TCR_Public/040820.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Friday, August 20, 2004, Vol. 8, No. 176

                           Headlines

A.B. DICK: First Creditors' Meeting Slated for August 23
ADELPHIA: RCM Technologies Assignees Hold a $1,251,086 Claim
ADELPHIA BUSINESS: Attacks Four Overstated Lease Rejection Claims
AESP INC: Stock Trades on OTCBB Following Nasdaq Delisting
AIR CANADA: Bell Canada Wants to Set Off its CN$1.245M+ Claim

ALLIED PRINTING: Hires Slott & Barker as Bankruptcy Counsel
AQUILA INC: Raises Credit Rating to B- with Negative Outlook
BCI DEVELOPMENT: Case Summary & 10 Largest Unsecured Creditors
BELL CANADA: Gets Ericsson's Help to Lower Operating Costs
CAPTEC FRANCHISE: Moody's Cuts Restaurant Franchise Trust Ratings

CEC INDUSTRIES: Completes Major Corporate Restructuring
COLONIAL EXETER: Section 341(a) Meeting Scheduled on Sept. 28
COMPRESSION POLYMERS: S&P Puts B Rating on Planned $23MM Term Loan
CONSECO INC: S&P Says CEO Resignation Won't Affect BB- Ratings
CONTIMORTGAGE: S&P's Class B Rating Dives to D from CC

COUNSEL CORP: Delisted from Nasdaq SmallCap Market Yesterday
DELTA AIR: Asks Certificate Holders to Modify Contracts
DII IND: Asks Court to Extend DIP Financing to December 31
DLJ COMMERCIAL: Fitch Affirms Low-B Ratings on Six Classes
ENRON CORP: Examiner Asks Court to Extend Term Beyond Emergence

ENVIRONMENTAL LAND: Asks to Use Cash Collateral to Pay Expenses
EPIC DATA: Inks $1.3 Million P3-MMS Pact with Bell Helicopter
FELCOR LODGING: S&P Junks $50 Million Convertible Preferred Stock
FLEMING COMPANIES: Asks Court to Approve Local 205 Settlement Pact
FRESH CHOICE: Committee Signs-Up SulmeyerKupetz as Counsel

GALEY & LORD: Files Voluntary Chapter 11 Petition in N.D. Georgia
GALEY & LORD INC: Case Summary & 20 Largest Unsecured Creditors
GLIMCHER REALTY: Moody's Lowers Preferred Stock Rating to B1
GLOBAL CROSSING: Summary of New Jersey Class Action Lawsuit
GLOBALNET INT'L: Seeks Open-Ended Lease Decision Period

HI-RISE RECYCLING: Asks Nod to Hire Bruner-Cox as Accountants
HOLLINGER INC: Retractable Shares Priced at $7.25 Per Share
HOLLINGER INT'L: Ink Pact to Sell Telegraph Group for $1.21BB
HOLLINGER INT'L: Updates Commission as Financial Reports Not Ready
INFOUSA: Prepays Additional $5 Million of Bank Debt

INSIGHT HEALTH: S&P's B+ Credit Rating Still on Watch Negative
INTELEFILM CORP: Making Initial Liquidation Payment on Aug. 31
INTERPOOL INC: Discloses $41.2 Mil. Net Income in 2003
INTERSTATE HOTELS: Gets B Corporate Credit Rating from S&P
DUNES PLAZA: Case Summary & 6 Largest Unsecured Creditors

EL CALLAO: Implements Plan of Arrangement After Getting Court Okay
ELC LTD: Fitch Junks Four Classes & Rates Two Classes BB-
JUNIPER CBO: Standard & Poor's Junks Classes A-4, A-4L & B-2
KIDS WORLD: Case Summary & 6 Largest Unsecured Creditors
KMART CORPORATION: BofA & Fleet Back New $200 Million L/C Facility

KNOLL INC: S&P Cuts Corporate Credit & Bank Loan Ratings to BB-
KNOLL INC: Moody's Assigns Ba3 Rating to Bank Facilities
LEHMAN MFD: Fitch Cuts Ratings on Two Classes Five Notches to B
LEUCADIA NATIONAL: Investment Style Prompts S&P's BB Credit Rating
LINREAL CORP: Gets Okay to Use Cash Collateral until Sept. 8

LSP BATESVILLE: S&P Raises Rating on $326MM of Senior Bonds to B-
MAJESTIC STAR: COO Michael Kelly Won't Renew Employment Contract
MEDIA GROUP: Brings-In Neubert Pepe as Bankruptcy Counsel
MILLENIUM ASSISTED: Judge Lyons Rejects Roseland Financing Pact
MILLENIUM ASSISTED: Three-Member Creditors' Committee Appointed

MIRANT CORP: Asks Court to Nix 7 Calif. Utility Commission Claims
MORGAN STANLEY: S&P Affirms Low-B Ratings on Classes HYB1 B-4 & 5
MORGAN STANLEY: Fitch Puts BB Rating on Class E Auto Loan Notes
NORTEL NETWORKS: Declares Preferred Share Dividends
OCEANLAKE COMMERCE: Steven Moya Replaces Steve Koskie as CEO

OCEANLAKE COMMERCE: Secures $2 Million Loan Due April 2005
OMNI FACILITY: Committee Hires Kramer Levin as Counsel
PARKER DRILLING: S&P Assigns B- Rating to Proposed $150MM Notes
PEGASUS SATELLITE: Asks Court to Approve DirectTV & NRTC Accord
PEMSTAR INC: Taps Grant Thornton LLP as New Independent Auditors

PG&E NATIONAL: Deanli Offers $558 Million for IPP Portfolio
PJ REALTY INC: Case Summary & 9 Largest Unsecured Creditors
POLO BUILDERS: Turns to Steven Holowicki for Financial Advice
PRIME HOSPITALITY: Blackstone Offers $790 Mil. to Buy Company
QWEST: Inks 2-Yr. Communications Services Pact with Spirit Cruises

RS GROUP: Inks $36 Million Value Guaranteed Vacations Acquisition
SECURUS TECH: Moody's Assigns B2 Rating to $150MM Senior Notes
SER CORPORATION: Case Summary & 27 Largest Unsecured Creditors
SOLUTIA INC: Increase Price on Ascend & Vydyne Products by 10%
STRATUS TECH: Extends Amended 10.375% Debt Offering to Sept. 1

THOMAS GROUP: Inks $5.5 Million Credit Facility with BofA
TRANSPORTATION TECH: S&P Awaits IPO & Puts B Ratings on Watch
UNIFLEX: Committee Hires Young Conaway as Bankruptcy Co-Counsel
UNITED AIRLINES: Extends Starbucks Relationship in 3-Year Pact
URS CORP: Moody's Upgrades Senior Credit Facility Rating to Ba2

US AIRWAYS: Katz's $1.147M Patent Infringement Claim Still Hanging
VERITAS CLO: S&P Assigns BB Rating to Class E $8MM Secured Notes
VHJ ENERGY: Hires Moulton Bellingham as Special Counsel
VIATICAL LIQUIDITY: Asks to Hire Alan Myers as Accountant
VITRO: Moody's Junks $388 Million of Senior Notes

WASTE SERVICES: Bank Facility & Sub. Debt Get Moody's Junk Ratings
WASTE SERVICES: S&P Cuts Bank Loan Rating to B- & Junks Sub. Debt
WILTEL COMMS: Moody's Puts B2 & Caa1 Ratings on New Credit Pacts
WORLDCOM: Shareholders Have Until Sept. 1 to Opt-Out of Settlement

* BOOK REVIEW: The Rise of the Community Builders

                           *********


A.B. DICK: First Creditors' Meeting Slated for August 23
--------------------------------------------------------
The United States Trustee for Region 3 will convene a meeting of
A.B. Dick Company and its debtor-affiliates' creditors at
10:00 a.m., on August 23, 2004, in Room 2112 at the J. Caleb Boggs
Federal Building, 2nd Floor, 844 King Street, Wilmington,
Delaware.  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 Niles, Illinois, A.B. Dick Company --
http://www.abdick.com/-- is presently a leading global supplier
to the graphic arts and printing industry, manufacturing and
marketing equipment and supplies for the global quick print and
small commercial printing markets.  The Company, along with its
affiliates, filed for chapter 11 protection on July 13, 2004
(Bankr. Del. Case No. 04-12002).  Frederick B. Rosner, Esq., at
Jaspen Schlesinger Hoffman and Jami B. Nimeroff, Esq., at Buchanan
Ingersoll P.C., represent the Debtors in their restructuring
efforts.  When the Company filed for protection from its
creditors, they listed over $10 million in estimated assets and
estimated debts in over more than $100 million.


ADELPHIA: RCM Technologies Assignees Hold a $1,251,086 Claim
------------------------------------------------------------
Larry Hart, Carol Hart, Christopher Hart and Danielle Hart, as
assignees of RCM Technologies, Inc., simultaneously filed
identical proofs of claim against Adelphia Communications
Corporation and Adelphia Business Solutions, Inc.  Each of the
Claims asserts a $1,381,121 general unsecured claim for
information technology related services allegedly performed by RCM
on behalf of Adelphia.

The Harts assert that the ACOM Debtors must pay them the Claims
because ACOM managed and directed the IT services that RCM
performed.  Adelphia contest the Claims and the Harts' assertions.

Adelphia Cablevision, LLC, scheduled $202,561 as payable to RCM on
its schedules of liabilities.  Adelphia Cablevision of NY, Inc.,
and ACOM each scheduled "Undetermined" amounts as payable to RCM
on their schedules of liabilities.

Prior to the Petition Date, the ACOM Debtors paid RCM $142,464 of
the $1,381,121 allegedly owed to the Harts.  On June 24, 2004, the
ACOM Debtors commenced an avoidance action against RCM seeking to
recover $195,445 of prepetition payments made to RCM in April
2002, including the Prepetition Payment that satisfied invoices
assigned to the Harts.

To resolve all claims filed by the Harts against Adelphia, the
ACOM Debtors' scheduled amounts related to the Claims, and the
Avoidance Action, the parties stipulate and agree that:

    (a) The Harts' Claim No. 11341 against Cablevision for
        $1,381,121, will be reduced and allowed in Cablevision's
        case as a $370,000 general unsecured claim;

    (b) The Harts' Claim No. 725 for $1,381,121 against ABIZ
        will be reduced and allowed as a general unsecured claim
        for $881,086;

    (c) All remaining Claims filed by the Harts against the ACOM
        Debtors will be disallowed and expunged;

    (d) Each of the Scheduled Amounts, and any other amounts
        related to the Harts' Claims as assignees of RCM that may
        have been scheduled by Adelphia, if any, will be expunged;

    (e) The ACOM Debtors will cause the RCM Action to be
        voluntarily dismissed with prejudice; and

    (f) The parties exchange mutual releases.

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

Headquartered in Coudersport, Pa., Adelphia Communications
Corporation (OTC: ADELQ) is the fifth-largest cable television
company in the country.  Adelphia serves customers in 30 states
and Puerto Rico, and offers analog and digital video services,
high-speed Internet access and other advanced services over its
broadband networks.  The Company and its more than 200 affiliates
filed for Chapter 11 protection in the Southern District of New
York on June 25, 2002.  Those cases are jointly administered under
case number 02-41729.  Willkie Farr & Gallagher represents the
ACOM Debtors. (Adelphia Bankruptcy News, Issue No. 67; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


ADELPHIA BUSINESS: Attacks Four Overstated Lease Rejection Claims
-----------------------------------------------------------------
In the process of resolving proofs of claims filed in their
chapter 11 cases, Reorganized Adelphia Business Solutions, Inc.,
now known as Telcove, Inc., and certain of its subsidiaries,
discovered claims filed by four landlords that far exceed what's
owed by a debtor when it walks away from a lease agreement in a
bankruptcy case.

Judy G. Z. Liu, Esq., at Weil Gotshal & Manges, in New York, tells
the Bankruptcy Court in Manhattan that Lease Rejection Claim
calculations are governed by Section 502(b)(6) of the Bankruptcy
Code.

Section 502(b)(6) limits a lessor's claim for damages resulting
from the rejection of a lease to the "rent reserved" by the lease,
without acceleration, for the greater of (a) one year or (b) 15%
of the remaining term of the lease; but not to exceed three years,
from the commencement date.

To the extent that the four Lease Rejection Claims fail to comply
with the requirements of Section 502(b)(6), allowance of the
claims is impermissible, Ms. Liu asserts.

ABIZ, therefore, asks the Court to reduce the four Lease Rejection
Claims to amounts no greater than their correctly calculated
amounts:

                                   Claim    Asserted    Correct
      Claimant                      No.      Amount      Amount
      --------                     -----    --------    -------
      75 Broad LLC                  4130    $438,039   $231,089
      E-L Allison Pointe LLC        1107   2,073,208    491,519
      Depot Properties              3290     513,050    295,819
      Pro Player Stadium            1126     951,230    222,255

ABIZ further asks Judge Gerber to reduce the Asserted Amounts
based on the four Claimants' failure to prove their efforts to
mitigate lease rejection damages.

Ms. Liu notes that the four Claimants failed to support their
claims with any writing as required by Rule 3001(c) of the Federal
Rules of Bankruptcy Procedure.  Accordingly, the Claims are not
entitled to a presumption of validity or amount.  ABIZ recognizes
that ordinarily, a claimant in violation of Bankruptcy Rule
3001(c) must be given the opportunity to correct its error by
amending the claim to include necessary writing supporting the
claim.

To the extent that the four Claimants disagree with ABIZ's
calculation, the Claimants should submit additional documentation
supporting their calculations, taking into account their attempts
to mitigate damages.

Headquartered in Coudersport, Pa., Adelphia Business Solutions,
Inc., now known as TelCove -- http://www.adelphia-abs.com/-- is a
leading provider of facilities-based integrated communications
services to businesses, governmental customers, educational end
users and other communications services providers throughout the
United States.  The Company filed for Chapter 11 protection on
March 27, 2002 (Bankr. S.D.N.Y. Case No. 02-11389) and emerged
under a chapter 11 plan on April 7, 2004.  Judy G.Z. Liu, Esq., at
Weil, Gotshal & Manges LLP represents the Debtors in their
restructuring efforts.  When the Company filed for protection from
its creditors, it listed $2,126,334,000 in assets and
$1,654,343,000 in debts.  (Adelphia Bankruptcy News, Issue No. 67;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


AESP INC: Stock Trades on OTCBB Following Nasdaq Delisting
----------------------------------------------------------
AESP, Inc.'s (Nasdaq: AESP) common stock was delisted from The
Nasdaq SmallCap Market as of the opening of business yesterday,
August 19, 2004.  AESP's common stock immediately became eligible
to trade on the Over the Counter Bulletin Board (OTCBB) effective
with the opening of business yesterday.

The Company had received a letter from the Nasdaq Listing
Qualifications Staff notifying the Company that based upon the
Staff's review, the Company's common stock would be delisted on
June 4, 2004.  The Company had appealed the decision of the staff,
thereby staying the delisting decision, and a hearing was held
with respect to the Company's appeal on July 8, 2004 before a
Nasdaq Listing Qualifications Panel.

On August 17, 2004, the Company received a notice from Nasdaq
advising it that the Listing Qualifications Panel had rejected the
Company's appeal and determined to delist the Company's securities
from the Nasdaq SmallCap Market effective Thursday, August 19,
2004.

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

As previously reported, the Company commented that in their audit
report on the Company's 2003 financial statements, the Company's
auditors had included an explanatory paragraph in their report
with respect to the Company's ability to continue as a going
concern.

AESP, Inc., designs, manufactures, markets and distributes network
connectivity products under the brand name Signamax as well as
customized solutions for original equipment manufacturers
worldwide.  For additional Company information, visit our
websites, <http://www.aesp.com/>and
<http://www.Signamax.de/>


AIR CANADA: Bell Canada Wants to Set Off its CN$1.245M+ Claim
-------------------------------------------------------------
Bell Canada provides business and residential customers with a
variety of voice, Internet and data transmission services and
telecommunication solutions.  Bell Canada provides a wide array of
services to Air Canada pursuant to a variety of agreements,
including a Telecommunication Services Agreement dated November 1,
2000 between Air Canada and BCE Nexxia, Inc., and a Services
Agreement effective as of July 8, 2001, between Air Canada and
Nexxia.

Bell Canada directly provides worldwide data transmission services
to Air Canada in Ontario and Quebec.  Outside of Ontario and
Quebec, however, the data services are provided by a third party.
In Alberta and British Columbia, the services are provided by
Telus Corporation or its affiliates.  Outside of Canada, the
services are provided by Societe International de
Telecommunications Aeronautiques.

Air Canada directly pays Telus and SITA for certain specific types
of data transmission services known as "legacy services." Pursuant
to the Services Agreement, Bell Canada reimburses Air Canada for
the Third Party Payments.

The Bell Contracts give rise to a number of setoff obligations
between Bell Canada and Air Canada.

                        Bell Canada's Claim

Bell Canada filed a claim for CN$54,692,053 against Air Canada,
which was comprised of:

       -- a CN$10,057,085 prepetition accounts receivable; and

       -- a CN$44,634,967 restructuring claim.

The Claim was based on set off of CN$3,005,481, which was
comprised of:

       -- Bell Canada's prepetition obligations to Air Canada
          under the Services Agreement aggregating CN$1,760,413;
          and

       -- Bell Canada's postpetition obligations to Air Canada
          totaling CN$1,245,068.

There are two components to Bell Canada's CN$1,245,068
postpetition obligations to Air Canada:

       * CN$265,068 relates to the services provided by SITA from
         April 3, 2003 to September 3, 2003; and

       * CN$980,000 relates to the services provided by Telus from
         April 3, 2003 to October 3, 2003.

Bell Canada estimated both components because, despite repeated
requests for billing, Air Canada still has not invoiced Bell
Canada for the amounts the airline paid to Telus and SITA during
the relevant period.

                Talks to Settle Bell Canada's Claims

In May 2004, Ernst & Young, Inc., the Monitor appointed in
Applicants' cases, issued a Notice of Revision reducing Bell
Canada's Claim to CN$24,436,081.  The Monitor slashed Bell
Canada's prepetition claim to CN$7,564,275 and the restructuring
claim to CN$16,871,806.

Bell Canada disputed the Notice.  Bell Canada, Air Canada and the
Monitor held discussions to finalize the amount of Bell Canada's
Claim.

Consequently, the parties agree to fix Bell Canada's prepetition
claim at CN$9,679,458 and Bell Canada's restructuring claim at
CN$23,090,245.  The parties also agree to fix the prepetition set-
off amount at CN$1,760,413, thus reducing Bell Canada's
prepetition claim to CN$8,168,767.

The parties continue to dispute the CN$1,245,068 postpetition
obligation Bell Canada estimated it owed to Air Canada.

               Bell Canada Wants to Exercise Set-Off

Bell Canada asks Mr. Justice Farley to lift the CCAA stay so it
may set off the CN$1,245,068 it owed to Air Canada against its
CN$8,168,767 prepetition claim.

Kevin R. Aalto, Esq., at Gowling Lafleur Henderson, LLP, in
Toronto, Ontario, contends that Section 18.1 of the Companies'
Creditors Arrangement Act expressly preserves creditors' rights of
set-off.  Section 18.1 provides that:

      "The law of set-off applies to all claims against a
      debtor company and to all actions instituted by it
      for the recovery of debts due to the company in the
      same manner and to the same extent as if the company
      were plaintiff or defendant, as the case may be."

Air Canada's filing under the CCAA does not terminate the
mutuality necessary for set-off rights to be asserted.  Thus,
neither the Initial CCAA Order nor the CCAA prevents Bell Canada
from exercising its set-off rights.

Mr. Aalto also points out that a number of other courts across
Canada have recognized the applicability of the law of set-off to
postpetition claims by a debtor company engaged in a
restructuring:

    (1) The Court of Appeal for Alberta in In re Blue Range
        Resource Corp., [2000] CarswellAlta 731 (C.A.) said that
        "[t]he fact that the damages owed to Duke and Engage arise
        after the stay order is not relevant when the obligations
        arise out of the same contracts;

    (2) In In Re Canadian Airlines Corp., [2001] A.J. No. 226
        (Alta. Q.B.), Madam Justice Papery expressly recognized
        the right of the British Columbia Government to set off
        its tax rebate obligations, arising both before and after
        the making of the Initial Order, against tax arrears owed
        to it, on the basis of both legal and equitable set-off;
        and

    (3) The Ontario Superior Court of Justice and the Court of
        Appeal for Ontario in Algoma Steel v. Union Gas, [2003]
        Casselton. 115 (C.A.) permitted Union Gas to set off
        against Algoma's prepetition debt to Union Gas certain
        amounts that could only be determined sometime after the
        making of the Initial Order.

                         Air Canada Objects

Ashley John Taylor, Esq., at Stikeman Elliott, LLP, in Toronto,
Ontario, observes that Bell Canada inappropriately used the term
"set-off" as it is actually asking the CCAA Court to allow it to
"withhold" funds from Air Canada until it can realize 100% of its
prepetition claim, in priority to Air Canada's other creditors.  A
party can only resort to set-off as a defense, not as a right, Mr.
Taylor reminds Mr. Justice Farley.

Mr. Taylor explains that the British Columbia Court of Appeal was
faced with a similar situation in Quintette Coal, Ltd., v. Nippon
Steel Corp. (1990), 2 C.B.R. (3d) 303 (C.A.), where a creditor
incurred postpetition debt and tried to set off the amounts
against the prepetition amounts owed.  The Court of Appeals
determined that set-off is only available as a defense and held
that:

      "The word 'withholding' has been used throughout these
      reasons so as to distinguish from the concept of 'set-off'.
      The Japanese companies put their case forward on appeal
      primarily on the ground that what they were engaged in was
      set-off and that set-off was not a proceeding.  With
      respect, the argument failed to recognize the difference
      between set-off in the colloquial sense and set-off in
      terms of the legal lexicon.  Set-off in law is only
      available as a defense.  It has been described as 'a
      shield and not a sword'.  In respect of the payments due
      for ongoing coal deliveries Quintette has not sued for
      the amounts withheld.  The Japanese companies have not
      therefore been put into a position where they could raise
      the set-off shield.  On the contrary, they have had, and
      wish to continue to have, recourse to set-off, in the
      colloquial sense, as a sword to achieve a species of
      extra judicial execution.  The sword is being, and is
      intended to be, wielded 'against the company'."

Mr. Taylor notes that Bell Canada is seeking to misappropriate the
law to "achieve a species of extra judicial execution.  Under the
contract, it is Air Canada who provides payment for services and
the true nature of what Bell Canada seeks is in effect an order
preventing Air Canada from claiming the credits to which the
airline is entitled against the postpetition invoices that it
pays.  If there is a set-off right, it belongs to Air Canada not
Bell Canada.

Air Canada, therefore, asks Mr. Justice Farley to dismiss Bell
Canada's request.  The proper forum for the request is before a
Claims Officer.

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


ALLIED PRINTING: Hires Slott & Barker as Bankruptcy Counsel
-----------------------------------------------------------
Allied Printing, Inc., asks the U.S. Bankruptcy Court for the
Middle District of Florida for permission to employ Slott & Barker
as its bankruptcy counsel.

Earl M. Barker, Jr., Esq., will lead the team in this engagement.

Slott & Barker will:

    a) provide legal advice to the Debtor-in-possession with
       respect to its powers and duties in the continued
       operation of its businesses and management of its
       property;

    b) prepare all necessary applications, answers, orders,
       reports and legal papers on behalf of the Debtor-in-
       possession, including but not limited to motions for sale
       of assets, acceptance of executory contracts and leases,
       and the chapter 11 plan and disclosure statement; and

    c) perform all other legal services for the Debtor-in-
       possession that are necessary or advisable in this case
       and that require the services of an attorney.

Mr. Barker will charge the Debtor his $250 hourly rate.  Hollyn J.
Foster, Esq., who charges $100 per hour, will assist Mr. Barker.

Headquartered in Jacksonville, Florida, Allied Printing --
http://www.alliedgraphics.net/-- provides printing services
specializing in high quality color lithography.  The company filed
for chapter 11 protection on July 2, 2004 (Bankr. M.D. Fla. Case
No. 04-06812).  When the Debtor filed for protection from its
creditors, it listed $3,373,230 in total assets and $6,099,485 in
total debts.


AQUILA INC: Raises Credit Rating to B- with Negative Outlook
------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on energy provider Aquila, Inc., to 'B-' from 'CCC+' and
removed the rating from CreditWatch, where it was placed with
developing implications on July 21, 2004.  The outlook is
negative.

Kansas City, Missouri-based Aquila has about $2.5 billion of debt.

The rating action is based on Aquila's termination of a long-term,
prepaid natural gas supply contract with the Municipal Gas
Authority of Mississippi -- MGAM -- and an agreement with the
American Public Energy Agency -- APEA -- to terminate two long-
term natural gas supply contracts on Sept. 30, 2004.

"The termination allows the company to regain access to a
substantial portion of its liquidity and alleviates credit
concerns associated with the onerous impact of the gas prepay
transactions on the company's financial profile," said Standard &
Poor's credit analyst Rajeev Sharma.

"Furthermore, these contracts represent 75% of Aquila's prepaid
natural gas supply contract obligations, which have been a major
rating concern," added Mr. Sharma.

As of June 30, 2004, the total obligation of the gas prepay
contracts to be terminated was $574 million.  The elimination of
these prepaid gas contracts to municipal utilities in Nebraska and
Mississippi allows Aquila to move closer to fully exiting the
energy merchant business and focus on its domestic utility
operations.

Standard & Poor's also said that although Aquila has made
significant progress toward repositioning itself as a domestic
utility business, concerns remain over the company's burdensome
debt level and lack of cash flow generation.

Rating stabilization is predicated on Aquila's ability to achieve
further debt reduction, successful rate increases, and cost
reductions.


BCI DEVELOPMENT: Case Summary & 10 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: BCI Development, L.P.
        711 South Central Avenue
        Baltimore, Maryland 21202

Bankruptcy Case No.: 04-29041

Chapter 11 Petition Date: August 13, 2004

Court: District of Maryland (Baltimore)

Judge: E. Stephen Derby

Debtor's Counsel: Alan M. Grochal, Esq.
                  Tydings & Rosenberg, LLP
                  100 East Pratt Street
                  Baltimore, MD 21202
                  Tel: 410-752-9715

Total Assets: $5,000,000

Total Debts:  $2,883,087

Debtor's 10 Largest Unsecured Creditors:

Entity                                 Claim Amount
------                                 ------------
Mace Electric                              $418,066
4001 Coolidge Avenue
Baltimore, MD 21229

Universal Contractors, Inc.                 $90,000

C.F. Masonry                                $54,784

Maryland Septic                             $17,007

Vision Concepts, Inc.                        $7,974

Partitions Plus                              $4,945

Alliance Roofing & Sheet Metal, Inc.         $4,678

Landtech Corporation                         $4,500

A&B Flooring                                 $4,210

Design Plus                                  $2,623


BELL CANADA: Gets Ericsson's Help to Lower Operating Costs
----------------------------------------------------------
Bell Canada will deploy one of the largest fixed wireless
broadband networks in North America.  The company teamed up with
Ericsson, end-to-end provider of mobile and broadband Internet
solutions, to expand its Alberta network by deploying more than
300 point-to-multipoint (PTMP) wireless links.

"Bell is proud to deliver another landmark network initiative in
the West," explained Paul Healey, President of Western Canada for
Bell.  "Fixed wireless enables Bell to deliver on our promise of
efficiently providing business customers with access to Internet
Protocol (IP) connectivity as well as new voice and data
services."

As Bell migrates to a next generation Voice over IP (VoIP)
network, customers will continue to benefit from the largest and
most reliable national network in the country, years of voice
experience and the expertise of a highly skilled team of people
that will ensure a seamless transition into an IP world for its
customers.  Fixed wireless will be part of that transition and
this leading-edge technology allows Bell to quickly and cost
effectively expand its network.

"Bell chose Ericsson's MINI-LINK because it delivers improved
transmission flexibility, lower operating costs and greater scope
for service differentiation," said Mark Henderson, President and
CEO, Ericsson Canada, Inc., "We're proud to be able to provide
Bell with the scalability and flexibility it needs to maintain its
competitive edge and meet its customers communication needs."

The contract includes a complete MINI-LINK network including
point-to-multipoint systems, network management and services.  The
system is complemented by a point-to-point MINI-LINK High Capacity
OC-3 equivalent solution, providing high-speed data rates of up to
155 Mbps.

Implementation has begun on the network, which will cover a
footprint of several thousand kilometers across Alberta.

                    About Ericsson MINI-LINK

Ericsson's MINI-LINK portfolio has been acknowledged by operators
as the most complete microwave access transmission solution for a
number of years.  More than 600,000 MINI-LINK units have already
been deployed in more than 125 countries, giving Ericsson a global
market share of more than 40 per cent - over twice the size of its
closest competitor.  Ericsson's commitment to open standards is
carried through into its microwave portfolio, making it fully
compatible with networks from other suppliers.  For more
information on Ericsson's MINI-LINK solution, visit
http://www.ericsson.com/products/transmission/

                       About Bell Canada

Bell Canada -- http://www.bci.ca/-- provides connectivity to
residential and business customers through wired and wireless
voice and data communications, local and long distance phone
services, high speed and wireless Internet access, IP-broadband
services, e-business solutions and satellite television services.
Bell Canada is wholly owned by BCE Inc.

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


CAPTEC FRANCHISE: Moody's Cuts Restaurant Franchise Trust Ratings
-----------------------------------------------------------------
Moody's Investors Service downgrades three classes of notes issued
by Franchise Loan Trust 1998-I and five classes of notes issued by
Captec Franchise Trust 1999-1.  The Franchise Loan Trust
transaction was a joint securitization of franchise loans
originated by Captec Financial Group and Convenience Store Finance
Company LLC.  Convenience Store Finance is an affiliate of Credit
Suisse First Boston Mortgage Capital.  Loans contributed to Captec
Franchise Trust 1999-1 were loans to franchise restaurant
operators originated by Captec.

Rating Action:

   Franchise Loan Trust 1998-I
   Franchise Loan Notes

      -- $161 million Class A-3 Notes, downgraded to Ba2 from
         Baa3;

      -- $12.8 million Class B Notes, downgraded to Caa1 from B3;
         and

      -- Class A-X IO, downgraded to A3 from Aaa.

   Captec Franchise Trust 1999-1
   Franchise Receivable Notes

      -- $58.0 million Class A-2 Notes, downgraded to Ba1 from
         Baa2;

      -- $4.3 million Class B Notes, downgraded to B3 from B1;

      -- $7.2 million Class C Notes, downgraded to Ca from Caa1;

      -- $7.2 million Class D Notes, downgraded to C from Ca; and

      -- Class A-X IO, downgraded to Ba1 from Baa2.

The downgrades are due to the continued deterioration in
collateral performance of the pools and the anticipated erosion of
credit support.  As of the July 2004 distribution date, the
delinquency rate for Franchise Loan Trust 1998-I was 25.6%.  Total
writedowns on the 1998-I transaction have totaled $40.75 million,
which is 11.1% of the original principal balance.  In the 1998-I
deal, subordination protecting the:

   * Class A-3 securities is 24.9%;
   * 19.5% for Class B; 6.2% for Class C; and
   * 1.5% for Class D.

The July 2004 delinquency rate for 1999-1 was 18.7%.  The 1999-1
securitization has experienced writedowns of $12.1 million or 8.4%
of the original principal balance.  In Captec 1999-1, Class A-2
has 25% subordination protection followed by 19.8% for Class B;
11.3% for Class C; and 2.7% for Class D.

The review action focused on potential recoveries on currently
distressed borrowers and the potential for future defaults.
Although delinquencies have leveled off with few new problem
borrowers, future problem loans could be significant as both
transactions have a high percentage of borrowers with a low fixed
charge coverage ratio -- FCCR.  In 1998-I, 36.6% of the loans by
principal balance have a FCCR less than 1.25 while the 1999-1 deal
has nearly 36% of the loan balance with a FCCR less than 1.2.

Captec Financial Group, Inc., based in Ann Arbor, Michigan, is a
specialized commercial finance company.  Convenience Store Finance
Company, LLC, was formed for the purpose of originating fixed rate
loans to the owners of franchised, licensed, and branded
convenience stores, gas stations, and auto plazas/truck stops.

The notes were sold in a privately negotiated transaction without
registration under the Securities Act of 1933 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.



CEC INDUSTRIES: Completes Major Corporate Restructuring
-------------------------------------------------------
CEC Industries Corp. (OTC Pink Sheets: CECC) completed a major
corporate restructuring, including:

   * the resignation of its former officers and directors,

   * the establishment of a new Board of Directors and

   * the appointment of new senior management.

Additionally:

   * the Company's corporate offices have been relocated from Las
     Vegas to Miami, and

   * it is anticipated the Company will soon change its name to
     reflect its new corporate direction.

As part of its restructuring, the Company shed a majority of its
ownership interest in Pay Card Solutions, Inc., a subsidiary of
the Company acquired in November of 2003.  By not providing a
required audit, Pay Card was in breach of its agreement and, as a
result, CECC unilaterally cancelled the issuance of 3 million
shares of its common stock to its principals.

The Company also entered into an Asset Purchase Agreement with CEC
Asset Reclamation Corp. to sell the balance of its remaining
assets for a total purchase price of 20 percent of the net
proceeds in the liquidation of these assets.

