TCR_Public/040723.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Friday, July 23, 2004, Vol. 8, No. 152

                           Headlines


A.B. DICK COMPANY: Wants Jaspan Schlesinger as Delaware Counsel
ABITIBI-CONSOLIDATED: Declares Dividend Payable on September 2
ADELPHIA COMMS: Asks Court to Stay 144 Adversary Proceedings
ADVANTA CORP: Fitch Revises Rating Outlook to Positive
AIR CANADA JAZZ: Discloses New Senior Executive Appointments

AK STEEL CORP: S&P Revises Outlook to Stable from Negative
AMERICAN ENERGY: Retains Investor Relations & Corporate Dev't Firm
AMERICAN STEAMSHIP: S&P Lowers Counterparty Credit Rating to BB+
AMERICAN WAGERING: Bankr. Judge Stalls Chapter 11 Plan Progress
APPLIED DIGITAL: Shareholders Meet Tomorrow in Delray Beach, Fla.

AQUILA: S&P Revises CCC+ Corp. Credit Rating to Watch Developing
ARMSTRONG HOLDINGS: Plans to Sell Wave Facility to Marine Venture
ATMI INC: Second Quarter 2004 Net Income Nears $8 Million
BANC OF AMERICA: Fitch Affirms 8 Classes' Low-B Ratings
BANK OF AMERICA: Fitch Affirms Low-B Ratings of 6 Classes

BMC: Agrees to Sell Buckbee-Mears Assets to International Electron
C-BASS SECURITIZATIONS: Fitch Affirms Low-B Ratings of 3 Classes
CANDESCENT TECH: Signs-Up Sonsini Goodrich as Corporate Counsel
CATHOLIC CHURCH: Wants to Maintain Existing Investment Practices
CE SOFTWARE: Reports Q1 Results & Proceeds with Liquidation Plan

CENTERPOINT ENERGY: Inks Pact to Sell Texas Genco for $3.65 Bil.
CITIZENS COMMUNICATIONS: S&P Lowers Coporate Credit Ratings To BB+
COMMERCIAL CORP: Case Summary & 20 Largest Unsecured Creditors
COOPERHEAT-MQS: Team Inc. $35 Mil. Bid Wins in Bankruptcy Auction
CORNING INC: Board Approves $750 Million Capital Expenditure Plan

COVANTA: Court Directs Covanta Tampa To Issue Status Reports
COVANTA ENERGY: Attacks Travelers Insurance's $205 Million Claim
CRITICAL HOME: Recurring Losses Trigger Going Concern Doubts
CROMPTON CORP: S&P Cuts Outstanding Senior Notes Rating to B+
DEVLIEG BULLARD: Case Summary & 20 Largest Unsecured Creditors

DRYDEN VII: S&P Assigns Class B-2L Preliminary Ratings at BB
EMERGING VISION: Fog Clears in Board of Directors' Election
ENRON CORP: Asks Court to Disallow and Expunge 433 Big Claims
FLEMING: C&S Insists on Immediate Performance under Sale Agreement
FLINTKOTE COMPANY: Committee Looks to Tersigni for Fin'l Advice

FUELNATION: Grants Yugra Holding Exclusive Distribution Rights
FURNAS COUNTY: Selling Assets to AFA Acquisition for $50,000,000
GALEY & LORD: Wants Board to Okay Patriarch's Acquisition Plan
GEARS LTD: Fitch Assigns Preliminary Low-B Ratings to 2 Classes
GENTEK INC: Richard R. Russell Discloses Owns 45,661 Shares

GLOBAL WATER: Stock Begins Trading Under New 'GWTR' Symbol
HARRAH'S ENTERTAINMENT: Issues 2nd Quarter Financial Results
HEXCEL CORP: Reports $89 Million Stockholders' Deficit at June 30
INTERACTIVE MOTOR: Completes Mall Conversions with Checker Flag
JOSTENS HOLDING: S&P Places Ratings on CreditWatch Negative

JP MORGAN: Fitch Affirms Low-B Ratings of 6 2002-CIBC5 Classes
JP MORGAN: Fitch Affirms Low-B Ratings of 6 2002-CIBC4 Classes
JP MORGAN: Fitch Affirms Low-B Ratings of 6 2001-CIBC2 Classes
KAISER ALUMINUM: Wants Court to Okay Wash. State Condemnation Pact
LAM RESEARCH: Net Income Doubles to $52 Million in Second Quarter

LOUDEYE CORP: Reports 16 New Customer Contracts to Thwart Piracy
LUCENT TECHNOLOGIES: Records $387 Million Net Income in Q3'04
LUCENT TECHNOLOGIES: Fitch Upgrades Sr. Unsecured Debt Rating to B
MAC HOUSE: Case Summary & 11 Largest Unsecured Creditors
MEDICALCV: Announces Senior Management Shake-Up & Shuffle

METROPOLITAN MORTGAGE: Fitch  Downgrades Class B-1 Rating to B
MICRO EQUIPMENT: Case Summary & 20 Largest Unsecured Creditors
MIRANT: Wants to Complete Phase I Key Employee Retention Program
MISSION RESOURCES: S&P Places Ratings on CreditWatch Developing
NATIONAL CENTURY: Amedisys Takes an Appeal to the District Court

NATIONWIDE HEALTH: Appoints Don Bradley Chief Investment Officer
NEW HEIGHTS: Committee Hires Lowenstein Sandler as Attorneys
NEW WORLD PASTA: Employs KPMG as Accountants and Tax Advisors
NOMURA ASSET: Fitch Affirms Low-B Ratings of 2 1996-MDV Classes
NORTHERN BERKSHIRE: Fitch Assigns BB+ Ratings to Series 2004 Bonds

NORTHWEST AIRLINES: Stockholders' Deficit Widens to $2.4 Billion
NORTHWEST AIRLINES: Expands Major Flights from Indianapolis
NRG ENERGY: Asks Court's Permission to Assign 15 Contracts to OG&E
ORBITAL SCIENCES: Q2'04 Operating Income Rose to $14.5 Million
PACIFIC MAGTRON: Ability to Operate Profitably Uncertain

PARMALAT: Milk Products Proposes $600,000 Sale Pact Break-Up Fee
PEAK ENTERTAINMENT: Revenues Insufficient to Ensure Viability
PG&E NATIONAL: Court Approves Tax Agreement Between NEG & USGen
PRESIDENT CASINOS: Court Denies Golf Course Re-Zoning Appeal
QWEST COMMS: Will Release 2nd Quarter Results on August 3

RCN CORP: Creditors Committee Wants to Retain Chanin as Advisor
REDBACK NETWORKS: Reports 45% Net Revenue Increase in 2nd Quarter
RELIANCE GROUP: Pension Plan Terminated as of January 31, 2004
RIVIERA HOLDINGS: Reports Record EBITDA Results for 2nd Quarter
SAXON ASSET: Fitch Takes 3 Actions on Securities Trust Ratings

SIRIUS SATELLITE: Records $136.8 Million Net Loss in 2nd Quarter
SK GLOBAL AMERICA: Wants Court to Approve John Roberts Settlement
SOLUTIA INC: Court Approves Key Employee Retention Program
STELCO INC: Plans to Close Rod Mill in September
STILLWATER MINING: S&P Corp Credit Rating Taken Off Watch Negative

TAYLOR CAPITAL: Fitch Withdraws BB- Preferred Stock Ratings
TEEKAY SHIPPING: Reports $98.5 Million Net Income in 2nd Quarter
TERRA INDUSTRIES: To Webcast Q2 Results & Conference on July 29
TESORO PETROLEUM: S&P Raises Corporate Credit Rating to BB+
TRW AUTOMOTIVE: Meets Gov't Regulations on Occupant Vision System

U STREET DEVELOPMENT: Voluntary Chapter 11 Case Summary
UNIFLEX: Retains Budd & Demaria as Labor & Employment Counsel
UNITED AIRLINES: Wants Disallowance of Various Mega Claims
USG CORPORATION: Wants to Assume Libertyville Property Lease
VIASYSTEMS INC: S&P Affirms Corporate Credit Rating at B

VITAL BASICS: Panel Gets Nod to Hire Drummond Woodsum as Counsel
W.R. GRACE: Asks Court to Extend Removal Period to December 31
W.R. GRACE: Reports $21.3 Million Net Income in Second Quarter
WEIRTON STEEL: Plans To Settle with Independent Guards Union
WESTERN PACIFIC: First Creditors Meeting Slated for August 4

WESTPOINT STEVENS: Sells 400 Looms to Coker Ashland for $725,000
WOMEN FIRST: Files Liquidating Chapter 11 Plan in Delaware
WORLDCOM INC: Demands Full Payment of Debts from Former CEO

* Nixon Peabody Forms New Beverage Alcohol Team
* Newman Rejoins Morgan Lewis as Energy Practice Group Partner

* BOOK REVIEW: Macy's For Sale
  
                           *********

A.B. DICK COMPANY: Wants Jaspan Schlesinger as Delaware Counsel
---------------------------------------------------------------
A.B. Dick Company, Multigraphics LLC, Interactive Media Group,
Inc., and Paragon Corporate Holdings, Inc., ask the U.S.
Bankruptcy Court for the District of Delaware for permission to
employ Jaspan Schlesinger Hoffman, LLP, as their Delaware counsel.

The Debtors selected Jaspan as their Delaware counsel because of
the Firm's knowledge and general experience in the field of debtor
protection, creditor's rights and business reorganization under
Chapter 11 of the Bankruptcy Code.  The Debtors are confident that
Jaspan has the necessary background to deal effectively with many
of the potential legal issues and problems that may arise in the
context of their Chapter 11 cases.  The Debtors believe that
Jaspan is well-qualified and able to represent them in these
chapter 11 cases in the most efficient and timely manner.

Specifically, Jaspan will:

   (1) take all actions necessary to protect and preserve the
       Debtors' estates, including the prosecution of actions on
       their behalf, the defense of any action commenced against
       them, the negotiation of disputes in which they are
       involved, and the preparation of objections to claims filed
       against their estates;

   (2) assist the Debtors in all aspects of the disposition of
       the Debtors' assets, including inventory, leasehold
       interests and other assets;

   (3) represent the Debtors at all hearings on matters
       pertaining to its affairs as debtors-in-possession; and

   (4) prepare on behalf of the Debtors, all necessary motions,
       applications, answers, orders, reports, and all other
       papers in connection with the administration of the
       their estates.

Jaspan will coordinate with the Debtors' primary counsel, Benesch,
Friedlander, Coplan & Aronoff, LLP, to avoid duplication of legal
services.

Jaspan's current customary hourly billing rates are:

         Partners                    $350
         Associates                  $250
         Paraprofessionals           $140

Frederick B. Rosner, Esq., billing $350 per hour, and Laurie
Schenker-Polleck, Esq., billing $250 per hour, are the principal
attorneys who'll work on A.B. Dick's cases.  

Headquartered at Niles, Illinois, A.B. Dick Company and its debtor
affiliates and subsidiaries -- http://www.abdick.com/-- are  
presently leading global suppliers to the graphic arts and
printing industry, manufacturing and marketing equipment and
supplies for the global quick print and small commercial printing
markets.   The Debtors filed for Chapter 11 protection on July 13,
2004 (Bankr. Del. Case No. 04-12002).  Frederick B. Rosner, Esq.,
at Jaspen Schlesinger Hoffman represents the Debtors in their
restructuring efforts.  The Debtors reported during its bankruptcy
filing that it holds an estimated $10 million to $50 million in
assets and more than $100 million in estimated debt.  


ABITIBI-CONSOLIDATED: Declares Dividend Payable on September 2
--------------------------------------------------------------
Abitibi-Consolidated Inc.'s (NYSE: ABY, TSX: A) Board of Directors
has approved a dividend payment to shareholders of record on
August 2, 2004, amounting to 2.5 cents per common share, payable
on September 2, 2004.

Abitibi-Consolidated is a global leader in newsprint and uncoated
groundwood (value-added groundwood) papers as well as a major
producer of wood products, generating sales of $5.4 billion in
2003. With over 15,000 employees, excluding PanAsia, the Company
does business in approximately 70 countries. Responsible for the
forest management of 17.5 million hectares, Abitibi-Consolidated
is committed to the sustainability of the natural resources in its
care. The Company is also the world's largest recycler of
newspapers and magazines, serving 17 metropolitan areas with more
than 11,200 Paper Retriever(R) collection points and 14 recycling
centres in Canada, the United States and the United Kingdom.
Abitibi-Consolidated owns or is a partner in 27 paper mills, 22
sawmills, 4 remanufacturing facilities and 1 engineered wood
facility in Canada, the U.S., the UK, South Korea, China and
Thailand.

                          *   *   *

As reported in the Troubled Company Reporter's June 15, 2004
edition, Standard & Poor's Ratings Services assigned its 'BB'
rating to Montreal, Quebec-based Abitibi-Consolidated Co. of
Canada's US$200  million floating rate notes due 2011, and US$200
million 7.75% notes due 2011. The notes are unconditionally
guaranteed by Abitibi-Consolidated Inc. At the same time, Standard
& Poor's affirmed its 'BB' long-term corporate credit rating on
Abitibi. The outlook is negative.

"The note issue modestly improves Abitibi's liquidity and maturity
profile, as it increases availability under the company's
revolving credit facility and lengthens the debt repayment
schedule," said Standard & Poor's credit analyst Daniel Parker.
The ratings reflect Abitibi's high debt levels, heavy exposure to
cyclical commodity-oriented groundwood papers, and weak financial
performance in the wake of unfavorable industry conditions.

The negative outlook reflects the risks to the company of a
stronger Canadian dollar, a potential labor dispute if contracts
are not successfully renegotiated, and greater-than-expected
pressures from structural changes to the newsprint industry. Any
of these factors could further impair Abitibi's cash flow
protection. Abitibi could be challenged to average the targeted
EBITDA interest coverage of 4x and FFO to total debt of 20%
through the cycle. Failure to make progress toward these targets
in the near term will result in a downgrade.


ADELPHIA COMMS: Asks Court to Stay 144 Adversary Proceedings
------------------------------------------------------------
Paul Traub, Esq., at Traub Bonacquist & Fox, in New York, reports
that the Adelphia Communications Corporation Debtors diligently
obtained tolling agreements from 245 potential avoidance action
defendants, thus obviating the need to commence adversary
proceedings against these entities.  However, despite their
efforts, the ACOM Debtors still failed to secure acceptable
tolling agreements with numerous other potential avoidance action
defendants.

Before the passage of the applicable statute of limitation, the
ACOM Debtors commenced 144 Adversary Proceedings, hoping to
recover more than $500,000,000 of transfers.  The ACOM Debtors ask
the U.S. Bankruptcy Court for the Southern District of New York to
temporarily stay all activity in the 144 Adversary Proceedings.

A complete list of the 144 Adversary Proceedings is available at
no charge at http://bankrupt.com/misc/AvoidanceActionList.pdf

Pending the disposition of their request, the ACOM Debtors
deferred completing service of the complaints and related summons
to the defendants of the 144 Adversary Proceedings.  Based on the
correspondence exchanged during the tolling agreement
solicitation phase, the ACOM Debtors reasonably expect a deluge
of discovery and document requests as soon as service is
completed covering a broad range of issues.

According to Mr. Traub, imposing a stay on all proceedings in the
avoidance actions until the ACOM Debtors determine that it is
either necessary or prudent to prosecute the actions, or pending
further Court order, is entirely appropriate in the context of
ACOM's Chapter 11 cases.  Imposing the stay will save the estates
from the expense associated with, among other things, responding
to the numerous discovery requests.

Apart from the incalculable savings that the stay will yield, the
ACOM Debtors also believe that the stay will result in
administrative and other efficiencies in their Chapter 11 cases.

In the event the Court imposes the stay, the ACOM Debtors will
put in place appropriate safeguards for the Avoidance Action
Defendants:

    * The ACOM Debtors will serve the complaints and related
      summons, together with a copy of the subject stay order, on
      all Avoidance Action Defendants;

    * During the duration of the stay, all Avoidance Action
      Defendants would have their answer deadlines extended
      indefinitely, with the extension terminated only on the ACOM
      Debtors' delivery of a written notice advising the Avoidance
      Action Defendants of the termination of the stay and fixing
      a new answer deadline, which in no event will be less than
      30 days after service of the subject termination notice; and

    * During the duration of the stay, the ACOM Debtors will
      continue their efforts to evaluate potential available
      defenses and other matters relating to the Adversary
      Proceedings.  The ACOM Debtors would also use the hiatus to
      formulate a comprehensive, uniform series of discovery
      procedures to be employed in all Adversary Proceedings.

The ACOM Debtors assure the Court that no Avoidance Action
Defendant will be prejudiced by the imposition of the stay.  The
Defendants will:

     (i) be spared the necessity of defending the Adversary
         Proceedings until determined necessary or prudent by the
         ACOM Debtors; and

    (ii) benefit from the establishment of a comprehensive,
         uniform series of discovery procedures to be employed in
         all Adversary Proceedings.

Adelphia Communications Corporation and its more than 200
affiliates filed for Chapter 11 protection in the Southern
District of New York on June 25, 2002.  Those cases are jointly
administered under case number 02-41729. Willkie Farr & Gallagher
represents the ACOM Debtors. (Adelphia Bankruptcy News, Issue No.
64; Bankruptcy Creditors' Service, Inc., 215/945-7000)


ADVANTA CORP: Fitch Revises Rating Outlook to Positive
------------------------------------------------------
Fitch Ratings has revised the Rating Outlook on Advanta Corp. to
Positive from Stable and affirmed the long-term rating of 'B+'. In
conjunction with this action, Fitch has assigned new ratings to
Advanta Bank Corp. and has affirmed and withdrawn ratings on
Advanta National Bank. A detailed list of affected ratings is
available at the end of this release.

The affirmation and Outlook revision recognize the improvement in
Advanta's core operating performance, which if sustained, could
result in a future upgrade of the company's ratings. Since
refocusing the company on small business credit card lending,
Advanta has been able to achieve stable and improving core-
operating results. This improvement can be attributed to Advanta's
conscious effort to target more creditworthy customers, which has
resulted in lower credit losses on both a coincident and lagged
basis. Fitch also views Advanta's capital levels as solid at the
current rating level with an expectation that the company will
maintain sound risk-adjusted capitalization. While Advanta has
established a solid niche in small business credit card lending,
Fitch does expect the competitive environment will become more
intense in this business segment. Advanta's ability to maintain
its business focus and further improve its financial profile will
be partly determined by its ability to appropriately adjust to the
changes in the competitive environment.

Fitch remains concerned with Advanta's outstanding litigation with
J.P. Morgan Chase surrounding the sale Advanta's mortgage business
in February 2001. While the outcome of this lawsuit remains
uncertain, Fitch believes that even an adverse outcome would be
manageable from both a capital and liquidity perspective within
the current ratings.

Fitch is encouraged that Advanta has taken steps to improve the
structure of its corporate governance framework. Changes such as
adopting new charters for board level committees and comprising
audit, compensation and nominating committees solely of
independent directors move Advanta toward establishing standards
that are more consistent with industry norms. While corporate
governance is not currently viewed as a restraint on Advanta's
ratings or preventing consideration of an upgrade, Fitch would
expect to see additional enhancements in corporate governance
structure and evidence that the framework produces functionality
that provides benefits to its stakeholders before more meaningful
changes in ratings would be considered.


     Ratings affirmed with Positive Outlook

          Advanta Corp.

                    --Senior debt 'B+';
                    --Short-term 'B'.

          Advanta Capital Trust I

                    --Trust preferred stock 'B-'.

     Ratings assigned with Positive Outlook

          Advanta Bank Corp.

                    --Long-term deposits 'BB-';
                    --Senior debt 'B+';
                    --Short-term 'B'.

     Ratings affirmed and withdrawn

          Advanta National Bank

                    --Long-term deposits 'BB-';
                    --Senior debt 'B+';
                    --Subordinated debt 'B';
                    --Short-term 'B'.


AIR CANADA JAZZ: Discloses New Senior Executive Appointments
------------------------------------------------------------
Joseph D. Randell, President and Chief Executive Officer of Air
Canada Jazz, announced executive appointments which are effective
August 1, 2004.

"Our focus during our restructuring process has been to strengthen
Jazz and make it a significant competitor in the North American
market," said Joseph Randell. "Major milestones like the expansion
of our regional jet fleet, our emergence from CCAA and the
probability of outside investment makes this the right time to
proceed to the next step in Jazz's development. To ensure
continued success, we are enhancing our leadership team."

             Mr. Bill Bredt, Senior Vice President
               and Chief Operating Officer     

Mr. Bredt has held many senior leadership positions within the Air
Canada organization. He most recently served as Vice President,
Network and Revenue Management at Air Canada until he was
appointed as President of ZIP Air Inc. last April.

             Mr. Allan Rowe, Senior Vice President
                and Chief Financial Officer     

Mr. Rowe has significant experience as a senior financial
executive and has a solid track record of achievement in
multibillion-dollar publicly traded companies. Mr. Rowe recently
held the position of Chief Financial Officer with Fishery Products
International Limited. Prior to this period, Mr. Rowe served
in various senior executive roles, including Executive Vice
President and Chief Financial Officer, with the Empire Company
Inc. (Sobeys Corporation).

              Mr. Scott Tapson, Vice President,
                   Customer Experience

Mr. Tapson has held many senior positions within the former
regional carriers of AirBC and Air Ontario. Mr. Tapson's in-depth
knowledge of the aviation industry made him a key contributor to
the integration of the four regional carriers that created Air
Canada Jazz. Mr. Tapson recently held the position of Vice
President, Operations and Customer Service with Air Canada Jazz.
     
                Ms. Jolene Mahody, Vice President,
                     Corporate Strategy

Ms. Mahody began with Air Nova in her role as Finance Controller,
and has held various Director level positions within Jazz
including Director, Finance, Director Six Sigma and her most
recently held position of Director, Commercial and Resource
Planning.
    
                   Mr. Colin Copp, Vice President,
                       Employee Relations

Mr. Copp held several key roles at AirBC such as Manager, Flight
Dispatch and Regulatory Affairs, Director, Operations, and Vice
President, Flight Operations. At Air Canada Jazz, Colin held the
position of Director, Flight Operations, Vice President Labor
Relations and Corporate Safety, and then during the downsizing
associated with the CCAA process, Colin accepted the position of
Director, Labour Relations.

Headquartered in Saint-Laurent, Quebec Canada, Air Canada --
http://www.aircanada.ca/-- represents Canada's only major  
domestic and international network airline, providing scheduled
and charter air transportation for passengers and cargo. The
Company filed for CCAA protection on April 1, 2003 (Ontario
Superior Court of Justice, Case No. 03-4932) and Section 304
petition with the U.S. Bankruptcy Court for the Southern District
of New York (Case No. 03-11971).  Matthew A. Feldman, Esq., and
Elizabeth Crispino, Esq., at Willkie Farr & Gallagher serve as the
Debtors' U.S. Counsel.  When the Debtors filed for protection from
its creditors, they listed C$7,816,000,000 in assets and
C$9,704,000,000 in liabilities.


AK STEEL CORP: S&P Revises Outlook to Stable from Negative
----------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
integrated steel producer AK Steel Corp. to stable from negative.

Standard & Poor's also affirmed its 'B+' corporate credit and
senior unsecured debt ratings on the company and its parent, AK
Steel Holding Corp. The Middleton, Ohio-based company has about
$1.3 billion in total debt.

"The outlook revision reflects the expectation that improved steel
industry conditions will remain sustainable well into 2005, which,
together with management actions to reduce financial risk, have
somewhat reduced pressures on the company as it seeks to
renegotiate with its large unions," said Standard & Poor's credit
analyst Paul Vastola. Although Standard & Poor's remains concerned
that union issues are still in flux at AK Steel, these
improvements have reduced the likelihood that management
could be pressured to take more drastic actions to close a gap
with its peers, most of whom have substantially improved their
financial profiles by shedding onerous legacy liabilities in
bankruptcy.

The ratings on AK Steel reflect its challenged business position
due to its relatively small and high-cost position as an
integrated steelmaker; its limited diversity and high exposure to
the automotive market; its challenge to offset rapidly escalating
input costs under its fixed-price contracts; and burdensome legacy
costs. These factors overshadow the company's good position in its
markets, its high concentration of value-added products and its
fair liquidity.

AK Steel is a manufacturer of flat-rolled carbon, stainless, and
electrical steel that competes in cyclical, capital-intensive
markets.


AMERICAN ENERGY: Retains Investor Relations & Corporate Dev't Firm
------------------------------------------------------------------
American Energy Production, Inc. (OTCBB:AMEP) retained Consulting
For Strategic Growth 1, Ltd. (CFSG), of New York City, an investor
relations and corporate development consulting firm, to coordinate
the company's corporate and investor communications.

"We look forward to working together with CFSG because of their
understanding of early stage public companies. CFSG has an
outstanding track record of working side-by-side with new and
emerging public companies. Our relationship with CFSG is a perfect
fit for both our short and long term objectives," said Charles
Bitters, Chief Executive Officer of AMEP.

Gerald Franz, President of CFSG stated, "We are excited by the
market opportunity addressed by the AMEP conversations with senior
management and a review of the business plan, we are now convinced
that AMEP has the knowledge and specialty products to become a
full success."

              About American Energy Production, Inc.  

American Energy Production, Inc. -- March 31, 2004 balance sheet  
shows a stockholders' deficit of $350,914 -- is an oil and gas  
lease acquisition company. The Company will specialize in  
acquiring oil and gas leases that have potential for increased oil  
and natural gas production utilizing new technologies, well work-
overs and fracture stimulation systems. American Energy  
Production, Inc. will acquire oil and gas leases that have proven  
reserves. The Company will initiate developmental drilling  
programs to drill new wells on these leases and, if successful,  
will add oil and gas reserves to the acquired property. American  
Energy Production, Inc. is involved in three areas of oil and gas  
operations: Leasing Programs, Production Acquisitions and Drilling  
with new technologies. American Energy Production, Inc.'s main  
objective is to find oil and gas leases with upside potential for  
enhanced production. The Company does this by utilizing the  
following rules: 1) leases, 2) geology, 3) engineering and 4)  
mapping from 3-D seismic.

                          *   *   *

                  Going Concern Uncertainty

In its Form 10-Q for the quarterly period ended March 31, 2004  
filed with the Securities and Exchange Commission, American Energy  
Production, Inc. reports:
          
"As reflected in the accompanying financial statements, the  
Company has a net loss of $3,011,680 and net cash used in  
operations of $215,696 for the three months ended March 31, 2004  
and a working capital deficiency of $336,687, deficit accumulated  
during the development stage of $4,722,074 and a stockholders'  
deficiency of $350,914 at March 31, 2004. The Company is also in  
default on certain notes to banks and is in the development stage  
with minimal revenues. The ability of the Company to continue as a  
going concern is dependent on the Company's ability to further  
implement its business plan, raise capital, and generate revenues.  
The financial statements do not include any adjustments that might  
be necessary if the Company is unable to continue as a going  
concern.  

"The time required for us to become profitable is highly  
uncertain, and we cannot assure you that we will achieve or  
sustain profitability or generate sufficient cash flow from  
operations to meet our planned capital expenditures, working  
capital and debt service requirements. If required, our ability to  
obtain additional financing from other sources also depends on  
many factors beyond our control, including the state of the  
capital markets and the prospects for our business. The necessary  
additional financing may not be available to us or may be  
available only on terms that would result in further dilution to  
the current owners of our common stock.  

"We cannot assure you that we will generate sufficient cash flow  
from operations or obtain additional financing to meet scheduled  
debt payments and financial covenants. If we fail to make any  
required payment under the agreements and related documents  
governing our indebtedness or fail to comply with the financial  
and operating covenants contained in them, we would be in default.  
The financial statements do not include any adjustments to reflect  
the possible effects on recoverability and classification of  
assets or the amounts and classification of liabilities which may  
result from the inability of the Company to continue as a going  
concern."


AMERICAN STEAMSHIP: S&P Lowers Counterparty Credit Rating to BB+
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty credit
and financial strength ratings on American Steamship Owners Mutual
P&I Assn. Inc. to 'BB+' from 'BBB-' and then removed the ratings
from CreditWatch.
     
The outlook is stable.

"The downgrade reflects the company's recent operating
performance, which was below Standard & Poor's expectations," said
Standard & Poor's credit analyst Jason Jones. "Results on policy
years 2001 and 2002 deteriorated in 2003, resulting in substantial
underwriting losses before the beneficial effects of unscheduled
supplementary calls that were made in June 2004." The ability of
American Club to make unscheduled calls lends some strength to its
capitalization and enabled it to prevent erosion of capital in
2003; however, American Club has recently been over-reliant on
this mechanism.

The company's growth strategy in recent years has the potential to
improve American Club's competitive position in time, but also
increases risk in the interim due to high operating leverage and
the difficulties of developing infrastructure suitable for a
company of larger scale. The recent delay in providing year-end
2003 financials that due to technical problems when new IT systems
were implemented illustrates this.

Standard & Poor's expects American Club to demonstrate improved
operating performance based on maintenance of the modest profit so
far on policy year 2003 and reasonable prospects for improvement
in policy year 2004.

The rating on American Club was placed on CreditWatch with
negative implications on May 4, 2004, due to the delay of 2003
financial statements caused by implementation difficulties from
the Club's new IT system. The Club has made substantial progress
toward correcting the situation. American Club has now filed year-
end 2003 statutory financials and has provided Standard & Poor's
with draft GAAP financials.

Although statutory financials show the Club's risk-based
capitalization to be slightly below authorized control levels,
Standard & Poor's believes year-end 2003 GAAP capitalization will
be substantially higher than statutory surplus because GAAP
accounting allows the full amount of assessments announced in June
2004 to be booked in 2003--unlike statutory accounting. The Club
is expected to substantially improve its statutory capitalization
by year-end 2004, as revenue from the June 2004 supplemental call
becomes recognized in statutory revenue and as improved operating
performance helps to build retained earnings.


AMERICAN WAGERING: Bankr. Judge Stalls Chapter 11 Plan Progress
---------------------------------------------------------------
On July 25, 2003, American Wagering, Inc. and its wholly owned
subsidiary, Leroy's Horse and Sports Place, Inc., filed voluntary
petitions for relief under Chapter 11 of the United States
Bankruptcy Code (Bankr. Case No. 03-52529) in the United States
Bankruptcy Court for the District of Nevada, Northern Division in
Reno, Nevada.  

                     Chapter 11 Plan Progress

On February 20, 2004, the Debtors filed a Plan of Reorganization
and a Disclosure Statement explaining their with the Bankruptcy
Court.  Bankruptcy Court approval of the applicable Disclosure
Statement relating to the Plan was required in order for the Plan
to be submitted to impaired creditors and stockholders for
approval. On April 8, 2004, the Bankruptcy Court considered the
Debtors motion to approve the Disclosure Statement and Plan, and
to begin soliciting acceptances of the Plan; the Bankruptcy Court
approved the Debtors motion but determined that a competing plan
could also be filed.  On April 14, 2004, the Debtors filed an
Amended Plan and an Amended Disclosure Statement in order to
mitigate the effects of any competing plan of reorganization that
might be submitted by other parties-in-interest.  Copies of the
Amended Plan and Amended Disclosure Statement are annexed to the
Company's Annual Report for the fiscal year ending January 31,
2004, filed with the Securities and Exchange Commission and
available at no charge at:

   http://www.sec.gov/Archives/edgar/data/1005214/000125529404000141/mainbody.htm

                      Exclusivity Terminated

On April 22, 2004, the Bankruptcy Court denied the Debtors'
request to preserve their exclusive rights granted under 11 U.S.C.
Sec. 1121 to file and solicit acceptances of their Plan.  The
Bankruptcy Court based its ruling on a representation from a
party-in-interest that a competing plan of reorganization and
accompanying disclosure statement would be filed.  The decision of
the Bankruptcy Court will continue to allow competing plans of
reorganization to be filed.  The Debtors have taken an appeal from
the Bankruptcy Court's decision to the Ninth Circuit Bankruptcy
Appellate Panel.  

The Bankruptcy Court has not set any date to consider confirmation
of the Debtors' Amended Plan.  No competing plan has appeared at
the Bankruptcy Court to date.  

                  The Debtors' Business Strategy

American Wagering, Inc.'s core businesses are:

    * operating race and sports books through Leroy's;

    * developing, selling and maintaining race and sports books
      systems through Computerized  Bookmaking  Systems, Inc.
      ("CBS"); and

    * leasing self-service wagering kiosks through AWI
      Manufacturing, Inc. ("AWIM").

The Company intends to continue these businesses.  

The self-service sports wagering kiosk allows the Company to
operate profitably in smaller casinos where labor costs have been
prohibitive and to achieve improved efficiency at larger casinos.
The Company is also developing a non-gaming version of the kiosk
that it anticipates will be ready in this fiscal year ending
January 31, 2005.

In preparation for the kiosk operations, AWI Keno, Inc., a
subsidiary of the Company, was renamed AWI Manufacturing, Inc. and
Mega$ports, Inc., a subsidiary of CBS, was renamed Contest Sports
Systems, Inc.  Kiosk operations will be accounted for under either
AWIM or CSS depending on whether the particular kiosk is the
gaming or non-gaming version.

The Company will continue to explore possible new locations for
sports and race book facilities, including foreign jurisdictions.
It will also continue its review of existing locations in order to
close those locations that are not operating efficiently. Based on
its strategy, the number of sports and race books operated by
Leroy's may decrease in the future due to the closures of
unprofitable locations, host properties, or other factors beyond
Company control or increase due to the opening of new locations
with greater potential for profitability. There is no assurance
that the Company will be able to add new locations and/or that any
new locations added will be profitable.

                Liquidity and Capital Resources

Management believes that the Company will be able to satisfy its
operating cash requirements for at least the next 12 months from
existing cash balances and anticipated cash flows assuming
resolution of:

     * a $1.3 million claim asserted by Michael Racusin arising
       from a judgment he obtained in jury trial; and

     * a $1.2 million claim asserted by Las Vegas Gaming, Inc.,
       ("LVGI") pursuant to a Feb. 23, 2004, Settlement Agreement;

under the terms of the Amended Plan.  The Company plans to
accumulate cash liquidity during this current year ended fiscal
2005 to fund the purchase of kiosks, possible effects of
litigation, seasonality of sports betting, timing of system sales,
and the possible effects of legislation to ban wagering on amateur
athletic events. The Company has possible negative cash flow
exposures due primarily to the Racusin and LVGI judgments. A final
claim in the Racusin matter significantly in excess of amount
accrued could have a significant negative impact on the Company's
existing cash balances and anticipated cash flows. The final claim
in the Racusin matter could be determined within the next twelve
months and is material to the financial viability of the Company.

The Company has minimum cash flow from operations and exposures
due to the claims against the Company resulting from two lawsuits
referred herein as the Racusin case and the LVGI case and the
Chapter 11 Cases.

The ultimate disposition and payment of the Racusin claim and the
LVGI claim will be determined in the Chapter 11 cases. Payment of
claims at accrued amounts and final claims significantly in excess
of amounts accrued could have a significant negative impact on the
Company's existing cash balances, anticipated cash flows and
ability to continue as a going concern. For these reasons, the
Company's independent auditors, Piercy Bowler Taylor and Kern,
have indicated in their report dated April 15, 2004, included in
the 10-KSB for the fiscal year ended January 31, 2004, that they
had substantial doubt as to the Company's ability to continue as a
going concern.

Thomas H. Fell, Esq., at Gordon & Silver, Ltd., in Las Vegas,
represents the Debtors in their chapter 11 restructuring.  


APPLIED DIGITAL: Shareholders Meet Tomorrow in Delray Beach, Fla.
-----------------------------------------------------------------
The Annual Meeting of Shareholders of Applied Digital Solutions,
Inc., which will be held on July 24, 2004, at 9:00 a.m., Eastern
Daylight Savings Time, at the Delray Beach Marriott Hotel, 10
North Ocean Boulevard, Delray Beach, Florida 33483.
    
Shareholders will consider:

   1.  Election of two directors to hold office until the 2007
       Annual Meeting of Shareholders and ratification of the
       appointment of one director to hold office until the 2006
       Annual Meeting of Shareholders and until their successors
       have been duly elected and qualified;

   2.  Ratification of the appointment of Eisner LLP as
       independent auditors of the Company for the year ended
       December 31, 2004;

   3.  Approval of an amendment of the Company's 2003 Flexible
       Stock Plan to increase the number of authorized shares of
       common stock issuable under the plan from 1,400,000 to
       2,600,000 shares;

   4.  Ratification of options granted to a new director of the
       Company; and

   5.  To transact such other business as may properly come before
       the Meeting or at any adjournment thereof.

The Board of Directors has fixed the close of business on May 28,
2004 as the record date for the determination of shareholders
entitled to receive notice of the meeting and vote, or exercise
voting rights through a voting trust, as the case may be, at the
meeting and any adjournments or postponements of the meeting.

                          *   *   *

In its Form 10-K for the fiscal year ended December 31, 2003 filed
with the Securities and Exchange Commission, Applied Digital
Solutions, Inc., reports:

"We are a Missouri corporation and were incorporated on May 11,
1993.  Our business has evolved during the past few years. We grew
significantly through acquisitions and since 1996 have completed
51 acquisitions. During the last half of 2001 and during 2002, we
sold or closed many of the businesses we had acquired that we
believed did not enhance our strategy of becoming an advanced
technology development company. These companies were primarily
telephone system providers, software developers, software
consultants, networking integrators, computer hardware suppliers
or were engaged in other businesses or had customer bases that we
believed did not promote or complement our current business
strategy.  As of December 31, 2003, our business operations
consisted of the operations of five wholly-owned subsidiaries,
which we collectively refer to as the Advanced Technology
segment, and two majority-owned subsidiaries, Digital Angel
Corporation (AMEX:DOC), and InfoTech USA, Inc. (OTC:IFTH)
(formerly SysComm International Corporation).  As of December 31,
2003, we owned approximately 66.9% of Digital Angel Corporation
and 52.5% of InfoTech USA, Inc.

"Historically we have suffered losses and have not generated
positive cash flows from operations.  Excluding the effects of a
gain on the extinguishment of debt of $70.1 million, we incurred a
consolidated loss from continuing operations of $66.5 million for
the year ended December 31, 2003.  We incurred consolidated losses
from continuing operations of $113.9 million and $188.6 million,
respectively, for the years ended December 31, 2002 and 2001, and
as of December 31, 2003, we had an accumulated deficit of $413.9
million. Our consolidated operating activities used cash of $11.4
million, $3.9 million and $18 million during 2003, 2002 and 2001,
respectively. Digital Angel Corporation has suffered losses and
has not generated positive cash flows from operations.  Digital
Angel Corporation incurred losses during 2003, 2002 and 2001,
which are presented below.  In addition, its operating activities
used cash of $4.7 million, $2.7 million and $3.2 million during
2003, 2002 and 2001, respectively.

"The reduced settlement payment of our debt obligations to IBM
Credit LLC, the conversion to equity of our obligations under
our 8.5% Convertible Exchangeable Debentures, and the sale of
3 million shares of our common stock under our 3 million share
offering, have been major factors mitigating concerns that existed
about our ability to continue as a going concern. Our
profitability and liquidity depend on many factors including the
success of our marketing programs, the maintenance and reduction
of expenses and our ability to successfully develop and bring to
market our new products and technologies. We have established a
management plan intending to guide us in achieving profitability
and positive cash flows over the twelve months ending December
31, 2003, however, no assurance can be given that such plan will
be realized."


AQUILA: S&P Revises CCC+ Corp. Credit Rating to Watch Developing
----------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'CCC+' corporate
credit rating on Aquila Inc. remains on CreditWatch, but that it
is revising the CreditWatch implications to developing from
negative. The rating action follows Aquila's announcement that it
has initiated the termination process of three prepaid natural gas
supply contracts in its unregulated business portfolio. The
CreditWatch developing listing indicates that ratings may be
raised, lowered, or affirmed.

Kansas City, Missouri-based energy provider Aquila has about $2.7
billion of debt.

"The revision of the CreditWatch listing to developing from
negative reflects the potential for a ratings upgrade depending on
the success of Aquila's efforts to settle disputes related to
surety bonds with Chubb Corp., St. Paul Travelers Cos Inc., and
the successful termination of prepaid gas contracts to municipal
utilities in Nebraska and Mississippi," noted Standard & Poor's
credit analyst Rajeev Sharma. However, the developing implications
also reflect the pending status of the successful termination of
the prepay contracts. "Without the successful termination of these
gas prepay obligations, ratings remain vulnerable," he continued.

Aquila has agreed to pay $485 million to Chubb and $90 million to
St. Paul Travelers to settle disputes related to surety bonds
covering four prepaid natural gas supply contracts. The settlement
further requires that Aquila will provide $25 million in support
of the surety bond executed by St. Paul Travelers on another
contract and take additional actions in the coming months to
support the remaining position under this bond.

Due to weak cash flow generation from operations, asset sales have
been necessary for Aquila to reduce its debt levels and shore up
its balance sheet. Management has executed more than $3.3 billion
of asset sales over the past two years. Still, cash flow
generation relative to total debt will remain weak and not exceed
10% in the near term.

Standard & Poor's will resolve the CreditWatch listing following a
meeting with the management of Aquila and a full review of the
company's financial profile.


ARMSTRONG HOLDINGS: Plans to Sell Wave Facility to Marine Venture
-----------------------------------------------------------------
Armstrong Holdings, Inc., and its debtor-affiliates, propose to
sell, free and clear of liens, claims and encumbrances, their
interest in the land located at 5301 North Point Boulevard in
Baltimore County, Maryland, to Marine Venture Properties, LLC, a
Maryland limited liability company, and pay a 6% commission to CB
Richard Ellis, as real estate broker, out of the sales proceeds.

                            The Property

AWI purchased the property in November 1985 for the purpose of
building a manufacturing facility.  The property is comprised of:

        (1) 10.43 acres of land that contains a 114,000-square
            foot manufacturing facility and other improvements;
            and

        (2) a 6.56-acre vacant lot located at the north end.

The vacant property has never been used or leased by AWI.  The
improved property is currently leased by AWI to Worthington
Armstrong Venture, a joint venture owned by AWI and Worthington
Industries, Inc.  Wave has outgrown the facility and consequently
did not renew the lease on the improved property.  The lease will
terminate in the fourth quarter of 2004.

In January 2004, AWI concluded that it did not anticipate any
future need for the property and determined to sell it.  
Accordingly, in March 2004, AWI employed CB Richard Ellis to
provide brokerage services in connection with the sale of the
property.

Headquartered in Lancaster, Pennsylvania, Armstrong World
Industries, Inc. -- http://www.armstrong.com/-- the major  
operating subsidiary of Armstrong Holdings, Inc., designs,
manufactures and sells interior finishings, most notably floor
coverings and ceiling systems, around the world.  The Company
filed for chapter 11 protection on December 6, 2000 (Bankr. Del.
Case No. 00-04469).  Stephen Karotkin, Esq., Weil, Gotshal &
Manges LLP and Russell C. Silberglied, Esq., at Richards, Layton &
Finger, P.A., represent the Debtors in in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they listed $4,032,200,000 in total assets and
$3,296,900,000 in liabilities. (Armstrong Bankruptcy News, Issue
No. 64; Bankruptcy Creditors' Service, Inc., 215/945-7000)   


ATMI INC: Second Quarter 2004 Net Income Nears $8 Million
---------------------------------------------------------
ATMI, Inc. (Nasdaq: ATMI), a supplier of materials and materials
packaging to the world's leading semiconductor manufacturers,
reported revenues of $61.0 million for the second quarter of 2004,
an increase of 52.5% from $40.0 million in the second quarter of
2003, and an increase of 8.9% over $56.0 million in the first
quarter of 2004.

Continuing operations in the second quarter generated income of
$5.8 million. In the second quarter of 2003, income from
continuing operations was $0.1 million including a $2.2 million
pre-tax asset impairment charge related to the Company's strategic
investment portfolio and a $0.4 million charge related to
transitioning product lines to a new manufacturing facility. In
the first quarter of 2004, continuing operations generated income
of $4.0 million.

Overall, net income for the second quarter was $7.9 million, which
includes $0.06 per diluted share from the performance of
discontinued operations, and a gain of $0.01 per diluted share
from sale of the life safety systems and fab services operations
that closed during the quarter. For the second quarter of 2003,
net loss was $2.8 million, or $0.09 per diluted share, which
included a loss of $0.09 per diluted share from discontinued
operations. Net income for the first quarter of 2004 was $6.1
million, or $0.19 per diluted share, including $0.04 per diluted
share from the performance of discontinued operations and a gain
of $0.03 per diluted share related to the sale of the gallium
nitride business.

For the six months ended June 30, revenue from continuing
operations totaled $117.0 million, an increase of 51.9% compared
with $77.0 million for the first half of 2003. Income from
continuing operations was $9.8 million compared with $1.0 million
in the same period last year. Overall net income for the first six
months of 2004 was $14.0 million which includes $0.09 per diluted
share from the performance of discontinued operations, and a gain
of $0.04 per diluted share from sale of three of the six
discontinued operations.

