TCR_Public/041013.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

           Wednesday, October 13, 2004, Vol. 8, No. 222

                           Headlines

AB DICK: Deadline to Compete with Presstek Bid is Oct. 27
AMERISERV FINANCIAL: Fitch Upgrades Rating from CCC+ to B-
ARGENT SECURITIES: Fitch Puts BB+ Rating on Class M-11 Certs.
ARMSTRONG HOLDINGS: Lowe's Reduces Laminate Flooring Purchases
BANC OF AMERICA: Fitch Puts Low-B Rating on 14 Cert. Classes

BOWATER INC: Will Release 2004 Third Quarter Results on Oct. 27
CALPINE CORP: S&P Junks $736 Million Unsecured Convertible Notes
CHARTER COMMS: S&P Affirms Junk Ratings with Negative Outlook
CHASE FUNDING: Fitch Assigns Low-B Ratings on B-4 & B-5 Certs.
CITGO PETROLEUM: Moody's Places Ba2 Rating on $200M Senior Notes

COLE NATIONAL: Lack of Info Cues S&P to Withdraw BB- Credit Rating
COMMERCE ONE: Receives De-Listing Notice from Nasdaq
CONSECO INC: Will Webcast 3rd Quarter Financial Results on Nov. 9
COPACK INTERNATIONAL: Case Summary & Largest Unsecured Creditors
CREST 2004-1: S&P Assigns Low-B Ratings to Class G & H Notes

CROWN CASTLE: Cash Tender Offers for Senior Notes Expire
DB COMPANIES: Has Until Dec. 31 to Make Lease-Related Decisions
DII/KBR: Halliburton to Hold Q3 2004 Conference Call on Oct. 26
DIVERSIFIED ASSET: S&P Puts Class B-1L's BB+ Rating on CreditWatch
DOANE PET: S&P Puts B- & CCC Ratings on CreditWatch Positive

ENRON: Judge Jones Remands Sierra Pacific Case to Bankr. Court
EXIDE TECHNOLOGIES: CEO C.H. Muhlhauser Will Depart on April 1
FEDDERS CORP: S&P Slashes Corporate Credit Rating to CCC+ from B
FISHER SCIENTIFIC: Officers Participate in Stock Trading Plans
FORT WORTH OSTEOPATHIC: Closure Nixes 1,000 Jobs & 265 Beds

GLOBAL CROSSING: Confirms Broadview Settlement Agreement
GOOSE CREEK LLC: Case Summary & 1 Largest Unsecured Creditor
GROSVENOR ORLANDO: Court Confirms Plan of Reorganization
HAWK CORP: Moody's Puts B2 Rating on Planned $100M Unsecured Notes
INTERSTATE BAKERIES: Hires Kurtzman Carson as Claims Agent

KAISER ALUMINUM: Court Orders Counsel to File Rule 2019 Statements
KAISER ALUMINUM: Agrees to Allow Performance & Volks' Claims
KARA GROUP: Files for Bankruptcy Protection under CCAA
MACOMB COUNTY: S&P Slices Revenue Bonds' Rating to BB from BBB-
MAXIM CRANE: Can Continue Hiring Ordinary-Course Professionals

METROPCS: Two Concerns Prompts S&P to Revise Outlook to Negative
MILLENIUM ASSISTED: Creditors Must File Proofs of Claim by Oct. 18
ML CBO: Moody's Slices $172.8M Senior Secured Notes' Rating to Ca
NATIONAL CENTURY: Trust Wants $2.1 Mil. Preferential Transfer Back
NATIONAL IRANIAN: Case Summary & 10 Largest Unsecured Creditors

NAVIGATOR CDO: S&P Assigns BB Ratings on Classes D-1 & D-2
NRG ENERGY: Inks Stipulation Resolving NCAT's & Reynolds' Claims
OWENS CORNING: CSFB & Tort Lawyers Debate Rule 2019 Compliance
PACIFIC BIOMETRICS: Inks New $1.7 Million Clinical Research Pact
PACIFIC COAST: Moody's Junks Class C-1 & C-2 Secured Notes

PACIFIC GAS: Trustee Objects to Dynegy Power's $1M Admin. Claim
PACIFIC GAS: Declares Preferred Stock Dividends
PARMALAT: Committee Has Until Nov. 15 to Dispute Citibank's Claim
PERKINELMER INC: Moody's Affirms Low-B Ratings
PILLOWTEX: Selling Kannapolis Facility to Manchester for $4.5 Mil.

POTLATCH CORP: Fitch Affirms Double-B Senior Debt Ratings
PRIME HOSPITALITY: Acquisition Cues S&P to Withdraw Low-B Ratings
RESOLUTION PERFORMANCE: S&P Shaves Corporate Credit Rating to B-
SECURITY INDEMNITY: Notice to All Policyholders & Claimants
SHOWCASE AUTO: Hires Felderstein Fitzgerald as Bankruptcy Counsel

SOLUTIA INC: Wants Until March 11, 2005 to Remove Civil Actions
SOLUTIA: Increases Saflex(R) PVB Price by 29c as Capacity Tightens
STRATUS TECH: S&P Places B Corporate Credit Rating on CreditWatch
TEXAS STATE: S&P's Rating on $5.4M Mortgage Bonds Tumbles to D
THERMACLIME INC: S&P Places B Rating on $50 Million Secured Loan

THORNBURG MORTGAGE: Moody's Puts Low-B Ratings on Classes B-4 & 5
UAL CORP: Names Lori Fox & Carol Fernandez Gov't. Affairs Managers
UAL CORPORATION: Objects to James Burley's $50 Million Claim
UAL CORPORATION: Court Approves Guilford Settlement
UNITED DEFENSE: S&P Lifts Corporate Credit Rating to BB+ from BB

URS CORPORATION: Wins $286 Million 10-Year U.S. Navy Contract
US AIRWAYS: Has Until October 27 to File Schedules & Statements
US AIRWAYS: Hires American Appraisal as Valuation Consultants
US AIRWAYS: Gets Court Okay to Assume BofA Credit Card Agreement
USEC INC: S&P Shaves Corporate Credit Rating One Notch to BB-

USG CORP: Wants Until March 31, 2005 to Remove State Court Actions
VLASIC: Campbell Present 5 More Witnesses in $250M Spin-Off Suit
W.R. GRACE: Asks Court to Bless Honeywell Settlement Agreement
WEIRTON STEEL: Paying Distributions to Allowed Claim Holders
WORLDCOM INC: Balks at Teleserve Systems' Claims

* Upcoming Meetings, Conferences and Seminars

                           *********

AB DICK: Deadline to Compete with Presstek Bid is Oct. 27
---------------------------------------------------------
As previously reported in the Troubled Company Reporter, Presstek,
Inc., has offered $40 million to purchase substantially all of the
assets of A.B. Dick Company and its wholly owned subsidiaries.  On
Sept. 15, 2004, the United States Bankruptcy Court for the
District of Delaware approved uniform bidding and auction
procedures for the proposed disposition.

The Debtors' Assets are to be sold free and clear of all liens,
claims, encumbrances, and interests, save and except to the liens
of the Debtors' prepetition and postpetition lenders.

All interested bidders should read carefully the Auction and
Bidding Procedures, copies of which may be obtained from:

      Counsel to the Debtors:

         H. Jeffrey Schwartz, Esq.
         Benesch, Friedlander, Coplan & Aronoff LLP
         2300 BP Tower, 200 Public Square
         Cleveland, Ohio 44114-2378

            - and -

         Frederick B. Rosner, Esq.
         Jaspan Schlesinger Hoffman LLP
         1201 N. Orange Street, Suite 1001
         Wilmington, Delaware 19801

Bids must be delivered in writing to:

         H. Jeffrey Schwartz, Esq.
         Benesch, Friedlander, Coplan & Aronoff LLP
         2300 BP Tower, 200 Public Square
         Cleveland, Ohio 44114-2378
         Tel. No. 216/363-4635
         E-mail: jschwartz@bfca.com

and received no later than Oct. 27, 2004, at 5:00 p.m., Eastern
time.

A public auction will be conducted at 10:00 a.m., Eastern time, on
Oct. 29, 2004, at:

         Benesch, Friedlander, Coplan & Aronoff LLP
         2300 BP Tower, 200 Public Square
         Cleveland, Ohio 44114-2378

Pursuant to the Auction and Bidding Procedures, the Debtors
reserve the right, after consultation with specified parties, to:

      (i) determine and announce the highest and bid submitted at
          the Auction;

     (ii) cancel the Auction;

    (iii) extend the Bid Deadline;

     (iv) impose such other and additional terms and conditions or
          modify the terms and conditions hereof as the Debtors
          determine to be in their best interests; and

      (v) reject all Qualifying Bids as contrary to the best
          interest of the Debtors and their estates.

The Debtors will have no obligation to accept or submit for Court
approval any offer presented at the Auction.

Any questions about the Debtors' businesses or Assets should be
directed to:

      Debtors' Financial Advisor:

         Glenn C. Pollack
         Candlewood Partners, LLC
         10 1/2 East Washington Street
         Chagrin Falls, Ohio 44022
         Tel. No. 440/264-8004
         Fax No. 440/247-3060
         E-mail: gppollack@candlewoodpartners.com

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


AMERISERV FINANCIAL: Fitch Upgrades Rating from CCC+ to B-
----------------------------------------------------------
Fitch Ratings revised the Rating Outlook of AmeriServ Financial,
Inc. and AmeriServ Financial Bank to Positive from Negative.  At
the same time, Fitch has upgraded the rating of AmeriServ Capital
Trust I to 'B-' from 'CCC+' with a Rating Outlook Positive.

The rating for AmeriServ Capital has been removed from Rating
Watch Negative where it was placed on April 17, 2003.

The rating action is reflective of AmeriServ Financial's improved
balance sheet structure following the completion of a $12.6
million private placement of common stock.  The net proceeds of
this offering will be used to support the prepayment of
approximately $100 million of FHLB advances (6% interest rate and
2010 maturity) at AmeriServ Financial Bank, close the company's
loss-making mortgage banking business (Standard Mortgage
Corporation), redeem approximately $5.7 million of AmeriServ
Financial's $34.5 million (8.45%) trust preferred securities and
inject liquidity at the parent company level.

Although these actions will result in a one-time after tax charge
of approximately $8.8 million in fourth quarter 2004 and a loss
for the full year 2004, Fitch believes that this balance sheet
restructuring better positions the company for future improvements
in its financial performance.

The upgrade of AmeriServ Capital's rating is driven by the
increased liquidity at the parent company level, combined with the
reduction in outstanding trust preferred securities.  These
actions improve AmeriServ Financial's ability to service the trust
preferred debt, thereby significantly reducing the likelihood of a
deferral on the trust preferred dividend in the near term.

Looking ahead, initiatives to make the company's debt service less
onerous, including the closing of a second $13.2 million private
placement of common stock planned for December 2004, and improved
core earnings trends will determine progress on the ratings front.

Ratings upgraded:

     AmeriServ Capital Trust I:

          -- Trust Preferred to 'B-' from 'CCC+'.

Ratings Placed on Rating Outlook Positive:

     AmeriServ Financial, Inc.:

          -- Long-term 'B';
          -- Short-term 'B' ;
          -- Individual 'D';
          -- Support '5' ;

          Rating Outlook to Positive from Negative.

     AmeriServ Financial Bank:

          -- Long-term 'BB-';
          -- Long-term deposits 'BB-';
          -- Short-term 'B';
          -- Short-term deposits 'B';
          -- Individual 'D';
          -- Support '5';

          Rating Outlook to Positive from Negative.

     AmeriServ Capital Trust I:

          -- Trust Preferred 'B-';

          Rating Outlook to Positive from Negative.


ARGENT SECURITIES: Fitch Puts BB+ Rating on Class M-11 Certs.
-------------------------------------------------------------
Argent Securities Inc. 2004-W11, is rated by Fitch:

     -- $1,381,500,000 classes A-1 to A-4 certificates 'AAA';
     -- $49,500,000 class M-1 certificates 'AA+';
     -- $55,800,000 class M-2 certificates 'AA+';
     -- $53,100,000 class M-3 certificates 'AA';
     -- $31,500,000 class M-4 certificates 'AA-';
     -- $32,400,000 class M-5 certificates 'A+';
     -- $26,100,000 class M-6 certificates 'A';
     -- $25,200,000 class M-7 certificates 'A-';
     -- $25,200,000 class M-8 certificates 'BBB+';
     -- $22,500,000 class M-9 certificates 'BBB';
     -- $18,000,000 class M-10 certificates 'BBB-';
     -- $18,000,000 non-offered class M-11 certificates 'BB+'.

Credit enhancement for the 'AAA' rated class A certificates
reflects the 19.85% subordination provided by:

          * classes M-1 through M-11,
          * monthly excess interest, and
          * initial overcollateralization -- OC -- of 3.40%.

Credit enhancement for the 'AA+' rated class M-1 certificates
reflects the 17.10% subordination provided by:

          * classes M-2 to M-11,
          * monthly excess interest, and
          * initial OC.

Credit enhancement for the 'AA+' rated class M-2 certificates
reflects the 14% subordination provided by:

          * classes M-3 to M-11,
          * monthly excess interest, and
          * initial OC.

Credit enhancement for the 'AA' rated class M-3 certificates
reflects the 11.05% subordination provided by:

          * classes M-4 to M-11,
          * monthly excess interest, and
          * initial OC.

Credit enhancement for the 'AA-' rated class M-4 certificates
reflects the 9.30% subordination provided by:

          * class M-5 to M-11,
          * monthly excess interest, and
          * initial OC.

Credit enhancement for the 'A+' rated class M-5 certificates
reflects the 7.50% subordination provided by:

          * class M-6 to M-11,
          * monthly excess interest, and
          * initial OC.

Credit enhancement for the 'A' rated class M-6 certificates
reflects the 6.05% subordination provided by:

          * class M-7 to M-11,
          * monthly excess interest, and
          * initial OC.

Credit enhancement for the 'A-' rated class M-7 certificates
reflects the 4.65% subordination provided by:

          * class M-8 to M-11,
          * monthly excess interest, and
          * initial OC.

Credit enhancement for the 'BBB+' rated class M-8 certificates
reflects the 3.25% subordination provided by:

          * class M-9 to M-11,
          * monthly excess interest, and
          * initial OC.

Credit enhancement for the 'BBB' rated class M-9 certificates
reflects the 2% subordination provided by:

          * class M-10 and M-11,
          * monthly excess interest, and
          * initial OC.

Credit enhancement for the 'BBB-' rated class M-10 certificates
reflects the 1% subordination provided by:

          * class M-11,
          * monthly excess interest, and
          * initial OC.

Credit enhancement for the privately offered 'BB+' rated class M-
11 certificates reflects the:

          * monthly excess interest, and
          * initial OC.

In addition, the ratings reflect the integrity of the
transaction's legal structure as well as the capabilities of
Ameriquest Mortgage Company as Master Servicer rated 'RPS2' by
Fitch.  Deutsche Bank National Trust Company will act as Trustee.

The mortgage pool consists of loan groups.  Group I mortgage loans
will consist of first lien subprime mortgage loans that conform to
Freddie Mac and Fannie Mae loan limits.  As of the Cut-Off date,
Oct. 1, 2004, the mortgage loans have an aggregate balance of
$1,025,563,649.68.  The weighted average loan rate is
approximately 7.526%.

The weighted average remaining term to maturity -- WAM -- is 356
months.  The average Cut-Off date principal balance of the
mortgage loans is approximately $166,622.85.  The weighted average
original loan-to-value ratio -- OLTV -- is 83.54% and the weighted
average Fair, Isaac & Co. score is 609.

The properties are primarily located in:

          * California (23.31%),
          * Florida (9.35%), and
          * Illinois (8.87%).

In addition, on or before the 90th day following the closing date,
the trust will acquire $293,018,132 in subsequent mortgage loans
to be included in the mortgage pool.

Group II mortgage loans will consist of first lien subprime
mortgage loans that may or may not conform to Freddie Mac and
Fannie Mae loan limits.  As of the Cut-Off date, Oct. 1, 2004, the
mortgage loans have an aggregate balance of $374,436,407.21.

The weighted average loan rate is approximately 7.283%.  The WAM
is 357 months.  The average Cut-Off date principal balance of the
mortgage loans is approximately $265,369.53. The weighted average
OLTV is 83.22% and the weighted average Fair, Isaac & Co.  score
is 612.

The properties are primarily located in:

          * California (46.52%),
          * New York (13.38%), and
          * Florida (6.17%).

In addition, on or before the 90th day following the closing date,
the trust will acquire $106,981,811 in subsequent mortgage loans
to be included in the mortgage pool.

The loans were originated or acquired by Argent Mortgage Company,
LLC, and Olympus Mortgage Company.  Both mortgage companies are
subsidiaries of Ameriquest Mortgage Company which is a specialty
finance company engaged in the business of originating, purchasing
and selling retail and wholesale subprime mortgage loans.  Both
Argent and Olympus focus primarily on wholesale subprime mortgage
loans.


ARMSTRONG HOLDINGS: Lowe's Reduces Laminate Flooring Purchases
--------------------------------------------------------------
Lowe's Companies, Inc., informed Armstrong Holdings, Inc. (OTC
Bulletin Board: ACKHQ) of its decision to reduce its purchases of
laminate flooring from the Company.  Armstrong expects this
decision to become effective starting in the first quarter of
2005.  The anticipated annual impact of this change is to reduce
sales by approximately $60 million, resulting in a material
adverse impact to operating income in 2005.

Headquartered in Lancaster, Pennsylvania, Armstrong World
Industries, Inc. -- http://www.armstrong.com/-- the major
operating subsidiary of Armstrong Holdings, Inc., designs,
manufactures and sells interior finishings, most notably floor
coverings and ceiling systems, around the world.

The Company filed for chapter 11 protection on December 6, 2000
(Bankr. Del. Case No. 00-04469).  Stephen Karotkin, Esq., Weil,
Gotshal & Manges LLP and Russell C. Silberglied, Esq., at
Richards, Layton & Finger, P.A., represent the Debtors in in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed $4,032,200,000 in total assets and
$3,296,900,000 in liabilities.


BANC OF AMERICA: Fitch Puts Low-B Rating on 14 Cert. Classes
------------------------------------------------------------
Fitch Ratings affirms Banc of America Commercial Mortgage Inc.,
series 2003-2, commercial mortgage pass-through certificates:

     -- $128.4 million class A-1 'AAA';
     -- $483.6 million class A-1A 'AAA';
     -- $106.3 million class A-2 'AAA';
     -- $168.1 million class A-3 'AAA';
     -- $482.3 million class A-4 'AAA';
     -- Interest-only class XC 'AAA';
     -- Interest-only class XP 'AAA';
     -- $56.7 million class B 'AA';
     -- $21.0 million class C 'AA-';
     -- $44.1 million class D 'A';
     -- $23.1 million class E 'A-';
     -- $21.0 million class F 'BBB+';
     -- $23.1 million class G 'BBB';
     -- $21.0 million class H 'BBB-';
     -- $18.9 million class J 'BB+';
     -- $10.5 million class K 'BB';
     -- $10.5 million class L 'BB-';
     -- $8.4 million class M 'B+';
     -- $8.4 million class N 'B';
     -- $4.2 million class O 'B-';
     -- $2.7 million class BW-A 'BBB';
     -- $1.2 million class BW-B 'BBB';
     -- $8.8 million class BW-C 'BBB-';
     -- $2.7 million class BW-D 'BB+';
     -- $3.6 million class BW-E 'BB';
     -- $3.2 million class BW-F 'BB';
     -- $3.1 million class BW-G 'BB-';
     -- $2.7 million class BW-H 'B+';
     -- $2.7 million class BW-J 'B';
     -- $2.1 million class BW-K 'B';
     -- $3.5 million class BW-L 'B-'.

Fitch does not rate the $27.3 million class P or classes HS-A, HS-
B, HS-C, HS-D, or HS-E.

The rating affirmations reflect the stable pool performance and
minimal paydown since issuance.  As of the September 2004
distribution date, the pool's aggregate certificate balance has
decreased 0.69% to $1.75 billion from $1.77 billion at issuance.
To date, there have been no loan payoffs or realized losses within
the transaction.  There are also no delinquent or specially
serviced loans.

Fitch has reviewed credit assessments of:

          * Hines-Sumitomo Portfolio (9.1%),
          * 1328 Broadway (7.7%), and
          * Newgate Mall (2.5%) loans.

Based on their stable performance, the loans maintain investment-
grade credit assessments.


BOWATER INC: Will Release 2004 Third Quarter Results on Oct. 27
---------------------------------------------------------------
Bowater Incorporated (NYSE: BOW) will release third quarter 2004
financial results before the market opens on Wednesday,
October 27, 2004.

Bowater will hold a management conference call to discuss these
financial results at 9:00 a.m. EDT, October 27, 2004.  The
conference call number is 800-762-4758 or 480-629-9027
(international).  The call will also be broadcast via the
Internet.  Interested parties may connect to the Bowater website
at http://www.bowater.com/,then follow the on-screen instructions
for access to the call and related information.  A replay of the
call will be available from 1:30 p.m. EDT on Wednesday,
October 27, through Wednesday, November 3, on the website or by
dialing 800-475-6701 or 320-365-3844 (international) and using the
access code 750463.

Bowater Incorporated, headquartered in Greenville, South Carolina,
is a leading producer of newsprint and coated groundwood papers.
In addition, the company makes uncoated groundwood papers,
bleached kraft pulp and lumber products.  The company has 12 pulp
and paper mills in the United States, Canada and South Korea and
13 North American sawmills that produce softwood lumber.  Bowater
also operates two facilities that convert a groundwood base sheet
to coated products.  Bowater's operations are supported by
approximately 1.4 million acres of timberlands owned or leased in
the United States and Canada and 30 million acres of timber
cutting rights in Canada.  Bowater is one of the world's largest
consumers of recycled newspapers and magazines.  Bowater common
stock is listed on the New York Stock Exchange, the Pacific
Exchange and the London Stock Exchange.  A special class of stock
exchangeable into Bowater common stock is listed on the Toronto
Stock Exchange (TSE: BWX).

                         *     *     *

As reported in the Troubled Company Reporter on May 14, 2004,
Standard & Poor's Ratings Services assigned its 'BB' bank loan
rating to newsprint producer Bowater Inc.'s $435 million senior
unsecured revolving credit facility due 2007.  All other ratings
were affirmed at 'BB'.  The outlook is stable.

The new facility, which consists of a $400 million U.S. tranche
and a $35 million Canadian tranche, replaces two senior unsecured
credit facilities totaling $600 million--a $500 million facility
due to expire in April 2005 and a $100 million facility due to
expire in October 2004.

"The ratings reflect Bowater's high debt burden, caused by three
years of weak earnings, elevated capital spending and near-term
prospects for modest--although improving--cash-flow generation,"
said Standard & Poor's credit analyst Pamela Rice.  These factors
outweigh the company's leading market positions in cyclical
newsprint, pulp, and coated groundwood paper, substantial
operating leverage, and valuable timberland holdings.


CALPINE CORP: S&P Junks $736 Million Unsecured Convertible Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC+' rating to
Calpine Corp.'s (B/Negative/--) $736 million unsecured convertible
notes due 2014.  The rating on the notes is the same as Calpine's
existing unsecured debt and two notches lower than the corporate
credit rating.  The outlook is negative.

The rating on Calpine, a San Jose, California-based company that
develops, acquires, owns, and operates power generation
facilities, reflects the company's weak credit statistics,
increased business risks, and its limited opportunities to reduce
its debt.

These weaknesses are somewhat mitigated by Calpine's contractual
revenue base, which offsets some of the cash flow volatility
caused by merchant power sales.  In addition, Calpine has proven
its ability to efficiently operate its power plants, as well as
manage and build multiple plants in a timely and efficient manner.

Furthermore, highly efficient gas turbines increasingly make up a
larger percentage of Calpine's fleet, which should ensure a higher
level of dispatch compared with the older plants that Calpine's
competitors have purchased for the past few years.

"The negative outlook reflects Calpine's weak financial ratios.
The ratings could be lowered if Calpine's funds from operations
interest coverage remains substantially below 1x or if Calpine
cannot refinance its high-tides securities in a timely manner,"
said Standard & Poor's credit analyst Jeffrey Wolinsky.

Calpine's current operating portfolio, mainly in the U.S.,
consists of 91 operating projects with a net ownership interest in
more than 26,000 MW.


CHARTER COMMS: S&P Affirms Junk Ratings with Negative Outlook
-------------------------------------------------------------
Standard & Poor's Ratings Services revised its ratings outlook on
cable TV system operator Charter Communications Inc. and
subsidiaries to negative from positive.  At the same time, the
'CCC+' corporate credit ratings and all ratings on the companies
were affirmed.  Charter serves about 6.1 million basic cable TV
subscribers and had $18.4 billion in debt outstanding as of
June 30, 2004.

"The outlook revision was based on concerns about higher-than-
anticipated analog subscriber losses, insufficient revenue and
EBITDA growth, recent senior management departures, and heightened
uncertainty about Charter's ability to refinance its $588 million
in 5.75% convertible notes maturing in October 2005," said
Standard & Poor's credit analyst Eric Geil.

On Oct. 7, 2004, Charter indicated that analog subscriber losses
for the 2004 third quarter will be 55,000-60,000.  This is a 2.6%-
2.7% decline from the year-earlier level (pro forma for system
sales) and an increase in the rate of decline from levels
experienced in early 2004 and late 2003.  As with other cable
operators, high-speed data subscriber growth is slowing because of
rising penetration and increasing competitiveness of phone company
digital subscriber line services, diminishing data's tempering
effects on weak video revenue performance.

Charter expects a 7.5% revenue increase in the third quarter
compared with year-earlier pro forma results. Although this is
slightly better than first- and second-quarter revenue growth,
higher programming, customer care, and service costs are
compressing profitability and constraining EBITDA, which the
company indicated will be flat for the third quarter compared with
the year-earlier pro forma level. The departure of Charter's chief
operating officer effective Sept. 30, 2004, amplifies concern
about the company's ability to achieve sustainable improvement.

The ratings on Charter continue to reflect high financial risk
from elevated leverage because of:

   (a) aggressive debt-financed acquisitions and capital
       expenditures,

   (b) intense competitive pressure from satellite TV providers,

   (c) near-term debt maturity pressure,

   (d) uncertain likelihood of discretionary cash flow generation,
       and

   (e) risk of debt restructuring actions.

These factors are partly tempered by:

   (a) Charter's position as the still-dominant provider of pay TV
       services in its markets,

   (b) a degree of cash flow stability from largely subscription-
       based revenues, and good system asset values.