"We are acutely aware that CECC Industries has gone through a
number of transitions since its inception," said recently
appointed CEO Jeffrey Sternberg.  "Our initial, primary goal will
be to secure financing that will enable us to purse attractive
business opportunities that will create long- term shareholder
value."

Sternberg, who was appointed Executive Vice President and as a
member of the Board of Directors in March of this year, was
recently appointed President, Chief Operating Officer and Chief
Financial Officer.  He has served as a managing member of Phoenix
Capital Partners, LLC, a financial investment firm based in
Hollywood, Fla. Sternberg, who worked for Ft. Lauderdale-based
Atico International, has more than two decades of experience
working with mass merchandisers, drug chains and specialty stores.

Also recently named to the Board of Directors was Craig Press.
Press is the Vice President and head of operations for Georal
International, Corp., and AJR International, Ltd., both located in
Whitestone, New York.  A highly respected security consultant for
anti-terrorism perimeter security, employee entrance and egress,
fire, building and safety code, he is responsible for day-to-day
operations of the company's New York and California locations.

                       About the Company

C.E.C. Industries, Corp., is a Nevada Corporation which has
recently entered into a Memorandum of Proposed Terms to acquire
the majority of a company that provides a suite of cash-based
debit cards and stored value cards for ATM and debit "point of
sale" transactions.

At June 30, 2004, C.E.C. Industries Corp.'s balance sheet showed a
$477,977 stockholders' deficit, compared to an $831,034 deficit at
March 31, 2004.


COLONIAL EXETER: Section 341(a) Meeting Scheduled on Sept. 28
-------------------------------------------------------------
The United States Trustee for Region 14 will convene a meeting of
Colonial Exeter, LLC's creditors at 1:30 p.m., on September 28,
2004, in Room 230 at North First Avenue in Phoenix, Arizona.  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 Phoenix, Arizona, Colonial Exeter filed for
chapter 11 protection on August 17, 2004 (Bankr. Ariz. Case No.
04-14545).  Dennis J. Wortman, Esq., in Phoenix, Arizona
represents the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its creditors, it listed above
$10 million in total assets and debts.


COMPRESSION POLYMERS: S&P Puts B Rating on Planned $23MM Term Loan
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on Moosic,
Pennsylvania-based Compression Polymers Holdings, LLC, following
the company's announcement of plans for a $23 million add-on to
its existing first-lien term loan to finance a $23 million
dividend to shareholders.  The outlook is stable. The $23 million
add-on to the first-lien term loan is rated 'B', same as the
corporate credit rating, with a '4' recovery rating.

"The ratings incorporated the possibility of another dividend to
shareholders, although the timing of this cash distribution so
soon after the initial assignment of ratings this past February
highlights the very aggressive financial policies of the equity
sponsors," said Standard & Poor's credit analyst Wesley E. Chinn.
Nevertheless, earnings and cash flow have been relatively strong
and are expected to remain so during the coming quarters.  This
should enable the company to reduce elevated debt levels and
return credit ratios to levels appropriate for the ratings within
the next year.

Compression Polymers' credit quality reflects:

   * the modest sales bases of its principal product lines;

   * the relatively short operating record of the key trimboard
     product;

   * very aggressive debt leverage, exposure to volatile raw-
     material costs;

   * the cyclicality of end markets, and vulnerability to rising
     interest rates.

These negatives overshadow the company's solid position in
residential and light commercial exterior building products and
toilet partition markets, the trend toward plastic products with
their lower life-cycle costs, and healthy operating margins.

Compression Polymers' plastic products, which generate annual
sales of more than $160 million, are used for decorative,
synthetic wood trim, high-use institutional toilet compartments,
and a variety of other applications.


CONSECO INC: S&P Says CEO Resignation Won't Affect BB- Ratings
--------------------------------------------------------------
On August 13, 2004, Standard & Poor's Ratings Services said that
in light of the resignation of Conseco, Inc., (BB-/Stable/--)
(OTC BB:CNCEQ) CEO William Shea, Standard & Poor's planned to meet
with Conseco's new CEO, William Kirsch, and the new Executive
Chairman of Conseco's board of directors, Glenn Hilliard, to
discuss their strategic plans for the company.  Standard & Poor's
had had concerns about whether Shea's resignation was a portent of
previously unannounced problems with the company.

"After discussions with Conseco's new CEO and new Executive
Chairman of Conseco's board of directors, we do not believe the
recent resignation of former CEO William Shea is an indication of
underlying problems with the company," said Standard & Poor's
credit analyst Jon Reichert.  "Standard & Poor's expects Kirsch
will continue to execute the strategy put in place during Shea's
tenure with Conseco."  As a result, Standard & Poor's is not
taking any rating action on Conseco at this time.

Standard & Poor's will continue to review Conseco's operating
performance as well as progress made in regaining sales momentum
through the independent agent channel since its emergence from
bankruptcy in September 2003.

                         About Conseco

Conseco, Inc.'s insurance companies help protect working American
families and seniors from financial adversity: Medicare
supplement, long-term care, cancer, heart/stroke and accident
policies protect people against major unplanned expenses;
annuities and life insurance products help people plan for their
financial futures.

Conseco, Inc., and Conseco Finance Corp. filed for chapter 11
protection on December 17, 2002 (Bankr. N.D. Ill. Case Nos.
02-49671 through 02-49676, inclusive) (Doyle, J.).  Conseco, Inc.,
emerged from chapter 11 protection on Sept. 10, 2003, under the
terms of a confirmed plan of reorganization.  CFC liquidated its
consumer finance business under the terms of a plan of liquidation
confirmed on Sept. 9, 2003.


CONTIMORTGAGE: S&P's Class B Rating Dives to D from CC
------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on class B
from ContiMortgage Home Equity Loan Trust 1999-3 to 'D' from 'CC'.
Simultaneously, ratings are affirmed on the remaining three
classes from this transaction.

The lowered rating on class B reflects a decrease in credit
support to the subordinate classes due to net losses that
consistently exceed excess interest, resulting in an erosion of
overcollateralization and losses being allocated to the
certificates.  Based on the current performance, it is not likely
that the principal loss will be recoverable.

The affirmations on the classes reflect adequate remaining credit
support percentages for the senior classes.

Credit support for the transaction is provided by subordination,
excess interest, and overcollateralization.  Additional credit
support for the senior classes is provided by bond insurance
issued by Ambac Assurance Corp.

As of the July 2004 distribution date, total delinquencies were
32.41%, serious delinquencies were 20.02%, and cumulative losses
were 6.83%.

The transaction is backed by fixed- and adjustable-rate subprime
home equity mortgage loans secured by first and second liens on
owner-occupied one- to four-family residences.

                         Rating Lowered

          ContiMortgage Home Equity Loan Trust 1999-3
                        Pass-thru certs

                                 Rating
                   Class     To          From
                   -----     --          ----
                   B         D           CC

                        Ratings Affirmed

          ContiMortgage Home Equity Loan Trust 1999-3
                        Pass-thru certs

                   Class              Rating
                   -----              ------
                   A-6, A-7, A-8      AAA


COUNSEL CORP: Delisted from Nasdaq SmallCap Market Yesterday
------------------------------------------------------------
Counsel Corporation (TSX:CXS / NASDAQ:CXSN) received a Nasdaq
Listing Qualifications Panel determination denying Counsel's
request for continued inclusion on The Nasdaq SmallCap Market
pursuant to an exception to the shareholders' equity/market value
of listed securities/net income and bid price requirements.
Consequently, Counsel's Common Stock was delisted from The Nasdaq
SmallCap Market effective with the open of business on Thursday,
August 19, 2004.

Counsel's Common Stock will be immediately eligible to trade on
the Over the Counter Bulletin Board effective with the open of
business on August 19, 2004.

                   About Counsel Corporation

Headquartered in Toronto, Ontario, Counsel Corporation (TSX:CXS /
NASDAQ:CXSN) is a diversified company focused on acquiring and
building businesses using its financial and operational expertise
in two specific sectors: communications and real estate.
Counsel's communications platform is focused on building upon its
existing communications businesses through organic growth and by
acquiring substantial additional customer revenues.  Counsel's
real estate platform has a focused strategy of investing in and
developing income producing commercial properties, primarily
retail shopping centres.  For further information, visit Counsel's
website at http://www.counselcorp.com/


DELTA AIR: Asks Certificate Holders to Modify Contracts
-------------------------------------------------------
Delta Air Lines (NYSE: DAL) began soliciting consents from holders
of certain equipment trust certificates and pass through
certificates to remove any contractual restrictions on Delta's
ability to purchase or hold those securities.  These certificates
were issued by trusts that lease various aircraft to Delta to
assist in financing the cost of such aircraft.  Delta is seeking
consents to provide Delta with greater flexibility to effect a
successful out-of-court restructuring.

The record date for the determination of holders entitled to give
consents is 5:00 p.m., New York City time, on August 18, 2004.
The consent solicitations will expire at 5:00 p.m., New York City
time, on August 31, 2004, unless otherwise extended.

Merrill Lynch & Co., Goldman, Sachs & Co. and Morgan Stanley & Co.
Incorporated are the solicitation agents for the consent process.
Global Bondholder Services Corporation is the information agent.
Persons with questions regarding the terms of the consent
solicitations or needing copies of the consent solicitation
materials should contact Global Bondholder Services Corporation at
(212) 430-3774 or (866) 470-3700.

                  Equipment Trust Certificates

                                 CUSIP                 ISIN
             Securities          Number               Number
             ----------          ------               ------

    1988 Equipment Trust        247361EY0           US247361EY06
    Certificates, Series A      247361FK9           US247361FK92
                                247361FS2           US247361FS29
                                247361FV5           US247361FV57
                                247361GC6           US247361GC67

    1988 Equipment Trust        247361EZ7           US247361EZ70
    Certificates, Series B      247361FL7           US247361FL75
                                247361FT0           US247361FT02
                                247361FW3           US247361FW31
                                247361GD4           US247361GD41

    1988 Equipment Trust        247361FA1           US247361FA11
    Certificates, Series C      247361FM5           US247361FM58
                                247361FU7           US247361FU74
                                247361FX1           US247361FX14
                                247361GE2           US247361GE24

    1989 Equipment Trust        247361NR5           US247361NR53
    Certificates, Series A      247361PL6           US247361PL65
                                247361PW2           US247361PW21
                                247361QD3           US247361QD31
                                247361QH4           US247361QH45

    1989 Equipment Trust        247361PM4           US247361PM49
    Certificates, Series B      247361PX0           US247361PX04
                                247361QE1           US247361QE14
                                247361QJ0           US247361QJ01
                                247361QM3           US247361QM30

    1989 Equipment Trust        247361NS3           US247361NS37
    Certificates, Series C      247361PA0           US247361PA01
                                247361PC6           US247361PC66
                                247361PN2           US247361PN22
                                247361PY8           US247361PY86
                                247361QF8           US247361QF88
                                247361QK7           US247361QK73

    1989 Equipment Trust        247361NT1           US247361NT10
    Certificates, Series D      247361PB8           US247361PB83
                                247361PD4           US247361PD40
                                247361PP7           US247361PP79
                                247361PZ5           US247361PZ51
                                247361QG6           US247361QG61
                                247361QL5           US247361QL56

    1989 Equipment Trust        247361NN4           US247361NN40
    Certificates, Series E      247361NX2           US247361NX22
                                247361PH5           US247361PH53
                                247361PT9           US247361PT91

    1989 Equipment Trust        247361NP9           US247361NP97
    Certificates, Series F      247361NY0           US247361NY05
                                247361PJ1           US247361PJ10
                                247361PU6           US247361PU64

    1989 Equipment Trust        247361NQ7           US247361NQ70
    Certificates, Series G      247361NZ7           US247361NZ79
                                247361PK9           US247361PK82
                                247361PV4           US247361PV48

    1989 Equipment Trust        247361NK0           US247361NK01
    Certificates, Series H      247361NU8           US247361NU82
                                247361PE2           US247361PE23
                                247361PQ5           US247361PQ52
                                247361QA9           US247361QA91

    1989 Equipment Trust        247361NL8           US247361NL83
    Certificates, Series I      247361NV6           US247361NV65
                                247361PF9           US247361PF97
                                247361PR3           US247361PR36
                                247361QB7           US247361QB74

    1989 Equipment Trust        247361NM6           US247361NM66
    Certificates, Series J      247361NW4           US247361NW49
                                247361PG7           US247361PG70
                                247361PS1           US247361PS19
                                247361QC5           US247361QC57

    1990 Equipment Trust        247361VA3           US247361VA37
    Certificates, Series A      247361VH8           US247361VH89
                                247361VT2           US247361VT28

    1990 Equipment Trust        247361VB1           US247361VB10
    Certificates, Series B      247361VJ4           US247361VJ46
                                247361VU9           US247361VU90

    1990 Equipment Trust        247361VC9           US247361VC92
    Certificates, Series C      247361VK1           US247361VK19
                                247361VV7           US247361VV73

    1990 Equipment Trust        247361VD7           US247361VD75
    Certificates, Series D      247361VL9           US247361VL91
                                247361VW5           US247361VW56

    1990 Equipment Trust        247361VE5           US247361VE58
    Certificates, Series E      247361VM7           US247361VM74
                                247361VX3           US247361VX30

    1990 Equipment Trust        247361VZ8           US247361VZ87
    Certificates, Series F      247361VN5           US247361VN57
                                247361VY1           US247361VY13

    1990 Equipment Trust        247361VF2           US247361VF24
    Certificates, Series G      247361VP0           US247361VP06
                                247361VR6           US247361VR61

    1990 Equipment Trust        247361VG0           US247361VG07
    Certificates, Series H      247361VQ8           US247361VQ88
                                247361VS4           US247361VS45

    1990 Equipment Trust        247361WD6           US247361WD66
    Certificates, Series I

    1990 Equipment Trust        247361WE4           US247361WE40
    Certificates, Series J

    1990 Equipment Trust        247361WF1           US247361WF15
    Certificates, Series K

    1991 Equipment Trust        247361WJ3           US247361WJ37
    Certificates, Series A      247361WR5           US247361WR52

    1991 Equipment Trust        247361WK0           US247361WK00
    Certificates, Series B      247361WS3           US247361WS36

    1991 Equipment Trust        247361WL8           US247361WL82
    Certificates, Series C      247361WP9           US247361WP96

    1991 Equipment Trust        247361WM6           US247361WM65
    Certificates, Series D      247361WQ7           US247361WQ79

    1991 Equipment Trust        247361WN4           US247361WN49
    Certificates, Series E      247361WT1           US247361WT19

    1991 Equipment Trust        247361WV6           US247361WV64
    Certificates, Series F      247361XD5           US247361XD57

    1991 Equipment Trust        247361XB9           US247361XB91
    Certificates, Series G      247361XE3           US247361XE31

    1991 Equipment Trust        247361WW4           US247361WW48
    Certificates, Series H      247361XC7           US247361XC74

    1991 Equipment Trust        247361WX2           US247361WX21
    Certificates, Series I      247361XF0           US247361XF06

    1991 Equipment Trust        247361WY0           US247361WY04
    Certificates, Series J      247361XG8           US247361XG88

    1991 Equipment Trust        247361WZ7           US247361WZ78
    Certificates, Series K      247361XH6           US247361XH61

    1991 Equipment Trust        247361XA1           US247361XA19
    Certificates, Series L      247361XJ2           US247361XJ28

    1992 Equipment Trust        247361XK9           US247361XK90
    Certificates, Series A      247361XR4           US247361XR44

    1992 Equipment Trust        247361XL7           US247361XL73
    Certificates, Series B      247361XS2           US247361XS27

    1992 Equipment Trust        247361XM5           US247361XM56
    Certificates, Series C      247361XT0           US247361XT00

    1992 Equipment Trust        247361XN3           US247361XN30
    Certificates, Series D      247361XU7           US247361XU72

    1992 Equipment Trust        247361XP8           US247361XP87
    Certificates, Series E      247361XV5           US247361XV55

    1992 Equipment Trust        247361XQ6           US247361XQ60
    Certificates, Series F      247361XW3           US247361XW39


                          Pass Through Certificates

                                 CUSIP                 ISIN
           Securities            Number               Number

    1992 Pass Through           247367AA3          US247367AA36
    Certificates, Series A1

    1992 Pass Through           247367AB1          US247367AB19
    Certificates, Series A2

    1992 Pass Through           247367AC9          US247367AC91
    Certificates, Series B1

    1992 Pass Through           247367AD7          US247367AD74
    Certificates, Series B2

    1993 Pass Through           247367AE5          US247367AE57
    Certificates, Series A1

    1993 Pass Through           247367AF2          US247367AF23
    Certificates, Series A2

    1996 Pass Through           247367AL9          US247367AL90
    Certificates, Series A1

    1996 Pass Through           247367AM7          US247367AM73
    Certificates, Series A2

                      About Delta Air Lines

Delta is the third largest U.S. airline in terms of revenue
passenger miles flown.  Delta operates domestic hubs at Atlanta,
Cincinnati, Dallas-Fort Worth, and Salt Lake City.  International
gateways are located at Atlanta and New York's JFK International
Airport.  Wholly owned regional airlines Comair and Atlantic
Southeast Airlines, together with contract carriers, feed traffic
into Delta's hubs through short-haul regional jet and turboprop
operations.

                         *     *     *

As reported in the Troubled Company Reporter on August 17, 2004,
Fitch Ratings downgrades Delta Airlines European Enhanced
Equipment pass-through certificates, series 2001-2 (2001-2):

   -- Class A downgraded to 'BBB-' from 'AA';

   -- Class B downgraded to 'CCC' from 'BB+'.

The rating actions reflect Fitch's downgrade of Delta Airlines,
Inc.'s unsecured debt to 'CC' from 'CCC+' as well as Fitch's
concern that the value of some of the aircraft supporting the
2001-2 transaction could be subject to impairment in the event
that Delta files for Chapter 11 bankruptcy.

The unsecured debt downgrade 'follows the recent exchange of
contract proposals between Delta management and the Air Line
Pilots Association -- ALPA -- and the heightened risk that a
stalemate in pilot cost restructuring negotiations may ultimately
force the carrier into a Chapter 11 filing.'

The aircraft collateral that supports the 2001-2 transaction
comprises 19 Boeing aircraft that include 11 737-800s, four 767-
300ERs, and four 777-200ERs all delivered new between 1998 and
2001.  While it is likely most of the aircraft would continue to
be essential flight assets for Delta, it is also possible that
some of the leases associated with the aircraft might be
renegotiated or rejected in the event that Delta files for Chapter
11.  Although the EETC transaction was completed post-Sept. 11
(December 2001), Fitch believes that the leases associated with
the aircraft may be at rates in excess of the current market.

Fitch's EETC rating criteria relies on the quality of the
collateral backstopping the transaction and the credit quality of
the underlying obligor.  EETC ratings are linked to the underlying
obligor's credit quality.


DII IND: Asks Court to Extend DIP Financing to December 31
----------------------------------------------------------
Michael G. Zanic, Esq., at Kirkpatrick & Lockhart, LLP, in
Pittsburgh, Pennsylvania, relates that on January 13, 2004, the
U.S. Bankruptcy Court for the Western District of Pennsylvania
approved, on a final basis, the $350,000,000 DIP Financing
Agreement of DII Industries, LLC, and its debtor-affiliates with
Halliburton Energy Services, Inc., and Halliburton Company.  Under
the terms of the DIP Financing Agreement, the contractual
obligation of Halliburton and HESI to extend financing to the
Debtors expired on June 30, 2004.

Mr. Zanic tells Judge Fitzgerald that pending the occurrence of
the Effective Date, the Debtors require a reliable source of
financing for their business operations.  The Debtors have
determined that extending the DIP Financing Agreement is the most
practical and cost-effective way to meet this ongoing need for
credit.

Accordingly, the parties have agreed to extend the Date of
Termination under the DIP Financing Agreement to
December 31, 2004, unless the DIP Financing Agreement is earlier
terminated due to the occurrence of an Event of Default.  No
additional consideration will be paid to Halliburton or HESI for
the extension, and the terms and conditions applicable to
extensions of credit will remain unchanged.

The Debtors believe that this brief extension of the DIP
Financing Agreement should be sufficient to permit them to bring
their Chapter 11 cases to an orderly conclusion by ensuring
adequate financing for their continued operations through the
Effective Date of the Plan.

While Halliburton and HESI have voluntarily continued to extend
loans and other financial accommodations to them, the Debtors deem
it best to confirm the terms and conditions applicable to the
continuing extensions of credit by obtaining the Court's authority
for a formal extension of the DIP Financing Agreement.

Thus, the Debtors seek the Court's authority to extend the term of
the DIP Financing Agreement to December 31, 2004.

The Court will convene a hearing to consider the Debtors' request
on September 21, 2004 at 9:00 a.m.  Objections to the extension of
the DIP Financing Agreement must be filed by September 2.

Headquartered in Houston, Texas, Kellogg, Brown & Root is engaged
in the engineering and construction business, providing a wide
range of services to energy and industrial customers and
government entities in over 100 countries.  DII has no business
operations.  The Company filed for chapter 11 protection on
December 16, 2003 (Bankr. W.D. Pa. Case No. 02-12152). Jeffrey N.
Rich, Esq., Michael G. Zanic, Esq., and Eric T. Moser, Esq., at
Kirkpatrick & Lockhart LLP, represent the Debtors in their
restructuring efforts.  (DII & KBR Bankruptcy News, Issue No. 18;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


DLJ COMMERCIAL: Fitch Affirms Low-B Ratings on Six Classes
----------------------------------------------------------
Fitch Ratings upgrades DLJ Commercial Mortgage Corp.'s commercial
mortgage pass through certificates, series 1998-CF2 as follows:

   -- $55.4 million class A-2 to 'AAA' from 'AA';
   -- $60.9 million class A-3 to 'A+' from 'A';
   -- $13.8 million class A-4 to 'A' from 'A-'.

Fitch affirms and removes the following classes from Rating Watch
Negative:

   -- $22.2 million class B-5 'B'; and
   -- $13.8 million class B-6 'B-'.

Fitch also affirms these certificates:

   -- $86.2 million class A-1A 'AAA';
   -- $579.5 class A-1B 'AAA';
   -- Interest-only class S 'AAA';
   -- $41.5 million class B-1 'BBB';
   -- $16.6 million class B-2 'BBB-';
   -- $52.6 million class B-3 'BB';
   -- $11.1 million class B-4 'BB-';
   -- $22.2 million class B-5 'B';
   -- $13.8 million class B-6 'B-'.

Fitch does not rate the $16.8 million class C certificates.

The upgrades reflect the increased credit enhancement levels from
loan payoffs and amortization and the subordination levels of
deals with similar characteristics issued today.  The transaction
has paid down 12% since issuance to $970.5 million as of
August 2004 from $1.1 billion at issuance.  In addition, eight
loans (4.6%) are defeased.

ORIX Capital Markets, LLC, the master servicer, collected year-end
2003 operating statements for 90% of the pool by balance.  The
weighted average debt service coverage ratio -- DSCR -- for year-
end 2003 was 1.64 times (x).

Eight loans (0.76%), secured by convenience stores and gas
stations, are specially serviced and in foreclosure.  The loans
are cross-collateralized and cross-defaulted and expected to
result in losses.  At this time all losses are expected to be
absorbed by the most subordinate class C.

Fitch is also concerned about a high percentage of loans with a
DSCR less than 1.00x (10%).

The Chanin Building loan (7%) is currently on ORIX's watchlist.
The loan is current; however, litigation filed by the special
servicer due to ownership changes surrounding the death of a
principal resulted in legal fees causing interest shortfalls.  The
litigation has been settled and the fees (over $1 million) have
been passed through the trust.  According to ORIX, interest
shortfalls to classes B-5 and B-6 due to these fees are expected
to be repaid in six and 11 months, respectively.  Therefore, Fitch
is removing these classes from Rating Watch Negative.


ENRON CORP: Examiner Asks Court to Extend Term Beyond Emergence
---------------------------------------------------------------
Enron North America Corporation Examiner, Harrison J. Goldin, asks
the U.S. Bankruptcy Court for the Southern District of New York to
extend the powers and duties afforded to him pursuant to the Plan
through the post-Effective Date period until the earlier to occur
of:

   (a) a final order closing Enron's cases; or

   (b) a final order determining that his services are no longer
       needed because all or substantially all issues affecting
       ENA have been resolved and substantially all distributions
       to ENA creditors have been made.

Arthur Steinberg, Esq., at Kaye Scholer, LLP, in New York, notes
that although the confirmed Plan estimates that the Effective Date
would occur at around year-end, it now appears that the Effective
Date could be much earlier.  The Plan confirmation and the
occurrence of the Effective Date are significant milestones in
perhaps the most complicated and expensive Chapter 11 cases ever
filed.  However, as the Debtors recognized during the confirmation
hearing, "[t]he effective date, whether it were a year earlier or
whether it were not or whether it is six months from now, is not
going to determine what creditors get.  It is the date [the filed
and unliquidated] claims are whittled down to the amount that
people believe are the right amount so that final distributions
can be made and the interim partial distributions."  The Debtors
also made this observation during the status conference held on
April 1, 2004, wherein they acknowledge that no significant
distributions could be made to creditors until the Court resolves
the mega complaints, which is scheduled for trial in February
2007.  These statements highlight the single most important factor
weighing in favor of Mr. Goldin's request -- much still needs to
be done in these cases prior to meaningful distributions being
made to creditors, especially since substantial assets are still
being converted to cash and there remains $130 billion of filed
claims plus 4,000 to 7,000 of unliquidated claims.

                    ENA Examiner's Appointment

Mr. Steinberg notes that in the early phase of these cases, ENA
creditors sought the appointment of the ENA Examiner because they
believe that the Debtors and the Creditors Committee could not
adequately represent ENA's sole interest with respect to many
issues.  Among other duties, the ENA Examiner was appointed to be
a "watchdog" for the ENA Estates to ensure that ENA's assets and
liabilities were adequately preserved for the benefit of ENA
creditors.

The Creditors Committee's reaction to the watchdog role was that
the oversight function should be the Committee's role exclusively
and that the Committee could effectively discharge its fiduciary
responsibility on behalf of ENA even though:

   (i) a significant number of its members would end up being
       sued by the Debtors based on prepetition conduct;

  (ii) the overwhelming majority of its members hold a majority
       of their claim against Enron as contrasted to ENA; and

(iii) there were and continue to be a number of significant
       inter-Debtor issues that require resolution and the
       Creditors Committee could not adequately represent both
       sides of the dispute.

The Debtors' reaction to the ENA Examiner's watchdog role was
similar to that of the Creditors Committee.  The Debtors believed
that they could effectively discharge their fiduciary
responsibility on behalf of ENA without the need of any additional
oversight beyond that given by the Creditors
Committee.

Not surprisingly, after having "butted heads" with the ENA
Examiner on a number of issues and especially during the
negotiations over the global compromise, the Debtors and the
Creditors Committee want to return to an earlier status quo --
before the appointment of the ENA Examiner.

                 Should the ENA Examiner Remain?

Mr. Steinberg relates that the essential question for the Court is
whether a compelling reason exists to modify the status quo and
eliminate the oversight function now performed by the ENA Examiner
in a situation where:

   (i) inter-Debtor estate issues remain to be resolved;

  (ii) substantial asset and liability issues, which could
       meaningfully impact creditor distributions from both an
       amount and timing perspective, are yet to be resolved; and

(iii) by virtue of the Confirmed Plan, there is less judicial
       oversight as to the essentially liquidating ENA Estates.

As the Debtors acknowledged, the post-Effective Date period will
be critical; it will be the time when, inter alia:

   (a) all remaining important issues respecting assets and
       liabilities are negotiated, settled or otherwise resolved;

   (b) the allocation of sales and settlement proceeds, as well
       as overhead expenses, are determined; and

   (c) interim and final distributions are calculated and
       recalculated.

According to Mr. Steinberg, these tasks clearly implicate certain
of the ENA Examiner's original duties -- the "watchdog" component
on behalf of ENA creditors.  Mr. Steinberg contends that without
the continuation of the ENA Examiner, the post-Effective Date
governance structure contained in the Plan will suffer from the
same infirmity that existed when the ENA Examiner was first
appointed.  There will be no fiduciary acting with staff support
functioning solely on ENA's behalf.

Moreover, Mr. Steinberg asserts that given the magnitude of the
issues that remain to be resolved, the fact that those issues
profoundly affect the ENA estates and creditors, that the
remaining fiduciaries and professionals owe duties to all of the
Debtors' estates and creditors, and the reduced Court oversight be
virtue of the confirmed Plan, it is even more compelling than
before that ENA continue to have its existing fiduciary safeguard
and protect its interests during the post-Effective Date period.

Mr. Steinberg points out that the global compromise did reduce the
number of issues that caused dissension between ENA creditors, and
the Debtors and the Creditors Committees.  It did not, however,
resolve all the inter-estate issues that can and will arise post-
Effective Date.  The vulnerabilities and exposures that lie ahead
for ENA creditors include:

   (a) the appropriateness of settlements;

   (b) the allocation of sale and settlement proceeds among
       Debtor estates;

   (c) which claims are entitled to the benefit of subordination
       provisions in certain debentures and other instruments;

   (d) issues associated with post-confirmation allocation of
       expenses; and

   (e) implementation of the Distribution Model.

Furthermore, recent examples illustrate how the ENA Examiner's
role continues to protect the interests of the ENA Estates; they
involve events which occurred after the consensus respecting the
global compromise was reached.

Mr. Steinberg argues that continuing the role of the ENA Examiner
post-Effective Date will help ensure an orderly and less
contentious wind-down process; the ENA creditors will continue to
have a voice in these proceedings and the reassurance that a
fiduciary is looking out solely for their interests.

Mr. Steinberg reminds Judge Gonzalez that the ENA Examiner
provided considerable assistance in facilitating a Chapter 11 Plan
for ENA, as well as for all the Debtors.  It is self-evident that
the ENA Examiner's presence ameliorated considerably the
contentious and litigious atmosphere that was spiraling out of
control during the first few months of these cases.

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).  Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed.
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. 121;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ENVIRONMENTAL LAND: Asks to Use Cash Collateral to Pay Expenses
---------------------------------------------------------------
Environmental Land Technology, Ltd., asks the U.S. Bankruptcy
Court for the District of Columbia for authority to use its
secured creditors' cash collateral to pay postpetition operating
expenses.  The Debtor proposes to grant adequate protection to its
lenders for any diminution in the value of their collateral.

Before Environmental Land Technology sought chapter 11 protection,
certain creditors loaned and invested money in the Debtor.  Their
interests are secured by, among other things, the Debtors assets
and property including its real property.  The aggregate amount
loaned by the Creditors was $41,500,000.  Currently, the value of
the Collateral -- primarily certain real estate in Washington
County, Utah -- is about $70,000,000

The Debtor points out that the Creditors are oversecured because
the value of the Collateral well exceeds the amount of the
Creditors' claims.

If the Debtor is unable to use cash collateral, it would be forced
to liquidate, and that would cause the value of the assets to
decline sharply.  Allowing the Company to dip into the lenders'
Cash Collateral will avoid immediate and irreparable harm to the
estate.

Any claims of secured creditors arising from the use of Cash
Collateral will have priority under Sections 364(c)(1) and (2) of
the Bankruptcy Code over all administrative expenses.

As additional adequate protection, the Debtor wants to grant the
Creditors administrative expense priority claims with priority
over all other costs and expenses, junior only to a Carve-Out for:

   (i) expenses, disbursements and other charges, including fees
       and expenses of the professionals retained by the Debtor
       and any statutory committee of creditors appointed in
       this case, in an amount not to exceed $500,000;

  (ii) excess Expenditures comprised of fees, disbursements and
       other charges;

(iii) a carve-out of an additional $500,000 in the aggregate
       for professional fees, expenses, disbursements and other
       charges of the retained professionals and any appointed
       statutory committee of creditors; and

  (iv) the quarterly fees pursuant to 29 U.S.C. Section 1930 and
       any fees payable to the Clerk of the Bankruptcy Court.

The Debtor points out that it intends to preserve its collateral
through a successful reorganization of its business through a
sale.  The likely result, the Debtor says, will be the payment of
allowed claims in full.

Headquartered in Washington, District of Columbia, Environmental
Land Technology, Ltd. filed for chapter 11 protection (Bankr. D.C.
Case No. 04-00926) on June 8, 2004.  Donald A. Workman, Esq., at
Foley & Lardner, represents the Company in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it listed over $10 Million in estimated assets and over $50
Million in estimated liabilities.


EPIC DATA: Inks $1.3 Million P3-MMS Pact with Bell Helicopter
-------------------------------------------------------------
Bell Helicopter, a Textron Company and leading supplier of
military and commercial helicopters headquartered in Fort Worth,
Texas, selected Epic Data International Inc.'s (TSX:EKD) P3
Materials Management System (P3-MMS) to manage the movement of
parts throughout their manufacturing facilities.

This contract, valued at $1.3 million, will supply Bell Helicopter
with Epic Data's P3-MMS at Bell's 8 manufacturing plants
throughout the United States by the end of 2004.

P3-MMS will enable Bell Helicopter to reduce work-in-process
inventory by achieving greater accuracy in parts accountability
and visibility of materials movement throughout their
manufacturing supply chain.  This high level of visibility and
accuracy will be a result of the tracking system designed within
MMS.

