TCR_Public/040810.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Tuesday, August 10, 2004, Vol. 8, No. 167

                          Headlines

ACCERIS COMMS: Implements Plan to Reduce Costs & Improve Results
AIR CANADA: Creditors' Meeting Proxy Deadline Slated on Friday
AIR CANADA: New GSM Wants Carrier to Pay $1.6 Mil. Lease Arrearage
AIR CANADA: Reports $510 Million Net Loss in Second Quarter
AIR CANADA: WestJet Continues Diversion Strategy in Litigation

ALBANY MOLECULAR: Reschedules Q2 2004 Earnings Release to Friday
AMERIDEBT: Hires Freeborn & Peters as Special Litigation Counsel
ARMSTRONG HOLDINGS: 3rd Cir. Says Maertin Litigation Can Proceed
BEVERLY ENTERPRISES: Elects Melanie Dreher to Board of Directors
BLOCKBUSTER INC: S&P Assigns B+ Rating to New $300M Sub. Debt

BURLINGTON IND: BII Trust Wants Court Nod on EPA Settlement Pact
C2 MEDIA: Creditors Must Vote on Debtor's Plan by Friday, Aug. 13
CENTURY ALUMINUM: 96% of Sr. Noteholders Agree to Amend Indenture
CHEMED CORP: Declares Quarterly Dividend of 12 Cents Per Share
COVANTA: Parties Settle $741K Babcock Claims for Unpaid Use Fees

CRDENTIA CORP: Summary of June 16 Debt & Equity Transactions
CROWN CORK: Moody's Gives Ba3 Ratings to Notes & Credit Facilities
CROWN HOLDINGS: S&P Gives BB Bank Loan Rating to $500M Facilities
CURATIVE: S&P Affirms Low-B Ratings & Says Outlook is Negative
DELTA AIR: Strongest Bankruptcy Language to Date in Form 10-Q

DILLARD'S: Selling Credit Card Portfolio to GE Consumer Finance
ENERSYS CAPITAL: Moody's Upgrades Senior Implied Ratings to Ba3
ENRON: Asks Court to Nix Employee Claims Totaling $6.8 Million
ENRON: Ex-EBS CEO Kenneth Rice Pleads Guilty to Securities Fraud
FLEMING COS.: Wants Court Nod on UFCW Local 789 Settlement Pact

FMAC LOAN: Bad Credit Performance Prompts Moody's Ratings Review
FT WILLIAMS: Hires Hamilton Gaskins as Bankruptcy Counsel
GENCORP INC: Fitch Lowers Ratings & Says Outlook is Negative
GEORGIA GULF: Moody's Ba3 Rating Under Review for Possible Upgrade
GRUPO TMM: 9-1/2% & 10-1/4% Noteholders Agree to Amend Indentures

HIGHWOODS: S&P Places Credit Ratings on CreditWatch Negative
HOLLYWOOD ENT: S&P's B+ Corporate Credit Rating on Negative Watch
HORIZON NATURAL: Newcoal Can Credit Bid Claims at Aug. 17 Auction
INTERNATIONAL HI-TECH: Appoints Dan Hallman as U.S. Sales Director
INTERNATIONAL HI-TECH: COO Guarantees $4.5 Mil. Mortgage Financing

INTERNATIONAL HI-TECH: Gets More Patents & Develops New Products
INTERNATIONAL WIRE: Confirmation Objections Due on August 12
KAISER ALUMINUM: Comalco Says $525 Million QAL Price is Too High
LEASE INVESTMENT: Fitch Downgrades Four Classes to Low-B Ratings
LITFUNDING: Inks Non-Binding Letter of Intent for $2.5 Mil Funding

LORAL SPACE: Patrick Brant Succeeds Terry Hart as Skynet President
LOYALTYPOINT: Ability to Continue as a Going Concern is in Doubt
LUCKY LUCK FARMS: Case Summary & 16 Largest Unsecured Creditors
MAGELLAN AEROSPACE: Posts $33.3 Million Half-Year Net Loss
MAXTOR CORP: Weak Operating Results Prompt Moody's Stable Outlook

MILLER DIVERSIFIED: Sale to Miller Feed Lots Still Pending
MIRANT: MAGi Committee Wants Debtors to Sign Hedging Pacts
MISSION ENERGY: Moody's Upgrades Sr. Sec. Rating to B3 from Caa2
MISSISSIPPI CHEM: Terra to Acquire Company for Approx. $268 Mil.
MIV THERAPEUTICS: Capital Deficit Raises Going Concern Doubt

MKP CBO II: S&P Lowers Class B and C Note Ratings to 'B+'
NATIONAL CENTURY: VI/XII Trust Wants Klee Tuchin Hired as Counsel
NEWFIELD EXPLORATION: Moody's Affirms Ba2 Senior Implied Rating
NORTEL NETWORKS: Receives Global IP Sound Warrants
NORTHWESTERN CORP: Incurs $4.8 Million 2004 Second Quarter Loss

NOVADEL PHARMA: Ability to Continue Operations is in Doubt
OMI TRUST: S&P Junks M-2 Classes After Interest Payment Default
ORDERPRO LOGISTICS: Sues Former CEO in Arizona State Court
PACIFIC GAS: U.S. Trustee Amends Unsecured Creditors Committee
PARMALAT: Bondi Sues Citigroup for Fraud, RICO Violations, et al.

PARMALAT: Antitrust Authority Probes Newlat & Carnini Transactions
PENN OCTANE CORP: Auditors Raise Going Concern Doubt
PILLOWTEX CORP: Hires Towers Perrin as to Fight PBGC Claims
PNC MORTGAGE: S&P Affirms Low B-Ratings on Six Certificate Classes
POLYONE CORP: Fitch Affirms Low-B Ratings Despite Improvement

RCN CORP: Court Approves Committee's Bid to Retain Chanin Capital
RELIANCE: Liquidator Wants to Sell 15-Acre Parcel for $2.6 Million
ROMAN INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors
SBS INTERACTIVE: Completes $500,000 Private Placement Transaction
SCAN-OPTICS: Completes Recapitalization & Extends Loan Maturities

SHOWCASE AUTO: First Creditors Meeting Slated for August 24
SOBIESKI BANCORP: MFB Financial Closes $1.156 Million Acquisition
SOLUTIA INC: Court Okays Second Amendment to DIP Financing Pact
STANADYNE CORP: Kohlberg & Co. Completes $330 Million Buy-Out
TENET HEALTHCARE: Cooperating in New Justice Dept. Probe in Mo.

UAL CORP: United ALPA Issues Statement on Pilot Pension Plans
UNIFIED HOUSING: First Creditors Meeting Set for September 8
UNITED REFINING: Completes $200M Private Senior Debt Offering
UNIVERSAL ACCESS: Hires Buccino & Associates as Financial Advisors
UNIVERSAL ACCESS: Hires Shefsky & Froelich as Special Counsel

US AIRWAYS: Transfers $18 Million WestLB Claim to Wilmington Trust
U.S. PLASTIC: First Creditors Meeting Slated for September 1
USG CORP: Trade Creditors Sell 81 Claims Totaling $1,292,758
VERIDICOM INT'L: Deficits Raise Going Concern Doubt
WESTPOINT: BofA Objects to Key Employee Retention Plan Extension

ZI CORPORATION: Names Donald P. Moore to Board of Directors

* Large Companies with Insolvent Balance Sheets

                          *********

ACCERIS COMMS: Implements Plan to Reduce Costs & Improve Results
----------------------------------------------------------------
Acceris Communications Inc. (OTCBB:ACRS) has implemented a plan to
significantly reduce its operating costs. The cost cutting
reflects efficiencies created by the ongoing integration of
Company operations related to its four acquisitions during the
last three years and management's commitment to its objective of
achieving break-even Operating Income (defined by Acceris as
EBITDA less amounts related to discontinued operations) by the end
of 2004, despite softening revenue and regulatory uncertainty.

Approximately 20 percent of the Company's work force will be
removed from the organization. The reduction will affect staff in
the San Diego, Pittsburgh and Somerset facilities. The Company
anticipates that it will record one-time expenses of between $1
million and $2 million during the third quarter ended Sept. 30,
2004 related to this restructuring. Restructuring charges will
include employee reduction costs and lease termination costs, and
may include additional charges related to potential asset
impairments. Management is in the process of assessing the impact
of these measures on other assets.

"The fiercely competitive nature of telecom combined with the
changing regulatory environment has made it challenging for all
players in the industry. In order to remain competitive, we have
taken decisive action to reduce our operating costs and
appropriately staff our organization," commented Kelly Murumets,
President of Acceris. "We are confident that we will continue to
provide the same excellent quality of service that our customers
have come to know and expect."

Acceris Communications is a subsidiary of Counsel Corporation
(NASDAQ:CXSN)(TSX:CXS).

                           About Acceris

Acceris is a broad based communications company serving
residential, small and medium-sized business and large enterprise
customers in the United States. A facilities-based carrier, it
provides a range of products including local dial tone and 1+
domestic and international long distance voice services, as well
as fully managed and fully integrated data and enhanced services.
Acceris offers its communications products and services both
directly and through a network of independent agents, primarily
via multi-level marketing and commercial agent programs. Acceris
also offers a proven network convergence solution for voice and
data in Voice over Internet Protocol communications technology and
holds two foundational patents in the VoIP space.

Acceris Communications' March 31, 2004, balance sheet showed a
$47,292,000 total stockholders' deficit, compared to a deficit of
$49,309,000 at December 31, 2003.


AIR CANADA: Creditors' Meeting Proxy Deadline Slated on Friday
--------------------------------------------------------------
Pursuant to the order of the Ontario Superior Court of Justice in
Toronto, Air Canada's Unsecured Creditors are scheduled to meet on
August 17, 2004, at 10:00 a.m. Montreal Time, to consider and to
pass a resolution approving the carrier's consolidated plan of
reorganization, compromise and arrangement pursuant to the
Companies' Creditors Arrangement Act.

Affected Unsecured Creditors who wish to vote on the Resolution
must have submitted their Proofs of Claim in accordance with the
Court's previous Claims Orders.  Affected Unsecured Creditors who
fail to file a Proof of Claim are neither entitled to attend or
vote at the Creditors' Meeting.

Affected Unsecured Creditors can also appoint a proxy to attend
the meeting in his or her behalf.  Proxies must be received by the
Monitor prior to 5:00 p.m. Montreal Time on August 13, 2004, or
48-hours (excluding Saturdays, Sundays and holidays) before the
time of any adjournment of the Creditors' Meeting.  Proxies must
be delivered to the Monitor:

            Ernst & Young, Inc.
            355 Portage Avenue
            P.O. Box 2730
            Winnipeg, Manitoba, R3B 2C3

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: New GSM Wants Carrier to Pay $1.6 Mil. Lease Arrearage
------------------------------------------------------------------
New GSM Holding Corporation leases to Air Canada the premises at  
355 Portage Avenue, in Winnipeg, Manitoba, which houses the  
primary data center for Air Canada's worldwide passenger  
reservation system.  The Lease is for a 27-year term, beginning  
December 31, 1996.  The Lease requires Air Canada to pay  
$6,253,600 as Fixed Net Rent plus $286,000 as Additional Fixed  
Net Rent, per annum, together with other obligations payable as  
rent under the Lease.

As a condition of the airline's continued occupancy, New GSM asks  
Mr. Justice Farley to compel Air Canada to pay all amounts due  
and owing under the Lease.  Air Canada presently owes $1,634,900  
under the Lease for the rent from January 1, 2003 to March 31,  
2003.

David S. Ward, Esq., at Cassels Brock & Blackwell, LLP, in  
Toronto, Ontario, asserts that New GSM is a critical supplier  
that is entitled to be brought current pursuant to the Initial  
CCAA Order.  Mr. Ward explains that the Leased Premises is  
critical to Air Canada's operations.  Air Canada has not  
terminated, repudiated or disclaimed the Lease.  However, the  
airline has not formally indicated that it intends to remain in  
the Premises.  Meanwhile, Air Canada continues to occupy the  
Leased Premises, and to sublease and collect rent from its  
subtenants of portions of the Leased Premises.

New GSM filed a claim in November 2003 for the payment of all  
outstanding amounts due under the Lease.  New GSM included a  
claim for payment in full of all unpaid rent for the period from  
January 1, 2003 to March 31, 2003, plus interest.

Ernst & Young, Inc., in its capacity as the airline's Monitor,  
denied New GSM's Lease Arrears Claim as a claim that Air Canada  
must pay.  The Monitor allowed New GSM's Lease Arrears Claim as  
an ordinary unsecured claim that is to be compromised under Air  
Canada's Plan of Arrangement.

New GSM further asks the CCAA Court to find that the Lease is  
unaffected for the purposes of Air Canada's Plan.

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)


AIR CANADA: Reports $510 Million Net Loss in Second Quarter
-----------------------------------------------------------
Air Canada reported a $22 million operating income before
reorganization and restructuring items compared to an operating
loss before reorganization and restructuring items of $270 million
in the second quarter of 2003, an improvement of $292 million.
Operating revenues were up $247 million or 15 per cent.  The
improvement in passenger revenues was due to a recovery in most
markets, notably in the Pacific market.  

In the second quarter of 2003, passenger revenues were negatively
impacted due to lower domestic and international demand resulting
from the SARS crisis. Operating expenses were reduced by $23
million or 1 per cent from the second quarter of 2003 in spite of
significantly higher fuel prices and an ASM capacity increase of
11 per cent.  With near record fuel prices, fuel expense rose $82
million or 28 per cent from the second quarter of 2003.  Unit cost
was 11 per cent below the 2003 level, down 15 per cent, excluding
fuel.  Salary and wage expense per ASM declined 22 per cent from
the second quarter of 2003.  Expense reductions were recorded in
essentially all controllable categories including salaries and
wages, aircraft rent, aircraft maintenance materials and supplies,
and communications and information technology.  The unit cost
improvement reflects, in large part, the cost reduction
initiatives undertaken under the restructuring process.  In the
case of certain aircraft lease amendments, conditional upon
emergence from creditor protection, the higher cost of the
original agreement continues to be recorded in operating expense.
As well, the Corporation's pension expenses in the quarter do not
yet reflect the lower levels, which will be recorded post
emergence with fresh start accounting.

"These results reflect a continuation of the upward momentum
reported during the first quarter of 2004," said CEO Robert
Milton.  "We achieved record load factors for the quarter and
revenues have recovered overall following the devastating impact
of SARS and the war in Iraq last year.  We experienced significant
recovery in yields from 2003 levels in July and bookings for the
remainder of August and September remain strong.  Our passenger
revenue generation for 2004 remains on plan and despite high fuel
prices, we expect to report improved year over year operating
results for the third quarter.

"I am particularly encouraged by our strong performance in the
domestic market due in part to positive response to Air Canada's
new simplified fare products which allow customers to choose the
fare that best suits their needs.  With lower unit operating costs
and our ongoing focus in bringing new technology online to further
automate and simplify our customers' travel experience, we are
successfully transitioning to a new business model that is
allowing us to compete effectively in an intensely competitive low
cost domestic market.

"We achieved unit cost reductions of 11 per cent this quarter
despite record fuel and the continuing upward spiral of airport
and navigation fees.  As the full benefit of reduced aircraft rent
and pension expense will only be recorded post emergence with
fresh start accounting, our progress in unit cost reduction is
encouraging.  The labour cost realignments completed this quarter
in addition to the restructuring of supplier contracts and
aircraft leases will effectively reduce Air Canada's operating
costs by approximately $2 billion annually.  However current
record high fuel prices are a concern and a compelling reason to
vigilantly continue reducing costs to ensure our viability going
forward.

"While we still have work to do in the next two months, we are on
track to exit from CCAA protection at the end of September.
Following the successful ratification of all our labour agreements
in mid-July, the Circular and Plan of Arrangement was sent to
creditors in preparation for their vote on the Plan on August
17th, as required.

"We would not have reached this advanced stage without the
significant contribution and determined efforts of the people of
Air Canada.  It has been a difficult and stressful time for our
employees and I thank them for their professionalism, hard work
and continued focus on taking care of our customers.  On behalf of
all the people of Air Canada I also thank our customers -- we
remain committed to earn their ongoing support through excellent
service and as always an uncompromising focus on safety."

On April 1, 2003, Air Canada obtained an order from the Ontario
Superior Court of Justice providing creditor protection under
CCAA.  Air Canada also made a concurrent petition under Section
304 of the U.S. Bankruptcy Code.  The Corporation intends to
emerge from CCAA protection on September 30, 2004 following a
creditor vote to be held on August 17, 2004.

As a result of restructuring under CCAA, the results in this
quarter continue to reflect a number of significant reorganization
and restructuring charges directly associated with the
restructuring; such charges will also be recorded in the third
quarter.  These "reorganization and restructuring items" represent
revenues, expenses, gains and losses, and provisions for losses
that can be directly associated with the reorganization and
restructuring of the business under CCAA.  For the quarter, these
mainly non-cash reorganization and restructuring items amounted to
$426 million compared to $217 million in the second quarter of
2003.

Including reorganization and restructuring items, the net loss for
the quarter was $510 million compared to a net loss of
$566 million in the second quarter of 2003.

Air Canada reiterates that current shareholders of the corporation
will receive only nominal, if any, consideration for their
existing shares upon the corporation's emergence from CCAA
protection.  The current shareholders' participation is expected
to be valued at less than 0.01 per cent of the total equity of the
emerging corporation.

Air Canada's Second Quarter 2004 Management's Discussion &
Analysis and Interim Consolidated Financial Statements & Notes
will be available on Air Canada's website and at http://sedar.com/
A copy may also be obtained on request by contacting Shareholder
Relations at (514) 422-5787 or 1-800-282-7427.

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: WestJet Continues Diversion Strategy in Litigation
--------------------------------------------------------------
Air Canada says WestJet's "defence and counterclaim is entirely
without merit and represents a further attempt to divert attention
from their corporate espionage scheme and the recent departure of
WestJet co-founder Mark Hill."

WestJet CEO Clive Beddoe's recent acknowledgment of inappropriate
activity by WestJet senior executive and cofounder Mark Hill,
supports Air Canada's claim.

Air Canada is seeking to recover $220 million from WestJet in a
lawsuit commenced in April 2004.  WestJet and certain executives
were involved in corporate espionage on a massive scale against
Air Canada for a year.  Mark Hill has admitted under oath that
WestJet surreptitiously accessed Air Canada's password-protected
employee website approximately a quarter of a million times during
that time, and created automated technology to download and
analyze passenger load and booking information.

By obtaining access to this confidential information, including
the number of passengers booked on any flight on any route Air
Canada flies anywhere in the world up to a year in advance,
WestJet was able to compile computer-generated reports for its own
strategic planning, routing and pricing decisions, with a high
degree of accuracy and very little risk.

Mr. Hill resigned from WestJet on July 14, several months after
being placed on paid leave in the aftermath of it becoming
publicly known that he and WestJet had engaged in corporate
espionage.

Air Canada looks forward to hearing in open court WestJet's
explanation for improperly accessing Air Canada's confidential
employee website nearly aquarter of a million times over a 12-
month period.

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.


ALBANY MOLECULAR: Reschedules Q2 2004 Earnings Release to Friday
----------------------------------------------------------------
Albany Molecular Research, Inc. (Nasdaq: AMRI) is rescheduling the
release of second quarter 2004 results and its previously
announced earnings conference call. The company expects to report
second quarter 2004 results and hold a conference call to discuss
the results by Friday, August 13, 2004. The company will make an
announcement when the definitive date and time are set. The
earnings release and conference call were previously scheduled for
Monday, August 9, 2004.

As previously disclosed by the company, the company expects to
incur restructuring charges, as well as an impairment of certain
assets, in the second quarter of 2004 related to the closure of
its Mount Prospect facility. The company will record such
restructuring and impairment charges in the quarter ended June 30,
2004. The company estimates that such restructuring and impairment
charges will be approximately $3 to 4 million. The company expects
to recognize additional charges of approximately $2 million
resulting from the Mount Prospect closing during the second half
of 2004.

In addition, the company has continued to monitor the realization
of the carrying value of its library inventories. The company
recently completed an in-depth review of the carrying value of its
library inventories. As a result of this review, which was based
on expected future revenues, the company has determined that a
significant write-down in the carrying value of these inventories
is required. Such write-down has resulted in a triggering event
which requires the company to determine whether there is an
impairment of certain other long-lived assets and goodwill,
including the goodwill which resulted from the 2001 acquisition of
New Chemical Entities. Based on its review, the company has
determined that an impairment of certain related goodwill and
long-lived assets has occurred. The carrying value of such library
inventories, long-lived assets and goodwill, prior to the impact
of any write-downs or impairments, is approximately $32.5 million.
The company is in the process of determining the final charges in
order to report its second quarter 2004 financial results, but
currently expects that the charges will represent a substantial
portion of the carrying value of the assets under review. The
company expects to report second quarter 2004 results and to hold
a conference call to discuss the results by Friday, August 13,
2004. The company also expects to file its quarterly report on
Form 10-Q for the quarter ended June 30, 2004 by August 13, 2004.

Albany Molecular Research, Inc. is a leading research, drug
discovery, development and manufacturing company built on a
chemistry platform of comprehensive and integrated technologies,
resources and capabilities. The company conducts research and
development with many leading pharmaceutical and biotechnology
companies and for its own internal discovery programs, and
provides cGMP manufacturing of active pharmaceutical ingredients
through its wholly owned subsidiary, Organichem Corporation.

                           *   *   *

                      Liquidity Concerns

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

"We have historically funded our business through operating cash
flows, proceeds from borrowings and the issuance of equity
securities. During the first three months of 2004, we generated
cash of $9.7 million from operating activities. During the first
three months of 2004, we used $2.6 million for investing
activities resulting from $3.3 million from the maturity of
investment securities and the use of $5.8 million for the
acquisition of property and equipment. During the first three
months of 2004, we used $0.4 million for financing activities,
consisting of $1.1 million in long-term debt repayments, offset by
$0.7 million provided by stock option and stock purchase plan
exercises.  Working capital was $177.1 million at March 31, 2004
as compared to $173.6 million as of December 31, 2003. The primary
source of the increase was reduction in vendor payables due to
timing of payments. During 2004, we anticipate making $2.5 million
in defined benefit pension plan contributions, $342 of which was
paid in the quarter ended March 31, 2004.

"We entered into a credit facility consisting of $30.0 million
term loan and $35.0 million line of credit to fund the acquisition
of Organichem during 2003. The term loan matures in February,
2008. As of March 31, 2004, the interest rate on $17.9 million of
the outstanding term loan balance was 3.37% and the interest rate
on the remaining $7.8 million was 2.41%. The line of credit
expires in February 2006 and bears interest at a variable rate
based on the Company's leverage ratio. As of March 31, 2004, the
outstanding balance of the line of credit was $25.5 million and
the interest rate was 2.34%. The credit facility contains certain
financial covenants, including a maximum leverage ratio, a minimum
required operating cash flow coverage ratio, a minimum earnings
before interest and taxes to interest ratio and a minimum current
ratio. Other covenants include limits on asset disposals and the
payment of dividends. As of March 31, 2004, we were in compliance
with all covenants under the credit facility. There have been no
significant changes in future maturities on our long term debt
since December 31, 2003.

"We are pursuing the expansion of our operations through internal
growth and strategic acquisitions. We expect that such activities
will be funded from existing cash and cash equivalents, cash flow
from operations, the issuance of debt or equity securities and
borrowings. Future acquisitions, if any, could be funded with cash
on hand, cash from operations, borrowings under our credit
facility and/or the issuance of equity or debt securities. There
can be no assurance that attractive acquisition opportunities will
be available to us or will be available at prices and upon such
other terms that are attractive to us. We regularly evaluate
potential acquisitions of other businesses, products and product
lines and may hold discussions regarding such potential
acquisitions. As a general rule, we will publicly announce such
acquisitions only after a definitive agreement has been signed. In
addition, in order to meet our long-term liquidity needs or
consummate future acquisitions, we may incur additional
indebtedness or issue additional equity or debt securities,
subject to market and other conditions. There can be no assurance
that such additional financing will be available on terms
acceptable to us or at all. The failure to raise the funds
necessary to finance our future cash requirements or consummate
future acquisitions could adversely affect our ability to pursue
our strategy and could negatively affect our operations in future
periods."


AMERIDEBT: Hires Freeborn & Peters as Special Litigation Counsel
----------------------------------------------------------------
AmeriDebt, Inc., asks the U.S. Bankruptcy Court for the District
of Maryland for permission to hire Freeborn & Peters, LLP, as its
special litigation counsel.

AmeriDebt reports that numerous cases are pending in various
courts naming the Company as a defendant.  Freeborn & Peters, a
full-service Chicago, Illinois-based law firm, represented
AmeriDebt in two of these actions pending in the State of
Illinois:

   (1) State of Illinois v. AmeriDebt, Inc., et al., Case No.
       2003 CH 00062 (Circuit Court for Sangamon County,
       Illinois); and

   (2) Class, et al. v. AmeriDebt, Inc., et al., Case No.
       01 CH 20350 (Circuit Court for Cook County, Illinois).

AmeriDebt wants Freeborn & Peters to continue representing it as
special litigation counsel because the firm has competently
represented the Company prior to its bankruptcy filing, and is
well-versed in the Illinois Litigation.

Freeborn & Peters' professional hourly rates range from:

      Position                  Billing Rate
      --------                  ------------
      partners and other        $295 to $540 per hour
        senior attorneys        
      paralegals                $95 per hour
      associates                $175 to $305 per hour

The professionals who are primarily responsible for representing
the Debtor in the Illinois Litigation are:

      Professional              Billing Rate
      ------------              ------------
      Daniel C. Curth           $355 per hour
      Daniel J. Voelker         $480 per hour
      Roger H. Bickel           $420 per hour
      Harley J. Goldstein       $420 per hour
      John Stevens              $390 per hour
      Garry Wills               $250 per hour

Headquartered in Germantown, Maryland, AmeriDebt, Inc. --
http://ameridebt.org/-- is a credit counseling company.  The  
Company filed for chapter 11 protection on June 5, 2004 (Bankr.
Md. Case No. 04-23649).  Stephen W. Nichols, Esq., at Deckelbaum,
Ogens, et al., 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.


ARMSTRONG HOLDINGS: 3rd Cir. Says Maertin Litigation Can Proceed
----------------------------------------------------------------
Armstrong World Industries, Inc., took an appeal to the United
States Court of Appeals for the Third Circuit concerning the
December 10, 2001 Memorandum Order of the United States District
Court for the District of Delaware that lifted the automatic stay
to permit the Maertin Plaintiffs to proceed with their action
against Armstrong outside of the bankruptcy court process.

In an Opinion filed on July 20, 2004, Circuit Judges Samuel A.
Alito, Jr., and Theodore A. McKee, and Senior District Judge
William W. Schwarzer of the Northern District of California
sitting by designation, affirm the District Court's December
Order.

Circuit Judge McKee notes that AWI raised three issues on appeal.  
The Company argued that the District Court erred in lifting the
automatic stay by misapplying the applicable standard under
Section 362(d)(1) of the Bankruptcy Code and concluding that the
Company was solvent.  Armstrong also argued that the District
Court erred as a matter of law in lifting the automatic stay and
that it abused its discretion or committed a plain error of law in
making ostensible factual findings, without an evidentiary record,
and without permitting the parties to make this record.

After the District Court lifted the stay for the Maertin
Plaintiffs and after additional proceedings in Delaware and New
Jersey, the parties entered into a stipulation, which was approved
by the Bankruptcy Court on May 3, 2002.  Pursuant to the terms of
the Stipulation, the parties agreed that "[t]he Maertin Plaintiffs
may proceed with the Civil Action and pursue any rights that they
may be permitted under applicable state and federal law in
connection with that action, in state or federal court."  The
Stipulation further provided that the automatic stay will remain
in effect with respect to any claims, judgment or settlement
against Armstrong World, other than with respect to the insurance
policies or the Insurance Proceeds.  Thus, the Maertin Plaintiffs
were required to first seek the Bankruptcy Court's approval before
attempting to collect any claims against AWI other than insurance
policies.

The Company's challenge to the December Order is grounded on the
contention that the Maertin Plaintiffs should not be allowed to
attempt to collect their prepetition, unsecured claims against the
Company's estate outside of the bankruptcy process.  The May 3
Stipulation resolves that issue, Circuit Judge McKee notes.  By
agreeing that the Plaintiffs may proceed against the insurance
proceeds at issue with a reservation that they must seek approval
of the Bankruptcy Court for any other protection, Armstrong's
appeal is mostly mooted as the Maertin Plaintiffs correctly noted
in their brief.
  
Moreover, in its January 16, 2003 letter brief, the Company
attempts to suggest that the Stipulation does not render its
appeal moot because it does not address the appropriate standard
of review the Bankruptcy Court should apply if the Maertin
Plaintiffs apply for protection beyond the scope of the insurance
policies.  The Circuit Court views that "argument" as
disingenuous.  "No such issue was raised in AWI's brief to us, nor
could it have been," Circuit Judge McKee relates.  To the extent
that any similar issue exists, it is best resolved by the
Bankruptcy Court if, and when, the Maertin Plaintiffs apply for
protection.  "We can not, and will not, allow AWI to breathe life
into this largely mooted appeal by raising that specter for the
first time before us."

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)   


BEVERLY ENTERPRISES: Elects Melanie Dreher to Board of Directors
----------------------------------------------------------------
Beverly Enterprises, Inc. (NYSE: BEV) elected Melanie Creagan
Dreher, Ph.D., RN, FAAN, to the company's Board of Directors.

Dr. Dreher is Kelting Dean and Professor, College of Nursing, at
the University of Iowa. Previously, she held administrative and
teaching positions at the University of Massachusetts in Amherst,
University of Miami and Columbia University. She is a widely
published author and a leading authority on the effects of drug
use in various cultures.

Dr. Dreher earned a Ph.D. with distinction in anthropology from
Columbia University, a Master of Philosophy degree from Columbia
University, a Master of Arts degree in anthropology from the
Teachers College at Columbia University, and she graduated magna
cum laude from Long Island University with a Bachelor of Science
degree in nursing.

She is a past president of the Sigma Theta Tau International
Nursing Honor Society, a board member of the American Association
of Colleges of Nursing, and a Fellow of the American Nurses
Association.

Beverly Enterprises, Inc. and its operating subsidiaries are
leading providers of healthcare services to the elderly in the
United States. Beverly operates 356 skilled nursing facilities, as
well as 18 assisted living centers, and 43 hospice centers.
Through Aegis Therapies, Beverly also offers rehabilitative
services on a contract basis to facilities operated by other care
providers.

                           *   *   *

As reported in the Troubled Company Reporter's June 18, 2004   
edition, Fitch Ratings has assigned a 'B+' rating to Beverly   
Enterprises,  Inc.'s planned up-to $225 million, 10-year,   
subordinated debt issue.  Proceeds from the new issue will be   
used to fund the recent tender offer for the company's 'BB-'   
rated, $200 million, 9-5/8% senior unsecured notes due 2009.

Those 9-5/8% Notes trade around 112, according to pricing obtained
from the Bloomberg Professional Service.  S&P rates the 9-5/8%
Notes at B+ and Moody's gives them its B1 rating.  

In conjunction, Fitch affirmed the company's 'BB' secured bank   
facility, 'BB-' senior unsecured debt and 'B+' rated subordinated   
convertible notes.  Fitch's Rating Outlook is Stable.  
  
Fitch notes that BEV's credit profile is improving following a   
difficult 2003 that saw profitability negatively impacted by   
rising patient liability costs and reduced Medicare
reimbursement.  Key factors Fitch sees driving the improvement
include strong volume growth, increased Medicare and Medicaid per-
diem rates, a significant reduction in patient liability-related
costs and lower interest costs due to refinancing activities.


BLOCKBUSTER INC: S&P Assigns B+ Rating to New $300M Sub. Debt
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating to
Blockbuster Inc.'s proposed $300 million subordinated notes due
2012.  Proceeds from the notes offering, together with a new
credit facility, will be used to pay a special dividend to
shareholders.  On June 18, 2004, the company received financing
commitments for a new $1.45 billion credit facility.  The size of
the new credit facility will be reduced to $1.15 billion upon
issuance of the subordinated notes.  All other ratings, including
the 'BB' corporate credit rating, were affirmed.  The outlook is
stable.

"The ratings on Blockbuster reflect the risks of operating in a
mature and declining video rental industry, the company's
dependence on decisions made by movie studios, its high leverage,
and the technology risks associated with delivery of video movies
to the home," said Standard & Poor's credit analyst Diane Shand.
"These risks are partially mitigated by Blockbuster's dominant
market position in the video rental industry, good cash flow
generating capabilities, a healthy store base, and geographic
diversity."

Blockbuster is the number-one player in the mature and fragmented
$8.2 billion video rental market, with a 39% share in 2003.  The
company has a 15.2% share of the overall home video industry.
Hollywood Entertainment, its closest competitor, has about a 13%
share in the rental market.  Over the past five years, Blockbuster
has gained about eight points of share in the rental industry,
primarily from independents.  In the near term, new technologies
are not expected to affect the creditworthiness of the company.  
In the retail market (in which Blockbuster has about a 4% share)
the company competes against big box retailers (e.g., Best Buy and
Circuit City), discounters (e.g., Wal-Mart and Target), and
specialty stores.

Industry fundamentals for the video rental market are weak, and
Blockbuster's profitability is heavily dependent on that market.
In response to the weak rental industry dynamics, the company is
transforming itself into a home entertainment store. Blockbuster
has launched a national in-store rental subscription program and
is expanding its store-in-store game concept.  It is also planning
on rolling out an online subscription plan and a movie trading
business.  These initiatives, along with stable share in the
growing retail DVD market and good marketing abilities, should
enable the company to more than offset the contraction of the
rental market.


BURLINGTON IND: BII Trust Wants Court Nod on EPA Settlement Pact
----------------------------------------------------------------
The United States of America, on behalf of the Environmental
Protection Agency, filed Claim No. 1136 on July 18, 2000, pursuant
to the Comprehensive Environmental Response, Compensation and
Liability Act, for:

    -- at least $10,193,132 for unreimbursed environmental
       response costs incurred by the United States, on the EPA's
       behalf, at the:

       (1) Carolina Steel Drum Site in York County, South
           Carolina;

       (2) J Street Site in Harnett County, North Carolina; and

       (3) FCX-Statesville Site in Iredell County, North Carolina;
           and

    -- approximately $10,744,322 in potential future response
       costs incurred by the United States, on the EPA's behalf,
       at the Sites.

Daniel D. DeFranceschi, Esq., at Richards, Layton & Finger, PA,
in Wilmington, Delaware, relates that the EPA Claim asserts a
general unsecured claim except to the extent that the United
States, on the EPA's behalf, may be entitled to administrative
priority for injunctive obligations or postpetition liabilities
of the Burlington Debtor with respect to the property of the
Estate.

On November 19, 2002, the EPA sent a General Notice Letter to the
Debtor asserting various claims against the Debtor and its estate
regarding the Industrial Pollution Superfund Site located at or
near 810 Poindexter Street, Jackson in Hinds County, Mississippi.

                      The Settlement Agreement

The BII Distribution Trust, as representative of the chapter 11
estate of Burlington Industries, Inc., and the Government have
agreed to resolve their disputes.   

The principal terms of the Settlement Agreement are:

    (1) With regard to the IPC Superfund Site claims, the United
        States and the EPA will receive a $5,000 General Unsecured
        Claim to be paid as an Allowed General Unsecured Claim in
        Class 4 under the Plan.  Any claim amount related to the
        IPC Superfund Site that exceeds $5,000 will be deemed to
        be withdrawn with prejudice.  The United States will waive
        and release any further claims against the Debtor for the
        recovery of environmental response costs or any other
        costs, expenses, damages, and claims of any description
        under the CERCLA arising from the IPC Superfund Site,
        subject to the terms of the Settlement Agreement and the
        completion of the Public Notice Process;

    (2) The portion of the EPA Claim relating to the Carolina
        Steel Drum Site will be withdrawn with prejudice;

    (3) With regard to the J Street Site, the United States and
        the EPA will receive a $160,039 General Unsecured Claim,
        which will be paid as an Allowed General Unsecured Claim
        in Class 4 under the Plan.  Any amount of the EPA Claim
        related to the J Street Site that exceeds $160,039 will
        deemed to be withdrawn with prejudice.  The United States
        will waive and release any further claims against the
        Debtor for the recovery of environmental response costs or
        any other costs, expenses, damages and claims of any
        description under the CERCLA arising from the J Street
        Site, subject to the terms of the Settlement Agreement and
        the completion of the Public Notice Process.  In addition,
        the Debtor will have no further obligation to comply with
        the Unilateral Administrative Order for the J Street Site;

    (4) With respect to the FCX-Statesville Site, Operable Unit 1,
        the United States and the EPA will receive a $665,381
        General Unsecured Claim, which will be paid as an Allowed
        General Unsecured Claim in Class 4 under the Plan.  Any
        amount of the EPA Claim related to the FCX-Statesville
        Site that exceeds $665,381 will be deemed to be withdrawn
        with prejudice.  The United States will waive and release
        any further claims against the Debtor for the recovery of
        environmental response costs or any other costs, expenses
        damages and claims of any description under the CERCLA
        arising from the FCX-Statesville Site, Operable Unit 1,
        subject to the terms of the Settlement Agreement and the
        completion of the Public Notice Process.  The Debtor will
        have no obligation to comply with or liability under the
        April 1, 1998 Consent Decree, subject to the terms of the
        Settlement Agreement.  The United States will waive any
        present or future claim against the Debtor for Operable
        Unit 3;

    (5) The Debtor will pay the Allowed General Unsecured Claims
        in accordance with the Plan and by Electronic Funds
        Transfer to the United States' lockbox bank in accordance
        with instructions provided by the United States after
        execution of the Settlement Agreement;

    (6) Only the amount of cash received by the United States, on
        the EPA's behalf, from the Debtor pursuant to the
        Settlement Agreement for the Allowed General Unsecured
        Claims, and not the total amount of the allowed claims,
        will be credited by the EPA to its accounts for the Site.
        The credit will reduce the liability of non-settling
        potentially responsible parties to the EPA for the Site;

    (7) The United States will covenant not to bring a civil
        action or take administrative action against the Debtor
        pursuant to Section 106 and 107 of CERCLA relating to the
        Sites.  This covenant not to sue is conditioned on the
        complete and satisfactory performance by the Debtor of its
        obligation under the Settlement Agreement and extends to
        any successor-in-interest of the Debtor or its Estate,
        including the Trust and any successor company emerging
        under the Chapter 11 cases as approved by the Bankruptcy
        Court and does not extend to any other person; and

    (8) The Debtor or its Estate, including the Trust and any
        successor company emerging under the Chapter 11 cases as
        approved by the Court, will covenant not to sue and agree
        not to assert any claims or causes of action against the
        United States with respect to the Sites, including but not
        limited to:

        -- any direct or indirect claim for reimbursement from the
           Hazardous Substance Superfund;

        -- any claims for contribution against the Unites States,
           its departments, agencies or instrumentalities; and

        -- any claims arising out or response activities at the
           Sites.

The Settlement Agreement will be submitted for public comment via
notice of the Settlement Agreement in the Federal Register.  The
United States reserves the right to withdraw or withhold its
consent if the public comments regarding the Settlement Agreement
disclose facts or consideration that indicate that the Settlement
Agreement is inappropriate, improper or inadequate.  The public
will have 30 days to review and comment on the Settlement
Agreement.  After the United States has reviewed any comments,
the Trust will file a certification that advises the Court of the
results of the Public Notice Process and, if appropriate, seek
Court approval of the Settlement Agreement.

By this motion, the BII Trust asks the Court to approve the
Settlement Agreement, if appropriate, after the completion of the
Public Notice Process.

Mr. DeFranceschi points out that if these matters were not
resolved consensually, the Estate would be required to litigate
the EPA Claim, which would require significant additional time
and effort for further factual investigation and discovery, and
ultimately, a trial on the merits.  Substantial additional
attorney's fees and expenses would be incurred as a result and
there would be no certainty as to the outcome of that litigation.

The Trust believes that the Settlement Agreement is fair and
reasonable.  In exchange for a release of all claims and
liabilities asserted in the EPA Claim, the United States will be
granted general unsecured claims for $830,420.  Mr. DeFranceschi
adds that approval of the Settlement Agreement will liquidate and
bring finality to the Estate's obligations relating to the Sites.
Moreover, the Settlement Agreement will allow the Trust to
liquidate and resolve the Disputed Claim in excess of $20,000,000
represented by the EPA Claim.

The Trust Advisory Committee has given its consent to the terms
of the Settlement Agreement after written notice by the
Distribution Trust Representative.

