TCR_Public/040115.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Thursday, January 15, 2004, Vol. 8, No. 10

                          Headlines

360NETWORKS: Completes Acquisition of Touch America Assets
AIR CANADA: December 2003 Revenue Passenger Miles Up by 0.2%
ALASKA AIR GROUP: Will Publish Q4 and FY 2003 Results on Jan. 28
ANC RENTAL: Deutsche Bank Says Liquidating Plan Fatally Flawed
ARMSTRONG: Obtains Sixth Lease Decision Period Extension

ARVINMERITOR: Hosting 1st-Quarter 2004 Conference Call on Jan 28
ASPECT COMMS: Will Publish Q4 and FY 2003 Results on January 22
ATSI COMMS: Hires Malone & Bailey to Replace Tanner + Co.
AURORA FOODS: Court to Consider Reorganization Plan on Feb. 17
AURORA FOODS: Wants Nod to Hire Ordinary Course Professionals

AVCORP INDUSTRIES: Arranges New $10MM Operating Credit Facility
AVITAR INC: Fiscal Year 2003 Net Loss Widens to $6.4 Million
BESTNET COMMS: First-Quarter 2004 Results Show Continued Growth
BION ENVIRONMENTAL: Relocates Main Office to Crestone, Colorado
BRIDGE: Plan Administrator Sues ADP Inc. to Recoup $3.7 Million

CABLE & WIRELESS: Will Auction-Off Assets on January 21, 2004
CARAUSTAR INDUSTRIES: Shuts Down Cedartown, Ga., Paperboard Mill
CHESAPEAKE ENERGY: Reports Final Sr. Debt Exchange Offer Results
COEUR D'ALENE MINES: Closes $180-Million Conv. Debt Offering
COLUMBUC MCKINNON: Look for Fiscal Q3 2004 Results on Tuesday

COVANTA: Pushing for Approval of Allied Aviation Compromise
DELTA WOODSIDE: Will Publish Q2 Fiscal 2004 Results on Tuesday
DII INDUSTRIES: Taps Hamilton Rabinovitz for Consulting Services
EAGLE FOOD: Disclosure Statement Hearing Set for January 29, 2004
ELIZABETH ARDEN: Completes 7-3/4% Senior Subordinated Note Offer

ENRON: Enters Settlements with 17 Retail Contract Counterparties
ENRON CORP: Selling Hanover Partnership Interest for $4.4 Mill.
FEDERAL-MOGUL: Appoints Robert S. Miller, Jr. as Board Chairman
FIVE STAR RESTAURANT: Tranzon Auctioning-Off 12 Restaurants
FLEMING: Wants to Commence Arbitration of Price Chopper Claims

GARUDA CAPITAL: Spicer Jeffries Resigns as Independent Auditor
GENCORP INC: Commences $100-Mil. Convertible Sub. Debt Offering
GLOBAL SIGNAL: S&P Rates Series 2004-1 Classes F & G at BB/B
GUESS? INC: Files Shelf Registration Statement for 5+ Mill. Shares
HEALTHSOUTH: Appoints John Markus New Chief Compliance Officer

HOLLINGER INC: Appoints Peter White Co-Chief Operating Officer
ILLUMINATIONS.COM: Case Summary & 20 Largest Unsecured Creditors
INFOUSA: Will Host Fourth-Quarter Conference Call Tomorrow
INTERPOOL INC: S&P Maintains Watch Negative on Low-B Ratings
IT GROUP: Details Functions of Oversight Committee Under Plan

JACKSON PRODUCTS: Asking Court to Confirm Prepackaged Plan
KB HOME: Prices $250 Million of Senior Notes in Private Placement
KB TOYS INC: Commences Chapter 11 Restructuring in Delaware
KB TOYS INC: Case Summary & 40 Largest Unsecured Creditors
KINGSWAY FIN'L: Consolidating North American Reporting Structure

KMART CORP: Balks at 227 Late-Filed Claims Totaling $20 Million
LAIDLAW INT'L: First-Quarter 2004 Results Enter Positive Zone
LAS VEGAS DREAM: Case Summary & 13 Largest Unsecured Creditors
LIN TV CORP: Agrees to Sell All Flint Television Station Assets
LOEWEN GROUP: Resolves Multiple Internal Revenue Service Claims

LUCENT TECHNOLOGIES: Wins Contracts in China Topping $350 Million
MED GEN INC: September 30 Balance Sheet Upside-Down by $880,000
METALS USA: Asking Court for Final Decree Closing Five Cases
MILESTONE SCIENTIFIC: Executes 1-For-3 Reverse Stock Split
MIRANT CORP: Secures Court Clearance for Avista Settlement Pact

NATIONAL CENTURY: Court Approves Proposed Solicitation Protocol
NATIONAL CONSTRUCTION: Harel Replaces Ernst & Young as Auditors
NATIONAL STEEL: Wants Clearance for Huber Parties Settlement
NOVA CHEMICALS: Closes Private Placement of $400MM Senior Notes
NRG ENERGY: Agrees to Let Dick Corp. & GE File Foreclosure Suits

OWENS CORNING: Wants Nod to Pay HSBC's $3-Million Secured Claim
PACIFIC GAS: Secures Clearance for Santa Clara City Settlement
PARMALAT GROUP: Australian Unit Remains Strong, Viable Business
PEABODY ENERGY: Will Publish Fourth-Quarter Results on Jan. 29
POPP EXCAVATING: Case Summary & 20 Largest Unsecured Creditors

PORTLAND GEN: Fitch Says Outlook Unaffected by SEC Ruling
RAYOVAC: Initiates Remington Integration & Global Reorganization
REDBACK NETWORKS: Hires Morgan Lewis as Bankruptcy Co-Counsel
RENT WAY: Hires Ernst & Young to Replace PricewaterhouseCoopers
ROYAL WORLD: Section 341(a) Meeting Will Convene on January 29

SALOMON BROTHERS: Fitch Junks Class E-GF and F-GF Note Ratings
SBA COMMS: Obtains New $350MM Senior Secured Credit Facility
SCARBOROUGH-ST. JAMES: First Creditors' Meeting Set for Tuesday
SK GLOBAL: Japanese Customers Acquire SK Shares for $24 Million
SOLUTIA INC: Proposes Uniform Interim Compensation Procedures

STEAKHOUSE PARTNERS: Emerges from Chapter 11 Bankruptcy Process
STERLING FINANCIAL: Reaches Agreement to Purchase StoudtAdvisors
SUMMITVILLE TILES: UST Appoints Official Creditors' Committee
SUREBEAM: Titan Expects $10M Impairment Charges After Bankruptcy
TENNECO AUTOMOTIVE: Paul D. Novas Named VP of Finance for Europe

TESORO PETROLEUM: Fourth-Quarter Conference Call Set for Feb. 3
THOMASTON MILLS: Court Nixes Ex-Employees' Severance Pay Claims
TRANSWITCH CORP: Will Publish Fourth-Quarter Results on Tuesday
TROPICAL SPORTSWEAR: Amends Revolver to Cure Covenant Violations
TULLAS CDO: Fitch Downgrades Two Note Classes to Lower-B Levels

UNIFI INC: Will Host Second-Quarter Conference Call on Wednesday
UNITED AIRLINES: Enters into $2BB JPMC-Citigroup Exit Financing
UNITED STEEL: US Trustee Appoints Official Creditors' Committee
VAIL RESORTS: Proposes $350MM Senior Subordinated Debt Offering
VAIL RESORTS: Commences Tender Offer for 8-3/4% Sr. Sub. Notes

VELTRI METAL: Files for Court Protection in Both U.S. and Canada
VIALINK CO.: CEO Robert I. Noe Named Interim Board Chairman
VIVENDI: Discloses 40% Equity Stake in UGC after Restructuring
WARNACO GROUP: Antonio C. Alvarez Steps Down from Company Board
WAVING LEAVES: Wegman Hessler Serving as Bankruptcy Counsel

WEYERHAEUSER CO.: Will Publish Fourth-Quarter Results on Jan. 23
WHX CORP: Names Trangucci as CEO & Arnold as Executive Chairman
WILLIAMS COS.: Look for 2003 Year-End Results on February 19
WORLDCOM INC: Proposes Goldman Sachs Settlement Agreement
XCEL ENERGY: Inks Pact to Sell Cheyenne Light to Black Hills

XM SATELLITE: Commences Public Offering of 18 Million Shares
ZOLTEK COMPANIES: Completes Debt Refinancing Transactions

* Deirdre A. Martini Appointed as New U.S. Trustee for Region 2
* Fasken Matineau Brings-In Richard Peter as Associate Counsel
* E&Y Sells Part of Actuarial Advisory Practice to Eckler Partners
* Leading Firms Unite to Create First Global Offshore Law Firm

                          *********

360NETWORKS: Completes Acquisition of Touch America Assets
----------------------------------------------------------
360networks Corporation, a leading provider of wholesale and data
telecommunications services in North America, completed the
purchase of a majority of the assets of Touch America Inc., just
prior to yearend.

360networks acquired Touch America's private line and Internet
customers and the network assets that serve those customers. The
network assets included approximately 10,300 route miles within a
regional network that stretches throughout fifteen western states.
The acquired business will generate more than $50 million of
annual revenues and will be immediately cash flow positive.

"Touch America's business enables us to be a leading provider of
private line and IP services in the western United States," stated
Greg Maffei, Chairman and CEO of 360networks. "We have acquired an
advanced network with unique routes, access to rural markets and a
loyal and growing customer base that are complementary to our
existing business."

360networks has hired approximately 75 Touch America personnel and
is maintaining an office in Butte, Montana.

360networks purchased these assets through a Section 363 sale in
Touch America's bankruptcy proceedings. Touch America had filed
for Chapter 11 protection in June of 2003.

In 2003, 360networks completed the purchase of Group Telecom,
Canada's largest facilities-based CLEC, the North American network
assets of Dynegy Inc., and most recently, a majority of the
network assets of Touch America. With the backing of WL Ross &
Company, 360networks has successively sought opportunities to
leverage its operating infrastructure and network, expand its
regional and metro access, and profitably grow its customer base
and revenue. "We believe that our experience in restructuring
provides us an advantage in this marketplace and we continue to
explore accretive acquisitions," said Greg Maffei.

At 360networks and Group Telecom, we provide telecommunications
services and network infrastructure in North America to over
13,000 carrier and commercial customers. We offer a comprehensive
range of services from traditional local and long distance voice
products to innovative products such as optical transport,
wavelengths, Internet transport, Gigabit Ethernet, and optical
virtual private networks. Our optical mesh fiber network is one of
the largest and most advanced on the continent, spanning 33,000
route miles (53,000 kilometers) and reaching 60 major cities in
North America, and includes 17 metro fiber networks in nine
Canadian provinces. For more information about 360networks and
Group Telecom, please visit http://www.360.net/


AIR CANADA: December 2003 Revenue Passenger Miles Up by 0.2%
------------------------------------------------------------
Air Canada mainline flew 0.2% more revenue passenger miles (RPMs)
in December 2003 than in December 2002, according to preliminary
traffic figures. Overall, capacity decreased by 2.6%, resulting in
a load factor of 72%, compared to 70% in December 2002; an
increase of 2 percentage points.

Jazz, Air Canada's regional airline subsidiary, flew 2.4% more
revenue passenger miles in December 2003 than in December 2002,
according to preliminary traffic figures. Capacity decreased by
4.0%, resulting in a load factor of 59.4%, compared to 55.8% in
December 2002; an increase of 3.6 percentage points.

"At a system level, December traffic moved into positive territory
after 12 months of decline reflecting a strong Pacific and much
higher demand for Caribbean, Mexican and South American
destinations. Key factors in the Pacific growth included the new
service to Delhi, a reinstatement on December 1st of a second
daily flight to Hong Kong (from Toronto) and a stronger China
market," said Rob Peterson, Executive Vice President and Chief
Financial Officer.


ALASKA AIR GROUP: Will Publish Q4 and FY 2003 Results on Jan. 28
----------------------------------------------------------------
Alaska Air Group, Inc. (NYSE: ALK) the parent company of Alaska
Airlines, Inc. and Horizon Air Industries, Inc., will announce its
fourth quarter/full year 2003 financial results on Wednesday,
January 28, 2004 at 8:30 a.m. PT/11:30 a.m. ET. Interested parties
may listen to the call via webcast at http://www.alaskaair.com/

Seattle-based Alaska Air Group is the parent company of Alaska
Airlines and Horizon Air Industries.

As previously reported, Standard & Poor's Ratings Services lowered
its ratings on Alaska Air Group Inc. and subsidiary Alaska
Airlines Inc., including lowering the corporate credit rating on
both to 'BB-' from 'BB.' Ratings were removed from CreditWatch,
where they were placed March 18, 2003. The outlook is negative.


ANC RENTAL: Deutsche Bank Says Liquidating Plan Fatally Flawed
--------------------------------------------------------------
Deutsche Bank Securities, Inc. asserts that the ANC Rental
Debtors' Liquidating Plan is fatally flawed.  The Plan does not
satisfy the mandatory requirements set forth in Section 1129 of
the Bankruptcy Code, and includes certain provisions, which
violate or attempt to modify express provisions in the Bankruptcy
Code.

Richard H. Cross, Jr., Esq., in Wilmington, Delaware, explains
that the Plan provides for the possibility that the Effective
Date and the distributions to holders of general unsecured claims
may occur before a determination that sufficient funds exist for
the satisfaction of all administrative expense claims asserted
against the Debtors' estates.  Any payment of General Unsecured
Claims before the payment of all Administrative Expenses Claims,
without establishing an adequate reserve for Disputed
Administrative Expenses Claims, presents a grave risk that the
Debtors' estates will be insufficient to pay in full in Cash all
Administrative Expenses Claims ultimately allowed in their cases.  
Mr. Cross contends that this risk is impermissible and precludes
Plan confirmation under Sections 1129(a)(1) and (a)(9).

Deutsche Bank believes that it has a valid Administrative Expense
Claim against the Debtors' estates.  Subsequent to the Petition
Date, the Debtors and Deutsche Bank entered into securitization
transactions, which were approved by various Court orders.  
Deutsche Bank and Debtor ANC Rental Corporation also entered into
an engagement letter dated March 29, 2002, which the Court
approved in April 2002.

The Letter Agreement, among other things, enabled the Debtors to
obtain vital funding from Deutsche Bank through securitization
transactions and to benefit from Deutsche Bank's expertise in
structuring and placing rental car fleet securitizations.  The
Letter Agreement also provided that in the event "[ANC] elects to
terminate the Agreement for any reason, then the Company shall
promptly pay Deutsche Bank 0.50% of the MTN Notional Amount."  
The Court's order in May 2003 provides, in part, that the MTN
Notional Amount is $1,050,000,000 and, thus, the fee payable to
Deutsche Bank upon termination of the Letter Agreement is
$5,250,000.

Mr. Cross maintains that the Liquidating Plan will result in ANC,
as co-party to the Letter Agreement with Deutsche Bank, ceasing
to exist.  Certainly, no further performance by either party to
the Letter Agreement will be possible once the Plan becomes
effective.  Thus, under the proposed Plan, ANC either terminated
the Letter Agreement pursuant to its terms, or breached the
Letter Agreement.  Regardless, ANC owes the Termination Fee to
Deutsche Bank, either pursuant to the terms of the Letter
Agreement or as damages for its breach.

As the Third Circuit noted in In re Frenville, the Debtors'
obligations arising postpetition, like the Letter Agreement, are
administrative expenses.  Thus, the Termination Fee owing to
Deutsche constitutes an Administrative Expense Claim under
Section 503(b), Mr. Cross asserts.  Deutsche Bank will file a
proof of claim for the allowance of its Administrative Claim.

Deutsche Bank also observes that Article 8 of the Plan appears
improperly to contemplate that all of the Debtors' executory
contracts will be rejected and that all claims arising from the
rejection of the executory contracts will be classified as
General Unsecured Claims, even if the affected executory contract
is a postpetition contract entered into with Court approval.  
This is entirely at odds with Sections 365 and 507.

According to Mr. Cross, it is clear that unsecured status is
appropriate for claims resulting from the Debtors' rejection of
prepetition executory contracts.  However, it is just as clear
that where the Debtors entered into postpetition executory
contracts authorized by the Court, the contracts are not
susceptible to rejection, and in any event any claims arising
under the contracts give rise to Administrative Expense Claims
under Section 503(b).  Absent rectification by the Plan
Proponents of these issues, the Plan cannot be confirmed under
Sections 1129(a)(1) and (a)(9).

Section 1129(a)(9) requires the payment in full of all allowed
Administrative Expense Claims against a debtor's estate and that
the payment be made on the effective date of the debtor's plan of
reorganization.  But Mr. Cross points out that the effect of the
Plan Proponents' definition of Effective Date is to permit the
Plan to go effective even before sufficient funds are reserved to
pay the asserted amount of the Disputed Administrative Claims.  
This result is impermissible because, in that situation, the
Effective Date may occur when the Debtors' estates lack
sufficient funds for the payment of all Allowed and Disputed
Administrative Expense Claims in these cases.  It is completely
inappropriate for the Plan to allow for the possibility that the
Effective Date could occur "360 days after the Confirmation
Date," even if on that date, the Debtors lack sufficient cash to
satisfy the Administrative Expense Claims in full.

While Deutsche Bank does not believe that the Plan Proponents
intended to propose a Plan in violation of Section 1129(a)(9),
Mr. Cross says, these violations must be rectified if the Court
is to confirm the Plan.  Deutsche Bank wants the Plan Proponents
to modify the Plan's definition of Effective Date to provide that
the Plan cannot go effective unless and until a sufficient
reserve is established to pay the asserted amount of all Disputed
Administrative Expense Claims.  Absent this revision, the Plan
cannot be confirmed under Section 1129.

Deutsche Bank also notes that the Liquidating Trust Agreement
fails to provide that the Liquidating Trust Assets be held in the
Liquidating Trust for the benefit of Administrative Expense
Claims holders.  Since the Plan provides that Allowed
Administrative Expense Claims are to be paid in full in Cash
"from the Debtors or the Liquidating Trust," the Liquidating
Trust Agreement must be revised to provide for this contingency.

Headquartered in Fort Lauderdale, Florida, ANC Rental Corporation,
is the world's third-largest publicly traded car rental company.  
The Company filed for chapter 11 protection on November 13, 2001
(Bankr. Del. Case No. 01-11200). Brad Eric Scheler, Esq., and
Matthew Gluck, Esq., at Fried, Frank, Harris, Shriver & Jacobson
represent the Debtors in their restructuring efforts.  When the
Company filed for protection from their creditors, they listed
$6,497,541,000 in assets and $5,953,612,000 in liabilities. (ANC
Rental Bankruptcy News, Issue No. 45; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


ARMSTRONG: Obtains Sixth Lease Decision Period Extension
--------------------------------------------------------
Etta R. Wolfe, Esq., at Richards Layton & Finger, in Wilmington,
Delaware, reports that the Armstrong Debtors currently have
unexpired non-residential real property leases with seven
landlords.  These leases include land use agreements and lease
agreements regarding warehouse space, office space, land and
parking lots.  These properties are located throughout the United
States.

The Landlords for the Unexpired Leases are:

  Landlord                       Lease Type
  --------                       ----------
  Alabama & Gulf Coast Railway   Railway agreements
  City of Pensacola              Sign agreement
  Illinois Central Gulf RR       Spur track agreement
  National Railroad Passenger    Siding agreements (5)
  Norfolk Southern Corp.         Parking lot, track crossing,
                                 well line
  Perdido Bay Holdings, Inc.     Warehouse lease
  Lancaster Airport Authority    Hangar lease

Since the Petition Date, these leases have remained in effect and
have neither expired nor terminated under their own terms.  
Accordingly, each remains subject to assumption or rejection under
the Bankruptcy Code.  These leases are to be assumed pursuant to
the Fourth Amended Plan.

Because the proposed Confirmation Order remains is up in the air,
and out of an abundance of caution, the Court, at the Debtors'
request, extends the time to assume or reject the Unexpired
Leases, through and including the date the Confirmation Order is
signed by the U.S. District Court for the District of Delaware.  
(Armstrong Bankruptcy News, Issue No. 54; Bankruptcy Creditors'
Service, Inc., 215/945-7000)   


ARVINMERITOR: Hosting 1st-Quarter 2004 Conference Call on Jan 28
----------------------------------------------------------------
ArvinMeritor, Inc. (NYSE: ARM) will host a telephone conference
call to discuss the company's fiscal year 2004 first-quarter
financial results on Wednesday, Jan. 28, 2004, at 11:00 a.m. (ET).

To participate, call (706) 643-7449 10 minutes prior to the start
of the call.  Please reference ArvinMeritor when dialing in.  
Investors can also listen to the conference call in real time --
or for 90 days by recording -- by visiting
http://www.arvinmeritor.com/

A replay of the call will be available from noon Jan. 28, until
midnight, Jan. 30, 2004, by calling 1-800-642-1687 within the
United States and Canada or (706) 645-9291 for international
calls.  Please refer to conference ID number 4815343.

The conference call follows the release of the company's first-
quarter results on Jan. 28, 2004, prior to the day's opening of
the New York Stock Exchange.  The release will be distributed via
PR Newswire, as well as available on First Call and the company's
Web site.

ArvinMeritor, Inc. (Fitch, BB+ Senior Unsecured Debt and BB-
Capital Securities Ratings, Stable Outlook) is a premier $8-
billion global supplier of a broad range of integrated systems,
modules and components to the motor vehicle industry.  The company
serves light vehicle, commercial truck, trailer and specialty
original equipment manufacturers and related aftermarkets.
Headquartered in Troy, Mich., ArvinMeritor employs approximately
32,000 people at more than 150 manufacturing facilities in 27
countries.  ArvinMeritor common stock is traded on the New York
Stock Exchange under the ticker symbol ARM.  For more information,
visit the company's Web site at http://www.arvinmeritor.com/


ASPECT COMMS: Will Publish Q4 and FY 2003 Results on January 22
---------------------------------------------------------------
Aspect Communications Corporation (Nasdaq: ASPT), a leading
provider of enterprise customer contact solutions, will announce
its financial results for the fourth fiscal quarter and full
fiscal year of 2003 on Thursday, Jan. 22.  

The company will host a conference call and Webcast at 2 p.m. PST
the same day. Numbers for accessing the call are 800-223-9488 and
785-832-1508.

A replay of the conference call will be available from Jan. 22 at
5 p.m. PST through Jan. 29 at 8:59 p.m. PST by dialing 800-839-
4013 or 402-220-2982. The Webcast and call replay may be accessed
from the company's home page at http://www.aspect.com/

Aspect Communications Corporation (S&P, B Corporate Credit Rating,
Positive) is the world's largest company focused exclusively on
contact center solutions, and the only one that unifies workforce,
information and communications to deliver exceptional customer
service. The Aspect brand is trusted by more than 75 percent of
the Fortune 50, and more than 3 million customer sales and service
professionals worldwide rely on Aspect's mission-critical business
communications solutions. The company's leadership is based on 18
years of expertise gained from more than 8,000 successful
implementations worldwide. Aspect is headquartered in San Jose,
California, with 24 offices in 11 countries around the world. For
more information, visit Aspect's Web site at
http://www.aspect.com/


ATSI COMMS: Hires Malone & Bailey to Replace Tanner + Co.
---------------------------------------------------------
On December 09, 2003, ATSI Communications, Inc.'s Board of
Directors approved the recommendation of its Audit Committee that
the firm of Tanner + Co. be dismissed as its independent public
accountants. A discussion was also held by the Audit Committee
with Antonio Estrada, Corporate Controller. On December 10, 2003
Tanner + Co. was dismissed as the Company's independent public
accountants.

On December 09, 2003, ATSI Communications, Inc.'s Board of
Directors approved the recommendation of its Audit Committee that
the firm of Malone & Bailey, PLLC be engaged as its independent
public accountants for the fiscal year ending July 31, 2004. The
recommendation of the Audit Committee was made after discussions
with Antonio Estrada, Corporate Controller. On December 10, 2003
the firm of Malone & Bailey, PPLC was engaged as the Company's
independent public accountants.

Tanner + Co.'s report on the financial statements for the years
ended July 31, 2002 and 2003 contained a qualification reflecting
the uncertainty regarding the ability of the Company to continued
as a going concern due to the financial difficulties faced by the
Company during the audited periods.

ATSI Communications Inc. is an emerging international carrier
serving the rapidly expanding niche markets in and between Latin
America and the United States, primarily Mexico. The Company's
borderless strategy includes the deployment of a "next generation"
network for more efficient and cost effective service offerings of
domestic and international voice, data and Internet. ATSI has
clear advantages over the competition through its corporate
framework consisting of unique licenses, interconnection and
service agreements, network footprint, and extensive retail
distribution. ATSI's Internet software subsidiary, GlobalSCAPE
Inc. (OTCBB:GSCP) -- http://www.globalscape.com/-- is focused on  
the development, marketing and support of leading content
management applications.

ATSI Communications filed for Chapter 11 protection on February 4,
2003 in the U.S. Bankruptcy Court for the Western District of
Texas (San Antonio) (Lead Bankr. Case No. 03-50753). Martin Warren
Seidler, Esq., represents the Debtors in these cases. At the time
of filing, the Debtors listed estimated assets of between $10 and
$50 Million and estimated debts of between $1 and $10 Million.  


AURORA FOODS: Court to Consider Reorganization Plan on Feb. 17
--------------------------------------------------------------
Aurora Foods Inc. (OTC Bulletin Board: AURF), a producer and
marketer of leading food brands, announced continued progress in
connection with its pending reorganization under Chapter 11 of the
U.S. Bankruptcy Code to effect its previously announced merger
with Pinnacle Foods.

At a hearing held on Friday, January 9, 2004, the Delaware
Bankruptcy Court approved a series of orders requested by Aurora
and gave Aurora the authority to proceed with mailing to holders
of the Company's outstanding senior subordinated notes Aurora's
Reorganization Plan and Disclosure Statement and related documents
soliciting their approval of the transaction. The Disclosure
Statement will be accompanied by a Letter of Support for the
Reorganization Plan by the Official Committee of Aurora's
Unsecured Creditors.

The Delaware Bankruptcy Court has set a confirmation hearing on
Aurora's Reorganization Plan for February 17, 2004.

On January 8, 2004, the Court entered an order allowing Aurora to
pay vendors that participated in its previously announced vendor
lien program. The Company also announced it had entered into an
Amendment, dated January 8, 2004, to its merger agreement with
Crunch Equity Holding, LLC, the parent of Pinnacle. The Amendment,
among other things, clarifies that claims of the Company's
bondholders include accrued interest on the notes through
commencement of the bankruptcy case.

The Company further announced that the applicable waiting period
had expired under the Hart-Scott-Rodino Antitrust Improvements
Act.

The transaction remains subject to a number of conditions,
including receipt of financing and bankruptcy court approvals. No
assurance can be given that the conditions to closing the
transaction will be satisfied, or that the transaction ultimately
will be consummated.

Aurora expects to continue to operate its business in the ordinary
course and to conduct its business without interruption during the
restructuring process.

Aurora Foods Inc., based in St. Louis, Missouri, is a producer and
marketer of leading food brands, including Duncan Hines(R) baking
mixes; Log Cabin(R), Mrs. Butterworth's(R) and Country Kitchen(R)
syrups; Lender's(R) bagels; Van de Kamp's(R) and Mrs. Paul's(R)
frozen seafood; Aunt Jemima(R) frozen breakfast products;
Celeste(R) frozen pizza; and Chef's Choice(R) skillet meals. More
information about Aurora may be found on the Company's Web site at
http://www.aurorafoods.com/


AURORA FOODS: Wants Nod to Hire Ordinary Course Professionals
-------------------------------------------------------------
The Aurora Foods Debtors customarily retain the services of
various ordinary course professionals -- attorneys, accountants,
and other professionals -- to represent them in matters arising in
the ordinary course of their businesses, unrelated to these
Chapter 11 cases.  Eric M. Davis, Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, in Wilmington, Delaware, informs Judge
Walrath that the Ordinary Course Professionals include:

Name & Address                  Description of        Estimated
Of Professional                 Services              Monthly Fee
------------                    -------------         -----------
Armstrong Teasdale LLP          IP and Corporate      $75,000
One Metropolitan Square         Attorneys
Suite 2600
St. Louis, MO 63102-2740

Blackwell, Sanders, Peper,      Advertising &         $10,000
Martin LLP                      FDA Matters  
720 Olive Street
Suite 2400
St. Louis, MO 63101-2313

Ropes & Gray                    Litigation            $30,000
One International Place
Boston, MA 02110-2624

Mr. Davis points out that the Debtors will continue to require
the services of these professionals while operating as debtors-
in-possession to render services to their estates, similar to
those rendered prior to the Petition Date.  The work of the
Ordinary Course Professionals, albeit ordinary course, is
directly related to the preservation of the value of the Debtors'
estates, even though the amount of fees and expenses they incur
represents only a small fraction of that value.  Although the
automatic stay and other issues in these cases may decrease the
Debtors' need for certain Ordinary Course Professionals'
services, the Debtors cannot now quantify or qualify their needs.

Mr. Davis contends that it would severely hinder the
administration of the Debtors' estates if the Debtors were
required to:

   (1) submit to the Court an application, affidavit, and
       proposed retention order for every Ordinary Course
       Professional;

   (2) wait until the order is approved before the Ordinary   
       Course Professional continues to render services; and

   (3) withhold payment of the normal fees and expenses of the
       Ordinary Course Professionals until they comply with the
       compensation and reimbursement procedures applicable to
       Chapter 11 Professionals.

There is a significant risk that some Ordinary Course
Professionals would be unwilling to provide services, and that
others would suspend services pending a specific Court order
authorizing the services.  Any delay or need to replace
professionals could have significant adverse consequences, Mr.
Davis says.  

It is, therefore, necessary to avoid any disruption to the
professional services required in the day-to-day operation of
their businesses.  Requiring the Ordinary Course Professionals to
file retention pleadings and participate in the payment approval
process along with the Chapter 11 Professionals would
unnecessarily burden the Clerk's Office, the Court, and the
Office of the United States Trustee, while adding significantly
to the administrative costs of these cases without any
corresponding benefit to the Debtors' estates.

Therefore, the Debtors seek the Court's permission to:

   (a) retain the Ordinary Course Professionals, without the
       necessity of a separate, formal retention application
       approved by Bankruptcy Court for each Ordinary Course  
       Professional; and

   (b) pay the Ordinary Course Professionals for postpetition
       services rendered and expenses incurred, subject to
       certain limits, without the necessity of additional Court
       approval.

Mr. Davis notes that although some of the Ordinary Course
Professionals may not be "professional persons" as contemplated
by Section 327 of the Bankruptcy Code, out of an abundance of
caution, the Debtors seek to employ and pay all Ordinary Course
Professionals.  Certain of the Ordinary Course Professionals may
hold unsecured claims against the Debtors, but the Debtors
believe that none of the Ordinary Course Professionals has an
interest materially adverse to the Debtors, their estates,
creditors, or shareholders.

                   Proposed Retention Procedure

The Retention Procedure includes:

   (a) submission of Rule 2014 Declarations; and
   (b) employment of additional Ordinary Course Professionals.

Every professional will be required to file with the Court a
declaration of proposed professional and disclosure statement to
be served on:

   (1) the United States Trustee;

   (2) counsel to any official committee appointed;

   (3) counsel to the Debtors' prepetition lenders and, if any,
       postpetition lenders; and

   (4) the Debtors' counsel.

             Additional Ordinary Course Professionals

As future circumstances may require, additional professionals may
be employed, without the need for:

   -- filing individual retention applications; and

   -- any further hearing or notice to any party, by filing with
      the Court, a supplement to the List of Ordinary Course
      Professionals and serving a copy of the Supplement on the
      United States Trustee, the Committee, and the Lenders.

Every additional professional should file and serve on the Notice
Parties a Declaration within 30 days after the filing of the
Supplement.  The United States Trustee, the Committee, and the
Lenders then would be given 20 days after service of the required
Declaration to object to the retention of the Additional Ordinary
Course Professional.

If the objections are not timely submitted, or are withdrawn, the
Debtors seek the Court's authority to employ these professionals,
as a final matter without further order.

                    Proposed Payment Procedure

A. Monthly Payment Caps

The Debtors propose to pay, without formal application to the
Court by any Ordinary Course Professional, fees and expenses, not
exceeding $30,000 per month per professional, subject to certain
exceptions for certain Ordinary Course Professionals.  However,
aggregate monthly payments will be limited to $300,000, unless
the Court authorizes additional payments.  Payments that exceed
$30,000 per month, or $300,000 in the aggregate would become
subject to Court approval, based upon an application of allowance
or fees.

Contingent fee amounts received from recoveries that are realized
on the Debtors' behalf would be excepted from the monthly and
case limitations.  In other words, the limitations would apply
only to direct disbursements by the Debtors.

Notwithstanding these provisions, as to certain Ordinary Course
Professionals, the Debtors believe that it may be appropriate to
allow a monthly cap in excess of the standard $30,000 for
Armstrong Teasdale LLP, who serves as local counsel to the
Debtors and advises on an array of matters including,
intellectual property issues affecting the Debtors.  Armstrong
Teasdale's monthly fees have historically averaged in the $75,000
range per month.  The Debtors propose that the fees of Armstrong
Teasdale become subject to Court approval based upon an
application for allowance of fees and expenses, under the same
procedures that are established for Chapter 11 Professionals,
only if the payments exceed $75,000.

The Debtors further propose that the Monthly Allowance for fees
and expenses of Ordinary Course Professionals will be applied on
an average or "rolling" basis.  Specifically, to the extent that
any of the professional's fees and expenses are in any month less
than the Monthly Allowance for any particular month, the Debtors
propose to "bank" the remainder of the Monthly Allowance and have
the "banked" Monthly Allowance available to be applied against
professional fees incurred in subsequent months.  Conversely, to
the extent that any professional's fees and expenses exceed the
Monthly Allowance in any month -- plus any portion of Monthly
Allowances "banked" from prior months -- the Debtors propose to
pay no more than the current available Monthly Allowance in
addition to any available banked amount, and to pay the excess
professional fees only when, and to the extent that, the Monthly
Allowance from a subsequent month is banked.

As a routine matter, prior to the Petition Date, the Debtors
carefully reviewed all bills received from the Ordinary Course
Professionals to insure that the fees charged were reasonable and
that the expenses incurred were necessary.  This type of review
will continue postpetition and will protect the Debtors' estates
against excessive and improper billings.

B. Periodic Statements of Payments Made

Subject to confirmation of the Plan, the Debtors further propose
to file a payment summary statement with the Court every 120
days, or other period as the Court directs, and to serve the
statement on the United States Trustee, the Committee and the
Lenders.  The summary statement will include this information for
each Ordinary Course Professional:

   (1) the name of the Ordinary Course Professional;
   
   (2) the aggregate amounts paid as compensation for services  
       rendered and reimbursement of expenses incurred by the
       Ordinary Course Professional during the statement period;  
       and

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

Mr. Davis asserts that these Ordinary Course Professionals are
"professionals" within the meaning of Section 327 because:

   -- their employment relates only indirectly to the Debtors'
      work;

   -- they are afforded only marginal discretion in performing
      their work; and

   -- they will not be involved in administering these Chapter 11
      cases.

The Debtors intend to file individual retention applications for
any additional professionals they may seek to employ in
connection with the conduct of the Chapter 11 cases.  

Aurora Foods Inc. -- http://www.aurorafoods.com/-- based in St.  
Louis, Missouri, produces and markets leading food brands,
including Duncan Hines(R) baking mixes; Log Cabin(R), Mrs.
Butterworth's(R) and Country Kitchen(R) syrups; Lender's(R)
bagels; Van de Kamp's(R) and Mrs. Paul's(R) frozen seafood; Aunt
Jemima(R) frozen breakfast products; Celeste(R) frozen pizza; and
Chef's Choice(R) skillet meals.  With $1.2 billion in reported
assets, Aurora Foods, Inc., and Sea Coast Foods, Inc., filed for
chapter 11 protection on December 8, 2003 (Bankr. D. Del. Case No.
03-13744), to complete a pre-negotiated sale of the company to
J.P. Morgan Partners LLC, J.W. Childs Equity Partners III, L.P.,
and C. Dean Metropoulos and Co.  Sally McDonald Henry, Esq., and
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP provide Aurora with legal counsel, and David Y. Ying at Miller
Buckfire Lewis Ying & Co., LLP provides financial advisory
services. (Aurora Foods Bankruptcy News, Issue No. 4; Bankruptcy
Creditors' Service, Inc., 215/945-7000)   


AVCORP INDUSTRIES: Arranges New $10MM Operating Credit Facility
---------------------------------------------------------------
Avcorp Industries Inc. (TSX:AVP) announced continued progress in
its refinancing initiatives with the closing of new agreements
with the Bank of Montreal and with Export Development Canada.

The Company has secured a new operating credit facility with the
Bank of Montreal to replace the temporary arrangements under which
it has operated for the past twelve months. The credit facility is
secured by a General Security Agreement and by limited guarantees
from EDC and from related parties. The new credit facility, for up
to $10,000,000, will be used to repay approximately $5,500,000 of
temporary working capital debt and to provide ongoing working
capital.

The Company has also concluded revised terms for an existing
$5,000,000 convertible debenture with EDC. The revised terms
include:

-- an option to pay interest accrued between July 31, 2002 and
   December 31, 2003 in shares and warrants instead of cash;

-- quarterly interest payments commencing on March 31, 2004; and

-- repayment of principal in sixteen equal installments commencing
   on December 31, 2005 and ending with a final payment on
   September 30, 2009.

Subject to regulatory approval, the Company announces a private
placement of 1,113,950 units at $0.58 per unit to exercise its
option to pay the accrued interest of $646,091 on the EDC
convertible debenture with shares and warrants. Each unit consists
of one common share and one share purchase warrant. Each share
purchase warrant will entitle EDC to purchase one common share at
a price of $0.638 if exercised in 2004 or for $0.667 if exercised
in 2005. The warrants expire on December 31, 2005.

To date, the Company has closed on a $16,000,000 sale and
leaseback of its premises, raised $4,500,000 of new equity in a
private placement, renegotiated terms and reduced debt by over
$15,000,000. This quarter, the Company expects to conclude all of
the refinancing initiatives commenced last year with additional
new equity from the exercise of outstanding warrants being used to
partially repay a convertible debenture and other debt. The
partial repayment of the convertible debenture by February 15,
2004 will trigger forgiveness of approximately $1,450,000 of debt
and accrued interest.

Operationally, the Company has continued to invest in productivity
improvements and strategic outsourcing to reduce costs. These
operational improvements, combined with the refinancing and
projected revenue increases from previously announced new
contracts, position the Company well for growth and profitability
in 2004.

Avcorp Industries Inc. is a Canadian aerospace industry
manufacturer. The Company is a single-source supplier for
engineering design, manufacture and assembly of subassemblies and
complex major structures for aircraft manufacturers. For more
information, please visit http://www.avcorp.com/  

At September 30, 2003, Avcorp Industries' balance sheet shows that
its total current liabilities outweighed its total current assets
by about C$7,784,000 compared to C$26 million as of June 30, 2003.