Gene Banucci, ATMI Chairman and Chief Executive Officer, said,
"The semiconductor industry continues to increase production of
wafers with a second quarter sequential increase of approximately
4% worldwide. This is again slightly higher than ATMI's
projections and as a result our revenues continued to ramp
aggressively for the third consecutive quarter. It is our
expectation that wafer starts will continue to grow in the third
quarter, but at a moderated pace."

Doug Neugold, ATMI President and Chief Operating Officer, said,
"This quarter, our copper businesses continued to perform well and
we again achieved strong results in our implant materials and
photoresist packaging products. At Semicon West, we introduced
several new products and process efficiency solutions in which
customers expressed a high level of interest, especially SDS3.
Looking forward, we see no slowdown in the pace of technology
development. Given our recent qualifications and joint development
activities at the 65 nm technology node, we are well positioned to
capture future generation advanced interconnect opportunities."

Dan Sharkey, ATMI Chief Financial Officer, said, "The second
quarter stood out because of record sales of sub-atmospheric gas
storage and delivery products, and equally strong flat panel
display demand for our materials packaging products. Combined with
the resolution of our first quarter expedited delivery issues,
this had the expected effect of increasing gross margins to above
50%. On the divestiture front, the second quarter was very busy
with deals completed for the sale of our life safety system
business, our fab services business, and our epitaxial services
business, which closed on July 19th. We are presently engaged in
active discussions with multiple parties concerning our remaining
discontinued operations, our abatement systems business and our
Emosyn smart card venture. We believe we are still on track to
have divested all 6 discontinued operations before the end of
2004."

ATMI provides specialty materials and materials packaging to the
worldwide semiconductor industry. As the Source of Semiconductor
Process Efficiency, ATMI helps customers improve wafer yields and
lower operating costs. For more information, please visit  
http://www.atmi.com/

                         *   *   *

                  Liquidity and Capital Resources  

In its Form 10-Q for the quarterly period ended March 31, 2004,  
filed with the Securities and Exchange Commission, ATMI, Inc.  
reports:

"The Company finances its activities principally through cash from
operations, the sale of equity, the issuance of convertible debt
securities and various lease and debt instruments. All of the
assets and liabilities associated with the discontinued operations
are classified as held for sale in the consolidated balance
sheets. The Company's working capital increased to $254.5 million
at March 31, 2004 from $244.9 million at December 31, 2003,
primarily as a result of increased accounts receivable and  
inventory balances associated with the increased sales in the  
First Quarter-2004.

"ATMI believes that the Company's existing cash and cash
equivalents and marketable securities balances, existing sources
of liquidity, available lines of credit and anticipated proceeds
from disposal of assets and liabilities held for sale will satisfy
the Company's projected working capital and other cash
requirements through at least the end of 2004. However, management
also believes the level of financing resources available to ATMI
is an important competitive factor in its industry, and management
may seek additional capital prior to the end of that period.
Additionally, management considers, on a continuing basis,
potential acquisitions of strategic technologies and businesses
complementary to ATMI's current business. There are no present
definitive agreements with respect to any such acquisitions.
However, any such transactions may affect ATMI's future capital
needs. In addition, the activities the Company is currently
undertaking to exit non-core businesses and reduce its exposure to
the cyclical capital equipment spending environment may generate
additional sources of liquidity and also affect ATMI's future
capital needs."


BANC OF AMERICA: Fitch Affirms 8 Classes' Low-B Ratings
-------------------------------------------------------
Fitch Ratings affirms Banc of America Securities LLC's commercial
mortgage pass-through certificates, series 2003-1, as follows:
          
               --$327.7 million class A-1 'AAA';
               --$506.2 million class A-2 'AAA';
               --$34.9 million class B 'AA';
               --$12.9 million class C 'AA-';
               --$24.5 million class D 'A';
               --$11.6 million class E 'A-';
               --$11.6 million class F 'BBB+';
               --$11.6 million class G 'BBB';
               --$10.3 million class H 'BBB-';
               --$21.9 million class J 'BB+';
               --$7.7 million class K 'BB';
               --$6.5 million class L 'BB-';
               --$6.5 million class M 'B+';
               --$5.2 million class N 'B';
               --$3.9 million class O 'B-';
               --$5.9 million class ES-A 'AA';
               --$4.3 million class ES-B 'AA-';
               --$4.6 million class ES-C 'A+';
               --$4.9 million class ES-D 'A';
               --$3.4 million class ES-E 'A-';
               --$3.4 million class ES-F 'BBB+';
               --$3.4 million class ES-G 'BBB';
               --$10.4 million class ES-H 'BBB-';
               --$1.3 million class SB-A 'BBB+';
               --$4.9 million class SB-B 'BBB';
               --$11.4 million class SB-C 'BBB-';
               --$3.6 million class SB-D 'BB+';
               --$7.7 million class SB-E 'BB'.
               
Fitch does not rate the $18.1 million class P, $17.1 million class
WB-A, $8.6 million class WB-B, $1.9 million class WB-C or $1.9
million class WB-D certificates.

The rating affirmations are the result of stable pool performance
and limited paydown since issuance. As of the June 2004
distribution date, the pool's aggregate certificate balance has
decreased 1.12% to $1,132.3 million from $1,125.7 million. To
date, there have been no loan payoffs or realized losses within
the transaction.

Fitch reviewed the credit assessments of the Emerald Square Mall
(12.7%), Sotheby's Building (11.5%) and the Wellbridge Portfolio
(2.9%) loans. Each credit assessed loan is divided into an A and a
B note. The A notes, which contribute to the pooled proceeds,
remain investment grade. The B-notes, which were structured as
stand alone rake classes, are affirmed for the Emerald Square and
the Sotheby's Building loans. Fitch does not rate the rake classes
for the Wellbridge Portfolio. The Fitch stressed DSCRs are based
on a stressed refinance constant using both the current pooled
balance (A), and the current whole loan (A+B).

The Emerald Square Mall is the largest loan in the pool. It is
secured by 563,715 square feet of retail space in North Attleboro,
MA. As of year end 2003, the Fitch stressed debt service coverage
ratio for the A-note has increased to 1.81 times (x) from 1.69x at
issuance. The Fitch stressed DSCR for the whole loan has increased
to 1.32x from 1.21x at issuance. Occupancy at YE 2003 was 94%.

Sotheby's Building is secured by a 406,110 sf. office building in
New York City, NY. As of YE 2003, the Fitch stressed DSCR for the
A-note has increased to 1.38x from 1.47x at issuance. The Fitch
stressed DSCR for the whole loan has increased to 1.19x from 1.14x
at issuance. Occupancy as of YE 2003 was 100%.

The Wellbridge portfolio is secured by high-end health and fitness
clubs in Minnesota and New Mexico totaling 1,649,751 sf. As of YE
2003, the Fitch stressed DSCR for the A-note has increased to
3.11x from 2.81x at issuance. The Fitch stressed DSCR for the
whole loan has increased to 2.05x from 1.86x at issuance.
Occupancy at YE 2003 was 99%. The A-note of this credit assessment
has been divided into two pari passu notes A1 ($25.5 million) and
A2 ($32.9 million). Although the Fitch stressed DSCR is calculated
using the whole A-note balance ($58.4 million), only A1 is held in
the trust.

Currently, there are no delinquent loans or loans in special
servicing.


BANK OF AMERICA: Fitch Affirms Low-B Ratings of 6 Classes
---------------------------------------------------------
Fitch Ratings affirms Bank of America-First Union commercial
mortgage pass-through certificates, series 2001-3 as follows:

               --$194.8 million class A-1 'AAA';
               --$608.6 million class A-2 'AAA';
               --$50.0 million class A-2F 'AAA';
               --Interest-only classes XC and XP AAA';
               --$42.6 million class B 'AA';
               --$17.1 million class C 'AA-';
               --$17.1 million class D 'A+';
               --$14.2 million class E 'A';
               --$17.1 million class F 'A-';
               --$17.1 million class G 'BBB+';
               --$14.2 million class H 'BBB';
               --$14.2 million class J 'BBB-';
               --$29.8 million class K 'BB+';
               --$8.5 million class L 'BB';
               --$8.5 million class M 'BB-';
               --$14.2 million class N 'B+';
               --$5.6 million class O 'B';
               --$5.6 million class P 'B-'.

Fitch does not rate $21.7 million class Q and the subordinate
component classes V-1, V-2, V-3, V-4, and V-5 certificates.

The rating affirmations reflect consistent performance of the pool
and limited paydown of the overall collateral balance. As of the
July 2004 distribution date the pool has paid down 3.14% to $1.10
billion from $1.13 billion at issuance.

Wachovia, the master servicer, has collected year-end 2003
financials for 88.5% of the loans in the pool. The YE 2003
comparable weighted debt service coverage ratio was 1.36 times
(x), a decrease from 1.52x at YE 2002. However, the YE 2003
performance has increased since the 1.34x DSCR reported at
issuance.

One loan (0.54%) is currently in special servicing. The loan is
secured by an apartment complex in Riverdale, GA, and the special
servicer is currently working with the borrower to stabilize the
property through a forbearance agreement.


BMC: Agrees to Sell Buckbee-Mears Assets to International Electron
------------------------------------------------------------------
BMC Industries, Inc. (Pink Sheets:BMMI), has entered into an
agreement to sell the assets of its Cortland, N.Y.-based Buckbee-
Mears aperture mask and medical stent businesses to International
Electron Devices (USA), LLC, a New York limited liability company.
Completion of the transaction is subject to approval of the
bankruptcy court in connection with BMC's reorganization under
Chapter 11 of the United States Bankruptcy Code and satisfaction
of certain closing conditions.

"This is an exciting opportunity for IED to participate in the
aperture mask industry utilizing some of the finest manufacturing
technology available in the world," said Sudhir Kaura, managing
director of IED. "Despite the recent success of alternative
display technologies, we see a significant opportunity to
participate in the continued growth of the CRT industry in the
developing regions of the world, especially India and China."

Mr. Kaura also stated, "Our management team looks forward to
working with local community organizations, vendors and customers
to reestablish the Cortland facility's previous business position.
In the future, we plan to develop other hi-tech photochemically
etched parts for automotive, medical and filtration applications."

IED has indicated that the company will continue to operate under
the trade name Buckbee-Mears, which carries global recognition as
a leader in the photochemical machining industry.

"Cortland County and the City of Cortland were pleased to work
with local management on this project," said Linda Hartsock,
executive director of the Cortland County Business Development
Corporation. "The BDC salutes the hard work of the local
management team that put this deal together. It's been a real team
effort, and we were happy to be part of the process. We look
forward to continuing to work together to put talented, hard-
working employees and a great facility back to work."

Previously, in December 2003, BMC announced that it would close
the Buckbee-Mears aperture mask business and sell the related
assets. BMC continues to operate its Vision-Ease Lens subsidiary.
BMC announced on June 23, 2004, that the company and its domestic
subsidiaries had filed voluntary petitions for relief under
Chapter 11 of the United States Bankruptcy Code in the U.S.
Bankruptcy Court for the District of Minnesota, and that BMC had
reached an agreement to sell the Vision-Ease Lens business.

As previously announced, BMC will use net proceeds from asset
sales to repay any outstanding debtor-in-possession financing and
a portion of the outstanding indebtedness under its senior secured
credit facility.

Headquartered in Ramsey, Minnesota, BMC Industries Inc. --
http://www.bmcind.com/-- is a multinational manufacturer and  
distributor of high-volume precision products in two business
segments, Optical Products and Buckbee Mears. The Company, along
with its affiliates, filed for chapter 11 protection (Bankr. D.
Minn. Lead Case No. 04-43515) on June 23, 2004. Clinton E. Cutler,
Esq., at Fredrikson & Byron, P.A., represents the Company in their
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed $105,253,000 in assets and $164,751,000
in liabilities.


C-BASS SECURITIZATIONS: Fitch Affirms Low-B Ratings of 3 Classes
----------------------------------------------------------------
Fitch Ratings has affirmed the following classes from two Credit
Based Asset Servicing and Securitization LLC issues:

          Series 1999-CB2 Group 1

               --Classes IA & IA-PO 'AAA';
               --Class IM-1 'AA';
               --Class IM-2 'A';
               --Class IM-3 'BBB';
               --Class IB-1 'BB';
               --Class IB-2 'B'.

          Series 1999-CB2 Group 2

               --Classes IIA-1 & IIA-2 'AAA';
               --Class IIM-1 'AA';
               --Class IIM-2 'A';
               --Class IIB-1 'BBB+';
               --Class IIB-2 'BBB-';
               --Class IIB-3 'BB'.

          Series 2000-CB3

               --Class A1-A 'AAA';
               --Class M-1 'AA';
               --Class M-2 'A';
               --Class B 'BBB'.

The affirmations on these classes reflect credit enhancement
consistent with future loss expectations. Fitch will continue to
closely monitor these bonds.


CANDESCENT TECH: Signs-Up Sonsini Goodrich as Corporate Counsel
---------------------------------------------------------------
Candescent Technologies Corporation wants to employ Sonsini
Goodrich & Rosati PC as its special corporate counsel.

The Debtor says Sonsini has particular expertise in corporate and
securities.  The Firm has also served as corporate and securities
counsel to the Company for approximately 13 years and is generally
familiar with the Company's history, business, and operations.

Sonsini Goodrich's will:

   a. advise the Debtor with respect to securities law and
      general corporate matters; and certain other matters as
      the Debtor and Firm deem appropriate, such as labor,
      commercial litigation, and/or tax matters; and

   b. advise the Debtor with respect to trademark, copyright,
      and related intellectual property matters, including the
      Sale.

The Debtor will monitor and manage the distribution of work among
their professionals to avoid any unnecessary duplication of
effort.

The Sonsini Goodrich attorneys that are currently expected to
perform these services are:

         Professional                  Billing Rate
         ------------                  ------------
         Daniel Weiser, Esq.           $460 per hour
         Michael Murphy, Esq.          $500 per hour
         Lawrence Venick, Esq.         $335 per hour

Headquartered in Los Gatos, California, Candescent Technologies
Corp. -- http://www.candescent.com/-- is a supplier of flat panel  
displays for notebook computers, communications and consumer
products.  The Company filed for chapter 11 protection on June 16,
2004 (Bankr. N.D. Calif. Case No. 04-53803).  Ramon Naguiat, Esq.,
at Pachulski, Stang, Ziehl, Young, Jones, & Weintraub, represents
the Debtor in its restructuring efforts.  When the Company filed
for protection from its creditors, it estimated debts and assets
of over $100 million each.


CATHOLIC CHURCH: Wants to Maintain Existing Investment Practices
----------------------------------------------------------------
Section 345(a) of the Bankruptcy Code authorizes deposits of
investments of money of estates so as to "yield the maximum
reasonable net return on such money, taking into account the
safety of such deposit or investment."

Section 345(b), on the other hand, provides that, with respect to
investments other than investments "insured or guaranteed by the
United States or by a department, agency, or instrumentality of
the United States or backed by the full faith and credit of the
United States," the estate, unless the court for cause orders
otherwise, must require a bond in favor of the United States
secured by the undertaking of a court-approved corporate surety
conditioned on, among other things, a proper accounting for and
prompt repayment of any money invested.

The Archdiocese of Portland in Oregon intends to use its
available cash to fund its Chapter 11 case and reorganization.

Susan S. Ford, Esq., at Sussman Shank LLP, in Portland, Oregon,
argues that investment of the Debtor's cash in strict compliance
with the requirements of Section 345(b) is inconsistent with the
mandate of Section 345(a).  The Debtor believes that as long as
investments are restricted in accordance with its current
practice, no corporate surety is necessary or required to afford
protection to creditors.

Under the Debtor's existing cash management practices, the Debtor
maintains cash in commercial bank accounts and a separate
investment account.  Substantially all of the cash in the
Debtor's bank accounts earn money market rates of interest or are
swept each night into the money market account that earns money
market rates of interest.  In addition, the Debtor maintains an
account that holds short-term investments like commercial paper,
government securities, repurchase agreements, auction rate
preferred stock, and money market funds rated by Standard and
Poor's at A1P1, and Government Securities rated by Standard &
Poor's at AAA or greater.

Section 345 was amended in 1994 to allow the bankruptcy courts to
approve investments other than those strictly permitted by
Section 345(b)(1) or (2).  Ms. Ford asserts that the continued
investment in accordance with the Debtor's historical practices
will provide the protection required by Section 345
notwithstanding the absence of a "corporate surety" requirement.  
Moreover, a bond secured by the undertaking of a corporate surety
would be unduly expensive, even if the bond were available, and
could off set much of the financial gain derived from investing
in private as well as federal or federally-guaranteed securities.
Therefore, Ms. Ford contends, cause exists to waive the
requirement of a bond or undertaking.

Hence, the Debtors seeks the authority of the U.S. Bankruptcy
Court for the District of Oregon to maintain existing investment
practices.

The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas
W. Stilley, Esq. and William N. Stiles, Esq. of Sussman Shank LLP
represent the debtor in its restructuring efforts. When the debtor
filed for chapter 11 protection, it listed estimated assets of
$10,000,000 to $50,000,000 and estimated debts of $25,000,000 to
$50,000,000. (Catholic Church Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


CE SOFTWARE: Reports Q1 Results & Proceeds with Liquidation Plan
----------------------------------------------------------------
CE Software, Inc. (OTC:CESF) reported results for its first
quarter ended December 31, 2003.

CE Software reports a net profit of $99,000 for its first quarter
of fiscal 2004 on revenues of $259,000. For the same quarter a
year ago, the company reported a net loss of $118,000 on operating
revenues of $345,000.

"Our net profit for the quarter was primarily the result of the
sale of one of our software products," said John S. Kirk,
president of CE Software, Inc. "On December 31, 2003 we sold our
QuickMail software product to Outspring Software. We announced
this sale on January 2, 2004."

John S. Kirk continued, "We are continuing to work on the proposed
liquidation that was discussed in our press release of April 13,
2004. The company's operations were sold on April 1, 2004 to
Startly Technologies, LLC, subject to shareholder approval. For
prior press releases, more information, and to ask questions, set
your Web browser to http://www3.cesoft.com/home/pressrelease-all.html
or write to CE Software, Inc., Shareholder Relations, P.O. Box
65580, W. Des Moines, IA 50265, and ask to be put on the
'shareholder news' mailing list. We have also set up a Web page
for shareholder questions and our responses."

CE Software, Inc., an Iowa corporation, develops computer software
products that enhance communications, connectivity and
productivity for businesses and home-based personal computer users
for both Windows and Macintosh operating systems.


CENTERPOINT ENERGY: Inks Pact to Sell Texas Genco for $3.65 Bil.
----------------------------------------------------------------
CenterPoint Energy, Inc. (NYSE: CNP) and Texas Genco Holdings,
Inc. (NYSE: TGN) signed a definitive agreement under which
GC Power Acquisition LLC, a newly formed entity owned in equal
parts by affiliates of The Blackstone Group, Hellman & Friedman
LLC, Kohlberg Kravis Roberts & Co. L.P. and Texas Pacific Group,
will acquire Texas Genco, a wholesale electric power generation
company, for approximately $3.65 billion in cash.  The agreement
includes a buy-out of Texas Genco's public shareholders.

The transaction, subject to customary regulatory approvals, will
be accomplished in two steps. The first step, expected to be
completed in the fourth quarter of 2004, involves Texas Genco's
purchase of the 19 percent of its shares owned by the public for
$47 per share, followed by GC Power Acquisition's purchase of a
Texas Genco unit that will be formed to own its coal, lignite and
gas-fired generation plants. In the second step of the
transaction, expected to take place in the first quarter of 2005
following receipt of approval by the Nuclear Regulatory
Commission, GC Power Acquisition will complete the acquisition of
Texas Genco, the principal remaining asset of which will then be
Texas Genco's interest in the South Texas Project nuclear
facility. Total cash proceeds to CenterPoint Energy from both
steps of the transaction will be approximately $2.9 billion for
its 81% interest in Texas Genco.

The transaction has been approved by the board of directors of
CenterPoint Energy and by the board of directors of Texas Genco
acting upon the unanimous recommendation of a special committee
composed of independent members of the Texas Genco Board.

"We believe that the sale of Texas Genco is beneficial for both
companies," said David M. McClanahan, president and chief
executive officer of CenterPoint Energy. "The sale enables
CenterPoint Energy to reduce its debt and concentrate on its
energy delivery businesses.

"I am also pleased that Texas Genco's new owner is backed by some
of today's strongest private equity investment firms, which should
allow it to build on the firm foundation that the management and
employees of Texas Genco have established over the years. Of
course it's hard for us at CenterPoint Energy to let go of a
business that has been a part of our company for so many years.
But under the plan we developed in response to the 1999 Texas
electric restructuring law, it is time for CenterPoint Energy to
take this step," said Mr. McClanahan.

The Blackstone Group, Hellman & Friedman LLC, Kohlberg Kravis
Roberts & Co. L.P. and Texas Pacific Group said in a statement:
"We have focused extensively on the energy sector and we are
excited to purchase Texas Genco, one of the nation's largest
independent electric generating companies. Through Texas Genco, we
are acquiring high quality coal, nuclear and gas power plants in
the rapidly growing Houston market. We look forward to joining
with the dedicated employees of a newly-independent Texas Genco to
continue to provide outstanding service to Texas Genco's customers
while developing the nation's premier independent power generation
business."

CenterPoint Energy was advised on the transaction by Citigroup
Global Markets Inc. and Baker Botts L.L.P., and the special
committee of independent directors of Texas Genco was advised by
RBC Capital Markets Corporation and Haynes and Boone, LLP. GC
Power Acquisition LLC was advised by Goldman Sachs, Deutsche Bank
and Morgan Stanley and the law firms Simpson Thacher & Bartlett
LLP, Stroock & Stroock & Lavan LLP and Vinson & Elkins LLP.

Texas Genco Holdings, Inc., based in Houston, Texas, is one of the
largest wholesale electric power generating companies in the
United States with over 14,000 megawatts of generation capacity.
It sells electric generation capacity, energy and ancillary
services in one of the nation's largest power markets, the
Electric Reliability Council of Texas (ERCOT). Texas Genco has one
of the most diversified generation portfolios in Texas, using
natural gas, oil, coal, lignite, and uranium fuels. The company
owns and operates 60 generating units at 11 electric power-
generating facilities and owns a 30.8 percent interest in a
nuclear generating plant. For more information, visit our web site
at http://www.txgenco.com/

The Blackstone Group, a private investment and advisory firm with
offices in New York, Atlanta, Boston, London and Hamburg, was
founded in 1985. The firm has raised a total of approximately $32
billion for alternative asset investing since its formation. Over
$14 billion of that has been for private equity investing,
including Blackstone Capital Partners IV, the largest
institutional private equity fund at $6.45 billion. Blackstone has
made private equity investments throughout the energy sector
including petroleum refining, oil and gas exploration and coal
mining. In addition to Private Equity Investing, The Blackstone
Group's core businesses are Private Real Estate Investing,
Corporate Debt Investing, Marketable Alternative Asset Management,
Corporate Advisory, and Restructuring and Reorganization Advisory.
For more information, visit http://www.blackstone.com/

Hellman & Friedman LLC is a San Francisco-based private equity
investment firm with additional offices in New York City and
London. Since its founding in 1984, the Firm has raised and
managed approximately $5 billion of committed capital and invested
in over 45 companies. Hellman & Friedman recently completed
raising its fifth fund, Hellman & Friedman Capital Partners V,
L.P., a $3.5 billion fund. Representative investments include Axel
Springer AG (ASV GR), ProSieben Sat.1 AG (PSM GR), Formula One
Holdings, Ltd, Arch Capital Group Limited (ACGL), the NASDAQ Stock
Market, Inc. (NDAQ), Young & Rubicam, Inc., Western Wireless
Corporation (WWCA), Franklin Resources, Inc. (BEN), and others.
For more information, visit http://www.hf.com/

Kohlberg Kravis Roberts & Co. L.P. is one of the world's oldest
and most experienced private equity firms specializing in
management buyouts, with offices in New York, Menlo Park,
California, and London, England. For more information, please
visit http://www.kkr.com/

Texas Pacific Group, founded in 1993 and based in Fort Worth, TX,
San Francisco, CA, and London, is a private investment partnership
managing over $13 billion in assets. Over the past several years,
TPG has built an industry practice focused on the energy and power
sectors (Denbury Resources, Portland General Electric (pending)).
Additionally, the firm seeks to invest in world- class franchises
across a range of other industries, including airlines
(Continental, America West), branded consumer franchises (Burger
King, Del Monte, Ducati), leading retailers (Petco, J.Crew,
Debenhams - UK), healthcare companies (Oxford Health Plans,
Quintiles Transnational), and technology companies (ON
Semiconductor, MEMC, Seagate).

                        About the Company

CenterPoint Energy, Inc. (Fitch, BB+ Preferred Securities and
Zero-Premium Exchange Notes' Ratings, Negative), headquartered in
Houston, Texas, is a domestic energy delivery company that
includes electric transmission and distribution, natural gas
distribution and sales, interstate pipeline and gathering
operations, and more than 14,000 megawatts of power generation in
Texas, of which nearly 3,000 megawatts are currently in mothball
status.  The company serves nearly five million customers
primarily in Arkansas, Louisiana, Minnesota, Mississippi,
Oklahoma, and Texas.  Assets total $21 billion.  With more than
11,000 employees, CenterPoint Energy and its predecessor companies
have been in business for more than 130 years.  Visit
http://www.CenterPointEnergy.com/for more information.


CITIZENS COMMUNICATIONS: S&P Lowers Coporate Credit Ratings To BB+
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Citizens
Communications Co. The corporate credit rating was lowered to
'BB+' from 'BBB'. All ratings are removed from CreditWatch, where
they were placed with negative implications on Dec. 11, 2003,
following Citizens' announcement of its decision to explore
strategic alternatives. The outlook is negative.

"The downgrade is based on the concern that Citizens' initiation
of a substantial dividend, indicating a distinct shift toward a
more shareholder-oriented financial policy, will limit further
deleveraging and reduce the company's financial flexibility,"
explained Standard & Poor's credit analyst Eric Geil. "The smaller
resulting financial cushion might hamper Citizens' ability to
address rising competitive pressure on its mature local telephone
operations."

The ratings on Citizens reflect mature industry growth rates,
modest access line losses, rising competition from cable TV
companies for data and voice services, and declining network
access revenue, all of which could exacerbate financial risk given
the company's shareholder orientation and commitment to a high
dividend payout. Business risk pressures are most apparent in the
Rochester, New York market, which accounts for about 20% of total
access lines and has suffered from economic softness. Additional
concerns include possible longer-term declines in regulatory
support and potential increases in rural wireless penetration.
Factors mitigating much of this risk include the company's
position as a near-monopoly telephone carrier with a relatively
stable, high-margin incumbent local exchange carrier business
serving about 2.4 million access lines, largely in less
competitive rural areas; a currently favorable regulatory
environment, which includes subsidies for high-cost, rural
carriers; and strong free cash flow generation capability.

On July 12, 2004, Citizens announced that it completed its
strategic review and will pay a one-time cash dividend of $2 per
share, totaling about $676 million, which will be paid on Sept. 2,
2004 from Citizens' cash balance. Based the company's March 31,
2004 cash of $648 million, plus roughly $115 million in quarterly
net free cash flow and proceeds forthcoming from the August sale
of stock related to the equity unit debt, the company has ample
liquidity for this payment. Citizens will also pay a regular

$1 per share annual dividend totaling about $338 million, which
represents about 73% of the company's expected 2004 free cash
flow. In addition, Citizens indicated that it may consider share
repurchases, further emphasizing the company's increased
shareholder orientation. A commitment to such a substantial
dividend could limit meaningful financial profile improvement and
give the company minimal cushion to weather potential increases in
competitive pressure.


COMMERCIAL CORP: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Commercial Corporation
        fka Kids' Habitat Company
        405 Glenn Drive, Suite 9
        Sterling, Virginia 20164

Bankruptcy Case No.: 04-13062

Chapter 11 Petition Date: July 19, 2004

Court: Eastern District of Virginia (Alexandria)

Judge: Stephen S. Mitchell

Debtor's Counsel: Donald F. King, Esq.
                  Odin, Feldman & Pittleman
                  9302 Lee Highway, Suite 1100
                  Fairfax, VA 22031
                  Fax: 703-218-2160

Estimated Assets: $0 to $50,000

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                                 Claim Amount
------                                 ------------
David J. Chin                              $392,517
1051 Northfalls Court
Great Falls, VA 22066

Access National Bank                       $232,000
14006 Lee Jackson Mem. Hwy.
Chantilly, VA 20151

Bed Time Inc.                               $81,095

Rockville Pike Rocca Prop., LLLP            $79,000

Lea Industries                              $32,505

Fair Lakes Center Assoc. LP                 $27,000

Commonwealth of Virginia                    $25,000

College Woodwork                            $24,622

Verizon Information Services                $21,864

Capital One                                 $18,805

Md. Dept. of Taxation                       $12,000

AP Industries                               $11,525

Capital One                                 $11,000

South Shore Industries                      $10,940

Brazil Furniture Group, Inc.                $10,000

Verizon                                      $7,785

American Woodcrafters                        $6,233

Central Transport Intl. Inc.                 $5,946

The Washington Post                          $5,927

Campbell, Veltri & Clark PLC                 $4,500


COOPERHEAT-MQS: Team Inc. $35 Mil. Bid Wins in Bankruptcy Auction
-----------------------------------------------------------------
Team Inc. (AMEX:TMI) was the successful bidder at an auction to
acquire substantially all of the assets of Cooperheat-MQS Inc. and
its parent company, International Industrial Services Inc.
(together, Sellers) for $35 million in cash, subject to an
adjustment for working capital changes to the date of closing.
Team expects financing provision through a senior secured
financing commitment offered by its primary lender.

Team's successful bid is subject to Bankruptcy Court approval at a
hearing expected to be held on Aug. 9, 2004, and is subject to
certain other customary conditions. Closing is expected to occur
within 30 days following Bankruptcy Court approval. Each Team and
Sellers may elect to terminate the transaction if closing has not
occurred by Sept. 10, 2004.

Team is a professional, full-service provider of specialty
industrial services. Team's current industrial service offering
encompasses on-stream leak repair, hot tapping, fugitive emissions
monitoring, NDT inspection, field machining, technical bolting,
field valve repair and field heat treating. All these services are
required in maintaining high temperature, high pressure piping
systems and vessels utilized extensively in the refining,
petrochemical, power, pipeline and other heavy industries.
Headquartered in Alvin, Texas, Team operates in over 40 customer
service locations throughout the United States. Team also serves
the international market through both its own international
subsidiaries as well as through licensed arrangements in 14
countries. References in this news release to Team include its
subsidiaries. Team's common stock is listed on the American Stock
Exchange and trades under the ticker symbol "TMI".

Cooperheat-MQS is a leading provider of non-destructive testing
(NDT) inspection and field heat treating services throughout the
U.S., and its projected 2004 revenues are estimated to be
approximately $80 million.


CORNING INC: Board Approves $750 Million Capital Expenditure Plan
-----------------------------------------------------------------
Corning Incorporated's (NYSE: GLW) board of directors has approved
a $750 million capital expenditure plan to further expand its
liquid crystal display (LCD) glass substrates manufacturing
capacity.  The majority of the investment will be used to fund the
first phase of the new Corning facility in Taichung, Taiwan.  In
April of this year, Corning announced that its board had approved
preliminary funding to develop the facility plans.

This first phase of the Taichung facility will add glass melting
and finishing capacity capable of producing Generation 5.5 and
Generation 6 glass substrates. Corning expects to begin initial
manufacturing in Taichung during the third quarter of 2005, with
additional capacity continuing to come online through 2006.

"Total worldwide flat panel glass demand could triple over the
next four years if LCD monitor penetration continues and LCD
television emerges as we expect," Wendell P. Weeks, president and
chief operating officer, said. "We are increasing capacity to
provide our customers with state-of-the-market large-size LCD
glass substrates toward which the industry is quickly moving," he
said. "We are closely monitoring consumer demand for LCD
television, as well as supply chain inventory levels, and we will
pace our manufacturing expansions accordingly," Weeks said.

As part of this capital expenditure plan, Corning's board also
approved preliminary funding for two additional expansion
projects:

   -- Preparation for a second phase of construction at the
      Taichung facility, which would begin in 2005 and would
      double the facility's large-generation production.

   -- Preliminary funding for the expansion of the company's
      Shizuoka, Japan LCD glass facility. This will add
      significant capacity capable of producing Generation 5.5,
      Generation 6 and larger glass substrates.

Wednesday's announcement is Corning's third major LCD capital
expansion in the past 12 months to support the customer
requirements of this growing business. The 2004 portion of this
plan is included in Corning's previously announced capital
spending forecast of $950 million to $1 billion for this year.

Ongoing capacity expansions are also underway at Samsung Corning
Precision Glass Co., Ltd., Corning's equity affiliate in South
Korea, but are not part of Wednesday's announcement.

            Worldwide Market Growth Continuing

The company continues to believe annual market volume growth for
LCD glass could range from 30 percent to 50 percent over the next
several years, with 2004 volume growth likely to be at the high
end of this range. Weeks said that Corning expects that the LCD
glass growth rate will increasingly be driven by LCD television
penetration, with total televisions sold in 2004 expected to
double over last year's sales of 4.5 million sets. With LCD
television prices expected to continue to decline, worldwide LCD
television penetration may reach 16 percent of the total
television market in 2006.

Donald B. McNaughton, senior vice president, Display, said, "Our
new Taichung facility will produce large-generation substrates
designed to meet the emerging demand for LCD televisions, and
larger-size flat-screen desktop monitors and notebook computers
which are becoming the choice in both homes and offices."

                  Customer Supply Agreement

In a separate announcement Wednesday, Corning said that it has
entered into a long-term LCD glass supply agreement with Chi Mei
Optoelectronics Corp. of Taiwan to provide Generation 5.5 LCD
glass substrates. As part of the agreement, Chi Mei will prepay
$510 million to Corning in several installments in 2004 and 2005
for a portion of the contracted purchases. Chi Mei will be able to
use the prepayments in the form of credits against glass purchases
over the life of the contract.

Corning said it will account for the prepayment as a customer
deposit liability on the company's balance sheet and has no
restrictions on the use of the cash. James B. Flaws, Corning's
vice chairman and chief financial officer, said, "The prepayment
feature of the contract helps Corning as we are constructing
substantial additional capacity to meet the growing industry
demand. At the same time, it provides Chi Mei with an assured
supply of larger size glass for their new LCD fabrication
facility."

                About Corning Incorporated   
  
Corning Incorporated -- http://www.corning.com/-- is a    
diversified technology company that concentrates its efforts on   
high-impact growth opportunities. Corning combines its expertise   
in specialty glass, ceramic materials, polymers and the   
manipulation of the properties of light, with strong process and   
manufacturing capabilities to develop, engineer and commercialize   
significant innovative products for the telecommunications, flat   
panel display, environmental, semiconductor, and life sciences   
industries.   
  
                       *   *   *   
  
As reported in the Troubled Company Reporter's March 11, 2004   
edition, Standard & Poor's Rating Services assigned its 'BB+'   
rating to Corning Inc.'s proposed $400 million senior unsecured   
notes, consisting of a $200 million 10-year and a $200 million 12-
   
year offering under the company's existing shelf registration. At   
the same time, Standard & Poor's affirmed its 'BB+' corporate   
credit rating and its other ratings on Corning. Proceeds of the   
issuance are expected to be used primarily to repay existing debt   
and for other corporate purposes.   
  
The ratings outlook is stable.   
  
"While the debt offering is viewed as a mild positive by
improving the term structure of Corning's debt profile in addition
to already substantial debt reduction, we remain mainly focused
on cash flow and earnings improvement by Corning," said Standard
& Poor's credit analyst Robert Schulz.   
  
Fitch Ratings also assigned a 'BB' rating to Corning Inc.'s   
proposed debt offering of $400 million of senior unsecured notes,   
consisting of two tranches of $200 million due 2014 and 2016. The   
'B' convertible preferred stock rating is affirmed.   
  
According to Fitch, Corning's ratings reflect the strained but   
improved credit protection measures, negative free cash flow, and   
stabilizing but still challenging telecommunications end-markets   
which still comprised 46% of revenue as of December 31, 2003.
Also  recognized are the company's improved balance sheet and
liquidity  and leading positions in diverse markets.


COVANTA: Court Directs Covanta Tampa To Issue Status Reports
------------------------------------------------------------
Judge Blackshear of the U.S. Bankruptcy Court for the Southern
District of New York holds that the Reorganized Covanta Energy
Corporation Tampa Debtors -- Covanta Tampa Bay, Inc. and
Covanta Tampa Construction, Inc. -- are responsible under the
confirmed Covanta Tampa Plan to inform the Bankruptcy Court of the
progress made toward:

   (1) the consummation of the Plan under Section 1101(2) of
       the Bankruptcy Code;

   (2) the entry of a final decree under Rule 3022 of the
       Federal Rules of Bankruptcy Procedure; and

   (3) the closing of the cases under Section 350.

Judge Blackshear directs the Covanta Tampa Debtors -- or another
party as the Court may instruct -- to:

   (a) file within 45 days from July 16, 2004, a status report
       detailing the actions the Covanta Tampa Debtors took and
       the progress they made toward the consummation of the
       Covanta Tampa Plan.  Reports will be filed thereafter
       every January 15, April 15, and October 15 until a final
       decree has been entered.  Following the First Post-
       Confirmation Status Report, the Covanta Tampa Debtors
       may, at their option, file the reports together with the
       reports required to be filed on behalf of Covanta Energy
       Corporation and certain of its debtor affiliates;

   (b) file (i) a closing report in accordance with Rule 3022-1
       of the Local Bankruptcy Rules for the Southern District of
       New York and (ii) an application for a final decree,
       within 15 days after the distribution of any deposit
       required by the Covanta Tampa Plan or, if no deposit is
       required, upon the payment of the first distribution
       required under the Covanta Tampa Plan; and

   (c) submit the Closing Report, including a final decree
       closing the case, within six calendar months from the date
       of the Confirmation Order.

Failure to comply with the Order, Judge Blackshear warns, will
cause him to convene a post-confirmation status conference on
January 19, 2005 at 2:00 p.m.

Headquartered in Fairfield, New Jersey, Covanta Energy Corporation
-- http://www.covantaenergy.com/-- is a publicly traded holding  
company whose subsidiaries develop, own or operate power
generation facilities and water and wastewater facilities in the
United States and abroad. The Company filed for Chapter 11
protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826).  
Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary,
Gottlieb, Steen & Hamilton represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
its creditors, they listed $3,280,378,000 in assets and
$3,031,462,000 in liabilities. (Covanta Bankruptcy News, Issue No.
61; Bankruptcy Creditors' Service, Inc., 215/945-7000)   


COVANTA ENERGY: Attacks Travelers Insurance's $205 Million Claim
----------------------------------------------------------------
Covanta Energy Corporation and its debtor-affiliates have found 58
proofs of claim that assert amounts exceeding what was the company
thinks the claimant is owed.  Thus, the Debtors ask Judge
Blackshear of the U.S. Bankruptcy Court for the Southern District
of New York to allow the Overstated Claims in their reduced
amounts.  The Overstated Claims include:

                                            Asserted     Reduced
   Claimant                   Claim No.       Amount      Amount
   --------                   ---------     --------    --------
   AT&T Corporation              4599        $28,879     $14,176
   Brown, George                 2925        480,906     400,000
   DGF Industrial Innovations     898    unspecified      20,248
   Juran, David                    22         58,120      50,755
   Patent Scaffolding Co.        4481         96,319       1,475
   Pioneer Communications        1411         22,849      22,241
   Public Service Elec. & Gas    3711         20,497      16,837
   Shick Tube-Veyor Corp.        3850         32,583       6,300
   Travelers Insurance Co.       4412    205,497,534   8,727,526
   Transport Int'l Pool          1376         12,521       1,949

Headquartered in Fairfield, New Jersey, Covanta Energy Corporation
-- http://www.covantaenergy.com/-- is a publicly traded holding  
company whose subsidiaries develop, own or operate power
generation facilities and water and wastewater facilities in the
United States and abroad. The Company filed for Chapter 11
protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826).  
Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary,
Gottlieb, Steen & Hamilton represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
its creditors, they listed $3,280,378,000 in assets and
$3,031,462,000 in liabilities. (Covanta Bankruptcy News, Issue No.
60; Bankruptcy Creditors' Service, Inc., 215/945-7000)   


CRITICAL HOME: Recurring Losses Trigger Going Concern Doubts
------------------------------------------------------------
At March 31, 2004, Critical Home Care Inc. had a working capital
deficiency of $1,930,000, an accumulated deficit of $11,030,000
and had incurred net losses for the three and six months ended
March 31, 2004 of $2,771,000 and $3,077,000, respectively. The
Company's recurring losses from operations and its difficulty in
generating sufficient cash flow to meet its  obligations and
sustain its operations raise substantial doubt about its ability
to continue as a going concern.

The Company's business plan and growth strategy are dependent on
working capital.  Management has been aggressively seeking to
raise additional capital through accounts receivable  financing
and private sector loans and obtained a loan of $250,000 from a
private individual  on February 3, 2004, and a bridge loan of
$1,500,000 on March 11, 2004.  On May 7, 2004,  the Company
completed a total of $8,000,000 of a Regulation D Private
Placement.  The Company subsequently sold an additional $245,000
of securities and terminated the Offering.  The Company sold an
aggregate of 32,980,000 shares at $0.25 per share together with
3,298,000  Class A Warrants exercisable for 7 years at $0.50 per
share.  The Placement Agent received  warrants to purchase
2,298,000 shares, exercisable on a cashless basis for 7 years at
$0.50 per share.  The Placement Agent also received a 10% sales
commission, and reimbursement of out-of-pocket expenses. The
Company advanced $5 million of the net proceeds to complete the  
RKDA Merger; approximately $164,000 of the proceeds was used for
the repayment of indebtedness and the balance for working capital.


CROMPTON CORP: S&P Cuts Outstanding Senior Notes Rating to B+
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered the ratings on the
existing senior notes and debentures of Middlebury, Connecticut-
based Crompton Corp. to 'B+' from 'BB-'.

The 'BB-' corporate credit rating of this specialty chemicals and
polymer products producer is affirmed and the outlook remains
negative.

The existing notes, which are assigned a recovery rating of '3'
and will become secured upon the close of the new revolving credit
facility, are now rated one notch lower than the corporate credit
rating. The lower rating reflects the notes' disadvantaged
position since lenders under the new credit facility retain a
first-priority distribution on the collateral in an amount equal
to 10% of the company's consolidated net tangible assets. Standard
& Poor's also assigned a 'B' rating to proposed tranches of senior
unsecured debt totaling $600 million with maturity dates of
2010, 2011, and 2014. The new unsecured notes are rated two
notches lower than the corporate credit rating, reflecting the
priority of secured debt as well as substantial subsidiary
obligations relative to total assets.

Standard & Poor's assigned a 'BB-' bank loan rating and its '2'
recovery rating to a new secured $250 million revolving credit
facility maturing in 2009. The 'BB-' rating is the same as the
corporate credit rating; this and the '2' recovery rating indicate
that bank lenders can expect a substantial recovery of principal
in the event of default.

"The ratings on Crompton reflect the vulnerability of its
operating margins and earnings to competitive pricing pressures,
raw materials costs, and the cyclicality of its markets; and weak
cash flow protection measures," said Standard & Poor's credit
analyst Wesley E. Chinn.

The ratings also incorporate the company's sizable unfunded
pension and retirement medical benefit obligations and rubber
chemicals litigation. These aspects are somewhat tempered by an
array of complementary specialty and industrial chemical products,
substantial geographic diversity of sales, improved liquidity, and
a manageable debt maturity schedule.

Key products include PVC additives, polymerization inhibitors,
aluminum alkyl catalysts, EPDM, castable urethane, lubricant
additives, and miticides. Markets served include automotive,
construction, agriculture, packaging, and industrial rubber.