The negative outlook reflects the possibility that video
subscriber erosion and slowing data customer growth may limit the
improvement in EBITDA that will be important in facilitating a
refinancing of the upcoming convertible debt maturity on
attractive terms.  Based on current operating trends, Charter may
be pressured into restructuring its balance sheet, which could
result in a downgrade.


CHASE FUNDING: Fitch Assigns Low-B Ratings on B-4 & B-5 Certs.
-------------------------------------------------------------
Chase Funding mortgage loan asset-backed certificates, series
2004-AQ1, are rated by Fitch:

     --$524.46 million class A 'AAA';
     --$31.34 million class M-1 'AA';
     --$19.97 million class M-2 'A';
     --$6.15 million class M-3 'A-';
     --$4.61 million class B-1 'BBB+';
     --$3.99 million class B-2 'BBB';
     --$4.61 million class B-3 'BBB-';
     --$5.22 million, non-offered, class B-4 'BB+';
     --$3.07 million class B-5 'BB'.

The 'AAA' rating on the senior certificates reflects the 14.65%
initial subordination provided by:

          * the 5.10% class M-1,
          * the 3.25% class M-2,
          * the 1.00% class M-3,
          * the 0.75% class B-1,
          * the 0.65% class B-2,
          * the 0.75% class B-3,
          * the 0.85% class B-4,
          * the 0.50% class B-5, and
          * the initial overcollateralization -- OC -- of 1.80%.

In addition, the ratings also reflect the quality of the loans,
the soundness of the legal and financial structures, and the
capabilities of Chase Manhattan Mortgage Corporation as servicer,
which is rated 'RPS1' by Fitch.

The collateral pool consists of fixed- and adjustable-rate
collateral totaling $614 million as of the cut-off date.  The
weighted average OLTV is 86.73%, the average outstanding principal
balance is $184,196, the weighted average coupon is 6.908%, and
the weighted average remaining term is 353 months. The weighted
average FICO score is 624.

The loans are geographically concentrated in:

          * California (37.3%),
          * Illinois (6.8%), and
          * New York (6.2%).

Chase Funding, Inc. will deposit the mortgage loans in the trust
fund.  The depositor is a New York corporation and a wholly owned,
indirect subsidiary of JPMorgan Chase Bank, one of the
underwriters.


CITGO PETROLEUM: Moody's Places Ba2 Rating on $200M Senior Notes
----------------------------------------------------------------
Moody's Investors Service upgraded the long-term debt ratings of
CITGO Petroleum Corporation to Ba2 from Ba3 and assigned a
provisional Ba2 rating to the company's proposed $200 million
senior note issue.

The upgrade reflects the financial and liquidity benefits from the
proposed issue and, more generally, CITGO's improving financial
condition and operational flexibility.  The rating outlook is
positive.

CITGO's proposed $200 million note offering will refinance a
portion of the $550 million high coupon debt it incurred during
the height of the Venezuelan strike and crude supply interruptions
of 2002-2003.  When combined with more than $300 million of cash
on the balance sheet and other financing sources, the company will
be able to redeem the entire high-coupon note issue, leading to
reduced financial leverage.  While the call premium will be
expensive, the refinancing and debt reduction should reduce
CITGO's annual fixed charges by more than $50 million pre-tax and
will also eliminate restrictive indenture cash flow and liquidity
tests.

The Ba2 rating also factors in favorable industry refining
margins, which have helped improve CITGO's earnings, free cash
generation, and liquidity, and have supported some debt reduction,
including the pay down of secured and high coupon debt.

In maintaining a positive rating outlook, Moody's will consider a
number of factors that could result in an upgrade in the future,
including:

     (i) CITGO's fundamental performance and ability to fund an
         aggressive capital program, and

    (ii) the evolving political and economic conditions in
         Venezuela, which could affect its ultimate parent,
         Petroleos de Venezuela (B2 foreign currency issuer
         rating).

The outlook also incorporates the continuation for the foreseeable
future of advantageous crude oil supply contracts with its parent,
and expected prudent dividend management.  While dividends are
likely to be paid on a regular basis, they will be subject both to
board discretion and covenant restrictions.  Dividend management
will be an important component of financial flexibility in light
of refining margin volatility and heavy planned capital investment
to expand the Lake Charles refinery and comply with environmental
regulations.

CITGO Petroleum Corporation recently moved its headquarters to
Houston, Texas. It is a wholly owned subsidiary of Petroleos de
Venezuela, the state oil company of Venezuela, headquartered in
Caracas, Venezuela.


COLE NATIONAL: Lack of Info Cues S&P to Withdraw BB- Credit Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings on Cole
National Group Inc., including its 'BB-' corporate credit rating.
These ratings were placed on CreditWatch with developing
implications April 19, 2004, following the announcement that the
company received an unsolicited acquisition offer by an
unaffiliated party to acquire Cole National Corp., the parent
company.

Following the completion of Cole National's acquisition by
Luxottica S.p.A., Standard & Poor's has been unable to obtain
adequate financial and operating information based on the new
ownership structure to rate Cole National's debt.  Therefore, the
ratings have been withdrawn.


COMMERCE ONE: Receives De-Listing Notice from Nasdaq
----------------------------------------------------
Commerce One, Inc., (NASDAQ: CMRCQ) reported that on Oct. 8, 2004,
the Nasdaq National Market notified them that they fail to comply
with Nasdaq's requirements for the continued listing of Commerce
One's common stock in light of its recent bankruptcy filing.  As
of the opening of business on October 12, 2004, a "Q" was appended
to the Company's trading symbol "CMRC."  Unless the Company
appeals, its common stock will be de-listed from The Nasdaq Stock
Market at the opening of business on October 19, 2004.

In the notice, Nasdaq advised that it had made their determination
after considering the Company's bankruptcy petition on
October 6, 2004.  In light of the bankruptcy filing, the staff
cited Marketplace Rules 4300 and 4450(f) specifically, public
interest concerns generally, as well as concern regarding the
residual equity interest of our existing securities holders as
grounds for our non-compliance.  Additionally, the staff voiced
concern over the Company's ability to come back into compliance
with the $1 minimum bid price requirement of Marketplace Rule
4450(b)(4); as previously disclosed, the staff initially notified
the Company of the non-compliance with this rule on July 15, 2004.

In light of the Company's efforts to wind up the Company's affairs
under the United States Bankruptcy Code, it currently do not
intend to exercise its right to appeal Nasdaq's determination.  If
the Company do not appeal Nasdaq's determination, its common stock
will be de-listed from The Nasdaq Stock Market and will not be
eligible for listing on the Nasdaq SmallCap market or the OTC
Bulletin Board.  De-listing will make the stock more difficult to
trade, likely reduce its trading volume, and likely further
depress our stock price.  If the Company's stock is de-listed, the
holders of shares of our Series B preferred stock will have the
right to require the Company to redeem their stock.  The aggregate
redemption price of these shares was approximately $7.9 million as
of June 30, 2004.  The Company do not currently have sufficient
capital resources to redeem these shares.

Headquartered in San Francisco, California, Commerce One, Inc. --
http://www.commerceone.com/-- provides software services that
enable businesses to conduct commerce over the internet.

Commerce One, Inc., and Commerce One Operations, Inc. filed for
chapter 11 protection on October 6, 2004 (Bankr. N.D. Calif. Case
Nos.: 04-32820 & 04-32821).  Doris A. Kaelin, Esq., and Lovee
Sarenas, Esq., at the Law Offices of Murray and Murray, in
Cupertino, California, represent the Debtors in their
restructuring efforts.  When the Debtors filed for bankruptcy
petition they declared assets amounting to $14,531,000 and debts
amounting to $12,442,000.


CONSECO INC: Will Webcast 3rd Quarter Financial Results on Nov. 9
-----------------------------------------------------------------
Conseco, Inc., (NYSE:CNO) will report results for the third
quarter of 2004 before the market opens on Monday, November 8.
The company will host a conference call to discuss results later
that morning, and expects to file its Form 10-Q on Tuesday,
November 9.

Management's conference call will begin at 10:00 a.m. Eastern Time
on Monday, November 8.  The webcast can be accessed through the
Investors section of the company's website as follows:

http://www.conseco.com/conseco/selfservice/about/investors/index.jhtml?cat=i
nvest/

Listeners should go to the website at least 15 minutes before the
event to register, download and install any necessary audio
software.

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

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

                          *     *     *

As reported in the Troubled Company Reporter on Aug. 20, 2004,
Standard & Poor's Ratings Services said that in light of the
resignation of Conseco, Inc., (BB-/Stable/--) (OTC BB:CNCEQ) CEO
William Shea, Standard & Poor's planned to meet with Conseco's new
CEO, William Kirsch, and the new Executive Chairman of Conseco's
board of directors, Glenn Hilliard, to discuss their strategic
plans for the company. Standard & Poor's had had concerns about
whether Shea's resignation was a portent of previously unannounced
problems with the company.

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


COPACK INTERNATIONAL: Case Summary & Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Copack International, Inc.
        429 Taconic Road
        Greenwich, Connecticut 06831

Bankruptcy Case No.: 04-51194

Chapter 11 Petition Date: October 8, 2004

Court: District of Connecticut (Bridgeport)

Judge: Alan H.W. Shiff

Debtor's Counsel: Peter L. Ressler, Esq.
                  Groob Ressler & Mulqueen
                  123 York Street, Suite 1B
                  New Haven, CT 06511
                  Tel: 203-777-5741

Total Assets: $522,170

Total Debts:  $3,138,187

Debtor's 20 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Cynthia L. Gould              Machinery S 5000          $785,600
429 Taconic Road
Greenwich, CT 06831

Peter J. Gould                                          $745,761
429 Taconic Road
Greenwich, CT 06831

Peter J. Gould                Misc.                     $744,950
429 Taconic Road
Greenwich, CT 06831

Aldine Tech. Indust. Inc.     Machinery &               $287,346
585 Industrial Road           Inventory
Carlstadt, NJ 07072

Lucille Q. Gould              Misc.                     $182,873

Lucille Q. Gould              Circle Package 1+#        $182,873
                              Z-Support Sys.

Union Paper & Union Ind.      Misc.                      $77,900

Cherry Hill Development       Misc.                      $35,314

LPS Industries                Misc.                      $17,121

PSE&G                         Misc.                      $12,700

Progressive Packing           Misc.                      $10,140

2120 Group                    Misc.                       $8,955

Hayssen Mfg. Company          Misc.                       $6,541

Packaging Progressions        Misc.                       $5,200

Logotech Inc.                 Misc.                       $5,045

Smurfit-Stone Con. Corp.      Misc.                       $4,900

Overnight Label Co.           Misc.                       $4,800

Chubb Group of Ins. Com.      Misc.                       $3,027

United Parcel Service         Misc.                       $2,700

A.J. Schrafel                 Misc.                       $2,335


CREST 2004-1: S&P Assigns Low-B Ratings to Class G & H Notes
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Crest 2004-1 Ltd./Crest 2004-1 Corp.'s $351 million
fixed- and floating-rate notes due 2020 and 2040.

The preliminary ratings are based on information as of
October 11, 2004.  Subsequent information may result in the
assignment of final ratings that differ from the preliminary
ratings.

The preliminary ratings reflect:

   -- the expected commensurate level of credit support in the
      form of subordination to be provided by the notes junior to
      the respective classes and by the preference shares;

   -- the excess spread and overcollateralization provided by the
      assets;

   -- the cash flow structure, which is subject to various
      stresses requested by Standard & Poor's;

   -- the experience of the collateral administrator and
      disposition consultant; and

   -- the legal structure of the transaction, which includes the
      bankruptcy remoteness of the issuer.

                  Preliminary Ratings Assigned
              Crest 2004-1 Ltd./Crest 2004-1 Corp.

        Class                Rating      Amount (mil. $)
        -----                ------      ---------------
        A                    AAA                 198.000
        B                    AA                   54.000
        C                    A+                   27.000
        D                    A                    18.000
        E                    BBB+                 27.000
        F                    BBB                   5.625
        G                    BB                   12.375
        H                    BB                    9.000
        Preferred shares     N.R.                 99.000

                        N.R. - Not rated


CROWN CASTLE: Cash Tender Offers for Senior Notes Expire
--------------------------------------------------------
Crown Castle International Corp.'s (NYSE: CCI) announced the
expiration of its cash tender offers for up to:

   -- $205,574,000 of its outstanding 9-3/8% Senior Notes due
      2011,

   -- $216,412,000 of its outstanding 10-3/4% Senior Notes due
      2011,

   -- $151,445,000 of its outstanding 7.5% Senior Notes due 2013,
      and

   -- $151,445,000 of its outstanding 7.5% Series B Senior Notes
      due 2013.

As of 5:00 p.m. (EDT) on Oct. 8, 2004, the scheduled expiration
date:

   -- $7,000 in aggregate principal amount of the 9-3/8% Senior
      Notes due 2011,

   -- $415,000 in aggregate principal amount of the 10 3/4% Senior
      Notes due 2011,

   -- $5,000 in aggregate principal amount of the 7.5% Senior
      Notes due 2013, and

   -- $38,000 in aggregate principal amount of the 7.5% Series B
      Senior Notes due 2013

had been validly tendered pursuant to the Offer to Purchase dated
Sept. 10, 2004.  Crown Castle accepted for payment all Notes
validly tendered in the offers.  Payment will be made on the
validly tendered Notes as provided in the Offer to Purchase.

The Bank of New York acted as depositary and MacKenzie Partners,
Inc. acted as the information agent for the offers.  Questions
regarding the tender offers may be directed to The Bank of New
York, the Depositary, at (212) 815-5920, or in writing to The Bank
of New York, Reorganization Unit, 101 Barclay Street -- 7 East,
New York, New York 10286, Attention: Carolle Montreuil.

                        About the Company

Crown Castle International Corp. -- http://www.crowncastle.com/--
is among the largest wireless tower operators in the industry,
with about 13,000 sites mostly in the U.S. and U.K. Through Crown
Atlantic Joint Venture (Crown Atlantic), a joint venture between
Crown Castle (62.8% stake) and Verizon Communications Inc. (37.2%
stake), the company operates approximately another 2,000 towers.
Crown Castle predominantly derives its revenues from the tower
leasing business and the remainder from network services.  The
tower industry enjoys significant competitive barriers (e.g., real
estate zoning, high customer switching costs, and long-term
leasing contracts with provisions for annual rent escalation),
strong operating leverage (given that towers have mostly fixed
costs), and little risk of technology substitution.

                         *     *     *

As reported in the Troubled Company Reporter on June 30,2004,
Standard & Poor's Ratings Services placed its ratings of Houston,
Texas-based wireless tower operator Crown Castle International
Corp. (including the 'B-' corporate credit rating) and operating
company Crown Castle Operating Co. on CreditWatch with positive
implications. Approximately $4 billion of leased-adjusted debt is
outstanding.

The CreditWatch placement follows Crown Castle's announcement of a
definitive agreement to sell its U.K. tower subsidiary for about
$2 billion. The prior positive outlook had recognized the
potential for meaningful reduction in debt leverage, and the
earmarking of $1.3 billion of proceeds from the announced
disposition could accelerate the deleveraging process.  However, a
key factor in the rating analysis will be the use of the
approximate $740 million balance of net sale proceeds.  The
company notes that these monies will be used either for further
debt reduction or for expansion of its U.S. portfolio.  To the
extent that Crown Castle opts not to apply the bulk of the
$740 million to debt reduction, Standard & Poor's will review
management's expansion plans, including the potential cash flow
from newly built and/or purchased towers.  "If Crown Castle
purchases extant towers, factors that will be considered in
evaluating the credit impact will include the quality of existing
tenants per tower, contract terms applicable to purchased tenants,
the potential for new tenants, and tenant diversity," said
Standard & Poor's credit analyst Michael Tsao.


DB COMPANIES: Has Until Dec. 31 to Make Lease-Related Decisions
---------------------------------------------------------------
The Honorable Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware extended, until December 31, 2004, the period
within which DB Companies, Inc., and its debtor-affiliates can
elect to assume, assume and assign, or reject their unexpired
nonresidential property leases.

The Debtors tell the Court that they are currently soliciting bids
for the proposed sale of their convenience stores and gas stations
businesses and they are parties to 86 unexpired leases where the
stores and gas stations are located.

As part of the proposed sale, the Debtors intend to assume and
assign their rights under the leases to the purchasers of the
convenience stores and gas stations where the Debtors are the
lessees.

The Debtors explain that their assumption and assignment for any
particular lease will only become effective on the closing sale to
the purchaser of the convenience stores or gas stations covered
under the leases.

Pending the Court's approval of the Debtors' proposed sale and
closings of approved sale transactions of their convenience stores
and gas stations, the Debtors will continue to operate their
businesses at the leased premises in order to maintain the value
of the Debtors' assets and the viability of the sale process.

The Debtors add that the extension period will give them more time
to substantially complete the proposed sale by November 2004, and
they anticipate that they will have either assumed, assumed and
assigned, or file a motion to reject, all or most of the 86 leases
on or before the December 31 deadline.

The Debtors assure Judge Walsh that the extension will not
prejudice any lessors under the leases because they are current in
all their postpetition obligations pursuant to Section 365(d)(3)
of the Bankruptcy Code.

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.


DII/KBR: Halliburton to Hold Q3 2004 Conference Call on Oct. 26
---------------------------------------------------------------
Halliburton (NYSE:HAL) will host a conference call on Tuesday,
October 26, 2004, to discuss third quarter financial results.  The
call will begin at 9:00 AM Central Time (10:00 AM Eastern Time).
The results will be released that morning before the market opens.

The press release concerning the 2004 third quarter earnings
will be posted on the Halliburton Web Site:

                  http://www.halliburton.com/

Visit the Web Site to listen to the call live via webcast.  A
replay will be available on our Web Site for seven days following
the event.  In addition, you may participate in the call by
telephone at (913) 981-5591.

Headquartered in Houston, Texas, DII Industries, LLC, is the
direct or indirect parent of BPM Minerals, LLC, Kellogg Brown &
Root, Inc., Mid-Valley, Inc., KBR Technical Services, Inc.,
Kellogg Brown & Root Engineering Corporation, Kellogg Brown & Root
International, Inc., (Delaware), and Kellogg Brown & Root
International, Inc., (Panama).  KBR and its subsidiaries provide a
wide range of services to energy and industrial customers and
government entities in over 100 countries.  DII has no business
operations.

DII and its debtor-affiliates filed a prepackaged chapter 11
petition on December 16, 2003 (Bankr. W.D. Pa. Case No. 02-12152).
Jeffrey N. Rich, Esq., Michael G. Zanic, Esq., and Eric T. Moser,
Esq., at Kirkpatrick & Lockhart LLP, represent the Debtors in
their restructuring efforts.  On June 30, 2004, the Debtors listed
$6.255 billion in total assets and $5.295 billion in total
liabilities.  (DII & KBR Bankruptcy News, Issue No. 20; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


DIVERSIFIED ASSET: S&P Puts Class B-1L's BB+ Rating on CreditWatch
------------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on the class
A-1L, A-2, A-3L, and B-1L notes issued by Diversified Asset
Securitization Holdings III L.P., a CDO backed by ABS and other
structured securities and managed by TCW Capital, on CreditWatch
with negative implications.

The CreditWatch placements reflect factors that have negatively
affected the credit enhancement available to support the notes.
These factors include par erosion of the collateral pool securing
the rated notes and a negative migration in the credit quality of
the performing assets in the pool.

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

             Ratings Placed On Creditwatch Negative
       Diversified Asset Securitization Holdings III L.P.

                       Rating          Current
         Class   To             From   Balance (mil. $)
         -----   --             ----   ---------------
         A-1L    AA/Watch Neg   AA              203.90
         A-2     AA/Watch Neg   AA               66.39
         A-3L    A-/Watch Neg   A-               30.00
         B-1L    BB+/Watch Neg  BB+              18.50

   Transaction Information

   Issuer:              Diversified Asset Securitization
   Holdings III L.P.
   Co-issuer:           DASH III Funding Corp.
   Current manager:     TCW Capital
   Underwriter:         Bear Stearns Cos. Inc.
   Trustee:             La Salle Bank N.A.
   Transaction type:    CDO of ABS

      Tranche                        Last          Current
      Information                    Rating        Action
      -----------                    ------        -------
      Date (MM/YYYY)                 04/2003       10/2004

      Cl. A-1L notes rtg.            AA            AA/Watch Neg
      Cl. A-1L notes bal.            $215.00mm     $203.93mm
      Cl. A-2 notes rtg.             AA            AA/Watch Neg
      Cl. A-2 notes bal.             $70.00mm      $66.39mm
      Cl. A-3L notes rtg.            A-            A-/Watch Neg
      Cl. A-3L notes bal.            $30.00mm      $30.00mm
      Cl. A O/C ratio (min. 105%)    110.98 %      101.48%
      Cl. B-1L notes rtg.            BB+           BB+/Watch Neg
      Cl. B-1 notes bal.             $18.5mm       $18.5mm
      Cl. B O/C ratio (min. 101.5%)  104.65%       95.68%

      Portfolio Benchmarks                        Current
      --------------------                        -------
      S&P wtd. avg. rtg.(excl. defaulted)         BBB
      S&P default measure (excl. defaulted)      .7%
      S&P variability measure (excl. defaulted)   1.78%
      S&P Correlation Measure (excl. defaulted)   1.75%
      Wtd. avg. coupon (excl. defaulted)          7.65%
      Wtd. avg. spread (excl. defaulted)          3.14%
      Oblig. rtd. 'BBB-' and above                65.82%
      Oblig. rtd. 'BB-' and above                 81.39%
      Oblig. rtd. 'B-' and above                  90.18%
      Oblig. rtd. in 'CCC' range                  9.82%
      Oblig. rtd. 'CC', 'SD', or 'D'              4.53%
      Obligors on Watch Neg (excl. defaulted)     0.09%

                 S&P Rated        Current
                 O/C (ROC)        Rating Action
                 ---------        -------------
                 Cl. A-1L notes   96.41%
                 Cl. A-2 notes    96.41%
                 Cl. A-3L notes   97.74%
                 Cl. B-1 notes    98.19%

For information on Standard & Poor's CDO Portfolio Benchmarks and
Rated Overcollateralization Statistic, see "ROC Report September
2004," published on RatingsDirect, Standard & Poor's Web-based
credit analysis system, and on the Standard & Poor's Web site at
http://www.standardandpoors.com/ Go to "Fixed Income," under
"Browse by Sector" choose "Structured Finance," and under
Commentary & News click on "More" and scroll down to the desired
articles.


DOANE PET: S&P Puts B- & CCC Ratings on CreditWatch Positive
------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B-' corporate
credit and 'CCC' senior unsecured debt and subordinated debt
ratings on Doane Pet Care Co. on CreditWatch with positive
implications following the company's announcement of plans to
refinance its existing credit facilities, of which about
$142 million is due in 2005.

The Brentwood, Tennessee-based pet food manufacturer has about
$569 million in debt.

"Upon successful completion of the proposed refinancing, we will
raise the corporate credit rating to 'B', as the new credit
facility will address Doane's near-term refinancing risk, as well
as provide relief from its existing tight bank covenants," said
Standard & Poor's credit analyst Jean Stout.  Additionally, during
2004, Doane addressed some of its commodity cost issues by
reaching a cost-sharing agreement with one of its major customers,
which limits the effect of potential future commodity cost swings.
Doane's existing 'B-' senior secured debt rating is not on
CreditWatch because it will be withdrawn upon closing of the
transaction.

Standard & Poor's also assigned its 'B+' bank loan rating and a
recovery rating of '1' to Doane's proposed $230 million senior
secured credit facility, indicating the expectation of high (100%)
recovery of principal in the event of default.  The proposed $230
million, five-year senior secured credit facility is due 2009, or
91 days prior to the March 15, 2007, maturity of the senior
subordinated notes, if these notes have not been refinanced.  The
new bank loan is rated one notch higher than the pending upgraded
corporate credit rating, because in a distressed scenario,
Standard & Poor's believes that lenders could expect high recovery
of principal.  The ratings are based on preliminary terms and are
subject to review upon final documentation.


ENRON: Judge Jones Remands Sierra Pacific Case to Bankr. Court
--------------------------------------------------------------
The U.S. District Court for the Southern District of New York has
vacated a prior summary judgment by the U.S. Bankruptcy Court for
the Southern District of New York that called for Sierra Pacific
Resources' (NYSE: SRP) electric utilities to pay Enron Power
Marketing Inc. a total of approximately $336 million for
terminated contracts.

In the ruling issued Sunday, Oct. 10, District Court Judge Barbara
Jones remanded the case back to the Bankruptcy Court to rehear
facts, issues and arguments of the case.

Walter Higgins, chairman and chief executive officer of Sierra
Pacific Resources said, "We are very pleased with this favorable
ruling.  Our company will have no further comment until we have
had an opportunity to fully review the judge's order."

Headquartered in Nevada, Sierra Pacific Resources is a holding
company whose principal subsidiaries are Nevada Power Company, the
electric utility for most of southern Nevada, and Sierra Pacific
Power Company, the electric utility for most of northern Nevada
and the Lake Tahoe area of California. Sierra Pacific Power
Company also distributes natural gas in the Reno-Sparks area of
northern Nevada.  Other subsidiaries include the Tuscarora Gas
Pipeline Company, which owns 50 percent interest in an interstate
natural gas transmission partnership and several unregulated
energy services companies.

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.

Enron 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.


EXIDE TECHNOLOGIES: CEO C.H. Muhlhauser Will Depart on April 1
--------------------------------------------------------------
Exide Technologies (NASDAQ: XIDE, www.exide.com), reported that
Craig H. Muhlhauser, its President and Chief Executive Officer,
will leave the Company on or prior to April 1, 2005.
Concurrently, the Company announced that its Board of Directors
has created an Executive Committee, consisting of Eugene Davis and
Michael Ressner, which will, among other things, work with Mr.
Muhlhauser and approve material decisions of the Company until a
permanent replacement for Mr. Muhlhauser is identified.

Mr. Muhlhauser stated: "It has been my great pleasure serving as
Exide's CEO over the past three years.  The Company is well
positioned to expand its global presence in the marketplace, aided
in large part by its successful emergence from Chapter 11
bankruptcy proceedings in May.  With the Chapter 11 proceeding
behind us, and a new Board of Directors in place, it is time for
me to pursue new opportunities.  I look forward to working with
the Executive Committee and the full Board over the next few
months to ensure a proper transition."

"Craig has served Exide well during his tenure, playing a critical
role in building Exide into one of the world's largest
manufacturers of lead acid batteries," said John P. Reilly, the
Chairman of the Company's Board of Directors.  Mr. Reilly
continued, "The Board deeply appreciates Craig's contributions to
Exide and his commitment to continue with the Company until his
successor is identified. We wish him well in his future
endeavors."

