TCR_Public/041007.mbx       T R O U B L E D   C O M P A N Y   R E P O R T E R

          Thursday, October 7, 2004, Vol. 8, No. 217

                          Headlines

360NETWORKS: Asks Court for Summary Judgment Against David Evans
A.B. DICK: Wants to Terminate Retiree Benefit Program on Oct. 15
AB LIQUIDATING: Will Pay Creditors' Allowed Claims in Full
AFTON FOOD: Court Extends CCAA Protection Until Dec. 13
ALAMOSA HOLDINGS: S&P Affirms Junk Corporate Credit Rating

ALLEGHENY ENERGY: Completes $152 Million Private Equity Placement
AMERICAN TOWER: Raises $292.8 Million From Senior Debt Offering
AMERICAN WAGERING: Youbet.com Proposes $9.5M Purchase in New Plan
APPLICA INC: Moody's Junks Senior Subordinated Debt Rating
BANC OF AMERICA: Fitch Puts Low-B Ratings on Two 2004-I Certs.

BANKAMERICA: Moody's Junks Ratings on 3 Certificate Classes
BEND-COR LLC: Case Summary & 7 Largest Unsecured Creditors
BMC INDUSTRIES: Sells Buckbee-Mears Business for $9.1 Million
BMC INDUSTRIES: Hires Katten Muchin as Bankruptcy Counsel
BOISE CASCADE: S&P Puts 'BB' Rating on Senior Secured Bank Loan

BUSH INDUSTRIES: Needs Six More Months to Negotiate Revised Plan
CHOICE ONE: Files Prepackaged Chapter 11 Petition in S.D. New York
CHOICE ONE: Case Summary & 20 Largest Unsecured Creditors
CHOICE ONE: Wants to Retain Weil Gotshal as Bankruptcy Counsel
CHOICE ONE: Wants Ordinary Course Professionals to Continue

COVANTA ENERGY: Asks Court to Approve American Airlines Settlement
CSFB MORTGAGE: S&P Rating Tumbles to D on Class K-CR
DB COMPANIES: Wants Exclusive Period Stretched to Jan. 28, 2005
DELTA FUNDING: S&P Rating Tumbles to D on Two Classes
DRESSER-RAND: S&P Puts 'B+' Rating on Proposed $700 Mil. Facility

DUPONT PHOTOMASKS: Toppan Pact Spurs S&P's B+ Corp. Credit Rating
ENRON: Judge Gonzalez Okays Claim Settlement with Baupost Group
ENTERPRISE PRODUCTS: Gets $915MM From Gulfterra Tender Closing
FHC HEALTH: S&P Junks $100 Million Subordinated Debt Rating
FIBERMARK, INC.: Committee Members Want to Trade Debtor's Shares

GADZOOKS, INC.: Wants Plan-Filing Period Extended to Oct. 31
GALEY & LORD: Oct. 21 Auction Will Test Patriarch's $188 Mil. Bid
GENERAL MEDIA: Care Concepts Completes 40% Stock Purchase
GITTO GLOBAL: Wants to Hire Hanify & King as Bankruptcy Counsel
GOPHER STATE: U.S. Trustee Picks 3-Member Creditors Committee

GULFTERRA ENERGY: Moody's Withdraws Ba2 Sr. Implied Debt Ratings
HOLLINGER INTL: Audit Committee Finds Overstated Financials
HUGHES SUPPLY: Moody's Puts Ba1 Rating on $300M Sr. Unsec. Notes
IMPAC MEDICAL: Inks Sales Consulting Agreement with Elekta
IMPERIAL SCHRADE: U.S. Trustee Picks 5-Member Creditors Committee

INFOUSA INC: Pays Down $5.2 Million of Outstanding Principal Debt
INNOVATIVE HOUSING: S&P Assigns BB Long-Term Issuer Credit Rating
INTEGRATED HEALTH: Court Lets Southern Oaks Liquidate Tort Claim
INTERMET CORPORATION: Court Approves Payment of Salaries & Wages
ISTAR FINANCIAL: S&P Raises Credit Ratings to BBB- From BB+

KAISER ALUMINUM: Inks Intercompany Settlement Agreement
KAISER ALUMINUM: Wants to Sell Valco Shares to Ghana Government
KEYSTONE CONSOLIDATED: Committee Probes Contran's Claims & Control
KIEL BROS.: Wants Plan-Filing Period Stretched to Jan. 13
KISTLER AEROSPACE: Has Until Oct. 31 to File Chapter 11 Plan

KITTY HAWK: Unsecured Creditors Waiting for Stock Distribution
LEVI STRAUSS: To Webcast 3rd Quarter Financial Results on Tuesday
LORAL SPACE: Look for a Disclosure Statement by October 14
LTC PROPERTIES: Fitch Raises Classes B & E Mortgage Cert. Ratings
NATIONAL CENTURY: Five Entities Seek Leave to Appeal R. 2004 Order

NATIONS BALANCED: Final Liquidating Distribution is $9.4 Per Share
NORTHWESTERN CORP: Gets Creditors' Acceptance on Amended Plan
OWENS CORNING: Century Indemnity Objects to AXA Belgium Settlement
PILLOWTEX CORP: Reports Misc. Asset Sales Totaling $1,071,021
PEMSTAR INC: Unveils Restructuring Plans to Save $5MM Annually

PLIANT CORPORATION: S&P Puts B+ Rating on CreditWatch Negative
PMA CAPITAL: Launches Exchange Offer for Convertible Debentures
POLYMER RESEARCH: Case Summary & 20 Largest Unsecured Creditors
POLYPORE INT'L: Moody's Reviews Ratings for Possible Downgrade
QUICK-WRIGHT ELEC'L: Case Summary & 20 Largest Unsecured Creditors

RBTT FINANCIAL: Fitch Affirms 'BB+' Foreign Currency Ratings
RCN CORP: ESOP Representative Balks at Disclosure Statement
REVCON MOTORCOACH: Case Summary & 18 Largest Unsecured Creditors
RIVERSIDE FOREST: Adopts Limited Duration Shareholder Rights Plan
SPIEGEL INC: Settles Claim Disputes with America Online

SUMMIT PROPERTIES: Moody's Puts Ba1 Rating on Sr. Unsecured Debt
THORNBURG MORTGAGE: Fitch Assigns Low-B Ratings to 2 Classes
TSI TELSYS: Appoints Michael Gorham VP-Business Devt. & Operations
UAL CORP: Inks New Power Agreement After Rejecting Dynegy Pact
US AIRWAYS: Pilot Leaders Send Pact for Members' Ratification Vote

US AIRWAYS: Airports Want Court to Deny Use of Cash Collateral
W.E. GARRISON CO: Case Summary & 20 Largest Unsecured Creditors
WAVEFRONT ENERGY: Discloses 520,000 Incentive Stock Options Grant
WMG ACQUISITION: $350 Million ROI Cues S&P to Affirm B+ Rating
WORLDGATE COMMS: Will Meet with Stockholders on Oct. 13

ZENITH NATIONAL: S&P Affirms BB+ Counterparty Credit Rating

* Kamakura Says US Corp. Credit Quality Continues Decline in Sept.
* Paul Hastings Adds 7 New Attorneys to Tokyo Office

                          *********

360NETWORKS: Asks Court for Summary Judgment Against David Evans
----------------------------------------------------------------
On 360networks, Inc.'s behalf, the Official Committee of Unsecured
Creditors asks the United States Bankruptcy Court for the Southern
District of New York for a summary judgment against David Evans &
Associates, Inc., awarding $417,158, plus interest, to the
Debtors' estates.

Norman Kinel, Esq., at Dreier, LLP, in New York, reminds the Court
that David Evans received transfers aggregating $417,158, within
90 days prior to the Petition Date.

Mr. Kinel tells Judge Gropper that there's no genuine issue as to
a material fact to prevent summary judgment.  Moreover, each of
the statutory requirements for an avoidable preferential transfer
under Section 547(b) of the Bankruptcy Code has been satisfied.

Under Section 547(b), a debtor may avoid the transfer to a
creditor that is made:

    -- on or within 90 days before the Petition Date;

    -- while the debtor is insolvent;

    -- on account of an antecedent debt; and

    -- which enables the creditor to receive more than it would
       receive under a bankruptcy liquidation.

Mr. Kinel argues that the Transfers are not subject to any
statutory exceptions.  Mr. Kinel contends that David Evans has
submitted no evidence and cannot meet its burden of proving the
applicability of any of the statutory exceptions sufficient to
prevent summary judgment in the Committee's favor.

Headquartered in Vancouver, British Columbia, 360networks, Inc. --
http://www.360.net/-- is a leading independent provider of fiber
optic communications network products and services worldwide.  The
Company and its 22 debtor-affiliates filed for chapter 11
protection on June 28, 2001 (Bankr. S.D.N.Y. Case No. 01-13721),
obtained confirmation of a plan on October 1, 2002, and emerged
from chapter 11 on November 12, 2002.  Alan J. Lipkin, Esq., and
Shelley C. Chapman, Esq., at Willkie Farr & Gallagher, represent
the Company before the Bankruptcy Court.  When the Debtors filed
for protection from its creditors, they listed $6,326,000,000 in
assets and $3,597,000,000 in liabilities. (360 Bankruptcy News,
Issue No. 76; Bankruptcy Creditors' Service, Inc., 215/945-7000)


A.B. DICK: Wants to Terminate Retiree Benefit Program on Oct. 15
----------------------------------------------------------------
A.B. Dick Co. wants permission from the U.S. Bankruptcy Court for
the District of Delaware to halt payments to 219 individuals who
receive insurance benefits under the company's retirement
programs.  The Debtor wants the payments to stop on Oct. 15, 2004.
If the payments aren't terminated, A.B. Dick tells the Court, the
chapter 11 proceeding will likely convert to a chapter 7
liquidation.  In the event of a chapter 7 liquidation, A.B. Dick
says, there's no chance of a recovery by the company's unsecured
creditors.

A.B. Dick's assets are scheduled to be auctioned on Oct. 29, 2004.
Presstek, Inc., offering $40 million, is the stalking horse
bidder.  After the assets are sold, the Debtor says, there won't
be enough operating income to fund retiree benefits.

Headquartered in Niles, Illinois, A.B.Dick Company --
http://www.abdick.com/-- is a 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. Del. Lead Case No. 04-12002) on July 13,
2004. Frederick B. Rosner, Esq., at Jaspen Schlesinger Hoffman,
and H. Jeffrey Schwartz, Esq., at Benesch, Friedlander, Coplan &
Aronoff LLP represent the Debtors in their restructuring efforts.
Richard J. Mason, Esq., at McGuireWoods, LLP, represents the
Official Committee of Unsecured Creditors.  When the Debtor filed
for protection from its creditors, it listed over $10 million in
estimated assets and over $100 million in estimated liabilities.


AB LIQUIDATING: Will Pay Creditors' Allowed Claims in Full
----------------------------------------------------------
AB Liquidating Corp. (f/k/a Adaptive Broadband Corporation) (Pink
Sheets:ADAPQ) said the settlement stipulation it entered into with
certain of its former directors and officers and executed by all
parties as of January 21, 2004, to settle, among other things, a
derivative lawsuit under the caption Elders v. Denend, et al.,
Civ. No. 798386, became effective in the first half of September,
2004.

Based on the results of AB Liquidating Corp.'s Chapter 11 case,
including the settlement referred to herein, and pursuant to AB
Liquidating Corp.'s First Amended Plan of Reorganization dated
Jan. 18, 2002, filed and confirmed in AB Liquidating Corp's
voluntary bankruptcy case under Chapter 11 of Title 11 of the
United States Code, AB Liquidating Corp. will be able to pay its
creditors in full on account of their allowed claims in AB
Liquidating Corp.'s Chapter 11 case and believes that funds will
be available for distribution to its equity holders; however, the
amount and timing of any such distributions to its equity holders
cannot presently be determined.

Headquartered in Sunnyvale, California, AB Liquidating Corp.
(f/k/a Adaptive Broadband Corporation), provided leading-edge
technology for the deployment of broadband wireless
communication over the Internet.  The Company filed for chapter 11
protection on July 26, 2001 (Bankr. N.D. Cal. Case No. 01-53685).
David M. Bertenthal, Esq., at Pachulski, Stang, Ziehl, Young
represents the Debtor in its bankruptcy case.


AFTON FOOD: Court Extends CCAA Protection Until Dec. 13
-------------------------------------------------------
On July 16th, Afton Food Group Ltd. (TSXV:AFF) was granted
protection under the Companies' Creditors Arrangement Act
(Canada).  On Aug. 13th, 2004, the Court approved the extension of
the Company's restructuring under CCAA to Oct. 13, 2004. Effective
October 6th, the Court has granted an extension to the CCAA
restructuring, which is now set to expire on Dec. 13th, 2004.

In addition to the extension of the CCAA order, the Court approved
the Company's retention of Capitalink, L.C., of Miami, Florida to
provide investment banking services and to assist in targeting the
Canadian and U.S. markets for investors that are able to aid in
the recapitalization of the Company's balance sheet or sale of the
business.

In previous reports, the Company expressed the opinion that the
shares of the Company have no economic value.  Management believes
that Capitalink's success in identifying an investor that is able
to aid in the recapitalization of the Company's balance sheet or
the sale of the business, will not add to the economic value of
the shares of the Company.

As previously reported, the Company expects to issue financial
statements for the period ended June 30, 2004, at the conclusion
of the CCAA restructuring process.  The Company confirms that the
date for filing the interim financial statements is extended to
the conclusion of the current extension period.

Afton Food Group Ltd., through its subsidiaries, is a franchisor
in the Quick Service Restaurant industry with locations throughout
Canada operating under two principal brands, 241 Pizza(R) and
Robin's Donuts(R).


ALAMOSA HOLDINGS: S&P Affirms Junk Corporate Credit Rating
----------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Alamosa
Holdings Inc. and related entities to positive from developing.
Ratings on the company, including the 'CCC+' corporate credit
rating, were affirmed.

Lubbock, Texas-based Alamosa is the largest Sprint PCS affiliate
and provides wireless services to about 813,000 subscribers in
markets with a combined covered population of about 12.1 million.
Total debt as of June 30, 2004 was $727.4 million.

"The outlook revision reflects Alamosa's continued operating
improvement over the past few quarters, owing to healthy
subscriber growth, as well as tighter credit policies and lower
costs under the Sprint PCS affiliation agreement, which the
company renegotiated in late 2003," noted Standard & Poor's credit
analyst Eric Geil.

Wireless number portability became mandatory in all of the
company's markets in May 2004 and has not had a material impact on
the company's operations.  This has alleviated Standard & Poor's
concerns -- encompassed in the prior developing outlook --
regarding potential impediments to generating sustainable
discretionary cash flow in the increasingly competitive
environment.  Year-over-year subscriber growth as of June 30, 2004
was strong at 20%.  Churn improved to 2.1% in the second quarter
of 2004, from 2.5% in the prior-year period, and bad debt
declined.

Furthermore, Alamosa is benefiting from Sprint PCS's data
services, which accounted for $3 of average revenue per user --
ARPU -- in the second quarter of 2004, up from $2 in June 2003,
and has helped the company maintain relatively flat ARPU despite
downward pressure on the voice rate.

The ratings reflect high financial risk from elevated leverage
from Alamosa's network buildout and business start-up period, as
well as a weak business profile because of the company's late
start in the intensely competitive, maturing wireless industry.

Furthermore, asset recoveries in the event of default or
bankruptcy could be constrained because the wireless spectrum is
licensed to Sprint PCS.  These factors are partially offset by
Alamosa's continued improvement in operating performance, as
well as brand recognition and operating benefits from the Sprint
PCS affiliation.


ALLEGHENY ENERGY: Completes $152 Million Private Equity Placement
-----------------------------------------------------------------
Allegheny Energy, Inc. (NYSE:AYE) has completed a $151.5 million
private placement of its common stock. The Company sold 10 million
shares of common stock at a price of $15.15 per share directly to
four institutional investors. The Company intends to use the
proceeds of the sale to reduce debt as part of its plan to repay
$1.5 billion in debt by year-end 2005.

"This stock issuance is another significant step in our program to
strengthen the financial condition of Allegheny Energy," said Paul
J. Evanson, Chairman and CEO. "With market conditions favorable,
we decided this was an appropriate time to issue equity. This
private placement offered the Company an opportunity to raise
capital in a cost-effective manner within a short period of time."

Since December 1, 2003, Allegheny Energy has reduced debt by
approximately $700 million and, as previously announced, has
entered into contracts to sell its West Virginia gas operations,
its Lincoln generation facility and its interest in OVEC.

                     Securities Act of 1933

The common stock has not been registered under the Securities Act
and may not be offered or sold in the United States absent
registration or an applicable exemption from the registration
requirements of the Securities Act.

This press release does not constitute an offer to sell or the
solicitation of an offer to buy any security and shall not
constitute an offer, solicitation or sale or any securities in any
jurisdiction in which such offering, solicitation or sale would be
unlawful.

Headquartered in Greensburg, Pennsylvania, Allegheny Energy is an
energy company consisting of two major businesses, Allegheny
Energy Supply, which owns and operates electric generating
facilities, and Allegheny Power, which delivers low-cost, reliable
electric service to customers in Pennsylvania, West Virginia,
Maryland, Virginia and Ohio. More information about Allegheny
Energy is available at http://www.alleghenyenergy.com/

                          *     *     *

As reported in the Troubled Company Reporter on Sept. 14, 2004,
Fitch Ratings revised the Rating Outlook of Monongahela Power
Company to Stable from Negative. Approximately $838 million of
debt securities are affected. At the same time, Fitch has affirmed
the existing ratings of Allegheny Energy, Inc. and subsidiaries.
The Rating Outlooks for all issuers in the Allegheny Energy group
are Stable.

The revision of Monongahela's Outlook to Stable is based on the
successful execution of additional coal supply contracts for 2005
and 2006, the return to service of baseload coal-fired generation
units at the Hatfield's Ferry and Pleasants plants prior to the
start of peak seasonal demand, and the expectation that operating
and maintenance expenses will trend down. The new coal supply
contracts increase the hedged percentage of 2005 and 2006 coal
supply needs to 90% and 50%, respectively, and alleviate near term
commodity price risk. The all-in average prices for the locked in
portion of coal supply are approximately $34 for 2005 and Fitch
estimates it will be approximately $36.10 for 2006, which are well
below the current spot market price of Appalachian coal. While
the restoration of the major coal-fired units to service ended the
cash losses associated with purchasing replacement power at higher
cost, the company continues to be at risk for any future outages
under Monongahela's current retail tariffs. Monongahela is unable
to recover the costs of replacement supply in either West Virginia
or Ohio, and no near-term change is expected. A successful
closing of the recently announced sale of Mountaineer Gas would be
positive for credit quality. Mountaineer Gas has been a persistent
drag on profitability and the proceeds from any sale are
anticipated to be used for debt reduction. However, the closing
of the transaction is subject to material regulatory
contingencies.

The affirmation of the 'BB-' senior unsecured rating and Stable
Rating Outlook of the group parent, Allegheny, reflects the new
management's ongoing progress in restructuring efforts and debt
reduction and adequate parent company liquidity, as well as the
high consolidated leverage and weak cash flow coverage ratios.
Allegheny's rating reflects Fitch's expectation that Allegheny
would continue to provide support to the leveraged Allegheny
Energy Supply subsidiary as well as the cash flow from the
stronger, more stable regulated utility subsidiaries. Execution
of the remainder of the $1.5 billion debt reduction plan by year-
end 2005, improvement in cash flow generation at Supply,
improvements in plant operating performance and expense control,
and rate relief would improve credit quality. Credit concerns
include the risks of extended plant outages, rising environmental
compliance costs, adverse regulatory or judicial decisions, and
commodity price exposure (2006 and beyond).


AMERICAN TOWER: Raises $292.8 Million From Senior Debt Offering
---------------------------------------------------------------
American Tower Corporation (NYSE: AMT) closed its previously
announced sale of 7.125% senior notes due 2012. The Company sold a
total of $300.0 million principal amount of notes, which resulted
in net proceeds to the Company of approximately $292.8 million.
The Company intends to use all of the net proceeds of the offering
to redeem a portion of its outstanding 9-3/8% senior notes due
2009.

The Company calls for redemption of $276.0 million principal
amount of its 9-3/8% senior notes. The redemption date has been
set for November 4, 2004, at a redemption price equal to the
principal amount of the notes plus an applicable premium. In
addition, the Company will pay accrued and unpaid interest on the
redeemed notes up to the redemption date.

As a result of this redemption of its 9-3/8% senior notes, the
Company expects to record in the fourth quarter of 2004 a pre-tax
loss on retirement of long-term obligations of approximately $22
million, consisting of approximately $17 million paid in excess of
carrying value and approximately $5 million in the write-off of
related deferred financing fees. The Company expects the issuance
of the 7.125% senior notes and this redemption of its outstanding
9-3/8% senior notes will result in savings of approximately $5
million in annualized net interest expense.

This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of the senior notes. The senior notes were
offered only to qualified institutional buyers in reliance on Rule
144A under the Securities Act of 1933, as amended, and outside the
United States only to non-U.S. persons in reliance on Regulation S
under the Securities Act. The notes have not been registered under
the Securities Act or any state securities laws, and unless so
registered, the notes may not be offered or sold in the United
States except pursuant to an exemption from registration
requirements of the Securities Act and applicable state securities
laws.

Headquartered in Boston, American Tower Corporation is an
independent owner and operator of wireless communications and
broadcast towers in the U.S., Mexico, and Brazil with last twelve
months revenue of $758 million.

                          *     *     *

As reported in the Troubled Company Reporter on Sept. 30, 2004,
Moody's Investors Service assigned a Caa1 rating to the
$300 million 7-1/8% senior notes offering by American Tower
Corporation. Moody's also affirmed the company's senior implied
rating of B2, and other debt ratings. The outlook for all ratings
is positive.

The affected ratings are:

   -- American Tower Corporation

      * $300 million of 7-1/8% Senior Notes due 2014 -- Caa1
        (assigned)

      * Senior Implied -- B2 (affirmed)

      * Speculative Grade Liquidity -- SGL-2 (affirmed)

      * $225 million of 7.5% Senior Notes due 2012 -- Caa1
        (affirmed)

      * $636 million of 9.375% Senior Notes due 2009 -- Caa1
        (affirmed)

      * $298 million of 5.0% Convertible Notes due 2010 -- Caa1
        (affirmed)

   -- American Towers, Inc. (ATI)

      * $808 million (face value) of 12.25% Senior Subordinated
        Discount Notes due 2008 -- B3 (affirmed)

      * $400 million of 7.25% Senior Subordinated Notes due 2011
        -- B3 (affirmed)

   -- American Tower, LP and American Towers, Inc. (co-borrowers)

      * $400 million senior secured revolving credit facility
        expiring 2011 -- B1 (affirmed)

      * $300 million senior secured term loan A maturing 2011 --
        B1 (affirmed)

      * $400 million senior secured term loan B maturing 2011 --
        B1 (affirmed)

The B2 senior implied rating continues to reflect the high
leverage of the company as the $164 million of LTM free cash flow
represents 5% of the company's total debt balance at the end of
2Q04. Nonetheless, Moody's recognizes the steadily improving free
cash flow profile of the company, which we expect will continue.
The positive outlook indicates Moody's acknowledgment of the
likelihood of a ratings upgrade in the near-to-intermediate term.

Proceeds from the current $300 million senior unsecured note
issuance will be used to:

   * further reduce the company's outstandings of the 9.375%
     senior unsecured notes due 2009;

   * provide the company with lower interest expense and extend
     maturities by approximately 4 years.

Previously in the 3Q04, the company successfully reduced the
9.375% outstandings by $337 million after it issued 3% convertible
notes due 2012 (unrated). Proforma for the senior unsecured notes
offering, the company will record approximately $360 million of
9.375% senior unsecured notes.

The Caa1 rating on the new and existing senior unsecured debt at
the ultimate parent holding company reflects their junior position
in the capital structure behind the higher rated obligations at
subsidiaries closer to the assets and cash flows of the company.
The B1 rating on the senior secured credit facilities reflects
their priority position in the company's capital structure, and
their relatively modest proportion of the company's total debt
capital (21% at 2Q04). These obligations are secured by the stock
and assets of the borrowers and their primary operating
subsidiaries, and also benefit from upstream guarantees from those
subsidiaries. The B3 rating for the unsecured debt at the
intermediate ATI level reflects the effective subordination of
these securities to the secured bank borrowings and other
liabilities of the company's operating subsidiaries. The SGL-2
liquidity rating continues to reflect the good liquidity profile
of the company with healthy cash balances, good free cash flows,
and significant covenant cushion under its credit facilities.

The positive rating outlook reflects Moody's opinion that should
the company continue to generate higher levels of free cash flow
the ratings are likely to be upgraded in the next 12 to 18 months.
Over the last twelve months ended June 20, 2004, American Tower
generated over $211 million of cash provided by operations and
spent approximately $48 million on capital expenditures. Going
forward, Moody's expects cash from operations to continue to grow,
capital spending to remain roughly flat, and acquisition and
investment spending to decline significantly. Longer term,
Moody's remains concerned that capital spending will have to
increase as 2003 spending represented only 27% of depreciation
expense for the year. Risks to this outlook are acquisition and
investment spending above expected levels that would divert free
cash flow from debt reduction, higher than anticipated capital
spending, or slower growth in cash provided by operations.


AMERICAN WAGERING: Youbet.com Proposes $9.5M Purchase in New Plan
-----------------------------------------------------------------
Youbet.com, Inc. (NASDAQ:UBET), the largest Internet provider of
thoroughbred, quarter horse and harness racing content in the
United States, is seeking approval to acquire all of the issued
and outstanding shares of American Wagering, Inc. (OTC BB: BETMQ)
for $9.5 million, approximately half in cash and half in Youbet
common stock.  American Wagering, Inc., and its wholly owned
subsidiary, Leroy's Horse and Sports Place, are currently
operating their businesses under Chapter 11 of the Bankruptcy
Code.  Youbet's proposal was contained in a competing
reorganization plan filed with the United States Bankruptcy Court
in Reno, Nevada.

Leroy's Horse and Sports Place operates Nevada's largest statewide
network of sports and race wagering facilities in 49 locations and
previously announced plans to expand to 60 locations by Dec. 1,
2004.  AWI also owns and operates Computerized Booking Systems,
Inc., which supplies nearly 85% of the sports wagering computer
systems in use by Nevada casinos, and AWI Manufacturing, Inc., a
manufacturer, distributor and supplier of race and sports self-
service wagering kiosks.

For the six months ended July 31, 2004, AWI reported consolidated
operating income of $296,000 on revenue of $5.5 million.  The
company, which currently employs nearly 300 people, has total
assets of $9.6 million and total liabilities of $7.8 million.

The Bankruptcy Court recently denied AWI's motion to exclude
Youbet and other interested companies from filing competing plans
to acquire AWI.  The Youbet reorganization plan must be confirmed
by the Bankruptcy Court, which may accept, reject or request
changes to the proposed plan.  The Bankruptcy Court has scheduled
a hearing on Nov. 12th to consider Youbet's motion to approve the
proposed Disclosure Statement accompanying its reorganization
plan.  If Youbet's motion is granted, the Bankruptcy Court will
consider all competing plans at the confirmation hearing currently
scheduled for Feb. 14, 2005.  Youbet's proposed acquisition is
subject to several conditions and approvals, including approval by
AWI creditors and shareholders, the Bankruptcy Court, and the
Nevada Gaming Commission.

Youbet Chairman and CEO Charles F. Champion commented on the
proposal, "An acquisition of AWI would be consistent with our
stated goals of expanding into ancillary areas of the gaming and
wagering industries where we can leverage our existing
capabilities and infrastructure capacity while diversifying our
sources of revenue.  If completed, the acquisition would also
enhance Youbet's entry into the Nevada market where we believe
there are opportunities to work on various business initiatives
with casino operators."

Mr. Champion concluded, "We believe our offer represents an
excellent financial and strategic proposal not only for AWI's
creditors and shareholders but for Youbet shareholders as well.
By combining the operations of two leaders in their respective
sectors, we can continue our track record of serving customers of
wagering and entertainment products and services, while realizing
the operating efficiencies inherent in combining the companies'
overheads.  The stock component of our offer would allow current
AWI shareholders to participate in the future of the combined
entity and our plans for further growth."

                        About Youbet.com

Youbet.com is the largest Internet provider of thoroughbred,
quarter horse and harness horse racing content in the United
States.  Members have the ability to watch and, in most states,
the ability to wager on vast majority of all major domestic horse
racing content via Youbet.com's exclusive closed-loop network.
Youbet.com members enjoy features that include commingled track
pools, live audio/video, up-to-the-minute track information, real-
time wagering information, phone wagering and value-added
handicapping products.

Youbet.com is an official online wagering platform of Churchill
Downs Incorporated and the Kentucky Derby.  Youbet.com operates
Youbet.com TotalAccess(TM), an Oregon-based hub for the acceptance
and placement of wagers.  More information on Youbet can be found
at http://www.Youbet.com/

Headquartered in Reno, Nevada, American Wagering, Inc. --
http://www.americanwagering.com/main.html-- owns and operates a
number of subsidiaries including, but not limited to, (1) Leroy's
Horse and Sports Place, which operates 47 race and sports books
licensed by the Nevada Gaming Commission, giving it the largest
number of books in the state; (2) Computerized Bookmaking Systems,
the dominant supplier of computerized sports wagering systems in
the state of Nevada; and (3) AWI Manufacturing (formerly AWI Keno)
is licensed by the Nevada Gaming Commission as a manufacturer and
distributor, and has developed a self-service race and sports
wagering kiosk.  The Company filed for chapter 11 protection on
July 25, 2003 (Bankr. D. Nev. Case No. 03-52529).  Thomas H. Fell,
Esq., at Gordon & Silver, Ltd., represents the Debtor in its
restructuring efforts.  When the Debtor filed for bankruptcy, it
listed $13,694,623 in total assets and $13,688,935 in total debts.