DEVLIEG BULLARD: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: DeVlieg Bullard II, Inc.
        10100 Forest Hills
        Machesney Park, Illinois 61115

Bankruptcy Case No.: 04-12097

Type of Business: The Debtor is a world class provider of a
                  comprehensive portfolio of proprietary machine
                  tools, aftermarket replacement parts, field
                  service and premium workholding products.
                  See http://www.devliegbullard.com/

Chapter 11 Petition Date: July 21, 2004

Court: District of Delaware

Judge: Mary F. Walrath

Debtor's Counsel: James E. Huggett, Esq.
                  Flaster Greenberg
                  913 Market Street, 7th Floor
                  Wilmington, DE 19801
                  Tel: 302-351-1910
                  Fax: 302-351-1919

Estimated Assets: $10 Million to $50 Million

Estimated Debts:  $10 Million to $50 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
KA-Wood Gear & Machine        Special Gear              $114,553
                              Supplier

Don E. Ballard                Landlord: Rockford        $108,688
                              Facility

Lamcam, Inc.                  Special Precision         $103,622
                              Machine Parts

AON Consulting, Inc.          Pension Actuaries          $96,684

Corporate Property            Landlord Frankenmuth       $94,484
                              Facility

Oak Leaf II Co.               Landlord Twinsburg         $79,900

Premium Assignment Corp.      Insurance Premium          $74,808
                              Financer

Rite Machine Products, Inc.   Acme Parts Vendor          $73,010

SPZ Machine                   Parts Supplier             $72,031

Blue Cross Blue Shield of MI  Group Health               $63,989
                              Insurance

The Timken Corp.              Bearing Supplier           $60,904

SKF Special Bearing           Supplier of                $58,288
                              Specialty Bearings

Weldex Fabricating, Inc.      Components Supplier        $53,868

MP Tool & Engineering Co.     Tooling Supplier           $53,183

Sugar River Machine Shop      Supplier of Small          $52,343
                              Machine Precision
                              Parts

Abrasive Machinery Co.        Precision Ground           $40,221
                              Parts Supplier

Rockwell Mfg.                 Supplier                   $40,212

Arrow Gear Co.                Machine Parts              $36,785
                              Supplier

Logan Clutch Corp.            Machine Clutch             $34,035

Gleason Works                 Certified Supplier         $32,858
                              of Specialty Gears
                              and Curvic Couplings


DRYDEN VII: S&P Assigns Class B-2L Preliminary Ratings at BB
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Dryden VII-Leveraged Loan CDO 2004/Dryden VII-Leveraged
Loan CDO 2004 Corp.'s $416.626 million floating- and fixed-rate
secured notes due September 2016.

The preliminary ratings are based on information as of
July 21, 2004. Subsequent information may result in the assignment
of final ratings that differ from the preliminary ratings.

The preliminary ratings reflect:

     -- The expected commensurate level of credit support in the
        form of subordination to be provided by the notes junior
        to the respective classes;

     -- The cash flow structure, which is subject to various
        stresses requested by Standard & Poor's;

     -- The experience of the collateral manager; and
        The legal structure of the transaction, which includes the
        bankruptcy remoteness of the issuer.

                Preliminary Ratings Assigned
Dryden VII-Leveraged Loan CDO 2004/Dryden VII-Leveraged Loan CDO
2004 Corp.
   
Class                         Rating              Amount (mil. $)
X*                            AAA                           4.000
A-1LA                         AAA                         150.000
A-1LB                         AAA                          37.500
A-1L                          AAA                         126.500
A-2L                          AA                           26.000
A-3F                          A                            22.000
B-1L                          BBB                          22.000
B-2L                          BB                            7.500
U combination**               AAA                          21.126
Preferred shares              N.R.                         37.600
*Class X note represents fees and expenses owed to the
underwriter, with a set payment amount each payment date. **Class
U note is rated to return of principal only. The class U note is a
combination security of a U.S. government strip CUSIP number
912833 KJ 8 and preferred shares. N.R.-Not rated.


EMERGING VISION: Fog Clears in Board of Directors' Election
-----------------------------------------------------------
Based on preliminary voting information provided to EVI by its
independent inspectors of election, IVS Associates, Inc., Emerging
Vision, Inc.'s (OTCBB: ISEE.OB) nominees received 36,013,976
(approximately 56.6%) of the votes cast for the contested election
of directors at EVI's 2004 Annual Meeting of Shareholders, held on
July 14, 2004. There were 63,582,913 (approximately 90.3%) votes
cast at the Annual Meeting out of a possible 70,422,217
outstanding voting shares.

Accordingly, EVI reported that it appears that Seymour G. Siegel,
Alan Cohen and Harvey Ross have been elected to serve as Class I
directors of EVI, for a term of one year expiring in 2005, and
Joel L. Gold, Robert Cohen and Christopher G. Payan have been
elected as Class II directors of EVI, for a term of two years
expiring in 2006. The preliminary results are subject to challenge
and review, and the actual official voting results could differ.

Christopher Payan, EVI's Chief Executive Officer and one of its
directors, stated "Although the results have not yet been
officially certified by IVS, we are gratified by what appears,
preliminarily, to be a strong endorsement of management's
operating strategy and EVI's performance over the past 12 months.
We are excited about the industry knowledge and expertise that
Messrs. Siegel and Ross, our two new independent directors, bring
to the Board, and we look forward to the opportunity to build on
EVI's renewed growth and to continue to build value for all
shareholders of EVI."

Horizons Investors Corp., a wholly-owned company of Benito R.
Fernandez (a director of EVI) and owner of 23,726,531
(approximately 33.7%) shares of EVI, initiated the proxy contest
for the election of directors and nominated its own slate of five
nominees (which included Mr. Fernandez). Based on the preliminary
results, Horizons received 27,523,456 (approximately 43.3%) of the
votes cast at the Annual Meeting.

Horizons has been afforded an opportunity to review the proxy
cards and ballots, which review EVI believes will take place
within the next few days. Details of the official outcome will be
provided in a subsequent press release.

                     About Emerging Vision

Emerging Vision, Inc. operates one of the largest chains of retail
optical stores, which includes one of the largest franchised
optical chains in the United States, with approximately 166
franchised and Company-owned stores located in 19 states, the
District of Columbia, Ontario, Canada and the U.S. Virgin Islands,
principally operating under the names "Sterling Optical" and "Site
for Sore Eyes".

At March 31, 2004, Emerging Vision Inc.'s balance sheet showed a
stockholders' deficit of $99,000 compared to a deficit of $762,000
at December 31, 2003.


ENRON CORP: Asks Court to Disallow and Expunge 433 Big Claims
-------------------------------------------------------------
Enron Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to disallow
and expunge 433 Claims because:

    (a) 317 Claims totaling $23,930,080 have no amount due
        based on the Debtors' books and records.  Among the No
        Amount Due Claims are:

        Claimant                           Claim No.       Amount
        --------                           ---------       ------
        Varde Partners, Inc.                1363500    $1,000,000
        Swift Energy Company                1851300       252,462
        Lovells                             2008100       517,522
        Lee Office Products                 2293500       218,485
        Konkursamt Zurich (Altstadt)         410300       741,126
        Kaydon Corporation                   136900     3,119,000
        JPD Financial Consultants, Inc.      498000       341,226
        James Durbin                         609100       496,125
        IRS                                  769100     1,376,892
        Hitachi Zosen USA, Ltd.             2209600     1,093,860
        H Clarkson & Company Limited        2429800     1,138,511
        Considar Metals Marketing, Inc.     1410800     1,597,458
        Bureau of Customs and Border        2430000     5,991,066
        Alcan Aluminum Corporation          1855400     1,307,497

    (b) 14 Claims have no claimed amount and no amount is due
        under the Debtors' books and records;

    (c) the Claimants to 58 Claims, which aggregate $164,844,677,
        provided no proof of their claims, including those of:

        Claimant                           Claim No.       Amount
        --------                           ---------       ------
        Children's Memorial Hospital        1643500    $1,651,593
        EcoElectrica, LP                    2074500   100,000,000
        Trinidat & Tobago Methanol Co.       557100    62,523,607

    (d) 28 Claims, totaling $674,379, were already paid; and

    (e) 16 Claims, aggregating $13,213,474, were already
        settled pursuant to a Court Order, including the Claims
        filed by:

        Claimant                           Claim No.       Amount
        --------                           ---------       ------
        Patricia M. Key                     2139700    $1,069,397

        360 Fiber, Inc.                     1401300     2,138,411

        360 Networks (USA), Inc.            1401200       903,609
                                            1401100     3,738,810
                                            1401000     3,738,810

        (Enron Bankruptcy News, Issue No. 118; Bankruptcy      
        Creditors' Service, Inc., 215/945-7000)


FLEMING: C&S Insists on Immediate Performance under Sale Agreement
------------------------------------------------------------------
C&S Acquisition, LLC, and C&S Wholesale Grocers, Inc., represented
by Megan N. Harper, Esq., at Landis Rath & Cobb, LLP, in
Wilmington, Delaware, ask the U.S. Bankruptcy Court for the
District of Delaware to compel Fleming Companies, Inc., and its
debtor-affiliates to:

       (1) immediately pay them an allowed administrative expense
           claim for $1.4 million as of June 25, 2004, plus
           interest; and

       (2) comply with the terms of the Cure Escrow Agreement.

C&S also seeks an award of attorney's fees and costs.

Ms. Harper explains that C&S has, for an extended period of time,
tried to resolve directly with the Debtors the payment issues.  
However, in the face of the Debtors' continued recalcitrance, C&S
has no other option but to seek Court intervention.

The Debtors are in breach of the Asset Purchase Agreement and
Cure Escrow Agreement.  They are, without legal justification,
refusing to acknowledge and agree to written instructions to the
Cure Escrow Agent, and to remit substantial business revenues
rightfully owed to C&S.  Most recently, the Debtors denied
requests from C&S to issue withdrawal notices of assumption and
assignment with respect to certain Acquired Assets, and to seek
to reject the agreements as requested by C&S.

The Debtors' course of conduct is nothing more than an unlawful
attempt to gain leverage over C&S with respect to several
disputes not presently before the Court.  By this Motion, C&S
seeks to "reaffirm its rights" under the Sale Order and the sale
agreements, including the allowance and immediate payment of its
claim for all amounts currently owed.  Furthermore, C&S seeks to
compel the Debtors to perform the withdrawal and other acts C&S
has properly requested in the exercise of its rights under the
sale documents.

C&S also seeks to put an end to the Debtors' use of self-help to
resolve certain disputes by improperly and prematurely affecting
a set-off against amounts admittedly owed to C&S.

Executory contracts and unexpired real property leases associated
with the Wholesale Distribution Business were among the asset
categories the Debtors sold to C&S.  The Purchase Agreement
requires the Debtors to pay Cure Costs with respect to each
Acquired Contracts.  The Cure Escrow, funded by $22 million of
the Purchase Price, was established for that purpose.

The Debtors must pay all Cure Costs "as soon as practicable"
following the closing date on each Acquired Contract.  Cure Costs
are payable from the Cure Escrow only on written instructions
from the Debtors to the Escrow Agent.  C&S cannot direct the
Escrow Agent to make any cure payments absent written
instructions from the Debtors.  The parties have also agreed that
monetary damages will not suffice for a breach of the Cure Escrow
Agreement.  The fees and expenses of counsel for the prevailing
party to any dispute relating to release of escrow property are
to be borne by the non-prevailing party.

Under letter agreements amending the Purchase Agreement, the
parties also agreed that C&S could cause the Debtors to grant
accounts receivable credits in an aggregate amount not to exceed
$8 million.  The FSA Accounts Receivable Compromised Limit was
established for the purpose of allowing C&S to negotiate with any
contract counterparty to a facility standby agreement for the
payment or settlement of the payment of any Cure Costs associated
with an FSA.  Within two business days of receiving joint notice
of an FSA settlement from the Debtors and C&S, the Cure Escrow
Agent is required to release cash amounts from the Cure Escrow to
be paid under the FSA settlement.

The Purchase Agreement further provides that, if the Debtors
receive any payment for accounts receivable or trade receivables
that accrued after the Initial Closing Date with respect to any
Acquired Asset, the Debtors must segregate those payments from
their own assets and, within five business days of receipt of the
funds, remit the payments to C&S.  The Debtors acknowledge that
they have no rights or interest with respect to any payments.

The Purchase Agreement established an Option Period running from
the Initial Closing Date up to six months after the closing
during which C&S could elect to include or exclude any Acquired
Asset from the sale.  However, the Purchase Agreement provides
that the Option Period will continue for the time necessary to
seek and obtain any supplemental sale orders with respect to the
Acquired Assets for which C&S has given an Option Notice.  The
Debtors have acknowledged this obligation in every "Notice of
Assumption and Assignment" served on executory contract and
unexpired lease counterparties.

During the sale hearing, the Debtors signed a letter amendment to
the Purchase Agreement, which gave C&S the right to revoke its
request in an Option Notice to have an Acquired Asset transferred
to it, its assignee, or a third party purchaser.  Once C&S elects
to exclude an Acquired Asset previously noticed for assumption
and assignment, the Debtors must file and diligently prosecute a
request seeking the Court's approval to reject the specified
Acquired Asset.

Each Notice of Assumption and Assignment, and each Notice of
Withdrawal, has made clear that the Debtors have reserved their
rights to remove contracts and leases from any given Notice of
Assumption and Assignment.

On June 18, 2004, C&S issued an Option Notice to the Debtors in
accordance with the Purchase Agreement notifying the Debtors that
C&S intended to exclude certain Acquired Assets.  In part, the
Option Notice identifies FSAs that the Debtors are bound by
settlement agreement to reject.  To date, the Debtors have taken
action on the Option Notice only with respect to Strickland
Foods, Inc.

On July 2, 2004, after the expiration of the initial Option
Period, the Debtors filed a Notice of Withdrawal with respect to
the Strickland FSA under written instructions from C&S.  The
Debtors also filed a request seeking authority to reject the
contract with Strickland Foods.

However, the Debtors, without any legal justification and in
violation of the Cure Escrow Agreement and the Purchase
Agreement, refused to perform their obligations under the
Purchase Agreement to issue written instructions to the Cure
Escrow Agent to release funds from the Cure Escrow, and have
refused to allow C&S to issue further account receivable credits
to FSA contract counterparties from the FSA Accounts Receivable
Compromised Limit.

The Debtors have also refused to remit business revenues which,
under the Purchase Agreement, they acknowledge they have no
interest in and which rightfully belong to C&S.

Furthermore, the Debtors have refused to act to reject Acquired
Assets after appropriate notice from C&S.

Ms. Harper tells Judge Walrath that the Debtors' actions have
created a significant impediment to C&S's ability to negotiate
settlements and close transactions on its Acquired Assets, and
have also created "unnecessary tension among the parties."

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. 39; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


FLINTKOTE COMPANY: Committee Looks to Tersigni for Fin'l Advice
---------------------------------------------------------------
The Official Committee of Asbestos Personal Injury Claimants
appointed in The Flintkote Company's Chapter 11 cases, sought and
obtained approval from the U.S. Bankruptcy Court for the District
of Delaware to retain L. Tersigni Consulting, PC, as its
accountant and financial advisor.

L. Tersigni will provide services including:

   a. development of oversight methods and procedures so as to
      enable the Committee to fulfill its responsibilities to
      monitor the Debtor's financial affairs;

   b. interpretation and analysis of financial materials,
      including accounting, tax, statistical, financial and
      economic data, regarding the Debtor and other relevant
      parties;

   c. analysis and advice regarding additional accounting,
      financial, valuation and related issues that may arise in
      connection with plan negotiations and otherwise in the
      course of these proceedings;

   d. analysis and valuation of prepetition transactions,
      solvency analysis and preparation of valuations of the
      Debtor at the time of prepetition transfers.

Loreto T. Tersigni will lead the team in this engagement.  
Mr. Tersigni's billing rate is currently $500 per hour.  His
associates will bill for their time at these rates:

         Designation           Billing Rate
         -----------           ------------
         Managing Director     $475 per hour
         Director              $365 per hour
         Manager               $275 per hour
         Senior Consultant     $205 per hour

Headquartered in San Francisco, California, The Flintkote Company
is engaged in the business of manufacturing, processing and
distributing building materials.  The Company filed for chapter 11
protection on April 30, 2004 (Bankr. Del. Case No. 04-11300).  
Attorneys at Sidley Austin Brown & Wood LLP serve as lead counsel
to the Company.  James E. O'Neill, Esq., Laura Davis Jones, Esq.,
and Sandra G. McLamb, Esq., at Pachulski, Stang, Ziehl, Young,
Jones & Weintraub serve as local counsel to 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 $100 million.


FUELNATION: Grants Yugra Holding Exclusive Distribution Rights
--------------------------------------------------------------
On May 28, 2004, FuelNation Inc. entered into a so-called Frame
Agreement providing for:

      (1) Establishment of Relationship and Procedure for Agreeing
          Sale Contracts; and

      (2) the Grant of Exclusive Rights to Distribute Petroleum
          Products and Petrochemicals in the United States and
          Europe with Yugra Holding

Yugra is a Russian joint stock company, active in the business of
the exploration, extraction, refinement and distribution of
petroleum products and petrochemicals in Russia.

The Frame Agreement provides a basis and framework for the
subsequent petroleum product or petrochemicals sale agreements
during the term of the Frame Agreement. The initial term of the
Frame Agreement is five years, subject to renewal for additional
five years at the option of FuelNation.

Further, on May 28, 2004, the Company entered into the Contract
with Yugra Holding for the delivery of 500,000 MT of gas oil over
the twelve months commencing July 2004. The total value of the
Contract is approximately $163,500,000.

FuelNation Inc. is a Florida-based development stage corporation
which was incorporated in Florida in 1993. The company is planning
to build and develop a portfolio of real estate assets with our
concept of the "Super Store" of Travel Centers across The United
States. It has also been engaged in the development of providing
real-time e-commerce communications in petroleum marketing and
energy services.

At September 30, 2003, FuelNation's balance sheet shows a working
capital deficit of close to $3 million, and a total shareholders'
equity deficit of about $6 million.


FURNAS COUNTY: Selling Assets to AFA Acquisition for $50,000,000
----------------------------------------------------------------
Furnas County Farms and its debtor-affiliates sought and obtained
approval from the U.S. Bankruptcy Court for the District of
Nebraska to sell substantially all of their assets free and clear
of liens, claims, and encumbrances to AFA Acquisition Co., LLC for
$50,000,000.

The Debtors report that, collectively, they generate $80,000,000
in annual sales; employ 375 workers; and, manage some 430,000 head
of swine that require constant monitoring, feeding and care.

The Debtors concluded that the best mechanism for maximizing the
value of its assets on a going concern basis was through the sale
of its assets pursuant to Section 363 of the Bankruptcy Code.

Over the past year, the Debtors attempted to locate a qualified
buyer for the assets.  The Debtors used outside professionals to
market their assets and investigated prospective purchasers for
the assets.  After a thorough investigation, the Debtors and their
consultants determined that AFA Acquisition's offer was the
highest and best.  The Bankruptcy Court agrees.  AFA also obtained
the right to assume any or all rights under any executory contract
or unexpired lease.

Headquartered in Columbus, Nebraska, Furnas County Farms is
engaged in owning, leasing, operating and managing swine
operations.  The Company, along with 4 of its debtor-affiliates
filed for chapter 11 protection on May 3, 2004 (Bankr. D. Nebr.
Case No. 04-81489).  James Overcash, Esq., and Joseph H. Badami,
Esq., at Woods & Aitken, LLP represent the Debtors in their
restructuring efforts. When the Company filed for protection from
their creditors, they listed both estimated debts and assets of
over $50 million.


GALEY & LORD: Wants Board to Okay Patriarch's Acquisition Plan
--------------------------------------------------------------
Galey & Lord, Inc., a leading global supplier of denim, khaki and
corduroy fabrics for the fashion apparel and uniform markets, has
agreed to be acquired by Patriarch Partners, LLC, a New York-based
financial firm with approximately $4 billion under management and
significant investments in textile industry companies.  Galey &
Lord's board of directors approved the offer and the company is in
the process of presenting the acquisition plan to stakeholders.
Financial terms were not disclosed.

Galey & Lord is privately held following its emergence from
bankruptcy protection in March of 2004. The company's lenders must
approve the transaction.

"This transaction is an important milestone in the evolution of
Galey & Lord, which has taken significant steps to compete in a
changing market and amidst increased global competition," said
John J. Heldrich, President & C.E.O. of Galey & Lord.

"Patriarch Partners is a highly-regarded strategic investor with a
proven track record of enhancing the value of companies in our
industry," he continued. "They are committed to working with
management to execute a long-term vision that will enable us to
build toward a successful future. This sends a message to our
customers, vendors, employees and strategic partners that the
company is taking steps necessary to realize its strategic vision,
allowing it to prosper as we move forward."

"Galey & Lord has a long history of providing quality, innovation
and reliability to a strong customer base that includes all of the
major retailers and garment manufacturers in its markets," said
Lynn Tilton of Patriarch Partners. "The company is an important
player in an industry that continues to undergo major change.

"We have held a significant stake in the company's equity and debt
for some time. We know the company and feel comfortable with its
market position and its strong management team," she continued.
"During these challenging times, we are confident in our ability
to make a difference. Our goal is not only to help the company
achieve stability, but bring to bear the necessary resources for
Galey & Lord to achieve long term success."

Galey & Lord, Inc. operates domestically and in Canada under two
divisions, Swift Denim and Galey & Lord Apparel, and
internationally through joint ventures in Europe, North Africa,
Asia and Mexico. Its customers include: Gap, Old Navy, Banana
Republic, Polo Ralph Lauren, Abercrombie & Fitch, Levi's, Tommy
Hilfiger, L.L. Bean, Nautica, Eddie Bauer, Liz Claiborne, Haggar,
Land's End, and Tropical Sportswear / Savane, among others. The
company is responding to increased low-cost competition by
leveraging its historic core competencies as a differentiated,
value-added product innovator, while improving production
efficiencies and creating competitive advantage via speed to
market.

                    About Patriarch Partners

Patriarch Partners, LLC manages seven CDOs, two CLOs, and a
private equity fund and currently oversees lending to more than
400 companies. Patriarch's assets under management approximate $4
billion, including significant equity positions in over 50
companies.

Patriarch has developed a strong reputation for investing in and
improving the value of companies during periods of operational,
industry and economic turmoil.

                        About Galey & Lord

Galey & Lord Apparel is a leading producer of innovative woven
sportswear fabrics as a result of its expertise in sophisticated
fabric finishing and close design partnerships with its customers.
Swift Denim is a leading producer of differentiated and value-
added denim products supplying top designers and retailers around
the world.

Galey & Lord, Inc. and its foreign subsidiaries employ
approximately 3,200 employees in the United States in North
Carolina, South Carolina, Georgia, and New York. It employs more
than 200 employees in its owned foreign operations. The company
and its joint venture interests operate in the U.S., Canada,
Mexico, Asia, Europe and North Africa.

At December 27, 2003, Galey & Lord Inc.'s balance sheet showed a
stockholders' deficit of $234,914,000 compared to a deficit of
$131,739,000 at December 28, 2002 and a deficit of $212,306,000 at
September 27, 2003.


GEARS LTD: Fitch Assigns Preliminary Low-B Ratings to 2 Classes
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to GEARS Ltd. 2004-A's $2.0 billion asset-backed notes and
preferred shares.

The preliminary ratings are based on information as of
July 21, 2004. Subsequent information may result in the assignment
of final ratings that differ from the preliminary ratings.

The preliminary ratings reflect initial credit support from
subordination of 7.25% for class A, 5.0% for class B, 3.25% for
class C, and 0.50% for class D; an initial reserve account deposit
of 1.0% of the initial pool; and excess spread. Excess spread
after covering losses will be used to build the reserve account.
In addition, the preliminary ratings on the notes and preferred
shares are based on the credit quality of the underlying pool of
prime automobile loans originated by Bank of America N.A., credit
enhancement commensurate with the ratings, and a sound legal
structure.

This transaction represents Bank of America N.A.'s second term
deal in 2004. The first transaction was CARSS Finance L.P. 2004-A,
which was a synthetic securitization of Bank of America N.A.'s
auto receivables using a credit default swap.

                    Preliminary Ratings Assigned
                         GEARS Ltd. 2004-A
     
               Class      Rating     Amount (mil. $)
               -----      ------     ---------------
               A-IO*      A-1+                   N/A
               A-P        AAA                  105.0
               A-1        A-1+                 375.4
               A-2        AAA                  521.7
               A-3        AAA                  547.2
               A-4        AAA                  305.7
               B-1        AA                    22.5
               B-2        AA                    22.5
               C-1        A                     17.5
               C-2        A                     17.5
               D-1        BBB                   27.5
               D-2        BBB                   27.5
               E-1        BB                     5.0
               E-2        BB                     5.0

          * Class A-IO will receive certain fixed payments
            through March 2005.

          N/A - Not applicable.


GENTEK INC: Richard R. Russell Discloses Owns 45,661 Shares
-----------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission on June 30, 2004, GenTek, Inc.'s President and Chief
Executive Officer, Richard R. Russell, disclosed that he directly
and beneficially owns 45,661 shares of GenTek common stock at $0
par value per share.  The shares include 40,513 restricted
shares, which are subject to forfeiture under certain
circumstances.

Mr. Russell also acquired Stock Options for 2,905 shares at a $36
exercise price.  The Options expire on March 19, 2014.  Mr.
Russell reported that one-third of the Stock Options will vest on
March 19, 2005 and an additional one-third will vest on March 19,
2006.  The remaining one-third will vest on March 19, 2007.
(GenTek Bankruptcy News, Issue No. 35; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


GLOBAL WATER: Stock Begins Trading Under New 'GWTR' Symbol
----------------------------------------------------------
Global Water Technologies, Inc. (OTC: GWTR), a full-service water
treatment and purification company, now trades its securities
under the symbol GWTR. Previously, the Company's securities had
traded under the symbol GWTRQ, designating that the Company had
been in chapter 11 bankruptcy. Due to our emergence from
bankruptcy, the symbol reverts to GWTR. The Company's securities
are traded on the OTC under the symbol GWTR.

The Company further clarified that the bankruptcy proceedings did
not affect its securities or shareholder's interests in their
securities.

               About Global Water Technologies

Global Water Technologies, Inc. (OTC: GWTRQ) is a water  
purification and services company with "clearly" innovative  
technologies, focused on the energy, oil and gas, process, HVAC  
and municipal markets. The company utilizes its proprietary  
technologies and services program to increase operating  
efficiencies, reduce water use and costs through its'  
comprehensive water management solutions. GWT's products treat  
over 10 billion gallons of water per day. GWT, through its former  
subsidiaries, has an established client base of over 500 customers  
in more than 25 countries worldwide and cumulative revenues in  
excess of $350 million. Some of these customers include: YORK  
International, Exelon, U.S. Air Force, DaimlerChrysler, General  
Electric.

The Company filed for Chapter 11 protection on May 14, 2003  
(Bankr. Colo. Case No. 03-19278).  Robert Padjen, Esq., at Rubner  
Padjen and Laufer, LLC, represents the Debtor in its restructuring  
efforts. When the Company filed for protection from its creditors,  
it listed $60,023,000 in total assets and $55,544,553 in total  
debts.


HARRAH'S ENTERTAINMENT: Issues 2nd Quarter Financial Results
------------------------------------------------------------
Harrah's Entertainment, Inc. (NYSE: HET) reported record second-
quarter revenues of $1.13 billion, up 4.5 percent from revenues of
$1.08 billion in the 2003 second quarter.

Property Earnings Before Interest, Taxes, Depreciation and
Amortization (Property EBITDA) rose 6.2 percent to a second-
quarter record of $301.1 million from Property EBITDA of $283.6
million in the year-earlier period. Second-quarter Adjusted
Earnings Per Share increased to a record 79 cents, up 6.8 percent
from the 74 cents achieved in 2003's second-quarter.

Property EBITDA and Adjusted EPS are not Generally Accepted
Accounting Principles (GAAP) measurements but are commonly used in
the gaming industry as measures of performance and as a basis for
valuation of gaming companies. In addition, analysts' per-share
earnings estimates for gaming companies are comparable to Adjusted
EPS. Reconciliations of Adjusted EPS to GAAP EPS and Property
EBITDA to income from operations are attached to this release.

Second-quarter income from operations rose 10.4 percent to a
record $202.4 million from $183.3 million in the year-earlier
quarter. Second- quarter net income was a record $90.2 million, up
17.6 percent from $76.7 million in the 2003 second quarter.
Diluted earnings per share from continuing operations for the 2004
second quarter was 79 cents, 14.5 percent higher than the 69 cents
achieved in the 2003 second quarter.

         Strong Demand, Diversification Drive Growth

"The second quarter proved the effectiveness of our unique loyalty
strategy, which is focused on the delivery of superior service and
recognition to more customers in more markets than any other
casino operator," said Gary Loveman, Harrah's Entertainment's
president and chief executive officer. "The marketing and
technological capabilities we use to promote customer loyalty
helped boost cross-market play that benefited our Southern Nevada
operations in particular, leading to another quarter of same-store
sales growth. We plan to apply these same capabilities to the
properties we will add to our portfolio when we close on the
Caesars transaction."

On July 15, Harrah's signed a definitive agreement to acquire
Caesars Entertainment, Inc., which operates 28 casinos, including
17 in the United States. Caesars has a significant presence in Las
Vegas, Atlantic City and Mississippi. The transaction is expected
to take about a year to complete.

Second-quarter 2004 same-store revenues increased 4.6 percent over
the year-ago period. Cross-market play -- gaming by customers at
Harrah's properties other than their "home" casino -- rose 11.9
percent from the second quarter of 2003. Tracked play -- gaming by
customers using the company's Total Rewards player cards --
increased 8.5 percent from the year-ago second quarter.

For the 2004 first half, revenues rose 4.6 percent to $2.24
billion from $2.14 billion in the year-ago period. Property EBITDA
increased to $588.6 million, up 3.8 percent from $567.3 million in
the 2003 first half. Adjusted EPS was $1.55, 4.0 percent higher
than the $1.49 achieved in the first six months of 2003.

First-half income from operations was $390.4 million, up 4.5
percent from $373.7 million in the 2003 first half. Net income
rose 9.0 percent to $172.0 million from $157.8 million in the
first six months of 2003. First- half diluted earnings per share
was $1.52, up 6.3 percent from $1.43 in the 2003 first half.

Among second-quarter highlights:

   -- The company sold $750 million of unsecured 5.50 percent    
      Senior Notes, due July 2010, in a private-placement
      transaction.  Net proceeds were used to reduce outstanding
      debt and for general corporate purposes. As part of the
      transaction, Harrah's became the first major casino company
      to include a minority investment-banking firm in a debt
      offering.

   -- Harrah's also reduced the interest rate, extended the
      maturity date and increased the borrowing capacity of its
      bank credit facilities to $2.5 billion from $1.9625 billion;
      the agreement also allows an increase in the total borrowing
      capacity up to $3 billion if Harrah's and its bank lenders
      agree.

   -- Harrah's hosted the largest World Series of Poker ever,
      attracting more than 13,000 players who generated a total
      prize pool of nearly $50 million, more than double the 2003
      total.  On July 6, ESPN began airing an unprecedented 22
      hours of original 2004 World Series programming that is
      expected to be repeated throughout the year.

   -- The new permanent casino at Louisiana Downs opened, raising
      the total number of slot machines at the facility to more
      than 1,400 and adding significantly enhanced non-gaming
      amenities for customers.

   -- Construction began on a $142 million, 450-room luxury hotel
      tower at Harrah's New Orleans.  The 26-story tower is
      expected to open in early 2006.

   -- Harrah's received Pennsylvania regulatory approval to buy a
      50 percent ownership interest in Chester Downs & Marina,
      L.L.C., which is licensed to develop a harness-racing
      facility near Philadelphia. Early in the third quarter, the
      Pennsylvania Legislature passed and the governor signed a
      bill allowing up to 3,000 slot machines at each of eight
      race tracks and four stand-alone slot parlors, with the
      potential for adding 2,000 more slots at each of those
      locations.

   -- The Rhode Island Legislature approved a November referendum
      on development of a Harrah's-owned casino venture with the
      Narragansett Tribe in West Warwick.  The governor
      subsequently vetoed the bill, and Harrah's is awaiting
      further legislative developments.

   -- The National Indian Gaming Commission approved a seven-year
      extension of Harrah's management contract for Harrah's
      Cherokee, which is owned by the Eastern Band of Cherokee
      Indians.

   -- Market Metrix, LLC named Harrah's the top-ranked casino
      operator in the measurement firm's latest quarterly
      customer-satisfaction survey of 35,000 American consumers.  
      The company's Web site, http://www.harrahs.com/ also  
      received the No. 1 ranking in the Hotel Reservations Web
      Site category.

On July 1, just after the end of the second quarter, Harrah's
completed its approximately $1.45 billion acquisition of Horseshoe
Gaming Holding Corp., which operates casino-entertainment
facilities in Hammond, Indiana; Tunica, Mississippi; and Bossier
City, Louisiana. The transaction raised Harrah's U.S. portfolio of
owned or managed properties to 28.

"Our second-quarter operating results were highlighted by stellar
performances at several properties and a continuation of the
positive same- store momentum that has gained steam since late
last year," Mr. Loveman said. "Those gains were driven by the
successful execution of the customer-loyalty strategy that
distinguishes Harrah's from other operators.

"In particular, continued refinements to our Total Rewards player-
card program contributed to the increases in cross-market and
tracked play," Mr. Loveman said. "And by the end of the second
quarter, we'd completed conversions on almost 90 percent of the
slot machines we plan to change to Fast Cash, the coinless slot
system that has proven so popular with our players.

"There were also several recent developments that position us
better than ever to deliver sustainable long-term earnings growth
through a variety of means," Mr. Loveman said. "The Horseshoe
Gaming acquisition enhances our position as the leading
distributor of casino entertainment in the United States -- a
position that will benefit the customers of both enterprises.

"We were delighted to welcome the more than 7,300 Horseshoe
employees to the Harrah's family," Mr. Loveman said. "They've done
a terrific job of delivering on the promises the Horseshoe brand
makes to its customers, and we look forward to working with and
learning from them.

"During the second quarter, our industry-leading financial
strength and investment-grade credit rating enabled us to sell
$750 million of senior notes and increase our bank borrowing
capacity," Mr. Loveman said.

"We are continuing to grow our existing properties," he said.
"During the second quarter, for example, we opened our permanent
casino at Louisiana Downs and began construction on a 450-room
luxury hotel at Harrah's New Orleans. And we are scheduled to open
a 200-room hotel at Harrah's St. Louis later this quarter, adding
to the substantially expanded food and beverage facilities that
opened in the second quarter. Finally, Harrah's North Kansas City
is developing a 206-room hotel tower and casino expansion that
will include four new restaurants and a second parking garage.

"We're extremely excited about the Caesars transaction, which will
solidify our position as the preeminent distributor of casino
entertainment," Mr. Loveman said. "We will gain first-class assets
in three major markets -- Las Vegas, Atlantic City and Mississippi
-- that have stable tax environments and casino-entertainment
clusters that draw customers from other areas.

"We will combine into one company three of the most storied brands
in gaming -- Caesars, Horseshoe and Harrah's, all with a great
tradition of success," Mr. Loveman said. "And we'll strengthen our
reputation for customer- service excellence by uniting the best
management and employee teams in the gaming industry.

"We believe there is a big opportunity for us to apply our
capabilities to enhance the value of the Caesars assets, deliver
long-term gains to shareholders and provide rewarding careers to
employees," Mr. Loveman said. "Our employees have enjoyed great
successes using those tools, and we believe the Caesars team will
be equally successful.

"We admire what Caesars' management and employees have
accomplished without having access to the industry-leading
marketing and technological capabilities that have driven strong
same-store sales gains at Harrah's over the past three years," Mr.
Loveman said. "We're confident they'll find our capabilities will
help them achieve similar results.

"In the past three months, we have recorded continued same-store
revenue growth, increased earnings, seen a number of potential
development projects enter the pipeline, added three premier
casinos to our portfolio and announced an acquisition that would
double our size and provide superior growth opportunities," Mr.
Loveman said. "I believe our future has never looked brighter."

Continued strong cross-market play at Harrah's Las Vegas and the
Rio and new entertainment attractions in Lake Tahoe propelled
Harrah's West Region to record results.

Southern Nevada revenues rose 23.2 percent, income from operations
gained 54.6 percent and Property EBITDA increased 35.6 percent
from the 2003 second quarter.

Northern Nevada revenues rose 5.2 percent to a record level from
the second quarter last year, while income from operations gained
18.3 percent and Property EBITDA was 14.7 percent higher.

"With each Southern Nevada property posting record results and
Lake Tahoe performing well, we continue to be enthusiastic about
the West Region outlook," said Tim Wilmott, Harrah's chief
operating officer.

For the 2004 first half, West Region revenues were up 13.4
percent, income from operations rose 38.3 percent and Property
EBITDA gained 24.2 percent from the first half of 2003.

Results for Harrah's two Atlantic City properties fell due to
competition from the city's first new hotel-casino in more than a
decade. Second-quarter revenues declined 5.9 percent, income from
operations fell 17.3 percent and Property EBITDA decreased 11.4
percent from the year-earlier period.

"As the economy continues to improve and we reach the anniversary
of the opening of the new competitor facility, we look forward to
a return to growth in Atlantic City," Wilmott said.

For the first half, East Region revenues declined 2.3 percent,
income from operations fell 9.3 percent and Property EBITDA was
4.5 percent lower than in the year-earlier period.

The North Central Region's second-quarter results benefited from
legislation lowering the gaming-tax rate affecting the Bluffs Run
racetrack casino in Iowa. The company had been accruing gaming
taxes at a higher rate as it awaited the resolution of the rate
issue, and recorded a $3.7 million adjustment of the first-quarter
accrual due to the reduction in the tax rate. The company also
adjusted its tax accrual for prior periods by $16.6 million, and
recorded this component of the adjustment to the write-downs,
reserves and recoveries account. The prior-periods component is
excluded from Adjusted EPS.

Second-quarter North Central Region revenues were flat, while
income from operations rose 40.3 percent and Property EBITDA
increased 11.3 percent.

Strong gains at Harrah's East Chicago and Metropolis facilities
offset lower results stemming from the revised operations model
implemented at Harrah's Joliet following last year's Illinois tax
increase. As a result, combined Illinois and Indiana second-
quarter revenues fell 2.1 percent, but income from operations rose
9.3 percent, and Property EBITDA was 8.6 percent higher.

The company's two Iowa properties posted record second-quarter
results, with revenues 6.8 percent higher than in the year-ago
period. Income from operations more than tripled and Property
EBITDA increased 66.4 percent due in part to the tax-accrual
adjustment.

Combined second-quarter revenues at Harrah's two Missouri
properties were about level with the 2003 second quarter's, but
income from operations declined 21.1 percent and Property EBITDA
decreased 10.1 percent. Improved results at St. Louis were more
than offset by declines in Kansas City, which faced increased
competition due to significant expansions by two of the three
competitors in that market.

For the 2004 first half, North Central Region revenues were flat,
income from operations was 5.5 percent higher and Property EBITDA
was down 3.0 percent from the 2003 first half.

At Harrah's Louisiana and Mississippi properties, revenues rose
3.8 percent, income from operations increased 2.2 percent and
Property EBITDA was 0.5 percent higher than in the year-ago second
quarter.

The 2004 second quarter included results from Harrah's Shreveport
through May 19, when that property was sold to another operator,
and from Louisiana Downs, where 900 slot machines were introduced
in late May 2003; the total was increased to just over 1,400 in
May 2004.

"Combined, our New Orleans and Lake Charles, Louisiana, properties
posted double-digit gains in revenues and income from operations,"
Wilmott said.

First-half revenues for the South Central properties rose 7.9
percent, income from operations increased 2.3 percent and Property
EBITDA was flat compared with the first half of 2003.

               Managed Properties And Other Items

Second-quarter management-fee revenues were down 20.6 percent from
the year-ago period due to lower fee schedules associated with
contract extensions.

Second-quarter development costs rose to $6.1 million from $3.6
million in the 2003 second quarter.

Corporate expense was level with the 2003 second quarter. Interest
expense was 1.2 percent higher than in the 2003 second quarter.

During the second quarter, Harrah's Entertainment made a $10
million endowment to The Harrah's Foundation, a non-profit
corporation that provides charitable contributions to qualifying
organizations in communities served by Harrah's. The $10 million
expense resulting from this action is recorded in write-downs,
reserves and recoveries. Also included in write-downs, reserves
and recoveries is the $16.6 million adjustment of the prior period
gaming tax accruals for the Bluffs Run property resulting from the
passage of legislation lowering the gaming-tax rate.

The effective income tax rate after minority interest for the 2004
second quarter was 37.1 percent, similar to the full year 2003 and
the first quarter of 2004.

On July 1, the company's Horseshoe Gaming subsidiary called for
redemption of all $535 million of its outstanding 8 5/8 percent
Senior Subordinated Notes, due July 2009. Noteholders will receive
a redemption price equal to 104.313 percent of the principal
amount of the notes, plus accrued and unpaid interest through the
redemption date of August 2, 2004.

Founded 66 years ago, Harrah's Entertainment, Inc. owns or manages
through various subsidiaries 28 casinos in the United States,
primarily under the Harrah's brand name. Harrah's Entertainment is
focused on building loyalty and value with its valued customers
through a unique combination of great service, excellent products,
unsurpassed distribution, operational excellence and technology
leadership.

                          *   *   *

As reported in the Troubled Company Reporter's July 19, 2004
edition, Fitch Ratings has affirmed the following long-term debt
ratings of Harrah's Entertainment and placed the long-term ratings
of Caesars Entertainment on Rating Watch Positive.  

                          HET

               --Senior secured debt 'BBB-';
               --Senior subordinated debt 'BB+'.

                          CZR

               --Senior unsecured debt 'BB+';
               --Senior subordinated debt 'BB-'.

The action follows the July 15, 2004 announcement that HET has
reached an agreement to purchase CZR for $9.44 billion comprised
of $1.8 billion cash, 66.3 million shares of HET common stock
($3.3 billion), and the assumption of $4.3 billion in debt. This
represents an 8.4 times (x) multiple of CZR's estimated 2004  
EBITDA of $1.1 billion. One third of the purchase price will be
paid in cash and two-thirds in stock. The combined entity will
have the capacity to begin reducing debt from free cash flow and
asset sales, with the pace of debt reduction contingent on the  
level of discretionary spending and timing of asset sales. Fitch's
Positive Rating Watch of CZR is expected to be resolved by  
successful completion of the transaction. The rating(s)/ and of  
outlook would be adversely affected if HET is unable to reduce  
debt in a timely manner or chooses to pursue additional large-
scale debt-financed acquisitions and/or growth projects.


HEXCEL CORP: Reports $89 Million Stockholders' Deficit at June 30
-----------------------------------------------------------------
Hexcel Corporation (NYSE/PCX: HXL) reported results for the second
quarter of 2004.  Net sales for the second quarter of 2004 were
$272.2 million as compared to $234.1 million for the second
quarter of 2003.  In constant currency, revenues for the second
quarter of 2004 were $267.2 million, or 14.1%, higher than the
second quarter of 2003.

Operating income for the second quarter of 2004 was $27.4 million
compared to $18.8 million for the same quarter last year.
Depreciation expense for the quarter at $13.2 million was $0.3
million higher than the prior year, while business consolidation
and restructuring expenses were $0.9 million compared to $0.7
million in the second quarter of 2003.

Net income for the quarter was $8.8 million compared to $4.8
million for the same quarter of 2003. After reflecting deemed
preferred dividends and accretion, net income available to common
shareholders for the quarter was $5.7 million compared to net
income of $1.8 million for the second quarter of 2003.

                 Chief Executive Officer Comments

Commenting on the quarter's results, Mr. David E. Berges,
Chairman, Chief Executive Officer and President, said, "In the
second quarter, we again demonstrated the earnings leverage we can
obtain from higher sales revenues. Compared to the same period
last year, operating income increased by $8.6 million on a revenue
gain of $38.1 million and reached 10% of sales for the first time
since the third quarter of 1998. Diluted earnings per share were
$0.10 for the quarter reflecting not only our improved operating
performance, but also lower interest expense and a net $0.9
million increase in equity in earnings due to the improving
performance by our joint ventures."

Mr. Berges observed, "Year-on-year revenue growth was again led by
sales of ballistic reinforcement fabrics used in the manufacture
of soft body armor. During the quarter, the Company's major
customers received additional contract awards from the U.S.
government. The supply chain for these materials is now capacity
limited, but the significant order backlog held by the Company's
customers suggests that strong production levels will continue for
some time. We also had good revenue gains from commercial
aerospace, space & defense, wind energy and electronics."

Mr. Berges concluded, "With many of our markets on a growth track,
we now expect our revenues to marginally exceed the high end of
our $1 billion revenue guidance for 2004 and believe we are
clearly on target to generate net income for the year."

                         Revenue Trends

As in recent quarters, the year-over-year shift in foreign
exchange rates has continued to increase revenues compared to
prior period actual results. To provide a better understanding of
the real underlying trends, we have again provided constant
currency revenues in our discussion of revenue trends by market.
Actual sales by market segment are provided in Table A.

In constant currency, Commercial Aerospace revenues were $112.9
million for the second quarter of 2004, an increase of $11.5
million, or 11.3%, over the revenues in the same quarter of 2003.
The year-on-year increase reflects the stabilization in aircraft
build rates, a favorable change in mix of aircraft, and the
benefit of the new Airbus A380 program.

