TCR_Public/041115.mbx       T R O U B L E D   C O M P A N Y   R E P O R T E R

         Monday, November 15, 2004, Vol. 8, No. 250

                          Headlines

ARMSTRONG: Bear Stearns and 13 Trade Creditors Sell Claims
ATA AIRLINES: Wants to Pay Fuel & In-Plane Vendors' Claims
ATA AIRLINES: Wants to Pay Taxes, Fees & PFCs to Authorities
AUSTIN BOULEVARD: Case Summary & 20 Largest Unsecured Creditors
BLOCKBUSTER: S&P Places BB Corporate Credit Rating on CreditWatch

BLOCKBUSTER: Purchase Plan Prompts Fitch to Review Low-B Ratings
BOMBARDIER: Moody's Pares Senior Unsecured Debt Ratings to Ba2
BURLINGTON: Trust Amends Schedules of Assets & Liabilities
CASCADES: Earnings & Cash Flow Decline Cues Moody's to Cut Ratings
CATHOLIC CHURCH: Portland Tort Committee Hires Dr. Conte as Expert

CATHOLIC CHURCH: A. Butler Appointed as Tucson Unknown Claims Rep.
CATHOLIC CHURCH: Spokane to File Chapter 11 Petition by Nov. 29
CONCERT INDUSTRIES: Solicits Consents for CCAA Plan of Arrangement
CONGOLEUM CORP: Sept. 30 Balance Sheet Upside-Down by $23.1 Mil.
COUNCIL TRAVEL: Court Confirms Second Amended Joint Plan

CRESCENT REAL: Moody's Confirms B1 Rating on Senior Unsecured Debt
ENRON: Wants Court to Reduce Grupo IMSA's Claim to $17.5 Million
ENRON: Gets Court Nod on $4,000,000 Settlement with NNGC Parties
ENRON CORP: Objects to Two Silver Oak Claims Totaling $143 Million
EXIDE TECH: Awards Options & Shares to Eight Executives

FINOVA GROUP: Pension Plans Will Terminate Effective Dec. 31
FRANK'S NURSERY: Can Continue Hiring Ordinary Course Professionals
FRANK'S NURSERY: Committee Hires Otterbourg Steindler as Counsel
GLOBAL CROSSING: Court Approves Broadview Settlement Agreement
GWENADELE INC: List of 30 Largest Unsecured Creditors

HAYES LEMMERZ: Gets Approval to Establish Securitization Program
INTEGRATED ALARM: Moody's Rates Planned $125M Sr. Sec. Notes B3
INTEGRATED ELECTRICAL: Limiting Current Bond Issues
INTEGRATED ELECTRICAL: Lack of Info Cues S&P to Withdraw Ratings
INTERSTATE BAKERIES: Hires Kurtzman Carson as Claims Agent

INTERSTATE BAKERIES: Wants Court Nod to Retain Kutak as Co-Counsel
INTERWAVE COMMS: First Quarter Net Loss Widens to $6.3 Million
J.H. WHITNEY: Fitch Upgrades Ratings After Review
JETBLUE AIRWAYS: S&P Assigns BB+ Rating to Class C Certificates
KAISER ALUMINUM: Court Approves Settlement with Federal Agencies

KINETICS GROUP: Moody's Junks $17 Million Senior Secured Facility
KMART CORP: Court Allows Serrano's Claim for $500K
LAGUARDIA: Wants to Use SunTrust & Shaner Cash Collateral
LAGUARDIA: Hires Dilworth Paxson as Bankruptcy Counsel
LEAP WIRELESS: S&P Puts B- Corp. Credit Rating with Stable Outlook

LUCENT TECHNOLOGIES: McGinn & Heindel Get "Wells" Notices from SEC
MARSH SUPERMARKETS: S&P Places B+ Rating on CreditWatch Negative
MICROTEC ENTERPRISES: Files for CCAA Protection in Quebec
MICROTEC ENTERPRISES: Obtains Initial CCAA Stay Order
MURRAY INC: Wants to Employ Bass Berry as Co-Counsel

NEW LIFE HOLINESS: List of 8 Largest Unsecured Creditors
NORTHWEST ALUMINUM: Case Summary & 33 Largest Unsecured Creditors
NSG HOLDINGS: Moody's Puts B1 Rating on Senior Secured Facilities
OSHKOSK TRUCK: Moody's Withdraws Low-B Ratings
PARMALAT USA: Wants Former VP F. Ferrante to Produce Documents

PG&E NAT'L: Wants Exclusive Plan Filing Period Extended to Mar. 1
RECEIVABLES STRUCTURED: Moody's Pares 7.44% Notes' Rating to Caa2
RIGGS NATIONAL: S&P Slices Long-Term Counterparty Rating to B-
RLI: Moody's Withdraws Ba1 Sub. Debt & Pref. Securities Ratings
SECOND CHANCE: U.S. Trustee Meeting With Creditors on November 18

SENETEK PLC: Gets $1.76M Settlement from U.S. Int'l. Trading Corp.
SI CORPORATION: Moody's Withdraws Junk Ratings
SIX FLAGS: High Debt Burden Cues Moody's to Junk Unsecured Debt
SOLUTIA INC: Has Until March 11 to Remove State Court Actions
SOVEREIGN SPECIALTY: Moody's Reviewing Ratings & May Upgrade

STANDARD COMMERCIAL: Merger Plans Prompt Moody's to Review Ratings
STELCO INC: Inks New $900 Million Financing with Deutsche Bank
TRICO MARINE: Solicits Consents for Pre-Packaged Chapter 11
TRICO MARINE: Gets Second Delisting Notice from Nasdaq
US AIRWAYS: Court Bars Enforcement of Illinois Liquor Law

US AIRWAYS: Teamsters Want to Conduct Rule 2004 Examination
US AIRWAYS: Seeks to Reject Labor Pacts to Continue Restructuring
US LEC: Court Approves StarNet Asset Acquisition
VANGUARD HEALTH: Reports $110.1 Million of Net Loss in 1st Qtr.
VESTA INSURANCE: Negative Events Prompt Fitch to Junk Ratings

VLASIC: Seven Experts Testify in $250M Campbell Spin-Off Suit
W.R. GRACE: Files Chapter 11 Plan of Reorganization in Delaware
WILMOT MOUNTAIN INC: Case Summary & 20 Largest Unsecured Creditors
Z-TEL TECH: Sept. 30 Balance Sheet Upside-Down by $166.2 Million

* Alvarez & Marsal Opens New Office in Sao Paulo, Brazil

* BOND PRICING: For the week of November 15 - November 19, 2004

                          *********

ARMSTRONG: Bear Stearns and 13 Trade Creditors Sell Claims
----------------------------------------------------------
Between September 2 and October 6, 2004, the Clerk of U.S.
Bankruptcy Court for the District of Delaware recorded 23 claim
transfers in Armstrong World Industries and its debtor-affiliates'
chapter 11 cases.

Bear Stearns & Co., Inc., sold nine claims aggregating $10,425,493
to three different entities:

       Claim Amount     Transferee
       ------------     ----------
         $2,929,529     OZF Credit Opportunities Master Fund
          1,554,838     OZF Credit Opportunities Master Fund
            155,241     OZF Credit Opportunities Master Fund
          1,219,838     King Street Capital, Ltd.
          1,017,111     King Street Capital, Ltd.
            527,875     King Street Capital, Ltd.
            521,061     King Street Capital, Ltd.
          1,500,000     Loews Corp.
          1,000,000     Loews Corp.

Amroc Investments purchased 14 claims from these trade creditors:

   * Shadowlight Group,
   * Spraying Systems Company,
   * Zentz Industrial Services,
   * Steffy Cranes, Inc.,
   * Allied Industrial Products,
   * Georgia Automation, Inc.,
   * Crystal Spring,
   * McKesson Water Products Company (2 claims),
   * Triad Mechanical, Inc.,
   * Trac-Work, Inc.,
   * Airmatic, Inc.,
   * Wells Phillips 66, and
   * McGoff-Bethune, Inc.

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 and
its debtor-affiliates filed for chapter 11 protection on
December 6, 2000 (Bankr. Del. Case No. 00-04469).  Stephen
Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C.
Silberglied, Esq., at Richards, Layton & Finger, P.A., represent
the Debtors 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.  (Armstrong
Bankruptcy News, Issue No. 68; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


ATA AIRLINES: Wants to Pay Fuel & In-Plane Vendors' Claims
----------------------------------------------------------
ATA Airlines and its debtor-affiliates seek the United States
Bankruptcy Court for the Southern District of Indiana's authority
to pay certain prepetition claims of vendors critical to their
operations.

Absent the payments, there is a high risk that the vendors will
refuse to provide essential services, may be placed in a position
in which they are unable to provide services, or that may cause a
default under an existing contract that would trigger price
increases of almost 200%.

The Debtors have identified less than 15 vendors they consider to
be both critical to their businesses and at risk of refusing or
becoming unable to provide essential goods and services.  The
Debtors have kept the list confidential to prevent an "automatic"
refusal to provide services.  The Debtors have filed the list
under seal.

(1) Fuel Vendors

The maintenance of a steady supply of fuel for the aircraft is
essential to the Debtors' ability to continue in business.
Disruption to the supply or the loss of preferential pricing on
their fuel buys, especially in this environment of ever rising
fuel prices, poses serious consequences to the Debtors.

The Debtors want to pay prepetition amounts owed to certain
critical fuel vendors to avoid being forced to pay price increases
of nearly 200%.  The Debtors explain that the critical fuel vendor
may be a sole source provider at a location that is essential to
any proposed restructuring effort, or a sole source provider to
multiple locations and have already related information to the
Debtors that services will be discontinued absent payment or
reduction of the debt.

The Debtors estimate that critical fuel vendor payments would
aggregate not more than $750,000.

The Debtors also ask the Court to allow the fuel vendors to apply
any prepayments or credits made by or owed to the Debtors
occurring after the Petition Date against the prepetition
obligations.

The Debtors also seek permission to continue participating in the
Fuel Consortia in accordance with established practice and in the
ordinary course of business.  The Debtors want to ensure a steady
supply of fuel and a reliable place to store the fuel.

(2) Ground Services Relationships

Ground services are an essential element of major airlines'
operations.  Grounds services include "ramp services," like the
loading and unloading of baggage, cargo and mail and interior
cleaning of airplanes between and following flights, as well as
passenger services, like check-in and boarding.  Unlike most of
the other major domestic carriers, the Debtors do not directly
perform the ramp services at most of their scheduled service
stations.  Instead, the Debtors obtain these services from third
party ground service providers pursuant to certain ground services
contracts.  Four ground service providers handle ramp services for
the Debtors at 20 of the 28 domestic airports, including high
traffic locations, from which the Debtors provide scheduled
service.

By using the Ground Handling Servicers, the Debtors save an
aggregate of $2,000,000 annually from preferred pricing.  The
Ground Service Contracts have no fault termination clauses in
which either side may terminate upon 60 days' notice.  If the
services were terminated, however, the Debtors would not only lose
the annual savings, but also incur significant costs to replace
the services.

The Debtors estimate that the aggregate prepetition amount
outstanding under the Ground Handling Contracts is $500,000.

(3) Navigation and Communication Vendors

The Debtors have identified certain navigation and communication
vendors (i) that are both critical to the continued operation of
the airline and (i) that the Debtors' failure to pay relatively
small prepetition amounts may cause these Navigation Vendors to
fail.

The Navigation Vendors provide, among other things, pre-flight
weather data for the pilot and crew, critical navigation and other
data feeds to pilots in-flight, and maintenance of the
Debtors' online booking databases ensuring accurate passenger
booking counts.  Each of the Navigation Vendors uses its own and
the Debtors' proprietary software to perform the services.

The Navigation Vendors are small companies and the Debtors have
been told by at least one of the Navigation Vendors that it will
not be able to fund the Debtors' prepetition debt and will most
likely fail.  The aggregate amount due prepetition to the
Navigation Vendors is estimated to aggregate $31,300.

(4) In-Flight Food Providers

The Debtors want to pay certain vendors that provide in-flight
food services to critical routes, or may be a sole provider in
certain of their busiest locations, where no alternative exists.
Some of the vendors have informed the Debtors that they may refuse
to continue service because of prepetition debts owed.  The
Debtors estimate that the aggregate amount owed to the In-flight
Food Providers aggregates approximately $225,000.

                          *     *     *

Judge Lorch will consider the payment of prepetition obligations
to the Critical Vendors on a case-by-case basis.

Judge Lorch establishes these procedures by which the Debtors may
seek the Court's authority to make a prepetition payment to a
Vendor:

   (a) If a Vendor demands payment of prepetition obligations
       before providing postpetition services to the Debtors and
       the refusal to provide the postpetition services presents
       a legitimate threat to health or public safety, or, where
       the refusal to provide the services would cause a
       disruption in the Debtors' operations, the Debtors will
       immediately contact the Court and seek authority to pay
       the prepetition obligation;

   (b) The Court may, at its discretion, conduct an emergency ex
       parte hearing, to consider evidence or testimony to
       determine whether it will allow payment by the Debtors of
       the prepetition obligations to the Vendors; and

   (c) The banks are authorized and directed to honor any
       prepetition checks drawn, or to fund transfers made, for
       an Authorized Payment.

Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA
Holdings Corp. -- http://www.ata.com/-- is the nation's 10th
largest passenger carrier (based on revenue passenger miles) and
one of the nation's largest low-fare carriers.  ATA has one of the
youngest, most fuel-efficient fleets among the major carriers,
featuring the new Boeing 737-800 and 757-300 aircraft.  The
airline operates significant scheduled service from Chicago-
Midway, Hawaii, Indianapolis, New York and San Francisco to over
40 business and vacation destinations.  Stock of parent company,
ATA Holdings Corp., is traded on the Nasdaq Stock Exchange.  The
Company and its debtor-affiliates filed for chapter 11 protection
on Oct. 26, 2004 (Bankr. S.D. Ind. Case No. 04-19866, 04-19868
through 04-19874).  Terry E. Hall, Esq., at Baker & Daniels,
represents the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
$745,159,000 in total assets and $940,521,000 in total debts.
(ATA Airlines Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


ATA AIRLINES: Wants to Pay Taxes, Fees & PFCs to Authorities
------------------------------------------------------------
In the ordinary course of business, ATA Airlines and its debtor-
affiliates:

   (a) incur property taxes, fuel taxes, corporate income and
       franchise taxes, collect sales and incur use taxes,
       collect liquor taxes, and collect or incur payroll and
       employment-related taxes on behalf of various taxing
       authorities;

   (b) collect excise tax on:

          (i) the amount paid for domestic air transportation;

         (ii) each domestic segment, international departure, and
              international arrival, pursuant to Section 4261 of
              the Internal Revenue Code, charged to the Debtors'
              passengers, which if not paid may become a
              liability of the Debtors; and

        (iii) the sale of frequent flyer miles, and property
              transported by air;

   (c) are charged fees by various federal governmental agencies;
       and

   (d) collect passenger facility charges on passenger tickets
       charged by airports for general passenger facilities.

The Taxes, Transportation Taxes, Fees and PFCs are paid to
various taxing, licensing and airport authorities on a periodic
basis.

Before the Petition Date, the Debtors established special purpose
trust accounts to facilitate the payment of the Transportation
Taxes, Fees and PFCs.  As of the Petition Date, the Debtors held
in Tax Escrow the Transportation Taxes, Fees and PFCs incurred
and collected from prepetition services provided and sales to
their customers, which had not yet been paid to the Authorities.

The Debtors have collected:

    $9,003,933 in Taxes from operations;

    $8,710,807 in Transportation Taxes incurred from services
               and sales;

    $4,073,984 in Fees incurred for services and sales; and

    $4,372,752 in PFCs.

The Taxes are not held in the Tax Escrow.  However, the Debtors
believe that some, if not all, of the Authorities may cause the
Debtors to be audited and subjected to various administrative
proceedings if the Taxes are not paid immediately.

According to Terry E. Hall, Esq., at Baker & Daniels, in
Indianapolis, Indiana, audits and administrative proceedings
and the accompanying disruption in business activities would
materially and adversely affect the Debtors' reorganization
prospects and unnecessarily divert the Debtors' attention away
from the successful prosecution of the Chapter 11 cases.
Moreover, the Debtors do not have any legal or equitable interest
in the funds held in the Tax Escrow.

Consequently, the Debtors sought and obtained the United States
Bankruptcy Court for the Southern District of Indiana's authority
to pay, in their sole discretion, the Taxes, Transportation Taxes,
Fees and PFCs to the relevant Authorities in the ordinary course
of business.

Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA
Holdings Corp. -- http://www.ata.com/-- is the nation's 10th
largest passenger carrier (based on revenue passenger miles) and
one of the nation's largest low-fare carriers.  ATA has one of the
youngest, most fuel- efficient fleets among the major carriers,
featuring the new Boeing 737-800 and 757-300 aircraft.  The
airline operates significant scheduled service from Chicago-
Midway, Hawaii, Indianapolis, New York and San Francisco to over
40 business and vacation destinations.  Stock of parent company,
ATA Holdings Corp., is traded on the Nasdaq Stock Exchange.  The
Company and its debtor-affiliates filed for chapter 11 protection
on Oct. 26, 2004 (Bankr. S.D. Ind. Case No. 04-19866, 04-19868
through 04-19874).  Terry E. Hall, Esq., at Baker & Daniels,
represents the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
$745,159,000 in total assets and $940,521,000 in total debts.
(ATA Airlines Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


AUSTIN BOULEVARD: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Austin Boulevard Restaurant Corporation
        4160 Austin Boulevard
        Island Park, New York 11558

Bankruptcy Case No.: 04-87163

Type of Business:  The Company is a spare rib restaurant
                   franchisee.

Chapter 11 Petition Date: November 10, 2004

Court: Eastern District of New York (Central Islip)

Judge: Stan Bernstein

Debtor's Counsel: Marc A Pergament, Esq.
                  Weinberg Gross & Pergament LLP
                  400 Garden City Plaza
                  Garden City, New York 11530
                  Tel: (516) 877-2424

Total Assets:   $202,550

Total Debts:  $1,509,868

Debtor's 20 Largest Unsecured Creditors:

    Entity                                Claim Amount
    ------                                ------------
Commerce Bank                               $1,138,000
1100 Lake Street
Ramsey, New Jersey 07446

Nixon Peabody                                  $40,000
437 Madison Avenue
New York, New York 10022

Internal Revenue Service                       $33,634
Special Procedures 10 Metrotech Center
625 Fulton Street
Brooklyn, New York 11201

New York State Department of Tax               $29,012
Bankruptcy Unit
Special Procedures
PO Box 5300
Albanym New York 12205

Landmark Food Corporation                      $21,314
PO Box 2001
Holtsville, New York 11742

Janowski's Hamburgers, Inc.                    $11,648

L & M Poultry & Beef Corporation                $9,395

LIPA                                            $6,051

Meadowbrook Distributing Corporation            $6,041

V. Garofalo Carting, Inc.                       $5,664

Keyspan                                         $4,662

The Customer Connection, Inc.                   $4,563

Burke Supply Systems                            $3,996

Bakers of All Nations                           $3,054

Gold "N" Farms Produce                          $3,042

Creamosa Food Company, LLC                      $2,317

All Service Kitchen Equipment Corporation       $2,122

Long Island American Water                      $1,780

Terrace Dairy                                   $1,618

Quality Linen Supply                            $1,309


BLOCKBUSTER: S&P Places BB Corporate Credit Rating on CreditWatch
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings for
Blockbuster, Inc., including the 'BB' corporate credit rating, on
CreditWatch with negative implications.  The CreditWatch placement
followed Blockbuster's announcement that it has offered to
purchase Hollywood Entertainment Corp. for total consideration of
$1.05 billion ($700 million purchase price and the assumption of
$350 million of debt).  At the same time, Standard & Poor's
revised its CreditWatch status on Hollywood to developing from
negative.  The transaction is subject to shareholder and
regulatory approval.

"The CreditWatch listing on Blockbuster reflects the possibility
that ratings could be lowered based on a potential deterioration
in Blockbuster's business and financial profile post-merger," said
Standard & Poor's credit analyst Diane Shand.

The CreditWatch developing listing for Hollywood means that the
ratings could be raised, affirmed, or lowered.  It reflects the
possibility that its credit profile could improve if the merger
with Blockbuster is completed.

It is too soon to determine if the transaction with Blockbuster
will be consummated, as Blockbuster has announced no financing
plans for the transaction, it is unclear whether the U.S. Federal
Trade Commission will approve it, and Hollywood has an existing
offer from Leonard Green & Partners LP.  Also, Hollywood can
solicit other bids.  If the merger with Blockbuster does not go
through, the company may complete its merger agreement with
Leonard Green, which could deteriorate the company's credit
profile if it adds a substantial amount of debt to its
already-leveraged balance sheet.  Hollywood's ratings could be
affirmed if no transaction is consummated and its business and
credit profiles remain unchanged.

Dallas, Texas-based Blockbuster is a leading global provider of
in-home movie and game entertainment, with approximately 8,900
stores throughout the Americas, Asia, and Australia.  Blockbuster
is already the No. 1 player in the mature and fragmented
$8.2 billion U.S. video rental market, with a 39% share in 2003.
If the transaction were completed, Blockbuster would have about a
50% share of the market.  The acquisition would add more than
1,900 stores to Blockbuster's existing U.S. store base of 5,000
and substantially increase its game retail and rental business.
Wilsonville, Oregon-based Hollywood is the second-largest video
rental company in the U.S., with 12% market share in 2003.  It
operates more than 1,900 Hollywood Video stores in 47 states and
approximately 600 Game Crazy video game specialty stores.

Both Blockbuster's and Hollywood's operating performance have been
under pressure because of:

   (1) overall weakness in the video rental industry;

   (2) increased competition from discounters, big box retailers,
       and online rental services; and

   (3) the companies' own growth initiatives.

Profitability is expected to remain under pressure in the near
term, given the weakness in the overall video rental industry.


BLOCKBUSTER: Purchase Plan Prompts Fitch to Review Low-B Ratings
----------------------------------------------------------------
Fitch Ratings has placed Blockbuster, Inc.'s 'BB' senior secured
and 'B+' senior subordinated ratings on Rating Watch Negative.
Approximately $1.1 billion of debt is affected by this action.
The action follows Blockbuster's announcement that the company had
expressed an interest in purchasing Hollywood Entertainment
Corporation for a 17% premium over yesterday's closing price,
resulting in a cash offer of $1.1 billion, including $350 million
of existing debt.

The Rating Watch Negative reflects the potential for meaningfully
higher leverage for Blockbuster, even though Fitch recognizes that
the acquisition will strengthen Blockbuster's market share in the
video-rental market, allow the company to compete more effectively
with the mass merchants that are now big sellers of low-priced
DVDs, and improve the company's position with the movie studios.

Resolution of the Rating Watch will follow a review of the
financing plans for the proposed transaction and the resultant
impact on the capital structure, as well as an in-depth review of
the combined operations.


BOMBARDIER: Moody's Pares Senior Unsecured Debt Ratings to Ba2
--------------------------------------------------------------
Moody's Investors Service downgraded the senior unsecured debt
ratings of Bombardier, Inc., and its wholly owned captive finance
subsidiary, Bombardier Capital, Inc., to Ba2 from Baa3.  A SGL-2
Speculative Grade Liquidity Rating and a Senior Implied Ratings
were assigned to the company.  The rating outlook is negative.

The downgrades reflect Moody's expectation of continued weak
levels of cash flow generation relative to indebtedness as a
result of ongoing poor operating performance and financial returns
in the company's aerospace unit as well as the potential need for
further reduction of regional jet production capacity if deferrals
or cancellations of regional jet orders were to occur.  The
downgrades also consider the slow pace of recovery in the
company's rail systems unit, and the potential for demands on cash
flow due to pension funding requirements and/or a more difficult
than anticipated economic and competitive environment in the
company's primary markets.  Moody's notes that special charges,
losses and deficit free cash flow have eroded the company's equity
base and balance sheet strength over the past several years, and
that the company has responded by restructuring its core
businesses, issuing new equity and monetizing assets, including
its recreational products division and portions of the receivable
portfolio at Bombardier Capital.  The rating acknowledges the
actions the company has taken to strengthen its liquidity profile,
its current substantial balance sheet liquidity and unused lines
of credit, the continued orderly liquidation of assets at
Bombardier Capital, the return of the transportation unit to
profitability and the strength of the business jet and turboprop
segments of the company's aerospace segment.

The negative outlook considers the various risks facing each
business unit.  The segment most subject to uncertainty is
aerospace where an economic downturn, a cancellation of orders, or
the decision to proceed with the development of a new aircraft
model could represent substantial additional stress on the
company's financial profile.  While the transportation segment has
demonstrated improved performance, it will be challenged to
improve margins sufficiently to provide adequate returns on the
capital invested in the business -- including goodwill.  This
business faces reduced demand in Europe and the need to
effectively manage bidding practices to avoid the large contract
losses that precipitated previous charges.  Bombardier Capital
continues to monetize certain receivable portfolios but could see
increased loan losses in the event of an economic downturn.

Bombardier has gone through a substantial change in its primary
business model in the past three years including the sale of its
recreational products business, a rebuilding of its troubled
transportation business, a refocus of the activities of Bombardier
Capital, and a downsizing of the regional jet portion of its
aerospace business.  Overall, cash flow to debt metrics, although
improved, are not reflective of an investment grade risk profile.
Free cash flow to debt at Bombardier Inc. for the last twelve
months ended July 2004 was 7% and interest coverage before charges
was 0.9 times.

The transportation business seems to be on a slow path to recovery
after substantial writedowns.  Due to the long cycle nature of
this business, Moody's expects that recovery will be accomplished
over the next several years.  However, Moody's notes that orders
have slowed as the company restructures its contracting process.
The backlog has declined to $22.1 billion as of June 2004 from
$23.7 billion as of the end of January 2004.  As a result,
although this segment is expected to provide increased positive
cash flow to the overall enterprise, the amounts will not be
sufficient to, in and of themselves, continue to justify an
investment grade rating.

