Claim Holder Ballot" for
all other types of claims entitled to vote.  Innisfree will send
Solicitation Packages directly to the registered holders of
allowed claims, and they in turn will submit their Voting Ballots
directly to Innisfree.  The beneficial holders, on the other
hand, will receive their Solicitation Packages through their
nominee holders.

The nominee holders will have two options:

   (1) Prevalidate the beneficial owners' Voting Ballots, to be
       submitted directly to Innisfree.  The nominee holders may
       prevalidate the ballots by:

       -- signing and dating the ballot;

       -- indicating the name of the nominee holder on the
          ballot, amount of securities held by the nominee for
          the beneficial owner, and the account number for the
          account in which the securities are held; and

       -- forwarding the Solicitation Package to the
          beneficial owner for voting.

   (2) Not prevalidate the beneficial owners' individual
       ballots.

The nominee holder will summarize the beneficial owners' votes on
a Master Ballot and submit it Innisfree.

C. Voting Schedule

Because of the complexity of the classification schemes under the
Plan and the numerous types of public securities issued by PG&E
that are outstanding, the Plan Co-Proponents agree to these
voting schedules:

   (1) Submission of documents will be on the deadline set by
       Innisfree;

   (2) From August 11, 2003 through August 15, 2003, Innisfree
       will distribute elements of the Solicitation Packages
       to nominee holders;

   (3) On the Solicitation Commencement Date, Innisfree will
       mail the Solicitation Packages to the registered
       holders of claims and to the beneficial owners; and

   (4) At the end of the 45-day period beginning on the
       Solicitation Commencement Date, pursuant to Bankruptcy
       Rule 3017(c), persons entitled to vote must properly
       complete, execute, and deliver their Voting Ballots to
       Innisfree or, in certain cases, to their nominee holder
       not later that 5:00 p.m. Eastern Time on September 29,
       2003.

The nominee holders will have up to three additional business
days to transmit their Master Ballots to Innisfree and not later
than 5:00 p.m. Eastern Time on the last day.

                      Tabulation Procedures

A. Claim Amount

Voting creditors may vote only the undisputed portion of their
claims, unless otherwise ordered by the Court.  The Claim amount
eligible to vote will be based on:

   (1) the amount set forth on a filed proof of claim;

   (2) the amount set forth as a claim in PG&E's Schedules as not
       contingent, unliquidated, or disputed;

   (3) the amount estimated or temporarily allowed for voting
       purposes before the Voting Deadline; and

   (4) for securities claims, the amount evidenced by the records
       of:

       -- the trustee or transfer agent;

       -- the Depository Trust Companies, Euroclear and
          Clearstream; or

       -- individual nominees holding the securities.

       In any event, the nominee will not be entitled to vote in
       consideration of its position in the Depositary Trust
       Company or as a registered holder.

B. Vote Tabulation

To avoid confusion, the Plan Co-proponents will implement these
procedures and guidelines for tabulating the votes to accept or
reject the Plan:

   (a) Votes Counted

       Each creditor will be deemed to have voted the full amount
       of its undisputed claim.

       Innisfree will count only the first timely Voting Ballot
       it receives from a creditor, unless, the Court permits the
       creditor to change or withdraw its previous vote.

       Any over-votes will be applied in the same proportion as
       the votes submitted on the Master Ballot or prevalidated
       ballots, but only those submitted by the nominee holder on
       the Voting Record Date.

   (b) Votes Not Counted

       These Ballots will not be counted or considered for any
       purpose in determining whether the Plan has been accepted
       or rejected:

       * Any Ballot cast in a manner that neither indicates an
         acceptance nor rejection of the Plan or that indicates
         both an acceptance and rejection of the Plan;

       * Any unsigned Ballot;

       * Any Ballot received after the Voting Deadline unless the
         Court extends the deadline;

       * Any Ballot that is illegible or contains insufficient
         information to permit the identification of the
         claimant;

       * Any Ballot that is sent by facsimile transmission,
         except for voting confirmations received from Euroclear
         and Clearstream;

       * Any individual Ballot partially accepting or rejecting
         the Plan; and

       * Any duplicative Ballot of another creditor. (Pacific Gas
         Bankruptcy News, Issue No. 61; Bankruptcy Creditors'
         Service, Inc., 609/392-0900)


PETROLEUM GEO: Has Until Sept. 27 to File Schedules & Statements
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Petroleum Geo-Services ASA an extension of the deadline to
file its 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 Debtor has until
September 27, 2003 to file the required documents with the Court.

Petroleum Geo-Services ASA, headquartered in Lysaker, Norway is a
technology-based service provider that assists oil and gas
companies throughout the world.  The Company filed for chapter 11
protection on July 29, 2003 (Bankr. S.D.N.Y. Case No. 03-14786).
Matthew Allen Feldman, Esq., at Willkie Farr & Gallagher
represents the Debtor in its restructuring efforts.  As of May 31,
2003, the Debtor listed total assets of $3,686,621,000 and total
debts of $2,444,341,000.


PG&E CORP: Will Publish Second Quarter Fin'l Results on Tuesday
---------------------------------------------------------------
PG&E Corporation (NYSE: PCG) will release its second quarter
financial results on August 19, 2003. A conference call with the
financial community is scheduled to be held that day to discuss
the results. Details regarding the call will be provided shortly.

The Corporation and Pacific Gas and Electric Company will file
this week with the U.S. Securities and Exchange Commission for an
extension of the August 14, 2003, Form 10-Q filing deadline in
order to provide PG&E National Energy Group, Inc., additional time
necessary to complete preparation of its second quarter financial
statements.

NEG is currently reviewing its methods for netting certain
revenues and expenses, primarily related to hedging activities.
The outcome of this review is not expected to materially affect
PG&E Corporation's operating income, net income, balance sheet or
cash flow.

If NEG's financial statements are not complete by August 19,
Pacific Gas and Electric Company intends to issue its separate
results and file its Form 10-Q on a stand-alone basis.

As previously reported, on July 8, 2003, NEG filed for bankruptcy
protection and concurrently filed a proposed plan of
reorganization for emerging from Chapter 11, which if implemented
would eliminate PG&E Corporation's equity in NEG. As a result of
the Chapter 11 filing and the resignation of PG&E Corporation
representatives from NEG's board of directors, PG&E Corporation no
longer retains significant influence over the ongoing operations
of NEG, including SEC filings made by NEG. NEG's financial results
from July 8, 2003, forward will no longer be consolidated into
PG&E Corporation's financial results.


PG&E NATIONAL: Court Approves Clifford Chance as Special Counsel
----------------------------------------------------------------
The PG&E National Energy Group Debtors sought and obtained the
Court's authority to employ Clifford Chance LLP as special
regulatory counsel to provide legal advice regarding the
regulation of power/gas trading and investigations by the
Commodity Futures Trading Commission.

The selection of Clifford Chance as special regulatory counsel is
based on the firm's expertise in CFTC regulatory matters and its
prepetition representation of the NEG Debtors.  David Yeres, a
member of Clifford Chance, and associates, Christopher O'Rourke
and Aimee Latimer, and other members of the firm are in good
standing of the Bar of New York and the Bar of the District of
Columbia.

The NEG Debtors will compensate Clifford Chance pursuant to the
firm's standard hourly rates:

                 Partners            $635 - 800
                 Associates           235 - 540
                 Legal Assistants     135 - 210

The NEG Debtors will also reimburse Clifford Chance of actual and
necessary expenses incurred.

Concurrent with its engagement, the Debtors disclose that
Clifford Chance received a $125,000 retainer, which it holds as
security against any non-payment of its fees.  Paul M. Nussbaum,
Esq., at Whiteford, Taylor & Preston, LLP, in Baltimore,
Maryland, states that Clifford Chance's employment under a
general retainer is appropriate and necessary to enable the NEG
Debtors to faithfully execute their duties as debtors and
debtors-in-possession and to implement their restructuring and
reorganization.

David Yeres, a member at Clifford Chance, assures the Court that
the firm is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code and does not hold or
represent any interest adverse to the Debtors or their estates.
(PG&E National Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


PILLOWTEX CORP: Wants Approval of $120MM DIP Credit Agreement
-------------------------------------------------------------
Substantially all of Pillowtex's assets are subject to security
interests and liens securing the Company's obligations under its
financing arrangements:

(a) Existing Financing Agreements.

        (i) Pursuant to a Loan and Security Agreement, dated
            May 24, 2002, as amended pursuant to Amendment No. 1
            to Loan and Security Agreement, dated as of August 29,
            2002 -- the Existing Loan Agreement -- Agent and
            Lenders have agreed to provide Pillowtex with a
            three-year $200 million senior secured asset-based
            non-amortizing revolving credit facility, including a
            $60 million letter of credit sub-facility.  The
            obligations of Pillowtex under the Existing Loan
            Agreement are guaranteed by PTEX Holding Company, The
            Leshner Corporation, Tennessee Woolen Mills, Inc.,
            Fieldcrest Cannon Financing, Inc., Fieldcrest Cannon
            Transportation, Inc., FCI Operations LLC, Fieldcrest
            Cannon Licensing, Inc., FCI Corporate LLC and
            Pillowtex Canada Inc.

       (ii) As of July 28, 2003, the aggregate principal amount of
            loans outstanding under the Existing Loan Agreement
            was not less than $72,164,294 and the aggregate
            undrawn face amount of all letter of credit
            outstanding under the Existing Loan Agreement was not
            less than $25,011,848.

      (iii) The Prepetition Debt is fully secured pursuant to the
            Existing Financing Agreements by valid and perfected
            security interests and liens granted by Pillowtex to
            the Agent for the benefit of itself and the other
            Lenders in and upon substantially all of the assets of
            Pillowtex and PT Canada.

       (iv) The security interests and liens of the Agent in and
            upon certain real estate, plant and equipment are
            junior to:

            (A) the liens of the Term Loan Agent and the Term Loan
                Lenders securing the Term Loan Debt, and

            (B) certain permitted prepetition liens.

            The security interests and liens of Agent in and upon
            the Prepetition Collateral other than the Term Loan
            Priority Collateral are subject only to certain
            permitted prepetition liens.

(b) Term Loan Agreement

       (i) Pursuant to the Term Loan Agreement dated as of May 24,
           2002, a syndicate of lenders led by Bank of America,
           N.A., as administrative agent and agent for the Term
           Loan Lenders, extended to Pillowtex a $150 million
           senior five-year term loan secured by a first priority
           lien on the Term Loan Priority Collateral and a second
           priority lien on the Revolving Loan Priority
           Collateral.  The obligations of Pillowtex under the
           Term Loan Agreement are guaranteed by substantially all
           of Pillowtex's subsidiaries.

      (ii) As of July 24, 2003, the aggregate principal amount of
           loans outstanding under the Term Loan Agreement was not
           less than $105,115,150.

(c) Intercreditor Agreement

     Each of Agent, Lenders, the Term Loan Agent and the Term Loan
     Lenders entered into an Intercreditor Agreement, dated as of
     May 24, 2002, which sets forth, inter alia, the rights,
     obligations and priorities of Agent and Lenders, on the one
     hand, and the Term Loan Agent and the Term Loan Lenders, on
     the other hand, with respect to:

     (A) the Revolving Loan Priority Collateral,

     (B) the Term Loan Priority Collateral, and

     (C) any debtor in possession financing provided, or use of
         cash collateral permitted, by Agent and any of the
         Lenders to Pillowtex.

Michael R. Harmon, President and Chief Financial Officer of
Pillowtex Corporation, tells the Court that access to substantial
credit is necessary to meet the substantial day-to-day costs
associated with the liquidation of Pillowtex's business.  The
absence of additional working capital availability would
immediately and irreparably harm Pillowtex, their estates and
their creditors, and would impair Pillowtex's ability to conduct
the Orderly Liquidation.

Prior to seeking chapter 11 protection, Pillowtex negotiated a
financing arrangement, which is contemplated by a Ratification
and Amendment Agreement with Congress Financial Corporation, as
agent, and certain lenders, which in turn ratifies and amends the
Revolving Credit Facility.

Mr. Harmon relates that the DIP Lenders have agree to provide
loans, advances and other financial accommodations to Pillowtex
up to $120,000,000 -- including all prepetition loans and letters
of credit outstanding under the Revolving Credit Facility --
permanently reduced by a special reserve in an amount equal to
$35,000,000 to cover projected liquidation expenses through First
Quarter 2004:

                          Pillowtex Corporation
                           Liquidation Scenario
                              Expense Detail
                  From July 28, 2003 to 1st Quarter 2004

    Pillow & Pad Run-Out

    Facilities/Security
      Facilities                                      $7,196,000
      SB Capital Bill-Out including Prop. Ins.
      Caretakers                                         730,000
                                                     -----------
                                                       7,926,000

    Warehousing, Shipping & Bill                       4,078,000

    Manufacturing
      80 at 40 hours at $20/hour                         320,000
      4 managers at 100K/year                             67,000
                                                     -----------
                                                         387,000

    Inventory Clean-Up 20 at 50K                          96,000

    SG&A Related Expenses:

    Financial Area                                     1,274,000
    Information Technology
      Payroll                                          1,050,000
      Other                                              785,000
                                                     -----------
         Total IT                                      1,835,000

    Sales & Marketing                                    466,000

    Order Entry                                           93,000

    Engineering                                           74,000

    Purchasing                                           105,000

    Human Resources                                      316,000

    Legal                                                617,000

    Corporate                                            436,000

    Severance                                          4,590,000

    Professional Fees
      Company                                          4,825,000
      Canadian                                           844,000
      Revolver Lenders                                   390,000
      Term Lenders                                     1,950,000
      Unsecured Creditors                                360,000
                                                     -----------
         Total Professional Fees                       8,369,000
                                                     -----------
            GRAND TOTAL                              $30,662,000
                                                     ===========

In addition, Mr. Harmon says, borrowings under the DIP Credit
Facility are subject to availability under a borrowing base
formula tied to the value of Pillowtex's account receivables and
inventory.  The DIP Credit Facility matures on October 15, 2003.
All obligations under the DIP Credit Facility:

    (i) will be secured by first priority liens on substantially
        all of Pillowtex's assets, subject to:

        (a) the first priority liens granted to Bank of America,
            N.A., as agent, and the lenders under the Term Loan
            Facility on certain real estate and other fixed assets
            up to a principal amount of $150,000,000 under the
            Term Loan Facility; and

        (b) certain permitted valid liens existing on the Petition
            Date; and

   (ii) would be granted superpriority administrative status, in
        each case subject to certain carve-outs for fees payable
        to the United States Trustee and professional fees.

The interest rate will be 1% per annum in excess of the prime
rate of Wachovia Bank, N.A., for prime rate loans and 2-3/4% per
annum in excess of an adjusted Eurodollar rate for Eurodollar
rate loans made prior to the date of the DIP Credit Facility.
All proceeds will be used by Pillowtex to pay for expenses in
accordance with a budget agreed to by the DIP Lenders and
Pillowtex.

The Debtors believe that, on an interim basis, they require
access to an amount of loans and other credit accommodations
under the DIP Credit Facility not to exceed $40,000,000 in the
aggregate, all pursuant to the borrowing base formula and the DIP
Credit Agreement.

According to Mr. Harmon, the DIP Credit Agreement provides that
prepetition obligations under the Revolving Credit Facility will
be secured by the postpetition collateral granted under the
Ratification Agreement and that post-petition obligations under
the DIP Credit Facility will be secured by the prepetition
collateral granted under the Revolving Credit Facility.  These
provisions are essential pre-conditions to the DIP Lenders'
willingness to provide postpetition credit to Pillowtex.  Since
Pillowtex terminated all of their manufacturing operations prior
to the Petition Date, substantially all collateral proceeds
realized postpetition are proceeds of prepetition collateral,
i.e. postpetition collections of prepetition accounts receivable
or postpetition accounts receivable related to, or sale proceeds
from, prepetition inventory, equipment and other property.

Without the DIP Credit Facility, Pillowtex would not have access
to any liquidity, Mr. Harmon explains.  Virtually all cash
received by Pillowtex is deposited into lockbox accounts and then
transferred on a daily basis to Congress Financial Corporation's
Pillowtex Corporation account at Wachovia Bank, N.A. to reduce
the Company's outstanding borrowings under the existing Revolving
Credit Facility.

The Debtors' ability to conduct the Orderly Liquidation will be
significantly impaired if they are unable to finance the costs
associated with the liquidation, including the salaries of
employees whose continued employment is necessary to collect
accounts receivable, liquidate inventory and generally oversee
the wind down of Pillowtex's businesses.

         Terms of the Proposed Post-Petition Facility

The principal terms of the Loan Agreement are:

    (a) Maximum Borrowing Availability.  The Agent and Lenders
        will provide a $120 million postpetition financing
        facility, of which $30 million may be used for letters of
        credit.  The aggregate amount of loans and letters of
        credit at any time outstanding under the Loan Agreement
        may not exceed the lesser of:

           (i) $120 million, and

          (ii) the Borrowing Base.

        The Prepetition Debt will be treated as outstanding under
        the Loan Agreement.  Based on Pillowtex's estimates of
        the Borrowing Base as of July 30, 2003, taking into
        account the Prepetition Debt in the approximate amount of
        $98 million, approximately $17 million of additional loans
        and letters of credit would be available under the Loan
        Agreement.

    (b) Borrowing Base.  The Borrowing Base is an amount
        determined by a formula of specified percentages of the
        value of various types of Pillowtex's accounts
        receivables and inventory, reduced by the amount of the
        Special Reserve and other reserves.  The formula, which is
        fully defined in the Loan Agreement, provides that the
        Borrowing Base is equal to:

           (i) the sum of:

               (A) 85% of the Net Amount of the Eligible Accounts
                   of Borrowers and PT Canada, plus

               (B) the lesser of:

                   (1) $60 million, reduced by $5 million each
                       Monday following the date of the
                       Ratification Agreement, and

                   (2) the sum of:

                       (x) 50% of the Value of Eligible Inventory
                           of Borrowers and PT Canada consisting
                           of raw materials, plus

                       (y) 50% of the Value of Eligible Inventory
                           of Borrowers and PT Canada consisting
                           of work-in-process, plus

                       (z) 57% of the Value of Eligible Inventory
                           of Borrowers and PT Canada consisting
                           of finished goods, minus

          (ii) the Special Reserve and other reserves.