This solution will include the MMS Advanced Authorization Server
that allows suppliers to log in and receive pre-authorization for
materials orders before they are shipped, provides advanced
shipment notifications and ensures that proper certification
documentation is included with deliveries.

"Bell Helicopter is pleased to add another Epic Data solution to
our shop floor.  We've been able to significantly improve
operations with Epic's data capture system.  Now, we're
anticipating even further results with the implementation of MMS",
stated Ronnie Branscome, Director, Logistics / Distribution at
Bell Helicopter.

"As a long time data-capture solution provider for Bell
Helicopter, we are delighted to see Bell Helicopter take the next
step to improving their manufacturing operations", said Peter
Murphy, President & CEO of Epic Data.

With nearly 30 years of data capture industry experience, Epic
Data's manufacturing customers include Bombardier, CAE,
Flextronics, General Dynamics Electric Boat, Komatsu, Lockheed
Martin Aerospace, Siemens, Volvo and many others.  Epic Data helps
manufacturing customers improve quality, reduce costs and increase
manufacturing velocity.

                          About P3-CME

P3-MMS is available as a stand-alone product or as part of Epic
Data's P3 Collaborative Manufacturing Execution Suite (P3-CME).
P3-CME creates a common, bottom-up view of information flow that
provides managers with the visibility needed to synchronize and
adjust production with real-time demands.  It provides complete
production process traceability and supports continuous
improvement efforts in mass customization, outsourcing and lean
manufacturing.

Designed specifically for discrete manufacturing operations, P3-
CME supports advanced auto-identification and capture, including
all standard barcode types, magnetic stripe and radio frequency
identification.

                     About Bell Helicopter

Bell Helicopter, a Textron Company, makes commercial and military
helicopters and tiltrotors (including the V-22 Osprey, which Bell
manufactures with Boeing).  Bell manufactures seven commercial
helicopter models. Military models include the venerable UH-1Y
"Huey," a utility helicopter, the AH-1Z Super Cobra, the Eagle Eye
unmanned Aerial Vehicle and the aforementioned V-22 Osprey
tiltrotor.  Bell also provides repair, maintenance overhaul
services.

              About Epic Data International Inc.

Epic Data has been a leader in automatic identification and data
capture solutions for almost 30 years.  Epic Data's solutions are
used by hundreds of leading manufacturers across the globe in
aerospace, automotive, high technology and heavy machinery
industries to increase productivity and accelerate continuous
improvement.  Epic Data's enterprise mobility solutions for
parking enforcement and route management increase productivity
while improving customer service and worker safety by connecting
mobile personnel to central offices in real time.  People and
technology make Epic Data the global leader in automated data
capture solutions for the extended enterprise.

At June 30, 2004, Epic Data's balance sheet shows a stockholders'
deficit of $54,614,000 compared to a deficit of $49,511,000 at
September 30, 2003.


FELCOR LODGING: S&P Junks $50 Million Convertible Preferred Stock
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC' rating to
FelCor Lodging Trust, Inc.'s planned $50 million add-on to the
$107 million series A cumulative convertible preferred stock.
These securities will be a draw down from the company's shelf
registration.  Proceeds will be used by FelCor Lodging L.P. (sole
general partner and owner of more than 95% of its partnership
interest is FelCor Lodging Trust) to redeem a portion of its 9.5%
senior notes due 2008.

At the same time, Standard & Poor's affirmed its ratings on FelCor
Lodging Trust and FelCor Lodging, L.P., including its 'B'
corporate credit ratings.  The outlook is stable.  Approximately
$1.9 billion in debt was outstanding on June 30, 2004.

The stable outlook reflects FelCor's sizable and good quality
hotel portfolio.  "Despite continuous asset sales, credit measures
are not expected to improve materially in the near term," said
Standard & Poor's credit analyst Sherry Cai.  "However, the
outlook incorporates the expectation that credit measures will
strengthen gradually as revenue growth continues in the lodging
industry in the coming periods."


FLEMING COMPANIES: Asks Court to Approve Local 205 Settlement Pact
------------------------------------------------------------------
The Confectionary, Tobacco Workers and Grain Millers Union, Local
205, represents certain former employees who were employed at the
bakery operations in Wisconsin of Fleming Companies, Inc., and its
debtor-affiliates.  Prior to the bankruptcy petition date, Fleming
and Local 205 entered into a Collective Bargaining Agreement,
dated May 1, 2001, terminating April 30, 2003.  The CBA
established the parties' rights and obligations with respect to
the terms of employment of 112 Former Employees.

Scotta E. McFarland, Esq., at Pachulski, Stang, Ziehl, Young,
Jones & Weintraub, PC, in Wilmington, Delaware, relates that the
Debtors sold the bakery facilities to C&S Wholesale Grocers, Inc.,
and C&S Acquisition, LLC.  Majority of the Former Employees became
C&S employees.

Local 205 filed one claim on behalf of the Former Employees.  The
Local 205 Claim is an administrative claim for $278,374, based on
an alleged breach of the CBA for failure to pay severance.  Two
Former Employees filed proofs of claim totaling $18,060:

    -- $350 administrative claim for unpaid vacation pay; and

    -- $17,710 priority claim for unpaid vacation pay and pension
       benefits.

The Debtors dispute the factual and legal bases of the Local 205
Claim.  The Debtors allege that no severance is due because the
Former Employees were offered employment by C&S.  Moreover, even
if severance is due, it must be allocated under non-priority
unsecured, priority and administrative claim classifications.
Local 205 disputes these positions.  However, the Debtors and
Local 205 have no dispute as to the Former Employee Claims.

To settle the Local 205 Claim and the Former Employee Claims, the
parties enter into a Settlement Agreement wherein:

    (a) the Debtors agree to pay $24,483 cash to Local 205 in
        full and complete satisfaction of the Administrative
        Portions and Priority Portions of the Local 205 Claim and
        Former Employee Claims.  Local 205 will determine the
        distribution of the settlement proceeds to the Former
        Employees;

    (b) the Debtors agree to allow a non-priority general
        unsecured claim for $267,717 as the General Unsecured
        Portions of the Local 205 Claim and Former Employee
        Claims; and

    (c) the Debtors and Local 205 agree to release each other
        from all claims and causes of action arising out of or
        related to the CBA.  However, Local 205 is not releasing
        any workers compensation claims or Civil Rights Claims.

Ms. McFarland tells the U.S. Bankruptcy Court for the District of
Delaware that the Settlement Agreement avoids further litigation
regarding, and fully resolves, the Settled Claims.

Pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure, the Debtors ask the Court to approve the Settlement
Agreement with Local 205.

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).  Judge Walrath confirmed Fleming's Third Amended Plan
on July 26, 2004, under which Core-Mark Holding Company, Inc.,
will emerge as a rehabilitated company and be owned by Fleming's
unsecured creditors.  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 their creditors, they listed
$4,220,500,000 in assets and $3,547,900,000 in liabilities.
(Fleming Bankruptcy News, Issue No. 42; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


FRESH CHOICE: Committee Signs-Up SulmeyerKupetz as Counsel
----------------------------------------------------------
The Official Unsecured Creditors Committee appointed in Fresh
Choice, Inc.'s chapter 11 case, seeks authority from the U.S.
Bankruptcy Court for the Northern District of California to hire
SulmeyerKupetz as its bankruptcy counsel.

The Committee selected SulmeyerKupetz because the firm's attorneys
are skilled counsel in bankruptcy and insolvency proceedings and
have special knowledge that will enable them to perform services
of particular benefit to the Committee.

Specifically, SulmeyerKupetz will:

    a) give the Committee legal advice with respect to its
       powers and duties;

    b) give the Committee advice regarding the administration of
       the Debtor's estate;

    c) give legal advice concerning the Committee's
       investigation of the acts, conduct, assets and
       liabilities, and financial condition of the Debtor;

    d) give legal advice relating to bankruptcy, commercial and
       corporate law issues arising in connection with this
       bankruptcy case;

    e) give legal advice concerning the operation of the
       Debtor's businesses and the desirability and probability
       of continuing and/or modifying such businesses;

    f) give legal advice to the Committee with respect to all
       matters relating to any proposed disposition of assets or
       any plan of reorganization, including negotiation of a
       plan and possible formulation and proposal of a plan;

    g) assist the Committee in its negotiations with the Debtor
       and creditors concerning matters in this case, including
       the terms of any proposed plan;

    h) assist the Committee in making reports to creditors
       holding unsecured claims regarding the progress of this
       case;

    i) give legal advice to the Committee with respect to
       applications for relief sought by the Debtor and other
       parties in interest;

    j) appear on behalf of the Committee to support its position
       on various matters in this case and any contested matters
       or adversary proceedings filed therein, including the
       preparation of all necessary applications, motions,
       answers, complaints, orders, reports and other legal
       papers and participation in discovery and other
       litigation activity where necessary or appropriate to
       protect the interests of the unsecured creditors;

    k) give legal advice regarding any possible merger,
       acquisition or other transaction involving the Debtor;

    l) coordinate with other professionals retained by the
       Committee with respect to those matters that require
       legal and economic, business, market or other related
       expertise; and

    m) perform all other appropriate legal services for the
       Committee.

The attorneys at SulmeyerKupetz and their current hourly rates
are:

                Attorneys              Hourly Rates
                ---------              ------------
                Abrams, Janis G.           $375
                Alliotts, Christoper        375
                Baumann, Richard G.         500
                Davis, Jay R.               400
                Ehrenberg, Howard M.        495
                Gordon, Ronald E.           500
                Horoupian, Mark S.          400
                Kupetz, Arnold L.           575
                Kupetz, David S.            495
                Lev, Dan A.                 425
                Madris, Howard N.           395
                Miller, Elissa D.           400
                Pomerance, Jeffrey M.       400
                Rallis, Dean G.             450
                Sahn, Victor A.             495
                Saperstein, Israel          425
                Shaham, Yaron               250
                Simons, Larry D.            325
                Stanfield, Diane C.         400
                Sulmeyer, Irving            600
                Tippie, Alan G.             495
                Tompkins, Marcus A.         275
                Waines, Steve R.            450
                Walden, Leslie A.           325
                Zerunyan, Frank V.          375
                Kennedy, Robert G.          160

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

Headquartered in Morgan Hill, California, Fresh Choice --
http://www.freshchoice.com/-- owns and operates a chain of more
than 40 salad bar eateries, mostly located in California.  The
company filed for chapter 11 protection on July 12, 2004 (Bankr.
N.D. Calif. Case No. 04-54318).  Debra I. Grassgreen, Esq., at
Pachulski, Stang, Ziehl, Young, Jones & Weintraub represents the
Debtor in its restructuring efforts.  When the Debtor filed for
protection it listed $29,651,000 in total assets and $14,348,000
in total debts.


GALEY & LORD: Files Voluntary Chapter 11 Petition in N.D. Georgia
-----------------------------------------------------------------
Seeking to move forward with its efforts to be acquired,
Galey & Lord, a leading global supplier of denim, khaki and
corduroy fabrics for the fashion apparel and uniform markets,
filed a voluntary Chapter 11 petition in the U.S. Bankruptcy Court
for the Northern District of Georgia.

The company has entered into a definitive asset purchase agreement
with Patriarch Partners, LLC, whose funds have $4 billion under
management, to acquire the company pursuant to section 363 of the
U.S. Bankruptcy Code.  The agreement amends the proposal Patriarch
made last month, the terms of which were not disclosed.

Galey & Lord has secured an $80 million postpetition financing
agreement with GE Capital, which will enable the company to
continue normal business operations, including providing wages and
benefits to employees, maintaining bank accounts and cash
management systems, and meeting new obligations to customers,
suppliers and others.  The company is seeking expedited Bankruptcy
Court approval of the financing agreement.

Under the terms of the Patriarch agreement, which is subject to
Bankruptcy Court approval and other acquisition offers, if any,
Patriarch would pay $45 million for the company's term debt and
pay off, replace or assume up to $85 million in other secured debt
plus the outstanding letters of credit.  Patriarch also would
assume up to $58 million in trade, utility, tax, and employee pay
and benefit obligations.  The agreement excludes certain legacy
liabilities such as those obligations insured by the federal
Pension Benefit Guarantee Corporation.  The transaction is
expected to close by early November 2004.

In July, Galey & Lord's board agreed to an out-of-court
acquisition offer by Patriarch.  The proposal did not win the
unanimous approval of the term lenders required for the
acquisition to go forward.

"Our board of directors and many of our lenders have concluded
that an acquisition by Patriarch presents the greatest opportunity
to secure a bright future for Galey & Lord and is in the best
interests of our customers, employees, vendors, suppliers and
stakeholders," said John J. Heldrich, president & CEO of Galey &
Lord.  "While we are disappointed that our lenders were unable to
reach unanimous agreement to proceed with the original plan, we
are confident that this course will allow us to continue on a
positive track and give us the means of achieving our long-term
goals.

"As this process unfolds, we will continue to work to preserve
jobs, protect value and provide the highest level of service to
our customers," he added.  "We expect business to continue as
usual, with little, if any, impact on our employees, partners or
business operations.  Patriarch believes in these same responsible
business practices.

"In modifying its proposal for bankruptcy court consideration,
Patriarch has reiterated its commitment to working with management
to help this company achieve stability and provide the resources
necessary for us to achieve long-term success," he continued.
"Patriarch is a highly-regarded investor with a long track record
of working with companies in our industry.  We are grateful for
its staunch support and are committed to an open, fair and
expedited sale process that benefits all of our stakeholders."

The company has retained Dechert LLP and Alston & Bird as
bankruptcy counsel and Houlihan Lokey Howard & Zukin as investment
banking advisors.

Galey & Lord, Inc., which is privately held following its
emergence from bankruptcy protection in March of 2004, operates
domestically and in Canada under two divisions, Swift Denim and
Galey & Lord Apparel, and internationally through joint ventures
in Europe, North Africa, Asia and Mexico.  Its customers include:
VF, Gap, Old Navy, Banana Republic, Polo Ralph Lauren, Abercrombie
& Fitch, Levi's, Tommy Hilfiger, L.L. Bean, Nautica, Eddie Bauer,
Liz Claiborne, Haggar, Land's End, and Tropical Sportswear /
Savane, among others.

Galey & Lord Apparel is a leading producer of innovative woven
sportswear fabrics as a result of its expertise in sophisticated
fabric finishing and close design partnerships with its customers.
Swift Denim is a leading producer of differentiated and value-
added denim products supplying top designers and retailers around
the world.  Galey & Lord and its joint venture interests operate
in the U.S., Canada, Mexico, Asia, Europe and North Africa.

Headquartered in Atlanta, Ga., Galey & Lord manufactures textiles
for sportswear, including denim, cotton casuals, and corduroy.
It operates domestically and in Canada under two divisions, Swift
Denim and Galey & Lord Apparel, and internationally through joint
ventures in Europe, North Africa, Asia and Mexico.  The Debtors
filed for chapter 11 protection on February 19, 2002.  On February
9, 2004, the Bankruptcy Court confirmed its Plan of Reorganization
allowing the company to emerge from bankruptcy protection in March
2004.  The Debtors filed its second voluntary chapter 11 petition
on August 19, 2004.  Joel H. Levitin, Esq., Henry P. Baer, Jr.,
Esq., and Anna C. Palazzolo, Esq., at Dechert, LLP, represent the
Debtors.  When the Company filed for protection from their
creditors, they listed $533,576,000 in total assets and
$438,035,000 in total debts.


GALEY & LORD INC: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: Galey & Lord, Inc.
             Five Concourse Parkway, Suite 2300
             Atlanta, Georgia 30328-5350

Bankruptcy Case No.: 04-43098

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      Galey & Lord Industries, Inc.              04-43097
      Galey & Lord Properties, Inc.              04-43099
      Swift Textiles, Inc.                       04-43100
      Society Hill Finishing LLC                 04-43101
      McDowell Weaving LLC                       04-43102
      Greensboro Textile Administration LLC      04-43103
      Swift Denim Properties, Inc.               04-43104
      Flint Spinning LLC                         04-43105
      Brighton Weaving LLC                       04-43106

Type of Business: The Debtor manufactures textiles for sportswear,
                  including denim, cotton casuals, and corduroy.
                  It operates domestically and in Canada under two
                  divisions,  Swift Denim and Galey & Lord
                  Apparel, and internationally through joint
                  ventures in Europe, North Africa, Asia and
                  Mexico.

Chapter 11 Petition Date: August 19, 2004

Court: Northern District of Georgia (Rome)

Judge: Mary Grace Diehl

Debtors' Counsels: Jason H. Watson, Esq.
                   John C. Weitnauer, Esq.
                   Alston & Bird LLP
                   One Atlantic Center
                   1201 West Peachtree Street
                   Atlanta, GA 30309-3424
                   Tel: 404-881-4796
                   Fax: 404-881-7777

                         -- and --

                   Joel H. Levitin, Esq.
                   Dechert LLP
                   30 Rockefeller Plaza
                   New York, NY 10112
                   Tel: 212-698-3500

Total Assets as of December 27, 2003: $533,576,000

Total Debts as of December 27, 2003:  $438,035,000

Debtor's 20 Largest Unsecured Creditors:

Entity                                 Claim Amount
------                                 ------------
Parkdale Mills, Inc.                     $4,794,955
P.O. Box 75077
Charlotte, NC 28275

Greenwood Mills                            $368,309
P.O. Box 930945
Atlanta, GA 31193-0945

Invista S.A.R.L.                           $343,556
P.O. Box 905430
Charlotte, NC 28290-5430

Daikin America, Inc.                       $264,480
P.O. Box 7777 W0502020
Philadelphia, PA 19175-2020

Ramtex, Inc.                               $250,708
P.O. Box 307
Ramseur, NC 27316

Ernst & Young LLP                          $220,149

Montgomery Industries                      $149,911

Chemtrade Performance Chemicals US LLC     $116,092

Wellstone Mills, Inc.                      $110,530

Staple Cotton Cooperative                  $109,765

Cognis Corporation                          $86,209

Omnova Solutions Inc.                       $78,643

Nano-Tex, LLC                               $76,626

Genesis Consulting Company, LLC             $75,501

Dystar LP                                   $62,114

Terminal Trucking Company Inc.              $59,538

Sunbelt Corporation                         $57,645

Stroock & Stroock & Lavan                   $52,966

Fenn-Vac, Inc.                              $49,379

GTP Greenville, Inc.                        $46,583


GLIMCHER REALTY: Moody's Lowers Preferred Stock Rating to B1
------------------------------------------------------------
Moody's Investors Service lowered the ratings of Glimcher Realty
Trust (preferred stock to B1) after completing its review
following the resignation of PricewaterhouseCoopers LLP,
Glimcher's auditors, on June 1, 2004.  The REIT's rating outlook
is stable.

Moody's stated that the downgrade reflects Glimcher's continuing
deterioration in credit metrics, particularly increased leverage
and reduced fixed charge coverage.  In addition, Moody's is
concerned about management controls at the REIT, as well as the
fact that the new accounting firm, BDO Seidman, will not have the
opportunity to fully review Glimcher's financial reports and
procedures until the new auditors have completed the year-end 2004
audit and released these financials in March 2005.

Moody's cites Glimcher's credit metrics, which have been
continuously deteriorating for a few quarters.  Its effective
leverage grew from 62% of gross assets in 2002 to 66% in 2003 and
69% at the end of 2Q04.  This statistic makes Glimcher the highest
leveraged REIT among its peer group.  Glimcher has a low fixed
charge coverage at 1.53x (including amortization and capitalized
interest).  Secured debt has also been rising, from 56% of gross
assets in 2002 to 60% at 2Q04.

Offsetting these negative factors are Glimcher's success in:

   (1) eliminating all of its joint ventures;

   (2) divesting the remainder of its shopping center portfolio
       with its announced sale of 25 centers;

   (3) maintaining a laddered debt maturity schedule, and reducing
       its variable rate debt exposure to 15% of total debt from
       46% in 2000.

A rating upgrade would be conditioned on BDO Seidman completing
the Sarbanes-Oxley 404 procedures and its full annual audit
without discovering any errors or omissions, Glimcher increasing
its fixed charge coverage closer to the 1.9x range, reducing
effective leverage below 60%, and decreasing secured leverage
below 50%.  The rating could be further downgraded if any
restatements are required as a result of the completion of BDO
Seidman's 404 review or audit, and upon additional deterioration
in the fixed charge coverage below 1.5x, increases in effective
leverage above 70% of gross assets, and a rise in secured debt
above 65% of gross assets.

These securities have been downgraded:

   * Glimcher Realty Trust -- Series F and G Cumulative Redeemable
     Preferred Stock to B1, from Ba3.

Glimcher Realty Trust [NYSE:GRT], headquartered in Columbus, Ohio,
USA is a fully integrated, self-administered and self-managed real
estate investment trust that owns, manages, acquires and develops
enclosed regional and super-regional malls and community shopping
centers.  Glimcher owns and operates 67 properties located in 22
states throughout the Midwestern and Eastern USA.  Glimcher Realty
Trust had assets of $2.0 billion and equity of $531 million at
June 30, 2004.


GLOBAL CROSSING: Summary of New Jersey Class Action Lawsuit
-----------------------------------------------------------
On April 27, 2004, Global Crossing, Ltd., announced that it is
conducting a review of its previously reported financial
statements for the years ended December 31, 2003 and 2002,
including their interim periods.  In the course of preparing the
Company's financial statements for the first quarter of 2004, the
Global Crossing management became concerned with the adequacy of
the company's accrued cost of access liability.  Global Crossing
said that it plans to restate results for 2003 because it
understated costs by at least $50 million to $80 million.  Global
Crossing, which is reviewing accounting for 2003 and 2002, said
expenses for using other carriers' networks, known as cost of
access liabilities and cost of access expenses, were a combined
$2.1 billion in 2003.  Global Crossing also said that its
previously reported results for 2002 and 2003, and its 2004
forecasts should be disregarded pending the outcome of its review.
Global Crossing said that it is assessing the internal control of
issues presented and, in light of the expected restatement,
currently believes that these issues constitute a material
weakness in its internal controls.  The company is undertaking
steps to address the internal control issues.

The market's reaction to Global Crossing's disclosures was swift
and severe.  Following the disclosures, shares tumbled in the
Nasdaq Stock market composite trading.  Shares of Global Crossing
have dropped 62% since the company emerged from bankruptcy on
December 10, 2003.

During the period from January 22, 2004 through April 26, 2004,
Harold Silverstein purchased common stock of Global Crossing,
Ltd.

Lodewijk Christian Van Wachen, Peter Seah Lim Huat, and John
Legere were Global Crossing's principal officers who controlled
the company and its public disclosures.  Because of Messrs. Van
Wachen, Lim Huat and Legere's positions with the company, they had
access to the adverse undisclosed information about its business,
operations, products, operational trends, financial statements,
markets, and present and future business prospects via access to
internal corporate documents, conversations and connections with
other corporate officers and employees, attendance at management
and Board of Directors meetings and committees, and via reports
and other information provided to them.

Mr. Silverstein alleges that Messrs. Van Wachen, Lim Huat and
Legere each made false and misleading statements and failed to
disclose material adverse information concerning Global Crossing
during the Class Period.  Thus, Messrs. Van Wachen, Lim Huat and
Legere are each liable as a participant in a wrongful scheme and
course of business that operated as a fraud or deceit on those who
purchased or acquired Global Crossing common stock by
disseminating materially false and misleading statements or
concealing material adverse facts.  The scheme deceived the
investing public regarding Global Crossing's business and
operations and the intrinsic value of the company's common stock
and caused the members of the Class to purchase Global Crossing
common stock at artificially inflated prices.

More specifically, Messrs. Van Wachen, Lim Huat and Legere failed
to disclose that:

   (a) Global Crossing understated between $50 million to $80
       million of accrued cost of access liability at year end
       2003;

   (b) Global Crossing had inadequate internal controls; and

   (c) Global Crossing's financial results were materially
       inflated at all relevant times.

Therefore, Mr. Silverstein asks the U.S. District Court for the
District of New Jersey to declare his action against Global
Crossing and Messrs. Van Wachen, Lim Huat and Legere as a proper
class action and to deem him class representative under Rule 23 of
the Federal Rules of Civil Procedure.

Mr. Silverstein states that the members of the Class are dispersed
throughout the United States and are so numerous that joinder of
all Class members is impracticable.  Mr. Silverstein's claims are
typical of the claims asserted by the Class members who are
similarly affected by Global Crossing's actionable conduct in
violation of federal law.  Mr. Silverstein assures the New Jersey
District Court that he will fairly and adequately protect the
interests of the Class and that he has retained counsel competent
and experienced in class action litigation.  Mr. Silverstein
attests that he has no interests in conflict with the Class whom
he wishes to represent.

A class action is superior to other available methods for the fair
and efficient adjudication of the asserted claims.  Furthermore,
because the damages suffered by individual members of the Class
may be relatively small, the expense and burden of individual
litigation make it virtually impossible for class members to
redress the wrongs done to them.  The likelihood of individual
class members prosecuting separate claims is remote.

The questions of law and fact common to the Class members
predominate over any questions affecting individual members of the
Class.  Among the questions of law and fact common to the Class
are:

   (a) Whether the federal securities laws were violated by
       Global Crossing's alleged acts and omissions;

   (b) Whether Global Crossing's Class Period public statements
       and filings misrepresented and omitted material facts;

   (c) Whether Global Crossing acted with knowledge or with
       reckless disregard for the truth in misrepresenting and
       omitting material facts;

   (d) Whether Global Crossing participated in and pursued the
       common course of conduct complained;

   (e) Whether the market price of Global Crossing securities was
       inflated artificially as a result of Global Crossing's
       material misrepresentations and omissions during the Class
       Period; and

   (f) To what extent the members of the Class have sustained
       damages and the proper measure of damages.

Mr. Silverstein also asks the New Jersey District Court to award
compensatory damages, including interest, in his favor and that of
the other Class members against Global Crossing and Messrs. Van
Wachen, Lim Huat and Legere resulting from their wrongdoing.
He further asks the New Jersey District Court to award him and the
Class of reasonable costs and expenses incurred in the action,
including counsel fees, expert fees, and other disbursements.

Headquartered in Florham Park, New Jersey, Global Crossing Ltd.
-- http://www.globalcrossing.com/-- provides telecommunications
solutions over the world's first integrated global IP-based
network, which reaches 27 countries and more than 200 major cities
around the globe. Global Crossing serves many of the world's
largest corporations, providing a full range of managed data and
voice products and services.  The Company filed for chapter 11
protection on January 28, 2002 (Bankr. S.D.N.Y. Case No. 02-
40188).  When the Debtors filed for protection from their
creditors, they listed $25,511,000,000 in total assets and
$15,467,000,000 in total debts.  Global Crossing emerged from
chapter 11 on Dec. 9, 2003. (Global Crossing Bankruptcy News,
Issue No. 63; Bankruptcy Creditors' Service, Inc., 215/945-7000)


GLOBALNET INT'L: Seeks Open-Ended Lease Decision Period
-------------------------------------------------------
Globalnet International, LLC, asks the U.S. Bankruptcy Court for
the Southern District of New York to extend its time period to
determine whether to assume, assume and assign, or reject its
unexpired nonresidential real property leases.  The Debtor wants
an open-ended extension of the deadline imposed under 11 U.S.C.
Sec. 365(d)(4) through confirmation of a plan of reorganization.

Currently, the Debtor has three non-residential leases in
Illinois, Texas and Florida.  The Debtor assures the Court that it
is current on all postpetition rent under the Leases.

The Debtor states that the Leases are necessary for the
reorganization process.  The Debtor's operations center is located
in Texas while the financial staff is located in Illinois.

If the Debtor is forced to assume the Leases, the landlords will
have a very large administration claim in relation to the size of
the case in the event the Company defaults and breaches the
Leases.  The Debtor submits that granting a lease decision
extension will be in the best interest of the estates and the
creditors.

Headquartered in New York, New York, Globalstar Telecommunications
-- http://www.globalstar.com/-- provides global mobile and fixed
wireless voice and data services.  The Company filed for
chapter 11 protection on June 30, 2004 (Bankr. S.D.N.Y. Case No.
04-14480).  Robert R. Leinwand, Esq., at Robinson Brog Leinwand
Greene Genovese & Gluck P.C., represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection, it
did not disclose its assets but listed $1,823,799,468 in total
debts.


HI-RISE RECYCLING: Asks Nod to Hire Bruner-Cox as Accountants
-------------------------------------------------------------
Hi-Rise Recycling Companies, Inc., asks the U.S. Bankruptcy Court
for the Northern District of Ohio for permission to employ Bruner-
Cox LLP as its accountants, nunc pro tunc to August 10, 2004.

Bruner-Cox is expected to:

    a) provide accounting advice with respect to the Debtor's
       powers and duties as a debtor-in-possession in the
       continued operation of its business and the management of
       its property;

    b) review and analyze the Debtor's assets, liabilities and
       the operating and financial strategies of the Debtor;

    c) assist the Debtor in preparing the budgets and financial
       schedules as they may become necessary throughout this
       case;

    d) assist the Debtor in preparing for and filing one or more
       disclosure statements in accordance with Section 1125 of
       the Bankruptcy Code;

    e) assist the Debtor in preparing for and filing one or more
       plans of reorganization at the earliest possible date;

    f) perform any and all other accounting services for the
       Debtor in connection with this case;

    g) advise and attend hearings as necessary; and

    h) perform such accounting services as the Debtor may
       request with respect to any matter, including, but not
       limited to, valuation, employee benefits, debt
       restructuring, creditors' rights, tax planning, tax
       representation and audit matters.

The current hourly rates of the professionals expected to provide
services to the Debtor are:

            Professional           Hourly Rate
            ------------           -----------
            Ronald J. Manse           $185
            Steven O. Pittman          185
            Dane J. Mayle              152
            Staff Accountant           125

Headquartered in Wooster, Ohio, Hi-Rise Recycling manufactures and
distributes industrial recycling and waste handling equipment in
North America.  The company filed for chapter 11 protection on
August 16, 2004 (Bankr. N.D. Oh. Case No. 04-64352).  Lawrence E.
Oscar, Esq., and Warren Goldenberg, Esq., at Hahn Loeser & Parks
LLP, represent Hi-Rise.  When the Debtor filed for protection from
its creditors, it listed more than $1 million in estimated assets
and more than $10 million in estimated debts.


HOLLINGER INC: Retractable Shares Priced at $7.25 Per Share
-----------------------------------------------------------
Hollinger, Inc., (TSX: HLG.C) reported that the Retraction Price
of the retractable common shares of the Corporation as of
yesterday, August 19, 2004, is $7.25 per share.

Hollinger's principal asset is its approximately 68.0% voting and
18.2% equity interest in Hollinger International.  Hollinger
International is an international newspaper publisher with
English-language newspapers in the United States and Israel.  Its
assets include the Chicago Sun-Times and a large number of
community newspapers in the Chicago area, The Jerusalem Post and
The International Jerusalem Post in Israel, a portfolio of new
media investments and a variety of other assets.

                         *     *     *

As reported in the Troubled Company Reporter on August 16, 2004
Hollinger's 2003 annual financial statements cannot be completed
and audited until Hollinger International's 2003 annual financial
statements are completed.  Hollinger International has advised
Hollinger that it believes that it needs to review the final
report of the Special Committee established by Hollinger
International before it can complete its 2003 annual financial
statements.  Hollinger understands that the work of the Special
Committee is ongoing and its final report has not yet been issued.

As a result of the delay in the completion and audit of its annual
financial statements for the year ended December 31, 2003,
Hollinger will not be in a position to file its second quarter
interim financial statements (and related interim Management's
Discussion & Analysis) for the six month period ended June 30,
2004 by the required filing date under applicable Canadian
securities laws.

As a result of the delay in the filing of Hollinger's 2003 Form
20-F (which would include its 2003 audited annual financial
statements) with the United States Securities and Exchange
Commission by June 30, 2004, Hollinger is not in compliance with
its obligation to deliver to relevant parties its filings under
the indenture governing its senior secured notes due 2011.
US$78 million principal amount of Notes are outstanding under the
Indenture.  On July 16, 2004, Hollinger received a notice of
default from the trustee under the Indenture dated July 8, 2004
notifying Hollinger of its failure to file and deliver its 2003
Form 20-F in accordance with the terms of the Indenture and
indicating that if the default continued unremedied for a period
30 days after receipt of the notice (being on or about August 15,
2004), an event of default would occur under the Indenture.

As a result of the delay in the completion and audit of its 2003
annual financial statements, Hollinger was not in a position to
file and deliver its 2003 Form 20-F yesterday, August 15, 2004.
As a result, an event of default occurred under the Indenture and
the trustee under the Indenture or the holders of at least 25
percent of the outstanding principal amount of the Notes will then
have the right to accelerate the maturity of the Notes.  Hollinger
is actively exploring alternatives with a number of parties in
connection with modifying the terms of, or refinancing, the Notes
in order that Hollinger's debt obligations reflect the company's
current circumstances and the improved security available to
noteholders since the original issue date in March 2003.


HOLLINGER INT'L: Ink Pact to Sell Telegraph Group for $1.21BB
-------------------------------------------------------------
Hollinger International, Inc., discloses that during the second
quarter of 2004, it entered into a definitive agreement to sell
the assets of its U.K. Newspaper Group, the Telegraph Group, to
Press Acquisitions Limited -- PAL.  This Group includes the Daily
Telegraph, the Sunday Telegraph and The Spectator.

