TCR_Public/040823.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Monday, August 23, 2004, Vol. 8, No. 178

                            Headlines

A.B. DICK: U.S. Trustee Names 5-Member Creditors' Committee
ACTUANT CORP: Moodys's Upgrades Senior Implied Rating to Ba2
ADELPHIA BUSINESS: Resolves Grande Communication's $877K Claims
ALDERWOODS: Issues New 7-3/4% Notes & Completes Debt Refinancing
ALDERWOODS: 98.6% of 12-1/4% Noteholders Agree to Amend Indenture

AMES DEPARTMENT: Wants Exclusive Periods Extended Until Feb. 28
AQUILA INC: $300 Million PIES Offering Gets S&P's B- Rating
AQUILA INC: Fitch Affirms Low-B Senior Ratings with Stable Outlook
BAYOU STEEL: Reorganized Co. Posts FY '04 3rd Qtr $6.1M Net Income
BEA CBO: Fitch Affirms Low-B Ratings on 2 Classes & Junks 2 Others

BELL CANADA: Digital Bundle Customers Can Now Earn Aeroplan Miles
BRAND SERVICES: S&P Cuts Rating to B Following Covenant Violations
BREUNERS HOME: Wants to Employ Pachulski Stang as Attorneys
BRIAZZ: Wants Open-Ended Deadline to Decide on Unexpired Leases
CATHOLIC CHURCH: Court Approves AICCO Financing Agreement

CHAPCO CARTON: Wants to Retain Adelman & Gettleman as Counsel
CHAS COAL: Creditors Must File Proofs of Claim by September 20
CHIQUITA BRANDS: Names Jay Braukman as New Chief Financial Officer
CIRTRAN CORP: Reports $4 Mil. Stockholders' Deficit at June 30
CITRICO INTERNATIONAL: Section 304 Petition Summary

COMPRESSION POLYMERS: Moody's Puts B1 Rating on $23M Loan Add-on
COTT CORP: Moody's Upgrades Sr. Sub. Rating to Ba3 & Debt to Ba1
CROWN PACIFIC: Interfor Gets Court OK to Acquire Asset for $73.3M
DELTA AIR: Debt Restructuring Risks Prompts S&P's Junk Ratings
DRESSER INC: June 30 Balance Sheet Upside-Down by $318.3 Million

DUNES PLAZA: Signs-Up Hogan & Hartson as Bankruptcy Counsel
DYER FABRICS: Wants to Employ Harris Shelton as Bankruptcy Counsel
ELECTRIC MACHINERY: EarthFirst Technologies Completes Acquisition
ENCORE ACQUISITION: Inks New 5-Year Credit Facility with BofA
ENRON CORP: Wants to Recover $9.4 Million from 36 Creditors

FLEMING COMPANIES: Asks Court to Okay Grace Foods Settlement Pact
FOOTSTAR INC: Inks $15MM Pact to Sell Gaffney Distribution Center
GURVINDER SINGH UBEROI TRUST: Voluntary Chapter 11 Case Summary
HALLIBURTON: Smith Int'l to Pay $41 Mil. for Patent Infringement
HEALTHSOUTH CORP: John Chamberlain Resigns from Board of Directors

HI-RISE RECYCLING: Hires Kestrel as Bankruptcy Consultants
HOLLINGER INC: Appeals Order Staying Counterclaims Against Int'l
HOLLINGER INC: Appoints P. Carroll & D.M.J. Vale as Directors
HOLLINGER CDN: Plans to Trade on NEX to Provide Owners Liquidity
HOME CARE: Hires Arnstein & Lehr as Bankruptcy Counsel

I2 TECHNOLOGIES: Names Michael McGrath to Board of Directors
INTERSTATE HOTELS: Moody's Assigns B2 Senior Implied Rating
ITSV INC: Defendants Confirm Receipt of Trustee's $151MM Lawsuit
IVACO INC: Ontario Court Approves Asset Sale to Heico Affiliate
JEAN COUTU: FY '03-'04 Results Broadcast Available Until Sept. 17

J.P. MORGAN: S&P Affirms Single-B Ratings on Two Cert. Classes
KENDRICK ENGINEERING: List of 20 Largest Unsecured Creditors
LITFUNDING CORP: Court Confirms 2nd Amended Reorganization Plan
LORAL SPACE: Files Proposed Reorganization Plan in S.D.N.Y
MATRIA HEALTHCARE: S&P Reinstates BB- $35MM Credit Facility Rating

MEDIA GROUP: U.S. Trustee Appoints 5-Member Creditors' Committee
MILLENIUM ASSISTED: Gets OK to Use Cash Collateral Until Sept. 3
MORTGAGE CAPITAL: Fitch Affirms Low-B Ratings on Four Classes
NEWMARKET TECH: Acquires 20% Equity Stake in Sensitron Inc.
NORTEL NETWORKS: Reports Preliminary 2nd Quarter Financial Results

NORTEL NETWORKS: S&P Keeps Low-B Ratings On CreditWatch Developing
OCTAGON INVESTMENT: S&P Puts BB Rating on $10.75M Class B-2L Notes
OHIO VALLEY HEALTH: S&P Cuts Ratings Three Notches to B from BB
OM GROUP: S&P's Low-B Credit & Sub. Debt Ratings on CreditWatch
OMNI FACILITY: Committee Turns to Capstone for Financial Advice

ONSITE TECH: Employs Hughes Watters as Bankruptcy Counsel
OSE USA: Appoints Edmond Tseng as Interim President
OWENS CORNING: Asbestos Claims Estimation Hearing Begins Jan. 13
PARKER DRILLING: $137.7 Million of 10-1/8% Notes Are Tendered
PENINSULA GAMING: S&P Assigns B+ Credit & Senior Debt Ratings

PENN TRAFFIC: Files Plan to Emerge from Chapter 11 Protection
POLYPORE: Moody's Single-B & Junk Ratings on Review Pending IPO
PRESTIGE BRANDS: Reports First Quarter FY 2005 Results
PRIME HOSPITALITY: S&P Puts Low-B Ratings on CreditWatch Negative
PROTECTION ONE: Extends Standstill Pact with Quadrangle Master

SIRIUS SATELLITE: Extends Rights Agreement with Bank of New York
SIGHT RESOURCE: Gets Nod to Use CadleRock's Cash Collateral
SK GLOBAL: Gets Court Nod to Settle with John Roberts for $950K
SOLUTIA INC: Equity Committee Wants to Examine Debtors
SOUTHWALL TECH: Appoints Maury Austin as Permanent SVP & CFO

STRUCTURED ASSET: Fitch Junks 2 Classes & Rates Another 2 Low-B
SUPERIOR GALLERIES: Retains CCG for Investor Relations Program
SURFSIDE RESORTS: Asks Court to Dismiss Chapter 11 Case
TANGO INC: Begins Discussions With Potential Acquisition Targets
UNITED AIR: Workers Urge Court to Appoint a Chapter 11 Trustee

US AIRWAYS: Bank of New York Holds an Allowed $192MM Secured Claim
W.R. GRACE: Directors Face Class Action Lawsuit Over 401(k) Plan
WINSTAR COMMS: Court Approves Settlement with Holdings & IDT Corp.
WORLDCOM INC: MCI Officers Dispose of 40,589 Common Shares

* BOND PRICING: For the week of August 23 - August 28, 2004

                          *********

A.B. DICK: U.S. Trustee Names 5-Member Creditors' Committee
-----------------------------------------------------------
The United States Trustee for Region 3 appointed five creditors to
serve on the Official Committee of Unsecured Creditors in A.B.
Dick and its debtor-affiliates' chapter 11 cases:

      1. Delaware Asset Management
         Attn: Carl Mabry
         2005 Market Street
         Philadelphia, Pennsylvania 19103
         Phone: 215-255-1667, Fax: 215-255-1296

      2. International Union, UAW
         Attn: Niraj R. Ganatta
         8000 East Jefferson Avenue
         Detroit, Michigan 48214
         Phone: 313-929-5216, Fax: 313-926-5240

      3. Mitsubishi Imaging (MPM), Inc.
         Attn: Donald W. Bowin
         555 Theodore Fremd Avenue
         Rye, New York 10580
         Phone: 914-925-3219, Fax: 914-921-1695

      4. Konica-Minolta Business Solutions, USA, Inc.
         Attn: Sharon Uhoefer
         100 Williams Drive
         Ramsey, New Jersey 07446
         Phone: 201-825-4000, Fax: 201-825-7331

      5. Esko Productio A/S
         Attn: Marion L. Tyson
         1955 Vaughn Road, Suite 101
         Kennesaw, Georgia 30144
         Phone: 770-427-5700, Fax: 770-427-7844

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 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.


ACTUANT CORP: Moodys's Upgrades Senior Implied Rating to Ba2
------------------------------------------------------------
Moody's Investors Service has upgraded Actuant Corporation's
ratings.  At the same time, Moody's has assigned a new rating to
the company's senior credit facility.  The rating outlook is
stable.

Ratings upgraded:
   
   -- Senior implied rating, to Ba2 from Ba3; and

   -- Senior unsecured issuer rating, to Ba3 from B1.

New rating assigned:

   -- Ba2 on the $250 million senior unsecured revolving credit
      facility, due 2009.

Moody's does not rate Actuant's $150 million 2% convertible senior
subordinated notes, due 2023.  Meanwhile, Moody's has withdrawn
ratings on the 13% senior subordinated notes, due 2009, following
the recent completion of a tender offer.

The rating upgrade reflects Actuant's improving credit profile and
its demonstrated ability to deliver steady performance during the
recent economic downturn.  The rating action also considers the
considerable debt reduction the company has accomplished in recent
years, substantially reduced financing costs, good liquidity
condition, and a focused management team.  On the other hand, the
ratings are constrained by its exposure to cyclical industrial
end-markets, integration risks related to its acquisition growth
strategy, and its relatively small size.

The stable rating outlook reflects Moody's expectation that
Actuant is likely to continue to benefit from the current economic
upswing over the medium term.  However, this is offset by risks
associated with potential acquisitions that the company is likely
to pursue to generate growth.

Moody's says that Actuant has steadily improved its credit profile
since the spin-off of its electronics enclosures business
-- APW -- in July 2000.  The company's total debt has been reduced
from approximately $451 million at the time of the spin-off to
approximately $239 million (including $27 million under an
accounts receivable securitization facility) as of May 31, 2004.  
Accordingly, its EBITDA debt leverage has declined from 4.1 times
to 2.4 times in the same period.  The de-leveraging has been
accomplished mainly through internal cash flow generation,
business divestitures, and a $99.7 million equity offering in
February 2002.

After weathering the recent economic downturn with solid
performance, Actuant is currently enjoying a cyclical rebound in
many of its end-markets.  Sales in the nine months through
May 31, 2004, excluding the impact of acquisitions and foreign
currency rate changes, increased 8% to $539 million.  Operating
profits for the nine months increased 23% to $66.1 million from
$53.6 million in the prior year.  Moody's expects the company to
continue to enjoy top-line growth over the next 12-18 months,
although it may be at a slower pace.  This would call for
acquisitions to supplement organic growth, which gives rise to
concerns over integration risks.  However, given its track record,
the company seems to have developed a disciplined approach in
terms of target selection and acquisition size, and this would
somewhat mitigate the integration risks.

Over the past twelve months, Actuant has engaged in a series of
refinancing transactions that have led to substantially reduced
interest expense, stronger liquidity and longer maturity.  Through
the combination of repurchasing substantially all of its
$200 million 13% senior subordinated notes and issuing in November
2003 $150 million 2% convertible senior subordinated debentures,
Actuant has substantially reduced its on-going interest expense on
funded debt.  A $50 million commercial paper program set up in
March 2004 helps further lower funding costs.  In February 2004,
the company entered into a new $250 million five-year senior
revolving credit facility, which extended maturity to 2009.  As of
May 31, 2004, availability under the revolver was approximately
$220 million.

Actuant Corporation, headquartered in Milwaukee, Wisconsin, is a
diversified global provider of highly engineered position and
motion control systems and branded tools end-users in a variety of
industries.


ADELPHIA BUSINESS: Resolves Grande Communication's $877K Claims
---------------------------------------------------------------
On September 27, 2000, Adelphia Business Solutions Long Haul,
L.P., now known as Telcove Long Haul, LP, entered into
Indefeasible Right of Use Agreements with Grande Communications
Networks, Inc., for certain networks in San Antonio and Austin,
Texas.  In connection with the construction of the Networks,
Grande built certain lateral routes off of the Networks for ABIZ's
telecommunications services to reach their customers.

ABIZ has not fully paid for the construction of the Laterals.
Consequently, Grande filed secured claims aggregating $877,514.
Grande alleged that the Claims are secured by perfected mechanics'
liens for work performed on the Laterals.

Grande and ABIZ dispute the value of the Laterals and the value of
the Claims.

In a Court-approved stipulation, the parties agree that:

    (a) ABIZ and Grande will value the Laterals at 75% percent of
        the Claims, resulting in a $219,378 unsecured claim and a
        $658,136 secured claim;

    (b) ABIZ will surrender the Laterals and pay $7,678 to Grande
        in full and complete satisfaction of the Claims, whether
        secured or unsecured; and

    (c) Grande and ABIZ will 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. (Adelphia Bankruptcy News, Issue No. 67; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


ALDERWOODS: Issues New 7-3/4% Notes & Completes Debt Refinancing
----------------------------------------------------------------
Alderwoods Group, Inc., (NASDAQ: AWGI) closed its previously
announced offering of $200 million of 7-3/4% senior
notes due 2012.  The Notes will rank equally with any future
senior unsecured indebtedness of the Company.

In addition to the issuance of the Notes, the debt refinancing
includes amendments to the Company's senior secured credit
facility to increase the principal amount of term loan borrowings
by up to $175 million, extend the term loan maturity and reduce
the term loan amortization payments and increase the availability
under the revolving portion of the facility from $50 million to
$75 million.

The Company will use the proceeds from the Notes offering,
together with available cash and additional term loan borrowings
under the amendments to its senior secured credit facility, to
repurchase outstanding 12-1/4% senior notes due 2009 tendered
pursuant to the Company's recently completed tender offer and
consent solicitation, pay all amounts outstanding under its
subordinated bridge loan due 2005 and pay the related tender
premium, fees and expenses.

The Notes have not been registered under the Securities Act of
1933 or the securities laws of any state and may not be offered or
sold in the United States absent registration or an applicable
exemption from the registration requirements under the Securities
Act and any applicable state securities laws.

The Company provides funeral and cemetery services and products on
both an at-need and pre-need basis.  In support of the pre-need
business, it operates insurance subsidiaries that provide
customers with a funding mechanism for the pre-arrangement of
funerals.

                         *     *     *

As reported in the Troubled Company Reporter on July 27, 2004,
Standard & Poor's Ratings Services it affirmed its 'B+' corporate  
credit rating on the funeral home and cemetery operator Alderwoods  
Group, Inc., and assigned its 'B' debt rating to the company's  
proposed $200 million senior unsecured notes due in 2012.  At the  
same time, Standard & Poor's also assigned its 'BB-' senior  
secured bank loan rating and its '1' recovery rating to  
Alderwoods' proposed $75 million revolving credit facility, which  
matures in 2008, and to its proposed term loan B, which matures in  
2009.  The existing term loan had $242 million outstanding at  
March 27, 2004, but will be increased in size.  The bank loan  
ratings indicate that Standard & Poor's expects a full recovery of  
principal in the event of a default, based on an assessment of the  
loan collateral package and estimated asset values in a distressed  
default scenario.  The company is expected to use the proceeds  
from the new financings to redeem $320 million of 12.25% senior  
unsecured notes, repay a $25 million subordinated loan, and fund  
transaction costs.  As of March 27, 2004, the company had  
$614 million of debt outstanding.  

The ratings outlook has been revised to positive from stable to  
indicate that, in time, the ratings could be raised if Alderwoods  
can continue to demonstrate improved operating performance and if  
it can sustainably deleverage.  The decline in leverage would give  
the company additional financial capacity to weather adverse  
competitive factors, such as periodic weaknesses in death rates  
and rising consumer preference for lower cost death-care services.

"The low-speculative-grade ratings on funeral and cemetery  
services provider Alderwoods Group, Inc., reflect its highly  
leveraged financial profile, uncertainties related to the longer  
term success of a new business plan, and the company's  
vulnerability to periods of business weakness," said Standard &  
Poor's credit analyst Jill Unferth.  "These factors are mitigated  
by the relatively favorable long-term predictability of the  
funeral home and cemetery business."


ALDERWOODS: 98.6% of 12-1/4% Noteholders Agree to Amend Indenture
-----------------------------------------------------------------
Alderwoods Group, Inc., (NASDAQ:AWGI) completed its previously
announced cash tender offer and consent solicitation for any and
all of its $320,752,500 outstanding principal amount of 12-1/4%
Senior Notes due 2009 (CUSIP No. 014383AC7 and ISIN No.
US014383AC79).

A total of approximately $316.2 million aggregate principal amount
of the Notes (approximately 98.6%) was tendered prior to the
expiration date of 9:00 a.m., New York City time, Thursday, August
19, 2004.  Alderwoods Group has accepted for purchase and paid for
all Notes tendered pursuant to the Offer.  On August 4, 2004,
Alderwoods Group announced the execution of a supplemental
indenture effecting certain amendments to the indenture governing
the Notes.  The amendments, which eliminate or modify
substantially all of the restrictive covenants in the indenture,
became operative Thursday.

Banc of America Securities LLC acted as Alderwoods Group's
exclusive dealer manager and solicitation agent in connection with
the Offer.

                     About Alderwoods Group

The Company provides funeral and cemetery services and products on
both an at-need and pre-need basis.  In support of the pre-need
business, it operates insurance subsidiaries that provide
customers with a funding mechanism for the pre-arrangement of
funerals.

                         *     *     *

As reported in the Troubled Company Reporter on July 27, 2004,
Standard & Poor's Ratings Services it affirmed its 'B+' corporate  
credit rating on the funeral home and cemetery operator Alderwoods  
Group, Inc., and assigned its 'B' debt rating to the company's  
proposed $200 million senior unsecured notes due in 2012.  At the  
same time, Standard & Poor's also assigned its 'BB-' senior  
secured bank loan rating and its '1' recovery rating to  
Alderwoods' proposed $75 million revolving credit facility, which  
matures in 2008, and to its proposed term loan B, which matures in  
2009.  The existing term loan had $242 million outstanding at  
March 27, 2004, but will be increased in size.  The bank loan  
ratings indicate that Standard & Poor's expects a full recovery of  
principal in the event of a default, based on an assessment of the  
loan collateral package and estimated asset values in a distressed  
default scenario.  The company is expected to use the proceeds  
from the new financings to redeem $320 million of 12.25% senior  
unsecured notes, repay a $25 million subordinated loan, and fund  
transaction costs.  As of March 27, 2004, the company had  
$614 million of debt outstanding.  

The ratings outlook has been revised to positive from stable to  
indicate that, in time, the ratings could be raised if Alderwoods  
can continue to demonstrate improved operating performance and if  
it can sustainably deleverage.  The decline in leverage would give  
the company additional financial capacity to weather adverse  
competitive factors, such as periodic weaknesses in death rates  
and rising consumer preference for lower cost death-care services.

"The low-speculative-grade ratings on funeral and cemetery  
services provider Alderwoods Group, Inc., reflect its highly  
leveraged financial profile, uncertainties related to the longer  
term success of a new business plan, and the company's  
vulnerability to periods of business weakness," said Standard &  
Poor's credit analyst Jill Unferth.  "These factors are mitigated  
by the relatively favorable long-term predictability of the  
funeral home and cemetery business."


AMES DEPARTMENT: Wants Exclusive Periods Extended Until Feb. 28
---------------------------------------------------------------
Ames Department Stores, Inc., and its debtor-affiliates have been
diligently laboring to maximize values for creditors and, as of
August 17, 2004, have:

    (a) sold all their inventory;

    (b) fully satisfied their obligations under their postpetition
        financing facilities;

    (c) rejected or assumed and assigned the majority of their
        unexpired nonresidential real property leases in
        accordance with Section 365 of the Bankruptcy Code;

    (d) been settling and reconciling creditors' claims;

    (e) commenced and are continuing to prosecute and collect
        substantial sums from avoidance actions; and

    (f) sold, or are in the process of selling, their remaining
        real estate holdings.

However, Martin J. Bienenstock, Esq., at Weil, Gotshal & Manges,
LLP, in New York, tells Judge Gerber of the U.S. Bankruptcy Court
for the Southern District of New York that the Debtors are not in
a position to determine if a recovery will be available for
prepetition creditors.  The Debtors need to complete the process
of liquidating their real property interests, reconciling
administrative expense claims and prosecuting avoidance actions.

Accordingly, the Debtors ask the Court to extend their exclusive
periods to file a plan through February 28, 2005, and to solicit
acceptances of that plan through April 29, 2005.

The Debtors will not be able to develop a confirmable Chapter 11
plan until they determine the full extent of their administrative
obligations and the resources available to satisfy those
obligations.  An extension of the deadline will avoid motion
practice and unnecessary intrusion on management's time.

Mr. Bienenstock reports that:

    (a) While the Debtors have successfully disposed the majority
        of their real property interests, other major real estate
        assets, including the Debtors' home office building, have
        yet to be liquidated;

    (b) The Debtors anticipate that they will have approximately
        $94,000,000 in administrative expense claims, many of
        which still need to be reconciled;

    (c) The Debtors have commenced and continue to prosecute
        approximately 2,000 Preference Actions.  The Debtors
        anticipate the Preference Actions will continue well into
        2005; and

    (d) The Debtors are also in the process of negotiating a sale
        of their distribution center in Leesport, Pennsylvania.
        The Debtors anticipate that the sale of their Leesport
        Distribution Center will generate significant liquidity to
        facilitate an interim distribution to creditors holding
        administrative expense claims.

Mr. Bienenstock argues that a termination of exclusivity at this
time can only negatively impact the progress made to date.  No
other party currently has a plan to propose, and no one will be
precluded from asking the Court's permission to propose a plan if
exclusivity is extended.  An extension only causes a putative plan
proponent to ask permission before filing a plan.  This way
irresponsible or destructive plans and their concomitant effect on
recoveries can be avoided.

By any reasonable measure, the Debtors' Chapter 11 cases are
sufficiently large and complex to warrant extension of the
Exclusive Periods.  Mr. Bienenstock also notes that by taking
prompt action to halt operations, reconcile claims, liquidate
assets and recover avoidable preferences, the Debtors have not
delayed making the decisions necessary to achieve a consensual
Chapter 11 plan.

Moreover, the Debtors have kept sight of the need to deal with all
parties-in-interest in these cases.  The Debtors and their
professionals have consistently conferred with various
constituencies on all major substantive and administrative matters
in these cases, often altering their position in deference to the
views of the Committee, the U.S. Trustee, or other parties-in-
interest.

An extension of the Exclusive Periods will not prejudice any
party-in-interest, but rather will avert prematurity and afford
the Debtors an opportunity to propose a realistic and viable
Chapter 11 plan.

                           *     *     *

The Court will convene a hearing to consider the Debtors' request
on September 29, 2004, at 9:45 a.m.  Accordingly, Judge Gerber
extends the Debtors' Exclusive Filing Deadline to and including
the conclusion of that hearing.

Headquartered in Rocky Hill, Connecticut, Ames Department Stores,
Inc., is a regional discount retailer that, through its
subsidiaries, currently operates 452 stores in nineteen states and
the District of Columbia.  The Company filed for chapter 11
protection on August 20, 2001 (Bankr. S.D.N.Y. Case No. 01-42217).
Albert Togut, Esq., Frank A. Oswald, Esq. at Togut, Segal & Segal
LLP and Martin J. Bienenstock, Esq., and Warren T. Buhle, Esq., at
Weil, Gotshal & Manges LLP represent the Debtors in their
restructuring efforts. When the Company filed for protection from
their creditors, they listed $1,901,573,000 in assets and
$1,558,410,000 in liabilities. (AMES Bankruptcy News, Issue No.
57; Bankruptcy Creditors' Service, Inc., 215/945-7000)


AQUILA INC: $300 Million PIES Offering Gets S&P's B- Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' rating to
Aquila Inc.'s (B-/Negative/--) $300 million premium income equity
securities -- PIES -- offering.  The outlook is negative.

Kansas City, Missouri-based energy provider Aquila has about $2.8
billion of debt.

The PIES carry a coupon of 6.75% and represent mandatory
convertible senior notes, which will convert into common stock no
later than Sept. 15, 2007.  Net proceeds will be used toward
reducing liabilities and improving the company's weak financial
profile.

The ratings on Aquila reflect the company's marginal credit
measures and insufficient cash flow from operations to offset a
burdensome debt level, not quite mitigated by management's efforts
to refocus on its traditional utility business.

Due to weak cash flow generation from operations, asset sales have
been necessary for Aquila to reduce its debt levels.  Management
has achieved progress toward stemming a deteriorating financial
profile with the execution of its asset sales program, and the
company has alleviated some of its most pressing liquidity
concerns.

However, the negative outlook reflects that although Aquila has
made significant progress 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.


AQUILA INC: Fitch Affirms Low-B Senior Ratings with Stable Outlook
------------------------------------------------------------------
Fitch Ratings assigned a 'B-' rating to the 12,000,000 premium
income equity securities -- PIES -- expected to be issued by
Aquila, Inc.  At the same time, Fitch has revised Aquila's Rating
Outlook to Stable from Negative and affirmed the existing ratings.  
The PIES will represent $300 million of mandatorily convertible
senior notes.  Proceeds from the issuance will be used to retire
long-term debt and other liabilities.  Approximately $2.9 billion
of securities are affected, including the PIES.

Each of the 12,000,000 PIES represents $25 million of principal
amount of mandatorily convertible notes.  The PIES will
automatically convert to common shares of Aquila on Sept. 15, 2007
at the conversion rate, unless converted to shares earlier at the
option of the holder or upon the occurrence of certain other
events.  The conversion rate is dependent on the closing price of
Aquila's common shares over the 20-day period prior to the
Sept. 15, 2007 conversion date but would be capped at a 22% price
appreciation.

Fitch's 'B-' rating primarily reflects concerns regarding
significant debt relative to cash flow and the negative drag on
cash from remaining merchant operations.  While much progress has
been made in returning the company to its domestic utility roots,
Aquila remains highly leveraged and generates insufficient cash
flow to satisfy debt and other obligations.  Further restructuring
efforts, as well as a favorable operating and regulatory
environment, are necessary to restore financial strength.
Additional credit concerns include the relatively weak cash flow
from electric operations that results from the lack of a fuel
adjustment mechanism in Missouri combined with high fuel costs, as
well as an increase in other operating costs.  Most of Aquila's
jurisdictions, including its largest, Missouri, use historical
test years for ratemaking purposes, which creates recovery lags.
High fuel prices and the requirement to prepay certain gas
suppliers and pipelines during peak winter heating months increase
the need for working capital.

In efforts to improve utility earnings and cash flow, Aquila
received a number of rate increases and continues to seek rate
increases and regulatory remedies for rising fuel costs including;

   (1) a pending rate case in Kansas for $19 million;

   (2) the initiation of an Interim Energy Charge; and

   (3) a request for an Accounting Adjustment Order in MO, and an
       $8.2 million rate increase in Colorado.

The revision of the Rating Outlook to Stable considers the
benefits to liquidity and financial flexibility that result from
the inflow of capital from the PIES and the concurrent issuance of
about $102 million proceeds from the sale of common shares, the
previous termination of the bulk of unregulated operations,
including two unprofitable tolling contracts, the recent
settlements with surety providers, and the expected future
benefits from termination of most of the long term gas delivery
contracts.  The $389 million aggregate net proceeds from the new
securities will reduce the near term risk of default and provide
more time to execute on remaining financial and operational
repositioning plans Going forward, Fitch believes the elimination
of the Elwood tolling agreement ($37 million of annual capacity
payments), execution of the termination of 92% of unprofitable gas
prepayment contracts as planned, additional non-core asset sales,
the return of collateral associated with the trade book wind-down
and improvement of utility results through operational
restructuring and rate adjustments would lead to an improvement in
credit quality.

Aquila owns and operates electric and gas distribution networks in
seven Midwestern states as well as non-regulated operations that
continue to wind down.  Electric operations consist of vertically
integrated electric utilities serving 445,890 customers in
Colorado, Kansas and Missouri.  Aquila owns or leases 2,075MW of
electric generation capacity, which provides approximately 60% of
the electricity required to serve its customer load.  The balance
of load is served through long term power purchase agreements and
spot market electricity purchases.  Gas operations consist of gas
distribution utilities serving 900,777 customers in Colorado,
Iowa, Kansas, Michigan, Minnesota, Missouri and Nebraska. The gas
utilities own 1,569 miles of gas transmission pipelines and 19,301
miles of gas distribution mains and service lines.  Non-regulated
operations are mainly conducted through the Merchant Services
subsidiary and consist of peaking merchant generation plants, the
Elwood tolling contract, Everest Communications and a legacy
trading book.

Ratings affirmed by Fitch:

   Aquila

      -- Senior secured 'B+';
      -- Senior unsecured 'B-';
      -- Rating Outlook revised to Stable.


BAYOU STEEL: Reorganized Co. Posts FY '04 3rd Qtr $6.1M Net Income
------------------------------------------------------------------
Bayou Steel Corporation reported its financial results for its
third fiscal quarter and the nine months ending June 30, 2004.

Bayou Steel emerged from bankruptcy pursuant to a plan of
reorganization that became effective on February 18, 2004.
Accordingly, for accounting purposes, financial statements for
periods after February 18, 2004 related to a new reporting entity
in many respects are not directly comparable to prior periods of
the old reporting entity.  Among other changes, there have been
substantial reductions in debt and revaluations of assets and
other liabilities.

The Company reported net income for the third quarter of fiscal
2004 totaling $6.1 million compared to a net loss for the
Predecessor Company of $3.6 million for the same prior year
quarter.  For the nine months ended June 30, 2004, the Company
earned $7.9 million from February 18, 2004 through June 30, 2004
and the Predecessor Company reported $15.8 million in income,
including $19.3 million in reorganization adjustments, from
October 1, 2003 through February 17, 2004.  For the prior year
comparable nine months, the Predecessor Company lost
$30.2 million.

Third quarter sales for fiscal 2004 were $59.3 million on
shipments of 118,734 tons.  This was sharply higher than the
$37.7 million in sales on shipments of 120,100 tons for the prior
year third quarter and this measure was not affected by the
reorganization.  Average selling prices increased $186 per ton or
60% compared to the third fiscal quarter of fiscal 2003 and
$90 per ton or 22% compared to the second quarter of fiscal 2004.  
The selling price increase has generally been related to the
sharply escalating prices for scrap and the increasing prices for
alloys and fuel, which the Company has been able to pass through
to its customers because of strong demand for the Company's
products.

