TCR_Public/040920.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, September 20, 2004, Vol. 8, No. 202

                          Headlines

A.B. DICK: Needs Until November 15 to Decide on Leases
A.B. DICK: Committee Wants to Hire McGuireWoods as Counsel
ACTUANT CORP: Completes $9 Million European Business Acquisition
AIR CANADA: Starting Daily Non-Stop Service to Rome
AJAX ONE: Fitch Assigns BB+ Rating to $9 Million Class IV Notes

ASHBERRY EXETER LLC: Voluntary Chapter 11 Case Summary
BALDWIN PLACE: JPMorgan to Auction Assets on Thursday
BARCON CORPORATION: List of 18 Largest Unsecured Creditors
BRISUBAR INC: List of 2 Largest Unsecured Creditors
CELESTICA INC: S&P Puts BB Credit Rating on Negative CreditWatch

CENPRO: Breaches Cease Trade Order, Securities Commission Says
CIRTRAN CORP: President Responds to Decline in Stock Trading
CLEANROOM ENTERPRISES: Case Summary & Largest Unsecured Creditors
COVANTA ENERGY: Lake II Asks Court to Fix Oct. 20 Admin. Bar Date
CRDENTIA CORP: Taps Vicki Smith as Interim Chief Financial Officer

CRESCENT REAL: Moody's Reviewing Single-B Ratings & May Downgrade
DELTA AIR: S&P Puts Corporate Credit Rating in Poor Standing
DELTA AIR: Fitch Junks Sr. Unsecured Rating after Exchange Offer
DUKE FUNDING: Moody's Shaves $5M Class C Notes' Rating to B1
EGAIN COMMS: Reports $420,000 Stockholders' Deficit at June 30

ENCORE MEDICAL: S&P Junks IHC's $165M Subordinated Note Offering
ENCORE MEDICAL: Moody's Junks $165 Mil. Senior Subordinated Notes
FINOVA CAPITAL: Gets Thaxton's Support to Exclude Fraud Issues
FOSTER WHEELER: Wins Petrochemicals Expansion Pact in Saudi Arabia
G-FORCE CDO: Fitch Puts Low-B Ratings on $96M Class G & H Notes

GRACE HOLDINGS: Case Summary & 4 Largest Unsecured Creditors
GSR MORTGAGE: Fitch Assigns Low-B Ratings to Classes B-4 & B-5
GXS CORP: Weak Performance Cues Moody's to Review Single-B Ratings
HAWAIIAN AIRLINES: Boeing Inks Pact on Leases & Bankruptcy Claim
HARRAH'S ENTERTAINMENT: Subsidiary Launches Sr. Debt Offering

HEILIG-MEYERS: Files Reorganization Plan & Disclosure Statement
HOLLINGER INTERNATIONAL: Half-Year Reports Not Yet Filed
HOLLINGER INT'L: Needs Time to Review Special Committee Report
ICG COMMS: Sets Oct. 15 Stockholders Meeting to Vote on Merger
INTEGRATED HEALTH: Rotech Registers Common Stock with SEC

INTEGRATED HEALTH: Wants Until Jan. 6 to Object to Claims
INTERMET CORP: Projects $19+ Million Third Quarter Net Loss
IPIX CORP: Clara Conti Succeeds Donald Strickland as Pres. & CEO
LB-UBS COMMERCIAL: S&P Affirms Low-B Ratings on Four Cert. Classes
LMI AEROSPACE: Sells Versaform Canada Division to Investors

LOOMIS SAYLES: Moody's Confirms B1 Ratings on $37M Class III Notes
M-FOODS HOLDINGS: S&P Puts B- Rating on Planned $100M Senior Notes
MCCANN: Brings-In Warren J. Van Der Waag as Accountant
MCDERMOTT INT'L: Subsidiary Concludes Partial Senior Debt Offer
MOONEY AEROSPACE: Files its Plan of Reorganization in Delaware

MORGAN STANLEY: Moody's Places B2 Rating on Class G Certificates
MRG ENTERPRISES LLC: Case Summary & Largest Unsecured Creditors
NATIONAL BENEVOLENT: Board Taps Fortress as Stalking Horse Bidder
NATIONAL ENERGY: Joint Hearing on Major Agreements is on Wednesday
NATIONAL MARINE: Case Summary & 20 Largest Unsecured Creditors

PACIFIC GAS: AT&T Broadband's $1.1MM Claim to be Disallowed
PAXSON COMMS: Resets NBC's Series B Preferred Stock Dividend Rate
PHOENIX CDO: Moody's Puts B2 Rating on $31M Class II Secured Notes
RCN CORP: Wants to Hire Financial Balloting as New Noticing Agent
RELIANCE GROUP: Committee Questions PBGC's Claim Calculations

RELIANT ENERGY: Fitch Affirms Single-B Ratings
SCHLOTZSKY'S: Franchisees Want Additional Committee Appointed
SCOTT ACQUISITION: Wants Kronish Lieb as Bankruptcy Counsel
SK GLOBAL: Court Confirms Chapter 11 Plan of Liquidation
SOLOMON EQUITIES INC: List of 13 Largest Unsecured Creditors

SOLUTIA INC: Asks Court to Extend Exclusive Periods
SPIEGEL INC: Eddie Bauer Taps Stephen Cirona as VP-Design
STELCO INC: Warns Traders of Woes Amidst Bullish Stock Trading
STONE TOWER: Moody's Assigns Ba2 Rating to Class D Notes
SURFSIDE RESORT: Case Summary & 20 Largest Unsecured Creditors

THREE RIVERS: Case Summary & 20 Largest Unsecured Creditors
TIAA REAL ESTATE: Fitch Assigns BB Rating on $17.5M Class IV Notes
TIAA REAL ESTATE: Fitch Puts BB Rating on $12.5 Class E Notes
TRANSMONTAIGNE INC: Closes New 5-Year $400 Million Bank Loan
UAL CORP: Court Allows Gracie Lerno Claim for $5 Million

UNIVERSAL ACCESS: U.S. Trustee Picks 5-Member Creditors Committee
US AIRWAYS: Shareholder Says Current Equity Worth $6 Per Share
US AIRWAYS: Hires Arnold & Porter as Lead Bankruptcy Counsel
VOEGELE MECHANICAL: Files Bankruptcy Schedules and Statements
WORLDCOM: Balks at Paying Fees for SEC's Blue River Probe

WORLDCOM INC: Asks Court to Expunge Abbott Litigants' $690M Claims
XEROX: Expand FreeFlow(TM) Collection with Four News Products

* BOND PRICING: For the week of September 20 - September 24, 2004

                          *********


A.B. DICK: Needs Until November 15 to Decide on Leases
------------------------------------------------------
A.B. Dick and its debtor-affiliates ask the U.S. Bankruptcy Court
for the District of Delaware for an extension, until
November 15, 2004, of the deadline by which they must decide
whether to assume, assume and assign, or reject their unexpired
nonresidential real property leases pursuant to section 365(d)(4)
of the Bankruptcy Code.

The Debtors are in the process of negotiating the sale of
substantially all of their assets.  Accordingly, the extension is
necessary:

    a) to preserve the leases as valuable assets of the Debtor's
       estate in connection with such sale; and

    b) to provide a potential purchaser at the sale with maximum
       flexibility in determining whether to seek the assumption
       and assignment of such Leases.

Because of the pending sale, the Debtors are unable to reject any
lease for fear that such action would severely lower the estates'
value.  Similarly, premature assumption might give rise to
significant administrative expenses that would create a financial
burden the estates may not be able to maintain.

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 (Bankr. D. Dela. Lead
Case No. 04-12002) on July 13, 2004. 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 Debtor filed for protection from
its creditors, it listed over $10 Million in estimated assets and
over $100 Million in estimated liabilities.


A.B. DICK: Committee Wants to Hire McGuireWoods as Counsel
----------------------------------------------------------
The Official Committee of Unsecured Creditors in A.B. Dick Company
and its debtor-affiliates' chapter 11 cases asks the U.S.
Bankruptcy Court for the District of Delaware for permission to
employ McGuireWoods LLP as its counsel effective July 23, 2004.

McGuireWoods will:

    a) advise the Committee with respect to its powers and
       duties;

    b) take all the necessary action to preserve, protect and
       maximize the value of the Debtors' estates for the
       benefit of the unsecured creditors, including but not
       limited to, investigating the acts, conduct, assets,
       liabilities and financial condition of the Debtors, the
       operation of the businesses and the desirability of the
       continuance of such business, and any other matter
       relevant to the case of the formulation of a plan;

    c) prepare on behalf of the Committee motions, applications,
       answers, orders, reports and papers that may be necessary
       to the Committee's interests in these chapter 11 cases;

    d) advise the Committee in connection with any sale of
       assets;

    e) represent the Committee's interests with respect to the
       Debtors' efforts to obtain postpetition secured
       financing;

    f) participate in the formulation of a plan of
       reorganization as may be in the best interests of the
       Committee and the unsecured creditors of the Debtors'
       estates;

    g) appear before the Court to protect the interests of the
       Committee and the value of the Debtors' estates before
       such courts;

    h) consult with the Debtors' counsel on behalf of the
       Committee regarding tax, intellectual property, labor and
       employment, real estate, corporate, litigation matters
       and general business operational issues; and

    i) perform all other necessary legal services and provide
       all other necessary legal advice to the Committee in
       connection with these chapter 11 cases.

Richard J. Mason, Esq., at McGuireWoods, discloses that
professionals at the Firm will bill the Debtors from $190 to $650
per hour.

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

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 (Bankr. D. Dela. Lead
Case No. 04-12002) on July 13, 2004. 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 Debtor filed for protection from
its creditors, it listed over $10 Million in estimated assets and
over $100 Million in estimated liabilities.


ACTUANT CORP: Completes $9 Million European Business Acquisition
----------------------------------------------------------------
Actuant Corporation (NYSE:ATU) has completed the purchase of all
the outstanding shares of Yvel S.A. for approximately EUR 7.5
million (US$9.0 million) in cash.  Located in Paris, France, Yvel
is a leading provider of hydraulic latches to the European cab-
over-engine truck market. It had annual sales of approximately $15
million in calendar 2003, has approximately 85 employees and is
expected to be accretive to Actuant's earnings per share during
fiscal 2005. Funding for the transaction was provided by
borrowings under Actuant's $250 million revolving credit facility.

Robert Arzbaecher, President and Chief Executive Officer of
Actuant, commented, "Yvel's market leadership, geographic
proximity, and manufacturing competency complements our Power-
Packer truck business. Yvel latches are often used in combination
with Power-Packer cab-tilt systems to provide complete engine
access solutions."

Yvel's management team will continue to lead the business
following the acquisition, and will be included in Actuant's
Engineered Solutions segment. Bill Blackmore, Engineered Solutions
Leader, stated, "Yvel is a natural addition to Power-Packer's
truck business. The globalization of our customers, demands for
product line consolidation opportunities, and potential synergies
are all factors supporting this deal. We believe that combining
our respective product lines and development talents will offer
customers unparalleled opportunity."

The Company also announced that it will be reporting fourth
quarter and fiscal year 2004 results on Thursday, September 30.

                        About the Company

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.

                          *     *     *

As reported in the Troubled Company Reporter on August 23, 2004,
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.


AIR CANADA: Starting Daily Non-Stop Service to Rome
---------------------------------------------------
Air Canada will launch daily non-stop service to Rome.  With the
reintroduction of service to Rome on April 4, 2005 from Toronto,
Air Canada will offer the only daily non-stop flights year-round
between Canada and the Italian capital.  Flights are timed for
convenient connections to and from cities throughout Air Canada's
extensive North American network.  Seats are now available for
purchase.

"We are delighted with the prospect of reintroducing service to
Rome, and strengthening Air Canada's position as the carrier of
choice for convenient and affordable non-stop flights to Europe,"
said Ben Smith, Vice President, Planning.  "Air Canada's
successful restructuring has resulted in substantially lower
operating costs since we withdrew from the route in 2003, and we
look forward to returning to Rome and offering consumers great
value and convenience."

Air Canada's Toronto-Rome non-stop service will be operated using
198-seat Boeing 767-200 ER aircraft.  With an eastbound flight
time of eight and a half hours, travellers will save at least one
hour off alternate routings.  Air Canada currently serves Italy
with its Star Alliance partner, Lufthansa, via Frankfurt and
Munich.  With the reintroduction of flights to Rome, Air Canada
plans to reinstate codeshare services via Rome to a number of
destinations within Italy, further extending its network.

             Toronto              Rome
             -------              ----
    AC890       1800          0835 (+1)       
    AC891       1020               1410

Montreal-based Air Canada provides scheduled and charter air
transportation for passengers and cargo to more than 150
destinations on five continents.  Canada's flag carrier is the
11th largest commercial airline in the world and serves 30 million
customers annually with a fleet consisting of 300 aircraft.  Air
Canada has been ranked as the world's safest airline and in a 2002
survey of the world's most frequent air travellers by travel
information publisher OAG, Air Canada was voted best airline in
North America for the second time in three years, and Air Canada's
frequent flyer program, Aeroplan, was voted best in the world.  
Air Canada is a founding member of Star Alliance providing the
world's most comprehensive air transportation network.

Headquartered in Saint-Laurent, Quebec Canada, Air Canada --
http://www.aircanada.ca/-- represents Canada's only major  
domestic and international network airline, providing scheduled
and charter air transportation for passengers and cargo.  The
Company filed for CCAA protection on April 1, 2003 (Ontario
Superior Court of Justice, Case No. 03-4932) and filed a Section
304 petition in the U.S. Bankruptcy Court for the Southern
District of New York (Case No. 03-11971).  Mr. Justice Farley
sanctioned Air Canada's CCAA restructuring plan on August 23,
2004.  Air Canada intends to emerge from CCAA protection on
September 30, 2004.  Sean F. Dunphy, Esq., and Ashley John Taylor,
Esq., at Stikeman Elliott LLP, in Toronto, serve as Canadian
Counsel to the carrier.  Matthew A. Feldman, Esq., and Elizabeth
Crispino, Esq., at Willkie Farr & Gallagher serve as the Debtors'
U.S. Counsel.  When the Debtors filed for protection from its
creditors, they listed C$7,816,000,000 in assets and
C$9,704,000,000 in liabilities.  


AJAX ONE: Fitch Assigns BB+ Rating to $9 Million Class IV Notes
---------------------------------------------------------------
Fitch Ratings affirms all of the rated notes issued by Ajax One,
Limited.  The affirmation of these notes is a result of Fitch's
annual rating review process.  These rating actions are effective
immediately:

   -- $251,000,000 class I floating rate notes affirmed at 'AAA';
   -- $33,000,000 class II fixed rate notes affirmed at 'A-';
   -- $53,000,000 class III fixed rate notes affirmed at 'BBB-';
   -- $9,000,000 class IV fixed rate notes affirmed at 'BB+'.

Ajax One, Ltd. is a collateralized debt obligation -- CDO, which
closed March 7, 2001, supported by:

   * a managed pool of commercial mortgage-backed securities
     (CMBS; 56.9%),

   * senior unsecured real estate investment trust (REIT; 38.2%)
     securities,

   * collateralized bond obligations (CBO; 4.6%), and

   * financial intermediary (CORP; 0.3%) securities.

Fitch has reviewed the credit quality of the individual assets
comprising the portfolio.

According to the July 21, 2004 trustee report the Senior Par
Coverage was 149.6% and the Mezzanine Par Coverage was 111.4%,
relative to test levels of 137.0% and 105.0% respectively.  Since
close, Ajax has not experienced any significant credit migration
and there has been minimal change in the weighted average rating
factor -- WARF -- from 25.74('BBB-/BB+') to 26.75 ('BBB-/BB+').

The collateral manager for Ajax is ING Capital LLC, the global
corporate and investment banking arm of ING Group.  Fitch has
discussed Ajax with the collateral manager and will continue to
monitor this transaction.

Based on the stable performance of the underlying collateral and
the over-collateralization tests, Fitch has affirmed all of the
rated liabilities issued by Ajax One, Ltd.  Fitch will continue to
monitor this transaction.


ASHBERRY EXETER LLC: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Ashberry Exeter LLC
        dba Ashberry Village Apartments
        812 North 2nd Avenue
        Phoenix, Arizona 85003

Bankruptcy Case No.: 04-16374

Type of Business: The Company is a 22-building, 172-unit
                  multi-family apartment complex.

Chapter 11 Petition Date: September 16, 2004

Court: District of Arizona (Phoenix)

Judge: Randolph J. Haines

Debtor's Counsel: Dennis J. Wortman, Esq.
                  Dennis J. Wortman, P.C.
                  2700 North Central Avenue #850
                  Phoenix, Arizona 85004
                  Tel: 602-257-0101
                  Fax: 602-776-4544

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 unsecured
creditors.


BALDWIN PLACE: JPMorgan to Auction Assets on Thursday
-----------------------------------------------------
                   Notice of Foreclosure Sale

   Banc One High Yield Partners, LLC ("Banc One") is the
Investment Manager for collateral owned by Baldwin Place CDO Ltd.,
(f/k/a Triumph Capital CBO I Ltd.) and Baldwin Place CDO, Inc.
(f/k/a Triumph Capital CBO I, Inc.) (together, the "Issuers") and
held by JPMorgan Chase Bank ("JPMorgan", f/k/a Chase Bank of
Texas, National Association), as Trustee and secured party
pursuant to an Indenture dated as of May 6, 1999 (the "Indenture")
among the issuers, the Trustee and Financial Security Assurance,
Inc. ("FSA").  

   The Trustee has advised Banc One that it has been directed by
FSA, which insures certain debt of the Issuers and is the
Controlling Party under the Indenture, to cause the a sale of the
assets of the Issuers (the "Assets") in a single transaction (the
"Sale") currently scheduled for 4 pm (NY time) on September 23,
2004.  

   The Assets will be sold to the highest bidder, with the Sale to
close by 1 pm (NY time) on the following business day.  No bids
will be accepted for less than all of the Assets.  Further
information regarding the sale, including the list of the Assets
can be obtained by contacting Banc One at 513-985-3200 and asking
James Shanahan.

   Please be advised that NEITHER FSA, JPMORGAN NOR BANC ONE ARE
AMKING REPRESENTATIONS, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE
OF THE ASSETS.  Further, THERE WILL BE NO WARRANTY RELATING TO
TITLE, POSSESSSION, QUIET ENJOYMENT OR THE LIKE.  ALL ASSETS WILL
BE SOLD AS IS, WHERE IS, WITHOUT ANY COVENANTS, WARRANTIES OR
REPRESENTATIONS, EXPRESS OR IMPLIED, OF ANY KIND OR NATURE
WHATSOEVER, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTY OR
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE,
ANY PURCHASER ACCEPTS ALL SUCH RISKS.

   The announcement of the sale is not intended to confer any
expectations, rights or privileges upon any party.  FSA has
expressly reserved any and all power to (i) bid any amount it
chooses at the Sale or make no bid whatsoever, or (ii) direct the
Trustee to postpone or cancel the Sale, pursuant to Section
5.17(a) of the Indenture.  FSA has also reserved all of its rights
and remedies under the Indenture or any related documents, at law,
in equity or otherwise.

   THIS ADVERTISMENT DOES NOT CONSTITUTE AN OFFER TO SEL, OR A
SOLICITATION OF AN OFFER TO BUY SECURITIES.  TO THE EXTENT THE
ASSETS DESCRIBED HEREIN ARE SECURITIES, SUCH ASSETS, IF OFFERED,
WILL NOT BE OFFERED OR SOLD IN ANY JURISDICTION OR TO ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION IN
SUCH JURISDICTION.


BARCON CORPORATION: List of 18 Largest Unsecured Creditors
----------------------------------------------------------
Barcon Corporation released a list of its 18 Largest Unsecured
Creditors:

    Entity                    Nature Of Claim       Claim Amount
    ------                    ---------------       ------------
Barcon, Winona                Loan                       $75,000

Piliero, Mazza & Pargament    Legal                      $70,000

Law Office of                 Legal                      $45,000
Julianne C. Wheeler

Rinker Materials              Trade Debt                 $39,464

Colorado Casualty Insurance   Insurance                  $17,755
Company

Horton Plumbing LLC           Trade Debt                 $17,000

White Cap Industries          Trade Debt                 $13,871

Pinal Lumber & Hardware       Trade Debt                  $4,314

Home Depot Credit Services    Trade Debt                  $4,250

Carpenters Trust Fund         Union Dues                  $4,230

United Rentals Northwest Inc  Trade Debt                  $3,490

Wells Fargo-VISA              Trade Debt                  $3,205

Bingham Equipment             Trade Debt                  $2,934

C-D Financial Louie Day       Accounting Services         $1,982

Border Products               Trade Debt                  $1,756

State Compensation Fund       Compensation Fund           $1,706

Global Fleet Services, LLC    Trade Debt                  $1,294

O'Brien Concrete Pumping      Trade Debt                  $1,135

Headquartered in Miami, Arizona, Barcon Corporation filed for
chapter 11 protection (Bankr. D. Ariz. Case No. 04-4285) on
August 12, 2004.  Alan L. Liebowitz, Esq., in Phoenix, represents
the Company in its restructuring efforts. When the Debtor filed
for protection from its creditors, it listed estimated assets of
over $1 million and estimated debts of $100,000 to $500,000.


BRISUBAR INC: List of 2 Largest Unsecured Creditors
---------------------------------------------------
Brisubar, Inc., released a list of its 2 Largest Unsecured
Creditors:

    Entity                           Claim Amount
    ------                           ------------
Unity Bank                             $1,500,000
c/o McCarter & English
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102

Rudy Slucker                             $252,000
74 O'Connor Circle
West Orange, New Jersey 07052

Headquartered in South Orange, New Jersey, Brisubar, Inc.,
trading as Discovery Childcare Learning Center, is an early
childhood care and education center. The Company filed for
chapter 11 protection on August 25, 2004 (Bankr. D. N.J.
Case No. 04-37693). Melinda D. Middlebrooks, Esq., at
Middlebrooks & Shapiro, represents the Company in its
restructuring efforts. When the Debtor filed for protection
from its creditors, it listed assets of less than $500,000 and
debts of over $1 million.


CELESTICA INC: S&P Puts BB Credit Rating on Negative CreditWatch
----------------------------------------------------------------
Standard and Poor's Ratings Services said it placed its long-term
corporate credit rating on Toronto, Ontario-based Celestica, Inc.,
on CreditWatch with negative implications based on revised
guidance and poor operating performance that has not met Standard
& Poor's expectations.

As reported in the Troubled Company Reporter on March 31, 2004,
Standard & Poor's Ratings Services lowered it long-term corporate
credit rating and unsecured debt on Celestica Inc. to 'BB' from
'BB+'.  At the same time, Standard & Poor's lowered its
subordinated debt rating on the company to 'B+' from 'BB-'.  The
outlook is negative.  "The ratings on Celestica reflect the
continued difficult end- market conditions and sub par operating
performance in the highly competitive electronic manufacturing
services -- EMS -- sector," said Standard & Poor's credit analyst
Michelle Aubin.  These factors are partially offset by the
company's tier-one position in the EMS sector and longer-term
trends favoring electronic manufacturing outsourcing.

"The CreditWatch placement on Celestica reflects the continuing
difficult end-market conditions and subpar operating performance
in the highly competitive electronic manufacturing services -- EMS
-- sector," said Standard & Poor's credit analyst Don P.
Povilaitis.  "This situation has resulted in free operating cash
flow (as at June 30) that remains negative and debt to EBITDA in
excess of 6x that is high for the current rating,"  Mr. Povilaitis
added.  

The company has revised downward its third-quarter (ending
Sept. 30, 2004) guidance for both revenues and earnings.  These
factors are partially offset by the company's Tier I position in
the EMS sector and long-term trends favoring electronic
manufacturing outsourcing.

Celestica is the fourth-largest EMS provider in the world with
revenues of US$6.7 billion in 2003.  More than 80% of Celestica's
revenues come from information technology infrastructure and
communication end-markets, which is a higher concentration than
other Tier I EMS companies.

Celestica's revision of 2004 third-quarter revenues to US$2.05
from US$2.15 billion, a decline of about 10%, combined with an
expected decline in net earnings of about 35%, demonstrate the
difficult operating environment for EMS providers, as several of
Celestica's major clients, particularly IT and telecommunications
companies, have materially reduced their orders with the company.  
Although Celestica expects to be free operating cash flow break-
even in the third quarter, Standard & Poor's believes that the
company will be challenged to maintain this level.

Celestica has implemented several restructuring programs that have
contributed to the company's improving operating margins.   
Nevertheless, a certain stability in the company's revenue
generation will be required to drive free operating cash flow and
ultimately produce positive earnings.

At the end of second-quarter 2004, Celestica's liquidity was
adequate, with cash of about US$800 million versus US$1.45 billion
in the previous year.  Although cash outlays to fund operations,
restructuring, and investments were expected to be moderate in
2004, the company's current cash burn rate remains unsustainable
in the long term.  Free operating cash flow in the second quarter
of 2004 was negative US$228.6 million compared with negative
US$129.6 million the previous year.  On a trailing twelve-month
basis to June 30, 2004, free operating cash flow was negative
US$633.5 million.

Standard and Poor's will meet with Celestica's senior management
in the near future to review the company's prospects for the third
quarter and current year, as well as to determine the company's
strategy to generate consistent positive free cash flow and to
bring credit protection measures in line with the current rating.  
Should the company be unable to demonstrate such improvement, the
ratings will be lowered.


CENPRO: Breaches Cease Trade Order, Securities Commission Says
--------------------------------------------------------------
A panel of the Alberta Securities Commission found that private
placements in Cenpro Technologies, Inc., orchestrated by its CEO
Bruno Stephen Dobler and Thomas Vernon Hochhausen, a consultant to
the company, breached a cease trade order against Cenpro and
contravened its stock exchange listing agreement.

The panel also found that they made misrepresentations to an
investor about the intention and use of her $200,000 investment.  
The panel, in its decision, stated that "deceiving an investor is
simply wrong.  When it happens, confidence in the capital market
is imperilled.  We have no hesitation in finding that this aspect
of the Respondents' conduct was contrary to the public interest."

The panel has not yet determined whether or not it is appropriate
to make any orders, but will accept oral and written submissions
from both ASC staff and the Respondents before doing so.

A copy of the Decision is available on the ASC website at

    http://www.albertasecurities.com/dms/1404/8895/11487_DOBLER_AND_HOCHHAUSEN_-_DECISION_-_2004-09-03_-__1614601.pdf

The Alberta Securities Commission is the industry funded
regulatory agency responsible for administering the Alberta
Securities Act.  Its mission is to foster a fair and efficient
capital market in Alberta and, together with the other members of
the Canadian Securities Administrators, develop and operate the
Canadian Securities Regulatory System.


CIRTRAN CORP: President Responds to Decline in Stock Trading
------------------------------------------------------------
Iehab Hawatmeh, president of CirTran Corp. (OTC BB: CIRT), in
response to the company's trading the last few days, says the
management team is aware of no material reason for the sudden
change in volume and price.

"No material event has transpired which we the management team or,
to my knowledge, any director to the company is aware of, which
account for Wednesday's dramatic decline in our company's stock.
In fact, if anything, recent and pending corporate activities
justify prudent optimism on the part of the investment community,"
stated Mr. Hawatmeh.

Mr. Hawatmeh further commented, "The company overall is doing very
well and in accordance with the company's overall business plan.
Sales are up and have consistently continued to increase each
quarter throughout 2004. The company's backlog is at a historical
high. The company's debt is at a record low for the year. The
company's two wholly owned subsidiaries, Racore Technology Corp.
and CirTran-Asia, Inc. have consistently demonstrated increased
client base and market share year to date. Moving forward towards
the end of the year, management strongly anticipates CirTran's
short and long term goals to be met with great success."

                       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
0inventories, 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.


CLEANROOM ENTERPRISES: Case Summary & Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Cleanroom Enterprises Inc.
        112 Pickard Drive East
        Syracuse, New York 13211

Bankruptcy Case No.: 04-66580

Type of Business: The Company manufactures and installs clean
                  rooms for the pharmaceutical industry.