Industrial market revenues for the quarter in constant currency
were $90.6 million, an increase of $19.2 million, or 26.9%,
compared to revenues of $71.4 million in the second quarter of
2003. The largest portion of this revenue increase came from sales
of reinforcement fabrics used in military soft body armor
applications. Ballistic revenues were up sharply compared to both
the second quarter, 2003 and the first quarter, 2004. Sales to
wind energy applications also increased year-on-year, and are
expected to continue to contribute growth in the future.

Space & Defense revenues in constant currency of $48.4 million
were up $0.6 million, or 1.3%, from the second quarter of 2003,
despite the termination of the Comanche program that contributed
$4.0 million of revenue to the same quarter last year. Year-on-
year growth continued to be driven by increased production of the
F-22 Raptor, and higher demand for many U.S. and European
helicopter and blade replacement programs.

Electronics revenues for the quarter in constant currency were
$15.3 million compared to the 2003 second quarter revenues of
$13.5 million. As noted in previous releases, the Company's
electronics product mix continues to shift towards higher-end
applications. This focus on advanced technology materials and
specialty applications, together with some recovery in industry
demand, is contributing to enhanced performance in this market.

                     Other Income/Expense

Other expense was $2.0 million for the second quarter of 2004, as
the Company recognized a loss on the early retirement of debt and
recorded an accrual for certain legal matters. These expenses were
partially offset by gains attributable to the sale of securities
obtained through a de-mutualization of an insurance company and
the sale of surplus land at one of its U.S. plants.

In the second quarter of 2003, the Company recognized other income
of $3.2 million due to a gain on the sale of certain assets and a
gain resulting from the expiration of a contingent liability
resulting from the prior sale of a business.

                           Debt

Total debt, net of cash, decreased in the quarter by $23.5 million
to $422.8 million as of June 30, 2004. During the quarter, the
Company received $6.5 million in net proceeds from the sale of
surplus land and collected $1.5 million of dividends from an
affiliated company, contributing to this net debt reduction. The
Company used some of its excess cash on hand to repurchase $11.8
million principal amount of its 9.75% senior subordinated notes,
due 2009 (see Table E for the components of net debt).

Interest expense during the quarter was $11.9 million compared to
$13.9 million in the second quarter of 2003. The decline in
interest expense reflects the substantial reduction in total debt
during 2003 and continued reductions during the first six months
of 2004 (see Table C for details of the components of interest
expense).

The non-cash deemed preferred dividends and accretion expense
relating to the mandatorily redeemable convertible preferred stock
was $3.1 million and $3.0 million for the second quarter 2004 and
2003, respectively.

Hexcel Corporation is a leading advanced structural materials
company. It develops, manufactures and markets lightweight, high-
performance reinforcement products, composite materials and
composite structures for use in commercial aerospace, space and
defense, electronics, and industrial applications.

At June 30, 2004, Hexcel Corporation's balance sheet showed a
stockholders' deficit of $89.2 million compared to a deficit of
$94.1 million at March 31, 2004 and a deficit of $93.4 million at
December 31, 2003.

                        *   *   *

As reported in the Troubled Company Reporter's July 12, 2004
edition, Standard & Poor's Ratings Services revised its outlook on
Hexcel Corp. to positive from stable.  At the same time, Standard
& Poor's affirmed its ratings, including the 'B' corporate credit
rating, on the advanced structure manufacturer. The firm has
approximately $465 million in rated debt outstanding.

"The outlook revision reflects an improving financial profile due
to lower debt levels and cost reductions, as well as brightening
prospects for a recovery in the commercial aerospace industry,"
said Standard & Poor's credit analyst Christopher DeNicolo. In
response to a difficult operating environment, Hexcel instituted a
restructuring program, which has led to a $66 million reduction in
cash fixed costs. As a result, operating margins have returned to
the low teens percent area from low single digits in 2001. The
issuance of $125 million in secured notes and $125 million of
preferred stock in March 2003, with the proceeds used to reduce
debt by a net $90 million, eliminated near-term liquidity concerns
and improved the company's capital structure, which remains highly
leveraged. Hexcel was able to reduce debt by a further $48 million
in 2003 using free cash flows and proceeds from asset sales. As a
consequence, debt to EBITDA declined to below 4.5x in 2003 from
over 6x in 2002. The return to profitability in the first quarter
of 2004 follows several years of losses.


INTERACTIVE MOTOR: Completes Mall Conversions with Checker Flag
---------------------------------------------------------------
Interactive Motorsports and Entertainment Corporation (OTCBB:IMTS)
Chairman and CEO William R. Donaldson reports it completed five
mall conversions with Checker Flag Lightning.

The mall racing centers that have converted to Checker Flag
Lightning, under the terms of the lease assignment and revenue
share agreement, between Checker Flag Lightning and IMTS' wholly
owned subsidiary Perfect Line, Inc. announced on March 23, are:

         Mall                 Location       Completion Date
         ----                 --------       ---------------
     Concord Mills         Concord, N.C.         May 20
     Opry Mills            Nashville, Tenn.      June 11
     Katy Mills            Katy, Tex.            June 25
     Mall of Georgia       Buford, Ga.           July 13
     Riverchase Galleria   Birmingham, Ala.      July 15

Of the remaining two mall racing centers to convert under the
agreement, the company has notified Woodfield Mall in Schaumburg,
Ill., of its right to terminate that lease on July 31, 2004, and
six of the race simulators are scheduled to be installed in
September into a new Checker Flag Lightning mall site at Gurnee
Mills, Gurnee, Ill. (located off of I-94 between Chicago and
Milwaukee, Wis.). Negotiations are still underway with regard to
the final racing center conversion at the Palisades Center, West
Nyack, N.Y.

Checker Flag Lightning is also on schedule to open its mall
merchandise and racing center on August 4 at the new Jordan Creek
Town Center in West Des Moines, Iowa. The site will include 8 of
the company's race cars simulators under a revenue share
agreement.

At March 31, 2004, Interactive Motorsports' balance sheet shows a
stockholders' deficit of $2,656,988 compared to a deficit of  
$2,397,995 at December 31, 2003.


JOSTENS HOLDING: S&P Places Ratings on CreditWatch Negative
-----------------------------------------------------------
Standard & Poor's Ratings Services placed all its outstanding
ratings on Jostens Holding Corp. and its indirect subsidiary
Jostens Inc., including the companies' 'B+' corporate credit
ratings, on CreditWatch with negative implications. Standard &
Poor's also placed all its outstanding ratings on Von Hoffmann
Corp., as well as those of AKI Holding Corp. and subsidiary
AKI Inc., on CreditWatch with negative implications. Negative
implications means that the ratings could be lowered or affirmed
following the completion of Standard & Poor's review.

The CreditWatch placement follows the recent announcement by
private equity firm Kohlberg Kravis Roberts & Co. that it intends
to recapitalize Jostens and combine it with Von Hoffman Corp. and
AKI in a transaction valued at $2.2 billion.

"Standard & Poor's expects that the combined entity will be highly
leveraged, and that the proposed transaction could result in a
weaker financial profile for the combined companies," said
Standard & Poor's credit analyst David Kang. "We will continue to
monitor developments and will meet with management to discuss the
new entity's future capital structure and financial policies
before resolving the CreditWatch listing."

Minneapolis, Minnesotta-based Jostens is a leading supplier of
yearbooks, class rings, graduation products, and photography
services. St. Louis, Missouri-based Von Hoffman is a leading
manufacturer of case-bound and softcover instructional materials
in the U.S. Chattanooga, Tennessee-based AKI is the leading global
marketer and manufacturer of cosmetic sampling products--including
fragrance, skin care, and makeup samplers.


JP MORGAN: Fitch Affirms Low-B Ratings of 6 2002-CIBC5 Classes
--------------------------------------------------------------
Fitch Ratings affirms JP Morgan Chase Commercial Mortgage
Securities Corporation's commercial mortgage pass-through
certificates, series, as follows:

               --$290.5 million class A-1 'AAA';
               --$487.2 million class A-2 'AAA';
               --Interest-only classes X-1 and X-2 'AAA';
               --$36.4 million class B 'AA';
               --$13.8 million class C 'AA-';
               --$27.6 million class D 'A';
               --$13.8 million class E 'A-';
               --$28.9 million class F 'BBB';
               --$16.3 million class G 'BBB-';
               --$18.8 million class H 'BB+';
               --$12.6 million class J 'BB';
               --$5.0 million class K 'BB-';
               --$5.0 million class L 'B+';
               --$8.8 million class M 'B';
               --$2.5 million class N 'B-'.

Fitch does not rate the $17.6 million class NR.

The rating affirmations reflect the consistent loan performance
and minimal reduction of the pool collateral balance since
issuance. As of the June 2004 distribution date, the pool has paid
down 1.9% to $984.8 million from $1.0 billion at issuance.

As of year-end 2003, the weighted average debt service coverage
ratio for the pool had increased to 1.56 times (x) from 1.52x as
of YE 2002 for the same loans. The weighted average DSCR was
calculated using financial statements collected by the master
servicer, Wachovia Securities, for 68.9% of the loans remaining in
the pool.

Two loans (0.85%) are currently 30 days delinquent, including the
one specially serviced loan (0.75%) in the pool. The delinquent
and specially serviced loan is secured by a multifamily property
located in Winston-Salem, NC. The special servicer is currently
working with the borrower on a possible forbearance agreement.

Fitch reviewed the two credit assessed loans in the pool, the
Simon Mall Portfolio (10.5%) and the Avion Portfolio (4.7%). Both
loans maintain investment-grade credit assessments. The DSCR for
each loan is calculated using servicer-provided net operating
income less required reserves divided by debt service payments
based on the current loan balance using a Fitch-stressed refinance
constant.

The Simon Portfolio is secured by four regional malls ranging from
approximately 390,000 to 1.1 million square feet and located in
Ohio, Texas, Indiana, and Wisconsin. The subject loan consists of
an A note with a total outstanding principal balance as of June
2004 of $105.0 million and a B note with a current outstanding
principal balance of $17.5 million. The 2003 DSCR remains flat at
1.45 times (x). The weighted average in-line occupancy increased
to 93.4% as of YE 2003, compared with 89.7% at issuance.

The Avion Portfolio is secured by seven suburban office and flex
buildings in Chantilly, VA, with a total of 586,466 square feet.
The DSCR as of YE 2003 increased to 1.83x, compared with 1.71x at
issuance. The weighted average occupancy increased to 95% from 89%
during the same period.


JP MORGAN: Fitch Affirms Low-B Ratings of 6 2002-CIBC4 Classes
--------------------------------------------------------------
Fitch Ratings affirms J.P. Morgan Chase Commercial Mortgage
Securities Corporation's commercial mortgage pass-through
certificates, series as follows:

                    --$35.2 million class A-1 'AAA';
                    --$165 million class A-2 'AAA';
                    --$403.2 million class A-3 'AAA';
                    --Interest-only classes X-1 and X-2 'AAA';
                    --$32 million class B 'AA';
                    --$34 million class C 'A';
                    --$10 million class D 'A-';
                    --$24 million class E 'BBB';
                    --$12 million class F 'BBB-';
                    --$14 million class G 'BB+';
                    --$12 million class H 'BB';
                    --$4 million class J 'BB-';
                    --$6 million class K 'B+';
                    --$8 million class L 'B';
                    --$4 million class M 'B-'.

Fitch does not rate $16 million class NR.

The rating affirmations reflect the consistent overall loan
performance and minimal reduction of the pool collateral balance
since closing. As of the July 2004 distribution date the pool has
paid down 2.5% to $779.1 million from $798.9 million at issuance.

As of year-end 2003, the weighted average debt service coverage
ratio for the pool has increased to 1.57 times (x), from 1.51x as
of YE 2002 for the same loans. However, the YE 2003 performance
has decreased since the 1.85x DSCR reported at issuance. The
weighted average DSCR was calculated using financial statements
collected as of July 2004 by the master servicer, Midland Loan
Services, Inc., for 61.67% of the loans remaining in the pool.

Of concern in the transaction are three loans (2.54% of the pool)
in special servicing. The first loan (1.09%) is secured by a
multifamily property located in Chamblee, GA, a suburb of Atlanta.
The special servicer is acquiring the property through a deed-in-
lieu, with the transfer set to close at the end of July 2004. The
second loan (0.81%), which is secured by a retail property located
in Brooklyn Center, MN, became REO in November 2003. While Fitch
expects losses associated with these loans, the non-rated Class N
is sufficient to absorb them at this time. The third loan in
special servicing (0.61%) is current and the special servicer is
working resolve errors that caused the special servicing transfer.

Fitch reviewed credit assessment of the Highland Mall loan (8.6%).
The DSCR for the loan is calculated using borrower provided net
operating income less required reserves divided by debt service
payments based on the current balance using a Fitch stressed
refinance constant. Based on its stable to improved performance,
the loan maintains an investment grade credit assessment.

The Highland Mall loan is secured by a 407,170 square foot retail
property located in Austin, TX. The stressed DSCR for the trailing
twelve months ending December 2003 was 1.51x compared to 1.47 at
issuance.


JP MORGAN: Fitch Affirms Low-B Ratings of 6 2001-CIBC2 Classes
--------------------------------------------------------------
Fitch Ratings affirms J.P. Morgan Chase Commercial Mortgage
Securities Corporation's commercial mortgage pass-through
certificates, series as follows:

                    --$18 million class A-1 'AAA';
                    --$138.8 million class A-2 'AAA';
                    --$561.4 million class A-3 'AAA';
                    --Interest-only classes X-1 and X-2 'AAA';
                    --$38.5 million class B 'AA';
                    --$38.5 million class C 'A';
                    --$14.4 million class D 'A-';
                    --$28.9 million class E 'BBB';
                    --$12 million class F 'BBB-';
                    --$25.2 million class G 'BB+';
                    --$7.2 million class H 'BB';
                    --$7.2 million class J 'BB-';
                    --$12 million class K 'B+';
                    --$4.8 million class L 'B';
                    --$4.8 million class M 'B-'.

Fitch does not rate $17.7 million class NR.

The rating affirmations reflect the consistent overall loan
performance and minimal reduction of the pool collateral balance
since closing. As of the July 2004 distribution date the pool has
paid down 3.36% to $929.4 million from $961.7 million at issuance.

As of year-end 2003, the weighted average debt service coverage
ratio for the pool has decreased to 1.48 times (x), from 1.54 at
issuance. The weighted average DSCR was calculated using financial
statements collected as of July 2004 by the master servicer,
Midland Loan Services, Inc., for 67.3% of the loans in the pool.

Of concern are two loans (0.93%) that are in special servicing.
The first loan (0.51%) is secured by a retail property located in
Ann Arbor, MI. The special servicer successfully bid for the
property in a January 2004 foreclosure sale. The borrower,
however, is challenging the title transfer, set for August 2004.
The second loan (0.42%) is secured by a self-storage facility in
Mesa, AZ. A forbearance agreement has been executed and the loan
remains current.

The largest loan in the pool, Collin Creek Mall (7.72%) maintains
an investment grade credit assessment. It is secured by 332,055
square feet of in-line space of a regional mall in Plano, TX. As
of year-end 2003, occupancy at the property is 95%. The Fitch
stressed debt service coverage ratio has increased to 1.68 times
(x) as of YE 2003 from 1.47x at issuance, an improvement of 14.3%.
The DSCR for the loan was calculated using borrower provided net
operating income less required reserves divided by debt service
payments based on the current balance using a Fitch stressed
refinance constant.


KAISER ALUMINUM: Wants Court to Okay Wash. State Condemnation Pact
------------------------------------------------------------------
On July 13, 2001, the State of Washington, on behalf of the
Washington State Department of Transportation, filed multiple
condemnation actions in Spokane County Superior Court.  The
condemnation actions sought to obtain portions of seven different
parcels of property owned by Kaiser Aluminum & Chemical
Corporation in Mead, Spokane County, Washington for construction
of a state highway.  The dispute between the parties arose from
Washington's condemnation of Parcel 6, comprising 35.2 acres of
land.

Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, relates that due to the complexity of the
issues and the size of the remaining parcel, the Kaiser Aluminum
Corporation Debtors and Washington could not agree on the just
compensation for the condemned portions of Parcel 6.  On September
26, 2001, the parties entered into a stipulation whereby the
Debtors, in exchange for $1,157,500, granted Washington possession
of the condemned portion of Parcel 6 of the Debtors' property
pending determination of just compensation for the condemned
properties.

Ms. Newmarch states that at the time of the Condemnation Action,
Parcel 6 consisted of 452 acres of undeveloped vacant land
located immediately to the north of Parcel 1 -- on which the
Debtors' former Mead aluminum reduction facility is located --
and traditionally acted as a buffer to the Mead aluminum
reduction smelter from other developed property in the vicinity
of the smelter.

The Debtors and Washington submitted the condemnation dispute
regarding Parcel 6 to mediation on May 6, 2004.  The mediation
resulted in a settlement of the Condemnation Action.

Under the Settlement Agreement, Washington will pay $3,921,250 --
in addition to the $1,157,500 previously paid -- to the Debtors
for the condemned portions of Parcel 6 and the loss of access to
the state highway from the remainder of Parcel 6, in full
settlement of all claims for just compensation upon payment of
the additional proceeds.  Upon final payment and approval by the
Court, Washington will become the owner of the condemned property
and all related property rights.

On May 26, 2004, subject to and pursuant to the Settlement
Agreement, the Superior Court of the State of Virginia approved a
stipulated judgment reflecting the settlement and the terms of
the Settlement Agreement, including the requirement of Bankruptcy
Court approval.  Washington paid the additional compensation into
the registry of the Court.

The Debtors ask the U.S. Bankruptcy Court for the District of
Delaware to approve the Settlement Agreement pursuant to Rule 9019
of the Federal Rules of Bankruptcy Procedure.

Ms. Newmarch maintains that the amounts to be paid pursuant to
the Settlement Agreement are more than fair given the nature and
location of the condemned property and the values obtained
recently for various other parcels in the vicinity.  In addition,
the imposition of the Debtors' personnel and the immediate
collection of the amounts upon consummation of the Settlement
Agreement warrant settlement with Washington.

Headquartered in Houston, Texas, Kaiser Aluminum Corporation
operates in all principal aspects of the aluminum industry,
including mining bauxite; refining bauxite into alumina;
production of primary aluminum from alumina; and manufacturing
fabricated and semi-fabricated aluminum products.  The Company
filed for chapter 11 protection on February 12, 2002 (Bankr. Del.
Case No. 02-10429).  Corinne Ball, Esq., at Jones, Day, Reavis &
Pogue, represent the Debtors in their restructuring efforts. On
September 30, 2001, the Company listed $3,364,300,000 in assets
and $3,129,400,000 in debts. (Kaiser Bankruptcy News, Issue No.
46; Bankruptcy Creditors' Service, Inc., 215/945-7000)  


LAM RESEARCH: Net Income Doubles to $52 Million in Second Quarter
-----------------------------------------------------------------
Lam Research Corporation (Nasdaq:LRCX) reported earnings for the
quarter ended June 27, 2004.  Revenue for the period was $329.6
million, and net income was $52.7 million compared to revenue of
$231.1 million and net income of $19.2 million for the March 2004
quarter. Gross margin and operating expenses for the June 2004
quarter were $159.2 million and $90.7 million, respectively.

The Company believes the presentation of ongoing results, which
excludes certain special items, is useful for analyzing ongoing
business trends. This presentation removes the effects of CMP
impairment charges, net gains associated with the early retirement
of the Company's 4% notes and the related interest rate swap, and
prior period expense recognition connected with the Company's
outsourcing strategy and consolidation. Tables that provide
reconciliations of ongoing performance to results under U.S.
Generally Accepted Accounting Principles (GAAP) are included at
the end of this press release.

Ongoing net income increased by 159 percent, driven by sequential
revenue growth in excess of 42 percent combined with the leverage
from the Company's business model. Ongoing gross margin for the
June 2004 quarter was 49 percent of revenue due to volume growth,
continued expense control, and improved utilization of factory and
field resources. In the period, ongoing operating expenses
increased to $90.1 million, primarily due to planned increases in
variable compensation and investments in information systems.
Ongoing net income of $51.5 million in the June 2004 quarter
compares with ongoing net income of $19.9 million for the previous
quarter.

Continued growth in capital investment by semiconductor
manufacturers resulted in new orders of $408 million, which
represent a 17 percent increase over the prior period. The
geographic distribution of new orders as well as revenue is shown
in the following table:

                Region          New Orders   Revenue
                ------          ----------   -------
                North America       18%         14%
                Europe              10%         16%
                Japan               10%         12%
                Asia Pacific        62%         58%

Cash, short-term investments and restricted cash balances totaled
$541.9 million at the end of June. Earnings leverage and the
Company's continuing focus on working capital management generated
cash flow from operating activities of approximately $82 million
during the quarter. As planned, the Company settled its interest
rate swap and repaid its 4% convertible notes in June 2004, two
years prior to maturity, resulting in a net cash outlay of $292.1
million. Deferred revenue and profit balances were $196.9 million
and $108.4 million, respectively, and backlog was $402.9 million
at the end of the quarter.

"The June quarter's financial results clearly indicate that our
business model delivers the performance that we predicted, and
this model will maximize our profit and cash generation over the
course of an entire cycle," stated James W. Bagley, chairman and
chief executive officer of Lam. "The growth in revenue and
bookings substantiates the market position gains that we have
described throughout the downturn. Our financial achievement and
our success in the etch market are the products of outstanding
performance by our employees," Bagley concluded.

Lam Research Corporation is a major supplier of wafer fabrication
equipment and services to the world's semiconductor industry.
Lam's common stock trades on the Nasdaq National Market under the
symbol LRCX. The Company's World Wide Web address is
http://www.lamrc.com/

                           *   *   *
         
As reported in the Troubled Company Reporter's June 24, 2004
edition, Standard & Poor's Ratings Services revised its outlook on
Fremont, Calif.-based LAM Research Corp. to stable from negative.
Ratings, including the 'BB-' corporate credit rating, were
affirmed. The outlook change reflects recently improving operating
performance, a function of cyclically recovering markets and
stepped-up semiconductor capital investment. LAM's financial
profile has also improved with the calling of the company's
subordinated convertible bond for cash on June 7, eliminating its
sole remaining piece of outstanding funded debt.

LAM Research has a leading share of a niche segment of the  
semiconductor capital equipment market. The company's tools  
deposit, etch, and polish microscopically thin layers on the  
surface of silicon wafers. Competitors include the diversified  
Applied Materials Inc. and Tokyo Electron Limited.

"The ratings reflect LAM's narrow business focus and limited  
profitability base within the highly volatile semiconductor  
capital equipment market, as well as the company's leveraged  
financial profile," said Standard & Poor's credit analyst Joshua  
Davis. "These factors are offset, in part, by LAM's leadership  
market position in its niche segment, combined with adequate  
financial flexibility deriving from its liquid financial profile."


LOUDEYE CORP: Reports 16 New Customer Contracts to Thwart Piracy
----------------------------------------------------------------
Loudeye Corp. (Nasdaq: LOUD), the worldwide leader in business-to-
business digital media solutions, reports 16 new customer
contracts for its Overpeer services with estimated value worth
several million dollars over the life of the contracts.  The new
contracts more than double the current revenue run rate of
Loudeye's Overpeer business compared to the revenue run rate prior
to Loudeye's acquisition of Overpeer, Inc.

"There are billions of illicit transactions occurring every month
on peer-to-peer networks around the world and this number is
growing weekly. That translates into billions of dollars of lost
revenue and signals a critical demand for content owners to take
immediate action to protect their content," said Jeff Cavins,
Loudeye's president and chief executive officer. "These recent
customer wins, and the overall demand we've seen for our anti-
piracy solutions among new customers, are significant endorsements
to the strength of our Overpeer service in protecting copyrighted
works from widespread illicit sharing."

Loudeye's new customers in its Overpeer business represent major
content owners across the music, film/video, game and software
industries. The addition of new customers, as well as the
expansion of current contracts, demonstrates the growing
importance and urgency in deploying anti-piracy strategies among
content owners. In response to the increasing demand, Loudeye has
taken a number of steps in past months to enhance the capabilities
and reach of its piracy protection solutions including:

   -- Supporting all of the most popular P2P protocols.  
      Loudeye's Overpeer solutions cover more than 90% of traffic
      on the major peer-to-peer networks worldwide

   -- Tripling the infrastructure supporting its Overpeer service,
      to provide the highest level of protection in the industry

   -- Introducing guaranteed anti-piracy performance, including
      Overpeer Titanium, the industry's first anti-piracy service
      level agreement (SLA) guaranteed at 99% effectiveness

   -- Expanding marketing information and data mining available on
      password-protected customer extranet, and

   -- Providing geographic targeting and language service for non-
      English titles

"Expanded piracy protection is rapidly becoming an integrated part
of content owners' digital distribution strategies," said Marc
Morgenstern, vice president and general manager of Loudeye's
digital media asset protection and promotion business. "While a
digital distribution strategy provides cost efficient, inventory-
free, global reach to maximize revenue potential, content owners
must also ensure their valuable assets are not illegitimately
traded. This is an increasingly common belief among existing and
new customers, which is fueling the continued growth in our piracy
protection and promotion business."

Through its Overpeer service offering, Loudeye offers digital
media asset protection and promotion services for content owners
across the music, film/video, game and software industries. The
Overpeer Titanium service provides a service level agreement (SLA)
that guarantees 99% effectiveness in preventing the illicit
sharing of digital media across peer-to-peer networks. More
information is available at:

          http://www.loudeye.com/services/protection

Loudeye holds confidentiality agreements with customers in its
piracy protection and promotion line of business, prohibiting the
company from disclosing specific names of customers in this
service area.

                  About Loudeye Corp.

Loudeye is a worldwide leader in business-to-business digital  
media solutions and the outsourcing provider of choice for  
companies looking to maximize the return on their digital media  
investment.  Loudeye combines innovative products and services  
with the world's largest music archive and the industry's leading  
digital media infrastructure enabling partners to rapidly and cost  
effectively launch complete, customized digital media stores and  
services.  For more information, visit http://www.loudeye.com/

                        *   *   *

In its Form 10 Q For the quarterly period ended March 31, 2004  
filed with the Securities and Exchange Commission, Loudeye Corp.  
reports:  

"We may need to raise additional capital in the future, and if we  
are unable to secure adequate funds on terms acceptable to us, we  
may be unable to execute our business plan. If we raise additional  
capital, current stockholders may experience significant dilution.  

"As of March 31, 2004, we had approximately $34.8 million in cash  
and cash equivalents, marketable securities, and restricted  
investments. In the first quarter of 2004, we completed a private  
placement that resulted in net proceeds of $18.9 million. We have,  
however, experienced net losses from operations and net losses are  
expected to continue into future periods. If our existing cash  
reserves prove insufficient to fund operating and other expenses,  
we may find it necessary to secure additional financing, sell  
assets or reduce expenditures further. In the event additional  
financing is required, we may not be able to obtain such financing  
on acceptable terms, or at all. If adequate funds are not  
available or are not available on acceptable terms, we may not be  
able to pursue our business objectives. This inability could  
seriously harm our business, results of operations and financial  
condition.  

"If additional funds are raised through the issuance of equity or  
convertible debt securities, the percentage ownership of our  
current stockholders will be reduced and these securities may have  
rights and preferences superior to those of our current  
stockholders. If we raise capital through debt financing, we may  
be forced to accept restrictions affecting our liquidity,  
including restrictions on our ability to incur additional  
indebtedness or pay dividends.  

"We have never paid any dividends on our common stock and do not  
plan to pay dividends on our common stock for the foreseeable  
future. We currently intend to retain future earnings, if any, to  
finance operations, capital expenditures and the expansion of our  
business."


LUCENT TECHNOLOGIES: Records $387 Million Net Income in Q3'04
-------------------------------------------------------------
Lucent Technologies (NYSE: LU) reported results for the third
quarter of fiscal 2004, which ended June 30, 2004, in accordance
with U.S. generally accepted accounting principles (GAAP). Lucent
reported net income of $387 million or 8 cents per diluted share.
These results compare with net income of $68 million or 2 cents
per diluted share in the second quarter of fiscal 2004 and a net
loss of $254 million or 7 cents per diluted share in the year-ago
quarter.

The company recorded revenues of $2.19 billion in the quarter,
essentially flat sequentially and an increase of 11 percent from
the year-ago quarter. The company recorded revenues of $2.19
billion in the second quarter of fiscal 2004 and recorded $1.96
billion in the year-ago quarter.

The third quarter's earnings per share included the positive
impact of certain items, including the revaluation of warrants
that are expected to be issued as part of Lucent's global
settlement of shareowner litigation, bad debt and financing
recoveries, and a net reversal of certain business restructuring
charges. The net effect of these items was a positive impact of
about 4 cents per diluted share.1

The impact of similar items resulted in an unfavorable impact of
about 1 cent per diluted share in the second quarter of fiscal
2004 and no impact in the year-ago quarter.

                     Executive Commentary

"We continued our profitable momentum this quarter and saw some
positive signs in the key areas we have identified for growth,"
said Lucent Technologies Chairman and CEO Patricia Russo. "This
quarter, we announced 35 customer wins and trials, spanning 20
countries around the world. We are seeing more progress in areas
like VoIP, mobile high-speed data and broadband access, while
tapping into new international markets.

"Progress in our 3G wireless business was highlighted by a $5
billion agreement announced with Verizon Wireless last week and a
number of network expansions and agreements in the quarter with
existing CDMA customers such as China Unicom, U.S. Cellular, Tata
Teleservices and Telecom New Zealand.

Cingular announced a UMTS trial agreement with us this quarter as
well," said Russo. "We now have announced more than 20 customers
for our Accelerate(TM) VoIP portfolio, including an agreement with
BellSouth. We continue to build our services business, highlighted
by new professional and managed services contracts, including
recent announcements with HOT Telecom in Israel and Nextel Peru.
We are showing progress in our government and broadband access
businesses, including two new deals with the U.S. Department of
Defense and an agreement with Microsoft to develop IPTV for
broadband networks.

"With recent announcements from our customers, we are seeing more
significant, multi-year plans being developed for next-generation
networks that will deliver IP-based multimedia services, while
managing network operating costs," said Russo.

"We see these developments playing to our strengths in designing,
deploying and servicing converged networks for our customers."

Lucent Technologies Chief Financial Officer Frank D'Amelio said:
"We have consistently generated profitable results as the market
has stabilized and expect to report a full year of profitability
when we talk to you again in October. At this point, we expect
annual revenues to increase on a percentage basis in the mid-
single digits for the 2004 fiscal year. We will continue to manage
our cost and expense profile as we go forward, while making
selective investments in areas like VoIP and mobile high-speed
data to profitably grow the business."

               Gross Margin and Operating Expenses

Gross margin for the quarter was 43 percent of revenues, which was
the same as the gross margin rate for the second quarter of fiscal
2004.

Operating expenses for the third quarter of fiscal 2004 were $598
million as compared with $623 million for the second quarter of
fiscal 2004.

                     Balance Sheet Update

As of June 30, 2004, Lucent had about $4.7 billion in cash and
marketable securities, which represents an increase of more than
$100 million from the previous quarter. The increase was primarily
driven by operating activities.

    Review of Operations - Three Months Ended June 30, 2004

On a sequential basis, revenues in the United States increased 7
percent to $1.4 billion, and revenues outside the United States
decreased 10 percent to $785 million. Compared with the year-ago
quarter, U.S. revenues and revenues outside the United States
increased by 17 percent and 3 percent, respectively.

Integrated Network Solutions (INS) Revenues for the third quarter
of fiscal 2004 were $715 million, a decrease of 3 percent
sequentially and 12 percent compared with the year-ago quarter.

In the third quarter, Lucent made several important contract,
product, partnership and acquisition announcements, including wins
in areas such as voice over Internet protocol (VoIP), broadband
access and optical:

   * Lucent continues to announce new customers for its
     Accelerate(TM) VoIP portfolio, including a three-year
     agreement with BellSouth that will enable the company to
     expand VoIP services throughout its nine-state territory, as
     well as other announcements with KPY Networks of Finland,
     FiberNet, Telscape, Rye Telephone, ALLTEL, Pac-West Telecomm
     and PAETEC.

   * Lucent announced an optical networking win with Jiangsu
     Telecom; network upgrades and expansions with KPN of the
     Netherlands and Hondutel of Honduras; broadband access deals
     with Telef'nica of Brazil and KT of South Korea; and a
     series of Personal Handyphone System (PHS) contracts with
     China Telecom.

   * In the area of new product development, Lucent introduced an
     IP/MPLS module, jointly developed with Juniper Networks,
     that extends the life and capability of the widely deployed
     CBX 500 Multiservice Switch; the company announced the new
     high-capacity CBX 3500(TM) Multiservice Edge Switch, which
     Choice One is trialing and China Unicom intends to trial;
     and it enhanced its metro optical portfolio with the
     Metropolis Wavelength Services Manager.

   * Lucent's partnership with Juniper Networks continues to gain
     momentum as part of a $35 million agreement with Xspedius,
     which will offer VoIP services to its business customers in
     the southern United States.

   * Lucent announced its acquisition of Telica, a provider of
     next-generation VoIP solutions, to allow it to address a
     much wider range of VoIP network buildouts. The acquisition
     is still expected to close in Lucent's fourth fiscal
     quarter.

Mobility Solutions Revenues for the third quarter of fiscal 2004
were $986 million, an increase of 4 percent sequentially and 58
percent compared with the year-ago quarter.

In the third quarter, Lucent continued to show its strength in 3G
spread spectrum technology:

   * During the quarter, Lucent announced 3G network deployments
     and expansions with U.S. Cellular, China Unicom, Tata
     Teleservices, Telecom New Zealand and Bermuda Digital
     Communications, as well as its first wireless contracts in
     Pakistan and Vietnam.

   * Lucent and Novatel Wireless continued to make progress in
     Universal Mobile Telecommunications System (UMTS) wireless
     PC cards with a sale to 3, the global brand name for
     Hutchison Whampoa's 3G services, for its customers in
     Australia, Denmark, Italy and Sweden.

   * Lucent continues to build its mobile high-speed data
     business, highlighted in the third quarter by an announced
     trial of 3G UMTS technology with Cingular Wireless in    
     Atlanta.

   * Lucent announced a successful CDMA450 trial with Anatel,
     Brazil's federal communications agency, and a 3G CDMA2000
     1X-EVDO data network trial with VIVO in Brazil.

Lucent Worldwide Services (LWS) Revenues for the third quarter of
fiscal 2004 were $473 million, a decrease of 1 percent
sequentially and an increase of 5 percent compared with the year-
ago quarter.

Lucent Worldwide Services continues to focus on broadening its
business and leveraging its multivendor and network integration
capabilities with new professional, managed and maintenance
services wins, as well as contributions to several other major
contracts:

   * Just last week, Lucent announced a $35 million contract with
     HOT Telecom for network integration and security services on
     its VoIP network in Israel.

   * During the quarter, Lucent announced that it had been
     selected by Nextel Peru, a leading provider of fully
     integrated wireless communications services in Peru, to
     provide managed services for its multivendor network.

   * In April, Lucent announced a contract with T-Systems
     International, the systems division of Deutsche Telekom, to
     provide multivendor maintenance and support services for IP
     equipment.

   * Lucent also signed a multiyear agreement with MoviStar P.R.,
     a leading mobile communications operator in Puerto Rico, to
     provide operations and maintenance support for MoviStar's
     CDMA wireless network.

   * There were also services components in several other contract
     announcements this quarter, including BellSouth, ALLTEL,
     U.S. Cellular, Xspedius, Jiangsu Telecom and China Unicom.

The quarterly earnings conference call will take place today at
8:30 a.m. EDT and be broadcast live over the Internet at
http://www.lucent.com/investor/conference/webcast040721.html  

It will be maintained on the site for replay through Wednesday,
July 28, 2004.

                   About Lucent Technologies

Lucent Technologies designs and delivers the systems, services and
software that drive next-generation communications networks.
Backed by Bell Labs research and development, Lucent uses its
strengths in mobility, optical, software, data and voice
networking technologies, as well as services, to create new
revenue-generating opportunities for its customers, while enabling
them to quickly deploy and better manage their networks.  Lucent's
customer base includes communications service providers,
governments and enterprises worldwide.  For more information on
Lucent Technologies, which has headquarters in Murray Hill, N.J.,
USA, visit http://www.lucent.com/

                       *   *   *

As reported in the Troubled Company Reporter's March 12, 2004
edition, Standard & Poor's Ratings Services raised its corporate
credit rating on Murray Hill, New Jersey-based Lucent Technologies
Inc. to 'B/Positive/--' from 'B-/Negative/--'. The action follows
a Standard & Poor's review of the telecom equipment industry, as
well as a review of Lucent's recent and anticipated performance.

"Standard & Poor's believes industry revenues have stabilized in
recent quarters, after declining steeply from their peak in 1999,
while Lucent's cost reduction actions have enabled a return to
moderate profitability in the past few quarters," said Standard &
Poor's credit analyst Bruce Hyman.

The ratings on Lucent reflect its high leverage, a dramatically
smaller and more aggressive industry because of a substantial
shift in service providers' buying patterns, and ongoing major
changes in the industry's technology direction. These factors are
only partly offset by Lucent's continued major role in that
industry, its sufficient operational liquidity, and an appropriate
expense structure for current business conditions after
substantial restructurings.


LUCENT TECHNOLOGIES: Fitch Upgrades Sr. Unsecured Debt Rating to B
------------------------------------------------------------------
Fitch Ratings has upgraded the senior unsecured debt of Lucent
Technologies to 'B' from 'B-', and the rating of the subordinated
convertible debentures and convertible trust preferred securities
to 'CCC+' from 'CCC'. The Rating Outlook is revised to Positive
from Stable. Approximately $6 billion of securities are affected
by Fitch's action.

The ratings upgrade reflects Lucent's continued improvement in
quarterly operating performance driven by a stabilized and growing
wireless telecommunications equipment end market, improved cost
structure, and return to profitability. Lucent's strengthened
balance sheet, as a result of the company's debt retirement
efforts, and manageable near-term debt obligations also support
the ratings action. The Positive Rating Outlook reflects Fitch's
belief that if industry conditions improve further and,
consequently, Lucent's operating metrics trend positively as they
have done the past few quarters, then additional ratings
improvement could occur.

Also considered are Lucent's limited financial flexibility and
relatively weak but improving credit protection measures.
Additionally, while capital spending by communications carriers
has stabilized and is experiencing modest growth in some areas,
wireline and wireless spending will remain substantially down from
high historical levels for the foreseeable future. However, Lucent
has gone through significant restructurings during the past few
years to align its cost structure with current spending trends.
Revenues for 2004 are expected to be slightly up with expectations
for an overall profit in 2004.

For the third quarter ended June 30, 2004, Lucent's total revenue
was $8.7 billion on an LTM basis compared to $8.4 billion and
$12.3 billion for the fiscal years ended September 30, 2003 and
2002, respectively. For the same period, EBITDA of $1.2 billion
was substantially higher than the break-even amount achieved for
fiscal 2003 as the company has been able to rationalize its cost
structure and improve margins. However, credit protection measures
remain weak, as Lucent has only for the last few quarters reported
positive pre-pension EBITDA, with leverage of 5.4x on an LTM basis
as of June 30, 2004, and interest coverage of approximately 3.0x
for the same period.

Lucent's strengthened balance sheet is a direct result of
preferred stock and debt retirement. Since June 2002, the company
has repurchased $1.1 billion of its 8% convertible preferred
stock, $598 million of its 7.75% convertible trust preferred
securities, and $733 million of other senior debt obligations in
exchange for approximately 643 million shares of common stock and
$676 million in cash. Also, during the third quarter of 2003, the
company sold series A and series B 2.75% convertible debentures
for an aggregate of $1.6 billion in an effort to bolster liquidity
and buy back debt. As of the quarter ended June 30, 2004, total
debt was $6.2 billion, consisting primarily of approximately: $2.5
billion of senior unsecured debt; $1.6 billion in convertible
debentures; $1.2 billion of convertible trust securities; and $817
million in convertible subordinated debentures.

While Lucent has no significant long-term debt maturities until
2006, the 8% convertible subordinated debentures are redeemable at
the option of the holders on various dates, the earliest of which
is Aug. 2, 2004, followed by the next redemption date in August
2007. Lucent may satisfy this obligation using cash, common stock,
or a combination of both. However, conversion looks unlikely
considering the company's current common stock price.

Although Lucent's financial flexibility remains limited, Fitch
believes the company's current resources are adequate to meet
near-term obligations, with cash and marketable securities of
approximately $4.7 billion as of June 30, 2004. However, Fitch
continues to monitor Lucent's operations as free cash flow has
been inconsistent and a rating issue, although it has improved and
was approximately a positive $285 million for the latest twelve
months ended Jun. 30, 2004, compared to the more than $1 billion
of annual cash burn the last few years. As of June 30, 2004, cash
from operations was $440 million on an LTM basis including cash
charges for restructuring. Remaining cash costs for restructuring
currently total $250 million and will be paid over the next
several years. While the company does not expect to make a cash
contribution to its approximate $30 billion U.S. pension plans in
fiscal 2004 through fiscal 2006, expected funding requirements for
its post-retirement health care benefits are $60 million during
the remainder of fiscal 2004 and approximately $300 million
annually through fiscal 2006.


MAC HOUSE: Case Summary & 11 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: MAC House
        845 Fisher
        Houston, Texas 77018

Bankruptcy Case No.: 04-81306

Chapter 11 Petition Date: July 20, 2004

Court: Southern District of Texas (Galveston)

Judge: Letitia Z. Clark

Debtor's Counsel: Melissa Ann Botting, Esq.
                  1414 South Friendswood Drive
                  Friendswood, TX 77546
                  Tel: 281-992-7600
                  Fax: 281-482-8088

Total Assets: $140

Total Debts:  $1,138,800

Debtor's 11 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Medicare part A               Overpayment from        $1,000,000
Dept. of Treasury             medicine
Financial Mgt. Services
Hyattsville, MD 20782

Internal Revenue Service      Business taxes             $50,000

Middle East Equipment         Back rent                  $50,000

Ray Azirron                   Rental space               $10,000

Luby's                        Provided meals all         $10,000
                              Patients

Reliant Energy - H L & P                                 $10,000

Martha Wong                   Lease space for             $6,000
                              clinic

Southwestern Bell                                         $1,000

Bank of America               Overdraft                   $1,000

City of Houston               Water                         $500

Reliant Energy - Entex        Gas                           $300


MEDICALCV: Announces Senior Management Shake-Up & Shuffle
---------------------------------------------------------
MedicalCV, Inc. (OTC Bulletin Board: MDCVU), a cardiovascular
surgery device manufacturer, restructured its management to
further reduce its operating losses in its heart valve division
and to reposition itself to better support its new technologies.

Richard Kramp, currently President of the New Technologies
Division, will become President and Chief Operating Officer of the
Company. As a result of the strategic change, the following
executives will leave the Company to pursue other business
opportunities, and their responsibilities will be absorbed by
other current executives: Blair Mowery - President of the Heart
Valve Division and Allan Seck - Vice President of Business
Development.

The Company hired Robert Clapp as Vice President of Manufacturing
and that it is conducting a search for a Vice President of U.S.
Sales to strengthen both the valve business and the new products
of the Company.

Larry Horsch, Chairman of the Board and Acting CEO, stated, "We
are refocusing the Company toward higher growth products and
adjusting our executive team to achieve this goal. Expenses are
being materially reduced in the heart valve area. To support these
efforts, we recently completed a private placement of securities
generating approximately $3.5 million of net proceeds. Subject to
receipt of regulatory approval, we continue to expect that we will
be able to market our first atrial fibrillation product in
September 2004."

MedicalCV, Inc. -- whose January 31, 2004 balance sheet shows a  
$2,877,971 total shareholders' equity deficit -- is a  
Minnesota-based cardiothoracic surgery device manufacturer that  
launched its Omnicarbon(R) heart valve in the United States in  
early 2002. Led by a new management team, the company is focused  
on building a worldwide market in mechanical heart valves and  
other innovative products for the cardiothoracic surgical suite.  
The Omnicarbon heart valve has an established market position in a  
number of key regions of Europe, South Asia, the Middle East and  
the Far East. Although international markets will continue to play  
an important role in the company's results, the U.S. market offers  
tremendous growth potential for the Omnicarbon valve. In September  
2003, the company acquired a technology platform for the treatment  
of atrial fibrillation, an exciting new growth opportunity. In  
addition, the company entered into an agreement with Segmed, Inc.,  
to commercialize an annuloplasty product known as the Northrup  
Universal Heart Valve Repair System(TM). MedicalCV has a fully  
integrated manufacturing facility, where it designs, tests and  
manufactures its products. The company's securities are traded on  
the OTC Bulletin Board under the symbol "MDCVU".


METROPOLITAN MORTGAGE: Fitch  Downgrades Class B-1 Rating to B
--------------------------------------------------------------
Fitch Ratings has taken rating actions on the following
Metropolitan Mortgage issues:

        Series 2000-B

               --Classes A1A, A1F affirmed at 'AAA';
               --Class M-1 affirmed at 'AA';
               --Class M-2 affirmed at 'A';
               --Class B-1 downgraded to 'B' from 'BB'.