Jerry M. Pitts, President and CEO of Bayou Steel Corporation
commented,  "The Company's recent results reflect continued strong
pricing throughout the period.  We expect pricing strength to
continue in our fourth fiscal quarter.  While we expect that costs
will continue to rise, we do expect pricing to keep pace with
these increases."

Mr. Pitts continued, "Our efforts are focused toward building a
solid foundation so that we can be competitive and profitable not
only in this favorable market environment but also when the
business enters a downturn."

Headquartered in Dallas, Texas, Bayou Steel Corporation
manufacturers light structural and merchant bar products in
LaPlace, Louisiana and Harriman, Tennessee.  The Company also
operates three stocking locations along the inland waterway system
near Pittsburgh, Chicago, and Tulsa.  The Debtors filed for
chapter 11 protection on January 22, 2003 (Bankr. N.D. Texas Case
No. 03-30816) and emerged from bankruptcy under a plan of
reorganization that became effective on February 18, 2004.  That
plan wiped more than $100 million from Bayou's balance sheet.  
Patrick J. Neligan, Jr., Esq., at Neligan, Tarpley, Andrews &
Foley, LLP, represent the Debtors in their restructuring efforts.


BEA CBO: Fitch Affirms Low-B Ratings on 2 Classes & Junks 2 Others
------------------------------------------------------------------
Fitch Ratings affirms the rating of two classes of notes issued by
BEA CBO 1998-1, Ltd./Corp., which closed May 21, 1998.  These
rating actions are effective immediately:

   -- $99,669,909 class A-2A notes affirms at 'B-';

   -- $17,424,809 class A-2B notes affirms at 'B-'.

The rating for the $26,000,000 class A-3 remains at 'CC'.  In
addition, the rating for the $45,000,000 class B remains at 'C'.

BEA 1998-1 is a collateralized bond obligation -- CBO -- managed
by Prudential Investment Management, Inc.  The collateral of BEA
1998-1 is composed of high yield bonds invested in non-emerging
markets corporate bonds and emerging markets corporate debt.
Payments are made semi-annually in June and December and the
reinvestment period ended in December 2002.  Included in this
review, Fitch discussed the current state of the portfolio with
the asset manager and its portfolio management strategy.

According to the July 4, 2004 trustee report, the portfolio
includes $16.46 million (15.15%) in defaulted assets.  The class A
overcollateralization test is failing at 72.00% with a trigger of
120.00% and the class B overcollateralization test is failing at
46.77% with a trigger of 109.00%.

The ratings of the class A-2A and A-3 notes address the likelihood
that investors will receive full and timely payments of interest,
as per the governing documents, as well as the stated balance of
principal by the stated maturity date.  The rating of the class A-
2B notes addresses the likelihood that investors will receive the
aggregate outstanding amount of principal by the stated maturity
date.  The rating of the class B notes addresses the likelihood
that investors will receive ultimate and compensating interest
payments, as per the governing documents, as well as the stated
balance of principal by the stated maturity date.

Fitch will continue to monitor BEA 1998-1 closely to ensure
accurate ratings.  Deal information and historical data on BEA
1998-1 is available on the Fitch Ratings web site at
http://www.fitchratings.com/


BELL CANADA: Digital Bundle Customers Can Now Earn Aeroplan Miles
-----------------------------------------------------------------
Aeroplan, Canada's leading loyalty program and Bell Canada,
Canada's leading communications company, entered into a national,
multi-year, multi-channel relationship that will provide Aeroplan
members with another innovative way to accumulate Aeroplan Miles.

This partnership will offer Aeroplan members who subscribe to the
Digital Bundle from Bell the opportunity to accumulate 1 Aeroplan
Mile for every $1 spent on a combination of high-speed Internet,
wireless and digital television services.  Aeroplan members will
be able to take advantage of this mileage accumulation opportunity
with Bell starting in November 2004.

"Our new relationship with Bell Canada is a strategic and powerful
affirmation of Aeroplan's brand promise, our continued expansion
as a loyalty program and our capability to attract high calibre
partners who are leaders in their respective markets," said Rupert
Duchesne, President and Chief Executive Officer, Aeroplan.  
"Aeroplan members have told us that they want new opportunities to
earn valuable Aeroplan Miles with premier brands like Bell Canada;
[the] announcement is the first in a series of partner
relationships planned for the coming year that are designed to
respond to the needs of our members."

In addition to potentially benefiting Aeroplan's millions of
members, this partnership provides significant growth potential
for Aeroplan as it pursues its business mandate to acquire
partners in each major segment of the retail, service, small
business and corporate marketplace.

"Bell Canada continues to innovate and deliver new ways of
providing value to its customers who expect simple, one-stop
shopping.  Partnering with Aeroplan to deliver Aeroplan Miles to
customers of the Digital Bundle from Bell shows our appreciation
for their on-going loyalty," said Alek Krstajic, Chief Marketing
Officer, Consumer Markets, Bell Canada.  In addition to the
savings offered with the Digital Bundle, Bell customers who
subscribe to more than one service such as wireline, wireless,
Internet, or digital television will receive comprehensive billing
details on Bell's One Bill.  Customers can choose automatic
withdrawal, cheque, phone, Internet, or ATM payment methods.

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.

Aeroplan, a wholly owned subsidiary of Air Canada, is known as one
of the most rewarding loyalty programs in the industry.  Aeroplan
has been voted the world's Best Frequent Flyer Program for the
second consecutive year at the 2003 OAG (Official Airline Guide)
Airline of the Year Awards in April 2003.


BRAND SERVICES: S&P Cuts Rating to B Following Covenant Violations
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on scaffolding service provider Brand Services Inc. to 'B'
from 'B+'.  The outlook is negative.

The outlook is negative pending a review of the company's amended
financial covenants in its bank credit facility.

Chesterfield, Missouri-based Brand had about $290 million of debt
as of June 30, 2004.

"The rating action follows Brand's disclosure that during the
second quarter, the company violated the minimum interest coverage
and maximum leverage ratio under its senior secured credit
facility," said Standard & Poor's credit analyst Steven K. Nocar.
"Although the company received a waiver for the second-quarter
violation, the company projects noncompliance with these covenants
for the period ended Sept. 30, 2004," he continued.

The downgrade reflects:

   -- Profitability and free cash flow metrics that have
      underperformed expectations when Standard & Poor's raised
      its ratings in late 2002.  Brand had been expected to reduce
      debt by at least $60 million by year-end 2004; to date,
      Brand has paid down about only $25 million.  Consequently,
      expected improvement in credit measures has not been
      realized.

   -- Concerns about the medium-term financial performance of the
      company.  While Brand is expected to receive waivers to
      cover the next two periods, the covenant violations are of
      particular concern as refinery maintenance activity was
      unusually heavy during the first quarter of this year.  
      Although maintenance activity is expected to pick up again
      by the fourth quarter of 2004 and remain fairly robust into
      2006, scaffolding demand could fall significantly after
      2006, as the refining industry reduces its clean-fuels
      spending.  

The negative outlook reflects the uncertainty regarding the
outcome of Brands credit facility covenant negotiations.  If Brand
successfully amends its credit facility to provide for more
flexible financial covenants, Standard & Poor's would likely
revise the outlook to stable. Conversely, the ratings could be
downgraded if the borrowing capacity under the company's credit
facility becomes restricted or the financial covenants are
insufficiently relaxed such that the company would likely confront
a repetitive stream of covenant breaches.


BREUNERS HOME: Wants to Employ Pachulski Stang as Attorneys
-----------------------------------------------------------
Breuners Home Furnishings Corp., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware for permission
to hire Pachulski, Stang, Ziehl, Young, Jones & Weintraub PC as
their bankruptcy Counsel.

In preparing for its representation of the retailer, Pachulski
Stang acquired familiarity with the Debtors' business affairs and
many potential legal issues that may arise in the context of their
chapter 11 cases.

Pachulski Stang will:

    a) provide legal advice with respect to their powers and
       duties as debtors-in-possession in the continued
       operation of their business and management of their
       properties;

    b) prepare and pursue motions for the approval of procedures
       relating to the sales of the Debtors' assets;

    c) prepare and pursue confirmation of a plan and approval of
       a disclosure statement;

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

    e) appear and protect the interests of the Debtors before
       the Court; and

    f) perform all other legal services for the Debtors which
       may be necessary and proper in these proceedings.

The principal attorneys and paralegals designated to represent the
Debtor and their current standard hourly rates are:

              Professionals              Hourly Rate
              -------------              -----------
              Richard M. Pachulski          $675
              Laura Davis Jones              595
              Bruce Grohsgal                 435
              Jeffrey N. Pomeranz            465
              Werner Disse                   390
              Jonathan J. Kim                375
              J. Rudy Freeman                325
              Shannon Brooks (paralegal)     150
              Camille Ennis (paralegal)      135

To the best of the Debtors knowledge, Pachulski Stang is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
  
Headquartered in Lancaster, Pennsylvania, Breuners Home --
http://www.bhfc.com/-- is one of the largest national furniture  
retailers focused on the middle to upper-end segment of the
market.  The Company, along with its debtor-affiliates, filed for
chapter 11 protection on July 14, 2004 (Bankr. Del. Case No.
04-12030).  Liquidators Great American Group, Gordon Brothers,
Hilco Merchant Resources, and Zimmer-Hester) were brought on board
within the first 30 days of the bankruptcy filing to conduct
Going-Out-of-Business sales at the furniture retailer's 47 stores.
Bruce Grohsgal, Esq. and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young & Jones represent the Debtors in their
restructuring efforts.  The Company reported more than  
$100 million in assets and liabilities when it sought protection  
from its creditors.


BRIAZZ: Wants Open-Ended Deadline to Decide on Unexpired Leases
---------------------------------------------------------------
Briazz, Inc., asks the U.S. Bankruptcy Court for the Western
District of Washington at Seattle for more time to determine
whether to assume, assume and assign, or reject its unexpired
nonresidential real property leases.

The Debtor tells the Court that at this point, it is unable to
determine the necessity or propriety of assuming the leases.

The Debtor is actively working towards the preparation of a Plan
of Reorganization.  Briazz reminds the Court that the Debtor-in-
Possession financing facility requires the Company to confirm a
plan of reorganization by December 31, 2004.  

Consequently, the Debtor asks the Court for an extension of time
to make lease-related decisions through the earlier of:

   (a) the confirmation of a Plan of Reorganization; or

   (b) December 31, 2004

Headquartered in Seattle, Washington, Briazz Inc. --
http://www.briazz.com/-- serves fresh, high-quality lunch and  
breakfast foods and between-meal snacks from company owned cafes
in urban markets.  The Company filed for chapter 11 protection
(Bankr. W.D. Wash. Case No. 04-17701) on June 7, 2004.  Cynthia A.
Kuno, Esq., and J. Todd Tracy, Esq., at Crocker Kuno Ostrovsky
LLC, represents the Company in its restructuring efforts.  When
the Debtor filed for protection from its creditors, it listed
$5,400,000 in assets and $12,200,000 in liabilities.


CATHOLIC CHURCH: Court Approves AICCO Financing Agreement
---------------------------------------------------------
The Archdiocese of Portland in Oregon asks the U.S. Bankruptcy
Court for authority to enter into a secured insurance premium
finance agreement with A.I. Credit Corp., or its subsidiary,
AICCO, Inc.  The Archdiocese of Portland Debtor needs to pay
premiums for various insurance policies, including property,
general liability and workers' compensation.  The Archdiocese
wants to stretch those premium payments over time to avoid
depleting its available cash resources.

The Court authorizes the Archdiocese of Portland in Oregon to
grant A.I. Credit Corp. or its subsidiary, AICCO, Inc., a first
priority security interest in the Policies, including:

   (a) all funds that is or may become due under the Financing
       Agreement because of a loss under the Policies that
       reduces unearned premiums, subject to the interest of any
       applicable mortgagee or loss payee;

   (b) any return of premiums or unearned premiums under the
       Policies; and

   (c) any dividends that may become due the Debtor in connection
       with the Policies.

In the event that the returned or unearned premiums or other
amounts due under the Policies are insufficient to pay the total
amount owing by the Debtor to AICCO, any remaining amount owing to
AICCO, including reasonable attorney's fees and costs, will be an
allowed claim in the Debtor's case with priority as an
administrative expense.

The Lien granted to AICCO in connection with the Policies will be
senior to any security interests or liens granted to any other
secured creditors in the Debtor's case.

Because AICCO has extended credit to the Debtor in good faith, the
reversal or modification of these provisions on appeal will not
affect the validity of the debt owed to AICCO or the priority of
its Liens.

The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.  
Thomas W. Stilley, Esq. and William N. Stiles, Esq. of Sussman
Shank LLP represent the debtor in its restructuring efforts.  In
its Schedules of Assets and Liabilities filed with the Court on
July 30, 2004, the Portland Archdiocese reports $19,251,558 in
assets and $373,015,566 in liabilities.  (Catholic Church
Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


CHAPCO CARTON: Wants to Retain Adelman & Gettleman as Counsel
-------------------------------------------------------------
Chapco Carton Company asks the U.S. Bankruptcy Court for the
Northern District of Illinois for authority to retain Adelman &
Gettleman as its bankruptcy counsel.

Adelman & Gettleman will:

    a) provide the Debtor legal advice with respect to its
       powers, duties, rights and obligations as
       debtor-in-possession in the continued management of its
       property an affairs;

    b) attend meetings and negotiate with representatives of
       creditors and other parties in interest;

    c) assist the Debtor in the formulation, preparation,
       implementation and consummation of a plan of
       reorganization and disclosure statement, if necessary or
       appropriate, and all related agreements and/or documents
       and to take any actions necessary to achieve confirmation
       of such plan;

    d) examine and take all actions necessary to protect and
       preserve the Debtor's estate, including the prosecution
       of such litigation as may be necessary or appropriate on
       behalf of the estate;

    e) prepare on behalf of the Debtor, such applications,
       motions, complaints, orders, reports and other legal
       papers as may be necessary; and

    f) perform all other legal services and provide such legal
       advice to the Debtor as necessary.

The principal attorneys who will represent the Debtor and their
current hourly billing rates are:

              Professionals           Rates
              -------------           -----
              Howard L. Adelman       $395
              Chad H. Gettleman        395
              Henry B. Merens          395
              Brad A. Berish           365
              Mark A. Carter           365
              Adam P. Silverman        365
              Nathan Q. Rugg           245
              Stanley F. Orzula        215
              Sam Banayan              215

Mr. Adelman, who leads the team in this engagement, assures the
Court that the Firm is a "disinterested person" as that term is
defined in Section 101(14) of the bankruptcy code.

Headquartered in Bolingbrook, Illinois, Chapco Carton
-- http://www.chapcocarton.com/-- sells and distributes folding  
cartons used for retail packaging in food, candy, office supplies
and automotive parts industries.  The Company filed for chapter 11
protection on July 13, 2004 (Bankr. N.D. Ill. Case No. 04-26000).   
When the Debtor filed for protection from its creditors, it listed
$15,232,256 in total assets and $19,220,379 in total debts.


CHAS COAL: Creditors Must File Proofs of Claim by September 20
--------------------------------------------------------------
The United States Bankruptcy Court for the Eastern District of
Kentucky, London Division, set September 20, 2004, as the deadline
for all creditors owed money on account of claims arising prior to
June 17, 2004, by Chas Coal, LLC, to file their proofs of claim.

Creditors must file written proofs of claim and claim forms must
be delivered to:

            United States Bankruptcy Court Clerk
            Post Office Box 1111,
            Lexington, Kentucky 40588-1111

Creditors who have claims against the Debtor but fail to file
their proofs of claim on or before the Bar Date will be forever
barred from asserting their claims.

Headquartered in London, Kentucky, Chas Coal, LLC --
http://www.chascoal.com/-- is a provider of high quality, low  
sulfur Eastern Kentucky coal.  The Company filed for chapter 11
protection on June 17, 2004 (Bankr. E.D. Ky. Case No. 04-60972).
Robert Gregory Lathram, Esq., in London, Kentucky, represents the
Debtor in its restructuring efforts.  When the Company filed for
protection from its creditors, it listed $28,080,624 in total
assets and $8,601,895 in total debts.


CHIQUITA BRANDS: Names Jay Braukman as New Chief Financial Officer
------------------------------------------------------------------
Chiquita Brands International, Inc., (NYSE: CQB) named John (Jay)
W. Braukman III, 50, as its new senior vice president and chief
financial officer.  Mr. Braukman will be responsible for all
aspects of the company's financial operations worldwide.  Mr.
Braukman succeeds James B. Riley, who will remain with the company
through the end of August to ensure a smooth transition.

In addition, Chiquita promoted Manuel Rodriguez to senior vice
president of government and international affairs.  The company
also announced that the heads of its Fresh Cut Fruit and Asian
operations were leaving the company.

"Since joining Chiquita earlier this year, one of my first
priorities has been to ensure that we have the right people in the
right positions throughout the company," said Fernando Aguirre,
chairman and chief executive officer.  "I am dedicated to building
a high-performance organization as we pursue growth opportunities
and the company's transformation into a more consumer- and
marketing-centric organization."

     Mr. Braukman:
     Former GE and Telecom Industry Veteran Brings Diverse
     Financial and International Experience to CFO Role

"Jay has a very strong financial background with excellent
experience derived from working in both large multinational and
emerging growth companies, including 25 years with one of the
world's premier companies, General Electric," Mr. Aguirre said.
"He brings extensive international experience and has held a
number of key financial and accounting positions during his
career.  I look forward to him joining the Chiquita team."

"I'm delighted to come to Chiquita and look forward to helping the
company increase shareholder value," Mr. Braukman said.  "Chiquita
has a solid financial foundation that offers many prospects to
leverage its tremendous brand into new growth opportunities."

Prior to joining Chiquita, Mr. Braukman served as chief operating
officer of ITC DeltaCom, a provider of integrated communications
services in the southeastern United States, since its merger with
BTI Telecom in October 2003.  Before the ITC^DeltaCom and BTI
merger, Mr. Braukman had served as BTI's chief operating officer
and chief financial officer.  From March 2000 to December 2001, he
had served as executive vice president and chief financial officer
for Rhythms NetConnections, a broadband service provider.

Before joining Rhythms, Mr. Braukman served as a senior finance
officer at a variety of General Electric businesses, including
chief financial officer of GE's $8.5 billion Information
Technology Solutions business unit, which had operations and a
workforce of 13,000 across the United States, Mexico, Canada,
Brazil, Europe and Australia.

Mr. Braukman also served as chief financial officer of GE's
Italian operations, Nuovo Pignone, a global diversified business
with sales of $1.6 billion and eight manufacturing locations.  As
CFO for Nuovo Pignone, he was responsible for the financial
leadership of GE Power Systems Europe as well as the European
Finance Council.  He also served as CFO of GE's Transportation
Systems business based in Pennsylvania, where he provided
financial and business development leadership for a $1.4 billion
business serving the transportation industry worldwide.

Mr. Braukman holds a bachelor's degree in business administration
with a major in accounting from the University of Cincinnati.

     Mr. Rodriguez: Successfully Managing
     International Regulatory Strategies

Chiquita also named Manuel Rodriguez, 55, senior vice president of
government and international affairs.  Rodriguez becomes a member
of the company's Management Committee of senior executives who
provide strategic counsel and report directly Aguirre.

"Manuel has demonstrated tremendous leadership in successfully
managing complex governmental relationships and labor negotiations
for Chiquita for many years," said Mr. Aguirre.  "He has been
instrumental in directing our strategy and conveying Chiquita's
positions on key local and international regulatory and labor
matters.  This promotion is well-deserved."

Mr. Rodriguez is responsible for Chiquita's relationships with
governmental and regulatory agencies worldwide, including
directing the company's strategy with regard to the European Union
as it moves toward a tariff-only banana import regime.  In
addition, Rodriguez will continue to manage the company's labor
relations, in particular, its relationships with key international
and regional unions, including the International Union of
Foodworkers -- IUF -- and Coordinating Committee of Banana
Workers' Unions -- COLSIBA.

Most recently, Mr. Rodriguez served as Chiquita's vice president
of government affairs and associate general counsel.  He began his
career with the company in 1980, having served in various senior
legal and labor relations positions.  Mr. Rodriguez earned his
master of laws degree from Columbia University and his J.D. degree
from the University of Puerto Rico.  He received a bachelor of
science degree in psychology and a certificate in Latin American
Studies from St. Joseph's College.

                  Operational Leaders for
          Fresh Cut Fruit & Asia to Leave Company

The company announced two additional management changes: Jill
Albrinck, senior vice president of Fresh Cut Fruit, and Chris
Augustijns, president of Chiquita Fresh Group - Asia, are leaving
the company.

Ms. Albrinck joined Chiquita in 2002 to lead the company's
strategy and new business development efforts, bringing with her
an excellent record of accomplishment with turnarounds and
corporate growth strategies.  In this role, she also led the
company's performance improvement program that delivered valuable
cost reductions.  Later, Ms. Albrinck assumed the leadership for
the company's Processed Fruit Ingredients business and Chiquita
Fresh Cut Fruit, a new business that was launched in the
Midwestern United States in November 2003.

"Jill has made significant contributions to Chiquita since the
company emerged from bankruptcy more than two years ago, and we
owe her a great deal as she helped advance the company's
turnaround and led the launch of one of our growth opportunities -
Chiquita Fresh Cut Fruit," Mr. Aguirre said.  "Our Chiquita Fresh
Cut Fruit business is up and running with good feedback from
customers and consumers.  We are now looking for a new leader to
take this business to the next level."  The company announced that
Mr. Aguirre would lead this business on an interim basis until new
leadership is named.

Mr. Augustijns, hired at Chiquita in July from Coca-Cola, resigned
his position to return to Coke.  The soft-drink company pursued
Mr. Augustijns after his departure and convinced him to return to
Coca-Cola.

"We will continue our growth plans in the region with the strong
team currently in place," said Mr. Aguirre.  "We still have a
robust operation in Asia and an excellent joint venture partner.  
We will reopen our search for a new leader for this business  
immediately."


CIRTRAN CORP: Reports $4 Mil. Stockholders' Deficit at June 30
--------------------------------------------------------------
CirTran Corp. (OTC BB: CIRT), an international full-service
contract electronics manufacturer of printed circuit board
assemblies, cables and harnesses, has reported a gross revenue of
$1,924,242 for the second quarter of 2004, which represents a 361%
increase over the same period from the previous year, 2003.  Year-
to-date gross revenue is recorded at $2,603,604, which represents
a 279% increase over the same period from the previous year, 2003.

Iehab J. Hawatmeh, president and CEO of CirTran Corp., commented,
"We are very pleased with the company's second quarter revenues
and financial results.  We attribute this to improved efficiency
and effective marketing and we stay committed to continuing to
improve our operational efficiency while we activate more
marketing programs to sustain our long- and short-term growth."

The company is pleased to announce the following financial
highlights for the second quarter of 2004:

   -- Gross revenue for the second quarter up 361% compared to
      same period last year.

   -- Gross revenue for the first six months up 279% compared to
      same period last year.

   -- Gross profit for the second quarter up 148% compared to same
      period last year.

   -- Gross profit for the first six months up 164% compared to
      same period last year.

Net loss for the second quarter 2004 of $361,964 includes a
$315,000 expense for acquisition and organizational costs for the
startup of CirTran-Asia division.

   -- Accounts receivables up more than 1,000% since Dec. 31,
      2003.

   -- Total assets for the second quarter up more than 82% since
      Dec. 31, 2003.

   -- Accounts payable for the second quarter down more than 27%
      since Dec. 31, 2003.

   -- Stockholders deficit for the second quarter down more than
      18% since Dec. 31, 2003.

   -- Sales backlog for the second quarter in excess of $8,000,000
      (company record).

Trevor M. Saliba, executive vice president of worldwide business
development of CirTran Corp., commented, "CirTran's unique
marketing program and sales model continues to prove itself as
evidenced by the second quarter sales increase and our record
backlog.  We are projecting to continue to see increased sales
each new quarter based on our current backlog and pipeline of
projects that we are in the final stages of negotiation."

Pursuant to the multiple multimillion-dollar contract wins to
date, the company's backlog is currently in excess of $8,000,000
and will increase accordingly during the third and fourth quarters
of 2004.

                     About CirTran Corp.  

Founded in 1993, CirTran Corp. has established itself as a premier  
full-service contract electronics manufacturer by building printed  
circuit board assemblies, cables, and harnesses to the most  
exacting specifications.  CirTran is headquartered in Salt Lake  
City with a state-of-the-art 40,000-square-foot facility.  CirTran  
also provides "just-in-time" inventory management techniques that  
minimize the OEM's investment in component inventories, personnel  
and related facilities, thereby reducing costs and ensuring speedy  
time to market.  For further information about CirTran, visit the
company's Web site located at http://www.cirtran.com/  

At June 30, 2004, CirTran Corp.'s balance sheet showed a
$4,015,036 stockholders' deficit, compared to a $4,941,251 deficit
at December 31, 2003.


CITRICO INTERNATIONAL: Section 304 Petition Summary
---------------------------------------------------
Petitioners: Kenneth Krys and Christopher Stryde, as
             provisional joint liquidators of the Debtor

Debtor: Citrico International Limited
        Ugland House
        P.O. Box 309 G.T.
        South Church Street
        George Town Grand Cayman
        Cayman Islands

Case No.: 04-73442

Type of Business: The Debtor manufactures and markets citrus
                  products for the food, beverage,
                  pharmaceutical and nutraceutical industries.

Section 304 Petition Date: August 17, 2004

Court: Northern District of Georgia (Atlanta)

Judge:

Petitioners' Counsels: A. Alexander Teel, Esq.
                       James C. Cifelli, Esq.
                       Lamberth, Cifelli, Stokes & Stout, PA
                       East Tower, Suite 550
                       3343 Peachtree Road, North East
                       Atlanta, GA 30326-1022
                       Tel: 404-262-7373

Estimated Assets: $10 Million to $50 Million

Estimated Debts:  $50 Million to $100 Million


COMPRESSION POLYMERS: Moody's Puts B1 Rating on $23M Loan Add-on
----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Compression
Polymers Holdings, LLC, and its subsidiary Compression Polymers
Corp., a manufacturer of engineered extruded plastic sheet
products.  Moody's has also assigned a B1 rating to the
$23 million add-on to the existing senior secured term loan.  The
rating outlook is stable.

Ratings affirmed:

   -- B1 for the $20 million senior secured revolver, due 2009;

   -- B1 for the $90 million first-lien senior secured term loan,
      due 2010;

   -- B2 for the $30 million second-lien senior secured term loan,
      due 2010;

   -- B1 senior implied rating; and

   -- B3 senior unsecured issuer rating.

Rating assigned:

   -- B1 for the $23 million add-on to first-lien senior secured
      term loan, due 2010;

Proceeds from the $23 million add-on will be used to finance a $23
million dividend payment to existing shareholders, which consist
of Whitney & Co., LLC, Clearview Capital, LLC, The Crane Group and
company management. This dividend follows a $30 million dividend
payment made in February 2004 to shareholders.

Moody's says that the rating affirmation considers Compression
Polymers' strong financial performance in the first half of 2004
and the likelihood that this level of performance will be
sustained over the next 18 to 24-month time period. For the first
half of 2004, sales increased 33% over the prior year period while
EBITDA was up 31%. The solid revenue growth was driven primarily
by very strong sales of synthetic lumber products. Moody's
believes that geographic expansion and increasing acceptance of
Compression Polymers' synthetic lumber products underpin its
strong growth potential over the medium term.

On the other hand, the ratings continue to be constrained by
Compression Polymers' high exposure to rising resin prices, modest
cash flow generation, small size and significant customer
concentration risk. Rising resin prices continue to pressure
Compression Polymers' profit margins as the company only has
limited ability to pass through cost increases to its customers.
This, coupled with higher working capital investment to support
revenue growth, is likely to continue to depress cash flow
generation over the near to medium term.

The stable rating outlook balances the company's strong growth
potential and in particular, that of its synthetic lumber
business, against the risk of further de-capitalization by
shareholders that could constrain its financial flexibility and
potential improvement in its credit profile.

The B1 rating on the $20 million revolver and the $113 million
first-lien senior secured credit facilities reflects their
seniority in the company's debt structure and the support provided
by junior debt. The B2 on the $30 million second-lien senior
secured term loan reflects its subordination to first-lien debt
and lack of collateral support. Both the first-lien and second-
lien facilities will be governed by the same covenant package and
secured by a first-lien and second-lien, respectively, on the
capital stock as well as all domestic assets of the company and
its subsidiaries. All facilities will be guaranteed on a senior
secured basis by all of the company's current and future domestic
subsidiaries and Holdings.

Headquartered in Moosic, Pennsylvania, Compression Polymers
Holdings, LLC is a manufacturer of engineered extruded plastic
sheet products.


COTT CORP: Moody's Upgrades Sr. Sub. Rating to Ba3 & Debt to Ba1
----------------------------------------------------------------
Moody's Investors Service upgraded the ratings for Cott
Corporation recognizing the company's strong and consistent
financial and operating performance throughout the recent past and
affirming Moody's expectation of continued success over the
ratings horizon.  

The ratings reflect Cott's proven abiity to achieve consecutively
strong profitability (EBIT return on assets at or above 15%) and
cash flow metrics (free cash flow to debt approaching 20%) while
maintaining good earnings and asset quality.  Financial leverage
has reduced significantly over the past two years as Debt to EBIT
is now approximately 2 times (approximately 1.6 times EBITDA) down
from 4 times (3 times EBITDA).  The ratings incorporate:

   (1) Cott's acquisitive growth strategy;

   (2) albeit with some financial limitations; and

   (3) are supported by the company's record of prudent purchases
       and well executed integration.

The ratings also acknowledge Cott's strong position in the
retailer brands market, which continues to grow share and
profitability to retailers globally.  The ratings are limited by
capacity constraints and the related adverse effects on margins
(i.e. increased distribution and manufacturing costs from
outsourcing to co-packers) caused by greater than anticipated
volume.  Also, the ratings reflect some concern about the normal
business challenges of weather, increased raw materials, interest,
and currency costs.

In Moody's opinion, liquidity should be very good in the near term
as Cott maintains strong net cash generated by operations, which
covers capital expenditures - including growth spending.  There
are no near term maturities (although, the credit facility matures
in December 2005) and cash on hand, across geographies, averages
approximately $28 million.  Average availability under the
$150 million of no less than approximately $60 million (net of
roughly $4 million letters of credit outstanding) should remain
accessible given Moody's expectation of ample cushion under Cott's
financial covenants throughout each quarter in the near term,
absent event risk.  Liquidity is further supported by the ability
to access to the capital markets.

The change in the ratings outlook to stable from positive at prior
rating levels reflects tolerance for modest adverse fluctuations
in credit statistics before triggering a negative outlook.  
Specifically, modest stretching of metrics for a limited amount of
debt-funded acquisitions, which are within Cott's core
competencies, would likely be acceptable at current rating levels.  
Relatively small acquisition baskets in the current credit
agreement provide comfort.  Material erosion in margins or overall
profitability, increases in cash consumption or financial
leverage, or integration difficulties could warrant a negative
ratings outlook.

