TCR_Public/040805.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

           Thursday, August 5, 2004, Vol. 8, No. 163

                          Headlines

19th & WEBBER: Case Summary & 20 Largest Unsecured Creditors
ADELPHIA: Century Wants to Employ Lazard as Investment Banker
ADVANCED X-RAY: Hires Macey Wilensky as Bankruptcy Counsel
ALION SCIENCE: Closes $180 Million Term B Senior Credit Facility
AMC ENT: New Marquee Securities Get S&P's Low-B & Junk Ratings

AMERIDEBT: Taps Winthrop & Weinstine as Minn. Litigation Counsel
AMERIDEBT INC: U.S. Trustee Wants a Chapter 11 Trustee Appointed
ARCH COAL: Rising Costs Prompt S&P's BB Corporate Credit Rating
AT&T CORPORATION: S&P Lowers Ratings to Non-Investment-Grade Level
BANKATLANTIC INC: Fitch Affirms Junk and Low-B Ratings

CATHOLIC CHURCH: Can Maintain Existing Bank Accounts at Key Bank
CCC INFORMATION: Narrow Product Focus Prompts S&P's Low-B Ratings
CENTENNIAL COMMS: Exercises Option to Purchase AT&T Spectrum
CITIZEN COMMS: Expects 6.75% Reset Interest Rate on New Sr. Notes
CORNELL COS: J. Nieser Sits as Interim CFO After Hendrix Resigns

COVANTA ENERGY: Wants Plan Injunction Lifted to Liquidate 9 Claims
CRESCENT REAL ESTATE: Reports $36.1 Million Half-Year Net Loss
CROMPTON CORP: Prices $600 Million Offering of 9-7/8% Senior Notes
DII/KBR: Halliburton Names Andrew Lane as KBR President & CEO
DOMAN IND: Trading Under Western Forest WEF Symbol on TSX Begins

DPL INC: S&P Maintains BB- Corporate Credit Ratings on CreditWatch
EDEN BIOSCIENCE: Receives Delisting Notice from Nasdaq
ELCOM INTERNATIONAL: Equity Deficit Narrows to $841K at June 30
ENERSYS: S&P Raises Corporate Credit Rating One Notch to BB
ENRON: ECTRIC Demands $3.5 Million Payment from Louis Dreyfus LPG

ENRON: Oregon PUC Staff Doesn't Like PGE Sale to Oregon Electric
FISHERS OF MEN CHRISTIAN: Voluntary Chapter 11 Case Summary
FLEMING COS: Court Nixes 30 Pension Claims Totaling $3.7 Million
FOSTER WHEELER: 61% of 6.75% Noteholders Tender in Amended Offer
GRANITE BROADCASTING: Delisted from Nasdaq SmallCap Market

INT'L STEEL: Georgetown Facility Begins Wire Rod Production
J.P. MORGAN: S&P Assigns Low-B Ratings to Six Certificate Classes
KB HOME: Fitch Affirms BB Senior Unsecured Debt Rating
KITCHEN ETC.: Taps DJM Asset Management to Dispose of 17 Stores
MIRANT CORP: Committee Objects to James M. Donnell's Retention

MIRANT: Walks from Bosque Agreement & Assumes Wharton Tolling Pact
NANOGEN INC: Reports $12.3 Million 2nd Quarter Net Loss
NEXPAK CORPORATION: Hires Jones Day as Bankruptcy Counsel
OWENS CORNING: More Objections Raised Against Trustee Appointment
OWENS CORNING: Creditor Panel Urges Appointment of Examiner

PACIFIC GAS: Objects to Cal PX's $667,841 Claim for Legal Fees
PARMALAT: Judge Drain Appoints James Garrity to Serve as Examiner
PEGASUS SATELLITE: Retains Capital & Technology as Fin'l Advisor
PG&E NATIONAL: USGen Committee Retains Blake as Expert Consultant
PIEDMONT HAWTHORNE: S&P Assigns B+ Corporate Credit Rating

PILLOWTEX: Seeks Court Nod on $3.4 Million Hanover Property Sale
PINNACLE ENT: Fitch Puts B+ Rating on Proposed $350M Bank Facility
QWEST COMMUNICATIONS: Equity Deficit Widens to $1.9B at June 30
RAINBOW MEDIA: S&P Junks Senior Unsecured & Subordinated Notes
RCN CORP: Court Okays Trading Restriction to Preserve NOLs

RS GROUP: Promotes Landlord Risk Specialty Insurance Products
SOLUTIA INC: Court Okays New Executive Compensation Agreements
SPHERION: Completes Divestiture of United Kingdom Operations
SPIEGEL INC: Hires Staubach Midwest as Real Estate Broker
SPX CORP: Weak Operating Results Spur S&P Negative Outlook

THREE PROPERTIES: Case Summary & 20 Largest Unsecured Creditors
THREE PROPERTIES: Hires Hohmann Taube as Bankruptcy Counsel
TORPEDO SPORTS: Proposes to Merge with Interactive Games, Inc.
UAL CORP: Inks Pact Modifying Stay on Cal. Statewide Secured Claim
UNIVERSAL ACCESS: Files for Chapter 11 Reorganization in Illinois

UNIVERSAL ACCESS: Voluntary Chapter 11 Case Summary
UNIVERSAL ACCESS: PwC Resigns as Independent Accountants
US AIRWAYS: Settles Bank of New York Aircraft Claims for $20.9 Mil
WASTECORP INC: Disclosure Statement Hearing Set for August 24
VALCOM INC: Subsidiary Emerges From Chapter 11 Protection

WATERFRONT WAREHOUSE: Sec. 341(a) Meeting Slated for August 31
WEIRTON STEEL: Wants Court to Nix Individual Bondholders' Claims
WELLSFORD REAL: Posts $2,313,530 Net Loss in 2nd Quarter
WESTPOINT STEVENS: Court Clears 5th Amendment to DIP Financing

                          *********

19th & WEBBER: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Lead Debtor: 19th & Webber Associates, Inc.
             aka West Texas Canyon Amphitheater
             aka Canyon Amphitheater
             aka Nineteenth & Webber Associates
             aka Canyon Amphitheatre
             aka West Texas Parking, Inc.
             1418 Texas Avenue
             Lubbock, Texas 79401

Bankruptcy Case No.: 04-50903

Chapter 11 Petition Date: August 3, 2004

Court: Northern District of Texas (Lubbock)

Judge: Robert L. Jones

Debtor's Counsel: Robert C. Heald, Esq.
                  Price and Heald
                  2301 Broadway
                  Lubbock, Texas 79401
                  Tel: 806-747-5000

Total Assets: $2,890,206

Total Debts: $1,857,086

Debtor's 20 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Davis Moore Electric, Inc.    Initial Electrical        $165,230

Zahn Paving, Inc.             Agreed Judgment           $100,000
                              against 19th & Webber

Fastlane Concerts             Rick Springfield           $41,000
                              Concert Fees

AEG                           Michael W. Smith           $29,200
                              Concert Loss

American State Bank           Debt incurred by           $23,131
                              Tanner Foster

AEG Southwest                 George Jones               $17,576
dba Lane Concerts             Concert Loss

SLS Partnership, Inc,         Architectural Plans        $15,260

Stone Concerts, Inc.          Consulting                 $15,000

Pronote, Inc.                 Insurance                   $7,067

Willis E. Gresham, Jr.        Attorney Fees               $7,022

Caprock Waste                 Garbage service             $6,004

Outer Wear USA                Advertising                 $4,178

Tex Craft                     Construction                $3,884

LP&L                          Utility                     $3,398

Doc's Wholesale Liquor        Liquor                      $3,281

Texas Scenic Company          Curtains                    $3,225

White Service Com             Maintenance                 $2,245

KLBK/Channel 13/KAMC/         Advertising                 $1,500
Channel 28

Mayfield Paper Company        Supplies                    $1,494

The Lamar Companies           Outdoor Signs               $1,035


ADELPHIA: Century Wants to Employ Lazard as Investment Banker
-------------------------------------------------------------
Century Communications Corporation asks the Bankruptcy Court for
authority to employ Lazard Freres & Co., LLC, as its sole
investment banker to provide general restructuring advice in
connection with a possible sale of Century/ML Cable Venture or any
Century/ML interest or subsidiary division.

Specifically, Lazard will:

    -- assist Century Communications in identifying and evaluating
       candidates for a potential Century/ML sale transaction;

    -- advise Century Communications in connection with
       negotiations; and

    -- assist in the consummation of the Century/ML Transaction.

The Century/ML Transaction may take the form of a merger or a
sale of assets or equity securities or other interests.

Shelley C. Chapman, Esq., at Willkie Farr & Gallagher, in New
York, tells the Court that Century Communications requires
knowledgeable investment bankers to render those essential
professional services.  Lazard, with its general restructuring
experience, merger and acquisition expertise and its knowledge of
the capital markets, fits the bill.

Lazard also serves as investment banker to the ACOM Debtors.  On
December 12, 2003, the Court expanded the scope of Lazard's
employment to include services related to any sale transaction
involving any of the ACOM Debtors' non-core, non-cable domestic
assets or its cable assets located outside the United States.

Lazard and Century Communications agree to this compensation
scheme:

    (a) In the event the Century/ML Transaction involves a sale of
        less than or equal to 55% of the equity in Century/ML,
        Lazard will be paid a $2,000,000 fee.

    (b) In the event that the Transaction involves a sale of more
        than 55% of Century/ML's equity, Lazard will be entitled
        to a fee equal to the applicable percentage of the
        aggregate consideration received in the transaction.

    (c) One-half of any fee payable to Lazard in connection with a
        Century/ML Transaction will be credited against any fees
        subsequently payable pursuant to the Engagement Letter
        between ACOM and Lazard dated June 1, 2002.

    (d) In addition to any fees that may be payable to Lazard and
        regardless of whether any transaction occurs, Century
        Communications will promptly reimburse Lazard for all:

           * reasonable out-of-pocket expenses, including travel
             and lodging, data processing and communications
             charges and courier services; and

           * other reasonable fees and expenses, including
             expenses of counsel, if any.

The structure and amount of Lazard's contingent fee, Ms. Chapman
asserts, is reasonable given the value of Lazard's services and
the wealth of experience the firm brings to the table.

M. Said Armutcuoglu, a managing director at Lazard, assures the
Court that Lazard has not represented and has no relationship
with Century Communications and its creditors and equity security
holders; other parties-in-interest in Century Communications'
case; their attorneys and accountants; and the United States
Trustee or any person employed in the Office of the U.S. Trustee.

Mr. Armutcuoglu further attests that Lazard does not hold or
represent any interest adverse to Century Communications or its
estate.  The firm is a "disinterested person" within the meaning
of Section 101(14) of the Bankruptcy Code.

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


ADVANCED X-RAY: Hires Macey Wilensky as Bankruptcy Counsel
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia
gave Advanced X-Ray, Inc., permission to hire the law firm of
Macey, Wilensky, Cohen, Wittner & Kessler, LLP.

The firm is expected to:

    a) give the Debtor advice with respect to its powers and
       duties as debtor-in-possession in the management of its
       property;

    b) prepare on behalf of the Debtor as debtor-in-possession
       necessary schedules, applications, motions, answers,
       orders, reports and other legal matters;

    c) assist in examination of the claims of creditors;

    d) assist in formulating and preparing of the disclosure
       statement reorganization and with the confirmation and
       consummation thereof; and

    e) perform all other legal services for the Debtor as
       debtor-in-possession which may be necessary herein.

To the best of the Debtor's knowledge, the firm is "disinterested"
as that term is defined in Section 101(14) of the Bankruptcy Code.

Frank B. Wilensky, Esq., leads the engagement.  Mr. Wilensky
doesn't indicate the hourly rates lawyers at his firm bill for
their services.

Headquartered in Buford, Georgia, Advanced X-Ray --
http://www.advancedx-ray.com/-- offers a full line of X-ray  
systems, enclosures, and material handling systems to provide a
complete, integrated inspection solution.  The Company filed for
chapter 11 protection on July 13, 2004 (Bankr. N.D. Ga. Case No.
04-71349).  When the Company filed for protection from its
creditors, it listed less than $1 million in total assets, and
more than $1 million in total debts.


ALION SCIENCE: Closes $180 Million Term B Senior Credit Facility
----------------------------------------------------------------
Alion Science and Technology Corporation closed on a Term B senior
credit facility that will provide up to $180 million of financing
for Alion.  Credit Suisse First Boston acted as the lead
administrative agent in connection with the financing, and LaSalle
Bank National Association, the administrative agent of Alion's
initial senior credit facility, participated in the syndication of
the CSFB Term B senior credit facility.

The CSFB financing provides Alion a term loan for up to
$100 million.  Alion drew $50 million of that amount on August 2,
and Alion may draw the remainder over the 60 days following
August 2's closing date.  The CSFB financing also provides Alion
revolving credit up to $30 million and an opportunity to obtain up
to an additional $50 million in term loans, subject to certain
conditions.  Alion used the proceeds of the CSFB financing to
retire Alion's previous senior credit facility administered by
LaSalle.  Alion intends to use future draws under the CSFB
financing to pay down certain of its other existing debt
obligations with funds obtained at lower interest rates.  The CSFB
financing will also provide Alion additional funds for future
acquisitions.

Bahman Atefi, Alion's Chairman and CEO, stated that the financing
provides further growth opportunities for the company.  "Alion has
enjoyed successful growth since becoming an employee-owned company
in 2002.  This financing, coupled with the confidence that the
market has placed in us as a research and technology firm, will
help us pursue new opportunities through both organic growth and
acquisitions," Dr. Atefi said.  "We firmly appreciate the support
of such a prestigious financial institution as CSFB."

Dr. Atefi thanked the Alion Board, in particular Board Member
Leslie Armitage of The Carlyle Group, for their invaluable
assistance in connection with the transaction.  He referred to
Alion's Board of Directors as vital to the success of the company
through their guidance and ability to bring together essential
resources.  Jack Hughes, Alion's CFO and Treasurer, added that the
commitment of Alion's employee-owners has been the cornerstone of
the company's growth.

                          About Alion

Alion Science and Technology is an employee-owned research and
development company providing technology services to the
Department of Defense, other government agencies, and commercial
customers.  Building on 68 years of experience, Alion employee-
owners provide expertise in defense operations; modeling and
simulation; information technology; wireless communication;
industrial technology solutions; chemical, biological and
explosive science; and nuclear engineering.  Based in McLean,
Virginia, Alion has more than 1,800 employees at major offices,
customer sites and laboratories worldwide.  For financial
information about Alion, call 703.918.4480 or visit Alion online
at http://www.alionscience.com/

                         *     *     *

As reported in the Troubled Company Reporter, July 6, 2004
edition, Standard & Poor's Ratings Services assigned its 'B+'
corporate credit rating to McLean, Virginia-based Alion Science
and Technology Corp. At the same time, Standard & Poor's assigned
its 'B+' senior secured debt rating, with a recovery rating of
'3', to Alion's proposed $130 million senior secured bank
facility, which will consist of a $30 million revolving credit
facility and a $100 million term loan, both due 2009.

The 'B+' rating is the same as the corporate credit rating and the
'3' recovery rating indicates that the senior secured debt holders
can expect meaningful (50%-80%) recovery of principal in the event
of a default. The proceeds from this facility will be used to
refinance the majority of Alion's existing debt, fund modest
acquisitions, and cover expenses associated with the transaction.
The outlook is stable.

"The ratings reflect Alion's relatively modest position
(approximately $300 million in revenue) in the highly competitive
and consolidating government IT services market, an acquisitive
growth strategy, and high financial leverage," said Standard &
Poor's credit analyst Ben Bubeck.  A predictable revenue stream
based upon a strong backlog and the expectation that government
related business will remain solid over the intermediate term are
partial offsets to these factors.


AMC ENT: New Marquee Securities Get S&P's Low-B & Junk Ratings
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on AMC
Entertainment Inc. to stable from positive, based on the increased
leverage that will result from the pending sale and
recapitalization of the company.

At the same time, Standard & Poor's affirmed its ratings,
including its 'B' corporate credit rating, on the company. In
addition, Standard & Poor's assigned its 'B' corporate credit
rating to Marquee Holdings Inc. and its subsidiary Marquee Inc.
Upon completion of the sale of AMC, Marquee Inc. will be merged
with AMC.  All of these companies are analyzed on a consolidated
basis.

In addition, Standard & Poor's assigned 'B-' ratings to Marquee
Inc.'s proposed $150 million in senior unsecured notes due 2012
and its proposed $305 million in senior unsecured floating rate
notes due 2011, and a 'CCC+' rating to Marquee Holdings' proposed
$170 million senior discount notes due 2014 (HoldCo notes).  The
senior unsecured notes will be supported by operating subsidiary
guarantees and are rated one notch below the corporate credit
rating due to the proportion of higher priority secured debt.  The
HoldCo notes are rated two notches below the corporate credit
rating because they will be structurally subordinate to AMC's
existing and proposed debt.

Proceeds from the new debt issues, about $335 million in existing
cash, the rollover of about $750 million in existing debt and
capital leases, and a $785 million cash equity contribution will
be used to fund the purchase of the Kansas City, Missouri-based
movie exhibitor by funds controlled by J.P. Morgan Partners and
Apollo Management LP.  Pro forma as of July 1, 2004, AMC will have
about $3.6 billion in consolidated lease-adjusted debt.

"The ratings on AMC reflect its financial risk from its heavy
reliance on expensive lease financing which results in high lease-
adjusted leverage and fixed costs, its weak EBITDA margins, and
its exposure to the mature and competitive U.S. motion picture
exhibition industry," said Standard & Poor's credit analyst Steve
Wilkinson.  "The ratings also reflect AMC's modern theater
circuit, positive discretionary cash flow, and more stable market
conditions over the past few years."

AMC Entertainment -- http://www.amctheatres.com/-- is the largest  
movie exhibitor in the U.S. based on revenue and the second-
largest based on screen count. It has one of the industry's most
modern theater circuits due to its rapid expansion and consistent
disposition activity since 1995.


AMERIDEBT: Taps Winthrop & Weinstine as Minn. Litigation Counsel
----------------------------------------------------------------
AmeriDebt, Inc., asks the U.S. Bankruptcy Court for the District
of Maryland for permission to employ Winthrop & Weinstine, P.A.,
as its Special Litigation Counsel.

When AmeriDebt filed for chapter 11 protection, it faced numerous
lawsuits pending in various courts.  One of those is in an action
styled State of Minnesota, by its Attorney General, Mike Hatch vs.
AmeriDebt, Inc., et al., Case No. MC 03-01838 (District Court for
Hennepin County, Minnesota).  The Minnesota Attorney General
believes the automatic stay in AmeriDebt's bankruptcy case does
not stay this lawsuit.  

Winthrop & Weinstine, a full-service Minneapolis, Minnesota-based
law firm, represented AmeriDebt in the lawsuit prior to the
Company's bankruptcy filing.  AmeriDebt wants Winthrop & Weinstine
to continue that representation in Minnesota State Court because
of the firm's competent representation before the Petition Date.  

Winthrop & Weinstine will charge AmeriDebt its normal hourly
rates:

      Designation                        Hourly Billing Rate
      -----------                        -------------------
      shareholders and senior attorneys     $260 to $425
      associates                            $160 to $240
      paralegals                            $130 to $170

Robert R. Weinstine, Esq., leads the team of lawyers in this
engagement, and he bills $425 per hour.

Headquartered in Germantown, Maryland, AmeriDebt, Inc. --
http://ameridebt.org/-- is a credit counseling company.  The  
Company filed for chapter 11 protection on June 5, 2004 (Bankr.
Md. Case No. 04-23649).  Stephen W. Nichols, Esq., at Deckelbaum
Ogens & Raftery, Chartered, represents the Debtor in its
restructuring efforts.  When the Company filed for protection from
its creditors, it listed $8,387,748 in total assets and
$12,362,695 in total debts.


AMERIDEBT INC: U.S. Trustee Wants a Chapter 11 Trustee Appointed
----------------------------------------------------------------
W. Clarkson McDow, Jr., the United States Trustee for Region 4,
asks the U.S. Bankruptcy Court for the District of Maryland to
appoint a Chapter 11 Trustee in AmeriDebt, Inc.'s case pursuant to
11 U.S.C. Sec. 1104(a).

Ameridebt was founded in 1996 as a non-profit credit counseling
agency.  AmeriDebt solicited consumers with debt management
problems and negotiated with creditors to restructure repayment of
consumers' debts under debt management plans.  

On June 1, 2003, AmeriDebt entered into a "Fulfillment Agreement"
with The Ballenger Group, LLC, a for-profit corporation.  Under
the agreement, Ameridebt relinquished all control of its
operations to Ballenger.  

On February 5, 2003, the Attorney General for the State of
Illinois filed a complaint against AmeriDebt, charging the Company
with:
    
    a. failing to clearly and conspicuously disclose its fees
       and charges;

    b. failing to clearly and conspicuously disclose to
       consumers that their first payment under AmeriDebt's Debt
       Management Plans is kept by AmeriDebt and not disbursed
       to the consumers' creditors;

    c. representing that AmeriDebt's debt management program
       will assist consumers in bringing accounts to a current
       status when, in fact, AmeriDebt does not make timely
       payments to consumers' creditors resulting in consumers
       incurring significant late and over-limit fees;

    d. representing that consumers' payments to AmeriDebt are
       "voluntary contributions" when in fact the payments are
       mandatory fees charged by AmeriDebt;

    e. failing to deliver debt management plan services as
       advertised and represented;

    f. representing that AmeriDebt is a not-for-profit
       organization when in fact the debt management work is
       done by a for-profit entity;

    g. failing to disclose to Illinois consumers that AmeriDebt
       is not licensed to conduct debt management services
       within Illinois;

    h. failing to disclose that initial fees charged by
       AmeriDebt are greatly in excess of the $50 maximum
       amount allowed to be charged in Illinois;

    i. failing to disclose that the monthly fees charged by
       AmeriDebt are in excess of the average maximum amount
       allowed to be charged under Illinois law.

Similar cases alleging misrepresentation and deception were filed
in Missouri, Texas and Minnesota.  

In Minnesota, the Attorney General alleges that AmeriDebt is
conniving with Infinity Resources Group, Inc., which was solely
operated by a convicted felon, Andris Pukke, who is also believed
to hold 49% of shares of Ballenger Group Holding, LLC, parent of
The Ballenger Group, LLC.

In the States of Missouri and Texas, other names cropped up,
including Andris' brother, Eriks, and Debtworks, Inc., the
predecessor of The Ballenger Group.

Four additional actions, including two class actions, have been
brought against AmeriDebt in Arkansas, California, Illinois and
Alabama.

A report in March 2004 from the Permanent Subcommittee on
Investigations of the United States Senate Committee on
Governmental Affairs disclosed that AmeriDebt was formed by Pamela
Pukke, wife of Andris, under the name Consumer Counseling
Services, Inc.  Andris was also the president of the company from
1997 to 1998.  In 1999, Andris formed DebtWorks, Inc., to handle
Debt Management Programs for Ameridebt.  Ten other credit
counseling agencies became clients of Debtworks and were founded
by people who are either connected to Pukke or AmeriDebt.  In
2002, The Ballenger Group took the place of DebtWorks.

During the initial Debtor interview with the U.S. Trustee's
office, AmeriDebt representatives were to explain what revenues
were at any given point in time.  The Company is said to be funded
by trust accounts but tracing deposits from the trust accounts to
the operating account is impossible.  AmeriDebt representatives
were also unable to explain where the consumers' original signed
debt management plans were maintained and could only explain that
these agreements were sent to Ballenger.

The Office of the U.S. Trustee believes there's ample cause to
warrant appointment of a chapter 11 trustee in AmeriDebt's case.  
The U.S. Trustee tells the Bankruptcy Court that:

    a) Management has abdicated total control to Ballenger;

    b) Management is guilty of gross mismanagement; and

    c) Management may be violating State laws.

The United States Department of Justice, the State of Texas and
the Federal Trade Commission join the U.S. Trustee's pitch for a
Chapter 11 Trustee.

Headquartered in Germantown, Maryland, AmeriDebt, Inc. --
http://ameridebt.org/-- is a credit counseling company.  The  
Company filed for chapter 11 protection on June 5, 2004 (Bankr.
Md. Case No. 04-23649).  Stephen W. Nichols, Esq., at Deckelbaum
Ogens & Raftery, Chartered, represents the Debtor in its
restructuring efforts.  When the Company filed for protection from
its creditors, it listed $8,387,748 in total assets and
$12,362,695 in total debts.


ARCH COAL: Rising Costs Prompt S&P's BB Corporate Credit Rating
---------------------------------------------------------------
Standard & Poor's Rating Services lowered its corporate credit
rating on Arch Coal Inc., the third-largest coal producer in the
U.S., to 'BB' from 'BB+'.

At the same time, Standard & Poor's also lowered its senior
secured revolving credit facility rating to 'BB-' from 'BB', its
preferred stock rating to 'B' from 'B+', and its senior secured
note rating on Arch's subsidiary, Arch Western Finance LLC, to
'BB' from 'BB+'.  The outlook is stable.  Total outstanding debt
as of June 30, 2004 was $700 million.

"The downgrade reflects expectations that rising costs at the
company's eastern mining operations and higher capital
expenditures required to maintain production levels will offset
the benefit of increased coal prices, resulting in negative free
cash flow in 2004 and 2005 significantly below prior
expectations," said Standard & Poor's credit analyst Dominick
D'Ascoli.

The ratings on St. Louis, Missouri-based Arch Coal reflect strong
coal markets, the company's diversified base of coal reserves, its
high percentage of low-sulfur coal deposits, offset by difficult
operating conditions in the east, and an aggressive financial
profile.

Arch's operating performance has been weak over the past year
because of high operating costs at its eastern operation, which
accounts for about 25% of production.  Average realized sales
price per ton at its eastern operations increased 22% to $36.21 in
the second quarter of 2004, from $29.66 a year earlier.  By
comparison, average total costs per ton rose 16% to $33.29 from
$28.62.  In general, eastern operating costs have risen because of
the difficult operating environment in Central Appalachia.
Standard & Poor's believes the trend of increasing eastern
operating costs will continue.

With about 100 million tons of coal produced during 2003, Arch is
one of the top three U.S. coal producers, accounting for
approximately 10% of U.S. coal production.  The company operates
numerous mines in the eastern and western coal producing regions
of the U.S.


AT&T CORPORATION: S&P Lowers Ratings to Non-Investment-Grade Level
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit and senior unsecured debt ratings on AT&T Corp. to 'BB+'
from 'BBB'.  In addition, the short-term rating was lowered to 'B'
from 'A-3'.  The ratings were removed from CreditWatch, where they
were placed with negative implications on April 28, 2004, due to
(1) continued weakening in the company's business risk profile as
reflected in first-quarter 2004 results and (2) the potential for
steeper revenue declines and compressing operating margins.  The
outlook is negative.

As of June 30, 2004, total debt outstanding was approximately
$11.2 billion, unadjusted for operating leases and other
postretirement employee benefits(OPEBs), or about $7.9 billion net
of cash, restricted cash, and foreign currency fluctuation.

"The ratings downgrade reflects the company's continued
challenging business risk profile due to the telecom industry's
transformation and the resultant long-term impact on the company's
financial profile," explained Standard & Poor's credit analyst
Rosemarie Kalinowski.  "We anticipate that competition will
intensify from other large long-distance carriers, the regional
Bell operating companies (RBOCs), and cable TV companies in the
near-to-intermediate term, further affecting AT&T's weak operating
margins."  These factors are mitigated somewhat in the short term
by AT&T's solid balance sheet and liquidity position.

Competitive pricing pressures, wireless substitution, and more
conservative capital spending by corporate customers have led to
AT&T's more challenging business risk environment.  The company's
operating efficiency, measured by its operating margin, has
demonstrated the effects of these challenges despite cost-
reduction initiatives.  The consolidated operating margin in the
second quarter of 2004 was 4.6%, below the 11.7% level for the
second quarter of 2003.

Although the rating is dominated by business risk pressure, AT&T
has improved its balance sheet over the past two years via major
asset sales and growth in free cash flow due to staff reductions,
automation of system processes, and other cost-reduction measures.
The company generated discretionary cash flow (after capital
expenditures and dividends) of $1 billion in the first half of
2004 and $4.6 billion in fiscal 2003.  Discretionary free cash
flow is expected to be about $2 billion in 2004 and applied to
debt reduction.


BANKATLANTIC INC: Fitch Affirms Junk and Low-B Ratings
------------------------------------------------------
Fitch affirms the ratings of BankAtlantic Bancorp, Inc., (BBX;
long-term senior 'BB+', short-term senior 'B') and its bank
subsidiary, BankAtlantic FSB.  Furthermore, Fitch withdraws its
subordinated debt rating for BBX due to redemption.  BBX's ratings
reflect the company's solid capital, sound asset quality, and
satisfactory core operating performance.  They also reflect BBX's
concentrated banking franchise, relatively high level of parental
leverage, and volatile revenue generation at its broker/dealer,
Ryan Beck & Co.

Overall, the company's performance has improved due to enhanced
revenue generation at Ryan Beck, which has benefited from its
larger distribution platform and the overall expansion in the
capital markets.  Furthermore, earnings benefited from a one-time
$22.8 million (first-quarter 2004) equity security litigation
settlement gain.  That said, BankAtlantic's earnings, although
satisfactory, continue to be pressured by an elevated cost base,
which has been inflated by the additional expenditures associated
with deposit growth initiatives.  The bank's asset quality remains
sound and is attributable to solid underwriting standards and a
buoyant Florida economy.

BankAtlantic's regulatory capital levels are above 'well
capitalized' as defined by the regulators, augmented by a
considerable level of trust-preferred securities.  The bank's
deposit base has expanded over the past few years, spurred by the
aforementioned deposit growth initiatives, which continue to
reduce the bank's fairly high reliance on nondeposit funding
sources.  Finally, the spin-off of Levitt & Co. levered the
parent's balance sheet to a high, yet manageable level.

   Ratings Affirmed

      BankAtlantic Bancorp, Inc.

         -- Long-term at 'BB+';
         -- Short-term at 'B';
         -- Individual at 'C';
         -- Support at '5';
         -- Rating Outlook Stable.

      BankAtlantic FSB

         -- Long-term deposits at 'BBB-';
         -- Long-term debt at 'BB+';
         -- Short-term deposits at 'F3';
         -- Short-term debt at 'B';
         -- Individual at 'C';
         -- Support at '5';
         -- Rating Outlook Stable.

   Rating Withdrawn

      BankAtlantic Bancorp, Inc

         -- Subordinated debt 'BB'.


CATHOLIC CHURCH: Can Maintain Existing Bank Accounts at Key Bank
----------------------------------------------------------------
Judge Perris authorizes the Archdiocese of Portland in Oregon
Debtor to continue using its Operational Bank Accounts and its
Concentration Account located at Key Bank of Oregon, provided that
the Bank posts a bond or provides collateral as specified in
Section 345 of the Bankruptcy Code in an amount established by the
United States Trustee.  Any costs associated with the provision of
the bond, including the payment of the premium, will be borne by
the Debtor.  The Debtor is not authorized to use the Victory Money
Market Account except upon mutual agreement of Key Bank, the U.S.
Trustee, and the Tort Claimants Committee, or after further Court
order.

A disgruntled creditor brought the question about the propriety of
parking estate funds at Key Bank to Judge Perris because Key Bank
is the Archdiocese's largest commercial creditor.   