Bombardier's core aerospace businesses benefits from currently
strong demand in the business jet segment which is expected to
continue for the intermediate term.  The turboprop business is
expected to continue at its current profitable production rate. It
is in the area of commercial regional jets that the company faces,
in Moody's opinion, its largest challenges.  Production rates have
been cut to levels that should be sustainable over the near term
but the order book remains heavily dominated by airlines facing
severe financial difficulties.  Should it be necessary to further
reduce production rates, the company will, in Moody's opinion, be
required to take an additional charge and could face added cash
flow pressures.  Bombardier is contemplating the development of a
new larger aircraft type (100+ seats) that would require
substantial cash investment.  While important for Bombardier's
long-term competitiveness, such an investment could increase risk
while further reducing cash flow available for debt service.

The wind-down of the majority of the portfolios at Bombardier
Capital continues and, to date, this process has been successful.
Moody's expects that, absent a near term economic downturn, this
process should continue without undue difficulties. The financial
results at Bombardier Capital have been positively impacted by a
strong economic environment and any substantial weakening of the
overall economy could lead to increased delinquencies and reduced
asset valuations.

Moody's notes that the company's bank lines of credit, partly used
for letters of credit to support its contracting businesses,
contain a covenant limiting net debt to capital to less than 50%.
The current net debt to capital is reported to be approximately
40%.  Although it is unlikely that this covenant will be tested in
the near term, an unexpected reduction in equity from either an
asset writedown or a special charge could pose a challenge to the
company.

Current liquidity is adequate based on cash balances of
$2.2 billion and unused lines of credit of $2.2 billion as of
July 2004.  However, Moody's notes that to meet its debt
obligations Bombardier Capital is dependent on cash held at its
parent, Bombardier, Inc.  The rating downgrade will trigger
several potential calls on cash over the next six months that
could amount to as much as $431 million.  Moody's considers the
current cash balances available to the company to be sufficient to
meet such calls as well as scheduled debt maturities over the next
twelve months.  The SGL-2 rating reflects the support provided by
current balance sheet liquidity and the unused portion of the
company's line of credit offset by the cash demands created by the
ratings trigger, near term debt maturities at Bombardier, Inc. and
at Bombardier Capital.

The Ba2 ratings and the negative outlook reflect the current
uncertain environment in which the company is operating and
incorporates the potential for modest additional negative events
in the aerospace segment.  The rating also anticipates a slow but
steady reduction in uncertainty surrounding the company's core
businesses.  The rating would be negatively affected if further
charges to equity were to test the bank loan covenant and
constrain the company's liquidity profile, the company were to
sustain negative free cash flow over an extended period of time
because of any faltering in the recovery of the transportation
segment or because of any further meaningful reductions in
regional jet production, and/or the continued runoff of finance
assets at Bombardier Capital were to be impaired.

The rating or the outlook would be favorably affected by greater
stability in each of the company's primary businesses leading to a
sustained increase in profits and return on capital and a ratio of
retained cash flow to debt at levels in excess of 20%.

The ratings affected are:

   * Bombardier Inc.

     -- Issuer rating downgraded to Ba2 from Baa3
     -- Senior unsecured debt downgraded to Ba2 from Baa3
     -- Speculative Grade Liquidity Rating of SGL-2 assigned
     -- Senior Implied Rating of Ba2 assigned

   * Bombardier Capital Inc.

     -- Senior unsecured debt downgraded to Ba2 from Baa3
     -- Short term rating downgraded to Not Prime from Prime-3

All ratings at Bombardier Capital, Inc. benefit from a support
agreement provided by Bombardier Inc.

   * Bombardier Capital Funding Ltd Partnership

     -- Senior unsecured debt downgraded to Ba2 from Baa3
       (Guaranteed by Bombardier Capital Inc.)

   * Bombardier Coordination Center S.A.

     -- Short-term rating downgraded to Not Prime from Prime-3
        (Guaranteed by Bombardier Inc.)

Bombardier, Inc., headquartered in Montreal, Quebec, is a
diversified company involved primarily in the aerospace,
transportation, and financial services markets.


BURLINGTON: Trust Amends Schedules of Assets & Liabilities
----------------------------------------------------------
As of October 2004, 54 creditors hold unsecured non-priority
claims, aggregating $595,315, for accounts payable.

The BII Distribution Trust, on Oct. 28, 2004, amended Schedule
F of Burlington Industries, Inc.'s Schedules of Assets and
Liabilities to reflect the claims.

The 54 Claimants are:

             Allenberg Cotton Co.               $21,041
             American Superba, Inc.              21,596
             Apollo Chemical Corporation         77,752
             Aramark Corporation                  4,848
             Aramark Servicemaste                 1,909
             Automation International             6,998
             B & B Consultants                    4,185
             Bacova Guild, Ltd.                   5,450
             Bank of New York                     8,294
             Batson's Interiors                   2,511
             Blank Organization                   1,565
             C H Robinson Company                10,476
             Carter Traveler Co.                  7,508
             Cigna International                  8,524
             CIT Croup                           12,232
             Clayton Utz Lawyers                    898
             Commercial Steel Erection            4,078
             Copen Associates, Inc.               3,200
             Cyborg Systems, Inc.                11,250
             Daniels Electric Motor Service      12,172
             Dean Witter Reynolds                 2,672
             Design Library                       6,000
             Dominion Virginia Power             83,323
             Du-Re Textiles, Ltd.                14,891
             Electrotek, Inc.                     4,718
             Five Star Food Service               6,711
             Frankl & Thomas/Spinnerettes         3,956
             Friends You Can Count On             3,000
             Govmark Corporation                  5,110
             HK Systems                           2,629
             IBM Corp                                 0
             IBM Corporation                          0
             Levitz Furniture Corp                5,842
             Macshore Classic, Inc.              22,085
             McDermott Will & Emery               3,673
             Patent And Trademark                 3,250
             Q S T Industries, Inc.               4,600
             Quiknit Crafting, Inc.               2,571
             Radio Communications                 6,145
             Rana Razi Wolf                       3,634
             Salem Printing Company               4,519
             Sedgefield Div Omnov                 8,235
             Shelyn, Inc.                         2,950
             Simtek, Inc.                        10,324
             Southern Door Systems, Inc.          2,343
             Sulzer Textil AG                    36,214
             Swift Transportation Co              2,138
             Technimark, Inc.                     2,833
             Travelers Food Insurance Program     3,330
             USA Waste of VA                      5,506
             Wright of Thomasville, Inc.         15,596
             XL Flooring                         75,732
             Yellow Label Designs                 8,000
             Young, MS 01 King                    6,300

Headquartered in Greensboro, North Carolina, Burlington
Industries, Inc. -- http://www.burlington-ind.com/-- was one of
the world's largest and most diversified manufacturers of soft
goods for apparel and interior furnishings.  The Company filed
for chapter 11 protection in November 15, 2001 (Bankr. Del. Case
No. 01-11282).  Daniel J. DeFranceschi, Esq., at Richards, Layton
& Finger, and David G. Heiman, Esq., at Jones Day, represent the
Debtors.  WL Ross & Co. LLC purchased Burlington Industries and
then sold the Lees Carpets business to Mohawk Industries, Inc.
Combining Burlington with Cone Mills, WL Ross created
International Textile Group.  Burlington's chapter 11 Plan
confirmed on October 30, 2003, was declared effective on Nov. 10,
2003. (Burlington Bankruptcy News, Issue No. 56; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


CASCADES: Earnings & Cash Flow Decline Cues Moody's to Cut Ratings
------------------------------------------------------------------
Moody's Investors Service downgraded Cascades Inc.'s senior
implied rating to Ba2.  The ratings were also downgraded on
Cascades Inc.'s secured revolver, to Ba1 from Baa3, and on its
senior unsecured notes, to Ba3 from Ba1.

The downgrade was prompted by a significant deterioration in
Cascades' operating earnings and cash flow over the past eighteen
months, and Moody's expectations that performance, while currently
beginning to improve, due in part to recent business acquisitions,
is not likely, over the near term, to return to a level that would
support the previous ratings.  In particular, the combination of a
strong Canadian dollar and continuing high costs, particularly
those related to recycled fibers, and energy, make it unlikely
that the recent improvement in pricing will be sufficient to
return the company's debt protection measurements to levels
sufficient to support its former ratings in the near term.  The
senior unsecured rating was downgraded two notches reflecting
Moody's view that the secured revolver may, at times, continue to
be significantly utilized, reducing the pool of collateral
available to unsecured creditors.  The company has indicated that
the proceeds from currently contemplated asset sales, if executed,
will be used to reduce revolver outstandings. The rating outlook
is stable.

These ratings were downgraded.

   * Senior implied rating, to Ba2 from Ba1

   * C$500 million guaranteed senior secured revolver due 2007, to
     Ba1 from Baa3

   * US$550 million 7.25% senior unsecured notes, to Ba3 from Ba1

   * Issuer rating, to B1 from Ba1

Cascades Ba2 senior implied rating reflects high financial
leverage as well as the company's exposure to the stronger
Canadian dollar, to cyclical pricing, particularly in the
containerboard, boxboard, and paper segments, and to volatile raw
material costs, including recycled fibers, energy, chemicals and
virgin fiber.

Moody's notes that increases in recycled fibers and other input
prices have historically been passed through to consumers over a
cycle.  However, with the significantly increased purchase of
recycled containers by China, without a concurrent increase in
consumer demand in Cascades' end-markets, it is questionable
whether the historic trend of cost pass-through will continue.

The rating also considers Cascades solid market share in its
packaging and tissue products businesses and, through its 50%
interest in Norampac (Ba2), in the Canadian containerboard
segment.  The rating also considers the relatively stable earnings
and cash flow from the company's tissue business, which comprises
approximately 18% of consolidated revenue and 27% of EBITDA.
Moody's notes that approximately 29% of Cascades' consolidated
EBITDA is derived from its interest in Norampac.

The stable outlook assumes a continued improvement in operating
performance, and that the proceeds from anticipated asset sales
(the distribution and fine papers businesses) will be applied to
debt reduction.  The rating could be lowered or the outlook
changed to negative if the company suffers further erosion in its
operating earnings and cash flow, if it fails to de-lever as it
has indicated it intends to do, or if it undertakes additional
debt financed acquisitions.  The ratings could be raised if the
company's consolidated debt protection measurements return to
previous levels, when, during the 2000 to 2002 period, EBIT
/interest and debt/EBITDA averaged 3.1x and 2.9x respectively.
These ratios, on a LTM September 30, 2004, basis were 1.1x and
5.3x respectively.

Cascades' principal operations are located in Canada, the U.S. and
Europe, with consolidated sales (including the company's 50%
interest in Norampac, which is proportionately consolidated) to
Canada (45%), the U.S. (40%), and Europe/others (15%).  Cascades'
boxboard segment comprises approximately 33% of consolidated
revenue and 28% of EBITDA, its share of Norampac's containerboard
business comprises 17% and 29% of revenue and EBITDA respectively,
specialty products, 14% and 16%, tissue papers 18% and 27%, fine
papers, 10% and (4%) and its distribution business, which serves
both tissues and fine papers, 13% and 4%.

Cascades Inc. is a Quebec-based packaging and paper company
producing boxboard, containerboard, packaging products, tissue and
fine papers.  Consolidated revenues in 2003 were C$3.2 billion.


CATHOLIC CHURCH: Portland Tort Committee Hires Dr. Conte as Expert
------------------------------------------------------------------
The Official Committee of Tort Claimants in the Archdiocese of
Portland in Oregon's case wants to retain Jon Robert Conte, Ph.D.,
as expert.

Dr. Conte will provide professional services to the Portland Tort
Committee with respect to issues relating to:

   (a) the trauma suffered by an abuse victim and the manner in
       which an abuse victim recognizes and understands the
       connection between an act of abuse and its impact or
       damage; and

   (b) effective methods by which to identify and give meaningful
       notice to abuse victims.

The Archdiocese of Portland in Oregon plans to serve and publish a
notice to unknown priest abuse claimants.  The Portland Tort
Committee finds it essential to retain an expert on the effects of
sexual abuse on children to assist it in formulating a response to
Portland's action relating to notice to unknown child abuse
victims.  It is also essential that the Committee has an
opportunity to present evidence relating to the effects of sexual
abuse on children to assist the U.S. Bankruptcy Court for the
District of Oregon in developing appropriate, meaningful and
effective methods of identifying and notifying unknown priest
abuse claimants.

Dr. Conte is a Professor at the School of Social Work, University
of Washington.  He has been on the faculty of the University of
Washington since 1990.  Between 1979 and 1990, Dr. Conte was on
the faculties of the University of Illinois at Chicago and the
University of Chicago.  He teaches courses on social work
practice, child abuse, interpersonal violence, psychological
trauma and psychotherapy.  Dr. Conte has evaluated over 4,500
youth and adults complaining of psychological damages as a result
of trauma.  He is the author of approximately 50 scientific and
academic publications in peer-reviewed journals or book chapters.
He is the immediate past president of the American Professional
Society on the Abuse of children.

Dr. Conte's services will be billed to Portland's estate for
payment as an administrative expense under Sections 503(b) and
507(a)(1) of the Bankruptcy Code.  No other arrangement or
agreement exists between the Tort Committee and Dr. Conte with
respect to the payment of Dr. Conte's fees and disbursements.

Dr. Conte's current hourly rate is $300.

Dr. Conte does not represent any other entity having an adverse
interest in connection with the Chapter 11 case, or have any
connection with Portland, its creditors, any other party-in-
interest, their attorneys and accountants, the United States
Trustee or any person employed in the office of the U.S. Trustee,
or any District of Oregon bankruptcy judge.

                          *     *     *

Judge Perris approves the Portland Tort Committee's application.
Dr. Conte's compensation will be limited to $5,000.

The Roman Catholic Church of the Diocese of Tucson filed for
chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on
September 20, 2004, and delivered a plan of reorganization to the
Court on the same day.  Susan G. Boswell, Esq., and Kasey C. Nye,
Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson
Diocese.

The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts.  In its Schedules of Assets and Liabilities filed with
the Court on July 30, 2004, the Portland Archdiocese reports
$19,251,558 in assets and $373,015,566 in liabilities.  (Catholic
Church Bankruptcy News, Issue No. 8; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


CATHOLIC CHURCH: A. Butler Appointed as Tucson Unknown Claims Rep.
------------------------------------------------------------------
The Diocese of Tucson's proposed Plan of Reorganization
contemplates that a certain portion of the "pool" to be
established to compensate allowed Tort Claims will be set aside
for Future Tort Claims.  Tucson, accordingly, believes that it is
appropriate for a representative to be appointed to represent the
interest of the holders of Future Tort Claims while its bankruptcy
case proceeds.

Susan G. Boswell, Esq., at Quarles & Brady Streich Lang, LLP, in
Tucson, Arizona, asserts that the Future Tort Claimants are
parties-in-interest who may hold "claims" within the meaning of
that term under the Bankruptcy Code and applicable 9th Circuit
precedent.  Therefore, they are entitled to representation in
Tucson's Chapter 11 case.

The Future Claims Representative will:

   -- appear before the U.S. Bankruptcy Court for the District of
      Arizona on the Future Tort Claimants' behalf;

   -- file pleadings; and

   -- take other actions or perform other duties as the Court may
      authorize.

                  Nature of Future Tort Claims

Arizona law began recognizing the so-called Repressed Memory
Doctrine in 1998 in a certain Doe v. Doe opinion.  In the Doe v.
Doe case, the Arizona Supreme Court held that an alleged victim of
childhood sexual abuse could overcome the statute of limitations
and bring a tort action as an adult by proving that he or she
suffered from a psychological condition commonly referred to as
"Repressed Memory" which prevented the alleged victim from
discovering his or her injury within the statute of limitations.

In other words, Arizona courts have accepted the notion that
childhood sexual abuse can create a latent psychological injury
that is only discovered many years later.  Moreover, a person
suffering from a lack of capacity could argue that the statute of
limitations on his or her claim does not begin to run until the
person is no longer incapacitated.

Most of the Tort Claimants base their claims on the "Repressed
Memory Doctrine."  The triggers that cause an individual victim to
"recover" their memory of abuse or regain their capacity are
particular to the individual victim, and not easy to predict.

             Future Tort Claimants Possess "Claims"

The Tort Claimants' theory of liability against Tucson alleges
that the Diocese inadequately supervised or inadequately responded
to the knowledge of clergy or other workers associated with the
Diocese having sexually abused children.

Under applicable law, Tort Claimants must bring suit within two
years of the abuse unless the Tort Claimants can establish that
the abuse was too traumatic to cope with.  Therefore, the abuse
was involuntarily blocked from memory as a defense mechanism, or
the Tort Claimant was suffering from some other recognized
incapacity so that applicable law excuses him or her from being
bound by the applicable statute of limitations.

Tucson's Plan seeks to address both the Tort Claimants and Future
Tort Claimants by creating a Settlement Trust and a Litigation
Trust which will be funded with assets from the Diocese and other
sources and will provide mechanisms for adjudicating the validity
of Tort Claims and liquidating and adequately compensating those
Tort Claims.

               Appointment is Necessary and Proper

According to Ms. Boswell, the appointment of a Future Claims
Representative will enable the Court to render valid and binding
judgments against persons determined to be Future Tort Claimants
by enabling them, through their duly appointed representative, to
participate in the reorganization process.

"The appointment of a representative to protect the interest of
future claimants in Title 11 cases related to mass tort litigation
is well established," Ms. Boswell informs Judge Marlar.  "This
course of action was pioneered in the asbestos cases and
ultimately codified as to asbestos claims under Section 524(g) of
the Bankruptcy Code."

Although the Tort Claimants and Future Tort Claimants have many
interests that coincide in Tucson's case, there may be other
instances where their interests are not entirely identical or may
otherwise diverge.  Tucson's Plan seeks to balance the rights and
needs of all prepetition creditors, including Future Tort
Claimants, with the continued ministry and mission of the Diocese,
taking into account its limited assets.  Although Tucson does not
believe that the universe of Future Tort Claimants is significant,
they still should be represented.

Ms. Boswell notes that Tucson has a very limited set of resources
upon which it can draw to satisfy the present and future claims
resulting from the sexual abuse by clergy and others in the
Diocese.  The very essence of Tucson's case is to attempt to
fairly compensate all creditors holding Tort Claims, regardless of
whether those claims were scheduled for trial or whether a
putative abuse victim's memory of the abuse is repressed today.

By this motion, Tucson asks Judge Marlar to:

   (a) declare that Future Tort Claimants are parties-in-interest
       in its Chapter 11 case; and

   (b) appoint a Future Claims Representative.

               Pacific Employers Insurance Objects

Pacific Employers Insurance Company asserts that the party
representing the alleged repressed memory claimants should not be
labeled as a "Future Claims Representative."

Donald L. Gaffney, Esq., at Snell & Wilmer LLP, in Tucson,
Arizona, contends that the term "Future Claims Representative"
holds legal significance under Bankruptcy Law distinguishable from
Tucson's case.

Mr. Gaffney argues that the alleged repressed memory claimants do
no have "future claims" in that they do not have an "injury that
has not yet become manifest" at the time Tucson filed for
bankruptcy.  Rather, the alleged repressed memory claimants have
an existing claim under Section 101(5) of the Bankruptcy Code and
under the Ninth Circuit standard.

Pacific Employers Insurance suggests that the representative be
called "Unknown Claims Representative."

Additionally, Pacific Employers Insurance asks Judge Marlar to
refrain from making any findings or determinations regarding the
validity or recognition of the "Repressed Memory" theory, which
has not been adopted by the Arizona Supreme Court.

St. Paul Travelers agrees with Pacific Employers Insurance.

                          *     *     *

Judge Marlar appoints A. Bates Butler, Esq., at Fennemore Craig,
PC, in Tucson, Arizona, as the Unknown Claims Representative in
Tucson's Chapter 11 case.  Mr. Butler will participate in
Tucson's case as a Court-appointed professional and will file
requests for compensation, applications for employment, and
disclosures of disinterestedness.  Mr. Butler will be compensated
in the same manner and on the same terms as all other Court-
appointed professionals.

The Roman Catholic Church of the Diocese of Tucson filed for
chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on
September 20, 2004, and delivered a plan of reorganization to the
Court on the same day.  Susan G. Boswell, Esq., and Kasey C. Nye,
Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson
Diocese.

The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts.  In its Schedules of Assets and Liabilities filed with
the Court on July 30, 2004, the Portland Archdiocese reports
$19,251,558 in assets and $373,015,566 in liabilities.  (Catholic
Church Bankruptcy News, Issue No. 8; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


CATHOLIC CHURCH: Spokane to File Chapter 11 Petition by Nov. 29
---------------------------------------------------------------
The Catholic Diocese of Spokane in Washington state will begin
preparations immediately to file for Chapter 11 Reorganization in
Federal Bankruptcy Court on or before Nov. 29, 2004, at the
recommendation of the Bishop's Finance Council.

The announcement came after settlement talks with 28 alleged
victims of a former priest, who has admitted sexually abusing
boys, failed.

"Chapter 11 Reorganization will provide a fair, just, and
equitable mechanism for the payment of valid claims against the
Catholic Diocese of Spokane, while allowing us to maintain the
historic mission of the Catholic Church in Eastern Washington,"
Bishop William S. Skylstad, who oversees the Diocese of Spokane,
said in a press statement dated Nov. 10, 2004.  "These two goals
have been, are, and will continue to be our primary goals."

The Diocese of Spokane reportedly faces at least 19 lawsuits
involving 58 plaintiffs who have accused nine diocesan priests and
two Jesuits.

"We have identified approximately 125 potential claimants who
believe they were victimized by priests serving in Eastern
Washington.  Approximately half of those 125 have retained legal
counsel.  Those claims are in various stages of litigation.
Chapter 11 means that all of the individuals who have suffered
actual harm by the Church can be brought to the same stage,
regardless of when the claim was discovered or where it is in the
claims process. Chapter 11 protects those who have been harmed
from losing a race to the courthouse," Bishop Skylstad said.  "In
the end, Chapter 11 Reorganization will give everyone -- both the
victims and the diocese -- a sense of finality and closure."

Total damage claims, which was disclosed to be in the tens of
millions of dollars, far exceeds the net worth of the diocese.

The Diocese has maintained insurance coverage with several
different carriers over the years.  The defense of most of the
claims -- including the payment of the majority of the attorney's
fees in defending the Diocese -- have, at least to this point,
been covered by the insurance carriers.  The Diocese continues to
work with its various carriers towards the full resolution of the
claims.

Bishop Skylstad added that the chapter 11 bankruptcy proceeding
would protect the Diocese's assets that serve more than 97,000
parishioners.

"Let me reassure you that the contributions to the recent Campaign
for the Education of Seminarians, "Here I Am, Lord," are
completely safe and unaffected by this process.  Those funds are
part of the Catholic Foundation, which is a non-profit 501(c)(3)
corporation, a separate corporation from the Catholic Diocese of
Spokane.  Likewise, our employee retirement funds are separate and
safe.  Catholic Charities, too, is a non-profit 501(c)(3)
corporation, separate from the diocese," Bishop Skylstad says.

Shaun M. Cross, Esq., represents the Diocese in the Chapter 11
Reorganization.

The Roman Catholic Church of the Diocese of Tucson filed for
chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on
September 20, 2004, and delivered a plan of reorganization to the
Court on the same day.  Susan G. Boswell, Esq., and Kasey C. Nye,
Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson
Diocese.

The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts.  In its Schedules of Assets and Liabilities filed with
the Court on July 30, 2004, the Portland Archdiocese reports
$19,251,558 in assets and $373,015,566 in liabilities.


CONCERT INDUSTRIES: Solicits Consents for CCAA Plan of Arrangement
------------------------------------------------------------------
Concert Industries Ltd. (TSX:CNG) provided a CCAA update and
reported its financial results for the third quarter ended
Sept. 30, 2004.

                           CCAA Update

On Aug. 5, 2003, the Company and certain of its North American
subsidiaries obtained an order from the Quebec Superior Court of
Justice providing creditor protection under Companies' Creditors
Arrangement Act. The Company's European operations were excluded
from the CCAA proceedings. On Nov. 4, 2004, Concert Fabrication
Ltee, Concert Airlaid Ltee and Advanced Airlaid Technologies Inc.,
under the CCAA proceedings, filed a motion to order a meeting of
their creditors to consider and vote on a final plan of compromise
and arrangement. The Superior Court for the District of Montreal
on Monday, Nov. 8, 2004, ordered the Canadian operating
subsidiaries to call and hold a meeting on Dec. 10, 2004, and that
during the interim period, creditors will submit proof of their
claims against the Canadian operating subsidiaries.

Concert's Board of Director's have unanimously approved this plan
as the best alternative available to the Company, providing the
greatest value to the stakeholders and maintaining the ongoing
operations of the Canadian operating subsidiaries. The Canadian
operating subsidiaries' plan would entail a significant
restructuring of Concert's Canadian operations. The Company's
European operations will continue to be unaffected by the plan, as
they are excluded from the CCAA proceedings. The plan is part of a
comprehensive reorganization of the business and affairs of
Concert's Canadian operating subsidiaries and is designed to
enable them to be restructured and repositioned on a long-term
basis as a viable business in the development and manufacture of
specialty pulp based absorbent latex, thermal and multi-bonded
airlaid fabrics. The Canadian operating subsidiaries have
developed the plan, which they believe is in the best interest of
all stakeholders including creditors, suppliers and employees. As
previously announced, Tricap Restructuring Fund acquired the
senior secured debt, and these Canadian operating subsidiaries
have since been involved in ongoing discussions concerning the
plan and the restructuring of their operations with the support of
this senior lender. Certain other major creditors that are
affected by the plan have agreed to vote in favor of and support
the plan.