AVITAR INC: Fiscal Year 2003 Net Loss Widens to $6.4 Million
------------------------------------------------------------
Avitar, Inc. (Amex: AVR) announced financial results for the three
and 12 months ended September 30, 2003.

For the year ended September 30, 2003, Avitar reported revenues of
$4.6 million from continuing operations compared to $8.3 million
from continuing operations for the year ended September 30, 2002
(which included approximately $2 million of purchases by a major
customer to fulfill the initial terms of its agreement).

Operating loss from continuing operations for amounted to $3.2
million versus $4.0.  The net loss was $6.4 million, or $0.12 a
share, for the year ended September 30, 2003 compared with net
loss of $4.1 million, or $0.11 a share for the year ended
September 30, 2002.  The net loss for the twelve months ended
September 30, 2003 included a loss from the disposal of
discontinued operations of $895,000, interest and financing costs
of $1,306,000 from the discount and deferred financing costs
associated with the conversion of convertible long-term notes and
a charge of $650,000 for a change in accounting principle related
to goodwill.

Revenues from continuing operations for the fourth quarter of
fiscal 2003 were $1.1 million compared to $1.6 million from
continuing operations in the prior year's fourth fiscal quarter
ended September 30, 2002.  Operating loss from continuing
operations was $.4 million versus $1.4 million.  The net loss was
$2.7 million, or $0.05 per share, for the quarter ended
September 30, 2003 compared with net loss of $1.4 million, or
$0.04 per share, for the quarter ended September 30, 2002.   The
net loss for the quarter ended September 30, 2003 included the
loss from discontinued operations of $895,000 and interest and
financing costs of $1,306,000 from the discount and deferred
financing costs associated with the conversion of convertible
long-term notes.

Peter P. Phildius, Chairman and CEO commented, "Our revenues
during the year and quarter ended September 30, 2003, reflect the
impact of the slower rate of new hiring in the U.S. economy.  
Additionally, in order to conserve capital until new sources of
adequate capital are obtained, we have significantly reduced our
SG&A expenses.  The positive result of this has been to reduce our
operating loss of on-going operations during the quarter to
$400,000, a decrease of $1 million compared to the same quarter of
the previous year.  As we secure the necessary growth capital, we
will invest in sales and marketing resources which will enable us
to grow from a much lower fixed cost base."

Avitar, Inc. develops, manufactures and markets innovative and
proprietary products in the oral fluid diagnostic market, disease
and clinical testing market, and customized polyurethane
applications used in the wound dressing industry. Oral fluid
diagnostics includes the estimated $1.5 billion drugs-of-abuse
testing market, which encompasses the corporate workplace and
criminal justice markets. Avitar's products include
ORALscreen(TM), the world's first non-invasive, rapid, onsite oral
fluid test for drugs-of-abuse. Additionally, Avitar manufactures
and markets HYDRASORB(TM) an absorbent topical dressing for
moderate to heavy exudating wounds. In the estimated $25 billion
in vitro diagnostics market, Avitar is developing diagnostic
strategies for disease and clinical testing. Some examples include
influenza, diabetes and pregnancy. For more information, see
Avitar's Web site at http://www.avitarinc.com/

                          *    *    *

            Liquidity and Going Concern Uncertainty

In its Annual Report for Fiscal Year 2003 filed on SEC Form 10-
KSB, Avitar, Inc., reported:

"At September 30, 2003, the Company had working capital
deficiencies of $630,741 and cash and cash equivalents of
$1,130,919. Net cash used in operating activities during Fiscal
2003 amounted to $2,452,054, resulting primarily from a net loss
of $6,462,101, an increase in USDTL net assets of $108,841 and an
increase in other assets of $78,008; partially offset by the
cumulative effect of change in accounting principle of $650,000,  
loss from the disposal of discontinued operation of $895,000,
depreciation and amortization of $169,081, common stock and
warrants issued for services, placement agent fees and interest on  
short-term and long-term debt of $1,474,280, a decrease in
accounts receivable of $449,558, a decrease in inventories of
$264,694, a decrease in prepaid expenses and other current assets
of $7,938, an increase in accounts payable and accrued expenses of
$93,485 and an increase in deferred revenue of $177,750.  Net cash
provided by financing and investing activities during Fiscal 2003
was $3,079,769, which included proceeds from the sale of preferred  
stock, common stock and warrants of $2,153,947, proceeds from the
conversion of long-term convertible notes of $955,000, proceeds
from the exercise of warrants of $128,813; offset in part by
repayment of short-term debt of $135,131; repayment of long-term  
debt of $14,301 and purchases of property and equipment of $8,559.

"During Fiscal 2004, the Company's cash requirements are expected
to include primarily the funding of operating losses, the payment
of outstanding accounts payable, the repayment of certain notes
payable, the funding of operating capital to grow the Company's
drugs of abuse testing products and services, and the continued  
funding for the development of its ORALscreen product line. The
cash available at September 30, 2003 along with the proceeds from
the sale of USDTL and anticipated customer receipts is expected to
be sufficient to fund the operations of the Company through
February 2004. As part of the agreement covering the  preferred  
stock sold in September 2003, the investor agreed to purchase
additional preferred stock for $1,000,000 upon receipt of
shareholder approval. Beyond that time, the Company will require  
significant additional financing from outside sources to fund its  
operations. The Company plans to continue working with placement
agents and/or investment fund managers in order to raise
approximately $10 million during the remainder of Fiscal 2004 from
the sales of equity and/or debt securities. The Company plans to
use the proceeds from these financings to provide working capital
and capital equipment funding to operate the Company, to expand
the Company's business, to further develop and enhance the
ORALscreen drug screening systems and to pursue the development of
in-vitro oral fluid diagnostic testing products. However, there
can be no assurance that these financings will be achieved.

"Operating revenues are expected to remain at the current levels
for the first half of Fiscal 2004 and then begin to grow as
employment begins to rise in the United States  and the Company  
is able to  convert  employers  to using ORALscreen, Avitar's oral
fluid drug testing products.  In order to achieve the revenue
growth, the Company will need to significantly increase its direct
sales force and implement an expanded,  targeted marketing
program.  ORALscreen, as an instant on-site  diagnostic  test, is
part of the fastest growing segment of the diagnostic  test
market.  Inventories  are currently at  appropriate  levels for
anticipated sales volumes and the Company,  with its production
capacity and the arrangements with its current contract
manufacturing sources, expects to be able to maintain  inventories
at optimal levels.  Based on current sales, expense and cash flow  
projections,  the Company believes that the current level of cash
and cash-equivalents on hand and most importantly, a portion of
the anticipated net proceeds from  the financing mentioned above  
would  be  sufficient to fund operations until the Company
achieves  profitability.  There can be no assurance that the
Company will consummate the above-mentioned  financing,  or that
any or all of the net proceeds sought thereby will be obtained.
Furthermore, the can be no  assurance that the Company  will have  
sufficient  resources to achieve the growth in revenue while  
maintaining the cost reductions implemented in Fiscal 2003. Once
the Company achieves profitability, the longer-term cash
requirements of the Company to fund operating activities,  
purchase capital equipment, expand the  existing  business  and
develop new  products are expected to be met by the anticipated
cash flow from operations and proceeds from the financings
described above.  However, because there can be no assurances that
sales will materialize as forecasted, management will continue to
closely monitor and attempt to control costs at the Company and
will continue to actively seek the needed additional capital.

"As a result of the Company's recurring losses from operations and
working capital deficit, the report of its independent certified  
public accountants relating to the financial statements for Fiscal
2003 contains an explanatory paragraph stating substantial doubt
about the Company's ability to continue as a going concern. Such
report states that the ultimate outcome of this matter could
not be determined as the date of such report. The Company's plans
to address the situation  are presented above. However, there are
no assurances that these endeavors will be successful or
sufficient."


BESTNET COMMS: First-Quarter 2004 Results Show Continued Growth
---------------------------------------------------------------
BestNet Communications Corporation (OTC Bulletin Board: BESC), a
provider of patented and proprietary global communication
solutions, announces results for the first quarter of fiscal 2004.

BestNet achieved record revenue for the first quarter totaling
$545,000, an increase of 82% compared to the first quarter 2003.  
First quarter 2004 revenue also increased by 18% as compared to
the fourth quarter of fiscal 2003.  Gross margins improved
substantially to 31% as compared to 4% for the first quarter of
fiscal 2003 and 19% for the fourth quarter of fiscal 2003. BestNet
believes it can maintain gross margins of 31% to 35% while
concentrating on revenue growth.  Enrollments for the first
quarter also increased by 15% as compared to enrollments in the
fourth quarter of 2003 as well as 51% growth over first quarter of
fiscal year 2003.

Robert A. Blanchard, President and CEO of BestNet Communications
commented, "As we review the fiscal 2003 performance, overall
revenue growth for fiscal 2003 was up 38% over fiscal 2002, while
gross margin percent increased by approximately 44% during that
same time.  We have taken the momentum from last fiscal year and
continued it in the first quarter of 2004. We are pleased with our
revenue growth in the first quarter and very pleased with the
improvement in our gross margins.  We continue to take aggressive
steps to surpass the break even mark.  Continued growth of new
customers is another strong indicator that the value brought by
BestNet around the globe is being adopted at an ever increasing
rate."

Blanchard added, "We have also made significant progress towards
our corporate goals and have worked together with our new board of
directors to remove barriers to further growth and achievement of
profitability.  The settlement of the arbitration with Softalk,
Inc., increased revenue, improved gross margins, growth in new
accounts and a recent letter of intent for additional financing
all point towards a formula for larger success for BestNet and its
shareholders."

BestNet Communications is a global solutions provider of long
distance; conference calling, ClicktoPhone and custom application-
based communication services.  BestNet's services are accessed
worldwide via the Internet and wireless devices and are delivered
using standard phone lines and equipment. This results in a cost
effective high quality service for both businesses and consumers.

Under the brand name Bestnetcall(TM) --
http://www.bestnetcall.com/-- the patented services offer  
subscribers premium quality calls and conference calling, at
significantly lower rates.  Calls and conference calls can also be
launched via a desktop application or handheld devices including
Palm(TM), Pocket PC(R) and Blackberry(TM) and used with any
standard or wireless phone.  In addition the company's new
ClicktoPhone(TM) service -- http://www.ClicktoPhone.com/--  
enables clients to add secure and anonymous voice communication
connectivity anywhere in the world to web sites, web banners,
pictures, electronic documents,

BestNet Communications' November 30, 2003 balance sheet shows that
total current liabilities exceeded its total current assets by
about $176,000.

                            *    *    *

                    Going Concern Uncertainty

In a Form 10-KSB filed with the Securities and Exchange
Commission, BestNet Communications reported:

"The [Company's] consolidated financial statements have been
prepared assuming the Company will continue as a going concern.
The Company has incurred losses from operations over the past
several years and anticipates additional losses in fiscal 2004 and
prior to achieving break even. Management has been historically
successful in obtaining financing and has implemented a number of
cost-cutting initiatives to reduce working capital needs. The
Company requires and continues to pursue additional capital for
payment of current obligations, growth and achievement of
breakeven."
    

BION ENVIRONMENTAL: Relocates Main Office to Crestone, Colorado
---------------------------------------------------------------
Effective January 1, 2004, Bion Environmental Technologies Inc.
(including all of its subsidiaries) is closing its office in New
York City.

The Company's main corporate office will be located at the home
address of the Company's president, Mark A. Smith, at 1775
Summitview Way, PO Box 566, Crestone, Colorado 81131.  

All employees and consultants to the Company (including its
subsidiaries) will work from their homes or private business
offices. Telephone messages will be taken at 212-758-6622 and mail
addressed to the former New York City office will be forwarded to
a mail drop at P.O. Box 323, Old Bethpage, N.Y. 11804 to be sorted
by the Company's former office manager.  The Company, which
reentered the development stage over the past 24 months, is no
longer engaged in any business activities in New York.

The Company intends to file a Form 15 with the Securities &
Exchange Commission to terminate its reporting obligations under
the Securities Exchange Act of 1934 because it has fewer than 500
shareholders of record and it has had less than $10,000,000 of
assets for the last three years.

The Company's majority-owned subsidiary Centerpoint Corporation
intends to take steps to facilitate delivery of the 1,900,000
shares of its restricted common stock that it owns to its
shareholders of record on December 31, 2003(including the Company)
during the 2004 calendar year.  However, there is no assurance
such delivery will take place. If appropriate, Centerpoint will
escrow the Bion Shares for the benefit of its shareholders of
record as of December 31, 2003 pending such delivery.

During late November/early December 2003 Bion installed and began
operating additional aeration units and additional screening units
at the second generation Bion Nutrient Management System on the
Devries Dairy in Texas (which milks approximately 1150 cows).  
Initial start-up occurred during July 2003, the biology of this
installation began to mature in the early fall of 2003 and the
installation has now been modified to optimize performance. The
purpose of this installation is to demonstrate the capacity of the
Company's second generation NMS to remove nutrients (primarily
nitrogen and phosphorus) from the waste stream. Verifiable results
are anticipated during the first calendar quarter of 2004.  The
Company considers the success of this system at the Devries Dairy
in Texas to be extremely important in demonstrating the
effectiveness of the Bion NMS and essential for the Company's
survival and success.

Bion Environmental Technologies, Inc. was incorporated in 1987 in
the State of Colorado. The Company is in the process of developing
and testing a second generation of its technology to provide waste
management solutions to the agricultural industry, focusing on
livestock waste from confined animal feeding operations, such as
large dairy and hog farms.  In the past the Company has engaged in
two main areas of activity by utilizing the first generation of
its technology (which the Company discontinued marketing during
calendar year 2001) and which areas it intends to re-enter during
the current fiscal year pending results of field testing its
second generation NMS technology during fiscal year 2004.

                         *    *    *

                  Going Concern Uncertainty

As reported in Troubled Company Reporter's December 8, 2003
edition, the Company has been suffering from severe financial
difficulties since approximately January of 2003.  These financial
difficulties resulted in the resignation of nearly all of the
Company's officers and directors during February and March of
2003, and the termination of most of its employees.  The Company
has retained a core technical staff, but has drastically curtailed
its business activities to include only those activities that are
directly needed to complete development and testing of the
Company's second generation technology.

The Company's financial difficulties resulted primarily from its
inability to raise additional funds due to contractual anti-
dilution provisions that were contained in the agreements related
to the financing transactions that were completed in January of
2002 which provisions prevented any reasonable financing from
being completed.  When the Company became aware of the negative
implications of these anti-dilution provisions while attempting to
structure a planned financing (which financing attempts ultimately
failed during January 2003), the Company attempted to either find
alternative financing methods which could be reasonably completed
and/or negotiate an amendment to such provisions.  After many
months of negotiations, agreements related to amending such
provisions were entered into during the spring of 2003 and the
provisions were finally amended effective August 27, 2003.

Although the Company was able to complete a small financing
through one of its subsidiaries during August of 2003 (with minor
additional funding during early November 2003) which has allowed
it to continue limited work on its second generation technology,
the Company's operations have been severely damaged during the
past year.  In order to continue with business activities, the
Company has had to structure interim financing on extremely
dilutive terms. The Company still faces a severe working capital
shortage and since it has no revenues will need to obtain
additional capital to satisfy its existing creditors.  There is no
assurance that the Company will be able to obtain the funds that
it needs to stay in business or to successfully develop its
business.

There is substantial doubt about the Company's ability to continue
as a going concern. The Company's consolidated financial
statements do not include any adjustments relating to the
recoverability or classification of asset carrying amounts or the
amounts and classification of liabilities that may result should
the Company be unable to continue as a going concern.

The Company has a stockholders' deficit of $2,789,931, accumulated
deficit of $61,137,170 limited current revenues and substantial
current operating losses. Operations are not currently profitable;
therefore, readers are further cautioned that Bion's continued
existence is uncertain if it is not successful in obtaining
outside funding in an amount sufficient for it to meet its
operating expenses at its current level.


BRIDGE: Plan Administrator Sues ADP Inc. to Recoup $3.7 Million
---------------------------------------------------------------
As part of their operations, the Bridge Information Systems
Debtors retained the services of ADP, Inc. for payroll and tax
filing processing.  ADP also provided services related to the
exchanges by which the Debtors' customers accessed data.

Cynthia A. Fonner, Esq., at Foley & Lardner, in Chicago,
Illinois, informs the Court that these Debtors made money
transfers to ADP totaling these amounts:

   Debtor                                      Transfers
   ------                                      ---------
   BIS America Administration, Inc.            $1,193,420
   TLR Administration                               1,832
   WSOD Administration, Inc.                    2,514,773

Ms. Fonner contends that the BIS Transfers, the TLR Transfers and
the WSOD Transfers are avoidable pursuant to Section 547(b) of
the Bankruptcy Code because each transfer:

    (a) was a transfer of an interest of a Debtor in property;

    (b) was to or for the benefit of a creditor;

    (c) was for or on account of an antecedent debt owed by the
        Debtor before the transfer was made;

    (d) was made while the Debtor was insolvent;

    (e) was made on or within 90 days before the Petition Date;
        and

    (f) enabled ADP to receive more than it would have received:

          -- if these cases had been filed as Chapter 7 cases;

          -- had the transfer not been made; and

          -- had it received payment of debt to the extent
             provided by the provisions of the Bankruptcy Code.

Despite a written demand, ADP has not returned any of the
Transfers.  ADP asserted that it possesses certain affirmative
defenses, however it has not provided sufficient information to
Scott P. Peltz, the Chapter 11 Plan Administrator, to meet its
burden.

According to Ms. Fonner, Mr. Peltz may recover the Transfers from
ADP pursuant to Section 550(a)(1) of the Bankruptcy Code.  The
Plan Administrator is also entitled to recover interest accruing
at the applicable rate from December 17, 2002 to the date which
judgment is entered, excepting the time during which matters were
tolled.

Thus, Mr. Peltz asks the Court to enter a judgment in his favor
and against ADP equal to $3,710,025, plus interest and costs.
(Bridge Bankruptcy News, Issue No. 55; Bankruptcy Creditors'
Service, Inc., 215/945-7000)   


CABLE & WIRELESS: Will Auction-Off Assets on January 21, 2004
-------------------------------------------------------------
Cable & Wireless USA, Inc., and its debtor-affiliates want to
sell, pursuant to an asset purchase agreement, substantially all
of their assets to Gores Asset Holdings, Inc.  The sale will be
free from all liens and encumbrances and is subject to higher and
better offers.  The Debtors also want to assume certain executory
contracts and unexpired leases and assign them to the Successful
Buyer.  

Pursuant to uniform Bidding Procedures approved by the U.S.
Bankruptcy Court for the District of Delaware, an auction for the
assets will convene on January 21, 2004, at 10:00 a.m. Eastern
Time, at the offices of Kirkland & Ellis LLP, Counsel for the
Debtors, located at Citigroup Center, 153 East 53rd Street, New
York, NY 10022-4611.  Qualified bids must be submitted on or
before Jan. 16, at 5:00 p.m.

The Honorable Charles G. Case, II, will convene a hearing to
confirm the results of the auction and consider approval of the
sale on Jan. 23, at 10:00 a.m., in Phoenix, Arizona.  

Cable & Wireless America is one of the leading providers of
complex hosting and IP solutions for global enterprises. Cable &
Wireless America comprises Cable & Wireless USA Inc. and Cable &
Wireless Internet Services, Inc.

Cable & Wireless USA, Inc., and five of its affiliates filed
Chapter 11 protection on December 8, 2003, in the U.S. Bankruptcy
Court for the District of Delaware (Bankr. Lead Case No.
03-13711). Curtis A. Hehn, Esq., and Laura Davis Jones, Esq.,
at Pachulski Stang Ziehl Young Jones, represent the Debtors in
their chapter 11 proceeding.


CARAUSTAR INDUSTRIES: Shuts Down Cedartown, Ga., Paperboard Mill
----------------------------------------------------------------
Caraustar Industries, Inc. (Nasdaq: CSAR) announced the closure of
Cedartown Paperboard in Cedartown, Georgia, a recycled uncoated
paperboard manufacturing facility with an annual capacity of 28
thousand tons.  

All of the paperboard produced at this facility had been consumed
internally by Caraustar converting operations and will be
relocated to improve capacity utilization at other Caraustar
paperboard mills.

The closure of Cedartown Paperboard is part of previously
announced activities to rationalize operations to better utilize
capacity and achieve greater cost efficiencies.  Associated with
this mill closure, Caraustar will record a pre-tax charge of
approximately $3 million, of which approximately $2.5 million will
be non-cash.  This rationalization is expected to generate an
estimated $2 million in annual pre-tax cash savings.  The closure
will affect approximately 43 employees.

Caraustar (S&P, BB Corporate Credit Rating, Negative Outlook), a
recycled packaging company, is one of the largest and most cost-
effective manufacturers and converters of recycled paperboard and
recycled packaging products in the United States.  The company has
developed its leadership position in the industry through
diversification and integration from raw materials to finished
products.  Caraustar serves the four principal recycled paperboard
product markets:  tubes, cores and cans; folding carton and custom
packaging; gypsum wallboard facing paper; and miscellaneous "other
specialty" and converted products.


CHESAPEAKE ENERGY: Reports Final Sr. Debt Exchange Offer Results
----------------------------------------------------------------
Chesapeake Energy Corporation (NYSE: CHK) announced that pursuant
to its previously announced exchange offer for its 8.125% Senior
Notes due April 1, 2011 (CUSIP # 165167AS6), it received valid
tenders of approximately $458.5 million aggregate principal amount
of 2011 Notes as of January 12, 2004, the expiration date.

Approximately $71.5 million aggregate principal amount of 2011
Notes were tendered in exchange for new 7.75% Senior Notes due
2015 and approximately $387.0 million aggregate principal amount
of 2011 Notes were tendered in exchange for new 6.875% Senior
Notes due 2016.

Holders who validly tendered their 2011 Notes by 5:00 p.m.,
Eastern Standard Time, on January 9, 2004, the early participation
date, will receive, in addition to new notes, $10.00 in cash per
$1,000 principal amount of Notes validly tendered and accepted for
exchange.

The Offer expired at 12:00 midnight, Eastern Standard Time, on
January 12, 2004.  Payment for all 2011 Notes validly tendered and
accepted for exchange is expected to be made on January 14, 2004.

The terms of the Offer are described in the Company's Offer to
Exchange dated December 1, 2003, as extended by a prospectus
supplement dated December 24, 2003, copies of which may be
obtained from D.F. King & Co., Inc., the information agent for the
Offer, at (800) 431-9633 (U.S. toll-free) and (212) 269-5550
(collect).

Banc of America Securities LLC, Deutsche Bank Securities and
Lehman Brothers served as the joint lead dealer managers in
connection with the Offer.  Questions regarding the Offer may be
directed to Banc of America Securities LLC, High Yield Special
Products, at 888-292-0070 (US toll-free) and 704-388-4813
(collect), Deutsche Bank Securities, High Yield Capital Markets,
212-250-7466 (collect) or Lehman Brothers, 800-438-3242 (U.S.
toll-free) and 212-528-7581 (collect).

Chesapeake Energy Corporation (Fitch, BB- Senior Note and B
Preferred Share Ratings, Positive) is one of the six largest
independent natural gas producers in the U.S. Headquartered in
Oklahoma City, the company's operations are focused on exploratory
and developmental drilling and producing property acquisitions in
the Mid-Continent region of the United States.


COEUR D'ALENE MINES: Closes $180-Million Conv. Debt Offering
------------------------------------------------------------
Coeur d'Alene Mines Corporation (NYSE: CDE) completed its
previously announced offering of $180 million aggregate principal
amount of 1.25% Convertible Senior Notes due 2024, which includes
$20 million principal amount issued upon the exercise in full by
the underwriters of their over-allotment option.

Coeur intends to use the proceeds of the Notes for general
corporate purposes, which may include the development of its
Kensington gold project and its San Bartolome silver project, each
of which are pending the completion of updated feasibility studies
and final construction decisions.

The offering was managed by Deutsche Bank Securities.  Coeur
conducted the offering pursuant to its shelf registration
statement.  A copy of the prospectus and the accompanying
prospectus supplement related to the offering can be obtained from
Deutsche Bank Securities Inc., 60 Wall Street, New York, New York
10005.

Coeur d'Alene Mines Corporation (S&P, CCC Corporate Credit Rating,
Positive) is the world's largest primary silver producer, as well
as a significant, low-cost producer of gold, with anticipated 2003
production of 14.6 million ounces of silver and 112,000 ounces of
gold.  The Company has mining interests in Nevada, Idaho, Alaska,
Argentina, Chile and Bolivia.


COLUMBUC MCKINNON: Look for Fiscal Q3 2004 Results on Tuesday
-------------------------------------------------------------
Columbus McKinnon Corporation (Nasdaq: CMCO), will issue its
earnings release for the fiscal 2004 third quarter on Tuesday,
January 20, 2004 before the market opens.

Additionally, a teleconference/webcast has been scheduled for
January 20, 2004 at 10:00 AM Eastern Time at which the management
of Columbus McKinnon will discuss the Company's financial results
and strategy.  The webcast will be accessible at Columbus
McKinnon's Web site at http://www.cmworks.com/  

It will also be broadcast over First Call Events, a service of the
Thomson Financial Network at:

http://www.firstcallevents.com/service/ajwz396594178gf12.html/

You must have Windows Media Player or RealPlayer's audio software
on your computer to listen to the call.  Both are available for
downloading at the Columbus McKinnon web site and the First Call
Events web site at no charge.

An audio recording of the call will be available two hours after
its completion and until March 19, 2004 by dialing 1-800-925-0870.  
Alternatively, you may access an archive of the call until March
19, 2004 on Columbus McKinnon's Web site at

        http://www.cmworks.com/webcast/archive.asp/

The call will also be archived on the First Call Events web site
until March 19, 2004 at

  http://www.firstcallevents.com/service/ajwz396594178gf12.html/

Columbus McKinnon (S&P, B Corporate Credit and CCC+ Subordinated
Debt Ratings, Negative) is a leading designer and manufacturer of
material handling products, systems and services which efficiently
and ergonomically move, lift, position or secure material. Key
products include hoists, cranes, chain and forged attachments. The
Company is focused on commercial and industrial applications that
require the safety and quality provided by its superior design and
engineering know-how.  Comprehensive information on Columbus
McKinnon is available on its web site at http://www.cmworks.com/   


COVANTA: Pushing for Approval of Allied Aviation Compromise
-----------------------------------------------------------
Debtors Covanta Energy Corporation, PA Aviation Fuel Holdings,
Inc., Ogden New York Services, Inc., and Ogden Allied Maintenance
Corporation owned and operated an aviation fueling business at 22
airports in the U.S., Canada and Panama.  In December 2001,
pursuant to an Amended and Restated Ogden Aviation Fueling
Services Acquisition Agreement, Allied Aviation Holdings
Corporation acquired the shares of the business operating at 19
of those airports -- the Non-PA Businesses.  In December 2002,
pursuant to the PA Business Acquisition Agreement dated
November 14, 2002, Allied Aviation acquired the shares and
certain assets of the remaining businesses, which operated at the
three major New York City area airports -- the PA Businesses.

Consequently, on December 31, 2002, Allied Aviation delivered a
note to Covanta, which was secured by a Security Agreement among
Allied Aviation and certain Guarantors to Covanta.

On June 20, 2003, the Debtors filed an adversary proceeding
against Allied Aviation, Tampa Pipeline Corp., St. Louis Pipeline
Corp., San Antonio Pipeline Corp., SA Pipeline LP, Illinois
Petroleum Supply Corp., Idaho Pipeline Corp., Eastern
Hydroelectric Corp., Pipeline Management Corp. of T.B., and TM &
PL Holdings Corp. for various breaches of contract.  The Debtors
sought to compel the defendants to turn over their property.

In July 2003, Allied Aviation answered the complaint.  Allied
Aviation asserted that the Debtors breached certain agreements,
and sought to dismiss the complaint on the grounds that the
matters alleged in the complaint must be mediated and arbitrated,
pursuant to the Transaction Documents, rather than litigated
before the Bankruptcy Court.

On August 27, 2003, the Bankruptcy Court ordered the mediation of
the parties' dispute.  After several months of negotiations, the
Debtors and Allied Aviation agreed to settle their dispute.

At the Debtors' request, the Court approved the Settlement.  The
parties stipulate and agree that:

A. Allied Aviation will pay Covanta $1,715,000 as Settlement
   Payment.

B. Subject to Debtors' receipt of the Settlement Payment, Covanta
   and Allied Aviation agree that the PA Adjustment Amount will
   be equal to a negative number equal to the then outstanding
   amount under the Secured Note.  The Secured Note will be
   deemed satisfied and cancelled, and returned to Allied
   Aviation.  

   In addition, the Security Agreement will be terminated and,
   after receipt of the Settlement Payment, all liens will be
   released.  At Allied Aviation's expense, Covanta will
   execute and deliver to Allied Aviation the documents that
   Allied Aviation will reasonably request to evidence the
   release of the liens.  The Secured Note and the Security
   Agreement will not be deemed cancelled until the Debtors
   receive the Settlement Payment.

   If Allied Aviation fails to pay the Settlement Payment on or
   before the Payment Deadline, any unpaid interest under the
   Note will become immediately due and payable.  Allied
   Aviation will be responsible for any subsequent interest that
   accrues under the Note before its payment of the Settlement
   Payment.

C. Allied Aviation assumes any obligations or liabilities and
   defenses and rights of Covanta and its affiliates with respect
   to workers' compensation claims asserted by any current or
   former employee of the Non-PA Businesses and agrees promptly
   to reimburse Covanta for any payments made by it in respect of
   the Non-PA Workers' Compensation Claims after July 31, 2003.  

   Allied Aviation will not assume any obligation for any
   existing Non-PA Workers' Compensation Claims that, to
   Covanta's knowledge, has been asserted by a current or former
   employee of the Non-PA Businesses and is not set forth in the
   list of claims as of July 31, 2003.

D. Allied Aviation:

   (a) acknowledges that Allied Aviation Services, Inc. is
       responsible for providing retiree medical benefit
       coverage for retirees of the former operations of Ogden
       Aviation Fueling of Virginia, Inc. at Dulles airport,
       subject to all applicable rights and defenses of
       Covanta under applicable law;

   (b) guaranties AASI's obligation to provide Dulles Retiree
       Benefits, with Covanta being a third party beneficiary
       of this guaranty; and

   (c) agrees to cause AASI to assume all obligations relating
       to the Dulles Retiree Benefits and notify each affected
       retiree that Allied Aviation is responsible for
       providing and administering the Dulles Retiree Benefits.

   Allied Aviation will have no responsibility to provide Dulles
   Retiree Benefits to any retiree that, to Covanta's knowledge,
   has asserted his or her right to be entitled to the Benefits
   and is not set forth on the list of retirees entitled to the
   medical benefit coverage.

E. The parties to the Adversary Proceeding release one another.

F. Allied Aviation and Covanta acknowledge that their obligations
   under:

      (a) Section 11.6 of the Non-PA Agreement will continue
          with respect to any applicable refund or credit   
          received after January 17, 2003; and

      (b) Section 10.6 of the PA Agreement will continue with
          respect to any applicable refund or credit received
          after December 31, 2002.

G. Allied Aviation will indemnify and hold harmless Covanta and
   its affiliates and their successors from any damages in
   connection with:

   (a) any Releases or liabilities:  

       (1) at the Non-PA Business facilities or adjoining
           properties or that arise from operations at the Non-PA
           Business facilities or by the Non-PA Businesses after
           December 31, 2001; or

       (2) at the PA Business facilities or adjoining properties
           or that arise from operations at the PA Business
           facilities or by the PA Businesses after December 31,
           2002;

   (b) any claims made by Allied Aviation or its affiliates
       under Covanta's and its affiliates' insurance policies,
       including all deductibles, retentions, indemnities or
       other insurance obligations;

   (c) the Dulles Retiree Benefits and the Non-PA Workers
       Compensation Claims; and

   (d) any breach of its or its affiliates' obligations under
       the Settlement.

   Covanta will indemnify and hold harmless Allied Aviation
   and its affiliates and their successors from any damages in
   connection with any breach of its obligations under the
   Stipulation.  

H. The Adversary Proceeding and any other actions, adversary
   proceedings, contested matters, mediations, arbitrations or
   other legal proceedings between the parties will be stayed.
   The Adversary Proceeding will be dismissed with prejudice and
   without costs on the Debtors' receipt of the Settlement
   Payment.

According to Vincent E. Lazar, Esq., at Jenner & Block, LLC, in
Chicago, Illinois, the compromise will have a significant,
positive financial impact for the Debtors since:

   (a) the Debtors will receive a significant amount of cash for
       payment of certain tax refunds and the Secured Note;

   (b) the Debtors will not be responsible for any continuing
       workers' compensation claims asserted by current or former
       employees of the Non-PA Businesses;

   (c) the Debtors will not be responsible for any continuing
       retiree benefits arising from employees of the former
       operations of Ogden Aviation Fueling of Virginia, Inc. at
       the Dulles airport; and

   (d) all existing claims among the Debtors, Allied Aviation,
       and their affiliates will be released and waived, which
       will resolve protracted and costly litigation. (Covanta
       Bankruptcy News, Issue No. 45; Bankruptcy Creditors'
       Service, Inc., 215/945-7000)   


DELTA WOODSIDE: Will Publish Q2 Fiscal 2004 Results on Tuesday
--------------------------------------------------------------
Delta Woodside Industries, Inc. (NYSE: DLW) will report second
quarter fiscal 2004 results after the close of business on
Tuesday, January 20, 2004.

Bill Garrett, President and CEO, will hold an analyst conference
call on Wednesday, January 21, 2004 at 9:30 A.M. eastern time to
discuss financial results and give a business update.

The conference call will be broadcast through the company's WEB
site at the following Internet address:

     http://deltawoodside.com/investor_relations.htm

Minimum requirements to listen to the webcast are accessible to
the Internet through at least a 28.8 baud modem connection and
Real One(TM) software which, is available for free download at
http://www.real.com/  

A replay of the webcast will be available within one hour of the
call and will be archived at the above address for 30 days
following the release.

Delta Woodside Industries, Inc. -- whose corporate credit rating
is currently rated at CCC by Standard & Poor's -- is headquartered
in Greenville, South Carolina. Through its wholly owned
subsidiary, Delta Mills, it manufactures and sells textile
products for the apparel industry. The Company employs about
1,600 people and operates five plants located in South Carolina.


DII INDUSTRIES: Taps Hamilton Rabinovitz for Consulting Services
----------------------------------------------------------------
Hamilton, Rabinovitz, & Alschuler is a consulting firm that
provides analytical services focused on the estimation of claims
and the development of claims procedures with regard to payments
and assets of a claims resolution trust.  With the Court's
permission, the DII Industries and Kellogg, Brown & Root Debtors
will employ Hamilton as consultant on asbestos and silica related
matters.  The Debtors are convinced that Hamilton is well
qualified to serve as their consultant in that, among other
things, its members have assisted and advised numerous Chapter 11
debtors and creditors in the estimation of the value of claims in
other "mass tort" reorganizations.

Hamilton will render consulting services regarding the estimation
of the number and value of present and future Asbestos PI Trust
Claims and Silica PI Trust Claims, the Asbestos TDP and Silica
TDP and the financial models of payments and assets of the
Asbestos PI Trust and Silica PI Trust.  Hamilton will also
analyze and respond to issues relating to providing notice to
Claimants holding Asbestos PI Trust Claims and Silica PI Trust
Claims and assist in the development of notice procedures.

Hamilton will also assist the Debtors in negotiations with various
parties, render expert testimony and provide other advisory
services as may be requested by the Debtors from time to time.

Hamilton will be compensated for its services on an hourly basis,
in accordance with its normal billing practices:

            Senior Partners                $450
            Junior Partners                 375
            Managing Directors              325
            Principals                      275
            Directors                       250
            Managers                        200
            Senior Analysts                 175
            Analysts                        150
            Research Associates             100

Hamilton will be reimbursed for all reasonable out-of-pocket
expenses.

Hamilton Executive Vice President, Dr. Francine F. Rabinovitz,
ascertains that the firm:

    (i) does not have or represent any interest materially
        adverse to the Debtors' interests or that of their
        estates, creditors, or interest holders; and

   (ii) is a "disinterested person" as the term is defined in
        Section 101(14) of the Bankruptcy Code.

Headquartered in Houston, Texas, Kellogg, Brown & Root is engaged
in the engineering and construction business, providing a wide
range of services to energy and industrial customers and
government entities in over 100 countries. DII has no business
operations.  The Company filed for chapter 11 protection on
December 16, 2003 (Bankr. W.D. Pa. Case No. 02-12152). Jeffrey N.
Rich, Esq., Michael G. Zanic, Esq., and Eric T. Moser, Esq., at
Kirkpatrick & Lockhart LLP represent the Debtors in their
restructuring efforts.  (DII & KBR Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


EAGLE FOOD: Disclosure Statement Hearing Set for January 29, 2004
-----------------------------------------------------------------
On December 24, 2003, Eagle Food Centers, Inc., and its debtor-
affiliates filed their Joint Plan of Liquidation and an
accompanying Disclosure Statement with the U.S. Bankruptcy Court
for the Northern District of Illinois, Eastern Division.

The Honorable Pamela Hollis will convene a hearing to consider the
adequacy of the Disclosure Statement on January 29, 2004, at 11:00
a.m. Central Time.

Objections to Disclosure Statement, if any, must be received no
later than 4:00 p.m. on January 22, 2004, by the Court. Copies
must also be sent to:

        1. Counsel for the Debtors
           Skadden Arps Slate Meagher & Flom (Illinois)
           333 West Wacker Drive
           Suite 2100
           Chicago, IL 60606
           Attn: George Panagakis, Esq.

        2. The Office of the United States Trustee
           227 West Monroe Street
           Suite 3350
           Chicago, IL 60606
           Attn: M. Gretchen Silver, Esq.

        3. Counsel to the Official Committee of Unsecured
            Creditors
           Foley & Lardner
           321 North Clark Street
           Suite 2100
           Chicago, IL 606010
           Attn: William J. McKenna, Esq.

The Debtors' Disclosure Statement and Plan are available on Logan
& Co.'s Web site at http://www.loganandco.com/

Eagle Food Centers Inc., a leading regional supermarket chain
headquartered in Milan, Illinois, filed for chapter 11 protection
on April 7, 2003 (Bankr. N.D. Ill. Case No. 03-15299).  George N.
Panagakis Esq., at Skadden Arps Slate Meagher & Flom represents
the Debtors in their restructuring efforts. As of Nov. 2, 2002,
the Debtors listed $180,208,000 in assets and $177,440,000 in
debts.
           

ELIZABETH ARDEN: Completes 7-3/4% Senior Subordinated Note Offer
----------------------------------------------------------------
Elizabeth Arden, Inc. (NASDAQ: RDEN), a global prestige fragrance
and beauty products company, completed its previously announced
offering of $225 million aggregate principal amount of 7-3/4%
Senior Subordinated Notes due 2014.

