TCR_Public/040806.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Friday, August 6, 2004, Vol. 8, No. 164

                           Headlines

ACCLAIM ENTERTAINMENT: GMAC Extends Credit Facility to Aug. 20
ADELPHIA BUSINESS: Level 3 Settlement Gets Court Approval
ADVANCED X-RAY: Section 341(a) Meeting Slated for August 12
AIR CANADA: Jazz Wants to Make Pilot Pension Plan Contributions
AIRGAS INC: Richard Ill Succeeds Frank Roster as Director

AIRNET COMMS: Receives $1.1M Expansion Purchase Orders From Tecore
ALLEGHENY ENERGY: Selling W. Va. Natural Gas Facility for $228MM
ALLEGHENY ENERGY: Names Edward Dudzinski VP Human Resources
AMERICAN HOMEPATIENT: Reports $32.2MM Equity Deficit at June 30
AMERICAN MOTOR: Case Summary & 19 Largest Unsecured Creditors

AMERIDEBT: Wants to Hire Gross Mendelsohn as Accountants
ANTOINE DU CHEZ: Case Summary & 20 Largest Unsecured Creditors
ARMSTRONG HOLDINGS: Brings Dist. Ct. Judge Rebreno Up to Speed
BELL CANADA: Inks Pact to Monetize Some Non-Capital Tax Losses
BELL CANADA: Reports $4.8 Million Net Loss for 2004 Second Quarter

BELL CANADA: Apellate Court Dismisses Two Class Action Lawsuits
BIOVAIL CORPORATION: Several Changes to Executive Management Team
BLACK WARRIOR: Subordinated Noteholders Consent to Multi-Shot Sale
BOWER PARTNERSHIP: Voluntary Chapter 11 Case Summary
BUCYRUS INTERNATIONAL: Moody's Withdraws Junk Ratings after IPO

CATHOLIC CHURCH: Court Bars Sussman Shank from Specific Matters
DIVERSIFIED CORPORATE: Hires Advisor & Lender Agrees to Forbear
DP 8 L.L.C.: Voluntary Chapter 11 Case Summary
ELANTIC TELECOM: U.S. Trustee Names 6-Member Creditors' Committee
ENDEAVOUR GOLD: US$1.1 Mil. Phase 1 Exploration Program Underway

ENDURANCE SPECIALTY: Appoints Norman Barham to Board of Directors
ENRON: Wants Solicitation Period Preserved Until Appeals Resolved
ENTERPRISE PRODS: Launches Tender Offers for GulfTerra Sr. Notes
FC CBO III: S&P Cuts Rating on Class B Notes to 'CCC'
FLEMING COMPANIES: Agrees to Transfer $55M to Trust to Pacify CHEP

FLOTEK INDUSTRIES: Says $1.97 Mil. Sales in July is Highest Ever
GE CAPITAL: Fitch Gives Low B-Ratings to 2 Mortgage-Backed Classes
HOLLINGER INT'L: Moody's Outlook Positive After Debt Repayment
INFRASOURCE SERVICES: Inks EnStructure & Utili-Trax Acquisitions
J.P. MORGAN: Moody's Downgrades & Junks Certain Mortgage Notes

JACUZZI BRANDS: Fitch Affirms Single-B Senior Secured Debt Rating
JUGOBANKA A.D.: Bank Regulators Want N.Y. Court Ruling Reversed
KENDRICK ENGG: Voluntary Chapter 11 Case Summary
KILROY REALTY: Closes $144 Mil. Unsecured Debt Private Placement
LANTIS EYEWEAR: Committee Signs-Up Arent Fox as Attorneys

LINDSAY MORDEN: Karen Murphy Resigns as President and CEO
MICROFINANCIAL INC: Senior Credit Facility Cut to $16.6 Million
MIRANT: U.S. Trustee Amends Equity Security Holders' Committee
MORGAN STANLEY: Fitch Retains Junk Ratings & Affirms Low-B Classes
MORGAN STANLEY: S&P Affirms Junk Ratings on Mortgage-Backed Notes

MRO ACQUISITION: Moody's Assigns Low-B Ratings to Loan Facilities
NATIONAL CENTURY: JPMorgan Chase Bills $975,062 for Services
NEW WEATHERVANE: Panel Wants to Hire BDO Seidman as Accountants
NEXPAK CORP: U.S. Trustee Appoints 5-Member Creditors' Committee
NOVEON INC: Fitch Withdraws BB- Senior Debt Ratings

OWENS CORNING: Debtors & Asbestos Committees Back Wolin's Advisors
PACIFIC GAS: Presents Long-Term Energy Resource Plan to Commission
PEGASUS SATELLITE: Committee Taps Greenhill as Financial Advisor
PILLOWTEX: Revises Bidding Protocol for Hanover, Pa. Property Sale
PPM AMERICA: Fitch Places Junk A-3 Note Rating on Watch Negative

RAPTOR INVESTMENTS: Structures Program to Continue Debt Reduction
RCN CORP: Subsidiary Files for Chapter 11 Protection in New York
RCN CABLE TV: Case Summary & 11 Largest Unsecured Creditors
RCN: Gets Final Okay to Hire AP Services as Crisis Managers
RELIANCE: Committees Wants to Ensure Viability of Tax Benefits

RUSSEL METALS: Senior Executives Exercise Stock Options
SOLUTIA INC: Settles Mundy's $529,326 Claim with Contract Award
SPECTRASCIENCE: Gets Court Confirmation on Reorganization Plan
SPIEGEL GROUP: New Hampton Property Auction Set for Sept. 15
SUN HEALTHCARE: June 30 Balance Sheet Insolvent by $108.2 Million

URS CORPORATION: Wins USACE's Multiple Award Remediation Contract
VOEGELE MECHANICAL: Case Summary & Largest Unsecured Creditors
WEIRTON STEEL: State Balks at Disallowing Frontier Insurance Claim
WESTPOINT STEVENS: Renews Modified Headquarters Lease
WILLIS LEASE: Renews $126 Million Revolving Credit Facility

WORLDSPAN LP: Moody's Low-B & Junk Ratings
XEROX CORP: Expects $400 Million from Senior Debt Offering

* BOOK REVIEW: Merchants of Debt

                           *********


ACCLAIM ENTERTAINMENT: GMAC Extends Credit Facility to Aug. 20
--------------------------------------------------------------
Acclaim Entertainment, Inc.'s (Nasdaq: AKLM), primary lender, GMAC
Commercial Finance LLC, agreed to extend GMAC's previously
announced termination of the Company's credit facility while the
Company continues discussions with a proposed new lender until
August 20, 2004.

The Company also announced that it is working with a new lender
for a proposed Senior Secured Credit Facility of up to
$65,000,000, which would be secured by the Company's assets, to
replace the GMAC loan facility and to finance the Company's
working capital needs.  The proposed Senior Secured Credit
Facility would be subject to, among other things, the completion
of satisfactory due diligence by the new lender, the execution and
delivery of definitive legal documentation by both the Company and
the new lender and customary closing conditions for similar loan
transactions.  The Company contemplates that the closing of the
proposed Senior Secured Credit Facility would occur on or about
the August 20, 2004 expiration date of the GMAC facility.

In June, Acclaim paid $150,000 to GMAC for waivers of covenant
defaults and a 45-day extension of the credit agreement through
Aug. 4.  Acclaim advised GMAC in early May that it breached seven
financial covenants buried in the loan documents providing up to
$22,000,000 of financing.  Copies of the May and June Waiver and
Extension Agreements are available at no charge at:


http://www.sec.gov/Archives/edgar/data/804888/000119312504107146/dex1048.htm

                                 and


http://www.sec.gov/Archives/edgar/data/804888/000119312504107146/dex1048.htm


                  About Acclaim Entertainment

Based in Glen Cove, New York, Acclaim Entertainment, Inc., is a
worldwide developer, publisher and mass marketer of software for
use with interactive entertainment game consoles including those
manufactured by Nintendo, Sony Computer Entertainment and
Microsoft Corporation as well as personal computer hardware
systems.  Acclaim owns and operates five studios located in the
United States and the United Kingdom, and publishes and
distributes its software through its subsidiaries in North
America, the United Kingdom, Australia, Germany, France and
Spain.  The Company uses regional distributors worldwide.  Acclaim
also distributes entertainment software for other publishers
worldwide, publishes software gaming strategy guides and issues
"special edition" comic magazines periodically.  Acclaim's
corporate headquarters are in Glen Cove, New York and Acclaim's
common stock is publicly traded on NASDAQ.SC under the symbol
AKLM. For more information please visit our website at
http://www.acclaim.com/

At March 31, 2004, Acclaim Entertainment's balance sheet
reflects a $97,983,000 stockholders' deficit, compared to a
$55,088,000 deficit at March 31, 2003.


ADELPHIA BUSINESS: Level 3 Settlement Gets Court Approval
---------------------------------------------------------
In December 1999, Adelphia Business Solutions, Inc., executed
three agreements with Level 3 Communications, LLC:

    * Cost Sharing Metro IRU Agreement
    * Cost Sharing Intercity IRU Agreement
    * Master Joint Build Agreement

Matthew Borger, Esq., at Klehr Harrison Harvey Branzburg & Ellers,
in Wilmington, Delaware, relates that under the Metro and
Intercity Agreements, ABIZ acquired a 20-year exclusive
indefeasible right of use in certain of Level 3's conduit
facilities.  ABIZ had the right to assign the rights and interests
in the Metro and Intercity Agreements to an affiliate.

On December 31, 2000, ABIZ sold its assets and properties in 9
CLEC markets to a debtor affiliate of Adelphia Communications
Corporation, ACC Operations, Inc., including the Denver, Los
Angeles and San Diego markets.  ACC Operations agreed to assume
ABIZ's liabilities existing as of the date of the agreement and
arising after the closing under the agreements, licenses, permits
and other instruments related to the acquired system.  ABIZ
continued to manage the properties under a separate management
agreement.

Subsequently, ACC Operations assigned its rights and obligations
relating to the 9 CLEC markets to Adelphia Communications debtor-
affiliate, ACC Telecommunications Holdings, LLC, which further
assigned those rights and obligations to another debtor-affiliate
ACC Telecommunications, LLC.

                Disputes Under the Metro Agreement

Various disputes arose between ABIZ and Level 3 with regards to
the Metro Agreement.  To resolve their disputes, ABIZ and Level 3
entered into a settlement agreement releasing each other from any
amounts owed under the Metro Agreement up to and including
January 1, 2003.

The settlement also modified the Metro Agreement to reflect that
the conduit rights in the Denver, Los Angeles and San Diego Local
Segments were previously transferred to Adelphia as part of the
sale of all substantially all of ABIZ's assets, provided that
Adelphia agreed in writing to be bound by the terms in the Metro
Agreement with respect to the conduit it purchased.

Consequently, disputes arose between Level 3 and Adelphia
regarding their rights and obligations under the Metro Agreement.
Adelphia and Level 3 negotiated a business transaction whereby
Level 3 and Adelphia intend to enter into a mutually acceptable
framework agreement for the provision of Intercity and
Metropolitan Dark Fiber in North America.  Pending the negotiation
and execution of the Definitive Agreement, the Parties entered
into interim agreements.

               Adelphia & Level 3 Interim Agreements

A. March 16, 2004 Letter Agreement

    The ACOM Debtors disclaim, forfeit and surrender to Level 3
    all rights, titles or interests in or to the Relevant Conduit
    or Conduit Fiber, which the ACOM Debtors may have, or claims
    within the Local Segments in Denver, Los Angeles and San
    Diego, including any right, title or interest in and to that
    Relevant Conduit and Conduit Fibers.  The ACOM Debtors also
    release Level 3 from all liabilities, claims, or causes of
    action related to the Denver, Los Angeles and San Diego Local
    Segments under the Metro Agreement.

B. March 17, 2004 Letter Agreement

    The Parties agree to complete the Definitive Agreement.  Level
    3 will provide Adelphia with metropolitan dark fiber in
    Denver, Colorado, and Miami, Florida segments under these
    terms:

       -- The design, planning, engineering and IRU fee are
          waived;

       -- The recurring charge will be reduced to $200 per route
          mile per year; and

       -- Adelphia will not be responsible for reimbursing Level 3
          for costs associated with relocation or maintenance.

C. Intercity and Metro IRU Agreements

    Adelphia may obtain the right to use high fiber count fiber
    optic cable in the Level 3 System pursuant to a framework
    established in the Intercity and Metro IRU Agreement.  The IRU
    Agreements also set out the nature of rights to be granted and
    the rights and responsibilities of the grantor and grantee.

Mr. Borger notes that the Settlement provides Adelphia immediate
access to dark fiber as well as a business framework where it can
acquire indefeasible right to use fibers and other facilities
within the Level 3 system.  Furthermore, the Settlement will
eliminate litigation costs and expenses in the Metro Agreement
dispute.

Judge Gerber promptly approves the Settlement.

Headquartered in Coudersport, Pennsylvania, Adelphia Business
Solutions, Inc., now known as TelCove -- http://www.adelphia-
abs.com/ -- is a leading provider of facilities-based integrated
communications services to businesses, governmental customers,
educational end users and other communications services providers
throughout the United States.  The Company filed for Chapter 11
protection on March March 27, 2002 (Bankr. S.D.N.Y. Case No. 02-
11389) and emerged under a chapter 11 plan on April 7, 2004.
Harvey R. Miller, Esq., Judy G.Z. Liu, Esq., Weil, Gotshal &
Manges LLP represent the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed $ 2,126,334,000 in assets and $1,654,343,000 in debts.

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: Section 341(a) Meeting Slated for August 12
-----------------------------------------------------------
The United States Trustee will convene a meeting of Advanced
X-Ray, Inc.'s creditors at 10:00 a.m., on August 12, 2004, in Room
365 at the Russell Federal Building located at 75 Spring Street
S.W. in Atlanta, Georgia.  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 Buford, Georgia, Advanced X-Ray --
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).
Frank B. Wilensky, Esq., at Macey, Wilensky, Cohen, Wittner &
Kessler, LLP, represents the Debtor in its restructuring.  When
the Debtor filed for protection from its creditors, it listed less
than $1 million in assets, and more than $1 million in debts.


AIR CANADA: Jazz Wants to Make Pilot Pension Plan Contributions
---------------------------------------------------------------
Air Canada asks Mr. Justice Farley to amend the Initial CCAA
Order to permit Jazz Air, Inc., to make contributions to the Jazz
Air, Inc., Defined Benefit Pension Plan for Pilots.

Jazz Air intends to pay:

   (1) the amortization of the post-service unfunded liability
       identified in the January 1, 2001 actuarial valuation
       report with respect to the Pension Plan for the period
       from March 1, 2003 to December 1, 2003; and

   (2) the current service cost -- less employee contributions
       and the amounts remitted or to be remitted pursuant to the
       Court orders dated April 27, 2004 and June 23, 2004 -- and
       special payments related to the amortization of the past
       service unfunded liability identified in the January 1,
       2004 actuarial valuation report with respect to the Plan
       for the period from January 1, 2004 to June 30, 2004.

Currently, the Initial CCAA Order does not permit Jazz Air to make
employer contributions to the Pension Plan without Court approval.

Colin Copp, labor relations director at Jazz Air, relates that
under the January 1, 2001 actuarial valuation report, Jazz Air's
required employer contributions were equal to 62.03% of the
employee contributions with respect to the current service plus a
$2,450 monthly special payment with respect to a past service
unfunded liability.  On the Petition Date, all required employer
contributions for periods up to February 28, 2003 had been
remitted.

On December 10, 2003, the Court amended the Initial CCAA Order to
authorize Jazz Air to remit the outstanding 2003 employer current
service contributions for the period from March 1, 2003 to
December 31, 2003 to the Pension Plan.  The amendment did not
authorize Jazz Air to remit outstanding contributions related to
the amortization of the past service unfunded liability.
According to Mr. Copp, $24,500 in contributions for the period
from March 1, 2003 to December 31, 2003 related to the
amortization of the past service unfunded liability remains
outstanding.

No contributions have been made in 2004 to amortize the past
service unfunded liability identified in the 2001 valuation
report.

On June 29, 2004, Jazz Air filed a triennial report on the
actuarial valuation of the Pension Plan as at January 1, 2004 with
the Office of the Superintendent of Financial Institutions.  The
2004 report requires:

   -- the employer current service contributions to be equal to
      105.35% of the employee contributions; and

   -- the monthly contribution required to amortize the past
      service unfunded liability to be $45,700.

The minimum contribution requirements outlined in the 2004 report
are retroactive to January 1, 2004.

The amount outstanding related to the increase in employer current
service contributions for the period from January 1, 2004 to June
30, 2004 is $724,650.  The amount outstanding related to the
amortization of the past service unfunded liability for the period
from January 1, 2004 to June 30, 2004 is $274,200.

After the current service contributions authorized by the June
2004 amendment to the Initial CCAA Order, the total outstanding
contributions for the period from March 1, 2003 to June 30, 2004
is $1,023,350.

Headquartered in Saint-Laurent, Quebec Canada, Air Canada --
http://www.aircanada.ca/-- represents Canada's only major
domestic and international network airline, providing scheduled
and charter air transportation for passengers and cargo. The
Company filed for CCAA protection on April 1, 2003 (Ontario
Superior Court of Justice, Case No. 03-4932) and Section 304
petition with the U.S. Bankruptcy Court for the Southern District
of New York (Case No. 03-11971).  Matthew A. Feldman, Esq., and
Elizabeth Crispino, Esq., at Willkie Farr & Gallagher serve as the
Debtors' U.S. Counsel.  When the Debtors filed for protection from
its creditors, they listed C$7,816,000,000 in assets and
C$9,704,000,000 in liabilities. (Air Canada Bankruptcy News, Issue
No. 43; Bankruptcy Creditors' Service, Inc., 215/945-7000)


AIRGAS INC: Richard Ill Succeeds Frank Roster as Director
---------------------------------------------------------
Airgas, Inc. (NYSE:ARG) reported the election of Richard C. Ill to
a three-year term on its Board of Directors to fill the position
previously held by Frank B. Foster, III, who has reached the
mandatory retirement age.  Mr. Ill's term began with the
completion of Wednesday's Annual Meeting and will expire after the
2007 Annual Meeting.

"Rick Ill will offer another strong independent voice on our board
and I look forward to his contributions in the coming years," said
Airgas Chairman and Chief Executive Officer Peter McCausland.  "I
also want to thank Frank Foster for his 18 years of service to
Airgas.  He has been a valued voice on our Board."

Mr. Foster has been chairman of DBH Associates, a venture
capital/consulting firm, since 1987. He was president and CEO of
Diamond-Bathurst, Inc., a publicly held manufacturer of glass
containers, from 1975 until he founded DBH.  He also has served as
a director of FinCom Corporation, 1838 Investment Advisors Funds,
OAO Technology Solutions, Inc., and National Welders Supply
Company, Inc., Mr. Foster has been a director of the Company since
1986.

"Frank's experience as an executive and a board member has been
tremendously helpful over the years. I am personally grateful to
Frank for his support and encouragement," Mr. McCausland said.

Mr. Ill has been president and chief executive officer of Triumph
Group, Inc., a company that designs, manufactures, repairs and
overhauls aircraft and industrial gas turbine components, since
1993.  In addition to serving as a director of Triumph, he also
serves as a director of P.H. Glatfelter Company and is a member of
the board of governors of The Aerospace Industry Association and
the advisory board of Outward Bound, USA.

Mr. McCausland commented, "Rick deals with CEO challenges every
day and will be a great resource for Airgas and me personally. His
acquisition experience will also be very helpful. We welcome Rick
to the Airgas Board of Directors."

                        About Airgas, Inc.

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


AIRNET COMMS: Receives $1.1M Expansion Purchase Orders From Tecore
------------------------------------------------------------------
AirNet Communications Corporation (Nasdaq:ANCC), the technology
leader in software defined base station products for wireless
communications, has received approximately $1.1 million in
expansion purchase orders from TECORE Wireless Systems for
deployment in the Afghan Wireless mobile network.  These orders
are for the purchase of AirNet's latest AdaptaCell(R) 4000 base
station and services.

"With the assistance of AirNet's world-class customer service, we
have recently optimized and enhanced our network performance and
expanded our subscriber base," said Tom Bosley, chief operating
officer of Telephone Systems International, Inc., Afghan Wireless'
largest stockholder.  "In the GSM world, the voice quality of
AirNet's product is remarkable.  This purchase is enabling Afghan
Wireless to provide our customers with high caliber services."

"Our solid execution, quality products and strong local support
have resulted in Afghan Wireless entrusting us with their
business," said Jay Salkini, Chairman and CEO for TECORE Wireless
Systems.  "Together with AirNet, we've been with Afghan Wireless
since the beginning in 2002 and supported Afghanistan's growing
demand for mobile wireless service."

"AirNet is very proud to have contributed to the success of the
Afghan Wireless network," said Glenn Ehley, president and CEO for
AirNet.  "We have repeatedly demonstrated our ability to deliver
innovative solutions in a complex environment.  Our newest product
line, the AdaptaCell 4000, has proven to be a robust and
competitive product in the GSM marketplace."

Afghan Wireless is Afghanistan's largest provider of
telecommunications services, with GSM mobile networks in fifteen
Afghan cities: Kabul, Jalalabad, Mazar-i-sharif, Kandahar, Herat,
Kunduz, Baglan, Puli Kumri, Talaqan, Logar, Puli Aman, Bagram,
Charikar, Jabal Saraj and Serobir.  The company launched
Afghanistan's first wireless communications service in April 2002.
Afghan Wireless is licensed to provide GSM service nationally
until 2018.  It is a joint venture between Telephone Systems
International, Inc., and the Ministry of Communications.

                          About Tecore

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

                         About AirNet

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

                         *     *     *

As reported in the Troubled Company Reporter's March 10, 2004
edition, Deloitte & Touche LLP expressed doubt about AirNet
Communications Corporation's ability to continue as a going
concern following a review of the company's financial statements
for the year ended December 31, 2003.  Deloitte expressed similar
doubts in fiscal years 2001 and 2002.


ALLEGHENY ENERGY: Selling W. Va. Natural Gas Facility for $228MM
----------------------------------------------------------------
Monongahela Power Company, a subsidiary of Allegheny Energy, Inc.
(NYSE: AYE), has signed a definitive agreement to sell its natural
gas operations in West Virginia to a partnership composed of IGS
Utilities LLC, IGS Holdings LLC and affiliates of ArcLight Capital
Partners, LLC for $141 million in cash and $87 million in assumed
long-term debt, subject to certain closing adjustments.  In
addition, the buyer will settle certain inter-company accounts
over a three-year period.  The current estimate of these amounts
is approximately $16 million.  Proceeds from the sale will be used
to reduce debt.

"The sale of our West Virginia natural gas operations is another
milestone in our financial recovery plan," stated Paul J. Evanson,
Chairman and CEO of Allegheny Energy. "By selling this business,
we can now focus better on our core electric generation and
delivery business."

Allegheny expects to record a loss on the sale of approximately
$40 million ($25 million, net of income taxes) in the third
quarter of 2004.  The agreement is subject to certain closing
conditions, third party consents, and state and federal regulatory
approvals, including approval of a rate adjustment from the Public
Service Commission of West Virginia.  Closing of the sale is
expected to be completed in early 2005.  J.P. Morgan Securities
Inc. acted as financial advisor to Allegheny Energy in the
transaction.

The sale includes Mountaineer Gas Company, a subsidiary of
Monongahela Power, and the West Virginia Power Gas Services
assets, both of which do business in West Virginia as Allegheny
Power; and Mountaineer Gas Services, a subsidiary of Mountaineer
Gas.  As part of the transaction, the employees assigned to the
natural gas business will be transferred to Mountaineer Gas
Company, and the Company will continue to honor all collective
bargaining agreements.  In addition, Allegheny will provide
certain transition services.

                          The Buyer

The buyer is a partnership formed by IGS Utilities LLC, IGS
Holdings LLC and affiliates of ArcLight Capital Partners LLC.  The
principals of the IGS Entities, privately held West Virginia
limited liability companies, have been involved in all facets of
the natural gas industry since the mid-1980s.  ArcLight Capital
Partners LLC is one of the world's leading energy infrastructure
investing firms.  ArcLight invests throughout the energy industry
value chain in hard assets that produce current income as well as
capital appreciation.

                       Allegheny Energy

Headquartered in Greensburg, Pennsylvania, Allegheny Energy is an
integrated energy company with a portfolio of businesses,
including Allegheny Energy Supply, which owns and operates
electric generating facilities, and Allegheny Power, which
delivers low-cost, reliable electric and natural gas service to
about four million people in Pennsylvania, West Virginia,
Maryland, Virginia and Ohio. More information about Allegheny
Energy is available at http://www.alleghenyenergy.com/

                         *     *     *

As reported in the Troubled Company Reporter's March 18, 2004,
edition, Fitch Ratings affirmed and removed from Rating Watch
Negative the ratings of Allegheny Energy, Inc. and the utility
subsidiaries:

     Allegheny Energy, Inc.

        -- Senior unsecured debt 'BB-';
        -- 11-7/8% notes due 2008 'B+'.

     Allegheny Capital Trust I

        -- Trust preferred stock 'B+'.

     West Penn Power Company

        -- Medium-term notes and senior unsecured 'BBB-'.

     Potomac Edison Company

        -- First mortgage bonds 'BBB';
        -- Senior unsecured notes 'BBB-'.

     Monongahela Power Company

        -- First mortgage bonds 'BBB';
        -- Medium-term notes 'BBB-';
        -- Pollution control revenue bonds (unsecured) 'BBB-';
        -- Preferred stock 'BB+'.

The Rating Outlook is Stable, Fitch says.

Fitch withdrew its 'BB-' rating of Allegheny Energy, Inc.'s former
bank credit facility maturing in January 2005 as that bank
credit facility has been terminated and replaced.


ALLEGHENY ENERGY: Names Edward Dudzinski VP Human Resources
-----------------------------------------------------------
Allegheny Energy, Inc. (NYSE: AYE) named Edward Dudzinski,
formerly DuPont's Vice President, Human Resources for the
Agriculture and Nutrition Platform and Pioneer Hi-Bred
International, Inc., as Vice President of Human Resources,
effective August 9, 2004.  He will report to Paul J. Evanson,
Chairman, President and CEO.

"Ed brings a wealth of knowledge to Allegheny and is a strong
addition to our senior leadership team. As we steadily build a
high performance organization, his business acumen and experience
in aligning a people strategy and performance management to
business results will be critical to our success," said Mr.
Evanson.

Mr. Dudzinski spent 14 years with DuPont in various human
resources positions in the United States and Europe, which
included significant experience in strategy development, labor
relations, and business leadership.  Prior to DuPont, he was with
Consolidation Coal Company for 15 years.  Mr. Dudzinski received
his Bachelor of Science degree in Biology from California State
University.

Consistent with the New York Stock Exchange listing standards,
Allegheny Energy stated that Mr. Dudzinski will receive an
inducement award of 25,000 stock units on August 9, 2004.  One-
fifth of the units vest on each August 9 beginning in 2005 through
2009. Payment of the units will be made in shares of Allegheny
Energy stock.

                       Allegheny Energy

Headquartered in Greensburg, Pennsylvania, Allegheny Energy is an
integrated energy company with a portfolio of businesses,
including Allegheny Energy Supply, which owns and operates
electric generating facilities, and Allegheny Power, which
delivers low-cost, reliable electric and natural gas service to
about four million people in Pennsylvania, West Virginia,
Maryland, Virginia and Ohio.  More information about Allegheny
Energy is available at http://www.alleghenyenergy.com/

                         *     *     *

As reported in the Troubled Company Reporter's March 18, 2004
edition, Fitch Ratings affirmed and removed from Rating Watch
Negative the ratings of Allegheny Energy, Inc. and the utility
subsidiaries:

     Allegheny Energy, Inc.

        -- Senior unsecured debt 'BB-';
        -- 11-7/8% notes due 2008 'B+'.

     Allegheny Capital Trust I

        -- Trust preferred stock 'B+'.

     West Penn Power Company

        -- Medium-term notes and senior unsecured 'BBB-'.

     Potomac Edison Company

        -- First mortgage bonds 'BBB';
        -- Senior unsecured notes 'BBB-'.

     Monongahela Power Company

        -- First mortgage bonds 'BBB';
        -- Medium-term notes 'BBB-';
        -- Pollution control revenue bonds (unsecured) 'BBB-';
        -- Preferred stock 'BB+'.

The Rating Outlook is Stable, Fitch says.

Fitch withdrew its 'BB-' rating of Allegheny Energy, Inc.'s former
bank credit facility maturing in January 2005 as that bank
credit facility has been terminated and replaced.


AMERICAN HOMEPATIENT: Reports $32.2MM Equity Deficit at June 30
---------------------------------------------------------------
American HomePatient, Inc. (OTCBB:AHOM) reported net income of
$1.0 million and revenues of $83.3 million for the second quarter
ended June 30, 2004.  For the six months ended June 30, 2004, the
Company reported net income of $2.0 million and revenues of $168.1
million.

The Company's net income of $1.0 million for the second quarter of
2004 compares to net income of $4.5 million for the second quarter
of 2003.  Net income for the current quarter includes
approximately $0.1 million of reorganization items.  Net income
for the second quarter of 2003 included approximately $2.0 million
of reorganization items and excluded approximately $5.0 million in
non-default interest expense that would have been paid had the
Company not sought bankruptcy protection.  The Company's net
income of $2.0 million for the first six months of 2004 compares
to net income of $8.9 million for the first six months of 2003.
Net income for the first six months of 2004 includes approximately
$0.1 million of reorganization items.  Net income for the first
six months of 2003 included approximately $2.9 million of
reorganization items and excluded approximately $10.0 million in
non-default interest expense that would have been paid had the
Company not sought bankruptcy protection.

The Company's revenues of $83.3 million for the second quarter of
2004 represent an increase of $0.4 million, or 0.5%, over the
second quarter of 2003.  The Company's revenues of $168.1 million
for the first six months of 2004 represent an increase of $2.7
million, or 1.6%, over the first six months of 2003. Revenues in
the current quarter and first six months of 2004 were reduced by
approximately $1.8 million, or 2.2%, and $3.7 million, or 2.2%,
respectively, as a result of an approximate 15.8 % reduction in
the Medicare reimbursement rates for inhalation drugs effective
January 1, 2004.  The sale of inhalation drugs comprised
approximately 12% of the Company's total revenues for the second
quarter and first six months of 2004.