The negative rating action taken on class B-1 reflects the poor
performance of the underlying collateral in the transaction. The
level of losses incurred has increased significantly and has
resulted in the depletion of overcollateralization.

As of the June 2004 distribution, series 2000-B has an OC amount
of $ 1,425,854.74 remaining, compared to $2,191,329.4 in the
February 2004 distribution when class B-1 was first downgraded.
The 12-month average monthly loss for this deal is approximately
$459,000.

These deals are structured such that there is the ability in
future periods for the bonds that were written down due to losses
to be written back up.


MICRO EQUIPMENT: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Micro Equipment Corporation
        2900 Jones Mill Road
        Norcross, Georgia 30071

Bankruptcy Case No.: 04-95504

Type of Business: The Debtor is a wholesale distributor of
                  computer products serving OEM, reseller, and
                  dealer markets.  See http://www.mec.net/

Chapter 11 Petition Date: July 19, 2004

Court: Northern District of Georgia (Atlanta)

Judge: Paul W. Bonapfel

Debtor's Counsel: Albert N. Remler, Esq.
                  Remler Law Group, P.C.
                  4200 Northside Parkway
                  Building One, Suite 200
                  Atlanta, GA 30327-3054
                  Tel: 404-365-6565
                  Fax: 404-365-6552

Estimated Assets: $0 to $50,000

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Alexander Remington                                     $200,000

Cara Guri                     Personal Loan             $150,000

Discover Card Platinum        Credit card:               $91,553
                              personal services /
                              merchandise

Euler Hermes ACI Collection   Collection Agency          $62,670
Services

Coface North America          Collection Agency          $39,625

Avus System & Peripheral                                 $28,609

MBNA America Gold Card        Credit card:               $27,000
                              personal services /
                              merchandise

ANIIC                         Past Due Rent              $26,000

Hyundai ImageQuest America    Consumer Merchandise       $17,670
                              and Service

First Union Visa Gold         Credit card:               $16,880
                              personal services /
                              merchandise

DynaPower                                                $13,789

IRS/Insolvency                                           $10,000

All Components                Consumer Merchandise        $9,208
                              and Service

Tech Data Corp.               Consumer Merchandise        $8,209
                              and Service

Behavior Tech. Comp. Corp.    Consumer Merchandise        $7,860
                              and Service

Tripro Power Corp.            Consumer Merchandise        $7,015
                              and Service

Ark PC Technology                                         $5,741

TSR Inc.                                                  $5,587

Atlanta Foam                  Consumer Merchandise        $5,438
                              and Service

Wachovia                      Credit card:                $4,730
                              personal services /
                              merchandise


MIRANT: Wants to Complete Phase I Key Employee Retention Program
----------------------------------------------------------------
Mirant Corporation and its debtor-affiliates say they've made
substantial progress in the administration of their Chapter 11
cases:

    * the Business Plan and Intercompany Claims Report were
      completed and presented to the Committees for their review
      and comment;

    * various strategic initiatives, like the corporate overhead
      cost savings initiative and the operational performance
      initiative, have been launched; and

    * the long-term service agreements with General Electric, the
      Transition Power Agreements with Potomac Electric Power
      Company and the corporate headquarters lease have been
      restructured, and numerous executory contracts were
      rejected, resulting in the creation of literally hundreds
      of millions of dollars of value for their constituents.

However, the Debtors identified key "gating items" that must be
resolved to develop a plan of reorganization.

Robin E. Phelan, Esq., at Haynes and Boone, LLP, in Dallas,
Texas, relates that there are a number of employee compensation
and benefit issues that have been the source of significant
discord in these cases -- resulting in the distraction of both
the Debtors and the Committees from the Debtors' successful
reorganization and ultimate emergence from Chapter 11.  Included
among the contentious issues are not just the implementation of a
key employee retention program but also the implementation of a
severance program for Management Council members, the potential
avoidance of annuities purchased prepetition to fund certain
senior level employees' non-qualified retirement benefits, the
existence of certain prepetition retention agreements, and
potential claims against the Debtors under various change in
control programs and agreements.

Recognizing the detrimental impact these various employee
compensation and benefit related issues were having in these
cases, Mr. Phelan reports that the Examiner approached the
Debtors to work out a global resolution among the Debtors and
Committees.  No consensual resolution has been reached yet.
However, the Debtors and the Examiner continue to believe that a
Court determination with respect to these issues is critical to
focusing the various constituents on the Debtors' reorganization
efforts.

"It is unquestionable that the Chapter 11 process poses
significant burdens on the Debtors' employees," Mr. Phelan
remarks.  In addition to their regular work duties, the Debtors'
employees have to respond to many inquiries of their
constituents, Court requirements and the additional demands
associated with the Chapter 11 plan formulation.  Most assuredly,
the Debtors' employees are feeling the strain of these additional
demands.  Coincidentally, it is at this same juncture that it is
most critical that the employees maintain their motivation and
focus on the Debtors' primary goal of achieving a successful
reorganization.

Accordingly, the Debtors must provide a financial incentive for
continued employment and assure those employees that they will be
rewarded for dedicated service toward the Debtors' reorganization
efforts.  Mr. Phelan contends that providing an appropriate
retention incentive to the Debtors' 90 Key Employees is
particularly important because the Debtors' major employer
competitors aggressively recruit qualified candidates.  Indeed,
employee attrition rates have materially increased in recent
months as compared with prior periods.  To demonstrate, at the
end of June, the 2004 annualized domestic turnover of all non-
union employees is 17%, and the annualized turnover of high
performing employees for 2004 is 18%.  In contrast, the 2003
annualized turnover of all non-union employees for the same time
period was 11.5%, and the annualized turnover for high performing
employees was less than 2%.  Importantly, since the approval of
the First Payment through June 15, 2004, only one Key Employee
has resigned.  However, since June 15, 2004, three additional Key
Employees have resigned.

In light of these concerns, on December 19, 2003, the Debtors
asks the U.S. Bankruptcy Court for the Northern District of Texas
to approve Phase I of the Key Employee Retention Program.  Under
Phase I, certain Key Employees were to be awarded stay bonuses
designed to provide the employees an incentive to remain in their
positions throughout the reorganization process.  The Chief
Executive Officer and Management Council members declined to
participate in Phase I of the KERP, which permitted the Debtors to
move the process of implementation of Phase I of the KERP forward
in a deliberate manner.

On February 13, 2004, the Court authorized the Debtors to make on
or after June 30, 2004, the first stay bonus payment to each
eligible Key Employee, but reserved judgment on the remaining
payments under Phase I of the KERP.  In addition, the Court
instructed the Debtors to deposit $8,000,000 into a segregated,
interest-bearing account from which the anticipated stay and
performance-based payments under both phases of the KERP are to
be paid.

Mr. Phelan explains that the Debtors designed the KERP not as
individual payments or isolated incentives but rather as a
complete package that will provide the requisite incentives to
retain and encourage the Key Employees.  Accordingly, while the
Key Employees thus far have been motivated by, and have been
working toward, the First Payment, they have also relied on the
expectation and assurances that the Remaining Payments would be
forthcoming and that the Debtors would be granted shortly the
authority to make the Remaining Payments.  In fact, although the
2004 attrition rate for Key Employees has increased relative to
prior periods, it had decreased since the approval of the First
Payment, and the Debtors believe that the current attrition rates
would be materially higher absent approval of the First Payment
and expectation of the Remaining Payments.

As the date of the First Payment has already occurred, the
Debtors believe that it is critical for the Court to approve the
Remaining Payments to ensure that the Debtors' Key Employees
continue to be incentivized to remain employed by the Debtors.
While the Debtors are seeking approval of the Remaining Payments,
as part of the global resolution proposed by the Examiner,
certain aspects of Phase I of the KERP have been modified from
the version set forth in the Phase I Motion.

Furthermore, the Examiner has identified the resolution of
certain employee-related concerns and disputes raised by certain
of the Committees as a high priority matter, which the Examiner
intends to address.  Although the Debtors were prepared to move
forward with the KERP in May, the Debtors delayed seeking further
protection with respect to the KERP to give the Examiner an ample
opportunity to assess the Debtors' proposed KERP and formulate a
plan for the resolution of the other outstanding employee-related
issues.  At the Examiner's suggestion and as a proposed global
resolution of the issues, the Debtors made certain modifications
to their original KERP and have added the resolution of certain
employee-related disputes and issues.  Although the Debtors and
the Committees have worked together diligently with the Examiner
as an active facilitator to reach a consensual resolution, to
date, the Debtors were unable to gain the full support of the
Committees to the Examiner's proposed global resolution.
Nevertheless, the Debtors believe that the Examiner's proposed
global resolution is fair and reasonable and in the best interest
of the estates.  The Debtors intend to continue to work with
their Committees, with the Examiner's assistance, in an effort to
reach a consensual resolution.

By this motion, the Debtors seek the Court's authority to pay the
Remaining Payments under Phase I of the KERP, pursuant to Section
363(b) of the Bankruptcy Code.

The Debtors want to make the Remaining Payments under Phase I
under this schedule:

                                        Percentage of  Stay Bonus
Tier    Schedule of Payments            Base Salary     Award
----    --------------------           -------------  ----------
  IV     Earlier of December 31, 2004        18%          60%
         or plan filing

         Earlier of June 30, 2005 or         24%
         Plan effective date

  V      Earlier of December 31, 2004        15%          50%
         or plan filing

         Earlier of June 30, 2005 or         20%
         Plan effective date

  VI     Earlier of December 31, 2004        12%          40%
         or plan filing

         Earlier of June 30, 2005 or         16%
         Plan effective date

Participants must be actively employed on the payment dates to
receive the applicable Stay Bonus payment.

With the exception of amounts payable on account of: (i) the
participation of Curt Morgan, Executive-Vice President and Chief
Operating Officer for Mirant, and (ii) the payment to M. Michele
Burns, Chief Financial Officer for Mirant, the estimated
aggregate cost of the Remaining Payments under Phase I is about
$2,800,000.

Mr. Phelan explains that the KERP is designed to reduce Key
Employee turnover, which would otherwise result in significant
cost to the Debtors at this critical time in their reorganization
process.  The implementation of the KERP will aid the Debtors'
rehabilitative efforts by increasing the likelihood of retaining
the services of valuable Key Employees.

Mr. Phelan contends that the Remaining Payments under Phase I of
the KERP will enable the Debtors to provide a financial incentive
for the continued employment of the Key Employees and assure them
that they will be rewarded for dedicated service.

Mr. Phelan points out that with approximately 90 Key Employees,
the potential cost of having to replace a significant number of
these employees would be significant and detrimental to the
Debtors' reorganization efforts.  The KERP will enable the
Debtors to retain the knowledge, experience and loyalty of the
Key Employees who are crucial to their Chapter 11 efforts.  If
these employees were to leave their current jobs at this stage in
the Debtors' Chapter 11 cases, it is virtually assured that the
Debtors would not be able to attract replacement employees of
comparable experience and knowledge, or could do so only at great
expense and detriment to their estates.

An even greater harm to the Debtors from the loss of Key
Employees would be the loss of industry knowledge.  Although a
new manager may quickly learn the general job requirements, the
manager cannot quickly assimilate the nuances of the internal
management structure and gain the trust and respect of the
workforce.  Moreover, the existing management of the Debtors has
built relationships with vendors and customers that are an
integral part of the Debtors' ongoing efforts to maintain and
improve business while keeping costs low.  Furthermore, there
exists the risk that the loss of Key Employees will result in the
loss of additional employees who choose to leave with the Key
Employees.  Consequently, losing critical managers or employees
would likely cause a decline in the Debtors' operating
profitability.

The Debtors have determined that the costs associated with the
implementation of the KERP, which, excluding the addition of Curt
Morgan, are approximately $8,000,000 in the aggregate for both
Phase I and Phase II, are more than justified by the benefits
that are expected to be realized by encouraging the Key Employees
to continue working for the Debtors and vigorously assisting in
the Debtors' restructuring efforts.  Moreover, approval of the
KERP will forestall the loss of value that would be attendant to
resignations among the Key Employees.

Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- together with its direct and indirect  
subsidiaries, generate, sell and deliver electricity in North
America, the Philippines and the Caribbean.  The Company filed for
chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-
46590).  Thomas E. Lauria, Esq., at White & Case LLP represent the
Debtors in their restructuring efforts.  When the Company filed
for protection from their creditors, they listed $20,574,000,000
in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News,
Issue No. 39; Bankruptcy Creditors' Service, Inc., 215/945-7000)


MISSION RESOURCES: S&P Places Ratings on CreditWatch Developing
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B-' corporate
credit rating and 'CCC' senior unsecured debt rating on
independent oil and gas exploration and production company Mission
Resources Corp. on CreditWatch with developing implications.

As of March 31, 2004, Houston, Texas-based Mission had roughly
$175 million of debt.

The CreditWatch listings follow Mission's announcement that it has
retained Petrie Parker & Co. to assist the company in evaluating
strategic alternatives designed to enhance shareholder value.

The CreditWatch listings will be resolved when Mission announces
the results of its strategic review.


NATIONAL CENTURY: Amedisys Takes an Appeal to the District Court
----------------------------------------------------------------
Amedisys, Inc., and certain of its related affiliates inform
Judge Calhoun of the U.S. Bankruptcy Court for the District of
Ohio that they will take an appeal to the U.S. District Court for
the Southern District of Ohio with respect to the Bankruptcy Court
Order denying their request to enforce the Confirmation Order in
the bankruptcy cases involving National Century Financial
Enterprises, Inc. and its debtor-affiliates.

Daniel A. Demarco, Esq., at Hahn, Loeser & Parks, in Columbus,
Ohio, presents five issues for the District Court to review:

   (a) Whether the Bankruptcy Court erred in denying Amedisys'
       request to enforce the Confirmation Order;

   (b) Whether the Bankruptcy Court erred in enforcing the
       automatic stay in violation of Section 362(c) of the
       Bankruptcy Code;

   (c) Whether the Bankruptcy Court erred in enforcing the
       automatic stay as to claims and causes of actions that
       have no effect on the Debtors or their estates, as none of
       the Debtors is a party to the action commenced in the
       United States District Court for the Middle District of
       Louisiana nor has any property or assets at issue;

   (d) Whether the Bankruptcy Court erred in imposing an
       injunction without requiring the Debtors to commence an
       adversary proceeding as required under Rule 7001 of the
       Federal Rules of Bankruptcy Procedure; and

   (e) Whether the Bankruptcy Court erred in imposing a permanent
       injunction without the Debtors to comply with Rule 7065 of
       the Federal Rules of Bankruptcy Procedure.

Headquartered in Dublin, Ohio, National Century Financial
Enterprises, Inc. -- http://www.ncfe.com/-- is the market leader  
in healthcare finance focused on providing medical accounts
receivable financing to middle market healthcare providers.  The
Company filed for Chapter 11 protection on November 18, 2002
(Bankr. D. Ohio Case No. 02-65235).  Paul E. Harner, Esq., Jones,
Day, Reavis & Pogue represents the Debtors in their restructuring
efforts. (National Century Bankruptcy News, Issue No. 43;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


NATIONWIDE HEALTH: Appoints Don Bradley Chief Investment Officer
----------------------------------------------------------------
Nationwide Health Properties, Inc. (NYSE: NHP) appointed Donald D.
Bradley Senior Vice President and Chief Investment Officer, a
position he has informally held since January 2004.  Don was hired
by NHP in March 2001 as Senior Vice President and General Counsel
primarily to manage its portfolio restructuring efforts, which
were substantially completed in December 2003 with the emergence
of Alterra Healthcare Corporation, NHP's largest customer, from
bankruptcy.

Douglas M. Pasquale, NHP's President and CEO, said: "I am thrilled
with Don's well-deserved promotion to Senior Vice President and
Chief Investment Officer. Don's well-rounded background has
already been instrumental to his many contributions to NHP. As he
formally joins forces with our three talented investment Vice
Presidents: David Boitano (Seattle, WA); Steven Insoft (Boston,
MA) and John Sheehan (Cleveland, TN), I am confident this
investment team will continue to close quality investments like
the nearly $300,000,000 of accretive acquisitions they have
already completed in 2004."

Prior to joining NHP, Don was the General Counsel of Furon
Company, a NYSE-listed international, high performance polymer
manufacturer, with a principal role in the company's acquisitions,
divestitures and risk management programs. Previously, he was a
Special Counsel with the international law firm of O'Melveny &
Myers LLP in its mergers, acquisitions and securities law
department. Don was graduated from UCLA School of Law in 1982 and
the University of Illinois in 1979. He also is a Certified Public
Accountant (Illinois). Don and his wife, Eileen, reside in Laguna
Niguel, California with their three sons.

Nationwide Health Properties, Inc. is a real estate investment
trust that invests in senior housing and long-term care
facilities. The Company and its joint venture have investments in
401 facilities in 38 states. For more information on Nationwide
Health Properties, Inc., visit our website at
http://www.nhp-reit.com/  

                       *   *   *

As reported in the Troubled Company Reporter's April 14, 2004  
edition, Fitch Ratings has affirmed the senior unsecured rating of  
'BBB-' on approximately $541 million of senior unsecured notes of
Nationwide Health Properties, Inc. due 2004 through 2038. Fitch
has also affirmed the 'BB+' ratings on $100 million of outstanding
preferred stock. The Rating Outlook is revised to Stable from
Negative.

The revision of Fitch's Rating Outlook to Stable reflects NHP's
improved debt maturity schedule as well as access to capital. On
May 19, 2003, Fitch reviewed NHP and kept its Rating Outlook at
Negative due to the near-term maturities the company faced under
its medium term notes (MTN) program. Since that time, the majority
of NHP's 2003 debt maturities that had a putable feature in its
bonds opted not to put the bonds back to the company and extended
the maturities of these bonds out another five years to 2008.
Additionally, NHP raised a combined total of approximately $250
million in common equity in two offerings (April 2003 and January
2004) improving the company's liquidity.


NEW HEIGHTS: Committee Hires Lowenstein Sandler as Attorneys
------------------------------------------------------------
The Official Unsecured Creditors Committee appointed in New
Heights Recovery & Power, LLC's chapter 11 case, wants to hire
Lowenstein Sandler PC as its attorneys.

The Committee says that Lowenstein Sandler's services are
necessary to faithfully execute its duties as the fiduciary
representative of the unsecured creditors in the administration of
the Debtor's estate.

Lowenstein Sandler is expected to:

  (a) provide legal advice as necessary with respect to the
      Committee's powers and duties as an official committee
      appointed under Section 1102 of the Bankruptcy Code;

  (b) provide legal advice as necessary with respect to any
      disclosure statement and plan filed in this case and with
      respect to the process for approving or disapproving
      disclosure statements and confirming or denying
      confirmation of a plan;

  (c) prepare on behalf of the Committee, as necessary,
      applications, motions, complaints, answers, orders,
      agreements, and other legal papers;

  (d) appear in Court to present necessary motions,
      applications, and pleadings and otherwise protecting the
      interests of those represented by the Committee; and

  (e) perform all of the legal services for the Committee that
      may be necessary and proper in these proceedings.

Kenneth A. Rosen, Esq., a director of Lowenstein Sandler reports
that the attorneys most likely to represent the Committee in this
case bill between $150 and $525 per hour.  Legal assistants bill
for their services at $75 to $100 per hour.

Headquartered in Ford Heights, Illinois, New Heights Recovery &
Power, LLC -- http://www.tires2power.com/-- is the owner and  
operator of the Tire Combustion Facility and other tire rubber
processing facilities. The Company filed for chapter 11 protection
on April 29, 2004 (Bankr. Del. Case No. 04-11277).  Eric Lopez
Schnabel, Esq., at Klett Rooney Lieber & Schorling represents the
Debtor in its restructuring efforts.  When the Company filed for
chapter 11 protection, it listed both its estimated debts and
assets of over $10 million.


NEW WORLD PASTA: Employs KPMG as Accountants and Tax Advisors
-------------------------------------------------------------
New World Pasta Company and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Middle District of Pennsylvania for
permission to employ KPMG, LLP, as their auditors, accountants and
tax advisors.

The Debtors anticipate that KPMG will render these services:

   (a) Accounting and Auditing Services:

          i. audit and review examinations of the Debtors'
             consolidated financial statements as may be
             required from time to time, including the Debtors'
             consolidated financial statements as of December
             31, 2003, 2002 and 2001 and for the years then
             ended, and review of quarterly financial
             statements;

         ii. report on management's assessment of the
             effectiveness of the Debtors' system of internal
             control over financial reporting;

        iii. audit the financial statements and supplemental
             schedules of the Debtors' employee benefit plans,
             including retirement plans, which are to be
             included in the employee benefit plans' Form 5500
             filings with the Department of Labor;

         iv. analyze accounting issues and provide advice to
             the Debtors' management regarding the proper
             accounting treatment of events;

          v. read and comment on the Debtors' documents
             required to be filed with the Securities and
             Exchange Commission, if any; and

         vi. assist with the implementation of bankruptcy
             accounting procedures as required by the
             Bankruptcy Code and generally accepted accounting
             principles, including, but not limited to,
             Statement of Position 90-7.

   (b) Tax Advisory Services:

          i. review of and assist in the preparation and filing
             of any Federal and state tax returns, including the
             consolidated Federal Form 1120, state, and Canadian
             federal and provincial returns;

         ii. analyze net operating loss and ownership change
             issues;

        iii. assist in determining the tax bases of subsidiary
             stock and the tax bases of each the Debtors' assets
             and liabilities;

         iv. provide advice and assist the Debtors regarding tax
             planning issues, including, but not limited to,
             assistance in estimating net operating loss
             carrybacks and carryforwards, international taxes,
             and state and local taxes;

          v. provide advice regarding transaction taxes, state
             and local sales taxes, use tax and payroll taxes;

         vi. provide assistance regarding tax matters related to
             the Debtors' pension plans and other compensation
             arrangements;

        vii. provide assistance regarding tax matters arising
             from repatriation of earnings and other
             transactions with or relating to non-US affiliates;

       viii. provide assistance regarding tax-basis depreciation
             calculations;

         ix. provide assistance regarding any existing or future
             IRS, state and/or local tax examinations; and

          x. provide advice and assist with the tax consequences
             of proposed plans of reorganization, including, but
             not limited to, assistance in the preparation of
             Internal Revenue Service and state and local ruling
             requests regarding the future tax consequences of
             alternative reorganization structures.

KPMG's customary hourly rates are:

                                         Information
  Level             Audit     Forensic   Risk Manager  Tax
  -----             -----     --------   ------------  ---  
  Partner/Director  $600-625  $700       $700          $575-625
  Senior Manager    $450-550                           $475
  Manager           $350-425  $550-650   $500-600      $300
  Senior            $225-325  $350-450   $400-525      $275
  Associate         $175-225  $200-250   $230-300      $225

Headquartered in Harrisburg, Pennsylvania, New World Pasta Company
-- http://www.nwpasta.com/-- is the leading dry pasta  
manufacturer in the United States.  The Company filed for Chapter
11 protection on May 10, 2004 (Bankr. M.D. Pa. Case No. 04-02817).  
Eric L. Brossman, Esq., at Saul Ewing LLP represents the Debtors
in their restructuring efforts.  When the Company filed for
protection from its creditors, they listed both estimated debts
and assets of over $100 million.


NOMURA ASSET: Fitch Affirms Low-B Ratings of 2 1996-MDV Classes
---------------------------------------------------------------
Fitch Ratings upgrades and removes from Rating Watch Positive
Nomura Asset Securities Corp.'s commercial mortgage pass-through
certificates, series 1996-MDV as follows:

               --$45 million class A-2 to 'AAA' from 'AA+';
               --$52.4 million class A-3 to 'AAA' from 'A+';
               --$48.7 million class A-4 to 'AA' from 'BBB';
               --$11.2 million class A-5 to 'A+ from 'BBB-'.

In addition, classes are affirmed as follows:

               --$28.9 million class A-1A 'AAA';
               --$352 million class A-1B 'AAA';
               --$7.5 million class A-1C 'AAA';
               --Interest-only classes CS-1 and CS-2 'AAA';
               --$48.7 million class B-1 'BB';
               --$33.7 million class B-2 'B';
               --$24.4 million class S-1 'BBB-'.

Fitch does not rate class B-2H.

The upgrades are due to the defeasance of three loans (44.8%) and
the anticipated defeasance of a fourth loan, Barnes Mall, (6.7%)
in August 2004. After accounting for the anticipated defeasance,
70.8% of the loans have an investment grade credit assessment
compared to 43% at issuance. Although Fitch remains concerned with
the decline in performance of the hotel loans (36.2 %) since
issuance, Fitch is encouraged by the May 2004 year-to-date
improvements reported in two of the four hotel loans (the other
two have not yet reported) and the improvements in the hotel
market generally.

As of the July 2004 distribution date, the pool's total principal
balance has been reduced by 15.7% to $652.6 million from $773.7
million at issuance due to the repayment of the First Industrial
loan and amortization on eight of the nine remaining fixed-rate
loans. After the Barnes Mall defeasance, four loans will be
secured by defeasance collateral and the five non-defeased loans
will be secured by 56 geographically diverse retail and hotel
properties. Four loans are crossed pools and one loan is secured
by single asset.

As part of its review, Fitch analyzed the performance of each loan
and the underlying collateral. Fitch compared each loan's stressed
debt service coverage ratio for the year ended December 2003 to
the DSCR at issuance. DSCRs are based on Fitch adjusted net cash
flow and a stressed debt service based on the current loan
balance. The overall Fitch stressed weighted average DSCR for YE
December 2003 for the loans remaining in the pool decreased to
1.62 times (x) from 1.79x at last review and from 1.71x at
issuance.

The Marriott Residence Inn II loan (20.1%) is collateralized by 22
extended stay hotels, which are located in 16 states. Adjusted NCF
for YE December 2003 declined significantly since issuance
(36.8%). The corresponding DSCR is 1.23x compared to 1.43x at
issuance. However, the borrower reports a significant improvement
in house profit for year-to-date May 2004 over YTD May 2003
(10.3%). The borrower additionally reports that ten properties
were renovated and six were refreshed in the past year.

The Shaner loan is divided into two parts: the standard note,
which is part of the overall pool and the junior flexible note,
which is rated on a stand alone basis and forms its own separate
tranche, class S-1. Adjusted NCF for YE December 2003 for the 21
properties remaining in the pool was flat compared to YE 2002, but
has declined by 32.9% from issuance. The standard note benefits
from the amortization of the whole loan applied entirely to the
standard note and from the partial defeasance of the allocated
loan balance of fourteen properties (20.5%) at 125%. The
corresponding DSCR for the standard note is 2.46x compared to
2.38x at last review and 2.26x at issuance. The corresponding DSCR
for the standard and junior flexible note together is 1.45x
compared to 1.50x at last review and 1.76x at issuance. Although
Fitch is concerned with the decline in net cash flow, the partial
defeasance, eighteen year amortization schedule, and current low
loan exposure of approximately $20,125 per room mitigate this
risk.

Buena Vista loan (6.6%) is a convention hotel located in Lake
Buena Vista, FL. Although Fitch YE 2003 NCF declined approximately
11% since YE 2002, it remains considerably higher than at issuance
(22.4%). In addition, the borrower reports a significant increase
in May 2004 YTD total revenues (11.8%) and net operating income
(23.6%) over YTD May 2003. The corresponding DSCR is 2.50x
compared to 2.68x at last review and 1.62x at issuance.

The Innkeepers Portfolio loan (3.9%) is collateralized by eight
extended stay hotels. The adjusted NCF for YE December 2003 has
declined 29.2% since issuance primarily due to the poor
performance of three hotels located in the San Jose, CA market
(39% of allocated loan balance). The corresponding DSCR fell to
1.91x compared to 2.41x at issuance. The credit assessment for
this loan has been lowered, but it remains investment grade.

The Horizon loan (9.1%) is collateralized by four factory outlet
centers, in Wisconsin, Washington, and Indiana. Adjusted NCF for
YE December 2003 has declined 16.8% since issuance. The
corresponding DSCR is 1.48x compared to 1.53x at last review and
1.55x at issuance. The current overall occupancy of the pool is
flat at 85.3% compared to last review.


NORTHERN BERKSHIRE: Fitch Assigns BB+ Ratings to Series 2004 Bonds
------------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to the approximately $25
million Massachusetts Health and Educational Facilities Authority,
Northern Berkshire Health Systems, revenue bonds, series 2004. In
addition, Fitch has affirmed the 'BB+' rating on the outstanding
$9.6 million Massachusetts Health and Educational Facilities
Authority Revenue Bonds, North Adams Regional Hospital Issue,
1996 series C.

The Rating Outlook is Stable. Bond proceeds will be used to fund
various hospital renovation and expansion projects, restructure
approximately $6 million of the outstanding bonds, fund a debt
service reserve, fund capitalized interest, and pay costs of
issuance. The bonds are expected to price the week of August 30
through negotiation by Ziegler Capital Markets Group.
The 'BB+' rating is based on Northern Berkshire Health Systems'  
dominant market position, successful recruitment of new
physicians, increasing outpatient volume, and demographics of the
service area. NBHS's primary credit strength continues to be its
dominant market position. With the hospital located in a rural,
geographically isolated area, market share has remained above 70%
over the past five years. The nearest competitor, Berkshire
Medical Center, is approximately 25 miles away and had only 16.7%
market share. NBHS has been successful in recruiting new
physicians with a net increase of 11 physicians over the last
three years. Fitch views this favorably especially due to the
recent decline in inpatient volume and believes the continued
ability to attract physicians will be a key driver in the return
to profitability for the organization. Although inpatient volume
has decreased, outpatient volume has increased. Fitch expects
outpatient volume to continue to increase with the expansion of
several services funded by this bond issuance. The service area
has a large percentage of the elderly population with 19% of the
primary service area over 65 years of age, which is viewed
favorably due to the higher utilization of services by this age
group. In addition, a senior living facility and nursing home were
acquired by the system in 1999 due to the demographics of the
service area, which should further aid revenue growth as occupancy
grows.

Credit concerns include NBHS's weak operating performance,
declining liquidity, and future capital needs. NBHS's financial
profile is weak with a history of large operating losses and
declining liquidity position. Operating income has slightly
improved to negative 2.8% operating margin through the six months
ended March 31, 2004 from negative 7.2% in fiscal 2001. Operating
losses have been due to difficult labor relations with the union,
declining inpatient volume, and losses at the senior living
facilities. Bottom line losses have led to a decline in liquidity
with 77.9 days cash on hand and 38.4% cash to debt at March 31,
2004 compared to 97.3 days cash on hand and 42.6% cash to debt at
fiscal year-end 2001. Due to NBHS's weak financial position,
capital spending has been limited and totaled 44% of depreciation
expense in fiscal 2003. However, historic capital investment in
the areas of information technology and equipment has been greater
than in the physical building. Fitch toured the facility and
believes the current project is significantly needed due to the
age of the plant. Future capital spending needs will place
pressure on NBHS's financial position if profitability does not
improve. The system has begun a capital campaign with the goal of
raising approximately $12 million. Total pledges are approximately
$9.0 million thus far, which Fitch views favorably.

NBHS projects to attain operating profitability in fiscal 2005 and
expects to achieve positive operating results in the near term.
Fitch believes the System's forecast is reasonable due to the
recent investment in plant, good physician recruitment and solid
market position.

Northern Berkshire Health Systems is located in North Adams, MA
with North Adams Regional Hospital (66 staffed bed hospital),
Sweetwood Continuing Care Retirement Community (70 independent
living units), and Sweet Brook Care Centers (184 bed skilled
nursing facility) as the main revenue generating components. With
this bond issuance, a new obligated group will be formed that will
comprise 100% of total revenue and 100% of total assets of the
health system. Fitch's rating on the 1996 bonds was historically
based on the hospital only. Total revenue of the health system was
$64 million in fiscal 2003. NBHS covenants to provide quarterly
disclosure to bondholders, which Fitch views favorably. Disclosure
to Fitch has been good with the receipt of timely, comprehensive
quarterly information.


NORTHWEST AIRLINES: Stockholders' Deficit Widens to $2.4 Billion
----------------------------------------------------------------
Northwest Airlines Corporation (Nasdaq: NWAC), the parent of
Northwest Airlines, reported a $182 million second quarter net
loss. This compares to the 2003 second quarter when the company
reported a net profit of $227 million.

Northwest's 2004 second quarter included a $104 million charge to
write-down previously parked 747-200 passenger aircraft and
related inventory. Excluding these unusual items, Northwest
reported a second quarter 2004 net loss of $78 million.

Last year, Northwest's second quarter results included $387
million of unusual items, principally including a $209 million
reimbursement of security fees received from the U.S. government
and a $199 million gain from the sale of Northwest's interest in
Worldspan. Excluding unusual items, Northwest reported a second
quarter 2003 net loss of $160 million.

"For the second consecutive quarter, our financial results were
adversely affected by high aircraft fuel prices which are expected
to remain at near record levels for the foreseeable future," said
Richard H. Anderson, chief executive officer.

"We continued to reduce non-labor costs throughout the
organization and we maintained our revenue premium to the
industry. However, our fundamental challenge remains constant: we
must reduce our labor costs to address the new revenue environment
in which we find ourselves."

Mr. Anderson added, "Once we achieve labor cost restructuring, we
believe Northwest has a strong business strategy for success that
includes a flexible fleet that continues to be renewed, an
extensive route network complemented by strong airline alliances,
excellent hub airport facilities, and employees who strive to put
our customers first."

                      Operating Results

Operating revenues in the second quarter increased by 18.5% versus
the second quarter of 2003 to $2.87 billion. Passenger revenue per
available seat mile increased by 12.7% on 6.4% more available seat
miles (ASMs).

Operating expenses in the quarter increased 17.1% versus a year
ago to $2.92 billion. Unit costs, excluding fuel and unusual
items, remained flat on higher ASMs. Fuel prices averaged 107.9
cents per gallon, excluding taxes, up 34% versus the second
quarter 2003.

Northwest's quarter-ending cash balance was $3.0 billion, of which
$2.9 billion was unrestricted.

Bernie Han, executive vice president and chief financial officer,
said, "We maintained our strong cash position during the quarter
in part by reducing our non-labor unit costs. These actions
included the initiation of a ninth round of cost reductions
designed to further trim costs."

                           Other

Commenting on labor discussions, Doug Steenland, president, said,
"We have been meeting regularly with our pilots represented by the
Air Line Pilots Association (ALPA). We have exchanged proposals on
numerous issues and anticipate continuing our discussions."

On Tuesday, July 20, Northwest announced a major expansion of its
Indianapolis schedule that will more than double the number of
daily departures it offers by Oct. 31. New nonstop service to
Boston, Ft. Myers, Fla., Hartford, Conn., Las Vegas, Los Angeles,
New York, Orlando, Fla., Philadelphia, Raleigh/Durham, N.C., and
Washington will be offered in addition to current service to
Northwest's three domestic hubs at Detroit, Minneapolis/St. Paul
and Memphis.

"Tuesday's announcement is yet another example of Northwest's
continued commitment to provide America's Heartland with
convenient service. The Indianapolis expansion builds on
successful schedule enhancements that we have made in other key
Midwestern markets including Milwaukee and Grand Rapids,"
Steenland said.

SkyTeam announced during the quarter that it has formally invited
Northwest Airlines, along with KLM and Continental Airlines, to
join the SkyTeam network of carriers later this year. "Our SkyTeam
entry will build on the successful alliance strategy we have
developed over many years with major carriers including KLM,
Continental, and Delta Air Lines. Entry into SkyTeam will allow us
to significantly enhance the product that we can offer our global
customers," Steenland added.

Northwest continues to build its route network, adding new service
to a number of international and domestic markets in recent
months. On June 10, the airline began daily flights between
Portland, Ore., and its Pacific hub at Tokyo. In addition, the
carrier is increasing its presence in Hawaii. This month,
Northwest resumed service between Los Angeles and Honolulu and
added Kona, Hawaii to its network with daily service to Seattle.
Northwest also plans to serve Portland and San Francisco from
Honolulu, later this year.

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

Northwest Airlines will webcast its second quarter results
conference call at 11:30 a.m. Eastern Daylight Time (10:30 a.m.
Central) today. Investors and the news media are invited to listen
to the call through the company's investor relations Web site at
http://ir.nwa.com/

At June 30, 2004, Northwest Airlines' balance sheet showed a
stockholders' deficit of $2.4 billion compared to a deficit of
$2 billion at December 31, 2003.


NORTHWEST AIRLINES: Expands Major Flights from Indianapolis
-----------------------------------------------------------
Northwest Airlines (Nasdaq: NWAC) expands its Indianapolis
schedule that will more than double the number of departures it
offers by adding new nonstop service to Boston, Ft. Myers, Fla.;
Hartford, Conn.; Las Vegas, Los Angeles, New York, Orlando, Fla.;
Philadelphia, Raleigh/Durham, N.C. and Washington. All 19 of the
new flights begin October 31, 2004.

When combined with its existing schedule of 17 daily flights to
its three domestic hubs of Detroit, Memphis and Minneapolis/St.
Paul, the airline will offer an all-jet schedule from Indianapolis
International Airport totaling up to 36 flights a day to 13
destinations, more jet aircraft departures than what's offered by
any other airline. In addition, through its three hubs, Northwest
and its marketing partners offer Indianapolis travelers
connections to another 436 destinations.

"Northwest is proud to be the leading choice of travelers in
America's Heartland," said Fay Beauchine, vice president of sales
and customer relations. "Our Indianapolis expansion builds on
successful schedule enhancements we have made in other key
Midwestern markets for Northwest such as Milwaukee and Grand
Rapids."

Northwest's new flights to Hartford and Raleigh/Durham will be the
only nonstops offered to those destinations from Indianapolis.
Flights to many of the new destinations are ideally timed for a
one-day business trip.

"Our new Indianapolis schedule will provide business and leisure
travelers with a schedule, array of services and network reach
that only a world-class airline can provide," Ms. Beauchine
continued. "When combined with the scope of our domestic marketing
partners, Continental Airlines and Delta Air Lines, Northwest
offers Indianapolis travelers unmatched access to the world. In
fact, we carry more international travelers from Indianapolis than
any other airline."

Northwest will offer daily flights from Indianapolis to Ft. Myers,
Las Vegas, Los Angeles and Orlando. The Las Vegas and Los Angeles
flights will be operated with a 124-seat Airbus A319, with 16
seats in first class and 108 seats in coach class. Northwest's new
Ft. Myers and Orlando flights will be operated with a 100-seat
DC9, with 16 seats in first class and 84 seats in coach class.

Through its Northwest Airlink partner, Pinnacle Airlines,
Northwest will offer two departures to Hartford, Philadelphia and
Raleigh/Durham. Northwest Airlink will also offer three departures
to the key business destinations of Boston, New York (LaGuardia
Airport) and Washington (Ronald Reagan Washington National
Airport).

All of the Northwest Airlink flights will be operated with 44-seat
Canadair Regional Jets (CRJs). Some of the Northwest Airlink
flights will operate six days per week, with exceptions being
Saturday or Sunday.

Indianapolis travelers using Northwest's new nonstop service will
also be able to take advantage of:

   -- WorldPerks.  Northwest's WorldPerks program offers
      Indianapolis travelers a wider array of options to both earn
      and redeem frequent flyer miles.  WorldPerks members can
      earn or redeem miles to any of the 236 cities served by
      Northwest and Northwest Airlink carriers worldwide, as well
      as the many hundreds of cities served by WorldPerks partner
      airlines such as KLM, Continental Airlines and Delta Air
      Lines.

   -- First class availability.  Northwest offers more first class
      seats from Indianapolis than any other airline.  The
      airline's new flights to Ft. Myers, Las Vegas, Los Angeles
      and Orlando will offer 16-seat first class cabins.  
      WorldPerks members who achieve "Elite" status enjoy
      unlimited complimentary upgrades to first class.

   -- The most self-service functionality.  Northwest's self-
      service check-in program is the most developed in the
      airline industry, offering customers more functionality
      including the option of checking-in, obtaining a boarding
      pass, changing seats, and performing many other functions
      over the Internet at nwa.com or through one of the airline's
      903 self-service check-in kiosks in 193 airports, more than
      any other airline in the world.  At Indianapolis
      International Airport, Northwest customers wishing to take
      advantage of the speed, convenience, and control of self-
      service check-in can use nwa.com to obtain their boarding
      pass, or visit one of 12 self-service check-in kiosks.

Customers currently holding tickets for travel October 31 or
beyond on connecting itineraries from Indianapolis will be able to
change to Northwest's new nonstop services without paying an
administrative change fee, provided changes are made by July 31,
2004.

Northwest's new Indianapolis nonstops are currently open for sale
via the Internet at http://www.nwa.com/by calling Northwest  
Airlines Reservations at 1-800-225-2525, or through some travel
agencies. All of the flights will be widely available for sale on
Saturday, July 24, 2004.

            Northwest Commemorates New Indianapolis Service
               With Frequent Flyer Mile Bonus Offer

From October 31 through December 31, 2004, members of Northwest's
WorldPerks frequent flyer program will receive a bonus of 1,000
WorldPerks miles for flying round-trip on the airline's new
nonstop service between Indianapolis and Boston, Ft. Myers,
Hartford, Las Vegas, Los Angeles, New York, Orlando, Philadelphia,
Raleigh/Durham, or Washington. Registration is required prior to
travel and must be completed no later than November 30, 2004.

Fast and easy online enrollment in the WorldPerks program is
available at http://www.nwa.com/freqfly/direct/enrolor by calling  
1-888-955-7878. For a complete list of terms and conditions, and
to register for this bonus offer, WorldPerks members should visit
http://www.nwa.com/IND04

Northwest currently offers 17 jet flights per day from
Indianapolis, including eight to its WorldGateway at Detroit hub,
three to its convenient Memphis hub, and six to its hub at
Minneapolis/St. Paul.

Northwest Airlines is the world's fifth largest airline with hubs
at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam,
and approximately 1,500 daily departures. Northwest and its travel
partners serve nearly 750 cities in almost 120 countries on six
continents. In 2003, consumers from throughout the world
recognized Northwest's efforts to make travel easier. Northwest's
WorldPerks program was named the most popular North American
frequent flyer program by readers of TIME Asia in the 2003 TIME
Readers' Travel Choice Awards. A 2003 J.D. Power and Associates
study of airports ranked Minneapolis/St. Paul and Detroit, home to
Northwest's two largest hubs, in second and fourth place among
large domestic airports in overall customer satisfaction.

At June 30, 2004, Northwest Airlines' balance sheet showed a
stockholders' deficit of $2.4 billion compared to a deficit of
$2 billion at December 31, 2003.


NRG ENERGY: Asks Court's Permission to Assign 15 Contracts to OG&E
------------------------------------------------------------------
In connection with the sale of substantially all of the assets of
NRG McClain, LLC, to Oklahoma Gas & Electric Company, NRG McClain
will assume and assign 15 executory contracts and unexpired
leases to Oklahoma Gas:

    (1) Settlement Agreement and Release, dated as of October 28,
        2003, among NRG McClain, Duke/Fluor Daniel and Oklahoma
        Gas;

    (2) Amendment No. 1 to Settlement Agreement and Release, dated
        as of February 4, 2004, among NRG McClain, Duke/Fluor
        Daniel and Oklahoma Gas;

    (3) Purchase Order No. M-2357, dated September 22, 2003,
        issued to Alstom, amounting to $18,000;

    (4) Purchase Order No. M-2408, dated October 28, 2003, issued
        to Belger Cartage Service, Inc., amounting to $18,170;

    (5) Purchase Order No. M-2416, dated November 3, 2003, issued
        to Alstom, amounting to $36,000;

    (6) Purchase Order No. M-2417, dated November 3, 2003, issued
        to General Electric International, Inc., amounting to
        $104,348.78;

    (7) Purchase Order No. M-2368, dated November 3, 2003, issued
        to Vinson Process Controls, amounting to $11,000;

    (8) Release of Easement, dated as of October 22, 2003,
        executed by NRG McClain in favor of Donald L. Ward and
        Janette Ward;

    (9) Correction of Easement, dated as of October 24, 2003,
        between Donald L. Ward and Janette Ward, and NRG McClain;

   (10) Amendment to Confirmation to Master Power Purchase and
        Sale Agreement, dated as of March 31, 2004, between NRG
        McClain and Oklahoma Gas;

   (11) Base Contract for Sale and Purchase of Natural Gas, dated
        as of March 31, 2004, between Oklahoma Gas and NRG
        McClain, with Special Provisions thereto;

   (12) Purchase Order No. M-2662, dated April 19, 2004, issued to
        Crane Valve Services, amounting to $10,378;

   (13) Purchase Order No. M-2745, dated June 7, 2004, issued to
        ATS Express, LLC, amounting to $27,334;

   (14) Purchase Order No. M-2764, dated June 15, 2004, issued to
        Weir Valve & Controls, amounting to $23,648; and

   (15) Purchase Order No. MC-2579-8, dated July 7, 2004, issued
        to OG&E, amounting to $30,332.