Chapter 11 Petition Date: September 16, 2004

Court: Northern District of New York (Utica)

Judge: Chief Judge Stephen D. Gerling

Debtor's Counsel: Edward J. Fintel, Esq.
                  Edward J. Fintel & Associates
                  PO Box 6451
                  430 East Genesee Street, Suite 205
                  Syracuse, New York 13217-6451
                  Tel: (315) 424-8252
                  Fax: (315) 424-7990

Total Assets:  $575,694

Total Debts: $2,149,838

Debtor's 27 largest unsecured creditors:

    Entity                                Claim Amount
    ------                                ------------
Clestra Hauserman, Inc.                     $1,000,000
c/o Green & Seifter, PLLC
900 One Lincoln Center
Syracuse, New York 13202

Buffalo Air Handling                           $75,000

Internal Revenue Service                       $70,000

The Brighter Day.com                           $60,000

Kay-R Electric                                 $57,000

NYS Deptartment of Taxation & Finance          $50,000

New Hartford Sheet Metal Works                 $40,000


Robson Woese, Inc.                             $29,421

Joseph T. Ryerson & Sons, Inc.                 $24,468

Burns Brothers Contractors                     $18,378

M&D Transport                                  $16,186

M. Ronald Harms                                $15,011

R.L. Kistler, Inc.                             $13,953

Graybar Electric Company, Inc.                 $13,559

AEMS Service Company                           $12,289

BGI Shared Services                            $12,123

Maracle Industrial Finishing Co., Inc.         $10,498

American Express                                $9,994

Air Design Systems, Inc.                        $9,882

Advance Sheet Metal, Inc.                       $9,560

Reed Exhibitions                                $9,265

The Hartford                                    $8,772

Falso Industries, Inc.                          $8,349

CSUSA - Baltimore                               $7,650

BR Johnson, Inc.                                $7,643

Keonig Advertising                              $7,000

Niagara Mohawk Power Corporation and            $7,000
William Grossman, Esq.


COVANTA ENERGY: Lake II Asks Court to Fix Oct. 20 Admin. Bar Date
-----------------------------------------------------------------
Covanta Lake II, Inc., a Covanta Energy debtor-affiliate, asks the
United States Bankruptcy Court for the Southern District of New
York to establish a deadline for filing administrative claims
against its estate.

Covanta Lake II proposes 5:00 p.m., prevailing Eastern Time on
October 20, 2004, to be the last date upon which all applications
for:

   (a) actual and necessary costs and expenses incurred pursuant
       to Sections 503(b), 507(a)(1), 507(b) or 1114(e)(2) of
       the Bankruptcy Code; or

   (b) any substantial contribution claim by any creditor or
       party-in-interest for reasonable compensation for services
       rendered pursuant to Sections 503(b)(3), (4), or (5),

must be filed with the Bankruptcy Court.

Administrative Expense Claims exclude:

   * claims for fees by the United States Trustee;

   * postpetition trade liabilities incurred and payable in the
     ordinary course of business by Covanta Lake II; or

   * fees and expenses incurred by:

     -- retained professionals;

     -- persons that Covanta Lake II employs or those who serves
        as its independent contractors in connection with its
        reorganization efforts; or

     -- fees and expenses incurred by Southeast Bank, National
        Association, the indenture trustee for the Series 1993A
        Recovery Industrial Development Refunding Revenue Bonds
        issued by Lake County, Florida, under an Indenture Trust
        dated October 1, 1993.

Applications for Administrative Expense and the Substantial
Contribution Claims must also be served on Covanta Lake II's
counsel:

      (i) Jenner & Block LLP
          One IBM Plaza
          Chicago, Illinois 60611
          Attention: Vincent E. Lazar, Esq.; and

     (ii) Cleary, Gottlieb, Steen & Hamilton
          One Liberty Plaza
          New York, New York 10006
          Attn: James L. Bromley, Esq.

Headquartered in Fairfield, New Jersey, Covanta Energy Corporation
-- http://www.covantaenergy.com/-- is a publicly traded holding  
company whose subsidiaries develop, own or operate power
generation facilities and water and wastewater facilities in the
United States and abroad. The Company filed for Chapter 11
protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826).  
Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary,
Gottlieb, Steen & Hamilton represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
its creditors, they listed $3,280,378,000 in assets and
$3,031,462,000 in liabilities. (Covanta Bankruptcy News, Issue
No. 65; Bankruptcy Creditors' Service, Inc., 215/945-7000)


CRDENTIA CORP: Taps Vicki Smith as Interim Chief Financial Officer
------------------------------------------------------------------
Crdentia Corp. (OTC Bulletin Board: CRDE), a leading U.S. provider
of healthcare staffing services, has appointed Vicki L. Smith, 36,
as Interim Chief Financial Officer. Ms. Smith replaces William
Leftwich, who has left the Company to pursue other opportunities.
Crdentia has initiated a search for a permanent replacement for
Mr. Leftwich.

In addition to her new role as Interim Chief Financial Officer,
Ms. Smith will continue to serve as Crdentia's Vice President of
Finance where she is responsible for the Company's SEC reporting,
cash flow forecasting, budgeting, financial reporting, financial
due diligence on potential acquisitions as well as direct
management of the accounting staff. Ms. Smith has played an
instrumental role at the Company and has overseen the
implementation of new financial software and analytical procedures
which resulted in greatly improved decision-making data for senior
management.

Prior to joining Crdentia, Ms. Smith served as Controller for
Efficient Networks, Inc., a developer and supplier of high-speed
digital subscriber line customer premises equipment for the
broadband communications market, from 1997 to 2002. From 1996 to
1997, Ms. Smith served as Assistant Controller of Financial
Security Services, Inc., a private company providing financial and
billing services to independent security alarm dealers. She began
her career at the international public accounting firm of KPMG
Peat Marwick.

Ms. Smith holds a CPA certificate in the state of Texas and
received a bachelor's degree in Accounting from the University of
Texas at Austin.

"Since joining Crdentia, Vicki has been a key member of our
management team and a valuable contributor to the development of
our financial systems and strategies," said James D. Durham,
Chairman and CEO of Crdentia. "Her strong accounting background
coupled with an in-depth understanding of Crdentia's operations
and financial goals makes her ideally suited to manage the
Company's finance and accounting teams until a permanent chief
financial officer is brought on-board.

"We thank Bill Leftwich for his contributions to Crdentia's growth
and wish him well in his future endeavors," said Mr. Durham.

                        About Crdentia Corp.

Crdentia Corp. is one of the nation's leading providers of
healthcare staffing services. Crdentia seeks to capitalize on an
opportunity that currently exists in the healthcare industry by
targeting the critical nursing shortage issue. There are many
small, private companies that are addressing the rapidly expanding
needs of the healthcare industry. Unfortunately, due to their
relatively small capitalization, they are unable to maximize their
potential, obtain outside capital or expand. By consolidating
well-run small private companies into a larger public entity,
Crdentia intends to facilitate access to capital, the acquisition
of technology, and expanded distribution that, in turn, drive
internal growth. For more information, visit
http://www.crdentia.com/

                       Financial Challenges

Crdentia Corp.'s auditors expressed doubt about the company's
ability to continue as a going concern when they reviewed the
company's 2002 financial statements.  At Dec. 31, 2003, the
company's balance sheet showed a $1.2 million working capital
deficit.  Crdentia posted a $2.9 million net loss in the half-year
ending June 30, 2004, eroding shareholder equity by more than 50%
from what it was at Dec. 31, 2003, to $1.9 million.


CRESCENT REAL: Moody's Reviewing Single-B Ratings & May Downgrade
-----------------------------------------------------------------
Moody's Investors Service placed Crescent Real Estate Operating
Limited Partnership's B1 senior unsecured debt ratings under
review for possible downgrade.  This action reflects:

   * the REIT's deterioration in operating performance,

   * potential further pressure on operating results, and    

   * uncertain effects on financial flexibility from their
     evolving joint venture strategy.

Moody's indicated that Crescent's debt protection measures have
weakened significantly, and this has decreased the REIT's cushion
with respect to its bank and bond covenants.  The REIT's fully
loaded fixed charge coverage fell to 1.22X for 1H04, from 1.43X
for 2003, and the value of its unencumbered assets cover
unsecured debt by only 1.7X at 30 June 2004, down from 1.8X at
December 31, 2003, and unsecured debt and preferred stock together
by only 1.14X.

Moody's considers the unencumbered asset pool to be shallow, with
a material portion of cash flows considered volatile.  
Furthermore, unsecured bonds issued by Crescent Real Estate
Equities Partnership are structurally subordinated to the
liabilities of its subsidiaries, where most of the real estate
assets are held.

Moody's notes that Crescent has been making progress in increasing
the geographic diversification of its portfolio, and in addressing
near-term debt maturities.  The REIT has entered the Las Vegas,
Southern California and Southern Florida markets over the past
year, thus diluting its Texas concentration.  In June 2004, the
REIT sold its Fountain Place asset in Dallas, Texas, utilizing the
proceeds to pay off a mortgage of $220 million, which mitigated
its refinancing risk.  However, difficult office property markets
have crimped Crescent's performance, and this has led to a
dividend payout that has exceeded the REIT's adjusted FFO for the
past few years.  A reduction in the dividend appears unlikely, as
does a rapid turnaround in property performance that would
generate the cash to cover the dividend.

During its review, Moody's will focus on Crescent's projected
operating performance, liquidity-generating asset sales, including
those through joint ventures, the quality of the future
unencumbered asset pool, and cushions surrounding debt covenants.

A confirmation of the rating with a stable outlook would depend on
Crescent enhancing its financial flexibility -- including
liquidity, unencumbered assets and covenant cushion -- and
achieving a path for operating performance improvement.  A rating
downgrade would result from continued operating weakness or a
material deterioration in its unencumbered asset base.

These ratings were placed under review for possible downgrade:

   * Crescent Real Estate Equities Limited Partnership -- Senior
     unsecured debt at B1;

   * Crescent Real Estate Equities, Inc. -- Preferred stock at B3,
     preferred stock shelf at (P)B3;

Crescent Real Estate Equities, Inc. [NYSE: CEI], headquartered in
Fort Worth, Texas, USA, is a fully integrated umbrella partnership
real estate investment trust -- UPREIT.  As of June 30, 2004,
Crescent's assets consisted of 67% wholly owned or partial
interests in office buildings, 12% resort and hotel assets,
16% residential development, and the rest in temperature-
controlled logistics facilities.  The REIT had assets of
$4.5 billion and book equity of $1.2 billion as of June 30, 2004.


DELTA AIR: S&P Puts Corporate Credit Rating in Poor Standing
------------------------------------------------------------
Standard & Poor's Ratings Services lowered selected ratings on
Delta Air Lines Inc., including lowering the corporate credit
rating to 'CC' from 'CCC', following the airline's launch of an
exchange offer for unsecured bonds and some aircraft-backed debt.
The outlook is negative.

"The downgrade reflects a high likelihood that, with the launch of
an exchange offer that would pay less than face value to certain
Delta bondholders, Standard & Poor's will shortly lower the
company's corporate credit rating either to 'SD' (selective
default), if the exchange offer is successful, or to 'D' if the
offer fails and Delta files for bankruptcy," said Standard &
Poor's credit analyst Philip Baggaley.  "The rating change does
not indicate a heightened risk of a bankruptcy filing, as a
successful exchange offer (which would require also fulfillment of
other conditions) could avert such an outcome.  

Accordingly, Standard & Poor's affirmed ratings on securities that
are not part of the exchange offer," the credit analyst continued.   
The downgrade also was not based on the going concern
qualification announced by Delta's auditors, though that
announcement underlines the gravity of the company's financial
outlook.

Delta proposes to offer up to $680 million of new secured notes to
holders of $2.2 billion of unsecured bonds and $471 million in
three junior classes of enhanced equipment trust certificates --
EETCs.  The new secured notes would consist of three classes that
are pari passu and have an equal claim on the same collateral
pool, but have different coupons and maturities.  The new notes
would be offered to existing bondholders, grouped by the maturity
of the securities that they hold currently, at various exchange
ratios.  There are numerous conditions attached to completion of a
successful exchange offer, including minimum issuance of
$612 million new notes and conclusion of a cost-saving contract
with Delta's pilots' union.  Delta has not requested credit
ratings on the exchange notes.  If the offer were fully subscribed
by each group of bondholders, Delta would reduce its total debt by
about $875 million, exchanging $680 million of new notes for about
$1.56 billion of existing bonds and certificates.

The exchange offer, which will be open until Oct. 14, 2004, is
intended to advance Delta's overall restructuring plan, which
seeks to combine cost cuts (an additional $2.7 billion of annual
cash savings by 2006, including $1 billion being sought from
pilots), enhanced customer service, debt reduction, and widespread
network changes (including the closure of Delta's hub at Dallas-
Fort Worth International Airport).  The proposed exchange offer,
although it does not materially reduce Delta's overall
$20 billion of debt and leases, would lighten near-term debt
maturities and help persuade pilots that management is seeking
sacrifices from a range of stakeholders, not just labor.

Ratings will be lowered to 'D' upon a bankruptcy filing or to 'SD'
upon a distressed debt exchange, such as that proposed
Sept. 15, 2004.  A new corporate credit rating would be assigned
after completion of such an exchange.


DELTA AIR: Fitch Junks Sr. Unsecured Rating after Exchange Offer
----------------------------------------------------------------
Following the announcement that Delta Air Lines (NYSE: DAL)
initiated an exchange offer affecting much of the airline's
outstanding senior unsecured debt securities, Fitch Ratings
lowered Delta Air Lines' senior unsecured rating to 'C' from 'CC'.
The rating change reflects Fitch's conclusion that unsecured
noteholders can expect to see a substantial reduction in principal
payments if the offer is approved by noteholders as of the offer
deadline on Oct. 14, 2004.

Although Delta has not stated specifically that a failure to
complete the unsecured debt restructuring would in and of itself
result in a Chapter 11 filing, Fitch believes that a successful
bond exchange is a crucial element of any out-of-court
reorganization that Delta management seeks to engineer over the
next few weeks.  The completion of the debt exchange will
ultimately become moot if the airline is unable to reach a
consensual agreement with its pilots over the terms of a new
contract, as well as a solution to the pilot early retirement
issue that threatens to force a Chapter 11 filing by the end of
the month.

Negotiations with ALPA (the pilots union), bondholders, lessors
and other stakeholders are now moving in parallel as management
pursues a radical overhaul of its cost structure that it hopes
will result in a total of $5 billion in annual cash savings versus
2002 levels by 2006.  A rapid curtailment in the number of
retiring pilots is now the central issue facing Delta in mapping
out its plans for reorganization -- either out of court through a
series of negotiated agreements or via court-supervised
restructuring under Chapter 11 protection.  Absent changes in the
pilot agreement that would reduce the number of pilots retiring
early and exercising an option to receive up to 50% of benefits in
a 'lump sum' at retirement, Delta may face a serious threat to its
operational integrity as heavy pilot training needs could force
disruptive schedule and fleet changes.  The early retirements are
putting additional pressure on the funded status of Delta's pilot
defined benefit plan, as plan asset balances fall in connection
with the exercise of the 'lump sum' payout option.

Acceptance of the distressed exchange offer by affected
bondholders as of the Oct. 14 deadline would result in a downgrade
to 'D' or 'default' on those Delta senior unsecured notes
exchanged in this offer.  Separate negotiations with other
unsecured bondholders not eligible for this exchange offer may be
expected to move in a parallel fashion.  Should those other
bondholders accept a reduction of principle payments the rating on
those unsecured notes would also be lowered to 'D'.  In the event
that Delta files for Chapter 11 protection before the completion
of this exchange offer, ratings on all senior unsecured debt will
be lowered to 'D'.


DUKE FUNDING: Moody's Shaves $5M Class C Notes' Rating to B1
------------------------------------------------------------
Moody's Investors Service downgraded its ratings of these classes
of notes issued by Duke Funding I, Ltd., a collateralized debt
obligation issuer:

   (1) $17,000,000 Class B-1 Fixed Rate Notes due
       November 10, 2035 from A3 on watch for possible downgrade        
       to Baa2 no longer on watch for possible downgrade.

   (2) $10,000,000 Class B-2 Floating Rate Notes due
       November 10, 2035 from A3 on watch for possible downgrade
       to Baa2 no longer on watch for possible downgrade.

   (3) $5,000,000 Class C Fixed Rate Notes due November 10, 2035
       from Ba2 on watch for possible downgrade to B1 no longer on
       watch for possible downgrade.

The rating actions reflect deterioration in the credit quality of
the underlying collateral pool, which consists primarily of
tranches of real estate related asset-backed securitizations.  The
Class B Notes and Class C Notes were placed on the Moody's
Watchlist for possible downgrade on July 21, 2004.

Moody's stated that as a result of the deterioration in credit
quality of the collateral pool, the ratings assigned to the Class
B Notes and to the Class C Notes, prior to the rating actions
taken today, are no longer consistent with the credit risk posed
to investors.

Moody's also removed from the watchlist for possible downgrade and
has confirmed the Aaa rating of the following class of notes
issued by Duke Funding I, Ltd.

   -- $260,000,000 Class A Floating Rate Notes due
      November 10, 2030, Aaa rating confirmed.


EGAIN COMMS: Reports $420,000 Stockholders' Deficit at June 30
--------------------------------------------------------------
eGain Communications Corporation (OTC BB: EGAN), a leading
provider of customer service and contact center software, reported
financial results for the fourth quarter and fiscal year ended
June 30, 2004.

Revenue for the quarter was $4.7 million, a decrease of 10%
compared to $5.2 million for the quarter ended March 31, 2004 and
a decrease of 12% compared to $5.4 million for the comparable year
ago quarter. For the fiscal year ended June 2004, revenue was
$19.6 million, a decrease of 11% compared to revenue of $22.1
million in fiscal 2003.

Net loss before dividends on convertible preferred stock for the
quarter ended June 30, 2004 was $980,000, compared with $1.9
million for the same period a year ago. Net loss applicable to
common stockholders was $2.8 million, compared with $3.6 million,
for the same period a year ago. For the fiscal year ended June 30,
2004, net loss applicable to common stockholders was $12.3
million, compared to a net loss applicable to common stockholders
of $18.4 million in fiscal 2003.

Pro forma net loss was $34,000 or $0.01 per share for the quarter
ended June 30, 2004, compared to a pro forma net loss of $84,000,
for the same period a year ago. For the fiscal year ended June
2004, pro forma net loss was $563,000, compared to $2.8 million,
in fiscal 2003. Pro forma net income (loss) figures exclude
depreciation, amortization, accreted dividends, interest expense,
tax expense and restructuring charges.

Total cash and cash equivalents increased by $774,000 during the
fiscal year to approximately $5.2 million at June 30, 2004.

"Even though we failed to grow our top-line in a tough market, we
significantly improved our operating performance over 2003 and
brought our cash burn under control," said Ashu Roy, CEO of eGain.
"Equally important, we accelerated our pace of customer
acquisitions to 41 in 2004 versus 28 in 2003, based on the
strength of our award-winning eGain Service 6 suite. We
established and developed partnerships with world-class companies
such as Aspect, HP, Remedy, and Wipro to increase the reach and
value of our solutions. We also saw an increase in the demand for
our 6th generation eGain OnDemand(TM) hosted service that's easy
to start, helping our customers better serve their customers
immediately."

                  Fiscal 2004 Business Highlights

Products:

   -- Market demand for eGain Service 6(TM) continued to gain
      momentum during the fiscal year with customers deploying the
      solution for eService, extended service fulfillment, and to
      log and track phone, fax and paper-based interactions.

   -- Sustained adoption of eGain OnDemand, eGain's 6th generation
      hosted offering.  This solution is ideal for companies with
      modest customization requirements that want to minimize
      upfront investment and speed implementation.
    

Partnerships:

   -- Validation of eGain's solutions with Aspect's Enterprise
      Contact Server(TM).  The integration will enable joint
      customers to unify and optimize multi-channel customer
      service in their contact centers.

   -- Validation of eGain's knowledge management solution with HP
      ServiceDesk(TM).  The combined solution will help IT service
      management groups in global enterprises maximize their
      return on knowledge investments and promote self-service.

   -- Validation of eGain's knowledge management solution with
      Remedy's Action Request System(TM).  The integration will
      improve problem resolution effectiveness and efficiencies in
      customer helpdesks.

   -- Strategic global alliance with Wipro Technologies, combining
      Wipro's leadership in system integration with eGain's best-
      in-class multi-channel customer service and contact center
      software to deliver compelling value to customers.
    

Business momentum:

   -- New customer acquisition increased 46% in fiscal 2004
      compared to fiscal 2003.

   -- eGain acquired 10 new customers in the fourth quarter of
      fiscal 2004, while expanding business with current
      customers.  Among new customers acquired in the fourth
      quarter of fiscal 2004: Adelphia Communications Corp.,
      eDiets.com, Inc., Emirates Airlines, Inc., Frederick's of
      Hollywood, Inc., Renesas Technology Corporation, and Stata
      Laboratories, Inc.

   -- The following represents a sample of new and existing
      customers, who acquired or expanded their use of eGain
      solutions in fiscal 2004:

         ABN-AMRO Services Company, Inc., Adelphia Communications
         Corp., Affiliated Computer Services, Inc., AFFINA, Avista
         Corporation, Centrica plc, Charter Communications, Inc.,
         Cox Newspapers, Inc., eWorld Media Holdings, Inc., GVB
         (Amsterdam Public Transport), IBM, La Quinta Corporation,
         Nokia Corporation, Portland General Electric Company,
         Sallie Mae Servicing, L.P., TRW Automotive Holdings
         Corp., Ventura (UK) and Virgin Mobile Telecoms Limited.
    
Industry Recognition during Fiscal Year 2004:

   -- eGain Knowledge(TM),  the company's pioneering knowledge
      management solution, received the "CRM Excellence Award" for
      2004 from Customer Inter@ctions Solutions magazine, in
      recognition of the outstanding business benefits delivered
      to customers.

   -- eGain Service 6(TM) suite was selected as a "product of the
      year" for 2003 by Customer Inter@ctions Solutions magazine
      for product innovation.

   -- Several eGain customers were among Internet Retailer
      Magazine's Best-of-the-Web Top 50 Retailing Sites for 2003.

   -- Listed as a Software Magazine Top 500 vendor for 2003.

   -- The company received a "promising" rating in the Gartner
      eService MarketScope Report published in Q1 CY2004,
      following a "visionary" rating in Gartner magic quadrants in
      2002 and 2003.
    
                   Fourth Quarter and Fiscal 2004
                    Financial Highlights Revenue

Revenue for the quarter was $4.7 million, a decrease of 12%,
compared to $5.4 million for the comparable year ago quarter. For
the fiscal year ended June 2004, revenue was $19.6 million, a
decrease of 11% compared to revenue of $22.1 million in fiscal
2003.

License revenue for the quarter was $743,000 representing a
decrease of 50% from the comparable year-ago quarter. For the
fiscal year ended June 2004, license revenue was $4.1 million, a
decrease of 33% compared to license revenue of $6.1 million in
fiscal 2003.

Support and services revenue for the quarter was $4.0 million,
representing a 2% increase from the comparable year-ago quarter.
For the fiscal year ended June 2004, support and services revenue
was $15.5 million, a decrease of 3% compared to support and
services revenue of $16.0 million in fiscal 2003.

International revenue accounted for 47%, and domestic revenue
accounted for 53% of total revenue for the quarter, compared to
45% international revenue and 55% domestic revenue in the
comparable year-ago quarter. For the fiscal year ended June 30,
2004, international revenue accounted for 48%, and domestic
revenue accounted for 52% of total revenue compared to 49% and
51%, respectively, in fiscal 2003.

Cost of Revenue and Gross Profit

Gross profit for the quarter was $2.8 million or a gross margin of
60% compared to $3.3 million or 61% for the comparable year-ago
quarter. Gross profit for fiscal year 2004 was $11.5 million or a
gross margin of 59% compared to $10.7 million or 49% in the prior
fiscal year.

Research and Development

Research and development expense for the quarter was $619,000, a
decrease of $555,000 or 47% from the comparable year-ago quarter.
For fiscal year 2004, total research and development expense was
$2.9 million, a decrease of 50% from the prior fiscal year.

Sales and Marketing

Sales expense for the quarter was $1.6 million, a decrease of
$150,000 or 8% from the comparable year-ago quarter. For fiscal
year 2004, total sales expense was $7.0 million, a decrease of
$1.3 million or 15% from the prior fiscal year.

Marketing expense for the quarter was $324,000, an increase of
$70,000 or 28% from the comparable year-ago quarter. The total
marketing expense for fiscal year 2004 was $1.3 million unchanged
from the prior year.

General and Administrative

General and administrative expense for the quarter was $777,000, a
decrease of $369,000 or 32% from the comparable year-ago quarter.
For fiscal year 2004, total general and administrative expense was
$3.4 million, a decrease of $1.4 million or 28% from the prior
fiscal year.

Other Income/Expense

Other expense for the quarter was $109,000 compared to $61,000 for
the comparable year-ago quarter. For fiscal year 2004, total other
expense was $327,000 compared to a total of other income of
$144,000 in fiscal 2003.

Earnings

On a GAAP basis, net loss applicable to common stockholders for
the June 2004 quarter was $2.8 million or $0.77 per share,
compared to a net loss applicable to common stockholders of $3.6
million, or $0.98 per share in the comparable year-ago quarter.
The GAAP-basis net loss applicable to common stockholders for the
fiscal year ended June 2004 was $12.3 million, a reduction of $6.1
million or 33% from $18.4 million in fiscal 2003.

For the June 2004 quarter, pro forma net loss was $34,000 or $0.01
per share, compared to a pro forma net loss of $84,000 or $0.02
per share, in the comparable year-ago quarter. For the fiscal year
ended June 2004, the pro forma net loss was $563,000 a decrease of
80% or $2.3 million compared to $2.8 million for fiscal 2003.

Balance Sheet

Cash

Total cash and cash equivalents were $5.2 million at June 30,
2004, an increase of $774,000 from $4.4 million at June 30, 2003.

Days Sales Outstanding (DSO)

DSO for the June 2004 quarter was 55 days, unchanged from the
comparable year-ago quarter.

               About eGain Communications Corporation

eGain is a provider of customer service and contact center
software and services, trusted by world-class companies to achieve
and sustain customer service excellence for over a decade. eGain
Service 6(TM), the company's software suite, available licensed or
hosted, includes integrated applications for customer email
management, live web collaboration, service fulfillment, knowledge
management, and web self-service. These robust applications are
built on the eGain Service Management Platform(TM) (eGain
SMP(TM)), designed to be a scalable next-generation framework that
includes end-to-end service process management, multi-channel,
multi-site contact center management, a flexible integration
approach, and certified out-of-the-box integrations with leading
call center, content and business systems.

Headquartered in Mountain View, California, eGain has an operating
presence in 18 countries and serves over 800 enterprise customers
worldwide. To find out more about eGain, visit
http://www.eGain.com/or call the company's offices -- United  
States: (888) 603-4246 ext. 9; London: +44 (0) 1753- 464646;
Tokyo: 81-3-5778-7590.

At June 30, 2004, eGain Communications' balance sheet showed a
$420,000 stockholders' deficit, compared to $4,081,000 of positive
equity at December 31, 2003.


ENCORE MEDICAL: S&P Junks IHC's $165M Subordinated Note Offering
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'B' corporate credit
rating to medical products maker Encore Medical Corp.  Standard &
Poor's also assigned a 'B' rating to the $180 million senior
secured credit facility of subsidiary Encore Medical IHC Inc. and
assigned a 'CCC+' rating to the subsidiary's $165 million
subordinated note offering.  

The proceeds of this transaction and a sale of stock will go
toward the purchase of another medical products firm, Empi Corp.,
for approximately $317 million.  Both Galen Partners and the
Carlyle Group will own equity in Encore at the close of the
transaction, and approximately $135 million of debt will be
outstanding. (Encore Medical Corp. guarantees the debt at Encore
Medical IHC.)

Encore's new secured credit facility consists of a $150 term loan
maturing in 2010 and a $30 million revolving credit facility
maturing in 2009.  The revolving credit facility should be fully
available at the close of the transaction. The outlook is
positive.

Standard & Poor's will withdraw its bank loan and senior secured
ratings on Empi Corp. after the close of the transaction.

"The speculative-grade ratings on Encore reflect its highly
leveraged capital structure, as well as the challenges the company
will face to integrate the operations of Empi, which is a much
larger company," said Standard & Poor's credit analyst Jordan C.
Grant.  "These negative rating factors are partially offset by
Encore's strong positions in niche-physical therapy and orthopedic
rehabilitation equipment markets."

Austin, Texas-based Encore manufactures physical therapy equipment
and orthopedic implants.  In addition, the company's Chattanooga
Group division has leading positions in electrotherapy and
produces a comprehensive line of equipment for physical therapy
clinicians.  Encore is much larger than other PT equipment
manufacturers and has a broad product offering, so it can sell its
products through more distributors than any of its peers.

Though the company's line of orthopedic implants is comprehensive,
Encore is still in the early stages of developing a sales network
to market these implants and it must compete in this segment
directly against much larger, more mature companies with greater
financial resources.

The acquisition of Empi will give Encore leading positions in two
new fields, transcutaneous electric nerve stimulation used for
pain relief and iontophoretic drug delivery (which is made through
the skin).  Empi enjoys a predictable revenue stream stemming from
its relationships with physicians and physical therapists, its
reputation for quality, and its recurring consumables revenue,
which accounts for about 20% of sales.