Headquartered in Greensboro, North Carolina, Burlington
Industries, Inc. -- http://www.burlington-ind.com/-- is one of  
the world's largest and most diversified manufacturers of soft
goods for apparel and interior furnishings.  The Company filed for
chapter 11 protection in November 15, 2001 (Bankr. Del. Case No.
01-11282).  Daniel J. DeFranceschi, Esq., at Richards, Layton &
Finger One Rodney Square, and David G. Heiman, Esq., and Richard
M. Cieri, Esq., at Jones, Day, Reaves & Pogue North Point
represent the Debtors in their restructuring efforts.  Burlington
Reorganization Plan confirmed on October 30, 2003 was declared
effective on November 10, 2003. (Burlington Bankruptcy News, Issue
No. 52; Bankruptcy Creditors' Service, Inc., 215/945-7000)   


C2 MEDIA: Creditors Must Vote on Debtor's Plan by Friday, Aug. 13
-----------------------------------------------------------------
All persons and entities entitled to vote on the Amended Joint
Plan of Reorganization of C2 Media, LLC and its debtor-affiliates
must return their ballots by mail, hand delivery or overnight
courier no later than 5:00 p.m., Eastern Time, on Friday, August
13, 2004, to the Debtors' counsel at:

   Vedder, Price, Kaufman & Kammholz, PC
   805 Third Avenue
   New York, New York 10022
   Attn: Tony Hernandez

The confirmation hearing is scheduled for August 27, 2004 at the
United States Bankruptcy Court for the Southern District of New
York, One Bowling Green, in Manhattan.

Confirmation objections, if any, must be filed with the Court
Clerk no later than 5:00 p.m., Eastern Time, on August 20, 2004,
and served on:

   (1) Attorneys for the Debtors

       Vedder, Price, Kaufman & Kammholz, PC
       805 Third Avenue
       New York, New York 10022
       Attn: Jon Yard Arnason, Esq.

   (2) Office of the United States Trustee
       33 Whitehall Street, 21st Floor
       New York, New York 1004
       Attn: Tracy Hope Davis, Esq.
             Assistant U.S. Trustee

   (3) Attorneys for JP Morgan Chase

       Clifford Chance US, LLP
       31 West 52nd Street
       New York, New York 10019
       Attn: Scott D. Talmadge, Esq.

   (4) Attorneys for Syntek Capital

       Hughes & Luce, LLP
       111 Congress Avenue, Suite 900
       Austin, Texas 78701
       Attn: Bryan Wittman, Esq.

   (5) Attorneys for David Manning and Amnon Bar-Tur
      
       Sonnenschein, Nath and Rosenthal, LLP
       1221 Avenue of the Americas
       New York, New York 10020-1089
       Attn: Carole Neville, Esq.
   
   (6) Attorneys for the Creditors Committee

       Drinker Biddle & Reath, LLP
       500 Campus Drive
       Florham Park, New Jersey 07932-1047
       Attn: Robert K. Malone, Esq.

Any confirmation objection must be in writing and must state the
name and address of the objecting party and the amount of its
claims or the nature of its interest and must state with
particularity the nature of its objection.  
        
C2 Media -- http://c2media.com/-- supplies professional media  
graphics solutions.  The Debtors filed for chapter 11 protection
on October 10, 2001 (Bankr. S.D.N.Y. Case No. 01-15256).  At that
time, C2 owed J.P. Morgan Chase $34 million under a pre-petition
credit agreement.


CENTURY ALUMINUM: 96% of Sr. Noteholders Agree to Amend Indenture
-----------------------------------------------------------------
Century Aluminum Company (Nasdaq:CENX) has received consents from
holders of more than 96% of its outstanding $325.0 million
aggregate principal amount 11-3/4% Senior Secured First Mortgage
Notes Due 2008 (CUSIP No. 156431AC2). The consents are sufficient
to effect the proposed amendments to the indenture governing the
Notes and to the related security documents as set forth in the
Company's Offer to Purchase and Consent Solicitation Statement
dated July 29, 2004, pursuant to which the tender offer and the
consent solicitation are being made.

To be eligible to receive the consent payment relating to the
Notes, holders were required to consent to the proposed amendments
on or prior to 5:00 p.m., New York City time, on Friday, August 6,
2004. Notes tendered prior to the Consent Date may not be
withdrawn except as may be required by law.

Century Aluminum will proceed to execute a supplemental indenture
and amendments to security documents effecting the proposed
amendments to the indenture and security documents. The
supplemental indenture and amendments to the security documents
will become operative only if the Company accepts the Notes for
payment pursuant to the terms of the tender offer. When the
supplemental indenture and the amendments to the security
documents become operative, they will be binding on the holders of
Notes not tendered for purchase in the tender offer.

The tender offer will expire at 10:00 a.m., New York City time, on
August 26, 2004, unless extended or earlier terminated.

The closing of the tender offer is subject to certain conditions,
including closing of the Company's previously announced private
offerings of convertible notes and senior notes to finance the
purchase of the Notes in the tender offer.

The consideration for the Notes tendered will be calculated as of
10:00 a.m., New York City time, on August 12, 2004, based on a
fixed-spread pricing formula. Subject to the satisfaction of the
conditions to the tender offer, the payment date for the Notes
will be promptly following the expiration date.

Credit Suisse First Boston LLC is the exclusive Dealer Manager and
Solicitation Agent for the tender offer and the consent
solicitation. Questions regarding the tender offer and consent
solicitation may be directed to Credit Suisse First Boston's
Liability Management Group, at 800-820-1653 (toll-free) or 212-
538-0652 (collect). Requests for documents may be directed to
Morrow & Co., Inc., the Information Agent, by telephone at 800-
607-0088 (toll-free), 800-662-5200 (toll-free), or 212-754-8000
(collect), or by e-mail at cenx.info@morrowco.com

This press release is not an offer to purchase, a solicitation of
an offer to sell or a solicitation of consents with respect to any
securities, including the Notes. The offer is being made solely by
the Offer to Purchase and Consent Solicitation Statement and
related Letter of Transmittal and Consent dated July 29, 2004.

The securities that may be offered by the Company to finance the
purchase of the Notes in the tender offer will be offered pursuant
to an exemption from registration under the Securities Act of
1933. Such securities will not be registered under the Securities
Act and, accordingly, may not be offered or sold in the United
States absent registration under the Securities Act or an
applicable exemption from the registration requirements.

                        About the Company

Century Aluminum is a producer of primary aluminum with 615,000
metric tons per year of primary aluminum production capacity.
Century owns and operates a 244,000-mtpy primary aluminum
reduction facility at Hawesville, KY, a 170,000-mtpy facility in
Ravenswood, WV and a 90,000-mtpy facility in Grundartangi,
Iceland. Century also owns a 49.67-percent interest in a 222,000-
mtpy facility in Mt. Holly, SC. Alcoa Inc. owns the remainder and
is the operator of the facility. Century's corporate offices are
located in Monterey, CA.

                           *   *   *

As reported in the Troubled Company Reporter's April 27, 2004  
edition, Standard & Poor's Ratings Services revised its outlook on  
Century Aluminum Co. to stable from negative, and affirmed its  
'BB-' corporate credit, senior secured bank loan and senior  
secured notes ratings. Total debt at Monterey, California-based  
Century was about $345 million at Dec. 31, 2003.

"The outlook revision reflects an expected improvement in  
Century's financial performance as a result of higher aluminum  
prices and better industry fundamentals," said Standard & Poor's  
credit analyst Paul Vastola.

The ratings on Century reflect its exposure to the cyclical  
aluminum industry, its high cost position as a primary aluminum  
producer, limited product diversity, and its somewhat aggressive  
financial profile. These factors offset currently favorable  
conditions in the aluminum industry, a relatively low free cash  
flow break-even aluminum price and its fair liquidity position.


CHEMED CORP: Declares Quarterly Dividend of 12 Cents Per Share
--------------------------------------------------------------
Chemed Corporation's (NYSE:CHE) Board of Directors has declared a
quarterly cash dividend of 12 cents per share on its capital
stock, payable on September 10, 2004, to stockholders of record on
August 20, 2004. This represents the 133rd consecutive quarterly
dividend paid by Chemed in its 33 years as a public company.

With roughly 12 million shares outstanding, the company will
distribute just under $1.5 million to its shareholders.  

Listed on the New York Stock Exchange and headquartered in
Cincinnati, Ohio, Chemed Corporation -- http://www.chemed.com/--  
is the nation's largest provider of end-of-life hospice care
services through its VITAS Healthcare Corporation subsidiary.
Chemed also maintains a presence in the residential and commercial
repair-and-maintenance industry through two subsidiaries. Roto-
Rooter is North America's largest provider of plumbing and drain
cleaning services. Service America Network Inc. provides major-
appliance and heating/air conditioning repair, maintenance, and
replacement services.

                         *   *   *

As reported in the Troubled company Reporter's June 1, 2004  
edition, Standard & Poor's Ratings  Services assigned its 'B+'  
corporate credit rating to Cincinnati, Ohio-based hospice,  
plumbing, and drain cleaning services provider Chemed Corporation  
(formerly Roto-Rooter, Inc.).  

At the same time, Standard & Poor's assigned its 'B+' senior  
secured debt rating to Chemed's $110 million floating rate notes  
maturing on Feb. 24, 2010, and assigned its 'B-' senior unsecured  
debt rating to the company's $150 million senior notes maturing on  
Feb. 24, 2011. The outlook is negative.  

"The low speculative-grade ratings on Chemed reflect the company's  
flat to declining plumbing, drain cleaning, and heating and air  
conditioning business, its limited experience functioning as a  
combined entity, its exposure to third-party reimbursement, and  
the integration risks associated with its future acquisition  
strategy," said Standard & Poor's credit analyst Jesse Juliano.  
"These concerns are partially offset by the company's industry  
leading positions in its two businesses, the positive near- and  
long-term growth potential in the hospice industry, and its  
ability to generate significant operating cash flows."


COVANTA: Parties Settle $741K Babcock Claims for Unpaid Use Fees
----------------------------------------------------------------
On May 22, 1995, The Babcock & Wilcox Company, under a license  
from Niro A/S, and Covanta Projects, Inc., entered into a license  
agreement where Covanta Projects and certain of its affiliates  
were granted the right to use Niro's patented mercury removal  
process at certain waste to energy facilities operated by Covanta  
Projects.  Under the License Agreement, Covanta Projects pays  
Babcock for the use of the Process.

As of the Petition Date, Covanta Projects and certain affiliates  
owed Babcock, $741,565 in Use Fees.  The Unpaid Use Fees relate  
to six of the Covanta Debtors' cases.  On August 6, 2002, Babcock
filed in the Debtors' cases identical unsecured claims -- Claim
Nos. 2151, 2162 to 2187 -- for the Unpaid Use Fees.

Babcock is a debtor in a Chapter 11 proceeding pending before the  
U.S. Bankruptcy Court for the Eastern District of Louisiana in  
New Orleans.

On April 17, 2003, the Court approved a stipulation between the  
Debtors and Babcock regarding the assumption and assignment of  
the License Agreement, and the allowance and payment of an  
administrative expense.  Upon the cessation of operations at the  
Tulsa, Oklahoma Facility, the parties agreed that the pro-rata  
portion of the remaining Unpaid Use Fees allocated to the Tulsa  
Facility were to be waived by Babcock as against the Debtors and  
their estates.  The Debtors ceased operations at the Tulsa  
Facility on October 30, 2003.

Pursuant to the April 2003 Stipulation:

   -- The Debtors have already paid Babcock $514,938 plus
      interest;  

   -- Babcock waived $82,608 in Unpaid Tulsa Use Fees; and

   -- The Debtors are obligated to pay Babcock as an allowed  
      administrative expense claim, $144,110 in remaining Unpaid
      Use Fees, plus interest at the rate of 5% per annum on or
      before the earlier of:

         * within 10 days after the effective date of a plan; or  

         * December 31, 2004.

Covanta Projects assumed the License Agreement pursuant to the  
Second Reorganization Plan.

To resolve the treatment of the Babcock Claims and the  
outstanding objections to those claims, the Debtors and Babcock  
stipulate that:

   (a) Babcock is allowed an administrative expense claims for
       the Unpaid Use Fees, adjusted according to the
       Administrative Expense Payments made pursuant to the April
       2003 Stipulation, against these Debtors:  

       Debtors                            Claim No.      Amount
       -------                            ---------      ------
       Covanta Hillsborough, Inc.            2162       $43,702
       Covanta Huntsville, Inc.              2163        27,394
       Covanta Huntington LP                 2174        29,312
       Covanta Lee, Inc.                     2167        43,702

   (b) the Surviving Claims will accrue interest at the rate of  
       5% per annum from January 15, 2004, until paid  
       in full under the terms of the April 2003 Stipulation;

   (c) Babcock's claim related to the $82,608 Unpaid Tulsa Use in
       $82,608 is waived pursuant to the April 2003 Stipulation;

   (d) Babcock's Claim No. 2165 against Covanta Tulsa, Inc., is
       disallowed and expunged;

   (e) Claim Nos. 2151, 2164, 2166, 2168 to 2173, and 2175 to  
       2187, are disallowed and expunged; and

   (f) upon payment of the Cure Amount as provided in the April
       2003 Stipulation, the Surviving Claims will be deemed  
       withdrawn.

Headquartered in Fairfield, New Jersey, Covanta Energy Corporation
-- http://www.covantaenergy.com/-- is a publicly traded holding  
company whose subsidiaries develop, own or operate power
generation facilities and water and wastewater facilities in the
United States and abroad. The Company filed for Chapter 11
protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826).  
Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary,
Gottlieb, Steen & Hamilton represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
its creditors, they listed $3,280,378,000 in assets and
$3,031,462,000 in liabilities. (Covanta Bankruptcy News, Issue No.
60 and 62; Bankruptcy Creditors' Service, Inc., 215/945-7000)   


CRDENTIA CORP: Summary of June 16 Debt & Equity Transactions
------------------------------------------------------------
On June 16, 2004, Crdentia Corp., entered into a Loan and Security
Agreement with Bridge Healthcare Finance, LLC, pursuant to which
Crdentia obtained a revolving credit facility in the amount of up
to $15,000,000.  The Loan has a term of three years and bears
interest at a rate equal to the greater of:

   (i) three percent (3.0%) per annum over the prime rate in
       effect from time to time, or

  (ii) nine and one-half percent (9.5%) per annum.

On June 16, 2004, Crdentia issued 6,250,000 shares of Series B
Convertible Preferred Stock at a cash price per share of $0.20 to
MedCap Partners LP. The holders of the Series B Convertible
Preferred Stock will be entitled to receive a dividend on each of
September 30, 2004, December 31, 2004, March 31, 2005, June 30,
2005, September 30, 2005 and December 31, 2005 in an amount equal
to 0.005 shares of common stock for each share of outstanding
Series B Convertible Preferred Stock held by them.

In the event of any liquidation or winding up of Crdentia Corp.,
the holders of the Series B Convertible Preferred Stock will be
entitled to receive in preference to the holders of common stock
an amount equal to their initial purchase price plus any declared
but unpaid dividends and any remaining liquidation proceeds will
thereafter be distributed on a pro rata basis to the holders of
the Series B Convertible Preferred Stock (on an as-if-converted
into common stock basis), common stock and any other series of
Preferred Stock expressly entitled to participate in such
distribution, until the holders of Series B Convertible Preferred
Stock shall have received, in the aggregate, an amount equal to
five times the amount of their purchase price.

Unless previously voluntarily converted prior to such time, the
Series B Convertible Preferred Stock will be automatically
converted into common stock at an initial conversion ratio of one-
to-one upon the earlier of:

   (i) the closing of an underwritten public offering of Crdentia
       common stock pursuant to a registration statement under the
       Securities Act of 1933, as amended, with aggregate net
       proceeds of at least $25 million, or

  (ii) the date specified by written consent or agreement of the
       holders of a majority of the then outstanding shares of
       Series B Convertible Preferred Stock. The description of
       the foregoing rights, preferences and privileges of the
       Series B Convertible Preferred Stock is qualified in its
       entirety by the Certificate of Designations, Preferences
       and Rights of Series B Preferred Stock filed with the
       Secretary of State of the State of Delaware on June 16,
       2004.

In addition, the holders of such shares of Series B Convertible
Preferred Stock will be entitled to the registration rights set
forth in the Amended and Restated Registration Rights Agreement
dated June 16, 2004 between Crdentia and MedCap.

                       Liquidity Concerns

In its Form 10-KSB for the fiscal year ended December 31, 2003,
filed with the Securities and Exchange Commission, Crdentia Corp.
reports:

"The audit report for the year ended December 31, 2002 contained
an opinion that was qualified as to the Company's ability to
sustain itself as a going concern without securing additional
funding. During 2003 the Company was able to secure additional
funding to fund its operations as it began executing its business
plan to acquire and grow companies involved in healthcare
staffing. Although the Company ended 2003 with negative working
capital of $1,220,865, the following are considered to be
mitigating factors:

   (i) in February 2004 the Company raised an additional $1
       million of Series A Convertible Preferred Stock, and

  (ii) of the $910,000 convertible debt outstanding, the Company
       believes that the holders of a majority of this debt will
       convert to equity in 2004. The Company believes that these
       two factors, coupled with its cash on hand at December 31,
       2003 and its anticipated cash flow from operations in 2004,
       will be sufficient to service its debt and fund its
       operations for the foreseeable future.

                     About Crdentia Corp.

Crdentia Corp. seeks to capitalize on an opportunity that
currently exists in the healthcare industry by targeting the
critical nursing shortage issue. There are many small companies
that are addressing the rapidly expanding needs of the healthcare
industry. Unfortunately, due to their relatively small
capitalization, they are unable to maximize their potential,
obtain outside capital or expand. By consolidating well-run small
private companies into a larger public entity, Crdentia intends to
facilitate access to capital, the acquisition of technology, and
expanded distribution that, in turn, drive internal growth.


CROWN CORK: Moody's Gives Ba3 Ratings to Notes & Credit Facilities
------------------------------------------------------------------
Moody's Investors Service took several ratings actions on the
proposed and existing debt of Crown Cork & Seal Company, Inc.,
which include assignment of ratings to the approximately $1.06
billion proposed first lien debt; affirmation of existing ratings;
and update of the rationale for its Speculative Grade Liquidity
Rating of SGL-2.  The affirmation of existing ratings reflects
Moody's belief that the pro-forma transactions are essentially
credit neutral, and with some improvement in liquidity given the
expected reduced reliance on the proposed revolver and the longer-
dated maturity profile.

While acknowledging the company's solid operating and financial
performance since the ratings assignment in February 2003, the
ratings remain principally constrained by low adjusted free cash
flow to its substantial adjusted debt at below 5%. Adjustments
totaling over $1 billion are made to debt for asbestos
liabilities, unfunded pension and OPEB obligations, and
outstandings under account receivable securitizations. High
financial leverage and lingering asbestos liabilities overshadow
Crown's much improved fundamentals, solid global market positions,
and good near-term liquidity.  Continuing pressure on margins from
rising raw material and energy costs, along with ongoing -- but
improving -- pricing and volume in food cans further constrain the
ratings.

In Moody's opinion, the stable ratings outlook could move to
positive during the intermediate term - absent event risk - should
Crown continue to improve its free cash flow generation and
meaningfully reduce financial leverage while improving margins and
returns. Sustained levels of free cash flow to adjusted debt
between 5% - 10% and unadjusted debt to EBITDA close to 4 times
could trigger a change in the ratings outlook to positive.
Conversely, material deviation from Moody's expectations, which
could include significant acquisitions or other unanticipated
calls on cash, would likely have negative ratings consequences.

Proceeds from the proposed transactions are intended to repay the
existing term B loans (approximately $486 million); to repay and
retire the existing $550 million first lien revolver; and to pay
related expenses.

Moody's took the following actions:

  Ratings assigned:

   -- Ba3 to the proposed $500 million first lien credit
      facilities, maturing in 2010, consisting of a $400 million
      revolver and a $100 million US letter of credit facility;
      and

   -- Ba3 to the proposed Euro 460 million (equivalent
      USD 561 million) first lien notes, due 2011, to be issued by
      Crown European Holdings, S.A.

  Ratings affirmed:

   -- B1 for the $1.4 billion second lien notes, due 2011, issued
      by European Holdings;

   -- B2 for the $725 million third lien notes, due 2013, issued
      by European Holdings;

   -- B3 for the $700 million senior unsecured notes, due 2023 --
      2096, issued by Crown;

   -- B3 for the $336 million senior unsecured notes, due 2004 --
      2006, issued by Finance PLC and including the $40 million
      stub from the January 2005 notes at Crown;

   -- B2 senior implied rating moved to Crown from Crown Holdings,
      Inc., the ultimate parent holding company; and

   -- Caa1 senior unsecured issuer rating moved to Crown from
      Crown Holdings.

The ratings outlook is stable.

The ratings are predicated on the enforceability of the financing
structure and collateral packages (intercreditor and collateral
sharing agreements) as proposed. The ratings are subject to the
execution and review of final documentation. Upon completion of
the proposed transactions, the Ba3 rating assigned to the existing
$1 billion first lien credit facility will be withdrawn.

Pro-forma for the proposed transactions, financial leverage
remains high with debt to EBIT of approximately 8 times (roughly 5
times EBITDA). EBITDA less capital expenditures coverage of pro-
forma interest expense is likely to remain thin at approximately
1.5 times. The ratings incorporate modest potential fluctuations
in margins and overall profitability given the challenging
business environments worldwide, adverse commodity and energy
price movements, and foreign exchange changes (69% of consolidated
revenue is sourced in currencies other than USD).

The rationale for the SGL-2 rating continues to express good near-
term liquidity for Crown as evidenced by solid cash generation,
cash on hand averaging approximately $250 million, modest
mandatory debt maturities in the forward twelve months, and
improved working capital management. Net cash generated by
operations (after asbestos and pension payments) should remain
ample to cover non-extraordinary capital expenditures. Compliance
under existing covenants is expected with adequate cushion.

The SGL-2 rating is constrained by the absence of free cash flow
during each consecutive quarter; uncertainties surrounding the
level of future asbestos cash payments; and limited alternate
sources of liquidity given the encumbrance of assets. Downward
pressure on the liquidity rating would result from greater than
expected working capital requirements, operating shortfalls,
higher than expected asbestos payments and/or pension
contributions, or material increases in discretionary capital
expenditures.

Going forward, the liquidity rating should benefit from improved
availability under committed financings pro-forma for the proposed
transactions and further enhancement of its debt maturity profile.
As of June 2004, there would have been approximately $330 million
of availability under the revolver and approximately $22 million
available under the $100 million letter of credit facility.
Average availability under the $300 million accounts receivable
securitization program should be around $180 million. The
liquidity rating will be revisited when the deal is final.

The Ba3 rating assigned to the proposed $500 million secured
facility reflects its priority position in the capital structure
and the benefits and limitations of the collateral. In Moody's
opinion, the over-collateralization of the first lien facility,
given consideration to the approximately $45 million capital
leases and the proposed pari passu first lien $550 million note,
warrants notching above the B2 senior implied rating. The notching
is further supported by the apparent wrapping of legal issues of
perfecting liens, etc., across geographies as proposed in the
Collateral Sharing Agreement so that US and non-US indebtedness
are on equal footing.

The borrowers under the proposed first lien revolver are intended
to be Crown Americas, Inc. ("Crown Americas") with a $200 million
revolver for USD denominated advances and European Holdings with a
$200 million revolver for non-USD borrowings, namely Euro
equivalent or sterling denominated advances. Additionally, the
borrowers intend to have a $100 million letter of credit facility
secured by a first lien on the same collateral as the proposed
revolver.

Obligations of the US borrower and guarantees are to be secured by
a perfected first priority lien on all the assets, intercompany
notes, capital stock of the US borrower and each of the direct and
indirect subsidiaries of Crown and the US borrower, and up to 65%
of the capital stock of foreign subsidiaries.

Obligations of the non-US borrower and guarantees are intended to
be secured by a perfected first priority lien on all the US
collateral and all the assets of the non-US borrower and
guarantors, the capital stock, and intercompany notes of the US
Borrower, the non-US borrower, and each of the direct and indirect
subsidiaries of Crown, the US borrower, and the non-US borrower.

US borrowings and the letter of credit facility will be guaranteed
on a secured basis by Crown Holdings, Inc., Crown, Crown
International, Inc., and all existing and future direct and
indirect domestic subsidiaries of the US borrower. Non-US
borrowings will be guaranteed on a secured basis by the US
guarantors, Canadian and Mexican subsidiaries, and certain
European subsidiaries to the extent legally permissible. Euro
guarantors will also pledge secured intercompany notes from
certain non-guarantor subsidiaries.

It is Moody's understanding that the collateral sharing
arrangement and intercreditor agreement among bank lenders, first,
second, and third lien note holders will require any proceeds
obtained by second and third lien note holder, in the event of
foreclosure on collateral, to first be applied to satisfy the
first lien lenders and note holders.

The Ba3 rating assigned to the proposed first lien notes at
European Holdings reflects the priority position in the capital
structure and the benefits and limitation of the collateral.  The
notes are effectively subordinated to approximately $100 million
of debt at non-guarantor subsidiaries.  Non-guarantor subsidiaries
account for approximately 32% of total consolidated assets. The
notes are secured by a first perfected lien on the same collateral
package securing the existing 9.5% second lien notes, due 2011.
The proposed note will be guaranteed on a senior basis by the
guarantors of the proposed credit facility.  However, there is
certain collateral that is available to the first lien credit
facility that is not intended to be available to the first lien
note.  In Moody's opinion, that amount as currently understood
should not be material enough to distort the recovery value of the
proposed first lien note.  This, combined with the protections
embedded in the Collateral Sharing arrangement, support notching
above the B2 senior implied rating.

The affirmation of the existing bond ratings reflects Moody's view
that loss severity for each class of debt is relatively unchanged
pro-forma for the proposed transaction and given Crown's solid
enterprise value.

Crown Cork is a large global packaging manufacturer, providing a
broad array of metal and plastic packaging products. These include
metal food and beverage cans, polyethylene terephthalate (PET)
plastic soft drink containers, and plastic containers for the
health andbeauty care market.


CROWN HOLDINGS: S&P Gives BB Bank Loan Rating to $500M Facilities
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' bank loan
rating and a recovery rating of '1' to Crown Holdings Inc.'s
proposed $500 million senior secured credit facilities due
February 2010, based on preliminary terms and conditions.  The
borrowing entities are Crown European Holdings SA and Crown
Americas Inc.  The bank loan rating is rated one notch above the
corporate credit rating; this and the '1' recovery rating indicate
a high expectation of full recovery of principal in the event of
default.

At the same time, Standard & Poor's assigned its 'BB' rating and a
'1' recovery rating to the proposed $550 million first priority
senior secured notes due 2011, which are to be issued under Rule
144A with registration rights by Crown European Holdings SA and
will be guaranteed by Crown Holdings Inc.  The 'BB' rating is one
notch above the corporate credit rating; this and the '1' recovery
rating indicate a high expectation of full recovery of principal
in the event of default.  Proceeds are expected to be used to
finance the outstanding bank debt, and for fees and expenses.

Standard & Poor's also affirmed its 'BB-' corporate credit rating
and other existing ratings on the Philadelphia, Pennsylvania-based
company.  The outlook is stable. Crown had outstanding total debt
of about $4 billion at June 30, 2004.

"The ratings on Crown reflect its aggressive financial profile,
onerous debt burden, and risks associated with its asbestos
litigation, all of which overshadow its average business risk
profile," said Standard & Poor's credit analyst Liley Mehta.

With annual sales of about $6.9 billion, Crown is primarily a
metal container manufacturer (resulting from its asset sales
program of plastic packaging operations and divestiture of Constar
International Inc.), with only about 13% of its revenues derived
from its plastic closures operations.  Although product diversity
has diminished, the company benefits from a broad geographic
presence, a well-diversified customer base, and leading market
positions in food, beverage, and aerosol cans, and plastic
closures.  About 70% of the company's sales are generated outside
the U.S., with Europe accounting for most of Crown's international
sales.  The company enjoys good customer diversity with the top 10
customers representing 22% of sales.  Crown is the largest
producer of metal food cans and metal vacuum closures, and the
second largest producer of aerosol cans in the world and the
third-largest global producer of metal beverage cans.

Improved operating results in the first six months of 2004 over
the previous year reflect volume growth in beverage cans in the
U.S., Europe, and Asia, benefits of higher operating efficiencies,
and the favorable impact of foreign currency translation for non-
U.S. operations.  Because of price increases across many product
lines and continuing cost-reduction efforts, Crown's margins have
improved since 2001 to the low double-digit percentage area. Price
increases in the food can segment (being implemented in 2004), and
benefits from ongoing cost reductions should more than offset lost
earnings from divested operations and increased pension expenses,
and should further enhance its operating prospects in the
intermediate term.

Although the company has materially reduced its debt in the past
two years (using proceeds from asset sales, debt-for-equity
exchanges, and free cash flow), Crown remains heavily leveraged;
total debt (adjusted for capitalized operating leases and
receivables securitization) to EBITDA was about 5x for the 12
months ended June 30, 2004.  As a result, Crown's credit
protection measures are still weak for the rating. Nevertheless,
Standard & Poor's expects the strength of the company's business
and management's commitment to rein in spending will allow it to
continue its debt-reduction efforts.


CURATIVE: S&P Affirms Low-B Ratings & Says Outlook is Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
specialty infusion services and wound-care management provider
Curative Health Services Inc. to negative from stable.  At the
same time, Standard & Poor's affirmed its 'B' corporate credit
rating and its 'B-' senior unsecured debt rating on the company's
$185 million in senior unsecured notes due in 2011.

"The outlook revision reflects the large reduction in
reimbursement rates for blood-clotting factor products by the
state of California's Medi-Cal program," said Standard & Poor's
credit analyst Jesse Juliano.  The new rates for these products
are approximately equivalent to an average wholesale price minus
36%.  Standard & Poor's expected the new reimbursement rate to be
significantly higher.  For the second quarter of 2004, Medi-Cal
represented 18% of Curative's infusion sales.  The program's
contribution is expected to decline to 16% of infusion sales for
the entire year of 2004 and shrink even further in 2005 due to
this reduction in reimbursement.  Curative's financial profile
should be significantly weakened by this reduction, which will
likely eliminate any flexibility the company had within its rating
category.

The low, speculative-grade ratings reflect Curative's narrow
business focus in specialty infusion services, as well as the
potential margin pressure the company faces from payors and drug
manufacturers.  Furthermore, the company's payors are
concentrated.  Curative also faces integration risk after its
purchase of specialty infusion company Critical Care Systems,
Inc., as well as the threat of new entrants into the specialty
infusion market.  These concerns are only partially offset by the
company's relatively strong position in this growing and favorable
market and by the greater product diversity Critical Care has
provided.

Until 2001, Curative Health Services was focused on the management
of chronic wound care, and the company continues to provide these
services to hospital clients through 91 outpatient clinics in
about 30 states.  In 2001, however, the company shifted its focus
to specialty infusion, building a franchise with 11 acquisitions.  
Curative purchases biopharmaceutical products, which it then
provides to patients via retail pharmacies or overnight mail
directly to patients' homes.  Before the Critical Care
acquisition, Curative had about 300 payor contracts and 20 retail
pharmacy contracts.  Critical Care added a network of 28 company-
owned and operated pharmacy branches and about 150 payor
contracts.

Specialty infusion now accounts for about 90% of Curative's
revenues, while wound care represents the rest.  No single
commercial payor accounts for more than 4% of the company's
revenues after the acquisition.


DELTA AIR: Strongest Bankruptcy Language to Date in Form 10-Q
-------------------------------------------------------------
"If we cannot make substantial progress in the near term toward
achieving a competitive cost structure that will permit us to
regain sustained profitability and access the capital markets on
acceptable terms," Delta Air Lines, Inc., says in its quarterly
report filed with the Securities and Exchange Commission
yesterday, "we will need to seek to restructure our costs under
Chapter 11 of the U.S. Bankruptcy Code."

"If we are unsuccessful in reducing our operating expenses and
continue to experience significant losses, we will be unable to
maintain sufficient liquidity to provide for our operating needs,"
the third-largest carrier in the United States continued.   

Delta reported a $2 billion loss for the six months ended June 30,
2004.  Delta's June 30 balance sheet shows liabilities exceeding
assets by nearly $3 billion.  Delta's balance sheet shows more
than $24 billion in assets.  Ranked by assets, Delta would become
the eighth-largest bankruptcy in U.S. history if it filed for
chapter 11 protection today, and the second-largest airline
bankruptcy, behind UAL Corp., United Airlines' parent company.  

"Although we have made progress under our profit improvement
program, which has a goal of lowering our costs and increasing our
revenues," Delta says, "significant increases in aircraft fuel
prices and pension and related expense and declining yields have
offset a large portion of these benefits.  Accordingly, we have
now concluded that we will need substantial further reductions to
our cost structure in order to achieve viability. Furthermore, our
pilot cost structure is significantly higher than that of our
competitors and must be substantially reduced in order to compete
effectively with both hub-and-spoke airlines and low-cost
carriers. We believe that approximately $1 billion in annual pilot
cost savings, in addition to significant cost reductions from
other stakeholder groups, is essential for us to compete
successfully."

The Atlanta, Georgia-based carrier's common stock tumbled below $4
to an all-time low in trading yesterday -- one-tenth of what the
shares traded for immediately prior to September 11, 2001.   

During the six months ended June 30, 2004, Delta's financial
performance continued to deteriorate.  Delta says its suffered a
significant decline in domestic passenger mile yield, near
historically high aircraft fuel prices and other cost pressures.  
Cash and cash equivalents at June 30, 2004 were $2.0 billion, down
from $2.7 billion at December 31, 2003.  "These results are
unsustainable and underscore the urgent need to reduce our cost
structure," Delta said in the regulatory filing.

While revenue passenger miles, or traffic, rose 13% in the six
months ended June 30, 2004 compared to the corresponding period in
the prior year, passenger revenue increased only 10%, reflecting a
2% decrease in the domestic passenger mile yield on a year-over-
year basis.  The decrease in domestic passenger mile yield
reflects the permanent changes in the airline industry that have
occurred primarily due to the rapid and continuing growth of low-
cost carriers with which Delta competes in most of its domestic
markets.

Aircraft fuel prices also had a significant negative impact on
Delta's financial results for the six months ended June 30, 2004.  
These prices reached near historically high levels, as Delta's
average fuel price per gallon increased 22% to $1.00 (net of
hedging gains) for the six months ended June 30, 2004 compared to
the corresponding period in the prior year.  Delta projects that
its annual aircraft fuel expense will be approximately $680
million higher in 2004 than in 2003, with about 75% of this
increase caused by higher aircraft fuel prices.

"In light of our losses and the decline in our cash and cash
equivalents, we must make permanent structural changes in the near
term to appropriately align our cost structure with the depressed
level of revenue we can generate in this business environment,"
the carrier tells its stakeholders.  "Our cost structure is
materially higher than that of low-cost carriers.  Moreover, other
hub-and-spoke airlines, such as American Airlines, United Airlines
and US Airways, have significantly reduced their costs through
bankruptcy or the threat of bankruptcy.  As a result, our unit
costs have gone from being among the lowest of the hub-and-spoke
airlines to among the highest, a result that places us at a
serious competitive disadvantage.

"[W]e will need substantial further reductions to our cost
structure in order to achieve viability," Delta stresses.   

At the end of 2003, Delta began a strategic reassessment of its
business.  "The goal of this project is to develop and implement a
comprehensive and competitive business strategy that addresses the
airline industry environment and positions us to achieve long-term
sustained success," Delta relates.  "As part of this project, we
are now also evaluating the appropriate cost reduction targets and
the actions we should take to seek to achieve these targets.  
Because our cost reduction targets will be substantial, we believe
that our key stakeholder groups, including our lessors, vendors,
lenders and employees, must participate in the process if we are
to be successful," the Company reports.   

Noting that its pilot cost structure is significantly higher than
that of its competitors, Delta says those expenses must be reduced
in order for it to compete effectively with both hub-and-spoke
airlines and low-cost carriers.  On July 30, 2004, Delta presented
a proposal to the Air Line Pilots Association International
(ALPA), the union representing its pilots, to reduce pilot costs
by approximately $1 billion annually through a combination of
changes in wages, pension and other benefits and work rules.  "We
believe that this approximately $1 billion in annual pilot cost
savings, in addition to significant cost reductions from other
stakeholder groups, is essential for us to compete successfully,"
Delta says, cautioning that it cannot predict the outcome of these
discussions with ALPA.

Delta's unencumbered assets are limited, and during the June 2004
quarter and through August 5, 2004, the carrier's credit ratings
were lowered.  Delta's senior unsecured long-term debt is rated
Caa3 by Moody's Investor Service, Inc., CCC- by Standard & Poor's
Rating Services and CC by Fitch Ratings.  All three agencies have
stated that their ratings outlook for our senior unsecured debt is
negative.  Except for existing commitments to finance regional jet
aircraft purchases, Delta has no available lines of credit.   

"We believe that, unless we achieve significant reductions in our
cost structure, we will be unable to access the capital markets
for new borrowings on acceptable terms," Delta says.  "Continued
losses of the magnitude we recorded in 2003 and in the six months
ended June 30, 2004 are unsustainable, and we have significant
obligations due in 2005 and thereafter, including significant debt
maturities, operating lease payments, purchase obligations and
required pension funding.  We are intensively engaged in an effort
to identify and obtain cost reductions from our key stakeholders
and to implement new strategic business initiatives in order to
effect a successful out-of-court restructuring, but there can be
no assurance this effort will succeed.  If we cannot make
substantial progress in the near term toward achieving a
competitive cost structure that will permit us to regain sustained
profitability and access the capital markets on acceptable terms,
we will need to seek to restructure our costs under Chapter 11 of
the U.S. Bankruptcy Code."


DILLARD'S: Selling Credit Card Portfolio to GE Consumer Finance
---------------------------------------------------------------
Dillard's Inc. (NYSE: DDS) has entered into a definitive agreement
to sell substantially all the assets of Dillard National Bank, the
Company's private label credit card subsidiary, to GE Consumer
Finance for approximately $1.25 billion, which includes the
assumption of $400 million of securitization liabilities, the
purchase of owned accounts receivable and an undisclosed premium.
As part of the transaction, Dillard's and GE Consumer Finance will
also enter into a long-term marketing and servicing alliance with
an initial term of 10 years. The transaction has been approved by
both companies and is expected to close by the end of the current
fiscal year, subject to customary regulatory review and closing
conditions.

Dillard's expects to use net proceeds to reduce debt outstanding,
repurchase its common stock and for general corporate purposes.
Dillard's expects the transaction to be accretive to fiscal 2005
earnings per share.

                        Strategic Alliance

As part of the long-term marketing and servicing alliance, the two
companies signed a 10-year agreement for GE Consumer Finance to
provide a range of services, including marketing support and
customer care, to Dillard's proprietary cardholders. Dillard's and
GE Consumer Finance will share in the income generated by the
long-term marketing and servicing alliance. Depending upon the
performance of the alliance, Dillard's anticipates that income
generated could be comparable to the earnings currently generated
by Dillard National Bank.

Upon completion of the transaction, substantially all of the
approximately 500 employees of Dillard National Bank will become
employees of GE Consumer Finance.

Dillard's Chief Executive Officer William Dillard, II, stated, "We
are pleased to announce this agreement with GE Consumer Finance
today. Our new alliance with GE Consumer Finance will provide
Dillard's shoppers expanded financing options supported by
consistent, customer-friendly account servicing. Our commitment to
provide our customers with exciting fashion apparel and home
furnishing choices at Dillard's, complemented by excellence in
customer service, is further strengthened by this alliance. We are
particularly excited by the marketing expertise that GE Consumer
Finance will make available to us. We are proud to be associated
with GE Consumer Finance, a solid, established leader in consumer
finance, and look forward to many years of mutually beneficial
operations."

"We're absolutely thrilled to be partnering with a retailer as
well known and respected as Dillard's," said Mark W. Begor,
President and Chief Executive Officer, GE Consumer Finance-
Americas. "This new partnership opens up great opportunities to
offer more products, benefits and value to Dillard's customers and
to help drive Dillard's sales growth."

Morgan Stanley served as financial advisor to Dillard's on this
transaction.  Dillard's legal advisors in the transaction were
Simpson Thacher & Bartlett, LLP and Sidley Austin Brown & Wood,
LLP.

                         About Dillard's

Dillard's, Inc. is one of the nation's largest fashion apparel and
home furnishing retailers with annual revenues exceeding $7.8
billion. The Company's 329 stores operate with one name,
Dillard's, and span 29 states. Dillard's stores offer a broad
selection of merchandise, including products sourced and marketed
under Dillard's exclusive brand names.

Fifteen tranches of debt issued by Dillard's, Inc., and Dillard
Department Stores, according to data reported by the Bloomberg
Professional Service, carry low-B ratings from Moody's, Standard &
Poor's and Fitch.  