Six executory contracts and unexpired leases, which were listed
on the original Schedule 3.8 to the Asset Purchase Agreement
dated as of August 18, 2003 by and between Oklahoma Gas and NRG
McClain, will not be assumed by NRG McClain and will not be
assigned to Oklahoma Gas as part of the Sale:

    (1) Letter Agreement dated October 20, 2000 between Duke
        Energy McClain, LLC, and Aquatech International Corp.
        regarding system for minimizing cooling tower effluent;

    (2) Request for Services of ENSR Corporation made by Duke
        Energy North America dated May 30, 2001;

    (3) Letter Agreement between CH2M Hill Constructors, Inc., and
        Duke Energy McClain dated July 17, 2001 for additional
        monies for completion of construction of Phase II Surface
        Facilities;

    (4) Letter from Duke/Fluor Daniel to Duke Energy North America
        dated April 9, 2001 re City of Newcastle Request for
        McClain Soil;

    (5) Product Sale Agreement between Airgas Mid-South, Inc., and
        NRG McClain dated September 4, 2002; and

    (6) Assignment of Excluded Assets between Duke Energy North
        America and Duke Energy McClain dated as of August 31,
        2001.

NRG Energy, Inc. owns and operates a diverse portfolio of power-
generating facilities, primarily in the United States. Its
operations include baseload, intermediate, peaking, and
cogeneration facilities, thermal energy production and energy
resource recovery facilities.

The company, along with its affiliates, filed for chapter 11
protection (Bankr. S.D.N.Y.  Case No. 03-13024) on May 14, 2003.  
Debtors' counsel are James H.M. Sprayregen, P.C., Matthew A.
Cantor, Esq., and Robbin L. Itkin, Esq. of Kirkland & Ellis. When
the company filed for protection from its creditors, it listed
total assets of $10,310,000,000 and total liabilities of
$9,229,000,000.  (NRG Energy Bankruptcy News, Issue No. 31;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ORBITAL SCIENCES: Q2'04 Operating Income Rose to $14.5 Million
--------------------------------------------------------------
Orbital Sciences Corporation (NYSE:ORB) reported financial results
for the second quarter of 2004 and the first six months of the
year, reporting significant improvements in revenue, operating
income and net income relative to the same periods in 2003.
Orbital reported second quarter 2004 revenues of $177.7 million,
up 12% over second quarter 2003 revenues of $158.4 million. The
company's second quarter 2004 operating income rose to $14.5
million as compared to second quarter 2003 operating income of
$1.5 million. Net income was $11.1 million, or $0.17 diluted
earnings per share in the second quarter of 2004, versus a $4.6
million net loss, or $0.10 net loss per share, in the second
quarter of 2003. The company also reported positive free cash
flow(1) of $5.5 million in the second quarter of 2004. During the
quarter, Orbital repurchased approximately $5 million of its 9%
senior notes due 2011 and $2 million of its common stock in
connection with a $50 million securities repurchase program that
was announced in April.

Commenting on the second quarter's financial results, Orbital's
Chairman and Chief Executive Officer, Mr. David W. Thompson, said,
"We completed another very solid quarter, marked by outstanding
execution of our operational programs and continued improvements
in our financial performance. In the second quarter, our
satellites and related space systems segment's revenues and
profits continued to grow, our launch vehicles segment turned in
another strong quarter and our transportation management systems
segment continued on its path of steady improvement."

                           Revenues

Orbital's second quarter 2004 revenues were $177.7 million, up 12%
over second quarter 2003 revenues of $158.4 million. This increase
was primarily driven by the company's satellites and related space
systems segment largely as a result of recent contract awards in
its science, technology and defense satellite product line.

For the first six months of 2004, Orbital reported $329.1 million
in revenues, up 12% from $295.1 million in the same period last
year. As in the second quarter, the increase in year-to-date
revenues was primarily attributable to the company's satellites
and related space systems segment.

                        Operating Income

Orbital reported operating income of $14.5 million in the second
quarter of 2004, compared to operating income of $1.5 million in
the same quarter of 2003. This increase was largely attributable
to improved results in the satellites and related space systems
segment and the transportation management systems segment, in
addition to the absence in 2004 of $3.5 million in settlement
charges related to litigation with the company's former affiliate,
Orbital Imaging Corporation ("ORBIMAGE"), recorded in the second
quarter of 2003.

The improvement in operating income in the satellites and related
space systems segment was due to a number of factors including
profit derived from the revenue growth in the science, technology
and defense satellites product line, favorable revenue and cost
adjustments on certain contracts and the absence of a loss accrued
in 2003 on the OrbView-3 satellite program. The transportation
management systems segment's operating results improved largely
due to the absence of contract cost increases and inventory-
related charges recorded in the second quarter of 2003. Operating
income in the launch vehicles segment decreased slightly in the
second quarter of 2004 as compared to the same quarter last year.
The launch vehicles segment's missile defense interceptor product
line produced higher operating income, but this improvement was
more than offset by lower quarterly results from the other product
lines in this segment.

Operating income for the first six months of 2004 was $28.7
million compared to $10.8 million in the same period in 2003. This
increase was largely due to the same factors that drove the
improvements in the second quarter as described above. In
addition, Orbital recorded a $2.5 million non-recurring gain
earlier this year on the sale of notes that the company had
received from ORBIMAGE.

                          Net Income

Orbital's net income in the second quarter was $11.1 million, or
$0.17 diluted earnings per share, as compared to a net loss of
$4.6 million, or $0.10 loss per share, in the second quarter of
2003. The improvement in net income was due to the $13.0 million
increase in operating income and a $3.3 million decrease in
interest expense in the second quarter of 2004. The interest
expense reduction is attributable to the company's third quarter
2003 debt refinancing transaction. The second quarter of 2004
includes $0.6 million, or $0.01 diluted earnings per share, in
debt extinguishment expenses pertaining to the repurchase of
approximately $5 million of the company's 9% senior notes.

Orbital's net income for the first half of 2004 was $22.5 million,
or $0.34 diluted earnings per share, compared to a net loss of
$1.2 million, or $0.03 loss per share, in the same period of 2003.

                  Cash Flow and Balance Sheet

As of June 30, 2004, Orbital's unrestricted cash balance was
$105.8 million. The company had positive free cash flow of $5.5
million in the second quarter of 2004 and $46.9 million for the
first six months of 2004.

                    New Business Highlights

During the second quarter of 2004, Orbital booked approximately
$110 million in new firm and option contracts. In addition, the
company received approximately $60 million of option exercises
under existing contracts. As of June 30, 2004, the company's firm
contract backlog was approximately $870 million, up 36% over its
value a year ago, while its total backlog (including options,
indefinite-quantity contracts and undefinitized orders) was
approximately $2.34 billion, down about 9% compared to this time
last year.

                   Operational Highlights

In the second quarter of 2004, Orbital conducted two suborbital
launches of its missile defense target vehicles and one space
launch of its Taurus rocket. The target vehicles included the
third launch of the "Coyote" Supersonic Sea-Skimming Target (SSST)
vehicle for the U.S. Navy in May and the first launch of the
Short-Range Air-Launched Target (SRALT) for the U.S. Army in June.
Also in May, Orbital successfully launched the Taurus XL space
launch vehicle that carried the Republic of China's ROCSAT-2
remote sensing satellite into low-Earth orbit. The mission was the
inaugural flight of the enhanced performance "XL" version of the
Taurus launch vehicle.

In addition to these operational events, Orbital delivered three
of its Orbital Boost Vehicle (OBV) long-range missile defense
interceptors and five science and technology satellite systems to
customers for upcoming launches or deployments. These included the
delivery of the first two operational OBV interceptors for the
U.S. Missile Defense Agency's (MDA's) Ground-based Midcourse
Defense (GMD) system that are scheduled to be deployed in Alaska
this month. Also delivered in the second quarter were five small
scientific satellite platforms for the Republic of China's ROCSAT-
3 remote sensing satellite program.

Orbital's third quarter 2004 operational mission plans and product
delivery schedule remain very active. The company is scheduled to
conduct the fourth test flight of its OBV interceptor vehicle to
support MDA's Integrated Flight Test 13c, as well as to deliver
four more interceptors to complete the initial deployments in
Alaska. Orbital is also on track to conduct several additional
flight tests of the "Coyote" SSST vehicle for the U.S. Navy and to
carry out two medium-range target launches for MDA and the U.S.
Army in the third quarter.

                     2004 Guidance Update

Orbital reaffirmed its full-year 2004 forecast of revenues in the
range of $660 to $670 million and operating income margin in the
range of 7% to 8% of revenues. Based on estimated average diluted
shares of 66 to 67 million for the year, Orbital continues to
anticipate that its 2004 diluted earnings per share will be in the
range of $0.60 to $0.65.

The company increased its free cash flow guidance by $5 million to
a new range of $45 to $55 million for the year. In addition, to
date Orbital has received approximately $2 million from common
stock warrant exercises and may receive up to $20 million from the
exercise of common stock warrants that expire in the third quarter
of this year.

                          About Orbital

Orbital develops and manufactures small space and rocket systems  
for commercial, military and civil government customers. The  
company's primary products are satellites and launch vehicles,  
including low-orbit, geosynchronous and planetary spacecraft for  
communications, remote sensing, scientific and defense missions;  
ground- and air-launched rockets that deliver satellites into  
orbit; and missile defense systems that are used as interceptor  
and target vehicles. Orbital also offers space-related technical  
services to government agencies and develops and builds satellite-
based transportation management systems for public transit  
agencies and private vehicle fleet operators.

As reported in the Troubled Company Reporter's June 14, 2004  
edition, Standard & Poor's Ratings Services raised its ratings,  
including the corporate credit rating to 'BB-' from 'B+', on  
Orbital Sciences Corp. The outlook is stable. The company has $135  
million in rated debt.

"The upgrade reflects Orbital's improved credit profile, supported  
by adequate liquidity, better operating performance, and a sizable  
backlog," said Standard & Poor's credit analyst Christopher  
DeNicolo.


PACIFIC MAGTRON: Ability to Operate Profitably Uncertain
--------------------------------------------------------
The consolidated financial statements of Pacific Magtron
International Corp. include its subsidiaries, Pacific Magtron,
Inc. (PMI), Pacific Magtron (GA) Inc. (PMIGA) and LiveWarehouse,
Inc. (LW). PMI and PMIGA's principal activity consists of the
importation and wholesale distribution of electronics products
computer components, and computer peripheral equipment throughout
the United States. LW sells consumer computer products through the
internet and distributes certain computer products to resellers.

During the second quarter 2003, the Company sold substantially all
the intangible assets of its majority owned subsidiary Frontline
Network Consulting, Inc. (FNC) to a third party.  The Company also
sold all the intangible assets and certain tangible assets of its
wholly owned subsidiary Lea Publishing, Inc. (Lea) to certain of
Lea's employees. PMI Capital Corporation (PMICC), a wholly owned
subsidiary, formed for the purpose of acquiring companies or
assets deemed suitable for PMIC's organization, was dissolved in
the third quarter of 2003.  

The Company incurred a net loss applicable to common shareholders
of $319,200 for the three months ended March 31, 2004 and
$2,896,600 and $3,110,100 for the years ended December 31,  2003
and 2002, respectively. During 2003, the Company also triggered a
redemption provision in its Series A redeemable convertible
preferred stock agreement and as a result, has increased the value
of such stock to its redemption value and reclassified it as a
current liability. In addition, the Company is in violation of
certain of its debt covenants, which violations had been
subsequently waived through June 30, 2004. Based on anticipated
future results, it is probable that the Company will be out of
compliance with certain of the covenants in future  quarters. If
this were to occur and waivers for the violations could not be
obtained, the Company's inventory flooring line might be
terminated and loan payments on its inventory flooring line and
mortgage loan might be accelerated.

Further, the Company's common stock was delisted from the NASDAQ
SmallCap market effective April 30, 2003 as a result of the
Company being out of compliance with the NASDAQ's minimum market
value and minimum common stock bid price requirements. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern. The Company's ability to continue as
a going concern is dependent upon it achieving profitability and
generating sufficient cash flows to meet its obligations as they
come due. Management believes that its downsizing through the
disposal of its subsidiaries, FNC, Lea and PMICC, and its
continued cost-cutting measures to reduce overhead at its
remaining subsidiaries and an improving economy will enable it to
achieve profitability.  However, there can be no assurance that
the Company will be able to achieve a profitable level of
operations. If the Company were unable to do so, it would have to
obtain additional equity or debt financing or sell a sufficient
amount of its assets to retire the Textron and Wells Fargo credit
facilities. There can be no assurance the Company will be able to
obtain debt or equity financing or obtain it on terms acceptable
to the Company. If the Company were forced to liquidate its
assets, there can be no assurance that the Company could raise
sufficient proceeds to meet its obligations.


PARMALAT: Milk Products Proposes $600,000 Sale Pact Break-Up Fee
----------------------------------------------------------------
Parmalat Group North America, Milk Products of Alabama, LLC, and
National Dairy Holdings, LP, have agreed that the Asset Purchase
Agreement they executed will serve as a stalking horse deal to
attract higher bids.  In the event that Milk Products abandons the
sale of the Alabama Business, terminates the Purchase Agreement
under certain circumstances, or agrees to sell the Business to
another successful bidder at the auction, Milk Products proposes
to pay NDH a $600,000 break-up fee and reimburse NDH's expenses
not to exceed $300,000.

The payment of the Break-Up Fee and Expense Reimbursement is
justified to compensate NDH:

   -- for the time and expense dedicated to the sale transaction
      and the value NDH added in:

     (1) establishing a bid standard or minimum for other bidders
         with respect to the Alabama Business; and

     (2) placing the Alabama Business in a "sales configuration
         mode" attracting other bidders to the Auction; and

   -- for serving, by its name and its expressed interest, as a
      catalyst for other potential or actual bidders for the
      Alabama Business.

The Break-Up Fee and Expense Reimbursement will constitute a
superpriority administrative expense claim against Milk Products'
estate under Sections 364, 503(b), and 507(a)(1) of the
Bankruptcy Code and will be paid immediately, without further
Court order.

Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- generates more than 7 billion  
euros in annual revenue.  The Parmalat Group's 40-some brand
product line includes milk, yogurt, cheese,  butter, cakes and
cookies, breads, pizza, snack foods and vegetable sauces, soups
and juices and employs over 36,000 workers in 139 plants located  
in 31 countries on six continents.  The Company filed for chapter
11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-
11139).  Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at
Weil Gotshal & Manges LLP represent the Debtors in their
restructuring efforts.  On June 30, 2003, the Debtors listed
EUR2,001,818,912 in assets and EUR1,061,786,417 in debts.
(Parmalat Bankruptcy News, Issue No. 25; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


PEAK ENTERTAINMENT: Revenues Insufficient to Ensure Viability
-------------------------------------------------------------
Peak Entertainment Holdings, Inc, formerly Peak Entertainment Ltd.
was formed on November 20, 2001, as an integrated media group
focused on children.  Its activities include the  production of
television entertainment, character licensing and consumer
products development, including toy and gift manufacturing and
distribution.  Integration enables Peak Entertainment Holdings,
Inc. to take a property from concept to consumer, in-house,
controlling and coordinating broadcast, promotions and product
launches (toys, apparel, video games, etc.) to build market
momentum and worldwide brand quality.

The Company's financial statements have been prepared assuming
that the Company will continue as a going concern.  The Company
has sustained recurring operating losses and has a net capital
deficiency as of March 31, 2004.

The Company has developed a business plan to increase revenue by
capitalizing on its integrated media products.  However, the
company must obtain funds from outside sources in fiscal 2004 to
provide needed liquidity and successfully implement its business
plan.    Presently, the Company has no firm commitments from
outside sources to provide these funds.  These factors raise
substantial doubt about the Company's ability to continue in
existence.   While the Company is optimistic that it can execute
its revised business plan, there can be no assurance that;
increased sales necessary to obtain profitability will
materialize, and the Company will be able to raise sufficient cash
to fund the additional working capital requirements.

Peak Entertainment Holdings' revenues have been insufficient to
cover its operating expenses.  Since inception, it has been
dependent on loans from the Company's officers and on private
placements of the Company's securities in order to sustain
operations.

Management expects to satisfy its liquidity needs on a short-term
basis through private placements of the Company's securities,
including the issuance of debt. There can be no assurances that
the proceeds from private placements or other capital transactions
will continue to be available,  that revenues will increase to
meet cash needs, that a sufficient  amount of securities can or
will be sold, or that any common stock purchase options/warrants
will be exercised to fund its operating needs.

Management believes that the Company will need operating capital
of approximately $3,000,000 in the next twelve months to maintain
current operations, and operating capital of approximately
$7,500,000 in the next twelve to twenty four months to complete
planned entertainment projects already in the pre-production and
production stages.

As of March 31, 2004, the Company had commitments for capital and
other expenditures aggregating $5,474,289 included in current and
long term liabilities, payable over a maximum 20 year period.

Peak Entertainment Holdings relies on short-term outside funding
to meet its short-term liquidity needs, as the internal cash flows
generated by sales of its toys and gift products have been
insufficient to fully meet its short-term liquidity needs. The
Company anticipates that in fiscal year 2005, it will be in
position to meet its short-term and long-term liquidity needs
through the internal cash flows generated from broadcast sales
from its current entertainment projects, Monster In My Pocket and
The Wumblers, which are scheduled for production in 2004. However,
gross profit for the quarter ended March 31, 2004 represented only
0.2% of Company commitments as of March 31, 2004. Because current
operations did not generate any significant revenues and principal
planned products are still in production stages, the Company is in
constant need of cash to pay for ordinary operating expenses, and
more significantly, to pay for the production costs of three
projects currently in various stages of production. Accordingly,
until the entertainment projects can be funded and full television
production activities commenced, Peak Entertainment Holdings will
continue to rely on short-term outside funding. If unable to
obtain funding for the projects, the Company has indicated that it
may be forced to curtail or terminate operations.

  
PG&E NATIONAL: Court Approves Tax Agreement Between NEG & USGen
---------------------------------------------------------------
In settlement of previous tax sharing disputes between Debtors
National Energy & Gas Transmission, Inc. and USGen New England,
Inc., Judge Mannes of the U.S. Bankruptcy Court for the District
of Maryland declares that at NEG's direction, USGen will either:

   (a) assign to NEG any affirmative claims or causes of action
       it may have against the parent company, PG&E Corporation,
       with respect to tax matters related to the period during
       which USGen was a member of the PG&E Corp. consolidated
       tax group; or

   (b) waive the affirmative claims or causes of action.

Headquartered in Bethesda, Maryland, Lead Debtor PG&E National
Energy Group, Inc. -- http://www.pge.com/-- develops, builds,  
owns and operates electric generating and natural gas pipeline
facilities and provides energy trading, marketing and risk-
management services.  The Company filed for Chapter 11 protection
on July 8, 2003 (Bankr. D. Md. Case No. 03-30459).  Matthew A.
Feldman, Esq., Shelley C. Chapman, Esq., and Carollynn H.G.
Callari, Esq., at Willkie Farr & Gallagher represent the Debtors
in their restructuring efforts.  When the Company filed for
protection from its creditors, it listed $7,613,000,000 in assets
and $9,062,000,000 in debts. (PG&E National Bankruptcy News, Issue
No. 24; Bankruptcy Creditors' Service, Inc., 215/945-7000)    


PRESIDENT CASINOS: Court Denies Golf Course Re-Zoning Appeal
------------------------------------------------------------
President Casinos, Inc. (OTC:PREZQ.OB) reported that the re-zoning
appeal related to the sale of its Biloxi President Broadwater Golf
Course was denied in the Circuit Court of Harrison County,
Mississippi. The Company had a contract to sell the golf course,
which was contingent upon the proposed re-zoning.

President Casinos, Inc. owns and operates dockside gaming  
facilities in Biloxi, Mississippi and downtown St. Louis,  
Missouri, north of the Gateway Arch.

At May 31, 2004, President Casinos, Inc.'s balance sheet shows a  
stockholders' deficit of $52,899,000 compared to a deficit of  
$52,349,000 at February 29, 2004.


QWEST COMMS: Will Release 2nd Quarter Results on August 3
---------------------------------------------------------
Qwest Communications International Inc. (NYSE:Q) will release
second quarter 2004 earnings and operational highlights on
Tuesday, August 3, 2004, at approximately 7:00 a.m. EDT.

Qwest will host a conference call August 3, 2004, at 9:00 a.m.
EDT. This call will feature Richard C. Notebaert, chairman and
CEO, and Oren G. Shaffer, vice chairman and CFO, who will jointly
provide the company's perspective on second quarter results.

You may access a live audio webcast or a replay of the webcast at
http://www.qwest.com/about/investor/meetings/

                      About Qwest  
  
Qwest Communications International Inc. (NYSE: Q) is a leading  
provider of voice, video and data services to more than 25 million
customers. The company's 46,000 employees are committed to the  
"Spirit of Service" and providing world-class services that exceed
customers' expectations for quality, value and reliability. For
more information, please visit the Qwest Web site at  
http://www.qwest.com/
  
At March 31, 2004, Qwest Communications International, Inc.'s
balance sheet shows a stockholders' deficit of $1,251,000,000
compared to a deficit of $1,016,000,000 at December 31, 2003.


RCN CORP: Creditors Committee Wants to Retain Chanin as Advisor
---------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in RCN
Corporation's chapter 11 cases wants to retain Chanin Capital
Partners as its financial advisor, effective as of June 14, 2004.  
Committee Co-Chairman Eric L. Eddin relates that Chanin Capital
has extensive experience in distressed transactions, including in
Chapter 11 cases and representations of creditors.

As the Committee's financial advisor, Chanin Capital will:

   (a) analyze (i) the Debtors' operations, business strategy,
       and competition in each of their relevant markets, and
       (ii) the industry dynamics affecting the Debtors;

   (b) analyze the Debtors' financial condition, business plans,
       capital spending budgets, operating forecasts, management,
       and the prospects for their future performance;

   (c) assist in the determination of an appropriate capital
       structure for the Debtors as part of their plan of
       reorganization;

   (d) determine a theoretical range of values for the Debtors
       on a going concern basis;

   (e) advise the Committee on tactics and strategics for
       negotiating with the Debtors and the holders of the
       existing senior debt obligations and other stakeholders,
       like the new financing sources, in the context of the
       Debtors' reorganization plan;

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

   (g) provide the Committee with other and further financial
       advisory services with respect to the Debtors and
       a Restructuring Transaction as may be requested by the
       Committee.

Chanin Capital will charge a $100,000 monthly fee, and will expect
reimbursement of all out-of-pocket expenses.  Chanin reserves the
right to request a success fee.

                   Indemnification Provisions

The terms of Chanin Capital's engagement include the provision
that the Debtors will indemnify and hold harmless Chanin Capital
and its affiliates from and against any losses, claims, damages,
judgments, assessments, costs and other liabilities, whether they
be joint or several.  The Debtors will also reimburse Chanin
Capital and its affiliates for all fees and expenses, including:

      (i) the reasonable fees and expenses of counsel, arising
          out of, or in connection with advice or services
          rendered, or to be rendered by Chanin Capital on the
          Committee's behalf;

     (ii) the transactions contemplated in connection with the
          Chapter 11 cases; or

    (iii) any indemnified person's actions or inactions in
          connection with any advice, services or transactions.

The Debtors will not be obligated to indemnify against losses or
pay expenses that are determined by a final judgment by a court
of competent jurisdiction to have resulted from an indemnified
person's gross negligence or willful misconduct.

In the event that the indemnification is unavailable, the Debtors
will contribute to the losses or expenses payable by the
indemnified party.  Chanin Capital and its affiliates will be
liable in respect of the services to be rendered to the
Committee, only to the extent that any losses and expenses
resulted solely from the gross negligence or willful misconduct
of Chanin Capital or its affiliate.

Rusell Belinsky, Senior Managing Director at Chanin Capital,
assures the Court that the firm serves no interest adverse to the
interests of the Committee or the Debtors' estate.

Headquartered in Princeton, New Jersey, RCN Corporation --
http://www.rcn.com/-- is a provider of bundled Telecommunications  
services. The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 04-13638) on
May 27, 2004. Frederick D. Morris, Esq., and Jay M. Goffman, Esq.,
at Skadden Arps Slate Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. When the Debtors filed for protection
from their creditors, they listed $1,486,782,000 in assets and
$1,820,323,000 in liabilities. (RCN Corp. Bankruptcy News, Issue
No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000)


REDBACK NETWORKS: Reports 45% Net Revenue Increase in 2nd Quarter
-----------------------------------------------------------------
Redback Networks Inc. (Nasdaq:RBAK), a leading provider of
broadband networking systems, reported its second quarter 2004
results for the period ended June 30, 2004. Net revenue for the
second quarter of 2004 was $32.3 million, a 45 percent increase
from $22.2 million in revenue for the second quarter of 2003. Net
revenue was $30.2 million for the first quarter of 2004. The
company achieved positive cash flow from operations, ending its
second quarter of 2004 with $44.4 million of unrestricted cash.

"We are pleased to achieve several important strategic and
financial milestones this quarter as well as attaining significant
wins with our next-generation SmartEdge platform in some of the
world's largest broadband DSL networks for video and other
advanced applications," said Kevin DeNuccio, president and chief
executive officer, Redback Networks. "The second quarter of 2004
has been one of critical achievement and success."

                    About Redback Networks Inc.

Redback Networks Inc., a leading provider of broadband networking
systems, enables carriers and service providers to build third-
generation broadband networks that can profitably deliver
simplified, personalized, portable subscriber services to
consumers and businesses. The company's carrier-class, consumer-
scale SmartEdge(R) Router and Service Gateway platforms for
Consumer IP combine subscriber management systems and edge routing
in conjunction with the NetOp(TM) element and policy management
platform to provide a powerful, flexible infrastructure for
managing both subscribers and value-added services.

Founded in 1996 and headquartered in San Jose, Calif., with sales
and technical support centers located worldwide, Redback Networks
maintains a growing and global customer base of more than 500
carriers and service providers, including major local exchange
carriers (LECs), inter-exchange carriers (IXCs), PTTs and service
providers.

The company emerged from Chapter 11 bankruptcy on January 2, 2004.
Results for the period following our emergence from Chapter 11
reflect fresh-start accounting adjustments as required by
generally accepted accounting principles (GAAP).

                           *   *   *

In its Form 10-Q for the quarterly period ended March 31, 2004,
Redback Networks, Inc. reports:

                           Liquidity

"To date, the Company has funded its operations largely through
the issuance of debt and equity securities. However, the Company
has incurred substantial losses and negative cash flows from
operations since inception. For the period from January 3, 2004
through March 31, 2004, the Company incurred a loss from
operations of $16.1 million and negative cash flows from
operations of $7.7 million. Management expects operating losses
and negative cash flows to continue for at least the next 6 to 12
months. Management believes that its current cash and cash
equivalent balances of $42.0 million are sufficient to meet its
working capital requirements for at least the next 12 months.
However, failure to generate sufficient revenue, potentially
raising additional capital, or reduce discretionary spending could
have a material adverse effect on the Company's ability to achieve
its intended longer term business objectives. In addition, revenue
generated from the sale of its products and services may not
increase to a level that exceeds its operating expenses or could
fluctuate significantly as a result of changes in customer demand
or acceptance of future products. Accordingly, the Company may
continue to incur negative cash flow from operations."


RELIANCE GROUP: Pension Plan Terminated as of January 31, 2004
--------------------------------------------------------------
Reliance Group Holdings, Inc., and its debtor-affiliates sought
and obtained authority from the U.S. Bankruptcy Court for the
Southern District of New York to terminate the Reliance Group
Holdings, Inc., Pension Plan.

As previously reported in the Troubled Company Reporter, RGH
reached an agreement with the Pension Benefit Guaranty Corporation
to terminate the Pension Plan as of January 31, 2004.  Pursuant to
the Agreement, the PBGC will be appointed as trustee of the
Pension Plan.

Headquartered in New York, New York, Reliance Group Holdings, Inc.
-- http://www.rgh.com/-- is a holding company that owns 100% of  
Reliance Financial Services Corporation.  Reliance Financial, in
turn, owns 100% of Reliance Reliance Insurance Company.  The
Company filed for chapter 11 protection on June 12, 2001 (Bankr.
S.D.N.Y. Case No. 01-13403).  When the Company filed for
protection from their creditors,  they listed $12,598,054,000 in
assets and $12,877,472,000 in debts. (Reliance Bankruptcy News,
Issue No. 56; Bankruptcy Creditors' Service, Inc., 215/945-7000)


RIVIERA HOLDINGS: Reports Record EBITDA Results for 2nd Quarter
---------------------------------------------------------------
Riviera Holdings Corporation (Amex: RIV) reported financial
results for the second quarter ended June 30, 2004. Net revenues
for the quarter were $52.8 million, up $4.5 million (9.2%) from
the second quarter of 2003. Income from operations was $7.6
million, up $3.1 million (70.6%) from the second quarter of 2003.
EBITDA(1) was $10.9 million, up $2.3 million from the second
quarter of 2003 and a record for any quarter in the Company's
history. Net income for the quarter was $829,000 compared to a net
loss of $2.4 million in the second quarter of 2003.

Net revenues for the first half of 2004 were $103.3 million, up
$7.4 million or 7.8% from the first half of 2003. Income from
operations was $14.9 million, up $5.8 million (63.4%) from the
first half of 2003. EBITDA was $21.6 million, up $4.1 million from
the first half of 2003 and a record for any six-month period in
the Company's history. Net income for the first half was $1.4
million compared to a net loss of $4.6 million in the first half
of 2003.

                 Second Quarter 2004 Highlights

   *  Second quarter net income of $829,000 is a $3.3 million
      improvement from second quarter of 2003
   *  Riviera Black Hawk revenues were up 8.6%
   *  Riviera Black Hawk EBITDA was up $755,000 (21.5)
   *  Riviera Las Vegas revenues were up $3.4 million or 9.5%
   *  Riviera Las Vegas EBITDA was up $1.7 million (26.3%)
   *  Riviera Las Vegas occupancy was 95.3% compared with
      93.4% in the second quarter of 2003, ADR (Average Daily
      Rate) increased $2.19 to $62.63
   *  The Company has $20 million in cash plus its $30 million
      revolver available

                      Riviera Las Vegas

Robert Vannucci, President of Riviera Las Vegas, said, "We are
following the trend on the Las Vegas Strip with revenues
increasing $3.4 million or 9.5% in the second quarter compared to
the same period last year. EBITDA for the second quarter was up
$1.7 million as EBITDA margins (2) increased from 17.7% to 20.4%.
We were able to bring almost 50% of our revenue increase to the
EBITDA line.

"Casino revenues were up 8% over the second quarter of last year,
as the business mix of customers in the hotel rooms and attending
shows included more affinity groups (pool players and similar
groups) with a better gaming profile. We have invested $2.8
million in new slot machines this year and we have our new slot
monitoring system installed on approximately 80% of our machines
as of the end of the quarter. We anticipate that the system will
be connected to substantially all of our slot machines by the end
of July 2004 and the that we will have approximately 560 machines
(40%) converted to ticket-in, ticket-out technology by the end of
the year.

"Room occupancy was 95.3% up two percentage points from the same
period last year. Average daily room rate (ADR) was $62.63, up
$2.19, and revenue per available room (Rev Par) was $59.70 for the
quarter compared with $56.43, for the second quarter last year.
Convention rooms represented 34% of rooms sold for the quarter and
42% of the revenue, as the ADR was over $80 for this sector of our
business.

"Entertainment revenues increased 26.7% and we sold 50,000 more
tickets this quarter than the same quarter last year. This
additional traffic flow also enhanced casino revenues.

"Our location on the Las Vegas Strip will continue to see more
foot traffic as the Hilton Grand Vacations Club time shares, Wynn
Las Vegas and recently announced luxury condominium projects draw
more people to the north end. Riviera Las Vegas is located on 26
acres of prime real estate on the north end of the Las Vegas
Strip. Recent land transactions on the Las Vegas Strip are
indicators that the land in our financial statements has a fair
market value well in excess of its $21 million recorded book
value."

                     Riviera Black Hawk

Ron Johnson, President of Riviera Black Hawk, said, "The second
quarter was another record breaking quarter for Riviera Black
Hawk. We were able to achieve all time highs for gaming revenue,
total revenue, EBITDA and market share. Net revenues reached a
record $13.4 million during the quarter. EBITDA for the quarter
grew by 21.5% to a record $4.3 million. EBITDA margin on net
revenues increased to 31.9%.

"The second quarter benefited from the continued strength of our
marketing programs. We continue to invest our marketing dollars in
areas that profitably build slot revenues and market share. We
have also increased customer service by reducing the processing
time for transactions in several key areas. Going forward we
expect to see additional benefits as we take advantage of ticket-
in, ticket-out technology.

"We are also encouraged that gaming revenue in the Black
Hawk/Central City Market continued to grow in the second quarter.
Year-to-date the market has grown 3.7% over the first half of last
year. Improved economic conditions in the Denver Metro area appear
to be a driving force behind this growth. We are looking forward
to the new access road expected to be open before yearend. This
new road will provide additional access to the Black Hawk/Central
City Market, expanding the capabilities of the market to handle
additional weekend traffic."

                     Consolidated Operations

William L. Westerman, Chairman of the Board, said, "We are pleased
the trend of increasing earnings continued and actually
accelerated in the second quarter of 2004. Consolidated EBITDA
increased by 27.2% for the second quarter and 23.5% for the first
six months of 2004, respectively, as compared with 2003. The
second quarter EBITDA of $10.9 million and first six months EBITDA
of $21.6 million both set records for any quarter and semi- annual
periods. Our cash flow for 2004 has been greater than budget and
we are using the additional funds for investments in slot machines
to accelerate our conversion to cashless operations.

"The Missouri Gaming commission has indicated that it will need
more time to evaluate the competing proposals for additional
casino licenses in the St. Louis area and to render a decision on
whether to select one or more applications as a priority for
investigation. We believe that a more thorough evaluation of all
current proposals will further differentiate our project from the
other proposals. Studies have consistently shown that a casino
entertainment complex in Jefferson County would provide the most
incremental benefit to the State of Missouri and to the local host
community. We are encouraged by the overwhelming support we
continue to receive from Jefferson County residents and local
government officials."

                     About Riviera Holdings

Riviera Holdings Corporation owns and operates the Riviera Hotel
and Casino on the Las Vegas Strip and the Riviera Black Hawk
Casino in Black Hawk, Colorado. Riviera is traded on the American
Stock Exchange under the symbol RIV. Informal discussions with
AMEX staff indicate that the Company may meet the standards of
AMEX policy Sec. 1003(a).

At June 30, 2004, Riviera Holdings Corporation's balance sheet
showed a stockholders' deficit of $28,613,000 compared to a
deficit of $30,037,000 at December 31, 2003.


SAXON ASSET: Fitch Takes 3 Actions on Securities Trust Ratings
--------------------------------------------------------------
Fitch Ratings has taken rating actions on the following Saxon
Asset Securities Trust issues:

     Series 2000-1 group 1:

               --Class AF-5 affirmed at 'AAA';
               --Class AF-6 affirmed at 'AAA';
               --Class MF-1 affirmed at 'AA';
               --Class MF-2 affirmed at 'A';
               --Class BF-1 downgraded to 'BB' from 'BBB'.

     Series 2000-1 group 2:

               --Class MV-1 affirmed at 'AAA';
               --Class MV-2 affirmed at 'A';
               --Class BV-1 affirmed at 'BBB'.

     Series 2000-4 group 1:

               --Class AF-5 affirmed at 'AAA';
               --Class AF-6 affirmed at 'AAA';
               --Class MF-1 affirmed at 'AA';
               --Class MF-2 affirmed at 'A';
               --Class BF-1 downgraded to 'BB' from 'BBB' and
                 removed from Rating Watch Negative.

     Series 2000-4 group 2:

               --Class MV-1 affirmed at 'AA';
               --Class MV-2 affirmed at 'A';
               --Class BV-1 affirmed at 'BBB'.
          
     Series 2001-1 group 1:

               --Class AF-5 affirmed at 'AAA';
               --Class AF-6 affirmed at 'AAA';
               --Class MF-1 affirmed at 'AA';
               --Class MF-2 affirmed at 'A';
               --Class BF-1 downgraded to 'CCC' from 'B'.

     Series 2001-1 group 2:

               --Class MV-1 affirmed at 'AA';
               --Class MV-2 affirmed at 'A';
               --Class BV-1 affirmed at 'BBB'.

The affirmations on these classes reflect credit enhancement that
is consistent with future loss expectations.

The negative rating actions on class BF-1 of series 2000-1
group 1, class BF-1 of series 2000-4 group 1, and class BF-1 of
series 2001-1 group 1 are due to the level of losses incurred and
the high delinquencies in relation to the applicable credit
support levels as of the June 2004 distribution.


SIRIUS SATELLITE: Records $136.8 Million Net Loss in 2nd Quarter
----------------------------------------------------------------
SIRIUS (Nasdaq: SIRI), the premium satellite radio provider known
for delivering the very best in commercial-free music and premier
sports programming to cars and homes across the country, reported
second quarter 2004 financial and operating results.

As of June 30, 2004, SIRIUS had 480,341 subscribers. This reflects
record-setting net additions of 128,678 subscribers during the
quarter, which exceeds SIRIUS' previous record in the fourth
quarter of 2003, and represents a 37% increase in subscribers over
the first quarter of this year, as well as a 347% increase over
the net subscriber additions of 37,127 reported on June 30, 2003.
The company exceeded 500,000 subscribers on July 13, and expects
to have one million subscribers by the end of this year.

During the second quarter of 2004, SIRIUS continued to experience
significant gains in the retail channel, fueled by increased
product availability and growing consumer awareness. During the
quarter, SIRIUS added 81,185 subscribers from the retail channel,
315% more than were activated in the second quarter of 2003.
SIRIUS products, including in-dash receivers for vehicles and
boats, receivers for the home market, transportable "Plug-&-Play"
receivers for cars, trucks, RVs, boats and homes, as well as
portable boomboxes, are currently available nationwide.

"The second quarter was a strong one for SIRIUS, and is indicative
of the excitement that we continue to generate for our premium
programming," said Joseph P. Clayton, CEO of SIRIUS. "It's
becoming clearer everyday that consumers are responding favorably
to the quality, breadth and diversity of our content. With the
start of our NFL play-by-play game coverage this coming football
season, combined with the recent launch of Elvis Radio,
yesterday's premiere of Tony Hawk's Demolition Radio, the upcoming
launch of the Maxim Radio channel and our newly announced channel
to be developed with Eminem, we are confident that we will
continue to dazzle our listeners."

During the second quarter of 2004, SIRIUS added 47,652 subscribers
through its automotive, boating and trucking relationships, which
is more than double the figure reported in the first quarter.

         Second Quarter 2004 Versus Second Quarter 2003

For the second quarter of 2004, SIRIUS recognized total revenue of
$13.2 million, compared to $2.1 million for the second quarter of
2003. SIRIUS reported a loss from operations of $133.0 million for
the second quarter of 2004, compared to a loss from operations of
$109.8 million for the second quarter of 2003. Adjusted loss from
operations for the quarter was $97.3 million compared to adjusted
loss from operations of $86.5 million for the second quarter of
2003.

SIRIUS reported a net loss applicable to common stockholders of
$136.8 million for the second quarter of 2004, compared with a net
loss applicable to common stockholders of $111.8 million for the
second quarter of 2003.

For the second quarter of 2004, average monthly revenue per
subscriber, or ARPU, was $10.54. Excluding the effects of mail-in
rebate programs, ARPU for the second quarter of 2004 was $10.90.

SIRIUS maintains a strong cash position, ending the second quarter
with $640 million in cash, cash equivalents, and marketable
securities. Cash flow from operating activities for the quarter
was $(64.8) million compared to cash flow from operating
activities of $(64.6) million for the second quarter of 2003.

SIRIUS defines adjusted loss from operations as loss from
operations before depreciation expense, non-cash stock
compensation expense, and expense for equity securities granted to
third parties. Adjusted loss from operations is not a measure of
financial performance under accounting principles generally
accepted in the United States. SIRIUS believes adjusted loss from
operations is useful to investors because it represents operating
expenses of the company excluding the effects of non-cash items.
Because adjusted loss from operations is not a measurement
determined in accordance with accounting principles generally
accepted in the United States and is thus susceptible to varying
calculations, adjusted loss from operations as presented may not
be comparable to other similarly titled measures of other
companies and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
accounting principles generally accepted in the United States.

SIRIUS defines average monthly revenue per subscriber, or ARPU, as
the total earned subscription revenue and activation revenue
during the period, over the daily weighted average number of
subscribers for the period. ARPU is not a measure of financial
performance under accounting principles generally accepted in the
United States and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
accounting principles generally accepted in the United States.

SIRIUS defines subscriber acquisition costs, or SAC, as costs of
incentives for the purchase, installation, and activation of
SIRIUS radios, as well as subsidies paid to radio and chipset
manufacturers, automakers and retailers and the negative margin on
equipment sales. SAC is not a measure of financial performance
under accounting principles generally accepted in the United
States.

                          About SIRIUS

SIRIUS -- http://www.SIRIUS.com/-- is the only satellite radio  
service bringing listeners more than 100 streams of the best music
and entertainment coast-to-coast.  SIRIUS offers 61 music streams
with no commercials, along with over 40 world-class sports, news
and entertainment streams for a monthly subscription fee of only
$12.95, with greater savings for upfront payments of multiple
months or a year or more.  SIRIUS is also the official satellite
radio partner of the NFL.  Stream Jockeys create and deliver
uncompromised music in virtually every genre to our listeners 24
hours a day.  Satellite radio products bringing SIRIUS to
listeners in the car, truck, home, RV and boat are manufactured by
Kenwood, Panasonic, Clarion and Audiovox, and are available at
major retailers including RadioShack, Circuit City, Best Buy, Car
Toys, Good Guys, Tweeter, Ultimate Electronics, Sears and
Crutchfield.  SIRIUS is the leading OEM satellite radio provider,
with exclusive partnerships with DaimlerChrysler, Ford and BMW.
Automotive brands currently offering SIRIUS radios in select new
car models include BMW, MINI, Chrysler, Dodge, Jeep(R), Nissan,
Infiniti, Mazda, Audi, Ford and Lincoln-Mercury.  Automotive
brands that have announced plans to offer SIRIUS in select models
include Mercedes-Benz, Jaguar, Volvo, Volkswagen, Land Rover and
Aston Martin.  Genmar Holdings, the world's largest manufacturer
of recreational boats, Formula Boats and Winnebago, the leading
supplier of recreational vehicles and motor homes, also offer
SIRIUS.  Hertz currently offers SIRIUS in 29 vehicle models at 53
major locations around the country.

                         *   *   *

As previously reported, Standard & Poor's Ratings Services
assigned its 'CCC-' rating to Sirius Satellite Radio Inc.'s new
$250 million convertible notes due 2009.

At the same time, Standard & Poor's affirmed its existing ratings,
including its 'CCC' corporate credit rating, on the satellite
radio broadcaster. The outlook is stable. The New York, New York-
based firm has approximately about $450 million in debt.

"The company is expected to use the proceeds for general corporate
purposes, including expanding distribution and product
development," according to Standard & Poor's credit analyst Steve
Wilkinson. He noted, "The added liquidity is important to ratings
stability given the considerable cash being consumed as Sirius
works to accelerate subscriber growth."


SK GLOBAL AMERICA: Wants Court to Approve John Roberts Settlement
-----------------------------------------------------------------
SK Global America Inc. commenced an action against John Roberts,
Inc., in the Supreme Court of the State of New York, County of New
York, prior to filing for chapter 11 protection.  In the State
Court lawsuit, the Debtor asserted two separate causes of action
based on:

    (a) payments made by Roberts to Blue Apparel, which violated
        the Debtor's security interests in Roberts' accounts
        receivable -- the First Claim; and

    (b) Roberts' receipt of certain goods from Blue Apparel, which
        constituted a conversion of those goods from the Debtor --
        the Second Claim.

The Debtor sought to recover $615,040 in damages on the First
Claim and $484,109 on the Second Claim.

On June 12, 2003, the Supreme Court entered a summary judgment in
favor of the Debtor in connection with the First Claim.  The
ruling was subsequently affirmed on appeal.  Roberts sought to
reargue the appeal, while simultaneously appealing the Summary
Judgment to the New York Court of Appeals.

Subsequent to the Petition Date, the Debtor filed a motion
seeking summary judgment on the Second Claim.  That motion was
denied in January 2004.

In face of this contentious litigation, and as a result of
extensive, arm's-length, and good faith negotiations, as well as
an exchange of documentation, the parties decided to resolve
their issues consensually, without further litigation.  The
Debtor and Roberts agreed to settle the Action pursuant to a
settlement agreement.