    (c) Reserves.  The Special Reserve will initially be in an
        amount equal to $35 million and will be reduced to $25
        million if, within five business days Pillowtex files a
        motion with the Court to sell its assets to GGST
        LLC or one of its affiliates or any similar transaction
        with another buyer on substantially similar terms.  In
        addition, a reserve in an amount equal to the Professional
        Fee Carve-Out will be established.  Finally, Agent will
        retain the right to establish additional reserves that
        Agent may deem appropriate in its sole discretion.

    (d) Budget and Use of Proceeds.  Proceeds may only be used to
        pay expenses in accordance with the Budget.  The Budget
        provides for the projected weekly expenses of Pillowtex's
        liquidation through the Maturity Date by specified
        line items.  It will be an Event of Default under the Loan
        Agreement if:

           (i) on a rolling basis, commencing with the week ending
               as of August 10, 2003 and as of the end of each
               second week thereafter, the actual aggregate weekly
               operating cash disbursements as of the end of any
               such week -- on a cumulative basis together with
               each previous week -- exceed the projected
               aggregate weekly operating cash disbursements as of
               the end of any such week set forth on the Budget --
               on a cumulative basis together with each previous
               week;

          (ii) the actual aggregate weekly operating cash
               disbursements relating to any individual line item
               of the Budget that is a component of the aggregate
               operating cash disbursements for the first two
               weeks after the date of the Ratification Agreement
               exceed the projected aggregate weekly operating
               cash disbursements for such individual line item
               for such two weeks set forth on the Budget by more
               than 25% of the amount thereof for such two weeks
               in the aggregate; and

         (iii) on a rolling basis, commencing with the week ending
               as of August 24, 2003 and as of the end of each
               second week thereafter, the actual aggregate weekly
               operating cash disbursements relating to any
               individual line item of the Budget that is a
               component of the aggregate operating cash
               disbursements as of the end of any such week -- on
               a cumulative basis together with each previous week
               -- exceed the projected aggregate weekly operating
               cash disbursements for such individual line item as
               of the end of any such week set forth on the Budget
               -- on a cumulative basis together with each
               previous week -- by more than 15% of the amount
               thereof as of the end of any such week.

        It will also be Event of Default under the Loan Agreement
        if the actual aggregate amount of outstanding loans and
        letters of credit as of August 15, 2003, August 31, 2003,
        September 15, 2003 and September 30, 2003 exceeds by more
        than $5 million the projected amount for such outstanding
        loans and letters of credit in the Budget for the week
        including any such date.

    (e) Weekly Committed Amounts.  To help ensure payment of
        foreseeable expenses incurred but not paid prior to any
        Default or Event of Default, the Loan Agreement will
        provide that, on Friday of each week, Agent may, at its
        option, establish a reserve in an amount equal to the
        lesser of:

           (i) the aggregate weekly cash disbursements for the
               following week as set forth in the Budget plus the
               amount equal to the percentage variance permitted
               for such disbursements in Section 5.3(b) of the
               Ratification Agreement for such week, and

          (ii) the Excess Availability of Borrowers immediately
               prior to giving effect to the establishment of such
               reserve, which amount will be attributable to the
               cash disbursements for such week as set forth in
               the Budget.

        As payments for such disbursements become due, Agent will,
        at Borrowers' request, make Loans to Borrowers in an
        amount equal to such disbursement for the payment thereof
        to the extent that Agent has established a reserve for
        such disbursement or category of disbursement -- whether
        or not a Default or Event of Default exists or has
        occurred at such time -- as determined by Agent.

    (f) Interest Rate.  Interest will accrue at a rate per annum
        equal to:

           (i) the Prime Rate plus 1 % -- increasing to 3%
               following an Event of Default -- for Prime Rate
               Loans, and

          (ii) the Adjusted Eurodollar Rate plus 2 3/4% --
               increasing to 4 3/4% following an Event of Default
                -- for Eurodollar Rate Loans made prior to the
                date of the DIP Credit Facility.

        The Loan Agreement will not provide for new Eurodollar
        Rate Loans.

    (g) Fees.  The Loan Agreement provides for these fees:

           (i) a letter of credit fee, payable monthly, will
               accrue on the daily outstanding balance of letters
               of credit at a rate of 2 1/2% per annum, increasing
               to 4 1/2% following an Event of Default;

          (ii) a commitment fee, payable monthly, will accrue on
               the unused commitment under the Loan Agreement at a
               rate of 1/2% per annum;

         (iii) a servicing fee of $5,000 will be payable monthly;
               and

          (iv) a closing fee equal to the greater of:

               (A) $500,000, and

               (B) the sum of the following amounts earned and
                   payable as:

                   $250,000 on August 1, 2003
                   $250,000 on September 1, 2003
                   $125,000 on October 1, 2003.

        In addition, the Existing Loan Agreement provided for a
        termination fee equal to 1/2% of the Maximum Credit
        thereunder, payable on the effective date of the
        termination of the Existing Loan Agreement.  Pursuant to
        the Ratification Agreement, this termination fee is fixed
        at $1 million.

    (h) Maturity Date.  The Loan Agreement will terminate, and all
        amounts outstanding thereunder will become due, on
        October 15, 2003.

    (i) Collateral.  The obligations under the Loan Agreement --
        including the Prepetition Debt -- will be secured by valid
        and perfected security interests and liens in and upon
        substantially all of the existing and future assets and
        properties of Debtors, including Pillowtex's claims and
        causes of actions arising under Sections 544, 545, 547,
        548, 549, 550, 551 and 553 of the Bankruptcy Code.
        Agent's and Lenders' security interests and liens will be
        subject only to:

           (i) the Term Loan Lenders' security interests in and
               liens upon the Term Loan Priority Collateral;

          (ii) certain permitted prepetition liens provided that
               (A) such liens are valid, perfected and
               non-avoidable in accordance with applicable law and
               (B) the foregoing is without prejudice to the
               rights of Debtors, the Committee or any other party
               in interest, including Agent and Lenders, to object
               to the allowance of any such liens or institute any
               actions or adversary proceedings with respect
               thereto -- the Permitted Liens; and

         (iii) the fees of the Clerk of Court and the Office of
               the United States Trustee and the Professional Fee
               Carve-Out.

    (j) Priority.  Agent and Lenders will be granted an allowed
        super-priority administrative claim in accordance with
        Section 364(c)(1) of the Bankruptcy Code having priority
        in right of payment over any and all other obligations,
        liabilities and indebtedness of Pillowtex, now in
        existence or hereinafter incurred by Pillowtex and over
        any and all administrative expenses or priority claims of
        the kind specified in, or ordered pursuant to, Sections
        105, 326, 328, 330, 331, 503(b), 506(c), 507(a), 507(b)
        and 726 of the Bankruptcy Code, subject only to the fees
        of the Clerk of Court and the Office of the United States
        Trustee and the Professional Fee Carve-Out.

    (k) Professional Fee Carve-Out.  After the occurrence of a
        Default or an Event of Default, Agent's security interests
        and liens will be subordinated only to:

           (i) the fees of the Clerk of Court and the United
               States Trustee, and

          (ii) the unpaid fees and expenses, whether incurred
               before or after the occurrence of the Default or
               Event of Default -- or, in the case of Credit
               Suisse First Boston, Pillowtex's financial
               advisors, only to extent incurred before the
               occurrence of a Default or Event of Default -- in
               the amount allowed by the Court pursuant to
               Sections 326, 330 or 331 of the Bankruptcy Code of
               the professionals retained by Pillowtex or the
               Committee pursuant to Sections 327, 328 or 1103 of
               the Bankruptcy Code, less the amount of any
               retainers then held by the professionals.

        The amount of the carve-out for allowed professional fees
        will not exceed in the aggregate $2,130,000, which will
        consist of:

           (i) a carve-out in an amount not to exceed $1,700,000
               for Pillowtex's professionals -- other than
               CSFB,

          (ii) a carve-out in an amount not to exceed $300,000 for
               monthly fees of CSFB under the terms of its
               engagement letter with Pillowtex,

         (iii) a carve-out in an amount not to exceed $130,000 for
               the Committee's professionals.

    (l) Repayment of Obligations.  Subject to the Intercreditor
        Agreement, Agent will apply the proceeds of the Collateral
        or any other amounts received by Agent and Lenders in
        respect of the Obligations to the Prepetition Debt until
        it is paid and satisfied in full and then to the
        Postpetition Obligations of Pillowtex to the Agent and
        Lenders.

    (m) Adequate Protection.  In accordance with Sections 552(b)
        and 361 of the Bankruptcy Code, the value, if any, in any
        of the Collateral, in excess of the amount of the
        Obligations secured by the Collateral after satisfaction
        of the Postpetition Obligations, will constitute
        additional security for the repayment of the Prepetition
        Debt and adequate protection for the use and the
        diminution in the value of the Collateral.  In addition,
        in accordance with the Intercreditor Agreement, the Term
        Loan Agent and the Term Loan Lenders will receive a
        replacement lien on the Collateral -- other than the Term
        Loan Priority Collateral -- to the extent of any
        diminution in the value of the prepetition liens and
        security interests of the Term Loan Agent and the Term
        Loan Lenders in such Collateral, which replacement lien
        will be junior and subordinate to the liens and security
        interests granted to Agent in such Collateral.

    (n) Asset Sales. Borrowers and Guarantors will not sell or
        otherwise dispose of any portion of the Collateral outside
        the ordinary course of their businesses for, among other
        things:

           (i) the sale of Inventory to customers pursuant to
               purchase orders for such customers consistent with
               the past practices of any such Borrower or
               Guarantor, or, if not consistent with past
               practices, so long as each such sale in any one
               transaction or related group of transactions to any
               one customer does not involve Inventory having an
               aggregate value at cost in excess of $500,000 or a
               sales price in excess of $500,000, provided that,
               as of the date of any such sale of Inventory and
               after giving effect thereto, no Default or Event of
               Default exists or has occurred and is continuing;

          (ii) the sale of Equipment so long as each such sale in
               any one transaction or related group of
               transactions does not involve Equipment having an
               aggregate fair market value in excess of $250,000
               or a sales price in excess of $250,000, provided
               that:

               (a) the sales price for each such sale is equal to
                   or exceeds 80% of the forced liquidation value
                   of such Equipment as set forth in the most
                   recent appraisal with respect thereto received
                   by Agent, and

               (b) as of the date of any such sale of Equipment
                   and after giving effect thereto, no Default or
                   Event of Default exists or has occurred and is
                   continuing;

         (iii) as specifically consented to by the Agent in its
               sole discretion; or

         (iv) as permitted or required by any order of the Court
              or the Superior Court of Justice of Ontario to which
              Agent has consented in writing.

    (o) Events of Default.  The Loan Agreement contains Events of
        Default customarily found in debtor in possession
        financings, including:

           (i) non-compliance with the Financing Order;

          (ii) non-compliance with covenants in the Loan
               Agreement, including variances from the Budget in
               excess of the agreed percentages or amounts;

         (iii) material adverse change;

          (iv) conversion of these Chapter 11 Cases to Chapter 7
               cases or dismissal of any such cases;

           (v) grant of alien in any property of any Borrower or
               Guarantor, or the grant or allowance of an
               administrative expense claim that is superior or
               ranks in parity with Agent's liens in the
               Collateral, in each case other than as permitted by
               the Financing Order or the Ratification Agreement;

          (vi) modification, reversal, revocation, stay or
               amendment of the Financing Order; and

         (vii) appointment of a trustee pursuant to Sections
               1104(a)(1) or 1104(a)(2) of the Bankruptcy Code or
               of an examiner with special powers.

By this motion, Pillowtex seeks the Court's authority to obtain:

    -- postpetition secured superpriority financing in the
       aggregate principal amount of up to $40 million on an
       interim basis and up to $120 million on a final basis; and

    -- credit and incur debt secured by liens on substantially all
       of the property of Pillowtex's estates, and with
       priority as to administrative expenses.

Pillowtex further asks the Court to modify the automatic stay to
permit the Agent and Lenders to implement the terms and
conditions of the Financing Agreements. (Pillowtex Bankruptcy
News, Issue No. 47; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


PORTA SYSTEMS: Bankruptcy Filing Likely if Debt Workout Fails
-------------------------------------------------------------
Porta Systems Corp. (OTC.BB:PYTM) reported an operating loss for
the quarter ended June 30, 2003 of $963,000 compared to an
operating loss of $1,071,000 for the quarter ended June 30, 2002.
The Company recorded a net loss of $1,041,000 versus a net loss of
$887,000 for the quarters ended June 30, 2003 and 2002,
respectively.

The Company reported an operating loss for the six months ended
June 30, 2003 of $2,097,000 compared to an operating loss of
$2,820,000 for the six months ended June 30, 2002. The Company
recorded a net loss of $ 2,467,000 versus a net loss of $3,524,000
for the six months ended June 30, 2003 and 2002, respectively.

Sales for all units were $3,964,000 for the quarter ended June 30,
2003 versus $6,492,000 for the quarter ended June 30, 2002, a
decrease of approximately $2,528,000 (39%). Copper
Connection/Protection sales were $2,071,000 versus $2,762,000 for
the quarters ended June 30, 2003 and 2002, respectively. The
decrease for the quarter reflects reduced sales volume to
customers in the United States and the United Kingdom. Signal
Processing sales for the quarter ended June 30, 2003 were
$1,006,000 versus $1,336,000 for the quarter ended June 30, 2002,
a decrease of $330,000 (25%). Primarily, the decrease in Copper
and Signal sales for the second quarter resulted from a shortage
of materials as several of our suppliers refused to ship on credit
due to our financial difficulties. OSS sales were $677,000 for the
quarter ended June 30, 2003 versus $2,191,000 for the quarter
ended June 30, 2002, a decrease of $1,514,000 (69%). The decreased
OSS sales during the quarter resulted from lower levels of
contract completion during the similar period of the prior year
and from the inability to secure new orders. Additionally, the
Copper and OSS business units are still feeling the effects of the
downturn in the telecommunications industry.

Sales for all units were $8,338,000 for the six months ended June
30, 2003 versus $11,236,000 for the six months ended June 30,
2002, a decrease of approximately $2,898,000 (26%). Copper
Connection/Protection sales were unchanged at $4,232,000 for each
period. Signal Processing sales for the six months ended June 30,
2003 were $2,071,000 versus $2,412,000 for the six months ended
June 30, 2002, a decrease of $341,000 (14%). This decrease in
Signal sales for the second quarter and six months resulted from a
sluggish new order rate and a shortage of materials as several of
our suppliers required COD shipments because of our financial
difficulties. OSS sales were $1,590,000 for the six months ended
June 30, 2003 versus $4,236,000 for the six months ended June 30,
2002, a decrease of approximately $2,646,000 (62%). The decreased
OSS sales during the quarter resulted from lower levels of
contract completion during the similar period of the prior year
and by the inability to secure new orders.

The overall gross margin for all business units was 27% for the
quarter ended June 30, 2003, compared to 33% for the quarter ended
June 30, 2002. Gross margin for the six months ended June 30, 2003
was 25% compared to 27% for the six months ended June 30, 2002.
The decline in the gross margin percentages reflects our inability
to absorb fixed overhead expenses on our reduced sales base for
both the six and three months periods.

Operating expenses for the quarter and six months ended June 30,
2003 decreased by $1,158,000 (36%) and by $1,658,000 (29%),
respectively, when compared to last year's quarter and six months.
The decreases, for both periods, primarily reflect one-time
charges during the 2002 periods for impairment loss of $800,000
and reduced salaries and benefits, consulting services and
commissions reflecting our current level of business.

Interest expense decreased for the six months by $549,000 (47%)
from $1,175,000 in 2002 to $626,000 in 2003. This reduction is
attributable to our agreement with our senior lender, which
provides that the old loan in the principal amount of
approximately $23,000,000 bears no interest commencing March 1,
2002 until such time as the lender, in its sole discretion,
resumes interest charges. The senior lender has not resumed
interest charges.

The Company's Copper Connection/Protection business unit operated
at a slight loss, $18,000 and $15,000 for the quarter and six
months, respectively. The Signal Processing unit operated
profitably during the quarter and six months of 2003, with
operating income of $210,000 and $559,000, respectively. The OSS
unit incurred operating losses of $480,000 and $1,333,000 for the
quarter and six months of 2003, respectively.

For the three and six months ended June 30, 2003 the Company
recorded a tax benefit for settling an outstanding tax obligation
of $274,000 of one of its subsidiaries for $30,000.

As of June 30, 2003, the Company's debt includes $25,222,000 of
senior debt, which was extended to August 29, 2003. If the senior
lender does not extend the maturity date of the Company's
obligations past August 29, 2003, and demands payment of all or a
significant portion of the debt, it may be necessary for the
Company to seek protection under Bankruptcy Code. The Company's
financial condition and stock price effectively preclude it from
raising funds through the issuance of debt or equity securities.

The Company has no source of funds other than operations, and its
operations are generating a negative cash flow. The Company also
does not have any prospects of obtaining an alternate senior
lender to replace its present lender. The Company has been seeking
to raise funds from the sale of one or more of its divisions and
it is currently engaged in negotiations with respect to the
potential sale of certain overseas assets of one of its divisions.
The Company expects that, if such a sale is completed, only a
nominal portion of the net proceeds from such a sale will be
available to the Company for its operations. However, past
negotiations with respect to the sale of the Company's divisions
have not resulted in an agreement, and the Company cannot give any
assurance that the current negotiations will result in an
agreement.

Porta Systems Corp. designs, manufactures, markets and supports
communication equipment used in telecommunications, video and data
networks worldwide.


PROCOM TECHNOLOGY: Nasdaq Yanks Shares Off Effective August 14
--------------------------------------------------------------
The Nasdaq Listing Qualifications Panel has delisted Procom
Technology, Inc.'s (Nasdaq: PRCME) common stock from the Nasdaq
SmallCap Market at the opening of business yesterday.

This delisting was the result of the Company's failure to timely
file with the Securities and Exchange Commission its Quarterly
Report on Form 10-Q for the fiscal quarter ended April 30, 2003 as
required under Nasdaq Marketplace Rule 4310(c)(14).

The Company's common stock was not immediately eligible to trade
on the OTC Bulletin Board or on the Pink Sheets Electronic
Quotation Service because the Company had not filed its third
quarter Form 10-Q and the Company had not published current
financial information.