                     About GE Consumer Finance

GE Consumer Finance, a unit of General Electric Company, with $117
billion in assets, is a leading provider of credit services to
consumers, retailers and auto dealers in 40 countries. GE Consumer
Finance, based in Stamford, Conn., offers a range of financial
products, including private label credit cards, personal loans,
bank cards, auto loans and leases, mortgages, corporate travel and
purchasing cards, debt consolidation and home equity loans and
credit insurance. More information about GE Consumer Finance can
be found at http://www.geconsumerfinance.com/


ENERSYS CAPITAL: Moody's Upgrades Senior Implied Ratings to Ba3
---------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of EnerSys
Capital, Inc., a leading global manufacturer of industrial
batteries. The rating outlook is stable.

Ratings upgraded:

   -- $100 million senior secured revolver, due 2009, to Ba3 from
      B1;

   -- $360 million first-lien senior secured term loan, due 2011,
      to Ba3 from B1;

   -- Senior implied rating, to Ba3 from B1; and

   -- Senior unsecured issuer rating, to B2 from B3.

The rating upgrade reflects EnerSys' reduced financial leverage
following its recent $156 million initial public offering, as well
as its improving financial performance.  The rating action also
considers EnerSys' leading market position as the world's largest
industrial battery manufacturer, its successful integration of
Invensys' industrial battery business acquired in early 2002, and
the improved end-market condition.  Subsequent to the recent IPO,
the company has used approximately $140 million of the net
proceeds to pay off its second-lien term loan and to repay a
portion of the term loan B.  As a result, its pro forma debt for
March 2004 declined from $511 million to $373 million, or 3.3
times LTM EBITDA.  The debt reduction helps restore the financial
flexibility that was temporarily constrained when the company paid
out a $250 million cash dividend to its equity holders early this
year as part of a refinancing/recapitalization transaction.

On the other hand, the ratings also reflect the strong cyclicality
in EnerSys' major end-markets and the resultant volatility in its
financial performance, modest cash flow generation relative to its
debt level, and margin pressures due to escalating commodity
prices.

The stable rating outlook reflects Moody's expectation that the
improving market conditions could lead to higher revenue
performance over the next 18 months.  However, increasing
commodity prices, particularly those of lead, plastics and steel -
the three major raw materials used by EnerSys -- could erode
profit margins. In addition, free cash flow generation is expected
to be modest for fiscal year 2005 at about 4-5% of outstanding
debt.  This results from higher working capital investments to
support sales growth as well as cash charges related to its
remaining restructuring program.

EnerSys' liquidity position remains good, with positive although
modest free cash flow generation expected over the next twelve
months.  The $100 million revolver was undrawn at the end of March
2004, and the company is expected to be in compliance with its
bank covenants over the next twelve months.

The Ba3 ratings on the $100 million revolver and the $360 million
first-lien senior secured credit facility are at the same level as
the senior implied rating, reflecting the company's single-class
debt structure after the payoff of the $120 million second-lien
loan.  The senior credit facilities are secured by a first-lien on
all company assets and guaranteed on a senior secured basis by the
company's current and future domestic subsidiaries and its holding
company, EnerSys.

EnerSys, headquartered in Reading, Pennsylvania, is the world's
largest industrial battery manufacturer, with revenues of $969
million in fiscal year 2004 ended March 31, 2004.


ENRON: Asks Court to Nix Employee Claims Totaling $6.8 Million
--------------------------------------------------------------
As Enron and its debtor-affiliates continue to evaluate Proofs of
Claim filed by Employees, they've identified 204 objectionable
claims that are based on the claimant's purported status as an
owner of shares of Enron stock or owner of options to purchase
shares of Enron stock.

Melanie Gray, Esq., at Weil, Gotshal & Manges, LLP, in New York,
explains that the ownership of Enron stock or option to purchase
Enron stock constitutes equity interests in Enron, but does not
constitute "claims" against the Debtors' estates, as the term is
defined in Section 101(5) of the Bankruptcy Code.  Enron
shareholders were not required to file proofs of interest in
Enron's Chapter 11 cases.

Accordingly, the Debtors ask the Court to disallow and expunge
the 204 Employee Equity Claims in their entirety, including:

    Claimant                             Claim No.        Amount
    --------                             ---------        ------
    Andrew L. Unverzaut                   1515203       $258,189
    Bruce A. Martin                       1515803        564,487
    Christie Patrick                      1580206        237,940
    Carol J. Richard                      1153002        200,172
    Gregory L. Sharp                      1762700        632,370
    Kenneth W. Cline                      1846804        472,000
    P.E. Ilavia                           1239902      1,451,277
    Rick L. Kile                          2088602        223,870
    Sanjay Bhatnagar                      1858400      2,604,490
    Virgil Pfennig                         536501        202,524

Headquartered in Houston, Texas, Enron Corporation is in the midst
of restructuring various businesses for distribution as ongoing
companies to its creditors and liquidating its remaining
operations.  Before the company agreed to be acquired, controversy
over accounting procedures had caused Enron's stock price and
credit rating to drop sharply.  The Company filed for chapter 11
protection on December 2, 2001 (Bankr. S.D.N.Y. Case No.: 01-
16033) Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at
Weil, Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts. (Enron Bankruptcy News, Issue No. 120;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ENRON: Ex-EBS CEO Kenneth Rice Pleads Guilty to Securities Fraud
----------------------------------------------------------------
Deputy Attorney General James Comey, Assistant Attorney General
Christopher A. Wray of the Criminal Division, Enron Task Force
Director Andrew Weissmann, and Assistant Director Chris Swecker of
the Federal Bureau of Investigation said that Kenneth Rice, a
former Chief Executive Officer of Enron Broadband Services, a unit
of now-defunct Enron Corp., has pleaded guilty to securities
fraud.  As part of his plea agreement, Mr. Rice has agreed to
cooperate fully with the government's ongoing criminal
investigation into the collapse of Enron.

Mr. Rice, 45, of Houston, Texas, entered the guilty plea before
Judge Vanessa Gilmore at U.S. District Court in Houston, Texas.  
Mr. Rice pleaded guilty to one count of securities fraud, in
violation of 15 U.S.C. Sections 78j(b) and 78(ff) and 15 C.F.R.
Sections 240.10b-5 and 240.10b5-1.  Mr. Rice is the lead defendant
in an indictment pending before Judge Gilmore, which charged seven
former Enron executives with a range of criminal conduct arising
out of activities in EBS.  The case is scheduled for trial before
Judge Gilmore on October 4, 2004.

"July 30's guilty plea is another sign that our efforts to clean
up corruption in the boardroom have not stopped.  More
importantly, we have obtained an additional $14 million in ill-
gotten gains that will go back to the victims of the Enron fraud.
This plea ensures that Mr. Rice is held accountable for his
criminal conduct, advances the Enron investigations and
prosecutions, and serves to compensate those who were victimized,"
said Deputy Attorney General James Comey.

Mr. Rice faces a maximum sentence of 10 years in prison and a
fine of $1 million or twice the loss at his sentencing.  As part
of his plea, Mr. Rice has agreed to the forfeiture of
approximately $13.7 million to be used to compensate victims of
the Enron fraud.  Mr. Rice also agreed with the Securities and
Exchange Commission to pay an additional fine of $1 million.

The indictment and plea documents signed by Mr. Rice state that
while at EBS, Mr. Rice and others made a series of false
statements about the products, services and business performance
of EBS in order to mislead investors and others about the success
of the company and to inflate artificially the price of Enron
stock.  As part of his plea agreement, Mr. Rice admitted that
while serving as EBS's CEO, he conspired with others to portray
falsely the success of EBS to the investing public by, among other
things, making false statements about the company's development of
various software capabilities and its fiber-optic network,
including at analyst conferences in 2000 and 2001.  Mr. Rice
admitted that he and others falsely portrayed EBS as a commercial
and business success and falsely claimed that EBS had developed a
revolutionary network control software known as the "Broadband
Operating System" or "BOS" and that the BOS was "up and running"
on the EBS network.  In fact, as Mr. Rice admitted, the BOS
software had not progressed beyond the internal development
stage.  Mr. Rice also failed to disclose to the investing public
that the company stood to sustain operating losses in 2001 and
that it lacked a sustainable customer and commercial base.  These
misrepresentations contributed to a sharp rise in Enron's stock
price.

Enron, at one time the seventh-ranked company in the United States
with stock trading as high as $80 per share in August 1999, filed
for bankruptcy protection on Dec. 2, 2001 and its stock became
virtually worthless.

The investigation into Enron's collapse is being conducted by the
Enron Task Force, a team of federal prosecutors supervised by the
Justice Department's Criminal Division and agents from the FBI and
the IRS Criminal Investigative Division.  The Task Force has also
coordinated with and received considerable assistance from the
Securities and Exchange Commission.  The Enron Task Force is part
of President Bush's Corporate Fraud Task Force, created in July
2002 to investigate allegations of fraud and corruption in U.S.
corporations.

Thirty-one defendants have been charged in connection with the
work of the Enron Task Force, and with the plea, twelve defendants
have so far been convicted.  The total forfeiture funds seized to
date for victims is over $161 million.  The Task Force
investigation is continuing.

Headquartered in Houston, Texas, Enron Corporation is in the midst
of restructuring various businesses for distribution as ongoing
companies to its creditors and liquidating its remaining
operations.  Before the company agreed to be acquired, controversy
over accounting procedures had caused Enron's stock price and
credit rating to drop sharply.  The Company filed for chapter 11
protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033)
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts. (Enron Bankruptcy News, Issue No. 120;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


FLEMING COS.: Wants Court Nod on UFCW Local 789 Settlement Pact
---------------------------------------------------------------
United Food and Commercial Workers, Local 789 represents certain
former employees at the Debtors' various retail operations
throughout Minnesota.  Prior to the Petition Date, Fleming
Companies, Inc., and Local 789 entered into various collective
bargaining agreements that established the Parties' rights and
obligations with respect to the terms of employment of the former
employees that are members of a bargaining unit of Local 789.

Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub, PC, in Wilmington, Delaware, relates that the
Debtors sold or closed their operations in 13 locations, which
resulted in the Former Employees' unemployment or the purchaser
becoming their new employer.  The final closing or sale of the
Locations took place after the Petition Date.

Local 789 filed proofs of claim totaling $1,155,194 on behalf of
the Former Employees:

    -- $497,426 as administrative claims;
    -- $14,834 as priority claims; and
    -- $642,884 as general unsecured non-priority claims.

Ms. Jones notes that the Local 789 Claims are based on Fleming's
alleged breaches of the CBAs for failure to pay vacation and
holiday pay.  The damages asserted in the administrative claim
are, in part, redundant of the damages sought in Local 789's
prepetition claim.

According to Ms. Jones, the Former Employees also filed a total
of 65 proofs of claim for $217,942.  The Former Employees allege
that, among other things, the Debtors owe them wages, holiday
pay, sick day pay, severance pay, vacation pay and unpaid pension
and health and welfare benefits.  The Former Employee Claims are
comprised of:

    * $54,923 in administrative claims;
    * $142,843 in priority claims; and
    * $20,175 in general unsecured non-priority claims.

The Debtors dispute the factual and legal bases of the Local 789
Claims and the Former Employee Claims because:

    (a) many of the Former Employee Claims are redundant of the
        Local 789 Claims;

    (b) the Local 789 Claims are redundant of one another;

    (c) the Former Employee Claims and the Local 789 Claims
        generally overstate the amounts due; and

    (d) the Local 789 and Former Employee Claims overstate the
        administrative and other priority portions that should
        be allowed if the Former Employee Claims were allocated
        properly pursuant to the proration formula in In re Roth
        American, Inc., 975 F.2d 949, 957 (3rd Cir. 1992).

To settle the dispute, the parties agree that:

    (1) the Debtors will pay $265,651 in cash to the Former
        Employees and Local 789;

    (2) Local 789 agrees, on behalf of itself and the Former
        Employees, to accept the payment in full and complete
        satisfaction of the Administrative Portion and Priority
        Portions of the Former Employee Claims;

    (3) the Debtors will distribute to each of the Former
        Employees his or her share of the $256,651 cash as soon
        as possible;

    (4) the Debtors will allow as general unsecured non-priority
        claims the General Unsecured Portions of the Local 789
        Claim and the Former Employee Claims for $833,132, in the
        aggregate, to be distributed in conformity with the terms
        of the Plan;

    (5) the Debtors will release Local 789 from all claims and
        causes of action arising out or related to the CBAs
        between Local 789 and Fleming, except that any avoidance
        actions arising under Chapter 5 of the Bankruptcy Code
        and any retained causes of action set forth in Article
        XIII of the Plan will not be released;

    (6) Local 789 agrees to release the Debtors from any and all
        further liability arising out of or related to the CBAs
        except that Local 789 is not releasing any workers
        compensation claims or Civil Rights Claims; and

    (7) the Debtors will create a $5,000 reserve fund to cover any
        settlement payment amounts of the Administrative Portion
        or the Priority Portions that have been undercalculated.

Ms. Jones points out that the Settlement Agreement allows the
Debtors to avoid further litigation regarding the Local 789
Claims and the Former Employee Claims.  Ms. Jones assures the
Court that the settlement reflects a reasoned compromise of each
party's calculation of owed amounts.  In fact, Local 789 agreed
to reductions based on the Debtors' books and records and to the
allocation of the Claims.

Thus, the Debtors ask the Court to approve their Settlement
Agreement with Local 789.

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


FMAC LOAN: Bad Credit Performance Prompts Moody's Ratings Review
----------------------------------------------------------------
Moody's Investors Service has placed notes issued by FMAC Loan
Receivables Trust 1998-C on review for possible downgrade.  The
ratings action affects the A-2, B and C notes.  Moody's did not
rate the Class E and F notes, along with the certificates.  The
review action is due to the continued deterioration in credit
performance of the pool.  The complete ratings actions are as
follows:

                         Rating Action

Issuer: FMAC Loan Receivable Trust 1998-C

   -- $174,020,000 Class A-2 Notes, rated Baa2, on review for
      possible downgrade;

   -- $12,200,000 Class A-3 Notes, rated Ba2, on review for
      possible downgrade;

   -- $20,570,000 Class B Notes, rated Caa1, on review for
      possible downgrade;

   -- $20,570,000 Class C Notes, rated Ca, on review for possible
      downgrade.

As of the June 2004 distribution date, 27% of the pool by
principal balance was delinquent or defaulted.  The ratings review
will consider the resolution of these problem loans and future
defaults the deal may incur.

The notes were sold in a privately negotiated transaction without
registration under the Securities Act of 1933 (the Act) under
circumstances reasonably designed to preclude a distribution
thereof in violation of the Act.  The issuance has been designed
to permit resale under Rule 144A.


FT WILLIAMS: Hires Hamilton Gaskins as Bankruptcy Counsel
---------------------------------------------------------
FT Williams Company, Inc., sought and obtained approval from the
U.S. Bankruptcy Court for the Western District of Carolina to
employ Hamilton Gaskins Fay & Moon, PLLC, as its bankruptcy
counsel.  

Hamilton Gaskins is expected to:

    a) provide the Debtor advice on its powers and duties as
       debtor-in-possession in the continued operation of its  
       business and management of its properties;

    b) negotiate, prepare, and pursue confirmation of a chapter  
       11 plan and approval of a disclosure statement, and all
       related reorganization agreements and/or documents;

    c) prepare on behalf of the Debtor necessary applications,
       motions, answers, orders, reports, and other legal
       papers;

    d) appear in Court to protect the interests of the Debtor
       before the Court; and

    e) perform all other legal services for the Debtor which may   
       be necessary and proper in this chapter 11 proceeding.

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

Hamilton Gaskins professionals designated to represent the Debtor
in this case are:

            Professional               Hourly Rate
            ------------               -----------
            Travis W. Moon             $375
            T. Jonathan Adams          $250
            Kevin M. Profit            $205

Headquartered in Charlotte, North Carolina, FT Williams, is
principally in the business of commercial grading, clearing, and
excavation of construction sites.  The Company filed for Chapter
11 protection on July 27, 2004 (Bankr. W.D. NC. Case No.
04-32623).  When the Debtor filed for protection from its
creditors, it listed $10,000,001 in total assets and $12,703,065
in total debts.


GENCORP INC: Fitch Lowers Ratings & Says Outlook is Negative
------------------------------------------------------------
Fitch Ratings has lowered the ratings on GenCorp Inc.'s secured
bank facilities to 'BB-' from 'BB', senior subordinated notes to
'B+' from 'BB-', convertible subordinated notes to 'B-' from 'B',
and contingent convertible subordinated notes to 'B-' from 'B'.  
The Rating Outlook is Negative.  Approximately $600 million of
debt is affected by these actions.

The downgrades reflect the lower-than-expected proceeds
anticipated from the sale of the GDX Automotive segment, and the
deterioration in GenCorp's current and projected credit ratios.  
The low GDX sale price is the result of weak operating performance
in the past year, with poor visibility for improvement due to a
difficult automotive operating environment.  OEM pricing pressures
and increased material costs are among the factors pressuring the
results at GDX.

Other general rating concerns that continue to be incorporated in
the ratings include the company's currently weak free cash flow,
high debt levels, potential environmental liabilities, pending
lawsuits and arbitrations, and the effect the upcoming U.S.
elections could have on several of the company's defense and space
programs, including missile defense.  Factors, which continue to
support the ratings include GenCorp's substantial real estate
holdings, the overall defense spending environment, current
liquidity position, the tax shield that could be generated by the
proposed GDX transaction, fully funded pension plans, and the
recent dividend cut.

The Negative Rating Outlook is based on GenCorp's transformation
strategy, which contains several uncertain elements related to
reshaping the company's portfolio.  The Outlook and the ratings
incorporate the recently announced GDX Automotive transaction, as
well as other possible acquisitions and divestitures.  The
specific credit effect of these possible acquisitions and
divestitures will be evaluated on the basis of the terms, timing,
and strategic rationale of the transactions.

On July 19, GY signed a definitive agreement to sell GDX
Automotive for approximately $147 million, an amount substantially
lower than the amount previously incorporated into Fitch's ratings
of GenCorp.  The lower-than-expected price is partially mitigated
by the transaction's large capital loss, which can be used to
shield future capital gains.


GEORGIA GULF: Moody's Ba3 Rating Under Review for Possible Upgrade
------------------------------------------------------------------
Moody's placed the ratings of Georgia Gulf Corporation (Ba3 senior
implied) under review for possible upgrade due to the company's
improving financial profile and the anticipation of further
strengthening over the near-term.

Ratings placed under review for possible upgrade are as follows:

   Georgia Gulf Corporation

      Senior Implied -- Ba3

         * Guaranteed senior secured revolver due 2005,
           $120 million -- Ba3;

         * Guaranteed senior secured term loan D due 2010,
           $135 million -- Ba3;

         * Guaranteed secured notes due 2005, $100 million -- Ba3;

         * Guaranteed notes due 2013, $100 million -- B1

         * Issuer Rating -- B1

Moody's review will focus on Georgia Gulf's projected financial
metrics over the next several years, the prospect of additional
acquisitions and the extent to which further debt reduction will
strengthen the balance sheet.  More specifically, the review will
examine the company's plans to repay or refinance $100 million of
notes and its $120 million credit facility, which mature in
November 2005.  The review will also analyze the extent to which
further improvements in the supply and demand balance in Georgia
Gulf's major end-markets will impact margins in 2005.  
Furthermore, it will incorporate the potential impact of further
increases in chlorine and benzene prices, the expected increase in
ethylene and propylene prices, and the continuation of elevated
natural gas and energy prices.

Georgia Gulf Corporation, headquartered in Atlanta, Georgia
produces commodity chemicals including chlorovinyls (chlorine,
caustic soda, vinyl chloride monomer, and vinyl resins and
compounds) and aromatics (cumene, phenol and acetone). The company
generated revenues of $1.74 billion for the LTM ended June 30,
2004.


GRUPO TMM: 9-1/2% & 10-1/4% Noteholders Agree to Amend Indentures
-----------------------------------------------------------------
Grupo TMM, S.A.'s (NYSE:TMM)(BMV:TMM A) exchange offer and
consent solicitation for its 9-1/2% Notes due 2003 and its 10-1/4%
Senior Notes due 2006 expired at midnight, New York City time, on
August 5, 2004.

As of midnight on the expiration date, $170,618,000 aggregate
principal amount of the 2003 notes and $197,121,000 aggregate
principal amount of the 2006 notes had been properly tendered and
not withdrawn. All of the conditions to the exchange offer,
including receipt of tenders from holders of at least 95.3 percent
of the aggregate principal amount of 2003 notes and 97.3 percent
of aggregate principal amount of 2006 notes, were satisfied at the
expiration date, and the Company has accepted all of the tendered
2003 notes and 2006 notes for exchange.

The Company expects to issue its new Senior Secured Notes due 2007
in exchange for the tendered 2003 notes and 2006 notes on Tuesday,
August 10, 2004. As of the expiration date, the Company had also
received sufficient consents from holders of 2006 notes to effect
the proposed amendment to the indenture governing the 2006 notes
which will remove substantially all of the restrictive covenants
of such indenture. The Company will pay in cash the principal
amount of, plus accrued unpaid interest on, all of the 2003 notes
that were not tendered in the exchange offer and the accrued
unpaid interest on the 2006 that were not tendered in the exchange
offer.

Javier Segovia, president of TMM commented, "Today's economic
climate has made the restructuring of TMM challenging, but the
successful completion of the bond exchange at the levels we were
able to achieve allowed us to avoid bankruptcy proceedings and
will give TMM the financial flexibility needed to move forward
with a new strategy for increasing value and providing healthy
returns to our investors. This is truly a milestone for TMM, and
we would like to thank our advisors, the bondholders' committee
and their advisors, and most importantly, all of our clients and
employees for their continued support."

Headquartered in Mexico City, Grupo TMM is Latin America's largest
multimodal transportation company. Through its branch offices and
network of subsidiary companies, Grupo TMM provides a dynamic
combination of ocean and land transportation services. Grupo TMM
also has a significant interest in TFM, which operates Mexico's
Northeast railway and carries over 40% of the country's rail
cargo. Grupo TMM's web site address is http://www.grupotmm.com/
and TFM's web site is http://www.gtfm.com.mx/Grupo TMM is listed  
on the New York Stock Exchange under the symbol "TMM" and Mexico's
Bolsa Mexicana de Valores under the symbol "TMM A"

                          *   *   *  
  
                      Liquidity Position

In its Form 20-F for the fiscal year ended December 31, 2003,   
filed with the Securities and Exchange Commission, Grupo TMM, S.A.
reports:  
  
"At December 31, 2003, Grupo TMM (excluding TFM) had short-term   
debt with a face value of $379.0 million and long-term debt of   
$1.5 million. The 2003 notes matured on May 15, 2003 and we have   
not repaid the principal amount to date. As a result, we are in   
default under the terms of the 2003 notes, and such default has   
resulted in a cross-default under our 2006 notes. Moreover, we   
failed to make required interest payments on the 2006 notes on
May 15, 2003, November 15, 2003 and May 15, 2004, resulting in an   
independent default on such notes. On August 19, 2003, we amended   
and refinanced the outstanding amounts under the securitization   
facility to $54 million. The new certificates require monthly   
amortization of principal and interest and mature in three years,   
changing the maturity date from 2008 to 2006. On December 29,   
2003, we and certain subsidiaries amended the securitization   
facility to increase the outstanding amount under the   
securitization facility by approximately $25 million under   
substantially the same terms and conditions existing prior to
such increase. At December 29, 2003, and after giving effect to
the amendments, there was approximately $76.3 million in
aggregate principal amount of certificates outstanding under the   
securitization facility. On May 25, 2004, and on June 10, 2004,
we and certain subsidiaries amended the securitization facility
to adjust the net outstanding amount under the securitization   
facility to $78.2 million under the same terms and conditions   
existing prior to such adjustment. For accounting purposes, the   
securitization facility represents the total dollar amount of   
future services to be rendered to customers under the   
securitization facility and is so reflected in our financial   
statements."


HIGHWOODS: S&P Places Credit Ratings on CreditWatch Negative
------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Highwoods
Properties, Inc., and its affiliate, Highwoods Realty L.P., on
CreditWatch with negative implications.

The CreditWatch placements, which impacts roughly $460 million in
rated senior notes, a $250 million revolver, and $347 million of
preferred stock, follows the delayed release of second quarter
financial results and uncertainty regarding reference to an
abandoned strategic transaction.  Prior to these CreditWatch
placements, the outlook on the corporate credit rating was
negative due primarily to continued weakness in the company's core
markets and higher secured debt levels that have reduced financial
flexibility.

The company has delayed the release of its second quarter results
because it expects to restate previously reported financial
results for fiscal years 2001 through 2003, as well as for the
first quarter of 2004.  Management indicated that these
restatements focus on a number of previously executed real estate
sales transactions and the accounting presentation of discontinued
operations.  The likely result will be the consolidation of joint
ventures, which will now be considered financial arrangements
rather than dispositions.  Standard & Poor's has historically
fully consolidated these ventures for analytical purposes, and it
appears likely that the restatement will have a negligible impact
on earnings and cash flow for the impacted periods.

Recent general market trends have pointed to modestly improved
leasing velocity in some of Highwoods' more competitive
Southeastern office markets, and the company's recently revamped
management team appears to be prudently focusing on very
aggressively managing the core portfolio.  Highwoods' current
liquidity position is adequate and the company does not face a
material debt maturity until December 2005, at which time a
$120 million unsecured term loan matures.

However, until second quarter results are released, it remains
unclear whether the company's same store portfolio trends have
clearly turned the corner.  In addition, the company's secured
debt levels remain very close to Standard & Poor's notching
threshold (which requires differentiating between the corporate
credit and the unsecured debt rating), and the revelation that a
strategic transaction was being contemplated adds another element
of uncertainty to current ratings.

Standard & Poor's will review Highwoods' restated financials once
they are filed and meet with management to discuss expectations
for future secured debt levels as well as the potential for a
potential strategic transaction.  The range of likely outcomes
could include the affirmation of the corporate credit rating, but
a lowering of the unsecured rating is possible due to continued
higher secured debt levels.
    
             Ratings Placed On Creditwatch Negative
    
         Highwoods Properties Inc./Highwoods Realty L.P.

                                        Rating
                                To                From
                                --                ----
      Corporate credit rating   BBB-/Watch Neg    BBB-/Negative
      Senior unsecured notes    BBB-              BBB-
      Preferred stock           BB+               BB+


HOLLYWOOD ENT: S&P's B+ Corporate Credit Rating on Negative Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services' ratings for Hollywood
Entertainment Corporation, including the 'B+' corporate credit
rating, remain on CreditWatch with negative implications.  The
ratings were initially placed on CreditWatch March 29, 2004, when
Hollywood had announced it entered into a definitive merger
agreement to be acquired by an affiliate of Leonard Green &
Partners L.P. Wilsonville, Oregon-based Hollywood Entertainment
operates more than 1,900 Hollywood Video stores in 47 states and
approximately 600 Game Crazy video game specialty stores.

This CreditWatch update follows the announcement that Leonard
Green & Partners has informed Hollywood Entertainment that it
believes the financing condition to consummate the merger will not
be satisfied due to industry and market conditions.  Hollywood and
a special committee of its board of directors are currently
considering the company's alternatives to determine the course of
action that would be in the best interest of shareholders.  
Standard & Poor's will review any proposed transaction and its
impact on the company's credit quality.

"Hollywood's operating performance has been under pressure since
the second quarter of 2003 due to increased costs related to the
expansion of the Game Crazy business (video games) and a lack of
sales leverage in the video rental business," said Standard &
Poor's credit analyst Diane Shand.  "Profitability is expected to
remain under pressure in 2004 given the weakness in the overall
video rental industry and the company's continuing investments in
Game Crazy."  Hollywood is already leveraged, with total debt to
EBITDA of 4.2x before any additional transactions.


HORIZON NATURAL: Newcoal Can Credit Bid Claims at Aug. 17 Auction
-----------------------------------------------------------------
U.S. Bankruptcy Judge William Howard had approved the right of
the Newcoal investor group to bid the full amount of their Second
Lien bonds in lieu of cash in the auction for Horizon Natural
Resources to be held on August 17, 2004.  Newcoal was organized
under Wilbur L. Ross' leadership by the holders of a majority of
the $465 million principal amount of Second Lien notes of Horizon.
By the time of the hearing, holders of more than 90% of the issue
wrote letters in support of credit bidding.

Objections filed earlier by Deutsche Bank, AIG, Third Lien
Holders, and the Unsecured Creditors Committee were withdrawn by
the time of the hearing.  Mr. Ross added, "The judge's decision
assures that the Second Lien Holders will be treated fairly."

As reported in the Troubled Company Reporter's June 17, 2004,
edition, Horizon Natural Resources Company announced that the
United States Bankruptcy Court has approved procedures for
soliciting competing bids and conducting an auction for the sale
of a substantial portion of Horizon's assets in connection with
its proposed chapter 11 reorganization plan.

Pursuant to the asset purchase agreement filed with the Bankruptcy  
Court on June 2, 2004, Newcoal LLC, a company formed by Wilbur L.  
Ross and four other investors who collectively own a majority of  
Horizon's Second Tier Secured Notes, has agreed to acquire a  
significant portion of the operating assets of Horizon. The  
agreement includes a cash purchase price of up to $255 million,  
payment of up to $5 million of cure costs, a guarantee that  
proceeds of at least $17 million will be collected for certain  
accounts receivable and inventory that are not part of the  
purchased assets, and the assumption of certain liabilities.  
Newcoal LLC was approved as the stalking horse bidder by the  
Bankruptcy Court.

If approved by the Bankruptcy Court as the highest and best bidder  
after an auction, Mr. Ross will assume operational and management  
control of Newcoal LLC. The five investors will backstop an equity  
rights offering to all of Horizon's Second Tier Noteholders, and  
upon consummation Mr. Ross will own at least 10% of Newcoal LLC.  
His final ownership position will be determined by the extent to  
which other holders subscribe.

Headquartered in Ashland, Kentucky, Horizon Natural Resources
(f/k/a AEI Resources Holding, is one of the United States' largest
producers of steam (bituminous) coal.  The Company filed for
chapter 11 protection on February 28, 2002 (Bankr. E.D. Ky. Case
No. 02-14261).  Ronald E Gold, Esq. represent the Debtors in their
restructuring efforts. When the Company filed for protection from
their creditors, they listed at least $100 million in total assets
and $100 million in total debts.


INTERNATIONAL HI-TECH: Appoints Dan Hallman as U.S. Sales Director
------------------------------------------------------------------
International Hi-Tech Industries Inc. appointed Dan Hallman
Director of U.S. Sales.  Mr. Hallman has extensive sales and
marketing experience all over the United States.  He was president
and CEO of Affiliated Medical for 26 years. Previously, he was
national sales manager for Cordis Corporation.

The company has hired most of the professional team that will
handle building permits, sales, marketing and financing, for its
Greater Vancouver hi-rise project. For more information and latest
design updates, visit the website http://www.ihiskyline.com/

The Company has accepted three home orders, including one from an
area formerly devastated by fire and one for a show home from a
potential joint venture partner.  The Company is also proceeding
with a number of projects previously announced in various stages
of developments.  The Company continues to anticipate receiving an
order to establish an IHI JV-Factory prior to end of Q2 2005.

International Hi-Tech Industries Inc. is a company whose principal
business is the development and commercialization of a new
building system in Canada, and internationally through its
subsidiary, IHI International Holdings Ltd.  To date, IHI's system
has attracted interest from more than 65 different countries
worldwide.

The Company's March 31, 2004 consolidated financial statements
were prepared in accordance with Canadian generally accepted
accounting principles on a going concern basis, which contemplates
the realization of assets and the satisfaction of liabilities and
commitments in the normal course of business.   

The Company has incurred losses amounting to $37,586,627, which
includes a net loss for the current period of $1,056,892.  The
continuation of the Company is dependent upon the continuing
financial support of creditors and shareholders, refinancing debts
payable, obtaining additional long-term debt or equity financing,
as well as achieving and maintaining a profitable level of
operations.  The Company plans to raise additional equity and debt
capital as necessary to finance the operating and capital
requirements of the Company.  Amounts raised will be used to
provide financing for the development and commercialization of the
Company's business and for other working capital purposes.  While
the Company is expending its best efforts to achieve its plans,
there is no assurance that any such activity will generate
sufficient funds for operations.  These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.


INTERNATIONAL HI-TECH: COO Guarantees $4.5 Mil. Mortgage Financing
------------------------------------------------------------------
International Hi-Tech Industries Inc.'s Director and COO, Dr. Rene
G.A. Rached, P. Eng., will guarantee a first mortgage financing
for $4.5 million over the Company's Delta facility.  Subject to
the receipt of regulatory approval, a bonus of 4.7 million common
shares will be issued to one of his nominated companies.  The
finance and bonus replaced those announced by the company on April
30th 2002 and then abandoned in spite of receiving all the then
required approvals.

International Hi-Tech Industries Inc. is a company whose principal
business is the development and commercialization of a new
building system in Canada, and internationally through its
subsidiary, IHI International Holdings Ltd.  To date, IHI's system
has attracted interest from more than 65 different countries
worldwide.

The Company's March 31, 2004 consolidated financial statements
have been prepared in accordance with Canadian generally accepted
accounting principles on a going concern basis, which contemplates
the realization of assets and the satisfaction of liabilities and
commitments in the normal course of business.  The Company has
incurred losses amounting to $37,586,627, which includes a net
loss for the current period of $1,056,892.  The continuation of
the Company is dependent upon the continuing financial support of
creditors and shareholders, refinancing debts payable, obtaining
additional long-term debt or equity financing, as well as
achieving and maintaining a profitable level of operations.  The
Company plans to raise additional equity and debt capital as
necessary to finance the operating and capital requirements of the
Company.  Amounts raised will be used to provide financing for the
development and commercialization of the Company's business and
for other working capital purposes.  While the Company is
expending its best efforts to achieve its plans, there is no
assurance that any such activity will generate sufficient funds
for operations.  These conditions raise substantial doubt about
the Company's ability to continue as a going concern.


INTERNATIONAL HI-TECH: Gets More Patents & Develops New Products
----------------------------------------------------------------
International Hi-Tech Industries Inc. reports that European patent
number 1028207 has been issued.  Philippines patent numbers 1-
2001-00095, 1-2001-00096 and 1-1994-49539 have been issued.
Turkish patent number 28829 has been issued.  Slovenian patent
number 9420070 has been issued.  Additional patents have been
granted in Indonesia- ID 0005736 and ID 0005664.  Patents in India
and Croatia have been accepted.  Current patents encompass IHI's
earthquake, wind, fire and sound resistant pre-fabricated building
panels, as well as structures made from these panels, held under
license.  International Hi-Tech now has 72 patent claims fully
issued in 163 countries and pending in another 17 countries, with
respect to the building technology held by it under license.  The
Company and its international subsidiary are planning to file for
additional new sets of worldwide patents in 2005.

The Company filed for tax credits under the Federal Scientific
Research & Experimental Development -- SR&ED -- and Investment Tax
Credit (ITCs) programs with the assistance of a prominent
consulting firm.

More products have been developed to accommodate northern Canada's
booming oil industry by introducing new versions of our mobile
mats for, heavy duty applications, water tanks and septic tanks,
and most importantly, mobile staff offices and sleeping
accommodations of insulated concrete units of various sizes.

Since its priority commitment with our defaulted potential JV
partners for the kingdom of Saudi Arabia has expired, the Company
has been free to negotiate and accept projects anywhere in the
world.  Since the expiration, the Company has received interest
from dozens of potential customers to analyze their projects and
to give them rough budget panel estimates.  As a result, the
Company has received three irrevocable payments to prepare permit
drawings and to submit a final price.  After obtaining the
necessary building permits, the Company will proceed with the
manufacture of the required IHI panels for the specific project
quoted.  So far, these projects are small in nature and the
Company does not expect any material income.

In order to accommodate larger projects due to the fact that the
Fanuc defaulted system is occupying approximately 40% of the
production area of the Delta facility, which will remain preserved
until the trial is completed hopefully by end of first Quarter
2005, the Company is applying for required permits to expand the
production area of the facility to overcome the physical hindrance
of the Company's production due to the idle Fanuc system; Hence,
allowing the manufacturing of the IHI JV factories to be much
easier.

The Company has designed and developed a floating dock prototype
utilizing IHI's building technology.  Test results were according
to design.  Further fire tests were conducted according to US,
Canadian and European (specifically German and UK) Standards.  
Results were more than pleasing.

International Hi-Tech Industries Inc. is a company whose principal
business is the development and commercialization of a new
building system in Canada, and internationally through its
subsidiary, IHI International Holdings Ltd.  To date, IHI's system
has attracted interest from more than 65 different countries
worldwide.

The Company's March 31, 2004 consolidated financial statements
have been prepared in accordance with Canadian generally accepted
accounting principles on a going concern basis, which contemplates
the realization of assets and the satisfaction of liabilities and
commitments in the normal course of business.  The Company has
incurred losses amounting to $37,586,627, which includes a net
loss for the current period of $1,056,892.  The continuation of
the Company is dependent upon the continuing financial support of
creditors and shareholders, refinancing debts payable, obtaining
additional long-term debt or equity financing, as well as
achieving and maintaining a profitable level of operations.  The
Company plans to raise additional equity and debt capital as
necessary to finance the operating and capital requirements of the
Company.  Amounts raised will be used to provide financing for the
development and commercialization of the Company's business and
for other working capital purposes.  While the Company is
expending its best efforts to achieve its plans, there is no
assurance that any such activity will generate sufficient funds
for operations.  These conditions raise substantial doubt about
the Company's ability to continue as a going concern.


INTERNATIONAL WIRE: Confirmation Objections Due on August 12
------------------------------------------------------------
The United States Bankruptcy Court for the Southern District of
New York approved the Second Amended and Restated Disclosure
Statement explaining International Wire Group, Inc., and its
debtor-affiliates' Second Amended and Restated Joint
Reorganization Plan.  Objections to the Plan, if any, must be
filed no later than 4:00 p.m. Eastern Time on August 12, 2004, and
served on:

   (1) The Debtors:

       David J. Webster
       Chief Restructuring Officer
       101 South Hanley road, Suite 1075
       St. Louis, Missouri 63105
       
   (2) Attorneys for the Debtors:

       Allan B. Miller, Esq.
       Weil, Gotshal & Manges, LLP
       767 Fifth Avenue
       New York, New York 10153-0119
       
       Stephen A. Youngman, Esq.
       Weil, Gotshal & Manges, LLP
       200 Crescent Court, Suite 300
       Dallas, Texas 75201-6950
       
   (3) Office of the United States Trustee:

       Paul Schwartzberg, Esq.
       U.S. Trustee for the Southern District of New York
       33 Whitehall Street, 21st Floor
       New York, New York, 10004

   (4) Attorneys for the Debtors' Postpetition Lenders:

       Daniel V. Oshinsky, Esq.
       Robert Morfka, Esq.
       Schulte Roth & Zabel, LLP
       919 Third Avenue
       New York, New York 10022
       
   (5) Attorneys for the Creditors Committee

       Michael J. Sage, Esq.
       Kristopher M. Hansen, Esq.
       Stroock & Stroock & Lavan, LLP
       180 Maiden Lane
       New York, New York 10038-4982

Any confirmation objection, The Honorable Burton R. Lifland
directs, must:

   --  be in writing;

   -- state the name and address of the objecting party and the
      amount of its claims pr the nature of its interest; and

   -- must state, with particularity, all legal and factual bases
      for and the nature of the party's objection.

As previously reported in the Troubled Company Reporter, the
Debtors' Plan proposes to swap the company's existing
Subordinated Notes for $75,000,000 of New Notes and, subject to
option-related dilution, 96% of the New Common Stock in the
Reorganized Debtor.  

International Wire Group, Inc., designs, manufactures and markets
bare and tin-plated copper wire and insulated copper wire products
for other wire suppliers and original equipment manufacturers.  
The company filed for chapter 11 protection (Bankr. S.D.N.Y. Case
No. 04-11991) on March 24, 2004.  Alan B. Miller, Esq., at Weil,
Gotshal & Manges, LLP represents the debtor in its restructuring
efforts.  When the Company filed for bankruptcy protection, it
listed total assets of $393,000,000 and total debts of
$488,000,000.


KAISER ALUMINUM: Comalco Says $525 Million QAL Price is Too High
----------------------------------------------------------------
The Australian Financial Review reports that Comalco, Ltd., finds
the $525,000,000 price for Queensland Alumina, Ltd., too high.
Comalco owns 38.6% of QAL and has preemptive rights to buy
Kaiser's 20% stake.  For Comalco, building a new refinery would
be cheaper, according to a summary of the newspaper article
distributed by Bloomberg News.