The Company's Board of Directors initiated an active search for
Mr. Muhlhauser's replacement and has retained a nationally
recognized executive search firm to assist it in identifying
appropriate candidates.

                    About Exide Technologies

Headquartered in Princeton, New Jersey, Exide Technologies, with
operations in 89 countries, is one of the world's largest
producers and recyclers of lead-acid batteries.  The Company's two
global business groups - transportation and industrial energy -
provide a comprehensive range of stored electrical energy products
and services for industrial and transportation applications.

Exide filed for chapter 11 protection on April 14, 2002
(Bankr. Del. Case No. 02-11125).  Matthew N. Kleiman, Esq., and
Kirk A. Kennedy, Esq., at Kirkland & Ellis, represent the Debtors
in their restructuring efforts.  On April 14, 2002, the Debtors
listed $2,073,238,000 in assets and $2,524,448,000 in debts.


FEDDERS CORP: S&P Slashes Corporate Credit Rating to CCC+ from B
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on air
treatment products manufacturer Fedders Corp. and Fedders North
America Inc., including its corporate credit ratings to 'CCC+'
from 'B'.  The outlook is negative.

The Liberty Corner, New Jersey-based company's total debt
outstanding at June 30, 2004, was about $197 million.

"The downgrade and negative outlook reflect the significant
erosion in Fedders' profitability, cash flows and credit
protection measures," said Standard & Poor's credit analyst Jean
Stout.  Fedders' EBITDA for the first half of 2004 declined 45%,
despite a 2% rise in sales. Moreover, the company's inventory
levels grew 35% over the same period in 2003.  This increase is
due to not only the cooler than normal weather conditions in North
America during the spring and summer seasons but also is a result
of a build-up of inventory to support the company's expansion of
central air conditioner sales and other products (specific for the
Asian markets).

Standard & Poor's is very concerned about the company's ability to
reverse these negative operating trends and strengthen its
financial profile in the near term, given the seasonality of its
business.  (Fedders typically reports a loss during the second
half of the calendar year, as a majority of shipments and revenue
is historically derived during the first six months of the
calendar year.)  As a result, Standard & Poor's is also concerned
that Fedders liquidity will become constrained in the near term.


FISHER SCIENTIFIC: Officers Participate in Stock Trading Plans
--------------------------------------------------------------
Fisher Scientific International Inc.'s (NYSE: FSH) Chairman and
Chief Executive Officer, Paul M. Montrone, and its Vice Chairman,
Paul M. Meister, are each participating in a pre-arranged stock
trading plan to facilitate the orderly liquidation of shares
subject to stock options expiring in January 2008.  The stock
options were awarded to Messrs. Montrone and Meister in January
1998 as long-term incentives.

The stock sale plans were established in accordance with the
Securities and Exchange Commission Rule 10b5-1.  Rule 10b5-1
provides directors and officers of public companies with a
systematic method of obtaining liquidity in their securities
holdings, while minimizing potential disruption to the financial
markets by spreading stock sales over a defined period of time.  A
10b5-1 plan may only be adopted when the company is outside of a
blackout period and when the individual is not in possession of
material non-public information.

Under the 1998 Equity and Incentive Plan, Mr. Montrone and Mr.
Meister have 1.6 million and 0.8 million options outstanding,
respectively.  According to the terms of their respective 10b5-1
plans, up to 0.6 million shares of the company's common stock may
be sold on Mr. Montrone's behalf at a rate of up to 50,000 shares
per week, beginning the week of Oct. 11; up to 0.8 million shares
of the company's common stock may be sold on Mr. Meister's behalf
at a rate of up to 20,000 shares per month, beginning the week of
Oct. 18.

If all of the shares related to the options expiring in January
2008 are sold, Messrs. Montrone and Meister will continue to be
two of the largest individual holders of Fisher Scientific's
common stock. Mr. Montrone will own approximately 2.5 million
shares and options, or 1.9 percent of the company's total shares
and options, and Mr. Meister will own approximately 1.6 million
shares and options, or 1.2 percent.

All transactions will be subject to certain price restrictions
established under the plans and may be terminated at any time. The
transactions will be disclosed publicly through Form 144 and Form
4 filings with the SEC.

            About Fisher Scientific International Inc.

Fisher Scientific International Inc. (NYSE: FSH) --
http://www.fisherscientific.com/ -- offers more than 600,000
products and services to more than 350,000 customers located in
approximately 145 countries. Fisher's customers include
pharmaceutical and biotech companies; colleges and universities;
medical-research institutions; hospitals and reference labs;
quality-control, process-control and R&D labs in various
industries; as well as government and first responders. As a
result of its broad product offering, electronic-commerce
capabilities and integrated global logistics network, Fisher
serves as a one-stop source of products, services and global
solutions for its customers. The company primarily serves the
scientific-research and clinical-laboratory markets.

                         *     *     *

As reported in the Troubled Company Reporter on Aug. 9, 2004,
Moody's Investors Service upgraded Fisher Scientific
International, Inc.'s senior implied rating to Ba2 from Ba3 and
its issuer rating to Ba2 from B1. The upgrades were assigned as
the merger with Apogent Technologies, Inc., has been completed.
The rating agency also rated Fisher's new senior secured bank
facilities Ba2 and its new senior subordinated notes due 2014 at
Ba3. The new senior subordinated notes were used primarily to
tender for Apogent's 6.5% Senior Subordinated Notes due 2013.
Fisher's existing ratings were raised as suggested in previous
press releases.  The outlook for Fisher's ratings is positive.

At the same time, Moody's lowered to Ba2 the ratings on Apogent's
existing debt securities and left them under review for possible
downgrade.  Apogent's 6.5% Senior Subordinated Notes due 2013 were
lowered to Ba3.  Apogent's senior implied and issuer ratings were
lowered to Ba2 and will be withdrawn.  The ultimate structure for
the Apogent securities remains unclear but it is unlikely that any
security would be rated higher than Fisher's prospective Ba2
senior implied rating.  Moody's review of Apogent's ratings will
also consider the extent to which Apogent's operations will be
merged into Fisher's organizational structure, the position of
Apogent's debt in the new capital structure, and an evaluation of
any support mechanisms related to Apogent's debt.  For these
reasons Apogent's ratings will not be decided until more details
are known.

Moody's ratings actions recognize Fisher's material use of equity
in its most recent large acquisitions and this demonstration of
financial prudence was a key factor in the ratings upgrade.  The
prudently levered nature of these acquisitions improves the
likelihood that enhanced cash flow generation will allow for
substantial debt reduction in the medium term. Moody's believes
that despite risks associated with integrating the companies, the
combined company should generate significant cash flow that would
allow for significant debt reduction in the first 12-24 months.
By merging with Apogent, Fisher will increase sales from
proprietary products, which carry better margins, to approximately
60% and significantly enhance its position in life-sciences.  In
time, Moody's expects that the combined company will be able to
reduce costs, by as much as $100 million, by eliminating redundant
functions, consolidating manufacturing capabilities, and
streamlining its distribution facilities.  Further supporting its
performance is Fisher's base of recurring revenues; approximately
80% of revenues are derived from consumables.


FORT WORTH OSTEOPATHIC: Closure Nixes 1,000 Jobs & 265 Beds
-----------------------------------------------------------
Fort Worth Osteopathic Hospital closed Friday, October 8, 2004.
The Houston Chronicle reports that the 265-bed facility's closure
results in 1,000 job losses and leaves "more than 100 patients in
limbo."

Interim chief executive Justin Doheny told reporters that the
hospital defaulted on $82 million in bonds after failing to make
$580,000 payments due in August and September.

The Associated Press relates that the hospital had financial
problems since the late 1990s.   About a year ago, the board
decided to try to partner with a hospital system.  Eighteen
organizations initially expressed interest, but the field dwindled
to three in the last several weeks, Mr. Doheny told the AP.  After
negotiations with the final interested party fell through
Thursday, the board voted unanimously to shutter the hospital.  No
decision has been made on whether it will file for bankruptcy.

"We turned over every rock," Mr. Doheny told the AP. "There is
nothing more we could have done."  Unlike large hospital systems,
the Osteopathic Medical Center of Texas was too small to have much
leverage to negotiate higher payments from managed-care
organizations, so it routinely was paid less than it needed to
operate, Mr. Doheny added.

MBIA, Inc., insured three series of bonds for the hospital between
1993 and 1997.  MBIA disclosed Friday that its "third quarter will
reflect a case loss reserve of approximately $50 million resulting
from its $70 million net par exposure to Fort Worth Osteopathic
Hospital."

Doing business Osteopathic Medical Center of Texas, Fort Worth
Osteopathic Hospital consist of more than 400 physicians, 8
neighborhood family medicine clinics, a 265-bed regional referral
hospital and a full complement of allied health services.

As reported in the Troubled Company Reporter on Oct. 4, 2004,
Moody's Investors Service downgraded Fort Worth Osteopathic
Hospital's dba Osteopathic Medical Center of Texas underlying
ratings to B3 and anticipated a further downgrade.  Moody's
indicates that $7 million of the Series 1993, Series 1996 and
Series 1997 bonds issued through the Tarrant County Health
Facilities Development Corporation are uninsured.


GLOBAL CROSSING: Confirms Broadview Settlement Agreement
--------------------------------------------------------
Broadview Networks Holdings, Inc., on behalf of itself and its
affiliates, including Broadview Networks, Inc., and Broadview NP
Acquisition Corp., provides a variety of telecommunications
services to the GX Debtors and their reorganized debtor
subsidiaries, including but not limited to, originating and
terminating calls on Broadview Networks' telecommunications
network.

On March 22, 2002, Broadview Networks also purchased certain
claims and receivables against Global Crossing from Network
Plus Corp. and Network Plus, Inc., in their Chapter 11 bankruptcy
proceedings.

On September 30, 2002, Broadview Networks timely filed a
$2,201,757 proof of claim against the Debtors with respect to
both the claims it purchased and its own claims for prepetition
services provided to the Debtors.  Broadview Networks also
contends that the Debtors owe approximately $555,968 for
postpetition services as of January 31, 2004.

The Debtors provide a variety of telecommunications services to
Broadview Networks, including but not limited to, long distance
telecommunications services.  The Debtors contend that Broadview
Networks owes them $1,585,909 on account of these
telecommunications services.  Broadview Networks disputes all but
$489,689 of that amount, asserting it has a valid right to offset
for the difference with certain of its prepetition claims against
the Debtors.

After extensive arm's-length negotiations, the Debtors and
Broadview Networks have reached a settlement which, among other
things:

      (i) resolves the disputes between the Parties;

     (ii) provides for Broadview Networks' payment to Global
          Crossing of $785,897 -- of which $435,897 has already
          been paid;

    (iii) releases or offsets other claims between the Parties;

     (iv) establishes guidelines for the resolution of certain
          postpetition disputes; and

      (v) withdraws all of Broadview Networks' prepetition claims
          against the Debtors in their Chapter 11 cases.

A free copy of the Settlement Agreement is available at:

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

Subsequently, the parties entered into a stipulation confirming
the provisions of the Settlement Agreement.

Headquartered in Florham Park, New Jersey, Global Crossing Ltd.
-- http://www.globalcrossing.com/-- provides telecommunications
solutions over the world's first integrated global IP-based
network, which reaches 27 countries and more than 200 major cities
around the globe. Global Crossing serves many of the world's
largest corporations, providing a full range of managed data and
voice products and services.

The Company filed for chapter 11 protection on January 28, 2002
(Bankr. S.D.N.Y. Case No. 02-40188). When the Debtors filed for
protection from their creditors, they listed $25,511,000,000 in
total assets and $15,467,000,000 in total debts.  Global Crossing
emerged from chapter 11 on Dec. 9, 2003. (Global Crossing
Bankruptcy News, Issue No. 67; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


GOOSE CREEK LLC: Case Summary & 1 Largest Unsecured Creditor
------------------------------------------------------------
Debtor: Goose Creek, LLC
        3411 Oakwood Terrace, North West
        Washington, District of Columbia 20010

Bankruptcy Case No.: 04-01480

Chapter 11 Petition Date: October 1, 2004

Court: District of Columbia (Washington, D.C.)

Judge: S. Martin Teel, Jr.

Debtor's Counsel: Richard B. Rosenblatt, Esq.
                  Law Offices of Richard B. Rosenblatt, PC
                  30 Courthouse Square, Suite 302
                  Rockville, MD 20850
                  Tel: 301-838-0098

Estimated Assets: $1 Million to $10 Million

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

Debtor's 1 Largest Unsecured Creditor:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Ralph Kaiser Co.              1/5 interest in the        Unknown
c/o David Roll, receiver      real property and
Ritzert & Leyton, PC          improvements located
4084 University Dr. Ste. 100  at 2300 Champlain St.
Fairfax, VA 22030             Washington, D.C.


GROSVENOR ORLANDO: Court Confirms Plan of Reorganization
---------------------------------------------------------
The Honorable Arthur B. Briskman of the U.S. Bankruptcy Court for
the Middle District of Florida, Orlando Division, entered an order
confirming the Amended Plan of Reorganization filed by Grosvenor
Orlando Associates dba Grosvenor Resort.

The Court is satisfied with the Debtor's cash flow projections
demonstrate a reasonable likelihood that the Reorganized Debtor
will be able to make all payments under the Plan and sustain
itself as a viable operating entity.

The Plan provides that each holder of an allowed Priority Tax
Claim will be paid in full, together with 6% annual interest, over
six years from the date of assessment.

Claims for wages, vacation and benefits will be paid in full.

ORIX USA Corporation, the largest secured creditor of Grosvenor
Resort, holds a $50 million claim, which will be reinstated at the
same interest rate, and an appropriate control agreement will be
entered into by the two parties to allow ORIX to have a perfected
priority lien on Grosvenor's cash and operating account.

Holders of General Unsecured Claims will receive promissory notes
for 100% of what they're owed.  Those notes will accrue interest
at 5% per year and amortize over 60 months starting March 1, 2005
(or the date a claim becomes an allowed claim).

Judge Briskman finds that each holder of an impaired claim that
has not accepted the Plan will receive or retain under the Plan,
property of a value that is not less than the amount that the
holder will receive or retain if the estate was liquidated.
Accordingly, the Plan meets the standard for confirmation set
forth in 11 U.S.C. Sec. 1129(b) and all equity interest holders
will retain their ownership in the reorganized Debtor.

Headquartered in Orlando, Florida, Grosvenor Orlando Associates, a
California Limited Corporation, owns a full service resort complex
and is located on 13 beautifully landscaped, lakeside acres
offering two heated swimming pools, a hot tub, lighted tennis
courts, basketball, volleyball, shuffle board, electronic game
room and fitness center.

The Company filed for chapter 11 protection on February 3, 2004
(Bankr. M.D. Fla. Case No. 04-01085).  R. Scott Shuker, Esq., at
Gronek & Latham, LLP, represents the Debtor in its restructuring
efforts.  When the Company filed for protection from its
creditors, it listed estimated assets of over $10 million and
estimated debts of over $50 million.


HAWK CORP: Moody's Puts B2 Rating on Planned $100M Unsecured Notes
------------------------------------------------------------------
Moody's Investors Service took these rating actions in conjunction
with Hawk Corporation's proposed refinancing transactions and
improving operating prospects:

   -- Improved Hawk's rating outlook to positive, from negative;

   -- Assigned a B2 rating for Hawk's proposed $100 million
      guaranteed senior unsecured notes due October 2014, to be
      issued under Rule 144A with registration rights;

   -- Confirmed Hawk's B2 senior implied rating;

   -- Downgraded Hawk's senior unsecured issuer rating to B3, from
      B2, (recognizing that this corporate-level rating presumes
      no subsidiary guarantees to ameliorate structural
      subordination associated with Hawk's holding company legal
      structure)

Hawk additionally proposes to execute a new five-year $30 million
asset-based revolving credit facility, which has not been rated by
Moody's.

The net proceeds of the proposed guaranteed senior unsecured notes
offering will be utilized to repay the approximately $66 million
principal plus accrued interest remaining under Hawk's existing
12% guaranteed senior unsecured notes due December 2006, all
outstandings under Hawk's $53 million of existing guaranteed
senior secured credit facilities due October 2006, and all fees
and expenses incurred in connection with these transactions.

Hawk has tendered for all of the remaining 12% senior notes due
2006, at a price equal to 100% plus a nominal consent fee.  Any
notes that are not validly tendered will likely then be called
once the call premium drops to par on December 1, 2004.  The
proposed revolving credit facility will be available to cover any
funds shortfall on the closing date, and will additionally support
ongoing working capital, general corporate purposes, and letter of
credit needs.  The ratings of the existing notes and credit
facilities will be withdrawn upon completion of the proposed
transactions.

The ratings negatively reflect that while Hawk's business
prospects appear to be improving, the company's operations are
expected to generate negative free cash flow in 2004 -- and
potentially only nominal free cash flow in 2005.

Hawk faces significant near-term demands on its liquidity as it
manages significant revenue growth, launches of several material
new contracts, rising raw materials costs, and costs to move a
friction plant to Oklahoma from Ohio.

To maintain a competitive advantage within its core business
niches, Hawk is also making significant strategic investment to
extend product lines, expand the range of markets served (most
notably the independent aftermarket and several new geographic
markets), open plants in China, and obtain high tonnage powdered
metal presses.

Hawk's management indicates that the company has been successful
at imposing steel surcharges on its customers in order to recoup a
high potion of the increased commodity cost, but that a meaningful
lag period will transpire until these surcharges are actually
realized.

The company furthermore had to overstock certain components of
inventory during 2004 in order to complete the transition of the
friction plant to Oklahoma without delaying deliveries to
customers and also to minimize disruption of production lines
associated with delayed steel deliveries.  Hawk's operations
additionally remains vulnerable given its small absolute size
relative to many customers and competitors, as well as the
cyclicality of its end markets.  The company is currently pursuing
strategies to lower its high 48% effective tax rate.

The ratings and the change in Hawk's rating outlook to positive
more favorably reflect that the proposed refinancing transactions
will improve the company's debt maturity profile, reduce the
average cost of debt, and increased externally available
liquidity.

In addition, Hawk is benefiting from significantly rising demand
across several of the company's meaningful business segments as
the overall economy bounces back from recession -- most notably
within the construction, truck, and agricultural markets.

Market consensus is that the increased demand within these
critical end markets should be sustainable over the near-to-
intermediate term given that these markets have only recently
risen from prolonged troughs.  Since Hawk's focus is primarily
non-automotive and associated with high dollar value equipment,
the majority of programs on which the company has content
typically have long average lives.

The end markets that Hawk serves are unusually diversified
relative to the size of the company, which should further enable
the company to achieve greater stability.  It is also notable that
Hawk's largest customer -- Caterpillar -- accounts for less that
than 9% of revenues and its second largest customer -- Eaton --
accounts for less than 5.5% of revenues.

Hawk's exposure to the volatile aerospace segment has been
significantly reduced since September 11, 2001 down to about 10%
of revenues.  Only about 5% of Hawk's revenues are driven by the
highly competitive automotive sector.

The company has also reclassified its motor segment as a
discontinued operation and stemmed the losses that these
operations were generating.  Hawk's two operating plants
established in China (the second of which recently became
operational) are anticipated to play an important role in the
company's ability to lower its cost structure and serve global
markets.

Hawk is generating new business opportunities across many of its
product lines, and is in the process of launching several new
programs -- most notably the Caterpillar mining truck program, the
new Eaton friction program, and the new PEP Boys independent
aftermarket performance brake line.

Hawk expects to realize higher-margin powdered metal business and
to develop a broader product line with more end-user applications
once the four new high-tonnage presses the company invested in
during 2004 are operational.

Hawk anticipates that rate of substitution of powdered metal for
forging and stampings will continue to increase as the powdered
metal density, size capabilities, and other qualities improve and
the cost continues to decline.  Powdered metal parts are notably
also near net-shaped and require minimal machining.

Future events that would be expected to have negative implications
for Hawk's ratings or outlook include:

      (i) an inability of the company to generate positive free
          cash flow by 2005,

     (ii) insufficient liquidity,

    (iii) an inability to recoup sufficient raw materials price
          increases through surcharges or increased pricing,

     (iv) lack of availability of critical raw materials,

      (v) an unexpected fall-off in end market demand,

     (vi) unanticipated complications resulting from aggressive
          global expansion,

    (vii) ongoing losses and an inability to sell the motor
          division, or

   (viii) a material acquisition.

Future events that would be expected to have favorable rating
implications include:

      (i) positive free cash flow generation evidencing that the
          company's business strategies and resource management
          are on target,

     (ii) achievement of meaningful debt reduction,

    (iii) realization of additional new business awards (including
          within China and other international markets),

     (iv) continued improvement of the company's fixed cost
          structure, and

      (v) reduction of inventory balances.

Hawk's proposed guaranteed senior secured asset-based revolving
credit facility will be secured by all assets, excluding machinery
and equipment and real estate (on which negative pledges will be
provided).  The facility will additionally be supported by pledges
of 100% of the stock of wholly owned domestic subsidiaries and 66
2/3% of foreign subsidiaries.

Advances against the facility will be subject to a borrowing base
consisting of:

   (1) the sum of 85% of eligible accounts receivable, plus

   (2) 60% of eligible raw materials and finished goods inventory,
       plus

   (3) 25% of eligible work in process inventory.

Advances against inventory will be limited to a maximum of
$17.5 million.

The credit agreement will be guaranteed by all subsidiaries of
Hawk, subject to certain exclusions.  The company estimates that
the borrowing base calculation at closing will exceed the $30
million commitment, and that about $20 million of the facility
will be unused after accounting for loans and letters of credit.

Hawk's working capital requirements typically reach a highpoint
during the third and fourth quarters of each year, which has been
exacerbated during 2004 as a result of the repaid revenue growth
that the company is realizing and the stockpiling of certain
inventory for reasons noted.

The credit agreement will only be subject to a minimum equity
covenant, unless availability falls below $10 million.  At that
point a minimum fixed charge coverage ratio would also become
effective.

The B2 rating of the proposed guaranteed senior unsecured notes
reflects their effective subordination to the proposed senior
secured debt.  The notes will be guaranteed on a senior unsecured
basis by all existing and future domestic restricted subsidiaries.
These notes have the same rating as the senior implied rating due
to the preponderance of the notes relative to Hawk's total pro
forma debt.  The indenture will contain a 35% clawback for equity
offerings until 2008 and will be redeemable after 2009 at
established redemption prices.  Proceeds from certain asset sales
may also be used to repurchase a portion of the notes.  The notes
will contain change of control provisions and a 30-day grace
period for non-payment of interest.

For the last twelve months ended June 30, 2004 Hawk's total
debt/EBITDA leverage was 3.6x and 4.0x, before and after adjusting
for the present value of operating leases and letters of credit.
EBIT coverage of cash interest approximated 1.7x.  While these
measures are relatively strong compared to other issuers within
the B2 senior implied rating category, free cash flow after
capital expenditures approximated negative $5.2 million and is
expected to decline further within the third quarter.  This is
primarily as a result of working capital expansion to support the
company's rapid revenue growth.

Hawk Corporation, headquartered in Cleveland, Ohio, is a leading
supplier of friction products and powdered metal precision
components for industrial, agricultural, powersports and aerospace
applications.  Friction products include parts for brakes,
clutches, and transmissions.  Powdered metal precision components
include components in pumps, motors, transmissions and other
equipment.  Annual revenues approximate $220 million.


INTERSTATE BAKERIES: Hires Kurtzman Carson as Claims Agent
----------------------------------------------------------
Interstate Bakeries Corporation has hundreds of thousands of
creditors, potential creditors and parties-in-interest to whom
certain notices, including notice of their Chapter 11 cases, must
be sent.  The size of the creditor body makes it impracticable for
the Debtors or the Court to, without assistance, undertake the
task of sending notices to creditors and other parties-in-
interest.

The Debtors believe that the most effective and efficient manner
by which to provide notice and solicitation in their bankruptcy
cases is to engage an independent third party to act as an agent
of the Court.

Accordingly, the Debtors seek the Court's authority to employ
Kurtzman Carson Consultants, LLC, as their claims, noticing and
balloting agent.

Kurtzman is a data processing firm that specializes in Chapter 11
administration, consulting and analysis, including noticing,
claims processing, voting and other administrative tasks in
Chapter 11 cases.  The Debtors are confident that Kurtzman's
assistance will expedite service of notices, streamline the
claims administration process and permit the Debtors to focus on
their reorganization efforts.

The Debtors reviewed proposals of several potential claims and
noticing agents and determined that Kurtzman's fee structure is
at least as favorable as any of the firm's competitors.  The
Debtors also believe that Kurtzman is well-qualified to provide
the necessary services, expertise, consultation and assistance
because the firm has assisted and advised numerous Chapter 11
debtors in connection with noticing, claims administration and
reconciliation and administration of plan votes.

At the request of the Debtors or the Bankruptcy Court Clerk's
Office, Kurtzman will:

   (A) assist the Debtors in the preparation and filing of their
       Schedules of Assets and Liabilities and Statement of
       Financial Affairs;

   (B) prepare and serve required notices in the Debtors' Chapter
       11 cases, including:

          (i) A notice of commencement of the bankruptcy cases
              and the initial meeting of creditors under Section
              341(a) of the Bankruptcy Code;

         (ii) A notice of the claims bar date;

        (iii) Notices of objections to claims;

         (iv) Notices of any hearings on a disclosure statement
              and confirmation of a reorganization plan;

          (v) Other miscellaneous notices as the Debtors or the
              Court may deem necessary or appropriate for an
              orderly administration of these Chapter 11 cases;
              and

         (vi) Assist with the publication of required notices, as
              necessary;

   (C) within five business days after the service of a
       particular notice, prepare for filing with the Clerk's
       Office an affidavit of service that includes:

          (i) A copy of the notice served;

         (ii) An alphabetical list of persons on whom the notice
              was served, along with their addresses; and

        (iii) The date and manner of service;

   (D) maintain copies of all proofs of claim and proofs of
       interest filed;

   (E) maintain official claims registers by docketing all proofs
       of claim and proofs of interest in a claims database that
       includes these information for each claim or interest
       asserted:

          (i) The name and address of the claimant or interest
              holder and any agent, if the proof of claim or
              proof of interest was filed by an agent;

         (ii) The date the proof of claim or proof of interest
              was received by Kurtzman and the Court;

        (iii) The claim number assigned to the proof of claim or
              proof of interest; and

         (iv) The asserted amount and classification of the
              claim;

   (F) implement necessary security measures to ensure the
       completeness and integrity of the claims registers;

   (G) transmit to the Clerk's Office a copy of the claims
       registers on a weekly basis, unless requested by the
       Clerk's Office on a more or less frequent basis;

   (H) maintain a current mailing list for all entities that have
       filed proofs of claim or proofs of interest, and make the
       list available to the Clerk's Office or any party-in-
       interest by request;

   (I) provide access to the public for examination of copies of
       the proofs of claim or proofs of interest filed, without
       charge during regular business hours;

   (J) create and maintain a public access website setting forth
       pertinent case information and allowing access to certain
       documents filed in the Debtors' Chapter 11 cases;

   (K) record all transfers of claims pursuant to Rule 3001(e) of
       the Federal Rules of Bankruptcy Procedure and provide
       notice of these transfers as required by Rule 3001(e);

   (L) assist the Debtors in the reconciliation and resolution of
       claims;

   (M) comply with applicable federal, state, municipal and local
       statutes, ordinances, rules, regulations, orders and other
       requirements;

   (N) provide temporary employees to process claims, as
       necessary;

   (O) promptly comply with further conditions and requirements
       as the Clerk's Office or the Court may at any time
       prescribe;

   (P) provide balloting and solicitation services, including
       producing personalized ballots and tabulating creditor
       ballots on a daily basis; and

   (Q) provide other claims processing, noticing, balloting and
       related administrative services as may be requested from
       time to time by the Debtors.