The transaction closed on July 30, 2004 with a purchase price of
approximately $1.21 billion based on an exchange rate of US$1.8196
to (pound).  As a result, the Company may classify the results of
the U.K. operations as discontinued operations commencing with the
reporting of its June 30, 2004 results of operations and restate
prior periods similarly.

The disclosure was part of an update made pursuant to Ontario
Securities Commission Policy 57-603 Defaults by Reporting Issuers
in Complying with Financial Statement Filing Requirements.

Certain management and other insiders of the Company are currently
subject to a cease trade order in respect of securities of the
Company issued by the Securities Commission on June 1, 2004.  The
cease trade order results from the delay in filing the Company's
annual financial statements for the year ended December 31, 2003,
its interim financial statements for the three months ended
March 31, 2004 and its Annual Information Form -- AIF - by the
required filing dates.  The cease trade order will remain in place
until two business days following receipt by the Securities
Commission of all filings that the Company is required to make
pursuant to Ontario securities laws.

On July 20, 2004, the Company did not anticipate that it would be
in a position to file its interim financial statements for the
six-month period ended June 30, 2004 by the filing date required
by applicable Canadian securities legislation, since it was not
expected that the final report of the Special Committee would be
available sufficiently in advance of that time.  The Company
confirms that those interim financial statements have not been so
filed.

The Company believes that it needs to review the final report of
the Special Committee established by the Company before it can
complete and file the financial statements and the AIF in
question.  The work of the Special Committee is ongoing and its
final report has not yet been issued.  The Company will continue
to provide bi-weekly updates, as contemplated by the OSC Policy,
until the financial statements and AIF have been filed.

Hollinger International, Inc., owns English-language newspapers in
the United States, United Kingdom, and Israel. Its assets include
The Telegraph Group Limited in Britain, the Chicago Sun- Times,
the Jerusalem Post, a large number of community newspapers in the
Chicago area, a portfolio of new media investments, and a variety
of other assets.


HOLLINGER INT'L: Updates Commission as Financial Reports Not Ready
------------------------------------------------------------------
Hollinger International, Inc., provided an update in accordance
with Ontario Securities Commission Policy 57-603 Defaults by
Reporting Issuers in Complying with Financial Statement Filing
Requirements.

Certain management and other insiders of the Company are currently
subject to a cease trade order in respect of securities of the
Company issued by the Securities Commission on June 1, 2004.  The
cease trade order results from the delay in filing the Company's
annual financial statements for the year ended December 31, 2003,
its interim financial statements for the three months ended
March 31, 2004 and its Annual Information Form -- AIF - by the
required filing dates.  The cease trade order will remain in place
until two business days following receipt by the Securities
Commission of all filings that the Company is required to make
pursuant to Ontario securities laws.

On July 20, 2004, the Company did not anticipate that it would be
in a position to file its interim financial statements for the
six-month period ended June 30, 2004 by the filing date required
by applicable Canadian securities legislation, since it was not
expected that the final report of the Special Committee would be
available sufficiently in advance of that time.  The Company
confirms that those interim financial statements have not been so
filed.

The Company believes that it needs to review the final report of
the Special Committee established by the Company before it can
complete and file the financial statements and the AIF in
question.  The work of the Special Committee is ongoing and its
final report has not yet been issued.  The Company will continue
to provide bi-weekly updates, as contemplated by the OSC Policy,
until the financial statements and AIF have been filed.

On August 11, 2004, The Honourable Justice Farley of the Ontario
Superior Court of Justice dismissed a motion by Ravelston
Corporation Limited and Ravelston Management, Inc., for an anti-
suit injunction seeking to restrain the Company and certain of its
affiliates from bringing or initiating any claim related to the
management of the Hollinger group of companies in any jurisdiction
outside Ontario.  Ravelston's counterclaim in the Ontario Courts,
which seeks payment of management fees allegedly owed by the
Company, was stayed on a temporary basis pending final disposition
of the Illinois and Delaware court proceedings involving
Ravelston, Conrad Black, the Hollinger group and others.  A Notice
of Appeal seeking to have the order staying this counterclaim set
aside has been served.

The Company's results of operations, as reflected in its earnings
statements for the second quarter of 2004, are expected to be
significantly different from the second quarter of 2003 as a
result of, among other things, the issues noted.  Any expected
results noted for the second quarter of 2004 are not final and are
subject to revisions prior to the filing of the Company's interim
financial statements:

      (i) Costs of approximately $7.0 million were incurred in the
          second quarter of 2004 consisting of legal fees and
          other costs associated with the Special Committee's
          investigation.  No such charges were incurred in the
          comparable period in 2003.

     (ii) Net foreign currency gains of $30.6 million were
          recognized in the second quarter of 2003, reflecting
          principally a strengthening of the Canadian dollar
          against the US dollar during that period.  During the
          second quarter of 2004, the Canadian dollar weakened,
          which may give rise to a foreign currency loss, which
          has not yet been quantified.

    (iii) During the second quarter of 2004, the average and
          period-end rates of exchange for foreign currencies and
          US dollars changed substantially from the prior year.
          As a significant portion of the Company's operations are
          undertaken in foreign currencies, in particular in
          pounds sterling and Canadian dollars, individual
          categories of revenues and expenses will reflect the
          significant changes in foreign exchange rates.

     (iv) The Company expects that restatements and other charges
          and adjustments may result from the conclusion of the
          Special Committee's investigation.  Since the Special
          Committee's investigation is still ongoing, the nature,
          timing and amount of any restatements and other charges
          and adjustments cannot be determined at this time.

      (v) During the Company's second fiscal quarter of 2004, the
          Company exercised its option to sell its interest in a
          real estate joint venture established for the
          development of the site upon which the Chicago Sun-Times
          headquarters are located.  The expected cash proceeds of
          the transaction are $73.0 million.  Of the total
          proceeds, $4.0 million has been received, with the
          balance to be received on closing, generating an
          estimated pre-tax gain of approximately $37.5 million.
          The closing is expected to take place during October
          2004.

     (vi) In June of 2004, the Company's Audit Committee of the
          Board of Directors initiated an internal review into
          practices that have resulted in the overstatement of
          circulation figures at the Chicago Sun-Times over the
          past several years.  The financial impact of the
          overstatement, if any, has not been quantified pending
          completion of the review.

    (vii) In June of 2004, the Company issued a tender offer and
          consent solicitation to retire all of its subsidiary's,
          Hollinger International Publishing Inc., 9% Senior Notes
          due 2010.  The Company amended this offer in July of
          2004. The offer expired on July 30, 2004.  Approximately
          97% of the outstanding Senior Notes were tendered for
          retirement.  The estimated cost of the early retirement
          of the Senior Notes is approximately $50.8 million,
          consisting of a premium for early retirement and related
          fees, and is expected to be incurred during the third
          quarter of 2004.

   (viii) Subsequent to the close of the Company's second fiscal
          quarter in 2004, and concurrent with the closing of the
          above transaction with PAL, the Company repaid, in full,
          all amounts outstanding under its Senior Credit Facility
          and terminated all derivatives related to that facility.
          The Company expects to incur charges in the third fiscal
          quarter of approximately $2.1 million for premiums and
          fees related to the early repayment of the facility and
          $1.0 million related to the early termination of the
          derivative contracts.

Hollinger International, Inc., owns English-language newspapers in
the United States, United Kingdom, and Israel. Its assets include
The Telegraph Group Limited in Britain, the Chicago Sun- Times,
the Jerusalem Post, a large number of community newspapers in the
Chicago area, a portfolio of new media investments, and a variety
of other assets.


INFOUSA: Prepays Additional $5 Million of Bank Debt
---------------------------------------------------
infoUSA(R) (Nasdaq:IUSA), the leading provider of proprietary
business and consumer databases and sales leads, prepaid
$5 million of principal debt obligation under its Revolving Credit
Facility in addition to the $5 million debt prepayment that was
announced on August 9, 2004.  Based on the company's strong
internal cash flow, infoUSA expects to be able to use the majority
of its free cash flow to pay down debt.

Vin Gupta, Chairman and CEO, infoUSA, commented, "In addition to
continued revenue growth and expense reduction, we anticipate that
this reduction in our leverage will better enable us to maximize
shareholder value."

                        About infoUSA

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

                        *     *     *

As reported in the Troubled Company Reporter on May 20, 2004,
Standard & Poor's Ratings Services assigned its 'BB' ratings and
recovery ratings of '4' to infoUSA Inc.'s $250 million of senior
secured credit facilities, indicating a marginal recovery
(25%-50%) of principal in the event of a default.

In addition, Standard & Poor's affirmed its 'BB' corporate
credit rating on the Omaha, Nebraska-headquartered company.  The
outlook is stable.

"The ratings on infoUSA, Inc., reflect the company's meaningful
pro forma debt levels, moderate-size operating cash flow base
and competitive market conditions, including competition from
companies that have greater financial resources," said
Standard  & Poor's credit analyst Donald Wong.  "These factors are
tempered  by infoUSA's historical operating cash flow margins in
the mid- to high-20% range, free operating cash flow generation,
strong niche market positions, a broad product and service
offering distributed through numerous channels to a diverse base
of  businesses, and a significant portion of sales derived from
existing or former customers."


INSIGHT HEALTH: S&P's B+ Credit Rating Still on Watch Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services' ratings on InSight Health
Services Corp., including the company's 'B+' corporate credit
rating, remain on CreditWatch with negative implications.
InSight remains on CreditWatch, despite its Aug. 13, 2004,
announcement that it has filed an application with the SEC to
withdraw the registration statement for its proposed initial
public offering of income deposit securities -- IDS -- and a
related public offering of senior subordinated notes (a statement
originally filed on June 23, 2004).

Although the IDS filing prompted the CreditWatch placement on
June 23, Standard & Poor's views the intention to use this
structure as evidence of an aggressive financial posture.  InSight
is retreating from the IDS issuance because current market
conditions for public offerings are unfavorable.

"We are concerned about the acquisitive and debt-burdened
company's exposure to heightened competition in the industry,
particularly in the mobile imaging segment, which represented
about 40% of its revenue for the nine months ended March 31,
2004," said Standard & Poor's credit analyst Cheryl Richer.
"Given the recent management changes, including the major
sponsor's appointment of a new chief executive officer, Standard &
Poor's will need to review management's business and financial
strategies before resolving the CreditWatch listing."

Lake Forest, California-based InSight provides diagnostic imaging
and information, treatment, and related management services
through a large network of 114 fixed-site facilities and 119
mobile facilities, located mainly in California, Arizona, New
England, the Carolinas, Florida, and the Mid-Atlantic states.  The
company is the operating subsidiary of InSight Health Services
Holdings Corp., which is privately owned.  The ratings assume no
additional financial support from sponsors J.W. Childs Associates
and Halifax Group PLC, but these entities are expected to
participate in growth and spending decisions.


INTELEFILM CORP: Making Initial Liquidation Payment on Aug. 31
--------------------------------------------------------------
iNTELEFILM Corporation (OTCBB:FILM) declared an initial
liquidation payment to shareholders of $0.32 per common share to
be paid on August 31, 2004.

The liquidation payment is being made pursuant to the plan of
liquidation that was confirmed on April 22, 2003 by the U.S.
Bankruptcy Court for the District of Minnesota, Case No. 02-32788.
The payment will be made to shareholders of record as of
April 30, 2003.

Share sales that have occurred after this date will result in
payment of the distribution to the buyer of the shares so long as
the buyer has properly notified the Company of the purchase
transaction.  This is the first of two liquidation payments called
for under the liquidation plan.  The timing of the second
liquidation payment is uncertain and will be made at the time when
management is confident that all corporate matters have properly
been resolved.  After this initial distribution, the Company's
remaining assets are approximately $500,000 in cash and a note
receivable with a remaining principal balance of $198,000.

Headquartered in Eden Prairie, Minnesotta, iNTELEFILM Corporation
(f/k/a Children's Broadcasting Corporation) provides products and
services designed to protect and leverage rich media assets,
images, audio, video-online.  The Company filed for chapter 11
protection on August 5, 2002 (Bankr. D. Minn. Case No. 02-32788).
Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman
represents the debtor in its chapter 11 case.  When the Company
filed for protection from their creditors, they listed $10,516,867
in total assets and $7,929,375 in total debts.


INTERPOOL INC: Discloses $41.2 Mil. Net Income in 2003
------------------------------------------------------
Interpool, Inc. (IPLI.PK) has filed its Annual Report on Form 10-K
for 2003 with the Securities and Exchange Commission.  The company
has now completed all of its filings for 2003 and is in the
process of preparing its filing for the first quarter of 2004.

In its 2003 Form 10-K, Interpool reported that, for the year ended
December 31, 2003, total revenues were $375.6 million compared to
$326.6 million for the year ended December 31, 2002.  Net income
was $41.2 million for 2003 compared with $4.4 million for 2002.
Net income for 2003 was affected unfavorably by $12.9 million in
after tax administrative costs associated with the investigation
by its audit committee and restatement of its earnings for years
prior to 2003.  A portion of these costs will continue in 2004. In
addition, net income for 2003 was affected positively by
$2.8 million resulting from favorable credit loss experience in
the off-balance sheet qualified special purpose entity related to
the company's container securitization financing facility which
was consolidated effective October 1, 2003.

Interpool also stated that its 2003 Form 10-K reflects positive
adjustments to net income of $0.9 million, $1.2 million and
$0.4 million for the quarters ended March 31, June 30 and
September 30, 2003, respectively.  These adjustments were
primarily the result of deficiencies in the processing and
accounting for repairs related to damaged equipment and in the
recognition of impairment on certain chassis.  These adjustments
were discovered by management as part of their preparation for the
2003 Form 10-K.  Interpool stated that it is addressing the
deficiencies that led to these adjustments by implementing
additional internal controls and hiring new personnel.

Martin Tuchman, Chairman and Chief Executive Officer, said, "Our
business continues to be strong, and we are making good progress
both from an operational and administrative perspective.  The
final 2003 results show that Interpool is a company with solid
fundamentals: strong revenues, significant cash flow from
operations, and, most importantly, continued customer demand for
our products and services.  We are in the process of preparing our
2004 SEC filings, and we look forward to keeping investors
apprised of our progress."

Interpool also reported in its Form 10-K that the company has
settled a lawsuit involving an insurance claim under policies
covering the 2001 lease default and subsequent bankruptcy of a
major South Korean customer.  The settlement is for a total cash
payment of $26.4 million, which the insurers have paid in full
during June and July, 2004.

The company will hold a conference call on Tuesday,
August 24, 2004 at 3:00 PM Eastern Daylight Time.  Interested
investors should call 1-888-841-5035 ten minutes prior to the time
of the conference call.  Callers from outside North America CAN
call 1-973-582-2830 and hold for a live operator.  Identify
yourself and your company and inform the operator that you are
participating in the Interpool 2003 Year End Results Conference
Call.

If you are unable to access the Conference Call at 3:00 PM, call
1-973-341-3080 to access the taped digital replay.  To access the
replay, call and enter the digital pin #5081333.  This replay will
first be available at 5:00 PM on August 24th and will be available
until Thursday, August 31st at 11:59 PM Eastern Daylight Time.

Investors will also have the opportunity to listen to the
Conference Call live at the company's web site
http://www.interpool.com/ To listen to the live call via the
Internet, please go to the web site at least fifteen minutes early
to register, download, and install any necessary audio software.
For those who cannot listen to the live web cast, a replay will be
available two hours after the call is completed and will remain
available for one week.

                       About Interpool Inc.

Interpool is one of the world's leading suppliers of equipment and
services to the transportation industry.  The company is the
world's largest lessor of intermodal container chassis and a
world-leading lessor of cargo containers used in international
trade.

                         *     *     *

As reported in the Troubled Company Reporter on July 13, 2004,
Fitch Ratings affirms Interpool, Inc.'s senior secured, senior
unsecured, and preferred stock ratings at 'BB-', 'B', and 'CCC+',
respectively.  The ratings are removed from Rating Watch Negative
where they were placed on Oct. 10, 2003.  The Rating Outlook is
Positive.  Approximately $322 million of debt and trust-preferred
securities are affected by Fitch's action.

The Rating Watch Negative was removed as Interpool has completed
its financial restatement for fiscal years 2000, 2001, and 2002
with a negligible impact to credit fundamentals.  While the
company is not yet current with its Securities and Exchange
Commission financial statement filings, Fitch has gained
confidence that the company is ahead of the schedule announced in
November 2003 to be in compliance with SEC financial statement
reporting deadlines by the end of 2004.  Interpool has also been
successful at maintaining an acceptable liquidity position through
sourcing new secured financing and consistent retention of
meaningful unrestricted cash balances.

The Positive Rating Outlook reflects Fitch's view that Interpool
will continue its progress at becoming a timely SEC filer and also
considers an expected strengthening of the company's information
technology, accounting, and legal infrastructure resulting from
the implementation of recommendations from Morrison and Foerster,
LLP's forensic review of the company's operations.  These
improvements, when completed, will enable the company to better
monitor, manage, and track equipment as well as improve the
efficiency and integrity of its billing and cash management
systems.


INTERSTATE HOTELS: Gets B Corporate Credit Rating from S&P
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to hotel management company Interstate Hotels &
Resorts, Inc.

At the same time, Standard & Poor's assigned its 'B' rating and a
recovery rating of '4' to Interstate Operating Company L.P.'s
proposed $135 million senior secured bank facility, indicating
Standard & Poor's expectation of marginal (25%-50%) recovery of
principal in the event of default.  The facility is expected to
consist of a $60 million revolving credit facility due in 2006 and
a $75 million Term Loan B due in 2009.

Interstate Operating Company is a wholly owned subsidiary of
Interstate Hotels & Resorts, based in Arlington, Virginia.  The
outlook is stable.  Pro forma for the transaction as of
June 30, 2004, about $90 million in debt is expected to be
outstanding.

Proceeds from the bank facility will be used to redeem $43 million
outstanding under Interstate's $113 million senior secured credit
facility, $40 million in subordinated debt owed to Lehman
Brothers, and to pay transaction related fees and expenses.  About
$10 million - $15 million are expected to be initially drawn under
the revolver once the transaction is complete.

"Ratings reflect Interstate's niche position in the lodging
industry as an independent hotel management company, generally
less favorable management contract terms than for major brand
owners, exposure to highly leveraged MeriStar Hospitality Corp.
that owns about 30% of the hotels managed by Interstate, its small
scale, and an anticipated active growth strategy," said Standard &
Poor's credit analyst Sherry Cai.  "These factors are somewhat
offset by geographic and brand diversity of its hotel portfolio
under management, and adequate credit measures and liquidity
position."


DUNES PLAZA: Case Summary & 6 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Dunes Plaza Associates
        545 Madison Avenue
        16th Floor
        New York, New York 10022

Bankruptcy Case No.: 04-15403

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      Sherwood Plaza Associates, Ltd.            04-15402

Type of Business: The Debtors are owners as tenants-in-common
                  of a freestanding retail building in Brandon,
                  Florida.  Originally leased for $929,264 per
                  year, Kmart occupied the store and then sublet
                  it to Hechinger's and then to Burlington Coat
                  Factory, the current tenant.  Burlington pays
                  $643,200 in annual rent, which is insufficient
                  to service the Debtors' $24.8 million mortgage
                  obligations.

Chapter 11 Petition Date: August 18, 2004

Court: Southern District of New York (Manhattan)

Judge: Allan L. Gropper

Debtor's Counsel: Ira S. Greene, Esq.
                  Hogan & Hartson, LLP
                  875 Third Avenue
                  New York, New York 10022
                  Tel: (212) 918-3000
                  Fax: (212) 918-3100

Total Assets: Unknown

Total Debts: $25,093,233

Debtors' 6 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Holland & Knight LLP          Legal Fees                 Unknown

Tri Realty Management         Trade Debt                $162,575

Stuart S. Golding Co.         Trade Debt                 $25,000

Brand Sonnenschine LLP        Accounting Fees             $6,500

Joel Roth, CPA                Accounting Fees             $3,500

Florida Department of         Sales Tax                   $3,000
Revenue


EL CALLAO: Implements Plan of Arrangement After Getting Court Okay
------------------------------------------------------------------
El Callao Mining Corp. (ECM: TSXV) received final court approval
for a plan of arrangement pursuant to which El Callao will become
a wholly owned subsidiary of Crystallex International Corporation
(KRY: TSX and AMEX).  All conditions to the implementation of the
plan of arrangement have now been satisfied and the arrangement
will be implemented today, August 20, 2004.

El Callao Mining Corp. is engaged in the mining of gold and
related activities including acquisition, evaluation and
development of mineral properties.  These activities are conducted
in Venezuela.  Any gold produced from the Company's ore is
processed at the Revemin Mill, owned and operated by a related
party, under common control.

The Company was owned by Crystallex International Corporation, of
Toronto, Canada (79.4%) and by other investors (20.6%).

Crystallex provided management, financing, administrative and
technical services, including all geological assessments to the
Company.  Accordingly, the Company is economically dependent on
Crystallex.

At March 3,1 2004, El Callao's stockholders' deficit widened to
$43,465,625 compared to a $42,301,812 deficit at
December 31, 2003.


ELC LTD: Fitch Junks Four Classes & Rates Two Classes BB-
---------------------------------------------------------
Fitch Ratings affirms all tranches of ELC (Cayman) Ltd. 1999-II as
follows:

   -- $118,014,993 class A-1 notes affirmed at 'AAA';
   -- $202,011,429 class A-2 notes affirmed at 'AAA';
   -- $36,750,000 class A-3 notes affirmed at 'AAA';
   -- $11,250,000 class A-4 notes affirmed at 'AAA';
   -- $11,000,000 class B-1 notes affirmed at 'A-';
   -- $11,000,000 class B-2 notes affirmed at 'A-';
   -- $19,000,000 class C-1 notes affirmed at 'BB-';
   -- $25,000,000 class C-2 notes affirmed at 'BB-';
   -- $3,100,000 class D-1 notes affirmed at 'CCC';
   -- $13,675,000 class D-2 notes affirmed at 'CCC';
   -- $25,250,000 class E notes affirmed at 'CC';
   -- $25,250,000 preferred shares affirmed at 'C'.

ELC (Cayman) Ltd. 1999-II is a collateralized debt obligation
(CDO) managed by Babson Capital Management LLC.  The CDO was
established in August 1999, to issue $562 million in debt and
preference shares.  Payments are made semi-annual in March and
September and the reinvestment period ends in September 2004.  In
conjunction with the review, Fitch Ratings discussed the current
state of the portfolio with the asset manager and their portfolio
management strategy.  In addition, Fitch Ratings conducted cash
flow modeling utilizing various default timing and interest rate
scenarios.

Fitch Ratings has reviewed the credit quality of the individual
assets comprising the portfolio.  Since Fitch's last rating action
in September 2002, the portfolio has experienced stable
performance and minimal change to the weighted average rating
factor -- WARF.  The portfolio has remained stable along with a
reduction in impaired and defaulted assets within the portfolio.
Accordingly, as a result of our analysis, Fitch has determined
that the current ratings assigned to all rated notes reflect the
current risk to noteholders.

The ratings assigned to the class A, B, C and D notes address the
timely payment of interest and ultimate payment of principal.  The
ratings assigned to the class E and preference shares addresses
the ultimate receipt of the stated principal amount by the final
maturity date.

Fitch will continue to monitor and review this transaction for
future rating adjustments as needed.


JUNIPER CBO: Standard & Poor's Junks Classes A-4, A-4L & B-2
------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on the class
A-3 and A-3L notes issued by Juniper CBO 2000-1 Ltd., an arbitrage
CBO transaction originated in April 2000 and managed by Wellington
Management Co., on CreditWatch with positive implications.  At the
same time, the ratings assigned to the class A-1L, A-2L, A-4L, and
A-4 notes are affirmed.

The CreditWatch placements reflect factors that have positively
impacted the credit enhancement available to support the notes
since the transaction was last reviewed in September 2003.  These
factors include a paydown of approximately $27.040 million on the
A-1L notes, including approximately $19.761 million on the most
recent payment date of April 15, 2004.

Standard & Poor's will be reviewing the results of current cash
flow runs generated for Juniper CBO 2000-1 to determine the level
of future defaults the rated notes can withstand under various
stressed default timing and interest rate scenarios, while still
paying all of the interest and principal due on the notes.  The
results of these cash flow runs will be compared with the
projected default performance of the performing assets in the
collateral pool to determine whether the ratings currently
assigned to the notes remain consistent with the credit
enhancement available.

             Ratings Placed On Creditwatch Positive

                    Juniper CBO 2000-1 Ltd.

                               Rating
                 Class   To               From
                 -----   --               ----
                 A-3     BBB-/Watch Pos   BBB-
                 A-3L    BBB-/Watch Pos   BBB-


                        Ratings Affirmed

                    Juniper CBO 2000-1 Ltd.

                         Class   Rating
                         -----   ------
                         A-1L    AAA
                         A-2L    AAA
                         A-4     CCC-
                         A-4L    CCC-


                    Other Outstanding Rating

                     Juniper CBO 2000-1 Ltd.

                         Class   Rating
                         -----   ------
                         B-2     CC

Transaction Information

Issuer:                 Juniper CBO 2000-1 Ltd.
Co-issuer:              Juniper CBO 2000-1 (Delaware) Corp.
Manager:                Wellington Management Co. LLP
Underwriter:            Bear Stearns
Trustee:                JPMorganChase Bank
Transaction type:       High-yield CBO

   Tranche                 Initial    Last       Current
   Information             Report     Action     Action
   -----------             -------    ------     -------
   Date (MM/YYYY)          06/2000    09/2003    08/2004

   Cl. A-1L notes rtg.     AAA        AAA        AAA
   Cl. A-1L notes bal.     $76.000mm  $51.681mm  $24.641mm
   Cl. A-2L notes rtg.     AAA        AAA        AAA
   Cl. A-2L notes bal.     $90.000mm  $90.000mm  $90.000mm
   Cl. A-3L notes rtg.     AAA        BBB-       BBB-/WatchPos
   Cl. A-3L notes bal.     $20.000mm  $20.000mm  $20.000mm
   Cl. A-3 notes rtg.      AAA        BBB-       BBB-/WatchPos
   Cl. A-3 notes bal.      $30.000mm  $30.000mm  $30.000mm
   Sr. Cl. A OC ratio      143.4%     122.5%     128.9%
   Sr. Cl. A OC ratio min. 120.0%     120.0%     120.0%
   Cl. A-4L notes rtg      A-         CCC-       CCC-
   Cl. A-4L notes bal.     $15.000mm  $15.000mm  $15.000mm
   Cl. A-4 notes rtg       A-         CCC-       CCC-
   Cl. A-4 notes bal.      $20.000mm  $20.000mm  $20.000mm
   Cl. A OC ratio          122.8%     101.9%     104.4%
   Cl. A OC ratio min.     110.0%     110.0%     110.8%
   Cl. B-2 notes rtg       BB-        CC         CC
   Cl. B-2 notes bal.      $7.000mm   $7.000mm   $7.000mm
   Cl. B OC ratio          112.4%     91.0%      91.6%
   Cl. B OC ratio min.     103.0%     103.0%%    103.0%

      Portfolio Benchmarks                        Current
      --------------------                        -------
      S&P Wtd. Avg. Rtg.(excl. defaulted)         B+
      S&P Default Measure(excl. defaulted)        3.50%
      S&P Variability Measure (excl. defaulted)   2.25%
      S&P Correlation Measure (excl. defaulted)   1.21
      Wtd. Avg. Coupon (excl. defaulted)          9.12%
      Oblig. Rtd. 'BBB-' and above                6.88%
      Oblig. Rtd. 'BB-' and above                 39.25%
      Oblig. Rtd. 'B-' and above                  85.00%

      S&P Rated   Last            Current
      OC (ROC)    Rating Action   Rating Action
      ---------   -------------   -------------
      Cl. A-1L    127.65% (AAA)   194.28% (AAA)
      Cl. A-2L    110.42% (AAA)   118.94% (AAA)
      Cl. A-3     108.26% (BBB-)  112.05% (BBB-/Watch Pos)
      Cl. A-3L    108.26% (BBB-)  112.05% (BBB-/Watch Pos)
      Cl. A-4     101.29% (CCC-)  101.64% (CCC-)
      Cl. A-4L    101.29% (CCC-)  101.64% (CCC-)


KIDS WORLD: Case Summary & 6 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Kids World of America Inc.
        12601 Townepark Way, Suite 200
        Louisville, Kentucky 40243-2302

Bankruptcy Case No.: 04-35242

Chapter 11 Petition Date: August 17, 2004

Court: Western District of Kentucky (Louisville)

Judge: Thomas H. Fulton

Debtor's Counsel: David M. Cantor, Esq.
                  Seiller & Handmaker, LLP
                  462 South 4th Avenue, Suite 2200
                  Louisville, KY 40202
                  Tel: 584-7400

Estimated Assets: $500,000 to $1 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 6 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Internal Revenue Service      Past due taxes            $573,862
Attn. Chief Special           interest & penalties
Procedures Function
POB 1706 Stop 510
Louisville, KY 40201

OM Enterprises of             Past due rental &         $409,300
Louisville  Inc.              taxes
P.O. Box 43130
Louisville, KY 40253

Windham Investments Inc.      Past due rental &         $182,445
                              taxes

Louis L Huntley Enterprises   Past due rental            $50,000
Inc.

Community Place LP            Past due rental            $10,000

Kentucky Revenue Cabinet      Past due taxes              $8,000
Division of Unemployment      interest & penalties
Insurance


KMART CORPORATION: BofA & Fleet Back New $200 Million L/C Facility
------------------------------------------------------------------
On August 13, 2004, Kmart Corporation entered into a letter of
credit agreement with a commitment amount of up to $200 million
through January 7, 2005 and increasing to $600 million thereafter.

The Issuing Banks are Bank of America, N.A., and Fleet National
Bank.

The standby letters of credit issued under the LC Agreement bear
interest at 0.20% per annum.  The LC Agreement is subject to a
pledge and security agreement pursuant to which, after January 7,
2005, the Company must post as collateral cash in an amount equal
to 100.5% of the face value of the letters of credit outstanding
under the LC Agreement.  Prior to January 7, 2005, the collateral
posted by the Company is a leasehold mortgage on certain
properties leased by the Company.

A full-text copy of the Letter of Credit Agreement is available
for free at:


http://sec.gov/Archives/edgar/data/1229206/000095012404003850/k86812exv10w3.
txt

Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART
Holding Corporation) -- http://www.bluelight.com/-- is the
nation's  second largest discount retailer and the third largest
merchandise retailer.  Kmart Corporation currently operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the
U.S. Virgin Islands and Guam.  The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474).  Kmart emerged from chapter 11 protection on May 6,
2003.  John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts.  The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection.  (Kmart Bankruptcy News, Issue No. 79; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


KNOLL INC: S&P Cuts Corporate Credit & Bank Loan Ratings to BB-
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and bank loan ratings on office furniture manufacturer Knoll Inc.
to 'BB-' from 'BB', following Knoll's proposal of a debt
refinancing and a shareholder dividend.

At the same time, a 'BB-' senior secured bank loan rating and a
recovery rating of '4' were assigned to the proposed $500 million
bank facility that is part of the refinancing.

The 'BB-' bank loan rating is the same as Knoll's corporate credit
rating; this and the '4' recovery rating indicate that lenders can
expect marginal (25%-50%) recovery of principal in the event of a
default.

The outlook is stable.

Total debt outstanding, pro forma for the transaction, is expected
to be about $450 million.

"The downgrade reflects the company's recent weak operating
results as well as the higher debt levels that are associated with
the refinancing and dividend payment," said Standard & Poor's
credit analyst Martin S. Kounitz.

The ratings on East Greenville, Pennsylvania-based Knoll reflect
its high pro forma debt leverage, recently lower profitability,
and the volatile nature of the office furniture industry.  These
factors are mitigated by Knoll's defendable industry position,
given its large installed base, as well as by the company's
variable cost structure and strong reputation for design.

While orders for the first half of 2004 ended June 30 were up
modestly versus 2003, EBITDA declined on lower sales volume.
During the industry contraction from 2001 to 2003, Knoll's
variable cost structure and low overhead allowed it to outperform
many of its peers.  However, because the company's sales are
concentrated in systems (workstations), Knoll's recovery from the
contraction has lagged that of its peers, many of whom have
greater sales in seating, a category with faster growth.


KNOLL INC: Moody's Assigns Ba3 Rating to Bank Facilities
--------------------------------------------------------
Moody's Investors Service downgraded Knoll, Inc.'s senior implied
rating to Ba3 and senior unsecured issuer rating to B1 and rated
the company's new senior secured bank facilities Ba3 following the
company's announcement of a leveraged recapitalization.  The
outlook remains stable.  The downgrade reflects Knoll's increased
leverage and reduced interest coverage following the company's
decision to pay a dividend to shareholders in the context of
uncertainty as to the extent of the recovery in the commercial
furniture business.

   Ratings assigned:

      * $75 million revolving credit facility due 2009, Ba3; and

      * $425 million senior secured term loan due 2011, Ba3.

   Ratings downgraded:

      * Senior implied rating, Ba2 to Ba3; and

      * Senior unsecured issuer rating, Ba3 to B1.