The Court directs the Debtor to take all steps necessary to:

   -- have its accounts labeled debtor-in-possession accounts;

   -- issue checks on the accounts with the notation debtor-in-
      possession and the bankruptcy case number;

   -- issue postpetition checks with a significant gap in
      numbering from all prepetition checks; and

   -- issue stop payment orders, to prevent checks issued
      prepetition from being honored by the Bank.

The Debtor's accounting records will clearly separate prepetition  
financial activities from postpetition financial activities.

The Banks at which the Existing Accounts are located will have no  
liability whatsoever, to either the Debtor, the Debtor's estate,  
the payee of any check, the Debtor's employees, or any other  
person or entity, for any claims, damages, causes of action,  
rights or liabilities resulting from the Debtor's continued use  
of the Existing Accounts as a result of any of the Bank's  
unintentional, inadvertent, or negligent failure to dishonor any  
prepetition check written on the Existing Accounts.

Judge Perris authorizes the Debtor's management personnel to  
continue:

   (i) exercising their judgment in the Debtor's day-to-day  
       operations, or

  (ii) making necessary changes in the Debtor's operations,
       including, but not limited to, opening new accounts,
       closing existing accounts, and replacing or modifying any
       checks, business forms, or stationery, so long as the
       provisions regarding any new accounts or checks are
       complied with.

Judge Perris clarifies that the Order does not constitute a  
finding, or in any way establish, that the Existing Accounts, or  
any of the funds in those accounts, or any other accounts, funds,  
or property, are or are not property of the Debtor or the estate.   
The Order also does not constitute a waiver of the rights of the  
Debtor, any creditor, or any other party-on-interest to assert  
that any of the Existing Accounts or the funds in those accounts,  
or any other accounts, funds, investments, or property of any  
nature, whether real or personal, held by the Debtor or by any  
other person, entity, or acquaintance of any kind, are or are not  
property of the Debtor or the estate, and these rights are  
preserved.

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. 3;
Bankruptcy Creditors' Service, Inc., 215/945-7000)    


CCC INFORMATION: Narrow Product Focus Prompts S&P's Low-B Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Chicago, Illinois-based CCC Information Services
Inc.

At the same time, Standard & Poor's assigned its 'B+' senior
secured debt rating, with a recovery rating of '4', to the
company's proposed $208 million senior secured bank facility,
which will consist of a $30 million revolving credit facility (due
2009) and a $178 million term loan (due 2010).  The 'B+' rating on
the senior secured debt is the same as the corporate credit rating
and the '4' recovery rating indicates that the first priority
senior secured debt holders can expect marginal (25%-50%) recovery
of principal in the event of a default.

The proceeds from this facility, along with about $38 million of
cash on hand, will be used to repurchase $210 million in CCC's
common stock.  The outlook is positive.  Pro forma for the
proposed bank facility, CCC had approximately $205 million in
operating lease-adjusted debt as of June 2004.

"The ratings reflect CCC's narrow product focus within a mature
niche marketplace and leveraged balance sheet," said Standard &
Poor's credit facility Ben Bubeck.  "These are only partially
offset by a largely recurring revenue base supported by
intermediate-term customer contracts, high barriers to entry, and
solid operating margins, allowing for modest free operating cash
flow generation."

CCC is the leading provider of software, information and workflow
management systems to support activities within the automotive
claims process, serving over 350 insurance carriers and 21,000
auto body shops.

A fairly stable cash flow base, supported by intermediate-term
customer contracts and limited capital expenditure requirements,
should yield continued generation of modest levels of free
operating cash flow.  Given the cash flow sweep provision of the
credit facility, CCC's debt burden should decline over the next
two years, which should lead to an improved financial profile and
may result in a ratings upgrade over the intermediate term.


CENTENNIAL COMMS: Exercises Option to Purchase AT&T Spectrum
------------------------------------------------------------
Centennial Communications Corp. (Nasdaq: CYCL - News) has
exercised its option to purchase 10 MHz of spectrum from AT&T
Wireless covering an aggregate of approximately 4.1 million
population equivalents (POPs) contiguous to its existing
properties in Michigan and Indiana. The aggregate exercise price
of the spectrum is approximately $19.5 million.

In addition, the Company has entered into a definitive agreement
to sell the Indianapolis and Lafayette, Indiana licenses that it
will acquire from AT&T Wireless to Verizon Wireless for $24
million in cash. Pro forma for these transactions, Centennial will
acquire an incremental approximately 2.2 million POPs and receive
approximately $4.5 million in cash. Both transactions are subject
to customary closing conditions, including regulatory approvals,
and are expected to close before calendar year-end 2004.

Centennial will acquire these licenses:

     BTA      Market                    PCS Block     MHz
     ---      ------                     ---------    ---
     15       Anderson, Ind.*               E         10
     115      Lansing, Mich.*               A3        10
     169      Grand Rapids, Mich.*          A3        10
     204      Indianapolis, Ind.**          F         10
     235      Lafayette, Ind.**             F         10
     309      Muncie, Ind.*                 E         10
     310      Muskegan, Mich.               A3        10
     390      Saginaw-Bay City, Mich.       A3        10

           * Indicates partitioned BTA.
          ** Indicates markets being sold to Verizon Wireless.

A map showing the location of the licenses being acquired and
Centennial's existing footprint is available at:

   http://media.corporate-ir.net/media_files/NSD/CYCL/presentations/map.pdf

The Company anticipates launching the Grand Rapids and Lansing,
Michigan markets with GSM/GPRS technology by the end of calendar
year 2005. These markets represent approximately 1.4 million POPs
and bridge the gap in Centennial's Midwest cluster. There are no
immediate plans to build-out the additional licenses. Centennial
expects that start up adjusted operating income losses and capital
expenditures relating to the new build will be approximately $10
million and $35 million, respectively, over the next two years.

"This measured expansion substantially improves our footprint and
competitive position in our Midwest cluster because many people in
our existing territory travel regularly to Grand Rapids and
Lansing. This new territory is an attractive growth opportunity in
its own right and it enables us to better market our services to
more of our existing footprint," said Michael J. Small, chief
executive officer. "It represents the natural evolution of our
successful efforts to improve our retail margins in a fashion that
positions us for future growth."

                       About Centennial

Centennial is one of the largest independent wireless
telecommunications service providers in the United States and the
Caribbean with approximately 17.3 million Net Pops and
approximately 1,027,500 wireless subscribers. Centennial's U.S.
operations have approximately 6.1 million Net Pops in small cities
and rural areas. Centennial's Caribbean integrated communications
operation owns and operates wireless licenses for approximately
11.2 million Net Pops in Puerto Rico, the Dominican Republic and
the U.S. Virgin Islands, and provides voice, data, video and
Internet services on broadband networks in the region. Welsh,
Carson Anderson & Stowe and an affiliate of the Blackstone Group
are controlling shareholders of Centennial. For more information
regarding Centennial, visit:
   
    * http://www.centennialwireless.com/
    * http://www.centennialpr.com/and  
    * http://www.centennialrd.com/

                           *   *   *

At February 29, 2004, Centennial Communications Corp.'s balance
sheet showed a $575,099,000 stockholder's deficit, compared to a
$579,086,000 stockholder's deficit at May 31, 2003.


CITIZEN COMMS: Expects 6.75% Reset Interest Rate on New Sr. Notes
-----------------------------------------------------------------
Citizens Communications Company (NYSE: CZN) expects the reset
interest rate on its 6.75% Senior Notes due 2006, which comprise a
part of its 6.75% Equity Units will be equal to the minimum rate
of 6.75%.  The interest rate on the Notes is being reset pursuant
to the contractual requirements of the Notes and will be effective
on and after August 17, 2004 assuming a successful remarketing of
the Notes on August 12, 2004.

The securities affected by this announcement are as follows:

   -- 6.75% Senior Notes due 2006 (CUSIP No. 17453BAC5); and

   -- Equity Units (CUSIP No. 17453B200).

Any holder that has sold its Equity Units on or prior to
August 16, 2004 will not be entitled to receive excess proceeds,
if any, from the remarketing, after deducting a remarketing fee to
the remarketing agent.

                           *   *   *

As reported in the Troubled Company Reporter's July 23, 2004
edition, 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."


CORNELL COS: J. Nieser Sits as Interim CFO After Hendrix Resigns
----------------------------------------------------------------
Cornell Companies Inc. (NYSE:CRN) and John Hendrix, executive vice
president and chief financial officer have mutually agreed that
Hendrix will resign as CFO.  Mr. Hendrix joined Cornell in
September 1999 as vice president and chief financial officer, has
served as executive vice president and CFO since June 2003, and
will continue to assist Cornell in a consulting role. The Company
also announced that John Nieser, treasurer, will serve as acting
chief financial officer until the position is filled.

Commenting on the Hendrix announcement, Harry J. Phillips, Jr.,
chairman and chief executive officer, said, "John's service here
at Cornell has been appreciated and on behalf of our board of
directors and employees, I wish to thank him for that service.
John's integrity and hard work have been especially valued. We are
pleased to have the continued benefit of his experience during a
consulting period."

The company is conducting a nationwide search to fill the
position.  Mr. Phillips added, "Our new CFO will be an integral
part of the team that leads Cornell to our next level of growth."

Mr. Nieser joined Cornell in April 2004 as treasurer, will serve
as acting chief financial officer. "John is a very skilled and
talented individual and we are fortunate to be able to rely on him
during this interim period," Mr. Phillips said.

Mr. Nieser, from Sugar Land, Texas, served as senior vice
president, chief financial officer and treasurer of Guardian
Savings and Loan Association and as controller for a number of
organizations including GE Aero Energy Products prior to joining
Cornell Companies. He is a CPA and began his professional career
with Ernst & Young, LLP, where he served last as a senior audit
manager.

                    About the Company

Cornell Companies, Inc. is a leading private provider of  
corrections, treatment and educational services outsourced by  
federal, state and local governmental agencies. Cornell provides a  
diversified portfolio of services for adults and juveniles,  
including incarceration and detention, transition from  
incarceration, drug and alcohol treatment programs, behavioral  
rehabilitation and treatment, and grades 3-12 alternative  
education in an environment of dignity and respect, emphasizing  
community safety and rehabilitation in support of public policy.  
Cornell -- http://www.cornellcompanies.com/-- has 65 facilities   
in 14 states and the District of Columbia and 5 facilities under  
development or construction, including a facility in one  
additional state. Cornell has a total service capacity of 16,644,  
including capacity for 2,726 individuals that will be available  
upon completion of facilities under development or construction.

                         *   *   *

As reported in the Troubled Company Reporter's June 8, 2004,
edition, Standard & Poor's Ratings Services assigned its 'B'  
corporate credit rating to corrections, treatment, and educational  
services provider Cornell Companies Inc.  

At the same time, Standard & Poor's assigned its 'B-' senior  
unsecured debt rating to the company's proposed $110 million  
senior notes due 2012. The ratings are based on preliminary  
offering statements and are subject to review upon final  
documentation.


COVANTA ENERGY: Wants Plan Injunction Lifted to Liquidate 9 Claims
------------------------------------------------------------------
Covanta and its debtor-affiliates' confirmed Second Reorganization
Plan provides that, on the Effective Date, each holder of a claim
or equity interest against a Reorganized Debtor is deemed to have  
forever waived, released and discharged, pursuant to Section 1141  
of the Bankruptcy Code, each of the Reorganized Debtors of and  
from any and all claims, equity interests, rights and liabilities  
that arose prior to the Confirmation Date.  The Second  
Reorganization Plan also provides an injunction, explicitly  
precluding and enjoining, inter alia, all persons holding the  
claims or equity interests against the Reorganized Debtors from  
prosecuting or asserting any discharged claim or equity interest  
against any of the Reorganized Debtors.

In motion papers filed with the Bankruptcy Court, the Reorganized
Debtors ask the Court to modify the Plan Injunction with respect
to nine claims:

   Claimant                           Claim No.         Amount
   --------                           ---------         ------
   Blakely, Christopher & Melinda        4055       $2,112,080
   Brady, Mike & Elizabeth               4072        5,139,000
   Conklin, Kenneth                      4454          120,000
   Cosner, Donald                        4214        2,000,000
   Kaylor, Thomas                        4137        5,000,000
   McCartney, David                      4130           75,000
   Melton, Justin                        4079          250,000
   Vasile, Samuel, et al.                4035          850,000
   Wolfson, Michael, et al.              4165      unspecified

Christine L. Childers, Esq., at Jenner & Block, in Chicago,  
Illinois, relates that the Claims represent unliquidated,  
disputed claims that have been asserted against at least one of  
the Covanta Debtors.  The Covanta Debtors dispute the validity of  
the Claims.

The Covanta Debtors want the Plan Injunction modified so that  
necessary steps may be taken to:

   (i) liquidate the Claims in the forum in which the underlying
       legal proceeding against the Covanta Debtors is pending, or

  (ii) commence litigation if it has not yet been commenced in an
       appropriate alternative forum, provided that:

      (a) the Plan Injunction will be modified solely to liquidate  
          the Claims against the applicable Covanta Debtor, or  
          to permit the Claimant to receive insurance proceeds as  
          may be available to the Claimant with respect to the  
          Claim; and

      (b) the Court will retain jurisdiction over the Claims to  
          resolve any disputes that may arise between the Covanta  
          Debtors and the Claimants regarding the liquidation of       
          the Claims, and the distributions under the Second
          Reorganization Plan on account of the Claims.

The Covanta Debtors further ask the Court to find that:

      (i) nothing will be deemed to limit or otherwise preclude
          the Covanta Debtors' ability to resolve any of the
          Claims by settlement; and

     (ii) to the extent that any of the Claims is resolved
          for a fixed amount, the payment of which comes
          exclusively from insurance, no further order or
          intervention by the Court is required.

The Covanta Debtors reserve the right to:

   * further ask the Court to establish a mediation or
     alternative dispute resolution procedure for the liquidation
     of any of the Claims arising in those forums in which
     mediation or alternative dispute resolution procedures are
     not a mandatory element of the court process; and

   * seek an estimation of the amount of the Claims pursuant
     to Section 502(c) of the Bankruptcy Code.

Any of the Claimants whose claim becomes liquidated by judgment  
or otherwise, will be required to file an application for  
distribution of its liquidated claim within 30 days of that  
liquidation.  The 30 days begin to run after the judgment becomes  
final and non-appealable.  The application filed with the Court  
must be served on:

      -- Jenner & Block, LLP
         One IBM Plaza
         Chicago, Illinois 60611  
         Attention: Vincent E. Lazar, Esq., and
                    Christine L. Childers, Esq.

      -- Cleary, Gottlieb, Steen & Hamilton
         One Liberty Plaza
         New York, New York 10006  
         Attention: Deborah M. Buell, Esq., and
                    James L. Bromley, Esq.

The Covanta Debtors will have 30 days from the date of the filing  
and service of the application for distribution to file an  
objection to the application and serve the objection on the  
Claimant.  If no objection is filed within the time required,  
then the liquidation amount will be treated as an Allowed Claim  
in the Class under the Second Reorganization Plan applicable to  
the Claim, subject to the terms and treatment provided in the  
Second Reorganization Plan.

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


CRESCENT REAL ESTATE: Reports $36.1 Million Half-Year Net Loss
--------------------------------------------------------------
Crescent Real Estate Equities Company (NYSE:CEI) discloses results
for the second quarter 2004.  Funds from operations available to
common shareholders before impairment charges related to real
estate assets - diluted for the three months ended June 30, 2004
was $31.0 million.  These compare to FFO of $36.4 million and
equivalent unit, for the three months ended June 30, 2003.  FFO
for the six months ended June 30, 2004 was $58.6 million and
equivalent unit.  These compare to FFO of $77.9 million and
equivalent unit, for the six months ended June 30, 2003.

Net loss available to common shareholders for the three months
ended June 30, 2004 was ($17.5) million.  This compares to a net
loss of ($6.1) million, for the three months ended June 30, 2003.
Net loss available to common shareholders for the six months ended
June 30, 2004 was ($36.1) million.  This compares to a net loss of
($25.4) million, or for the six months ended June 30, 2003.

Funds from operations is a supplemental non-GAAP financial
measurement used in the real estate industry to measure and
compare the operating performance of real estate companies,
although these companies may calculate funds from operations in
different ways.  Crescent reports FFO before taking into account
impairment charges required by GAAP, which are related to its real
estate assets.  A reconciliation of Crescent's FFO before and
after such impairments to GAAP net income is included in the
Company's financial statements accompanying this press release and
in the "Second Quarter 2004 Supplemental Operating and Financial
Data" located on the Company's website.  FFO should not be
considered an alternative to net income.

According to John C. Goff, Vice Chairman and Chief Executive
Officer, "Our second quarter FFO of $0.27 per share was in line
with our expectations of $0.26 to $0.28 per share.  Although our
markets continue to be challenging, we still see 2004 as a year of
stabilization, and we continue to actively manage and reposition
our portfolio for improving fundamentals.

"Strategically, we are adapting to the current real estate
environment in which many investors are seeking direct real estate
ownership.  We continue to capitalize on this meaningful trend
through joint ventures with institutional partners who seek the
alignment of interests with our equity investments and who value
our management platform.  Additionally, we continue to sell non-
core assets and expand our joint-venture program on our existing
portfolio, as well as on new acquisitions.  In the second quarter
alone, we were successful in selling three office properties
totaling 784,000 square feet that did not meet our long-term
investment criteria.  We are also under contract to acquire a
high-quality Miami office property, The Alhambra, which will be a
future candidate for joint venture."

On July 15, 2004, Crescent announced that its Board of Trust
Managers had declared cash dividends of $0.375 per share for
Common, $0.421875 per share for Series A Convertible Preferred,
and $0.59375 per share for Series B Redeemable Preferred. The
dividends are payable August 13, 2004, to shareholders of record
on July 30, 2004.

                   Business Sector Review

Office Sector (67% of Gross Book Value of Real Estate Assets as of
June 30, 2004)

                       Operating Results

Office property same-store net operating income declined 2.9% for
the three months ended June 30, 2004 from the same period in 2003
for the 26.0 million square feet of office property space owned
during both periods, excluding properties held for sale. Average
occupancy for these same-store properties for the three months
ended June 30, 2004 was 86.1% compared to 85.7% for the same
period in 2003.  Crescent's overall office portfolio, excluding
properties held for sale, was 88.1% leased and 87.0% occupied as
of June 30, 2004.  During the three months ended June 30, 2004 and
2003, Crescent received $5.9 million and $0.9 million,
respectively, of lease termination fees. Crescent's policy is to
exclude lease termination fees from its same-store NOI
calculation.

Office property same-store net operating income declined 3.5% for
the six months ended June 30, 2004 from the same period in 2003
for the 26.0 million square feet of office property space owned
during both periods, excluding properties held for sale. Average
occupancy for these same-store properties for the six months ended
June 30, 2004 was 85.8% compared to 85.7% for the same period in
2003.  During the six months ended June 30, 2004 and 2003,
Crescent received $7.2 million and $3.0 million, respectively, of
lease termination fees.  Crescent's policy is to exclude lease
termination fees from its same-store NOI calculation.

The Company leased 1.0 million net rentable square feet during the
three months ended June 30, 2004, of which 509,000 square feet
were renewed or re-leased.  The weighted average full service
rental rate (which includes expense reimbursements) decreased 9.0%
from the expiring rates for the leases of the renewed or re-leased
space.  All of these leases have commenced or will commence within
the next twelve months.  Tenant improvements related to these
leases were $1.87 per square foot per year and leasing costs were
$1.17 per square foot per year.

The Company leased 2.3 million net rentable square feet during the
six months ended June 30, 2004, of which 1.2 million square feet
were renewed or re-leased.  The weighted average full service
rental rate (which includes expense reimbursements) decreased
13.1% from the expiring rates for the leases of the renewed or re-
leased space.  All of these leases have commenced or will commence
within the next twelve months.  Tenant improvements related to
these leases were $1.77 per square foot per year and leasing costs
were $1.00 per square foot per year.

Denny Alberts, President and Chief Operating Officer, commented,
"We saw a modest rise in our office occupancy which ended the
second quarter at 87.0%, up from 86.4% at the end of the first
quarter, both excluding properties held for sale.  We are still
focused on achieving stabilized occupancy levels over the next 12
to 18 months and, upon stabilization, we expect to begin to see
meaningful pricing power.

"Today, our portfolio expirations continue to be manageable.  At
the beginning of 2004, we had 5.4 million gross square feet of
leases scheduled to expire for the year.  Of that, 90% has been
addressed - 86% by signed leases and 4% by leases in negotiation.
2005 expirations represent approximately 10% of the portfolio, for
which our leasing teams have already made progress."

                          Acquisitions

The pending acquisition of The Alhambra, a 318,000 square-foot
Class A office property located in the Coral Gables submarket in
Miami, is expected to close in August. The office property is
currently 93% leased.

On May 10, 2004, Crescent acquired the remaining office property
within the Hughes Center office complex in Las Vegas for $18.3
million. This 86,000 square-foot office property was not a part of
the original portfolio acquisition, as a third-party joint-venture
partner expressed the desire to exercise its right of first
refusal. However, this exercise option was later declined, at
which time, Crescent agreed to purchase the property.

                         Dispositions

On July 29, 2004, Crescent sold 12404 Park Central, a 239,000
square-foot Class A office property located in the LBJ Freeway
submarket of Dallas.  The sale generated proceeds, net of selling
costs, of approximately $9.3 million, which were used to pay down
property-level secured debt.

On July 2, 2004, Crescent sold 5050 Quorum, a 134,000 square-foot
Class A office property located in the Quorum/Bent Tree submarket
of Dallas.  The sale generated proceeds, net of selling costs, of
approximately $8.9 million, which were used to pay down debt on
the Company's revolving credit facility.  Crescent retained the
management and leasing responsibilities for this property.

On June 29, 2004, Crescent sold Addison Tower, a 146,000 square-
foot Class A office property located in the Quorum/Bent Tree
submarket of Dallas.  The sale generated proceeds, net of selling
costs, of approximately $8.8 million, which were used to pay down
debt on the Company's revolving credit facility.

On June 17, 2004, Crescent sold Ptarmigan Place, a 419,000 square-
foot Class A office property located in the Cherry Creek submarket
southeast of downtown Denver.  The sale generated proceeds, net of
selling costs, of $28.2 million, which were used to pay down
property-level secured debt.

On April 13, 2004, Crescent sold Liberty Plaza, a 219,000 square-
foot Class A office property located in North Dallas. The sale
generated proceeds, net of selling costs, to Crescent of
approximately $10.8 million, which were used to pay down the
Company's revolving credit facility.

                      Other Announcements

On May 17, 2004, Crescent announced that El Paso Corporation plans
to move all personnel from Crescent's Greenway Plaza complex,
located in the Buffalo Speedway submarket of Houston, to El Paso's
existing headquarters in downtown Houston. The move is expected to
be complete by year-end 2004.

As of June 30, 2004, three El Paso subsidiaries leased a combined
total of 912,000 square feet in Greenway Plaza, which, under
current terms, translates into 4.6% of Crescent's total annual
office revenue.  The El Paso subsidiaries are current on their
rental obligations to Crescent, and Crescent's management expects
that they will uphold the terms of their respective leases in
Greenway Plaza, the majority of which expires in 2014.

                      Resort / Hotel Sector
   
          12% of Gross Book Value of Real Estate Assets
                       as of June 30, 2004

                 Destination Resort Properties

Same-store NOI for Crescent's five resort properties declined 26%
for the three months ended June 30, 2004 from the same period in
2003. The average daily rate increased 10% and revenue per
available room increased 3% for the three months ended June 30,
2004, compared to7 the same period in 2003. Weighted average
occupancy was 64% for the three months ended June 30, 2004,
compared to 68% for the three months ended June 30, 2003.

Same-store NOI for Crescent's five resort properties declined 11%
for the six months ended June 30, 2004 from the same period in
2003. The average daily rate increased 7% and revenue per
available room increased 2% for the six months ended June 30,
2004, compared to the same period in 2003. Weighted average
occupancy was 66% for the six months ended June 30, 2004, compared
to 69% for the six months ended June 30, 2003.

The decline in NOI for the three months and six months ended June
30, 2004, as compared to the prior year, is primarily the result
of lower occupancy at Fairmont Sonoma Mission Inn & Spa and
Ventana Inn & Spa due to renovations requiring 43% and 19% of the
resort rooms, respectively, to be out of service for a period of
time. The Sonoma renovation began in November 2003 and was
completed in July, while the Ventana renovation began in April
2004 and will be completed by the end of September 2004.

                  Residential Development Sector
         16% of Gross Book Value of Real Estate Assets
                     as of June 30, 2004

           Upscale Residential Development Properties

Crescent's overall residential investment generated $5.2 million
and $11.3 million in FFO for the three months and six months ended
June 30, 2004, respectively.  This compares to $5.7 million and
$11.0 million in FFO generated for the three months and six months
ended June 30, 2003, respectively.

Temperature-Controlled Logistics Sector (5% of Gross Book Value of
Real Estate Assets as of June 30, 2004)

          Temperature-Controlled Logistics Properties

Crescent's investment in temperature-controlled logistics
properties generated $3.1 million and $8.0 million in FFO for the
three months and six months ended June 30, 2004, respectively.  
This compares to $5.1 million and $12.1 million of FFO generated
for the three months and six months ended June 30, 2003,
respectively.  The decline in FFO is primarily due to an increase
in interest expense associated with the $254 million financing
with Morgan Stanley completed in February 2004 and a decrease in
rental payments as a result of start-up costs incurred by the
tenant in connection with its preparation of warehouse space for
new customer business.

                      Balance Sheet Review

On June 28, 2004, the Company obtained a loan from an affiliate of
Lehman Brothers Holding, Inc. in the amount of $90 million, which
is secured by the Fountain Place(R) office property in downtown
Dallas.  The loan bears interest at LIBOR + 150 basis points and
matures in March 2005.

Subsequently, on June 28, the Company entered into a transaction
with Lehman, allowing Crescent, for tax purposes, to take
advantage of a reverse Section 1031 like-kind exchange, following
the acquisition of the Hughes Center office portfolio in Las
Vegas. Crescent sold its interest, subject to the $90 million
financing mentioned above, in the Fountain Place office property
in Dallas to Crescent FP Investors, L.P., an entity, which is
owned 99.9% by an affiliate of Lehman and 0.1% by Crescent.  The
sale generated net proceeds of approximately $78.2 million.  As
part of the transaction, Lehman has an unconditional right to sell
its interest to Crescent at any time prior to November 30, 2004,
for an agreed upon fair value of $79.9 million.  Because a
contingency exists, the sale is accounted for as a financing
transaction for GAAP purposes.  Therefore, both the asset and
related debt remain on the Company's consolidated balance sheet
until the contingency is satisfied.  Crescent has retained the
management and leasing responsibilities for Fountain Place.

Also, on June 28, the Company paid off the $220 million Deutsche
Bank -- CMBS loan with approximately $168.2 million in proceeds
from the aforementioned loan on Fountain Place and sale of
interest to Lehman and $51.8 million in borrowings from the
Company's revolving credit facility.

                        Earnings Outlook

Crescent addresses earnings guidance in its earnings conference
calls and provides documentation in its quarterly supplemental
operating and financial data reports. Refer to the following
paragraphs for details about accessing today's conference call,
presentation, and supplemental operating and financial data
report.

            Changes In Statistical Reporting Methods

Beginning in the first quarter of 2004, the Company implemented
two changes in office segment statistical reporting methods.
First, to more appropriately reflect occupancy trends in
continuing operations, the Company now excludes properties held
for sale from occupancy and same-store statistics as noted. In
addition, the Company's same-store statistics now include 100% of
operations for all consolidated and unconsolidated joint-venture
properties, rather than the Company's pro rata share of joint-
venture properties as in previous disclosures.

In addition, beginning in the second quarter of 2004, the Company
is no longer providing same-store statistics for its business-
class hotel properties. Out of four hotels owned, two are now
categorized as properties held for sale; therefore, same-store
statistics for continuing operations are no longer considered
useful.

             Supplemental Operating And Financial Data

Crescent's "Second Quarter Supplemental Operating and Financial
Data" is available on the Company's Website (www.crescent.com) on
the Investor Relations page. To request a hard copy, please call
the Company's investor relations department at (817) 321-2180.

                        About the Company

Celebrating its tenth year, Crescent Real Estate Equities Company
(NYSE:CEI) is one of the largest publicly held real estate
investment trusts in the nation.  Through its subsidiaries and
joint ventures, Crescent owns and manages a portfolio of 75
premier office buildings totaling 30 million square feet primarily
located in the Southwestern United States, with major
concentrations in Dallas, Houston, Austin, Denver, Miami and Las
Vegas.  In addition, Crescent has investments in world-class
resorts and spas and upscale residential developments.  For more
information, visit the Company's website at
http://www.crescent.com/  
                
                         *     *     *

As reported in the Troubled Company Reporter's July 2, 2004,   
edition, Standard & Poor's Ratings Services lowered its corporate   
credit ratings on Crescent Real Estate Equities Co. and its   
operating partnership, Crescent Real Estate Equities L.P., to   
'BB-' from 'BB'.  In addition, the rating on the company's senior   
unsecured notes is lowered to 'B' from 'B+', and the rating on the
company's preferred stock is lowered to 'B-' from 'B'. The outlook
is revised to stable from negative.  
  
"The lowered ratings reflect office market conditions that remain
persistently weak, pressuring Crescent's highly concentrated
portfolio," said Standard & Poor's credit analyst Elizabeth
Campbell. "They also reflect tenant concentration concerns, an
aggressive financial profile with weak coverage measures, limited
financial flexibility, and a high dividend payout ratio."


CROMPTON CORP: Prices $600 Million Offering of 9-7/8% Senior Notes
------------------------------------------------------------------
Crompton Corporation (NYSE:CK) priced its previously announced
private offering of $600 million aggregate principal amount of
senior notes.

The new senior notes are a combination of:

     -- $375 million of 9-7/8% Senior Notes due 2012
        (with a yield to maturity of 10.0%), and

     -- $225 million of Libor plus 5.75% Senior Floating
        Rate Notes due 2010 (interest rate reset quarterly).

Closing of the senior notes offering is expected to occur Aug. 16,
2004, and is subject to customary closing conditions, and the
Company entering into new credit facilities in a minimum principal
amount of $200 million, the three year extension of the Company's
domestic accounts receivable program, and the consummation of the
Company's tender offer for any and all of its outstanding 8.50%
Senior Notes due 2005 and 6.125% Senior Notes due 2006.

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

                           *   *   *

As reported in the Troubled Company Reporter's July 23, 2004,
edition, 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.


DII/KBR: Halliburton Names Andrew Lane as KBR President & CEO
-------------------------------------------------------------
Halliburton (NYSE: HAL) named Andrew (Andy) Lane, 45, president
and chief executive officer of KBR, the engineering and
construction subsidiary of Halliburton.  Mr. Lane will succeed
Randy Harl, 53, who will assume the role of chairman of KBR.

"Randy has led KBR through a period of tremendous growth and
has established strategies that will better position KBR for the
future," said Dave Lesar, chairman, president and chief executive
officer, Halliburton.  "Andy has done an outstanding job of
managing our regional organization and the Landmark division and
I have great confidence that the direction he will provide will
continue to position KBR as one of the leading engineering and
construction companies in the world."