Kurtzman will also serve as the Debtors' solicitation and
disbursing agent in connection with their Chapter 11 plan
process.

The Debtors will compensate and reimburse Kurtzman in accordance
with the payment terms, procedures and conditions set forth in
the employment agreement for services rendered and expenses
incurred.  If any dispute arises between the parties with respect
to fees and expenses, this dispute will be presented to the Court
for resolution.

The Debtors ask the Court to treat Kurtzman's fees and expenses
as an administrative expense of the Debtors' Chapter 11 estates,
which will be paid in the ordinary course of business.

As part of the overall compensation payable to Kurtzman, the
Debtors have agreed to certain limitations of liability and
indemnification obligations.  Both parties believe that the
provisions are customary and reasonable for restructuring
advisory engagements, both out-of-court and in Chapter 11.

Before the Petition Date, Kurtzman performed certain consulting
and other administrative services for the Debtors.  The Debtors
do not owe the firm any amount for services performed or expenses
incurred before the Petition Date.  Moreover, before the Petition
Date, the Debtors paid Kurtzman a $75,000 evergreen retainer.

Eric S. Kurtzman, Chief Executive Officer of Kurtzman, assures
the Court that the firm:

   (a) does not have any adverse connection with the Debtors, the
       Debtors' creditors, any other party-in-interest, or the
       United States Trustee;

   (b) does not hold or represent an interest adverse to the
       Debtors' estates; and

   (c) is a "disinterested person" as that term is defined in
       Section 101(14) of the Bankruptcy Code, as modified by
       Section 1107(b) of the Bankruptcy Code.  The firm's
       members and employees:

       * are not creditors, equity security holders or insiders
         of the Debtors;

       * are not and were not investment bankers for any
         outstanding security of the Debtors;

       * have not been, within three years before the Petition
         Date:

         -- investment bankers for a security of the Debtors; or

         -- an attorney for the investment banker in connection
            with the offer, sale, or issuance of a security of
            the Debtors; and

   (d) were not, within two years before the Petition Date, a
       director, officer, or employee of the Debtors or of any
       investment banker.

Mr. Kurtzman attests that the firm:

   * is not and will not be employed by the United Sates
     government or any federal agency, and will not seek any
     compensation from the Government;

   * by accepting employment in the Debtors' Chapter 11 cases,
     waives any right to receive compensation from the
     Government;

   * is not an agent of the Government and is not acting on
     behalf of the Government;

   * will not misrepresent any fact to the public; and

   * will not employ any past or present employees of the Debtors
     for work involving their Chapter 11 cases.

Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R).  The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S.

The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814).  J. Eric Ivester, Esq., and Samuel S. Ory, 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 $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6.0% senior subordinated convertible notes due August 15, 2014
on August 12, 2004) in total debts.  (Interstate Bakeries
Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


KAISER ALUMINUM: Court Orders Counsel to File Rule 2019 Statements
------------------------------------------------------------------
Judge Fitzgerald entered an order on August 25, 2004, and an
amendatory order on August 27, 2004, in the Chapter 11 cases
concerning, among others:

    * W.R. Grace & Co.,
    * USG Corp.,
    * Kaiser Aluminum Corporation, Inc., and
    * Owens Corning,

directing all counsel representing more than one creditor or
equity security holder to electronically file and serve the
statement required by Rule 2019 of the Federal Rules of Bankruptcy
Procedure before October 25, 2004.

Exhibits to the Rule 2019 statements will be available from the
Clerk of Court through Parcels, Inc., 1-800-343-1742.

The counsel's disclosure obligation is continuing and, therefore,
supplemental statements setting forth any material changes in the
facts contained in the Rule 2019 statements must be submitted 30
days after the end of each 60-day period.  The initial
supplemental filing date will be February 1, 2005, covering the
period from the date the first 2019 statement is filed through
December 31, 2004.

                 Baron & Budd and Silber Pearlman
                        Want Order Amended

Baron & Budd, P.C., and Silber Pearlman, LLP, represent thousands
of tort victims asserting personal injury claims against the
Debtors.

Kathleen M. Miller, Esq., at Smith, Katzenstein & Furlow, LLP, in
Wilmington, Delaware, tells Judge Fitzgerald that Baron & Budd and
Silber Pearlman generally use standard retention agreements for
their clients.  These contain the agreement between the client and
the law firm whereby the law firm is empowered to act on the
client's behalf.  It also contains privileged and confidential
information, including case strategy and the financial terms of
the law firm's retention.  Because they are standard agreements,
the completed and executed agreements vary only by the name of the
client and sometimes by the financial terms of the law firm's
employment.

Ms. Miller argues that literal compliance with Rule 2019 is
difficult, burdensome, and very expensive for Baron & Budd,
Silber Pearlman and other affected firms since they represent
thousands of Tort Victims.  However, Baron & Budd and Silber
Pearlman do not seek to be excused from filing a Rule 2019
statement.  Instead, the Firms ask the Court to slightly amend its
Orders to ease the difficulty of compliance while preserving the
intentions of Rule 2019.

Specifically, Baron & Budd and Silber Pearlman ask the Court to:

   (a) clarify that exemplars of the documents by which the Firms
       are empowered to act on the claimants' behalf may be
       attached to any Rule 2019 statement, with a verified
       statement that all Tort Victims have signed a similar
       agreement.  If materially different authorizing documents
       were used at different times, exemplars of each form of
       agreement will be attached;

   (b) allow the Firms to file redacted document to exclude
       other information not required by Rule 2019, especially
       privileged and confidential information;

   (c) exclude statement describing how the Firms "became
       involved with the claimant."  It is not a requirement of
       Rule 2019 and invades the attorney-client relationship;

   (d) require the first four digits of the Social Security
       number of the Tort Victims instead of the last four
       digits to avoid theft and invasion of privacy;

   (e) exclude statement of the amount and time of acquisition of
       the claim, which is not proper in a mass tort case; and

   (f) allow for the address of the claimants to be in care of
       counsel.

               Insurers Object to Baron & Budd and
                    Silber Pearlman's Request

On behalf of various insurers of the Debtors, Kristi J. Doughty,
Esq., at Whittington & Aulgur, in Odessa, Delaware, asks the
Court to enforce Rule 2019 of the Federal Rules of Bankruptcy
Procedure and its prior orders by requiring all counsel
representing more than one creditor to comply with the Amendatory
2019 Order fully and forthwith.

The Insurers include:

   (1) Certain Underwriters at Lloyd's, London and Certain London
       Market Insurance Companies,

   (2) Columbia Casualty Insurance Company,

   (3) Transcontinental Insurance Company,

   (4) Harbor Insurance Company,

   (5) Continental Insurance Company,

   (6) Century Indemnity Company,

   (7) ACE Property & Casualty Company,

   (8) Pacific Employers Insurance Company,

   (9) Industrial Underwriters Insurance Company, and

  (10) Central National Insurance Company of Omaha

The Insurers argue that:

   (a) reconsideration is allowed only to correct manifest errors
       of law or fact to present newly discovered evidence.
       Baron & Budd and Silber Pearlman's request presents none
       of these grounds, therefore, it must be denied;

   (b) requiring all law firms representing multiple claimants to
       comply with Rule 2019 is not manifest error but manifestly
       correct;

   (c) the arguments presented by Baron & Budd and Silber
       Pearlman have already been rejected in this and other
       asbestos bankruptcy cases by attorneys evading their
       mandatory disclosure obligations under Rule 2019.  No
       previously unavailable evidence is presented to warrant
       reconsideration;

   (d) Baron & Budd and Silber Pearlman failed to satisfy the
       procedural requirements for reconsideration by failing to
       show manifest error or supply any newly discovered
       evidence;

   (e) disclosures contained in the retention agreement are not
       unduly burdensome and are required of every law firm that
       represents multiple creditors in bankruptcy;

   (f) without full compliance with Rule 2019, it would be
       difficult if not impossible for the Court to determine
       whether any of the claims being submitted and voted are
       invalid for that or other reasons.  Rule 2019 disclosures
       in other cases strongly suggest that some claimants are
       asserting multiple claims through multiple law firms; and

   (g) the Firms' request fails on both procedural and
       substantive grounds, therefore, must be denied.

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
June 30, 2004, the Debtors listed $1.619 billion in assets and
$3.396 billion in debts.  (Kaiser Bankruptcy News, Issue No. 50;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


KAISER ALUMINUM: Agrees to Allow Performance & Volks' Claims
------------------------------------------------------------
Performance Contractors, Inc., and AKM, LLC, Volks Constructors
Division, are contractors that provided services to Kaiser
Aluminum & Chemical Corporation before the Petition Date when its
alumina refinery in Gramercy, Louisiana, was rebuilt after an
explosion that occurred in July 1999.

Performance filed Claim No. 1513 for $1,175,425, while Volks
filed Claim No. 1514 for $94,518, including interest and
attorneys' fees.  Both Claims assert secured status based on
liens that were perfected with respect to the Gramercy Refinery
for work Performance and Volks rendered before the Petition Date.

Performance and Volks objected to the sale of the Gramercy
Refinery.  Both Contractors asserted that they had valid and
perfected liens with respect to the Refinery, and requested
immediate payment on their liens from the sale proceeds.

The Debtors disputed the validity of the liens.  Specifically,
the Debtors asserted that the liens were invalid and
unenforceable due to existing defects, including:

   (a) a lien waiver provision whereby Performance allegedly
       waived a majority of its lien rights; and

   (b) Volk's alleged failure to comply with a mandatory
       condition of the Louisiana Private Works Act.

Performance argued that based on conflicting provisions in its
contract with KACC, and the course of dealing between the
parties, it had not waived any lien rights.  Performance and
Volks continued to assert that their liens had been perfected and
that they were entitled to payment in full from the sale
proceeds.

On July 19, 2004, the United States Bankruptcy Court for the
District of Delaware approved the sale.  The Sale Order
required KACC to place in escrow:

   (a) $1,250,000 for the amount of any allowed secured claim of
       Performance, until the Claim is established by the Court;
       and

   (b) $110,000 for the amount of any allowed secured claim of
       Volks, until the Claim is established by the Court.

Following negotiations, KACC, Performance, and Volks agree to
resolve the Claims under these terms:

   -- Claim No. 1513 will be allowed as:

      (a) a secured claim against KACC for $650,000; and

      (b) a general non-priority unsecured claim against KACC for
          $525,425;

   -- Claim No. 1514 will be allowed as:

      (a) a secured claim against KACC and in favor of Volks for
          $75,000; and

      (b) a general non-priority unsecured claim against KACC and
          in favor of Volks for $19,518;

   -- The secured portion of Claim Nos. 1513 and 1514 will be
      paid either:

      (a) from the sale proceeds within two business days after
          the closing of the sale; or

      (b) immediately upon approval of the Stipulation from the
          applicable escrow account established at the closing of
          the sale,

      whichever occurs later; and

   -- The general, non-priority unsecured portion of the Claims
      will be satisfied in accordance with a reorganization plan.

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
June 30, 2004, the Debtors listed $1.619 billion in assets and
$3.396 billion in debts.  (Kaiser Bankruptcy News, Issue No. 50;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


KARA GROUP: Files for Bankruptcy Protection under CCAA
------------------------------------------------------
Kara Group, a 22-store retail jewellery chain, made a voluntary
assignment in bankruptcy.  All assets of Kara Group including
inventory, equipment and leaseholds, will be sold through all
existing store locations under the direction of Shiner Kideckel
Zweig Inc., Receiver Manager, Trustee in Bankruptcy.

The Kara Group originated in 1939 and was one of Canada's largest
independently owned and operated retail jewellery chains.  The
company operated across Ontario under the names, Kara Jewellers,
Kara Jewellers Outlet and Griffin Jewellery Design.


MACOMB COUNTY: S&P Slices Revenue Bonds' Rating to BB from BBB-
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating two notches
to 'BB' from 'BBB-' on Macomb County Hospital Finance Authority,
Michigan's hospital revenue bonds, series 2003B, issued for Mount
Clemens General Hospital.  The outlook is stable.

"The downgrade reflects a large operating loss for fiscal 2003
(unaudited) and a recently settled nursing strike that is further
pressuring operating results in fiscal 2004," said Standard &
Poor's credit analyst Brian Williamson.

These factors are coupled with a balance sheet that reflects a
non-investment-grade rating.  Offsetting factors continue to
include:

   (a) a good business position in a competitive area, north of
       Detroit, Michgan;

   (b) a change in senior financial management in fiscal 2003; and

   (c) about $27 million of adjustments for the year that Mount
       Clemens General Hospital made after completing internal
       reviews, as suggested by its auditors.

Mount Clemens General Hospital violated its debt service coverage
ratio covenant for fiscal 2003.  As of July 31, 2004, Mount
Clemens General Hospital had coverage of 1.0x. Before the end of
2003, Mount Clemens General Hospital engaged Cap Gemini as its
consultant.  For the seven months ended July 31, 2004, Mount
Clemens General Hospital was on target with Cap Gemini's
recommendations.  However, this is expected to change due to the
35-day nursing strike.

Mount Clemens General Hospital is a 288-bed osteopathic teaching
hospital located in Macomb County, Michigan.  The city of Mount
Clemens is located about 22 miles north of Detroit.  The key
services provided by Mount Clemens General Hospital include:

   * cardiovascular care (300-400 open-heart procedures a year),

   * women's and children's services,

   * emergency services, and

   * surgical services.

Mount Clemens General Hospital also operates:

   * Personal Home Care Skilled Service, Inc., a Medicare-
     certified home care agency;

   * Personal Home Care Services, a private duty home care agency;
     and

   * the MCG Foundation.

The outlook is currently stable.  Although the construction
project for Mount Clemens General Hospital is currently on time
and on budget, management still has to continue to address its
cost-saving initiative that has been put into place with the help
of the consultant.  Even though the 35-day nursing strike will
have a negative effect on operations for fiscal 2004, it is
expected that management will be able to operate in a positive
manner for the remainder of the year.  Management is continuing to
explore long-range strategies.  However, the balance sheet has
little room for unexpected issues that could negatively affect
Mount Clemens General Hospital.


MAXIM CRANE: Can Continue Hiring Ordinary-Course Professionals
--------------------------------------------------------------
The Honorable M. Bruce McCullough of the U.S. Bankruptcy Court for
the Western District of Pennsylvania gave his stamp of approval to
Maxim Crane Works LLC and its debtor-affiliates' motion to
continually 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 their duties, the Debtors
regularly call upon various professionals, including attorneys,
accountants, actuaries and  consultants carrying out their
assigned responsibilities.

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 their ability to reorganize.

The Debtors assure the Court that no payment to an ordinary course
professional will exceed $15,000 per month during the next three
months.

Although some of these Ordinary Course Professionals may hold
minor amounts of unsecured claims, the Debtors do not believe that
any of them have an interest materially adverse to the Debtors,
their creditors or other parties in interest.

Headquartered in Pittsburgh, Pennsylvania, Maxim Crane Works, LLC
-- http://www.maximcrane.com/-- is a full service crane rental
company.

The Company, along with its affiliates, filed for chapter 11
protection (Bankr. W.D. Pa. Case No. 04-27861) on June 14, 2004.
Douglas Anthony Campbell, Esq., at Campbell & Levine, LLC,
represents the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they estimated
debts and assets of over $100 million.


METROPCS: Two Concerns Prompts S&P to Revise Outlook to Negative
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Dallas,
Texas-based wireless service provider MetroPCS Inc. to negative
from positive.  The outlook revision reflects two concerns.

"First, the company is rapidly approaching the Nov. 8, 2004,
deadline for filing its second-quarter SEC Form 10-Q in order to
avoid triggering a technical default, which could result in
acceleration in repayment of about $150 million of 10.75% senior
notes due 2011.  Such acceleration could lead to a liquidity issue
in the near term," said Standard & Poor's credit analyst Michael
Tsao.

The delay in filing was caused by an ongoing internal
investigation into understatement of revenues and net income for
the quarter ended March 2004 (the accounting problem also caused
the withdrawal of a plan for an IPO).

Second, the accounting problem may be wider in scope than
initially expected by Standard & Poor's, given that the company
recently fired its principal accounting officer and announced that
previously issued financial statements for the years ended in
December 2002 and 2003 and subsequent interim period should not be
relied upon.  The accounting problem and any associated internal
control issue could lead to regulatory ramifications.

The ratings reflect substantial business risk because of strong
competition from better-capitalized wireless carriers and
uncertainty over the longer-term viability of the company's
differentiated business model.  With national wireless penetration
already exceeding 55% and the advent of wireless number
portability, competitive pressure in the wireless industry is
likely to further intensify.  National wireless carriers have a
number of competitive advantages over the company, which
effectively has been in operation for over two years.  These
include significantly greater financial resources, access to
capital markets, network reach, negotiating power against vendors,
brand awareness, and operating experience.

The longer-term viability of MetroPCS's differentiated business
model remains somewhat uncertain.  The traditional business model
for the wireless industry has been one based on heavy upfront
customer acquisition costs, a myriad of regional and national
calling plans, national network coverage, monthly billing for
services, and contracts with a tenor of one to two years.

MetroPCS, by contrast, provides primarily for unlimited local
calling in four densely populated markets (i.e., the greater San
Francisco, Miami, Atlanta, and Sacramento metropolitan areas) on a
prepaid fixed-fee basis with no contracts and minimal handset
subsidies.  These factors give the company the ability to operate
with less support infrastructure and tolerate a higher customer
churn rate than competitors using the traditional model.  However,
the sustainability of MetroPCS's business model remains uncertain
for two reasons.

First, in the event data and push-to-talk services that other
carriers offer become critical competitive elements, it is not
clear whether the company's limited network coverage and narrow
service offering will allow it to compete effectively.

Second, technological advancements or additional spectrum could
enable other carriers to offer significantly more peak-time
minutes, thereby weakening the case for unlimited local minutes.

As reported in the Troubled Company Reporter on Sept. 17, 2003,
Standard & Poor's Ratings Services assigned its 'CCC+' corporate
credit rating to MetroPCS Inc.  Also, a 'CCC+' rating was assigned
to the company's proposed $150 million senior unsecured notes due
2011 issued under Rule 144A with full registration rights. The
outlook is positive.


MILLENIUM ASSISTED: Creditors Must File Proofs of Claim by Oct. 18
------------------------------------------------------------------
The United States Bankruptcy Court for the District of New Jersey
set October 18, 2004, as the deadline for all creditors owed money
by Millenium Assisted Living Residence at Freehold, LLC, on
account of claims arising prior to June 7, 2004, to file their
proofs of claim.

Creditors must file their written proofs of claim on or before the
October 18 Claims Bar Date, and those forms must be delivered to:

               Clerk of the Bankruptcy Court
               District of New Jersey
               402 East State Street
               Trenton, New Jersey 08608

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


ML CBO: Moody's Slices $172.8M Senior Secured Notes' Rating to Ca
-----------------------------------------------------------------
Moody's Investors Service downgraded the rating of one class of
Notes issued by ML CBO VI, Series 1996-C-2.  The Class A Notes of
ML CBO VI, Series 1996-C-2 have been downgraded to Ca from Caa1 on
watch for possible downgrade.

Continuing deterioration in par and credit quality of the
underlying portfolio prompted the current action.  Moody's notes
that the Class A Overcollateralization Ratio is 49.2% as of the
September 10, 2004 noteholder report.  The failure of
overcollateralization coverage tests has led to substantial
redemptions of the Class A Notes.  Although Moody's expects the
deal to continue delevering, this will not be sufficient to
preserve the credit rating, prior to today's rating action, of the
Notes.

Rating Action: Downgrade

   Issuer:              ML CBO VI, Series 1996-C-2

   Tranche description: US$172,800,000 ($19,797,570.85) Class A
                        Floating Rate Senior Secured Notes Due
                        2006

   Previous Rating:     Caa1 on watch for possible downgrade

   New Rating:          Ca


NATIONAL CENTURY: Trust Wants $2.1 Mil. Preferential Transfer Back
------------------------------------------------------------------
On March 12, 1993, NPF IV, Inc. -- a predecessor to NPF VI, Inc.,
and NPF XII, Inc., National Century Financial Enterprises, Inc.
debtor-affiliates  -- and Lincoln Hospital Medical Center, Inc.,
entered into a sale and subservicing agreement.  Mary E. Tait,
Esq., at Jones Day, in Columbus, Ohio, relates that the Debtors
provided financing to Lincoln and Community Healthcare Specialists
Medical Group, Inc., an affiliate of Lincoln.  Community
Healthcare provided medical services at the clinics owned and
operated by Lincoln's sole shareholder, MediManager, Inc.

In 1996, a dispute developed between the parties, and Lincoln
sought alternate financing arrangements with DFS Secured
Healthcare Receivables Trust.  On May 3, 1996, Lincoln and DFS
entered into a Healthcare Accounts Receivable Purchase Agreement,
pursuant to which Lincoln agreed to sell its accounts receivable
to DFS.  From May 3, 1996, through July 1996, Lincoln sold its
accounts receivable to DFS, including many accounts receivable
generated prior to May 3, 1996.  Subsequently, DFS ceased
purchasing accounts receivable from Lincoln.

On August 7, 1996, NPF IX, Inc., a predecessor of NPF XII, entered
into a new sale and subservicing agreement with Lincoln.  The
security interests granted to NPF IX under the Subservicing
Agreement were perfected by two UCC-1 Financing Statements filed
with the California Secretary of State on August 13, 1996, which
financing statements were timely continued and assigned.  From
August 1996, through October 2, 2002, NPF IX and its successors
purchased all of Lincoln's eligible accounts receivable.

                          The DFS Lawsuits

On December 18, 1998, DFS filed a lawsuit in the California
Superior Court for Marin County against Lincoln, Community
Healthcare and MediManager, alleging breach of contract, fraud,
conspiracy and failure by Lincoln to remit the proceeds of
accounts receivable.  Neither NCFE nor any of its subsidiaries
were defendants or otherwise parties to the First DFS Lawsuit.

On April 4, 2001, the Marin Superior Court entered a $2,419,513
judgment in the First DFS Lawsuit in favor of DFS and against
Lincoln.  A $2,767,188 judgment was also entered against Community
Healthcare.  MediManager had been previously dismissed from the
litigation, without prejudice.

On April 8, 2002, DFS filed a judgment lien against Lincoln.

On July 27, 2000, NPF IX and NPF VI filed a lawsuit in the Marin
Superior Court against DFS, alleging intentional interference with
contract.  On September 25, 2000, DFS filed a cross-complaint
against NPF VI, National Physicians Funding II, Inc., and
MediManager, seeking indemnification and apportionment of fault
for the debts of Lincoln and Community Healthcare, and alleging
fraud and conspiracy.  The entire action was dismissed with
prejudice on July 15, 2002.

On February 14, 2002, DFS levied its judgment against Lincoln in
the First DFS Lawsuit upon four checks payable to Lincoln.  On
February 21, 2002, NPF XII, as the assignee of NPF IX's rights and
interests under the Subservicing Agreement, filed a Verified Third
Party Claim of Ownership in the First DFS Lawsuit, asserting a
senior right to the proceeds of Lincoln's accounts receivable
subject to the DFS levy.

On May 6, 2002, the Marin Superior Court concluded that NPF XII's
ownership and security interest in Lincoln's accounts receivable,
arising out of the Subservicing Agreement, "take priority over the
April 4, 2001 judgment" of DFS.  DFS asked the Marin Superior
Court to reconsider the First Priority Order.  The Marin Superior
Court, however, reaffirmed its ruling in an amended order dated
June 4, 2002.

On April 12, 2002, DFS filed a second lawsuit against MediManager
in the Marin Superior Court, seeking to recover on an alleged
guaranty given by MediManager of Community Healthcare's
liabilities.

                        Settlement Agreement

On August 21, 2002, DFS, DFS Credit Corp., DynaCorp Financial
Strategies, Inc., NCFE, NPF XII, and MediManager agreed that:

    (a) MediManager and NCFE will pay DFS $1,500,000;

    (b) MediManager will provide DFS with a promissory note for
        $1,000,000, with interest to accrue at a rate of 10% per
        annum.  The Note was payable in four installments.  NCFE
        guaranteed MediManager's obligations under the Note; and

    (c) In the event of a default, DFS's exclusive remedy is
        either specific performance of the Settlement Agreement or
        to re-file the Second DFS Lawsuit, to which NCFE and its
        subsidiaries were not parties.

                      $2.1 Million Transfer

On August 23, 2002, NCFE paid DFS $1,500,000 as the initial
payment under the Settlement Agreement.  On October 1, 2002, NCFE
sent a $416,667 check to DFS as first installment payment under
the Note.  On October 29, 2002, NCFE wired an additional $203,222
to DFS as second installment payment under the Note.  In sum, NCFE
transferred $2,119,889 to DFS under the Settlement Agreement.

                           The DFS Claim

On April 21, 2003, DFS filed Claim No. 313 against the Debtors,
asserting a $1,910,891 claim allegedly secured by accounts
receivable and its proceeds.  The DFS Claim attaches:

    * a statement of amounts due;

    * an unfiled complaint asserting counts for damages for
      conversion, claim and delivery of accounts receivable,
      foreclosure of Lincoln assets and injunctive relief to
      enjoin transfers of Lincoln accounts receivable; and

    * notices of liens against Lincoln.

DFS has not provided evidence of any filed UCC-1 financing
statements or any other documentation of security interests
against the Debtors.

Ms. Tait reminds the Court that DFS did not sell goods or render
services to the Debtors prepetition.  Rather, DFS asserts that it
purchased accounts receivable from a third party, Lincoln, which
accounts receivable DFS never received.