Earnings before interest, taxes, depreciation, and amortization is
a non-GAAP financial measurement that is calculated as net income
excluding interest, taxes, depreciation and amortization.  EBITDA
for the second quarter of 2004 and for the second quarter of 2003
was $12.6 million and $10.6 million, respectively. For the second
quarter of 2004, adjusted EBITDA (calculated as EBITDA excluding
reorganization items and other income/expense) was $12.6 million
or 15.2% of revenues. For the second quarter of 2003, adjusted
EBITDA was $12.6 million or 15.2% of revenues. EBITDA for the
first six months of 2004 and for the first six months of 2003 was
$24.7 million and $20.6 million, respectively.  For the first six
months of 2004, adjusted EBITDA was $24.7 million or 14.6% or
revenues. For the first six months of 2003, adjusted EBITDA was
$23.6 million or 14.2% of revenues.

Bad debt expense for the second quarter and first six months of
2004 increased by approximately $1.5 million and $1.2 million,
respectively, compared to the same periods of 2003.  Bad debt
expense in the current year has been impacted by disruptions in
cash collections resulting from the inability of certain third-
party payors to effectively process electronic claims due to the
implementation of the new HIPAA Transaction and Code Sets. Also
impacting bad debt expense has been payment delays associated with
certain state Medicaid programs changing the intermediary
contracted by the state to process claims submitted by the
providers. Despite the increase in bad debt expense, total
operating expenses were essentially flat in the second quarter of
2004 compared to the second quarter of 2003 and decreased by
approximately $0.2 million in the first six months of 2004
compared to the same period in 2003.  Reductions in personnel-
related expenses, travel expenses, and other miscellaneous
operating expenses have offset the higher bad debt expense in the
second quarter and first six months of 2004.

At June 30, 2004, American HomePatient, Inc.'s balance sheet
showed a $32,209,000 stockholders' deficit, compared to a
$34,249,000 deficit at December 31, 2003.

                         About the Company

American HomePatient, Inc. is one of the nation's largest home
health care providers with 283 centers in 35 states. Its product
and service offerings include respiratory services, infusion
therapy, parenteral and enteral nutrition, and medical equipment
for patients in their home. American HomePatient, Inc.'s common
stock is currently traded in the over-the-counter market or, on
application by broker-dealers, in the NASD's Electronic Bulletin
Board under the symbol AHOM or AHOM.OB


AMERICAN MOTOR: Case Summary & 19 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: American Motor Inn Partnership
        dba Days Inn East
        11639 East Colonial Drive
        Orlando, Florida 32817

Bankruptcy Case No.: 04-08787

Type of Business: The Debtor owns a hotel.

Chapter 11 Petition Date: August 2, 2004

Court: Middle District of Florida (Orlando)

Judge: Arthur B. Briskman

Debtor's Counsel: R. Scott Shuker, Esq.
                  Gronek & Latham, LLP
                  P.O. Box 3353
                  Orlando, FL 32802
                  Tel: 407-481-5800

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 19 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Days Inn Worldwide Inc.       Royalties/Fees             $11,500

Guest Distribution            Trade debt                  $2,480

Progress Energy Corp.         Utilities                   $1,930

Ecolab                        Trade debt                  $1,250

US Lec                        Trade debt                  $1,245

Orange County Utilities       Utilities                   $1,188

TECO People Gas               Utilities                     $475

Heritage Propane              Trade debt                    $247

Bellsouth                     Telephone                      $75

US Today                      Trade debt                     $42

Academy Pool Svc. & Supplies  Trade debt                 Unknown

Bright House Networks         Cable service              Unknown

Certified HR Services         Employee Lease             Unknown

Keene & Company               Accounting Services        Unknown

Neoguard                      Trade debt                 Unknown

No Am Office Supply           Trade debt                 Unknown

Onity                         Trade debt                 Unknown

Orange City Bd. of            Trade debt                 Unknown
City Comm.

Secure Research               Trade debt                 Unknown


AMERIDEBT: Wants to Hire Gross Mendelsohn as Accountants
--------------------------------------------------------
AmeriDebt, Inc., asks the U.S. Bankruptcy Court for the District
of Maryland for permission to retain Gross Mendelsohn &
Associates, PA, as its accountants.

AmeriDebt expects Gross Mendelsohn to:

   a) provide general accounting assistance;

   b) assist in the preparation of required Court filings,
      including monthly operating reports;

   c) audit year-end financial statements;

   d) prepare tax returns;

   e) provide accounting support required by AmeriDebt in
      connection with the formulation of a plan of
      reorganization;

   f) provide expert testimony; and

   g) provide tax and other accounting-related professional
      advice.

Lawrence E. McCanna informs the Debtor that Gross Mendelsohn
professional rates range from $90 per hour for junior accountants
to $250 per hour for partners of the firm.

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.


ANTOINE DU CHEZ: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Antoine du Chez, Inc.
        dba Antoine du Chez Salon & Day Spa
        300 Josephine Street, Suite 210
        Denver, Colorado 80206

Bankruptcy Case No.: 04-26715

Type of Business: The Debtor cuts hair, sells hair products, and
                  offers day spa, facial and nail services.

Chapter 11 Petition Date: August 3, 2004

Court: District of Colorado (Denver)

Judge: Howard R Tallman

Debtor's Counsel: David M. Miller, Esq.
                  Kutner Miller Kearns, P.C.
                  303 East 17th Avenue, Suite 500
                  Denver, Colorado 80203
                  Tel: 303-832-2400

Estimated Assets: $1 Million to $10 Million

Estimated Debts: $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                               Claim Amount
------                               ------------
Flatiron Holding, LLC                     $95,727

Denver Pavillions                         $89,306

Greenwood 7939 Loan                       $58,508

G&I IV Belleview, LLC                     $41,874

CSG                                       $36,145

Stylelines                                $31,466

Dex Media East, LLC                       $24,607

G.S. Centennial/Developers                $24,396
Diversified

Kirkpatrick & Bertrand                    $20,858

Wells Fargo Bank                          $14,058

Semple Brown                              $11,185

Xcel Energy                                $8,234

Hamilton Linens                            $7,125

Reptech                                    $6,470

Extended Technologies                      $5,939

Peel's Salon Services                      $5,744

Maris Paris                                $5,652

State Beauty Supply                        $5,502

Maverick Press                             $5,469

Avaya                                      $4,502


ARMSTRONG HOLDINGS: Brings Dist. Ct. Judge Rebreno Up to Speed
--------------------------------------------------------------
Armstrong World Industries, Inc., its Official Committee of
Asbestos Claimants, and Dean M. Trafelet, the Legal Representative
for Future Asbestos Personal Injury Claimants, step the Honorable
Eduardo C. Robreno of the United States District Court for the
Eastern District of Pennsylvania through the events highlighting
the Chapter 11 cases of Armstrong Holdings, Inc. and its debtor-
affiliates and subsidiaries.

      AWI's Involvement with Asbestos-Containing Products

AWI's involvement in asbestos personal injury litigation relates
primarily to its involvement in the high temperature insulation
contracting business.  Throughout the early 1900s, AWI -- then
known as Armstrong Cork Company -- manufactured, installed, and
serviced low temperature primarily cork-based products for cold
storage insulation and pipe covering applications.  As an adjunct
to these cold storage contracting activities, from around 1910 to
1933, AWI manufactured various high temperature insulation
products, including some that contained asbestos.  These products
have not been the subject of significant claims.

Starting 1939, AWI expanded its low temperature insulation
contracting business into high temperature contracting services.
Some of the high temperature products furnished and installed in
the contracting operations contained asbestos.

As part of the overall organizational changes that took place in
the late 1950s, AWI separated the insulation contracting business
from the remainder of the company with the formation of a
separate, independent subsidiary, Armstrong Contracting and Supply
Corporation.  From January 1958 through July 1969, ACandS operated
as an independent subsidiary in the insulation contracting
business.  In addition, from 1964 through 1969, another
independent subsidiary of AWI, National Cork Company, operated an
insulation contracting business.  Other than two specific
products, AWI did not manufacture or sell any asbestos-containing
thermal insulation materials during this period.

In August 1969, a group of ACandS management employees formed a
holding company and purchased the stock of ACandS from AWI.  In
connection with the sale, AWI assigned certain trade names to
ACandS, but ACandS was not licensed to use, and did not use, AWI's
trademark or the trade style "Armstrong."  ACandS continues to
exist today and is now known as ACandS, Inc.  On September 19,
2002, ACandS filed a voluntary petition for relief under Chapter
11 of the Bankruptcy Code.

AWI manufactured only two asbestos-containing insulation materials
between 1939 and 1968, LT Cork Covering and Armaspray.  AWI,
ACandS, or NCC may have used other asbestos-containing high
temperature insulation products manufactured by other
manufacturers in the course of their contract insulation
installation activities, depending on the requirements of the
particular contract involved.  It is impossible to state with
certainty what other specific asbestos-containing products might
have been called for by these contracts.

From 1932 until 1982, AWI manufactured various forms of resilient
floor tiles, some of which contained encapsulated chrysotile
asbestos.  From 1954 until 1983, some of the sheet vinyl resilient
floor coverings that AWI manufactured and sold were on an
asbestos-containing backing material, which was designated as
"Hydrocord."  From the early 1950s until the late 1980s, AWI
manufactured and sold gasket materials primarily intended for
mechanical applications, including internal combustion engines.
Some of these gasket materials contained encapsulated asbestos
fiber.

During the period between the mid-1930s and mid-1980s, some of the
related adhesive products AWI manufactured and sold for use in the
installation of resilient floor tile or acoustical ceiling tile
contained encapsulated chrysotile asbestos.

           Prepetition Asbestos-Related PI Litigation

Prior to the Petition Date, AWI was named as a defendant in
personal injury and wrongful death actions seeking recovery for
damages allegedly caused by the presence of, or exposure to,
asbestos or asbestos-containing products.  Nearly all of the
asbestos-related personal injury and wrongful death actions
against AWI related to individuals who claim they were exposed to
the asbestos-containing high temperature thermal insulation
products used by AWI in its insulation contracting activities
prior to 1958, or used by ACandS, including in connection with
ACandS's use of AWI's licensed trade name of trademarks, after
1958.  Many of these claims have involved allegations of
negligence, strict liability, and breach of warranty, and some
have alleged conspiracy or other claims that seek to make AWI
responsible for the activities of ACandS.  In some instances,
asbestos-related personal injury claims have been asserted against
AWI on account of its asbestos-containing gaskets or flooring
materials.

During the three-year period immediately prior to the Petition
Date, AWI paid over $500 million in settlement payments on account
of asbestos-related personal injury and wrongful death claims.  As
of September 30, 2000, approximately 173,000 asbestos-related
personal injury and wrongful death claims were pending against AWI
within the tort system in a multitude of jurisdictions.

    Prepetition Asbestos-Related Property Damage Litigation

Prior to the bankruptcy petition date, AWI also was named as a
defendant in 273 cases seeking recovery for damages allegedly
caused by the presence of asbestos-containing materials in the
plaintiffs' premises.  These claims generally were not the result
of AWI's insulation installation contracting activities.  Instead,
those that were actively pursued against AWI concerned primarily
of resilient floor covering products manufactured and sold by AWI
prior to 1983.

                   AWI's Bankruptcy Petition

In October 2000, Owens Corning filed for Chapter 11 protection to
address its asbestos liabilities.  Following the Owens Corning
filing, AWI was unable to obtain a replacement credit facility
with acceptable terms for its then-existing $450 million credit
facility due to expire on October 19, 2000.  Owens Corning's
Chapter 11 filing raised additional concerns about the possibility
of increased settlement demands of asbestos plaintiffs given that,
prior to its filing, Owens Corning had been a major defendant in
asbestos litigation.

On October 25, 2000, both Standard & Poors and Moody's Investors
Services downgraded AWI's long-term debt rating, citing the
reduction in committed credit facilities, prospects for weaker
operating performance, and continued uncertainty surrounding AWI's
asbestos personal injury liability as a result of Owens Corning's
Chapter 11 filing.

After October 25, 2000, AWI was unable to issue commercial paper
and, instead, borrowed from its remaining $450 million credit
facility.  As of December 6, 2000, approximately $50 million of
commercial paper was outstanding, and the entire $450 million
credit facility had been drawn and was outstanding.

On December 6, 2000, AWI and two of its wholly owned direct and
indirect subsidiaries, Nitram Liquidators, Inc., and Desseaux
Corporation of North America, each commenced a case under Chapter
11 in the United States Bankruptcy Court for the District of
Delaware.

AWI's Chapter 11 cases were originally assigned to Judge Joseph
Farnan, Jr., a U.S. District Court Judge for the District of
Delaware.  During the fourth quarter of 2001, the U.S. Court of
Appeals for the Third Circuit assigned U.S. District Court Judge
Alfred Wolin of New Jersey to preside over the Chapter 11 case in
the District of Delaware.  The Third Circuit also assigned Judge
Wolin to preside over four other asbestos-related Chapter 11 cases
pending in the District of Delaware to expedite the emergence of
the debtors from Chapter 11.

                        Plan Negotiation

Since the Petition Date and promptly after achieving stabilization
of its business operations, AWI engaged in extensive and
continuing negotiations with the various constituents in the
Chapter 11 case to formulate a long-term business plan, and,
ultimately, to formulate, negotiate and propose a reorganization
plan.

On August 29, 2002, AWI and the representatives of the Unsecured
Creditors Committee and the Asbestos Claimants Committee appeared
at a status conference before the District Court.  At the status
conference, the District Court asked AWI to file a plan within 45
days.

Following the status conference, AWI focused its efforts, together
with the Committees, on negotiating and working out the details of
a comprehensive reorganization plan.  These efforts involved
substantial time and effort on the part of AWI, the Committees,
and their professionals.  The parties reached agreement on the
terms of a plan that had the support of all the Committees.  As a
result of the agreement, on November 4, 2002, AWI filed a Plan of
Reorganization with the Bankruptcy Court.  On December 20, 2002,
AWI filed its proposed disclosure statement.

Subsequent to the filing of the Original Plan and proposed
disclosure statement, AWI, the Committees and other parties-in-
interest engaged in further negotiations in an effort to resolve a
number of objections that arose in connection with approval of the
disclosure statement, which resulted in AWI filing amended plans.
With each Amended Plan, each of the Committee continued to support
the Plan.

Hearings to consider the adequacy of the Disclosure Statement were
conducted by the Bankruptcy Court on February 28, 2003, April 4,
2003, May 5, 2003, and May 30, 2003.

On May 23, 2003, AWI filed its Fourth Amended Plan and Disclosure
Statement, to, inter alia, address the comments made by the
Bankruptcy Court at the Disclosure Statement Hearing and to make
other agreed changes.  The Fourth Amended Plan had the express
support and endorsement of all Committees, including the Unsecured
Creditors Committee.

AWI will distribute under the plan a combination of:

    (a) New Common Stock -- equal to 100% of the stock in
        Reorganized AWI, subject to dilution for management
        equity-based plans;

    (b) Available Cash -- estimated to total $350 million; and

    (c) Plan Notes -- totaling an estimated $775 million.

AWI also has agreed to use reasonable efforts to effect a 144A
Offering, in which case the net proceeds of that offering will be
used to reduce the Plan Notes on a dollar for dollar basis.

A key feature of the Plan is the establishment of the Asbestos PI
Trust, into which all present Asbestos Personal Injury Claims and
future Demands against AWI will be "channeled."  To protect AWI
and certain other PI Protected Parties from Asbestos Personal
Injury Claims and demands being asserted against them in the
future, the Plan provides for the issuance of the Asbestos PI
Permanent Channeling Injunction.  To obtain the benefit of the
Asbestos PI Permanent Channeling Injunction, Section 524(g) of the
Bankruptcy Code requires that the Asbestos Personal Injury Claims
and Demands be channeled to a trust that meets certain
requirements.  The Asbestos PI Trust will be funded with the
Asbestos PI Insurance Asset and additional consideration, pursuant
to the formula set forth in the Plan, consisting of New Common
Stock, Available Cash, and Plan Notes or 144A Offering Proceeds.
On the consummation of the Plan, the Asbestos PI Trust will own
approximately two-thirds of the issued and outstanding New Common
Stock.  The Disclosure Statement estimates the total value of the
consideration going to the Asbestos PI Trust to be approximately
$1.8 billion.

AWI also has claims that have been asserted against it with
respect to liabilities unrelated to asbestos.  These claims are
"unsecured claims" under the Plan and the holders of these claims
are represented by the Creditors Committee.  The Plan provides
that each holder of an Allowed Unsecured Claim in Class 6 of the
Plan will receive its Pro Rata Share of a combination of New
Common Stock, Available Cash, and the Plan Notes and 144A Offering
Proceeds.  Based on AWI's estimate that the Allowed Unsecured
Claims in Class 6 will total $1.651 billion, AWI estimated at the
time of the Disclosure Statement that each holder will receive a
combination of New Common Stock, Available Cash, and Plan Notes or
144A Offering proceeds having a value of approximately 59.5% of
the amount of the Allowed Unsecured Claim.  Based on AWI's
assumptions and estimates, that means, for example, that a holder
of an Allowed Unsecured Claim for $100,000 would receive
approximately $59,500 of Reorganization Consideration consisting
of approximately $35,300 in value in Common Stock, $8,000 in cash,
and $16,200 in either Plan Notes or cash.

The Plan also establishes a convenience class -- Class 3 -- for
Unsecured Claims equal to or less than $10,000, or reduced to
$10,000 by the election of the Unsecured Claimholder.  Holders of
Convenience Claims in Class 3 will be paid 75% of the Allowed
Amount of their Allowed Convenience Claims, in cash, on the later
of the effective date or as soon as practicable after the
Convenience Claim becomes allowed.

               Objections to Plan Confirmation

By the Plan Objection Deadline, objections to the confirmation of
the Plan were filed by:

    * ACE U.S.A. Insurers
    * California Franchise Tax Board
    * Center for Claims Resolution
    * Amchem Products, Certainteed Corp., Dana Corp., and other
      CCR Members
    * Directly Affiliated Local Union 461
    * E.F.P. Floor Products Fussboeden GbmH, St. Johann in Tirol
      (Austria)
    * Georgia Department of Natural Resources
    * John Crane, Inc.
    * Liberty Property Holdings, L.P.
    * Unsecured Creditors' Committee
    * Safeco Insurance Company of America
    * Solutia, Inc.
    * Travelers Indemnity Company and Travelers Casualty and
      Surety Company
    * United States
    * United States Department of Labor
    * United States Gypsum Co.
    * U.S. Trustee

After the Objection Deadline, objections were filed by Liberty
Mutual Insurance Company and Bank One Trust Company, N.A., as
indenture trustee.  In addition, after the Objection Deadline, the
Creditors Committee filed a Memorandum of Law in opposition to the
confirmation of the Plan.  In response to a countermotion by AWI,
the Court entered an order striking certain objections contained
in the Creditors Committee's Objection.

AWI then filed a response to the Creditors Committee's remaining
Objections and Bank One's Objections.  These Objections were
overruled by the Court at the Confirmation Hearing.  The
objections by the other parties were withdrawn.

                       Plan Confirmation

AWI asked the District Court and the Bankruptcy Court to preside
jointly over the Plan Confirmation Hearing because that would
provide the most expeditious means for AWI to emerge from Chapter
11.  Accordingly, the Confirmation Hearing was scheduled to
commence on November 17, 2003 in the District Court, with both
Judge Wolin and Judge Newsome jointly presiding.

However, other debtors of other asbestos-related bankruptcy cases
commenced recusal proceedings against Judge Wolin.  On November 5,
2003, the District Court issued an order staying all matters
pending before the Bankruptcy Court.

The Bankruptcy Court agreed to go forward with the previously
scheduled Confirmation Hearing absent the participation of the
District Court.  On December 19, 2003, the Bankruptcy Court issued
Proposed Findings of Fact and Conclusions of Law on Confirmation
of the Plan and a Proposed Confirmation Order.  Because of the
statutory conditions for issuance of the Asbestos PI Permanent
Channeling Injunction that forms the core of the Plan,
confirmation of the Plan is subject to the entry of a final
Confirmation Order by the District Court.

On December 29, 2003, the Creditors Committee filed with the
District Court its Objections to the Proposed Findings and
Conclusions.  On February 13, 2004, AWI, together with the
Asbestos Committee and the Futures Representative, filed a
response to the Creditors Committee's Objection.  The Objections
and the Response remain pending in the District Court.

         Reassignment and Resolution of Recusal Issues

Judge Newsome's term as a visiting judge expired on December 31,
2003 and AWI's Chapter 11 cases were reassigned to Judge Judith
Fitzgerald.

In addition, on February 2, 2004, the District Court denied
motions relating to Judge Wolin's recusal.  The Order was appealed
to the U.S. Court of Appeals for the Third Circuit, which
subsequently issued an opinion granting the recusal motions.
Following the issuance of the Third Circuit's opinion, Judge Wolin
announced his retirement.

      Pending Adversary Proceedings and Contested Matters

* Century Indemnity Company v. Armstrong World Industries, Inc.,
  et al.

Prior to the Petition Date, AWI entered into a settlement
agreement with Century Indemnity Company settling disputes and
coverage issues with respect to asbestos personal injury claims.
The Century Settlement Agreement permits Century to stretch out
payments due to an established trust.  AWI agreed to indemnify
Century against certain claims that would have been covered under
the Century Policies.

Century failed to make a substantial payment that was due on
January 5, 2001.  Century then filed a motion seeking to compel
AWI to assume the Century Settlement Agreement, which motion AWI
objected to.  AWI also asked the Court to direct Century to make
the outstanding 2001 Installment Payment and continue to make all
future payments due to the Century Trust.  The Bankruptcy Court
denied the Motion to Compel, but did not rule on the dispute
between the parties as to whether the Century Settlement Agreement
is an executory contract.

In January 2002, Century commenced a proceeding against AWI, the
CCR and the Chase Bank of Texas, N.A., pursuant to which Century
sought a declaration that:

      (i) Century need not make further payments due under the
          Century Settlement Agreement;

     (ii) AWI must indemnify Century for certain claims asserted
          against Century in an action pending in federal district
          court; and

    (iii) Century may offset any indemnification claim against AWI
          against payments required to be made by Century to the
          Century Trust.

AWI sought to dismiss the Century action, which the Bankruptcy
Court denied.  AWI filed affirmative defenses and a counterclaim
to the Complaint on June 27, 2002.  Century then sought to dismiss
AWI's counterclaim.

The Bankruptcy Court granted the joint motion of AWI and JPMorgan
Chase Bank for summary judgment with respect to:

    (a) Century's request for a declaratory judgment that the
        Settlement Agreement is an executory contract and an
        injunction requiring AWI to assume it;

    (b) Century's contention that AWI is solely liable under the
        Settlement Agreement;

    (c) Century's request for preliminary and permanent
        injunction.

Century appealed the Bankruptcy Court's Order.

AWI, Century, and the ACE U.S.A. Insurers entered into a
settlement to resolve Century's Complaint and the ACE Insurer's
confirmation objections.  The Settlement requires both Bankruptcy
Court and District Court approval.  The Bankruptcy Court approved
the Settlement on November 17, 2003.  The Settlement is now before
the District Court.

Century's action remains pending in the Bankruptcy Court and
although it is inactive, the Settlement provides that it can be
unwound in the event the Plan is confirmed without providing
Century the protection of PI Protected Party status in connection
with the Asbestos PI Permanent Channeling Injunction.

                   Carlino and Wagman Appeal

Carlino Arcadia Associates, L.P., as successor to Carlino
Development Group, Inc., and Wagman Construction, Inc., asked the
Court to compel AWI to assume certain executory contracts to sell
and develop land.  Judge Newsome treated the motion as one to
reject the contracts and, on May 31, 2002, ruled that AWI's
decisions to reject the contracts constituted a sound exercise of
its business judgment.  Carlino and Wagman filed claims seeking
recovery of their alleged damages, and AWI objected to these
claims.

On August 29, 2003, Judge Newsome ruled that Carlino and Wagman
were not entitled to a recovery of lost profits but could seek
recovery of certain claims as administrative expenses on a proper
showing of their entitlement.  Carlino and Wagman have appealed
from Judge Newsome's ruling.  AWI moved to dismiss the appeal for
lack of subject matter jurisdiction on the grounds that the appeal
is of an interlocutory order.  The parties entered into a
stipulation staying all briefing relating to the appeal pending
the District Court's resolution of the Motion to Dismiss.  The
Motion to Dismiss and the appeal are both currently pending sub
judice.

        Strategy to Facilitate Completion of Proceedings

To facilitate AWI's emergence from Chapter 11, the Debtors, the
Asbestos Committee and the Futures Representative ask the Court to
schedule oral argument with respect to the Unsecured Creditors'
Objection and the Joint Response.

They also ask the District Court to act on the Century Settlement
and the Carlino and Wagman Appeal.  Alternatively, the Court may
wish to schedule a status conference in connection with these
matters.

Headquartered in Lancaster, Pennsylvania, Armstrong World
Industries, Inc. -- http://www.armstrong.com/-- the major
operating subsidiary of Armstrong Holdings, Inc., designs,
manufactures and sells interior finishings, most notably floor
coverings and ceiling systems, around the world.  The Company
filed for chapter 11 protection on December 6, 2000 (Bankr. Del.
Case No. 00-04469).  Stephen Karotkin, Esq., Weil, Gotshal &
Manges LLP and Russell C. Silberglied, Esq., at Richards, Layton &
Finger, P.A., represent the Debtors in in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they listed $4,032,200,000 in total assets and
$3,296,900,000 in liabilities. (Armstrong Bankruptcy News, Issue
No. 65; Bankruptcy Creditors' Service, Inc., 215/945-7000)


BELL CANADA: Inks Pact to Monetize Some Non-Capital Tax Losses
--------------------------------------------------------------
Bell Canada International entered into an agreement to monetize a
portion of its non-capital tax losses, which is expected to result
in a compensatory cash payment to Bell Canada of at least
$42 million.  The Loss Monetization Plan, which is the subject of
an advance income tax ruling received from the Canada Revenue
Agency, is conditional on the approval of the Ontario Superior
Court of Justice pursuant to Bell Canada's Plan of Arrangement.
If all required approvals are obtained, Bell Canada expects to
receive the proceeds of the Loss Monetization Plan in the first
quarter of 2007, although at Bell Canada's request and subject to
the consent of BCE, the proceeds may be received in 2006 at a
reduced amount based on a discount rate to be mutually agreed at
that time.

At December 31, 2003, the Corporation reported non-capital tax
loss carry forwards of approximately $415 million.  Subsequently,
the 2003 tax return was filed and the amount of the non-capital
loss carry forwards increased to approximately $436 million.  In
connection with the Loss Monetization Plan, Bell Canada has
requested CRA to audit its tax returns for years up to December
31, 2003 for the purpose of making a final determination of its
losses.  While the Corporation's tax returns were filed using tax
positions that were believed at the time to be appropriate, based
on recent discussions with CRA and the Federal Department of
Finance, the Corporation believes that the maximum amount
available for use under the Loss Monetization Plan will be less
than the amounts filed. It is not expected that the CRA audit will
have been completed by the time the Loss Monetization Plan is
anticipated to be implemented in January of 2005.  As a result,
the Loss Monetization Plan will be initially based on the
monetization of $200 million of losses (and a $42 million
compensatory payment in 2007) and the amount of losses to be
monetized may be increased during 2005 if the CRA audit determines
that additional losses are available.

Further, if confirmation is obtained that Bell Canada's losses can
be used to reduce taxable income in jurisdictions in Canada other
than those where Bell Canada carries on business, the $42 million
compensatory payment (assuming $200 million of losses) may
increase to as much as $58 million.  At this time there can be no
assurance of the actual amount of losses that will result from the
CRA audit, or that the compensatory amount will be greater or less
than $42 million.

As the Loss Monetization Plan is to be implemented between Bell
Canada and related parties, an Independent Committee of the Board
of Directors of Bell Canada was appointed to consider the
transaction.  The Independent Committee recommended that the Board
approve the Loss Monetization Plan based in part on an opinion
received from its financial advisors that the transaction is fair,
from a financial point of view, to Bell Canada and Bell Canada's
shareholders other than BCE.  After receiving the recommendation
of the Independent Committee, the Bell Canada Board approved the
Loss Monetization Plan.  In addition, because the Loss
Monetization Plan is to be entered into with Bell Canada's
majority shareholder BCE Inc., and Bell Canada (or their
affiliates), the transaction will require the approval of a
majority of Bell Canada's shareholders other than BCE unless an
exemption from such requirement is granted to BCI by securities
regulators.

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


BELL CANADA: Reports $4.8 Million Net Loss for 2004 Second Quarter
------------------------------------------------------------------
As a result of the adoption on July 17, 2002 of Plan of
Arrangement of Bell Canada International, its unaudited
consolidated financial statements for the second quarter of 2004
reflect only the activities of Bell Canada as a holding company.
Bell Canada's 75.6% interest in Canbras Communications Corporation
is recorded under Investments on the balance sheet at $15 million,
being the lower of its carrying value and estimated net realizable
value.

As at June 30, 2004, Bell Canada's shareholders' equity was
$217.0 million, down by $4.8 million from March 31, 2004.  This
decrease was mainly as a result of interest expense of
$4.6 million on the BCI 11% senior unsecured notes and
administrative expenses of $2.1 million, partially offset by
interest income of $2.0 million.

Bell Canada's cash and temporary investments as at June 30, 2004
were $381.1 million representing approximately 96% of the
company's total assets.  The yield on the average investment
portfolio in the quarter was approximately 2.1%.

Total liabilities of $181.0 million include Bell Canada's 11%
senior unsecured notes due September 29, 2004 in the amount of
$160 million.  Accrued liabilities were $21.0 million at the end
of the second quarter of 2004, up $4.9 million from March 31, 2004
mainly as a result of the accrual of interest on Bell Canada's 11%
notes.

The loss for the second quarter was $4.8 million, or $0.12 per
share.

                  Estimated Future Net Assets

Bell Canada previously believed that an initial distribution to
shareholders could be made as early as the second half of 2004.
However, due to delays in resolving claims against it, the
Corporation now believes that no such initial distribution will be
made until at least the first half of 2005. Furthermore, in view
of Bell Canada's Loss Monetization Plan, which is intended to
increase its net asset value of, Bell Canada's Plan of Arrangement
is unlikely to be completed, and final distributions made to
shareholders, until at least the first quarter of 2006 (or in
2007, if no early compensatory payment to BCI is made with respect
to the Loss Monetization Plan).

Bell Canada's estimated future net assets at March 31, 2006 are
$253.4 million.  The differences between shareholders' equity on
the consolidated balance sheet at June 30, 2004 and the estimated
future net assets at March 31, 2006 are:

     (i) the deduction of future net costs from July 1, 2004 to
         March 31, 2006;

    (ii) the inclusion of the expected discounted benefit from the
         Loss Monetization Plan;

   (iii) the inclusion of the expected gain on the Canbras
         investment; and

    (iv) the inclusion of the gain on the sale of Bell Canada's
         remaining 1.5% interest in Axtel S.A. de C.V.