Prior to his appointment, Mr. Lane, a more than 20-year industry
veteran, was senior vice president of Halliburton's Energy
Services Group's regional organization, after serving as
president and CEO of Landmark Graphics since 2002.  Until then,
he held a number of management, director and vice presidential
positions, all of which were focused on Halliburton's global well
completions and production enhancement.  From 1999 to 2000, Mr.
Lane held the position of global vice president for Production
Enhancement, the Energy Services Group's largest product service
line.  Mr. Lane joined Halliburton in 1984 as a design engineer,
specializing in well completion products.

"I'm excited to work with the engineering and construction
unit to continue building the company's global operations while
improving its financial performance," said Andy Lane, president
and chief executive officer, KBR.

Mr. Lane's career in the oil and gas industry began as a field
engineer for Gulf Oil.  He holds a bachelor's degree in mechanical
engineering from Southern Methodist University.  Mr. Lane is a
registered professional mechanical engineer in the state of Texas
and a member of the Society of Petroleum Engineers and the Society
of Exploration Geophysicists.  He recently joined the executive
board of Southern Methodist University's School of Engineering.

                           *     *     *

In a regulatory filing with the Securities and Exchange
Commission, Mr. Lane discloses that he acquired 20,000 shares of
Halliburton Company common stock.  The shares were awarded
pursuant to the Halliburton Company Stock and Incentive Plan.
The Plan provides for the surrender of common stock to the
Company to satisfy withholding tax obligations.  On July 23,
2004, the closing price of Halliburton Company Common Stock on
the New York Stock Exchange was $30.55 per share.

Mr. Lane now beneficially owns 56,706 shares of Halliburton
Company common stock.

Mr. Lane also beneficially owns options to buy common stock:

    Exercise      Date       Expiration    Number
     Price     Exercisable      Date      of Shares
    --------   -----------   ----------   ---------
    $44.9375   06/02/1998    06/02/2008      2,000
     20.0625   02/17/1999    02/17/2009      4,500
     39.5000   12/02/1999    12/02/2009      9,000
     34.7500   12/06/2000    12/06/2010     10,500
     31.5500   07/19/2001    07/19/2011      5,175
     28.8600   03/16/2004    03/16/2014      8,020

Headquartered in Houston, Texas, Kellogg, Brown & Root is engaged
in the engineering and construction business, providing a wide
range of services to energy and industrial customers and
government entities in over 100 countries. DII has no business
operations.  The Company filed for chapter 11 protection on
December 16, 2003 (Bankr. W.D. Pa. Case No. 02-12152). Jeffrey N.
Rich, Esq., Michael G. Zanic, Esq., and Eric T. Moser, Esq., at
Kirkpatrick & Lockhart LLP, represent the Debtors in their
restructuring efforts.  (DII & KBR Bankruptcy News, Issue No. 17;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


DOMAN IND: Trading Under Western Forest WEF Symbol on TSX Begins
----------------------------------------------------------------
Doman Industries' (n/k/a Western Forest Products, Inc.) common
shares commenced trading on August 3, 2004, on the Toronto Stock
Exchange under the symbol WEF.

                      About Western Forest

Western Forest is an integrated Canadian forest products company
and the second largest coastal woodland operator in British
Columbia.  It is the successor business to Doman Industries
Limited.  Principal activities conducted by Western Forest and its
subsidiaries include timber harvesting, reforestation, sawmilling
logs into lumber and wood chips, value-added remanufacturing and
producing NBSK pulp.  All of Western Forest's operations,
employees and corporate facilities are located in the coastal
region of British Columbia and its products are sold in 30
countries worldwide.  This press release contains statements that
are forward-looking in nature.  Such statements involve known and
unknown risks and uncertainties that may cause the actual results
of Doman or Western Forest to be materially different from those
expressed or implied by those forward-looking statements. Such
risks and uncertainties include, among others: general economic
and business conditions, product selling prices, raw material and
operating costs, changes in foreign-currency exchange rates and
other factors referenced herein and in Doman's annual information
form and annual report.

                          About Doman

Following implementation of the Plan, Doman will no longer carry  
on any active business or hold any material assets.

                         *     *     *

As reported in the Troubled Company Reporter, July 29, 2004,
edition, Doman Industries Limited and Western Forest Products Inc.
reported that, in connection with the Plan of Compromise and
Arrangement in respect of Doman and certain of its subsidiaries
under the Companies' Creditors Arrangement Act, the transactions  
contemplated by the Plan were completed on July 27, 2004 and the
Plan was implemented.  The stay of proceedings under the CCAA was  
lifted on July 28, 2004, at 11:59 p.m.

Under the Plan, Western Forest became the successor business to  
Doman.  A total of 25,635,931 Common Shares of Western Forest and  
US$221 million principal amount of Secured Bonds of Western Forest  
(issued at a price of US$950 per US$1,000 principal amount) were  
distributed under the Plan to former creditors of Doman and  
certain standby purchasers.  A total of 19,226,931  
Common Shares were distributed to the group of former unsecured  
noteholders and trade creditors of Doman and certain of its  
subsidiaries.  A total of 2,890,053 Common Shares and  
US$99,657,000 principal amount of Secured Bonds were issued upon  
the exercise of Class A and B Warrants of Western Forest  
distributed by Western Forest on June 29, 2004 to that group.
As noted in Doman's press release issued on July 19, 2004, in  
excess of 90% of the Class A and B Warrants were exercised.  
Certain standby purchasers were required under a standby  
commitment to subscribe for and take up the Common Shares and  
Secured Bonds not acquired pursuant to the exercise of the Class A  
and B Warrants.  A total of 3,518,947 Common Shares and  
US$121,343,000 principal amount of Secured Bonds were issued to  
the standby purchasers pursuant to that commitment and a  
concurrent private placement.

The proceeds received from the exercise of the warrants, the  
standby commitment and the private placement were used by Doman  
primarily to repay US$160,000,000 of 12% series A and series B  
secured notes and related costs and to fund its CCAA exist costs.

The Plan did not provide for any distributions to Doman  
shareholders other than Class C Warrants of Western Forest.  
Certificates for the Class C Warrant are expected to be mailed to  
Doman shareholders shortly, although due to the requirement to  
round down all fractional Class C Warrants Doman shareholders  
holding fewer than 67 shares will not receive any Class C  
Warrants.  Each Class C Warrant entitles the holder to purchase  
one common share of Western Forest, is non-transferable and has a  
five-year term, subject to certain early termination provisions.  
The Class C Warrants will not be listed.  The holders of Class A  
and B Shares of Doman are entitled to receive on a pro rata basis,  
in the aggregate, 45% of the Class C Warrants.  The holders of the  
Class A Preferred Shares of Doman are entitled to receive on a pro  
rata basis, in the aggregate, 55% of the Class C Warrants.  The  
Class C Warrants are to be issued effective today in three  
tranches exercisable for an aggregate of up to 569,630, 854,446  
and 1,424,076 Common Shares at exercise prices of Cdn$16.28,  
Cdn$26.03 and Cdn$33.83.

Western Forest has adopted an incentive stock option plan for its  
directors, officers, employees and consultants and has reserved  
2,500,000 Common Shares for issuance thereunder.

Finally, Western Forest and certain of its post-Plan
implementation subsidiaries entered into a credit agreement with
CIT Business Credit Canada, Inc.  That credit pact provides
CDN$100 million of working capital to Western Forest to replace an
existing working capital facility between CIT and Doman.


DPL INC: S&P Maintains BB- Corporate Credit Ratings on CreditWatch
------------------------------------------------------------------
Standard & Poor's Ratings Services's 'BB-' corporate credit
ratings on utility holding company DPL Inc. and its utility
subsidiary, Dayton Power & Light Co. (DP&L), remain on CreditWatch
with negative implications.

This CreditWatch update follows DPL's announcement that it was
unable to file its 2003 Form 10-K by July 31, 2004 and that it can
not provide a firm date for the filing of its 2003 Form 10-K and
its Form 10-Q for the first and second quarters of 2004 at this
time.

As a result of the delay in filing the financial statements by
July 31, 2004, and in accordance with the terms on its
$175 million 8% senior notes due 2009, DPL will pay an additional
1% interest on the notes until the Form 10-K is filed, and an
additional 0.5% interest on the notes until a registration
statement relating to the notes is filed with the SEC.

DPL and DP&L are based in Dayton, Ohio. The company has about
$2.5 billion of total debt outstanding.

"The further delay and the 1% interest step up on its $175 million
8% notes in and of itself do not have any immediate impact on
DPL's credit quality," said Standard & Poor's credit analyst Brian
Janiak.

"However, DPL's continued delay, with no specified firm date on
the filing of its 2003 Form 10-K or 2004 first and second quarter
Forms 10-Q with the SEC, severely heightens our credit concerns,"
continued Mr. Janiak.

Standard & Poor's is particularly concerned about the company's
current liquidity position, its financial and operational strategy
going forward, and the corporate governance policies and
procedures the company plans to implement in order to improve its
overall corporate governance and better protect the interest of
its bond and stakeholders.

Resolution of the CreditWatch listing is dependent on DPL's filing
of its form 2003 10-K and demonstrated performance by the firm's
new management team and board of directors.


EDEN BIOSCIENCE: Receives Delisting Notice from Nasdaq
------------------------------------------------------
Eden Bioscience Corporation (NASDAQ: EDEN) has received a
delisting warning letter from the Nasdaq Stock Market notifying it
that the closing price per share for the Company's common stock
was below the $1.00 minimum bid price for 30 consecutive trading
days and that, as a result, the Company no longer meets Nasdaq's
continued listing criteria. Nasdaq has provided the Company with
180 calendar days, or until January 26, 2005, to regain
compliance. To regain compliance with the minimum bid price
requirement, the closing bid price of the Company's common stock
must remain above $1.00 for a minimum of ten consecutive trading
days. If the Company does not regain compliance by January 26,
2005, and is not eligible for an additional compliance period,
Eden Bioscience's common stock will be delisted from The Nasdaq
National Market. Eden Bioscience management and Board of Directors
are considering various alternatives to address this issue.

                      About Eden Bioscience

Eden Bioscience is a plant technology company focused on
developing, manufacturing and marketing innovative, natural
protein-based products for agriculture. We believe that our
technology and products provide growers with new tools to improve
crop production and plant protection. Our products are based on
naturally occurring proteins called "harpins," which activate a
plant's intrinsic ability to protect itself through growth and
stress-defense responses. These responses enhance overall plant
health, improve plant vigor and stamina, and result in improved
crop quality, yield, and/or shelf life. Our headquarters are at
3830 Monte Villa Parkway, Suite 100, Bothell, WA 98021-7266, 425-
806-7300; http://www.edenbio.com/

                           *   *   *

                      Liquidity Concerns

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

"The Company's operating expenditures have been significant since
its inception. The Company currently anticipates that its
operating expenses will significantly exceed net product sales and
that net losses and working capital requirements will consume a
material amount of its cash resources. If net product sales do not
significantly increase in the near term, the Company will have to
further reduce its operating expenses. The Company's future
capital requirements will depend on the success of its operations.
Management of the Company believes that the balance of its cash
and cash equivalents at March 31, 2004 will be sufficient to meet
its anticipated cash needs for net losses, working capital and
capital expenditures for more than the next 12 months, although
there can be no assurance in that regard.

"In the future, the Company may require additional funds to
support its working capital requirements or for other purposes and
may seek to raise such additional funds through public or private
equity financing or through other sources, such as credit
facilities. The Company may be unable to obtain adequate or
favorable financing at that time or at all. The sale of additional
equity securities could result in dilution to the Company's
shareholders."


ELCOM INTERNATIONAL: Equity Deficit Narrows to $841K at June 30
---------------------------------------------------------------
Elcom International, Inc. (OTC Bulletin Board: ELCO and AIM: ELC
and ELCS), reported its operating results for its second quarter
ended June 30, 2004.

Net sales for the quarter ended June 30, 2004 increased to
$598,000 from $531,000 in the same period of 2003, an increase of
$67,000, or 13%.  Professional services revenue increased
primarily due an increase in implementation activities in the U.K.
related to the Scottish Executive's eProcurement Scotland program.
Licenses and associated fees decreased primarily as a result of
reduced licensing activity in the U.S. in 2004 versus 2003.  The
decrease in licenses and associated fees was more than offset by
the increase in Professional services revenue.

Selling, general and administrative expenses -- SG&A -- for the
quarter ended June 30, 2004 were $1,465,000 compared to $2,457,000
in the 2003 quarter, a decrease of $992,000 or 40%.  Throughout
the first three quarters of 2003, the Company implemented cost
containment measures designed to align its SG&A expenses with
lower than anticipated revenues.  Those measures included
personnel reductions throughout most functional and corporate
areas.  Reductions in personnel resulted in a decrease in
personnel expense in the second quarter of 2004 of approximately
$333,000 when compared to the second quarter of 2003.  In March
2004, the Company began hiring several support services staff in
the U.K. and U.S. in order to service the expanding demand in the
municipal market in the U.K. and in anticipation of the funding of
the Company via the sale of Regulation S Shares.  The remaining
decrease in SG&A from the 2003 quarter to the 2004 quarter is due
largely to a reduction in depreciation and amortization expense,
as various Company assets have been fully depreciated/amortized,
as well as credits negotiated with two service providers which
resulted in one-time credits of  $196,000 in the 2004 quarter.

The Company reported a $1,020,000 operating loss from continuing
operations for the quarter ended June 30, 2004 compared to a loss
of $2,129,000 reported in the comparable quarter of 2003, a
decrease in the reported loss of $1,109,000, or 52%.  This smaller
operating loss from continuing operations in the first quarter of
2004 compared to the 2003 quarter was due to both the reduction in
SG&A and the increase in net sales.

The Company's net loss from continuing operations for the quarter
ended June 30, 2004 was $1,072,000, a decrease of $1,114,000 or
51% from the comparable quarterly loss in 2003 of $2,186,000, as a
result of the factors discussed.

Net sales for the six months ended June 30, 2004 increased to
$2,307,000 from $1,200,000 in the same period of 2003, an increase
of $1,107,000.  Licenses and associated fees increased primarily
due to recording the fourth and final lump sum license payment
from Capgemini UK Plc -- formerly, Cap Gemini Ernst and Young UK
Plc -- of $1,142,000 which was earned upon signing the thirteenth
customer of the eProcurement Scotland program in the first quarter
of 2004 (this license fee is non-recurring).  Professional
services fees increased by $114,000, from $505,000 in 2003 to
$619,000 in 2004, reflecting more implementation work and other
professional services activities than were recorded in the first
six months of 2003.

SG&A for the six months ended June 30, 2004 was $3,138,000
compared to $4,807,000 in the first half of 2003, a decrease of
$1,669,000 or 35%.  Throughout the first three quarters of 2003,
the Company implemented cost containment measures designed to
align its SG&A expenses with lower than anticipated revenues.
Those measures included personnel reductions throughout most
functional and corporate areas.  Reductions in personnel resulted
in a decrease in personnel expense in the first six months of 2004
of approximately $861,000 when compared to the first six months of
2003.  In March 2004, the Company began hiring several support
services staff in the U.K. and U.S. in order to service the
expanding demand in the municipal market in the U.K. and in
anticipation of the funding of the Company via the sale of
Regulation S Shares.  The remaining decrease in SG&A from the
first half of 2003 to the first half of 2004 is due largely to a
reduction in depreciation and amortization expense, as various
Company assets have been fully depreciated/amortized, as well as
credits negotiated with two service providers which resulted in
one-time credits of  $196,000 in the 2004 period.  In the first
half of 2003 the Company's SG&A expenses were reduced by the
reversal of a franchise tax accrual of $506,000, as payment was no
longer deemed probable.

The Company reported an operating loss from continuing operations
of $1,090,000 for the six months ended June 30, 2004 compared to a
loss of $4,063,000 reported in the comparable six months of 2003,
a decrease in the reported loss of 73%, or $2,973,000.  This
smaller operating loss from continuing operations in the first six
months of 2004 compared to the first half of 2003 was due to both
the reduction in SG&A and the increase in license and associated
fees revenue in the first quarter of 2004.

The Company's net loss from continuing operations for the six
months ended June 30, 2004 was $1,245,000, a decrease of
$2,386,000 from the $3,631,000 loss reported in the first half of
2003, as a result of the factors discussed.

Robert J. Crowell, the Company's Chairman and CEO, stated,  "Our
second quarter 2004 earnings do not yet reflect the full
anticipated increase in activity under our agreement with
Capgemini associated with the Scottish Executive, which began late
last year.  Our 2004 six-month results were substantially enhanced
by the recognition of our final lump sum payment from Capgemini
associated with the Scottish Executive.  Elcom's sales pipeline is
still strong but has slowed a bit during the summer months;
however the Company is in the process of responding to several
tender requests and anticipates activity to accelerate after the
summer.   I expect to see more activity with our channel partners
and additional opportunities in the municipal market in the U.K."

At June 30, 2004, stockholders' deficit narrows to $841,000
compared to a $2,778,000 deficit at March 31, 2004.

              Factors Affecting Future Performance

A significant portion of the Company's revenues from continuing
operations in the first quarter of 2004 (approximately $1,142,000
after currency conversions) are from recognition of the final lump
sum license fee from Capgemini related to the eProcurement
Scotland program.  The eProcurement Scotland program is expected
to be an ongoing source of revenues for the Company; however,
because this was the final lump sum payment and is a non-recurring
fee, it is anticipated the Company's revenues from this source
will be lower in the remaining quarters of 2004.

These forward-looking statements involve a number of risks and
uncertainties, which would cause the Company's future results to
differ materially from those anticipated, including:

     (i) the Company's history of ongoing operating losses;

    (ii) the overall marketplace and client's acceptance and usage
         of eCommerce software systems, specifically the Company's
         PECOS eProcurement and eMarketplace systems and demand
         thereof by public sector organizations in the U.K., both
         under the Company's contract with Capgemini plc (U.K.)
         associated with the Scottish Executive and by
         municipalities in England, the impact of competitive
         technologies, products and pricing, particularly given
         the substantially larger size and scale of certain
         competitors and potential competitors, and control of
         expenses, revenue growth, corporate demand for
         eProcurement and eMarketplace solutions;

  (iii) the consequent results of operations given the
        aforementioned factors; and

   (iv) the possibility that the Company's revenues may not reach
        the level necessary to support positive cash flow during
        2005 and if so, the Company's need to raise additional
        working capital to fund operations in the future; and

    (v) the availability and terms of any such funding to the
        Company, if available, and other risks detailed from time
        to time in the Company's Annual Report on Form 10-K, as
        amended, filed on May 10, 2004,  in its Forms 10-QSB for
        the first and second quarters of 2004, and its other SEC
        reports and statements.  

Elcom International, Inc. (Nasdaq: ELCO), operates two wholly-
owned subsidiaries: elcom, inc., a leading international provider
of remotely-hosted eProcurement and Private eMarketplace solutions
and Elcom Services Group, Inc., which is managing the transition
of the recent sale of certain of its assets and customer base.
elcom, inc.'s innovative remotely- hosted technology establishes
the next standard of value and enables enterprises of all sizes to
realize the many benefits of eProcurement without the burden of
significant infrastructure investment and ongoing content and
system management. PECOS Internet Procurement Manager, elcom,
inc.'s remotely hosted eProcurement and eMarketplace enabling
platform was the first "live" remotely-hosted eProcurement system
in the world.


ENERSYS: S&P Raises Corporate Credit Rating One Notch to BB
-----------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on industrial battery manufacturer EnerSys (formerly
EnerSys Holdings Inc.) and its EnerSys Capital Inc. unit to 'BB'
from 'BB-'.

At the same time, Standard & Poor's raised its senior secured bank
loan rating on EnerSys Capital's $480 million senior secured
first-lien credit facility to 'BB' and affirmed its recovery
rating of '4'.  The bank facility consists of a $100 million
revolving credit facility due 2009 and a $380 million term loan
due 2011.

All ratings were removed from CreditWatch, where they were placed
on June 2, 2004.  Standard & Poor's also withdrew its rating on
the Reading-Pennsylvania-based company's $120 million senior
second-lien term loan due 2012. The outlook is stable.

"The upgrade reflects Standard & Poor's expectations of a
sustained improvement in the company's debt leverage following the
completion of an initial public offering of 12.5 million shares of
common stock," said Standard & Poor's credit analyst Linli Chee.
The IPO sold at $12.50 per share, yielding net proceeds of roughly
$140 million.

Underwriters also have the option to purchase an additional
1.88 million shares of common stock to cover over-allotments.
Proceeds will be used to prepay the principal on the company's
$120 million senior second-lien term loan due 2012 and to prepay
$17.9 million of its $380 million senior secured term loan B due
2011. As a result, pro forma total debt outstanding (adjusted for
operating leases) at March 31, 2004, will decline to about $393.8
million versus $531.7 million in the prior year.

The ratings also take into account the niche nature of the
industrial battery market, exposure to increasing lead costs and
cyclical end-user markets, and risks associated with the ongoing
ability to use the Exide trademark (representing 12% of net 2004
sales).  These risk factors are partially offset by the company's
leading market share, recognized brand names, expected healthy
intermediate-term demand prospects in several key markets, and
greater access to capital.


ENRON: ECTRIC Demands $3.5 Million Payment from Louis Dreyfus LPG
-----------------------------------------------------------------
Under a transaction agreement, dated June 1, 2001, between Enron
Capital & Trade Resources International Corporation and Louis
Dreyfus LPG Services, Ltd., ECTRIC agreed to sell, and Dreyfus
LPG agreed to buy, propane at a specified price and for a fixed
period of time.  To this end, in November 2001, ECTRIC delivered
propane to Dreyfus LPG and Dreyfus LPG accepted the propane, for
which it owed ECTRIC $3,576,564.

On November 13, 2001, ECTRIC sent an invoice to Dreyfus LPG for
the delivered propane and demanded payment by December 20, 2001.
However, Dreyfus LPG ignored the demand and refused to pay ECTRIC
for the delivered propane.  On August 26, 2003, ECTRIC again sent
a letter to Dreyfus LPG demanding payment for the delivered
propane.  Dreyfus LPG continued to ignore the demand.

Jonathan D. Polkes, Esq., at Cadwalader, Wickersham & Taft, in
New York, reports that Dreyfus LPG has also refused to pay ECTRIC
amounts owed under certain swap agreements.  The Swap Agreements
entered into between ECTRIC and Dreyfus LPG in 2001 were
financial transactions involving a "fixed-for-floating" propane
price swap.

Under the Swap Agreements, if a party's conduct causes an Event
of Default, the non-defaulting party may designate an Early
Termination Date, whereby all outstanding Transactions become
terminated, and one party would have to pay the other an "Early
Termination Payment."  Mr. Polkes explains that the Early
Termination Payment is largely a function of movements in the
market price of the particular commodity during the term of an
underlying Transaction.  Importantly, the Swap Agreements provide
that the Early Termination Payment must be paid to whomever it is
owed, regardless of which party is the Defaulting Party.  This
provision is commonly referred to as a "full two-way payment"
clause.

On January 11, 2002, Dreyfus LPG informed ECTRIC that, as a
result of ECTRIC's alleged refusal to pay Dreyfus LPG some
unspecified amount of money under the Swap Agreements, ECTRIC was
in default and, thus, Dreyfus LPG was designating that date as
the Early Termination Date.  Under the Swap Agreements, Dreyfus
LPG was required to calculate an Early Termination Payment and to
notify ECTRIC of the Early Termination Payment amount and to whom
it was owed. However, Dreyfus LPG failed and refused to comply
with this contractual obligation.

With Dreyfus LPG's failure to calculate an Early Termination
Payment, ECTRIC made its own calculation and determined that
Dreyfus LPG owed ECTRIC an Early Termination Payment in the
amount of at least $1,602,495, plus interest at the applicable
rate.  On August 26, 2003, ECTRIC notified Dreyfus LPG of the
calculation and demanded that Dreyfus LPG pay the Early
Termination Payment.  To date, Dreyfus LPG has failed and refused
to provide the Early Termination Payment to ECTRIC.

Accordingly, ECTRIC asks the Bankruptcy Court for a judgment:

    (a) declaring that Dreyfus LPG has wrongfully exercised
        control over ECTRIC estate's property;

    (b) declaring that Dreyfus LPG breached its contractual
        obligations by failing to pay ECTRIC:

        -- $3,576,564, plus interest, for propane delivered by
           ECTRIC, as required under the clear and express
           terms of a Transaction Agreement; and

        -- $1,602,495, plus interest, as required under the clear
           and express terms of Swap Confirmation Agreements;

    (c) to the extent Dreyfus LPG or any of its affiliates
        attempt to enforce the non-mutual setoff provision found
        within the General Terms and Conditions of Confirmation
        Agreement, which was incorporated by reference in each
        of the Swap Confirmation Agreements, declaring that the
        non-mutual setoff provision is invalid, unenforceable and
        avoidable under Section 553 of the Bankruptcy Code;

    (d) declaring that Dreyfus LPG has violated the automatic
        stay;

    (e) declaring that the choice of forum provision within the
        Swap Agreements should not be enforced; and

    (f) awarding ECTRIC damages due to Dreyfus LPG's failure to
        pay the owed amounts and Dreyfus LPG's unjust enrichment,
        and interest, attorney's fees and other expenses.

                        Broad Ramifications

The Swap Agreements contain a choice of forum provision providing
for all disputes arising from the Swap Agreements to be submitted
to the exclusive jurisdiction of the High Court of Justice,
England.  Despite the existence of this choice of forum
provision, however, it is imperative that the Court resolve the
core bankruptcy issues raised in the Complaint, Mr. Polkes says.

According to Mr. Polkes, the issues to be addressed in the
adversary proceeding are not unique to Dreyfus LPG.  Rather, the
issues will be involved in the adjudication of the claims of
numerous trading counterparties.  The Debtors are parties to
thousands of contracts for the physical delivery of electricity,
power, natural gas and other commodities.  The Debtors are also
parties to thousands of financial contracts that are referenced
to various commodity prices or other indexes.  The substantial
majority of these physical and financial trading contracts
contain choice of forum provisions as well as arbitration
provisions.  In addition, virtually all of these trading
contracts contain netting and setoff provisions, termination
provisions, or provisions related to final settlement payments
upon termination that implicate core bankruptcy issues.  The
counterparties to the various trading contracts owe billions of
dollars in accounts receivable and termination payments to the
Debtors.  Thus, the decision on the core bankruptcy issues
implicated by all those trading agreements will directly affect
the claims of literally hundreds, perhaps thousands, of
creditors.  "Equally important, the decision of these issues will
have dramatic impact on the distribution of assets by the Debtors
to all their creditors," Mr. Polkes notes.

The accounts receivable and settlement or termination payments
represent either the largest or one of the largest remaining
assets of the Debtors' estates.

The success or failure of the reorganization effort and the
extent of the recoveries for all creditors depends on a uniform,
consistent application of the core bankruptcy issues to the
claims.  The significant core bankruptcy issues implicated by the
adjudication of the agreements, many of which will be cases of
first impression, should be resolved by the Bankruptcy Court and
not by different arbitrators or courts in different
jurisdictions, Mr. Polkes assserts.

                        Dreyfus LPG Responds

Bruce Paulsen, Esq., at Seward & Kissel, LLP, in New York,
contends that:

    (1) The Complaint fails to state a claim on which protection
        may be granted;

    (2) The Trade Confirmation and the Swap Agreements require
        that any dispute arising under the Contracts will be
        submitted to the courts of England, which will have
        exclusive jurisdiction over all disputes;

    (3) The Trade Confirmation and the Swap Agreements state that
        the contracts will be governed and construed by, and the
        relations between the parties determined in accordance
        with, the law of England;

    (4) Pursuant to the terms of the Swap Agreements, Dreyfus
        LPG, as the non-defaulting party, at its option and in
        its discretion, is entitled to set off against any
        amounts owed to ECTRIC any amounts payable by ECTRIC to
        Dreyfus LPG under the Swap Agreements or any other
        agreements, instruments and undertakings between the
        parties;

    (5) The Trade Confirmation requires Dreyfus LPG to make
        payments only against presentation of a commercial
        invoice, full set of original clean bills of lading or a
        letter of indemnity.  To date, ECTRIC has failed to
        provide adequate demand;

    (6) Pursuant to the terms of the Swap Agreements, Dreyfus
        LPG, as the non-defaulting party, at its option and in
        its discretion, is entitled to set-off against any
        amounts owed ECTRIC any amounts payable by ECTRIC to LPG
        or any of its affiliates under the Swap Agreements or
        any other agreements, instruments or undertakings between
        ECTRIC and LPG or any of its affiliates.  ECTRIC did not
        include in the Complaint the amounts owed by ECTRIC and
        its affiliates to Dreyfus LPG and its affiliates,
        including but not limited to Enron, ENA, EGLI, LDC,
        CETRAGPA and LDES.  Thus, ECTRIC has failed to name
        indispensable parties to the litigation without which
        complete protection cannot be accorded to Dreyfus LPG;

    (7) By reason of its own acts or omissions, ECTRIC is barred
        from recovering from Dreyfus LPG by one or more of the
        doctrines of waiver, laches, unclean hands or estoppel;

    (8) ECTRIC is barred from recovering from Dreyfus LPG because
        it has made all payments due to ECTRIC;

    (9) ECTRIC cannot recover under a claim for unjust enrichment
        because it has asserted that Dreyfus LPG breached a
        written contract between the parties;

   (10) ECTRIC has repudiated the agreements, and therefore cannot
        recover from Dreyfus LPG under the agreements; and

   (11) ECTRIC's claims are barred by the statute of frauds.

Under the laws of England, Dreyfus LPG is entitled to set off any
amounts owed by ECTRIC or its affiliates to Dreyfus LPG or its
affiliates.  Applying the amounts owed by ECTRIC to Dreyfus
against the amount claimed by ECTRIC in the Complaint results in
a net amount due to Dreyfus.  As stated in the proofs of claim
filed by Louis Dreyfus Corporation, Louis Dreyfus Energy Service,
LP and CETRAGPA, Dreyfus LPG is entitled to set off:

    (a) $1,957,672 owed to LDC by Enron Corporation;

    (b) $1,957,672 owed to LDC by Enron North America Corp.;

    (c) $6,433,551 owed to CETRAGPA by ECTRIC;

    (d) $182,987 owed to LDES by ECTRIC;

    (e) $2,795,015 owed to LDES by Enron Gas Liquids, Inc.;

    (f) $1,045,856 owed to LDES by ENA; and

    (g) $1,045,856 owed to LDES by Enron.

Accordingly, Dreyfus LPG asks the Court to dismiss the Complaint
in its entirety and award it its costs and disbursements. (Enron
Bankruptcy News, Issue No. 119; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


ENRON: Oregon PUC Staff Doesn't Like PGE Sale to Oregon Electric
----------------------------------------------------------------
The Staff of the Oregon Public Utility Commission made its initial
recommendation to the Commission that the sale of Portland General
Electric (PGE), a subsidiary of Enron, to Oregon Electric Utility
Company (OEUC), not be approved.

The OPUC Staff "has concluded that the proposal, as it stands on
July 21, 2004, falls short of demonstrating net benefits for
customers," Bryan Conway, PUC staff case manager said.  "The
Commission is requiring a two-step assessment," focused on whether
the proposed sale will:

   (1) provide a net benefit to the utility's customers, and

   (2) impose 'no harm' to the public at large?"

The OPUC Staff says due to many unanswered questions about
relevant issues, and risks these entail for customers, it has not
been able to fully assess the downside risk to customers of the
transaction.

"We look forward to hearing from OEUC how it intends to
mitigate a number of our concerns as well as those raised by
other parties in this case," Mr. Conway added.