Shareholders and creditors of the legal entity Concert Industries
Ltd. will not be entitled to vote on, or participate in, the plan
of the Canadian operating subsidiaries. If the creditors of the
Canadian operating subsidiaries accept the plan of arrangement and
the resultant implementation of the plan, Concert Industries Ltd.
will no longer have ownership or control of any of its operating
companies. Shareholders and unsecured creditors of Concert
Industries Ltd. should not expect to receive any value following
this transaction. The implementation of the plan is likely to
result in the delisting of Concert's shares from the TSX.

                     Third Quarter Results

Results for the third quarter of 2004 showed a net loss of
$4.8 million compared to a net loss of $ 30.8 million for the same
period last year. For continuing operations, the Company recorded
a net loss of $4.8 million compared to a net loss of $28.8 million
in the prior year. Included in the net loss for the third quarter
of 2004 are $1.6 million of reorganizing expenses, incurred as a
result of the CCAA Proceedings and primarily consisting of
professional fees, compared to $6.9 million for the same period
last year for reorganizing expenses, refinancing expenses, write-
down of deferred costs and write-down of goodwill.

Revenues increased by $3.3 million to $46.1 million or 7.7 %
compared to the third quarter in 2003, due to higher volumes in
the European segment, partially offset by competitive pricing
pressures in the over supplied North American segment and a
weakened United States dollar.

Gross margin was down $0.4 million to $6.9 million. This decrease
in gross margin was a result of lower operating efficiencies in
the North American segment combined with a weakened United States
dollar, partially offset by increased volumes and improved
throughput in the European segment. As a percentage of revenue,
the gross margin declined to 14.9 % from 17.1 %, compared to the
third quarter of 2003.

Operating expenses, excluding amortization and interest, were
$5.1 million, down 5.6 % compared to the third quarter last year.
Cost reductions in the areas of administration, selling and
marketing reflect the effects of the Turnaround Plan that included
the relocation of the corporate office and reduction in overhead
at the Gatineau facility.

Cash Flow & Financial Position

Cash from operating activities exceeded cash used in investing
activities by $3.8 million during the quarter. As at Sept. 30,
2004, the Company had net borrowings under the DIP financing of
$7.5 million and had drawn $0.6 million under its German bank line
of credit.

                        About the Company

Concert Industries Ltd. is a company specializing in the
manufacture of cellulose fiber-based non-woven fabrics using
airlaid manufacturing technology. Concert's products have superior
absorbency capability and are key components in a wide range of
personal care consumer products, including feminine hygiene and
adult incontinence products. Other applications include pre-
moistened baby wipes, disposable medical and filtration
applications and tabletop products. The Company has manufacturing
facilities in Canada, in Gatineau and Thurso, Quebec, and in
Germany, in Falkenhagen, Falkenhagen-Prignitz.

On August 5, 2003, the Company and certain of its North American
subsidiaries obtained an order from the Quebec Superior Court of
Justice providing creditor protection under CCAA Proceedings. The
Company's European operations are excluded from the CCAA
Proceedings. PricewaterhouseCoopers Inc., was appointed by the
Court to act as the Monitor, and this order is currently in effect
until December 17, 2004. The entire text of the Court orders and
the Monitor's reports are available at http://www.concert.ca/and
at http://www.pwc.com/brs-concertgroup/or by calling
(613) 755-5981.


CONGOLEUM CORP: Sept. 30 Balance Sheet Upside-Down by $23.1 Mil.
----------------------------------------------------------------
Congoleum Corporation (AMEX:CGM) reported its financial results
for the third quarter ended Sept. 30, 2004.

Sales for the three months ended September 30, 2004, were
$58.9 million, compared with sales of $61.1 million reported in
the third quarter of 2003, a decrease of 3.6%. Net income for the
quarter ended September 30, 2004, was $1.2 million compared with
net income of $1.3 million in the third quarter of 2003. Results
in the third quarter of 2003 included $1.6 million from the
recognition of tax benefit realized as a result of net operating
loss carry back claims received.

Sales for the nine months ended September 30, 2004, were
$173.8 million, compared with sales of $169.7 million reported in
the first nine months of 2003, an increase of 2.4%. Net income for
the nine months ended September 30, 2004, was $2.1 million, versus
a net loss of $3.3 million in the first nine months of 2003.

Roger S. Marcus, Chairman of the Board, commented "Third quarter
results showed solid margin improvement despite the most severe
inflationary pressure on resins and other raw materials in three
decades. The margin improvement was achieved through a more
profitable sales mix and the cost reduction steps we have taken
over the past year. While volume of some less profitable products
declined, pipeline sales of our new high end sheet product
Xclusive more than compensated for the decline. The margin
improvement is all the more impressive given the raw material
situation. Despite the increases in material costs, as well as
greater expenses for energy and freight, operating income has
improved significantly for the quarter and year to date over year
ago levels. Had the raw material cost environment been more
stable, we would have had an excellent quarter."

Mr. Marcus continued, "While we do not expect any improvement in
the raw material situation near term, there are a number of
positive factors as we look ahead. We have additional price
increases in process that will offset some, but not all, of the
increased raw material costs. We anticipate continued sales and
margin benefits from products introduced this year, as well as new
products and programs we plan for early 2005. Finally, we remain
intensely focused on improving manufacturing efficiency and
reducing costs. These steps should all help our future
performance."

Mr. Marcus concluded, "We are also encouraged that our
reorganization is moving forward. As we announced earlier this
week, we have concluded negotiations with representatives of the
Asbestos Creditors' Committee, the Future Claimants
representative, and other asbestos claimant representatives and
filed a modified plan of reorganization and related documents with
the Bankruptcy Court. While the modified plan will require a re-
solicitation process, we are confident that this modified plan
will have widespread support. Our goal is to have our plan
confirmed during the second quarter of 2005."

                        About the Company

Headquartered in Mercerville, New Jersey, Congoleum Corporation --
http://www.congoluem.com/-- manufactures and sells resilient
sheet and tile floor covering products with a wide variety of
product features, designs and colors. The Company filed for
chapter 11 protection on December 31, 2003 (Bankr. N.J. Case No.
03-51524). Domenic Pacitti, Esq., at Saul Ewing, LLP, represents
the Debtors in their restructuring efforts. When the Company
filed for protection from its creditors, it listed $187,126,000 in
total assets and $205,940,000 in total debts.

At Sept. 30, 2004, Congoleum Corp.'s balance sheet showed a
$23,148,000 stockholders' deficit, compared to a $25,777,000
deficit at Dec. 31, 2003.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 9, 2004,
Congoleum Corporation has filed a modified plan of reorganization
and related documents with the Bankruptcy Court. The modifications
reflect negotiations with representatives of the Asbestos
Creditors' Committee, the Future Claimants representative and
other asbestos claimant representatives. A hearing to consider
approval of the disclosure statement and plan voting procedures
has been scheduled for Dec. 9, 2004.


COUNCIL TRAVEL: Court Confirms Second Amended Joint Plan
--------------------------------------------------------
The Honorable Robert E. Gerber of the U.S. Bankruptcy Court for
the Southern District of New York confirmed Council Travel
Services, Inc., and its debtor-affiliates' Second Amended Joint
Plan of Liquidation filed in May.

Judge Gerber concluded that the Debtors' Plan complies with the
applicable provisions of the Bankruptcy Code and Rule 3016 of the
Federal Rules of Bankruptcy Procedure.

The Plan provides, among other things:

     * for the full payment on the Effective Date of priority
       and miscellaneous claims;

     * that general unsecured creditors will receive the pro rata
       share of their claims and are expected to recover from 5%
       to 15% of their claims;

     * that convenience claim holders get an amount equal to 40%
       of their allowed claims; and

     * for the cancellation of all equity interests.

Headquartered in Manhattan, New York, Council Travel Services,
Inc., provides student and budget travel packages. The Company
and its debtor-affiliates filed for chapter 11 protection on
February 5, 2002 (Bankr. S.D.N.Y. Case No. 02-10509). Schuyler
Glenn Carroll, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky
LLP, represents the Debtors in their restructuring efforts. When
the Debtor filed for protection from its creditors, it listed an
estimated $10 million in assets and $21 in debts.


CRESCENT REAL: Moody's Confirms B1 Rating on Senior Unsecured Debt
------------------------------------------------------------------
Moody's Investors Service confirmed the B1 rating of Crescent Real
Estate Equities Limited Partnership's senior unsecured debt,
concluding a review.

The rating outlook is negative, reflecting Moody's expectation
that recently announced joint ventures will be closed successfully
and that the company uses the proceeds to pay down and defease
$710 million in debt.  It also reflects the continuing absence of
any cushion in Crescent's debt covenants for some time, and that
the performance of the REITs' core office portfolio will
deteriorate further.  Moody's is also concerned with the uncertain
re-deployment of proceeds from slated transactions, near-term debt
maturities, and a prolonged dividend shortfall, which the REIT has
struggled to address.  The rating also takes into account the high
quality of Crescent's core office portfolio, its diverse tenant
base and progress in disposition of non-core residential and hotel
assets.  These positive factors are offset by high geographic
concentration of the portfolio in Texas, higher volatility
associated with some of the REIT's businesses, weak profit
performance, and a transitioning strategy aimed at fund management
rather than direct property ownership.

Crescent maintains a high quality Class-A core office portfolio
with a laddered lease schedule and a diverse tenant mix, in which
no single tenant accounts for more than 5% of annualized revenue.
The REIT will also be supported by sufficient liquidity
(approximately $50 million in cash and a $300 million revolver)
and has targeted secured debt retirement resulting from a recently
announced large joint venture.  In addition, Crescent appears to
have achieved meaningful advancement towards divesting AmeriCold,
its cold-storage logistics joint venture, and also has indicated
that it hopes to simplify the Canyon Ranch structure, whereby it
would receive additional cash.

Moody's noted that these positives were offset by unabated and
material deterioration in operating profit performance, producing
a virtually nonexistent cushion in bond and, especially, bank line
covenants.  Also worrisome is the significant management attention
required for the complex joint ventures, and the complicated
corporate hierarchy, which structurally subordinates the operating
partnership's notes to the liabilities of subsidiaries, which hold
most of the assets.  Moody's also views cautiously the earnings
volatility associated with the REIT's residential development and
resort/lodging businesses.  Within the core office portfolio,
geographic concentrations in two underperforming markets, Houston
and Dallas, represent weaknesses.

Moody's cited a number of potential reasons for a downgrade,
including any covenant breach or continued operating weakness in
Crescent's core portfolio.  A negative rating action would also be
taken if further deterioration of the key credit metrics (total
and secured leverage, fixed charge coverage) moved beyond current
levels.  Further, Moody's would view negatively any further new
investments outside of the core office portfolio.  A failure to
divest the AmeriCold business within the next 12 -- 18 months, any
additional equity contributions to this segment, stock repurchases
beyond $100 million or failure to refinance the revolver would
also result in a downgrade.

To have its rating removed from negative outlook, Moody's
determined that Crescent would need to demonstrate a sustained
commitment to re-focusing on the core office portfolio, as
evidenced by the achievement of the target asset allocation to the
office portfolio of 85% and the divestiture of non-core businesses
to a combined 15% of assets.  Improvements in portfolio occupancy
to above 90% and stabilization at that level would also be viewed
positively.  Additionally, Moody's would like to see the both GLA
and base rent attributable to Houston and Dallas closer to 25%,
each.  Crescent could also return to a stable outlook with these
improvements in its credit profile:

   (1) reduced overall leverage to 50% of gross assets,
   (2) secured debt to 30% of gross assets, and
   (3) increased fixed charge coverage to 1.8X.

An expansion of the unencumbered pool to cover unsecured debt by
at least 2.0X with higher quality assets and sustained reduction
in dividend payout ratio to 90% of AFFO would also be positives.

These ratings were placed under negative outlooks:

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

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

Crescent Real Estate Equities Company (NYSE:CEI) is an UPREIT
based in Fort Worth, Texas, USA, that primarily invests in Class A
office properties in the Southwest, and also has holdings in
resorts, spas and upscale residential developments.  CEI's
holdings incorporated 75 owned and managed office properties
totaling 29.9 million square feet as of September 30, 2004, and
its total assets were $4.6 billion.  As of third quarter 2004,
office assets comprised 67% of gross book value of real estate
assets, followed by residential development (16%), resorts/hotels
(12%) and temperature controlled logistics (5%).  The company had
total market capitalization including debt of $5.1 billion.


ENRON: Wants Court to Reduce Grupo IMSA's Claim to $17.5 Million
----------------------------------------------------------------
Edward A. Smith, Esq., at Cadwalader, Wickersham & Taft LLP, in
New York, tells the U.S. Bankruptcy Court for the Southern
District of New York that on October 3, 2002, Grupo IMSA, S.A. de
C.V. filed Claim No. 6101 against Enron North America Corp. for
$28,353,334.

Mr. Smith relates that the IMSA Claim arises out of natural gas
commodities transactions between ENA and IMSA, which are governed
by an ISDA Master Agreement, dated as of February 22, 2001.

The Debtors have reviewed the IMSA Claim and their records, and
have found that the IMSA Claim cannot be substantiated because of
IMSA's incorrect Early Termination Payment calculations and
insufficient support for the amount claimed.

Pursuant to the ISDA Master Agreement, Mr. Smith says, the
parties entered into financial transactions involving the
exchange of "fixed-for-floating" payments referenced to the price
of natural gas.  In addition, the parties agreed under the Master
Agreement that if a party's conduct causes an Event of Default,
the non-defaulting party may designate an Early Termination Date,
whereby all outstanding Transactions become terminated, and one
party would have to pay the other an Early Termination Payment.
Additionally, under the terms of the ISDA Master Agreement, if
certain other specified events occurred, an Automatic Early
Termination would occur and the Early Termination Date would
automatically be determined as of the date of that occurrence.
Pursuant to the terms of the ISDA Master Agreement, the agreement
automatically terminated on December 2, 2001.

The Early Termination Payment is largely a function of movements
in the market price of natural gas during the term of an
underlying Transaction.

With respect to the transactions that are the subject of the IMSA
Claim, if at the Early Termination Date, the Floating Price curve
was lower than the Fixed Price curve, then IMSA would owe ENA the
Early Termination Payment.  On the other hand, if the Floating
Price curve was higher, then ENA would owe IMSA the Early
Termination Payment.  The ISDA Master Agreement provides that the
Early Termination Payment must be paid to whomever it is owed,
regardless of which party is the Defaulting Party.  This
provision is commonly referred to as a "full two-way payment"
clause, Mr. Smith says.

The Debtors have determined that the termination payment due
pursuant to the ISDA Master Agreement and related Confirmations
is $17,500,000, not $28,353,334 as alleged in the IMSA Claim.

Additionally, pursuant to Section 502(B)(ii) of the Bankruptcy
Code, once a bankruptcy is filed, interest no longer accrues,
despite any provisions in the Master Agreement or other
provisions of state law.  The Debtors, therefore, object to the
IMSA Claim, to the extent that the proof of claim is based in
part on the improper inclusion of interest charges arising after
the Petition Date.

The Debtors ask Judge Gonzalez to reduce and allow the IMSA Claim
for $17,500,000.

Headquartered in Houston, Texas, Enron Corporation is in the midst
of restructuring various businesses for distribution as ongoing
companies to its creditors and liquidating its remaining
operations.  Before the company agreed to be acquired, controversy
over accounting procedures had caused Enron's stock price and
credit rating to drop sharply.  The Company filed for chapter 11
protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-
16033).  Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed.
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts. (Enron Bankruptcy News, Issue No. 128;
Bankruptcy Creditors' Service, Inc., 15/945-7000)


ENRON: Gets Court Nod on $4,000,000 Settlement with NNGC Parties
----------------------------------------------------------------
Debtor Enron Operations Services, LLC, sought and obtained the
U.S. Bankruptcy Court for the Southern District of New York's
approval to enter into a settlement agreement with Northern
Natural Gas Company, MidAmerican Energy Holdings Company, and NNGC
Acquisition.

The NNGC Parties are companies that engage in the production of
energy from diversified fuel sources including geothermal,
natural gas, hydroelectric, nuclear, and coal.  They also supply
and distribute energy in the United States and United Kingdom
consumer markets.

In connection with the divestiture of Northern Natural Gas, the
NNGC Parties entered into a Transition Services Agreement, under
which EOS was to provide certain services to the NNGC Parties.
Upon the cessation of the services under the Transition
Agreement, EOS was to issue a final invoice to the NNGC Parties.

In March 2003, EOS issued to Northern Natural Gas a Final Invoice
for $8,896,085.  In addition to charges for routine services, the
Final Invoice included a $6,799,977 charge as a result of an
allocation by Enron Corp. under the Court-ordered methodology and
a $913,986 charge related to cash balance plan obligations under
the Transition Agreement.  Northern Natural Gas disputed the
Final Invoice in its entirety.

EOS and the NNGC Parties conducted discussions to resolve the
dispute.  Subsequently, EOS issued several revised invoices.  The
most recent invoice issued to the NNGC Parties was for
$5,876,647.

Individually, the NNGC Parties filed contingent and unliquidated
claims related to the Transition Services Agreement:

    NNGC Party                             Claim No.
    ----------                             ---------
    Northern Natural Gas                     23688
    NNGC Acquisition                         23979
    MEHC each filed a proof                  23980

To resolve all claims arising in connection with the Transition
Services Agreement, including issues relating to the Final
Invoice, as revised, EOS and the NNGC Parties entered into the
Settlement Agreement.

The salient terms of the Settlement Agreement are:

    (a) As consideration and release for all claims and the
        settlement of the Final Invoice, the NNGC Parties will pay
        EOS $4,000,000;

    (b) All claims filed by the NNGC Parties arising from or
        related to the Transition Services Agreement will be
        deemed irrevocably withdrawn with prejudice and, to the
        extent applicable, expunged and disallowed in their
        entirety; and

    (c) EOS and the NNGC Parties will release each other from any
        and all claims, obligations, actions, causes of action,
        and liabilities which arise from or relate in any way to
        the Final Invoice.

Headquartered in Houston, Texas, Enron Corporation is in the midst
of restructuring various businesses for distribution as ongoing
companies to its creditors and liquidating its remaining
operations.  Before the company agreed to be acquired, controversy
over accounting procedures had caused Enron's stock price and
credit rating to drop sharply.  The Company filed for chapter 11
protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-
16033).  Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed.
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts. (Enron Bankruptcy News, Issue No. 128;
Bankruptcy Creditors' Service, Inc., 15/945-7000)


ENRON CORP: Objects to Two Silver Oak Claims Totaling $143 Million
------------------------------------------------------------------
On Oct. 11, 2002, Silver Oak Capital, LLC, acting as agent for
AG Capital Recovery Partners III, LP -- successor-in-interest to
the claims of ONEOK Energy Marketing and Trading Company, L.P. --
filed multiple proofs of claim in Enron Corporation and its
debtor-affiliates' chapter 11 cases.

Claim No. 11322, filed as an unsecured claim for not less than
$73,793,751 against Enron North America Corp., is based on:

    (a) that certain ISDA Master Agreement dated April 9, 1996,
        between ENA f/k/a Enron Capital & Trade Resources Corp.
        and ONEOK f/k/a ONEOK Gas Marketing Company; and

    (b) that certain GISB Base Contract for Short-Term Sale and
        Purchase of Natural Gas dated December 1, 1999, as amended
        on July 1, 2001, between ENA and ONEOK f/k/a KN Marketing,
        LP.

On June 25, 2004, Silver Oak, pursuant to Rule 3001(e)(2) of the
Federal Rules of Bankruptcy Procedure, transferred to Bear
Stearns Investment Products, Inc., all of its right, title and
interest in and to Claim No. 11322.  Bear Stearns, by Notices of
Partial Transfer of Claim Pursuant to FRBP Rule 3001(e)(2),
transferred interests in Claim No. 11322 to:

    (1) Quantum Partners LDC -- $15,000,000
    (2) King Street Acquisition Company, L.L.C. -- $36,793,751

Claim No. 11317, filed as an unsecured claim for not less than
$70,000,000 against Enron, is based on:

    (a) that certain Guaranty dated November 8, 2000, and amended
        on November 8, 2000, and June 22, 2001, issued by Enron in
        ONEOK's favor in an amount that ultimately was not to
        exceed $20,000,000; and

    (b) that certain Guaranty dated April 9, 1996, and as amended
        on April 17, 2000, May 10, 2000, October 26, 2001, and
        October 30, 2001, issued by Enron in ONEOK's favor in an
        amount that ultimately was not to exceed $50,000,000,

and covering all obligations of ENA under one or more swap,
option or other financially-settled derivative transactions,
which transactions were to be evidenced by one or more swap
agreements, confirmations and or master agreements including
without limitation the ISDA.

On April 20, 2004, Silver Oak, pursuant to Rule 3001(e)(2),
transferred $25,000,000 of Claim No. 11317 to ONEOK.  On June 25,
2004, Silver Oak, pursuant to Rule 3001(e)(2), transferred
$45,000,000 of Claim No. 11317 to Bear Stearns.  Bear Stearns, by
Notices of Partial Transfer of Claim Pursuant to FRBP Rule
3001(e)(2), has since transferred interests in Claim No. 11317
to:

    (1) Quantum Partners LDC -- $9,147,116
    (2) King Street Acquisition Company, L.L.C. -- $22,437,114

On November 28, 2003, the Debtors filed an avoidance action under
Section 548 of the Bankruptcy Code with respect to Claim No.
11317.  The Silver Oak Adversary Proceeding seeks to avoid
Enron's obligations under the Guaranty.  In the event that the
U.S. Bankruptcy Court for the Southern District of New York
determines that the Guaranty is valid and enforceable against
Enron, Claim No. 11317 is nonetheless overstated and should be
reduced.

The Debtors have reviewed the Silver Oak Claims and their books
and records, and have concluded that:

    (a) the Silver Oak Claims are significantly overstated by at
        least $15 million, and

    (b) Silver Oak has miscalculated the amounts due, if any,
        under the applicable transactional documents.

According to the Debtors' books and records, Claim No. 11322
should be reduced and allowed for $55,867,734.  With regard to
Claim No. 11317, if Enron prevails in the Silver Oak Adversary
Proceeding, Claim No. 11317 should be disallowed; otherwise,
Claim No. 11317 should be disallowed as filed, and allowed as a
general unsecured claim for $53,132,470.

Headquartered in Houston, Texas, Enron Corporation is in the midst
of restructuring various businesses for distribution as ongoing
companies to its creditors and liquidating its remaining
operations.  Before the company agreed to be acquired, controversy
over accounting procedures had caused Enron's stock price and
credit rating to drop sharply.  The Company filed for chapter 11
protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-
16033).  Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed.
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts. (Enron Bankruptcy News, Issue No. 128;
Bankruptcy Creditors' Service, Inc., 15/945-7000)


EXIDE TECH: Awards Options & Shares to Eight Executives
-------------------------------------------------------
On Oct. 13, 2004, pursuant to its 2004 Stock Incentive Plan,
Exide Technologies awarded options and shares of restricted stock
to eight executives:

Name            Position          No. of Options   No. of Shares
----            --------          --------------   -------------
J. Timothy      Executive              50,000          10,000
Gargaro         Vice President
                and Chief
                Financial Officer

Ian J. Harvie   Vice President         28,000           3,500
                and Controller

Mitchell        President,             20,000           3,000
Bregman         Industrial
                Energy Americas

Neil Bright     President,             12,500           3,000
                Industrial Energy

Randolph Siuda  Vice President &       20,000           3,000
                General Manager --
                Transportation
                Americas

David Jackson   Vice President &       20,000           3,000
                General Manager --
                Transportation
                Europe

Stuart          Executive              30,000           7,000
Kupinsky        Vice President,
                General Counsel
                and Secretary

Janice Jones    Executive              15,000           3,000
                Vice President --
                Human Resources

Mr. Gargaro, in a regulatory filing with the Securities and
Exchange Commission, discloses that the options are subject to a
three-year vesting schedule:

    -- 33.3% on October 13, 2005,
    -- 33.3% on October 13, 2006, and
    -- 33.4% on October 13, 2007.

Shares of restricted stock are subject to a five-year vesting
schedule:

    -- 20% on October 13, 2005,
    -- 20% on October 13, 2006,
    -- 20% on October 13, 2007,
    -- 20% on October 13, 2008, and
    -- 20% on October 13, 2009.

A full-text copy of Exide's 2004 Stock Incentive Plan is
available for free at:


http://sec.gov/Archives/edgar/data/813781/000095014404009817/g91322exv10w1.txt

According to Mr. Gargaro, the vesting schedules are subject to
certain change in control provisions, including full vesting if
an employee is terminated within 12 months of a change in
control.  The per share exercise price for the options was
calculated based on a 10-day trailing average closing price of
Exide Technologies common stock as listed on the NASDAQ National
Market immediately prior to the grant date.

Furthermore, pursuant to the Stock Incentive Plan and as part of
their annual compensation, each non-employee member of Exide's
Board of Directors will receive 2,112 options valued at $20,000
and 1,264 shares of restricted stock valued at $20,000.  Awards
are subject to a one-year vesting period and will vest on
October 13, 2005.  If a Class I director is not re-elected at the
Exide's annual meeting of shareholders in August 2005, that
director's options and restricted stock will fully vest as of the
date of the annual meeting.  The per share exercise price for the
options and the restricted stock price were calculated based on a
10-day trailing average closing price of the Exide common stock
as listed on the NASDAQ National Market immediately prior to the
grant date.

Mr. Gargaro notes that all awards will be governed by the terms
of the Stock Incentive Plan and applicable award agreements.  The
SIP and all awards granted are subject to shareholder approval at
the Exide's annual meeting scheduled for August 2005.