The future net costs are estimated at approximately $10.3 million
comprising interest expense until September 29, 2004 on the 11%
senior unsecured notes of approximately $4.5 million (assuming
Court approval is obtained to pay the 11% senior unsecured notes
on September 29, 2004), administrative expenses of approximately
$14.4 million and interest income of approximately $8.6 million.
The expected discounted benefit from an early payment being made
under the Loss Monetization Plan is estimated to be approximately
$38 million, being the $42 million payment discussed, discounted
for one year at an assumed discount rate of 9%.  The expected gain
on the Canbras investment of approximately $6 million represents
the excess over current carrying value that BCI expects to receive
on its investment in Canbras.  The gain on the sale, on July 14,
2004, of the remaining 1.5% interest in Axtel was $2.6 million
(US$2 million).

The future net costs exclude any amounts that may be required to
settle contingent liabilities such as lawsuits.  To the extent
Bell Canada has not completed its Plan of Arrangement by March 31,
2006, interest income thereafter may not be sufficient to cover
operating expenses estimated at approximately $1.5 million to
$2 million per quarter. The extent of any shortfall would be
dependent on a number of factors, including the level of interest
rates and Bell Canada's cash balances at the time.

Bell Canada's currently estimated future net assets at
March 31, 2006 of $253.4 million have increased by $36.3 million
from the estimate of future net assets at December 31, 2004
prepared at May 6, 2004 in connection with BCI's first quarter
results.  The increase in estimated net assets of BCI at March 31,
2006 is a result of the inclusion of the expected discounted
benefit of approximately $38 million to be realized from the Loss
Monetization Plan and the gain on the sale of the remaining 1.5%
interest in Axtel of $2.6 million offset by additional net costs
of $4.3 million from January 1, 2005 to March 31, 2006.  These
additional net costs are expected to be incurred by the
Corporation as a result of the delay in the timing of the expected
final distribution to shareholders and the approval process
associated with the Loss Monetization Plan (including the
potential requirement to hold a special shareholders' meeting to
approve the Loss Monetization Plan).

                Update on Remaining Investments

On July 14, 2004, Bell Canada sold its remaining 1.5% equity
interest in Axtel in a series of transactions with certain of
Axtel's other current shareholders.  Bell Canada, which had
previously written-off entirely its remaining interest in Axtel,
received cash consideration in an aggregate amount of $2.6 million
(US$2 million) for the sale.

Pursuant to the sale of all of Canbras' operations to a third
party in December 2003, Canbras received gross proceeds of
$32.6 million, comprised of $22.2 million in cash and a one-year
promissory note bearing interest at 10% in the original principal
amount of $10.4 million (subject to reduction in the event
indemnification obligations of Canbras arise under the terms of
the sale transaction). On July 29, 2004, Canbras announced that it
had declared an initial distribution, in the amount of $0.21 per
share, of net proceeds from the sale transaction, payable to
shareholders on August 23, 2004.  As a result, Bell Canada will
receive approximately $8.7 million on such date.  Bell Canada
expects to receive a total of $21 million from the total net
proceeds to be distributed by Canbras to its shareholders,
assuming the full amount of the one-year note is paid to Canbras.
Canbras expects to make final distributions to shareholders in one
or more instalments by year-end 2005.

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


BELL CANADA: Apellate Court Dismisses Two Class Action Lawsuits
---------------------------------------------------------------
On July 23, 2004, the Ontario Court of Appeal dismissed the two
proposed class action lawsuits brought by Mr. Wilfred Shaw and Mr.
Cameron Gillespie on behalf of Bell Canada International common
shareholders and seeking $1 billion in damages against Bell Canada
and BCE.  The Court of Appeal upheld the decision of the lower
court dismissing the lawsuits as failing to disclose a reasonable
cause of action.  Any further appeals, which would go to the
Supreme Court of Canada, requires the permission of the Supreme
Court.  Plaintiffs have until September 30, 2004 to seek leave to
appeal.

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


BIOVAIL CORPORATION: Several Changes to Executive Management Team
-----------------------------------------------------------------
Biovail Corporation (NYSE:BVF)(TSX:BVF) reported several changes
to its executive management group, including the hiring of Charles
Rowland as Senior Vice-President and Chief Financial Officer of
Biovail Corporation, succeeding Brian Crombie, who has been
appointed Senior Vice-President, Strategic Development.

The company also announced the promotion of David (Rick) Keefer to
Senior Vice-President, Commercial Operations.  He replaces
Kristine Peterson, who will be joining a leading multi-national
pharmaceutical company in a senior capacity. Ms. Peterson will
transfer her responsibilities to Mr. Keefer to ensure a smooth
transition.

          Leadership for the Next Phase of Development

Eugene Melnyk, Biovail's Chairman and Chief Executive Officer,
said that the changes emphasize the company's commitment to
penetrating the U.S. market, and further strengthening its
operational expertise.

"Charles Rowland brings a wealth of experience that will be very
beneficial as Biovail has reached the point in its evolution where
focusing on improving operational efficiencies, management
information and financial systems is paramount," said Mr. Melnyk.
"It was important for Biovail to locate its Chief Financial
Officer in New Jersey, where Biovail's greatest growth and
expenses will occur. Mr. Rowland's core competencies, combined
with his more than 20 years of operational experience, will enable
Charlie to continue to build on the foundation developed by Brian
Crombie.

"Mr. Crombie, who has a wealth of experience in acquisitions,
business investments and strategic transactions, will focus on
enhancing the value of Biovail's current and future strategic
investments.

"Kris Peterson has made numerous contributions to Biovail during
the past 15 months, and played a pivotal role in helping to
establish our U.S. organization. As a result, Biovail is fortunate
to have tremendous operational depth as part of its management
team which, in turn, has allowed us to promote Rick Keefer from
within."

           Extensive Financial, Operational Expertise

Mr. Rowland, who joins Biovail effective August 9, and who will be
located at the company's U.S. headquarters in Bridgewater, is an
executive with extensive financial and operational experience as a
senior member of industry-leading pharmaceutical management teams.
Most notably, he spent four years with Pharmacia Corporation,
where he was Vice-President, Finance and Global Supply.  Before
joining Pharmacia, he spent five years with Novartis
Pharmaceuticals Corporation, where he held a series of
progressively senior positions, including Vice-President,
Planning and Decision Support.

Prior to 1993, Mr. Rowland spent nine years with Bristol-Myers
Squibb Company, where he held a series of senior finance
positions. He holds a Master of Business Administration degree
from Rutgers University and Bachelor of Science degree in
Accounting from the Saint Joseph's University.

Brian Crombie, Biovail's CFO since joining the company in
May 2000, will take on the important job of Senior Vice-President,
Strategic Development. In this role, Mr. Crombie's primary
responsibilities will include managing the numerous investments
Biovail has made in several development companies as well as
identifying opportunities to maximize the value of current and
future investments.

Mr. Crombie has played an important part in the evolution of
Biovail into a integrated specialty pharmaceutical company and
Canada's largest publicly traded drug maker. He came to Biovail
from The Jim Pattison Group, one of Canada's largest private
holding companies. During his tenure there, he served as Managing
Director, Corporate Finance, where he was responsible for
corporate development and treasury. From 1990-1997, Mr. Crombie
held a series of progressively senior finance and general
management positions with The Molson Companies; as Senior Vice-
President, Corporate Finance and Treasurer, he was responsible for
planning, accounting and control, corporate development, treasury
and investor relations.  Previously, Mr. Crombie worked for the
Walt Disney Company.  He also has an MBA from The Harvard School
of Business.

David (Rick) Keefer, located at Biovail's U.S. headquarters in
Bridgewater, is a 25-year pharmaceutical industry veteran.  He has
been Group Vice-President, U.S. Sales Operations, since coming to
Biovail in May 2003 from Pharmacia Corporation, where he was Vice-
President, Sales.  Mr. Keefer also spent 12 years at Wyeth
Laboratories, where he held a number of increasingly responsible
senior positions in both the company's institutional and primary-
care divisions, with responsibility for sales, marketing, managed
markets, personnel, operating budgets and customer development
programs for the company's entire portfolio of pharmaceutical
products that generated more than $1 billion in annual revenues.
Most notably, from 1995-2001, he served as Vice-President,
Business Unit Director for the Southern Business Unit.
Previously, he spent 15 years with A.H. Robins Company of
Richmond, Virginia.  Mr. Keefer earned a Bachelor of Science
degree in Marketing/Accounting from West Virginia State College.

                   About Biovail Corporation

Biovail Corporation is an international full-service
pharmaceutical company, engaged in the formulation, clinical
testing, registration, manufacture, sale and promotion of
pharmaceutical products utilizing advanced drug-delivery
technologies. For more information about Biovail, visit the
company's Web site at http://www.biovail.com/

                         *     *     *

As reported in the Troubled Company Reporter's March 11, 2004,
edition, Standard & Poor's Ratings Services revised its outlook on
the pharmaceutical company to negative from stable.  At the same
time, S&P affirmed its ratings on Mississauga, Ontario-based
Biovail, including the 'BB+' long-term corporate credit rating.
The action was in response to the company's lower 2004 earnings
guidance.


BLACK WARRIOR: Subordinated Noteholders Consent to Multi-Shot Sale
------------------------------------------------------------------
Black Warrior Wireline Corporation received the requisite consents
from the holders of its subordinated debt for the completion of
the previously announced sale of the assets of its Multi-Shot
business.  These assets relate to Black Warrior's directional
drilling, downhole surveying, measurement while drilling, steering
tools and motor rental business.  Black Warrior also has been
advised that Multi-Shot, LLC, the buyer of the Multi-Shot
business, has obtained the financing required to complete the
transaction. Subject to the fulfillment of the remaining closing
conditions under the Asset Purchase Agreement, the parties expect
to complete the transaction on or about August 6, 2004.

                         About the Company

Black Warrior is an oil and gas service company providing wireline
services to oil and gas well operators primarily in the United
States and in the Gulf of Mexico. It is headquartered in Columbus,
Mississippi. Additional information may be obtained by contacting
Ron Whitter at (936) 441-6655.

At March 31, 2003, Black Warrior Wireline's balance sheet shows a
stockholders' deficit of $26,495,475, compared to a deficit of
$23,503,994 at December 31, 2003.

Black Warrior is a highly leveraged company.  The Company's
outstanding indebtedness includes primarily senior indebtedness
aggregating approximately $15.2 million at March 31, 2004, other
indebtedness of approximately $2.6 million and approximately $40.0
million (including approximately $15.6 million of accrued
interest) owing to St. James Merchant Bankers, L.P. and St. James
Capital Partners, L.P., and its affiliates and directors, who are
related parties.  The Company's debt and accrued interest owed to
related parties is convertible into common stock and is
subordinate to its Senior Credit Facility with General Electric
Capital Corporation.  In addition, no repayments of the related
party debt or accrued interest can be made until the Senior
Credit Facility is completely extinguished.


BOWER PARTNERSHIP: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Bower Partnership, Inc.
        101 Lake Forest Boulevard
        Gaithersburg, Maryland 20877

Bankruptcy Case No.: 04-28219

Chapter 11 Petition Date: August 3, 2004

Court: District of Maryland (Greenbelt)

Judge: Paul Mannes

Debtor's Counsel: Cheryl E. Rose, Esq.
                  Rose & Associates, LLC
                  50 West Edmonston Drive Suite 600
                  Rockville, MD 20852

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

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


BUCYRUS INTERNATIONAL: Moody's Withdraws Junk Ratings after IPO
---------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Bucyrus
International, Inc.'s $150 million senior secured credit
facilities and raised the company's senior implied rating
to Ba3 from B3. The rating actions follow the completion of
Bucyrus' initial public offering, which raised $130 million in net
proceeds and significantly reduced leverage. The IPO proceeds,
plus borrowings under the term loan portion of the new credit
facilities, were used to retire the company's 9.75% senior
unsecured notes due 2007, pay accrued interest and management fees
to owner American Industrial Partners (AIP), repay bank debt under
the company's previous credit facility, and pay related
transaction fees.  The rating outlook is stable.

The following rating actions were taken:

    Ratings assigned:

      -- Ba3 to the:

         -- senior secured $50 million revolving credit
            facility due 2009 and

         -- $100 million senior secured term loan due 2010.

   Ratings upgraded:

      -- Senior implied rating raised to Ba3 from B3,

      -- Senior unsecured issuer rating raised to B1 from Caa1.

   Ratings withdrawn:

      -- The Caa1 rating for Bucyrus' $150 million of 9.75% senior
         unsecured notes due September 15, 2007 was withdrawn.

Moody's upgrade of Bucyrus reflects the improved debt protection
measures brought about by the company's IPO and debt reduction, as
well as the more robust fundamentals supporting sales of surface
mining equipment and services. Pro forma for the IPO and related
transactions, Bucyrus' leverage will drop to approximately 2.1 LTM
EBITDA from around 4.3x and EBITDA to interest will rise to 10x
from 3x. Pro forma interest expense is expected to be
approximately $5 million, compared to $18 million in 2003. The new
credit facilities extend the maturity of Bucyrus' debt and
provide greater liquidity. In addition, higher metal and commodity
prices are fueling increased orders for mining equipment,
aftermarket parts and services, which should improve manufacturing
capacity utilization, cost absorption, and cash flow.

More generally, Bucyrus' ratings positively reflect its strong
market position as a leading manufacturer of large surface mining
equipment, its large installed base of equipment, and the high
proportion of its sales derived from relatively stable aftermarket
parts and services.  Its ratings are constrained by the highly
cyclical nature of the mining equipment business, which is
impacted by volatile commodity prices and, during downturns,
reduced mineral production and capital investment on the part of
the mining industry.

Bucyrus' stable rating outlook reflects its improved balance sheet
capitalization, with pro forma debt to total capital of
approximately 45%, good liquidity, and the favorable near-term
outlook for OEM sales.  Given the company's small size, limited
range of products, and the volatility of its end-markets, it has
limited potential for rating upgrades at this time. Upgrades would
require significant further debt reduction, continued expansion of
aftermarket sales and gross margin percentages, and a ratio of
cash from operating activities to debt consistently above 35%,
with some allowances made for severe downturns in the mining
industry. Bucyrus' ratings could be lowered if cash flow to
leverage ratios decreases, market share declines, or the company
makes debt-funded acquisitions or pays large common dividends.

In addition to the balance sheet and liquidity improvements made
possible by Bucyrus' IPO and debt refinancing, a number of factors
buttress Moody's higher ratings.  Over the last two years, which
have been very difficult for sales of new mining equipment,
Bucyrus maintained positive free cash flow (defined as cash from
operating activities minus capex) and EBITDA of about $30 million,
which would have comfortably covered the reduced interest and
approximately $6 million per year of capex Moody's expects the
company to spend. Bucyrus' recent historical results benefited
from strong aftermarket sales and services. Since 2000,
aftermarket sales have grown 9% per year and aftermarket gross
profit margin percentage has grown but there is still room for
improvement. In addition to this stable income stream, over at
least the near term Bucyrus should enjoy much stronger original
equipment sales. New equipment orders are up in 2004, and higher
coal, copper and iron ore prices support continued strong OEM
sales. New equipment sales have a favorable impact on working
capital investment as OEM upfront and progress payments are
generally well-matched with purchases. However, gross margins on
new equipment sales are modest.

The new credit facilities are secured by all of the company's
assets and a pledge of the stock of its US and Canadian
subsidiaries and 65% of the stock of its foreign subsidiaries.
Availability under the revolving credit facility is governed by a
borrowing base formula that is based on eligible North American
receivables and inventory. The facilities' financial covenants are
fairly tight and contemplate a steady reduction in leverage.
However, as long as Bucyrus is in compliance with the covenants
and has undrawn availability of at least $15 million, it can
pay dividends up to $10 million per year. Repayments for the term
loan will be $7.5 million per year after the first year.

Bucyrus International is a leading manufacturer of electric mining
shovels, walking draglines and rotary blasthole drills and
provides aftermarket replacement parts and services for these
machines.  For the twelve months ended June 30, 2004, its sales
were $404 million. Bucyrus is headquartered in South Milwaukee,
Wisconsin.


CATHOLIC CHURCH: Court Bars Sussman Shank from Specific Matters
---------------------------------------------------------------
Thomas Stilley, Esq., at Sussman Shank, LLP, in connection with a
request for permission from the U.S. Bankruptcy Court for the
District of Oregon to continue serving as counsel to the
Archdiocese of Portland in Oregon in tort litigation matters,
makes a number of disclosures to the Bankruptcy Court about
connections between the Firm and some of the Archdiocese's
creditors.

More than a year ago, Mr. Stilley relates, Sussman Shank
represented the Oregon Catholic Press, an unaffiliated entity, in
a matter having nothing to do with the Archdiocese's bankruptcy
filing.  The Oregon Catholic Press is not currently a creditor of
the Archdiocese of Portland in Oregon nor a current client of
Sussman Shank.

For several years, Mr. Stilley continues, Sussman Shank
represented quite a few Oregon counties, especially in bankruptcy
proceedings, to collect real and personal property taxes,
including, among others, Multnomah, Washington, and Clackamas
Counties.  The Debtor owns real property in at least some western
Oregon counties, which may be taxable.  Almost all of the real
property is owned in trust for the benefit of parishes and
schools, which pay the taxes.

Sussman Shank presently represents Marion County in the case
styled In re Ogden New York Services, Inc., et al., pending in the
United States Bankruptcy Court for the Southern District of New
York.  One of the Ogden Debtors, known as Covanta, operates the
waste -- garbage -- incinerator north of Salem, Oregon, near the
Brooks exit on Interstate Highway 1-5.  Covanta is obligated by
contract with Marion County to take substantially all waste from
Marion County.  Sussman Shank's work in the matter is
substantially finished, but the firm is still monitoring
developments in the matter for Marion County.

Mr. Stilley reports that St. Vincent de Paul-St. Matthew
Conference obtained a community development grant from Washington
County, which administers some grants for the federal government
with federal funds.  St. Vincent de Paul-St. Matthew is likely not
directly related to the Debtor.

St. Vincent de Paul-St. Matthew wanted to construct a building to
be used as a food bank on the land of St. Matthew Parish in
Hillsboro, Oregon, which land is held in record title by the
Debtor.  St. Vincent de Paul-St. Matthew signed a promissory note
for $61,950 involved in the grant.  To secure repayment, the
Debtor signed and delivered a trust deed to Washington County
covering the building and some land immediately adjacent to the
building to provide access to the building.  The loan is not in
default.

St. Vincent de Paul-Tigard Conference, according to Mr. Stilley,
obtained a similar community developmental grant from Washington
County to construct a building to be used as a food bank on the
land used by St. Anthony Parish in Tigard, Oregon.  Record title
to the land is likely held by the Debtor.  St. Vincent de Paul-
Tigard is not likely directly related to the Debtor.

Washington County expected St. Vincent de Paul-Tigard to (i) sign
a promissory note for $120,600, and (ii) have that loan secured by
another trust deed signed by the Debtor, and covering again the
land under the building and, at least, the land needed to provide
access to the building.  Washington County has put that loan "on
hold" while awaiting St. Vincent de Paul-Tigard to obtain
assurance that the Debtor can provide the trust deed in light of
the Debtor's bankruptcy petition.

Sussman Shank understands that Washington County and St. Vincent
de Paul-Tigard are anxious to obtain that assurance from the
Debtor so that the loan can be made and the building constructed.
Sussman Shank has not been involved at all for Washington County
or the Debtor in those two matters.  If St. Anthony Parish and the
Debtor want to go forward with the project, Sussman Shank
anticipates that the firm or some other firm will seek the Court's
authorization.

Mr. Stilley also notes that some of the attorneys in Sussman Shank
are Catholic or have children who attend Catholic schools.

                          *     *     *

Judge Perris authorizes the Debtor to employ Sussman Shank, LLP,
as its bankruptcy counsel effective as of July 6, 2004.  However,
Sussman Shank is precluded from working on those matters involving
the counties of Marion and Washington, or on any other matters
involving negotiations with Multnomah, Washington, Clackamas, and
the Marion counties.

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., at 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)


DIVERSIFIED CORPORATE: Hires Advisor & Lender Agrees to Forbear
---------------------------------------------------------------
Diversified Corporate Resources, Inc. (Amex: HIR) has undertaken
several major restructuring initiatives over the past thirty days.
Under a plan approved by the Board, management began implementing
the cost reduction phase of the plan.  The Company started closing
under-performing operating units, reducing headcount, implementing
changes in field management, and consolidating several agencies.
During this same period, the Company has also experienced an
improvement in direct placement and temp revenues, compared to the
prior thirty-day period.

In future phases of the plan, the Company anticipates implementing
new marketing programs, further restructuring management
responsibilities, and reviewing other strategies to increase
shareholder value.  Management believes that these changes are key
to the long-term success and competitiveness of the Company.

                   Hires Restructuring Advisor

In conjunction with the restructuring, the Company has engaged
DSJ Consulting to supervise efforts to facilitate strategic
restructuring and assist the Company in the review of all
strategic alternatives available to maximize shareholder value.

                   Lender Agrees to Forbear

The Company has also entered into a forbearance agreement with
Greenfield Commercial Credit, Inc., its lender.  Under the
forbearance agreement, the Company has agreed to either pay all
past due Section 941 taxes or enter into a formal payment plan
with the IRS within 90 days.  The Company is working diligently
toward resolving the IRS tax issue, reported by the Company on
June 8, 2004, and completing the financial reports necessary to
resume the trading of its common stock.

Diversified Corporate Resources, Inc. is a national employment
services and consulting firm, servicing Fortune 500 and larger
regional companies with permanent recruiting and staff
augmentation in the fields of Engineering, Information Technology,
Healthcare, BioPharm and Finance and Accounting. The Company
currently operates a nationwide network of nine regional offices.

                         *     *     *

As reported in the Troubled Company Reporter's June 10, 2004
edition, Diversified Corporate Resources, Inc. retained a
specialized tax consultant to initiate discussions with
the Internal Revenue Service regarding the payment of $2.5 million
in unpaid Section 941 taxes owed by the Company for periods during
the first and second quarters of 2004.  At that time, the Company
had $600,000 in a restricted cash account reserved for payment
against this balance reducing the amount of required funds to
approximately $1.9 million.



DP 8 L.L.C.: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: DP 8 L.L.C.
        c/o Southwest Properties, Inc.
        3850 E. Baseline Road, #123
        Mesa, Arizona 85206

Bankruptcy Case No.: 04-13428

Type of Business: The Debtor is a real estate developer.

Chapter 11 Petition Date: July 30, 2004

Court: District of Arizona (Phoenix)

Judge: George B. Nielsen Jr.

Debtor's Counsel: Dale C. Schian, Esq.
                  Schian Walker P.L.C.
                  3550 North Central Avenue #1500
                  Phoenix, Arizona 85012-2188
                  Tel: 602-285-4550
                  Fax : 602-297-9633

Total Assets: $13,626,000

Total Debts: $3,663,678

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


ELANTIC TELECOM: U.S. Trustee Names 6-Member Creditors' Committee
-----------------------------------------------------------------
The United States Trustee for Region 4 appointed six creditors to
serve on an Official Committee of Unsecured Creditors in Elantic
Telecom, Inc.'s Chapter 11 case:

      1. Adelphia Communications Corp.
         Attn: Stephen Martin, Vice President-Law
         5619 DTC Parkway, Suite 800
         Greenwood Village, Colorado 80111
         Tel: 303 268-6433
         Fax: 303 268-5222
         Email: Stephen.martin@philadelphia.com

      2. Cox Communications
         Attn: Clarke Armentout, Business Manager
         225 Clearfield Avenue
         Virginia Beach, Virginia 23462
         Fax: 757 222-8588
         Fax: 757 369-4500
         Email: Clarke.armentrout@cox.com

      3. De-Tech, Inc.
         Attn: Edward W. Phaup, Jr.
         3404 Hermitage Road
         Richmond, Virginia 23227
         Tel: 804 262-0500
         Fax: 804 262-3043
         Email: edphaup@de-techinc.com

      4. Level 3 Communications
         Attn: Risa Lynn Wolf-Smith, Bankruptcy Counsel
         P.O. Box 8749
         Denver, Colorado 80201-8749
         Tel: 303 295-8011
         Fax: 303 295-8261
         Email: rwolf@hollanhart.com

      5. Telcove, Inc. (fka Adelphia Business Solutions)
         Attn: Jum Means, Secretary
         121 Champion Way
         Canonsburg, Pennsylvania 15317
         Tel: 724 743-9566
         Fax: 724 743-9791
         Email: jim.means@telecove.com

      6. Colo Properties Atlanta, LLC
         Successor to Marietta Street Partners, LLC
         Attn: Todd Raymond, General Counsel and Controller
         c/o The Telx Group, Inc.
         17 State Street, 33rd Floor
         New York, New York 10004
         Tel: 212 480-3300
         Fax: 212 480-8384

Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.

Headquartered in Richmond, Virginia, Elantic Telecom, Inc. --
http://www.elantictelecom.com/-- provides wholesale fiber
bandwidth and carrier services to long-distance, international
wireless carriers and competitive local exchange carriers across
its fiber optic network. The Company filed for chapter 11
protection on July 19, 2004 (Bankr. E.D. Va. Case No. 04-36897).
Lynn L. Tavenner, Esq., and Paula S. Beran, Esq., at Tavenner &
Beran, PLC, represent the Debtor in its restructuring efforts.
When the Company filed for protection from its creditors, it
listed $19,844,000 in total assets and $24,372,000 in total debts.


ENDEAVOUR GOLD: US$1.1 Mil. Phase 1 Exploration Program Underway
----------------------------------------------------------------
Endeavour Gold Corporation (EDR : TSX-V) discloses that a
US$1.1 million Phase 1 exploration program is now underway at the
Company's recently optioned Santa Cruz silver mine in Durango,
Mexico.  Two prospective ore zones, North Porvenir and San
Guillermo, will be explored by underground ramps and diamond
drilling in 2004.  The objective is to outline mineable resources
in each zone and prepare them for production before year-end.

The North Porvenir prospect was discovered last year when 3 drill
holes returned ore grades over mineable widths within the Santa
Cruz vein about 1 km northwest of the Santa Cruz mine shaft. A
total of approximately 2800 m of underground development,
including 1000 m of ramp access plus related crosscuts, sublevels
and raises will be completed in order to explore and equip the
North Porvenir mine for production.

Endeavour advanced a US $350,000 loan to Minera Santa Cruz y
Garibaldi S.A. de C.V. after closing the final option agreements
in May 2004 in order to commence work on the ramp.  The North
Porvenir ramp was collared in mid-June 2004, using the
neighbouring El Porvenir mine workings to gain access to the vein.

To date, approximately 180 m of ramp development has been
completed, principally along the vein footwall on the neighbouring
El Porvenir property. This ramp should cross the property boundary
onto the Santa Cruz mine property and encounter the prospective
North Porvenir ore zone shortly.

To complement the underground exploration program, a 6000 m
surface drilling program is also planned to commence in mid-August
2004 at North Porvenir. Drilling will focus on outlining the
mineralization on 50 m centres so as to better guide the
underground development program once it reaches the prospective
ore zone.

The San Guillermo prospect was outlined in the 1980's when
drilling and drifting returned high grade silver values over good
widths in the Santa Cruz vein about 600 m southeast of the Santa
Cruz mine shaft.  At San Guillermo, mining activities in 2003/2004
have exhausted the ore reserves above Mine Level 6. Therefore,
about 100 m of underground development, including a ramp and
related crosscuts, was completed in July 2004 below Level 6.  A
small underground drilling program is also being considered for
this area.

Minera Santa Cruz funded this work out of operating cash flow.
Two prospective ore shoots were previously identified at San
Guillermo so the ramp splits to the north and south, in order to
explore both target zones. Mineralization has been intersected in
the south ramp and sampling is now underway.

Underground mapping and surveying of the mine workings in the
Santa Cruz mine is also underway to better assess the remaining
ore reserves in the mine. A large area of high grade, mixed oxide-
sulfide mineralization appears not to have been mined at Santa
Cruz because it caused metallurgical recovery problems in the
plant.

In addition to the drilling and ramp programs, Endeavour is also
carrying out metallurgical testing and mill optimization programs
at the Guanacevi process plant in order to improve the recoveries
of silver and gold.  RDI Resource Development Inc., metallurgical
consultants, recently completed a millsite tour and concluded
that:

   1) The mill and process equipment is in good working condition.
      A small capital investment to recondition certain equipment
      items should result in some improvements in mill
      performance;

   2) The plant personnel are all highly experienced operators.
      Given that several ball mills, flotation cells and leach
      tanks are idle due to lack of ore, it should be fairly
      simple to boost mill output once more prospective ore zones
      are developed;

   3) The production of silver dore bars from reprocessing of the
      old oxidized tailings doubled in July 2004 to 450 tpd.  All
      that is needed to expand it by another 50% to 750 tpd is a
      third pump station plus the expansion of the tailings pond
      to facilitate the mining of old tailings and the increase in
      new tailings;

   4) A systematic metallurgical test program is recommended for
      the San Guillermo and the North Porvenir ores and their mill
      products, as well as the old tailings feeding the oxide
      leach circuit, in order to boost the recoveries of gold and
      sillver in the plant.

To conclude, if the Phase 1 exploration program is successful,
Endeavour and Minera Santa Cruz plan to bring the North Porvenir
and San Guillermo mines into production this year.  Coupled with
the recent increase in tailings reprocessing and possible
improvements in gold and silver recoveries, silver production from
the Santa Cruz silver mine and the Guanacevi processing plant is
targeted to triple up to 1.2 million oz silver per year by June,
2005.

Endeavour holds an option to acquire a 100% interest in the Santa
Cruz silver mine and Guanacevi mill by paying US $7 million over a
4-year period. Endeavour can earn an initial 51% interest by
January 2005 by paying US $3 million (US $1 million already paid)
and spending US $1 million on mine exploration.

Endeavour Gold Corp. (EDR: TSX-V) is a small-cap exploration and
mining company focused on aggressively expanding its portfolio of
high grade silver-gold properties, reserves and production in
Mexico.  Canarc Resource Corp. holds a minority shareholding in
the company and helps manage the affairs of Endeavour.