Knoll is undertaking a leveraged recapitalization in order to pay
a special dividend to shareholders.  As part of this
recapitalization transaction, Knoll has refinanced its
$481.25 million existing bank facilities prior to their
November 2005 maturity.  Outstanding debt will increase by
$45 million as a result of the recapitalization, increasing pro
forma leverage (as measured by adjusted debt/adjusted EBITDAR) to
4.8x as of June 30, 2004, up from 3.6x as of year end 2003.

Although leverage could decline relatively quickly if the nascent
recovery in the commercial furniture market takes firm hold, in
Moody's view the timing and extent of a sustainable rebound in
sales and profitability remain uncertain.  As a result, Moody's
believes significant deleveraging may occur more slowly than the
company expects.  The new debt financing has limited required
amortization and will also extend the maturity of the company's
debt significantly.

The lack of notching of Knoll's senior secured credit facilities
over the senior implied rating reflects the preponderance of this
class of debt in the capital structure.  These facilities are
secured by:

   (1) substantially all of the company's tangible and intangible
       assets;

   (2) perfected first priority pledges of the company's direct;
       and

   (3) indirect domestic subsidiaries, and 65% of the capital
       stock of the company's foreign subsidiaries.

All borrowings are jointly and severally unconditionally
guaranteed by the company's existing and future direct and
indirect domestic subsidiaries.  50% of excess cash flow will be
applied to debt pay down at or near current leverage levels.

The ratings reflect the severe market downturn in commercial
furniture in general and commercial office systems in particular
over the last few years which has led to significant erosion in
sales, earnings, cash flow and credit metrics for commercial
furniture manufacturers.  Although orders appear to have rebounded
in early spring, there is still limited evidence of this rebound
in sales and profitability.  Knoll's heavy reliance on office
system sales, which have shown particular weakness and the
company's moderate diversification into other areas of commercial
furniture also impact ratings.  Ratings are also restrained by:

   (1) the cyclical, competitive nature of the industry;

   (2) the moderately fixed cost nature of the industry; and

   (3) Knoll's historic dividend and capital structure decisions,
       which have previously included a special dividend (January
       2001) and a leveraged recapitalization (November 1999).

The ratings are supported by the company's historic emphasis on
utilizing cash flow for debt reduction.  The company also has a
conservative track record with regard to capital spending and
expansion, avoiding the need for significant restructuring during
the severe 2000-2003 downturn, and appears to have strong cost
control and efficiency measures.

The ratings also reflect:

   (1) Knoll's strong brand name;

   (2) its diversified customer and distributor base;

   (3) its good market position in its core office systems
       business; and

   (4) its long-standing reputation for product quality, design
       and innovation.

The ratings are also supported by:

   (1) the company's strong liquidity;

   (2) its $75 million revolver is expected to be undrawn and
       limited amortization of the term loan is required.

Historically, the company has been a good cash flow generator,
even during the industry downturn, due to a largely variable cost
structure and its prudent spending on capital expenditures.

The stable outlook reflects our expectation that the company will
use most of its excess cash flow for debt pay down as it has done
in the past, and that the commercial furniture sector will
continue to improve with a positive impact on the company's
earnings and cash flow.  The outlook also reflects our expectation
that the company will not undertake additional special dividend or
other relevering transactions, make significant acquisitions, or
aggressively spend on capital expenditures.

The ratings could be upgraded if the commercial furniture industry
shows evidence of a real and sustainable turnaround that
positively impacts Knoll, and if Knoll utilizes its excess cash
flow for debt reduction.  Ratings could be upgraded if Knoll
maintains prudent financial policies and Knoll's adjusted
debt/adjusted EBITDAR falls to the 3.5x range and free cash flow
(after dividends)/total adjusted debt is greater than 10%.

Although Moody's currently views it as unlikely, ratings could be
further downgraded if:

   (1) the commercial furniture industry dynamics do not improve;

   (2) Knoll's market position deteriorates; and

   (3) credit metrics continue to deteriorate with adjusted
       debt/adjusted EBITDAR increasing to over 5x.

Knoll designs, manufactures and distributes a comprehensive
portfolio of branded office furniture products, textiles and
accessories.


LEHMAN MFD: Fitch Cuts Ratings on Two Classes Five Notches to B
---------------------------------------------------------------
These rating actions have been taken on Lehman Manufactured
Housing 1998-1 by Fitch Ratings:

   Series 1998-1 Group I:

      -- Class I-A-1 is affirmed at 'AA'.

   Series 1998-1 Group II:

      -- Classes II-A-1 & II-A-2 downgraded to 'B' from 'BBB-'.

The Lehman Manufactured Housing 1998-1 transaction is
collateralized with classes from ten Green Tree manufactured
housing transactions.  Due to the lack of additional credit
enhancement, the credit risk of the transaction is directly tied
to the credit risk of the underlying Green Tree classes.  The
credit risk on some of the underlying classes has recently
increased, as reflected in the negative rating actions taken on
those classes last month as reported by the Troubled Company
Reporter on July 22, 2004.

The increased credit risk to the underlying classes has created
the need for negative rating action on this transaction.


LEUCADIA NATIONAL: Investment Style Prompts S&P's BB Credit Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
counterparty credit rating on Leucadia National Corp. to 'BB' from
'BBB-' and removed the ratings from CreditWatch, where they had
been placed on Aug. 12, 2004.  The outlook is stable.

The ratings action reflects Leucadia's increased investment
appetite for high-risk telecommunications assets, with its
existing position in WilTel Communications Group, Inc., which is
estimated to be a significant 25% of shareholders equity at
June 30, 2004, and its $245.9 million position in MCI, Inc.,
common stock.  Approval by the Federal Trade Commission and the
Department of Justice on Aug. 9, 2004, to acquire 50% or more of
MCI's outstanding common stock, now paves the way for Leucadia to
possibly take a control position in MCI, further magnifying these
ratings concerns.  These investments altogether increase
Leucadia's exposure to a high-risk sector and the concentration
risk within an investment class.

"Leucadia's investment in WilTel and MCI also reflects a change in
investment style, demonstrating a greater willingness on the part
of the company to purchase, restructure, and control severely
distressed companies of substantial size and with significant
industry risk," said Standard & Poor's credit analyst Lisa J.
Archinow, CFA.

The telecommunications industry continues to suffer from
overcapacity and price erosion, and its recovery prospects are
questionable in the short term.  Additionally, the ratings
incorporate Leucadia's strong liquidity position and the
uncertainty of how any future investments will be funded, low
leverage of 0.79x at June 30, 2004, and strong investment track
record.

Leucadia, with total assets of $4.8 billion at June 30, 2004, is a
Manhattan-based diversified holding company.  Leucadia operates
businesses in telecommunications, healthcare, banking and lending,
manufacturing (plastic netting), winery operations, real estate
activities, the development of a copper mine, and property and
casualty reinsurance.  It also invests in securities of both
public and nonpublic companies.

The current rating recognizes the high-risk nature of the
company's business mix.  Maintenance of a strong liquidity
position and acceptable leverage must also continue to be
acceptable in order to maintain the current rating.


LINREAL CORP: Gets Okay to Use Cash Collateral until Sept. 8
------------------------------------------------------------
The Honorable Michael J. Kaplan gave his stamp of approval to
Linreal Corp. and Brylin Hospitals, Inc.'s request for authority
to use their secured creditors' Cash Collateral to finance the
ongoing postpetition operation of their businesses.

Beal Bank and the Internal Revenue Service assert liens and
security interests in cash collateral.  Beal Bank and IRS have
agreed to let the Debtors use their cash collateral through
Sept. 8, 2004.

Before the Debtors filed for bankruptcy protection, Linreal
entered into various loan agreements with GMAC Commercial
Mortgage, whereby GMAC provided $7,012,500 of HUD-guaranteed
refinancing.  As part of the refinancing, Brylin Hospitals
executed a regulatory Agreement granting GMAC liens and security
interests in substantially all of the Debtors' assets.

Under the agreement, Brylin Hospitals is obligated to pay rent in
the amount of all of Linreal's monthly obligations to GMAC.  As of
October 29, 2001, that included $43,178 in interest, $3,603 in
principal and $29,514 for tax and insurance escrows and various
required reserve accounts.  Subsequently, the obligations and
asserted liens and security interests were purchased by and
assigned to Beal Bank.

On an interim basis, Judge Kaplan grants Beal Bank and the IRS
"rollover" replacement liens in the Debtors' postpetition assets.
These new liens have the same relative priority and cover the same
types and kinds of collateral as the prepetition liens.

As additional protection to Beal, Brylin Hospitals will continue
to pay to Beal Bank, on a monthly basis:

   a) $43,133 as interim adequate protection payments; and

   b) a monthly real estate tax escrow payment currently fixed
      at $11,585.

Brylin Hospitals promises to keep the real property and personal
property subject to Beal Bank's liens adequately insured and
repaired.  The IRS will also be paid $873 per week as interim
adequate protection.

Headquartered in Buffalo, New York, Linreal Corp., is a Real
Estate Holding Company.  Linreal's real estate is leased by Bryin
Hospitals, Inc., an affiliated corporation with common ownership.
The Debtors filed for chapter 11 protection (Bankr. W.D.N.Y. Case
No. 04-14386) on June 10, 2004.  Daniel F. Brown, Esq., at Damon &
Morey, represents the Debtors in their restructuring efforts.
When the Debtors filed for protection from its creditors, they
listed $10,000,000 in assets and $8,000,000 in liabilities.


LSP BATESVILLE: S&P Raises Rating on $326MM of Senior Bonds to B-
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on LSP
Batesville Funding Corp./LSP Energy L.P.'s $326 million senior
secured bonds to 'B-' from 'CCC+'.  The outlook is negative.

The rating action follows the upgrade of Aquila, Inc.'s credit
rating to 'B-' from 'CCC+'.  Aquila's rating outlook is also
negative.  Aquila is the off-taker of the project's capacity and
electricity from the plant's Unit 3 for one-third (279 MW
nominally) of its total output pursuant to a power purchase
agreement -- PPA, and the project relies on payments from Aquila
to service its debt.  The project also has a PPA with Virginia
Electric & Power Co. (VEPCO; A-/Stable/A-2) for the remaining two-
thirds (570 MW) of its capacity and energy.

In a worst-case scenario in which Aquila stopped making payments
under the contract, the project would continue to collect fixed-
capacity payments and energy payments under its VEPCO PPA for two-
thirds of its capacity.  Those revenues alone, however, only cover
about 75% of the project's fixed costs and debt service
obligations.

Absent the PPA for its one-third capacity, the project would be
required to generate roughly $15/kW-year to cover its debt service
at 1.0x.  Based on conservative price assumptions for gas and
electricity in the Southeastern Electric Reliability Council --
SERC -- region by Standard & Poor's, the project would generate
about $11 to $12/kW-year net revenues for merchant sales from Unit
3, which are insufficient to fully meet debt service.  The
additional liquidity in the project in the form of a six-month
debt service reserve and some amount accumulated in the
distribution suspense account would help the project for only a
limited time.  The project depends on revenues from Aquila to
fully cover debt service.  Therefore, the rating reflects Aquila's
default risk.


MAJESTIC STAR: COO Michael Kelly Won't Renew Employment Contract
----------------------------------------------------------------
Michael E. Kelly, Executive Vice President and Chief Operating
Officer of The Majestic Star Casino, LLC, will not seek to extend
or renew his employment contract.  The Company and Mr. Kelly have
agreed that his employment will cease on Wednesday, August 18,
2004.

"Michael Kelly has been with us since we opened in 1996 and I want
to thank Michael for his contributions to the Company during the
past eight years and wish him much success in his future
endeavors," said Don H. Barden, President and Chief Executive
Officer of Majestic Star Casino.  The Company will engage an
executive search firm to assist with the recruitment of a new
Chief Operating Officer and will begin interviewing potential
candidates soon.

               About Majestic Star Casino, LLC

The Majestic Star Casino, LLC, is a multi-jurisdictional gaming
company that directly owns and operates one dockside gaming
facility located in Gary, Indiana and, pursuant to a 2001
acquisition through its restricted subsidiary, Majestic Investor
Holdings, LLC, owns and operates two Fitzgeralds brand casinos
located in Tunica, Mississippi and Black Hawk, Colorado. For a
fee, The Majestic Star Casino, LLC manages a Fitzgeralds brand
casino in Las Vegas, Nevada, which is wholly owned by Barden
Development, Inc., the parent of The Majestic Star Casino, LLC.
For more information about us, please visit our web sites at
http://www.majesticstar.com/or http://www.fitzgeralds.com/

At March 31, 2004, Majestic Star Casino's balance sheet reflects a
$102,772,004 stockholders' deficit.


MEDIA GROUP: Brings-In Neubert Pepe as Bankruptcy Counsel
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Connecticut gave its
nod of approval to The Media Group, Inc., and its debtor-
affiliates' request to hire Neubert, Pepe & Monteith, P.C. as its
counsel in its bankruptcy proceeding.

Neubert Pepe will:

    a) advise the Debtors of their rights, powers and duties as
       debtors and debtors-in-possession while continuing to
       operate and manage the business and property;

    b) advise and assist the Debtors in the negotiation and
       documentation of financing agreements, debt restructuring
       and related transactions;

    c) review the nature and validity of any liens asserted
       against the property of the Debtors, and give advice
       concerning the enforceability of such liens;

    d) advise the Debtors concerning the actions that these
       might take to collect and to recover property for the
       benefit of the estates;

    e) prepare on behalf of the Debtors necessary and
       appropriate applications, motions, pleadings, draft
       orders, notices, schedules and other documents and review
       all financial and other reports to be filed in these
       cases;

    f) advise and prepare responses to applications, motions,
       pleadings, notices, and other papers which may be filed
       and served in these cases;

    g) counsel the Debtors in connection with the formulation,
       negotiation and prosecution of a plan of reorganization
       and related documents; and

    h) perform all other legal services for and on behalf of the
       Debtors which may be necessary or appropriate in the
       administration of these cases.

Douglas S. Skalka, Esq., leading the engagement, discloses that
Neubert Pepe received a $25,000 retainer from the Debtors.  The
Firm does not disclose its hourly billing rates in papers filed
with the Bankruptcy Court.

To the best of the Debtors knowledge, Neubert Pepe is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.

Headquartered in Stamford, Connecticut, The Media Group,
distributes and markets automotive additives and general
merchandise.  The company filed for chapter 11 protection on
July 9, 2004 (Bankr. Conn. Case No. 04-50845).  Douglas S. Skalka,
Esq., at Neubert Pepe & Monteith, represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection, it
listed $10,915,723 in total assets and $14,743,552 in total debts.


MILLENIUM ASSISTED: Judge Lyons Rejects Roseland Financing Pact
---------------------------------------------------------------
The Honorable Judge Raymond T. Lyons denied Millenium Assisted
Living Residence at Freehold, LLC's request to obtain credit from
Roseland Property on a secured basis.

The Debtor related that is has been paying many of its vendors on
a Cash On Delivery basis, and is concerned with its ability to
cover all operating and overhead expenses on a timely basis while
it awaits receipt of payments on its accounts receivables, or
reimbursement from private insurers or governmental agencies.

In anticipation of this impending cash flow shortage, the Debtor
sought a source of postpetition financing.  The Debtor relates
that it was unable to locate any potential lender who will provide
credit on an unsecured basis, but reached an agreement with
Roseland Property Company, Inc.

Leo Rosenson, the Debtor's principal, relates that Roseland agreed
to extend a revolving credit line of up to $400,000 to the Debtor
at an 8% interest rate.  All advances by Roseland would be secured
by a superpriority lien on the Debtor's assets with priority over,
inter alia, the Debtor's secured indebtedness to the United States
Department of Housing and Urban Development.

The Debtor's assets are currently subject to a perfected lien held
by the United States Department of Housing and Development in the
amount of $25,000,000.  The Debtor did not assert that there is an
equity cushion with respect to HUD's secured claim, and, in fact,
believes that the collateral securing such claim is worth millions
of dollars less than the indebtedness itself.

The Debtor is financing post-petition operations under the terms
of a Second Cash Collateral Order that expires on August 30, 2004.

Headquartered in Freehold, New Jersey, Millenium Assisted Living
Residence at Freehold, LLC, filed for chapter 11 protection on
June 7, 2004 (Bankr. N.J. Case No. 04-29097).  Larry Lesnik, Esq.,
and Sheryll S. Tahiri, Esq., at Ravin Greenberg PC, represent the
Debtor in its restructuring efforts.   When the Company filed for
protection from its creditors, it estimated over $10 million in
debts and assets.


MILLENIUM ASSISTED: Three-Member Creditors' Committee Appointed
---------------------------------------------------------------
The United States Trustee for Region 3 appointed three creditors
to serve on an Official Committee of Unsecured Creditors in
Millenium Assisted Living Residence at Freehold, LLC's Chapter 11
case:

      1. Yisroel Shapiro
         Shapiro's Bakery
         315 Casanetta Drive
         Lakewood, New Jersey 08701
         Tel: 732-961-0888
         Fax: 732-961-0744

      2. Philip A. Mann
         MS Consultants, LLC
         6400 Sheridan Drive, Suite 230
         Williamsville, New York 14221
         Tel: 716-633-9840
         Fax: 716-633-9469

      3. James J. DeLuca
         J.J. DeLuca Company, Inc.
         760 West Sproul Road, Suite 300
         Springfield, Pennsylvania 19064
         Tel: 610-995-9440
         Fax: 610-995-2928

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

Headquartered in Freehold, New Jersey, Millenium Assisted Living
Residence at Freehold, LLC, filed for chapter 11 protection on
June 7, 2004, (Bankr. N.J. Case No. 04-29097).  Larry Lesnik,
Esq., and Sheryll S. Tahiri, Esq., at Ravin Greenberg PC represent
the Debtor in its restructuring efforts.  When the Company filed
for protection from its creditors, it estimated over $10 million
in debts and assets.


MIRANT CORP: Asks Court to Nix 7 Calif. Utility Commission Claims
-----------------------------------------------------------------
Mirant Corporation, Mirant Potrero, LLC, Mirant Delta, LLC,
Mirant California, LLC, Mirant Americas, Inc., Mirant Americas
Generation, LLC, and Mirant Americas Energy Marketing, LP, object
to seven proofs of claim filed by the California Public Utilities
Commission -- Claim Nos. 7529, 7530, 7531, 7532, 7533, 7534 and
7535.

The CPUC is an agency of the State of California that is tasked
with regulating retail sales of energy to California consumers by
California's three principal investor-owned utilities -- Pacific
Gas & Electric Company, Southern California Edison and San Diego
Gas & Electric Company.  Importantly, Michelle C. Campbell, Esq.,
at White & Case, LLP, in Miami, Florida, notes that the CPUC has
no authority to, and does not, regulate either:

    (i) any sale of electricity by the Debtors, which sell energy
        at wholesale, not retail; or

   (ii) the wholesale energy markets in which one or more of the
        Debtors may have operated.

Sales of energy at wholesale are within the jurisdiction of the
Federal Energy Regulatory Commission, not within the jurisdiction
of individual state regulatory commissions, including the CPUC.

                The California Energy Restructuring

In 1996, the California legislature passed a bill known as "AB
1890" to restructure California's energy industry by creating a
competitive market for the sale of energy at wholesale.  As part
of the restructuring, PG&E, Edison and San Diego Gas were
encouraged to sell some of their fossil fuel generation capacity
to independent power producers and marketers to more quickly
create a competitive energy wholesale market in California.

California created three principal competitive markets for the
sale of electricity at wholesale:

    1. the "day-ahead" market;
    2. the "day-of" market; and
    3. the "real-time" market.

A "block-forward" market was also created to permit market
participants to hedge against price fluctuations in the Principal
Markets.  California Power Exchange Corporation administered the
"day-ahead" market, the "day-of" market and the "block-forward"
market.  California Independent System Operation administered the
"real-time" market.

According to Ms. Campbell, MAEM sold energy into the California
Energy markets.

                         The Refund Claims

As a result of the increase in electricity prices that occurred in
2000 and 2001, San Diego Gas, PG&E, Edison, the CAISO, the CalPX,
the California Department of Water Resources, the Attorney
General of the State of California and the CPUC pursued litigation
at FERC, claiming that the prices charged by MAEM and other market
participants in the California energy markets during 2000 and 2001
were excessive.  The California Parties asserted in the FERC
Refund Proceedings that FERC should "mitigate" market prices
between January 1, 2000 and June 20, 2001.  FERC rejected those
claims and has preliminarily determined or indicated that it will
"mitigate" the market prices charged by energy sellers, including
MAEM, only from October 2, 2000 through June 20, 2001 -- the
Refund Period.  The amount of refunds that may be owed by sellers
pursuant to the FERC Refund Proceedings has yet to be finally
determined.

At the conclusion of the FERC Refund Proceedings, subject to
rights of rehearing and appeal, MAEM expects the FERC to determine
the final amount of the Receivables due to MAEM and the final
amount of the Refunds due from MAEM.  MAEM also expects the
FERC to determine how much PG&E and Edison must pay for their
share of energy purchased from the California Energy Markets
during the Refund Period and what amounts are to be distributed by
the CalPX and the CAISO, as administrators of the California
Energy Markets.  Ultimately, the Receivables will be paid to MAEM
by purchasers of energy on the California Energy Markets and the
Refunds will be paid by MAEM to the purchasers.  However, no
Refunds will be paid to the CPUC, which was not a buyer of energy
from the California Energy Markets.

Ms. Campbell notes that PG&E, Edison, the DWR, the Attorney
General, the CalPX and perhaps the CAISO, among others, have all
filed duplicative claims concerning the Refunds and other amounts
-- the FERC Claims.  Some or all of the Objecting Debtors have
filed adversary proceedings against one or more of the California
Parties addressing the flaws in the FERC Claims.

                      The DWR Contract Claims

After January 17, 2001, the DWR commenced buying power on behalf
of PG&E and Edison through the "real-time" market.  The DWR also
entered into several long-term bilateral power purchase agreements
with energy wholesalers.  MAEM and the DWR entered into a long-
term power purchase agreement on May 22, 2001.  The PPA provided
for the sale by MAEM to the DWR of 500 MW of energy from time to
time between June 1, 2001 and December 30, 2002. During the life
of the PPA, the price of energy on California's "real-time" energy
market decreased and eventually fell below the price of energy
under the PPA.

On February 22, 2002, the DWR commenced proceedings at the FERC
attempting to abrogate all of its long-term bilateral power
purchase agreements, including the PPA.  Among other things, the
DWR asserted that the contracts should be abrogated by the FERC
because they were entered into at a time when the California
energy markets were being manipulated by energy wholesalers.
The DWR also asserted that sales of energy made under the power
purchase agreements should be deemed to have been made at
"mitigated" market prices, thereby requiring energy wholesalers,
including MAEM, to pay refunds to the DWR.

On June 26, 2003, the FERC denied the complaint as to MAEM and
found that the PPA was fully enforceable and legal in all respects
and that MAEM owed no refunds to the DWR.  The FERC's ruling is
currently on appeal with the Ninth Circuit.

The DWR has filed an unliquidated claim against MAEM based on the
claims that have already been rejected by the FERC in the DWR
Proceedings.

                       Reliability Must-Run

As part of California's energy restructuring, PG&E, Edison and
San Diego Gas were encouraged by the CPUC to, and did, divest
their fossil fuel generation capability to more expeditiously
create a wholesale energy market in California.  The sale of
generation assets to third parties meant that the output of the
generation would no longer be regulated by the CPUC as it was for
the integrated utilities.  Accordingly, to ensure that the output
of certain units that were needed for local reliability would
still be available, the new plant owners entered into a form of
cost-based agreement at which the CAISO could procure energy and
ancillary services required to maintain grid reliability.
Reliability Must-Run contracts were established to satisfy this
need.

Ms. Campbell says that a typical RMR contract requires the owner
of an RMR generating unit to sell energy to the CAISO at a
regulated price that has been approved by FERC at the CAISO's
request.  This assures that the CAISO can meet grid reliability
standards by procuring energy from an RMR unit when necessary, and
prevents an RMR owner from exercising market power for that energy
by regulating its price.

In addition, the CAISO Tariff requires the utility serving load
(retail customers) in the area where the RMR unit is located to
pay the CAISO for energy purchased by the CAISO under an RMR
contract.  These amounts are paid by the CAISO to the RMR owner
pursuant to the applicable RMR contract.  A Responsible Utility is
a third-party beneficiary of the RMR contracts relating to RMR
units within its territory.  The RMR owners and the CAISO are
direct parties to the RMR agreement.  If a Responsible Utility
fails to pay for RMR energy, the RMR owner looks to the CAISO to
recover those payments from collateral held by the CAISO, and, in
some instances, the RMR Owner may look to the Responsible Utility
for payment.

Potrero purchased a power plant located in the Potrero district of
San Francisco from PG&E.  Potrero assumed the existing RMR
agreement previously held by PG&E when it acquired the plants in
April 16, 1999.  Delta purchased two power plants from PG&E, one
located in Pittsburg, California, and one located in Antioch,
California.  Delta also assumed the prior PG&E RMR contracts with
the CAISO when the plants were acquired.  The first agreement
covers the Pittsburg power plant, and the second covers the
Antioch power plant.  PG&E is the Responsible Utility in respect
of the RMR Contracts.

The RMR Contracts permit Delta and Potrero to operate under two
pricing schemes known as "Condition One" and "Condition Two."
Under Condition One, Delta and Potrero are entitled to recover a
portion of their FERC-approved fixed costs from the CAISO.  In
addition, Delta and Potrero may sell the energy to third parties
at market rates.  Under Condition Two, Delta and Potrero are
entitled to recover all of their FERC-approved fixed and variable
costs but must credit back to the CAISO any revenues received by
making sales of energy in the market.

At the time that the RMR Contracts were first put into place, Ms.
Campbell relates that the CAISO and RMR owners generally could not
agree on the proper percentage of fixed costs to be paid to RMR
owners under Condition One.  Therefore, the parties stipulated
that RMR owners would be entitled to collect 50% of their fixed
costs, subject to refund, pending further negotiations by the
parties or a FERC order fixing the proper percentage.  Delta and
Potrero properly collected from the CAISO (and PG&E) the amounts
agreed to by the parties while operating under Condition One.

Ms. Campbell reports that Delta and Potrero were unable to
consensually agree on the proper percentage of fixed costs to be
paid under Condition One with the CAISO (and PG&E), and the matter
was submitted to the FERC for resolution.  In June 2000, an
administrative law judge ruled that the percentage of fixed costs
payable under Condition One should be calculated pursuant to a
methodology that would reduce the FOP from the provisionally
stipulated 50% to approximately 3.5% on average.  Delta and
Potrero filed briefs on exception with the FERC, and, as a result,
the ALJ's decision is purely advisory unless it is adopted by the
FERC.  To date, the FERC has not yet adopted the ALJ's decision.

If the ALJ's decision is adopted by the FERC, Ms. Campbell tells
the U.S. Bankruptcy Court for the Northern District of Texas that
Delta and Potrero would be liable to the CAISO for the difference
between the 50% FOP collected pursuant to the stipulation and the
3.5% FOP, on average, the ALJ found to be due and owing.

Both PG&E and CAISO have filed duplicate claims in respect of the
FOP liability against Delta and Potrero.

                          The CPUC Claims

Other than the name of the Objecting Debtor against whom each of
the seven Claims is asserted, Ms. Campbell points out that the
CPUC Claims are substantially identical.  Each of the CPUC Claims
asserts a claim on behalf of "California electric consumers" for
an amount equal to "no less than $2,105,230,800," plus all accrued
and unpaid interest and any and all related charges, fees and
expenses incurred.

The CPUC Claims can be grouped into three main categories:

    1. The CPUC asserts claims against the Objecting Debtors in
       respect of Refunds and Other Amounts.  The CPUC Refund
       Claims are duplicative of claims asserted by PG&E, Edison,
       DWR, the Attorney General, the CalPX, and perhaps the
       CAISO, among others, in respect of the Refunds and the
       Other Amounts;

    2. The CPUC asserts claims related to the PPA.  The CPUC
       DWR Claims are duplicative of the DWR Contract Claims
       filed by the DWR, and perhaps others; and

    3. The CPUC asserts claims arising from the RMR Contracts on
       account of the alleged FOP liability.  The CPUC RMR Claims
       are duplicative of the RMR Claims filed by PG&E and the
       CAISO.

Ms. Campbell asserts that the CPUC is not a creditor of the
Debtors and has no standing to file a proof of claim since:

    (a) it did not purchase energy on or have any regulatory
        oversight over the California Energy Markets; and

    (b) it was not a party to and did not have any regulatory
        oversight over the PPA or the RMR Contracts.

Moreover, Ms. Campbell adds that the CPUC is not entitled to file
a proof of claim under the doctrines of prudential standing
because:

    (a) it cannot establish "legal injury" since it is not the
        legal or beneficial owner of the CPUC Claims;

    (b) there is no evidence that the CPUC and the other
        California Parties hold a "close relation" that would
        allow CPUC to act on behalf of the other California
        Parties; and

    (c) the other California Parties are capable of fully
        defending their own interests and have filed proofs of
        claim in their own right in order to do so.

Accordingly, the Debtors ask the Court to disallow the CPUC
Claims.

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


MORGAN STANLEY: S&P Affirms Low-B Ratings on Classes HYB1 B-4 & 5
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on five
classes from three series of Morgan Stanley Dean Witter Capital I
Trust mortgage pass-through certificates.  Ratings are also
affirmed on 129 other classes from 23 transactions from the same
issuer.  Approximately $4.77 billion in certificates are affected.

The raised ratings are based on pool performances that have caused
the credit support percentages to increase sufficiently to protect
the classes at the new rating levels.  The credit support
percentages are at least 1.86x the loss coverage levels, and
cumulative losses range from 0.0% to 1.72% of the original pool
balances.  Ninety-plus-day delinquencies, including REOs and
foreclosures, range from 2.98% to 18.68% of the current pool
balances.

All of these transactions utilize subordination as credit support.
In addition, these transactions, with the exception of 2003-HYB1
and 2002-WL1, also utilize overcollateralization and excess spread
as credit support.  Some classes also receive support from bond
insurance policies provided by Financial Security Assurance Inc.
('AAA' insurer financial enhancement rating), MBIA Insurance Corp.
('AAA' insurer financial enhancement rating), or Ambac Assurance
Corp. ('AAA' insurer financial enhancement rating).  These classes
are denoted below with an asterisk in the affirmed ratings section
of the list.

The affirmations on the nonbond insured ratings are based on
credit support percentages that are sufficient to maintain the
securities' current ratings.  The affirmations on the bond insured
ratings are based on the financial strength of the underlying
insurer.

The underlying collateral for these transactions are mostly fixed-
rate, first-lien, 30-year mortgage loans on single-family homes.

                         Ratings Raised

           Morgan Stanley Dean Witter Capital I Trust
                    Mortgage pass-thru certs

                                     Rating
              Series     Class   To          From
              ------     -----   --          ----
              2002-AM1   M-1     AA+         AA
              2002-HE2   M-1     AA+         AA
              2002-WL1   B-1     AAA         AA
              2002-WL1   B-2     AA          A
              2002-WL1   B-3     A           BBB

                        Ratings Affirmed

           Morgan Stanley Dean Witter Capital I Trust
                    Mortgage pass-thru certs

            Series     Class                 Rating
            ------     -----                 ------
            2000-1     A-I*                  AAA
            2000-1     A-II*                 AAA
            2001-1     A-I                   AAA
            2001-AM1   M-1                   AA+
            2001-AM1   M-2                   A
            2001-AM1   B-1                   BBB-
            2001-NC2   A-1                   AAA
            2001-NC2   M-1                   AA+
            2001-NC2   M-2                   A
            2001-NC2   B-1                   BBB-
            2001-NC3   M-1                   AA
            2001-NC3   M-2                   A
            2001-NC3   B-1                   BBB-
            2001-NC4   A-2*                  AAA
            2001-NC4   M-1                   AA
            2001-NC4   M-2                   A
            2001-NC4   B-1                   BBB-
            2002-AM1   A-2                   AAA
            2002-AM1   M-2                   A
            2002-AM1   B-1                   BBB-
            2002-AM2   A-2                   AAA
            2002-AM2   M-1                   AA
            2002-AM2   M-2                   A
            2002-AM2   B-1, B-2              BBB-
            2002-AM3   A-2*, A-3             AAA
            2002-AM3   M-1                   AA
            2002-AM3   M-2                   A
            2002-AM3   B-1                   BBB
            2002-AM3   B-2                   BBB-
            2002-HE2   A-2                   AAA
            2002-HE2   M-2                   A
            2002-HE2   B-1                   BBB
            2002-HE2   B-2                   BBB-
            2002-NC4   A-2                   AAA
            2002-NC4   M-1                   AA
            2002-NC4   M-2                   A
            2002-NC4   B-1                   BBB
            2002-NC4   B-2                   BBB-
            2002-NC5   A-2*, A-3             AAA
            2002-NC5   M-1                   AA
            2002-NC5   M-2                   A+
            2002-NC5   M-3                   A
            2002-NC5   B-1                   BBB
            2002-NC5   B-2                   BBB-
            2002-NC3   A-2*, A-3             AAA
            2002-NC3   M-1                   AA
            2002-NC3   M-2                   A
            2002-NC3   B-1                   BBB
            2002-NC3   B-2                   BBB-
            2002-NC1   A-2                   AAA
            2002-NC1   M-1                   AA
            2002-NC1   M-2                   A
            2002-NC1   B-1                   BBB-
            2002-NC2   A-2                   AAA
            2002-NC2   B-1                   BBB-
            2002-HE1   A-2                   AAA
            2002-HE1   M-1                   AA
            2002-HE1   M-2                   A
            2002-HE1   B-1                   BBB
            2002-HE1   B-2                   BBB-
            2002-OP1   A-2                   AAA
            2002-OP1   M-1                   AA
            2002-OP1   M-2                   A
            2002-OP1   B-1                   BBB
            2002-OP1   B-2                   BBB-
            2002-WL1   1-A-1, 1-A-2, 1-A-3   AAA
            2002-WL1   1-A-4, 1-A-5          AAA
            2002-WL1   1-A-6, 1-A-7, 2-A-1   AAA
            2002-WL1   2-A-2, 2-A-3          AAA
            2002-WL1   2-A-4, A-X-1, A-X-2   AAA
            2002-WL1   A-X-3, A-P            AAA
            2002-WL1   A-R, A-LR             AAA
            2003-NC1   A-2, A-3              AAA
            2003-NC1   M-1                   AA
            2003-NC1   M-2                   A
            2003-NC1   M-3                   A-
            2003-NC1   B-1                   BBB
            2003-NC1   B-2                   BBB-
            2003-NC2   A-2, A-3              AAA
            2003-NC2   M-1                   AA
            2003-NC2   M-2                   A
            2003-NC2   M-3                   A-
            2003-NC2   B-1                   BBB
            2003-NC2   B-2                   BBB-
            2003-NC4   A-2, A-3, A-4         AAA
            2003-NC4   M-1                   AA
            2003-NC4   M-2                   A
            2003-NC4   M-3                   A-
            2003-NC4   B-1                   BBB+
            2003-NC4   B-2                   BBB
            2003-NC4   B-3                   BBB-
            2003-HYB1  A-1, A-2, A-3, A-4    AAA
            2003-HYB1  A-X, A-R              AAA
            2003-HYB1  B-1                   AA
            2003-HYB1  B-2                   A
            2003-HYB1  B-3                   BBB
            2003-HYB1  B-4                   BB
            2003-HYB1  B-5                   B
            2003-NC3   A-2, A-3              AAA
            2003-NC3   M-1                   AA
            2003-NC3   M-2                   A
            2003-NC3   M-3                   A-
            2003-NC3   B-1                   BBB+
            2003-NC3   B-2                   BBB
            2003-NC3   B-3                   BBB-

               * Bond insured class.