Headquartered in Princeton, New Jersey, Exide Technologies is the
worldwide leading manufacturer and distributor of lead acid
batteries and other related electrical energy storage products.
The Company 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.  Exide's confirmed chapter 11 Plan
took effect on May 5, 2004.  On April 14, 2002, the Debtors listed
$2,073,238,000 in assets and $2,524,448,000 in debts. (Exide
Bankruptcy News, Issue No. 55; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


FINOVA GROUP: Pension Plans Will Terminate Effective Dec. 31
------------------------------------------------------------
The FINOVA Group sponsors a trusteed, non-contributory pension
plan that covers substantially all of the company's employees.
Benefits are based primarily on final average salary and years of
service.  FINOVA's funding policy for the pension plan is to make
at least the minimum annual contribution required by applicable
regulations.

During the second quarter of 2004, FINOVA's Board of Directors
approved the termination of the pension plan effective
December 31, 2004.  Hence, no pension benefits will accrue beyond
December 31, 2004, and participant benefits under the plan will
be fully vested and not forfeitable as of that date.

The Board also approved discretionary contributions, which are
expected to be sufficient to fully fund and enable the plan to
pay all of its obligations to each participant.

"[FINOVA] has no minimum funding requirement for its pension plan
in 2004; however, [FINOVA] continues to evaluate the current
funded status of the plan, its investment strategy and the
pending termination of the plan," Richard A. Ross, FINOVA's
Senior Vice-President and Chief Financial Officer and Treasurer,
relates in a regulatory filing with the Securities and Exchange
Commission.

According to Mr. Ross, FINOVA made a $3.0 million discretionary
contribution during July 2004 to improve the funded status of the
plan.

FINOVA anticipates making further discretionary contributions in
2004 or 2005.

Headquartered in Scottsdale, Arizona, The Finova Group, Inc.,
provides commercial financing to small and midsized businesses;
other services include factoring, accounts receivable management,
and equipment leasing. The firm has three segments: Commercial
Finance, Specialty Finance, and Capital Markets. FINOVA targets
such markets as transportation, wholesaling, communication, health
care, and manufacturing. Loan write-offs had put the firm on shaky
ground. The Company and its debtor-affiliates and subsidiaries
filed for Chapter 11 protection on March 7, 2001 (Bankr. Del. Case
No. 01-00697). Daniel J. DeFranceschi, Esq., at Richards, Layton &
Finger, P.A., represents the Debtors. FINOVA has since emerged
from Chapter 11 bankruptcy. Financial giants Berkshire Hathaway
and Leucadia National Corporation (together doing business as
Berkadia) own FINOVA through the almost $6 billion lent to the
commercial finance company. (Finova Bankruptcy News, Issue No. 52;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


FRANK'S NURSERY: Can Continue Hiring Ordinary Course Professionals
------------------------------------------------------------------
The Honorable Prudence Carter Beatty of the U.S. Bankruptcy Court
for the Southern District of New York gave Frank's Nursery &
Crafts, Inc., permission to continue to retain, employ and pay
professionals it turns to in the ordinary course of its business
without bringing formal employment applications to the Court.

In the Debtor's day-to-day operations of its business, it
regularly calls upon certain professionals, including auditors,
accountants, attorneys and tax advisors, to assist the Debtor in a
variety of matters affecting its day-to-day business operations.

Due to the number and geographic diversity of the Ordinary Course
Professionals that the Debtor wishes to retain, it would be
unwieldy and burdensome on both the Debtor and the Court to
request each Ordinary Course Professional to apply separately for
approval of its employment and compensation.  The Debtor explains
that the uninterrupted services of its Ordinary Course
Professionals are vital to its ability to reorganize.

The Debtor assures the Court that:

    a) no Ordinary Course Professional will be paid in excess of
       $20,000 per month, and would not exceed $100,000 per month
       for all the Ordinary Course Professionals to be retained by
       the Debtor;

    b) in the event that an Ordinary Course Professional's fees
       and expenses exceeds $20,000 in any given month, that
       Professional would be required to apply for formal approval
       of compensation to the Court;

    c) each Ordinary Course Professional would file an Affidavit
       with the Court, and serve to the U.S. Trustee and the
       Debtor's counsel, that contains:

         (i) information on the nature of the Professional's
             services,

        (ii) the Professional's billing procedures and practices,
             and

       (iii) a disclosure whether the Professional holds any
             interest adverse to the Debtor or its estate; and

    d) the Ordinary Course Professionals will not be involved in
       the administration of the Debtor's Chapter 11 case.

Headquartered in Troy, Michigan, Frank's Nursery & Crafts, Inc.
-- http://www.franks.com/-- specializes in nursery products, lawn
and garden hardlines, floral decor, custom bows & floral
arrangements, and Christmas merchandise, and is running GOB sales
at all of its locations at this time.

Frank's Nursery and its parent company, FNC Holdings, Inc., each
filed a voluntary chapter 11 petition in the U.S. Bankruptcy Court
for the District of Maryland on February 19, 2001. The companies
emerged under a confirmed chapter 11 plan in May 2002. Frank's
Nursery filed another chapter 11 petition on September 8, 2004
(Bankr. S.D.N.Y. Case No. 04-15826). In the Company's second
bankruptcy filing, it listed $123,829,000 in total assets and
$140,460,000 in total debts.


FRANK'S NURSERY: Committee Hires Otterbourg Steindler as Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave the Official Committee of Unsecured Creditors of Frank's
Nursery & Crafts, Inc., permission to employ Otterbourg,
Steindler, Houston & Rosen, P.C., as its counsel.

Otterbourg Steindler will:

    a) assist and advise the Committee in its consultation with
       the Debtor relative to the administration of the Debtor's
       bankruptcy case;

    b) attend meetings and negotiate with the representatives of
       the Debtor;

    c) assist and advise the Committee in its examination and
       analysis of the conduct of the Debtors' affairs;

    d) assist the Committee in the review, analysis and
       negotiation of any plan of liquidation that may be filed
       and assist the Committee in the review, analysis and
       negotiation of the disclosure statement accompanying any
       plan of liquidation;

    e) assist the Committee in the review, analysis and
       negotiation of any financing agreements;

    f) take all necessary action to protect and preserve the
       interests of the Committee, including:

         (i) the prosecution of actions on its behalf,

        (ii) negotiations concerning all litigation in which the
             Debtor is involved, and

       (iii) if appropriate, review and analysis of claims filed
             against the Debtor's estate;

    g) prepare on the Committee's behalf all necessary motions,
       applications, answers, orders, reports and papers in
       support of positions taken by the Committee;

    h) protect the interests of the Committee by appearing before
       the Bankruptcy Court, the Appellate Courts, and the United
       States Trustee; and

    i) perform all other necessary legal services for the
       Committee in the Debtor's chapter 11 case.

Glenn B. Rice, Esq., a member of Otterbourg Steindler, is the lead
attorney for the Committee.  Mr. Rice discloses that the Firm will
charge the Debtor's estate for its fees and expenses.

Mr. Rice reports Otterbourg Steindler professionals bill:

    Designation                 Hourly Rate
    -----------                 -----------
    Partner/Counsel             $445 - 675
    Associate                    225 - 485
    Paralegal/Legal Assistant    175

Otterbourg Steindler does not represent any interest adverse to
the Committee, the Debtor or its estate.

Headquartered in Troy, Michigan, Frank's Nursery & Crafts, Inc.
-- http://www.franks.com/-- specializes in nursery products, lawn
and garden hardlines, floral decor, custom bows & floral
arrangements, and Christmas merchandise, and is running GOB sales
at all of its locations at this time.

Frank's Nursery and its parent company, FNC Holdings, Inc., each
filed a voluntary chapter 11 petition in the U.S. Bankruptcy Court
for the District of Maryland on February 19, 2001. The companies
emerged under a confirmed chapter 11 plan in May 2002. Frank's
Nursery filed another chapter 11 petition on September 8, 2004
(Bankr. S.D.N.Y. Case No. 04-15826). In the company's second
bankruptcy filing, it listed $123,829,000 in total assets and
$140,460,000 in total debts.


GLOBAL CROSSING: Court Approves 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.

                          *     *     *

Judge Gerber approves the stipulation.

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


GWENADELE INC: List of 30 Largest Unsecured Creditors
-----------------------------------------------------
Gwenadele, Inc., released a list of its 30 Largest Unsecured
Creditors:

    Entity                                Claim Amount
    ------                                ------------
Showlodge Franchise                           $287,000
c/o Paul Mirabile, Esq.
201 Saint Charles Avenue, Suite 3100
New Orleans, Louisiana 70170

McQuay International                           $19,136
1056 Solutions Center
Chicago, Illinois 60677

Entergy                                        $10,909
[Address Not Provided]

Days Inn                                        $8,387
9919 Gwenadele Avenue
Baton Rouge, Louisiana 70816

Parish & City Treasurer                         $5,218

Louisiana Department of Revenue & Tax           $4,171

Bell South                                      $1,715

The Home Depot Supply                           $1,700

Antex International Linen                       $1,658

Cox Communications                              $1,140

Louisiana Department of Revenue & Tax           $1,010

Office of Reg. Services                           $833

World Cinema                                      $781

Economical                                        $714

Lofton Security Service                           $714

LEMIC Insurance                                   $578

Waste Management                                  $450

Sysco                                             $333

AT&T                                              $292

Premier Source                                    $234

Community Coffee Company                          $216

Annette C. Crawford                               $200
Chapter 13 Trustee

James A. Freeman & Associates                     $169

Gumboland Doughnuts                               $158

C&A On Site Storage                               $130

Kustom Key                                        $128

World Choice Travel                                $64

Sam's Club                                         $60

Kleinpeter Farms Diary                             $50

USA Today                                          $44

Headquartered in Baton Rouge, Louisiana, Gwenadele, Inc., is a
Days Inn and Suites franchisee.  The Company filed for chapter 11
protection on October 22, 2004 (Bankr. M.D. La. Case No.
04-13541).  Pamela G. Magee, Esq., in Baton Rouge, Louisiana,
represents the company in its restructuring efforts.  When the
Debtor filed for protection from its creditors, it estimated debts
of over $1 million.


HAYES LEMMERZ: Gets Approval to Establish Securitization Program
----------------------------------------------------------------
Hayes Lemmerz International, Inc. (NASDAQ: HAYZ) reported that it
has obtained approval from lenders under its $450 million Senior
Secured Term Loan and its $100 million Senior Secured Revolving
Credit Facility of an amendment to its Credit Agreement dated as
of June 3, 2003, to allow the company to establish an accounts
receivable securitization program of up to $100 million and to
modify certain financial covenants contained in the Credit
Agreement.  The Company intends to begin immediately the process
of establishing a securitization program.  Liquidity provided by
the securitization program is expected to be used to replace early
payment programs discontinued by the domestic automakers and for
general corporate purposes.  Although the Company expects to
finalize the securitization program prior to year end, there can
be no assurance as to if or when the program will be completed.
(Hayes Lemmerz Bankruptcy News, Issue No. 56; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


INTEGRATED ALARM: Moody's Rates Planned $125M Sr. Sec. Notes B3
---------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to the proposed
$125 million senior secured second lien notes of Integrated Alarm
Services Group, Inc., and concurrently withdrew the rating on the
proposed $125 million of senior unsecured notes.  All other credit
ratings of the company were affirmed.  The ratings reflect the
company's significant leverage, small size, high industry
attrition rates, financial and operational risks related to
acquisitions and weak liquidity.  The ratings also take into
account the recurring revenue stream from the company's alarm
contract portfolio, solid EBITDA margins and limited capital
expenditure requirements.  The ratings outlook is stable.

Moody's assigned these rating:

   * $125 million Senior Secured Second Lien Notes, rated B3,

Moody's affirmed these ratings:

   * Senior Implied, rated B3,
   * Issuer Rating, rated Caa1,
   * Speculative Grade Liquidity Rating, rated SGL-4.

Moody's withdrew these rating:

   * $125 million Senior Unsecured Notes (Guaranteed), rated B3,

Proceeds from the proposed $125 million Secured Notes to be issued
pursuant to Rule 144A of the Securities Act are expected to be
used to repay $48 million of existing debt, acquire substantially
all of the assets and assume certain of the liabilities of
National Alarm Computer Center, Inc. -- NACC, a subsidiary of Tyco
International Ltd., for about $51 million, pay fees and expenses,
and provide additional liquidity to the company.  The acquisition
of NACC includes contracts to monitor alarm systems on behalf of
dealers, a retail portfolio of contracts to monitor alarm systems
for residential and commercial subscribers, an alarm monitoring
facility and a dealer loan portfolio.  The company expects to
close on a new $30 million revolving credit facility due 2007 (not
rated by Moody's) concurrent with the issuance of the Secured
Notes.  Proceeds from the revolver are expected to be used
primarily to fund acquisitions and for general corporate purposes.

The ratings recognize:

   (1) significant leverage relative to the company's small
       revenue base;

   (2) larger and better capitalized competitors; intense
       competition to secure relationships with dealers and
       acquire alarm monitoring contracts;

   (3) significant attrition rates of residential and commercial
       subscribers; and

   (4) financial and operational risks related to the NACC
       acquisition and other prospective acquisitions.

The company has increased its revenues from about $21 million in
2001 to about $60 million in the latest twelve months  -- LTM --
period ended June 30, 2004, primarily through acquisitions.  The
NACC acquisition will be the company's largest acquisition to
date.  Projected debt to revenues at December 31, 2004 is expected
to exceed 1.5 times.  Moody's expects that the company will
continue to focus on growth through acquisition of alarm
monitoring contracts for its own portfolio and contracts monitored
on behalf of dealers.  The success of this strategy will depend on
such factors as purchase multiples, the quality of assets
purchased, attrition rates and management's ability to integrate
acquisitions and manage a fast growing company.

Positive factors reflected by the ratings include:

   (1) the company's strong position in the business of monitoring
       alarm systems on behalf of dealers,

   (2) recurring revenue streams from the company's dealer and
       retail alarm contract portfolio,

   (3) solid EBITDA margins,

   (4) potential margin expansion from increases in the company's
       portfolio of alarm monitoring contracts, and

   (5) limited capital expenditure requirements.

The stable ratings outlook reflects Moody's expectation that debt
levels will continue to increase as the cost of alarm contract
acquisitions exceeds free cash flow from operations.  The ratings
or outlook will likely benefit if the company demonstrates the
success of its acquisition strategy through increased revenues,
operating margins and improved leverage ratios.  The outlook or
ratings would likely come under pressure if the company fails to
execute on its acquisition strategy as evidenced by growing
attrition rates and deteriorating leverage ratios.

Obligations under the proposed Secured Notes will have a second
lien on substantially all of Integrated Alarm's tangible and
intangible property.  The B3 rating on the Secured Notes, notched
at the senior implied level, reflects the preponderance of Secured
Notes in the capital structure.  The Secured Notes will be
effectively subordinated to all first lien debt of the company and
its subsidiaries.  The notes will be senior to all existing and
future unsecured indebtedness.

In addition to incurrence based covenants, the Secured Notes are
expected to have a covenant that provides that if the weighted
average retail attrition rate for the trailing three quarters
exceeds 18%, within forty five days after the filing of its
quarterly report on Form 10-Q the company will be required to make
an offer to purchase 10% of the Secured Notes at par.  In
addition, the company's purchase of retail contracts will be
limited to a maximum of $2 million per quarter if retail attrition
exceeds 18% for the latest one or three fiscal quarters.

The proposed $30 million revolving credit facility will be secured
by a first priority security interest in substantially all
tangible and intangible assets of the company and a pledge of 100%
of the stock of its operating subsidiaries.  Availability under
the revolving credit facility is subject to a borrowing base based
on a multiple of recurring monthly revenues from certain retail
alarm monitoring contracts.

The assignment of the SGL-4 rating reflects the company's weak
liquidity profile over the next twelve months.  The company has
significant projected cash needs including amounts required for
projected alarm monitoring contract acquisitions, required debt
amortization and capital expenditures.  These cash needs are
expected to exceed the company's cash on hand and free cash flows
from operations in the next twelve months.  If the company
completes expected contract acquisitions and does not obtain
additional financing, the company will need to rely on its $30
million revolving credit facility.  Liquidity could be constrained
if the integration of acquisitions is not completed successfully
and in a timely manner or the company is required to fund certain
loan commitments assumed in connection with the NACC acquisition.

The SGL-4 rating also reflects the liquidity risks in the event
retail attrition rates increase significantly.  If weighted
average retail attrition rates for the trailing three quarters
increase to 18%, the company will be required by the terms of the
indenture to make an offer to purchase 10% of the Secured Notes at
par.  The indenture, however, will limit the purchase of retail
contracts to a maximum of $2 million per quarter if retail
attrition exceeds 18% for the latest one or three fiscal quarters.

Integrated Alarm's revolver is expected to contain a minimum fixed
charge coverage ratio covenant.  Moody's expects the company to be
in compliance with this covenant for the next twelve months while
maintaining adequate cushion under the covenant for each quarter.

The SGL rating will be sensitive to the timing and amount of
contract acquisitions, attrition rates and the company's ability
to grow free cash flow from operations.

For the LTM period ended June 30, 2004, free cash flow (defined as
cash flow from operations less capital expenditures) to total debt
was 9.8%.  Moody's projects that free cash flow to total debt will
improve to over 15% in 2005.  For the LTM period, EBITDA to
interest was 2.1 times and total debt to EBITDA was 3.4 times.

Headquartered in Albany, New York, Integrated Alarm is a provider
of alarm monitoring services.  Revenue for the LTM period ended
June 30, 2004 was approximately $60 million.


INTEGRATED ELECTRICAL: Limiting Current Bond Issues
---------------------------------------------------
Integrated Electrical Services, Inc. (NYSE: IES) plans to limit
its use of bonds on projects that do not meet certain financial
criteria.  IES said current conditions in the surety bonding
industry are adversely affecting IES' ability to obtain surety
bonding consistent with historical terms.

Losses experienced by the surety industry in the past two years
have caused surety providers to limit capacity and increase prices
for all participants, including IES, even though IES has incurred
no surety losses on any project in its history. IES believes that
the overall surety industry will continue to be challenged by
fewer providers of surety bonds and a difficult re-insurance
environment.

IES continues to obtain surety bonds and has issued approximately
$60 million in bonds during the last 90 days; however, the
financial terms have become increasingly unattractive. IES
currently has placed collateral in the amount of $22.5 million
with its surety provider and currently has approximately $200
million in costs to complete on bonded jobs. Since September 9,
2004, IES has posted $17.5 million of the $22.5 million and has
received $51 million in additional bonding.

IES' CEO, Roddy Allen stated, "As a result of the increased
financial requirements from the providers of our surety bonds, we
have determined that certain projects are no longer economically
attractive after considering the additional capital cost
associated with surety bonds. Discussions with our current surety
provider have not resulted in surety terms that allow IES to
pursue some larger new project opportunities on a basis we deem to
be financially acceptable. IES does intend to provide bonds on
projects it deems attractive and is in discussions with its surety
provider and, through its broker, with other providers to achieve
a more cost effective program, and those discussions are ongoing.
There is no assurance that the company will be able to obtain
other surety alternatives on acceptable terms.

Mr. Allen continued, "IES is pursuing a strategy that minimizes
the utilization of surety bonds and has determined that it is in
the best interest of the company to sell certain additional
subsidiaries in addition to those previously disclosed because
they depend heavily upon access to surety bonds. IES is
aggressively moving forward with the previously announced
divestitures and will provide more details on the new divestitures
as we finalize our plans."

On August 13, 2004, the company issued a press release announcing
that it had identified certain issues regarding reported results
at two of its operating subsidiaries, had been conducting an on-
going evaluation of the reported results, and that its Audit
Committee had engaged special counsel to conduct an investigation
of those matters. Shortly after this announcement, five putative
class action lawsuits were filed against IES and certain of its
officers in the United States District Court for the Southern
District of Texas, and one shareholder derivative action was filed
against its directors in the District Court of Harris County,
Texas. The putative class action lawsuits generally allege that
the defendants violated Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 by making false and misleading statements
concerning the company's financial results during the period
November 10, 2003 to August 13, 2004 and by employing inadequate
internal controls. The complaints allege that the defendants
engaged in a scheme to defraud so they could sell their company
stock at inflated prices and close a $175 million senior credit
facility. The complaints seek unspecified monetary damages. On
October 19, 2004, a motion was filed to consolidate the putative
class action lawsuits, to appoint Central Laborer's Pension Fund
as lead plaintiff, and to appoint lead counsel. A scheduling
conference has been set for November 17, 2004 in the first-filed
case. The company anticipates that the cases will be consolidated
and that a consolidated amended complaint will be filed after lead
plaintiff and lead counsel are appointed. Defendants expect to
file a motion to dismiss the consolidated amended complaint and to
otherwise vigorously defend against these actions. Under the
Private Securities Litigation Reform Act of 1995, all discovery
will not begin in the putative class action lawsuits until the
defendants' motion to dismiss is resolved.

On September 3, 2004, a shareholder derivative action was filed
against the company's Board of Directors and certain of its
officers. It alleges that the company's Board of Directors and
certain of its officers breached their fiduciary duties, abused
their control, grossly mismanaged, wasted corporate assets, and
unjustly enriched themselves based on the same conduct alleged in
the putative class action lawsuits. Counsel for plaintiff in this
action has stated its intention to file an amended petition no
later than January 31, 2005. Accordingly, the parties have agreed
to extend the deadline for all defendants to file their answer or
otherwise respond until 30 days after the amended petition is
filed. The defendants intend to vigorously defend against this
action as well.

The Company also received a letter on August 31, 2004 from the
Staff of the United States Securities Exchange Commission
requesting voluntary production of certain documents relating to
its internal investigation, the investigation conducted by counsel
to the Audit Committee of the Company's Board of Directors, and
the material weaknesses identified by IES' auditors. The SEC has
not advised the Company as to either the reason for the inquiry or
its scope. The SEC's notice states that it should not be construed
as an indication of any improper or unlawful conduct. The SEC has
not issued a formal order, and the Company has voluntarily agreed
to cooperate fully with the inquiry.

On Oct. 4, IES announced a jury verdict in a pending lawsuit. The
court ordered mediation related to the verdict previously
discussed in the company's October 4, 2004 press release,
concluded without the parties reaching a settlement. IES is
hopeful that further discussions may still result in a
satisfactory resolution of this matter. If the parties do not
reach a settlement, the company intends to appeal any judgment
entered. As previously disclosed, IES has made an accrual for a
potential judgment; however, no judgment has been entered in the
case to date.

                        About the Company

Integrated Electrical Services, Inc. is the leading national
provider of electrical solutions to the commercial and industrial,
residential and service markets. The company offers electrical
system design and installation, contract maintenance and service
to large and small customers, including general contractors,
developers and corporations of all sizes.

                          *     *     *

As reported in the Troubled Company Reporter on Oct. 12, 2004,
Moody's Investors Service downgraded the ratings of Integrated
Electrical Services, Inc., and maintained the company on review
for possible further downgrade following various events including
the continued postponement of release of the company's fiscal 2004
third quarter 10-Q, concerns surrounding the timing of future
filings, the resignation of the company's Chief Financial Officer,
and the decision by its Chief Operating Officer to step down, an
adverse decision in recent litigation, and concern that recent
events may impact the company's surety bonding. The downgrade
also reflects difficulty in accessing the company's recent
financial performance as a result of the continued delay in filing
its audited financials for the third quarter of 2004.

Moody's has downgraded these ratings and left them on review for
further possible downgrade:

   * Senior Implied, downgraded to B1 from Ba3;

   * Senior Unsecured Issuer Rating, downgraded to B2 from B1;

   * $173 million (remaining balance) of 9.375% senior
     subordinated notes due 2009 (in two series), downgraded to B3
     from B2.

On August 2, 2004, Integrated Electrical said it was rescheduling
its fiscal 2004 third quarter earnings release and conference call
due to its ongoing evaluation of certain large and complex
projects at one subsidiary that experienced project management
changes in the latter part of the third quarter. On Aug. 13,
2004, the company announced that it would be delaying the filing
of its fiscal 2004 third quarter 10-Q. On Aug. 16, 2004, the
company disclosed that it had identified potential problems at one
of its subsidiaries and an additional issue in one contract at
another subsidiary. This review resulted in adjustments to
operating income of $5.7 million. Integrated Electrical's
auditors, Ernst & Young, advised the company that as a result of
these issues, there were material weaknesses in complying with
Sarbanes-Oxley and that the filing of the 10-Q would occur
simultaneously with the release of the fiscal 2004 year-end audit,
which is expected to occur on or before Dec. 15, 2004.
Furthermore, although the company received a waiver from the
senior subordinated bond holders through Dec. 15, 2004, failure to
file its fiscal 2004 third quarter 10-Q by this date could trigger
a default. A notice of default under the senior subordinated
notes triggers a cross default under the bank credit agreement.

Integrated Electrical announced on September 29, 2004, that
Richard L. China has resigned his position as Chief Operating
Officer to accept the appointment of Senior Vice President,
Strategic Business Development. The company also announced on the
same day that Jeffrey Pugh, Chief Financial Officer since June 7,
2004, resigned to pursue other opportunities. Although these
factors on their own may not be a concern, these announcements
have occurred during a period of turmoil and could suggest that
other issues are brewing or that the problems run deeper than is
currently obvious. Seemingly unrelated, a verdict against the
company was announced in a case pending in the 133rd District
Court of Harris County, Texas that arose out of the proposed sale
of a subsidiary of the Company and an employment claim by a former
officer of the subsidiary. Potential losses were initially
estimated not to exceed $30 million and may be much lower if the
judge reduces the amount, the company settles, or wins upon
appeal. Irrespective of the eventual outcome, this is additional
uncertainty that comes during a tough time in the company's
history. Moody's is concerned that these factors may affect future
negotiations with its insurance providers and thereby result in
higher surety bonding costs or reduced availability. Recent events
could also affect the company's contract win rates adversely.
Integrated Electrical already seen its borrowing base (as a
percent of receivables) adjusted slightly as a result of recent
events.