Moody's upgraded the following:

   -- Approximately $150 million senior secured revolver, maturing
      in December 2005, to Ba1 from Ba3 (revolver was upsized from
      $75 million and consists of $125 million in the US and
      Canada plus GBP 15 million or aproximately equivalent USD 25
      million);

   -- $275 million 8% senior subordinated note, due 2011, to Ba3
      from B2;

   -- Senior implied rating to Ba2 from Ba3; and

   -- Senior unsecured issuer rating to Ba3 from B1.

Ratings outlook changed to stable from positive at prior rating
levels.

The upgrade of the revolver rating to Ba1 from Ba3 reflects ample
collateral coverage in a distress scenario given its priority
position in the capital structure.  These, combined with the
apparently good quality of collateral and the presence of debt and
tangible equity cushion beneath the secured bank debt, warrant
notching above the Ba2 senior implied rating.

The upgrade of the senior subordinated note to Ba3 from B2, with
the compression of the notching to one level below the Ba2 senior
implied rating from two levels previously, reflects the perceived
strength of the enterprise and recovery value in the event of
default.  The Ba3 rating incorporates the contractual
subordination to senior debt (consisting of approximately
$80 million revolver outstandings, approximately $7.5 million
capital leases, plus approximately $185 million of accounts
payable and accrued liabilities as of July 3, 2004).

Headquartered in Toronto, Ontario, Cott Corporation is the world's
largest retailer brand soft drink supplier with a leading position
in take-home carbonate soft drink markets in the US, Canada, and
the UK.  For the last twelve months ended July 3, 2004, revenue
was approximately $1.6 billion, EBIT was approximately
$162 million, and EBITDA was approximately $225 million.


CROWN PACIFIC: Interfor Gets Court OK to Acquire Asset for $73.3M
-----------------------------------------------------------------
The U.S. Bankruptcy Court in Phoenix, Arizona approved the
acquisition of the sawmill assets of Crown Pacific Limited
Partners and its affiliates in the U.S. Pacific Northwest by
International Forest Products Limited (TSX IFP.A).

Interfor announced on July 9 that it entered into an agreement to
buy three Crown Pacific mills in Port Angeles and Marysville
Washington, and in Gilchrist Oregon for US$57.3 million, plus
working capital estimated at US$16 million.

The transaction is scheduled to close on Sept. 1, 2004.

"We are very pleased that this deal has been approved by the
courts," said Duncan Davies, Interfor's President and Chief
Executive Officer.  "This acquisition is consistent with our goal
of expanding geographically and expanding our product lines."

"We look forward to working with the Crown Pacific employees who
will be joining Interfor and to building on well-established
relationships with customers and vendors."

The addition of the Crown Pacific sawmills will increase
Interfor's total lumber capacity to almost 1.3 billion board feet
per year and add more than C$120 million to the Company's annual
sales revenue.  The mills have a combined annual capacity of
335 million board feet.

Interfor produces a diversified range of quality wood products for
sale to world markets.  The Company currently has six sawmills in
southern coastal British Columbia and one sawmill in the central
interior region of the province.  The Company also has four
remanufacturing facilities including one in Sumas, Washington.

Headquartered in Portland, Oregon, Crown Pacific Partners, L.P.,
is an integrated forest products company.  Crown Pacific owns and
manages approximately 524,000 acres of timberland in Oregon and
Washington, and uses modern forest practices to balance growth
with environmental protection.  Crown Pacific operates mills in
Oregon and Washington, which produce dimension lumber, and also
distributes lumber products through its Alliance Lumber operation.  
The Debtors filed for chapter 11 protection on June 29, 2003
(Bankr. D. Ariz. Case No. 03-11260).  Alisa C. Lacey, Esq., and C.
Taylor Ashworth, Esq., at Osborn Maledon, P.A., represent the
Debtors in their restructuring efforts.


DELTA AIR: Debt Restructuring Risks Prompts S&P's Junk Ratings
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Delta
Air Lines, Inc., including lowering the corporate credit rating to
'CCC' from 'CCC+', reflecting an increasing risk of an out-of-
court restructuring of debt.  The outlook is negative.

Delta announced a consent solicitation seeking permission from
holders of many equipment trust certificates and pass-through
certificates (but not enhanced equipment trust certificates) to
lift limitations on the airline's ability to buy and hold the
certificates in order "to provide Delta with greater flexibility
to effect a successful out-of-court restructuring."  Restructuring
of bond payments or a coercive exchange would be considered a
default and cause the company's corporate credit rating to be
lowered to 'D' -- default -- or 'SD' -- selective default.  

Ratings of equipment trust certificates and pass-through
certificates were lowered two notches, to 'CCC', the same level as
the revised corporate credit rating.  Ratings of most senior
classes of enhanced equipment trust certificates, which are
considered more difficult to restructure outside of bankruptcy,
were not lowered.

"Delta's consent solicitation provides the clearest signal yet
that the company will seek to restructure selected debt
obligations outside of bankruptcy," said Standard & Poor's credit
analyst Philip Baggaley.  The changes sought would make possible
certain types of debt restructuring, such as a tender offer or
exchange offer, if certificate-holders agree.

Separately, Delta's CEO, Gerald Grinstein, presented the
conclusions of an extensive strategic review and recommended a
turnaround plan to the company's board of directors.  Details were
not disclosed, but Mr. Grinstein said in a letter to employees
that it would involve further pay and benefit cuts for all
employees, and changes in the airline's routes, fleet, and fare
structure.

Liquidity, previously substantial, is dwindling rapidly, with
$2.0 billion of unrestricted cash at June 30, 2004, down from
$2.7 billion at Dec. 31, 2003.  The company indicated that it
expects its cash position to decline at a similar rate during the
second half of the year, which would imply year-end cash of
$1.5 billion.  Although this amount in itself would not
necessarily trigger a bankruptcy filing, expectations of further
cash losses during the seasonally weak first quarter might
persuade Delta to file for Chapter 11 unless it had secured the
labor concession it is seeking.

The outlook is negative.  Ratings could be lowered if Delta does
not make rapid progress toward significant cost reductions in its
negotiations with pilots, or if there are further moves toward
out-of-court debt restructuring.  In addition, material
deterioration in Delta's already weak financial profile could
trigger a downgrade.


DRESSER INC: June 30 Balance Sheet Upside-Down by $318.3 Million
----------------------------------------------------------------
Dresser, Inc., provided financial results for the quarter ended
June 30, 2004.  The Company recorded revenues of $495.9 million
and net income of $18.1 million, compared to revenues of
$394.9 million and a loss of $16.9 million during the comparable
period in 2003.  Year-on-year improvements in revenue and income
were recorded in all operating segments.  Approximately
$13.5 million of the year-on-year increase in revenue was due to
the previously announced acquisition of the distribution business
of Nuovo Pignone S.p.a. in June.

Steve Lamb, President and Chief Executive Officer of Dresser,
Inc., said, "We are pleased with the trend of improvements in our
business that started in the second half of 2003.  Our markets are
gradually turning more favorable in North America, while
international business remains robust.  Improving markets,
combined with the results from our restructuring and internal
operational improvement efforts, are helping to sustain the
positive momentum in our business."

Gross profit in the second quarter of 2004 was $143.4 million,
compared to $101.1 million for the first quarter of 2003.  
Increases were due primarily to higher revenues, cost reduction
efforts and lower restructuring and other expenses.  Gross margin
for the three-month period ended June 30, 2004, was 28.9%,
compared to 25.6% for the same period in 2003.  In 2003, gross
margins were adversely affected by a strike in the Company's
natural gas engine business.

Selling, Engineering, General and Administrative expenses of
$103.7 million in the second quarter of 2004 were 20.9% of
revenues, compared to SEG&A expenses of $95.1 million representing
24.1% of revenues in the same period last year.  In 2003, there
were expenses related to the acquisition of the assets of Tokheim
North America and re-audit costs that impacted SEG&A expenses.

Operating income in the second quarter of 2004 was $39.7 million,
an increase of $33.7 million from $6.0 million in the second
quarter of 2003.  Approximately $0.6 million of the increase was
due to the Nuovo Pignone distribution business acquisition.  
Operating margin in the first quarter of 2004 was 8.0%, compared
to 1.5% in the second quarter of 2003. During the second quarter
of 2004, the Company realized a $1.7 million gain from the sale of
excess land in Waukesha, Wisconsin, $1.8 million in favorable
settlements of legal matters, and a $1.6 million benefit from the
integration of Company-provided retiree prescription drug benefits
with recent changes to the Medicare program.  There was also a
$1.0 million write-off of an environmental indemnification, which
offset a portion of the gains.

The Company posted net income of $18.1 million for the quarter
ended June 30, 2004, compared to a net loss of $16.9 million for
the year-ago period.

EBITDA for the second quarter of 2004 was $51.8 million, an
increase of $29.2 million from $22.6 million in the same period
last year.

Cash and cash equivalents totaled $92.4 million on June 30, 2004,
compared to $102.2 million on June 30, 2003.

Borrowings under the Company's senior secured credit facility,
senior unsecured term loans, and senior subordinated notes were
$1,089.7 million at the end of the second quarter of 2004,
compared to $952.0 million at the end of the second quarter of
2003.  The Company financed the acquisition of the distribution
business, including certain retail fueling systems and gas
metering operations, of Nuovo Pignone in the second quarter by
borrowing $175 million under its senior secured credit facility as
an add-on to its existing term loan C.  Total debt, including
capital leases, on June 30, 2004, was $1,103.0 million compared to
$980.2 million on June 30, 2003.

Bookings for the quarter ended June 30, 2004 were $507.7 million,
up $59.3 million from bookings of $448.4 million in the quarter
ended June 30, 2003.  Bookings increased in all operating
segments.  Approximately $12.4 million in the bookings increase
was due to the Nuovo Pignone distribution business acquisition in
the quarter.

Backlog on June 30, 2004 was $559.7 million, compared to
$458.7 million on June 30, 2003.  Backlog increases were recorded
in all three operating segments, with $53.9 million of the
increase attributable to the Nuovo Pignone distribution business
acquisition.

At June 30, 2004, Dresser, Inc.'s balance sheet showed a
$318.3 million stockholders' deficit, compared to a $312.6 deficit
at December 31, 2003.

                Consolidated Second Quarter 2004 Results
                 Compared to First Quarter 2004 Results

Revenues of $495.9 million in the second quarter of 2004 were up
$59.6 million from revenues of $436.3 million in the first quarter
of 2004, with strong increases in the flow control and measurement
systems segments, partially offset by a decrease in the
compression and power systems segment.

Gross profit in the second quarter of 2004 was $143.4 million
compared to $124.4 million for the first quarter of 2004.  Gross
margin of 28.9% in the second quarter of 2004 was up slightly from
28.5% for the first quarter of 2004, primarily due to the benefits
of higher sales volume.

SEG&A expenses of $103.7 million were 20.9% of revenues in the
second quarter of 2004, down from $104.7 million or 24.0% of
revenues, in the first quarter of 2004.  The decrease was
primarily due to restructuring expenses and previously-announced
executive retirement and separation expenses in the first quarter
of 2004, partially offset by volume related increases.  There was
$1.3 million of restructuring expenses in the second quarter of
2004, compared to $3.5 million in the first quarter of 2004.

Operating income of $39.7 million for the quarter ended
June 30, 2004 was up $20.0 million from the $19.7 million recorded
in the quarter ended March 31, 2004. Operating margin was 8.0% in
the second quarter of 2004, compared to 4.5% in the first quarter
of 2004.

Net income of $18.1 million in the second quarter of 2004 improved
$36.5 million from the $18.4 million net loss in the first quarter
of 2004.  The first quarter of 2004 included a $16.9 million
write-off of deferred financing costs in conjunction with the
previously announced refinancing of the Company's senior secured
credit facility, in addition to the other charges described.

EBITDA in the second quarter of 2004 of $51.8 million increased by
$20.1 million from the $31.7 million recorded in the first quarter
of 2004.

Cash and cash equivalents totaled $92.4 million on June 30, 2004,
compared to $106.8 million on March 31, 2004.  Changes in
operating working capital (receivables, plus inventory, less
payables) resulted in a use of cash of approximately
$13.9 million, and capital expenditures totaled $15.6 million
during the second quarter of 2004.

Borrowings under the Company's senior secured credit facility,
senior unsecured term loans and senior subordinated notes were
$1,089.7 million at the end of the second quarter of 2004 compared
to $914.9 million of borrowings under the senior secured credit
facility and senior subordinated notes at the end of the first
quarter of 2004.  Total debt on June 30, 2004, was
$1,103.0 million, compared to $926.8 million on March 31, 2004.

Bookings of $507.7 million in the second quarter of 2004 were up
from bookings of $446.4 in the first quarter of 2004 mainly due to
market strength in measurement systems and compression and power
systems.  Flow control bookings were slightly down due to delays
in project business bookings.

Backlog increased to $559.7 million on June 30, 2004 from,
$486.3 million on March 31, 2004.  Increases in measurement
systems and compression and power systems were partially offset by
a slight decrease in flow control backlog.  The acquisition of the
Nuovo Pignone distribution business in June contributed
$53.9 million to backlog growth.

"Strengthening markets and normal seasonal increases provided good
revenue growth compared to the first quarter," stated Mr. Lamb.
"We also benefited from the acquisition of the distribution
business of Nuovo Pignone at the beginning of June.  Overall,
trends are favorable for our business and are expected to continue
throughout the year."

Continued Mr. Lamb, "Although our operational improvement efforts
are gaining traction, there are still many opportunities for us to
improve our business.  We continue to focus on improving our
margins by concentrating on our operational excellence efforts."

                  Consolidated First Half 2004
                      versus First Half 2003

For the six months ended June 30, 2004, revenues were
$932.1 million, compared to $766.3 million for the first half of
2003.  Increases were recorded in all three operating segments.
Contributing to the increase in revenues in the measurement
systems segment were the acquisition of Tokheim North America
assets in March of 2003 and the acquisition of the distribution
business of Nuovo Pignone in June of 2004.

Gross profit in the first half of 2004 improved to $267.8 million
from $201.0 million for the same period last year.  Increases were
due primarily to higher revenues, cost reduction efforts and lower
restructuring and other expenses.  Gross margin for the first six
months of 2004 was 28.7% compared to 26.2% in 2003.  In 2003 gross
margins were adversely affected by a strike in the natural gas
engine business.

Operating income was $59.4 million for the six months ended
June 30, 2004, compared to $17.3 million for the six months ended
June 30, 2003.  Operating margin in 2004 was 6.4% compared to 2.3%
in 2003.

Net loss for the first half of 2004 was $0.3 million compared to a
net loss of $23.0 million for the first half of 2003.

EBITDA for the six months ended June 30, 2004, was $83.5 million
compared to $48.4 million for the same period last year.

            Flow Control Revenues and Operating Income
                 Up Year-on-Year And Sequentially

In the Flow Control segment, revenues for the second quarter of
2004 were $295.7 million, up $47.7 million from $248.0 million in
the second quarter of 2003.  All product lines in the Flow Control
segment recorded increases from the year-ago period, partially
offset by $5.8 million of revenues in 2003 from an Italian valve
unit that was divested in the fourth quarter of 2003 as previously
announced.  There was a favorable impact from foreign currency
exchange rates in all product lines.

Gross profit of $87.3 million in the second quarter of 2004 was up
$15.4 million from $71.9 million in the second quarter of 2003,
primarily due to improved revenues and reduced restructuring
charges.  Gross margin of 29.5% in the second quarter of 2004 was
slightly improved from gross margin of 29.0% for the year ago
quarter.

Operating income of $21.4 million for the quarter ended
June 30, 2004, was up $2.3 million from operating income of
$19.1 million recorded in the same quarter last year.  Operating
margin in the second quarter of 2004 was 7.2%, compared to
operating margin of 7.7% in the second quarter of 2003.  Margins
were impacted by higher commissions and marketing expenses related
to revenue growth.

Bookings of $273.9 million in the second quarter of 2004 were up
slightly from $270.6 million in the second quarter of 2003.  
Increases in the control valve and pressure relief valve
businesses more than offset a decrease in bookings from the sale
of the Italian valve unit.

Backlog of $356.0 million on June 30, 2004 increased $7.4 million
from $348.6 million on June 30, 2003.

On a sequential basis, revenues in the second quarter of 2004 of
$295.7 million were up from $255.8 million recorded in the first
quarter of 2004 due to strengthening markets, improved throughput
and seasonal effects.

Gross profit of $87.3 million in the second quarter of 2004 was up
$14.0 million from gross profit of $73.3 million in the first
quarter of 2004 on increased sales and lower restructuring
expenses.  Gross margin of 29.5% in the second quarter of 2004 was
up from 28.7% in the first quarter of 2004.

Operating income of $21.4 million in the second quarter of 2004
was up $11.0 million from $10.4 million in the first quarter of
2004, primarily due to increased revenues and lower restructuring
expenses.  Operating margin in the second quarter of 2004 was
7.2%, compared to 4.1% in the first quarter of 2004.

Bookings of $273.9 million in the second quarter of 2004 were down
from bookings of $275.9 million in the first quarter of 2004,
mainly due to delays in project business.

Backlog of $356.0 million on June 30, 2004 decreased from
$371.4 million on March 31, 2004, primarily due to reduction of
excess backlogs.

Said Mr. Lamb, "Our natural gas solutions business saw improvement
in the U.S. market, while our control valve and pressure relief
valve businesses saw strengthening international demand in Europe
and Asia-Pacific.  We are positioning our flow control businesses
to take advantage of these favorable trends with a continuing
focus on operational efficiency improvements."

                 Measurement Systems Operating
                  Results Continue to Improve

On a year-on-year basis, second quarter 2004 Measurement Systems
revenues were $129.8 million, up $37.8 million from $92.0 million
in the corresponding period of 2003.  Increased revenues were
primarily due to the acquisition of the Nuovo Pignone distribution
business of $13.5 million, and higher U.S., European, and
Brazilian sales.

Gross profit of $37.0 million in the second quarter of 2004 was up
$16.1 million from gross profit of $20.9 million in the second
quarter of 2003.  Cost reduction efforts in North America and
Europe along with increases in sales were primarily responsible
for the gains.  Gross margin in the second quarter of 2004 was
28.5% compared to 22.7% in the second quarter of 2003.  Transition
costs associated with the acquisition of the assets of Tokheim
North America in March of last year impacted 2003 gross margins.


Operating income in the second quarter of 2004 was $18.2 million,
up $13.4 million from second quarter 2003 operating income of
$4.8 million, primarily due to volume effects and lower capacity
costs.  The acquisition of the Nuovo Pignone distribution business
contributed $0.6 million in 2004 operating income.  Operating
margin in the second quarter of 2004 was 14.0% compared to
operating margin of 5.2% in the same period last year.

Bookings of $143.5 million in the second quarter of 2004 were up
from $102.7 million in the same period last year due to improved
conditions in both the U.S. and international markets and the
Nuovo Pignone distribution business acquisition, which contributed
$12.4 million in bookings.

Backlog on June 30, 2004 was $128.4 million, compared to
$50.5 million on June 30, 2003, primarily due to strong bookings
in North America and the Nuovo Pignone distribution business
acquisition, which contributed $53.9 million to backlog.

On a sequential basis, second quarter 2004 revenues of
$129.8 million were up $32.2 million from first quarter 2004
revenues of $97.6 million on seasonal strength and the Nuovo
Pignone distribution business acquisition.

Gross profit of $37.0 million in the second quarter of 2004 was up
$9.1 million from gross profit of $27.9 million in the first
quarter of 2004 on higher revenues.  Gross margin in the second
quarter of 2004 was 28.5% compared to gross margin of 28.6% in the
first quarter of 2004.

Operating income in the second quarter of 2004 was $18.2 million,
up $6.2 million from first quarter 2004 operating income of
$12.1 million on higher volume.  Operating margin of 14.0% in the
second quarter of 2004 was up compared to 12.4% operating margin
in the first quarter of 2004, mainly due to volume effects.

Bookings of $143.5 million in the second quarter of 2004 were up
from bookings of $97.4 million in the first quarter of 2004 mainly
due to seasonal effects.  The Nuovo Pignone distribution business
acquired in the second quarter of 2004 contributed $12.4 million
to bookings.

Backlog on June 30, 2004 was $128.4 million compared to
$58.3 million on March 31, 2004.  End of June backlog includes
$53.9 million of backlog from the Nuovo Pignone distribution
business acquisition.

Said Mr. Lamb, "With the acquisition of the distribution business
of Nuovo Pignone in June, and the formation of a joint venture
with our long-time licensee in China in April, we believe we are
well positioned in strategic growth areas around the world.  We
continue to see good growth opportunities in international markets
and key domestic markets."

Compression and Power Systems Segment Results Improve Year-on-Year
Operating Results Down Sequentially as Excess Backlog Is Reduced

Compression and power systems revenue in the second quarter of
2004 was $71.9 million, up $16.0 million from $55.9 million for
the same period in 2003.  Sales of both natural gas engines and
engine parts increased in the second quarter of 2004 compared to
the same period last year, which was adversely affected by strike-
related delays in shipments.  Contributing to increases in revenue
was increased demand for engines used in power generation.

Gross profit of $19.1 million in the period ended June 30, 2004
was up $10.7 million from gross profit of $8.4 million for the
same period last year.  Increases were mainly due to higher
revenues.  Gross margin of 26.6% in the second quarter of 2004 was
up from 15.0% in the same period last year.  The strike in 2003 in
the natural gas engine business negatively affected margins for
the year-ago period.

Operating income for the quarter ended June 30, 2004 was
$7.8 million, compared to an operating loss of $4.3 million for
the quarter ended June 30, 2003. Included in the 2004 operating
income is a gain of $1.7 million from the sale of excess land
adjacent to our facility in Waukesha, Wisconsin.  Operating margin
was 10.9% in the second quarter of 2004.

Bookings of $90.3 million in the second quarter of 2004 increased
from $74.9 million in the second quarter of 2003, due to increased
demand for natural gas engines in power generation and blowers
used in waste water treatment.

Backlog on June 30, 2004 was $75.3 million, compared to backlog of
$61.0 million on June 30, 2003.

On a sequential basis, revenue of $71.9 million in the second
quarter of 2004 was down $12.5 million from $84.4 million in the
first quarter of 2004.  Revenue decreased mainly due to the
elimination of excess backlog in the first quarter caused by the
strike in 2003.

Gross profit of $19.1 million for the quarter ended June 30, 2004
was down $4.2 million from gross profit of $23.3 million in the
quarter ended March 31, 2004.  Decreases in gross profit were due
to decreases in revenues.  Gross margin in the second quarter of
2004 was 26.6%, compared to 27.6% in the first quarter of 2004,
mainly due to a decrease in sales volume.

Operating income of $7.8 million for the second quarter of 2004
was down compared to $9.2 million for the first quarter of 2004,
mainly on decreases in sales volume.  Operating income in the
second quarter includes a gain of $1.7 million on the sale of
excess land.  Operating margin in both the first and second
quarters of 2004 was 10.9%.

Bookings of $90.3 million in the second quarter of 2004 were up
from bookings of $73.1 million in the first quarter of 2004 as a
result of increased market demand for engines used in gas
compression and power generation, as well as engine parts.

Backlog on June 30, 2004, was $75.3 million compared to backlog of
$56.6 million on March 31, 2004.

Said Mr. Lamb, "Although sequentially revenues and operating
income were down in the second quarter, the decreases were mainly
due to the elimination of the excess backlog accumulated during
the 2003 strike in our natural gas engine business in the first
quarter."

Headquartered in Dallas, Dresser, Inc., is a worldwide leader in
the design, manufacture and marketing of highly engineered
equipment and services sold primarily to customers in the flow
control, measurement systems, and compression and power systems
segments of the energy industry.  Dresser has a widely distributed
global presence, with over 8,500 employees and a sales presence in
over 100 countries worldwide.  The Company's website can be
accessed at http://www.dresser.com/
  

DUNES PLAZA: Signs-Up Hogan & Hartson as Bankruptcy Counsel
-----------------------------------------------------------
Dunes Plaza Associates and Sherwood Plaza Associates, Ltd., ask
the U.S. Bankruptcy Court for the Southern District of New York
for permission to employ Hogan & Hartson, LLP, as their bankruptcy
counsel.

Hogan & Hartson will:

    a) give the Debtors advice with respect to the powers and
       duties of the Debtors in the continued management and
       operation of the business and the property;

    b) negotiate with creditors of the Debtors and other parties
       in interest in formulation a plan of reorganization, and
       to take legal steps necessary to confirm such plan;

    c) prepare on behalf of the Debtors applications, motions,
       complaints, answers, orders, reports, other pleadings and
       documents in and in connection with the Chapter 11 cases;

    d) appear before the Court and the U.S. Trustee and to
       protect the interests of the Debtors and the estates;

    e) provide other legal services for the Debtors in
       connection with the Chapter 11 cases; and

    f) provide other legal services for the Debtors, as they may
       request and as may be necessary or appropriate.

The Debtors tell the Court that Hogan & Hartson has extensive
experience and knowledge in the field of debtor and creditors'
rights and is well-qualified to represent them in their cases.

The professionals of Hogan & Hartson will charge the Debtors at
hourly rates ranging from:

         Position            Hourly Rate
         --------            -----------
         partners            $450 to 675
         counsels             450
         associates           245 to 425
         paralegals            90 to 190

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

Dunes Plaza Associates and Sherwood Plaza Associates, Ltd., own,
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.  The Debtors filed
for chapter 11 protection on August 18, 2004 (Bankr. S.D.N.Y. Case
No. 04-15403).  


DYER FABRICS: Wants to Employ Harris Shelton as Bankruptcy Counsel
------------------------------------------------------------------
Dyer Fabrics, Inc., asks the U.S. Bankruptcy Court for the Western
District of Tennessee for permission to employ Harris, Shelton,
Dunlap, Conn & Ryder, PLLC, as its bankruptcy counsel.

The Debtor has been informed that Harris Shelton professionals who
will render services to the company are members in good standing
with the highest court of one or more state bars.  The Debtors
submit that the retention of Harris Shelton, with its knowledge
and experience in bankruptcy, will contribute greatly to the
efficient administration of the Debtor's estate.

Harris Shelton will:

    a) advise the Debtor with respect to its powers and duties
       as debtor-in-possession in the continued operation of its
       business and management of its property;

    b) assist the Debtor in the preparation of its statement of
       financial affairs, schedules, statement of executory
       contracts and unexpired leases, and any papers or
       pleadings, or any amendments thereto that the Debtor is
       required to file in this case;

    c) represent the Debtor in any proceeding that is instituted
       to reclaim property or obtain relief from the automatic
       stay imposed by Section 362 of the Bankruptcy Code or
       that seeks the turnover or recovery of property;

    d) provide assistance, advice and representation concerning
       the formulation, negotiation and confirmation of a plan
       of reorganization and accompanying ancillary documents;

    e) provide assistance, advice and representation concerning
       any investigation of the assets, liabilities and
       financial condition of the Debtor that may be required;

    f) represent the Debtor at hearings or matters pertaining to
       affairs as debtor-in-possession;

    g) prosecute and defend litigation matters and such other
       matters that might arise during this case;

    h) provide counseling and representation with respect to the
       assumption or rejection of executory contracts and leases
       and other bankruptcy-related matters arising from this
       case;

    i) represent the Debtor in matters that may arise in
       connection with its business operations, its financial
       and legal affairs, its dealings with creditors and other
       parties-in-interest and any other matters, which may
       arise during the bankruptcy case;

    j) render advice with respect to the myriad of general
       corporate and litigation issues relating to this case,
       including, but not limited to, real estate, securities,
       corporate finance, tax and commercial matters, and
       assist the Debtor in connection with any necessary
       application, orders, reports or other legal papers and to
       appear on behalf of the Debtor in proceedings instituted
       by or against the Debtor; and

    k) perform such other legal services as may be necessary and
       appropriate for the efficient and economical       
       administration of this Chapter 11 case.

The principal attorneys who will be responsible for representing
the Debtor and their hourly rates are:

              Professionals           Hourly Rate
              -------------           -----------
              John L. Ryder              $250
              Steven N. Douglass          235
              Jonathan E. Scharff         225
              Jim Demere                  150
              Beverly Curtis               60

Headquartered in Dyersburg, Tennesse, Dyer Fabrics, a textile
wholesaler manufacturer, filed for chapter 11 protection on
July 9, 2004 (Bankr. W.D. Tenn. Case No. 04-30609).  When the
Debtor filed for protection, it reported more than $10 million in
assets and debts.


ELECTRIC MACHINERY: EarthFirst Technologies Completes Acquisition
-----------------------------------------------------------------
EarthFirst Technologies, Inc. (OTCBB:EFTI) completed a common
stock exchange agreement with Electric Machinery Enterprises, Inc.
Effective immediately, EME has become a wholly owned subsidiary of
EFTI.

EME is a seventy-year-old company based in Tampa, Florida. Its
principal businesses are:

   (1) Providing electrical contracting services both as a prime
       contractor and a subcontractor, electrical support for
       industrial and commercial buildings, power generation
       stations, and water and sewage plants in both domestic and
       foreign markets;

   (2) Through EME Modular Structures, Inc., EME is engaged in the
       construction of concrete modular buildings, with emphasis
       on the modular classroom market; and

   (3) Through EME General Contractors, Inc., EME constructs and
       services towers used in the cellular telephone industry.
       EME is established as a preferred contractor on Caribbean,
       Central and South American major construction projects.

EME has been consistently profitable throughout its long history.
EFTI has been working closely with EME for more than a year on a
reorganization strategy to conclude a bankruptcy filing that was
precipitated by an adverse court decision on a disputed
construction contract. EFTI plans to complete the consolidation of
administrative and operational functions at the 140,000 square
foot EME complex located on eleven acres in Tampa, Florida.

CEO John Stanton stated, "The acquisition of EME, with 2003
revenues of approximately $45 million, will provide an ideal
platform to commercialize certain of EFTI's technologies. We still
have some work to do to confirm a Plan of Reorganization for EME.
However, we believe that the conclusion of this transaction will
facilitate a successful conclusion of the reorganization process."

EarthFirst Technologies, Incorporated and its subsidiaries --
http://www.earthfirsttech.com/-- are dedicated to producing  
environmentally superior products from carbon-rich solid and
liquid materials currently considered wastes. The Company has
conducted more than five years of extensive research and
development on advanced technologies to achieve this goal.

Based in Tampa, Florida, Electric Machinery Enterprises, Inc.,
filed for chapter 11 protection on May 29, 2003 (Bankr. M.D. Fla.
Case No. 03-11047).  The Debtor filed a chapter 11 plan in
September 2003 premised on this transaction with EarthFirst
Technologies.  EME's Chapter 11 filing was precipitated by an
adverse court decision on a disputed construction contract.  EME
has appealed this ruling, and resolution of the matter is provided
for in EME's Plan of Reorganization.