As reported in the Troubled Company Reporter's July 7, 2004
edition, Daniel J. DeFranceschi, Esq., at Richards, Layton &
Finger, in Wilmington, Delaware, relates that QAL operates an
alumina refinery at Gladstone in Queensland that tolls bauxite,
supplied by the Participants, into alumina at a cost in proportion
to the Participants' ownership interests in QAL.  Kaiser Australia
and certain of the other Participants purchase the bauxite for  
processing at QAL from Comalco Limited pursuant to separate  
bauxite supply agreements.

Queensland Alumina Limited is a Queensland, Australia corporation
that operates as an independent production company.  The direct
shareholders in QAL are referred to as Participants and their
parent companies are referred to as Guarantors.  Kaiser Alumina
Australia Corporation, a wholly owned subsidiary of Kaiser  
Aluminum and Chemical Corporation, is a Participant in QAL and  
KACC is a Guarantor.

Mr. DeFranceschi notes that the Participants and the Guarantors,  
together with QAL, are parties to a Participants Agreement, dated  
as of July 31, 1964, and five separate tolling contracts under  
which each Participant is severally and conditionally obligated  
to take its share of alumina produced by QAL and pay, among other  
things, its proportionate share of the costs and expenses of  
QAL's operations.

KACC, Kaiser Aluminum International, Inc., and Kaiser Australia's  
interests in and related to QAL consist of:

   (a) 20% of the outstanding shares of QAL;

   (b) rights and obligations under the Participants Agreement,
       tolling contracts, and related agreements;

   (c) rights and obligations under all other agreements between
       or among the Participants, their parent corporations
       and others, as the case may be, with respect to financing
       for QAL, including related reimbursement of interest
       expenses and security arrangements;

   (d) rights and obligations under the bauxite supply agreements  
       relating to QAL;

   (e) interests in certain alumina and bauxite inventories; and
  
   (f) rights and obligations under certain alumina sales
       contracts with third parties.

               Comalco's Right of First Opportunity

On October 14, 1982, KACC, CRA Limited and Comalco entered into  
an Agreement Collateral to Share Purchase Agreement, pursuant to  
which Comalco is entitled to a right of first opportunity if at  
any time KACC wishes to sell or otherwise dispose of all or any  
part of the QAL Interests.

If KACC desires to sell all or any part of the QAL Interests, the  
Collateral Agreement provides, among other things, that these  
obligations and procedures will apply to each of KACC and  
Comalco, as applicable, to give effect to the RFO:

   (a) KACC is required to give notice in writing to Comalco of
       its intention to sell any QAL Interests indicating, to the
       extent possible, the terms and conditions on which it is
       willing to sell the QAL Interests to Comalco;
  
   (b) Within 30 days of receipt of the notice from KACC, Comalco  
       must give written notice to KACC stating either that:

        (i) it does not wish to acquire the QAL Interests; or

       (ii) it is interested in acquiring the QAL Interests and
            wishes to meet with KACC's authorized representatives
            to negotiate terms and conditions on which it would
            be willing to purchase the QAL Interests;

   (c) If within 60 days from the first meeting between KACC and
       Comalco representatives, the parties have not agreed on
       a basis for the sale of the QAL Interests, KACC must send
       a second notice to Comalco stipulating the price and other
       relevant terms and conditions on which it offers to sell
       the QAL Interests to Comalco; and

   (d) Comalco has 30 days from the receipt of the second notice
       to accept or reject KACC's offer.  If Comalco rejects the
       offer, KACC has 180 days in which to enter into a legally
       enforceable commitment to sell the QAL Interests on terms  
       and conditions no more favorable to the purchaser than the  
       terms offered to Comalco in the second notice.

                     Sale Process Overview

Since the Petition Date, the Debtors have been analyzing their
various assets to determine whether certain of those assets  
should be sold because, among other reasons, they are not  
necessary for the successful operation or reorganization of their  
businesses.  As a part of this analysis, the Debtors determined,  
with the support of the Official Committee of Unsecured  
Creditors, the Official Committee of Asbestos Claimants and  
Martin J. Murphy, the legal representative for future asbestos  
claimants, that it was appropriate to explore the value that  
could be recognized on a sale of certain of their commodities  
businesses, including the QAL Interests.

Headquartered in Houston, Texas, Kaiser Aluminum Corporation --
http://www.kaiseral.com/-- operates in all principal aspects of  
the aluminum industry, including mining bauxite; refining bauxite
into alumina; production of primary aluminum from alumina; and
manufacturing fabricated and semi-fabricated aluminum products.  
The Company filed for chapter 11 protection on February 12, 2002
(Bankr. Del. Case No. 02-10429).  Corinne Ball, Esq., at Jones,
Day, Reavis & Pogue, represent the Debtors in their restructuring
efforts. On September 30, 2001, the Company listed $3,364,300,000
in assets and $3,129,400,000 in debts. (Kaiser Bankruptcy News,
Issue No. 47; Bankruptcy Creditors' Service, Inc., 215/945-7000)  


LEASE INVESTMENT: Fitch Downgrades Four Classes to Low-B Ratings
----------------------------------------------------------------
Fitch Ratings has taken these rating actions for Lease Investment
Flight Trust -- LIFT -- aircraft securitization:

   -- Class A-1 notes are downgraded to 'BBB' from 'A';
   -- Class A-2 notes are downgraded to 'BBB' from 'A';
   -- Class A-3 notes are downgraded to 'BBB' from 'A';
   -- Class B-1 notes are downgraded to 'B-' from 'BBB';
   -- Class B-2 notes are downgraded to 'B-' from 'BBB';
   -- Class C-1 notes are downgraded to 'CCC' from 'BB';
   -- Class C-2 notes are downgraded to 'CCC' from 'BB';
   -- Class D-1 notes are downgraded to 'CC' from 'B';
   -- Class D-2 notes are downgraded to 'CC' from 'B'.

The downgrades reflect Fitch's concern that LIFT's lease cash
flows have continued to show weakness, and Fitch believes that
they are unlikely to show much rebound over the next few years.
Through the first six months ended June 2004, LIFT reported
collections net of expenses of $63.2 million down 13.9% from the
$73.4 million reported during the first six months ended
June 2003.  These continued weak results primarily reflect higher
expenses but also reflect continued weak lease rates.  The higher
expenses are due to increased maintenance and remarketing
expenses.  Although lease rates for many aircraft types have
stabilized, most remain weak compared with historical levels.

Beginning in November 2003, LIFT has been periodically utilizing
the cash reserves related to the class D notes.  The original
$11 million reserve has been drawn down to $6.9 million as of
June 30, 2004.  Fitch expects that by mid-year 2005, the class D
reserve will likely be depleted and LIFT will be unable to pay
interest on the class D notes.  Although the class C reserve has
not been utilized, Fitch does expect that this is likely sometime
early in 2005.  While LIFT's indenture does specify that any
failure to pay scheduled interest when due constitutes an event of
default, it does not provide for an acceleration of payment on the
notes.  Acceleration of payment on the notes only occurs when
interest on LIFT's most senior class is not paid when due.

LIFT's indenture also includes provisions that provide that the
amount of principal payable to the class A notes be increased if
the appraised value of LIFT's aircraft portfolio declines below
certain levels.  Based on the April 2004 appraisals, the class A
scheduled principal payments are required to be increased.  While
this could result in delays of scheduled principal payments to
other noteholders in the future, it is not having much effect
currently.  Because of LIFT's continued weak collections cash
flows and the location of scheduled class A principal at the back
of the payment waterfall, LIFT is currently unable to pay
scheduled class A principal.

LIFT is a Delaware business trust formed to conduct limited
activities, including the issuance of debt, and the buying,
owning, leasing, and selling of commercial jet aircraft. LIFT
originally issued $1.4 billion of rated notes in June 2001, while
as of June 2004, it had $1.3 billion of notes outstanding.  
Primary servicing on LIFT's 39 aircraft is being performed by GE
Capital Aviation Services, wholly owned by General Electric
Corporation, while the administrative agent role is being
performed by Phoenix American Financial Services, Inc.


LITFUNDING: Inks Non-Binding Letter of Intent for $2.5 Mil Funding
------------------------------------------------------------------
LitFunding Corp (OTC BB: LFDG) signed a non-binding Letter of
Intent with Pacific Dawn Capital, LLC, for a multi-stage
$2.5 million round of funding.  As proposed, Pacific Dawn will
either make a capital investment or make a loan to a limited
liability company formed together with LitFunding USA, the new
wholly owned operating subsidiary of LitFunding. Under the terms
of the agreement, the limited liability company will receive fees
for originating, servicing and managing investments made with
these funds.  After the return of capital invested to Pacific
Dawn, both the limited liability company and Pacific Dawn will
participate equally in the fees generated from the investments
made.

Dr. Morton Reed, Chairman and President announced that this new
source of capital so soon after LitFunding emerged from bankruptcy
clearly underscores the viability of LitFunding and announces that
the company is back in business and ready to resume it's pre-
eminent role as the primary source of capital to the plaintiff
attorney's market.  Additionally, LitFunding is proud to announce
that it intends to expand it's product line of non-recourse
advances to include a market driven need for full recourse lending
at lower interest rates than the fees currently charged.

Dr. Reed also announced that the company's intends to complete
it's move to a 6,600 sq foot facility in Las Vegas by October
2004.

LitFunding through it's wholly owned subsidiary LitFunding USA
remains one of the nations largest public company's specializing
in the funding of litigation primarily through plaintiff's
attorneys.  The Company is in the litigation funding business
making advances to plaintiff's attorney's primarily in the areas
of personal injury.  A fee is earned when the lawsuits so funded
are settled or otherwise concluded by a court ruling.  At that
time both the funds advanced and the fee contractually agreed to
are repaid to the company.  The company's new full recourse
program will charge lower interest rates than the current fees
charged on non-recourse advances and these loans will be
collateralized by both the attorney's underlying case load as well
as real property.

LitFunding filed for Chapter 11 protection on January 26, 2004
(Bankr. C.D. Calif. Case No. 04-11622).  Michael Marcelli, Esq.
represents the Debtors in its restructuring efforts.  When the
Debtor filed for protection from its creditors, it listed total  
assets of $10 million to $50 million and total debts of
$10 million to $50 million.


LORAL SPACE: Patrick Brant Succeeds Terry Hart as Skynet President
------------------------------------------------------------------
Loral Space & Communications named Patrick K. Brant president of
subsidiary Loral Skynet.  Mr. Brant succeeds Terry Hart.

Mr. Brant, 53, takes the helm at Loral Skynet as Loral prepares to
file a plan of reorganization that should allow it to emerge from
bankruptcy before the end of the year.  Loral Skynet owns and
operates a fleet of four telecommunications satellites that, in
combination with its established hybrid VSAT/fiber global network
infrastructure, provides secure, high-quality video broadcasting,
broadband data transmission, Internet services and other value-
added communications services to commercial and government
customers.

Mr. Brant served as an executive at Loral Cyberstar from 1999 to
2003, ultimately as its president and chief operating officer.  He
was a leading participant in Cyberstar's integration into Loral
Skynet in 2003.  His strong sales, marketing and business
development background includes senior management positions at
satellite companies, including Orbital Communications and American
Mobile Satellite Corporation.  Mr. Brant holds a Bachelor of
Science degree in Economics from the University of Maryland.

"Pat Brant's strong sales and marketing experience, knowledge of
the industry, and leadership capabilities will unquestionably
enhance our efforts to build out our international network of
satellite services," stated Bernard L. Schwartz, chairman and
chief executive officer of Loral.

Terry Hart, who served as president of Loral Skynet for seven
years, left the company to pursue a career in academia, a
longstanding objective.  "We are grateful to Terry Hart, under
whose leadership Loral Skynet grew from a one-satellite company in
1997 to an international satellite services company today. He has
our respect and admiration for staying the course through the
recent difficult time at Loral and in our industry," Mr. Schwartz
continued, "and we wish him well."

Loral Space & Communications is a satellite communications
company.  In addition to having Loral Skynet as its subsidiary,
Loral, through its Space Systems/Loral subsidiary is a world-class
leader in the design and manufacture of satellites and satellite
systems for commercial and government applications including
direct-to-home television, broadband communications, wireless
telephony, weather monitoring and air traffic management.

Loral Space & Communications and various affiliates filed for
chapter 11 protection (Bankr. S.D.N.Y. Case No. 03-41710) on July
15, 2003.  Stephen Karotkin, Esq., and Lori R. Fife, Esq., at
Weil, Gotshal & Manges LLP represent the Debtors in their
restructuring efforts.  When the company filed for bankruptcy, it
listed total assets of $2,654,000,000 and total debts of
$3,061,000,000.


LOYALTYPOINT: Ability to Continue as a Going Concern is in Doubt
----------------------------------------------------------------
LoyaltyPoint Inc. is a loyalty marketing company focused on
nontraditional fundraising for schools and charitable
organizations.

As shown in the Company's consolidated financial statements, the
Company has yet to achieve profitability and has accumulated a
deficit of approximately $11,000,000 since inception.

Additionally, the Company has generated negative cash flow from
operating activities of approximately $386,000 for the first
quarter ended March 31, 2004, and at March 31, 2004 has a working
capital deficit of approximately $4,358,000 and a stockholder's
deficiency of approximately $1,712,000.

In order to sustain its operating activities, the Company has been
successful in raising $3,297,351 from financing activities since
inception, which was also used to finance its acquisitions of
other businesses. However, past successes in raising capital is
not indicative of future results, and there can be no assurance
that the Company can be successful in raising sufficient capital
in order to meet its future operating needs.

The Company is currently seeking to raise $3,000,000 in additional
capital from an existing stockholder and has recently signed a
non-binding letter of intent. Because it is uncertain whether the
Company will be successful in raising the necessary capital, there
is substantial doubt of the Company's ability to continue as a
going concern.

The Company anticipates that it will continue to generate
insufficient cash flow from operations to meet operating capital
needs, until at least the fourth quarter of 2004. With the
existing operations today, management believes that existing cash
will be sufficient to fund the negative operating cash flow over
the next two fiscal quarters. Additional capital resources may be
required to fund negative operating cash flow in future periods
beyond the third quarter of 2004, and the Company gives no
assurances that it will be able to obtain adequate capital
resources on acceptable terms and conditions.

In order to meet working capital needs, LoyaltyPoint entered into
a term sheet with a venture capital firm that agreed to invest a
minimum of $3,000,000 in exchange for convertible preferred stock,
subject to certain conditions. Three key conditions are:

   (1) the investor's review of FUNDever's (a Company subsidiary)
       audited financial statements for the year ended December
       31, 2003,

   (2) LoyaltyPoint's obtaining authorization from its
       stockholders to increase its authorized capital to permit
       the investor to be able to convert its preferred stock into
       common stock and

   (3) LoyaltyPoint entering into a long-term agreement with
       American Express Incentive Services, LLC which accounts for
       a large majority of the scrip revenue from the NSC assets
       LoyaltyPoint purchased. In this regard, please note the
       following:

        (i) The audited financial statements are in process of
            being completed;

       (ii) While management believes the Company has the
            necessary approval from the Company's majority
            stockholders to amend its certificate of incorporation
            and increase its authorized capital, that step cannot
            be taken until the Company can send its stockholders
            the financial information required under the rules of
            the SEC. With the filing of its Form 10-QSB, the
            Company expected to file the Information Statement
            with the SEC within a few days. LoyaltyPoint cannot
            amend its Certificate of Incorporation for at least 30
            days thereafter; and

       (iv) The Company has reached an oral agreement with AEIS,
            which continues the Company exclusivity and which
            requires it to issue 5,000,000 shares of common stock
            and 3,000,000 warrants, exercisable above current fair
            market value, and pay $1,500,000 over five years,
            including $250,000 when the Company signs the
            definitive agreement.

Under this term sheet, the preferred stock is convertible into
approximately 23,000,000 shares of common stock; in
addition LoyaltyPoint agreed to issue the investor 4,500,000
warrants exercisable above current fair market value.

The Company is currently negotiating definitive agreements with
the venture capital investor and AEIS. There can be no assurances
that it will close each transaction on the terms agreed upon or at
all. The Company was targeting to close each transaction by August
1, 2004. If unsuccessful in closing the minimum $3,000,000
funding, the Company will make other efforts to obtain the
necessary working capital. If the Company is unsuccessful in
reaching an exclusive agreement with AEIS, the resulting loss of
revenue could have a material negative impact on the Company's
anticipated revenue and operating cash flow, dependent upon
whether it can continue selling the cards without an exclusive
agreement, or whether AEIS cancels the program entirely.

LoyaltyPoint Inc. is a loyalty marketing company focused on
nontraditional fundraising for schools and charitable
organizations. A consumer shopping online or using prepaid
merchant gift cards (scrip) generate revenues for the Company, a
portion of which are paid to participating schools and charitable
organizations.


LUCKY LUCK FARMS: Case Summary & 16 Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: Lucky Luck Farms, LLC
             3453 Southfork Road
             Cody, Wyoming 82414

Bankruptcy Case No.: 04-21512

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      D3X, Inc.                                  04-21513

Type of Business: The Debtor is engaged in agriculture industry.

Chapter 11 Petition Date: August 4, 2004

Court: District of Wyoming (Cheyenne)

Judge: Peter J. McNiff

Debtors' Counsel: Ronald P. Jurovich, Esq.
                  Messenger & Jurovich, P.C.
                  P.O. Box 550
                  Thermopolis, WY 82443
                  Tel: 307-864-5596

                             Total Assets    Total Debts
                             ------------    -----------
Lucky Luck Farms, LLC          $1,318,025     $3,532,516
D3X, Inc.                      $5,000,000     $3,500,000

Debtor's 16 Largest Unsecured Creditors:

Entity                                 Claim Amount
------                                 ------------
First National Bank & Trust              $2,200,000
P.O. Box 907
245 East First
Powell, NY 824335

Powell Equipment                            $13,143

Powell Valley Oil                            $7,654

Internal Revenue Service                     $3,729

Internal Revenue Service                     $2,285

Big Horn Cooperative Marketing Assn.         $1,705

Superior Machine Co.                         $1,254

NAPA Auto Parts                                $649

Internal Revenue Service                       $628

Woodward Tractor                               $373

Butane Power & Equipment Co.                   $334

Big Valley Irrigation                          $210

WY Workers Safety and Compensation             $187
Division

Cody Large Animal                              $150

Cody Animal Health                             $131

McIntosh Oil                                    $84


MAGELLAN AEROSPACE: Posts $33.3 Million Half-Year Net Loss
----------------------------------------------------------
Magellan Aerospace Corporation (TSX: MAL) reported its 2004 second
quarter results.  Revenues for the three months ended June 30,
2004 were $157.8 million, an increase of $36.8 million or 30.4%
from the same period one year ago.  Revenues for the year-to-date
period ending June 30, 2004 were $293.8 million, an increase of
$54.7 million or 22.9% from the previous year.  Approximately two-
thirds of the increase in revenues, being $26.4 million, is due to
the inclusion of Magellan's business in the United Kingdom,
acquired in October 2003, and the balance from new contracts, such
as the GE 414 Aircraft Engine Revenue Sharing Agreement as well as
increased shipments from higher activity levels at its North
American operations.

Gross profit is $15.3 million (9.7% of revenues) for the second
quarter of 2003 compared to $16.8 million (13.9% of revenues)
during the same period in 2003.  Gross profit was negatively
affected by an increase in new program shipments, which are
experiencing low margins in the early stages, and operating
inefficiencies associated with ramp-up to increased volumes.  
Gross profits were also impacted by foreign exchange rates; even
though Magellan has hedged a significant portion of its cash
flows, current year hedging levels are less advantageous compared
to those from one year ago.  Cost reduction efforts are continuing
to occur in order to remain competitive in the prevailing exchange
rate environment.

Due to the stronger Canadian dollar in 2004 compared to 2003,
revenues in the second quarter of 2004 were lower by approximately
$2.7 million compared to the second quarter of 2003, had the
exchange rate been the same in both periods.  Cost of sales is
correspondingly lower as well, but the exchange impact is somewhat
more diluted, as the cost of Canadian based inventories expensed
in the quarter will have been purchased at different rates in the
inventory turn cycle.  In addition, certain production costs are
denominated in Canadian dollars, and therefore the strengthening
of the Canadian dollar versus the US dollar has no effect on these
costs.  In the second quarter of 2004, the Corporation realized a
benefit of $0.8 million from its hedging activities to offset the
negative impact of foreign exchange rate changes on gross margin.  
In the corresponding quarter in 2003 the gain realized from
hedging was $1.7 million, which was recorded as an addition to
gross margin in that period.

Administrative and general expenses were $14.1 million in the
second quarter of 2004, an increase of $7.3 million from the same
period last year.  Included in administrative and general expenses
for the three months ended June 30, 2004, is a foreign exchange
loss of $3.3 million, which arose on translation of the
Corporation's US dollar denominated debt as the Canadian dollar
weakened compared to the US dollar during the quarter.  In the
corresponding period in 2003, there was a foreign exchange gain of
$3.6 million due to the translation of the US dollar debt, as the
Canadian dollar had strengthened in that period. Excluding the
impact of foreign exchange, administrative and general expenses
were $10.8 million or 6.7% of revenues in the second quarter of
2004, compared to $10.4 or 7.4% in the second quarter of 2003.

Interest expense increased to $3.9 million in the three months
ended June 30, 2004, up from $2.9 million in the same period last
year.  Interest expense is higher due to additional debt levels
associated with higher working capital balances outstanding during
the quarter.  Interest expense includes an amount of $0.2 million,
which represents discounts on the sale of receivables.

Recovery of income tax was $1.0 million in the second quarter of
2004, resulting in an effective tax rate of 35.3%, compared to a
provision from income tax of $2.6 million in the second quarter of
2003, for an effective rate of 36.3%.  The blended income tax rate
has declined year over year primarily due to lower income tax
rates in the United Kingdom where the corporation had operations
in 2004, but no operations in the corresponding period in 2003.

There was a net loss for the quarter ended June 30, 2004 of
$1.7 million, compared to net income of $4.6 million for the same
period in 2003.  For the year to date in 2004, net income is $0.9
million, compared to a net loss of $14.5 million in the year to
date period in 2003.

The year to date loss in 2003 contained a pre tax provision of
$33.3 million related to the closure of facilities in Fort Erie.
The most recent review of the closure provision indicates that it
remains sufficient to cover all anticipated closure costs. The
earnings per share calculations contain charges related to the
convertible debenture of $1.3 million for the second quarter of
2004 and $2.6 million for 2004 year-to-date.

                Liquidity and Capital Resources

During the second quarter of 2004 the Corporation used
$2.7 million of cash in operations, as non-cash working capital
balances increased by $5.7 million.  The growth in working capital
includes increases in inventory of $17.5 million, offset by
decreases in accounts receivable of $10.6 million and increases in
accounts payable of $3.1 million.  Inventory increased as the
Corporation built ahead of customer delivery schedules to ensure
continued deliveries during traditional summer maintenance
shutdowns in July and August at several divisional locations.
Inventory also increased during the second quarter due to the
additional work in the United Kingdom and increased demand for
products in North America.  Accounts receivable decreased, as
additional receivables were sold under securitization
arrangements.

During the second quarter, the Corporation sold certain
receivables under securitization arrangements with third parties.
In the second quarter, the Corporation sold a total of
$33.0 million of receivables.  A discount of $0.2 million relating
to these sales reflecting an annualized discount rate of 2.5% has
been recorded as interest expense in the second quarter.

In the quarter ended June 30, 2004, the Corporation invested
$12.2 million in capital expenditures to modernize current
facilities and enhance its capabilities.  Included in this amount
was $7.1 million related to the modernization and facilitation to
support additional business awarded in the United Kingdom.  For
the year-to-date, the Corporation has made $14.5 million of
capital acquisitions.

The Corporation was not in compliance with certain of its bank
financial covenants at the end of the second quarter of 2004. As a
result, the Corporation obtained a waiver of these financial
covenants as of June 30, 2004, and received an amendment of its
financial covenants for the quarter ending September 30, 2004.  In
addition, Magellan committed to raise additional capital through
the issuance of equity and committed to refinance its long-term
debt. Magellan expects to be in compliance with all of its
existing bank covenants, as amended, at all times during the
upcoming twelve months.

                          Risk Factors

The majority of the Corporation's revenues and operating income is
derived from the aviation industry.  The Corporation's aerospace
operations are focused on engineering and manufacturing aircraft
components on new aircraft, selling spare parts and performing
repair and overhaul services on existing aircraft components.  
Therefore, the Corporation's business is directly affected by
economic factors and other trends that affect the Corporation's
customers in the aerospace industry.  Economic and other factors,
both internal to the aviation industry or general economic factors
that might affect the aerospace industry may have an adverse
impact on the Corporation's results from operations.

In addition, growth in the demand for products manufactured by the
Corporation has resulted in an increased requirement for working
capital.  The Corporation needs to access the capital markets to
fund this growth.  There is no assurance that the Corporation will
be able to raise additional capital required on financial terms
acceptable to it.

                      Recent Developments

On May 6, 2004 the Corporation announced the signing of a new
supply agreement with Airbus UK, which represents additional work
valued at approximately $24.0 million annually, across the full
range of Airbus products with significant content on the Airbus
A380.  The work consists of complex machining of aluminium and
hard metal alloys.  Magellan has also secured additional equipment
and facilities to accommodate the expanded workload and
anticipated volume increases as the demand for Airbus aircraft
grows.  This additional capacity is located adjacent to existing
Magellan facilities in the United Kingdom, and will provide an
opportunity to rationalize the increased workload across all
divisions, reduce overhead costs and absorb the cost reduction
demands that are now a feature of aerospace lean manufacturing.
Along with the Airbus work, the Corporation has secured additional
work from AgustaWestand and the GKN Group, representing an
additional $9.0 million to $12.0 million of annual revenue.

A new opportunity for growth was made available to the Corporation
as the first co-generation gas turbine was delivered during the
quarter to a customer in London, Ontario.  This unit will be the
prototype installation for the production of electricity and steam
from biofuel and presents a growth opportunity given the
increasing demands for power in the Ontario marketplace and
elsewhere.

Magellan also announced at the Farnborough Air Show, an agreement
with agencies in China and India, to develop suppliers in those
two countries to expand Magellan's global supplier network.  Major
customers are increasingly interested in dealing with suppliers
with strong global sourcing systems to enhance value, and to
provide economic benefits to those areas where their products will
be sold.

                            Summary

The worldwide aerospace industry continues to strengthen. In spite
of high fuel costs, major airlines have been experiencing higher
load factors for both freight and passenger traffic.  While
profits have not recovered at the major US airlines, low-cost
carriers continue to flourish both in North America and Europe and
Asian airlines are also profitable.  Both Boeing and Airbus have
recently updated delivery schedules for 2005 and 2006 showing
increases in rates in the single aisle aircraft models.  As
Magellan has good exposure to these models, business activity is
expected to increase to meet the increased demand for components.
Delivery schedules for twin-aisle aircraft have remained steady.
There are also signs of a recovery in the power generation sector
increasing the opportunities for component manufacturing and small
co-generation power units.  

Magellan Aerospace Corporation is a diversified supplier of
components to the aerospace industry, and, through its network of
facilities throughout North America and the United Kingdom,
supplies leading aircraft manufacturers, airlines and defence
agencies throughout the world.


MAXTOR CORP: Weak Operating Results Prompt Moody's Stable Outlook
-----------------------------------------------------------------
Moody's Investors Service changed the rating outlook for Maxtor
Corporation to stable from positive following the company's
recently announced, weaker than expected second quarter (June)
operating results.  The company's materially narrowed gross
margin, second consecutive quarter of negative operating cash flow
generation and somber expectations for improvement in coming
quarters have negated the optimistic circumstances that supported
the rating agency's May 2003 outlook upgrade to positive from
negative.  While the company's solid liquidity position remains
the cornerstone to its current B2 rating, ongoing competitive
pricing pressures and near term concerns relating to company
specific dynamics will be closely monitored during the next few
quarters. However at this time, Moody's affirms the following
rating profile:

      (i) B2 rating on Maxtor Corporation's $230 million
          convertible senior notes, due 2010;

     (ii) Caa1 rating on Maxtor Corporation's $60 million 5-3/4%
          convertible subordinated debentures, due 2012;

    (iii) B2 senior implied rating; and

     (iv) B2 senior unsecured issuer rating.

The rating affirmation reflects the company's modest total
leverage (total debt to trailing twelve month recurring EBITDA of
approximately 1.5x), its significant liquidity position
(unrestricted cash & marketable securities totaled approximately
$450 million as of June 30, 2004) and the possibility for an
operating performance recovery in the near term resulting from
numerous corporate actions currently underway as well as to be
initiated during the remainder of 2004.  Specifically, Moody's
anticipates modestly improved results, particularly during the
fourth quarter and into the first half of 2005 as a result of the
following company developments:

      (i) sustaining market leadership position and highly
          profitable sales generation within the consumer
          electronic HDD segment;

     (ii) securing a moderately reduced manufacturing cost base
          through the transitioning of existing third party (MKE)
          enterprise HDD sourcing to company-owned Singapore
          facilities and desktop HDD operations to a newly
          constructed China facility;

    (iii) re-qualification and returning to historical supply
          volume levels in a timely fashion with a leading OEM;
          and

     (iv) realizing reduced operating expense from the announced
          450 employee headcount reduction (expected to generate
         $15 million quarterly cost savings).

Further, Moody's is optimistic that the company will leverage its
leading HDD industry position into securing a formidable mobile
marketplace toehold, a segment, which it expects to enter at some
point during the next several quarters. Finally, while the company
is expected to continue generating moderately negative free cash
flow into the foreseeable future, on-hand liquidity will remain
more than sufficient to fund this shortfall as well as to service
the existing capital structure and very modest near term debt
maturities.

At the present time, the company's B2 rating incorporates numerous
company specific and industry wide risks.  Most prominently, it
reflects the significant pricing pressure confronting the industry
on whole and the company in particular since the end of 2003.
While there remains significant potential for further
disappointment in terms of end market pricing levels, resulting
profitability and cash flow pressures are not expected to produce
a serious strain on the company's current formidable liquidity
position.  In addition, the rating accounts for execution
uncertainties associated with the company's announced strategic
shifts (i.e., facilities' transition, leading OEM requalification
and restructuring).  While it is essential that the company
restore rating agency and capital markets' confidence in the
merits of its business model, for the time being these
uncertainties are incorporated within the company's existing B2
rating.

The company's convertible senior notes rating, at the same B2
level as the senior implied rating, accounts for these securities
being issued by Maxtor Corporation, the sole legal entity
representing 100% of domestic operations.  While this unsecured
senior debt is structurally subordinate to existing indebtedness
incurred by foreign operations, currently consisting of a
$30.8 million economic development board loan, $30 million
manufacturing facility construction loan (incremental term loans
will result in a peak balance of $63 million) and trade creditor
obligations, there currently exists sufficiently adequate domestic
asset coverage (excluding mortgage pledged assets and assuming
only moderate utilization of the $100 million receivables
facility) to support this rating level.  However, should Maxtor
Corporation seek to replace significant additional amounts of
unsecured senior debt with senior secured debt or assume
guarantees in support of significant additional amounts of foreign
subsidiary debt, the notes' B2 rating could be notched downward.

The stable rating outlook signals that the company's existing
rating profile is appropriate, incorporating all of the pressures
on its business model.  Nonetheless, Moody's will closely monitor
the company's near term operating results as there remains
potential for further disappointment, either in terms of continued
irrational industry pricing behavior, heightened competitive
pressure from new entrants within the consumer electronics and
mobile segments or execution issues in implementing the
manufacturing transition strategies.  This rating outlook could be
lowered to negative over the near to intermediate term, resulting
from adverse developments involving some combination of the
aforementioned concerns.  Conversely, if these developments
meet/exceed management expectation and resulting operating
performance returns to 15-18% gross margins, core profitability
and positive operational as well as free cash flow generation that
underscored the May 2003 outlook upgrade, this may again place
upwards pressure on the company's rating profile.

As of March 31, 2004, Maxtor possessed approximately $400 million
of long term debt (excludes $50 million funded under the company's
receivable facility during Q2), translating into trailing twelve
months Total Debt/Adj. EBITDA of approximately 1.5x. Nonetheless,
incorporating the various business model & market challenges
expected during the next twelve months period, Moody's expects
Adj. EBITDA (excludes non-recurring charges associated with the
recently announced restructuring) to decline to the $60 - $80
million level, with the potential for stronger results dependent
on a more rational pricing environment, greater than expected
penetration into the mobile marketplace, increasing profitability
from its enterprise HDD operations and greater cost reduction
efficiencies captured from the previously announced manufacturing
transitions.  Notwithstanding such upside potential, the projected
Total Debt/Adj. EBITDA will increase to the 5.0-6.0x area during
the next twelve months.  Somewhat lessening these near term
operating performance challenges, the resulting cash flow burn is
not expected to reduce the unrestricted cash & marketable
securities balance below the $325 million area, with supplemental
liquidity still available in the form of unutilized capacity under
the company's recently secured $100 million receivables facility
(subject to financial covenant compliance).  At the same time, the
company also faces scant debt repayment requirements during the
2004-2005 period.

Maxtor Corporation, headquartered in Milpitas, California, is a
leading provider of hard disk drives and related storage solutions
for desktop computers, high-performance Intel-based servers, near-
line storage systems and consumer electronics.


MILLER DIVERSIFIED: Sale to Miller Feed Lots Still Pending
----------------------------------------------------------
On August 31, 2003, Miller Diversified Corporation's working
capital was a minus $141,948 compared to a positive $21,700 at
August 31, 2002, a decrease of $163,648. This decrease is
attributable in part to the loss in cattle being sold and the
reduction in equity in company cattle in inventory.

Current assets of $3,182,358 at August 31, 2003 decreased $503,204
over the prior year, or 14%. This is primarily attributable to the
$810,841 decrease in inventory. Trade and cattle-financing
receivables increased $801,163 due to the increased number of
cattle on the investor line and the number of related-party cattle
being fed. Current liabilities decreased by $339,556 (9%) to
$3,324,306. This decrease relates primarily to the reduction of
accounts payable for company cattle on feed.

The Company's line of credit which financed the feeding of
Company-owned cattle was not renewed in January 2003.
Between January and August, the remaining Company-owned cattle
were completed and sold.  During this time, management developed a
plan to sell substantially all of the assets of the Company to
Miller Feed Lots, Inc. (MFL), a related party.  On October 31,
2003, the Company's shareholders approved the sale.  The agreement
also provides for cancellation of the lease agreement for
the feedlot facility in exchange for paying a cancellation fee
of $250,000 to MFL.  The assets sold, valued at $3,433,268, less
the $2,795,946 in liabilities assumed by MFL and the lease
cancellation fee resulted in a net receivable from MFL of
$387,322.  The receivable is to be collected in $100,000 annual
installments.  In connection with this sale, the Company
recognized a loss of $364,466, which includes the $250,000
lease cancellation fee.

After this transaction, the Company will effectively be a shell
company with no active operating activities. Management believes
there is a market for public shell companies and intends to sell
the Company.

Miller Diversified Corporation is a publicly held Nevada
corporation that was formed in 1987 as the result of several
transactions and mergers of predecessor companies. In 1987, the
Company acquired the commercial cattle feeding business and some
farms of Miller Feed Lots, Inc. (MFL), a related entity. The farms
were subsequently sold, and the Company's principal business was
still commercial cattle feeding that was operated on a feedlot
facility and with equipment leased or rented from MFL. The Company
has a wholly owned subsidiary, Miller Feeders, Inc. (MFI) which
was acquired in 1987. MFI is a cattle brokerage company that earns
commissions from the purchasing of feeder cattle and selling
finished cattle for the Company's cattle feeding customers, and
for brokering certain "outside" cattle purchases and sales. MFI
has the required bond to enable it to receive and distribute the
sales proceeds from the sale of feeding customers' cattle.

The Company is headquartered near La Salle, Colorado at the site
of its cattle feeding operations. La Salle is about 40 miles
northeast of Denver, Colorado in the South Platte River Valley of
Weld County.


MIRANT: MAGi Committee Wants Debtors to Sign Hedging Pacts
----------------------------------------------------------
Mirant Mid-Atlantic, LLC, a subsidiary of Mirant Americas
Generation, LLC, operates various power plants in the Mid-
Atlantic or "PJM" power market, which were acquired from Potomac
Electric Power Company in December 2000.  Several of these plants
are coal-fired electricity generating units.  MIRMA's largest
coal-fired facilities have the benefit of contracts that
effectively "lock-in" or fix the purchase price for coal for an
extended period of time.  Thus, because the marginal price of
power generally is set to the price of natural gas, MIRMA has an
opportunity to obtain increased gross margins when power prices
rise, as a result of the rise in natural gas prices.
Fortuitously, power prices have stayed relatively high since
March 2004.  Nevertheless, a substantial amount of MIRMA's 2004
gross margin remains unprotected against volatility in the market
price of power because the MAEM Volumes -- significant numbers of
megawatt hours of power which MIRMA currently sells to Mirant
Americas Energy Marketing, LP -- are unhedged.

Thomas Rice, Esq., at Cox & Smith, Incorporated, at San Antonio,
Texas, informs the Court that starting in March 2004, and on
numerous occasions thereafter, the MAGi Committee asked Mirant and
its debtor-affiliates to enter into hedging transactions to lock-
in the power prices and gross margins associated with the MAEM
Volumes.  The MAGi Committee noted to the Debtors that the hedging
of the MAEM volumes could be done at the expense of the MIRMA and
MAGi estates and would not affect Mirant or MAEM's separate
exposure or risk profile with respect to the Transitional Power
Agreement obligations.  The MAGi Committee, thus, urges the
Debtors to mitigate the risk of potential downturn in gas prices
and to secure MIRMA/MAGi's profits by entering into hedging
transactions.

At first, Mr. Rice reports that the Debtors refused to enter into
hedging transactions on MIRMA's behalf with respect to the MAEM
Volumes.  The Debtors admitted that, vis-a-vis the estates of
MAGi and MIRMA, they are duty-bound to enter into hedging
transactions to lock-in MIRMA/MAGi's profits.  Indeed, at a
meeting on March 30, 2004, Mirant's Chief Operating Officer,
Curtis A. Morgan, conceded that the business judgment of an
independent fiduciary for MAGi or MIRMA would dictate hedging the
MAEM Volumes at current power market prices.  Nonetheless, the
Debtors argued that hedging the price of power on MIRMA's behalf
was inappropriate because a natural "internal hedge" existing
within the entire Mirant enterprise, which offset any loss the
MIRMA/MAGi estate may suffer if power prices decrease.

In response, the MAGi Committee emphasized to the Debtors that
the so-called "internal hedge" does not benefit the MAGi estate
and ignores the interests of MAGi and MIRMA creditors.  The MAGi
Committee also highlighted that failing to hedge MIRMA's profits
in isolation may cause the MAGi estate to suffer substantial
losses and therefore, is inconsistent with the separate fiduciary
duties owed by the management of MAGi and MIRMA to the creditors
of those estates.

On May 7, 2004 and on several occasions thereafter, the MAGi
Committee formally asked the Examiner to investigate the
appropriateness of hedging the MAGi assets.  The Debtors, the
MAGi Committee, the Mirant Committee and the Examiner responded
by engaging in negotiations in an attempt to develop a mutually
satisfactory mechanism for eliminating the market risk to MIRMA
associated with the MAEM Volumes.  Ultimately, the Examiner
proposed a solution involving an internal forward sale to MAEM of
the MAEM Volumes, at fixed prices based on the market prices at
the point in time when the discussions were being held, as
opposed to the current arrangement of selling the MAEM Volumes at
fluctuating market prices.  The Debtors agreed to proceed with
the Examiner's proposed internal forward sale of the MAEM Volumes
to MAEM, provided that both the Mirant Committee and the MAGi
Committee consented.  This internal forward sale would have
eliminated the potential market disruption and transaction costs
associated with a forward sale by MIRMA of the MAEM Volumes to a
third-party, and was believed by the Examiner, the Debtors and
the MAGi Committee to represent the most effective, value-
maximizing way to eliminate the risks to MIRMA of the unhedged
MAEM Volumes.  Nevertheless, the Mirant Committee refused to
consent to the Examiner's proposed solution.

After four months of discussion, Mr. Rice says that there is a
stalemate between the parties.  The Debtors have continued to
leave the profits associated with the MAEM Volumes at risk to
power market fluctuations, to the detriment of the creditors of
MAGi and MIRMA.  Despite the efforts of both the Examiner and the
MAGi Committee, MIRMA's gross margins associated with the MAEM
Volumes remain unhedged.

Thus, the MAGi Committee asks the Court to compel the Debtors to
enter into the hedging transaction on behalf of MIRMA to limit
the risk associated with market price changes in power and to
lock-in related profits.  In the alternative, the MAGi Committee
asks the Court for authority to enter into the hedging
transaction on MIRMA and MAGi's behalf.