APPLICA INC: Moody's Junks Senior Subordinated Debt Rating
----------------------------------------------------------
Moody's Investors Service downgraded the debt ratings of Applica
Incorporated reflecting the company's weakened cash flow and
liquidity profile in light of ongoing industry challenges.  The
rating outlook remains negative.

The ratings were downgraded:

   * Senior implied rating, to B3 from B1;

   * $205 million senior secured revolving credit facility due
     December 28, 2005 to B2 from Ba3;

   * $60.8 million 10% Senior subordinated notes due
     July 31, 2008 to Caa2 from B3;

   * Senior unsecured issuer rating to Caa1 from B2.

The ratings downgrade and negative outlook reflect:

     (i) the erosion in Applica's profitability and its ongoing
         exposure to product categories with weak brand loyalty,

    (ii) raw material price sensitivity,

   (iii) low entry barriers, and

    (iv) concentration of retail distributors.

Going forward, Moody's believes that material improvement in
Applica's deteriorated credit measures could be challenging.  In
the year-to-date period through June 2004, sales of Applica's core
Black & Decker products have been strong, but expected cost
savings have not materialized in the amounts expected, and were
not enough to counteract higher raw material costs.  Further,
sales from its new Tide branded stain removal system, which was
co-developed with The Procter & Gamble Company, did not perform as
well as expected.  As such, Applica will rely heavily on operating
improvements in the second-half of calendar 2004 in order to boost
its profits, including the launch of several new product
introductions.

On July 28, Applica sold its China-based manufacturing facility
for approximately $28.1 million.  Despite this sale, Moody's
expects increased borrowings in fiscal 2004 due to its weak
operating performance and the terms of its supply agreement with
the buyer.  Further, Moody's believes achieving positive free cash
flow in fiscal 2005 could be challenging in the absence of a
significant new product success or an improvement in industry
conditions.  For the twelve-month period ended June 2004, Moody's
estimates Applica's EBITDA at approximately $15 million, which was
insufficient to cover interest and capex and resulted in debt-to-
EBITDA of around 9.5x and negative free cash flow.

Current rating levels reflect the potential for moderate principal
loss on the subordinated notes, but also recognize that tangible
assets offer significant recovery prospects at current borrowing
levels.  However, ratings could be lowered further if Applica
fails to restore profitability and positive cash flow generation
over the coming quarters, as the failure to do so will likely
result in increased borrowing levels, further pressuring
subordinated note recovery prospects and access to its borrowing
lines.  Operating performance gains will become increasingly
important as the company nears the December 2005 maturity on its
revolving credit facility.

Moody's considers higher rating levels to be extremely unlikely in
the absence of material and sustainable improvements in:

   * profitability,
   * liquidity, and
   * debt levels.

That said, moderate improvements on these fronts could prompt
consideration for a stable ratings outlook.  Assuming continued
access to the revolving credit facility, the 2008 maturity on the
subordinated notes provides some flexibility to execute a growth
and margin improvement strategy with new products under the Black
& Decker brands and Procter & Gamble alliance.

Headquartered in Miramar, Florida, Applica Incorporated is a
manufacturer, marketer and distributor of small electric consumer
goods.  In 1998, Applica acquired the Black & Decker Household
Products Group, which licenses the Black & Decker name for small
household appliances.  The company's other products include its
own brands, such as Windmere and Littermaid, private label brands,
and other licensed names.  Sales for the twelve-month period ended
June 30, 2004 were approximately $674 million.


BANC OF AMERICA: Fitch Puts Low-B Ratings on Two 2004-I Certs.
--------------------------------------------------------------
Banc of America Mortgage Securities, Inc., series 2004-I mortgage
pass-through certificates, is rated by Fitch Ratings:

     -- $538,061,100 classes 1-A-1, 1-A-2, 1-A-R,1-A-LR, 2-A-1,
        2-A-2, 2-A-3, 3-A-1, 3-A-2 (senior certificates) 'AAA';

     -- $10,311,000 class B-1 'AA';

     -- $3,344,000 class B-2 'A';

     -- $1,950,000 class B-3 'BBB';

     -- $1,394,000 class B-4 'BB';

     -- $  836,000 class B-5 'B'.

The 'AAA' rating on the senior certificates reflects the 3.45%
subordination provided by the:
          * 1.85% class B-1,
          * 0.60% class B-2,
          * 0.35% class B-3,
          * 0.25% privately offered class B-4,
          * 0.15% privately offered class B-5,
          * and 0.25% privately offered class B-6.

The ratings on class B-1, B-2, B-3, B-4 and B-5 certificates
reflect each certificates' respective level of subordination.

The ratings also reflect the quality of the underlying mortgage
collateral, the primary servicing capabilities of Bank of America
Mortgage, Inc., rated 'RPS1' by Fitch and Fitch's confidence in
the integrity of the legal and financial structure of the
transaction.

The transaction consists of three groups of adjustable interest
rate, fully amortizing mortgage loans, secured by first liens on
one- to four-family properties, with a total of 1,062 loans and an
aggregate principal balance of $557,289,472 as of
September 1, 2004 (cut-off date).  The three loan groups are
cross-collateralized.

The group 1 collateral consists of 3/1 hybrid adjustable-rate
mortgage (ARM) loans.  After the initial fixed interest rate
period of three years, the interest rate will adjust annually
based on the sum of One-Year LIBOR index and a gross margin
specified in the applicable mortgage note.

Approximately 26.07% of group 1 loans require interest-only
payments until the month following the first adjustment date.  As
of the cut-off date, the group has an aggregate principal balance
of approximately $82,693,525 and an average balance of $520,085.
The weighted average original loan-to-value ratio --OLTV -- for
the mortgage loans is approximately 72.31%.

The weighted average remaining term to maturity -- WAM -- is 359
months and the weighted average FICO credit score for the group is
732.  Second homes and investor-occupied properties comprise 7.16%
and 2.53% of the loans in group 1, respectively.

Rate/Term and cashout refinances account for 21.57% and 13.95% of
the loans in group 1, respectively.  The states that represent the
largest geographic concentration of mortgaged properties are
California (63.18%) and Florida (8.80%).

All other states represent less than 5% of the outstanding balance
of the group.

The group 2 collateral consists of 5/1 hybrid ARM loans.  After
the initial fixed interest rate period of five years, the interest
rate will adjust annually based on the sum of One-Year LIBOR index
and a gross margin specified in the applicable mortgage note.

Approximately 69.76% of group 2 loans require interest-only
payments until the month following the first adjustment date.
As of the cut-off date, the group has an aggregate principal
balance of approximately $414,435,452 and an average balance of
$525,267.  The weighted average OLTV for the mortgage loans is
approximately 73.49%.

The WAM is 358 months and the weighted average FICO credit score
for the group is 736. Second homes and investor-occupied
properties comprise 10.82% and 1.73% of the loans in group 2,
respectively.  Rate/Term and cashout refinances account for 16.11%
and 13.59% of the loans in group 2, respectively.  The states that
represent the largest geographic concentration of mortgaged
properties are California (61.69%) and Florida (7.98%).

All other states represent less than 5% of the outstanding balance
of the pool.

The group 3 collateral consists of 7/1 hybrid ARM mortgage loans.
After the initial fixed interest rate period of seven years, the
interest rate will adjust annually based on the sum of One-Year
LIBOR index and a gross margin specified in the applicable
mortgage note.

Approximately 5.49% of group 3 loans require interest-only
payments until the month following the first adjustment date.  As
of the cut-off date, the group has an aggregate principal balance
of approximately $60,160,494 and an average balance of $527,724.
The weighted average OLTV for the mortgage loans is approximately
71.45%.

The WAM is 359 months and the weighted average FICO credit score
for the group is 749. Second homes and investor-occupied
properties comprise 7.75% and 0.70% of the loans in group 3,
respectively. Rate/Term and cashout refinances account for 10.53%
and 10.22% of the loans in group 3, respectively.

The states that represent the largest geographic concentration of
mortgaged properties are:
          * California (46.94%),
          * Virginia (8.17%), and
          * North Carolina (5.36%).

All other states represent less than 5% of the outstanding balance
of the group.

Approximately 57.16%, 54.58% and 70.88% of the groups 1, 2 and 3
mortgage loans, respectively, were originated under the
Accelerated Processing Programs.  Loans in the Accelerated
Processing Programs, which may include the All-Ready Home and Rate
Reduction Refinance programs, are subject to less stringent
documentation requirements.

None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws.  For additional information on
Fitch's rating criteria regarding predatory lending legislation,
please see the press release issued
May 1, 2003, entitled 'Fitch Revises Rating Criteria in Wake of
Predatory Lending Legislation,' available on the Fitch Ratings web
site at http://www.fitchratings.com.

Banc of America Mortgage Securities, Inc. deposited the loans in
the trust, which issued the certificates, representing undivided
beneficial ownership in the trust.  For federal income tax
purposes, elections will be made to treat the trust as two
separate real estate mortgage investment conduits -- REMICs. Wells
Fargo Bank, National Association will act as Trustee.


BANKAMERICA: Moody's Junks Ratings on 3 Certificate Classes
-----------------------------------------------------------
Moody's Investors Service has confirmed the ratings on 5 senior
and 3 mezzanine certificates and downgraded the ratings of 2
mezzanine and 10 subordinate certificates from five of
BankAmerica's manufactured housing securitizations.  The rating
action concludes Moody's rating review, which began on July 14,
2004.

Moody's previously downgraded the ratings of several senior,
mezzanine, and subordinate certificates of BankAmerica's 1996-1,
1997-1, and 1997-2 manufactured housing securitizations in July
1999 and in May 2000.  Similar to other manufactured housing
securitizations, the rating actions were primarily based on the
significantly weaker-than-anticipated performance of the
manufactured housing loans and the resulting erosion in credit
support.  At that time, Moody's did not downgrade any tranches of
the Series 1998-1 and 1998-2 deals as credit support levels were
sufficient to maintain the ratings.

The current review is prompted by the continued deterioration in
the performance of BankAmerica's manufactured housing pools.  The
deteriorating performance is partly due to macroeconomic factors,
such as high unemployment levels in the manufacturing sector where
many borrowers are employed.  This has placed increased pressure
on the manufactured housing sector, further magnifying
repossessions and loss severities. Since the prior rating action,
repossessions have continued to remain high, leading to high
cumulative losses.

As of the Aug 31, 2004 remittance report, cumulative losses were:

   * 16.05%,
   * 16.70%,
   * 15.99%,
   * 11.53%, and
   * 13.18% for series 96-1, 97-1, 97-2, 98-1, and 98-2,
     respectively;

Cumulative repossessions were:

   * 23.21%,
   * 23.42%,
   * 22.35%,
   * 15.97%, and
   * 13.18% for series 97-1, 97-2, 98-1, and 98-2, respectively.

Loss severities for all deals range from 80% to 90%. Consequently,
all of the mezzanine and subordinate tranches have suffered
significant interest shortfalls with the exception of the
mezzanine certificate of series 96-1, where the shortfall is
covered by the letter of credit from BankAmerica Corporation.
Furthermore, for some of the deals, the pool balance is less that
the certificate balance.

The complete rating action is as follows:

Issuer: BankAmerica Manufactured Housing Contract Trust I, Series
1996-1

   -- 7.800% Class A-7 Certificates, confirmed at Aa3
   -- 7.875% Class B-1 Certificates, downgraded from B2 to Ca
   -- 8.500% Class B-2 Certificates, downgraded from Ca to C

Issuer: BankAmerica Manufactured Housing Contract Trust II, Series
1997-1

   -- 6.80% Class M Certificates, confirmed at Baa2
   -- 6.94% Class B-1 Certificates, downgraded from B2 to Ca
   -- 7.70% Class B-2 certificates, downgraded from Caa2 to C

Issuer: BankAmerica Manufactured Housing Contract Trust III,
Series 1997-2

   -- 0.15% Class IO Certificates, confirmed at Aa2
   -- 6.79% Class A-8 Certificates, confirmed at Aa2
   -- 7.09% Class A-9 Certificates, confirmed at Aa2
   -- 6.90% Class M Certificates, confirmed at Ba1
   -- 7.07% Class B-1 Certificates, downgraded from Caa2 to C
   -- 8.40% Class B-2 Certificates, downgraded from Ca to C

Issuer: BankAmerica Manufactured Housing Contract Trust IV ,
Series 1998-1

   -- 6.47% Class A-1 Certificates, confirmed at Aaa
   -- 6.94% Class M Certificates, downgraded from Aa3 to Baa1
   -- 7.81% Class B-1 Certificates, downgraded from Baa2 to Caa2
   -- 8.00% Class B-2 Certificates, downgraded from Ba2 to C

Issuer: BankAmerica Manufactured Housing Contract Trust V , Series
1998-2

   -- 6.55% Class A-7 Certificates, confirmed at Aaa
   -- 6.83% Class M Certificates, downgraded from Aa3 to Baa2
   -- 7.93% Class B-1 Certificates, downgraded from Baa2 to Ca
   -- 7.60% Class B-2 Certificates, downgraded from Ba2 to C

The loans were originated by BankAmerica Housing Services and are
currently being serviced by GreenPoint Credit LLC. GreenPoint
Credit LLC is a wholly owned subsidiary of GreenPoint Financial
Corp.


BEND-COR LLC: Case Summary & 7 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Bend-Cor, LLC
        964 Second Avenue
        New York, New York 10022

Bankruptcy Case No.: 04-16479

Chapter 11 Petition Date: October 6, 2004

Court: Southern District of New York (Manhattan)

Debtor's Counsel: Lawrence A. Grossman, Esq.
                  Lawrence Grossman and Associates, P.C.
                  8 West 38th Street, Room 803
                  New York, New York 10018
                  Tel: (212) 730-1750
                  Fax: (212) 730-7670

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

Estimated Debts: $1 Million to $10 Million

Debtor's 7 largest unsecured creditors:

    Entity                               Claim Amount
    ------                               ------------
CITSBLC                                      $877,000
1 CIT Drive,
Livingston, New Jersey 07039

On International LLC                         $206,951
300 East 57th Street,
New York, New York 10022

GE Capital                                    $20,000

Woolco Foods Inc.                              $3,945

Gramercy Produce                               $2,528

I Halper Paper and Supplies                    $2,160

Saxony                                           $738


BMC INDUSTRIES: Sells Buckbee-Mears Business for $9.1 Million
-------------------------------------------------------------
The Honorable Robert Kressel of the U.S. Bankruptcy Court for the
District of Minnesota put his stamp of approval on an order
authorizing BMC Industries Inc. to sell its Buckbee-Mears Medical
Technologies LLC subsidiary to International Electron Devices LLC
for $9.1 million.

IED has indicated that it will continue to operate under the trade
name Buckbee-Mears, saying that name carries global recognition as
a leader in the photochemical machining industry.

Earlier this year, as reported in the Troubled Company Reporter,
BMC Industries sold its Vision-Ease Lens Inc. business to Insight
Equity Partners L.P. for $56.5 million.

BMC will use the net proceeds from these asset sales to repay any
outstanding debtor-in-possession financing and a portion of the
outstanding indebtedness under its senior secured credit facility.

Headquartered in Ramsey, Minnesota, BMC Industries Inc. --
http://www.bmcind.com/-- is a multinational manufacturer and
distributor of high-volume precision products in two business
segments, Optical Products and Buckbee Mears. The Company, along
with its affiliates, filed for chapter 11 protection (Bankr. D.
Minn. Case No. 04-43515) on June 23, 2004. Jeff J. Friedman, Esq.,
at Katten Muchin, Zavis Rosenman and Clinton E. Cutler, Esq., at
Fredrikson & Byron, P.A., represent the Debtors in their
restructuring efforts. When the Debtor filed for protection from
its creditors, it listed $105,253,000 in assets and $164,751,000
in liabilities.


BMC INDUSTRIES: Hires Katten Muchin as Bankruptcy Counsel
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota gave BMC
Industries, Inc., and its debtor-affiliates permission to retain
Katten Muchin Zavis Rosenman as its bankruptcy counsel.

Katten Muchin worked for the Debtors since June 2003 in performing
extensive legal services in connection with their restructuring
efforts. The Firm is therefore familiar with the Debtors'
business, legal and financial affairs and many of the potential
legal issues that may arise with their chapter 11 cases.

Katten Muchin will:

    a) advise the Debtors with respect to their powers and duties
       as debtors-in-possession in the continued management and
       operations of their businesses and properties;

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

    c) advise and consult the Debtors on the conduct of the case,
       including all of the legal and administrative requirements
       of operating in chapter 11;

    d) take all necessary actions to protect the Debtors' estates,
       including:

          (i) the prosecution of action on the Debtors' behalf,

         (ii) the defense of any actions commenced against those
              estates,

        (iii) negotiations concerning litigations in which the
              Debtors may be involved, and

         (iv) objections to claims filed against the estates;

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

    f) negotiate and prepare plans of liquidation, disclosure
       statements, related agreements and documents, and take any
       necessary actions on behalf of the Debtors to obtain
       confirmation of those plans;

    g) advise the Debtors in connection with the sale of their
       assets;

    h) appear before the Bankruptcy Court, any appellate courts,
       and the United States Trustee to protect the interests of
       the Debtors' estates; and

    i) perform or provide other necessary legal advice and
       services to the Debtors in connection with their chapter 11
       cases and the orderly liquidation of the Debtors'
       businesses, including:

          (i) advising and assisting the Debtors with respect to
              healthcare issues,

         (ii) resolving disputes with any creditor constituencies
              that may arise, stock or asset dispositions, or
              other strategic transactions, and

        (iii) legal issues involving real estate, general
              corporate, bankruptcy, labor, employee benefits,
              securities, tax, finance, and litigation matters.

Jeff J. Friedman, Esq., a Partner at Katten Muchin, discloses that
the Debtors paid a $250,000 retainer.

Mr. Friedman reports the bill of Katten Muchin professionals
rendering their services:

    Professional               Designation          Hourly Rate:
    ------------               -----------          -----------
    Jeff J. Friedman           Partner                $ 575
    Jeffrey L. Elegant         Partner                  425
    Kenneth J. Ottaviano       Partner                  380
    Merrit A. Pardini          Associate                295
    Jeffrey A. Chadwick        Associate                230
    Regina Walker              Paraprofessional         130

Mr. Friedman reports other Katten Muchin professionals bill:

    Designation                Hourly Rate
    -----------                -----------
    Partners                   $700 - 325
    Counsel                     615 - 380
    Associates                  415 - 190
    Paraprofessionals           225 - 75

To the best of the Debtors' knowledge, Katten Muchin is
"disinterested" as the term is defined in Section 101(14) of the
Bankruptcy Code.

Headquartered in Ramsey, Minnesota, BMC Industries Inc. --
http://www.bmcind.com/-- is a multinational manufacturer and
distributor of high-volume precision products in two business
segments, Optical Products and Buckbee Mears. The Company, along
with its affiliates, filed for chapter 11 protection (Bankr. D.
Minn. Case No. 04-43515) on June 23, 2004. Jeff J. Friedman, Esq.,
at Katten Muchin, Zavis Rosenman and Clinton E. Cutler, Esq., at
Fredrikson & Byron, P.A., represent the Debtors in their
restructuring efforts. When the Debtor filed for protection from
its creditors, it listed $105,253,000 in assets and $164,751,000
in liabilities.


BOISE CASCADE: S&P Puts 'BB' Rating on Senior Secured Bank Loan
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' corporate
credit rating to Boise Cascade LLC and to Boise Land & Timber
Corporation.

At the same time, based on preliminary terms and conditions,
Standard & Poor's assigned its 'BB' senior secured bank loan
rating and its '2' recovery rating to Boise's $2.905 billion
revolving credit and term loan facility.  These ratings reflect an
expectation of significant -- 80% to 100% -- recovery of principal
in the event of default.

In addition, Standard & Poor's assigned its 'B+' senior unsecured
debt rating to Boise Cascade's $250 million senior unsecured notes
due 2012, and its 'B+' subordinated debt rating to Boise Cascade's
$400 million subordinated notes due 2014, both to be issued under
Rule 144a with registration rights.

The senior unsecured debt is rated two notches below the corporate
credit rating, reflecting the significant amount of priority
liabilities that would rank ahead of unsecured lenders in the
event of bankruptcy.  Although the senior unsecured notes rank
ahead of the subordinated notes, they are rated the same because
Standard & Poor's rating methodology permits a company's junior-
most debt to be rated a maximum of two notches below its corporate
credit rating.  The outlook is stable.

Based in Boise, Idaho, Boise Cascade and Timber Corp. are each
indirect subsidiaries of Forest Products Holding LLC, a holding
company newly formed by Madison Dearborn Partners LLC -- MDP -- to
acquire the paper and wood products manufacturing and distribution
businesses, including timberlands, from Boise Cascade Corporation
-- "OfficeMax" -- for $3.7 billion.

Boise Cascade Corporation will be renamed OfficeMax Inc. following
completion of this transaction.  Boise Cascade and its domestic
subsidiaries, which will own the manufacturing and distribution
businesses, will guarantee Timber Corp.'s debt, and Timber
Corporation, which will own the timberlands, will guarantee Boise
Cascade's debt.

The acquisition will be financed with proceeds from:

   -- the revolving credit facility,

   -- the term loans,

   -- the notes, and

   -- $615 million of equity provided by MDP, management, and
      OfficeMax

Upon conclusion of this transaction, Boise's debt, including
capitalized operating leases, will be $3.3 billion, with pro forma
debt to EBITDA of 6x.

However, Standard & Poor's ratings incorporate expectations that
Boise will sell its timberlands over the next year or so for about
$1.65 billion, with proceeds used to reduce debt to about $1.7
billion and strengthen pro forma debt to EBITDA to 3.5x.

"The ratings reflect Boise's participation in cyclical paper and
wood products manufacturing markets, concerns about declining
demand due to competing technologies and product substitution
risks, competitors with larger scale and more attractive cost
positions, limited geographic diversity, some customer
concentration, potentially higher wood costs as timberlands are
sold, and aggressive debt leverage," said Standard & Poor's credit
analyst Pamela Rice.

Partially offsetting these negative factors are:

   -- the company's product diversity and growing value-added
      product mix,

   -- relatively stable building products distribution business,

   -- high level of pulp integration,

   -- benefits from a long-term supply agreement, and

   -- additional consideration agreement with OfficeMax that
      provides price protection


BUSH INDUSTRIES: Needs Six More Months to Negotiate Revised Plan
----------------------------------------------------------------
Bush Industries Inc. is asking the U.S. Bankruptcy Court for the
Western District of New York for a six-month extension of its
exclusive periods to file a revised chapter 11 plan of
reorganization and re-solicit acceptances of that revised plan
from creditors.  The Honorable Carl L. Bucki will convene a
hearing in Buffalo on Oct. 18, 2004, to consider the Debtor's
request for an extension of its exclusive periods under
11 U.S.C. Sec. 1121.

Judge Bucki denied confirmation of the Debtor's chapter 11 plan on
Sept. 16, 2004, finding that the Debtor's directors breached their
fiduciary duties when they authorized a $3.8 million severance
payment to former CEO Paul S. Bush when he resigned the day
before the company filed for bankruptcy protection.  Judge Bucki
ruled that the Debtor's Plan, as crafted, improperly releases Mr.
Bush and doesn't pass the good faith requirement imposed under
11 U.S.C. Sec. 1129(a)(3).  A full-text copy of Judge Bucki's 28-
page decision denying confirmation is available at no charge at:

   http://www.nywb.uscourts.gov/clbdecisions/bush_ind_904.pdf

Bush Industries, based in Jamestown. N.Y., manufactures case goods
and ready-to-assemble furniture.  The company filed for Chapter 11
protection on March 31, 2004 (Bankr. W.D.N.Y. Case No. 04-12295).
Garry M. Graber, Esq., Julia S. Kreher, Esq., and Stephen L.
Yonaty, Esq., at Hodgson Russ LLP, represent the Debtor.  Michael
S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
DDJ Capital Management, the Debtors' major creditor.  John A.
Morris, Esq., Lawrence C. Gottlieb, Esq., Eric J. Haber, Esq., and
Scott J. Pashman, Esq., at Kronish Lieb Weiner & Hellman LLP,
represent an Official Committee of Equity Security Holders
appointed in the Debtor's case.


CHOICE ONE: Files Prepackaged Chapter 11 Petition in S.D. New York
------------------------------------------------------------------
Choice One Communications, Inc., and its 18 debtor-affiliates
filed a pre-arranged chapter 11 petition in the United States
Bankruptcy Court for the Southern District of New York.

Choice One previously reached an agreement in principle with ad
hoc committees of its senior and subordinated lenders to
restructure and substantially reduce the Company's debt,
strengthen its balance sheet, and increase its liquidity.

The Company expects to continue normal operations throughout the
restructuring process.  All services provided to clients are
expected to continue on a "business as usual" basis.

As reported in the Troubled Company Reporter on Aug. 3, 2004, the
financial restructuring, through a prepackaged chapter 11
proceeding, is designed to be completed promptly with minimal
disruption to the Company's business and without affecting the
provision of the Company's services to its clients.  To ensure the
continued stability of the Company's management, certain
restricted stock and stock option grants would be made in amounts
and subject to conditions thereon to be determined.  It is
expected that the Company's existing preferred and common
stockholders would not receive any recovery.

                   Moves to Enhance Operations

As reported in the Troubled Company Reporter on Sept. 27, 2004,
Choice One made a series of operational actions to reduce costs
and enhance the efficiency of its back-office and sales
operations.

The actions do not affect either client service personnel or
client services, which continue without interruption.  The Company
believes that as a result of the operational actions, and of the
Company's financial restructuring, Choice One will be well-
positioned strategically, operationally and financially for long-
term strength and success.

Among the steps taken were:

   -- The implementation, company-wide, of a more efficient, team-
      based provisioning process to reduce the interval between
      new client orders and the initiation of service, increase
      accuracy, and reduce costs.  Reflecting the operating
      efficiencies created by this new provisioning process, which
      Choice One has successfully tested over the past two months,
      a limited number of back-office positions will be
      eliminated, and it is anticipated that certain back-office
      staff currently located in the Company's regional
      headquarters in Grand Rapids, Michigan, will be moved to the
      Company's headquarters in Rochester, New York.

   -- A shift in marketing model, in seven of the Company's 29
      markets, from direct sales by Choice One personnel to the
      use of independent sales agents and the associated
      elimination of Company-owned sales offices.  The markets
      involved include Columbus, Oh., Evansville, Ind., Hartford,
      Conn., New Haven, Conn., Indianapolis, Ind., Kalamazoo,
      Mich., and Springfield, Mass.  There, as elsewhere, Choice
      One will continue to provide service to both existing and
      new clients exactly as before.  Beyond the sales positions
      eliminated in these seven markets, the Company expects to
      eliminate few if any sales positions in the 22 other Choice
      One markets.

The operational actions are expected to result in an approximately
14% reduction in the Company's staffing level organization-wide,
to approximately 1,200 from a total of approximately 1,400
colleagues as of June 30, 2004.  As a result of planned job
transfers from Grand Rapids to Rochester, however, it is
anticipated that staff levels at the Company's corporate
headquarters in Rochester may increase.

Headquartered in Rochester, New York, Choice One Communications,
Inc. (OTCBB: CWON) -- http://www.choiceonecom.com/-- is an
Integrated Communications Provider offering voice and data
services including Internet solutions, to businesses in 29
metropolitan areas (markets) across 12 Northeast and Midwest
states.  Choice One reported $323 million of revenue in 2003, and
provides services to more than 100,000 clients.  The Company and
its 18 debtor-affiliates filed for chapter 11 protection on
October 5, 2004 (Bankr. S.D.N.Y. Case Nos. 04-16433 through 04-
16450).  Jeffrey L. Tanenbaum, Esq., and Paul M. Basta, Esq., at
Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts.  When the Debtors filed for bankruptcy, it
listed $354,811,000 in total assets and $1,078,478,000 in total
debts.