The Company's financial statements for the fiscal year ending
February 29, 2004, and the fiscal quarter ending May 31, 2004
indicate they were prepared on a going concern basis, which
assumes the realization of assets and liquidation of liabilities
in the normal course of business.  KPMG LLP observes that Company
has incurred significant operating losses and currently has no
significant source of revenue.  The Company has financed its
activities principally by the sale of equity securities.  The
Company's ability to continue as a going concern is dependent on
continued financial support from its shareholders and other
related parties, the ability of the Company to raise equity
financing, and the attainment of profitable operations to fund its
operations.  Failure to continue as a going concern, KPMG
cautions, would require that the Company's assets and liabilities
be restated on a liquidation basis, which would differ
significantly from the going concern basis.


ENDURANCE SPECIALTY: Appoints Norman Barham to Board of Directors
-----------------------------------------------------------------
Endurance Specialty Holdings Ltd., (NYSE:ENH) a Bermuda-based
provider of property and casualty insurance and reinsurance,
appointed Norman Barham to its Board of Directors.

Mr. Barham was Vice Chairman and President of Global Operations of
Marsh, Inc., the largest diversified insurance brokerage and risk
management services company in the world, from 1997 to 2000. Prior
to joining Marsh, Inc., Mr. Barham held numerous senior management
roles in various parts of Johnson & Higgins from 1975 to 1997,
prior to the merger of Johnson & Higgins and Marsh & McLennan
Companies, including President, Chief Technical Officer and Head
of Global Property Insurance.  Mr. Barham currently serves on the
boards of Queens College, GAB Robbins, and NYC Outward Bound.

Kenneth J. LeStrange, Chairman and Chief Executive Officer of
Endurance Specialty Holdings, commented, "Our entire Board is
delighted to welcome Norman to our Board of Directors. Norman's
extensive experience in the insurance industry, along with his
strong managerial background, make him an excellent addition to
our Board. We look forward to working with Norman as we continue
to seek opportunities to build value for our shareholders."

              About Endurance Specialty Holdings

Endurance Specialty Holdings Ltd. is a global provider of
property and casualty insurance and reinsurance. Through its
operating subsidiaries, Endurance currently writes property per
risk treaty reinsurance, property catastrophe reinsurance,
casualty treaty reinsurance, property individual risks, casualty
individual risks, and other specialty lines. Endurance's operating
subsidiaries have been assigned a group rating of A from A.M. Best
and A- from Standard & Poor's. Endurance's headquarters are
located at Wellesley House, 90 Pitts Bay Road, Pembroke HM 08,
Bermuda and its mailing address is Endurance Specialty Holdings
Ltd., Suite No. 784, No. 48 Par-la-Ville Road, Hamilton HM 11,
Bermuda. For more information about Endurance, please visit
http://www.endurance.bm/

                         *     *     *

As reported in the Troubled Company Reporter's June 18, 2004,
edition, Standard & Poor's Ratings Services assigned its 'BBB'
counterparty credit rating to Endurance Specialty Holdings Ltd.
and its preliminary 'BBB' senior debt, 'BBB-' subordinated debt,
and 'BB+' preferred stock ratings to the company's $1.8 billion
universal shelf registration.

"The ratings on Endurance are based on its strong competitive
position, which is supported by a diversified business platform,"
noted Standard & Poor's credit analyst Damien Magarelli.  "In
addition, Endurance maintains strong capital adequacy and strong
operating performance."  Offsetting these positive factors are
concerns about Endurance's exposure to catastrophes and minimal
reinsurance protections.  Endurance also is a relatively new
operation, and management has not been tested through difficult
market cycles.


ENRON: Wants Solicitation Period Preserved Until Appeals Resolved
-----------------------------------------------------------------
Pursuant to Section 1121(d) of the Bankruptcy Code, Enron
Corporation and its debtor-affiliates and subsidiaries ask the
United States Bankruptcy Court for the Southern District of New
York to extend their exclusive period to solicit votes in favor of
the Supplemental Modified Fifth Amended Plan through the 30th day
after resolution of all appeals to the Confirmation Order.

Brian S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, in New
York, relates that since the Plan's confirmation, at least five
notices of appeal have been filed.  Even though they believe that
the Confirmation Order will not be overturned on appeal, out of
abundance of caution, the Debtors seek an extension of their
exclusive solicitation period.

As the Appeals must address issues initially raised as objections
to the Plan confirmation, if sustained, the Debtors believe that
the Plan, as currently filed, can be amended to address the issues
raised on appeal.  The Debtors would then proceed to resolicit
votes on the Plan, as amended.

The Debtors acknowledge that the appellate process may take months
or years.  Some parties may seek to appeal the Confirmation Order
beyond the District Court level.  The Debtors also recognize that
certain information in the Disclosure Statement may need to be
modified in the event it becomes necessary for the Debtors to
modify the Plan.  Thus, it is likely that the Debtors also will
circulate a supplement to the previously approved Disclosure
Statement, in accordance with the Bankruptcy Code if the Plan is
modified as a result of the appellate process.

Mr. Rosen contends that the extension of the Solicitation Period
will not harm or prejudice the Debtors' creditors in any
cognizable way.  Rather, it will afford the Debtors and all
parties-in-interest an opportunity to correct any infirmities in
the Plan while minimizing the need for lengthy and expensive
litigation over competing plans.  Allowing the Solicitation Period
to expire will virtually ensure that significant estate resources
will be spent on needless and protracted plan litigation rather
than on the amendment of the Plan.

The Court will convene a hearing on August 26, 2004 to consider
the Debtors' request. (Enron Bankruptcy News, Issue No. 120;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ENTERPRISE PRODS: Launches Tender Offers for GulfTerra Sr. Notes
----------------------------------------------------------------
Enterprise Products Operating L.P., a principal operating
subsidiary of Enterprise Products Partners L.P. (NYSE:EPD)
commenced four cash tender offers to purchase any and all of the
outstanding senior subordinated and senior notes of GulfTerra
Energy Partners, L.P., and GulfTerra Energy Finance Corporation
totaling approximately $921.5 million.  In connection with the
tender offers, Enterprise is soliciting consents to proposed
amendments that would eliminate certain restrictive covenants and
default provisions contained in the indentures governing the
notes.

The tender offers and consent solicitations are being made
pursuant to the terms and subject to the conditions set forth in
an Offer to Purchase and Consent Solicitation Statement from
Enterprise dated August 4, 2004, and a letter of transmittal and
consent, which have more details including a description of the
terms of the tender offers and consent solicitations.

Enterprise is commencing the tender offers and consent
solicitations in anticipation of completing the merger with
GulfTerra, and the closing of the merger is a non-waivable
condition to the completion of the tender offers and consent
solicitations. Other conditions include Enterprise's raising funds
sufficient to pay for the tendered notes. The purpose of the
tender offers is to acquire all of the outstanding GulfTerra
notes, and the purpose of the consent solicitations is to
eliminate substantially all of the covenants and several events of
default contained in the indentures governing such notes.

Enterprise is offering to purchase the following notes using
fixed-spread pricing according to the following securities:


Aggregate
Principal
Amount                                    Reference         Fixed
(in 000's)   Title of Securities          Security          Spread
__________________________________________________________________

$215,915  8-1/2% Sr. Sub. Notes due 2010  3.125% due 5/15/07 0.75%

$321,600  8-1/2% Sr. Sub. Notes due 2011  2.50% due 5/31/06  0.75%

$134,000 10-5/8% Sr. Sub. Notes due 2012  3.00% due 11/15/07 0.75%

$250,000  6-1/4% Sr. Notes due 2010       6.50% due 2/15/10  0.75%

The fixed-spread pricing will result in total consideration for
each $1,000 principal amount tendered equal to the present value
of the principal and interest that would accrue, in the case of
the senior subordinated notes, from the last interest payment date
until the applicable First Call Date, or in the case of the senior
notes, until maturity as determined by reference to a fixed spread
over the yield to maturity of designated United States Treasury
reference securities. Holders who tender their notes prior to the
consent date will be eligible to receive the total consideration,
which includes a consent payment equal to $30 per $1,000 of
principal. Holders of GulfTerra notes who tender their notes
following the consent date but prior to the expiration date will
not be eligible to receive the $30 consent payment.

In addition, Enterprise also will pay accrued and unpaid interest
up to but not including, the settlement date on all notes accepted
in the tender offers. The settlement date is expected to occur
promptly after the expiration date of September 2, 2004, unless
extended by Enterprise. This is the last day for holders to tender
their notes in order to qualify for the payment of the purchase
price on the settlement date, which would not include the consent
payment.

The consent date is August 13, 2004. Note holders must tender
their notes by 5:00 PM New York City time that day, unless
extended by Enterprise, to qualify for the payment of the total
consideration on the settlement date, which includes the consent
payment. Any holder who tenders its notes will be deemed to have
delivered its consent to the proposed amendments to the indenture
governing such notes. August 13 also is the last day for note
holders to withdraw tenders of their notes and revoke related
consents to the proposed amendments. Holders that tender their
notes after August 13 but prior to the expiration date will be
eligible to receive the total consideration less the consent
payment.

Enterprise has retained Lehman Brothers to serve as the Lead
Dealer Manager for the Tender Offer and the Lead Solicitation
Agent for the Consent Solicitation. J.P. Morgan and Wachovia
Securities have been retained to serve as Co-Dealer Managers and
Co-Solicitation agents, and D. F. King & Co., Inc. has been
selected to serve as the Tender Agent and Information Agent for
the Tender Offer and Consent Solicitation. Requests for documents
may be directed to D. F. King & Co. Inc. by telephone at (800)
487-4870 or (212) 269-5550, or in writing at 48 Wall Street, 22nd
Floor, New York, NY 10005. Questions regarding the tender offer
may be directed to Lehman Brothers, at (800) 438-3242 or (212)
528-7581.

Enterprise Products Partners L.P. is the second largest publicly
traded midstream energy partnership with an enterprise value of
over $7 billion. Enterprise is a leading North American provider
of midstream energy services to producers and consumers of natural
gas and natural gas liquids. The Company's services include
natural gas transportation, processing and storage and NGL
fractionation (or separation), transportation, storage and
import/export terminaling.

                         *     *     *

As reported in the Troubled Company Reporter's May 20, 2004
edition, Standard & Poor's Rating Services lowered its corporate
credit ratings on Enterprise Products Partners L.P. and Enterprise
Products Operating L.P. to 'BB+' from 'BBB-' and removed the
ratings from CreditWatch with negative implications. The outlook
is stable.

The ratings were originally placed on CreditWatch on Dec. 15, 2003
as a result of the announcement of the merger between Enterprise
Products and GulfTerra Energy Partners L.P. (BB+/Watch Neg/--).

The rating action is based upon an assessment that the credit
rating on Enterprise Products will be 'BB+' whether or not the
proposed merger with GulfTerra takes place.

"On a stand-alone basis, Enterprise Products' creditworthiness has
deteriorated over the past year," said Standard & Poor's credit
analyst Peter Otersen.


FC CBO III: S&P Cuts Rating on Class B Notes to 'CCC'
-----------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the
class B notes issued by FC CBO III Ltd., an arbitrage high-yield
CBO transaction, and removed it from CreditWatch negative, where
it was placed Dec. 11, 2003.  Concurrently, the rating on the
class A notes is affirmed and removed from Creditwatch negative,
where it was also placed on the same date.

Because of coverage test failures, FC CBO III has paid the down
the balance of its class A notes significantly since the ratings
assigned to the class A and B notes were placed on CreditWatch
negative.  As of the July 2004 trustee report, the current
outstanding balance on the class A notes is $112 million, or
approximately 39% of the original issuance.  As a result, the
rating assigned to the notes is affirmed and removed from
CreditWatch negative.  In addition, FC CBO III's class A
overcollateralization ratio has improved to 144.16%, compared to
the minimum requirement of 117.30% and a ratio of 119.88% at the
time of the CreditWatch placement.

However, the credit quality of the portfolio (which has an average
rating of 'B') and the overhedging of the liabilities, which
results in a significant payout of the available interest cash on
each payment date, have negatively impacted the credit enhancement
available to support the class B notes, leading to the downgrade
of these notes. According to the July 2004 trustee report, the
class B overcollateralization ratio stands at 106.74%, versus the
minimum required ratio of 109.70%.

Standard & Poor's noted that Prudential Investment Management
succeeded Bank of Montreal as the new collateral manager in
January 2004. Standard & Poor's will continue to monitor the
performance of the transaction to ensure that the rating remain
consistent with the credit quality of the underlying portfolio and
the credit enhancement available to support the rated notes.

       Rating Lowered and Removed From Creditwatch Negative

                     Rating               Balance (mil. $)
         Class   To        From          Orig.    Current
         -----   --        ----          -----    -------
         B       CCC       B/Watch Neg   37.75      39.41


             Rating Removed From Creditwatch Negative

                    Rating                 Balance (mil. $)
         Class   To        From            Orig.    Current
         -----   --        ----            -----    -------
         A       AA-       AA-/Watch Neg   289.50    112.40

                     Transaction Information

            Issuer:             FC CBO III Ltd.
            Co-issuer:          FC CBO III Corp.
            Manager:            Prudential Investment Management
            Underwriter:        Goldman Sachs & Co.
            Trustee:            Bank of New York
            Transaction type:   High-yield arbitrage CBO

   Tranche               Initial     Last             Current
   Information           Report      Action           Action
   Date (MM/YYYY)        11/1999     12/2003          8/2004
   -------------------   -------     -------------    -------
   A note rating         AAA         AA-/Watch Neg    AA-
   B note rating         A-          B/Watch Neg      CCC
   Cl. A OC ratio        137.75%     119.88%          144.16%
   Cl. A OC ratio min.   117.30%     117.30%          117.30%
   Cl. B OC ratio        121.87%     101.92%          106.74%
   Cl. B OC ratio min.   109.70%     109.70%          109.70%
   A note bal.           $289.50mm   $217.50mm        $112.40mm
   B note bal.           $37.75mm    $38.33mm         $39.41mm


   Portfolio Benchmarks                         Current
   --------------------                         -------
   S&P Wtd. Avg. Rtg. (excl. defaulted)         B
   S&P Default Measure (excl. defaulted)        5.43%
   S&P Variability Measure (excl. defaulted)    2.02%
   S&P Correlation Measure (excl. defaulted)    1.15
   Oblig. Rtd. 'BBB-' and above                 8.58%
   Oblig. Rtd. 'BB-' and above                  60.26%
   Oblig. Rtd. 'B+' and above                   79.82%
   Oblig. Rtd. 'B' and above                    89.31%
   Oblig. Rtd. 'B-' and above                   92.58
   Oblig. Rtd. in 'CCC' range                   7.42%
   Oblig. Rtd. 'SD' or 'D'                      10.62%


   S&P Rated            Last                   Current
   OC (ROC)         Rating Action           Rating Action
   ---------     ----------------------     -------------
   Class A       99.87% (AA-/Watch Neg)     108.90% (AA-)
   Class B       96.15% (B/Watch Neg)        99.39% (CCC)


FLEMING COMPANIES: Agrees to Transfer $55M to Trust to Pacify CHEP
------------------------------------------------------------------
CHEP commenced a lawsuit against the Fleming Companies, Inc. and
its debtor-affiliates and subsidiaries for conversion, unjust
enrichment, and the imposition of a constructive trust based on
CHEP's distribution letter agreement with Fleming regarding
pallets.  Fleming holds $5,452,485 in trust for CHEP.  The Debtors
have represented to the United States Bankruptcy Court for the
District of Delaware that their cash balance would not fall below
$20 million and that they will always have sufficient cash on hand
to preserve CHEP's ability to trace its trust res under the
"lowest intermediate balance" test.

But according to the Debtors Second Amended Disclosure Statement,
as of July 31, 2004, the Debtors will have only $108,837,000 in
cash and equivalents.  Hence, CHEP USA objected to the Plan's
provision to pay Class 2 Prepetition Lenders' Secured Claims in
full in cash on the Effective Date.  The Plan defines cash to mean
"cash and cash equivalents."  The total estimated secured claims
for Class 2 ranges from $200 million to $220 million as of the
Effective Date.

To resolve the dispute, the Debtors and CHEP stipulated and agree
that:

    (a) If the cash balance falls below $5,452,485 any time on or
        after July 26, 2004, CHEP will able to trace $5,452,485
        in the Debtors, the Reorganized Debtors, but not
        including Core-Mark Newco, or the Post-Confirmation
        Trust's bank accounts from that time forward without
        being limited by the lowest intermediate balance test or
        by any other tracing principle;

    (b) The Debtors, the Reorganized Debtors and the PCT waive
        any argument that the constructive trust funds can be
        lost if the cash balance in the bank accounts fall below
        $5,452,485 at any time on or after July 26, 2004;

    (c) The Debtors represent that the unrestricted cash and
        equivalents to be transferred by the Debtors to the PCT
        will be $55,000,000 as of July 31, 2004; and

    (d) Any amounts subject to CHEP's constructive trust claim
        under the Adversary Proceeding will be considered an
        obligation transferred to the PCT under the terms of the
        Plan and will be paid by the PCT in accordance with the
        terms of the Court's order on the claim.

The Debtors further amended their Reorganization Plan and
Disclosure to reflect the parties' settlement, among other things.

Judge Walrath confirmed the Debtors' Third Amended Reorganization
Plan.

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


FLOTEK INDUSTRIES: Says $1.97 Mil. Sales in July is Highest Ever
----------------------------------------------------------------
Flotek Industries, Inc. (OTC BB: FLTK) reported record sales in
July of $1.97 million, the highest monthly sales level in the
history of the Company.  Flotek continues to demonstrate its
ability to generate healthy results and meet the needs of
customers in each of our operating units.

The Company continued to see strong demand for its biodegradable
"green" chemical line.  Expanding applications of this line has
bolstered sales and is expected to support continued future growth
in the Chemical division.  The Material Translogistics unit
exceeded projected sales levels due to strong Gulf Coast activity.
Rig count, one of the Company's key sales drivers, remained high.

In the Production segment, the initiatives that Flotek undertook
in the first quarter to restructure the Petrovalve management
structure with greater presence in the North America and
International markets, are beginning to deliver results. Flotek
resumed product deliveries to our Venezuelan customers in July.
The drilling product segment dipped in the 2nd quarter due to the
slow down of its core customers; however Turbeco sales returned to
positive growth in July.

The company continues to focus on expansion through internal
organic growth and through strategic vertical acquisitions.
Flotek's Chairman and CEO, Jerry Dumas stated, "The continued
dedication of our employees has brought our company to a position
of record sales, earnings and cash flow."

More detail will be available in the Company's 10-Q to be filed
with the SEC. For product information and additional information
on the Company, please visit Flotek's web site at
http://www.flotekind.com/

Flotek is a publicly traded company involved in the engineering,
manufacturing and marketing of innovative downhole production,
drilling equipment and specialty chemicals for cementing and
stimulation. It serves major and independent companies in the
domestic and international oil industry.

                         *     *     *

                       Liquidity Concerns

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

"In the first three months of 2004, the Company produced net
income of $233,990 and had positive cash flow from operations of
$156,306. This turnaround from the same period in 2003 is a result
of significant improvement in operating results for all reporting
units due to increased activity and operational efficiencies. The
positive cash flow from operations is a result of higher net
income offset by increased net working capital requirements to
grow operations in the first quarter of 2004.

"As of March 31, 2004, net working capital was a negative
$4,430,198, resulting in a current ratio of .52 to 1. Both
accounts receivable and inventories have increased due to
increased levels of activity, for the majority of reporting units,
between the fourth quarter of 2003 and the first quarter of 2004.
Accounts payable have also increased primarily due to increased
trade payables from a higher level of business activity.

"The Company made debt service payments of $187,315 and repayments
to related parties of $32,660 during the first three months of
2004. The company has estimated minimum debt service payments in
2004 of $5,659,696 million. This includes minimum principal and
interest payments on Related Party indebtedness, Short-Term Notes
Payable, and Long-Term Debt as discussed in Notes 6, 7 and 8 of
the Notes to Consolidated Financial Statements.

"The Company believes its continuing operations are capable of
generating sufficient cash flow to meet its debt service
obligations under current market conditions. However, if a market
downturn occurred it would be difficult to meet debt service
obligations without increased sales. While the market we serve
continues to steadily improve, as well as our cash flow position,
we believe the Company will need to raise additional capital
through the sale of its debt or equity securities to provide the
necessary cash flow to grow the business. There can be no
assurance that the Company will be able to secure such financing
on acceptable terms or raise the required equity."


GE CAPITAL: Fitch Gives Low B-Ratings to 2 Mortgage-Backed Classes
------------------------------------------------------------------
Fitch Ratings affirms GE Capital's commercial mortgage pass-
through certificates, series 2001-1, as follows:

   -- $138.5 million class A-1 at 'AAA';
   -- $703 million class A-2 at 'AAA';
   -- Interest-only classes at 'AAA';
   -- $45.2 million class B at 'AA';
   -- $49.4 million class C at 'A';
   -- $15.5 million class D at 'A-';
   -- $15.5 million class E at 'BBB+';
   -- $15.5 million class F at 'BBB';
   -- $14.1 million class G at 'BBB-';
   -- $25.4 million class H at 'BB+';
   -- $18.3 million class I at 'BB';
   -- $9.9 million class J at 'BB-'.

Fitch does not rate classes K, L, M or N.

The rating affirmations reflect the minimal reduction of the pool
collateral balance since issuance.  As of the July 2004
distribution date, the pool's aggregate certificate balance has
decreased 2.96% to $1,095.5 million from $1,128.9 million.

GEMSA Loan Services, L.P., the master servicer, collected year-end
2003 financials for 97% of the pool balance.  Based on the
information provided, the resulting YE 2003 weighted average debt
service coverage ratio (DSCR) is 1.57 times (x), compared with
1.42x at issuance for the same loans.

There are five loans (2.67%) in special servicing.  The largest
loan (0.86%) is secured by a multifamily property located in
Jonesboro, GA and is currently 90 days delinquent.  The second and
third largest loans (1.41% combined) are secured by self-storage
properties located in CA and are cross-collateralized and cross-
defaulted. The loans transferred to the special servicer as a
result of chronic delinquency and have been brought current.

Fitch reviewed credit assessments of the 59 Maiden Lane loan
(4.4%) and the Equity Inns Portfolio loan (2.9%).  The Fitch-
stressed DSCR for each loan is calculated using servicer provided
net operating income less required reserves divided by debt
service payments based on the current balance using a Fitch-
stressed refinance constant.  Based on their stable-to-improved
performance, the 59 Maiden Lane loan maintains an investment-grade
credit assessment, while the Equity Inns Portfolio remains below
investment-grade.

The 59 Maiden Lane loan is secured by a 1,037,002 square foot (sf)
office property located in New York, New York.  The property is
97.3% occupied as of Dec. 31, 2003.  The stressed DSCR for YE 2003
was 3.66x, compared with 3.77x as of YE 2002 and 2.75x at
issuance.

The Equity Inns loan is secured by seven cross-collateralized and
cross-defaulted limited service hotels totaling 859 rooms. The
hotels are located in seven different states. The stressed DSCR
for YE 2003 was 1.38x compared with 1.48x as of YE 2002 and 2.12x
at issuance. In addition, the revenue per available room for the
portfolio was $55 as of YE 2003 compared with $51 as of YE 2002
and $54 at issuance.


HOLLINGER INT'L: Moody's Outlook Positive After Debt Repayment
--------------------------------------------------------------
Moody's Investors Service has changed the rating outlook on
Hollinger International Publishing Inc. to positive from stable
and has withdrawn other ratings. Details of this rating
action are as follows:

   Ratings withdrawn:

      -- $45 million Senior Secured Revolving Credit Facility,
         due 2008 -- Ba2

      -- $210 million Term Loan "B", due 2009 -- Ba2

      -- $300 million of 9% Senior Unsecured Notes, due 2010 -- B2

   Ratings confirmed:

      -- Senior Implied rating -- Ba3

      -- Issuer rating -- B2

The outlook is changed to positive.

The ratings withdrawal follows the announcement by Hollinger
International Inc. that it has fully repaid and retired its senior
secured credit facilities and that it has completed a tender offer
for substantially all of its senior unsecured notes.

The change in the outlook to positive reflects Moody's view that
the completion of the sale of the Telegraph Group Limited results
in an immediate improvement in the financial profile of Hollinger
International Publishing Inc.

Management has not yet announced its plans to deploy approximately
$600 million in cash proceeds which remain following the debt
repayment, however it is possible that it will use a portion of
the remaining cash to repurchase stock of Hollinger International
Inc., including class B common stock held by Hollinger Inc.

Moody's notes that Hollinger International Inc. also reported
current income taxes payable of $347 million at September 30, 2003
(the date of the most recently filed uncertified financial
statements).

Moody's plans to meet with management to discuss the company's
future financial plans. In addition, Moody's expects to refresh
its ratings on Hollinger International Publishing Inc. following
receipt of updated audited financial statements.

On July 30, 2004, Hollinger International Inc. announced that
three of its indirect subsidiaries sold their outstanding shares
of the Telegraph Group Limited to Press Acquisition Limited and
Holyrood Holdings Limited for the equivalent of $1,327 million in
cash. Adjusting for cash acquired, the transaction resulted in a
net cash price of approximately $1,210 million.

Hollinger International Inc. has applied a portion of the proceeds
to repay outstanding indebtedness under the company's
subsidiaries' bank credit agreement. In addition, the company used
a portion of the proceeds to complete its tender offer of
Hollinger International Publishing Inc.'s $300 million of 9%
Senior Notes due 2010.

Hollinger International Publishing Inc. is headquartered in
Chicago, Illinois.


INFRASOURCE SERVICES: Inks EnStructure & Utili-Trax Acquisitions
----------------------------------------------------------------
InfraSource Services, Inc. (NYSE:IFS), one of the largest
specialty contractors servicing utility transmission and
distribution infrastructure in the United States, has signed
definitive agreements to acquire substantially all of the assets
and certain liabilities of EnStructure, the construction services
business of SEMCO ENERGY, Inc., and Utili-Trax, the construction
business of Connexus Energy, for a cash purchase price of
approximately $20.8 million and $5.3 million, respectively,
subject to certain purchase price adjustments.

EnStructure, headquartered in Michigan, provides a wide range of
construction services including pipeline integrity services,
installation of underground transmission and distribution
pipelines, construction of compressor and meter stations, paving
and restoration, and fiber optic installation for customers within
the utilities and oil & gas markets.  EnStructure, which had
annual revenues in 2003 of approximately $75 million and has
approximately 750 employees, operates throughout the Midwestern,
Southern and Southeastern regions of the United States through
three operating companies: SubSurface Construction, Iowa Pipeline
Associates, and Flint Construction.

Utili-Trax, headquartered in Minnesota, provides underground and
overhead construction services for electric cooperatives and
municipal utilities throughout the upper Midwest including joint
trenching, directional boring, plowing and placement and utility
line, transformer and meter installation and maintenance services.
Utili-Trax had annual revenues in 2003 of approximately $10
million and has approximately 100 employees.

David Helwig, InfraSource President & CEO, said, "Our strategy is
to capitalize on the favorable trends in the utility
infrastructure markets, increase market share and pursue highly
strategic acquisitions. These acquisitions reflect continued
progress in pursuit of this strategy. They will strengthen our
geographic presence in the Midwest, South and Southeast and
provide additional service offerings for the natural gas market."

Paul Daily, President & CEO of InfraSource Underground Services
(IUS), said, "We are excited about the addition of EnStructure and
Utili-Trax and the growth opportunities that they present in
expanding our service capabilities to meet the needs of our
customers. Both Steve Hicks, President of EnStructure, and Darin
Peterson, President of Utili-Trax, will join our leadership team."

The acquisitions are subject to customary closing conditions and
are expected to close by the end of the third quarter of 2004.
InfraSource expects that the acquisitions, when consummated, will
be accretive to earnings in 2004. The acquisitions will be
financed with the Company's available cash and/or borrowings under
its senior credit facility.

InfraSource management will discuss the EnStructure and Utili-Trax
transactions on the Company's second quarter 2004 conference call
scheduled for August 11, 2004 at 9:00AM (EDT). The conference call
will be webcast live and available for replay on the investors
page of its website, http://www.infrasourceinc.com/Interested
parties without access to the Internet may dial (719) 457-2617
(listen-only mode). A telephone replay will be available shortly
after the call. The telephone replay number is (719) 457-0820;
Passcode: 323829.

                     About SEMCO ENERGY, Inc.

SEMCO ENERGY, Inc. (NYSE:SEN) distributes natural gas to more than
391,000 customers combined in Michigan, as SEMCO ENERGY GAS
COMPANY, and in Alaska, as ENSTAR Natural Gas Company. It owns and
operates businesses involved in propane distribution, intrastate
pipelines and natural gas storage in various regions of the United
States. In addition, it provides information technology and
outsourcing services, specializing in the mid-range computer
market. Additional information can be found at
http://www.semcoenergy.com/

                      About Connexus Energy

Connexus Energy is the largest customer-owned utility in Minnesota
providing electricity and related products and services to over
110,000 homes and businesses in portions of Anoka, Chisago,
Hennepin, Isanti, Ramsey, Sherburne, and Washington counties.
Additional information about Connexus Energy is available online
at http://www.connexusenergy.com/

                  About InfraSource Services, Inc.

InfraSource Services, Inc. (NYSE:IFS) is one of the largest
specialty contractors servicing utility transmission and
distribution infrastructure in the United States. InfraSource
designs, builds, and maintains transmission and distribution
networks for utilities, power producers, and industrial customers.
Further information can be found at http://www.infrasourceinc.com/

                         *     *     *

As reported in the Troubled Company Reporter's May 11, 2004,
edition, Standard & Poor's Ratings Services assigned its 'BB-'
corporate credit rating to Aston, Pennsylvania-based InfraSource
Services Inc. At the same time, Standard & Poor's assigned its
'BB-' senior secured bank loan rating and recovery rating of '5,'
indicating negligible (less than 25%) recovery of principal in the
event of a default, to the company's $157.2 million senior secured
credit facility.

The specialty contractor provides infrastructure services to the
power, telecommunications, and general industrial markets. Its
total debt (including present value of operating leases)
outstanding as of Dec. 31, 2003, was about $169 million. The
outlook is stable.

"Niche market positions, growing geographic presence, and a highly
variable cost structure temper downside risk," said Standard &
Poor's credit analyst Heather Henyon. "Modest liquidity, weak end-
markets, and customer concentration strain upside rating
potential."