ENCORE ACQUISITION: Inks New 5-Year Credit Facility with BofA
-------------------------------------------------------------
Encore Acquisition Company (NYSE:EAC) has entered into a new five-
year senior secured credit facility under which Bank of America
will serve as administrative agent.  The initial borrowing base
available under the facility will be $400 million, which may be
increased up to $750 million according to the borrowing base
calculations provided for in the facility.

The facility replaces Encore's previous $300 million credit
facility, which had a $270 million borrowing base and would have
matured in June 2006.  The new credit facility is secured by a
first-priority lien on Encore's proved oil and natural gas
reserves and matures on August 19, 2009.  Encore had $53 million
drawn under its previous credit facility at June 30, 2004.

Organized in 1998, Encore is a growing independent energy company
engaged in the acquisition, development and exploitation of North
American oil and natural gas reserves.  Encore's oil and natural
gas reserves are in four core areas:

   * the Cedar Creek Anticline of Montana and North Dakota;
   * the Permian Basin of West Texas and Southeastern New Mexico;
   * the Mid Continent area, which includes the Arkoma and
     Anadarko Basins of Oklahoma, the North Louisiana Salt Basin,
     the East Texas Basin and the Barnett Shale near Fort Worth,
      Texas; and    
   * the Rocky Mountains.

                        *   *   *

As reported in the Troubled Company Reporter's April 5, 2004  
edition, Standard & Poor's Ratings Services assigned its 'B'  
rating to Encore Acquisition Co.'s $150 million senior  
subordinated notes due 2014. At the same time, Standard & Poor's  
affirmed its 'BB-' corporate credit and 'B' subordinated debt  
ratings on the independent oil and gas exploration and production  
company.  S&P said the outlook was stable.  
  
"The ratings affirmation reflects the fact that even with the  
increased debt Encore will take on to fund this transaction,   
financial measures will remain appropriate for current ratings,"   
said Standard & Poor's credit analyst Brian Janiak.


ENRON CORP: Wants to Recover $9.4 Million from 36 Creditors
-----------------------------------------------------------
On or within 90 days before the Petition Date, the Enron
Corporation and its debtor-affiliates made, or caused to be made,
transfers to 36 creditors:

     Creditor                                          Amount
     --------                                          ------
     American Express                              $1,096,324
     American Heating Company                          21,884
     American Skiing Company                          112,072
     American Steel Company                            34,490
     Columbus Ready Mix                                63,352
     Comfort Systems USA                               22,572
     Community Products, LLC                           56,314
     Compangnie Generale De Logistique              1,894,388
     Concar Detroit One, LLC                           65,049
     Condea Vista Chemical Company                     84,900
     GM Mechanical Corporation                         28,463
     Local 598 Trust Funds                            217,459
     Lorentzen & Wettre USA, Inc.                     118,024
     Parks Metal Fabricators, Inc.                    304,693
     Parsons Energy & Chemicals Group                  33,511
     Pascor Atlantic Corporation                      119,178
     Passaic Valley Water Commission                  125,523
     Patch, Inc.                                      205,358
     PCE Pacific, Inc.                                175,728
     Pennsylvania Transformer                          50,111
     Penske Logistics                               1,208,607
     Peri Formwork Systems                             27,670
     PGA National Resort & Spa                         31,008
     Pinnacle Welding & Fabrication, Inc.             141,151
     Pitney Bowes                                     346,568
     Port Carteret                                     73,733
     Powell Electronic, Inc.                          854,144
     Power Con Mechanical                             128,460
     Power Engineers, Inc.                            180,755
     Steadfast Bridges                                 59,848
     Steam Supply & Rubber Company                     20,888
     Steel Fabricators of Monroe, Inc.                215,869
     Steel Service Corporation                        953,516
     Stowe Woodward Company                           170,550
     Strawberry Holdings, Inc.                        195,599
     Struble Air Conditioning                          46,783
                                                -------------
         TOTAL                                     $9,484,542
                                                =============

Neil Berger, Esq., at Togut, Segal & Segal, LLP, in New York,
relates that:

   (a) the Transfers constitute transfers of interest of the
       Debtors' property;

   (b) the Debtors made, or caused to be made, the Transfers
       to, or for the benefit of, the Creditors;

   (c) the Debtors made, or caused to be made, the Transfers
       for, or on account of, antecedent debts owed to the
       Creditors prior to the dates on which the Transfers were
       made;

   (d) the Debtors were insolvent when the Transfers were made;
       and

   (e) the Transfers enabled the Creditors to receive more than
       they would have received if:

       -- Enron's cases were administered under Chapter 7 of the
          Bankruptcy Code;

       -- the Transfers had not been made; and

       -- the Creditors had received payment of the debt to the
          extent provided by the Bankruptcy Code.

Thus, Mr. Berger contends that the Transfers constitute avoidable
preferential transfers pursuant to Section 547(b) of the
Bankruptcy Code.  In accordance with Section 550(a), the Debtors
may recover from the Creditors the amount of the Transfers, plus
interest.

In the alternative, Mr. Berger asserts that the Transfers are
avoidable fraudulent transfers under Section 548(a)(1)(B) because:

   (a) the Transfers constitute transfers of interest in the
       Debtors' property;

   (b) the Transfers were to or for the benefit of the
       Creditors;

   (c) the Debtors received less than reasonable equivalent
       value in exchange for some or all of the Transfers;

   (d) the Debtors were insolvent, or became insolvent, or had
       unreasonably small capital in relation to their
       businesses or their transactions at the time or as a
       result of the Transfers; and

   (e) the Transfers were made within one year before the
       Petition Date.

Accordingly, the Debtors ask the Court to:

   (i) avoid and set aside the Transfers pursuant to Section
       547(b);

  (ii) in the alternative, avoid and set aside the Transfers
       pursuant to Section 548(a)(1)(B);

(iii) direct the Creditors to immediately pay them an amount
       equal to the Transfers pursuant to Section 550(a),
       together with interest from the date of the Transfers; and

  (iv) award them attorney's fees, costs and other expenses
       incurred

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)


FLEMING COMPANIES: Asks Court to Okay Grace Foods Settlement Pact
-----------------------------------------------------------------
Christopher J. Lhulier, Esq., at Pachulski, Stang, Ziehl, Young,
Jones & Weintraub, PC, in Wilmington, Delaware, relates that
Grace Foods, Inc., owes Fleming Companies, Inc.:

   $5,476,655 under two promissory notes in connection with the
              sale of Fleming's wholesale grocer distribution
              business to C&S Acquisition, LLC; and

         $982 for goods delivered and services rendered.  

The parties agree on a global compromise that will resolve all
outstanding amounts Grace owes the Debtors.  The primary terms of
the Settlement Agreement are:

    (a) Grace Foods will pay the Debtors the full amount of the
        A/R Balance;

    (b) The Debtors will release Grace Foods' personal property
        that is the subject of any and all mortgages, security
        agreements, liens and encumbrances placed on the personal
        property by any agreement between the Debtors and Grace
        Foods;

    (c) The Debtors and C&S authorize Grace Foods, at its own
        expense, to prepare and record any release with respect
        to any and all security agreements, liens and
        encumbrances placed on the assets of Grace Foods; and

    (d) The parties will grant each other a general release from
        all claims or causes of action arising under or in
        connection with the Debtors' cases or any business
        dealings between the Debtors and Grace Foods.

Mr. Lhulier notes that with the Settlement Agreement, the Debtors
receive 100% of the outstanding A/R balance in return for the
General Release.  The Debtors do not believe that they are
relinquishing any bona fide claims.  The Debtors will also avoid
further litigation costs.

Accordingly, the Debtors ask the Court to approve their Settlement
Agreement with Grace Foods pursuant to Rule 9019 of the Federal
Rules of Bankruptcy Procedure.

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)


FOOTSTAR INC: Inks $15MM Pact to Sell Gaffney Distribution Center
-----------------------------------------------------------------
Footstar, Inc. has entered into an agreement to sell its
distribution center in Gaffney, South Carolina for approximately
$15.1 million. The facility will be acquired by Automated
Distribution Systems, L.P., a leading third party distribution and
logistics solutions provider. The transaction is subject to
certain closing conditions and Bankruptcy Court approval, and is
expected to be completed as soon as practicable once Court
approval is received following a Court-supervised auction on
September 14, 2004.

Footstar wound down its operations at the Gaffney distribution
center following the sale of Footstar's athletic footwear business
in May 2004. As previously reported on July 22, the Company sold
its distribution center in Mira Loma, California and is now
outsourcing all of its warehousing and distribution to FMI
International LLC, a third-party provider of logistics services.

Dale W. Hilpert, Chairman, President and Chief Executive Officer,
said, "The sale of the Gaffney facility is important as we
continue repositioning our logistics network and strengthening our
operations. We look forward to completing the sale of this
facility while we continue developing a plan of reorganization so
that we can emerge successfully from Chapter 11 and maximize value
for all of our stakeholders."

Footstar, Inc. -- http://www.footstar.com/-- which filed  
for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No.:
04-22350) on March 3, 2004, is a leading footwear retailer.   
As of May 1, 2004, the Company operates 2,498 Meldisco
licensed footwear departments nationwide and 36 Shoe Zone stores.
The Company also distributes its own Thom McAn brand of quality
leather footwear through Kmart, Wal-Mart and Shoe Zone
stores.       
       
Paul M. Basta, Esq. of Weil Gotshal & Manges represents the
debtor in its restructuring efforts. When the company filed for
bankruptcy protection, it listed total assets of $762,500,000  
and total debts of $302,200,000.


GURVINDER SINGH UBEROI TRUST: Voluntary Chapter 11 Case Summary
---------------------------------------------------------------
Debtor: Gurvinder Singh Uberoi Trust  
        5121 Latrobe Drive  
        Windermere, Florida 34786

Bankruptcy Case No.: 04-09370

Chapter 11 Petition Date: August 17, 2004

Court: Middle District of Florida (Orlando)

Judge: Arthur B. Briskman

Debtor's Counsel: Adam Pollack, Esq.
                  Faulkner & Pollack, P.A
                  5151 Adanson Street #100
                  Orlando, Florida 32804

Estimated Assets: $1 Million to $10 Million

Estimated Debts: $1 Million to $10 Million

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


HALLIBURTON: Smith Int'l to Pay $41 Mil. for Patent Infringement
----------------------------------------------------------------
Halliburton (NYSE:HAL) confirmed that the United States District
Court for the Eastern District of Texas in Tyler, Texas, has
entered a final judgment in its patent infringement lawsuit
against Smith International and has awarded Halliburton Energy
Services $41 million. In addition to the $24 million in actual
damages that was awarded through the jury's June 25 verdict,
Halliburton also has been awarded $12 million in enhanced damages,
$4 million in attorney fees and nearly $1 million in prejudgment
interest.

Further, a permanent injunction was issued barring Smith from
designing roller cone drill bits in the United States using
methods covered by the patents, and from making, using, selling or
offering for sale in the United States any infringing roller cone
drill bits. The injunction also prohibits Smith from using its
IDEAS software to design a roller cone drill bit in the United
States except where specified infringing features have been
removed and allows Halliburton to monitor Smith's bit designing
procedures and bit designs in the United States for an initial
three-year period. Separately, Halliburton has agreed to permit
Smith to sell its existing inventory of infringing bits through
November in return for a fee.

"We're pleased with the outcome of this case and to continue
moving forward with providing superior drill bit technology and
products to our customers around the world," explained John
Gibson, chief executive officer, Halliburton's Energy Services
Group. "But we continue to pursue similar litigation against Smith
in Italy and the United Kingdom to further protect that superior
technology," said Gibson.

Security DBS, Halliburton's drill bit business, filed the lawsuit
in September 2002 seeking damages for Smith's willful infringement
of Halliburton's patented roller cone drill bit technology. The
jury found that Smith's competing bits willfully infringed three
of Halliburton's patents, and rejected Smith's claims that the
patents are invalid. In its recent order, the court also rejected
Smith's claims that Halliburton's patents are unenforceable and
enjoined Smith from further infringement of the patents.

                     About Smith International

Smith International, Inc. is a leading worldwide supplier of  
premium products and services to the oil and gas exploration and  
production industry, the petrochemical industry and other  
industrial markets through its four principal business units - M-I  
SWACO, Smith Technologies, Smith Services and Wilson.

                        About Halliburton

Halliburton, founded in 1919, is one of the world's largest
providers of products to the petroleum and energy industries. The
company serves its customers with a broad range of products and
services through its Energy Services Group and Engineering and
Construction Group business segments. The company's World Wide Web
site can be accessed at http://www.halliburton.com/


HEALTHSOUTH CORP: John Chamberlain Resigns from Board of Directors
------------------------------------------------------------------
John S. "Jack" Chamberlin has voluntarily resigned from the
HealthSouth Corporation (OTC Pink Sheets: HLSH) Board of Directors
effective August 19, 2004, as part of the previously announced
board transition plan. In the past twelve months, HealthSouth has
added six new directors and expects another to join in September,
as previously announced.

Robert P. May, Chairman of the Board of HealthSouth, said, "We
want to thank Jack for his many years of dedicated service and
tireless efforts on behalf of HealthSouth and its shareholders.
His work over the past 18 months, especially his leadership role
in recruiting new board members and chairing the CEO Search
Committee, has been an important part in HealthSouth's turnaround
efforts and in helping set a new course for the future."

"It has been an honor and privilege to serve as a director of
HealthSouth and to guide the Company on its way to recovery," said
Mr. Chamberlin. "I believe that HealthSouth is well positioned to
move ahead and I wish the employees and my fellow board members
every success."

                       About HealthSouth  
  
HealthSouth employs approximately 3,500 people in Birmingham and  
is the nation's largest provider of outpatient surgery, diagnostic  
imaging and rehabilitative healthcare services, operating  
facilities nationwide and abroad. HealthSouth can be found on the  
Web at http://www.healthsouth.com/

                        *     *     *

As reported in the Troubled Company Reporter on July 5, 2004,
HealthSouth Corporation (OTC Pink Sheets: HLSH) announced that it  
will permanently close HealthSouth Metro West Hospital effective  
midnight September 2, 2004. The Company says its efforts to  
recruit and retain the physicians necessary to make the hospital  
profitable have been unsuccessful and that the facility continues  
to lose in excess of $500,000 every month.

The hospital employs approximately 500 full-time, part-time and  
pool employees. Eligible employees will receive severance packages  
in accordance with HealthSouth policy. In addition, HealthSouth  
will offer resume workshops, internal and external job fairs and  
opportunities with local employment agencies to assist employees  
in finding new positions in the Birmingham area. The Company will  
also network with other employers in the Birmingham area to  
solicit job availabilities.

"This was a very difficult decision for us to make," said  
HealthSouth Metro West CEO Don Lilly. "Over the past four and a  
half years we have all worked diligently to turn the hospital  
around and have invested millions of dollars in the facility.  
Unfortunately we have been unsuccessful in making the hospital  
financially viable. Our primary focus at this point is to help our  
employees find new positions and to ensure a smooth transition for  
our patients and physicians."

The company acknowledges certain obligations to the City of  
Fairfield Healthcare Authority and intends to work with the  
Authority to fulfill those commitments. In addition, the Company  
will work to procure an appropriate buyer for the hospital  
buildings and will maintain Metro West's physical plant until an  
appropriate use for the property is determined.

Notice is being provided to appropriate employees, health  
providers and local government agencies in accordance with  
provisions of the Worker Adjustment and Retraining Notification  
Act (29 U.S.C.A. Sections 2101 et seq.). In addition, the Company  
will be notifying the appropriate parties in regards to the  
closing of the hospital's emergency department, which will be  
effective on July 31, 2004.


HI-RISE RECYCLING: Hires Kestrel as Bankruptcy Consultants
----------------------------------------------------------
Hi-Rise Recycling Companies, Inc., asks the U.S. Bankruptcy Court
for the Northern District of Ohio, Eastern Division, for authority
to employ Kestrel Consulting LLC as its bankruptcy consultants.

The Debtor believes that because of Kestrel Consulting's extensive
knowledge of business reorganizations and experience in advising
distressed companies, it is well qualified to handle the many
potential issues that may arise in its chapter 11 case.  

Kestrel Consulting has already begun to initiate contact with
potential strategic and financial buyers of Hi-Rise Recycling.  
Specifically, Kestrel will:

    a) review and familiarize itself with the business and
       financial condition of the Debtor and other matters it
       deems relevant and conduct analysis in connection with
       any potential Sale transaction.

    b) assist the Debtor in developing a strategy to be used in
       negotiating the form and structure of the Sale
       Transaction, giving consideration to matters such as
       timing, access to financing, debt capacity, disclosure,
       and confidentiality;

    c) assist the Debtor in preparing a confidential information
       memorandum about the business to be utilized in
       discussions with prospective buyers, and in the
       preparation and negotiation of any confidentiality
       agreements to be entered into by third parties
       potentially interested in participating in a Sale
       Transaction, all of which shall be subject to approval in
       advance by the Debtor;

    d) identify all prospective buyers and then will contact all
       buyers approved by the Debtor;

    e) assist the Debtor in preparing presentations,
       discussions, and due diligence materials and in
       negotiations relating to a possible Sale Transaction;

    f) assist the Debtor in the negotiation of a letter of
       intent and definitive documents;

    g) testify at any sale hearing on a Sale Transaction;

    h) render such other financial advisory and investment
       banking services as are customary for similar
       transactions; and

    i) discuss its activities as bankruptcy consultants to
       Debtor, including the sale process, directly with General
       Electric Credit Corporation, its counsel and other
       representatives and respond to inquiries regarding the
       sale process.

Kestrel Consulting received a $25,000 retainer fee and agrees to
give a 30% discount to the Debtor if the firm's fees exceed
$250,000.  Stephen J. Hopkins heads the professionals from Kestrel
and will charge at an hourly rate of $450. Henry M. Nahmad will
assist Mr. Hopkins at an hourly rate of $200.  For the other
professionals and associates from the Firm, the hourly rates
ranges from $200 to $375.

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).  When the
Debtor filed for protection it listed more than $1 million in
estimated assets and more than $10 million in estimated debts.


HOLLINGER INC: Appeals Order Staying Counterclaims Against Int'l
----------------------------------------------------------------
Hollinger, Inc., appeals the decision of Justice Farley of the
Ontario Superior Court of Justice temporarily staying the
counterclaims of Hollinger, The Ravelston Corporation Limited and
Ravelston Management, Inc., against Hollinger International, Inc.,
for outstanding management fees and damages for oppression of
Hollinger and intentional interference with Hollinger's economic
relations.  

The Ravelston Corporation Limited and Ravelston Management, Inc.,
also appeals the decision of Justice Farley denying their request
that the jurisdiction of the complaint filed by Hollinger
International against Hollinger and others in Illinois be moved
from Illinois to Ontario.

The hearing in respect of the application to the Ontario Superior
Court of Justice commenced by Catalyst Fund General Partner I,
Inc., seeking an order directing an investigation under the Canada
Business Corporations Act has been rescheduled to take place on
August 25 and 26, 2004.

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 INC: Appoints P. Carroll & D.M.J. Vale as Directors
-------------------------------------------------------------
Hollinger Inc. (TSX:HLG.C) (TSX:HLG.PR.B) appointed Paul A.
Carroll, Q.C. and Donald M.J. Vale, both of Toronto, as directors
of Hollinger.

Mr. Carroll is the President and Chief Executive Officer of
Carnarvon Capital Corporation, a Toronto-based investment
management and venture capital company. Prior to January 31, 2003,
he was Counsel to Gowling Lafleur Henderson LLP, a major Canadian
law firm, and its predecessor firm, Smith Lyons.

Mr. Vale has held a succession of senior executive positions
including with Philips Electronics (Holland) Ltd., Matsushita
Electric Company of Japan, NBS Technologies Inc. and Sharp
Electronics Corporation of Japan. His earlier career included
positions at NatWest in London and Shell. He holds an MBA degree
from the University of Western Ontario. Mr. Vale is currently the
Principal of United Global Enterprises Inc., a consulting firm
specializing in executive interim management and global business
turnaround assignments.

Messrs. Carroll and Vale are also independent members of the board
of directors of Argus Corporation Limited.

In addition, Messrs. Carroll and Vale have been appointed as
additional members of Hollinger's Audit Committee, Independent
Committee and Corporate Governance and Compensation Committee.

               Status of Selected Civil Proceedings

Notice of an Appeal has been filed by Hollinger in respect of the
decision of Justice Farley of the Ontario Superior Court of
Justice temporarily staying the counterclaims of Hollinger, The
Ravelston Corporation Limited and Ravelston Management Inc.
against Hollinger International Inc. for outstanding management
fees and damages for oppression of Hollinger and intentional
interference with Hollinger's economic relations. Notice of an
Appeal has also been filed by The Ravelston Corporation Limited
and Ravelston Management Inc. of the decision of Justice Farley
denying their request that the jurisdiction of the complaint filed
by Hollinger International against Hollinger and others in
Illinois be moved from Illinois to Ontario.

The hearing in respect of the application to the Ontario Superior
Court of Justice commenced by Catalyst Fund General Partner I Inc.
seeking an order directing an investigation under the Canada
Business Corporations Act has been rescheduled to take place on
August 25 and 26, 2004.

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.

The company's September 30, 2003, balance sheet shows a working  
capital deficit of about $293 million.


HOLLINGER CDN: Plans to Trade on NEX to Provide Owners Liquidity
----------------------------------------------------------------
Hollinger Canadian Newspapers, Limited Partnership is providing
this 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 Partnership are currently subject to a cease
trade order in respect of securities of the Partnership issued by
the OSC on June 1, 2004.  

The cease trade order results from the delay in filing the
Partnership'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 OSC of all filings that the Partnership is required to make
pursuant to Ontario securities laws.

The Partnership previously announced on July 20, 2004 that it 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
on or prior to 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 Partnership confirms that those interim
financial statements have not been so filed.

The Partnership believes that it needs to review the final report
of the Special Committee of Hollinger International, Inc., 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 Partnership will
continue to provide bi-weekly updates, as contemplated by the OSC
Policy, until the financial statements and AIF have been filed.

On August 5, 2004 the Partnership announced that it had received
an expression of interest from Hollinger International to make an
offer to acquire the outstanding Units of the Partnership not
already held by Hollinger International and its affiliates,
through a Canadian affiliate of Hollinger International.

As previously announced by the Partnership, the Toronto Stock
Exchange formally suspended the Units from trading on the TSX as
of 5:00 p.m. Toronto time on August 6, 2004.  The Units were
suspended from trading on the TSX due to the failure of Hollinger
Canadian Newspapers G.P., Inc., the general partner of the
Partnership to have at least two independent directors on its
board of directors, as required by the TSX continued listing
requirements.  The Limited Partnership Agreement governing the
Partnership requires the General Partner to have at least three
independent directors.  The General Partner currently has one
independent director.

The General Partner is currently engaged in discussions with NEX,
a separate trading board of the TSX Venture Exchange, concerning
whether the Units could be listed for trading on NEX.  The
Partnership will provide an update concerning those discussions as
soon as a formal decision has been made by NEX.  A NEX listing
would provide Unitholders with a liquidity alternative in the
event that an offer is made for the outstanding Units through an
affiliate of Hollinger International.


HOME CARE: Hires Arnstein & Lehr as Bankruptcy Counsel
------------------------------------------------------
Home Care Home Health Agency, Inc., asks the U.S. Bankruptcy Court
for the Northern District of Illinois for permission to employ
Arnstein & Lehr as its bankruptcy counsel.

The Debtor's parent company, Mayer Eisenstein, M.D., S.C., is also
seeking to retain Arnstein & Lehr as its attorneys in its chapter
11 case.  Home Care assures the Court that there is no existing
conflict in its representation since there are no inter-company
claims or causes of action the Debtor is aware of.

Arnstein & Lehr is expected to:

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

    b) pursue confirmation of a plan and approval of a
       disclosure statement;

    c) prepare, on behalf of the Debtor, all necessary
       applications, motions, answers, orders and other
       bankruptcy or non-bankruptcy law, as dictated by the
       demands of the case, or as required by the Court, and
       representing the Debtor in any hearings or proceedings
       related thereto;

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

    e) negotiate with the Debtor's creditor body;

    f) assist the Debtor with the disposition of its assets; and

    g) perform all other legal services for the Debtor which may
       be necessary and proper in this case.

The principal professionals who will represent the Debtor and
their current hourly rates are:

        Professionals          Billing Rate
        -------------          ------------   
        James A. Chatz         $375 per hour
        Barry A. Chatz          375 per hour
        Miriam R. Stein         270 per hour
        Joy E. Mason            235 per hour
        Lola A. Nesteruk        120 per hour

Headquartered in Troy, New York, Home Health
-- http://www.homefirst.com/-- provides a full range of services  
in family health care in the greater Chicago metropolitan area
with five medical centers.  The Company filed for chapter 11
protection on July 14, 2004 (Bankr. N.D. Ill. Case No. 04-26224).  
When the Debtor filed for protection from its creditors, it listed
less than $50,000 in assets and more than $10 million in estimated
debts.


I2 TECHNOLOGIES: Names Michael McGrath to Board of Directors
------------------------------------------------------------
Business and Technology visionary Michael E. McGrath, a renowned
expert on supply chain management product development and
strategy, will join the i2 Technologies, Inc. (OTC:ITWO) Board of
Directors.

Mr. McGrath is co-founder of Pittiglio Rabin Todd & McGrath
(PRTM), a leading management consulting firm to technology-based
companies. He retired as chairman and CEO of PRTM's Atlantic
Region in July after spending 28 years building the company into a
world-class management consulting firm. While at PRTM, he
initiated the company's product development consulting practice
and led efforts in refining the PACE(R) methodology, establishing
it as one of the most successful and effective models of the
product development process for technology-based industries. In
1993, Mr. McGrath created the Supply-Chain Operations Reference-
model(R) (SCOR(R)) to define a standard for the supply chain
management process, which is now managed as an industry standard
by the Supply-Chain Council.

Mr. McGrath also founded IDe, a leading provider of integrated
solutions for Development Chain Management in June 1998, and has
served as IDe chairman since October of that year. Mr. McGrath has
worked as a consultant to more than 100 companies in the US,
Europe, and Asia and is the author or co-author of five books and
numerous articles. Mr. McGrath holds a bachelor's degree in
Computer Science and Management Science from Boston College and a
master's in business administration from Harvard Business School.
He is also a certified public accountant. Prior to co-founding
PRTM in 1976, he worked for Price Waterhouse & Co., Texas
Instruments and McCormack & Dodge, where he contributed to the
pioneering efforts to create the packaged applications software
industry.

"We are pleased to have Michael McGrath join the i2 Board of
Directors," said i2 chairman and CEO Sanjiv Sidhu. "He brings a
wealth of technology experience to the Board, as well as best
practices experience from the more than 100 companies he's
consulted with through the years. We welcome his presence as an
outside Director, and I look forward to his contributions."

In addition to Mr. Sidhu, Mr. McGrath joins current Board members
Harvey B. Cash, Richard Clemmer, Robert Crandall, and Pranav
Parikh. His term begins this month and will run until the annual
meeting to be held later this year.

                              About i2

i2 is a leading provider of closed-loop supply chain management  
solutions.  The company designs and delivers software that helps  
customers optimize and synchronize activities involved in  
successfully managing supply and demand.  i2's worldwide customer  
base consists of some of the world's market leaders -- including  
seven of the Fortune global top 10.  Founded in 1988 with a  
commitment to customer success, i2 remains focused on delivering  
value by implementing solutions designed to provide a rapid return  
on investment. Learn more at http://www.i2.com/

At June 30, 2004, i2 Technologies, Inc.'s balance sheet showed a  
$197,902,000 net stockholders' deficit, compared to a $296,938,000
deficit at December 31, 2003.


INTERSTATE HOTELS: Moody's Assigns B2 Senior Implied Rating
-----------------------------------------------------------
Moody's Investors Service has assigned a B2 senior implied rating
to Interstate Hotels & Resorts, Inc., and its consolidated
subsidiaries.  The B2 ratings previously assigned to the firm's
five-year $75 million secured term loan and to the three-year
$60 million revolver of Interstate Operating Company, L.P., a
subsidiary of Interstate Hotels & Resorts, Inc., are unaffected.

Interstate Hotels & Resorts, Inc. guarantees these bank credit
facilities, which are secured by the capital stock and assets of
the borrower, assets of the guarantor, and benefit from the first
lien rights to receive management contract payments.  This is the
first time Moody's has assigned a senior implied rating to the
company.  The rating outlook is stable.

Moody's said that the B2 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 bank credit
facility, which currently is the only class of debt outstanding.  
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.  The
B2 senior implied also reflects:

   (1) Interstate's modest scale in the hotel management business
       relative to major hotel brand managers, such as Marriott
       International, Starwood and Hilton;

   (2) moderately high financial leverage; and

   (3) expected low recovery value, in the case of distress, as
       well as execution risks associated with its expanded
       investment strategy to invest in hotel properties.

These weaknesses are balanced by Interstate's healthy cash flow
coverage measures, low operating leverage, established and solid
operating platform, relatively stable management contract cash
flows (which are less volatile than the underlying hotel cash
flows), ability to manage through the recent severe lodging
downcycle, and good diversification by geography, hotel segment
and brand affiliation.  The firm also benefits from a net
operating loss balance of over $19 million that is likely to be
realized over the near term.  Additional positive factors include
management's efforts to reduce its exposure to its corporate
housing business, which is not core to its long-term strategy.

In Moody's view, one of the key challenges Interstate Hotels &
Resorts faces is growing its cash flow diversification through
expansion into hotel ownership, and to materially increase hotel
contracts under management.  Moody's thinks that organic growth
opportunities are limited as hotel management contracts typically
depend on a change in ownership of hotels, absent non-performance
of contracts by a hotel manager.  Interstate intends to grow its
hotel management contract business by stepping up its hotel joint
venture acquisitions.  This strategy entails considerable
execution risk given highly competitive market conditions for
hotel acquisitions.  This risk is heightened by the material
amount of leverage that Interstate could utilize to fund its share
of joint venture investments. Interstate's pro forma leverage for
the secured facility transaction will be 3.2x (Debt/EBITDA). The
rating agency believes this level of leverage is moderately high
given the firm's modest scale, exposure to lodging cycle and
limited access to capital markets.

The performance of hotels managed by Interstate is improving,
reflecting continued recovery in the lodging industry, which
should boost Interstate's cash flow performance.  However, the
company's largest managed portfolio, hotels owned by MeriStar
Hospitality Corporation, has been underperforming due mainly to
significant deferred capital expenditures and recently initiated
renovations by MeriStar.  Under a recently renegotiated agreement
between Interstate and MeriStar, MeriStar owes termination fees to
Interstate on management contracts that were terminated upon a
change in ownership.  MeriStar also obtained at-will termination
rights to terminate management contracts covering up to 600 rooms
a year upon payment of termination fees.