The Company will evaluate alternatives for allowing the Company's
shares to trade over these services.

Alex Razmjoo, the Company's Chairman and Chief Executive Officer,
said, "We do not believe the decision by Nasdaq to delist the
Company's shares will impact our current business strategy.
Management's focus has been and continues to be on growing our NAS
business while conserving cash and controlling expenses."

                         *     *     *

                Liquidity and Capital Resources

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

"For the six months ended January 31, 2003 and the fiscal year
ended July 31, 2002, the Company incurred net losses of $5.5
million and $24.4 million, respectively.  At January 31, 2003, the
Company had working capital of $10.8 million and cash and cash
equivalents of $10.0 million (including $0.5 million of restricted
cash). To reduce its cash used in operations, the Company put in
place various cost containment initiatives, both domestically and
internationally, during fiscal 2002 and 2003, including an
additional reduction in headcount of approximately 41 employees in
the first six months of fiscal 2003. The Company's plan to address
its liquidity issues is to generate cash flow from operations by
increasing sales and cutting costs. There can be no assurance that
the Company will be able to generate cash flows from operations,
increase its sales or further reduce costs sufficiently to provide
positive cash flows from operations. The Company is currently
seeking alternative financing including the leasing, selling or
refinancing of the Company's headquarters.  There can be no
assurance that the sale of the building will generate net proceeds
in excess of the carrying value of the Company's headquarters. Net
proceeds that are less than the carrying value of the Company's
headquarters would cause the Company to record a loss on the sale.
Under the terms of the Company's long-term debt, the lender may
immediately accelerate all amounts disbursed and terminate any
further obligation of the lender to disburse additional amounts
under the financing arrangement if there exists any event or
condition that the lender in good faith believes impairs (or is
substantially likely to impair) the Company's ability to repay the
obligations under the financing arrangement. There can be no
assurance that the lender will not accelerate the payment of all
amounts disbursed under the arrangement. Additionally, there can
be no assurance that the Company would be able to lease, sell or
refinance the headquarters building, if necessary, or otherwise
obtain any additional financing, on favorable or any terms."


PROTARGA INC: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Protarga, Inc.
        2200 Renaissance Blvd.
        Suite 450
        King of Prussia, Pennsylvania 19406
        fka Neuromedica, Inc.

Bankruptcy Case No.: 03-12564

Type of Business: Protarga is a clinical stage pharmaceutical
                  company that is developing Targaceutical(R)
                  drugs for new medical therapies. The Company's
                  priority is the development of innovative new
                  treatments for cancer, infectious diseases and
                  CNS disorders.

Chapter 11 Petition Date: August 14, 2003

Court: District of Delaware

Debtor's Counsel: Raymond Howard Lemisch, Esq.
                  Adelman Lavine Gold and Levin, PC
                  919 N. Market Street, Suite 710
                  Wilmington, DE 19801
                  Tel: 302-654-8200
                  Fax: 302-654-8217

Estimated Assets: $1 Million to $10 Million

Estimated Debts: $10 Million to $50 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Rocky Mountain Assoc., SA                           $1,000,000
53rd Street Urbanization
Obarrio City, Panama
Attn: Adelina DeEstribi

MDS Pharma Services, Inc.                             $973,265
2525 Campus Drive
Irvine, CA 92612-1503

VCG Venture Capital Gesellsohaft mbH & Co.            $750,000
Ponds III KG
Neumarkterstrasse 28
D-81673 Munich Germany

Theradex                                              $716,164
14 Washington Road
Princeton, NJ 08550

Equity4Life                                           $500,000
c/o equity4life Asset Management AG
Gessnerallee 38
PO Box 7328
CH-8023 Zurich
Switzerland

Applied Analytical Ind., Inc.                         $527,922
2320 Scientific Park Drive
Wilmington, NC 28405

Kotts Capital Holdings, LP                            $500,000
3737 Willowick
Houston, TX 77019

James J. Reiss, Jr.                                   $300,000
4 Audubon Place
New Orleans, LA 70118

Wolf, Greenfield & Sacks                              $219,138

Bingham Dana LLP                                      $179,384

Storey Charbonnet                                     $150,000

Louis M. Freeman                                      $150,000

John Oudt                                             $150,000

Coleman E. Adler, II                                  $150,000

Ernst & Young LLP                                     $145,735

Abbott Laboratories                                   $135,952

UCLA School of Medicine                               $122,865

Southern Research Institute                           $121,728

Merrill Communications                                $108,752

Davos Chemical Corporation                            $100,235


ROMACORP INC: Taps Houlihan Lokey to Aid in Debt Restructuring
--------------------------------------------------------------
Romacorp, Inc., announced results for its first quarter ended
June 29, 2003.

Revenue for the quarter decreased $2.5 million, or 8.1% to $28.2
million as compared with the same quarter of the prior year. Of
this decrease, $2.0 million is due to the sale of eleven
restaurants to a franchisee and the closure of one restaurant
during the current quarter. The remaining decrease is due
primarily to a 1.5% decrease in sales at comparable restaurants
versus the same period of the prior year.

During the first quarter, franchisees opened six restaurants,
three in Canada and one each in Detroit, Michigan; Valladolid,
Spain; and Seoul, Korea. Five franchise restaurants were closed
during the quarter.

For the quarter, Adjusted EBITDA, as defined herein, increased
3.8% to $2.7 million from $2.6 million during the same quarter of
the prior year. This increase in Adjusted EBITDA is due primarily
to an increase in franchise fees and royalties and a reduction in
general and administrative expenses, partially offset by a
reduction in Adjusted EBITDA at company-owned restaurants due to
the comparable sales decrease at company restaurants and the
effect of the sale of 11 restaurants to a franchisee.

The net loss for the quarter was $518,000 compared with a net loss
of $478,000 during the same quarter of the prior year. The Company
recorded a net loss on disposal assets of $126,000 associated with
the sale of eleven restaurants to a franchisee and the closure of
one restaurant pursuant to a lease termination agreement. Tax
expense of $104,000 representing foreign and state income taxes
was recorded during the quarter compared with a tax benefit of
$256,000 recorded during the same quarter of the prior year.

          Financial Restructuring Alternatives Evaluated

The company has hired Houlihan Lokey Howard & Zukin Capital as a
financial advisor to assess the potential to refinance the $55.0
million of 12% Senior Notes due July 1, 2006 and to provide other
restructuring alternatives. While various alternatives are being
evaluated, the payment of the semi-annual interest payment of $3.3
million due July 1, 2003 was not made. The grace period to make
the interest payment expired on July 31, 2003 creating an event of
default under the terms of the Indenture. The company is unable to
predict the likelihood of success of this restructuring effort.

"We are exploring all of our options," said David W. Head, CEO and
President. "The intent of any financial restructuring will be to
provide us with enough flexibility to reinvest in the business and
create a solid platform for growth, which is vitally important to
our company's long-term success.

"Since joining the company in late June, my primary focus has been
on improving the performance of Tony Roma's restaurants by
providing guests with better experiences," said Head. "We are
absolutely committed to raising the bar on operating excellence
and will change anything that gets in the way of doing so."

"Good is simply not good enough," Head added. "Our ribs and other
menu items must be excellent every time and service must be so
friendly and attentive that you can't wait to come back. We're
focused on delivering upon this one restaurant, one guest at a
time."

Romacorp, Inc. -- whose March 30, 2003 balance sheet shows a total
shareholders' equity deficit of about $30 million -- operates and
franchises Tony Roma's restaurants, the world's largest casual
dining restaurant chain specializing in ribs. As of June 29, 2003,
the Company currently operates 43 restaurants and franchises, 214
restaurants in 28 states and 27 foreign countries and territories.


SALS 2001-2: Class D Credit-Linked Notes Rating Cut to BB+
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on two
tranches of SALS 2001-2's credit-linked notes due November 2006.

The rating actions reflect credit deterioration that has occurred
in the $1 billion pool of reference credits.

In addition, the ratings reflect the credit quality of the
reference credits, the level of credit enhancement provided by
subordination, and UBS AG's ability to meet its payment
obligations as issuer of the notes.

                        RATINGS LOWERED

        SALS 2001-2
        Class                           Rating
                                   To          From
        C                          BBB         A-
        D                          BB+         BBB-


SAMUELS JEWELERS: Secures $3 Million Interim DIP Financing
----------------------------------------------------------
The Honorable Judge Mary F. Walrath granted Samuels Jewelers,
Inc.'s interim approval of its application to incur postpetition
secured indebtedness of up to $3,000,000 through September 7,
2003.  The Debtor is likewise afforded authority to grant security
interests and superpriority claims to the financial institutions
and DDJ Capital Management.

The Debtor reports that it needs the financing facility to:

     i) fund ongoing working capital and general corporate needs
        of the Debtor during the Chapter 11 case;

    ii) pay the fees, costs, expenses, and disbursements of
        professionals retained by the Debtor or any statutory
        committees appointed in this case and to pay the costs
        and expenses of the members of the Committee and
        bankruptcy related charges;

   iii) pay fees and expenses owed to the Lenders under the DIP
        Loan Agreement and the other DIP Loan Documents.

The Court has ruled that the Debtor's interim Credit Facility it
requested is essential for the continued operations of its
business.  Moreover, the Debtor was unable to obtain unsecured
credit for money borrowed allowable as an administrative expense
under Section 503(b)(1) of the Bankruptcy Code or other secured
financing on equal or more favorable terms than that agreed by the
Lenders and the Debtor.

As of the Petition Date, the Debtor discloses that it is indebted
to the Lenders:

     a) $20,000,000 (Tranche A Loans);

     b) $20,574,789 (Tranche B Loans); and

     c) $20,958,913 (Tranche C Loans).

The ability of the Debtor to obtain sufficient working capital and
liquidity through the incurrence of new indebtedness for borrowed
money and other financial accommodations is vital to the Debtor's
estate and its creditors, so that the business need for the Debtor
to be operating under normal business terms may be met.  The
preservation and maintenance of the going concern value of the
Debtor generally is integral to its successful reorganization.

Final Hearing to consider the Debtor's request to incur up to
$26,000,000 in DIP Financing is currently schedules for September
2, 2003 at 3:00 p.m. before the U.S. Bankruptcy Court for the
District of Delaware.  Any written objections to the Debtor's
final financing request must be received no later than August 28,
2003 by:

       i) counsel to the Debtor
          Klee, Tuchin, Bogdanoff & Stern LLP
          Fox Plaza, 2121 Avenue of the Stars
          33rd Floor, Los Angeles, California 90067
          Attn: Michael L. Tuchin

          Greenberg Traurig
          The Brandywine Building
          1000 West Street, Suite 1540
          Wilmington, Delaware 19801
          Attn: Scott Cousins;

      ii) counsel to the Agent and Lenders
          Goodwin Procter LLP
          Exchange Place
          Boston, Massachusetts 02109
          Attn: Jon D. Schneider

          Pepper Hamilton
          Suite 600, 1201 Market Street
          P.O. Box 1709
          Wilmington, Delaware 19899-1709
          Attn: David Fournier; and

     iii) United States Department of Justice
          Office of the United States Trustee
          J. Caleb Boggs Federal Building, 844 King Street
          Room 2207, Lockbox 35, Wilmington, Delaware 19801
          Attn: Richard L. Schepacarter, Esq., Trial Attorney

Samuels Jewelers, Inc., headquartered in Austin, Texas, operates a
national chain of specialty retail jewelry stores located in
regional shopping malls, power centers, strip centers and stand-
alone stores. The Company filed for chapter 11 protection on
August 4, 2003 (Bankr. Del. Case No. 03-12399). Scott D. Cousins,
Esq., William E. Chipman Jr., Victoria W. Counihan, Esq., at
Greenberg Traurig LLP represent the Debtor in its restructuring
efforts.  When the Company filed for protection from its
creditors, it listed $42,500,000 in total assets and $78,400,000
in total debts.


SMITHFIELD FOODS: Inks Definitive Pact to Acquire Cumberland Gap
----------------------------------------------------------------
Smithfield Foods, Inc., (NYSE: SFD) has reached a definitive
agreement to acquire a 90% interest in Cumberland Gap Provision
Company, a privately-held leading processor of a full line of
premium branded hickory smoked hams, sausages and other specialty
processed pork products, for approximately $56 million before
working capital and other closing adjustments.  Ray McGregor,
founder and chief executive officer of Cumberland Gap, and certain
other members of the McGregor family who are part of Cumberland
Gap's management, will continue to own 10% of the Company.

Smithfield stated that it expects the acquisition to be completed
within the next 45 days, and for it to be immediately accretive to
its earnings.  The agreement is subject to customary regulatory
approvals, including clearance under antitrust rules, and other
customary closing conditions.  Further terms of the transaction
were not disclosed.

Cumberland Gap's current facilities in Middlesboro, Kentucky have
an annual processing capacity in excess of 100 million pounds, and
its net sales in 2002 were $70 million.

Joseph W. Luter, III, Smithfield's chairman and chief executive
officer, stated, "Cumberland Gap has a strong reputation for
quality and an attractive line of branded processed meats.  With
this acquisition we will further strengthen our higher value added
business.  Cumberland's highly skilled and experienced management
team will be a welcome addition to our company."

Ray McGregor, founder and CEO of Cumberland Gap said, "Our company
has grown significantly since its inception in 1979.  I am very
proud of Cumberland Gap's product offerings and brand strength,
and I believe that the combination with Smithfield will offer
Cumberland Gap financial and operational resources to enable us to
continue to increase sales by growing and developing our brand and
product distribution."

Cumberland Gap will operate as a separate stand-alone entity
within Smithfield's John Morrell & Co.  With sales of $1.6
billion, John Morrell & Co. is a broad-based supplier of fresh
pork and processed meats.

Smithfield Foods has delivered a 26 percent average annual
compounded rate of return to investors since 1975.  With sales of
$8 billion, Smithfield Foods is the leading processor and marketer
of fresh pork and processed meats in the United States, as well as
the largest producer of hogs.  For more information, please visit
http://www.smithfieldfoods.com

                            *   *   *

As reported in Troubled Company Reporter's July 17, 2003 edition,
Standard & Poor's Ratings Services placed its 'BB+' corporate
credit rating and senior secured notes ratings on Smithfield Foods
Inc., on CreditWatch with negative implications.

The 'BB' senior unsecured and 'BB-' subordinated debt ratings on
Smithfield Foods were also placed on CreditWatch with negative
implications.


SONA DEV'T: Hires LaBonte to Replace Grant Thornton as Auditors
---------------------------------------------------------------
On July 31, 2003, Grant Thornton LLP, the principal accountant
previously engaged to audit Sona Development Corporation's
financial statements, resigned as auditors of Sona Development
Corp.

On August 6, 2003, the Company retained LaBonte & Co. Chartered
Accountants as the principal accountants to replace Grant
Thornton. The Company's Board of Directors approved the change of
accountants from Grant Thornton to LaBonte.

The audit reports of Grant Thornton on the Company's financial
statements for the two most recent fiscal years ending
December 31, 2002 and December 31, 2001 included an explanatory
paragraph for a going concern uncertainty.

Sona Development Corp., formerly known as Net Master Consultants,
Inc., was incorporated as Houston Produce Corporation under the
laws of the State of Texas on December 28, 1988. The Company was
organized primarily for the purpose of importing fruits and
vegetables from Latin America for sale in the United States market
and it was dormant until its reactivation in March 1997. In June
1997, the Company changed its name to Net Master Consultants, Inc.
On December 28, 2002, the Company changed its name to Sona
Development Corp.

The Company has had limited activity since its inception. No
significant revenues have been realized. On September 26, 2000 the
Company entered into a letter of intent with Smart Card
Technologies Co. Ltd., and its shareholders to acquire 100% of
SCT, a private Japanese company. SCT, headquartered in Tokyo,
develops, designs and manufactures radio frequency identification
products, components, and customized software solutions to meet
the specialized needs of logistics applications. On June 28, 2001,
the Company agreed to assign its right and interest under the
September agreement to Elysio Capital Corp., as repayment of
$600,000 of loan from Elysio.

The Company has few tangible assets, has had recurring operating
losses, and does not have an established source of revenue to
allow it to continue as a going concern. These financial
statements have been prepared on the basis of accounting
principles applicable to a going concern which assumes that the
Company will continue to operate for the foreseeable future and
will be able to realize it assets and discharge its liabilities in
the normal course of operations. The Company's continued existence
is dependent upon its ability to raise additional capital to
achieve profitable operations and its ability to identify a
product or service to generate positive cash flows. It is
management's intentions to pursue various potential products and
identify funding sources until such time as there is sufficient
operating cash flow to fund operating requirement. As part of
management's plan to mitigate the Company's working capital
deficiency, the Company converted some of its debts to
common stock.


SPECTRUM RESTAURANT: Case Summary & Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: Spectrum Restaurant Group Inc.
             450 Newport Center Drive
             Suite 600
             Newport Beach, California 92660

Bankruptcy Case No.: 03-15911

Debtor affiliates filing separate chapter 11 petitions:

        Entity                                     Case No.
        ------                                     --------
        Crabby Bob's Franchise Corp.               03-15912
        Spoons Restaurants Inc.                    03-15913
        Local Favorite Inc.                        03-15914
        Spectrum Foods Inc.                        03-15915
        Grandy's Inc.                              03-15916

Type of Business: The Debtor and its debtor-affiliates own and
                  operate fifty-two restaurants.

Chapter 11 Petition Date: August 6, 2003

Court: Central District of California, Santa Ana Division

Judge: Robert W. Alberts

Debtors' Counsel: Robert E. Opera, Esq.
                  Winthrop Couchot
                  660 Newport Center Drive
                  4th Floor
                  Newport Beach, CA 92660
                  Tel: 949-720-4100

                           Estimated Assets: Estimated Debts:
                           ----------------- ----------------
Spectrum Restaurant Group  $1MM To $10MM     $10MM To $50MM
Crabby Bob's Franchise     $1MM To $10MM     $1MM To $10MM
Spoons Restaurants Inc     $1MM To $10MM     $1MM To $10MM
Local Favorite, Inc.       $1MM To $10MM     $1MM To $10MM
Spectrum Foods Inc         $1MM To $10MM     $1MM To $10MM
Grandy's Inc               $50k To $100k     $1MM To $10MM

   A. Spectrum Restaurant Group's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Tomlinson Zisko LLP         Trade Debt                $150,079

American Restaurant Group   Trade Debt                $139,592

Musick Peeler & Garrett     Trade Debt                 $94,713

Dickstein Shapiro Morin     Trade Debt                 $76,774
& Oshinsky

Simpson Thacher & Bartlett  Trade Debt                 $51,013

HMA Administrators          Trade Debt                 $43,945

Realtime Computer           Trade Debt                 $32,310

Weston & Herzog LLP         Trade Debt                 $26,137

Ernst & Young LLP           Trade Debt                 $25,000

The Irvine Company c/o      Trade Debt                 $21,289
Insignia/ESG, Inc.