                     The Sun Segregated Amounts

On November 18, 2002, Lincoln commenced its Chapter 11 case.  On
December 2, 2002, the United States Bankruptcy Court for the
Central District of California, Los Angeles Division, entered an
interim order approving the use of cash collateral and a
replacement factoring arrangement between Lincoln and Sun Capital
Healthcare, Inc.  The Debtors continue to hold claims aggregating
tens of millions of dollars against Lincoln.

Upon information and belief, Sun is holding the proceeds of
certain Lincoln accounts receivable purchased by NPF XII prior to
October 2, 2002, but collected by Sun after November 18, 2002, in
a segregated account.  Sun is holding $236,000 in the Sun
Segregated Account, pending resolution of the parties' disputes
over competent jurisdiction.

Ms. Tait asserts that the funds in the Sun Segregated Account are
the proceeds of accounts receivable purchased by NPF XII and are
not subject to any lien prior to the lien of the VI/XII Collateral
Trusts, as successor to NPF XII, which lien was perfected in
August 1996.

Any judgment lien of DFS was released and discharged by DFS when
it entered into the Settlement Agreement.  Moreover, the priority
of NPF XII's lien over DFS's lien has been resolved res judicata
by the Marin Superior Court, which conclusively ruled in the
Ownership and Priority Orders that NPF XII's lien has priority
over DFS's lien.

                          Avoidance Action

Ms. Tait asserts that Transfers constitute avoidable preferential
transfers under Section 547 of the Bankruptcy Code.  The Debtors
also made the Transfers with actual intent to hinder, delay or
defraud their creditors.  Ms. Tait further points out that the
Transfers were made by the Debtors for DFS's benefit for no
consideration to the Debtors.  DFS retained the Transfers for its
own use and has not in any way reimbursed the Debtors.  Clearly,
the Transfers have unjustly enriched DFS to the detriment of the
Debtors' estates and creditors.  "DFS's conduct is inequitable,
has given it an unfair advantage and has resulted in injury to all
other competing classes of creditors," Ms. Tait adds.

Thus, the Unencumbered Assets Trust and the VI/XII Collateral
Trust, as successors to and transferees of the Debtors, ask Judge
Calhoun to:

    (a) declare that the Transfers represent preferential
        transfers and are avoided;

    (b) declare that the incurrence of the obligation to make the
        Transfers or the Transfers themselves, or both, are
        fraudulent transfers that are avoided under applicable
        law;

    (c) award a money judgment in favor of the Unencumbered Assets
        Trust against DFS, Dynacorp Financial, et al., in an
        amount equal to the aggregate amount of the Transfers;

    (d) award judgment in favor of the Unencumbered Assets Trust
        and against DFS, Dynacorp Financial, et al., in the amount
        that DFS, Dynacorp Financial, et al., were unjustly
        enriched, presently estimated to be $2,119,889, plus all
        fees and costs awarded and interest;

    (e) reclassify the DFS Claim as an unsecured, non-priority
        claim under the Plan;

    (f) disallow the DFS Claim in its entirety; and

    (g) enter a judgment in favor of the VI/XII Collateral Trust
        resolving all disputes between the Debtors and DFS and
        determine that the VI/XII Collateral Trust, as successor
        in interest to and transferee of the assets of NPF XII, is
        the rightful owner of the funds in the Sun Segregated
        Account.

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)


NATIONAL IRANIAN: Case Summary & 10 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: National Iranian Television News Inc.
        21050 Erwin Street
        Woodland Hills, California 91367

Bankruptcy Case No.: 04-16582

Type of Business: The Debtor is a television station.

Chapter 11 Petition Date: October 7, 2004

Court: Central District of California (San Fernando Valley)

Judge: Kathleen T. Lax

Debtor's Counsel: C. Richard Dodson, Esq.
                  4089 Long Beach Boulevard
                  Long Beach, CA 90807
                  Tel: 562-595-8771

Total Assets: $158,702

Total Debts:  $6,381,490

Debtor's 10 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Audio-Visual Supply           Trade Debt              $4,130,000
4575 Ruffner St.
San Diego, CA 92112

Irdetu Access                 Trade Debt                $500,000
P.O. Box 3047
2130 KA Hoofdorf, Netherlands

ABS CBN International                                    $20,000

NetSat Express, Inc.          Trade Debt                 $19,500

Williams Communication        Trade                       $9,811

Providian Processing Center   Trade Debt                  $6,066

SBC Payment Center            Trade Debt                  $4,153

Los Angeles DWP               Trade Debt                  $2,668

Shadi Movahed                 Labor                       $2,500

Globecase North America       Trade                       $1,566


NAVIGATOR CDO: S&P Assigns BB Ratings on Classes D-1 & D-2
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Navigator CDO 2004 Ltd./Navigator CDO 2004 Corp.'s
$470.5 million floating- and fixed-rate notes due 2016.

The preliminary ratings are based on information as of
October 11, 2004.  Subsequent information may result in the
assignment of final ratings that differ from the preliminary
ratings.

The preliminary ratings reflect:

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

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

   -- The experience of the collateral manager; and

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

                  Preliminary Ratings Assigned
        Navigator CDO 2004 Ltd./Navigator CDO 2004 Corp.

         Class               Rating    Amount (mil. $)
         -----               ------    --------------
         A-1A                   AAA              50.0
         A-1B                   AAA             262.5
         A-2                    AAA              54.0
         A-3A                   AA               31.0
         A-3B                   AA                2.0
         B-1                    A                22.5
         B-2                    A                 7.5
         C-1                    BBB              16.5
         C-2                    BBB              12.5
         D-1                    BB                6.0
         D-2                    BB                6.0
         Preference shares      N.R.             40.5

                        N.R. - Not rated


NRG ENERGY: Inks Stipulation Resolving NCAT's & Reynolds' Claims
----------------------------------------------------------------
Under a Credit Agreement dated May 8, 2001, by and among NRG
Finance Company I, LLC, Credit Suisse First Boston, as
administrative agent, and other financial institutions, Debtors
NRG Nelson Turbines, LLC, and LSP-Nelson Energy, LLC, are
currently indebted to the Lenders for $673,072,591.

North Central Antenna Technologies, Inc., and Reynolds, Inc., are
contractor parties that have performed construction services for
the benefit of the Nelson Debtors and have asserted liens and
related claims against the Nelson Debtors.

Furthermore, in a litigation pending in Lee County, Illinois,
NCAT and Reynolds asserted that their liens on the Nelson
Debtors' real and personal property have priority over the
mortgage lien recorded against the same property by CSFB, as
Agent on the Lenders' behalf.

To resolve the priority of the Nelson Claims without further
costs of litigation and associated risks, the Nelson Debtors,
NCAT, Reynolds, CSFB, and PCL Industrial Construction, Inc.,
stipulate that:

    (a) Reynolds will have an allowed secured claim for $288,437,
        with distribution priority over the Lenders' Claims, but
        not over payment of the first $2,950,000 of the Allowed
        Nelson Superpriority Claim;

    (b) NCAT will have an allowed secured claim for $21,060,
        with distribution priority over the Lenders' Claims, but
        not over payment of the first $2,950,000 of the Allowed
        Nelson Superpriority Claim;

    (c) The issue of priority among Reynolds, NCAT and PCL is
        reserved until further notice;

    (d) Reynolds will waive and dismiss, with prejudice, any and
        all claims against the Nelson Debtors in excess of
        $288,437;

    (e) NCAT will waive and dismiss any and all claims against the
        Nelson Debtors in excess of $21,061; and

    (f) NCAT and Reynolds will release and dismiss, with
        prejudice, any and all claims asserted against CSFB, as
        Agent and on its own behalf, and against the Lenders, in
        connection with the Nelson Debtors, including any and all
        claims asserted in the litigation pending in Lee County,
        Illinois.

NRG Energy, Inc. owns and operates a diverse portfolio of power-
generating facilities, primarily in the United States. Its
operations include baseload, intermediate, peaking, and
cogeneration facilities, thermal energy production and energy
resource recovery facilities.

The company, along with its affiliates, filed for chapter 11
protection (Bankr. S.D.N.Y. Case No. 03-13024) on May 14, 2003.
The Company emerged from chapter 11 on December 5, 2003, under the
terms of its confirmed Second Amended Plan.  James H.M.
Sprayregen, P.C., Matthew A. Cantor, Esq., and Robbin L. Itkin,
Esq. at Kirkland & Ellis, represented NRG Energy in its $10
billion restructuring. (NRG Energy Bankruptcy News, Issue No. 34;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


OWENS CORNING: CSFB & Tort Lawyers Debate Rule 2019 Compliance
--------------------------------------------------------------
In connection with Judge Fitzgerald's order on August 25, 2004
directing all counsel representing more than one creditor or
equity security holder to electronically file and serve the
statement required by Rule 2019 of the Federal Rules of Bankruptcy
Procedure before October 25, 2004, as reported in the Troubled
Company Reporter on September 29, 2004, tort firms asks for leeway
in compliance of the order.

As reported in the Troubled Company Reporter on September 22,
2004, Baron & Budd and Silber Pearlman admitted that their literal
compliance with the Rule 2019 Order would be difficult, burdensome
and very expensive. The Firms do not, however, seek to be excused
from filing a Rule 2019 statement. Instead, the Firms ask Judge
Fitzgerald to amend the Order "slightly to ease the difficulty of
compliance, while still preserving the intentions of Rule 2019."

          Campbell Cherry and Brayton Purcell Responds

Campbell, Cherry, Harrison, Davis & Dove, PC, and Brayton Purcell
also represent numerous tort victims asserting personal injury
claims against the Debtors.  Therefore, Campbell Cherry and
Brayton Purcell support Baron & Budd and Silber Pearlman's
request.  They ask Judge Fitzgerald to modify the disclosure
required of law firms in the Debtors' cases under Rule 2019 of the
Federal Rules of Bankruptcy Procedure.

          United States Trustee Wants Some Safeguards

Roberta A. DeAngelis, the Acting United States Trustee for Region
3, agrees that the disclosure of exemplar retention agreements
will reduce the burden on the complying parties as well as the
Court by substantially diminishing the bulk of the document and
accompanying exhibits.  However, the relief should be granted with
appropriate safeguards:

   (a) Each "exemplar" should be a copy of an actual retention
       agreement executed by a client, rather than an unsigned
       "form" or "draft" agreement that may not reflect fully the
       terms of any actual agreement with any claimant;

   (b) Any diversions from the exemplar for particular claimants
       should be attached for each claimant; and

   (c) If there are multiple exemplars, lists of the names of the
       claimants whose agreements follow each of the forms should
       be attached.

To permit clear identification of the claimants and prevent
duplicate claims, the addresses and Social Security numbers of the
claimants should be disclosed.

Frank J. Perch, III, Esq., Assistant United States Trustee,
suggests that positive identifiers will permit the various firms'
lists to be cross-checked to eliminate duplicate claims and
prevent duplicate plan voting.

The disclosure of addresses will also facilitate improved
noticing.  In the early stages of virtually all asbestos cases,
Mr. Perch notes that debtors file a motion seeking leave to serve
various required notices on counsel for personal injury claimants
rather than the claimants themselves, averring that debtors do not
have all of the actual addresses of the claimants in their
records.  At the U.S. Trustee's request in many cases, the orders
approving the motions expressly provide that the order will not
apply to and will be without prejudice regarding the form and
manner of notice to be given for any claims bar date or for plan
solicitation and plan voting.  By requiring the address
information to be provided, Mr. Perch explains, the Orders will
facilitate noticing of key events like bar dates and plan voting
to be provided directly to the affected claimants as well as to
the attorneys.

The U.S. Trustee does not object to having portions of any Rule
2019 disclosure containing address and Social Security number data
for individual personal injury claimants redacted from the public
docket and filed under seal, provided full disclosure is made to:

   * the Debtors,
   * all official committees,
   * the Debtors' noticing agents, and
   * the U.S. Trustee

The Notice Parties will not disclose any of the information to the
public without further leave of Court.  Any affidavit of service
or similar subsequent document that would contain the protected
information would similarly be filed under seal and appear on the
public docket in redacted form.

                 Debtors Nitpicks on SS Numbers

The Debtors insist that in the event social security numbers are
required for asbestos claimants, the last four digits should be
required as provided in the Amendatory Order, rather than the
first four digits.  Norman L. Pernick, Esq., at Saul Ewing, LLP,
in Wilmington, Delaware, explains that the first three digits of a
social security number are a geographic locator, based on the
state of initial registration with the Social Security
Administration.  Thus, all claimants from a particular state are
disproportionately likely to have the same first three digits of
their social security numbers.  Mr. Pernick also notes that the
claimants should not be required to disclose the first four digits
of their social security numbers now and the last four digits
later.

The Debtors take no position as to whether the amount and time of
acquisition of a tort claim should be disclosed.  Tort claims
typically are unliquidated and difficult to ascribe to a specific
date.  The Debtors, however, believe that this requirement should
apply to all non-tort claims because the claims do not implicate
the concerns highlighted in the Tort Firms' request.

The Debtors support the proposed compliance with Rule 2019(a)(3)
of the Federal Rules of Bankruptcy Procedure as stated in the
Court's "Notes Re: Information To Be Submitted in Pittsburgh,
NARCO and GIT Regarding Amending the Amendatory Order Requiring
Rule 2019 Statements."

              CSFB Insists on Rule 2019 Compliance

Baron & Budd and Silber Pearlman should be required to comply with
the Rule 2019 disclosure requirements, Credit Suisse First Boston
insists.  Rebecca L. Butcher, Esq., at Landis, Rath & Cobb, in
Wilmington, Delaware, asserts that Rule 2019 is mandatory.  The
Tort Firms concede to this mandatory nature, although they urge
the Court to be "flexible" and not "overly wooden" in determining
the level of compliance with the rule.  Ms. Butcher notes that
Baron & Budd and Silber Pearlman have not alleged that compliance
with the express mandate of Rule 2019 and the express terms of the
Rule 2019 Order would be impossible.  The Firms simply reason that
compliance would be "difficult, burdensome and very expensive."

Presumably, the Tort Firms know who their clients are.  Moreover,
other than their own conclusory statements, however, the Firms do
not explain the alleged difficulty, burden or expense that
compliance would require.  The Tort Firms have not cited to a
single reported decision that would dispatch with the Rule 2019
requirements simply because a law firm would have to expend
resources in order to comply.

Rule 2019 and Rule 2019 order could not be clearer in requiring
the production of all powers of attorney or other authorizing
instruments, Ms. Butcher tells Judge Fitzgerald.  The expense and
burden of compliance is not as great as the Tort Firms suggest.
Many states, including New York where many of the claims would
have been filed absent the Chapter 11 filing, require the filing
of the very type of statement that the Tort Firms allege to be too
expensive and burdensome to file.

The Tort Firms cite In re Mid-Valley, Inc., Case No. (03-35592
(JKF) (Bankr. W.D. Pa.), in support of their contention that
exemplars may be filed.  According to Ms. Butcher, the Mid-Valley
case is different.  Mid-Valley was a prepackaged Chapter 11 and
Owens Corning is not.  There is more time in the Debtors' cases
than in Mid-Valley case to compel compliance.

Rule 2019 requires the disclosure of "pertinent facts and
circumstances in connection with employment."  Ms. Butcher
enumerates the pertinent facts in connection with the employment
of an attorney:

   (a) Identity of the client;

   (b) The terms of compensation; and

   (c) The circumstances of how the attorney became involved in
       the representation.

Consistent with Rule 2019 Order, the Tort Firms should disclose
all three categories of information, Ms. Butcher insists.

Moreover, the Tort Firms failed to demonstrate that any of the
information is privileged.  Ms. Butcher contends that the reason
for the failure is because the information is not subject to any
privilege.  The information is often required when filing a
personal injury case in state court.  Moreover, it is well settled
that fee arrangements are not privileged as held in Montgomery
County v. Microvote Corp., 175 F.3d 296, 304 (3d Cir. 1999).

In addition, Social Security numbers and addresses should be
disclosed as well as the amount and time of acquisition of the
claims.  Rule 2019(a)(1) expressly requires disclosure of
addresses of claimants.  The disclosure will eliminate duplicate
claims.

Based on these assertions, CSFB asks the Court to deny the
Reconsideration Motion filed by the Tort Firms.

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


PACIFIC BIOMETRICS: Inks New $1.7 Million Clinical Research Pact
----------------------------------------------------------------
Pacific Biometrics, Inc. (OTCBB:PBME) signed a contract worth
approximately $1.7 million with a major U.S. Sponsor. The study
will address an innovative approach for the prevention and
treatment of dyslipidemia and coronary heart disease. PBI will
provide the Sponsor with cholesterol, lipid, and inflammatory
marker testing on samples collected to support the Sponsor's
clinical development program, eventually expected to result in a
New Drug Application filing with the FDA and equivalent filings
with regulatory agencies in other jurisdictions. The testing will
commence during the first quarter of 2005, and is anticipated to
be completed in 9 months.

Ron Helm, Chief Executive Officer of Pacific Biometrics,
commented, "We are delighted to have the opportunity to work with
this innovative Sponsor to test for improvements in lipid profiles
in patients at risk for atherosclerosis and coronary heart
disease. The Sponsor's endpoints of improving the cholesterol and
inflammatory marker profile required a central laboratory that has
expertise in biomarkers for both lipids and cardiovascular risk,
and PBI is well positioned to deliver the highest quality results
in both of these areas. Winning this highly competitive bid
represents an important milestone for Pacific Biometrics. Our
reputation for providing accurate, reliable analyses and
responsive services continues to strengthen our prospects for
future business."

Mr. Helm continued, "As this contract indicates, our expertise
across multiple categories of biomarkers offers Pacific Biometrics
a competitive advantage that will enable us to pursue a growing
number of opportunities going forward. The size and timeline for
completion of this project will not only strengthen our
relationship with this Sponsor, but will also improve our outlook
for the second and third quarter. As we indicated in the past, we
will likely see variability in our revenue and profitability on an
interim basis in the early stages of our new marketing efforts,
but are confident that our core capabilities and marketing
initiatives will drive revenue in the second half of 2004 and in
2005. I am very encouraged by our recent success in signing this
new contract and look forward to continued success in winning
additional business."

                  About Pacific Biometrics, Inc.

Established in 1989, PBI provides specialized central laboratory
services to support pharmaceutical and diagnostic manufacturers
conducting human clinical trial research. The company provides
expert services in the areas of cardiovascular disease,
cholesterol and lipid abnormalities, diabetes, obesity, metabolic
syndrome, osteoporosis, and arthritis. The PBI laboratory is
accredited by the College of American Pathologists and is one of
only three U.S.-based laboratories approved and accredited by the
Centers for Disease Control (CDC) as a member of the Cholesterol
Reference Method Laboratory Network. PBI's clients include many of
the world's largest pharmaceutical, biotech, and diagnostic
companies.

Pacific Biometrics also owns several patented and patent-pending
technologies, including molecular diagnostic and noninvasive
device technologies, relevant to its areas of specialty expertise.

                          *     *     *

                       Going Concern Doubt

Grant Thornton LLP expressed substantial doubt on Pacific
Biometrics, Inc.'s ability to continue as a going concern, after
it audited the Company's financial statements as of June 30, 2004
and 2003.  The Company has experienced significant net operating
losses for the fiscal year ended June 30, 2004, and revenues for
fiscal 2004 were significantly lower than those in the comparable
prior fiscal year.  While the Company currently has a positive
working capital position, it has significant amounts of notes
payable and other liabilities, and minimal stockholders' equity.
Historically, the Company has had deficiencies in working capital
and stockholders' equity and has had significant amounts of
current and past due debt.


PACIFIC COAST: Moody's Junks Class C-1 & C-2 Secured Notes
----------------------------------------------------------
Moody's Investors Service took action on the Classes of Notes
issued by Pacific Coast CDO, Ltd.  The rating on the Class A Notes
will not be affected by this rating action.  In addition, Moody's
is withdrawing its rating on the $6,700,000 Class 1 Pass-Through
Notes due 2036 since the Pass-Through Notes have been split into
its component tranches.

The downgrade is due to a continued deterioration in the
portfolio.  As of the August 31, 2004 trustee report, the
transaction was failing its Class A/B and Class C
Overcollateralization and Interest Coverage tests and the Moody's
Maximum Rating Distribution Test was reported as 1063.

Issuer:         PACIFIC COAST CDO, LTD.

Description:    $96,000,000 Class B Second Priority Senior Secured
                Floating Rate Notes due 2036

Current Rating: A2
Prior Rating:   Aa3 on watch for possible downgrade

Description:    $21,000,000 Class C-1 Mezzanine Secured Floating
                Rate Notes due 2036

Current Rating: Caa2
Prior Rating:   Ba3 on watch for possible downgrade

Description:    $9,000,000 Class C-2 Mezzanine Secured Floating
                Rate Notes due 2036

Current Rating: Caa2
Prior Rating:   Ba3 on watch for possible downgrade


PACIFIC GAS: Trustee Objects to Dynegy Power's $1M Admin. Claim
---------------------------------------------------------------
Shortly after the Petition Date, the Office of the United States
Trustee nominated Dynegy Power Marketing, Inc., to serve as a
member of the Official Committee of Unsecured Creditors in
Pacific Gas and Electric Company's Chapter 11 case.  Dynegy Power
accepted its nomination, and at all times served actively as a
member of the Creditors Committee.

Philip S. Warden, Esq., at Pillsbury Winthrop, LLP, in San
Francisco, California, recounts that before PG&E's reorganization
plan was confirmed, two competing plans were filed with the Court
-- one proposed by PG&E and the other proposed by the California
Public Utilities Commission.  The competing plans had polarized
and intractable differences in their basic structures.

As a result, the extreme animosity between the plan proponents
threatened to cause a lengthy delay in the confirmation process,
threatened distributions to creditors, and substantially
increased the costs borne by ratepayers each additional day that
PG&E remained under Chapter 11 protection.

Dynegy Power and other members of the Creditors Committee knew
that PG&E and CPUC appeared unable to reach a compromise.
Accordingly, the Creditors Committee attempted without success to
broker a settlement between PG&E and CPUC.  However, with Judge
Newsome's assistance, Dynegy Power and the Creditors Committee's
efforts in brokering a settlement resulted in the drafting and
confirmation of the Plan.  While Dynegy Power was certainly not
alone on the Creditors Committee in its efforts to broker the
settlement, Mr. Warden recounts some of Dynegy Power's specific
efforts:

    (a) Dynegy Power's counsel suggested and lobbied for the
        Creditors Committee to urge PG&E and the CPUC into
        mediation.  Spurred by Dynegy Power's efforts, the
        Creditors Committee agreed with the mediation approach and
        convinced the Court to order the parties into mediation.
        The mediation before Judge Newsome resulted in a
        settlement between the CPUC and PG&E and served as the
        basis for the structure of the Confirmed Plan.  The
        mediation was the turning point in the case, and brought
        PG&E out of Chapter 11 resulting in immense savings to
        PG&E and the ratepayers.

    (b) Dynegy Power brokered numerous agreements with PG&E,
        including, without limitation:

        -- Order authorizing PG&E to incur postpetition secured
           debt to certain gas suppliers under the gas supplier
           security agreement, filed on July 30, 2001;

        -- Stipulation modifying the Plan regarding Class 6
           claims, filed on August 6, 2002;

        -- Stipulation resolving objections to PG&E's Plan of
           Reorganization filed by Class 6 creditors, filed on
           November 13, 2003;

        -- Order resolving PG&E's objections to numerous
           administrative claims filed by Class 6 claimants, filed
           on November 21, 2003; and

        -- Class 6 Escrow Agreement pursuant to court order dated
           March 5, 2004.

    (c) Dynegy Power and its counsel met regularly with PG&E's
        professionals to negotiate and draft provisions that
        ultimately became part of the Confirmed Plan.

    (d) As a leading member of the Creditors Committee and a Class
        6 member, Dynegy Power actively negotiated with other
        class members to support the Confirmed Plan.

    (e) Dynegy Power provided significant assistance in drafting
        a memorandum that the Creditors Committee sent to all
        general unsecured creditors urging the parties to vote in
        favor of the Confirmed Plan.

    (f) Dynegy Power has now settled its claims with PG&E, the
        Federal Energy Regulatory Commission, the California
        Attorney General and other entities -- creating a template
        for other Class 6 Claimants to settle and recover their
        various disputes with those parties, thereby easing the
        burden on PG&E and its estate in litigating the issue with
        the other Class 6 Claimants.

Mr. Warden points out that in light of the substantial
contributions Dynegy Power has made on PG&E's Chapter 11 case,
Dynegy Power is entitled to reimbursement of all of its "actual
necessary expenses," pursuant to Section 503(b)(3)(D) of the
Bankruptcy Code.

Since Dynegy Power is entitled to recover certain of its actual
and necessary expenses incurred pursuant to Section 503(b)(4),
Mr. Warden asserts that Dynegy Power is also entitled to seek
reimbursement for "reasonable compensation" incurred by its
counsel based on "the time, the nature, the extent, the value of
such services and the cost of comparable services" other than in
a case under title 11.  Courts have typically interpreted Section
503(b)(4) as requiring further that only those fees incurred in
relation to the activity that qualified the entry for
administrative expense treatment under Section 503(b)(3) are
subject to reimbursement under Section 503(b)(4).

Through Dynegy Power's counsel's extensive experience and
familiarity to the local rules, procedures, and practices, Dynegy
Power was able to provide the Creditors Committee with a
tremendous resource as to local issues which was essential
because the Creditors Committee's counsel was based in Los
Angeles and did not have the same familiarity or insights with
respect to the particularities of San Francisco, or with Judge
Newsome, which can only be gained by years of practice.

Mr. Warden points out that PG&E's Chapter 11 case would have gone
for at least another year absent the mediation.  With cumulative
professional fees averaging $250,000,000 the first three years of
the case, professional fees would have easily been over
$100,000,000 for the additional year.

Accordingly, Dynegy Power asks the Court to compel PG&E to pay
$1,000,000 for its superior performance and substantial
contributions to the Chapter 11 case.

The amount reflects a modest 1% of the estimated savings in
professional fees that would have otherwise been borne by the
estate absent Dynegy Power's efforts.  It is in lieu of the
hourly rate for which Pillsbury Winthrop, LLP, charged Dynegy
Power for its legal services, Mr. Warden says.

                             Objections

(A) U.S. Trustee

Patricia A. Cutler, Assistant United States Trustee for the
Northern District of California, states that in In re Cellular
101, Inc., 377 F.3d 1092, 1096 (9th Cir. (Cal.) 2004), the test
of substantial contributions is "the extent of benefit to the
estate."  Additionally, in In re Cellular 101, the Ninth Circuit
held that the creditor seeking payment of its expenses on a
priority basis as an administrative expense of the estate under
Section 503(b)(3)(D) did substantially contribute to the debtor's
estate by "developing the only plan that was presented to the
bankruptcy court and by waiving its prepetition claim."