After the merger, Encore will be able to produce orthopedic
products for use before, during, and after orthopedic surgery.

Still, Encore must integrate Empi's larger operations.  Encore
management will also face a challenge in consolidating
manufacturing and systems.  In addition, orthopedic implants,
Encore's smallest (but most profitable) business line, must
compete against much larger companies with much greater resources,
such as Stryker Corp. (A-/Stable/--) and Zimmer Holdings Inc.
(BBB/Stable/--).

As part of its strategy, the company plans to take advantage of
cross-selling opportunities that exist between the Chattanooga
division and Empi's core business, and will gradually market
select Chattanooga products directly.


ENCORE MEDICAL: Moody's Junks $165 Mil. Senior Subordinated Notes
-----------------------------------------------------------------
Moody's Investors Service assigned B1 ratings for the guaranteed
senior secured bank facilities being arranged for Encore Medical
IHC, Inc., including its planned $30 million revolver and
$150 million term loan B.  Moody's also assigned a Caa1 rating for
Encore's new $165 million senior subordinated notes and a B2
senior implied rating.  Moody's also assigned a Caa2 senior
unsecured issuer rating to Encore Medical Corporation.

These new facilities will be issued to finance the acquisition of
EMPI by Encore and retire EMPI's existing debt.

These ratings recognize:

   * the expected demographics and innovation-driven volume
     growth,

   * Encore's strong positions in certain niche medical device
     markets,

   * the working capital benefits of EMPI's third-party billing
     system, and

   * the financial flexibility afforded the company by the lack of
     significant mandatory payments under the bank debt.

The ratings also recognize:

   * the likelihood of an increase in pricing and volume pressure
     from payers over the medium term,

   * the fact that anticipated synergies should only materialize
     gradually over the long term,

   * competitive disadvantages due to the company's small size,
     and

   * the possibility that further acquisitions could slow down
     improvement in operating metrics.

The outlook for all ratings is stable.

Moody's assigned these ratings:

   -- B1 to the $30 million guaranteed senior secured revolver of
      Encore Medical IHC;

   -- B1 to the $150 million term loan B of Encore Medical IHC;

   -- Caa1 to the $165 million senior subordinated notes of Encore
      Medical IHC;

   -- B2 senior implied rating for Encore Medical IHC; and

   -- Caa2 senior unsecured issuer rating for Encore Medical
      Corporation.

Moody's withdrew these ratings:

   -- B1 on EMPI's $25 million guaranteed senior secured revolving
      credit;

   -- B1 on EMPI's senior guaranteed senior secured term loan A

   -- B1 on EMPI's $125 million guaranteed senior secured term
      loan B;

   -- B1 on EMPI's senior implied rating; and

   -- B3 on EMPI's issuer rating.

Encore is planning to acquire EMPI, using $150 million in a new
term loan B, $165 million in new senior subordinated notes and
$40 million in cash on hand to finance a $175 million cash
purchase of EMPI's equity, pay $16 million in transaction costs
and pay off $166 million in existing debt.

The stable outlook reflects the expectation that bank facility
covenants (which have not been determined at this stage) should
give Encore sufficient financial flexibility and that the company
is not planning to make another acquisition shortly after EMPI
that would lead to an increase in debt post-closing.  If these
expectations were not realized, the ratings could become under
pressure.  The ratings could be upgraded if over time Encore
achieved a sustained level of free cash flow to debt in excess of
10%.

The ratings are supported by the strong demographic fundamentals
of the medical device industry.  Post-transaction, Encore will
sell two types of medical devices: surgical implants and
orthopedic rehabilitation devices.  On a consolidated basis,
volume growth should be in the mid-single digits, driven by the
increasing number of "baby boomers" entering or in middle age, and
their increased need for orthopedic devices and services because
of their higher degree of physical activity.  Volume growth should
be also driven by innovation in the sector, which should continue
to create more efficient cures.

Also supporting the ratings is the company's strong market
position (#1 in TENS, #1 in NMES) in the electrotherapy category
that should represent a strong proportion of total sales on a
proforma basis. While the company's market position in surgical
implants (knees, hips and shoulders) will be small (approximately
1%), this segment should represent approximately 15% of total
sales.

By its purchase of EMPI, Encore will acquire a sales force and
sales support staff of 280, selling rehabilitation products at
approximately 70% of the physical therapy clinics in the US.  In
the rehabilitation products segment, Moody's understands that the
company will leverage the sales force to sell existing Encore
rehabilitation products.  In the surgical implants segment, the
company's strategy is to hire more sales representatives with
established relationships with orthopedic surgeons.  Moody's
expects that this strategy could add a few percentage points to
volume growth.

EMPI's proprietary third-party billing system includes 40,000
payer profiles and covers 110 million patient lives, reducing
payment cycles and strengthening relationships with national rehab
providers.  By tracking patients through their treatment cycle, it
currently allows EMPI to increase its sales.  Encore should be
able to leverage this system for some of its own products.

At the same time, the ratings take into account expected rising
pricing pressure in the medical devices sector.  While pricing
pressure should be less acute than in other sectors of the
healthcare industry, these features of the Medicare Modernization
Act of 2003 could have an impact on Encore's pricing flexibility:

   -- Freeze in payments from 2004 through 2008 for durable
      medical equipment, such as TENS and NMES;

   -- Freeze in payments for orthotic devices from 2004 to 2006.

   -- Possible introduction of competitive bidding for off-the-            
      shelf orthotic devices, phased in beginning in 2007.
      Competitive bidding will replace the fee schedule approach
      currently used and could reduce the number of suppliers.

While these changes to Medicare should directly affect the company
only for up to 5% of sales, they could also affect its pricing
flexibility by inspiring similar modifications to reimbursement by
private payer plans.

The ratings also take into account the small size of the company,
which place it at a disadvantage in research and development, as
larger medical devices companies who are in the surgical implant
area should be in a better position to sustain the pace of new
product introductions required to maintain competitiveness in the
industry.  Also, Moody's does not expect that the transaction
should lead to significant synergy-driven cost reductions or
cross-selling opportunities.

Finally, the ratings recognize the expectation that Encore's
financial policy could include further acquisitions in the medical
device sector, adding to integration risk and possibly slowing
down an improvement in financial flexibility.

Besides qualitative factors, the B2 senior implied rating reflects
the low level of the ratio of free cash flow to debt, expected to
be in the single digits over the medium term, partly offset by the
financial flexibility afforded the company by the lack of
significant minimum mandatory debt repayments until maturity under
the term loan B structure.

The notching up for the senior secured facilities from the senior
implied rating reflects the substantial asset coverage enjoyed by
bank lenders.

The notching down for the subordinated bonds from the senior
implied rating reflects the low coverage of principal by the
estimated residual value of assets, as well as the subordinated
status of the bond in right of payment.

Encore and EMPI are diversified orthopedic companies that design,
manufacture, market and distribute a range of orthopedic devices
for the orthopedic industry. For the twelve months ended June 30,
2004, combined net sales were approximately $270 million. Encore's
headquarters are located in Austin, Texas.


FINOVA CAPITAL: Gets Thaxton's Support to Exclude Fraud Issues
--------------------------------------------------------------
On April 4, 2001, The Thaxton Group and its subsidiaries executed  
a loan agreement and agreed to become jointly and severally  
liable to FINOVA Capital Corporation for all of its claims under  
the Loan Agreement.  Between February 1998 and September 2003,  
Thaxton issued subordinated notes to certain entities and  
individuals pursuant an Indenture dated as of February 17, 1998,  
with The Bank of New York, as trustee.  There are $121,000,000 in  
Notes currently outstanding, which are contractually subordinate  
to FINOVA Capital's claim, which total $110,000,000, and to the  
claims of all other Thaxton creditors.  Thaxton's subsidiaries  
are not obligors on the Notes, and thus are not contractually  
liable for the Noteholders' claims.

John H. Knight, Esq., at Richards, Layton & Finger, P.A., in  
Wilmington, Delaware, relates that the agreed-upon debt structure  
has created a challenge for the Thaxton Noteholders.  Thaxton has  
only $21,000,000 in assets, while its subsidiaries have  
$170,000,000 in assets.  Thus, the Noteholders are subordinate to  
virtually all claims with respect to substantially all of Thaxton  
and its subsidiaries' aggregate assets.

The Thaxton Noteholders, working with or through the Official  
Committee of Unsecured Creditors of Thaxton, initiated various  
attacks to improve their position at the expense of FINOVA  
Capital and other creditors:

   (1) The Thaxton Committee commenced an adversary proceeding
       against FINOVA Capital based substantially on fraud and
       fraudulent conveyance theories.  The Committee wants
       FINOVA Capital's claim and liens declared void and
       subordinated to the claims of all other Thaxton creditors;

   (2) Groups of Noteholders brought five class actions against
       FINOVA Capital and other third parties in four different
       states for alleged securities violations and certain
       related Fraud Issues pertaining to the sale of the Notes;
       and

   (3) A group of Noteholders filed a proof of claim against
       Thaxton and its subsidiaries for fraud and unjust
       enrichment, asserting that the subsidiaries are also
       liable to the Noteholders.

The Thaxton Committee's adversary proceeding and the class
actions are pending before the United States District Court for
the Western Division of South Carolina by designation from the
Panel for Multi-District Litigation.

Thaxton's plan of reorganization relies on a March 24, 2004  
request by the Thaxton Committee to substantively consolidate  
Thaxton and its subsidiaries.  In August 2004, Thaxton also  
sought substantive consolidation on grounds different from those  
proposed by the Thaxton Committee.

The U.S. Bankruptcy Court for the District of Delaware, which  
oversees Thaxton's Chapter 11 proceedings, has scheduled an  
evidentiary hearing on September 14 and 15, 2004, regarding the  
Substantively Consolidation Issues.  The Thaxton Noteholders have  
indicated their intention to advance their fraud allegations at  
the Substantive Consolidation Trial.

Mr. Knight contends that the Fraud Issues should not be  
considered at the Substantive Consolidation Trial.  No evidence  
relating to these issues would be relevant.

Substantive Consolidation is a remedy that is only available on a  
showing of these two factors:

   * The creditors were led to reasonably expect that Thaxton's
     and its subsidiaries' assets would be pooled to satisfy each
     of their claims; or

   * Thaxton's and its subsidiaries' assets are hopelessly
     entangled.

Mr. Knight notes that the Fraud Issues have nothing to do with  
the two factors, and are thus, clearly irrelevant.  Moreover, it  
would be substantively prejudicial and inappropriate for FINOVA  
Capital to be compelled to conduct discovery and defend against  
the Fraud Issues at the Substantive Consolidation Trial.

Mr. Knight asserts that the Thaxton Committee is merely  
attempting to use the Substantive Consolidation Trial to gain an  
unfair and improper advantage by having the Thaxton Bankruptcy  
Court decide issues that are already pending elsewhere and  
subject of intensive litigation among the Thaxton Committee, the  
Noteholders, and FINOVA Capital.

In the interest of fairness and efficiency, FINOVA Capital asks  
the Thaxton Bankruptcy Court to exclude the Fraud Issues at the  
Substantive Consolidation Trial.

If the Court were to hear evidence regarding Fraud Issues at the  
Trial, FINOVA Capital will require:

   (a) a lengthy extension of time of the scheduled hearing dates
       to permit for the extensive discovery that will be
       required to properly adjudicate the Fraud Issues; and

   (b) much more than the two days presently allocated for the
       presentation of relevant evidence on the Fraud Issues.

                    Thaxton Committee Objects

Michael L. Vild, Esq., at The Bayard Firm, in Wilmington,  
Delaware, relates that FINOVA Capital's request is another  
attempt to avoid responding to the Thaxton Committee's proposal  
for Substantive Consolidation.  As early as May 7, 2004, the  
Thaxton Bankruptcy Court admonished FINOVA Capital to begin  
preparation for a hearing, stating on three previous occasions  
that FINOVA Capital must be prepared to try the issues raised by  
the Committee.  FINOVA Capital had more than adequate time to  
prepare for all the issues raised by the Committee.

FINOVA Capital had asked the Thaxton Bankruptcy Court three times  
before whether it still had to address both Thaxton's and the  
Committee's request for Substantive Consolidation.  The Court on  
all three occasions advised FINOVA Capital that it did.  FINOVA  
Capital did not object to trying the Fraud Issues.

Mr. Vild argues that FINOVA Capital's request is also baseless.   
The Thaxton Bankruptcy Court's decision on Substantive  
Consolidation before another court is not a ground for refusing  
to hear an issue relevant to consolidation, like the possible  
fraud liability of each Thaxton entity to the individual  
noteholders.  In addition, FINOVA Capital has no ground to  
complain about the possibility of issue preclusion in another  
proceeding because FINOVA Capital created the potential for issue  
preclusion.  FINOVA Capital elected to seek withdrawal of the  
reference of the Thaxton Committee's adversary proceeding in  
order to involve multiple trial courts.

The Fraud Issue, Mr. Vild points out, is relevant to the question  
of prejudice, and the trial of the Fraud Issue will neither be  
lengthy nor complicated.  Mr. Vild clarifies that the Thaxton  
Committee has no standing, and does not intend, to establish the  
liability of each Thaxton entity to each Noteholder.  Rather, the  
Committee intends to establish that:

   -- Thaxton's and its subsidiaries' financial statements and
      prospectuses used in the sale of the notes were materially
      false and misleading; and

   -- employees of the Thaxton subsidiaries were given a brochure
      and a script to be used in selling notes that contained
      false and misleading statements.

The Thaxton Committee will argue that the Trial that Thaxton's  
sale of demand notes constituted the taking of deposits, an  
activity limited by law to banks, and, therefore, was inherently  
fraudulent.  Ultimately, the Committee will ask the Thaxton  
Bankruptcy Court to find that a significant possibility exists  
that each Thaxton entity is liable for the sale of the notes and,  
therefore, that Substantive Consolidation would produce a just  
and fair result without forcing the estates to incur the  
substantial expense of litigating the Fraud Issues with the  
Noteholders -- which is what will happen if Substantive  
Consolidation does not occur.

Mr. Vild tells the Thaxton Bankruptcy Court that the effect of  
Substantive Consolidation under the Plan is substantially similar  
to the effect of determining that each Thaxton entity is liable  
to each Noteholder and, therefore, no creditor is prejudiced by  
Substantive Consolidation.  The Committee's proposal does not  
require, and seeks to avoid as unnecessary, the complex and  
expensive litigation FINOVA Capital predicted.

                         Thaxton Responds

Thaxton agrees with FINOVA Capital that its cases can be  
substantively consolidated without touching the Fraud Issues.   
Thaxton believes that the Court can find substantial identity  
based on facts that may be stipulated, but will not be seriously  
disputed or contested at the Trial.

Michael G. Busenkell, Esq., at Morris, Nichols, Arsht & Tunnell,  
in Wilmington, Delaware, cites that Thaxton and its affiliates  
have been operated as a consolidated, as opposed to a  
consolidating, business.  Thus, there has only been one  
consolidated balance sheet for the parties to consider.

Mr. Busenkell also believes that FINOVA Capital cannot show that  
it relied on the separate credit of any Thaxton debtor for its  
outstanding indebtedness.  Moreover, substantive consolidation  
has no effect on FINOVA Capital unless its prepetition conduct  
results in its avoidance of lien and loss of the contractual  
subordination in the Indenture for Thaxton's notes.

Mr. Busenkell maintains that Substantive Consolidation will not  
cause FINOVA Capital cognizable harm, with or without equitable  
subordination.  Moreover, there are great benefits to other  
creditors from elimination of expense, expedition of  
confirmation, elimination of unquantified intercompany claims,  
and improved prospects for a viable reorganized business.

Thaxton remains prepared to try all issues at the Trial, and the  
Bankruptcy Court should go forward as scheduled.  Thaxton,  
however, asserts that the resolution of its proposal for  
Consolidation is likely to be less fact intensive, will avoid the  
Fraud Issues, and will result in a ruling in favor of Substantive  
Consolidation as provided in the Plan.

Headquartered in Scottsdale, Arizona, The Finova Group, Inc.,
provides commercial financing to small and midsized businesses;
other services include factoring, accounts receivable management,
and equipment leasing. The firm has three segments: Commercial
Finance, Specialty Finance, and Capital Markets. FINOVA targets
such markets as transportation, wholesaling, communication, health
care, and manufacturing. Loan write-offs had put the firm on shaky
ground. The Company and its debtor-affiliates and subsidiaries
filed for Chapter 11 protection on March 7, 2001 (U.S. Bankr. Del.
01-00697). Daniel J. DeFranceschi, Esq., at Richards, Layton &
Finger, P.A., represents the Debtors. FINOVA has since emerged
from Chapter 11 bankruptcy. Financial giants Berkshire Hathaway
and Leucadia National Corporation (together doing business as
Berkadia) own FINOVA through the almost $6 billion lent to the
commercial finance company. (Finova Bankruptcy News, Issue No. 51;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


FOSTER WHEELER: Wins Petrochemicals Expansion Pact in Saudi Arabia
------------------------------------------------------------------
Foster Wheeler Energy Limited, a UK subsidiary of Foster Wheeler
Ltd. (OTCBB:FWLRF), has been awarded a program management services
contract by Eastern Petrochemical Company (SHARQ) for the
expansion of SHARQ's existing petrochemicals complex known as the
SHARQ 3rd Expansion Project to be located at Jubail Industrial
City, Jubail, Kingdom of Saudi Arabia. SHARQ is a joint venture
between Saudi Basic Industries Corporation (SABIC) and Saudi
Petrochemical Development Corp. The terms of the award were not
disclosed. The project will be included in third-quarter bookings.

"We are delighted to be involved in this major investment program
to be undertaken by Eastern Petrochemical Company," said Steve
Davies, chairman and chief executive officer, Foster Wheeler
Energy Limited. "This is yet another significant win for Foster
Wheeler and continues our recent success for similar work with our
clients in the Kingdom. We are already working as project
management consultant with SABIC for its new grassroots
petrochemicals facility to be built at Yanbu Industrial City. This
award further underscores the quality of our technical and project
management expertise and demonstrates Foster Wheeler's
competitiveness in the market- place."

"The selection of Foster Wheeler as Program Management Contractor
underlines our developing relationship with Foster Wheeler,"
commented Mohammad Al-Jabri, president, Eastern Petrochemical
Company. "We are confident that this project will benefit
significantly from the similar work Foster Wheeler is executing
for SABIC's Yanbu facility."

The expansion of the existing petrochemicals complex will include
the following units: a grassroots 1,300 kilo tonnes per annum
(kta) ethylene cracker, a 800 kta polyethylene plant, a 600 kta
ethylene glycol plant and associated offsites and utilities.

Foster Wheeler's scope of work as Program Management Contractor
(PMC) will include the preparation of front-end engineering design
(FEED) and preparation and issue of invitations to bid for each of
the process units, including bid evaluation and award
recommendations for engineering, procurement and construction
(EPC) contractors. Foster Wheeler will also manage all EPC
contractors and provide the overall management, coordination and
control of all phases of the program. Mechanical completion is
expected in early 2008.

                        About the Company

Foster Wheeler, Ltd., is a global company offering, through its
subsidiaries, a broad range of design, engineering,
construction, manufacturing, project development and management,
research, plant operation and environmental services.

At June 25, 2004, Foster Wheeler Ltd.'s balance sheet showed an
$856,601,000 stockholders' deficit, compared to an $872,440,000
deficit at December 26, 2003.


G-FORCE CDO: Fitch Puts Low-B Ratings on $96M Class G & H Notes  
---------------------------------------------------------------
Fitch Ratings affirmed 11 classes of notes issued by G-Force CDO
2002-1, Ltd.  These rating actions are effective immediately:

The ratings on these classes have been affirmed:

   -- $150,097,678 class A-1MM notes at 'AAA'/'F1+';
   -- $208,747,000 class A-2 notes at 'AAA';
   -- $31,000,000 class BFL notes at 'AA';
   -- $40,824,000 class BFX notes at 'AA';
   -- $63,924,000 class CFL notes at 'A-',
   -- $30,000,000 class CFX notes at 'A-';
   -- $49,724,000 class D notes at 'BBB+';
   -- $93,924,000 class E notes at 'BBB';
   -- $35,912,000 class F notes at 'BBB-';
   -- $58,012,000 class G notes at 'BB';
   -- $38,675,000 class H notes at 'B'.

The ratings of the class A-1MM, A-2, BFL, and BFX notes address
the likelihood that investors will receive timely payments of
interest, as per the governing documents, as well as the stated
balance of principal by the legal final maturity date.  The
ratings of the class CFL, CFX, D, E, F, G, and class H notes
address 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 legal final
maturity date.

G-Force II is a collateralized debt obligation -- CDO -- that
closed on June 20, 2002.  Fitch reviewed the credit quality of the
individual assets constituting the portfolio.  The CDO is
supported by a static portfolio of 84.9% commercial mortgage-
backed securities and 15.1% commercial mortgage whole loans.  The
portfolio was selected and is monitored by G2 Opportunity GP, LLC.

The rating affirmations reflect the performance of the collateral
and reduction of liabilities.  G-Force II's collateral has
experienced minimal credit migration.  Fitch identified securities
that it expects to realize near term losses; however, those losses
are not expected to differ significantly from Fitch's original
assumptions at closing.  As of the Aug. 25, 2004 payment date, the
class A-1MM notes have paid down $27.9 million since closing.

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


GRACE HOLDINGS: Case Summary & 4 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Grace Holdings II, Ltd.
        620 Federal Boulevard
        Denver, Colorado 80204-3209

Bankruptcy Case No.: 04-30284

Chapter 11 Petition Date: September 16, 2004

Court: District of Colorado (Denver)

Judge: Howard R. Tallman

Debtor's Counsel: Jeffrey Weinman, Esq.
                  Weinman & Associates
                  730 17th Street, Suite 240
                  Denver, CO 80202
                  Tel: 303-572-1010

Total Assets: $62,650

Total Debts:  $4,381,586

Debtor's 4 Largest Unsecured Creditors:

   Entity                                 Claim Amount
   ------                                 ------------
Xcel Energy                                  $8,225

Denver Water                                 $3,991

Qwest Communication                          $3,201

Pinnacol Assurance                           $1,948


GSR MORTGAGE: Fitch Assigns Low-B Ratings to Classes B-4 & B-5
--------------------------------------------------------------
Fitch Ratings has taken rating actions on these GSR Mortgage Loan
Trust certificates:

   Series 2003-1

      -- Classes A1-1, A1-2, A1-3, A2, R, X1, and X2 affirmed at
         'AAA';

      -- Class B-1 upgraded to 'AAA' from 'AA';

      -- Class B-2 upgraded to 'AA' from 'A';

      -- Class B-3 upgraded to 'A' from 'BBB';

      -- Class B-4 upgraded to 'BBB' from 'BB';

      -- Class B-5 upgraded to 'BB' from 'B';

The upgrades reflect an increase in credit enhancement relative to
future loss expectations and affect $13,411,471 of outstanding
certificates.  The affirmations reflect credit enhancement
consistent with future loss expectations and affect $173,161,921
of outstanding certificates.

The current (as of the Aug. 25th distribution) enhancement levels
for all the classes in this transaction have more than doubled
from the original enhancement levels (at closing date of Feb. 27,
2003): senior

   * classes A1-1, A1-2, A1-3, and A2 currently benefit from 7.68%
     subordination provided by the subordinate classes (originally
     2.9%);

   * class B-1 benefits from 5.03% subordination (originally
     1.9%);

   * class B-2 benefits from 2.65% subordination (originally 1%);

   * class B-3 benefits from 1.59% subordination (originally
     0.6%);

   * class B-4 benefits from 1.06% subordination (originally
     0.4%); and

   * class B-5 benefits from 0.53% subordination (originally
     0.2%).

Currently, 29% of the original collateral has paid down, and there
have been no losses in the pool.  There is only one loan, with
$644,601 outstanding, in the 90 or more days delinquency bucket
(0.34% of the pool), and there are no loans in bankruptcy,
foreclosure, or REO.

The mortgage pool consists of prime quality, traditional, and
hybrid adjustable-rate mortgage loans secured by residential
properties on one- to four-family residential properties,
substantially all of which have original terms to maturity of 30
years.


GXS CORP: Weak Performance Cues Moody's to Review Single-B Ratings
------------------------------------------------------------------
Moody's Investors Service placed the debt ratings of GXS
Corporation under review for possible downgrade based on weaker-
than-expected year-to-date operating performance and concerns
about the company's long-term performance levels.  Moody's
cautions that if the current weak performance levels continue, GXS
will be challenged in sustaining appropriate levels of operating
cash flow to maintain existing ratings.

These ratings have been placed on review:

   * Senior implied rating of B1;
   * Senior secured credit facilities rated B1;
   * $105 million FRNs rated B2;
   * $235 million subordinated debt rated B3;
   * Senior unsecured issuer rating of B2.

The review will consider:

     (i) GXS' cost restructuring efforts and the company's ability
         to improve operating margins at current business levels;

    (ii) the outlook for market and competitive issues affecting
         transaction pricing and volume;

   (iii) the potential impact of the termination of its minimum
         purchase commitment with GE in September 2004; and

    (iv) GXS' competitive strengths and revenue mix.

The review will also consider GXS' committed financing
arrangements and its relationship with its sponsors.

Ratings could fall one or two notches if Moody's believes GXS'
cash generation is unlikely to recover within the next 12 to
18 months.  Debt ratings could be confirmed if Moody's sees a high
potential for debt service metrics to return to levels appropriate
for the current rating category.

GXS provides software and services, which enable companies to
exchange data, principally EDI services.  Revenues were
$364 million in 2003.


HAWAIIAN AIRLINES: Boeing Inks Pact on Leases & Bankruptcy Claim
----------------------------------------------------------------
Boeing Capital Corporation has reached an agreement with Hawaiian
Airlines on the restructuring of its long-term leases for 11
Boeing 717-200s and three Boeing 767-300ERs, and on the amount of
Boeing's unsecured claim resulting from Hawaiian's bankruptcy.

Boeing Capital has also reached an agreement to sell its unsecured
claim to RC Aviation LLC. Ranch Capital LLC created RC Aviation,
which is a significant investor in Hawaiian's parent company,
Hawaiian Holdings Inc.

Boeing's agreements with Hawaiian are subject to review and
approval by the U.S. Bankruptcy Court in Honolulu overseeing the
airline's bankruptcy. Court approval will be requested before the
end of September.

These agreements with Hawaiian and RC Aviation are separate from
the reorganization plan jointly proposed by RC Aviation, Hawaiian
Holdings, Hawaiian's trustee, Joshua Gotbaum, and The Official
Committee of Unsecured Creditors.

"We reviewed a number of plans to reorganize Hawaiian Airlines and
found the plan proposed by RC Aviation and the trustee to be a
comprehensive financial solution that strikes a good balance among
the interests of Hawaiian Airlines, Boeing Capital and all other
stakeholders," said Scott Scherer, Boeing Capital's vice president
and general manager -- Aircraft Financial Services. "We look
forward to Hawaiian's prompt emergence from bankruptcy and to
continuing our long and valued relationship with the airline."

Hawaiian Airlines filed for Chapter 11 bankruptcy protection in
March 2003. Earlier this year, Boeing Capital and Corporate
Recovery Group (CRG) filed a plan of reorganization for Hawaiian.
Recently, CRG and Boeing concluded their arrangement, deciding not
to pursue their own reorganization plan.

"CRG was one of the first organizations to realize the value in
Hawaiian Airlines," said Scherer. "We thank CRG for energizing the
bidding process and contributing to a better overall recovery for
all of Hawaiian's creditors."

The bankruptcy court is expected to review and approve a final
reorganization plan later this year. Boeing Capital does not
expect that its transactions with Hawaiian Airlines will have a
material adverse effect on its earnings, cash flows and/or
financial position.

Boeing Capital Corporation is the financing subsidiary of The
Boeing Company. With a $12 billion portfolio, primarily consisting
of Boeing commercial aircraft, Boeing Capital arranges, structures
and provides financial solutions to support the sale of Boeing
products and services. For more information, please visit
http://www.boeing.com/bcc

Headquartered in Honolulu, Hawaii, Hawaiian Airlines, Inc., --
http://hawaiianair.com/-- is a subsidiary of Hawaiian Holdings,  
Inc. (Amex and PCX: HA). The Company provides primarily scheduled
transportation of passengers, cargo and mail. Flights operate
within the South Pacific and to points on the west coast as well
as Las Vegas. Since the appointment of a bankruptcy trustee in
May 2003, Hawaiian Holdings has had no involvement in the
management of Hawaiian Airlines and has had limited access to
information concerning the airline. The Company filed for chapter
11 protection on March 21, 2003 (Bankr. D. Hawaii Case No.
03-00817). Joshua Gotbaum serves as the chapter 11 trustee for
Hawaiian Airlines, Inc. Mr. Gotbaum is represented by Tom E.
Roesser, Esq., and Katherine G. Leonard at Carlsmith Ball LLP and
Bruce Bennett, Esq., Sidney P. Levinson, Esq., Joshua D. Morse,
Esq., and John L. Jones, II, Esq., at Hennigan, Bennett & Dorman
LLP.