Mr. Rice contends that the Debtors should be compelled to enter
into the hedging transaction because their failure to lock-in
gross margins for MIRMA with respect to the MAEM Volumes and
eliminate exposure to declines in forward market prices for power
constitutes a breach of the fiduciary duties independently owed
to each of MIRMA and MAGi.  Without the Court's intervention, the
MAGi and MIRMA estates will be subjected to additional market
risk and value may be lost, as the Debtors' management will
perpetuate the management philosophy that in pursuing one
"enterprise" strategy, it is appropriate to disregard risks and
harm to each individual Debtor.

Since the Debtors are either unable or unwilling to take the
necessary action, Mr. Rice relates that only independent third-
parties like the MAGi Committee can act to protect the interests
of the MAGi and MIRMA estates and their creditors.

Section 1103(c) of the Bankruptcy Code delineates activities a
creditors committee is permitted to engage in on behalf of its
creditor class, including the right to "perform such other
services as are in the interest of those represented."  According
to Mr. Rice, this broad statutory authority has been interpreted
by recent court decisions to allow a creditors' committee to take
actions necessary to the representation of its constituency, so
long as the proposed action is to be taken within the confines of
the Bankruptcy Court.

Mr. Rice notes that the only rationale the Debtors provided for
not entering into the hedging transactions is the so-called
"internal hedge," arising from the losses Mirant and MAEM are
experiencing as a result of the same power prices on account of
the TPA obligations.  However, this purported "corporate hedge"
neither locks-in profits at MAGi and MIRMA nor addresses the
independent fiduciary duties owed to the two estates.  In fact,
the "internal hedge" only stands to benefit the estates of Mirant
and MAEM, since a decrease in power prices would mitigate the
losses of those estates arising from the TPAs and an increase in
power prices would enlarge their equity value in MAGi and MIRMA.
An independent fiduciary evaluating this issue from the
MAGi/MIRMA perspective would attempt to eliminate or mitigate the
loss in value that would be created by a decrease in power
prices.

The Debtors' contention that they are constrained from entering
into an appropriate hedge because of the fiduciary duties owed to
all Mirant Debtors, compounded by the Mirant Committee's actions,
highlight the conflict inherent in attempting to represent the
divergent interests between the Mirant and MAGi estates.
Importantly, the Debtors' management team has not defended their
unwillingness to enter into a third-party hedge for MIRMA as an
exercise of business judgment by MAGi and MIRMA, because
admittedly no independent business judgment is currently being
employed.  Indeed, the lack of an able fiduciary representing the
interests of MAGi and MIRMA on the Debtors' management team may
give rise to a breach of fiduciary duty claim for the benefit of
creditors of MAGi and MIRMA.  Those claims could be avoided if an
independent fiduciary were acting on behalf of MAGi and MIRMA
with respect to the issue of how best to hedge the MAEM Volumes.
Accordingly, the MAGi Committee seeks the Court's permission to
enter into hedging transactions on behalf of MAGi and MIRMA.

                 Hardie Affidavit Filed Under Seal

At the MAGi Committee's request, the Court allows it to file
under seal William H. Hardie, III's Affidavit in support of the
MAGi Committee's request.  Mr. Rice relates that the Hardie
Affidavit relies on information the Debtors provided that may
constitute "Subject Material" as defined in the Amended
Information Blocking Order.

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)


MISSION ENERGY: Moody's Upgrades Sr. Sec. Rating to B3 from Caa2
----------------------------------------------------------------
Moody's Investors Service upgraded the ratings of Mission Energy
Holding Company (MEHC: senior secured to B3 from Caa2) and the
ratings of subsidiary, Edison Mission Energy (EME: senior
unsecured to B1 from B2).  The rating outlook for MEHC, EME, and
all of EME's rated subsidiaries is positive.

The rating action follows the announcement by EME that it has
entered into an agreement to sell its remaining 5,381 MW
international power generation portfolio, known as the "BV", to a
joint venture owned by International Power PLC (70%) and Mitsui &
Co. Ltd. (30%), for net proceeds of about $2.3 billion.  This
asset sales agreement follows a previous announcement in mid-July
that EME had entered into an agreement to sell its 51.2% interest
in Contact Energy Limited to Origin Energy for proceeds of about
$750 million.  After payment of taxes and transaction costs, these
two transactions, when completed, are expected to provide about
$2.5 billion of net cash proceeds, and when added to other
restructuring initiatives taken by EME, including the termination
of the Collins lease, should provide $2.8 billion of net cash
proceeds to EME over the next few months.  EME is required under
the Mission Energy Holdings International credit agreement to
repay an $800 million bridge loan, using the asset sales proceeds.
The remaining $2.0 billion of cash proceeds will be available to
reduce holding company debt at EME and MEHC.  The rating action
reflects expectations that these transactions will result in
substantial debt reduction throughout the MEHC family of
companies.

While the rating action incorporates the successful completion of
these asset sales, Moody's recognizes that a certain degree of
execution risk exists in EME being able to successfully complete
its de-leveraging plan including the receipt of numerous
regulatory approvals, project lender consents, and approval by
International Power's shareholders.  Additionally, all of the
bonds outstanding at MEHC and at EME have no call provision so
there is some uncertainty about the exact amount of debt that will
be retired at EME and at MEHC.  The company anticipates that the
Contact Energy sale will close prior to November 30, 2004, and
expects the BV sale to close prior to December 31, 2004.  As such,
material debt reduction related to these events might not occur
until 2005.

Upon the completion of these transactions, EME's business will be
domestically focused and centered around three distinct business
units, Homer City Generating Station, a three-unit 1,884 mw coal-
fired merchant plant which sell electric output in PJM, Midwest
Generation, a 5,621 mw fleet of merchant coal-fired plants that
principally sell electric output in the midwest US, and its
California business, which consist of interests in five natural
gas plants that sell electric output under contract. The bulk of
EME's future earnings and cash flows will be heavily reliant on
the U.S. merchant power market.

The positive rating outlook for MEHC, EME, and certain EME
subsidiaries incorporate the potential for further credit
strengthening at MEHC and EME as well as its operating
subsidiaries, given the degree of de-leveraging that is expected
to follow the completion of the asset sales. Moody's estimates
that total consolidated MEHC on-balance and off-balance sheet debt
could decline by around 62% from its level at 12/31/03, should the
transactions close under the current terms and if the asset sales
proceeds are used to reduce EME and MEHC debt.

Ratings upgraded and issuers with a positive rating outlook
include:

   * Mission Energy Holding Company: senior secured bonds and
     senior secured bank credit facility, upgraded to B3 from
     Caa2;

   * Edison Mission Energy: senior unsecured debt and Senior
     Implied rating upgraded to B1 from B2; shelf registration for
     junior subordinated debt upgraded to (P)B3 from (P)Caa1;

   * Midwest Generation, LLC: pass-through certificates,
     guaranteed by Edison Mission Energy, upgraded to B1 from B2;
     and

   * Mission Capital, L.P.: monthly income preferred securities
     upgraded to B3 from Caa1.

Ratings affirmed and issuers for, which the rating outlook is
revised to positive from stable include:

   * Midwest Generation, LLC: senior secured credit facilities at
     Ba3; second-priority notes at B1;

   * Homer City Funding, LLC: senior secured bonds at Ba2; and

   * Edison Mission Energy Funding Corporation, senior secured
     bonds at Ba3.

Headquartered in Irvine, California, Edison Mission Energy is a
wholly owned subsidiary of Mission Energy Holding Company, which
in turn is a wholly owned subsidiary of Edison International.


MISSISSIPPI CHEM: Terra to Acquire Company for Approx. $268 Mil.
----------------------------------------------------------------
Terra Industries Inc. (NYSE: TRA) and Mississippi Chemical
Corporation (OTC Bulletin Board: MSPIQ.OB) have reached a
definitive agreement under which Terra will acquire all of the
outstanding shares of Mississippi Chemical for an estimated total
value of approximately $268 million.

The transaction consideration will include cash and assumed debt
of $161 million and stock of $107 million, and the final value
will depend on Terra's share price and closing adjustments. Both
companies' Boards of Directors have unanimously approved the
transaction. The Official Committee of Unsecured Creditors in
Mississippi Chemical's bankruptcy case, Mississippi Chemical's
largest unsecured creditors and its debtor-in-possession secured
lenders also support the transaction.

Mississippi Chemical and its domestic subsidiaries are currently
operating under Chapter 11 of the U.S. Bankruptcy Code. As a
result, the purchase agreement and related amended plan of
reorganization are subject to approval by the U.S. Bankruptcy
Court for the Southern District of Mississippi, as well as other
regulatory approvals. Mississippi Chemical intends to file for
Bankruptcy Court approval of the purchase agreement and related
amended plan of reorganization by the end of August. Prior to the
Terra acquisition and pursuant to the amended plan of
reorganization, Mississippi Chemical's nitrogen and phosphate
businesses will be separated and the phosphate business will be
either sold or transferred to the holders of Mississippi
Chemical's 71/4% senior notes and Mississippi Phosphates' 5.8%
industrial revenue bonds. After confirmation of the amended plan
of reorganization, Terra will acquire all of the stock of
Mississippi Chemical. The transaction is expected to be completed
no later than the first quarter of 2005.

    Expected Benefits of the Transaction

    Terra's acquisition of Mississippi Chemical is expected to:

     * Expand Terra's product sourcing and distribution
       capabilities beyond its existing North American and U.K.
       operations by diversifying its asset base in Trinidad and
       the U.S.;

     * Improve Terra's business risk profile by strengthening
       Terra's industrial nitrogen market position and increasing
       its sourcing from low-cost gas regions;

     * Provide Terra with new growth opportunities through
       Mississippi Chemical's terminal assets in Donaldsonville,
       Louisiana and Houston, Texas;

     * Yield significant annual cost savings; and

     * Be accretive to Terra's earnings and cash flow per share in
       the first year after closing.

"This is an important step in our efforts to strengthen Terra's
asset base and position the company for the long-term," said
Michael L. Bennett, Terra's President and Chief Executive Officer.
"Expanding our nitrogen manufacturing capabilities and
diversifying our natural gas sources have been two important Terra
objectives. Mississippi Chemical's 50% interest in the Point
Lisas, Trinidad ammonia production facility will significantly
enhance Terra's flexibility by lowering production costs in a high
natural gas price environment. Mississippi Chemical's terminal
assets in Donaldsonville and Houston provide Terra with access to
new markets. We also expect the Yazoo City facility's mix of
upgraded products for agricultural and industrial markets to serve
us well.

"This transaction creates a strong platform for improved
efficiency and future growth," added Mr. Bennett. "The addition of
Mississippi Chemical expands Terra's product sourcing and
distribution capabilities and strengthens our industrial nitrogen
market position. We are confident this transaction will enhance
Terra's earnings power throughout the nitrogen market cycle and
deliver significant value to our shareholders."

Coley Bailey, Chairman and Chief Executive Officer of Mississippi
Chemical, said, "We are very pleased to have reached this
agreement with Terra. This transaction is an important step
forward in completing the company's plan of reorganization. We
believe that it maximizes the value of Mississippi Chemical for
our creditors and stakeholders while affording them the unique
opportunity to participate in the upside potential of the combined
company."

Mr. Bailey continued, "This transaction reflects the importance
and quality of Mississippi Chemical's people and our outstanding
manufacturing capabilities. I thank our employees for their
continuing hard work and dedication. We are all committed to
completing the sale process as expeditiously as possible and
ensuring a seamless transition."

Terra expects the transaction to be accretive to its earnings and
cash flow per share in the first year after closing under most
reasonable natural gas cost scenarios and applying customary
operating, sales and administrative practices for these types of
businesses. Terra expects to realize significant annual cost
savings through synergies in the areas of product sourcing,
distribution, administration and sales. Terra expects to quantify
these and other cost saving opportunities as it and Mississippi
Chemical develop an integration plan to combine the two companies.

            Overview of Combined Terra-Mississippi Chemical

Mississippi Chemical owns a 50% interest in Point Lisas Nitrogen
Limited in The Republic of Trinidad and Tobago, which has the
capacity to produce annually 715,000 tons of ammonia from low-cost
natural gas supplied under a contract with the National Gas
Company of Trinidad and Tobago. In the U.S., Mississippi Chemical
produces nitrogen products at its Yazoo City, Mississippi and
Donaldsonville, Louisiana. facilities and owns and operates a
storage and distribution terminal in Donaldsonville -- one of the
northernmost points on the Mississippi River capable of receiving
ocean-going nitrogen vessels. Mississippi Chemical also owns a 50%
interest in an ammonia terminal located near Houston, Texas.
Production at the Donaldsonville facility is limited to one
anhydrous ammonia plant that operates on a swing basis to take
advantage of favorable relationships between natural gas costs and
anhydrous ammonia prices.

The acquisition will increase Terra's annual production capacity
for urea ammonium nitrate solutions (UAN), anhydrous ammonia (AA)
and ammonium nitrate (AN) by 16%, 41% and 95%, respectively,
making Terra the leading U.S. producer of UAN, AA and AN, and the
leading U.K. producer of AA and AN.

Upon completion of the transaction, Terra will have the capacity
to annually produce at its facilities (including the 50% interest
in the Point Lisas facility):

     * 4.4 million tons of UAN, the most versatile nitrogen
       fertilizer in North America;

     * 4.8 million tons of AA, the basic ingredient for most          
       nitrogen fertilizers and many industrial products; and

     * 2.0 million tons of AN, the nitrogen fertilizer preferred
       by most British farmers and a popular nitrogen fertilizer
       source in the southeastern U.S.

Of Terra's 4.8 million tons of AA production capacity, 8% will
rely on natural gas sources in Trinidad, 75% in North America and
17% in the U.K.

Terra is also one of the largest U.S. producers of methanol, an
ingredient in oxygenated fuels and a feedstock for other chemical
processes.

Perry Principals Investments LLC, an affiliate of Perry Capital
Management Inc., and Citigroup Global Markets, Inc., an affiliate
of Citigroup, have entered into a commitment to extend the term of
Mississippi Chemical's debtor-in-possession term loan beyond
Mississippi Chemical's emergence from bankruptcy until four years
from the closing of the transaction. Terra and Mississippi
Chemical will use existing cash on hand to reduce the principal
amount of this term loan to $125 million from $160 million and
satisfy all other cash payments to creditors required by the
amended plan of reorganization.

In addition, Terra would issue to certain of Mississippi
Chemical's unsecured creditors 14.75 million shares of Terra
common stock and an amount of preferred stock, subject to certain
post-closing adjustments as specified in the definitive agreement.
Assuming the Closing Share Price as defined in the definitive
agreement is equal to $6.14, (Terra's closing share price on
Friday August 6, 2004, the last trading day prior to the
announcement of the agreement), Mississippi Chemical's unsecured
creditors would receive Terra common stock with a value of $90.6
million plus the preferred stock. The preferred stock to be issued
to unsecured creditors will initially be set with a liquidation
preference of $32.2 million. The projected working capital and
other closing adjustments are currently anticipated to total $17.4
million. Under this projected scenario, Terra will issue preferred
stock with a liquidation preference of $14.8 million and, within
ten months of closing, Terra will have the option, but not the
obligation, to redeem the preferred stock for 2.4 million to 3.4
million shares of Terra common stock to be determined based upon
Terra's stock price at closing. Based upon a Closing Share Price
of $6.14 per share, Terra would have the right to redeem the
preferred stock for 2.4 million Terra common shares. The final
amount of the working capital and other post-closing adjustments
will depend on various factors including, but not limited to:
business performance, commodity prices and the terms of final
separation of Mississippi Chemical's phosphate business.

The agreement also provides that Terra will issue 250,000
additional shares of Terra common stock for distribution to
Mississippi Chemical shareholders. Under the amended plan of
reorganization, Mississippi Chemical expects that substantially
all unsecured creditors with allowed claims of $5,000 or less from
the nitrogen business will be paid in cash, in full. Substantially
all other unsecured creditors with allowed claims from the
nitrogen business will be paid either cash equal to a specified
percentage of their allowed claim or a pro-rata share of the pool
of Terra common and preferred stock.

                           Anglo American

In a separate transaction, Anglo American plc (Nasdaq: AAUK),
through a wholly-owned subsidiary, has entered into an agreement
to sell in a private placement to an investor group led by Perry
Capital 12.5 million of its shares of Terra common stock for $67
million. Upon completion of this sale, Anglo American will own
approximately 25.1 million common shares of Terra, representing
32% of Terra's outstanding shares. As previously announced, Anglo
American plans to dispose of its interest in Terra, with timing
based on market and other considerations.

Mr. Bennett said, "We are pleased to have Perry Capital and other
leading investors acquire over 12 million shares of Terra at the
same time that we announce this important strategic acquisition."

                     Conditions and Closing

The transaction is subject to U.S. Bankruptcy Court approval,
successful completion of the restructuring of Mississippi
Chemical's nitrogen and phosphate businesses, as well as customary
regulatory approvals. The transaction is also subject to Terra's
ability to obtain the consent of Terra's current working capital
lenders.

The Terra acquisition will be the primary basis of Mississippi
Chemical's amended plan of reorganization. To facilitate
Mississippi Chemical's exit from bankruptcy as expeditiously as
possible, however, the amended plan will also provide that should
the Terra transaction not be consummated, Mississippi Chemical
would emerge from bankruptcy on a standalone basis with secured
financing provided by an existing commitment from Citigroup and
Perry Capital. Under the standalone alternative, Mississippi
Chemical's debtor-in-possession financing would be retired, the
same cash distributions would be made to holders of allowed
unsecured claims as in the Terra transaction, Mississippi
Chemical's other unsecured creditors would receive substantially
all of the common shares of the reorganized Mississippi Chemical,
and Mississippi Chemical's current shareholders would receive
warrants to acquire common shares in the reorganized company.

Lazard LLC is serving as financial advisor to Terra. Kirkland &
Ellis LLP is serving as legal advisor to Terra. Mississippi
Chemical is being advised by Gordian Group LLC as its financial
advisor, Glass & Associates, Inc., as its restructuring advisor,
Vinson & Elkins LLP as its corporate counsel, and Phelps Dunbar
LLP as its bankruptcy counsel. The Official Committee of Unsecured
Creditors in Mississippi Chemical's bankruptcy case is being
advised by Chanin Capital Partners as its financial advisor and
Orrick, Herrington & Sutcliffe LLP as its legal counsel.

                           About Terra

Terra Industries Inc., with 2003 revenues of $1.4 billion, is a
leading international producer of nitrogen products. Headquartered
in Sioux City, Iowa, Terra employs approximately 1,050 people in
North America and the United Kingdom. Terra's NYSE ticker symbol
is TRA. Additional information is available on Terra's web site,
http://www.terraindustries.com/

                   About Mississippi Chemical

Mississippi Chemical Corporation is a leading North American  
producer of nitrogen and phosphorus products used as crop  
nutrients and in industrial applications. Production facilities  
are located in Mississippi, Louisiana, and through Point Lisas  
Nitrogen Limited, in The Republic of Trinidad and Tobago. On May  
15, 2003, Mississippi Chemical Corporation, together with its  
domestic subsidiaries, filed voluntary petitions seeking  
reorganization under Chapter 11 of the U.S. Bankruptcy Code.


MIV THERAPEUTICS: Capital Deficit Raises Going Concern Doubt
------------------------------------------------------------
Moore Stephens Ellis Foster Ltd., Chartered Accountants was
engaged as the principle independent accountants for MIV
Therapeutics, Inc., effective May 28, 2004.  Moore Stephens Ellis
Foster replaces Morgan & Company.  The decision to change
accountants was approved by the Company's Board of Directors.

The Former Accountant's reports on the consolidated financial
statements of the Company for the fiscal years ended May 31, 2003
and 2002 contained separate paragraphs stating that, "The
accompanying consolidated financial statements have been prepared
assuming that MIV Therapeutics Inc. will continue as a going
concern. As discussed in Note 2 to the consolidated financial
statements, MIV Therapeutics Inc. has suffered losses from
operations and has a working capital deficiency that raises
substantial doubt about its ability to continue as a going
concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of this
uncertainty."

MIV Therapeutics, Inc., is developing a new generation of advanced
biocompatible stent coatings and drug-delivery technologies.  
The Company's business objective is to be a leader in coating
technologies and drug-delivery devices for both cardiovascular and
non-vascular applications.


MKP CBO II: S&P Lowers Class B and C Note Ratings to 'B+'   
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the B
and C notes issued by MKP CBO II Ltd., a cash flow arbitrage CDO
of ABS/RMBS and removed them from CreditWatch with negative
implications, where they were placed May 3, 2004.  At the same
time, the ratings on the class A-1 and A-2 notes are affirmed at
'AAA' based on the credit enhancement available to support the
notes.  The ratings on the class C notes were previously lowered
February 17, 2004.

The current rating actions reflect factors that have negatively
affected the credit enhancement available to support the class B
and C notes since the prior rating action, primarily continued
defaults and negative migration in the credit quality of the
assets within the collateral pool.

Standard & Poor's noted that according to the June 30, 2004
trustee report, $11.129 million of the underlying assets are
defaulted and come from bonds issued in ABS manufactured housing
transactions.

Standard & Poor's reviewed the results of the current cash flow
runs generated for MKP CBO II Ltd. to determine the level of
future defaults the rated classes can withstand under various
stressed default timing and interest rate scenarios, while still
paying all of the interest and principal due on the notes.  When
the results of these cash flow runs were compared with the
projected default performance of the performing assets in the
collateral pool, it was determined that the ratings assigned to
the class B and C notes was no longer consistent with the credit
enhancement available.
   
     Ratings Lowered And Removed From Creditwatch Negative
   
                        MKP CBO II Ltd.

                               Rating
                    Class   To        From
                    -----   --        ----
                    B       A-        AA/Watch Neg
                    C-1     B+        BBB-/Watch Neg
                    C-2     B+        BBB-/Watch Neg
    

                        Ratings Affirmed
    
                        MKP CBO II Ltd.
                     
                     Class        Rating
                     -----        ------
                     A-1          AAA
                     A-2          AAA
    
Transaction Information

Issuer:              MKP CBO II Ltd.
Current manager:     MKP Capital Management
Underwriter:         Banc of America Securities
Trustee:             LaSalle Bank N.A.
Transaction type:    CDO of ABS/RMBS
    
   Tranche               Initial    Last            Current
   Information           Report     Action          Action
   Date (MM/YYYY)        3/02       5/04            8/2004
   --------------        -------    ------          -------
   Class A-1 notes rtg   AAA        AAA             AAA
   Class A-2 notes rtg   AAA        AAA             AAA
   Class A OC ratio      124.67%    125.17%         119.96%
   Class A OC ratio min  119.5%     119.50%         119.50%
   Class B note rtg.     AA         AA/Watch Neg    A-
   Class B OC ratio      116.14%    116.61%         111.75%
   Class B OC ratio min  112.00%    112.00%         112.00%
   Class C-1 note rtg.   BBB        BBB-/Watch Neg  B+
   Class C-2 note rtg.   BBB        BBB-/Watch Neg  B+
   Class C OC ratio      106.06%    106.48%         102.05%
   Class C OC ratio min  102.80%    102.80%         102.80%
   Class A-1 note bal.   $183.75mm  $183.75         $183.75
   Class A-2 note bal    $61.25mm   $61.25mm        $61.25mm
   Class B note bal      $18.00mm   $18.00mm        $18.00mm
   Class C-1 note bal    $12.50mm   $12.50mm        $12.50mm
   Class C-2 note bal    $12.50mm   $12.50mm        $12.50mm
       
   Portfolio Benchmarks                        Current
   --------------------                        -------   
   S&P Wtd. Avg. Rtg. (excl. defaulted)        BBB-
   S&P Default Measure (excl. defaulted)       0.80%
   S&P Variability Measure (excl. defaulted)   1.60%
   S&P Correlation Measure (excl. defaulted)   1.54
   Wtd. Avg. Coupon (excl. defaulted)          7.219%
   Wtd. Avg. Spread (excl. defaulted)          2.299%
   Oblig. Rtd. 'BBB-' and Above                73.60%
   Oblig. Rtd. 'BB+' and Above                 76.85%
   Oblig. Rtd. 'B+' and Below                  19.18%
   Oblig. Rtd. in 'CCC' Range                  8.16%
   Oblig. Rtd. 'CC', 'SD' or 'D'               3.80%
       
   Rated OC Ratios   (ROCS)   Prior           Current
   ---------------   ------   -----           -------
   Class A-1 notes   108.05% (AAA)            103.10% (AAA)
   Class A-2 notes   108.05% (AAA)            103.10%(AAA)
   Class B notes     105.53% (AA/Watch Neg)   103.87% (A-)
   Class C-1 notes   101.30% (BBB-/Watch Neg) 100.27% (B+)
   Class C-2 notes   101.30% (BBB-/Watch Neg) 100.27% (B+)


NATIONAL CENTURY: VI/XII Trust Wants Klee Tuchin Hired as Counsel
-----------------------------------------------------------------
Fred Neufeld, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, in  
Los Angeles, California, tells Judge Calhoun that the existing  
counsel for the VI/XII Collateral Trust discovered a conflict of
interest that precludes it from representing the VI/XII Collateral
Trust with respect to the application filed by JPMorgan Chase Bank
for compensation and reimbursement of its expenses pursuant to
Section 503(b) of the Bankruptcy Code.

Accordingly, the VI/XII Collateral Trust seeks the Court's  
authority to:

   (a) retain Klee, Tuchin, Bogdanoff & Stern, LLP, as
       VI/XII Conflicts Counsel in accordance with the provisions
       of an engagement letter between Avidity Partners, LLC, and
       Klee Tuchin dated July 27, 2004; and

   (b) pay compensation to, and reimburse the expenses of, VI/XII  
       Conflicts Counsel from the assets of the VI/XII Collateral  
       Trust without further Court order.

Klee Tuchin will act as the Conflicts Trustee's special  
litigation counsel to investigate any and all objections to the  
application filed by JPMorgan Chase Bank and its counsel pursuant  
to Section 503(b).  As directed by the Conflicts Trustee, Klee  
Tuchin will investigate and research the facts on which the  
Application may be objected to and, if so directed, represent the  
Conflicts Trustee in asserting and pursuing an objection.

Klee Tuchin's employment as the Conflicts Trustee's counsel does  
not include the provision of advice outside the insolvency and  
related litigation area, in areas like corporations, taxation,  
securities, environmental, labor and criminal law.  Furthermore,  
the limited scope of Klee Tuchin's employment does not include  
giving attention to, forming professional opinions as to, or  
advising the Conflicts Trustee with respect to, any disclosure  
obligations under non-bankruptcy laws or agreements.

Thomas E. Patterson, a member of Klee Tuchin, relates that no  
member of the firm is presently admitted to practice in Ohio.   
While several of Klee Tuchin members have been admitted to appear  
before the Court in the Debtors' cases, the employment of local  
counsel is essential.  Klee Tuchin had previously worked with Ken  
Cookson, now of Kegler, Brown, Hill & Ritter, in Columbus, Ohio.   
Klee Tuchin now seeks to associate Kegler Brown as their local  
counsel as well.  If that is not possible, then Klee Tuchin's  
employment is contingent on their associating with other mutually  
acceptable Ohio counsel.

The Conflicts Trustee will employ Klee Tuchin at the expense of  
the Collateral Trust's estate.  Klee Tuchin's monthly invoices  
will reflect charges for services rendered calculated on the  
basis of the firm's hourly rates:

   Professional                      Hourly Rate
   ------------                      -----------
   Kenneth N. Klee                       $750
   David M. Stern                         615
   Lee R. Bogdanoff                       585
   Daniel J. Bussel                       585
   Michael L. Tuchin                      585
   Thomas E. Patterson                    585
   Edward T. Attanasio                    495
   Martin R. Barash                       475
   Ronn S. Davids                         450
   Laura L. Buchanan                      435
   Mette H. Kurth                         405
   Lila E. Rogers                         400
   David A. Fidler                        375
   Jennifer L. Dinkelman                  345
   Efrat B. Zisblatt                      335
   Brendt C. Butler                       310
   Laine Mervis                           265
   Michael J. Weinberger                  265
   Kimber Cooley                          225
   Melanie S. Ezerzer                     145

Klee Tuchin will reimbursement for costs and expenses, including  
airfare, hotel accommodations, charges for messenger services,  
air couriers, photocopying, travel expenses, postage for large  
mailings, long distance telephone, computerized legal research  
facilities, investigative searches, and other charges customarily  
invoiced by law firms in addition to fees for legal services.

The VI/XII Collateral Trust also asks the Court to deem that the  
appointment of and service of Klee Tuchin as the VI/XII Conflicts  
Counsel will in no way:

   -- impair the VI/XII Conflicts Counsel from representing the
      CSFB Claims Trust with respect to matters comprehended
      within the CSFB Claims Trust; and

   -- serve as a basis for disqualifying the VI/XII Conflicts
      Counsel or in any fashion restricting the VI/XII Conflicts
      Counsel from serving as CSFB Claims Counsel, including
      representing the CSFB Claims Trust in any matter that is
      adverse to the VI/XII Collateral Trust, the Unencumbered
      Assets Trust or their Steering Committees or beneficiaries.

Mr. Patterson assures the Court that despite any concurrent  
representation, Klee Tuchin strictly preserves all client  
confidences and zealously pursues the interests of all its  
clients.

The Conflicts Trustee may discharge Klee Tuchin at any time.   
Klee Tuchin may withdraw at any time with the Conflicts Trustee's  
consent or for good cause without the Conflicts Trustee's  
consent.  Good cause includes the Conflicts Trustee's breach of  
the agreement or the failure of the estate to pay Klee Tuchin  
consistent with their agreement, the Conflicts Trustee's refusal  
or failure to cooperate with Klee Tuchin, or any fact or  
circumstance that would render their continuing representation  
unlawful or unethical.

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. S.D. Ohio Case No. 02-65235).  The healthcare finance
company prosecuted its Fourth Amended Plan of Liquidation to
confirmation on April 16, 2004.  Paul E. Harner, Esq., at Jones
Day represents the Debtors in their restructuring efforts.
(National Century Bankruptcy News, Issue No. 44; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


NEWFIELD EXPLORATION: Moody's Affirms Ba2 Senior Implied Rating
---------------------------------------------------------------
Moody's affirmed Newfield Exploration's (NFX) Ba2 senior implied
rating with a stable outlook on the announcement of its
acquisition of Inland Resources.  The partly common equity funded
$575 million acquisition of 54.3 mmboe of total reserves (7,000
BOEPD current production) is the second significant acquisition
the company has made in 2004.  In June 2004, NFX announced a 16
mmboe acquisition of Gulf of Mexico properties from Denbury
Resources, based on Denbury Resources reserve estimations.

The stable outlook reflects NFX's increased reserve scale and the
production diversification added through the Inland acquisition.
The outlook assumes:

   -- that future acquisitions will be amply funded with equity;

   -- that NFX will continue to see organic production gains from
      its core properties;

   -- that already high full cycle costs do not increase further;
      and

   -- that NFX will continue to replace production with a balance
      of proven developed (PD) and proven undeveloped (PUD) at
      finding and development costs (F&D) no worse than its pro-
      forma 3-year average of $11.66/boe.

The outlook and/or ratings could face downward pressure if NFX:
incurs higher leverage on its proven developed reserve base;
sustains further increases in it's total full cycle costs; fails
to cover its roughly $20/boe of leveraged full-cycle costs through
realized prices plus its hedging program; faces any other
challenges in replacing or growing volume at competitive costs
relative to price realizations.

The outlook would benefit from: debt reduction relative to PD
reserve volumes; sustained production gains, and reserve volume
gains at reduced reserve replacement costs.  A positive outlook,
though unlikely in the near-term future, will require Moody's
review of NFX's 2004 year end reserve replacement cost and reserve
mix, satisfactory productive reinvestment of 2004 capital, and
evidence that the acquisition lends to sustainable production
growth.

In spite of partial equity funding, the acquisition increases key
leverage metrics due to high acquisition costs and a very low
(30%) percentage of PD reserves.  This results in elevated
leverage on PD reserves over the levels the company has
historically reached to date.  Inland's core holding is 54.3 mmboe
of proven reserves in the Monument Butte Field in the Uinta Basin
in Utah.  The property currently produces 7,000 boepd (5.3 year
proven developed reserve developed), is 100% operated by Inland,
and is 85% oil.

Inland adds an important new property for NFX as it continues to
diversify away from Gulf of Mexico properties and establishes a
focus area in the Rocky Mountains.  The Monument Butte Field is
significantly underdeveloped and may add substantial upside
drilling opportunity for NFX.  However, NFX is buying it for a
historically high $82,143 per boe of current daily production and
roughly $10.58 per boe of announced proven reserves.

Pro-forma for all 2004 acquisitions, Moody's estimates total year-
end 2003 proven reserves of 290 mmboe with proven developed
reserves of 216 mmboe.  Pro-forma second quarter 2004 production
appears to be 112,796 boe per day.  At closing, Moody's projects
total debt to be in the range of $1.1 billion.  In that scenario,
Debt/PD reserves would exceed $5.00/PD boe.  Total debt plus
development capital would be in the zrange of $6.50/proven
reserves.

With a stable outlook, Moody's:

      i) Affirmed NFX's Ba3 rating on NFX's $250 million of 8 3/8%
         senior subordinated notes due 2012;

     ii) Affirmed NFX's Ba2 rating on $175 million of 7.625%
         senior unsecured notes due 2011;

    iii) Affirmed NFX's Ba2 rating on $125 million of 7.45% senior
         unsecured notes due 2007; and

     iv) Affirmed NFX's Ba2 senior implied rating.

The ratings are supported by:

   -- a history of sound funding and business strategies;

   -- the important addition of Inland's diversification away from
      the Gulf of Mexico;

   -- the combination of debt and common equity NFX will use to
      fund the Inland acquisition;

   -- NFX's long established core position in the shallow water
      Gulf of Mexico;

   -- historically attractive operating margins that typically
      cover high reserve replacement costs; and NFX's ability so
      far, through effective hedging to internally fund its high
      reserve replacement costs during weaker market prices.

The ratings remain restrained by:

   -- fairly high pro-forma leverage on proven developed (PD)
      reserves;

   -- rising combined unit costs (production, G&A, interest and
      preferred dividends, and reserve replacement costs) which
      now exceed $20/boe and are driven by rising all-sources F&D
      costs;

   -- reduced liquidity following the Denbury and Inland
      acquisitions;

   -- slightly lower NFX second quarter 2004 production versus the
      year before;

   -- reinvestment risk and capital needs associated with NFX's
      5.3 year pro-forma PD reserve life (second quarter run-
      rate); and

   -- ratings flexibility needed for additional strategic moves.

NFX's pro-forma unit costs are high, in the $20/boe range, due to
a pro-forma 2003 three-year average reserve replacement costs
(RRC) of roughly $11.66/boe, resulting in reduced cash-on-cash
returns relative to several peers.  Pro-forma for all announced
2004 acquisitions:

   -- NFX's three year average all-sources F&D costs approximate
      $11.66/boe;

   -- three year average drillbit F&D costs are roughly
      $13.50/boe;

   -- pro-forma one-year all-sources F&D costs of nearly
      $10.70/boe; and

   -- pro-forma one year drillbit F&D costs, before reserve
      revisions of nearly $11.25/boe.

Pro-forma for Inland, NFX expects to maintain its committed $600
million unsecured reserve-based revolving credit facility, under
which it will continue to have a $500 million borrowing base until
its next borrowing base redetermination on November 1, 2004.
Before Inland, $466 million was available for borrowing on June
30, 2004.

NFX's leverage and high total costs reflect the challenges and
rising costs of building a North American exploration and
production firm.  The ratings anticipate reduced effective debt on
PD reserves and accommodate, for now, the cumulative capital
requirements associated with the combination of a short PD reserve
life, high RRC costs, and ongoing property diversification
efforts.

Newfield Exploration is an independent oil and gas exploration and
production company headquartered in Houston, Texas.


NORTEL NETWORKS: Receives Global IP Sound Warrants
--------------------------------------------------
Nortel Networks(1) (NYSE:NT)(TSX:NT) has been granted 2,669,503
warrants to purchase shares of Global IP Sound (GIPS) common
stock, at a formula exercise price of approximately SEK 3.10 per
share.  The warrant issue, following the expanded licensing
agreement announced by the companies on June 21, affirms GIPS'
role as a strategic supplier of voice processing software for
Nortel Networks IP-centric communications systems.

The warrant issue represents five percent of the fully diluted
value of Global IP Sound and is exercisable after five years.
Nortel Networks may accelerate its exercise rights based on
achieving fee payment thresholds related to shipments of GIPS-
enhanced systems.

Integration of the GIPS software on its IP-centric communications
systems helps Nortel Networks customers deliver high quality voice
performance under various network conditions. The company has
licensed the GIPS VoiceEngine(TM) and SoundWare(TM) suite of
embedded voice processing software for use in multiple products,
including Nortel Networks PC- and web-based SIP soft phone
clients, Nortel Networks i2004 IP phone, and Nortel Networks
Multimedia Communication Server (MCS) 5100 and 5200 platforms.

"Global IP Sound's expertise in voice processing software helps to
address key Quality-of-Service criteria for VoIP systems,
accelerating the transformation of today's network infrastructure
to leverage the power of packet-based communications," said Sue
Spradley, president, Wireline Networks, Nortel Networks. "By
securing warrants to invest in GIPS, we strengthen its position as
a supplier to the industry. This translates into benefits for
Nortel Networks customers as more points of access to the network
are enhanced with GIPS software."

"The two year collaboration between GIPS and Nortel Networks to
bring the best possible Quality-of-Service to IP-based
communications has demonstrated our mutual commitment to
delivering carrier-class VoIP," said Gary Hermansen, president and
CEO of Global IP Sound. "The investment agreement, combined with
the growing deployment of GIPS software across the product lines
of the industry's leading carrier and enterprise VoIP supplier,
validates the capabilities we bring to VoIP systems and will help
us to further expand our role in this market."

                        About Global IP Sound

Global IP Sound develops embedded voice processing technologies
for real-time communications over packet networks. GIPS
SoundWare(TM) provides better than PSTN voice quality and fidelity
in end-to-end IP communications with robustness against packet
loss. Global IP Sound's world-renowned speech processing and IP
telephony experts deliver these solutions to applications
developers, gateway and chip manufacturers. Companies using GIPS
SoundWare products include Nortel Networks, Skype, WebEx,
Marratech, and other key players in the VoIP market. Global IP
Sound is a member of the Intel(R) PCA Developer Network, the
Motorola Design Alliance, and Texas Instruments' third party
developer network. Global IP Sound has headquarters in Stockholm
and San Francisco. More information is available at
http://www.globalipsound.com/

Global IP Sound, GIPS, SoundWare, VoiceEngine, NetEQ, iPCM-wb,
Enhanced G.711, and associated design marks and logos are
trademarks owned or used under license by Global IP Sound AB, and
may be registered in the United States and other countries.

                    About Nortel Networks   
   
Nortel Networks is an industry leader and innovator focused on   
transforming how the world communicates and exchanges   
information. The Company is supplying its service provider and   
enterprise customers with communications technology and   
infrastructure to enable value-added IP data, voice and   
multimedia services spanning Wireless Networks, Wireline   
Networks, Enterprise Networks, and Optical Networks. As a global   
company, Nortel Networks does business in more than 150   
countries. More information about Nortel Networks can be found on   
the Web at www.nortelnetworks.com/ or  
http://www.nortelnetworks.com/media_center   
   
                      *     *     *   
   
As reported in the Troubled Company Reporter's June 25, 2004   
edition, Standard & Poor's Ratings Services said that its long-   
term corporate credit rating and other long-term ratings on
Nortel Networks Corp. and Nortel Networks Ltd. remain on
CreditWatch with developing implications, where they were placed
April 28, 2004.   
   
As previously reported Standard & Poor's lowered its 'B' long-   
term corporate credit rating and other long-term ratings on
Nortel Networks Corp. and Nortel Networks Ltd. to 'B-'.


NORTHWESTERN CORP: Incurs $4.8 Million 2004 Second Quarter Loss
---------------------------------------------------------------
NorthWestern Corporation (Pink Sheets: NTHWQ) reported financial
results for the second quarter ended June 30, 2004, and filed the
Company's second quarter 2004 Form 10-Q with the Securities and
Exchange Commission.