J.P. MORGAN: Moody's Downgrades & Junks Certain Mortgage Notes
--------------------------------------------------------------
Moody's Investors Service upgraded the ratings of two classes,
downgraded the ratings of three classes and affirmed the ratings
of nine classes of J.P. Morgan Commercial Mortgage Finance Corp.,
Commercial Mortgage Pass-Through Certificates, Series 2000-C10 as
follows:

     -- Class A-1, $36,881,179, Fixed, affirmed at Aaa
     -- Class A-2, $471,331,000, Fixed, affirmed at Aaa
     -- Class X, Notional, affirmed at Aaa
     -- Class B, $31,388,000, Fixed, upgraded to Aa1 from Aa2
     -- Class C, $29,541,000, Fixed, upgraded to A1 from A2
     -- Class D, $9,232,000, Fixed, affirmed at A3
     -- Class E, $23,079,000, Fixed, affirmed at Baa2
     -- Class F, $10,155,000, Fixed, affirmed at Baa3
     -- Class G, $14,771,000, Fixed, affirmed at Ba1
     -- Class H, $14,771,000, Fixed, affirmed at Ba2
     -- Class J, $7,385,000, Fixed, affirmed at Ba3
     -- Class K, $5,539,000, Fixed, downgraded to B2 from B1
     -- Class L, $7,386,000, Fixed, downgraded to B3 from B2
     -- Class M, $5,539,000, Fixed, downgraded to Caa1 from B3

As of the July 15, 2004 distribution date, the transaction's
aggregate balance has decreased by approximately 8.3% to $679.0
million from $740.1 million at securitization. The Certificates
are collateralized by 161 mortgage loans secured by commercial and
multifamily properties.  The loans range in size from less than
1.0% of the pool to 7.0% of the pool, with the top 10 loan
exposures representing 30.0% of the pool.  Six loans representing
1.0% of the pool have defeased and are secured by U.S. Government
securities. Five loans have been liquidated from the pool,
resulting in aggregate realized losses of approximately $3.0
million.

Six loans representing 3.3% of the pool are in special servicing.
Moody's has estimated aggregate losses of approximately $6.4
million for all the specially serviced loans.

Moody's was provided with full-year 2003 operating results for
approximately 94.7% of the performing loans in the pool. Moody's
loan to value ratio ("LTV") is 86.7%, compared to 85.8% at
securitization. The upgrade of Classes B and C is due to stable
pool performance and increased credit support. The downgrade of
Classes K, L and M is due to realized losses, anticipated losses
on the specially serviced loans and LTV dispersion. Based on
Moody's analysis 9.1% of the pool has a LTV greater than 100.0%,
compared to 0.6% at securitization.

The top three exposures represent 13.2% of the outstanding pool
balance.  The largest exposure is the Abbey Portfolio Loan ($47.7
million - 7.0%) which consists of two cross-collateralized and
cross-defaulted mortgage loan pools secured by 12 properties
totaling 946,000 square feet. The portfolio consists of a mix of
retail (six), industrial (three), office (two) and mixed use (one)
properties, all of which are located in southern California. The
portfolio's occupancy has declined significantly since
securitization, primarily due to the early lease termination in
2002 of a 205,000 square foot tenant. As of December 31, 2003 the
portfolio's overall occupancy was 62.7%, compared to 91.5% at
securitization. Moody's LTV is 95.1%, compared to 82.2% at
securitization.

The second largest loan is the Atlantic Development II Loan ($21.3
million - 3.1%), which is secured by two industrial properties
totaling 273,000 square feet. The properties are located in
Warren, New Jersey and are 100.0% leased, the same as at
securitization. Moody's LTV is 73.6%, compared to 87.9% at
securitization.

The third largest loan is the Covina Hills Mobile Home County Club
Loan ($20.8 million - 3.1%) which is secured by a 500-pad mobile
home park located in La Puente, California. The property is 100.0%
occupied, the same as at securitization. Moody's LTV is 79.1%,
compared to 86.2% at securitization.

The pool's collateral is a mix of multifamily (30.8%), retail
(27.6%), office (17.8%), industrial and self storage (12.1%),
hotel (7.3%), healthcare (2.1%), CTL (1.3%) and U.S. Government
securities (1.0%). The collateral properties are located in 33
states. The highest state concentrations are California (25.3%),
Texas (8.4%), New Jersey (6.2%), Illinois (5.7%), and Florida
(4.7%). All of the loans are fixed rate.


JACUZZI BRANDS: Fitch Affirms Single-B Senior Secured Debt Rating
----------------------------------------------------------------
Fitch Ratings has affirmed its ratings on Jacuzzi Brands, Inc.'s
$380 million 9.625% senior secured notes at 'B', $200 million
asset based bank credit facility at 'BB' and $65 million term loan
at 'BB-'. The Rating Outlook is Stable.

The ratings consider the company's leading brands in its bath and
plumbing segments, increased distribution of its bath products and
strong operating margins of its plumbing and Rexair segments. The
ratings also consider the high cost structure of the Eljer
operations, the level of debt and leverage, the challenging
operating environment and negative pressures on operating profit
margins, particularly in the bath and plumbing segments, and
sensitivity to changes in levels of consumer spending and
construction activity.

Jacuzzi Brands is focused on strengthening its three operating
segments, bath products, plumbing products and Rexair, through
brand investment, elimination of high cost manufacturing and
unprofitable product lines and other cost cutting efforts.
Revenues have benefited from increased distribution of bath
products as well as market share gains in plumbing products.  Most
significantly, during 2003, Jacuzzi Brands became the principal
supplier of stocked whirlpool bath products to Lowe's Companies,
Inc.  As a result of the Lowes business, increased market share in
domestic spas and additional home center business in the UK, bath
products segment revenues have increased substantially, up 21% for
the first half of 2004, following revenue declines in 2000 and
2001 when the company lost inventory positions in whirlpool baths
and spas at the large home improvement retailers.

Nonetheless, operating margins across all segments have been
challenged for several reasons.  Bath segment margins in fiscal
2003 were negatively impacted by costs related to the Lowe's
distribution rollout, Chino plant start-up and Southern California
workers compensation.  In the first half of 2004, manufacturing
costs for the Eljer brand of bath products remained high given its
U.S. base, however, Fitch recognizes the company's ongoing actions
to rationalize these operations. In addition, Plumbing products'
margins have been pressured by rising steel prices and highly
competitive markets in the commercial construction market and
Rexair operating margins have declined given increased costs
associated with the introduction of its new vacuum cleaner model
during the first half of fiscal 2004.

Fitch anticipates that Jacuzzi Brands' revenues will further
increase as the Lowe's distribution agreement is annualized and as
the company continues to introduce new products.  Operating
profits should benefit from cost reductions obtained through the
company's restructuring efforts to rationalize manufacturing
facilities and unprofitable product lines as well as lower rollout
costs as the Lowe's whirlpool bath and Rexair vacuum product
launches have been completed.

As a result of increased operating profits together with debt
reduction from cash flow generation, credit measures are expected
to strengthen over the intermediate term. For the twelve months
ended March 31, 2004, leverage, measured by total debt-to-EBITDA
was 4.2 times (x) and EBITDA coverage of interest was 2.1x, this
was an improvement from 6.2x and 1.7x respectively in fiscal 2002.


JUGOBANKA A.D.: Bank Regulators Want N.Y. Court Ruling Reversed
---------------------------------------------------------------
Sage Realty Corp. says that what started as a US$4 million
landlord-tenant dispute between Sage Realty Corp. and a bankrupt
Yugoslavian bank, Jugobanka, has become a major target of state
bank regulators in the U.S. concerned that legal actions in
Yugoslavia and America threaten the practice of "ring fencing"
under which state-licensed, foreign-owned banks must maintain
sufficient capital to cover liabilities in case of insolvency.

The Conference of State Banking Supervisors, along with the top
banking regulators in New York, Connecticut, Illinois, California,
Georgia, Florida and Texas have asked to intervene in the legal
action currently before U.S. District Judge Jed S. Rakoff in New
York.  The regulators' concern is that allowing a Serbian trustee
to consolidate Jugobanka's stateside assets in a Serbian court
takes those assets beyond the reach of state bank regulators and
threatens their obligation to properly regulate state-licensed,
foreign banks in the case of an insolvency and liquidation.

The case stems from a 1992 order by the first President Bush
freezing assets of Yugoslav-owned banks in connection with the
Balkans crisis.  Jugobanka, which rented 30,000 square feet at 437
Madison Avenue in Manhattan owned by Sage Realty -- the property
management arm of the William Kaufman Organization Ltd. --
eventually stopped paying rent.  While Sage won a ruling in
seeking about US$4 million in rent and interest in American
federal courts, Jugobanka sought bankruptcy relief in Serbia.

The bank regulators' key concern is a decision by Judge Rakoff
that reversed Bankruptcy Court Judge Cornelius Blackshear's
decision denying Jugobanka's attempt to centralize all the assets
in the Serbian bankruptcy action.  Judge Blackshear ruled that
Jugobanka did not have standing to repatriate the assets to Serbia
and that no jurisdiction here permitted that.  Judge Rakoff -- who
as a district judge hears appeals from Bankruptcy Court --
reversed Judge Blackshear, and said Jugobanka had the right to
make that argument before Judge Blackshear.

Judge Rakoff's decision caused an uproar among bank regulators.
The regulators are now asking Judge Rakoff to reconsider his
decision, arguing that it threatens to legitimize Jugobanka's
attempt to take those assets offshore to Yugoslavia, beyond the
reach of state banking laws and regulators.

Serbian courts rebuffed Sage's move to collect from Jugobanka,
even though a U.S. court upheld Sage's claim.  That threatens not
only Sage's right to collect what is owed, but by extension, U.S.
state bank regulators' ability to protect creditors in just this
kind of situation.

Make no mistake -- Sage's primary interest is in recovery of the
US$4 million in rent and interest legitimately owed by Jugobanka.
But Sage principals Robert and Melvyn Kaufman acknowledge that the
issue is far broader than what is owed them.

Here are excerpts from bank regulators amicus briefs filed with
Judge Rakoff:

     "Many of our member states license foreign banks to operate
     as agencies and branches in their jurisdictions,"
     Conference of State Bank Supervisors president Neil Milner
     wrote.  "Under the banking laws of these states, the
     states' banking regulators have the sole authority to
     liquidate the assets of an insolvent state-licensed foreign
     bank for distribution to creditors of the bank's branch or
     agency.  We write to point out that the Court's
     interpretation of Section 304, as applied in this context,
     is unprecedented and brings the Bankruptcy Code -- which
     ordinarily would not apply to these institutions -- into
     irreconcilable conflict with state bank insolvency laws.
     The Court's application of Section 304 would alter
     fundamentally how state-licensed foreign banks are
     regulated.  The purpose of state licensing and supervision
     is to protect the creditors who do business with state-
     licensed foreign entities.  Expatriating the assets to a
     foreign proceeding would defeat this."

Connecticut Banking Commissioner John P. Burke wrote to Judge
Rakoff in a letter echoing comments from regulators in other
states.

     "This is not simply a parochial state interest," wrote
     Mr. Burke.  "Ring-fencing bank assets for the benefit of
     its creditors is how bank liquidations have always worked -
     - including at the federal level and in may foreign
     countries.  Our state bank liquidation statute has co-
     existed with federal bankruptcy laws for several years and
     we are aware of no similar instance where a foreign branch
     or agency was subject to an asset turnover proceeding in
     federal court."


KENDRICK ENGG: Voluntary Chapter 11 Case Summary
------------------------------------------------
Lead Debtor: Kendrick Engineering & Manufacturing Company
             7908 Cotton Trail
             Godley, Texas 76044

Bankruptcy Case No.: 04-47515

Type of Business: The Debtor designs and manufactures plastic
                  vacuum molded products for the automotive
                  industry.

Chapter 11 Petition Date: August 2, 2004

Court: Northern District of Texas (Ft. Worth)

Judge: Barbara J. Houser

Debtor's Counsel: Eric A. Liepins, Esq.
                  Eric A. Liepins, P.C.
                  12770 Coit Road, Suite 1100
                  Dallas, Texas 75251
                  Tel: 972-991-5591

Estimated Assets: $1 Million to $10 Million

Estimated Debts: $1 Million to $10 Million

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


KILROY REALTY: Closes $144 Mil. Unsecured Debt Private Placement
----------------------------------------------------------------
Kilroy Realty Corporation (NYSE:KRC) closed a $144 million private
placement of unsecured six and ten-year notes that were placed
with a group of six institutional investors.  The first tranche
totals $61 million, matures in August 2010, and bears interest at
5.72%. The second tranche totals $83 million, matures in August
2014, and bears interest at 6.45%.  The blended interest rate for
the $144 million private placement is 6.14%.  The company will use
the proceeds to repay a $74 million 8.35% debt facility and reduce
its floating rate debt. J.P. Morgan Securities Inc. acted as
placement agent in the transaction.

                        About the Company

Kilroy Realty Corporation, a member of the S&P Small Cap 600
Index, is a Southern California-based real estate investment trust
active in the office and industrial property sectors. For more
than 50 years, the company has owned, developed, acquired, and
managed real estate assets primarily in the coastal regions of
California and Washington. KRC is currently active in office
development and redevelopment in Los Angeles and San Diego
counties. At June 30, 2004, the company owned 7.2 million square
feet of commercial office space and 4.9 million square feet of
industrial space. More information is available at
http://www.kilroyrealty.com/

                         *     *     *

                       Liquidity Concerns

In its Form 10-Q for the quarterly period ended June 30, 2004,
filed with the Securities and Exchange Commission, Kilroy Realty
Corporation reports:

"The Company believes that it will have sufficient capital
resources to satisfy its liquidity needs over the remainder of
2004. The Company estimates it will have a range of approximately
$340 million to $372 million of available sources to meet its
short-term cash needs as follows: estimated availability of
approximately $285 million under its Credit Facility, estimated
operating cash flow ranging from $48 million to $50 million,
proceeds from the disposition of non-strategic assets ranging up
to an additional $30 million, and approximately $7 million from
the release of restricted cash during 2004. The Company estimates
it will have a range of approximately $210 million to $219 million
of commitments and capital expenditures during the remainder of
2004 comprised of the following: $123 million in secured debt
principal repayments; planned expenditures for in-process
development, stabilized development and new development projects
ranging from $30 million to $33 million; $14 million of committed
costs for executed leases and capital expenditures; and budgeted
capital improvements, tenant improvements and leasing costs for
the Company's stabilized portfolio ranging from approximately $5
million to $11 million, depending on leasing activity. In
addition, based on the Company's annualized dividends for the
second quarter of 2004, the Company may distribute approximately
$39 million to common and preferred stockholders and common and
preferred unitholders during the remainder of 2004. There can be,
however, no assurance that the Company will not exceed these
estimated expenditure and distribution levels or be able to obtain
additional sources of financing on commercially favorable terms,
or at all.

"The Company expects to meet its long-term liquidity requirements,
which may include property and undeveloped land acquisitions and
additional future development and redevelopment activity, through
retained cash flow, borrowings under the Credit Facility,
additional long-term secured and unsecured borrowings,
dispositions of non-strategic assets, issuance of common or
preferred units of the Operating Partnership, and the potential
issuance of debt or equity securities. The Company does not intend
to reserve funds to retire existing debt upon maturity. The
Company will instead seek to refinance such debt at maturity or
retire such debt through the issuance of equity securities, as
market conditions permit."


LANTIS EYEWEAR: Committee Signs-Up Arent Fox as Attorneys
---------------------------------------------------------
The Official Unsecured Creditors Committee in Lantis Eyewear
Corporation's chapter 11 case, asks the U.S. Bankruptcy Court for
the Southern District of New York, for permission to employ Arent
Fox PLLC as its counsel.

Schuyler G. Carroll, Esq. will be primarily responsible for Arent
Fox's representation of the Committee in Lantis' case.

Arent Fox will:

   a) assist, advise and represent the Committee in its
      consultation with the Debtor relative to the
      administration of this chapter 11 case;

   b) assist, advise and represent the Committee in analyzing
      the Debtor's assets and liabilities, investigating the
      extent and validity of liens and participating in and
      reviewing any proposed asset sales or dispositions;

   c) attend meetings and negotiate with the representatives of
      the Debtor and secured creditors;

   d) assist and advise the Committee in its examination and
      analysis of the conduct of the Debtor's affairs;

   e) assist the Committee in the review, analysis and
      negotiation of any plan(s) of reorganization that may be
      filed and to assist the Committee in the review, analysis
      and negotiation of the disclosure statement accompanying
      any plan(s) of reorganization;

   f) assist the Committee in the review, analysis, and
      negotiation of any financing or funding agreements;

   g) take all necessary action to protect and preserve the
      interests of the Committee, including, without limitation,
      the prosecution of actions on its behalf, negotiations
      concerning all litigation in which the Debtor are
      involved, and review and analysis of all claims filed
      against the Debtor's estate;

   h) generally prepare on behalf of the Committee all necessary
      Revised Motions, applications, answers, orders, reports
      and papers in support of positions taken by the Committee;

   i) appear, as appropriate, before this Court, the Appellate
      Courts, and other Courts in which matters may be heard and
      to protect the interests of the Committee before said
      Courts and the United States Trustee; and

   j) perform all other necessary legal services in this case.

Mr. Carroll's current billing rate is $445 per hour.  Other Arent
Fox professionals who will provide services bill:

            Designation         Hourly Billing Rate
            -----------         -------------------
            Members                $340 - $590
            Of Counsel              340 -  580
            Associates              175 -  395
            Legal Assistants        165 -  190

Headquartered in New York, New York, Lantis Eyewear Corporation --
http://lantiseyewear.com/-- is a leading designer, marketer and
distributor of sunglasses, optical frames and related eyewear
accessories throughout the United States.  The Company filed for
chapter 11 protection on May 25, 2004 (Bankr. S.D.N.Y. Case No.
04-13589).  Jeffrey M. Sponder, Esq., at Riker, Danzig, Scherer,
Hyland & Perretti, LLP represents the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it listed $39,052,000 in total assets and $132,072,000 in total
debts.


LINDSAY MORDEN: Karen Murphy Resigns as President and CEO
---------------------------------------------------------
Lindsey Morden Group Inc.'s board of directors accepted the
resignation of Karen Murphy as President and Chief Executive
Officer of Lindsey Morden and Cunningham Lindsey U.S.,
Inc.

The board named Jan Christiansen as new President and Chief
Executive Officer of Lindsey Morden and Cunningham Lindsey U.S.
Mr. Christiansen has 30 years of global experience in a variety of
industries.  During the last 10 years he has focused on the
service industry in the role of Chief Financial Officer, first
with Panalpina, an integrated international freight forwarder and
later with USF Worldwide Inc., a subsidiary of USF Corporation.

James Dowd, Chairman of Lindsey Morden, said, "The board has
accepted Ms. Murphy's decision to resign and expresses its
appreciation for her contribution to the company during the last
4 years.  Ms. Murphy felt that given the recent successful
completion of the previously announced sale of the third party
administration business in the United States and refinancing of
Lindsey Morden's short-term indebtedness, the timing of her
resignation was appropriate.  We wish her success in her future
endeavors.  We also feel fortunate that Mr. Christiansen is
available to lead Lindsey Morden.  His experience in global
markets and the service industry is an excellent fit for us."

Lindsey Morden Group Inc. (S&P, B Credit Rating/Negative Outlook)
is a holding company, which, through its subsidiaries, provides a
wide range of independent insurance claims services, including
claims adjusting, appraisal and claims and risk management
services.  It has a worldwide network of branches in Canada, the
United States, the United Kingdom, continental Europe, the Far
East, Latin America and the Middle East.  Lindsey Morden also
provides claims adjusting and appraisal training courses in the
United States through Vale National Training Centers, Inc.



MICROFINANCIAL INC: Senior Credit Facility Cut to $16.6 Million
---------------------------------------------------------------
MicroFinancial Incorporated (NYSE-MFI) continues to reduce its
outstanding debt obligations in excess of the amounts required by
the Company's long-term bank agreement.

As of August 2, 2004, the senior credit facility has been reduced
to $16.6 million, as compared to an expected $19.5 million for the
same period, as stated in the bank agreement. In addition, all of
the company's securitized debt obligations have been paid in full.

Richard Latour, President and Chief Executive Officer stated, "I
am pleased that we continue to surpass our required repayments and
other financial expectations of our bank agreement. Year to date
through August 2, 2004, we have reduced our total interest bearing
debt by approximately $42.0 million."

The Company continues to seek various financing, restructuring and
strategic alternatives that will enable it to strengthen its
position in the leasing market.

                    About Microfinancial

MicroFinancial Inc. (NYSE: MFI), headquartered in Woburn, MA, is
a financial intermediary specializing in leasing and financing
for products in the $500 to $10,000 range. The company has been
in operation since 1986.

                      Company Liquidity

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

"MicroFinancial incurred net losses of $22.1 million and $15.7
million for the years ended December 31, 2002 and 2003,
respectively. The net losses incurred by the Company during the
third and fourth quarters of 2002 caused the Company to be in
default of certain debt covenants in its credit facility and
securitization agreements. In addition, as of September 30, 2002,
the Company's credit facility failed to renew and consequently,
the Company was forced to suspend new origination activity as of
October 11, 2002. On April 14, 2003, the Company entered into a
long-term agreement with its lenders. This long-term agreement
waives the covenant defaults as of December 31, 2002, and in
consideration for this waiver, requires the outstanding balance
of the loan to be repaid over a term of 22 months beginning in
April 2003 at an interest rate of prime plus 2.0%. The Company
received a waiver, which was set to expire on April 15, 2003, for
the covenant violations in connection with the securitization
agreement. Subsequently, the Company received a permanent waiver
of the covenant defaults and the securitization agreement was
amended so that going forward, the covenants are the same as
those contained in the long-term agreement entered into on
April 14, 2003, for the senior credit facility. To date, the
Company has fulfilled all of its debt obligations, as agreed to by
the bank group, in a timely manner.

"MicroFinancial has taken certain steps in an effort to improve
its financial position. Management continues to actively consider
various financing, restructuring and strategic alternatives as
well as continuing to work closely with the Company's lenders to
ensure continued compliance with the terms of the long term
agreement. In addition, Management has taken steps to reduce
overhead and align its infrastructure with current business
conditions, including a reduction in headcount from 380 at
December 31, 2001 to 136 at December 31, 2003. The failure or
inability of MicroFinancial to successfully carry out these plans
could ultimately have a material adverse effect on the Company's
financial position and its ability to meet its obligations when
due. The consolidated financial statements do not include any
adjustments that might result from the outcome of this
uncertainty."


MIRANT: U.S. Trustee Amends Equity Security Holders' Committee
----------------------------------------------------------------
Pursuant to Section 1102(a) of the Bankruptcy Code, the U.S.
Trustee for Region 17, William T. Neary, informs the United States
Bankruptcy Court for the Northern District of Texas that Phaeton
International/Phoenix Partners is no longer a member of the
Official Committee of Equity Security Holders appointed Mirant
Corporation and its debtor-affiliates' chapter 11 cases.  As of
July 26, 2004, the Equity Committee is composed of:

    (1) Morris Weiss, Chairman
        Tejas Securities Group, Inc.
        112 E. Pecan, Suite 1510
        San Antonio, Texas 78205
        Tel: (210) 226-1555
        Fax: (210) 226-7571
        mdweiss@tejassec.com

    (2) Roger B. Smith
        301 Kemp Road
        Suwanee, GA 30024-1607
        Tel: (700) 418-1818
        Fax: (404) 842-4523
        rbsmith@bear.com

    (3) Andres Forero
        705 E. 43rd Street
        Austin, TX 78751
        Tel: (512) 380-7057
        Fax: (512) 380-7057
        aforero@mail.utexas.edu

    (4) Michael Willingham
        9202 Meaux Drive
        Houston, TX 77031
        Tel: (713) 270-8740
        Fax: (866) 876-5362
        mwillingham1@yahoo.com

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)


MORGAN STANLEY: Fitch Retains Junk Ratings & Affirms Low-B Classes
------------------------------------------------------------------
Fitch Ratings affirms Morgan Stanley Capital I Inc.'s commercial
mortgage pass-through certificates, series 1998-WF2, as follows:

   --$57.1 million class A-1 at 'AAA';
   --$564.9 million class A-2 at 'AAA';
   --$53.1 million class B at 'AAA';
   --Interest-only class X at 'AAA';
   --$47.8 million class C at 'AA';
   --$53.1 million class D at 'A';
   --$21.2 million class E at 'A-';
   --$21.2 million class F at 'BBB+';
   --$23.9 million class G at 'BBB-';
   --$10.6 million class H at 'BB';
   --$8.0 million class J at 'BB-';
   --$8.0 million class K at 'B+';
   --$15.9 million class L at 'B-';
   --$5.3 million class M remains 'CCC'.

Fitch does not rate the $8 million class N.

As of the July 2004 distribution date, the pool's aggregate
balance has been reduced by 15.4% to $898.1 million from $1.06
billion at closing.

Wells Fargo, the master servicer, collected year-end (YE) 2003
financial statements for 88% of the properties by balance. Based
on the information provided, the YE 2003 weighted average debt
service coverage ratio (DSCR) for the pool is 1.73 times (x),
which has increased from 1.56x at issuance.

One loan (1.2%) is currently in special servicing. The loan is
secured by a full-service hotel located in San Francisco, CA and
is 90-plus days delinquent. The loan transferred to the special
servicer at maturity when the borrower could not obtain financing.
The property has since suffered appraisal reductions totaling
$6.25 million as of the current remittance date. With the loan's
exposure to the trust over $11.4 million and a current appraisal
value of $5.8 million, Fitch expects a significant loss at the
time the property is liquidated. Fitch expects that the unrated
class will absorb the losses.


MORGAN STANLEY: S&P Affirms Junk Ratings on Mortgage-Backed Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on class C of
Morgan Stanley Capital I Inc.'s commercial mortgage pass-through
certificates from series 1998-WF2. Concurrently, the ratings are
affirmed on 13 other classes from the same transaction.

The raised and affirmed ratings reflect credit enhancement levels
that provide adequate support through various stress scenarios, as
well as the stable performance of the seasoned pool.

As of the July 15, 2004 remittance report, the collateral pool
consisted of 202 loans with an aggregate principal balance of
$898.1 million, down from 219 loans totaling $1,062 million at
issuance. The master and special servicer, Wells Fargo Bank N.A.
(Wells Fargo), provided Dec. 31, 2003 net operating income (NOI)
debt service coverage (DSC) figures for 95% of the pool. Based on
this information, Standard & Poor's calculated a weighted-average
DSC of 1.71x, up from 1.55x at issuance. To date, the trust has
experienced no losses and two loans ($6.8 million, 1%) were
defeased. All of the loans in the pool are current, with the
exception of one loan ($10.7 million, 1%), which is a
nonperforming matured loan.

The top 10 loans have an aggregate outstanding balance of $273.6
million (30%). The weighted average DSC for the top 10 loans
increased to 1.55x, up slightly from 1.50x at issuance. The
improved DSC occurred despite the decline in performance of the
ninth-largest loan, which is on Wells Fargo's watchlist. Standard
& Poor's reviewed property inspections for all of the assets
underlying the top 10 loans, and all were characterized as "good."

According to Wells Fargo, there is only one specially serviced
loan, the aforementioned nonperforming matured loan. A 177-room,
boutique hotel in San Francisco, Calif. is collateral for the
loan, which did not pay off at maturity in April 2003. The
borrower continued to make loan payments while trying to sell the
property until September 2003, at which time no further payments
were made. Wells Fargo is currently negotiating a note sale, which
would yield a loss less than the appraisal reduction amount of
$6.3 million would indicate.

Wells Fargo's watchlist consists of 18 loans with an aggregate
outstanding balance of $76.1 million (8%). Five loans are secured
by lodging assets with a total balance of $37.4 million (49% of
the watchlist). The Catamaran Resort Hotel in San Diego, Calif. is
the ninth-largest loan in the pool with a scheduled balance of
$18.8 million (2%). The DSCs for the loan over the past three
years were 0.84x, 0.97x, and 1.01x, respectively. The four other
lodging assets also suffer from low DSCs due to the weak
performance of the lodging industry. The 13 remaining non-lodging
loans ($38.8 million, 4%) have an average balance of $3 million
and appear on the watchlist primarily due to low vacancy and
DSCs.

The trust collateral is located across 32 states and only
California (35%) accounts for more than 10% of the pool balance.
After removing collateral for defeased loans, property
concentrations greater than 10% of the pool balance are found in
retail (29%), multifamily (25%), office (17%), and lodging (12%),
with industrial, self-storage, and manufactured housing collateral
comprising the remaining property types.

Standard & Poor's stressed various loans with credit issues as
part of its pool analysis. The resultant credit enhancement levels
support the raised and affirmed ratings.

                            Rating Raised

                     Morgan Stanley Capital I Inc.
         Commercial mortgage pass-thru certs series 1998-WF2

                         Rating
               Class   To      From     Credit Enhancement
               -----   --      ----     ------------------
               C       AA+     AA                   19.51%

                           Ratings Affirmed

                     Morgan Stanley Capital I Inc.
         Commercial mortgage pass-thru certs series 1998-WF2

               Class   Rating   Credit Enhancement
               -----   ------   ------------------
               A-1     AAA                  30.74%
               A-2     AAA                  30.74%
               B       AAA                  24.83%
               D       A+                   13.60%
               E       A-                   11.23%
               F       BBB+                  8.87%
               G       BBB-                  6.21%
               H       BB                    5.03%
               J       BB-                   4.14%
               K       B+                    3.25%
               L       B-                    1.48%
               M       CCC                   0.89%
               X       AAA                    N/A

               N/A -- Not applicable


MRO ACQUISITION: Moody's Assigns Low-B Ratings to Loan Facilities
-----------------------------------------------------------------
Moody's Investors Service has assigned a B1 rating to the proposed
senior secured first lien credit facilities, and a B2 rating to
the proposed second lien credit facility of MRO Acquisition
Corporation, a wholly owned subsidiary of Piedmont Hawthorne
Holdings, Inc.  Proceeds from the proposed offering will be used
for two purposes:

     1) to fund the recapitalization of Piedmont whereby Carlyle
        Partners III will purchase 100% of the Piedmont common
        stock held by Carlyle Partners II for $182.5 million, and
        repay existing Piedmont credit facilities, and

     2) to finance the acquisition of Garrett Aviation Services
        from GE Engine Services for a purchase price of
        $159 million.

Specifically, Moody's assigned the following ratings:

     -- B1 to the company's proposed $207 million senior secured
        first lien credit facilities, consisting of a $60 million
        revolving credit facility due 2009 and a $147 million term
        loan due 2010;

    -- B2 to the company's proposed $80 million senior secured
       second lien term loan due 2011;

    -- Senior implied rating of B1; and

    -- Issuer rating of B3.

The rating outlook is stable.