HARRAH'S ENTERTAINMENT: Subsidiary Launches Sr. Debt Offering
-------------------------------------------------------------
Harrah's Operating Company, Inc., a subsidiary of Harrah's
Entertainment, Inc. (NYSE: HET), commences an offer to exchange
any and all of its outstanding $750 million of unsecured 5.50%
Senior Notes due 2010 issued in a private-placement sale in June
2004.

The exchange offer expires at 5 p.m. New York City time on
Oct. 15, 2004, unless extended.  The exchange notes will be
registered under the Securities Act of 1933 and will not be
subject to transfer restrictions, registration rights and
provisions providing for an increase in the interest rate
applicable to the private notes.

The exchange notes, which mature July 1, 2010, are unsecured
senior obligations of Harrah's Operating Company and are
unconditionally guaranteed by Harrah's Entertainment.

This announcement is not an offer to exchange or a solicitation of
an offer to exchange with respect to the old notes.  The exchange
offer is being made solely by the prospectus dated September 16,
2004, and is subject to the terms and conditions stated therein.

Founded 66 years ago, Harrah's Entertainment, Inc. owns or manages
through various subsidiaries 28 casinos in the United States,
primarily under the Harrah's, Rio, Showboat, Horseshoe and
Harvey's brand names. Harrah's Entertainment is focused on
building loyalty and value with its valued customers through a
unique combination of great service, excellent products,
unsurpassed distribution, operational excellence and technology
leadership.

                           *     *     *

As reported in the Troubled Company Reporter on July 19, 2004,
Fitch Ratings has affirmed the following long-term debt ratings of
Harrah's Entertainment and placed the long-term ratings of Caesars
Entertainment on Rating Watch Positive.

   HET

      --Senior secured debt 'BBB-';
      --Senior subordinated debt 'BB+'.

   CZR

      --Senior unsecured debt 'BB+';
      --Senior subordinated debt 'BB-'.

The action follows the July 15, 2004 announcement that HET has
reached an agreement to purchase CZR for $9.44 billion comprised
of $1.8 billion cash, 66.3 million shares of HET common stock
($3.3 billion), and the assumption of $4.3 billion in debt. This
represents an 8.4 times (x) multiple of CZR's estimated 2004
EBITDA of $1.1 billion. One third of the purchase price will be
paid in cash and two-thirds in stock. The combined entity will
have the capacity to begin reducing debt from free cash flow and
asset sales, with the pace of debt reduction contingent on the
level of discretionary spending and timing of asset sales. Fitch's
Positive Rating Watch of CZR is expected to be resolved by
successful completion of the transaction. The rating(s)/ and of
outlook would be adversely affected if HET is unable to reduce
debt in a timely manner or chooses to pursue additional large-
scale debt-financed acquisitions and/or growth projects.

From a credit perspective, the transaction can be adequately
absorbed within HET's existing rating category given the
significant level of equity in the transaction and steady free
cash flow produced by both entities. On a pro forma basis, Fitch
estimates the combined entity would produce leverage of 4.5x -
5.0x at closing, depending on the level of asset sales. Following
the merger, leverage would be expected to fall below 4.0x within
12-18 months of closing. Discretionary capex is expected to remain
heavy through 2005, but fall off in 2006, producing $600-$700
million in free cash flow. Fitch expects share repurchase activity
to be limited. While initial leverage is considerable for this
rating category, Fitch notes that this is consistent with HET's
historic capital structure policies with rapid improvement in
leverage following acquisition-related debt increases. Management
reiterated this commitment on a conference call this morning.
Fitch acknowledges the strong and stable discretionary free cash
flow of both companies, and HET's solid track record of
integrating acquisitions.

Strategically this acquisition allows HET to establish a stronger
presence on the Las Vegas Strip, and reduces exposure to the more
volatile regulatory environments of regional riverboat markets.
While HET had previously expressed interest in building or buying
discrete property on the Strip, the purchase will allow HET to
immediately take advantage of currently strong Las Vegas
fundamentals in a more meaningful way. CZR's Las Vegas portfolio
should also allow HET to capture Total Rewards members who are
bypassing HET's current offerings in Las Vegas in favor of
alternative properties. Caesars' four prominent Strip properties
include Caesars, Paris, Bally's and Flamingo, which are situated
at one of the busiest intersections at the center of the Strip. In
addition, HET should be able to improve same store sales and
efficiency at CZR properties by implementing its industry-leading
player tracking systems and loyalty programs. Returns on CZR's
heavy capital investment program over the last several years have
been disappointing, and upside exists in better asset utilization.

Similarity between the regional portfolio of assets may present
some obstacles from a strategic and/or regulatory standpoint that
may necessitate asset sales. Extensive overlap occurs in Tahoe and
Tunica, both markets in which achieving attractive prices could
prove difficult. In Indiana, the legal limit of two licenses would
force the sale of one of three licenses the combined company would
own. In Atlantic City, the FTC or New Jersey regulatory body may
view HET's ownership of five of the 12 properties (50% of the
market revenues) negatively and may order divestiture. In
addition, while the acquisition allows HET to leverage growth of
the Las Vegas market, the same opportunity does not exist in the
regional markets where same store growth potential is limited.
This includes Atlantic City which is still absorbing the addition
of The Borgata and faces the new competitive threat of legalized
gambling in Pennsylvania. Finally, as HET's second large-scale
acquisition in the past 12 months, synergies may be delayed. Over
the next 12-18 months, Fitch would expect HET to focus on
integrating current operations as opposed to seeking new growth
opportunities.


HEILIG-MEYERS: Files Reorganization Plan & Disclosure Statement
---------------------------------------------------------------
Heilig-Meyers Company and its wholly owned subsidiaries, Heilig-
Meyers Furniture Company, Heilig-Meyers Furniture West, Inc., HMY
Star, Inc., HMY RoomStore, Inc., and MacSaver Financial Services,
Inc., and the Official Committee of Unsecured Creditors have filed
a Joint Plan of Reorganization and Disclosure Statement with the
U.S. Bankruptcy Court for the Eastern District of Virginia. The
Bankruptcy Court will conduct a hearing for the purpose of making
a determination as to the adequacy of the Disclosure Statement.
Once the Bankruptcy Court approves the Disclosure Statement, the
Companies will ask creditors to vote in favor or against the Plan.

Under the terms of the proposed Plan, pre-petition creditors will
receive beneficial interests in a Liquidation Trust in settlement
of their claims. The proposed Plan contemplates that only one of
the Companies, HMY RoomStore, Inc., will emerge as a reorganized
business enterprise.  All other assets will be transferred to a
Liquidation Trust to be converted to cash over time for
distribution to the beneficiaries of the Liquidation Trust.
Additionally, the Reorganized RoomStore common stock will be
transferred to the Liquidation Trust for the benefit of the
holders of allowed unsecured claims under the Plan. The holders of
existing common stock of Heilig-Meyers Company will receive no
distribution under the proposed Plan and will have no interest in
the Liquidation Trust, and it is anticipated that the existing
shares of common stock will be cancelled. Reorganized RoomStore
will continue to operate stores under The RoomStore name.

The RoomStore offers a wide selection of professionally
coordinated home furnishings in complete room packages at value-
oriented prices. The RoomStore operates 64 stores located in
Pennsylvania, Maryland, Virginia, North Carolina, South Carolina
and Texas.

Heilig-Meyers Company filed for chapter 11 protection on Aug. 16,
2000 (Bankr. E.D. Va. Case No. 00-34533), reporting $1.3 billion
in assets and $839 million in liabilities. When the Company filed
for bankruptcy protection it operated hundreds of retail stores in
more than half of the 50 states. In April 2001, the company shut
down its Heilig-Meyers business format. In June 2001, the Debtors
sold its Homemakers chain to Rhodes, Inc. GOB sales have been
concluded and the Debtors are liquidating their remaining Heilig-
Meyers assets. The Debtors are working to effect a restructuring
of their RoomStore business operations with the expectation of
bringing that business out of bankruptcy as a reorganized company.
Bruce H. Matson, Esq., Troy Savenko, Esq., and Katherine Macaulay
Mueller, Esq., at LeClair Ryan, P.C., in Richmond, Va., represent
the Debtors.


HOLLINGER INTERNATIONAL: Half-Year Reports Not Yet Filed
--------------------------------------------------------
Hollinger International, Inc., provided an update in accordance
with Ontario Securities Commission Policy 57-603 Defaults by
Reporting Issuers in Complying with Financial Statement Filing
Requirements.  Certain management and other insiders of the
Company are currently subject to a cease trade order in respect of
securities of the Company issued by the OSC on June 1, 2004.  

The cease trade order results from the delay in filing the
Company's annual financial statements for the year ended December
31, 2003 (and related MD&A), its interim financial statements for
the three months ended March 31, 2004 (and related MD&A) and its
Annual Information Form 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 Company is
required to make pursuant to Ontario securities laws.

The Company previously announced on July 20, 2004 that it did not
anticipate that it would be in a position to file its interim
financial statements (and related MD&A) for the six-month period
ended June 30, 2004 by the filing date required by applicable
Canadian securities legislation, since it was not expected that
the report of the Special Committee of the board of directors of
the Company, established to investigate allegations raised by
certain of the Company's shareholders, would be available
sufficiently in advance of that time.  

The Company confirms that those interim financial statements (and
related MD&A) have not been so filed.

Hollinger International Inc. is a newspaper publisher with
English-language newspapers in North America 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, as well as a portfolio
of new media investments and a variety of other assets.


HOLLINGER INT'L: Needs Time to Review Special Committee Report
--------------------------------------------------------------
As reported in the Troubled Company Reporter on September 1, 2004,
Hollinger International, Inc.'s (NYSE: HLR) Special Committee of
its Board of Directors filed with the U.S. District Court for the
Northern District of Illinois its Report of findings of its
investigation into allegations raised by certain of the Company's
shareholders and other matters uncovered in the course of the
Special Committee's work.

A full-text copy of the 513-page Report is available at no charge
at:

   http://www.sec.gov/Archives/edgar/data/868512/000095012304010413/y01437exv99w2.htm

The Company said that the Special Committee filed the Report with
the Court consistent with the terms of the Consent Judgment
entered into by the Company and the U.S. Securities and Exchange
Commission on January 16, 2004.  As previously announced, the
Special Committee has filed a lawsuit on the Company's behalf in
the Court against defendants including certain directors and
former directors and officers, as well as the Company's
controlling shareholder and its affiliated companies.

Gordon A. Paris, Interim Chairman and Chief Executive Officer and
Chairman of the Special Committee, said, "The Report . . . is the
result of extensive investigation and analysis by the Special
Committee and its advisors.  It is an important step forward in
our pursuit of restitution for funds and assets inappropriately
taken from the Company's coffers and in our efforts to
significantly improve corporate governance at Hollinger
International."

The Special Committee's work, including the retention of Richard
C. Breeden & Co. and O'Melveny & Myers LLP, will continue through
the conclusion of the litigation based on its investigation.

The Company continues to believe that it needs additional time to
review the report of the Special Committee and to assess, together
with the auditors of the Company, its impact, if any, on the
results of operations of the Company before the Company can
complete and file the financial statements (and related MD&As) and
the AIF in question.  The Company will continue to provide bi-
weekly updates, as contemplated by the OSC Policy, until the
financial statements (and related MD&As) and AIF have been filed.

Hollinger International Inc. is a newspaper publisher with
English-language newspapers in North America 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, as well as a portfolio
of new media investments and a variety of other assets.


ICG COMMS: Sets Oct. 15 Stockholders Meeting to Vote on Merger
--------------------------------------------------------------
ICG Communications, Inc. (OTC: ICGC) will hold a special meeting
of its stockholders on October 15, 2004, at the Sheraton Denver
Tech Center Hotel. The purpose of the meeting is to seek
stockholder approval of ICG's merger with MCCC ICG Holdings LLC, a
joint venture between Columbia Capital and M/C Venture Partners,
which was announced by ICG on July 19, 2004. Holders of record of
ICG's common stock as of close of business on September 13, 2004,
are entitled to vote at the meeting. ICG intends to mail a
definitive proxy statement to its shareholders and file it with
the Securities Exchange Commission promptly. In addition,
consummation of the merger remains subject to regulatory approvals
and other conditions.

ICG Communications, Inc., through its subsidiaries, is a business
communications company that specializes in converged voice and
data services. ICG has a national footprint and metropolitan fiber
serving 25 markets. ICG products and services include regulated
and unregulated services, such as voice and Internet Protocol
solutions, including VoicePipe(TM), voice services, dedicated
Internet access, and private line transport services. ICG provides
corporate customers and other carriers with flexible and reliable
solutions. For more information about ICG, visit the company's Web
site at http://www.icgcom.com/

                           *     *     *

In its Form 10-Q for the quarterly period ended June 30, 2004,
filed with the Securities and Exchange Commission, ICG
Communications reports a decline of revenues and significant
erosion of cash reserves and expects to continue to generate
operating losses raising substantial doubt on its ability to
continue as a going concern. The Company has encountered
difficulties in obtaining third party financing on commercially
reasonable terms. Based on its extensive efforts since February
2004 to locate a strategic partner, the Company does not believe
there is likely to be any transaction proposed as an alternative
to a Merger between ICG and MCCC ICG Holdings LLC, a joint venture
between Columbia Capital and M/C Venture Partners. Based on its
negative cash flow, its liquidity and its historical difficulties
in obtaining third party financing, the Company will very likely
need to file for bankruptcy protection and secure debtor-in-
possession financing if the Merger is not approved by its
stockholders and completed.

ICG Communications, Inc., and its debtor-affiliates filed for
chapter 11 protection on Nov. 14, 2000 (Bankr. Del. Case Nos. 00-
04238 through 00-04263) and emerged under a confirmed chapter 11
plan on October 10, 2002.  David S. Kurtz, Esq., and Gregg M.
Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom L.L.P.,
represented the Debtors in their restructuring.  


INTEGRATED HEALTH: Rotech Registers Common Stock with SEC
---------------------------------------------------------
Rotech Healthcare Inc. (Pink Sheets:ROHI) filed with the
Securities and Exchange Commission a registration statement on
Form 8-A to register its Common Stock pursuant to Section 12(g) of
the Securities Exchange Act of 1934. The result of this filing is
that the Company will be fully subject to the regulations
affecting companies with a class of securities registered under
the Exchange Act.

Philip L. Carter, President and Chief Executive Officer commented,
"We believe this is a useful step in the maturation of the Company
and will provide shareholders with additional benefits such as
information regarding the holdings of certain shareholders.
Registration under the Exchange Act is a prerequisite for listing
on a securities exchange or automated quotation system. The
Company may seek a listing some time in the future, however, the
timing for such a listing or what exchange the Company will seek
to list on is yet to be determined," he said.

The Company also filed with the SEC a registration statement on
Form S-8 under the Securities Act of 1933 registering 4,025,000
shares of common stock issuable under the Company's Common Stock
Option Plan and 200,000 shares of common stock issuable under the
recently adopted Nonemployee Director Restricted Stock Plan.

                  OIG Report/Medicare Reimbursement

The Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 requires Medicare payment for certain home medical
equipment products, including oxygen and oxygen equipment, to be
reduced in 2005 by the percentage difference between 2002 Medicare
payment amounts for those products and the median amounts paid by
Federal Employees Health Benefits Plans. The 2002 FEHB amounts are
to be derived from reports issued by the Office of Inspector
General of the Department of Health and Human Services. To address
the MMA provision, the OIG conducted studies on home oxygen
equipment payments and has now released its report on 2002 payment
rates. Found on the OIG's website -- http://oig.hhs.gov/-- the  
Report provides, among other things, that median payment amounts
for 2002 FEHB Plans were approximately ten (10) to twenty (20)
percent lower than the median Medicare fee schedule allowances for
stationary and portable equipment. The Report recommends that the
Centers for Medicare & Medicaid Services use the pricing
information contained in such report to reduce Medicare payments
in 2005 and the Report states that CMS has indicated its support
for the findings and recommendations. We expect that any payment
reductions determined by CMS would be incorporated into the 2005
fee schedule for the product codes at issue.

Mr. Carter further commented, "If the proposed reductions in the
Medicare fee schedules for home oxygen equipment together with the
additional reimbursement reductions mandated by the MMA in 2005
for other home medical equipment (excluding inhalation drugs) had
been implemented in 2004, we believe it would have resulted in a
reduction in 2004 projected annualized revenue in the range of
approximately $30 million to $35 million."

The Company has discussed the implementation of MMA in its
previously filed periodic reports. Many uncertainties remain as to
the final outcome of reimbursement for inhalation drugs in 2005,
including the amount of reduction in reimbursement and whether CMS
will increase fees for services associated with dispensing such
drugs. The resolution of all reimbursement uncertainties,
particularly those uncertainties relating to inhalation drug
reimbursement in 2005, will determine whether or not it is
economically feasible for the Company to continue to provide
inhalation drugs in 2005. In the event that the Company does not
continue to provide inhalation drugs during 2005, there will be a
material adverse effect on the Company's revenues and
profitability.

Headquartered in Owings Mills, Maryland, Integrated Health
Services, Inc. -- http://www.ihs-inc.com/-- IHS operates local
and regional networks that provide post-acute care from 1,500
locations in 47 states. The Company filed for chapter 11
protection on February 2, 2000 (Bankr. Del. Case No. 00-00389).
Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D.
Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP,
represent the Debtors in their restructuring efforts. On
September 30, 1999, the Debtors listed $3,595,614,000 in
consolidated assets and $4,123,876,000 in consolidated debts.


INTEGRATED HEALTH: Wants Until Jan. 6 to Object to Claims
---------------------------------------------------------
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in
Wilmington, Delaware, tells Judge Walrath that as of
September 1, 2004, IHS Liquidating, LLC's claims resolution
efforts are focused on prosecuting the remaining omnibus claims
objections and reviewing all unresolved unliquidated claims to
facilitate the disallowance, liquidation, and estimation of these
claims in the near future.  Although IHS Liquidating believes that
it has identified substantially all claims which could be made
subject to a future objection, IHS Liquidating finds it prudent to
extend the deadline to file objections to all administrative and
other claims filed in their Chapter 11 cases to avoid a
circumstance where objectionable claims are inadvertently allowed.

Accordingly, IHS Liquidating asks the Court to further extend the
Claims Objection Deadline until January 6, 2005, without prejudice
to its right to seek additional extensions of time to object to
the claims.

IHS Liquidating believes that the extension will provide a much-
needed time to effectively evaluate all claims, prepare and file
additional objections to claims and, where possible, attempt to
consensually resolve disputed claims.

The Court will convene a hearing on October 6, 2004, to consider
IHS Liquidating's request.  By application of Del.Bankr.LR
9006-2, IHS Liquidating's Claims Objection Deadline is
automatically extended through the conclusion of that hearing.

Headquartered in Owings Mills, Maryland, Integrated Health
Services, Inc. -- http://www.ihs-inc.com/-- IHS operates local  
and regional networks that provide post-acute care from 1,500
locations in 47 states. The Company filed for chapter 11
protection on February 2, 2000 (Bankr. Del. Case No. 00-00389).
Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D.
Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP,
represent the Debtors in their restructuring efforts.  On
September 30, 1999, the Debtors listed $3,595,614,000 in
consolidated assets and $4,123,876,000 in consolidated debts.
(Integrated Health Bankruptcy News, Issue No. 81; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


INTERMET CORP: Projects $19+ Million Third Quarter Net Loss
-----------------------------------------------------------
INTERMET Corporation (Nasdaq: INMT) expects to report a
third-quarter 2004 net loss of between $19 million and
$24 million. For the nine months ending September 30, 2004,
INTERMET expects a net loss of between $33.0 million and $38.0
million. Top-line growth has remained positive, with
$197.8 million in revenues projected for the quarter and
$625.6 million for the nine months ending September 30, 2004,
compared with $172.7 million for the third quarter of last year
and $547.9 million for the first nine months of last year.
Increased revenues, however, have not been enough to offset the
unprecedented increase in scrap-steel and other raw-material
prices and operational issues at certain North American plants.

The primary contributor to INTERMET's expected losses has been and
remains raw material costs in North America and Europe, especially
for scrap steel. INTERMET's cost of scrap steel has increased from
an average of approximately $160 per ton at the beginning of 2003,
and approximately $210 per ton at the end of 2003, to
approximately $395 per ton at the end of August 2004. INTERMET
currently estimates that these increased costs, which are net of
pass-through recovery from customers, are approximately
$11.0 million higher for the third quarter of this year than they
were for the third quarter of last year, and approximately
$24.0 million higher for the nine months ending September 30,
2004, than for the same nine-month period last year. Additional
factors contributing to INTERMET's expected losses include other
steel-containing material costs of $1.7 million during the
quarter, productivity and quality issues at certain light-metals
plants in North America that are expected to affect third-quarter
results adversely by $2.6 million, as well as $1.3 million in
costs incurred during the quarter related to the closing of the
Company's Havana, Illinois, foundry early in the year, all on a
year-over-year basis. In addition, the Company expects that it
will incur further asset impairment and goodwill write-offs in the
third quarter, the amount of which cannot be determined at this
time.

The projected third-quarter loss is expected to cause INTERMET to
be in default on various financial covenants contained in its
credit agreement. That credit agreement provides for a $90 million
revolving loan facility and a $120 million term loan, secured by
all of the Company's domestic assets and pledges of the stock of
its foreign subsidiaries. Specifically, the Company expects that
its leverage at September 30, 2004, will exceed the levels
permitted by the credit agreement and that its interest coverage
also will be inadequate. Total debt at September 30, 2004, is
expected to be approximately $395 million.

Although none of the lenders has at this time refused to advance
further funds under the credit agreement, INTERMET has determined
that it is unable to access its revolving loan facility absent a
waiver by the lenders of conditions to borrowing. Therefore,
INTERMET has engaged its lenders in discussions concerning a
waiver that would permit continued access to the revolving loan
facility. Although no agreement has been reached at this time, the
agent bank for the lenders has indicated that it is prepared to
recommend a waiver of the expected covenant defaults through early
December, upon terms to be negotiated, coupled with continued,
though limited, access by the Company to its revolving loan
facility. The Company currently anticipates that such a waiver, if
granted, would be finalized next week.

Although the Company's cash needs are difficult to predict with
precision day-to-day, the Company believes that the continued
funding contemplated by the proposed waiver, together with cash on
hand and generated from operations, would be sufficient to fund
operations at least through the end of September 2004, assuming
normal operations and absent contraction in trade credit. During
the balance of September, the Company will continue to negotiate
with its lenders to obtain additional funding after the end of
September. If the waiver and short-term funding proposal now
pending with the lenders is not obtained, then, on September 30,
2004, the Company would be in default under its credit agreement.
This would entitle a majority in interest of the Company's lenders
to accelerate the loans, requiring immediate repayment in full.
Such an acceleration would, in turn, entitle the holders of the
Company's $175 million principal amount of senior notes to
accelerate the notes and demand immediate repayment. If repayment
of the loans or of the notes is accelerated, or if at any time the
Company's cash needs exceed available funding, then the Company
would be forced to pursue a more aggressive restructuring
strategy, which could include voluntary bankruptcy proceedings.

The Company has engaged the financial advisory firm of Conway
MacKenzie & Dunleavy to help develop a comprehensive restructuring
plan. Conway MacKenzie & Dunleavy is also assisting INTERMET in
the implementation of immediate and broad measures to address its
current liquidity and credit constraints as well as its long-term
debt and equity structure. The Company is also evaluating those of
its manufacturing facilities that are under-performing, with a
goal of further capacity rationalization.

Although challenged by current circumstances, INTERMET's prospects
are bolstered by the Company's important position in the
automotive industry. The Company believes itself to be unmatched
in material and process diversity within its industry sector. Its
historic focus on safety-critical parts has led to many industry-
leading positions, including cast-metal steering knuckles, control
arms and brake components.

                           About INTERMET

With headquarters in Troy, Michigan, INTERMET Corporation is a
manufacturer of powertrain, chassis/suspension and structural
components for the automotive industry. The Company has
approximately 6,000 employees at facilities located in North
America and Europe. More information is available on the Internet
at http://www.intermet.com/

                           *     *     *

As reported in the Troubled Company Reporter on May 12, 2004,
Standard & Poor's Ratings Services lowered its corporate credit
and senior secured bank loan credit ratings on Troy,
Michigan-based Intermet Corp. to 'B+' from 'BB-'. At the same
time, Standard & Poor's lowered its senior unsecured debt rating
on Intermet to 'B' from 'B+'. The outlook is negative. The casting
company's total outstanding debt is about $387 million (including
the present value of operating leases) as of March 31, 2004.

"The downgrade reflects concern over Intermet's increased
financial leverage as a result of rises in raw material prices and
surcharges that have not yet been collected," said Standard &
Poor's credit analyst Heather Henyon. "The ratings could be
lowered if Intermet is unable to offset the raw material pricing
increase through surcharge recovery, if end-markets deteriorate,
or if cash flow generation weakens."

Total debt (adjusted for $50 million excess cash) to EBITDA
increased to 5.1x as of March 31, 2004, exceeding Standard &
Poor's previous expectations of total debt to EBITDA in the 3x-
3.5x range. Included in total debt outstanding is $35 million in
letters of credit, which are supported by restricted cash in the
same amount on the balance sheet.

Intermet has experienced recent poor financial performance
resulting from high exposure to the cyclical automotive industry
and associated pricing pressures. Pricing pressure has been
intense as the automakers struggle to improve their own
profitability. In addition, profit margins are being affected by
the increased cost of scrap steel, which almost doubled during
2003. To preserve cash flow, Intermet has reduced capital
spending, including maintenance capital expenditures. Intermet
expects increased capital spending needs as it opens a new plant
in Mexico, explores expansion to new markets, launches new
technologies, and continues to invest in existing facilities.


IPIX CORP: Clara Conti Succeeds Donald Strickland as Pres. & CEO
----------------------------------------------------------------
IPIX Corporation (Nasdaq: IPIX), a leader in mission-critical
imaging solutions, names Clara M. Conti president and chief
executive officer of the Company. Ms. Conti will succeed Donald
Strickland, who has been president and chief executive officer
since 2001. Ms. Conti will also be a member of the IPIX Board of
Directors and serve on its Executive Committee.

"I am looking forward to the opportunity to lead IPIX at this
important time in its history," commented Ms. Conti. "I believe
IPIX has developed a superior product that is ideally suited to
meet the escalating challenges in security and homeland defense.
Additionally, as the leading next-generation supplier of full-360-
degree video surveillance technology for numerous critical
government and commercial security applications, the prospects for
extending the Company's international reach are compelling. I am
excited about moving IPIX forward to capitalize on the tremendous
opportunities in the global marketplace."

Ms. Conti brings over 20 years experience in the information
technology field to IPIX as a leader, innovator and entrepreneur.
She most recently served as president and chief executive officer
of ObjectVideo, an intelligent video surveillance company based in
Washington, D.C. In just 18 months she was instrumental in turning
the struggling company into an industry leader for intelligent
video surveillance by building a world-class executive team and
sales organization. Ms. Conti also was responsible for securing a
third round of venture funding resulting in a total of $22 million
for ObjectVideo. Notably, ObjectVideo was awarded a multi-million
dollar government contract with the Department of Homeland
Security to secure the northern and southern borders of the United
States. In addition, during her tenure, the company worked with
the Department of Defense and the Department of Energy.
ObjectVideo received many awards, including "Top 10 Companies to
Watch" by Federal Computing Week and "Best in Show" from the
International Security Conference.

Prior to joining ObjectVideo in 2001, Ms. Conti served as vice-
president of eBusiness Solutions for DynCorp where she was the
prime architect of the business development process to execute
rapid eBusiness, eGovernment and eFederal revenue growth. Ms.
Conti was also the president and chief executive officer of Aurora
Enterprise Solutions, a company she founded in 1992 and grew into
a premier information security company before it was acquired in
1999. In addition to her successful ventures as an entrepreneur,
Ms. Conti previously worked in the Washington D.C. area as an
information technology executive.

"I am pleased that IPIX has attracted a security industry veteran
with the experience of Clara Conti. I have every confidence that
under her leadership the company will succeed in the security
business. I look forward to working with her during a transition
period to ensure a seamless transfer of leadership," said
Strickland.

David M. Wilds, chairman of IPIX, added, "Clara Conti's ability,
her extensive background in government security and her
entrepreneurial drive and strategic vision are precisely the
qualities required to lead this unique and progressive
organization. We are highly confident that her considerable
leadership skills and experience will facilitate IPIX's ability to
accelerate the growth initiatives that are underway. The IPIX
Board of Directors expresses appreciation to Mr. Strickland for
his significant contributions to the Company; we wish him all the
best in the future."