Crawford & Company          Trade Debt                 $20,842
Branch 9773

Bolar, Rosen, Black & Dean, Trade Debt                 $11,584
LLP

Price Waterhousecoopers LLP Trade Debt                  $9,615

Judd Thomas Smith & Co.     Trade Debt                  $9,300

Metlife - A/C 065337        Trade Debt                  $4,323
Retirement Plans Group

Tustin Personnel Services   Trade Debt                  $3,820

Ad Valorem                  Trade Debt                  $3,488

Discount Warehouse Office   Trade Debt                    $969
Supply

SBC California/Pacific      Trade Debt                    $608
Bell Van Nuys

   B. Crabby Bob's Franchise's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Anderson Seafoods           Trade Debt                $126,827

US Foodservice-Santa Ana    Trade Debt                 $96,966
#4150

Ontario R.E. Holdings       Trade Debt                 $38,732

Pan Pacific Retail Prop     Trade Debt                 $33,838

Worldwide Produce           Trade Debt                 $33,294

Meat & Provisions           Trade Debt                 $16,643
by Holiday

Old Country/Baking          Trade Debt                 $16,542

Greg Nagy                   Trade Debt                 $16,299

Burbank Mall                Trade Debt                 $13,324

Laquinta Inn - San Antonio  Trade Debt                 $12,916
La Quinta

Mission Linen Service       Trade Debt                 $12,229

Adohr Farms                 Trade Debt                 $11,240


San Diego Gas & Elec.       Trade Debt                  $6,319

Ramco Ref.                  Trade Debt                  $5,532

Ecolab Pest                 Trade Debt                  $3,196

Young's Market              Trade Debt                  $2,794

Ecolab                      Trade Debt                  $2,641

Southern Wine               Trade Debt                  $2,217

Brinks                      Trade Debt                  $1,305

Premium Distributing        Trade Debt                  $1,190

   C. Spoons Restaurants Inc.'s 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
US Foodservice              Trade Debt                $302,649
Attn: Toni Shaw
601 W. Dyer Rd.
PO Box 2156
Santa Ana, CA 92707-2156

Birite Foodservice Dist.    Trade Debt                $200,544

Worldwide Produce           Trade Debt                 $95,279

Macerich CA Assc LP/        Trade Debt                 $92,041
Fresno Fashion

Tustin Plaza Ctr LP/        Trade Debt                 $57,706
Amer. West

General Produce Co.         Trade Debt                 $52,270

Investment Decision Corp.   Trade Debt                 $51,659

Elias Tsigaris/EPG          Trade Debt                 $38,249
Properties

Amos Travis                 Trade Debt                 $36,000

So. Cal Edison              Trade Debt                 $35,083

Cardinal Development        Trade Debt                 $33,375

Adohr Farms                 Trade Debt                 $32,335

3545 Central Shoppingtown   Trade Debt                 $23,602
LLC/PNC

Mainplace Shoppingtown LLC/ Trade Debt                 $19,175
PNC Bank-Lockbox Dept.

Ramco Ref. & A/C, Inc.      Trade Debt                 $18,254

Pacific Gas & Electric Co.  Trade Debt                 $16,624

H.G. Sherman                Trade Debt                 $16,279

Ecolab Pest                 Trade Debt                 $16,230

Pan Pacific Retail          Trade Debt                 $15,527
Properties

Krausz Enterprises c/o      Trade Debt                 $11,805
The Krausz Companies

   D. Local Favorite, Inc.'s 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Harbor Mesa (Settlement)    Trade Debt                $200,000
c/o Tomlinson, Zisko et al.

US Foodservice              Trade Debt                $124,400

Equity Office Property      Trade Debt                $121,715
Trust

Lyons, Charles              Trade Debt                 $39,419

Worldwide Produce           Trade Debt                 $36,015

Dr. Mitchell Karlan         Trade Debt                 $24,150

Greg Nagy                   Trade Debt                 $23,791

Harbor Distributing Co.,    Trade Debt                 $20,225
Inc.

The Grand Plan              Trade Debt                 $15,000

Starwood c/o Transwestern   Trade Debt                 $10,756
Property Co.

Ecolab Pest                 Trade Debt                  $9,461

Strong Image                Trade Debt                  $9,340

Southern Wine               Trade Debt                  $9,203

Ramco Refrig.               Trade Debt                  $6,339

Ecolab                      Trade Debt                  $5,886

Meat & Provisions by        Trade Debt                  $5,081
Holiday

Straub Distributing         Trade Debt                  $4,884

Adohr Farms                 Trade Debt                  $4,524

Anderson Seafoods           Trade Debt                  $2,192

Brinks                      Trade Debt                  $1,655

   E. Spectrum Foods Inc.'s 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Metropolitan Provisions     Trade Debt                $216,049

Worldwide Produce           Trade Debt                $207,207

Birite                      Trade Debt                $183,575

Newport Fish                Trade Debt                $164,930

Anderson Seafoods           Trade Debt                $156,888

Adrianni Ianni              Trade Debt                $150,000

Main Street Properties      Trade Debt                $120,527

Kali-Knight Bird Company    Trade Debt                $105,961

Durham Meat                 Trade Debt                 $94,719

Equity Office Properties    Trade Debt                 $93,589
Dba LaJolla Village

Meat & Provision by         Trade Debt                 $92,225
Holiday

607 Front Street, LLC       Trade Debt                 $86,521

Hazard Center Investors     Trade Debt                 $71,228

Tri Bros Investment         Trade Debt                 $66,000

Media Center Dev.           Trade Debt                 $65,789

Architecture & Light        Trade Debt                 $64,936

Greenleaf Produce           Trade Debt                 $56,310

Equity Office Properties    Trade Debt                 $46,977
Dba LaJolla Village

Srs-101 Ygnacio             Trade Debt                 $47,844

Ecolab                      Trade Debt                 $36,660

   F. Grandy's Inc.'s 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Meadowbrook Meat Co.        Trade Debt                $263,114
Attn: Gordon Etherley
2641 Meadowbrook Rd.
PO Box 800
Rocky Mount, NC 27802

US Restaurant Prop.         Trade Debt                $120,882

Quida White                 Trade Debt                 $87,495

Oneida Realty               Trade Debt                 $64,856

Amega Corp                  Trade Debt                 $61,705

Ahmadali Varanni            Trade Debt                 $56,871

Atlantis Services           Trade Debt                 $51,299

Dal-Rich S/C Joint Venture  Trade Debt                 $50,147

Burlington Coat Factory     Trade Debt                 $40,266

Prescott Interest           Trade Debt                 $27,750

Eldridge Land               Trade Debt                 $27,647

Bellaire Capital            Trade Debt                 $19,763

Sage Brush                  Trade Debt                 $18,450

Pilgrim Pride               Trade Debt                 $19,584

RPI c/o Retail Plazas, Inc. Trade Debt                 $16,464

Valassis                    Trade Debt                 $15,176

Centeramerica Venture       Trade Debt                 $14,592

University Properties       Trade Debt                 $14,582

Reppas                      Trade Debt                 $14,515

Dallas Morning News         Trade Debt                 $14,322


STOCKHORN CDO: Fitch Cuts Class E Mezzanine Note Rating to BB-
--------------------------------------------------------------
Fitch Ratings has downgraded four classes and affirmed one class
of Stockhorn CDO Limited/Corp. Stockhorn CDO is a $500 million
synthetic collateralized debt obligation referencing a portfolio
of 100 equally weighted corporate obligors.

The following classes of notes have been downgraded:

   -- Class B senior notes due 2007 to 'AA-' from 'AA';
   -- Class C-1 mezzanine notes due 2007 to 'BBB+' from 'A';
   -- Class C-2 mezzanine notes due 2007 to 'BBB+' from 'A';
   -- Class D-1 mezzanine notes due 2007 to 'BBB-' from 'BBB';
   -- Class D-2 mezzanine notes due 2007 to 'BBB-' from 'BBB';
   -- Class E mezzanine notes due 2007 to 'BB-' from 'BB'.

The following class has been affirmed:

   -- Class A senior notes due 2007 'AAA'.

These actions are being taken as a result of credit deterioration
in the underlying reference portfolio. The portfolio, which
originally consisted entirely of investment grade credits,
currently contains eight credits rated below investment grade by
at least one rating agency, including one credit rated 'CCC'.

As of Aug. 1, 2003 Fitch has been applying its new CDO criteria
and VECTOR model analysis when rating or reviewing CDO
transactions. Fitch will continue to monitor Stockhorn CDO.


TECH DATA: Will Publish Second Quarter Fin'l Results on Aug. 27
---------------------------------------------------------------
Tech Data Corporation, (Nasdaq: TECD), a leading provider of IT
products and logistics management services, will announce its
second-quarter results on Wednesday, August 27, 2003.  The
conference call to discuss the results will begin at 4:30 p.m. EDT
and will be hosted by Steven A. Raymund, Chairman and Chief
Executive Officer, Nestor Cano, President of Worldwide Operations
and Jeffery P. Howells, Executive Vice President and Chief
Financial Officer.

    * What:   Tech Data Corporation's Fiscal 2004 Second-Quarter
              Earnings Announcement and Investor Conference Call

    * When:   Wednesday, August 27, 2003 at 4:30 p.m. EDT

    * Where:  Register and listen to the live webcast at
              http://www.techdata.com

Alternatively, you may listen to the conference call via telephone
by calling 800-454-3791 (in North America) or 706-634-2270
(outside North America).  An archive of the webcast will be
available at http://www.techdata.comapproximately one hour after
the conclusion of the call until September 3, 2003 at 5:00 p.m.
EDT.

Tech Data Corporation (Nasdaq: TECD) (Fitch, BB+ Senior Unsecured
Debt & BB Conv. Subordinated Debt Ratings, Stable), founded in
1974, is a leading global provider of IT products, logistics
management and other value-added services. Ranked 117th on the
Fortune 500, the company and its subsidiaries serve more than
100,000 technology resellers in the United States, Canada, the
Caribbean, Latin America, Europe and the Middle East. Tech Data's
extensive service offering includes pre- and post-sale training
and technical support, financing options and configuration
services as well as a full range of award-winning electronic
commerce solutions. The company generated sales of $15.7 billion
for its most recent fiscal year, which ended January 31, 2003.


TENFOLD CORP: June 30 Net Capital Deficit Narrows to $12 Million
----------------------------------------------------------------
TenFold(R) Corporation (OTC Bulletin Board: TENF) provider of the
Universal Application(TM) platform for building and implementing
enterprise applications, announced its financial results for its
second quarter of 2003 ended June 30, 2003.

For the second quarter of 2003, TenFold reported revenues of $9.5
million, operating income of $5.3 million, net income of $5.4
million, and diluted earnings per share of $0.11. This compares to
revenues of $6.3 million, an operating loss of $2.2 million, a net
loss of $2.4 million, and a diluted loss per share of $0.06 for
the same period of 2002.

At June 30, 2003, Tenfold Corp.'s balance sheet shows a working
capital deficit of about $13 million, and a total shareholders'
equity deficit of about $12 million.

"Over the last six quarters, we have seen sequential quarter-by-
quarter growth in revenue and operating income and our third
sequential quarter of solid operating and net income," said, Dr.
Nancy Harvey, TenFold's President and CEO. "Having completed a far
reaching turnaround in a difficult business environment, we are
proud to be reporting our strongest quarter of operating profits
as a public company and to be closing a tough chapter in TenFold's
history. We look forward to facing the challenges of igniting
sales and building a growth technology company."

"As the Founder of TenFold, my vision for our technology and its
dramatic influence on our industry has never wavered -- even
through the turbulence of the past few years," said Jeffrey L.
Walker, TenFold's Chairman. "The most gratifying aspect of the
first half of 2003 is that our CEO is building a management team
that is driven to perform. We've learned that good technology is
not enough; it takes strong operating drive and relentless
execution. Congratulations to Nancy and her team."

Among the announcements made by TenFold during Q2 of 2003 were:

    *  TenFold announced a Universal Application release.

    *  TenFold announced that Rand Technology, Inc. had licensed a
       development copy of the Universal Application platform for
       use in redesigning and rebuilding its core, mission-
       critical application and has completed a demonstrable
       version of that application. (See press release of
       April 29, 2003.)

    *  TenFold announced that it had begun giving demonstrations
       of its newest product, code-named Tsunami.

    *  TenFold announced that it has added support for MySQL to
       its Universal Application platform.

    *  TenFold announced the first general availability release of
       Securities LendingXpress(TM), the financial services
       industry's first comprehensive, e-business, global
       securities lending application.

    *  TenFold announced that iplan networks and TenFold have
       entered into a new support relationship for 2003 and 2004.

    *  TenFold announced the formation of a new business unit
       called the Speed Team.

    *  TenFold announced a new service offering called VersionOne.

    *  TenFold announced the publication of a comprehensive
       analysis of the quality of applications built using
       TenFold's Universal Application technology as compared to
       applications built with other development technologies.
       This analysis is available as a white paper entitled
       "Quality Comparisons of Applications Built with Various
       Technologies."

    *  TenFold reacted to Gartner's recently published assertion
       that "About 65% of companies have either a negative or
       neutral view of the ability of IT and business managers to
       work together in supporting corporate goals and
       objectives."

    *  TenFold announced conformance to IBM's vision of "autonomic
       computing" with a significant and unique feature of its
       Universal Application platform called "SelfAwareness."

    *  TenFold announced the successful completion of a VersionOne
       project with eePulse.

TenFold (OTC Bulletin Board: TENF) licenses its breakthrough,
patented technology for applications development, the Universal
Application platform, to organizations that face the daunting task
of replacing legacy applications or building new applications
systems. Unlike traditional approaches, where business and
technology requirements create difficult IT bottlenecks, Universal
Application technology lets a small, primarily non-technical,
business team design, build, deploy, maintain, and upgrade new or
replacement applications with extraordinary speed and limited
demand on scarce IT resources. For more information, visit
http://www.10fold.com


TESORO PETROLEUM: Improved Liquidity Spurs S&P to Affirm Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' corporate
credit rating on midsize independent oil refiner and marketer
Tesoro Petroleum Corp. At the same time, Standard & Poor's revised
its outlook on the company to stable from negative.

San Antonio, Texas-based Tesoro has about $2 billion of debt
outstanding.

"The outlook revision reflects improved liquidity and meaningful
debt reduction following completion of a refinancing of its bank
credit facilities," noted Standard & Poor's credit analyst John
Thieroff. "Subsequent to the refinancing, the company has
liberated more than $150 million previously trapped in early
payments and prepayments of inventory and has applied this cash,
along with modest free cash flow during the first half of 2003, to
debt reduction," he continued.

Tesoro's deleveraging efforts have better positioned the company
to sustain itself during the low points of the refining cycle and
have significantly alleviated Standard & Poor's concerns about
liquidity.

As of June 30, 2003, Tesoro's debt to total capital was 65%,
improved from the near-70% level at year-end 2002, but still quite
high given the highly cyclical, highly volatile, working capital-
intensive nature of refining. Management's debt-reduction plan
should allow Tesoro to improve leverage to the low-60% range by
year-end 2003. Assuming midcycle crack spreads for the year,
EBITDA to interest coverage should improve to near 3x for 2003
with funds from operations to total debt between 15% and 20%,
which are more appropriate levels for the rating category than the
very thin coverage measures of 2002.

Tesoro's ability to curtail operations as needed when operating
cash flow deficits persist should give the company the flexibility
necessary to manage its liquidity position at the deepest points
of the refining cycle trough. Tesoro has no meaningful debt
maturities other than its revolving credit facility before 2007.

The stable outlook reflects Standard & Poor's expectation that
Tesoro will be able to continue its debt-reduction efforts through
the use of free cash flow. Rating improvement depends on the
company's ability to deleverage beyond its currently stated
objectives through the end of 2003.


THERMOVIEW INDUSTRIES: Reports Improved Second Quarter Results
--------------------------------------------------------------
ThermoView Industries Inc. (Amex: THV), which designs,
manufactures and markets home improvements under the brand name
"THV: America's Home Improvement Company," reported financial
results for the second quarter and six months ending June 30,
2003.

Second quarter 2003 revenues were $18.1 million, compared to year-
ago quarterly revenues of $23.8 million. The net income
attributable to common stockholders was $795,000 for the second
quarter of 2003 after a $796,000 unusual gain related to
converting $1 million of debt to 680,000 common stock warrants and
a $796,000 benefit from redeeming $1 million of the Series D
preferred stock for another 680,000 common stock warrants. That
compares to a net income related to common stockholders of
$579,000 for the second quarter of 2002.

Revenues for the first six months of 2003 were $34.3 million,
compared to revenues of $44.5 million for the first six months of
2002. The net loss attributable to common stockholders was
$963,000, or 10 cents per basic and diluted share, for the first
six months of 2003 after a $796,000 unusual gain related to
converting $1 million of debt to 680,000 common stock warrants and
a $796,000 benefit from redeeming $1 million of the Series D
preferred stock for another 680,000 common stock warrants. That
compares to a net loss attributable to common stockholders for the
first six months of 2002 of $30.4 million, or $3.39 per share,
including a non-cash charge for writing off impaired goodwill.
Without the $30 million charge for impaired goodwill, the net loss
attributable to common stockholders for the first six months of
2002 was $361,000.

"ThermoView's second quarter reflects the accomplishment of one of
our major long term goals in the restructure of our debt, tempered
by a period of disappointing sales," said Charles L. Smith, CEO
and President of ThermoView. "The benefits of our debt restructure
should allow us to strengthen our bottom line, as we expect sales
to improve in what is historically our best selling season of the
year," said Smith.

Smith continued, "We are aware, as management will outline in our
second quarter 10-Q, if our third quarter performance does not
significantly improve, ThermoView could encounter financial loan
covenant issues and cash shortages. I am confident that we are
taking the necessary steps to improve our performance," said
Smith.