The Company also has called for redemption $84,285,000 aggregate
principal amount of its 10-3/8% Senior Notes due 2007,
representing all outstanding principal amounts that have not
previously been called. The redemption date will be February 12,
2004.

The sale of the 7-3/4% Notes resulted in net proceeds to the
Company of approximately $219.0 million. The Company will use the
net proceeds from the sale of the 7-3/4% Notes to purchase any and
all 11-3/4% Senior Secured Notes due 2011 that are tendered
pursuant to its cash tender offer announced on December 24, 2003,
as well as approximately $95 million aggregate principal amount of
10-3/8% Notes. The cash tender offer expires January 22, 2004
unless extended by the Company.

The 7-3/4% Notes were sold pursuant to Rule 144A and Regulation S
under the Securities Act and have not been registered in the
United States under the Securities Act or in any other
jurisdiction and may not be offered or sold in the United States
absent registration or an applicable exemption from the
registration requirements.

Elizabeth Arden (S&P, B+ Corporate Credit and Senior Secured Debt
Ratings, Stable Outlook) is a global prestige fragrance and beauty
products company. The Company's portfolio of leading brands
includes the fragrance brands Red Door, Red Door Revealed,
Elizabeth Arden green tea, 5th Avenue, ardenbeauty, Elizabeth
Taylor's White Diamonds, Passion, Forever Elizabeth and Gardenia,
White Shoulders, Geoffrey Beene's Grey Flannel, Halston, Halston
Z-14, Unbound, PS Fine Cologne for Men, Design and Wings; the
Elizabeth Arden skin care line, including Ceramides and Eight Hour
Cream; and the Elizabeth Arden cosmetics line.


ENRON: Enters Settlements with 17 Retail Contract Counterparties
----------------------------------------------------------------
Pursuant to the Amended Safe Harbor Termination Protocol, the
Enron Corporation Debtors inform the Court that they have reached
settlements with 17 parties with respect to these Contracts:  

A. Solvay Contract

   * General Terms and Conditions of Confirmation, together
     with Confirmation for Commodity Swap No. N41569.1, dated
     March 8, 2000, between Enron North America Corporation
     and Solvay America, Inc.

B. Georgia-Pacific Contracts

   * ISDA Master Agreement between ENA and Georgia-Pacific
     Corporation, dated as of August 12, 1998, including all
     confirmations and transactions;

   * Revised Pulp Purchase/Sale Agreement - N11345.1 between
     ENA and Georgia-Pacific, as amended, effective
     December 5, 2000;

   * Guaranty by Enron Corporation of ENA's obligations under
     the Georgia-Pacific ISDA Master Agreement, in favor of
     Georgia-Pacific, dated as of August 12, 1998; and

   * Guaranty by Enron of ENA's obligations under contracts
     involving deliveries of pulp and paper, in favor of
     Georgia-Pacific, dated as of October 1, 1999.

C. Rainbow Contracts

   * Master Power Purchase and Sale Agreement dated October 13,
     2000 between Enron Power Marketing, Inc., and Rainbow
     Energy Marketing Corporation, including all Transactions
     and confirmations; and

   * Guarantee Agreement dated November 13, 1996 from Enron
     in favor of Rainbow.

D. ICC Contract

   * Enfolio Master Firm Purchase/Sale Agreement dated as of
     February 1, 1995 between ENA and ICC Energy Corporation.

E. Fresh Express Contracts

   * EEI Master Power Purchase and Sale Agreement dated
     September 27, 2001 between Enron Power Marketing Inc. and
     Fresh Express Incorporated and all confirmations,
     including Deal No. 802748.01; and

   * Guaranty Agreement dated September 27, 2001 from Enron in
     favor of Fresh Express.

F. El Paso Contracts

   * ENA Upstream Company LLC's Invoices No. 9141SA dated
     December 28, 2001 and Nos. 7938SA dated December 10, 2001
     to El Paso Merchant Energy LP;

   * Nine Confirmations, together with Enfolio "Spot" General
     Terms & Conditions, between ENA Upstream and El Paso; and

   * Guaranty of Enron, dated January 10, 2000, as amended,
     for $20,000,000 in favor of El Paso.

G. NJR Contracts

   * Limited Master Agreement dated effective August 25, 1994,
     between Enron Risk Management Corporation, now known as
     ENA, and NJR Energy Corporation;

   * Guaranty Agreement, dated August 25, 1994 from New Jersey
     Resources Corporation in support of NJR for $15,000,000;
     and

   * Guaranty Agreement dated August 25, 1994 from Enron in
     support of Enron Risk for $15,000,000.

H. EDF Contracts

   * One Oil Contract, 15 Coal Contracts, 22 Freight Contracts
     and 22 Power Contracts between EDF Trading Limited and
     Enron Capital and Trade Resources International Corporation.

I. Thiele Contracts

   * Oral Agreement on April 26, 2001 between ENA and Thiele
     Kolin Company; and

   * Confirmation letter ENA sent to Thiele Kaolin dated as of
     June 19, 2001, incorporating ENA's Enfolio Firm General
     Terms and Conditions.

J. Empire Contracts

   * All transactions between ENA and Empire District Electric
     Company that were subject to Enfolio Master Firm
     Purchase/Sale Agreement, effective as of June 1, 2001.

K. Sprague Energy Contracts

   * ENA/U.S. Counterparty Annex A General Terms and Conditions
     between ENA and Sprague Energy Corporation, as the same
     relates to physical gas and financial gas Confirmations;

   * Base Contract for Short-Term Sale and Purchase of Natural
     Gas dated January 1, 1998, between ENA and Sprague;

   * Enfolio Firm General Terms and Conditions between ENA and
     Sprague and all transactions executed thereunder, including
     but not limited to, Deal Nos. YC7501.1, YC7504.1, YD9169.1
     and Y66767;

   * Base Contract for Short-Term Sale and Purchase of Natural
     Gas dated September 1, 2000 between EESI and Sprague; and

   * Guaranty capped at $8,000,000 executed by Enron in favor of
     Sprague, effective as of October 6, 2000, as amended by
     Amendment to Guaranty dated October 1, 2001, which Guaranty
     secured the obligations of ENA, EESI, Enron Liquid Fuels,
     Inc., Enron Canada Corp. and Clinton Energy Management
     Services, Inc., under certain agreements with Sprague
     relating to the purchase or sale of natural gas or
     petroleum products.

L. Edgewood Contract

   * Confirmation Pulp, Paper and Wood Products Purchase and
     Sale Transaction dated October 29, 2001, between ENA and
     Edgewood Paper Company, Inc., together with the Enron
     Industrial Markets General Terms and Conditions for All
     Commodities.

M. Berg Mill Contracts

   * Five Confirmation Pulp, Paper and Wood Products Purchase
     and Sale Transactions between ENA and Berg Mill Supply Co.,
     Inc.

N. IESI Contracts

   * Confirmation dated January 29, 1999, as amended on March 7,
     2000, by and between ENA and IESI Corporation, formerly
     known as IESI Holding Corporation.

O. Aries Resources Contracts

   * Confirmation Letter Agreement dated June 13, 2000 between
     Aries Resources LLC and ENA; and

   * Guaranty, dated as of June 2, 1999, made and entered into
     by Enron Corp. in favor of Aries Resources in an amount not
     to exceed $15,000,000.

P. Kongsberg Contract

   * Contract between Kongsberg Energi Eiendon AS and Enron
     Nordic Energy dated March 27, 1998.

Q. Otter Tail Contracts

   * 17 Confirmations between Enron Power Marketing, Inc. and
     Otter Tail Power Company; and

   * Guarantee from Enron Corp. for $5,000,000 dated August 23,
     2000 in favor of Otter Tail.

The Settlements provide that:

   (a) Solvay will pay to ENA $550,000.

   (b) Georgia-Pacific will pay to ENA $937,007;

   (c) Rainbow will pay to EPMI $475,000;

   (d) ICC Energy will pay to ENA $782,000;

   (e) Fresh Express will pay to EPMI $45,000;

   (f) El Paso will pay to ENA Upstream $3,655,000;

   (g) NJR will pay to ENA $250,000;

   (h) EDF Trading will pay to ECTRIC $350,000;

   (i) Thiele Kaolin will pay to ENA $1,200,000;

   (j) Empire will pay to ENA $1,000,000;

   (k) Sprague will pay to ENA $733,867;

   (l) Edgewood will pay to ENA $22,737;

   (m) Berg Mill will pay to ENA $25,734;

   (n) IESI will pay to ENA $50,000.  In addition, IESI's Claim
       No. 13675 for $57,050 will be deemed irrevocably
       withdrawn, with prejudice, and to the extent applicable,
       expunged;

   (o) No payment will be made in connection with the Aries
       Settlement Agreement.  However, Aries Resources' Proof of
       Claim No. 6685 against ENA for $18,393 will be deemed
       irrevocably withdrawn, with prejudice;

   (p) Enron Nordic will be entitled to NOK7,000,000.  However,
       as a result of Enron Nordic's draw of NOK7,500,000 on a
       guarantee issued in respect of the Contract, Enron Nordic
       will repay Kongsberg NOK500,000; and

   (q) Otter Tail will pay to EPMI $75,000.

The Debtors and the Counterparties will also exchange mutual
releases of claims with respect to the Contracts. (Enron
Bankruptcy News, Issue No. 92; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


ENRON CORP: Selling Hanover Partnership Interest for $4.4 Mill.
---------------------------------------------------------------
Enron North America Corporation, as Seller, and Enron Corporation
ask the Court to:

   (a) authorize the sale and assignment of ENA's partnership
       interests in Hanover Measurement Services Company LP,
       free and clear of any liens, claims, interests and
       restrictions; and

   (b) approve the Partnership Interest Purchase Agreement
       between ENA and EMS Pipeline Services LLC.

The contemplated sale is subject to higher and better offers and
any additional marketing efforts required by either the Court or
the Official Committee of Unsecured Creditors.

ENA owns a 44.422% Class A limited partnership interest and a
1.0% Class B limited partnership interest in Hanover, subject to
the obligations of the Limited Partnership Agreement of the
Partnership dated August 31, 1999, as amended, by and between
Houston Pipe Line Company and Hanover.  ENA is a party to this
Partnership Agreement.

Herbert K. Ryder, Esq., at LeBoeuf Lamb Greene & MacRae LLP, in
New York, relates that ENA contacted about 16 companies that had
expressed an interest in the Partnership Interests or were likely
candidates to purchase the Partnership Interests.  EMS offered
the highest and best bid for the Partnership Interests.  As a
result of these efforts, the Debtors are convinced that a prompt
sale of the Partnership Interests is the best way to maximize
value, and the sale to EMS under the terms and conditions of the
Purchase Agreement constitutes the highest and best offer
received so far for the Partnership Interests.

The salient terms of the Purchase Agreement are:

A. Purchase Price

   EMS will pay at Closing $4,400,000, decreased to the extent
   the amount of ENA's Proportional Share of the Long-Term
   Indebtedness at the Closing Date exceeds $272,400, and
   increased to the extent ENA's Proportional Share of Long-Term
   Indebtedness as of the Closing Date is less than $272,400.  
   The Purchase Price will be adjusted for working capital
   pursuant to the Purchase Price Adjustment mechanism.

B. Deposit

   EMS agree to deliver to ENA irrevocable letters of credit in
   the aggregate face amount of $440,000 and having an
   expiration date not sooner than March 1, 2004.  The parties
   also agreed on the terms by which ENA may make drawdowns for
   the entire Deposit available to it under the Deposit Letters
   of Credit and return the undrawn Deposit Letters of Credit
   to EMS.

C. Letters of Credit

   EMS agree to deliver to ENA irrevocable letters of credit in
   the aggregate face amount of Purchase Price minus the Deposit
   and having an expiration date not sooner than March 1, 2004
   -- the Security Letters of Credit.  The Purchase Agreement
   provides the terms by which ENA may make drawdowns for the
   entire amount available to it under the Security Letters of
   Credit and by which it will return the undrawn Security
   Letters of Credit to EMS.

D. Escrowed Amount

   At Closing, concurrently with ENA's return of the undrawn
   Letters of Credit, each marked "cancelled" to EMS, EMS will
   deposit $200,000 with the Escrow Agent.

E. Payment of Purchase Price

   Upon satisfaction of the closing conditions, the parties
   agree to execute and deliver the Closing Notice two days
   prior to the Closing Date to the selected bank regarding the
   cancellation of the undrawn Letters of Credit and delivery of
   the Purchase Price reduced by the Escrow Amount.  At Closing,
   EMS will transfer the Purchase Price reduced by the Escrowed
   Amount, by wire transfer into an ENA-designated account.  In
   the alternative, ENA may drawdown on the Letters of Credit
   for Closing to occur.

F. Purchase Price Adjustment

   Subject to the dispute procedures, the Purchase Price will be
   increased to the extent the Proportional Net Working Capital
   of the Partnership as of December 31, 2003 exceeds the
   Proportional Net Working Capital of the Partnership as of
   February 28, 2003, and decreased to the extent the
   Proportional Net Working Capital as of the effective date is
   less than that as of February 28, 2003.  The increase or
   decrease should not be more than the Escrowed Amount.  The
   Purchase Price, as decreased or increased will be the "Final
   Price."

G. Adjustments to the Closing Balance Sheet

   The Closing Balance Sheet will be prepared as of December 31,
   2003 -- the Effective Date -- in accordance with GAAP.  The
   Proportional Net Working Capital as of the Effective Date
   will be determined in a manner consistent with the
   Calculation of Proportional Net Working Capital as of
   February 28, 2003 and:

   (a) there will be no adjustments for extraordinary charges
       after February 28, 2003;

   (b) any increase in assets as a result of unrealized gains,
       translation adjustments, reversals of accruals for
       contingent liabilities or changes of accounting will not
       be considered;

   (c) any amounts paid or payable by the Partnership to
       purchase outstanding employee partnership interests will
       not be considered; and

   (e) ENA will receive credit on the Closing Balance Sheet for
       an amount equal to its Proportional Share of the Net LUAF
       Bonus.

H. Termination of Agreement

   The Purchase Agreement may be terminated prior to the Closing
   Date by:

   (a) the mutual written consent of the Parties;

   (b) either party if the Closing has not occurred on or
       before February 1, 2004, provided that the terminating
       party is not in default of its obligations.  If the Court
       failed to enter an order by February 1, 2004, neither
       party may terminate the Purchase Agreement prior to
       March 1, 2004;

   (c) either party if there will be any applicable law that
       makes consummation of the contemplated transactions
       illegal or otherwise prohibited or if any Order is
       entered by a Governmental Authority permanently
       restraining, prohibiting or enjoining either party from
       consummating the transactions; or

   (d) ENA after the Court approves a superior transaction or
       EMS upon the financial closing of the superior
       transaction;

I. Break-up Fee

   In the event the Purchase Agreement is terminated by either
   party with the closing of an Alternative Transaction, ENA
   agrees to pay to EMS an amount equal to 3% of the Purchase
   Price on the date of financial closing of the Alternative
   Transaction; provided, however, that any Break-up Fee will
   not be due and payable if:

   (a) a Purchaser Material Adverse Effect occurred; or

   (b) if EMS failed to provide and maintain one or more letters
       of credit in the aggregate amount of the Purchase Price.

Mr. Ryder contends that the contemplated transaction is fair and
reasonable given that:

   (i) aside from the DIP Financing, ENA is not aware of any
       liens, claims and encumbrances relating to the
       Partnership Interests;

  (ii) the transfer and assignment of the Partnership Interests
       and the rights and obligations under the Partnership
       Agreement on the term set forth in the Assignment and
       Assumption Agreement will provide non-debtor parties, if
       any, with adequate assurance of future performance of the
       Partnership Interests and the related rights and
       obligations under the Performance Agreement within the
       meaning of Section 365(b)(1)(C) of the Bankruptcy Code;

(iii) EMS is a good faith purchaser with the terms of the
       Purchase Agreement created by ENA for purposes of the
       auction; and

  (iv) inasmuch as the sale of the Partnership Interests is
       subject to higher or better offers and any additional
       marketing efforts are required, the Debtors are ensured
       of realizing the best price obtainable for the
       Partnership Interests. (Enron Bankruptcy News, Issue No.
       93; Bankruptcy Creditors' Service, Inc., 215/945-7000)


FEDERAL-MOGUL: Appoints Robert S. Miller, Jr. as Board Chairman
---------------------------------------------------------------
Federal-Mogul Corporation (OTC Bulletin Board: FMDLQ) announced
that its Board of Directors has elected Robert S. (Steve) Miller,
Jr., 62, as non-executive chairman of the board of directors
effective January 11, 2004.

Miller has been a member of Federal-Mogul's board since 1993. He
replaces Frank E. Macher, 62, who has been serving as chairman of
the board since October 1, 2001. Miller's election coincides with
the expiration of Macher's contract. The board members expressed
their appreciation for Macher's contributions during his tenure.

Miller was non-executive chairman of the board from January 11,
2001 to October 1, 2001, after serving briefly as interim chairman
and chief executive officer for Federal-Mogul. He was formerly
chairman and chief executive officer of Bethlehem Steel
Corporation. He is also a member of the board of directors for
Pope & Talbot, Inc., Symantec Corporation, UAL (United Airlines),
Waste Management, Inc. and RJ Reynolds Tobacco Holdings.

The board also said that Miller's leadership and expertise in
financial restructuring will be an asset to Federal-Mogul as the
company moves through the final stages of its bankruptcy process
and emergence.

Chip McClure, 50, chief executive officer and president of
Federal-Mogul, and a member of the company's board of directors
since January 11, 2001, said, "I look forward to continuing to
work with Steve, the board members and the co-proponents of the
plan of reorganization to ensure the success of Federal- Mogul's
operations and its emergence from Chapter 11."

Federal-Mogul is a global supplier of automotive components, sub-
systems, modules and systems serving the world's original
equipment manufacturers and the aftermarket. The company utilizes
its engineering and materials expertise, proprietary technology,
manufacturing skill, distribution flexibility and marketing power
to deliver products, brands and services of value to its
customers. Federal-Mogul is focused on the globalization of its
teams, products and processes to bring greater opportunities for
its customers and employees, and value to its constituents.
Headquartered in Southfield, Michigan, Federal-Mogul was founded
in Detroit in 1899 and today employs more than 45,000 people in 24
countries. For more information on Federal-Mogul, visit the
company's Web site at http://www.federal-mogul.com/


FIVE STAR RESTAURANT: Tranzon Auctioning-Off 12 Restaurants
-----------------------------------------------------------
Entry into some of Houston's prime commercial centers just got
easier with the announcement of the planned January 28 sealed-bid
auction of Five Star Restaurant Group's remaining 12 restaurant
properties.

Organized by Tranzon, LLC -- one of the nation's largest
accelerated marketing and auction companies -- the auction sale is
under the domain of Houston, TX-based Tranzon VenueBid.

Kelly Toney, vice president of Tranzon VenueBid, says the
restaurants are divided into two chains: the popular, local Marcos
Tex-Mex restaurants and greater Houston's The Original Pasta
Company.

"Revenues for these chains were up this holiday season over 2002
and in the hands of the right buyers, those figures could nearly
double," according to Toney, who says a Tranzon goal is to sell
the restaurants as ongoing concerns.

Five Star's President John Schwartz, of Sugar Land, says the
restaurants come with a built-in clientele and good brand identity
in the greater Houston region.

The suburban-based Marcos chain launched 20 years ago and features
casual, Old-Style Mexican food that remains a top local favorite.

"With a population of nearly three million -- about half of which
is Hispanic -- and our proximity to Mexico, Houston is a section
of the country where Mexican food is so interwoven into our
culture it's not considered exotic. In fact, research shows diners
here will select a Mexican restaurant with the same frequency as
those serving Italian or American fare, unlike other parts of the
country where people may opt for Tex-Mex once a month," says
Schwartz.

There are seven available Marcos locations including a prime one
on Kirby Drive across from Reliant Stadium - home of Super Bowl
XXXVIII. They come with full liquor licenses, average 5,000 in
square feet and generate weekly revenues in the $13,000 - $24,000
range.

The first of The Original Pasta Company restaurants opened a
decade ago. Five are now for sale either as a package or
individually. Even the name could be bought and the concept
franchised elsewhere (the same is true of Marcos).

An open design plan allows diners to watch chefs in action and
savor the aromas of the built-in pizza ovens. Space ranges from
3,400 to 4,300 square feet, the properties have beer and wine
licenses and weekly incomes between $12,000 - $21,000.

"With its airy floor plan and menu of simple yet hearty Italian
fare, these restaurants are relatively easy to run and require
less than 30 employees," Schwartz says.

"We've already received bids on some of the best locations,
including the one in the Holcombe Shopping Center, which is quite
popular with the local medical community," according to Schwartz,
who lists other prime Pasta Company locations as the one in The
Woodlands' Cochran's Crossing Shopping Center and another on
Highway 6 North in the Copperwood Crossing retail complex.

Noted Houston attorney Bennett Fisher, assigned to oversee The
Five Star Restaurant Group auction deal, says equipment and decor
in both restaurant chains have been routinely updated and
maintained and buildings are up to code, including the grease
traps, restrooms, exhaust systems and hoods.

"There are significant barriers to entry for new construction in
many sections of Houston and landlords are very particular. It's
far more difficult to strike a deal for raw space than to take
over an existing entity," according to Fisher, who estimates the
cost of constructing a new facility plus time expended on
obtaining permits -- including difficult-to- obtain liquor
licenses -- could well exceed $600,000 and take more than a year.

"Here are restaurants with a built-in clientele and crew that
could easily be rebranded, redesigned and restructured for a
faction of the cost and time it would take to start from scratch
and many of the spaces could easily be converted into a totally
different concept (whether food service or otherwise) allowing the
buyer to gain access into many of Houston's premiere shopping
centers," Fisher says.

To obtain a complete bid and information package, plus required
confidentiality agreement, contact Tranzon's Kelly Toney at
ktoney@tranzon.com or call him at (713) 984-7670 or toll-free at
(877) 824-7653. Bids are due January 28, 2004 by 2:00 p.m., C.S.T.

Founded in November of 2000, Tranzon is a nationwide auction and
accelerated marketing firm with headquarters in Richmond, VA.
There are 11 Tranzon member companies with 22 offices coast-to-
coast. What distinguishes Tranzon from competitors is its strategy
of combining a national network of experts with the local
expertise and presence demanded by those seeking its services:
bankruptcy and estate attorneys, special assets managers at
banking institutions, corporations and individuals. As of today's
date, Tranzon has 38 auction and sales listings in progress in 18
states.

For more details on Five Star or other Tranzon auction properties,
log on to the Tranzon Web site at http://www.tranzon.com/

Five Star Restaurant filed for Chapter 11 protection on
September 3, 2003, in the U.S. Bankruptcy Court for the Southern
District of Texas (Houston) (Bankr. Case No. 03-42654).


FLEMING: Wants to Commence Arbitration of Price Chopper Claims
--------------------------------------------------------------
The Fleming Debtors want to enter into binding, final arbitration
of certain claims and causes of action asserted by Price Chopper
Foods LLC, Geoffrey Stickler, Gail A. Stickler, Richard Guest,
and Maggie Brohm.

On August 12, 2003, Price Chopper filed a request to lift the
stay to commence a fraud case in an Arizona state court.  In the
lawsuit, Price Chopper intends to seek a declaration that certain
inter-related contracts among the parties are void.  The Debtors
contend that Price Chopper currently owes them $2,900,000 under
the contracts.

The Debtors notified Price Chopper that all of its claims as well
as their claims for accounts receivable and turnover of property
were subject to the binding arbitration clause in the Facility
Standby Agreement signed by both parties.  The Debtors asked
Price Chopper to agree to arbitration of the dispute.  Price
Chopper refused.

By this motion, the Debtors ask Judge Walrath to:

       (i) authorize the commencement of an arbitration
           proceeding against Price Chopper in order to resolve
           their Claims;

      (ii) authorize the selection of arbitrators from the
           national roster of the AAA;

     (iii) modify the automatic stay to permit Price Chopper to
           assert and pursue any counterclaims in the arbitration
           proceeding without any presumption as to the validity
           or enforceability of those counterclaims;

      (iv) authorize Price Chopper to offset any amount that the
           arbitrators determine it owes to them against any
           amount that they owe Price Chopper, so long as the
           amounts owed to and by them are both debts that arose
           prepetition, or that arose postpetition;

       (v) authorize their payment of their portion of:

              (1) the administrative fees and expenses incurred
                  in the arbitration proceeding;

              (2) the arbitrators' fees and expenses; and

              (3) any other fees and costs, including witnesses'
                  expenses, incurred in the arbitration
                  proceeding;

      (vi) authorize the arbitrators to apply the payments to
           satisfy the fees and expenses incurred in the
           arbitration proceedings; and

     (vii) rule that Price Chopper's request to lift the stay
           is moot.

In addition, the Debtors ask Judge Walrath to prohibit the
enforcement of any award, or the collection of any amount awarded
to Price Chopper in the arbitration proceeding, except as through
an offset, or by the filing of a proof of claim within the time
period set by the Court.

Headquartered in Lewisville, Texas, Fleming Companies, Inc. --
http://www.fleming.com/-- is the largest multi-tier distributor  
of consumer package goods in the United States.  The Company filed
for chapter 11 protection on April 1, 2003 (Bankr. Del. Case No.
03-10945).  Richard L. Wynne, Esq., Bennett L. Spiegel, Esq.,
Shirley Cho, Esq., and Marjon Ghasemi, Esq., at Kirkland & Ellis
represent the Debtors in their restructuring efforts.  When the
Debtors filed for protection from its creditors, they listed
$4,220,500,000 in assets and $3,547,900,000 in liabilities.
(Fleming Bankruptcy News, Issue No. 21; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


GARUDA CAPITAL: Spicer Jeffries Resigns as Independent Auditor
--------------------------------------------------------------
On December 16, 2003, Spicer Jeffries LLP resigned as Garuda
Capital Corporation's independent auditor.

Spicer Jeffries' reports on the Company's financial statements for
the fiscal years ended June 30, 2003 and 2002 cited an opinion
which raised substantial doubt about Garida's ability to continue
as a going concern.

The Company has not yet engaged a new auditor, but is in the
process of evaluating new auditors.

Garuda Capital Corp.'s September 30, 2003 balance sheet shows a
working capital deficit of close to $1 million, and a total
shareholders' equity deficit of about $450,000.

The Company, through it subsidiaries, sells and processes
specialty food products and herbal medication to wholesale and
retail customers in North America.

For the period ended September 30, 2003, the Company incurred a
net loss of $256,979. The Company's ability to continue its
operations and to realize assets at their carrying values is
dependent upon the continued support of its shareholders,
obtaining additional financing and generating revenues sufficient
to cover its operating costs. Management's plans in regard to
these matters are to raise additional equity funds as needed to
meet any operating needs.

The Company's financial statements do not give effect to any
adjustments which would be necessary should the Company be unable
to continue as a going concern and therefore be required to
realize its assets and discharge its liabilities at amounts
different from those reflected in these consolidated financial
statements.


GENCORP INC: Commences $100-Mil. Convertible Sub. Debt Offering
---------------------------------------------------------------
GenCorp Inc. (NYSE: GY) agreed to sell $100 million aggregate
principal amount of its contingent convertible fixed rate
subordinated notes due 2024 in a private placement pursuant to
Rule 144A under the Securities Act of 1933, as amended.  

An initial purchaser will also have an option to purchase up to an
additional $25 million of notes.  The private placement is
expected to close on January 16, 2004.

The notes will be convertible into shares of the Company's common
stock upon the happening of certain events at a conversion price
of $15.43 per share, representing a conversion premium of 45% to
yesterday's closing sale price.  This conversion price is
equivalent to a conversion rate of approximately 64.8088 shares
per $1,000 principal amount of the notes. Interest will accrue on
the notes at a rate of 4% per annum.

The Company intends to use the proceeds from the private placement
to repay outstanding indebtedness under its revolving credit
facility, to prepay the payments that would otherwise be required
in 2004 under its Term Loan A and for general corporate purposes.

These securities have not been registered under the Securities Act
and may not be offered or sold in the United States absent
registration or an applicable exemption from the registration
requirements of the Securities Act.

As previously reported, Standard & Poor's Ratings Services
assigned its 'B+' rating to GenCorp Inc.'s proposed $100 million
contingent convertible subordinated notes due 2024 and placed the
ratings on CreditWatch with negative implications. Standard &
Poor's other ratings on GenCorp, including the 'BB' corporate
credit rating, remain on CreditWatch with negative implications,
where they were placed on Jan. 9, 2004.


GLOBAL SIGNAL: S&P Rates Series 2004-1 Classes F & G at BB/B
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Global Signal Trust I's $418 million commercial
mortgage pass-through certificates series 2004-1.
     
The preliminary ratings are based on information as of Jan. 13,
2004. Subsequent information may result in the assignment of final
ratings that differ from the preliminary ratings.
     
The preliminary ratings reflect the economics of the underlying
collateral, the experience of the manager/owner, the terms of the
loan agreement, the transaction structure, the rating of the swap
provider, and the liquidity provided by the fiscal agent. The
collateral consists of a single fixed-rate mortgage loan secured
by the borrower's interest in 2,741 wireless communication sites
that are owned in fee or under long-term easements, ground leased,
or managed for third parties. The collateral will include a pledge
of the equity interests in the borrowers. Standard & Poor's
analysis determined that the loan has a stressed debt service
coverage of 1.63x based on a refinance constant of 12.0%, a DSC of
2.07 on the approximate loan constant of 7.80%, a beginning loan-
to-value of 81.8%, and an ending LTV of 73.5%.

                    PRELIMINARY RATINGS ASSIGNED

                       Global Signal Trust I
        Commercial mortgage pass-thru certs series 2004-1

          Class            Rating          Amount (Mil. $)
          A                AAA                         220
          B                AA                           23
          C                A                            29
          D                BBB                          52
          E                BBB-                         21
          F                BB                           38
          G                B                            35


GUESS? INC: Files Shelf Registration Statement for 5+ Mill. Shares
------------------------------------------------------------------
Guess?, Inc. (NYSE: GES) filed a Form S-3 shelf registration
statement with the Securities and Exchange Commission, which
covers the offer of up to 5,700,000 shares of the Company's common
stock, including up to 2,900,000 shares held by Maurice Marciano
and up to 2,800,000 shares held by Paul Marciano.  

Messrs. Marciano are the Company's Co-Chief Executive Officers,
Co-Chairmen and majority shareholders.  The offering will not
increase the number of the Company's outstanding shares or dilute
ownership of the Company's existing shareholders.  The Company
will not receive any proceeds from any sale of shares by the
selling shareholders.

Messrs. Marciano have informed the Company that the purpose of
this offering is for investment portfolio diversification as well
as to increase the availability of the Company's common stock.  
The shares may be sold from time to time after the registration
statement becomes effective and in compliance with the Company's
securities trading policies.

Currently, Maurice Marciano owns 16.7 million shares of the
Company's common stock and Paul Marciano owns 12.9 million shares,
representing combined holdings of 67.9% of the Company's common
stock.  If all of the registered shares were sold under this
offering, their combined holdings would be reduced to
approximately 24 million shares, or approximately 54.9% of the
Company's common stock.

A registration statement relating to these securities has been
filed with the SEC, but has not yet become effective.  These
securities may not be sold nor may offers to buy be accepted prior
to the time the registration statement becomes effective.  When
available, a written prospectus meeting the requirements of
Section 10 of the Securities Act may be obtained from the Company
by writing to: Chief Financial Officer, Guess?, Inc., 1444 South
Alameda St., Los Angeles CA 90021.

Guess?, Inc. (S&P, BB- Corporate Credit Rating, Negative) designs,
markets, distributes and licenses one of the world's leading
lifestyle collections of contemporary apparel, accessories and
related consumer products.


HEALTHSOUTH: Appoints John Markus New Chief Compliance Officer
--------------------------------------------------------------
HealthSouth Corporation (OTC Pink Sheets: HLSH) announced that the
Special Committee of its Board of Directors has further
strengthened the Company's corporate governance and compliance
practices with the approval of revised Corporate Governance
Guidelines and revised charters for three of the standing
committees of the Board of Directors.

The revised guidelines and charters meet or exceed the
requirements of the Sarbanes-Oxley Act and, although the Company
is not currently listed on the New York Stock Exchange, the
recently revised listing standards of the New York Stock Exchange.

HealthSouth also announced that John Markus has been appointed to
the position of Senior Vice President and Chief Compliance
Officer.  Markus, former Senior Vice President of Corporate
Compliance for Fresenius Medical Care North America, will manage
HealthSouth's regulatory compliance and internal audit programs.
An attorney, Markus has more than 10 years of experience in
corporate compliance, having also worked with Oxford Health Plans
and National Health Laboratories, Inc. Markus will report to the
CEO and will have independent reporting responsibilities to the
Compliance Committee of the Board of Directors.

"We are committed to ensuring that HealthSouth has best practices
in place in all areas of corporate governance and compliance,"
said Robert P. May, Interim Chief Executive Officer and Chairman
of HealthSouth's Nominating/Corporate Governance Committee. "Our
corporate governance revisions serve to strengthen the new
guidelines that were put in place in April 2003. [Tues]day's
announcement reflects HealthSouth's continuous effort to bolster
and enhance our ability to serve our stakeholders."

HealthSouth's revised Corporate Governance Guidelines include the
following provisions:

     -- Three-quarters of the members of the Board of Directors
        are required to be independent;

     -- The qualifications for an independent director have been
        tightened to reflect standards of best practices;

     -- The position of non-executive Chairman is established and
        will be filled by an independent director;

     -- Members of the Board are limited in the number of outside
        directorships they may hold;

     -- Term limits have been put into effect;

     -- Non-management directors will meet, without management
        directors, on a regular basis; and

     -- Strict policies have been enacted regarding related-party
        transactions.

HealthSouth's revised Corporate Governance Guidelines and
Committee Charters will be published on a new corporate governance
page on its Web site at http://www.healthsouth.com/  

HealthSouth also announced steps to strengthen its Corporate
Compliance and Ethics Program by:

     -- Requiring the Corporate Compliance Officer and the
        Director of Internal Audit to independently report to the
        Board of Directors;

     -- Creating a strong independent internal audit function;

     -- Improving avenues for employees to raise compliance-
        related questions or concerns without fear of retaliation
        including the engagement of a third party to manage the
        compliance hotline; and

     -- Conducting a company-wide compliance risk assessment and
        process improvement program.

Each HealthSouth employee must sign a written acknowledgement that
he or she had read and understands the Company's new compliance
handbook and agrees to be bound by the Standards of Business
Conduct contained in it.

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

As reported in Troubled Company Reporter's December 26, 2003
edition, Standard & Poor's Ratings Services withdrew its ratings
on HEALTHSOUTH Corp. due to insufficient information about the
company's operating performance, including a lack of audited
financial statements.

Standard & Poor's does not expect the company to be able to
provide restated historical financial statements, or to be able to
generate current-period financial statements, until at least the
second half of 2004. The company has not filed audited financial
statements since Sept. 30, 2002.

On April 2, 2003, Standard & Poor's lowered its ratings on
HEALTHSOUTH Corp. to 'D' after the company failed to make required
principal and interest payments on a subordinated convertible bond
issue that matured on April 1, 2003.

HEALTHSOUTH is currently embroiled in extensive litigation over
several years of allegedly fraudulent financial statements and is
understood to be in discussions with its creditors about
restructuring its debt. Nearly all members of senior management
have left the company, and most of the important corporate
functions have been assumed by professional advisors. Although
HEALTHSOUTH continues to operate its business, neither its
operations nor its financial performance can be assessed by
Standard & Poor's with confidence until the company can generate
audited financial statements.


HOLLINGER INC: Appoints Peter White Co-Chief Operating Officer
--------------------------------------------------------------
Hollinger Inc. (TSX: HLG.C; HLG.PR.B; HLG.PR.C) announced that
Mr. Peter White has been appointed Co-Chief Operating Officer and
Secretary.

Mr. Peter Atkinson has resigned as a director and officer of
Hollinger for personal reasons. Mr. Charles Cowan retired at the
end of 2003 after many years as Secretary of Hollinger, and as a
director.

Hollinger's principal asset is its approximately 72.6% voting and
30.3% equity interest in Hollinger International. Hollinger
International is a global newspaper publisher with
English-language newspapers in the United States, Great Britain,
and Israel. Its assets include The Daily Telegraph, The Sunday
Telegraph and The Spectator and Apollo magazines in Great
Britain, the Chicago Sun-Times and a large number of community
newspapers in the Chicago area, The Jerusalem Post and The
International Jerusalem Post in Israel, a portfolio of new media
investments and a variety of other assets.

On June 30, 2003, the company's net capital deficit tops $442
million while working capital deficit is at $398.8 million.


ILLUMINATIONS.COM: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Illuminations.Com Inc.
        1995 S McDowell Blvd.
        Petaluma, California 94954

Bankruptcy Case No.: 04-10427

Type of Business: From over 76 stores in more than 20 states, the
                  Debtor sells premium candles, candle
                  accessories, tabletop decorations, mirrors,
                  accent furniture, crystal and others home decor
                  items. See http://www.illuminations.com/

Chapter 11 Petition Date: January 9, 2004

Court: Central District of California (Los Angeles)

Judge: Samuel L. Bufford

Debtor's Counsel: Haig M. Maghakian, Esq.
                  Millbank, Tweed, Hadley & McCloy LL
                  601 South Figueroa Street 30th Floor
                  Los Angeles, CA 90017
                  Tel: 213-892-4000

Estimated Assets: $10 Million to $50 Million

Estimated Debts:  $50 Million to $100 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
William E. Simon & Sons       Note Debt               $4,740,357
Special Situation Partners
10990 Wilshire Blvd.
Los Angeles, CA 90024

Starlume, Inc.                Trade                   $2,201,272
6 Petaluma, Blvd. North
Suite B-5 Petaluma,
CA 94952

Xanadu Candle International,  Trade                     $653,776
LTD
Citco B.V.I. Limited Citco
Building
P.O. Box 662 Road Town
Tortola, British Virgin
Islands

Arandell Corporation          Trade                     $600,861
Box 68-9513
Milwaukee, WI 53268-9513

Libra Pacific Co.             Trade                     $286,114
Tasia International Co. LTD
10F, No. 81, Chow Tze St.
Nei Hu, Taipei, Taiwan R.O.C.

Dan Trade, Inc.               Trade                     $276,109
77 North Oak Knoll Avenue
Suite 102
Pasadena, CA 91101

Airborne Express              Trade                     $275,038
P.O. Box 91001
Seattle, WA 98111

C.L. Gupta & Sons             Trade                     $185,430

Specialised Creations         Trade                     $175,782

Winward International, Inc.   Trade                     $169,192

Vaishali Export House         Trade                     $137,526

Pinchal & Company             Trade                     $125,476

IMC, Inc.                     Trade                     $124,796

Cal Freight                   Trade                     $122,359

Deco Candles                  Trade                     $118,235

ANS                           Trade                     $115,517

Salar Overseas                Trade                     $108,527

Nodi Exports                  Trade                     $105,824

Unisource - Louisville        Trade                     $103,267

Form & Pac                    Trade                      $99,841


INFOUSA: Will Host Fourth-Quarter Conference Call Tomorrow
----------------------------------------------------------
infoUSA, (Nasdaq:IUSA) the leading provider of proprietary
business and consumer databases and sales and marketing solutions,
will be reporting its fourth quarter and fiscal year 2003 earnings
today after the market closes. The company's earnings conference
call will take place tomorrow at 2:00 PM Eastern time.