According to Ms. Cutler, Dynegy Power's efforts may have
benefited the estate, but the differences in extent of the
benefit conferred on the estate, when measured against the
contributions of the creditor in In re Cellular 101, are
striking.  While Dynegy Power's efforts may have been contributed
to PG&E's successful reorganization, the extent those efforts
benefited the estate is not enough to amount to a substantial
contribution under Section 503(b)(3)(D).  Rather, the conduct for
which Dynegy Power seeks the enhancement fee was conduct expected
of a committee member and fiduciary to the unsecured creditor
body.

With respect to Dynegy Power's assertion that its most important
role was that of the initial proponent of mediation, Ms. Cutler
states that it should be common knowledge in PG&E's Chapter 11
case that Judge Montali, at a hearing on March 4, 2003, ruled
that the parties, consisting of PG&E and CPUC, and attorneys and
representatives should meet behind closed doors to determine if
they should try to reach a settlement on their competing
restructuring plans.  Judge Newsome presided over these closed-
door meetings, which eventually resulted in a joint plan of
reorganization being filed on July 31, 2003.  It was this plan
that was ultimately confirmed.

On September 14, 2004, the U.S. Trustee also took the deposition
of PG&E's Senior Vice President and Chief Financial Officer, Kent
Harvey.  The deposition was taken in connection with a fee
application filed by Rothschild, Inc., the investment banker and
financial advisor hired by PG&E in August 2001.  During the
examination, the U.S. Trustee asked Mr. Harvey who would he
consider to have played a pivotal role or instrumental role
during the time frame from March 2003 through the end of July
2003, during the negotiations, that ultimately resulted in the
formulation of a joint plan that was ultimately confirmed.  Mr.
Harvey testified that the Lehman Brothers -- the investment
banker and financial advisor for the parent company PG&E
Corporation -- and UBS, on behalf of the CPUC staff, were active
participants in the process.  Dynegy Power's name did not come up
anywhere during the course of the examination.

With or without Dynegy Power's suggestion, Ms. Cutler maintains
that mediation is usually the next phase for parties to take when
they reach an impasse.  Dynegy Power's suggestion should not be
considered an earthshaking development to warrant a $1,000,000
enhancement fee.  An incidental benefit is not a sufficient basis
to grant an administrative priority.

Moreover, Ms. Cutler contends that Dynegy Power's request should
be denied because it has failed to substantiate its fee request.
In the absence of detailed time frame records, it is impossible
to determine whether the efforts of Dynegy Power's counsel amount
to a substantial contribution.

The integrity of Section 503(b) can only be maintained by
strictly limiting compensation to extraordinary creditor actions,
which lead directly to significant and tangible benefits to the
creditors, debtors, or the estate.  While Section 503 was enacted
to encourage meaningful creditor participation, it should not
become a vehicle for reimbursing every creditor who elects to
hire an attorney, Ms. Cutler says.

(B) PG&E

"There is simply no basis in law or logic for awarding Dynegy an
'enhancement' or 'bonus' of $1 million (or any amount) where
Dynegy has not disclosed to or placed before the Court and
interested parties the expenses it incurred, including its
counsel fees and costs, in the activities it claims made a
'substantial contribution' to the case," Janet A. Nexon, Esq., at
Howard Rice Nemerovski Canady Falk & Rabkin, in San Francisco,
California, asserts.

Ms. Nexon explains that a bonus or enhancement cannot be
considered or awarded in the abstract, but rather must be based
on an analysis that begins with the Court's understanding of the
fees and costs actually expended by the applicant on the
activities that are claimed to constitute a "substantial
contribution" in the case.

PG&E also disputes the assertion that Dynegy Power's efforts in
the Chapter 11 case meets the "substantial contribution" standard
of Section 503(b)(3)(D).  Since Dynegy Power is a holder of a
Class 6 Claim in PG&E's Chapter 11 case, PG&E believes that many
of Dynegy Power's efforts and activities were undertaken for its
own benefit and were focused on its narrow pecuniary interests as
a Class 6 Creditor.  The remainder of Dynegy Power's activities
and efforts were undertaken as a member of the Creditors
Committee and do not come within the narrow band of "special
contributions" as a Creditors Committee member to justify unique
compensation.

PG&E respects and does not question Dynegy Power's right to have
appeared and participated in the Chapter 11 case as it deemed
appropriate to look after its interests as a Class 6 Claimant,
even where that entailed pleadings and appearances that were
redundant of those made separately by the Creditors Committee and
other Class 6 creditors.  PG&E also respects and does not
question Dynegy Power's right to have chosen to serve on the
Creditors Committee and undertake fiduciary responsibilities in
connection with it.  PG&E contends that Dynegy Power, like the
vast majority of creditors and other parties-in-interest that
appeared in the PG&E case, must bear its own fees and expenses in
connection with its decisions to appear and participate in the
case, inasmuch as there is no sound basis for awarding the
special enhancement compensation it seeks.

Headquartered in San Francisco, California, Pacific Gas and
Electric Company -- http://www.pge.com/-- a wholly owned
subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest
combination natural gas and electric utilities in the United
States.

The Company filed for Chapter 11 protection on April 6, 2001
(Bankr. N.D. Calif. Case No. 01-30923).  James L. Lopes, Esq.,
William J. Lafferty, Esq., and Jeffrey L. Schaffer, Esq., at
Howard, Rice, Nemerovski, Canady, Falk & Rabkin represent the
Debtors in their restructuring efforts.  On June 30, 2001, the
Company listed $23,216,000,000 in assets and $22,152,000,000 in
debts.  Pacific Gas and Electric emerged from chapter 11
protection on April 12, 2004, paying all creditors 100 cents-on-
the-dollar plus post-petition interest.  (Pacific Gas Bankruptcy
News, Issue No. 84; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


PACIFIC GAS: Declares Preferred Stock Dividends
-----------------------------------------------
Pacific Gas and Electric Company declared dividends on all
outstanding series of the company's preferred stock for the three
months ending October 31, 2004.   The dividends will be payable on
Nov. 15, 2004, to shareholders of record on Oct. 29, 2004.

Pacific Gas and Electric Company will pay dividends on its 11
series of preferred stock.  The amount to be paid per series per
share will be:


           Preferred Stock,            Quarterly Dividend
           $25 Par Value               to be Paid per Share
           Redeemable
           ---------------             --------------------
              7.04%                       $0.4400000
              6.57%                       $0.4106250
              6.30%                       $0.3937500
              5.00%                       $0.3125000
              5.00% Series A              $0.3125000
              4.80%                       $0.3000000
              4.50%                       $0.2812500
              4.36%                       $0.2725000

              Non-Redeemable
              6.00%                       $0.3750000
              5.50%                       $0.3437500
              5.00%                       $0.3125000

Headquartered in San Francisco, California, Pacific Gas and
Electric Company -- http://www.pge.com/-- a wholly owned
subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest
combination natural gas and electric utilities in the United
States.

The Company filed for Chapter 11 protection on April 6,
2001 (Bankr. N.D. Calif. Case No. 01-30923). James L. Lopes,
Esq., William J. Lafferty, Esq., and Jeffrey L. Schaffer, Esq., at
Howard, Rice, Nemerovski, Canady, Falk & Rabkin represent the
Debtors in their restructuring efforts. On June 30, 2001, the
Company listed $23,216,000,000 in assets and $22,152,000,000 in
debts. Pacific Gas and Electric emerged from chapter 11 protection
on April 12, 2004, paying all creditors 100 cents-on-the-dollar
plus post-petition interest.


PARMALAT: Committee Has Until Nov. 15 to Dispute Citibank's Claim
-----------------------------------------------------------------
Citibank, N.A., London Branch, and Citibank, N.A., agree to extend
until November 15, 2004, the Official Committee of Unsecured
Creditors' deadline to:

       (i) file an adversary proceeding or contested matter
           challenging the amount, validity, enforceability,
           perfection or priority of Citibank London's rights
           under and in connection with the Parmalat Receivables
           Purchase Agreement dated November 2, 2000; or

      (ii) otherwise assert any claims or causes of action or
           other rights and defenses against Citibank London.

Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- generates more than 7 billion
euros in annual revenue. The Parmalat Group's 40-some brand
product line includes milk, yogurt, cheese, butter, cakes and
cookies, breads, pizza, snack foods and vegetable sauces, soups
and juices and employs over 36,000 workers in 139 plants located
in 31 countries on six continents.

The Company filed for chapter 11 protection on February 24, 2004
(Bankr. S.D.N.Y. Case No. 04- 11139). Gary Holtzer, Esq., and
Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP represent
the Debtors in their restructuring efforts.  On June 30, 2003, the
Debtors listed EUR2,001,818,912 in assets and EUR1,061,786,417 in
debts.  (Parmalat Bankruptcy News, Issue No. 33; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


PERKINELMER INC: Moody's Affirms Low-B Ratings
----------------------------------------------
Moody's Investors Service affirmed PerkinElmer, Inc.'s debt
ratings, adjusted the issuer rating to Ba3 from Ba2, and changed
the rating outlook to positive from stable.

The affirmation of existing debt ratings and change to a positive
outlook reflects Moody's view that PerkinElmer has made solid
progress expanding margins and strengthening free cash flow
generation, which has enabled the company to reduce debt and
improve overall credit metrics.

The outlook also incorporates the expectation that the company
will benefit from mid-single digit organic growth as its end
markets continue to gain footing from the capital spending
rebound.

Organic growth, combined with new product introductions and
ongoing benefits from cost-cutting initiatives, should result in a
stronger financial performance for the remainder of 2004 and 2005.

Moody's adds that sustained improvements in credit metrics could
warrant a ratings upgrade in the intermediate term.  More
specifically, continued margin expansion, a return on assets in
the high-single digit range and free cash flow (cash from
operations less capital expenditures and dividends but excluding
the impact from the accounts receivable securitization program)
generation in excess of $120 million would result in credit
metrics more indicative of a higher rating.

PerkinElmer, with operations divided into Life & Analytical
Sciences, Optoelectronics and Fluid Sciences, is experiencing
positive trends in all three segments.  Key drivers for top line
growth include:

     (i) a rebound in large pharmaceutical companies' capital
         spending,

    (ii) global expansion of prenatal/genetic screening, and

   (iii) growing importance and applications for digital imaging,
         namely digital photography and camera phones.

In addition, PerkinElmer benefits from a high quality, diverse
customer base that generates a recurring revenue stream
approaching 50% of total revenues.  Accordingly, PerkinElmer's
revenues have been relatively stable over the past few years
despite the sluggish end markets in 2001 and 2002.

Based on published financial results for the trailing twelve
months ended June 27, 2004, organic revenue growth and expanding
margins (EBIT margin of 9.3%) led to free cash flow of $132.5
million excluding the impact of the accounts receivable
securitization program.  Debt-to-EBITDA improved to 2.13x compared
to 2.65x at the end of 2003.

Return on assets strengthened to 5.8% from 4.7% and free cash
flow-to-adjusted debt excluding the underfunded pension position
rose to 17.4% from 11.7%.

Balance sheet debt levels were reduced to $489 million with cash
on hand rising to almost $197 million. With attractive growth
opportunities emerging in all three operating segments, Moody's
anticipates further improvement in credit metrics for the
remainder of 2004 and 2005.

The Ba2 issuer rating was adjusted to Ba3 to reflect notching down
from the senior implied rating to clarify that the issuer rating
is predicated on PKI issuing debt without subsidiary guarantees.

Ratings affirmed with a positive outlook include:

   -- PerkinElmer, Inc.

      * Ba1 for the senior secured revolving credit facility and
        secured term loan;

      * Ba2 for the senior implied rating;

      * Ba2 for the senior unsecured notes;

      * Ba3 for the senior subordinated notes; and

      * (P)Ba2/(P)Ba3/(P)B1 for securities to be issued pursuant
        to a 415 shelf registration.

Rating lowered with a positive outlook:

   -- PerkinElmer, Inc.

      * Issuer rating to Ba3 from Ba2.

PerkinElmer, Inc. headquartered in Wellesley, Massachusettes, is a
$1.6 billion diversified high-technology company operating in
three business segments -- Optoelectronics, Life and Analytical
Sciences, and Fluid Sciences.


PILLOWTEX: Selling Kannapolis Facility to Manchester for $4.5 Mil.
------------------------------------------------------------------
Pillowtex Corporation entered into a letter of intent with
Manchester Real Estate & Construction, LLC for the acquisition of
Pillowtex's Plant 1 complex and waste water treatment facility
located in Kannapolis, North Carolina.  The proposal includes a
purchase price of $3.0 million in cash plus a convertible
promissory note in the principal amount of $1.5 million.

According to the terms of the letter of intent, Pillowtex will
sell the Kannapolis facility to a limited liability company formed
by Manchester.  The promissory note received by Pillowtex will be
converted for no cost into a one-third interest in the newly
formed joint venture limited liability company.  The letter of
intent also requires Pillowtex to use its reasonable best efforts
to file a plan of reorganization that provides for the issuance of
all shares of common stock of Pillowtex, as reorganized, to
Pillowtex's unsecured creditors, subject to certain adjustments.

John Sterling, vice president and general counsel of Pillowtex,
said, "The agreement reached with Manchester is the culmination of
many months of marketing efforts for the sale of the Kannapolis
facility, during which Pillowtex worked very closely with
representatives of its unsecured creditors' committee.  We believe
that the agreement with Manchester represents the best value to
the Pillowtex estate and its creditors."

Chip Stein, vice president of Stein Fibers, Ltd. and co-
chairperson of the unsecured creditors committee, added that "the
Manchester agreement is particularly attractive to the creditors'
committee in that Pillowtex's ownership interest in the joint
venture going forward allows for Pillowtex and its creditors, many
of whom reside and work in the Kannapolis area, to share in the
potential upside of any redevelopment project at the site."

Pillowtex has filed a motion with the Bankruptcy Court to approve
certain bid protections in the letter of intent and to establish
bidding procedures for the property.  Assuming the Court approves
the motion, which is scheduled to be heard on October 19, 2004,
the property will go to auction and other qualified interested
parties will have the chance to outbid Manchester for the
property.  Pillowtex expects the auction to be held on or about
December 10, 2004.  In the meantime, Pillowtex will work with
Manchester to finalize the definitive documents for the sale and
related transactions.

Parties interested in obtaining additional information on the
Kannapolis property and participating in the upcoming auction
should contact Pillowtex's broker:

         Scott Peterman,
         Hilco Real Estate
         Telephone: 847-504-2472
         Email: speterman@hilcorealestate.com

A copy of the motion filed by Pillowtex with the Bankruptcy Court,
which includes a complete copy of the letter of intent, can be
obtained on Hilco's Web site -- http://www.hilcorealestate.com/

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.


POTLATCH CORP: Fitch Affirms Double-B Senior Debt Ratings
---------------------------------------------------------
Fitch Ratings removed Potlatch Corporation from Rating Watch
Evolving and affirmed the company's senior unsecured debt ratings
at 'BB+' and the senior subordinated ratings at 'BB'.

The Rating Outlook is revised to Stable.

Approximately $600 million in outstanding debt securities are
affected.  Potlatch's ratings reflect the company's competitive
position as a mid-sized integrated producer of wood and paper
products.

Potlatch sold its oriented strand board -- OSB -- business to
Ainsworth Lumber for $458 million on September 22 and is using a
portion of the proceeds to tender for the company's 10% senior
subordinated notes ($250 million) due 2011.  Another $58 million
will be contributed to the company's pension plan and another $150
million or so is earmarked for equity holders if the tender is
successful.

This will leave Potlatch with near $358 million in debt and Fitch
estimates better than $200 million in cash at year-end. For the
current year, Fitch estimates that EBITDA/interest coverage could
approach 3.5 times (x).

Without the OSB business, Potlatch's main earnings drivers will be
Resources (the company's timberland operations) and the remainder
of Wood Products (principally five sawmills, a plywood plant, and
a particleboard plant).  Operating profits from the latter are
expected to slightly more than compensate for unallocated
corporate expenses at recent lumber prices.

Paperboard and consumer tissue have not been significant earnings
contributors, and there is a potential for annual free cash flow
to fall to half its level before the sale.

Potlatch may not yet be finished focusing its business profile,
and further asset sales would eliminate net debt altogether if
cash is not distributed to shareholders.  Longer term, the company
is studying converting to a real estate investment trust, which
could further change the company's capital structure, as well as
financial disciplines.

Fitch believes that the company is heading in a better direction
but, with so many potentially moving parts, finds it difficult to
give credit to a better financial profile that may be
intermediate.

Potlatch is a mid-sized, integrated forester and manufacturer of
wood- and pulp-based products.  The company owns and operates
about 1.5 million acres of timberland in Idaho, Arkansas, and
Minnesota.  Its timberlands provide the majority of raw materials
for the company's wood products. Potlatch also makes pulp,
paperboard, and tissue and is a leading producer of retail
private-label tissue products.


PRIME HOSPITALITY: Acquisition Cues S&P to Withdraw Low-B Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'BB-' corporate
credit and 'B' senior subordinated ratings on hotel operator Prime
Hospitality Corp.  These ratings had been placed on
CreditWatch with negative implications on Aug. 19, 2004.

The rating withdrawal reflects the acquisition of Prime by the
Blackstone Group and Prime's purchase of more than 96% of its
outstanding $178 million 8.375% senior subordinated notes due
2012.  Stockholders of Prime approved the acquisition of the
company by Blackstone on October 6.  Based in Fairfield, New
Jersey, Prime operates more than 250 hotels under the brands of
AmeriSuites, Wellesley Inn & Suites, and Prime Hotels and Resorts.


RESOLUTION PERFORMANCE: S&P Shaves Corporate Credit Rating to B-
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Resolution Performance Products LLC to 'B-' from 'B',
citing continued weak earnings and a subpar financial profile.
At the same time, Standard & Poor's lowered its senior
subordinated debt ratings to 'CCC' from 'CCC+' and its senior
secured bank loan rating to 'B+' from 'BB-'.  Standard & Poor's
also lowered the ratings on the company's senior secured notes to
'B' from 'B+'.  The outlook is negative.

Houston, Texas-based Resolution is a leading producer of epoxy
resins and has more than $800 million of debt outstanding,
including payment-in-kind notes at a holding company level.

"The downgrade reflects weakness in the company's operating
results and deterioration in credit protection measures, as well
as concerns that high raw-material costs will further delay the
expected improvement in the company's financial profile," said
Standard & Poor's credit analyst Peter Kelly.

Profitability and cash flow have been negatively affected by the
high cost of commodity raw materials such as phenol and acetone
that have so far outpaced the company's efforts to increase sales
prices despite a rebound in demand.  Consequently, Resolution's
financial profile will likely remain subpar longer than had been
expected.

Standard & Poor's ratings on privately held Resolution continue to
reflect high financial risk and difficult conditions in key
product areas, which more than offset the company's decent
business position as a leading producer of epoxy resins.


SECURITY INDEMNITY: Notice to All Policyholders & Claimants
-----------------------------------------------------------
Notice to All Policyholders, Claimants and Other Persons Having an
Interest in Security Indemnity Insurance Company

              In the matter of the Rehabilitation of
               Security Indemnity Insurance Company

                  Superior Court of New Jersey
                Chancery Division, Mercer County


   NOTICE is given that on June 30, 2004, the Superior Court of
New Jersey, Chancery Division-Mercer County (the "Court"), entered
an Order ("the Liquidation Order") in the matter of the
Rehabilitation of SECURITY INDEMNITY INSURANCE COMPANY, Docket No.
MER-C-62-03, pursuant to which Security Indemnity was placed in
liquidation and the Commissioner of Banking and Insurance
("Commissioner") was named as Liquidator.  The Court found,
pursuant to N.J.S.A. 17:30C-1 et seq., the Company to be insolvent
and in a hazardous financial condition.

   The Liquidation Order directs the Commissioner to perform all
acts necessary and appropriate for the accomplishment of the
Company's liquidation and sets forth certain powers and duties of
the Liquidator and outlines procedures to be used in determining
what, if any, claims exist against the Company.

   There shall be no further claim payments by Security Indemnity
and all persons and entities are permanently enjoined from
pursuing litigation against the Company and from interfering with
the Commissioner's efforts to liquidation Security Indemnity.

   All claims against the Company must be asserted no later than
one year from the date of the Order of Liquidation, in the filing
form established by the Commissioner, or such claims will be
forever barred.  Claimants must file a Proof of Claim form, with
proper proof of loss, with Security Indemnity, for any actual or
potential claim(s) which they may have with or against the
Company, including both known claims and circumstances within
their knowledge which can reasonably be expected to give rise to
claims.  Claimants who do not know or have the reason to know of
the existence of actual or potential claims should be nonetheless
submit a Proof of Claim form to preserve their right to assert
claims against the Company in the future.

   Proof of Claim forms will be mailed during the latter part of
September 2004, to all known claimants as indicated by the records
of Security Indemnity.  Requests for a Proof of Claim form must be
submitted, in writing, to:

            Security Indemnity Insurance Company in Liquidation
            P.O. Box 554
            Cedar Knolls, New Jersey 07927

   A copy of the Order of Liquidation is available for public
inspection during reasonable business hours at:

            New Jersey Department of Banking and Insurance
            Office of Solvency Regulation
            20 West State Street, 8th floor
            Trenton, N.J. 08625

            Mercer County Court House
            Chancery Division-General Equity
            210 South Broad Street
            Trenton, N.J. 08650

                             *   *   *

Security Indemnity wrote primarily commercial and private
passenger auto business at the time of the rehabilitation order.
In February 2003, under an order of consensual administrative
supervision, Security Indemnity was prevented from writing new
business, with the expectation that its financial condition would
improve.  In June 2003, the Department ordered the company to stop
renewing existing customers.  Since then, the Deputy Rehabilitator
has been attempting to fix what was financially wrong with the
company through direct investment or the sale of company assets.
These efforts were not successful, prompting the Department's
action in January 2004 to preserve the assets of the estate for
the benefit of policyholders.  The Department reported in January
2004 that insurer had obligations under 6,532 policies.   In
addition to New Jersey, Security Indemnity wrote business in New
York, Pennsylvania, Connecticut, Florida, Maryland, Minnesota and
Missouri.


SHOWCASE AUTO: Hires Felderstein Fitzgerald as Bankruptcy Counsel
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of California
gave Showcase Auto Plaza permission to employ Felderstein
Fitzgerald Willoughby & Pascuzzi LLP as its bankruptcy counsel.

Felderstein Fitzgerald will:

    a) advise and represent the Debtor with respect to all matters
       and proceedings in its chapter 11 case;

    b) assist the Debtor in obtaining the use of cash collateral
       and other bankruptcy issues which may arise in the
       operation of the Debtor's business; and

    c) assist the Debtor with the preparation and confirmation of
       a plan of reorganization.

Donald W. Fitzgerald, Esq., a Partner at Felderstein Fitzgerald,
is the lead attorney in Showcase Auto's restructuring.  Mr.
Fitzgerald will bill the Debtor $350 per hour for his services.

Mr. Fitzgerald reports Felderstein Fitzgerald's professionals
bill:

  Professional               Designation           Hourly Rate
  ------------               -----------           -----------
  Steven H. Felderstein      Partner                  $425
  Thomas A. Willoughby       Partner                   325
  Paul J. Pascuzzi           Partner                   295
  Christa K. McKimmy         Associate                 225
  Karen L. Widder            Legal Assistant           150

Headquartered in Modesto, California, Showcase Auto Plaza --
http://www.showcaseautoplaza.com/-- sells automobiles and
provides auto service and repair. The Company filed for chapter
11 protection on July 15, 2004 (Bankr. E.D. Calif. Case No.
04-92709).  Donald W. Fitzgerald, Esq., at Felderstein Fitzgerald
Willoughby & Pascuzzi LLP, represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it estimated assets and debts of more than $10
million.


SOLUTIA INC: Wants Until March 11, 2005 to Remove Civil Actions
---------------------------------------------------------------
Solutia, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York to further extend the
deadline to remove actions through and including March 11, 2005.

The Debtors are parties to numerous Civil Actions and are
represented by many different law firms in each of them.  During
the first nine months of their Chapter 11 cases, the Debtors and
their professional restructuring advisors have been focused
primarily on stabilizing and maintaining day-to-day operations,
developing and implementing an overall business plan to serve as
the basis for a reorganization plan, analyzing complex contracts
and relationships in connection with the implementation of the
business plan, preparing and amending the Debtors' schedules of
assets and liabilities and statements of financial affairs, and
addressing certain litigation matters that are critical to the
reorganization.

The Debtors believe that the extension will afford them additional
time to make fully informed decisions concerning the removal of
the Civil Actions and will assure that their valuable rights
pursuant to Section 1452 of the Bankruptcy Code can be exercised
in the appropriate manner.

The Debtors' decision concerning whether to seek removal of any
particular Civil Action will depend on a number of factors,
including:

   (a) the importance of the proceeding to the expeditious
       resolution of the Debtors' Chapter 11 cases;

   (b) the time it would take to complete the proceeding in its
       current venue;

   (c) the presence of federal questions in the proceeding that
       increase the likelihood that one or more aspects thereof
       will be heard by a federal court;

   (d) the relationship between the proceeding and matters to be
       considered in connection with the plan, the claims
       allowance process and the assumption or rejection of
       executory contracts; and

   (e) the progress made to date in the proceeding.

To make the appropriate determination, the Debtors must analyze
each Civil Action in light of these factors.

Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications.

The Company filed for chapter 11 protection on December 17, 2003
(Bankr. S.D.N.Y. Case No. 03-17949).  When the Debtors filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts. (Solutia Bankruptcy News,
Issue No. 24; Bankruptcy Creditors' Service, Inc., 215/945-7000)


SOLUTIA: Increases Saflex(R) PVB Price by 29c as Capacity Tightens
------------------------------------------------------------------
Solutia, Inc., (OTC Bulletin Board: SOLUQ), confirmed that the
continued growth in demand for polyvinyl butyral (PVB) interlayer
accelerated the need to invest in new capacity in order to meet
its customers' future needs and assure supply reliability.  To
support those investments, the company is in the process of
implementing a 29 cent per square meter price increase for its
full range of Saflex(R) brand PVB products.

At the same time as the need for investment in new capacity, the
prices of key raw materials (PVOH, VAM, etc.) used in the
production of PVB products have continued to rise while
simultaneously supplies of these same materials have become
increasingly tight.  Saflex PVB is used in the production of high
quality laminated glazing for automotive, architectural and
specialty applications.