CHOICE ONE: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Lead Debtor: Choice One Communications Inc.
             100 Chestnut Street, Suite 600
             Rochester, New York 14604

Bankruptcy Case No.: 04-16433

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                           Case No.
      ------                                           --------
      Choice One OnLine Inc.                           04-16432
      Choice One Communications of Connecticut Inc.    04-16434
      Choice One Communications of Maine Inc.          04-16435
      Choice One Communications of Massachusetts Inc.  04-16436
      Choice One Communications of New York Inc.       04-16437
      Choice One Communications of Ohio Inc.           04-16438
      Choice One Communications of Pennsylvania Inc.   04-16439
      Choice One Communications of Rhode Island Inc.   04-16440
      Choice One Communications of Vermont Inc.        04-16441
      Choice One Communications of Virginia Inc.       04-16442
      Choice One Communications International Inc.     04-16443
      Choice One Communications Services Inc.          04-16444
      Choice One of New Hampshire Inc.                 04-16445
      US Xchange Inc.                                  04-16446
      US Xchange of Illinois L.L.C.                    04-16447
      US Xchange of Indiana L.L.C.                     04-16448
      US Xchange of Michigan, L.L.C.                   04-16449
      US Xchange of Wisconsin L.L.C.                   04-16450

Type of Business: Choice One, together with its 18 debtor
                  subsidiaries, is an integrated communications
                  provider offering a broad range of retail and
                  wholesale facilities-based voice and data
                  telecommunications services, primarily to small
                  and medium-sized businesses in 29 second- and
                  third-tier markets in 12 states in the
                  northeastern and midwestern United States.
                  See http://www.choiceonecom.com/and
                  http://www.choiceoneonline.com/

Chapter 11 Petition Date: October 5, 2004

Court: Southern District of New York (Manhattan)

Debtors' Counsel: Jeffrey L. Tanenbaum, Esq.
                  Paul M. Basta, Esq.
                  Weil Gotshal & Manges
                  767 Fifth Avenue
                  New York, New York 10153
                  Tel: (212) 310-8772
                  Fax: (212) 310-8007

Financial Condition as of June 30, 2004:

     Total Consolidated Assets:  $354,811,000

     Total Consolidated Debts:   $1,078,478,000

The Debtors' 20 consolidated largest unsecured creditors:

    Entity                      Nature Of Claim     Claim Amount
    ------                      ---------------     ------------
Quantum Partners LDC            Subordinated Notes  $132,665,984
c/o Soros Fund Management LLC
888 Seventh Avenue
New York, New York 10106

Credit Suisse First Boston      Subordinated Notes   $54,914,352
11 Madison Avenue, 14th Floor
New York, New York 10010-3629

First Union Investor, Inc.      Subordinated Notes   $31,844,468
c/o Wachovia Securities
201 South College Street, CP-8
Charlotte NC 28288-0680

Merrill Lynch & Co., Inc.       Subordinated Notes   $13,324,538
4 World Financial Center
250 Vesey Street
New York, New York 10080

Ameritech                       Trade Debt            $6,721,273
503 Preston Avenue
Meriden, Connecticut 06450

Verizon                         Trade Debt            $4,420,965
1095 Avenue of the Americas
New York, New York 10036

Bear Stearns Investment         Subordinated Notes    $4,126,645
Products Inc.
383 Madison Avenue
New York, New York 10179

Cargill Financial Services      Subordinated Notes    $3,869,536
International, Inc.
12700 Whitewater Drive, MS 144
Minnetonka, Minnesota 55343-9439

Cypress Management              Subordinated Notes    $3,865,182
100 Pine Street, Suite 2700
San Francisco, California 94111

Gracie Capital L.P.             Subordinated Notes    $2,304,282
527 Madison Avenue, 11th Floor
New York, New York 10022

Verizon North Inc.              Trade Debt            $1,466,719
P.O. Box 101226
Atlanta, Georgia 30392-1226

Armory Advisors                 Subordinated Notes    $1,000,000
4040 Civic Center Drive
Suite 200
San Rafael, California 94903

Verizon Wireless                Trade Debt              $686,090
180 Washington Valley Road
Bedminster, New Jersey 07921

Frontier Communications         Trade Debt              $618,361
180 South Clinton Street
Rochester, New York 14646

Lucent Technologies, Inc.       Trade Debt              $572,464
600 Mountain Avenue
Murray Hill, New Jersey 07974

Fibertech Networks              Trade Debt              $532,514
140 Allens Creek Road
Rochester, New York 14618

Excellus Blue Cross             Trade Debt              $454,473
Blue Shield
165 Court Street
Rochester, New York 14647

Universal Services              Trade Debt              $403,215
Administrative Company
1259 Paysphere Circle
Chicago, Illinois 60674

Penn Telecom, Inc.              Trade Debt              $308,121
2710 Rochester Rd., Suite 1
Cranberry Twp, Pennsylvania 16066

Paradyne Corporation            Trade Debt              $257,955
8545 126th Ave North
Largo, Florida 33773


CHOICE ONE: Wants to Retain Weil Gotshal as Bankruptcy Counsel
--------------------------------------------------------------
Choice One Communications, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Southern District of New York for
permission to employ Weil, Gotshal & Manges LLP as their counsel.

Weil Gotshal will:

     a) take all necessary action to protect and preserve the
        estates of the Debtors, including, if necessary, the
        prosecution 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 Debtors' estates;

     b) prepare on behalf of the Debtors, as debtors-in-
        possession, all necessary motions, applications, answers,
        orders, reports, and other papers in connection with the
        administration of the Debtors' estates;

     c) perform all other necessary legal services in connection
        with the prosecution of these chapter 11 cases; and

     d) perform all services in connection with confirmation of
        the Plan.

Jeffrey L. Tanenbaum, Esq., and Paul M. Basta, Esq., are the lead
attorneys in the Debtors' restructuring.

The hourly billing rates of attorneys at Weil Gotshal are:

                 Designation          Rate
                 -----------          ----
                 Counsel/Member    $500 - 775
                 Associates         240 - 460
                 Paraprofessionals   65 - 200

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

Headquartered in Rochester, New York, Choice One Communications,
Inc. -- http://www.choiceonecom.com/-- is an Integrated
Communications Provider offering voice and data services including
Internet solutions, to businesses in 29 metropolitan areas
(markets) across 12 Northeast and Midwest states.  Choice One
reported $323 million of revenue in 2003, and provides services to
more than 100,000 clients.  The Company and its 18 debtor-
affiliates filed for chapter 11 protection on October 5, 2004
(Bankr. S.D.N.Y. Case No. 04-16433).  When the Debtors filed for
bankruptcy, they reported $354,811,000 in total assets and
$1,078,478,000 in total debts on a consolidated basis.


CHOICE ONE: Wants Ordinary Course Professionals to Continue
-----------------------------------------------------------
Choice One Communications, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court of the Southern District of New York for
permission to retain professionals they turn to in the ordinary
course of their businesses without bringing formal employment
applications to the Court every time.

In the day-to-day performance of its duties, the Debtors regularly
call upon various professionals who render a wide range of legal,
accounting, tax and other services that impact their businesses'
day-to-day operations.

Because of the nature of the Debtors' businesses, it would be
costly, time-consuming and administratively cumbersome to require
each Ordinary Course Professional to file and prosecute separate
employment and compensation applications.  The Debtors submit that
the uninterrupted service of the Ordinary Course Professionals is
vital to avoid disruption of their normal business operations.

The Debtors tell the Court that no payment to an ordinary course
professional will exceed $50,000 per month.

The Debtors believe that the Ordinary Course Professionals do not
hold any interest adverse to them, their creditors or other
parties-in-interest.

Headquartered in Rochester, New York, Choice One Communications,
Inc. -- http://www.choiceonecom.com/-- is an Integrated
Communications Provider offering voice and data services including
Internet solutions, to businesses in 29 metropolitan areas
(markets) across 12 Northeast and Midwest states.  Choice One
reported $323 million of revenue in 2003, and provides services to
more than 100,000 clients.  The Company and its 18 debtor-
affiliates filed for chapter 11 protection on October 5, 2004
(Bankr. S.D.N.Y. Case No. 04-16433).  When the Debtors filed for
bankruptcy, they reported $354,811,000 in total assets and
$1,078,478,000 in total debts on a consolidated basis.


COVANTA ENERGY: Asks Court to Approve American Airlines Settlement
------------------------------------------------------------------
Covanta Energy Corporation and its debtor-affiliates ask the
United States Bankruptcy Court for the Southern District of New
York to approve their settlement agreement with American Airlines,
Inc.

Paul R. DeFilippo, Esq., at Wollmuth Maher & Deuthsch, in Newark,
New Jersey, relates that prior to the Petition Date, Liquidating
Debtor Ogden New York Services, Inc., provided fueling services
at John F. Kennedy International Airport in Queens, New York.  As
part of the fueling services, Ogden NY provided JFK fuel storage
management and into-plane fueling.  The Port Authority of New
York and New Jersey operated JFK.

For JFK's fueling operations, Ogden NY purchased Contractor's
Environmental Impairment Liability Policies from Zurich Insurance
Company, for policy years 1996 through 1999.

On March 6, 1996, United Air Lines, Inc., advised Ogden NY,
American Airlines, and the Port Authority that United considered
Ogden NY and other entities to be potentially liable under the
New York Oil Spill Prevention Control and Compensation Law for
soil and groundwater contamination at JFK.  United alleged that
the contamination resulted from fuel delivery to commercial
aircraft.  United asked Ogden NY and the other entities to
participate in clean-up activities at JFK.

                       The Airline Lawsuits

On January 4, 2000, United filed a lawsuit against Ogden NY,
seeking a declaratory judgment that Ogden NY was responsible for
petroleum contamination at JFK terminals leased and operated by
United.  On January 21, 2000, American also filed a complaint
against Ogden NY seeking a similar declaratory judgment.  The
Airline Lawsuits have been consolidated for joint trial.  As a
result of the bankruptcy filings by Ogden NY and United, the
Airline Lawsuits were stayed as against Ogden NY and United.

The Airlines allege that Ogden NY negligently caused discharges
of petroleum at JFK and therefore is obligated to indemnify the
Airlines for clean-up costs and legal expenses.  The Airlines
further allege that Ogden NY is liable under New York's Spill
Law, which imposes liability on those responsible for petroleum
discharges under the common law theories of indemnification and
contribution.

United seeks at least $1,540,000 in technical contractor costs
and $432,000 in related legal expenses, as well as a declaration
that Ogden NY and its co-defendants are responsible for future
losses, costs and expenses incurred by United.

American seeks reimbursement of all or a portion of $4,600,000
allegedly spent in JFK clean-up costs and legal fees, plus
additional future losses, costs and expenses that could lead to
an aggregate claim of $70,000,000.  American filed claims against
Ogden NY, including Claim Nos. 3200 and 3201, asserting a general
unsecured claim aggregating $74.5 million.

On February 26, 2001, Ogden NY filed counter-claims and cross-
claims against United and American for contribution.

                       The Zurich Settlement

Ogden NY filed a coverage action against Zurich Insurance on
February 20, 2001, alleging that Zurich was in breach of contract
for not fulfilling, pursuant to the Insurance Policies, its
obligation to defend and indemnify Ogden NY should it become
liable for damages in connection with the Airline Lawsuits.
Ogden NY also sought a declaration of the parties' rights under
the Insurance Policies in connection with the Airline Lawsuits.

On April 28, 2003, the Debtors asked the Court to approve a
settlement agreement between Ogden NY and Zurich, wherein Zurich
agreed to pay $1.8 million to Ogden NY to finally settle all
claims for defense and indemnity related to environmental
impairments allegedly resulting from Ogden NY's fueling
operations at JFK.

American objected to the Zurich Settlement, asserting rights to
the entire $1.8 million insurance proceeds.  American also asked
the Court to establish a constructive trust for the Insurance
Proceeds.  Subsequently, American and Ogden NY agreed upon a
consensual form of order wherein:

    * Ogden NY preserved its rights to argue that American was not
      entitled to any amount of the Insurance Proceeds;

    * American preserved its rights to assert a claim for the
      Insurance Proceeds; and

    * Ogden NY agreed not to distribute the Insurance Proceeds to
      any other party on account of any purported interests in
      the proceeds without prior Court order and without prior
      notice to American's counsel.

On May 22, 2003, the Court entered a consensual order approving
the Zurich Settlement.

Pursuant to the Liquidation Plan, Debtor Covanta Energy
Corporation is authorized to retain the entire amount of the
Insurance Proceeds.  The Liquidation Plan further provides that
holders of allowed claims in Class 7 will receive no
distributions under the Liquidation Plan, but does not impair or
expand the holders' rights, to the extent they exist, to pursue
any available insurance proceeds.

                       The Proposed Settlement

To avoid the continued expense and uncertainty of litigation that
the Debtors might otherwise incur in connection with American's
pursuit of insurance proceeds pursuant to the Liquidation Plan,
Ogden NY and American entered into a settlement agreement.

The salient terms of the Settlement Agreement are:

    (a) Covanta will pay American using $300,000 of the Insurance
        Proceeds.

    (b) American's Claims will be deemed withdrawn and American
        will have a $15,000,000 allowed general unsecured claim
        against Ogden NY, which claim will be subject to the
        treatment provided to Class 7 Claims under the Liquidation
        Plan.

    (c) American's rights to recover against any Insurers will be
        fully preserved to the extent the rights relate to actual
        or alleged environmental contamination concerning Ogden
        NY's operations at Terminals 8 and 9 at JFK, the
        underlying soil, subsoil and groundwater, and all land,
        tidal lands and other areas appurtenant thereto, affected
        or potentially affected by environmental contamination
        arising from Ogden NY's operations at Terminals 8 and 9,
        prior to December 21, 2002, including any continuing
        migration of the contamination.

    (d) Ogden NY will assign to American all rights or claims
        against any Insurer as those rights or claims exist as of
        the execution of the Settlement Agreement with respect to
        actual or alleged environment contamination concerning
        Ogden NY's operations at the Site prior to December 31,
        2002, whether by coverage litigation or settlement.

    (e) American will have the right, on behalf of Ogden NY and in
        its name, to prosecute or defend any coverage litigation,
        or negotiate any settlement or otherwise obtain a recovery
        on account of coverage from any Insurer.  In the event
        that any compromise or settlement reached provides for the
        exhaustion of coverage available under the Policy or a
        release of any Policy with respect to the Site, American
        will obtain Ogden NY and Covanta's prior written consent,
        which consent will not be unreasonably withheld.

    (f) Ogden NY and Covanta will cooperate to effectuate the
        purposes of the Settlement Agreement at American's own
        cost, subject to the limitations imposed by available
        resources and the Chapter 11 proceedings.  Other than the
        costs of negotiating and finalizing the Settlement
        Agreement, neither Ogden NY, Covanta nor any other Ogden
        entities will be required to incur any costs or expenses
        in connection with the Settlement Agreement.  If any of
        the Ogden Entities incurs any costs or expenses as a
        result of requests by American or any court or
        administrative action prosecuted or defended by American,
        American will reimburse the Ogden Entity.

    (g) American will indemnify and hold harmless, each of the
        Ogden Entities from any claims, actions, causes of action
        and damages that arise from the Settlement Agreement
        provided that the indemnity will not apply to any Natural
        Resources Damage Claim and be subject to an aggregate cap
        of the sum of:

          * all recoveries; plus

          * the Settlement Amount.

    (h) Each of the Ogden Entities will be protected to the
        fullest extent provided in Section 15-108 of the New York
        General Obligation Law, from and against all claims of
        third parties arising out of matters released or
        indemnified by American pursuant the Settlement Agreement.

    (i) Ogden NY and American will discontinue with prejudice as
        to their claims against each other in the disputes.

The Debtors believe that the Settlement Agreement represents a
fair settlement of outstanding or potential claims that exist
between the Parties and must therefore be approved.  Mr.
DeFilippo points out that the Settlement Agreement is the product
of vigorous arm's-length bargaining over the course of numerous
months.

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


CSFB MORTGAGE: S&P Rating Tumbles to D on Class K-CR
----------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on class K-
CR from Credit Suisse First Boston Mortgage Securities
Corporation's 2001-TFL transaction to 'D'.  Additionally, four
other ratings from the transaction are withdrawn.

The downgrade of class K-CR reflects the fact that the certificate
suffered a principal loss upon payoff. The certificate was wholly
dependent on the Crocker Realty loan -- which paid off in
September 2004 -- for payments of both principal and interest.

Due to various fees and expenses related to the payoff of the
Crocker Realty loan, there was a shortfall in funds to repay the
K-CR class in full.  Several other certificates in the transaction
were paid off in full due to the Crocker Realty loan payoff.  The
ratings on those certificates have been withdrawn.

The Crocker Realty loan, which had a balance of $59.5 million
prior to payoff, was secured by 28 suburban office buildings
spread throughout Florida, Georgia, North Carolina, and Tennessee.
The loan became specially serviced in June 2004 after the borrower
failed to make the loan's balloon payment.

When the loan paid off in full in September 2004, the special
servicer -- Wachovia Securities -- was entitled to a liquidation
fee.  This fee was the major component of the loss on class K-CR,
which equated to roughly 5% of the class's outstanding principal
balance prior to payoff.

                         Rating Lowered

   Credit Suisse First Boston Mortgage Securities Corporation
   Commercial mortgage pass-thru certificates series 2001-TFL1

                                 Rating
                                 ------
                     Class   To         From
                     -----   --         ----
                     K-CR    D          BBB-

                        Ratings Withdrawn

   Credit Suisse First Boston Mortgage Securities Corporation
   Commercial mortgage pass-thru certificates series 2001-TFL1

                                 Rating
                                 ------
                     Class   To         From
                     -----   --         ----
                     C       NR         AAA
                     D       NR         AA+
                     H-CR    NR         BBB+
                     J-CR    NR         BBB


DB COMPANIES: Wants Exclusive Period Stretched to Jan. 28, 2005
---------------------------------------------------------------
DB Companies, Inc., and its debtor-affiliates, ask the U.S.
Bankruptcy Court for the District of Delaware for more time to put
together a liquidating chapter 11 plan.  Specifically, the Debtors
ask Judge Walsh to approve an extension of their exclusive period
to file a plan through Jan. 28, 2005, and ask for an extension of
their exclusive solicitation period through Mar. 29, 2005.

The Debtors need more time to finalize transactions to sell and
dispose of 70-some remaining convenience stores.  The Debtors
think they can wrap up those deals by year-end.  The Company has
already sold 147 stores for more than $70 million.  The Debtors
indicate that unsecured creditors should see a meaningful recovery
on their claims after payment of administrative, secured and
priority claims.

Judge Walsh will convene a hearing on the Debtors' exclusivity
extension requests on Oct. 26, 2004.  Objections, if any, must be
filed and served by Oct. 19.  The Debtors understand that the
Official Committee of Unsecured Creditors appointed in their
chapter 11 cases supports the request.

Headquartered in Pawtucket, Rhode Island, DB Companies, Inc.
-- http://www.dbmarts.com/-- operates and franchises a regional
Chain of DB Mart convenience stores in Connecticut, Massachusetts,
Rhode Island, and the Hudson Valley region of New York. The
Company filed for chapter 11 protection on June 2, 2004 (Bankr.
Del. Case No. 04-11618). William E. Chipman Jr., Esq., at
Greenberg Traurig, LLP, represents the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they estimated assets of over $50 million and
debts of approximately $65 million.


DELTA FUNDING: S&P Rating Tumbles to D on Two Classes
-----------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on two
classes from two series issued by Delta Funding Home Equity Loan
Trust to 'D'.  The rating on class B-3 from series 1997-2 was
lowered from 'BB' and the rating on class B from series 2000-2 was
lowered from 'CCC'.  Concurrently, ratings are affirmed on the
remaining classes from the same securitizations.

The lowered ratings reflect:

   -- For series 1997-2, a realized loss amount of $575,645,
      resulted in a completion depletion of overcollateralization
      and subsequent cumulative principal write-down of $64,237 to
      class B-3;

   -- For series 2000-2, a complete depletion of
      overcollateralization, resulting in a cumulative principal
      write-down of $771,612 to class B;

   -- Realized losses that have exceeded excess interest cash flow
      by an average of 2.25x (series 1997-2) and 3.00x (series
      2000-2) in the most recent six months;

   -- Serious delinquencies (90-plus days, foreclosure, and REO)
      of 22.02% (series 1997-2) and 29.62% (series 2000-2); and

   -- A consistent loss trend that is expected to continue based
      on the current level of serious delinquencies.

Standard & Poor's will continue to closely monitor the performance
of the transactions to ensure that the ratings assigned to the
certificates accurately reflect the risks associated with these
securities.

The affirmations reflect sufficient levels of credit support to
maintain the current ratings, despite the high level of serious
delinquencies.

Regarding performance, and as of the September 2004 distribution,
cumulative realized losses, as a percentage of original pool
balance, is 5.33% ($13,855,606) for series 1997-2 and 4.88%
($13,417,296) for series 2000-2.

Credit support is provided by a combination of:

   -- excess interest,
   -- overcollateralization, and
   -- subordination

In the case of series 2000-2, the senior certificates receive
additional credit support from a bond insurance policy by
Financial Security Assurance Inc. ('AAA' financial strength
rating).

Current credit enhancement for the classes (prior to giving credit
to excess spread) is as follows:

   * Series 1997-2

     -- Classes A-5, A6 and A7: 46.02%
     -- Class M-1: 16.82%
     -- Class M-2: 10.96%

   * Series 2000-2

     -- A1-A and A-6F: 79.37%
     -- M-1: 46.17%
     -- M-2: 23.35%

Each credit enhancement percentage exceeds the original
enhancement percentage even after projected losses except in the
case of class M-2 of series 1997-2 where the project credit
support falls below the original percentage.  (10.50% original vs.
8.05% projected).

The collateral consists of either fixed- or adjustable-rate home
equity first and second lien loans secured by one- to four-family
residential properties.


                         Ratings Lowered

              Delta Funding Home Equity Loan Trust
                    Asset-backed certificates

                                     Rating
                                     ------
                 Series   Class   To        From
                 ------   -----   --        ----
                 1997-2   B-3     D         BB
                 2000-2   B       D         CCC


                        Ratings Affirmed

              Delta Funding Home Equity Loan Trust
                    Asset-backed certificates

               Class                        Rating
               -----                        ------
               1997-2    A-5, A-6, A-7      AAA
               1997-2    M-1                AA
               1997-2    M-2                A
               2000-2    A-1A*, A-6F*       AAA
               2000-2    M-1                AA+
               2000-2    M-2                A

*Denotes bond-insured transaction ratings that reflect the
financial strength of their respective bond insurer.


DRESSER-RAND: S&P Puts 'B+' Rating on Proposed $700 Mil. Facility
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to compressor equipment and services company
Dresser-Rand Company.  Dresser-Rand, a unit of
Ingersoll-Rand Company, is being sold to First Reserve Corporation
in a leveraged buyout transaction.

Standard & Poor's also assigned its 'B+' rating and its recovery
rating of '4' to Dresser-Rand's proposed $700 million senior
secured credit facility.  The 'B+' rating is not higher than the
corporate credit rating and the '4' recovery rating indicates a
mediocre principal recovery expectation in a default scenario.

In addition, Standard & Poor's assigned its 'B-' rating to
Dresser-Rand's proposed $420 million subordinated notes issuance.
All assigned ratings are subject to the receipt and verification
of final bank documentation.  The outlook is stable.

Dresser-Rand, based in Olean, New York, should have $820 million
of total debt pro forma for the proposed credit facility and
subordinated notes offering.

"Dresser-Rand will be a privately held company owned by First
Reserve Corporation, a private equity firm based in Greenwich,
Connecticut, with $4.7 billion under management, primarily in the
energy industry," said Standard & Poor's credit analyst Ben
Tsocanos.  "Dresser-Rand will be the firm's largest single
investment to date," he continued.

Revenue contribution is evenly divided between manufacturing
compressor equipment and providing aftermarket services, while the
aftermarket segment generates substantially all of the operating
profit.  The manufacturing business is only marginally profitable,
but helps maintain the largest installed base of equipment in the
industry.  That base provides a recurring revenue stream for the
more profitable aftermarket segment.

The stable outlook reflects the expectation that Dresser-Rand will
execute on its projected plan and manage its financial position
prudently.  Positive credit momentum is predicated on the ability
to generate expected free cash flow coupled with management's
attentiveness to reducing excessive leverage.  If the company
fails to maintain or improve operating margins, deleveraging will
likely prove difficult and ratings would be pressured.


DUPONT PHOTOMASKS: Toppan Pact Spurs S&P's B+ Corp. Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B+' corporate
credit rating and 'B-' subordinated debt rating on DuPont
Photomasks Inc. on CreditWatch with positive implications,
following the company's announcement that it has entered a
definitive agreement to be acquired by Toppan Printing Company
Limited (A+/Stable/--).

"The transaction has been approved by the boards of both
companies, and E.I. du Pont de Nemours and Company, which owns
about 20% of DPI's shares, has agreed to vote its shares in favor
of the transaction.  The transaction is subject to regulatory
approval and the approval of DPI's shareholders, and is expected
to close in early 2005," said Standard & Poor's credit analyst
Bruce Hyman.

Following the completion of the transaction, DPI will become a
wholly owned subsidiary of Toppan Printing.  DPI's operating
headquarters will remain in Round Rock, Texas.  Tokyo, Japan-based
Toppan, a major Japanese printing company, also is a major
supplier of photomasks for the semiconductor industry.  The
combined company is expected to become the industry's largest
photomask supplier.

The CreditWatch listing will be resolved when the transaction
closes.


ENRON: Judge Gonzalez Okays Claim Settlement with Baupost Group
---------------------------------------------------------------
Prior to the Petition Date, five PG&E Entities:

    -- PG&E Energy Trading-Gas Corp.,
    -- PG&E Energy Trading-Canada Corp.,
    -- PG&E Energy Trading-Power LP,
    -- CEG Energy Options, Inc., and
    -- PG&E National Energy Group, Inc.,

entered into various contracts with Enron Canada Corp., and
Debtors Enron Corp., Enron North America Corp., Enron Power
Marketing, Inc., Enron Energy Services, Inc., Enron Coal Services
Limited and Enron Energy Marketing Corp.

The Baupost Group:

    -- Baupost Limited Partnership 1983 A-1,
    -- Baupost Limited Partnership 1983 B-1,
    -- Baupost Limited Partnership 1983 C-1,
    -- HB Institutional Limited Partnership,
    -- PB Institutional Limited Partnership,
    -- YB Institutional Limited Partnership,
    -- Baupost Value Partners, LP-I,
    -- Baupost Value Partners, LP-II,
    -- Baupost Value Partners, LP-III, and
    -- The Baupost Group, LLC,

acquired certain claims against Enron Canada and the Debtors from
the PG&E Entities arising from the PG&E Agreements.

On October 11, 2002, The Baupost Group filed three claims
amending a previously filed claim:

    Claim No.             Debtor               Claim Amount
    ---------             ------               ------------
      10919               EPMI                 $102,426,266
      12392               ENA                    94,248,987
      12811               Enron                 150,000,000

The Baupost Group also submitted a demand for payment to Enron
Canada for $4,345,258.  Together with the Demand, the Claims
aggregate $351,020,511.

The Debtors and Enron Canada disputed the amount of the Claims.

To avoid the further risk and expense of litigation, the Debtors,
Enron Canada and The Baupost Group agree to resolve their claim
disputes through a stipulation.

Specifically, the Parties stipulate and agree that:

A. The Baupost Group will have allowed general unsecured claims
   against the Debtors and an acknowledged claim against Enron
   Canada:

                           Amount Allowed
    Claim No.   Obligor   or Acknowledged             Treatment
    ---------   -------   ---------------            ----------
      10919      EPMI         $75,253,979    Unsecured, Class 6

      13392      ENA           69,246,021    Unsecured, Class 5

      12811      Enron        126,387,500             Class 185

       N/A       Enron Canada     150,000

B. The Baupost Group waives and withdraws all claims that were
   scheduled in the PG&E Entities' favor in the Debtors'
   Schedules of Assets and Liabilities.

C. In full satisfaction of the amount asserted by the Demand, but
   not in reduction of the agreed amount of the claims against
   the Debtors, Enron Canada will pay $150,000 -- the Canadian
   Termination Payment -- to The Baupost Group.

D. Enron Canada will not claim any input tax credits with respect
   to the Canadian Termination Payment.  Enron Canada will notify
   The Baupost Group should it receive any inquiries from the
   Canadian Revenue Authority regarding the treatment of the
   Canadian Termination Payment under the Canadian Goods and
   Service Tax under Section 182 or other provisions of the
   Excise Tax Act of Canada.

E. The Baupost Group and the Enron Parties will discharge each
   other from all claims, obligations, demands, actions, causes
   of action and liabilities arising from:

       * that certain Master Netting, Setoff and Security
         Agreement dated February 2, 2001, as amended, between
         Enron Canada, ENA, EPMI, EES, Enron Coal, EEM and Houston
         Pipe Line Company, and the Five PG&E Entities and PG&E
         Energy Trading Holdings Corporation, as guarantor, and
         any and all contracts between the parties;

       * all PG&E Agreements including prior transactions between
         the parties;

       * that certain Guarantee Agreement dated February 2, 2001,
         issued by Enron in favor of the PG&E Entities; and

       * the Claims, except for claims arising under the
         Stipulation.

F. With prejudice, The Baupost Group will discontinue all legal
   proceedings that they commenced directly or as the assignee of
   the PG&E Entities' claims against Enron Canada.

                          *     *     *

Judge Gonzalez approves the Stipulation.

Headquartered in Houston, Texas, Enron Corporation is in the midst
of restructuring various businesses for distribution as ongoing
companies to its creditors and liquidating its remaining
operations.  Before the company agreed to be acquired, controversy
over accounting procedures had caused Enron's stock price and
credit rating to drop sharply.  The Company filed for chapter 11
protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-
16033).  Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed.
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts.  (Enron Bankruptcy News, Issue No. 126;
Bankruptcy Creditors' Service, Inc., 15/945-7000)


ENTERPRISE PRODUCTS: Gets $915MM From Gulfterra Tender Closing
--------------------------------------------------------------
Enterprise Products Partners L.P. (NYSE:EPD) announced the
expiration, as of 5:00 p.m. New York City time on Oct. 4, 2004, of
all the cash tender offers made by its operating subsidiary,
Enterprise Products Operating L.P. for any and all of the
outstanding senior subordinated and senior notes of GulfTerra
Energy Partners, L.P. and GulfTerra Energy Finance Corporation
totaling approximately $921.5 million.

Enterprise accepted for payment all senior notes validly tendered
and not validly withdrawn. As of the expiration time of the
offers, Enterprise had received tenders of senior subordinated and
senior notes aggregating $915.1 million, or 99.3% of the notes
outstanding. The following table shows the four GulfTerra senior
debt obligations affected, including the principal amount of each
series of notes tendered, as well as the payment amounts made by
Enterprise to complete the tender offers. Enterprise retired these
purchased notes.

($millions)                       Cash payments made by Enterprise
                                  --------------------------------
                        Principal
                        Amount     Accrued     Tender     Total
Description             Tendered   Interest    Price(a)   Price
-----------             --------  ----------- --------- ---------
8.50% Sr. Sub.
Notes due 2010            $212.1         $6.2    $246.4    $252.6
(Represents 98.2% of
principal amount
outstanding)

10.625% Sr. Sub.
Notes due 2012             133.9          4.9     167.6     172.5
(Represents 99.9% of
principal amount
outstanding)

8.50% Sr. Sub.
Notes due 2011             319.8          9.4     359.4     368.8
(Represents 99.5% of
principal amount
outstanding)

6.25% Sr. Notes
due 2010
(Represents 99.7% of
principal amount
outstanding)              249.3          5.4     274.1     279.4
                       --------- ------------ --------- ---------
  Totals                  $915.1        $25.9  $1,047.4  $1,073.3
                       ========= ============ ========= =========

   (a) Tender price includes consent payment of $30 per $1,000
       principal amount.