On September 14, 2003, NorthWestern filed a voluntary petition for
relief under Chapter 11 of the Federal Bankruptcy Code in the
United States Bankruptcy Court for the District of Delaware under
case number 03-12872. Pursuant to the Chapter 11 filing,
NorthWestern retains control of its assets and is authorized to
operate its business as a debtor-in-possession while being subject
to the jurisdiction of the Bankruptcy Court. Included in the
consolidated financial statements are subsidiaries that are not
party to the Chapter 11 case and are not debtors.  The assets and
liabilities of such nondebtor subsidiaries are not considered to
be material to the consolidated financial statements or are
included in discontinued operations.  In addition, in order to
wind-down its affairs in an orderly manner, NorthWestern's
subsidiary, Netexit, Inc., formerly known as, Expanets, Inc.,
filed a voluntary petition for relief under the provisions of
Chapter 11 of the Federal Bankruptcy Code in the United States
Bankruptcy Court for the District of Delaware on May 4, 2004.

Beginning in the third quarter of 2003, the Company's consolidated
financial statements have been prepared in accordance with the
American Institute of Certified Public Accountants Statement of
Position (SOP) 90-7, "Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code," and on a going concern
basis, which contemplates continuity of operations, realization of
assets, and liquidation of liabilities in the ordinary course of
business.  As a result of the Company's Chapter 11 filing, the
realization of assets and liquidation of liabilities are subject
to uncertainty.  Under SOP 90-7, certain liabilities existing
prior to the Chapter 11 filing are classified as Liabilities
Subject to Compromise on the Consolidated Balance Sheets.
Additionally, professional fees and expenses directly related to
the Chapter 11 proceeding and interest income on funds accumulated
during the Chapter 11 proceeding are reported separately as
reorganization items.  Finally, the extent to which reported
interest expense differs from the contractual rate of interest is
disclosed in the Company's Consolidated Statements of Income
(Loss).

                    Consolidated Financial Results

NorthWestern reported a consolidated loss on common stock in the
second quarter of 2004 of $4.8 million, compared with a
consolidated loss on common stock of $57.8 million in the same
period in 2003.  Due to NorthWestern's bankruptcy filing, the
Company has ceased recording interest expense on its unsecured
debt and trust preferred securities, which accounted for a $17.5
million decrease in interest expense during the second quarter of
2004 and a $7.5 million decrease in minority interests on
preferred securities of subsidiary trusts.  In addition, results
from discontinued operations improved by $22.6 million, primarily
related to a Netexit gain of $11.5 million attributable to a
settlement with Avaya, Inc., Consolidated earnings on common stock
were $12.2 million for the six months ended June 30, 2004,
compared with a loss of $47.9 million for the first six months of
2003.

Revenues from continuing operations in the second quarter of 2004
were $233.0 million, compared with $234.7 million in the second
quarter of 2003.  Revenues for the six months ended June 30, 2004,
were $572.6 million, compared with $522.6 million in the same
period in 2003.  Revenues increased due to sales of surplus gas of
$19.7 million, increased market prices for gas of $15.9 million
and an increase in nonregulated gas revenues of $13.4 million.

Consolidated gross margin in the second quarter of 2004 was $103.3
million, as compared to $105.4 million in the second quarter of
2003.  For the six months ended June 30, 2004, consolidated gross
margin was $236.0, as compared to $238.2 million for the same
period in 2003.

              Results from Continuing Utility Operations

NorthWestern's electric and natural gas utility operations
reported operating income of $14.7 million for the second quarter
of 2004, compared with operating income of $25.8 million in same
period in 2003.  Operating income from electric operations in the
second quarter of 2004 was $15.9 million, a decrease of 36.3
percent, compared with $24.9 million in the same period of 2003.
The decrease was mainly due to higher transmission and wheeling
costs, a $2.1 million loss related to a dispute settlement with a
wholesale power supply vendor and higher operating, general and
administrative expenses which includes increased directors and
officers liability insurance costs, higher property taxes and
higher contractor costs due to strike contingency planning and
increased allocation of corporate expenses. Operating loss for the
second quarter of 2004 from natural gas operations was
$1.2 million, compared with operating income of $0.9 million in
the same period in 2003.  The change primarily resulted from
higher operating, general and administrative expenses.

For the six months ended June 30, 2004, operating income from
electric and natural gas operations was $57.4 million, compared
with $78.7 million, a decrease of 27.1 percent, for the same
period in 2003.  Operating income from electric operations during
the first six months of 2004 was $39.0 million, compared with
$56.4 million for the same period in 2003.  Operating income from
natural gas operations during the first six months of 2004 was
$18.3 million, compared with $22.2 million for the same period in
2003.

Electric revenues for the second quarter of 2004 were $152.6
million, a decrease of 5.7 percent, compared with revenues of
$161.9 million in the same period of 2003.  The decrease in
revenues during the second quarter of 2004 as compared with 2003
was primarily due to a $16.9 million decrease in sales of excess
purchased power to the secondary market.  This was offset by an
$8.4 million increase in sales volumes to core customers.  
Electric revenues for the first six months of 2004 were $329.6
million, compared with $329.5 million for the same period in 2003.

Natural gas revenues during the second quarter of 2004 were $78.2
million, an increase of 10.6 percent, compared with $70.7 million
in the same period in 2003.  Gas supply costs increased $5.2
million as a result of higher average market prices. These costs
are also reflected in cost of sales thereby having no impact on
gross margins.  Additionally, nonregulated gas revenues increased
approximately $4.3 million, primarily from the addition of ethanol
plant customers in South Dakota.  This was partially offset by a
$2.7 million decrease in retail revenues resulting from a 3.7
percent volume decline.  Natural gas revenues for the six months
ended June 30, 2004, were $238.3 million, compared with $188.4
million in the same period in 2003.

Gross margin for electric operations in the second quarter of 2004
was $82.3 million, a decrease of $3.4 million, or 3.9 percent from
gross margin in the second quarter of 2003.  This decrease was
primarily attributable to the loss on a wholesale power supply
contract and increased transmission and wheeling costs.  For the
six months ended June 30, 2004, margins of $171.6 million were
$4.6 million lower, or 2.6 percent, from results in the first six
months of 2003.  This decrease was primarily attributable to
higher transmission and wheeling costs and the loss related to the
dispute settlement.

Gross margin for natural gas operations in the second quarter of
2004 was $19.4 million, an increase of $1.1 million, or 6.1
percent, over the same period in 2003. Lower retail margins were
more than offset by the decrease in the write-off of the gas
supply costs.  For the six months ended June 30, 2004, margins of
$61.0 million were $2.3 million higher, or 3.9 percent, over the
same period in 2003.  This increase was mainly due to the decrease
in the write-off of gas supply costs.

Total electric volumes in the second quarter of 2004 totaled
approximately 2.6 million megawatts hours, compared with volumes
of approximately 2.5 million megawatt hours in the same period in
2003.  This change during the 2004 second quarter was due
primarily to a 7.6 percent increase in retail volumes stemming
from a return of Montana choice customers to NorthWestern and
higher wholesale volumes in South Dakota.

Retail natural gas volumes totaled approximately 4.5 million
dekatherms in the second quarter of 2004, compared with volumes of
approximately 4.7 million dekatherms in the same period in 2003.
The decrease during the second quarter of 2004 was due to milder
than normal temperatures.  Unregulated wholesale natural gas
volumes totaled approximately 3.4 million dekatherms in the second
quarter of 2004, compared with volumes of approximately 2.2
million dekatherms in the same period in 2004.  The increase
during the second quarter of 2004 was due to a 51.3 percent
increase in gas wholesale volumes in South Dakota due to the
addition of ethanol plant customers in comparison to the same
period in 2003.

                Liquidity and Capital Resources

As of June 30, 2004, cash and cash equivalents were $101.6
million, compared with $15.2 million as of December 31, 2003.  
Cash provided by continuing operations during the six months ended
June 30, 2004, totaled $123.1 million, compared with cash used in
continuing operations of $86.3 million during the six months ended
June 30, 2003.  This increase was substantially due to improved
vendor credit terms and the suspension of interest payments on our
unsecured debt and preferred securities during the Company's
reorganization.  In July 2004, NorthWestern reduced the
availability under its debtor-in-possession (DIP) facility from
$75 million to $50 million.  As of August 6, 2004, the only
outstanding amounts under the DIP facility were letters of credit
of $15.4 million.  NorthWestern anticipates that its total cash
and cash equivalents, together with access to the DIP facility,
will be sufficient to fund operations during its bankruptcy
proceedings.

In July 2004, NorthWestern filed applications with the Montana
Public Service Commission (MPSC) and the Federal Energy Regulatory
Commission (FERC) seeking approval to enter proposed exit
financing facilities including:

    -- $100 million revolving credit facility with a five-year
       maturity and a variable interest rate based on LIBOR plus a
       credit spread;

    -- $150 million Term B loan credit facility with a seven-year
       maturity and variable interest rate based on LIBOR plus a
       credit spread; and

    -- Up to $350 million of senior secured notes with a maturity
       of seven to 10 years and fixed interest rate expected to
       range between 6.75% and 7.25%.


The only component of the exit financing needed for the Company to
emerge from bankruptcy is the $100 million revolving credit
facility.  The exit financing will be secured by mortgage bonds
and will be used to repay and refinance the Company's existing DIP
facility, existing Senior Secured Term Loan ($384.2 million
outstanding as of June 30, 2004) and potentially $150 million of
Montana First Mortgage Bonds.  NorthWestern believes that
refinancing these obligations at this time with longer term
maturities and at lower interest rates will lower the Company's
borrowing cost and improve cash flow.  The additional components
of the exit financing are being contemplated to lower the
Company's borrowing costs and extend existing maturities.

NorthWestern has also requested the MPSC and FERC approval to
issue up to 35.5 million shares of new common stock.  Under the
terms of NorthWestern's First Amended Plan of Reorganization, the
Company's existing common stock will be cancelled, and the debt
owed to the Company's unsecured creditors and holders of
Mandatorily Redeemable Preferred Securities of Subsidiary Trusts
will be exchanged for the new common stock.  On August 3, 2004,
the MPSC conditionally approved the proposed exit financing and
issuance of new common stock, subject to confirmation of our Plan.

Additional financial information related to NorthWestern's second
quarter 2004 results is available in its Form 10-Q which can be
viewed on the Company's Web site at http://www.northwestern.com/  

                       About NorthWestern

Headquartered in Sioux Falls, South Dakota, NorthWestern
Corporation -- http://www.northwestern.com/-- provides  
electricity and natural gas in the Upper Midwest and Northwest,
serving approximately 608,000 customers in Montana, South Dakota
and Nebraska.  The Debtors filed for chapter 11 protection on
September 14, 2003 (Bankr. Del. Case No.: 03-12872).  Judge Peter
J. Walsh administers the bankruptcy proceedings.  Scott D.
Cousins, Esq., Victoria Watson Counihan, Esq., and William E.
Chipman, Jr., Esq., at Greenberg Traurig, LLP, and Jesse H.
Austin, III, Esq., and Karol K. Denniston, Esq., at Paul,
Hastings, Janofsky & Walker, LLP, represent the Debtors in their
restructuring efforts.  On the Petition Date, the Debtors reported
a $2,624,886,000 assets and a $2,758,578,000 liabilities.


NOVADEL PHARMA: Ability to Continue Operations is in Doubt
----------------------------------------------------------
Management of Novadel Pharma Inc. believes that during the
third calendar quarter of fiscal 2005, it will be necessary for
the Company to obtain additional financing or consummate a well
funded strategic alliance with a business partner.  There are
a number of risks and uncertainties related to the Company's
attempt to complete a financing or strategic partnering
arrangement that are outside the control of the Company.  The
Company may not be able to successfully obtain additional
financing on terms acceptable to the Company, or at all.

Since its inception, substantially all of the Company's revenues
have derived from its consulting activities.  The Company has had
a history of recurring losses from operations, giving rise to an
accumulated deficit at April 30, 2004 of $20,499,000.

The Company anticipates that it will incur substantial operating
expenses in connection with the testing and approval of its
proposed delivery systems, and expects these expenses will result
in continuing and significant operating losses until such time, if
ever, that the Company is able to achieve adequate sales levels.

The Company's net loss for the 2004 period was $4,871,000 compared
to a net loss of $4,354,000 for the 2003 Period.

During January 2004, the Company completed a private offering of
units and received net proceeds of approximately $12,785,000.

The Company believes that it currently has sufficient cash to
satisfy its cash requirements into the third calendar quarter of
2005. However, beyond this point there is substantial doubt about
the Company's ability to continue operations.

                     About NovaDel Pharma

Novadel Pharma Inc., a Delaware corporation, is engaged in
development of novel application drug delivery systems for
presently marketed prescription and over-the-counter drugs and has
been a consultant to the pharmaceutical industry.  Since 1992,
the Company has used its consulting revenues to fund its own
product development activities.


OMI TRUST: S&P Junks M-2 Classes After Interest Payment Default
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the M-2
classes from OMI Trust 2000-A and OMI Trust 2000-C.

The lowered ratings reflect the unlikelihood that investors will
receive timely interest and the ultimate repayment of their
original principal investments.  OMI Trust 2000-C reported an
outstanding liquidation loss interest shortfall for its M-2 class
on the July 2004 payment date.  In addition, the rating on the
class M-2 for OMI 2000-A is being lowered in anticipation of a
liquidation loss interest shortfall on the next payment date.  
Standard & Poor's believes that interest shortfalls for these
deals will continue to be prevalent in the future, given the
adverse performance trends displayed by the underlying pools of
manufactured housing retail installment contracts originated by
Oakwood Homes Corporation, and the location of M-2 write-down
interest at the bottom of the transactions' payment priorities
(after distributions of senior principal).

High losses have reduced the overcollateralization ratios for both
transactions to zero, resulting in the complete principal write-
down of the B-2 and B-1 classes, and the partial principal write-
down of the M-2 classes.

Standard & Poor's will continue to monitor the outstanding ratings
associated with these transactions in anticipation of future
defaults.
   
                        Ratings Lowered
   
                        OMI Trust 2000-A
   
                                Rating
                    Class   To          From
                    M-2     CC          CCC-
   
                         OMI Trust 2000-C
   
                                Rating
                    Class   To          From
                    M-2     D           CC


ORDERPRO LOGISTICS: Sues Former CEO in Arizona State Court
----------------------------------------------------------
OrderPro Logistics Inc. (OTC BB: OPLO) has filed a complaint in
Superior Court of Pima County, Arizona, against its former chief
executive officer, Richard Windorski. The company is seeking
damages and injunctive relief, as necessary. The complaint alleges
that Mr. Windorski engaged in numerous schemes related to issuance
of the company's shares, including receipt of kickbacks related to
share issuances. The complaint also alleges that Mr. Windorski
diverted corporate funds without authorization for his personal
benefit, and failed to account for such funds. The complaint
states that additional defendants, including the recipients of the
improperly issued shares, may be named in the future.

"It is our intention to recover shares of company stock issued
illegally or improperly," stated Jeffrey M. Smuda, president and
chief executive officer of OrderPro Logistics Inc. The complaint
alleges that "tens of millions" of shares may have been improperly
issued. Mr. Smuda also stated, "We are pleased to have engaged the
law firm of Lewis and Roca LLP to represent the company in this
lawsuit and to provide us with additional legal services. Lewis
and Roca is one of the largest firms in Arizona and provides the
legal resources needed to assist us with these challenging
circumstances."

                  About OrderPro Logistics Inc.

OrderPro Logistics Inc. was created to capture the potential of
the Internet in the transportation and logistics industry by
employing new and innovative processes. OrderPro Logistics Inc.
can integrate every aspect of the customer shipping needs from
order entry through successful delivery. Customer priorities,
shipment integrity, best quality, and optimization of every load
is the objective of supply chain management with OrderPro
Logistics Inc. lowering costs while adding value in process and
service. For more information, please visit
http://www.orderprologistics.com/

                            *   *   *

                  Liquidity and Capital Resources

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

"Cash used for operating activities was approximately $715,000 in  
2004 as compared to approximately $266,000 in 2003. The use of  
cash in 2004 is the result of a net loss of approximately  
$6,313,000, partially offset by non-cash charges of approximately  
$5,839,000, and a net change in operating assets and liabilities  
of approximately $241,000. For 2003, a loss of approximately  
$617,000 was partially offset by non-cash charges of approximately  
$320,000 and a net increase in operating assets and liabilities of  
approximately $31,000.

"The accompanying condensed consolidated financial statements have  
been prepared on a going concern basis, which contemplates the  
realization of assets and the settlement of liabilities and  
commitments in the normal course of business. As reflected in the  
accompanying condensed consolidated financial statements, the
Company has a net loss of $6,313,458, a negative cash flow from  
operations of $714,627 and a working capital deficiency of  
$1,019,391. These factors raise substantial doubt about its  
ability to continue as a going concern. The ability of the Company  
to continue as a going concern is dependent on the Company's
ability to raise additional funds and become profitable. The  
consolidated financial statements do not include any adjustments  
that might be necessary if the Company is unable to continue as a  
going concern."


PACIFIC GAS: U.S. Trustee Amends Unsecured Creditors Committee
--------------------------------------------------------------
On July 28, 2004, William T. Neary, the United States Trustee for  
Region 17, advised the Court that Bank of America, N.A., Morgan  
Guaranty, and Pacific Investment Management Company, LLC, resigned
from the Official Committee of Unsecured Creditors.  The  
Committee is now composed of eight members:

   (1) Kenneth E. Smith  
       PE-Berkeley, Inc.  
       P.O. Box 776  
       Berkeley, CA 94701  
       Phone: 949/650-6301  
       fax: 949/650-8412  
       e-mail: ksmith@deltapower.com  
  
   (2) Mike Jines  
       Reliant Energy Services, Inc.  
       1111 Louisiana  
       P.O. Box 4567  
       Houston, Texas 77002  
       Phone: 713/207-7414  
       fax: 713/207-0116  
       e-mail: mike-jines@reliantenergy.com  
  
   (3) John C. Herbert  
       Dynegy Power Marketing Inc.  
       1000 Louisiana Street, Suite 5800  
       Houston TX 77002  
       phone: 713/507-6832  
       fax: 713/507-6788  
       e-mail: john.c.herbert@dynegy.com

   (4) Grant Kolling  
       City of Palo Alto  
       250 Hamilton Avenue  
       P.O. Box 10250  
       Palo Alto, CA 94303  
       Phone: 650/329-2171 ext.3953  
       fax: 650/329-2646  
       e-mail: grant_kolling@city.palo-alto.ca.us  
  
   (5) Tom Milne  
       State of Tennessee  
       11th Floor, Andrew Jackson Bldg.  
       Nashville, Tennessee 37243  
       phone: 615/532-1167  
       fax: 615/734-6441  
       e-mail: tmilne@mail.state.tn.us  
  
   (6) David E. Adante  
       The Davey Tree Expert Company  
       1500 North Mantua  
       Kent, OH 44240  
       Phone: 330/673-9511  
       fax: 330/673-7089  
       e-mail: david.adante@davey.com  
  
   (7) Duane H. Nelsen  
       GWF Power Systems Company, Inc.  
       4300 Railroad Ave.  
       Pittsburg, California 94565  
       phone: 925/431-1441  
       fax: 925/431-0518  
       e-mail: dnelsen@gwfpower.com  
  
   (8) Michael E. Lurie  
       Merrill Lynch  
       2 World Financial Center, #7  
       New York, New York 10281-6100  
       phone: 212/236-6480  
       fax: 212/236-6460  
       e-mail: mlurie@exchange.ml.com
  
Patricia A. Cutler is the Assistant U.S. Trustee assigned to  
PG&E's Chapter 11 case.  She is represented by trial attorneys  
Edward G. Myrtle, Frank M. Cadigan, and Julie M. Glosson, of the  
U.S. Department of Justice in San Francisco.

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


PARMALAT: Bondi Sues Citigroup for Fraud, RICO Violations, et al.
-----------------------------------------------------------------
Parmalat Finanziaria SpA in Extraordinary Administration
communicates that Dr. Enrico Bondi, Parmalat's Extraordinary
Commissioner, has filed an action in the Superior Court of New
Jersey to recover damages from Citigroup and certain of its
subsidiaries.

The action is part of a process through which the Extraordinary
Commissioner, following the approval of Parmalat's Industrial and
Financial Restructuring Plan, will seek recovery from third
parties believed to have played a role in Parmalat's collapse.

Parmalat's Industrial and Financial Restructuring Plan
contemplates the distribution to its future shareholders of at
least 50% of Parmalat's distributable profits arising from the
next 15 years' annual results, including any eventual proceeds
derived from revocatory actions or actions for damages.

             Citibank Manipulated Parmalat's Financials

Representing Dr. Enrico Bondi, Michael R. Cole, Esq., at
DeCotiis, Fitzpatrick, Cole & Wisler, LLP, in Teaneck, New
Jersey, tells the Superior Court of New Jersey, Bergen County Law
Division, that Citigroup, Inc., its investment services arm,
Citibank, N.A., and three Citibank special purpose entities
played crucial parts in the manipulations of Parmalat's reported
financial results to cover up Parmalat's true financial picture
and mask the systematic looting of the company.

Mr. Cole relates that Parmalat's expansion was not funded by the
sale of equity.  Parmalat sold billions of dollars in debt
securities through bonds or notes to raise funds for its
expansion.  Over $1,500,000,000 of the debt securities was sold
to U.S. investors, including well-known financial institutions
that have a significant presence in New Jersey:

    (1) Allstate Life Insurance Corp.
    (2) Bear, Stearns & Co, Inc.
    (3) CIGNA Retirement & Investment Services
    (4) Guardian Life Insurance Company of America
    (5) Hartford Life Insurance Company
    (6) Metropolitan Life Insurance Company
    (7) Nationwide Life Insurance Company
    (8) New York Life Insurance Company
    (9) Prudential Life Insurance Company

Since maintaining an investment grade credit rating was crucial
to Parmalat's ability to continue to obtain ongoing financing,
Citigroup designed transactions by which Parmalat raised hundreds
of millions of dollars by:

    -- high-interest financing disguised as equity; and

    -- securitizing non-existing assets.

Citigroup knew that the true nature of the transactions was not
disclosed or reflected in Parmalat's financial statements or
otherwise disclosed to the public.

Citigroup continued to arrange for hundreds of millions of
dollars in financing for Parmalat long after the company had
become insolvent, reaping tens of millions of dollars in fees and
commissions for itself.  Citigroup also facilitated the Parmalat
insiders' fraudulent schemes by allowing Parmalat's bank accounts
in the U.S. and elsewhere to be used by Parmalat's corrupt
managers and consultants to move money they had misappropriated.

With Citigroup's active assistance, Mr. Cole reports that around
$8,000,000,000 has been lost, stolen or wasted by the Parmalat
insiders.

                      Special Purpose Entities

The three Citibank special purpose entities are:

    1) Buconero, LLC, a Delaware limited liability company formed
       by Citibank in December 1999 and based in New York.
       Buconero's operations are overseen by Citibank Overseas
       Investment Corp.  Buconero is controlled by Citibank and is
       the alter ego of Citibank.  Buconero does not have separate
       offices or staff from Citibank;

    2) Vialattea, LLC, another Delaware limited liability company
       based in New York.  Vialattea is a wholly owned subsidiary
       of Citibank Overseas and is the direct parent of Buconero.
       Vialattea is controlled by Citibank and is the alter ego of
       Citibank.  Vialattea shares the same office and staff with
       Citibank;

    3) Eureka, plc, a United Kingdom public liability company
       based in England.  Eureka shares offices with Citibank,
       London Branch, and is managed by Citibank as part of its
       global securitization business.  Citibank and Citigroup,
       Inc., also provide credit lines and financial services to
       Eureka.

                Structure of Securitization Program

Under a 1995 securitization agreement designed by Citibank,
Parmalat and its subsidiary, Giglio SpA, could sell receivables
up to 150,000,000 lire, about $93,000,000, to Archimede
Securitization Srl, a wholly owned Italian subsidiary of Eureka,
on a revolving basis.  Archimede would purchase the receivables
using funds raised by Eureka, and then use the invoices as
collateral for the sale of securities to private investors.

                    1995 Securitization Program
                                             ____________
                                            |            |
                                            |  Citibank  |
                                            |____________|
                                                   |
                                             ______|_____
                                            |            |
                                            |   Eureka   |
                                            |____________|
                                               |   |
                                          (A)  |   |
                                               |   |   100%
                ____________                 __V___|_____
               |            |      (B)      |            |
               |  Parmalat  |<--------------|  Archimede |
               |____________|               |____________|

           (A) Eureka raises funds on the market for itself and
               for Archimede.

           (B) Archimede purchases Parmalat's Italian receivables.

Parmalat and Citibank worked out to expand the program to include
receivables from Parmalat operations in Canada and the United
States, and to add five more Italian subsidiaries to the program.
Parmalat's Canadian subsidiaries Parmalat Dairy & Bakery, Inc.,
and Parmalat Food, Inc., were also added in March 2000.  Farmland
Dairies, LLC, and Milk Products of Alabama, LLC, joined the
program in November 2000.

Under the 2000 agreement, Parmalat sold receivables from its U.S.
and Canadian operations to Eureka, and from its Italian
operations to Archimede.

Curcastle Corporation, N.V., a Parmalat subsidiary in Netherlands
Antilles, purchased subordinated notes issued by Eureka as a
partial guarantee for the securitized receivables.  The
subordinated notes served as a form of credit enhancement to
improve the creditworthiness of the securitized portfolio.  The
credit enhancement was necessary to maintain Eureka's credit
rating.  The subordinated notes were issued proportionately to
the amount of receivables transferred to Eureka.  The notes were
repayable only when all of the receivables sold by Parmalat had
been repaid, including expenses and interest.

The 2000 agreement was initially subject to a $300,000,000 global
maximum.  In December 2001, U.S. entities Mother's Cake and
Cookies Co. and Archway Cookies, LLC, were added to the program,
and the global maximum was increased to $340,000,000.

                    2000 Securitization Program

                         ____________              ____________
                        |            |            |            |
        ________________|  Curcastle |--------    |  Citibank  |
       |                |____________|        \   |____________|
       |                                       \         |
       |                                    (D) \        |
       |                                         \       |
  _____|_____         ___________________         V______|_____
|           |       |                   |        |            |
| Parmalat  |_______|      Parmalat     |<-------|   Eureka   |
|  Group    |       | (U.S. and Canada) |  (C)   |____________|
|___________|       |___________________|            |   |
       |                                        (A)  |   |
       |                                             |   |   100%
       |                  __ _________             __V___|_____
       |                 |            |     (B)   |            |
       |_________________|  Parmalat  |<----------|  Archimede |
                         |  (Italy)   |           |____________|
                         |____________|

           (A) Eureka raises funds on the market for itself and
               for Archimede.

           (B) Archimede purchases Parmalat's Italian receivables.

           (C) Eureka purchases Parmalat's U.S. and Canadian
               receivables.

           (D) Curcastle purchases subordinated notes issued by
               Eureka as a partial guarantee for the securitized
               receivables.  The notes are issued proportionately
               to the amount of receivables purchased.

Based on Parmalat's billing system, Citibank should have sold
supermarket invoices together with the dealer invoices it
purchased only after deducting the credit notes to the dealers.
Instead, Citibank sold to investors the supermarket invoices and
the entire dealer invoices as if they were separate invoices for
separate goods, even though Parmalat was entitled to receive
money from just one set of invoices.  Citibank, therefore, double
counted the invoices, and defrauded investors into thinking that
they were acquiring the rights to a revenue stream that was
nearly twice as high as it was in reality.

The securitization program was intended to and did create the
false impression that Parmalat was generating nearly twice as
much cash flow from its operations and, therefore, mislead the
markets about Parmalat's real financial situation.

Citibank, on behalf of Eureka, sold $348,000,000 of securities,
backed in substantial part by the phantom receivables.  For its
part in the securitization program, Citibank received $35,000,000
in fees.

Citibank knew that it and its special purpose vehicles, Archimede
and Eureka, had no credit risk because all of the risk was passed
to the purchasers of the securities.

                       Buconero Transactions

In December 1995, Gestione Centrale Latte Srl, a Parmalat
subsidiary, and Citibank International plc entered into a joint
venture, wherein Citibank International would "invest" in the
joint venture.  As part of the joint venture, Parmalat set up a
branch of Geslat in Lugano, Switzerland, whose purpose was to
obtain funds in Switzerland from the international financial
markets and then invest the funds in other companies of the
Parmalat group.

Citibank "invested" 750,000,000 lire, about $491,604, in Geslat.
In return, Citibank was to receive 48.75% of the distributable
after tax profits from Geslat.  Citibank also entered into a put
option agreement with Parmalat that allowed Citibank to put its
interest in Geslat back to Parmalat.  The put guaranteed that
Citibank would receive a return on its investment.

In 1999, Citibank proposed a new arrangement.  Instead of
Citibank partnering directly with Geslat, two Citibank
subsidiaries, Vialattea and Buconero, would become the members of
the joint venture.  Both subsidiaries were formed for the sole
purpose of entering into the transaction.

Buconero is Italian for black hole.

Under the 1999 agreement, Parmalat, as a "partner," made a
$60,000,000 contribution to Geslat's Swiss branch.  On the same
day, Parmalat transferred its interest to Buconero for the same
amount.

The Swiss branch was supposed to lend the $60,000,000 it received
to other companies in the Parmalat group.  Buconero, as a
"joining partner," was to share the profits of the Swiss branch
based on a preset formula and would share the Swiss branch's
losses up to the amount of Buconero's investment.

Vialattea also "contributed" $208,000 to Geslat -- 2% of Geslat's
capital.

For structuring the transaction, Parmalat paid Citibank a
$1,000,000 structuring fee.

Under the 1999 agreement, Geslat's Swiss branch would "endeavor
to earn a pre-tax return on its invested capital of no less than
5.68% per [year] net all of the costs and expenses (the 'Minimum
Investment Return')."

In December 2000, the joint venture agreement was amended.  Among
other modifications, the provisions regarding the calculation of
compensation due to Buconero were changed and the Minimum
Investment Return was increased to 5.86%.  For this Parmalat paid
Citibank another $3,270,000 structuring fee.

The joint venture agreement was modified again on July 31, 2001.
As part of the amendment, Buconero "invested" an additional
$50,000,000 in Geslat's Swiss branch and Vialattea "invested" an
additional $2,400,000 in Geslat, raising its share of Geslat's
capital to 2.044%.  For this, Parmalat paid Citibank another
$2,800,000 structuring fee.

                     "Joint Venture" Structure
       _________________                           ____________
      |                 |                         |            |
      | Parmalat Group  |                         |  Citibank  |
      |_________________|                         |____________|
               |                                         |
               |                                         |  100%
               |                                   ______|_____
               |   98%                  2%        |            |
               |                __________________| Vialattea  |
               |               |                  |____________|
               |               |       (A)               |
               |      _________|_________                |   100%
               |     |                   |         ______|_____
               |_____|      Geslat       |        |            |
                     |___________________|------->|  Buconero  |
                               |                  |____________|
                               |             (C)         |
                      _________|_________                |
                     |                   |               |
                     |    Swiss Brach    |<--------------   (B)
                     |___________________|
                                                 $137,000,000

           (A) Vialattea purchases a 2% ownership interest in
               Geslat.

           (B) Buconero "invests" $137,000,000 in Geslat's Swiss
               branch.

           (C) Buconero receives a percentage of Geslat's profits
               as a return on its "investment."

Parmalat's insiders recorded each of the "investments" from
Buconero as equity on the company's consolidated financial
statements.  The interest payments on the loans from Buconero
were recorded as "minority interest payments."

However, Mr. Cole tells the New Jersey Court that the Buconero
"investments" were actually disguised loans, not equity:

    a) The joint venture agreement guaranteed that Citibank would
       receive a minimum fixed rate of return of 5.68% -- later
       increased to 5.86%;

    b) Citibank would not lose any money from the joint venture
       because Buconero would pay for losses only when the losses
       exceeded the contributions of Geslat's other members and
       the dividends previously paid to the other members of the
       joint venture; and

    c) Before Geslat's losses could consume the other members'
       contributions, Citibank could terminate the joint venture.
       Citibank could "dismantle" the joint venture and require
       the repayment of its exposure in case of "events
       indicative of deterioration of the value of the credit to
       [Parmalat Group]" or in case of a decline in the Swiss
       branch's performance.

Citibank knew and intended that Parmalat would and did use the
Buconero arrangement to:

    (a) make it appear that Parmalat was "partnering" with a
        "major" international group; and

    (b) improve its financial statements by appearing to have
        lower amounts of debt than it actually had.

Mr. Cole maintains that Citibank had a direct interest in the
mischaracterization of the Buconero transactions on Parmalat's
financial statements because Citibank reaped a number of
considerable tax benefits.

As a result of the Buconero arrangement, Parmalat's:

       (i) debt was understated by $137,000,000;

      (ii) equity was overstated by $137,000,000; and

     (iii) income statements understated its interest expense.

Citibank received $5,000,000 to $6,000,000 annually in returns
from Geslat as a result of the Buconero arrangement.  Citibank
received $7,000,000 more in fees from Geslat -- approximately
$1,000,000 for structuring the 1999 deal, $3,270,000 for
structuring the 2000 amendment, and $2,800,000 for structuring
the 2001 amendment.

             Citibank's "Investment" in Parmalat Canada

In separate transactions, Parmalat purchased Dairy & Bakery,
Inc., formerly known as Beatrice Foods, Inc., for CN$420,000,000
and Ault Foods, Ltd., for CN$412,000,000.  To finance the
purchases, Parmalat borrowed $70,000,000 from Citibank.  Rather
than calling the $70,000,000 payment a loan, Citibank structured
it to appear as an equity investment.  Citibank "purchased" a
24.9% stake in Parmalat Canada by making capital contributions to
Parmalat Canada totaling CN$97,000,000 in April and July 1997.
Citibank made a third contribution for CN$24,900,000 in October
1997.

Citibank used the same scheme when Parmalat acquired Astro Dairy
Products, Ltd., in 1998 for CN$483,000,000.  As part of the
transaction, Citibank made an additional CN$50,000,000 "capital
contribution" to Parmalat Canada in November 1998.

Each time Citibank made a "capital contribution," Dairies Holding
International B.V., the direct parent of Parmalat Canada, would
make a contribution to Parmalat Canada that amounted to 75.1% of
the total increase in capital.

On the surface, Citibank appeared to obtain a 24.9% ownership
interest in Parmalat Canada.  This percentage was used because,
under Canadian tax law, there is no capital gains tax on share
interests of less than 25%.

In reality, the Citibank "investments" were high interest loans.
Citigroup never intended to take any risk by becoming a minority
shareholder.  Citigroup protected its Parmalat "investments" from
any loss by requiring Parmalat to enter into a secret put
agreement that guaranteed that Citibank would receive a return on
its investment.  The put agreement was never disclosed to
Parmalat's regulators, shareholders and creditors.  The put
agreement allowed Citibank to sell back to Parmalat its ownership
interest in Parmalat Canada at a set price.  The first put
agreement was entered into as part of an April 10, 1997 capital
increase.  The exercise price for the put was CN$70,000,000.

From 1997 until 2001, Citibank increased the put price by
amending the put agreement with each new transaction.  In April
2001, Parmalat and Citibank made a final amendment to the put
option, increasing the exercise price to CN$182,300,000 as of
December 31, 2001.

In January 2002, Citibank exercised the put option.  In the
process, Citibank received a CN$47,820,000 tax-free profit.

Mr. Cole asserts that Citibank knew from the inception about
Parmalat's deteriorating financial condition, but designed the
transactions to help Parmalat maintain the facade of a lower
debt-to-equity ratio.  In return, Citibank received CN$1,300,000
in subscription fees from Parmalat Canada and CN$5,600,000 in
financial advisor fees, in addition to its net tax-free gain.

              Citibank Ignored Questionable Transfers

Between January 2002 and August 2003, at least $27,000,000 was
transferred from the foreign bank accounts of two Parmalat
subsidiaries -- Parmalat Capital Finance, Ltd., and Parmalat
Trading Limited Malta -- to the Citibank accounts of Gian Paolo
Zini, Parmalat's outside counsel.  Mr. Zini maintained an escrow
account and other accounts at Citibank.

Of that amount, $18,000,000 was transferred directly to one of
Zini's Citibank accounts.  Another $9,900,000 was transferred to
Zini's Citibank account by way of Citibank London.

Based on the nature and size of the transfers, Citigroup knew or
should have known that Mr. Zini's accounts were being used for
money-laundering and other irregular transactions.  However,
Citibank took no steps to prevent Mr. Zini and other Parmalat
insiders from using those accounts to transfer funds among some
very dubious entities into and out of Citibank bank accounts and
into and out of bank accounts in financial secrecy havens
throughout the world.

          Citigroup Top Level Execs Approved Transactions

The fraudulent activities were perpetuated with the direct
knowledge, participation and involvement of Citibank employees.
The transactions were all approved at the top levels of Citigroup
and required the coordination of different groups at Citigroup
throughout the world, from New York to New Jersey to England and
Italy itself.

Citigroup's relationship with Parmalat was initially managed by
Alberto Ferraris, then vice-president of Citibank's Milan office.
Mr. Ferraris was involved in many of the transactions.  In 1997,
Mr. Ferraris left Citibank to join Parmalat.  He later became
Parmalat's Chief Financial Officer.

From 1997 to 2000, the relationship was managed by Citibank
employee Filippo Sabatini.  Since 2000, Citibank employee Paolo
Botta has managed the relationship.

Citibank employee Donna Carville was a key person in setting up
and managing the Buconero "joint venture."  Citibank managing
director Richard Simmons and employees Peter Davies and Drew
Riethnuller were involved with setting up the securitization
program.

                  Virtually Worthless Investments

The scam resulted in billions of dollars of losses to Parmalat
and to the thousands of innocent shareholders and creditors in
the United States and elsewhere.  The scam rendered the
investments virtually worthless.

                Parmalat's Claims Against Citigroup

Dr. Bondi asks the Superior Court to find that:

       (i) the Citigroup transactions were fraudulent.  Citigroup
           continued to arrange financing for Parmalat without
           telling Parmalat's regulators, market analysts and
           others that:

           -- the transactions were other than what Citigroup and
              Parmalat had made them seem to be; and

           -- their financial reality was not reflected on
              Parmalat's financial statements.

      (ii) Citigroup aided and abetted in constructive fraud and
           in breach of fiduciary duty.  Citigroup gave
           substantial assistance to the Parmalat insiders:

           * Calisto Tanzi, former Parmalat CEO and President;

           * Fausto Tonna, former Parmalat CFO;

           * Luciano Del Soldato, former member of Parmalat's
             finance staff and for a time Parmalat's CFO;

           * Alberto Ferraris, formerly with Citibank and then the
             CFO of Parmalat;

           * Gianfranco Bocchi, former member of the finance
             department;

           * Franco Gorreri, a former company officer;

           * Claudio Pessina, a former company officer; and

           * Gian Paolo Zini, Parmalat's outside counsel,

           in breaching their fiduciary duty to act at all times
           with the utmost good faith and fair dealing in the best
           interest of Parmalat and its stakeholders.

     (iii) Citigroup made negligent misrepresentations.  Investors
           relied on the reported nature of Parmalat's contracts,
           transactions and arrangements with Citigroup, and
           Parmalat's financial statements, audits and other
           reports that were prepared and disseminated based on
           the Citigroup transactions.

      (iv) Citigroup was an active, willing and knowing
           participant in the unlawful diversion and re-channeling
           of corporate funds or assets to purposes other than
           proper corporate purposes.

       (v) Citigroup was unjustly enriched.

      (vi) Citigroup aided and abetted in fraudulent transfers and
           creditor fraud.

     (vii) Citigroup willfully and knowingly aided and assisted
           Parmalat's culpable insiders in continuing to borrow
           billions of dollars of money and at the same time
           concealing their wrongful conduct.  As a result,
           Parmalat went further into debt and became incapable of
           surviving without going into bankruptcy.

    (viii) Citigroup was an active, knowing participant in the
           conspiracy of the Parmalat insiders.

      (ix) Citigroup engaged in a pattern of racketeering activity
           in violation of the New Jersey RICO (Racketeer
           Influenced and Corrupt Organizations) Act, N.J.S.A.
           2C:41-1, et seq.  Citigroup, among others, falsified
           and aided and abetted the falsification of records and
           the commission of theft and deception.  Citigroup
           engaged in money laundering and in transactions with
           money derived from unlawful activity in violation of
           N.J.S.A. 2C:21-25 and 2C:2-6, and 18 U.S.C. Sections
           1956 and 1957.  The violations of Citigroup and the
           Parmalat insiders caused Parmalat to suffer direct
           injury to its business and property through the more
           than $10,000,000,000 that was taken from it over the
           course of years beginning at least in 1998 and
           continuing to late 2003.

       (x) Citigroup, along with the Parmalat insiders, operated
           and controlled an "enterprise" consisting of Parmalat
           Finanziaria, SpA, Parmalat SpA, and their subsidiaries
           and affiliates within the meaning of N.J.S.A.
           2C:41-1(c).  Citigroup conducted the affairs of the
           "Parmalat Enterprise" through a pattern of
           racketeering activity.