On March 8, 2004, Oregon Electric Utility Company submitted
its application to purchase Portland General Electric.  OEUC
would be a Limited Liability Company of which Texas Pacific
Group, a private equity firm headquartered in Fort Worth, Texas
would provide the bulk of the financial backing.

      Summary of Staff's testimony:

      * At this time, Staff recommends the Commission not approve
        OEUC's application;

      * Meaningful rate credits are the clearest method to offset
        the risks of the transaction;

      * Staff will have a recommendation on how to treat taxes by
        the conclusion of the case;

      * There are concerns regarding OEUC's ability to buy PGE
        without negative financial implications, cost-cutting
        plans, possibility of cross-subsidies and inter-
        jurisdictional cost shifts;

      * There is a potential need for an additional service
        quality measure that tracks issues such as billing
        accuracy; and

      * Staff continues to analyze the proposal.

This is a preliminary recommendation from Staff.  The applicants,
OEUC, will have an opportunity to respond to the initial round of
comments with its rebuttal testimony that is due by Monday, August
16, 2004.  The other parties in the case, along with Staff, will
continue to raise issues and participate in additional discovery
and settlement discussions as the case progresses.

At this time settlement conferences are scheduled for July 21,
July 29, August 23, and September 27, 2004.

A final decision by the Commission is expected by the end of the
year.

PGE serves approximately 741,000 customers in Oregon. (Enron
Bankruptcy News, Issue No. 119; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


FISHERS OF MEN CHRISTIAN: Voluntary Chapter 11 Case Summary
-----------------------------------------------------------
Debtor: Fishers of Men Christian Fellowship Church
        8623 Hemlock Hill Drive
        Houston, Texas 77083

Bankruptcy Case No.: 04-41043

Chapter 11 Petition Date: August 2, 2004

Court: Southern District of Texas (Houston)

Judge: Letitia Z. Clark

Debtor's Counsel: James B. Jameson, Esq.
                  2211 Norfolk, Suite 800
                  Houston, TX 77098-4044
                  Tel: 713-807-1705

Total Assets: $6,900,000

Total Debts:  $5,370,467

The Debtor did not file a list of its 20-largest creditors.


FLEMING COS: Court Nixes 30 Pension Claims Totaling $3.7 Million
----------------------------------------------------------------
In response to claim objections filed by Fleming Companies, Inc.,
Judge Walrath disallows 30 Pension Claims totaling $3,733,290.  

Certain Pension Plan Participants , including:

   Claimant                                        Claim Amount
   --------                                        ------------
   Lloyd R. Lee                                      $60,720.00
   John Martin                                        87,060.00
   Raymond McCall                                    109,000.00
   Llewellyn McIntyre                                185,880.00
   Frank P. Molnar                                    87,000.00
   Sylvester Moser                                    72,085.68
   Edward Moss                                        85,616.91
   Richard F. Schuppler                               48,000.00
   Robert M. Streeter                                152,864.00
   Robert Williams                                    50,157.18
   Theodore Williams                                 215,555.34

filed proofs of claim that assumed a termination of the Debtors'
pension plan and a resulting loss of benefits.  Fleming contested
these contingent Claims and asked Judge Walrath to disallow and
expunge them in their entirety.

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


FOSTER WHEELER: 61% of 6.75% Noteholders Tender in Amended Offer
----------------------------------------------------------------
On July 30, 2004, the Securities and Exchange Commission declared
effective the registration statement for Foster Wheeler's
(OTCBB:FWLRF) amended equity-for-debt exchange offer. Significant
numbers of institutional investors have also agreed to tender
their securities in the amended exchange offer. The company is in
the process of distributing revised offering materials related to
the amended exchange offer, which has been extended through August
30, 2004, subject to further extension.

Institutional investors holding:

    -- 61.0% of the 6.75% Senior Notes due 2005,

    -- 85.0% of the 6.50% Convertible Subordinated Notes due 2007,

    -- 92.6% of the Robbins Series C and D Bonds due 2009, and

    -- 22.2% of the 9.00% Preferred Securities

have agreed to tender their securities in the amended exchange
offer.

As previously announced, assuming the amended exchange offer is
completed as proposed and at the minimum required participation
levels, it would reduce Foster Wheeler's existing debt by
approximately $410 million, extend the maturities on $135 million
of debt to 2011, reduce interest expense by approximately $22
million per year, and, when combined with the sale of new notes to
retire funded bank debt, eliminate substantially all material
scheduled corporate debt maturities prior to 2011.

"This is a significant milestone as we move toward the completion
of our balance sheet restructuring, which we expect to complete in
the third quarter," said Raymond J. Milchovich, chairman,
president and chief executive officer. "We appreciate the hard
work and commitment of the investors who have executed lock-up
agreements, as well as the confidence in Foster Wheeler of those
who will accept equity in the newly capitalized company in
exchange for debt. The completion of the amended exchange as
proposed will improve our financial position and provide important
financial flexibility for all of our operating companies."

The amended exchange offer modifies certain terms and conditions
for the proposed exchange of:

   (i) 6.75% Senior Notes for a combination of equity and new
       senior secured notes due 2011;

  (ii) 6.50% Convertible Subordinated Notes and Robbins Bonds for
       equity; and

(iii) 9.00% Preferred Securities for equity and warrants. The
       completion of the amended exchange offer is subject to,
       among other things, attaining certain minimum participation
       thresholds.

A description of the differences in terms and conditions between
the original and the amended exchange offer is set forth in the
prospectus for the exchange.

A copy of the prospectus relating to these securities and other
related documents may be obtained from the information agent. The
information agent for this exchange offer and consent solicitation
is:

          Georgeson Shareholder Communications Inc.
          17 State Street, 10th Floor
          New York, New York 10014

Georgeson's telephone number for bankers and brokers is
212-440-9800 and for all other security holders is 800-891-3214.

Individuals holding their securities through brokers are urged to
contact their brokers to receive a copy of the prospectus and to
tender their securities.

The dealer manager for the exchange offer and consent solicitation
is:

          Rothschild Inc.
          1251 Avenue of the Americas, 51st Floor
          New York, New York 10020

Contact Rothschild at 212-403-3784 with any questions on the
exchange offer.

As previously announced, Foster Wheeler will pay a soliciting
brokers' fee to registered broker/dealers for soliciting
qualifying tenders of trust preferred securities pursuant to this
exchange offer. This fee will be equal to 50 cents per 9.00%
Preferred Security (liquidation amount $25) which the registered
broker/dealers tender on behalf of their customers and which
Foster Wheeler accepts for exchange, subject to certain
limitations.

Investors and security holders are urged to read the following
documents filed with the SEC, as amended from time to time,
relating to the proposed exchange offer because they contain
important information: (1) the registration statements on Form S-4
(File No. 333-107054 and File No. 333-117244) and (2) the Schedule
TO (File No. 005-79124). These and any other documents relating to
the proposed exchange offer, when they are filed with the SEC, may
be obtained free at the SEC's Web site at http://www.sec.gov/or  
from the information agent as noted above.

The foregoing reference to the exchange offer and any other
related transactions shall not constitute an offer to buy or
exchange securities or constitute the solicitation of an offer to
sell or exchange any securities in Foster Wheeler Ltd. or any of
its subsidiaries.


GRANITE BROADCASTING: Delisted from Nasdaq SmallCap Market
----------------------------------------------------------
Granite Broadcasting Corporation reports that the Company's Common
Stock (Nonvoting) will be delisted from the Nasdaq SmallCap Market
effective with the opening of business today, August 5, 2004.  
Granite's Common Stock (Nonvoting) will be immediately eligible to
trade on the Over the Counter Bulletin Board (OTCBB) effective
with the opening of business today, August 5, 2004 under the
symbol GBTVK.

Granite had been notified by NASDAQ that the Company fails to
comply with the market value of listed shares requirement for
continued listing on the Nasdaq SmallCap Market.  This matter was
addressed at a hearing before a Nasdaq Listing Qualifications
Panel on June 17, 2004, and August 3, 2004, the Panel informed the
company of its decision to delist Granite's Common Stock
(Nonvoting).

The OTCBB is a regulated quotation service that displays real-time
quotes, last-sale prices and volume information for over 3,300
securities.  OTCBB securities are traded by a community of market
makers that enter quotes and trade reports through a computer
network.  Additional information regarding the OTCBB can be found
at http://www.otcbb.com/ Investors should contact their broker  
for more information about executing trades in Granite's Common
Stock (Nonvoting) on the OTCBB.

Granite Broadcasting Corporation (NASDAQ: GBTVK) (S&P, CCC Long-
Term Corporate Credit Rating, Negative) operates eight television
stations in geographically diverse markets reaching over 6% of the
nation's television households. Three stations are affiliated with
the NBC Television Network (NBC), two with the ABC Television
Network (ABC), one with the CBS Television Network (CBS), and two
with the Warner Brothers Television Network (WB). The NBC
affiliates are KSEE-TV, Fresno-Visalia, California, WEEK-TV,
Peoria-Bloomington, Illinois, and KBJR-TV, Duluth, Minnesota and
Superior, Wisconsin. The ABC affiliates are WKBW-TV, Buffalo, New
York, and WPTA-TV, Fort Wayne, Indiana. The CBS affiliate is WTVH-
TV, Syracuse, New York. The WB affiliates are KBWB-TV, San
Francisco-Oakland-San Jose, California, and WDWB- TV, Detroit,
Michigan. On April 23, 2004 Granite announced its intention to
enter into a strategic arrangement with Malara Broadcasting under
which Granite will provide advertising sales, promotion and
administrative services and selected programming to Malara-owned
stations in Fort Wayne, Indiana and Duluth, Minnesota-Superior,
Wisconsin.


INT'L STEEL: Georgetown Facility Begins Wire Rod Production
-----------------------------------------------------------
International Steel Group Inc.'s ISG Georgetown Inc. subsidiary
has begun producing wire rod at its facility in Georgetown, South
Carolina.

ISG acquired the facility in June 2004 from the Georgetown Steel
Company.  The plant has annual steelmaking capacity of 1 million
tons and rolling capacity of 800,000 tons, along with the capacity
to produce 500,000 tons annually of Direct Reduced Iron (DRI), a
scrap substitute. The facility had been idle since Georgetown
Steel filed for Chapter 11 bankruptcy in October 2003.

"We made a commitment to the employees and the community of
Georgetown to resume operations at the facility, and thanks to the
support and hard work of everyone involved, we have done so," said
Rodney B. Mott, ISG's President and Chief Executive Officer.

The Georgetown plant will produce high-quality wire rod products,
which are used to make low-carbon fine wire drawing, wire rope,
tire cord, high-carbon machinery, and upholstery springs.

              About International Steel Group Inc.

International Steel Group Inc. is one of the largest steel
producers in North America. It produces a variety of steel
products including hot-rolled, cold-rolled and coated sheets, tin
mill products, carbon and alloy plates, rail products and semi-
finished shapes to serve the automotive, construction, pipe and
tube, appliance, container and machinery markets. For additional
information on ISG, visit http://www.intlsteel.com/  

                         *     *     *

As reported in the Troubled Company Reporter's April 6, 2004
edition, Standard & Poor's Ratings Services assigned its 'BB'
rating to Richfield, Ohio-based steel manufacturer International
Steel Group Inc.'s (ISG) proposed $600 million senior unsecured
notes due 2014.  Standard & Poor's at the same time affirmed its
'BB' corporate credit rating and 'BB+' senior secured bank loan
rating on the company. The outlook is positive.

The ratings on ISG reflect its leading market position in the
highly cyclical and competitive North American steel industry, its
competitive cost position, and moderate financial policies. ISG
was formed through the acquisitions of bankrupt steel companies
LTV, Acme, and Bethlehem Steel. Unlike some other unionized steel
producers, ISG does not have burdensome legacy costs, or the high
number of employees it had before these acquisitions.  ISG is
expected to fully realize its estimated annual cost savings of
$250 million in 2004, because it has reduced headcount at
Bethlehem by 3,100. These combined savings provide a meaningful
cost advantage compared with competing unionized steel companies
in the U.S. that are facing rising labor and legacy costs. ISG's
management uses a mini-mill strategy, such as establishing
flexible work rules and profit sharing. ISG plans to implement a
similar strategy with Weirton, and already has an agreement for a
new contract with Weirton's unions similar to its existing
contracts, including reducing labor by about one-third, and
establishing more flexible work rules and benefits. Nevertheless,
although some of its costs have become more variable, this remains
a business with a high degree of operating leverage, and requires
the company to operate at high levels of capacity utilization to
remain profitable.


J.P. MORGAN: S&P Assigns Low-B Ratings to Six Certificate Classes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to J.P. Morgan Chase Commercial Mortgage Securities
Corp.'s $1.25 billion commercial mortgage pass-through
certificates series 2004-LN2.

The preliminary ratings are based on information as of
Aug. 3, 2004.  Subsequent information may result in the assignment
of final ratings that differ from the preliminary ratings.

The preliminary ratings reflect the credit support provided by the
subordinate classes of certificates, the liquidity provided by the
trustee, the economics of the underlying mortgage loans, and the
geographic and property type diversity of the loans.  Classes A-1,
A-2, A-3, A-4, B, C, and D are currently being offered publicly.
Standard & Poor's analysis of the portfolio determined that, on a
weighted average basis, the pool (excluding residential
cooperative (co-op) properties, which represent 0.7% of the pool)
has a debt service coverage (DSC) of 1.43x, a beginning LTV of
91.9%, and an ending LTV of 76.6%.

A copy of Standard & Poor's complete presale report for this
transaction can be found on RatingsDirect, Standard & Poor's Web-
based credit analysis system, at http://www.ratingsdirect.com/
The presale can also be found on the Standard & Poor's Web site at
http://www.standardandpoors.com/ Select Credit Ratings, and then  
find the article under Presale Credit Reports.
   
   
                  Preliminary Ratings Assigned
     J.P. Morgan Chase Commercial Mortgage Securities Corp.
   
         Class              Rating        Amount ($)
         -----              ------        ----------
         A-1                AAA          224,063,000
         A-2                AAA          434,913,000
         A-1A               AAA          420,653,000
         B                  AA            29,772,000
         C                  AA-           12,535,000
         D                  A             23,505,000
         E                  A-             9,401,000
         F                  BBB+          17,237,000
         G                  BBB           12,535,000
         H                  BBB-          17,237,000
         J                  BB+            6,268,000
         K                  BB             6,267,000
         L                  BB-            4,701,000
         M                  B+             4,701,000
         N                  B              4,701,000
         P                  B-             7,835,000
         NR                 N.R.          17,236,678
         X-1*               AAA        1,253,560,678**
         X-2*               AAA        1,207,988,000**
         

               * Interest-only class.
              ** Notional amount.
                 N.R. -- Not rated.


KB HOME: Fitch Affirms BB Senior Unsecured Debt Rating
------------------------------------------------------
Fitch Ratings affirms KB Home's (KBH) 'BB+' senior unsecured debt
and 'BB-' senior subordinated debt ratings.  The Rating Outlook is
Positive.  

The ratings reflect KB Home's solid, consistent profit performance
in recent years and the expectation that the company's credit
profile will continue to improve as it executes its business model
and embarks on a new period of growth.  The ratings also take into
account the company's primary focus on entry-level and first-step
trade-up housing (the deepest segments of the market), its
conservative building practices, and effective utilization of
return on invested capital criteria as a key element of its
operating model.  Over recent years the company has improved its
capital structure and increased its geographic diversity and has
better positioned itself to withstand a meaningful housing
downturn.  Fitch also has taken note of KB Home's role as an
active consolidator within the industry.  Risk factors also
include the cyclical nature of the homebuilding industry.  Fitch
expects leverage (excluding financial services) to remain
comfortably within KB Home's stated debt-to-capital target of 45%-
55%.

The company has expanded EBITDA margins over the past several
years on steady price increases, volume improvements and
reductions in SG&A expenses.  Also, KB Home has produced record
levels of home closings, orders and backlog as the housing cycle
extended its upward momentum.  KB Home realizes a significant
portion of its revenue from California, a region that has proved
volatile in past cycles.  But the company has reduced this
exposure as it has implemented its growth strategy and currently
sources 17% of its deliveries from California, compared with 69%
in fiscal 1995 and 88% in fiscal 1993.  Over recent years KB Home
shifted toward a presale strategy, producing a higher
backlog/delivery ratio and reducing the risk of excess inventory
and debt accumulation in the event of a slowdown in new orders.
The strategy has also served to enhance margins.  The company
maintains a 4.6 year supply of lots (based on deliveries projected
for 2004), 50% of which are owned and the balance controlled
through options.  Inventory turnover has been consistently at or
above 1.5 times (x) during the past seven and a half years.

Balance sheet liquidity has continued to improve as a result of
efforts to reduce long-dated inventories, quicken inventory turns
and improve returns on capital.  Progress in these areas has
allowed the company to accelerate deliveries without excessively
burdening the balance sheet.

As the housing cycle progresses, creditors should benefit from KB
Home's solid financial flexibility supported by $65.6 million in
cash and equivalents and $480.5 million available under its
$1 billion domestic unsecured credit facility, net of $174.5
million of outstanding letters of credit, as of 5/31/04.  In
addition, liquid, primarily pre-sold work-in-process inventory
totaling $2.8 billion provides comfortable coverage for
construction debt of $1.7 billion.  $175 million in senior notes
mature in 2004, but the balance of debt is well laddered and the
revolving credit facility matures in October 2007.

Management's share repurchase strategy has been aggressive at
times, but has not impaired the company's financial flexibility.
KB Home repurchased $81.9 million of stock in fiscal 1999, $169.2
million in 2000, $190.8 million in 2002, $108.3 million (2 million
shares) in fiscal 2003 and $66.1 million (1 million shares) so far
in fiscal 2004.  At the end of May 2004, 1 million shares remained
under the board of directors' repurchase authorization.
Notwithstanding these repurchases, book equity has increased
$1,040.2 million since the end of 1999, while construction debt
grew $763.1 million.

KBH has lowered its dependence on the state of California, but it
is still the company's largest market in terms of investment.
Operations are dispersed within multiple California markets in the
north and in the south.  During the 1990s the company entered
various major Western metropolitan markets, including Phoenix,
Denver, Dallas, Austin and San Antonio, and has risen to a top 5
ranking in each market except Dallas (number 10 ranking).  In an
effort to further broaden and enhance its growth prospects it has
established operations (greenfield and by acquisition) in the
southeastern U.S., including various markets in Florida, Atlanta
and the Carolinas.  Most recently, the company has entered the
Midwest (Chicago and Indianapolis) via acquisition.  Fitch
recognizes the company as a consolidator in the industry, but
expects future acquisitions will be moderate in size and largely
funded through cash flow.

KB Home ranked as fifth largest homebuilder in the U.S. in 2001,
2002 and 2003.  Its average home selling price through the first
six months of fiscal 2004 is $215,900.  It is on pace to construct
more than 32,000 homes in fiscal 2004.  The company operates
homebuilding operations within the U.S. and France (57% ownership
of Kaufman and Broad S.A.).  Kaufman and Broad S.A. also does
commercial construction in France and KB Home operates KB Home
Mortgage Company domestically.  Year-to-date the Western region
(CA) accounts for 17.0% of corporate orders, the Southwest (AZ,
NV, NM) represents 23.4% of orders, the Central region (CO, IL,
IN, TX) accounts for 28.8% of orders, the Southeast (FL, GA, NC,
SC) contributes 18.0% of orders and France represents 12.8% of
total net new orders.


KITCHEN ETC.: Taps DJM Asset Management to Dispose of 17 Stores
---------------------------------------------------------------
DJM Asset Management of Melville, New York has been authorized,
subject to Bankruptcy Court approval, to dispose of all 17 Kitchen
Etc. stores throughout New England, New York, Delaware,
Pennsylvania, Maryland and Virginia.  The disposition is in
response to Kitchen Etc.'s filing for Chapter 11 Bankruptcy
protection in June 2004.

Based in Melville, New York, DJM Asset Management, LLC, appraises
properties, disposes of and/or mitigates lease liabilities and
acquires retail, commercial and industrial real estate that does
not fit into our strategic partner's long-term goals. During the
past three years, DJM has conducted evaluations on over 9,000
locations and restructured or disposed of over 120,000,000 s/f of
space and over 4,000 properties.

"The stores are in freestanding, strip center and mall locations
and range in size from 13,500 to 31,600 square feet," stated Andy
Graiser, Co-CEO of DJM.  "Since many of the stores are in prime
locations, we expect a large number of preliminary bids by our due
date of Thursday, September 2nd."

"The locations are available individually or in packages of two or
more," Graiser continued, "with all bids subject to bankruptcy
court approval."

The locations are expected to operate into September 2004.  New
tenants will be able to take possession, in most instances, on
October 1st.  Stores are located at Middlesex Commons in
Burlington, Massachusetts; Fresh Pond SC in Cambridge,
Massachusetts; Providence Highway in Dedham, Massachusetts; The
Hanover Mall in Hanover, Massachusetts; The Northshore Mall in
Peabody, Massachusetts; Redstone SC in Stoneham, Massachusetts;
The Mall of New Hampshire in Manchester, New Hampshire; Daniel
Webster Plaza in Nashua, New Hampshire; The Crossing at Fox Run in
Newington, New Hampshire; The Connecticut Post Mall in Milford,
Connecticut, Bishop's Corner SC in West Hartford, Connecticut; The
Summit Square Plaza in Warwick, Rhode Island; Jay Scutti Plaza in
Henrietta, New York; Kirkwood Plaza in Wilmington, Delaware;
Airport Square SC in Montgomeryville, Pennsylvania; The Mid-Pike
Plaza in Rockville, Maryland; and The Potomac Run Plaza in
Sterling, Virgnia.

Any person who would like to obtain copies of one or more leases
that you might have an interest in or need any additional
information can contact James Avallone, DJM Managing Director, at
(631) 752-1100 (x224) or visit the DJM website at
http://www.djmasset.com/

Headquartered in Exeter, New Hampshire, Kitchen Etc., Inc. --
http://www.kitchenetc.com/-- was a leading multi-channel retailer  
of household cooking and dining products.  The Company filed for
chapter 11 protection (Bankr. D. Dela. Case No. 04-11701) on
June 8, 2004. Bradford J. Sandler, Esq., at Adelman Lavine Gold
and Levin, PC, represents the Company in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it listed $32,276,000 in assets and $33,268,000 in liabilities.


MIRANT CORP: Committee Objects to James M. Donnell's Retention
-------------------------------------------------------------
As previously reported, the Official Committee of Unsecured
Creditors of Mirant Americas Generation, LLC, sought and obtained,
on an interim basis, the Court's authority to retain James M.
Donnell as its energy industry consultant effective June 1, 2004.

Pursuant to a Letter Agreement, dated June 11, 2004, Mr. Donnell  
will:

   (a) provide the MAGi Committee with strategic advice and  
       information regarding the energy industry and in  
       particular, the assets and business of MAGi and its  
       subsidiaries, and the various alternatives available to
       the MAGi Committee to maximize value for the benefit of
       MAGi's creditors;

   (b) review, analyze and advise on the operational, personnel,
       regulatory, financial and other issues related to a sale
       or other disposition of MAGi and its subsidiaries, and a
       severance of their stock ownership and other relationships
       with Mirant and its other subsidiaries;

   (c) assist in the preparation of a business plan to sever  
       MAGi and its subsidiaries from ownership and other
       relationships with Mirant and its other subsidiaries, and
       for the operation of MAGi and its subsidiaries post-
       emergence from Chapter 11;

   (d) provide advice to the MAGi Committee on other strategic
       alternatives relating to MAGi's business and assets;

   (e) assist and advice the MAGi Committee on other matters as
       it may request; and

   (f) testify in Court on the MAGi Committee's behalf.

Charles Greer, Co-Chair of the MAGi Committee, tells the Court  
that the MAGi Committee intends to retain Mr. Donnell to obtain  
the benefit of his substantial experience leading merchant energy  
companies similar to MAGi.  Mr. Donnell was previously president  
and chief executive officer of Duke Energy North America.  In  
that position, Mr. Donnell was responsible for a merchant energy  
operation of 1,400 employees and annual revenues of  
$3,300,000,000.  Hence, Mr. Donnell has in-depth knowledge of all  
aspects of the power generation business.  The MAGi Committee  
believes that the services and advice to be provided by Mr.  
Donnell will benefit MAGi and its creditors.

Mr. Donnell's focus will be the development of an operational  
business plan to sever MAGi's assets from the other Mirant  
Debtors, so that MAGi may be run on a stand-alone basis.  This  
will entail developing the management and other infrastructure  
necessary for MAGi to run independently.

Mr. Greer assures the Court that the services Mr. Donnell will  
provide are distinct from the other presently retained  
professionals.  Nevertheless, to ensure that there is no overlap  
or duplication of services, Mr. Donnell will coordinate carefully  
with the MAGi Committee's other professionals in developing a  
work plan that will provide distinct tasks for each retained  
professional.

For his services, Mr. Donnell will be paid a $100,000 monthly fee  
for the first three months of the engagement and $75,000 per  
month for the remaining terms of this retention.  Mr. Donnell  
will be reimbursed for out-of-pocket expenses incurred in  
relation to the engagement.

Mr. Donnell tells the Court that he is not related to nor  
connection with, and neither holds nor represents any interest  
adverse to the Debtors, their estates, creditors or any other  
party-in-interest or their attorneys or the United States Trustee  
or anyone employed in the Office of the U.S. Trustee, in the  
matters for which he is proposed to be retained.  Thus, Mr.  
Donnell is a "disinterested person" as that term is defined in  
Section 101(14) of the Bankruptcy Code.

                         Debtors Object

Michelle C. Campbell, Esq., at White & Case, LLP, in Miami,
Florida, argues that some of the services James M. Donnell will
provide are not warranted or advisable at this time since they
are designed to dismember Mirant Corporation and its debtor-
affiliates' assets through development of a stand-alone business
plan and plan of reorganization.

Ms. Campbell points out that the proposed scope of Mr. Donnell's
employment is ambiguous and difficult to determine which items
relate to the development of a stand alone business plan or plan
of reorganization for the Mirant Americas Generation family of
Debtors.

The Debtors do not object to the retention of Mr. Donnell to
render services as an energy consultant, on the same terms and
conditions as the Mirant Corporation Committee retained PA
Consulting Group, Inc.  "The scope of [Mr.] Donnell's employment
should be substantially similar to the scope of PA's employment,"
Ms. Campbell says.

According to Ms. Campbell, it will be difficult to monitor
whether Mr. Donnell is rendering those services given that it has
proposed to be paid a flat monthly fee and will not record any
time entries.  Thus, Donnell should also be required to comply
with the fee procedures approved in the Debtors' cases.  The
reduced scope of services should result in a concomitant
reduction of fees.

              Mirant Committee Doesn't Like It Either

The Mirant Committee contends that the MAGi Committee's retention
of Mr. Donnell is neither necessary nor reasonable.

Jason S. Brookner, Esq., at Andrews Kurth, LLP, in Dallas, Texas,
points out that there is no plan for "MAGi separateness" as the
MAGi Committee stands.  In addition, the Debtors never suggested
the separation or spin-off of MAGi from the rest of the unified
corporate family.  In fact, every written and oral representation
the Debtors made to the Court has underscored the integrated and
inextricably intertwined nature of the Debtors' business
enterprise.

Mr. Brookner relates that the facts at this juncture would point
towards substantive consolidation -- the exact opposite result of
severing MAGi from the rest of the corporate body or outwardly
selling or disposing of MAGi or any portion of it.  More
importantly, absent substantive consolidation, there is no
authority for a unified and integrated business to play
separation games when the purpose for doing so is to attempt to
enhance the MAGi Committee's "leverage" in the Debtors' cases.

Mr. Brookner reports that plan negotiations have recently begun
in earnest.  However, it does not change the fact that the
Debtors have exclusivity to file a plan for over five months.  It
is extremely unlike that the MAGi Committee will be split off
from the corporate family.  Spending $100,000 on a consultant for
three months and then $75,000 per month for an unrestricted
period thereafter would be a waste of estate assets.

Furthermore, Mr. Brookner asserts that it is extremely difficult,
if not impossible, to see how Mr. Donnell's services will not
overlap with, and be duplicative of, the services provided by the
other MAGi Committee professionals, especially its energy
consultants, E3 Consulting and New Energy Associates, LLC, and
financial advisors, Houlihan Lokey Howard & Zukin.

Even if it were appropriate to retain Mr. Donnell, Mr. Brookner
contends that the proposed compensation scheme is objectionable
on its face, given not only the history and precedent in the
Debtors' cases with reference to the various financial advisors
already hired by three Committees and the Debtors, but also of
the strict reading of Section 328(a) in the Fifth Circuit.
Advance approval of the terms and conditions of compensation
under Section 328(a) would divest the Court of discretion to
lower or disallow any portion of compensation in the event it is
later determined that the services performed were unreasonable,
overpriced, duplicative or the like, unless the Court finds that
"such terms and conditions prove to have been improvident in
light of developments not capable of being anticipated at the
time of the fixing of such terms and conditions."

Accordingly, the Mirant Committee asks the Court to deny Mr.
Donnell's retention.

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)


MIRANT: Walks from Bosque Agreement & Assumes Wharton Tolling Pact
------------------------------------------------------------------
Prior to the Petition Date and in the ordinary course of its
business, Mirant Americas Energy Marketing, LP, acquired "tolling
rights" to two of the four generating units located at a
combustion turbine facility in Bosque County, Texas, owned by
Mirant Texas, LP.  After careful analysis, MAEM determined that
from May 2004 through June 30, 2005, the Original Tolling
Agreement is about $10,600,000 "out of the money" as to MAEM.
Accordingly, MAEM sought to reject the Bosque Tolling Agreement.

Michelle Campbell, Esq., at Haynes and Boone, LLP, in Dallas,
Texas, notes that on June 2, 2004, the Court determined that:

    (a) the rejection and the rejection damages claim would be
        left open to allow the parties time to negotiate an
        amicable resolution;

    (b) if the parties were unable to resolve their differences
        regarding the rejection and the rejection claim, the
        Court will issue an opinion on the matter; and

    (c) the parties were relieved of their obligations under the
        Original Tolling Agreement to allow the Debtors to
        pursue a new agreement with a third party.

Ms. Campbell reports that to date, no amicable resolution has
been reached.

                 Proposed Wharton Tolling Agreement

Furthering Mirant and its debtor-affiliates' desire to maximize
the value of their estates and in their reasonable business
judgment, the Debtors located a purchaser for the capacity of the
entire Bosque Facility, who would enter into a tolling agreement
directly with Mirant Texas.  Accordingly, Mirant Texas entered
into a Tolling Agreement with Wharton County Power Partners, LP,
that entitled Wharton to all of the capacity output generated by
the Bosque Facility.

Under the Wharton Tolling Agreement, Mirant Texas would sell to
Wharton the entire capacity of the Bosque Facility through
December 31, 2006 and cause MAEM to assume and assign to Wharton
certain gas transportation contracts with Gulfterra Texas
Pipeline, LP, which supply gas to the Bosque Facility.  Wharton
would make payments comprised of amounts for the demonstrated
capacity of the Bosque Facility as well as certain variable costs
for start-up and run-hour charges.  Mirant Texas would provide a
guarantee of minimal capacity levels during "summer" (May 15 to
September 15) and "non-summer" (January 1 to May 14 and September
16 to December 31) portions of the year.  The Wharton Tolling
Agreement contains terms for bonus payments to Mirant Texas when
capacity is greater than the guaranteed amounts.  Under certain
circumstances, Wharton is only liable for the amount of the
capacity that is actually available by the Bosque Facility.