Lehman Brothers served as the Lead Dealer Manager for the Tender
Offer and the Lead Solicitation Agent for the Consent
Solicitation. J.P. Morgan and Wachovia Securities served as the
Co-Dealer Managers and Co-Solicitation agents, and D. F. King &
Co., Inc. was the Tender Agent and Information Agent for the
Tender Offer and Consent Solicitation.

Enterprise Products Partners L.P. is the second largest publicly
traded energy partnership with an enterprise value of
approximately $14.0 billion, and is a leading North American
provider of midstream energy services to producers and consumers
of natural gas, NGLs and crude oil. Enterprise transports natural
gas, NGLs and crude oil through 31,000 miles of onshore and
offshore pipelines and is an industry leader in the development of
midstream infrastructure in the Deepwater Trend of the Gulf of
Mexico. Services include natural gas transportation, gathering,
processing and storage; NGL fractionation (or separation),
transportation, storage, and import and export terminaling; crude
oil transportation and offshore production platform services. For
more information, visit Enterprise on the Web at
http://www.epplp.com/

                          *     *     *

As reported in the Troubled Company Reporter on Sept. 24, 2004,
Standard & Poor's Rating Services affirmed its 'BB+' corporate
credit rating on Enterprise Products Partners L.P.

At the same time, Standard & Poor's assigned its 'BB+' senior
unsecured rating to Enterprise Products' subsidiary Enterprise
Products Operating L.P.'s proposed (in aggregate) $2.0 billion
note issues. The notes will be issued in four tranches, due 2007,
2009, 2014 and 2034.

The outlook is stable. As of June 30, 2004, the Houston, Texas-
based company had about $4.2 billion of debt outstanding, pro
forma for the proposed and other recent financings.

Proceeds from the issuances will be used to permanently finance
acquisition-related bank debt related to Enterprise Products'
pending merger with GulfTerra Energy Partners L.P. The
$6.1 billion merger (total consideration, including GulfTerra's
debt) is expected to close on or near Sept. 30, 2004.

The rating on Enterprise Products reflects its integrated energy
midstream operations, which benefit from a considerable amount of
fee-based revenue from pipeline operations, favorable asset
positioning, and a long-standing strategic alliance with Shell Oil
Co.

Offsetting these positive attributes are the high cash flow
volatility the partnership faces stemming from its sizeable
natural gas processing and fractionation operations. Enterprise
Products does not issue debt but does guarantee the debt of
Enterprise Products Operating, therefore Enterprise Products
carries the same rating as Enterprise Products Operating.

"The stable outlook reflects the expectation that Enterprise
Products will not engage in significant merger and acquisition
activity until it has sufficiently integrated the operations of
GulfTerra, should its merger proceed as expected," said Standard &
Poor's credit analyst John Thieroff.

"In the longer term, an upgrade to investment grade will depend on
successful integration, a demonstrated reduction in earnings
volatility, and continued deleveraging," continued Mr. Thieroff.


FHC HEALTH: S&P Junks $100 Million Subordinated Debt Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC+' senior
subordinated debt rating to FHC Health Systems Inc.'s planned six-
year, $100 million term loan (third lien) arrangement, which is
contractually subordinated to the pre-existing credit facility
components.

Standard & Poor's also said that it affirmed its 'B' counterparty
credit rating on FHC and its 'B' senior secured debt rating on the
company's pre-existing senior secured credit facility, which
consists of a $25 million revolver -- first lien -- and a $221,000
term loan  -- second lien.

The outlook on FHC is stable.

The proceeds of the loan are expected to be used to redeem all
preferred equity shares and for general working-capital purposes.
In addition, the amended facility agreement is expected to raise
the revolver facility to $35 million from $25 million.

"The ratings reflect the company's highly leveraged capital
structure, limited financial flexibility, and client
concentration-risk," said Standard & Poor's credit analyst Joseph
Marinucci.  "Partially offsetting these negative factors are FHC's
established business presence and relatively stable profitability
and cash-flow metrics."

FHC is a behavioral healthcare company that offers behavioral
health insurance and behavioral health provider services through
two primary subsidiaries:  ValueOptions and Alternative Behavioral
Services.  FHC is currently positioned as the second-largest
provider of managed behavioral health services in the U.S.
However, FHC has material account concentrations in the public
sector, where less than five contracts with varying renewal dates
are expected to account for about 50% of FHC's total revenue in
2004 ($1.3 billion). Standard & Poor's believes the loss of one
or more of these contracts could have a material adverse effect on
the company's operating results in 2005 and 2006.

Standard & Poor's believes FHC's overall cost of capital will be
decreased upon completion of the deal.  Nonetheless, Standard &
Poor's will continue to view FHC's balance sheet as weak, as the
capital structure will essentially consist of intermediate debt,
and goodwill is expected to be the largest balance sheet asset for
the years-ended 2004 and 2005.  Key issues to be evaluated by
Standard & Poor's over the next 12-18 months include FHC's ability
to retain and grow its existing account base, better diversify its
revenue stream, and enhance the stability of its earnings and cash
flow.


FIBERMARK, INC.: Committee Members Want to Trade Debtor's Shares
----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in
FiberMark Inc.'s chapter 11 cases want the U.S. Bankruptcy Court
for the District of Vermont to approve a protocol that will allow
Committee members who are in the business of trading securities to
trade the Debtor's equity securities while serving on the
Committee without violating their fiduciary duties.

AIG Global Investment Corp., Solution Dispersions Inc., Post
Advisory Group LLC. and Wilmington Trust Co., as indenture
trustee, are the Committee members who don't want their firms
restricted from trading in the Debtor's securities while a
representative serves on the Creditors' Committee.  It is unfair,
the Committee argues, to force sophisticated institutions to
choose between serving on an Official Committee in a bankruptcy
case and risking the loss of a beneficial investment opportunity.
The Committee notes that large institutions have fiduciary duties
to maximize returns for their clients too.

The Four Institutions assure the Court that they will establish
appropriate screening walls and information blocking devices to
make sure no non-public information in the hands of a committee
representative makes its way to a trader.

The Honorable Colleen A. Brown will convene a hearing to review
the Committee's request on Oct. 19, 2004.  Objections, if any,
must be filed and served by Oct. 11, 2004.

Fred S. Hodara, Esq., Kerry E. Berchem, Esq., and Jonathan L.
Gold, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the
Committee.  Skip Victor at Chanin Capital Partners LLC serves as
the Committee's financial advisor and investment banker.

Headquartered in Brattleboro, Vermont, FiberMark, Inc.
-- http://www.fibermark.com/-- produces filter media for
transportation applications and vacuum cleaning; cover stocks and
cover materials for books, graphic design, and office supplies and
base materials for specialty tapes, wallcoverings and sandpaper.
The Company filed for chapter 11 protection on March 30, 2004
(Bankr. D. Vt. Case No. 04-10463). Adam S. Ravin, Esq., D.J.
Baker, Esq., David M. Turetsky, Esq., and Rosalie Walker Gray,
Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the
Debtors in their restructuring efforts. When the Debtors filed for
protection from its creditors, they listed $329,600,000 in
total assets and $405,700,000 in total debts.


GADZOOKS, INC.: Wants Plan-Filing Period Extended to Oct. 31
------------------------------------------------------------
Gadzooks, Inc., asks the U.S. Bankruptcy Court for the Northern
District of Texas, Dallas Division, to extend its exclusive
period during which to file a plan of reorganization through
Oct. 31, 2004.  The retailer asks the Court for a concomitant
extension of its exclusive period to solicit acceptances of that
plan from creditors through Jan. 31, 2004.    Gadzooks tells the
Court that it is negotiating with the Official Committee of
Unsecured Creditors and Official Committee of Equity Holders and
hopes to file a consensual plan later this month.

Gadzooks relates that Financo Inc., the company's financial
advisor, has obtained enough capital commitments to fund a chapter
11 plan.  But more cash would help.  Gadzooks indicates in papers
filed with the Bankruptcy Court that it may sell its assets.

Headquartered in Carrollton, Texas, Gadzooks, Inc.
-- http://www.gadzooks.com/-- is a mall-based specialty retailer
providing casual apparel and related accessories for youngsters,
between the ages of 14 and 18. The Company filed for chapter 11
protection on February 3, 2004 (Bankr. N.D. Tex. Case No. 04-
31486). Charles R. Gibbs, Esq., and Keith Miles Aurzada, Esq., at
Akin Gump Strauss Hauer & Feld, LLP represent the Debtor in its
restructuring efforts. When the Company filed for protection from
its creditors, it listed $84,570,641 in total assets and
$42,519,551 in total debts.


GALEY & LORD: Oct. 21 Auction Will Test Patriarch's $188 Mil. Bid
-----------------------------------------------------------------
The Honorable Mary Diehl of the U.S. Bankruptcy Court for the
Northern District of Georgia put her stamp of approval on uniform
bidding procedures governing the sale of substantially all of
Galey & Lord Inc.'s assets.

Patriarch Partners LLC has offered $188 million to buy the
debtor's assets.  Competing bidders, if any, need to step forward
by Oct. 14, and offer at least $5 million more for the company's
assets.  In the event Patriarch's bid is topped by a competing
bidder, Galey & Lord will pay Partiarch a $4.2 million break-up
fee.  If an auction is necessary, it'll be held on Oct. 21.
Objections to the sale transaction must be filed and served by
Oct. 19.  Judge Diehl will convene a sale hearing on Oct. 26.

Headquartered in Atlanta, Georgia, Galey & Lord, Inc., a leading
global manufacturer of textiles for sportswear, including denim,
cotton casuals and corduroy, and its debtor-affiliates filed for
chapter 11 protection on August 19, 2004 (Bankr. N.D. Ga. Case No.
04-43098). Jason H. Watson, Esq., and John C. Weitnauer, Esq., at
Alston & Bird LLP, and Joel H. Levitin, Esq., at Dechert LLP,
represent the Debtor in its restructuring efforts. When the Debtor
filed for protection from its creditors, it listed $533,576,000 in
total assets and $438,035,000 in total debts.


GENERAL MEDIA: Care Concepts Completes 40% Stock Purchase
---------------------------------------------------------
Care Concepts (AMEX:IBD) has completed the purchase from GMI
Investment Partners and PET Capital Partners, LLC, and its
affiliates of approximately 40% of the non-voting common stock of
the General Media, Inc. The transaction is subject only to
emergence of General Media and subsidiaries from Chapter 11
bankruptcy. The Fourth Joint Amended and Restated Plan of
Reorganization sponsored by the Bell/Staton Group has been
confirmed by the United States Bankruptcy Court, and it is
anticipated that the reorganized General Media group will emerge
from bankruptcy next week.

Under the terms of its purchase agreement, the Bell/Staton Group,
will own voting common stock, and will own a majority of the total
common stock equity of the reorganized General Media.  Messrs.
Marc H. Bell and Daniel C. Staton will manage and assume day to
day operations of Penthouse Magazine and the related General Media
businesses. General Media will be renamed Penthouse Media Group,
Inc., and Penthouse International, Inc., will change its name to
an unrelated name. The Company, as a shareholder of Penthouse
Media Group, will have the right to designate one member of the
board of directors of the reorganized Penthouse Media Group.

The Company financed the acquisition and is in the process of
raising additional working capital by the issuance of notes and
preferred stock:

   -- up to $15.0 million of 10% convertible notes, of which
      approximately $9.5 million has been raised to date, which
      shall bear interest only, payable either 100% in cash, or at
      the option of the Company, 50% in cash and the balance in
      shares of Company Common Stock. The principal, together with
      all accrued any unpaid interest, shall be due on Sep. 15,
      2009. In addition, the holders of the 10% Notes will receive
      warrants to purchase one share of Company Common Stock for
      each $3.00 of loan at an exercise price of $3.00 per share;

   -- $3.5 million in shares of Series E Preferred Stock which
      shall pay an annual dividend of 6%. In addition, the Company
      issued warrants to purchase 430,504 additional shares of
      Common Stock at the Series E Conversion Price;

   -- $3.4 million in shares of Series F Senior Preferred Stock
      which shall pay an annual dividend of 10%, payable either
      100% in cash, or at the option of the Company, 50% in cash
      and the balance in shares of Company Common Stock, and
      unless previously converted into Common Stock shall be
      redeemable at the option of the holders on Sept. 15, 2009.
      In addition, warrants to purchase an additional 386,194
      shares of Common Stock at an exercise price of $3.00 per
      share were issued to the holders of the Series F Preferred
      Stock; and

   -- shares of Series G Preferred Stock which is convertible on
      the earlier of December 31, 2004 or obtaining Stockholder
      and AMEX approval, into 68 million shares, less the number
      of shares issuable upon conversion of the 10% Notes, Series
      E Preferred Stock or Series F Preferred Stock. The Series G
      Preferred Stock was issued in consideration of the:

        (1) assignment to the Company of the right to purchase the
            General Media stock,

        (2) having provided financing and financial accommodations
            that facilitated the acquisition of the General Media
            stock and the proposed iBill acquisition,

        (3) having provided personal guarantees and ongoing
            indemnification to PII in connection with certain
            contingent liabilities, and

        (4) having and continuing to provide management and
            consulting services to the Company.

   As further consideration of the Series G Preferred Stock, Dr.
   Molina agreed to the release of certain damage claims against
   the Bell/Staton Group in the amount of approximately
   $100 million.

Upon the earlier of Dec. 31, 2004 or the Company obtaining
Stockholder and AMEX approval, the Notes, the Series E and the
Series F Preferred Stock shall be convertible, at any time, at the
option of the holders at a price per share that shall be equal to
50% of the average closing price of the Company's Common Stock for
the five trading days immediately prior to the date that notice of
conversion is given to the Company by the Purchaser, subject to a
Note Conversion Price floor of $3.00 per share; provided, that at
the time of conversion, if the Company's Common Stock does not
trade at $3.00 per share, the holders of the Notes and Preferred
Stock shall be entitled to receive the benefit of the issuance of
certain "Adjustment Shares" to be provided by certain stockholders
of the Company.

Securities offered will not be or have not been registered under
the Securities Act of 1933 and may not be offered or sold in the
United States absent registration or an applicable exemption from
registration requirements.

                   About Care Concepts I, Inc.

Care Concepts I, Inc. (AMEX:IBD) is a media and marketing holding
company with assets including: Forster Sports, Inc., a sports-
oriented, multi-media company that produces sports radio talk
shows; and iBidUSA.com, a popular website which showcases products
and services in an auction format starting with an opening bid of
about 30% percent of the retail value.

For the three months ended June 30, 2004, Care Concepts reported
an $833,016 net loss compared to a $900,257 net loss in June 2003.

                     Auditors Express Doubt

On January 15, 2003, Care Concepts dismissed Angell & Deering as
is principal accountants and auditors. A&D's report on the
Company's financial statements expressed substantial doubt about
the Company's ability to continue as a going concern. On
January 15, 2003, William J. Hadaway was hired to review the
Company's 2002 financial statements. On October 30, 2003, Care
Concepts dismissed WJH. WJH shared A&D's doubts. Effective
October 30, 2003, the Company engaged the accounting firm of
Jewett, Schwartz & Associates as its new independent accountants
to audit the financial statements for the fiscal year ending
December 31, 2003.

                       About General Media

General Media, a subsidiary of Penthouse International, Inc.,
publishes Penthouse magazine and other publications and is engaged
in other diversified media and entertainment businesses. The
Company filed for reorganization under Chapter 11 with the U.S.
Bankruptcy Court for the Southern District of New York on
August 12, 2003. Robert Joel Feinstein, Esq. Pachulski, Stang,
Ziehl, Young, Jones & Weintraub P.C. represent the Debtors in
their restructuring efforts. When the Company filed for
protection from their creditors, they listed $50 million to
$100 million in total assets and more than $50 million in total
debts.


GITTO GLOBAL: Wants to Hire Hanify & King as Bankruptcy Counsel
---------------------------------------------------------------
Gitto Global Corporation asks the U.S. Bankruptcy Court for the
District of Massachusetts for permission to employ Hanify & King,
Professional Corporation, as its bankruptcy counsel.

Hanify & King is expected to:

    a) advise the Debtor with respect to its rights, powers and
       duties as debtor-in-possession in the continued conduct of
       its chapter 11 proceeding and the management and
       liquidation of its assets;

    b) advise the Debtor with respect to the development of a plan
       of reorganization and other matters relevant to the
       formulation and negotiation of a plan of reorganization in
       the Debtor's bankruptcy case;

    c) represent the Debtor at all hearings and matters pertaining
       to its affairs as debtor-in-possession;

    d) prepare on the Debtor's behalf all necessary and
       appropriate applications, motions, answers, orders,
       reports, pleadings, and other documents, and review all
       financial reports filed in the Debtor's chapter 11 case;

    e) review and analyze the nature and validity of any liens
       asserted against the Debtor's property and advise the
       Debtor concerning the enforceability of those lien;

    f) advise the Debtor regarding its ability to initiate actions
       to collect and recover property for the benefit of its
       estate;

    g) advise and assist the Debtor in connection with any
       potential property dispositions;

    h) advise the Debtor concerning executory contract and
       unexpired lease assumptions, assignments and rejections and
       lease restructurings and re-characterizations;

    i) review and analyze various claims of the Debtor's creditors
       and the treatment of those claims and the preparation,
       filing or prosecution of any objections to those claims;

    j) commence and conduct all litigations necessary or
       appropriate to assert rights held by the Debtor;

    k) protect assets of the Debtor's Chapter 11 estate or further
       the goal of completing the Debtor's successful
       reorganization and with respect to matters to which the
       Debtor retains special counsel; and

    l) perform all other necessary legal advice and services as
       may be required by the Debtor.

Andrew G. Lizote, Esq., is the lead attorney handling Gitto
Global's restructuring.

Mr. Lizote discloses that Hanify & King billed the Debtor $125,000
for services prior to the bankruptcy filing, and the Firm was paid
$26,063 for prepetition services, leaving an unapplied $98,937
retainer balance.  The Debtor asks the Court to allow Hanify &
King to apply any retainer balance to the final compensation and
expense reimbursements it will bill the Debtor.

The Debtor will pay Hanify & King's applicable hourly rates for
legal services.  The Firm doesn't disclose those hourly rates in
the papers filed with the Bankruptcy Court.

Hanify & King does not have any interest adverse to the Debtor or
its estate.

Headquartered in Lunenburg, Massachusetts, Gitto Global
Corporation -- http://www.gitto-global.com/-- manufactures
polyvinyl chloride, polyethylene, polypropylene and thermoplastic
olefinic compounds.  The Company filed for chapter 11 protection
on September 24, 2004 (Bankr. D. Mass. Case No. 04-45386).  When
the Debtor filed for protection from its creditors, it estimated
more than $10 million in assets and more than $50 million in
debts.


GOPHER STATE: U.S. Trustee Picks 3-Member Creditors Committee
-------------------------------------------------------------
The United States Trustee for Region 12 appointed three creditors
to serve on an Official Committee of Unsecured Creditors in Gopher
State Ethanol, LLC's chapter 11 case:

      1. Grain Commerce
         Attn: Greg Mikkelson
         21575 515th Avenue
         Lake Crystal, Minnesota
         Phone: 507-947-3119

      2. Lovergreen Industrial Services
         Attn: Gerald F. Johnson
         2280 Sibley Court
         Eagan, Minnesota 55122
         Phone: 651-890-1166

      3. Xeel Energy
         Attn: Lee Gabler
         3115 Centerpoint Drive
         Roseville, Minnesota 55113
         Phone: 651-639-4642

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 St. Paul, Minnesota, Gopher State Ethanol, LLC,
manufactures ethanol.  The Company filed for chapter 11 protection
on August 11, 2004 (Bankr. D. Minn. Case No. 04-34706).  When the
Debtor filed for protection from its creditors, it listed
$12,019,824 in total assets and $36,759,602 in total debts.


GULFTERRA ENERGY: Moody's Withdraws Ba2 Sr. Implied Debt Ratings
----------------------------------------------------------------
Moody's Investors Service has withdrawn all of GulfTerra Energy
Partners, L.P.'s (GulfTerra) outstanding debt ratings (Ba2 senior
implied) following the tender and subsequent retirement of
substantially all of its debt.  The tender for GulfTerra's debt by
Enterprise Products Operating L.P. was done to achieve consents
from noteholders to amend the indentures to eliminate certain
covenants and default provisions to facilitate the closing of its
merger with Enterprise Products Partners L.P. (Enterprise) on
September 30, 2004.

GulfTerra and its general partner are now subsidiaries of
Enterprise's operating partnership Enterprise Products Operating
L.P. Based on the amount of notes tendered and retired, GulfTerra
will no longer be a separately filing entity, and the ratings have
been withdrawn.

Headquartered in Houston, Texas, GulfTerra Energy Partners, L.P.,
is an indirect wholly-owned subsidiary of Enterprise Products
Partners L.P., a midstream energy master limited partnership.


HOLLINGER INTL: Audit Committee Finds Overstated Financials
-----------------------------------------------------------
Hollinger International Inc. (NYSE: HLR) released the findings of
a previously disclosed internal review conducted by the Audit
Committee of the Board of Directors into practices that resulted
in the overstatement of circulation figures at The Chicago Sun-
Times over the past several years under prior leadership of that
publication.  In addition, the Audit Committee conducted a
Company-wide review and found that certain circulation inflation
practices were also employed at two other Chicago area newspapers,
The Daily Southtown and The Star, as well as at The Jerusalem
Post.

The Audit Committee was assisted in this review by the Chicago law
firm of Gardner Carton & Douglas LLP, as well as the Company's
General Counsel and the Forensic Services practice of Deloitte &
Touche LLP.

The Company said that, as a result of the findings of the Audit
Committee, it has recorded a pre-tax charge of $27 million to
cover the estimated cost of resolving advertiser claims related to
the reduced circulation.  Senior management at the Company's
Chicago Group has developed a program to compensate advertisers of
The Chicago Sun-Times, which will be implemented immediately.

The Company said the Audit Committee review determined that for
the Audit Bureau of Circulations reports commencing in 1998,
single-copy circulation figures for The Chicago Sun-Times' weekday
and Sunday editions were improperly overstated.  There was no
inflation of circulation figures for the Saturday edition.  The
inflated circulation data was submitted to ABC, which then
reported these figures in its annual audit reports issued with
respect to The Chicago Sun-Times.

Inflation of The Chicago Sun-Times single-copy circulation began
modestly and increased over time.  The average inflation that
occurred in the twelve-month period ending March 1997 (and
reported by ABC in April 1998) was 2,814 copies per day during the
week, and 672 copies on Sundays.  In the most recent report of The
Chicago Sun-Times circulation published by ABC (for the period
ending March 2003), the average single-copy inflation had grown to
50,191 weekday copies and 17,318 Sunday copies.  The inflation of
circulation continued and grew during the most recent twelve-month
period ending March 28, 2004, but these circulation figures were
never included in an ABC audit report.

The Audit Committee's review has determined that the circulation
inflation practices at The Chicago Sun-Times were instigated and
implemented by the newspaper's former management.  The officers
who were responsible for these practices are no longer employed by
the Company.  The Company has also taken disciplinary action
against certain other employees and implemented procedures to help
ensure that similar circulation overstatements do not occur in the
future.

Gordon A. Paris, Interim Chairman and Chief Executive Officer,
said, "This review, as well as other actions that we have taken in
recent months, demonstrate Hollinger International's commitment to
the highest standards for integrity and openness in everything we
do.  We intend to ensure that all of Hollinger International's
publications, led by The Chicago Sun-Times, establish and maintain
best practices in accuracy and transparency in circulation figure
reporting."

The internal review has concluded that circulation at The Chicago
Sun-Times was inflated primarily using three different methods,
all of which have been terminated by current management.  Two of
these methods were directed at suppressing or manipulating the
number of newspapers that were counted each day as unsold returns,
since circulation is calculated by subtracting the number of
newspapers returned each day from the number of newspapers
printed.  The third method involved the use of recycling proceeds
to purchase newspapers through a charitable program that
distributes newspapers to local schools.

The three circulation inflation methods operated are:

   -- ABC rules permit newspaper publishers to eliminate
      circulation statistics on certain days from figures reported
      to ABC, if certain criteria are met.  These days are
      commonly referred to as "elimination days."  The Chicago
      Sun-Times shifted returns, rather than recording them on the
      days that newspapers were actually returned.  Internal
      records were also altered in order to make it appear that
      certain days qualified as elimination days when they
      otherwise did not qualify.

      The term "shifting returns" is the practice of accounting
      for a number of returned newspapers on elimination days or
      on days that otherwise may not be as important to
      advertisers, rather than on days they are actually returned.
      Shifting returns is believed to be a common practice in
      competitive newspaper markets, although it is not
      permissible under ABC rules.

   -- The Chicago Sun-Times would compensate newspaper
      distributors for not returning unsold papers.  The Chicago
      Sun-Times personnel would advise distributors not to return
      some or all of their unsold newspapers at the end of a given
      day.  Credits would then be processed internally to
      reimburse the distributors for their cost and to compensate
      them for these unsold papers.

   -- The Chicago Sun-Times would direct recycling proceeds due to
      The Chicago Sun-Times to be deposited into a charitable
      trust that was established for the purpose of purchasing and
      distributing newspapers in local schools.  This practice had
      the effect of having The Chicago Sun-Times purchase its own
      newspapers.

John Cruickshank, Publisher of The Chicago Sun-Times and Chief
Operating Officer of Hollinger International's Chicago Group,
said, "With the publication of the results of this very thorough
review, we have created the circumstances to point the paper, and
our whole organization, towards the future.  The unacceptable
practices we uncovered and discontinued betrayed the trust placed
in us by advertisers and wasted valuable resources that could have
been invested in our journalism and customer service,
merchandising and marketing.  However, we are pleased that over
the past several months, since ending these practices, we have
been able to make significant improvements at our paper."

"Right now, we are intently focused on implementing a program for
compensating our advertisers that is designed to be fair and
appropriate from their perspective.  I look forward to continuing
to provide our readers and advertisers with the highest possible
quality newspapers," concluded Mr. Cruickshank.

The Chicago Sun-Times intends to make restitution to all of its
advertisers for losses associated with the overstatements in the
ABC circulation figures.  The Chicago Sun-Times has been engaged
in an ongoing dialogue with its key advertisers and will be
presenting restitution and other incentive programs tailored to
individual advertiser needs.

The Company said that since it first discovered and reported this
matter to ABC it has kept ABC informed and updated on the review
process, and has worked constructively with that organization.

The review by the Audit Committee also determined that certain
circulation inflation practices were employed at the Company's The
Daily Southtown, The Star and The Jerusalem Post newspapers.  At
The Daily Southtown, records were manipulated in order to increase
the reported number of newspapers that were actually printed.  At
both The Daily Southtown and The Star, recycling proceeds were
used to purchase newspapers in a manner similar to the practice
employed at The Chicago Sun-Times.  Since the inflation practices
at The Daily Southtown and The Star began in mid-2003, none of the
inflated circulation figures have been published in ABC
circulation audit reports.  At The Jerusalem Post, representatives
of the newspaper's advertising and marketing areas misrepresented
the circulation figures to advertisers.  There is no independent
third-party such as ABC that audits or reports circulation figures
for Israeli newspapers.  These practices have been discontinued at
these papers, and it is expected that the impact of the
overstatement practices at these three newspapers will not have a
material impact on the Company.

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

                          *     *     *

As reported in the Troubled Company Reporter on September 1, 2004,
Hollinger International, Inc.'s 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.

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.

As reported in the Troubled Company Reporter on August 6, Moody's
Investors Service changed the rating outlook on Hollinger
International Publishing, Inc., to positive from stable and has
withdrawn other ratings.  Details of this rating action are:

Ratings withdrawn:

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

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

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

Ratings confirmed:

   * Senior Implied rating -- Ba3
   * Issuer rating -- B2

The outlook is changed to positive.

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


HUGHES SUPPLY: Moody's Puts Ba1 Rating on $300M Sr. Unsec. Notes
----------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to Hughes Supply,
Inc.'s  $300 million guaranteed senior unsecured notes, due 2014.
At the same time, Moody's assigned a Ba2 senior unsecured issuer
rating, a Ba1 senior implied rating, and a SGL-1 rating to the
company.  The ratings outlook is stable.

Hughes' ratings are based on its:

     (i) comparatively high operating leverage and
         significant financial leverage,

    (ii) the challenges associated with its continuing efforts
         to transform its business model for enhanced
         profitability, and

   (iii) the risks associated with its acquisition strategy.

The ratings are supported by Hughes' leading position in its:

     (i) domestic distribution market,

    (ii) emphasis on areas expected to exceed national averages
         for population growth,

   (iii) diversification of end-use markets and customer base,
         and

    (iv) experienced management team.

This is the first time that Moody's has rated the debt of Hughes,
a distributor of construction, maintenance and repair-related
products.

Ratings assigned:

   -- Guaranteed senior unsecured notes, due 2014, rated Ba1
   -- Senior unsecured issuer rating, Ba2
   -- Senior implied rating, Ba1
   -- Speculative Grade Liquidity rating, SGL-1

Outlook stable.

Moody's does not rate Hughes' $150 million commercial paper
program, $500 million revolving credit facility backing the
program, or privately placed senior unsecured notes.

Hughes' ratings reflect:

   (a) he high operating leverage of its distribution business
       model (low margin, high fixed costs, asset intensity),

   (b) relatively high debt,

   (c) moderately high rental expense, and

   (d) risks associated with its acquisition strategy.