ThermoView is a national company that designs, manufactures,
markets and installs high-quality replacement windows and doors as
part of a full-service array of home improvements for residential
homeowners. ThermoView markets home improvements in 16 Midwest and
Western states under well-known regional home center brands that
include Thomas, Primax, Rolox, Leingang and ThermoView. All of
these brands are consolidating under a national brand, "THV,
America's Home Improvement Company." ThermoView's common stock is
listed on the American Stock Exchange under the ticker symbol
"THV." Additional information is available at http://www.thv.com

                           *    *    *

In its latest Form 10-Q delivered to the Securities and Exchange
Commission, the company states:

      Under our  financing  arrangements,  substantially  all of
      our  assets  are pledged as collateral.  We are required
      to maintain certain financial ratios and to comply with
      various other covenants and  restrictions  under the terms
      of the financing agreements,  including restrictions as to
      additional  financings,  the payment  of  dividends  and
      the  incurrence  of  additional  indebtedness.   In
      connection with waiving defaults at June 30, 2000, PNC
      Bank required us to repay $5 million of our $15 million
      credit facility with them by December 27, 2000. We were
      unable to make the required  December 27, 2000  payment,
      violated  various other covenants, and were declared in
      default by PNC Bank in early January 2001. The declaration
      of default by PNC Bank also served as a  condition  of
      default under the senior  subordinated  promissory  note
      to GE  Equity.  GE Equity and a group of our officers and
      directors in March 2001  purchased  the PNC note,  and
      all defaults relating to the GE Equity note and the
      purchased PNC Bank note were waived.

      If we default in the future under our debt  arrangements,
      the lenders can, among other items,  accelerate  all
      amounts owed and increase  interest rates on our debt.  An
      event of  default  could  result  in the loss of our
      subsidiaries because  of the  pledge  of our  ownership
      in  all of our  subsidiaries  to the lenders.  As of
      September  30, 2002, we are not in default under any of
      our debt arrangements.

      We  believe  that our cash flow from  operations  will
      allow us to meet our anticipated needs during at least the
      next 12 months for:

           *    debt service requirements;

           *    working capital requirements;

           *    planned property and equipment capital
                expenditures.

           *    expanding our retail segment

           *    offering new technologically improved products
                to our customers

           *    integrating more thoroughly the advertising and
                marketing  programs of our regional subsidiaries
                into a national home-remodeling business

      We also believe in the longer term that cash will be
      sufficient to meet our needs.  However,  we do not expect
      to continue our acquisition  program soon. In October
      2002, we opened a new retail sales office in Phoenix,
      Arizona,  and are working to open two new retail  offices
      in  Nebraska  or Iowa and in a southern state in 2003.


TROPICAL SPORTSWEAR: S&P Places Low-B Rating on Watch Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services revised the CreditWatch status
of Tropical Sportswear Inc. to CreditWatch with negative
implications from CreditWatch with developing implications, where
it was placed on June 30, 2003. The revision comes as a result of
the firm's announcement that it has concluded its review of
strategic alternatives.

Tropical's board of directors has determined that the firm should
continue to pursue its "present strategic business plan."
Moreover, the firm has announced that it will terminate members of
senior management, including the current chief executive officer
and chief financial officer, effective Aug. 15, 2003.

"On July 23, 2003, Tropical's corporate credit rating was lowered
to 'B+' from 'BB-', reflecting weaker-than-expected financial
performance, which has resulted in credit measures below Standard
& Poor's expectations," said Standard & Poor's credit analyst
Kenneth Drucker. Before concluding its review, Standard & Poor's
will monitor events and meet with the newly designated management
team to assess the operating environment, the transition of
management, and the company's business and financial strategies.

Tropical Sportswear produces basic men's and women's casual and
dress apparel under both private labels and the brand names that
it owns.


UNION ACCEPTANCE: Indiana Court Confirms Plan of Reorganization
---------------------------------------------------------------
Union Acceptance Corporation (OTC:UACAQ) announced that the U.S.
Bankruptcy Court has confirmed its Plan of Reorganization in its
Chapter 11 bankruptcy proceeding.

At its confirmation hearing before the U.S. Bankruptcy Court for
the Southern District of Indiana in Indianapolis on August 8,
2003, the Court ordered confirmation of UAC's Second Amended Plan
of Reorganization in the form filed with the Court on August 6,
2003. The Second Amended Plan reflects certain non-material
modifications to the First Amended Plan of Reorganization, which
was circulated to creditors of UAC. The Plan received broad
acceptance of UAC's creditors of each class and no objections to
the Plan were made.

Generally, the plan calls for the use of available cash resources
and cash flows to be released over time from the retained interest
to repay creditors in their order of priority. Holders of senior
and senior subordinated notes will receive new restructured notes
reflecting these rights. Holders of smaller unsecured claims were
entitled to elect a discounted repayment in exchange for early
payout for convenience.

The Bankruptcy Court entered its order approving the Plan on
August 8, 2003. The effective date of the Plan has not yet been
fixed, but is anticipated to occur in the coming few weeks.

"We are very pleased that the Plan has been confirmed," commented
John M. Eggemeyer, UAC Chairman. "This marks a significant hurdle
for UAC and we are grateful for the cooperation and extensive
efforts of the Members of our Creditors and Equity Committees,
their advisors, and the many others who helped us to build a fair
and equitable Plan. We remain optimistic that our available cash
resources will be sufficient to repay our creditors in full over
time as contemplated in the Plan of Reorganization. What value
will remain for equity after our creditors are repaid pursuant to
the Plan is subject to a number of factors that are difficult to
predict. Net losses in the portfolio will be a significant factor,
of course, and much depends on the effectiveness of our servicer,
Systems & Services Technologies, Inc. Because the plan of
reorganization provides for repayment of our creditors over time,
realization of remaining value, if any, by our equity holders from
our remaining assets will be several years away."

                    Board and Management Changes

UAC also announced a reduction in the size of its board of
directors, as contemplated by the Plan or Reorganization. The
directors continuing on the board are the Chairman, John M.
Eggemeyer, III, as well as Richard D. Waterfield, Donald A.
Sherman, and Thomas M. West.

Stepping down from the board are John Davis, Tom Haegy, Bill
McKnight, Mike Stout, as well as Lee N. Ervin, whose service as
CEO ended at the end of June. "We are truly grateful to our
retiring directors for the able guidance and dedication they have
shared with UAC over the years, especially during the pendency of
our bankruptcy," commented Mr. Eggemeyer.

UAC also announced that Mr. Eggemeyer has assumed the
responsibilities of Chief Executive Officer, along with his
responsibilities as Chairman. In addition, Mark R. Ruh has been
appointed President and Chief Financial Officer. Mr. Ruh is a Vice
President with Castle Creek Capital LLC, Rancho Santa Fe,
California, a private investment firm with which Mr. Eggemeyer is
affiliated.

                  Shareholder Rights Plan Terminates

UAC further announced that, upon the effective date of the Plan of
Reorganization, UAC's Shareholders' Rights Plan originally adopted
in 2001, will be deemed rejected and all related share purchase
rights will terminate. The Shareholders' Rights Plan is a
contractual arrangement (similar to plans established by many
public companies) intended to induce parties seeking to acquire a
controlling interest in the company to negotiate any such
transaction with the board of directors. The share purchase rights
have heretofore traded only with the shares of common stock and
are not exercisable.

Union Acceptance Corporation is a specialized financial services
company headquartered in Indianapolis, Indiana. Union Acceptance
filed a petition for reorganization under Chapter 11 of the
Bankruptcy Code in the Southern District of Indiana, Indianapolis
Division of the U.S. Bankruptcy Court on October 31, 2002 to
facilitate a financial restructuring.


UNITED AIRLINES: AirLiance Secures Stay Relief to Setoff Claims
---------------------------------------------------------------
U.S. Bankruptcy Court Judge Wedoff modifies the automatic stay to
permit AirLiance Materials to set off the $1,004,181 it owed
United Airlines against the $3,243,674 United Airlines owed
AirLiance.

AirLiance Materials is a Delaware Limited Liability Corporation
with offices in Chicago.  AirLiance acts as a consignment agent
for airlines seeking to sell or purchase surplus aircraft parts.
United is an equity holder in AirLiance.

As previously reported, on May 16, 1998, AirLiance and United
entered into an Inventory Consignment Agreement, where United
Airlines Inc. consigned aircraft parts to AirLiance for  resale.
AirLiance is entitled to a 20% to 23% consignment fee of the net
proceeds.

AirLiance and United are also parties to a Purchasing Services
Agreement whereby United purchases parts from AirLiance. (United
Airlines Bankruptcy News, Issue No. 24; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


U.S. LIQUIDS: Violates Certain Covenants Under Credit Facility
--------------------------------------------------------------
U.S. Liquids Inc. (Amex: USL), a leading provider of liquid waste
management services, announced results for the three and six
months ended June 30, 2003.

                    RESULTS OF OPERATIONS

For the quarter ended June 30, 2003, U S Liquids reported revenues
of $37.2 million compared to $39.3 million in the prior year
quarter. EBITDA (earnings before interest, taxes, depreciation,
and amortization) from continuing operations was a loss of $0.7
million for the quarter compared to $7.7 million for the
comparable 2002 quarter. Income (loss) from continuing operations
for the quarter was a loss of $5.9 million compared to income of
$2.6 million in the second quarter of 2002. The Company's net
income (loss) for the quarter, including discontinued operations,
was a net loss of $6.0 million compared to net income of $1.8
million in the prior year period. During the second quarter of
2003, the Company wrote-off $2.6 million of previously deferred
financing costs incurred in connection with its refinancing
efforts and recorded severance expense of $1.5 million.

For the six months ended June 30, 2003, U S Liquids reported
revenues of $74.1 million compared to $75.2 million in the prior
year period. EBITDA from continuing operations was $3.5 million
for the six months ended June 30, 2003 compared to $12.7 million
for the comparable 2002 period. Income (loss) from continuing
operations for the six-month period ending June 30, 2003 was a
loss of $7.8 million compared to income of $3.2 million in the
comparable prior year period. The Company's net income (loss),
including discontinued operations and the cumulative effect of
changes in accounting principles, was a net loss of $5.2 million
compared to a net loss of $86.4 million for the six months ended
June 30, 2003 and 2002, respectively.

On July 31, 2003, the Company sold its Oilfield Waste Division,
its Beverage Division and its Romic Environmental Technologies
business to ERP Environmental Services, Inc.  ERP Environmental
paid $68.0 million to the Company for the acquired businesses and
also agreed to pay $2.0 million to the Company for certain
transition services to be provided by the Company during the six-
month period following the closing. The final purchase price is
subject to adjustment based upon the net worth of the acquired
businesses on the closing date. The net proceeds of the
transaction were used to reduce debt outstanding under the
Company's credit facility, pay transaction expenses, fund employee
severance obligations, and for other matters required by the
purchase agreement.

Industrial Wastewater Division

The Industrial Wastewater Division reported revenues of $16.0
million for the quarter ended June 30, 2003, a slight decrease
from revenues of $16.2 million during the comparable prior year
quarter. Operating income for the quarter was $1.5 million
compared to $2.1 million in the prior year quarter. A revenue
increase at the Division's Florida facility was offset by declines
in revenue at the Detroit and East Palo Alto facilities. Operating
income for the quarter decreased primarily as a result of the
decreased revenues at the Detroit and East Palo Alto facilities.

The Industrial Wastewater Division reported revenues of $30.8
million for the six months ended June 30, 2003 compared to $30.1
million in the comparable 2002 period. Operating income for the
six months ended June 30, 2003 was $2.7 million compared to $2.2
million in the comparable 2002 period. Increased revenues and
operating income at the Division's Florida, Arizona and Georgia
facilities were partially offset by decreases at the Detroit and
East Palo Alto facilities.

Commercial Wastewater Division

The Commercial Wastewater Division reported revenues of $11.0
million for the quarter compared to $12.2 million for the
comparable prior year quarter. The decrease in revenues in the
current year period resulted from a decline in event-driven
revenues at one of the Company's Michigan locations. The Division
had operating income of $0.7 million compared to $1.4 million in
the prior year quarter. The decrease in operating income for the
current year quarter compared to the prior year quarter is
primarily due to a decline in event-driven revenues.

The Commercial Wastewater Division reported revenues of $22.0
million for the six months ended June 30, 2003 compared to $23.8
million for the comparable prior year period. The decrease in
revenues in the current year period resulted from a decline in
event-driven revenues at one of the Company's Michigan locations.
The Division had operating income of $0.8 million compared to $2.1
million in the comparable prior year period. The decrease in
operating income for the six months ended June 30, 2003 compared
to the comparable prior year period is primarily due to lower
event-driven revenues.

Oilfield Waste Division

The Oilfield Waste Division reported revenues of $5.3 million for
the quarter compared to $5.8 million in the comparable prior year
quarter. Operating income for the quarter was $1.0 million
compared to $3.9 million in the prior year quarter. In 2002, the
Company had second quarter revenues of $2.3 million from its
contract with Newpark Resources that was terminated on July 1,
2002. On a comparable basis, revenues increased by $1.9 million
compared to the prior year quarter due to the effect of improving
market conditions, the construction of additional waste cells and
the Company's Trinity acquisition. The decrease in operating
income compared to the prior year quarter is primarily the result
of the Trinity transfer stations not operating at a level where
the margins from offshore business are as great as the margins
attributable to the Newpark contract.

The Oilfield Waste Division reported revenues of $11.0 million for
the six months ended June 30, 2003 compared to $11.2 million in
the comparable prior year period. Operating income for the six
months ended June 30, 2003 was $2.5 million compared to $6.9
million in the comparable prior year. In the six months ended June
30, 2002, the Company had revenues of $4.7 million from its
contract with Newpark Resources that was terminated on July 1,
2002. On a comparable basis, revenues increased by $4.5 million
compared to the prior year period due to the effect of improving
market conditions, the construction of additional waste cells and
the Company's Trinity acquisition. The decrease in operating
income compared to the prior year period is primarily the result
of the Trinity transfer stations not operating at a level where
the margins from offshore business are as great as the margins
attributable to the Newpark contract.

Beverage Division

The Beverage Division had revenues of $4.9 million for the quarter
ended June 30, 2003 compared to $5.1 million in the prior year
quarter. Operating income was breakeven for the quarter compared
to a loss of $0.3 million in the prior year quarter. The revenue
decline and the improvement in operating income is primarily the
result of a change in customer mix.

The Beverage Division had revenues of $10.3 million for the six
months ended June 30, 2003 compared to $10.1 million in the
comparable prior year period. Operating income for the six months
ended June 30, 2003 was $0.5 million compared to $0.3 million in
the prior year quarter.

                ACCOUNTING AND REPORTING CHANGES

Accounting for Asset Retirement Obligations

Effective January 1, 2003, the Company adopted Statement of
Financial Accounting Standard ("SFAS") No. 143, Accounting For
Asset Retirement Obligations. SFAS No. 143 requires that the
discounted fair value of the liability for an asset retirement
obligation be recognized in the period in which it is incurred if
a reasonable estimate of the fair value can be made. The
associated asset retirement costs are capitalized as part of the
carrying amount of the long-lived asset. Historically, the Company
had recorded the gross estimated retirement obligation at the time
the related asset was acquired. As a result of adopting SFAS No.
143, the Company recognized $2.7 million of income as a cumulative
effect of change in accounting principle in the first quarter of
2003.

Change in Segment Reporting

Effective January 1, 2003, the Company began reporting the results
of its beverage recycling business as a separate segment.
Previously, the beverage business had been included in the
Commercial Wastewater Division. Prior period results have been
reclassified in order to be comparable to 2003 results.

Discontinued Operations

During the fourth quarter of 2002, the Company decided to divest
of or suspend operations at several non-core businesses in its
Commercial Wastewater Division. In accordance with SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets,
the Company has reported the assets, liabilities and results of
operations of those businesses separately as discontinued
operations and restated all prior period financial information to
present the results of continuing and discontinued operations
separately.

Goodwill

Effective January 1, 2002, the Company adopted SFAS No. 142,
Goodwill and Other Intangible Assets. Under SFAS No. 142, the
amortization of goodwill is discontinued and an impairment test is
performed upon adoption. In accordance with SFAS No. 142, an
impairment charge of $87.8 million, net of tax, was recorded on
adoption in the first quarter of 2002. This charge was reflected
as a cumulative effect of change in accounting principle in the
first quarter of 2002. The impairment test under SFAS No. 142 is
required to be performed annually unless an impairment indicator
exists.

OTHER INFORMATION

The Company recently modified its credit facility to extend its
maturity date to August 29, 2003. The Company is engaged in
discussions with its lenders to further extend the maturity date
of the credit facility, provide for the Company's liquidity needs
and modify certain covenants. No assurances can be given that the
Company will be able to obtain replacement financing or extend the
credit facility by August 29, 2003. Currently, the Company is not
in compliance with certain covenants under the facility. A default
under the Company's credit facility could result in the maturity
of substantially all of the Company's indebtedness being
accelerated.

The Company continues to review all of its alternatives to reduce
or refinance its indebtedness. These alternatives include sales of
assets or operating divisions or issuance of common stock or other
securities. The proceeds of any such transaction would be used to
reduce or replace the Company's outstanding debt. No assurances
can be made that any such transaction will be successfully
consummated. Any refinancing or business sale transaction is
expected to result in either substantial dilution to current
stockholders or further reduction in the size of the Company.

Due to improper recording of job costs and certain other items at
one of its business units, the Company restated its results of
operations for the years ended December 31, 2002, 2001 and 2000.
The Company contacted the Securities and Exchange Commission
("SEC") and was advised that the SEC would conduct an informal
investigation of the issues leading to the restatement. The
Company is cooperating fully with the SEC in the investigation.

Headquartered in Houston, Texas, U S Liquids is a leading provider
of liquid waste management services. Following the sale of the
businesses to ERP Environmental and assuming the sale of certain
operations held for sale or closure, U S Liquids operates 20
facilities in 10 states and has more than 6,000 customers.