MORGAN STANLEY: Fitch Puts BB Rating on Class E Auto Loan Notes
---------------------------------------------------------------
Fitch Ratings issued a presale report on Morgan Stanley Auto Loan
Trust 2004-HB2 discussing the rating analysis behind Fitch's
expected 'AAA' ratings on the class A notes, 'A+' ratings on the
class B notes, 'BBB+' ratings on the class C notes, 'BBB' ratings
on the class D notes, and 'BB' on the class E notes.

The securities are backed by a pool of prime retail installment
sales contracts secured by new and used automobiles and light duty
trucks from a diverse pool of manufacturers originated by The
Huntington National Bank.

The presale report is available to all investors on Fitch's
corporate site http://www.fitchratings.com/ For more information
about Fitch's comprehensive subscription service FitchResearch,
which includes all presale reports, surveillance, and credit
reports on more than twenty asset classes, contact product sales
at +1-212-908-0800 or at webmaster@fitchratings.com


NORTEL NETWORKS: Declares Preferred Share Dividends
---------------------------------------------------
Nortel Networks Limited's board of directors declared a dividend
on each of the outstanding Cumulative Redeemable Class A Preferred
Shares Series 5 (TSX:NTL.PR.F) and the outstanding Non-cumulative
Redeemable Class A Preferred Shares Series 7 (TSX:NTL.PR.G).

The dividend amount for each series is calculated in accordance
with the terms and conditions applicable to each respective
series, as set out in the Company's articles.  The annual dividend
rate for each series floats in relation to changes in the average
of the prime rate of Royal Bank of Canada and The Toronto-Dominion
Bank during the preceding month and is adjusted upwards or
downwards on a monthly basis by an adjustment factor which is
based on the weighted average daily trading price of each of the
series for the preceding month, respectively.

The maximum monthly adjustment for changes in the weighted average
daily trading price of each of the series will be plus or minus
4.0% of Prime.  The annual floating dividend rate applicable for a
month will in no event be less than 50% of Prime or greater than
Prime.  The dividend on each series is payable on October 12, 2004
to shareholders of record of such series at the close of business
on September 30, 2004.

                       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 http://www.nortelnetworks.com/
or http://www.nortelnetworks.com/media_center/

                         *     *     *

As reported in the Troubled Company Reporter on August 18, 2004,
the Integrated Market Enforcement Team of the Royal Canadian
Mounted Police recently advised the Company that it will commence
a criminal investigation into the Company's financial accounting
situation.

As reported in the Troubled Company Reporter on August 12, 2004,
the Company's directors and officers, and certain former directors
and officers are facing allegations from certain shareholders in
the U.S. District Court for the Southern District of New
York that the directors and officers breached fiduciary duties
owed to the Company during the period from 2000 to 2003.


OCEANLAKE COMMERCE: Steven Moya Replaces Steve Koskie as CEO
------------------------------------------------------------
OceanLake Commerce, Inc.'s (TSX-V:OLI) Board of Directors reported
that Steve Koskie resigned his position as a Director and as
Chairman & CEO of OceanLake effective immediately.

The Board acknowledged Mr. Koskie's contributions over the past
five-years.  Mr. Koskie has been instrumental in directing
OceanLake's leading technology solution and securing the investors
and funding necessary to ride-out the wireless market challenges.
"I have absolutely enjoyed the challenging build up of OceanLake,
and now that we have tangible acceptance in the marketplace along
with sustainable funding in the bank, I feel it makes sense to
pass the reins to a new CEO." Mr. Koskie went on to say, "As a
major shareholder of OceanLake stock, I look forward to watching
the company grow and enhance returns to shareholders.  Finally, I
would like to thank the staff and the Board for their support
during some very challenging years."

This announcement comes on the heels of OceanLake signing its
first major contract in South East Asia with a major financial
services company, the terms which will be disclosed is a
subsequent news release.  The immediate revenue to OceanLake is
expected to exceed revenue recorded in each of the last three
years.  As there are further potential contracts in advanced
stages of discussions, Mr. Koskie felt this was the logical time
to step aside and allow a natural transition to the senior
management team he brought in earlier this year, to take OceanLake
to the next level.

Concurrent with the announcement, the Board of Directors appointed
Steven Moya as CEO and to the Board of Directors of OceanLake.
Over the last year Mr. Moya has worked closely with OceanLake's
Asian investors to accelerate market penetration and sales
opportunities in South East Asia.  With extensive investment
banking, financial and operating experience, the Board is
confident Mr. Moya has the ability to manage the company and close
deals in the near term.  "I would like to thank Steve for his
support and direction.  I am very excited that we have a strong
company foundation from which to build on" stated Mr. Moya.
"Shareholders and investors are anxious to see improved results
from OceanLake; therefore, I have tied my performance to the
performance of the company."

Additionally on June 25, 2004, in an effort to increase corporate
governance and Board oversight, Paul Cloutier, a well-known
businessman and entrepreneur residing in Toronto, Ontario, was
appointed to the Board of Directors of OceanLake as an independent
Board member.

OceanLake's annual general meeting is scheduled to be held in
early October 2004, where shareholders will have the opportunity
to meet Mr. Moya and learn of recent sales activities in South
East Asia.

OceanLake provides the solution to help determine a company is
ready for wireless - award-winning Mobile Gateway software.  It's
a free hosted service that allows anyone to wirelessly access a
company's web site content from any PDA or browser-equipped cell
phone.  This service is perfect for evaluating wireless usage and
device popularity.  More importantly, it gives the information
needed to build a business case for wireless.

At December 31, 2003, Oceanlake's stockholder deficit narrowed to
$5,074,314 from $7,238,946 a year earlier.


OCEANLAKE COMMERCE: Secures $2 Million Loan Due April 2005
----------------------------------------------------------
OceanLake Commerce, Inc.'s (TSX-V:OLI) secured US$2,000,000
financing under a loan arrangement with a significant shareholder.
The loan carries interest at 5% per annum, payable quarterly, and
is due on April 6, 2005.  The loan is convertible to equity at any
point during the term, subject to regulatory approval for the
conversion, and is unsecured.

OceanLake provides the solution to help determine a company is
ready for wireless - award-winning Mobile Gateway software.  It's
a free hosted service that allows anyone to wirelessly access a
company's web site content from any PDA or browser-equipped cell
phone.  This service is perfect for evaluating wireless usage and
device popularity.  More importantly, it gives the information
needed to build a business case for wireless.

At December 31, 2003, Oceanlake's stockholder deficit narrowed to
$5,074,314 from $7,238,946 a year earlier.


OMNI FACILITY: Committee Hires Kramer Levin as Counsel
------------------------------------------------------
The Official Committee of Unsecured Creditors in Omni Facility
Resources, Inc., and its debtor-affiliates' chapter 11 cases seeks
permission from the U.S. Bankruptcy Court for the Southern
District of New York to employ Kramer Levin Naftalis & Frankel LLP
as its bankruptcy counsel.

The Committee tells the Court that it selected Kramer Levin
primarily because the firm's Bankruptcy Department has extensive
experience in the fields of bankruptcy and creditors' rights and,
in particular, has represented creditors' committees in some of
the largest and most complex chapter 11 reorganization cases.

Kramer Levin will:

    a. administer these cases and exercise oversight with
       respect to the Debtors' affairs including all issues
       arising from the Debtors, the Committee or these Chapter
       11 Cases;

    b. prepare on behalf of the Committee of necessary
       applications, motions, memoranda, orders, reports and
       other legal papers;

    c. appear in Court and at statutory meetings of creditors to
       represent the interests of the Committee;

    d. negotiate, formulate, draft and confirm plan or plans of
       reorganization and matters related thereto;

    e. investigate, if any, as the Committee may desire
       concerning, among other things, the assets, liabilities,
       financial condition, sale of any of the Debtors'
       businesses, and operating issues concerning the Debtors
       that may be relevant to these Chapter 11 Cases;

    f. communicate with the Committee's constituents and others
       as the Committee may consider desirable in furtherance of
       its responsibilities; and

    g. perform all of the Committee's duties and powers under
       the Bankruptcy Code and the Bankruptcy Rules and the
       performance of such other services as are in the
       interests of those represented by the Committee.

The principal attorneys expected to represent the Committee in
this matter and their current hourly rates are:

            Professionals            Billing Rate
            -------------            ------------
            Robert T. Schmidt        $540 per hour
            Matthew J. Williams       460 per hour
            Erin L. Eliasen           260 per hour

Other attorneys and paraprofessionals may provide services to the
Committee in these bankruptcy proceedings. The range of Kramer
Levin's hourly rates for attorneys and legal assistants are:

             Designation              Hourly Rate
             -----------              -----------
             Partners                 $490 - 750
             Counsel                   505 - 800
             Associates                260 - 490
             Legal Assistants          170 - 195

Headquartered in South Plainfield, New Jersey, Omni Facility
Services, Inc. -- http://www.omnifacility.com/-- provides
architectural, janitorial, landscaping, and electrical services.
The Company filed for chapter 11 protection on June 9, 2004,
(Bankr. S.D.N.Y. Case No. 04-13972).  Frank A. Oswald, Esq., at
Togut, Segal & Segal LLP, represents the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed $80,334,886 in total assets and
$100,285,820 in total debts.


PARKER DRILLING: S&P Assigns B- Rating to Proposed $150MM Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on Parker
Drilling, Co., (B/Negative/--) and, at the same time, assigned its
'B-' rating to the company's proposed $150 million floating rate
notes due 2010.

Proceeds from the proposed note offering will be used to repay the
$70 million outstanding under its existing term loans and,
together with some cash on hand, partially repurchase about
$80 million of aggregate principal amount of its 10.125% senior
notes due 2009.

The outlook is negative, with a downgrade possible if operating
and financial results were to worsen.

As of June 30, 2004, Houston-Texas based Parker had total debt of
about $525.8 million.

"The completion of the proposed financing will improve Parker's
financial flexibility by extending debt maturities and modestly
augmenting the company's cash balances," said Standard & Poor's
credit analyst Brian Janiak.  "In short, it will give Parker a
greater ability to wait for an upcycle in its markets."

Nevertheless, Standard & Poor's said that the outlook remains
negative because of concerns about Parker's long-term ability to
repay its obligations because of its burdensome debt leverage,
only tepid improvement in financial performance despite multiple
years of very strong oil and U.S. natural gas prices, emerging
market exposure, and inability to smoothly execute planned asset
sales.

A downgrade could occur if the company does not improve its
liquidity position or its weak operating and financial results,
which largely hinges on uncertain drilling market conditions.


PEGASUS SATELLITE: Asks Court to Approve DirectTV & NRTC Accord
---------------------------------------------------------------
The Pegasus Satellite Communications, Inc. and its debtor-
affiliates and the Official Committee of Unsecured Creditors have
negotiated a comprehensive Settlement with Pegasus Communications
Corporation and its non-Debtor subsidiaries, DIRECTV, Inc., and
National Rural Telecommunications Cooperative.

A copy of the Settlement Agreement is available at no charge at:

    http://bankrupt.com/misc/Pegasus_settlement_agreement.pdf

Robert J. Keach, Esq., at Bernstein, Shur, Sawyer & Nelson, in
Portland, Maine, tells the Court that the centerpiece of the
Settlement is DIRECTV's agreement to pay the Debtors about
$938,000,000, subject to adjustments provided in an Asset
Purchase Agreement, in consideration for:

      (i) a sale, transfer and conveyance of the Debtors'
          Satellite Assets to DIRECTV, free and clear of all liens
          claims, encumbrances and other interests pursuant to
          Sections 363(b) and 363(f) of the Bankruptcy Code;

     (ii) the Debtors' cooperation in effecting an orderly
          transition of the Satellite Assets to DIRECTV as
          provided in a Cooperation Agreement;

    (iii) a general release by the Debtors of all claims against
          DIRECTV and NRTC, including the claims asserted by the
          Debtors in the Adversary Proceeding, but excluding
          certain claims preserved under the Settlement; and

     (iv) a release by the Pegasus Non-Debtors of all claims
          against DIRECTV and NRTC related to the Debtors' DBS
          business.

A copy of the Asset Purchase Agreement is available at no charge
at:

    http://bankrupt.com/misc/Pegasus_asset_purchase_agreement.pdf

Mr. Keach relates that each facet of the Settlement is both
interrelated and interdependent.  While DIRECTV required that the
Pegasus Non-Debtors release certain claims against DIRECTV and
NRTC, the Pegasus Non-Debtors were unwilling to release claims
against DIRECTV and NRTC unless the Debtors released claims that
the Debtors may have against the Pegasus Non-Debtors.  The
Committee, in turn, was unwilling to consent to a release of
potential estate claims against the Pegasus Non-Debtors unless the
Pegasus Non-Debtors supported the Settlement, issued the releases
required by DIRECTV and agreed to waive prepetition claims against
the Debtors held by the Pegasus Non-Debtors.  By the express terms
of the underlying agreements, the Settlement must be evaluated and
approved as an integrated whole.

The parties have taken a variety of steps to ensure certainty of
closing, and realization of benefits, following Court approval and
satisfaction or waiver of other conditions, including the posting
by DIRECTV of an $875,000,000 letter of credit in favor of Pegasus
Satellite Television.

Pursuant to the terms of the Settlement, the Debtors will receive
a total purchase price of $937,719,121, subject to adjustments in
the Asset Purchase Agreement, from DIRECTV in exchange for
substantially all of the Debtors' Satellite Assets.  The purchase
price will be:

     (a) reduced by about $63,000,000 to reflect the amount owed
         by the Debtors to DIRECTV on account of the judgment
         entered in favor of DIRECTV and against Pegasus in the
         Seamless Marketing Litigation;

     (b) increased by:

         * about $16,800,000, consisting of $10,800,000 of cash
           patronage distributions due to Pegasus for 2003 and an
           agreed amount for 2004 and an additional $6,000,000
           credited by DIRECTV; and

         * amounts owed to the Debtors at closing under the
           Cooperation Agreement; and

     (c) increased or reduced by certain other adjustments
         specified in the Asset Purchase Agreement, including
         agreed working capital adjustments.

The Debtors will receive from DIRECTV effective upon closing of
the Settlement a general release of all claims.

In addition, NRTC will waive any argument that the Debtors'
patronage capital certificates amounting to $89 million are
subject to forfeiture as a consequence NRTC's asserted termination
of the Debtors as Associate Members of NRTC. Specifically, NRTC
has agreed that the Debtors will retain their right to receive
patronage distributions in respect of the Patronage Certificates,
but only on the occurrence of a Trigger Event.  A Trigger Event is
"any distribution (i) that NRTC's Board of Directors, in its sole
discretion may authorize, pursuant to NRTC's bylaws, in connection
with the retirement, repayment or rotation generally of patronage
capital certificates of the same class as the Patronage
Certificates, or (ii) that results from the actual dissolution of
NRTC."

NRTC has also agreed that the Debtors' Patronage Certificates will
not be subject to discriminatory treatment, subordination or
distribution rights which are in any way inferior to other like
patronage capital certificates held by other NRTC patrons,
including by means of amendment to NRTC's Articles of
Incorporation or bylaws.  NRTC has also agreed to return to the
Debtors the $59,000,000 letters of credit issued for the Debtors'
account and delivered to NRTC that secures payment of amounts due
under the Member Agreements.

Finally, the Debtors will receive from the Pegasus Non-Debtors a
general release of all claims, except for claims arising after the
Petition Date including postpetition claims under the Support
Services Agreement.  These releases will include Pegasus
Communications Corporation's prepetition claims for $28,100,000,
due under a promissory note issued by Pegasus Satellite
Communications and other inter-company receivables due from the
Debtors.

                          Satellite Assets

The Debtors' Satellite Assets to be acquired by DIRECTV will
include:

    (a) all Subscriber Information;

    (b) all DIRECTV equipment and any rights to bill and collect
        from Subscribers for non-return fees in connection with
        DIRECTV equipment;

    (c) all rights to bill and collect from Subscribers for early
        termination or disconnect fees;

    (d) documents as specified in the Asset Purchase Agreement;

    (e) the leases, if any, set forth in the Asset Purchase
        Agreement, together with all improvements, fixtures and
        other appurtenances to real property subject to the
        Purchased Facility Leases and rights in respect thereof;

    (f) the furniture and equipment;

    (g) the Member Agreements, the Seamless Agreement and the
        contracts set forth in the Asset Purchase Agreement;

    (h) all rights to receive cash patronage from NRTC in an
        amount up to the Patronage Amount, with respect to the
        periods commencing January 1, 2003 and ending on the
        Closing Date, whenever those amounts may be distributed by
        NRTC, excluding rights to Patronage Certificates or future
        cash distributions, if any, under Patronage Certificates;

    (i) all accounts receivable and unearned revenue of the
        selling Debtors as of the Closing Date that relate to the
        DBS business;

    (j) all rights under certain confidentiality agreements or
        under non-disclosure or confidentiality, non-compete or
        non-solicitation agreements with any employees that may be
        hired by DIRECTV;

    (k) to the extent transferable, all "1-800" telephone numbers
        owned or used by the Debtors in connection with the
        operation of the DBS business; and

    (l) any other asset, property or right existing on the closing
        date of the transactions contemplated by the Asset
        Purchase Agreement to the extent and in the amount that
        asset, property or right is included in calculating the
        Final Net Working Capital Amount.

                       Cooperation Agreement

In addition, Mr. Keach continues, the Debtors and DIRECTV have
entered into a Cooperation Agreement, which prescribes:

    -- the manner in which the Debtors will cooperate and assist
       with the transition of subscribers to DIRECTV;

    -- the undertaking of DIRECTV to reimburse certain costs
       incurred by the Debtors in connection with the transition;
       and

    -- the terms under which DIRECTV will provide DBS services to
       the Debtors after August 31, 2004, if necessary, in the
       event that there is no closing of the Satellite Assets sale
       by that date.

A copy of the Cooperation Agreement is available at no charge at:

    http://bankrupt.com/misc/Pegasus_Cooperation_Agreement.pdf

The Debtors have agreed to dismiss all pending litigation
involving DIRECTV and NRTC including the Adversary Proceeding,
certain California litigation and the Seamless Marketing
Litigation appeal.  Furthermore, the Debtors will release DIRECTV
and NRTC, and DIRECTV and NRTC will release the Debtors, from any
and all claims arising at any time prior to the effective date of
the Settlement, except for claims in respect of the Settlement and
certain other retained claims.  The Debtors have also agreed to
pay the prepetition and postpetition amounts due DIRECTV and
NRTC under the Seamless Agreement and the Member Agreements,
respectively, at the closing of the Satellite Assets sale and as
an adjustment to the purchase price pursuant to the Asset
Purchase Agreement.  The Debtors estimate that the amounts due to
DIRECTV and NRTC under the Seamless Agreement will aggregate
$17,500,000 and under the Member Agreements $146,000,000, as of
August 31, 2004.

                Pegasus Non-Debtors Letter Agreement

The Debtors cannot realize the benefits of the Settlement without
the participation and support of the Pegasus Non-Debtors.  As a
condition to the Settlement, DIRECTV and NRTC have required a
release of claims from all Pegasus entities including the Pegasus
Non-Debtors.  Moreover, without support services from the Pegasus
Non-Debtors, the Debtors cannot meet their obligations to DIRECTV
to maintain the integrity of the DBS business prior to closing and
provide the cooperation and support envisioned by the
Cooperation Agreement.

Pegasus Communications Corporation and the Committee agreed on the
terms on which the Pegasus Non-Debtors would join the Settlement
and, concurrently with the Settlement Agreement, entered into the
letter agreement.  The Settlement Agreement and the Letter
Agreement together embody a broad-based resolution of the Pegasus
Non-Debtors' relationships with the Debtors, which includes:

    (1) Mutual Releases.  The Pegasus Non-Debtors will release the
        Debtors from all claims excluding claims arising after the
        Petition Date.  The Debtors will release the Pegasus Non-
        Debtors from all claims but excluding claims under the
        Support Services Agreement.  In addition, certain members
        of the Committee will release the Pegasus Non-Debtors from
        all claims related to the Debtors, DIRECTV, and NRTC.

    (2) Support Services.  The Committee has agreed not to object
        to the payment to Pegasus Communications Management
        Company for services provided or expenses incurred
        pursuant to the Cooperation Agreement or the allocation to
        the Debtors of liability for those payments in accordance
        with the Support Services Agreement.  The Committee has
        also agreed to support an employee retention plan on the
        terms outlined in the Letter Agreement, which includes
        PCMC employees who provide services to the Debtors' DBS
        business.

    (3) Sale of the Broadcast Assets.  The Committee and Pegasus
        Communications Corporation have agreed in principal on a
        sale to Pegasus Communications Corporation of the Debtors'
        broadcast television assets.  The Letter Agreement
        provides for an all cash purchase price of $75,000,000
        subject to higher and better offers, with no break up fee
        but reimbursement of out-of-pocket expenses, not to exceed
        $1,000,000.  The agreement includes certain auction
        procedures and a timeline that contemplates completion of
        the auction and sale in October of this year.  This
        agreement provides the Debtors a clear path to completion
        of a reorganization plan reasonably promptly following the
        sale of the DBS assets.  Because Pegasus Communications
        Corporation is intimately familiar with these assets and
        has little timing risk on receiving required Federal
        Communications Commission approvals, it is well situated
        to provide the negotiated floor bid, subject to higher and
        better offers, which it has agreed to do without a break-
        up fee.

A copy of the Letter Agreement is available at no charge at:

    http://bankrupt.com/misc/Pegasus_Letter_Agreement.pdf

DIRECTV and NRTC cannot achieve a global settlement of claims
related to the Debtors' DBS business without a release from the
Pegasus Non-Debtors.  Accordingly, DIRECTV and NRTC have required
from the Pegasus Non-Debtors a release of all matters relating to
the Debtors' DBS business and a commitment not to engage in any
further litigation that would adversely affect the implementation
of the Agreements.  The Pegasus Non-Debtors are also required to
support the Settlement.

By joining the Settlement Agreement, the Pegasus Non-Debtors
satisfy a necessary condition to the Settlement, and in that way
provide a critical benefit to the Debtors.  The terms on which
they have agreed to do so provide additional benefits to the
Debtors, including the release of $28,100,000 in prepetition
claims.

                   Settlement Should be Approved

Without question, Mr. Keach says, the Settlement is the product of
arm's-length negotiations among the parties, and DIRECTV is a good
faith purchaser of the Satellite Assets and is entitled to
protections under Section 363(m) of the Bankruptcy Code.  The
Debtors believe that the compromises embodied in the Settlement
are fair and reasonable and constitute the best obtainable
results.

Accordingly, the Debtors seek the permission of the U.S.
Bankruptcy Court for the District of Maine to enter into and
perform the Settlement Agreement, the Asset Purchase Agreement and
the Cooperation Agreement.

Headquartered in Bala Cynwyd, Pennsylvania, Pegasus Satellite
Communications, Inc. -- http://www.pgtv.com/-- is a leading
independent provider of direct broadcast satellite television.
The Company, along with its affiliates, filed for  chapter 11
protection (Bankr. D. Me. Case No. 04-20889) on June 2, 2004.
Larry J. Nyhan, Esq., James F. Conlan, Esq., and Paul S. Caruso,
Esq., at Sidley Austin Brown & Wood, LLP, and Leonard M. Gulino,
Esq., and Robert J. Keach, Esq., at Bernstein, Shur,
Sawyer & Nelson, represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they listed $1,762,883,000 in assets and $1,878,195,000
in liabilities. (Pegasus Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


PEMSTAR INC: Taps Grant Thornton LLP as New Independent Auditors
----------------------------------------------------------------
PEMSTAR, Inc., (Nasdaq:PMTR) a leading provider of global
engineering, product design, manufacturing and fulfillment
services to technology, industrial and medical companies,
appointed Grant Thornton LLP, the fifth-largest United States
accounting firm, as its independent audit firm.  The new auditor
replaces PEMSTAR's previous firm, Ernst & Young LLP.

"We look forward to working with Grant Thornton, particularly
because the firm brings such a wide range of national,
international and industry-related experience," said Al Berning,
chairman, president and CEO, PEMSTAR.  "Our audit committee worked
diligently to select Grant Thornton as our new audit firm and I am
very confident in this new selection and look forward to an
excellent working relationship."

Grant Thornton will begin its new engagement starting with the
review of PEMSTAR's quarterly results for the period ended
September 30, 2004.

                           About PEMSTAR

PEMSTAR Inc. -- http://www.pemstar.com/-- provides a
comprehensive range of engineering, product design, manufacturing
and fulfillment services to customers on a global basis through
facilities strategically located in the United States, Mexico,
Asia, Europe and South America.  The company's service offerings
support customers' needs from product development and design,
through manufacturing to worldwide distribution and aftermarket
support.  PEMSTAR has over one million square feet in 16 locations
worldwide.

                         *     *     *

                  Liquidity and Capital Resources

In its Form 10-Q for the period ended June 30, 2004, filed with
the Securities and Exchange Commission, Pemstar, Inc. reports:

"The Company has historically funded its operations from the
proceeds of bank debt, private offerings of debt, private and
public offerings of equity, cash generated from operations and
lease financing of capital equipment.  Our principal uses of cash
have been to finance working capital, acquisitions, new
operations, capital expenditures and to fulfill debt service
requirements. We anticipate these uses will continue to be our
principal uses of cash in the future.

"Our continued viability depends on our ability to generate
sufficient cash from operations or obtain additional sources of
funds for working capital.  Our ability to maintain sufficient
liquidity depends, in part, on our achieving anticipated revenue
targets and manage costs.  We believe that as a result of:

      1) actions planned in fiscal 2005 to reduce cash
         expenditures,

      2) the efforts we continue to make to increase revenues from
         continuing customers, as well as efforts to generate new
         customers in various industry sectors, and

      3) adjustments in fiscal 2004 and 2005 to our credit
         facilities, which provided additional borrowing capacity,
         we have sufficient cash flow to meet our needs for the
         remainder of fiscal 2005.

"We may not achieve these targets or realize the intended expense
reductions.  If our operating goals are not met, we may be
required to secure additional waivers of any resulting covenant
violations under existing lending facilities, secure additional
financing from lenders or sell additional securities.

"We regularly review acquisition and additional facilities
expansion or joint venture opportunities, as well as major new
program opportunities with new or existing customers, any of which
may require us to sell additional equity or secure additional
financing in order to fund the requirement.  The sale of
additional equity could result in additional dilution to our
shareholders. We cannot be assured that financing arrangements
will be available in amounts or on terms acceptable to us."


PG&E NATIONAL: Deanli Offers $558 Million for IPP Portfolio
-----------------------------------------------------------
Paul M. Nussbaum, Esq., at Whiteford, Taylor & Preston, LLP, in
Baltimore, Maryland, relates that one facet of National Energy &
Gas Transmission, Inc.'s generation business segment is comprised
of generating facilities that sell all or a majority of their
electrical capacity and output to one or more third parties
pursuant to long-term contracts and often to the electric utility
company in whose service territory they are located.  These plants
are generally referred to as "independent power producers."

According to Mr. Nussbaum, NEG holds interests in IPPs through
three indirect wholly owned subsidiaries:

   * National Energy Power Company, LLC,
   * Plains End, LLC, and
   * Madison Windpower, LLC

NEGT Power retains ownership of the subsidiaries, which hold
interests in various IPPs and many of their related operations and
maintenance and management contracts that support those assets.
NEGT Power also indirectly holds a 5% interest in the
Iroquois Gas Transmission System, an interstate gas pipeline.
Madison is a merchant windpower facility in Madison County, New
York, and Plains End is an intermediate/peaking facility near
Denver, Colorado.

The IPP Portfolio represents a net ownership interest of 1,243
megawatts of generating assets, the majority of which are operated
under long-term power purchase contracts.

When NEG first filed its reorganization plan, NEG contemplated
that it would reorganize and continue to conduct its business as a
holding company with its various subsidiaries remaining in the
NEG corporate family and continuing to operate their businesses in
the ordinary course.  The original reorganization plan proposed
satisfaction of the NEG creditors' claims through the cancellation
of existing equity interests in NEG, and a ratable distribution of
new debt and 100% of the equity in NEG to NEG's unsecured
creditors.  Subsequently, NEG, with the advice of its financial
and legal advisers and after consultation with the Official
Committee of Unsecured Creditors of NEG and the Official
Noteholders Committee and their professionals, found it
appropriate to assess whether a sale of NEG's primary businesses
and assets -- specifically, NEG's ownership interests in its IPP
Portfolio and its pipeline businesses -- would yield greater value
to the creditors than that anticipated to be received had NEG
remained a stand-alone business that continued to own these
businesses and assets.

                     The Marketing Process

In November 2003, Lazard Freres & Co., NEG and NEGT Power's
financial advisors, initiated a competitive sale process for NEG's
Equity Interests in its IPP Portfolio.  As part of the marketing
process, a comprehensive confidential information memorandum was
prepared and distributed to all potential bidders that executed a
confidentiality agreement with NEG.  NEG also established a data
room that contained all relevant documents bearing on the
transaction, and provided to the bidders an extensive amount of
data room information on compact discs, so that interested parties
could conduct comprehensive due diligence.

NEG and Lazard contacted 65 strategic and financial buyers
potentially interested in purchasing the Equity Interests.  Of the
65 potential buyers, 31 executed confidentiality agreements and
certain of the parties engaged in due diligence for purposes of
formulating a proposal.  As part of the due diligence process,
NEG and its legal and financial advisers conducted, responded to,
and addressed numerous due diligence meetings, questions and
requests for additional information.

           NEG Takes Denali Power's Stalking Horse Bid

On July 23, 2004, after nearly eight months of extensive arm's-
length negotiations, NEG, NEGT Energy Company, LLC, entered into
an Equity Purchase Agreement with Denali Power, LLC.  Pursuant to
the Purchase Agreement, Denali Power will purchase all of the
issued and outstanding equity interests of NEG's IPP Portfolio for
$558,000,000.  The Purchase Price is inclusive of a $46,000,000
loan to Beale Generating Company, a newly formed limited liability
company, wholly owned and directed by NEGT Power.

Denali Power is a company formed by affiliates of ArcLight
Capital Partners, LLC, and Caithness Energy, LLC, to acquire
NEG's equity interests in 12 power plants located throughout the
country, and a natural gas pipeline.

                  The Equity Purchase Agreement

The salient terms of the Equity Purchase Agreement are:

(A) Equity Interests

    All of the issued and outstanding equity interests of NEGT
    Power, Plains End and Madison, free and clear of any
    Encumbrances.

(B) Purchase Price

    The purchase price for the Equity Interests will be equal to
    $558,000,000, inclusive of the Beale Loan, and subject to
    certain purchase price adjustments, plus the assumption of
    all of NEGT Power's allocable portion of the outstanding
    long-term debt at the level of the projects.  In addition,
    all working capital, amounting to $98,000,000 as of
    December 31, 2003, at NEGT Power, Power Services Company, a
    wholly owned subsidiary of NEGT Power, and other non-project
    subsidiaries of NEGT Power will be available to be swept to
    and retained by NEGT Power by the closing or consummation of
    the transaction.