Dr. Bondi seeks an award of damages, among others:

    -- for all losses Parmalat incurred as a result of Citigroup's
       acts; and

    -- to compensate Parmalat for the losses Parmalat's
       bondholders, noteholders and other lenders as well as
       Parmalat's shareholders have incurred as a result of
       Citigroup's acts.

Dr. Bondi also seeks the establishment of a constructive trust
for Parmalat's benefit to be placed on any identifiable funds and
assets that were stolen or fraudulently transferred from
Parmalat, as well as on any identified assets that those funds or
assets were used to acquire.

Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- generates more than 7 billion  
euros in annual revenue.  The Parmalat Group's 40-some brand
product line includes milk, yogurt, cheese,  butter, cakes and
cookies, breads, pizza, snack foods and vegetable sauces, soups
and juices and employs over 36,000 workers in 139 plants located  
in 31 countries on six continents.  The Company filed for chapter
11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No.
04-11139).  Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at
Weil Gotshal & Manges LLP represent the Debtors in their
restructuring efforts.  On June 30, 2003, the Debtors listed
EUR2,001,818,912 in assets and EUR1,061,786,417 in debts.
(Parmalat Bankruptcy News, Issue No. 27; Bankruptcy Creditors'
Service, Inc., 215/945-7000)   


PARMALAT: Antitrust Authority Probes Newlat & Carnini Transactions
------------------------------------------------------------------
Parmalat Finanziaria SpA in Extraordinary Administration
communicates that the Antitrust Authority initiated two
investigations on July 22, 2004 with regard to Parmalat.  The
investigations have been communicated to Parmalat on July 27, 2004
and have been published on the website of the Antitrust Authority.

The first contends that Parmalat did not respect the conditions
imposed by the Antitrust Authority in 1999 relating to the
authorization of the acquisition of Eurolat from the Cirio Group,
and specifically its failure to divest, Newlat to which certain
brands and facilities had been transferred.  The second cites the
failure to communicate in advance to the Authorities the
acquisition of a controlling position in Carnini.  The actions
that are the subject of the Antitrust Authority's investigation,
in which the current Extraordinary Administration of Parmalat had
no role whatsoever, are entirely attributable to the previous
management of Parmalat.

The initiations of these steps by the Antitrust Authority were
preceded by a request for information by the Authority to Parmalat
Finanziaria SpA in Extraordinary Administration which the latter
fulfilled providing all the relevant information in its possession
and cooperating fully in the preliminary phases of the Authority's
inquiries.

Parmalat Finanziaria SpA in Extraordinary Administration does not
currently manage either Newlat or Carnini.  On the basis of
information in his possession or which has been reported in the
press, Extraordinary Commissioner, Dr Enrico Bondi, took the
limited but prudent step, in the interest of all the creditors,
of recognizing in March 2004 ownership of the holdings in Newlat
and Carnini.

Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- generates more than 7 billion  
euros in annual revenue.  The Parmalat Group's 40-some brand
product line includes milk, yogurt, cheese,  butter, cakes and
cookies, breads, pizza, snack foods and vegetable sauces, soups
and juices and employs over 36,000 workers in 139 plants located  
in 31 countries on six continents.  The Company filed for chapter
11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No.
04-11139).  Gary Holtzer, Esq., and Marcia L. Goldstein, Esq.,
at Weil Gotshal & Manges LLP represent the Debtors in their
restructuring efforts.  On June 30, 2003, the Debtors listed
EUR2,001,818,912 in assets and EUR1,061,786,417 in debts.
(Parmalat Bankruptcy News, Issue No. 27; Bankruptcy Creditors'
Service, Inc., 215/945-7000)   


PENN OCTANE CORP: Auditors Raise Going Concern Doubt
----------------------------------------------------
The auditing firm of Burton, McCumber & Cortez, L.L.P. in
Brownsville, Texas, included an explanatory paragraph in Penn
Octane Corporation's financial statements as of July 31, 2003,
raising substantial doubt about the Company's ability to continue
as a going concern.  

These facts were previously contained in the firm's Auditors
Report to the Board of Directors of Penn Octane Corporation, and
dated May 28, 2004.

The Company has had an accumulated deficit since its inception and
has historically had a deficit in working capital.  In addition,
significantly all of the Company's assets are pledged or committed
to be pledged as collateral on existing debt in connection with
the Restructured Notes, the $280,000 Notes and the RZB Credit
Facility.  The RZB Credit Facility is to be reduced from $15
million to $12 million after September 30, 2004 unless a
further extension is obtained.  

The Company and RZB are currently in negotiations to maintain the
credit facility at $15.0 million for a longer term. The Company
may need to increase its credit facility for increases in
quantities of LPG purchased and/or to finance future price
increases of LPG.  The Company depends heavily on sales to one
major customer.  

Since April 1, 2004 the Company has been operating on month-to-
month contracts with PMI.  The Company's sources of liquidity and
capital resources historically have been provided by sales of LPG,
proceeds from the issuance of short-term and long-term debt,
revolving credit facilities and credit arrangements, sale or
issuance of preferred and common stock of the Company and proceeds
from the exercise of warrants to purchase shares of the Company's
common stock.

In addition to the above, the Company intends to Spin-Off a major
portion of its assets to its stockholders.  As a result of the
Spin-Off, the Company's stockholders' equity will be materially
reduced by the amount of the Spin-Off, which may result in a
deficit in stockholders' equity and a portion of the Company's
current cash flow from operations will be shifted to the
Partnership. Therefore, the Company's remaining cash flow may not
be sufficient to allow the Company to pay its federal income tax
liability resulting from the Spin-Off, if any, and other
liabilities and obligations when due.  The Partnership will be
liable as guarantor on the Company's collateralized debt discussed
in the preceding paragraph and will continue to pledge all of its
assets as collateral. In addition, the Partnership has agreed to
indemnify the Company for a period of three years from the fiscal
year end that includes the date of the Spin-Off for any federal
income tax liabilities resulting from the Spin-Off in excess of
$2.5 million.

If the Company's cash flow from operations is not adequate to
satisfy such payment of liabilities and obligations and/or tax
liabilities when due and the Partnership is unable to satisfy its  
guarantees and /or tax agreement, the Company may be required to
pursue additional debt and/or equity financing. In such event, the
Company's management does not believe that the Company would be
able to obtain such financing from traditional commercial lenders.

In addition, there can be no assurance that such additional
financing will be available on terms attractive to the Company, or
at all. If additional financing is available through the sale  
of the Company's equity and/or other securities convertible
into equity securities through  public or private financings,
substantial and immediate dilution to existing stockholders may
occur. There is no assurance that the Company would be able to
raise any additional capital if needed. If additional financing
cannot be accomplished and the Company is unable to pay its
liabilities and obligations when due or to restructure certain
of its liabilities and obligations, the Company may suffer
material adverse consequences to its business, financial condition
and results of operations.

                  About Penn Octane Corporation

Penn Octane Corporation's principal activities are to purchase,
transport and market liquefied petroleum gas (LPG) in the United
States. It owns and operates a terminal facility in Brownsville,
Texas and owns a LPG terminal facility in Matamoros, Tamaulipas,
Mexico and pipelines that connect the Brownsville Terminal
Facility to the Matamoros Terminal Facility. The primary market
for the Group's LPG is the northeastern region of Mexico which
includes the states of Coahuila, Nuevo Leon and Tamaulipas.


PILLOWTEX CORP: Hires Towers Perrin as to Fight PBGC Claims
-----------------------------------------------------------
Pillowtex Corporation and its debtor-affiliates sought and
obtained the Court's authority to employ Towers Perrin Forster &
Crosby, Inc., as special bankruptcy consultants and actuaries.

Towers Perrin is a global consulting firm with offices located at
600 Grant Street in Pittsburgh, Pennsylvania.  Towers Perrin
provides global actuarial consulting services to clients and has
extensive experience in performing those services for entities in
Chapter 11 proceedings.

Pillowtex Vice President, General Counsel and Secretary, John F.
Sterling, relates that since the Petition Date, the Debtors
developed procedures to handle various matters arising in the
course of the administration of these cases and the liquidation
of the estate's assets.  These procedures include the settlement
of claims relating to the Debtors' two defined pension plans.

The Debtors believe that Towers Perrin is well qualified and able
to assist them in a cost-effective, efficient and timely manner
to evaluate the accuracy of Pension Benefit Guaranty Corp.'s
calculation of claims in relation to the Pension Plans.

As consultants, Towers Perrin will:

    (a) quantify the amount of PBGC's claims with regard to the
        termination of the Pension Plans; and

    (b) assist the Debtors in objecting to PBGC's claim
        calculations or in negotiating a settlement with PBGC.

Specifically, Towers Perrin will be:

    -- developing recommended assumptions and methods for
       measuring the Pension Plans' obligations;

    -- negotiating with PBGC representatives regarding the
       liabilities of the Pension Plans; and

    -- providing an affidavit for court filings relating to Towers
       Perrin's calculation of the PBGC claims.

Towers Perrin will be compensated on an hourly basis at rates in
effect at the time of performance of the services.  Currently,
Towers Perrin's hourly billing rates are:

       William Daniels                  $585
       Principals                        480 - 690
       Consultants                       345 - 525
       Associates                        107 - 315

The Debtors will reimburse Towers Perrin, at cost, for all of the
expenses it will reasonably incur in connection with the
performance of the services.  Additionally, the Debtors will
compensate Towers Perrin for the amount of any tax or similar
assessments levied or based on Towers Perrin's charges or
provision of services other than assessments based on Towers
Perrin's net income.

Towers Perrin will consider performance of additional services at
the Debtors' request.  If the additional or different services
can be clearly defined, Towers Perrin will perform those services
on a fixed fee basis.  If the services exceed $10,000, Towers
Perrin will provide the Debtors with an estimate of the costs of
the services to be performed.  The additional or different
services would be subject to Court approval.

Towers Perrin member, William Daniels, assures the Court that the
firm has no connection with, and holds no interest adverse to the
Debtors, their estates, their creditors or any other party-in-
interest in the matters for which Towers Perrin will be employed.

Mr. Daniels believes that Towers Perrin is a "disinterested
person" within the meaning of Sections 101(14) and 1107(b) of the
Bankruptcy Code.

Headquartered in Dallas, Texas, Pillowtex Corporation --
http://www.pillowtex.com/-- sold 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), emerged from bankruptcy under a
chapter 11 plan, and filed a second time on July 30, 2003 (Bankr.
Del. Case No. 03-12339).  The second chapter 11 filing triggered
sales of substantially all of the Company's assets.  David G.
Heiman, Esq., at Jones Day, and William H. Sudell, Jr., Esq., at
Morris Nichols Arsht & Tunnel, represent the Debtors.  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)    


PNC MORTGAGE: S&P Affirms Low B-Ratings on Six Certificate Classes
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on seven
classes of PNC Mortgage Acceptance Corporation's commercial
mortgage pass-through certificates from series 2000-C2.  
Concurrently, ratings on eight other classes from the same
transaction are affirmed.

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 12, 2004 remittance report, the collateral pool
consisted of 175 loans with an aggregate principal balance of
$1,009 million, down from 185 loans totaling $1,076 million at
issuance.  The master and special servicer, Midland Loan Services,
Inc., provided net cash flow -- NCF -- debt service coverage (DSC)
figures for 95% of the pool.  Based on this information, Standard
& Poor's calculated a weighted-average DSC of 1.31x, slightly down
from 1.35x at issuance.  One loan ($2.7 million, 0.3% of the pool)
is defeased. Only two loans in the pool are delinquent at 30 and
90 days past due, respectively.  The remaining loans in the pool
are current.  To date, the trust has experienced no losses.

The top 10 loans have an aggregate outstanding balance of
$352.2 million (35%).  The weighted average DSC for the top 10
loans is 1.28x, down slightly from 1.33x at issuance. Standard &
Poor's reviewed property inspections performed over the past year,
provided by Midland for all of the assets underlying the top 10
loans.  All were characterized as "good" or "excellent".

There are three loans with an aggregate outstanding balance of
$14 million (1.4%) that are with the special servicer.  The
largest specially serviced asset, a 94,000-sq.-ft., office
facility in Richmond, California, has an outstanding principal
balance of $10.5 million (1.0%).  The loan is current and was
transferred to the special due to nonmonetary default and will be
reviewed by the special.  The second loan has a principal balance
of $1.9 million (0.2%) and is secured by a 90-room lodging
property in Waxahachie, Texas.  The asset was sold recently and a
moderate loss on the loan will be reflected on the next remittance
report.  The last loan, which was transferred to the special
servicer last week, is a 30-day delinquent loan secured by a $1.6
million multifamily loan in Corsicana, Texas.  A payment was
received in July that was applied to the June payment.

Midland's watchlist consists of 30 loans with an aggregate
outstanding balance of $154.6 million (15%), including the third-
largest loan in the pool.  The loan ($43 million, 4.3%) is secured
by a 224-room Courtyard By Marriot hotel in New York City.  The
property had a Dec. 31, 2003 NCF DSC and occupancy of 1.10x and
88%, respectively.  The property posted a much healthier net
operating income DSC of 1.28x, and posted a relatively strong full
year 2003 average daily rate of $188 and revenue per available
room of $165.

The trust collateral is located across 36 states, and only New
York (25%) and California (17%) account for more than 10% of the
pool balance.  After removing collateral for the defeased loan,
property concentrations greater than 10% of the pool balance are
found in retail (32%), office (32%), and multifamily (18%)
properties.

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.
    
                         Ratings Raised
   
              PNC Mortgage Acceptance Corporation
   Commercial mortgage pass-thru certificates series 2000-C2
   
                    Rating
         Class   To        From   Credit Enhancement (%)
         -----   --        ----   ----------------------
         B       AAA       AA                     21.06
         C       AA-       A                      16.26
         D       A+        A-                     14.93
         E       A         BBB+                   11.73
         F       A-        BBB                    10.13
         G       BBB+      BBB-                    8.26
         H       BBB-      BB+                     5.33
   
                        Ratings Affirmed
   
              PNC Mortgage Acceptance Corporation
   Commercial mortgage pass-thru certificates series 2000-C2
    
         Class   Rating   Credit Enhancement (%)
         -----   ------   ----------------------
         A-1     AAA                      25.32
         A-2     AAA                      25.32
         J       BB                        5.33
         K       BB-                       4.53
         L       B+                        3.73
         M       B                         2.67
         N       B-                        2.13
         X       AAA                       N/A
   
                 N/A -- Not applicable


POLYONE CORP: Fitch Affirms Low-B Ratings Despite Improvement
-------------------------------------------------------------
Fitch Ratings has affirmed PolyOne Corporation's credit ratings
even though the company's EBITDA strengthened considerably in the
second quarter.  PolyOne's senior secured credit facility rating
is 'BB-' and its senior unsecured debt rating is 'B'.  The Rating
Outlook is Negative.

The ratings reflect PolyOne's improving but weak financial
performance and adequate liquidity.  Higher volumes, higher
selling prices, and favorable currency exchange rates supported
higher operating margins during the first six months of 2004.
However, the improvement comes after a very weak performance in
2003.

Credit statistics remained weak even as sales improved to
$2.1 billion and EBITDA reached $99.7 million for the trailing
12-month period ended June 30, 2004, compared with $2.0 billion
and $58.9 million EBITDA at year-end 2003. Total debt-to-EBITDA
(including accounts receivable securitization) was 8.0 times (x)
for the last 12 months ended June 30, 2004, while EBITDA-to-
interest incurred was 1.3x.  These statistics do compare favorably
to year-end 2003 statistics of 14.5x for total debt-to-EBITDA and
0.8x for EBITDA-to-interest, although they continue to be at weak
levels.

Liquidity is adequate and continues to support the ratings.
PolyOne reported $52.7 million in cash and $180.5 million
available from various capital resources while remaining in
compliance with covenants at the end of the second quarter.  These
resources are more than adequate to retire current maturities of
$27.2 million reported at June 30, 2004.

Fitch expects asset sales to temporarily bolster liquidity in
preparation for upcoming cash needs.  Cash proceeds from the
completed sale of the Elastomers and Performance Additives
business will likely be earmarked for near-term maturities,
including 2005 maturities of $98.8 million.  Cash proceeds from
future asset sales would likely be used to reduce debt and to
fulfill pension obligations.  The size of the receivables
securitization program and the credit facility declined concurrent
with the close of the Elastomers and Performance Additives sale.

The Negative Rating Outlook reflects the near-term uncertainty in
EBITDA recovery.  PolyOne's business portfolio has changed with
the designation of discontinued operations in 2003. As a result,
mid-cycle EBITDA levels are yet unknown.  Moreover, margins remain
under pressure from higher raw material costs.

PolyOne, headquartered in Avon Lake, Ohio, is the largest
compounder of plastics and a leading distributor of plastic resins
in North America.  At the end of the second quarter, PolyOne's
debt (including the A/R program balance) totaled $800.0 million,
of which $780.9 million is public debt.


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

Judge Drain approved indemnification provisions contained in an
Engagement Letter subject to these conditions:

   (a) All of Chanin Capital Partners' requests for payment of
       indemnity, contribution or otherwise pursuant to the
       Indemnification Provisions will be made by means of an
       application and will be subject to Court review to ensure
       that the payment of the indemnity conforms to the terms of
       the Indemnification Provisions, and is reasonable based on
       the circumstances of the litigation or settlement in
       respect of which the indemnity is sought, provided that in
       no event will Chanin Capital be indemnified in the case of
       its own bad-faith, self-dealing, breach of fiduciary duty,
       gross negligence or willful misconduct;

   (b) In no event will Chanin Capital be indemnified if RCN Corp.
       and its debtor-affiliates or a representative of the
       Debtors' estates, asserts a claim for, and a court
       determines by final order that the claim arose out of,
       Chanin Capital's own bad-faith, self-dealing, breach of
       fiduciary duty, gross negligence or willful misconduct; and

   (c) In the event that Chanin Capital seeks reimbursement for
       attorney's fees from the Debtors pursuant to the
       indemnification as set forth in the Indemnification
       Provisions, the invoices and supporting time records from
       the attorneys will be included in Chanin Capital'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 Court's approval under
       the standards of Sections 330 and 331 of the Bankruptcy
       Code, without regard to whether the attorney's services
       satisfy Section 330(a)(3)(C).

                  Indemnification Provisions

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

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

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

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

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

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

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

Additional details about Chanin's engagement appeared in the
Troubled Company Reporter on July 23, 2004.

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: Liquidator Wants to Sell 15-Acre Parcel for $2.6 Million
------------------------------------------------------------------
M. Diane Koken, the Insurance Commissioner of the Commonwealth of   
Pennsylvania, as Liquidator of Reliance Insurance Company,
proposes to sell certain parcels of real property to Melvin Lenkin
and William Walde for $2,638,047.

The Liquidator will sell to Messrs. Lenkin and Walde the real  
property at the Ryan Park Center, in Loudoun County, Virginia,  
which totals 15.25 acres:

   (1) Part of Parcel 25A (Area C), 0.7468 acres;
   (2) Parcel 25E, 4.2161 acres;
   (3) Parcel 25F, 4.5597 acres;
   (4) Parcel 25G, 3.5612 acres;
   (5) Parcel 25H, 1.9127 acres; and
   (6) Part of Parcel 25A, Area A, 0.2591 acres.

Only Parcels 25E, 25F, 25G and 25H are useable.  The total  
useable acreage within the Property is 14.2497 acres.

The Ryan Park Center is comprised of over 111 acres of land.  The  
Center was acquired by a RIC subsidiary for $11,009,000, on  
April 3, 1989, as part of a larger transaction.  The unit cost  
was $2.28 per square foot.  Subsequently, 34 acres were dedicated  
for toll road construction and three acres were reserved for mass  
transit parking.  Additionally, 59 acres have been sold in a  
series of transactions approved by the Commonwealth Court for a  
total consideration of $11,450,000.

As in the past transactions, the Liquidator employed the services  
of CB Richard Ellis to assist in the marketing and sale of the  
remainder of the Center, which consisted of several parcels.  CB  
Richard Ellis extensively marketed the remainder of the Center  
for over 18 months, but was able to sell only two parcels.  To  
liquidate the holdings expeditiously, CB Richard Ellis solicited  
offers for the remainder of the Center in its entirety, instead  
of parcel by parcel.  The 15.25 acres includes the entirety of  
RIC's remaining interest in the Center.

Two offers were received, one of which was from Foulger-Pratt  
Development, Inc.  The Foulger-Pratt offer was selected for its  
higher price and proposed superior settlement terms.  The  
Foulger-Pratt transaction also proposed the sale of RIC's right,  
title and interest in a Re-Purchase Option for 3.7979 acres of  
reserved property at the Ryan Park Center.  RIC's interest in the  
Re-Purchase Option was created by the Parcel 25D Sale Agreement  
that was approved by the Commonwealth Court on April 9, 2003.   

Under the Foulger-Pratt Agreement, RIC would sell the Property  
for $2,638,047, or $4.25 per square foot for all useable land.   
RIC would also sell the Re-Purchase Option for $4.25 per square  
foot, which amounted to $703,105.  The total purchase price  
equaled $3,341,152.

On December 22, 2003, at the end of the Feasibility Study Period,  
Foulger-Pratt terminated its contract to purchase the Property  
and the Re-Purchase Option.  However, CB Richard Ellis continued  
to receive inquiries from other parties.  Upon notice of the  
Foulger-Pratt termination, CB Richard Ellis contacted Messrs.  
Lenkin and Walde, who had previously expressed interest.  Messrs.  
Lenkin and Walde submitted an offer in response to the overture.

                     The Transaction Terms

At RIC's request, Messrs. Lenkin and Walde will not purchase the  
Re-Purchase Option.  RIC believes that it is in a better position  
to liquidate the Re-Purchase Option by negotiating directly with  
other possible purchasers.

Messrs. Lenkin and Walde will pay RIC $2,638,047, equal to $4.25  
per square foot of net useable land, for the Property.  Messrs.  
Lenkin and Walde paid $50,000 as initial deposit into an escrow  
account.  Messrs. Lenkin and Walde will deposit another $120,000  
in escrow upon completion of a 60-day review period.  The balance  
of the purchase price will be paid at closing.  RIC's only  
obligation is to cure up to $50,000 in any code or related  
violations imposed or issued between the Effective Date of the  
Agreement and the date of closing.

RIC's closing expenses are limited to its cost of preparing the  
Deed, attorney's fees, recording any instruments necessary to  
clear title and payment of Virginia's Grantor tax, one-half of  
any closing charges, not to exceed $400.

The transaction is contingent on Messrs. Lenkin and Walde  
obtaining a special exception from the Loudoun County authorities  
permitting restaurant and banking with drive-thru uses on the  
Property.

CB Richard Ellis is entitled to a broker's commission calculated  
at 5% of the first $1,000,000 purchase price and 3% of the  
purchase price above $1,000,000.  Based on this formula, CB  
Richard Ellis will receive $99,141 at closing.

Messrs. Lenkin and Walde are private developers and investors who  
own a large portfolio of Washington-area commercial and  
residential properties.  Mr. Lenkin owns a construction and  
management company.

Messrs. Lenkin and Walde are financially able to complete the  
transaction.  Messrs. Lenkin and Walde produced a letter from  
Bank of America in Chevy Chase, Maryland, indicating Bank of  
America's support.  In addition, detailed financial statements  
from Messrs. Lenkin and Walde indicate that each has a net worth  
substantially in excess of $10,000,000, with liquid assets that  
are more than adequate to consummate the transaction.

To ensure that the Liquidator receives fair value for the  
Property, the Liquidator obtained the advice of a licensed real  
estate appraiser, Robert G. Johnson, MAI of JMSP, Inc., in  
Herndon, Virginia.  Mr. Johnson prepared an appraisal report that  
placed the fair market value of the Property at $2,600,000.  This  
figure excludes the value of the Re-Purchase Option.  As a  
result, the $2,638,047 purchase price exceeds the appraised fair  
market value.  The transaction will assist the Liquidator in  
marshalling RIC's assets to minimize any unavoidable loss to  
policyholders, claimants and creditors resulting from RIC's  
insolvency.

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 Insurance Company. The holding and
intermediate finance companies filed for chapter 11 protection on
June 12, 2001 (Bankr. S.D.N.Y. Case No. 01-13403) listing
$12,598,054,000 in assets and $12,877,472,000 in debts. The
insurance unit is being liquidated by the Insurance Commissioner
of the Commonwealth of Pennsylvania. (Reliance Bankruptcy News,
Issue No. 58; Bankruptcy Creditors' Service, Inc., 215/945-7000)    


ROMAN INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Roman Industries
        1560 Quarry Road North East
        Corydon, Indiana 47112

Bankruptcy Case No.: 04-92780

Chapter 11 Petition Date: August 6, 2004

Court: Southern District of Indiana (New Albany)

Judge: Basil H. Lorch III, Esq.

Debtor's Counsel: Gordon D. Ingle, Esq.
                  Law Office Of Gordon D. Ingle
                  209 North Capitol Avenue
                  Corydon, Indiana 47112
                  Telephone (812) 738-7575
                  Fax (812) 738-1321

Estimated Assets: $500,000 to $1 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
UPS Capital Business Credit   Secured Value:            $950,000
280 Trumbull St.              $425,000
Hartford, CT 06103

Soar Funding                                            $198,000

Composite One, LLC                                      $150,107

Indiana Dept. of Revenue                                 $85,100

Ashland Chemical Co.                                     $72,106

McWhorter Technologies                                   $70,614

Kentucky Revenue Cabinet                                 $41,450

Internal Revenue Service                                 $41,000

Advanced Plastics, Inc.                                  $31,310

Dennis O'Brien P.S.C.                                    $17,620

Schibley Chemical                                        $16,880

Indiana Dept. of Workforce                               $16,625

J.M. Huber Corp., HEM                                    $14,411

Chase Platinum Mastercard                                $11,443

Bennett & Bennett Ins.                                   $11,107

Indiana Naval Stores Co., Inc.                           $10,084

ECC International                                         $9,037

American Express                                          $8,610

Columbus Container, Inc.                                  $7,401

Ranco, Inc.                                               $4,880


SBS INTERACTIVE: Completes $500,000 Private Placement Transaction
-----------------------------------------------------------------
SBS Interactive, Co. (OTC Bulletin Board: SBSS) completed a
private placement of its securities.  The Company raised $500,000
through the issuance of one million shares of its common stock at
$0.50 per share.  In addition, the investors received warrants to
purchase one million shares of common stock at $1 per share, and
warrants to purchase an additional one million shares of common
stock at $1.25 per share.

The proceeds from the financing will be used for manufacturing the
Company's "Duo" hardware, for further development activities and
for general corporate purposes.

"We believe this financing reflects the significant
accomplishments the Company has achieved in a relatively short
period of time," said Todd Gotlieb, the Company's Chief Executive
Officer. "Recently, we announced three new customers, just weeks
after our new model of the Side by Side(TM) set-top box was
available.  This financing should permit us to accelerate the
roll-out of the Side by Side(TM) technology."

The Company's Side by Side(TM) technology uses a propriety,
patented reverse "blue screen" technology to seamlessly combine
virtually any kind of pre recorded or computer generated content
with the users' environment.  The environment integrates with the
content via the fully automated digital camera in the Side by
Side(TM) set-top box.  For optimal effect, this happens in real
time.
    
                         *     *     *

As reported in the Troubled Company Reporter's March 27, 2004
edition, Barry I. Hechtman, P.A., independent accountants who had
been engaged by SBS Interactive Co. as the principal accountants
to audit the Company's consolidated financial statements, resigned
effective February 10, 2004.

The report of Barry I. Hechtman, P.A. on the financial statements
of the Company as of, and for, the years ended December 31, 2002
and December 31, 2001 was modified as to the Company's ability to
continue as a going concern.


SCAN-OPTICS: Completes Recapitalization & Extends Loan Maturities
-----------------------------------------------------------------
Scan-Optics, Inc. (OTC BB: SOCR), a leader in information capture
and customer service solutions for government, insurance, order
fulfillment, proxy, health claims, test scoring and other paper-
intensive businesses, has completed its recapitalization with
certain lenders affiliated with Patriarch Partners LLC.

Scan-Optics gained approval from shareholders at its recent annual
meeting to issue to the Lenders 79.8% of the fully-diluted common
stock of the Company in consideration for, among other things, the
Lenders' agreement to extend the repayment date for the Company's
outstanding secured debt from June 30, 2005 to March 30, 2007. The
Lenders' fully-diluted common stock is subject to an approximate
15% reduction by stock options reserved for Senior Management,
which would provide the Lenders with no less than 61.56% of fully-
diluted equity interest. Also, as a result of this restructuring,
Scan-Optics has a $2.5 million revolving credit facility and an
additional $1.5 million working capital term loan.

In discussing the agreement, James C. Mavel, Chairman, Chief
Executive Officer and President of Scan-Optics, stated, "We are
pleased to have the opportunity to bring additional available
credit to the Company. The additional resources available through
March 2007 provide liquidity for business operations and
investment purposes."

Scan-Optics, Inc., with headquarters in Manchester, Connecticut,
is recognized internationally as an innovator and solution
provider in the information management and imaging business. It
designs, manufactures and services products and systems for
character recognition, image processing and display, data capture
and data entry. Scan-Optics systems and software are marketed
worldwide to commercial and government customers directly and
through distributors. Through its Manufacturing Services Division,
Scan-Optics also provides contract-manufacturing services to
customers, outsourcing the manufacturing of complex, electro-
mechanical assemblies. Scan-Optics has sales and service offices
located throughout the United States and abroad. Additional
information concerning Scan-Optics is available at
http://www.scanoptics.com/

                           *   *   *

                 Liquidity and Capital Resources

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

"Total borrowings increased $1.0 million at March 31, 2004 from
$8.0 million at the end of 2003. The available balance on the line
of credit was $4.0 million at March 31, 2004. The Company is in
compliance with all of the financial covenants as of March 31,
2004 and expects to remain in compliance throughout 2004.  The
Company's ability to do so, however, will be directly impacted by
its ability to achieve planned operating results for the remainder  
of 2004.  The Company anticipates meeting its current obligations
and resource needs through the funds generated from operations and
the available line of credit.

"The Company believes that the 2004 loan restructuring will allow
execution of the Company's business plan through the term of the
credit agreement by reducing required payments under the borrowing
arrangements with the Lenders and increasing available funds
through the working  capital term loan facility, thereby enhancing
the Company's  ability to invest in its business,  by lowering the
thresholds of the financial  covenants and by extending the loan  
maturities through  June 2005, and through March 2007 if the
shareholders approve the recapitalization transaction. In the
event that shareholders fail to approve the recapitalization
transaction or the recapitalization transaction fails to occur for
any other reason, the Company's secured obligations (including the
Company's  mandatorily redeemable preferred stock), which exceeded
$13.6  million as of March 30, 2004, will be due and payable on
June 1, 2005."


SHOWCASE AUTO: First Creditors Meeting Slated for August 24
-----------------------------------------------------------
The United States Trustee for Region 17 will convene a meeting of
Showcase Auto Plaza's creditors at 1:30 p.m., on August 24, 2004,
in Suite C at 1130 12th Street in Modesto, California.  This is
the first meeting of creditors required under 11 U.S.C. Sec.
341(a) in all bankruptcy cases.

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

Headquartered in Modesto, California, Showcase Auto --
http://www.showcaseautoplaza.com/-- sells automobiles and  
provides auto service and repair.  The Company filed for a chapter
11 protection on July 15, 2004 (Bankr. E.D. Calif. Case No.
04-92709).  Donald W. Fitzgerald, Esq., at Felderstein Fitzgerald
Willoughby represents the Debtor in its restructuring efforts.  
When the Debtor filed for protection, it listed assets and debts
of more than $10 million.


SOBIESKI BANCORP: MFB Financial Closes $1.156 Million Acquisition
-----------------------------------------------------------------
MFB Corp.'s (Nasdaq:MFBC) banking subsidiary, MFB Financial, has
completed a transaction acquiring certain assets and assumed
certain liabilities of Sobieski Bank.

Under the terms of the agreement, MFB Financial paid Sobieski Bank
$1.156 million, subject to post closing adjustments to be
finalized within the next 15 days.

As of June 30, 2004, Sobieski Bank, located in South Bend,
Indiana, had approximately $105.1 million of assets and
approximately $102.4 million of liabilities. Among items excluded
from the Acquisition under the agreement were certain troubled
and/or substandard assets, including certain commercial loans,
real estate owned, assets seized in connection with litigation
related to fraudulent activity affecting Sobieski Bank, and other
items. The transaction was structured as an asset purchase and MFB
Financial generally did not assume any of any of Sobieski's
contingent liabilities. Sobieski Bank and its holding company,
Sobieski Bancorp, Inc., have agreed to indemnify and protect MFB
against liabilities not assumed by MFB in the transaction.

The acquisition is expected to be accretive to MFB's earnings per
share for the fiscal year beginning October 1, 2004. As a result
of the transaction, MFB is expected to increase its total assets
to approximately $538 million and to solidify MFB Financial's
position as the second largest FDIC-insured institution
headquartered in St. Joseph County, Indiana. MFB will operate the
three Sobieski retail offices, all located in South Bend, as
branch facilities under the MFB Financial name. The acquisition
expands MFB's offering of retail and small business financial
services to eleven banking centers in the St. Joseph and Elkhart
county metropolitan area. MFB also recently moved into its new
corporate headquarters in Mishawaka. Both Mishawaka and South Bend
are in St. Joseph County. MFB Corp. shareholders' equity was $35.7
million at June 30, 2004.

"This is a carefully structured growth transaction consistent with
our focus on community banking, asset quality and efficiency,"
said Charles J. Viater, President & CEO of MFB. "We are expanding
and extending our market presence and service capability in a
prudent and profitable manner. We will immediately benefit from
the critical mass this will add to our organization while
simultaneously providing Sobieski customers with enhanced product
and service offerings."

Edelman & Co., Ltd. served as financial advisor to MFB for the
transaction.

As reported in the Troubled Company Reporter yesterday, the
shareholders of Sobieski Bancorp, Inc. (Nasdaq:SOBI), parent  
company of Sobieski Bank, approved the sale of substantially all  
of the Bank's assets to MFB Financial and the Company's plan of  
dissolution and liquidation.  The transaction with MFB is  
scheduled to close on August 6, 2004, and the Company's common  
stock will be de-listed from the Nasdaq Stock Market at the close  
of trading on that day.  

The Company expects to file its certificate of dissolution with  
the State of Delaware on August 9, 2004, after which the Company's  
stock transfer books will be closed and the Company will begin the  
process of winding up its business affairs in accordance with its  
plan of dissolution and liquidation. The Company will also be de-
registering its common stock under the Securities Exchange Act of  
1934.

                      About Sobieski Bancorp

Sobieski Bancorp's principal activity is to provide financial  
products and services to individuals and businesses. It operates  
through the main office and two branch offices located in St.  
Joseph County, Indiana. The Group collects deposits from the  
general public and originates loans and invests in Government  
treasury and agency securities and mortgage-backed securities. The  
loans provided include construction loans, mortgage loans secured  
by one-to-four family properties, commercial mortgage loans,  
commercial loans-participation, home equity loans and other  
consumer loans. The deposits accepted by the Group include now and  
money market accounts, passbook accounts and certificates of  
deposits and IRA accounts. http://www.sobieskifsl.com/

                         *     *     *

                  Liquidity and Capital Resources

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

"The continuing decline in the Bank's capital, as well as the  
Company's history of operating losses and likely future operating  
losses, could, among other factors, affect the terms of any future  
FHLB advances requested by the Bank, and could lead to a  
determination by the FHLB to limit or deny an advance amount  
requested by the Bank.  

"In addition, in February 2004, at the request of the OTS, the  
Company consented to a cease and desist order that, among other  
things, provides that the holding company should not borrow any  
funds without OTS approval. Because of the Company's history of  
reporting net losses and reduced capital position, as well as the  
cease and desist order, it is possible that the Company and/or the  
Bank could encounter difficulty in borrowing funds from other  
sources on terms acceptable to it, or at all.

"The Company uses its liquidity resources principally to meet loan  
originations, ongoing commitments to fund maturing certificates of  
deposit, deposit withdrawals and to meet operating expenses.  
Federal regulations require the Bank to maintain sufficient  
liquidity to maintain its safe and sound operation.  

"Although management believes that the level of the Company's  
liquid assets at March 31, 2004, as well as repayments and other  
sources of funds will be adequate to meet the Company's  
foreseeable liquidity needs, no assurance can be given in this  
regard, particularly in light of the possibility that the Company  
and/or Bank may encounter difficulty in borrowing funds when  
needed, and if a significant portion of the Banks maturing  
certificates of deposit do not renew."


SOLUTIA INC: Court Okays Second Amendment to DIP Financing Pact
---------------------------------------------------------------
Judge Beatty authorizes and approves in all respects a Second
Amendment to the DIP Financing Agreement providing Solutia, Inc.,
and its debtor-affiliates with working capital financing while
reorganizing under chapter 11.  
  
                       The Second Amendment  
  
Pursuant to the Second Amendment, M. Natasha Labovitz, Esq., at
Gibson, Dunn & Crutcher, LLP, in New York, explains, the Debtors
gain important flexibility to make necessary changes in their
operations and agreements related to those operations in a way
that will allow the Debtors to achieve significant cost savings
and liquidity improvements, along with streamlining their
operations and simplifying certain reporting and other compliance
requirements.  
  
The Second Amendment will benefit the Debtors in these key areas:  
  
    A. Asset Sales and Restructuring  
  
       The Second Amendment will facilitate asset sales and  
       business restructuring activities by permitting:  
  
       (1) numerous asset dispositions and other general  
           categories of asset transactions, including:  
  
           (a) the sale of specified business lines and other  
               enumerated assets of the Solutia Group;  
  
           (b) sales or leases and subleases of specified  
               parcels of real estate owned or leased by the  
               Solutia Group that are not used in its core  
               business operations;  
  
           (c) sales of certain assets of minor business lines  
               that are wound down, like the Chlorobenzene  
               business; and  
  
           (d) certain other sales pursuant to other motions under  
               Section 363 of the Bankruptcy Court or the Court-  
               approved non-core asset sales procedures;  
  
       (2) certain asset sale transactions involving non-cash  
           consideration, like ongoing earn-out payments or  
           land swaps; and  
  
       (3) certain de minimis charitable donations by non-Debtor  
           Subsidiaries and donations or below-market sales of  
           certain parcels of real estate by the Debtors where  
           appropriate.  
  
    B. Mandatory Prepayments/Commitment Reductions  
  
       The Second Amendment will modify existing loan prepayment  
       requirements by permitting the Debtors to retain proceeds  
       of certain asset dispositions and extraordinary receipts  
       that would otherwise be required to be used to permanently  
       pay down loans under the DIP Agreement.  The Second  
       Amendment will:  
  
       (1) increase the amount of proceeds of all Dispositions and  
           Extraordinary Receipts not generally subject to  
           mandatory prepayment requirements from $2,500,000 to  
           $7,500,000, and clarify and expand the types of  
           Extraordinary Receipts that benefit from this carve-  
           out;  
  
       (2) permit the retention of the first $5,000,000 of  
           proceeds of Specified Property Dispositions and limit  
           the prepayment obligation for proceeds of the  
           Specified Property Dispositions to 50% of the next  
           $10,000,000 of sale proceeds; and  
  
       (3) clarify the allocation of proceeds of asset sales that  
           involve assets subject to liens of both the DIP Lenders  
           and the holders of the Eurobonds issued by Solutia's  
           Belgian subsidiary, Solutia Europe, SA/NV.  
  
    C. Contract and Lease Restructurings  
  
       The Second Amendment will contain provisions that increase  
       the Debtors' flexibility to replace, modify or reap the  
       benefits of certain of their existing contracts and leases  
       so as to meet cost reduction and other goals set forth in  
       the business plan.  The Second Amendment will:  
  
       (1) permit the entry into certain sale-leaseback  
           transactions;  
  
       (2) permit the Debtors to enter into stipulations regarding  
           lifting the stay for certain fully secured obligations  
           and to make related prepetition payments;  
  
       (3) allow the Debtors greater flexibility in restructuring  
           prepetition contracts and leases through its assumption  
           or replacement, including in the areas of:  
  
           (a) granting ordinary course indemnities in connection  
               with the execution of new contracts and leases;  
  
           (b) entering into capital leases and operating leases;  
               and  
  
           (c) permitting amendments to material contracts that  
               are not materially adverse to the DIP Lenders;  
  
       (4) permit the Debtors to continue implementing a  
           prepetition restructuring agreement with respect to the  
           deferral of certain payments from Astaris, LLC; and  
  
       (5) permit the Debtors to pay up to $5,000,000 per year,  
           and pay reasonable related fees and expenses, in  
           respect of certain prepetition litigation settlement  
           agreements, which may preserve the Debtors' rights to  
           realize benefits under those agreements.  
  