"Solutia remains strongly committed to the announced price
increase as a means of maintaining the most reliable service and
certainty of supply for our customers.  Customers' demand for PVB
products has dramatically increased year on year.  The announced
price increase allows Solutia to reinvest in capacity to meet
these new volume challenges," said Mitch Pulwer, General Manager,
Solutia Laminated Glazing Interlayers.

Mr. Pulwer further commented that: "Raw material costs have
dramatically increased.  Adding new capacity and keeping up with
raw material price increases will continue to be challenges into
the foreseeable future.  Solutia is very encouraged by the
positive response that we have had so far in completing new
contracts reflecting the announced increase in price.  This
illustrates that our customers are sensitive to market and
industry needs."

Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications.

The Company filed for chapter 11 protection on December 17, 2003
(Bankr. S.D.N.Y. Case No. 03-17949).  When the Debtors filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts.


STRATUS TECH: S&P Places B Corporate Credit Rating on CreditWatch
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B' corporate credit
rating on Maynard, Massachusetts-based Stratus Technologies Inc.
on CreditWatch with negative implications, following the company's
announcement that it is postponing the release of financial
results for its second quarter ended August 29, 2004.

"The release of earnings has been postponed while the company
completes a review of revenue recognition practices for certain
customer transactions," said Standard & Poor's credit analyst
Martha Toll-Reed.

Stratus previously announced that the revenue recognition review
could lead to a financial restatement for fiscal 2004 and the
first quarter of fiscal 2005.  Stratus also indicated that the
accounting issues identified relate to the timing of the recording
of revenue, not whether the transactions can be recorded as
revenue, and are not expected to result in changes to historical
cash flow.  An extended delay could violate the financial
reporting covenant in Stratus' bond indenture.

Total debt outstanding as of May 31, 2004, was $182 million.
Privately owned Stratus is a provider of "fault tolerant"
computers and related services for mission-critical applications.
Based on initially reported results (currently subject to
restatement), over the past 18 months Stratus stabilized revenues
and profitability through introducing new products and reducing
costs.  However, given relatively modest EBITDA levels, a revenue
restatement has the potential to impact historical profitability
levels.

Stratus had total cash balances of $27.8 million as of
May 31, 2004.

Standard & Poor's will monitor the timing and scope of the revenue
restatement.  If statements are released within the next month or
two, and if the revenue restatement is modest in scale and limited
in scope, the outlook could be revised to stable.  However, a
prolonged release delay or more extensive restatement could lead
to a downgrade.


TEXAS STATE: S&P's Rating on $5.4M Mortgage Bonds Tumbles to D
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Texas
State Affordable Housing Corp.'s $5.4 million multifamily mortgage
revenue bonds (NHT/GTEX Apartment Portfolio) series 2001B to 'D'
from 'CC'.  Standard & Poor's also lowered its rating on the
corporation's $3.2 million multifamily mortgage revenue bonds
series 2001C to 'D' from 'C'.  The outlook is negative.

The downgrades reflect an event of default due to full debt
service not being paid on the series 2001B and 2001C bonds; the
full depletion of the debt service reserve funds -- DSRF -- for
both series; and debt service coverage of 0.96x maximum annual
debt service coverage on the senior bonds, 0.84x on the
subordinate bonds, and 0.79x on the junior subordinate bonds,
based on unaudited June 30, 2004, year-to-date financial
statements.

Series 2001B and 2001C bonds are not credit enhanced.  The trustee
informed Standard & Poor's that an event of default exists for
series 2001B and 2001C because full principal and interest for the
Oct. 1, 2004, debt service payment date was not paid.  For series
2001B, principal and interest due Oct. 1, 2004, was approximately
$302,000.  A payment of approximately $139,000 was made from the
bond fund and monies in the DSRF, fully depleting it.
Approximately $112,000 was not paid.  For series 2001C, principal
and interest due was approximately $166,000.  A payment of $11,000
was made from the DSRF, and approximately $155,000 was not paid.
The DSRF for this series has also been fully depleted.

The NHT/GTEX portfolio contains a total of 1,764 units in seven
cross-collateralized properties.  Four properties are in the
Houston metropolitan statistical area representing a total of
1,232 units, which represents approximately 70% of the total units
in the pool, and three are in the Dallas metropolitan statistical
area representing 532 units.

Lower occupancy rates at the GTEX properties have been a
contributing factor to its poor performance.  The physical vacancy
rate for the portfolio based on year-to-date June 30, 2004,
operating statements was approximately 9%, but economic vacancy
was approximately 20%, due to high levels of concessions, which
are commonplace in these markets.  This economic vacancy rate has
remained relatively constant since 2003.


THERMACLIME INC: S&P Places B Rating on $50 Million Secured Loan
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' bank loan
rating and '2' recovery rating to chemicals and climate control
products manufacturer ThermaClime Inc.'s $50 million secured term
loan due 2009.

At the same time, Standard & Poor's affirmed its corporate credit
rating on the Oklahoma City, Oklahoma-based company.  The 'B-'
rating is the same as the corporate credit rating; this and the
'2' recovery rating indicate that bank lenders can expect
substantial (80% to 100%) recovery of principal in the event of a
default.

"The ratings on ThermaClime reflect its very aggressive financial
profile characterized by high debt leverage, an aggressive
financial policy, thin free cash flow, and limited liquidity,"
said Standard & Poor's credit analyst Paul Vastola.  "The rating
also reflects a well-below-average business position that includes
exposure to highly cyclical end markets, volatile raw-material
costs, customer concentration risk, and a modest financial base."
ThermaClime, which is owned by LSB Industries Inc., a public
company, operates two distinct business segments--chemicals and
climate control, which account for about 62% and 38% of 2003
sales, respectively.  The chemicals business produces nitrogen-
based products, including industrial acids, industrial-grade
ammonium nitrate, and fertilizers, while the climate control
business manufactures hydronic fan coils, water source heat pumps,
and custom air handlers.


THORNBURG MORTGAGE: Moody's Puts Low-B Ratings on Classes B-4 & 5
-----------------------------------------------------------------
Moody's Investors Service assigned an Aaa rating to the senior
certificates issued by Thornburg Mortgage Security Trust 2004-3.
Moody's also assigned ratings of Aa2 through B2 to the subordinate
certificates of the same transaction.

Tamara Zaliznyak, a Moody's analyst, said the ratings are based on
the credit support provided through subordination, the integrity
of the cash flows, and the legal structure of the transaction.

The securitization is backed by hybrid and adjustable-rate jumbo
mortgage loans, which were mostly originated or acquired by
Thornburg Mortgage Home Loans, Inc., in accordance with their
underwriting guidelines.  The credit quality of the loan pool is
in line with the average ARM loan pool backing recent jumbo
securitizations.  The pool has weighted average FICO score of 739
and weighted average LTV of 69%.  The pool has average loan
balance of approximately $483,237.

Thornburg Mortgage Home Loans and First Republic Bank will service
approximately 94% of the loans and Wells Fargo Bank, N.A. will act
as master servicer.

           Thornburg Mortgage Securities Trust 2004-3
     Mortgage Loan Pass-Through Certificates, Series 2004-3

               Class            Amount    Ratings
               -----            ------    -------
               A        $1,216,370,000        Aaa
               A-X       Interest Only        Aaa
               R                   100        Aaa
               B1           16,327,000        Aa2
               B2            9,419,000         A2
               B3            4,395,000       Baa2
               B4            3,767,000        Ba2
               B5            1,883,000         B2


UAL CORP: Names Lori Fox & Carol Fernandez Gov't. Affairs Managers
------------------------------------------------------------------
UAL Corporation (OTC Bulletin Board: UALAQ), parent of United
Airlines, named Lori Fox and Carol Fernandez to manage its
government affairs for its Mountain Region & Eastern Region,
respectively.  Ms. Fox is responsible for state and local
government relations for United in Colorado, as well as United's
locations in neighboring mountain states while Ms. Fernandez is
responsible for state and local government relations for United in
Virginia, as well as most East Coast United locations.

Ms. Fox most recently served as senior associate at GBSM in
Denver, where she provided high-level strategic counsel and
planning to Fortune 500 companies, government entities and non-
profit organizations. In addition, Ms. Fox has worked in
Washington, D.C., for the Vice President of the United States, the
Secretary of Transportation and the Secretary of Energy. In 2003,
she was elected to the Regional Transportation District Board of
Directors and served on the City of Denver Mayor's Aviation
Transition Committee.

Ms. Fox is based in Denver and reports to Margaret Houlihan,
director of state and local governmental affairs, who is based in
Chicago, Illinois.

"Lori brings to the United team a wealth of knowledge and
experience in government relations, public affairs and public
relations, as well as a vast network of regional contacts," said
Ms. Houlihan. "She has achieved a dynamic and well-rounded career
that also includes community relations and consulting. Lori has a
proven record of building relationships and collaborating on high-
level projects. We are delighted to welcome her to United."

Ms. Fernandez, a 26-year veteran at United, most recently served
as United's general manager of customer service at Ronald Reagan
National Airport and as project manager at Washington Dulles
International Airport in the areas of customer service, facilities
management and airport security processes. She has also served as
a United manager at Baltimore Washington International Airport and
as manager in reservations, both in the U.S. and internationally.

Ms. Fernandez is based in Washington, D.C., and reports to
Margaret Houlihan, director of state and local governmental
affairs, who is based in Chicago, Illinois.

"Carol's vast experience with United and its East Coast operations
gives her the necessary background to inform government officials
on the company's policies, positions and goals in this important
market," said Ms. Houlihan. "Over the years, she has developed
strong relationships with aviation agencies and local officials,
enabling her to make a smooth transition into her new role. As an
influential member of the airport community, Carol is well-suited
to join the United governmental affairs team."

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.


UAL CORPORATION: Objects to James Burley's $50 Million Claim
------------------------------------------------------------
UAL Corporation and its debtor-affiliates object to Claim No.
37275, for $50,000,000, which was filed by James R. Burley of
Redondo Beach, California.  For 17 years, Mr. Burley worked for
the Debtors as a mechanic at Los Angeles International Airport.
Mr. Burley alleges that during his employment, he conceived of a
way for a smaller aircraft to share a larger taxi lane originally
built for larger aircraft.

On July 14, 2000, Mr. Burley, assisted by the Debtors, filed
Patent Application No. 09/615,292, entitled "Convertible Dual
Taxilane," with the United States Patent and Trademark Office.
The USPTO rejected the application.  Mr. Burley then filed Patent
Application No. 10/153,465 with the same title.  The USPTO has
not ruled on this Application yet.

In 2000, Mr. Burley asked the Debtors for monetary compensation
for use of his invention, but the Debtors refused.  On
February 17, 2004, Mr. Burley assigned the rights of the Patent
Application to the Debtors.  Subsequently, Mr. Burley asserted
that the Debtors engaged in duplicitous behavior and demanded a
legal resolution.  According to Mr. Burley, the Debtors are using
his invention as disclosed in the Patent Application without
providing monetary compensation.

The Burley Claim is based on three causes of action:

   (1) patent infringement;

   (2) breach of contract; and

   (3) fraud.

James H.M. Sprayregen, Esq., at Kirkland & Ellis, in Chicago,
Illinois, says that Mr. Burley's causes of action are without
merit and Claim No. 37275 should be dismissed.  Mr. Burley is not
entitled to any compensation because the USPTO has not granted
the Patent Application, so there cannot be infringement.  Also,
the Debtors' use of the invention is not unauthorized because Mr.
Burley signed away the rights in February 2004.

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)


UAL CORPORATION: Court Approves Guilford Settlement
---------------------------------------------------
The United States Bankruptcy Court for the Northern District of
Illinois approved the settlement entered into by UAL Corporation
and its debtor-affiliates, and Guilford Transportation Industries.

As reported in the Troubled Company Reporter on Oct. 6, 2004,
the Debtors frequently buy and sell aircraft. In 2002, the
Debtors, Guilford Transportation Industries, Inc., and Griffin
Title & Escrow, Inc., entered into an Aircraft and Simulators
Purchase and Sale Agreement, under which the Debtors would sell
Guilford 24 used Boeing 727-222A Aircraft with related auxiliary
power units, used engines and other parts, plus three used 727
flight simulators. In 2002, Guilford took delivery and paid for
the first 22 Aircraft. However, Guilford refused delivery of, and
did not pay for, the Remaining two Aircraft.

In response, on December 11, 2003, the Debtors filed Adversary
Proceeding No. 03-A-04753, captioned United Air Lines, Inc. v.
Guilford Transportation Industries, Inc., et al. The Debtors
alleged that Guilford breached the Agreement by refusing to take
delivery and pay for the Remaining Aircraft. The Debtors sought
$1,300,000 in damages based on the contract price for the
Remaining Aircraft.

Guilford denied the allegations and filed a Counterclaim.
Guilford argued that the Debtors failed to provide necessary
documents to secure Federal Aviation Administration certification
for the Aircraft.  Due to this oversight, the Aircraft remain
grounded. Also, Guilford alleged that the Debtors' employees
tampered with the simulators prior to delivery. Guilford asked the
Debtors to pay more than $200,000 in compensation.

Since the beginning of this dispute, the parties have been in
negotiations to settle out of court.  James H.M. Sprayregen, Esq.,
at Kirkland & Ellis, in Chicago, Illinois, told the Court that
both sides have reached a settlement that will allow the Debtors
to recover a dollar amount similar to what the Debtors would have
claimed as damages at trial.  The Settlement removes all trial
risk, reducing costs that would be incurred by continued
prosecution of the Adversary Complaint.

Under the Settlement, Guilford will also pay the Debtors $300,000
in cash.  Guilford will release $310,000 to the Debtors, which is
in an escrow account that previously held the $3,240,000 initial
down payment for the transaction.  The Debtors will provide
Guilford with assistance in securing FAA certification for the
Aircraft, including providing personnel to meet with regulatory
officials or other entities.

Guilford relinquishes and waives any and all rights to the two
Remaining Aircraft.  The Debtors will voluntarily dismiss the
Adversary Proceeding and Guilford will dismiss its Counterclaim.
Guilford will pay the Debtors $300,000 and will direct $310,000
held in an escrow account, via wire transfer, to the Debtors'
account at:

               Bank One
               1 Bank One Plaza
               Chicago, IL 60670
               ABA Number 071000013
               Account Number 51-67795
               United Airlines Special Account

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)


UNITED DEFENSE: S&P Lifts Corporate Credit Rating to BB+ from BB
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings, including
the corporate credit rating to 'BB+' from 'BB', on United Defense
Industries Inc.  The outlook is stable.  The defense contractor
has around $550 million in debt.

"The upgrade reflects improved, but still somewhat limited,
program diversity, participation on key defense systems now in
development, and a satisfactory financial profile," said Standard
& Poor's credit analyst Christopher DeNicolo.

The ratings on Arlington, Virginia-based United Defense reflect:

   (a) fairly narrow product lines,

   (b) vulnerability to program cancellation or stretch-out,

   (c) the potential for share repurchases and acquisitions,

   (d) satisfactory financial ratios and strong niche positions in
       tracked,

   (e) armored combat vehicles,

   (f) naval weapon systems, and

   (g) ship maintenance and modification.

Funded backlog was a healthy $2.2 billion as of June 30, 2004,
approximately one year's revenues.

The firm serves as prime contractor on a few well-supported
military programs with incumbency spanning decades.  United
Defense had historically been primarily a supplier to the U.S.
Army but diversification has been improved by the debt-financed
acquisition of United States Marine Repair in 2002, a provider of
ship maintenance and modernization services for non-nuclear ships
for the U.S. Navy.  The acquisition resulted in a better balance
of revenues from Army and Navy programs and increased the
proportion of the U.S. defense budget that United Defense is able
to bid for.

Revenues and profits are likely to grow only modestly in the
intermediate term.  The company's already satisfactory financial
ratios are expected to be maintained despite possible share
repurchases and acquisitions.


URS CORPORATION: Wins $286 Million 10-Year U.S. Navy Contract
-------------------------------------------------------------
URS Corporation's (NYSE:URS) EG&G Division has been awarded an
indefinite delivery/ indefinite quantity contract by the U.S. Navy
to provide engineering, technical and logistics services at the
Navy's Fleet Technical Support Center, Atlantic in Hampton Roads,
Virginia. Under the terms of the contract, as the Navy issues
specific task orders, EG&G will provide mechanical and electrical
engineering support; logistics, industrial and installation
services; assessment and maintenance of shipboard systems and
equipment; and training services. The 10-year contract has a
maximum value to URS of $286 million.

Commenting on the contract win, Martin M. Koffel, Chairman and
Chief Executive Officer of URS, said: "This is another significant
win for our EG&G Division, which underscores our leading position
in providing sophisticated engineering, technical and logistics
services to the U.S. military. We look forward to working with the
Navy on this important assignment."

                        About the Company

URS Corporation -- http://www.urscorp.com/-- offers a
comprehensive range of professional planning and design, systems
engineering and technical assistance, program and construction
management, and operations and maintenance services for surface
transportation, air transportation, rail transportation,
industrial process, facilities and logistics support,
water/wastewater treatment, hazardous waste management and
military platforms support. Headquartered in San Francisco, the
Company operates in more than 20 countries with approximately
27,000 employees providing engineering and technical services to
federal, state and local governmental agencies as well as private
clients in the chemical, manufacturing, pharmaceutical, forest
products, mining, oil and gas, and utilities industries.

                          *     *     *

As reported in the Troubled Company Reporter on August 20, 2004,
Moody's upgraded URS Corporation's ratings to reflect the
company's reduced debt balances, improved credit metrics, and
expectations that revenues and margins will support further
improvement in the company's cash flows.  The company's rating
outlook has been changed from positive to stable.

Moody's has upgraded these ratings:

   * $225 million senior secured revolving credit facility, due
     2007, upgraded to Ba2 from Ba3;

   * $84 million senior secured term loan A, due 2007, upgraded to
     Ba2 from Ba3;

   * $270 million senior secured term loan B, due 2008, upgraded
     to Ba2 from Ba3;

   * $130 million 11.5% senior unsecured notes, due 2009, upgraded
     to Ba3 from B1;

   * $20 million 12.25% senior subordinated notes, due 2009,
     upgraded to B1 from B2;

   * Senior Implied, upgraded to Ba2 from Ba3;

   * Senior Unsecured Issuer, upgraded to Ba3 from B1;

   * Speculative Grade Liquidity Rating, upgraded to SGL-1 from
     SGL-2.

The ratings upgrade:

   (1) reflects the company's improved balance sheet;

   (2) strong operating performance; and

   (3) the expectation that the company's services will continue
       to enjoy stable demand.

In its third fiscal quarter, URS used the net proceeds of an
equity offering, cash on hand and additional borrowings under its
credit facility to redeem $70 million of its 11.5% senior notes
and $180 million of its 12.25% senior subordinated notes.  As a
result of these redemptions, the company's overall debt balance
decreased by over $180 million to about $594 million.  This is a
significant improvement over the $955 million debt balance at
October 31, 2002. The company's ratings also benefit from:

   (1) a stable customer base;

   (2) recurring revenues;

   (3) a $3.9 billion backlog at April 30, 2004; and

   (4) expected increases in defense and homeland security
       spending.

The ratings are constrained by the challenges the company faces in
growing its state and local revenues due to state budget deficits
and delays in funding of state and local infrastructure projects.
Revenues from the company's private clients are also under
pressure due to reduced levels of capital spending and cost-
cutting measures by the company's private clients.  In 2002, URS
purchased EG&G for $500 million for a purchase multiple that
equates to just under 10 times its fiscal 2003's EBITDA.  This
acquisition transformed URS as EG&G represents around 32% of total
revenues.  Going forward, Moody's does not expect the company to
make large debt-financed acquisitions as URS has publicly stated
that it wants to maintain a debt to capitalization ratio below
40%. A change in policy due to an acquisition or other
transaction, however, would pressure the ratings.  A decrease in
the company's revenues, operating margins and free cash flow
generation would also pressure the rating.


US AIRWAYS: Has Until October 27 to File Schedules & Statements
---------------------------------------------------------------
Pursuant to Section 521 of the Bankruptcy Code and Rule 1007 of
the Federal Rules of Bankruptcy Procedure, each Chapter 11 debtor
is required, within 15 days of the Petition, to file with the
bankruptcy court:

      (i) a list of the debtor's equity security holders, and

     (ii) schedules of the debtor's assets and liabilities, its
          current income and expenditures, its executory
          contracts and unexpired leases, and a statement of its
          financial affairs.

Brian P. Leitch, Esq., at Arnold & Porter, tells Judge Mitchell
that due to the size and complexity of the operations of US
Airways, Inc., and its debtor-affiliates and the time that will be
required to compile the information for the Lists, Schedules, and
Statements, an extension is necessary and appropriate.  The
Debtors have tens of thousands of creditors and other parties-in-
interest and the operations are currently stretched.  There are
myriad critical matters that the Debtors' limited staff of
accounting and legal personnel must address in the initial days of
these bankruptcy cases.  Additionally, certain prepetition
invoices have not been received or entered into the Debtors'
financial systems.  As a result, the Debtors have not gathered the
necessary information to prepare and file their Lists, Schedules,
and Statements.

At the Debtors' request, the Court extends the deadline to file
the Lists, Schedules and Statements until October 27, 2004,
without prejudice to the Debtors' right to seek further
extensions.

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 Bankruptcy News, Issue No. 65;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


US AIRWAYS: Hires American Appraisal as Valuation Consultants
-------------------------------------------------------------
US Airways, Inc., and its debtor-affiliates sought and obtained
the Court's authority to employ American Appraisal Associates,
Inc., as expert valuation consultants for certain assets of their
estates.

According to Bruce R. Lakefield, President and Chief Executive
Officer of US Airways, American Appraisal Associates has a wealth
of experience in providing consulting and valuation services to a
wide cross-section of industries and institutions around the
world.  American Appraisal Associates is well qualified and able
to represent the Debtors in a cost-effective, efficient and
timely manner.

American Appraisal Associates will prepare independent valuations
of various categories of the Debtors' assets.  American Appraisal
Associates will also provide expert testimony in the bankruptcy
proceedings.

Pursuant to an Engagement Agreement dated August 10, 2004,
American Appraisal Associates will provide its services in two
phases.  In Phase I, American Appraisal Associates will review a
series of seven appraisal reports, dated Match 12, 2004, which
were prepared for US Airways by BACK Aviation Solutions.  This
report reflected valuations as of December 31, 2003.  American
Appraisal Associates will prepare independent valuations of these
assets as of August 30, 2004, on both a fair market value and
distressed sale basis.

In Phase II, American Appraisal Associates will compile a
comprehensive summary appraisal report of the analysis and
conclusions of Phase I.

American Appraisal Associates will be paid $125,000 for Phase I
and $30,000 for Phase II.

American Appraisal Associates will apply to the Court for
allowances of compensation and reimbursement of expenses for
consulting services.  The customary hourly rates charged by
American Appraisal Associates' professionals anticipated to be
assigned to the Debtors' cases are $400 per hour for Anthony J.
Wells and $300 per hour for Linda Sweet.

Mr. Lakefield relates that American Appraisal Associates received
a $125,000 initial retainer.  This amount represented the agreed
upon fee for American Appraisal Associates' prepetition appraisal
services.  American Appraisal Associates' invoice for services
performed before the Petition Date were credited against that
retainer.  American Appraisal Associates received a $5,000
additional retainer on September 11, 2004, to cover its services
in preparing for and consulting with the Debtors' counsel on
testimony at first day hearings.  Related fees and expenses
incurred will be credited against the retainer.  American
Appraisal Associates will request an additional retainer for any
other services.

According to American Appraisal Associates' books and records,
during the 90-day period before the Petition Date, American
Appraisal Associates received $130,000 from the Debtors for
professional services performed and expenses.

American Appraisal Associates will conduct an ongoing review to
ensure that no conflicts or other disqualifying circumstances
exist or arise.  If any new facts or circumstances are
discovered, American Appraisal Associates will supplement its
disclosure to the Court.  American Appraisal Associates has
informed the Debtors that it:

     (i) has no connection with the Debtors, its creditors or
         other parties in interest in these cases,

    (ii) does not hold any interest adverse to the Debtors'
         estates; and

   (iii) is a "disinterested person" as defined in Section
         101(14) of the Bankruptcy Code.

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 Bankruptcy News, Issue No. 66;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


US AIRWAYS: Gets Court Okay to Assume BofA Credit Card Agreement
----------------------------------------------------------------
US Airways, Inc., and its debtor-affiliates purchase prepaid value
cards from Bank of America, N.A., pursuant to a Prepaid Card
Purchase Agreement dated July 24, 2002.  The Debtors distribute
the Cards to their employees to purchase goods and services
incidental to the Debtors' business.  As part of the Agreement,
the Debtors maintain an account at BofA designated for use in
purchasing new Cards and adding value to existing Cards.  The
current balance in the account is $1,000,000.

Either the Debtors or BofA may terminate the Card Agreement by
providing 30 days' notice.  If the Card Agreement is terminated,
BofA will pay the Debtors 60% of the account balance within five
business days, 30% within 30 days and the final 10% by 60 days of
termination.

Brian P. Leitch, Esq., at Arnold & Porter, relates that by
streamlining purchases and controlling disbursements, the Card
Agreement inures to the benefit of the Debtors' estates, creditors
and other parties-in-interest.  The Cards eliminate the need for
numerous petty cash allotments and provide a control mechanism to
ensure that purchases of incidental goods and services are
appropriate, authorized and properly recorded.

Judge Mitchell agrees with the merits and allows the Debtors to
assume the Card Agreement with BofA.

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 Bankruptcy News, Issue No. 65;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


USEC INC: S&P Shaves Corporate Credit Rating One Notch to BB-
-------------------------------------------------------------
Standard & Poor's Rating Services lowered USEC Inc.'s corporate
credit rating to 'BB-' from 'BB'.  The outlook is negative.

Standard & Poor's also lowered its senior secured bank loan rating
on USEC to 'BB+' from 'BBB-' and its senior unsecured debt rating
to 'B' from 'BB-'.

"The rating action reflects concerns about the company's cash flow
generating ability in light of its depleting long-term uranium
inventory, which historically has supplemented the company's weak
cash flow, rising power costs that will offset much of the higher
average contract realizations, and the continued efforts by
Louisiana Energy Services to build a low-cost enrichment facility
in the U.S.," said Standard & Poor's credit analyst Dominick
D'Ascoli.

The ratings on USEC Inc. reflect its:

   (a) poor cost profile,
   (b) limited cash flow generating ability,
   (c) aggressive competitors, and
   (d) lack of operating diversity.

These weaknesses are somewhat offset by its leading market
position in the low uranium enrichment industry and stable
industry demand.