(C) Beale Loan

    Denali Power will make the Beale Loan at the Closing.  The
    Beale Loan will be non-recourse to NEGT Power.  In the event
    Beale and certain of its corporate subsidiaries are converted
    to limited liability companies within six months after the
    Closing, NEG and NEGT Power will be entitled to an additional
    $100,000,000 of cash consideration -- $46,000,000 of which
    will be used to repay the Beale Loan in full -- resulting in
    aggregate net proceeds to NEG and NEGT Power of $608,000,000,
    subject to certain purchase price adjustments.  In the event
    Beale and its subsidiaries are not converted to LLCs within
    six months after the Closing, NEG and NEGT Power will be
    entitled to an additional $50,000,000 of cash consideration
    -- $46,000,000 of which will be used to repay the Beale Loan
    in full -- resulting in aggregate net proceeds to NEG and
    NEGT Power of $558,000,000, subject to certain purchase price
    adjustments.

(D) Purchase Price Adjustment

    The Purchase Price is subject to reduction:

    (a) for distributions from the projects to NEGT Power and its
        upstream affiliates from January 1, 2004 to the Closing
        Date;

    (b) for payments required to be made to partners under
        Section 708 of the Internal Revenue Code;

    (c) to account for the sale of the equity interests of
        Larkspur Power Corporation, an indirect wholly owned
        subsidiary of NEG, in Hermiston Generating Company, LP;

    (d) for the $12,750 Per Diem Operation and Maintenance -- O&M
        -- Margin Amount -- from January 1, 2004 to the Closing
        Date;

    (e) to account for the transfer of NEGT Power's interests in
        Raptor Holdings Company; and

    (f) for certain costs associated with the replacement of a
        transformer at the Carneys Point cogeneration facility,
        including capital costs and lost energy margin.

(E) Deposit

    Denali Power will deposit into an escrow account $15,000,000,
    which is equal to 2.7% of the Purchase Price.

(F) Escrow

    At Closing, Denali Power will deposit a portion of the
    Purchase Price into the escrow account:

    (a) $5,000,000 will be deposited to cover adjustments, if
        any, to the Purchase Price;

    (b) These amounts will be deposited to cover NEGT Power's
        indemnification obligations:

        -- An amount not to exceed $5,000,000 in respect of
           certain specified employee claims involving former
           Power Services employees;

        -- $2,500,000 in respect of claims involving or against
           US Operating Services Holdings, Inc., or any of its
           subsidiaries arising after execution of the Equity
           Purchase Agreement;

        -- An amount to be determined at Closing representing all
           claims asserted by PG&E Corporation against any
           company being acquired by Denali Power relating to
           reimbursements for certain wages and employee benefits
           allegedly provided by PG&E Corp. on Power Services'
           behalf; and

        -- An amount determined within 45 days of the Closing
           representing Denali Power's estimate of possible
           future claims to be asserted by PG&E Corp., if any.
           However, if the amount of the Unasserted PG&E Corp.
           Claims Escrow Amount is estimated by Denali Power to
           be greater than $10,000,000, NEG and NEGT Power will
           have the right to terminate the Equity Purchase
           Agreement with no obligation to pay to Denali Power
           a $15,000,000 break-up fee or any expense
           reimbursement -- other than the initial $2,000,000
           reimbursement already funded; and

    (c) An amount determined pursuant to a scheduled formula
        which has been agreed to between the parties in
        connection with the Carneys Point Costs, consisting of an
        Energy Escrow Amount and an EAF Escrow Amount.

    Each of the escrow amounts will be released or distributed,
    as applicable, in accordance with the terms of the Equity
    Purchase Agreement.

(G) Hermiston Sale

    NEGT Power and Larkspur are negotiating a purchase agreement
    with Sumitomo Corporation, Sumitomo Corporation of America
    and Perennial Power Company, LLC, for the sale of Larkspur's
    interests in Hermiston.

    (a) In the event that the Hermiston Purchase Agreement is
        entered into by the parties and the contemplated
        transactions are consummated within 45 days before the
        Anticipated Closing Date under the Equity Purchase
        Agreement, the $558,000,000 Purchase Price will be
        reduced by $40,000,000.  Hermiston and Larkspur will be
        removed from the Equity Purchase Agreement in all
        respects; and

    (b) In the event the transactions contemplated by the
        Hermiston Purchase Agreement are not consummated within
        45 days before the Anticipated Closing Date, NEGT Power
        will not be entitled to consummate the transactions
        contemplated by the Hermiston Purchase Agreement until
        after the Closing Date.  At the Closing, NEGT Power and
        Denali Power will enter into a call agreement pursuant to
        which NEGT Power can require Denali Power to sell to NEGT
        Power the Hermiston Interests acquired by Denali Power
        under the Equity Purchase Agreement for $40,000,000,
        subject to certain adjustments.  NEGT Power may exercise
        the call option within 180 days after the Closing Date.

(H) Raptor Transfer

    Within 45 days before the Anticipated Closing Date, NEGT
    Power may transfer its interests in Raptor to any entity not
    being acquired by Denali Power.  If the Raptor Transfer is
    consummated within the required period:

    (a) the Base Purchase Price will be reduced by $18,500,000,
        subject to certain adjustments;

    (b) Raptor, Gray Hawk Power Corporation, NEGT Management
        Services Company, Cedar Bay Cogeneration, Inc., and Cedar
        Bay Generating Company, Limited Partnership will be
        removed from the Equity Purchase Agreement in all
        respects; and

    (c) At the Closing, NEGT Power and Denali Power will enter
        into a put agreement pursuant to which NEGT Power may
        require Denali Power to purchase all of the issued and
        outstanding capital stock of Raptor held directly or
        indirectly by NEGT Power or the Raptor assignee, for
        $18,500,000, subject to certain adjustments.  NEGT Power
        may exercise the put option within 365 days after the
        Closing Date.

(I) Conditions to Close

    Several various conditions specified in the Equity Purchase
    Agreement must be satisfied or waived for a party to
    agreement to be required to close.

Mr. Nussbaum assures Judge Mannes that the sale of NEG's IPP
Portfolio is supported by sound business justification.  Denali
Power's offer is fair and reasonable and was arrived at following
extensive bidding process and arm's-length negotiation.  The offer
is currently the best available in the relevant market.

Accordingly, NEG asks the U.S. Bankruptcy Court for the District
of Maryland to support its business judgment and approve the IPP
Portfolio sale to Denali Power, subject to higher or better
offers.

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


PJ REALTY INC: Case Summary & 9 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: P.J. Realty, Inc.
        46-52 Commercial Street
        Gloucester, Massachusetts 01930

Bankruptcy Case No.: 04-16763

Type of Business: The Debtor rents commercial space.

Chapter 11 Petition Date: August 17, 2004

Court: District of Massachusetts (Boston)

Judge: Carol J. Kenner

Debtor's Counsel: Stephen K. Fischer, Esq.
                  Metaxas, Norman & Pidgeon, LLP
                  900 Cummings Center, Suite 207T
                  Beverly, MA 01915
                  Tel: 978-927-8000
                  Fax: 978-922-6464

Total Assets: $1,101,695

Total Debts:  1,137,103

Debtor's 20 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Business Loan Center, Inc.    Mortgage (First)           $40,000
                              Secured Value:
                              $1,100,000

Atlantic Koam Trading Co.                                $20,000

D&B Bait, Inc.                                           $18,000

John J. Conneely                                         $18,000

Sullivan Construction                                    $18,000
Company, Inc.

D.F.C. International, Inc.                               $12,000

Mass Electric                 Judgment lien               $5,100

Envirobusiness, Inc.          Phase Assessment            $2,050

KeySpan Energy/Boston Gas                                 $1,863


POLO BUILDERS: Turns to Steven Holowicki for Financial Advice
-------------------------------------------------------------
Polo Builders, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Northern District of Illinois for
permission to employ Steven Holowicki as their financial
consultant in their chapter 11 cases.

The Debtors report that Mr. Holowicki was an employee of Polo
Builders and was previously engaged by the Company as an
independent accounting, finance and management consultant.

In this retention, Mr. Holowicki is expected to:

    a) assist in the preparation of the Debtors' schedules of
       assets and liabilities, statement of financial affairs,
       monthly operating reports to the U.S. Trustee,
       applications, motions, complaints, orders and other
       documents which are necessary in connection with the
       appropriate administration of the Debtors' cases; and

    b) perform any and all other financial services on behalf of
       the Debtors that may be required to aid in the proper
       administration of their estates.

Mr. Holowicki will charge the Debtors $75 per hour for his
services.  If his employment's approved, Mr. Holowicki is willing
to waive his $16,143 prepetition claim against the Debtors.

Headquartered in Villa Park, Illinois, Polo Builders is a general
contractor.  Polo Builders and its debtor-affiliates filed for
chapter 11 protection on June 23, 20004 (Bankr. N.D. Ill. Case No.
04-23758).  Steven B. Towbin, Esq., at Shaw Gussis Fishman Glantz
Wolfson & Towbin LLC, represents the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, it listed more than $10 million in assets and
debts.


PRIME HOSPITALITY: Blackstone Offers $790 Mil. to Buy Company
-------------------------------------------------------------
Prime Hospitality Corp. (NYSE: PDQ) had signed a definitive
agreement to be acquired by affiliates of The Blackstone Group for
$12.25 per share, a 42% premium to the closing price on
August 18, 2004.  The total value of the transaction, including
debt, is over $790 million.  Prime Hospitality Corp. controls
three hotel brands -- AmeriSuites, Wellesley Inns & Suites and
Prime Hotels and Resorts -- operating and franchising 256 hotels
with 33,605 rooms.  Of these hotels, it owns 112 comprising 14,183
rooms.

The Board of Directors of Prime approved the agreement in a
special meeting today.  The transaction is subject to shareholder
approval and other customary conditions and is expected to be
completed during the fourth quarter of 2004.

Blackstone plans to maintain the headquarters operations of Prime
Hospitality Corp. in Fairfield, New Jersey.  In addition,
Blackstone intends to convert 37 of the owned Wellesley Inns &
Suites, which were originally built as moderate price extended
stay hotels with kitchens, to one of its Extended Stay America
brands.

In making the announcement, Attilio Petrocelli, Chairman and Chief
Executive Officer of Prime, commented, "The Board of Directors is
pleased with the terms of this acquisition and believes it is in
the best interests of the Company's shareholders.  The Board is
especially grateful to the excellent team of associates in this
organization."

Jonathan D. Gray, Senior Managing Director of The Blackstone
Group, said, "We are excited to be acquiring Prime Hospitality.
Prime has an outstanding collection of properties, brands and
people.  We look forward to working with the organization, its
franchisees and owner/partners."

A special shareholder meeting will be announced soon to obtain
shareholder approval.

In connection with the transaction, Prime will commence a tender
offer and consent solicitation relating to its 8.375% Senior
Subordinated Notes due 2012 ($178.7 million principal amount
outstanding).  Details with respect to this tender offer and
consent solicitation will be set forth in tender offer documents,
which will be furnished in due course to holders of the Notes.

Bear, Stearns & Co., Inc., is serving as financial advisor to
Prime and Banc of America Securities LLC is serving as financial
advisor for Blackstone.  Bank of America's CMBS Capital Markets
Group is providing acquisition financing for the transaction.
Olshan Grundman Frome Rosenzweig & Wolosky LLP and Simpson Thacher
& Bartlett LLP acted as legal advisers to Prime and Blackstone,
respectively.

                  About The Blackstone Group

The Blackstone Group, a private investment firm with offices in
New York, London and Hamburg, was founded in 1985.  Blackstone's
Real Estate Group has raised five funds, representing over
$6 billion in total equity, and has a long track record of
investing in hotels and other commercial properties.  In addition
to Real Estate, The Blackstone Group's core businesses include,
Private Equity, Corporate Debt Investing, Marketable Alternative
Asset Management, Mergers and Acquisitions Advisory, and
Restructuring and Reorganization Advisory.  The Blackstone Group
can be accessed on the Internet at http://www.blackstone.com/

                 About Prime Hospitality Corp.

Prime Hospitality Corp., one of the nation's premiere lodging
companies, owns, manages, develops and franchises more than 250
hotels throughout North America.  The Company owns and operates
three proprietary brands, AmeriSuites(R) (all suites), PRIME
Hotels & Resorts(R) (full-service) and Wellesley Inns & Suites(R)
(limited service).  Also within Prime's portfolio are owned and/or
managed hotels operated under franchise agreements with national
hotel chains including Hilton, Sheraton, Hampton, and Holiday Inn.
Prime can be accessed over the Internet at
http://www.primehospitality.com/

                         *     *     *

                  Liquidity and Capital Resources

In its Form 10-Q for the quarterly period ended June 30, 2004,
filed with the Securities and Exchange Commission, Prime
Hospitality Corp. reports:

"The Company believes that the effect of inflation has not been
material during the six month periods ended June 30, 2004 and
2003.

"At June 30, 2004, we had cash and cash equivalents of $12.2
million.  We may utilize any excess cash flow to grow our brands
either through acquisitions or new construction, to retire debt
and/or repurchase shares.

"Our major sources of cash for the six months ended June 30, 2004
were operating cash flow of $9.9 million, borrowings of
$5.0 million, asset sales of $2.0 million, and proceeds from the
exercise of stock options of $2.0 million.  Our major uses of cash
during the period were debt payments of $11.0 million, and capital
expenditures of $5.7 million.

"As of June 30, 2004, we had borrowings of $30.0 million under our
Credit Facility at LIBOR +2.50%, or approximately 3.7%.
In July 2004, we paid down $10.0 million, reducing our borrowings
to $20.0 million.  The Credit Facility consists of a $125 million
revolving line of credit which expires in 2006 and is secured by
the equity interests of certain of Prime's subsidiaries.  The
Credit Facility contains loan covenants customary for a credit
facility of this size and nature, including but not limited to,
limitations on making capital expenditures, selling or
transferring assets, making certain investments (including
acquisitions), repurchasing shares and incurring liens.  In
addition, the Credit Facility requires that the Company must
maintain a debt to EBITDA ratio of 4.25 times and an EBITDA to
interest ratio of 2.50 times.  As of June 30, 2004, our debt to
last twelve months EBITDA ratio was 3.59 times, our EBITDA to
interest ratio was 3.39 times and the Company was in compliance
with these covenants.  However, there can be no assurance that the
Company will continue to be in compliance with these covenants."


QWEST: Inks 2-Yr. Communications Services Pact with Spirit Cruises
------------------------------------------------------------------
Qwest Communications International, Inc., (NYSE: Q) entered a
contract to provide Spirit Cruises, LLC with voice and data
services.  The two-year contract includes a Qwest private routed
network, which will prepare Spirit Cruises to add voice over
Internet protocol (VoIP) services, such as Qwest One Flex(TM), in
the future.

Spirit Cruises will use Qwest services to enhance its fleet and
customer service operations.  Operating lunch, dinner, sightseeing
and cocktail cruises from six U.S. ports year-round, Spirit
Cruises is committed to guest satisfaction by focusing on customer
service and providing a high-quality dining and entertainment
experience each and every time.

"Spirit Cruises is committed to providing our customers with a
memorable entertainment experience.  By enhancing our company's
communication services, customers will benefit from more reliable
access to Spirit's sales teams and customer service
representatives," said Steve Baskerville, director of information
technology at Spirit Cruises.

"Qwest is pleased to help Spirit Cruises plan for expanded VoIP
communications by building a private routed network," said
Clifford S. Holtz, executive vice president of Qwest's business
markets group.  "VoIP will help companies, such as Spirit Cruises,
to deliver better customer service and improve operational
performance."

                      About Spirit Cruises

Headquartered in Norfolk, Va., Spirit Cruises LLC is America's
largest harbor cruise company operating a fleet of 13 ships in six
port cities: Washington, D.C., Chicago, New York/New Jersey,
Boston, Philadelphia and Norfolk, Va. In addition to its Spirit
vessels, it operates Bateaux New York, the luxury glass dining
yacht that was selected in 2003 as the reception location for the
popular series, "Today Throws a Wedding" on NBC; Spirit Elite
Yacht Cruises, which are private charter vessels; and the Annabel
Lee, a replica paddlewheel showboat.  For more information, visit
Spirit Cruises online at http://www.spiritcruises.com/

               About Qwest Private Routed Networks

Qwest's Private Routed Network (PRN) solution consists of a
secure, managed, fully interoperable and scalable suite of global
IP-VPN services.  It is based on high-performance platforms
designed to minimize network management as well as operational and
financial burdens imposed by other wide area networking (WAN) and
security technologies.  The service includes Private Routed
Network ports, network layer features, Secure Remote Access,
multi-link point-to-point protocol (MLPPP) services, integrated
customer premises equipment (CPE) solutions, Network Management
Services (NMS) and the Qwest Control(TM) Web-based management
tool. The service is a network-based VPN solution utilizing
Internet protocol security (IPSec) that is designed for intra-
and/or inter-company communications.

                        About Qwest

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

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


RS GROUP: Inks $36 Million Value Guaranteed Vacations Acquisition
-----------------------------------------------------------------
RS Group of Companies, Inc. (f/k/a Rent Shield Corp.)(OTCBB:RSGC),
a provider of pass-through risk specialty insurance and
reinsurance products, has a signed letter of intent to acquire
Value Guaranteed Vacations, Inc., a privately held provider of an
innovative timeshare value protection program and a related person
of RS Group of Companies, Inc. RS Group of Companies will acquire
VGV for a total of $36 million in a combination of cash and stock.

VGV is expected to generate no less than $3 million of fee income
in the first 12 months subsequent to RSGC's intended acquisition
of the company, and exceeding $8 million annually thereafter. The
deal is expected to be completed by September 2004.

VGV -- http://www.vgvinc.com/-- has launched the first-of-its-
kind value guaranteed product through its VGV Club membership
program, which offers protection against the depreciation of
timeshare ownership interests. The VGV Club benefits include a
buy-back guarantee, an affinity credit card program and related
travel insurance products. The buy-back guarantee provides that 10
years after the date of purchasing a timeshare, the owner can
elect to receive a full return of the acquisition cost of the
timeshare including a return of the cost of the VGV guarantee in
exchange for the owner's timeshare interest.

Commenting on the announcement, John Hamilton, CEO of RS Group of
Companies, stated, "We believe VGV's timeshare value protection
program will revolutionize the sale and resale of timeshare
interests worldwide. Upon closing, this acquisition will provide
RS Group of Companies another opportunity to expand its global
presence within the insurance and reinsurance industry."

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

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

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

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

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

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

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

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

                  About RS Group of Companies, Inc.

RS Group of Companies, Inc. -- http://www.rsgc.com/-- has
developed and is implementing a strategy to design, structure and
sell a broad series of pass-through risk specialty insurance and
reinsurance platforms throughout North America.  In November 2003,
through its wholly owned subsidiaries, the Company introduced its
core pass-through risk solution, RentShield(TM) --
http://www.rentshieldexpress.com/-- a Residential Rental
Guarantee Program being offered to North America's $300 billion
residential real estate rental market.  It is estimated that there
are over 38 million rental units in the United States and Canada.
Rental Guarantee was first developed in Finland to provide surety
to residential property developers and is being used as an
extremely effective marketing tool in the United Kingdom for the
buy-to-let market.  It protects investments in the rental units by
receiving a guaranteed income on a certain timeline.

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


SECURUS TECH: Moody's Assigns B2 Rating to $150MM Senior Notes
--------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to the proposed
issuance of $150 million of Second-Lien Senior Notes due 2011 by
Securus Technologies, Inc., and confirmed the other various
ratings assigned on July 29, 2004:

   * Senior implied rating B2;
   * Issuer rating Caa1;
   * Speculative grade liquidity rating SGL-2;
   * $190 million Senior Notes due 2012 rating withdrawn; and
   * $150 million Senior Notes due 2011 assigned B2.

The rating on the newly proposed senior notes reflects the
incremental enhancements made to this level of the capital
structure from the originally proposed structure Moody's rated on
July 29, 2004.  In the current structure, the senior notes benefit
from the introduction of a more junior layer of debt in the form
of $40 million of 17% Senior Subordinated Notes due 2014
(unrated).  Coupon payments on this subordinated debt can only be
made from availability under the Restricted Payments clause in the
indenture to the Senior Notes (basically 50% of net income).

The addition of this subordinated debt behind the senior notes
will increase the total debt burden of the company over time as
these notes accrete, making deleveraging difficult and thus
potentially retarding ratings improvement.  Nonetheless, the
imposition of subordinated debt into a first loss position in the
capital structure improves the recovery prospects of the rated
senior notes compared to the original structure, in Moody's
opinion.

Additionally, while the senior notes will continue to benefit from
upstream guarantees from all the company's operating subsidiaries,
they will now also benefit from a second-lien on all the company's
assets (with the exception of accounts receivable and inventory),
behind the first-lien securing a $30 million working capital
facility (unrated).

Taken together, the reduction in amount of the senior notes to
$150 from $190 million, the introduction of $40 million of first-
loss absorbing subordinated notes, and the granting of a second-
lien security interest to the new senior notes, improve the credit
profile of this layer of debt warranting a B2 rating for these
$150 million of Senior Notes due 2011 compared to Moody's B3
rating on the originally proposed $190 million of Senior Notes due
2012.

As total debt in the capital structure is not changing, nor the
cash flow profile, Moody's is affirming our senior implied and
other ratings.  The ratings continue to reflect the large and
stable market for inmate telecommunications services and Securus
Technologies good market position as the largest independent
provider of inmate calling services.  The ratings also reflect the
low margins and the highly leveraged capital structure of the
company, pro forma for the transaction.  The $150 million of
senior notes, $40 million of subordinated debt along with a cash
equity contribution of $11 million, will be issued to finance the
merger of two inmate calling service providers, Evercom Systems
and T-Netix.

Based in Texas, Securus Technologies is an independent provider of
inmate telecommunications services to correctional facilities in
the US and Canada with LTM revenues of $353 million.


SER CORPORATION: Case Summary & 27 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: SER Corporation
        dba Galileo Restaurant
        fka Laboratorio Del Galileo
        fka Osteria Del Galileo
        1110 21st Street, NW
        Washington, DC 20036

Bankruptcy Case No.: 04-01249

Type of Business: The Debtor operates a restaurant.

Chapter 11 Petition Date: August 16, 2004

Court: District of Columbia (Washington, D.C.)

Judge: S. Martin Teel, Jr.

Debtor's Counsel: Darrell W. Clark, Esq.
                  Stinson, Morris & Hecker, LLP
                  1150 18th Street, NW, Suite 800
                  Washington, DC 20036-3816
                  Tel: 202-785-9100
                  Fax: 202-785-9163

Estimated Assets: $500,001 to $1 Million

Estimated Debts: $1 Million to $10 Million

Debtor's 27 Largest Unsecured Creditors:

Entity                                           Claim Amount
------                                           ------------
District of Columbia                                 $111,280
Office of Tax and Revenue

International Gourmet Foods                          $101,112

Sareen & Associates                                   $44,070

Cananwill, Inc.                                       $30,690

The Swedish Fish, Inc.                                $24,499

EuroGourmet                                           $24,356

Clever Ideas, Inc.                                    $23,338

American Express                                      $20,661

D'Artagnan                                            $20,489

Browne Trading                                        $18,670

Grappoli Imports, Ltd                                 $15,635

AM Briggs                                             $15,355

MLS                                                   $15,010

Central Parking System                                $14,000

American Energy Restaurant Equip.                     $12,622

Internal Revenue Service Insolvency Unit              $12,416

United Chairs, Inc.                                   $12,234

PARS Heating, Air                                      $7,272

Celink                                                 $7,038

Saforian                                               $6,981

DanSources Technical Services, Inc.                    $3,000

North American Import & Export                         $2,812

Global Resources, Inc.                                 $1,708

Verizon                                                  $376

T-Mobile                                                 $281

Broken Arrow                                             $259

Renfrew Paper Supplies                                   $188


SOLUTIA INC: Increase Price on Ascend & Vydyne Products by 10%
--------------------------------------------------------------
Solutia, Inc., (OTC Bulletin Board: SOLUQ) implemented a ten
percent price increase across all grades of Ascend(R) and
Vydyne(R) product families since August 15, 2004.  Sustained
increases in raw materials, transportation and energy costs, have
made this price increase necessary.

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


STRATUS TECH: Extends Amended 10.375% Debt Offering to Sept. 1
--------------------------------------------------------------
Stratus Technologies, Inc., extended its offer to exchange an
aggregate principal amount of $170,000,000 of its outstanding
10.375% Senior Notes due 2008 that were issued on November 18,
2003 for new 10.375% Senior Notes due 2008 that have been
registered under the Securities Act of 1933, as amended.

The current Exchange Offer, scheduled to expire at 5:00 p.m. EDT
on August 18, 2004, has been extended until 5:00 p.m. EDT on
September 1, 2004.  Tenders with respect to $170,000,000 aggregate
principal amount of the Old Notes, which represents 100% of the
total outstanding principal amount of the Old Notes, have been
received to date.

In addition, the Company have identified and are currently
reviewing certain customer transactions for which revenue was
recognized and reported in the consolidated financial statements
of Stratus Technologies International, S.a r.l. for fiscal 2004
and the first quarter of fiscal 2005.  The accounting issues
identified in these transactions relate to the timing of the
recording of revenue, and not whether the sales can be recorded as
revenue.  For these transactions, the products for which it has
recognized revenue have been delivered, are currently in use by
its customers in their operations and have either been paid for or
are expected to be paid for in the ordinary course.  The Company
is reassessing the appropriate periods in which the revenue for
these transactions should be recognized.  While it does not expect
this review to result in changes to historical cash flow, it is
likely that some or all of the revenue recorded for these
transactions in previous financial periods could be deferred to
future periods, thereby affecting the consolidated financial
statements of Stratus Technologies International, S.a r.l. for
fiscal 2004 and the first quarter of fiscal 2005 and resulting in
a restatement for those periods.

The Company is working with its internal auditors, Ernst & Young,
and independent auditors, PricewaterhouseCoopers, on this detailed
review of prior period revenue transactions, their potential
impact on revenue, cost of goods sold and inventory and the
Company's internal controls generally.

At this time, it does not have an anticipated date for the
completion of its review or the release of any appropriate
restated financial results.  Accordingly, pending completion of
this review, the consolidated financial statements of Stratus
Technologies International, S.a r.l. for fiscal 2004 and the first
quarter of fiscal 2005 should not be relied upon as an accurate
reflection of its financial results for these periods.

This announcement is not an offer to exchange, or a solicitation
of an offer to exchange, with respect to the Old Notes.  The
Exchange Offer is being made solely by a prospectus, dated July 7,
2004, and the Exchange Offer, as extended hereby, remains subject
to the terms and conditions stated therein.

                     About Stratus Technologies

Stratus Technologies is a global provider of fault-tolerant
computer servers, technologies and services, with more than 20
years of experience focused in the fault-tolerant server market.
Stratus(R) servers provide high levels of reliability relative to
the server industry, delivering 99.999% uptime or better.  Stratus
servers and support services are used by customers for their
critical computer-based operations that are required to be
continuously available for the proper functioning of their
businesses.

The company posted a $63.8 million stockholders' deficit at
May 31, 2004 compared to a $58.9 million deficit at
February 29, 2004.


THOMAS GROUP: Inks $5.5 Million Credit Facility with BofA
---------------------------------------------------------
Thomas Group, Inc., (OTCBB:TGIS) signed a new credit facility with
Bank of America, N.A. This new facility replaces the Company's
former senior lender, Comerica Bank.  Significant terms of the new
credit facility include:

   -- $5.5 million revolving line of credit

   -- Matures August 21, 2006

   -- Interest at prime, or LIBOR+2.5%

   -- Advances based on a percentage of eligible accounts
      receivable

Jim Taylor, President and Chief Executive Officer said, "This
alliance with Bank of America culminates nineteen months of
significant debt reduction for our Company.  Since the end of
2002, we have reduced our bank debt over 70% and reduced all debt
60%. This new line of credit will enable us to fund more revenue
growth and will give us the opportunity to pursue our business
model of profitable growth with more confidence and flexibility.
This flexibility will be particularly important as we expand
existing business relationships and penetrate industry and
governmental sectors not historically served by Thomas Group."

                       About Thomas Group

Thomas Group, Inc., is an international, publicly traded business
consulting firm (OTCBB:TGIS).  Thomas Group's unique brand of
process improvement and performance management services enable
businesses to enhance operations, improve productivity and
quality, reduce costs, free up cash and drive to higher
profitability.  Known as The Results Company(SM), Thomas Group
creates and implements customized improvement strategies for
sustained performance improvements in all facets of the business
enterprise.  Thomas Group has offices in Dallas, Detroit, Zug, and
Hong Kong.  For additional information on Thomas Group, Inc., go
to http://www.thomasgroup.com/

                         *     *     *

                      Liquidity Concerns

In its Form 10-Q for the quarterly period ended June 30, 2004,
filed with the Securities and Exchange Commission, Thomas Group,
Inc., reports:

"As a result of cash generated from operations, the Company
reduced its senior debt by $4.5 million in 2003 and another
$0.7 million through August 13, 2004.  The Company's ability to
reduce debt and generate cash from operations is due primarily to
cost saving measures including staff reductions, downsizing and
subleasing facilities and more aggressive collection policies.
However, recent operating results and the uncertainty of future
business development and growth strategies give rise to concerns
about the Company's ability to generate cash flow from operations
sufficient to make scheduled debt payments as they become due and
to remain in compliance with its restrictive loan covenants.

"The Company's need to raise additional equity or debt financing
and its ability to generate cash flow from operations sufficient
to make scheduled payments on its debts as they become due will
depend on its future performance and in particular, its ability to
successfully implement business and growth strategies.  In
addition, the Company is seeking financing alternatives to replace
its current senior lender, as well as continuing the evaluation of
the business on a daily basis to enhance its liquidity position.
Such evaluation includes appropriate furlough of its unassigned
workforce, staff reductions and the downsizing or subleasing of
facilities when necessary.

"The Company's performance will also be affected by prevailing
economic conditions.  Many of these factors are beyond the
Company's control.  The Company currently seeks business
opportunities in the European, Asia/Pacific and North American
regions and is affected by prevailing economic conditions in these
regions.  In addition, recent conflicts throughout the world
involving the United States military could potentially have an
adverse affect on the Company's liquidity due to the high
concentration of United States government contracts, which could
result in delays in program operations.  If future cash flows and
capital resources are insufficient to meet the Company's debt
obligations and commitments, the Company may be forced to reduce
or delay activities and capital expenditures, obtain additional
equity capital or restructure or refinance its debt.  In the event
the Company is unable to do so, the Company may be left without
sufficient liquidity and it may not be able to meet its debt
service requirements.  In such case, an event of default would
occur under the credit facility and could result in all of the
Company's indebtedness becoming immediately due and payable.  As a
result, the Company's senior lender would be able to foreclose on
the Company's assets."


TRANSPORTATION TECH: S&P Awaits IPO & Puts B Ratings on Watch
-------------------------------------------------------------
Standard & Poor's Ratings Services' 'B' corporate credit and other
ratings on Transportation Technologies Industries, Inc., remain on
CreditWatch with positive implications.  The ratings were placed
on CreditWatch on May 5, 2004, following Transportation
Technologies' announcement of plans for an IPO of common stock and
the usage of proceeds to reduce debt and redeem preferred stock.
At March 31, 2004, the Chicago, Illinois-based casting company had
total debt (including the present value of operating leases) of
$336 million.

Transportation Technologies recently postponed its planned IPO due
to unfavorable market conditions.  The company expects to generate
net proceeds from the IPO of about $121 million to be used, along
with $23 million borrowed under the second-lien senior secured
credit facility, to redeem about $53 million of preferred stock
and about $92 million of senior subordinated exchange notes.  Pro
forma for the IPO, total debt is expected to decrease by about
$60 million.  As a result of the reduction in debt burden as well
as a strong heavy-duty truck build rate, total debt to EBITDA is
expected to be about 4x and EBITDA to interest coverage is
expected to reach 2x in 2004, stronger than Standard & Poor's
current expectations.

"Upon consummation of the IPO and the reduction of debt, Standard
& Poor's will raise Transportation Technologies' corporate credit
and senior secured bank loan ratings to 'B+', and second-lien term
loan and subordinated debt ratings to 'B-'," said Standard &
Poor's credit analyst Heather Henyon.  At the new rating, total
debt to EBITDA is expected to average 4x-4.5x and EBITDA to
interest coverage is expected to be about 2x through the business
cycle.

"However, if the IPO is not completed, Standard & Poor's would
review Transportation Technologies' recent financial performance
and likely affirm the 'B' corporate credit rating while removing
the ratings from CreditWatch," the analyst continued.

Transportation Technologies manufactures components for medium-
and heavy-duty trucks, buses, and specialty vehicles.  Products
include wheel-end components, iron castings, truck body and
chassis parts, seating systems and steerable drive axles, with
leading market positions in their respective niches.  However, the
casting industry is fragmented, highly capital-intensive, and
subject to volatile demand, customer pricing pressures, and
fluctuations in raw material pricing.  The company benefits from a
competitive cost structure, full product offering, and long-
standing customer relationships.