To access the conference call, please dial 913/981-5523, passcode
# 756532, approximately 10 minutes prior to the start of the call.
A replay of the call will be available from 5:00 PM Eastern time,
January 16, through midnight, Eastern time, January 23. The replay
number is 719/457-0820, passcode # 756532. A live webcast of the
conference call will be available at the company's Web site --
http://www.infousa.com/-- by clicking on the Investor Relations  
button on the infoUSA Home page.

infoUSA -- http://www.infoUSA.com/-- (S&P, BB Corporate Credit  
Rating, Stable), founded in 1972, is the leading provider of
business and consumer information products, database marketing
services, data processing services and sales and marketing
solutions. Content is the essential ingredient in every marketing
program, and infoUSA has the most comprehensive data in the
industry, and is the only company to own a proprietary database of
250 million consumers and 14 million businesses under one roof.
The infoUSA database powers the directory services of the top
Internet traffic-generating sites, including Yahoo! (Nasdaq:YHOO)
and America Online (NYSE:AOL). Nearly 3 million customers use
infoUSA's products and services to find new customers, grow their
sales, and for other direct marketing, telemarketing, customer
analysis and credit reference purposes. infoUSA headquarters are
located at 5711 S. 86th Circle, Omaha, NE 68127 and can be
contacted at (402) 593-4500.


INTERPOOL INC: S&P Maintains Watch Negative on Low-B Ratings
------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings on
Interpool Inc. (BB/Watch Neg/--) remain on CreditWatch with
negative implications, where they were placed on Oct. 10, 2003.

The CreditWatch update follows Interpool's Jan. 9, 2004, filing of
its 2002 10K, including restated 2000 and 2001 financial
statements, with the SEC. The initial delay of the filing of the
financial statements occurred in March 2003, due to several
restatements in the way the company accounted for finance lease
transactions and, more recently, an insurance claim receivable.

Interpool had indicated, from the beginning, that it expected the
impact of the restatements on earnings and equity to be modest.
For 2000, restated revenues rose by $45.3 million and net income
by $0.2 million; for 2001, restated revenues rose by $33.6 million
and net income declined by $14.4 million. Restated debt for 2001
rose by $19.4 million (1.5%), while restated equity declined by
$11.2 million (2.5%). The company's restated credit ratios for
2001 did not change significantly: pretax coverage of 1.3x versus
the previous 1.5x, EBITDA interest coverage of 2.7x versus the
previous 2.8x, funds flow to debt of 13.6% versus the previous
12.6%, debt to EBITDA of 6.3x versus the previous 6.1x, and debt
to capital of 75.7% versus the previous 75.0%. For 2002, these
ratios all weakened due to lower margins and higher debt levels.

Interpool expects to file its 10-Q's for the first three quarters
of 2003 by Jan. 31, 2004; Feb. 29, 2004; and March 31, 2004,
respectively. While the 2002 10K filing eliminated the need for
immediate additional waivers from its lenders, the company expects
that it will be necessary to request such waivers by March 31,
2004, for the filing of the 2003 10K. In addition, the SEC has
converted its informal investigation, announced Oct. 10, 2003,
into a formal investigation. Finally, trading in Interpool's
shares has yet to resume after it was suspended on Dec. 29, 2003.

"Standard & Poor's will continue to monitor Interpool's situation
regarding its completed audited financial statements, the SEC
investigation, the resumption of trading in its shares by the
NYSE, and continued lender support to resolve the CreditWatch,"
said Standard & Poor's credit analyst Betsy Snyder.

Interpool continues to have strong market positions in chassis and
marine cargo container leasing, as well as an adequate financial
profile for a transportation equipment lessor. Interpool is the
largest chassis lessor in North America, with a fleet of over
200,000 units. Chassis are wheeled frames attached to cargo
containers that, when combined, are equivalent to a trailer that
can be trucked to its destination. Interpool's only major
competitor in this business is privately held Flexi-Van Leasing
Inc. The chassis leasing business has tended to generate strong
and stable cash flow, even in periods of economic weakness.


IT GROUP: Details Functions of Oversight Committee Under Plan
-------------------------------------------------------------
On the Effective Date of The IT Group Debtors' Plan, an Oversight
Committee will be formed, which consists of four members -- two
selected by the Committee and two selected by the Prepetition
Lenders.  

The Oversight Committee, IT Group's Chief Executive Officer,
Harry J. Soose Jr. says, will oversee the administration and
implementation of the Plan and the liquidation of the Debtors'
Assets in accordance with the Plan.  Oversight Committee
decisions will be made with the approval of at least three
members.  The Oversight Committee will:

   (a) approve the Plan Administrator's selection of, as well as
       the terms governing the engagement of, professionals to
       be engaged by the Plan Administrator on behalf of IT
       Group, who may have been previously engaged by the
       Debtors, the Committee or the Prepetition Lenders and
       establish retainer terms, conditions and budgets;

   (b) decide whether, when, and in what amounts, to direct IT
       Group to make a Distribution;

   (c) oversee the Plan Administrator's administration and
       implementation of the Plan and the liquidation of the
       Assets in accordance with the Plan;

   (d) oversee, review and guide the Plan Administrator on
       the performance of its duties, and its activities proposed
       and underway, as often as is necessary and appropriate to
       implement the Plan;

   (e) appear in Bankruptcy Court;

   (f) seek an order terminating an Oversight Committee member
       and approving a replacement in the event the other members
       of the Oversight Committee determines there is cause to do
       so;

   (g) articulate the Oversight Committee's position in the event
       the Plan Administrator, the Disbursing Agent or the Chief
       Litigation Officer brings a dispute with the Oversight
       Committee to the Bankruptcy Court for resolution, or the
       Oversight Committee concludes it should bring a dispute
       with the Plan Administrator, Disbursing Agent or the Chief
       Litigation Officer to the Bankruptcy Court for resolution;
       and

   (h) direct the pursuit and settlement of Estate Causes of
       Action.

Each Oversight Committee member will be paid in accordance with
the Oversight Committee Compensation, as disclosed at or prior to
the Confirmation Hearing and agreed to by the Committee and the
Agent.  Any disputes between and among the Oversight Committee,
its members, Reorganized IT Group, the Plan Administrator, or the
Chief Litigation Officer will be resolved by the Bankruptcy
Court, and the Plan Administrator will bring any dispute to the
Bankruptcy Court for resolution if so requested in writing by any
of the parties.

Subject to any applicable law, the members of the Oversight
Committee will not be liable for any act done or omitted by any
member in its capacity, while acting in good faith and in the
exercise of business judgment.  Members of the Oversight
Committee will not be liable in any event except for gross
negligence or willful misconduct in the performance of their
duties.

Except as otherwise set forth in the Plan and to the extent
permitted by applicable law, the members of the Oversight
Committee in the performance of their duties will be defended,
held harmless and indemnified from time to time by the
Reorganized IT Group against any and all losses, Claims, costs,
expenses and liabilities to which the Indemnified OC Parties may
be subject by reason of the Indemnified OC Party's execution of
duties pursuant to the discretion, power and authority conferred
on the Indemnified OC Party by the Plan or the Confirmation
Order.

However, this is provided that the indemnification obligations
arising pursuant to the Plan will not indemnify the Indemnified
OC Parties for any actions taken by the Indemnified OC Parties,
which constitute fraud, gross negligence, or intentional breach
of the Plan, or the Confirmation Order.  Satisfaction of any
obligation of the Reorganized IT Group arising pursuant to the
Plan will be payable only from the assets of the Reorganized IT
Group, including, if available, any insurance maintained by the
Reorganized IT Group.  The indemnification provisions will remain
available to and be binding on any future members of the
Oversight Committee or the estate of any decedent and will
survive dissolution of the Reorganized IT Group.

Headquartered in Monroeville, Pennsylvania, The IT Group, Inc. --
http://www.theitgroup.com/-- together with its 92 direct and  
indirect subsidiaries, is a leading provider of diversified,
value-added services in the areas of consulting, engineering and
construction, remediation, and facilities management. The Company
filed for chapter 11 protection on January 16, 2002 (Bankr. Del.
Case No. 02-10118).  David S. Kurtz, Esq., at Skadden Arps Slate
Meagher & Flom represents the Debtors in their restructuring
efforts.  On September 30, 2001, the Debtors listed $1,344,800,000
in assets and 1,086,500,000 in debts. (IT Group Bankruptcy News,
Issue No. 39; Bankruptcy Creditors' Service, Inc., 215/945-7000)  


JACKSON PRODUCTS: Asking Court to Confirm Prepackaged Plan
----------------------------------------------------------
Jackson Products, Inc., announced that 91% of the holders
submitting votes, representing 90% of its 9.5% senior subordinated
notes due 2005, and 100% of the holders submitting votes,
representing 94% of its 15% secured senior subordinated notes due
2004, voted overwhelmingly in favor of the company's proposed
prepackaged plan of reorganization.

Jackson Products is now seeking Bankruptcy Court approval of its
consensual, prepackaged plan of reorganization.

"We appreciate the incredible support that we have received from
our lenders and other stakeholders throughout this process. Their
endorsement of Jackson Products has enabled us to pursue the final
pieces of our reorganization plan. The prepackaged plan of
reorganization rather than the consensual exchange offer is
necessary because a few holders of our senior subordinated notes
were unwilling to participate in the exchange offer. We are
excited, however, to take the final steps to bring closure to our
restructuring efforts, so we can concentrate on growing our
business. We are optimistic that within the relatively short time
frame of less than 60 days, we will successfully emerge as a well-
financed leader in the marketplace," said David Gilchrist, Jackson
Products' President and Chief Executive Officer.

Mr. Gilchrist added, "This restructuring will substantially
enhance our financial condition by substantially reducing our
debt. When we emerge from this reorganization, we expect to be on
solid footing with a stable capital structure. Without this
distraction and diversion of resources caused by our restructuring
efforts, we will be able to totally focus on executing our
business strategy."

Jackson Products expects its operations to be unaffected by the
pending court proceedings. Jackson Products has taken steps to
ensure continued supply of goods and services to its customers,
including arranging a new debtor-in-possession ("DIP") financing
for up to $10 million from its existing lender group. Upon court
approval, Jackson Products expects the DIP financing, together
with Jackson Products' cash from operations, to provide sufficient
funding for its operations during the reorganization process. The
prepackaged plan provides that suppliers and other trade creditors
will be paid in full.

Mr. Gilchrist commented further, "Our intention has always been to
honor 100% of our trade and contractual obligations with our
suppliers and business partners, and the prepackaged plan reflects
this. The interim financing and our internally generated cash
flows will allow us to do so, and our existing secured lenders and
noteholders support our doing so. We are pleased that we have been
able to bring these key stakeholders together to facilitate our
consensual reorganization."

Jackson Products negotiated the prepackaged plan with holders of
its senior subordinated notes, its secured senior subordinated
notes and holders of its existing common stock and solicited
acceptances of the prepackaged plan from holders of the senior
subordinated notes and secured senior subordinated notes. All
other creditors are expected to be paid in full and are unimpaired
under the prepackaged plan. Jackson Products believes it has
received the acceptances necessary to obtain the approval of the
prepackaged plan, and is now seeking confirmation of the
prepackaged plan from the court.

Jackson Products and its domestic subsidiaries have filed
voluntary petitions under Chapter 11 of the Bankruptcy Code to
obtain court approval of the prepackaged plan and thereby bind all
creditors and equity holders to the prepackaged plan. Jackson
Products' affiliates outside of the United States were not
included in the Chapter 11 filing.

The shares of preferred stock and common stock issuable in the
reorganization will not be registered under the Securities Act of
1933, as amended, or applicable state securities laws, and may not
be offered or sold in the United States absent registration under
the Securities Act and applicable state securities laws or
available exemptions from such registration requirements.

Jackson Products designs, manufactures and distributes safety
products and serves a variety of niche applications within the
personal and highway safety markets, principally throughout North
America and Europe. Jackson Products markets its products under
established, well-known brand names to an extensive network of
distributors, wholesalers, contractors and government agencies.
Jackson Products currently has two reportable business segments:
Personal Safety Products and Highway Safety Products.


KB HOME: Prices $250 Million of Senior Notes in Private Placement
-----------------------------------------------------------------
KB Home (NYSE: KBH) priced $250 million aggregate principal amount
of 5-3/4% Senior Notes due 2014 in a private placement.  The
senior notes will be guaranteed by certain KB Home subsidiaries.  
The offering is expected to close on or about January 28, 2004,
subject to customary closing conditions.

The notes will be offered and sold only to qualified institutional
buyers pursuant to Rule 144A under the Securities Act of 1933.  
The senior notes have not been registered under the Securities Act
and may not be offered or sold in the United States without
registration or an applicable exemption from the registration
requirements.  

KB Home (Fitch, BB+ Senior Unsecured Debt and BB- Senior
Subordinated Debt Ratings) is one of America's largest
homebuilders with domestic operating divisions in the following
regions and states: West Coast-California; Southwest-Arizona,
Nevada and New Mexico; Central-Colorado, Illinois and Texas; and
Southeast-Florida, Georgia and North Carolina.  Kaufman & Broad
S.A., the Company's majority-owned subsidiary, is one of the
largest homebuilders in France.  In fiscal 2002, the Company
delivered 25,565 homes in the United States and France.  It also
operates KB Home Mortgage Company, a full-service mortgage company
for the convenience of its buyers.  Founded in 1957, KB Home is a
Fortune 500 company listed on the New York Stock Exchange under
the ticker symbol "KBH."  For more information about any of KB
Home's new home communities, visit the Company's Web site at
http://www.kbhome.com/


KB TOYS INC: Commences Chapter 11 Restructuring in Delaware
-----------------------------------------------------------
KB Toys, Inc. announced that, in order to proactively address the
financial challenges it has faced primarily due to competitor
price wars, the Company and 69 of its affiliated entities have
filed voluntary petitions for reorganization under chapter 11 of
the U.S. Bankruptcy Code.

In its filings in the United States Bankruptcy Court for the
District of Delaware, KB Toys indicated that it has targeted
emergence before the 2004 holiday season.

KB Toys also announced that, to fund its restructuring and
continuing operations, it has secured from a lending group led by
Fleet Retail Group, Inc. a $350 million senior secured debtor-in-
possession (DIP) financing facility. The Company may convert the
DIP facility, upon the satisfaction of certain conditions, to
post-chapter 11 financing. The financing facility, which has a
four-year term including the period during which the Company is in
the chapter 11 proceedings, remains subject to Bankruptcy Court
approval. KB Toys will use the DIP facility to supplement its
existing cash flow during the reorganization process.

The Company also said it will pay vendors, suppliers and other
business partners under normal terms for goods and services they
provide during the reorganization process. KB Toys' will pay its
employees in the usual manner and it expects that their medical,
dental, life insurance, disability, and other benefits will
continue without disruption. The Company also has requested that
the Court allow it to honor its return policies and gift cards in
the ordinary course of business.

"We have been assured by many of our vendors, landlords, and other
interested parties that they see an important and continuing role
for KB Toys in the retail toy market, and will work with us to
achieve approval of the Company's reorganization plan," stated
Michael L. Glazer, chief executive officer of KB Toys, Inc. "We
regret any negative impact today's actions will have, but after
considering a broad range of alternatives, it was clear that this
course of action is in the best interests of the Company and its
many stakeholders. Given the tremendous support we have already
received, we are confident KB Toys will emerge as a stronger and
more competitive organization, well-positioned to respond to and
succeed in the changing toy industry."

KB Toys said early initiatives in the reorganization process would
include closing unprofitable or underperforming stores,
reengineering the organization to reduce annual expenses, and
reducing staff.

The Company said its decision to reorganize under chapter 11 was
driven primarily by the price war very early in the 2003 holiday
season, mass merchants' increasing use of toys as loss leaders
during the holiday season, and increasing price competition in the
toy market during the remainder of the year. KB Toys noted that it
experienced a rapid decline in its liquidity resulting from below-
plan sales and earnings performance in the fourth quarter of 2003.

More information about KB Toys' reorganization case will be
available at http://www.kbtinfo.com/

KB Toys, Inc. is the nation's largest combined mall-based and
online specialty toy retailer. It is a more than 80-year old
company, privately held and headquartered in Pittsfield,
Massachusetts.


KB TOYS INC: Case Summary & 40 Largest Unsecured Creditors
----------------------------------------------------------
Lead Debtor: KB Toys, Inc.
             aka KB Holdings, Inc.
             100 West Street
             Pittsfield, MA 01201

Bankruptcy Case No.: 04-10120

Debtor affiliates filing separate chapter 11 petitions:

     Entity                                     Case No.
     ------                                     --------
     KB Acquisition Corporation                 04-10121
     Havens Corners Corporation                 04-10122
     KB Toys (US), Inc.                         04-10123
     Southdale Kay-Bee Toy, Inc.                04-10124
     Mall of America Kay-Bee Toy, Inc.          04-10125
     KB Holdings, LLC                           04-10126
     KB Toy of Pennsylvania, Inc.              04-10127
     KB Toy of Massachusetts, Inc.              04-10128
     KB Toy of New Jersey, Inc.                 04-10129
     KB Online Holdings LLC                     04-10130
     BrainPlay.com, Inc.                        04-10131
     Montgomery Toy LLC                         04-10132
     KB Toys Wholesale, Inc.                    04-10133
     Travel, Inc. of Pittsfield                 04-10134
     Aguadilla Kay-Bee Toy, Inc.                04-10135
     Ala Moana Kay-Bee Toy, Inc.                04-10136
     Atocha Street Kay-Bee Toy, Inc.            04-10137
     Bayamon Kay-Bee Toy, Inc.                  04-10138
     Calle Betances Kay-Bee Toy, Inc.           04-10139
     Carolina Kay-Bee Toy, Inc.                 04-10140
     Centro Del Sur Kay-Bee Toy, Inc.           04-10141
     Cordero Ave. (Caguas) Kay-Bee Toy, Inc.    04-10142
     Fajardo State Rd. Kay-Bee Toy, Inc.        04-10143
     KB Toy of Alaska, Inc.                     04-10144
     KB Toy of Arizona, Inc.                   04-10145
     KB Toy of Arkansas, Inc.                   04-10146
     KB Toy of California, Inc.                04-10147
     KB Toy of Colorado, Inc.                   04-10148
     KB Toy of Connecticut, Inc.               04-10149
     KB Toy of Florida, Inc.                    04-10150
     KB Toy of Hawaii, Inc.                    04-10151
     KB Toy of Idaho, Inc.                      04-10152
     KB Toy of Maryland, Inc.                  04-10153
     KB Toy of Nebraska, Inc.                   04-10154
     KB Toy of Nevada, Inc.                    04-10155
     KB Toy of North Carolina, Inc.             04-10156
     KB Toy of Ohio, Inc.                      04-10157
     KB Toy of South Dakota, Inc.               04-10158
     KB Toy of Tennessee, Inc.                 04-10159
     KB Toy of Texas, Inc.                      04-10160
     KB Toy of Utah, Inc.                      04-10161
     KB Toy of Virginia, Inc.                   04-10162
     KB Toy of Washington, Inc.                04-10163
     KB Toy of Wisconsin, Inc.                  04-10164
     KB Toy of Wyoming, Inc.                   04-10165
     KB Toy Distribution South, Inc.            04-10166
     Kay-Bee Caguas Centrum, Inc.               04-10167
     Kay-Bee Carolina, Inc.                     04-10168
     Kay-Bee De Diego Street, Inc.              04-10169
     Kay-Bee Del Norte, Inc.                    04-10170
     Kay-Bee Guayama, Inc.                      04-10171
     Kay-Bee Isabela, Inc.                      04-10172
     Kay-Bee Juncos Plaza, Inc.                 04-10173
     Kay-Bee Manati, Inc.                       04-10174
     Kay-Bee Palma Real, Inc.                   04-10175
     Kay-Bee Playa Del Sol, Inc.                04-10176
     Kay-Bee Plaza Acquarium, Inc.              04-10177
     Kay-Bee Plaza Caribe, Inc.                 04-10178
     Kay-Bee Plaza Del Atlantico, Inc.          04-10179
     Kay-Bee Toy & Hobby Shops, Inc.            04-10180
     Kay-Bee Western Plaza, Inc.                04-10181
     Kay-Bee Yabucoa, Inc.                      04-10182
     Las Americas Kay-Bee Toy, Inc.             04-10183
     Main Street (Yauco) Kay-Bee Toy, Inc.      04-10184
     Mayaguez Kay-Bee Toy, Inc.                 04-10185
     Montechiedra Kay-Bee Toy, Inc.             04-10186
     Pheasant Kay-Bee Toy, Inc.                 04-10187
     Plaza Del Caribe Kay-Bee Toy, Inc.         04-10188
     Rio Hondo Kay-Bee Toy, Inc.                04-10189

Type of Business: The Debtor is one of the largest combined mall-
                  based and online specialty toy retailers in the
                  US. It operates more than 1,300 stores under
                  four main formats: KB Toys stores in malls, KB
                  Toy Works neighborhood stores, KB Toy Outlets
                  and KB Toy Liquidator in outlet malls, and KB
                  Toy Express. See http://www.kbtoys.com/

Chapter 11 Petition Date: January 14, 2004

Court: District of Delaware

Judge: Peter J. Walsh

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

Estimated Assets: More than $100 Million

Estimated Debts:  More than $100 Million

Debtor's 40 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Hasbro Inc.                   Trade                  $15,325,796
200 Narragansett Park Drive
Pawtucket, RI 02861

Lego Systems, Inc.            Trade                   $9,907,989
555 Taylor Road
Enfield, CT 06082

THQ Inc.                      Trade                   $8,919,012
270001 Agoura road, Suite 325
Calabasas Hills, CA 91301

Workflow Solutions LLC/SFI    Non-Trade Advertising   $5,023,636
360 Ams Court
Green Bay, WI 54313

Jack of All Games Inc.        Trade                   $4,806,380
622 Broadway
New York, NY 10012

Electronic Arts               Trade                   $3,932,769
209 Redwood Shores Parkway
Redwood City, CA 94065

Micro Games of America        Trade                   $3,146,151
16730 Schoenborn Street
North Hills, CA 91343

Spin Masters Inc.             Trade                   $2,842,376
450 Front Street West
Toronto, Ontario CANADA

Konami Digital Entertainment  Trade                   $2,243,765
1400 Bridge Parkway, Suite 101
Redwood  City, CA 94065

Microsoft Corporation         Trade                   $2,211,651
1401 Elm Street, 5th Floor
Dallas, TX 75202

Atari, Inc.                   Trade                   $1,943,788
417 Fifth Avenue, 8th Floor
New York, NY 10016

Li & Fung (Trading) Limited   Trade-Foreign           $1,826,608
3rd Floor, LiFung Tower       Consolidation
888 Cheung Sha Wan Road
Kowloon, Hong Kong CHINA

Intec Inc.                    Trade                   $1,736,524
5255 NW 159th Street
Miami, FL 33014

UBI Soft, Inc.                Trade                   $1,655,745
625 Third Street, 3rd Floor
San Francisco, CA 94107

RC2                           Trade                   $1,454,806
800 Veterans Parkway
Bolingbrook, IL 60440

Vivendi Universal             Trade                   $1,415,790
Interactive
6080 Center Drive
Los Angeles, CA 90045

Namco Hometek, Inc.           Trade                   $1,257,168
2055 Junction Avenue
San Jose, CA 95131

SBC                           Non-Trade Advertising   $1,249,144
707 Parkneadow Road
Westerville, OH 43081

Panasonic Industrial Company  Trade                   $1,241,338
1 Panasonic Way
Secaucus, NJ 07094

Windsor Marketing Group       Non-Trade Advertising   $1,187,077
2 Industrial Road
Windsor Locks, CT 06096

LeapFrog                      Trade                   $1,147,495
6401 Hollis Street, Suite 150
Emeryville, CA 94608

Gemmy Industries Corporation  Trade                   $1,140,617
117 Wrangler Drive
Coppell, TX 75019

Mattel Toys                   Trade                   $1,120,297
c/o Nations Bank
6000 Feldwood Road
Southside East College Park,
GA 30349

Mega Blocks, Inc.             Trade                   $1,073,590
4505 Hickmore
St. Laurent, Quebec CANADA

Red Box                       Trade                   $1,034,644
1216 Peninsula Centre
Tsimshatsui East
Kowloon, Hong Kong, CHINA

X-Concepts                    Trade                   $1,012,230
975 So Anderson Drive
Escondido, CA 92029

McFarlane (TMP)               Trade                     $993,190
1711 W. Greentree Drive
Suite 208
Tempe, AZ 85284

TDK Mediactive                Trade                     $988,488
4373 Park Terrace Drive
Westlake Village, CA 91361

Simon Property Group          Lease                     $973,585
115 West Washington Street
Indianapolis, IN 46204

Universal Games               Trade                     $863,215
12631 Lakeshore North
Auburn, CA 95602

Square Enix USA Inc.          Trade                     $855,575
6060 Center Drive Suite 100
Los Angeles, CA 90045

V. Suarez & Co. Inc.          Trade                     $827,962
Rexco Induastrial Park
165 Road Buchanon
Guaynabo, PR 00968

Bandai America Inc.           Trade                     $812,081
5551 Katella Avenue
Cypress, CA 90630

Jakks Pacific Inc.            Trade                     $788,456
22619 Pacific Coast Highway
Suite 250
Malibu, CA 90265

Westfield                     Lease                     $785,760
11601 Wilshire Blvd.
Suite 1200
Los Angeles, CA 90025-1748

Eidos Interactive             Trade                     $778,377
651 Brannan Street, Suite 400
San Francisco, CA 94107

Lucasarts                     Trade                     $759,330
1600 Los Gamos Drive Suite 200
San Rafael, CA 94903

Sky Kids Inc.                 Trade                     $746,095
105 Union Avenue
Cresskill, NJ 07626

Sega of America               Trade                     $712,288
650 Townsend Street, Suite 650
San Francisco, CA 94103

General Growth                Lease                     $646,763
110 N. Wacker Drive
Chicago, IL 60606-1116


KINGSWAY FIN'L: Consolidating North American Reporting Structure
----------------------------------------------------------------
Kingsway Financial (TSX:KFS, NYSE:KFS) announced the consolidation
of the reporting structures of both its U.S. and Canadian
operations through the Toronto based holding company.

Henceforth, the presidents of all U.S. Subsidiaries will report
directly to Mr. Bill Star, Chairman, President and Chief Executive
Officer of the corporation. As a result of this restructuring, Mr.
James Zuhlke has decided to tender his resignation as an officer
and director and will pursue other interests.

Mr. Zuhlke has been a director of Kingsway Financial since 1989
and President and Chief Executive Officer of Kingsway America
since 1998. The Board of Directors would like to thank Mr. Zuhlke
for his contributions as a director and executive and wish him
success in the future.

Brian Williamson has assumed the primary responsibility for the
Kingsway America office and has been appointed Vice President and
Chief Financial Officer of Kingsway America Inc. Pursuant to the
restructuring, Brian's primary responsibility will be the
consolidation of the financial reporting for the U.S. subsidiaries
and Brian will report directly to Kingsway Financial.

Kingsway's primary business is trucking insurance and the insuring
of automobile risks for drivers who do not meet the criteria for
coverage by standard automobile insurers. The Company currently
operates through nine wholly-owned insurance subsidiaries in
Canada and the U.S. Canadian subsidiaries include Kingsway General
Insurance Company, York Fire & Casualty Insurance Company and
Jevco Insurance Company. U.S. subsidiaries include Universal
Casualty Company, American Service Insurance Company, Southern
United Fire Insurance Company, Lincoln General Insurance Company,
U.S. Security Insurance Company, American Country Insurance
Company and Avalon Risk Management, Inc. The Company also operates
reinsurance subsidiaries in Barbados and Bermuda. Kingsway
Financial, Lincoln General Insurance Company, Universal Casualty
Insurance Company, Kingsway General, York Fire, Jevco and Kingsway
Reinsurance (Bermuda) are all rated "A-" Excellent by A.M. Best.
The Company's senior debt is rated investment grade 'BBB-'
(stable) by Standard and Poor's and 'BBB' (stable) by Dominion
Bond Rating Services. The common shares of Kingsway Financial
Services Inc. are listed on the Toronto Stock Exchange and the New
York Stock Exchange, under the trading symbol "KFS".

                         *   *   *

As previously reported, Standard & Poor's Ratings Services
assigned its 'BB+' global scale preferred share rating to Kingsway
Financial Services' guarantee of Kingsway Financial Capital Trust
I's U.S. trust preferred securities issue of up to US$72 million.
The 'BBB' long-term counterparty credit rating on KFS remains
unchanged. The outlook is stable.


KMART CORP: Balks at 227 Late-Filed Claims Totaling $20 Million
---------------------------------------------------------------
The Kmart Corporation Debtors object to 227 late-filed claims that
total $19,972,525 and ask the Court to disallow and expunge these
claims in their entirety:

          Type of Claims                  Claim Amount
          --------------                  ------------
          Secured                           $5,031,129
          Administrative                    14,702,090
          Priority                             121,679
          Unsecured                            117,627
(Kmart Bankruptcy News, Issue No. 67; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


LAIDLAW INT'L: First-Quarter 2004 Results Enter Positive Zone
-------------------------------------------------------------
Laidlaw International, Inc. (OTC Bulletin Board: LALW; TSX: BUS)
announced financial results for its 2004 first quarter ended
November 30, 2003.

As previously reported, the company emerged from bankruptcy
protection in June 2003. Accordingly, the 2004 first quarter
results presented in this news release are for the reorganized
company. All results for the prior year first quarter ended
November 30, 2002 are for Laidlaw Inc., the predecessor company.
Because of the company's reorganization, comparisons to the prior
year may not be meaningful.

For the first quarter of fiscal 2004, revenue of $1,210.3 million
was up 4.1% from $1,162.2 million for the comparable prior year
period, largely driven by growth of the company's healthcare
transportation and emergency management services businesses. The
net income for the first quarter of 2004 was $22.6 million
compared to a net loss of $2,164.4 million for the prior year
quarter. In the prior year period, the predecessor company adopted
SFAS 142 and recorded a non-cash goodwill impairment charge of
$2,205.4 million. Additionally, during the prior year period
interest expense was not recorded for those liabilities subject to
compromise.

First quarter EBITDA (earnings before interest, income taxes,
depreciation, amortization, other income, other financing related
expenses and cumulative effect of change in accounting principle)
was $150.2 million as compared to an EBITDA of $132.1 million for
the predecessor company in the first quarter of 2003. The 13.7%
improvement in EBITDA was largely driven by better results from
the company's Greyhound segment. Net cash used by operating
activities for the 2004 first quarter was $51.6 million, largely
reflecting the seasonal use of working capital by the education
services business, as compared to net cash used by operating
activities of $8.1 million for the predecessor company in the
first quarter of 2003.

"Our businesses performed adequately during the first quarter, but
we continued to feel the effects of the economic pressures
experienced by many of our traditional customers," said Kevin
Benson, Laidlaw International's President and Chief Executive
Officer. "While maintaining customer service as our key objective,
we are focusing our efforts on developing additional sources of
revenue and aggressively seeking ways to reduce overhead and
preserve capital."

As of November 30, 2003, the company had unrestricted cash and
cash equivalents of $75.1 million and long-term debt including
current portion of $1,284.8 million. Net capital expenditures for
the first quarter were $39.3 million as compared to $67.6 million
for the prior year period.

The company filed its quarterly report on Form 10-Q for its first
quarter fiscal 2004 with the Securities and Exchange Commission on
January 13, 2004. The Form 10-Q contains more detailed information
about the company's financial results and factors affecting the
company.

On February 10, 2004, the company will hold its first annual
shareholder meeting in New York City at The New York Palace hotel
at 455 Madison Avenue. The meeting is scheduled for 11:30 am
(eastern standard time).

Laidlaw International, Inc. is a holding company for North
America's largest providers of school and inter-city bus
transport, public transit, patient transportation and emergency
department management services. Trades of the company's shares are
posted on the OTC Bulletin Board (OTCBB: LALW). Additionally, the
company's shares trade on the Toronto Stock Exchange (TSX: BUS).
For more information, visit the Company's Web site at
http://www.laidlaw.com/


LAS VEGAS DREAM: Case Summary & 13 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Las Vegas Dream Machines, Inc.
        3325 West Oquendo Road Suite A
        Las Vegas, Nevada 89120

Bankruptcy Case No.: 04-10290

Type of Business: The Debtor is an automobile museum which
                  features hot rods, movie cars, famous customs,
                  the Hot Wheels Hall of Fame and and a 50's
                  diner with live entertainment.

Chapter 11 Petition Date: January 12, 2004

Court: District of Nevada (Las Vegas)

Judge: Lloyd King

Debtor's Counsel: Michael J. Dawson, Esq.
                  Attorney at Law
                  515 South 3rd Street
                  Las Vegas, NV 89101
                  Tel: 702-384-1777

Total Assets: $1,700,000

Total Debts:  $534,000

Debtor's 13 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Rex Properties                Rent                      $480,000
4350 East Spring
mountain Road Suite 112
Las Vegas, NV 89102

Davis Glass and Mirror, Inc.  Tenant improvements        $25,000

Southwest Air                 Tenant improvements        $20,000

Royal Metal Works             Tenant improvements         $9,000

G. Mark Albright, Esq.        Attorney fees and          unknown
                              costs

Ideal Electrical              Tenant improvements        unknown
Contracting, Inc.

Kohl Painting and Drywall,    Tenant improvements        unknown
Inc.

Life Insurance Co. of the     Tenant improvements        unknown
Southwest

Metro Electric                Tenant improvements        unknown

Old Republic Insurance        Contingent liability       unknown
Company

Pennington Development, Inc.  Tenant improvements        unknown

Slade Development, Inc.       Tenant improvements        unknown

Stacy Slade and Teresa Slade  Contingent liability       unknown


LIN TV CORP: Agrees to Sell All Flint Television Station Assets
---------------------------------------------------------------
LIN TV Corp. (NYSE: TVL) and Barrington Broadcasting announced
that LIN TV has agreed to sell all the assets of WEYI-TV, the NBC
affiliate serving Flint-Saginaw, Michigan. The sale is subject to
FCC approval.

"We look forward to working with the management and staff of WEYI
and feel strongly about the potential of the station in the Flint-
Saginaw Bay City market," Jim Yager, CEO of Barrington said in
making the announcement. "The station fits perfectly with our
strategy of acquiring network affiliates in mid-sized markets
across the country."

Gary R. Chapman, Chairman President and CEO of LIN TV, said, "WEYI
is a terrific station and we are pleased for its staff and the
Flint community that Jim Yager and his team will have the
opportunity to help the station achieve its fullest potential.
Upon completion of this transaction, LIN TV will be completely
focused on its duopoly strategy of participating in markets where
we can realize the financial and operational benefits of operating
more than one television station."

Barrington Broadcasting was formed in 2003 to acquire and operate
television stations in mid-sized markets across the country. Since
March of last year, Barrington has operated eight network-
affiliated stations under a management contract with Chelsey and
recently announced the purchase of two television stations from
Chelsey. Barrington's Chief Executive Officer is K. James Yager,
former President of Benedek Broadcasting, which owned and operated
28 network-affiliated stations in medium-sized markets until its
merger with Gray Television in late 2002. He is a former Chairman
of the NAB's Television Board and a past Joint Board Chairman of
the NAB. Yager is joined at Barrington by Chris Cornelius as Chief
Operating Officer and President, Keith Bland as Senior Vice
President, Acquisition and Development, and Mary Flodin as Senior
Vice President, Finance and Administration. Cornelius, Bland and
Flodin worked with Yager in senior management assignments at
Benedek.

Following completion of the sale, LIN TV will operate 23 stations
in 13 markets including two stations under Local Marketing
Agreements. LIN TV owns approximately 20% of KXAS-TV in Dallas,
Texas and KNSD-TV in San Diego, California through a joint venture
with NBC, and is a 50% non-voting investor in Banks Broadcasting,
Inc., which owns KWCV-TV in Wichita, Kansas and KNIN-TV in Boise,
Idaho. LIN TV is also a one-third owner of WAND-TV, the ABC
affiliate in Decatur, Illinois, which it manages pursuant to a
management services agreement. Financial information and overviews
of LIN TV's stations are available on the Company's Web site at
http://www.lintv.com/

LIN TV Corp. operates 24 television stations in 14 markets, two of
which are LMAs. The Company also owns approximately 20% of KXAS-TV
in Dallas, Texas and KNSD-TV in San Diego, California through a
joint venture with NBC, and is a 50% non-voting investor in Banks
Broadcasting, Inc., which owns KWCV-TV in Wichita, Kansas and
KNIN-TV in Boise, Idaho. Finally, LIN is a 1/3 owner of WAND-TV,
the ABC affiliate in Decatur, Illinois, which it manages pursuant
to a management services agreement. Financial information and
overviews of LIN TV's stations are available on the Company's Web
site at http://www.lintv.com/

                         *    *    *

As previously reported in Troubled Company Reporter, Standard &
Poor's Ratings Services assigned its 'B' rating to LIN Television
Corporation's new $200 million senior subordinated note issue due
2013.

In addition, Standard & Poor's assigned its 'B' rating to the
company's new $100 million exchangeable senior subordinated note
issue due 2033. Proceeds are expected to be used to refinance
existing debt. At the same time, Standard & Poor's affirmed its
'BB-' corporate credit rating on LIN Television, an operating
subsidiary of LIN Holdings Corp. The outlook is stable. The
Providence, R.I.-based television owner and operator had
approximately $754.0 million of debt outstanding on March 31,
2003.


LOEWEN GROUP: Resolves Multiple Internal Revenue Service Claims
---------------------------------------------------------------
The Reorganized Loewen Group Debtors enter into a stipulation to
resolve multiple claims filed by the Internal Revenue Service.  
The salient terms of the Stipulation are:

       (1) The IRS withdraws these proofs of claim:

              Debtor                               Claim Amount
              ------                               ------------
              Charlotte Memorial Gardens, Inc.         $123,044
              Saint Clair Memorial Gardens, Inc.            469
              Greer-Mountain View Mortuary               10,000
              Barham Funeral Home, Inc.                 201,950
              John B. Romano & Sons Inc.                  9,410
              Loewen Group International, Inc.       17,657,302

       (2) The IRS Claim against Debtor Dudley Hughes Funeral
           Home, Inc., is disallowed and expunged as
           duplicative.  The remaining Claim against Debtor
           Dudley Hughes Funeral Home is not resolved through
           the Stipulation.  The Reorganized Debtors reserve
           their rights to prosecute their Objection to the
           remaining Claim against the Dudley Hughes estate
           on any and all applicable factual and legal
           grounds.