The ratings reflect the leading market positions that the new
company will have in several segments of the aircraft services
market as a provider of fixed based operations (FBO), maintenance
repair and overhaul services (MRO), aircraft interior completions
and modifications, and aircraft sales and trading. The company's
core FBO and MRO businesses provide the primary support for the
ratings and should continue to experience growth as the private
aviation sector recovers from several years of weakness. While the
company's MRO operations do have a degree of concentration risk
related to particular aircraft engine platforms, these engines
remain in active service on a large portion of the worldwide
business jet fleet and the company also benefits from certain
contractual service arrangements that should support revenue. The
ratings also consider that MRO Acquisition will have a high level
of financial leverage as a result of the recapitalization of
Piedmont and the acquisition of Garrett. Nevertheless, the
company's favorable operating margins and cash flow generation
should support debt service metrics and facilitate debt reduction.

The stable rating outlook reflects Moody's expectation that the
company will be able to continue the strong revenue growth
experienced during the first half of 2004 while maintaining
margins, in line with what Moody's perceives to be a modestly
recovering business jet sector. The outlook may be subject to
upward revision if the company demonstrates the ability
to further improve margins as it grows, and is able to generate
sufficient free cash flow to reduce debt and sustain its
debt/EBITDA below 4.0x. Conversely, ratings may be negatively
impacted if profitability and free cash flow generation were to
suffer due to unexpected difficulties in the civil aviation
markets, or if leverage and other financial metrics were to weaken
due to acquisitions or adverse developments in the company's
aircraft trading activities.

Upon close of the proposed transactions, MRO Acquisition Corp.
will be highly levered. Total pro forma debt of $247 million
(excluding about $16 million of non-recourse debt relating to the
company's revolving aircraft financing facility) represents about
4.9x pro forma LTM EBITDA for the combined entity, and over 5x
leverage if operating leases and non-recourse obligations are
considered, which is high for this rating category. However, with
strong revenue growth during 2004, EBIT margins are expected to
remain above 5%, and interest coverage should remain relatively
strong. For the proforma LTM ending March 2004 EBIT interest
coverage was about 2.2x. Moody's also expects that the company's
free cash flow generation will be sufficient to repay debt over
the near term and lower debt/EBITDA to the 4.0-4.5x range.
However, Moody's notes that a portion of this cash generation is
contingent upon liquidation of a substantial amount of aircraft
inventory held for sale, rather than from core MRO and FBO
operations. Without proceeds from such sales, Moody's estimates
that the company's 2004 free cash flow would be less than 10%
of total debt.

Moody's notes positively the strong market positions in the MRO
markets that Garrett will contribute to the combined entity.
Garrett is the leading service provider on the Honeywell TFE731
engine, performing more than 50% of all maintenance done on this
platform, which is installed on about one-third of all business
jets worldwide. The company is the only MRO service provider
authorized to perform all major forms of service on the TFE731
engine in one location, and has similar authorization to work
on the older but widely-utilized TPE331 platform, as well as a
number of other engines in the business jet market. While Moody's
recognizes the benefits that these contracts offer to protect the
company's MRO position, this also suggests that the company is
somewhat concentrated in the TFE731 and TPE331 engine platforms,
implying that Garrett would be especially vulnerable to
aftermarket requirements for those particular engines.

Piedmont enjoys market leadership in the more-fragmented Airport
Services, or FBO market, its Southeastern U.S.-focused operations
having a number two market share in the country. The company is
the sole provider of FBO services in 18 of its 32 airport
locations in the U.S. and Canada. The largest component of revenue
generated by the FBO business is from fuel sales (69% of total
Piedmont sales, LTM March 2004), with sales volume directly
related to customer flight activity and margins that are
relatively stable due to the company's ability to pass-through
fluctuations in fuel prices. The company has a long term contract
with Eastern Aviation Fuels (Shell aviation fuel distributor in
the U.S.) ensuring stable fuel supply. Piedmont is also involved
in business jet and turboprop aircraft sales. The company is the
largest independent distributor of Raytheon aircraft in the world,
and is also engaged in sales of new and used aircraft built by
other manufacturers.  Although this trading activity represents
only a small portion of Piedmont's business (LTM March 2004 sales
of about $37 million), and is funded by a separate non-recourse
credit facility Moody's is cautious about the potential risks
associated with aircraft trading.

The B1 rating assigned to the first lien credit facilities, the
same as the senior implied rating, reflects the predominance of
these facilities among all of the company's committed debt, and
their seniority in claim on essentially all of the company's
assets, except for aircraft associated with the $25 million non-
recourse aircraft financing facility.  The B2 rating assigned to
the second lien notes reflect their junior claim status to the
first lien notes on the same asset base. In addition, with pro
forma assets of $462 million, only about $70 million represents
fixed assets, while about $160 million represents intangibles.
Accounts receivable and inventories represent about $89 million
and $57 million, respectively. This implies only modest coverage
against about $207 million in first lien debt, and weaker coverage
to the second lien facility. Moody's believes that in a distressed
sale scenario, the company's asset base may not be sufficient to
cover senior debt outstanding. Both the first and second lien
facilities are guaranteed by all of the company's subsidiaries, as
well as by the parent company, Piedmont Holdings.

Piedmont, headquartered in Winston-Salem, North Carolina, is the
second largest general aviation facility operator in North America
with a network of 32 fixed base operations, offering services such
as aircraft refueling, hangar rental, aircraft maintenance and
charter services. In addition, Piedmont is a leading provider of
interior completions and modifications of corporate, high net-
worth individual and head-of-state air transport category
aircraft, and also sells new and used general aviation aircraft.
For the LTM period ended March 31, 2004, Piedmont generated
revenues of $260.0 million.

Garrett Aviation Services, headquartered in Tempe, Arizona, is a
leading provider of gas turbine engine and airframe maintenance,
repair and overhaul services, avionics system installations,
engine retrofits, and interior modifications for business jet
owners and operators. For the LTM period ended March 31, 2004,
Garrett generated revenues of $384.8 million.


NATIONAL CENTURY: JPMorgan Chase Bills $975,062 for Services
------------------------------------------------------------
William C. Wilkinson, Esq., at Thompson Hine, in Columbus, Ohio,
relates that pursuant to certain Court orders relating to the use
of the cash collateral of National Century Financial Enterprises,
Inc. and its debtor-affiliates and subsidiaries in which JPMorgan
Chase Bank had an interest, JPMorgan previously has been
compensated for fees and expenses it incurred in connection with
the bankruptcy case through January 15, 2003.

Accordingly, JPMorgan, former Indenture Trustee for Debtor NPF
VI, Inc., asks United States Bankruptcy Court for the District of
Ohio to authorize the payment of compensation for services
rendered and reimbursement of expenses incurred in the Debtors'
cases during the period from January 16, 2003 through April 30,
2004, totaling $975,062.

Since the Petition Date, Mr. Wilkinson reports, JPMorgan has been
an active participant in the Debtors' bankruptcy case, working
side-by-side with the Debtors to protect and preserve the Debtors'
limited assets against the Providers' numerous continuous attempts
to erode the assets.  The Providers' relentless attacks against
the Debtors' assets came in multiple forms and were made in
multiple forums, but generally consisted of efforts to:

   (1) divert and obtain control of assets -- the accounts
       receivable -- of the bankruptcy estates;

   (2) use other bankruptcy courts to effectuate improper
       control over assets of the bankruptcy estate; and

   (3) improperly recharacterize the nature of the transactions
       between the Debtors and the Providers in a way as to
       further erode the estates' ownership interest in the
       Debtors' accounts receivable.

Most of the Providers' actions against the Debtors' assets were
initiated in the early stages of the bankruptcy case, at a time
when the Subcommittees had not yet been formed or were ill-
equipped to defend against these attacks.  At that time as well,
the Creditors Committee's stated role in the bankruptcy cases
related to matters other than the Provider issues.  As a result,
JPMorgan and its counsel led the fight, often joined by, and in
collaboration with, the Debtors, against the Providers to protect
and preserve millions of dollars worth of assets of the bankruptcy
estate.

JPMorgan identified four different categories of activities, all
relating to various Provider litigation matters, where it has made
substantial contribution to the preservation and recovery of
assets of the Debtors' bankruptcy estate:

   (1) Amedisys Litigation

       JPMorgan defended and thwarted litigation brought by the
       Amedisys Entities against, among others, the Debtors and
       JPMorgan, both in the United States District Court for the
       Southern District of Ohio and ultimately referred to the
       Ohio Bankruptcy Court and in the United States District
       Court for the Middle District of Louisiana, relating to
       the ultimately unsuccessful efforts of Amedisys to obtain
       control over approximately $7.3 million in estate funds.

   (2) The Provider Stay Relief Proceedings

       JPMorgan defended and thwarted litigation brought by and
       against other Providers, including various appeals in
       connection with the litigation, relating to attempts by
       the Providers to seize control over certain assets of the
       Debtors' bankruptcy estate.

   (3) The Anti-diversion Proceedings

       In conjunction with the Debtors' contempt proceedings
       against the Providers, JPMorgan filed proceedings against
       the Providers, in the form of contempt actions.

   (4) The True Sale Proceedings

       With the Debtors, JPMorgan defended against the Providers'
       attempts to recharacterize the nature of the true
       contractual relationship between the Debtors and the
       Providers.

Headquartered in Dublin, Ohio, National Century Financial
Enterprises, Inc. -- http://www.ncfe.com/-- is the market leader
in healthcare finance focused on providing medical accounts
receivable financing to middle market healthcare providers.  The
Company filed for Chapter 11 protection on November 18, 2002
(Bankr. D. Ohio Case No. 02-65235).  Paul E. Harner, Esq., Jones,
Day, Reavis & Pogue represents the Debtors in their restructuring
efforts. (National Century Bankruptcy News, Issue No. 44;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


NEW WEATHERVANE: Panel Wants to Hire BDO Seidman as Accountants
---------------------------------------------------------------
The Official Unsecured Creditors Committee in New Weathervane
Retail Corp., and its debtor-affiliates' chapter 11 cases,
asks the U.S. Bankruptcy Court for the District of Delaware to
approve its application to hire BDO Seidman, LLP, as its
accountants, nunc pro tunc to June 14, 2004.

The Committee expected BDO Seidman to:

   a. analyze the financial operations of the Debtors pre-and
      postpetition, as the Committee deems consider necessary;

   b. analyze the Debtors' real property interests, including
      lease assumptions and rejections and potential real
      property asset sales;

   c. perform claims analysis for the Committee, including
      analysis of reclamation claims;

   d. verify the physical inventory of merchandise, supplies,
      equipment and other material assets and liabilities, as
      necessary;

   e. assist the Committee in its review of monthly statements
      of operations to be submitted by the Debtors;

   f. assist the Committee in its evaluation of cash flow,
      budgets, and/or other projections prepared by the Debtors;

   g. scrutinize cash disbursements on an ongoing basis for the
      period subsequent to the Petition Date;

   h. analyze transactions with insiders, related and/or
      affiliated companies;

   i. analyze transactions with the Debtors' financing
      institutions or equity investors;

   j. assist the Committee in its review of the financial
      aspects of plan of liquidation, or in arriving at a
      proposed liquidation plan;

   k. attend meetings of creditors and conference with
      representatives of the creditor groups and their counsel;

   l. prepare a hypothetical orderly liquidation analysis; and

   m. perform any other services as the Committee or the
      Committee's counsel may request from time to time with
      respect to the financial, business and economic issues
      that may arise.

Jerry D'Amato leads the engagement and reports that BDO Seidman
professionals' current hourly rates are:

      Designation           Billing Rate
      -----------           ------------
      Partners              $335 to $675 per hour
      Senior Managers       $230 to $510 per hour
      Managers              $210 to $345 per hour
      Seniors               $150 to $255 per hour
      Staff                 $95 to $195 per hour

Headquartered in New Britain, Connecticut, New Weathervane Retail
Corporation -- http://www.wvane.com/-- is a Women's specialty
retailer.  The Company filed for chapter 11 protection on June 3,
2004 (Bankr. Del. Case No. 04-11649).  William R. Firth, III,
Esq., at Pepper Hamilton LLP, represents the Debtors in their
restructuring efforts.  When the Company filed for protection from
their creditors, they listed $28,710,000 in total assets and
$24,576,000 in total debts.


NEXPAK CORP: U.S. Trustee Appoints 5-Member Creditors' Committee
----------------------------------------------------------------
The United States Trustee for Region 9 appointed five creditors to
serve on an Official Committee of Unsecured Creditors in Nexpak
Corp.'s Chapter 11 cases:

      1. Chevron Phillips Chemical Co. LP
         c/o Larry Albritton
         10001 Six Pines Drive
         The Woodlands, Texas 77380
         Phone: (832) 813-4370
         Fax: (832) 813-4525

      2. BP Amoco Chemical Co.
         c/o Jeffrey C. Barno
         150 W. Warrenville Road (600-2021A)
         Naperville, Illinois 60563
         Phone: (630) 961-7675
         Fax: (630) 961-7948

      3. Atofina Petrochemicals, Inc.
         c/o Mark Hulings
         15710 JFK Blvd.
         Houston, Texas 77032
         Phone: (281) 227-5755
         Fax: (281) 227-5759

      4. Superb Industries
         c/o John Miller
         330 Third Street NW
         Sugarcreek, Ohio 44681
         Phone: (330) 852-0500
         Fax: (330) 852-9908

      5. Vail Industries/Massillon Container
         c/o Robert F. Vail Jr.
         49 Ohio Street
         Navarre, Ohio 44662
         Phone: (330) 879-5653
         Fax: (330) 879-2772

Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.

Headquartered in Uniontown, Ohio, NexPak Corporation --
http://www.nexpak.com/-- is the market leader in manufacturing
and supply of standard and custom packaging for DVD, CD, video,
audio, and professional media formats. The Company, together with
five of its affiliates filed for chapter 11 protection on July 18,
2004 (Bankr. N.D. Ohio Case No. 04-63816). Ryan Routh, Esq., and
Shana F. Klein, Esq., at Jones Day represent the Debtors in their
restructuring efforts.  On March 30, 2004, the Debtors listed
assets of $101 million and debts of $209 million.


NOVEON INC: Fitch Withdraws BB- Senior Debt Ratings
---------------------------------------------------
Fitch Ratings has withdrawn its ratings on Noveon, Inc.'s senior
secured debt and senior subordinated debt. Noveon's senior secured
credit facility was rated 'BB-'; the senior subordinated notes
were rated 'B'. Lubrizol Corporation acquired Noveon
International, Inc., Noveon's parent, in June 2004 and
subsequently called Noveon's 11% senior subordinated notes.
Lubrizol combined Noveon's businesses with its existing specialty
chemicals businesses to form a new operating segment called
Noveon.


OWENS CORNING: Debtors & Asbestos Committees Back Wolin's Advisors
-----------------------------------------------------------------
Michael Pope, an unsecured creditor with unliquidated asbestos
personal injury claims against Owens Corning and its debtor-
affiliates and subsidiaries as well as against Armstrong World
Industries, Inc., USG Corporation, and Federal-Mogul Global, Inc.,
asks the Court to disqualify and terminate the appointment of
Judson Hamlin, David Gross and Francis McGovern, and require them
to disgorge the fees they received serving as advisors to former
Judge Alfred Wolin.

                             Objections

A.  The Owens Corning Debtors and Asbestos Claimants Committee

    The Debtors argue that the Disqualification Motion is moot
    because Messrs. C. Judson Hamlin and David Gross have no
    ongoing assignment in the Debtors' cases and Professor
    Francis McGovern has resigned as mediator.  In addition,
    there is no legal basis to seek the disgorgement of fees from
    the Advisors.  Thus, the Debtors ask the Court to dismiss the
    Disqualification Motion.

    The Asbestos Claimants Committee supports the Debtors'
    objection.

B.  Judson Hamlin

    Mr. Hamlin points out that Mr. Pope demonstrated no grounds
    for the extraordinary protection requested.  The request for
    disqualification and termination of Mr. Hamlin's appointment
    as an advisor is moot and the request to order the
    disgorgement of fees is baseless.

    Thus, Mr. Hamlin asks the Court to deny the Disqualification
    Motion, and award him an administrative claim for his fees and
    expenses incurred in responding to the Motion.

C.  David Gross

    According to Mr. Gross, the Disqualification Motion "is an
    obvious attempt to bootstrap the recusal of Judge Wolin into
    evidence of some wrongdoing by [him] that is deserving of the
    harshest sanction, disgorgement of [his] hard-earned fees."
    Besides the "structural" or technical conflict, Mr. Gross
    asserts that no wrongdoing of any kind was found to be
    committed by him.

    To the contrary, L. Jason Cornell, Esq., at Fox Rothschild,
    LLP, in Wilmington, Delaware, tells the Court that Judge Wolin
    found that Mr. Gross and the other advisors had served the
    Court ably and well, and the Third Circuit did not disagree.
    Nonetheless, citing standards not even applicable to the
    Advisors, Mr. Pope seeks the ultimate sanction against Mr.
    Gross based entirely on the technical conflict found by a
    two-one majority of the Third Circuit.

    "Factually, legally, procedurally and substantively, [Mr.
    Pope's] application must fail," Mr. Cornell asserts.

    Mr. Cornell argues that disgorgement of the fees paid to Mr.
    Gross for the substantial services provided to the Court,
    which benefited the estates and creditors in the five Asbestos
    Cases, is simply not warranted.  "No public policy goal would
    be achieved, and no actual harm ameliorated.  Instead,
    disgorgement would serve as punishment for a violation that
    never occurred.  [Mr.] Gross did not have the benefit of 20/20
    hindsight then, and he should not be punished through the lens
    of hindsight now, for disclosures he did not fail to make and
    wrongdoing he did not commit," Mr. Cornell says.

           U.S. Trustee & Kensington, et al., Back Pope

A. The U.S. Trustee

    Roberta A. DeAngelis, the Acting United States Trustee for
    Region 3, believes that terminating the Consultants'
    engagement is appropriate.

    With respect to the issue of whether the Consultants should be
    required to disgorge fees, it is not clear whether the
    Consultants have yet submitted to the Court all of their
    requests for compensation.  The U.S. Trustee believes that the
    Court should resolve the matter by:

       -- fixing a deadline for the Consultants to file final fee
          applications;

       -- fixing appropriate deadlines for filing objections to
          those applications and conducting any necessary
          discovery; and

       -- setting an evidentiary hearing on the question of what
          fees, if any, should be awarded the Consultants, and
          thus the amount of any disgorgement that may be
          appropriate.

B. Kensington, et al.

    Kensington International Limited and Springfield Associates,
    LLC, and Angelo, Gordon & Co, on behalf of certain managed
    funds and accounts, do not oppose the termination of the
    Conflicted Advisors' services.

    The Creditors contend that:

       (a) the issue whether the Conflicted Advisors should
           disgorge the fees they have received is premature at
           this time, and should first be investigated by an
           independent examiner: and

       (b) all issues relating to the Conflicted Advisors' fees
           must be heard in the District Court, rather than the
           Bankruptcy Court, since the District Court already has
           withdrawn the reference with respect to the Conflicted
           Advisors' fees.

            No More Investigation, Pope Tells Kensington

Michael Pope objects to Kensington's proposal that the issue of
disgorgement should be stayed pending investigation by an
examiner.  "Because the issues of disgorgement and
disqualification are closely related, there is no reason to delay
proceedings on the former.  Moreover, the issues are best
developed by the adversarial process of discovery and a hearing,
not investigation by an examiner," Mr. Pope asserts.

                    Pope Presents More Arguments

Mr. Pope relates that the fee auditor does not have jurisdiction
to determine the question of the disgorgement of the Consultants'
fees.  The power to adjudicate the extent and nature of the
remedies for the conflicts observed by the Third Circuit lies with
the District Court, the sole tribunal charged with authority to
order disgorgement.  "The role of the Auditor is limited to
testing the fees for reasonableness," Mr. Pope reminds the Court.

                 District Court Withdraws Reference

Pursuant to Section 157 of the Judiciary Procedures Code, Judge
Fullam withdraws the reference to the Bankruptcy Court with
respect to Michael Pope's request to disqualify and terminate the
appointment of Judson Hamlin, David Gross and Francis McGovern as
Consultants in Owens Corning's cases, and to disgorge their fees.

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.
78 and 80 Bankruptcy Creditors' Service, Inc., 215/945-7000)


PACIFIC GAS: Presents Long-Term Energy Resource Plan to Commission
------------------------------------------------------------------
In a regulatory filing with the Securities and Exchange Commission
on July 14, 2004, Pacific Gas and Electric Company Vice President
and Controller Dinyar B. Mistry disclosed that PG&E submitted its
long-term integrated energy resource plan for the period 2005
through 2014 to the California Public Utilities Commission in
compliance with CPUC decisions and orders regarding electric
resource planning.

The LTP sets forth the policy framework, strategies and
implementation steps for meeting customer electricity demand -- or
"load" -- for the next 10 years.  The LTP is consistent with the
Energy Action Plan adopted in 2003 by the CPUC, the Energy
Resources Conservation and Development Commission, and the
Consumer Power and Conservation Financing Authority to ensure that
adequate, reliable, and reasonably priced electrical power and
natural gas is provided in a cost-effective and environmentally
sound manner for California's consumers.  The EAP establishes a
"loading order" of energy resources under which conservation and
energy efficiency programs are first used to minimize increases in
electricity and natural gas demand, next followed by use of
renewable energy resources and distributed generation to meet new
generation needs, followed by support for the development of
additional clean, fossil fuel, central-station generation.

In light of the future uncertainty regarding the extent to which
PG&E's residential and small commercial customers -- core
customers -- and its large commercial and industrial customers --
non-core customers -- can procure electricity from non-utility
load serving entities like local publicly owned electric
utilities, community choice aggregators or energy service
providers, PG&E found it essential that the CPUC establish clearly
articulated electricity reliability standards and cost
responsibilities for all LSEs.

Mr. Mistry relates that despite the uncertainty, PG&E made certain
assumptions regarding the level of retail load that it will serve
in the future to develop the "medium load" scenario on which the
Utility's LTP is based.  The Utility assumed that the current
level of direct access participation would continue throughout the
10-year period.  The Utility also assumed that its customer load
would be further reduced over the 10-year period through:

    (a) a core/non-core program to be implemented through future
        legislation authorizing larger customers to participate in
        direct access on a phased-in basis starting as early as
        2007; and

    (b) robust participation among smaller customers in community
        choice aggregation starting as early as 2006.

PG&E assumed that by 2014, its load and corresponding procurement
responsibility would be reduced by 4,000 megawatts.

To minimize the uncertainties regarding the level of future retail
load, PG&E asked the CPUC to establish five-year resource adequacy
requirements for all LSEs that will ensure that these entities
secure reliable electricity supplies for all of their customers
far enough in advance to avoid a statewide shortage of power.  To
assure recovery of PG&E's costs of new long-term electricity
resource commitments, PG&E asked the CPUC to adopt a non-
bypassable charge to be collected from all customers on whose
behalf the Utility makes these new commitments, including those
who subsequently receive generation from LSEs.

To meet the net open position -- that portion of the demand of
PG&E's customers, plus applicable reserve margins, not satisfied
from the Utility's own generation facilities and existing
electricity contracts -- Mr. Mistry reports that over the 10-year
planning horizon, PG&E proposes:

    * New customer energy efficiency programs to reduce load with
      total potential expenditures of $1 billion over the 10-year
      planning horizon.  To achieve the assumed load reductions,
      the Utility asked the CPUC to approve an incremental revenue
      requirement increase of $245 million for three additional
      years -- from 2006 through 2008 -- of CEE programs based on
      the targets as proposed in the LTP.  The Utility also asked
      the CPUC to approve a CEE incentive mechanism to encourage
      program success in achieving the proposed CEE targets;

    * The development of demand response programs in conjunction
      with the California Independent System Operator that will
      result in certain, predictable load reduction;

    * An increase in the percentage of renewable energy resources
      in the Utility's generation portfolio in accordance with the
      objective adopted in Senate Bill 1078.  The LTP medium load
      scenario assumes that by 2010, 20% of the Utility's retail
      load will be met by a combination of purchases from
      renewable energy providers and the re-powering of existing
      wind projects;

    * Entry into short-term and mid-term power purchase agreements
      over the next four years with existing market resources to
      ensure adequate supply of electricity in the period before
      new generation facilities are assumed to become operational.
      The Utility asked for immediate authority from the CPUC to
      execute short-term and mid term contracts under its existing
      short-term procurement plan; and

    * The development of new utility-owned generation and
      generation to be purchased under long-term contracts
      particularly for the period from 2007 to 2010 when it is
      assumed that there will be a need for additional generation
      facilities.  PG&E's LTP assumes that power plants currently
      providing 2,000 MW of generation to the Utility will retire
      within the next five or six years.  PG&E has asked the CPUC
      approve the solicitation of offers for utility-owned
      generation development and for generation to be provided
      under long-term contracts for 1,200 MW by 2008 and an
      additional 1,000 MW by 2010.  The Utility also proposed
      release drafts of the two requests for offers -- RFOs -- for
      public comment in September 2004 and to issue the RFOs in
      October 2004.  The Utility asked the CPUC to issue an LTP
      decision by the end of 2004 and approve the proposed winning
      bidders from the RFOs no later than June 2005.  PG&E also
      asked the CPUC, at the time the CPUC approves a proposal for
      a new utility-owned generation facility, to authorize a
      reasonable cost for the facility to be placed in rate base.
      If the actual costs of construction are less than or equal
      to the amount placed in rate base, PG&E proposed that the
      costs would not be subject to an after-the-fact
      reasonableness review by the CPUC.  The Utility's target
      over the 10-year planning horizon is to own 50% of the new
      generation resources to be developed with the remaining 50%
      of the resources to be purchased under long-term contracts.

As a condition to PG&E's willingness to make the long-term
commitments, PG&E asked the CPUC to:

    * Extend Assembly Bill 57's trigger mechanism that requires
      the CPUC to adjust procurement rates if PG&E's Energy
      Resource Recovery Account becomes undercollected by more
      than 5% of the previous year's generation revenues.  The
      ERRA is a balancing account designed to track and allow
      recovery of the difference between the Utility's recorded
      procurement revenues and actual costs incurred under the
      Utility's authorized procurement plans, excluding certain
      costs.  As of January 1, 2006, the timing of the rate
      adjustments is left to the discretion of the CPUC.  The
      Utility proposed that, at a minimum, the CPUC extend the
      trigger mechanism for the 10-year planning horizon covered
      by the LTP;

    * Clarify that the CPUC's maximum disallowance of utility
      administrative and dispatch costs applies to both the
      allocated California Department of Water Resources' power
      purchase contracts and administrative and dispatch costs
      related to utility-owned generation and other power purchase
      agreements.  Currently, the maximum disallowance is equal to
      two times a utility's administrative costs of managing
      procurement activities, or, for PG&E, $36 million per year;
      and

    * Adopt a policy that recognizes and addresses the fact that
      credit rating agencies will consider obligations under long-
      term power purchase contracts to have debt-like
      characteristics that will adversely affect the Utility's
      credit ratios which may, in turn, adversely affect the
      resulting credit ratings.  The Utility asked the CPUC to (i)
      evaluate the "debt equivalence" impacts when the Utility and
      the CPUC evaluate the bids for various long-term
      commitments, and (ii) mitigate the resulting debt
      equivalence impacts in subsequent cost of capital
      proceedings through adjustments to the Utility's authorized
      capital structure.  The Utility presented testimony that
      under certain future scenarios, estimated future shortfalls
      in certain minimum financial ratios used by the credit
      rating agencies to support various investment grade ratings
      could be offset by an increase in the Utility's common
      equity ratio, which would increase annual revenue
      requirements.  The Utility noted that its goal was to
      improve the credit ratings over time, as stated in the
      December 19, 2003 settlement agreement the Utility and its
      parent, PG&E Corporation, entered into with the CPUC to
      resolve the Utility's Chapter 11 proceeding.

On July 8, 2004, a CPUC administrative law judge issued a ruling
requesting comments on whether the CPUC should accelerate the
phase-in of its planning reserve requirement to maintain a 15% to
17% reserve margin to June 1, 2006 from January 1, 2008.  The
medium load scenario described in the Utility's LTP does not
assume the accelerated phase-in.  If the accelerated phase-in is
adopted, the Utility's net open position would increase.

Neither PG&E Corp. nor the Utility can predict when or whether the
CPUC will approve the LTP or take any of the actions the Utility
has requested in connection with the LTP, how the uncertainties
discussed will be resolved in the future, or whether the
assumptions on which the LTP is based will prove to be accurate.

                 PG&E Solicits Energy for Consumers

Pacific Gas and Electric Company planned to issue a Request for
Offers (RFO) to solicit renewable energy on behalf of its electric
customers.  This marks the company's first renewable energy
solicitation pursuant to the State of California Renewable
Portfolio Standard (RPS) program.

PG&E has a long history of developing, generating, and purchasing
renewable power.  The Utility currently supplies 13% of its
customer load from renewable resources that qualify under the RPS
Program and another 19% from it's hydroelectric facilities, for a
total of 32% of customer load supplied from renewables -- one of
the highest volumes of any utility in the United States.

PG&E planned to issue its solicitation with the goal of entering
into contracts by the end of the year.  PG&E looks forward to
receiving a broad range of competitive products from prospective
renewable energy suppliers.  Typical sources of renewable energy
include power generated from:

      * solar,
      * wind,
      * small hydroelectric,
      * geothermal,
      * biomass,
      * landfill gas, and
      * various ocean technologies.

Binding bids will be due by August 23.  Interested parties may
obtain bid documents at PG&E's RFO website
http://pge.com/RenewableRFO

California's RPS Program requires each utility to increase its
procurement of eligible renewable generating resources by 1% of
load per year, so PG&E anticipates additional renewable
solicitations in future years as well.  The RPS Program was passed
by the Legislature and is managed by California's Public Utilities
Commission and Energy Commission.

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 and Electric emerged from chapter 11
protection on April 12, 2004, paying all creditors 100 cents-on-
the-dollar plus post-petition interest.  (Pacific Gas Bankruptcy
News, Issue No. 80; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


PEGASUS SATELLITE: Committee Taps Greenhill as Financial Advisor
----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Pegasus
Satellite Communications, Inc. and its debtor-affiliates' chapter
11 cases needs a financial advisor to assist in the critical tasks
associated with analyzing and implementing critical restructuring
alternatives, and to help guide it through the Debtors'
reorganization efforts.  After careful deliberations, the
Committee decided that Greenhill & Co., LLC's broad experience in
investment banking would best serve the interests of the
Committee, its counsel, and the creditors in the Debtors' Chapter
11 cases.  The Committee has carefully tailored the scope and
compensation of Greenhill's retention so that:

    (i) the work performed by Greenhill will not be duplicative of
        the work performed by any other professionals retained by
        the Committee in the Chapter 11 cases; and

   (ii) the Debtors' estates do not incur unnecessary costs as a
        result of the Committee's retention of both Greenhill and
        Capital & Technology Advisors, LLC, as financial advisors.