Hughes' elevated operating leverage results from unusually low
inventory turnover of less than 6.0 times a year and fairly high
DSO at about 54 days, the result is a sizable working capital to
sales ratio of 21% at July 30, 2004 (defined as,
receivables+inventory-payables / trailing four quarter sales).
Combining this significant operating leverage with the cyclicality
of its main end-use markets and highly competitive industry
dynamics, warrants a more conservative use of financial leverage
in Hughes capital structure than similarly rated companies.
Additionally, Hughes is now attempting to transition its business
into a less cyclical, higher-margin enterprise through both
organic growth and acquisition activity.  In Moody's opinion, the
potential for incremental financial leverage from acquisition
funding, the risks inherent to acquisition activity, and Hughes'
thin profit margins that limit its ability to absorb strategic
mis-steps, result in an elevation of the company's risk profile
and are appropriate to its Ba1 ratings.

Hughes' ratings are supported by:

   * its large scale of operations,
   * concentration in regions where growth is expected to exceed
     national averages,
   * significant bargaining power with suppliers,
   * breadth of product offerings,
   * multiple end-use markets,
   * diversification of its customer base (its 10 largest
     customers generated less than 5% of sales), and
   * careful roll-out of its new reporting system to enhance its
     internal operations, logistics, and vendor relationships.

The stable outlook anticipates that Hughes' operating performance
will benefit from gradual economic strengthening and by its
strategic emphasis on higher growth regions of the country but
recognizes that cash flows from operating activities may be
constrained by rising working capital requirements to support its
growth.  Moody's outlook also incorporates the expectation that
Hughes' disciplined acquisition strategy will be financed with
moderate amounts of debt in combination with equity proceeds.

The ratings or outlook could come under pressure should the
company's margins erode to the point that leverage exceeds 3.5
times (excluding capitalization of operating leases) on a
sustained basis.  Factors that may apply upward pressure to the
outlook or ratings are the successful introduction of higher
margin services that elevate Hughes' profits and cash flows, or
permanent reduction to leverage of less than 2.0 times, or 25%
retained cash flow to total debt.

Hughes has reduced its use of leverage over the past two and a
half years to 2.4 times (debt / EBITDA) for the four quarters
ended July 30, from 3.1 times for fiscal 2003.  At the same time,
Moody's notes that the company's rental expense has been growing,
as management seeks to reduce Hughes' fixed overhead and allow for
enhanced scalability through the use of sale/leaseback
transactions.  Adjusting Hughes' leverage ratio by an estimated
amount necessary to capitalize these operating leases would
elevate its leverage to approximately 3.6 times, slightly above
its historical average.  The company has applied equity proceeds
toward debt reduction associated with its acquisition of Century
Maintenance Supply, Inc. in December 2003.  Moody's notes that
Hughes' acquisition activity also has created a sizable goodwill
asset on its balance sheet, totaling 29.5% of total assets at July
30, which could be indicative of elevated purchase multiples and
create a drag on the company's asset turnover ratio.

Hughes SGL-1 liquidity rating reflects its very good liquidity
position.  Hughes has generated significant free cash flow,
averaging over $100 million over the past three years.  Moody's
expects that Hughes' internally generated cash will satisfy the
majority of its working capital needs, dividend payments and capex
requirements, although some incremental borrowing may be required
as commodity costs are rising and business levels are increasing.
Historically, Hughes has maintained a modest cash balance of less
than $20 million.  The company's revolving credit facility was
recently increased to $500 million from $290 million, and pro
forma for the note issuance, it will be largely undrawn.  Hughes
is well within compliance with the facility's three financial
covenants governing fixed charge coverage, net worth, and
debt/capitalization.  Additionally, Hughes' fixed asset base is
unencumbered, which provides the company with the flexibility to
augment its liquidity position with asset sale proceeds, as
appropriate.

Headquartered in Orlando, Florida, Hughes Supply, Inc. is a
leading distributor of wholesale construction, repair and
maintenance-related products with 493 branches in 38 states.  For
the four fiscal quarters ended July 30, 2004, Hughes generated
$3.79 billion in revenues.


IMPAC MEDICAL: Inks Sales Consulting Agreement with Elekta
----------------------------------------------------------
IMPAC Medical Systems, Inc. (Nasdaq: IMPCE), a leading provider of
information technology solutions for oncology care, and Elekta, a
world leading supplier of advanced and innovative radiation
oncology and neurosurgery solutions announced have entered into a
Sales Consulting Agreement. Under the Agreement, Elekta will have
rights to offer IMPAC's oncology information system products and
services, including the recently released MOSAIQ(TM) Image-Enabled
EMR (electronic medical record) in select markets around the
world.

Elekta will now be able to offer a much broader solution that will
encompass the entire therapy process from initial referral,
through treatment, and into long-term follow-up. By providing
installation, training and support services to information systems
sold by Elekta, IMPAC will expand and accelerate its reach into
the global markets.

                Agreement Strengthens Relationship

IMPAC and Elekta have a rich history of cooperation and
innovation. IMPAC has provided interface solutions to Elekta's
radiation oncology products and has kept pace with Elekta's
industry-leading technological achievements for many years. IMPAC
has interfaced to Elekta equipment in ten countries.

In December 2003, IMPAC and Elekta reached agreements to
standardize interfaces for oncology therapeutic equipment based on
the DICOM Standard and earlier this week announced another
collaborative development to improve the performance of IMRT
(Intensity Modulated Radiotherapy).

               Open Systems is Key to Partnership

In this new sales agreement, the companies commit to maintaining
open systems and solutions. While the companies each seek to
benefit from this open systems approach, which relies heavily on
their standardization efforts, the key benefactors of this
strategy are the providers of oncology services. "We applaud
Elekta for its open systems commitment. It means practices can
pick best of breed solutions from vendors fully committed to the
emerging standards. For providers it means more choices for future
purchases, easier and faster implementations, and fewer in-house
resources that need to be involved in managing systems," says
Joseph K. Jachinowski, president and CEO of IMPAC Medical Systems

"Both Elekta and IMPAC have had long standing commitments to
improve the quality of life for patients. We continue to work with
our partners in the clinic to bring solutions that inspire
clinical confidence in the advancement of radiotherapy techniques
and the fight against serious disease. Elekta has an open-systems
philosophy that offers our customers seamless integration with
freedom to choose the systems that best suit them. This agreement
with IMPAC is an excellent example of this philosophy in action,"
said Laurent Leksell, president and CEO of Elekta.

                          About Elekta

Elekta is a world-leading supplier of advanced and innovative
radiation oncology and neurosurgery solutions and services for
precise treatment of cancer and brain disorders. Elekta's
solutions are clinically effective, cost efficient and gentle on
the patient. For additional information about Elekta, please visit
http://www.elekta.com/

                  About IMPAC Medical Systems, Inc.

IMPAC Medical Systems, Inc. is a leading provider of oncology IT
solutions that streamline both clinical and business operations to
help improve the process of delivering quality patient care. With
systems designed for anatomic pathology, medical oncology,
radiation oncology, imaging, clinical laboratory, and cancer
registry, IMPAC supports the entire team of healthcare
professionals who contribute to the care of the cancer patient.
Supporting over 2500 installations worldwide, IMPAC provides
practical solutions that deliver better overall communication,
process efficiency and quality patient care. For more information
about IMPAC products and services, please call 650-623-8800 or
visit http://www.impac.com/

                          *     *     *

As reported in the Troubled Company Reporter on Oct. 1, 2004,
PricewaterhouseCoopers LLP has been engaged to perform the
restatement work with respect to the fiscal year periods from 2001
to 2003 and that the Company expects to complete these
restatements and make the required Form 10-K/A filing during the
week of October 18, 2004.

In addition, the Company engaged Burr, Pilger & Mayer LLP to serve
as the Company's independent auditor of record for fiscal 2004.
BPM will review the Company's fiscal 2004 first, second and third
quarter results. The Company currently expects to file its
restated Forms 10-Q/A for the first and second quarters of fiscal
2004 and to file its fiscal 2004 third quarter Form 10-Q by
December 3, 2004, once the financial restatement is complete and
the new auditors have completed their review of the fiscal 2004
quarterly results.

                      NASDAQ Appeal Status

The Company received a NASDAQ Staff Determination on Aug. 24,
2004, indicating that its securities are subject to delisting from
The NASDAQ National Market. The Company requested a hearing
before a NASDAQ Listing Qualifications Panel to review the Staff
Determination. At a September 17, 2004 hearing, the Company
requested an exception from the NASDAQ Listing Qualifications
Panel for IMPAC's common stock to continue to trade on The NASDAQ
National Market. The requested exception would allow IMPAC to
file its Form 10-Q for the quarter ended June 30, 2004 by
December 3, 2004. IMPAC is awaiting a decision from the NASDAQ
Listing Qualifications Panel regarding the Company's request.
There can be no assurance the Panel will grant the Company's
request for continued listing.


IMPERIAL SCHRADE: U.S. Trustee Picks 5-Member Creditors Committee
-----------------------------------------------------------------
The United States Trustee for Region 2 appointed five creditors to
serve on an Official Committee of Unsecured Creditors in Imperial
Schrade Corp.'s chapter 11 case:

     1. MVP Select Care
        Attn: Maria DiConza
        111 Liberty Street
        Schenectady, New York 12305

     2. Atchison Leather Division of Berger Company
        Attn: Rick Berger
        P.O. Box 187
        104 North 6th Street
        Atchison Kansas 66002-1087

     3. Global Point Technology
        Hoff Associates
        Attn: James Carboni
        5815 County Road 41
        Farmington, New York 14425

     4. P & B Woodworking Company
        Attn: Steve Reinhardt
        2415 Route 52
        P.O. Box 225
        Pine Bush, New York 12566

     5. Ray International Trading Co.
        Attn: Michael Zhang
        A1-A3, 20F Shangmao Century Plaza
        49 Zhongshan Nan Road
        Nanjing, Jiangsu
        China 210005

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 Ellenville, New York, Imperial Schrade Corp.
-- http://www.schradeknives.com/-- manufactures and designs
knives and tools. The Company filed for Chapter 11 protection on
September 10, 2004 (Bankr. N.D.N.Y. Case No. 04-15877). Charles J.
Sullivan, Esq., at Hancock & Estabrook, LLP, represents the Debtor
in its restructuring efforts. When the Debtor filed for protection
from its creditors, it estimated more than $10 million in assets
and debts.


INFOUSA INC: Pays Down $5.2 Million of Outstanding Principal Debt
-----------------------------------------------------------------
infoUSA(R) (Nasdaq:IUSA), the leading provider of proprietary
business and consumer databases and sales leads, has paid down
another $5.2 million of principal debt obligation outstanding.
Based on the company's strong internal cash flow, infoUSA expects
to be able to use the majority of its free cash flow to pay down
debt.

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

                          About infoUSA

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

                          *     *     *

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

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

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


INNOVATIVE HOUSING: S&P Assigns BB Long-Term Issuer Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' long-term
issuer credit rating to the Innovative Housing Society of Canada
(IHS) located in the Province of Alberta, based on:

   -- the society's ambitious development plans,
   -- relatively weak financial performances, and
   -- volatile liquidity levels

The outlook is stable.

"The ratings on IHS reflect its ambitious development plans,
relatively weak financial performances in the past three financial
years despite achieving its own internal targets, volatile
liquidity levels, small organizational size, low degree of
geographical diversification, and the likelihood that future
development will operate under riskier contractual arrangements,"
said Standard & Poor's credit analyst Stephen Ogilvie.

"Some of these credit weaknesses are offset by a strong business
profile, long-term relationship with its chief funding source, and
the low financial risk associated with a significant proportion of
its existing operations," Mr. Ogilvie added.

IHS, a provider of affordable housing primarily for disabled
persons and seniors, has ambitious development plans that will
result in a significant increase in the size of its housing
portfolio and outstanding debt.  Debt levels, which stood at about
C$6 million at the end of 2003, should be relatively unchanged in
2004.

IHS intends to issue about C$15 million of new debt later this
year to fund new projects and replace temporary financing for a
project nearing completion.  Debt-service costs will increase
substantially with the new issuance and will reduce financial
flexibility.

The stable outlook reflects the expectation that IHS will
successfully implement its development plans on time and on budget
and that debt levels will not increase beyond current
expectations.  Operating surpluses are expected to improve as new
developments come on line and increase the scale of IHS'
operations.

In addition, Standard & Poor's expects that IHS will maintain its
positive long-term relationship with the Alberta government and
that its business profile will continue to be strong.  An
unexpected material increase in debt or continuing weakness in
financial results could result in a ratings revision. As well, any
significant expansion of current development plans that results in
an increase of the assumption of financial risk from facility
operation will result in a ratings revision.


INTEGRATED HEALTH: Court Lets Southern Oaks Liquidate Tort Claim
----------------------------------------------------------------
As previously reported, Southern Oaks Health Care, Inc., is a
third party plaintiff in a tort action commenced by Christine
Infante, on behalf of her father, Jose Urrutia.  The case is
styled as "Christine Infante o/b/o her natural father, Jose
Urrutia, Plaintiff v. Southern Oaks Health Care, Inc., d/b/a
Southern Oaks Health Center, Defendants/Southern Oaks Health Care,
Inc., d/b/a Southern Oaks Health Center, Third Party Plaintiff v.
IHS Acquisition No. 102, Inc., Third Party Defendant."

Southern Oaks' third party complaint against IHS Acquisition
No. 102 is set for trial in October 2004.  However, Kevin J.
Mangan, Esq., at Monzack and Monaco, P.A., in Wilmington,
Delaware, relates that after diligent discovery and investigation,
Southern Oaks discovered that the correct IHS entity to be sued is
IHS Acquisition No. 175, Inc., not IHS Acquisition No. 102.
Southern Oaks seeks to amend the Third Party complaint to reflect
the correct IHS entity.

                          *     *     *

Accordingly, Judge Walrath modifies the discharge injunction to
allow Southern Oaks to amend its Third Party Complaint.

Judge Walrath authorizes Southern Oaks to proceed with the
liquidation of its claim against IHS Acquisition No. 175, Inc., in
the State Court Action currently pending in Florida.

Southern Oaks' Claim may be liquidated in the State Court Action
by way of judgment or settlement, after which it will be treated
as an Allowed 1999 Insured Tort Claim, in accordance with the
Plan and any other applicable provisions.

Southern Oaks' Claim will be deemed to have been amended to assert
a claim against IHS Acquisition No. 175.

The Order does not limit Southern Oaks from seeking payment from
non-debtor parties or from any sources of insurance other than
the Debtors' insurance policies.

Headquartered in Owings Mills, Maryland, Integrated Health
Services, Inc. -- http://www.ihs-inc.com/-- 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. 82; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


INTERMET CORPORATION: Court Approves Payment of Salaries & Wages
----------------------------------------------------------------
Intermet Corporation and its debtor-affiliates sought and obtained
permission from the U.S. Bankruptcy Court for the Eastern District
of Michigan, Southern Division, to pay in the ordinary course of
business their employees' prepetition wages, salaries, payroll
taxes and other compensation, employee benefits and reimbursable
employee expenses.

Judge Marci B. McIvor allows the Debtors to pay up to
$1.4 million in prepetition wages to full-time and temporary
employees, and $7 million in employee benefits, which include,
among others, insurances, reimbursements and leave pay.

The Debtors' prepetition banks, Standard Federal Bank N.A.,
Comerica Bank and Bank One N.A. are directed by Judge McIvor to
honor payroll checks covering prepetition periods that may not
have been cashed or cleared as of September 29, 2004.

The Court understands that the Debtors' ability to preserve their
businesses and ultimately to reorganize is dependent on the
continued service, satisfaction and loyalty of their employees.

Headquartered in Troy, Michigan, Intermet Corporation --
http://www/intermet.com/-- is one of the largest producers of
ductile iron, aluminum, magnesium and zinc castings in the world.
It also provides machining and tooling services for the automotive
and industrial markets specializing in the design and manufacture
of highly engineered, cast automotive components for the global
light truck, passenger car, light vehicle and heavy-duty vehicle
markets.  The Company along with its debtor-affiliates filed for
chapter 11 protection on September 29, 2004 (Bankr. E.D. MI. Case
Nos. 04-67597 through 04-67614).  When the Debtors filed for
protection from its creditors, it listed $735,821,000 in total
assets with $592,816,000 in total debts.


ISTAR FINANCIAL: S&P Raises Credit Ratings to BBB- From BB+
-----------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings, including
raising its long-term counterparty credit ratings to 'BBB-' from
'BB+', on New York-based iStar Financial Inc.

Additionally, the ratings on its subsidiary, TriNet Corporate
Realty Trust Inc., including the 'BB+' long-term counterparty
credit rating, were affirmed and the outlook was revised to stable
from positive, reflecting the stand-alone performance, portfolio
quality, and smaller asset base of TriNet.

The upgrade is based on:

   -- the company's continued strong performance in terms of
      profitability,

   -- the positive track record of improving performance even
      through a mildly difficult real estate cycle (post 9-11),

   -- its increasing capital base, and

   -- the continued strong underwriting and servicing capabilities
      as evidenced by exemplary asset quality measures

Moreover, during the past year, the company has taken measured
steps to improve its debt structure, focusing on unsecured debt,
freeing up assets, laddering maturities, and shifting the
portfolio to include a greater percentage of first mortgage loans.

The offsetting factors include:

   -- the commercial real estate focus,
   -- the REIT structure, and
   -- the large-sized assets

"The company's conservative underwriting processes continue to
serve it well, as illustrated by its exemplary credit
performance," said Standard & Poor's credit analyst Steven
Picarillo.

Since inception, write-offs totaled $3.3 million and nonperforming
assets total just 0.36% of receivables, or 1.1% of the equity
base.  Additionally, the focus on high-net-worth borrowers and
investing in mission-critical credit tenant leases -- CTL -- bodes
well for continued overall good asset performance.

With stockholder equity of $2.49 billion at June 30, 2004, the
company's sizable equity position is factored in the rating.
Leverage has trended up from just over 1x in 1998 and is expected
to approach 2.3x by year-end 2005, which is considered acceptable
at the 'BBB-' level, given the current portfolio mix.

At June 30, 2004, first mortgage loans represented 36% of the
company's portfolio, increasing from 23% in March 2000.
Concurrently, the company is shifting away from riskier asset
classes such as unsecured corporate/mezzanine loans, and
noninvestment-grade CTL and b-notes/second mortgages, which now
collectively represent 42% of the portfolio, down from 56% in
2000.

The large-sized assets are factored in the rating. The top 10
financings represent approximately 20% of the portfolio or 61% of
the equity base. Offsetting this is the mission-critical nature of
many of the CTL assets, numerous multiasset secured loans, and the
high quality of the company's asset and borrower base.

The outlook is based on the company's continued strong
performance, its continued shift to higher-quality first
mortgages, and incorporates a minimal increase in leverage.


KAISER ALUMINUM: Inks Intercompany Settlement Agreement
-------------------------------------------------------
Kaiser Aluminum Corporation, together with its debtor-affiliates,
and the Unsecured Creditors Committee have executed an
Intercompany Settlement Agreement.  The ISA will be the subject of
a motion to be filed shortly with the U.S. Bankruptcy Court for
the District of Delaware seeking its approval.

As previously disclosed, the Company has been in discussion with
the UCC for the last nine months concerning such an agreement,
which is intended to accomplish two main objectives:

   1) to resolve intercompany claims among the Kaiser debtor
      entities arising from pre-petition and post-petition
      intercompany transactions among the various entities, and

   2) to provide the framework for proceeding with Kaiser's
      planned reorganization as a fabricated products company
      while enabling expedited liquidation of certain commodity-
      related and/or non-operating subsidiaries.

Kaiser's President and Chief Executive Officer Jack A. Hockema,
said, "For a number of months, our restructuring efforts have
focused on resolving a series of inter-related issues,
specifically the ISA; issues relating to termination of certain
pension plans by the PBGC and implementation of replacement plans;
and negotiation of modifications to the 1113 and 1114 agreement
addressing retiree health care and pension benefits previously
reached with the USWA.  Each of these was partially dependent upon
resolution of the other."

Mr. Hockema said, "The ISA provides for stipulated cash flows
related to the commodity asset dispositions that will be available
to Kaiser that we would expect to use in funding a portion of the
exit costs we'll bear upon emergence from Chapter 11.  We're also
working to finalize an amendment to the DIP credit agreement that
will allow us to implement the ISA's provisions regarding the
commodity-related asset dispositions and liquidating plans."

Mr. Hockema added, "Clearly, now that we have reached agreement on
the interrelated issues cited above, we have approached a
significant milestone in the company's progress toward emergence.
We expect the ISA settlement with the UCC and its members to serve
as a catalyst for resolution of the remaining issues, especially
asbestos and other tort claims, and we will make the resolution of
these issues our focus now as we move closer to emergence."

The company expects to ask the Court to set a special evidentiary
hearing to rule on the ISA as soon as practicable.

Kaiser's Form 10-Q for the second quarter of 2004 contains this
additional information related to the ISA:

   The proposed Intercompany Agreement would provide, among
   other things, for payments of cash by Alpart Jamaica, Inc.,
   Kaiser Jamaica Corporation, and Kaiser Alumina Australia
   Corporation to Kaiser Aluminum & Chemical Corporation of
   $90 million in respect of its intercompany claims against
   Alpart Jamaica, Kaiser Jamaica and Kaiser Alumina Australia
   plus any amounts up to $14.3 million plus accrued and unpaid
   interest and fees paid by KACC to retire Alpart-related debt.

   Under the proposed Intercompany Agreement, that amount would
   be increased or decreased for:

      (1) any net cash flows funded by or collected by KACC
          related to:

          (a) the Company's interests in and related to Alpart
              from January 1, 2004, through July 1, 2004
              -- estimated to be between $20 million to $30
              million benefit received by the Company;

          (b) related to the Company's interests in and related
              to Queensland Alumina Limited from July 1, 2004,
              through KAAC's emergence from Chapter 11; and

          (c) the sale of AJI's, KJC's and KAAC's interests in
              and related to Alpart and QAL; and

      (2) any purchase price adjustments -- other than incremental
          amounts related to alumina sales contracts to be
          transferred -- pursuant to KACC's sale of its interests
          in Alpart.

   The proposed Intercompany Agreement calls for those payments to
   become payable to KACC at the earlier of the sale of the
   Company's interests in Alpart and QAL or the emergence of AJI,
   KJC and KAAC from Chapter 11.  The Company expects that all
   those payments under the proposed Intercompany Agreement, other
   than $14.3 million that was paid to KACC in July 2004 in
   respect of retiring the Alpart-related debt and the $28 million
   that is to be paid once the Intercompany Agreement is
   finalized, are likely to be held in escrow for the benefit of
   KACC until KACC's emergence from the chapter 11 cases.  In the
   interim, KACC's claims against these entities are secured by
   liens.

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


KAISER ALUMINUM: Wants to Sell Valco Shares to Ghana Government
---------------------------------------------------------------
Volta Aluminium Company Limited owns and operates an aluminum
smelter in Tema, Ghana.  Kaiser Aluminum & Chemical Corporation
owns 90% of the equity interests in Valco and the remaining 10%
is owned by Alcoa, Inc.  The sole function of the Valco smelter
is to process alumina supplied by KACC and Alcoa into primary
aluminum under tolling contracts that provide for payment of
tolling charges proportionate to each party's equity interest.
Valco collected tolling charges to the extent of its cash
requirements while the balance were treated as non-interest
bearing loans to the shareholders callable on demand.

The Government of Ghana leases the smelter site to Valco pursuant
to an agreement that terminates in 2017.  Valco also has numerous
long-term contracts with Ghana.

Valco's general corporate affairs are governed by regulations
established pursuant to the Companies Code, 1963 (Act 179), of
Ghana.  Pursuant to a Management and Technical Assistance
Agreement, dated February 8, 1962, Kaiser Aluminum Technical
Services, Inc., managed, supervised and directed Valco's day-to-
day business operations, subject to the supervision and general
control of Valco's board of directors.

                      VRA Power Contract and
                Curtailment of Valco's Operations

Valco and the Volta River Authority are parties to a long-term
power supply contract, dated February 8, 1962.  The VRA agreed to
provide Valco with electricity generated by the VRA's
hydroelectric facility.  The initial term of the Power Contract
was for 30 years.  Pursuant to an option timely exercised by
Valco in March 1994, the Power Contract was extended for another
20 years.

The VRA's compliance with the Power Contract is guaranteed by the
Ghanaian Government pursuant to a master agreement between Valco
and the Government.  Under the Master Agreement, the Ghanaian
Government is also required to indemnify KACC for losses caused by
certain breaches of the Power Contract by the VRA.  The Master
Agreement has a term of 50 years.

In 2002, the VRA and the Ghanaian Government began to allege that
the Power Contract was no longer effective on the basis that it
had expired at the end of its initial term.  The VRA and the
Government claimed that Valco's exercise of the Extension Option
was ineffective because the exercise led to the formation of a new
agreement, which had not separately been approved by the Ghanaian
Parliament at the time as required under the new Ghanaian
constitution promulgated in 1992.  Valco and KACC strongly
disagree with this contention.

Valco, the Government of Ghana and the VRA attempted to reach a
consensual resolution concerning the power allocation issues under
the Power Contract, but no final agreement could be reached.  As a
result, the VRA reduced the amount of electricity delivered to
Valco and sought to charge Valco a higher price for the
electricity provided.  In May 2003, after several series of power
curtailments and faced with a rising price structure, Valco ceased
operations at the smelter.

                           Arbitration

In December 2002, Valco and KACC initiated an arbitration with the
International Chamber of Commerce in Paris against the VRA and the
Ghanaian Government.  Valco and KACC alleged that the VRA and the
Government breached the Power Contract and Master Agreement by
improperly:

   (a) curtailing the electricity provided by Valco;

   (b) changing a higher price for the electricity; and

   (c) denying Valco the right to determine the rate at which the
       electricity was delivered.

As a result of the breaches, Valco lost at least $56,500,000
relating to the lower amount and higher cost of aluminum
production and the costs of shutting down its smelter and retiring
its labor force.  KACC lost $15,900,000 as a result of Valco's
inability to process KACC's alumina.  Valco and KACC estimate that
their damages continue to increase as the dispute with the
Ghanaian Government continues and the Valco smelter remains idle.

The VRA and the Government of Ghana deny further obligations under
the Power Contract and the Master Agreement because the Power
Contract allegedly terminated after its initial term.  With
respect to the higher prices charged to Valco, the VRA contends
that it was or should be permitted to unilaterally adjust its
prices under the Power Contract because of changes that have taken
place in the Ghanaian energy sector since the early 1980s,
including a huge growth in power demand and the introduction of
thermal power.

The hearing on the Arbitration has not been scheduled.  Because
the scheduling of the Arbitration assumes that certain discovery
has taken place and requires some level of agreement among the
parties, the earliest date on which the Arbitration could proceed
in front of a proper tribunal would be mid to late 2005.

          Memorandum of Understanding and Sale Agreement

In December 2003, KACC executed a Memorandum of Understanding to
sell its interest in Valco to the Government of Ghana for
consideration of between $35,000,000 and $100,000,000, plus the
assumption of all of KACC's related liabilities and obligations.
Under the terms of the MOU, upon the execution of the MOU and the
payment by the Ghanaian Government of $7,000,000 into escrow, the
parties will suspend the pending Arbitration.  Upon the closing of
the transaction, the parties will dismiss the Arbitration with
prejudice.

The Government of Ghana never funded the escrow account and made
only one of the advance payments, equal to $5,000,000, which was
used to pay Valco's carrying costs during January, February and
part of March 2004.

In April 2004, the Ghanaian Government sought a reduction of the
purchase price based on the results of its due diligence.
Consequently, a KACC representative met with the President of
Ghana and other Government officials to renegotiate the MOU.  The
parties agreed to amend the MOU to reflect an agreed-upon purchase
price of $18,000,000 for Valco.  The Ghanaian Government was
credited with its $5,000,000 advance payment and placed the
remaining $13,000,000 in escrow.

The parties again met in August 2004 to discuss the implementation
of the May 2004 MOU.  On August 26, 2004, KACC, the Attorney
General of Ghana, and the Government agreed, subject to further
approval of the Bankruptcy Court and the Ghanaian Parliament, on
the final terms of a sale and purchase agreement for the KACC
Shares.

The principal terms of the Sale Agreement are:

   (a) KACC will sell and transfer the KACC Shares to the
       Ghanaian Government for the $18,000,000 agreed-upon
       purchase price;

   (b) Valco will declare a dividend to KACC in an amount
       sufficient to fully offset the intercompany receivable,
       which Valco holds against KACC in respect of excess
       tolling charges accumulated over the years;

   (c) KACC will relinquish any right, title, and interest to any
       alumina inventory left at Valco's smelter at the time of
       closing, valued at substantially less than $2,000,000;

   (d) KACC will not incur any Ghanaian tax liabilities to the
       Government as a result of the declaration of the dividend
       or any other aspect of the sale;

   (e) KACC and the Government will cause the mutual dismissal of
       the Arbitration with prejudice;

   (f) KACC and Kaiser Technical Services will be released from
       all contractual obligations arising under the Management
       Agreement and any Tolling Contract in which KACC is a
       party; and

   (g) KACC and Kaiser Technical Services will be released and
       discharged from any and all other obligations owed to the
       Government, the VRA, or any other instrumentality of the
       Government.

The closing of the sale of the KACC Shares is conditioned on the
occurrence of certain events, including:

    -- KACC receiving consent by its postpetition lenders to
       sell the KACC Shares;

    -- approval of the Sale Agreement by the President of Ghana,
       his Cabinet and the Ghanaian Parliament; and

    -- the Ghanaian Government's internal revenue service
       providing confirmation that KACC does not, and will not,
       owe any taxes to the Government after the sale.

On September 16, 2004, the parties entered into a side letter
agreement, subject to the Bankruptcy Court's approval but not of
the Ghanaian Parliament.  The parties agreed to amend the Escrow
Agreement to allow KACC to use a portion of the Remaining Funds to
pay for certain carrying costs of Valco through the closing of the
sale.  As with the Prepaid Funds, any amounts used by KACC would
be applied to the Agreed Purchase Price at closing.  However, the
Debtors are required to obtain authority from the Court to
consummate the sale before the Escrow Agreement can be modified or
any funds withdrawn.