       (3) These claims will be allowed as priority claims
           classified in Class 1 under the Plan:

              Debtor                               Claim Amount
              ------                               ------------
              Danlan Corporation                         $1,736
              Wilson County Memorial Park Inc.            1,412
              Lower Valley Memorial Gardens Inc.          1,286
              Newby Funeral Home Inc.                     1,004
              Gray Gish Inc.                                919
              Ludlum Management Services Inc.             1,615
              O'Neill-Redden-Drown Funeral Home Inc.        791

       (4) The Debtors will fully satisfy the Allowed Claims by
           paying to the IRS $8,767. (Loewen Bankruptcy News,
           Issue No. 80; Bankruptcy Creditors' Service, Inc.,
           215/945-7000)  


LUCENT TECHNOLOGIES: Wins Contracts in China Topping $350 Million
-----------------------------------------------------------------
Lucent Technologies (NYSE: LU) announced a series of significant
agreements with China Unicom and China Telecom with total contract
values of more than $350 million.  

The agreements cover virtually the entire range of Lucent's next-
generation network offerings and services that are designed to
accelerate the smooth evolution to packet networks as well as
enabling the delivery of advanced multimedia communications
services.

Under the contracts, Lucent will deliver solutions that lay the
foundation for Internet protocol voice and data services such as
high-speed mobile data access, video-on-demand and IP Centrex
services.  These solutions, incorporating parts of Lucent's
recently announced Accelerate(TM) portfolio, simultaneously
provide the additional benefit of cutting the cost of operating
their networks.

These agreements underscore Lucent's close, collaborative
relationships with China's major service providers and demonstrate
the company's leading position in China's next-generation network
market.

"China is a leader in shaping the future of next-gen networks,"
said Jason Chi, president of Lucent Technologies China.  "China is
a key market for Lucent, and we value our long-term strategic
partnerships with China Unicom, China Telecom and other key
service providers in China."

"China growth in demand for advanced telecom services is enormous,
and the people of Lucent are committed to responding with the most
innovative communications technologies and solutions that will
equip our customers to meet these demands today and tomorrow," Chi
said.

      Expansion of China Unicom CDMA2000(R) Mobile Network

Under one of the new agreements, Lucent will provide further
support for the phase III expansion of China Unicom's CDMA2000(R)
mobile network, the world's largest CDMA network.  With its phase
III expansion, initiated this past summer, China Unicom will
expand its network capacity to support more than 50 million
customers, and offer coverage nationwide.  This will enable China
Unicom to serve a greater portion of the Chinese market, and also
positions the company for the widespread commercial rollout of
third-generation mobile technology.

Under the contract, Lucent will supply China Unicom with the
equipment needed to deliver mobile high-speed data services such
as video-on-demand, live streaming video and high-speed wireless
Internet access.

             China Unicom IP/MPLS Network Expansion

The two companies also signed an agreement to supply a multi-
service Multiprotocol Label Switching core solution for China
Unicom's data backbone based on the joint Lucent Technologies
Juniper Networks MPLS Core solution.

The Lucent Juniper Networks MPLS Core solution includes the first
announced capability in the industry that allows service providers
to automatically create a network path that can deliver guaranteed
ATM services end-to-end over an MPLS core network.  Deploying this
solution will enable China Unicom to offer varying guaranteed
levels of service to enterprises on a more cost-effective
converged MPLS core network.

China Unicom's national multi-service backbone network is
currently the largest multi-service switching network in the world
based on technology from Lucent and is the largest convergent
transport network in China.  The phase IV expansion will support a
variety of services in 330 major cities in China.

MPLS is a technology that improves IP network quality.  Lucent's
MPLS core solution enables the same high quality of service in IP
networks as available in today's standard data networks, which use
Asynchronous Transfer Mode technology.

        China Telecom Frame Agreement for Next-Gen Voice
                     and Data Solutions

Additionally, China Telecom signed a frame agreement with Lucent
for equipment and services covering optical systems, 5E-XC(TM)
switches from Lucent's Accelerate(TM) portfolio of Voice over IP
solutions and Personal Handyphone Systems.

China Telecom is the largest fixed-line service provider in China
and is among the first service providers in the world to deploy
Lucent's next-generation optical networking solutions including
the LambdaUnite(R) MultiService Switch, and PHS solutions, which
allow subscribers to use a sophisticated cordless phone to access
wireless voice and data services in a particular geographic area.

Lucent Technologies (S&P, B- Corporate Credit Rating, Negative
Outlook), headquartered in Murray Hill, N.J., USA, designs and
delivers networks for the world's largest communications service
providers. Backed by Bell Labs research and development, Lucent
relies on its strengths in mobility, optical, data and voice
networking technologies as well as software and services to
develop next-generation networks.  The company's systems, services
and software are designed to help customers quickly deploy and
better manage their networks and create new, revenue-generating
services that help businesses and consumers. For more information
on Lucent Technologies, visit its Web site at
http://www.lucent.com/

Lucent China has eight regional offices, two Bell Labs branches,
five R&D facilities and a number of joint ventures and wholly
owned enterprises. Currently, the company has approximately 3,000
employees in China and manufactures a full array of
telecommunications network equipment and solutions that serves the
Chinese and international markets.  For more information on Lucent
China, visit its Web site at http://www.lucent.com.cn/


MED GEN INC: September 30 Balance Sheet Upside-Down by $880,000
---------------------------------------------------------------
Med Gen Inc. (OTC BB: MDGN) reported financial results for its
fiscal 2003 fourth quarter and the year ended September 30, 2003.

The Company will issue its 2003 annual report to shareholders,
financial analysts, employees and community stakeholders.
Additionally, the entire document may be reviewed on the SEC EDGAR
Web site http://www.sec.gov/  

For the 12 months ending September 30, 2003, the company's net
sales decreased from $3.5 million to $2.3 million. This decrease
was due primarily to the K-Mart bankruptcy, the bankruptcy of the
company's second largest account, Nutrition For Life International
and the one time "ramp up" of orders to 1800 Wal-Mart stores in
December 2001. Concurrent with these events was the general
business downturn and a multi-million dollar advertising campaign
by the company's direct competitor in all of its retail markets.

Gross profit decreased along with the above events in an equal
manner, however the company's gross profit margins were kept
consistent at 65%. During this same period, management
successfully managed to decrease its selling and general
administrative expenses. As a favorable result of management's
efforts to "hold the line" operating losses were reduced to
$448,956 from the year ago period of $1,012,595, a significant
reduction of 55%. The loss represents $0.14 per share, post
dividend.

Med Gen, Inc.'s September 30, 2003 balance sheet shows a total
shareholders' equity deficit of about $880,000.

In August 2003, the Company introduced Good Nights Sleep(TM) into
the retail market with immediate sales to 10,000 stores including,
CVS, Albertson's and Eckerd Drug. A substantial increase in sales
in the international markets and the introduction of two private
brands. Snore Spray(TM) and Snorelief(TM) will add substantial
volume as well. Lastly, the company will add a "line extender" to
its nationally recognized brand Snorenz(R). Called SleepyTime-
Snorenz(R), the brand will feature "valerium" a natural root known
for its ability to enhance and induce sleep. Sleeping problems are
now considered to be major causal factors in many diseases and
human ailments. Med Gen management is focused on introducing
unique, one-of-a-kind products into the OTC market. A full
investment profile and CEO interview with MedGen Inc. is available
at http://www.PrBroadcast.com/  

MedGen(TM) is a publicly traded company on the OTCBB exchange
"MDGN."


METALS USA: Asking Court for Final Decree Closing Five Cases
------------------------------------------------------------
Jonathan C. Bolton, Esq., at Fulbright & Jaworski, in Houston,
Texas, relates that almost all issues involving the Metals USA
Debtors' Chapter 11 bankruptcy estates have been resolved.  
However, there are still two remaining unsecured claims pending
against the Debtors' Chapter 11 estate filed by Lift-All Company,
Inc. and Adbar Company, LC.

Lift-All is the holder of a contingent unsecured contribution
claim capped at $1,000,000.  The Debtors are in discussions with
Lift-All's counsel about the withdrawal of the contingent claim
because the Debtors believe that there is insurance that would
cover Lift-All's claim in its entirety.

On the other hand, Adbar is the holder of a disputed lease
rejection claim.  The Debtors' objection to Adbar's claim was
tried by the Court on June 2, 2003.  At the Court's request,
Adbar and the Debtors submitted post-trial briefing.  Although
the Court has indicated that Adbar would be entitled to an
unsecured claim, the Court has not yet issued an opinion
specifying the exact amount of Adbar's general unsecured claim
under Section 502(b)(6) of the Bankruptcy Code.

Mr. Bolton adds that there have been several lawsuits filed in
various state courts against the Debtors relating to prepetition
claims.  The Debtors believe that these lawsuits were filed in
violation of Sections 1141 and 524 of the Bankruptcy Code.  The
Debtors have been attempting to get the plaintiffs in those
lawsuits to dismiss their cases.  However, the Debtors may need
to ask the Court to hold these parties in contempt for violation
of Sections 1141 and 524 of the Bankruptcy Code if they are not
dismissed or settled.

Mr. Bolton tells that Court that five Debtor entities do not have
any claims currently pending against them.  Therefore, there is
no further need for Court administration and U.S. Trustee
supervision of these five cases:

   Debtor                                          Case Number
   ------                                          -----------
   Metals USA Plates and                        01-42559-H4-11
   Shapes Southcentral, Inc.
   101 E. Illinois Enid,
   Oklahoma 73701

   Metals USA Plates and                        01-42560-H4-11
   Shapes Southeast, Inc.
   210 St. Joseph Street,
   Mobile, Alabama 36602

   Metals USA Plates and Shares Southwest, LP   01-42562-H4-11
   11310 W. Little York,
   Houston, Texas 77041

   Metals USA Contract Manufacturing, Inc.      01-42566-H4-11
   Rt. 663 Perrowille Road
   Forest, Virginia 24551

   Interstate Steel Supply Company of Maryland  01-42547-H4-11
   1600 Cherry Hill Drive,
   Baltimore, Maryland 21230

The Debtors ask Judge Greendyke for a final decree closing the
five cases.

Three cases will remain open and pending until all claims against
these entities are finally resolved or adjudicated:

   Debtor                          Case Number     Pending Claim  
   ------                          -----------     -------------
   Metals USA, Inc.                01-42530-H4-11      Adbar
   Three Riverway, Suite 600,
   Houston, Texas 77002

   Metals USA Plates               01-42556-H4-11      Lift-All
   And Shapes Northeast, LP,
   2025 Greentree Road,
   Pittsburgh, Pennsylvania 15220

   Metals USA Specialty Metals     01-2567-H4-11       Adbar
   Northcentral, Inc.
   Half Day Road, Suite 126,
   Bannonkburnk, Illinois 60015
(Metals USA Bankruptcy News, Issue No. 39; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


MILESTONE SCIENTIFIC: Executes 1-For-3 Reverse Stock Split
----------------------------------------------------------
Milestone Scientific Inc. (AMEX:MS) effected a 1-for-3 reverse
stock split in its common stock, beginning January 14, 2004, to
facilitate its contemplated public offering underwritten by
Paulson Investment Company, Inc. and S.W. Bach & Company.

The reverse split has been effected pursuant to previously
obtained stockholder approval authorizing the board of directors
to effect a reverse stock split in a ratio of up to 1-for-10.

A registration statement relating to Milestone's common stock and
warrants has been filed with the Securities and Exchange
Commission but has not become effective. The securities may not be
sold nor may offers to buy be accepted prior to the time that the
registration statement becomes effective.

A copy of the prospectus relating to the offering may be obtained
by contacting Paulson Investment Company, Inc., S.W. 811 Naito
Parkway, Suite 200, Portland, OR 97204, Tel. No. 503-243-6000 or
S.W. Bach & Company, 675 3rd Ave. 10th Floor, New York, NY 10017,
Tel. No. 212-771-7602.

Milestone Scientific is the developer, manufacturer and marketer
of CompuMed(R) and CompuDent(R) computer controlled local
anesthetic delivery systems. These systems comprise a
microprocessor controlled drive unit as well as The Wand(R)
handpiece, a single patient use product that is held in a pen like
manner for injections. In 2001, Milestone Scientific received
broad United States patent protection on an enabling technology
for computer controlled, pressure sensitive infusion, perfusion,
suffusion and aspiration, which provides real time displays of
pressures, fluid densities and flow rates, that advances the
delivery and removal of a wide array of fluids. In 2002, Milestone
Scientific received United States patent protection on a safety
engineered sharps technology, which allows for fully automated
true single-handed activation with needle anti-deflection and
force-reduction capability. In 2003, Milestone received FDA
Clearance to market SafetyWand(TM), which incorporates engineered
sharps injury protection features to aid in the prevention of
accidental needlesticks.

                         *    *    *

                  Going Concern Uncertainty

As previously reported, Milestone Scientific Inc.'s condensed
consolidated financial statements have been prepared assuming
Milestone will continue as a going concern.

However, Milestone incurred net losses of approximately $1,787,000
and $1,604,000 and negative cash flows from operating activities
of $860,990 and $417,765 during the nine months ended September
30, 2003 and 2002, respectively. As a result, Milestone had a cash
balance of approximately $96,000, a working capital deficiency of
approximately $1,449,000 and a stockholders' deficiency of
approximately $2,877,000 as of September 30, 2003. These matters
raise substantial doubt about Milestone's ability to continue as a
going concern. Management believes that its initial concerns about
the Company's ability to continue as a going concern were
alleviated through its continuing efforts to reduce operating
overhead, its subsequent satisfaction of a substantial portion of
its outstanding obligations, the utilization of its equity
facility and the introduction of new products.

Nevertheless, management believes that it is probable that
Milestone will continue to incur losses and negative cash flows
from operating activities through at least September 30, 2004 and
that the Company will need to obtain additional equity or debt
financing, as well as to continue its ability to defer its
obligations, to sustain its operations until it can expand its
customer base and achieve profitability.


MIRANT CORP: Secures Court Clearance for Avista Settlement Pact
---------------------------------------------------------------
Prior to the Petition Date, Mirant Americas Energy Marketing LP
and Avista Energy, Inc. entered into these agreements:

   * Base Contract for Short-Term Sale and Purchase of Natural
     Gas, dated October 1, 1997;

   * Master Electric Power Purchase and Sale Agreement, dated
     March 20, 1998;

   * Master Monthly Netting and Close-Out Netting Agreement,
     dated March 1, 1999;

   * ISDA Master Agreement, dated April 1, 1999; and

   * Western Systems Power Pool Agreement, dated February 1,
     2003, as amended from time to time.

In connection with the Agreements, Avista caused to be delivered
to MAEM, as collateral, a letter of credit issued by BNP Paribas
naming MAEM as beneficiary, which as amended to date has an
available amount of $5,500,000.

                  Avista's Purported Termination

Avista contends that pursuant to the Netting Agreement, all
transactions under the Natural Gas Contract, the Master Power
Agreement and the WSPP Agreement terminated automatically
immediately prior to the Petition Date.  Moreover, on July 17,
2003, Avista exercised its right to terminate the ISDA.

At the time Avista purported to terminate the relevant
transactions entered into under the Agreements, MAEM was "in the
money" as to those transactions -- after all appropriate netting
of claims and amounts owing between the parties, a positive net
amount was owing by Avista to MAEM as a result of the termination
of the various transactions entered into under the Agreements.  
As required by the Agreements, a "termination settlement payment"
Avista owed to MAEM was calculated with respect to the various
transactions entered into under the Agreements, and negotiations
were thereafter conducted between the parties with respect to the
amount of the termination settlement payment.

                     The Settlement Agreement

As a result of the good faith negotiations between the parties,
Avista and MAEM agreed on these settlement terms:

   *  Avista will pay to MAEM $6,738,000;

   *  Avista is required to maintain the continued existence of
      the Letter of Credit, and MAEM must not submit a draw
      thereunder, pending Bankruptcy Court approval of the
      Settlement;

   *  Upon timely receipt of the Payment, MAEM will cause the
      Letter of Credit to be terminated;

   *  Upon completion of the conditions, the Agreements will be
      automatically terminated, other than the ISDA, which was
      previously terminated by Avista;

   *  Upon completion of the conditions, mutual releases of
      claims relating to the Agreements become effective and any
      guarantees executed in favor of MAEM or Avista will be null
      and void and of no further legal force or effect as to
      existing and future transactions; and

   *  The Settlement Agreement must be approved by the Court no
      later than December 31, 2003.

Mr. Peck asserts that the Settlement Agreement is fair and
reasonable on these grounds:

   (a) Since the Agreements are complicated and subject to
       varying interpretations, the probability of success in
       litigation to settle the dispute is uncertain;

   (b) Litigating the dispute would be expensive and time-
       consuming; and

   (c) The Settlement Agreement provides for immediate payment
       to MAEM of $6,738,000.

Accordingly, pursuant to Rule 9019 of the Federal Rules of
Bankruptcy Procedure, the Debtors sought and obtained the Court's
approval of their Settlement Agreement with Avista. (Mirant
Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


NATIONAL CENTURY: Court Approves Proposed Solicitation Protocol
---------------------------------------------------------------
U.S. Bankruptcy Court Justice Calhoun approves the National
Century Financial Enterprises Debtors' proposed solicitation
procedures, as modified.

                           Ballots

The Court also approves the Ballots, including the proposed
election mechanisms and the instructions attached to each Ballot.  
The appropriate Ballots will be distributed to claimholders in
these classes entitled to vote to accept or reject the Plan:

Ballot No. 1  NPF VI Class A      Ballot for NPF VI Class A
              Noteholder Ballot   Noteholder Claims (Individual
              (Individual Holder) Record Holders)

Ballot No. 2  NPF VI Class A      Ballot for NPF VI Class A
              Noteholder Ballot   Noteholder Claims (Record
              (Master Ballot)     Holders)

Ballot No. 3  NPF VI Class A      Ballot for NPF VI Class A
              Noteholder Ballot   Noteholder Claims (Beneficial
              (Beneficial Owners) Owners)

Ballot No. 4  NPF XII Class A     Ballot for NPF XII Class A
              Noteholder Ballot   Noteholder Claims (Individual
              (Individual Holder) Record Holders)

Ballot No. 5  NPF XII Class A     Ballot for NPF XII Class A
              Noteholder Ballot   Noteholder Claims (Record
              (Master Ballot)     Holders)

Ballot No. 6  NPF XII Class A     Ballot for NFF XII Class A
              Noteholder Ballot   Noteholder Claims (Beneficial
              (Beneficial Owners) Owners)

Ballot No. 7  Class C-6 Ballot    Ballots for Class C-6 General
                                  Unsecured Claims (Other than
                                  Noteholder Deficiency Claims)

Ballot No. 8  Class C-7 Ballot    Ballot for Class C-7
                                  Convenience Claims

                          Voting Deadline

All Ballots must be properly executed, completed and delivered to
the Debtors' counsel, Jones Day, either by mail, by overnight
courier or by personal delivery so that, in each case, they are
received by Jones Day no later than 5:00 p.m., Eastern Time, on
February 12, 2004.

                         Tabulation Rules

Solely for purposes of voting to accept or reject the Plan, each
claim within a class of claims entitled to vote to accept or
reject the Plan will be temporarily allowed in accordance with
these Tabulation Rules:

   (a) A Claim will be deemed temporarily allowed for voting
       purposes in an amount equal to:

       (1) the non-contingent, liquidated and undisputed amount
           of the Claim, as set forth in the Schedules; or

       (2) if a proof of Claim has been timely filed in respect
           of the Claim, the non-contingent, liquidated and
           undisputed amount set forth in the proof of Claim.

   (b) If a Claim is deemed allowed in accordance with the Plan,
       the Claim will be temporarily allowed for voting purposes
       in the deemed allowed amount set forth in the Plan.

   (c) If a Claim for which a proof of Claim has been timely
       filed and has not been disallowed is listed or marked or
       otherwise referenced on its face as contingent,
       unliquidated or disputed, either in whole or in part, only
       the non-contingent, liquidated and undisputed portion, if
       any, of the Claim will be deemed temporarily allowed for
       voting purposes, subject to the other Tabulation Rules,
       and the remaining portion of such Claim will be
       disallowed for voting purposes.

   (d) If a Claim has been allowed pursuant to a stipulation
       approved by the Court, the Claim will be deemed
       temporarily allowed for voting purposes in the amount set
       forth in the stipulation.

   (e) If a Claim has been estimated or otherwise allowed for
       voting purposes by a Court order, the Claim will be
       temporarily allowed for voting purposes in the amount so
       estimated or allowed by the Court.

   (f) With respect to a Claim as to which the Claim is listed in
       the Schedules as contingent, unliquidated or disputed or
       in a zero amount or not listed in the Schedules; and a
       proof of Claim was not timely filed and no stipulation
       allowing the Claim has been approved by the Court, the
       Claim will be disallowed for voting purposes.

   (g) If the Debtors have filed and served a motion to disallow
       a Claim or to allow or estimate the Claim in an amount
       different from the amount asserted in the Claim on or
       before the date that is 10 days after the date of
       service of the Confirmation Hearing Notice, the Claim will
       be temporarily allowed or disallowed for voting purposes
       in accordance with the relief sought in the motion.

   (h) If a Claim holder identifies a Claim amount on its Ballot
       that is less than the amount otherwise calculated in
       accordance with the Tabulation Rules, the Claim will be
       temporarily allowed for voting purposes in the lesser
       amount identified on the Ballot.

   (i) With respect to the Noteholder Claims, the amounts of the
       Claims for voting purposes will be the lesser of:

       (1) the amounts on the Record Holder Register or the
           Master Ballot Agent Register, as applicable, or

       (2) the amounts identified by an Individual Record Holder
           in an Individual Noteholder Ballot or by a Master
           Ballot Agent on a Noteholder Master Ballot.

   (j) The Claims of each NPF VI Class A Noteholder will be
       temporarily allowed for voting purposes in these classes
       and amounts:

       (1) a Claim in Class C-2A in an amount equal to:

           -- the Noteholder's Claims in respect of NPF VI
              Class A Notes multiplied by;

           -- the estimated amount of Allowed Secured Claims in
              Class C-2A set forth in the Disclosure Statement
              divided by;

           -- the aggregate amount of NPF VI Class A Noteholder
              Claims; and

       (2) a Claim in Class C-6 in an amount equal to:

           -- the Noteholder's Claims in respect of NPF VI
              Class A Notes multiplied by;

           -- the initially allowed amount of the Noteholder
              Deficiency Claim divided by;

           -- the aggregate amount of NPF VI Class A Noteholder
              Claims and NPF XII Class A Noteholder Claims.

   (k) The Claims of each NPF XII Class A Noteholder will be
       temporarily allowed for voting purposes in these classes
       and amounts:

       (1) a Claim in Class C-3A in an amount equal to:

           -- the Noteholder's Claims in respect of NPF XII
              Class A Notes multiplied by;

           -- the estimated amount of Allowed Secured Claims in
              Class C-3A set forth in the Disclosure Statement
              divided by;

           -- the aggregate amount of NPF XII Class A Noteholder
              Claims; and

       (2) a Claim in Class C-6 in an amount equal to:

           -- the Noteholder's Claims in respect of NPF XII
              Class A Notes multiplied by;

           -- the initially allowed amount of the Noteholder
              Deficiency Claim divided by;

           -- the aggregate amount of NPF XII Class A Noteholder
              Claims and NPF VI Class A Noteholder Claims.

If any claimant seeks to challenge the allowance of its claim for
voting purposes in accordance with the Tabulation Rules, the  
claimant must file a motion, pursuant to Rule 3018(a) of the
Federal Rules of Bankruptcy Procedure, for an order temporarily
allowing the claim in a different amount or classification for
purposes of voting to accept or reject the Plan, and serve the
motion on the Debtors' counsel so that it is received no later
than 20 days after the date of service of the Confirmation
Hearing Notice.

In tabulating the Ballots:

   (a) any Ballot that is properly completed, executed and timely
       returned to the Tabulation Agent but does not indicate an
       acceptance or rejection of the Plan will be deemed an
       acceptance of the Plan;

   (b) if no votes to accept or reject the Plan are received with
       respect to a particular class, the class will be deemed to
       have voted to accept the Plan;

   (c) if a creditor casts more than one Ballot voting the same
       Claim before the Voting Deadline, the latest dated Ballot
       will be deemed to reflect the voter's intent and thus will
       supersede any prior Ballots; and

   (d) creditors will be required to vote all of their claims
       within a particular class under the Plan either to accept
       or reject the Plan and may not split their votes.

                       Confirmation Hearing

The Confirmation Hearing is scheduled to be conducted beginning
on February 24, 2004 at 9:30 a.m. and continuing on February 25
and 26, 2004.  The Confirmation Hearing may be continued from
time to time by the Court without further notice other than the
announcement of the adjourned date.

                 Confirmation Objection Deadline

Objections, if any, to confirmation of the Plan must be in
writing, state the name and address of the objecting party and
the nature of the claim or interest of such party, state with
particularity the basis and nature of any objection to the
confirmation of the Plan, and be filed with the Court and served
on the Interested Parties so that they are received no later than
4:00 p.m., Eastern Time, on February 12, 2004.

                           Record Date

The Court fixed January 5, 2004 as the record date for purposes
of determining which creditors and equity holders are entitled to
receive Solicitation Packages and, where applicable, vote on the
Plan.

                        Transferred Claim

With respect to any transferred claim, the transferee will be
entitled to receive a Solicitation Package and cast a Ballot on
account of the claim only if:

   (a) all actions necessary to effect the transfer of the claim
       pursuant to Rule 3001(e) of the Federal Rules of
       Bankruptcy Procedure have been completed by the Record
       Date; or

   (b) the transferee files, no later than the Record Date, the
       documentation required by Bankruptcy Rule 3001(e) to
       evidence the transfer and a sworn statement of the
       transferor supporting the validity of the transfer.

                 Mailing of Solicitation Packages

The Solicitation Packages will be mailed no later than 30 days
prior to the Voting Deadline to:

   -- all persons or entities that have filed proofs of claim or
      equity interests on or before the Record Date;

   -- all persons or entities listed in the Schedules as holding
      liquidated, non-contingent, undisputed claims as of the
      Record Date;

   -- all other known holders of claims or equity interests
      against the Debtors, if any, as of the Record Date;

   -- all parties-in-interest that have filed requests for notice
      in accordance with Bankruptcy Rule 2002 in the Debtors'
      Chapter 11 cases on or before the Record Date; and

   -- the U.S. Trustee.

The Debtors are excused from mailing Solicitation Packages to
those entities for which the Debtors have only Undeliverable
Addresses unless the Debtors are provided with accurate addresses
for the entities, in writing, on or before the Record Date.
(National Century Bankruptcy News, Issue No. 30; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


NATIONAL CONSTRUCTION: Harel Replaces Ernst & Young as Auditors
---------------------------------------------------------------    
National Construction Inc. (TSX Venture: NAT) advises that Ernst &
Young LLP has resigned as the auditors of National effective
December 15, 2003. National is pleased to announce that Harel
Drouin - PFK, Chartered Accountants, will commence as the new
auditors of National.

At February 28, 2003, National Construction's balance sheet shows
a total shareholders' equity deficit of about C$920,000.


NATIONAL STEEL: Wants Clearance for Huber Parties Settlement
------------------------------------------------------------
The National Steel Debtors ask the Court to approve a compromise
with regard to certain claims held by Louis J. Huber, Spectra
Resources, Inc., Susan L. Huber Irrevocable Living Trust, Daniel
L. Huber Irrevocable Living Trust, Laura J. Huber Irrevocable
Living Trust and Susan L. Huber Revocable Living trust.

Mark A. Berkoff, Esq., at Piper Rudnick LLP, in Chicago,
Illinois, informs the Court that the Huber Parties and the
Debtors are adversaries in two lawsuits pending before the United
States District Court for the Eastern District of Missouri.

Mr. Berkoff relates that Spectra was in the business of selling
various products to steel mills, specifically as a manufacturer's
representative for dolomitic quicklime and magnesium lime, which
are raw materials used in steelmaking.  Spectra also served as a
broker of dolomitic fluxstone, a raw material used in blast
furnaces in the ironmaking process.  Spectra began selling these
materials to the Debtors, but not under binding contracts.  The
Debtors retained the right to cancel the purchase orders at any
time.  Louis Huber is the owner and operator of Spectra.

In the Missouri Lawsuits, the Debtors alleged, inter alia, that
Louis Huber and Spectra paid more than $1,100,000 over nearly 12
years to at least two of the Debtors' high-level employees to
ensure that they continued to buy material from Spectra.  Mr.
Berkoff asserts that Louis Huber and Spectra profited greatly
from this scheme.  Accordingly, the Debtors' claims against the
Huber Parties include bribery, RICO violations and participation
in breach of fiduciary duty.

The Huber Parties asserted claims and defenses of their own in
the Missouri Lawsuits, including the extortion defense that the
Debtors' employees coerced them into making special payments in
return for the continued business, without binding contracts,
that the Debtors knew Spectra so desperately depended on.  
Spectra also alleged that the Debtors did not fully and fairly
pay for the materials that Spectra shipped over the years, to the
tune of over $900,000 in damages.  According to Spectra, the
Debtors' alleged breach prevented it from being able to pay its
own suppliers, thus pushing it into further financial straits.

Mr. Berkoff notes that the Missouri Lawsuits involve expensive
claims, considerable discovery and several different parties.
Thus, the Huber Parties and the Debtors have reached a
settlement, set forth in a fully executed agreement, wherein the
Huber Parties will pay the Debtors $1,000,000 in cash, within
five days after the settlement is approved by the Court, in full
resolution of the Missouri Lawsuits.  As part of the Settlement,
the parties exchange mutual releases and will dismiss the
Missouri Lawsuits.

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

   (a) it allows the Debtors to collect a considerable amount of
       cash in one lump sum payment;

   (b) it stops the expense associated with considerable
       discovery and briefing necessary to continue litigating
       the Missouri Lawsuits;

   (c) it eliminates the risk, uncertainty, delay and expense
       associated with the trials of the Missouri
       Lawsuits; and

   (d) the Huber Parties will withdraw any claims pending against
       the Debtors. (National Steel Bankruptcy News, Issue No. 42;
       Bankruptcy Creditors' Service, Inc., 215/945-7000)


NOVA CHEMICALS: Closes Private Placement of $400MM Senior Notes
---------------------------------------------------------------
NOVA Chemicals Corporation (NYSE:NCX)(TSX:NCX) closed a private
placement of $400 million aggregate principal amount of 6.5%
Senior Notes due 2012.

The Company plans to use the net proceeds of the offering to
redeem, on or about March 1, 2004, its 9.04% preferred securities
due 2048 and 9.50 % preferred securities due 2047. The two issues
of preferred securities total $382.5 million. The balance of the
proceeds will be used for general corporate purposes.

The senior notes have not been registered under the United States
Securities Act of 1933 and may not be offered or sold in the
United States absent registration or an applicable exemption from
registration requirements. The issuance of the senior notes has
been structured to allow secondary market trading under Rule 144A
under the Securities Act of 1933.

NOVA Chemicals (S&P, BB+ Long-Term Corporate Credit Rating,
Positive) is a focused, commodity chemical company producing
olefins/polyolefins and styrenics at 18 locations in the United
States, Canada, France, the Netherlands and the United Kingdom.
NOVA Chemicals Corporation shares trade on the Toronto and New
York exchanges under the trading symbol NCX. Visit NOVA Chemicals
on the Internet at http://www.novachemicals.com/


NRG ENERGY: Agrees to Let Dick Corp. & GE File Foreclosure Suits
----------------------------------------------------------------
Before the Petition Date, NRG Energy, Inc. and General Electric
Company entered into an agreement pursuant to which GE agreed to
furnish materials and render services in connection with the
construction of various electric generation facilities, including
a facility on real property in Meriden, Connecticut, owned by
Meriden Gas Turbines LLC.  Meriden Gas is a non-debtor affiliate
of the Debtors.

Meriden Gas and Dick Corporation also entered into an agreement
pursuant to which Dick agreed to act as contractor in connection
with the construction of a power generation facility on the
Meriden Property.  The Debtors guaranteed the payment of Dick.

In accordance with the Connecticut mechanic's lien statutes, GE
filed a mechanic's lien against the Meriden Property for
$13,267,202 on September 4, 2002, and another mechanic's lien for
$1,893,057 on September 26, 2002.

Similarly, Dick filed mechanic's liens against the Meriden
Property, of which the most recent are the:

   (a) Sixth Amended Mechanic's Lien for $4,456,965 on
       October 11, 2002, recorded in the land records of Berlin,
       Connecticut; and

   (b) Seventh Amended Mechanic's Lien for $29,924,345 on
       October 18, 2002, recorded in the land records of the City
       of Meriden, Connecticut.

GE and Dick assert that Section 49-39 of the Connecticut General
Statutes requires them to initiate suits to foreclose on their
mechanic's liens within one year of recordation of each
mechanic's liens in the applicable recording office, and,
therefore GE and Dick must file and serve a lawsuit in
Connecticut Superior Court to foreclose on its mechanic's liens
and record a notice of lis pendens, or it risks losing its
mechanic's lien rights.

GE and Dick further argue that Meriden Gas, NRG Energy and others
must be named as parties in the Foreclosure Suits because Meriden
Gas holds title to the Meriden Property, NRG Energy is the
primary obligor on the GE contract, and NRG Energy is an obligor
with respect to the amounts claimed by Dick and may assert
ownership rights in and to property covered by Dick's mechanic's
liens.

Thus, GE and Dick contend that in order to timely file their
Foreclosure Suits in Connecticut and protect their interests
under the Connecticut Statutes, they need immediate relief from
the automatic stay.

Accordingly, in a Court-approved stipulation, the parties agree
that:

   (a) GE and Dick may have limited relief from the automatic
       stay to:

       (1) name NRG as a defendant in a Foreclosure Suit;

       (2) file and serve the Foreclosure Suit on all parties
           required pursuant to Connecticut law, including NRG;
           and

       (3) record a notice of lis pendens as required by
           Connecticut General Statutes Section 49-32; and

   (b) The Debtors do not waive any rights, claims or defenses to
       GE's and Dick's claim that the Debtors, any party-in-
       interest or other entity may have available to it in
       either the Foreclosure Action or the proceeding, and all
       rights claims and defenses are preserved. (NRG Energy
       Bankruptcy News, Issue No. 20; Bankruptcy Creditors'
       Service, Inc., 215/945-7000)


OWENS CORNING: Wants Nod to Pay HSBC's $3-Million Secured Claim
---------------------------------------------------------------
J. Kate Stickles, Esq., at Saul Ewing LLP, in Wilmington,
Delaware, recounts that in February 1981, the Ohio Water
Development Authority issued Solid Waste Revenue Bonds of the
State of Ohio for $3,000,000, to finance the cost of solid waste
facilities to be constructed at Owens Corning's manufacturing
plant in Newark, Ohio.  The Project Bonds were issued pursuant to
a Trust Indenture, dated as of February 1, 1981.  The Project
Bonds bear non-default interest of 9-7/8% per annum, with a
default rate of 12%.

To assist in the financing of the Project, the Authority loaned
the proceeds from the sale of the Project Bonds to Owens Corning
pursuant to a loan agreement dated February 1, 1981.  Under the
provisions of the Loan Agreement, the Authority assigned its
interest in the Loan Agreement to the Initial Trustee, and Owens
Corning was directed to make its payments on the Project Bonds
directly to the Initial Trustee.  The Loan Agreement provided for
two annual payments of interest, with a "balloon" payment of the
full principal amount of the Project Bonds, if not redeemed
earlier, on February 1, 2001.

To secure Owens Corning's payment obligations under the Loan
Agreement, Ms. Stickles relates that Owens Corning, as mortgagor,
executed an Open-End Mortgage and Security Agreement dated as of
February 1, 1981, with the Authority as mortgagee.  By the terms
of the Mortgage, Owens Corning granted to the Authority a
mortgage and security interest in certain real property located
in Newark, Ohio at the site of the Project, which consisted of
111 acres of land, and certain personal property.  Owens Corning
and the Authority subsequently entered into a Supplemental
Mortgage and Security Agreement dated as of October 5, 1981,
whereby Owens Corning supplemented the Mortgage to include two
additional parcels of real property, totaling 11 acres of land.

The property subject to the Mortgage and the Supplemental
Mortgage consists of, inter alia, Owens Corning's Newark plant,
which is one of the largest fiberglass production facilities in
the world.  Apart from substantial value attributed to machinery,
equipment and manufacturing operations support located at the
Newark Plant, the plant has a book value in excess of $7,500,000.

The Authority assigned both the Mortgage and the Supplemental
Mortgage to the Initial Trustee under the Trust Indenture as
further security for the payment of the Project Bonds.

Because of its bankruptcy filing in October 2000, Owens Corning
did not make the payment of principal or interest due on the
Project Bonds in February 2001.  On April 15, 2002, HSBC Bank
USA, as successor trustee, filed a secured proof of claim for
$3,000,000, plus interest, expenses, and other related amounts.

Because the Newark facility securing the HSBC Claim has a value
that greatly exceeds the amount of the claim, and because the
HSBC Claim, continues to accrue interest postpetition, the
Debtors believe that the claim should be satisfied as soon as
possible.  This will allow the Debtors to avoid the accruing
interests.

Thus, the Debtors seek the Court's authority, pursuant to
Sections 105 and 363(b)(1) of the Bankruptcy Code, to pay HSBC
its secured claim for $3,000,000, as well as all accrued and
unpaid interest and costs and fees with respect to the claim.

Ms. Stickles points out that Owens Corning has given, and has
received, fair and reasonable consideration for the HSBC Claim,
through its prepetition receipt of the proceeds of the Revenue
Bonds.  With the proposed payment of the HSBC Claim, the Mortgage
and Supplemental Mortgage will be released after payment of the
amount due, thereby removing the corresponding lien on the Newark
Property.

                          HSBC Responds

HSBC has no objection to the Debtors' request to the extent that
they want to pay the secured claim.  However, HSBC objects to the
contemplated amount the Debtors will pay under the request.

Mark Somerstein, Esq., at Kelley Drye & Warren LLP, in New York,
asserts that since HSBC is an oversecured creditor, the Debtors
must pay, inter alia, postpetition interest at the default rate,
and the fees and expenses of HSBC in connection with its Secured
Claim.

Among other things, the Debtors' request is not clear as to
whether they propose to pay interest at the appropriate default
rate of 12% per annum or to pay all fees and expenses due in
connection with the Secured Claim.  However, the Debtors' request
implies that the Debtors may be authorized to pay less than the
full amount due and owing to HSBC on the claim.

Mr. Somerstein contends that there is no basis, as a matter of
law, for HSBC to compromise the Secured Claim.  The Debtors
acknowledge that HSBC holds an oversecured claim.  Intrinsically,
HSBC is entitled, under Section 506(b) of the Bankruptcy Code, to
recover the outstanding principal amount, postpetition interest
at the default rate, in addition to other reasonable fees, costs
and charges, including, without limitation, compensation,
disbursements and expenses for the services of HSBC, as Indenture
Trustee, and HSBC's agents and counsel.