Accordingly, the Committee sought and obtained permission from the
United States Bankruptcy Court for the District of Maine to retain
Greenhill as its financial advisor, nunc pro tunc to June 14,
2004.

Marion Stratakos, Chairperson of the Creditors' Committee, informs
the Court that the Committee retained Greenhill as its financial
advisor because it has general investment banking and financial
expertise relating to the bankruptcy process and is uniquely able
to provide restructuring financial advisory services to the
Committee.

Greenhill is a nationally recognized investment banking/financial
advisory firm with more than 75 professionals.  Greenhill provides
investment banking and financial advisory services and execution
capabilities in a variety of areas, including financial
restructuring, where Greenhill is one of the leading investment
bankers and advisors to debtors, bondholder groups, secured and
unsecured creditors, acquirors, and other parties-in-interest
involved in financially distressed companies, both in and outside
of bankruptcy.  Greenhill has served as a financial advisor in
some of the largest and most complex Chapter 11 cases in the
United States, including serving as the financial advisor to
numerous debtors and creditors in restructurings involving Loral
Space & Communications, Ltd., Solutia, Inc., Bethlehem Steel
Corporation, AMRESCO, Inc., Regal Cinemas, Inc., and WebLink
Wireless, Inc.  In addition, Greenhill has provided financial
advisory and investment banking services to several
telecommunications and media companies and their creditors,
including Adelphia Communications, Marconi Corporation, Plc,
Allegiance Telecom, Inc., AT&T Canada, Inc., Cable & Wireless Plc,
AT&T Latin America Corp. and RCN Corp.

As financial advisor, Greenhill will:

    (a) to the extent it deems necessary, appropriate and
        feasible, review and provide an analysis of the business,
        operations, properties, financial condition and prospects
        of the Debtors;

    (b) monitor the Debtors' ongoing performance;

    (c) evaluate the Debtors' debt capacity in light of its
        projected cash flows;

    (d) review and provide an analysis of any proposed capital
        structure for the Debtors;

    (e) review and provide an analysis of any valuations of the
        Debtors on a going concern basis and on a liquidation
        basis;

    (f) review and provide an analysis of any proposed public or
        private placement of the debt or equity securities of the
        Debtors, or any loan or other financing;

    (g) review and provide an analysis of any of the Debtors'
        proposed non-ordinary course expenditures during the
        Chapter 11 cases;

    (h) review and provide an analysis of all proposed Chapter 11
        plans proposed by any party;

    (i) in connection therewith, review and provide an analysis of
        any new securities, other consideration or other
        inducements to be offered or issued under the Plan;

    (j) assist the Committee and participate in negotiations with
        the Debtors, potential purchasers of the company and any
        other groups affected by the Plan or a sale;

    (k) assist the Committee in preparing documentation within its
        area of expertise required in connection with supporting
        or opposing the Plan or a sale;

    (l) review and provide an analysis of any proposed disposition
        of any material assets of the Debtors or any offers to
        purchase some or substantially all of the Debtors' assets;

    (m) when and as requested by the Committee, render reports to
        the Committee as Greenhill deems appropriate under the
        circumstances; and

    (n) participate in hearings before the Court with respect to
        the matters on which Greenhill has provided advice.

Greenhill will be compensated with a $150,000 monthly fee.  Upon
the closing or consummation of a Restructuring or Sale, Greenhill
will be entitled to a Transaction Fee equal to:

    * the sum of 125 basis points multiplied by the amount of the
      Unsecured Creditors' Recovery between $400,000,000 and
      $475,000,000 plus 200 basis points multiplied by the amount
      of the Unsecured Creditors' Recovery in excess of
      $475,000,000; less

    * an amount equal to 50% of the Monthly Advisory Fees in
      excess of $1,350,000 received by Greenhill.

Greenhill will seek reimbursement of all reasonable out-of-pocket
expenses.

Bradley A. Robins, Managing Director of Greenhill, tells the Court
that Greenhill is a "disinterested person" as defined in Section
101(14) of the Bankruptcy Code.  According to Mr. Robins,
Greenhill and its affiliates, professionals and employees have no
connection with the Debtors, their creditors or other parties-in-
interests, except that:

      (i) Greenhill Capital Partners Fund, an affiliate of
          Greenhill, raises funds from numerous sources including
          four entities that are affiliates of parties that are
          equity holders in the Debtors, agents to certain of the
          Debtors' prepetition credit facilities or members of the
          syndicate;

     (ii) Barrow Street Capital, LLC, an affiliate of Greenhill,
          raises funds from numerous sources including affiliates
          of GMAC Investment Funds, a major lender to the Debtors;

    (iii) Fleet National Bank, an equity holder in Pegasus
          Satellite Communications, Inc., is the bank provider for
          Greenhill and the private bank for several of
          Greenhill's employees;

     (iv) on May 5, 2004, Greenhill held an initial public
          offering where it used the underwriting services of
          certain parties that are unsecured creditors or equity
          holders of the Debtors, including Wachovia Bank and
          Lehman Brothers, Inc.; and

      (v) certain other parties-in-interest are vendors of
          Greenhill or its affiliates.

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


PILLOWTEX: Revises Bidding Protocol for Hanover, Pa. Property Sale
------------------------------------------------------------------
In connection with the proposed sale of a property consisting of
about 22.5 acres located at 401 Moulstown Road in Hanover,
Pennsylvania, and including a 275,000 square-foot manufacturing
plant, Pillowtex Corporation and its debtor-affiliates and
subsidiaries want to subject the proposed sale to New Horizons
Partnership, LLC, to competitive bidding pursuant to the Global
Bidding Procedures established by the United States Bankruptcy
Court for the District of Delaware in August 2003.

The Debtors ask the Court to approve these supplemental bidding
procedures with regards to the proposed sale of the Hanover
Property:

    (a) The deadline for submission of competing bids for the
        Property is August 27, 2004 at 4:00 p.m., prevailing
        Eastern Time.

    (b) The Initial Overbid Increment for competing bids will be
        $150,000.  Successive bidding increments will be $50,000.

    (c) The Auction will be held on September 2, 2004, at 3:30
        p.m., prevailing Eastern Time at the office of Debevoise
        & Plimpton LLP, 919 Third Avenue, in New York, or at
        another place as the Debtors will notify all qualified
        bidders.  At the Debtors' sole discretion and upon request
        of any qualified bidder, arrangements may be made for
        telephonic participation in the Auction.  If, however, no
        qualified competing bid is received by the Bid Deadline,
        New Horizons will be the successful bidder for the
        Property and the Debtors will seek the Court's approval
        and authority to consummate the transactions contemplated
        in the Purchase Contract with New Horizons.

    (d) In the event that New Horizons is the second highest
        bidder at the conclusion of the Auction and the Debtors
        fail to consummate a sale of the Property to the
        successful bidder, the Debtors will consummate the sale of
        the Property to New Horizons under the terms of the
        Purchase Contract, provided it has not been terminated.

    (e) The hearing to consider the sale of the Property to the
        prevailing bidder will be held on September 3, 2004 at
        10:30 a.m., prevailing Eastern Time or as soon as counsel
        and interested parties may be heard.

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.

The Debtors propose to limit New Horizon's liability to the amount
of the Deposit.  William H. Sudell, Jr., Esq., at Morris Nichols
Arsht & Tunnel, in Wilmington, Delaware, contends that the
limitation is appropriate given New Horizons' concessions in the
negotiations and its willingness to act as a stalking horse at the
Auction.

Judge Walsh schedules an emergency hearing to consider the
Supplemental Bidding Procedures on August 12, 2004 at 1:30 p.m.,
prevailing Eastern Time.

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. (Pillowtex Bankruptcy News, Issue No. 67;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


PPM AMERICA: Fitch Places Junk A-3 Note Rating on Watch Negative
----------------------------------------------------------------
Fitch Ratings places two classes of notes issued by PPM America
High Yield CBO I Company Ltd. on Rating Watch Negative as follows:

   -- $212,323,496 class A-1 notes rated 'AA-';

   -- $55,700,000 class A-3 notes rated 'CCC+'.

PPM High Yield CBO I is a collateralized bond obligation (CBO)
managed by PPM America, Inc. PPM High Yield CBO I closed on March
2, 1999. The notes issued by the PPM High Yield CBO I are
supported by a portfolio primarily consisting of high yield
corporate bonds.

Over the past year the collateral has deteriorated. The
overcollateralization ratio has declined to a level of 65.3% as of
the July 16, 2004 trustee report. The class A and class B interest
coverage ratios have also deteriorated to 128.11% and 70.8%,
respectively, as of the July 16, 2004 trustee report.

The deteriorating credit quality of the portfolio has increased
the credit risk of this transaction to the point the risk may no
longer be consistent with the ratings. Fitch will review this
transaction and take appropriate rating action upon completion of
its analysis. Additional deal information and historical data are
available on the Fitch Ratings web site at
http://www.fitchratings.co/


RAPTOR INVESTMENTS: Structures Program to Continue Debt Reduction
-----------------------------------------------------------------
Raptor Investments, Inc. (RAPT)(OTCBB:RAPT) has reduced debt by
$60,000 over the last two months.  The debt reduction will save
the Company approximately $600 per month in interest expense.

Raptor has structured a program where a certain percentage of the
weekly revenues of J&B Wholesale Produce, Inc., the Company's
wholly owned subsidiary, will go to debt reduction. The debt
reduction is applied to the Company's Line of Credit.

JBP is a 10-year-old wholesale produce distribution company
servicing Broward, Dade and Palm Beach County. JBP services chain
restaurants, single-location restaurants, retailers and other
produce distributors.

                        About the Company

Raptor is a diversified holding company. The Company provides
merchant banking, consulting and public relations services to
privately held and publicly traded companies. As part of its
merchant banking services, the Company will pursue various
diversified acquisitions on a regular basis. It is the Company's
goal to restructure these acquisitions and divest of them, in
whole or in part, through a sale or spin-off.

                         *     *     *

At March 31, 2004, Raptor Investment Inc.'s balance sheet showed
a $1,170,037 stockholders' deficit.


RCN CORP: Subsidiary Files for Chapter 11 Protection in New York
----------------------------------------------------------------
RCN Cable TV of Chicago, Inc., an indirect subsidiary of RCN
Corporation, filed a voluntary petition for reorganization under
chapter 11 of Title 11 of the United States Code in the United
States Bankruptcy Court for the Southern District Court of New
York.

The filing is part of RCN's ongoing efforts to modify its
franchise agreements with the City of Chicago so that it can honor
its commitment of continuing to grow and serve its approximately
100,000 customers in Chicago.  Earlier this week, RCN also
announced the launch of a new telephone service over the Internet
to its Chicago customers.  Chicago is the first of RCN's markets
to launch this product and the first bundled provider to offer
this product in the Chicago area.

"We remain committed to our customers and employees in our Chicago
market.  We are optimistic that the City will help us execute on
our strategy to provide choice and competition for our customers,"
said Tom McKay, Assistant General Manager in Chicago.  "Our entire
team has worked tirelessly for the past year to upgrade our
network and launch new products and services that our customers
are asking for so that we can continue to offer them a better
choice for their telecommunication needs in the City of Chicago."

Over the past 18 months, RCN has invested heavily in its Chicago
market as part of its commitment to its current and growing
customer base.  RCN is in the process of completing the upgrade of
its entire network to its approximately 300,000-household
footprint that will be completed by October of this year. Recent
product launches include a 7 Mbps cable modem product, voice
service over the Internet, video on demand services, high-
definition television service, and multiple bundle packages
including its Digital City channel lineup and advanced channel
guide.

RCN previously reported that its senior secured lenders and
members of an ad hoc committee of holders of its Senior Notes had
agreed to support a financial restructuring.  The Company
anticipates filing a plan of reorganization and related disclosure
statement consistent with the financial restructuring, prior to
the end of August 2004.  The Company expects to consummate its
restructuring process during the fourth quarter of 2004.

RCN anticipates no disruption of service to its customers as a
result of this filing.

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 CABLE TV: Case Summary & 11 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: RCN Cable TV of Chicago, Inc.
        350 North Orleans Street
        Chicago, Illinois 60654

Bankruptcy Case No.: 04-15120

Type of Business: The Debtor is a subsidiary of RCN Corporation,
                  a provider of bundled Telecommunications
                  services.  See http://www.rcn.com/

Chapter 11 Petition Date: August 5, 2004

Court: Southern District of New York (Manhattan)

Judge: Robert D. Drain

Debtor's Counsel: Jay M. Goffman, Esq.
                  Skadden, Arps, Slate, Meagher & Flom LLP
                  Four Time Square
                  New York, NY 10036
                  Tel: 212-735-3000
                  Fax: 212-735-2000

Estimated Assets: $0 to $50,000

Estimated Debts:  $100,000 to $500,000

Debtor's 11 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
City of Chicago               Franchise Agreement       $163,000

Chicago Access Corporation    Contract                  $127,806
(Area 2)

City of Chicago               Franchise Agreement         $6,000

Taylor Place Apartments       Trade                         $600

Town Management Corp.         Trade                         $500

The 5000 South Cornell        Trade                         $500
Condominium Association

Carl Sandburg Village         Trade                         $393
Condominium Association II

828 S. Wabash, LLC            Trade                         $348

The Chestnut Place            Trade                         $300
Associates

The 535 North Michigan        Trade                         $115
Avenue

The Drexel Towers Apartments  Trade                         $100


RCN: Gets Final Okay to Hire AP Services as Crisis Managers
-----------------------------------------------------------
On a final basis, the United States Bankruptcy Court for the
Southern District of New York authorizes RCN Corporation and its
debtor-affiliates to employ AP Services, LLC, as their crisis
managers, effective as of May 26, 2004.

Judge Drain's final order approving the engagement provides that:

   (a) All references to the "Contingent Success Fee" in the
       engagement letter and the Debtors' Application is deemed
       stricken without prejudice to APS' right to request for a
       success or similar fee.

   (b) APS' compensation will be subject to applicable provisions
       of the Bankruptcy Code, the Bankruptcy Rules, the Local
       Bankruptcy Rules for the Southern District of New York,
       guidelines established by the Court, the United States
       Trustee Fee Guidelines, and these provisions, except that
       APS will not be required to file time records in
       accordance with the U.S. Trustee Guidelines.  APS will
       comply with the Administrative Order under Sections 105
       and 331 of the Bankruptcy Code Establishing Procedures for
       Interim Compensation and Reimbursement of Expenses of
       Professionals dated June 22, 2004, provided that in its
       monthly fee statements and interim and final fee
       applications filed with the Court, APS will present
       descriptions of those services provided on the Debtors'
       behalf, the approximate time expended in providing those
       services, and the individuals who provided professional
       services.

   (c) APS will have the right to request a success or similar
       fee in its final fee application after notice to all the
       parties-in-interest and upon hearing before the Court.
       There will be no presumptions created by these provisions
       to either grant or deny the request, and all objections of
       the U.S. Trustee and all parties-in-interest are preserved
       until that time.

   (d) APS will not be entitled to seek or receive a success or
       similar fee to the extent it is terminated for actions
       constituting gross negligence or willful misconduct.

   (e) A success or similar fee, if awarded, will not be deemed
       earned until the occurrence of the substantial
       consummation of a plan or plans of reorganization, as the
       case may be, for each of the Debtors.

   (f) APS will not be entitled to seek or receive a success or
       similar fee in the event:

       -- any entity or entities individually or collectively
          constituting 50% or more of the subscribers of the
          United States businesses of RCN Corporation and its
          direct and indirect subsidiaries will be liquidated,
          other than in a sale or sales as a going concern;

       -- the voluntary Chapter 11 case or cases of any entity or
          entities individually or collectively constituting 50%
          or more of the subscribers of the U.S. businesses of
          RCN Corporation and its direct and indirect
          subsidiaries will be dismissed without the Creditors
          Committee's consent;

       -- a Chapter 11 trustee with plenary powers, a responsible
          officer, or an examiner with enlarged powers relating
          to the operation of the businesses of the Debtors will
          be appointed; or

       -- the Chapter 11 case of any entity or entities
          individually or collectively constituting 50% or more
          of the subscribers of the U.S. businesses of RCN
          Corporation and its direct and indirect subsidiaries
          will be converted to a case or cases under Chapter 7 of
          the Bankruptcy Code.

   (g) All of John Dubel's requests for payment of indemnity
       pursuant to any indemnification agreement provided by the
       Debtors will be made by means of an application and will
       be subject to review by the Court to ensure that the
       payment of the indemnity conforms to the terms of the
       indemnification agreement and is reasonable based on the
       circumstances of the litigation or settlement in respect
       of which the indemnity is sought.  However, in no event
       will Mr. Dubel be indemnified in the case of his own
       bad-faith, self-dealing, breach of fiduciary duty, gross
       negligence or willful misconduct.

   (h) In no event will Mr. Dubel be indemnified if the Debtors
       or a representative of the Debtors' estates, asserts a
       claim for, and a court determines by final order that the
       claim arose out of, Mr. Dubel's own bad-faith, self-
       dealing, breach of fiduciary duty, gross negligence or
       willful misconduct.

   (i) In the event that Mr. Dubel seeks reimbursement for
       attorney's fees from the Debtors pursuant to the
       indemnification agreement, the invoices and supporting
       time records from the attorneys will be included in Mr.
       Dubel's own applications, and the invoices and time
       records will be subject to the U.S. Trustee's guidelines
       for compensation and reimbursement of expenses and the
       Court's approval under the standards of Sections 330 and
       331, without regard to whether the attorney has been
       retained under Section 327 and without regard to whether
       the attorney's services satisfy Section 330(a)(3)(C).

Details concerning RCN's application to employ AP Services appears
in the Troubled Company Reporter on June 14 and 22.

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


RELIANCE: Committees Wants to Ensure Viability of Tax Benefits
--------------------------------------------------------------
The Official Unsecured Bank Committee and the Official Unsecured
Creditors' Committee for Reliance Financial Services Corporation
and Reliance Group Holdings, Inc., ask Judge Gonzalez of the
United States Bankruptcy Court for the Southern District of New
York to declare that RFSC's Tax Benefits remain viable.

Arnold Gulkowitz, Esq., at Orrick, Herrington & Sutcliffe, in New
York City, explains that Section 847 of the Internal Revenue Code
allows a special deduction for insurance companies.  The deduction
is equal to the excess of the undiscounted, unpaid losses over the
discounted, unpaid losses, which is credited to a "special loss
discount account."  The insurer must make a Special Estimated Tax
Payment each year that the deduction is claimed equal to the tax
benefit generated by the deduction, so that no tax benefit is
initially realized by the deduction.  As time passes and losses
are paid, the spread between the insurer's undiscounted, unpaid
losses and the discounted, unpaid losses for a taxable year will
generally decrease.  Each year, the decreases are debited from the
special loss discount account and included in gross income.  The
insurer applies the SETPs from prior taxable years to offset taxes
owed as a result of the income inclusions.  If a special loss
discount account for any tax year has not been reduced to zero
before the 15th year, the remaining balance of the account must be
included in income for that 15th year.  The following year, any
remaining SETPs made for that year are treated as an estimated tax
payment, giving rise to Section 847 Refunds.

The Tax Benefits, in the form of Section 847 Refunds, are one of
RFSC's most significant assets that will inure to the Allowed
Bank Claim holders, RGH and Reliance Insurance Company.  Mr.
Gulkowitz worries that the Internal Revenue Service may attempt to
deny the Tax Benefits to Reorganized RFSC.  If the IRS is
successful, the Tax Benefits utilizable by Reorganized RFSC could
be substantially reduced or eliminated.  To reduce this risk and
to avoid the loss of a financial investment estimated to exceed
$5,000,000 over the next seven years, RFSC's Plan of
Reorganization contemplates that the Court will approve certain
tax determinations.

Specifically, the Committees ask the Court to find that:

   a. After the Effective Date, the RFSC Tax Group -- as a result
      of the inclusion of Reliance Insurance Company in the
      affiliated group of corporations filing a consolidated
      Federal income tax return having Reorganized RFSC as the
      common parent -- will succeed to all special estimated tax
      payments within the meaning of Section 847 of the Tax Code
      made by RGH;

   b. RIC has been, and continues to be, subject to the tax
      imposed by Section 831 of the Tax Code;

   c. The Section 847(6)(A) provision, which applies to a company
      that liquidates or otherwise terminates its insurance
      business, does not apply to RIC due to its ongoing
      insurance activities;

   d. RGH was not required to designate on an originally filed
      tax return any estimated tax payments as "special estimated
      tax payments" under Section 847 of the Tax Code in order
      for the tax payments to be treated as special estimated
      tax payments refundable pursuant to Section 847 of the Tax
      Code;

   e. As a result of the application of Section 382(l)(5) of the
      Tax Code, the net operating loss limitations of Section
      382(a) will not apply to any ownership change resulting
      from the RFSC Plan as confirmed;

   f. The principal purpose of the RFSC Plan, as proposed and
      confirmed, is not the avoidance or evasion of Federal
      income tax within the meaning of Section 269 of the Tax
      Code and the Treasury Regulations; and

   g. At all times subsequent to the Petition Date, RFSC has
      carried on more than an insignificant amount of an active
      trade or business within the meaning of Treasury
      Regulations Section 1.269-3(d).

Granting the Committees' request will:

   -- increase the likelihood that the Section 847 Refunds will
      be recovered; and

   -- help resolve many of the issues that the IRS may raise in
      an attempt to disallow Reorganized RFSC's entitlement to
      the Section 847 Refunds.

Under the RFSC Plan, Holders of the Allowed Bank Claims are being
asked to exchange their claims for stock of Reorganized RFSC.  The
value of the stock, RFSC's estate, and the recovery to the Holders
of the Allowed Bank Claims will be materially and adversely
impacted if Reorganized RFSC is not entitled to the Section 847
Refunds.

RIC anticipates generating income in the tax years following the
confirmation of the RFSC Plan.  Reorganized RFSC will also receive
funds in future tax years from its interest in certain litigation
proceeds.  As a result, RIC and RFSC will be required to pay
significant amounts of Federal income tax if the net operating
losses of the RFSC Tax Group are restricted under Section 382(a)
or Section 269 of the Tax Code.  Thus, distributions to the
policyholders of RIC and the Allowed Bank Claim holders will be
adversely impacted if the reorganization effected by the RFSC Plan
does not qualify under Section 382(l)(5) of the Tax Code or if
Reorganized RFSC's use of the NOLs is restricted under Section 269
of the Tax Code.

Headquartered in New York, New York, Reliance Group Holdings, Inc.
-- http://www.rgh.com/-- is a holding company that owns 100% of
Reliance Financial Services Corporation.  Reliance Financial, in
turn, owns 100% of Reliance Reliance Insurance Company.  The
Company filed for chapter 11 protection on June 12, 2001 (Bankr.
S.D.N.Y. Case No. 01-13403).  When the Company filed for
protection from their creditors,  they listed $12,598,054,000 in
assets and $12,877,472,000 in debts. (Reliance Bankruptcy News,
Issue No. 58; Bankruptcy Creditors' Service, Inc., 215/945-7000)


RUSSEL METALS: Senior Executives Exercise Stock Options
-------------------------------------------------------
Russel Metals Inc.'s (TSX:RUS) Chief Executive Officer and other
senior executives have exercised stock options.

Edward M. Siegel, Jr., Chief Executive Officer, exercised 260,000
common share options and sold 250,165 and currently holds 800,000
common shares worth approximately $9.28 million. Mr. Siegel has
600,000 common share options remaining after the exercise.

Brian R. Hedges, Chief Financial Officer, exercised and sold
105,000 common shares. After giving effect to the trade, Mr.
Hedges currently holds 188,300 common shares worth $2.18 million
and 265,000 common share options.

Russel Metals is one of the largest metals distribution companies
in North America. It carries on business in three metals
distribution segments: service center, energy tubular products and
import/export, under various names including Russel Metals, A.J.
Forsyth, Acier Leroux, Acier Loubier, Acier Richler, Armabec,
Arrow Steel Processors, B&T Steel, Baldwin International, Comco
Pipe and Supply, Drummond McCall, Ennisteel, Fedmet Tubulars,
Leroux Steel, McCabe Steel, Megantic Metal, Metaux Russel, Milspec
Industries, Poutrelles Delta, Pioneer Pipe, Russel Leroux, Russel
Metals Williams Bahcall, Spartan Steel Products, Sunbelt Group,
Triumph Tubular & Supply, Vantage Laser, Wirth Steel and York
Steel.

                         *     *     *

As reported in the Troubled Company Reporter's February 9, 2004
edition, Standard & Poor's Ratings Services raised its ratings on
Russel Metals Inc., including the long-term corporate credit
rating, which was raised to 'BB' from 'BB-'. At the same time,
Standard & Poor's assigned its 'BB-' rating to Russel Metals'
proposed US$175 million notes.  The rating on the notes is one
notch lower than the long-term corporate credit rating, reflecting
the significant amount of priority debt, including secured bank
lines and subsidiary obligations, which would rank ahead of the
notes in the event of default. The outlook is stable.


SOLUTIA INC: Settles Mundy's $529,326 Claim with Contract Award
---------------------------------------------------------------
At the request of Solutia, Inc. and its debtor-affiliates and
subsidiaries, Judge Beatty approves their settlement agreement
with Mundy Maintenance and Services, LLC.  The Settlement
Agreement is in connection with Mundy's provision of personnel to
perform certain services under an agreement dated September 10,
2002.

The Debtors utilize contractors to provide necessary personnel to
perform a variety of services, including maintenance, construction
and procurement at many of their plants.  Before the Petition
Date, Mundy provided personnel at Solutia, Inc.'s Chocolate Bayou,
Texas facility while other contractors provided personnel at other
Solutia facilities in:

    -- Greenwood, South Carolina,
    -- Decatur, Alabama,
    -- Pensacola, Florida, and
    -- Foley, Alabama.

As of the Petition Date, Mundy asserts a prepetition claim for
$529,326.

M. Natasha Labovitz, Esq., at Gibson, Dunn & Crutcher, LLP, in
New York, relates that the Debtors have reviewed their business
operations and developed a new business plan, one goal of which is
to reduce costs and increase profitability.  One of the Debtors'
initiatives in that regard is to review their executory contracts
to identify those that are not profitable for them.  As a result
of the review, Solutia decided that it could achieve cost savings
by consolidating its personnel providers and having only one
contractor to provide the necessary personnel at the Facilities.

Solutia informed its various contractors that it wants to have one
contractor to provide all of its personnel needs at the Facilities
and requested bids for the work.  After review of the resulting
bids and follow-up negotiations with the parties, Solutia
determined that Mundy's proposal provided the most benefit to
Solutia's estate.

As part of its proposal, Mundy agreed to waive its Claim to induce
Solutia to agree to amend and restate the Maintenance Contract and
expand the scope of its provision personnel to include the
Greenwood Facility.  While the Debtors believe that Court approval
is not generally required for a waiver of a prepetition claim,
they recognize that the award of a future contract in connection
with the claim waiver may be construed as a compromise or
settlement of the claim within the meaning of Rule 9019 of the
Federal Rules of Bankruptcy Procedure.

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)


SPECTRASCIENCE: Gets Court Confirmation on Reorganization Plan
--------------------------------------------------------------
SpectraScience, Inc. (OTC: SPSIQ.PK) received a Court Order of
Confirmation in connection with a Chapter 11 Reorganization Plan
in the U.S. Bankruptcy Court filed by its Trustee, Timothy D.
Moratzka.  The expiration period for objections ended on August 2,
2004 and the Plan becomes effective August 23, 2004.

The previously announced Shareholder Rights Offering under the
Plan was completed on July 16, 2004.

The Company also announced that it has begun transferring its
manufacturing facilities to 11568-11 Sorrento Valley Road, San
Diego, California 92121.

The Company develops and markets its proprietary WavStat(TM)
Optical Biopsy System for use by physicians in diagnosing tissue
to be normal, pre-cancerous, or cancerous.  The WavStat(TM) System
is currently approved for use in the colon.  Other applications
are under development.

SpectraScience filed for bankruptcy protection under Chapter 7 of
the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the
District of Minnesota on September 13, 2002.  The case was
converted to a Chapter 11 on February 5, 2003.


SPIEGEL GROUP: New Hampton Property Auction Set for Sept. 15
------------------------------------------------------------
An auction will commence at 10:00 a.m. on September 15, 2004,
before Judge Blackshear in the United States Bankruptcy Court for
the Southern District of New York, Courtroom 601, One Bowling
Green in Manhattan to sell Spiegel Group's real property located
at 2101, 2201, 2221 and 2401 Aluminum Avenue in Hampton, Virginia.
American Port Services, Inc., has already offered $1,898,100 for
the property.

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)


SUN HEALTHCARE: June 30 Balance Sheet Insolvent by $108.2 Million
-----------------------------------------------------------------
Sun Healthcare Group, Inc. (NASDAQ: SUNH) reported total net
revenues of $212.7 million and net income of $7.3 million for the
quarter ended June 30, 2004, compared with total net revenues of
$203.9 million and a net loss of $11.6 million for the comparable
quarter in 2003.

The 2004 second-quarter net income included the reduction of $6.0
million of excess liability reserves for general and professional
liability and workers' compensation insurance. The reduction of
excess reserves for general and professional liabilities was $2.5
million, comprised of $2.0 million related to continuing
operations for the first six months of the current year, $0.1
million related to continuing operations for prior periods and
$0.4 million related to discontinued operations for prior periods.
The reduction of reserves relating to workers' compensation
insurance was $3.5 million, comprised of $1.0 million related to
continuing operations for the first six months of the current
year, $1.6 million related to continuing operations for prior
periods and $0.9 million related to discontinued operations for
prior periods. The 2004 second-quarter net income also included
the forgiveness of $3.7 million of debt related to the refinancing
of six inpatient facilities, a gain on discontinued operations of
$1.7 million and a gain on sale of assets of $0.4 million. The
2003 second-quarter net loss included $5.6 million for loss on
discontinued operations, a $2.8 million gain related to discounted
payments to trade vendors and the recovery of bankruptcy-related
preference payments and a $2.7 million gain on sale of assets.

In July 2004, Sun commenced efforts to sell the portion of its
laboratory and radiology operations located in California, which
will be considered an asset held for sale in the third quarter of
2004. The California laboratory and radiology operations that Sun
plans to sell contributed net revenues of $5.3 million and net
operating losses of $3.6 million to Sun's laboratory and radiology
services segment for the second quarter of 2004. Those net
revenues and net operating losses will be reclassified into
discontinued operations for the third quarter of 2004.

"The second quarter demonstrates continued improvement in the
company's financial performance year over year," said Richard K.
Matros, chairman and chief executive officer. "Our operations show
good progress and importantly, we have begun to show marked
improvement in our workers' compensation and general and
professional liability costs sooner than anticipated."