                            About IPIX

IPIX Corporation -- http://www.ipix.com/-- offers mission  
critical imaging where visual content is required for eCommerce
and the protection of life and property. IPIX conducts its
business through three business units that share IPIX's patented
technology: IPIX Security, IPIX AdMission and IPIX InfoMedia.
Visit the IPIX website for more detailed descriptions of each
business unit. IPIX has offices in California and Tennessee.

                           *     *     *

                        Going Concern Doubt

IPIX Corporation's former independent auditors,
PricewaterhouseCoopers LLP, reviewed the Company's consolidated
financial statements for the year ended December 31, 2003 and
expressed substantial doubt regarding the Company's ability
to continue as a going concern.


LB-UBS COMMERCIAL: S&P Affirms Low-B Ratings on Four Cert. Classes
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on classes
B, C, D, E, F, and G of LB-UBS Commercial Mortgage Trust's
commercial mortgage pass-through certificates series 2000-C4.  At
the same time, the ratings on classes A-1, A-2, H, J, K, L, and X
from the same series are affirmed.

The raised and affirmed ratings reflect the improved operating
performance of the mortgage pool and the modestly increased credit
support levels that adequately support the ratings under various
stress scenarios.

As of August 2004, the trust collateral consisted of
165 commercial mortgages with an outstanding balance of
$964.5 million, down 3.5% from issuance.  There have been no
realized losses since issuance.  The master servicer, ORIX Real
Estate Capital Markets LLC, reported full-year 2003 net cash flow
-- NCF -- debt service coverage ratios -- DSCRs -- for 92.9% of
the pool.  Credit tenant lease loans -- CTLs -- comprise another
2.0% of the pool and are not included in the financial reporting
figure.  Four loans totaling 1.4% of the pool have been fully
defeased.  Excluding the CTLs and the defeased loans, Standard &
Poor's calculated the current weighted average DSCR for the pool
to be 1.49x, up from 1.40x at issuance.

The current weighted average DSCR for the top 10 loans, which
comprise 31.4% of the pool, improved to 1.84x from 1.64x at
issuance.  Seven of the top 10 loans have improved DSCRs from
issuance.  The largest loan, Westfield Shoppingtown South Shore,
and the third-largest loan, Westfield Shoppingtown Plaza Camino,
have credit characteristics consistent with investment-grade
obligations.  Cash flows are up 13% and 17% for the properties,
respectively.  One of the top 10 loans is being specially
serviced, while another is on the watchlist.

At present, there are 11 loans with the special servicer, GMAC
Commercial Mortgage Corp., with a current combined balance of
$65.1 million, or 6.74% of the pool balance.  Four of the loans,
totaling $14.9 million, are REO and one is in foreclosure with a
balance of $726,563.  All other loans in the pool are current.  
Details on the top three loans in special servicing are:

   -- The fourth-largest loan in the pool and the largest loan in
      special servicing is Exchange Park Center, which has a
      current balance of $26.2 million (2.7% of the pool, $42 per
      sq. ft.).  

      Two office towers in Dallas, Texas that are connected by an
      enclosed mall and total 626,823 sq. ft. secure the loan.  

      The loan was transferred when the borrower failed to remit a
      lease termination fee, which was subsequently done so.  

      The properties' overall occupancy stands at 89.1%, but is
      expected to decline in September when AIG vacates the
      remainder of the space it still occupies.  

      The occupancy is expected to decline further as AT&T has
      indicated its intention to vacate most or all of its space
      in one of the towers (175,384 sq. ft.) upon its lease
      expiration in December 2004.

      GMAC Commercial is working with the borrower on plans to
      market and lease the pending vacant space.

   -- Northpointe Apartments has a current balance of
      $8.1 million (0.85%, $43,270 per unit).

      The property, which became REO in April 2004, is located in
      Statesville, North Carolina.  

      Current occupancy is 88% as of July 31, 2004, and the
      property has positive cash flow.

      An appraisal indicated a value of $8.435 million and a
      broker's opinion of value was $8.2 million.

      A loss is expected upon disposition.

   -- Bolton Place, which had a current balance of $7.26 million
      (0.75%), was secured by a multifamily property in Georgia
      and paid off in full in August.

The remaining special serviced assets include three crossed loans
secured by Wellesly Inn properties, totaling $11.3 million.
Limited information is available because the transfer was recent.  
The properties posted a combined 0.93x DSC as of year-end 2003.

The current servicer's watchlist includes 60 loans totaling
$203.7 million (21.1%).  The 10th-largest loan, Pike Shopping
Center, appears on the watchlist due to pending lease expirations.
The loan has a balance of $15.1 million and reported a year-end
2003 DSC of 1.35x.  The watchlist commentary indicated that
tenants with expiring leases are expected to renew, as per
discussions with the borrower.  The property is located in
Rockville, Maryland.

The pool has large geographic concentrations in:

   * New York (19.3%),
   * California (14.7%),
   * Florida (10.1%),
   * Texas (9.2%), and
   * Virginia (6.6%).

Significant collateral type concentrations include:

   * retail (41.6%),
   * multifamily (23.4%),
   * office (15.5%),
   * mixed use (6.56%),
   * industrial (5.3%), and
   * lodging (4.5%).

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
   
                LB-UBS Commercial Mortgage Trust
       Commercial mortgage pass-thru certs series 2000-C4
   
                   Rating
       Class   To          From   Credit Enhancement (%)
       -----   --          ----   ----------------------
       B       AA+         AA                     17.35
       C       A+          A                      13.21
       D       A           A-                     11.91
       E       A-          BBB+                   11.13
       F       BBB+        BBB                     9.32
       G       BBB         BBB-                    8.03
   
                        Ratings Affirmed
   
                LB-UBS Commercial Mortgage Trust
       Commercial mortgage pass-thru certs series 2000-C4
   
            Class   Rating   Credit Enhancement (%)
            -----   ------   ----------------------
            A-1     AAA                      21.75
            A-2     AAA                      21.75
            H       BB+                       5.70
            J       BB                        4.40
            K       BB-                       3.63
            L       B+                        2.85
            X       AAA                       N/A
   
            N/A - Not applicable.


LMI AEROSPACE: Sells Versaform Canada Division to Investors
-----------------------------------------------------------
LMI Aerospace, Inc. (Nasdaq: LMIA), a leading provider of
assemblies, kits and detail sheet metal and machined components to
the aerospace, defense and technology industries, has sold its
Versaform Canada division to a private group of investors. Terms
of the sale were not disclosed. The sale of Versaform Canada
resulted from LMI's previously announced strategy to sell certain
non-core assets. Versaform Canada manufactures aerospace and
architectural components and is located in British Columbia.

The company also announced that it was notified by the Nasdaq
Stock Market on September 15, 2004, that LMI has regained
compliance for listing on the Nasdaq National Market. In June 2004
LMI's stock value fell below the threshold for listing on the
Nasdaq National Market, and the company faced potential delisting.

LMI's share price closed at $1.55 per share on September 15, 2004.

LMI Aerospace, Inc. is a leading supplier of quality components to
the aerospace and technology industries. The company operates
eleven manufacturing facilities that fabricate, machine, finish
and integrate formed, close tolerance aluminum and specialty alloy
components for commercial, corporate, regional and military
aircraft, laser equipment used in the semiconductor and medical
industries, and for the commercial sheet metal industries.

                           *     *     *

                        Going Concern Doubt

In its Form 10-Q for the quarterly period ended June 30, 2004,
filed with the Securities and Exchange Commission, LMI Aerospace
reports losses from operations in recent years together with its
inability to meet certain covenants under its loan agreement
raising substantial doubt about the Company's ability to continue
as a going concern.


LOOMIS SAYLES: Moody's Confirms B1 Ratings on $37M Class III Notes
------------------------------------------------------------------
Moody's Investors Service upgraded its rating of these Classes of
Notes issued by Loomis Sayles FIM CBO 1, Limited, a collateralized
debt obligation issuance:

   (1) $17,500,000 Class II-A Senior Notes due December 8, 2012
       from A1 to Aa2.

   (2) $15,000,000 Class II-B Senior Notes due December 8, 2012
       from A1 to Aa2.

Moody's noted that the transaction, which closed in January 2001,
has experienced improvement in the overcollateralization levels as
the most senior tranche of liabilities has been reduced on
successive payment dates.  The rating action reflects improvement
in the credit quality of the underlying collateral pool, which
consists primarily of non-investment grade corporate debt
obligations.

Moody's stated that as a result of these factors, the ratings
assigned to the Class II Senior Notes, prior to the rating action
taken today, are no longer consistent with the credit risk posed
to investors.  The ratings were placed on the Moody's watchlist
for possible upgrade on July 7, 2004.

Moody's also removed these Classes of Notes issued by Loomis
Sayles FIM CBO 1, Limited from the Moody's Watchlist for possible
upgrade and has confirmed the current ratings as follows:

   (1) $29,000,000 Class III-A Mezzanine Notes Due December 8,
       2012 rating confirmed at B1.

   (2) $8,000,000 Class III-B Mezzanine Notes due December 8, 2012
       rating confirmed at B1.

Rating Action: Upgrade

   Issuer: Loomis Sayles FIM CBO 1, Limited

   The ratings of these Classes of Notes have been upgraded:

   Class Description:

      (1) U.S. $17,500,000 Class II-A Senior Notes due December 8,
          2012 from A1 to Aa2.

      (2) U.S. $15,000,000 Class II-B Senior Notes due December 8,
          2012 from A1 to Aa2.

Rating Action: Removal from Watchlist for Possible Upgrade and
               Confirmation of Rating

   Issuer: Loomis Sayles FIM CBO 1, Limited

   The ratings of these Classes of Notes have been removed from    
   the Watchlist for Possible Upgrade and are confirmed:

      (1) U.S. $29,000,000 Class III-A Mezzanine Notes Due
          December 8, 2012 rating confirmed at B1.

      (2) U.S. $8,000,000 Class III-B Mezzanine Notes Due
          December 8, 2012 rating confirmed at B1.


M-FOODS HOLDINGS: S&P Puts B- Rating on Planned $100M Senior Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Minnetonka, Minnesota-based M-Foods Holdings,
Inc., (parent company of Michael Foods Inc., an egg and egg
product producer and distributor).

At the same time, Standard & Poor's assigned a 'B-' rating to M-
Foods' proposed $100 million senior discount notes due 2013.  The
notes are rated two notches below the corporate credit rating,
reflecting their structural subordination.  In addition, Standard
& Poor's affirmed its 'B+' corporate credit rating and revised its
outlook on Michael Foods, Inc., to stable from positive.  

Proceeds from the issue along with about $66 million in cash on-
hand will be used to fund a dividend distribution to shareholders.  
Pro forma for the issuance, consolidated lease-adjusted total debt
outstanding is expected to be about $900 million at closing.

"The outlook change reflects the incremental rise in debt and the
expected slower growth in operating income anticipated over the
intermediate period," said Standard & Poor's credit analyst Ronald
Neysmith.  "Although we expect credit measures to remain
appropriate for the current rating, any improvement will be pushed
out with the increase in debt leverage."

Standard & Poor's expects Michael Foods to maintain its market
position and improve its credit protection measures through strong
cash flow and debt reduction during the outlook period.


MCCANN: Brings-In Warren J. Van Der Waag as Accountant
------------------------------------------------------
Lee E. Buchwald, the Chapter 11 Trustee in McCann, Inc.'s
bankruptcy case, asks the U.S. Bankruptcy Court for the Southern
District of New York for permission to hire Warren J. Van Der Waag
& Co., P.C., as his accountant.

The Trustee requires the services of the accountants to file the
Debtor's 2003 federal, state and local tax returns.  

Van Der Waag did prepetition work for the Debtor and will be able
to prepare and file the 2003 returns without difficulty.

For their accounting services, the Firm will be paid an hourly
rate of $200.

To the best of the Trustee's knowledge, Van Der Waag does not hold
any interest adverse to the Debtor or its estate.

Headquartered in New York, New York, McCann, Inc., is a commercial
interior general contracting company. On April 15, 2004, a group
of creditors filed an involuntary Chapter 7 petition against
McCann, Inc. On June 23, 2004, the Debtor exercised its right
under Sec. 706(a) of the Bankruptcy Code to convert its bankruptcy
case to a Chapter 11 case, and an order for relief was entered on
June 25, 2004 (Bankr. S.D.N.Y. Case No. 04-12596 (SMB)). On July
22, 2004, the court appointed Lee E. Buchwald to serve as Chapter
11 Trustee. Mr. Buchwald hired Scott S. Markowitz, Esq., at
Todtman, Nachamie, Spizz & Johns, P.C., as his counsel. Clifford
A. Katz, Esq., at Goldberg & Jaslow, LLP serves as the Debtor's
counsel.


MCDERMOTT INT'L: Subsidiary Concludes Partial Senior Debt Offer
---------------------------------------------------------------
J. Ray McDermott, S.A., a subsidiary of McDermott International
Inc. (NYSE:MDR), has concluded its offer to purchase at par up to
$18.75 million of J. Ray's 11% senior secured notes due 2013
commenced on Aug. 13, 2004. J. Ray did not receive any tenders of
Notes during the offer period. The offer to purchase Notes was
made in accordance with the asset sale covenant contained in the
indenture. With the offer period now expired, the $18.75 million
of previously restricted funds has now become unrestricted cash
and available for general corporate purposes.

J. Ray McDermott, S.A, is a leading provider of solutions for
offshore field development worldwide. McDermott International Inc.
is a leading worldwide energy services company. McDermott's
subsidiaries provide engineering, fabrication, installation,
procurement, research, manufacturing, environmental systems,
project management and facilities management services to a variety
of customers in the power and energy industries, including the
U.S. Department of Energy.

                        About the Company

McDermott International Inc. is a worldwide energy services
company. The Company's subsidiaries provide engineering,
fabrication, installation, procurement, research, manufacturing,
environmental systems, project management and facility management
services to a variety of customers in the energy and power
industries, including the U.S. Department of Energy.

At June 30, 2004, McDermott International's balance sheet showed a
$361,184,000 stockholders' deficit, compared to a $363,177,000 at
December 31, 2003.


MOONEY AEROSPACE: Files its Plan of Reorganization in Delaware
--------------------------------------------------------------
Mooney Aerospace Group, Inc., filed its Disclosure Statement and
Plan of Reorganization with the U.S. Bankruptcy Court for the
District of Delaware.  A full-text copy of the Disclosure
Statement explaining the Plan is available for a fee at:

      http://www.researcharchives.com/download?id=040812020022

The Plan groups claims and interests in five classes and describes
the treatment of each:
  
          Class                         Treatment
          -----                         ---------
1 - First Mortgage Claim        Unimpaired. Deemed to have
                                accepted the Plan. On the
                                Effective Date, the Reorganized
                                Debtor shall reinstate and assume
                                the subject note and mortgage
                                provided that the Debtor will
                                offer the Class 1 Claimant
                                the right to convert its claim
                                into shares.
     
                                Approximately $148,000

2 - Priority Claims             Unimpaired. Deemed to have
                                accepted the Plan.  On the
                                Effective Date, Claimants
                                will be fully paid in cash plus 9                                      
                                percent interest from the petition                                     
                                date.

                                Approximately $165,000
                              
3 - Unsecured Claims            Impaired. Each Claimant is
                                entitled to receive its pro-rata
                                share of 46% of the new equity in
                                the Reorganized Debtor.

                                Approximately $46,000,000

4 - Preferred Equity Interests  Impaired. Holders are entitled to
                                their pro-rata share of 2 percent
                                of the Reorganized Debtor shares.

5 - Common Equity Interests     Impaired. Holders are entitled to
                                their pro-rata share of 2 percent  
                                of the Reorganized Debtor shares.

Headquartered in Kerrville, Texas, Mooney Aerospace Group, Ltd.
-- http://www.mooney.com/-- is a general aviation holding company  
that owns Mooney Airplane Co., located in Kerrville, Texas. The
Company filed for chapter 11 protection on June 10, 2004 (Bankr.
Del. Case No. 04-11733). Mark A. Frankel, Esq., at Backenroth
Frankel & Krinsky LLP, represents the Debtor in its restructuring
efforts. When the Company filed for protection from its creditors,
it listed $16,757,000 in total assets and $69,802,000 in total
debts.


MORGAN STANLEY: Moody's Places B2 Rating on Class G Certificates
----------------------------------------------------------------
Moody's Investors Service upgraded the ratings of four classes and
affirmed the ratings of four classes of Morgan Stanley Capital I
Inc., Commercial Mortgage Pass-Through Certificates, Series
1996-WF1 as follows:

   -- Class A-3, $72,066,679, WAC, affirmed at Aaa;
   -- Class X, Notional, affirmed at Aaa;
   -- Class B, $36,322,105, WAC, affirmed at Aaa;
   -- Class C, $30,268,420, WAC, upgraded to Aaa from Aa2;
   -- Class D, $33,295,263, WAC, upgraded to Aaa from A3;
   -- Class E, $9,080,526, WAC, upgraded to Aa1 from Baa2;
   -- Class F, $21,187,895, WAC, upgraded to Baa1 from Ba2; and
   -- Class G, $21,187,895, WAC, affirmed at B2.

As of the August 16, 2004 distribution date, the transaction's
aggregate balance has decreased by approximately 61.4% to
$233.6 million from $605.4 million at securitization.  The
Certificates are collateralized by 66 mortgage loans secured by
commercial and multifamily properties.  The loans range in size
from less than 1.0% of the pool to 6.5% of the pool, with the top
10 loans representing 42.2% of the pool.  Four loans have been
liquidated from the pool, resulting in aggregate realized losses
of approximately $7.9 million.  The only loan in special servicing
is the Auburn Mall Loan, which is the third largest loan in the
pool and is discussed below.  Moody's does not expect any losses
from the resolution of this loan.

Moody's was provided with year-end 2003 operating results for
approximately 92.0% of the pool.  Moody's loan to value ratio --
LTV -- is 66.7%, compared to 70.1% at Moody's last full review in
October 2001 and 75.0% at securitization.  Based on Moody's
analysis, 4.0% of the pool has a LTV greater than 100.0% compared
to 7.6% at the last review.  The upgrade of Classes C, D, E and F
is due to an increase in subordination levels and overall improved
pool performance.

The top three loans represent 17.2% of the outstanding pool
balance.  The largest loan is the JRS Properties Loan
($15.1 million - 6.5%), which is secured by five retail properties
located in Texas (4) and Ohio (1).  The portfolio totals 330,000
square feet and is 95.0% occupied.  The loan has amortized 29.7%
since securitization.  Moody's LTV is 51.3%, compared to 68.4% at
last review.

The second largest loan is the Marketplace 99 Loan ($14.5 million
-- 6.2%), which is secured by a 163,000 square foot retail center
located in Elk Grove, California.  The property is 99.0% occupied
and is anchored by Mervyn's and Raley's Grocery.  Moody's LTV is
68.6%, compared to 71.8% at last review.

The third largest loan is the Auburn Mall Loan ($10.4 million --
4.5%), which is secured by a 298,000 square foot regional mall
located in Auburn, Maine.  The loan was transferred to the special
servicer in February 2003 due to a request by the borrower for a
loan restructure.  The property's performance has been impacted by
the loss of an anchor department store, Porteous, Mitchell &
Braun, in 2002.  The property currently has one anchor, J.C.
Penney, and is 58.0% leased compared to 96.6% at securitization.  
The loan benefits from rapid amortization (25-year amortization
term), strong sponsorship and experienced property management.  
The borrowing entity is sponsored by an affiliate of Sam Zell
Equity and the property is managed by General Growth Properties,
Inc., Moody's LTV is 100.0%, compared to 65.2% at last review.

The pool's collateral is a mix of:

   * retail (58.0%),
   * industrial (19.9%),
   * multifamily (14.8%) and
   * office (7.3%).

The collateral properties are located in 23 states.  The highest
state concentrations are:

   * California (23.6%),
   * Texas (12.1%),
   * Michigan (8.4%),
   * Virginia (7.0%), and
   * Illinois (5.8%).

All of the loans are fixed rate.


MRG ENTERPRISES LLC: Case Summary & Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: MRG Enterprises LLC
        aka Fuse Restaurant
        71 East Wacker Drive
        Chicago, Illinois 60601

Bankruptcy Case No.: 04-34173

Type of Business: The Company operates a full-service American and
                  French 200-seat restaurant in downtown Chicago.  
                  Among other amenities, Fuse offers banquet and
                  private dining facilities.  Fuse Restaurant is
                  temporarily closed.

Chapter 11 Petition Date: September 15, 2004

Court: Northern District of Illinois (Chicago)

Judge: Jack B. Schmetterer

Debtor's Counsel: Barry A Chatz, Esq.
                  James A Chatz, Esq.
                  Arnstein & Lehr LLP
                  120 South Riverside Plaza, Suite 1200
                  Chicago, Illinois 60606
                  Tel: 312 876-7100

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 largest unsecured creditors:

    Entity                                Claim Amount
    ------                                ------------
Crane Construction                          $1,000,000
c/o Lawrence C. Rubin/Shefsky et. al.
444 North Michigan Avenue, Suite 2500
Chicago, Illinois 60811

M.L. Rongo, Inc.                              $247,687

Clever Ideas                                  $200,000

South Central Bank                            $132,000

Sysco                                          $94,637

Warren Architects, Ltd.                        $64,954

United Visual                                  $34,102

Tim Griffin                                    $25,000

Citibank A Advantage Business Card             $20,879

The Hunter Group                               $20,400

Chas, Bender Company                           $19,500

Levun, Goodman & Cohen                         $18,337

Sound Investment Audio, Ltd.                   $18,166

Grapevine                                      $17,046

Liska & Associates                             $13,505

Mickey's Linen & Towel                         $11,434

Chicago Beverage Garden                        $11,100

European Imports, Ltd.                         $10,959

CIT Technology Financial Services              $10,717

Purely Gourmet                                 $10,716


NATIONAL BENEVOLENT: Board Taps Fortress as Stalking Horse Bidder
-----------------------------------------------------------------
Fitch Ratings learned that the National Benevolent Association
Board approved an Asset Purchase Agreement with Fortress NBA
Acquisition, LLC. Fortress is the 'stalking horse bidder' in the
proposed sale of all of the eleven senior living facilities owned
and operated by NBA. The bid of the stalking horse bidder
establishes the minimum price and the sales terms for the sale of
the facilities. A hearing to approve the bid of the stalking horse
bidder is scheduled for October 5, 2004. Fortress' bid for the
eleven facilities is $210,000,000. Fitch currently rates the
outstanding debt of NBA 'DD'. No rating action is taken at this
time and Fitch will continue to monitor the bankruptcy proceedings
to determine whether any change in the rating is warranted.

   Outstanding Debt:

      -- $9,650,000 Jacksonville Health Facilities Authority
         Industrial Development Revenue Bonds (NBA-Cypress Village
         Florida Project), Series 2000A;

      -- $10,080,000 Colorado Health Facilities Authority Revenue
         Bonds (NBA-Village at Skyline Project), Series 2000C;

      -- $9,390,000 Colorado Health facilities Authority revenue
         Bonds (NBA-Village at Skyline Project), Series 1999A;

      -- $3,980,000 Oklahoma County Industrial Authority Health
         Care Revenue Bonds (NBA - Oklahoma Christian Home
         Project), Series 1999;

      -- $2,695,000 Health and Educational Facilities Authority of
         the State of Missouri Health Facilities Refunding and
         Improvement Revenue Bonds (NBA - Central Office Project),
         Series 1999;

      -- $15,145,000 Colorado Health Facilities Authority Health
         Facilities Revenue Bonds (NBA - Village at Skyline
         Project), Series 1998B;

      -- $10,715,000 Colorado Health Facilities Authority Health
         Facilities Refunding Revenue Bonds (NBA - Multi-state
         Issue), Series 1998A;

      -- $5,935,000 Iowa Finance Authority Health Facilities
         Revenue Bonds (NBA - Ramsey Home Project), Series 1997;

      -- $2,235,000 Oklahoma County Industrial Authority Health
         Care Refunding Revenue Bonds (NBA - Oklahoma Christian
         Home Project), Series 1997;

      -- $2,160,000 Health and Educational Facilities Authority of
         the State of Missouri Health Facilities Revenue Bonds
         (NBA - Woodhaven Learning Center Project), Series 1996A;

      -- $625,000 Colorado Health Facilities Authority Tax-Exempt
         Health Facilities Revenue Bonds (NBA - Colorado Christian
         Home Project), Series 1996A;

      -- $2,650,000 Illinois Development Finance Authority Health
         Facilities Revenue Bonds (NBA - Barton W. Stone Christian
         Home Project), Series 1996;

      -- $4,485,000 Colorado Health Facilities Authority Health
         Facilities Authority Tax-exempt Health Facilities Revenue
         Bonds (NBA - Village at Skyline Project), Series 1995A;

      -- $4,655,000 Jacksonville (FL) Health Facilities Authority
         Industrial Development Revenue Bonds (NBA - Cypress
         Village Florida Project), Series 1994;

      -- $3,645,000 Health and Educational Facilities Authority of
         the State of Missouri Health Facilities Revenue Bonds
         (NBA - Lenoir Retirement Community Project), Series 1994;

      -- $8,015,000 Jacksonville (FL) Health Facilities Authority
         Industrial Development Revenue Bonds (NBA - Cypress
         Village Florida Project), Series 1993;

      -- $23,950,000 Jacksonville (FL) Health Facilities Authority
         Revenue Refunding Bonds (NBA - Cypress Village Florida          
         Project), Series 1992;

      -- $22,590,000 City of Indianapolis, Indiana Economic
         Development Refunding and Improvement Revenue Bonds
         (NBA - Robin Run Village Project), Series 1992;

      -- $4,485,000 Industrial Development Authority of Cass
         County, Missouri Industrial Revenue Refunding Bonds
         (NBA - Foxwood Springs Living Center Project),
         Series 1992;

      -- $1,850,000 Bexar County (TX) Health Facilities
         Development Corp. Tax-exempt Health Facilities Revenue
         Bonds (NBA - Patriot Heights Project), Series 1992B.

Headquartered in Saint Louis, Missouri, The National Benevolent
Association of the Christian Church (Disciples of Christ)
-- http://www.nbacares.org/-- manages more than 70 facilities  
financed by the Department of Housing and Urban Development (HUD)
and owns and operates 18 other facilities, including 11 multi-
level older adult communities, four children's facilities and
three special-care facilities for people with disabilities. The
Company filed for chapter 11 protection on February 16, 2004
(Bankr. W.D. Tex. Case No. 04-50948). Alfredo R. Perez, Esq., at
Weil, Gotshal & Manges, LLP represents the Debtors in their
restructuring efforts. When the Company filed for protection from
their creditors, they listed more than $100 million in both
estimated debts and assets.


NATIONAL ENERGY: Joint Hearing on Major Agreements is on Wednesday
------------------------------------------------------------------
On August 30, 2004, National Energy & Gas Transmission, Inc.,
(f/k/a PG&E National Energy Group, Inc.) and its debtor-affiliates
filed a motion for an order authorizing and approving:

   (a) that certain Settlement Agreement, dated as of August
       30,2004, by and among National Energy & Gas Transmission,
       Inc., certain wholly owned or controlled affiliates who are
       signatories thereto, the Official Committee of Unsecured
       Creditors of NEGT, PG&E Corporation, Peter A. Darbee and
       Bruce R. Worthington;

   (b) that certain related Tax matters Agreement, dated as of
       August 30, 2004;

   (c) the dismissal, with prejudice, of Civil Action No. PJM
       03-2920;

   (d) certain Release Agreements to be executed by USGen New
       England, Incl. and by the ET Debtors;

   (e) a Waiver Agreement by and among NEGT, certain of its
       debtor-affiliates and the TransCanada entities; and

   (f) all related relief, pursuant to sections 105 and 363 of
       title 11 of the United States Code, Rule 9019(a) of the
       Federal Rules of Bankruptcy Procedure and Fed. R. Civ.
       Pro. 41(a).

A joint hearing to approve the Motion will be held on Sept. 22,
2004, at 4:30 p.m. (ET), before the United States District Court
for the District of Maryland and the United States Bankruptcy
Court for the District of Maryland in Greenbelt.