Moreover, Mr. Somerstein points out that under the Indenture, in
the absence of the approval of 100% of the holders of the then
outstanding Secured Bonds, the Indenture Trustee cannot consent
to any change or modification to the terms of payment due under
the Loan Agreement.  Hence, HSBC, as Indenture Trustee, is
prohibited from compromising the amount of the Secured Claim.

Accordingly, HSBC asks the Court to direct the Debtors to pay the
Secured Claim in full. (Owens Corning Bankruptcy News, Issue No.
65; Bankruptcy Creditors' Service, Inc., 215/945-7000)   


PACIFIC GAS: Secures Clearance for Santa Clara City Settlement
--------------------------------------------------------------
Pacific Gas and Electric Company obtained approval from the U.S.
Bankruptcy Court for the Northern District of California for a
Settlement Agreement with the City of Santa Clara, California.

                         Backgrounder

On March 8, 1990, Pacific Gas and Electric Company and the City
of Santa Clara, California, entered into the Grizzly Development
and Mokelumne Settlement Agreement.  Under the Grizzly Agreement,
PG&E sells, inter alia, capacity and energy to Santa Clara at
prices reflected in the Grizzly Agreement.

On October 3, 2001, Santa Clara filed a timely proof of claim
asserting -- in addition to "reserved claims" -- prepetition
"known claims" amounting $3,285,612 for the energy sold to PG&E
by the City under an Interconnection Agreement among the parties
and for certain royalties owed by PG&E to Santa Clara.  In May
2003, the parties entered into a stipulation, pursuant to which
Santa Clara partially withdrew $44,514 of its Known Claims,
reducing its Known Claims to $3,241,097.

On November 30, 2001, PG&E filed a Proof of Claim against Santa
Clara, pursuant to Section 900 of the California Government Code,
amounting to $10,419,766 for the Under-billed Amount.  PG&E
subsequently recalculated the Under-billed Amount and determined
that it should be reduced to $8,458,653.  Santa Clara denies that
it is liable for the Under-billed Amount.

To resolve all outstanding issues without expending the time and
resources associated with further legal proceedings, the parties
stipulate and agree that:

   (a) Santa Clara will pay $4,200,000 to PG&E, in exchange for
       PG&E's release of Santa Clara for all claims arising out
       of the Dispute -- $2,100,000 of the Settlement Payment is
       based on the power sold to Santa Clara by PG&E under the
       Grizzly Agreement before the Petition Date, while the
       remaining $2,100,000 is based on the power sold to Santa
       Clara after the Petition Date;

   (b) Without further delay, Santa Clara will pay to PG&E the
       postpetition amount;

   (c) At the same time, Santa Clara will deposit the prepetition
       amount in a mutually agreeable interest bearing escrow
       account.  The prepetition amount will remain in the escrow
       account until the parties have resolved Santa Clara's
       Proof of Claim, whether by agreement, through settlement
       or other Bankruptcy Court process.  Once Santa Clara's
       Proof of Claim is resolved, the funds in the escrow
       account will be distributed to the parties in the amounts
       that reflect the Settlement.  The cost of establishing and
       maintaining the escrow account will be shared equally by
       the parties; and

   (d) PG&E will withdraw its Claim against Santa Clara, with
       prejudice.  PG&E agrees not to reassert the Claim. (Pacific
       Gas Bankruptcy News, Issue No. 69; Bankruptcy Creditors'
       Service, Inc., 215/945-7000)   


PARMALAT GROUP: Australian Unit Remains Strong, Viable Business
---------------------------------------------------------------
Parmalat Australia Ltd says that it remains a sound, viable
business and operates independently from its scandal-burdened
parent.  Importantly, the Australian business does not require
support from its parent for day-to-day operations.

The trading results for Parmalat Australia, formerly Pauls
Limited, indicate a strong, viable business, according to
Managing Director David Lord.  In a recent press release, Mr.
Lord explained that Parmalat Australia's operations have been
profitable and cash flow positive.  This is expected to continue.

"All trading is conducted through this entity," he explained.

The 2002 statutory accounts of Parmalat Australia -- publicly
available from ASIC -- clearly show EBIT of A$18.2 million and
that the company generated more than A$25.0 million of cash from
operations after capital expenditure.  Recent media reports refer
to the local non-trading Australian holding company, Parmalat
Pacific Holdings Pty Ltd -- formerly Parmalat Australia Pty Ltd
-- the results of which, since 1998 reflect holding costs
associated with the original acquisition of Pauls Limited,
including the write-off of goodwill on acquisition.  A
significant proportion of these expenses are non-cash items as
evidenced in the Statement of Cash Flows in the accounts of the
holding company and, hence, have no cash impact on the total
Australian operations.

In Australia, Parmalat operations in 2003 continued to generate
solid EBIT growth and also growth in free cash generation.
Parmalat Australia's 2003 results continue to show a significant
improvement in operational performance and this will be evidenced
in the audited 2003 accounts.

"For Parmalat Australia, it's business as usual despite
developments involving its parent company in Italy.  We operate
as an independent entity and with the ongoing support of all
stakeholders, including customers, employees, farmers, banks and
suppliers, we will continue to build on our success," Mr. Lord
said.

Parmalat Australia employs over 1,500 people across Australia.  
It purchases more than 600,000,000 liters of milk from farmers
and cooperatives each year. (Parmalat Bankruptcy News, Issue No.
2; Bankruptcy Creditors' Service, Inc., 215/945-7000)   


PEABODY ENERGY: Will Publish Fourth-Quarter Results on Jan. 29
--------------------------------------------------------------
On Thursday, Jan. 29, 2004, Peabody Energy will announce the
results for the fourth quarter ended Dec. 31, 2003.  A conference
call to review the results has been scheduled for 10 a.m. CST on
Thursday, Jan. 29.  The call will be open to the public.

Participants may dial the following phone numbers:

        U.S. & Canada  (888) 428-4471
        International  (612) 288-0318

The call, replays and other investor data will also be available
through the Internet at http://www.PeabodyEnergy.com/

Peabody Energy (NYSE: BTU) (Fitch, BB+ Credit Facility and BB
Senior Unsecured Debt Ratings, Positive Outlook) is the world's
largest private-sector coal company, with 2002 sales of 198
million tons of coal and $2.7 billion in revenues.  Its coal
products fuel more than 9 percent of all U.S. electricity
generation and more than 2 percent of worldwide electricity
generation.


POPP EXCAVATING: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Popp Excavating, Inc.
        685 Schaefer Road
        Belleville, Washington 53508

Bankruptcy Case No.: 04-10136

Type of Business: The Debtor provides excavating services such as
                  Land Clearing, Road building, Sewer and Water
                  Laterials in the Belleville area, performing
                  site, commercial, and residential excavation.
                  See http://www.poppexcavatinginc.com

Chapter 11 Petition Date: January 8, 2004

Court: Western District of Wisconsin (Madison)

Judge: Robert D. Martin

Debtor's Counsel: J. David Krekeler, Esq.
                  Krekeler, S.C.
                  15 North Pinckney Street
                  P.O. Box 828
                  Madison, WI 53701-0828
                  Tel: 608-258-8555

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
WI Laborers Health            Delinquent payments        $65,526
                              to the WI Laborers
                              Health Fund and
                              Pension Fund; Judgment
                              entered in US
                              District Court Case
                              No. 03-C-0406-C on

Wingra Stone Company          Dane Co. Case No.          $63,686
                              02-CV-2867, Money
                              Judgment 03/18/03
                              Green Co. Case No.
                              03-TJ-11, Transcript
                              of Judgment

Myron and Wilma Popp          Unsecured business         $30,000
                              loan

Yahara                        Trade debt of Popp         $29,470
                              Excavating, Inc.

Mary's Trucking, Inc.         Trade debt of Popp         $17,302
                              Excavating, Inc.

Hammersley Stone Co., Inc.    Trade debt of Popp         $15,715
                              Excavating, Inc.

Case Credit Vantage Account   Purchases on Popp          $15,253
                              Excavating, Inc.
                              business account

Payne & Dolan, Inc.           Trade debt of Popp         $13,638
                              Excavating, Inc.

Hausmann-Johnson Insurance    Trade debt of Popp         $13,319
Co.                           Excavating, Inc.

Forever Sandfill & Limestone  Trade debt of Popp          $9,325
                              Excavating, Inc.

Advanta Business Card         Purchases on Popp           $8,732
                              Excavating, Inc.
                              business account

Landmark Service Cooperative  Trade debt of Popp          $8,106
                              Excavating, Inc.

Platinum Plus for Business    Purchases on Popp           $7,449
                              Excavating, Inc.
                              business account

Citibusiness Card             Purchases on Popp           $7,421
                              Excavating, Inc.
                              business account

Northwestern Stone            Trade debt of Popp          $7,321
                              Excavating, Inc.

CFM                           Trade debt of Popp          $7,235
                              Excavating, Inc.

Rees Construction Co.         Trade debt of Popp          $6,907
                              Excavating, Inc.

Smith & Gesteland             Trade debt of Popp          $6,774
                              Excavating, Inc.
                              (accounting/tax
                              preparation services)

Comstock Tires                Trade debt of Popp          $4,531
                              Excavating, Inc.

CZ Trucking Company           Trade debt of Popp          $4,484
                              Excavating, Inc.


PORTLAND GEN: Fitch Says Outlook Unaffected by SEC Ruling
---------------------------------------------------------
The Positive Rating Outlook for Portland General Electric Company
is unaffected by a Dec. 29, 2003 Securities and Exchange
Commission ruling that prevents the company from accessing its
$150 million secured revolving credit facility, according to Fitch
Ratings.

The ruling found that the utility's corporate parent, Enron Corp.,
is not exempt under section 3(a) (1), 3(a) (3) and 3(a)(5) of the
Public Utility Holding Company Act of 1935. The revolving credit
facility, which expires May 28, 2004, contains representations and
warranties to its bank group which relate to the PUHCA status of
PGE's parent company and without amending certain aspects of the
bank agreement, PGE will be unable to draw on the facility while
the PUHCA status of Enron is clarified.

Fitch notes that PGE currently has adequate cash reserves
available to meet its near-term liquidity needs as it works to
resolve the regulatory hurdles currently blocking its access to
short-term capital. The only scheduled maturity in 2004 is $45
million of first mortgage debt due in mid-July.

Fitch rates PGE as follows:

     --Senior secured debt 'BBB-';
     --Senior unsecured debt 'BB';
     --Preferred securities 'B+'.

On Dec. 31, 2003, ENE filed a request with the SEC for an
exemption under the PUHCA section 3(a) (4) on the basis that
Enron's ownership interest in Portland General is temporary. If
the SEC rejects ENE's application, then an amended bank agreement
would be required and SEC approval of PGE's short-term borrowing
plans is likely to be required before PGE would be able to access
short-term capital markets. At this juncture, it is unclear how
long it will take for the SEC to rule on ENE's Dec. 31, 2003
request for PUHCA exemption. Fitch understands from management
that existing drawings under the $150 million credit facility are
de minimus in the context of the company's current liquidity
position.


RAYOVAC: Initiates Remington Integration & Global Reorganization
----------------------------------------------------------------
Rayovac Corporation (NYSE:  ROV) announced details of its plan to
integrate Remington Products, LLC which it acquired in September
2003.  

The plan, which entails the closing of several Remington
facilities and the integration of all functional departments, will
be implemented between March and December of this year.  

Remington's worldwide operations will be absorbed into Rayovac's
existing North American and European business units, leveraging
the existing global organization and infrastructure.  The
integration will take place in a series of phases outlined below.

"We are applying the same proven techniques and principles that we
used in our very successful VARTA integration to that of
Remington.  By combining the many strengths of our two companies,
we are creating a new world-class organization positioned to
successfully compete in the global products marketplace and take
advantage of a wide-range of growth opportunities," said Rayovac
Chairman and CEO David Jones.

Rayovac and Remington sales management, field sales operations and
marketing will be merged into a single North American sales and
marketing organization combining the expertise and talent of both
organizations.  The new structure will be launched in mid-February
immediately following Rayovac's global sales meeting.

Remington's finance, information systems, customer service and
other administrative functions will be transferred to the existing
counterpart organizations at Rayovac's North American headquarters
located in Madison, WI. The transition is scheduled for the end of
March concurrent with the migration of all Remington business
transactions into Rayovac's SAP system.

The Rayovac and Remington research and product development
functions will be merged into a single organization based at
Rayovac's corporate research facility in Madison, WI.  In
addition, Rayovac will create a new global product innovation
group within the R&D function, charged with incubating and
developing product innovations across all of the Company's product
categories. This group will utilize dedicated market research
resources as well as the latest computerized product design
technologies to continue the flow of new products to market.

Beginning this spring, all Remington's distribution facilities in
North America will be integrated into Rayovac's distribution
facilities and infrastructure.  Packaging and distribution
activities at Remington's third-party-operated facility in
Atlanta, GA will be transitioned to Rayovac's facilities in Dixon,
IL and LaVergne, TN.  In Canada, the Remington distribution center
will be closed and all activity transferred to the Rayovac
facility in Mississauga, Ontario Canada.

Most Remington manufacturing activities conducted at the facility
will be transferred to Rayovac's manufacturing plant in Portage,
WI.  Operations in Bridgeport, CT will be phased out beginning
this fall, with the plant closing by calendar year-end.

As a result of these actions, approximately 96 hourly
manufacturing and 121 administrative employees will be laid off.  
Rayovac expects to provide severance packages to all employees not
offered continuing employment, as well as outplacement services.  
Layoffs will begin at the end of March.

"Decisions that affect people's lives are always difficult," Jones
said. "In fairness to our employees, whose contributions we
appreciate, we are making this announcement as early as possible.  
We intend to provide assistance to out-placed employees to help
make the transition to new employment," Jones said.

Lester Lee, formerly President, Remington North America has been
appointed President of Rayovac's combined North American business
unit headquartered in Madison, WI.  Approximately 100 new
professional and administrative positions will be created in
Madison to be filled either by transfers of Remington employees or
new hires.  Approximately 30 new manufacturing positions will be
added to the Portage, WI manufacturing facility.

Planning for the integration of Rayovac and Remington
international operations is continuing and is expected to be
complete by the end of the first quarter.  Details will be
provided at a later date.  Also, the 65 remaining Remington U.S.
Service Centers will be closed by the end of February, completing
an initiative begun by Remington several years ago.  A total of
311 full-time, part-time and seasonal employees will be laid off.

In conjunction with these initiatives and to support its global
expansion and diversification strategy, Rayovac will relocate its
corporate headquarters to Atlanta, GA in the spring of 2004.  
Executive management, corporate finance, and selected other
corporate administrative functions will be relocated.  Twenty-five
positions will move to Atlanta, GA.  The growing size and maturity
of the regional business unit structure as well as the desire to
headquarter in a more central geographic location closer to the
Company's key global customers and regional headquarter locations
were key drivers behind this decision.

"We intend to continue to grow our business and leverage our
global presence both by expanding market share of our family of
products and by adding more leading brands to our fine stable of
world-class offerings," Jones continued.  "This move to Atlanta
improves our access to all global customers and moves us closer to
our global markets."

Rayovac currently expects annualized savings from the integration
initiatives to total approximately $30-35 million and to require
one-time cash payments, primarily in 2004, of a comparable amount.  
Included in these amounts are $8-10 million of projected Rayovac
restructuring and related charges that will impact reported
earnings in 2004.

Rayovac Corporation (S&P, B+ Corporate Credit Rating, Stable
Outlook) is a global consumer products company with a diverse
portfolio of world-class brands, including Rayovac, VARTA and
Remington. The Company holds many leading market positions
including: the world's leader in hearing aid batteries; the top
selling rechargeable battery brand in North America and Europe;
and the number one selling brand of men's and women's foil
electric razors in North America. Rayovac markets its products in
more than 100 countries and trades on the New York Stock Exchange
under the ROV symbol.


REDBACK NETWORKS: Hires Morgan Lewis as Bankruptcy Co-Counsel
-------------------------------------------------------------
Redback Networks Inc., asks for permission from the U.S.
Bankruptcy Court to engage the services of Morgan, Lewis & Bockius
LLP as Bankruptcy Co-Counsel in its chapter 11 case to perform the
necessary extensive legal services.

G. Larry Engel, Esq., advised the Debtor on its restructuring
proposals while at his previous law firm of Brobeck, Phleger &
Harrison LLP.  The Debtor wants to continue drawing on Mr. Engel's
expertise now that he's connected with Morgan Lewis.

As counsel, Morgan Lewis will:

     a. provide legal advice with respect to its powers and
        duties as debtor-in-possession in the continued
        operation of its business and management of its
        property;

     b. pursue confirmation of a plan of reorganization and
        approval of the disclosure statement;

     c. prepare, or assist in the preparation, of necessary
        applications, motions, answers, orders, reports and
        other legal papers;
     
     d. appear in Court and to protect the interests of the
        Debtor before the Court; and

     e. perform all other legal services for the Debtor which
        may be necessary and proper in these proceedings.

The principal attorneys and legal assistants presently designated
to represent the Debtor and their hourly rates are:

     G. Larry Engel             partner      $560 per hour
     Jonathan N. P. Gilliland   Of Counsel   $400 per hour
     Joel S. Solomon            Associate    $325 per hour
     James Hoover               Associate    $250 per hour

Headquartered in San Jose, California, Redback Networks, Inc. is a
leading provider of advanced telecommunications networking
equipment. The Company filed for chapter 11 protection on
November 3, 2003 (Bankr. Del. Case No. 03-13359). Bruce Grohsgal,
Esq., Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young,
Jones & Weintraub P.C., and G. Larry Engel, Esq., Jonathan N.P.
Gilliland, Esq., at Morgan Lewis & Bockius, LLP represent the
Debtor in its restructuring efforts.  When the Company filed for
protection from its creditors, it listed $591,675,000 in total
assets and $652,869,000 in total debts.


RENT WAY: Hires Ernst & Young to Replace PricewaterhouseCoopers
---------------------------------------------------------------
Effective December 22, 2003, Rent-Way, Inc. engaged the accounting
firm of Ernst & Young LLP as its new independent public
accountants.

On December 22, 2003, the Company dismissed PricewaterhouseCoopers
LLP. The decision to change the Company's accounting firm was
approved by the Audit Committee of the Company's Board of
Directors.

Concerning the two fiscal years ended September 30, 2003 and 2002
and the subsequent interim period from October 1, 2003 to
December 22, 2003, PricewaterhouseCoopers issued a report dated
December 28, 2001 to the Company's Audit Committee summarizing
"reportable conditions" and "material weaknesses" as defined by
the AICPA in the Company's internal controls that were initially
observed during PricewaterhouseCoopers' audit of the Company's
financial statements for the fiscal year ended September 30, 2000.
These conditions and weaknesses, which were discussed by
PricewaterhouseCoopers with the Company's Audit Committee,
concerned (1) the Company's need to conduct a risk assessment to
be used in implementing a comprehensive system of effective
internal control and (2) the Company's inability to reconcile its
general ledger inventory amounts with the inventory amounts as
reported by its point-of-sale inventory accounting system.
PricewaterhouseCoopers issued a report dated December 27, 2002 to
the Company's Audit Committee stating (1) that the reportable
conditions and material weaknesses relating to the Company's need
to conduct a risk assessment and implement an effective system of
internal control had been resolved and (2) the reconciliation
between the general ledger and point-of-sale system continued as a
reportable condition. This reportable condition was discussed by
PricewaterhouseCoopers with the Company's Audit Committee. This
reportable condition was subsequently resolved by the Company
during the fiscal year ended September 30, 2003. The Company has
authorized PricewaterhouseCoopers to respond fully to the
inquiries of Ernst & Young concerning the subject matter of the
reportable events described above.

Rent-Way (S&P, B+ Corporate Credit Rating, Stable) is one of the
nation's largest operators of rental-purchase stores.  Rent-Way
rents quality name brand merchandise such as home entertainment
equipment, computers, furniture and appliances from 753 stores in
33 states.


ROYAL WORLD: Section 341(a) Meeting Will Convene on January 29
--------------------------------------------------------------
The United States Trustee will convene a meeting of Royal World
Cruises Inc.'s creditors on January 29, 2004, 2:00 p.m., at US
Trustee Hearing Room, 1132 Bishop Street, Suite 606, Honolulu,
Hawaii 96813.  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.

Headquartered in Monrovia, Liberia, Royal World Cruises Inc., is
in the business of state-of-the-art cruise ships, filed for
chapter 11 protection on December 16, 2003 (Bankr. Hawaii Case No.
03-03643).  Jerrold K. Guben, Esq., at Reinwald O'Connor &
Playdon, represents the Debtors in their restructuring efforts.  
When the Company filed for protection from its creditors, it
listed both estimated debts and assets of over $100 million.


SALOMON BROTHERS: Fitch Junks Class E-GF and F-GF Note Ratings
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on the class
B commercial mortgage pass-through certificates of Salomon
Brothers Mortgage Securities VII's series 2001-CDC. Concurrently,
the ratings on classes D, E-GF, and F-GF are lowered, and the
ratings on classes E-GF and F-GF are also removed from CreditWatch
with negative implications. At the same time, ratings are affirmed
on seven other classes from the same transaction.
     
The raised ratings are due to the increased credit support
realized as a result of the paydown in the mortgage pool balance.
This transaction initially consisted of 17 LIBOR-based adjustable
loans. Twelve loans, totaling $585.5 million, have paid off. As a
result of these payoffs and amortization on three of the five
remaining loans, the in-trust mortgage pool balance has been
reduced by 79%.
     
The lowered ratings on classes E-GF and F-GF reflect the high risk
of loss to these classes upon completion of the liquidation of the
GF Hotel portfolio. Standard & Poor's expectation of losses on
this loan is based on conversations with Midland Loan Services
Inc., which is the servicer and special servicer on this
transaction.

The other four remaining loans in this transaction consist of a
$63.3 million senior interest in a $82.8 million whole loan, known
as the Divco-SVP loan, secured by seven flex/office buildings in
California; a $29.8 million senior interest in a $38.8 million
whole loan, known as the Meadows Business Park loan, secured by a
856,630-sq.-ft. office complex in Baltimore, Md.; a $18.8 million
senior interest in a $29.0 million whole loan secured by 74 New
Montgomery, a 119,481-sq.-ft. office building in downtown San
Francisco; and a $18.9 million senior interest in a $26.3 million
whole loan secured by Treasures on the Bay, a 517-unit multifamily
rental property in North Bay Village, Fla.
     
The operating performance of the collateral for these four loans
has been mixed. Net cash flow for the year ended Dec. 31, 2002 for
the Divco-SVP loan portfolio, for Meadows Business Park and 74 New
Montgomery, has increased by 3%, 5%, and 21%, respectively, since
issuance. NCF for the Treasures on the Bay has declined by 12%
since issuance. The Divco-SVP loan matured in December 2003, and
an extension is currently being negotiated. The Meadows Business
Park loan, which matures in April 2004, and the Treasures on the
Bay loan, which matures in February 2004, are expected to pay off
at maturity. An extension is presently being negotiated for the 74
New Montgomery loan, which matures in February 2004.
   
                         RATING RAISED
   
        Salomon Brothers Mortgage Securities VII 2001-CDC
               Commercial mortgage pass-thru certs
   
                           Rating
               Class   To           From
               B       AAA          AA
   
                       RATING LOWERED
   
        Salomon Brothers Mortgage Securities VII 2001-CDC
               Commercial mortgage pass-thru certs
   
                           Rating
               Class   To           From
               D       A-           A
   
      RATINGS LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE
   
        Salomon Brothers Mortgage Securities VII 2001-CDC
               Commercial mortgage pass-thru certs
   
                           Rating
               Class   To           From
               E-GF    CCC          BB+/Watch Neg
               F-GF    CCC-         BB-/Watch Neg
   
                       RATINGS AFFIRMED
   
        Salomon Brothers Mortgage Securities VII 2001-CDC
               Commercial mortgage pass-thru certs
   
                    Class     Rating
                    A         AAA
                    C         A
                    E-DS      BBB+
                    F-DS      BBB
                    E-NM      BBB
                    F-NM      BBB-
                    X-3B-DS   AAA


SBA COMMS: Obtains New $350MM Senior Secured Credit Facility
------------------------------------------------------------
SBA Communications Corporation announced that its wholly owned
subsidiary, SBA Senior Finance, Inc., is launching a new $350
million senior secured credit facility, consisting of a $75
million revolving credit facility maturing in July of 2008 and a
$275 million term loan maturing in October of 2008.

The credit facilities will be guaranteed by all subsidiaries of
SBASF, and will be secured by a pledge of all the assets of SBA
and its subsidiaries. SBA has received commitments from Lehman
Commercial Paper, Inc. and Deutsche Bank Trust Company Americas
for a majority of the $75 million revolving credit facility.

Borrowings under the new credit facility will be used to repay
borrowings under SBA's existing $195 million senior secured credit
facility and for general corporate purposes.  The Company intends
to use a portion of the proceeds to call the remaining $65.7
million of its 12% Senior Discount Notes on March 1, 2004.

SBA (S&P, CCC Corporate Credit Rating, Developing Outlook) is a
leading independent owner and operator of wireless communications
infrastructure in the United States.  SBA generates revenue from
two primary businesses -- site leasing and site development
services.  The primary focus of the company is the leasing of
antenna space on its multi-tenant towers to a variety of wireless
service providers under long-term lease contracts.  Since it was
founded in 1989, SBA has participated in the development of over
20,000 antenna sites in the United States.


SCARBOROUGH-ST. JAMES: First Creditors' Meeting Set for Tuesday
---------------------------------------------------------------
The United States Trustee will convene a meeting of Scarborough-
St. James' creditors on January 20, 2004, at 2:30 p.m., at the
Office of the United States Trustee, 80 Broad Street, Second
Floor, New York, New York 10004-1408.  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.

Headquartered in New York, New York, Scarborough-St James
Corporation filed for chapter 11 protection on December 17, 2003
(Bankr. S.D.N.Y. Case No. 03-17966).  Michael T. Conway, Esq., at
Lazare Potter Giacovas & Kranjac, LLP, represents the Debtors in
their restructuring efforts. When the Company filed for protection
from their creditors, they listed both estimated debts and assets
of more than $10 million.


SK GLOBAL: Japanese Customers Acquire SK Shares for $24 Million
---------------------------------------------------------------
Itochu Corp. and Taiyo Oil Company purchased a combined 0.74%
stake in SK Corp. for $24,400,000, In-soo Nam of Bloomberg News
reports.  The two Japanese companies are customers of SK Corp.

Itochu, Japan's third-largest trading company, bought 0.5% of SK
Corp. outstanding shares.  Itochu reportedly has no plans of
buying more SK Corp. stocks. (SK Global Bankruptcy News, Issue No.
10; Bankruptcy Creditors' Service, Inc., 215/945-7000)


SOLUTIA INC: Proposes Uniform Interim Compensation Procedures
-------------------------------------------------------------
Solutia, Inc., and its debtor-affiliates ask the Court to
establish procedures for the compensation and reimbursement of all
Chapter 11 professionals on a monthly basis.

Pursuant to Section 331 of the Bankruptcy Code, all professionals
are entitled to submit applications for interim compensation and
reimbursement of expenses every 120 days, or more often if the
Court permits.

The Debtors propose that:

   (a) On or before the 20th day of each month following the
       month for which compensation is sought, each Professional
       seeking compensation, other than an Ordinary Course
       Professional, will serve a monthly statement by hand or
       overnight delivery on:

       (1) the Debtors

           Solutia Inc.
           575 Maryville Centre Drive,
           St. Louis, Missouri 63141
           Attn: Jeffry N. Quinn, Esq.;

       (2) the Debtors' counsel

           Gibson, Dunn & Crutcher LLP
           200 Park Avenue,
           New York, New York 10166
           Attn: M. Natasha Labovitz, Esq.;

       (3) the United States Trustee for the Southern District of
           New York

           33 Whitehall Street,
           21st Floor,
           New York, New York 10004
           Attn: Greg M. Zipes, Esq.;

       (4) the counsel for the agents for the Debtors'
           postpetition lenders

           Schulte Roth & Zabel LLP
           919 Third Avenue,
           New York, New York 10022
           Attn: Frederic L. Ragucci, Esq.; and

       (5) the counsel for any statutory committee of unsecured
           creditors;

   (b) The monthly statement need not be filed with the Court and
       a courtesy copy need not be delivered to the presiding
       judge's chambers since the request is not intended to
       alter the fee application requirements outlined in
       Sections 330 and 331 and since the Professionals are still
       required to serve and file interim and final applications
       for approval of fees and expenses in accordance with the
       relevant provisions of the Bankruptcy Code, the Federal
       Rules of Bankruptcy Procedure and the Local Bankruptcy
       Rules for the Southern District of New York;

   (c) Each monthly fee statement must contain the list and
       titles of individuals who provided services during the
       statement period, their billing rates, the aggregate hours
       spent by each individual, a reasonably detailed breakdown
       of the disbursements incurred and contemporaneously
       maintained time entries for each individual in increments
       of tenths of an hour, unless otherwise ordered by the
       Court;

   (d) Each party-in-interest receiving a statement will have at
       least 15 days after service to review the statement.
       In the event that a party has an objection to the
       compensation or reimbursement sought in a particular
       statement, that party will, by no later than the 35th day
       following the month for which compensation is sought,
       serve on the Professional whose statement is objected
       to, and the other persons designated to receive
       statements, a written "Notice of Objection to Fee
       Statement" setting forth the nature of the objection and
       the amount of fees or expenses at issue;

   (e) At the expiration of the 35-day period, the Debtors will
       promptly pay 80% of the fees and 100% of the expenses
       identified in each monthly statement to which no objection
       has been served;

   (f) If the Debtors receive an objection to a particular fee
       statement, they will withhold payment of that portion of
       the fee statement to which the objection is directed and
       promptly pay the remainder of the fees and disbursements
       not subject to objection, in the percentages set forth;

   (g) If the parties to an objection are able to resolve their
       disputes after service of a Notice of Objection to the Fee
       Statement, the Professional, whose statement was objected
       to, will serve on all the Notice Parties, a statement
       indicating that the objection is withdrawn and describe
       in detail the terms of the resolution.  Then, the Debtors
       will promptly pay that portion of the fee statement which
       is no longer subject to an objection;

   (h) All objections that are not resolved by the parties will
       be preserved and presented to the Court at the next
       interim or final fee application hearing;

   (i) Serving an objection will not prejudice the objecting
       party's right to object to any fee application made to the
       Court in accordance with the Bankruptcy Code on any ground
       whether raised in the objection or not.  Furthermore, the
       decision by any party not to object to a fee statement
       will not be a waiver of any kind or prejudice that party's
       right to object to any fee application subsequently made
       to the Court in accordance with the Bankruptcy Code;

   (j) Every 120 days, but not more than every 150 days, each
       of the Professionals will serve and file with the Court an
       application for interim or final Court approval and
       allowance, pursuant to Sections 330 and 331, of the
       compensation and reimbursement of expenses requested;

   (k) Any Professional who fails to file an application seeking
       approval of compensation and expenses previously paid
       under these procedures when due will be ineligible to
       receive further monthly payments of fees or expenses and
       may be required to disgorge any fees paid since employment
       or the last fee application, whichever is later;

   (l) The pendency of an application or a Court order that
       payment of compensation or reimbursement of expenses was
       improper as to a particular statement will not disqualify
       a Professional from the future payment of compensation or
       reimbursement of expenses, unless otherwise ordered by the
       Court;

   (m) Neither the payment of, nor the failure to pay, in whole
       or in part, monthly compensation and reimbursement will
       have any effect on the Court's interim or final allowance
       of compensation and reimbursement of expenses of any
       Professional; and

   (n) The counsel for any official committee may collect and
       submit statements of expenses, with supporting vouchers,
       from the committee members, provided, however, that the
       committee counsel ensures that the reimbursement requests
       comply with the Court's Administrative Orders dated
       June 24, 1991 and April 21, 1995.

The Debtors believe that the Compensation Procedures will allow
them to implement efficient cash management procedures relating
to the payment of professional fees and expenses and will allow
all parties to closely monitor the costs of administering their
Chapter 11 cases.  The Debtors represent that they are
administratively solvent.  They have sufficient availability of
funds to pay the professional fees and expenses by virtue of cash
reserves, expected cash flows from ongoing business operations
and anticipated access to debtor-in-possession financing. (Solutia
Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


STEAKHOUSE PARTNERS: Emerges from Chapter 11 Bankruptcy Process
---------------------------------------------------------------
On December 19, 2003 the United States Bankruptcy Court for the
Central District of California - Riverside Division entered an
order confirming the Joint Plan of Reorganization proposed by
Steakhouse Partners, Inc.

Under the terms of that Order the Plan became effective
December 31, 2003 and the debtor-in-possession financing facility,
approved by the Court on August 13, 2003, will convert into 90% of
the company's common stock. The balance of the common stock will
be distributed to the Unsecured Creditors as partial payment in
accordance with the Plan.

Steakhouse Partners, Inc., through its wholly owned subsidiary
Paragon Steakhouse Restaurants, owns and operates 65 steakhouses
in 11 states.  It is considered the leader in the mid to upper
($25 to $35 per plate per customer) priced steakhouse segment.

Steakhouse Partners filed for Chapter 11 protection on
February 15, 2002, in the U.S. Bankruptcy Court for the Central
District of California, Riverside (Bankr. Case No. 02-12648).


STERLING FINANCIAL: Reaches Agreement to Purchase StoudtAdvisors
----------------------------------------------------------------
Sterling Financial Corporation (Nasdaq: SLFI) entered into a
definitive agreement to purchase StoudtAdvisors, a Lancaster-based
employee benefits consulting and brokerage firm.  Sterling
Financial also announced that StoudtAdvisors will operate as a
wholly-owned subsidiary of the company.

Incorporated in 1989, StoudtAdvisors provides benefit products and
benefit consulting services to medium- and large-sized businesses
in the Central Pennsylvania region.  StoudtAdvisors consists of
three divisions, StoudtAdvisors (employee benefits insurance
consulting and brokerage services), CapRisk (a company providing
financial protection nationally to employers who self-fund their
medical, dental and prescription plans), and the Lancaster Chamber
Health Plan (a joint partnership with the Lancaster Chamber
of Commerce which includes over 1,200 employer groups in Lancaster
County).

The purchase of StoudtAdvisors, according to J. Roger Moyer, Jr.,
President and Chief Executive Officer of Sterling Financial, was a
natural fit with the goals of the organization.

"Offering additional employee benefits and related products falls
right in line with our vision of building a comprehensive
financial services organization," said Moyer.  "With the service
and expertise that StoudtAdvisors brings to the Sterling Financial
family, we are enhancing our ability to deliver benefits solutions
to our individual and business customers."

Sterling Financial expects the transaction to be completed early
in the second quarter of 2004 and to be accretive in the first
full year of operations.

The strength of StoudtAdvisors, along with their reputation within
the industry were key factors in Sterling Financial's decision.

"One of the impressive aspects about StoudtAdvisors is their great
core business," said Moyer.  "They have developed an outstanding
reputation, a strong track record, and have a successful history
of being innovators when it comes to creating and designing
benefit plans.  Finding a proactive partner was very important to
us."

According to David Stoudt, President of StoudtAdvisors, joining
Sterling Financial allows StoudtAdvisors to more effectively
deliver what their clients want.

"What excites us about the affiliation with Sterling Financial is
that it is going to enable us to better serve our clients in the
next chapter of employee benefits," said Stoudt.  "We believe our
customers are crying out for a trusted adviser who can handle all
of their needs or who can provide the resources to meet their
needs.  In looking at our clients, we discovered the commercial
banking relationship is the key relationship for the businesses we
serve."

Sterling Financial Corporation is planning to extend the reach of
StoudtAdvisors beyond the Central Pennsylvania region.

"Right now, StoudtAdvisors is in the center of our market
geographically and they maintain a dominant market share position
in Lancaster County," said Moyer.  "We believe we can take that
platform and expand it to our other markets because of our strong
relationship with, and commitment to, business owners."

"The Sterling footprint is much bigger than our own," said Stoudt.  
"The growth potential for the services we provide is significant
because of the presence and quality reputation that already exists
in those markets.  We can bring employee benefits solutions to
those customers who are already relying on Sterling to provide so
many of their other financial solutions."

Kenneth Stoudt, founder and Chief Executive Officer of
StoudtAdvisors, and David Stoudt will play key roles in Sterling
Financial's insurance and employee benefits solutions segment.

"Ken, Dave and their entire team bring a wealth of experience in
providing insurance solutions to their clients," said Moyer.  
"Both Ken and Dave will be actively involved in the direction and
management of StoudtAdvisors as well as in the overall insurance
strategy for Sterling Financial."

M&A Advisory Group, LLC acted as financial adviser to Sterling
Financial and Shumaker Williams, P.C. acted as its legal counsel.  
WFG Capital Advisors, LP acted as financial adviser to
StoudtAdvisors, and Barley, Snyder, Senft and Cohen, LLC acted as
its legal counsel.

Sterling Financial Corporation is a family of financial services
organizations that operates 55 banking locations in south central
Pennsylvania and northern Maryland, through its subsidiary banks,
Bank of Lancaster County, N.A., Bank of Hanover and Trust Company,
First National Bank of North East, Bank of Lebanon County and
PennSterling Bank.  As of September 30, 2003, total assets of
Sterling Financial Corporation were over $2.2 billion.  In
addition to its banking affiliates, Sterling's affiliates include
Town and Country Leasing, LLC, Lancaster Insurance Group, LLC,
Equipment Finance LLC, a specialty commercial finance company,
Sterling Financial Settlement Services, Sterling Financial Trust
Company and Church Capital Management (a Registered Investment
Advisor) with combined assets under management of $1.7 billion,
and Bainbridge Securities, a securities broker/dealer.

                         *     *     *

As previously reported, Fitch Ratings affirmed its ratings of
Sterling Financial Corporation following the company's
announcement that it has entered into a definitive agreement to
acquire Klamath First Bancorp, Inc.  KFBI, with approximately $1.5
billion in assets, is the holding company for Klamath First
Federal Savings and Loan Association, a savings and loan operating
branches in Oregon and Washington.

                         Ratings Affirmed:

     Sterling Financial Corporation

         -- Long-term Issuer 'BB';
         -- Short-term Issuer 'B';
         -- Individual Rating 'C';
         -- Support '5';
         -- Rating Outlook Stable.


SUMMITVILLE TILES: UST Appoints Official Creditors' Committee
-------------------------------------------------------------
The United States Trustee for Region 9 appointed 5 claimants to an
Official Committee of Unsecured Creditors in Summitville Tiles,
Inc.'s Chapter 11 cases:

       1. Interstate Gas Supply, Inc.
          c/o Vincent A. Parisi
          5020 Bradenlon Avenue
          Dublin, Ohio 43017
          Tel: (614) 734-2649 Phone
          Fax: (614) 923-1010

       2. Sebring Container Corp.
          c/o William M. McDevitt
          964 Benton Road
          Salem, Ohio 44460
          Tel: (330) 332-1533
          Fax: (330) 332-2205

       3. United States Ceramic Tile Co.
          c/o Melissa Irwin
          4244 Mt. Pleasant St. NW #100
          N. Canton, Ohio 44720
          Tel: (330) 649-5000
          Fax: (330) 649-5094

       4. Palmer Holland, Inc.
          c/o Bryn Irvine
          25000 Country Club Blvd.
          Suite 400
          North Olmsted, Ohio 44070-5331
          Tel: (440) 686-2192
          Fax; (440) 686-2180

       5. Fusion Ceramics, Inc.
          c/o Richard C. Hannon, Jr.
          160 Scio Road SE
          P.O. Box 127
          Carrollton, Ohio 44615
          Tel: (330) 627-2191
          Fax: (330) 627-2082

Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.