The salient terms of the Settlement Agreement are:

    (a) Roberts will deliver to the Debtor's counsel, Bingham
        McCutchen, LLP, $950,000, by certified check, bank check,
        or wire transfer made payable to Bingham McCutchen to be
        held by it in escrow pending Court approval of these
        provisions.  The Debtor will cause Bingham McCutchen to
        provide written notice to Roberts' counsel via telecopier
        within three business days of Court approval.  Upon
        receipt of the Court Approval Notice, Bingham McCutchen
        will release the Settlement Amount to the Debtor;

    (b) Each Party will deliver to counsel for the other executed
        General Releases, which will be held in escrow pending
        Court approval; and

    (c) The Debtor will cause its counsel to execute and deliver
        to Roberts' counsel a Stipulation of Discontinuance with
        prejudice, which Roberts' counsel will hold in escrow
        pending receipt of the Court Approval Notice, after which
        time Roberts will cause its counsel to file the
        Stipulation.

Scott E. Ratner, Esq., at Togut, Segal & Segal, LLP, in New York,
contends that in the event the disputes are not resolved through
the proposed Settlement Agreement, continued litigation is likely
to result in additional, unnecessary expense for the Debtor.

Hence, the Debtor asks the Court to approve the Settlement
Agreement.

Mr. Ratner submits that the settlement and compromise between the
parties is appropriate and highly favorable to the Debtor, and
should be approved. (SK Global Bankruptcy News, Issue No. 20;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


SOLUTIA INC: Court Approves Key Employee Retention Program
----------------------------------------------------------
Judge Beatty of the U.S. Bankruptcy Court for the Southern
District of New York authorizes the Solutia, Inc. Debtors to
implement the 2004 Annual Incentive Program.  The Debtors are also
permitted to execute and perform under the separation agreements
with Johnnie M. Foster, Susan E. Bevington and Glenn Ruskin, and
to make required payments.

Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a  
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications. The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949).  When the Company filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts. (Solutia Bankruptcy News,
Issue No. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000)


STELCO INC: Plans to Close Rod Mill in September
------------------------------------------------
In recognition of a changing marketplace and in order to focus on
sustainable and profitable product lines, Stelco Inc. (TSX:STE)
announced that its Rod Mill will close in September of this
year.

There are 160 employees (140 hourly, 20 salaried) working at the
facility, a number of whom are eligible to, and may elect to,
retire.  Stelco management will be working closely with the union
and with the salaried employees on all workforce transition issues
related to the closure.

Courtney Pratt, Stelco's President and Chief Executive Officer,
said, "This action reflects a changing marketplace, declining
levels of rod production and our plan to focus a restructured
Stelco on sustainable and profitable product lines.

"We've said throughout our Court-supervised restructuring process
that Stelco operates in more product lines than the business can
support. This is an important step in the process of lowering our
overall cost structure, reducing the number of product lines and
focusing on our core business. As such, it moves us one step
closer to our goal of becoming a viable steel producer with the
ability to raise new capital, invest in plant and equipment, and
focus on key markets in which it has competitive advantages.

"The rod marketplace has become extremely competitive with the
entry of new, high tech and low cost mills. As a result of this
competition and our own ageing facility, our rod production has
declined significantly, a trend that is expected to continue. By
exiting this line of business now we can focus a restructured
Stelco on those products for which there is increasing demand and
in which we have a competitive advantage."

The Rod Mill was constructed in 1966 and occupies a stand-alone
facility near the Company's Hamilton works. It produces coiled
wire rod products of varying diameters. Shipments reached a peak
of more than 700,000 tons in 1980 but have declined since then.
More recently, shipments have fallen from 354,000 tons in 2000 to
an anticipated level of 160,000 tons in 2004 by the time the
closure takes place in September. The Mill produces an inadequate
return on capital invested and has been unprofitable in recent
years. Stelco will be able to reallocate the steel to products
that should increase its profitability in the short and long term.
    
Approximately 70% of the Rod Mill's production is shipped to two
of the Company's subsidiaries, Stelwire Ltd. and Stelfil Lte.
Today's announcement will provide them with greater flexibility in
the sourcing of raw materials. The search for alternate sources
has been initiated and Stelco does not anticipate any disruption
in supply to these subsidiaries.

The Rod Mill's equipment and the land on which the Mill is located
-- land that enjoys direct rail and harbour access -- will be
listed for sale.

Stelco Inc., which is currently undergoing CCAA restructuring
proceedings, is a large, diversified steel producer. Stelco is
involved in all major segments of the steel industry through its
integrated steel business, mini-mills, and manufactured products
businesses. Consolidated net sales in 2003 were $2.7 billion.


STILLWATER MINING: S&P Corp Credit Rating Taken Off Watch Negative
------------------------------------------------------------------
Standard & Poor's Ratings Services removed its 'BB-' corporate
credit rating and 'B' senior unsecured debt ratings on Columbus,
Mont.-based platinum and palladium producer Stillwater Mining Co.
from CreditWatch with negative implications, where they were
placed on July 16, 2004, following a strike at the company's
largest mine. The outlook is stable.

"However, the ratings on Stillwater's bank loans remain on
CreditWatch with negative implications due to uncertainty over the
final terms and conditions of the proposed credit facility," said
Standard & Poor's credit analyst Dominick D'Ascoli. As the
proposed facility has not yet been fully syndicated, Standard &
Poor's is concerned about language requiring that a portion of the
proceeds from the sale of palladium, received as part of payment
from MMC Norilsk Nickel for acquiring ownership of Stillwater,
could be removed or altered, thus affecting recovery prospects and
the assigned facility ratings.
    
The removal of the corporate credit rating and unsecured debt
ratings from CreditWatch follow the company's recent announcement
that striking workers voted to accept a new three-year contract
and are expected to return to work today. Although the strike shut
down nearly three-quarters of Stillwater's production of palladium
and platinum, its short duration should have only a minimal impact
on the company's financial profile.

The 'BB' bank loan rating, which is one notch above the corporate
credit rating, and the '1' recovery rating indicate the likelihood
of a full recovery of principal in the event of a default.
Stillwater intends to use the proposed credit facility to
refinance existing debt.

The ratings on Stillwater reflect its majority ownership by
Norilsk Nickel, limited mine diversity, volatile metal prices, and
a high cost profile tempered by favorable supply contracts.
Stillwater, with revenue of $240 million in 2003, produces
palladium and platinum from two mines in Montana.


TAYLOR CAPITAL: Fitch Withdraws BB- Preferred Stock Ratings
-----------------------------------------------------------
Fitch Ratings-Chicago-July 21, 2004: Fitch Ratings has withdrawn
the rating on Taylor Capital Group, Inc.'s preferred stock
following its redemption.

TAYC redeemed all of its outstanding preferred stock with the
proceeds of its issuance of $40 million of trust-preferred
securities from TAYC Capital Trust II. The Capital Trust II
securities were issued through a private placement and placed in a
trust preferred CDO rated by Fitch.

Rating Withdrawn:

           --Preferred 'BB-'.


TEEKAY SHIPPING: Reports $98.5 Million Net Income in 2nd Quarter
----------------------------------------------------------------
Teekay Shipping Corporation reported net income of $98.5 million
for the quarter ended June 30, 2004, compared to net income of
$96.9 million for the quarter ended June 30, 2003. The results for
the second quarter of 2004 included an unrealized foreign currency
translation loss of $5.2 million relating to long-term debt
denominated in Euros. The results for the second quarter of 2003
included $4.7 million in write-downs to the carrying value and
losses on the sale of certain older vessels. Net voyage
revenues(1) for the second quarter of 2004 were $368.9 million
compared to $353.1 million for the same period in 2003, and income
from vessel operations decreased to $122.1 million from $127.7
million.

The results for the second quarter of 2004 reflect the inclusion
of the results from Naviera F. Tapias S.A. (renamed Teekay
Shipping Spain S.A.) from May 1, 2004 and an increase in the
Company's existing fixed-rate business, partially offset by the
sale of certain older spot vessels over the past 12 months.

Spot tanker rates during the second quarter of 2004 remained
strong as Teekay's spot Aframax fleet averaged $27,567 per
calendar-ship day, a slight increase from the average of $27,327
per calendar-ship day for the same period in 2003. However, unlike
2003 when the strength of spot tanker rates in the second quarter
was amplified by the temporary disruption of oil supplies from
Venezuela, which resulted in an increase in longer-haul West
Africa and Middle East oil production, the strong market in 2004
has been primarily the result of fundamental oil demand growth.

Net income for the six months ended June 30, 2004 was $287.6
million compared to $150.5 million for the same period last year.
The results for the six months ended June 30, 2004 included a $5.2
million unrealized foreign currency translation loss relating to
the above-mentioned Euro denominated debt. The results for the six
months ended June 30, 2003 included $30.5 million in write-downs
to the carrying value of certain older vessels, and a $4.9 million
write-down in the carrying value of certain marketable securities.
Net voyage revenues (1) for the six months ended June 30, 2004
were $816.5 million, compared to $566.0 million in the same period
last year, while income from vessel operations increased to $330.7
million from $205.4 million.

         Expansion of Teekay's LNG Platform into Qatar

On July 1, 2004, the Company announced that it had been awarded
long-term contracts to charter three liquefied natural gas (LNG)
carriers to Ras Laffan Liquefied Natural Gas Co. Limited (RasGas
II), a joint venture company between Exxon Mobil Corporation and
Qatar Petroleum. The vessels will be chartered to RasGas II for a
period of 20 years (with options to extend up to 35 years),
commencing in late 2006 and early 2007. Concurrently, the Company
placed orders for three 151,700 m3 LNG carriers from Daewoo
Shipbuilding and Marine Engineering Co. Ltd. for approximately
$510 million. At this time, these are the largest LNG ships ever
ordered. Qatar Gas Transport Company is expected to acquire a 30%
interest in the vessels through a joint venture with Teekay.

(1) Net voyage revenues represents voyage revenues less voyage
expenses. Net voyage revenues is a non-GAAP financial measure used
by certain investors to measure the financial performance of
shipping companies. See the Company's website at
http://www.teekay.com/for a reconciliation of this non-GAAP  
measure as used in this release to the most directly comparable
GAAP financial measure.

                  Fixed-Rate Tanker Segment

For the quarter ended June 30, 2004, cash flow from vessel
operations from the Company's fixed-rate tanker segment increased
to $70.5 million from $56.2 million for the second quarter of
2003, primarily due to the addition of five conventional tankers
on charter to ConocoPhillips and the inclusion of Teekay Shipping
Spain's fixed-rate Suezmax tanker results from May 1, 2004.

                   Fixed-Rate LNG Segment

The acquisition of Tapias established Teekay's presence in LNG
shipping, the fastest growing sector of sea-borne energy
transportation. The LNG segment operating results for the second
quarter of 2004 consists of Teekay Shipping Spain's two existing
LNG carriers from May 1, 2004, which generated $5.5 million of
cash flow from vessel operations. In July 2004, the Company took
delivery of a third new building LNG carrier, which commenced
service under a 25-year charter contract and a fourth new building
LNG carrier is expected to deliver in the fourth quarter of 2004.
In addition, the three LNG carriers ordered for the RasGas II
project are expected to deliver in late 2006 and early 2007.

                    Spot Tanker Segment

Cash flow from vessel operations from the Company's spot tanker
segment for the quarter ended June 30, 2004 decreased to $106.5
million from $126.0 million in the second quarter of 2003,
primarily due to the sale of a number of older single-hull vessels
during the last 12 months, partially offset by new building
deliveries and additional in-chartered vessels. On a net basis,
these fleet changes reduced the total number of calendar ship days
for the spot tanker segment by 691 days in the second quarter of
2004 compared to the second quarter of 2003.

                     Tanker Market Overview

During the second quarter of 2004, tanker freight rates declined
from the near record levels reached in the prior quarter, yet
remained at relatively high levels when compared to historical
averages due to continued favourable tanker market fundamentals.

Global oil demand, an underlying driver of tanker demand,
continued to be strong averaging 80.4 million barrels per day
(mb/d) during the second quarter of 2004, a decline of 1.1 mb/d
from the previous quarter but 3.9 mb/d higher than the second
quarter of 2003. The year-on-year increase in global oil demand
during the second quarter of 2004 was attributable mainly to the
recovery of the global economy. On July 13, 2004, the
International Energy Agency (IEA) raised its forecast for 2004 oil
demand to 81.4 mb/d, which represents a 2.5 mb/d, or 3.2% increase
over 2003 demand, the highest growth rate in 25 years. For 2005,
the IEA forecasts a further increase in oil demand of 1.8 mb/d, or
2.2% over 2004, to 83.2 mb/d.

Global oil supply grew by 0.1 mb/d to 81.9 mb/d in the second
quarter of 2004 compared with the first quarter of 2004. OPEC
production rose by 0.2 mb/d due to increased output from Saudi
Arabia while non-OPEC production levels declined by 0.1 mb/d as a
result of a decrease in North American and European output. At its
June 3, 2004 meeting, OPEC raised its production quota by 2.0 mb/d
to 25.5 mb/d, effective on July 1, 2004 in a bid to meet strong
global oil demand. On July 15, 2004, OPEC announced that it would
raise its output quota by a further 0.5 mb/d, effective on
August 1, 2004.

The size of the world tanker fleet increased to 324.0 million
deadweight tonnes (mdwt) as of June 30, 2004, up 0.8% from the end
of the previous quarter. Deletions totaled 2.8 mdwt in the second
quarter of 2004 down from 4.1 mdwt in the previous quarter.
Deliveries of tanker new buildings during the second quarter of
2004 totaled 5.6 mdwt compared to the 8.5 mdwt in the previous
quarter.

As of June 30, 2004, the world tanker order book stood at 84.9
mdwt, representing 26.2% of the total world tanker fleet compared
to 81.6 mdwt or 25.4% at the end of the previous quarter.

                           Teekay Fleet

As at July 1, 2004, Teekay's fleet (excluding vessels managed for
third parties) consisted of 168 vessels, including 51 chartered-in
vessels and 20 new buildings on order. During the second quarter,
the Company took delivery of three new buildings: the EVEREST
SPIRIT (Aframax tanker) and the AXEL SPIRIT (Aframax tanker) which
will trade in the spot market; and the NORDIC RIO (Suezmax tanker)
which completed its conversion to a shuttle tanker and commenced
on long-term charter to Petrobras Transporte S.A.

During the second quarter, as part of its ongoing fleet renewal
program, the Company entered into agreements to sell four of its
single-hull vessels: the MUSASHI SPIRIT (1993-built VLCC), the
PACIFIC SPIRIT (1988-built Aframax tanker), the SHILLA SPIRIT
(1990-built Aframax tanker), and the ULSAN SPIRIT (1990-built
Aframax tanker) for total gross proceeds of approximately $102
million. These vessels are expected to deliver to the buyers
during the third quarter, at which time the Company expects to
record a gain of approximately $25 million on the sale of the
vessels. In addition, in July 2004 the Company took delivery of
two newbuildings: the ESTHER SPIRIT (Aframax tanker) which entered
the spot tanker fleet and the GALICIA SPIRIT (LNG carrier),
acquired as part of the Tapias transaction, which commenced
service under a 25-year fixed-rate charter contract to Union
Fenosa Gas S.A.

               Liquidity and Capital Expenditures

As at June 30, 2004, the Company had total liquidity of $540.8
million, comprising $215.7 million in cash and cash equivalents
and $321.1 million in undrawn medium-term revolving credit
facilities.

As at July 1, 2004, including the RasGas II LNG new buildings, the
Company had approximately $1,132 million in remaining capital
commitments relating to its 20 new buildings on order. Of this,
approximately $312 million was due during the second half of 2004,
$378 million in 2005, $250 million in 2006 and $192 million due in
2007 and early 2008. For the remaining capital commitments, long-
term financing arrangements totaling approximately $897 million
exist for 15 of the 20 new buildings on order.

            Sale of A/S Dampskibsselskabet TORM Shares

On July 16, 2004, the Company announced that it had sold its 16
percent stake in A/S Dampskibsselskabet TORM (TORM), acquired in
July 2003 for a total cost of $37.3 million, for total proceeds of
approximately $130.2 million. The Company has recognized a gain on
sale of $2.2 million in the second quarter of 2004 and will
recognize an additional gain of approximately $88 million in the
third quarter of 2004, representing a total return of over 250%
(including $5.7 million in dividends received in the second
quarter of 2004).

                           About Teekay

Teekay Shipping Corporation transports more than 10 percent of the
world's sea-borne oil and is also expanding its position in the
rapidly growing liquefied natural gas shipping sector. With a
fleet of over 160 tankers, offices in 14 countries and
approximately 5,500 seagoing and shore-based employees, the
Company provides a uniquely-wide range of marine services to the
world's leading oil and gas companies, helping them seamlessly
link their upstream energy production to their downstream
processing operations. Teekay's reputation for safety, quality and
innovation has earned it a position in the global energy industry
as the premier marine midstream company.

Teekay's common stock is listed on the New York Stock Exchange
where it trades under the symbol "TK".

                             *   *   *

As reported in the Troubled Company Reporter's May 20, 2004
edition, Standard & Poor's Ratings Services affirmed its ratings
on Teekay Shipping Corp., including the 'BB+' corporate credit
rating, and removed all ratings from CreditWatch, where they were
placed on March 18, 2004. The rating outlook is negative. At the
same time, Standard & Poor's assigned a 'BBB-' rating to Teekay's
$180 million senior secured bank loan, with a recovery rating of
'1', indicating a high expectation of full recovery of principal
in a default scenario.

"The negative outlook is based on Teekay's increasingly aggressive  
growth strategy, which, with the current high level of debt, could  
delay anticipated improvements in credit measures," said
Standard & Poor's credit analyst Kenneth L. Farer. Teekay
completed its $810 million acquisition of Naviera F. Tapias S.A.
on April 30, 2004. While the acquisition provides entrance to the
attractive liquefied natural gas (LNG) market, the company's total
debt burden and leverage have increased significantly. Pro forma
for the transaction, lease-adjusted debt is $3.6 billion, with
debt to capital of 65% at March 31, 2004.


TERRA INDUSTRIES: To Webcast Q2 Results & Conference on July 29
---------------------------------------------------------------
Terra Industries Inc. (NYSE: TRA) has scheduled the webcast of its
second quarter 2004 results conference call at 3:00 p.m. ET on
July 29, 2004. During the call, Terra President and CEO Michael
Bennett and Chief Financial Officer Frank Meyer will discuss Terra
Industries Inc.'s second quarter results.

Persons wishing to listen to the webcast may register at
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=105767&eve  
any time prior to the event. A recording of the webcast will be
archived on Terra's web site for three months. Interested persons
may listen to the archive by registering at the address above.

The minimum requirement for listening to the broadcast is Windows
Media Player software, -- downloadable free from
http://www.microsoft.com/windows/windowsmedia/EN/default.asp--  
and at least a 28.8 kbps connection to the Internet.

Terra Industries Inc., with 2003 revenues of $1.4 billion, is a
leading international producer of nitrogen products.

                           *   *   *

As reported in the Troubled Company Reporter's May 17, 2004
edition, Fitch Ratings has affirmed Terra Industries' ratings at
'B+' for the senior secured credit facility and 12.875% senior
secured notes and 'B-' for the 11.5% senior secured second
priority notes. The ratings have been removed from Rating Watch
Negative status. A Stable Rating Outlook has been assigned.

Terra's ratings were placed on Rating Watch Negative on Aug. 22,  
2003 to capture the uncertainty in near term future performance,  
the potential for covenant violations and the possibility of  
further liquidity deterioration at that time. Poor volumes sold  
and the spike in natural gas cost in the spring of 2003 weakened  
Terra's financial position and the company had to draw on its  
credit facility during the second and third quarter of 2003 to  
meet cash needs. Revolver availability fell below $60 million  
subsequent to the end of the second quarter of 2003.  

Since then, Terra's liquidity position and financial performance  
have improved. At March 31, 2004, Terra's credit facility was  
undrawn and the availability after accounting for the minimum  
availability covenant was $114 million. Terra also had a cash  
balance of $160 million at the end of the first quarter. Seasonal  
needs indicate $80 million will be used for prepaid product and  
approximately $24 million will be required for note interest in  
the near term. Maturities in the next twelve months are  
negligible. Moreover, credit statistics have strengthened due to  
improved EBIT margins while debt levels remained relatively steady  
at approximately $402 million. EBIT margins improved to 5.0% for  
the trailing twelve months ended March 31, 2004 versus negative  
2.7% in the prior year period. For the trailing twelve months  
ended March 31, 2004, EBITDA-to-interest incurred was 3.1 times  
(x) and total debt-to-EBITDA was 2.3x. These statistics compare  
favorably to the prior year period when EBITDA-to-interest was  
1.5x and total debt-to-EBITDA was 5.1x.


TESORO PETROLEUM: S&P Raises Corporate Credit Rating to BB+
-----------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on oil refiner and marketer Tesoro Petroleum Corp. to 'BB+'
from 'BB-'. Standard & Poor's also raised its senior secured debt
rating on the company to 'BBB-' from 'BB'. The outlook is stable.

Pro forma the company's recent repayment of its $300 million 9%
note issue due 2008, San Antonio, Texas-based Tesoro had about
$1.3 billion of debt outstanding as of March 31, 2004.

"The upgrade reflects the marked improvement in Tesoro's financial
profile since 2002 when the company completed the second of two
heavily debt-financed acquisitions," said Standard & Poor's credit
analyst John Thieroff.

"Management has displayed an almost single-minded focus in its
effort to reduce debt through asset sales, capital discretion,
cost reductions, and, more recently, abundant cash flow,"
continued Mr. Thieroff.

Standard & Poor's also said that although near-term cash flow
could continue to be exceedingly strong, it is the company's
ability to generate borderline investment-grade financial measures
at historical average refining margins and its significantly
improved liquidity cushion to weather extended trough conditions
that buttress the rating upgrade.

The high speculative-grade ratings on Tesoro reflect its position
as a leveraged, independent oil refiner and marketer operating in
a very competitive, erratically profitable industry burdened by
high fixed costs.

These weaknesses are partly offset by strong asset quality,
advantaged operating locations, and a limited degree of retail-
derived margin stability.

Tesoro owns and operates six refineries of varying complexity,
with total throughput capacity of 558,000 barrels per day. Tesoro
also has a network of 557 retail gasoline stations and convenience
stores in the western U.S.


TRW AUTOMOTIVE: Meets Gov't Regulations on Occupant Vision System
-----------------------------------------------------------------
The occupant sensing vision system developed by TRW Vehicle Safety
Systems Inc., TRW Automotive Holdings Corp.'s (NYSE: TRW), now
meets the National Highway Traffic Safety Administration's (NHTSA)
FMVSS 208 static test requirements for out-of-position occupant
sensing, and is the first system of its type to have been
recognized by TRW customers for this achievement.

TRW's occupant sensing vision system can also perform dynamic out-
of-position detection by identifying and tracking the position of
an occupant's head in the vehicle; airbag deployment will be
suppressed if the vision occupant sensor determines that the
occupant is in the "keep out" zone with respect to the airbag.

The system uses a stereo camera to monitor the vehicle passenger
compartment from its mounting location in the overhead console.
The camera circumference is roughly the size of a dime and is
about 2 inches long. The TRW system is now a production-intent,
embedded design utilizing a cost- effective, automotive-grade
Digital Signal Processing (DSP) microprocessor. TRW Automotive has
development contracts in North America and Asia for its occupant
sensing vision system.

"These are significant steps in our efforts to have production-
ready vision systems for occupant sensing by the 2007 model year,"
said Doug P. Campbell, vice president, Engineering for TRW's
Occupant Safety Systems business. "While TRW and other suppliers
are currently supplying weight-based systems that indirectly infer
occupant presence and size, the vision-based system can sense
occupants in real-time and can accurately sense out-of- position
situations, such as a passenger head or other part of the body, in
close proximity to an airbag. It can also accurately recognize the
size of the passenger or the presence of an infant seat -- all key
parts of NHTSA's regulations."

                      About TRW Automotive

With 2003 sales of $11.3 billion, TRW Automotive ranks among the  
world's top 10 automotive suppliers. Headquartered in Livonia,  
Michigan, USA, the Company, through its subsidiaries, employs  
approximately 61,000 people in 22 countries. TRW Automotive  
products include integrated vehicle control and driver assist  
systems, braking systems, steering systems, suspension systems,  
occupant safety systems, electronics, engine components, fastening  
systems and aftermarket replacement parts and services. TRW  
Automotive news is available on the internet at  
http://www.trwauto.com/    

                           *   *   *

As reported in the Troubled Company Reporter's February 12, 2004  
edition, following the completion of TRW Automotive's initial  
public equity offering, Fitch Ratings has affirmed the earlier  
indicative debt ratings of TRW Automotive Inc. The ratings of  
'BB+' for senior  secured bank debt, 'BB-' for senior notes, and  
'B+' for senior subordinated notes are all affirmed. The Rating  
Outlook is Stable.  

TRW's ratings are reflective of the de-leveraging of the capital  
structure since the initial deal funding, the projected lower  
interest costs resulting from these lower debt levels and some  
refinancing activities, and relatively stable operating  
performance as a standalone company. Additionally, TRW's ratings  
are supported by its diversity of revenue which spans across all  
the major global vehicle manufacturers, good competitive positions  
in active and passive restraint systems which should continue to  
benefit from both regulatory and market dynamics, and a solid book  
of forward business which reflect these operating positives.  

Balancing out some of these positives are the risks associated  
with the continued severe pricing pressures and production  
volatility in the automotive environment which will challenge TRW  
to expand, if not maintain, margin performance. And, while TRW has  
been increasing its business with the ascendant Asian vehicle  
manufacturers, TRW still remains heavily levered to the  
traditional North American Big Three which have collectively been  
losing market share. Furthermore, TRW still remains highly levered  
in its capitalization and will have limited free cash flow for  
continuing principal reduction.


U STREET DEVELOPMENT: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: U Street Development, LLC
        901 U Street, North West
        Washington, District of Columbia 20003

Bankruptcy Case No.: 04-01147

Chapter 11 Petition Date: July 21, 2004

Court: District of Columbia (Washington)

Judge: S. Martin Teel, Jr.

Debtor's Counsel: Jeffrey M. Sherman, Esq.
                  Hall Estill
                  Suite 700 North
                  1120 20th Street N.W.
                  Washington, DC 20036
                  Tel: 202-973-1200

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $500,000 to $1 Million

The Debtor did not file a list of its 20-largest creditors.


UNIFLEX: Retains Budd & Demaria as Labor & Employment Counsel
-------------------------------------------------------------
Uniflex, Inc., asks the U.S. Bankruptcy Court for the District of
Delaware to approve its application to employ Budd & Demaria, LLP
as its special labor and employment counsel.

The Debtor reports that Budd & Demaria served as its labor and
employment counsel before the Petition Date.  The Debtor says
Budd & Demaria brings a wealth of experience and knowledge in
labor and employment matters.  Additionally, the Firm has
extensive familiarity with the Debtor's labor and employment
issues.

Uniflex tells the Court that negotiations with union employees
under a Collective Bargaining Agreement are likely to be complex
and will require counsel expert on these matters.  

Budd & Demaria intends to:

  (a) advise and counsel the Debtor in connection with all
      issues that arise with its non-union and union employees
      and all aspects that arise under the CBA;

  (b) advise and counsel the Debtor with respect to its general
      labor and employment matters arising in or outside of
      bankruptcy; and

  (c) perform the full range of services normally associated
      with the matters set forth above as the Debtor's special
      labor and employment counsel and which Budd & Demaria is
      in a position to provide.

Thomas W. Budd, Esq., will lead team in this engagement. The
normal hourly rates charged by Budd & Demaria are:

            Designation               Billing Rate
            -----------               ------------
            Partners                  $300 - $350 per hour
            Staff                     $180 - $290 per hour
            Administrative Staff      $135 - $165 per hour

Headquartered in Hicksville, New York, Uniflex, Inc. --
http://www.uniflexbags.com/-- makes custom-printed plastic bags  
and other plastic packaging for promotions and advertising. The
Company filed for Chapter 11 protection on June 24, 2004 (Bank.
Del. Case No. 04-11852).  Peter C. Hughes, Esq., at Dilworth
Paxson 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.


UNITED AIRLINES: Wants Disallowance of Various Mega Claims
----------------------------------------------------------
As a bookkeeping matter, the United Airlines Inc. Debtors want to
eliminate Duplicate Claims from their claims register.  The  
Debtors ask the U.S. Bankruptcy Court for the Northern District of
Illinois to disallow and expunge four Duplicate  Claims.  The
Surviving Claims will not be affected.  The Duplicate Claims are:

                           Duplicate  Surviving
   Claimant                 Claim       Claim      Claim Amount
   --------                --------   ---------    ------------
   County of Jefferson      42392       43005              $727
   Van R. Millsap           42029       42015       Unspecified
   St. Mobile Aerospace     39965       39964         4,769,975
   Daniel Ward              41974       41973       Unspecified

                        Superseded Claims

James H.M. Sprayregen, Esq., at Kirkland & Ellis, reports that 23  
claims have been superseded by later-filed claims.  As a result,  
the Superseded Claims, which aggregate $396,541,477, should be
expunged.  Surviving Claims will replace the claims expunged.  
The Superseded Claims include:

                          Superseded  Surviving
   Claimant                 Claim       Claim      Claim Amount
   --------               ----------  ---------    ------------
   Airbus North America     36806       43387       $66,464,304
   General Services Admin   42840       43340         1,912,125
   IBM Credit Corp            263       43317         4,702,000
   U.S. Bank                35513       43320        22,864,482
                            35512       43322        23,707,686
                            35511       43323        23,705,764
                            35509       43319        23,705,764
                            35489       43334        25,248,504
   Wells Fargo              31840       43228        68,379,629
                            36747       43291       111,121,173

               No Supporting Documentation Claims  

The Debtors report that two creditors filed claims aggregating  
$600,000,210 without the requisite documentation, failing to
comply with Rule 3001(c) of the Federal Rules of Bankruptcy
Procedure.  The Debtors ask the Court to disallow the No
Supporting Documentation Claims:

   Claimant                          Claim No.     Claim Amount
   --------                          ---------     ------------
   Karen Bogusz                        43351       $600,000,000
   Wok & Roll of MSP                   37060                210

                          Reduce Claims

The Debtors object to 10 claims pursuant to Section 502(b)(1) of
the Bankruptcy Code because the Claims are filed for amounts that
differ from that reflected on the Debtors' Books and Records.  
After a thorough investigation, the Debtors tell the Court that
each Claim is overstated:

                                        Original        Reduced
   Claimant                Claim No.    Amount          Amount
   --------               ----------    --------        -------
   City of Denver           24123    $19,678,236    $19,214,549
   Grapevine-Celleyville      290         32,512         30,463
   Lancaster County         27942          4,717          4,421
   State of Louisiana         476        151,005        141,500
   State of Nebraska         7199        133,959        125,517
   Sedgwick County            582         13,366         12,524
   Shook, Hardy & Bacon     37957         13,423          9,470
   County of Tarrant          295         10,340          9,689
   County of Teton           2599         18,534         17,366
   County of Travis           206         10,510          9,922

                       No Liability Claims

The Debtors determined that their Books and Records do not  
support 43 No Liability Claims, aggregating $2,620,012.   
Moreover, the creditors failed to supply documentation to support  
the asserted liability.  Accordingly, the Debtors ask the Court  
to disallow the No Liability Claims as not enforceable.  The 10  
largest No Liability Claims are:

   Claimant                          Claim No.     Claim Amount
   --------                          ---------     ------------
   Ahmed Est of Nazir                  41605           $100,000
   County of Arapahoe                   5049            102,493
   Bosfuel Corp                        40243            420,910
   James Caliendo                       1103             10,000
   Department of the Treasury            447            566,594
   GeoAccess                           32542             71,737
   Meta Group                           1413            148,944
   Olympic Properties                  36782            795,762
   A.P. Sharma                         38895             26,727
   USA.Net                              1500            125,116

                       Wrong Debtor Claims

Approximately 1,013 claims aggregating $204,666,466 were asserted
against the wrong debtor.  The Debtors ask Judge Wedoff to
reclassify the Claims to the correct Debtor.  The Wrong Debtor
Claims include:

   Claimant                          Claim No.     Claim Amount
   --------                          ---------     ------------
   Argenbright Security                39939         $7,898,311
   Tom Cherhoniak                       9292         13,100,000
   Cook County                         43204          7,865,067
   Barbara & Evan Williams             40570         20,000,000
   Gate Gourmet                        38913         19,139,081
   JPMorgan Chase Bank                 38074         11,500,000
   City Los Angeles                    36753         16,198,374
   Miami-Dade County Aviation Dept     38501          8,516,020
   Audrey Moses                          376         10,000,000
   SBC Operating Companies             43370          2,533,456

                        Non-Debtor Claims

The Debtors ask the Court to disallow two claims that were filed  
against parties that are not debtors in their Chapter 11 cases:

   Claimant                          Claim No.     Claim Amount
   --------                          ---------     ------------
   Hymatic Engineering                  5317             $3,518
   Queens Transportation & Car Rental  41172             28,251

                         Redundant Claims

The Debtors discovered four Redundant Claims, which arise when
two or more parties file claims asserting the same liability.  
Because the claims filed by another claimant will survive,
Redundant Claims, totaling $126,294, should be disallowed and
expunged.  The Redundant Claims are:

   Claimant                          Claim No.     Claim Amount
   --------                          ---------     ------------
   County of Adams                     42979           $12,794
   County of Arapahoe                   5049           102,493
   County of Eagle                      2526             3,599
   County of Gunnison                  36654             7,408

                    Redundant Aircraft Claims

The Debtors object to two Redundant Aircraft Claims filed by
Wilmington Trust Company:

                   Claim No.      Claim Amount
                   ---------      ------------
                     34125         $24,527,818
                     34124          25,731,976

                       Reclassify Claims

The Debtors ask the Court to reclassify 27 claims that are not
entitled to priority or secured status.  The Reclassify Claims,
which total $19,282,855, fail to provide a sufficient legal basis
or other documentary support for the assertion of security or
priority.  The Claims should be reclassified as unsecured non-
priority claims.  The Claims include:

   Claimant                          Claim No.     Claim Amount
   --------                          ---------     ------------
   A-1 Auto Electric                    7164             $2,579
   Airtrans Chauffeured Transportation  5455             14,030
   America Networking                    494             11,929
   Floyd Bost                            968          2,000,000
   K. Brown                             8356             50,000
   Chi Li Lin                          42076              8,616
   Carlos Plazos                       39929         13,600,000
   United Building Maintenance          5191            125,784
   Jane Wolski                         11146             40,000
   Audrey Wright                        5260          2,000,000

                          Goldman Claim

David Goldman filed Claim No. 7157 for $644,000,000 to enforce
the Debtors' obligation to provide frequent flier miles under the
Mileage Plus Program.  The Debtors assert that the rules of the
Program do not constitute property of the participants.  The
Debtors may withdraw the Program benefits or terminate the
Program at any time.  The Debtors obtained Court authority to
honor the Program, but this does not alter the conclusion that
claims arising from the Program cannot exist.  Thus, the Debtors
ask Judge Wedoff to disallow the Goldman Claim.

Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the  
holding company for United Airlines -- the world's second largest
air carrier.  the Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at KIRKLAND & ELLIS represent the
Debtors in their restructuring efforts.  When the Company filed
for protection from their creditors, they listed $24,190,000,000
in assets and  $22,787,000,000 in debts. (United Airlines
Bankruptcy News, Issue No. 53; Bankruptcy Creditors' Service,
Inc., 215/945-7000)   


USG CORPORATION: Wants to Assume Libertyville Property Lease
------------------------------------------------------------
On December 22, 1993, Debtors USG Corporation, United States
Gypsum Company, USG Interiors, Inc., and L&W Supply Corporation
entered into an agreement with LaSalle National Trust, N.A. -- as
trustee under a Trust Agreement dated December 22, 1993 -- for a
certain non-residential real property lease, which comprises a
research and development facility located in Libertyville,
Illinois.  The parties entered into these modifications to the
Libertyville Lease:

  (a) Amendment to Lease Agreement dated June 8, 1995;

  (b) Second Amendment to Lease Agreement dated August 6, 1998;
      and

  (c) Third Amendment to Lease Agreement dated January 29, 1999.

Paul N. Heath, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, relates that the term of the Lease is
through August 31, 2013.  The Debtors have the option to extend
the Lease for three successive periods of five years each, on 15
months notice to LaSalle, which notice must be provided no less
than 20 months prior to the expiration of the Lease's term.

Pursuant to the terms of the Lease, the base rent is $174,687 per
month.  If the Debtors exercise their option to extend the term
of the Lease, the base rent is:

    (a) $120,000 per month for the first extension period;

    (b) $100,000 per month for the second extension period; and

    (c) equal to the fair market rent for the Leased Premises at
        the time of the extension for the third extension period.

Mr. Heath explains that the Debtors are responsible for paying
the cost of any services and utilities furnished to the Leased
Premises and costs relating to its maintenance, taxes and
insurance.  Moreover, the Debtors are responsible for satisfying
any environmental liabilities related to the Leased Premises.
The payment of all amounts due under the Lease is guaranteed by
non-debtor USG Foreign Investments, Limited, which is a wholly
owned subsidiary of USG Corporation.

Pursuant to the Lease, if LaSalle elects to sell the Leased
Premises during, or at the end of, the Lease term, LaSalle must
first offer to sell the Leased Premises to the Debtors.
Furthermore, if it receives an unsolicited offer to purchase the
Leased Premises, LaSalle must provide the Debtors with an
opportunity to purchase the Leased Premises on the same terms of
the offer.  The Debtors have the option to purchase the Leased
Premises, pursuant to the terms of the Lease.

Mr. Heath contends that LaSalle financed the purchase of the
Leased Premises with a $16,200,000 mortgage loan made with
certain funds managed by Fidelity Management & Research Co., and,
at the time of the First Amendment, refinanced the loan with a
new loan amounting to $16,800,000 from Citicorp USA, Inc.  At the
time of the Second Amendment, LaSalle again refinanced the loan
for $15,300,000 from Citicorp.  It is the Debtors' understanding
that Citicorp may require LaSalle to post collateral on the loan
if the Lease is not assumed by the Debtors.  To avoid the need to
provide Citicorp with collateral, LaSalle has asked the Debtors
to assume the Lease, and the Debtors are willing to do so.

Accordingly, the Debtors ask permission from the U.S. Bankruptcy
Court for the District of Delaware to assume the Lease.

Mr. Heath relates that the Debtors conduct strategically
important research and are in the process of locating certain of
their main back-up computer systems at the Leased Premises.  The
Debtors believe that it would be extremely disruptive to their
ongoing research activities to relocate to another place.
Moreover, the Debtors maintain that the occupancy cost of the
Lease is at or below fair market value.  The occupancy cost is
even lower during the first and second extension periods if the
Debtors exercise their options to extend.  Assuming the Lease
ensures that the Debtors retain these valuable options.

In addition, given the significant benefits the Lease provides to
their estates, the Debtors have agreed to assume the Lease at
this time, instead of seeking a further extension of the time to
assume the Lease under Section 365(d)(4) of the Bankruptcy Code.

To assume the Lease, Section 365(b)(1)(A) of the Bankruptcy
Code requires that the Debtors cure, or provide adequate
assurance that they will promptly cure, any outstanding defaults
under the Lease.  The Debtors do not believe that there is any
prepetition arrearage owed on account of the Lease.  Furthermore,
the Debtors have reviewed their books and believe that all
postpetition amounts under the Lease have been paid.

Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading  
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.  The Company filed
for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No.
01-02094).  David G. Heiman, Esq., and Paul E. Harner, Esq., at
Jones, Day, Reavis & Pogue represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed $3,252,000,000 in assets and
$2,739,000,000 in debts. (USG Bankruptcy News, Issue No. 69;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


VIASYSTEMS INC: S&P Affirms Corporate Credit Rating at B
--------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit and other ratings for St. Louis, Missouri-based Viasystems
Inc., and revised its outlook on the company to stable from
positive.

"The outlook revision reflects the withdrawal of the company's
filing for an IPO of its common stock of up to $275 million,
removing our previous expectation that credit protection measures
would improve because of debt repayment with the planned IPO
proceeds," said Standard & Poor's credit analyst Emile Courtney.
Total debt was approximately $470 million as of March 2004.

The ratings reflect Viasystems Inc.'s highly fragmented and
competitive printed circuit board manufacturing market, volatile
sales levels and profitability through the business cycle, and
high debt leverage. These partly are offset by the company's low-
cost manufacturing locations and its leading original equipment
manufacturer customer base. Viasystems manufactures PCBs for
electronics OEMs and wire harnesses for consumer appliance makers.

Following Viasystems' voluntary reorganization, completed in
January 2003, the company extinguished about $740 million in debt.
Viasystems has closed and consolidated more than 50% of its
manufacturing facilities since 2001, locating its remaining
manufacturing sites primarily in China and Mexico, both low-cost
areas.


VITAL BASICS: Panel Gets Nod to Hire Drummond Woodsum as Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maine gave its stamp
of approval to a request by the Official Unsecured Creditors
Committee appointed in Vital Basics, Inc.'s Chapter 11 cases to
retain Drummond Woodsum & MacMahon as its legal counsel.

Benjamin Marcus, Esq., will be principally involved in this
engagement.  Mr. Marcus will:

   a) attend at Section 341 meetings and all scheduled hearings
      in these matters;

   b) prepare appropriate pleadings on behalf of the Committee;

   c) provide the Committee with legal advice in relation to all
      matters in these cases; and

   d) assist the Committee in negotiations with the Debtor
      regarding a plan of reorganization.

Drummond Woodsum will bill the Debtors' estates for services
rendered to the Committee at its current hourly rates, ranging
from $75 to $320 per hour.  Mr. Marcus' customary billing rate is
$250 per hour.

Headquartered in Portland, Maine, Vital Basics, Inc.
-- http://www.vitalbasics.com/-- is engaged in the business of  
Sales, through direct consumer marketing and at retail, of
nutraceutical and related products throughout the United States
and Canada. The Company filed for chapter 11 protection along with
its debtor-affiliate, Vital Basics Media, Inc., on
May 10, 2004 (Bankr. D. Maine Case No. 04-20734).  George J.
Marcus, Esq., at Marcus, Clegg & Mistretta, P.A., represents the
Debtor in its restructuring efforts.  When the Debtors filed for
protection from their creditors, Vital Basics, Inc., listed
$6,291,356 in total assets and $16,314,589 in total debts; Vital
Basics Media, Inc., listed total assts of $378,308 and total debts
of $179,242.


W.R. GRACE: Asks Court to Extend Removal Period to December 31
--------------------------------------------------------------
W.R. Grace & Co. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware to extend, to and including
December 31, 2004, the period in which they can elect to remove a
prepetition lawsuit to the U.S. District for the District of
Delaware for continued litigation and resolution.

David W. Carickhoff, Esq., at Pachulski Stang Ziehl Young &
Jones, in Wilmington, Delaware, tells Judge Fitzgerald that the
Debtors are named defendants in 65,000 asbestos-related lawsuits
in various state and federal courts involving 232,000 different
individual claims.  The Debtors are also defendants in eight
asbestos-related fraudulent conveyance actions in various state
and federal courts that involve large numbers of individual
claims.  There are numerous other lawsuits, including, but not
limited to environmental actions, in which one or more of the
Debtors and their non-debtor affiliates are named defendants in
various state and federal courts.  Many of these Asbestos
Actions, Fraudulent Conveyance Actions and Miscellaneous Actions
were filed before the Petition Date.

Since the Petition Date, a number of additional Asbestos Actions,
Fraudulent Conveyance Actions and Miscellaneous Actions have been
filed and continue to be filed.  The Debtors and their non-debtor
affiliates believe that the Postpetition Actions are void because
they were filed in violation of the automatic stay.

Mr. Carickhoff tells the Court that the Debtors have not had the
time to address the pending actions because they were busy
determining the true scope of their liability to asbestos
claimants.

Mr. Carickhoff further relates that the outcome of the decision
regarding Judge Wolin's participation in their cases, and the
appointment of Judge Buckwalter in lieu of Judge Wolin, has had
an effect on the Debtors' ability to remove the prepetition
lawsuits.  The Debtors have worked diligently in conjunction with
a number of constituencies in their Chapter 11 cases to advance
their Chapter 11 cases.  Substantial progress has been made in
establishing a framework within which to resolve the Actions and
various other claims against the Debtors.  There have been a
number of developments that have impeded the Debtors' progress
toward establishing the framework to deal with asbestos-related
Personal Injury Claims against the Debtors.

A litigation protocol will streamline the claims adjudication
process by providing a means of resolving the common legal issues
through a fair and orderly process in a single forum while
preserving legitimate personal injury claimants' rights to trial.
While this litigation protocol will not completely eliminate the
Debtors' need to preserve the option to remove actions to the
Bankruptcy Court, it should minimize the need to do so.
Nonetheless, until the claims arising from the Actions have been
resolved, whether through the litigation protocol or otherwise,
the Debtors must preserve the option of removing Actions to the
Bankruptcy Court.