Although the lack of audited financial results makes the ratings
decision more difficult, the company's last twelve months results
through March 31, 2004, had placed the company weakly within its
previous ratings category. Specifically, for this period,
earnings before interest and taxes (EBIT) to total assets was
under 8.5%, EBITDA less capital expenditures to interest was only
about 2.6 times and EBIT margin was under 5%. Furthermore, free
cash flow after capital expenditures to debt of 8% is more
indicative of a B1 Senior Implied rating than a Ba3.

Moody's continued review will focus on Integrated Electrical's
progress in addressing weaknesses in its internal controls,
including integrating many disparate subsidiary companies into a
smoothly functioning national corporation and the methods employed
in properly estimating revenues, costs and percentage of
completion on contracts. In addition, the review will address
Integrated Electrical's continuing relationships with its bank
group and surety provider, litigation risks, and the company's
ongoing liquidity. Total liquidity, comprised of unrestricted
cash and revolver availability, is believed to currently total
over $50 million.


INTEGRATED ELECTRICAL: Lack of Info Cues S&P to Withdraw Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings, including
the 'BB-' corporate credit rating, on Houston, Texas-based
Integrated Electrical Services Inc.  The ratings had been on
CreditWatch with negative implications since June 23, 2004.  At
March 31, 2004, the electrical contracting services provider had
about $254 million of total debt (including present value of
operating leases) outstanding.

"The rating withdrawals reflect Standard & Poor's belief that
there is insufficient information available to support a ratings
opinion at this time," said Standard & Poor's credit analyst
Heather Henyon.  Integrated Electrical has yet to file financial
statements for its third fiscal 2004 quarter ended June 30, 2004,
and currently indicates that it will file its fiscal 2004 10K by
December 14, 2004.  Additionally, since the ratings were placed on
CreditWatch, a series of events, including IES lowering earnings
guidance (before eventually dropping it altogether), delays in
providing timely financial statements, and acknowledgement of
internal accounting and control issues, led Standard & Poor's to
lower the ratings.  Integrated Electrical most recent
announcements that its access to the surety market has been become
increasingly unattractive, undermines a key rating consideration
that at least fair liquidity was being maintained.  Since the
company has not specified its full access to capital resources,
the news makes us increasingly concerned about the company's
financial flexibility and business prospects, although it is
impossible to quantify how material the issues are without further
detail.  As a result, S&P believes that withdrawing a ratings
opinion is appropriate at this point in time.  Following the
resolution of these items, it is possible that S&P will reinitiate
coverage.

Integrated Electrical is a leading electrical contractor in the
domestic U.S. commercial and residential construction markets.


INTERSTATE BAKERIES: Hires Kurtzman Carson as Claims Agent
----------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Missouri
gave Interstate Bakeries Corporation and its debtor-affiliates
permission to employ Kurtzman Carson Consultants, LLC, as their
claims, noticing and balloting agent.

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.

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


INTERSTATE BAKERIES: Wants Court Nod to Retain Kutak as Co-Counsel
------------------------------------------------------------------
The Official Committee of Unsecured Creditors seeks the U.S.
Bankruptcy Court for the Western District of Missouri's authority
to retain Kutak Rock, LLP, effective as of Sept. 30, 2004, as its
co-counsel with regard to the Debtors' Chapter 11 cases.

The Committee believes that Kutak Rock is well qualified to
represent it in the Debtors' Chapter 11 cases in an efficient and
timely manner because of the firm's:

   * experience and expertise in the field of business
     reorganizations under Chapter 11 of the Bankruptcy Code;

   * experience practicing before the Court; and

   * ability to respond quickly to legal issues that may arise in
     the Debtors' bankruptcy cases.

As co-counsel for the Committee, Kutak Rock will:

   (a) advise the Committee with respect to its powers and
       duties under Section 1103 of the Bankruptcy Code;

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

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

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

   (e) advise the Committee in connection with any sales or
       proposed sales of the Debtors' assets;

   (f) appear before the Court, any appellate court, and the
       United States Trustee to protect the Committee's
       interests and the value of the Debtors' estates before
       the courts and the United States Trustee;

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

   (h) provide any and all other necessary legal advice to the
       Committee in connection with the Debtors' cases.

Kutak Rock will be paid these hourly rates:

            Professional                Rate per hour
            ------------                -------------
             Partners and Of Counsel        $220-325
             Associates                      135-200
             Paralegals                       80-125

Paul D. Sinclair, a partner at Kutak Rock, assures the Court that
the firm does not hold or represent any interest adverse to the
Debtors' estates or to the Committee.

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


INTERWAVE COMMS: First Quarter Net Loss Widens to $6.3 Million
--------------------------------------------------------------
interWAVE(R) Communications International, Ltd. (Nasdaq: IWAV), a
pioneer in compact wireless voice and data communications systems,
reported financial results for its first fiscal 2005 quarter ended
Sept. 30, 2004.

Revenues for the quarter of $4.1 million compare to $10.7 million
in the comparable quarter last year. interWAVE reported a net loss
of $6.3 million, compared to a net loss of $3.4 million in the
comparable quarter last year.

Erwin Leichtle, president and chief executive officer of
interWAVE, observed, "While we are disappointed with our revenue
results for the quarter ended September 30, 2004, we believe our
mid-to-longer-term order outlook and customer pipeline remain
strong. It appears a number of factors combined to impact our
revenues for this most recent quarter, including some of our
customers experiencing a longer internal capital expenditure
approval cycle and other customers delaying their orders due to
our pending amalgamation with Alvarion."

interWAVE's operating expenses for the quarter ended September 30,
2004 decreased 29% to $5.6 million from the $7.8 million incurred
in the comparable quarter of the prior fiscal year as the company
continued its efforts to achieve cost savings.

interWAVE's combined cash balances at the end of the first quarter
of fiscal 2005 were $2.5 million.

A special meeting of interWAVE's shareholders is scheduled to be
held on Dec. 8, 2004 to consider and vote upon the proposal to
approve the Agreement and Plan of Amalgamation, as amended.
interWAVE filed a definitive proxy statement in connection with
the special meeting with the Securities & Exchange Commission on
Monday, Nov. 8, 2004. Assuming all closing conditions have been
satisfied, interWAVE expects the amalgamation to be completed as
soon as practicable following the special meeting.

As reported in the Troubled Company Reporter on Oct. 19, 2004,
Alvarion Ltd. and interWAVE Communications International, Ltd.
have amended the Amalgamation Agreement between the two companies
and interWAVE shareholders will be asked to approve revised
terms. The amended agreement calls for Alvarion to provide
additional interim financing and to acquire interWAVE for $4.18
per share in cash, for total consideration of approximately
$40.5 million.

                        About the Company

interWAVE Communications International, Ltd. (Nasdaq: IWAV) is a
global provider of compact network solutions and services that
offer innovative, cost-effective and scalable networks allowing
operators to "reach the unreached." interWAVE solutions provide
economical, distributed networks intended to minimize capital
expenditures while accelerating customers' revenue generation.
These solutions feature a product suite for the rapid and simple
deployment of end-to-end compact cellular systems. interWAVE's
portable, mobile cellular networks provide vital and reliable
wireless communications capabilities for customers in over 50
countries. The Company's U.S. subsidiary is headquartered at 2495
Leghorn Street, Mountain View, California, and can be contacted at
http://www.iwv.com/or at (650) 314-2500.

                          *     *     *

                       Going Concern Doubt

In its Form 10-K for the fiscal year ended June 30, 2004, filed
with the Securities and Exchange Commission, interWAVE(R)
Communications' auditors express substantial doubt in the
Company's ability to continue as a going concern.

The Company has had recurring net losses, including net losses of
$6.7 million, $28.3 million and $64.3 million for the years ended
June 30, 2004, 2003 and 2002, respectively, and the Company also
had net cash used in operations of $5.6 million, $12.9 million,
and $28.8 million for the years ended June 30, 2004, 2003 and
2002, respectively.


J.H. WHITNEY: Fitch Upgrades Ratings After Review
-------------------------------------------------
Fitch Ratings upgrades all of the rated notes issued by J.H.
Whitney Mezzanine Fund, L.P.  The upgrade of these notes is a
result of Fitch's annual rating review process.

These rating actions are effective immediately:

     -- $26,000,000 class A notes upgraded to 'AAA' from 'AA';
     -- $125,000,000 class B notes upgraded to 'A' from 'BBB';
     -- $60,000,000 class C notes upgraded to 'BBB' from 'BB';
     -- $15,000,000 class D notes upgraded to 'BB' from 'B'.

The fund is a collateralized debt obligation -- CDO -- managed by
J.H. Whitney & Co that closed July 30, 1998.  The fund was
established to issue approximately $650 million in fixed- and
floating-rate notes and invest the proceeds in a portfolio of
primarily private mezzanine debt.  Fitch has reviewed in detail
the portfolio performance of the fund and discussed the current
state of the portfolio with the asset manager.  The collateral
pool is in its amortization period and it is static at this time.

Since the last rating action on December 18, 2003, the
overcollateralization -- OC -- ratio has increased from 119.0% to
127.4% (excluding industry concentration haircuts) as reported on
the Oct. 1, 2003, and Oct. 31, 2004, trustee reports, versus a
trigger of 105%.

The interest coverage ratio is currently 120.9%, compared with its
required test level of 110% (excluding paid in kind interest).
Since the previous review, the A-1 notes have been paid down by
approximately $268 million, or 91% of the total balance.
Currently, there is over $279.8 million of collateral to cover
$226 million of rated notes excluding any credit for valuation on
existing warrants.

Fitch conducted cash flow modeling utilizing various default
timing and interest rate scenarios to measure the breakeven
default rates relative to the minimum cumulative default rates
required for the rated liabilities.

For more information on the Fitch Vector Model, see 'Global Rating
Criteria for Collateralised Debt Obligations,' dated Sept. 13,
2004, available on the Fitch Ratings Web site at
http://www.fitchratings.com.

As a result of this analysis, Fitch has determined that the
current ratings assigned to the class A, B, C, and D notes no
longer reflect the current risk to noteholders and has
subsequently improved.


JETBLUE AIRWAYS: S&P Assigns BB+ Rating to Class C Certificates
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'AAA'
rating to JetBlue Airways Corp.'s (BB-/Negative/--) Class G-1 and
G-2 pass-through certificates series 2004-2, and its preliminary
'BB+' rating to the Class C pass-through certificates:

           Class                 Amount      Maturity
           -----                 ------      --------
           Class G-1     $176.8 million      February 15, 2018
           Class G-2     $185.4 million      May 15, 2018
           Class C       $136.1 million      May 15, 2010

"The 'AAA' rating on the Class G-1 and G-2 certificates is based
on a guarantee insurance policy provided by MBIA Insurance Corp.
(AAA/Stable/--); the 'BB+' rating on the Class C certificates is
based on JetBlue's credit and the added protections of
overcollateralization and structural features of the
certificates," said Standard & Poor's credit analyst Betsy Snyder.

The pass-through certificates are aircraft-backed securities whose
credit quality benefits from substantial overcollateralization,
favorable legal treatment under the U.S. Bankruptcy Code, and
dedicated liquidity facilities. New York, New York-based JetBlue,
a low-cost airline, has grown substantially while maintaining
high, although recently reduced, margins, in the weak airline
environment that began in late 2000.


KAISER ALUMINUM: Court Approves Settlement with Federal Agencies
----------------------------------------------------------------
The United States of America, on behalf of the Department of
Homeland Security, U.S. Customs and Border Protection, finds that
it owes Kaiser Aluminum & Chemical Corporation four prepetition
refunds totaling $390,857 for liquidated customs entries.

Moreover, the Government, on behalf of the Environmental
Protection Agency, timely filed Claim No. 7135 against Kaiser and
its debtor-affiliates for $149,853, representing past response
costs with respect to the Kaiser Aluminum Mead Superfund Site in
Mead, Washington.

The Debtors and the EPA, among others, are parties to a Consent
Decree relating to the Mead Aluminum Reduction Works and Kaiser
Aluminum Mead Superfund Site, which specifically reserves the
Government's right to set off the Customs Refund against the Past
Response Costs.

On September 29, 2003, the U.S. Bankruptcy Court for the District
of Delaware granted the Government, on behalf of the Bonneville
Power Administration, a power marketing administration within the
Department of Energy, an allowed unsecured non-priority claim for
$3,544,943 for its claims arising under:

    (a) the March 1998 Service Agreement for Point-to-Point
        Transmission Service with KACC; and

    (b) the January 1978 lease agreement with KACC for the lease
        of certain transmission equipment.

The Government contends that it is entitled to set off the
Customs Refund against the Federal Agencies Claims.  The Debtors
and the Federal Agencies desire to resolve their differences with
respect to the Claims.

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

    (a) U.S. Customs and the Federal Agencies are granted relief
        from the automatic stay of Section 362 of the Bankruptcy
        Code to set off the Customs Refund against the Federal
        Agencies Claims:

        -- $149,853 of the Customs Refund will be set off against,
           and extinguish, the EPA's claim for the Past Response
           Costs for the Kaiser Aluminum Mead Superfund Site; and

        -- the $241,004 balance of the Customs Refund will be set
           off against Bonneville Power's $3,544,943 Claim arising
           under the PTP Agreement and Capacitor Lease reducing
           that allowed claim to $3,303,938;

    (b) Upon the execution of the Set-off, the Customs Refund will
        be completely extinguished, and the U.S. Customs will have
        no liability to the Debtors for the Customs Refund;

    (c) Upon execution of the Set-off, the Debtors' claims and
        noticing agent, Logan & Company, is authorized and
        empowered to:

        -- withdraw as satisfied that portion of Claim No. 7135
           for the Past Response Costs for the Kaiser Aluminum
           Mead Superfund Site; and

        -- reduce Bonneville Power's allowed unsecured non-
           priority Claim under the PTP Agreement and Capacitor
           Lease to $3,303,938;

    (d) The amount received by the EPA under the Set-off will be
        deposited in a site-specific account for the Kaiser
        Aluminum Mead Superfund Site within the EPA Hazardous
        Substances Superfund to be retained and used to conduct or
        finance response action at or in connection with that Site
        or be transferred by the EPA to the EPA Hazardous
        Substances Superfund; and

    (e) The U.S. Customs' Claim No. 7152 will not be affected by
        the Stipulation.

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. 53;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


KINETICS GROUP: Moody's Junks $17 Million Senior Secured Facility
-----------------------------------------------------------------
Moody's Investors Service downgraded The Kinetics Group's senior
secured and senior implied ratings to Caa1 and Caa2, respectively,
from B3.  This action concludes the review initiated on
September 2, 2004.  The outlook on the ratings is negative.

This downgrade reflects the company's continued unsuccessful
attempts to secure a comprehensive capital restructuring solution,
compounded by its ongoing, unprofitable operating results and
Moody's expectation for no near term recovery.  Together with the
company's inadequate liquidity and sustained cash flow burn, there
is increasing risk over the serviceability of the rated, secured
indebtedness, not to mention the material interest expense
incurred from the outstanding second lien and subordinated debt
balances (totaling approximately $160 million).  Finally, the
company's niche business model, operating within the volatile
semiconductor industry that has begun to show prominent signs of
deceleration for Q4 2004 and through 2005, possesses questionable
recovery capabilities.

Ratings downgraded were:

     (i) The Kinetics Group, Inc.'s $55 million guaranteed senior
         secured revolving credit facility, due 2006, downgraded
         to Caa1 from B3;

    (ii) The Kinetics Group, Inc.'s $17 million guaranteed senior
         secured term loan facility, due 2005, downgraded to Caa1
         from B3;

   (iii) Senior implied rating downgraded to Caa2 from B3; and

    (iv) Senior unsecured issuer rating downgraded to Caa3 from
         Caa1.

Dating back to the technology bubble collapse, the company has
reported weak profit margins and negative free cash flow
generation due to some combination of reduced semiconductor OEM
demand, unfavorable (competitive intensity) pricing pressures and
a taxing capital structure.  In an effort to address its liquidity
challenges, the company has pursued various recapitalization
alternatives ranging from an unsuccessful summer 2004 initial
public equity offering to more recent attempts securing new
private capital contributions combined with some form of existing
debt for equity exchanges.  With no success to date, the company
is confronted by this very limited access to alternative capital
markets.

The negative rating outlook reflects Moody's expectation that the
company's sales will not materially improve for Q4 and through
2005 as operational issues, deteriorating demand and a softened
pricing environment will lead to continued weak (negative) cash
flow generation into the foreseeable future.  The outlook also
incorporates the increasing challenges confronting the company as
it attempts to support the existing capital structure,
characterized by material near-term debt maturities, inadequate
liquidity support and limited financial flexibility.

The credit facilities are supported by a first priority, perfected
security interest in substantially all the assets of Kinetics and
each of its direct and indirect domestic subsidiaries.  Further,
the facilities receive guarantees from each of the borrower's
direct and indirect domestic subsidiaries.  Taking into account
this beneficial first priority position as well the aggregate
outstanding borrowings ($54.5 million, excluding $17 million
revolver commitment residual currently pledged to support
outstanding letters of credit) in relation to the pledged tangible
assets, the facilities' rating has been rated one notch above the
senior implied rating of Caa2.

As of June 30, 2004, Kinetics reported approximately $215 million
of debt, translating into an exceptionally high 53x multiple to
the company's TTM EBITDA (adjusted to exclude non-recurring
charges).  Following the bursting technology bubble, the company
experienced 2002 and 2003 20%+ sales declines as well as very
modest EBITDA.  While gross margins have recovered in recent
quarters to the 20% area, the necessary operational infrastructure
(R&D, sales and marketing) to sustain its market position has made
it a nearly insurmountable obstacle for the company to generate
anything more than modest EBITDA levels.  As a result, the
associated debt protection measures are very weak, with EBITDA to
interest expense of 0.05x and negative EBITDA less capital
expenditures.

The Kinetics Group, Inc., headquarter in Milpitas, California, is
a leader in:

     (i) the design and manufacture of high performance gas and
         chemical delivery process modules integral to equipment
         used in the manufacture of semiconductors; and

    (ii) turnkey chemical delivery process systems and operating
         services utilized by electronics, pharmaceutical and
         biotechnology manufacturers.


KMART CORP: Court Allows Serrano's Claim for $500K
--------------------------------------------------
On April 10, 2002, Serrano, LLC, filed Claim No. 22983 for
$2,500,000.  Subsequently, Kmart Corporation filed several omnibus
objections to the Claim.  Serrano filed responses or otherwise
contested the omnibus objections.

Pursuant to an Assignment and Cooperation Agreement entered into
on April 12, 2002, Serrano assigned to Gerber Trade Finance,
Inc., all of its rights, title, and interest to any and all
contract rights, receivables and claims against Kmart.  Pursuant
to the Assignment Agreement, however, the proof of claim and all
litigation will be filed and prosecuted in Serrano's name.  Thus,
Serrano represents that it has the full legal right to resolve
and compromise, although the Claim has been assigned to Gerber
and all payments made in connection with the Claim will be made
to Gerber.

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

    (a) Claim No. 22983 is allowed as a Class 6 unsecured
        nonpriority prepetition claim for $500,000.  This amount
        will constitute full and final satisfaction of Claim No.
        22983 and of all current and future claims against Kmart
        by Serrano; and

    (b) Serrano and each of its affiliates, successors, assigns,
        and designees, releases Kmart from all claims and causes
        of action arising under or in connection with the Claim
        either on or before October 15, 2004.

Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART
Holding Corporation) -- http://www.bluelight.com/-- is the
nation's second largest discount retailer and the third largest
merchandise retailer.  Kmart Corporation currently operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam.  The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474).  Kmart emerged from chapter 11 protection on May 6,
2003.  John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts.  The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection.  (Kmart Bankruptcy News, Issue No. 84; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


LAGUARDIA: Wants to Use SunTrust & Shaner Cash Collateral
---------------------------------------------------------
LaGuardia Associates, L.P., and its debtor-affiliate, Field Hotel
Associates, LP, ask the U.S. Bankruptcy Court for the Eastern
District of Pennsylvania for permission to use cash collateral
held by SunTrust Bank and Shaner Management Group.

The Debtors need access to the cash collateral to avoid serious
and irreparable harm to their estates and to finance their payroll
and ongoing operating expenses.

The Debtors explain to the Court that certain of their cash were
sent to SunTrust pursuant to a Cash Management Agreement dated
April 23, 2004.  The funds were intended to pay for certain
operating expenses.  Despite the Debtors' repeated requests to
SunTrust, they have not been allowed access to their funds.

The Debtors relate that on October 15, 2004, SunTrust obtained, on
an ex-parte basis, Shaner Management, as a receiver for the
Debtors, whose function included collecting certain of the
Debtors' cash and receivables that arose after October 15, 2004.
The Debtors believe Shaner Management possesses several hundred
thousand dollars of their funds.

The Debtors specifically ask the Court to compel SunTrust to turn
over the funds to them, and to suspend their obligations under the
Cash Management Agreement to pay certain of their revenues over to
SunTrust.

The Debtors also ask the Court to direct Shaner Management to
forward to them all the cash and receivables it possesses that it
collected from the Debtors after October 15, 2004.

The Debtors propose to use the cash collateral in accordance with
their operating budget for a 13-week period from October 29, 2004,
up to January 21, 2005.  A full-text copy of the Cash Collateral
Budget is available for a fee at:

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

To protect SunTrust's principal claim of less than $50 million and
any interest it has for the Debtors' use of the cash collateral,
the Debtors offer to provide SunTrust a replacement lien having
the same prepetition extent, validity and priority.

Headquartered in King of Prussia, Pennsylvania, LaGuardia
Associates, L.P., owns and operates the 358-room Crowne Plaza
Hotel located at 104-04 Ditmars Boulevard in East Elmhurst, New
York. The Company filed for chapter 11 protection on October 29,
2004 (Bankr. E.D. Pa. Case No. 04-34514).  When the Company filed
for protection from its creditors, it estimated assets and
liabilities of $10 to $50 million.


LAGUARDIA: Hires Dilworth Paxson as Bankruptcy Counsel
------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania
gave LaGuardia Associates, L.P., and its debtor-affiliate, Field
Hotel Associates, LP, permission to employ Dilworth Paxson LLP as
their general bankruptcy counsel.

Dilworth Paxson will:

    a) provide the Debtors legal services with respect to its
       powers and duties as debtors-in-possession;

    b) assist the Debtors in preparing all necessary pleadings,
       motions, applications, complaints, answers, responses,
       orders, United States Trustee reports, and other legal
       papers;

    c) represent the Debtors in any matter involving contests with
       secured or unsecured creditors, including the claim
       reconciliation process;

    d) assist the Debtor in providing legal services required to
       prepare, negotiate and implement a plan of reorganization;
       and

    e) perform all other legal services for the Debtors which may
       be necessary other than those requiring specialized
       expertise for which special counsel may be employed.

Lawrence G. McMichael, Esq., a Partner at Dilworth Paxson,
discloses that the Firm received a $381,500 retainer.  For his
professional services, Mr. McMichael will bill the Debtors $500
per hour.

Martin J. Weis, Esq., and Jennifer L. Maleski, Esq., are the other
lead attorneys for the Debtors.  Mr. Weis will bill the Debtors
$330 per hour, while Ms. Maleski will charge at $150 per hour.

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

Headquartered in King of Prussia, Pennsylvania, LaGuardia
Associates, L.P., owns and operates the 358-room Crowne Plaza
Hotel located at 104-04 Ditmars Boulevard in East Elmhurst, New
York. The Company filed for chapter 11 protection on October 29,
2004 (Bankr. E.D. Pa. Case No. 04-34514).  When the Company filed
for protection from its creditors, it estimated assets and
liabilities of $10 to $50 million.


LEAP WIRELESS: S&P Puts B- Corp. Credit Rating with Stable Outlook
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating to San Diego, California-based wireless telecom
carrier Leap Wireless International Inc.  The outlook is stable.

At the same time, Standard & Poor's assigned its 'B-' bank loan
rating to subsidiary Cricket Communications Inc.'s $650 million in
senior secured bank facilities (guaranteed by Leap), based on
preliminary documentation.  A recovery rating of '3' also was
assigned to the loan, indicating an expectation for a meaningful
recovery of principal (50%-80%) in the event of a default.
Borrowings under the bank loan will primarily be used to repay
$350 million of debt issued to existing secured creditors under
the company's reorganization in bankruptcy.

"The ratings are constrained by the very high degree of business
risk facing Leap given the limited mobility of the company's
product offering compared with that of its competitors," explained
Standard & Poor's credit analyst Catherine Cosentino.  Leap uses
1.9 GHz spectrum to offer an unlimited calling service within a
designated local franchise area for $29.99 (before taxes and fees)
within 39 separate market clusters across the U.S.  Leap also
offers additional services and functionality for incremental
monthly fees, including calling features and long-distance
services, but does not provide any roaming capability currently.
Pricing is not substantially lower than that for the lower-end
offerings of the company's competitors (which also offer roaming),
making Leap's growth prospects uncertain.

Leap currently has about 1.5 million customers.  The company's
target market is a less mobile consumer group that utilizes the
wireless phone as an inexpensive wireline alternative.  As such,
average minutes of use for the Leap subscriber is about twice that
of other wireless companies, at 1,500 monthly minutes.  However,
because the company does not require a credit check or long-term
contracts, the resultant demographics of its customer base are
generally less attractive than those of many other cellular and
PCS carriers.  Wireless usage by this customer segment is,
therefore, more sensitive to changes in macroeconomic factors.


LUCENT TECHNOLOGIES: McGinn & Heindel Get "Wells" Notices from SEC
------------------------------------------------------------------
Lucent Technologies, Inc., has been informed that its former
Chairman and Chief Executive Officer, Richard McGinn, the former
head of the Company's Saudi Arabian operations, John Heindel, and
a third former employee received "Wells" notices from the staff of
the U.S. Securities and Exchange Commission.  These Wells notices
state that the staff of the SEC is considering recommending that
civil actions be taken against the three former employees for
violations of the Foreign Corrupt Practices Act.  The allegations
against these individuals include violations of the anti-bribery
provisions of the FCPA and aiding and abetting the Company's
alleged violations of requirements under the FCPA to keep accurate
books and records and to maintain a proper system of internal
accounting controls.  These actions are the result of the
previously disclosed investigation by the SEC and the U.S.
Department of Justice into possible FCPA violations in connection
with the Company's operation in Saudi Arabia during the period of
1997 to 2000.  The Company has not received a Wells notice at this
time, but the investigation is continuing.