All creditors and parties in interest are urged to review the
Motion.  Copies of the Motion are available for a fee at
http://mdb.uscourts.gov/or at http://mdd.uscourts.gov/or may be  
reviewed at the Bankruptcy Court and the District Court.  The
documents can also be obtained by written request to:

      Paul M. Nussbaum, Esq.
      Martin T. Fletcher, Esq.
      Whiteford, Taylor & Preston L.L.P.
      Seven Saint Paul Street, Suite 1400
      Baltimore, Maryland 21202

      Robin Spigel, Esq.
      Willkie Farr & Gallagher LLP
      787 Seventh Avenue
      New York, New York 10019

Headquartered in Bethesda, Maryland, PG&E National Energy Group,
Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas  
Transmission, Inc.) develops, builds, owns and operates
electric generating and natural gas pipeline facilities and
provides energy trading, marketing and risk-management services.
The Company filed for Chapter 11 protection on July 8, 2003
(Bankr. D. Md. Case No. 03-30459). Matthew A. Feldman, Esq.,
Shelley C. Chapman, Esq., and Carollynn H.G. Callari, Esq., at
Willkie Farr & Gallagher represent the Debtors in their
restructuring efforts. When the Company filed for protection from
its creditors, it listed $7,613,000,000 in assets and
$9,062,000,000 in debts.  NEGT received bankruptcy
court approval on its reorganization plan in May 2004 and
anticipates emerging from bankruptcy shortly.


NATIONAL MARINE: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: National Marine, Inc.
        1546 Ridge Road
        Vienna, Ohio 44473

Bankruptcy Case No.: 04-44552

Type of Business: The Debtor is a boat dealer.

Chapter 11 Petition Date: September 16, 2004

Court: Northern District of Ohio (Youngstown)

Judge: Kay Woods

Debtor's Counsel: Irene K. Makridis, Esq.
                  183 West Market Street
                  Warren, OH 44481
                  Tel: 330-394-1587
                  Fax: 330-394-3070

Total Assets: $10,852,000

Total Debts:  $11,911,451

Debtor's 20 Largest Unsecured Creditors:

   Entity                     Nature Of Claim       Claim Amount
   ------                     ---------------       ------------
Home Savings & Loan Company   High Performance        $4,900,000
275 Federal Plaza West        Boats
Youngstown, OH 44503

American Express              Credit Card               $100,000

Ford Motor Credit             Trucks & Business         $100,000
                              Vehicles
                              secured:
                              $120,000

Bank One                      Trucks & Business          $30,000
                              Vehicles
                              secured:
                              $120,000

Land Rover Capital Group      2004 Range Rover           $30,000

Summer's Mobile Leasing Inc.  Leased Trailers            $25,000

Airport Properties, LLC       Rent                       $18,000

Airport Properties, LLC       Agreement to buy           $10,000
                              real estate

Sprint                        Phone Service               $8,000

Martin Bloom                  Rent for Dealership         $6,000
                              in Ft. Lauderdale, FL

Moore & VanAllen, PLLC        Attorney Fees               $5,655

Ohio Edison                   Electric                    $5,000

American Automobile           Suit on increased          Unknown
Insurance Co.                 premiums

Andrew & Tammy Weiter         Boat sale dispute          Unknown

Ashley Marina & Yacht Sales,  Tort claim                 Unknown
Inc.

Dave Jackson                  Sale of used boat          Unknown

Gail A. Villani               Suit on new boat           Unknown

Melborn Limited & Albert      Sale of boat               Unknown
Scaglione

Michael Cardinali             Sale of used boat          Unknown

Michael J. Redman, Jr.        Trade in boat              Unknown


PACIFIC GAS: AT&T Broadband's $1.1MM Claim to be Disallowed
-----------------------------------------------------------
On September 4, 2001, AT&T Broadband, LLC, filed Claim No.9179,  
an unsecured, non-priority claim, against Pacific Gas and  
Electric Company.  The Claim sought $1,147,809 in reimbursement  
for alleged "overcharges" on its utility bills for un-metered  
electric service the Debtor provided to AT&T and certain of its  
predecessors-in-interest.

On June 14, 2002, the Debtor objected to AT&T's Claim and  
asserted that it did not owe the amounts asserted by AT&T or any  
amounts with respect to the provision of un-metered electric  
service.  Subsequent to the filing of the Objection, Comcast  
Corporation acquired AT&T and its rights under, and interest in,  
the Claim.

The Debtor and Comcast engaged in negotiations to settle the  
Claim and resolve existing issues regarding the un-metered  
electric service.  The parties agree that Claim No.9179 will be  
disallowed in its entirety.

Headquartered in San Francisco, California, Pacific Gas and
Electric Company -- http://www.pge.com/-- a wholly owned  
subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest
combination natural gas and electric utilities in the United
States.  The Company filed for Chapter 11 protection on April 6,
2001 (Bankr. N.D. Calif. Case No. 01-30923).  James L. Lopes,
Esq., William J. Lafferty, Esq., and Jeffrey L. Schaffer, Esq., at
Howard, Rice, Nemerovski, Canady, Falk & Rabkin represent the
Debtors in their restructuring efforts.  On June 30, 2001, the
Company listed $23,216,000,000 in assets and $22,152,000,000 in
debts.  Pacific Gas and Electric emerged from chapter 11
protection on April 12, 2004, paying all creditors 100 cents-on-
the-dollar plus post-petition interest.  (Pacific Gas Bankruptcy
News, Issue No. 83; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


PAXSON COMMS: Resets NBC's Series B Preferred Stock Dividend Rate
-----------------------------------------------------------------
Paxson Communications Corporation (AMEX:PAX) says, as of Sept. 15,
2004, the dividend rate on the Company's Series B Convertible
Exchangeable Preferred Stock, all of which is presently held by
the National Broadcasting Company, Inc., a subsidiary of General
Electric Company, has been reset from 8% to 16.2%. The reset
occurred in accordance with the procedure specified in the terms
of the Preferred Stock, which required the Company to engage a
nationally recognized independent investment banking firm to
determine the adjusted dividend rate as of the fifth anniversary
of the original issue date of the Preferred Stock. The Company
engaged CIBC World Markets Corp. for this purpose. The Preferred
Stock does not pay cash dividends on a current basis.

              About Paxson Communications Corporation

Paxson Communications Corporation owns and operates the nation's
largest broadcast television distribution system and the PAX TV
network, which airs via nationwide broadcast television, cable and
satellite distribution systems. PAX TV's original programming
slate for the 2004-2005 broadcast season features three new
unscripted series, "Cold Turkey," "Model Citizens" and "Second
Verdict"; two scripted dramas, "Young Blades" and "Left Behind";
two entertaining variety programs, "America's Most Talented Kids"
and "World Cup Comedy," executive produced by Kelsey Grammer; and
two fast-paced game shows, "On the Cover" and "Balderdash."
Returning series include all-new episodes of PAX's top-rated
dramas, "Doc" and "Sue Thomas: F.B.Eye." For more information,
visit PAX TV's website at http://www.pax.tv/

                           *     *     *

As reported in the Troubled Company Reporter on August 27, 2004,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Paxson Communications Corp. to 'B-' from 'B' due to the
lack of convincing progress toward completing a strategic
transaction that would boost liquidity.

The outlook is negative. The West Palm Beach, Florida-based
television station owner and operator had approximately
$978.8 million of debt outstanding on June 30, 2004.

"The rating action reflects Standard & Poor's concerns that Paxson
has not executed a strategic transaction, including either an
investment by a strategic partner or an outright sale of the
company, that assures long-term liquidity," said Standard & Poor's
credit analyst Alyse Michaelson. In the absence of a viable
longer-term strategy, concerns related to the cash flow generating
capabilities of Paxson's assets, its onerous debt burden with
certain debt requiring cash interest in 2006, and the redemption
request by the National Broadcasting Company, Inc., have
intensified. Liquidity is far from sufficient to fund NBC's
roughly $575 million redemption request, although the redemption
request cannot trigger a default.


PHOENIX CDO: Moody's Puts B2 Rating on $31M Class II Secured Notes
------------------------------------------------------------------
Moody's Investors Service has confirmed the rating on the U.S.
$145,000,000 Class I Senior Secured Floating Rate Notes, Due 2011
of Phoenix CDO, Ltd., at A1 from A1 on watch for uncertain.  In
addition, Moody's has downgraded the U.S. $31,000,000 Class II
Senior Secured Fixed Rate Notes, Due 2011 to B2 from B1 on watch
for possible downgrade.  This rating action was due to the
continued deterioration of the collateral portfolio.

Rating Action Details:

Issuer: Phoenix CDO, Ltd.

   Tranche Description: U.S. $145,000,000 Class I Senior Secured
                        Floating Rate Notes, Due 2011

   Prior Rating:        A1 on watch, direction uncertain

   Current Rating:      A1
   
   Tranche Description: U.S. $31,000,000 Class II Senior Secured
                        Fixed Rate Notes, Due 2011

   Prior Rating:        B1 on watch for downgrade

   Current Rating:      B2


RCN CORP: Wants to Hire Financial Balloting as New Noticing Agent
-----------------------------------------------------------------
In June 2004, the U.S. Bankruptcy Court authorized RCN Corporation
and its debtor-affiliates to employ Innisfree M&A Incorporated as
noticing, voting, and information agent.  On August 20, 2004, the
key members of Innisfree's bankruptcy specialty practice composed
of Innisfree Director Jane Sullivan and the other professionals
who were performing or were to perform the noticing, voting and
information services required under the terms of the Innisfree
Retention Order left Innisfree and formed Financial Balloting
Group, LLC.

As a result of the Sullivan Group's transfer to FBG, Jay M.  
Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, in  
New York, relates that FBG now has the same expertise in the same  
areas as Innisfree.  FBG's principals and employees have  
significant experience providing counsel to large, publicly  
traded companies, including debtors-in-possession, in matters  
relating to communications with, and notices to, security  
holders, assistance with plan solicitations, and the tabulation  
of ballots with respect to Chapter 11 plans.

With the Court's permission, the Debtors employ FBG to assume  
Innisfree's duties.

As the Debtors' Solicitation Agent, FBG will:

   -- provide advice to the Debtors and their counsel regarding
      all aspects of the vote on the reorganization plan,
      including timing issues, voting and tabulation procedures,
      and documents needed for the vote;

   -- review the voting portions of the Disclosure Statement and
      ballots, particularly as they may relate to beneficial
      owners holding securities in "street name";

   -- work with the Debtors to request appropriate information
      from the trustee of the Senior Notes, the transfer agent of
      the Common Stock, and The Depository Trust Company;

   -- mail voting and non-voting documents to the registered
      record holders of the Senior Notes and Common Stock, and,
      if requested, other parties entitled to receive notice;

   -- coordinate the distribution of voting documents to "street
      name" holders of Senior Notes by forwarding the appropriate
      documents to the banks and brokerage firms holding the
      securities, who in turn will forward the documents to
      beneficial owners for voting;

   -- coordinate the distribution of non-voting documents to
      "street name" holders of Common Stock by forwarding the
      appropriate documents to the banks and brokerage firms
      holding the securities, who in turn will forward the
      documents to beneficial owners for voting;

   -- distribute copies of the master ballots to the appropriate
      nominees so that firms may cast votes on the beneficial
      owners' behalf;

   -- prepare a certificate of service for filing with the Court;

   -- handle requests for documents from parties-in-interest,
      including brokerage firm and bank back-offices and
      institutional holders;

   -- respond to telephone inquiries from holders regarding the
      Disclosure Statement and the voting procedures;

   -- if requested to do so, make telephone calls to confirm
      receipt of Plan documents and respond to questions about
      the voting procedures;

   -- if requested to do so, assist with any necessary efforts
      to identify beneficial owners of the Senior Notes and the
      Common Stock;

   -- receive and examine all ballots and master ballots cast by
      creditors and security holders.  FBG will date-stamp and
      time-stamp the originals of all the ballots and master
      ballots upon receipt;

   -- tabulate all ballots and master ballots received before the
      voting deadline in accordance with established procedures,
      and prepare a vote certification for filing with the Court;
      and

   -- undertake other duties as may be agreed upon by the Debtors
      and FBG.

In turn, the Debtors will compensate FBG on these terms:

   (a) A $15,000 project fee, plus $3,000 for each issue of
       public securities entitled to vote on the Plan, and
       $1,500 to $3,000 -- depending upon the number of holders
       in Street name -- for each issue of public securities not
       entitled to vote on the Plan but entitled to receive
       notice.  This fee category covers the coordination with
       all brokerage firms, banks, institutions and other
       interested parties, including the distribution of voting
       materials.  This assumes one distribution of materials,
       which will be directed to the firms' proxy departments,
       and no extensions of the voting deadline.

   (b) For the mailing to creditors and record holders of
       securities, labor charges will be estimated at $1.75 to
       $2.25 per package, with a minimum of $500, depending on
       the complexity of the mailing.  The charge indicated
       assumes the package would include the Disclosure
       Statement, a ballot, a return envelope, and one other
       document.  It also assumes that a window envelope will be
       used for the mailing, and will therefore not require a
       matched mailing.

   (c) A $4,000 minimum charge to take up to 500 telephone calls
       from creditors and security holders within a 30-day
       solicitation period.  If more than 500 calls are received
       within the period, those additional calls will be charged
       at $8 per call.  Any calls to creditors or security
       holders will be charged at $8 per call.

   (d) A charge of $100 per hour for the tabulation of ballots
       and master ballots, plus set up charges of $1,000 for each
       tabulation element.  Standard hourly rates will apply for
       any time spent by senior executives reviewing and
       certifying the tabulation and dealing with special issues
       that may develop:

            Co-Chairman                            $450
            Managing Director                       400
            Practice Director/Executive Director    375
            Director                                325
            Account Executive                       275
            Staff Assistant                         200

   (e) Consulting hours will be billed at the standard hourly
       rates.  Consulting services by FBG would include:

       -- the review and development of materials, including the
          Disclosure Statement, Plan, ballots, and master
          ballots;

       -- participation in telephone conferences, strategy
          meetings or the development of strategy relative to the
          project;

       -- efforts related to special balloting procedures,
          including issues that may arise during the balloting or
          tabulation process;

       -- computer programming or other project-related data
          processing services;

       -- visits to cities outside of New York for client
          meetings or legal or other matters;

       -- efforts related to the preparation of testimony and
          attendance at court hearings; and

       -- the preparation of affidavits, certifications, fee
          applications, invoices, and reports.

   (f) All out-of-pocket expenses relating to any work undertaken
       by FBG will be charged separately.

Jane Sullivan, executive director of FBG, assures the Court that  
the firm is a "disinterested person," as that term is defined in  
Section 101(14) of the Bankruptcy Code, and does not represent  
any other party-in-interest in the Debtors' Chapter 11 cases.   
FBG does not hold or represent any interest adverse to the  
Debtors' estates.

Headquartered in Princeton, New Jersey, RCN Corporation --  
http://www.rcn.com/-- provides bundled Telecommunications   
services.  The Company, along with its affiliates, filed for  
chapter 11 protection (Bankr. S.D.N.Y. Case No. 04-13638) on  
May 27, 2004.  Frederick D. Morris, Esq., and Jay M. Goffman,  
Esq., at Skadden Arps Slate Meagher & Flom LLP, represent the  
Debtors in their restructuring efforts.  When the Debtors filed  
for protection from their creditors, they listed $1,486,782,000 in
assets and $1,820,323,000 in liabilities. (RCN Corp. Bankruptcy
News, Issue No. 11; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


RELIANCE GROUP: Committee Questions PBGC's Claim Calculations
-------------------------------------------------------------
On December 19, 2001, the Pension Benefit Guaranty Corporation
filed claims in unliquidated amounts against Reliance Group
Holdings and its debtor-affiliates regarding the RGH Pension
Plan.  The PBGC has not filed amended claims because the Plan has
not yet terminated.  However, the PBGC recently calculated:

    -- the unfunded benefit liabilities at $17,400,000;
    -- the unpaid minimum funding contributions at $1,622,701; and
    -- the unpaid insurance premiums at $92,128.

The PBGC will file amended claims shortly.

James J. Keightley, the PBGC's General Counsel, tells the Court
that the Committees question the PBGC's calculations.  The
Committees propose to reduce the PBGC's claims by altering the
interest factor used to calculate the present value of the
unfunded benefit liabilities.  Mr. Keightley explains that the
PBGC's methodology for calculating unfunded benefit liabilities
was established by ERISA and agency regulation.  The PBGC
utilizes a valuation method with interdependent mortality,
retirement and interest assumptions that replicate the market
value of annuity contracts.  The initial interest factors are
derived from annuity price data obtained from the private
insurance industry.  The PBGC's interest assumptions are designed
so that, when coupled with the mortality assumptions, the benefit
values obtained for immediate and deferred annuities are in line
with industry annuity prices.

Additionally, the PBGC's regulation for measuring termination
liability promotes uniformity by replicating the price that an
employer would pay to close out a pension plan through the
purchase of annuities in the marketplace.  This assures that
termination liability will be measured in a fair, objective, and
consistent manner.

The Committees assert that the PBGC's minimum funding
contribution claims are duplicative of the unfunded benefit
liabilities claims.  Mr. Keightley explains that when a plan with
a negative net worth is involuntarily terminated, the PBGC
becomes the trustee of the plan.  The employer, however, is not
relieved of its liability to its employees under the plan.
Rather, the employer and members of its controlled group become
jointly and severally liable to the PBGC under ERISA for the
amount of the unfunded benefit liabilities.  When the employer is
bankrupt, the PBGC files a claim so that it can receive its share
of any distributions made to similarly situated creditors.  A
bankrupt employer retains an obligation to satisfy the claim.

The Committees complain that the PBGC did not use an accurate
asset figure for the Pension Plans when calculating the unfunded
benefit liabilities.  In amending the PBGC's claims for the RIC
Pension Plan, the PBGC reviewed the asset statement to make sure
an accurate asset figure was credited to the Plan.  The PBGC also
procured an asset statement for the RGH Pension Plan, based on
the proposed date of plan termination.  In other words, the PBGC
utilized the plan assets' value as stated by the custodian of
those assets.

The Committees assert that the PBGC's claims should be reduced to
account for recoveries the PBGC received or should have received
from non-debtor entities.  According to Mr. Keightley, under
joint and several liability, a creditor may chose what party to
pursue for recovery.  The PBGC has taken active steps to seek
recovery from the liquidation estate of RIC and certain other
controlled group members.  However, the PBGC's success or failure
is irrelevant.  Unless and until the PBGC's claims are paid in
full, the PBGC is not required to reduce its claims to account
for real or potential recoveries against non-debtor controlled
group members.  If the PBGC recovers money on account of the
missed minimum funding contributions, the PBGC will reassess the
unfunded benefit liabilities to adjust for an increase to plan
assets.

To date, the PBGC has recovered no monies for the missed minimum
funding contributions, and so, it is not appropriate to reduce
any of its claims.  If the PBGC recovers the full amount of the
unfunded benefit liabilities from the Pension Plans, the PBGC
will withdraw its claims.  However, a full recovery is unlikely
given the financial state of the Debtors and controlled group
members.

Headquartered in New York, New York, Reliance Group Holdings, Inc.
-- http://www.rgh.com/-- is a holding company that owns 100% of  
Reliance Financial Services Corporation. Reliance Financial, in
turn, owns 100% of Reliance Insurance Company. The holding and
intermediate finance companies filed for chapter 11 protection on
June 12, 2001 (Bankr. S.D.N.Y. Case No. 01-13403) listing
$12,598,054,000 in assets and $12,877,472,000 in debts. The
insurance unit is being liquidated by the Insurance Commissioner
of the Commonwealth of Pennsylvania. (Reliance Bankruptcy News,
Issue No. 60; Bankruptcy Creditors' Service, Inc., 215/945-7000)


RELIANT ENERGY: Fitch Affirms Single-B Ratings
----------------------------------------------
Fitch Ratings affirmed Reliant Energy, Inc.'s outstanding credit
ratings as follows:

   * $1.1 billion outstanding senior secured notes at 'B+';

   * $275 million outstanding convertible senior subordinated
     notes at 'B-'; and

   * indicative senior unsecured debt at 'B'.

The Rating Outlook is revised to Positive from Stable.

The Positive Rating Outlook reflects Reliant Energy's good
prospects for deleveraging and gradual credit quality improvement
over the next 12-18 months.  In Fitch's view, Reliant Energy has
adopted a constructive plan to improve its financial condition
ahead of its next major corporate level debt maturity in March
2007.  Recognizing the cyclical nature of its merchant energy
business, Reliant Energy has streamlined its corporate structure
and redesigned systems and processes with the goal of trimming
annual costs by an additional $200 million by 2006.  In addition,
Reliant Energy chose not to exercise its option to acquire an 81%
interest in Texas Genco, instead utilizing $917 million of cash
proceeds raised from prior asset sales to reduce its bank credit
facility.  Reliant Energy continues to pursue asset sales, which
are accretive to credit quality, the most recent being the
agreement to sell 770 megawatts of New York upstate generating
capacity for $900 million in cash.

From an operational standpoint, Reliant Energy has taken measures
to stabilize the performance of its wholesale merchant power
segment, which remains exposed to weak market fundamentals across
most U.S. regions.  In contrast to prior strategies, Reliant
Energy has become more focused on reducing the volatility
associated with its merchant generating fleet by locking in a
greater percentage of capacity over a two to three year time
horizon, including the forward sale of in the money coal-fired
capacity through 2006.  While this approach tends to cap potential
earnings upside, it should result in a more predictable cash flow
stream over the next several years.  In addition, Reliant Energy's
retrenchment from speculative energy trading activities has
further stabilized wholesale segment results.

A credit concern is the potential shrinkage of the high profits
and cash flow contributed by Reliant Energy's Texas retail
electric business.  Since the implementation of Texas electric
deregulation in January 2002, retail operations have performed as
designed, providing a partial hedge against wholesale earnings
volatility.  In particular, retail margins have benefited from
Reliant Energy's ability to lock in favorable wholesale gas and
power prices.  In addition, customer loss has generally been lower
than originally anticipated.  However, the sustainability of this
business could be impaired over time by increased competition and
less favorable wholesale power pricing dynamics.  In addition, the
pending Texas true-up proceedings could trigger a near-term
reduction in Reliant Energy's Houston in-territory gross margins
in January 2005.

Fitch expects Reliant Energy's consolidated leverage measures to
gradually strengthen through 2006, even under a scenario that
assumes limited recovery in current wholesale power market
conditions and lower levels of retail energy cash flow
performance.  The ratio of consolidated debt (adjusted to include
off-balance sheet debt and certain nonrecourse project financings)
to EBITDAR could approach the mid 4.0x range by year-end 2005
versus 5.7x as of Dec. 31, 2003.  In addition, Reliant Energy is
required to apply the net cash proceeds from the pending upstate
New York asset sale to reduce the Orion Power -- ORN -- New
York/Midwest term loan facilities ($1.1 billion [net of restricted
cash] outstanding as of June 30, 2004) scheduled to mature in
October 2005.  Early retirement of this debt would substantially
improve Reliant Energy's ability to extract excess cash generated
by ORN for debt service at the corporate level.

Fitch notes that Reliant Energy has made substantial progress in
resolving outstanding litigation and regulatory investigations,
including the recent settlement of a March 2003 show cause order
issued by the Federal Energy Regulatory Commission -- FERC --
related to Reliant Energy's Western energy trading activities.
Remaining items of significance include the April 2004 criminal
indictment of Reliant Energy's wholly owned subsidiary Reliant
Energy Services and various civil and shareholder class action
cases.  Reliant Energy's current ratings and outlook reflects
Fitch's expectation that these issues will ultimately be settled
in a manner that will not have a substantially adverse near-term
impact on overall liquidity.


SCHLOTZSKY'S: Franchisees Want Additional Committee Appointed
-------------------------------------------------------------
R. Glen Ayers, Esq., at Langley & Banack, Incorporated, counsel
for Steven Cole and James Magers, franchisees of Schlotzsky's,
Inc., and its debtor-affiliates, asks the U.S. Bankruptcy Court
for the Western District of Texas, San Antonio Division, to
appoint a committee of franchisees.

The United States Trustee previously declined to make the
appointment for several reasons including additional expense and
an expressed belief that the claims of the franchisee are largely
unliquidated or contingent.  The Trustee noted that one
franchisee, who is a member of the Official Committee of Unsecured
Creditors, holds a judgment against the Debtor.

Mr. Cole and Mr. Magers, on behalf of the other franchisees, argue
that the Committee is necessary to represent the interests of the
franchise owners in Schlotzsky's bankruptcy cases.  They stress
that the interests of the franchisee who sits on the Creditors
Committee are very different from their interests.

The franchisees believe that they collectively hold three large
claims against the Debtors for Advertising, Purchasing and Royalty
Claims.

The franchisees also express concern that the Debtor has defaulted
in providing support services necessary to ensure adequate quality
control.

The proposed sale of Schlotzsky's, Inc., they add, should be to a
buyer who does not compete directly with the Company's concept.  
Otherwise, the franchisees will be destroyed.

Headquartered in Austin, Texas, Schlotzsky, Inc. --
http://www.schlotzskys.com/-- is a franchisor and operator of  
restaurants. The Debtors filed for chapter 11 protection on August
3, 2004 (Bankr. W.D. Tex. Case No. 04-54504).  Amy Michelle
Walters, Esq. and Eric Terry, Esq., at Haynes & Boone, LLP,
represent the Debtors in their restructuring efforts. When the
Debtors filed for protection from its creditors, they listed
$111,692,000 in total assets and $71,312,000 in total debts.


SCOTT ACQUISITION: Wants Kronish Lieb as Bankruptcy Counsel
-----------------------------------------------------------
Scott Acquisition Corp. and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware for
permission to retain Kronish Lieb Weiner & Hellman LLP as
their bankruptcy counsel.

The Debtors tell the Court that Kronish Lieb is familiar with
their capital structure because of prepetition services provided
by the Firm.

In particular, Kronish Lieb will:

    a) take all necessary action to protect and preserve the
       estates of the Debtors, including the prosecutions of
       actions on the Debtors' behalf, the defense of any
       actions commenced against the Debtors, the negotiation
       of disputes in which the Debtors are involved, and the
       preparation of objections to claims filed against the
       estates;
    
    b) prepare on behalf of the Debtors, as
       debtors-in-possession, all necessary motions, applications,
       answers, orders, reports, and papers in connection with the
       administration of the estates;

    c) prosecute, on behalf of the Debtors, a proposed plan of
       reorganization and all related transactions and any
       revisions, amendments, and modifications; and

    d) perform all other necessary legal services in connection
       with these chapter 11 cases.

Lawrence C. Gottlieb, Esq., Richard S. Kanowitz, Esq., and Jeffrey
L. Cohen, Esq., are the lead attorneys who will represent the
Debtor.  Kronish Lieb received a $135,000 retainer.

The current hourly rates charged by Kronish Lieb professionals
who will render services to the Debtors are:

       PROFESSIONAL            DESIGNATION            RATES
       ------------            -----------            -----
       Lawrence C. Gottlieb    Partner                $675
       Richard S. Kanowitz     Senior Associate        420
       Jeffrey L. Cohen        Associate               275
       Rebecca Goldstein       Paralegal               170

To the best of the Debtors knowledge, Kronish Lieb is
"disinterested" as that term is defined in Section 101(14) of the
Bankruptcy Code.

Headquartered in Winter Haven, Florida, Scott Acquisition Corp.,
is a retailer of a wide range of building materials and home
improvement products serving the "do-it-yourself" market for
individual homeowners, as well as the professional builder and
commercial markets.  The Debtors filed for protection on
September 10, 2004 (Bankr. D. Del. Case No. 04-12594).  
When the Company and its debtor-affiliates filed for protection
from its creditors, it reported $45,681,000 in assets and
$30,068,000 in debts.


SK GLOBAL: Court Confirms Chapter 11 Plan of Liquidation
--------------------------------------------------------
SK Global America, Inc., stepped Judge Blackshear through the 13
statutory requirements under Section 1129(a) of the Bankruptcy
Code necessary to confirm its Plan of Liquidation:

A. The Plan complies with all applicable provisions of the
    Bankruptcy Code, thereby satisfying the requirements of
    section 1129(a)(1) of the Bankruptcy Code and, as required by
    Rule 3016(a) of the Federal Rules of Bankruptcy Procedure, is
    dated and specifically identifies the Debtor as the proponent
    of the Plan.

B. The Debtor, as proponent of the Plan, has complied with the
    applicable provisions of the Bankruptcy Code, the Bankruptcy
    Rules, the Local Bankruptcy Rules and the orders of the Court
    with respect to the Plan.  Good, sufficient and timely notice
    of the Confirmation Hearing has been given to holders of
    Claims and Equity Interests and to other parties-in-interest
    to whom notice is required to be given in accordance with the
    Disclosure Statement Order.  The solicitation of votes was
    made in good faith and in compliance with the applicable
    provisions of the Bankruptcy Code and Bankruptcy Rules and all
    other rules, laws and regulations.  Ballots of holders of
    Claims entitled to vote on the Plan were properly solicited
    and tabulated in accordance with the Disclosure Statement
    Order.  Holders of at least two-thirds in amount and one-half
    in number of the Claims actually voting in Classes 3, 4, 5, 6,
    7 and 8 have accepted the Plan.  Holders of Claims in Classes
    1 and 2 are not impaired under the Plan and were not entitled
    to vote to accept or reject the Plan.  Holders of Claims in
    Class 9 and holders of Equity Interests in Class 10 are
    conclusively presumed to have rejected the Plan, and were not
    entitled to vote on the Plan.  Therefore, the Debtor has
    satisfied the requirements of section 1129(a)(2) of the
    Bankruptcy Code.