U.S. STEEL: ISG Intends to Acquire Plate Facility in Indiana
------------------------------------------------------------
International Steel Group Inc., has signed a letter of intent with
United States Steel Corporation to exchange the pickle line
located at the ISG Indiana Harbor Works in East Chicago (Indiana)
for the steel plate production assets currently operating at US
Steel's Gary (Indiana) Works. The ISG pickle line currently serves
US Steel's East Chicago tin mill. The transaction is expected to
close in the fourth quarter.

ISG currently has plate-making operations at Burns Harbor, IN;
Coatesville, PA; and Conshohocken, PA. As one of the country's
largest producers of steel products, ISG is committed to ensuring
that Gary's plate customers receive outstanding service, combined
with the widest range of plate production capabilities in the
industry. ISG intends to work to ensure a quick and seamless
transition.

Rodney Mott, ISG's Chief Executive Officer, stated, "This creative
transaction is further evidence of the ongoing consolidation of
the domestic steel industry. We expect to integrate the Gary plate
facilities with those of ISG to serve the market more efficiently
and make the domestic steel industry more competitive while
providing excellent quality, service and on time-delivery to
America's manufacturers."

International Steel Group was formed by WL Ross & Co. LLC to
acquire and operate globally competitive steel facilities. Since
its formation, International Steel Group Inc. has grown to become
the second largest integrated steel producer in North America,
based on steelmaking capacity, by acquiring out of bankruptcy the
steelmaking assets of LTV Steel Company Inc., Acme Steel
Corporation and Bethlehem Steel Corporation. The company has the
capacity to cast more than 18 million tons of steel products
annually. It ships a variety of steel products from 11 major steel
producing and finishing facilities in six states, including hot-
rolled, cold-rolled and coated sheets, tin mill products, carbon
and alloy plates, rail products and semi-finished shapes serving
the automotive, construction, pipe and tube, appliance, container
and machinery markets.

United States Steel Corporation is engaged domestically in the
production, sale and transportation of steel mill products, coal,
coke and taconite pellets (iron ore); steel mill products
distribution; the management of mineral resources; the management
and development of real estate; and engineering and consulting
services and, through U. S. Steel Kosice (USSK) in the Slovak
Republic, in the production and sale of steel mill products and
coke primarily for the central and western European markets. As
mentioned in Note 3, effective June 30, 2003, U. S. Steel is no
longer involved in the production and sale of coal.

On May 20, 2003, U. S. Steel acquired substantially all the
integrated steelmaking assets of National Steel Corporation
(National). The aggregate purchase price was $1,357 million,
consisting of $817 million in cash and the assumption or
recognition of $540 million in liabilities. The $817 million in
cash reflects $844 million paid to National at closing and
transaction costs of $28 million, less an estimated working
capital adjustment of $55 million in accordance with the terms of
the Asset Purchase Agreement. The $55 million working capital
adjustment has been calculated and submitted to National and U. S.
Steel has recorded a receivable for this amount. Results of
operations for the second quarter and six months ended June 30,
2003, include the operations of National from May 20, 2003.

On June 30, 2003, U. S. Steel completed the sale of the mines and
related assets of U. S. Steel Mining Company, LLC to a newly
formed company, PinnOak Resources, LLC, which is not affiliated
with U. S. Steel. The gross proceeds from the sale are estimated
to be $57 million which resulted in a pretax gain of $13 million.
In addition, EITF 92-13, "Accounting for Estimated Payments in
Connection with the Coal Industry Retiree Health Benefit Act of
1992" requires that enterprises that no longer have operations in
the coal industry must account for their entire obligation related
to the multiemployer health care benefit plan created by the Act
as a loss in accordance with SFAS No. 5, "Accounting for
Contingencies." Accordingly, U. S. Steel recognized the present
value of these obligations in the amount of $85 million, resulting
in the recognition of an extraordinary loss of $52 million, net of
tax of $33 million.

                            *   *   *

As reported in Troubled Company Reporter's May 9, 2003 edition,
Standard & Poor's Ratings Services lowered its corporate credit
rating on integrated steel producer United States Steel Corp. to
'BB-' from 'BB' based on concerns about the firm's increased
financial risk.

Standard & Poor's said that it has removed its ratings on
Pittsburgh, Pennsylvania-based United States Steel from
CreditWatch, where they were placed with negative implications on
Jan. 9, 2003. The current outlook is negative. The company had
about $1.7 billion in lease-adjusted debt at March 31, 2003.

At the same time, Standard & Poor's said it has assigned its 'BB-'
rating to United States Steel Corp.'s proposed $350 million senior
notes due 2010.


USG CORP: Court Approves Scope Expansion of CIBC Engagement
-----------------------------------------------------------
U.S. Bankruptcy Court Judge Newsome authorizes the Futures
Representative, appointed in USG Corporation's bankruptcy
proceedings, to modify the terms of CIBC's employment as financial
advisor and investment banker.

Dean M. Trafelet, Esq., the legal representative for future
claimants, modified the terms of CIBC World Markets Corporation's
retention, to enlarge the scope of CIBC's retention so that the
firm may participate in the valuation process over the next three
months.

CIBC will provide these additional services to the Futures
Representative during the three-month period:

    (a) analyze and evaluate the Debtors' analysis of their
        businesses' current value;

    (b) comment on and critique the Debtors' analysis;

    (c) analyze and evaluate the analyses that may be propounded
        by other constituencies; and

    (d) propose an alternative analysis of the value of the
        Debtors' businesses.

The principal terms of the Amended Letter Agreement are:

    Term:  The Amended Letter Agreement has a term of three
           months commencing July 1, 2003 and ending on
           September 30, 2003.

    Fees:  As compensation for the Additional Services,
           CIBC proposes to charge the Debtors' estates a
           monthly fees of $145,000 for the three-month
           period.  Upon expiration of this period, the
           monthly fee shall be reduced to $25,000 in
           accordance with the Supplemental Retention
           Letter. (USG Bankruptcy News, Issue No. 51; Bankruptcy
           Creditors' Service, Inc., 609/392-0900)


VALEO INVESTMENT: S&P Lowers & Keeps Various Ratings on Watch
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
class A-2, A-3, B-1, B-2, and Preferred Share notes issued by
Valeo Investment Grade CDO III Ltd., an arbitrage CBO transaction
collateralized primarily by investment-grade bonds and managed by
Deerfield Capital Management LLC. At the same time, the 'AAA'
rating assigned to the class A-1 notes is affirmed based on a
financial guarantee insurance policy issued by Financial Security
Assurance Inc.

The lowered ratings reflect factors that have negatively affected
the credit enhancement available to support the notes since the
transaction was originated in December 2001. These factors
primarily include a negative migration in the overall credit
quality of the assets within the collateral pool.

The credit quality of the collateral pool has deteriorated since
the previous rating action (Feb. 28, 2003). Currently, 8.60% of
the performing assets in the collateral pool come from obligors
whose ratings are on CreditWatch with negative implications, and
34.80% of the performing assets come from obligors with non-
investment-grade ratings (ratings below 'BBB-'). According to the
most recent analysis performed, the current
collateral pool holds $31.17 million from obligors currently rated
'D' by Standard & Poor's (based on the July 1, 2003 portfolio). At
the time of the previous rating action, the percentage of obligors
whose ratings were on CreditWatch negative was 14.7%, and the
percentage of the performing assets that came from obligors with
non-investment-grade ratings was 28.01%. In addition, the
transaction is not in compliance with Standard & Poor's CDO
Monitor Test, a measure of the amount of credit quality in the
current portfolio to support the ratings assigned to the
liabilities.

As per the most recent trustee report, dated July 1, 2003, the
senior class A overcollateralization ratio (class A-1 and A-2), at
105.67%, remains above its required minimum ratio of 102.4%. This
compares with an initial senior class A overcollateralization
ratio of 106.37%. The subordinate class A overcollateralization
ratio (class A-3), at 104.56%, remains above its required minimum
ratio of 102.3%. This compares with an initial subordinate class A
overcollateralization ratio of 105.25%. The class B
overcollateralization ratio, at 102.40%, also remains above its
required minimum ratio of 101.10%. This compares with an initial
class B overcollateralization ratio of 103.08%.

In addition, the rated overcollateralization ratio, a measure of
the effective overcollateralization supporting a given tranche at
a given rating level, was as follows before and after the rating
action:

                  ROC                       ROC
     Class        Prior to Action           Following Action
     A-2          99.62% (A/Watch Neg)      101.02% (BBB+)
     A-3          100.01% (BBB+/Watch Neg)  101.72% (BBB-)
     B-1          100.43% (BB+/Watch Neg)   101.16% (BB)
     B-2          100.43% (BB+/Watch Neg)   101.16% (BB)
     Pref.Shares  100.92% (B+/Watch Neg)    102.00% (B-)

Standard & Poor's has reviewed the results of the current cash
flow runs generated for Valeo Investment Grade CDO III 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. After the results of these
cash flow runs were compared with the projected default
performance of the performing assets in the collateral pool, it
was determined that the ratings currently assigned to the notes
were no longer consistent with the amount of credit enhancement
available, resulting in the lowered ratings.

Standard & Poor's will continue to monitor the performance of the
transaction to ensure that the ratings reflect the amount of
credit enhancement available.

         RATINGS LOWERED AND REMOVED FROM CREDITWATCH

             Valeo Investment Grade CDO III Ltd.

                      Rating
     Class          To      From               Balance ($ mil.)
     A-2            BBB+    A/Watch Neg                  30.00
     A-3            BBB-    BBB+/Watch Neg                5.00
     B-1            BB      BB+/Watch Neg                 5.00
     B-2            BB      BB+/Watch Neg                 5.00
     Pref. shares   B-      B+/Watch Neg                 18.00

                       RATING AFFIRMED

             Valeo Investment Grade CDO III Ltd.

          Class     Rat7ing      Balance ($ mil.)
          A-1       AAA                  440.00


VENTAS INC: Files SEC Form 8-K to Comply with SFAS 145
------------------------------------------------------
As previously announced, Ventas, Inc. (NYSE:VTR) filed a current
report on Form 8-K re-issuing in an updated format its historical
financial statements in connection with its adoption of SFAS 145,
"Rescission of FASB Statements No. 4, 44, and 64, Amendment of
FASB 13, and Technical Corrections," which was adopted by the
Company in 2003, as required by accounting principles generally
accepted in the United States.

This reclassification does not change the Company's net income or
normalized Funds From Operations for any period and only affects
the presentation of results for the prior periods by conforming
the presentation of those prior financial statements to the format
adopted in 2003.

In a separate filing, the Company today filed a registration
statement that will technically amend its existing universal shelf
registration statement. Today's registration statement provides
that any debt securities offered under the shelf registration
statement will be issued by the Company's operating partnership,
Ventas Realty, Limited Partnership (and not by Ventas, Inc.).
Today's registration statement contains no other significant
changes and does not increase the total amount of securities that
may be offered by the Company.

Wednesday's registration statement was filed with the Securities
and Exchange Commission, but has not yet become effective. The
securities registered under Wednesday's registration statement may
not be sold nor may offers to buy be accepted prior to the time
the registration statement becomes effective. This Press Release
shall not constitute an offer to sell or the solicitation of an
offer to buy nor shall there be any sale of such securities in any
state in which such offer, solicitation or sale would be unlawful
prior to the registration or qualification under the securities
laws of any such state.

Ventas, Inc. is a healthcare real estate investment trust that
owns 44 hospitals, 204 nursing facilities and nine other
healthcare and senior housing facilities in 37 states. The Company
also has investments in 25 additional healthcare and senior
housing facilities. More information about Ventas can be found on
its Web site at http://www.ventasreit.com

At June 30, 2003, the Company's balance sheet shows a total
shareholders' equity deficit of about $47 million.


VERTICAL COMPUTER: External Auditors Air Going Concern Doubt
------------------------------------------------------------
At December 31, 2002, Vertical Computer Systems Inc.'s independent
auditors' report, dated May 27, 2003, includes an explanatory
paragraph related to substantial doubt as to the Company's ability
to continue as a going concern.  The Company experienced
significant operating loss in 2002 and 2001, each quarter of 2002
and 2001.  Its cash and cash equivalents have not been sufficient
to cover its debt obligations and it has defaulted most of its
notes payable at December 31, 2002 and 2001.

Management's current business plan is to concentrate on developing
and marketing the products of two of its  subsidiaries, Now
Solutions, LLC a 60% owned subsidiary, and Government Internet
Systems, Inc. a 89% owned subsidiary.  The Company  believes that
each of these business units has distinct marketing advantages for
their niche markets.  The current strategy of Government Internet
Systems is to raise financing to develop and market its products
as wells as to focus its efforts on the government sector by
cross-marketing ResponseFlash, an emergency response
communications web-based system, to the Company's existing client
base of its partners, affiliates, and subsidiaries. Now Solutions,
LLC is a best-of-breed human resources and payroll software and
business solutions provider.   Now Solutions' new web based
software,   emPath 6.2 is being aggressively marketed in North
America and it intends to hire additional software programmers to
improve the product and to hire additional sales people to
increase market penetration in the United States.  The Company
also plans to find national marketers, such as Defense Solutions,
LLC, and international resellers such as Infotec in Japan, who can
commercially exploit the Company's products in respective niche
markets.  By utilizing the strategic  elements each individual
business unit offers, the Company plans to leverage each other's
strengths in their segments, as well as to exploit the network of
customers, vendors, and support agencies that the Company has
built. There is no assurance that the Company will achieve the
expected results.

The Company also is also seeking the disbursement of funds
authorized under Now Solutions' operating agreement as well as
finding sources of financing for Vertical Computer Systems and its
subsidiaries.  Other than the Equity Line of Credit   and a
potential loan from a third party whereby the lender might loan
the Company $260,000, the Company does not have any commitments
for funding. The Company's ability to continue as a going concern
is dependent on its ability to raise additional funds and to
establish profitable operations.  The Company's inability to raise
such funds will significantly jeopardize its ability to continue
operations.  The Company's primary need for cash is to fund its
ongoing operations  until such time that the sale of its products
and services generate enough revenue to fund operations. The
ability of the Company to meet these needs is uncertain.


VERTICALNET INC: June 30 Balance Sheet Upside-Down by $438,000
--------------------------------------------------------------
Verticalnet, Inc. (Nasdaq: VERT), a leading provider of Strategic
Sourcing and Supply Management solutions, announced results for
its second fiscal quarter and the closing of a private placement
of the Company's common stock.

                         Financial Results

Revenues for the quarter ended June 30, 2003 were $2.2 million,
compared to $6.2 million for the quarter ended June 30, 2002.
Revenues from Converge, Inc. were $0.1 million and $4.3 million
for the second quarters of 2003 and 2002, respectively. As
previously announced, Verticalnet and Converge amended their
subscription license agreement resulting in the termination of
obligations to Converge, and the recognition of $19.6 million in
previously deferred revenues during the fourth quarter of 2002
that otherwise would have been recognized pro-rata over the
subsequent five quarters.

Loss from continuing operations for the quarter ended June 30,
2003 was $1.2 million, compared to a loss of $9.9 million for the
quarter ended June 30, 2002.

Verticalnet's net loss attributable to common shareholders for the
quarter ended June 30, 2003 was $1.2 million, compared to net
income attributable to common shareholders of $90.1 million for
the quarter ended June 30, 2002. The principal difference between
loss from continuing operations and net income attributable to
common shareholders for the quarter ended June 30, 2002 was a
$101.0 million benefit associated with the repurchase of the
Company's Series A convertible redeemable preferred stock. This
benefit is excluded for the purposes of calculating the 2002
diluted loss per common share.

As of June 30, 2003, Verticalnet reported cash and cash
equivalents of $5.6 million, compared to $6.1 million as of
March 31, 2003.

Verticalnet, Inc.'s June 30, 2003 balance sheet shows a total
shareholders' equity deficit of about $438,000.

The Company reiterated its revenue guidance for 2003. For the full
year ending December 31, 2003, Verticalnet expects revenue to be
in the range of $10.0 to $11.0 million. The Company's forward-
looking guidance may be impacted by various economic and other
factors.

                 Private Placement Transaction

Verticalnet today announced that it had completed a private
placement with several institutional investors. In the private
placement transaction, Verticalnet sold 1,140,000 shares of common
stock for $1.1 million ($0.9 million of net proceeds). The
institutional investors will also receive warrants to purchase
456,000 shares of common stock at $1.20 per share. The funds will
be used for general corporate purposes and to increase the
Company's liquidity and financial flexibility.

The shares of common stock have not been registered under the
Securities Act of 1933 and may not be subsequently offered or sold
by the investors absent registration or an applicable exemption
from the registration requirements. Verticalnet has agreed to file
a registration statement covering the resale of the common stock
by the investors.

                          Recent Events

The private placement announced and the previously announced debt
repurchase have materially affected the Company's balance sheet.
On July 30, 2003 the Company announced the repurchase of $6.4
million, or approximately 90%, of its outstanding long-term debt
obligations in exchange for cash, common stock, and change of
control warrants. On a pro forma basis, giving effect to these
transactions as if they occurred on June 30, 2003, Verticalnet
reduced its long-term debt to $0.7 million and increased its
shareholders' equity to $5.6 million. A condensed pro forma
balance sheet is included in the accompanying tables.

"We are pleased with the progress we have made to date in reducing
our operating expenses and restructuring our balance sheet," said
Gene S. Godick, Verticalnet Executive Vice President and CFO. "The
private placement announced today is another step in our ongoing
financial repositioning. We will continue to seek out
opportunities to further improve our liquidity and overall
financial position."

Since the end of the second quarter, Verticalnet has also
announced the successful resolution of its appeal to the Nasdaq
Listing Qualifications Hearing Panel, as well as the election of
Vincent J. Milano and Gregory G. Schott to Verticalnet's Board of
Directors and Audit Committee. "We have further improved our
financial position and have brought additional software and
financial expertise to our Board," said Nathanael V. Lentz,
president and CEO of Verticalnet. "On the operational front, we
continue to see increasing market interest in our Spend Analysis
and Supply Management solutions, and are excited about the
upcoming release of our Supply Management 5.0 product suite and
related go to market activities. We believe that the actions taken
in recent months better position us for growth in the Supply
Management solutions sector."