Headquartered in Summitville, Ohio, Summitville Tiles, Inc.,
manufactures tile and installation products including a complete
line of grouts, mortars, epoxies, furan, latex, water proofing and
tile care products. The Company filed for chapter 111 protection
on December 12, 2003 (Bankr. N.D. Ohio Case No. 03-46341).  
Matthew A Salerno, Esq., and Shawn M Riley, Esq., at McDonald,
Hopkins, Burke & Haber Co LPA represent the Debtor in its
restructuring efforts. When the Company filed for protection from
its creditors, it listed both estimated debts and assets of more
than $10 million.


SUREBEAM: Titan Expects $10M Impairment Charges After Bankruptcy
----------------------------------------------------------------
The Titan Corporation (NYSE: TTN) announced that, in response to
the SureBeam Corporation's (OTC: SURE) January 12, 2004
announcement of its intention to file bankruptcy under Chapter 7
of the United States Bankruptcy Code, Titan expects to incur an
after-tax impairment charge of up to $10 million related to the
$25 million in senior secured notes owed to Titan by SureBeam, and
Titan guarantees of SureBeam facilities leases.

SureBeam was a former subsidiary of Titan.

The impairment charge will depend on the amount of proceeds
recovered by Titan from the liquidation of all of SureBeam assets
that are collateral for the sums owed by SureBeam to Titan under
the SureBeam senior credit facility, and Titan's ability to
mitigate its obligations under the facilities lease guarantees
through subleases and other means.

As previously announced, Titan and Lockheed Martin Corporation
entered into a definitive agreement for the acquisition by
Lockheed Martin of all of the outstanding stock of Titan. Titan
and Lockheed Martin continue to work toward closing that
transaction in the first quarter of 2004.

Headquartered in San Diego, The Titan Corporation is a leading
provider of comprehensive information and communications systems
solutions and services to the Department of Defense, intelligence
agencies, and other federal government customers. As a provider of
national security solutions, the company has approximately 12,000
employees and current annualized sales of approximately $1.9
billion.

As reported in Troubled Company Reporter's January 14, 2004
edition, SureBeam Corporation said it would file for bankruptcy
under Chapter 7 of the United States Bankruptcy Code.

SureBeam has been unable to reach a restructuring agreement with
its senior secured lender, and such lender has indicated an intent
to accelerate the maturity and to demand payment of SureBeam's
debt. In addition, SureBeam Corporation has been unable to raise
additional funds it needs to continue its operations.

The Board of SureBeam determined that it is in the best
interest of all of the Company's constituencies that protection of
the Bankruptcy Court is obtained under Chapter 7 of the United
States Bankruptcy Code. Under Chapter 7, a Trustee will be
appointed by the Court to liquidate the Company and its principal
operating subsidiary, SB OperatingCo., LLC.


TENNECO AUTOMOTIVE: Paul D. Novas Named VP of Finance for Europe
----------------------------------------------------------------
Tenneco Automotive (NYSE: TEN) named Paul D. Novas vice president
of finance and administration for the company's European
operations.  Novas will also continue in his current role as
corporate treasurer.  The appointment to this newly created
position is effective immediately.

In his new role, Novas will oversee all finance, tax and shared
service operations for Tenneco Automotive's European businesses,
which operate in Eastern and Western Europe and also include the
company's South Africa operations.  In 2002, Tenneco Automotive
Europe businesses accounted for 35 percent of the corporation's
worldwide revenues.

"I am very pleased to announce Paul's new appointment and look
forward to the broad range of experience and strong execution
capabilities that he will bring to our finance, tax and shared
service operations in Europe," said Mark P. Frissora, chairman and
CEO, Tenneco Automotive.  "It has become increasingly evident that
we should have a position of this nature in Europe given the
growing complexity of our businesses across the region and our
rapid expansion into Eastern Europe."

Mr. Novas was named vice president and corporate treasurer in
1999, responsible for the company's treasury, corporate finance,
insurance and investment functions worldwide.  As treasurer, he
has helped ensure Tenneco Automotive's continued liquidity and
financial flexibility since becoming a stand-alone entity in
November 1999.  His many accomplishments in his most recent
assignment include developing and implementing low-cost funding
structures for Tenneco Automotive and leading the negotiations for
the recently completed refinancing of the company's senior debt.

Mr. Novas joined Tenneco Inc. in 1996 as assistant treasurer,
responsible for corporate finance and North American treasury
activities.  He played an integral role in executing the financial
transactions leading to the separation of Tenneco's energy and
shipbuilding businesses in 1996 and the separation of the
packaging and automotive businesses in 1999.  Prior to joining
Tenneco Inc., Mr. Novas was with General Motors for 10 years,
working in the company's New York treasury office.

Paul Novas is on the company's senior management team and will
report to Hari Nair, executive vice president and managing
director, Europe and Ken Trammell, senior vice president and chief
financial officer.  He will relocate to the company's European
headquarters in Brussels, Belgium.

Mr. Novas, 45, holds a B.S. degree in mechanical engineering and a
B.A. degree in economics from Cornell University and a MBA degree
from the University of Chicago.

Tenneco Automotive (S&P, B Corporate Credit Rating, Stable
Outlook) is a $3.5 billion manufacturing company with
headquarters in Lake Forest, Illinois and approximately 19,600
employees worldwide.  Tenneco Automotive is one of the world's
largest producers and marketers of ride control and exhaust
systems and products, which are sold under the Monroe(R) and
Walker(R) global brand names.  Among its products are
Sensa-Trac(R) and Monroe Reflex(R) shocks and struts, Rancho(R)
shock absorbers, Walker(R) Quiet-Flow(R) mufflers and DynoMax(R)
performance exhaust products, and Monroe(R) Clevite(R) vibration
control components.


TESORO PETROLEUM: Fourth-Quarter Conference Call Set for Feb. 3
---------------------------------------------------------------
Tesoro Petroleum Corporation (NYSE:TSO) has scheduled its fourth
quarter 2003 earnings conference call for 2 p.m., CST, Tuesday,
February 3, 2003.

This call is being webcast by CCBN and interested parties may
listen to the live conference call over the Internet by logging on
to Tesoro's Internet site at http://www.tesoropetroleum.com/at  
the scheduled time. This presentation will be archived on Tesoro's
Internet site until its next earnings conference call is held.

The webcast is also being distributed over CCBN's Investor
Distribution Network to both institutional and individual
investors. Individual investors can listen to the call through
CCBN's individual investor center at
http://www.fulldisclosure.com/or by visiting any of the investor  
sites in CCBN's Individual Investor Network. Institutional
investors can access the call via CCBN's password-protected event
management site, StreetEvents at http://www.streetevents.com/  

Individuals wishing to listen to Tesoro's conference call from its
Internet site will need Windows Media Player, which can be
downloaded free of charge from http://www.tesoropetroleum.com/  
Please allow at least fifteen minutes to complete the download.

Tesoro Petroleum Corporation (Fitch, BB- Senior Unsecured and B
Senior Subordinated Ratings, Stable Outlook), a Fortune 500
Company, is an independent refiner and marketer of petroleum
products and provider of marine logistics services. Tesoro
operates six refineries in the western United States with a
combined capacity of nearly 560,000 barrels per day. Tesoro's
retail-marketing system includes approximately 575 branded retail
stations, of which over 200 are company operated under the
Tesoro(R)and Mirastar(R) brands.


THOMASTON MILLS: Court Nixes Ex-Employees' Severance Pay Claims
---------------------------------------------------------------
Chapter 11 Trustee Charles C. Crumley's filed an Eighth Omnibus
Objections to Allowance of Claims in the U.S. Bankruptcy Court for
the Middle District of Georgia, Macon Division, which oversees the
bankruptcy cases involving Thomaston Mills Inc.  The Trustee balks
at 38 claims arising under the Debtor's severance plan asserted by
former employees of Thomaston Mills Inc.

Judge Robert F. Hershner, Jr., held a hearing on the Trustee's
Omnibus Objections, and after having considered the Objections,
the responses and the replies from the opposing parties,
stipulation of facts as well as the arguments of counsel,
concludes that the Former Employees do not have a right to
severance pay.  Judge Hershner finds that the Debtor's Board of
Directors terminated the severance payment plan before the
Claimants employment terminated.  

Attorneys Timothy J. Tracey and Richard B. Herzog, Jr., in
Atlanta, Georgia, represent Trustee Charles C. Crumley.  Donald E.
Snow, Esq., in Thomaston, Georgia, represents the group of Former
Employees.

Background

Thomaston Mills Inc. was a textile manufacturer operating a number
of textile mills.  The Debtor established a severance plan for its
exempt salaried employees, effective November 1, 2000.  The
purpose of the severance plan was to provide severance benefits to
exempt salaried employees whose employment may be involuntarily
terminated due to permanent layoff, unsatisfactory job performance
or following a "change in control."

The Debtor was having financial problems when the severance plan
was established.  Respondents argue that Debtor established the
severance plan in order to retain its key employees.

The Debtor's financial problems continued.  And the Debtor's Board
of Directors voted on June 14, 2001, to terminate the severance
plan, effective that date.  The Debtor sent a notice on June 14,
2001, advising all of its employees that it was permanently
closing its textile mills.  The notice said that the severance
plan was terminated effective June 14, 2001.  And the notice
advised that most employees would be terminated on June 16, 2001.  
Respondents were terminated after June 14, 2001; although two of
the Respondents may have been terminated prior to June 14, 2001.   
The Board of Directors also terminated all retirement, dental
disability and life insurance plans.

The Debtor filed a petition under Chapter 11 of the Bankruptcy
Code on June 19, 2001 (Bankr. M.D. Ga. Case No. 01-52544), and
having liquidated most of its assets will not reorganize as a
going concern.  The Court entered an order on March 18, 2002,
approving appointment of Charles C. Crumley as Chapter 11 Trustee.

Respondents have each filed a proof of claim asserting a claim for
severance pay under the severance plan.  The Trustee has filed
Objections to the proofs of claim, contending that the claims are
for severance pay accruing after the severance plan was
terminated.  Therefore, the Trustee says Respondents' claims
should be disallowed.

The severance plan provides that Debtor may, prior to a change in
control, permanently suspend severance benefits or terminate the
severance plan.  The Trustee and Respondents disagree on whether
the vote by Debtor's Board of Directors to terminate the severance
plan was effective.  Trustee and Respondents have asked the Court
to decide this threshold legal issue before the factual merits of
each claim by  the 38  Respondents is presented.  

Judge Hershner Reviews Relevant Sections
Of The Severance Plan

Section 1.1)  Purpose.  Thomaston Mills Inc. has established the
Severance Plan for the Exempt Salaried Employees of Thomaston
Mills Inc.   The purpose of the Plan is to provide severance
benefits to exempt salaried employees of the Company whose
emplyment is involuntarily terminated by the Company due to a
Permanent Layoff, unsatisfactory job performance . or following a
Change in Control.

Section 1.2)  The effective date of the Plan is November 1, 2000.

Section 2.1)  Participation in the Plan is limited to those
employees whose employment is involuntarily terminated due to a
Permanent Layoff, unsatisfactory  job performance or following a
Change In Control. No severance benefits are contingent on an
employee's retirement.  Severance benefits are not to be viewed as
automatic and are not compensation for past services,  but instead
are intended only as prospective payments that will be offered in
exchange for a written release from the employee.

Section 3.5)  The Company may, prior to a Change in Control,
permanently suspend the benefits under severance packages in pay
status (1) in the event of the Company's insolvency, liquidation
or bankruptcy reorganization; or (2) in the event that the cost of
providing such benefits would lead to the Company's insolvency,
liquidation or bankruptcy reorganization.

Section 4.1)  "Change in Control" means the occurrence during the
term of any of the following events:  

The Company is merged, consolidated or reorganized into or with
another corporation or other legal person; ..
The Company sells or otherwise transfers all or substantially all
of its assets to another corporation or other legal person ..  The
remaining sections are not relevant to this proceeding.

Section 8.1)  Amendment and Termination.  The Company reserves the
right to amend the Plan from time to time or to terminate the Plan
at any time in its sole discretion.  Nothwithstanding the above,
during the one-year period following a Change in Control, no
amendment will be made to the Plan that would reduce or eliminate
benefits payable under the terms of the Plan immediately prior to
the date of the change in Control.  The Plan cannot be terminated
during the one-year period following a Change in Control.

Having reviewed the above relevant sections of the Severance Plan,
Judge Hershner observes in his Memorandum Opinion that the
severance plan provides that the Debtor's Board of Directors may,
prior to a change in control, permanently suspend severance
benefits or terminate the severance plan.  Debtor's Board of
Directors voted to terminate the severance plan on June 14, 2001.   
Respondents argue, however, that a change in control occurred
prior to June 14, 2001, because certain banks were telling
Debtor's Board of Directors "what to do."

But, says Judge Hershner, the severance plan in Section 4.1 states
exactly what a change in control means and there is no evidence
that any of these events occurred.  There is no evidence that
prior to June 14, 2001, Debtor was merged, consolidated or
reorganized into another organization.  There is no evidence that
Debtor sold or transferred all or substantially all of its assets.   
Judge Hershner says he can only conclude that no event occurred
which resulted in a change of control.  

Next, the Respondents argue that the last sentence in Section 8.1
of the separation plan is an "incorrect statement of the intent of
the parties."  The sentence says, "The [Severance] Plan cannot be
terminated during the one-year period following a Change in
Control."  Respondents argue that the sentence should say:  "The
[Severance] Plan cannot be terminated during the one-year period
prior to a Change in Control.

Judge Hershner, noting that the Respondents' argument raises the
issue of contract construction, points to the case, Boland v.
Georgia Eye Institute Inc., 235 Ga. App. 492; 509 S.E. 2d 342
(1998) as an authority in the area of contract construction:

"The cardinal rule of contract construction is to ascertain the
intention of the parties.  Contract construction is a three-step
process...First, if no ambiguity appears, the trial court  
enforces the contract according to its terms irrespective of all
technical or arbitrary rules of construction.  That is, where the
terms of a written contract are clear and unambiguous, the court
will look to the contract alone to find the intention of the
parties.  Secondly, if ambiguity does appear, the existence or
non-existence of an ambiguity is itself a question of law for the
court.  Finally, a jury question arises only when there appears to
be an ambiguity in the contract which cannot be negated by the
court's application of the statutory rules of construction...A
contract should be construed by examining the agreement in its
entirety, and not merely by examining isolated clauses and
provisions thereof."

Judge Hershner says he is persuaded that the sentence at issue is
clear and unambiguous.  The sentence is consistent with Section
1.1 of the Severance Plan, which provides, in part, that the
purpose of the severance plan is to provide severance benefits to
an employee who is involuntarily terminated following a change in
control.  See also Section 2.1, which provides that participation
in the severance plan is limited, in part, to employees whose
employment is terminated following a change in control.

The Respondents also argue that Debtor did not act is good faith
in terminating the severance plan on the eve of bankruptcy as the
business was going under.  Respondents argue that they stayed with
a struggling business in reliance upon the severance plan.  
Respondents rely upon the court ruling that holds:  "In Georgia,
every contract includes the implied duty of good faith."   Boland
v. Georgia Eye Institute Inc., 235 Ga. App.492; 509 S.E. 2d 342,
345 (1998).

Judge Hershner answers this argument, saying the severance plan
expressly states that Debtor may "at any time in its sole
discretion" terminate the severance plan prior to a change in
control.  Judge Hershner does not find a breach of the implied
duty of good faith because Debtor was simply exercising its rights
under the terms of the severance plan.

Finally, Respondents argue that their rights to severance pay
vested prior to termination of the severance plan.  Respondents
say they stayed with a struggling business in reliance upon the
severance plan, and the Debtor established the severance plan in
order to promote that reliance and thereby retain its key
employees during a period of financial problems.

The Trustee refutes the Respondents' argument, saying that under
Section 3.1.4 no rights vested under the severance plan until an
employee was terminated and signed a general release in favor of
Debtor.   Respondents have not signed general releases, argues the
Trustee.  And the Trustee argues further that under Section 2.1,
severance benefits are not compensation for past services, but are
prospective payments offered in exchange for a written general
release.  Judge Hershner agrees with the Trustee's reasoning.

Therefore, concludes Judge Hershner, for all the reasons presented  
in his Memorandum Opinion, Debtor's severance plan was terminated
on June 14, 2001, under the terms of that plan, and no severance
payments are due the Respondents.


TRANSWITCH CORP: Will Publish Fourth-Quarter Results on Tuesday
---------------------------------------------------------------
TranSwitch Corporation (NASDAQ: TXCC) will be releasing its
financial results for the fourth quarter, 2003 on January 20, 2004
at approximately 4:15 pm Eastern time. A conference call will be
conducted by Dr. Santanu Das, President and Chief Executive
Officer, and Mr. Peter Tallian, Chief Financial Officer, for
analysts and investors on that day beginning at 5:30 pm Eastern
time.

To listen to the live call, investors can dial (706) 679-0410 and
reference leader Peter Tallian. The call will be recorded and a
replay will be available two hours after the conclusion of the
live broadcast through January 30, 2004. To access the replay,
dial (706) 645-9291 and enter conference ID number: 4801244.
Investors can also access an audio webcast via
http://www.vcall.com/by clicking on the TranSwitch Corporation  
conference call link. This audio webcast will also be available on
a replay basis for 10 business days.

TranSwitch Corporation (S&P, B- Corporate Credit Rating,
Negative), headquartered in Shelton, Connecticut, is a leading
developer and global supplier of innovative high-speed VLSI
semiconductor solutions - Connectivity Engines(TM) - to original
equipment manufacturers who serve three end-markets: the Worldwide
Public Network Infrastructure, the Internet Infrastructure, and
corporate Wide Area Networks. Combining its in-depth understanding
of applicable global communication standards and its world-class
expertise in semiconductor design, TranSwitch Corporation
implements communications standards in VLSI solutions which
deliver high levels of performance. Committed to providing high-
quality products and service, TranSwitch is ISO 9001 - 2000
registered. Detailed information on TranSwitch products, news
announcements, seminars, service and support is available on
TranSwitch's home page at the World Wide Web site -
http://www.transwitch.com/


TROPICAL SPORTSWEAR: Amends Revolver to Cure Covenant Violations
----------------------------------------------------------------
Tropical Sportswear Int'l Corporation (Nasdaq:TSIC) announced its
fourth quarter and fiscal year-end results.

Net sales for the fourth quarter of fiscal 2003 were $78.2 million
as compared with $117.0 million in the same period last year. The
Company incurred a net loss for the fourth quarter of fiscal 2003
of $96.5 million, or $8.73 per diluted share as compared with net
income of $1.3 million or $0.12 per diluted share in the same
period last year. The Company incurred a gross margin loss for the
fourth quarter of fiscal 2003 of $11.9 million, or 15.1% of net
sales, as compared with gross margin of $31.4 million, or 26.9% of
net sales for the same period last year. Gross margins were
negatively impacted by significantly higher than normal levels of
closeout sales and higher levels of returns and sales allowances.
Additionally, as the market for excess inventory further
deteriorated during the quarter, the required reserve for
remaining excess inventory was increased significantly. Selling,
general and administrative expenses for the fourth quarter of
fiscal 2003 were $22.2 million as compared with $24.4 million for
the same period last year.

Results for the fourth quarter of fiscal 2003 were negatively
impacted by a number of items including the sale of higher than
normal amounts of excess inventory at reduced prices, significant
increases in reserves for excess inventory, higher than normal
levels of returns and sales allowances, charges related to the
impairment of goodwill, costs associated with disposing of the
Company's corporate aircraft, charges related to the reduction in
value of the Company's recently constructed administration
building, severance costs for terminated executive employees, and
costs related to the closure of the Duck Headr retail outlet
stores. Other charges for the fourth quarter of fiscal 2002
related to the consolidation and reorganization of the Company's
Savane division, internally referred to as "Project Synergy."

Net sales for fiscal 2003 were $386.7 million as compared with
$463.9 million for fiscal 2002. Gross margin for fiscal 2003 was
$41.0 million, or 10.6% of net sales, as compared with $128.4
million, or 27.7% of net sales for fiscal 2002. Selling, general
and administrative expenses for fiscal 2003 were $85.4 million, as
compared with $97.2 million for fiscal 2002. Charges incurred in
fiscal 2003 include the items noted above, and a non-cash
valuation allowance against the Company's U.S. net deferred tax
assets, offset in part by a gain on the sale of the Duck Headr
trademarks, and reductions in previous Project Synergy cost
estimates. As mentioned above, fiscal 2002 contained a charge
related to Project Synergy. The Company incurred a net loss of
$131.5 million, or $11.90 per diluted share in fiscal 2003, as
compared with net income of $2.3 million, or $0.26 per diluted
share in fiscal 2002.

Michael Kagan, CEO commented, "Fiscal 2003 has been a difficult
year. We believe we have made strides in our ongoing effort to
reduce inventories from a high of $98.7 million at the end of June
to $73.3 million at the end of September. This did not come
without cost as inventory was sold at heavily discounted prices.
We also made progress in reducing our selling, general and
administrative expenses by approximately $12 million in fiscal
2003."

Mr. Kagan continued, "We completed several transactions during
fiscal 2003. We sold the Duck Head(R) trademarks and closed the
Duck Head(R) retail outlet stores, and completed the transition of
the Victorinox(R) apparel division to Swiss Army Brands, Inc. We
terminated the leases on two corporate aircraft, and the lease on
the El Paso administration building. In addition, we decided not
to occupy the new administration building and it is being marketed
for sale."

On December 15, 2003, the Company paid its semi-annual interest
payment of $5.5 million, to the holders of its senior subordinated
notes. Subsequent to this payment, availability on the Company's
revolver fell below $20 million resulting in a violation of
certain financial covenants. On January 12, 2004, the Company
amended its revolver, reducing the amount of the Company's maximum
borrowing from $95 million to $70 million, and amending certain of
the financial covenants. The amended revolver also contains higher
rates of interest. While the Company believes that its operating
plans, if met, will be sufficient to assure compliance with the
terms of its amended revolver, there can be no assurances that the
Company will remain in compliance through fiscal 2004.

The Company's Web site is at http://www.tropicalsportswear.com/  

TSI is a designer, producer and marketer of high-quality branded
and retailer private branded apparel products that are sold to
major retailers in all levels and channels of distribution.
Primary product lines feature casual and dress-casual pants,
shorts, denim jeans, and woven and knit shirts for men, women,
boys and girls. Major owned brands include Savane(R), Farah(R),
Flyers(TM), The Original Khaki Co.(R), Bay to Bay(R), Two
Pepper(R), Royal Palm(R), Banana Joe(R), and Authentic Chino
Casuals(R). Licensed brands include Bill Blass(R) and Van
Heusen(R). Retailer national private brands that we produce
include Puritan(R), Member's Mark(R), Sonoma(R), Croft &
Barrow(R), St. John's Bay(R), Roundtree & Yorke(R), Geoffrey
Beene(R), Izod(R), and White Stag(R). TSI distinguishes itself by
providing major retailers with comprehensive brand management
programs and uses advanced technology to provide retailers with
customer, product and market analyses, apparel design, and
merchandising consulting and inventory forecasting with a focus on
return on investment.


TULLAS CDO: Fitch Downgrades Two Note Classes to Lower-B Levels
---------------------------------------------------------------
Fitch Ratings has downgraded the following classes of notes issued
by Tullas CDO Ltd.:

     --$298,039,071 class A notes to 'BB-' from 'BBB-';
     --$6,000,000 class B notes to 'B-' from 'BB-'.

The class A and B notes will remain on Rating Watch Negative due
to the continuing uncertainty of the timing and ultimate
resolution of current impaired assets and the risk of further
deterioration in the portfolio.

This rating action is a result of the portfolio's $17 million
exposure (4.25%) of Parmalat and lower than expected realized
recoveries on several impaired assets. Parmalat recently filed for
bankruptcy protection and recoveries on its bonds are expected to
range between 20%-30%.

Tullas CDO Ltd. is comprised of a static portfolio of assets held
physically, as well as a series of assets that are referenced
through a credit linked note. The transaction has experienced
impairment of assets held both physically and through its CLN,
which Fitch expects to incur losses. The timing of the losses on
these impaired assets and the ultimate recovery value of several
of these assets remains uncertain and may be below Fitch's assumed
recovery values.


UNIFI INC: Will Host Second-Quarter Conference Call on Wednesday
----------------------------------------------------------------
Unifi, Inc., (NYSE: UFI) will host a conference call at 4:30 p.m.
(EST) on Wednesday, January 21, 2004 to discuss the results of our
second fiscal quarter ended December 28, 2003.

Anyone interested in participating in this conference call can
access it by dialing (973) 409-9261 approximately 10 minutes prior
to the beginning of the presentation, which is expected to begin
promptly at 4:30 p.m. (EST). Following management's comments,
there will be an opportunity for questions from the financial
community.

For those interested but unable to participate, a replay of the
conference call in its entirety will be available at (973) 341-
3080 pin #4430810 approximately one hour after its conclusion.  
This replay line will be kept open for one week.

Unifi Inc. (NYSE: UFI) (S&P, B+ Corporate Credit and Senior
Unsecured Debt Ratings, Negative Outlook) is one of the world's
largest producers and processors of textured yarns.  The company's
primary business is the texturing, dyeing, twisting, covering, and
beaming of multi-filament polyester and nylon yarns.  Unifi's
textured yarns are found in home furnishings, apparel, and
industrial fabrics, automotive, upholstery, hosiery, and sewing
thread.  For more information about Unifi, visit
http://www.unifi-inc.com/


UNITED AIRLINES: Enters into $2BB JPMC-Citigroup Exit Financing
---------------------------------------------------------------
The United Airlines Debtors ask the Court to approve a
$2,000,000,000 exit financing facility to be underwritten by
JPMorganChase and Citicorp USA, and structured, arranged and
syndicated by JPMorgan Securities and Citigroup Global Markets
Inc.  The Exit Facility will enable the Debtors to emerge from
Chapter 11.  The Exit Facility will replace the Debtors' existing
DIP financing facility, allow the Debtors to fund their Plan of
Reorganization and provide a working line of credit so the Debtors
can seamlessly continue with their daily business operations after
emerging from Chapter 11.

James H.M. Sprayregen, Esq., at Kirkland & Ellis, tells Judge
Wedoff that the Debtors have executed a commitment letter with:

   (a) JPMC and Citicorp, who committed to provide one-half of
       the principal amount of a senior secured term loan for
       $2,000,000,000.  JPMC and Citicorp will serve as
       co-administrative agents and co-collateral agents for the
       Exit Facility; and

   (b) JPMorgan Securities and CGMI, who have agreed to jointly
       structure, arrange and syndicate Exit Facility.

The material terms of the Exit Facility are:

  The Loan:     A seven-year $2,000,000,000 term loan divided
                into two tranches.  Tranche A includes 80% of the
                original amount and Tranche B the remaining 20%.

  ATSB          Up to $1,600,000,000 will be guaranteed by the
  Guarantee:    Air Transportation Stabilization Board,
                allocated to Tranche A.

  Other         Up to $400,000,000 will be non-ATSB guaranteed,
  Amount:       allocated to Tranche B.

  Board         The ATSB will provide a Federal credit instrument
  Guarantee:    in the form of a comprehensive, irrevocable and
                unconditional guarantee, pledging the full faith
                and credit of the United States of America to pay
                100% of the outstanding principal in Tranche A,
                plus accrued and unpaid interest.  The ATSB
                Guarantee will not extend to the repayment of any
                penalties, fees, indemnified amounts, costs,
                expenses or other amounts payable under the Loan
                Agreement.

  Use of        The Exit Facility will be used to finance
  Proceeds:     working capital and other general corporate
                purposes of UAL Corporation and subsidiaries.

  Interest      If the entire Tranche A is sold to Citibank, for
  Rate:         funding by Govco Inc., it will bear interest at
                Govco's cost of funds in the U.S. commercial
                paper market plus 0.13%.

                If Tranche A is broken up, it will bear interest
                at an Adjusted LIBOR plus an applicable margin.

                Tranche B will bear interest at the Adjusted
                LIBOR plus an applicable margin.

                If the Debtors are in default, the outstanding
                principal amount will bear interest at 2% above
                the otherwise applicable rate.

  Collateral:   The Debtors will pledge all now-owned and after-
                acquired unencumbered real and personal property
                to the Collateral Agents for the benefit of the
                ATSB, the Administrative Agents, the Collateral
                Agents and the Lenders.

  Warrants:     UAL Corporation will issue stock purchase
                warrants to the ATSB and initial Tranche B
                Lenders.

Mr. Sprayregen assures the Court that the fees, expenses,
indemnifications and other obligations set forth in the
Commitment Letter and the Fee Letter are fair, reasonable and
typical for financings of this nature.

The Debtors will file the Fee Letter under seal.

"Due to the sensitive pricing and other proprietary information
contained in the Fee Letter, the parties have agreed to keep the
terms of the Fee Letter confidential," Mr. Sprayregen says.

The Debtors have shared the Fee Letter with counsel for the
Official Committee of Unsecured Creditors.  Disclosure of the Fee
Letter may permit others to use the confidential fee information
to the Debtors' detriment.  The Debtors have enough to worry
about right now and the disclosure of the confidential and
sensitive information would only harm these efforts. (United
Airlines Bankruptcy News, Issue No. 36; Bankruptcy Creditors'
Service, Inc., 215/945-7000)   


UNITED STEEL: US Trustee Appoints Official Creditors' Committee
---------------------------------------------------------------
The United States Trustee for Region 3 appointed 7 claimants to an
Official Committee of Unsecured Creditors in United Steel
Enterprises, Inc.'s Chapter 11 cases:

       1. Heidtman Steel Products, Inc.
          Sharon Zerman
          2401 Front Street
          Toledo, Ohio 43605
          Tel: 419-691-4646
          Fax: 419-698-1317

       2. Schaeffer Staffing Services
          Scott G. Schaeffer
          P.O. Box 125
          Douglassville, Pennsylvania 19518
          Tel: 610-689-3967
          Fax: 610-689-0262
          
       3. Hub Group
          Cheryl Gibson
          One Hovchild Plaza
          4000 Route 66, 4th Floor
          Tinton Falls, New Jersey 07753
          Tel: 732-922-7848
          Fax: 732-922-5745

       4. Primary Steel, Inc.
          Donna M. Bruneau
          760 Newfield Street
          Middletown, Connecticut 06457
          Tel: 860-343-5111
          Fax: 860-343-5101
          
       5. JM Steel Corp.
          Frank Calandra, Jr.
          258 Kappa Drive
          Pittsburgh, Pennsylvania 15238
          Tel: 412-963-9071 x 301
          Fax: 412-963-8010
          
       6. Rohm & Haas Powder Coatings
          Craig A. Moyer
          5 Commerce Drive
          Reading, PA 19612
          Tel: 610-775-6627
          Fax: 610-775-6691
          
       7. Olympic Steel, Inc.
          Ronald R. Gore
          5096 Richmond Road
          Cleveland, Ohio 44146
          Tel: 216-292-3800
          Fax: 216-682-4066
     
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.

Headquartered in East Stroudsburg, Pennsylvania, United Steel
Enterprises, Inc., makes racks for use in industrial warehouse
storage and interior retail display.  The Company filed for
chapter 11 protection on December 15, 2003 (Bankr. N.J. Case No.
03-50284).  Paul R. DeFilippo, Esq., at Wollmuth Maher & Deutsch
LLP represents the Debtor in its restructuring efforts. When the
Company filed for protection from its creditors, it listed both
estimated debts and assets of over $10 million.


VAIL RESORTS: Proposes $350MM Senior Subordinated Debt Offering
---------------------------------------------------------------
Vail Resorts, Inc. (NYSE: MTN) intends to offer, subject to market
and other conditions, $350,000,000 million in aggregate principal
amount of senior subordinated notes.  

The senior subordinated notes will be offered to qualified
institutional buyers pursuant to Rule 144A under the Securities
Act of 1933, as amended and to persons outside the United States
under Regulation S of the Securities Act.  The interest rate,
offering price, ultimate aggregate principal amount and other
terms of the notes are to be determined.  The Company plans to use
the proceeds of the offering to consummate the cash tender offer
and consent solicitation for any and all of its $200,000,000
outstanding principal amount of its 8.75% Senior Subordinated
Notes due 2009, CUSIP Number 91879QAC3 and $160,000,000
outstanding principal amount of its 8.75% Senior Subordinated
Notes due 2009, CUSIP Number 91879QAF6, which Offer commenced
Tuesday.

The securities will not be registered under the Securities Act or
any state securities laws and, unless so registered, may not be
offered or sold in the United States except pursuant to an
exemption from the registration requirements of the Securities Act
and applicable state laws.

Vail Resorts, Inc. is the leading mountain resort operator in the
United States.  The Company's subsidiaries operate the mountain
resorts of Vail, Beaver Creek, Breckenridge and Keystone in
Colorado, Heavenly in California and Nevada, and the Grand Teton
Lodge Company in Jackson Hole, Wyo.  The Company also operates its
subsidiary, RockResorts, a luxury resort hotel company with 10
distinctive properties across the United States.  Vail Resorts
Development Company is the real estate planning, development,
construction, retail leasing and management subsidiary of Vail
Resorts, Inc. The Vail Resorts company Web site is
http://www.vailresorts.com/and consumer Web site is
http://www.snow.com/

Vail Resorts, Inc. (S&P, BB- Corporate Credit Rating, Negative) is
a publicly held company traded on the New York Stock Exchange
(NYSE: MTN).


VAIL RESORTS: Commences Tender Offer for 8-3/4% Sr. Sub. Notes
--------------------------------------------------------------
Vail Resorts, Inc. (NYSE: MTN) commenced a cash tender offer and
consent solicitation for any and all of its $200,000,000
outstanding principal amount of its 8.75% Senior Subordinated
Notes due 2009, CUSIP Number 91879QAC3 and $160,000,000
outstanding principal amount of its 8.75% Senior Subordinated
Notes due 2009, CUSIP Number 91879QAF6.

The Offer is scheduled to expire at 12:00 midnight, New York City
time, on Tuesday, February 10, 2004, unless extended or earlier
terminated. The consent solicitation will expire at 5:00 p.m., New
York City time, on Tuesday, January 27, 2004, unless extended or
earlier terminated.  Holders tendering their Notes under each
indenture will be required to consent to certain proposed
amendments to each indenture governing their Notes, which will
eliminate substantially all of the restrictive covenants.  
Adoption of the Proposed Amendments requires the consent of
holders of at least a majority of the aggregate principal amount
of the outstanding Notes under each indenture. Holders may not
tender their Notes without delivering consents or deliver consents
without tendering their Notes.

Holders who validly tender their Notes on or prior to the Consent
Date will receive the total consideration of $1,065.06, consisting
of (i) the tender price of $1,035.06 and (ii) the consent payment
of $30.00, per $1,000 principal amount of Notes (if such notes are
accepted for purchase).  Holders who validly tender their Notes
after the Consent Date but on or prior to the Expiration Date will
receive the tender price of $1,035.06 per $1,000 principal amount
of Notes (if such notes are accepted for purchase).  In either
case, Holders who validly tender their Notes also will be paid
accrued and unpaid interest up to, but not including, the
applicable date of payment for the Notes (if such notes are
accepted for purchase).

The Offer is subject to the satisfaction of certain conditions,
including the Company's receipt of tenders of Notes representing a
majority of the aggregate principal amount of the Notes
outstanding under each indenture governing the Notes, consummation
of the required financing, consent from the lenders under the
Company's credit facility, as well as other customary conditions.  
The terms of the Offer are described in the Company's Offer to
Purchase and Consent Solicitation Statement dated January 13,
2004, copies of which may be obtained from Global Bondholder
Services.

The Company has engaged Banc of America Securities LLC and
Deutsche Bank Securities Inc. to act as dealer managers and
solicitation agents in connection with the Offer.  Questions
regarding the Offer may be directed to Banc of America Securities
LLC, High Yield Special Products, at 888-292-0070 (US toll-free)
and 212-847-5834 (collect) or Deutsche Bank Securities Inc.,
High Yield Capital Markets, at 212-250-5655 (collect).  Requests
for documentation may be directed to Global Bondholder Services,
the information agent for the Offer, at (866) 873-6300 (US toll-
free) and (212) 430-3774 (collect).

Vail Resorts, Inc. is the leading mountain resort operator in the
United States.  The Company's subsidiaries operate the mountain
resorts of Vail, Beaver Creek, Breckenridge and Keystone in
Colorado, Heavenly in California and Nevada, and the Grand Teton
Lodge Company in Jackson Hole, Wyo.  The Company also operates its
subsidiary, RockResorts, a luxury resort hotel company with 10
distinctive properties across the United States.  Vail Resorts
Development Company is the real estate planning, development,
construction, retail leasing and management subsidiary of Vail
Resorts, Inc. The Vail Resorts company Web site is
http://www.vailresorts.com/and consumer Web site is
http://www.snow.com/

Vail Resorts, Inc. (S&P, BB- Corporate Credit Rating, Negative) is
a publicly held company traded on the New York Stock Exchange
(NYSE: MTN).


VELTRI METAL: Files for Court Protection in Both U.S. and Canada
----------------------------------------------------------------
On January 13, 2004, Veltri Metal Products, Inc. filed a voluntary
petition seeking relief under Chapter 11 in the United States
Bankruptcy Court in Detroit, Michigan and its Canadian subsidiary,
Veltri Metal Products Co., commenced a proceeding under the
Companies' Creditors Arrangement Act in the Ontario (Canada)
Superior Court of Justice.

Veltri is a leading Tier 1 supplier to the automotive industry.
The company's major customers include DaimlerChrysler Corporation
and General Motors Corporation. Veltri specializes in high
quality, stamped metal components, complex modules and mechanical
assemblies. The company, headquartered in Troy, Michigan, has
approximately 1,500 employees.

Veltri's Chapter 11 and CCAA filings were necessitated by
liquidity concerns, due to pressures that have affected the
automotive industry generally and, specifically, its desire to
sell its business.

Veltri continues to benefit from the support of its major
customers, for which the company is continuing as a supplier.
Veltri has reached an agreement for financing to provide the
working capital necessary to continue to fund operations during
Veltri's Chapter 11 case. Such secured financing is to be provided
to Veltri by GMAC Commercial Finance, LLC.

Veltri expects the Court Cases to be of relatively brief duration.
A sale of the company or substantially all of its assets is
anticipated and would maximize the value of the business for
Veltri's customers, vendors, employees and other affected parties.