C. The Plan, and the compromises and settlements embodied in the
    Plan, has been proposed in good faith and not by any means
    forbidden by law, as evidenced by, among other things, the
    totality of the circumstances surrounding the formulation of
    the Plan, the record of the Case, and by the recoveries of
    holders of Claims.  Therefore, the Plan satisfies the
    requirements of section 1129(a)(3) of the Bankruptcy
    Code.

D. Any payment made or to be made under the Plan or by any person
    acquiring property under the Plan, for services or for costs
    and expenses in, or in connection with, the Case, or in
    connection with the Plan and incident to the Case, has
    been approved by, or will be subject to the approval of, the
    Court as reasonable, thereby satisfying the requirements of
    section 1129(a)(4) of the Bankruptcy Code.

E. The current members of the Debtor's Board of Directors will
    serve as members of the Debtor's Board of Directors following
    the Effective Date, pending its formal dissolution under
    applicable state law.  Therefore, the Debtor has satisfied the
    requirements of section 1129(a)(5) of the Bankruptcy Code.

F. Section 1129(a)(6) of the Bankruptcy Code is inapplicable to
    the Case because the Plan does not contain rate changes for
    which a governmental regulatory commission has jurisdiction
    after confirmation.

G. Section 1129(a)(7) of the Bankruptcy Code requires each holder
    of a Claim or Equity Interest in an impaired Class to accept
    the Plan, or receive or retain under the Plan property having
    a value, as of the Effective Date of the Plan, that is not
    less than the amount that such holder would receive on account
    of that Claim or Equity Interest if the Debtor was liquidated
    under Chapter 7 of the Bankruptcy Code.  These Classes are
    impaired under the Plan:

       -- Class 3,
       -- Class 4,
       -- Class 5,
       -- Class 6,
       -- Class 7,
       -- Class 8,
       -- Class 9, and
       -- Class 10.

    Each holder of a Claim or Equity Interest in those Classes has
    either accepted the Plan, or will receive or retain under the
    Plan property having a value, as of the Effective Date of the
    Plan, that is not less than the amount that that holder would
    receive or retain if the Debtor was liquidated under Chapter 7
    of the Bankruptcy Code on such date.  The Plan, therefore,
    satisfies the requirements of section 1129(a)(7) of the
    Bankruptcy Code.

H. Section 1129(a)(8) of the Bankruptcy Code requires that for
    each Class of Claims or Equity Interests under the Plan, that
    Class has either accepted the Plan or is not impaired under
    the Plan.  Impaired Classes 3, 4, 5, 6, 7 and 8 have each
    accepted the Plan.  Unimpaired Classes 1 and 2 are
    conclusively presumed to have accepted the Plan without the
    solicitation of acceptances or rejections pursuant to section
    1126(f) of the Bankruptcy Code.  Impaired Classes 9 and 10 are
    deemed to have rejected the Plan.  Because the impaired
    Classes 9 and 10 have not accepted the Plan, the requirements
    of section 1129(a)(8) have not been met, thereby requiring
    application of section 1129(b) of the Bankruptcy Code.

    Neither holders of SKN Affiliate Trade Claims in Class 9 nor
    holders of Equity Interests in Class 10 will receive any
    Distribution or retain any value under the Plan and,
    accordingly, are deemed to have rejected the Plan pursuant to
    section 1126(g) of the Bankruptcy Code.  These are the only
    Classes which have not accepted, or have been deemed to have
    rejected, the Plan.  Pursuant to section 1129(b) of the
    Bankruptcy Code, the Court finds that the Plan does not
    discriminate unfairly and is fair and equitable with respect
    to the treatment of Claims and Equity Interests in Classes 9
    and 10.  With respect to Classes 9 and 10, as required by
    section 1129(b)(2)(B) of the Bankruptcy Code, there are no
    holders of a Claim or Equity Interest junior to the holders of
    Claims in Class 9 or Equity Interests in Class 10, which is to
    receive or retain under the Plan any property on account of
    that junior Claim or Equity Interest.  Thus, the Plan
    satisfies section 1129(b) of the Bankruptcy Code with
    respect to Classes 9 and 10.

I. The Plan satisfies the requirements of section 1129(a)(9) of
    the Bankruptcy Code since, except to the extent that the
    holder of a particular Claim has agreed to a different
    treatment of that Claim, the Plan provides that:

       (i) the holder of each Allowed Administrative Expense Claim
           will be paid in full, in Cash; and

      (ii) the holders of Allowed Priority Tax Claims and Allowed
           Priority Non-Tax Claims will be paid in full, in Cash,
           or in those amounts and on other terms as may be agreed
           to by the holders of those Claims and the Debtor, or
           according to the ordinary business terms of the Debtor
           and those holders.

J. The provisions of section 1129(a)(10) of the Bankruptcy Code
    are satisfied because at least one impaired Class of Claims
    (i.e., Classes 3 and 4) has accepted the Plan, determined
    without inclusion of any acceptance of the Plan by any
    insider.

K. Confirmation of the Plan is not likely to be followed by the
    liquidation, or the need for further financial reorganization
    of, the Debtor, except as proposed by the Plan.  The Plan
    provides for the liquidation and distribution of all of
    the Debtor's remaining assets.  Therefore, the Plan satisfies
    section 1129(a)(11) of the Bankruptcy Code.

L. The Debtor has paid, or will pay as provided by the Plan, all
    amounts due under Section 1930 of the Judiciary Code, thereby
    satisfying the requirements of section 1129(a)(12) of the
    Bankruptcy Code.

M. There are no retiree benefits, as that term is defined in
    section 1114 of the Bankruptcy Code, to be continued by the
    Debtor as to any current or former employees.  Thus, section
    1129(a)(13) of the Bankruptcy Code is inapplicable to the
    Case.

Finding that the Plan complies with the statutory requirements,
Judge Blackshear confirmed the Debtor's Liquidation Plan on
September 15, 2003.  The Court overruled all objections that have
not been withdrawn or otherwise resolved.  Specifically, the Court
overruled the objection filed by Harris County/City of Houston and
Houston Independent School District, which complained, among other
things, that the Plan's classification of claims is unclear.

A free copy of the Confirmation Order is available at:

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

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.


SOLOMON EQUITIES INC: List of 13 Largest Unsecured Creditors
------------------------------------------------------------
Solomon Equities, Inc., released a list of its 13 Largest
Unsecured Creditors:

    Entity                    Nature Of Claim       Claim Amount
    ------                    ---------------       ------------
The Parker Family Entities    Purchase Money          $1,100,000
c/o Ed McDermott              Value of Security:
2114 Franklin Avenue          $600,000
Arlington, Texas

Andrew T. Melton              Management Contract       $257,000
7750 N. MacArthur Boulevard   Value of Security:
Suite 120-255                 $120,000
Irving, Texas 75063

Comptroller of Public         Sales Taxes               $181,359
Accounts                      Penalties and Interest


Comptroller of Public         Liquor Taxes               $37,288
Accounts                      Penalties and Interest

Sysco Foods                   Open Account               $32,000

Coca Cola of North Texas      Open Account                $6,500

BMI General Licensing         Open Account                $3,800

TXU Gas                       Utilities                   $2,500

City of Grapevine             Utilities                   $2,500

Grapevine Mills LP            Open Account                $2,356

Verizon                       Telephone                   $2,117

ISI Commercial Refrigeration  Ice Machine Lease           $1,697

Culligan                      Open Account                $1,648

Headquartered in Irving, Texas, Solomon Equities, Inc., operates a
restaurant. The Company filed for chapter 11 protection on August
26, 2004 (Bankr. N.D. Tex. Case No. 04-39152).  Norman A. Zable,
Esq., in Dallas, Texas, represents the Company in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it listed both estimated assets and debts of over
$1 million.


SOLUTIA INC: Asks Court to Extend Exclusive Periods
---------------------------------------------------
Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher, LLP, in New
York, tells the U.S. Bankruptcy Court for the Southern District of
New York that during the first nine months of their Chapter 11
cases, Solutia, Inc., and its debtor-affiliates focused on taking
the steps necessary to enable productive and constructive
negotiations with respect to a Chapter 11 plan.  After nine months
of work, the building blocks for those negotiations are continuing
to move into place and preliminary discussions regarding the
framework of a Chapter 11 plan have begun.  Significant progress
has been made in the past nine months with respect to four
critical areas:

    (a) stabilization of the Debtors' businesses and development
        and implementation of their business plan;

    (b) productive discussions with creditor and equity
        constituencies;

    (c) clarification of challenging legal issues and positions
        important to finalizing a reorganization plan; and

    (d) establishment of a bar date.

Mr. Reilly discloses that there is much left to do and while the
parties have begun initial plan discussions, it would be
impossible to conclude those negotiations in time to finalize and
confirm a reorganization plan within the current Exclusive
Periods.

Accordingly, the Debtors ask the Court to further extend:

    -- their exclusive period to file a reorganization plan to
       January 10, 2005, and

    -- their exclusive period to solicit acceptances of that
       plan to March 10, 2005.

The Debtors believe that they have taken important steps toward
preserving and maximizing the value of their business enterprises:

    * The Debtors have continued to identify and implement cost
      savings measures under the business plan by:

      -- retaining a real estate broker in connection with the
         relocation or renegotiation of Solutia, Inc.'s corporate
         headquarters;

      -- continuing to analyze their complex contractual
         relationships with significant vendors; and

      -- obtaining Court approval to enter into secured risk
         management transactions that will enable them to
         hedge against certain risks of fluctuating natural gas
         prices;

    * The Debtors also have continued to implement their business
      plan by working with their postpetition lenders to amend
      their DIP Agreement so as to permit the restructuring of
      certain contractual and lease obligations and the
      streamlining of business operations through the wind-down or
      sale of certain businesses.  The Debtors are currently
      exploring sale opportunities relating to their
      pharmaceutical services line of business, which they believe
      will maximize value and reduce interest expense for their
      European subsidiaries.  The Debtors have also begun the
      process of exploring and preparing for a possible sale of
      all or a significant part of their business.  Exploring that
      possibility may be determined to maximize estate value or
      validate conclusions about the value of the Debtors'
      businesses;

    * In connection with the amendment to their DIP Agreement, the
      Debtors sought the Court's authority to replace an expensive
      back-to-back letter of credit structure securing Solutia's
      obligations to Astaris, LLC, with a single letter of credit,
      which resulted in savings of about $800,000 and allowed
      Solutia to increase its liquidity.  Furthermore, the Debtors
      obtained the Court's approval to pay fully secured letter of
      credit-related claims by allowing a set-off against and
      payment from the cash collateral securing those claims to
      cease incurring interest on oversecured claims; and

    * The Debtors obtained Court approval to make a voluntary
      $11,000,000 contribution to their qualified pension plan,
      which had the effect of saving $30,000,000 to $40,000,000 in
      pension expense for each of the next several years, reducing
      overall pension funding requirements over the next five
      years by $110,000,000 and deferring the next required
      contribution to the pension plan to January 2006.

        Discussions With Creditor and Equity Constituencies

Mr. Reilly relates that in the past three months, the Debtors have
worked with the Official Committee of Unsecured Creditors,
Official Committee of Retirees, and the Official Committee of
Equity Security Holders to prepare for plan negotiations:

    * Both the Debtors and the Creditors Committee have developed
      outlines for reorganization plans that can form the basis of
      negotiation.  The Creditors Committee's outline has been
      shared with the Debtors, Monsanto Company and Pharmacia
      Corporation, and the Debtors have been informed that
      Monsanto and Pharmacia are formulating a substantive
      response, which is expected to be received within the month;

    * The Debtors have negotiated an agreement with the Equity
      Committee regarding the scope of its discovery requests
      pursuant to Rule 2004 of the Federal Rules of Bankruptcy
      Procedure, to gain the necessary core knowledge about the
      Debtors' businesses and financial condition.  The Debtors
      already have begun producing information to the Equity
      Committee and will continue to do so.  Furthermore, the
      Debtors believe that the Equity Committee intends to meet
      with Monsanto and Pharmacia to negotiate a similar agreement
      on the scope of its Rule 2004 discovery request against
      them; and

    * The Debtors have worked with the Retiree Committee and the
      unions representing their employees to clarify the scope of
      the Retiree Committee's representation of retirees formerly
      covered by collective bargaining agreements.  The Retiree
      Committee recently filed a proposed order to implement the
      clarification arrived at by the parties.

                  Clarification and Stabilization
                      of Litigation Positions

To date, the Debtors and other parties have pursued a dual-track
strategy of litigation and negotiation with respect to several
complex issues.  The parties have continued to focus on
negotiation to resolve some of these complex issues rather than
litigation.  In this regard, effective as of September 12, 2004,
Solutia, Monsanto, Pharmacia, the Creditors Committee and the
Retiree Committee have extended by 30 days the standstill
agreement with respect to litigation among them as they continue
to work through the complex issues.

                             Next Steps

Although the Debtors are pleased with recent progress in their
Chapter 11 cases, the work to be done and the complexity of the
issues that they face will preclude them from being able to
formulate a workable Chapter 11 plan in the short term, Mr.
Reilly says.  The Debtors have identified a short list of next
steps aimed ultimately to negotiation and proposal to the Court of
a Chapter 11 plan, including:

    (a) continuing to implement and refine their business plan,
        including using the tools of bankruptcy to reduce or
        eliminate operating liabilities and improve cash flows;

    (b) identifying and quantifying their potential liabilities
        embodied in the proofs of claim filed by creditors
        pursuant to the bar date motion, including considering the
        best way to proceed toward an effective and appropriate
        discharge of those liabilities;

    (c) continuing preliminary discussions concerning a framework
        of a Chapter 11 plan with key constituencies;

    (d) evaluating the potential for asset sales; and

    (e) working toward a more firm valuation of their domestic and
        foreign businesses.

The Debtors have been working diligently toward completing these
steps and anticipate significant further work and progress in
these areas.

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.


SPIEGEL INC: Eddie Bauer Taps Stephen Cirona as VP-Design
---------------------------------------------------------
Eddie Bauer Inc., the premium outdoor-inspired casual wear brand,
reported that Stephen Cirona has joined the company as vice
president, design. Mr. Cirona will report to Kathy Boyer, senior
vice president, chief merchandising officer and will be based in
the company's headquarters in Redmond, Wash.

Mr. Cirona was a key player in the growth and expansion of Tommy
Hilfiger USA, Inc. He joined the company in 1996 as vice
president, creative and most recently served as executive vice
president, men's global creative director. In his EVP role, he
conceptualized, created and launched an in-house corporate design
group and oversaw design direction, seasonal inspiration, fashion
trends and color strategies for lines ranging from Men's
Sportswear to Tommy Jeans to accessories.

Currently president and principal director of Stephen Cirona New
York, Inc., Mr. Cirona has created custom clothes for Harry
Connick Jr., Alan Cumming, Thomas Gibson, Anthony LaPaglia,
Aerosmith, Sheryl Crow, Iggy Pop, No Doubt, Sugar Ray, Deborah
Harry and Blondie, The Goo Goo Dolls and Stephen Jenkins of Third
Eye Blind.

"Stephen is an exceptional talent bringing extraordinary
experience to Eddie Bauer," said Ms. Boyer. "His passion for
product design, combined with a great understanding of all retail
creative functions, will be a key asset in the completion of our
turnaround. We look forward to seeing Stephen's talents brought to
life through creative, casual, innovative styles for the Eddie
Bauer customer to live, work and play in."

"Eddie Bauer has shown they are more than just a brand with a
great heritage," said Mr. Cirona. "Over the past few seasons,
Bauer has introduced lines that are relevant and modern to today's
adult customer. I am excited to join the team and lend my
expertise and creativity to refine the company's product
offering."

Mr. Cirona, who will join the company on September 22, was the
recipient of Pratt Institute's Excellence by Design Award and was
selected by DNR as one of the fashion industry's "Top 40 under 40"
in 1999. He holds a BFA with honors, in fashion design from Pratt
Institute.

Eddie Bauer is a premium outdoor-inspired casual wear brand
offering distinctive clothing, accessories and home furnishings
for men and women that reflect a modern interpretation of the
company's unique outdoor heritage.

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


STELCO INC: Warns Traders of Woes Amidst Bullish Stock Trading
--------------------------------------------------------------
Stelco, Inc., (TSX:STE) issued this update on its Court-supervised
restructuring in response to recent speculation and changes in the
trading price of the Company's shares:

   "The unforeseen and unprecedented change in the steel pricing
environment has eased Stelco's immediate liquidity crisis.  But
what many still view as unsustainably high prices cannot address
the Company's long term structural problems.

   "Stelco faces a growing competitiveness gap with its
competitors.  Many of them are benefiting even more from the same
high steel prices because of their lower cost structure and their
ability to raise and invest capital to upgrade their operations.

   "The fact remains that Stelco is insolvent. It does not have
the money to repay the more than $550 million in stayed debt and
other obligations that would become due and payable should the
Company's CCAA process be terminated.

   "In addition, Stelco has approximately $250 million outstanding
on its main operating line of credit.  The Company also requires
$360 to $465 million for its critical capital expenditure program.

   "That said, these historically high steel prices have provided
Stelco with some flexibility in approaching its restructuring.  
The Company is planning, and will seek the Court's permission in
the coming weeks, to embark on a process to determine what capital
may be available to help address Stelco's obligations and to
finance its critical capital expenditure program.  Once the
Company knows what capital is available to deal with its debt and
other obligations, and under what conditions, it will have a
better idea of what other restructuring activity may be required.

   "Stelco is not aware of any corporate developments that would
account for recent changes in the trading price of the Company's
shares.  While the shares continue to be traded, there is a
significant risk that they will have no value when a restructuring
plan is completed."

                      Stock Price Rocketed

According to Reuters, Stelco shares have soared 83 percent in the
past week to their highest level since January, when debt, high
costs and dwindling cash pushed the company into court protection.

On Thursday, the shares rose 25 percent to C$1.50 on the Toronto
Stock Exchange before retreating to close at C$1.05 on Friday,
even though Canada's biggest steelmaker by production warned they
could become worthless.

                          About Stelco

Stelco, Inc., which is currently undergoing CCAA restructuring
proceedings, is a large, diversified steel producer. Stelco is
involved in all major segments of the steel industry through its
integrated steel business, mini-mills, and manufactured products
businesses. Consolidated net sales in 2003 were $2.7 billion.


STONE TOWER: Moody's Assigns Ba2 Rating to Class D Notes
--------------------------------------------------------
Moody's Investors Service assigned these ratings to Notes issued
by Stone Tower CLO II Ltd.:

   * Aaa to the Class A-1 Floating Rate Notes Due 2013,
   * Aa2 to the Class A-2 Floating Rate Notes Due 2013,
   * A2 to the Class B Deferrable Floating Rate Notes Due 2013,
   * Baa2 to the Class C Floating Rate Notes Due 2013, and
   * Ba2 to the Class D Floating Rate Notes due 2013.

The Moody's ratings of the Notes address the ultimate cash receipt
of all required interest and principal payments, as provided by
the Notes' governing documents, and are based on the expected loss
posed to holders of the Notes, relative to the promise of
receiving the present value of such payments.

The ratings reflect:

   * the risks due to the diminishment of cash flow from the
     underlying portfolio (consisting primarily of corporate debt
     securities and synthetic securities) due to defaults,

   * the safety of the transaction's legal structure, and

   * the characteristics of the underlying assets.

Certain administrative and advisory functions with respect to the
collateral will be performed by Stone Tower Debt Advisors, LLC.


SURFSIDE RESORT: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Surfside Resort and Suites, Inc.
        251 South Atlantic Avenue
        Ormond Beach, Florida 32176

Bankruptcy Case No.: 04-05948

Type of Business: The Debtor operates vacation resort,
                  restaurant and lounge.
                  See http://www.daytonasurfsideandsuites.com/

Chapter 11 Petition Date: September 17, 2004

Court: Middle District of Florida (Jacksonville)

Judge: Jerry A. Funk

Debtor's Counsel: Walter J. Snell, Esq.
                  Snell & Snell, P.A.
                  436 North Peninsula Drive
                  Daytona Beach, FL 32118-4073
                  Tel: 386-255-5334
                  Fax: 386-255-5335

Total Assets: $19,598,145

Total Debts:  $9,289,843

Debtor's 20 Largest Unsecured Creditors:

   Entity                     Nature Of Claim       Claim Amount
   ------                     ---------------       ------------
Catherine III LLC                                       $169,931

FL Dept. of Revenue           Sales tax                  $60,167

GMAC Commercial Mortgage                                 $50,582

System Solutions LLC          Business Debt              $34,767

IRS                           2002-941 taxes             $34,507

William Schmidt                                          $30,000

J.L. Cohen & Associates       Tax preparation            $18,250

Cobb & Cole                   Attorney fees              $13,918

LodgeNet Entertainment Corp.                             $12,011

Traveler Discount Guide       Advertising                 $9,521

Florida Supply & Cleaning     Supplier                    $7,365
Inc.

ASSA ABOLY Hospitality Inc.   Supplier                    $4,147

Sand Dollar Resort Services   Repair                      $3,991

East Coast Refrigeration Inc. Repairs                     $3,443

Lowes Home Centers Inc.       Supplier                    $2,641

Guest Distribution            Supplier                    $2,195

Ice and Juice Systems         Supplier                    $2,143

Ecolab                        Lease of restaurant         $1,938

Trayco                        Supplier                    $1,642

Southern Printing             Supplier                    $1,571


THREE RIVERS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Three Rivers Bottling, LLC
        Building 204B
        Schreiber Industrial Park
        New Kensington, PA 15068

Bankruptcy Case No.: 04-32204

Type of Business: The Company uses a high-speed, automated
                  process in manufacturing bottles, jars, and
                  glass.

Chapter 11 Petition Date: September 14, 2004

Court: Western District of Pennsylvania (Pittsburgh)

Judge: Bernard Markovitz

Debtor's Counsel: John P. Vetica, Jr., Esq.
                  600 Commerce Drive, Suite 601
                  Moon Township, Pennsylvania 15108-3106
                  Tel: 412-299-3820
                  Fax: 412-299-3823

Total Assets:  $293,081

Total Debts: $2,234,119

Debtor's 20 largest unsecured creditors:

    Entity                    Nature Of Claim       Claim Amount
    ------                    ---------------       ------------
Community Loan Fund of        Chattel Paper             $456,632
SW PA, Inc.                   Value of Security:
1920 Gulf Tower               $539,589
707 Grant Street
Pittsburgh, PA 15219

Honest Tea, Inc.              Trade Debt                $452,592
4948 Saint Elmo Avenue        Value of Security
Suite # 304                   Unknown
Bethesda, Maryland 20814

Devine Foods, Inc.            Trade Debt                $419,990
One Logan Square, Suite 2800  Value of Security
Philadelphia, PA 19103        Unknown

Vancol Industries             Business Loan             $423,289
1700 East 68th Avenue
Denver, Colorado 80229

Internal Revenue Service      Taxes                     $114,185

Rockwood Casualty Insurance   Trade Debt                 $92,572
Company

Duane, Morris & Heckscher LLP                            $50,962

State Workers Insurance Fund  Trade Debt                 $43,638

Equipco                       Trade Debt                 $22,799

Plummer Harty Attorneys       Trade Debt                 $17,885

Pennsylvania Department of                               $14,684
Labor and Industry

Sagar Enterprises, Inc.       Trade Debt                 $13,317

DKW Law Group                 Trade Debt                 $11,441

Municipal Sanitary Authority                             $10,801

Stretchpak, Inc.              Trade Debt                  $9,821

Chemstation                   Trade Debt                  $8,117

Chemway, Inc.                 Trade Debt                  $6,946

Garnell Associates            Trade Debt                  $6,031

Harleysville Insurance        Trade Debt                  $5,714

Allegheny Power               Trade Debt                  $5,450


TIAA REAL ESTATE: Fitch Assigns BB Rating on $17.5M Class IV Notes
------------------------------------------------------------------
Fitch Ratings affirms all classes of the notes issued by TIAA Real
Estate CDO 2002-1 Ltd. / TIAA Real State CDO 2002-1 Corp.  The
affirmations are the result of Fitch's review process.  These
rating actions are effective immediately:

   -- $377,000,000 class I notes affirmed at 'AAA';
   -- $17,000,000 class II-FL notes affirmed at 'A-';
   -- $17,000,000 class II-FX notes affirmed at 'A-';
   -- $46,500,000 class III notes affirmed at 'BBB';
   -- $17,500,000 class IV notes affirmed at 'BB';
   -- $25,000,000 preferred equity affirmed at 'BB-'.

TIAA Real Estate CDO 2002-1 is a collateralized debt obligation
(CDO), which closed May 22, 2002, supported by a static pool of
commercial mortgage-backed securities (CMBS; 66.3%) and senior
unsecured real estate investment trust securities (REIT; 33.7%).
Fitch has reviewed the credit quality of the individual assets
comprising the portfolio.

According to the August 2004 trustee report the senior over-
collateralization(OC)test was 132.6%, the mezzanine OC test was
109.3% and the junior OC test was 105.3%, relative to test levels
of 120.4%, 104.9% and 102.6%, respectively. The weighted average
rating factor has moved from 16.8 ('BBB'/'BBB-') as of August 20,
2002 to 22.0 ('BBB-') as of the August 20, 2004 rating agency
report.

To date there have been $12.3 million in distributions to the
preferred equity. The rating of the preference equity addresses
the likelihood that investors will receive ultimate payment of the
initial preference share balance by the legal final maturity date.

TIAA selected the initial collateral and TIAA Advisory Services
LLC (TAS) serves as the collateral administrator. Fitch Ratings
has discussed TIAA Real Estate CDO 2002-1 with TAS and will
continue to monitor TIAA Real Estate CDO 2002-1 closely to ensure
accurate ratings.

Based on the stable performance of the underlying collateral and
the over-collateralization tests, Fitch has affirmed all of the
rated liabilities issued by TIAA Real Estate CDO 2002-1.


TIAA REAL ESTATE: Fitch Puts BB Rating on $12.5 Class E Notes
-------------------------------------------------------------
Fitch Ratings affirms all classes of the notes issued by TIAA Real
Estate CDO 2003-1 Ltd./TIAA Real Estate CDO 2003-1 Corp.  The
affirmations are the result of Fitch's review process.  These
rating actions are effective immediately:

   -- $222,000,000 class A-1 MM floating rate notes 'AAA'/'F1+';
   -- $10,000,000 class B-1 floating rate notes 'AA';
   -- $2,000,000 class B-2 fixed rate notes 'AA';
   -- $16,000,000 class C-1 floating rate notes 'A-';
   -- $14,000,000 class C-2 floating rate notes 'A-';
   -- $13,500,000 class D floating rate notes 'BBB';
   -- $12,000,000 class E floating rate notes 'BB'.

TIAA Real Estate CDO 2003-1 is a collateralized debt obligation --
CDO, which closed November 6, 2003, supported by a static pool of:

   * commercial mortgage-backed securities (CMBS; 53.4%),

   * senior unsecured real estate investment trust securities
     (REIT; 45.8%), and

   * collateralized debt obligations (CDO; 0.8%).

Fitch has reviewed the credit quality of the individual assets
comprising the portfolio.

According to the June 2004 trustee report:

      Class      Overcollateralization      Test Levels
      -----      ---------------------      -----------
      Class                     135.6%           125.0%
      Class B                   128.7            122.0
      Class C                   114.0            108.0
      Class D                   108.5            104.0
      Class E                   104.0            101.5

TIAA selected the initial collateral and TIAA Advisory Services
LLC serves as the collateral administrator.  Fitch Ratings has
discussed TIAA Real Estate CDO 2003-1 with TIAA Advisory and will
continue to monitor the transaction closely to ensure accurate
ratings.

Based on the stable performance of the underlying collateral and
the over-collateralization tests, Fitch has affirmed all of the
rated liabilities issued by TIAA Real Estate CDO 2003-1.


TRANSMONTAIGNE INC: Closes New 5-Year $400 Million Bank Loan
------------------------------------------------------------
TransMontaigne Inc. (AMEX: TMG) closed on a new 5-year,
$400 million Senior Secured Working Capital Credit Facility with a
syndicate of financial institutions on September 13, 2004. This
new facility replaces TransMontaigne's former $275 million Working
Capital Credit facility.