The stable rating outlook reflects Moody's expectations that
Interstate's earnings and balance sheet will continue to improve
as the firm implements its growth plans.  Ratings improvement will
depend on the firm's ability to successfully execute on its growth
strategy and achieve greater cash flow diversification through
additional management contracts and hotel investments.  Downward
pressure on firm's ratings would most likely result should the
implementation of its investment and other growth initiatives
prove more challenging than anticipated.  Negative ratings
adjustment would also result should Interstate be unable to
replace terminated management contracts.

Interstate Hotels & Resorts [NYSE: IHR] is the largest independent
operator of hotel properties in the USA.  As of June 30, 2004, the
company managed 269 hotels, which included branded limited-service
properties, as well as branded full-service service and
independent properties, in the USA, Canada, Portugal and Russia.  
Interstate participates in hotel joint ventures through which it
has ownership stakes in 29 hotels which it also manages.


ITSV INC: Defendants Confirm Receipt of Trustee's $151MM Lawsuit
----------------------------------------------------------------
iPayment Inc. (Nasdaq:IPMT) accounting firms Ernst & Young and
Arthur Anderson have been served with the Summons and Complaint as
named Defendants in the fraud suit filed last Friday, August 6,
2004, by Howard M. Ehrenberg, Trustee, in the U.S. Bankruptcy
Court in Los Angeles. The lawsuit alleges that iPayment's
accountants were actively involved in the evaluation of their
shares prior to a public offering in March 2003, and perpetrated
an arbitrary and fraudulent evaluation to aid its client,
iPayment, in the scheme to defraud.

The Attorneys for the Trustee, Pratter & Young of Los Angeles,
have uncovered concrete evidence and allege on behalf of Trustee
Ehrenberg that shares in the company were valued at various times
within a three-year period without justification. Prices ranged
from $8.00 per share, $7.00 per share, $.37 per share, and, then,
finally up to $16.00 per share when the company finally became
publicly traded. The Trustee alleges in the complaint that at no
time had the company had any profits or any significant
unencumbered assets to justify such disparate evaluations.

Further inquiry led Mr. Michael Pratter to respond to such
discrepancies found in the investigation by his firm and the
Trustee. "The evaluations were clearly specious and apparently
calculated only for the purpose of insuring and placing majority
control in the hands of the then Chairman Mr. Greg Daily and the
then C.E.O. Carl Grimstad. It was part of the conspiracy, as is
alleged in our Complaint on behalf of Trustee Ehrenberg, which in
effect defrauded the creditors and shareholders of the company. It
robbed them of the benefit of the tremendous growth in the
company's value and kept it in control of these two insiders."

The company's shares have declined in price since the announcement
of the lawsuit and have fallen more than $8.00 or 20% in value on
increase in trading volume of 75% on some days.

The lawsuit has resulted in the naming and serving of 23
Defendants alleged to be involved in the conspiracy and includes
the company's accountants, attorneys Richard Schubert, former
attorneys Brobeck, Phelger and Harrison and present attorneys
Steven Holland and David Brown of Morgan, Lewis & Bockius, San
Francisco. Various officers and subsidiaries have also been named.

In addition to disgruntled creditors and shareholders, Mr. Pratter
reported that people are calling his office every day, supplying
much information as well as alleging other wrongdoings on the part
of Daily and Grimstad. Some of the allegations are the canceling
of the health insurance for sick employees of companies taken over
by iPayment, the wrongful termination of employment despite
promises to the contrary, and the termination of stock options
promised but never given. Former employees also allege the use of
call girls, drugs and wild spending, by the companies' officers to
entertain customers and prospective customers of iPayment. Robert
J. Young, Esq., of Pratter & Young, on behalf of Trustee
Ehrenberg, had no comment on the veracity of these allegations but
did say that his firm's "investigation was continuing at a
surprising and rapid pace at this stage of the litigation." He had
no further comments.

The case is now before Judge Vincent Zurzolo, U.S. Bankruptcy
Judge. The first hearing, a Status Conference, will be heard on
October 21, 2004 at 10:00 A.M.

As reported in the Troubled Company Reporter on August 9, 2004,
Pratter & Young, Attorneys, filed a complaint in the United States  
Bankruptcy Court on behalf of a U.S. Bankruptcy Court Trustee,  
Howard M. Ehrenberg, against iPayment Inc., its Chairman, Greg
Daily, C.E.O. Carl Grimstad, and C.F.O. Robert Torino, along with
other companies, law firms, accounting firms and individuals, for
$151,000,000.  

ITSV, Inc., filed for bankruptcy protection on July 26, 2002  
(Bankr. C.D. Calif. Case No. 02-31259).  The Bankruptcy Clerk in  
Los Angeles notified creditors of a possible dividend in ITSV's  
case and the need to file proofs of claim in early May 2004.  The  
Chapter 7 Trustee overseeing the liquidation is:

     Howard M. Ehrenberg, Esq.  
     SULMEYER KUPETZ BAUMANN & ROTHMAN
     333 South Hope St., 35th Floor
     Los Angeles, CA 90071-1406
     Telephone (213) 626-2311   

The Trustee's lawsuit alleges that in 2002 iPayment and its  
officers perpetrated fraud, with the help of their accountants and  
law firms, against various individuals and corporations, when they  
formed the company and failed to disclose to potential investors  
and creditors of the predecessor companies the true nature of  
evaluations in compliance with the Sarbanes Oxley Act, and other  
statutes in effect at the time, which require full disclosure to  
investors before public offerings.  

Commenting on the announcement, Attorney Michael S. Pratter said:  
"We are disappointed to report the failure of our concerted and  
repeated efforts to resolve a dispute between the Trustee and  
iPayment.  It became necessary to file this significant suit for  
redress and damages against those officers, directors,  
accountants, and law firms involved in the formation of iPayment."  

The suit was filed for treble damages totaling $151 million on the  
grounds that the company was formed by a conspiracy between the  
named defendants to mislead and defraud the public in the  
evaluation of the company in its inception in order to gain a much  
more significant share of the initial founders' stock.  Pratter  
added: "In keeping with our stated objectives, we hope that in the  
long-term, the company will not be adversely affected by this  
litigation.  However, should the Trustee be successful, it could  
not only result in a substantial decrease in the market cap of the  
company but the very existence of the company could be  
undermined."  

"The stock of the iPayment is trading currently at $40.40 per  
share and earned a dividend of $.32 per share this quarter.   
Estimates are that the suit will result in a charge against  
earnings and a reduction of the market cap of $668,000,000 by at  
least 20-30% in the first quarter of 2005," Messrs. Ehrenberg and  
Young stated in a press release distributed Friday afternoon.

Further, the company's original attorneys and accountants, the  
defunct firms of Brobeck, Harrison and Phelger, LLP, and Arthur  
Anderson LLP, have been joined in the suit along with their  
successors, Morgan Lewis and Ernst & Young.  All these advisors  
are accused of furthering and participating in the conspiracy to  
assert a lower market cap to investors based upon an  
unrealistically low evaluation, all of which enabled Grimstad,  
Daily, and a group of insiders to gain a larger share of the  
company after going public.  The suit alleges that just two months  
prior to evaluating the company at $.37 per share, Auerbach & Co.  
made an offer for the company for $7.00 per share which the  
Defendants, these officers and directors of iPayment, turned down.

iPayment, Inc., based in Nashville, Tenn., says the lawsuit and  
the underlying allegations are without merit, and the company  
intends "to vigorously defend against them."   iPayment provides  
credit and debit card-based payment processing services to over  
95,000 small merchants across the United States. iPayment's  
payment processing services enable merchants to process both  
traditional card-present, or "swipe," transactions, as well as  
card-not-present transactions, including transactions over the  
internet or by mail, fax or telephone.


IVACO INC: Ontario Court Approves Asset Sale to Heico Affiliate
---------------------------------------------------------------
The Ontario Superior Court of Justice approved the sale of
substantially all of the assets of Ivaco, Inc., to an affiliate of
Heico, LLC, in accordance with the Purchase and Sale Agreements
previously announced.  The transaction is expected to close before
year-end.  The Court also approved the sale of the assets of Ivaco
Inc.'s wholly owned subsidiary IMT Corporation.  The sale of the
assets of IMT Corporation is expected to be completed in mid-
September 2004.

Mr. Randall Benson, Chief Restructuring Officer, said: "This is
another significant step in the path to complete the restructuring
of Ivaco.  We are pleased that the Court has endorsed this sale
transaction and we look forward to completing the remaining
requirements to close as quickly as possible."

The Court has extended the period of Court protection under the
Companies' Creditors Arrangement Act until December 15, 2004.

Ivaco is a Canadian corporation and is a leading North American
producer of steel, fabricated steel products and precision
machined components.  Ivaco's modern steel operations include
Canada's largest rod mill, which has a rated production capacity
of 900,000 tons of wire rods per annum.  In addition, its
fabricated steel products operations have a rated production
capacity in the area of 350,000 tons per annum of wire, wire
products and processed rod, and over 175,000 tons per annum of
fastener products.  Ivaco shares are listed on The Toronto Stock
Exchange (IVA).


JEAN COUTU: FY '03-'04 Results Broadcast Available Until Sept. 17
-----------------------------------------------------------------
A full replay of an August 20, 2004 Jean Coutu Group conference
call is available until September 17, 2004.  The conference call
was a discussion on the financial results for the fiscal year
2003-2004.  Speaker for the conference call is Francois J. Coutu,
President and Chief Executive Officer of The Jean Coutu Group,
Inc.

An interested party can listen to the replay by dialing           
1-800-408-3053 (access code 3088595(pound key)).

                   About The Jean Coutu Group

The Jean Coutu Group, Inc., is now the fourth largest drugstore
chain in North America and the second largest in both the eastern
United States and Canada.  The Company and its combined network of
2,204 corporate and affiliated drugstores (under the banners of
Eckerd, Brooks, PJC Jean Coutu, PJC Clinique and PJC Sante Beaute)
employ more than 59,600 people.  The Group's United States
operations employ over 45,600 persons and comprises 1,549 Eckerd
and 336 Brooks drugstores, all corporate owned stores located in
18 states of the Northeast, mid-Atlantic and Southeastern United
States.

The Group's Canadian operations and the drugstores affiliated to
its network employ over 14,000 persons and comprises 277 PJC Jean
Coutu drugstores, 40 PJC Clinic and 2 PJC Sant, Beaut, all
franchised, in Quebec, New Brunswick and Ontario.

                         *     *     *

As reported in the Troubled Company Reporter on July 21, 2004,
Standard & Poor's Ratings Services rated Jean Coutu Group Inc.'s
US$250 million senior unsecured notes 'B'.  The new notes will
replace a like amount of the company's initially proposed
US$1.2 billion senior subordinated notes, to be reduced to
US$950 million.  The 'BB' bank loan ratings and the '1' recovery
rating indicate that lenders can expect full recovery of principal
in the event of a default.  The outlook is negative.

"The ratings on Jean Coutu reflect the company's very high lease-
adjusted pro forma leverage resulting from the acquisition; its
integration risk associated with the Eckerd stores; and the
challenge to enhance their profitability, particularly in the
front-end; and somewhat constrained liquidity," said Standard &
Poor's credit analyst Don Povilaitis.  These factors are partially
offset by management's track record of successful drugstore
integration in both the U.S. and Canada, the scale of the
acquisition, which will allow the company to become the fourth-
largest drugstore chain operator in North America, and favorable
long-term industry dynamics.


J.P. MORGAN: S&P Affirms Single-B Ratings on Two Cert. Classes
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on classes
B, C, D, and E of J.P. Morgan Chase Commercial Mortgage Securities
Corp.'s commercial mortgage pass-through certificates series
2002-FL1.  At the same time, the ratings on classes A-2, F, G, H,
J, K, and X-FL are affirmed.

The raised and affirmed ratings reflect the stable operating
performance of the floating-rate mortgage pool and loan payoffs
that have increased credit support levels that adequately support
the ratings under various stress scenarios.

As of August 2004, the trust collateral consisted of 16 floating-
rate commercial mortgages indexed to one-month LIBOR with an
outstanding balance of $141.445 million.  The pool has paid down
80% since issuance with no realized losses to date. The master
servicer, Wachovia Bank N.A., reported full-year 2003 net cash
flows -- NCFs -- for the entire pool except for the Terrace Place
Apartments loan (2.69% of the pool), which has not submitted any
financials for 2003.  Based on Wachovia's reported NCFs and the
issuer's LIBOR assumption in annex A (LIBOR at 4.00%), Standard &
Poor's calculated the current weighted average debt servicer
coverage ratio -- DSCR -- for the pool to be 1.67x, up from 1.63x
at issuance for the same loans under the same LIBOR assumption.

Presently, there are two loans with the special servicer, Lennar
Partners, Inc., with a current combined balance of $10.6 million,
or 7.50% of the pool balance.  One of the specially serviced
loans, Terrace Place Apartments, is 30-plus days delinquent and
past its maturity of July 10, 2004.  All other loans in the pool
are current. Neither is expected to incur losses that would
significantly impact the rated classes.  Details of the two loans
are as follows:

   -- Terrace Place Apartments is secured by a 21-unit multifamily
property in Brooklyn, New York, that was constructed in 2000.  It
has a current balance of $3.8 million (2.69% of the pool,
$180,952 per unit).  The borrower has not submitted any financials
since 2002 and the loan is now past maturity.  The loan does not
have any extensions.  The units charge free market rents.  The
loan was recently transferred to Lennar.

   -- Brookfield Commons Building has a current balance of
$6.8 million (4.81% of the pool, $74 per sq. ft.).  It is secured
by a 91,875-sq.-ft. office building in Richmond, Virginia, that
was built in 1975.  The loan had been delinquent due to the loss
of a large tenant, but the loan has now been brought current.
Current occupancy is 52%.  Lennar is negotiating a forbearance
agreement with the borrower to allow time to re-tenant, market,
and sell the property.

The current servicer's watchlist includes six loans totaling
$34.0 million (24%).  The largest loan on the watchlist, One North
Arlington, has a current balance of $8.5 million (6% of the pool,
$52.48 per sq. ft.) and appears on the watchlist due to low
occupancy.  The loan is current and is secured by a 161,718-sq.-
ft. office building in Arlington Heights, Illinois that was built
in 1986. The borrower requested an extension but failed a DSCR
test due to the loss of one large tenant.  A new tenant was signed
June 1, 2004 for a substantial portion of the vacated space, but
with one year's free rent.  Current occupancy has recovered to
91.6% as of July 2004.  The other loans appear on the watchlist
due to low DSCRs or pending maturities.

The pool has geographic concentrations in:

   * Texas (34.5%);
   * California (21.6%);
   * Florida (15.9%);
   * Pennsylvania (6.1%); and
   * Illinois (6.0%).

Significant collateral type concentrations include:

   * office (55.7%);
   * multifamily (33.14%); and
   * retail (8.2%).

Standard & Poor's stressed various loans in the mortgage pool,
paying closer attention to the specially serviced and watchlisted
loans.  The expected losses and resultant credit enhancement
levels adequately support the current rating actions.
   
                         Ratings Raised
   
     J.P. Morgan Chase Commercial Mortgage Securities, Corp.
      Commercial mortgage pass-thru certs series 2002-FL1
   
                     Rating
         Class   To          From   Credit Enhancement
         -----   --          ----   ------------------
         B       AAA         AA                 54.27%
         C       AAA         A                  42.59%
         D       AA          A-                 38.78%
         E       A-          BBB+               32.82%
    
                        Ratings Affirmed
   
    J.P. Morgan Chase Commercial Mortgage Securities, Corp.
      Commercial mortgage pass-thru certs series 2002-FL1
   
              Class   Rating   Credit Enhancement
              -----   ------   ------------------
              A-2     AAA                  66.66%
              F       BBB                  29.24%
              G       BBB-                 23.52%
              H       BB                   14.46%
              J       B                    13.18%
              K       B-                   11.60%
              X-FL    AAA                     NA


KENDRICK ENGINEERING: List of 20 Largest Unsecured Creditors
------------------------------------------------------------
Kendrick Engineering & Manufacturing Company, Inc., released a
list of its 20 largest unsecured creditors:

Entity                        Nature of Claim       Claim Amount
------                        ---------------       ------------
Internal Revenue Service                                $510,000
1100 Comerce Street
Mail Code 5027-DAL
Dallas, TX 75242

GE Capital                    Value of Security:        $191,406
                              $127,048

Spartech                                                $114,082

Scott Porter, Tax Assessor                               $30,741

Arcolectric Corp                                         $28,439

Accurrate Metal Stamping, Inc.                           $27,932

Wells Fargo Equipment         Value of Security:         $26,486
                              $10,000

GMAC                          Value of Security:         $21,291
                              $15,000

Uniroyal Engineered Prod.                                $18,780

Atena Healthcare                                         $13,975

Signet Technical Sales, Inc.                             $11,650

Auldridge Matthews & von Tunglen                         $10,000

LITECO                                                    $7,544

Texileleather                                             $6,543

All Star Corrugated                                       $5,983

United Cooperative Services                               $5,624

TFW Industrial Supply                                     $5,461

Image Exhibits                                            $5,107

SUSPA                                                     $4,754

Concept, Inc.                                             $4,512

Headquartered in Godley, Texas, Kendrick Engineering &
Manufacturing Company, designs and manufactures plastic vacuum
molded products for the automotive industry. The Company filed
for chapter 11 protection (Bankr. N.D. Tex. Case No. 04-47515)
on August 2, 2004. Eric A. Liepins, Esq., in Dallas, Texas,
represents the Company in its restructuring efforts.  When
the Debtor filed for protection from its creditors, it estimated
debts and assets of over $1 million.


LITFUNDING CORP: Court Confirms 2nd Amended Reorganization Plan
---------------------------------------------------------------
LitFunding Corp. and its subsidiary, California LitFunding, both
Nevada corporations are pleased to report that their Second
Amended Joint Plan of Reorganization (Plan) under Chapter 11 of
the Bankruptcy Code was confirmed by the United States Bankruptcy
Court, Central District of California, Los Angeles Division, on
May 26, 2004. The order confirming that ruling was entered into
the court record on June 17, 2004 and became effective on
June 21, 2004.

The Plan divides all claims into different "classes" based upon
their particular legal rights and characteristics. The "treatment"
or payment terms accorded each class of claims in the Plan varies
with each class. The material payment provisions in the Plan can
be summarized as follows:

   -- The "class of claims" comprised of debenture holders will be
      paid in full over a period of five years, with interest;

   -- The class of claims comprised of recourse unsecured claims,
      will receive distributions over a period of approximately
      eighteen months equal to 100% of the principal balance owed
      on such claims; (Each of these claimants will also receive a
      distribution of common stock);

   -- The claims held by the IEP Claimants (the IEP Claimants are
      the claimants that provided the Litfunding Companies
      substantially all of the funding the Litfunding Companies
      advanced to law firms and plaintiffs for litigation       
      financing) have been incorporated into a single composite
      non-recourse promissory note in the amount of $26,275,709.
      
The IEP Plan Note balance will be paid solely from the collections
received by the Lifunding Companies from the lawsuits financed by
the Litfunding Companies prior to February 26, 2004. As these
funds are collected from the Contract Pool, they will be remitted
to a Distribution Agent, less a fixed monthly "administrative
charge" payable to the LitFunding Companies.

The Distribution Agent, who was selected by the IEP Claimants,
will then be responsible for paying the funds out to the IEP
Claimants. If for any reason the funds collected from Contract
Pool and remitted to the Distribution Agent is not sufficient to
fully retire the balance owed on the IEP Note, then the sum of the
"administrative charges" deducted by LitFunding Companies to fund
their overhead, plus the sums paid to the recourse unsecured
creditors from and after October 2004, must be remitted to the IEP
Claimants (the amount would be the lesser of the totality of these
deductions or the shortfall on the IEP Note). This latter
obligation, which totals $1,590,000, is set forth in a second
promissory note referred to as the Contingent Administrative Note.
If the IEP Plan Note is paid in full, the Contingent
Administrative Note is automatically cancelled.

As of the date of the Plan, the Company's approximate liabilities
were $27.5 million of which approximately $26.3 million is
comprised of the obligations in the IEP Plan Note and in the
Contingent Administrative Note. Approximate assets were $10
million not including accrued fees which LitFunding is precluded
from recognizing prior to case settlement. That is a GAAP
requirement.

As of the date the order was entered, the Company had 9,410,850
shares of its common stock issued and outstanding. The Company
also has 1,418,500 options and 970,000 warrants to purchase shares
of its common stock outstanding with employees and related parties
as of the date the order was entered; beyond those totals,
approximately 500,000 options will be issued under the Plan to
ordinary creditors.

The Plan confirms the non-recourse nature of the claims held by
the IEP Claimants. Although this non-recourse debt is substantial,
as of this writing, the LitFunding Companies believe that the
collections from the Contract Pool will range between $30 million
dollars and $36 million dollars within the next two years, which
should be sufficient to fully retire the IEP Plan Note. However,
there is no assurance that sums within this range will in fact be
realized from this source, or that they will be realized within
this time frame, since the collections are solely dependent upon
the results achieved in the underlying lawsuits. If the LitFunding
Companies are successful in retiring the IEP Plan Note from the
collections generated from the Contract Pool as anticipated, the
Contingent Administrative Note will be cancelled, leaving the
LitFunding Companies with a very modest debt burden, and the right
to retain all future collections from the Contract Pool. In
contrast, if the LitFunding Companies are not successful in timely
retiring the IEP Plan Note, they will have to promptly find a
source of funds to retire the obligations arising under the
Contingent Administrative Note.

The Company believes that it is emerging from bankruptcy as a re-
energized company with reduced debt burden and a single business
purpose. Its management takes the position that to have completed
such a large and complex restructuring after the unwarranted and
debilitating litigation of the past 14 months is a remarkable
achievement and that the Company owes its thanks to a dedicated
core staff and outside experts that worked so hard to help
navigate the bankruptcy process. As LitFunding emerges from
bankruptcy it intends to apply this same effort and tenacity to
rebuilding its capital and growing profitably.

In Company estimation, the LitFunding Companies have been among
the nation's largest litigation funding companies and one of the
very few specializing in providing funds to plaintiff's attorneys.
Historically, it has made advances on a purely non-recourse basis.
However, it intends to start marketing its new full recourse loan
product in the third quarter of 2004. Management anticipates that
this product, which accrues interest payments quarterly, will
limit Company exposure to losses and allow for earlier recognition
of revenue. At the same time, management believes that the new
program will help LitFunding respond to the continuous demand from
the legal community for more traditional borrowing vehicles. In
addition, management expects that these loans will carry a lower,
more comfortable interest rate in comparison to the fees the
Company currently charges for its non-recourse advance product.
Management anticipates that the new program will eventually
represent up to 50% of LitFunding's core business.

Management is also confident that the move to Nevada, scheduled
for completion no later than December 31, 2004, will further
strengthen and consolidate recovery from the bankruptcy. It
is believed that the move will enable the Company to take
advantage of more favorable prevailing commercial and tax laws
than experienced currently. The LitFunding Companies remain
committed to aggressively expanding its geographic market
penetration and hopes to explore opportunities to acquire assets
or other companies in this industry.

                           *     *     *

As reported in the Troubled Company Reporter on August 10, 2004,
LitFunding Corp (OTC BB: LFDG) signed a non-binding Letter of  
Intent with Pacific Dawn Capital, LLC, for a multi-stage  
$2.5 million round of funding.  As proposed, Pacific Dawn will  
either make a capital investment or make a loan to a limited  
liability company formed together with LitFunding USA, the new  
wholly owned operating subsidiary of LitFunding. Under the terms  
of the agreement, the limited liability company will receive fees  
for originating, servicing and managing investments made with  
these funds.  After the return of capital invested to Pacific  
Dawn, both the limited liability company and Pacific Dawn will  
participate equally in the fees generated from the investments  
made.  

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


LORAL SPACE: Files Proposed Reorganization Plan in S.D.N.Y
----------------------------------------------------------
Loral Space & Communications Ltd. (OTC Bulletin Board: LRLSQ) and
certain of its subsidiaries filed a proposed plan of
reorganization with the U.S. Bankruptcy Court for the Southern
District of New York. The Plan is supported by the Official
Committee of Unsecured Creditors appointed in Loral's chapter 11
case. The company expects to exit chapter 11 under current
management before the end of the year.

The Plan, which is subject to confirmation by the bankruptcy
court, resulted from negotiations between the company and the
Creditors' Committee to implement the previously announced
agreement in principle.  It provides, among other things, that:

    * Loral's two businesses, Space Systems/Loral and Loral
      Skynet, will emerge intact as separate subsidiaries of
      reorganized Loral (New Loral).

    * Space Systems/Loral, the satellite design and manufacturing
      business, will emerge debt-free.

    * The common stock of New Loral will be owned by Loral
      bondholders, Loral Orion bondholders and other unsecured
      creditors. In addition, bondholders and other creditors of
      Loral Orion will receive an aggregate of $200 million in new
      senior secured notes to be issued by reorganized Loral
      Skynet, New Loral's satellite services subsidiary.

    * New Loral will emerge as a public company and will seek
      listing on a major stock exchange.

    * Existing common and preferred stock will be cancelled and no
      distribution will be made to current shareholders.

To view Loral's reorganization plan: http://bankrupt.com/misc/loral.pdf

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

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


MATRIA HEALTHCARE: S&P Reinstates BB- $35MM Credit Facility Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services reinstated its 'BB-' senior
secured debt rating on disease-state management and fulfillment
services provider Matria Healthcare Inc.'s $35 million revolving
credit facility due October 2005.  

At the same time, Standard & Poor's affirmed its 'B+' corporate
credit rating and its 'B-' subordinated debt rating on Matria's
$84 million of 4.875% convertible senior subordinated notes due in
2024.

Standard & Poor's initially withdrew the senior secured rating
because they believed that the $35 million revolving credit
facility would be refinanced as part of Matria's transaction to
retire $122 million of outstanding 11% senior notes.  However,
because the revolving credit facility will remain outstanding,
Standard & Poor's is reinstating the rating.

The outlook is stable.

"The low-speculative-grade ratings on Matria Healthcare, a
disease-state management and fulfillment services provider to
patients, physicians, and health plans, reflect the company's
limited scale of operations, its position as a small vendor
supplying products for larger medical products manufacturers, and
the decline in its women's health segment," said Standard & Poor's
credit analyst Jesse Juliano.  "These concerns are offset by the
fact that Matria has acquired businesses during the past few years
that have broadened its clinical infrastructure and disease-state
management platforms.  The company is also operating with
relatively moderate debt leverage."

Through more than 40 offices in the U.S. and around the world,
Marietta, Georgia-based Matria manages chronic diseases and
episodic conditions including: diabetes, cardiovascular diseases,
respiratory disorders, high-risk obstetrics, cancer, chronic pain,
and depression.  The company also designs and develops medical
products through its Facet Technologies business, and plans to
expand into neonatal intensive-care case management in the near
term.

Employers, managed-care organizations, and pharmaceutical
companies are Matria's disease-management clients, and the company
has recently signed important new contracts.  However, there have
been a number of new entrants into the disease-management
industry, and it is expected to be more competitive as the
benefits of the business become more widely accepted.  Also,
selling, general, and administrative costs could continue to rise
as the company grows to meet the demand of new disease-management
contracts.


MEDIA GROUP: U.S. Trustee Appoints 5-Member Creditors' Committee
----------------------------------------------------------------
The United States Trustee for Region 2 appointed five creditors to
serve on an Official Committee of Unsecured Creditors in The Media
Group, Inc.'s and its debtor-affiliates' Chapter 11 cases:

      1. HUPA International, Inc.
         Attn: Peter G. Kruzynski, Esq.
         Susman, Duffy & Segaloff, P.C.
         P.O. Box 1684, 55 Whitney Avenue
         New Haven, Connecticut 06507
         Phone: 909-598-9876, Fax: 909-595-8851

      2. Shuttleworth Williams, PLLC
         Attn: Alexander H. Schwartz, Esq.
         3695 Post Road, Suite 203, P.O. Box 701
         Southport, Connecticut 06890-0701
         Phone: 203-255-9829, Fax: 203-255-9839

      3. Donald R. Droppo
         Curtis Packaging Corporation
         44 Berkshire Road
         Sandy Hook, Connecticut 06482
         Phone: 203-426-5861, Fax: 203-426-3951

      4. Daniel E. Bruso
         Cantor Colburn, LLP
         55 Griffin Road South
         Bloomfield, Connecticut 06002
         Phone: 860-286-2929, Fax: 860-286-0115

      5. Richard Frazer, Jr.
         Crescent Marketing, Inc.
         P.O. Box 1500
         10285 Eagle Drive
         North Collins, New York 14111
         Phone: 716-007-0145, Fax: 716-337-0146
   
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 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 and Monteith represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed $10,915,723 in total assets and
$14,743,552 in total debts.


MILLENIUM ASSISTED: Gets OK to Use Cash Collateral Until Sept. 3
----------------------------------------------------------------
Millenium Assisted Living Residence at Freehold, LLC, secured a
further authority to use its secured creditors' cash collateral
through September 3, 2004 in accordance with a Weekly Budget
projecting:

                       Aug. 14    Aug. 21     Aug. 28   Sept. 4
                       -------    -------     -------   -------
  Available Cash       174,148     67,031     109,951   67,512     
  Total Expenses       135,356     47,319     105,263    7,385
  Net Ordinary Income   27,709      5,920     (35,024)  55,439
  Net Cash              13,792     19,712       4,688   40,127  

The Department of Housing & Urban Development is the Assignee of
Arbor National Commercial Mortgage, LLC, which was the Debtor's
primary secured creditor asserting a first lien on all of the
Debtor's prepetition assets including:

      -- accounts receivable,
      -- inventory,
      -- land,
      -- building,
      -- machinery and equipment,

but excluding furniture and furnishings which are subject to the
alleged first lien of Arthur Shuster, Inc.  As of the Petition
Date, the Debtor owed HUD $25,000,000.  

The Debtor needs access to the cash collateral to finance ongoing
postpetition operations and prevent serious damage to the estate.  
The Debtor needs sufficient unencumbered funds to meet its ongoing
payroll and other normal operating expenses.

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.


MORTGAGE CAPITAL: Fitch Affirms Low-B Ratings on Four Classes
-------------------------------------------------------------
Fitch Ratings upgrades Mortgage Capital Funding, Inc.'s,
multifamily/commercial mortgage pass-through certificates, series
1997-MC2, as follows:

   -- $43.5 million class C to 'AA+' from 'AA-'.

In addition, Fitch affirms these certificates:

   -- $379.8 million class A-2 'AAA';
   -- Interest-only class X 'AAA';
   -- $52.2 million class B 'AAA';
   -- $39.2 million class D 'A-';
   -- $43.5 million class F 'BB;
   -- $8.7 million class G 'BB-';
   -- $19.6 million class H 'B';
   -- $10.9 million class J 'B-'.