UNIFLEX: Committee Hires Young Conaway as Bankruptcy Co-Counsel
---------------------------------------------------------------
The Official Unsecured Creditors Committee appointed in Uniflex,
Inc.'s chapter 11 case, asks the U.S. Bankruptcy Court for the
District of Delaware for authority to employ Young Conaway
Stargatt & Taylor, LLP, nunc pro tunc to July 1, 2004, as its co-
counsel.

Young Conaway will:

    a) advise and consult with the Committee concerning legal
       questions arising in the administration of the Debtor's
       estate and the Committee's rights and remedies in
       connection with this case;

    b) assist the Committee in preserving and protecting the
       Debtor's estate;

    c) consult with the Debtor on behalf of the Committee
       concerning the administration of the case;

    d) prepare any pleadings, motions, answers, notices, orders
       and any reports that are required for the protection of
       the Committee's interests and the orderly administration
       of the Debtor's estate; and

    e) perform any and all other legal services for the
       Committee which are necessary and appropriate to
       faithfully discharge its duties.

Young Conaway will coordinate with Lowenstein Sandler, PC in order
to avoid any duplication of services in representing the
Committee.

The attorneys designated to represent the Committee are:

            Professionals         Billing Rate
            -------------         ------------
            Michael R. Nester     $385 per hour
            Joseph M. Barry       $295 per hour

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

Headquartered in Hicksville, New York, Uniflex, Inc. --
http://www.uniflexbags.com/-- makes custom-printed plastic bags
and other plastic packaging for promotions and advertising.  The
Company filed for chapter 11 protection on June 24, 2004 (Bank.
Del. Case No. 04-11852).  Peter C. Hughes, Esq., at Dilworth
Paxson LLP represents the Debtor in its restructuring efforts.
When the Company filed for protection from its creditors, it
listed both estimated debts and assets of over $10 million.


UNITED AIRLINES: Extends Starbucks Relationship in 3-Year Pact
--------------------------------------------------------------
Starbucks Coffee Company (Nasdaq: SBUX) and United Airlines
extended their successful relationship with a new three-year
supply and cooperative marketing agreement under which
Starbucks(R) coffee will continue to be the exclusive coffee for
United Airlines and Ted flights worldwide.

The first collaboration under the new agreement will appear in
September, when United presents a poignant in-flight entertainment
program based on Ray Charles Genius Loves Company - a set of
recordings jointly released by Starbucks, through its Hear Music
brand, and Concord Records.  The final recordings of Ray Charles'
career, the performances feature Ray Charles singing with several
of his favorite artists, including Natalie Cole, Elton John, Norah
Jones, B.B. King, Gladys Knight, Diana Krall, Michael McDonald,
Johnny Mathis, Van Morrison, Willie Nelson, Bonnie Raitt, and
James Taylor.

United's in-flight video entertainment will include a half-hour
program that will virtually put passengers in the recording studio
for the making of the album - allowing viewers to experience
interviews and performances from the recording sessions.
Additionally, United's audio entertainment in September will
feature the entire CD interspersed with interviews by artists
appearing on the recording.  The CD will be available at
participating Starbucks stores nationwide during September.

"We are delighted to extend and expand our relationship with
Starbucks, the premium coffee retailer in the world," said Glenn
Tilton, Chairman, CEO and President of United.  "Starbucks coffee
and our excellent onboard service are two of the reasons why our
customer satisfaction ratings are at historically high levels.
It's time for this partnership to fly."

"Since 1996, we've been proud to serve Starbucks coffee to
millions of customers on United flights around the world, and we
look forward to continuing and broadening our relationship by
taking it to another level," said Howard Schultz, chairman of
Starbucks.  "By sharing this touching video of Ray Charles and the
artists that performed with him in his final recording sessions,
we hope to pay tribute to Mr. Charles' legacy and provide a
glimpse of the innovative programs that will give travelers yet
another reason to fly United."

In the future, Starbucks and United will continue to develop co-
marketing strategies and explore promotional opportunities that
could include in-flight entertainment, new coffee lines onboard
United flights, and promotion of Starbucks to United Mileage Plus
members around the world.

                          About Starbucks

Starbucks Corporation is the leading retailer, roaster and brand
of specialty coffee in the world, with more than 8,000 retail
locations in North America, Latin America, Europe, the Middle East
and the Pacific Rim.  The Company is committed to offering the
highest quality coffee and the Starbucks Experience while
conducting its business in ways that produce social, environmental
and economic benefits for communities in which it does business.
In addition to its retail operations, the Company produces and
sells bottled Frappuccino(R) coffee drinks, Starbucks
DoubleShot(TM) coffee drink, and a line of superpremium ice creams
through its joint venture partnerships.  The Company's brand
portfolio provides a wide variety of consumer products. Tazo Tea's
line of innovative premium teas and Hear Music's exceptional
compact discs enhance the Starbucks Experience through best-of-
class products.  The Seattle's Best Coffee(R) and Torrefazione
Italia(R) Coffee brands enable Starbucks to appeal to a broader
consumer base by offering an alternative variety of coffee flavor
profiles.

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.


URS CORP: Moody's Upgrades Senior Credit Facility Rating to Ba2
---------------------------------------------------------------
Moody's has upgraded URS Corporation's ratings to reflect the
company's reduced debt balances, improved credit metrics, and
expectations that revenues and margins will support further
improvement in the company's cash flows.  The company's rating
outlook has been changed from positive to stable.

Moody's has upgraded these ratings:

   * $225 million senior secured revolving credit facility, due
     2007, upgraded to Ba2 from Ba3;

   * $84 million senior secured term loan A, due 2007, upgraded to
     Ba2 from Ba3;

   * $270 million senior secured term loan B, due 2008, upgraded
     to Ba2 from Ba3;

   * $130 million 11.5% senior unsecured notes, due 2009, upgraded
     to Ba3 from B1;

   * $20 million 12.25% senior subordinated notes, due 2009,
     upgraded to B1 from B2;

   * Senior Implied, upgraded to Ba2 from Ba3;

   * Senior Unsecured Issuer, upgraded to Ba3 from B1;

   * Speculative Grade Liquidity Rating, upgraded to SGL-1 from
     SGL-2.

The ratings upgrade:

   (1) reflects the company's improved balance sheet;

   (2) strong operating performance; and

   (3) the expectation that the company's services will continue
       to enjoy stable demand.

In its third fiscal quarter, URS used the net proceeds of an
equity offering, cash on hand and additional borrowings under its
credit facility to redeem $70 million of its 11.5% senior notes
and $180 million of its 12.25% senior subordinated notes.  As a
result of these redemptions, the company's overall debt balance
decreased by over $180 million to about $594 million.  This is a
significant improvement over the $955 million debt balance at
October 31, 2002.  The company's ratings also benefit from:

   (1) a stable customer base;

   (2) recurring revenues;

   (3) a $3.9 billion backlog at April 30, 2004; and

   (4) expected increases in defense and homeland security
       spending.

The ratings are constrained by the challenges the company faces in
growing its state and local revenues due to state budget deficits
and delays in funding of state and local infrastructure projects.
Revenues from the company's private clients are also under
pressure due to reduced levels of capital spending and cost-
cutting measures by the company's private clients.  In 2002, URS
purchased EG&G for $500 million for a purchase multiple that
equates to just under 10 times its fiscal 2003's EBITDA.  This
acquisition transformed URS as EG&G represents around 32% of total
revenues.  Going forward, Moody's does not expect the company to
make large debt-financed acquisitions as URS has publicly stated
that it wants to maintain a debt to capitalization ratio below
40%.  A change in policy due to an acquisition or other
transaction, however, would pressure the ratings.  A decrease in
the company's revenues, operating margins and free cash flow
generation would also pressure the rating.

The stable ratings outlook reflects the expectation that the
company will benefit from continued growth in federal defense and
homeland security spending which will offset current weakness in
revenues from the state and local and private sectors.  A
significant slowdown in the company's accounts receivable
collection would likely pressure the company's rating outlook.
The company's accounts receivable at the end of April 30, 2004
totaled $885 million.  This compares with revenues of
approximately $3.2 billion in 2003.  An improvement in the
accounts receivable collections, continued stability of revenues,
and margin improvement will be important considerations in
determining whether an improvement in ratings outlook is
warranted.

The upgrade of the company's speculative grade liquidity rating to
SGL-1 reflects a strong projected liquidity profile over the next
twelve months.  The SGL-1 rating is based on the company's strong
free cash flow generation and low projected revolver utilization.
Moody's expects the company to have over $150 million of revolver
availability over the next twelve months and cash flow from
operations of over $100 million in 2005.  Cash on hand and cash
flows from operations should be sufficient to fund capital
expenditures and debt amortization requirements under the
company's bank facilities.  URS is expected to be in compliance
with its covenants during the remainder of 2004 and 2005.  These
covenants include a leverage ratio, fixed charge coverage ratio
and current ratio requirement.  As to its alternate liquidity,
Moody's believes the company has few, if any, non-core assets that
could be tapped for liquidity without affecting the company's core
business offerings.  The company's SGL-1 rating will be sensitive
to the company's ability to sustain its level of free cash flow,
ability to maintain adequate availability on its revolver and to
changes in the business climate and other factors.

For the last twelve months ended April 30, 2004 free cash flow to
total debt was about 15% and total debt to EBITDA was
approximately 3.4 times.  Projected fiscal year ended 2004 total
debt to EBITDA, excluding charges related to the debt redemptions,
should improve to around 2.3 times due to the debt redemptions in
the company's third fiscal quarter.  EBITDA coverage of interest,
excluding charges related to the debt redemptions in the third
fiscal quarter of 2004, for the last twelve months ended April 30,
2004 was around 2.9 times, is expected to be around 3.9 times for
the year ended 2004 and improve significantly in 2005 due to lower
interest expense that is to result from lower debt balances.  The
use of EBITDA and related EBITDA ratios as a single measure of
cash flow without consideration of other factors can be
misleading.

Based in San Francisco, California, URS Corporation is an
engineering firm that provides a range of professional planning,
design, program and construction management, and operations and
maintenance services. Revenues for the last twelve months ended
April 30, 2004 was approximately $3.3 billion.


US AIRWAYS: Katz's $1.147M Patent Infringement Claim Still Hanging
------------------------------------------------------------------
On May 15, 2003, Ronald A. Katz Technology Licensing, LP, filed
Claim No. 5639 in the chapter 11 cases of US Airways Group, Inc.,
and its debtor-affiliates for alleged patent infringement,
asserting an administrative expense priority claim for $1,147,595.
RAKTL filed Claim No. 5640, also for alleged patent infringement,
asserting a general unsecured prepetition claim for $12,896,816.

The Debtors assert that both Claims were unsubstantiated.  The
Debtors sought to expunge the Claims.

To settle the dispute, Mr. Katz and the Reorganized Debtors agree
that Claim No. 5640 is withdrawn.  Mr. Katz acknowledges that he
will not receive any distribution on account of Claim No. 5640.
Claim No. 5639 is not affected by the Stipulation. (US Airways
Bankruptcy News, Issue No. 59; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


VERITAS CLO: S&P Assigns BB Rating to Class E $8MM Secured Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Veritas CLO I Ltd./Veritas CLO I Inc.'s $282.5 million
floating-rate secured notes due Sept. 5, 2016.

The preliminary ratings are based on information as of
Aug. 18, 2004.  Subsequent information may result in the
assignment of final ratings that differ from the preliminary
ratings.  The preliminary ratings reflect:

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

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

   -- the experience of the collateral manager; and

   -- the legal structure of the transaction, which includes the
      bankruptcy remoteness of the issuer.

                  Preliminary Ratings Assigned
             Veritas CLO I Ltd./Veritas CLO I Inc.

      Class                  Rating        Amount (mil. $)
      -----                  ------        ---------------
      A                      AAA                   229.00
      B                      AA                     19.00
      C                      A                      16.00
      D                      BBB                    10.50
      E                      BB                      8.00
      Preference shares      N.R.                   25.25

      N.R. - Not rated.


VHJ ENERGY: Hires Moulton Bellingham as Special Counsel
-------------------------------------------------------
VHJ Energy, LLC., sought and obtained approval from the U.S.
Bankruptcy Court for the District of Wyoming to employ Moulton,
Bellingham, Longo & Mather, P.C., as its special counsel.

Moulton Bellingham will provide legal services to the Debtor in
connection with the District Court Litigation before the Sixth
Judicial District Court, Campbell County, Wyoming.

The professionals who will be principally engaged in the State
Court Litigation and their current hourly rates are:

         Professionals          Billing Rate
         -------------          ------------
         W.A. Forsyth           $210 per hour
         Michael E. Begley       150 per hour

Headquartered in Buffalo, Wyoming, VHJ Energy, is engaged in
methane gas production.  The Company filed for a chapter 11
protection on July 13, 2004, (Bankr. Wyo. Case No. 04-21360).
Paul Hunter, Esq., in Cheyenne, Wyoming represents the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed $239,745 in total assets and
$7,402,469 in total debts.


VIATICAL LIQUIDITY: Asks to Hire Alan Myers as Accountant
---------------------------------------------------------
Viatical Liquidity, LLC asks the U.S. Bankruptcy Court for the
Southern District of California for permission to employ Alan
Myers as its accountant.

Mr. Myers will:

    a. prepare the Debtor's Federal and California business
       income tax returs and informational returns as necessary;

    b. prepare the Debtor's mothly operating reports in this
       case;

    c. prepare any other tax or accounting services as may be
       needed throughout the administration of the estate; and

    e. provide tax research as necessary.

Mr. Myers and his staff will bill the Debtor at their customary
billing rates, which currently range from $110 to $175 per hour.

Headquartered in San Diego, California, Viatical Liquidity, LLC, a
company engaged in the insurance industry, filed for chapter 11
protection on June 18, 2004, (Bankr. S.D. Calif. Case No.
04-05472).  Gary B. Rudolph, Esq., at Sparber Rudolph Annen,
represents the Debtor in its restructuring efforts.  When the
Company filed for protection from its creditors, it listed
$119,083,608 in total assets and $47,538,071 in total debts.


VITRO: Moody's Junks $388 Million of Senior Notes
-------------------------------------------------
Moody's Investors Service downgraded the ratings for Vitro, S.A.
de C.V. reflecting the cumulative effects on Vitro's financial
profile of prolonged economic malaise combined with high natural
gas costs.

The resulting deficit to modest amount of free cash flow relative
to substantial total pension and securitization adjusted debt of
over $1.5 billion are well short of Moody's expectations.  The
downgrades also incorporate the likely continued pressure on
consolidated operating performance from macro-economic
uncertainties, which include potentially adverse movements in
currency (e.g. appreciation in the peso) and interest rates
affecting exports and interest expense for the significant amount
of floating rate consolidated indebtedness.  Persistent softness
in the performances of Glasswares and to a lesser extent Flat
Glass have muted efforts to show sustained improvement in margins
and free cash flow.

Additionally, the ratings reflect Moody's assessment of run-rate
financial performance and our view that expected loss in a default
scenario at Vitro has increased pro-forma for the $170 million
secured note issuance (rated B2) at its subsidiary, Vitro Envases
NorteAmerica -- VENA, and related debt repayment.

Despite the ratings adjustments, it will likely take time for the
ratings outlook to become firmly stable given the aforementioned
credit concerns.  Over the intermediate term, the ratings outlook
could benefit from significant improvement in free cash flow
relative to debt.  Conversely, decreases in profitability or
increased financial leverage could trigger a negative ratings
outlook.

The value ascribed to Vitro's leading position in its domestic
market and its strategic importance throughout Latin America,
precluded lower ratings.  The ratings also benefited from:

   (1) Vitro's steady commitment to focusing on core glass
       operations;

   (2) its proactive cost reduction efforts; and

   (3) improved fiscal management and transparency.

Moody's downgraded these ratings:

   * $225 million 11.750% senior note, due 2013, to Caa1 from B2;

   * $163 million 11.375% senior note, due 2007, to Caa1 from B2
     (original face value was $250 million before buy backs);

   * Senior implied lowered to B2 from B1; and

   * Senior unsecured issuer rating (non-guaranteed exposure)
     lowered to Caa1 from B2.

The ratings outlook is changed to stable from negative for prior
ratings.

Lowering the rating of the senior notes to Caa1 from B2 reflects
Moody's expectation of impairment in a distress scenario primarily
driven by reduced enterprise value relative to its substantial
consolidated total debt adjusted for receivables securitizations
and pension liabilities at over $1.5 billion.  The ratings of
these non-guaranteed holding company notes are two notches below
the B2 senior implied rating due to the structural and effective
subordination to sizable amounts of debt at the operating
companies.

Vitro, S.A. de C.V., through its subsidiaries, is a leading global
producer of glass serving multiple product markets including:

   -- construction and automotive lass;
   -- fiberglass;
   -- food and beverage;
   -- wine;
   -- liquor;
   -- cosmetics and pharmaceutical glass containers; and
   -- glassware for commercial, industrial and retail uses.

At LTM June 30, 2004, consolidated revenue was approximately
$2.2 billion, EBIT was approximately $160 million, and EBITDA was
approximately $370 million.


WASTE SERVICES: Bank Facility & Sub. Debt Get Moody's Junk Ratings
------------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Waste
Services, Inc.  These ratings were affected:

   * $160 million guaranteed senior secured credit facility due
     2011, downgraded to Caa1 from B1;

   * $160 million issuance of guaranteed senior subordinated notes
     due 2014, downgraded to Ca from Caa1;

   * Senior Implied Rating downgraded to Caa1 from B2; and

   * Senior Unsecured Issuer Rating downgraded to Caa3 from B3.

The outlook was changed to negative from stable.

The downgrade was prompted by:

     (i) the rapid decline over the last quarter in expected
         operating performance and cash generation;

    (ii) the company's impaired liquidity as evidenced by its
         technical default under its bank agreement; and

   (iii) doubts about the company's ability to support its high
         debt level given its negative free cash flow.

In addition, the current annualized levels of pro forma EBITDA (of
approximately $40 million) versus acquisition prices might suggest
future asset impairment.

Moody's continues to be concerned with the company's ability to
achieve planned volume and price growth in disposal assets as well
as the achievement of cost advantages to generate sufficient cash
to fund interest and capital expenditures.  Earnings have been
hurt by the delayed timing of permit approvals and start-up dates
for several facilities.  As many assets are still in a ramp-up
mode, Moody's believes there is further downside risk for cash
generation.

The ratings also reflect the market position of the Canadian
subsidiary, Canadian Environmental Resource, Inc., as the second
largest municipal solid waste company in Canada.

The negative outlook incorporates a number of event risks
including:

     (i) the achievement of the requested temporary waiver of the
         technical default from the bank group;

    (ii) the willingness of the banks to provide interim liquidity
         during the waiver period given the company's recent
         performance and in advance of receiving updated forecasts
         from the company; and

   (iii) whether the company will have sufficient liquidity to
         fund its October 15, 2004 interest payment on the
         subordinated notes of $7.6 million.

Lack of progress in any of these areas could lead to an immediate
downgrade.

The Caa1 rating on the senior secured credit facility reflects the
benefits and limitations of the security and guarantee package,
which heavily rely on the newly acquired US assets for asset
coverage and cash generation.  The credit facility consists of a
5-year, $60 million revolving credit facility, which includes a
US dollar tranche of $45 million and a Canadian dollar tranche of
$15 million.  There is also a 7-year $100 million term loan and
the provision for an additional $50 million term facility for
permitted acquisitions provided all compliance tests would be
satisfied with the additional borrowings.

The credit facilities are guaranteed by the pledge of the
restricted subsidiaries of Waste Services as well as by pledge of
sixty-five percent of the common shares of the first tier non-US
subsidiaries.

The Ca rating on the senior subordinated notes reflects the deep
subordination of the issuer to the prior claim on assets from the
senior debt of the company.  The rating also incorporates the
limited asset coverage from the guarantor assets in a distressed
scenario.  The notes are guaranteed by all US operating
subsidiaries.  The Canadian subsidiary, Capital Environmental
Resource, Inc., and its Canadian subsidiaries are restricted, non-
guarantor subsidiaries.

The risk of further subordination of the notes from increased debt
in Canada is somewhat mitigated by the terms of the indebtedness.
The proposed credit facility will restrict permitted indebtedness
at the foreign entities to the proposed $15 million Canadian
revolver plus a $12 million basket for acquisitions.  The bond
indenture limits foreign permitted indebtedness to the $15 million
proposed revolver plus a general basket of $30 million.

Waste Services, Inc., based in Phoenix, Arizona, is a solid waste
services company.  The company's wholly owned subsidiary, Canadian
Environmental Resource, Inc., operates in Canada and is the second
largest service provider in that country by revenue (after Waste
Management) with revenues in 2003 of $126 million.  In 2003, the
company initiated a disposal-based growth strategy to enter the
United States via its then Delaware subsidiary, Waste Services,
Inc.  The company recently completed a corporate migration to the
U.S.


WASTE SERVICES: S&P Cuts Bank Loan Rating to B- & Junks Sub. Debt
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior secured bank loan ratings on Waste Services, Inc., to
'B-' from 'B+' and its senior subordinated debt rating to 'CCC'
from 'B-'.

At the same time, Standard & Poor's placed all these ratings on
CreditWatch with negative implications.  Scottsdale, Arizona-based
Waste Services had approximately $320 million of total debt,
including mandatorily redeemable preferred stock, outstanding at
June 30, 2004.

The downgrade and CreditWatch listing reflect concerns regarding
Waste Services' weaker-than-anticipated financial performance and
liquidity position, following the announcement that operating
profits have fallen well short of expectations due to unforeseen
operating challenges.

"The shortfall in operating results is particularly significant to
credit quality because the company is currently unable to access
its revolving credit facility for near-term liquidity needs
following a violation of the financial covenants in its bank
credit agreement," said Standard & Poor's credit analyst Franco
DiMartino.  The company has initiated discussions with its bank
lenders to obtain a waiver of the covenant violations that, if
successful, would enable it to access funds from the revolver.
Subsequently, Waste Services will seek to negotiate a permanent
amendment to the financial covenants to address lower-than-
initially anticipated profitability over the near to intermediate
term, and the need for additional liquidity.

The CreditWatch placement highlights the risk of another downgrade
if Waste Services is unable to obtain a waiver or an amendment
that would preserve sufficient access to the facility in the
absence of improvement in operating profits.  Access to the credit
facility is a key rating consideration in light of the company's
low cash balance, significant near-term operating challenges, and
considerable capital spending and debt service requirements.

Waste Services' operating profitability decline stems primarily
from a material and previously undisclosed delay in commencing
operations at three transfer stations in Florida that would enable
the company to increase its internalization rate at its JED
Landfill, a newly permitted municipal landfill in Osceola County,
Florida that the company began operating in January 2004.


WILTEL COMMS: Moody's Puts B2 & Caa1 Ratings on New Credit Pacts
----------------------------------------------------------------
Moody's Investors Service assigned B2 ratings for the proposed
senior secured $25 million revolving bank credit facility due 2009
and $235 million first-priority lien term credit facility due
2010, and a Caa1 rating for the proposed senior secured
$125 million second-priority lien term credit facility due 2011 of
WilTel Communications, LLC (a wholly-owned subsidiary of WilTel
Communications Group, Inc.).

The ratings broadly reflect the company's high and growing
business risk given eroding business fundamentals for the long-
haul carrier industry, offset somewhat by comparatively moderate
financial risk and very good near-term liquidity.  The rating
outlook is stable.

   WilTel Communications, LLC

      * Senior Implied Rating -- B3;

      * Issuer Rating -- Caa2;

      * $25 million Revolving Senior Secured Credit Facility due
        2009 -- B2;

      * $235 million First-Priority Senior Secured Term Loan due
        2010 -- B2;

      * $125 million Second-Priority Senior Secured Term Loan due
        2011 -- Caa1;

      * Outlook -- Stable

Moreover, the ratings reflect the highly competitive market in
which WilTel operates, its relatively short post-bankruptcy
operating history, and continued supply and demand imbalances for
the foreseeable future.  Other positive factors supporting the
ratings, however, include:

     (i) the company's preferred provider relationship with SBC;

    (ii) its moderate leverage subsequent to the 2002
         restructuring;

   (iii) improving financial metrics; and

    (iv) good liquidity in the form of excess cash balances.

The stable outlook reflects Moody's expectation that the company
will realize only nominal revenue growth and EBITDA margin
improvement over the next several years.  Free cash flow
generation will depend largely on careful operating expense and
capital investment management.  Stronger than expected competitive
pressures, resulting in accelerated pricing erosion, could
pressure the ratings and be a cause for a negative rating outlook,
although much of this risk is effectively factored into the
current ratings.  If WilTel were to exceed expectations with
respect to free cash flow generation, in particular, and
subsequently further delever its balance sheet, the outlook could
improve to positive, indicating that ratings could improve over
time as business fundamentals also improved.

The revolver and the first-priority lien term credit facilities
are secured by:

   (1) a first-priority lien and pledge of substantially all the
       assets of the borrower, the parent (WilTel Communications
       Group) and any subsidiary guarantor, including Vyvx;

   (2) all capital stock of the borrower and any subsidiary
       guarantor; and

   (3) a second-priority lien on the company's headquarters.
       WilTel Group and each domestic subsidiary unconditionally
       guarantee the facility.

Additionally, Moody's understands that the terms and conditions
subject the revolver and first-priority lien term facilities to a
borrowing base of cash plus 80% of eligible receivables, and at
WilTel's option, 50% of the appraised value of Vyvx.  Moody's
believes that the borrowing base significantly enhances the
position of first-priority lien creditors vis-a-vis second-
priority lien creditors.

The proposed second-priority lien term credit facility is secured
by a second-priority lien on the same assets that secure the
revolver and the first-priority lien term credit facilities, as
well as a third-priority lien on the company's headquarters.
WilTel Group and each domestic subsidiary unconditionally
guarantee the facility.  The second-priority lien term credit
facility is not subject to a borrowing base and matures six months
following the maturity of the first-priority lien term facility.
Additionally, Moody's notes that the second-priority lien term
facility is not subject to mandatory amortization and that all
mandatory prepayments are first applied to the first-priority lien
term debt.

The B2 ratings on the revolver and the first-priority lien term
facility are notched up with respect to the B3 senior implied
rating reflecting their superior position within the capital
structure given their first-priority claims on effectively all the
company's assets (excluding the company headquarters, which has a
second-priority lien), and the credit enhancement provided by the
borrowing base.

The notching up also considers the meaningful amount of "junior
capital" in the pro forma capital structure in the form of the
$125 million second-priority lien term loan.  Should the company
issue additional rated debt junior in rank or structurally
subordinated to the first-priority bank debt, Moody's would likely
rate that debt below the senior implied rating.
Moody's B3 senior implied rating assumes that in a distressed
scenario, there is likely to be sufficient collateral coverage of
the first-priority lien term loan and that Vyvx alone, a non-core
business of WilTel, would likely garner roughly $210 million,
estimated at seven times annualized EBITDA, if divested.

On a pro forma basis, Moody's expects WilTel's liquidity to
approximate $175-to-$200 million, comprised mostly of cash
balances, but also of an undrawn $25 million revolver.  Moody's
projects reasonably assured compliance with the company's
maintenance financial covenants contained in the proposed credit
agreement, which should afford unfettered access to the revolver.
Subsequent to the closing of the credit facilities, WilTel's
assets will be largely encumbered, as is presently the case,
although the company could presumably monetize certain non-core
assets if it needed additional liquidity.

A substantial debt burden, industry overcapacity, weaker than
expected demand and macroeconomic malaise led to financial
difficulty for WilTel (formerly Williams Communications) in 2001
and early 2002.  Since filing a voluntary bankruptcy petition and
subsequently emerging from bankruptcy in late 2002, the company
has reined in costs by shedding over 50% of its workforce
(currently 1,950 employees), rationalizing its network costs and
exiting non-core businesses.

While Chapter 11 enabled WilTel to restructure its balance sheet
and dramatically lower its debt burden (from $5.9 billion to $573
million), many of the market challenges that encouraged the
company to seek bankruptcy protection remain.  Though the U.S.
economy has improved in the past 2 years, demand for telecom
services is generally more closely aligned with job growth, which
has been weak.  Additionally and most importantly, the dramatic
imbalance between long haul supply and demand remains -- thereby
exacerbating already fierce price competition, and contributing to
continued margin erosion among all industry players.

WilTel Communications is a long distance carrier headquartered in
Tulsa, Oklahoma.


WORLDCOM: Shareholders Have Until Sept. 1 to Opt-Out of Settlement
------------------------------------------------------------------
Parker & Waichman, LLP is reminding current and former MCI
WorldCom (NasdaqNM:MCIP - News) shareholders and employees that
only 31 days remain to opt-out of the proposed class action
settlement.  The deadline to opt-out of the class action
settlement is September 1, 2004.  Current and former shareholders
who don't specifically opt-out of the class action settlement will
automatically be included in the settlement.

Parker & Waichman is offering free case evaluations at
http://www.worldcomstockfraud.com/

It is estimated that shareholders lost in excess of $100 billion
on MCI WorldCom securities.  It is believed that the proposed
settlement will provide shareholders with less than 2 cents for
every dollar lost.  Parker & Waichman believes this proposed
settlement does not provide adequate compensation for MCI WorldCom
shareholders.  Parker & Waichman urges shareholders to determine
whether they would be better served by opting out of the proposed
settlement.

Current and former WorldCom and MCI shareholders and employees can
visit http://www.worldcomstockfraud.com/and
http://www.worldcomclassaction.com/to view and download the
WorldCom class action opt-out form entitled, "Notice of Class
Action."

Current and former shareholders who desire to opt-out of the
WorldCom class action settlement must mail the opt-out form or
required information before the September 1, 2004 opt-out
deadline.  This will permit them to pursue individual claims
against the defendants, including Citigroup.  Current and former
WorldCom and MCI shareholders who do not specifically opt-out of
the proposed class action settlement by filing the required form
or information will automatically be included in the proposed
settlement.

Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.

The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532).  On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts.

On April 20, 2004, the company (WCOEQ, MCWEQ) formally emerged
from U.S. Chapter 11 protection as MCI, Inc.  This emergence
signifies that MCI's plan of reorganization, confirmed on October
31, 2003, is now effective and the company has begun to distribute
securities and cash to its creditors.  (Worldcom Bankruptcy News,
Issue No. 59; Bankruptcy Creditors' Service, Inc., 215/945-7000)


* BOOK REVIEW: The Rise of the Community Builders
-------------------------------------------------
Author:     Marc A. Weiss
Publisher:  Beard Books
Hardcover:  228 pages
List Price: $34.95

Order your personal copy at
http://amazon.com/exec/obidos/ASIN/0231065043/internetbankrupt

Review by Gail Owens Hoelscher

This fascinating book covers the early period of American
residential planning, from the 1890s to the 1940s. Author
Marc Weiss defines "community building" as site planning and
development of land patterns into which lots and houses are
placed, and the relationship of those houses and lots to one
another. A community builder, he says, "designs, engineers,
finances, develops and sells an urban environment using as
the primary raw material rural, undeveloped land."

The idea of designating urban land for strictly residential
purposes was fairly new at the end of the 19th century. Prior
to that time, planning had been haphazard, with new owners of
land generally permitted to build on it what they wished,
whether a home, store or manufacturing site. The first of the
community-building efforts  resulted in high-income
neighborhoods of houses built in a wide range of
architectural designs and by various builders. At that time,
land subdividers and homebuilders were generally separate
entities. Homebuyers bought not only a house and lot, but
also certainty in the future of their immediate surroundings.

In the 1940s, the Levitts of Levittown conducted one of the
first experiments in which one company carried out the entire
process from planning and land improvement through to
building and selling houses, along with parks and shopping
centers. In this case, economies of scale were recognized in
the housing industry, perhaps for the first time. In 1930,
celebrated architect Clarence Stein commented, ".the house
itself is of minor importance. Its relation to the community
is what really counts.It is impossible to build homes
according to the American standard as individual units for
those of limited incomes. If they are to be soundly built and
completely equipped with the essential utilities they must be
planned and constructed as part of a larger group."

The author recounts the crucial role of these pioneer
community builders in developing subsequent public policy,
calling it "private innovation preceding public action." He
cites, among others, the concepts of street classification,
lot size and shape, set-back lines and lot-coverage
restrictions, easements, and design and placement of
recreational amenities.

In order to carry out their design visions, community
builders relied heavily on a new legal concept: deed
restrictions. In effect, homebuyers gave away certain private
property rights by accepting limitations and mandates set out
by the builders. These restrictions ranged from paint color
and landscaping to, unfortunately, racial exclusion. Some of
these voluntary restrictions led to land planning tools such
as zoning laws, which regulated the use and size of
structures, and subdivision regulations, which imposed
standards in lot size, street width and other physical
improvements in the subdividing of land for residential
areas.

The author recounts the development of all aspects of the
American housing industry, including home insurance and
mortgages. He devotes considerable time to the development of
zoning controls and the up-and-down relationships between
private real-estate developers and public policy makers. He
shows how conflicts between the public and private sectors in
the diverse elements of the real estate industry have
affected real estate development as a whole, using examples
mainly from California but from other states as well. The
book is well documented and surely valuable for students of
urban history, urban planning, and real estate development.


                           *********

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

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

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

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

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

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

                          *********

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

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

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

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

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


                *** End of Transmission ***