                          Best Interest

Kimberly Newmarch, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, contends that the sale is justified because
it will permit the Debtors to eliminate ongoing expenditures in
connection with Valco's operations.  The sale is consistent with
the Debtors' long-term strategy to reorganize their Fabricated
Products business.

In addition, while KACC believes that its claims against the
Ghanaian Government and the VRA are meritorious, Ms. Newmarch
points out that the timing for completion of the Arbitration is
uncertain and likely to be difficult.  Moreover, the recovery of
any Arbitration award will likely be difficult.  Any judgment by
the Arbitration panel would only be enforceable in Ghanaian
courts, resulting in additional and potentially substantial delays
and reducing the probability of success.  Furthermore, given the
inherent risks and costs of litigation and the benefit accruing to
KACC under the Sale Agreement, the dismissal of the Arbitration in
furtherance of the Sale Agreement is warranted.

Accordingly, the Debtors sought and obtained the Court's authority
to sell their interests in Valco to the Government of Ghana.  The
Debtors are also authorized to reject the Management Agreement and
the KACC tolling contract related to Valco's operations, and to
dismiss the pending Arbitration.

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


KEYSTONE CONSOLIDATED: Committee Probes Contran's Claims & Control
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Wisconsin
approved an application under Rule 2004 of the Federal Rules filed
by the Official Committee of Unsecured Creditors appointed in
Keystone Consolidated Industries Inc.'s chapter 11 cases to
examine the Debtor's dealing with its parent Contran Corp.  Rule
2004 examinations are frequently characterized as broad fishing
expeditions.  The Committee wants to learn a lot more about claims
totaling $38 million Contran's filed against Keystone and wants to
explore how much control Contran has over the restructuring.

The Committee and Contran had been working under an informal
discovery protocol.  Contran pulled the plug on that arrangement
on Sept. 10, 2004, prompting the Committee's formal Rule 2004
application.

The Creditors' Committee is comprised of six members:

     * The Bank of New York, as Indenture Trustee;
     * Pacholder Associates;
     * Ameren Cilco;
     * Peoria Disposal Company;
     * Midwest Mill Service; and
     * Independent Steel Workers Alliance.

Headquartered in Dallas, Texas, Keystone Consolidated Industries,
Inc., makes carbon steel rod, fabricated wire products, including
fencing, barbed wire, welded wire and woven wire mesh for the
agricultural, construction and do-it-yourself markets. The Company
filed for chapter 11 protection on February 26, 2004 (Bankr. E.D.
Wisc. Case No. 04-22422). Daryl L. Diesing, Esq., at Whyte
Hirschboeck Dudek S.C., and David L. Eaton, Esq., at Kirkland &
Ellis LLP represent the Debtors in their restructuring efforts.
When the Company filed for protection from their creditors, they
listed $196,953,000 in total assets and $365,312,000 in total
debts.


KIEL BROS.: Wants Plan-Filing Period Stretched to Jan. 13
---------------------------------------------------------
Kiel Bros. Oil Co. tells the U.S. Bankruptcy Court for the
Southern District of Indiana that it needs more time to prepare
and file a chapter 11 plan of reorganization.  Kiel held an
auction on Sept. 20 and received many bids for its convenience
store and wholesale fuel supply business.  The Company needs time
to sort through those bids before it can craft any possible plan.

Kiel Bros. asks Judge Lorch for an extension of its exclusive
period during which to propose a plan through Jan. 13, 2005.  The
company also wants an extension, through Mar. 13, 2004, of its
time to solicit acceptance of that plan from creditors.

Headquartered in Columbus, Indiana, Kiel Bros. Oil Company, Inc.,
operates a convenience store and has a wholesale fuel supply
business. The Company filed for chapter 11 protection on June 15,
2004 together with its affiliate KP Oil, Inc. (Bankr. S.D. Ind.
Case No. 04-92128).  Jay Jaffe, Esq., at Baker & Daniels
represents the Debtors in their restructuring efforts. When the
Company filed for protection from their creditors, they listed
both estimated debts and assets of over $10 million.


KISTLER AEROSPACE: Has Until Oct. 31 to File Chapter 11 Plan
------------------------------------------------------------
The Honorable Samuel J. Steiner of the U.S. Bankruptcy Court for
the Western District of Washington gave Kistler Aerospace
Corporation an extension, through Oct. 31, 2004, to file a chapter
11 plan of reorganization.  Judge Steiner gave the Debtor a
concomitant extension of its time to solicit acceptances of that
plan from creditors through Jan. 31, 2005.

The extension is not exclusive to the Debtor.  The Company's
lenders, led by Bay Harbour Management LLC, will share exclusivity
with the Debtor and can file its own plan for the company if
necessary.  The Debtor says it's working closely with Bay Harbour
and its Official Creditors' Committee, and the goal is a
consensual plan.  Exit financing, the Debtor indicates, is a
critical piece of the puzzle.

Kistler Aerospace Corporation, headquartered in Kirkland,
Washington is developing a fleet of fully reusable launch vehicles
to provide lower cost access to space for Earth orbiting
satellites.  The Company filed for chapter 11 protection on July
15, 2003 (Bankr. W.D. Wash. Case No. 03-19155).  Jennifer L.
Dumas, Esq., and Youssef Sneifer, Esq., at Davis Wright Tremaine
LLP, represent the Debtor in its restructuring effort.  When
the Company filed for protection from its creditors, it listed
$6,256,344 in total assets and $587,929,132 in total debts.


KITTY HAWK: Unsecured Creditors Waiting for Stock Distribution
--------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Kitty
Hawk, Inc., and its debtor-affiliates' post-confirmation chapter
11 cases, asks the U.S. Bankruptcy Court for the Northern District
of Texas, for a third time, to continue its existence pending
distributions to unsecured creditors under the company's confirmed
chapter 11 plan.

                     24 Months and Counting

Twenty-four months have passed since the Effective Date of the
Chapter 11 Plan.  While the Reorganized Debtors have made
distributions to their old noteholders, they have not made an
initial distribution to general unsecured creditors, Christopher
D. Johnson, Esq., at Diamond McCarthy Taylor Finley Bryant & Lee,
LLP, representing the Committee, tells Judge Houser.  The delay
arises because the Reorganized Debtors have not prosecuted the
remaining objections to general unsecured claims that would make
it feasible to make a distribution to general unsecured creditors.

                   The Committee Must Continue

The Committee believes it is necessary to continue to supervise
the Reorganized Debtors' resolution and prosecution of claims
objections in order to protect the interests of general unsecured
creditors, ensure that only valid unsecured claims are allowed,
and ensure that the Reorganized Debtors make distribution of stock
to holders of allowed unsecured claims as soon as possible.

The Committee asks the Court to enter an order modifying and
amending Section 8.20 of the Plan and Paragraph 22 of the
Confirmation Order to provide that the Committee will continue to
operate until final distribution of stock to holders of allowed
general unsecured claims.

The interests of the Reorganized Debtors are not necessarily
aligned with those of the general unsecured creditors, Mr. Johnson
argues on the Committee's behalf.  Unlike objections to secured
and administrative expense claims, the Reorganized Debtors have
little incentive to spend money to prosecute objections to general
unsecured claims. For this reason, the Plan provided that the
Committee would continue for one year after the Effective Date to
ensure that the interests of general unsecured creditors were
protected.  "Allowing the Committee to continue to supervise the
Reorganized Debtors' resolution and prosecution of objections to
claims provides a necessary check on the power of the Reorganized
Debtors and protects the creditors remaining in these cases who
have yet to receive their promised distribution," Mr. Johnson
says.

Section 8.20 of the Plan provides that fees for counsel to the
Committee are capped at $200,000.  As of January 31, 2004, counsel
to the Committee has billed $83,428 in attorneys' fees and
expenses supervising the Reorganized Debtors' prosecution and
resolution of claim objections, leaving $116,572 remaining under
the cap.

                     Four Unresolved Claims

At a hearing on August 18, 2004, counsel for the Reorganized
Debtors informed the Court that only a few claim objections
remained.  Based upon information provided by the Reorganized
Debtors, the Committee believes that there are four remaining
objections that haven't been settled, representing a total claimed
amount of less than $1,778,600.  The Court has ordered the
Reorganized Debtors to set these remaining objections for final
hearing.

                        About the Company

Kitty Hawk, based in Dallas, Texas -- http://www.khcargo.com/--  
provides guaranteed, mission-critical, scheduled overnight air
freight transportation to major business centers throughout North
America including, Alaska, Hawaii, Toronto, Canada, San Juan,
Puerto Rico and now, four cities in Mexico. With more than 30
years experience in the aviation and airfreight industries, Kitty
Hawk plays a key connecting role in the global supply chain. Kitty
Hawk serves the logistics needs of more than 1,500 freight
forwarders, integrated carriers, logistics companies and major
airlines with its fleet of B727 freighter aircraft, its ground
truck-network, as well as its 239,000 square-foot cargo warehouse,
U.S. Customs clearance and sort facility at its Fort Wayne, Ind.,
hub. Kitty Hawk's extensive air-ground cargo network and award-
winning, guaranteed overnight express service is ideal for heavy-
weight shipments, special goods with unique dimensions,
perishables, animals and other valuable shipments.

                      About the Bankruptcy

Kitty Hawk, Inc., Kitty Hawk Aircargo, Inc., Kitty Hawk Charters,
Inc., Kitty Hawk International, Inc., Kitty Hawk Cargo, Inc., OK
Turbines, Inc., Longhorn Solutions, Inc., Aircraft Leasing, Inc.,
American International Travel, Inc., and Flight One Logistics,
Inc., filed their voluntary petitions for relief under Chapter 11
of the United States Bankruptcy Code on May 1, 2000 (Bank. N.D.
Tex. Case No. 400-42141-BJH).  Following the Petition Date, the
Debtors continued to operate their businesses and manage their
properties as debtors-in-possession pursuant to 11 U.S.C.  1107
and 1108.  On August 5, 2002, the Bankruptcy Court confirmed the
Debtors' Final Joint Plan of Reorganization.  The Effective Date
of the Plan was September 30, 2002.  Robert D. Albergotti, Esq.,
John D. Penn, Esq., and Sarah Foster, Esq., at Haynes & Boone,
LLP, represent Kitty Hawk.  Christopher D. Johnson, Esq., and
Kyung S. Lee, Esq., at Diamond McCarthy Taylor Finley Bryant &
Lee, LLP, represent the Official Unsecured Creditors' Committee.


LEVI STRAUSS: To Webcast 3rd Quarter Financial Results on Tuesday
-----------------------------------------------------------------
Levi Strauss & Co. will broadcast over the Internet its conference
call to discuss third-quarter 2004 financial results for the
period ended August 29, 2004. The call will be held on Tuesday,
October 12, 2004 at 10 a.m. Eastern Daylight Time/7 a.m. Pacific
Daylight Time and will be hosted by Phil Marineau, chief executive
officer, and Jim Fogarty, chief financial officer.

To access the webcast, please visit http://levistrauss.com/news/webcast.htm
To listen to the live webcast via telephone, call 1-800-891-4735
in the United States or Canada; or 1-706-645-0194 from other
international locations. A replay of the webcast will be available
at approximately 2 p.m. Eastern Daylight Time, and it will be
archived on the Web site for six months. To access the related
earnings release on October 12, 2004, please visit
http://www.levistrauss.com/and click on "Financial News" and
"Financial Releases."

Levi Strauss & Co. is one of the world's leading branded apparel
companies, marketing its products in more than 110 countries
worldwide. The company designs and markets apparel for men, women
and children under the Levi's(R), Dockers(R) and Levi Strauss
Signature(TM) brands.

At May 30, 2004, Levi Strauss & Co.'s balance sheet showed a
$1,373,697,000 stockholders' deficit, compared to a deficit of
$1,393,172,000 at November 30, 2003.


LORAL SPACE: Look for a Disclosure Statement by October 14
----------------------------------------------------------
Loral Space & Communications Ltd. and its debtor-affiliates tell
the U.S. Bankruptcy Court for the Southern District of New York
that they need just two more weeks to prepare and file a
comprehensive disclosure statement that will explain their chapter
11 plan of reorganization.  The disclosure statement was supposed
to have been filed by Fri., Oct. 1.  Judge Drain entered an
ex parte order extending the Debtor's exclusive period through
Oct. 14.  The Court will convene a hearing on the request next
Friday with the expectation that the request for more time will
be moot.

Loral explains that it needs these two weeks to wrap up last-
minute talks with the Official Committee of Unsecured Creditors
appointed in its chapter 11 cases.  The Debtors tell Judge Drain
that the Committee supports the underlying chapter 11 plan.

Loral's Plan, as previously reported in the Troubled Company
Reporter, provides, among other things, that:

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

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

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

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

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

A full-text copy of Loral's proposed plan is available at no
charge at:

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

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

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


LTC PROPERTIES: Fitch Raises Classes B & E Mortgage Cert. Ratings
-----------------------------------------------------------------
LTC's commercial mortgage pass-through certificates, series 1996-
1, are upgraded by Fitch:

     --$7.6 million class C to 'AAA' from 'A';
     --$5.1 million class D to 'AAA' from 'BBB-';
     --$11.8 million class E to 'BB+' from 'B-'.

The following classes are affirmed:

     --$329 class LR 'AAA';
     --$329 class R 'AAA';
     --$2.9 million class B to 'AAA';
     --$4.5 million class F remains at 'CCC'.

Fitch does not rate the $4.7 million class G.  Class A has paid in
full.

The rating upgrades reflect the increase in credit enhancement
levels attributed to loan payoffs and amortization. As of the
September 2004 distribution date, the pool's aggregate collateral
balance had been reduced 67% to $36.6 million from $112.5 million
at issuance.

GMAC Commercial Mortgage Corp., the master servicer, provided
year-end 2003 operating performance for 80% of the outstanding
balance.  Based on the information provided, the weighted average
debt service coverage ratio -- DSCR -- was 1.95 times, compared
with 1.49x as of YE 2002 and 2.39x at issuance.

One loan (2.4%) had a YE 2003 DSCR below 1.00x; however, the loan
remains current in its debt payments.

One loan (3.0%) is delinquent and in special servicing.  The loan
is secured by a vacant health care property in Enid, Oklahoma.
The special servicer, LTC Properties, Inc., is exploring options
to maximize the proceeds from the disposition of the loan.

Three loans (27.6%) are secured by properties located in Florida
that were affected by recent hurricanes.  According to GMAC
Commercial Mortgage, the master servicer, none of the properties
sustained any damage.  The pool remains highly concentrated by
property type, with the entire pool secured by health care
properties.


NATIONAL CENTURY: Five Entities Seek Leave to Appeal R. 2004 Order
------------------------------------------------------------------
Five entities ask the United States District Court for the
Southern District of Ohio, Eastern Division, for leave to appeal
from the order entered by Bankruptcy Court Judge Donald E.
Calhoun, Jr., denying their request to quash a subpoena served by
the Unencumbered Assets Trust, as successor in interest to and
transferee of National Century Financial Enterprises, Inc., and
its debtor-affiliates:

    (1) Bank One, N.A.,
    (2) Credit Suisse First Boston, LLC,
    (3) Deloitte & Touche, LLP,
    (4) JP Morgan Chase Bank, and
    (5) PricewaterhouseCoopers, LLP.

Pursuant to Rule 2004 of the Federal Rules of Bankruptcy
Procedure, the Trust seeks to take a Rule 30(b)(6) testimony from
the Subpoena Entities, allegedly to identify and assess potential
claims of the Trust.  The Subpoena seeks the testimony of a
corporate representative from each of the Subpoena Entities on
certain topics and covers countless events over a period of time.
Representing CSFB, Sherri Blank Lazear, Esq., at Baker &
Hostetler, in Columbus, Ohio, points out that on its face, the
Subpoena is abusive and goes beyond anything contemplated by Rule
30(b)(6) of the Federal Rules of Civil Procedure.

After trying unsuccessfully to negotiate the scope of the
Subpoena with the Trust, the Subpoena Entities sought to quash or
modify the Subpoena.  On September 7, 2004, the Bankruptcy Court
denied their requests.  The Subpoena Entities argue that Judge
Calhoun failed to address any of the arguments they presented.

Ms. Lazear asserts that the September 7 Order is clearly
erroneous.  The scope of the Subpoena is virtually boundless as
to subject matter and exceedingly burdensome.  It would
effectively encompass the entirety of the issues raised in the
Multidistrict Litigation proceeding, thereby completely
undermining the statutory stays passed by both Congress and
various states.

Ms. Lazear points out that the Trust has no need to take CSFB's
deposition at this time because the Subpoena Entities agreed to
toll the statute of limitations that otherwise might apply to any
claims against them, thereby addressing the Trust's stated
rationale for seeking the deposition now.  Ms. Lazear notes that
any claim that the Trust might want to dismiss against the
Subpoena Entities would be barred in any event by the doctrine of
in pari delicto because the Debtors themselves perpetrated the
fraud that caused NCFE to file for bankruptcy protection.

Furthermore, the Trust does not need a Rule 2004 examination of
the Subpoena Entities because, pursuant to the Sixth Circuit's
decision in Browning v. Levy, 283 F.3d 761 (6th Cir. 2002), any
causes of action not yet identified have not survived the Plan's
confirmation as a matter of law.

Accordingly, there was and is no legal basis for imposing the
burden and expense complying with the Subpoena on the Subpoena
Entities, and forcing the Subpoena Entities to provide binding
testimony from a corporate representative before:

    -- the Trust has asserted claims in a filed complaint,

    -- the Subpoena Entities have joined issue on the claims; and

    -- the Subpoena Entities have had the benefit of any
       discovery.

By this motion, the Subpoena Entities ask the District Court to
determine that the Bankruptcy Court's Order is final and thus,
appealable.  In the alternative, the Subpoena Entities seek leave
to appeal the Order as an interlocutory order under Section
158(a)(3) of the Judiciary Procedures Code.

CSFB believes that the Bankruptcy Court Order is final because it
disposes of the discrete issue concerning whether the Trust may
use Rule 2004 in the manner contemplated by the Subpoena.  The
legal issues for appeal have been narrowed and there is no
indication that further action by the Bankruptcy Court will be
forthcoming.  As a result, the Order is final.

Even if the Order is properly characterized as interlocutory, and
it is not, Ms. Lazear asserts that the District Court has
discretion to hear the appeal under Section 158(a)(3).  Because
the statute contains no criteria to guide the exercise of
discretion, district courts have looked to the circuit court
standards for interlocutory appeals under Section 1292(b) of the
Judiciary Procedures Code.  These standards are well settled:

    (a) The matter involved must be one of "law";

    (b) It must be controlling;

    (c) There must be substantial ground for "difference of
        opinion" about it; and

    (d) An immediate appeal must materially advance the ultimate
        termination of the litigation.

When applied, these standards show that the District Court should
exercise its discretion and grant leave to appeal the Order.  The
appeal turns on questions of law, including:

    -- propriety of using Rule 30(b)(6) depositions in a Rule
       2004 examination where there is no pending adversary
       proceeding or contested matter; and

    -- the permissible scope and purpose of Rule 2004 discovery
       after a liquidation plan has been confirmed.

Ms. Lazear asserts that all relevant questions of law are
"controlling" because the Bankruptcy Court committed reversible
error if the Trust is legally forbidden from conducting the
discovery.

Moreover, there is unquestionably a substantial difference of
opinion on the questions of law, which present difficult issues
of first impression.  For example, there are no cases addressing
the propriety of using Rule 30(b)(6) depositions in a Rule 2004
examination where there is no pending adversary proceeding or
contested matter.  Indeed, no court has ever authorized a Rule
30(b)(6) deposition of the scope in a Rule 2004 context,
particularly where the designated topics are the subject of other
related multi-district litigation where discovery is stayed.
Similarly, the Subpoena Entities are not aware of any case
authorizing the use of broad Rule 2004 depositions post-
confirmation to marshal evidence for all of the claims that were
fully identified in a confirmed bankruptcy plan.  Also, an
immediate appeal will materially advance the ultimate termination
of the dispute over the Trust's continued efforts to extend Rule
30(b)(6) well beyond its permissible purpose and scope.

Ms. Lazear also notes that requiring the Trust to comply with the
discovery rules under the Federal Rules of Civil Procedure and
abide by the stay of discovery in the MDL proceeding will save
time and expense for the courts and all parties involved.

Similar arguments were presented by:

   -- P. Brian See, Esq., at Squire, Sanders & Dempsey, LLP,
      representing Bank One, N.A.;

   -- Adam J. Biehl, Esq., at Bailey Cavalieri LLC, representing
      PricewaterhouseCoopers LLP;

   -- William C. Wilkinson, Esq., and John B. Kopf, III, Esq., at
      Thompson Hine LLP, representing JP Morgan Chase Bank; and

   -- Robert J. Sidman, Esq., at Vorys, Sater, Seymour
      & Pease LLP, representing Deloitte & Touche LLP.

Headquartered in Dublin, Ohio, National Century Financial
Enterprises, Inc. -- http://www.ncfe.com/-- through the CSFB
Claims Trust, the Litigation Trust, the VI/XII Collateral Trust,
and the Unencumbered Assets Trust, is in the midst of liquidating
estate assets.  The Company filed for Chapter 11 protection on
November 18, 2002 (Bankr. D. Ohio Case No. 02-65235).  The Court
confirmed the Debtors' Fourth Amended Plan of Liquidation on
April 16, 2004.  Paul E. Harner, Esq., at Jones Day, represents
the Debtors in their restructuring efforts.  (National Century
Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


NATIONS BALANCED: Final Liquidating Distribution is $9.4 Per Share
------------------------------------------------------------------
The Board of Directors of Nations Balanced Target Maturity Fund,
Inc. previously approved a Plan of Liquidation and Termination for
the Company. The Plan provides for the Company's complete
liquidation by September 30, 2004, or shortly thereafter and its
later termination as a registered investment company and
dissolution as a Maryland corporation. The final liquidating
distribution for the Company will be $9.446804 per share.

                        About the Company

Nations Balanced Target Maturity Fund, Inc., is a diversified,
closed-end management investment company. The Company's investment
objectives are to provide a return of investment on or about
September 30, 2004, to investors who purchased shares in the
Company's initial public offering of the Company and who reinvests
all dividends and hold their shares to the Maturity Date, and to
provide long-term growth of capital, with income a secondary
objective. The Company will seek to achieve its investment
objectives by investing a portion of its assets in "zero coupon"
U.S. Treasury obligations and the balance of its assets primarily
in common stocks.


NORTHWESTERN CORP: Gets Creditors' Acceptance on Amended Plan
-------------------------------------------------------------
NorthWestern Corporation filed a Certification of Balloting
Results with the U.S. Bankruptcy Court for the District of
Delaware in which the Company received acceptance by certain
creditors for its Second Amended Plan of Reorganization.

As previously announced, NorthWestern filed with the Bankruptcy
Court a Second Amended and Restated Plan of Reorganization and
Disclosure Statement reflecting a settlement agreement the Company
reached with Harbert Management Corp. and Wilmington Trust.
Under the terms of the agreement, Harbert Management Corp., other
holders of NorthWestern's Trust Originated Preferred Securities,
and other subordinated creditors who so choose, will be eligible
to receive, pro rata, 8 percent of the common stock and warrants
exercisable for an additional 13 percent of the equity in the
reorganized NorthWestern.  Senior unsecured debtholders and
general unsecured creditors of the Company will receive
approximately 92 percent of the reorganized NorthWestern's equity,
based on the agreement.

The impaired creditor classes which accepted the Plan included
the:

   -- Class 7 (Unsecured Note Claims),

   -- Class 8(a) (Unsecured Subordinated Note Claims represented
      by the TOPrS Notes), and

   -- Class 9 (General Unsecured Claims).

Class 8(b) (Unsecured Subordinated Note Claims represented by the
QUIPS Notes) rejected the Plan, but approximately $19 million of
the QUIPS Notes accepted their pro rata share of the common stock
and warrants.

The Bankruptcy Code defines acceptance of a plan of reorganization
by a class of claims as acceptance by holders of at least two-
thirds in dollar amount and more than one-half in number of the
allowed claims of that class that have actually voted.  Even
though Class 8(b) rejected the plan in terms of dollar amount,
NorthWestern is seeking confirmation of the Plan as allowed under
the Bankruptcy Code.  The confirmation hearing on the Company's
Plan began yesterday, Oct. 6, 2004.

The resolicitation of creditors was conducted by Kurtzman Carson
Consultants, an independent third-party solicitation firm.

                       About NorthWestern

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


OWENS CORNING: Century Indemnity Objects to AXA Belgium Settlement
------------------------------------------------------------------
In 1991, Owens Corning and its debtor-affiliates and Royale Belge,
AXA Belgium S.A.'s predecessor-in-name, entered into a settlement
agreement, resolving a dispute over coverage for asbestos products
claims.  The Debtors and AXA disagree whether AXA has further
coverage obligations with respect to asbestos-related non-products
claims.  According to AXA, it has no further coverage obligations
to the Debtors with respect to asbestos-related claims, regardless
of whether they are characterized as products/completed operations
or non-products.

On October 26, 2001, the Debtors commenced a lawsuit against AXA
and other insurance companies seeking coverage for non-products
claims in the Court of Common Pleas of Lucas County, Ohio.

Anna P. Engh, Esq., at Covington & Burling, in Washington, D.C.,
relates that after a lengthy negotiation, the parties agree that:

   (a) AXA will pay a monetary amount into an escrow account;

   (b) they will mutually release one another and their
       related entities from all claims relating to the 1991
       Settlement, the AXA policies at issue in the Non-Products
       Coverage Litigation, and certain other policies; and

   (c) the key terms of the Settlement Agreement are contingent
       on the entry of a final order confirming a Plan that
       includes a Section 524(g) Injunction protecting AXA.

The Debtors ask the U.S. Bankruptcy Court for the District of
Delaware to approve their Settlement Agreement with AXA Belgium.

                     Century Indemnity Objects

Century Indemnity Company asserts that it has a direct interest
in the terms of the proposed settlement agreement between the
Debtors and AXA Belgium, S.A., because the Debtors asserted
certain claims against Century Indemnity for excess insurance
coverage during the same period that AXA also provided excess
coverage to the Debtors.

Century is the successor-in-interest to CCI Insurance Company, as
successor-in-interest to Insurance Company of North America and
Central National Insurance Company.

Linda M. Carmichael, Esq., at White and Williams, LLP, in New
York, relates that AXA provided excess insurance coverage to the
Debtors from September 1, 1979, through September 1, 1984.
Between 1981 and 1983, Century is alleged to have issued excess
policies that would be implicated only after the AXA policies are
fully exhausted.  The Debtors can make claims with respect to the
Century excess policies only if the underlying primary and excess
policies, like the AXA excess policies, have been fully
exhausted.

Century may also have claims and cross claims against AXA,
including claims for indemnification and contribution, based on
claims that have been or may be asserted against Century by
others.

Ms. Carmichael points out that the Debtors' request do not
provide even the most basic information necessary for Century to
evaluate the terms of the settlement and determine the extent to
which Century's rights may be implicated.  From the stark
information provided, it is impossible to determine:

    (1) which policies are implicated;

    (2) which claims have been settled;

    (3) the amounts of defense and indemnity costs allocated to
        AXA; and

    (4) the amount of the policy limits or whether any claims or
        cross claims for indemnification or contribution are
        impaired by the settlement.

The only information the Debtors provided in support of their
request is that:

    (1) AXA will pay "a monetary amount" into an escrow account;
        and

    (2) the Debtors and AXA will mutually release one another
        from all claims relating to a 1991 settlement agreement,
        "the AXA policies at issue in the Non-Products Coverage
        Litigation," and "certain other policies."

Ms. Carmichael argues that the proponent of a settlement bears
the burden of proof in seeking the approval of a settlement.  The
Debtors cannot meet this burden by withholding essentially all
information concerning the terms of the settlement from creditors
and other interested parties.

Likewise, the Debtors' request to file the entire AXA settlement
agreement under seal must fail because they acknowledge that they
have already disclosed the agreement and its terms to their
adversaries -- the asbestos claimants -- and the U.S. Trustee.
The Debtors cannot meet their burden to demonstrate the
prerequisites for confidentiality treatment of information if
they have already published that information to multiple
plaintiffs' firms.

To resolve the issue, Century is willing to retain the AXA
settlement agreement under a confidentiality stipulation.
Otherwise, Century objects to the Debtors' request to file the
settlement under seal and to approve the settlement on the
grounds that it is being denied information necessary to evaluate
the effect of the settlement on its rights and the estate.

                          Debtors Respond

According to Ms. Engh, Century did not ask for a copy of the
Settlement Agreement before filing its objection.  Promptly after
receiving Century's Objection, the Debtors sent a copy of the
Settlement Agreement to Century, subject to a confidentiality
agreement.  Accordingly, Century's principal objection is now
moot.

Ms. Engh notes that Century did not raise any potential
objections to the Settlement Agreement in its role as an alleged
creditor.  Under Rule 9019(a) of the Federal Rules of Bankruptcy
Procedure, the standard for the approval of a settlement
agreement is whether the settlement is in the best interests of
the estate.

The only potential objection to the Settlement Agreement raised
by Century is in its role as the Debtors' insurer.  As an initial
matter, any effect that the settlement may have on Century's
interests as the Debtors' insurer has no bearing on whether the
settlement serves the best interests of the estate.  To the
extent that Century believes that it has coverage defenses
against the Debtors relating to the settlement, any of the
defenses may be raised by Century in the pending Wellington ADR
proceeding between the Debtors and Century.  The Wellington ADR
proceeding, not the bankruptcy proceeding, is the appropriate
forum for Century to raise any coverage defenses concerning the
AXA Belgium Settlement.