Fitch does not rate the $26.1 million class E and the
$12.2 million class K certificates.  Class A-1 has been paid in
full.  The upgrades are primarily the result of increased
subordination levels due to loan payoffs and amortization.

As of the July 2004 distribution date, the pool's aggregate
principal balance has been reduced by 27.0%, to $635.8 million
from $870.6 million at issuance.  Of the 181 original loans in the
pool, 138 loans remain outstanding.  The pool is well diversified
by loan size and geographic location, as evidenced by the top five
loans representing 16.7% and 15.6% collateralized by properties
located in California.

Midland Loan Services, the master servicer, collected year-end
2003 financial statements for 82% of the pool balance.  The YE
2003 weighted average debt service coverage ratio (DSCR) for these
loans was 1.52 times (x), compared to 1.51x at issuance for the
same loans.  To date, realized losses total $5.2 million and
affect class K.

Five loans (3.8%) are in special servicing, of which four are over
90 days delinquent.  The largest specially serviced loan is
secured by a retail property in Victorville, California, and
remains current in its debt service payments.  The property's
performance declined as a result of the anchor tenant, House2Home,
filing for bankruptcy and subsequently vacating the property in
2001.  As part of the temporary modification agreement, the
borrower deposited lease termination fees into an escrow account
that have been used to make timely payments of the debt service
since the bankruptcy filing.  The funds in the escrow account are
expected to be depleted by October 2004.  The property is
currently only 12% occupied.  As a result, the borrower is
discussing options with the special servicer that would allow a
new tenant to occupy the vacant space.

The second largest specially serviced loan (1.0%) is secured by a
limited-service hotel property in Brookfield, Wisconsin and is
90+ days delinquent.  Performance at the property has declined,
and with a scheduled maturity date of September 2004, the special
servicer is currently exploring workout options.

Fitch is also concerned with the high percentage of Fitch Loans of
Concern (13.05%) in the pool.  The largest loan of concern (2.7%)
is secured by the Fisherman's Wharf Ramada Plaza, a full-service
hotel property located in San Francisco.  While the loan has
remained current, the property has suffered a decline in
performance as a result of reduced tourism, as well as competition
from competing hospitality properties.  DSCR as of YE 2003 was
0.52x, with occupancy at 69%, versus 1.56x and 87%, respectively,
at issuance.


NEWMARKET TECH: Acquires 20% Equity Stake in Sensitron Inc.
-----------------------------------------------------------
NewMarket Technology, Inc. (OTCBB:NMKT) and Sensitron Inc.
announced an affiliate partnership to pursue sales of Sensitron's
wireless CareTrends(TM) technology in the Healthcare market
segment. The partnership includes NewMarket acquiring a 20% equity
stake in Sensitron.

Sensitron Inc. is a Silicon Valley-based Wireless Healthcare
innovations company that has developed the CareTrends(TM) Wireless
Bridge System. The system minimizes transcription errors and
eliminates lag time between reading, capturing and documenting
clinical data because it directly communicates vital signs and
other data from wirelessly enabled point-of-care medical devices
at the bedside.

The Sensitron technology was featured on NBC 11 Health Watch
(video segment available on Sensitron website) in the San
Francisco Bay Area. The proprietary Sensitron technology offers
Cisco Systems (Nasdaq:CSCO) technology integrated into the overall
solution and is featured on Cisco's website. The streaming video
segment can be viewed by selecting the May 5th video news release
at http://newsroom.cisco.com/dlls/feature_archive.html  

Sensitron, Inc. -- http://www.sensitron.net/-- is a technology  
company pioneering the development of Health Resource Management
(HRM). It has developed the CareTrends(TM) System, an enterprise
software and wireless vital signs monitoring system, to improve
patient quality of care and decrease healthcare costs. The
technology is currently installed in a number of hospitals with
several additional hospitals already contracted for installation.
Sensitron is lead by a telecommunications veteran of 23 years.
Rajiv Jaluria has experience at Sprint (NYSE:PCS) and Bell Labs
(NYSE:LU) with M.S. and Ph.D. (research only) degrees in
Electrical Engineering from Purdue University and a MBA from
Pepperdine University.

"Mr. Jaluria visited our facilities this week to learn about our
existing wireless and RFID solutions," said Philip Verges, CEO of
NewMarket Technology. "We are both enthusiastic about the
potential of Sensitron's technology in a healthcare application
and believe their CareTrends(TM) System will change hospital
management as it is known today. We also recognize the potential
of Sensitron's technology in other industry segment applications
and intend to move quickly to exchange technical knowledge and
expertise between Sensitron and our existing wireless technologies
so that we can promptly take advantage of the cross-selling
opportunities."

"We simply believe in the NewMarket business model," said Rajiv
Jaluria, CEO of Sensitron. "My entire career has been about
introducing new technologies to market. I have experience in both
Fortune 500 research and development departments as well as with
the traditional venture capital route; NewMarket has come up with
a better mousetrap. The model they have pioneered makes sense and
shows more promise than the traditional startup models that I have
been part of in the past. NewMarket and Sensitron will be partners
with the promise of synergy and opportunity a key reason for this
partnership. We are confident in our ability to expand with
NewMarket into the Healthcare market segment and excited by the
opportunity to integrate our technology into NewMarket's existing
technologies for application in additional market segments."

                  About NewMarket Technology Inc.  

In 2002, NewMarket (formerly IPVoice Communications Inc.) --  
http://www.newmarkettechnology.com/-- launched a business plan to   
continuously introduce emerging communication technologies to  
market. The plan included a financing model for early technologies  
and an approach to creating economies of scale through a  
specialized service and support organization intended specifically  
for the emerging technology industry. The Company posted six  
consecutive profitable quarters through 2003 and established an  
annualized $15 million in revenue. In 2003, NewMarket acquired  
Infotel Technologies in Singapore and IP Global Voice, led by CEO  
Peter Geddis, a former Executive Vice President and Chief  
Operating Officer of Qwest Communications (NYSE:Q). In 2004, the  
Company diversified its communications technology offering into  
the healthcare and homeland security industries with the  
respective acquisitions of Medical Office Software Inc. and  
Digital Computer Integration Corp. RKM IT Solutions of Caracas,  
Venezuela, was also recently acquired as NewMarket's entry into  
the Latin American market.

                          *   *   *   
   
                Liquidity and Capital Resources   
   
In the Form 10-QSB for the quarterly period ended March 31,
2004, NewMarket reports:   
   
"At March 31, 2003, the Company had cash of $16,300 and a  
working capital deficit of $1,510,700 as compared to cash of  
$1,395,000 and working capital surplus of $252,000 at March 31,  
2004. This improved working capital situation was due primarily to  
the implementation of the previously herein described new  
business model implemented in June 2002, which includes as part of  
the plan the acquisitions made over the last year. In addition we  
have been successful attracting investment capital to carry out  
this business model.   
   
"Since inception, the Company has financed operations primarily   
through equity security sales and convertible debt. The nature of   
the growth strategy of the Company will require further funding  
to be acquired either through equity or debt. Accordingly, if    
revenues are insufficient to meet needs, we will attempt to  
secure additional financing through traditional bank financing or  
a debt or equity offering; however, because the rapid growth and  
nature of the acquisitions of the Company and the potential of a  
future poor financial condition, we may be unsuccessful in  
obtaining such financing or the amount of the financing may be  
minimal and therefore inadequate to implement our continuing plan  
of operations. There can be no assurance that we will be able to    
obtain financing on satisfactory terms or at all, or raise funds    
through a debt or equity offering. In addition, if we only have    
nominal funds by which to conduct our operations, it will    
negatively impact our potential revenues."


NORTEL NETWORKS: Reports Preliminary 2nd Quarter Financial Results
------------------------------------------------------------------
Nortel Networks Corporation (NYSE:NT) (TSX:NT) reported estimated
limited preliminary unaudited financial results for the first and
second quarters of 2004, prepared in accordance with United States
generally accepted accounting principles, and new strategic
initiatives to reset its business model.

These initiatives include a new streamlined organizational
structure to improve alignment with enterprise and carrier
customers, which is intended to enable the Company to build on its
market leadership in developing the converged networks of the
future and improve business efficiency and operating cost
performance in an increasingly competitive market. The streamlined
organizational structure will lead to an approximate 10 per cent
workforce reduction.

Nortel Networks also provided an update regarding the progress of
the Audit Committee's continuing independent review, including the
termination for cause of seven finance executives. The Company
also provided an update on the progress of its restatements and
revisions to prior period financial results.

The announcements serve as a status update by the Company and its
principal operating subsidiary Nortel Networks Limited pursuant to
the alternative information guidelines of the Ontario Securities
Commission. These guidelines contemplate that the Company and NNL
will normally provide bi-weekly updates on their affairs until
such time as they are current with their filing obligations under
Canadian securities laws.

"We are pleased to be able to communicate preliminary first and
second quarter 2004 results and details of a new streamlined
organization," said Bill Owens, president and chief executive
officer, Nortel Networks. "With the restatement moving toward
completion, we are focusing our full attention on driving the
business forward with a focus on costs, cash and revenues as
overall strategic imperatives. With our proven strengths in high
performance high reliability networks, supported by our new
simplified organization, we are well-positioned to deliver the
secure, reliable converged networks customers are demanding to
increase their own competitiveness."

Estimated Limited Preliminary Unaudited Results for the First and
Second Quarters of 2004

Estimated unaudited revenues for the first six months of 2004 were
approximately US$5.1 billion, with approximately US$2.5 billion in
the first quarter and US$2.6 billion in the second quarter.
Estimated unaudited net earnings per share in the first half of
2004 were US$0.00 to US$0.02, with US$0.00 to US$0.01 in the first
quarter and US$0.00 to US$0.01 in the second quarter, in each case
on a fully diluted basis.

Estimated unaudited net earnings in the second quarter of 2004
included a benefit of approximately US$0.02 per share on a fully
diluted basis related to a customer contract settlement in South
America.

Estimated unaudited revenues by segment on a percentage of revenue
basis for the first and second quarters of 2004 were:

                                      Percentage of Revenue
                              Q1 2004                      Q2 2004
Wireless Networks             51%                          51%
Enterprise Networks           21%                          22%
Wireline Networks             18%                          17%
Optical Networks              10%                          10%

"The revenue performance reflects our customers' continued
investment in our solutions as a provider of choice in building
secure converged networks and their ongoing confidence in Nortel
Networks," said Owens.

Recent business highlights are included in the annex to this press
release.

                           Gross Margin

Gross margin for the first six months of 2004 is estimated at
approximately US$2.2 billion, or approximately 43 percent of
revenues, with approximately US$1.1 billion in each of the first
and second quarters. Margins in the second quarter reflect lower
margins related to initial wireless deployments and the mix of
wireless revenues in the quarter.

                             Expenses

Selling, general and administrative expenses and research and
development expenses combined are estimated at approximately
US$2.1 billion for the first six months of 2004 and were
approximately equal in the first and second quarters.

                              Cash

Cash balance at the end of the second quarter of 2004 was
approximately US$3.7 billion and was approximately US$3.6 billion
at the end of the first quarter of 2004.

                  Timing of Final Unaudited Results

These estimated limited preliminary unaudited results are subject
to change and to a number of important limitations described below
under "Status of Restatement and Filing of Financial Statements".
The final unaudited results for the first and second quarters of
2004 will be available upon the filing of the quarterly reports
for such periods, which the Company expects to file by the end of
the third quarter of 2004.

                        Strategic Plan

Nortel Networks believes significant opportunities for growth
exist across the marketplace and particularly in emerging markets
such as China and India as customers evolve their networks to high
performance converged networks underpinned by high security and
reliability. Security and reliability have always been fundamental
requirements for service provider networks of all types and they
are increasingly important to governments, defense interests and
enterprises around the world. Nortel Networks is driving its
strategy with the aim of growing market share and to leverage its
strength in high performance, high reliability networks in
opportunities such as those mentioned above.

Existing and new competitors are aggressively positioning
themselves to capture significant growth opportunities. At the
same time, the financial results for the first and second quarters
of 2004 announced today indicate that the Company's business
operations are not achieving the targeted operating cost
performance.

"We have put in place a strategic plan that recognizes industry
dynamics and the evolution of the converged network, and leverages
our acknowledged strengths in high reliability networks and strong
customer loyalty. The plan further reflects our renewed commitment
to best corporate practices and ethical conduct," said Owens.
"Building on this foundation, it is our intention to be optimally
positioned to maximize strategic opportunities as they arise. Our
ability to be proactive will be fueled by a dedicated emphasis on
costs, cash and revenues."

The impact of the strategic plan outlined today, and detailed in
the annex to this press release, will lead to an anticipated
focused reduction in employees of approximately 3,500, or an
estimated 10 per cent of the workforce. This workforce reduction
is expected to be substantially completed by year-end, and will be
subject to completion of the appropriate information and
consultation processes with the relevant employee representatives
in certain jurisdictions, as required by law. The Company
currently estimates costs of approximately US$300 million to
US$400 million in connection with this work plan and is targeting
annualized cost savings of approximately US$450 million to US$500
million. The details of this work plan and the timing of the
financial statement impacts are expected to be finalized by the
end of the third quarter of 2004.

"In an increasingly cost-competitive environment, we are taking
the steps necessary to continue to grow market share and, together
with the actions announced today, are taking the important steps
to improve our profitability and cash generation," said Owens. "I
am saddened that these actions will necessitate a decrease in our
workforce. Nortel Networks employees have demonstrated remarkable
loyalty during this challenging period. I recognize the impact
these measures will have on these fine people who have served
Nortel Networks well."

The principal components of the strategic plan are:

   -- a renewed commitment to best corporate practices and ethical
      conduct, including through the establishment of a chief
      ethics and compliance officer;

   -- a streamlined organizational structure to reflect alignment
      with carrier converged networks;

   -- an increased focus on the enterprise market and customers;

   -- optimized research and development programs for secure, "5
      9s" reliable converged networks;

   -- the establishment of a chief strategy officer to drive
      partnerships, new markets and acquisitions;

   -- the establishment of a chief marketing officer to drive
      overall marketing strategy;

   -- the strategic review of embedded services to assess
      opportunities in professional services business; and

   -- a distinct focus on government and defense customer
      segments.

                        Business Outlook

The Company continues to expect the market will grow in the low to
mid-single digits in 2004 compared to 2003, and that its revenues
will grow faster than the market. Nortel Networks expects, through
the implementation of its strategic plan, to reduce its operating
expenses to 35 percent of revenues or lower on an annualized basis
in 2005. Considering the impacts of the strategic plan and higher
costs associated with initial customer deployments in emerging
markets, the Company expects gross margins in the range of 40 to
44 percent of revenues through 2005.

            Status of Audit Committee Independent Review
                        Personnel Actions

The independent review by the Nortel Networks Audit Committee is
continuing. The Audit Committee expects to complete that portion
of its inquiry which affects the Company's and NNL's ability to
finalize and file their audited financial statements for the year
2003 in sufficient time to enable the Company and NNL to file such
financial statements by the end of the third quarter of 2004. The
Audit Committee anticipates that there will be additional work
done on remedial measures, internal controls, and improvements to
processes beyond the filing of the Company's and NNL's audited
2003 financial statements.

The Audit Committee review has focused on the establishment,
timing of, support for and release of accruals and provisions.
Based on the Committee's work to date, the Company has found that
a significant number of accruals and provisions were established
and/or released in 2002 and 2003 that were not in accordance with
applicable generally accepted accounting principles. The Audit
Committee's objective is to arrive at a full understanding of the
facts and circumstances that gave rise to these errors before
audited financial statements for the year 2003 are finalized and
filed.

As previously announced on April 28, 2004, the Company terminated
for cause each of its former president and chief executive
officer, chief financial officer and controller. Today, the
Company announced that seven individuals with significant
responsibilities for financial reporting at the line of business
and regional levels have also been terminated for cause. Four of
these individuals had previously been placed on paid leaves of
absence, as announced on April 28, 2004. In making these and the
previous determinations, the Board of Directors found that each of
these ten individuals had primary, or substantial, responsibility
for the Company's financial reporting; that if not aware, each
ought to have been aware that the establishment and/or release to
income of such accruals and provisions were not in accordance with
applicable generally accepted accounting principles; and that the
improper application of generally accepted accounting principles
with respect to these accruals and provisions misstated the
Company's financial statements. The Company will demand repayment
by these individuals of payments made under Company bonus plans in
respect of 2003, and will take further additional action with
respect to these individuals, if appropriate.

The Board of Directors reiterated its commitment to continue to
fully cooperate with the ongoing investigations of these matters
by the regulatory and law enforcement authorities in both Canada
and the United States.

As previously announced, the Company has retained outside
consultants to assist it in reviewing and assessing its finance
organization and the development and implementation of appropriate
processes and financial systems. The Audit Committee's independent
review is also focused on remedial measures, strengthening
internal controls and improvements to processes. Together, the
recommendations from these assessments, when completed and
presented to the Board of Directors, are intended to strengthen
internal controls over financial reporting and address the
material weaknesses in internal controls previously identified by
the Company's independent auditors. The Company will provide
additional details as to these recommendations in connection with
the filing of its financial statements for 2003 and for the first
and second quarters of 2004 and related periodic reports.

                    Status of Restatement and
                 Filing of Financial Statements

The Company and NNL continue to dedicate significant resources to
the process to complete their financial statements as soon as
practicable. As previously announced, the Company and NNL continue
to work on the restatement and revisions of their financial
results for each fiscal quarter in 2003 and for 2002 and 2001, and
the preparation of their financial statements for the full year
2003 and the first and second quarters of 2004.

As previously announced, the Company and NNL expect to file, by
the end of the third quarter of 2004, financial statements for the
year 2003 and the first and second quarters of 2004 and related
periodic reports, and follow thereafter, as soon as practicable,
with any required amendments to periodic reports for prior
periods.

Based on the Company's work to date, it currently does not expect
changes to the principal estimated impacts from such restatements
and revisions to the Company's results previously outlined in the
Company's press release dated July 13, 2004, except for the
following:

   -- approximately three-quarters of the reduction in 2003 net
      earnings identified to date impacts the first half of 2003
      (up from two-thirds previously estimated), with the
      remaining approximate one-quarter reduction impact to the
      second half of 2003.

The Company's work to date with respect to the restatements and
revisions and the principal estimated impacts mentioned above and
the Company's expectations as to timing of the filing of financial
statements and related periodic reports remain subject to a number
of important limitations, including:

   -- the principal impacts are estimated impacts which have been
      identified by the Company based on the work done to date and
      are not projections of the final total impacts. As such, the    
      principal estimated impacts continue to be preliminary,
      partial and subject to change;

   -- the ongoing work of the Nortel Networks Audit Committee
      independent review;

   -- the ongoing work to be done by the Company related to the
      restatements and revisions and the impact of accounting for
      certain other matters, including foreign exchange;

   -- the previously disclosed material weaknesses in Nortel
      Networks internal controls over financial reporting;

   -- the review or audit of the Nortel Networks financial
      statements by Nortel Networks independent auditors, Deloitte       
      & Touche LLP, as the above estimates of the principal
      impacts of the restatements identified to date have not been
      the subject of a review or audit engagement by Nortel
      Networks independent auditors; and

   -- the final determination of the impact of adjustments arising
      from subsequent events on the Company's results of operation
      or financial position.

The financial results of NNL are consolidated into the Company's
results. NNL's financial statements for the applicable periods
will also be restated upon the related restatements of the
Company's financial statements. NNL's preferred shares are
publicly traded in Canada.

                           Other Matters

                       EDC Support Facility

NNL is currently in discussions with Export Development Canada to
obtain a new waiver under the EDC performance-related support
facility of certain defaults related to the delay by the Company
and NNL in filing their respective Q2 2004 Quarterly Reports on
Form 10-Q, and to extend the current waiver, scheduled to expire
on August 30, 2004, related to the delayed filings of their 2003
Annual Reports on Form 10-K and Q1 2004 Quarterly Reports on Form
10-Q, in each case with the U.S. Securities and Exchange
Commission, the trustees under Nortel Networks public debt
indentures and EDC. The existing waiver also applies to certain
other breaches that have arisen or may arise under the EDC Support
Facility relating to the delayed filings and the restatement of
the Company's and NNL's financial results.

If NNL fails to obtain a waiver relating to the Q2 Reports by
August 24, 2004, or an extension of the current waiver by August
30, 2004, EDC would have the right at such times to require NNL to
cash collateralize the support outstanding under the EDC Support
Facility and to exercise its rights against the collateral under
NNL's related security agreements. There can be no assurance that
NNL will receive any new waivers or any extension of the existing
waiver from EDC.

The EDC Support Facility provides up to US$750 million in support,
all presently on an uncommitted basis. As of August 15, 2004,
there was approximately US$274 million of outstanding support
utilized under the EDC Support Facility.

                     Status of Legal Proceedings

A proposed class proceeding has been commenced before the Ontario
Superior Court of Justice against the Company, NNL and various
current and former officers and directors claiming damages of Cdn.
$250 million for alleged breaches of trust and fiduciary duty,
oppressive conduct and misappropriation of corporate assets and
trust property in respect of the payment of cash bonuses to
executives, officers and employees in 2003 and 2004 under the
Nortel Networks Return to Profitability bonus program. The claim
alleges that the bonus payments were paid based on falsely
reported financial performance and diverted the profits of the
Company and NNL that ought to have been shared with the Company's
shareholders. The claim also seeks an order under the Canada
Business Corporations Act directing that an investigation be made
respecting these bonus payments.

Except as to the matters described above, the Company and NNL
reported that there have been no other material developments in
the matters reported in their status updates of June 2, 2004, June
29, 2004, July 13, 2004, July 27, 2004 and August 10, 2004 and the
Company's press release "Nortel Networks Updates Status of RCMP
Review" dated August 16, 2004.

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.


NORTEL NETWORKS: S&P Keeps Low-B Ratings On CreditWatch Developing
------------------------------------------------------------------
Standard & Poor's Ratings Services' long-term corporate credit
rating and other long-term ratings on Nortel Networks, Corp., and
Nortel Networks, Ltd., remain on CreditWatch with developing
implications, where they were placed April 28, 2004.  The
CreditWatch developing listing indicates that ratings may be
raised, lowered, or affirmed.

As previously reported Standard & Poor's lowered its 'B' long-term
corporate credit rating and other long-term ratings on Nortel
Networks Corp. and Nortel Networks Ltd. to 'B-'.

Brampton, Ontario-based Nortel Networks reported preliminary
estimated unaudited results for the first and second quarters of
2004 and provided an update on its audit committee independent
review.  Nortel Networks' announcement affirmed the expected
timing for filing of the company's financial statements with the
various regulatory bodies, on or before Sept. 30, 2004.  In
response to competitive market conditions, the company also
announced a further restructuring and reorganization.

"Having Nortel Networks affirm the expected timing of filing
audited financial statements substantially reduces the uncertainty
of a potential put of those indentures," said Standard & Poor's
credit analyst Mark Mettrick.  Since March 30, 2004, as a result
of the delays in filing audited financial statements for 2003,
bondholders have had a right to file a notice of noncompliance.  
Such notice could accelerate repayment if not cured within 90
days.  Given that no debtholder action has been taken, and that
the company is now likely within a deliverable 90-day cure period,
the risk of an actual acceleration and default on the debt is
materially reduced.  Although the expected filing of audited
financial statements and lower possibility of a bondholder put are
positive for the company, the ratings on Nortel Networks will
remain on CreditWatch until the company is in full compliance with
its indentures.  Standard & Poor's will than assess the company's
business prospects and the effect of the restructuring and
reorganization on its financial profile.

The preliminary estimates highlight the continued competitive
pressures in the market, with Nortel Networks announcing that
gross margins will not be within the previous target range.  
Nevertheless, the new restructuring will help to further align
costs.

Favorable resolution of these matters could lead to the ratings on
Nortel Networks being raised when removed from CreditWatch.  Based
on profitability targets set for 2005, the company would be in a
position to generate positive operating income and cash flow in
2005.  Cash costs associated with the restructuring are expected
to be less than estimated costs savings of US$450 million to
US$500 million annually.  Conversely, if the ongoing internal and
external investigations should uncover systematic problems, which
could affect the company's future operations, the ratings could be
lowered.  Standard & Poor's will meet with the company after
completion of its independent review and filing of its financial
statements to determine the effect on these matters on the ratings
on the company.


OCTAGON INVESTMENT: S&P Puts BB Rating on $10.75M Class B-2L Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Octagon Investment Partners VII Ltd./Octagon Investment
Partners VII (Delaware) Corp.'s $373.40 million fixed- and
floating-rate notes due 2016.

The preliminary ratings are based on information as of
Aug. 19, 2004.  Subsequent information may result in the
assignment of final ratings that differ from the preliminary
ratings.

The preliminary ratings reflect:

   -- The credit enhancement provided to each class of notes
      through the subordination of cash flows to more junior
      classes and preferred shares;

   -- The transaction's cash flow structure, which has been
      subjected to various stresses requested by Standard &
      Poor's;

   -- The experience of the collateral manager; and

   -- The legal structure of the transaction, including the
      bankruptcy remoteness of the issuer.

A copy of Standard & Poor's complete presale report for this
transaction can be found on RatingsDirect, Standard & Poor's Web-
based credit analysis system, at http://www.ratingsdirect.com/  
The presale can also be found on the Standard & Poor's Web site at
http://www.standardandpoors.com/ Select Credit Ratings, and then  
find the article under Presale Credit Reports.
   
   
                  Preliminary Ratings Assigned

              Octagon Investment Partners VII Ltd.
        Octagon Investment Partners VII (Delaware) Corp.
   
       Class             Rating           Amount (mil. $)
       -----             ------           ---------------
       X                 AAA                         6.40
       A-1L              AAA                       294.00
       A-2L              AA                         23.00
       A-3L              A-                         16.50
       B-1L              BBB                        22.75
       B-2L              BB                         10.75


OHIO VALLEY HEALTH: S&P Cuts Ratings Three Notches to B from BB
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its underlying ratings
-- SPURs -- and standard long-term ratings three notches to 'B'
from 'BB' on Belmont County, Ohio's and Ohio County Commission,
W.Va.'s bonds, issued for Ohio Valley Health Services and
Educational Corp., West Virginia.  The outlook is stable.

The lower rating reflects the system's historically unprofitable
operations, which were exacerbated by challenges at Ohio Valley
Medical Center, the system's West Virginia-based hospital -- that
led to deeper operating losses in 2003 and 2002, as well as weaker
professional and general liability insurance coverage, including
limited catastrophic coverage, for both the hospitals and
particularly for Ohio Valley Medical Center due to its self-
insurance exposure.  The rating also reflects limited balance
sheet flexibility due to low liquidity and upcoming capital
projects that will limit the system's ability to strengthen its
balance sheet.

These credit weaknesses are mitigated by improved results for the
latter half of 2003 and interim 2004 for the system as a whole due
to a number of revenue-enhancement and cost-saving initiatives,
improved business volumes, and profitability at East Ohio Regional
Hospital, the system's Ohio-based hospital, and a competitive
advantage in geographic coverage.

"The stable outlook reflects the expectation that the system's
initiatives to turn around operations will continue and provide
adequate cash flow to fund future capital projects," said Standard
& Poor's credit analyst Anita Varghese.  "However, while
management is strategically investing in [East Ohio Regional
Hospital], it will also need to address [Ohio Valley Medical
Center's] aging facility and financial viability," she added.

Ohio Valley Health Services and Educational Corp. operates the
121-bed OVMC in Wheeling, West Virginia and the 78-bed East Ohio
Regional Hospital across the Ohio River, in Martins Ferry, Ohio,
offering broad geographic reach.  However, Ohio Valley Health
Services and Educational Corp., which is situated in a service
area with a declining population and below-average income levels,
needs to expand its business by taking market share away from its
main competitor, the 252-bed Wheeling Hospital.  The obligated
group consists of the parent and the two hospitals.


OM GROUP: S&P's Low-B Credit & Sub. Debt Ratings on CreditWatch
---------------------------------------------------------------
Standard & Poor's Ratings Services' 'B+' corporate credit and 'B-'
subordinated note ratings on Cleveland, Ohio-based OM Group Inc.
remain on CreditWatch, but the implications are revised to
developing from negative.

"The revision reflects the potential that the ratings could be
raised upon a satisfactory outcome of the independent auditors'
review of OM's restated financial statements and if earnings
continue at improved levels," said Standard & Poor's credit
analyst Wesley E. Chinn.

With the recent completion of the investigation by the chemical
company's audit committee, OM expects to restate its financial
statements for 1999 through 2003.  The audit committee has
determined that certain adjustments to inventory and other
accounts were improperly recorded for a number of years, resulting
in overstatements--totaling $115 million to $120 million--of
earnings before income taxes for 1999, 2000, and 2001.  During
2002 and 2003, most of those improper adjustments were written
off, resulting in understatements--$116 million to $121 million--
of earnings before income taxes for those two years.  The company
now expects that the aggregate reduction to retained earnings as
of Sept. 30, 2003, from the restatements described and the
negative impact of restatement issues that relate to periods prior
to 1999 will be less than $25 million.

Following completion of the audit of the restated years by the
company's independent auditors, OM expects to file its 2003 Form
10-K, including audited restated financial statements for 2001 to
2003, and 2004 Form 10-Qs with the SEC by Oct. 31, 2004.  The
restated financial statements and audit committee investigation
are subject to review by the SEC.

The CreditWatch listing will be resolved once Standard & Poor's
has reviewed the audited restated financial statements and
discussed with management its accounting controls and practices,
business fundamentals (including the political and civil
instability risks associated with the Democratic Republic of
Congo, its principal cobalt supplier country, and long-term nickel
supply uncertainties), financial plans, and shareholder class
action lawsuits related to the decline in the company's stock
price after the 2002 third-quarter earnings announcement.


OMNI FACILITY: Committee Turns to Capstone for Financial Advice
---------------------------------------------------------------
The Official Unsecured Creditors Committee appointed in Omni
Facility Resources, Inc.'s and its debtor-affiliates' chapter 11
cases seeks permission from the U.S. Bankruptcy Court for the
Southern District of New York to employ Capstone Corporate
Recovery, LLC, as its financial advisor.