The extension of the removal period will give the Debtors and
their non-debtor affiliates an opportunity to make fully informed
decisions and will ensure that they do not forfeit valuable
rights of removal.  Mr. Carickhoff assures the Court that the
rights of the Debtors' adversaries will not be prejudiced by the
extension because, in the event that a matter is removed, the
other parties to those Actions to be removed may seek to have the
Action remanded to the state court pursuant to Section 1452(b) of
the Judiciary Procedures Code.

Judge Fitzgerald will convene a hearing on August 23, 2004, to
consider the Debtors' request.  By application of Del.Bankr.LR
9006-2, the Debtors' removal deadline is automatically extended
through the conclusion of that hearing. (W.R. Grace Bankruptcy
News, Issue No. 66; Bankruptcy Creditors' Service, Inc., 215/945-
7000)


W.R. GRACE: Reports $21.3 Million Net Income in Second Quarter
--------------------------------------------------------------
W. R. Grace & Co. (NYSE:GRA) reported that 2004 second quarter
sales totaled $572.4 million compared with $503.4 million in the
prior year quarter, an increase of 13.7%. Revenue from higher
volumes and improved product mix accounted for most of the
increase, with the remainder primarily attributable to favorable
currency translation and acquisitions. Grace reported second
quarter net income of $21.3 million compared with $6.5 million in
the second quarter of 2003. Pre-tax income from core operations in
the second quarter of 2004 was $49.3 million compared with $33.6
million in the second quarter of 2003, a 46.7% increase,
reflecting higher sales and cost structure improvements from
productivity initiatives. "This is the fourth consecutive quarter
with strong performance from our businesses," said Grace's
Chairman and Chief Executive Officer Paul J. Norris. "Each
business segment contributed sales and profit increases,
capitalizing on stronger economic activity worldwide and
delivering on our strategic growth and productivity initiatives."

For the first six months of 2004, Grace reported sales of $1,090.9
million, a 15.0% increase over 2003. Favorable currency
translation accounted for about one-third of the increase. Net
income through June 2004 was $37.1 million or $0.56 per share,
compared with net income of $4.2 million, or $0.06 per share,
through June 2003. The year-to-date improvement in net income is
primarily attributable to higher pre-tax income from core
operations, which was $87.8 million in 2004 compared with $47.1
million in 2003 (with operating margins at 8.0% compared with 5.0%
last year). The increase in operating profit and margins was
principally attributable to strong sales growth, cost structure
improvements from productivity initiatives and favorable foreign
currency translation.

                           Core Operations

                          Davison Chemicals
   
            Refining Technologies and Specialty Materials

Second quarter sales for the Davison Chemicals segment were $297.8
million, up 13.8% from the prior year quarter, reflecting improved
economic conditions. Excluding the effects of favorable currency
translation, sales were up 10.8% for the quarter. During the
second quarter, Grace realigned its Davison product groups into
"refining technologies" (which includes catalysts and other
products and services used by petroleum refiners) and "specialty
materials" (which includes silica and separations products,
polyolefin and other chemical catalysts, and other products used
in a broad range of industrial and consumer applications). All
sales information for the Davison Chemicals segment has been
restated to reflect this realignment. Sales of refining
technologies products in the second quarter were $168.5 million,
up 10.9% compared with the prior year quarter (9.0% after
accounting for favorable currency translation). Most of the
increase resulted from favorable product mix factors, including
sales of higher performing catalysts, and added revenue from the
pass-through of certain raw material costs. Sales of specialty
materials products were $129.3 million, up 17.9% compared with the
second quarter of 2003, with currency effects primarily from the
stronger Euro contributing about 4.6 percentage points of the
increase. Strong volume in all key regions from catalyst products
and silica materials was the primary reason for the sales
increase. Improvement was also attributable to growth programs for
silica products used in separations and coatings applications.

Operating income of the Davison Chemicals segment for the second
quarter was $37.5 million, 37.4% higher than the 2003 second
quarter. Operating margin was 12.6%, higher than the prior year
quarter by 2.2 percentage points. The increase in operating income
was driven primarily by improved sales in North America and in
Europe, as well as foreign currency translation effects. Second
quarter operating margin was enhanced by favorable product mix and
lower manufacturing costs.

Year-to-date sales for the Davison Chemicals segment were $568.7
million, up 13.6% from 2003 (excluding currency translation
impacts, sales were up 8.9%). Year-to-date operating income was
$69.5 million, compared with $47.6 million for the prior year, a
46.0% increase. Year-to-date operating results reflect similar
economic conditions and cost factors to those experienced in the
second quarter.

                       Performance Chemicals

               Construction Chemicals, Building Materials,
                     and Sealants and Coatings

Second quarter sales for Performance Chemicals were $274.6
million, a record second quarter for this business segment and up
13.6% from the prior year quarter. Favorable currency translation
accounted for 3.6 percentage points of the increase. Sales of
specialty construction chemicals, which include concrete
admixtures, cement additives and masonry products, were $138.0
million, up 21.1% versus the year-ago quarter (17.2% excluding
favorable currency translation impacts). Revenues from an October
1, 2003 acquisition in Germany accounted for about one-third of
the increase. Sales were up in all geographic regions, mainly
reflecting the continued success of growth initiatives. Sales of
specialty building materials, which include waterproofing and fire
protection products, were $66.1 million, up 10.9% compared with
the second quarter of 2003 (up 8.2% excluding favorable currency
translation impacts). The second quarter results reflect strong
sales of waterproofing materials, particularly underlayments for
residential re-roofing and tapes for window/door flashing. Sales
of fire protection products were about even with the prior year,
leveling off after several quarters of decline caused by changes
in building codes. Sales of specialty sealants and coatings, which
include container sealants, coatings and polymers, were $70.5
million, up 3.4% compared with the second quarter of 2003 (about
even with the prior year excluding favorable currency translation
impacts). Higher sales in coatings and closure sealants,
particularly outside North America, offset lower volumes of can
sealants.

Operating income for the Performance Chemicals segment was $38.9
million, compared with $25.8 million in the prior year quarter, a
50.8% increase and also a record for a second quarter. Operating
margin of 14.2% was 3.5 percentage points higher than the 2003
second quarter margin. Improved operating income and margins
reflect increased sales volume from all product lines and the
success of productivity and cost containment programs across the
business segment.

Year-to-date sales of the Performance Chemicals segment were
$522.2 million, up 16.7% from 2003 (excluding currency translation
impacts, sales were up 11.6%). Year-to-date operating income was
$66.5 million compared with $37.9 million for the prior year, a
75.5% increase, reflecting strong sales in all key regions,
including sales from the German acquisition, and positive results
from productivity and cost containment initiatives.

                Corporate Costs and Other Matters

Second quarter corporate costs related to core operations were
$27.1 million, a $7.6 million increase from the prior year
quarter, and year-to-date corporate costs were $48.2 million, $9.8
million higher than last year. The second quarter and year-to-date
increases are primarily attributable to performance-related
compensation. In addition, effective in March 2004, Grace began
accounting for currency fluctuations on a EUR 292 million
intercompany loan between Grace's subsidiaries in the United
States and Germany as a component of operating results, instead of
as a component of other comprehensive income. In May 2004, Grace
entered into a series of forward currency contracts designed to
mitigate the financial exposure to this euro-based loan. The net
change in currency value related to this loan was $8.8 million
unfavorable in the second quarter and $10.4 million unfavorable
year-to-date, and is included in pre-tax (loss) from noncore
activities in Grace's segment basis presentation.

During the second quarter, Grace completed an experience study of
the assumptions and data that underlie its liability measurement
for its U.S. qualified defined benefit pension plans. Based on
that study, the accumulated benefit obligation of such plans as of
the December 31, 2003 measurement date was increased by
approximately $55.0 million (7% of the aggregate liability),
mainly due to longer estimated life spans. This change has been
accounted for within Grace's balance sheet as an increase to the
recorded minimum pension liability and the accumulated
comprehensive loss account (net of tax effects) reflected in
shareholders' equity (deficit).

At June 30, 2004, W.R. Grace's balance sheet showed a
stockholders' deficit of $188.9 million compared to a deficit of
$183.6 million at December 31, 2003.

                     Cash Flow and Liquidity

Grace's year-to-date cash flow provided by operating activities
was $85.8 million for 2004, compared with $35.7 million for the
comparable period of 2003. Year-to-date pre-tax income from core
operations before depreciation and amortization in 2004 was $141.3
million, 45.5% higher than 2003. These results reflect the higher
income from core operations described above. Cash used for
investing activities was $22.1 million through June 2004,
primarily for capital replacements.

At June 30, 2004, Grace had available liquidity in the form of
cash ($371.7 million), net cash value of life insurance ($96.6
million) and unused credit under its debtor-in-possession facility
($215.2 million). Grace believes that these sources and amounts of
liquidity are sufficient to support its strategic initiatives and
Chapter 11 proceedings for the foreseeable future.

                     Chapter 11 Proceedings

On April 2, 2001, Grace and 61 of its United States subsidiaries
and affiliates, including its primary U.S. operating subsidiary W.
R. Grace & Co.-Conn., filed voluntary petitions for reorganization
under Chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court for the District of Delaware (the
"Filing"). Grace's non-U.S. subsidiaries and certain of its U.S.
subsidiaries were not part of the Filing. Since the Filing, all
motions necessary to conduct normal business activities have been
approved by the Bankruptcy Court. Recent developments in Grace's
bankruptcy proceedings include:


   1) The presiding district court judge, Alfred M. Wolin, was
      replaced by Judge Ronald L. Buckwalter of the U.S. District
      Court for the Eastern District of Pennsylvania.

   2) Mr. David T. Austern, who currently also administers    
      asbestos claims for the Manville Trust, was appointed legal
      representative for future asbestos personal injury
      claimants.

   3) Grace's exclusive right to propose a plan of reorganization
      was extended through November 24, 2004. In connection with
      such extension, Grace is required to file a proposed plan of
      reorganization by October 14, 2004.

Grace is in the process of developing a proposed reorganization
plan to meet the October deadline. In such plan, Grace will
propose how to resolve its pre-petition liabilities and
contingencies, including undisputed trade-related, employee-
related and financing-related claims, as well as claims associated
with asbestos-related litigation, environmental remediation, tax
matters and other claims filed with the Bankruptcy Court that
Grace may dispute. The Chapter 11 proceedings, including the
proposed plan of reorganization due in October or any revised
plan, could result in allowable claims that differ materially from
recorded amounts or amounts in Grace's proposed plan. Grace will
continue to adjust its estimates of allowable claims as facts come
to light during the Chapter 11 process that justify a change, and
as Chapter 11 proceedings establish court-accepted measures of
Grace's noncore liabilities. See Grace's recent Securities and
Exchange Commission filings for discussion of noncore liabilities
and contingencies.

Grace is a leading global supplier of catalyst and silica
products, specialty construction chemicals, building materials,
and sealants and coatings. With annual sales of approximately $2
billion, Grace has over 6,000 employees and operations in nearly
40 countries. For more information, visit Grace's Web site at
http://www.grace.com/


WEIRTON STEEL: Plans To Settle with Independent Guards Union
------------------------------------------------------------
At Weirton Steel Corporation's request, the U.S. Bankruptcy Court
for the District of West Virginia permits Weirton to enter into an
agreement with the Independent Guards Union, which resolves all
claims or potential claims asserted or assertable by the IGU on
behalf of its members and retirees against Weirton arising under
or related to their collective bargaining agreements.

Mark E. Freedlander, Esq., at McGuireWoods, in Pittsburgh,
Pennsylvania, tells the Court that Weirton and the IGU have
maintained a collective bargaining relationship since 1983.  The
IGU is the collective bargaining representative for approximately
20 guards at the Weirton facility.  

Weirton and the IGU were parties to collective bargaining
agreements, as amended from time to time, including these benefit
programs:

   (1) Agreement between Weirton and the IGU, effective as of
       September 26, 1996, as amended by:

       -- Settlement Agreement (Hourly Plant Guards), dated
          June 12, 2001;

       -- Settlement Agreement (Hourly Plant Guards), dated
          September 26, 2001;

       -- Settlement Agreement, dated November 13, 2002;

       -- Settlement Agreement, (Hourly Plant Guards), dated
          February 5, 2003; and

       -- Memoranda of Understanding between Weirton and the IGU,
          dated February 19, 2004 and April 22, 2004

   (2) Insurance Agreement, effective September 26, 1993

   (3) Supplemental Unemployment Benefits Plant (Hourly Plant
       Guards), effective September 26, 1993 (Plan 504)

   (4) Current CBAs may have provided for participation by
       members of the collective bargaining unit in:

       -- Weirton Steel Corporation Retirement Plan (Plan 001),
          terminated as of October 21, 2003;

       -- Weirton Steel Corporation 1984 ESOP (Plan 002);
   
       -- Weirton Steel Corporation 1989 ESOP (Plan 003);

       -- Weirton Steel Corporation Tax Deferred Savings Plan
          401(k) (Plan 004);

       -- Program of Health Benefits, Prescription Drug, Dental,
          Orthodontics, and Vision Benefits (Plan 501);

       -- Sickness & Accident Benefits (Plan 502);

       -- Travel Accident Insurance (Plan 511);

       -- Weirton Steel Corporation Employee Assistance Program
          (Plan 516); and

       -- Life Insurance (Plan 517)

The current collective bargaining agreements between Weirton and
the IGU will expire after the expiration of Weirton's collective
bargaining agreement with the Independent Steelworkers Union.

In connection to Weirton's Sale Transaction with International
Steel Group, Inc., and ISG Weirton, Inc., ISG may hire ISG's
represented workforce from among IGU employees of Weirton.  
Whether or not IGU members are hired by ISG, ISG and the IGU have
agreed to the terms and conditions of certain payment to be made
to IGU members upon termination of service, including:

   (a) certain vacation payments to former Weirton employees
       hired by ISG which were earned by those former Weirton
       employees prior to the Closing; and

   (b) certain buy-out payments to be paid by ISG under the
       Transition Benefit Program.

The IGU and ISG have agreed to a Transition Benefit Program to be
funded entirely by ISG.  A purpose of the Program is to induce
voluntary attrition of the IGU-represented workforce at Weirton,
thereby minimizing unemployment that would otherwise occur at the
time of the Closing.

To resolve all claims, Weirton and the IGU negotiated an Effects
Agreement, which provides for:

   (a) Establishment of timeframes -- 45 or 60 days, as the case
       may be -- after the Closing in which Weirton is obligated
       to provide the IGU and IGU-represented employees:

          (1) reports relating to employees eligible for workers'
              compensation benefits;

          (2) access to records including but not limited to
              medical records, work records and personnel files;

   (b) Provisions for cooperation with respect to implementation
       of the Transition Benefit Program;

   (c) Limitations on the extent to which claims for benefits
       provided under the Weirton/IGU collective bargaining
       agreements will be paid;

   (d) Limitations on the extent to which claims for benefits
       formerly provided by Weirton to IGU-represented retirees
       will be paid;

   (e) Termination of the collective bargaining agreements and
       the collective bargaining relationship between Weirton
       and the IGU as of the Closing on the Sale Transaction;
       and

   (f) A waiver and release by the IGU on behalf of itself and to
       the greatest extent permitted by law, its bargaining unit
       employees, former bargaining unit employees and retirees
       of claims, known or unknown, liquidated or unliquidated
       including but not limited to:

          (1) claims under the collective bargaining agreements,
              including grievance claims;

          (2) claims under the National Labor Relations Act, the
              Labor Management Relations Act, the WARN Act, ERISA
              and any other federal, state or local law relating
              to employment, discrimination in employment, wages,
              benefits or otherwise;

          (3) claims filed with the Bankruptcy Court; and

          (4) claims for reimbursement of counsel fees.

   (Weirton Bankruptcy News, Issue No. 31; Bankruptcy Creditors'
   Service, Inc., 215/945-7000)  


WESTERN PACIFIC: First Creditors Meeting Slated for August 4
------------------------------------------------------------
The United States Trustee will convene a meeting of Western
Pacific Network Services, Inc.'s creditors at 1:00 p.m., on
August 4, 2004 at 111 South Tenth Street, Sixth Floor, Suite
6.365A, St. Louis, Missouri 63102.  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 St. Louis, Missouri, Western Pacific Network
Services, Inc., is an Internet Service Provider offering both
dial-up and broadband access to residential and business customers
throughout Eastern Missouri and Central and Southern Illinois.  
The Company filed for Chapter 11 protection on June 29, 2004
(Bankr. E.D. Mo. Case No. 04-48324).  David A. Warfield, Esq., at
Blackwell Sanders Peper Martin LLP, represents the Debtor in its
restructuring efforts.  When the Company filed for protection from
its creditors, it listed $1 million to $10 million in total assets
and total debts.


WESTPOINT STEVENS: Sells 400 Looms to Coker Ashland for $725,000
----------------------------------------------------------------
WestPoint Stevens Inc. discloses that it sold 400 Air Jet Looms
(Dunson and Opelika) to Coker Ashland, LLC, for $725,000 in April
2004.  Because the sale was for less than $1 million, prior
Bankruptcy Court approval was not required under a de minimis
asset sale protocol approved early in WestPoint Stevens' chapter
11 cases.  (WestPoint Bankruptcy News, Issue No. 25; Bankruptcy
Creditors' Service, Inc., 215/945-7000)  


WOMEN FIRST: Files Liquidating Chapter 11 Plan in Delaware
----------------------------------------------------------
Women First Healthcare filed its Liquidating Chapter 11 Plan with
the U.S. Bankruptcy Court for the District of Delaware.  The
Debtor asks the Court to allow it to file its Plan without a
disclosure statement.  The Debtor says it needs additional time to
prepare and circulate the draft disclosure statement to interested
parties for comment and finalize the terms of the Plan.  The
Debtor reasons that filing the plan without a disclosure statement
will provide interested parties the opportunity to review and
comment on the Plan.

A full-text copy of the Debtor's Plan is available for a fee at:

  http://www.researcharchives.com/bin/download?id=040721020853

The Plan provides for these classifications of all claims and
interests against the estates:

   Class              Treatment
   -----              ---------

   1A - Senior        Impaired and entitled to vote whether to
        Secured       accept or reject the Plan. The Holders
        Notes Claims  will:
                      (a) receive the net cash proceeds of the
                          sale of their Collateral if sold prior
                          to the Effective Date,
                      (b) receive their Collateral, or
                      (c) receive other treatment which the
                          Debtor and the Holders agree to.

   1B - Elan Claims   Impaired and entitled to vote whether to
                      accept or reject the Plan. Elan will:
                      (a) receive the net cash proceeds of the
                          sale of its Collateral if such
                          Collateral is sold prior to the
                          Effective Date,
                      (b) receive its Collateral, or
                      (c) receive other treatment which the
                          Debtor and Elan agree to.

   1C - Wyeth Claims  Impaired and entitled whether to vote to
                      accept or reject the Plan. Wyeth will:
                      (a) receive the net cash proceeds of the
                          sale of its Collateral if such    
                          Collateral is sold prior to the
                          Effective Date,
                      (b) receive its Collateral, or
                      (c) receive other treatment which the
                          Debtor and Wyeth agree to.

   2A et seq. -       Impaired and entitled to vote whether to
      Other Secured   accept or reject the Plan. Each Allowed
      Claims          Class 2A et seq. claim, will, in the
                      discretion of the Debtor, receive any one
                      or a combination of:
                      (a) Cash in an amount equal to such
                          Allowed Class 2A et seq. Claim;
                      (b) deferred Cash payments totaling at
                          least the Allowed amount of such
                          Claim;
                      (c) the Collateral securing such Holder's
                          Allowed Class 2A et seq. Claim;
                      (d) payments or Liens amounting to the
                          indubitable equivalent of the value of
                          such Holder's interest in the
                          Collateral securing the Allowed Class
                          2A et seq. Claim;
                      (e) Reinstatement of such Class 2A et seq.
                          Claim; or
                      (f) other treatment as the Debtor and the
                          Holder have agreed upon.

   3 - Priority       Unimpaired and not entitled to vote for
       Non-Tax        or against the Plan. The Liquidating Trust
       Claims         will pay the Holder either:
                      (a) Cash equal to the amount of such
                          Allowed Priority NonTax Claim, or
                      (b) other treatment which the Debtor and
                          the Holder agree to.

   4 - Unsecured      Impaired and entitled to vote for or
       Claims         against the Plan. The Liquidating Trustee
                      will pay the Holder, a Pro Rata share of
                      the Cash and Assets held in the
                      Liquidating Trust from time to time.

   5 - Senior         To the extent that Holders of retain
       Convertible    any property or Cash on account of the
       Redeemable     Claims, Class 5 is impaired by the Plan
       Preferred      and entitled to vote for or against the
       Stock Rights   Plan. To the extent that Holders retain no
                      property or Cash on account of Interests
                      or Claims, Class 5 is impaired by the Plan
                      and deemed to have rejected the Plan.

                      To the extent that the security interest
                      asserted by Holders of Senior Convertible
                      Redeemable Preferred Stock is valid and
                      enforceable, the Holders will receive
                      either:
                      (1) payment from the proceeds, if any, of
                          their collateral plus a Deficiency
                          Claim, if any or
                      (2) a return of their collateral plus a
                          Deficiency Claim, if any.

                      To the extent that a party in interest
                      successfully asserts or the Court
                      determines that the security interest
                      asserted by Holders is unperfected,
                      invalid or unenforceable, Holders of
                      Senior Convertible Redeemable Preferred
                      Stock will have no Claim with and will
                      receive the same treatment as Holders of
                      Class 6 and Class 7 Interests.
  
   6 - WFHC Common    Impaired and deemed to have rejected the
       Stock and      Plan. Each Holder of will not receive or
       Securities     retain any property or Cash under the Plan
       Claims         on account of such Interest or Claim.
                      
   7 - All Claims     Impaired and deemed to have rejected the
       arising out    Plan. Each Holder will not receive or    
       of WFHC        retain any property or Cash under the Plan
       Stock Rights   on account of such Interest or Claim.

Headquartered in San Diego, California, Women First HealthCare,
Inc. -- http://www.womenfirst.com/-- is a specialty  
pharmaceutical company dedicated to improve the health and well-
being of midlife women. The Company filed for Chapter 11
protection on April 29, 2004 (Bankr. Del. Case No. 04-11278).
Michael R. Nestor, Esq., and Sean Matthew Beach, Esq., at Young
Conaway Stargatt & Taylor represent the Debtor in its
restructuring efforts.  When the Company filed for protection from
its creditors, it listed $49,089,000 in total assets and
$73,590,000 in total debts.


WORLDCOM INC: Demands Full Payment of Debts from Former CEO
-----------------------------------------------------------
Marcia L. Goldstein, Esq., at Weil, Gotshal & Manges, LLP, in New
York, relates that in Fall 2000 and continuing through April
2002, the Worldcom Inc. Debtors loaned to former WorldCom Chief
Executive Officer, Bernard J. Ebbers, funds to pay for Mr. Ebbers'
personal debt from different institutions, including Bank of
America, N.A., Citicorp USA, Inc., and Travelers Insurance
Company.  Mr. Ebbers borrowed hundreds of millions of dollars from
these institutions for his business ventures.  Mr. Ebbers pledged
significant amounts of his shares of WorldCom stock as collateral
for the debt.

                          The Ebbers Loans

In 2000 and 2002, the Debtors loaned money to Mr. Ebbers and
guaranteed Mr. Ebbers' debt to prevent large forced sales of
WorldCom Common Stock due to margin calls made by Bank of
America.  The Ebbers Loans were evidenced by demand notes.

In connection with the 2000 Demand Note, Mr. Ebbers and the
Debtors entered into a letter agreement dated November 1, 2000,
whereby:

    (a) The Debtors agreed to provide a limited guaranty to Bank
        of America for certain of Mr. Ebbers' liabilities to Bank
        of America;

    (b) Mr. Ebbers indemnified the Debtors for all claims and
        expenses arising out of the 2000 Letter Agreement, the
        2000 Demand Notes, and the guaranty; and

    (c) Mr. Ebbers pledged to the Debtors his current and future
        shares of WorldCom Common Stock and all proceeds derived
        from the Stock, as security for his obligations under the
        2000 Letter Agreement and the Ebbers Loans.

The Debtors and Bank of America entered into a First Modification
and Reaffirmation of Limited Guaranty dated January 25, 2002,
which expanded the Debtors' prior guaranty to include not only
Mr. Ebbers' obligations to Bank of America, but also those of
companies owned by Mr. Ebbers, and recognized his additional
obligations under the Letter of Credit.

In January 2002, the Debtors loaned directly to Mr. Ebbers an
additional $65 million, as evidenced by the 2002 Demand Note, in
exchange for Mr. Ebbers' promise to repay the loan.

Under the Demand Notes, the Debtors had the right to demand
immediate repayment of all principal and interest due at any
time.  As a result of the Guaranty and Letter of Credit, the
Debtors ultimately paid Bank of America $235,227,055.

Furthermore, the Debtors and Mr. Ebbers entered into:

    -- a letter agreement on April 2, 2002, which amended and
       restated the 2000 Letter Agreement; and

    -- a Pledge and Security Agreement on April 18, 2002.

Under the 2002 Agreements, Mr. Ebbers pledged to the Debtors
security interests in certain equity interests in privately held
businesses he owned, including Joshua Holdings, Intermarine
Companies, BCT Holdings, LLC, Douglas Lake Companies, Douglas
Lake Land & Timber Company, LLP, and Douglas Lake Properties,
Inc.  The Debtors became entitled to exercise sole and exclusive
control of the Ebbers Property Interests, including voting
interests, upon notice to the relevant company.

                            The Term Note

On April 29, 2002, the Debtors agreed to consolidate Mr. Ebbers'
financial obligations into a single promissory note.  Under the
Term Note, the Debtors relinquished their right to demand
immediate repayment of all principal and interest due and allowed
Mr. Ebbers to repay the Ebbers Loans at a below-market interest
rate over a period of five years pursuant to this schedule:

    * $25 million on April 29, 2003,
    * $25 million on April 29, 2004,
    * $75 million on April 29, 2005,
    * $100 million on April 29, 2006, and
    * the remaining principal on April 29, 2007.

As of April 29, 2002, the aggregate principal amount owed by Mr.
Ebbers under the Term Note is $408,214,930, which consists of:

    * $165 million in principal amount owed by Mr. Ebbers under
      the 2000 Demand Notes and the 2002 Demand Note;

    * $198.7 million in payments made by the Debtors to Bank of
      America under the Guaranty;

    * $36.5 million deposit by the Debtors collateralizing the
      Letter of Credit; and

    * $8 million in interest accrued thereon through April 29,
      2002.

The Term Note provides:

    (a) for Mr. Ebbers' payment of interest on the outstanding
        balance under the Term Note, at a fluctuating interest
        rate equal to that for Eurodollar borrowings under the
        Revolving Credit Agreement among the Debtors, Bank of
        America and JPMorgan Chase Bank, dated as of June 8, 2001,
        as amended.  The interest rate was 2.32% per year as of
        April 29, 2002;

    (b) that after any payment demand, Mr. Ebbers will pay a
        default rate of interest on demand on the unpaid
        balance under the Term Note, compounded monthly, at the
        applicable Normal Rate then in effect plus 3% per annum;

    (c) that all principal and accrued interest under the Term
        Note becomes immediately due and payable on demand by the
        Debtors:

           -- if Mr. Ebbers fails to pay any principal or interest
              under the Term Note when due; or

           -- if Mr. Ebbers defaults on the observance or
              performance of any agreement contained in the Term
              Note or in the Separation Agreement; and

    (d) that if any amount of the Term Note is not paid when due,
        Mr. Ebbers will pay all costs of collection, including the
        fees and expenses of counsel and court costs, in addition
        to the full amount due.

                      The Separation Agreement

On April 29, 2002, the Debtors and Mr. Ebbers also entered into a
separation and mutual release agreement, pursuant to which Mr.
Ebbers agreed to resign as the Debtors' CEO and Director.  In
turn, the Debtors agreed to:

    (a) pay Mr. Ebbers a $1.5 million lifetime pension annually,
        and upon his death, a $750,000 lifetime pension annually
        to his then current spouse;

    (b) provide Mr. Ebbers with lifetime medical and life
        insurance benefits;

    (c) allow Mr. Ebbers to use the Debtors' aircraft on a limited
        basis;

    (d) provide Mr. Ebbers with a computer;

    (e) lease Mr. Ebbers an office space;

    (f) accelerate the vesting of Mr. Ebbers' stock options and
        allow him up to five years to exercise them;

    (g) continue in effect the Debtors' indemnification of
        Mr. Ebbers; and

    (h) enter into a mutual release with Mr. Ebbers that would
        generally release the Debtors' claims against Mr. Ebbers
        except in connection with fraud, willful misconduct, gross
        negligence or criminal acts.

The Debtors provided health benefits to Mr. Ebbers under the
Separation Agreement until April 2003.

                         The Ebbers Claims

On January 22, 2003, Mr. Ebbers filed Claim No. 20659, asserting
administrative expense claims and general unsecured claims for:

    -- amounts allegedly due or that allegedly become due under
       the Separation Agreement;

    -- the Debtors' indemnification and related expense
       reimbursement obligations under the Restated By-laws of
       WorldCom, Inc.; and

    -- the Debtors' obligations under a guaranty and related
       letter agreements.

In addition, Mr. Ebbers asserted a set-off claim against the
Debtors relating to the assets and interests he pledged to the
Debtors and sold during the Chapter 11 cases.  Claim No. 20659
also purports to reserve all other claims, counterclaims,
defenses and other rights -- the Additional Claims.  However,
Claim No. 20659 does not specify an amount but rather, asserts
claims to the extent of any liability of the Debtors.

On October 20, 2003, Mr. Ebbers filed Claim No. 36383, asserting
an unsecured non-priority claim for $12,166,752 on account of
rejected stock options.

Ms. Goldstein tells the U.S. Bankruptcy Court for the Southern
District of New York that as of February 2004, the Debtors
recovered $70.4 million from their collateral in respect
of their $408.2 million loan to Mr. Ebbers.  The Debtors
received:

    -- $17.1 million from the sale of the Intermarine shipyard and
       two Intermarine yachts;

    -- $50.8 million from the sale of the Douglas Lake Ranch; and

    -- $2.5 million in excess collateral remitted by Bank of
       America.

                            The Default

On April 29, 2003, Mr. Ebbers defaulted on his first scheduled
$25 million payment to the Debtors due under the Term Note.  As a
result, the Debtors demanded the immediate full payment of the
loan.

The default entitles the Debtors to exercise their rights and
pursue remedies under Article 9 of the Uniform Commercial Code
with respect to their collateral, including the Ebbers Property
Interests.  The Separation Agreement also provides that on a
default on the Term Note, "payment of the pension benefits . . .
will be permanently discontinued and all outstanding amounts due
to the Company by the Executive will be accelerated as provided
in the [Term] Note."

Pursuant to Sections 542, 548 and 550 of the Bankruptcy Code, the
Debtors ask the Court to:

    (a) compel Mr. Ebbers to turn over all amounts represented by
        the Term Note, including the $408,214,930 plus interest,
        including at the default rate, together with costs and
        interest, less an amount equal to the net proceeds
        realized by the Debtors from the sale of Mr. Ebbers'
        pledged collateral;

    (b) avoid the April 2002 Loan Restructuring as a fraudulent
        transfer under Section 548;

    (c) compel Mr. Ebbers to turn over all amounts represented by
        the Demand Notes;

    (d) avoid the Separation Agreement and Mutual Release as
        fraudulent transfers under Section 548, and order Mr.
        Ebbers to turn over to the Debtors the value of the
        Separation Agreement benefits paid to him by the Debtors,
        together with costs and interest;

    (e) avoid the 2002 Demand Note as a fraudulent transfer under
        Section 548, and order Mr. Ebbers to turn over to the
        Debtors the $65 million transferred to him, together with
        costs and interest;

    (f) disallow and expunge Mr. Ebbers' Claim No. 20659 and
        Rejected Stock Option Claim in their entirety or grant
        alternative protection with respect to Claim No. 20659
        and the Rejected Stock Option Claim;

    (g) award them the costs and disbursements of the action,
        including reasonable fees and costs to their attorneys,
        accountants and experts; and

    (h) disallow any of Mr. Ebbers' claims until he has turned
        over and paid all amounts due and payable.

                  Objection to the Ebbers Claims

The Debtors also argue that the Separation Agreement Claim, the
Indemnification and Reimbursement Claim, the Guaranty Claim and
the Rejected Stock Option Claim are without merit.  Accordingly,
the Debtors ask the Court to disallow and expunge the Ebbers
Claims.

The Debtors reserve their rights with respect to the Set-off
Claim and the Additional Claims.  The Debtors also reserve their
right to further object or modify their objection to Claim No.
20659 and the Rejected Stock Option Claim.

In the alternative, the Debtors ask the Court to reject the
Separation Agreement pursuant to Section 365.  To the extent Mr.
Ebbers asserts that the Separation Agreement Claim is an
administrative expense claim, the Debtors ask the Court to
recharacterize and calculate the Separation Agreement Claim as a
rejection damage claim and classify it as a Class 6 WorldCom
General Unsecured Claim.

To the extent Mr. Ebbers is entitled to indemnification or
reimbursement in connection with the securities-related actions,
the Debtors ask the Court to reclassify the Indemnification and
Reimbursement Claim as a Class 7 WorldCom Subordinated Claim,
entitled to receive no distribution under the Plan.

At best, Ms. Goldstein notes, the Indemnification and
Reimbursement Claim should be classified as Class 6 WorldCom
General Unsecured Claim, not an administrative expense claim, to
the extent that the Court determines that the Indemnification and
Reimbursement Claim:

    -- is not subject to disallowance pursuant to Section
       502(e)(1)(B) of the Bankruptcy Code; and

    -- does not constitute a Class 7 WorldCom Subordinated Claim.

Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI-- http://www.worldcom.com-- is a pre-eminent global  
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.  

The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532).  On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts.

On April 20, 2004, the company (WCOEQ, MCWEQ) formally emerged
from U.S. Chapter 11 protection as MCI, Inc. This emergence
signifies that MCI's plan of reorganization, confirmed on October
31, 2003, by the U. S. Bankruptcy Court for the Southern District
of New York is now effective and the company has begun to
distribute securities and cash to its creditors. (Worldcom
Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service,
Inc., 215/945-7000)  


* Nixon Peabody Forms New Beverage Alcohol Team
-----------------------------------------------
A dynamic team of leading beverage alcohol attorneys has joined
Nixon Peabody LLP, providing the firm with a significant breadth
and depth of experience in serving clients in this industry.

Vincent O'Brien, a highly regarded industry attorney who has
represented scores of major wine and spirits companies over the
past 40 years, will lead the Beverage Alcohol Team and will be
based in the New York office. Susan Cagann, a former Vice
President and Counsel at Kendall Jackson, and Matthew Botting, the
former Chief Counsel to the California Department of Alcoholic
Beverage Control, will be based in the San Francisco office.

"This beverage alcohol team has extensive experience dealing with
every type of issue facing clients in this industry -- from the
grape or grain to the glass," Mr. O'Brien said. "We can assist
clients with issues including land use, development, acquisitions
and environmental issues, as well as labor and employment and
immigration matters. We can advise on OSHA issues, on new product
development issues and on regulatory issues related to bottling,
distributing and marketing. We work with manufacturers,
distributors and retailers, dealing with jurisdictions across the
United States and internationally and now are part of a firm that
includes some of the country's leading attorneys in each of these
fields."

Harry P. Trueheart, III, Chairman, CEO, and Co-managing Partner of
Nixon Peabody said: "Nixon Peabody has a substantial number of
clients in the beverage alcohol industry to which we provide
finance, mergers and acquisitions, labor and employment,
intellectual property, real estate, taxation and other services.
Vincent O'Brien, Susan Cagann, and Matthew Botting bring to Nixon
Peabody an exceptional range of experience, knowledge and
relationships within the beverage alcohol industry. With the
addition of their regulatory expertise to our Beverage Alcohol
Team, we now provide a complete array of services to our clients
and the industry."

Mr. O'Brien's practice focuses on alcohol beverage control law,
licensing and regulation; international trade, import and export
law; trade regulation; intellectual property issues relating to
wines and spirits trademarks and appellations; and international,
Federal and State licensing applications and transfers.

Mr. O'Brien, formerly a partner in Buchman & O'Brien, also
previously served as Executive Vice President and General Counsel
of the Seagram Company for 11 years. In addition, he is the senior
member of the U.S. delegation to the International Federation of
Wines & Spirits and is an advisor to the Laws & Regulations
Working Group of the International Wine Office. He is a founding
member and President-elect of the International Wine Law
Association and author of a chapter on Beverage Alcohol Law
Practice for West's Guide to New York Practice. Mr. O'Brien
received a J.D. from Fordham Law School, an MBA from New York
University Graduate School of Business, and an LLM in taxation
from the New York University Graduate School of Law.

Ms. Cagann's practice focuses on providing innovative solutions
and sound risk assessment to leaders in the wine, food, and retail
industry. She has assisted a wide range of companies in compliance
with the myriad regulations and laws impacting suppliers,
distributors, and retailers of consumer products. Ms. Cagann
received a J.D. from the University of Missouri School of Law and
is admitted to practice in California and Illinois.

Mr. Botting focuses on alcoholic beverage control law, beverage
alcohol licensing and regulatory compliance. While at the
California Department of Alcoholic Beverage Control, Mr. Botting
advised on all aspects of the State's licensing and trade practice
laws as well as new legislation. He received an LLB and Bachelor
of Commerce from Otago University, Dunedin, New Zealand and is
admitted to practice in California and New Zealand.

Also joining the new Beverage Alcohol Team are Compliance
Assistants Luke Williams and Alexandra Lawrence, who were also at
Buchman & O'Brien and will be located in the San Francisco office,
and Wanda Wuest, who previously served as head of compliance for
Remy Martin Amerique and will be based in the Rochester, NY
office. These individuals have extensive knowledge and experience
navigating the complexities of international, Federal and State
licensing applications and transfers, which is crucially important
as companies seek to navigate the regulatory landscape around the
globe.

Nixon Peabody LLP is one of the 50 largest law firms in the United
States with more than 650 attorneys working in 15 major practice
areas. The firm's size, diversity, and state-of-the-art
technological resources enable it to offer comprehensive legal
services to individuals and organizations of all sizes in local,
state, national, and international matters.

Nixon Peabody's clients include emerging and middle-market
businesses, national and multinational corporations, financial
institutions, public entities, not-for-profit institutions, and
individuals.


* Newman Rejoins Morgan Lewis as Energy Practice Group Partner
--------------------------------------------------------------
Karol Lyn Newman has rejoined Morgan Lewis as a partner in the
Energy Practice Group, resident in the Washington, D.C., office.
For more than 100 years, the Energy Practice at Morgan Lewis has
occupied a prominent position in serving the domestic and
international energy industry.

Prior to rejoining Morgan Lewis, Ms. Newman was a partner at a
leading Washington, D.C. firm. In that role, she represented and
provided advice for leading integrated oil and gas companies,
major distribution companies, interstate pipelines, and natural
gas producers on FERC natural gas matters involving a wide range
of regulatory and related business issues. These matters included:
advise on regulatory issues and contracting matters related to
natural gas storage projects, including salt dome storage and LNG,
corporate restructuring alternatives; acquisitions and partnering
arrangements; contract realignments; litigation, and regulatory
strategies at the federal and state levels.

"We are pleased to welcome back such a well-regarded FERC energy
regulatory lawyer as Karol Lyn to our practice," said Jay
Gutierrez, head of the Energy Practice at Morgan Lewis. "Karol
Lyn's return boosts our federal natural gas and electric practice
capabilities and also complements our strong state level natural
gas practice. In addition, Karol Lyn's significant experience with
major integrated oil and gas companies is a major asset to our
existing clients and offers them a broader range of services in
regulatory and transactional matters."

Recently recognized as a leading gas lawyer in the 2004 edition of
Chambers USA, America's Leading Lawyers for Business, Ms. Newman
possesses over 25 years of experience in the energy area. A former
Morgan Lewis partner and one of the first two women partners at
the firm, she has also been actively involved in legislative
efforts in the energy area, including the drafting of legislation
and representation of clients on energy matters in the Congress.
Ms. Newman has also handled cases in the United States Court of
Federal Claims and the United States District Courts, in addition
to her years of appellate practice handling appeals of agency
action before the United States Courts of Appeal.

Ms. Newman is an honors graduate of the University of Maryland
School of Law, where she served as articles editor of the Maryland
Law Review and was elected to the Order of the Coif. She is also a
member of the American Bar Association, the District of Columbia
Bar Association, the Maryland Bar Association and the Federal
Energy Bar Association.

                 About Morgan, Lewis & Bockius LLP

With more than 1,200 lawyers in 18 offices worldwide, Morgan Lewis
offers seamless service across practice areas and offices. A fully
integrated, multipractice global law firm, Morgan Lewis assists
clients with all of their legal needs, from day-to-day business
decisions to the most complex global deals and litigation.


* BOOK REVIEW: Macy's For Sale
------------------------------
Author:     Isadore Barmash
Publisher:  Beard Books
Softcover:  180 pages
List Price: $34.95

Own your personal copy at
http://www.amazon.com/exec/obidos/ASIN/1587981726/internetbankrupt

Review by Henry Berry

Isadore Barmash writes in his Prologue, "This book tells the story
of Macy's managers and their leveraged buyout, the newest and most
controversial device in the modern financial armament" when it
took place in the 1980s. At the center of Barmash's story is
Edward S. Finkelstein, Macy's chairman of the board and chief
executive officer. Sixty years old at the time, Finkelstein had
worked for Macy's for thirty-five years. Looking back over his
long career dedicated to the department store as he neared
retirement, Finkelstein was dismayed when he realized that even
with his generous stock options, he owned less than one percent of
Macy's stock. In the years leading up to his unexpected, bold
takeover, Finkelstein had made over Macy's from a run-of-the-mill
clothing retailer into a highly profitable business in the lead of
the lucrative and growing fashion and "lifestyle" field.
     
To aid him in accomplishing the takeover and share the rewards
with him, Finkelstein had brought together more than three hundred
of Macy's top executives. To gain their support for his planned
takeover, Finkelstein told them, "The ones who have done the job
at Macy's are the ones who ought to own Macy's." Opposing
Finkelstein and his group were the Straus family who owned the
lion's share of Macy's and employees and shareholders who had an
emotional attachment to Macy's as it had been for generations,
"Mother Macy's" as it was known. But the opponents were no match
for Finkelstein's carefully laid plans and carefully cultivated
alliances with the executives. At the 1985 meeting, the
shareholders voted in favor of the takeover by roughly eighty
percent, with less than two percent opposing it.
    
The takeover is dealt with largely in the opening chapter. For the
most part, Barmash follows the decision-making by Finkelstein, the
reorganization of the national company with a number of branches,
the activities of key individuals besides Finkelstein, Macy's
moves in the competitive field of clothing retailing, and attempts
by the new Macy's owners led by Finkelstein to build on their
successful takeover by making other acquisitions. Barmash allows
at the beginning that it is an "unauthorized book, written without
the cooperation of the  buying group." But as he quickly adds, his
coverage of Macy's as a business journalist and his independent
research for over a year gave him enough knowledge to write a
relevant and substantive book. The reader will have no doubt of
this. Barmash's narrative, profiles of individuals, and analysis
of events, intentions, and consequences ring true, and have not
been contradicted by individuals he writes about, subsequent
events, or exposure of material not public at the time the book
was written.
     
Barmash does not limit himself to documenting the buyout of
Macy's. While portraying the buyout as a momentous incident in
American business history which sent ripples throughout the
corporate world, he also places it in the context of the business
environment of the time. The buyout took place in the aggressive,
largely laissez-faire, capitalist business environment of the
Reagan era. Without being judgmental, the author touches on both
sides of this aggressiveness. While many corporations were
awakened from their longtime inertia, this took a toll on many
individuals in the way of felt betrayals, lost jobs, and uncertain
futures. Besides focusing on Finkelstein and other factors at the
center of the takeover, Barmash to some extent goes into the
changes it brought to the American business world. He does this in
a lucid style which gets right to the point of each subject at
hand to present a multifaceted view of this watershed event in
recent U. S. economic and corporate history.

Isadore Barmash, a veteran business journalist and author, was
associated with the New York Times for more than a quarter-century
as business-financial writer and editor.  He also contributed many
articles for national media, Reuters America, and the Nihon Keizai
Shimbun of Japan.  He has published 13 books, including a novel,
and is listed in the 57th edition of Who's Who in America.

                           *********

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.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

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, Emi Rose S.R. Parcon, Bernadette C. de Roda, Rizande B.
Delos Santos, Paulo Jose A. Solana, Jazel P. Laureno, Aileen M.
Quijano 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.


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