Sun reported net revenues of $421.7 million and a net loss of $3.1
million for the six months ended June 30, 2004 compared with total
net revenues of $399.8 million and a net loss of $24.8 million for
the comparable period in 2003. Net revenues and net losses for the
California laboratory and radiology operations for the six months
ended June 30, 2004 were $6.7 million and $8.8 million,
respectively. The net loss for the first six months included the
reduction of excess liability reserves for insurances and the
forgiveness of debt as discussed above. The 2004 six-month net
loss also included a gain on sale of assets of $0.4 million and a
gain on discontinued operations of $0.2 million. The 2003 six-
month net loss included $11.5 million for loss on discontinued
operations, a $4.1 million gain related to discounted payments to
trade vendors and the recovery of bankruptcy-related preference
payments and a $3.0 million gain on sale of assets.

At June 30, 2004, Sun Healthcare Group's balance sheet showed a
$108,242,000 stockholders' deficit compared to a deficit of
$166,398,000 at December 31, 2003.

                        Operating Results

Net revenues from the inpatient services operations, which
comprised 69.8 percent of Sun's total revenue from continuing
operations for the quarter ended June 30, 2004 increased 7.9
percent from $137.6 million for the quarter ended June 30, 2003 to
$148.5 million for the same period in 2004. The revenue gain
primarily results from higher per diem rates in all payor
categories and an increase in Medicare patients. EBITDAR for the
continuing operations of inpatient services increased from $15.0
million for the quarter ended June 30, 2003 to $23.8 million for
the same period in 2004.

Sun's net revenues from its continuing ancillary business
operations, comprised of SunDance Rehabilitation Corporation,
CareerStaff Unlimited, Inc., SunPlus Home Health Services, Inc.,
and Sun Alliance Healthcare Services, Inc., net of intersegment
eliminations, decreased $2.1 million from $66.2 million for the
quarter ended June 30, 2003 to $64.1 million for the same period
in 2004. EBITDAR for those operations decreased over the same
period from $8.1 million to $3.8 million. The decrease was
primarily attributable to the California laboratory and radiology
operations that Sun is seeking to sell.

                     Second Quarter Highlights

During the second quarter of 2004, Sun:

   (i) divested two of its under-performing long-term care
       facilities,

  (ii) completed the restructure of the master lease of 33
       facilities leased from Omega Healthcare Investors, Inc.
       (NYSE: OHI) and in that transaction converted approximately
       $7.8 million of rental obligations into 760,000 shares of
       its common stock plus a cash payment of $0.5 million,

(iii) restructured $21.2 million of mortgage debt related to six
       facilities that became due in May 2004 as follows: $14.5
       million was refinanced, $3.0 million was paid off, and $3.7
       million was forgiven, and

  (iv) entered into option agreements that are exercisable in
       increments over a period of seven years to purchase nine
       entities that own nine facilities that it currently leases
       and operates in New Hampshire.

Sun intends to divest five of its facilities and its California
laboratory and radiology operations during 2004. Mr. Matros noted,
"Although we are looking at opportunities to grow, the decision to
sell our California laboratory and radiology business segment is
the right decision for our company. After assessing the potential
upside of this particular business unit, it simply is not enough
to justify the investment in the continuing operations."

                About Sun Healthcare Group, Inc.

Sun Healthcare Group, Inc., with executive offices located in
Irvine, California, owns SunBridge Healthcare Corporation and
other affiliated companies that operate long-term and postacute
care facilities in many states. In addition, the Sun Healthcare
Group family of companies provides therapy through SunDance
Rehabilitation Corporation, medical staffing through CareerStaff
Unlimited, Inc., home care through SunPlus Home Health Services,
Inc., and medical laboratory and mobile radiology services through
SunAlliance Healthcare Services, Inc.

Sun Healthcare Group, Inc., filed for chapter 11 protection on
October 14, 1999 (Bankr. Del. Case Nos. 99-3657 through 99-3841,
inclusive) and emerged under the terms of an Amended Joint Plan of
Reorganization that took effect on February 28, 2002.  Michael F.
Walsh, Esq., John J. Rapisardi, Esq., and Paul D. Leake, Esq., at
Weil, Gotshal & Manges LLP, represented Sun Healthcare in that
proceeding.  The Amended Joint Plan delivered roughly 89% of the
new equity issued under the Plan to the Debtors' senior secured
creditors, a 9% stake to unsecured creditors, and 2% of the pie to
the senior subordinated noteholders.


URS CORPORATION: Wins USACE's Multiple Award Remediation Contract
-----------------------------------------------------------------
URS Corporation (NYSE: URS) is one of five companies awarded an
indefinite delivery/indefinite quantity Multiple Award Remediation
Contract (MARC) with the U.S. Army Corps of Engineers (USACE) to
provide environmental services for the USACE's Louisville
District. Under the terms of the contract, as the USACE issues
specific task orders, URS will provide environmental remediation
activities, including investigations, as well as engineering
support and construction services associated with environmental
restoration projects. The Company also will provide environmental
compliance assessments, engineering evaluations and cost analyses,
and operations and maintenance services. The contract includes a
three-year base period and up to seven years of options and/or
extensions. The maximum aggregate value of the contracts to all
five companies is $300 million over the full ten years assuming
all the option periods are exercised.

Commenting on the contract win, Gary V. Jandegian, President, URS
Division, said: "This is a significant win for URS, underscoring
our position at the forefront of the environmental services market
and further expanding our strong relationship with the Army Corps
of Engineers. We look forward to working with the Army Corps of
Engineers on this important assignment."

URS Corporation offers a comprehensive range of professional
planning and design, systems engineering and technical
assistance, program and construction management, and operations
and maintenance services for surface transportation, air
transportation, rail transportation, industrial process,
facilities and logistics support, water/wastewater treatment,
hazardous waste management and military platforms support.
Headquartered in San Francisco, the Company operates in more than
20 countries with approximately 26,000 employees providing
engineering and technical services to federal, state and local
governmental agencies as well as private clients in the chemical,
manufacturing, pharmaceutical, forest products, mining, oil and
gas, and utilities industries http://www.urscorp.com/

                         *     *     *

As reported in the Troubled Company Reporter's May 13, 2004
edition, Standard & Poor's Ratings Services raised its corporate
credit and senior secured bank loan ratings on URS Corp. to 'BB'
from 'BB-'. At the same time, Standard & Poor's raised the senior
unsecured and senior subordinated debt ratings to 'B+' from 'B'.
The ratings were removed from CreditWatch, where they were placed
on March 31, 2004. The outlook is positive.

"The upgrade reflects decreased leverage and improved financial
flexibility upon completion of URS' equity offering as well as
the expectation that the company will exercise a somewhat less
aggressive financial policy in the future," said Standard &
Poor's credit analyst Heather Henyon. "Management's commitment to
a more conservative financial profile could lead to metrics
exceeding Standard & Poor's expectations in the intermediate
term, potentially leading to a ratings upgrade."


VOEGELE MECHANICAL: Case Summary & Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Voegele Mechanical Inc.
        dba Voegele Mechanical Services Inc.
        dba VMS Inc.
        2170 Bennett Road
        Philadelphia, Pennsylvania 19116

Bankruptcy Case No.: 04-30628

Type of Business: The Debtor is a heating, air conditioning,
                  refrigeration, plumbing, and electrical
                  contractor.  See: http://www.voegele.net/

Chapter 11 Petition Date: August 3, 2004

Court: Eastern District of Pennsylvania (Philadelphia)

Judge: Stephen Raslavich

Debtor's Counsels: Rhonda Payne Thomas, Esq.
                   Klett Rooney Lieber and Schorling
                   Two Logan Square, 12th Floor
                   Philadelphia, Pennsylvania 19103-2756
                   Tel: (215) 567-7500

Estimated Assets: $10 Million to $50 Million

Estimated Debts: $10 Million to $50 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Economy Plumbing &            Trade                   $1,049,416
Heating Supply Co
5245 Germantown Avenue
Philadelphia, PA 19144-2394

United Association of         Union                     $605,616
Journeymen and
Apprentices of the
Plumbing & Pipefitting
Industry of the United
States & Canada Plumbers
Local Union No. 690
2791 Southampton Road
Philadelphia, PA 19154

Danco, Inc.                   Trade                     $604,360
PO Box 367
Bellmawr, New Jersey 08031

United Association of         Union                     $531,220
Journeymen and
Apprentices of the
Plumbing & Pipefitting
Industry of the United
States & Canada Plumbers
Local Union No. 420
14420 Townsend Road
Suite B
Philadelphia, PA 19154-1028

United States Treasury        Government                $452,272
PO Box 8318
Philadelphia, PA 19162

City of Philadelphia          Government                $399,390
Wage Tax
PO Box 8040
Philadelphia, PA 19101-8040

US Mid-Atlantic Insurance     Insurance                 $250,138
PO Box 8500-5660
Philadelphia, PA 19178-5660

Quality Heating/SSM           Trade                     $237,917

Diaz Excavating and           Trade                     $213,215
Construction Inc.

Luthe Sheet Metal, Inc.       Trade                     $210,186

Building Control              Trade                     $174,674
Systems, Inc.

Stainless Steel               Trade                     $173,072
Fabricators

Bonland Industries, Inc.      Trade                     $171,379

Pennsylvania Unemployment     Government                $135,213
Compensation Fund Labor
And Industry

Quality Heating and           Trade                     $130,871
Sheet Metal

Insultech                     Trade                     $129,090

Islandaire, Inc.              Trade                     $118,871

United Association of the     Union                     $117,335
Journeymen and
Apprentices of the
Plumbing & Pipefitting
Industry of the United
States & Canada, AFL-CIO
Local Union No. 9

York International Corp       Trade                     $117,190


WEIRTON STEEL: State Balks at Disallowing Frontier Insurance Claim
------------------------------------------------------------------
Pursuant to Chapter 23 of the West Virginia Statutes, West
Virginia requires all employers operating in the State of West
Virginia to participate in West Virginia's system for payment of
workers' compensation claims.  West Virginia requires that all
employers either:

    (a) subscribe to a workers' compensation fund, to which
        payments are made by employers and from which employee
        workers' compensation claims are paid; or

    (b) self-insure against workers' compensation claims.

Pursuant to the applicable laws and regulations, Debtor Weirton
Steel Corporation elected to self-insure against workers'
compensation claims with the consent of the West Virginia Workers'
Compensation Commission.  According to Mark E. Freedlander, Esq.,
at McGuireWoods, in Pittsburgh, Pennsylvania, even though the
Debtor, as a self-insured employer, was not required to subscribe
to the Fund, it was required to make certain payments, referred to
as a "self-insured premium tax," to the Fund.

On November 3, 2003, the Compensation Commission filed a proof of
claim, asserting a contingent unsecured priority claim in the
undiscounted amount of $111,031,825, and in the discounted amount
of $59,901,268, for prepetition obligations allegedly owed by the
Debtor to the Fund, based on the projected future payments to be
made by the Fund to individual workers' compensation claimants on
account of prepetition injuries sustained by the claimants.  The
Compensation Commission also filed an administrative priority
claim for $6,178,687, for amounts allegedly owed by the Debtor to
the Fund, based on the projected future payments to be made by the
Fund to individual workers' compensation claimants on account of
postpetition injuries sustained by the claimants.

On April 23, 2004, the Commission filed a Notice of Appeal of the
ISG Sale Order with the United States District Court for the
Northern District of West Virginia.

Mr. Freedlander tells the Court that the Debtor and the Commission
have reached an agreement to settle issues relating to the
Commission Claims and those issues raised by the Commission on
Appeal.  The Debtor expects to file a motion to settle claims with
the Commission in the Bankruptcy Court soon.

Subsequently, a substantial number of individual workers'
compensation claimants have filed prepetition and administrative
proofs of claim, asserting liability encompassed in the Commission
Claims.  Mr. Freedlander contends that the 496 Individual Workers'
Compensation Claims totaling $15,950,443, are claims payable by
the Commission from the Fund, not the Debtor.

Hence, the Debtor asks the United States Bankruptcy Court for the
Northern District of West Virginia to disallow the Individual
Workers' Compensation Claims.

Only 20 of the Individual Compensation Claims assert claim
amounts:

                            Claim       Claim        Claim
    Claimant                Number      Amount   Classification
    --------                ------      ------   --------------
    Beaver, George R.         1491    $813,971        unsecured
    Boniey, Mary              2203     100,000        unsecured
    Eannottie, Helen M.       1593         635        unsecured
    Enrietti, Leonard M.      1996       3,415        unsecured
    Frontier Insurance Co.    2764  10,277,950        unsecured
    Griffin, Janice            897     318,702        unsecured
    Guiddy, Paul G.           2368      44,252        unsecured
    Kozora, Steven M.         2157      12,000        unsecured
    Koroza, Steven M.         2681      28,243        unsecured
    Littleton, Richard S.    20309      25,000   administrative
    Mayerich, Gerald L.       2043      10,665        unsecured
    Proffit, Margaret          898     115,802        unsecured
    Rees, Samuel D.           1156     500,000        unsecured
    Reinard, Timothy A.      20362      80,000   administrative
    Reinard, Timothy A.       2599   1,750,000        unsecured
    Ryan, Robert J. Jr.       1496     543,278        unsecured
    Tiberio, Anthony T. Jr.  20207      25,000   administrative
    Todoroff, Michael A.      1986   1,296,770        unsecured
    Zrinyi, Eugene G.         1764       2,380         priority
    Zrinyi, Eugene G.         1814       2,380         priority

                 Compensation Commission Responds

The West Virginia Workers' Compensation Commission does not oppose
the Debtor's Claims Objection as it relates to claims filed by
former employees, their dependents and survivors.

However, the Debtor wants to disallow Frontier Insurance Company's
proof of claim.  Marye L. Wright, Esq., in Charleston, West
Virginia, asserts that there is no set of facts or legal basis to
disallow Frontier's claim as a workers' compensation claim.  The
Commission does not have any liability to Frontier, and the
settlement in principle between the Debtor and the Commission does
not resolve the claim the Commission has against Frontier.

Thus, the Commission asks the Debtor to provide a factual and
legal basis for the inclusion of the Frontier claim.

Headquartered in Weirton, West Virginia, Weirton Steel Corporation
is a major integrated producer of flat rolled carbon steel with
principal product lines consisting of tin mill products and sheet
products. The company is the second largest domestic producer of
tin mill products with approximately 25% of the domestic market
share.  The Company filed for chapter 11 protection on May 19,
2003 (Bankr. N.D. W. Va. Case No. 03-01802).  Judge L. Edward
Friend, II administers the Debtors cases.  Robert G. Sable, Esq.,
Mark E. Freedlander, Esq., David I. Swan, Esq., James H. Joseph,
Esq., at McGuireWoods LLP represent the Debtors in their
restructuring efforts. (Weirton Bankruptcy News, Issue No. 32;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


WESTPOINT STEVENS: Renews Modified Headquarters Lease
-----------------------------------------------------
WestPoint Stevens, Inc., as successor-in-interest to J.P. Stevens
& Co., Inc., is a tenant under a certain non-residential real
property lease with Reckson 1185 Sixth LLC.  The premises subject
to the Lease, dated as of November 25, 1968, is located at 1185
Avenue of the Americas, in New York.

According to John J. Rapisardi, Esq., at Weil, Gotshal & Manges,
LLP, in New York, the Debtors rent the 9th through 13th floors,
the entire 15th floor, and 10,150 square feet of the Building's
basement.  The Lease is subject to a license with Ralph Lauren
Home collection, a division of Polo Ralph Lauren Corporation,
under which Ralph Lauren occupies the entire 9th floor and a
portion of the 10th floor.  The Debtors use the Premises as their
principal headquarters in New York for administrative, marketing,
and other corporate offices.  The Lease is scheduled to expire by
its own terms on December 6, 2005.

After extensive, good faith, arm's-length negotiations, the
Debtors and Reckson entered into a Modification Agreement to renew
the Lease with respect to the entire 11th, 12th, 13th and 15th
floors.  The salient terms of the Modification Agreement are:

    (a) The Lease term with respect to the Renewal Space will be
        extended to December 31, 2006; and

    (b) The Fixed Rent for the Extension Period will be $4,272,000
        per year, payable in equal monthly installments of
        $356,000.

Because the Debtors do not have an option to renew, the Debtors
will be forced to relocate to another location absent the
extension contemplated in the Modification Agreement.  Mr.
Rapisardi asserts that relocation would certainly involve
considerable expense and inconvenience as well as a great deal of
uncertainty over whether a suitable location can be found at an
advantageous price.  A lease renewal will allow the Debtors to
focus on their business operations and emergence from Chapter 11
rather than on the logistical issues surrounding a move of their
entire New York operations and principal showroom.  The
Modification Agreement provides for an extension of only a portion
of the office space currently occupied by the Debtors, enabling
them to eliminate rental obligations associated with underused or
unneeded space.

The Debtors sought and obtained the Court's authority to assume
the Lease, as modified.  Since the Debtors have continued to
remain current on their payments under the Lease, there are no
outstanding amounts owed under the Lease and therefore assumption
will not result in any cure costs.

Headquartered in West Point, Georgia, WestPoint Stevens, Inc., is
the #1 US maker of bed linens and bath towels and also makes
comforters, blankets, pillows, table covers, and window trimmings.
It makes the Martex, Utica, Stevens, Lady Pepperell, Grand
Patrician, and Vellux brands, as well as the Martha Stewart bed
and bath lines; other licensed brands include Ralph Lauren,
Disney, and Joe Boxer. Department stores, mass retailers, and bed
and bath stores are its main customers. (Federated, J.C. Penney,
Kmart, Sears, and Target account for more than half of sales.) It
also has nearly 60 outlet stores.  Chairman and CEO Holcombe Green
controls 8% of WestPoint Stevens.  The Company filed for chapter
11 protection on June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532).
John J. Rapisardi, Esq., at Weil, Gotshal & Manges, LLP,
represents the Debtors in their restructuring efforts. (WestPoint
Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


WILLIS LEASE: Renews $126 Million Revolving Credit Facility
-----------------------------------------------------------
Willis Lease Finance Corporation (Nasdaq:WLFC) has renewed one of
its primary revolving credit facilities with a syndicate of banks
led by Fortis Bank (Nederland) N.V. as structuring and security
agent and National City Bank as administrative agent. California
Bank & Trust, City National Bank, Wells Fargo Bank, HSH Nordbank,
and State Bank of India are also participants in the credit.

The credit facility makes immediately available to Willis Lease up
to $126.0 million on a revolving basis through May 31, 2006, with
final maturity on May 31, 2007. This and other credit facilities
support the company and its subsidiaries in financing the $498.1
million equipment lease portfolio as of June 30, 2004.

"We are very pleased we have been able to renew this facility,"
said Charles F. Willis, President and CEO. "Access to capital is
fundamental to our success, and we see the continued support of
both domestic and international banks as a vote of confidence for
our business model."

                       About Willis Lease

Willis Lease Finance Corporation leases spare commercial aircraft
engines, rotable parts and aircraft to commercial airlines,
aircraft engine manufacturers and overhaul/repair facilities
worldwide. These leasing activities are integrated with the
purchase and resale of used and refurbished commercial aircraft
engines.
                         *     *     *

                  Liquidity and Capital Resources

In its Form 10-Q for the quarterly period ended March 31, 2004,
filed with the Securities and Exchange Commission, Willis Lease
Finance Corporation reports:

"Cash flows from operations are driven significantly by changes in
revenue.  While the Company has experienced some deterioration in
lease rates, these have been offset by reductions in interest
rates such that the spread between lease rates and interest rates
has remained relatively constant throughout the period.  The lease
revenue stream, in the short-term, is at fixed rates while a
majority of the Company's debt is at variable rates. If interest
rates increase the Company may not be able to increase lease rates
in the short-term and this would cause a reduction in the
Company's earnings. Approximately 88%, by book value, of the
Company's equipment held for lease, was leased at March 31, 2004
and December 31, 2003. Decreases in utilization, as well as
deterioration in lease rates that are not offset by reductions in
interest rates, would have a negative impact on earnings and cash
flows from operations.  The Company believes that utilization and
lease rates will continue to fluctuate for the foreseeable future.

"Approximately $335.7 million of the Company's debt is subject to
the Company continuing to comply with the covenants of each
financing, including debt/equity ratios, minimum tangible net
worth, and minimum interest coverage ratios, and other eligibility
criteria including customer and geographic concentration
restrictions.  In addition, the Company can typically borrow 83-
85% of an engine purchase price and only 70% of a spare parts
purchase price under these facilities, so the Company must have
other available funds for the balance of the purchase price of any
new equipment to be purchased or it will not be permitted to draw
on these facilities for a particular purchase.  The facilities are
also cross-defaulted.  If the Company does not comply with the
covenants or eligibility requirements, the Company may not be
permitted to borrow additional funds and accelerated payments may
become necessary.  Additionally, debt is secured by engines on
lease to customers and to the extent that engines are returned
from lease early or are sold, repayment of that portion of the
debt could be accelerated.  The Company was in compliance with all
covenants at March 31, 2004.

"As a result of the floating rate structure of the majority of the
Company's borrowings, the Company's interest expense associated
with borrowings will vary with market rates.  In addition,
commitment fees are payable on the unused portion of the revolving
facility.

"The Company believes that its current equity base, internally
generated funds and existing debt facilities are sufficient to
maintain the Company's current level of operations. The Company's
ability to sustain its current level of operations would be
impaired if there is a decline in the level of internally
generated funds that could result if off-lease rates increase, or
if there is a decrease in the availability under the Company's
existing debt facilities. The Company is currently discussing
additions to its debt base with its commercial and investment
banks.  If the Company is not able to access additional debt, its
ability to continue to grow its asset base consistent with
historical trends will be impaired and its future growth limited
to that which can be funded from internally generated capital."


WORLDSPAN LP: Moody's Low-B & Junk Ratings
------------------------------------------
Moody's Investors Service has confirmed Worldspan's B1 guaranteed
secured bank credit facility rating, B2 guaranteed senior note
rating, and Caa1 subordinated note (Seller Notes) rating.  The
rating action concludes a review for possible upgrade initiated on
June 4, 2004 and is in response to Worldspan's announcement
on June 29, 2004 that its anticipated IPO has been postponed.
The rating outlook is stable.

The confirmation reflects:

    A) Worldspan's leading market position as an online global
       distribution system (GDS) provider,

    B) the current essential nature of GDS services to the
       airlines as the primary mechanism for travel distribution,
       and

    C) Worldspan's leading market share as a GDS vender to online
       travel agencies.

The rating confirmation also reflects credit challenges related to
Worldspan's:

    X) online customer concentration,

    Y) aggressive capital structure, which contributes to high
       debt leverage, and

    Z) modest cash position and revolving credit facilities with
       tight financial covenants.

The stable outlook is based on Moody's expectation that Worldspan
will continue to:

    1) increase its airline and other booking market share
       within the online travel market,

    2) effectively manage the shift of bookings from the
       traditional travel agent channel (54% of Worldspan's
       air booking volume in 2003) to online transactions, and

    3) maintain financial flexibility under the financial
       covenants of its bank credit facility.

The stable outlook also assumes that Expedia's announcement on
May 5, 2004 that Expedia will shift a portion of its bookings from
the Worldspan to the Sabre GDS will not have a material negative
impact on Worldspan's credit profile. The rating could be raised
if the company's financial flexibility were to improve
substantially as measured by adjusted debt to EBITDA less capex,
or the online market becomes the primary distribution channel and
the company maintains a significant share of that market. The
rating could be lowered if Worldspan were to lose or experience a
diminution in contract value related to one of its major online
customers, resulting in a potentially material decline in
the company's revenue, liquidity, or operating margins. The
ratings may also be lowered if online agencies other than those
powered by the Worldspan GDS grow at the expense of Worldspan's
clients, the company's net booking fee (gross booking fee less
inducements) deteriorates, or the company's traditional channel
market share weakens before online becomes the dominant travel and
lodging distribution channel.

Moody's placed Worldspan's ratings on review for possible upgrade
on June 4, 2004. The review for upgrade was based on Moody's
expectation that IPO proceeds of roughly $650 million would be
used to repay a substantial portion of the company's outstanding
debt and preferred equity.

Sales in the company's first fiscal quarter ended March 31, 2004
grew 6% to $249 million and free cash flow (defined as operating
cash flow less capex) increased to $20 million from -$4 million
in the comparable prior year quarter. Rent adjusted debt to
EBITDAR less capex for the last twelve months ended March 31,
2004 improved to 4.7x versus 7.6x for the fiscal year ended
December 31, 2003.

At March 31, 2004, Worldspan's liquidity consisted of $32 million
cash, $50 million undrawn revolver expiring June 30, 2007, all of
which was available at March 31, 2004, and $88 million free cash
flow.

RATINGS CONFIRMED:

    -- B1 rating on $175 million guaranteed senior secured bank
       credit facility due 2007

    -- B2 rating on $280 million guaranteed senior unsecured notes
       due 2011

    -- Caa1 rating on $84 million senior subordinated notes
       (Seller Notes) due 2012

    -- B1 Senior Implied rating

    -- B3 Long Term Issuer Rating

Worldspan L.P., headquartered in Atlanta, Georgia, is an
international provider of computer reservation systems and other
IT services for the travel industry.


XEROX CORP: Expects $400 Million from Senior Debt Offering
----------------------------------------------------------
Xerox Corporation (NYSE: XRX) expects to raise $400 million
through a senior unsecured note offering.

Proceeds from the offering, which is subject to market and other
conditions, will be used for general corporate purposes. Due 2011
and denominated in U.S. dollars, the notes will be issued by Xerox
and sold under the company's $2.5 billion universal shelf
registration statement.

Citigroup Global Markets Inc. and JPMorgan Securities Inc. are
acting as joint book-running managers for the offering. A copy of
the prospectus for this offering may be obtained by contacting:

         Citigroup Global Markets, Inc.
         Prospectus Department
         Brooklyn Army Terminal, 8th Floor
         140 58th Street
         Brooklyn, NY  11220
         Phone: +1-718-765-6732
         Fax: +1-718-765-6734

                     About Xerox Corporation

Xerox is best known for its copiers, but it also makes printers,
scanners, fax machines, software, and supplies, and provides
consulting and outsourcing services. The company designs its
products for home users, businesses, and high-volume publishers
such as newspapers. Customers include Kinkos and the US Army
Reserve. Although it plans to expand its color printing offerings,
the company still generates two-thirds of its revenue from black
and white products. Sales outside the US account for nearly 45% of
revenues. Xerox, which has seen its sales and market share slip,
has cut jobs and sold assets, including half of its stake in Fuji
Xerox.

As reported in the Troubled Company Reporter's April 20, 2004,
edition, Standard & Poor's Ratings Services withdrew its 'B'
commercial paper rating for Xerox Corp. and all of its
subsidiaries that carried a short-term rating on April 13, 2004.
No commercial paper is currently outstanding at the company and
the programs are inactive. The long-term ratings on Xerox,
including the 'BB-' corporate credit rating, were affirmed. The
outlook remains negative.


* BOOK REVIEW: Merchants of Debt
--------------------------------
Author:     George Anders
Publisher:  Beard Books
Hardcover:  335 pages
List Price: $34.95

Own your personal copy at
http://amazon.com/exec/obidos/ASIN/1587981254/internetbankrupt

Review by Gail Owens Hoelscher

"For the first fourteen years of KKR's existence, the buyout
firm's hallmark could be expressed in one word: debt. . . .
As KKR grew evermore powerful, Kravis and Roberts derived
their economic clout from a single fact: They could borrow
more money, faster, than anyone else."  KKR acquired $60
billion worth of companies in wildly different industries in
the 1980s: Safeway Stores, Duracell, Motel 6, Stop & Shop,
Avis, Tropicana, and Playtex. They made piles of money by
deducting interest expenditures from their taxes, cutting
costs in their new companies and riding a long-running bull
market.

The juggernaut of Kohlberg Kravis Roberts & Co. began rolling
in 1976 when Jerome Kohlberg and cousins Henry Kravis and
George Roberts left Bear, Stearns with about $120,000 to
spend. The three wunderkind shortly invented and dominated the
leveraged buyout as they sought investors and borrowed money
to acquire Fortune 500 companies in dizzying succession. They
put up very little money of their own funds, but their
partnerships made out like bandits. Consider the case of
Owens-Illinois: KKR put up only 4.7 percent of the purchase
price. The company's chairman earned $10 million within a few
years, the takeover advisors got $60 million, Owens-Illinois
was left "gaunt and scaled back," and about five years later,
KKR took it public at $11 a share, more than twice what the
KKR partnership had paid for it.

In this reprint of his 1992 book Merchants of Debt: KKR and
the Mortgaging of American Business, George Anders tells us
how they worked: "[t]ime after time, the KKR men presented a
tempting offer. The CEO could cash out his company's existing
shareholders by agreeing to sell the company to a new group
that would be headed by KKR, but would include a lot of room
for existing management. The new ownership group would take on
a lot of debt, but aim to pay it off quickly. If this buyout
worked out as planned, the KKR men hinted, the new owners
could earn five times their money over the next five years.
Presented with such a choice in the frenzied takeover climate
of the 1980s, managers and corporate directors again and again
said yes. To top management a leveraged buyout was the most
palatable way to ride out the merger-and-acquisition craze."

The author includes a detailed appendix of KKR's 38 buyouts
during the period 1977-1992 that presents the following on
each purchase: price paid by KKR; percentage of the purchase
price paid by KKR's equity funds; length of time KKR owned the
company; financial payoff for the ownership group; and the
annualized profit rate for investors over the life of the
buyout. KKR used less than 9 percent of its own funds in 18 of
the 38 cases. In only four cases did KKR put up more than 30
percent of the price. KKR owned the 38 companies for an
average of about 5 years. As Anders puts it, "[a]s quickly as
the KKR men had roared into a company's life, they roared
off."

This behind-the-scene account shows the ambition, pride, envy,
and fear that characterized the debt mania largely engineered
by KKR, a mania that put millions out of work and made a very
few very rich. This book is a must-read in understanding what
happened to corporate American in the 1980s.

George Anders is the West Coast bureau chief of Fast Company
magazine. He worked for two decades at The Wall Street
Journal, and was part of a seven-person reporting team that
won the Pulitzer Prize for national reporting in 1997

                           *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                          *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L.
Metzler, Emi Rose S.R. Parcon, Bernadette C. de Roda, Rizande B.
Delos Santos, Jazel P. Laureno, Cherry Soriano-Baaclo, Marjorie
Sabijon and Peter A. Chapman, Editors.

Copyright 2004.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $675 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher
Beard at 240/629-3300.


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