Verticalnet (Nasdaq: VERT) is a leading provider of Strategic
Sourcing and Supply Management solutions that enable companies to
identify, negotiate, realize, and sustain savings and supply base
performance improvement. Supply Management is more than merely
reducing prices - requiring companies to balance price,
performance, and risk to achieve the lowest total cost of
ownership. Led by our Spend Analysis solution that quickly
provides companies with insight into enterprise-wide spending,
Verticalnet's full suite of Supply Management solutions enables
companies to achieve lower prices, improved contract compliance,
better supplier service, and shorter sourcing cycles. As a result,
our clients recognize significant and sustainable savings in
materials costs, inventory levels, and administrative costs -
resulting in improved profitability. For more information about
Verticalnet, please visit http://www.verticalnet.com


WASATCH CREST: S&P Assigns R Financial Strength Rating
------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'R' financial
strength rating to Wasatch Crest Mutual Insurance Co. after the
Utah Department of Insurance was given authorization to move
forward with liquidation of the company's assets.

"Third District Judge Timothy Hanson authorized the move just a
few weeks after the state seized control of the West Valley City,
Utah-based workers' compensation provider," explained Standard &
Poor's credit analyst William K. McGrath. "Insurance department
officials stated that the company failed to keep adequate reserves
to ensure payment of policyholders' claims."

Wasatch's primary lines of business are workers' compensation and
automobile and health insurance. Although the company failed to
keep minimum financial requirements set forth by the state, it is
believed to have enough funding to cover existing claims.

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


WEIRTON STEEL: Wants to Implement Key Employee Retention Program
----------------------------------------------------------------
Weirton Steel Corporation asks the Court to approve and authorize
the implementation of a key employee retention program.

James H. Joseph, Esq., at McGuireWoods LLP, in Pittsburgh,
Pennsylvania, contends that without the prompt implementation of
a comprehensive retention program, the Debtor stands to lose one
of its most valuable resources -- its well trained and
experienced senior management, who, as a collective group,
possesses skills and experience readily transferable to
competitors or to entirely distinct and separate industries.  As
a matter of fact, Mr. Joseph adds, participants in the proposed
Retention Program have announced their intention to leave the
Debtor's employment, or have advised senior management regarding
their active search for alternative employment.

Understandably, Mr. Joseph relates, many employees are looking
elsewhere for employment due to the experiences of others in many
of the restructurings of integrated steel producers over the past
several years, not to mention recent changes the Debtor
implemented.  For instance, as part of its cost-reduction program
in mid-June 2003, the Debtor obtained the Court's authority to
reduce its salaried workforce by approximately 15% to insure
compliance with EBIDAR covenants under its DIP financing
facility.  In addition, in July 2003, the Debtor implemented a
program affecting all salaried employees, requiring these
employees to participate in the cost of Weirton's healthcare
insurance premiums, at $200 per employee per month.

Before the Petition Date, salaried employees were required to
reduce their annual salaries by 5% of their then current salary
level as part of the Debtor's out-of-court restructuring and
cost-cutting efforts.  Although implementation of the June 2003
staff reduction program saved considerable expense, the trimmed
depth of the Debtor's management ranks left the Debtor
dangerously vulnerable to any further loss of key management
personnel.  These and other developments have resulted in
substantial anxiety within the Debtor's salaried workforce.  The
departure of more key managers or salaried personnel will
seriously erode Weirton's ability to manage essential aspects of
its operations.

According to Mr. Joseph, many members of the Debtor's management
team possess extensive institutional knowledge and know-how
regarding its operations and processes, its customers and
workforce.  All of the members of Weirton's senior management
team are seasoned professionals who will be at best able to guide
Weirton through a successful reorganization.  On the point that
several members are relatively new to Weirton, Mr. Joseph states
that these employees bring fresh insights and approaches they
gained in their experience with other companies.

Furthermore, Mr. Joseph points out that with the Debtor's
precarious financial position, it will be virtually impossible to
replace key members of management who may leave in the absence of
the Retention Program.  In fact, the efforts needed to attract
competent new employees to fill vacated positions, aside from
disruption in work performance, is prohibitively time-consuming
and costly as:

   -- executive search firms needed to find qualified key
      personnel, with fees typically averaging 30% to 35% of
      first-year compensation;

   -- signing bonuses and other incentives, including retention
      agreements, to convince promising candidates to accept
      employment with Weirton; and

   -- new employee relocation expenses, including moving costs,
      temporary housing, and indemnification for brokers' fees
      and losses on sale of a residence.

Mr. Joseph tells the Court that the Debtor relied on Buck
Consultants, the Company's human resources consultant and a
leading international compensation and benefits consulting firm,
in the course of formulating a comprehensive and effective
incentive and retention program.  Buck, in turn, consulted Mark
Kaplan, the Debtor's current Chief Financial Officer, and then
with the Compensation Committee of the Debtor's Board of
Directors.

A draft retention program was submitted to the Compensation
Committee of the Company, which deliberated and provided comments
and input in the Retention Program Buck developed.  Mr. Joseph
notes that the Retention Program has been reviewed and consented
to by the Debtor's Postpetition Lenders.  The Retention Program
was also reviewed by the Executive Committee to the Creditors'
Committee and the Independent Steelworkers Union.  Many of the
comments provided by parties-in-interest are addressed in the
proposed Retention Program.

Mr. Joseph explains that the Retention Program is designed to
carefully balance the Debtor's need to retain talented management
against the concessions that they will likely seek from creditors
and parties-in-interest in order to successfully reorganize.
Accordingly, the consideration proposed under the Stay Bonus Plan
is 11% of market median, substantially below market for
comparable companies subject to Chapter 11 proceedings.

"The need to implement an employee retention program is acute,"
Mr. Joseph emphasizes.  The Retention Program proposed by the
Debtor has been formulated after careful evaluation of the
positive and negative implications of instituting a retention
program.

The Retention Program is comprised of three separate plans:

A. The Stay Bonus Plan

   The Stay Bonus Plan is designed to retain key management
   personnel and critical skill employees during the pendency of
   Weirton's Chapter 11 case.  The Stay Bonus Plan includes nine
   individuals divided into three tiers.

   An employee in the Stay Bonus Plan will be eligible for a
   total stay bonus payment ranging from 45% to 50% of his
   current base salary.  The Stay Bonus Payment will be earned
   in four installments:

   -- 25% paid upon Court approval of the Retention Program;

   -- 25% paid on the sixth-month anniversary of the Retention
      Program;

   -- 25% paid on the 12th-month anniversary of [Weirton's
      Petition Date]; and

   -- 25% paid upon confirmation of the Debtor's
      Reorganization Plan.

   The entire unearned and unpaid portion of each covered
   employee's Stay Bonus Payment will be earned and is payable
   on the earlier to occur of the effective date of a confirmed
   Chapter 11 Plan or the closing of a sale of all or
   substantially all of the Debtor's assets.  The right of each
   covered employee to receive each installment of the Stay Bonus
   Payment will be based solely on the employee's continued
   employment with the Debtor as of the date each Stay Bonus
   Payment installment vests and becomes payable on the
   applicable Payment Date, Plan Effective Date, or Sale Closing
   Date, as the case may be.

   In the event of an employee's death, disability, termination
   for cause, or voluntary resignation, the employee will forfeit
   any remaining or unpaid Stay Bonus Payment.  Any covered
   employee who is involuntarily terminated, not for cause, prior
   to any specified Payment Date and prior to a Plan Effective
   Date and a Sale Closing Date will receive a pro rata payout of
   his Stay Bonus Payment for the portion of the stay period
   during which the employee was employed.  Employees who are not
   employed by Weirton at the time the Court approves the
   Retention Plan will be entitled to payments under the Stay
   Bonus Plan on a pro rata basis at the management's sole
   discretion.

   The estimated maximum amount of Stay Bonus Payments for a base
   of nine key employees is $666,000, or an average of $74,000
   per eligible individual.

   The Stay Bonus Plan will substitute and supersede any
   prepetition retention benefits that otherwise would be
   applicable to any of the Debtor's key employees pursuant to
   contract or otherwise.  All employees participating in the
   Stay Bonus Plan must, by written waiver and release, forfeit
   any rights or entitlements with respect to retention-type
   benefits that the employee may have at law or under any prior
   employment or retention agreements, or Company programs.

B. Severance Plan

   Before the Petition Date, the Debtor did not have an
   established severance program for salaried employees.
   Instead, severance was contractually provided to several key
   employees pursuant to employment agreements in existence as
   of the Petition Date.

   Under the Severance Plan, the nine key employees will be
   entitled to payment of severance benefits ranging from six to
   24 months of their base salary, plus the cost of current
   health benefits for the duration of the severance period.

   The Severance Plan provides for severance benefits only to:

   (a) those key employees who are involuntarily terminated
       without cause by the Debtor in connection with a Plan of
       Reorganization or a sale of all or substantially all of
       the Debtor's assets; and

   (b) those key employees who voluntarily terminate employment
       with the Debtor because they decline to accept an
       employment offer from the Reorganized Debtor in connection
       with a Plan or a purchaser in connection with a Sale where
       the employment offer is either at a different location or
       provides for salary and benefits that are not at least
       substantially similar to the employee's terms of
       employment with the Debtor.

   Severance benefits also include these additional limitations:

   (a) severance is calculated on base salary only;

   (b) there is no mitigation of cash benefits;

   (c) cash severance benefits to be paid as a lump sum; and

   (d) cost of current health benefits to be paid for period
       equal to severance period, subject to mitigation.

   Employees who voluntarily terminate employment with the Debtor
   will not be entitled to severance benefits.  Employees who are
   involuntarily terminated pursuant to a divestiture of the
   Company will be entitled to a single lump sum payment if not
   retained by the new organization on the transition date
   associated with the divestiture.  The maximum cost of the
   Severance Program will be $1,582,000.

C. CEO Discretionary Fund

   Weirton will establish a CEO Discretionary Pool of $625,000
   for use, in the sole discretion of the Debtor's CEO, to retain
   selected individuals not otherwise covered by the Stay Bonus
   Plan or for any unforeseen retention needs that may arise
   during the restructuring period.

Mr. Joseph clarifies that all payments due under the Retention
Program will be deemed to be administrative priority expenses
pursuant to Section 503 of the Bankruptcy Code.

Mr. Joseph argues that the proposed Retention Program is fair and
reasonable given that:

   (a) The Debtor's key management and other skilled salaried
       employees are essential to its prospects for a successful
       reorganization;

   (b) Without the compensation and assurances provided by the
       Retention Program, the Debtor's employees cannot
       reasonably be expected to remain with the Company if
       other career opportunities are available, nor can they be
       expected to refrain from searching for alternative
       employment when they are aware that their own jobs may be
       lost at any time during the reorganization;

   (c) The value of employees' compensation packages has eroded;

   (d) Performance-based bonuses have not been paid in the past
       three years;

   (e) The estimated cost to be incurred for proposed severance
       payments is significantly less than the cost of unwanted
       attrition and is well within the range of costs incurred
       for similar benefits by comparable Chapter 11 debtors;

   (f) The Retention Program is necessary to preserve and
       enhance the value of the Debtor's bankruptcy estate and
       to ensure a maximum recovery by creditors; and

   (g) Fleet Bank, as agent to Weirton's prepetition revolving
       credit bank group and postpetition debtor-in-possession
       lending group, supports the Retention Program. (Weirton
Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


WESTAR FINANCIAL: Settles Claims Dispute with Bank One NA
---------------------------------------------------------
Westar Financial Services Incorporated (OTC:WEST.PK), on behalf of
its bankruptcy estate, creditors and shareholders, and Bank One,
NA (NYSE:ONE) have agreed, subject to approval by the United
States Bankruptcy Court for the Western District of Washington, to
settle their mutual claims contained in the pending litigation
Bank One v. Westar Financial Services Incorporated, et. al., Case
Nos. C01-5690FDB and C02-001FDB in the United States District
Court for the Western District of Washington.

The proposed settlement involves each of the parties receiving a
portion of available insurance proceeds and exchanging mutual
releases, as well as the exchange of releases between Westar, and
its estate, on behalf of its creditors and shareholders, and
Westar's insurers and officers and directors. The Westar Official
Unsecured Creditors Committee supports the proposed settlement.

The hearing on approval of the settlement is scheduled for 9:30
a.m. on August 25, 2003 at United States Bankruptcy Court, Western
District of Washington, Courtroom 1, 1717 Pacific Avenue, Tacoma,
Washington. Westar has filed a motion containing the details of
the proposed settlement with the Bankruptcy Court. It filed
Chapter 11 in December 2001, In re Westar Financial Services,
Incorporated, Case No. 01-52195-PHB, and the proposed settlement
will allow Westar to submit a Plan of Liquidation in the near
future.


WESTPOINT STEVENS: Intends to Assume Five Alabama Gas Contracts
---------------------------------------------------------------
WestPoint Stevens Inc., and its debtor-affiliates currently
operate seven plant sites in the state of Alabama, which purchase
natural gas from Alabama Gas Corporation.  Before the Petition
Date, and in the ordinary course of their business operations, the
Debtors entered into contracts with Alagasco on behalf of each of
the Plants.  Each of the Plants is supplied with natural gas
through four separate contracts between the Debtors and Alagasco
that pertain solely to each of the individual Plants, as well as a
fifth contract which applies generally to all of the Plants.  The
Contracts are executory in nature and govern the procurement and
delivery of natural gas by Alagasco, as well as the related
pricing and payment terms.

John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP, tells the
Court that the pricing terms under the Contracts are favorable to
the Debtors.  The Contracts provide rates that are, in most
instances, more favorable than the standard non-contract
published tariffs established by the Alabama Public Service
Commission for natural gas furnished to Alagasco's other
commercial and industrial customers.  The Debtors estimate that
for 2003, the savings to the Debtors under the Contracts versus
the amounts they would have to pay if they were subject to the
APSC's standard non-contract published tariff rates is $495,000
per month.

Mr. Rapisardi relates that the services provided under the
Contracts satisfy all of the Debtors' needs for natural gas at
the Plants.  The terms and services of the Contracts are:

   (a) Contract for Gas Service -- provides for the sale of
       natural gas to the Debtors at Alagasco's tariff sales
       rates.  It generally applies to natural gas not purchased
       under one or more of the following supplementary
       agreements.  These contracts run on a year-to-year basis
       and are automatically renewable absent notice of at least
       60 days before the contract anniversary.

   (b) Basic Transportation Services -- provides basic
       transportation service on Alagasco's system at Alagasco's
       tariff transportation rates.  It generally applies to
       transportation not provided under a Special Service
       Agreement.  These contracts run on a month-to-month basis
       and are terminable by 30 days' notice to the counterparty.

   (c) Special Service Agreement -- provides for transportation
       service on the Alagasco system at a reduced cost.  Each of
       the Service Agreements runs for a five-year term except
       for the Debtors' finishing plant in Village, Alabama,
       which runs for 10 years from the effective date.  Three of
       the contracts expire on September 30, 2003, with the
       remaining contracts expiring on August 31, 2005,
       September 30, 2005, January 31, 2006, and October 31,
       2012.  Each of the Service Agreements is automatically
       renewable on a year-to-year basis, absent notice of
       termination at least 180 days before the end of the term.

   (d) Pipeline Transportation Services Agreement -- authorizes
       Alagasco to act as agent for the Debtors to arrange
       interstate pipeline transportation of natural gas
       purchased under an Agency Agreement.  Each of these
       contracts run from year to year until terminated by either
       party on notice of not less than 30 days from the end of
       the term.

The Debtors' Plants are:

1. The Opelika Finishing Plant in Opelika, Alabama;

2. The Lanett Greige Plant in Lanett, Alabama; and

3. The Fairfax Greige Plant, the Fairfax Finishing Plant, the
   Fairview Plant, the Lanier Plant, and the Carter Plant in
   Valley, Alabama.

Additionally, the Debtors are party to The Agency Agreement for
Interstate Gas Customers with Alagasco.  The Agency Agreement
provides for Alagasco to serve as agent for the Debtors for the
limited purposes of:

     (i) purchasing natural gas on the Debtors' behalf;

    (ii) arranging for the transportation of natural gas to
         delivery points on Alagasco's distribution system; and

   (iii) entering into agreements on the Debtors' behalf to
         effectuate the purchase and transportation of natural
         gas.

By using Alagasco as its agent for the purchase and
transportation of natural gas, Mr. Rapisardi says, the Debtors
enjoy the bargaining power of Alagasco's position in the
marketplace, resulting in significantly reduced prices and rates.

The Agency Agreement does not have an expiration date, but
instead continues until one party serves notice of termination on
the other.  The Agency Agreement is incorporated by reference in
each of the individual Service Agreements.

Pursuant to the Agency Agreement, Alagasco may, at any time and
at its sole discretion, elect to cease exercising its authority
as agent.  If Alagasco were to elect not to act as agent under
the Agency Agreement, the Debtors would be forced to procure
natural gas on their own behalf, incurring significant costs and
forfeiting the advantageous rates which Alagasco is able to
command due to its significant presence in the industry.

Under the Agency Agreement, and at any given time, Alagasco
purchases natural gas on the Debtors' behalf for which it has not
yet been paid.  Prior to the Petition Date, Mr. Rapisardi informs
the Court that the Debtors paid Alagasco on or around the 15th
day of each month for the natural gas purchased and services
rendered during the previous month.  Consequently, by each
payment date, Alagasco is typically owed amounts equal to one-
and-a-half months' worth of natural gas that it purchases on the
Debtors' behalf.  The Debtors estimate that over the previous 12
months, the average amount due Alagasco is $740,000 per month,
the bulk of which is attributable to the payment for natural gas
purchases made under the Agency Agreement.

Aside from its unilateral right to cease exercising its authority
as agent under the Agency Agreement, Rule 8 of the ASPC General
Rules Applying to Public Electric, Gas and Water Utilities in the
State of Alabama allows Alagasco to demand a security deposit
equal to the amount of estimated bills for two regular billing
periods.  Consistent with those rights, by letter dated July 1,
2003, Alagasco informed the Debtors of its election to cease
performance under the Agency Agreement, and demanded a $2,566,117
security deposit.

Because the Alagasco Contracts provide favorable rates to the
Debtors for purchasing and receiving natural gas, the Debtors
want to assume them.  The Debtors believe that the Contracts will
continue to provide substantial cost savings to their estates.

The Debtors engaged in extensive, arm's-length negotiations with
Alagasco.  Subsequently, the parties reached an agreement
pursuant to which Alagasco would continue acting as agent under
the Agency Agreement, and would waive its demand for a security
deposit under Section 366 of the Bankruptcy Code, in exchange for
the Debtors' agreement to assume the Contracts and make semi-
monthly prepayments, with monthly true-ups for all payments and
charges actually accrued.