The Wharton Tolling Agreement also contains these provisions:

A. Indemnification

    Mirant Texas agreed to indemnify Wharton from and against:

    -- claims, demands, liabilities arising out of gross
       negligence or intentional misconduct of Mirant Texas;

    -- damages arising from claims of third parties relating to
       the power to be delivered by Mirant Texas under the
       Wharton Tolling Agreement until the power has been
       delivered to Wharton; and

    -- damages arising from claims relating to personal injury,
       property damages and environmental laws arising from the
       ownership or operation of the Facility by Mirant Texas,
       except to the extent caused by Wharton in breach of the
       agreement.

    Wharton also agrees to indemnify Mirant Texas in similar, and
    other instances.

B. Letter of Credit

    To secure obligations under the Wharton Tolling Agreement,
    Wharton is obligated to obtain a $12,000,000 letter of credit
    in favor of Mirant Texas.  Mirant Texas is obligated to
    obtain a $5,000,000 letter of credit in favor of Wharton.
    If a party fails to deliver timely to the other party the
    Letter of Credit, the receiving party may terminate the
    Wharton Tolling Agreement.

C. Assignment

    The assignment of the Wharton Tolling Agreement by a party
    requires the prior written consent of the other party.
    However, a party may, without the need for consent from the
    other Party:

    (a) transfer, sell, pledge, encumber or assign the Wharton
        Tolling Agreement in connection with any financing or
        other financial arrangements; or

    (b) transfer or assign the Agreement to an affiliate in
        certain instances.

D. Transfer of the Bosque Facility

    Provided Mirant Texas is not in default, it retains the right
    to transfer the Bosque Facility to certain "qualified
    persons":

    -- who meet certain standards of creditworthiness and certain
       operating and maintenance experience set forth in the
       Wharton Tolling Agreement; and

    -- who simultaneously receive an assignment of the Wharton
       Tolling Agreement and assume Mirant Texas' obligations and
       liabilities under the agreement.

                      The Gulfterra Contracts

MAEM is a party to four prepetition contracts with Gulfterra for
the transportation of gas to the Bosque Facility:

    1. Firm Gas Transportation Agreement for Intrastate Services;

    2. Firm Gas Transportation Agreement for NGPA Section 311
       Service;

    3. Parking and Lending Agreement for Intrastate Service dated
       August 1, 2002; and

    4. Parking and Lending Agreement for NGPA Section 311 Service
       dated August 1, 2002.

According to Ms. Campbell, the Gulfterra Contracts provide for
the provision and transportation of gas to the Bosque Facility
for plant operation.  Under the Gulfterra Contracts, MAEM is
liable for fixed demand charges through September 2004, which
would total about $289,750.

Upon assignment of the Gulfterra Contracts to Wharton, Wharton
will be liable for the Demand Charges that accrue post-
assignment.  However, Mirant Texas will reimburse Wharton for a
portion of the Demand Charges on a monthly basis:

    (a) $79,050 in August 2004; and

    (b) $56,610 in September 2004.

In addition, since Wharton will assume MAEM's obligations under
the Gulfterra Contracts, MAEM will be able to terminate a
postpetition letter of credit amounting to $1,516,500, which was
originally posted as collateral for the Gulfterra Contracts.

                         Marketing Efforts

Ms. Campbell reports that the Debtors engaged in a thorough
marketing effort and discussed tolling the Bosque Facility with
more than a dozen different entities.  After the negotiations,
Mirant Texas and MAEM concluded that the decision to enter into
the Wharton Tolling Agreement and to work with Wharton was sound
and economically beneficial to the Debtors and their estates.
Ms. Campbell explains that under the Wharton Tolling Agreement,
Mirant Texas is able to hedge its output generation for the term
of the agreement and MAEM minimizes its obligations to Gulfterra
under the Gulfterra Contracts.

Ms. Campbell assures the Court that the Wharton Tolling Agreement
was negotiated at arm's length and in good faith, and the
property interests transferred to Gulfterra are free and clear of
liens, claims and encumbrances.  Also, no cure amount is
currently owing under the Gulfterra Contracts.

Accordingly, pursuant to Section 363 of the Bankruptcy Code, the
Debtors ask the Court to:

    (a) approve the Wharton Tolling Agreement;

    (b) authorize Mirant Texas to enter into and perform under
        the Wharton Tolling Agreement; and

    (c) authorized MAEM to assume its obligations under the
        Gulfterra Contracts and assign them to Wharton.

Furthermore, the Debtors ask Judge Lynn to provide that:

    -- Gulfterra is barred and estopped from asserting claims
       against the Debtors or Wharton for any cure amounts;

    -- Wharton is entitled to the automatic stay protection to
       enforce its rights and remedies in the event of a default
       under the Wharton Tolling Agreement;

    -- any claim for damages caused by Mirant Texas incurred by
       Wharton under the Wharton Tolling Agreement will be
       afforded administrative claim treatment under Section 503
       of the Bankruptcy Code; and

    -- any Chapter 11 plan or sale, settlement or other
       transaction into which the Debtors enter will not be
       consistent with the Wharton Tolling Agreement or interfere
       with Wharton's rights and remedies.

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


NANOGEN INC: Reports $12.3 Million 2nd Quarter Net Loss
-------------------------------------------------------
Nanogen, Inc. (Nasdaq: NGEN), a developer of molecular and point-
of-care diagnostic products, reported its financial results for
the second quarter ended June 30, 2004.  Nanogen's second quarter
results include approximately two months of activity related to
SynX Pharma Inc., which was acquired on April 21, 2004.

Total revenues for the second quarter of 2004 were $1.1 million
compared to $1.7 million for the same period in 2003 and $2.2
million in the first quarter of 2004.  Product revenues for the
second quarter were $477,000 versus $662,000 for the same period
in 2003 and were $1.1 million in the first quarter of 2004.

Nanogen's consolidated cash, cash equivalents and short-term
investments balance at the end of the second quarter of 2004 was
$60.3 million, approximately $2.7 million less than the previous
quarter of $63.0 million.  This compares to the company's cash,
cash equivalents and short-term investments balance of $29.1
million at December 31, 2003.  During the second quarter of 2004,
Nanogen received approximately $7.4 million in net proceeds from
the sale of common stock.

Nanogen's research and development, and selling, general and
administrative operating expenses for the second quarter of 2004
were $7.7 million, as compared to $8.6 million in the second
quarter of 2003 and $7.9 million in the first quarter of 2004.

For the second quarter of 2004, Nanogen reported a net loss of
$12.3 million, or $0.38 per share, which compares with a net loss
of $6.9 million, or $0.32 per share, for the prior year's second
quarter.  The net loss for the first quarter of 2004 was $5.4
million, or $0.20 per share.  The second quarter loss includes an
acquired in-process R&D write off of $3.8 million related to the
SynX acquisition and inventory reserve charges of $1.5 million
reflecting reduced product revenues anticipated from clinical
laboratories.  The 2004 first quarter loss included a $1.2 million
foreign currency gain, which was recognized in conjunction with
the closure of Recognomics, Nanogen's joint venture with Aventis,
which concluded operations.

"We are continuing to put the foundation in place to become a
leader in advanced diagnostics.  Our SynX acquisition, our new
product development efforts and our capital raising activities are
all directed at accomplishing that objective," said Howard C.
Birndorf, chairman of the board and chief executive officer of
Nanogen.  "Going forward, we will continue to identify and develop
opportunities to increase our critical mass of products and
resources."
    
                       Financial Guidance

Based on the second quarter results and on the expectation of
reduced revenues from clinical laboratories, Nanogen does not
expect a significant revenue increase in 2004 versus 2003.  
Estimated revenue growth rates are dependent on a number of
factors including the timing and success of new product
introductions, the schedules for which continue to be difficult to
estimate.  The company continues to expect total costs and
expenses, excluding cost of products sold and acquisition related
expenses, to run approximately 20% less than the 2003 total year
spending.  Nanogen expects its cash position at the end of the
year will be approximately $50 million.
    
                         About Nanogen

Nanogen, Inc. develops and commercializes products for the
molecular and point-of-care diagnostics markets.  The company
seeks to establish the unique, open-architecture NanoChip(R)
Molecular Biology Workstation and NanoChip(R) Cartridge as the
standard platform for the prediction, diagnosis and treatment of
genetic and infectious diseases.  Nanogen offers Analyte Specific
Reagents and related products to research and clinical reference
labs for the development of tests for the detection of genetic
mutations associated with a variety of diseases, such as cystic
fibrosis, Alzheimer's disease, and cardiovascular disease.  The
company's ten years of research involving nanotechnology may also
have future applications in medical diagnostics, biowarfare and
other industries.  Nanogen's business unit, SynX Pharma, leverages
proteomic and biomarker research to offer a line of point-of-care
diagnostic tests.  For additional information, visit Nanogen's
website at http://www.nanogen.com/
    
                         *     *     *

                      Liquidity Concerns

In its Form 10-K For the fiscal year ended December 31, 2003,
Nanogen Inc, reports:

"We expect that our existing capital resources, combined with
$33.7 million in gross proceeds from the sale of the Company's
common stock in March 2004, and anticipated revenues from
potential product sales, reagent rentals, leases or other types of
acquisition programs for the NanoChip System, sponsored research
agreements, contracts and grants will be sufficient to support our
planned operations, including an estimated investment of
approximately $6-8 million related to the pending acquisition of
SynX and wind down costs related to our joint venture, Nanogen
Recognomics, through at least the next eighteen months. This
estimate of the period for which we expect our available sources
of liquidity to be sufficient to meet our capital requirements is
a forward-looking statement that involves risks and uncertainties,
and actual results may differ materially.

"Our future liquidity and capital funding requirements will depend
on numerous factors including, but not limited to, commercial
success of our products, or lack thereof, the extent to which our
products under development are successfully developed and gain
market acceptance, the timing of regulatory actions regarding our
potential products, the costs and timing of expansion of sales,
marketing and manufacturing activities, prosecution and
enforcement of patents important to our business and any
litigation related thereto, the results of clinical trials,
competitive developments, and our ability to maintain existing
collaborations and to enter into additional collaborative
arrangements.

"We have incurred negative cash flow from operations since
inception and do not expect to generate positive cash flow to fund
our operations for at least the next several years. We may need to
raise additional capital to fund our research and development
programs, to scale-up manufacturing activities and expand our
sales and marketing efforts to support the commercialization of
our products under development.  Additional capital may not be
available on terms acceptable to us, or at all. If adequate funds
are not available, we may be required to curtail our operations
significantly or to obtain funds through entering into
collaborative agreements or other arrangements on unfavorable
terms. Our failure to raise capital on acceptable terms when
needed could have a material adverse effect on our business,
financial condition or results of operations."


NEXPAK CORPORATION: Hires Jones Day as Bankruptcy Counsel
---------------------------------------------------------
NexPak Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Northern District of Ohio for permission
to hire Jones Day as their bankruptcy counsel.

Jones Day is expected to:

   a) give the debtor advice on their rights, power and duties
      while continuing to operate and manage their respective
      businesses and properties;

   b) prepare on behalf of or to assist the debtor in preparing,
      all necessary applications, motions, draft orders, other
      pleadings, notices, schedules and other documents and review
      all financial and other reports to be filed;

   c) give advice and prepare responses concerning applications,
      motions, other pleadings, notices and other papers that may
      be filed and served against the debtor;

   d) give advice with respect to, and assist in the negotiation
      and documentation of, financing agreements and related
      transactions;

   e) review the nature and validity of any liens asserted against
      the Debtor's property and give advice concerning the
      enforceability of such liens;

   f) give the debtor advice regarding their ability to initiate
      actions to collect and recover property for the benefit of
      their estates;

   g) give advice and assistance concerning any potential
      property dispositions;

   h) give the debtor advice regarding executory contract and
      unexpired lease assumptions, assignments and rejections,
      lease restructurings and recharacterizations and other
      contract issues (including intellectual property licenses);

   i) give the debtor advice in connection with the pursuit of
      confirmation and implementation of the Plan or any other
      plan of reorganization and assist in the completion of an
      associated disclosure statement and other necessary
      documents;

   j) give the debtor assistance in reviewing, estimating and
      resolving claims asserted against the Debtor's estates;

   k) commence and conduct any and all litigation necessary or
      appropriate to assert rights held by the Debtor, protect
      assets of the Debtor's estates or otherwise further the
      goals of preserving and maximizing the value of the Debtor's
      estates;

   l) provide corporate, employee benefits, environmental,
      finance, intellectual property, labor and employment,
      litigation, real estate, tax and other general non-
      bankruptcy services for the Debtor to the extent requested
      by the Debtor; and

   m) perform for or on behalf of the Debtor all other necessary
      or appropriate legal services in connection with the case.

To the best of the Debtor's knowledge, Jones Day is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.

Ryan T. Routh, Esq., in Jones Day's Cleveland office, will be
principally responsible in this engagement.  Mr. Routh's current
billing rate is $285 per hour.

Headquartered in Uniontown, Ohio, NexPak Corporation --
http://www.nexpak.com/-- manufactures and supplies standard and  
custom packaging for DVD, CD, video, audio, and professional media
formats.  The Debtor, together with five of its affiliates filed
for chapter 11 protection on July 18, 2004 (Bankr. N.D. Oh. Case
No. 04-63816).  On March 30, 2004, the Debtors listed assets of
about $101 million and debts of up to $209 million.


OWENS CORNING: More Objections Raised Against Trustee Appointment
-----------------------------------------------------------------
As directed by the Court at the May 18, 2004, omnibus hearing, the
Official Committee of Unsecured Creditors, representing the  
prepetition bank lenders, bondholders, and trade creditors of  
Owens Corning, informs the Court of the recent developments that,
it thinks, makes the appointment of a Chapter 11 Trustee all the
more appropriate.

Sean P. Haney, Esq., at Morris, Nichols, Arsht & Tunnel, in  
Wilmington, Delaware, relates that since the Committee filed its
original Trustee Motion in October 2003, the Debtors' continuing
conduct and the discovery of previously undisclosed facts
confirmed the need for the appointment of a neutral trustee to
honor and enforce Owens Corning's fiduciary duty to act for the
benefit of all its creditors and to restore the integrity of the
tarnished plan process in its Chapter 11 cases.

According to Mr. Haney, the Debtors continue to support a  
reorganization plan containing a wildly inflated asbestos claim  
valuation of $16,000,000,000.  The $16 billion amount is nearly  
three times the Debtors' own most recent estimates on file with  
the Securities and Exchange Commission and disclosed to the  
public only a few months before proposing the Plan.  It is also  
nearly five times the estimates the Debtors filed with the SEC  
only months before that.  The Debtors have tried to distance  
themselves from the indefensible $16,000,000,000 asbestos figure,  
suggesting at the May 18, 2004 omnibus hearing that it is  
"merely" a condition to confirmation and "not our number."  By  
making that valuation a condition, the Debtors threaten the Court  
with failure of the Plan unless it blesses the tort claimants'  
outlandish demand.

                          More Objections

(1) Futures Representative and Asbestos Committee

James J. McMonagle, the legal representative for future asbestos
claimants, and the Official Committee of Asbestos Claimants want
the Commercial Committee's request denied because:

    -- it is based principally on the same tired, erroneous and
       unsupportable allegations made by Credit Suisse First
       Boston, as agent, Kensington International Limited,
       Springfield Associates, LLC, and Angelo Gordon, in their
       request for the appointment of an examiner;

    -- the term sheet recently negotiated among the Debtors, the
       Asbestos Committee, the Futures Representative and the
       Designated Members of the Commercial Committee demonstrates
       unequivocally that the allegations of the Commercial
       Committee concerning the Debtors' alleged breach of their
       fiduciary duty are untrue; and

    -- the Commercial Committee's argument that the Debtors can
       ignore future asbestos claimants and forego any protections
       afforded by Section 524(g) of the Bankruptcy Code is not
       only baseless, but has already been found by the Court to
       be a confirmation issue.

Mr. McMonagle contends that there is no need for the appointment
of a trustee, as the Commercial Committee is free to litigate any
issue.

(2) Debtors

Norman L. Pernick, Esq., at Saul Ewing, LLP, in Wilmington,
Delaware, observes that the Commercial Committee repeats the same
tired complaints that the Court has heard and rejected many times
before.

"Neither of these complaints is true; nor does either justify the
appointment of a trustee," Mr. Pernick asserts.

Mr. Pernick argues that:

    (a) the request no longer has the majority support of the
        Creditors Committee and should be dismissed;

    (b) the Debtors have successfully negotiated a plan with the
        representatives of all creditor constituencies other than
        the bank debt holders;

    (c) the Creditors Committee's Complaints regarding asbestos
        claim discovery are unwarranted, considering that the
        Debtors have cooperated in claims estimation discovery and
        the District Court will estimate the Debtors' asbestos
        claims liability in connection with plan confirmation; and

    (d) the appointment of a trustee would jeopardize the Debtors'
        economic success without any benefit to the estate.

                Creditors Committee Seeks Discovery

The Creditors Committee served Amended Interrogatories and
Amended Requests on Owens Corning, which generally seek discovery
of information related to either:

    (1) the process, including all discussions and negotiations,
        by which the draft and filed plans of reorganization were
        created;

    (2) the contacts between the parties and Judge Wolin or his
        former advisors, including Frances McGovern, the court-
        appointed mediator, during the period prior to Judge
        Wolin's recusal;

    (3) asbestos valuation and the process and means by which
        asbestos valuation should be determined, including the
        decision to oppose an asbestos bar date and claims
        objection process; and

    (4) the acts underlying the alleged claims against certain law
        firms concerning payments made under the National
        Settlement Program that the Court has either stayed or
        which are the subject of tolling agreements authorized by
        the Court.

                 Discovery is a Waste, Debtors Say

The Debtors complain that all the requested discovery is
inappropriate, threatens to waste the assets of the Owens Corning
bankruptcy estate, and seeks to circumvent the process by which
the Court has determined issues in Owens Corning's case should be
resolved.

Mr. Pernick asserts that:

    (1) The Creditors Committee lacks standing and authority to
        prosecute the Trustee Motion or to pursue discovery
        relating to the Trustee Motion;

    (2) Discovery should be deferred pending the resolution of the
        Examiner Motion;

    (3) The Creditors Committee seeks discovery of the terms of
        proposed Plan of Reorganization that is now obsolete;

    (4) The Creditors Committee has failed to allege a prima facie
        case for the appointment of a Chapter 11 trustee;

    (5) The Amended Interrogatories and Amended Requests are not
        reasonably designed to lead to the discovery of admissible
        evidence related to the Trustee Motion;

    (6) The Amended Requests and Amended Interrogatories
        impermissibly seek discovery of confidential settlement
        and mediation communications; and

    (7) The Amended Interrogatories and Amended requests
        improperly seek to circumvent the Court's stay of the NSP
        Cases.

                 Century Backs Creditors Committee

Linda M. Carmichael, Esq., at White and Williams, LLP, in
Wilmington, Delaware, represents Century Indemnity Company, as
successor-in-interest to CCI Insurance Company, as successor-in-
interest to Insurance Company of North America and Central
National Insurance Company.

According to Ms. Carmichael, Century has an interest in the
Trustee Motion both as an entity to whom Debtors have stated they
will look for payment of asbestos claims, and as a creditor.
Century has a monetary claim under terms of specific contractual
provisions of the Wellington Agreement.

"As an entity that is currently being asked to pay for a portion
of this alleged asbestos liability, Century has a right to expect
that the Debtors will resist efforts to pay compensation for
liability that it does not truly have and will not simply
surrender to the demands of asbestos claimants," Ms. Carmichael
says.  To the extent the Creditors Committee's allegations are
true, then the Debtors and their management are acting in a
manner that detrimentally impacts the interests of Century.  "As
a creditor of this estate whose recovery will be affected by
whether a disproportionate share of the estate's assets are
directed to the asbestos claimants, Century also has an interest
in seeing that the Debtors and their management handle claims
against the company appropriately," Ms. Carmichael explains.  For
these reasons, Century joins in the concern expressed by Mt.
McKinley and others over allegations that the Debtors' officers
and directors "have essentially acted in this case as servants of
the asbestos firms."

Reasonably or unreasonably, Ms. Carmichael notes, the Debtors'
current management suffers from a "crisis of confidence" on the
part of key constituencies in the case.  Far from causing delay
or disruption, the appointment of a trustee will clear the air
and help create a more positive environment in which the case may
move forward.  Thus, Ms. Carmichael asserts, a trustee should be
appointed.

                   Bondholders Withdraw Support

Anderson Kill & Olick, P.C., special counsel to the Official
Committee of Unsecured Creditors, and Monzack & Monaco, P.A.,
special local counsel to the Committee, on behalf of the
Committee members representing the interests of the bondholders
and the trade creditors of Owens Corning, present the Court with
a statement withdrawing, without prejudice, their support for the
Committee's request for the appointment of a Chapter 11 Trustee.

The Designated Members -- Committee members who represent the
interests of the bondholders and the trade creditors -- are PPM
America, Inc. and John Hancock Life Insurance Company.

According to Joseph J. Bodnar, Esq., at Monzack & Monaco, P.A.,
in Wilmington Delaware, two new events occurred which have caused
the bondholder and trade creditor representatives to reassess
their position with respect to the Trustee Motion.

To recall, on June 7, 2004, the bondholder and trade creditor
representatives reached an agreement with the proponents of the
Debtors' current reorganization plan on the terms of a further
revised plan of reorganization, which the Plan Proponents have
agreed to file with the Court.  The revised plan would expressly
provide for a substantially increased distribution of value to
all of the Committee's constituencies and it would also imply a
substantially lower aggregate level of asbestos claim liability
for the Debtors than does the current filed plan.  The terms of
the revised plan are also expressly conditioned on total
substantive consolidation of the Debtors to the extent now
provided for in the Debtors' current Fourth Amended Plan of
Reorganization.

"It goes without saying that the bondholder and trade creditor
representatives would not support the revised reorganization plan
terms if they believed that valid grounds exist to grant the
relief sought in the Trustee Motion.  They, accordingly, cannot
continue to support the Trustee Motion at this time," Mr. Bodnar
says.

Subsequent to the filing of the Initial Trustee Motion, the
Debtors' bank group asked the Court to appoint a Chapter 11
examiner and other parties-in-interest, including the Office of
the United States Trustee, have since expressed their support for
the Examiner Motion.  Among other things, Mr. Bodnar notes, the
Examiner Motion contemplates that the examiner would investigate
and make a recommendation as to whether or not a trustee should
be appointed in these cases.

Mr. Bodnar tells the Court that the bondholder and trade creditor
representative members of the Committee have also determined to
support the appointment of an examiner in these Cases.
"Notwithstanding their belief that grounds for the appointment of
a trustee do not exist, there can be no question that recent
developments have raised a storm of controversy surrounding these
Cases which needs to be resolved.  The bondholder and trade
representatives accordingly believe that it will be in the best
interest of all parties for an examiner to be appointed in order
to clear the air and thereby best facilitate confirmation of the
further amended plan of reorganization which the bondholder and
trade representatives support."

But Mr. Bodnar clarifies that the change in position of the
bondholder and trade creditor representatives is made without
prejudice to their right to change their position yet again,
assuming without presuming that an examiner will be appointed, if
some aspect of the examiner's work unexpectedly should give them
a reason for doing so.

                    CSFB Will Continue Prosecution

While Credit Suisse First Boston, as agent for the prepetition
bank lenders, as well as the Designated Members of the Creditors
Committee, executed the Trustee Motion, that pleading was
denominated as filed on the Creditors Committee's behalf.

In view of the split between the Banks and the Bondholders on the
Committee, the withdrawal of the Bondholder support effectively
has disabled the Committee, in that it cannot continue to
prosecute the Trustee Motion.

Accordingly, to avoid any misunderstanding, CSFB formally adopts
and joins the request for the appointment of a trustee and
related discovery.  CSFB will prosecute the Trustee Motion alone,
without participation of the Committee's counsel. (Owens Corning
Bankruptcy News, Issue No. 80 Bankruptcy Creditors' Service, Inc.,
215/945-7000)   


OWENS CORNING: Creditor Panel Urges Appointment of Examiner
----------------------------------------------------------
The Official Committee of Unsecured Creditors wants an examiner
appointed in Owens Corning's Chapter 11 cases in accordance with
Section 1104 of the Bankruptcy Code.   

As reported in the Troubled Company Reporter's June 8, 2004,
edition, Credit Suisse First Boston, as agent for the prepetition
bank lenders to Owens Corning and some of its subsidiaries
pursuant to a June 26, 1997 Credit Agreement, and Kensington
International Limited, Springfield Associates, LLC, and Angelo
Gordon, as holders of more than $500,000,000 in aggregate
principal amount of bank debt, ask the Court to appoint an
examiner to investigate the substantial evidence of:

   (1) breaches of fiduciary duty by the Debtors' management;

   (2) the Debtors' abdication of control of the plan process and
       the tort claims estimation process to the Futures
       Representative and the plaintiffs' attorneys who dominate
       the Asbestos Creditors Committee in Owens Corning's
       bankruptcy cases and virtually every significant asbestos
       bankruptcy case pending in the United States;

   (3) a multitude of significant but inadequately disclosed or
       undisclosed connections between the asbestos plaintiffs'
       interest and each of:

       (a) Mediator/Advisor Francis McGovern, who played a key
           role in Owens Corning's plan process; and

       (b) Analysis Research Planning Corporation, the Debtors'
           asbestos claims estimation firm; and

   (4) improper conduct that has cast a cloud over the very
       integrity of the plan process in Owens Corning's cases.

To the extent the members of the Commercial Committee hold
differing views concerning the specific scope of the examiner's
charge, those views will be presented to the Bankruptcy Court in
independent submissions or statements, the Committee advises.

Headquartered in Toledo, Ohio, Owens Corning --
http://www.owenscorning.com-- manufactures fiberglass insulation,  
roofing materials, vinyl windows and siding, patio doors, rain
gutters and downspouts.  The Company filed for chapter 11
protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837).  
Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom
represents the Debtors in their restructuring efforts.  On Jun 30,
2001, the Debtors listed $6,875,000,000 in assets and
$8,281,000,000 in debts. (Owens Corning Bankruptcy News, Issue No.
80 Bankruptcy Creditors' Service, Inc., 215/945-7000)   


PACIFIC GAS: Objects to Cal PX's $667,841 Claim for Legal Fees
--------------------------------------------------------------
On behalf of Pacific Gas and Electric Company, Gary M. Kaplan,
Esq., at Howard, Rice, Nemerovski, Canady, Falk & Rabkin, in San
Francisco, California, asks the Court to deny the $667,841
administrative claim filed by the California Power Exchange
Corporation for attorney's fees.  The Claim is a prepetition
claim based on PG&E's alleged obligations under certain tariffs
generally governing participation in wholesale electric markets
previously operated by the PX before the Petition Date,
notwithstanding that the amounts for which recovery is sought
were allegedly incurred postpetition.

Mr. Kaplan also contends that the PX's Administrative Claim fails
to provide support, let alone establish, that it is entitled to
administrative expense treatment under Section 503(b)(1) of the
Bankruptcy Code.  Additionally, Mr. Kaplan asserts that under
controlling law, the Administrative Claim should not be allowed
to the extent it seeks recovery of attorney's fees and expenses
incurred with respect to purely bankruptcy issues.  The
Administrative Claim fails to include any breakdown or
explanation of the matters as to which the expenses were
allegedly incurred.  The PX merely stated that the legal expenses
were incurred "in connection with PG&E's Chapter 11 bankruptcy
case."

Mr. Kaplan also points out that $625,000 of the alleged legal
expenses was incurred by the Participants Committee, rather than
the PX.

Mr. Kaplan notes that since PG&E has, pursuant to its confirmed
Plan, rejected the participation agreements with the PX on which
the Administrative Claim is based, under the express provisions
of the Bankruptcy Code, the PX's claim based on PG&E's breach of
the agreement gives rise to a prepetition claim, rather than an
administrative claim.

Furthermore, not only have the professionals whose fees and costs
comprise the Administrative Claim already been fully paid by the
PX -- as the PX's request acknowledges -- but the PX has already
been authorized by the Federal Energy Regulatory Commission to
recover the amounts for its participants, pursuant to a
methodology making PG&E liable for the vast majority of the
amounts.  Mr. Kaplan points out that if the PX's request is
granted, PG&E will potentially be subject to duplicate liability,
which the PX will reap a windfall.

The Administrative Claim also seeks to recover from PG&E expenses
that FERC has ruled cannot be assessed against PG&E, Mr. Kaplan
adds.

Headquartered in San Francisco, California, Pacific Gas and
Electric Company -- http://www.pge.com/-- a wholly owned  
subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest
combination natural gas and electric utilities in the United
States.  The Company filed for Chapter 11 protection on April 6,
2001 (Bankr. N.D. Calif. Case No. 01-30923).  James L. Lopes,
Esq., William J. Lafferty, Esq., and Jeffrey L. Schaffer, Esq., at
Howard, Rice, Nemerovski, Canady, Falk & Rabkin represent the
Debtors in their restructuring efforts.  On June 30, 2001, the
Company listed $23,216,000,000 in assets and  $22,152,000,000 in
debts. (Pacific Gas Bankruptcy News, Issue No. 80; Bankruptcy
Creditors' Service, Inc., 215/945-7000)    


PARMALAT: Judge Drain Appoints James Garrity to Serve as Examiner
-----------------------------------------------------------------
Pursuant to the Bankruptcy Court's directive, Deirdre A. Martini,
the United States Trustee for Region 2, consulted three parties-
in-interest regarding the appointment of an examiner in Parmalat
USA Corporation's Chapter 11 case:

    (1) Weil Gotshal & Manges LLP
        Attorneys for Debtors;

    (2) Chadbourne & Parke LLP
        Attorneys for the Official Committee of Unsecured
        Creditors; and

    (3) Phillips Lytle LLP
        Attorneys for Friendship Dairies, Inc., and Perry's
        Ice Cream Company, Inc.

After the consultation, the U.S. Trustee selected James L.
Garrity, Jr., a member of Shearman & Sterling, LLP, as Parmalat
USA's examiner.

Mr. Garrity assures the Court that he does not personally
represent any entities in connection with the U.S. Debtors'
cases.  He, however, admits that other members, counsel and
associates of Shearman provide services to certain claimants.

Shearman represents Societe Generale in its capacity as a
participant in a Master Lease Financing Agreement between GE
Capital Public Finance, Inc., for itself and as Agent for certain
participants, lessors, and Farmland Dairies, LLC, as lessee.

Before the Petition Date, Shearman also represented Citibank,
N.A., Corporate Asset Funding, Inc., Eureka Securitisation, plc,
and affiliates, in establishing certain receivables
securitization arrangements with Farmland, Milk Products of
Alabama, LLC, and certain non-Debtor affiliates.  Mr. Garrity,
however, notes that Shearman does not currently represent
Citibank in the U.S. Debtors' cases.

Mr. Garrity further attests that he:

    -- filed income tax returns for the three tax years preceding
       his appointment as examiner;

    -- does not owe delinquent tax obligations to any taxing
       authority;

    -- has never been convicted of a felony;

    -- is not addicted to any drug, narcotic or alcohol;

    -- is not named as a defendant in any lawsuit pending at this
       time; and

    -- is not delinquent in repaying any outstanding student loan
       obligations.

Accordingly, Judge Drain appoints Mr. Garrity as Parmalat USA's
examiner.