                    About Lucent Technologies

Lucent Technologies designs and delivers the systems, services and
software that drive next-generation communications networks.
Backed by Bell Labs research and development, Lucent uses its
strengths in mobility, optical, software, data and voice
networking technologies, as well as services, to create new
revenue-generating opportunities for its customers, while enabling
them to quickly deploy and better manage their networks. Lucent's
customer base includes communications service providers,
governments and enterprises worldwide. For more information on
Lucent Technologies, which has headquarters in Murray Hill, N.J.,
USA, visit http://www.lucent.com/

                          *     *     *

As reported in the Troubled Company Reporter on Sept. 14, 2004,
Moody's Investors Service raised the senior implied debt rating of
Lucent Technologies, Inc., to B2 from Caa1 and affirmed the SGL-2
short-term ratings.  The rating outlook is positive.

The current rating takes into consideration the risks inherent in
the volatile communications equipment market, including weakened
capital spending by carriers, intense competitive pressure from
existing and new entrants like Huawei Technologies and rapidly
evolving technology standards.  The positive outlook reflects the
fact that Lucent's rating could be upgraded to the extent the
company is able to sustain profitable revenue growth and positive
free cash flow generation that result in further improvement in
credit metrics.  Alternatively, the rating outlook could face
downward pressure to the extent revenues show material decline,
the company is unable to sustain improvements in profitability and
cash generation, future acquisitions consume a substantial amount
of cash or the company adopts a materially less conservative
approach towards its internal liquidity profile or the use of
vendor financing.


MARSH SUPERMARKETS: S&P Places B+ Rating on CreditWatch Negative
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Marsh
Supermarkets Inc., including the 'B+' corporate credit rating, on
CreditWatch with negative implications.  Marsh had $214 million of
debt outstanding as of June 19, 2004.

"The CreditWatch placement reflects our concern regarding the
company's lack of progress in improving its profitability levels
and credit measures," said Standard & Poor's credit analyst Stella
Kapur.  At June 19, 2004, total lease-adjusted debt to EBITDA was
6.1x and last-12-month lease-adjusted EBITDA interest coverage was
1.8x.  Credit measures could remain at a level consistent with a
'B' corporate credit rating over the intermediate term, especially
considering the competitive nature of the supermarket industry.

Standard & Poor's will resolve the CreditWatch listing after
further discussions with management regarding the company's
financial plans.  Ratings might be lowered by one notch.


MICROTEC ENTERPRISES: Files for CCAA Protection in Quebec
---------------------------------------------------------
Microtec Enterprises, Inc. (TSX:EMI) has filed a motion with the
Superior Court of the Province of Quebec requesting an order for
protection under the Companies' Creditors Arrangement Act in order
to facilitate its financial restructuring. The filing includes the
Company and all its subsidiaries.

This filing is necessary because the bankers of Company have
refused to extend the forbearance that was in place until recently
and in order to allow the Company to complete a recapitalization
plan. The purpose of this filing is to:

   -- provide the Company with additional time to finalize and
      complete the recapitalization plan already being negotiated,

   -- facilitate the proposal of an arrangement, including with
      its lenders, and

   -- obtain adequate protection for directors and officers of the
      Company by Court order.

The hearing of the filing will continue in the Superior Court and
the Company anticipates that a decision will be issued following
the hearing.

This filing does not affect the operations and services offered by
the Company. No lay-offs are anticipated.

                        About the Company

Solidly established in Canada, Microtec Enterprises Inc. --
http://www.microtecsecuri-t.com/-- provides a wide range of
security and home automation services that ensure the protection
and well-being of its residential and commercial customers. The
Company is building on its strong position in the industry by
developing new products and services, expanding its subscriber
base, and creating strategic alliances.


MICROTEC ENTERPRISES: Obtains Initial CCAA Stay Order
-----------------------------------------------------
Microtec Enterprises, Inc. (TSX:EMI) has obtained an order from
the Superior Court of the Province of Quebec for protection under
the Companies' Creditors Arrangement Act in order to facilitate
its financial restructuring. The filing includes the Company and
all its subsidiaries.

The order provides the Company with additional time to finalize
and complete the recapitalization plan already being negotiated,
facilitate the proposal of an arrangement, including with its
lenders, and obtain adequate protection for directors and officers
of the Company in the course of their duties. The Court has
appointed Raymond Chabot, Inc., as monitor for the restructuring.
Requests for information intended to the monitor should be
directed to Jean Gagnon 514-878-2691 or Jean Chiasson 418-647-
3151.

This order does not affect the operations and services offered by
the Company. No lay-offs are anticipated.

Solidly established in Canada, Microtec Enterprises, Inc.,
provides a wide range of security and home automation services
that ensure the protection and well-being of its residential and
commercial customers.

                         About the Company

Solidly established in Canada, Microtec Enterprises, Inc. --
http://www.microtecsecuri-t.com/-- provides a wide range of
security and home automation services that ensure the protection
and well-being of its residential and commercial customers. The
Company is building on its strong position in the industry by
developing new products and services, expanding its subscriber
base, and creating strategic alliances.  The Company filed on Nov.
10, a motion with the Superior Court of the Province of Quebec
requesting an order for protection under the Companies' Creditors
Arrangement Act in order to facilitate its financial
restructuring.


MURRAY INC: Wants to Employ Bass Berry as Co-Counsel
----------------------------------------------------
Murray, Inc., asks the U.S. Bankruptcy Court for the Middle
District of Tennessee for permission to employ Bass Berry & Sims,
PLC, as co-counsel of Pachulski, Stang, Ziehl, Young, Jones &
Weintraub PC.

Bass Berry will:

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

     b) prepare and pursue confirmation of Debtor's plan and
        approval of the Debtor's disclosure statement;

     c) prepare necessary applications, motions, answers, orders,
        and other legal papers on behalf of the Debtor;

     d) appear in Court and protect the interest of the Debtor
        before the Court; and

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

The principal attorneys and paralegals of Bass Berry and their
standard hourly rates are:

              Professional              Rate
              ------------              ----
            J. Andrew Goddard           $330
            Paul G. Jennings            $325
            Fritz Richter, III          $325
            Gene L. Humphreys           $295
            Philip G. Young             $205
            Wendy Hall                  $175
            Russell E. Stair            $155
            Linda Privette              $140
            LeAnn Lewis                  $85

Paul G. Jennings, Esq., discloses that the Firm received $63,755
as initial payment from Murray for expenses incurred and services
rendered related to restructuring and commercial matters.

Bass Berry professionals will closely coordinate with Pachulski
Stang to avoid duplication of efforts and services.

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

Headquartered in Brentwood, Tennessee, Murray Inc. --
http://www.murray.com/-- manufactures lawn tractors, mowers,
snowthrowers, chipper shredders, and karts.  The Company filed for
chapter 11 protection on Nov. 8, 2004 (Bankr. M.D. Tenn. Case No.
04-13611).  When the Debtor filed for protection from its
creditors, it estimated more than $100 million in total debts and
assets.


NEW LIFE HOLINESS: List of 8 Largest Unsecured Creditors
--------------------------------------------------------
New Life Holiness Church released a list of its 8 Largest
Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Sam's Club                    Credit card                 $3,800
P.O. Box 4596
Carol Stream, IL 60197

Simplex Leasing               Credit account              $2,400
c/o Paul Mendelson
799 Estate Place
P.O. Box 17235
Memphis, TN 38187

Home Depot Credit Services    Credit card                   $800
P.O. Box 6029
The Lakes, NV 88901

Community Television          Advertisement                 $600

Office Depot                  Credit card                   $600

Bellsouth Regional Bankruptcy Phone services                $225

ABC Waste, Inc.               Maintenance service            $60

ADT Security                  Alarm services                 $33

Headquartered in Millington, Tennessee, New Life Holiness Church
operates a church.  The Debtor filed for chapter 11 protection
(Bankr. W.D. Tenn. Case No. 04-37391) on November 5, 2004.  Jerome
C. Payne, Esq., in Memphis, Tennessee, represents the Company in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed $1,045,000 in assets and $938,518 in
debts.


NORTHWEST ALUMINUM: Case Summary & 33 Largest Unsecured Creditors
-----------------------------------------------------------------
Lead Debtor: Northwest Aluminum Company
             3313 West 2nd Street
             The Dalles, Oregon 97058

Bankruptcy Case No.: 04-42061

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      Northwest Aluminum Specialties, Inc.       04-42059

Type of Business: The Debtor is a subsidiary of Golden Northwest
                  Aluminum, Inc., engaged in the production of
                  aluminum billet for hot extrusion, hot or cold
                  impact extrusion, and hot or cold forging stock
                  in most aluminum alloys.
                  See http://www.nwaluminum.com/

Chapter 11 Petition Date: November 10, 2004

Court: District of Oregon (Portland)

Judge: Randall L. Dunn

Debtor's Counsel: Richard C. Josephson, Esq.
                  Stoel Rives LLP
                  900 South West 5th Avenue #2600
                  Portland, OR 97204
                  Tel: 503-294-9537

Estimated Assets: $10 Million to $50 Million

Estimated Debts:  More than $100 Million

A. Northwest Aluminum Company's 13 Largest Unsecured Creditors:

   Entity                     Nature Of Claim       Claim Amount
   ------                     ---------------       ------------
The Bank of New York          Loan - Partially      $168,000,000
Attn: Mr. Martin Feig, VP     undersecured,
101 Barclay St., 8 West       value of collateral
New York, NY 10286            unknown

Norsk Hydro North America,    Subordinated Loan;     $20,000,000
Inc.                          undersecured;
Attn: Jim Waters              value of collateral
801 International Dr.,        unknown
Ste 200
Linthicum Heights, MD 21090

Reliant Building Products,    Preference Claim          $709,977
Inc.
3010 LBJ Freeway, Ste. 400
Dallas, TX 75235

Bonneville Power              Transmission charges      $453,117
Administration
Attn: Mr. Scott Wilson
905 NE 11th Avenue
Portland, OR 97232

Brett Wilcox                  Wages, salaries,            $7,528
                              and commissions

Thomas Turner                 Wages, salaries,            $5,012
                              and commissions

David Reed                    Wages, salaries,            $4,267
                              and commissions

James Ballinger               Wages, salaries,            $2,492
                              and commissions

Galen May                     Wages, salaries,            $2,473
                              and commissions

William R. Reid               Wages, salaries,            $2,096
                              and commissions

Perkins & Company PC                                      $1,931

Terrie Methvin                Wages, salaries,            $1,878
                              and commissions

Stewart Title of Houston                                  $1,624

B. Northwest Aluminum Specialties' 20 Largest Unsecured Creditors:

   Entity                     Nature Of Claim       Claim Amount
   ------                     ---------------       ------------
The Bank of New York          Loan - Partially      $168,000,000
Attn: Mr. Martin Feig, VP     undersecured,
101 Barclay St., 8 West       value of collateral
New York, NY 10286            unknown

Norsk Hydro North America,    Subordinated Loan;     $20,000,000
Inc.                          undersecured;
Attn: Jim Waters              value of collateral
801 International Dr.,        unknown
Ste 200
Linthicum Heights, MD 21090

US Magnesium LLC              Trade Debt                 $77,306
P.O. Box 371288M
Pittsburgh, PA 15251

Northern Wasco County PUD     Power Supply               $73,281

Quantum Resource Recovery,    Trade Debt                 $32,663
LLC

Hyrdro Aluminum Metal         Trade Debt                 $23,819
Products

Brown & Carls LLP             Legal Fees incurred        $21,213
                              in connection with
                              Bersinger case

Pyrotek, Inc.                 Trade Debt                 $18,202

Liberty Northwest Insurance   Insurance                  $14,111
Co.

BOC Gases                     Trade Debt                 $12,496

Vesuvlus                      Trade Debt                 $11,832

Wagstaff Engineering          Trade Debt                 $10,830

R.E. Powell Distributing Co.  Trade Debt                  $9,355

Daniel Gnall                  Wages, salaries,            $8,363
                              and commissions

Saint-Gobain Ceramics         Trade Debt                  $8,200

Sherman Bergsma               Wages, salaries,            $7,687
                              and commissions

Rex Roto Corporation          Trade Debt                  $5,546

HTP Security, Inc.            Trade Debt                  $5,478

Mercer Transportation Co.     Trade Debt                  $5,477

Kevin Brokaw                  Wages, salaries,            $4,616
                              and commissions


NSG HOLDINGS: Moody's Puts B1 Rating on Senior Secured Facilities
-----------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to the senior
secured credit facilities of NSG Holdings II LLC.  The facilities
are comprised of a $150 million senior secured term loan B due
2011 and a $10 million secured revolving credit facility due 2009.
The rating outlook is stable.

The term loan facilities will be used to finance approximately 46%
of the cost of acquiring various equity interests in a portfolio
of seven power projects that were previously held by El Paso
Merchant Energy.  The balance will be financed with approximately
$175 million of cash equity from NSG II's parent, Northern Star
Generation, LLC.

Northern Star is owned equally by AIG Highstar Generation, LLC,
and a subsidiary of the Ontario Teachers' Pension Plan Board.  AIG
Highstar Generation, LLC is controlled by AIG Highstar Capital II,
L.P., a private equity fund sponsored by AIG Global Investment
Group, which invests in projects and operating companies in the
energy sector.

Ontario Teachers' Pension Plan Board is responsible for the
administration and investment of the Ontario Teachers Pension
Fund.  The projects have a total output capacity of approximately
1,580 MW, of which approximately 1,040 MW is owned by NSG II.
There is one wholly owned project that comprises 680 MW of the
portfolio.

All of the projects are located in the United States; all are
currently operating and have contracts to sell their power output.

The ratings for the credit facilities of NSG II consider the
following strengths:

   1) The geographic diversity of the portfolio;

   2) Cash flow stability provided by the currently existing power
      purchase agreements between the underlying projects and
      various counterparties;

   3) The natural portfolio hedge that exists after the expiry of
      the fixed priced period of several of the contracts;

   4) A reasonable amount of leverage/refinancing risk;

   5) A $10 million cash funded debt service reserve; and

   5) Sponsors who have provided significant equity to NSG II as
      well as credit/liquidity support at the individual project
      level.

However, the B1 rating also reflects these areas of credit
concern:

   1) The credit quality of the project off-takers, whose weighted
      average rating is Ba3;

   2) Limited diversity of the sources of cash flow. Over 50% of
      the cash flows to NSG II are generated by one project that
      relies upon a contract with the lowest rated off-taker;

   3) The normal operating risk associated with power project
      assets;

   4) The structurally subordinated position of the lenders to the
      holding company, in relation to debt at the underlying
      projects;

   5) The lack of some traditional project finance structural
      enhancements, including a cash flow waterfall that is
      administered by a trustee; and

   6) The limited hard asset security that is available to the
      lenders.

The facilities will be secured by all of the assets of the
borrower, which consists mainly of stock of subsidiaries, which
hold equity interests in the underlying project companies.  The
security package also includes a pledge of the common stock of the
subsidiary that owns NSG II's only wholly owned project --
Vandolah.  The lack of hard asset collateral reflects:

   1) debt outstanding at three of the projects,

   2) the first lien position granted to the tolling counterparty
      of the Vandolah project, and

   3) the shared ownership of the projects.

The stable outlook reflects the expectation that NSG II will
experience relatively stable cash flows due to the predominately
contractual nature of the underlying cash flow streams.  The
stable outlook assumes near term stability in the credit quality
of the contractual off-takers and anticipates that the projects
will continue to be operated in a manner that allows them to
achieve high availability factors.

NSG II's rating considers the geographic diversification of its
portfolio of power projects.  The seven projects are located in
five different U.S. states and have eight different off-takers,
with one project having two off-takers.  The projects burn coal,
waste coal and gas and include a combination of peaking, mid-merit
and base load units.

The rating also reflects the limited fuel price exposure of the
portfolio.  In the near term, the portfolio has very little fuel
price risk.  All of the contracts are either tolling agreements or
have established fuel hedges.  Beginning in 2006 and 2007 the
energy payments for the two California coal-fired projects' energy
payments will be based upon the utilities' short run avoided cost
-- SRAC, which will vary with gas prices.  Another West Coast gas
project in the portfolio receives energy payments based on a CPI
index and currently has gas contracts expiring between 2007 and
2012.  These contractual arrangements effectively constitute a
substantial natural hedge for the total portfolio of generating
assets.  As a result, it is expected that the amount of debt
outstanding at maturity of the term loan would not change
substantially under different scenarios for natural gas prices.

The issuer's initial debt/capitalization ratio is 46%; and the
proportional consolidated debt ratio (counting the NSG II term
loan plus debt at the underlying project level in an amount that
is proportionate to NSG II's ownership interest) is 66%.  The
average annual funds from operations -- FFO -- is expected to
equal close to 20% of the initial term loan; and estimated
consolidated proportional (based on NSG II's ownership interest)
FFO is expected to be approximately 10% of proportional
consolidated debt.  FFO to interest is expected to be over 4 times
for NSG II; while proportional consolidated coverage (counting
debt at the underlying project level) is projected to be
approximately 2.7x.

The NSG II sponsors have provided significant cash equity as well
as support to several of the underlying projects in the form of
letters of credit or guarantees in support of the project's
commercial obligations.

The B1 rating also considers the credit quality of the contractual
off-takers.  The off-takers are varied and located in different
parts of the country, providing some degree of diversity.
However, their weighted average credit quality is Ba3.

The B1 rating also reflects the cash flow concentration risk
inherent in the portfolio.  Approximately 55% of the cash
distributions to NSG II over the life of the term loan are
expected to come from the Vandolah project.  The Vandolah project
has a tolling agreement with Reliant Energy Services, which is
guaranteed by Reliant Energy Inc.  The project is a peaking plant
located in central Florida, which ran approximately 4% of the time
in 2003.  The Florida market has historically experienced very
strong growth, and this is expected to continue for the
foreseeable future.  However, the Florida market has not opened up
to competition as quickly as Reliant and other merchant generators
who have made investments in this market had anticipated.  NSG II
relies heavily upon cash from Vandolah, which is dependent upon
capacity payments from Reliant Energy Services.  Although the
project is one of the more efficient peaking plants in Florida, it
is still only needed at peak periods.

The rating recognizes that all of the projects use relatively
simple proven technology, and that they will continue to be
operated by the existing experienced personnel.  However, the
projects must achieve projected availability and capacity factors
in order for NSG II to receive its anticipated cash flows.  The
projects are susceptible to normal planned and unplanned outages
or increased expenses that could increase cash flow volatility,
particularly at the equity level of the NSG II financing.  For
example, one of the projects was not able to make a distribution
in 2004 due to its failure to pass a 1.15x lease coverage test as
a result of an unplanned outage in 2003.  It's lease coverage
ratio was 1.11x.

The B1 rating recognizes that the NSG II lenders are structurally
subordinate to debt at the operating projects.  Three of the seven
projects have outstanding debt or leases that contain covenants
that could restrict cash dividends to NSG II.  Covenants at the
underlying project level include debt service coverage ratio
tests, lease coverage ratio tests, and requirements for fully
funded debt service and or maintenance reserves or letters of
credit.

The NSG II financing will not benefit from some of the structural
enhancements that are often found in similar transactions, such as
a debt service coverage ratio test for distributions, and control
of cash via trustee held accounts with a waterfall payment
structure.  However, the lenders will benefit from the existence
of a $10 million cash funded debt service reserve, which is
equivalent to one year of interest and scheduled principal
payments.  Additional proportional debt will be permitted at the
underlying project level, in order to allow for the acquisition of
additional holdings in existing projects.  Distributions for
payment of partner taxes and investment in subsidiaries will be
allowed prior to the calculation of excess cash available to
prepay debt.

Financial covenants include:

   1) borrower cash flow/interest minimum of 4.0x;

   2) maximum borrower debt to cash flow, decreasing from 4.5x to
      2.0x; and

   3) maximum borrower debt plus proportionate project debt to
      proportionate acquired EBITDA less borrower expenses,
      decreasing from 6.5x to 4.0x.

The term loan is scheduled to be repaid 1% per year under the
amortization schedule.  In addition, the term loan will be prepaid
once per year with 60% of cash available for distribution after
payment of expenses, scheduled debt service, partner taxes, and
permitted advances to subsidiaries.

The rating is predicated upon the final structure and
documentation being consistent with Moody's current understanding
of the transaction.

NSG Holdings II LLC is a holding company that owns equity
interests in seven electric power projects located in the western,
southeastern and northeastern United States.  NSG II is owned 100%
by Northern Star Generation, LLC, which is owned equally by AIG
Highstar Generation, LLC and a subsidiary of the Ontario Teachers'
Pension Plan Board.


OSHKOSK TRUCK: Moody's Withdraws Low-B Ratings
----------------------------------------------
Moody's Investors Service has withdrawn its Ba2 senior implied and
Ba3 senior unsecured issuer ratings for Oshkosk Truck Corporation.
The company, whose only publicly rated debt instrument was
redeemed in full in late 2003, is not expected to issue new public
debt instruments in the foreseeable future and maintenance of the
ratings is no longer required.  Moody's has withdrawn the ratings
for business reasons.  Refer to Moody's Withdrawal Policy on
http://moodys.com/

Oshkosk Truck company makes heavy-duty vehicles for the defense,
fire and emergency, and commercial industries.  Oshkosh's
commercial and emergency/rescue vehicles include concrete carriers
and refuse trucks (McNeilus brand), snow blowers, and aircraft
rescue and fire-fighting vehicles (Pierce brand).  Oshkosh's
vehicles are used in institutional, airport, and municipal
markets.  The company also makes heavy-payload tactical trucks for
the US Department of Defense (DOD) and has acquired Jerr-Dan, the
towing equipment manufacturer, from Littlejohn & Co. for a
reported $80 million.


PARMALAT USA: Wants Former VP F. Ferrante to Produce Documents
--------------------------------------------------------------
Before the bankruptcy petition date, Frank Ferrante acted as Vice
President and General Manager of the northeast operations for
Parmalat USA Corp. and Farmland Dairies L.L.C.  Mr. Ferrante held
this position from the time Parmalat USA acquired Farmland in
December 1999, up until his resignation on January 5, 2004.
Following his resignation, Mr. Ferrante assumed a position at
Tuscan/Lehigh Dairies, Inc., and one of its affiliates, a
significant competitor of Farmland in the New York and New Jersey
area.

Mr. Ferrante also induced his assistant Artan Zuta and salesman
Steven Kane to leave Farmland and join him at Tuscan.  On
January 5, 2004, Mr. Zuta hand-delivered to Farmland's offices
copies of resignation letters on behalf of Mr. Ferrante and
himself.  Mr. Kane left two days later.

After having determined that a reorganization of their core
business as a going concern would provide greater value to
creditors and other parties-in-interest, the U.S. Debtors
appointed a new management team to assist them.  Specifically, the
U.S. Bankruptcy Court for the Southern District of New York
approved Farmland's employment of:

    * James A. Mesterharm as Chief Restructuring Officer;

    * Martin J. Margherio as President and Chief Operating
      Officer;

    * Mikael B. Pederson, as Executive Vice President; and

    * Teressa E. Webb, as Chief Financial Officer.

Following their appointment, the New Management Team commenced a
review of Parmalat USA's financial records and business affairs
and discovered certain transactions involving Mr. Ferrante that
require further scrutiny.

                   Bonus Payments to Mr. Ferrante

Gary Holtzer, Esq., at Weil, Gotshal & Manges, LLP, in New York,
relates that after a careful examination of the U.S. Debtors'
records, the New Management Team learned that Mr. Ferrante
received significant payments in addition to his annual salary
throughout his employment with Parmalat USA.  Mr. Ferrante's
actual yearly compensation totaled more than $1,000,000 -- an
amount which is far in excess of market levels for individuals
with similar positions at comparable companies and greater than
the annual rate of compensation received by Parmalat USA's current
Chief Executive Officer.

Furthermore, company records reveal that the manner in which the
bonus payments were paid also departed from standard practice.
Each bonus payment that Mr. Ferrante received was set at an even
dollar amount and then grossed-up to account for tax withholdings.

While the New Management Team continues to investigate
Mr. Ferrante's compensation, to date, it has been unable to
ascertain any business rationale for the bonus payments.

               Mr. Ferrante's Use of Corporate Funds

It has also come to the New Management Team's attention that Mr.
Ferrante incurred hundreds of thousands of dollars in expenses
annually for customer gifts and entertainment that were paid for
with corporate funds.

Mr. Holtzer tells the Court that in 2003 alone, Mr. Ferrante spent
more than $200,000.  These expenses included $60,000 in
undocumented advances, a $6,000 trip to the Venetian Hotel &
Casino in Las Vegas with a Farmland customer, a $10,000 receipt
from the Venetian Hotel & Casino for unexplained entertainment
expenses for Farmland customers, a total of $10,000 in sporting
event tickets for which no documentation was submitted, and
numerous other reimbursement requests that appear to have been
submitted twice or with altered receipts.

                    The Tuscan Supply Agreement

As Vice President and General Manager of Northeast operations, Mr.
Ferrante negotiated and entered into numerous contracts on
Parmalat USA's behalf before his resignation.

On May 30, 2003, Parmalat USA and Tuscan entered into a supply
agreement, pursuant to which Parmalat USA agreed, inter alia, to
process, package and load fluid milk products under the Tuscan
label or private labels at Farmland's Sunnydale Plant in
Brooklyn, New York, for delivery to Tuscan customers in the New
York area.  A specified processing fee, among other fees, was to
be paid by Tuscan to Parmalat USA for the co-packing services to
be performed at Sunnydale.  Parmalat USA further agreed to
purchase and load other products as requested by Tuscan.