The Senior Secured Working Capital Credit Facility will be used
primarily to finance TransMontaigne's working capital
requirements. Availability under the facility is limited to the
lesser of $400 million or a borrowing base amount that is defined
by applying varying advance rates to our unrestricted cash,
accounts receivable and inventory and deducting reserves for our
state excise taxes and certain other costs. The initial funding
under the facility consisted of borrowings of $28.3 million and
letters of credit with a face amount of $46.8 million. The Working
Capital Credit Facility also contains a minimum fixed charge
coverage ratio requirement of 110% that is tested, on a quarterly
basis, if average monthly excess availability is less than $75
million.

The Working Capital Credit Facility contains affirmative and
negative covenants (including limitations on indebtedness,
limitations on dividends and other distributions, limitations on
mergers, consolidation and the disposition of assets, limitations
on investments and acquisitions and limitations on liens) that are
customary for a facility of this nature. The Working Capital
Credit Facility also contains customary representations and
warranties (including those relating to corporate organization and
authorization, compliance with laws, absence of defaults, material
contracts and litigation) and customary events of default
(including those relating to monetary defaults, covenant defaults,
cross defaults, change of control and bankruptcy events).

TransMontaigne's operating subsidiaries have guaranteed the
obligations of TransMontaigne under the Working Capital Credit
Facility. TransMontaigne and the subsidiary guarantors have also
executed and delivered certain other related agreements and
documents pursuant to the Working Capital Credit Facility,
including a security agreement, guarantee agreements and a pledge
agreement. The obligations of TransMontaigne and its operating
subsidiaries under the Working Capital Credit Facility are secured
by a first priority security interest in favor of the Agent for
the benefit of the lenders, in TransMontaigne's and such
subsidiaries' cash, accounts receivable, refined petroleum product
inventory and, upon the satisfaction of certain conditions, a
portion of their real estate and fixed assets, among other things.

                        About the Company

TransMontaigne Inc. -- http://www.transmontaigne.com/-- is a  
refined petroleum products distribution and supply company based
in Denver, Colorado, with operations in the United States,
primarily in the Gulf Coast, Midwest and East Coast regions. It's
principal activities consist of (i) terminal, pipeline, and tug
and barge operations; (ii) supply, distribution and marketing; and
(iii) supply management services. TransMontaigne's customers
include refiners, wholesalers, distributors, marketers and
industrial and commercial end-users of refined petroleum products.

                          *     *     *

As reported in the Troubled Company Reporter on July 20, 2004,
Standard & Poor's Ratings Services affirmed its ratings on
TransMontaigne Inc. (BB-/Developing/--) and revised its outlook to
developing from negative. The rating actions follow
TransMontaigne's announcement that it will "evaluate strategic
alternatives". In the absence of TransMontaigne selling itself to
a higher-rated entity, Standard & Poor's would caution that the
probability of a ratings downgrade exceeds that of a ratings
upgrade, because TransMontaigne's operating and financial trends
have been weaker than expected for some time.

"The change to a developing outlook reflects Standard & Poor's
uncertainty about the possible outcome of TransMontaigne's
actions," noted Standard & Poor's credit analyst Paul B. Harvey.
Standard & Poor's is currently unaware of any pending acquisition
or refinancing of TransMontaigne. "If TransMontaigne is acquired
by a higher-rated entity, credit quality could improve; however,
an acquisition by a lower-rated entity or a refinancing could
negatively affect credit quality and be detrimental to the
subordinated noteholders," he continued. Standard & Poor's will
monitor the progress at TransMontaigne and evaluate its outlook
and ratings when a course of action and its implications have been
defined.

The developing outlook reflects the possibility of negative or
positive rating actions depending on Standard & Poor's evaluation
of the actions, if any, taken by TransMontaigne as it reviews its
alternatives.


UAL CORP: Court Allows Gracie Lerno Claim for $5 Million
--------------------------------------------------------
Gracie Lerno filed Claim No. 52533, originally as a $500,000,000  
priority claim asserting certain workers' compensation rights and  
remedies.  Upon a review of the books and records, the Debtors  
determined that Ms. Lerno's Claim was both overstated and  
incorrectly asserted as a priority Claim.  The Debtors objected  
to Claim No. 52533, arguing that it should be reduced and  
reclassified.  Ms. Lerno opposed the Objection.

After arm's-length negotiations, the parties agree that a  
reasonable estimate of the present cash value of Claim No. 52533  
is $5,000,000.  The parties also agree to reclassify the Claim to  
general unsecured status.

Judge Wedoff approves the Stipulation.

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 Debtors 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. 59; Bankruptcy Creditors' Service, Inc., 215/945-
7000)


UNIVERSAL ACCESS: U.S. Trustee Picks 5-Member Creditors Committee
-----------------------------------------------------------------
The United States Trustee for Region 11 appointed five creditors
to serve as an Official Committee of Unsecured Creditors in
Universal Access Global Holdings, Inc. and its debtor-affiliates'
chapter 11 cases:

          1. AT&T Corp.
             Attn: Kenneth A. Rosen
             One AT&T Way
             Bedminster, New Jersey 07921

          2. Above Net Communications, Inc.
             Attn: Thoman L. Kerry
             360 Hamilton Avenue
             White Plains, New York 10601

          3. Electro Banque
             Attn: Michael Rhee
             54 Rue La Boetie
             Paris, France 75008

          4. Broadwing Communications, LLC
             Attn: Jonathan W. Anderson
             1122 Capital of Texas Highway South
             Austin, Texas 78746

          5. Netco Communications Corp.
             Attn: George H. Frisch
             110th Street
             Bloomington, Minnesota 55438

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 Chicago, Illinois, Universal Access Global
Holdings, Inc. -- http://www.universalaccess.com/-- provides  
network infrastructure services and facilitates the buying and
selling of capacity on communications networks. The company, and
its affiliates, filed for a chapter 11 protection on August 4,
2004 (Bankr. N.D. Ill. Case No. 04-28747). John Collen, Esq., and
Rosanne Ciambrone, Esq., at Duane Morris LLC, represent the
Company. When the Debtor filed for protection from its creditors,
it listed $22,047,000 in total assets and $24,054,000 in total
debts.


US AIRWAYS: Shareholder Says Current Equity Worth $6 Per Share
--------------------------------------------------------------
"While in most bankruptcy cases the common stockholders have no
measurable stake in the bankruptcy estate, in this latest
bankruptcy by USAirways, our partnership believes that there is
substantial equity beyond both the secured and valid unsecured
claims in the case," Ronald Gledhill at East Texas Capital
Partners, LLC, says.

East Texas points to the company's latest balance sheet showing
assets exceeding liabilities and says that $5.5 billion of
recorded liabilities on account of future aircraft deliveries,
pension obligations and post-retirement benefits are overstated.  
East Texas' reshuffling of USAir's balance sheet and other
arithmetical computations culminates in a conclusion that the "the
net equity in the bankruptcy estate . . . appears to be $350
million or . . . $6 per share."

East Texas Capital Partners, LLC, holds an undisclosed number of
shares of stock in US Airways, Inc.

Mr. Gledhill says his firm intends to form or join an "Stockholder
Creditor Committee" in the carrier's pending chapter 11 proceeding
before the U.S. Bankruptcy Court in Alexandria, Virginia.  

East Texas Capital Partners, LLC, located in Center Valley,
Pennsylvania, specializes in real property and securities
investments.  The firm's telephone number is (610) 791-5291.


US AIRWAYS: Hires Arnold & Porter as Lead Bankruptcy Counsel
------------------------------------------------------------
US Airways, Inc., and its debtor-affiliates seek to employ Arnold
& Porter, LLP, as lead counsel under a general retainer.  Before
the Petition Date, US Airways utilized the services of Arnold &
Porter for advice on restructuring matters and preparation for
their Chapter 11 cases.  According to Bruce R. Lakefield, US
Airways President and Chief Executive Officer, "continued
representation by Arnold & Porter is critical" to the Debtors'
restructuring because the Firm is familiar with the Debtors'
business, legal and financial affairs and is well-suited to
navigate the Chapter 11 process.

US Airways selected Arnold & Porter because of the Firm's broad
experience and knowledge in the field of debtors' and creditors'
rights and business reorganizations under Chapter 11, particularly
the reorganization of airlines.  Arnold & Porter has been involved
in varying capacities in most of the recent airline industry
Chapter 11 reorganizations.

The Firm was actively involved in the Braniff, TWA, America West,
Continental Airlines (second case), Pan Am, Eastern and United
Airlines cases.  Arnold & Porter was lead bankruptcy counsel to
Air Partners as the plan sponsor in the successful reorganization
of Continental Airlines.  The Firm also has extensive experience
related to restructuring and other legal issues faced by airlines
outside the bankruptcy context.  Arnold & Porter understands the
challenges facing the industry, the legal and bankruptcy issues
that arise, and the interests of all stakeholders.

Arnold & Porter will:

  (a) advise the Debtors on their powers and duties in the
      management and operation of their business and properties;

  (b) advise on the legal and administrative requirements of
      operating in Chapter 11;

  (c) attend meetings and negotiate with representatives of
      creditors and of the Debtors' employees and other parties-
      in-interest;

  (d) advise the Debtors on asset sales or business combinations,
      including the negotiation of asset, stock purchase, merger
      or joint venture agreements, formulate and implement
      bidding procedures, evaluate competing offers and draft
      corporate documents for the sales;

  (e) advise the Debtors on postpetition financing and cash
      collateral arrangements, negotiate and draft related
      documents, provide advice and counsel on prepetition
      financing arrangements, and provide advice to the Debtors
      on emergence financing and capital structure,

  (f) advise the Debtors on the assumption, rejection or
      assignment of unexpired leases and executory contracts;

  (g) provide advice to the Debtors on legal issues relating to
      the ordinary course of business, including attendance at
      senior management meetings, meetings with financial and
      turnaround advisors and meetings of the board of directors,
      and advice on employee, workers' compensation, employee
      benefits, executive compensation, tax, environmental,
      banking, insurance, securities, corporate, business
      operation, contracts, joint ventures, real property and
      press/public affairs and regulatory matters;

  (h) protect and preserve the Debtors' estates, including
      the prosecution of actions, the defense of actions and
      proceedings commenced against the estates, negotiations
      concerning litigation in which the Debtors may be involved
      and objections to claims filed against the estates;

  (i) prepare motions, applications, answers, orders, reports
      and papers necessary to the administration of the estates;

  (j) negotiate and prepare a plan or plans of reorganization,
      disclosure statement and all related efforts to obtain
      confirmation of the plan;

  (k) attend meetings with third parties and participate in
      negotiations on any plan;

  (l) appearing before the Bankruptcy Court, other courts, and
      the U.S. Trustee, to protect the interests of the Debtors'
      estates;

  (m) meet and coordinate with other counsel and other
      professionals on the Debtors' behalf; and

  (n) perform all other needed legal services and provide all
      other needed legal advice to the Debtors.

The Debtors paid Arnold & Porter a $750,000 initial retainer.  On
June 3, 2004, the retainer was increased by $250,000, to
$1,000,000.  Arnold & Porter agreed to apply the Retainer to pay
any fees, charges and disbursements.  For the period from
April 1, 2004, through August 31, 2004, Arnold & Porter invoiced
the Debtors for $2,016,149 with an additional $74,999 in charges
and disbursements, totaling $2,091,148.  Before the Petition Date,
the Debtors paid Arnold & Porter $3,091,148, including the initial
retainer payments.  

On September 10, 2004, Arnold & Porter applied the Retainer to pay
$316,792 for services, charges and disbursements for September 1,
2004, through and including September 9, 2004, and an additional
$119,050 for estimated services, charges and disbursements for
September 10, 11 and 12, 2004, leaving a retainer balance of
$564,158.  Thus, the total amount invoiced for the prepetition
period was $2,526,990.

Arnold & Porter's attorneys are located in Denver, New York, and
Washington D.C.  Arnold & Porter's hourly rates are, in some
instances, higher for New York attorneys than for those in
Washington and Denver offices.  The hourly rate schedule is:

                  Brian Leitch             $630
                  Dan Lewis                 603
                  Michael Canning           580
                  Susan Morita              520
                  Joel Gross                505
                  Sarah Kahn                485
                  Robert Barrett            385
                  Andrew Kelley             305
                  Charles Malloy            305
                  Jaimee Frohlich           275
                  Andrew Myers              275
                  Alexis Kremen             225
                  Antonio Martinez          225
                  Annecoos Wiersema         225

Brian P. Leitch, Esq., relates that Arnold & Porter has assembled
a highly qualified team of attorneys to provide legal services to
the Debtors.  Mr. Leitch assures the Court that Arnold & Porter
attorneys do not have any connection with the Debtors or their
affiliates, their creditors, any other party-in-interest, their
attorneys and accountants, the U.S. Trustee or any person employed
in the office of the United States Trustee.  Arnold & Porter
attorneys are "disinterested persons," as that term is defined in
Section 101(14) of the Bankruptcy Code and do not hold or
represent any interest adverse to the Debtors' estates.

                          *     *     *

Judge Mitchell approves the Debtors' Application on a conditional
basis.  Any party-in-interest may object to the Application until
September 24, 2004.  The U.S. Trustee and any statutory committee
appointed in the Debtors' cases have until September 29, 2004, or
10 days after the appointment of the committee, whichever is
later, to object.

Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of US Airways, Inc.,
Allegheny Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines,
Inc., MidAtlantic Airways, Inc., US Airways Leasing and Sales,
Inc., Material Services Company, Inc. and Airways Assurance
Limited, LLC. Under a chapter 11 plan declared effective on March
31, 2003, USAir emerged from bankruptcy with the Retirement
Systems of Alabama taking a 40% equity stake in the deleveraged
carrier in exchange for $240 million infusion of new capital. US
Airways and its subsidiaries filed another chapter 11 petition on
September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). In the
Company's second bankruptcy filing, it lists $8,805,972,000 in
total assets and $8,702,437,000 in total debts. (US Airways
Bankruptcy News, Issue No. 64; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


VOEGELE MECHANICAL: Files Bankruptcy Schedules and Statements
-------------------------------------------------------------
Voegele Mechanical, Inc., filed its Schedules of Assets and
Liabilities and Statement of Financial Affairs with the U.S.
Bankruptcy Court for the Eastern District of Pennsylvania.  A
full-text copy of the Debtor's Statement of Financial Affairs is
available for a fee at:

    http://www.researcharchives.com/bin/download?id=040812020022

   Name of Schedule         Assets       Liabilities
   ----------------         ------       -----------
A. Real Property                    $0
B. Personal Property        10,213,682
C. Property Claimed
   as Exempt                       N/A           N/A
D. Creditors Holding
   Secured Claims                          4,971,442
E. Creditors Holding
   Unsecured Priority Claims               1,353,358
F. Creditors Holding Unsecured
   Nonpriority Claims                      9,320,668
                           -----------   -----------
Total                      $10,213,682   $15,645,469

Headquartered in Philadelphia, Pennsylvania, Voegele Mechanical,
Inc. -- http://www.voegele.net/-- is a heating, air conditioning,  
refrigeration, plumbing and electrical contractor. The Company
filed for a chapter 11 protection on August 3, 2004 (Bankr. E.D.
Pa. Case No. 04-30628). Rhonda Payne Thomas, Esq., at Klett Rooney
Lieber and Schorling, represents the Debtor in its restructuring
efforts. When the Debtor filed for protection it estimated its
assets and debts at more than $10 million.


WORLDCOM: Balks at Paying Fees for SEC's Blue River Probe
---------------------------------------------------------
MCI, Inc., doesn't want to pay any fees incurred by members of the
Official Committee of Unsecured Creditors appointed in WorldCom's
chapter 11 cases related to an investigation by the Securities and
Exchange Commission into the conduct of a former Committee member.  

Marcia L. Goldstein, Esq., at Weil, Gotshal & Manges LLP, tells
Judge Gonzalez that in July 2004, the SEC issued subpoenas to the
eleven Committee members asking for documents relating to
communications and documentation concerning WorldCom's chapter 11
cases.  The Eleven Committee Members turned to their lawyers at
Akin Gump Stauss Hauer & Feld LLP, for help responding to the SEC
subpoenas.

Reuters reports that the target of the SEC's investigation is:

          Blue River, L.L.P.
          Attn: Van Greenfield, Managing Member
          360 East 88th Street, Suite 2D
          New York, NY 10128
          Telephone (212) 426-7038
          Telecopier (212) 426-5677

None of Akin Gump's work related to WorldCom's reorganization or
benefited the company or its creditors in any way.  Accordingly,
MCI reasons, it shouldn't have to pay.  MCI also points to Section
10.10 of the Confirmed Plan, a section entitled "Obligation to
Defend," that was negotiated extensively among various parties in
interest and was intended to protect Committee members from the
costs and expenses arising from legal action threatened or taken
against them in respect of their conduct during the chapter 11
case.  That section of the plan doesn't cover fees related to
investigation of a former committee member by the SEC.  MCI also
rejects all of the Committee's arguments about fairness,
preserving the integrity of the chapter 11 system, and other
general equity principles.


WORLDCOM INC: Asks Court to Expunge Abbott Litigants' $690M Claims
------------------------------------------------------------------
Worldcom, Inc. and its debtor-affiliates ask the United States
Bankruptcy Court for the Southern District of New York to disallow
and expunge Claim Nos. 17111, 17112, 22573, 22574, 24817, 24818
and 24819 filed by Abbott Litigants against WorldCom for $690
million.

The Claims are predicated on a state court action commenced by the
Abbott Litigants before the Superior Court of California on
May 29, 2001, which was amended on June 21, 2001, against:

   (1) a dozen officers of World Access, Inc.;

   (2) 100 "John Does";

   (3) MCI WorldCom, Inc.; and

   (4) WorldCom Chief Executive Officer Bernard Ebbers,
       Controller David Myers, and Chief Financial Officer Scott
       Sullivan

The Abbott Litigants are:

   (1) Roger B. Abbott;
   (2) Atocha, LP;
   (3) Gold & Appel Transfer, S.A.;
   (4) Edward Heimrich;
   (5) William S. Miller III, individually and as trustee;
   (6) Joanne T. Miller, individually and as a trustee; and
   (7) Edward Soren

The Abbott Litigants seek to recover from WorldCom damages arising
out of the merger of WorldxChange, Inc., a company formerly owned
by Mr. Abbott, and World Access, Inc., a telecommunications
company, which filed a Chapter 11 petition in 2001 before the U.S.
Bankruptcy Court for the Northern District of Illinois.  WorldCom
owned 6.7% of World Access' stock before World Access' bankruptcy.

The Abbott Litigants allege that the State Action Defendants
participated in an allegedly fraudulent scheme to induce
WorldxChange to merge with World Access by misrepresenting World
Access' financial ties to WorldCom.  WorldCom allegedly entered
into a sham transaction to purchase services from World Access,
thereby bolstering World Access' financial position making its
stock a more valuable currency for use in acquiring other
companies like WorldxChange.  The Abbott Litigants allege that a
Carrier Service Agreement entered into by a company later acquired
by World Access and WorldCom in 1998 was the instrument of the
purported fraud.

On August 31, 2001, WorldCom asked the California Court to dismiss
all five counts against WorldCom alleged in the Abbott Complaint.  
The California Court dismissed three of the five claims asserting
direct liability of WorldCom.  The two remaining claims against
WorldCom -- one alleging claims under the California State
Securities Law and the other in common law fraud -- allege that
WorldCom aided and abetted World Access' fraudulent conduct.

As to the California Securities Law Claim, Adam P. Strochak,
Esq., at Weil, Gotshal & Manges, LLP, in Washington, D.C., asserts
that WorldCom had no involvement, direct or otherwise, with the
World Access/WorldxChange merger or any representations World
Access made to WorldxChange.  Therefore, WorldCom cannot be held
liable in connection with the merger.

Mr. Strochak point out that each of the three WorldCom senior
executives testified that he "had no involvement with the merger
negotiations between World Access and WorldxChange."  Each of the
three executives were deposed, and each reaffirmed his lack of
involvement in the World Access/WorldxChange merger.  The three
executives also declared that they had not met any of the Abbott
Litigants before the announcement of the merger in February 2000.  
The Abbott Litigants have not made any assertions to contradict
this testimony.

With respect to the Common Law Fraud Claim, Mr. Strochak contends
that the Service Agreement was not a sham contract and cannot be
asserted as the basis for any aiding and abetting claim.  The
Service Agreement was a valid contract pursuant to which the
parties were performing when World Access and WorldxChange
announced their merger in 2000.  Mr. Strochak notes that:

   -- WorldCom used World Access' service on an almost-daily
      basis;

   -- WorldCom's usage patters for World Access' services in
      different countries fluctuated up and down over the months;
      and

   -- WorldCom logged substantial service complaints regarding
      World Access' services.

To the extent any of the claims for breach of contract exist, the
claims would be property of the World Access Chapter 11 estates.  
As a non-party to the Service Agreement, Mr. Strochak maintains,
the Abbott Litigants lack standing to enforce provisions of the
Service Agreement.  Moreover, any claims arising from non-payment
by WorldCom would be derivative claims that the Abbott Litigants,
as mere shareholders of World Access, are barred from pursuing.  

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


XEROX: Expand FreeFlow(TM) Collection with Four News Products
-------------------------------------------------------------
Xerox Canada expanded its industry-leading FreeFlow(TM) Digital
Workflow Collection of software and hardware with four new
software products, including a "digital storefront" to help print
shops streamline job ordering and management on the Web.

Additional products from Xerox help printing professionals reduce
manual steps and automate error-prone parts of the printing
process such as job-ticketing, page layout, editing and proofing.

FreeFlow Process Manager, Print Manager, Web Services and
Makeready are designed to help print service providers and in-
plant printers simplify work processes, attract new business, and
better manage print jobs.  These workflow products make it easy to
integrate digital printing into JDF (job definition format)-based
workflows, enabling a common set of software instructions to
direct a print job from creation to completion, in a consistent,
uniform way.

"When you see the entire Xerox FreeFlow collection, no one else
can come close to offering anything as powerful in a single
offering," said Andy Tribute of Attributes Associates, an
internationally known industry analyst.  "The main concern of any
printer is making sure that a job is set up properly before
printing.  Xerox FreeFlow offerings enable this by linking
technologies from various vendors - from management information
systems links using JDF for job ordering and submission - through
press and proofing to final production."

Through open architecture and industry standards like JDF, Xerox's
FreeFlow offerings are designed to make digital printing easier
for printers.  With JDF, print providers have more flexibility to
process print jobs through various digital technologies and can
switch between job paths and equipment quickly and efficiently.

"FreeFlow is more than just workflow," said Bill Lamparter,
president of PrintCom Consulting Group. "It's a collection of
software, services and solutions that gives print providers more
freedom to adapt to their customer's demands.  FreeFlow is an
excellent platform for processing print jobs whether they are
digital, offset or a combination of both."

                    FreeFlow Process Manager

FreeFlow Process Manager is automated workflow management software
that allows print shop operators to pre-build workflows for
automatic document preparation, proofing and printing.  
Essentially, Process Manager translates print job instructions by
electronically answering the questions "what should this job look
like?" and "how can my equipment best get this done?"  This
ensures job consistency and accuracy, increases print shop
productivity, and allows operators with minimal training to run
both simple and complex jobs with ease.

Processing is made easier for operators with a drag-and-drop
graphical user interface.  For instance, Process Manager can
automatically implement the steps needed to convert a brochure
developed with Quark page-design software to PDF, print it two-up
and duplex, add page numbers, and be sure it matches colour
specifications.  Prior to Process Manager, each step needed to be
done manually by an operator.

Process Manager provides an added benefit to print shops that have
both cut-sheet and continuous-feed equipment - jobs can be
switched from cut-sheet to continuous-feed depending on
requirements without having to reformat the file.  The automatic
format conversion capability saves print providers valuable time.

                     FreeFlow Print Manager

FreeFlow Print Manager's JDF-enabled job ticketing capability
allows print devices to "speak the same language" in communicating
print job instructions.  This helps streamline print workflow in a
shop with equipment from multiple vendors.  Whether a print
provider is running short-run digital jobs or printing to offset
presses, FreeFlow Print Manager gives print providers a single
point of access to their digital presses at any point in the
workflow.

The process for printing on a digital press typically requires the
press operator to enter job ticket information right at the
digital device.  FreeFlow Print Manager makes it easy to integrate
digital printing into existing workflows by bringing job
programming and printer status capabilities to the operator's PC,
even if working remotely.  FreeFlow Print Manager is also
available as an option in Creo Inc.'s Prinergy(R) workflow
management system, adding the flexibility for customers to operate
within their existing environments.

                     FreeFlow Web Services

Building close customer relationships is key to the long-term
success of a print operation.  FreeFlow Web Services helps build
those relationships with a "digital storefront" that can be
tailored to the requirements of each customer and assist in job
ordering and management.

FreeFlow Web Services enables a printer's customers to view,
modify and order documents in addition to downloading and
submitting new jobs for production.  A shopping cart feature
allows customers to view selected documents before sending for
production.  People are also able to create PDFs from their own
PC, giving customers more control of the process and resolving
common production hold-ups due to font and colour discrepancies
that occur when a PDF is not created correctly.

As an added advantage, print providers can use the same Web server
to manage jobs.  Through Web Services, customer communications
such as automatic job receipt notifications, status updates and
finished document viewing all happen through one portal.

                  FreeFlow Makeready

Rounding out the workflow announcements is FreeFlow Makeready,
software that provides a single interface for all page formatting
and layout, making it easier to finalize documents prior to print
production.  Makeready acts as a central hub for key prepress
activities including colourization, component editing, colour
management, imposition, document construction and job ticketing.  
These processes can be complex and prone to error when done
manually, but are made simpler through FreeFlow Makeready.

Content enters FreeFlow Makeready as either electronic files or
hardcopy scans that are imported directly from FreeFlow scanners.  
From there, the user interface makes highly visual processes like
page layout, editing and proofing easy.  FreeFlow Makeready also
features custom imposition, PDF proofing, a reprint repository,
and a light table feature that provides a proof for front-to-back
registration.  These capabilities are integral to expanding
digital applications such as customized printing and short-run
book publishing.

                    Price and Availability

FreeFlow Process Manager, Print Manager, Web Services and
Makeready are available immediately in North America and available
Oct. 1 in Europe and other geographies.  Canadian List prices
start at:

   * FreeFlow Process Manager, $46,500;
   * FreeFlow Print Manager, $6,000;
   * FreeFlow Web Services, $46,500;
   * FreeFlow Makeready, $37,000.

Several upgrade options are available for customers who currently
own Xerox DigiPath production printing software.

                         *      *     *

As reported in the Troubled Company Reporter's August 9, 2004
edition, Standard & Poor's Ratings Services affirmed its 'BB-'
corporate credit rating on Stamford, Conn.-based Xerox Corp., and
assigned a 'B+' to the company's proposed $400 million senior
unsecured notes due 2011.  Proceeds from the proposed note issue
are expected to be used primarily to meet near-term debt
maturities.

As of June 30, 2004, Xerox had total outstanding debt of about
$10.3 billion.

"The ratings on Xerox Corp. and related entities reflect mature
and highly competitive industry conditions, continued revenue
weakness, and a leveraged financial profile.  These factors
partially are offset by the company's good position in its core
document processing business, and improving financial
flexibility," said Standard & Poor's credit analyst Martha Toll-
Reed.


* BOND PRICING: For the week of September 20 - September 24, 2004
-----------------------------------------------------------------

Issuer                                Coupon   Maturity  Price
------                                ------   --------  -----
American & Foreign Power               5.000%  03/01/30    71
AMR Corp.                              4.500%  02/15/24    71
AMR Corp.                              9.000%  08/01/12    68
AMR Corp.                              9.000%  09/15/16    70
AMR Corp.                             10.200%  03/15/20    62
Burlington Northern                    3.200%  01/01/45    57
Calpine Corp.                          7.750%  04/15/09    66
Calpine Corp.                          8.500%  02/15/11    65
Calpine Corp.                          8.625%  08/15/10    66
Comcast Corp.                          2.000%  10/15/29    42
Continental Airlines                   4.500%  02/01/07    72
Delta Air Lines                        7.700%  12/15/05    44
Inland Fiber                           9.625%  11/15/07    48
Level 3 Comm. Inc.                     2.875%  07/15/10    68
National Vision                       12.000%  03/30/09    65
Northern Pacific Railway               3.000%  01/01/47    57
Northwest Airlines                     7.875%  03/15/08    70
Northwest Airlines                     8.700%  03/15/07    75
Northwest Airlines                    10.000%  02/01/09    72
US West Capital                        6.500%  11/15/18    73
US West Capital Fdg.                   6.875%  07/15/28    72

                          *********

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, Rizande B. Delos Santos, Jazel P.
Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence Patrick
F. Casquejo and Peter A. Chapman, Editors.

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

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

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

                *** End of Transmission ***