Veltri Metal Products, Inc. is a leading full-service Tier One
designer and manufacturer of high quality, stamped metal
components and complex assemblies used by North American
automotive vehicle manufacturers including DaimlerChrysler,
General Motors Corporation, Ford Motor Company and other Tier One
suppliers. The Company specializes in underbody/chassis and
unexposed body structure assemblies for passenger cars, light
trucks and full-size vans. Veltri's products include frame rail
assemblies, inner quarter panels, rear ladder modules, cross
member assemblies and trailer hitch assemblies. The Company and
its management team are highly respected within the automotive
industry for their expertise in supplying multi-component, complex
stamping assemblies, an outstanding new program launch record and
strong customer and employee relationships. The Company employs
over 1,500 people at seven manufacturing facilities in the United
States and Canada and is headquartered in Troy, Michigan.


VIALINK CO.: CEO Robert I. Noe Named Interim Board Chairman      
-----------------------------------------------------------
Effective December 31, 2003, Dr. Lewis B. (Bucky) Kilbourne has
resigned from the Board of Directors of The viaLink Company.

Robert I. (Bob) Noe, the Company's President and Chief Executive
Officer, has assumed the role of Chairman of the Board of
Directors on an interim basis effective the same date.

The Vialink Company's September 30, 2003 balance sheet shows a
working capital deficit of about $2 million, and a total
shareholders' equity deficit of about $1.6 million.

The Vialink Company provides subscription-based, business-to-
business electronic commerce services that enable companies in the
consumer packaged goods, retail and automotive industries to
efficiently manage their highly complex supply chain information.
Our services allow manufacturers, wholesalers, distributors, sales
agencies (such as food brokers) and retailers to communicate and
synchronize item, pricing and promotion information in a more
cost-effective and accessible way than has been possible using
traditional electronic and paper-based methods.

The Company's independent auditors have issued their Independent
Auditors' Report on the Company's consolidated financial
statements for the fiscal year ended December 31, 2002 with an
explanatory paragraph regarding the Company's ability to continue
as a going concern. The Company has generated net losses for the
years ended December 31, 2000, 2001 and 2002 and have generated an
accumulated deficit of $93.0 million as of September 30, 2003. The
Company has incurred operating losses and negative cash flow in
the past and expect to incur operating losses and negative cash
flow during 2003.


VIVENDI: Discloses 40% Equity Stake in UGC after Restructuring
--------------------------------------------------------------
Vivendi Universal (Paris Bourse: EX FP; NYSE: V) (S&P, BB Long-
Term and B Short-Term Corporate Credit Ratings, Positive) and the
family shareholders of the UGC Group signed an agreement on
December 31, 2003, modifying the structure of UGC S.A.'s equity
capital.

Under the terms of the agreement:

1- Vivendi Universal will hold only 40% of UGC S.A.'s equity
   capital (after elimination of the treasury stock), and the
   family shareholders' stake will be 56.20%. Vivendi Universal
   holds five of the 14 seats on the UGC Board of Directors.

2- Vivendi Universal is freed of the agreement to buy all UGC
   S.A. shares previously owned by family shareholders. This
   transaction removes a significant off-balance-sheet commitment
   for Vivendi Universal.

3- Vivendi Universal also signed an agreement with the family
   shareholders to sell its UGC S.A. shares at a price of 80
   million euros until December 31, 2005. The price may be raised
   in the case of a sale at a later date with an increase in value
   of the shares bought by UGC family shareholders.


WARNACO GROUP: Antonio C. Alvarez Steps Down from Company Board
---------------------------------------------------------------
On January 5, 2004, Antonio C. Alvarez, II resigned from the
Warnaco Group, Inc. Board of Directors.  Mr. Alvarez's
resignation follows the engagement of Alvarez and Marsal, Inc. to
advise Levi Strauss & Company on its turnaround.  Mr. Alvarez is
a co-founding Managing Director of Alvarez & Marsal, Inc. and
serves as the lead advisor on the Levi's project.  Mr. Alvarez
served on Warnaco's Board since March 2002; he also served as
Warnaco's Chief Executive Officer from November 2001 until April
2003.

In a press release on January 7, 2004, Joe Gromek, Warnaco's
President and Chief Executive Officer, said, "Tony has made
invaluable contributions to Warnaco, and we are truly thankful to
him for his superb work and commitment." (Warnaco Bankruptcy News,
Issue No. 57; Bankruptcy Creditors' Service, Inc., 215/945-7000)  


WAVING LEAVES: Wegman Hessler Serving as Bankruptcy Counsel
-----------------------------------------------------------
Waving Leaves, Inc., and its debtor-affiliates sought and obtained
approval from the U.S. Bankruptcy Court for the Northern District
of Ohio, Eastern Division, to employ Wegman, Hessler & Vanderburg
as Counsel in their chapter 11 cases.

Wegman Hessler, in its capacity as counsel, will:

     a. perform all necessary services as the Debtors' counsel
        in connection with these Chapter 11 cases, including,
        without limitation, providing the Debtors with advice
        concerning their rights and duties as debtors-in
        possession, representing the Debtors, and preparing all
        necessary documents, motions, applications, answers,
        orders, reports and paper in connection with the
        administration of these Chapter 11 cases on behalf of
        the Debtors;

     b. take all necessary actions to protect and preserve the
        Debtors' estates and assets for the duration of their
        Chapter 11 cases, including facilitate the sale of any
        or all of the Debtors' assets, if necessary to the
        reorganization process, prosecute actions by the
        Debtors, defend any actions commenced against the
        Debtors, negotiate concerning all litigation in which
        the Debtors are involved and object to claims filed
        against the estates;

     c. represent the Debtors at hearings, meetings,
        conferences, etc., on matters pertaining to the affairs
        of the Debtors as debtors-in-possession; and

     d. perform all other necessary legal services.

Wegman Hessler customary hourly rates are:

          Partners             $200 to $270 per hour
          Associates           $125 to $225 per hour
          Paraprofessionals    $50 per hour
          Case Clerks          $50 per hour

Headquartered in Wooster, Ohio, Waving Leaves, Inc., together with  
Leaf Investments, LTD, filed for chapter 11 protection on December
3, 2003 (Bankr. N.D. Ohio Case No. 03-66524).  R. Timothy Coerdt,
Esq., at Wegman, Hessler & Vanderburg represents the Debtors in
their restructuring efforts.  When the Company filed for
protection from its creditors, they listed debts and assets of:

                                Total Assets         Total Debts
                                ------------         -----------
Waving Leaves, Inc.               $6,806,785          $8,178,503
Leaf Investments, LTD             $3,818,990         $22,999,163


WEYERHAEUSER CO.: Will Publish Fourth-Quarter Results on Jan. 23
----------------------------------------------------------------
Weyerhaeuser Company (NYSE: WY) will release results for fourth
quarter 2003 on Jan. 23 before the market opens.

The company will hold a live conference call at 7 a.m. PST (10
a.m. EST) on Jan. 23 to discuss the fourth quarter results.

To access the conference call, listeners calling from within North
America should dial 1-888-221-5699 at least 15 minutes prior to
the start of the conference call.  Those wishing to access the
call from outside North America should dial 1-706-643-3795.  
Replays of the call will be available for one week following
completion of the live call and can be accessed at 1-800-642-1687
within North America and at 1-706-645-9291 from outside North
America.

The call may also be accessed through Weyerhaeuser's Internet site
at http://www.weyerhaeuser.com/by clicking on the "Listen to our  
conference call" link.

Weyerhaeuser Company (Fitch, BB+ Senior Unsecured Long-Term
Ratings, Stable Outlook), one of the world's largest integrated
forest products companies, was incorporated in 1900.  In 2002,
sales were $29.1 billion ($18.5 billion US).  It has offices or
operations in 18 countries, with customers worldwide. Weyerhaeuser
is principally engaged in the growing and harvesting of timber;
the manufacture, distribution and sale of forest products; and
real estate construction, development and related activities.  
Weyerhaeuser Company Limited, a wholly owned subsidiary, has
Exchangeable Shares listed on the Toronto Stock Exchange under the
symbol WYL. Additional information about Weyerhaeuser's
businesses, products and practices is available at
http://www.weyerhaeuser.com/


WHX CORP: Names Trangucci as CEO & Arnold as Executive Chairman
---------------------------------------------------------------
WHX Corporation's (NYSE: WHX) Board of Directors had elected Neale
X. Trangucci as Chief Executive Officer of WHX, Stewart E. Tabin
as President of WHX and Neil D. Arnold as Executive Chairman of
WHX, with such appointments to become effective February 1, 2004.

In connection with such appointments, effective February 1, 2004
the Management Agreement between WPN Corp. and WHX will be
terminated. These changes will result in a substantial reduction
in the Company's overhead expense. The Company also announced that
Ronald LaBow has retired as Chairman of the Board.

Mr. LaBow commented on the election of Messrs. Trangucci, Tabin
and Arnold, stating "I fully support their election and believe
that this move is the best decision for the Company. With the
resolution of the Wheeling-Pittsburgh Corporation bankruptcy
proceeding, I believe that the timing of this decision will allow
Messrs. Trangucci, Tabin and Arnold increased flexibility in
pursuing new strategic options for the Company." Mr. Trangucci
stated, "Ron has been an outstanding Chairman of the Board and his
contributions to the Company over a very long and difficult period
of time have been invaluable."

Messrs. Trangucci and Tabin have been officers of WPN Corp. for
over twelve years and have worked with Mr. LaBow to provide the
management services furnished by WPN Corp. to WHX under the
Management Agreement. Mr. Arnold has served on the Board of
Directors of WHX since 1992. He has been an officer of WPN Corp.
since August 2001 and a private investor since May 1999. Prior to
May 1999, Mr. Arnold was Group Finance Director of Lucas Varity
plc from December 1996 to May 1999.

WHX (S&P, B- Corporate Credit Rating, Negative Outlook) is a
holding company that has been structured to invest in and/or
acquire a diverse group of businesses on a decentralized basis.
WHX's primary business is Handy & Harman, a diversified
manufacturing company with activities in precious metals
fabrication, specialty wire and tubing and engineered materials.


WILLIAMS COS.: Look for 2003 Year-End Results on February 19
------------------------------------------------------------
Williams (NYSE: WMB) plans to report its year-end 2003 financial
results before the market opens on Feb. 19.  Williams' management
will discuss 2003 earnings and guidance through 2006 during an
analyst presentation to be webcast live beginning at 10 a.m.
Eastern the same day.

Participants are encouraged to access the presentation and
corresponding slides via http://www.williams.com/on Feb. 19.  A  
limited number of phone lines also will be available at (800) 810-
0924.  International callers should dial (913) 981-4900.  Callers
should dial in at least 10 minutes prior to the start of the
discussion.

Audio replays of the presentation will be available at 3 p.m.
Eastern Feb. 19 through midnight on Feb. 26.  To access the
replay, dial (888) 203-1112. International callers should dial
(719) 457-0820.  The replay confirmation code is 608313.  The
webcast replay -- audio and slides -- will be available
on http://www.williams.com/

Williams, through its subsidiaries, primarily finds, produces,
gathers, processes and transports natural gas.  Williams' gas
wells, pipelines and midstream facilities are concentrated in the
Northwest, Rocky Mountains, Gulf Coast and Eastern Seaboard.  More
information is available at http://www.williams.com/    

As reported in Troubled Company Reporter's October 16, 2003
edition, Fitch Ratings affirmed The Williams Companies, Inc.'s
outstanding senior unsecured notes and debentures at 'B+'. Also
affirmed are outstanding credit ratings for WMB's wholly-owned
subsidiaries Northwest Pipeline Corp., Transcontinental Gas Pipe
Line Corp., and Williams Production RMT Co. The Rating Outlook for
each entity has been revised to Positive from Stable. Details of
the securities affected are listed below.

The following is a summary of outstanding ratings affected by the
action:

   The Williams Companies, Inc.

        -- Senior unsecured notes and debentures 'B+';
        -- Feline PACs 'B+';
        -- Senior secured debt 'BB';
        -- Junior subordinated convertible debentures. 'B-'.

   Williams Production RMT Co.

        -- Senior secured term loan B 'BB+'.

   Northwest Pipeline Corp.

        -- Senior unsecured notes and debentures 'BB'.

   Transcontinental Gas Pipe Line Corp.

        -- Senior unsecured notes and debentures 'BB'.


WORLDCOM INC: Proposes Goldman Sachs Settlement Agreement
---------------------------------------------------------
Goldman, Sachs & Co., an investment banking and securities firm,
provides financial advisory services, including advice on
domestic and international mergers and acquisitions,
divestitures, privatizations, special committee assignments,
takeover defenses, and strategic partnerships and joint ventures.  
Lori R. Fife, Esq., at Weil, Gotshal & Manges, LLP, in New York,
relates that the Worldcom Debtors and Goldman Sachs are parties to
an Engagement Agreement, dated May 13, 2002, pursuant to which
Goldman Sachs provides financial advisory services to WorldCom.

The Initial Engagement Agreement was later supplemented by a
letter agreement dated July 16, 2002.  The Second Engagement
Agreement provides for the terms and fees of Goldman Sachs'
services to certain types of transactions.  Pursuant to the
Second Engagement Agreement, the Debtors engaged Goldman Sachs
to:

   (1) advise in the raising of debt and equity capital from
       either strategic or financial investors;

   (2) advise in the ongoing strategic merger discussions with
       several leading telecommunications companies;

   (3) assist in the arrangement of debtor-in-possession
       financing; and

   (4) assist in the sale of assets and businesses.

According to Ms. Fife, the Debtors paid Goldman Sachs:

   -- $10,000,000 as financial advisory fee for the services
      under the Initial Engagement Agreement and $150,000 as
      reimbursement for certain expenses on June 14, 2002; and

   -- $3,000,000 for financial advisory services relating to the
      sale of the wireless resale businesses, under the Second
      Engagement Agreement, on July 19, 2002.

After the Petition Date, however, the Debtors informed Goldman
Sachs that they intend to file an action to recover the payments
made.  The Debtors wanted to recover the Payments on the basis
that these constituted fraudulent transfers under Section 548 of
the Bankruptcy Code.  The Debtors asserted that:

    (1) the Payments were made within one year of the Petition
        Date;

    (2) they did not receive reasonably equivalent value in
        exchange for the Payments; and

    (3) they were insolvent at the time the Payments were made.

Goldman Sachs argued that the value of the services provided to
WorldCom under the Engagement Agreements is reasonably equivalent
to the Payments made on account of the services.

Richard C. Breeden, the Debtors' appointed Corporate Monitor,
alleged that at least a portion of the Payments was made without
his approval, which was required.

Goldman Sachs and the Debtors entered into discussions and
consensually agreed to resolve all of WorldCom's claims
surrounding the Payments as well as any issues relating to the
Corporate Monitor's approval.  In a Settlement Agreement dated
December 11, 2003, Goldman Sachs agreed to pay $9,500,000 to the
Debtors, by wire transfer in immediately available funds.  The
parties will execute mutual releases.

The compromise and settlement is fair, equitable and reasonable,
Ms. Fife asserts.  Moreover, the Official Committee of Unsecured
Creditors does not oppose the Settlement.  Therefore, Ms. Fife
says, the Settlement Agreement should be approved. (Worldcom
Bankruptcy News, Issue No. 46; Bankruptcy Creditors' Service,
Inc., 215/945-7000)  


XCEL ENERGY: Inks Pact to Sell Cheyenne Light to Black Hills
------------------------------------------------------------
Xcel Energy (NYSE:XEL) announced a definitive agreement to sell
its Cheyenne Light, Fuel & Power electricity and natural gas
operations to Black Hills Corp. (NYSE:BKH), pending regulatory
approval by the Federal Energy Regulatory Commission and the
Wyoming Public Service Commission.

Xcel Energy is expected to record a one-time gain of approximately
1 cent per share upon completion of the transaction. CLF&P
contributed less than 1 cent per share to Xcel Energy's annual
earnings. No other financial information is being disclosed at
this time.

"Cheyenne Light Fuel & Power has been an important part of our
system for many years. This change in ownership will be largely
transparent to the customer. Black Hills is a highly regarded
utility and will continue to offer quality service to customers in
the area," said Richard C. Kelly, Xcel Energy president and chief
operating officer.

CLF&P serves approximately 38,000 electricity customers and 30,000
natural gas customers in Cheyenne and several surrounding
communities in southeastern Wyoming. CLF&P was acquired by Public
Service Co. of Colorado, a predecessor of Xcel Energy, in October
1923.

Xcel Energy is a major U.S. electricity and natural gas company,
with operations in 11 western and Midwestern states. Xcel Energy
provides a comprehensive portfolio of energy-related products and
services to 3.2 million electricity customers and 1.7 million
natural gas customers through its regulated operating companies.
In terms of customers, it is the fourth-largest combination
natural gas and electricity company in the nation. Company
headquarters are located in Minneapolis. More information is
available at http://www.xcelenergy.com/


XM SATELLITE: Commences Public Offering of 18 Million Shares
------------------------------------------------------------
XM Satellite Radio Holdings Inc. (Nasdaq: XMSR), commenced an
underwritten public offering of 18,000,000 shares of its Class A
Common Stock, including the offering of 7,000,000 shares by the
Company representing new financing, and 11,000,000 shares by
certain selling shareholders.

XM is America's #1 satellite radio service.  With nearly 930,000
subscribers, XM is on pace for 1.2 million subscribers later this
year. Broadcasting live daily from studios in Washington, DC, New
York City and Nashville, Tennessee at the Country Music Hall of
Fame, XM provides its loyal listeners with 101 digital channels of
choice: 70 music channels, more than 35 of them commercial-free,
from hip hop to opera, classical to country, bluegrass to blues;
and 31 channels of premiere sports, talk, comedy, kid's and
entertainment programming.  For more information about XM, visit
http://www.xmradio.com/   

                         *     *     *

As previously reported in Troubled Company Reporter, Standard &
Poor's Ratings Services lowered its corporate credit ratings on
satellite radio provider XM Satellite Radio Inc., and its parent
company XM Satellite Radio Holdings Inc. (which are analyzed on a
consolidated basis) to 'SD' from 'CCC-'.

At the same time, Standard & Poor's lowered its rating on the
company's $325 million 14% senior secured notes due 2010 to 'D'
from 'CCC-'.

These actions follow XM's completion of its exchange offer on the
senior secured notes, at par, for new 14% senior secured notes due
2009.

All ratings were removed from CreditWatch with negative
implications where they were placed on Nov. 18, 2002.


ZOLTEK COMPANIES: Completes Debt Refinancing Transactions
---------------------------------------------------------
Zoltek Companies, Inc. (Nasdaq: ZOLT) reported its results for the
fourth quarter and full fiscal year ended September 30, 2003, and
completion of the previously announced refinancing of its debt
obligations.

For fiscal 2003, Zoltek reported net sales of $63.5 million, a
decrease from net sales of $68.4 million in fiscal 2002. Zoltek
reported a net loss from continuing operations of $15.6 million,
or $0.96 per share, for fiscal 2003, compared to a net loss from
continuing operations of $8.7 million, or $0.53 per share, in
fiscal 2002. For the quarter ended September 30, 2003, net sales
were $14.7 million compared to $16.6 million in the fourth quarter
of fiscal 2002. The net loss from continuing operations in the
fourth quarter of fiscal 2003 was $3.8 million, or $0.23 per
share, compared to a net loss from continuing operations of $1.9
million, or $0.11 per share, in the corresponding fiscal 2002
fourth quarter.

The Company attributed the negative comparisons primarily to
weakness in the aircraft brake market due to the overall decline
in commercial aviation activity and to continuing softness in
demand for textile acrylic products. "As we progress into 2004, we
are optimistic that we can achieve improved financial results
given our momentum from several large orders received in the first
quarter of the current fiscal year, including our first ever
million pound order for commercial carbon fibers.  We anticipate
significantly increased sales of carbon fiber products in fiscal
2004 due to our growing success in sporting goods and other
existing markets, coupled with clear near-term prospects in
targeted new application areas, especially in wind energy," Zsolt
Rumy, Zoltek's Chairman and Chief Executive Officer, said.  "In
addition to the significant new orders for carbon fibers, in
recent months, we have identified positive signs that the over-
capacity and distressed selling prices for carbon fibers are
beginning to ease and we are encouraged by long-awaited tangible
developments regarding opportunities to supply emerging
applications for products in wind turbines and other alternative
energy sectors and in flame resistance," Rumy said.

Zoltek also announced that it had completed the previously
announced refinancing of its debt obligations to better meet the
requirements of its developing carbon fiber business. The
principal components of the refinancing included the private
placement of $7.0 million of convertible debentures to
institutional and other investors, refinancing of the Company's
real estate mortgages and reduction and amendment of its bank
loans. The convertible debentures are convertible into the
Company's common stock at a conversion price of $5.40 per share.
The Company also issued to the investors five-year warrants to
purchase up to 323,994 shares of common stock at an exercise price
of $5.40 per share.

The Company observed that the additional cash and loosening of
payment obligations from the refinancing should provide funding
for the Company's business plan for fiscal 2004. If demand for
fibers accelerates significantly, the Company may need to seek
additional debt or equity financing for working capital to support
increased production levels.  "The refinancing was expensive but
necessary," Rumy said.  "Under our current business plans, it is
designed to position us to a point where we can start to generate
significant new sales and, ultimately, earnings."

Zoltek is an applied technology and materials company.  Zoltek's
Carbon Fiber Business Unit is primarily focused on the
manufacturing and application of carbon fibers used as
reinforcement material in composites, oxidized acrylic fibers for
heat/fire barrier applications and aircraft brakes, and composite
design and engineering to support the Company's materials
business. Zoltek's Hungarian-based Specialty Products Business
Unit manufactures and markets acrylic fibers, nylon products and
industrial materials.

                          *    *    *

                Liquidity and Capital Resources

In its latest Form 10-Q filed with the Securities and Exchange
Commission, Zoltek reported:

"The Company's primary sources of liquidity historically have been
cash flow from operating activities and borrowings under credit
facilities, supplemented with the net proceeds from three previous
public equity offerings, and long-term debt financing utilizing
the equity in the Company's real estate properties. Additional
sources of future liquidity are expected from the sale of the non-
core businesses of the Company's Hungarian operations.

"The Company's financing of its U.S. operations is separate from
that of its Hungarian operations. Availability of credit is based
on the collateral value at each operation. However, the covenants
of the term loan and revolving line of credit from a U.S. bank
apply to the Company on a consolidated basis.

"US Operations - In May 2001, the Company entered into a two-year
credit facility with a U.S. bank in the amount of $14.0 million.
The credit facility was structured as a term loan in the amount of
$4.0 million and a revolving credit loan in the amount of $10.0
million. In December 2001, June 2002 and September 2002 the
Company amended its credit agreement with the U.S. bank to waive
and modify certain financial covenants. In consideration for these
amendments, the interest rate on the term and revolving credit
loans was adjusted to the prime rate plus 1.0% per annum. As a
result of these waivers and modifications, at September 30, 2002,
the Company was in compliance with all financial covenants
requirements included in the credit agreement as amended.

"The Company executed an amended credit facility agreement, dated
as of February 13, 2003, with the U.S. bank. The amended credit
facility agreement is structured as a term loan in the amount of
$3.5 million (due February 13, 2005) and a revolving credit loan
in the amount of $5.0 million (due January 31, 2004). The Company
repaid $5.0 million of this loan from the proceeds of the sale of
subordinated convertible debentures. Borrowings under the new
facility are based on a formula of eligible accounts receivable
and inventories of the Company's U.S. - based subsidiaries. The
outstanding loans under the agreement bear interest at the prime
interest rate plus 2% per annum. The loan agreement contains
quarterly financial covenants related to borrowings, working
capital, debt coverage, current ratio and capital expenditures.
Total borrowings under the revolving credit agreement were $3.9
million and the available credit under this agreement was $1.1
million at June 30, 2003.

"The Company was not in compliance with the certain financial
covenants under its amended credit agreement with the U.S. bank as
of June 30, 2003. The Company subsequently received waivers from
the U.S. bank for these financial covenant violations as of June
30, 2003. The Company currently does not anticipate that it will
be in compliance with these financial covenants as of September
30, 2003 and, accordingly, the $3.3 million term loan with the
U.S. bank has been classified as a current liability at June 30,
2003.

"The Company also entered into a debenture purchase agreement,
dated as of February 13, 2003, under which the Company agreed to
issue and sell to 14 investors, including certain directors,
subordinated convertible debentures in the aggregate principal
amount of $8.1 million. The subordinated convertible debentures
have stated maturities of five years, bear interest at 7% per
annum and are convertible into an aggregate of 2,314,286 shares of
common stock of the Company at a conversion price of $3.50 per
share. The Company also issued to the investors five-year warrants
to purchase an aggregate of 405,000 shares of common stock of the
Company at an exercise price of $5.00 per share. The fair value of
the warrants, at the time of issuance, was estimated to be
$376,650. Proceeds from the issuance of these convertible
debentures were used to repay existing borrowings as well as for
working capital.

"The subordinated convertible debentures contain certain cross-
default provisions related to the Company's other debt agreements.
Accordingly, the covenant non-compliances under the Company's
senior U.S. credit facility at June 30, 2003 resulted in the
possibility of a default event being declared by the subordinated
convertible debenture holders, which would result in that debt
being immediately due and payable. Since the Company subsequently
received waivers from its senior U.S. lender the convertible
debentures are no longer in default. However, the Company
currently does not anticipate that it will be in compliance with
financial covenants included in the amended credit agreement with
the senior U.S credit facility as of September 30, 2003.
Accordingly, the Company has classified the subordinated
convertible debentures as a current liability at June 30, 2003.
However, in the event of future non-compliance under the Company's
senior U.S. bank credit facility, the Company could request a
waiver of the cross-default provision for the convertible
debenture holders and believes that the holders would be receptive
to such a request in conjunction with the proposed refinancing of
the Company.

"As of June 30, 2003, the Company had a balloon mortgage payment
of $1.5 million on its operating facility in Salt Lake City due to
a U.S. bank. The Company has not made this payment, however, the
Company has agreed with the U.S. bank to renew the note with a
maturity date of November 2004.

"Hungarian Operations - In May 2001, the Company's Hungarian
subsidiary entered into a credit facility with a Hungarian bank.
The facility consists of a $6.0 million bank guarantee and
factoring facility, a $4.0 million capital investment facility and
a $2.0 million working capital facility. All of the Hungarian bank
debt is due on November 30, 2003. Therefore, $10.8 million of the
debt is classified as current debt on the balance sheet as of June
30, 2003. The Company is seeking to obtain an extension of the
Hungarian bank debt.

"In March 2003, the Company's Hungarian subsidiary entered into a
credit agreement with another Hungarian bank for $2.2 million. The
facility consists of a bank guarantee, factoring and mortgages and
expires September 30, 2004. The Hungarian subsidiary was not in
compliance of one of its financial covenants at June 30, 2003, of
which it has not requested or received a waiver. Therefore, the
entire amount of the debt, $2.2 million, was classified as current
at that date Management is taking action to cure this default.

"Total borrowings of the Hungarian subsidiary were $12.9 million
at June 30, 2003. Borrowings under the Hungarian bank credit
facilities cannot be used in Zoltek's U.S. operations.

"Proposed Refinancing - The Company currently is seeking to obtain
new financing to replace, entirely or in part, the credit
agreement with the U.S. bank. The Company anticipates that this
new financing will include a combination of senior, revolving,
term and mortgage debt and may include additional equity
investment. The Company's objective is to obtain financing that
will result in substantially all of its debt that presently is
classified as current will be classified as long-term. Based on
indications of interest to date, the Company believes it will
achieve its financing objective, including negotiating covenants
that it will be able to meet in the future. However, the Company
can give no assurances that it will be successful in its attempt
to obtain new financing and, if the Company is unsuccessful, it
would have a material adverse effect on its future financial
condition and its ability to continue to pursue its current
business plan."


* Deirdre A. Martini Appointed as New U.S. Trustee for Region 2
---------------------------------------------------------------
Deirdre A. Martini of Fairfield, Conn., has been appointed United
States Trustee for New York, Connecticut, and Vermont (Region 2),
it was announced today by Lawrence Friedman, Director of the
Executive Office for United States Trustees.  Martini's
appointment takes effect on November 2, 2003.

"I am pleased to announce Deirdre Martini's appointment as U.S.
Trustee for Region 2," Friedman stated. "Her background in
commercial litigation and bankruptcy, as well as her experience
with civil and criminal enforcement as an Assistant U.S. Attorney,
will serve the Program well in this very important region."

"I am looking forward to working with the well-regarded
professional staff in the region, under the leadership of Director
Friedman," Martini stated.  "I am eager to apply my commercial
litigation and negotiation skills, along with my enforcement
experience, to carry out the Attorney General's mandate to
preserve the integrity of the bankruptcy system."

Immediately before joining the U.S. Trustee Program, Martini
practiced law at the Greenwich, Conn., office of Ivey, Barnum &
O'Mara LLC, where she founded the bankruptcy, creditors' rights,
and corporate restructuring practice group.  Prior to that, she
served from 1988 to 1999 as an Assistant U.S. Attorney for the
District of Connecticut, representing federal agencies in
bankruptcy cases and adversary proceedings and prosecuting
criminal bankruptcy fraud cases. While at the U.S. Attorney's
office, she also served as a mediator for the Department of
Justice's Equal Employment Opportunity Office, and developed a
curriculum and teaching materials on mediation advocacy and
advanced negotiations for the instruction of civil Assistant U.S.
Attorneys nationwide.

Martini has served as a member of the International Women's
Insolvency and Restructuring Confederation, as well as the
Strategic Planning Committee and the Local Rules Committee of the
U.S. Bankruptcy Court for the District of Connecticut.

Martini received her law degree in 1987 from Quinnipiac University
School of Law in Hamden, Conn., and her undergraduate degree in
1984 from New York University.

The United States Trustee Program is a component of the Justice
Department that protects the integrity of the bankruptcy system by
overseeing case administration and litigating to enforce the
bankruptcy laws.

The Program has 21 regions and 95 field offices. Region 2 is
headquartered in Manhattan with additional offices in Albany,
Brooklyn, Buffalo, Central Islip, Rochester, and Utica, N.Y., and
New Haven, Conn.


* Fasken Matineau Brings-In Richard Peter as Associate Counsel
--------------------------------------------------------------
Louis Bernier, National Managing Partner and David Field, Regional
Managing Partner, Calgary, of national law Fasken Martineau
DuMoulin LLP announced that Richard Peters has joined the firm as
Associate Counsel. Mr. Peters practices in the areas of securities
law and mergers and acquisitions.

"With his years of experience and insight into Calgary's business
community, particularly within the energy sector, Richard's skills
will complement those of the talented mix of legal practitioners
at our firm," said Mr. Field. "His arrival to our firm strengthens
our commitment to clients in Alberta and our intention to build
strong, meaningful and lasting relationships with those clients
for all of their significant business needs."

Mr. Peters was most recently in-house counsel with a major
pipeline company and prior to that, was in private practice with
several Calgary law firms. He has been practicing law in Alberta
since being called to the bar in 1990. Mr. Peters is a graduate of
the University of Manitoba, completing his law degree in 1989 and
a commerce degree in 1986. He can be reached at 403 261 5375 or
rpeters(at)cgy.fasken.com.

The Calgary office of Fasken Martineau began operations in the
spring of 2003. Since opening, the office has since grown
continuously to its current roster of 11 lawyers practicing in the
areas of banking law, environmental law, energy, resources and
mining law, real estate law, labour and employment law, municipal
law, and aboriginal law - and now securities, mergers and
acquisition law.

Fasken Martineau is a leading Canadian business law and litigation
firm that is recognized for its strength and expertise in mining
and mining finance, financial services, corporate finance,
securities, mergers and acquisitions, environmental, tax,
insolvency and restructuring, litigation and arbitration, labour
and employment, intellectual property and information technology.
With more than 560 lawyers, the firm provides expertise in both of
Canada's legal systems, common and civil law, and in both official
languages. Along with its broad national presence in Vancouver,
Calgary, Yellowknife, Toronto, Montr,al and Qu,bec City, Fasken
Martineau also practices Canadian law from offices in New York,
London, and Johannesburg. Fasken Martineau DuMoulin LLP is a
limited liability partnership under the laws of Ontario.


* E&Y Sells Part of Actuarial Advisory Practice to Eckler Partners
------------------------------------------------------------------
Ernst & Young LLP announced that the firm's Actuarial Valuation
Expert software, Quebec actuarial advisory practice, and the
portion of Ernst & Young's Toronto actuarial advisory practice
related to AVE support has been sold to Eckler Partners Ltd.,
Canada's largest independent actuarial consulting firm. All
employees within the divested business will move to Eckler
Partners. Financial details of the transaction will not be
disclosed.
    
Not affected by this announcement are Ernst & Young's property and
casualty actuarial advisory practice outside of the province of
Quebec, nor the majority of its life insurance actuarial advisory
practice outside of Quebec. Ernst & Young will retain the non-AVE
portion of its Toronto insurance actuarial advisory practice,
which will continue to provide audit-related and other actuarial
services for property and casualty, and life insurance clients.
    
William Weiland, managing partner of Eckler Partners says the
competencies of the acquired practice fit extremely well with his
firm's already strong life and casualty actuarial practices in
Canada and the Caribbean. "This transaction substantially enhances
our position as Canada's leading actuarial consultant to financial
institutions," Mr. Weiland says.

Eckler Partners Ltd. is one of Canada's oldest actuarial
practices, with origins dating back to 1927. Owned entirely by its
active partners, it is the largest, independent Canadian-owned
actuarial firm. Eckler Partners Ltd. is the foremost provider of
actuarial consulting services to the financial services industry.
The firm is also a recognized leader in the delivery of actuarial
and consulting services to pension and benefit plan sponsors. The
firm has offices in six cities across Canada (Vancouver, Winnipeg,
Toronto, Montreal, Quebec City and Halifax), as well as offices in
the Caribbean (Jamaica, Barbados and Trinidad & Tobago). It is a
founding member of Milliman Global, an international alliance of
leading independent actuarial consulting firms in over 30
countries. Further information about Eckler Partners can be found
at http://www.eckler.ca/

Ernst & Young, a global leader in professional services, is
committed to restoring the public's trust in professional services
firms and in the quality of financial reporting. Its 103,000
people in more than 140 countries around the globe pursue the
highest levels of integrity, quality, and professionalism to
provide clients with solutions based on financial, transactional,
and risk- management knowledge in Ernst & Young's core services of
audit, tax, and corporate finance. Ernst & Young practices also
provide legal services in those parts of the world where
permitted. Ernst & Young refers to all the members of the global
Ernst & Young organization. Further information about Ernst &
Young and its approach to a variety of business issues can be
found at http://www.ey.com/perspectives/


* Leading Firms Unite to Create First Global Offshore Law Firm
--------------------------------------------------------------
Appleby Spurling & Kempe and Hunter & Hunter will unite their
business operations on April 1, 2004, creating the first law firm
with a major presence in both Bermuda and the Cayman Islands --
two of the world's leading offshore business centres.

The combined group, to be known as Appleby Spurling Hunter, will
have an expanded presence in the British Virgin Islands and the
major financial centres of Hong Kong and London, giving it a very
broad and unique reach among offshore law firms, providing
powerful benefits to clients.

Partners of the two firms voted unanimously in December, 2003, to
approve the creation of the new enterprise, which will be a
combined entity of approximately 430 lawyers and staff worldwide.
This combination will result in one of the largest offshore
providers of legal and business services.

"Joining Appleby Spurling & Kempe and Hunter & Hunter together
creates an optimal situation for clients," said AS&K Managing
Partner, Peter Bubenzer. "They will benefit from a broader and
deeper array of services in all of our locations and have
dispassionate guidance regarding the selection of the most
appropriate offshore jurisdiction," he noted. "The range of our
expertise will be greatly enhanced, so we will be able to offer
access to even greater resources."

"Our two firms are already leaders in their respective
jurisdictions," said Bruce Putterill, Senior Partner of Hunter &
Hunter, "and we share a common vision of providing impeccable
quality and outstanding service for those doing business offshore.
The combination of firms strengthens each of our historical
footholds and opens the door to an even greater presence in other
offshore jurisdictions. Also, with offices in major business
locations such as London and Hong Kong, we provide access to, from
and among key financial centres."

The combined group will continue to focus on the historical
strengths of each firm: general company and corporate advice,
insurance, funds and investment services, asset finance and
banking, telecommunications, dispute resolution, insolvency and
restructuring, capital markets and financial structures, trusts
and real property. Additionally, the legal offerings are
complemented by trust, corporate administration and company
management services.

Appleby Spurling & Kempe is a leading provider of sophisticated
offshore legal services. Headquartered in Bermuda, the firm
maintains offices in Hong Kong and London and is opening an office
in the British Virgin Islands.

The firm's principal focus is on the corporate commercial arena.
This includes the incorporation and formation of offshore
structures. The firm also has a substantial litigation &
insolvency department handling both local and international
matters and has experienced attorneys in our trusts & financial
structures and property departments. The firm has a total
complement of approximately 340 persons, including more than 70
lawyers. Appleby Spurling & Kempe has offered innovative solutions
to complex legal problems for more than 100 years. The firm also
has several subsidiary and affiliated companies to add value to
the services provided in the practice:

    * Harrington Trust Limited, a Bermuda trust company, offers a
      comprehensive range of trust services including the
      provision of trustees, trust accounting and administration,
      and ancillary advice and services.

    * A. S. & K. Services Ltd. provides corporate administrative
      and resident representative services to the firm's client
      companies.

    * Reid Management Limited provides professional management,
      consulting and accounting services to its clients. It has an
      experienced and qualified staff of chartered accountants and
      service professionals.  Also, through Reid Services Limited,
      the group serves as a listing sponsor on the Bermuda Stock
      Exchange (BSX).

For further information on Appleby Spurling & Kempe, please visit
http://www.ask.bm/  

Hunter & Hunter is one of the largest and leading law firms in the
Cayman Islands. The main focus of the firm's practice is on
international and commercial work, mainly for institutional
clients, but it is a full service law firm also known for serving
its local community.

The firm comprises some 30 lawyers and has a total staff of 85. As
well as its head office in Grand Cayman, it has an office in
London to provide enhanced service to its clients based in Europe.

    Hunter & Hunter advises in particular on:

    * Banking and asset finance

    * Mutual funds and private equity funds

    * Company law

    * Commercial contracts and joint ventures

    * Ship and aircraft registration

    * Structured finance and capital markets

    * Property law and commercial leases

    * Intellectual and industrial property

    * Insurance and reinsurance

    * All forms of dispute resolution

    * Trusts

Through Huntlaw Corporate Services Ltd, a company management
provider owned by the partners of the firm, Hunter & Hunter also
provides a complete corporate administration service.

For more information on Hunter & Hunter, please visit
http://www.hunterandhunter.ky/

                          *********

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.

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., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L.
Metzler, Bernadette C. de Roda, Donnabel C. Salcedo, Ronald P.
Villavelez and Peter A. Chapman, Editors.

Copyright 2004.  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 ***