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


PEGASUS SATELLITE: Retains Capital & Technology as Fin'l Advisor
----------------------------------------------------------------
The Official Committee of Unsecured Creditors sought and obtained
the Court's authority to retain Capital & Technology Advisors,
LLC, as its financial advisor, nunc pro tunc to June 14, 2004.

The Committee believes that a financial advisor is crucial to its
ability to:

    (i) evaluate and analyze Pegasus Satellite and its debtor-
        affiliates' activities; and

   (ii) work with the Debtors in maximizing the value of the their
        businesses and assets.

The Committee chose Capital & Technology because it has specific
industry experience relating to the telecommunications and
satellite services sectors, which are highly technical in nature
at an operational level.

Capital & Technology, a Delaware limited liability company, is a
restructuring advisory boutique specializing in the
telecommunications sector.  According to Marion Stratakos,
Chairperson of the Creditors' Committee, Capital & Technology and
its affiliated entity Communication Technology Advisors, LLC,
have provided and are providing financial, technical and
operational advisory services to debtors and to creditor
committees in Chapter 11 cases, including RCN Corporation,
Allegiance Telecom, Inc., Leap Wireless International and Cricket
Communications, Inc., Focal Communications, Inc., Motient
Corporation, Globix Corporation and Neon Communications, Inc.
Capital & Technology also provides post-restructuring consulting
services, including operational and merger and acquisition
advice.  Capital & Technology's senior staff is comprised of
proven business leaders from several leading domestic and
international telecommunications companies.

As financial advisor, Capital & Technology will:

    (a) analyze the Debtors' operations, service delivery and
        technological capabilities, each as it applies to their
        current financial condition and its prospects for the
        Debtors' future performance;

    (b) conduct a detailed review of the Debtors' recent financial
        performance, business plan, marketing plan, revenue
        forecasts, capital program, management and competitive
        environment;

    (c) review and advise the Committee with respect to operating
        cash flow risks and opportunities.  Capital & Technology
        will review current network architecture and broadcasting
        arrangements, market channel and product profitability,
        regulatory matters as they affect current and future
        operations.  Capital & Technology will evaluate the
        potential free cash flow generators and associated timing;

    (d) assist and advise the Committee in connection with the
        Debtors' current contracts, both from a market level
        evaluation, and overall usefulness of the contracts in a
        restructured company;

    (e) provide input and overall evaluation of the Debtors'
        revised financial plan to be included in the Debtors'
        reorganization plan;

    (f) assist and advise the Committee in the preparation and
        negotiation of any reorganization plan proposed by the
        Debtors or developed by the Committee and other creditor
        constituencies of the Debtors; and

    (g) provide other advice and assistance as may reasonably be
        requested by the Committee from time to time.

Capital & Technology will be compensated with:

    (1) a $150,000 Monthly Fee; and

    (2) upon the closing or consummation of a restructuring, a
        Transaction Fee equal to:

        (A) the sum of:

             (i) 75 basis points multiplied by the amount of the
                 Aggregate Consideration between $400,000,000 and
                 $500,000,000, plus

            (ii) 150 basis points multiplied by the amount of the
                 Aggregate Consideration in excess of
                 $500,000,000; less

        (B) an amount equal to 50% of the Monthly Advisory Fees in
            excess of $1,350,000 received by Capital & Technology.

The Debtors will also reimburse Capital & Technology for all
reasonable out-of-pocket expenses.  Judge Haines makes it clear
that the firm will be compensated in accordance with the
applicable provisions of the Bankruptcy Code, the Bankruptcy
Rules and the Court's orders.

Wayne Barr, Jr., Managing Director of Capital & Technology,
assures Judge Haines that the firm and its affiliates,
professionals and employees have no materially adverse interest
to the Debtors' estates or creditors in the Chapter 11 cases.
Mr. Barr maintains that Capital & Technology is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.

Headquartered in Bala Cynwyd, Pennsylvania, Pegasus Satellite
Communications, Inc. -- http://www.pgtv.com/-- is a leading  
independent provider of direct broadcast satellite (DBS)
television. The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. D. Me. Lead Case No. 04-20889) on
June 2, 2004. Leonard M. Gulino, Esq., and Robert J. Keach, Esq.,
at Bernstein, Shur, Sawyer & Nelson, represent the Debtors in
their restructuring efforts. When the Debtors filed for protection
from their creditors, they listed $1,762,883,000 in assets and
$1,878,195,000 in liabilities. (Pegasus Bankruptcy News, Issue No.
7; Bankruptcy Creditors' Service, Inc., 215/945-7000)    


PG&E NATIONAL: USGen Committee Retains Blake as Expert Consultant
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors for USGen New
England, Inc., sought and obtained the Court's authority to
retain Thomas Blake, CPA, as an expert consultant to the
Committee's counsel Reed Smith, LLP, effective as of July 6, 2004.

Mr. Blake is a certified public accountant with more than 20
years as a partner in the national accounting firm of Ernst &
Young, and with extensive experience in the energy industry.

Specifically, Mr. Blake will:

    * perform a solvency analysis of the assets and liabilities
      of USGen;

    * review the contractual arrangements, transfers and other
      transactions between and among USGen and related entities;

    * review executory contracts;

    * review cash flow forecasts, capital expenditure
      requirements and other related issues;

    * provide the specific valuation or other financial analysis
      as Reed Smith may require;

    * prepare expert reports and related documents;

    * provide testimony in Court as necessary; and

    * provide any other services that Reed Smith and Mr. Blake
      may deem necessary.

                            Compensation

Mr. Blake is entitled to receive non-refundable professional fees
based on the actual hours incurred each month on matters
pertinent to USGen's Chapter 11 case at the hourly rate of $500.
Identifiable out-of-pocket items including travel, lodging,
outside research, and outside copying are billed at a "pass
through" rate.  Mr. Blake will also be reimbursed for his
reasonable out-of-pocket expenses on the same terms as those that
apply to work that he performs for other non-bankruptcy clients.

                         Term of Retention

The engagement letter between Reed Smith and Mr. Blake is
terminable, without cause, upon 30 days' written notice by any of
the parties, or terminable for cause at any time.  Any
termination without cause will not affect USGen's liability for
payment of fees and expenses accrued through the date of
termination or USGen's obligations to indemnify Mr. Blake.

                          Indemnifications

As part of the overall compensation payable to him under the
terms of the Engagement Letter, Mr. Blake will receive
indemnification and contribution guarantees.  The Indemnification
provisions are customary and reasonable for financial advisory
engagements, in Chapter 11 or out-of-court.

The Indemnification provisions are:

    (a) USGen will indemnify Mr. Blake for any claim arising from,
        related to, or in connection with the services provided
        for, in the Engagement Letter, but not for any claim
        arising from, related to, or in connection with Mr.
        Blake's postpetition performance of any other services
        unless those services are approved by the Court;

    (b) USGen will have no obligation to indemnify Mr. Blake or
        provide contribution or reimbursement to Mr. Blake to the
        extent that any claim or expense is:

         (i) judicially determined to have arisen from Mr.
             Blake's:

             -- bad faith;

             -- gross negligence;

             -- willful misconduct;

             -- breach of duty of loyalty, if any, which includes
                conflicts of interest and disinterestedness;

             -- failure to render advice in good faith based on
                assessments of the facts known and the
                circumstances presented to Mr. Blake at the time
                of rendering that advice; or

             -- breach of express contractual duties, including
                breach of duty to perform services; or

        (ii) settled by the parties and the Court, after notice
             and hearing, determines that the claim is one for
             which Mr. Blake should not receive indemnity,
             contribution or reimbursement because it constitutes
             bad faith and breach of duties.

        Mr. Blake's liability will be limited to $1,000,000.
        Moreover, Mr. Blake will immediately notify the Court, the
        U.S. Trustee and USGen should he obtain additional
        insurance coverage, at which time the Court may reconsider
        lifting the limitation on liability.

        Additionally, USGen will indemnify Mr. Blake and provide
        contribution and reimbursement to him to the extent that
        any claim or expense is judicially determined to have
        arisen from Blake's negligence; and

    (c) Before the earlier of an order confirming a Chapter 11
        plan in USGen's case -- that order having become a final
        order no longer subject to appeal -- and the entry of an
        order closing USGen's Chapter 11 case, if Mr. Blake
        believes that he is entitled to the payment of any amounts
        by USGen on account of the indemnification, contribution
        or reimbursement obligations under the Engagement Letter,
        including without limitation the advancement of defense
        costs, then Mr. Blake must file an application in the
        Court, and USGen may not pay any amounts to Mr. Blake
        before the Court approves the payment.

The Indemnification provisions will terminate upon Mr. Blake's
association with a firm.

Mr. Blake neither holds nor represents any adverse interest in
connection with USGen's Chapter 11 case.

Headquartered in Bethesda, Maryland, 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.
25; Bankruptcy Creditors' Service, Inc., 215/945-7000)    


PIEDMONT HAWTHORNE: S&P Assigns B+ Corporate Credit Rating
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to aviation services provider Piedmont Hawthorne
Holdings Inc.  The outlook is stable.  

At the same time, Standard & Poor's assigned 'B+/B-' ratings to
the proposed $287 million secured credit facility available to
Piedmont's wholly owned subsidiary, MRO Acquisition Corp., and
guaranteed by Piedmont.  MRO Acquisition's first-lien revolver and
term loan are rated 'B+', the same as the corporate credit rating,
with a recovery rating of '2', indicating Standard & Poor's
expectation that the lenders would realize a substantial recovery
of principal (80%-100%) in the event of default. The second-lien
term loan is rated 'B-', two notches below the corporate credit
rating, with a recovery rating of '5', indicating expectations of
a negligible recovery of principal (0%-25%) in the event of
default.

"The ratings on Piedmont reflect a highly leveraged balance sheet
and weak financial profile after the proposed transaction and the
competitive and cyclical nature of the general aviation services
market, offset somewhat by the company's leading positions in
markets served," said Standard & Poor's credit analyst Christopher
DeNicolo.  Piedmont is owned by The Carlyle Group, a private
equity firm.  MRO Acquisition Corp., Piedmont's subsidiary, will
be acquiring Garrett Aviation Services from General Electric Co.
Simultaneously, Piedmont will be recapitalized and sold by one
Carlyle investment fund to another.  MRO Acquisition Corp. will be
the parent of the Garrett and Piedmont operating companies.  The
combined transactions will be financed with proceeds from the new
$287 million credit facility and a $95 million equity contribution
from Carlyle.  Leverage will be high, with debt to EBITDA around
5x and debt to capital of 75%.

Piedmont is the second-largest fixed base operator (FBO) in North
America, and following the Garrett acquisition will be a leading
provider of maintenance, repair, and overhaul (MRO) of engines for
general aviation aircraft, largely business jets.  The company
will have three operating segments: MRO services (58% of pro forma
revenues in the 12 months ending March 31, 2004), airport services
(26%), and aircraft completion and modification (16%).  The
business jet market, for both new aircraft and aftermarket
services, has been depressed for the past three years due to the
weak economy and the aftermath of the Sept. 11, 2001, terrorist
attacks, but recently has begun to recover.

In the MRO segment, Piedmont is the exclusive factory-sponsored
service center for Honeywell engines, which are on a third of all
business jets.   In addition, the company is factory authorized to
perform airframe maintenance on Dassault, Raytheon, and Bombardier
business jets.  This unit also performs avionics installations,
which are largely driven by FAA-mandated upgrades.  MRO business,
especially for engines, is highly correlated with the number of
hours flown, which have been steadily increasing since declining
in 2001.  The company also has contracts to provide Honeywell
engine MRO services for the three largest fractional business jet
fleet owners.

Piedmont's leading position in FBO and engine MRO services and the
recovery in the business aviation market should generate free cash
flow sufficient to reduce the company's initial high debt
leverage, resulting in an overall credit profile that is
consistent with current ratings.


PILLOWTEX: Seeks Court Nod on $3.4 Million Hanover Property Sale
----------------------------------------------------------------
Pillowtex Corporation seeks Bankruptcy Court authority to sell its
Hanover Property, free and clear of liens, claims and interests,
to New Horizons Partnership, LLC, subject to receipt of higher or
better offers from other parties.

According to William H. Sudell, Jr., Esq., at Morris Nichols
Arsht & Tunnel, in Wilmington, Delaware, the Property consists of
about 22.5 acres located at 401 Moulstown Road in Hanover,
Pennsylvania, and includes a 275,000 square-foot manufacturing
plant.  Prior to the Petition Date, the Property was used in
connection with the Debtors' manufacture and sale of pillow and
pad products.  The Property was put up in the market for sale in
mid-December 2003.

With broker Hilco Real Estate LLC's marketing efforts, about 50
parties expressed interest in the Property.  After discussions
with the interested parties, the Debtors received four formal
offers from potential purchasers.

The Debtors, after considering the purchase prices and other
material terms of the offers, entered into negotiations with New
Horizons regarding definitive documentation for the sale of the
Property.  At the time of the negotiations, the Debtors
determined that New Horizons' offer was the highest and otherwise
best offer.

On July 28, 2004, the Debtors and New Horizons entered into a
Real Estate Purchase Contract.  The salient terms of the Purchase
Contract are:

    * Purchase Price

      New Horizons will pay the Debtors $3,400,000 in cash
      including a $340,000 earnest deposit already set aside
      in escrow with the Debtors' Escrow Agent, Capital Abstract
      Corporation.

    * Condition of Property

      The sale is on an "as is" basis and the Debtors are not
      making any representation or warranty as to the condition of
      the Property.  At the Closing, the Debtors will deliver the
      Property to New Horizons "broom clean" and vacant, and
      otherwise in materially the same condition as existed on
      July 28, 2004, ordinary wear and tear excepted.

    * Defects in Title

      Title to the Property will be transferred to New Horizons
      free and clear of all liens, claims and interests pursuant
      to a Court final order from which no appeal has been taken.
      The Debtors will convey fee title in the Property by special
      warranty deed subject to certain permitted exceptions.

    * Personal Property Escrow Amount

      In the event that the Debtors' personal property is not
      removed from the Property by the closing date, $50,000 of
      the Purchase Price will be held in an interest-bearing
      account by the Escrow Agent.  The Personal Property Escrow
      Amount will be delivered to the Debtors upon the removal of
      all their personal property.

      If the Debtors fail to remove all their personal property by
      October 31, 2004, New Horizons may remove any remaining
      personal property, with actual, reasonable, documented
      removal costs incurred, to be reimbursed from the Personal
      Property Escrow Amount.  Promptly after the removal, the
      remainder of the Personal Property Escrow Amount will be
      delivered to the Debtors.

    * Broker Fee

      If the sale of the Property is consummated under the terms
      contemplated in the Purchase Contract, the Debtors estimate
      that the Broker will be entitled to $136,000.  The Debtors
      will pay the Broker Fee upon the closing of the sale of the
      Property.

    * Closing

      If New Horizons is the successful bidder at an auction for
      the Property, or the Debtors do not receive any qualified
      competing bid and determine that the Contract is the
      successful bid; the Closing will occur by mail or at the
      offices of New Horizons' attorney in Harrisburg,
      Pennsylvania, on a date agreed to by the parties within
      five business days after the date the Court's order
      authorizing the consummation of the sale becomes final, but
      not later than October 31, 2004.

    * Property Taxes and Transaction Costs

      Ad valorem and similar taxes assessed against the Property
      will be prorated between the Debtors and New Horizons at
      Closing on a calendar year basis of a 365-day year.

      The Debtors will be responsible for the cost of preparing
      the deed.  New Horizons will pay the cost of conducting its
      due diligence studies, the Title Policy, the transfer taxes,
      sales taxes, recording fees, and the escrow charges imposed
      by the Escrow Agent.  Each party will pay its own
      attorney's, broker's and consultant's fees.

    * Termination

      Provided that New Horizons is not in default, the Contract
      will terminate and the Deposit will be refunded to New
      Horizons in the event that:

         -- the Court will not have approved the Break-Up Fee on
            or before August 13, 2004;

         -- the Court will not have approved the sale to New
            Horizons on or before September 6, 2004;

         -- New Horizons is neither the successful bidder nor the
            second highest bidder at the conclusion of the
            auction;

         -- the Debtors consummate a sale of the Property with a
            entity other than New Horizons; or

         -- the closing does not occur on or prior to October 31,
            2004.

Since Hilco marketed the Property for more than six months to an
extensive range of potential buyers through various sale methods,
the Debtors believe that the Purchase Price in the Contract
represents fair and reasonable consideration.  Mr. Sudell also
notes that market comparables compiled by Hilco suggest that the
Purchase Price is consistent with existing market conditions for
sales of assets similar to the Property.

Mr. Sudell assures the Court that the Contract is the product of
good faith, arms'-length negotiations between the parties.  New
Horizons is not an "insider" of the Debtors, as that term is
defined in Section 101(31) of the Bankruptcy Code.

As contemplated in the Contract, the Debtors does not anticipate
that the sale will require the assumption of any leases or
executory contracts to which the Debtors are parties, or the
assignment of any agreements to New Horizons.  The Debtors
however reserve the right to file other pleadings as may be
necessary to assume and assign to the prevailing purchaser any
leases and contracts, if necessary to further effectuate the
transactions contemplated by the Purchase Contract or other
approved agreement.

Headquartered in Dallas, Texas, Pillowtex Corporation --
http://www.pillowtex.com/-- sells top-of-the-bed products to
virtually every major retailer in the U.S. and Canada. The Company
filed for Chapter 11 protection on November 14, 2000 (Bankr. Del.
Case No. 00-4211).  David G. Heiman, Esq., at Jones, Day, Reavis &
Poque represents the Debtors in their restructuring efforts.  On
July 30, 2003, the Company listed $548,003,000 in assets and
$475,859,000 in debts.


PINNACLE ENT: Fitch Puts B+ Rating on Proposed $350M Bank Facility
------------------------------------------------------------------
Fitch Ratings has assigned a rating of 'B+' to the proposed $350
million senior secured bank facility of Pinnacle Entertainment
(NYSE: PNK) due 2008.  The facility, which consists of a
$100 million senior secured revolver due 2008, a $125 million
senior secured term loan due 2010, and a $125 million senior
secured delayed draw term loan due 2010, replaces the existing
$300 million senior secured credit facility established in
December 2003.  Refinancing of the bank facility provides
additional liquidity to accommodate a $40 million increase in
budget to $365 million for PNK's L'Auberge du Lac Casino & Resort
development in Lake Charles, Louisiana.  Extension of the delayed
draw portion should better accommodate the timing of funding
needs, and reduce funded debt and interest expense.  The Outlook
is Stable.

To date, PNK has spent just $100 million of its final $365 million
budget in Lake Charles.  However, the vast majority of project
costs remaining are subject to fixed price or guaranteed maximum
price contracts, limiting the risk of additional budget increases.
Project contingency remains consistent at roughly 6% as of
June 30, 2004 despite the diminishing need for excess contingency.  
The $40 million budget increase at Lake Charles includes scope
changes totaling $20 million for additional guestrooms, slot
machines, and transportation equipment, among other items.  
Despite scope changes, the project remains on schedule for a
Spring 2005 opening.

PNK ratings reflect the company's heavy capital investment
schedule through 2008 and uncertainty regarding the ultimate
returns on those investments.  These investments include the $365
million Lake Charles development, and two potential casino
projects in St. Louis -- a $208 million property in downtown St.
Louis which is expected to open in late 2006, and a $300 million
project in St Louis County which is expected to open in late 2007
-- for which final approval from the Missouri Gaming Commission is
required.  The investments are significant in relation to the
company's operating profile (with LTM EBITDA of approximately $93
million), and free cash flow will be negative over the next
several years as a result.  Nonetheless, the company retains a
high level of liquidity, which is sufficient to fund near term
projects.  Pro forma for the new credit facilities and a
$33 million land sale in May 2004, total liquidity exceeds
$566 million, including roughly $341 million in cash on hand and
$225 million in borrowing capacity.

PNK benefits from a somewhat diversified portfolio of assets
(albeit in a number of competitive markets such as Reno, NV and
Biloxi, MS), which provides stability to operating results. Since
new management assumed control in early 2002, operating results
have improved markedly with same-store LTM March 31, 2004 EBITDA
40.1% higher than FYE 2001 EBITDA.  This primarily reflects a
particularly strong turnaround at Belterra in Vevay, Indiana and
improved margin performance due to focused cost-cutting efforts.
Given its dependence on overnight visitation, future results at
Belterra should benefit from the $37 million hotel expansion
completed in May 2004.

Pro forma for the new credit facilities and May land sale, Fitch
estimates net leverage stood at 3.6 times (x) at March 31, 2004.
Net debt/EBITDA is expected to peak at approximately 6.0x early
2005, prior to the projected spring 2005 opening of the Lake
Charles property.  Leverage is then projected to drop by fiscal
year-end 2005, followed by modest external borrowings required to
complete the second St. Louis project.  Timing of PNK's major
capital investments is prudently sequenced so that financing for
the St. Louis projects benefit from cash flows provided by
completed projects.  Over the long-term, leverage will primarily
decline through incremental new store EBITDA, as debt reduction
will be precluded by heavy investment spending through 2008.
Failure to achieve adequate returns on the company's three
projects would limit the company's capacity to reduce leverage and
long-term access to new capital or refinancing requirements.

Further support is derived from the relatively marketable nature
of the assets underlying the debt.  PNK's five U.S. casino
properties provide substantial over-collateralization of senior
secured debt, and more than adequate support for subordinated debt
when factoring in PNK's assets under development.  PNK would also
have the option of bringing in equity partners for its development
properties if conditions warranted.  Subordinated debtholders are
further subordinated as a result of this refinancing, but remain
reasonably positioned behind the relatively large tranche of bank
debt.

Pinnacle Entertainment (NYSE: PNK) -- http://www.pnkinc.com/-- is  
a diversified gaming and hospitality company with casinos in
Indiana, Louisiana, Mississippi, Nevada and Argentina.  The
Company, formerly Hollywood Park, also leases two card clubs in
the Los Angeles metropolitan area.  Future developments include a
new casino resort in Lake Charles, Louisiana, the replacement of
the existing casino facility in Neuquen, Argentina, and two major
casino properties in the St. Louis, Missouri region, pending
approval of the Missouri Gaming Commission.


QWEST COMMUNICATIONS: Equity Deficit Widens to $1.9B at June 30
---------------------------------------------------------------
Qwest Communications International Inc. (NYSE:Q) reported a second
quarter 2004 net loss of $776 million including special items.  
The net effect of the special items was an incremental charge
against the current quarter's results of $487 million.  

"We continued to make significant progress on our key objectives,
which will drive growth and increase our financial flexibility,"
said Richard C. Notebaert, Qwest chairman and CEO.  "While our
momentum was somewhat impacted by seasonality and some competitive
pressures, especially in our enterprise business, we were pleased
with the continuing strength across our key growth services."

                       Financial Results

Revenue for the quarter was $3.44 billion, a 4.3 percent decrease
from the second quarter of 2003, and a sequential decline of
approximately one percent. Revenue in the second quarter continued
to benefit from strong momentum in key growth services including
long-distance, DSL, bundles, and, as of the second quarter, in
wireless.  These benefits were more than offset by heightened
competitive pressures in the enterprise market and continuing,
although stabilizing, access line loss.

The company saw continued success in capturing market share within
its local service area as revenue for long-distance services
increased six percent over last year.  Data and Internet revenue
increased approximately three percent, both sequentially and
compared to last year, as a result of continued expansion of
certain data and Internet services, including DSL and hosting.
Wireless revenue increased sequentially, reversing a trend of
declining revenues since the de-emphasis of standalone wireless
service in 2002.

Cost of sales plus selling, general and administrative (SG&A)
expenses totaled $2.84 billion in the quarter, an increase of $231
million from the year ago period and $250 million sequentially,
which included several special items. Excluding the impact of
these items, the company saw cost improvement of $35 million over
last year and $16 million sequentially. See the Special Items
below.

During the quarter, key cost initiatives launched earlier in 2004
began to drive improvements in facility cost, network operations
and SG&A. Additional initiatives were implemented in the second
quarter to bolster these efforts and to continue improving the
operating leverage relating to information technology
consolidation, as well as increased productivity within the
network and overhead functions. Since the launch of these
initiatives, the staffing levels within these organizations have
been rebalanced by 1,550.

"Our operating leverage is beginning to take hold," said Qwest
Vice Chairman and CFO Oren G. Shaffer. "Everyone at Qwest is
focused on initiatives to drive revenue growth and achieve cost
saving goals, with the objective of using the improvement in
operating efficiency to neutralize the impact of competitive
pressures in the enterprise market."

Cash capital expenditures for the second quarter totaled $486
million, versus $505 million in the second quarter of 2003. The
decrease in capital expenditures was largely the result of a
reduction in information technology projects, which was partially
offset by the deployment of additional DSL facilities.

Interest expense totaled $394 million for the second quarter.
Qwest continues to expect annual interest expense savings of
approximately $250 million in 2004, as compared to 2003. Cash
capital expenditures of $486 million in the quarter exceeded the
cash generated from operations of $284 million by $202 million.
The cash generated from operations less capital expenditures were
impacted sequentially by higher capital spending and increased
cash payments for interest and payroll-related items. The company
expects to grow the cash from operations in excess of capital
expenditures in 2004 at a rate similar to 2003 levels.

                       Operational Trends

The rate of access line losses year-over-year remained relatively
stable at four percent.  Seasonal and increased competitive
pressures accelerated the sequential line losses to 1.3 percent,
compared to approximately one percent in each of the previous
three quarters.  The company remains focused on improving
retention through the quality-of-service initiatives embedded in
the company's Spirit of Service approach.  Recent JD Power and
Associates consumer local survey results confirm that Qwest is
making significant improvements on these metrics.  For the second
year in a row, Qwest improved in all 37 measured attributes, as
well as the six major components of customer satisfaction.

The company saw significant improvements in bundle penetration,
defined as customers with a main line and either DSL or long-
distance. Bundle penetration increased to 36 percent, compared to
32 percent at the end of the first quarter.  Qwest also plans to
expand bundle sales with the introduction of new feature-rich
offerings in the third quarter.

During the quarter, the company significantly improved the trends
in wireless subscriber growth following the full launch of
national wireless services.  Nearly two thousand net subscriber
additions in the consumer market fully reversed the trend of net
losses posted in the first quarter.

Qwest continues to expand its wireless service offering, as well
as sales and service support.  Advanced wireless data services
launched earlier in the quarter added enhanced features such as
Web browsing and camera-phone capabilities.  In addition to
increasing the available wireless features, the company is
expanding its dedicated sales and service centers to support
continued growth. Based on the success of Qwest's retail
operations, the company is doubling the number of kiosks and in-
line stores it plans to open by the end of the year to 68 from the
previously announced 34.

The company continued its record DSL growth adding 109,000
subscribers in the second quarter to end with 853,000 DSL
subscribers.  In addition, the company deployed approximately two
thousand remote terminals during the period, expanding the
footprint to over six million households.  The company is on track
to achieve approximately one million subscribers by year-end and
to make DSL services available to about 65 percent of households
within its operating region.  Additionally, Qwest has partnered
with Best Buy to make DSL services available at 82 of its retail
locations in the 14-state local service area.

Qwest continued its strong progress in the sales of in-region
long-distance with the addition of 733,000 lines in the second
quarter, taking total lines to 4.1 million.  Long-distance
penetration of total retail lines increased to nearly 30 percent,
as compared to 24 percent at the end of the first quarter.  In
response to changing industry dynamics, Qwest plans to launch
targeted initiatives throughout the remainder of 2004 aimed at
driving long-distance, DSL, wireless and bundle penetration and
furthering revenue growth.

The company determined that the number of previously reported
long-distance lines in the fourth quarter of 2003 was overstated
by approximately 133,000 lines.  Accordingly, the total line count
as of the fourth quarter of 2003 and the first quarter of 2004
have been adjusted to 2.2 million and 3.4 million, respectively.
This change had no effect on revenue.

In the third quarter, Qwest launched its business class Voice over
Internet Protocol (VoIP) services in four markets.  This marks a
significant milestone in advancing the adoption of VoIP services.
The company remains on track to complete the rollout of business
and consumer VoIP services by the end of the year to all major
metropolitan markets within the local service area, as well as to
businesses in select out-of-market areas, by the end of the year.

                   Wireless Asset Sale Update

The company has agreed to sell its PCS licenses and related
wireless network assets to Verizon Wireless for $418 million in
cash. This transaction is subject to regulatory approval and
remains on track to close by the end of the year or early in 2005.
The sale of these assets is consistent with Qwest's strategy of
rationalizing the operations of the business while driving
improvements in financial flexibility.

                      Balance Sheet Update

In June, two rating agencies recognized the improvement in the
company's credit profile by upgrading all of the company's credit
ratings, including the ratings of Qwest Corporation a significant
three notches to BB and BB-.

Qwest continued to improve its balance sheet during the quarter by
reducing debt $297 million to $17.2 billion.  During the quarter,
the company exchanged $126 million in Qwest Capital Funding, Inc.
notes for common stock in private transactions at an average
effective per share price of $4.64.  Additionally, Qwest redeemed
$100 million principal amount of Qwest Corporation's (QC's) 5.65
percent notes due November 2004 and $41 million principal amount
of QC's 5.5 percent debentures due June 1, 2005.  Qwest will
continue to pursue opportunities to reduce debt and improve
liquidity.

                       Insolvency Deepens

Qwest's June 30, 2004, balance sheet shows a stockholders' deficit
totaling $1,909,000,000 -- swelling 53% from the $1,251,000,000
shareholder deficit reported at March 31, 2004.

                         Special Items

In the second quarter of 2004 the company incurred special items
that net to an incremental charge of $487 million, or $0.27 per
share.  These items include:

   -- An impairment charge of $43 million, or $0.02 per share,
      relating to the payphone business and certain network
      supplies.

   -- Costs associated with the planned workforce reductions
      resulted in a charge of $127 million, or $0.07 per share. In
      addition, the results for the second quarter of 2003
      included a charge of $17 million, or $0.01 per share.

   -- A charge of $18 million, or $0.01 per share, in SG&A for a
      legal contingency.

   -- A benefit of approximately $52 million, or $0.03 per share,
      relating to favorable customer bankruptcy settlements to
      SG&A.  Also as a result of these bankruptcy settlements,
      gains of approximately $70 million, $0.04 per share, to
      other income, relating to termination of certain long-term
      agreements.

   -- A charge of $300 million, or $0.17 per share, in SG&A for
      higher litigation reserves. This charge reflects an increase
      in the estimated minimum liability associated with certain
      investigations and securities actions in which the company
      is involved.

   -- A tax charge of $140 million, or $0.08 per share, relating
      to a change in the valuation allowance against deferred tax
      assets.

   -- A gain of approximately $19 million, or $0.01 per share, in
      other income associated with the retirement of debt.

                          About Qwest

Qwest Communications International Inc. (NYSE:Q) is a leading
provider of voice, video and data services. With more than 40,000
employees, Qwest is committed to the "Spirit of Service" and
providing world-class services that exceed customers' expectations
for quality, value and reliability.  For more information, visit
the Qwest Web site at http://www.qwest.com/  


RAINBOW MEDIA: S&P Junks Senior Unsecured & Subordinated Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Rainbow Media Enterprises Inc. and its national
programming subsidiary, Rainbow National Services LLC. The outlook
is negative.  Rainbow Media consists of two main business
segments:

   (1) a relatively weak start-up direct broadcast satellite (DBS)
       provider that requires ongoing funding; and

   (2) an established, profitable national programming entity that
       generates ongoing net free cash flow.