In any event, the potential objections raised by Century are
based on an incorrect premise.  Century alleges that the
Settlement Agreement may raise issues of policy exhaustion
because Century's policies are in layers above the AXA Belgium
policies.  Ms. Engh relates that none of the policies of Century
or its affiliates is at a higher layer of excess coverage than
the AXA Belgium policies.  Thus, the exhaustion of the AXA
policies has no relevance to whether Century's coverage is
triggered.

Accordingly, the Debtors ask Judge Fitzgerald to overrule
Century's objections.

Headquartered in Toledo, Ohio, Owens Corning --
http://www.owenscorning.com/-- manufactures fiberglass
insulation, roofing materials, vinyl windows and siding, patio
doors, rain gutters and downspouts.  The Company filed for chapter
11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837).
Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom,
represents the Debtors in their restructuring efforts.  At
June 30, 2004, the Company's balance sheet shows $7.3 billion in
assets and a $4.3 billion stockholders' deficit.  (Owens Corning
Bankruptcy News, Issue No. 83 Bankruptcy Creditors' Service, Inc.,
215/945-7000)


PILLOWTEX CORP: Reports Misc. Asset Sales Totaling $1,071,021
-------------------------------------------------------------
Pursuant to the Court-approved Miscellaneous Asset Sale
Procedures, Pillowtex Corporation and its debtor-affiliates notify
Judge Walsh that they will sell certain inventory and real
property for $1,071,021 in the aggregate:

(1) Assets:            Certain Inventory located in Kannapolis,
                       North Carolina

    Debtor-seller:     PTEX, Inc.

    Purchaser:         Premium Discounters, Inc.

    Price:             $21,620

(2) Assets:            Certain Inventory located in Kannapolis,
                       North Carolina

    Debtor-seller:     PTEX, Inc.

    Purchaser:         SaniDown, Inc.

    Price:             $63,901

(3) Assets:            Certain Inventory located in Kannapolis,
                       North Carolina

    Debtor-seller:     PTEX, Inc.

    Purchaser:         SaniDown, Inc.

    Price:             $10,500

(4) Assets:            Parcel of real property at 4111 Mint Way,
                       Dallas, Texas, plus:

                          * allocated utility rights;

                          * all leases on the property;

                          * all appurtenances, easements,
                            licenses, privileges and other
                            interests belonging to the Property;
                            and

                          * the furniture, fixtures and other
                            tangible personal property owned by
                            PTEX, Inc., located at the Property.

    Debtor-seller:     PTEX, Inc.

    Purchaser:         Spigel Properties, Inc.

    Price:             $975,000, with the 10% deposited in escrow
                       with Chicago Title Insurance Co. until the
                       closing.

Headquartered in Dallas, Texas, Pillowtex Corporation --
http://www.pillowtex.com/-- sold top-of-the-bed products to
virtually every major retailer in the U.S. and Canada.  The
Company filed for Chapter 11 protection on November 14, 2000
(Bankr. Del. Case No. 00-4211), emerged from bankruptcy under a
chapter 11 plan, and filed a second time on July 30, 2003 (Bankr.
Del. Case No. 03-12339).  The second chapter 11 filing triggered
sales of substantially all of the Company's assets.  David G.
Heiman, Esq., at Jones Day, and William H. Sudell, Jr., Esq., at
Morris Nichols Arsht & Tunnel, represent the Debtors.  On July 30,
2003, the Company listed $548,003,000 in assets and $475,859,000
in debts.  (Pillowtex Bankruptcy News, Issue No. 70; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


PEMSTAR INC: Unveils Restructuring Plans to Save $5MM Annually
--------------------------------------------------------------
PEMSTAR Inc. (Nasdaq:PMTR), a leading provider of global
engineering, product design, manufacturing and fulfillment
services to technology, industrial and medical companies, intends
to reduce its Americas region workforce and manufacturing capacity
in order to enhance productivity and cut costs.

PEMSTAR will take restructuring charges for the fiscal 2005 second
quarter ended September 30, 2004, of approximately $0.5 million.
The company plans to consolidate certain of its operations in the
Americas region. Specifically, PEMSTAR's three Midwest sites will
be integrated into one virtual operational entity with shared
general management and support services. PEMSTAR also will reduce
its San Jose development and manufacturing operations. These steps
will result in a workforce reduction of approximately 5 percent of
PEMSTAR's total domestic employee base.

Additionally, a total of 100,000 to 150,000 square feet of
manufacturing space, or 14 percent of capacity, will be eliminated
in the Americas during the next two fiscal quarters. As a result
of this capacity reduction, PEMSTAR plans to take total
restructuring charges in the range of $2 million to $4 million in
the December 2004 and March 2005 quarters.

When completed, management believes that the workforce and
capacity reductions combined will yield approximately $5 million
in annual savings.

According to Al Berning, PEMSTAR's chairman, president and CEO:
"Having worldwide operations to service our customers wherever
they are and wherever their products need to be is the lynchpin of
our strategy for growth. This restructuring maintains our global
footprint yet streamlines our domestic operations. Removing at
least 100,000 square feet of excess capacity in the Americas over
the next six months should enhance future margins and strengthen
customer satisfaction management."

As a result of the restructuring charges and slower sales into
certain markets, PEMSTAR also said today that results for the
fiscal 2005 second quarter will come in below previously issued
guidance. The company now sees sales ranging from $170 million to
$175 million, versus $180 million to $190 million, which PEMSTAR
expected when first-quarter results were released on July 27,
2004. The company anticipates a second-quarter GAAP loss per
diluted share of ($0.07) to ($0.11), including $0.04 to $0.06 per
share in restructuring charges and customer disengagement costs
from a change in business model announced earlier, compared with
the previously expected $0.00 to $0.04 per share profit. In the
year-ago second quarter, the company reported $150.6 million in
sales and a loss per share of ($0.17). PEMSTAR plans to release
actual second quarter 2005 results in the next few weeks.

Mr. Berning said, "Like other players in the electronics
manufacturing services space, we have experienced recent
sluggishness in order levels. The summer can be cyclically slow,
but additionally, spending in the technology sector, particularly
our wireless handset volumes and semiconductor equipment, appears
to have weakened while our customers changed product models during
the September quarter. We can't control general economic
conditions, but we can control how we operate our business.
Therefore, we are taking difficult but essential steps to reduce
our expenses and improve profitability in 2005."

                          About PEMSTAR

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


PLIANT CORPORATION: S&P Puts B+ Rating on CreditWatch Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Pliant
Corporation (B+/Watch Neg/--) on CreditWatch with negative
implications, reflecting concerns about the company's ability to
improve earnings and operating cash flows sufficiently to support
the debt reduction necessary at the current ratings.

"Challenging industry conditions have limited Pliant's ability to
reduce its very high debt leverage this year, and a weaker-than-
expected financial performance during the third and fourth
quarters could result in a downgrade," said Standard & Poor's
credit analyst Liley Mehta.

The company is expected to report its results for the third
quarter ended September 30, 2004, by November 15, 2004.
Schaumburg, Illinois-based Pliant had total debt outstanding of
about $814 million at June 30, 2004.

Increasing raw-material costs -- particularly plastic resins --
arising from a steep oil and natural gas price environment have
pressured Pliant's operating performance in the fragmented and
highly competitive films and flexible packaging industry.
Standard & Poor's is concerned that these issues, which have
resulted in deterioration in the company's already stretched
financial profile, may have persisted through the third quarter.

Lower operating results in the first six months of 2004 compared
to the prior year reflect the impact of increased raw-material
costs in the flexible film and packaging segments and
underperformance in Mexico and in the Pliant Solutions segment.

Management has implemented restructuring actions--including plant
rationalizations and headcount reductions--which are expected to
generate cost savings.  Still, the inability to fully pass
through higher resin costs to customers, coupled with competitive
pricing pressures and downguaging by customers has contributed to
lower operating margins of about 10% in 2004, from the low- to
mid-teens percentage area in 2003.

The company is very aggressively leveraged with total debt --
adjusted for capitalized operating leases -- to EBITDA at about 9x
for the 12 months ended June 30, 2004.  Accordingly, credit
measures are subpar with EBITDA to interest coverage near 1x, and
the company has not generated free cash flows for the past four
years.

At June 30, 2004, Pliant had about $3.7 million in cash and about
$48 million in availability under its new $100 million revolving
credit facility after borrowing base calculations.  Borrowings are
limited to 75% of the revolving credit facility as the company is
not in compliance with the minimum fixed-charge coverage ratio of
1.1x.

Standard & Poor's will meet with Pliant's senior management in the
near future to review the company's prospects, and to determine
the company's strategies, time frame and capacity for achieving
operating improvements that would support management's objective
to reduce debt leverage.

If the company's operating performance weakens and results in
further deterioration of the financial profile or if prospects for
achieving a meaningful turnaround are not greatly improved,
ratings will be lowered.


PMA CAPITAL: Launches Exchange Offer for Convertible Debentures
---------------------------------------------------------------
PMA Capital (NASDAQ:PMACA) is offering to exchange up to
$86,250,000 aggregate principal amount of newly issued 7.50%
Senior Secured Convertible Debentures due 2022 for any and all of
the $86,250,000 aggregate principal amount of its outstanding
4.25% Senior Convertible Debentures due 2022, pursuant to a
Registration Statement on Form S-4 filed on October 1, 2004,
amended on October 5, 2004.

On June 30, 2009, holders of the new debentures will have the
right to require the Company to repurchase for cash any
outstanding new debentures for 114% of the principal amount of the
new debentures plus accrued and unpaid interest, if any, to the
settlement date. Holders of the existing debentures may require
the Company to repurchase their debentures at par for cash or
common stock (at the Company's election) on September 30, 2006,
2008, 2010, 2012 and 2017.

The new debentures will be secured equally and ratably with the
Company's outstanding $57,500,000 principal amount 8.50% Monthly
Income Senior Notes due 2018 by a first lien on 20% of the capital
stock of the Company's principal operating subsidiaries and under
certain conditions an additional pledge of certain capital stock,
but not the net cash proceeds of certain permitted dispositions
(which will be contractually required to be used to make an offer
to repurchase the new debentures).

Accrued and unpaid interest through the settlement date on the
existing debentures that the Company acquires in the exchange
offer will be paid in cash upon settlement. Interest on each new
debenture will accrue from the settlement date.

The new debentures will bear interest at 7.50% payable in cash or
shares of the Company's Class A common stock, at the Company's
election and will be convertible at the rate of 61.0948 shares,
equivalent to an initial conversion price of $16.368 per share of
Class A common stock.

The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Tuesday, November 2, 2004, unless extended. The
Offer is subject to certain conditions including the consent of
the issuing bank under the Company's letter of credit facility.
However, the offer is not subject to a minimum amount of existing
debentures being tendered.

The purpose of the exchange offer is to refinance the existing
debentures by exchanging them for the new debentures with a later
put date and to attempt to improve the insurer financial strength
ratings of The PMA Insurance Group and the debt ratings of PMA
Capital Corporation.

Additional details regarding the Offer are described in the
Amendment No. 1 of Registration Statement filed by the Company
with the Securities and Exchange Commission on October 5, 2004.
Copies of the Prospectus contained in the Registration Statement
may be obtained from the Information Agent for the Offers, Global
Bondholder Services Corporation, at 866-873-7700 (US toll-free)
and 212-430-3774 (collect).

Banc of America Securities LLC is the exclusive dealer manager in
connection with the Offer. Questions regarding the Offer may be
directed to Banc of America Securities LLC, High Yield Special
Products, at 888-292-0070 (US toll-free) and 704-388-4813
(collect) or Equity-Linked Liability Management, at 888-583-8900,
x 2200 (US toll-free) and 212-933-2200 (collect).

A registration statement relating to these securities has been
filed with the Securities and Exchange Commission but has not yet
become effective. These securities may not be sold nor may offers
to buy be accepted prior to the time the registration statement
becomes effective. This press release shall not constitute an
offer to sell or the solicitation of an offer to buy nor shall
there be any sales of these securities in any State in which such
offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any
such State.

PMA Capital Corporation, headquartered in Philadelphia,
Pennsylvania, is an insurance holding company whose operating
subsidiaries provide workers' compensation, integrated disability
and other commercial property and casualty lines of insurance,
primarily in the eastern part of the United States, underwritten
and marketed under the trade name The PMA Insurance Group.


POLYMER RESEARCH: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Polymer Research Corporation of America
        2186 Will Avenue
        Brooklyn, New York 11234

Bankruptcy Case No.: 04-24036

Type of Business:  The company is devoted to research and
                   development utilizing a proprietary process
                   called chemical grafting.  Because of its easy
                   adaptation to a wide variety of areas, chemical
                   grafting can be utilized in many industries
                   including automotive, industrial processing
                   equipment and machinery, consumer products,
                   medical devices and decorative products.
                   See http://www.polymer-ny.com/

Chapter 11 Petition Date: October 1, 2004

Court: Eastern District of New York (Brooklyn)

Judge: Jerome Feller

Debtor's Counsel: Randy M Kornfeld, Esq.
                  Stavis & Kornfeld
                  820 Second Avenue
                  New York, New York 10017
                  Tel: (212) 557-6767
                  Fax: (212) 557-3760

Estimated Assets: $10 Million to $100 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 largest unsecured creditors:

    Entity                                Claim Amount
    ------                                ------------
Signstrut                                     $130,000
c/o Troy Morris Perez & Morris LLC
8000 Ravine's Edge Court
Columbus, Ohio 43235

Anna Dichter                                  $100,000
61 Fox Run Drive
Tewksbury, Massachusetts 01876

Shapiro, Forman Allen & Miller, LLP            $89,000
360 Madison Avenue
New York, New York 10017

Hord Crystal Corporation                       $80,000

The Nordam Group                               $77,000

HYVA International Inc. N.V.                   $63,000

Rockland Inc.                                  $60,000

Wolcott-Park Inc.                              $49,000

Chase Small Business Financial Services        $49,000

Jill B. Oshin, Esq.                            $40,000

American Express Gold                          $25,000

Chase Small Business Financial Services        $24,000

Davis, Malm & D'Agostine                       $21,000

Lobb & Cliff, LLP                              $16,000

American Express Blue                          $14,300

Giffuni & Young, CPA, P.C.                     $13,700

Webster, Webster & Kvale, LLP                  $11,600

LaCourse & Davis, P.L.C.                       $10,700

GM Business Card                               $10,161

Goldstein & Ganz, P.C.                         $10,000


POLYPORE INT'L: Moody's Reviews Ratings for Possible Downgrade
--------------------------------------------------------------
Moody's Investors Service placed all of the ratings for Polypore
Incorporated on review for possible downgrade following the
company's announcement that its ultimate holding company Polypore
International issued $300 million (fully accreted value in October
2008) face amount of senior discount notes.  These notes accrete
at an 11% PIK interest rate during the first four years post-
issuance, and will then be subject to a semiannual cash interest
rate of 10.5% applicable to the fully accreted value.  The
approximately $200 million of discounted proceeds realized upon
issuance of the Holdco Notes will be applied to the redemption of
Holdco's $150 million of preferred stock, with the balance (less
associated fees and expenses) distributed as a dividend to common
shareholders of Holdco.

This rating action notably reverses Moody's previous placement of
Polypore's rating on review for possible upgrade.  Polypore's June
2004 filing of an S-1 registration statement for a proposed
initial public offering for up to $345 million of gross proceeds
by Holdco remains on hold, and the tender offer to purchase up to
$65 million of Polypore's outstanding 8.75% senior subordinated
dollar notes due 2012 and up to Euro 44 million in aggregate
principal amount of its outstanding 8.75% senior subordinated Euro
notes due 2012 expired and was not extended. The balance of the
IPO proceeds had previously been expected to be applied against
the redemption of Holdco's preferred stock, which will instead be
accomplished through application of a portion of the proceeds from
the new Holdco Notes.

The specific ratings for Polypore are now on review for possible
downgrade:

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

         * $90 million revolving credit facility due May 2010;
         * $370 million term loan due November 2011;
         * Euro 36 million term loan due November 2011;

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

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

   -- B2 senior implied rating;

   -- Caa1 senior unsecured issuer rating

Polypore was acquired by affiliates of private equity sponsor
Warburg Pincus approximately five months ago on May 13, 2004. The
sponsor's aggregate initial investment of approximately $321
million consisted of the $150 million of Holdco preferred stock to
be redeemed, plus about $171 million of common equity infused into
Holdco.  These funds were all then downstreamed to Polypore in the
form of common equity, which structure will remain unaffected by
the issuance of the new Holdco Notes.  Since the negative
covenants within Polypore's guaranteed senior secured credit
agreement notably do not incorporate the results of Holdco, and no
changes to Polypore's restricted payments baskets have been
requested to this point, no waivers or amendments of Polypore's
debt agreements were required to complete the Holdco Notes
issuance.

Moody's considers the new $300 million fully accreted value of the
Holdco senior discount notes to have materially increased the
leverage profile of Polypore.  This is the case despite the fact
that Polypore will not directly finance the partial return of
equity capital to Warburg Pincus and additionally that the cash
necessary to cover approximately $31.5 million of annual interest
payments required after the fourth anniversary of the Holdco Notes
may only be upstreamed by Polypore to Holdings to the extent
permitted by restricted payment baskets -- absent future
amendments to Polypore's debt agreements.  In contrast, Moody's
did formerly attribute equity credit to the sponsor's Holdco
preferred stock investment due to the fact that it contained no
built-in rate of return, was structurally subordinated, and was
expected to be redeemable only in the event of an IPO, a sale of
the business, or a liquidation of the company due to the existence
of restrictive covenants within Polypore's debt agreements.

Moody's review for possible downgrade will be concluded and the
Holdco Notes will be rated upon receipt of the comprehensive terms
of Holdco's senior discount notes.  Moody's review will reevaluate
the appropriate senior implied rating and relative notching among
debt facilities.  The senior unsecured issuer rating, which will
be moved up to Holdco due to the issuance of notes at that
organizational level, will reflect a disproportionate adjustment
to its notching relative to Polypore's other ratings.  Moody's
review will incorporate both the impact of changes to the
consolidated capital structure, as well as Polypore's recent
operating performance trends and future prospects.  Moody's rating
conclusion will not factor in potential future proceeds from an
initial public offering, due to the current uncertainty
surrounding the timing and terms of an equity transaction.

Polypore, headquartered in Charlotte, North Carolina, is a leading
worldwide developer, manufacturer and marketer of specialized
polymer-based membranes used in separation and filtration
processes.  The company is managed under two business segments.
The energy storage segment, which currently represents
approximately two-thirds of total revenues, produces separators
for lead-acid and lithium batteries.  The separations media
segment, which currently represents approximately one-third of
total revenues, produces membranes used in various healthcare and
industrial applications.  For the LTM period ended July 3, 2004,
Polypore's revenues approximated $500 million.


QUICK-WRIGHT ELEC'L: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Quick-Wright Electrical Distributors, Inc.
        dba Quick-Wright Associates, Inc.
        150 Cooper Road #C-7
        West Berlin, New Jersey 08091

Bankruptcy Case No.: 04-41441

Type of Business: The Company is an integrated supplier of
                  materials and services to the electric utility,
                  defense contract, rail transit and industrial
                  markets. Value-added services include custom
                  kitting, bin restocking, electromechanical
                  assembly, and product modifications.
                  See http://www.qwa.com/

Chapter 11 Petition Date: October 1, 2004

Court: District of New Jersey (Camden)

Judge: Gloria M. Burns

Debtor's Counsel: Arthur Abramowitz, Esq.
                  Cozen O'Connor
                  Libertyview Building, Suite 300
                  457 Haddonfield Road
                  Cherry Hill, New Jersey 08002
                  Tel: (856) 910-5000

Total Assets: $1,023,647

Total Debts:  $1,165,548

Debtor's 20 largest unsecured creditors:

    Entity                        Nature Of Claim   Claim Amount
    ------                        ---------------   ------------
Graybar Electric                  Trade debt            $306,129
12440 Collection Center Drive
Chicago, Illinois 60693

Performance Pipe                  Trade debt            $104,059
PO Box 98204
Chicago, Illinois 60693

Grace Construction Products       Trade debt             $96,383
W.R. Grace & Co. Conn
PO Box 96160
Chicago, Illinois 60693

York Electro Mechanical           Trade debt             $49,950
120A Rose Court
York, Pennsylvania 17402

Barnes Distribution               Trade debt             $40,723

Dossert Corporation               Trade debt             $31,858

Spiratex Company                  Trade debt             $25,652

East Penn Manufacturing Co. Inc.  Trade debt             $24,664

Vari Fasteners, Inc.              Trade debt             $23,915

Allied Electronics, Inc.          Trade debt             $17,997

Cooney Brothers Inc.              Trade debt             $17,835

Stanley Vidmar                    Trade debt             $14,928

DMI Inc.                          Trade debt             $12,096

Peachtree Industries, Inc.        Trade debt             $11,865

Elasco Inc.                       Trade debt             $11,175

RJM Sales, Inc.                   Trade debt             $10,869

Catalina Instrument Corporation   Trade debt             $10,234

Objective Systems, Inc.           Trade debt              $9,100

3D Instruments                    Trade debt              $9,000

Mer Corporation                   Trade debt              $9,000


RBTT FINANCIAL: Fitch Affirms 'BB+' Foreign Currency Ratings
------------------------------------------------------------
Fitch Ratings has affirmed RBTT Financial Holdings Limited's Long-
term foreign currency rating of 'BB+' and the Rating Outlook is
revised to Stable from Negative.  Concurrently, Fitch has affirmed
RBTT Bank Limited's Long-term foreign currency rating of 'BBB-',
and the Rating Outlook remains Stable.

A list of ratings is provided at the end of this press release.
The revision of Rating Outlook is reflective of improved asset
quality, as nonperforming assets have declined in several of RBTT
Financial Holdings Limited's markets outside of Trinidad and
Tobago.

The improvement in asset quality is due in part to more stable
economic conditions and enhanced credit risk management
initiatives, which include a more aggressive stance toward
charging off problem loans and strengthening reserve coverage of
nonperforming assets.  That said, nonperforming assets in
subsidiaries outside of Trinidad and Tobago still account for a
disproportionate portion of total nonperforming assets.

RBTT Financial's acquisition-led regional expansion provides
geographic diversity and additional opportunities for earnings
growth, but it also leaves the company more exposed to sovereign
and operating risks emanating from small and volatile economies.
This added risk related to regional operations and the stronger
Support rating assigned to RBTT Bank Limited are the rationale for
the differential of ratings between the RBTT Group and its
Trinidad and Tobago-based lead bank.

In addition to solid earnings, asset quality has remained
relatively stable at RBTT Bank Limited.  However, sizable single
name exposures subject RBTT Bank Limited to potential event risk.

Overall, RBTT Financial's ratings continue to take into account
the company's earnings power.  RBTT Financial's capital ratios
have been pressured by the balance sheet growth of the past few
years but are in line with its rating category.  Furthermore,
short-term deposits are the norm in RBTT Financial's markets,
which contributes to the persistent duration mismatch in assets
and liabilities.  However, these deposits have historically been
stable.

RBTT Financial Holdings Limited is a financial services
conglomerate consisting of 35 subsidiaries and associated
companies located in 12 legal jurisdictions in the Caribbean
region, including 10 licensed commercial banks with 84 branches.
The group's major subsidiaries include RBTT Bank Limited and RBTT
Merchant Bank Limited, a leading regional merchant bank.

RBTT Financial Holdings Limited:

     --Long-term foreign currency 'BB+';
     --Short-term foreign currency 'B';
     --Individual 'C/D';
     --Support '5';
     --Outlook to Stable from Negative.

RBTT Bank Limited:

     --Long-term foreign currency 'BBB-';
     --Short-term foreign currency 'F3';
     --Individual 'C';
     --Support '3';
     --Outlook Stable.


RCN CORP: ESOP Representative Balks at Disclosure Statement
-----------------------------------------------------------
Debra K. Craig argues that RCN Corporation and its debtor-
affiliates' Disclosure Statement fails to provide adequate
information.  Ms. Craig, as participant representative of the RCN
Savings and Stock Ownership Plan, complains that the Disclosure
Statement does not enable her and other similarly situated
creditors to make informed judgments about the Debtors' Plan of
Reorganization.

Ronen Sarraf, Esq., at Sarraf Gentile, LLP, in New York, tells
the Court that the Disclosure Statement fails to disclose:

   (a) the existence of claims or potential claims against the
       Debtors by the Savings Plan and its participants and
       beneficiaries;

   (b) that no steps have been taken by RCN Corporation, as a
       fiduciary of the Savings Plan, to protect and provide for
       the payment of the claims under the Reorganization Plan;

   (c) whether Ms. Craig's claim is covered by fiduciary
       insurance, the amounts of any insurance coverage, and
       whether the Reorganization Plan is intended to adversely
       affect claims against any insurance coverage;

   (d) whether the Reorganization Plan will release or bar Ms.
       Craig's breach of fiduciary duty claims under the ERISA
       against non-debtors, including present or former RCN
       employees who performed fiduciary functions with respect
       to the Savings Plan;

   (e) whether RCN Corp. has already or intends to engage in
       transactions prohibited by the ERISA, and is conflicted in
       doing so in causing the discharge or release of the
       claims; and

   (f) other material information about the bar date and the
       Reorganization Plan.

According to Mr. Sarraf, the Disclosure Statement is misleading
in that it states that the bar date for filing claims was
August 11, 2004.  This is misleading insofar as it relates to the
Savings Plan because governmental agencies have until
November 24, 2004, to file a claim.  Under the ERISA, the U.S.
Secretary of Labor could file a claim on behalf of the Savings
Plan for the benefit of participants and beneficiaries.  This
fact was not disclosed in the Disclosure Statement or the
Reorganization Plan.

Mr. Sarraf relates that RCN Corp. sponsored the Savings Plan.
RCN Corp. served as the Savings Plan administrator and a
designated fiduciary of the Plan.  Among the investment options
offered by the Savings Plan was the RCN Common Stock Fund, which
invested principally in RCN Common Stock.  Nearly all of RCN
Corp.'s matching contributions to the Savings Plan were in RCN
Common Stock.

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 on May 27, 2004 (Bankr. S.D.N.Y. Case No.
04-13638).  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. 12; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


REVCON MOTORCOACH: Case Summary & 18 Largest Unsecured Creditors
----------------------------------------------------------------
Lead Debtor: Revcon Motorcoach, Inc.
             17672-B Cowan
             Irvine, California 92614

Bankruptcy Case No.: 04-44836

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      Two Springs Membership Club                04-44837

Chapter 11 Petition Date: October 4, 2004

Court: Northern District of Ohio (Youngstown)

Judge: Kay Woods

Debtors' Counsel: Richard G. Zellers, Esq.
                  3810 Starrs Centre Drive
                  Canfield, OH 44406
                  Tel: 330-702-0780

                                    Total Assets   Total Debts
                                    ------------   -----------
Revcon Motorcoach, Inc.               $2,800,000    $5,025,137
Two Springs Membership Club           $2,950,000    $1,336,472

A. Revcon Motorcoach, Inc.'s 7 Largest Unsecured Creditors:

   Entity                              Claim Amount
   ------                              ------------
Coast to Coast/Affinity Group            $3,880,039
c/o Michael A. Sherman, Esq.
2049 Century Park East 39th Fl.
Los Angeles, CA 90067

Miles P. Shook                             $980,000
c/o Appel & Appel
12341 Newport Ave. Ste B-100
Santa Ana, CA 92705

Internal Revenue Service                    $65,215

California Dept. of Taxation                $38,169

Guardian Publishing                         $32,000

Von Der Ahe Partners                        $25,000

WebCasting Sales                             $4,714

B. Two Springs Membership Club's 11 Largest Unsecured Creditors:

   Entity                              Claim Amount
   ------                              ------------
Riverside County                           $229,815

Guardian Publishing                         $58,200

SoCal Edison                                $25,000

Riverside County                            $19,048

Internal Revenue Service                    $15,841

Mackenzie Wagner & Associates                $4,630

California Dept. of Taxation                 $2,333

Desert Valley Disposal                         $764

Verizon                                        $426

Waste Management of the Desert                 $307

The Gas Company                                $108


RIVERSIDE FOREST: Adopts Limited Duration Shareholder Rights Plan
-----------------------------------------------------------------
In response to a petition filed in the British Columbia Supreme
Court by Tolko Industries late Friday afternoon, the Board of
Directors of Riverside Forest Products Limited (TSX:RFP) has
approved the adoption, subject to regulatory approval, of a
limited duration shareholder rights plan.

The Limited Duration Plan was adopted as a precautionary measure,
to protect shareholders' interests if Tolko's technical objection
to Riverside's existing shareholder rights plan prevails. The
Limited Duration Plan will come into effect only if the existing
rights plan is nullified by the Court, either at the hearing
scheduled on Oct. 5 or at some other time.

The purpose of the Limited Duration Plan is to give Riverside's
shareholders the benefits afforded by the existing rights plan, by
encouraging the fair treatment of Riverside shareholders,
providing them with time to consider the alternatives before them,
and discouraging creeping take-overs.

The Limited Duration Plan will automatically terminate on the
earlier of 180 days after the date of its adoption or the date on
which an acquirer owns at least 50.1% of Riverside's shares after
taking up shares pursuant to a formal take-over bid for all of
Riverside's shares made in compliance with Canadian securities
laws.

"[Monday] we announced a clearly superior alternative transaction
that provides Riverside shareholders the opportunity to receive
significant near-term value, plus an ongoing equity stake in what
will be the world's seventh-largest lumber company," said Gordon
W. Steele. "Tolko's attempt to undo a shareholder rights plan
overwhelmingly approved by Riverside's shareholders in 2000 and
reconfirmed in 2003 is designed to frustrate shareholders' ability
to accept the superior Interfor offer and to pave the way for a
creeping take-over by Tolko. The Limited Duration Plan approved by
our Board today ensures that all of Riverside's shareholders will
be treated equally and that they will have the final say on the
outcome of this process."