With a 30% market share, USEC's ratings benefit from its position
as the world's largest supplier of low enriched uranium, which is
used in the production of nuclear fuel for nuclear reactors to
produce electricity.  Nuclear reactors supply base load
electricity, which is fairly stable, resulting in stable demand
for nuclear fuel.  Half of the low enriched uranium supplied by
USEC is produced at one facility and half is obtained (from one
supplier) through USEC's role as executive agent under an
agreement between the U.S. and Russia, whereby USEC purchases
enriched uranium recovered from dismantled Russian nuclear weapons
for resale to USEC customers.  With a high-cost facility,
operating diversity at USEC is weak.  In addition, some customer
concentration risk exists with two customers accounting for around
24% of 2003 revenue.


USG CORP: Wants Until March 31, 2005 to Remove State Court Actions
------------------------------------------------------------------
Paul N. Heath, Esq., at Richards, Layton, & Finger, P.A., in
Wilmington, Delaware, relates USG Corporation and its debtor-
affiliates need to retain flexibility to remove products liability
lawsuits relating to asbestos to the federal court as their
Chapter 11 cases progress.  The Debtors require time to determine
which, if any, of the Proceedings should be removed and, if
appropriate, transferred to the District of Delaware.

Accordingly, the Debtors ask the Court to extend the time for them
to file notices with respect to any proceedings that are subject
to removal under Section 1452 of 28 U.S.C., through and including
March 31, 2005.  The extension would apply to any actions brought
against U.S. Gypsum Company or any of the Debtors, whether
asbestos-related or not.

The Debtors further ask Judge Fitzgerald that the requested
extension be without prejudice to:

    -- any position the Debtors may take regarding whether Section
       362 of the Bankruptcy Code applies to stay any Proceedings;

    -- the Debtors' right to seek further extensions of time to
       remove any and all Proceedings; and

    -- any position the Debtors may take regarding the effect of
       the filing of a proof of claim on any Proceedings or any
       matters relating to these cases.

The Court will convene a hearing on November 15, 2004, to consider
the Debtors' request.  By application of Del.Bankr.LR 9006-2, the
Debtors' removal deadline is automatically extended through the
conclusion of that hearing.

Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.

The Company filed for chapter 11 protection on June 25, 2001
(Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., and Paul
E. Harner, Esq., at Jones Day represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed $3,252,000,000 in assets and
$2,739,000,000 in debts. (USG Bankruptcy News, Issue No. 73;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


VLASIC: Campbell Present 5 More Witnesses in $250M Spin-Off Suit
----------------------------------------------------------------
Campbell Soup Company called five more witnesses to testify before
the United States District Court for the District of Delaware in
the $250 million lawsuit commenced by VFB, LLC, attacking the
spin-off of Vlasic Foods from Campbell:

A. Richard Emmett

   Mr. Emmett is currently the Director of Strategic Planning and
   Corporate Development at Campbell Soup.  In 1997, he was the
   Company's Assistant Treasurer.  As Assistant Treasurer, Mr.
   Emmett was responsible for interest rate exposure management
   and for helping Anthony DiSilvestro manage the capital
   structure of Campbell Soup.  He was also responsible for
   foreign exchange exposure management, and relationships with
   the banks, with the credit rating agencies, and with the
   investment banks as well.

   According to Mr. Emmett, Campbell Soup's strongest commercial
   banking relationships include JPMorgan, Bank of America,
   Chase, Wachovia, Bank of Montreal and several others.

   In 1997, Mr. Emmett became interested in joining the spinoff
   company -- which because Vlasic -- as its Treasurer.  "I
   thought it had very good prospects.  There were clearly some
   issues, but they were strong brands.  And the management team
   was first rate, in my opinion. . . ."  Mr. Emmett relates that
   Vlasic was being set up with a strong financial structure and
   it had a good strategic plan.

   It wasn't until late February 1998 that Mr. Emmett learned he
   wasn't going to get the job.  He was told that there were
   already a lot of Campbell people in Vlasic and that management
   preferred to look outside of Campbell for a Treasurer.  Mr.
   Emmett notes that the people that joined the Vlasic
   organization were among the best and the brightest at Campbell
   Soup Company.

   Mr. Emmett compiled a management projection put together with
   the Specialty Foods management team to go with the information
   memorandum sent to six credit banks invited to form the core
   of the credit syndicate for Vlasic.  "Five of the six banks
   pitched strongly to play the administrative agent role."
   JPMorgan was eventually chosen for that role.  JPMorgan
   believed that the credit could get a BBB rating.

   The banks committed up to $925,000,000.  Mr. Emmett notes that
   the facility was oversubscribed, "which is an indication of
   the broad level of interest and the success of the process."

   Mr. Emmett believes that the credit facility was a great deal
   to Vlasic -- it was a fair agreement, the pricing was
   excellent, the terms and conditions he negotiated were
   excellent for Vlasic, and the covenants were relatively light.
   "It had maximum flexibility and maximum efficiency, and it
   would allow Bill Lewis [Campbell Soup Company Chief Financial
   Officer] and his team to put their own capital structure in
   place in any way they wanted after the spin."

   "So I was strongly supportive of going with a bank credit
   facility for the initial capitalization of the company.  But
   the problem with that was that the bank facility was a
   floating rate borrowing and to have 100-percent floating rate
   debt I thought unnecessarily exposed Vlasic to increases --
   potential increases in short-term interest rates.  So I felt
   as if it was quite important to put a hedging program in
   place, to help shift some of that floating interest rate
   exposure to fixed interest rate exposure.  And I made a
   recommendation to Mr. Lewis and to the Campbell team that we
   put such a program in place," Mr. Emmett says.  According to
   Mr. Emmett, the program he suggested was approved.  He put in
   place two tranches, totaling $150,000,000.

   After the spinoff, Mr. Emmett held his Vlasic shares.  "I got
   what was to me a substantial amount of value in Vlasic shares
   arising from my holdings of Campbell Soup Company stock.  I
   believed in the story.  I believed in it after the spin.  I
   thought these guys were going to make a success of this
   venture and I held my shares in Vlasic all the way to the
   end."

   Upon cross-examination, Mr. Emmett says, he believes that VFI
   shareholders were better off with $500,000,000 of debt as
   opposed to a lesser amount of debt on the date of the spin.
   Mr. Emmett asserts that the creditors at VFI had substantial
   equity cushion.  "They had full knowledge of what the outlook
   was for the company.  They were not in the dark at all as to
   the amount of debt that the company would have."

B. Srini Sripada

   Mr. Sripada is currently the Marketing Director on Team
   WalMart.  He has been with Campbell Soup Company for about 10
   years.  Between 1995 until the time of the spin, Mr. Sripada
   was the marketing manager on the Swanson Dinners business.
   Mr. Spirada talked about the different marketing efforts the
   Company made, researches conducted to find out whether the
   Company met consumers needs, brand reviews, among others.

C. David W. Johnson

   Mr. Johnson was the former Chief Executive Officer and
   Chairman of the Campbell Soup Company.

   Basil Anderson, Campbell's Chief Financial Officer, headed the
   drive for strategic alternatives, for strategy within the
   company.  Mr. Johnson acknowledged that Mr. Anderson presented
   to the Board that a spinoff would benefit Campbell and its
   shareholders by providing a tight and focused strategy for the
   remaining strategies and also benefit the divested businesses
   by enabling them to better focus on their operations and
   strategies.  "That was absolutely the nub of what he was
   recommending and what we were trying to do.  And I fully
   supported that," Mr. Johnson says.

   After months of deliberation, the Board approved the spinoff
   and appointed Robert Bernstock as the Chief Executive Officer
   of the new company.  The Board also started recruiting other
   executives for the NewCo.

   Mr. Johnson does not believe that the Swanson and Vlasic
   business were milked.  According to him, Swanson and Vlasic
   were supported with capital expenditures, advertising and
   promotion.

   "Swanson was a business that we were trying to spend cap on to
   tap into cost savings and increase productivity," Mr. Johnson
   says.

   As to the Vlasic business, Mr. Johnson relates that given that
   it had innovation, given that sandwich stackers had come along
   and that sandwich stackers have not only grown the Vlasic
   business but had grown the entire pickle market, there was a
   surge of excitement in the company and a desire to continue
   investing and innovating with pickles and building it.

   According to Mr. Johnson, the spun-off businesses were non-
   strategic.  "The fact that you sell or that you put into a
   spin company is not necessarily a commentary that they are
   blighted.  It is a commentary usually on assessments of brands
   that could be given greater value by being put into a
   different organization of management."

   "I think that the biggest miss and the biggest need was for a
   top-flight Chief Financial Officer -- a person who knew how to
   control costs, incent people, follow expenditures, and to meet
   budgets and be everywhere representing the Chief Executive,
   who would be looking how to build the business and helping to
   focus the Chief Executive on one of the key priorities," Mr.
   Johnson tells the District Court.  "The fact that [VFI CFO
   William Lewis] spent really such a short period of time and
   then when he left was replaced with somebody who was a bright,
   intelligent person, but without experience at all, as far as
   I'm concerned, without any experience to be in charge of
   finance, was really one big blunder."

   Mr. Johnson says that he does not truly understand why Mr.
   Lewis wasn't with VFI.  "But if he was to go, he should have
   been replaced with somebody of that nature in accord with the
   brief that was given to the search consultants at the end of
   '98, before the spin took place.  I think that would be very,
   very key."

D. James J. Spadaro, Jr.

   Mr. Spadaro was one of the partners at Dechert, Price & Rhoads
   -- now known as Dechert LLP -- who worked on the tax aspects
   of the transaction with Daniel P. Hays.  Mr. Spadaro has been
   working for Dechert for 23 years.

   According to Mr. Spadaro, Mr. Hays called him up sometime in
   May 1997 and told him that the company was considering
   spinning off some business.  "[Mr. Hays] wanted to come over
   to discuss with me and whomever else I thought was appropriate
   at the firm the tax aspects of that," Mr. Spadaro relates.
   Mr. Spadaro asked Richard Wild, who is a senior tax partner at
   Dechert, to join him.  Together, they met with Mr. Hays and
   Sam Filippine.  "We talked about some of the issues, and we
   were engaged to do the tax work and we carried that through
   all the way to the end of the transaction."

   Mr. Spadaro relates that there were two business purposes for
   the transaction -- the fit and focus business purpose and the
   cost savings business purpose.  Mr. Spadaro explains that
   there is nothing in the tax rules that prohibits a company
   from having more than one business purpose for doing a
   qualified spinoff.  "[T]he IRS guidance on the subject
   requires that you submit and inform the IRS about all your
   business purposes for engaging in a transaction."

   Mr. Spadaro refuted the assertion that Campbell employees were
   simply directed to fictionalize or make up cost savings.

   According to Mr. Spadaro, the IRS refused to issue a private
   letter ruling on the fit and focus business purpose because
   there were internal guidelines that would not permit them to
   give a fit and focus ruling to a company that had significant
   shareholders.  "We told them that we respectfully disagreed
   with them. . . .  We believed very strongly that the fit and
   focus business purpose fit our transaction like a glove."

   Mr. Spadaro explains that there is published guidance by the
   IRS in the form of Revenue Ruling 96-30 that stress that
   ordinarily, a fit and focus business purpose won't be
   entertained as the basis of a ruling for companies that have
   so-called significant shareholders; namely, 5% or more.

   "We knew, we had read the guidance, of course, we knew that
   when we made our pre-submission conference memo.  We thought,
   though, that in this case -- the reason the IRS has that rule
   is that they say, if you took the extreme, like a solely owned
   business, that was run by the shareholder who owned it, a
   spinoff wouldn't accomplish -- on a fit and focus business
   purpose, wouldn't accomplish anything, because the individual
   would be running both businesses after.  We said, that's not
   the Campbell situation at all, because the significant --
   there are significant shareholders.  That wasn't factually in
   dispute at all.  But this was a very major company, very
   professionally run by professional management, not by
   shareholders . . . have a very excellent Board of Directors,
   of which only three of the members of the family were on.  And
   we didn't think that a major public company like this -- that
   the rule was written to pick up a major public company like
   this.  And we intended to try to convince the [IRS] of that,
   but they told us, basically, no."

   Mr. Spadaro tells the District Court that if the transaction
   were to not have been a tax-free spinoff, it would have been a
   dividend.  And if it were a dividend, it would have been
   taxable to the shareholders.  It would also give rise to a
   gain within the company doing the distribution, which would be
   Campbell Soup.

E. Gerald Lord

   Mr. Lord was the Corporate Controller at Campbell at the time
   of the spinoff.  His three most important accountabilities
   were:

      (1) to insure that all of the company's financial
          reporting, externally and internally, to the Board were
          in accordance with U.S. GAAP and SEC regulations;

      (2) to insure the company maintained a rigorous system of
          internal controls; and

      (3) to participate in and control the company's future
          plans, both strategic financial plans and operating
          plans.

   At the time of the Vlasic spinoff, Campbell's outside auditors
   were Pricewaterhouse.

   The spinoff raised one unique accounting issue related to
   asset valuation to be carried forward into the spun company.

   Mr. Lord relates that the FAS121 financial accounting standard
   basically considers two ways of looking at assets in the
   transaction:

      -- assets are held for continued use; and
      -- assets are being held for sale.

   "And advice we were given from our auditors was that FAS121
   suggested that assets should be considered as held for
   continued use under a spinoff transaction, which at the time
   seemed fairly logical to me because we were basically
   splitting the company in two and giving the company to two,
   the same shareholders -- new spun company, the same
   shareholders.  So there was continuous use and it seemed
   logical," Mr. Lord says.

   As a result, Mr. Lord continues, Campbell considered the
   assets were held for continued use.  "We did the relevant
   impairment testing which requires that projected cash flows
   are modeled for the useful life of the assets concerned and
   that an undiscounted calculation is done of those projected
   cash flows.  If the aggregate of those multiple years of
   undisclosed cash flows equals or exceeds net book value of the
   assets, then no action is required.  And in the testing we
   did, that wasn't, no action was required, so the net book
   values were maintained at their historical rate."

   Mr. Lord also disputes the allegation that there was
   significant loading of Vlasic and Swanson during fiscal 1997.
   "I absolutely believe I would have known if anything was going
   on."  The word loading typically means shipments timed to the
   end of a quarter to increase retailer inventories. (Vlasic
   Foods Bankruptcy News, Issue No. 48; Bankruptcy Creditors'
   Service, Inc., 215/945-7000)


W.R. GRACE: Asks Court to Bless Honeywell Settlement Agreement
--------------------------------------------------------------
On September 20, 2004, W.R. Grace & Co., and its debtor-affiliates
and subsidiaries entered into a settlement agreement with
Honeywell International, Inc., concerning the contamination of a
Grace-owned property at Route 440 in Jersey City.  Under the terms
of the settlement agreement, the Debtors will transfer the Route
440 property to Honeywell, and Honeywell will fully indemnify the
Debtors and pay them $62.5 million.

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


http://sec.gov/Archives/edgar/data/1045309/000095013604003047/file002.htm

The Route 440 property, approximately 32 acres, was acquired by
W.R. Grace & Co. in 1981.  Unbeknownst to Grace at that time, the
Route 440 property was contaminated with approximately
1.5 million tons of chromium waste from a chromium manufacturing
facility -- owned by a Honeywell predecessor -- which had
closed in 1954.  Grace sued Honeywell in the United States
District Court for the District of New Jersey for damages and for
an injunction ordering Honeywell to remove the chrome waste and
replace it with clean fill.

The New Jersey District Court decided in Grace's favor.
Honeywell appealed that decision.  Shortly afterwards, the Third
Circuit directed Honeywell, Interfaith Community Organization,
and Grace to participate in the Third Circuit's Appellate
Mediation Program.  Judge Harold A. Ackerman, U.S.D.J., was
assigned as the mediator.

Even before Judge Ackerman scheduled the first mediation session,
Honeywell and Grace, through their outside counsel, commenced
settlement discussions.  The private settlement discussions
between Honeywell and Grace during 2003 proved unsuccessful.
Judge Ackerman subsequently scheduled a first mediation session
for early February 2004.  While no progress was made in that
session, Judge Ackerman directed the parties to schedule private
meetings prior to the next court-scheduled mediation session.
Grace and Honeywell again engaged in unsuccessful settlement
discussions during March 2004.  The following month, Judge
Ackerman scheduled an additional mediation session at which time
Grace determined that the parties were too far apart for
meaningful discussions to proceed.  Grace asked Judge Ackerman to
remove the case from mediation and permit appellate briefing to
proceed.

During the course of the appellate briefing and motion practice,
Honeywell and Grace continued to discuss settlement.  In July
2004, the parties agreed that the central components of any
settlement would include:

      (i) a transfer of the Route 440 Property to Honeywell;
     (ii) Honeywell fully indemnifying Grace; and
    (iii) Honeywell paying Grace a reasonable cash settlement.

In July and August 2004, Honeywell and Grace made progress
towards a settlement, but a final agreement was never achieved.
In mid-August 2004, the parties agreed that senior officers of
Honeywell and Grace would conduct discussions to see if the
pecuniary terms of the settlement could be agreed on.  The
proposed Honeywell Settlement is the result of those discussions.

The settlement will end Grace's involvement in any litigation
related to the Route 440 property.

Accordingly, the Debtors seek the Court's authority to enter into
the Honeywell Settlement.  The Honeywell Settlement would resolve
the highly contested lawsuit, which has been pending among the
parties for over nine years.

The specific terms of the Honeywell Settlement are:

    (a) Honeywell will pay Grace $62,500,000.

    (b) Grace will transfer title to the Route 440 Property to
        Honeywell.

    (c) Honeywell will fully indemnify Grace for all third-party
        claims relating to the Site and certain other, adjacent
        property.

    (d) Honeywell and Grace will dismiss all claims they have
        against each other in all pending litigations, including
        appeals.

    (e) Honeywell will take responsibility for completing, at its
        costs, the petroleum remediation relating to the
        underground storage tanks formerly at the portion of the
        Route 440 Property, known as "NJDEP Site 157."

    (f) Honeywell and Grace will mutually release each other from
        all claims.

    (g) The District Court will have jurisdiction over enforcement
        of the Settlement Agreement, with the prevailing party
        paying attorneys' fees and costs.

    (h) Honeywell and Grace are permitted to make limited written
        public statements regarding the settlement.

The Settlement Agreement would provide the Debtors with a net
recovery that would exceed:

    (1) the specific damages awarded by the New Jersey District
        Court -- $9,000,000, including post-judgment interest;

    (2) the award of attorney's fees and expenses -- approximately
        $7,300,000; and

    (3) the value of the Route 440 Property in clean condition --
        at trial estimated to be between $20,000,000 and
        $35,000,000.

In addition, the Settlement Agreement provides for the Debtors to
transfer the Route 440 Property to Honeywell, which would relieve
the Debtors from potential, subsequent related liabilities.  The
Settlement Agreement also provides the Debtors with a right to
indemnification, which is as broad, if not broader than the
indemnification in the New Jersey District Court's final
judgment.  Furthermore, the Settlement will remove any risk
attendant to the uncertainty of the pending appeal in the Third
Circuit and will relieve Grace of the potential for having to
expend additional amounts in litigation.

Assuming approval by the Bankruptcy Court, Grace expects to
receive net cash proceeds -- after legal expenses and transfer
taxes -- of approximately $52 million and recognize a pre-tax
gain of approximately $51 million during the fourth quarter of
2004.

Headquartered in Columbia, Maryland, W.R. Grace & Co., --
http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally.

The Debtors filed for chapter 11 protection on April 2, 2001
(Bankr. Del. Case No: 01-01139). James H.M. Sprayregen, Esq., at
Kirkland & Ellis and Laura Davis Jones, Esq., at Pachulski, Stang,
Ziehl et al. represent the Debtors in their restructuring efforts.


WEIRTON STEEL: Paying Distributions to Allowed Claim Holders
------------------------------------------------------------
On Aug. 24, 2004, the United States Bankruptcy Court for the
Northern District of West Virginia confirmed the First Amended
Plan of Liquidation dated July 9, 2004, as subsequently amended on
Aug. 23, 2004 proposed by Weirton Steel Corporation.

Pursuant to the terms of the Plan, distributions will be paid to
holders of Allowed Claims in an amount in Cash equal to the
Allowed amount of such Claims or in such other amounts as set
forth in the Plan in accordance with the terms of the Plan.  No
distributions will be paid to parties whose claims have been
disallowed by the Bankruptcy Court. As of the Effective Date of
the Plan, all stock and equity interests in the Debtors will be
canceled.

Any party wishing to obtain a copy of the Plan or the Order
confirming the Plan may do so by requesting a copy, at their own
expense, by contacting counsel to the Debtor:

         James H. Joseph, Esq.
         McGuireWoods LLP
         Dominion Tower, 23rd Floor
         625 Liberty Avenue
         Pittsburgh, Pennsylvania 1522

Headquartered in Weirton, West Virginia, Weirton Steel Corporation
was a major integrated producer of flat rolled carbon steel with
principal product lines consisting of tin mill products and sheet
products.  The company was the second largest domestic producer of
tin mill products with approximately 25% of the domestic market
share.

The Company filed for chapter 11 protection on May 19, 2003
(Bankr. N.D. W. Va. Case No. 03-01802).  Judge L. Edward Friend,
II administers the Debtors cases. Robert G. Sable, Esq., Mark E.
Freedlander, Esq., David I. Swan, Esq., James H. Joseph, Esq., at
McGuireWoods LLP represent the Debtors in their liquidation.
Weirton sold substantially all of its assets to Wilbur Ross'
International Steel Group.


WORLDCOM INC: Balks at Teleserve Systems' Claims
------------------------------------------------
Ross B. Bricker, Esq., at Jenner & Block, LLP, in Chicago,
Illinois, contends that, under New York law, which governed the
Arbitration Panel's interpretation of the Debtors' agreements with
Teleserve Systems, Inc., Teleserve has the burden to prove by a
preponderance of evidence every element of its breach of contract
claim, including the extent of its injury and the amount of its
legally recoverable damages.  To recover breach of contract
damages under New York law, Teleserve must:

   (1) demonstrate with certainty that its damages were caused by
       MCI's breach of the Agreements;

   (2) prove its alleged loss with reasonable certainty; and

   (3) demonstrate that the damages it sought were fairly within
       the contemplation of the parties at the time they executed
       the Agreements.

Record reveals that the Arbitration Panel's July 1, 2002, and
May 12, 2004, damages awards contravene New York law.  The Panel
awarded Teleserve with breach of contract damages that Teleserve
failed to prove and to which Teleserve was not entitled.

The Panel's miscalculation was identified by MCI and, critically,
was acknowledged by both Teleserve and its damages expert witness.
The Panel, however, rejected MCI's efforts to correct the Panel's
damages miscalculation.

The Debtors ask the Court to vacate the Arbitration Panel's
damages decisions.  Should the Court decide not to vacate the
Panel's damage decisions, the Debtors want the Panel's award
reduced to $1,570,645 plus interest.

The Debtors also object to Claim Nos. 9449 and 9450 filed by
Teleserve.  The Debtors argue that:

   -- Claim No. 9450 is duplicative of Claim No. 9449; and

   -- Claim Nos. 9449 and 9450 were amended or superseded by
      Claim No. 36920.

Claim No. 36920 stems from Teleserve's application for Class 6A
MCI Pre-Merger Claim Status under the Debtors' Plan.  Teleserve's
Application was erroneously assigned an independent claim, that is
Claim No. 36920.  Claim No. 36920 seeks damages of the identical
type and amount as those sought in Claim Nos. 9449 and 9450.

The Debtors also want Claim No. 36920 disallowed in its entirety,
without prejudice to Teleserve's right to pursue Class 6A
treatment.

Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.

The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts. The Bankruptcy Court confirmed WorldCom's Plan on October
31, 2003, and on April 20, 2004, the company formally emerged from
U.S. Chapter 11 protection as MCI, Inc. (Worldcom Bankruptcy News,
Issue No. 62; Bankruptcy Creditors' Service, Inc., 215/945-7000)


* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
October 15-18, 2004
   TURNAROUND MANAGEMENT ASSOCIATION
      2004 Annual Convention
         Marriott Marquis, New York City
            Contact: 312-578-6900 or http://www.turnaround.org/


November 29-30, 2004
   BEARD GROUP & RENAISSANCE AMERICAN MANAGEMENT
      The Eleventh Annual Conference on Distressed Investing
         Maximizing Profits in the Distressed Debt Market
            The Plaza Hotel - New York City
               Contact: 1-800-726-2524; 903-592-5168;
                        or dhenderson@renaissanceamerican.com

December 2-4, 2004
   AMERICAN BANKRUPTCY INSTITUTE
      Winter Leadership Conference
         Marriott's Camelback Inn, Scottsdale, Arizona
            Contact: 1-703-739-0800 or http://www.abiworld.org/

March 9-12, 2005
   TURNAROUND MANAGEMENT ASSOCIATION
      2005 Spring Conference
         JW Marriott Desert Ridge, Phoenix, Arizona
            Contact: 312-578-6900 or http://www.turnaround.org/

April 28- May 1, 2005
   AMERICAN BANKRUPTCY INSTITUTE
      Annual Spring Meeting
         J.W. Marriot, Washington, D.C.
            Contact: 1-703-739-0800 or http://www.abiworld.org/

June 2-4, 2005
   ALI-ABA
      Partnerships, LLCs, and LLPs: Uniform Acts, Taxation,
      Drafting, Securities and Bankruptcy
         Omni Hotel, San Francisco
            Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/

July 14 -17, 2005
   AMERICAN BANKRUPTCY INSTITUTE
      Ocean Edge Resort, Brewster, Massachusetts
         Contact: 1-703-739-0800 or http://www.abiworld.org/

July 27- 30, 2005
   AMERICAN BANKRUPTCY INSTITUTE
      Southeast Bankruptcy Workshop
         Kiawah Island Resort and Spa, Kiawah Island, S.C.
            Contact: 1-703-739-0800 or http://www.abiworld.org/

October 19-23, 2005
   TURNAROUND MANAGEMENT ASSOCIATION
      2005 Annual Convention
         Chicago Hilton & Towers, Chicago
            Contact: 312-578-6900 or http://www.turnaround.org/

November 2-5, 2005
   NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
      Seventy Eighth Annual Meeting
         San Antonio, Texas
            Contact: http://www.ncbj.org/

December 1-3, 2005
   AMERICAN BANKRUPTCY INSTITUTE
      Winter Leadership Conference
         Hyatt Grand Champions Resort, Indian Wells, Calif.
            Contact: 1-703-739-0800 or http://www.abiworld.org/

The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via e-mail
to conferences@bankrupt.com are encouraged.


                           *********

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.



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