These business segments are being spun off from cable operator
Cablevision Systems Inc.

At the same time, Standard & Poor's assigned its 'B+' bank loan
rating to Rainbow National's $950 million in secured bank debt,
along with a recovery rating of '1', indicating a high expectation
for full recovery of principal in the event of a default.  Also, a
'CCC+' rating was assigned to Rainbow National's $250 million
senior unsecured notes due 2012 and $550 million senior
subordinated notes due 2014, both to be issued under Rule 144A
with no registration rights.  The bank loan rating is based on a
preliminary bank loan agreement, and is subject to Standard &
Poor's review of the final bank loan documents. Proceeds from
these debt issuances will be used to repay about $725 million in
existing bank debt, as well as fund requirements of the DBS
operation, including the consumer high definition television
(HDTV) VOOM service rollout and development of HDTV content (VOOM
21).  Upon completion of the spin-off and repayment of bank debt
previously incurred by Rainbow Media Holdings LLC, the corporate
credit rating and secured bank loan rating on this entity will be
withdrawn.

Notwithstanding the strength of Rainbow Media's national
programming business, the rating is dominated by the extremely
high business risk of the company's consumer video product, given
its late introduction to the market relative to competitors
EchoStar Communications Corp. (9.8 million subscribers) and
The DIRECTV Group Inc. (11.1 million subscribers).  Competition
from incumbent cable TV operators also contributes to the high
business risk.   VOOM represents a start-up operation geared
toward providing HDTV programming, including its own VOOM 21
programs.  In contrast, EchoStar and DirecTV have more limited
HDTV offerings.

"The senior unsecured notes and subordinated notes are both rated
two notches below the corporate credit rating due to the
significant concentration of priority obligations relative to
total asset value, which exceeds Standard & Poor's 30% threshold,"
explained Standard & Poor's credit analyst Catherine Cosentino.
"Priority claims are substantial relative to the estimated $2.2
billion in asset value for Rainbow National, and include secured
bank debt allowable under the bank loan financial covenant
limitations."


RCN CORP: Court Okays Trading Restriction to Preserve NOLs
----------------------------------------------------------
To protect and preserve RCN Corporation and its debtor-affiliates'
net operating loss tax carryforwards and Built-In Losses, Judge
Drain approved, on a final basis, the Debtors' request to
establish notice and hearing procedures regarding the abandonment,
trading, conversion or transfer of equity interests in RCN that
must be complied with as a precondition to the effectiveness of
any abandonment, trade or transfer.  Any purchase, sale,
abandonment or other transfer of equity interests in the Debtors
in violation of these procedures, including notice requirements,
will be null and void ab initio as an act in violation of the
automatic stay:

   (a) Any person or entity who currently is or becomes a
       Substantial Equityholder, and who has not previously
       filed a notice of status pursuant to the Interim Order,
       will file with the Court, and serve on the Debtors and
       counsel to the Debtors, a notice of the status, on or
       before the later of:

       -- July 12, 2004; or

       -- 10 calendar days after becoming a Substantial
          Equityholder.

       "Substantial Equityholder" is any person or entity that
       has beneficial ownership of:

       (1) at least 5 million shares of RCN common stock;

       (2) at least 15,900 shares of RCN Series A Preferred
           Stock; or

       (3) at least 66,300 shares of RCN Series B Preferred  
           Stock.

   (b) Before effectuating any transfer, conversion or
       abandonment of any equity interest which would result in
       either an increase or decrease in the amount of RCN equity
       interests, beneficially owned by a Substantial
       Equityholder or a person or entity becoming or ceasing to
       be a Substantial Equityholder, the Substantial
       Equityholder, person or entity will file with the Court,
       and serve on the Debtors and the counsel to the Debtors,
       advance written notice, of the intended transfer,
       conversion or abandonment of equity interests.

   (c) The Debtors will have 15 calendar days after receiving a
       Notice of Proposed Transfer to file with the Court and
       serve on the Substantial Equityholder an objection to any
       proposed transfer, conversion or abandonment of any equity
       interest on the grounds that these may adversely affect
       the Debtors' ability to utilize the Losses.  If the
       Debtors file an objection, the transaction will not be
       effective unless approved by a final and nonappealable
       Court order.  If the Debtors do not object within a 30-day
       period, the transaction may proceed solely as specifically
       set forth in the Notice.  Further transactions of a type
       specified beyond the scope of the Notice of Proposed
       Transfer must be the subject of additional notices, with
       additional 30-day waiting periods.

   (d) The Debtors will serve a notice of the entry of the
       authorized procedures on:

       -- The Office of the U.S. Trustee for the Southern
          District of New York;
  
       -- Counsel for the Official Committee of Unsecured
          Creditors appointed in the Debtors' cases;

       -- Counsel for the Debtors' secured lenders, or their
          agents, as the case may be;

       -- All known record holders of RCN common or preferred
          stock;

       -- The transfer agent for any class or series of RCN
          common or preferred stock;

       -- The Securities and Exchange Commission; and  

       -- The Internal Revenue Service.

       The Notice served will be via first class mail, postage
       prepaid.  Additionally, the Debtors will publish the
       Notice in The Wall Street Journal.  The Debtors are not
       required to serve further notice of entry of these
       provisions.

   (e) Any transfer agent for any class or series of RCN common
       or preferred stock having notice of these provisions will
       provide the Notice to all holders of the stock registered
       with the transfer agent.  After that, the transfer agent
       will send additional copies of the Notice to all
       registered holders upon subsequent requests by the
       Debtors, provided that the Debtors will not make the
       requests more frequently than on a quarterly basis.  Any
       registered holder will, in turn, provide the Notice to any
       holder for whose account the registered holder holds the
       stock, and so on down the chain of ownership.

   (f) Any person or entity, or broker or agent acting on behalf
       of person or entity, who sells an aggregate of at
       least 500,000 shares of RCN common stock, or any shares
       of RCN preferred stock -- or an option with respect to RCN
       common or preferred stock -- to another person or entity
       will provide a copy of these provisions to the purchaser
       of the stock, or to any broker or agent acting on the
       purchaser's behalf.

As previously reported in the Troubled Company Reporter's June 10,
2004, edition, the consolidated group of corporations of which RCN
Corporation is the parent and all of the Debtors are members
presently has estimated net operating loss carryforwards in excess
of $2,400,000,000 as a result of past losses.  RCN also has  
significant future losses and depreciation and amortization  
deductions attributable to assets with a tax basis in excess of  
current fair market values.

The Debtors currently expect that the existing NOLs will be  
reduced by the amount of cancellation of indebtedness income  
realized in the bankruptcy reorganization, and may also be  
reduced by certain interest deductions taken with respect to any  
debt converted to equity pursuant to any plan of reorganization.   
Even after reductions, the Debtors estimate that in excess of  
$1,000,000,000 of the group's consolidated current NOLs and all  
of its Built-In-Losses will remain.  Accordingly, the NOLs  
remaining after the effect of a bankruptcy reorganization could  
translate into potential future tax savings in excess of  
$350,000,000, and significant additional taxes may be saved as a  
result of the Built-In-Losses in assets held by the members of  
the Debtors' consolidated group.

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)     


RS GROUP: Promotes Landlord Risk Specialty Insurance Products
-------------------------------------------------------------
RS Group of Companies, Inc. (f/k/a Rent Shield Corp.)(OTCBB:RSGC),
provides a unique pass-through risk specialty insurance and
reinsurance products to protect cash flow for apartment building
owners, along with a similar product in many different industries.
Rent Shield's "pass through risk products," allow it to make a
recurring profit on every product insured, translating to enormous
income potential in a marketplace which includes over 38,000,000
rental units that generate over $300 billion in annual rents, that
their cash flows can be secured.

RS Group of Companies revenues for 2004 are expected to approach
$25,000,000.

Rent Shield focuses on selling it's products to large landlords,
which insures significant monthly expansion of revenue, based on
current goals of adding 2,000 units per month for it's products.
The products guarantee six months rental income and $10,000 in
damages for each unit, protecting the landlord's against surprise
negative changes in occupancy. Tenants benefit as well, by no
longer having to provide a last month rent payment and security
deposit.

RS Group of Companies, Inc. continues to develop strong strategic
partnerships within the insurance industry, allowing it to bring
these powerful products to the marketplace. Expectations for
expanding revenue for 2005 run high, based on such partnerships
and the company's aggressive tactics in reaching major landlords
and other potential customers, offering them products which
provide protection for the customers' revenues and profits, which
never truly existed in the marketplace prior to RentShield(TM).

Numerous contracts remain in constant negotiation, with the
company optimistic on the closing of each and every deal.
RentShield maintains an experienced and dynamic sales team,
capable of making it the larger provider in this high-revenue
potential niche of the insurance industry.

John Hamilton, RS Group's founder and CEO, stated, "We take pride
in being the wave of the future for a critical, but relatively new
niche of the insurance industry. Our corporate team and our sales
team provide a protection and a service that truly no landlord can
really afford to be without in these volatile times. We welcome
the leadership role and the challenge and know that our efforts
will be rewarded with a dramatically rising revenue and profit
curve to reward our company and it's shareholders."

RS Group of Companies' core product, the RentShield(TM)
Residential Rental Guarantee Program:

   -- Guarantees, without question, to automatically pay the
      landlord up to six months of rental income in the event of
      tenant default within 30 days of the due date.

   -- Pays the landlord up to $10,000 for willful damage by a
      tenant.

   -- Eliminates the landlord's legal, eviction, and
      administrative collection expenses.

   -- Pre-qualifies a prospective tenant through background and
      credit verification within 48 hours of their application.

   -- Eliminates the need for landlords requiring up-front payment
      of a security deposit and last month's rent.

   -- Provides property owners the online tools that help
      administer residential rental properties and access other
      RSGC products and services.

   -- Provides landlords and tenants online access to listings of
      vacant properties.

                 About RS Group of Companies, Inc.

RS Group of Companies, Inc. -- http://www.rentshieldcorp.com/--  
has developed and is implementing a strategy to design, structure
and sell a broad series of pass-through risk specialty insurance
and reinsurance platforms throughout North America.

                          *   *   *

At December 31, 2003, RS Group's balance sheet recorded a
stockholders' deficit of $966,088.


SOLUTIA INC: Court Okays New Executive Compensation Agreements
--------------------------------------------------------------
As previously reported, Solutia Inc. and its debtor-affiliates
sought Bankruptcy Court approval of a Key Employee Retention
Program on May 5, 2004.  Since then, the Court has considered, and
entered orders authorizing the Debtors to implement, nearly all of
the employee-related retention programs and initiatives described
in court filings requesting approval of the KERP.  The only
element of the KERP Motion remaining to be considered is the
Debtors' request for authority to enter into compensation and
retention agreements with their new senior management team.

The Debtors have been working diligently with the Official
Committee of Unsecured Creditors to finalize the terms of
employment with their senior executives.  Conor D. Reilly, Esq.,
at Gibson, Dunn & Crutcher, LLP, in New York, relates that the
Debtors have now reached an agreement with the Creditors
Committee on the Executive Compensation Terms.  Solutia, Inc.,
has prepared executive retention and compensation agreements with
the members of its new executive management team:

1. Jeffry N. Quinn -- Chief Executive Officer and member of the
                      Board of Directors

    * Annual Base Salary: $500,000, retroactive to May 5, 2004

    * Target Annual Bonus Opportunity: 1.5x Annual Base Salary

    * Emergence Bonus:

      -- Emergence Bonus payable 6 months post-emergence;

      -- Total potential emergence bonus opportunity of $3.75
         million;

      -- 25% allocation for performance in relation to target
         EBITDA for 12-month period ending six months post-
         emergence.  Minimum threshold for bonus is achievement of
         90% of EBITDA target, with bonus increasing as
         performance increases up to achievement of 120% of EBITDA
         target;

      -- 25% allocation for performance in relation to target
         Enterprise Value based on market value six months post-
         emergence.  Minimum threshold for bonus is achievement of
         Enterprise Value of $1.3 billion, with bonus increasing
         as performance increases up to achievement of Enterprise
         Value of $2.5 billion; and

      -- 50% allocation for performance in relation to target
         Unsecured Creditor Recoveries based on trading prices six
         months post-emergence.  Minimum threshold for bonus is
         achievement of Unsecured Creditor Recoveries of 45%, with
         bonus increasing as performance increases up to
         achievement of Unsecured Creditor Recoveries of 100%.

    * Severance:

      -- 1.25x Annual Salary if terminated without cause prior to
         emergence from Chapter 11; and

      -- Emergence Bonus if terminated without cause after
         emergence from Chapter 11.

2. James M. Sullivan -- Senior Vice President and Chief Financial
                         Officer

    * Annual Base Salary: $275,000, retroactive to May 5, 2004

    * Target Annual Bonus Opportunity: 0.75x Annual Base Salary

    * 2003 Bonus: $100,000

    * Emergence Bonus:

      -- Total potential emergence bonus opportunity of $1.5
         million; and

      -- Mechanics otherwise similar to Mr. Quinn's Emergence
         Bonus.

    * Severance:

      -- 1.25x Annual Base Salary if terminated without cause
         prior to emergence from Chapter 11; and

      -- Emergence Bonus if terminated without cause after
         emergence from Chapter 11.

3. Luc de Temmerman -- Senior Vice President and Chief Operating
                        Officer

    * Annual Base Salary: $350,000, retroactive to May 5, 2004

    * Target Annual Bonus Opportunity: 1.0x Annual Base Salary

    * 2003 Bonus: $240,000

    * Emergence Bonus:

      -- Total potential emergence bonus opportunity of $2.25
         million; and

      -- Mechanics otherwise similar to Mr. Quinn's Emergence
         Bonus.

    * Severance:

      -- 1.25x Annual Base Salary if terminated without cause
         prior to emergence from Chapter 11; and

      -- Emergence Bonus if terminated without cause after
         emergence from Chapter 11.

4. John F. Saucier -- President of the Integrated Nylon division

    * Annual Base Salary: $320,000, retroactive to May 5, 2004

    * Target Annual Bonus Opportunity: 1.0x Annual Base Salary

    * Retention Payments:

      -- $600,000 paid in four equal installments, upon approval
         of agreement, on December 31, 2004, June 30, 2005 and
         December, 31 2005.

    * Severance:

      -- $400,000 upon emergence from Chapter 11, or sale of
         substantially all the assets of Integrated Nylon
         division, if, in either event, executive is not offered
         employment on substantially similar terms.

5. G. Bruce Greer -- President of the Pharma Services division

    * Annual Base Salary: $200,000

    * Target Annual Bonus Opportunity: 0.50x Annual Base Salary

    * 2003 Bonus: $50,000

    * Retention Payments:

      -- $200,000 paid in two equal installments on each of
         December 31, 2004 and June 30, 2005, or if a Pharma Sale
         occurs before the applicable installment payment date,
         the date of a Pharma Sale.

    * Transaction Bonus:

      -- Up to $200,001 depending on net proceeds of sale, if any,
         of all the stock or substantially all the assets of Amcis
         AG and Carbogen AG.

    * Severance:

      -- 1.0x Annual Base Salary if terminated without cause prior
         to Pharma Sale.

6. Bradley W. Hill -- Vice President, Sales and Marketing

    * Severance:

      -- 1.0x Annual Base Salary if terminated without cause on or
         before June 30, 2006.

Because of the expertise and leadership abilities of these
individuals, the Debtors are confident that the new team can
capably lead Solutia toward execution of its new business plan
and development of a reorganization plan.  Mr. Reilly asserts
that it is important that Solutia offers the new team with
Executive Compensation Agreements with terms that help ensure
their continued employment and provide appropriate incentives to
encourage a strengthening of Solutia's business lines,
implementation of necessary cost-cutting and other measures and
emergence from Chapter 11 as quickly and efficiently as
practicable.

Each of the Executive Compensation Agreements has been approved
by the Creditors Committee and Solutia's Board of Directors.
Solutia believes that the terms of the Executive Compensation
Agreements are consistent with:

    (a) compensation arrangements provided to senior executives of
        comparable companies;

    (b) retention incentive payments to senior executives of
        comparable Chapter 11 Debtors; and

    (c) the type and level of services being provided by the
        senior executives and the value of their knowledge and
        expertise in the Debtors' business operations and
        reorganization efforts.

                           *     *     *

Judge Beatty authorizes the Debtors to execute and perform under
the Executive Compensation Agreements with the new executive
management team members, and to make the required payments under
the Agreements.

With respect to Messrs. Quinn, Sullivan, de Temmerman, Saucier
and Greer, Judge Beatty clarifies that the Executive Compensation
Agreements supersede any previous employment, retention or change
in control agreement.  Mr. Hill's Executive Compensation
Agreement supersedes all prior agreements with respect to his
right, if any, to severance benefits upon the termination of his
employment for the period commencing on the effective date of his
Executive Compensation Agreement and ending June 30, 2006.

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


SPHERION: Completes Divestiture of United Kingdom Operations
------------------------------------------------------------
Spherion Corporation (NYSE:SFN) successfully completed the planned
divestiture of its staffing and recruitment operations in the
United Kingdom.  The Company received $29 million of cash proceeds
and will record the transaction in the third quarter of 2004.

Roy Krause, Spherion president and chief operating officer
commented, "In March we announced plans to focus our growth
strategy on North America, the largest staffing market in the
world.  These plans included divestiture of several non-core
businesses in Europe and Australia.  The sale of our United
Kingdom operations substantially completes our divestiture plans,
strengthens our balance sheet and allows us to re-deploy capital
and other resources to further strengthen our position as a
premier provider of staffing and recruitment services in North
America."

                         About Spherion

Spherion Corporation (S&P, B+ Corporate Credit Rating, Negative)
is a leader in the staffing industry in North America, providing
value-added staffing, recruiting and workforce solutions. Spherion
has helped companies improve their bottom line by efficiently
planning, acquiring and optimizing talent since 1946. To learn
more, visit http://www.spherion.com/


SPIEGEL INC: Hires Staubach Midwest as Real Estate Broker
---------------------------------------------------------
Spiegel Inc. and its debtor-affiliates ask the U.S. Bankruptcy
Court for authority to employ Staubach Midwest, LLC, as their real
estate broker in connection with the potential subletting or
assignment of approximately 120,000 square feet of space on floors
1, 2, and LL, located at 3500 Lacey Road, in Downers Grove,
Illinois for a term through December 1, 2006.  Staubach Midwest's
employment will be in accordance with the terms of a
Sublease/Disposition Agency Agreement.

Staubach is a worldwide real estate leader with a focus on
representing users of office, retail, and industrial space.
Staubach has over 50 offices in nine countries and has over 1,100
employees in the Americas.  Staubach has particular expertise in
real estate strategic planning, acquisition and disposition,
lease administration and relocation services.

Staubach will have the exclusive right to sublet or assign the
Property for a period commencing July 29, 2004 and ending on the
earlier of:

    (i) successfully subletting or assigning the Property; or

   (ii) January 31, 2005.

Pursuant to the terms of the Broker Agreement, Staubach will
conduct all aspects of promoting and advertising the Property and
periodically reporting to the Debtors the progress made with
regard to the sublease marketing effort.

In consideration of Staubach's brokerage services for subletting
or assigning the Property and the firm's agreement to use good
faith efforts to effect the sublet or assignment, the Debtors
will pay Staubach a total commission of $1.50 per square foot per
year of the sublease.  If however, there is no cooperating broker
-- defined as any broker other than the Staubach brokers John
Musgjerd and Fred Schuler -- involved in brokering the sublet
agreement, the Debtors will only pay $1.00 per square foot per
year.  If Staubach successfully negotiates a buyout, recapture,
or assumption of the Property by the landlord or a third party,
then the Debtors will compensate Staubach $1.00 per square foot
per year for the remainder of the lease term determined from the
date the Debtors' lease obligation is extinguished.

The Staubach Commission will be earned for services rendered if
the Property is subleased or assigned during the Term of the
Broker Agreement, whether or not the subtenant or assignee was
procured by Staubach.  The Commission will also be due to
Staubach in the event that during the Term or within 90 days
afterwards, the Debtors enter into an agreement with the Landlord
to extinguish their lease obligation or any portion of that
obligation.

In addition, the Commission will be owed to Staubach in the event
that during the Term or within 180 days afterwards, the Debtors
commence negotiations that are ultimately successful with a
"Sublease Prospect."  A Sublease Prospect is defined as anyone
-- including affiliates, partners, assigns, successors and
predecessors -- who, during the Term, either:

      (i) submitted a letter of intent, term sheet or draft
          sublease or sublease to the Property;

     (ii) received a draft sublease for the Property from the
          Debtors; or

    (iii) whose name appears on a written list submitted by
          Staubach to the Debtors within 15 days of termination of
          the Broker Agreement and who during the term of the
          Broker Agreement, toured the Property, received
          proposals or expressed interest in the Property.

The Debtors will also pay or reimburse Staubach for:

    * all costs and expenses relating to the design and
      development of all marketing and advertising materials;

    * all costs relating to broker incentive programs; and

    * all marketing costs related to brokerage receptions and
      open-houses.

The Commission and the Marketing Costs will be paid to Staubach
on execution of a sublease, an assignment, or a buyout.  All
amounts unpaid by the Debtors 45 days after the due date will
bear a service charge equal to 1-1/2% per month of the unpaid
balance.

Notwithstanding anything in the Broker Agreement to the contrary,
Staubach will not receive a commission if the Debtors' lease on
the Property is:

    -- transferred as part of a sale of all or substantially all
       of the Debtors' assets pursuant to Section 363 of the
       Bankruptcy Code; or

    -- transferred pursuant to a plan of reorganization either:

        (i) to a third party in connection with the transfer of
            all or a substantial part of the Debtors' assets; or

       (ii) to a reorganized Debtor.

Given the transactional nature of Staubach's engagement and the
contingency arrangement, the firm should not be compelled to
comply with the monthly and interim fee application requirements.
Instead, Staubach and the Debtors will seek the Court's approval
of the firm's fees, as provided for in the Broker Agreement, at
the time of and in conjunction with seeking the approval for any
sublease or assignment of the Property.

Fred Schuler, Managing Principal of Staubach, assures the Court
that the firm:

    (a) has no connection with the Debtors, their affiliates,
        their creditors or any other party-in-interest, or their
        attorneys and accountants;

    (b) is a "disinterested person," as that term is defined in
        Section 101(14) of the Bankruptcy Code, as modified by
        Section 1107(b); and

    (c) does not hold or represent any interest adverse to the
        Debtors or their estates in the matters for which Staubach
        is proposed to be retained.

Staubach has not rendered any compensated services to the Debtors
during their Chapter 11 cases or during the year prior to the
Petition Date.

Headquartered in Downers Grove, Illinois, Spiegel, Inc. --
http://www.spiegel.com/-- is a leading international general  
merchandise and specialty retailer that offers apparel, home
furnishings and other merchandise through catalogs, e-commerce
sites and approximately 560 retail stores.  The Company filed for
Chapter 11 protection on March 17, 2003 (Bankr. S.D.N.Y. Case No.
03-11540).  James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq.,
at Shearman & Sterling represent the Debtors in their
restructuring efforts.  When the Company filed for protection from
its creditors, it listed $1,737,474,862 in assets and
1,706,761,176 in debts. (Spiegel Bankruptcy News, Issue No. 29;
Bankruptcy Creditors' Service, Inc., 215/945-7000)   


SPX CORP: Weak Operating Results Spur S&P Negative Outlook
----------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on SPX
Corp. to negative from stable.  At the same time, Standard &
Poor's affirmed the 'BBB-' corporate credit and senior secured
ratings and the 'BB+' senior unsecured debt rating on the
Charlotte, North Carolina-based diversified industrial
manufacturer.

Based on preliminary figures, SPX had approximately $2.9 billion
of total debt, including off-balance-sheet financings, as of June
30, 2004.

"The outlook revision reflects disappointing operating performance
within several operations, due in part to rising raw material
costs, a difficult pricing environment, and manufacturing
inefficiencies, which will likely make it difficult for SPX to
meet our credit measure expectations in 2004," said Standard &
Poor's credit analyst Joel Levington.

Furthermore, both second-quarter and 2004 earnings quality are
weaker than expected, because the company added its municipal
valve business to discontinued operations during the second
quarter, a favorable non-cash mark-to-market valuation of an
interest rate swap, and a $33 million onetime tax benefit, and
because a large portion of the company's cash generation will come
from the sales of account receivables, which Standard & Poor's
consider to be a financing activity.

Over time, Standard & Poor's expects that the company will
continue to divest assets viewed as non-core, although the timing,
assets, size, and reallocation of potential proceeds are unknown.
Acquisition activity is expected to decline in the near term;
however transactions may include "bolt-on" targets that enhance
existing platforms and technology.

"We are somewhat skeptical that management's financial policy will
be sufficiently disciplined to consistently meet our targeted
credit measures," Mr. Levington said.  "We expect SPX to emphasize
debt reduction over shareholder-friendly initiatives until
operating performance improves and credit protection measures
strengthen.  Should that not occur, or should it become apparent
that the company's intermediate financial polices are inconsistent
with our expectations, ratings could be lowered.  If that happens,
the senior unsecured debt would be rated at least one notch below
the corporate credit rating, depending on the potential amount of
secured debt and priority liabilities relative to adjusted
tangible assets."

SPX Corporation describes itself as a global provider of technical
products and systems, industrial products and services, flow
technology, cooling technologies and services, and service
solutions.  See http://www.spx.com/


THREE PROPERTIES: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Three Properties, Ltd.
        dba Oaks of Inwood/Inwood Greens
        dba Trails of Inwood
        P.O. Box 187
        Prairie View, Texas 77446

Bankruptcy Case No.: 04-40811

Type of Business: The Debtor operates an apartment complex
                  located in Houston, Texas.

Chapter 11 Petition Date: August 2, 2004

Court: Southern District of Texas (Houston)

Judge: Marvin Isgur

Debtor's Counsel: Eric J. Taube, Esq.
                  Hohmann, Taube & Summers, L.L.P.
                  100 Congress Ave, 18th Floor
                  Austin, TX 78701
                  Tel: 512-472-5997
                  Fax: 512-472-5248

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
------                        ---------------       ------------
DSD Development, Inc.         Loan                      $664,479
P.O. Box 187
Prairie View, TX 77446

Hollister Road Investments,   Loan                      $495,932
Ltd.
P.O. Box 187
Prairie View, TX 77446

Green Oak Village, Ltd.       Loan                      $156,107

Aldine ISD                    Taxes                     $148,302

Paul Bettencourt              Services                  $125,876

Harris County Tax Assessor-   Taxes                     $125,876
Collector

D.W. Sowell Development Ltd.  Loan                      $109,124

Reliant Energy                Services                   $34,773

Seril, Inc.                   Services                   $33,072

United Painting Co.           Services                   $23,980

Don Sowell Interests          Services                   $22,508

Fantastic Floors Inc.         Services                   $21,951

Castillo's Painting Co.       Services                   $17,995

Hughes Mro/Chad Houston       Services                   $16,266

City of Houston Water Dept.   Services                   $15,103

DSI-HP 2002, Ltd.             Loan                       $14,500

Texas Commercial Agency       Services                   $14,377

G.O. Plumbing Services, Inc.  Services                   $13,342

City Ranger's                 Services                   $11,688

Bayou City Pstrol. Division   Services                   $11,595


THREE PROPERTIES: Hires Hohmann Taube as Bankruptcy Counsel
-----------------------------------------------------------
Three Properties, Ltd., wants permission from the U.S. Bankruptcy
Court for the Southern District of Texas to employ Hohmann, Taube
& Summers, L.L.P. as its bankruptcy counsel.

The firm is expected to:

   a) advise the Debtor as to their rights and responsibilities;

   b) take all necessary action to protect and preserve the estate
      of the debtor including, if necessary, the prosecution of
      actions or adversary of other proceedings on the Debtor's
      behalf;

   c) develop, negotiate and promulgate the Chapter 11 plan for
      the Debtor and prepare the discharge statement in respect
      thereof;

   d) prepare on behalf of the Debtor all necessary applications,
      motions and other pleadings and papers in connection with
      the administration of the estate; and

   e) perform all other legal services required by the Debtor in   
      connection with this case.

Eric J. Taube, Esq., leads the engagement.  Mr. Taube discloses
that lawyers at his firm charge $175 to $375 per hour for their
services.

Headquartered in Prairie, Texas, Three Properties, operates an
apartment complex.  The Company filed for chapter 11 protection on
August 2, 2004 (Bankr. S.D. Tex. Case No. 04-40811).  When the
Company filed for protection from its creditors, it listed less
than $50,000 in assets and estimated its debts at more than $1
million.  


TORPEDO SPORTS: Proposes to Merge with Interactive Games, Inc.
--------------------------------------------------------------
Interactive Games, Inc., a privately held company and a developer
and licensor of interactive casino technologies and slot machine
games to the rapidly growing Native American Class II, Class III
and charitable gaming markets, says it will enter into a
Definitive Merger Agreement with Torpedo Sports Inc. (OTC BB:
TPDO).  Completion of the Plan for Merger will take place over the
next fourteen business days and remains subject to the conditions
precedent in the merger agreement.

Under the terms of the merger agreement, the holders of
Interactive Games capital stock, warrants and options will have
the right to receive Torpedo Sports capital stock, warrants and
options as outlined within the Plan for Merger and upon completion
of the Definitive Merger Agreement.

                  About Interactive Games Inc.

Interactive Games, Inc., http://www.interactivegamesinc.com/is a  
developer and licensor of interactive casino technologies and slot
machine games to the rapidly growing Native American Class II,
Class III and charitable gaming markets. Interactive Games'
mission is to deliver to its customers gaming technology that
produces a high return on investment by providing both software
and gaming hardware that extend the earnings life of its
innovative gaming platforms beyond the standard. Management and
the development team for Interactive Games represents over forty
years of combined experience and knowledge within the regulated
casino gaming sector and have provided licensing, sales, service
and gaming content to most major manufacturers in gaming.

Situated in the Foreign Trade Zone in heart of Fort Lauderdale,
Florida, Interactive Games occupies a 20,000 square foot corporate
office and showroom ideally situated for shipment and storage of
its products both domestically and internationally. Presently
through the Company's strategic alliance with Spin Inc., the
company will continue to provide slot machines and all forms of
casino technologies to the cruise industry as well as most gaming
destinations throughout the Caribbean.

                   About Torpedo Sports Inc.

Torpedo Sports USA, Inc. formerly operated through its wholly
owned subsidiary, Torpedo Sports, Inc. of Quebec, Canada, as a
manufacturer and distributor of outdoor recreational products for
children. The Company recently announced its intention to
liquidate its recreational products business and explore other
business opportunities.

                           *   *   *

Torpedo Sports Inc.'s April 30, 2004, balance sheet shows a
$3,512,598 stockholders' deficit.  


UAL CORP: Inks Pact Modifying Stay on Cal. Statewide Secured Claim
------------------------------------------------------------------
United Air Lines, Inc., and the California Statewide Communities  
Development Authority have reached a stipulation regarding Cal
Statewide's motion to lift the automatic stay to exercise its
remedies as a secured creditor by setting off the annual fees with
the collateral.  

The automatic stay is modified to permit Cal Statewide to withdraw
$286,161 from the Escrowed Funds.  The amount will be applied to
the Annual Fees the Debtors owe, which accrued through April 1,
2004. Cal Statewide releases its security interest in $286,161 of
the Escrowed Funds, which will be paid to the Debtors.