Pursuant to the Limited Duration Plan, rights are issued and
attached to all Riverside common shares. A separate rights
certificate will not be issued until such time as the rights
become exercisable (which is referred to as the "Separation
Time"). Subject to the right of the Board of Directors to defer
the Separation Time, the rights will become exercisable only if a
person, together with its affiliates, associates and joint actors,
acquires or announces its intention to acquire beneficial
ownership of shares which, when aggregated with its current
holdings, total 20% or more of the outstanding Riverside shares
(determined in the manner set out in the Rights Plan). The Board
of Directors has deferred the Separation Time under the Limited
Duration Plan and Riverside's original rights plan until a date to
be determined by the Board in the future.

Following an acquisition of shares otherwise prohibited by the
Limited Duration Plan, each right held by a person other than the
acquiring person and its affiliates, associates and joint actors
would, upon exercise, entitle the holder to purchase Riverside
shares at approximately a 45% discount to their then-current
market price.

Riverside Forest Products Limited is the fourth largest lumber
producer in British Columbia with over 1.0 Bbf of annual capacity
and an annual allowable cut of 3.1 million cubic metres. The
company is also the second largest plywood and veneer producer in
Canada.

                          *     *     *

As reported in the Troubled Company Reporter on August 27, 2004,
Standard & Poor's Ratings Services placed its 'B+' long-term
corporate credit and senior unsecured debt ratings on Kelowna,
B.C.-based Riverside Forest Products Ltd. on CreditWatch with
developing implications following the company's announcement that
it would reject an unsolicited takeover offer from privately held
Tolko Industries Ltd.


SPIEGEL INC: Settles Claim Disputes with America Online
-------------------------------------------------------
On May 23, 2003, Spiegel, Inc., and its debtor-affiliates each
filed its Schedules of Assets and Liabilities.  America Online,
Inc., is scheduled to have general unsecured non-priority claims
for:

    -- $244,570 against Spiegel Catalog, Inc.;
    -- $22,303 against Eddie Bauer, Inc.; and
    -- $241,557 against Newport News, Inc.

On September 30, 2003, America Online filed:

    Claim No.   Debtor                   Claim Amount
    ---------   ------                   ------------
       2765     Spiegel Catalog            $259,488
       2766     Eddie Bauer                  24,500
       2767     Newport News                221,655

The Debtors reviewed their books and records and found that
America Online has general unsecured non-priority claims against:

    Debtor                   Claim Amount
    ------                   ------------
    Spiegel Catalog            $244,570
    Eddie Bauer                  10,833
    Newport News                212,928

The Debtors and America Online have engaged in good-faith
discussions.  The parties stipulate that:

    (1) America Online's Claim No. 2765 is fixed and allowed as a
        general unsecured non-priority claim against Spiegel
        Catalog for $244,570;

    (2) America Online's Claim No. 2766 is fixed and allowed as a
        general unsecured non-priority claim against Eddie Bauer
        for $10,833; and

    (3) America Online's Claim No. 2767 is fixed and allowed as a
        general unsecured non-priority claim against Newport News
        for $212,928.

Headquartered in Downers Grove, Illinois, Spiegel, Inc. --
http://www.spiegel.com/-- is an international general merchandise
and specialty retailer that offers apparel, home furnishings and
other merchandise through catalogs, e-commerce sites and
approximately 560 retail stores.  The Company filed for Chapter 11
protection on March 17, 2003 (Bankr. S.D.N.Y. Case No. 03-11540).
James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq., at Shearman
& Sterling, represent the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed $1,737,474,862 in assets and $1,706,761,176 in debts.
(Spiegel Bankruptcy News, Issue No. 32; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


SUMMIT PROPERTIES: Moody's Puts Ba1 Rating on Sr. Unsecured Debt
----------------------------------------------------------------
Moody's Investor Service placed the Ba1 senior unsecured debt
rating for Summit Properties Partnership, LP under review for
possible upgrade.  According to Moody's, this review is prompted
by the announcement that Summit Properties, Inc and Camden
Property Trust [NYSE: CPT] have agreed to merge.  As part of this
transaction, Summit's shareholders will be able to select either
cash or 0.6687 of Camden shares subject to limit of $434.4 million
in cash and approximately 14 million shares.  The total
transaction size is expected to be approximately $1.9 billion.
Camden Properties is rated Baa2, with a stable outlook.

In its review, Moody's will focus on the pro forma legal structure
of Camden, Summit's position in that structure, as well as the
nature and extent of any guarantee or other support for Summit's
rated securities that will be provided by Camden.

The ratings were placed under review for possible upgrade:

   * Summit Properties Partnership L.P. -- senior unsecured debt
     at Ba1.

   * Summit Properties, Inc. -- preferred stock shelf at (P)Ba2.

Summit Properties, Inc. [NYSE: SMT] is headquartered in Charlotte,
North Carolina, USA.  Summit Properties is a real estate
investment trust that focuses on the operation, development and
acquisition of luxury apartment communities.  As of June 30, 2004,
the REIT owned or held an ownership interest in 52 communities
comprised of 16,000 apartment homes, with an additional 1,715
apartment homes under construction in four new communities.
Summit Properties reported assets of $1.43 billion and equity of
$458 million at June 30, 2004.


THORNBURG MORTGAGE: Fitch Assigns Low-B Ratings to 2 Classes
------------------------------------------------------------
Fitch rates Thornburg Mortgage Securities Trust's $1.25 billion
mortgage loan pass-Through Certificates, Series 2004-3:

     -- $1.21B classes A and A-X certificates (senior
        certificates) 'AAA';

     -- $16.3 million class B-1 certificates 'AA';

     -- $9.4 million class B-2 certificates 'A';

     -- $4.4 million class B-3 certificates 'BBB';

     -- $3.8 million class B-4 certificates 'BB';

     -- $1.9 million class B-5 certificates 'B'.

The 'AAA' ratings on senior certificates reflect the 3.15%
subordination provided by the:
          * 1.30% class B-1,
          * 0.75% class B-2,
          * 0.35% class B-3,
          * 0.30% privately offered class B-4 certificates,
          * 0.15% privately offered class B-5 certificates and
          * 0.30% privately offered class B-6 certificates.

The ratings on class B-1, B-2, B-3, B-4 and B-5 certificates
reflect each certificates' respective level of subordination.

The ratings also reflect the quality of the underlying mortgage
collateral, the master servicing capabilities of
Wells Fargo Bank, N.A. rated 'RMS1' by Fitch and Fitch's
confidence in the integrity of the legal and financial structure
of the transaction.

The mortgage pool consists of 2,599 conventional, hybrid and
adjustable-rate, first lien, mortgage loans on one- to four-
family residential properties, with an aggregate principal balance
of $1,255,932,698 as of the cut-off date.

Approximately 93.80% of the loans require an interest-only payment
during the initial years after origination ranging from one to ten
years.  The mortgage pool has a weighted average original loan-to-
value ratio of 69.09%.  The weighted average FICO score of the
pool is 739.

Loans originated under a reduced loan documentation program
account for approximately 6.2% of the pool, cash-out refinance
loans account for 23.57%, second homes account for 15.91%, and
investment properties account for 11.43%.  The average loan
balance of the pool loans is $483,237.

The three states that represent the largest geographic
concentration of the mortgaged properties are:
          * California (28.40%),
          * Florida (11%), and
          * New York (7.60%).

Structured Asset Securities Corporation, deposited the loans in
the trust, which issued the certificates, representing undivided
beneficial ownership in the trust.  Approximately 13.21%, 9.82%,
5.93% and 5.13% of the mortgage loans were originated by First
Republic Bank, Thornburg Mortgage Home Loans, Inc., Colonial
National Mortgage and First Horizon Home Loan Corporation,
respectively.

For federal income tax purposes, elections will be made to treat
the trust fund as one or more real estate mortgage investment
conduits -- REMICs.  Deutsche Bank National Trust Company will act
as Trustee and Wells Fargo Bank, N.A. will act as securities
administrator for the trust.

The trust will enter into four swap agreements with Cooperatieve
Centrale Raiffeisen-Boerenleenbank B.A., generally known as
'Rabobank Nederland', to protect against certain interest rate
risk.  The ratings do not address the likelihood that any
available funds cap shortfall amount will be repaid to the holders
of the certificates.

None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws.  For additional information on
Fitch's rating criteria regarding predatory lending legislation,
please see the press release issued
May 1, 2003, entitled 'Fitch Revises Rating Criteria in Wake of
Predatory Lending Legislation,' available on the Fitch Ratings web
site at http://www.fitchratings.com/


TSI TELSYS: Appoints Michael Gorham VP-Business Devt. & Operations
------------------------------------------------------------------
TSI TelSys Inc., the operating subsidiary of TSI TelSys
Corporation, has appointed Michael A. Gorham as Vice President of
Business Development and Business Operations, subject to TSX
Venture Exchange approval.

As Vice President of Business Development and Business Operations,
Mr. Gorham will be responsible for the development of new business
opportunities, strategies and tactics; and the booking of these
business opportunities through the award of a contract. He will be
responsible for the continued growth of TSI's business base and
the successful operational performance of all contracts.

His professional career has focused on building and growing
companies in the information technology services arena. Most
recently, Mr. Gorham held senior management positions with
Enterprise Information Management, Inc. in both the Content
Management, and Corporate Marketing Groups. Previously, he was the
Vice President of Business Development for Integrated Technology
Solutions, Inc. and served as Senior Manager of Business
Development for Raytheon Company/ITS. Mr. Gorham holds a B.S. from
the University of Maryland.

Headquartered in Columbia, Maryland, TSI TelSys design,
manufactures and markets high-performance data acquisition,
simulation and communication systems for the aerospace industry
and provides related engineering services.  The Company has been a
pioneer in utilizing reconfigurable architectures (Adaptive
Computing) for communications and data processing, and has
incorporated this technology into its product line since 1996. The
Company is a leader in providing multi-mission satellite
communications systems adaptable to virtually any protocol format
and that support data rates up to a gigabit
per second (Gbps).

At June 25, 2004, TSI TelSys' balance sheet shows a C$1,755,316
deficit, compared to a C$1,145,834 deficit at December 26, 2003.


UAL CORP: Inks New Power Agreement After Rejecting Dynegy Pact
--------------------------------------------------------------
In April 2002, UAL Corp. and its debtor-affiliates entered into a
35-month Retail Power Sales Agreement with Dynegy Energy Services,
Inc., an alternative retail electric supplier certified by the
Illinois Commerce Commission.  Under the Agreement, the Debtors
purchased their electricity requirements for all owned and leased
properties in Illinois.  The Agreement utilized a two-tier pricing
schedule that saved the Debtors $3,000,000 over its duration.  The
Debtors purchased energy at the applicable wholesale price in
effect at the time the Agreement was executed.

The Debtors evaluated the Agreement in the context of the
Bankruptcy Code.  Due to the Agreement's high costs relative to
current market prices for electricity, the Agreement burdened the
Debtors' estate.  Accordingly, the Debtors sought and obtained
the Court's authority to reject the Agreement.

Judge Wedoff also authorizes the Debtors to enter into a new
electric energy services agreement with Constellation NewEnergy.
The New Agreement will be based on an electricity price that is
significantly lower than that used in the Dynegy Agreement.  The
Debtors will save $670,000 through May 2005 and $1,600,000 from
June 2005 through December 2006.

The Debtors also received permission to file the Agreements under
seal.  The Debtors want to preserve the confidentiality of the
pricing and other terms of the Agreements.

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


US AIRWAYS: Pilot Leaders Send Pact for Members' Ratification Vote
------------------------------------------------------------------
The US Airways pilots governing body, as represented by the Air
Line Pilots Association, International (ALPA), voted to send the
Transformation Plan tentative agreement, reached last week between
ALPA and US Airways management, to their pilot membership for a
ratification vote. If this agreement is ratified by the pilot
group, it will provide the airline with the necessary elements
required to successfully implement US Airways' Transformation
Plan.

"We did not enter into these negotiations with the company without
giving careful consideration to the consequences of further pilot
concessions. To approve concessions of this magnitude, while
acknowledging the burden the pilots would have to shoulder in
approving them, signifies our commitment to address the serious
financial problems that US Airways faces. This agreement provides
us with the means to survive, emerge from bankruptcy as a
formidable competitor, and ultimately prosper in even the most
challenging of economic environments. We have again stepped up to
save this company so that it can emerge from bankruptcy and
demonstrate sustained profitability," said MEC Chairman Captain
Bill Pollock.

The provisions of this tentative agreement contain an 18% pay cut,
a decrease in the company's contributions to the pilots' defined
contribution plan, and a modification of work rules that will
significantly increase pilot productivity. The TA also offers
returns for the pilots, including a profit sharing plan and equity
participation shares.

"The US Airways pilots have committed more than $5 billion through
previous restructuring efforts through 2008, including the
termination of the pilots' defined benefit pension plan during our
prior bankruptcy. This new agreement will provide an additional
$1.8 billion through 2009, bringing the total pilot cost savings
to nearly $7 billion. The future of this pilot group and perhaps
that of our airline is right where it ought to be, in the hands of
the US Airways pilots," said Captain Jack Stephan, spokesman for
the US Airways ALPA pilots.

ALPA is the world's oldest and largest pilot union, representing
64,000 airline pilots at 42 airlines in the U.S. and Canada.
ALPA's website is http://www.alpa.org/

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). Brian P.
Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq.
at Arnold & Porter LLP, and Lawrence E. Rifken, Esq. and Douglas
M. Foley, Esq. at McGuireWoods LLP represent the Debtors in its
restructuring efforts. 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: Airports Want Court to Deny Use of Cash Collateral
--------------------------------------------------------------
The Denver International Airport, owned and operated by the City
and County of Denver, the City and County of San Francisco, on
behalf of the San Francisco Airport Commission, and the City of
Charlotte, the owner and operator of the Charlotte-Douglas
International Airport, object to US Airways and its debtor-
affiliates' use or further pledge of cash collateral to the extent
that the cash collateral includes the Airports' Passenger Facility
Charges.

The Debtors are required to collect and remit Passenger Facility
Charges to the Airports.  PFCs are included in the price travelers
pay for tickets and amount to $4.50 per ticket at DIA and SFO, and
$3.00 per ticket at Charlotte.  The proceeds are used by the
Airports for airport development.  Under the PFC regulatory
scheme, PFCs are trust funds collected by the Debtors and their
agents, and held for the benefit of the Airports.

The Debtors use the DIA, SFO and CLT Airport facilities in the
operation of their business, namely:

   (a) runways for landing and taking off their passenger
       aircraft;

   (b) terminal space, including gates, offices, baggage and ramp
       areas;

   (c) non-terminal space, cargo areas and aircraft parking
       spaces; and

   (d) airport equipment, including common use baggage handling
       equipment and check-in equipment.

On a monthly basis, the Debtors incur these charges at DIA:

     * $480,000 in rent and landing fees; and
     * $170,000 in Passenger Facility Charges.

On a monthly basis, the Debtors incur these charges at SFO:

     * $300,000 in rent and services;
     * $175,000 in landing fees; and
     * $259,000 in Passenger Facility Charges.

Douglas W. Jessop, Esq., at Jessop & Company, in Denver, Colorado,
tells Judge Mitchell that the Debtors currently owe SFO $259,000
for prepetition rent and services, $175,000 for airport landing
fees and $169,000 for PFCs.

The Airports ask the Court to deny the Debtors' request to use
cash collateral if the cash collateral includes the PFC trust
funds.  The Airports further want the Debtors to segregate and
remit the PFCs.

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).  Brian P.
Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq.,
at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas
M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in
their restructuring efforts.  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. 66;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


W.E. GARRISON CO: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: W.E. Garrison Company, Inc.
        fka W.E. Garrison Grading Company
        P.O. Box 68
        Garner, North Carolina 27603

Bankruptcy Case No.: 04-03582

Type of Business: The Debtor is a highway, utility and site
                  preparation contractor, with its principal
                  place of business located in Wake County.

Chapter 11 Petition Date: October 4, 2004

Court: Eastern District of North Carolina (Raleigh)

Judge: A. Thomas Small

Debtor's Counsel: Trawick H. Stubbs, Jr., Esq.
                  Stubbs & Perdue, P.A.
                  P.O. Drawer 1654
                  New Bern, NC 28563
                  Tel: 252 633-2700

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                                 Claim Amount
------                                 ------------
Internal Revenue Service                  $319,184
Attn: Insolvency I
320 Federal Place
Greensboro, NC 27402

Barnhill Contracting Co.                   $100,669
Attn: Manager or Agent
P.O. Box 30097
Raleigh, NC 27622

Citicapital                                 $87,679

Traffic Control Devices                     $85,555

Safran Law Offices                          $76,215

NC Dept. of Revenue                         $68,871

TEC Utilities Supply Inc.                   $52,099

Berkshire Hathaway                          $49,231

Carolina Sunrock LLC                        $36,678

Delta Contraction, Inc.                     $28,344

Rian's Paving, Inc.                         $22,100

Reynolds Fence & Guardrail                  $19,347

Martin Marrieta Materials                   $15,022

Wake County Tax Collector                   $14,943

Briggs Construction Equip.                  $14,920

JC Edwards, Inc.                            $12,804

REA Contracting LLC                         $11,720

Nextel Communications                       $10,383

Wachovia Platinum Plus                       $9,601

Surplus Tire Company, Inc.                   $9,040


WAVEFRONT ENERGY: Discloses 520,000 Incentive Stock Options Grant
-----------------------------------------------------------------
Wavefront Energy and Environmental Services Inc. (TSX-V: WEE),
will file, in accordance with TSX Venture Exchange policy, a
Summary Form disclosing the granting of an aggregate of 520,000
incentive stock options pursuant to the Company's Stock Option
Plan. The options granted will be to insiders and will be
exercisable at a price of $0.45 per share, for a period of five
years. The options are subject to a hold period of 4 months and
vesting period of 18 months, in accordance with the Company's
Stock Option Plan and Exchange policy.

                        About the Company

Wavefront develops, markets, and licenses proprietary technologies
in the energy and environmental sectors. The company's Pressure
Pulse Technology for fluid flow optimization has been demonstrated
to increase oil recovery. Within the environmental sector, PPT
accelerates contaminant recovery and improves in-ground treatment
of groundwater contaminants thereby reducing liabilities and
restoring the site to its natural state more rapidly.  Wavefront
trades on the TSX Venture Exchange under the symbol WEE and the
Company's website is http://www.onthewavefront.com/

At May 31, 2004, Wavefront Energy and Environmental Services
Inc.'s balance sheet showed a $288,939 stockholders' deficit, and
a $1,368,845 net loss in May 2004.


WMG ACQUISITION: $350 Million ROI Cues S&P to Affirm B+ Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating for WMG Acquisition Corporation, following WMG's
announcement of a $350 million return of capital, funded with
excess cash.

The outlook is stable.  Pro forma for the distribution, New York,
New York-based music recording and publishing company WMG will
have about $1.85 billion of gross debt.

"The affirmation recognizes that WMG's leverage and liquidity
profile continue to be in line with the 'B+' rating after the $350
million return of capital," said Standard & Poor's credit analyst
Alyse Michaelson.

Excess liquidity resulting from improving operations, lower
restructuring charges, and reduced working capital needs is being
used to fund the return of capital.  While the cash distribution
does not materially impact WMG's key credit ratios or liquidity
position as compared with the assumptions used when the rating was
initially assigned, it is indicative of the company's shareholder
return orientation and does reduce the total liquidity that would
otherwise have been in place.

The rating on WMG reflects its heavy debt burden as a result of
the leveraged buyout from Time Warner Inc. by an investor group in
February 2004; risks associated with the industry's migration to a
digital downloading business model and leakage to piracy; and
concerns regarding the extent of cost-downsizing that will be
required as the migration continues.

These risks are only partially offset by the higher margins and
greater stability of WMG's music publishing business, which
accounted for about one-third of EBITDA in 2003 (pro forma for the
sale of music manufacturing and distribution).

WMG's industry-leading music publishing and recorded music
catalogs are both important sources of continuing revenues.  Other
factors supporting the rating include a management team that has
experience in cost restructuring, and important progress made by
the industry in 2003 and 2004 in combating piracy and adopting a
legitimate commercial digital platform.

The stable outlook reflects Standard & Poor's assumptions about
management's ability to complete its cost restructuring plan and
the adequacy of cost reductions in a moderately declining revenue
scenario.

The outlook could be revised to negative if either premise proves
too optimistic.  Revision of the outlook to positive from stable
will depend on more convincing indications that electronic piracy
is slowing without damaging margins, continuation of the current
uptick in CD sales, debt repayment proceeding on schedule, and
Standard & Poor's comfort level that return of capital or
distributions are not recurring.


WORLDGATE COMMS: Will Meet with Stockholders on Oct. 13
-------------------------------------------------------
The Annual Meeting of stockholders of WorldGate Communications,
Inc., will be held at the Holiday Inn Select, 4700 Street Road,
Trevose, PA 19053, on October 13, 2004, at 9:30 AM EDT, for the
following purposes:

   1. To elect six directors;

   2. To ratify and approve the Company's issuance of common
      stock in accordance with the terms of the June 2004
      private placement to certain institutional investors of
      $7.55 million in securities;

   3. To amend the Company's Certificate of Incorporation to
      increase the authorized shares of the Company's common
      stock from 50 million to 80 million.

   4. To ratify and approve the Company's 2003 equity incentive
      plan; and

   5. To transact other such business as may properly come
      before the Meeting or any adjournment thereof.

Holders of record of common stock of the Company at the close of
business on Aug. 27, 2004, are entitled to notice of, and to vote
at, the Meeting or any adjournment thereof.

                        About the Company

WorldGate Communications, Inc., develops, manufactures and
distributes video phones for personal and business use, to be
marketed with the Ojo brand name. The Ojo video phone is designed
to conform with industry standard protocols, and utilizes
proprietary enhancements to the latest technology for voice and
video compression. Ojo video phones are designed to operate on the
high speed data infrastructures provided by cable and DSL
providers. WorldGate has applied for patent protection for its
unique technology and techno-futuristic design that contribute to
the functionality and consumer appeal offered by the Ojo video
phone. WorldGate believes that this unique combination of design,
technology and availability of broadband networks allow for real
life video communication experiences that were not economically or
technically viable a short time ago.

                          *     *     *

As reported in the Troubled Company Reporter's April 6, 2004,
edition, Worldgate's independent certified public accountant,
Grant Thornton LLP, issued such a going-concern qualification on
the financial statements of the Company for the fiscal year ending
December 2003, based on the significant operating losses and
accumulated deficiency reported for the fiscal year ended
December 31, 2003. PricewaterhouseCoopers LLP, the Company's
previous auditors, had also issued a going-concern qualification
for the 2002 fiscal year.


ZENITH NATIONAL: S&P Affirms BB+ Counterparty Credit Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services revised its ratings outlook on
Zenith National Insurance Corporation and its operating
subsidiaries to stable from negative.

At the same time, Standard & Poor's affirmed its 'BB+'
counterparty credit rating on Zenith and affirmed its 'BBB+'
counterparty credit rating and financial strength rating on
subsidiaries Zenith Insurance Company and ZNAT Insurance Co.

"The outlook revision is based on significantly improving
operating results, a good competitive position in the workers'
compensation segment, a sound and disciplined operational
strategy, and strong capital adequacy," explained Standard &
Poor's credit analyst Steven Ader.

"Offsetting these strengths are historically poor operating
results, a concentrated competitive position in the historically
volatile workers' compensation industry segment, and the increased
risk presented by the similarly volatile catastrophe reinsurance
business," Mr. Ader added.

Operating performance, benefiting from currently adequate rates
and loss cost reform in California and Florida, is expected to
remain at very strong levels through 2005 with a combined ratio in
the workers' compensation segment of less than 93%.

Performance beyond 2005 will be dependent on the full effect of
these reforms and the pricing response of competitors that are not
readily measurable at this time.  Capital adequacy, supported by
organic capital growth from the retention of earnings, is expected
to remain at more than 135%, a strong level.

Financial leverage and fixed-charge coverage, reflecting the very
strong earnings stream through 2005, are expected to improve to
about 30% and more than 10x respectively.


* Kamakura Says US Corp. Credit Quality Continues Decline in Sept.
------------------------------------------------------------------
Kamakura Corporation reported that its monthly index of troubled
companies in the United States jumped 0.4% in September to 14.4%
of the public company universe. Kamakura classifies any company
with a default probability of more than one percent as troubled.
The September level reflects an increase in the number of troubled
public companies of almost 30 percent since the troubled company
index hit a low of 11.1% in April 2004.

"September saw still another deterioration in the credit quality
of public companies in North America," commented Dr. Donald R. van
Deventer, Kamakura Chairman and Chief Executive Officer. "The
number of companies with default probabilities between 1% and 5%
increased to 8.3% of the universe from 7.9% in August. Companies
with default probabilities between 5 and 10% increased from 2.2%
of the universe of public companies to 2.4%, while companies in
higher risk categories remained essentially unchanged. It is now
quite clear that the second quarter represented the peak in credit
quality for this credit cycle, and we anticipate a further decline
in credit quality in the months ahead."

Kamakura is offering free trials of its KRIS default probability
service to qualified institutions. For more information on
Kamakura's free trial offer please contact Kamakura at
info@kamakuraco.com

More information can also be found on the Kamakura Corporation web
site http://www.kamakuraco.com/and in Advanced Financial Risk
Management (John Wiley & Sons, 2004) by Kamakura's van Deventer,
Kenji Imai, and Mark Mesler (available on http://www.amazon.com/

                   About Kamakura Corporation

Kamakura Corporation is a leading provider of risk management
information, processing and software. Kamakura has been a provider
of daily default probabilities for listed companies since
November, 2002. Kamakura launched its private firm modeling
product in January 2004. Kamakura is also the first company in the
world to develop and install a fully integrated credit risk,
market risk, asset and liability management, and transfer pricing
system. Kamakura has clients ranging in size from $3 billion in
assets to $1 trillion in assets. Kamakura's risk management
software is currently used in the United States, Germany, Canada,
the United Kingdom, Australia and many countries in Asia.

Kamakura's research effort is led by Professor Robert Jarrow, who
was named Financial Engineer of the Year in 1997 by the
International Association of Financial Engineers. Professor Jarrow
and Dr. van Deventer were both named to the 50 member RISK Hall of
Fame in December 2002. Kamakura management has published twenty-
one books and more than 100 publications on credit risk, market
risk, and asset and liability management. Kamakura has world-wide
distribution alliances with IPS-Sendero --
http://www.ips-sendero.com/-- and Unisys --  
http://www.unisys.com/-- making Kamakura products available in
almost every major city around the globe.


* Paul Hastings Adds 7 New Attorneys to Tokyo Office
----------------------------------------------------
International law firm Paul, Hastings, Janofsky & Walker LLP
announced the recent addition of 7 attorneys to its Tokyo office.
Joining Paul Hastings/Taiyo Law Office (registered association)
are attorneys Mariko Obana, Darin Bifani, Ayako Kawano, Kiyomi
Kikuchi, Junji Shiraki, Kengo Hirabayashi, and Kota Kikuchi. In
addition, as a result of continued growth, the Tokyo office will
be expanding at its current location.

"As companies have invested more heavily in Asia, Paul Hastings
has very carefully built global teams of attorneys experienced in
international transactions in Tokyo, Hong Kong, Shanghai, and
Beijing," said Seth Zachary, Chair of Paul Hastings. "We believe
our Tokyo office is almost unparalleled in offering international
companies a unique combination of banking and finance, corporate
M&A, capital markets, litigation and real estate legal expertise."

"The Tokyo office is on the move - literally and figuratively,"
said John Steed, Chair of Tokyo office. "Since the opening of the
office in 1988 we have seen a continued growth in both attorneys
and business. We were among the first Western firms to open a
Tokyo office and today Paul Hastings has one of the largest
offices among international law firms. The addition of these seven
excellent attorneys and the growth of our office space is the
latest chapter in the Paul Hastings expansion story in Japan."

New Paul Hastings Attorneys in Tokyo:

   -- Mariko Obana (Japan qualified), represents Japanese and
      foreign clients in real estate acquisition and finance, M&A,
      and Japan domestic and cross-border litigation.

   -- Darin Bifani (U.S. qualified), previously at Sullivan &
      Cromwell, focuses his practice in the areas of real estate
      and has extensive experience in cross-border capital markets
      transactions, M&A, and project finance.

   -- Ayako Kawano (Japan qualified), previously at Mitsui,
      Yasuda, Wani & Maeda, represents M+A, real estate and
      finance by deploying her significant insolvency proceedings
      expertise.

   -- Kiyomi Kikuchi (Japan qualified), previously at Asahi Koma
      Law Offices, advises Japanese and foreign companies on
      corporate transactions.

   -- Junji Shiraki (Japan qualified), previously at Freshfields
      in Tokyo, will represent clients on general corporate
      matters, with a focus on M&A and financial transactions.

   -- Kengo Hirabayashi (Japan qualified) and Kota Kikuchi (Japan
      qualified) are also joining Paul Hastings in October.

                      Paul Hastings in Asia

Paul Hastings has a long history of successful practice in various
Asian markets. In 1988, Paul Hastings was one of the first U.S.-
based firms to expand into the Asian market with the opening of
its Tokyo office. Building on its 20+ year investment in Asia,
Paul Hastings combined with Koo and Partners in 2002, a merger
which gave the firm offices in Hong Kong and Beijing. In 2003,
Paul Hastings opened its Shanghai office. Paul Hastings is now the
one of the largest U.S. firms in the Asia-Pacific region with 120+
attorneys in Beijing, Hong Kong, Shanghai, and Tokyo and is one of
only a handful of international firms that provide comprehensive,
cross-border legal services across Asia.

Paul, Hastings, Janofsky & Walker LLP, founded in 1951, is an
international law firm, with more than 950 lawyers located in
fifteen offices including Beijing, Shanghai, Hong Kong and Tokyo.
With more than 120 lawyers in Asia, the firm has one of the
largest international legal practices in the region. The firm's
award-winning Asia securitisation team continues to expand its
capabilities in structured finance, securitisation and debt
capital markets transactions.

                           *********

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 ***