Alagasco will retain its rights as they exist under the Agency
Agreement.  However, Alagasco agreed that any election to cease
acting as agent under the Agency Agreement would be made in good
faith and in a commercially reasonable manner.  Alagasco also
acknowledges that in the event it does make an election, the
Debtors may cease making prepayments.  Furthermore, during the
pendency of these Chapter 11 cases, if Alagasco elects to
exercise its authority to cease acting as agent under the Agency
Agreement, and the Debtors believe that such election was made in
bad faith and arbitrarily, then the Debtors may seek a Court
order directing return of any cure payment made to Alagasco upon
a finding by the Court that Alagasco's election was made in bad
faith or arbitrarily.

Mr. Rapisardi reports that the Debtors have an excellent history
with respect to the payment obligations under the Alagasco
Contracts.  However, due to the interruption caused by the filing
for Chapter 11 petition, the Debtors have missed one payment
cycle under the Contracts.  Mr. Rapisardi maintains that the
Debtors will make a $432,164 cure payment for the outstanding
prepetition amount, which is equal to less than one month's
average usage based on the previous 12 months.  This cure payment
will be more than offset by the $495,000 estimated savings per
month realized under the Agency Agreement.

By this motion, the Debtors seek the Court's authority to assume
the Alagasco Contracts. (WestPoint Bankruptcy News, Issue No. 6;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


WILSHIRE CREDIT: Fitch Takes Rating Actions on Two Issues
---------------------------------------------------------
Fitch Ratings has taken rating actions on the following two
Wilshire Credit Corporation issues:

Series 1998-WFC2

     -- Class A-IO affirmed at 'AAA';
     -- Class M-1 affirmed at 'AAA';
     -- Class M-2 affirmed at 'AAA';
     -- Class M-3 affirmed at 'AAA';
     -- Class B-1 affirmed at 'BB+';
     -- Class B-2 affirmed at 'B'.

Series 1998-3

     -- Class A-3, A-4 affirmed at 'AAA';
     -- Class M-1 upgraded to 'AAA' from 'AA';
     -- Class M-2 upgraded to 'AA' from 'A';
     -- Class M-3 upgraded to 'A' from 'BBB';
     -- Class B affirmed at 'BB'.

The upgrades reflect an increase in credit enhancement relative to
future loss expectations and the affirmations on the above classes
reflect credit enhancement consistent with future loss
expectations.


WORLDCOM INC: Names Richard Roscitt President and COO
-----------------------------------------------------
MCI (WCOEQ, MCWEQ) announced the appointment of Richard R. Roscitt
as its president and chief operating officer, reporting to
chairman and CEO Michael Capellas. Roscitt brings more than 30
years of telecommunications experience to MCI, having served as
chairman and CEO of ADC, president of AT&T Business Services and
president and CEO of AT&T Solutions. Roscitt will oversee MCI's
core operating units and will be based in the company's corporate
headquarters in Ashburn, Va.

"Rick is uniquely qualified for the position of president and COO
and he will be a valuable addition to the MCI management team,"
said Capellas. "His experience is marked by a track record of
success in creating business growth and technological innovation.
I am confident that Rick's leadership, energy and telecom
experience will serve MCI well as we emerge from Chapter 11. He
knows our customers and our business and will immediately fit with
MCI's new culture - one focused on customer service, innovation
and integrity."

Roscitt, who officially starts on September 1, 2003, is the most
recent addition to MCI's new management team. Since Michael
Capellas joined the company seven months ago, MCI has been
actively rebuilding its management team and its board of
directors.

Roscitt joins the following newly-appointed MCI executives:

     * Robert Blakely, EVP & Chief Financial Officer

     * Anastasia Kelly, EVP & General Counsel

     * Daniel Casaccia, EVP of Human Resources

     * Grace Chen Trent, SVP & Chief of Staff

Roscitt most recently served as ADC's chairman and CEO since 2001.
He has been credited with transforming ADC into a company focused
on key product and service offerings for the broadband sector.

Prior to joining ADC, Roscitt spent 28 years with AT&T, rising to
President of AT&T Business Services, where he was responsible for
all of the company's business markets operations, including AT&T
Solutions, Business Services Sales, Business Services Operations,
AT&T Data and Internet Services, and AT&T Global Network Services.

"Having competed against MCI, I have a tremendous amount of
respect for the company, its management team, its capabilities and
the spirit and determination of its 55,000 employees," said
Roscitt. "I've been impressed that customers continue to remain
loyal to MCI, which speaks volumes about the company's unrelenting
focus on quality of service, customer support and superior network
performance. I have every confidence that MCI has a bright future
and look forward to working with a group of people I have long
admired in the marketplace."

Roscitt is currently a member of the Board of Directors of the
Telecommunications Industry Association (TIA), the leading U.S.
nonprofit trade association representing the communications and
information technology industries, and is a Member of the
Associates Committee of the National Cable and Telecommunications
Association (NCTA). He is a CEO member of The Technology Network
(TechNet), a nationwide network of senior executives who work to
build bipartisan support for policies that strengthen America's
leadership in the New Economy. Additionally, he serves on the
Board of Directors of Tell Me Networks, the Mountain View, Calif.-
based voice recognition company.

Roscitt received a Bachelor of Engineering Degree from Stevens
Institute of Technology and earned an MBA in Management from the
Sloan School of MIT. He is a member of the Board of Trustees of
Stevens, one of the oldest and most admired Engineering and
Science universities in the world.

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 the number of 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: Wants Approval to Assume Amended Trapelo Lease
------------------------------------------------------------
Worldcom Inc., and its debtor-affiliates lease from Boston
Properties Limited Partnership 39,439 square feet of space on the
second floor of the building known as and numbered Reservoir Place
I located at 1601 Trapelo Road in Waltham, Massachusetts.  The
Trapelo Lease commenced on August 15, 2000 and is due to expire by
its terms on August 14, 2006.  The Trapelo Lease provides for
$131,463 in monthly rental obligations plus operating expenses.
Prior to the Petition Date, the Reservoir Premises served as the
Debtors' administrative location in the suburban Boston area for
housing sales and small business sales.

As part of their lease review program, the Debtors determined
that they do not need all of the space under the Trapelo Lease in
their ongoing business operations.  The Debtors also found that
the rental rate payable under the Trapelo Lease was above the
market rate.  Therefore, the Debtors and their real estate
professionals, Hilco Real Estate, LLC, engaged in discussions
with Boston Properties with respect to the renegotiation of the
Trapelo Lease on terms more favorable to the Debtors.  As a
result of such negotiations, the parties entered into an
amendment to the Lease.  The terms of the Amendment include,
among other things:

   a. Reduction of Leased Space: The square feet leased pursuant
      to the Trapelo Lease, as amended, will be reduced to
      15,360 square feet.

   b. Rent Reduction: The monthly rental obligation is decreased
      to $40,000, plus savings for operating expenses, taxes and
      significant restoration costs.

   c. New Termination Date: The Lease, as amended, will terminate
      by June 30, 2008 and contains two five-year renewal
      options.

   d. Broker Fee: The Debtors are obligated to pay Hilco a
      $98,329 fee.

The assumption of the Trapelo Lease is important.  According to
Adam P. Strochak, Esq., Weil, Gotshal & Manges LLP, Washington
D.C., the Reservoir Premises is the Debtors' only regional
housing and small business sales facility, and as such, it is
important to the Debtors' ongoing business operations and their
reorganization efforts.  Mr. Strochak also notes that based on a
market analysis performed by Hilco, as a result of the
renegotiation of the Trapelo Lease, the annual rent payable will
reflect the fair market rental value of the Reservoir Premises
and the terms of the Trapelo Lease, as amended, are indeed
favorable to the Debtors.  The reduction of space leased comports
with the Debtors' business needs.  The reduced rent and reduced
size of the leased premises results in aggregate savings for the
Debtors approximating $3,660,000 over the remaining term of the
Trapelo Lease.  The Debtors will save $562,780 for 2003.  In
addition, the Debtors will save significant restoration costs
that they would incur in the absence of the Lease Amendment,
their operating expense and tax obligations will be lowered, and
the two renewal options ensure their right to occupy the premises
longer if they deem it beneficial.

Accordingly, the Debtors sought and obtained the Court's
permission to assume the Amended Lease. (Worldcom Bankruptcy News,
Issue No. 34; Bankruptcy Creditors' Service, Inc., 609/392-0900)


WRC MEDIA: Reports Slight Decline in Second Quarter Results
-----------------------------------------------------------
WRC Media (S&P, B+ Corporate Credit Rating, Negative) reports
second quarter results. The Company's consolidated second quarter
Operating Income down 9% but Adjusted EBITDA up 17.3% on revenue
of $43.5 million.

WRC Media's Adjusted EBITDA for the second quarter ended June 30,
2003 was $9.5 million, $1.4 million or 17.3% greater than the same
period last year on revenue of $43.5 million, which was $0.3
million or 0.7% lower than the same period in 2002. Martin E.
Kenney, Chief Executive Officer, commented, "Our profitability
measured in terms of operating income was down 9.0% resulting
primarily from $1.0 million of restructuring costs. However,
Adjusted EBITDA was up approximately 17.3% for the three months
ended June 30, 2003 primarily attributable to the lower operating
expenses excluding restructuring charges. Net revenue for the
second quarter of 2003 was slightly lower by 0.7% compared to the
same period in 2002 primarily driven by lower revenue at WRC's
library businesses resulting from library funding cutbacks. These
revenue declines were partially offset by higher revenue at the
Company's educational technology businesses which posted revenue
growth of 7.4% for the three months ended June 30, 2003 compared
to the same period in 2002."

Mr. Kenney continued, "The persistently sluggish U.S. economy has
affected nearly every market and segment of the education
industry. K-12 schools across the country have been plagued by
state and local budget shortfalls, which have in turn influenced
the bottom lines of supplemental education providers that serve
education institutions. As a result of the decline of state and
local budgets, a number of markets and segments within K-12 have
experienced negative growth. Though most large school districts
appear finally ready to comply with and benefit from Federal
dollars under the Federal No Child Left Behind Act, many still
remain confused by the law and its provisions requiring purchased
solutions to have scientific research supporting claims of
efficacy. As a result, we believe WRC will ultimately benefit from
NCLB as WRC has persuasive support for its research claims and has
the grant writing staff able to work with school and district
officials to procure this funding. Assessment and accountability
remain paramount themes, as do solutions that promote improved
decision-making by administrators. WRC continues to believe that
the winning solutions will link assessment and remediation as part
of an integrated solution. Professional development is also
clearly a priority for schools. In the second quarter, the
Company's educational technology unit created and sold a new
professional development offering which was the driver behind the
7.4% revenue growth that business posted."

Mr. Kenney concluded, "In summary, we believe that education
funding will improve on the federal side in the latter part of the
second half of this year as more and more schools understand and
take advantage of funding available under the NCLB. This source of
funding, however, will not be sufficient to offset cuts in state
and local education funding for the remainder of 2003.
Accordingly, we expect that the current market conditions will
persist into the third quarter, negatively affecting our revenue."

Net revenue for the second quarter of 2003 decreased $0.3 million,
or 0.7%, to $43.5 million from $43.8 million for the same period
in 2002. At Weekly Reader, revenue increased $0.7 million, or
14.6%, to $5.3 million from $4.6 million for the same period in
2002. This was attributable to higher custom publishing shipments
by Weekly Reader's subsidiary Lifetime Learning Systems.

At World Almanac Education Group, second quarter revenue decreased
by $1.3 million, or 10.6%, to $10.5 million from $11.8 million for
the same period in 2002. This decrease was primarily due to the
continuing weak environment for school library funding.

At AGS, second quarter revenue decreased $0.7 million, or 5.1%, to
$13.5 million from $14.2 million for the same period in 2002,
primarily due a $0.9 million decrease in backlist curriculum
products, partially offset by growth in core curriculum and
assessment products of $0.2 million.

CompassLearning and ChildU, which together comprise the Company's
educational technology business, grew revenue by 7.4% quarter-
over-quarter for the period ended June 30, 2003. At
CompassLearning (standalone), revenue decreased $0.4 million, or
3.7%, to $12.3 million from $12.7 million for the same period in
2002. At ChildU, WRC's unrestricted subsidiary, revenue increased
$1.4 million or 304.4% to $1.9 million from $0.5 million for the
same period in 2002 driven by sales of its web-enabled curriculum
products.

For the three-months ended June 30, 2003, operating income
decreased $0.3 million, or 9.0%, to $3.3 million from $3.6 million
in 2002. This decrease was primarily due to $1.0 million of
restructuring costs attributable to updating the assumptions used
in determining the fair value of the remaining lease obligations
associated with facilities vacated in 2002.

Net loss decreased by $0.6 million, or 11.3% for the three months
ended June 30, 2003, to $4.7 million in 2003 from $5.3 million in
2002 primarily due to lower other expenses, net of $0.6 million
driven by lower management fees of $0.3 million, combined with
lower interest expense, of $0.3 million partially offset by
slightly lower operating income.

Net revenue for the six-months ended June 30, 2003 decreased $0.1
million, or 0.1%, to $90.5 million from $90.6 million for the same
period in 2002. WRC Media Adjusted EBITDA for the six-months
ending June 30, 2003 of $18.8 million exceeded the same period in
the prior year by $3.1 million or 20.0%. The higher profitability
compared to prior year is driven by significantly higher revenue
at ChildU, WRC's unrestricted subsidiary. ChildU revenue increased
$2.2 million or 298.6% to $2.9 million from $0.7 million for the
same period in 2002 resulting from higher sales of its web-enabled
curriculum products from greater market acceptance as more and
more schools are becoming Internet capable. ChildU achieved an
important milestone for the period ended June 30, 2003, by
becoming EBITDA positive ($0.8 million) on a trailing twelve month
basis.

Operating income increased $0.8 million, or 12.6%, to $6.8 million
for the six-months ended June 30, 2003, from operating income of
$6.0 million for the same period in 2002. This improvement in
income from operations was primarily driven by $0.6 million in
higher gross profits resulting from higher margin on sales and by
$0.2 million in lower operating costs.

Net loss decreased by $83.0 million, or 90.1% for the six months
ended June 30, 2003, to $9.1 million from $92.1 million in 2002
primarily due to the $80.7 million in non-cash charge recorded in
the prior period resulting in the Company's adoption of SFAS No.
142. Excluding the non-cash charge, net loss decreased $2.3
million or 20.2% primarily due to higher gross profit of $0.6
million on flat revenue, lower operating expense of $0.2 million,
lower interest payments of $0.5 million and lower loss on
investments of $1.1 million.

As of June 30, 2003, WRC Media's cash balance was $12.5 million
and consolidated debt was $294.2 million. During the six months
ended June 30, 2003, WRC Media made scheduled principal payments
of $3.9 million on its senior credit facilities and as of June 30,
2003 there were $24.0 million in outstanding advances under the
Company's revolving credit facility. Capital expenditures
(including prepublication costs) for the six months ended June 30,
2003 were $5.2 million.

For further information about WRC Media's results of operations,
financial condition, cash flows, liquidity and other financial
information, please see the Company's quarterly report on Form 10-
Q, which will be publicly filed by August 14, 2003 with the
Securities and Exchange Commission.

WRC Media Inc., a leading publishing and media company, creates
and distributes innovative supplementary educational materials for
the school, library, and home markets. WRC Media's product suite
includes some of the best-known brands in education, recognized
for their consistent high quality and proven effectiveness.


* BOOK REVIEW: AS WE FORGIVE OUR DEBTORS: Bankruptcy and
               Consumer Credit in America
----------------------------------------------------------------
Authors:    Teresa A. Sullivan, Elizabeth Warren, & Jay Westbrook
Publisher:  Beard Books
Softcover:  370 Pages
List Price: $34.95
Review by:  Susan Pannell

Order your personal copy today at
   http://amazon.com/exec/obidos/ASIN/1893122158/internetbankrupt

So you think you know the profile of the average consumer
debtor: either deadbeat slouched on a sagging sofa with a three-
day growth on his chin or a crafty lower-middle class type
opting for bankruptcy to avoid both poverty and responsible debt
repayment.

Except that it might be a single or divorced female who's the
one most likely to file for personal bankruptcy protection, and
her petition might be the last stage of a continuum of crises
that began with her job loss or divorce. Moreover, the dilemma
might be attributable in part to consumer credit industry that
has increased its profitability by relaxing its standards and
extending credit to almost anyone who can scribble his or her
name on an application.

Such are among the unexpected findings in this painstaking study
of 2,400 bankruptcy filings in Illinois, Pennsylvania, and Texas
during the seven-year period from 1981 to 1987. Rather than
relying on case counts or gross data collected for a court's
administrative records, as has been done elsewhere, the authors
use data contained in the actual petitions. In so doing, they
offer a unique window into debtors' lives.

The authors conclude that people who file for bankruptcy are, as
a rule, neither impoverished families nor wily manipulators of
the system. Instead, debtors are a cross-section of America. If
one demographic segment can be isolated as particularly debt-
prone, it would be women householders, whom the authors found
often live on the edge of financial disaster. Very few debtors
(3.7 percent in the study) were repeat filers who might be
viewed as abusing the system, and most (70 percent in the study)
of Chapter 13 cases fail and become Chapter 7s. Accordingly, the
authors conclude that the economic model of behavior--which
assumes a petitioner is a "calculating maximizer" in his in his
decision to seek bankruptcy protection and his selection of
chapter to file under, a profile routinely used to justify
changes in the law--is at variance with the actual debtor
profile derived from this study.

A few stereotypes about debtors are, however, borne out. It is
less than surprising to learn, for example, that most debtors
are simply not as well-off as the average American or that while
bankrupt's mortgage debts are about average, their consumer
debts are off the charts. Petitioners seem particularly
susceptible to the siren song of credit card companies. In the
study sample, creditors were found to have made between 27
percent and 36 percent of their loans to debtors with incomes
below $12,500 (although the loans might have been made before
the debtors' income dropped so low). Of course, the vigor with
which consumer credit lenders pursue their goal of maximizing
profits has a corresponding impact on the number of bankruptcy
filings.

The book won the ABA's 1990 Silver Gavel Award. A special 1999
update by the authors is included exclusively in the Beard Book
reprint edition.

                          *********

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 ***