On each Payment Date, commencing on October 1, 2004, Cal  
Statewide will withdraw $92,897 from the Escrowed Funds in  
satisfaction of its Annual Fees.  At the same time, Cal Statewide  
will release its security interest in $92,897 of the Escrowed  
Funds, which will be paid to the Debtors.

The Stipulation will cease to be effective on the earliest of the  
effective date of a confirmed plan of reorganization or the  
conversion of the Debtors' proceedings to a Chapter 7.

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


UNIVERSAL ACCESS: Files for Chapter 11 Reorganization in Illinois
-----------------------------------------------------------------
Universal Access Global Holdings Inc. (Nasdaq: UAXS) and its U.S.
subsidiaries filed voluntary petitions for reorganization under
Chapter 11 of the U.S. Bankruptcy Code in the United States
Bankruptcy Court for the Northern District of Illinois. The
filings will enable the Company and its U.S. subsidiaries to
continue to conduct business without interruption while it
implements its reorganization plan.

The Company's non-U.S. subsidiaries are not included in the filing
and will also continue to operate normally.

"We believe that Chapter 11 is the best available solution for
Universal Access," said Randy Lay, Chief Executive Officer and
President of Universal Access. "It will permit us to create the
greatest possible value for our creditors, and to continue to
deliver high quality off-network private line circuits to our
carrier, cable, and government customers. I want to stress that
service will not be interrupted. We will continue to provide our
customers with the same high levels of service they have come to
expect from us." Mr. Lay added, "while in Chapter 11, we will
continue to eliminate expenses that are not core to our current
business, in order to position Universal Access for future long-
term success."

                     About Universal Access

Universal Access (Nasdaq: UAXS) is a leading communications
network integrator for carriers and service providers expanding
into markets and areas beyond their own network presence. Founded
in 1997, the company is a single, independent source of analysis,
design, planning and provisioning (installing) of end-to-end
data/voice circuits and networks. Universal Access provides
network connectivity services, software and information products -
- including the industry-leading Lattis(TM) tariff pricing
software -- to over 200 U.S. and international telecom carriers,
cable companies, system integrators, government and enterprise
customers. Over the past seven years, Universal Access has created
the industry's leading network infrastructure database, the
Universal Information Exchange (UIX(R)). The UIX holds real-time
information on the availability, location, and prices for
thousands of data and voice circuit connections, and covers 145
million physical U.S. telecom locations collected from more than
400 carriers and other sources. For further information about
Universal Access, visit the company's Web site at
http://www.universalaccess.net/


UNIVERSAL ACCESS: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Universal Access Global Holdings Inc.
        233 South Wacker Drive, Suite 600
        Chicago, Illinois 60606

Bankruptcy Case No.: 04-28747

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      Universal Access Inc.                      04-28752
      Tri-Quad Enterprises Inc.                  04-28755
      Universal Access Communications Inc.       04-28762
      Universal Access of Virginia Inc.          04-28768

Type of Business: The Debtor provides network infrastructure
                  services and facilitates the buying and selling
                  of capacity on communications networks.
                  See http://www.universalaccess.com/

Chapter 11 Petition Date: August 4, 2004

Court: Northern District of Illinois (Chicago)

Judge: Jack B. Schmetterer

Debtors' Counsels: John Collen, Esq.
                   Rosanne Ciambrone, Esq.
                   Duane Morris LLC
                   227 West Monroe Street Suite 3400
                   Chicago, IL 60606
                   Tel: 312-499-6701

Total Assets: $22,047,000

Total Debts:  $24,054,000


UNIVERSAL ACCESS: PwC Resigns as Independent Accountants
--------------------------------------------------------
On August 2, 2004, Universal Access Global Holdings Inc. (Nasdaq:
UAXS) received notice that, effective upon the Company's filing of
its Form 10-Q for the quarter ended June 30, 2004,
PricewaterhouseCoopers LLP will resign as the Company's
independent accountants.

During the two most recent fiscal years and through August 4,
2004, there have been no disagreements with PricewaterhouseCoopers
LLP on any matter of accounting principles or practices, financial
statement disclosures, or auditing scope or procedure, which
disagreements if not resolved to the satisfaction of
PricewaterhouseCoopers LLP would have caused them to make
reference thereto in their reports on the financial statements for
such years.

The reports of PricewaterhouseCoopers LLP on the Company's
consolidated financial statements as of and for the year ended
December 31, 2003, included an explanatory paragraph disclosing
that recurring losses from operations, negative cash flows from
operating activities, decreasing revenues, and a net working
capital deficiency raise substantial doubt about the Company's
ability to continue as a going concern.  The report of
PricewaterhouseCoopers LLP for the Company's consolidated
financial statements as of and for the year ended December 31,
2002, did not contain any adverse opinion or disclaimer of
opinion, nor was it qualified or modified as to uncertainty, audit
scope or accounting principles.

The Company's Audit Committee is currently in the process of
selecting a new independent registered public accounting firm.  
Upon making such selection, the Company will file with the
Securities and Exchange Commission, a subsequent Current Report on
Form 8-K in accordance with SEC requirements.

                     About Universal Access

Universal Access (Nasdaq: UAXS) is a leading communications
network integrator for carriers and service providers expanding
into markets and areas beyond their own network presence. Founded
in 1997, the company is a single, independent source of analysis,
design, planning and provisioning (installing) of end-to-end
data/voice circuits and networks. Universal Access provides
network connectivity services, software and information products -
- including the industry-leading Lattis(TM) tariff pricing
software -- to over 200 U.S. and international telecom carriers,
cable companies, system integrators, government and enterprise
customers. Over the past seven years, Universal Access has created
the industry's leading network infrastructure database, the
Universal Information Exchange (UIX(R)). The UIX holds real-time
information on the availability, location, and prices for
thousands of data and voice circuit connections, and covers 145
million physical U.S. telecom locations collected from more than
400 carriers and other sources. For further information about
Universal Access, visit the company's Web site at
http://www.universalaccess.net/


US AIRWAYS: Settles Bank of New York Aircraft Claims for $20.9 Mil
------------------------------------------------------------------
On November 4, 2002 and May 15, 2003, The Bank of New York, as  
Successor Trustee under a Trust Indenture between the  
Hillsborough County Aviation Authority and Barnett Banks Trust  
Company, N.A., filed Claim Nos. 2841 and 5723 aggregating  
$27,791,551 against US Airways, Inc.

Pursuant to the Confirmation Order blessing the carrier's chapter
11 plan, The Bank of New York retains liens on its collateral and
has an Allowed Secured Class USAI-1 Claim equal to the value of
the interest in the estate of USAI in the collateral securing its
Allowed Secured Claim.

The Bank of New York and Reorganized U.S. Airways agree that
Claim No. 5723 is reduced and allowed as a General Unsecured Class
USAI-7 Claim for $20,941,551.  Claim No. 2841 is allowed as a
Secured Class USAI-1 Claim as set forth in the Confirmation Order.
(US Airways Bankruptcy News, Issue No. 59; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


WASTECORP INC: Disclosure Statement Hearing Set for August 24
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey further
adjourned the hearing to consider the adequacy of the preliminary
disclosure statement prepared by Wastecorp. International
Investments, Inc., (TSX Venture: Stock Symbol "WII").  The hearing
is now scheduled for August 24, 2004 at 2:00 p.m.

As previously reported, on May 12, 2004, Wastecorp. filed a
preliminary disclosure statement to explain its chapter 11 plan.  
ITT Industries, Inc., the Company's largest creditor, raised
various objections.  

The Company has the exclusive right to solicit acceptances of its
plan from creditors through September 28, 2004.  

Headquarted in Glen Rock, New Jersey, Wastecorp. Inc. --
http://www.wastecorp.com/-- is a waste management company  
specializing in wastewater sewage treatment with its Wastecorp.  
Marlow Plunger Pump line, medical waste disposal, with its
reusable sharps container program and plastic and scrap tire
recycling division.  On April 7, 2003, Wastecorp. International
Investments Inc., together with its subsidiary, Wastecorp. Inc.,
filed voluntary Chapter 11 petitions in the United States,
Bankruptcy Court for the District of New Jersey.  Wastecorp. is
represented in Canada by the law firm of Borden, Ladner, Gervais,
and in the United States by lawyers at Cole, Schotz, Meisel,
Forman & Leonard.


VALCOM INC: Subsidiary Emerges From Chapter 11 Protection
---------------------------------------------------------
Valencia Entertainment International, a subsidiary of ValCom, Inc.
(OTCBB:VACM)(Frankfurt XETRA:VAM), emerged from Chapter 11
protection.

ValCom, Inc. has sold 6 of its 12 owned/operated Los Angeles
studios for over $10 million and has paid off the Company's debt.
The Company will continue to operate its 14 film and television
production sound stages, both in Los Angeles and Las Vegas, with
the primary focus being on its newly acquired studio facilities in
the Las Vegas booming entertainment market.

Vince Vellardita, Chairman and CEO, stated, "We are delighted that
these proceedings have concluded favorably. We will now move
forward with the recovery efforts and the significant
opportunities we have developed in one of the world's largest
markets -- the 'Entertainment' industry. Our past successes
position ValCom to become one of the leading television and film
studios and services companies in the Country. The partnerships we
have solidified during the past 12 months will enhance our product
offerings, increase our distribution channels, and accelerate our
growth. We are relieved to have Valencia Entertainment back up and
running. We are also very excited to have acquired the Las Vegas
property, as this market is booming; and there are no other
facilities capable of providing the needs of the fastest growing
city in the US, and the entertainment capital of the world. With a
presence both in Los Angeles and now in Las Vegas, the Company has
the perfect opportunity to capitalize on this revenue stream."

                        About ValCom, Inc.

Based in Valencia, Calif., Valcom, Inc., with wholly owned
subsidiary, Valcom Studios, Las Vegas, is a diversified and
vertically integrated, independent entertainment company. ValCom,
Inc., through its operating divisions and subsidiaries, creates
and operates full service facilities that accommodate film,
television and commercial productions with its four divisions that
are comprised of: studio, film and television, camera/equipment
rentals, and broadcast television ownership. The company offers
its clients a full complement of animation services, broadcast
facilities, recording studios and other related services for the
entertainment industry. The Company owns/operates 13 acres of land
and approximately 300,000 square feet of commercial building space
with 14 film and television production sound stages. ValCom
maintains long-term contracts with Paramount Pictures for their
hit CBS series "JAG" and "NCIS." ValCom's equipment/camera and
personnel rental business, Half-day Video, is a leading competitor
in the Hollywood community. The Company and its partnership
operate ValCom Broadcasting KVPS-TV Channel 8 in Palm Springs,
Calif. For additional information, visit http://www.valcom.tv/or  
call Ms. Shari L. Edwards at 661-257-8000.


WATERFRONT WAREHOUSE: Sec. 341(a) Meeting Slated for August 31
--------------------------------------------------------------
The United States Trustee for Region 17 will convene a meeting
of Waterfront Warehouse, Inc.'s creditors at 11:00 a.m., on
August 31, 2004, in Room 130 at 280 South First Street in San
Jose, California.  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 San Jose, California, Waterfront Warehouse,
owns a commercial building in which it leases retail and office
space.  The Company filed for chapter 11 protection on July 28,
2004 (Bankr. E.D. Calif. Case No. 04-92879).  Michael W. Malter,
Esq., at Binder & Malter, LLP, represents the Debtor in its
restructuring efforts.  When the Company filed for protection from
its creditors, it listed $8,025,700 in total assets and $6,690,752
in total debts.


WEIRTON STEEL: Wants Court to Nix Individual Bondholders' Claims
----------------------------------------------------------------
Mark E. Freedlander, Esq., at McGuireWoods, in Pittsburgh,
Pennsylvania, reminds the Court that as of the Petition Date,
Weirton Steel Corporation issued:

    (a) $118,242,300 in Weirton Steel Corporation 10% Senior
        Secured Notes Due 2008; and

    (b) $27,348,000 in Secured Pollution Control Revenue Refunding
        Bonds Series 2002.

As collateral for the Notes and the Bonds, the Weirton Corporation
Debtor granted the Bondholders junior liens in certain of its
fixed assets, including the hot strip mill, the No. 9 tandem mill
and the tin assets.

Also, pursuant to the Final DIP Order, the Debtor provided
adequate protection to the Bondholders to the extent of
diminution, if any, in value of the Bondholder Collateral in the
form of:

    (a) junior replacement liens on and security interests in
        substantially all of the Debtor's assets; and

    (b) a superpriority administrative claim pursuant to Sections
        503(b) and 507(b) of the Bankruptcy Code.

Mr. Freedlander asserts that only J.P. Morgan Trust Company,
N.A., as indenture trustee and collateral agent for the Bonds and
Notes and acting for the benefit of the Bondholders, has standing
to assert claims on the Bondholders' behalf.

On October 16, 2003, JPMorgan Trust filed two proofs of claim
asserting secured obligations that the Debtor owe them on the
Notes and Bonds:

    (1) Claim No. 2408 for $118,242,300, plus interest, fees and
        expenses; and

    (2) Claim No. 01921 for $27,318,000, plus interest, fees and
        expenses.

On April 9, 2004, JPMorgan Trust, on the Bondholders' behalf,
asserted its Diminution Claim based on an alleged decline in
value of the Bondholder Collateral since the Petition Date.  On
account of the asserted Diminution Claim, JPMorgan Trust
asserted:

    -- its rights under the Final DIP Order to a Section 503(b)
       and 507(B) superpriority claim; and

    -- adequate protection of its replacement liens and security
       interests.

On April 23, 2004, JPMorgan Trust, the Informal Committee of
Senior Secured Noteholders, and Corsair Special Situations Fund,
L.P., filed Notices of Appeal of the ISG Sale Order.  On
April 30, 2004, the United States District Court for the Northern
District of West Virginia continued the stay of the ISG Sale
Order through May 7, 2004, pending the documentation of a
settlement in principle reached among Weirton Steel, Weirton
Venture Holdings Corporation, F.W. Holdings, Inc., JPMorgan
Trust, the Informal Committee and Corsair.

On May 6, 2004, the Court approved the Settlement and Lock-Up
Agreement, pursuant to which:

    (i) JPMorgan Trust was paid $30 million, for the Bondholders'
        benefit, at the closing of the ISG Sale;

   (ii) JPMorgan Trust is entitled to receive up to an additional
        $6 million, for the Bondholders' benefit, under Weirton's
        Liquidation Plan, which incorporates by reference the
        Settlement and Lockup Agreement; and

  (iii) JPMorgan Trust may receive additional sums for the
        benefit of the Bondholders as unsecured creditors under
        the Plan.

Pursuant to the Final DIP Order, the Settlement Order and the
Settlement and Lockup Agreement, Mr. Freedlander notes, JPMorgan
Trust holds allowed claims representing the aggregate outstanding
balances of the Notes and Bonds.

Notwithstanding the filing of the Indenture Trustee Claims, the
Debtor identified 489 Individual Bondholder Claims aggregating
$9,545,277.  Upon review, the Debtor found that the Bondholder
Claims are duplicative of the allowed claims held by JPMorgan
Trust.

Mr. Freedlander notes that the Bondholder Claimholders will
receive distributions on the Notes and Bonds from the Debtor
through JPMorgan Trust.  If the Bondholder Claims are allowed,
then the claimholders would receive additional distributions,
and, thus, improperly receive a greater recovery than other
similarly situated creditors.

Accordingly, the Debtor asks the Court to disallow the Bondholder
Claims.

Among the largest Bondholder Claims are:

                            Claim      Claim         Claim
    Claimant                Number     Amount    Classification
    --------                ------     ------    --------------
    A. H. Kerr Foundation     1997   $206,001         unsecured
    Bogan, Barbara             276    125,000          priority
    Buffoni, Jeff              583    300,000         unsecured
    Fayerman Lauren            571    250,000          priority
    Glassman Jordan           1472    310,000         unsecured
    Gordon, Elliott R. [Est.] 1676    120,000         unsecured
    Gordon, Sybil D.          1677    110 000         unsecured
    Kerr, William A.          1998    110,565         unsecured
    Parrish, Kelly L./J.K.    1780    103,594           secured
    Parrish, Kelly L./J.K.    1746    285,096           secured
    Petersen Consultants      1522    100,000           secured
    Power, Roy/Elizabeth     20101    123,002    administrative
    Rashbaum, Lois Ann        1109    105,000           secured
    Zinberg, Sheldon S.       1248    100,000           secured

(Weirton Bankruptcy News, Issue No. 32; Bankruptcy Creditors'
Service, Inc., 215/945-7000)  


WELLSFORD REAL: Posts $2,313,530 Net Loss in 2nd Quarter
--------------------------------------------------------
Wellsford Real Properties, Inc. (AMEX: WRP) reported second
quarter 2004 revenues of $8,540,073, and a net loss of
$(2,313,530).  For the comparable quarter in 2003, WRP reported
revenues of $7,307,634 and net loss of $(1,032,439).

For the six months ended June 30, 2004, Wellsford reported
revenues of $14,706,807 and a net loss of $(9,832,463). For the
corresponding 2003 period, WRP reported comparable revenues of
$13,941,184 and a net loss of $(556,157).

         Second Quarter 2004 and Subsequent Activities

                     Wellsford/Whitehall

At June 30, 2004, Wellsford had a 32.59% ownership interest in
Wellsford/Whitehall, a private joint venture that owned and
operated 24 properties (including 16 office properties, five net-
leased retail properties and three land parcels) aggregating
approximately 2,664,000 square feet of improvements, primarily
located in New Jersey and Massachusetts.

In July 2004, Wellsford/Whitehall completed a transaction whereby
it transferred six of its Massachusetts properties (aggregating
891,000 square feet), which were subject to mortgage debt of
$64,252,000 -- Nomura Loan -- at June 30, 2004, along with related
restricted cash balances aggregating $6,428,000, cash and certain
other consideration to a newly formed partnership which includes
the New England family that owned an aggregate 7.45% equity
interest in Wellsford/Whitehall, in exchange for the Family's
equity interests in Wellsford/Whitehall.  The Family also agreed
to eliminate an existing tax indemnity, which Wellsford/Whitehall
had to the Family's members.  As a result of this transaction,
Wellsford/Whitehall expects to record a loss of approximately
$5,000,000 during the three months ending September 30, 2004, of
which Wellsford's share is approximately $1,600,000.  As a result
of the redemption, Wellsford's interest in Wellsford/Whitehall
will increase to 35.21%.

                      Debt Default Update

Since March 2004, Wellsford/Whitehall had not made a portion of
its scheduled monthly debt service payments on the Nomura Loan.
The manager of Wellsford/Whitehall withheld these debt service
payments and met with the special servicer to present and discuss
various potential debt term alternatives.  The portion of the
scheduled payments not being made related to the amount by which
the debt service due each month exceeded the aggregate rent
receipts of the above mentioned six properties, which were payable
directly into a lockbox with the lender and were insufficient as a
result of low occupancy at these properties.  The special servicer
has agreed to waive default interest in connection with the
nonpayment and restructured the Nomura Loan with the Family
Partnership, which acquired the six properties.

Wellsford/Whitehall executed an amended agreement, effective April
1, 2004, extending its existing $106,000,000 loan with General
Electric Capital Corporation to December 31, 2006.  The loan is
collateralized by eight office properties in New Jersey and one in
Massachusetts. The loan also provides, subject to certain
conditions, for additional funding aggregating $16,000,000 through
December 31, 2005 for certain capital improvements for the
collateralized properties.

Wellsford/Whitehall had total assets of $266,285,000 and debt of
$194,201,000 at June 30, 2004.  At December 31, 2003, total assets
and debt were $277,120,000 and $201,659,000, respectively.

The aggregate portfolio occupancy was 46% at June 30, 2004 based
upon 2,664,000 gross leasable square feet. Considering the effect
of the July 2004 transaction with the Family, portfolio occupancy
would have been 51% at June 30, 2004 based upon 1,773,000 gross
leasable square feet.

                       Wellsford Capital

Second Holding is a special purpose finance company in which WRP
has an approximate 51% equity interest, or $23,011,000, at June
30, 2004.  Second Holding had total investments of $1,465,796,000
at June 30, 2004, of which 94% were rated AAA or AA by Standard &
Poor's.  Second Holding recorded a $13,230,000 impairment charge
related to the write-down of one of its investments during the
first quarter of 2004 to its deemed fair value as a result of an
other than temporary decline in the market value of bonds and
underlying aircraft collateral.  This investment was sold by
Second Holding during May 2004 and Second Holding recorded a
recovery of the impairment charge of $300,000 during the second
quarter of 2004 (of which Wellsford's share was $153,000).

The partners of Second Holding have agreed to cease making any
distributions to all partners (including the partner who has a 35%
income interest) until the impairment charge is recovered through
future earnings.

During the second quarter of 2004, the partner owning the 35%
income interest informed management of Second Holding that it
would not approve the purchase of any further investments, thereby
under the terms of the partnership agreement, preventing any
future acquisitions of investments.  The partners are evaluating
alternatives available to Second Holding in addition to holding
existing assets through respective maturities and then paying down
related debt.  As a consequence, operating income, fees to be
earned and cash flows to be received by Wellsford from Second
Holding will be reduced in the future.

During April 2004, WRP sold the 421 Chestnut Street property for
net proceeds of approximately $2,700,000.  This asset was the last
remaining asset from Wellsford's 1998 acquisition of Value
Property Trust.  Wellsford reversed approximately $625,000 of
previously recorded impairment reserves.  At June 30, 2004,
Wellsford recognized approximately $184,000 of the balance of the
proceeds, which had been placed in escrow from the sale of its
Keewaydin property in July 2003, as a result of the expiration of
the contingency period.  This amount and the reversal of the
impairment reserve are reflected in income from discontinued
operations during the three and six months ended June 30, 2004.

In October 2000, Wellsford and Prudential Real Estate Investors,
an affiliate of Prudential Life Insurance Company, organized
Clairborne Fordham which provided an aggregate of $34,000,000 of
mezzanine financing for the construction of Fordham Tower, a 50-
story, 227 unit, luxury condominium apartment project to be built
on Chicago's near northside -- Fordham Tower. Wellsford, which has
a 10% interest in Clairborne Fordham, fully funded its $3,400,000
share of the loan.  Wellsford and its partner in Clairborne
Fordham are negotiating an agreement with the owners of Fordham
Tower to take over ownership of the remaining 19 unsold units, as
well as the 188 space parking garage and 12,000 square feet of
retail space.  It is the intention of Clairborne Fordham to
complete the orderly sell-out of these components. Management of
Wellsford believes that this transaction, if it happens, will not
result in any loss to Clairborne Fordham or Wellsford.

                     Wellsford Development

At June 30, 2004, Wellsford had an 85.85% interest as managing
owner in Palomino Park, a five phase, 1,800 unit multifamily
residential development in Highlands Ranch, a south suburb of
Denver, Colorado. Three phases aggregating 1,184 units are
completed and operational as rental property. A 264 unit fourth
phase has been converted into condominiums. Sales commenced in
February 2001 and through June 30, 2004, Wellsford has sold 238
units. Wellsford is actively exploring the development and
construction of a 259-unit condominium project on the land for the
remaining fifth phase.

Physical occupancy for the Blue Ridge, Red Canyon and Green River
rental phases aggregated 96% and 88% at June 30, 2004 and December
31, 2003, respectively, however, significant rental concessions
continue to be given to tenants.

Wellsford sold 19 Silver Mesa condominium units for gross proceeds
of $4,658,000 during the quarter ended June 30, 2004 and 11 units
for gross proceeds of $2,461,000 in the comparable 2003 period.
For the six months ended June 30, 2004, Wellsford sold 29 Silver
Mesa units for gross proceeds of $6,944,000 and 16 units for gross
proceeds of $3,657,000 for the comparable 2003 period.

During June 2004, Wellsford purchased a 100 single-family home
site in East Lyme, Connecticut for approximately $6,200,000.
Wellsford is in the process of finalizing an agreement with a home
builder who would construct and sell the homes on the site and who
will have a 5% interest in the project and receive other
consideration. Wellsford is in the process of obtaining financing
for the project and is expecting to start construction during the
fourth quarter of 2004.

                           Corporate

Commenting on the activities of the first quarter, Jeffrey H.
Lynford, Chairman of the Board, stated, "We are persistent in our
efforts to simplify the Company's balance sheet and have been
working cooperatively with our several joint venture partners in
this regard.  Generally, properties and assets encumbered by
complex partnership agreements are illiquid and this depresses
value.  Our recent redemption of the Saraceno Family partnership
interests in the Wellsford/Whitehall venture is a fine example of
a successful initiative.  Meanwhile, the sales of condominiums at
our Palomino project are closing on schedule and Lazard Freres &
Co., LLC, continues its work to advise the Company's Board of
Directors regarding its strategic business alternatives."

Wellsford Real Properties, Inc. is a real estate merchant banking
firm organized in 1997 and headquartered in New York City which
acquires, develops, finances and operates real estate properties
and organizes and invests in private and public real estate
companies.


WESTPOINT STEVENS: Court Clears 5th Amendment to DIP Financing
--------------------------------------------------------------
WestPoint Stevens' DIP Credit Agreement was first amended on
July 24, 2003, and was further amended on September 30, 2003.
Because of the non-material nature of the First and Second
Amendments, the Debtors did not seek Bankruptcy Court approval.
The Bankruptcy Court approved a third amendment in November 2003.
A fourth amendment to the DIP Credit Agreement was non-material
and that did not require Bankruptcy Court approval.

                     One More Modification

John J. Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, in New
York, tells Judge Drain that the Debtors recently determined that
they could realize about $20 million in cash by proceeding with a
program of inventory rationalization.  However, an inventory
rationalization would result in a one-time hit to EBITDA that
would potentially impact the EBITDA covenants in the DIP Credit
Agreement.  Thus, in April 2004, the Debtors initiated
discussions with their DIP Lenders to adjust certain covenants in
the DIP Credit Agreement to allow for the proposed inventory
rationalization.

                     The Fifth Amendment

On July 2, 2004, the Debtors entered into the Fifth Amendment to
the DIP Credit Agreement with Bank of America, N.A., as
Administrative Agent; Wachovia Bank, N.A., as Syndication Agent;
and certain lenders.

Specifically, the Debtors and the DIP Lenders have agreed to
these amendments:

A. Definition of Inventory Liquidation Factor

    The Fifth Amendment provides for the addition of a new
    definition for Inventory Liquidation Factor:

    "Inventory Liquidation Factor" means the product obtained by
    multiplying:

    (a) the difference of:

           (i) the amount of inventory reported on the Borrowers'
               consolidated financial statements as of the last
               day of Borrowers' Fiscal Month December 2004,
               rounded down to the nearest $1,000,000, minus

          (ii) $330,000,000, by

    (b) 0.50;

    provided however, that in no event will the Inventory
    Liquidation Factor be less than zero.

B. Minimum EBITDA

    The DIP Credit Agreement contains certain minimum EBITDA
    covenants, which the Debtors are obligated to meet.  Pursuant
    to the Fifth Amendment, the Debtors will amend the dollar
    amounts of the existing Minimum EBITDA covenants.  In
    accordance with the Debtors' plan for inventory
    rationalization, the Debtors expect that there will be a
    negative effect on the Debtors' ability to achieve the
    existing EBITDA levels as currently defined in the DIP Credit
    Agreement.  The amended dollar amounts will afford the Debtors
    with a greater cushion to avoid potential defaults and breach
    of the covenants due to the inventory rationalization program.

                                Current Minimum    Amended Minimum
    Period                           EBITDA            EBITDA
    ------                      ---------------    ---------------
    Four consecutive Fiscal       $101,000,000       $95,000,000
    Quarters ending on the last
    day of the Fiscal Month of
    June 2004

    Four consecutive Fiscal        106,000,000        86,000,000
    Quarters ending on the last
    day of the Fiscal Month of
    September 2004

    Four consecutive Fiscal        104,000,000        80,000,000
    Quarters ending on the last                         plus the
    day of the Fiscal Month of                         Inventory
    December 2004                                    Liquidation
                                                          Factor

    Four consecutive Fiscal        104,000,000        80,000,000
    Quarters ending on the last
    day of the Fiscal Month of
    March 2005

C. Minimum Availability Covenant

    The Debtors will add language to Section 7.24 of the DIP
    Credit Agreement with respect to the minimum availability
    covenant.  Pursuant to the Fifth Amendment, the Debtors will
    maintain availability at all times of no less than
    $75,000,000, provided, however, that if no Default or Event of
    Default exists, the Debtors may maintain Minimum Availability
    of less than $75,000,000 but more than $60,000,000 for up to
    five business days in any one calendar month.

    In addition, the Fifth Amendment provides that in the event
    that EBITDA for the trailing 12 fiscal months falls below
    certain levels, the Debtors will be required to maintain
    certain levels of Minimum Availability.  The corresponding
    thresholds are:

                                                Minimum
    Period                      EBITDA        Availability
    ------                      ------        ------------
    06/2004                  $109,000,000      $75,000,000
    07/2004                   105,000,000       75,000,000
    08/2004                   104,000,000       75,000,000
    09/2004                    98,000,000       80,000,000
    10/2004                    94,000,000       80,000,000
    11/2004                    95,000,000       80,000,000
    12/2004                    90,000,000
                      (plus the Inventory
                       Liquidation Factor)
    01/2005                    90,000,000       90,000,000
    Each Month Thereafter      90,000,000       90,000,000

D. Amendment Fee

    In consideration of the Lenders' agreement to modify the
    existing DIP Credit Agreement, the Debtors will pay
    a $450,000 amendment fee.

Mr. Rapisardi asserts that the inventory rationalization will
provide significant cash for the benefit of the Debtors'
operations.  The Fifth Amendment is necessary in light of the
current levels of the Minimum EBITDA covenants.  The Debtors
believe that it is critical to the viability of their businesses,
as well as their reorganization efforts, to maintain their
ability to obtain loans, letters of credit and other extensions
of credit under the DIP Credit Agreement.

                      Some Lenders Grumble

Certain Prepetition Lenders indicated their intention to object
to the Original Fifth Amendment.  To resolve the objections, the
Debtors and Bank of America, N.A., as Administrative Agent,
Wachovia Bank, National Association, as Syndication Agent, and
the Lenders, have agreed to amend and restate the Original Fifth
Amendment.

The Amended and Restated Fifth Amendment provides that in the
event that EBITDA for the trailing 12 fiscal months falls below
certain levels, the Debtors will be required to maintain certain
levels of Minimum Availability.  These new thresholds require:

     For the 12 Fiscal          If EBITDA     Then Availablility
     Months Ending            is Less Than    Must be Greater Than
     -----------------        ------------    --------------------
     June 2004                $109,000,000       $75,000,000
     July 2004                 105,000,000        75,000,000
     August 2004               104,000,000        75,000,000
     September 2004             98,000,000        80,000,000
     October 2004               94,000,000        80,000,000
     November 2004              95,000,000        80,000,000
     December 2004              90,000,000        90,000,000
     January 2005               90,000,000        90,000,000
     Each Month thereafter      90,000,000        90,000,000

The new definition of "inventory liquidation factor" was deleted.

Accordingly, Judge Drain approves the Amended and Restated Fifth
Amendment to DIP Credit Agreement -- a full-text copy of which is
available for free at:

http://bankrupt.com/misc/Amended_and_restated_Fifth_amendment.pdf

(WestPoint Bankruptcy News, Issue No. 25; Bankruptcy Creditors'
Service, Inc., 215/945-7000)  

                           *********

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
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                          *********

S U B S C R I P T I O N   I N F O R M A T I O N

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