Capstone will:

    a. advise and assist the Committee in its analysis and
       monitoring of the Debtors' historical, current and
       projected financial affairs, including without
       limitation to, schedules of assets and liabilities,
       statement of financial affairs, periodic operating
       reports, analyses of cash receipts and disbursements,
       analyses of cash flow forecasts, analyses of trust
       accounting, analyses of various asset and liability
       accounts, analyses of cost-reduction programs, analyses
       of any unusual or significant transactions between the
       Debtors and any other entities including business
       acquisitions, and analyses of proposed restructuring
       transactions;

    b. monitor any sale processes undertaken by the Debtors to
       sell all or parts of the Debtors' businesses;

    c. assist and advise the Committee and counsel in reviewing
       and evaluating any court motions filed or to be filed
       by the Debtors or any other parties-in-interest;

    d. analyze and critique the terms and conditions of any
       debtor-in-possession financing arrangements;

    e. advise and assist the Committee in evaluating the
       retention arrangements for advisor to be retained by the
       Debtors;

    f. advise and assist the Committee and counsel in
       identifying and/or reviewing preference payments,
       fraudulent conveyances and other causes of action;

    g. analyze the Debtors' assets and unsecured creditors
       recovery under various recovery scenarios;

    h. analyze alternative reorganization scenarios in an effort
       to maximize the recovery to general unsecured creditors
       and develop negotiation strategies to support the
       Committee's position;

    i. assist and advise the Committee in evaluating and
       analyzing restructuring proposals by the Debtors,
       including reviewing and providing analysis of any
       plan of reorganization and disclosure statement relating
       to the Debtors;

    j. develop a monitoring process that enables the Committee
       to effectively evaluate the Debtors' performance on an
       ongoing basis; and

    k. provide other services that are consistent with the
       Committee's role and duties as may be requested from time
       to time.

Capstone Corporate will charge hourly fees ranging from $50 to
$495.

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

Headquartered in South Plainfield, New Jersey, Omni Facility --
http://www.omnifacility.com/-- provides architectural,  
janitorial, landscaping and electrical services.  The Debtor 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 Company in its restructuring efforts.  When
the Debtor filed for protection, it listed $80,334,886 in total
assets and $100,285,820 in total debts.


ONSITE TECH: Employs Hughes Watters as Bankruptcy Counsel
---------------------------------------------------------
Onsite Technology, LLC seeks approval from the U.S. Bankruptcy
Court for the Southern District of Texas to employ Hughes,
Watters & Askanase LLP as its counsel.

The Debtor selected Hughes Watters because the Firm has
substantial expertise and experience in bankruptcy matters and
will be able to provide the full range of services needed in its
case.

Hughes Watters will:

    a) advise and consult with the Debtor about its powers and
       duties as a debtor-in-possession in the continued
       operation of its business;

    b) represent the Debtor in cash collateral and debtor-in-
       possession financing negotiations and litigation;

    c) represent the Debtor concerning disposition of its
       executory contracts;

    d) assist the Debtor in the development, negotiation,
       litigation and confirmation of a chapter 11 plan of
       reorganization and the preparation of a disclosure
       statement in respect thereof, concerning treatment of
       secured and unsecured claims;

    e) prepare the necessary applications, motions, complaints,
       adversary proceedings, answers, orders, reports and other
       pleadings and legal documents, in connection with matters
       affecting the Debtor and its estate;

    f) take actions as may be necessary to preserve and protect
       the Debtor's assets, including if required by facts, the
       prosecution of avoidance actions and adversary or other
       proceedings on Debtor's behalf, defense of actions
       commenced against the Debtor, negotiations concerning
       litigation in which Debtor is involved, objection and
       estimation of claims filed against the estate; and

    g) perform other legal services that the Debtor may request
       in connection with this case.

David Askanase, Esq., reports that his Firm received a $50,000
retainer shortly before the Company filed for bankruptcy
protection.  Mr. Askanase does not disclose the hourly rates of
professionals at his firm.

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

Headquartered in Houston, Texas, Onsite Technology --
http://www.onsite2.com/-- offers an alternative way of recycling  
waste materials.  The Company filed for chapter 11 protection on
August 10, 2004 (Bankr. S.D. Tex. Case No. 04-41399).  Anne E.
Catmull, Esq., at Hughes Watters & Askanase LLP, represents the
Debtor.  When the Debtor filed for protection, it listed above $10
million in estimated assets with more than a million in estimated
debts.


OSE USA: Appoints Edmond Tseng as Interim President
---------------------------------------------------
Steve Lerner resigned as President of OSE USA, Inc. (OTCBB:OSEE)
effective August 18.

Prior to joining OSE USA in April of 2004, Mr. Lerner was founder
and chief executive officer of Gigasys Corporation of Carlisle,
Massachusetts; he is a recognized authority in microelectronics
packaging and test foundry services with significant international
experience in both S.E. Asia and Europe. Mr. Lerner resigned to
pursue other personal interests.

Until Mr. Lerner's replacement is selected and confirmed, Chairman
of the Board of Directors Edmond Tseng will act as President of
the Company.

Founded in 1992, OSE USA has been the nation's leading onshore
advanced technology IC packaging foundry. In May 1999, Orient
Semiconductor Electronics, Ltd., one of Taiwan's top IC assembly
and packaging services companies, acquired a controlling interest,
boosting its U.S. expansion efforts. The Company discontinued
manufacturing operations in 2003 in order to concentrate on the
distribution segment of the market.

                        About OSE USA

When it comes to packaging chips, OSE USA stops just short of  
wrapping them up with a bow. OSE USA (formerly Integrated  
Packaging Assembly Corporation) receives wafers from its  
customers, cuts the wafers into individual chips, adds wire leads,  
and encases each chip in protective plastic, ready for  
installation into such products as PCs, cars, cameras, and  
telecommunications equipment. Customers include Atmel (32% of  
sales), Orbit Semiconductor, and Cirrus Logic. Taiwan-based chip  
maker Orient Semiconductor Electronics owns three-quarters of OSE  
USA.

At June 27, 2004, OSE USA's balance sheet showed a $46,151,000
stockholders' deficit, compared to a $45,211,000 deficit at
December 31, 2003.


OWENS CORNING: Asbestos Claims Estimation Hearing Begins Jan. 13
----------------------------------------------------------------
The Honorable John P. Fullam, Sr., the U.S. District Court judge
overseeing parts of Owens Corning's chapter 11 proceeding, will
hold an initial hearing on Jan. 13, 2005, to determine whether the
$16 billion value ascribed to the company's liability for
asbestos-related personal injury claims is too high, on the mark
or too low.  As previously reported in the Troubled Company
Reporter, and elsewhere, Owens Corning, with the support of its
asbestos claimant constituencies and some creditors, has proposed
a chapter 11 plan premised on a $16 billion valuation for
asbestos-related claims.  The holders of Owens Corning's bank debt
vehemently oppose that valuation.

The initial asbestos claims estimation hearing will be held on
Jan. 13, at 10:00 a.m., in Courtroom 15A at 601 Market Street in
Philadelphia.  

Judge Fullam directs that parties intending to present expert
testimony at the Jan. 13 hearing file and serve expert reports by
Oct. 15, 2004.  Depositions of any experts are to be completed by
Dec. 15, 2004.  

Judge Fullam is persuaded, at this juncture, that historical data
available from Owens Corning's and Fibreboard's asbestos claims
databases and the parties' experience in other asbestos-related
litigation and restructurings, viewed in light of the expert
testimony at the Jan. 13 hearing "should probably suffice for
Claims Estimation purposes."  If by the end of the Jan. 13 hearing
Judge Fullam thinks he needs more information, he'll ask for it at
that time.  

Headquartered in Toledo, Ohio, Owens Corning --
http://www.owenscorning.com/-- manufactures fiberglass
insulation, roofing materials, vinyl windows and siding, patio
doors, rain gutters and downspouts.  The Company filed for chapter
11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837).
Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom
represents the Debtors in their restructuring efforts.  At
June 30, 2004, the Company's balance sheet shows $7.3 billion in
assets and a $4.3 billion stockholders' deficit.  


PARKER DRILLING: $137.7 Million of 10-1/8% Notes Are Tendered
-------------------------------------------------------------
Parker Drilling Company (NYSE: PKD) announced the current status
of its cash tender offer for up to $80 million aggregate principal
amount of its $235.6 million of 10-1/8% Senior Notes due 2009
(CUSIP Nos. 701081 AK 7 and 701081 AJ 0), which is set to expire
at 5:00 p.m., New York City time, on September 2, 2004, unless
extended or earlier terminated.  

As of 5:00 p.m., New York City time, on Thursday, August 19, 2004,
approximately $137.7 million in outstanding principal amount of
the Notes had been tendered to the Company.  As previously
announced, the Company will purchase $80 million aggregate
principal amount of Notes from tendering holders on a pro rata
basis.

Lehman Brothers Inc. is acting as Dealer Manager for the tender
offer. The Tender Agent and Information Agent is D.F. King & Co.,
Inc.  Persons with questions regarding the tender offer should
contact Lehman Brothers Inc., Attention: Liability Management
Group at 800-438-3242 or 212-528-7581, and copies of the tender
offer materials may be obtained from D.F. King & Co., Inc. at 800-
859-8511 or 212-269-5550.

Parker Drilling is a global drilling company providing drilling
rigs, labor management, and rental tools to the energy industry.
Parker's primary business segment is drilling rigs with 21 in the
United States Gulf of Mexico and 44 internationally.

                           *     *     *

As reported in the Troubled Company Reporter on August 19, 2004,
Moody's assigned a B2 rating to Parker Drilling's pending $150  
million of senior unsecured floating rate 6 year notes, and  
affirmed its existing B2 senior unsecured note and B1 secured bank  
debt ratings.  Though Parker Drilling has achieved some important  
milestones, the rating outlook remains negative, pending:  

   * completion of its remaining $90 million of asset sales;  

   * commensurate debt reduction;  

   * demonstration of positive second half 2004 operating cash  
     flow momentum on improving rig utilization and rig dayrates;  
     and  

   * visibility that, once the asset sales are completed, the cash  
     generating power of the pro-forma rig portfolio adequately  
     supports the existing or higher ratings.

To achieve and sustain a stable rating outlook, Moody's would  
expect 2005 operating cash flow to amply cover interest expense,  
capital spending, and working capital needs as Parker Drilling's  
business mix evolves following its asset sales and as additional  
international business comes on line.


PENINSULA GAMING: S&P Assigns B+ Credit & Senior Debt Ratings
-------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B+' corporate
credit and senior secured debt ratings on Peninsula Gaming, LLC,
on CreditWatch with negative implications following the company's
announcement that second quarter operating performance was weaker
than expected.

Total debt outstanding as of June 30, 2004, was about
$274 million.

"The CreditWatch listing reflects our expectation that poor
operating results will result in credit measures for fiscal 2004
being materially weaker than previously anticipated," said
Standard & Poor's credit analyst Craig Parmelee.

Disappointing results stem partly from increased competition
surrounding the Diamond Jo Casino, but primarily operational
start-up issues at Old Evangeline Downs -- OED.  The company
recently announced several efforts to address many of the issues
associated with OED, such as management changes, which may lead to
improved performance over time.  However, debt leverage, as
measured by total debt to EBITDA, is expected to be above 7x at
the end of 2004, a level, which is weak for the ratings.

In resolving the CreditWatch listing, Standard & Poor's will meet
with Peninsula Gaming's management to further discuss the
operating challenges at OED and to assess prospects for improving
the performance of this property.  Standard & Poor's has
determined that if the corporate credit rating is lowered as a
result of the review, it will be limited to one notch.


PENN TRAFFIC: Files Plan to Emerge from Chapter 11 Protection
-------------------------------------------------------------
The Penn Traffic Company filed its Plan of Reorganization with the
U. S. Bankruptcy Court for the Southern District of New York late
last week.  Upon approval of the Plan by the Court, Penn Traffic
expects to emerge from chapter 11 in the fall of 2004 with
significantly reduced debt and with its core business intact,
including 109 company-operated stores, its wholesale/franchise
business and the Penny Curtiss bakery.

Penn Traffic filed for chapter 11 protection on May 30, 2003 in
order to facilitate a restructuring of its operations and debt
load. Upon consummation of the Plan of Reorganization:

   -- Penn Traffic's post-petition secured lenders will be repaid
      in full in the approximate amount of $26 million;

   -- Holders of allowed unsecured claims in the approximate
      aggregate amount of $277 million will receive their pro rata
      share of 100% of the newly issued common stock of
      reorganized Penn Traffic, subject to dilution in respect of
      new common stock that may be issued to management of
      reorganized Penn Traffic and new common stock that may be
      issued in respect of a disputed claim in the amount of $125
      million asserted by the Pension Benefit Guaranty
      Corporation;

   -- Penn Traffic's existing common stock will be cancelled; and

   -- Up to 10% of the newly issued common stock in Penn Traffic
      will be reserved for issuance pursuant to management
      incentive stock grants.

Cash requirements to satisfy the Company's obligations under the
Plan will be funded from its excess cash and borrowings under a
new secured exit financing facility to be entered into by the
Company. Prior to its chapter 11 filing, Penn Traffic had
approximately $337 million in funded debt. It is anticipated that
total debt upon the Company's expected emergence from chapter 11
in the fall of 2004 will be approximately $88 million.

The Company's filing of its Plan of Reorganization reflects the
dramatic turnaround in the Company's operating performance and
financial condition since it entered chapter 11. Key elements of
the turnaround at Penn Traffic include:

   -- The sale or closing of unprofitable and non-core operations,
      including the Big Bear supermarket chain and approximately
      37 additional supermarkets.

   -- Substantial improvements in working capital management
      through changes in operating philosophy and discipline.

   -- Implementation of operating cost reductions through overhead    
      reductions and facility consolidations.

   -- Implementation of new product, marketing and distribution
      initiatives.

   -- A greatly improved liquidity position - as of today's
      filing, Penn Traffic has paid down approximately $132
      million in secured debt, and will convert an additional $105
      million in funded debt and $172 million in unsecured claims
      to equity in reorganized Penn Traffic.

Robert Chapman, President and CEO of Penn Traffic, said: "We are
extremely proud of our achievements in restructuring Penn Traffic.
The new Penn Traffic will have a solid core of very healthy and
competitive supermarkets, and our bakery operations and wholesale/
franchise businesses remain strong. We believe the steps we have
taken to improve liquidity and operating performance, and to
dramatically reduce our debt, have put Penn Traffic on strong
footing for the future. This achievement is very much a testament
to the hard work and dedication of all of the Company's employees,
as well as the loyal support of our business partners. We are very
excited to enter this new phase in Penn Traffic's history."

Headquartered in Rye, New York, Penn Traffic Company distributes
through retail and wholesale outlets.  The Group through its
supermarkets carries on the retail and wholesale distribution of
food, franchise supermarkets and independent wholesale accounts.  
The Company filed for chapter 11 protection on May 30, 2003
(Bankr. S.D.N.Y. Case No. 03-22945).  Kelley Ann Cornish, Esq., at
Paul Weiss Rifkind Wharton & Garrison, represent the Debtors in
their restructuring efforts.  When the grocer filed for protection
from their creditors, they listed $736,532,614 in total assets and
$736,532,610 in total debts.


POLYPORE: Moody's Single-B & Junk Ratings on Review Pending IPO
---------------------------------------------------------------
Moody's Investors Service will maintain the ratings of Polypore
Incorporated on review for possible upgrade pending greater
clarity regarding the likely outcome of the company's initial
public offering, as well as receipt of financial results for the
second quarter ended approximately June 30, 2004.  Moody's
initially placed the ratings of review for possible upgrade on
June 10, 2004 in connection with the S-1 registration filing by
holding company Polypore International for up to $345 million of
gross proceeds.

These specific ratings for Polypore remain on review for possible
upgrade:

   -- B1 rating for Polypore's approximately $500 million of
      guaranteed senior secured credit facilities, consisting of:

      -- $90 million revolving credit facility due May 2010;

      -- $370 million term loan due November 2011;

      --- Euro 36 million term loan due November 2011;

   -- Caa1 rating for Polypore's $225 million guaranteed senior
      subordinated notes due May 2012;

   -- Caa1 rating for Polypore's Euro 150 million guaranteed       
      senior subordinated notes due May 2012;

   -- B2 senior implied rating;

   -- Caa1 senior unsecured issuer rating.

Polypore reported on August 12, 2004, that the IPO was postponed
because of adverse market conditions, which developed during
August, presumably due to the high volume of deals in the market,
summer vacation schedules, and current geopolitical unrest.  
Polypore's decision to postpone its IPO is consistent with actions
taken by a series of other companies following the disappointing
pricing garnered by several recent transactions.

A few days following Polypore's postponement of the IPO, the
company also announced that it is extending its offer to Purchase
up to $65 million in aggregate principal amount of its outstanding
8-3/4% senior subordinated dollar notes due 2012 and up to
Euro 44 million in aggregate principal amount of its outstanding
8-3/4% senior subordinated Euro notes due 2012 until
September 30, 2004, which is 30 days following the original
August 31, 2004 tender maturity date.  Polypore is not precluded
from further extending or otherwise amending the terms of the
tender offer.  Polypore's obligation to accept validly tendered
notes is conditioned upon the satisfaction of certain conditions,
including the consummation of the initial public offering of
common stock by Polypore International, Inc.  Polypore has not
established a minimum principal amount of notes that must be
tendered.

Moody's expects to resolve the review action by early October
2004.  The final outcome of the review will be dependent upon
whether the IPO does actually transpire, the size and pricing of
the final offering terms, the ultimate application of proceeds,
and an update regarding the company's recent performance trends
and future prospects.  Moody's expects that the maximum upwards
rating potential is one notch due to the expectations that
Polypore will use approximately $150 million of the IPO proceeds
to redeem holding company preferred stock held by affiliates of
equity sponsor Warburg Pincus.  In the event that debt reduction
associated with the IPO is downsized materially or that the IPO
does not ultimately transpire, Moody's will evaluate whether
recent performance trends warrant maintaining a stable rating
outlook or improving the rating outlook to positive.

Polypore, headquartered in Charlotte, North Carolina, is a leading
worldwide developer, manufacturer and marketer of specialized
polymer-based membranes used in separation and filtration
processes.  The company is managed under two business segments.  
The energy storage segment, which currently represents
approximately two-thirds of total revenues, produces separators
for lead-acid and lithium batteries.  The separations media
segment, which currently represents approximately one-third of
total revenues, produces membranes used in various healthcare and
industrial applications.  For the LTM period ended April 3, 2004,
Polypore's revenues approximated $479 million.


PRESTIGE BRANDS: Reports First Quarter FY 2005 Results
------------------------------------------------------
Prestige Brands, Inc. reported results for its quarter ended June
30, 2004. On February 6, 2004, Prestige Brands International, LLC
acquired all of the outstanding capital stock of Medtech Holdings,
Inc. and The Denorex Company. On March 5, 2004, the Company
acquired all of the outstanding capital stock of the Spic and Span
Company. On April 6, 2004, the Company acquired all of the
outstanding capital stock of Bonita Bay Holdings, Inc. Results
herein include the results of Medtech, Denorex, Spic and Span and
Bonita Bay for the quarter ended June 30, 2004. Pro forma results
for the quarter ended June 30, 2003 reflect the operations of
Medtech, Denorex, Spic and Span and Bonita Bay.

Prestige Brands Quarterly Report for the Three Months Ended
June 30, 2004 can be accessed at the Company's web site at
http://www.prestigebrandsinc.com/and clicking on the investor  
relations section.

                          Actual Results

Net sales increased by $48.4 million from $19.4 million for the
quarter ended June 30, 2003 to $67.8 million for the quarter ended
June 30, 2004. Operating income for the quarter ended June 30,
2004 was $10.7 million, $6.3 million greater than operating income
of $4.4 million for the quarter ended June 30, 2003. Net loss was
$5.1 million for the quarter ended June 30, 2004 compared to net
income of $1.4 million for the quarter ended June 30, 2003.

                        Pro Forma Results

Net sales for the quarter ended June 30, 2004 of $67.8 million
improved by 7.2 % over pro forma net sales of $63.2 million for
the quarter ended June 30, 2003. Contribution margin for the
quarter ended June 30, 2004 of $17.9 million was lower than the
pro forma contribution margin of $22.1 million for the quarter
ended June 30, 2003 primarily due to a $5.2 million charge related
to the amortization of a step-up in inventory related to the
acquisitions referenced above. Earnings before interest, taxes,
depreciation, amortization and certain other non-recurring items
(EBITDA) was $18.2 million for the quarter ended June 30, 2004, a
3.3% increase over pro forma EBITDA of $17.6 million for the
quarter ended June 30, 2003.

                        Segment Results

The Company has three operating segments. The Over-the-Counter
Segment generated $34.6 million of net sales and $11.9 million
contribution margin in the quarter ended June 30, 2004 compared to
pro forma net sales of $29.8 million and contribution margin of
$12.3 million in the quarter ended June 30, 2003.

The Household Products Segment generated $24.7 million of net
sales and $4.6 million of contribution margin in the quarter ended
June 30, 2004. The Household Products Segment pro forma net sales
and contribution margin was $23.4 million and $6.8 million,
respectively, for the quarter ended June 30, 2004.

The Personal Care Segment generated $8.4 million of net sales and
$1.4 million of contribution margin in the quarter ended June 30,
2004 compared to pro forma net sales of $10.0 million and
contribution margin of $2.9 million in the quarter ended June 30,
2003.

                    Integration Activities

During the quarter, the Company successfully implemented the
integration plans put in place at the time of the Bonita Bay
acquisition. The consolidation of the three operating companies is
now substantially complete. Among the actions completed are the
following:

The staffs of the companies are now fully merged in our Irvington,
New York and Jackson, Wyoming offices. Planned head count
reductions are completed. We consolidated all of our warehousing
and logistics functions from three facilities to one facility
effective June 1. All customer orders and invoicing are flowing
through our Jackson, Wyoming ordering processing/customer service
organization. We eliminated duplicate advertising agencies, media
buying agencies, coupon clearing companies and sales brokers.

In announcing the Company's results today, CEO Peter Mann said,
"We are happy to report that our first quarter results show strong
year-on-year growth. Within this excellent overall performance,
Compound W and, in particular the new Compound W Freeze Off
product, Clear Eyes, Spic & Span, Murine and New Skin delivered
particularly robust growth. The consolidation of the former
Prestige, Medtech and Spic & Span companies has gone very much
according to plan and we are now enjoying the financial and
operating synergies that we were expecting when we completed the
acquisitions."

                           About GTCR

Founded in 1980, GTCR Golder Rauner, LLC is a leading private
equity investment firm and long term strategic partner for
outstanding management teams. GTCR currently manages more than
$6.0 billion in equity and mezzanine capital invested in a wide
range of companies and industries. For more information, please
see http://www.gtcr.com/

                         About Prestige

Prestige Brands is a leading branded consumer products company
with a diversified portfolio of well recognized brands in the
over-the-counter drug, household cleaning and personal care
categories. Our major brands include the following: Comet (R),
Chloraseptic (R), Compound W (R), New Skin (R), Clear Eyes (R),
Murine (R), Spic and Span (R), Cutex (R) and Denorex(R). Prestige
Brands is controlled by affiliates of GTCR Golder Rauner, LLC.

Prestige Brands' headquarters are located at 90 North Broadway,
Irvington, New York 10533. Further information can be found on the
Company's web site: http://www.prestigebrandsinc.com/

                           *   *   *

As reported in the Troubled Company Reporter on July 30, 2004,
Standard & Poor's Ratings Services placed its 'B' corporate credit  
rating on Prestige Brands Inc. on CreditWatch with negative  
implications, as well as the company's 'B' senior secured debt  
rating and its 'CCC+' senior subordinated debt rating.  


PRIME HOSPITALITY: S&P Puts Low-B Ratings on CreditWatch Negative
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB-' corporate
credit and 'B' subordinated debt ratings on Prime Hospitality,
Corp., on CreditWatch with negative implications.

Fairfield, New Jersey-based hotel operator had about $223 million
of debt outstanding at the end of June 2004.

"The CreditWatch listing reflects the planned acquisition of Prime
by affiliates of The Blackstone Group for $12.25 per share, or a
total value of more than $790 million including debt," said
Standard & Poor's credit analyst Sherry Cai.  The transaction is
expected to close in the fourth quarter of 2004, subject to
shareholder approval and other customary conditions.  

Blackstone is expected to convert 37 of Prime's owned Wellesley
Inn & Suites to one of its extended stay brands.  Earlier this
year, Blackstone completed the acquisition of Extended Stay
America for $3.1 billion.

Blackstone plans to finance the transaction with an approximately
$680 million mortgage debt and $172 million equity.  Prime expects
to tender for the outstanding subordinated debt issues of about
$178 million.

"We expect to withdraw our ratings on Prime after the completion
of the tender offer for the outstanding subordinated debt," added
Ms. Cai.


PROTECTION ONE: Extends Standstill Pact with Quadrangle Master
--------------------------------------------------------------
On June 28, 2004, Protection One, Inc. reached an agreement to
further extend the standstill agreements among the Company,
Protection One Alarm Monitoring, Inc., Network Multi-Family
Security Corporation, POI Acquisition, L.L.C., POI Acquisition I,
Inc. and Quadrangle Master Funding Ltd.  

The terms of the new extensions require the applicable Quadrangle
Group LLC affiliate(s), under certain conditions, to continue to
forbear until July 6, 2004 from:

    (i) exercising any rights and taking any enforcement and
        collection actions as a result of the occurrence of
        specified defaults under the revolving credit facility and
   (ii) exercising any rights to which such affiliate is entitled
        as a result of its equity ownership in the Company.

Thereafter, the term of the standstill agreements shall be
automatically extended for three consecutive one week periods
unless the Quadrangle Group LLC affiliate(s) deliver a written
notice to the Company.

The Company intends to defer:

    (i) payment of the semi-annual interest payment due June
        30, 2004 on its outstanding $29.9 million aggregate
        principal amount of its 135/8% senior subordinated
        discount notes due 2005 and

   (ii) the quarterly interest payment due on its $215.5
        million principal amount revolving credit facility with
        affiliates of Quadrangle Group.

                        About the Company

Protection One is a leading provider of property monitoring
services, providing monitoring and maintenance of alarm systems to
approximately 1 million customers. As of December 2003, Protection
One had approximately $561 million of operating lease-adjusted
debt.

                          *     *     *

As reported in the Troubled Company Reporter on April 13, 2004,
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured ratings on Topeka, Kansas-based Protection
One Alarm Monitoring Inc. to 'CC' from 'CCC-' and affirmed its 'C'
subordinated debt rating. The outlook is negative.

The ratings were removed from CreditWatch, where they were placed
on Jan. 15, 2003, following concerns associated with Westar Energy
Inc.'s (BB+/Positive/--) intention to sell its 88% interest in
Protection One. On Feb. 17, 2004, Westar sold approximately 87% of
the issued and outstanding shares of Protection One to affiliates
of Quadrangle Group LLC for approximately $122 million.

"The ratings downgrade reflects the company's projected
insufficient liquidity and cash flows relative to its debt burden,
combined with the loss of Westar as a source of external capital,
the near-term expiration of its standstill agreement with
Quadrangle, and covenant breaches associated with change in
control provisions under Protection One's note issues," said
Standard & Poor's credit analyst Ben Bubeck. The company is
in negotiations with creditors and bondholders regarding a debt
restructuring. The outlook is negative.

In its recently filed 10-K, Protection One indicated that it has
begun preliminary discussions regarding a proposed restructuring
with Quadrangle, which was assigned the rights and obligations as
lender under Protection One's $216 million revolving credit
facility, and certain holders of Protection One's public debt. In
the near term, Protection One faces an expiration of its
standstill agreement with Quadrangle and a potential default on
its subordinated notes if covenant breaches resulting from a
change in control clause are not addressed. Standard & Poor's will
continue to monitor the status of Protection One's negotiations
with Quadrangle and holders of its public debt. If creditors
negotiate an exchange at less than full value, it will be viewed
as tantamount to a default.


SIRIUS SATELLITE: Extends Rights Agreement with Bank of New York
----------------------------------------------------------------
Sirius Satellite Radio's Board of Directors has extended the
expiration date of the rights issued under the Rights Agreement
between The Bank of New York and the Company from July 1, 2004 to
January 15, 2005.

                         About SIRIUS  
  
SIRIUS -- http://www.SIRIUS.com/-- is the only satellite radio   
service bringing listeners more than 100 streams of the best music  
and entertainment coast-to-coast.  SIRIUS offers 61 music streams  
with no commercials, along with over 40 world-class sports, news  
and entertainment streams for a monthly subscription fee of only  
$12.95, with greater savings for upfront payments of multiple  
months or a year or more.  SIRIUS is also the official satellite  
radio partner of the NFL.  Stream Jockeys create and deliver  
uncompromised music in virtually every genre to our listeners 24  
hours a day.  Satellite radio products bringing SIRIUS to  
listeners in the car, truck, home, RV and boat are manufactured by  
Kenwood, Panasonic, Clarion and Audiovox, and are available at  
major retailers including RadioShack, Circuit City, Best Buy, Car  
Toys, Good Guys, Tweeter, Ultimate Electronics, Sears and  
Crutchfield.  SIRIUS is the leading OEM satellite radio provider,  
with exclusive partnerships with DaimlerChrysler, Ford and BMW.  
Automotive brands currently offering SIRIUS radios in select new  
car models include BMW, MINI, Chrysler, Dodge, Jeep(R), Nissan,  
Infiniti, Mazda, Audi, Ford and Lincoln-Mercury.  Automotive  
brands that have announced plans to offer SIRIUS in select models  
include Mercedes-Benz, Jaguar, Volvo, Volkswagen, Land Rover and  
Aston Martin.  Genmar Holdings, the world's largest manufacturer  
of recreational boats, Formula Boats and Winnebago, the leading  
supplier of recreational vehicles and motor homes, also offer  
SIRIUS.  Hertz currently offers SIRIUS in 29 vehicle models at 53  
major locations around the country.  
  
                         *   *   *  
  
As previously reported, Standard & Poor's Ratings Services  
assigned its 'CCC-' rating to Sirius Satellite Radio Inc.'s new  
$250 million convertible notes due 2009.  
  
At the same time, Standard & Poor's affirmed its existing ratings,  
including its 'CCC' corporate credit rating, on the satellite  
radio broadcaster. The outlook is stable. The New York, New York-  
based firm has approximately about $450 million in debt.  
  
"The company is expected to use the proceeds for general corporate  
purposes, including expanding distribution and product  
development," according to Standard & Poor's credit analyst Steve  
Wilkinson. He noted, "The added liquidity is important to ratings  
stability given the considerable cash being consumed as Sirius  
works to accelerate subscriber growth."


SIGHT RESOURCE: Gets Nod to Use CadleRock's Cash Collateral
-----------------------------------------------------------
The Honorable Judge Jeffery P. Hopkins gave his stamp of approval
to Sight Resource Corporation and its debtor-affiliates' request
for authority to use cash collateral to finance their ongoing
postpetition business operations.

Fleet National Bank entered into several loan agreements and
arrangements with the Debtors before the Petition Date.

Under the terms of the Loan Documents, the Debtors granted Fleet
-- now CadleRock Joint Venture, L.P., as successor-in-interest to
Fleet -- as security for their obligations under the Loan
Agreements, security interests in and liens on all personal
property, including, without limitation, the Debtors' inventory,
accounts and accounts receivable, documents, instruments, chattel
paper, general intangibles, investment property and goods, and all
the proceeds and products.

As of the Petition Date, the outstanding principal balance due
CadleRock is $508,945 plus $389 in accrued but unpaid interest.
The Debtors estimate that as of the Petition Date, the value of
the tangible assets that secure the indebtedness is $5,400,000.