The initial term of the Tuscan Supply Agreement was from
May 30, 2003, through June 30, 2016, with provisions for automatic
renewal.  Pursuant to the Supply Agreement, the parties
contemplated that on June 30, 2004, or, at Tuscan's option, on
July 1, 2004, the volume of fluid milk products to be processed,
packaged and loaded for Tuscan would increase significantly.

In addition to the Co-Packing Services to be performed pursuant to
the Supply Agreement, Parmalat USA also agreed to provide to
Tuscan or its designees certain of its parking, office space and
storage facilities at no additional charge.

According to Mr. Holtzer, a number of the Supply Agreement
provisions which Mr. Ferrante negotiated on Parmalat USA's behalf,
render it a commercially burdensome contract to the U.S. Debtors.
The Supply Agreement obligates the Debtors to perform the
Co-Packing Services for Tuscan at a below market and below cost
price since their production costs exceed the per gallon charge
fixed in the Supply Agreement.  The Supply Agreement also does not
contain any provision which would allow the Debtors to effectively
pass on labor and other production costs as they increase over the
lengthy duration of the Supply Agreement.  Moreover, the Supply
Agreement requires the Debtors to devote roughly 50% of the
Sunnydale plant's capacity to the Co-Packing Services, and
severely limits their flexibility in operating their facilities.
In addition, Sunnydale is not equipped to handle the services
increase contemplated in the Supply Agreement without a major
investment in capital equipment.

The U.S. Debtors incur a loss on each gallon that they process for
Tuscan pursuant to the Supply Agreement.  The commercial terms of
the Supply Agreement require the Debtors to make significant
capital expenditures to contain these unusually high production
costs.  In fact, if the Debtors were required to perform under the
Supply Agreement after the Services Increase without the benefit
of the capital expenditures, the costs per gallon would be
significantly higher than usual, resulting in extraordinary losses
to the detriment of the Debtors and their estates.  In addition to
its burdensome economic terms, the Supply Agreement includes
certain provisions that are vague and, depending on
interpretation, could result in extraordinary losses for the
Debtors in the long term, and costly and time-consuming
litigation.

In a Court-approved stipulation, Parmalat USA and Tuscan agreed
that:

     (i) Parmalat USA will reject the Supply Agreement effective
         as of November 30, 2004; and

    (ii) they will perform under the Supply Agreement beginning
         June 30, 2004, until November 30, 2004, on certain
         modified terms.

              Mr. Ferrante's Post-Resignation Conduct

Since he resigned from Parmalat USA, Mr. Ferrante has induced a
number of large customers to discontinue their business
relationships with Farmland and enter into supply agreements with
Tuscan, Mr. Holtzer informs the Court.  Mr. Ferrante made false,
misleading, disparaging, and defamatory statements to Farmland
customers regarding Farmland's business to hinder the company's
efforts to seek contract extensions with substantial customers and
secure these accounts for Tuscan.

                    Rule 2004 Discovery is Proper

Mr. Holtzer asserts that the U.S. Debtors are entitled to examine
Mr. Ferrante pursuant to Rule 2004 of the Federal Rules of
Bankruptcy Procedure.  The discovery falls squarely within the
scope of Rule 2004 because it relates to issues that may affect
the Debtors' property and the administration of the Debtors'
estates.

Mr. Holtzer explains that the U.S. Debtors must be in a position
to evaluate the fairness of the transactions and assess the value
of any claims that they and their creditors may have against Mr.
Ferrante with respect to his conduct, as well as any claims that
they and their creditors may have against other entities who were
the beneficiaries of any gifts, payments or agreements that Mr.
Ferrante entered into on Parmalat USA's behalf.

Moreover, it is in the best interests of the U.S. Debtors, their
estates, creditors, and all parties-in-interest to investigate:

    (1) the nature of the bonus payments;

    (2) the excessive expenses that were paid for with corporate
        funds;

    (3) the facts and circumstances surrounding Mr. Ferrante's
        negotiation of the Supply Agreement;

    (4) the extent of Mr. Ferrante's relationship with Tuscan or
        any of its agents prior to his resignation; and

    (5) any tortious conduct Mr. Ferrante has engaged in since he
        resigned from his position at Parmalat USA.

To fully understand whether and to what extent Mr. Ferrante's
conduct has harmed the U.S. Debtors and their creditors, it is
critical that the U.S Debtors obtain access to certain documents
and information within Mr. Ferrante's possession and control.
Without the discovery, the Debtors will be unable to properly
evaluate the merits of potential claims that could result in
significant recoveries to them and to their creditors, and
positively impact their ability to administer and reorganize their
estates for the benefit of all parties-in-interest.

Accordingly, at the U.S. Debtors' request, Judge Drain directs
Mr. Ferrante to:

     (i) immediately produce all documents and records requested
         by the Debtors; and

    (ii) submit to a deposition upon oral examination on the
         matters at issue.

                           *     *     *

The U.S. Debtors also sought and obtained a Court order directing
Mr. Zuta to produce certain documents for inspection and copying
without further delay.

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


PG&E NAT'L: Wants Exclusive Plan Filing Period Extended to Mar. 1
-----------------------------------------------------------------
USGen New England, Inc., asks Judge Mannes of the U.S. Bankruptcy
Court for the District of Maryland to extend its Exclusive Periods
to:

    -- file a plan through and including March 1, 2005, and
    -- solicit acceptances of that plan through May 1, 2005.

John Lucian, Esq., at Blank Rome, LLP, in Baltimore, Maryland,
relates that USGen has consistently engaged in detailed
consultations with its Creditors' Committee on all major issues,
and of particular note, on asset sale and reorganization issues.

In addition, USGen needs to resolve through negotiation or
litigation a number of sizeable claims that will have a direct
and significant impact on creditor recoveries.  These include
resolution of the claims asserted by Algonquin Gas
Transmission Company, claims asserted under a certain tax sharing
agreement, and certain intercompany claims of USGen's affiliates.
Furthermore, a number of significant claims disputes remain
unresolved.  USGen is in negotiations with respect to many of
these claims, including the claims asserted by New England Power,
and claims arising under various power purchase agreements and
gas transportation contracts which have been rejected.  Moreover,
the largest claim in USGen's case is asserted by the Bear Swamp
counterparties, with respect to which the Debtor has been
immersed in protracted discovery and litigation, and is now in
mediation.

"Until these issues can be brought closer to resolution, it would
be premature to conclude plan formulation because the plan could
not resolve consensually all competing interests (including the
interests of equity, as the prospective asset sales may garner
sufficient value for payment in full on allowed claims and a
return to equity).  Thus, it is appropriate to grant the Debtor
some additional time to try to achieve a consensual plan," Mr.
Lucian says.

USGen anticipates that during the prospective exclusivity
extension period a confluence of events will occur which will
enable the Debtor to emerge from chapter 11:

    -- the Bear Swamp mediation will be concluded, hopefully with
       a settlement agreement among the parties;

    -- failing a settlement, the Court will have concluded
       additional testimony, if any, and will be poised to rule on
       the Bear Swamp issues;

    -- the Debtor's proposed sales of its Fossil and Hydro Assets
       will have been considered and hopefully approved; and

    -- the Debtor's draft plan will be completed so as to be
       reflective of the outcome of the mediation or the
       litigation and the asset sales.

Consequently, Mr. Lucian adds, within the extended exclusivity
period the Debtor has every expectation of filing its plan and
moving its case to conclusion.

"A further 120-day extension of the Exclusive Periods is fair and
reasonable because it will enable the Debtor to determine the
success of the bankruptcy sales process with the current stalking
horses, or such other prospective purchasers who may submit
higher and better offers, and integrate the resolution of the
Bear Swamp dispute in the Debtor's plan formulations.  In the
meantime, the Debtor has been hard at work on and has drafted a
proposed plan and disclosure statement, albeit subject to certain
critical contingencies.  However, the Debtor has intentionally
refrained from precipitously filing these documents, as such
would be premature and disruptive of the mediation and sale
process, and would thus jeopardize ongoing efforts to achieve a
consensus," Mr. Lucian relates.

In stark contrast, Mr. Lucian notes, a denial of a further
exclusivity extension potentially endangers USGen's asset values
and possible sale price because a premature plan or a competing
plan would disrupt its pending sales transactions and the
strategy of the ongoing sale process designed to determine the
maximum value of USGen's assets.

In fulfilling its fiduciary duties to the estate, the Debtor's
focus must be on the pending asset sale process and on resolving
the Bear Swamp disputes.  The Court can ensure a level playing
field by further extending the Exclusive Periods so that the
Debtor is not diverted by expensive and wasteful litigation
concerning the potential for multiple competing plans of
reorganization, which would only further the goals of parochial
interests.

                          *     *     *

Judge Mannes will convene a hearing on Nov. 18, 2004, to
consider USGen's request.  Pursuant to the Order for Complex
Chapter 11 Bankruptcy Case dated July 9, 2003, USGen's Exclusive
Filing Period is automatically extended, without the necessity of
a bridge order, until the conclusion of that hearing.

Headquartered in Bethesda, Maryland, USGen New England, Inc., an
affiliate of PG&E Generating Energy Group, LLC, owns and operates
several electric generating facilities in New England and
purchases and sells electricity and other energy-related products
at wholesale.

The Debtor filed for Chapter 11 protection on July 8, 2003
(Bankr. D. Md. Case No. 03-30465). John E. Lucian, Esq., Marc E.
Richards, Esq., Edward J. LoBello, Esq., and Craig A. Damast,
Esq., at Blank Rome, LLP, represent the Debtor in their
restructuring efforts. When it sought chapter 11 protection, the
Debtor reported assets amounting to $2,337,446,332 and debts
amounting to $1,249,960,731.


RECEIVABLES STRUCTURED: Moody's Pares 7.44% Notes' Rating to Caa2
-----------------------------------------------------------------
Moody's downgraded from Caa1 to Caa2 the rating of the 7.44% Notes
issued by Receivables Structured Trust 2001-Calpoint.  The
downgrade was due to a downgrade of the rating of Qwest
Communications International, Inc., which guarantees certain
payments to the Trust.

The complete rating action is as follows:

Issuer:     Receivables Structured Trust 2001-Calpoint
Securities: 7.44% Notes, downgraded from Caa1 to Caa2

Moody's rating of the Notes is based solely on the rating of
Qwest, which guarantees certain payment obligations of Qwest
Communications Corporation to the Trust.  The main assets of the
Trust are:

      (i) an agreement by the Contractor to make certain monthly
          payments in exchange for telecommunication services to
          be performed by Calpoint LLC, and

     (ii) the guarantee of the Contractor's payment obligations by
          Qwest.

The guaranteed payments are "hell or high water" obligations of
the Contractor; that is, they do not depend on the quality of
services provided by Calpoint or on any other conditions.

The guaranteed monthly payments are in an amount sufficient to
make payments of principal and interest on the Notes, after
deducting fees.  Because payments of principal and interest on the
Notes depend ultimately on the Qwest guarantee of the Contractor's
payment obligations, the rating of the Notes is based entirely on
Qwest's rating.

The Notes were sold pursuant to Rule 144A of the Securities Act.
UBS Warburg acted as placement agent.


RIGGS NATIONAL: S&P Slices Long-Term Counterparty Rating to B-
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
Washington D.C.-based Riggs National Corp. (Riggs, NASDAQ:RIGS),
including Riggs' long-term counterparty rating, which was lowered
to 'B-' from 'B+'.  The ratings on Riggs' banking subsidiary,
Riggs Bank N.A., were also lowered.  At the same time, the long-
term counterparty credit ratings of both entities were placed on
CreditWatch Developing.

"The ratings downgrade reflects Standard & Poor's expectation that
Riggs' operating results will remain under severe pressure due to
ongoing and significant legal expenses," said Standard & Poor's
credit analyst Michael Driscoll.  "Additionally, Standard & Poor's
is concerned that Riggs' exit from its core embassy business is
having an adverse impact on its funding profile."

The CreditWatch Developing hinges on the outcome of the proposed
merger with PNC Financial Services Group, which is scheduled to
close during first-quarter 2005.  Should the proposed merger be
completed in a timely manner, Riggs' ratings would be raised. If,
for whatever reason, the acquisition is voided, Riggs' ratings
could be lowered.  The extent of any ratings downgrade will depend
on Standard & Poor's assessment of Riggs' deteriorating operating
fundamentals, as well as the ongoing financial and business impact
of the bank's legal/regulatory issues.


RLI: Moody's Withdraws Ba1 Sub. Debt & Pref. Securities Ratings
---------------------------------------------------------------
Moody's Investors Service has withdrawn the provisional ratings on
RLI Corp.'s outstanding shelf registration.  Moody's A3 insurance
financial strength ratings on RLI's operating subsidiaries and
Baa3 rating on RLI's $100 million of 5.95% Senior Notes due 2013
remain outstanding.  The outlook for the ratings is stable.
Moody's has withdrawn the ratings on RLI's shelf registration for
business reasons.  Refer to Moody's Withdrawal Policy on
http://moodys.com/

These ratings have been withdrawn:

   * RLI Corp.

     -- provisional senior unsecured debt at (P)Baa3,
     -- provisional subordinated debt at (P)Ba1; and

   * RLI Capital Trust I

     -- provisional preferred securities at (P)Ba1.

Moody's insurance financial strength ratings are opinions of the
ability of insurance companies to repay punctually senior
policyholder claims and obligations.


SECOND CHANCE: U.S. Trustee Meeting With Creditors on November 18
-----------------------------------------------------------------
The United States Trustee for Region 9 will convene a meeting of
Second Chance Body Armor, Inc.'s creditors at 10:00 a.m., on
November 18, 2004, at the Office of the U.S. Trustee, Logan Place
West, 3249 Racquet Club Drive in Traverse City, Michigan.  This is
the first of creditors required under U.S.C. Sec 341(a) in all
bankruptcy cases.

All creditors are invited, but not required, to attend.  This
Meeting of Creditors offers the opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

Based in Central Lake, Michigan, Second Chance Body Armor, Inc. --
http://www.secondchance.com/-- manufactures wearable and soft
concealable body armor. The Company filed for chapter 11
protection on Oct. 17, 2004 (Bankr. W.D. Mich. Case No. 04-12515).
Stephen B. Grow, Esq., at Warner Norcross & Judd, LLP, represents
the Company in its restructuring.  The company estimates assets
and liabilities of $10 million to $50 million.


SENETEK PLC: Gets $1.76M Settlement from U.S. Int'l. Trading Corp.
------------------------------------------------------------------
Senetek PLC (OTC Bulletin Board: SNTK), a healthcare technologies
company focused on developing and co-marketing products for the
anti-aging markets worldwide, has reached an agreement to
restructure a defaulted $2.3 million, six-year amortizing note of
U.S. International Trading Corporation, under which only $188,000
had been paid through July 2004, all allocated to interest income.

Under the terms of the restructuring, Senetek has received
$240,000 since August 1, 2004, and will receive additional
payments totaling $1,120,000 before the end of 2004. Senetek has
also received a $400,000, two and one half year, secured
amortizing note bearing interest at 8% per annum. Under the terms
of the agreement, if USITC fails to pay any of the $1,120,000 due
in 2004 or misses any quarterly payment under the new $400,000
note, all of its obligations under the original $2.3 million note
will be reinstated and subject to acceleration for non-
performance.

The original note had been issued as part of the price for U.S.
International Trading Corporation's purchase of trademarks
acquired by Senetek in 1995, which had been carried on Senetek's
balance sheet at no value. Since collection of the original note
had been uncertain, no amounts had been taken into income pending
payment and all payments received by Senetek will be recorded as
interest income or gain from discontinued operations in the period
received.

Frank J. Massino, Chairman and Chief Executive Officer of Senetek
PLC, commented, "We are gratified that this situation has been
resolved. This restructuring will generate $1,360,000 of cash in
2004, further strengthening Senetek's balance sheet for investment
in building the business, and all of this cash will drop to our
bottom line in 2004 as gain on the transaction, as will payments
on the $400,000 promissory note in 2005 through 2007."

Senetek PLC -- http://www.senetekplc.com/-- is a science-driven
biopharmaceutical company engaged in developing and marketing its
own products related to aging.

At Sept. 30, 2004, the Company's balance sheet showed a $1,658,000
stockholders' deficit, compared to a $2,929,000 deficit at
Dec. 31, 2003.


SI CORPORATION: Moody's Withdraws Junk Ratings
----------------------------------------------
Moody's Investors Service withdrew all ratings of SI Corporation
because of the company's decision not to proceed with a publicly
rated transaction.

These ratings were withdrawn:

   * Proposed $230 million issue of senior secured notes due 2012,
     rated Caa1;

   * Senior Implied Rating of Caa1;

   * Senior Unsecured Issuer Rating of Caa2;

   * Speculative Grade Liquidity Rating of SGL-3;

   * Stable Outlook.

SI Corporation, based in Chattanooga, Tennessee, is one of the
largest North American manufacturers and marketers of synthetic
fabrics and fibers that provide support, strength and
stabilization solutions for the furnishings (69% of sales) and
construction materials markets (31% of last twelve months ended
June 27, 2004).  The company is a wholly owned subsidiary of SIND
Holdings, Inc., which is controlled by Investcorp.


SIX FLAGS: High Debt Burden Cues Moody's to Junk Unsecured Debt
---------------------------------------------------------------
Moody's Investors Service downgraded Six Flags, Inc.'s senior
unsecured debt to Caa1 from B3, its preferred stock to Caa2 from
Caa1, and Six Flags Theme Parks Inc.'s secured bank credit
facilities to B1 from Ba3.  The company's SGL-2 liquidity rating
was affirmed.  The senior implied rating was also lowered to B2
from B1, and the senior unsecured issuer rating was lowered to
Caa1 from B3.  All ratings and rating actions are outlined below.
The rating outlook remains negative.

Moody's took these rating actions:

   * Lowered $1.5 billion of Six Flags, Inc. senior unsecured
     notes to Caa1;

   * Lowered $282 million (redemption value) of Six Flags, Inc.
     preferred securities -- PIERS -- to Caa2;

   * Lowered $1 billion of Six Flags Theme Parks Inc. secured bank
     facilities to B1;

   * Lowered the senior implied rating to B2;

   * Lowered the senior unsecured issuer rating to Caa1;

   * Affirmed the SGL-2 liquidity rating.

The downgrade reflects Moody's ongoing concern over the company's
weak free cash flow characteristics and high debt burden.  Moody's
believes the company will have a very limited ability to reduce
debt with free cash flow from operations over the next 2 years due
to potentially volatile operating performance, an increase in
capital expenditures, high interest expense, cash dividends on
preferred securities and partnership distributions.  Operating
results have underperformed Moody's expectations for several years
due to factors that include poor weather patterns, economic
malaise, national security concerns, and pricing, promotion and,
marketing mistakes.  Moody's believes that despite a significant
increase in capital spending for the 2005 operating season, the
company could continue to experience volatile operating
performance due to unpredictable economic conditions and the
fragmentation of consumer leisure habits and its corresponding
effect on attendance levels, which declined 4.5% in the first nine
months of 2004 over the comparable period of 2003.

Six Flags' leadership position in the regional theme park
industry, high barriers to entry, and the benefits of geographic
diversity continue to support the company's ratings.

Moody's believes that in a liquidation scenario, while asset
values provide bank debt holders ample coverage, bondholders have
minimal cushion. Aside from cash balances, the company's assets
are relatively illiquid as there are only a small handful of
logical buyers for its park properties.  Buyers might include
Busch Gardens and Cedar Fair, who bought the recently sold Ohio
amusement park, as well as possible financial players.

Moody's affirmed Six Flags, Inc.'s SGL-2 liquidity rating, which
is supported by the company's strong cash position and adequate
borrowing cushion under the covenants of its bank facilities for
working capital needs in the first and second quarters.  Aside
from modest amortization payments, its first significant maturity
does not occur until 2009.  In 2005, Moody's forecasts that the
company's gross cash flow will be insufficient to finance
increased extraordinary capital expenditures of approximately
$130 million, working capital and fixed charge needs.
Consequently, in 2005 the company will need to utilize a
significant portion of the more than $175 million in cash that was
on the balance sheet as of September 30, 2004.  Moody's expects
the company will remain inside the financial covenants of the Six
Flags Theme Parks credit facility, since it recently entered into
an amendment that relaxed the financial leverage ratio through
2006 and the fixed charge ratio through 2007. Six Flags' assets
are substantially committed to its bank lenders, somewhat limiting
its alternate liquidity options.  To meet modest cash shortfalls,
the company could defer a portion of its upgrade capital
expenditures, which are expected to increase in 2005.  However,
Moody's believes that the larger amount of capital investment is
an extremely important component of management's strategy to
reverse attendance declines and increase attendance levels in the
long term.

The negative outlook reflects Moody's concern that Six Flags'
increased capital expenditures for the 2005 operating season might
not result in improved operating performance, with no
corresponding improvement in free cash flow generation in 2006,
given that the company still remains exposed to many of the risk
factors that diminished operating results in the past.  Moody's
believes the rating could be downgraded if the operating
underperformance of recent years is not reversed, cash flow
breakeven is not achieved, and Moody's no longer expects that key
credit metrics will improve over the intermediate-term rating
horizon (specifically, that by the end of the 3rd quarter of 2006
fully-loaded financial leverage will be below 8.0x total adjusted
debt (including preferred stock)-to-EBITDAR and EBITDA-to-interest
is covered at least 1.7x).  Conversely, the outlook would revert
to stable if by that time the company achieves strong operating
results, including positive free cash flow, and reduces financial
leverage below 8.0x and interest coverage to 1.7x.

In fiscal 2004, Moody's expects that Six Flags' financial leverage
will be very high at 9.5x and EBITDA interest coverage will be
extremely modest at approximately 1.3x, however would be more than
1.4x on a full-year, pro forma basis when taking into
consideration the $260 million in debt reduction, resulting from
the proceeds of asset sales, that has occurred since the end of
the 1st quarter.  While there is some room for EBITDA margin
improvement, Moody's does not expect it to return to the
historical 35% levels given the company's needs to increase
expenditures on improved services in order to improve the customer
experience.

Six Flags Theme Parks' B1 senior secured debt, which currently
comprises approximately 27% of total debt and preferred stock,
benefits from ample collateral security and structural advantages,
whereas Six Flags, Inc.'s Caa1 senior unsecured holding company
notes remain contractually and structurally disadvantaged to the
bank facilities, and thereby in a much more risky position from a
relative recovery perspective in a downside scenario, as reflected
in the Caa ratings.

Six Flags, Inc., headquartered in Oklahoma City, Oklahoma, is the
world's largest regional theme park company.


SOLUTIA INC: Has Until March 11 to Remove State Court Actions
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extended the period within which Solutia, Inc., and its debtor-
affiliates can 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 believed 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.

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


SOVEREIGN SPECIALTY: Moody's Reviewing Ratings & May Upgrade
------------------------------------------------------------
Moody's Investors Service placed the ratings of Sovereign
Specialty Chemicals, Inc.'s under review for possible upgrade due
to the pending acquisition of Sovereign by Henkel Corporation for
approximately $575 million.  This transaction is expected to close
by year-end 2004.

Ratings placed under review for possible upgrade:

   * Sovereign Specialty Chemicals, Inc.

     -- Guaranteed Senior Secured Revolving Credit Facility: B1
     -- Guaranteed Senior Secured Term Loan A: B1
     -- Guaranteed Senior Secured Term Loan B: B1
     -- Senior Subordinated Notes: Caa1
     -- Senior Implied: B2
     -- Issuer Rating: B3

The senior subordinated notes have a change of control provision
however the notes are not likely to be tendered as they are
currently trading above this level.  The notes can be called in
March of 2005 at a price of 105.94.

Sovereign portfolio of niche adhesives and coatings will be
complementary to Henkel's existing portfolio of products and
likely provide a reasonable level of synergies over time.

Sovereign Specialty Chemicals, Inc., headquartered in Chicago,
Illinois, produces adhesives, sealants and coatings primarily for
the commercial and construction markets.  Revenues were roughly
$400 million for the LTM ended September 30, 2004.


STANDARD COMMERCIAL: Merger Plans Prompt Moody's to Review Ratings
------------------------------------------------------------------
Moody's Investors Service placed the ratings of Standard
Commercial Corporation and Dimon Incorporated under review with
direction uncertain, following the announcement by the two
companies of a definitive merger agreement.  The transaction
remains subject to shareholders and regulatory approvals.

Ratings placed under review with direction uncertain:

   * Standard Commercial Corporation

     -- Senior implied, at Ba3
     -- Senior unsecured, at Ba3
     -- Issuer rating, at B1

   * Standard Commercial Tobacco Company

     -- Bank Credit facility, at Ba3

   * Dimon Incorporated

     -- Senior guaranteed unsecured, at B1
     -- Issuer rating, at B2

Dimon and Standard Commercial have announced their intent to
merge.  Under the terms of the agreement, Standard Commercial
common shareholders would receive three shares of Dimon common
stock per each share of Standard Commercial common stock, making
Dimon the surviving entity.  The merged company should have
proforma annual revenue of approximately $1.9 billion, based on
combined results for the twelve months ended June 30, 2004.

The direction of the review reflects uncertainty on the final
level of the senior implied rating of the new entity at conclusion
of the review.  Moody's does not believe that it has sufficient
information at this stage to determine a higher likelihood for a
Ba3 senior implied rating than for a B1.  The direction of the
review also reflects uncertainty about the ultimate structure of
the new company, whether this new structure will create structural
subordination of some debt, and whether -- as Dimon has indicated
it might be a possibility -- Dimon's debt will be tendered.

Moody's views an upgrade of Dimon's senior implied rating to Ba2
at conclusion of the review highly unlikely in view of the
difficult environment in which all industry players operate, as
evidenced by weak metrics for both companies in recent quarters.
At the end of the last twelve months ended June 30, 2004, Dimon's
retained cash flow to debt was at 2.2%; Standard Commercial's was
at 11%.