    D. Operational Flexibility  
  
       Provisions of the Second Amendment will enhance the  
       Debtors' ability to take other operational steps to improve  
       their business operations consistent with the business plan  
       by:  
  
       (1) allowing the Debtors and their Subsidiaries to increase  
           short-term liquidity and mitigate collection risks  
           through limited sales of accounts receivable;  
  
       (2) facilitating the marketing of new products or the  
           establishment of new customer relationships by  
           permitting certain sales of inventory subject to  
           ordinary course return or approval rights;  
  
       (3) permitting the Debtors to make general payments in  
           respect of de minimis prepetition claims up to a  
           $1,500,000 limit and subject to the Court's approval;  
  
       (4) clarifying the Debtors' right to engage in the wind-  
           down of minor business lines, and permitting the  
           liquidation or merger of certain "Significant  
           Subsidiaries";  
  
       (5) permitting certain de minimis acquisitions of all or  
           substantially all of the assets of other entities and  
           certain other equity investments and capital  
           contributions;  
  
       (6) granting the Debtors greater flexibility in structuring  
           voluntary environmental remediation activities on real  
           properties owned by the Debtors by permitting  
           implementation of certain institutional controls like  
           land-use and natural resource-use restrictions,  
           access restrictions and other restrictive covenants  
           that "run" with the land; and  
  
       (7) streamlining the Debtors' reporting requirements by  
           reducing the number of reports which must be provided  
           in respect of minor environmental issues and inventory  
           held on consignment, and clarifying the types of  
           notices which must be provided to the DIP Lenders and  
           the means by which those notices are delivered.  
  
Ms. Labovitz clarifies that the Second Amendment will not modify  
the financial covenants set forth in the DIP Amendment.  
  
The terms and conditions of the proposed Second Amendment also  
contemplate that the Debtors will pay an amendment fee of 12.5  
basis points, or $656,250, to the DIP Lenders and a documentation  
fee of $250,000 to the DIP Agent.  The Debtors, the DIP Lenders  
and the DIP Agent have negotiated these fees at arm's length and  
in good faith.  Based on those negotiations and the benefits of  
the Second Amendment, the Debtors believe that payment of the  
Amendment-Related Fees is prudent and will be more than recouped  
in the context of the cost savings and liquidity enhancements  
that the Second Amendment will permit.  
  
Accordingly, the Debtors obtained authority from Judge Abrams to:  
  
    -- amend the DIP Agreement; and  
  
    -- pay the Amendment-Related Fees in connection with the  
       amendment.  
  
The Debtors have evaluated their financing and operational needs  
in light of their intended reorganization strategy.  The Debtors  
decided that it is more prudent from a business perspective to  
enter into a single comprehensive amendment to the DIP Agreement  
to facilitate the implementation of that business strategy,  
rather than incurring the costs and expenses associated with  
seeking individual waivers and consents for the numerous actions  
they may desire to take during the course of the Chapter 11  
cases.  
  
The Second Amendment will afford the Debtors significantly  
improved ability to refine and implement their restructuring  
strategy and should provide them with increased flexibility in  
managing their day-to-day operations and with comfort that those  
day-to-day operations will not result in the inadvertent breach  
of onerous or ambiguous loan provisions.

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 Debtors 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)


STANADYNE CORP: Kohlberg & Co. Completes $330 Million Buy-Out
-------------------------------------------------------------
The stockholders of Stanadyne Corporation's parent, led by
American Industrial Partners, completed the sale of their stock to
an affiliate of Kohlberg & Company, L.L.C. The proposed
transaction was previously announced on June 23, 2004. The
transaction totaled approximately $330 million, which was financed
by $105 million of equity, $160 million of new senior subordinated
notes and $65 million of borrowings under a new term loan credit
facility.

Goldman, Sachs & Co. acted as M&A advisor to American Industrial
Partners on the transaction.

Founded in 1987, Kohlberg & Company, L.L.C. is a private merchant
banking firm with offices in Mt. Kisco, New York and Palo Alto,
California. Through its affiliates, Kohlberg & Company, L.L.C. has
completed more than 75 acquisitions and recapitalization
transactions in a variety of industries.

Stanadyne is a leader in technology and services for engine
components and fuel systems including diesel fuel injection and
filtration systems, valve train components, and fuel supply pumps
used in agricultural, construction, industrial and automotive
vehicle and equipment applications. Stanadyne is headquartered in
Windsor, Connecticut and has facilities in the United States,
Brazil, France, Italy, and India.

                           *   *   *

As previously reported in the Troubled Company Reporter's July 22,
2004 edition, Standard & Poor's Ratings Services affirmed its
'BB-' corporate credit and 'B' subordinated debt ratings on
Windsor, Conn.-based Stanadyne Corp. and removed them from
CreditWatch where they were placed on June 24, 2004.

At the same time, Standard & Poor's assigned its 'BB' senior  
secured bank loan rating and its recovery rating of '1' to  
Stanadyne's proposed $35 million senior secured asset-based  
revolving credit facility and assigned its 'B+' debt rating and  
its recovery rating of '3' to Stanadyne's proposed $65 million  
senior secured term loan. Standard & Poor's also assigned its 'B'  
debt rating to the company's proposed $160 million senior  
subordinated notes.

The bank loan and recovery ratings on the revolving credit  
facility indicate a high expectation of full recovery of principal  
in the event of a default or bankruptcy. The term loan debt and  
recovery ratings indicate a meaningful (50%-80%) likelihood of  
recovery of principal in the event of default.  

The outlook is stable.
      
The rating affirmation and CreditWatch resolution reflect  
Standard & Poor's analysis of the company's expected business  
strategy, capital structure, and financial policy following a  
transaction whereby Stanadyne will be purchased by an affiliate of  
Kohlberg & Co. LLC, a private merchant bank.
      
Stanadyne will have about $225 million of total debt pro forma at  
the transaction's closing, which is expected to occur in the third  
quarter of 2004. Proceeds from the issuance of debt will be used  
to refinance certain existing debt, to partly fund Kohlberg's  
purchase of Stanadyne's equity, to provide working capital  
financing, and for other general corporate purposes.
      
"Downside ratings risk is mitigated by the expectation of  
continued positive free cash flow generation that will enable  
Stanadyne to reduce leverage in the near term. This expectation  
rests on the assumption that the economic uplift that has  
supported the company's improved sales in the past several  
quarters will continue into 2005," said Standard & Poor's  
credit analyst Nancy Messer. "Upside ratings potential is limited  
by the cyclical and competitive characteristics of Stanadyne's  
operating environment."


TENET HEALTHCARE: Cooperating in New Justice Dept. Probe in Mo.
--------------------------------------------------------------
Tenet Healthcare Corporation (NYSE: THC) is cooperating with a
voluntary request for documents it has received from the U.S.
attorney's office in St. Louis, Missouri. The voluntary request
seeks information about physician relocation agreements entered
into by current Tenet hospitals in the St. Louis area and a
hospital formerly owned by Tenet in Kennett, Missouri.

The company said the latest request for documents is consistent
with previously disclosed government reviews of Tenet's physician
relocation agreements in other states. Tenet reiterated its
earlier comments that the company is continuing to work
cooperatively with regulatory and enforcement agencies to provide
them with documents and information on a voluntary basis, and it
continues to be engaged in discussions with federal agencies
regarding a resolution of physician relocation and other issues.

"We are sensitive to the concerns that regulatory agencies have
with physician relocation arrangements, and Tenet's policies
reflect the most recent guidance issued on this subject in March
of this year by the U.S. Department of Health and Human Services,"
said E. Peter Urbanowicz, Tenet's general counsel.

The latest request for information seeks documents regarding
physician relocation agreements at Saint Louis University
Hospital, Forest Park Hospital, Des Peres Hospital and Saint
Alexius Hospital, Jefferson Campus (formerly SouthPointe
Hospital), all in St. Louis; and Twin Rivers Regional Medical
Center, in Kennett, Mo., which Tenet sold in November 2003.

The request also seeks additional information regarding certain
admissions and medical procedures at Twin Rivers. In its most
recent quarterly report to the Securities and Exchange Commission,
Tenet disclosed that it had been notified that subpoenas had been
issued to Twin Rivers' current owner seeking documents pertaining
to certain cardiac care patients at that hospital for the period
2000-2003. Tenet retained certain liabilities when it sold the
hospital last year.

Tenet Healthcare Corporation, through its subsidiaries, owns and
operates acute care hospitals and related health care services.
Tenet's hospitals aim to provide the best possible care to every
patient who comes through their doors, with a clear focus on
quality and service. Tenet can be found on the World Wide Web at
http://www.tenethealth.com/

                       *   *   *  
  
As reported in the Troubled Company Reporter's June 21, 2004   
edition, Standard & Poor's Ratings Services said that the ratings   
and outlook on Tenet Healthcare Corp. (B/Negative/--) will not be   
affected by an increase in the size of the company's new senior   
unsecured note issue due in 2014, to $1 billion from $500
million. Tenet used $450 million of the proceeds to repay debt due
in 2006 and 2007, and the balance will be retained in cash
reserves. Despite the additional debt and interest costs, Standard
& Poor's considers the additional liquidity provided by the cash,
as well as the effective extension of maturities, to be
offsetting factors. The ratings already consider expectations of
weak operating performance and cash flow over the next year while
the negative outlook incorporates the risk of ongoing litigation
and investigations related to the hospital chain's operations.


UAL CORP: United ALPA Issues Statement on Pilot Pension Plans
-------------------------------------------------------------
Captain Mark Bathurst, Chairman of the United Pilots Master
Executive Council of the Air Line Pilots Association, responded to
reports of United Airlines' plans to terminate all employee
pension plans, including the pilot pension plan, as part of its
program to exit bankruptcy.  Captain Bathurst asserted that they
"will use every resource at [their] command and every legal means
available to prevent the Company from destroying the pilot pension
program." He further contended:

"We recognize United's continuing need to reduce operating    
costs, given the current dramatic rise in the price of fuel.
However, the Company's 9,000 pilots have already made huge
concessions to provide United with over $6 billion in financial
relief over the next five years.  Over the last 18 months, the
average pilot has forfeited 45% of his or her pay and 20% of
his or her pension benefits, as well as endured a 15% increase
in work hours.  We made these enormous financial and lifestyle
sacrifices to help the airline move toward profitability and to
protect our pensions.  We will not further sacrifice our
futures -- and our families' futures -- as well.

"The facts are now clear: United's labor costs are now among the
lowest in the network airline industry, but its non-labor
operating expenses remain among the highest. Outside of labor
and fuel costs, American Airlines enjoys a full 25% operating
cost advantage over United.  United's maintenance and airport
operations are substantially less efficient than its industry
peers; its aircraft leases remain well above market; its
relationship with United Express carriers is unprofitable and
unstable; and United fails to manage revenue as well as
American, Continental or Northwest.  Any corporate management
team can attack employee pensions.  That is the "simple" way to
generate a large sum of cash.  We are asking this management
team for two things: accountability, and to begin steps toward
executing a solid, rational, and achievable business plan that
does not attempt to solve its problems on the backs of its
employees.

"United's pilots have acquiesced to massive pay cuts and much
longer working hours: huge concessions that made it possible
for this great airline to remain viable throughout an
extraordinarily difficult period.  Terminating pilot pensions
has the potential to destroy the career of every United pilot,
and potentially plunge labor relations at United into years of
hostility and chaos.  We will do everything in our power to
avoid that scenario.  The pilots of United Airlines will fight
for our pensions every bit as hard as we have fought to ensure
that United emerges from bankruptcy as the best airline in the
world."

Headquartered in Chicago, Illinois, UAL Corporation --  
http://www.united.com/-- through United Air Lines, Inc., is the   
holding company for United Airlines -- the world's second largest  
air carrier.  the Company filed for chapter 11 protection on  
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.  
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,  
and Steven R. Kotarba, Esq., at KIRKLAND & ELLIS represent the  
Debtors in their restructuring efforts.  When the Company filed  
for protection from their creditors, they listed $24,190,000,000  
in assets and  $22,787,000,000 in debts.


UNIFIED HOUSING: First Creditors Meeting Set for September 8
------------------------------------------------------------
The United States Trustee for Region 6 will convene a meeting of
Unified Housing of Kensington, LLC's creditors at 2:30 p.m., on
September 8, 2004 in Room 7A24 in the Fritz G. Lanham Federal
Building located at 819 Taylor Street, in Fort Worth, Texas.  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 Dallas, Texas, Unified Housing, filed for a
chapter 11 protection on July 29, 2004 (Bankr. N.D. Tex.
Case No. 04-47183).  John P. Lewis, Jr., at Cholette, Perkins &
Buchanan, represents the Company in its restructuring efforts.  
When the company filed for protection, it listed above $10 million
in assets and debts.


UNITED REFINING: Completes $200M Private Senior Debt Offering
-------------------------------------------------------------
United Refining Company completed its previously announced private
placement offering of $200 million in Senior Notes due 2012, which
will bear an interest rate of 10.500%.  The notes were issued at
98.671% of par to yield 10.750% to maturity.  Net proceeds from
the offering of approximately $191.6 million plus available cash
are intended to be used:

   (1) to redeem $180.1 million of aggregate principal amount of
       its outstanding 10-3/4% Senior Notes plus an aggregate
       redemption premium of $3.2 million and $3.7 million of
       estimated accrued and unpaid interest through the date of
       redemption; and

   (2) to pay a dividend to its stockholder of $5 million in the
       aggregate.  

The notes will be eligible for resale under Rule 144A of the
Securities Act of 1933.

United Refining Company -- http://www.urc.com/-- is an  
independent refiner and marketer of petroleum products.  It fuels
cars, trucks, airplanes and farm and construction equipment, as
well as the homes and industries in one of America's largest
concentrations of people and commerce.  Their market includes
Pennsylvania and portions of New York and Ohio.

                         *     *    *

As reported in the Troubled Company Reporter's July 27, 2004
edition, Standard & Poor's Ratings Services assigned its 'B-'
rating to independent petroleum refiner and retail marketer United
Refining Company's $200 million senior notes due 2014.  


UNIVERSAL ACCESS: Hires Buccino & Associates as Financial Advisors
------------------------------------------------------------------
Universal Access Global Holdings, Inc., and its debtor-affiliates
ask the U.S. Bankruptcy Court for the Northern District of
Illinois for permission to employ Buccino & Associates, Inc., as
their financial advisors and consultants.

The Debtors tell the Court that in the reorganization process,
they need the expertise of Buccino & Associates as a turnaround
and crisis management firm.  Buccino & Associates has gained
familiarity with the Debtors' businesses due to their prepetition
business dealings.

Buccino & Associates is expected to:

    a) assist the Debtors regarding the evaluation of the
       present level of operations and identification of areas  
       of potential cost savings, including overhead and   
       operating expense reduction and efficiency improvements;
    
    b) assist the Debtors in the preparation of financial
       related disclosures required by the Court, including the
       Schedules of Assets and Liabilities, the Statement of
       Financial affairs and Monthly Operating Reports;
   
    b) assist the Debtors in developing accounting and operating
       procedures to segregate pre-petition and post-petition
       business transactions;

    c) assist the Debtors with the identification and
       implementation of short-term cash management procedures;

    d) assist and advice the Debtors with respect to the
       identification of core business assets and the
       disposition of assets or liquidation of unprofitable
       assets and other operations;

    e) provide assistance with implementation of court orders;

    f) assist with the identification of executory contracts and
       leases and performance of cost/benefit evaluations with
       respect to the affirmation or rejection of each;

    g) assist in the preparation of financial information for
       distribution to creditors and others, including, but not
       limited to, cash receipts and disbursement analysis,
       analysis of various asset and liability accounts, and
       analysis of proposed transactions for which Court
       approval is sought;

    h) attend at meetings and support for other professional
       advisors in discussions with potential investors, any
       unsecured creditors' committee appointed in these chapter
       11 cases, the U.S. Trustee, other parties in interest and
       professionals hired by the sane, as requested;

    i) assist the Debtors in claims processing, analysis and
       reporting, including plan classification modeling and
       claim estimation;

    j) give analysis of creditor claims by type, entity and
       individual claim, including assistance with development
       of a database to track such claims;

    k) assist in the preparation of information and analysis
       necessary for the confirmation of a Plan of
       Reorganization in these chapter 11 cases;

    l) assist in the evaluation and analysis of avoidance
       actions, including fraudulent conveyances and
       preferential transfers;

    m) provide testimony on various matters as required;

    n) provide such other financial advisory and claims
       management services consistent with Buccino & Associates'
       role in this matter as may be required or requested by
       the Debtors or their counsel; and

    o) render such other general business consulting or such
       other assistance as Debtors' management or counsel may
       deem necessary that are not duplicative of services
       provided by other professionals in this proceeding.

Buccino & Associates will bill the Debtors at the Firm's current
hourly rates:

           Professionals            Hourly Rate
           -------------            -----------
           Gerald Buccino           $525
           Senior Vice Presidents   $400
           Vice Presidents          $350
           Senior Consultants       $300
           Consultants              $250

Headquartered in Chicago, Illinois, Universal Access --
http://www.universalaccess.com/-- provides network infrastructure  
services and facilitates the buying and selling of capacity on
communications networks.  The company, and its affiliates, filed
for a chapter 11 protection on August 4, 2004 (Bankr. N.D. Ill.
Case No. 04-28747).  John Collen, Esq., and Rosanne Ciambrone,
Esq., at Duane Morris LLC, represent the Company.  When the Debtor
filed for protection from its creditors, it listed $22,047,000 in
total assets and $24,054,000 in total debts.


UNIVERSAL ACCESS: Hires Shefsky & Froelich as Special Counsel
-------------------------------------------------------------
Universal Access Global Holdings, Inc., and its debtor-affiliates,
ask the U.S. Bankruptcy Court for the Northern District of
Illinois for permission to employ Shefsky & Froelich, Ltd., as
special counsel.

The Debtors require the legal services of Shefsky & Froelich on
matters concerning securities.  The firm has represented the
company since 1997 in a variety of matters including general
corporate and securities law.  

Shefsky & Froelich professionals primarily responsible for
handling this case are Cezar M. Froelich, Esq., billing $640 per
hour, and Kimberly Copp, Esq., billing $315 per hour.  

The Firm discloses that these Shefsky & Froelich lawyers own
shares in Universal Access:

   Name                    Position       No. of Shares
   ----                    --------       -------------
   Richard T. Ingram       Counsel            152
   Lawrence M. Kern        Shareholder         50
   Michael J. Choate       Shareholder         25
   Paul T. Jenson          Associate           13
   Thomas R. Pappas        Associate           12
   Kathryn K. Arnold       Shareholder          9
   Jeremy Stonehill        Associate            5

Headquartered in Chicago, Illinois, Universal Access --
http://www.universalaccess.com/-- provides network infrastructure  
services and facilitates the buying and selling of capacity on
communications networks.  The company, and its affiliates, filed
for a chapter 11 protection on August 4, 2004 (Bankr. N.D. Ill.
Case No. 04-28747).  John Collen, Esq., and Rosanne Ciambrone,
Esq., at Duane Morris LLC, represent the Company.  When the Debtor
filed for protection from its creditors, it listed $22,047,000 in
total assets and $24,054,000 in total debts.


US AIRWAYS: Transfers $18 Million WestLB Claim to Wilmington Trust
------------------------------------------------------------------
WestLB AG, formerly known as Westdeutsche Landesbank  
Girozentrale, filed Claim No. 2846 in an unliquidated amount  
against US Airways and its debtor-affiliates.  The Debtors
objected to the Claim and WestLB responded.

Wilmington Trust Company, as Collateral Agent, also asserted an  
interest in Claim No. 2846.  Wilmington alleges that it is  
subrogated to the rights of WestLB under Claim No. 2846.

In a stipulation, the parties agree that Claim No. 2846 is  
allowed as a Class USAI-7 General Unsecured Claim for  
$18,000,000.  Claim No. 2846 is deemed transferred from WestLB to  
Wilmington.  All distributions relating to Claim No. 2846 will be  
directed to Wilmington.  The Reorganized Debtors have no  
obligation to make any distribution to WestLB based on Claim No.  
2846.

WestLB withdraws its response and request for a hearing.  All  
other claims by WestLB or Wilmington relating to Claim No. 2846,  
including any claims related to aircraft with Tail Nos. N625VJ,  
N626AU, N627AU, N628AU, N629AU, N630AU, N631AU, N632AU and  
N633AU, are withdrawn. (US Airways Bankruptcy News, Issue No. 59;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


U.S. PLASTIC: First Creditors Meeting Slated for September 1
------------------------------------------------------------
The United States Trustee for Region 21 will convene a meeting of
U.S. Plastic Lumber Corp.'s creditors at 2:00 p.m., on September
1, 2004, in Room 101 at 330 Clematis Street in Palm Beach,
Florida.  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 Boca Raton, Florida, U.S. Plastic --
http://www.usplasticlumber.com/-- manufactures plastic lumber and  
is the technology leader in the industry.  The Company filed for a
chapter 11 protection on July 23, 2004 (Bankr. S.D. Fla. Case No.
04-33579).  Stephen R. Leslie, Esq., at Stichter, Riedel, Blain &
Prosser, P.A., represents the Debtor in its restructuring efforts.  
When the Debtor filed for protection it listed $78,557,000 in
total assets and $48,090,000 in total debts.


USG CORP: Trade Creditors Sell 81 Claims Totaling $1,292,758
------------------------------------------------------------
Between June 1 and August 6, 2004, the U.S. Bankruptcy Clerk for
the District of Delaware recorded 81 claim transfers aggregating
$1,292,758.

Contrarian Funds, LLC, bought 13 claims totaling $534,588.  Amroc
Investments, LLC, purchased 18 claims aggregating $383,909.
Sierra Nevada Liquidity Fund went home with 11 claims totaling
$154,028 and Stark Event Trading, Ltd., acquired two claims
totaling $116,514.  Portia Partners, LLC, purchased 33 claims
aggregating $67,066, and Debt Acquisition Company of America V,
LLC, bought three claims totaling $35,326.  Sur Seal's $1,327
claim was sold to Fair Harbor Capital, LLC.

                                    Claim
Original Claimant                  Amount    Transferee
-----------------                  ------    ----------
Construction Systems              $10,237    Contrarian Funds
Construction Systems               23,884    Contrarian Funds
Construction Systems               23,884    Contrarian Funds
Innomation, Inc.                  134,001    Contrarian Funds
J.M. Huber Corporation           $198,087    Contrarian Funds
J.M. Huber Corporation             61,382    Contrarian Funds
J.M. Huber Corporation                  0    Contrarian Funds
Paragon Pacific Insulation          2,220    Contrarian Funds
Specialty Products & Insulation    24,031    Contrarian Funds
Specialty Products & Insulation       298    Contrarian Funds
Specialty Products & Insulation       155    Contrarian Funds
Specialty Products & Insulation     1,907    Contrarian Funds
Specialty Products & Insulation    54,502    Contrarian Funds
Cline Energy                        5,267    Amroc Investments
Darlington Professional Resources   1,046    Amroc Investments
Delta Star, Inc.                    5,056    Amroc Investments
Design & Shapes in Steel            6,456    Amroc Investments
Design & Shapes in Steel            1,418    Amroc Investments
Design & Shapes in Steel            5,685    Amroc Investments
Huebsch                             1,195    Amroc Investments
Inline Distributing Co.           155,696    Amroc Investments
Letter Shop                         3,980    Amroc Investments
Marriott's Lincolnshire Resort      9,152    Amroc Investments
Milwaukee Electric Tool             2,536    Amroc Investments
Overnite Transportation Company     3,243    Amroc Investments
Piranha Sales & Products            1,668    Amroc Investments
Sloss Industries Corporation      145,808    Amroc Investments
US Silica                          16,480    Amroc Investments
US Silica                           8,839    Amroc Investments
Volume Transportation               2,500    Amroc Investments
Wallace Montgomery & Associates     7,884    Amroc Investments
Acme Dynamics, Inc.                 5,269    Sierra Nevada
Chemical Solvents, Inc.            11,268    Sierra Nevada
Fluid Machinery, Inc.               5,151    Sierra Nevada
Freeman & Sons Trucking, Inc.       5,383    Sierra Nevada
Henkel Surface Technologies        34,019    Sierra Nevada
ITS Enclosures                      9,476    Sierra Nevada
Jimco Products, Inc.                1,811    Sierra Nevada
Petro's Lawn Services               9,274    Sierra Nevada
Propane Services                    9,478    Sierra Nevada
Scott Wood Products Company        51,358    Sierra Nevada
Southern Parts & Engineering Co.   11,541    Sierra Nevada
Fil-More Express, Inc.             53,718    Stark Event Trading
Municipal Water Authority          62,796    Stark Event Trading
A. Pal King Co, Inc.                4,183    Portia Partners
ABC Fire Extinguishing Service      2,005    Portia Partners
Barry Personnel Resources, Inc.     1,618    Portia Partners
Barry Personnel Resource, Inc.      1,498    Portia Partners
Blastmaster Industries              1,191    Portia Partners
City of St. George Utility          1,283    Portia Partners
Clad-Rex, Inc.                      3,700    Portia Partners
Commercial Billing Service          1,598    Portia Partners
Conti Materials                     1,158    Portia Partners
D & D Enterprises                   1,290    Portia Partners
D & D Enterprises                   1,290    Portia Partners
Demello Truck Body & Trai           1,379    Portia Partners
Digital Freedom                     2,022    Portia Partners
DRW Machines, Inc.                  1,446    Portia Partners
Equipment, Inc.                     1,774    Portia Partners
General Mill Supply, Inc.           4,652    Portia Partners
Gill Glass                          1,400    Portia Partners
Hoekstra & Sons, Inc.               1,590    Portia Partners
Hunter, Maclean, Exley & Dunn P.C.  1,274    Portia Partners
Krohne, Inc.                        1,733    Portia Partners
Marine Specialty Company, Inc.      3,787    Portia Partners
Mayfield Manufacturing Co.          1,274    Portia Partners
Mike Irvin                          1,210    Portia Partners
Mike Irvin                          1,210    Portia Partners
Nesco Manufacturing                 1,309    Portia Partners
North American Products Corp.       4,498    Portia Partners
Reichen/Brub                        1,685    Portia Partners
Richor, Inc.                        3,848    Portia Partners
Salt City Sales Corp.               1,736    Portia Partners
Sam A. Mesher Tool Co.              2,731    Portia Partners
Signs Now of Greenville             1,342    Portia Partners
Southwest Engineers                 2,893    Portia Partners
Turner, Padget, Graham, Laney, PA   1,459    Portia Partners
Peirco, Inc.                        1,365    Debt Acquisition
Venture Supply, Inc.               33,683    Debt Acquisition
Wagner Industries, Inc.               278    Debt Acquisition
Sur Seal                            1,327    Fair Harbor

Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading  
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.  The Company filed
for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No.
01-02094).  David G. Heiman, Esq., and Paul E. Harner, Esq., at
Jones, Day, Reavis & Pogue represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed $3,252,000,000 in assets and
$2,739,000,000 in debts. (USG Bankruptcy News, Issue No. 70;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


VERIDICOM INT'L: Deficits Raise Going Concern Doubt
---------------------------------------------------
Veridicom International Inc.'s financial statements have been
presented on the basis that it is a going concern, which
contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business.  

The Company has incurred a net loss of $764,884 during the three
month period ended March 31, 2004 and has a working capital
deficit and a stockholder deficit, which raises substantial doubt
about its ability to continue as a going concern. The Company is
currently devoting its efforts to raising additional capital and
investigating potential merger candidates.  The Company's ability
to continue as a going concern is dependent upon its ability to
develop additional sources of capital, and ultimately, achieve
profitable operations.

The Company officially changed its name from Alpha Virtual, Inc.
to Veridicom International, Inc. on February 23, 2004. Following
the name change, shares of its common stock are traded under the
symbol "VRDI" on the OTC Bulletin Board.

On April 16, 2004, Messrs. Al-Zarooni and Mirza resigned from the
Board of Directors.

Management indicates that the Company currently has sufficient
funds on hand to fund its operations for the next quarter. It will
need to raise financing in the future to fund its operations.  If
successful in raising additional financing, the Company may not be
able to do so on terms that are not excessively dilutive to its
existing stockholders or less costly than existing sources of
financing. Failure to secure additional financing in a timely
manner and on favorable terms if, and when, needed in the future
could have a material adverse effect on Veridicom's financial
performance, balance sheet and stock price and require the
Company to implement cost reduction initiatives and curtail
operations.


WESTPOINT: BofA Objects to Key Employee Retention Plan Extension
----------------------------------------------------------------
WestPoint Stevens Inc. asked the U.S. Bankruptcy Court for the
Southern District of New York to approve an extension of its Key
Employee Retention Plan, as modified.  
  
John J. Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, in New   
York, relates that the performance-based incentive program under   
the KERP only provided calculations through the end of the first   
quarter of 2004.  In light of the continued pendency of their   
Chapter 11 cases, the Debtors have calculated incentive payments   
through December 2004 in accordance with their 2004 budget.  New   
target metrics are also being implemented to correspond with the   
Debtors' 2004 Budget:  
  
                    EBITDA Target Levels/Goals   
  
   Period Ending        Minimum         Target        Maximum  
   -------------        -------         ------        -------  
   06/30/2004           $25,112        $29,543        $35,452  
   09/30/2004            32,513         38,251         45,901  
   12/31/2004            30,465         35,841         43,009  
  
               Cash Availability Target Levels/Goals   
  
   Period Ending        Minimum         Target        Maximum   
   -------------        -------         ------        -------   
   06/30/2004          $100,467       $118,197       $141,836  
   09/30/2004            68,917         81,079         97,295  
   12/31/2004           104,701        123,178        147,814


The proposed EBIDTA and Cash Availability metrics are principally   
based on the corresponding targets contained in the 2004 Budget   
but have been adjusted to reflect the estimated costs of the   
continuation of the Chapter 11 cases through the end of 2004.

                      Bank of America Objects

Bank of America, N.A., as administrative and collateral agent for
the Bank Group, told the Debtors that the Bank Group would
support an extension of the Original KERP to cover the second
quarter of 2004, using the same targets established in the 2003
Business Plan and the same structure of deferring half of the
earned compensation until confirmation.  Bank of America and the
Bank Group also suggested that, for subsequent quarters, the
August 2004 business plan should be a reference point by which
the targets for incentive compensation are established, and that
they would agree to use the new business plan to craft a new KERP
following the same structure as the Original KERP.  The Debtors
flatly refused, insisting that the New KERP targets be accepted
now, in the absence of any business plan, and that none of the
compensation be deferred until confirmation.

Bank of America and the Bank Group firmly believe that all
relevant considerations weigh against approval of the New KERP in
its present form and at the current time because:

    (a) Unlike the Original KERP, the New KERP provides no
        incentive for the key employees to obtain confirmation of
        a reorganization plan.  The Debtors provide no compelling
        argument for modifying the structure of the Original KERP,
        which required that half of the earned compensation be
        deferred until confirmation of a plan;

    (b) Unlike the Original KERP, the target levels for EBITDA and
        borrowing availability are wholly divorced from any of the
        Debtors' continuing business plan.  It is impossible to
        discern how the target levels for EBITDA and borrowing
        availability under the New KERP will relate to the
        financial projections in the new August 2004 business
        plan.  The Debtors did not provide compelling reason why
        consideration of an extended KERP cannot wait until the
        August 2004 business plan is completed, so that the EBITDA
        and availability targets can be evaluated in the Debtors'
        framework for a viable reorganization;

    (c) The Debtors did not explain why the targeted levels for
        EBITDA in the New KERP should be substantially lower by
        9.6% than the projected levels of EBITDA established in
        the 2003 Business Plan.  By lowering the target levels,
        and only requiring 85% of the target to be achieved for
        management to receive the incentive compensation, the New
        KERP seems designed to award management for substantial
        underperformance;

    (d) The Debtors did not justify awarding incentive
        compensation based on levels of borrowing availability,
        which, for the third quarter of 2004, are within the
        vicinity of a critical covenant default under their DIP
        facility;

    (e) The Debtors did not substantiate the fear that failure to
        approve the New KERP now will lead to the imminent
        departure of key employees.  To the contrary, the Debtors
        have operated without any KERP for the entire second
        quarter of 2004, and the Debtors have not raised with the
        Court, or with the Bank Group, any concerns over their
        loss of critical personnel during this period; and

    (f) The Debtors argue that the "costs associated with the New
        KERP will . . . not exceed $4,503,000 per quarter," for a
        total cap of $13.5 million for three quarters.  The $13.5
        million cap is in addition to the $10 million of incentive
        compensation already provided for the same employees.  The
        Debtors also pointed out that a "Group 2" employee would
        receive a bonus equal to 50% of his or her base salary
        merely for achieving the targets that management itself
        has established in the absence of a business plan.  A
        Group 1A employee receives a bonus equal to 100% of his
        base salary merely for making management's own status quo
        budget.  Bank of America believes that the amounts are
        inappropriate in the absence of evidence substantiating
        significant employee attrition, especially considering the
        troubled industry in which the Debtors operate.

Richard D. Feintuch, Esq., at Wachtell, Lipton, Rosen & Katz, in
New York, argues that the Debtors' New KERP proposal is not fair
and reasonable.  Bank of America asks the Court to defer
consideration of the structure, performance targets, and amounts
of the proposed incentive compensation until they can be
evaluated in the larger context of the Debtors' August 2004
business plan.

                          Debtors Respond

John J. Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, in New
York, contends that the First Lien Lenders offer no meaningful
rationale on why the Court should second-guess the Debtors'
business judgment and replace it with their own.  The First Lien
Lenders' assertion that the Court should wait until the 2004-2009
Business Plan is complete before authorizing a KERP extension
ignores the detrimental impact on employee morale if the Debtors
are forced to operate without a KERP for over four months.
Taking into account a sufficient period of time to allow the
First Lien Lenders to perform their own diligence and subsequent
negotiations over the KERP targets, a revised KERP Program will
not be presented to the Court until October.

It is important to remember that the KERP Program is not just a
retention program -- it is also an incentive plan, Mr. Rapisardi
asserts.  To operate without an incentive plan would create
tremendous uncertainty for the Debtors' employee base, putting
the business at great risk.  Contrary to the First Lien Lenders'
assertions, 17 managers have already left the company during the
pendency of the Chapter 11 cases.  The Debtors cannot afford to
increase the risk of losing any more of their key personnel.  In
addition, the 2004-2009 Business Plan could require the KERP
targets be further adjusted downward.

The First Lien Lenders' contention that the Debtors can continue
to make payments based on the 2003 business plan is not an
adequate solution.  The entire purpose of a KERP is to provide
clear incentives that employees can work towards.  It defeats the
purpose of having in place an incentive program if employees get
paid in the absence of set targets or goals.  Because the 2003
Business Plan does not account for a substantial increase in the
price of raw materials, the target levels are inadequate.  The
2003 Business Plan is no longer accurate and cannot form the
basis of a makeshift KERP extension.

Mr. Rapisardi clarifies that the Debtors are not requesting
approval of a New KERP.  The Debtors are only requesting an
extension of the existing KERP targets, which expired at the end
of March.  Nothing else has changed.  The payout structure, where
50% is paid currently and 50% deferred until emergence, remains
the same as do the payout percentages previously approved by the
Court.  All the Debtors are asking for is an extension of the
current program through December 2004.

Accordingly, the Debtors ask the Court to overrule the First Lien
Lenders' objection.

Headquartered in West Point, Georgia, WestPoint Stevens, Inc., --
http://www.westpointstevens.com/-- 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)  


ZI CORPORATION: Names Donald P. Moore to Board of Directors
-----------------------------------------------------------
Zi Corporation (Nasdaq:ZICA) (TSX:ZIC), a leading provider of
intelligent interface solutions, has appointed Donald P. Moore,
41, to serve as a director on Zi's Board. This appointment
increases the size of the Board to eight members.

Mr. Moore is a shareholder of Fowler White Burnett P.A., one of
Florida's largest and most prestigious law firms. Prior to joining
Fowler White Burnett, Mr. Moore was President of Rebelyon Capital
& Management (1996-2002); in-house counsel to Miami-based Ryder
System, Inc., a Fortune 500 provider of leading-edge
transportation, logistics and supply chain management solutions
worldwide (1992-1996) and a corporate securities lawyer with New
York-based law firm Weil, Gotshall & Manges (1989-1992).

Mr. Moore joins the Zi Board as part of the Company's previously
announced agreement with the Lancer Entities.

Chairman Michael Lobsinger commented, "Donald brings valuable
financial and business experience to the Zi board. With his
extensive business background, Donald will provide valuable new
perspectives to Zi that will help the Company in achieving the
next phase of its growth plans."

Mr. Moore graduated Cum Laude from the University of Michigan Law
School at Ann Arbor in 1989. He holds a master's of business
administration degree with a major in international business from
the University of Miami and a bachelor of arts degree with a major
in political science from the University of Michigan at Ann Arbor.

"I have been very impressed by the strong and steady progress Zi
has demonstrated during several very difficult years for the
technology sector," Mr. Moore said. "I am looking forward to the
opportunity to contribute as a Board member and to help Zi
continue on its impressive growth path."

                      About Zi Corporation

Zi Corporation -- http://www.zicorp.com/-- is a technology  
company that delivers intelligent interface solutions to enhance
the user experience of wireless and consumer technologies. The
company's intelligent predictive text interfaces, eZiTap and
eZiText, allow users to personalize the device and simplify text
entry providing consumers with easy interaction for short
messaging, e-mail, e-commerce, Web browsing and similar
applications in almost any written language. eZiNet(TM), Zi's new
client/network based data indexing and retrieval solution,
increases the usability for data-centric devices by reducing the
number of key strokes required to access multiple types of data
resident on a device, a network or both. Zi supports its strategic
partners and customers from offices in Asia, Europe and North
America. A publicly traded company, Zi Corporation is listed on
the Nasdaq National Market (ZICA) and the Toronto Stock Exchange
(ZIC).
                          *   *   *

                Liquidity and Capital Resources

In its Form 20-F for the fiscal year ended December 31, 2003,
filed with the Securities and Exchange Commission, Zi Corporation
reports:

"While cash generated from operations and our existing cash
resources are adequate to meet our current liquidity needs, we
have been evaluating potential acquisitions and expansion
opportunities, which, if successful, will require additional
capital. We have been engaged in discussions with investment
banking firms and institutional investors regarding potential
financing. Our financing efforts to date have been hampered by the
investment community's concern over the potential impact on our
company of the substantial ownership of our shares by the receiver
for the Lancer group of funds. While we have been in discussions
with the receiver and his advisors to reach an agreement to
ameliorate these concerns, there can be no assurance that we will
be able to reach such an agreement or that we will be able to
attract needed growth capital on acceptable terms."


* Large Companies with Insolvent Balance Sheets
-----------------------------------------------  
                                Total  
                                Shareholders  Total     Working  
                                Equity        Assets    Capital  
Company                 Ticker  ($MM)          ($MM)     ($MM)  
-------                 ------  ------------  -------  --------  
Airgate PCS             PCSA       (377)         291       13  
Alliance Imaging        AIQ         (68)         628       20  
Akamai Technologies     AKAM       (175)         279      140  
Amazon.com              AMZN     (1,036)       2,162      568  
Bally Total Fitness     BFT        (158)       1,453     (284)   
Centennial Comm         CYCL       (579)       1,447      (99)  
Choice Hotels           CHH        (118)         267      (42)  
Cincinnati Bell         CBB        (640)       2,074      (47)  
Deluxe Corp             DLX        (298)         563     (309)  
Domino Pizza            DPZ        (718)         448       (1)
Echostar Comm           DISH     (1,033)       7,585    1,601  
Graftech International  GTI         (97)         967       94  
Hawaian Holdings        HA         (143)         256     (114)    
Idenix Pharm            IDIX        (28)          67       30
Imax Corporation        IMAX        (52)         250       47  
Kinetic Concepts        KCI        (246)         665      228  
Maxxam INC              MXM        (602)       1,061      127
Millennium Chem.        MCH         (46)       2,398      637  
McDermott International MDR        (363)       1,249      (24)  
McMoRan Exploration     MMR         (54)         169       83  
Northwest Airlines      NWAC     (1,775)      14,154     (297)  
Nextel Partner          NXTP        (13)       1,889      277  
ON Semiconductor        ONNN       (499)       1,161      213  
Pinnacle Airline        PNCL        (48)         128       13  
Quality Distributors    QLTY        (19)         372        7
Rightnow Tech.          RNOW        (13)          29       (9)
Sepracor Inc            SEPR       (619)       1,020      256  
St. John Knits Int'l    SJKI        (65)         234       69  
UST Inc.                UST        (115)       1,726      727  
Vector Group Ltd.       VGR          (3)         628      142  

                           *********

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
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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
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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-
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for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher Beard
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                *** End of Transmission ***