Judge Hopkins determines that the Debtors do not have sufficient
available sources of working capital and financing to operate
their businesses and require the immediate use of the Cash
Collateral.  

The Debtors need the Cash Collateral to:

      (i) fund their payroll expenses,
   
     (ii) maintain the supply of vendors' goods and services,
          and

    (iii) pay their post-petition rent under the real property
          leases for those retail locations which the Debtors
          intend to keep open.

The Debtors' need to use Cash Collateral is immediate and is
necessary to prevent severe and irreparable harm to them and the
bankruptcy estates.

To provide CadleRock with adequate protection for any diminution
in the value of its interests in the Cash Collateral, the Debtors
grant CadleRock automatically perfected postpetition replacement
security interests and liens in their postpetition assets, with
the same prepetition validity and priority.

Headquartered in Cincinnati, Ohio, Sight Resource Corporation --
http://www.sightresource.com/-- manufactures, distributes and  
sells eyewear and related products and services through retail eye
care centers.  The Company filed for protection on June 24, 2004
(Bankr. S.D. Ohio Case No. 04-14987).  Jennifer L. Maffett, Esq.,
and Louis F. Solimine, Esq., at Thompson Hine LLP, represent Sight
Resource and its debtor-affiliates in their restructuring efforts.  
When the Debtors filed for protection, they listed $5,400,000 in
total assets and $12,500,000 in total debts.


SK GLOBAL: Gets Court Nod to Settle with John Roberts for $950K
---------------------------------------------------------------
U.S. Bankruptcy Court for the Southern District of New York
permits SK Global America, Inc., to settle with John Roberts, Inc.

As reported in the Troubled Company Reporter on July 23, 2004,
before its bankruptcy petition date, SK Global America commenced
an action against John Roberts, in the Supreme Court of the State
of New York, County of New York, in which the Debtor asserted two
separate causes of action based on:

    (a) payments made by Roberts to Blue Apparel, which violated
        the Debtor's security interests in Roberts' accounts
        receivable -- the First Claim; and

    (b) Roberts' receipt of certain goods from Blue Apparel, which
        constituted a conversion of those goods from the Debtor --
        the Second Claim.

The Debtor sought to recover $615,040 in damages on the First
Claim and $484,109 on the Second Claim.

On June 12, 2003, the Supreme Court entered a summary judgment in
favor of the Debtor in connection with the First Claim.  The
ruling was subsequently affirmed on appeal.  Roberts sought to
reargue the appeal, while simultaneously appealing the Summary
Judgment to the New York Court of Appeals.

Subsequent to the Petition Date, the Debtor filed a motion seeking
summary judgment on the Second Claim.  That motion was denied in
January 2004.

In face of this contentious litigation, and as a result of
extensive, arm's-length, and good faith negotiations, as well as
an exchange of documentation, the parties decided to resolve their
issues consensually, without further litigation.  The Debtor and
Roberts agreed to settle the Action pursuant to a settlement
agreement.

The salient terms of the Settlement Agreement are:

    (a) Roberts will deliver to the Debtor's counsel, Bingham
        McCutchen, LLP, $950,000, by certified check, bank check,
        or wire transfer made payable to Bingham McCutchen to be
        held by it in escrow pending Court approval of these
        provisions.  The Debtor will cause Bingham McCutchen to
        provide written notice to Roberts' counsel via telecopier
        within three business days of Court approval.  Upon
        receipt of the Court Approval Notice, Bingham McCutchen
        will release the Settlement Amount to the Debtor;

    (b) Each Party will deliver to counsel for the other executed
        General Releases, which will be held in escrow pending
        Court approval; and

    (c) The Debtor will cause its counsel to execute and deliver
        to Roberts' counsel a Stipulation of Discontinuance with
        prejudice, which Roberts' counsel will hold in escrow
        pending receipt of the Court Approval Notice, after which
        time Roberts will cause its counsel to file the
        Stipulation.

Scott E. Ratner, Esq., at Togut, Segal & Segal, LLP, in New York,
contends that in the event the disputes are not resolved through
the proposed Settlement Agreement, continued litigation is likely
to result in additional, unnecessary expense for the Debtor.

Mr. Ratner submits that the settlement and compromise between the
parties is appropriate and highly favorable to the Debtor, and
should be approved.

Headquartered in Fort Lee, New Jersey, SK Global America,
Inc., is a subsidiary of SK Global Co., Ltd., one of the world's
leading trading companies.  The Debtors file for chapter 11
protection on July 21, 2003 (Bankr. S.D.N.Y. Case No. 03-14625).  
Albert Togut, Esq., and Scott E. Ratner, Esq., at Togut, Segal &
Segal, LLP, represent the Debtors in their restructuring efforts.  
When they filed for bankruptcy, the Debtors reported
$3,268,611,000 in assets and $3,167,800,000 of liabilities.
(SK Global Bankruptcy News, Issue Nos. 20 and 21; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


SOLUTIA INC: Equity Committee Wants to Examine Debtors
------------------------------------------------------
The Official Committee of Equity Security Holders of the
chapter 11 cases of Solutia, Inc., and its debtor-affiliates has
informally attempted to obtain from the Debtors information needed
to analyze the contingent legacy liabilities disclosed in the
Debtors' petition, as well as the value of the Debtors' business
going forward.  However, every informal attempt has been rejected.  
This leaves the Equity Committee with no choice but to obtain the
information through the implementation of Rule 2004 of the Federal
Rules of Bankruptcy Procedure.

According to Craig A. Barbarosh, Esq., at Pillsbury Winthrop, LLP,
in New York, the Debtors' unwillingness to provide the requested
documents is wholly unwarranted.  The Equity Committee initially
attempted to gather material necessary to perform its
responsibilities by analyzing the available public information
regarding the Debtors.  However, that information was inadequate
and incomplete for purposes of understanding the Debtors'
continuing exposure to Legacy Liabilities, the issues and
circumstances surrounding the Spin-Off, and the value of the
Debtors' operations on a forward-looking basis.

Mr. Barbarosh clarifies that the Equity Committee does not seek to
burden the Debtors by its requests for discovery.  Rather, the
Equity Committee merely seeks to answer questions, the resolution
of which is likely to be of paramount importance to the
administration and potential reorganization of the Debtors'
estates.

Accordingly, pursuant to Bankruptcy Rule 2004, the Equity
Committee asks the U.S. Bankruptcy Court for the Southern District
of New York to compel Solutia to produce responsive documents and
to appear for oral examination through one or more of its
authorized representatives.

Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a  
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications.  The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949).  When the Debtors filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts. (Solutia Bankruptcy News,
Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000)


SOUTHWALL TECH: Appoints Maury Austin as Permanent SVP & CFO
------------------------------------------------------------
Southwall Technologies Inc. (OTCBB:SWTX), a global developer,
manufacturer and marketer of thin-film coatings for the electronic
display, automotive glass and architectural markets, has appointed
Maury Austin as permanent Senior Vice President and Chief
Financial Officer, effective immediately. Mr. Austin has been
performing the duties of interim Chief Financial Officer since
February 2004.

A 24-year veteran of Silicon Valley Technology companies, Mr.
Austin most recently served as Chief Financial Officer of Vicinity
Corporation from 2000 until its acquisition by Microsoft in 2003.
Austin also served as Chief Financial Officer of Symmetricom from
1999 to 2000 and was Chief Financial Officer and Chief Operating
Officer of Flashpoint Technologies prior to that. He held a
variety of senior positions at Apple Computer between 1988 and
1997, including the post of Vice President and General Manager of
the Imaging Division. Mr. Austin has an undergraduate degree in
Business from the University of California at Berkeley along with
a Masters in Business administration from Santa Clara University.

"Maury has done a great job in the last six months in helping
Southwall return to profitability. We are very pleased to have
Maury permanently join us," said Thomas G. Hood, Southwall's
President and Chief Executive Officer.

                About Southwall Technologies Inc.

Southwall Technologies Inc. designs and produces thin film
products that selectively absorb, reflect or transmit light.
Southwall products are used in a number of automotive, electronic
display and architectural glass products to enhance optical and
thermal performance characteristics, improve user comfort and
reduce energy costs. Southwall is an ISO 9001:2000-certified
manufacturer and sells advanced thin film coatings to over 25
countries around the world. Southwall's customers include Audi,
BMW, DaimlerChrysler, Hewlett-Packard, Mitsubishi Electric, Mitsui
Chemicals, Peugeot-Citroen, Philips, Pilkington, Renault, Saint-
Gobain Sekurit, and Volvo.

At June 27, 2004, Southwall Technologies Inc.'s balance sheet
showed a $5,378,000 stockholders' deficit, compared to a
$1,721,000 in positive equity at December 31, 2003.


STRUCTURED ASSET: Fitch Junks 2 Classes & Rates Another 2 Low-B
---------------------------------------------------------------
Fitch Ratings downgrades 3 and affirms 7 classes of Structured
Asset Securities Corp. residential mortgage-backed certificates,
as follows:

   Structured Asset Securities Corp., Mortgage Pass-Through    
   Certificates, Series 2000-3

      -- Class A affirmed at 'AAA';

      -- Class B-1 affirmed at 'AAA';

      -- Classes B-2 and BX affirmed at 'A';

      -- Class B-3 downgraded to 'B' from 'BB' and removed from    
         Rating Watch Negative;

      -- Class B-4 remains at 'C'.

   Structured Asset Securities Corp., Mortgage Pass-Through
   Certificates, Series 2001-9

      -- Class A affirmed at 'AAA';

      -- Class B-1 affirmed at 'AA';

      -- Class B-2 affirmed at 'A';

      -- Class B-3 downgraded to 'BB' from 'BBB' and removed from
         Rating Watch Negative;

      -- Class B-4 downgraded to 'C' from 'CCC'.

SASCO 2000-3 consists of four mortgage groups.  Within these four
groups are component classes B1 through B6.  Each group of
components is backed by a separate mortgage group.  Each mortgage
group provides for its respective level of credit enhancement and
the groups are not crossed collateralized.  Because the components
are not severable and each component shares solely in its
affiliated group's performance, each rated class reflects the
performance of the weakest component outstanding.

The downgrade of SASCO 2000-3 class B-3 and SASCO 2001-9 classes
B-3 and B-4 are taken due to the level of losses incurred, future
loss expectations and the high delinquencies in relation to the
applicable credit support levels as of the July 2004 distribution
date.

The affirmations reflect credit enhancement consistent with future
loss expectations.


SUPERIOR GALLERIES: Retains CCG for Investor Relations Program
--------------------------------------------------------------
Superior Galleries, Inc. (OTCBB:SPGR) has retained CCG Investor
Relations and Strategic Communications to implement and manage its
investor relations program.

CCG Partner Sean Collins commented, "We welcome the opportunity to
enhance the market recognition of Superior Galleries, given its
distinctive investment appeals, its recent achievement of record
financial results and the eminence of its management in the
trading of rare coins and other fine collectibles. It isn't often
that you get to work with a company whose CEO was instrumental in
creating the basic standards that are used throughout the
industry, as Silvano DiGenova did in pioneering the design of the
rare-coin grading set and co-founding what is today the premier
electronic trading network in the industry, the Certified Coin
Exchange."

Silvano DiGenova, CEO of Superior, commented, "CCG's depth and
breadth of services set it apart in our search for an investor
relations counselor and public relations resource. We believe that
with CCG's help, we can provide investors with the proper context
to better appreciate Superior's financial and operational
achievements. In our business, unrecognized or under-recognized
value is the key to opportunity, and we believe that by working
with CCG, we can help the investing public realize the under-
recognized value of our industry-leading company."

                           About CCG

CCG provides investor relations and strategic communications for
over 30 publicly traded and private companies throughout the
country. The full-service corporate communications agency has
expertise in representing companies in the financial, retailing,
Internet, semiconductor, medical device and biotech sectors and
maintains its corporate headquarters in Sherman Oaks (Los
Angeles). For further information, contact CCG directly, or visit
its Web site at http://www.ccgir.com/  

                   About Superior Galleries

Superior Galleries, Inc. is a publicly traded company, acting as a
dealer and auctioneer in rare coins and other fine collectibles.
The firm markets its products through its prestigious location in
Beverly Hills, California and the company's web site at sgbh.com

At June 30, 2004, Superior Galleries, Inc.'s balance sheet showed
a $1,083,417 stockholders' deficit, compared to a $1,572,090
deficit at June 30, 2003.


SURFSIDE RESORTS: Asks Court to Dismiss Chapter 11 Case
-------------------------------------------------------
Surfside Resorts and Suites, Inc., asks the U.S. Bankruptcy Court
for the Middle District of Florida, Jacksonville Division, to
dismiss its chapter 11 case.  The Debtor tells the Court that
there is a very slim chance for it to propose or effectuate a plan
of reorganization.

The Debtor reports that Bray & Gillespie IX, LLC, a secured
creditor, asked the Court to prohibit the Debtor to use cash
collateral.  Bray & Gillespie is secured by a first mortgage on
Debtor's ocean front hotel property and the income and revenues
from the hotel's operations.  The Debtor currently owes $8 million
to Bray & Gillespie.

Bray & Gillespie and the Debtor entered into a Stipulation
allowing limited use of cash collateral.  In that stipulation, the
Debtor consents to relief from the automatic stay to permit
Bray & Gillespie to proceed to foreclose on the Company's property
after September 8, 2004.

The Debtor tells the Court that it has been diligently searching
for financing to satisfy its indebtedness to Bray & Gillespie and
raise additional funds to convert its present hotel condition into
a time-share facility.  That hasn't happened.  In the alternative,
the Debtor could sell the real property and the hotel's ongoing
operations.  The Company estimates that the value of its
oceanfront real property is $15,000,000.  No buyer has surfaced.  

In the event that the Debtor is unable to obtain refinancing or a
sale of the property, and the foreclosure by Bray & Gillespie is
concluded, there would be few assets or cash from which unsecured
creditors could be paid.

If the case is converted to Chapter 7, there are no unencumbered
assets available to be liquidated by a trustee which would result
in any distribution to unsecured creditors because all real
property, cash and cash collateral, personal property and
furnishings are pledged as collateral to either Bray & Gillespie
or other secured creditors.

Headquartered in Ormond Beach, Florida, Surfside Resort and
Suites, Inc., operates vacation resort, restaurant and lounge.  
The Company filed for chapter 11 protection on June 9, 2004
(Bankr. M.D. Fla. Case No. 04-05948).  Walter J. Snell, Esq.,
represent the Debtor in its restructuring efforts.  When the
Company filed for protection from its creditors, it listed
$19,598,145 in total assets and $9,289,843 in total debts.


TANGO INC: Begins Discussions With Potential Acquisition Targets
----------------------------------------------------------------
Tango Incorporated (OTCBB:TNGO) will begin engaging in discussions
with potential acquisition targets. The Company has identified
potential targets that would complement its existing facility in
Portland.

According to Todd Violette, Chairman & COO of Tango, "Now that our
shareholders have approved the Resolution allowing us to structure
Tango as a Business Development Corporation, we expect to pursue
the mandate that management has been given and look to acquire a
strong cash flowing business before the end of this calendar year.
By pursuing this plan, and with the potential targets we have in
mind, we are looking to add an additional $5 million to $10
million in revenue. The margins from these businesses could
significantly add to shareholder value."

                           About Tango

Tango Incorporated is a leading garment manufacturing and
distribution company, with a goal of becoming a dominant leader in
the industry. Tango pursues opportunities, both domestically and
internationally. Tango provides major branded apparel the ability
to produce the highest quality merchandise, while protecting the
integrity of their brand. Tango serves as a trusted ally,
providing them with quality production and on-time delivery, with
maximum efficiency and reliability. Tango becomes a business
partner by providing economic solutions for development of their
brand. Tango provides a work environment that is rewarding to its
employees and at the same time has an aggressive plan for growth.
Tango is currently producing for many major brands, including
Nike, Nike Jordan and RocaWear.

                            *   *   *

                      Auditors Express Doubt

In its Form 10-QSB for the quarterly period ended April 30, 2004,  
filed with the Securities and Exchange Commission, Tango  
Incorporated reports:

"As of April 31, 2003 and 2004, our auditors indicated in their  
audit report that our net loss and working capital deficit raised  
substantial doubt that we would be able to continue as a going  
concern."


UNITED AIR: Workers Urge Court to Appoint a Chapter 11 Trustee
--------------------------------------------------------------
Pursuant to Section 1104(a) of the Bankruptcy Code, the
International Association of Machinists and Aerospace Workers asks
Judge Wedoff of the U.S. Bankruptcy Court for the Northern
District of Illinois to appoint a Chapter 11 trustee of the cases
of United Airlines, Inc., and its debtor-affiliates.

"The actions taken by the Debtors' management constitute gross
mismanagement of the Debtors and a breach of management's
fiduciary duties to the estates and creditors, and warrant the
immediate appointment of a Chapter 11 trustee," Sharon L. Levine,
Esq., at Lowenstein Sandler, in Roseland, New Jersey, says.

In 2001, when it first became apparent that the Debtors' Pension
Plans were at risk, the IAM offered the airline to participate in
the IAM's National Pension Plan.  The NPP is a multi-employer
pension plan, jointly trusteed by the IAM and contributing
employers, with more than $6,000,000,000 in assets.  The Debtors
refused and elected a volatile pension benefit, more easily funded
in an environment of rising stock prices and higher interest
rates, but burdensome in a cyclical economic downturn.  Then the
well-documented fiascoes in the Section 1113 and 1114 process
ensued.  During this time, the unions negotiated in good faith
with the Debtors, despite their suspicions about the veracity of
management.  Then, the Air Transportation Stabilization Board
rejected the Debtors' request for a loan guarantee.  Without
warning, the Debtors publicly announced their decision to withhold
the July 15, 2004 Pension Plan contribution.  Later, the Debtors
announced in open court that they would not fund further pension
payments during the Chapter 11 cases.

Throughout this process, the unions have not had a voice.  The
Debtors excluded the IAM and other unions from discussions during
this entire process.  If included, the unions would have
introduced less drastic alternatives.  It appears that the Debtors
intend to terminate their Pension Plans or force the Pension
Benefit Guaranty Corporation to terminate the underfunded Plans,
shifting a portion of the funding burden to the government through
the PBGC.  The unions trusted the Debtors' management to do the
right thing before; they should not do so again without a Chapter
11 trustee.

Ms. Levine argues that it is inappropriate to devise a business
plan and obtain DIP Financing based on projections that fail to
include a necessary operating expense in the form of Pension Plan
contributions.  After all, the Debtors would not submit a business
plan that excludes taxes, landing fees, rent, utilities or other
operational expenses.  "This irresponsible business plan
disproportionately requires that employees [bear] the risk and
burden of the Debtors' restructuring," Ms. Levine states.

The Debtors' conduct has damaged the estates and their creditors,
specifically the employees eligible to receive pension benefits.  
The underfunded pensions will produce massive administrative
expense liabilities, which could render the estate
administratively insolvent.  Cherry picking operational expenses
is a violation of the Bankruptcy Code and a breach of the Debtors'
fiduciary duty.  In addition, entering the DIP Facility with the
determination not to make further pension contributions was a
breach of the Debtors' fiduciary duties.  Also, the Debtors have
yet to formulate a viable business plan deemed credible by the
capital markets.  These transgressions mandate an immediate need
for a Chapter 11 trustee.

Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the  
holding company for United Airlines -- the world's second largest
air carrier.  The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis represent the
Debtors in their restructuring efforts.  When the Company filed
for protection from their creditors, they listed $24,190,000,000
in assets and  $22,787,000,000 in debts. (United Airlines
Bankruptcy News, Issue No. 57; Bankruptcy Creditors' Service,
Inc., 215/945-7000)   


US AIRWAYS: Bank of New York Holds an Allowed $192MM Secured Claim
------------------------------------------------------------------
The Bank of New York, as Trustee under a Trust Indenture dated
June 1, 1990, between the Port Authority of New York and New
Jersey and the Trustee, filed Claim No. 2839, asserting a claim
for $192,652,472 against US Airways, Inc.  Pursuant to the
Confirmation Order, The Bank of New York retains liens on its
collateral and has an Allowed Class USAI-1 Secured Claim based on
Claim No. 2839.

In accordance with the order of the U.S. Bankruptcy Court for the
Eastern District of Virginia confirming the Chapter 11 Plan, US
Airways assumed all of its obligations under the documents and
cured all existing defaults on the Effective Date, except those
specified in Section 365(b)(2) of the Bankruptcy Code.

US Airways objected to Claim No. 2839 on the ground that it was
unsubstantiated.  On May 10, 2004, The Bank of New York filed a
response.

To settle the dispute, the Reorganized Debtors and The Bank of New
York agree to allow Claim No. 2839 as a Class USAI-1 Secured Claim
pursuant to the Confirmation Order, with no effect on The Bank of
New York's rights.  The Bank of New York is not entitled to a
distribution on account of Claim No. 2839.  All other claims by
The Bank of New York against US Airways are withdrawn.  (US
Airways Bankruptcy News, Issue No. 60; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


W.R. GRACE: Directors Face Class Action Lawsuit Over 401(k) Plan
----------------------------------------------------------------
On June 17, 2004, a purported class action lawsuit was filed in
the United States District Court for the District of Massachusetts
against W.R. Grace & Co.'s directors and certain current and
former officers.  The Complaint was brought on behalf of persons
who were participants in, or beneficiaries of, Grace's savings and
investment plan, which is a defined contribution retirement plan
under Section 401(k) of the Internal Revenue Code, at any time
between July 1, 1999 and February 27, 2004.

The Class Action was also brought against certain of Grace's
benefits administration and investment committees, Fidelity
Management Trust Company, State Street Bank & Trust Company, and
other "unknown fiduciary defendants."

One of the investment options under the S&I Plan was Grace common
stock.  The Retirement Plan Investors assert that the decline in
the price of Grace common stock during the Class Period resulted
in significant losses to S&I Plan participants.  The Investors
alleges that the Grace Defendants were fiduciaries of the S&I Plan
under the Employee Retirement Income Security Act of 1974 and that
they breached their fiduciary duties under ERISA by failing to
sell or take other appropriate action with regard to Grace common
stock held by the S&I Plan during the Class Period.  The Grace
Defendants should have known that the stock had become an
imprudent investment, principally as a result of the risk related
to Grace's asbestos-related liabilities.  The Grace Defendants
failed to disclose to the S&I Plan participants the risk of
investing in Grace common stock.

The Investors ask the Massachusetts District Court to award
monetary payment to the S&I Plan to compensate for losses
resulting from the Grace Defendants' breaches of fiduciary duties.  
The Investors also ask the District Court for injunctive
protection.

In a regulatory filing with the Securities and Exchange
Commission, W.R. Grace Chairman and Chief Executive Officer
Paul J. Norris discloses that the company believes that
prosecution of the Class Action is stayed by its Chapter 11
proceedings.  Grace likely would have an obligation to indemnify
the Defendants for any liability arising out of the Complaint.  
However, Grace believes that the allegations are without merit and
that any liability arising from these allegations would be covered
by its fiduciary liability insurance.

Headquartered in Columbia, Maryland, W.R. Grace & Co., --
http://www.grace.com/-- supplies catalysts and silica products,  
especially construction chemicals and building materials, and
container products globally.  The Debtors filed for chapter 11
protection on April 2, 2001 (Bankr. Del. Case No: 01-01139).  
James H.M. Sprayregen, Esq., at Kirkland & Ellis and Laura Davis
Jones, Esq., at Pachulski, Stang, Ziehl et al. represent the
Debtors in their restructuring efforts.  (W.R. Grace Bankruptcy
News, Issue No. 69; Bankruptcy Creditors' Service, Inc., 215/945-
7000)


WINSTAR COMMS: Court Approves Settlement with Holdings & IDT Corp.
------------------------------------------------------------------
Christine C. Shubert, the Chapter 7 Trustee overseeing the
liquidation of Winstar Communications, Inc.'s estate, sought and
obtained the approval of the U.S. Bankruptcy Court for the
District of Delaware to approve her settlement agreement with
Winstar Holdings, LLC, and IDT Corporation.

The Trustee alleged that Winstar Holdings withheld and failed to
return to the Chapter 7 estate certain assets totaling
$3.3 million, which were excluded from the sale of Winstar
Communication's assets to Winstar Holdings.  Winstar Holdings
denied the Trustee's allegations.  In addition, Winstar Holdings
sought a $1.4 million reimbursement from the Trustee and asserted
that the Debtors are required to pay the Federal Communications
Commission $9 million to transfer certain LMDS licenses to it.

On June 27, 2003, the Trustee filed a complaint against Winstar
Holdings to recover the Property.  Winstar Holdings denied all
liability and sought a judgment in excess of $11 million.  The
Trustee asserted affirmative defenses to Winstar Holding's
Counterclaim, denying all liability.

On March 3, 2004, the Parties signed a stipulation whereby Winstar
Holdings withdrew without prejudice its LMDS License Claim and the
Trustee withdrew without prejudice her request for partial
judgment on the pleadings relating to the LMDS License Claim.

Without admitting any liability on the part of either party, the
Parties agree to settle the Trustee's Claim, the LMDS License
Claim and the Counterclaim.  The Parties believe that the
Agreement will benefit the Debtors' estates because it will allow
them to avoid the time and expense of litigation.

As reported in the Troubled Company Reporter on July 6, 2004, the
salient provisions of the Settlement Agreement are:

   (1) In full satisfaction of the Claim, the LMDS License Claim
       and the Counterclaim, the Winstar Holdings will pay the
       Trustee $2,000,000 without further delay;

   (2) In consideration of the Settlement Payment, the Trustee
       and Winstar Holdings will exchange mutual releases from
       any and all claims, actions, liabilities, debts and causes
       of action relating to or pertaining to the Claim, LMDS
       License Claim and Counterclaim;

   (3) The mutual release will not apply to any cross claims for
       contribution and indemnity between and among the Trustee,
       the Debtors and Winstar Holdings arising out of or
       relating to the pending adversary proceeding captioned as
       Corporate Telecommunications Group, Inc. v. Christine C.
       Shubert, Chapter 7 Trustee, et al., Adversary No. 03-3028;
       The Parties will file a stipulation in the CTG Litigation
       permitting them to assert cross claims for contribution
       and indemnity against each other arising out of the claims
       in the CTG Litigation;

   (4) The Parties agree that the Trustee has satisfied Winstar
       Holding's claim for $222,503 in connection with the funds
       collected by the Trustee relating to the Northwest Nexus
       bank accounts;

   (5) The Trustee will fully and competently defend against any
       and all claims against her asserted by CTG.  The Trustee
       will not enter into any settlement with CTG without the
       prior written consent and approval of Winstar Holdings.
       Winstar Holdings will not be liable to indemnify the
       Trustee for any settlement effected without Winstar
       Holdings' consent; and

   (6) The terms, conditions, requirements and obligations of the
       Parties in the Asset Purchase Agreement will remain in
       full force and effect. (Winstar Bankruptcy News, Issue Nos.
       57 and 58; Bankruptcy Creditors' Service, Inc., 215/945-
       7000)  


WORLDCOM INC: MCI Officers Dispose of 40,589 Common Shares
----------------------------------------------------------
In separate filings with the Securities and Exchange Commission,
10 officers of MCI, Inc., disclose that they recently sold or
otherwise disposed of shares of common stocks in the company:
                                   
                                   No. of              Shares
                                   Shares    Selling   Still             
Officer         Designation        Sold      Price     Owned
--------        -----------        ------    -----     -------
Andreotti,      Pres.-Enterprise
Cindy K.        Markets             1,881    $16.60     68,245

Blakely,
Robert T.       Exec-VP & CEO       4,265    $16.60    154,688

Briggs,         Pres.-Operations
Fred M.         & Technology        1,881    $16.60     68,425

Capellas,
Michael D.      Pres. & CEO        22,581    $16.60    818,934

Cassaccia,      Executive VP
Daniel L.       Human Resources     1,756    $16.60     63,695

Crane,          Pres., Int'l &
Jonathan C.     Wholesale Mkts      1,545    $16.60     68,581

Huyard,         Pres-US Sales &
Wayne           Service             2,509    $16.60     90,993

Kelly,          Exec-VP & Gen.
Anastasia D.    Counsel             2,038    $16.60     73,932

Slusser,        Sr. VP &
Eric            Controller            753    $16.60     27,297

Trent, Grace    SVP Comm & Chief
Chen            of Staff            1,380    $16.60     50,046

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.  The Bankruptcy Court confirmed WorldCom's Plan on
October 31, 2003, and on April 20, 2004, the company formally
emerged from U.S. Chapter 11 protection as MCI, Inc.  (Worldcom
Bankruptcy News, Issue No. 59; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


* BOND PRICING: For the week of August 23 - August 28, 2004
-----------------------------------------------------------

Issuer                                Coupon   Maturity  Price
------                                ------   --------  -----
Adelphia Comm.                         3.250%  05/01/21    24
American & Foreign Power               5.000%  03/01/30    70
AMR Corp.                              4.500%  02/15/24    64
AMR Corp.                              9.000%  08/01/12    63
AMR Corp.                              9.000%  09/15/16    66
AMR Corp.                             10.200%  03/15/20    60
Burlington Northern                    3.200%  01/01/45    55
Calpine Corp.                          4.750%  11/15/23    75
Calpine Corp.                          7.750%  04/15/09    60
Calpine Corp.                          8.500%  02/15/11    61
Calpine Corp.                          8.625%  08/15/10    61
Calpine Corp.                          8.750%  07/15/07    67
Charter Comm. Holdings                10.000%  05/15/11    75
Comcast Corp.                          2.000%  10/15/29    40
Continental Airlines                   5.000%  06/15/23    74
Cummins Engine                         5.650%  03/01/98    73
CV Therapeutics                        2.000%  05/16/23    75
Delta Air Lines                        7.700%  12/15/05    39
Foamex L.P.                            9.875%  06/15/07    75
Greyhound Lines                        8.500%  03/31/07    75
Inland Fiber                           9.625%  11/15/07    44
Kulicke & Soffa                        0.500%  11/30/08    69
Level 3 Comm. Inc.                     2.875%  07/15/10    64
Level 3 Comm. Inc.                     6.000%  09/15/09    54
Level 3 Comm. Inc.                     6.000%  03/15/10    53
Liberty Media                          3.750%  02/15/30    65
Liberty Media                          4.000%  11/15/29    69
Missouri Pacific                       4.750%  01/01/30    75
National Vision                       12.000%  03/30/09    62
Northern Pacific Railway               3.000%  01/01/47    54
Northwest Airlines                     7.875%  03/15/08    64
Northwest Airlines                     8.700%  03/15/07    67
Northwest Airlines                     9.875%  03/15/07    69
Northwest Airlines                    10.000%  02/01/09    66
Primus Telecom                         3.750%  09/15/10    60
Univ. Health Services                  0.426%  06/23/20    58

                           *********

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-
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for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher Beard
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                *** End of Transmission ***