In its review, Moody's will focus on these factors:

   -- Final structure of the new company post-merger and impact on
      the seniority status of each category of debt

   -- Cost saving benefits expected from the merger.

   -- Expected gains or losses of clients for Dimon due to the
      merger.

   -- Expected evolution of the fundamentals of the leaf trading
      industry.

              About Standard Commercial Corporation

Headquartered in Wilson, North Carolina, Standard Commercial
Corporation is the world's third-largest dealer of leaf tobacco
with operations in more than 30 countries.

                    About Dimon Incorporated

Headquartered in Danville, Virginia, Dimon Incorporated is the
world's second largest dealer of leaf tobacco with operations in
more than 30 countries.


STELCO INC: Inks New $900 Million Financing with Deutsche Bank
--------------------------------------------------------------
Stelco, Inc.'s (TSX:STE) Board of Directors unanimously approved a
term sheet with Deutsche Bank Securities, Inc., and Deutsche Bank
AG. The term sheet provides for a recapitalization of Stelco,
Inc., involving a financing of $900,000,000. The financing
includes an asset-based loan facility co-underwritten by Deutsche
Bank AG and CIT Business Credit Canada, for which Deutsche Bank
Securities will act as Lead Arranger, and a purchase commitment by
Deutsche Bank Securities of Stelco, Inc., convertible notes and
bridge notes.

The terms of the financing do not include any requirement for
wage, benefit or pension concessions from any of the Company's
union locals, other employees or retirees. The compensation of
current employees and related benefits together with pension
benefits and post-retirement benefits will not be reduced under
the financing.

Based on discussions with General Motors, Stelco believes that it
will receive General Motors' support for the financing. General
Motors' support will mean significant General Motors business for
at least the last three quarters of 2005. Detailed contract
discussions are now underway with General Motors.

The arrangements with Deutsche Bank flow from the court approved
process dated Oct. 19, 2004, further to which Stelco was
authorized to receive proposals from its bondholders of which
Deutsche Bank is one. Consistent with this process and the related
court order, the Company may now move forward with its capital
raising process which will include soliciting other capital
raising opportunities with the reasonable assurance that it can
emerge from creditor protection.

Proceeds from the financing will be used among other things to
underwrite the capital costs associated with the Company's
strategic capital expenditure program which is an important part
of its previously announced four point strategy for the future.
Stelco, Inc., will retire its existing operating credit line with
the new facilities and will proceed with its previously announced
sales of various businesses. Existing shareholders will receive
warrants exchangeable into a modest portion of the new equity of
Stelco Inc. created upon emergence from court protection with such
warrants being exercisable at a premium to the market value of the
new equity shares of Stelco at the time of emergence from court
protection.

Details of the financing will be provided along with materials
expected to be filed with the Ontario Superior Court of Justice
early in the week. The approval of the Board of Directors was
given subject to court approval of the term sheet and related
commitment letters.

A number of significant conditions govern the Company's ability to
draw on the package of credit facilities including a new
collective agreement with the United Steelworkers of America Local
8782 on terms substantially the same as the existing collective
agreement. Other conditions apply to accessing the facilities
including the absence of any material adverse change pending
closing and various other tests applicable to the financial
condition of the Company.

Courtney Pratt, Stelco President and Chief Executive Officer,
said, "This transaction will benefit the Company and its
stakeholders in a number of ways. It would assist us in exiting
our Court-supervised restructuring, preserve the income of our
employees and the pension and other benefits of our retirees, and
provide significant assurance to General Motors. We are encouraged
by General Motors' preliminary positive reaction to this
financing. We will continue to seek a collective agreement with
Local 8782 so that we can meet one of the key conditions of
Deutsche Bank and provide the assurance GM requires in order to
continue our important relationship."

Hap Stephen, the Company's Chief Restructuring Officer, said, "The
recapitalization proposal from Deutsche Bank gives Stelco the
financing it needs to emerge from CCAA protection with an improved
balance sheet and the necessary capital to move ahead with its
critical capital expenditure program. Creditors will receive
significant recoveries in cash and new equity shares. Our focus
now will be to move ahead with the capital raising process in
earnest which will include actively soliciting other proposals."

                        About Deutsche Bank

With roughly Euro 845 billion in assets and approximately 65,400
employees, Deutsche Bank (NYSE: DB) --
http://www.deutsche-bank.com/-- offers unparalleled financial
services in 74 countries throughout the world. Deutsche Bank
competes to be the leading global provider of financial solutions
for demanding clients creating exceptional value for its
shareholders and people. Deutsche Bank ranks among the global
leaders in corporate banking and securities, transaction banking,
asset management, and private wealth management, and has a
significant private & business banking franchise in Germany and
other selected countries in Continental Europe. Deutsche Bank
Securities Inc. is the investment banking and securities arm of
Deutsche Bank AG in the United States.

                           About Stelco

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


TRICO MARINE: Solicits Consents for Pre-Packaged Chapter 11
-----------------------------------------------------------
Trico Marine Services, Inc. (Nasdaq: TMAR) has commenced the
formal process of soliciting approvals for a consensual financial
restructuring of the Company from holders of the Company's
$250 million 8-7/8% senior notes due 2012.

If the Company receives the expected approvals from sufficient
holders of the Senior Notes, it will implement the financial
restructuring through a voluntary, pre-packaged bankruptcy
proceeding under Chapter 11 of the bankruptcy code. The Company
expects to commence its pre-packaged bankruptcy case in mid-
December, with an objective of consummating the restructuring in
late January or early February of 2005.

Trico also reported that, in connection with the restructuring,
the Company's current U.S. senior secured lenders have committed
to provide a $75 million debtor-in-possession financing facility,
comprised of:

   -- a $55 million term loan, which will be used to pay all of
      the outstanding indebtedness under the Company's existing
      U.S. secured term loan, and

   -- a new $20 million revolving credit facility.

Upon effectiveness of the restructuring, and the satisfaction of
certain conditions precedent, the facility will convert into a
$75 million exit financing facility, composed of a $55 million
term loan and a $20 million revolving credit facility, which will
provide the reorganized Company with liquidity for working capital
and other general corporate purposes.

The Company previously announced on Sept. 10, 2004, that holders
of more than 67% of the Company's Senior Notes executed a binding
Plan Support Agreement, pursuant to which those holders agreed to
approve the proposed restructuring. The supporting noteholders
represent a sufficient amount to implement the restructuring
through a voluntary pre-packaged plan of reorganization. The
agreement by the holders of the Senior Notes was subject to the
finalization of definitive agreements and related documentation
and the satisfaction of certain specified conditions.

Since that announcement, the Company has reached agreement with
the advisors to the supporting noteholders on the definitive terms
of a plan of reorganization and related documents. Based on the
extensive negotiation and coordination with, and input from, the
noteholders' advisors, the Company is of the opinion that the plan
of reorganization and all definitive agreements and related
documentation fully comply with the terms and conditions set forth
in the Plan Support Agreement, and that all conditions to
effectiveness set forth in the Plan Support Agreement have been
met. The advisors to the noteholder group have represented to the
Company and its advisors that they will convene a meeting with the
noteholder group, at which they will present the terms of the plan
of reorganization and all definitive documentation, and recommend
that the members of the noteholder group tender their votes to
accept the plan, pursuant to the terms of the Plan Support
Agreement.

As part of the plan of reorganization, the holders of the Senior
Notes will receive, in exchange for their total claims (including
principal and accrued and unpaid interest), 100% of the fully
diluted new common stock of reorganized Trico Marine Services,
Inc., before giving effect to:

     (i) the exercise of warrants to be distributed to the
         Company's existing holders of common stock pursuant to
         the plan; and

    (ii) a new employee option plan.

On the effective date of the plan of reorganization, the sole
equity interests in the reorganized Company will consist of the
new common stock issued to the holders of the Senior Notes, the
warrants, and options to be issued to employees. Copies of the
plan of reorganization, disclosure statement and related documents
will be available shortly at http://www.kccllc.net/trico/

The Company's obligations under existing operating leases, or
trade credit extended to the Company by its vendors and suppliers,
will be unaffected by the restructuring and will be paid in full.

Under the terms of the restructuring agreement, Thomas Fairley
will continue as TMAR's Chief Executive Officer and Trevor Turbidy
will continue as TMAR's Chief Financial Officer. Joseph
Compofelice will remain as TMAR's non-executive Chairman of the
Board of Directors.

The Company has fixed Nov. 5, 2004, as the voting record date for
the determination of holders of record of eligible claims entitled
to receive the solicitation package and vote on the plan of
reorganization. The voting deadline to accept or reject the plan
of reorganization is 5:00 p.m. Eastern Standard Time on Dec. 13,
2004, unless the solicitation is terminated early or extended by
the Company prior to the voting deadline. The Company reserves the
right to terminate the solicitation period early, including
without limitation, upon receipt of the requisite votes approving
the plan. In order to be counted, properly completed ballots must
be received by the solicitation agent by the voting deadline.

In connection with the proposed financial restructuring of the
Company, the Company has been represented by Lazard Freres & Co.
LLC as financial advisors and Kirkland & Ellis LLP as legal
advisors. The supporting noteholders have been represented by
Houlihan Lokey Howard & Zukin Capital, Inc., as financial advisors
and by Bingham McCutchen LLP as legal advisors.

                        About the Company

Trico provides a broad range of marine support services to the oil
and gas industry, primarily in the Gulf of Mexico, the North Sea,
Latin America, and West Africa. The services provided by the
Company's diversified fleet of vessels include the marine
transportation of drilling materials, supplies and crews, and
support for the construction, installation, maintenance and
removal of offshore facilities. Trico has principal offices in
Houma, Louisiana, and Houston, Texas. Please visit our Web site at
http://www.tricomarine.com/

                          *     *     *

As reported in the Troubled Company Reporter on Sept. 22, 2004,
Trico Marine Services, Inc., reported the issuance of a notice of
default and guarantee demand by Bear Stearns Corporate Lending,
Inc.  Bear Stearns is an administrative agent under the $55
million term loan issued by a group of bank lenders to Trico's two
primary domestic subsidiaries in February 2004. The Company is a
guarantor of its subsidiaries' obligations under certain
provisions of the Term Loan. Bear Stearns' notice of default and
guarantee demand was issued on the basis of an earlier default
arising from the Company's non-payment of interest due on its $250
million 8.875% Senior Notes due 2012 in June 2004.

As reported in the Troubled Company Reporter on August 19, 2004,
Trico Marine Services, Inc.'s independent registered public
accounting firm re-issued its report on the Company's financial
statements for the year ended December 31, 2003, with a going
concern explanatory paragraph in the Company's amendment to its
Form 10-K for the fiscal year ended December 31, 2003.

The Company originally filed its 2003 Form 10-K on March 15, 2004,
and filed the Form 10-K amendment on August 9, 2004, in order to
respond to comments received from the staff of the Securities and
Exchange Commission regarding the classification of indebtedness
under the Company's Norwegian revolving credit facility.

Due to the Company's 10-K amendment, the Company's independent
registered public accounting firm was required to reissue its 2003
audit report. During the second quarter of 2004, the Company
defaulted under its $250 million senior unsecured notes indenture
and, due to cross-default provisions, its $55 million secured term
loan facility. In the opinion of the Company's independent
registered public accounting firm, these events raised substantial
doubt about the Company's ability to continue as a going concern.


TRICO MARINE: Gets Second Delisting Notice from Nasdaq
------------------------------------------------------
Trico Marine Services, Inc. (Nasdaq: TMAR) received notice from
the NASDAQ Listing Qualifications Staff that the Company has not
maintained the minimum market value of publicly held shares of
$5 million as required for continued inclusion under Marketplace
Rule 4450(a)(2). If the Company cannot demonstrate compliance with
the minimum market value for publicly held shares requirement for
10 consecutive days before Feb. 1, 2005, the NASDAQ Listing
Qualifications Staff will provide written notice that the
Company's common stock will be delisted.

On June 14, 2004, the Company announced receipt of a previous
notice from the NASDAQ Listing Qualifications Staff that the
Company's common stock had closed below the minimum $1.00 per
share requirement for continued inclusion under Marketplace Rule
4450(a)(5). If the Company cannot demonstrate compliance with the
minimum bid price requirement rule or meet certain other
requirements on or before Dec. 6, 2004, the NASDAQ Listing
Qualifications Staff will provide written notice that the
Company's common stock will be delisted or moved to The NASDAQ
SmallCap Market. As of November 12, 2004, the Company has not
demonstrated compliance with the minimum bid price requirement,
and it is unlikely that the requirement will be met before Dec. 6,
2004.

The Company is currently evaluating its options with respect to
the NASDAQ notices in light of its previous announcement on
Sept. 10, 2004, that it had reached an agreement in principle with
more than 67% of the holders of its $250 million 8-7/8% senior
notes due 2012, pursuant to which the holders of the Senior Notes
have agreed to support a consensual financial restructuring of the
Company. As part of the proposed consensual financial
restructuring, it is anticipated that the Company would commence a
voluntary petition for reorganization under Chapter 11 of Title 11
of the United States Code. Under Marketplace Rule 4450(f), if a
company files a petition for reorganization under any section of
the Bankruptcy Code, NASDAQ may suspend or terminate the company's
securities "unless it is determined that the public interest and
the protection of investors would be served by continued
designation."

                        About the Company

Trico provides a broad range of marine support services to the oil
and gas industry, primarily in the Gulf of Mexico, the North Sea,
Latin America, and West Africa. The services provided by the
Company's diversified fleet of vessels include the marine
transportation of drilling materials, supplies and crews, and
support for the construction, installation, maintenance and
removal of offshore facilities. Trico has principal offices in
Houma, Louisiana, and Houston, Texas. Please visit our Web site at
http://www.tricomarine.com/

                          *     *     *

As reported in the Troubled Company Reporter on Sept. 22, 2004,
Trico Marine Services, Inc., reported the issuance of a notice of
default and guarantee demand by Bear Stearns Corporate Lending,
Inc.  Bear Stearns is an administrative agent under the $55
million term loan issued by a group of bank lenders to Trico's two
primary domestic subsidiaries in February 2004. The Company is a
guarantor of its subsidiaries' obligations under certain
provisions of the Term Loan. Bear Stearns' notice of default and
guarantee demand was issued on the basis of an earlier default
arising from the Company's non-payment of interest due on its $250
million 8.875% Senior Notes due 2012 in June 2004.

As reported in the Troubled Company Reporter on August 19, 2004,
Trico Marine Services, Inc.'s independent registered public
accounting firm re-issued its report on the Company's financial
statements for the year ended December 31, 2003, with a going
concern explanatory paragraph in the Company's amendment to its
Form 10-K for the fiscal year ended December 31, 2003.

The Company originally filed its 2003 Form 10-K on March 15, 2004,
and filed the Form 10-K amendment on August 9, 2004, in order to
respond to comments received from the staff of the Securities and
Exchange Commission regarding the classification of indebtedness
under the Company's Norwegian revolving credit facility.

Due to the Company's 10-K amendment, the Company's independent
registered public accounting firm was required to reissue its 2003
audit report. During the second quarter of 2004, the Company
defaulted under its $250 million senior unsecured notes indenture
and, due to cross-default provisions, its $55 million secured term
loan facility. In the opinion of the Company's independent
registered public accounting firm, these events raised substantial
doubt about the Company's ability to continue as a going concern.


US AIRWAYS: Court Bars Enforcement of Illinois Liquor Law
---------------------------------------------------------
In their normal business operations, US Airways, Inc., and its
debtor-affiliates sell liquor and other alcoholic beverages to
their passengers.  The Debtors buy alcoholic beverages from a
distributor based in Illinois.  Brian P. Leitch, Esq., at Arnold &
Porter, in Denver, Colorado, explains that Section 6.5 of the
Illinois Liquor Control Act prohibits Illinois liquor licensees,
which are 30 days or more delinquent on payments to their vendors,
from purchasing alcoholic liquors.

The Illinois Liquor Contract Commission will not allow Illinois
distributors to sell alcoholic beverages to the Debtors unless the
Court stays enforcement of this state law restriction.  The Liquor
Contract Commission says that the Illinois Liquor Control Act is
not preempted by the Bankruptcy Code, because the Twenty-First
Amendment to the U.S. Constitution grants the states control over
the sale of liquor.

However, the Commission is willing to work with the Debtors and
agrees that the Court should stay enforcement of Section 6.5 of
the Illinois Liquor Control Act.

Mr. Leitch asserts that the Court has jurisdiction to enter a stay
order as the Bankruptcy Code preempts the Illinois Liquor Control
Act.  If no action is taken, the Debtors will purchase alcoholic
beverages outside of Illinois for distribution at their own
expense, a costly practice.  Mr. Leitch insists that the Debtors'
request is necessary to secure the performance of the Debtors'
primary liquor vendor.

Judge Mitchell agrees with the rationale and suspends the
enforcement of Section 6.5 during the pendency of the Debtors'
cases.

Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:

         * US Airways, Inc.,
         * Allegheny Airlines, Inc.,
         * Piedmont Airlines, Inc.,
         * PSA Airlines, Inc.,
         * MidAtlantic Airways, Inc.,
         * US Airways Leasing and Sales, Inc.,
         * Material Services Company, Inc., and
         * Airways Assurance Limited, LLC.

Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).  Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts.  In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue
No. 68; Bankruptcy Creditors' Service, Inc., 215/945-7000)


US AIRWAYS: Teamsters Want to Conduct Rule 2004 Examination
-----------------------------------------------------------
Pursuant to Rule 2004 of the Federal Rules of Bankruptcy
Procedure and Rule 2004-1 of the Local Bankruptcy Rules for the
U.S. Bankruptcy Court for the Eastern District of Virginia, the
International Brotherhood of Teamsters asks Judge Stephen Mitchell
to compel Debtors US Airways, Inc., and Piedmont Airlines, Inc.,
to produce documents, as requested in a subpoena duces tecum.

The Teamsters also wants Piedmont Airlines to submit to
examination.

William R. Wilder, Esq., at Baptiste & Wilder, in Washington,
D.C., says the requested examination and documents relate to "the
acts, conduct, or property or to the liabilities and financial
condition" of the Debtors as well as to matters "which may affect
the administration of the Debtor['s] estate[s]."

The Union wants US Airways CEO Bruce R. Lakefield to produce and
permit inspection and copying of all documents:

  (1) provided to US Airways by America West Airlines concerning
      rates of pay, rules and working conditions for America West
      customer service representatives; and

  (2) containing information provided to US Airways by America
      West Airlines concerning rates of pay, rules and working
      conditions for America West customer service
      representatives.

The Union also wants Keith Houk, President and CEO of Piedmont
Airlines, to appear and testify at an examination to be conducted
at 2000 N. 14th Street, #210, in Arlington, Virginia, today,
November 15, 2004, at 10:00 a.m.  The Teamsters also seek
production of all documents concerning:

  (1) the hiring and recall of mechanics and related employees of
      Piedmont Airlines from January 2004 to the present;

  (2) the furlough of mechanics and related employees of Piedmont
      Airlines from January 2004 to the present;

  (3) the transfer of aircraft maintenance work between stations
      of Piedmont Airlines, the subcontracting of any aircraft
      maintenance work, and the closure of any stations in the
      Piedmont Airlines system from January 2004 to the present;

  (4) the transfer of aircraft from the former Allegheny Airlines
      to Piedmont Airlines; and

  (5) the return of aircraft to lessors by Piedmont Airlines.

Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:

      * US Airways, Inc.,
      * Allegheny Airlines, Inc.,
      * Piedmont Airlines, Inc.,
      * PSA Airlines, Inc.,
      * MidAtlantic Airways, Inc.,
      * US Airways Leasing and Sales, Inc.,
      * Material Services Company, Inc., and
      * Airways Assurance Limited, LLC.

Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).  Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts.  In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue
No. 71; Bankruptcy Creditors' Service, Inc., 215/945-7000)


US AIRWAYS: Seeks to Reject Labor Pacts to Continue Restructuring
-----------------------------------------------------------------
US Airways Group, Inc., has filed a comprehensive motion with the
U.S. Bankruptcy Court for the Eastern District of Virginia to:

   -- initiate proceedings for rejection of collective bargaining
      agreements with the:

         -- Association of Flight Attendants,

         -- Communications Workers of America, and

         -- International Association of Machinists and Aerospace
            Workers, and

   -- reduce retiree health benefits and terminate the
      remaining defined benefit pension plans for US Airways
      mainline employees.

US Airways President and Chief Executive Officer Bruce R.
Lakefield said the filing does not preclude the company from
obtaining consensual agreements with the three unions and other
interested parties. US Airways is in various stages of
negotiations with the AFA, CWA and IAM, and has already reached
cost-savings agreements with the Air Line Pilots Association and
the three units of the Transport Workers Union, all of which have
also been approved by the Bankruptcy Court. "Our overwhelming
preference is that we continue to negotiate and reach agreements
with all of our unions. We would also like to avoid litigation
concerning our retiree and pension benefits, but in light of the
financial issues facing the company early in 2005, this filing is
an unfortunate but necessary step to keep our restructuring on
track and allow us to implement permanent cost reductions
quickly," said Mr. Lakefield.

On Oct. 15, Judge Stephen S. Mitchell granted US Airways emergency
relief in the form of 21 percent pay cuts, reduction in pension
plan contributions and the temporary relaxation of other
contractual provisions as they relate to the AFA, CWA and IAM.
Under the procedural rules established for the company's Chapter
11 restructuring, issues can be heard before the court on 20 days
notice. The Bankruptcy Court has scheduled the proceedings on the
application to begin on Thursday, Dec. 2, 2004, at 9:30 a.m.

"We continue to implement those elements of our Transformation
Plan that we can control, including new operating and scheduling
efficiencies, reduced management headcount and related costs, and
more direct and online distribution, but we still need to obtain
the permanent relief to labor, pension and benefit costs," said
Lakefield. "Our financial partners have made it very clear that we
cannot expect their support and continued participation in our
restructuring without a competitive cost structure, and
competitive labor, pension and benefit costs are critical
components of the cost structure at every successful airline. Our
negotiating position is that we are seeking costs that are
consistent with those at low-cost carriers that have now become
the defining force in the marketplace."

The court filing seeks relief for the company in three areas:

    * Rejection of the collective bargaining agreements for the
      airline's flight attendants (represented by the AFA),
      airport customer service and reservations agents
      (represented by the CWA), and mechanics, airport ramp
      workers, aircraft cleaners, stock clerks and maintenance
      training specialists (represented by the IAM).  If the
      request for rejection is granted by the court, the company
      would then put in place its most recent offer and both
      parties would still be obligated to continue to negotiate a
      new agreement under the terms of the Railway Labor Act.

    * Substantial reductions or elimination of company-paid
      retiree health benefits for all employee groups, including
      management.

    * Termination of the defined benefit pension plans currently
      in place for employees represented by the AFA and the IAM
      mechanics and related employees.  In addition, the company
      would terminate the defined benefit plan frozen in the early
      1990s that covered employees in the management,
      administrative, airport customer service and reservations,
      ramp, crew scheduling, dispatch, flight crew training
      instructors and flight simulator engineers work groups.
      Following termination of the defined benefit plans, the
      company would then work with the Pension benefit Guaranty
      Corporation in the administration of plan assets and
      benefits.

      US Airways intends to only have defined contribution pension
      plans for all employees.

"We have not lost sight of the hardships that furloughs, lower pay
and reduced benefits will mean for our employees and retirees, but
we are faced with a series of difficult choices as we work to
restructure the company and try to save thousands of jobs of
veteran US Airways employees," said Mr. Lakefield. "We can
complete this process more quickly and with a much better outcome
for employees if we can reach labor agreements prior to going to
court on this motion. This filing represents a final request to
union leaders to work with us, and to convey to their members the
serious predicament our company faces."

         Flight Attendants Slam Abandonment of Labor Pacts

Flight attendants reacted with outrage to US Airways' motion to
abrogate its collective bargaining agreements with three of its
organized work groups, including the Association of Flight
Attendants-CWA.

"Management is moving to shred its contracts, while at the same
time claiming that it would prefer a consensual agreement with its
workers," said Perry Hayes, president of the AFA Master Executive
Council at US Airways. "This naked attempt at intimidation
demonstrates the company's contempt for its workers and for the
collective bargaining process."

US Airways' motion, filed in federal bankruptcy court in
Alexandria, Virginia, is a three-pronged attack on employees. It
seeks to:

    * Scrap its collective bargaining agreements under Section
      1113 of the U.S. Bankruptcy code,

    * Slash retiree health benefits under Section 1114; and

    * Terminate its defined benefit pension plans.

In addition to the AFA, work groups represented by the
Communications Workers of America and the International
Association of Machinists and Aerospace Workers have also been
targeted by the legal action.

"It remains our desire to reach an agreement that will ensure this
company's survival while protecting our members' rights," said Mr.
Hayes.

More than 46,000 flight attendants, including 5,200 at US Airways,
join together to form AFA, the world's largest flight attendant
union. AFA is part of the 700,000 member strong Communications
Workers of America, AFL-CIO. Visit us at http://www.afanet.org/

Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:

      * US Airways, Inc.,
      * Allegheny Airlines, Inc.,
      * Piedmont Airlines, Inc.,
      * PSA Airlines, Inc.,
      * MidAtlantic Airways, Inc.,
      * US Airways Leasing and Sales, Inc.,
      * Material Services Company, Inc., and
      * Airways Assurance Limited, LLC.

Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts. In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts.


US LEC: Court Approves StarNet Asset Acquisition
------------------------------------------------
US LEC Corp. (Nasdaq: CLEC), a telecommunications carrier serving
businesses and enterprise organizations throughout the Eastern
United States, will acquire the assets of StarNet, Inc., a
nationwide provider of dial-up Internet access and telephony
services to Internet Service Providers (ISPs). In a sale order
signed on Nov. 10, 2004, the United States Bankruptcy Court for
the Northern District of Illinois approved the purchase of
StarNet's assets, including its popular MegaPOP ISP service.

"We are pleased to add StarNet and its MegaPOP offering to our
data services portfolio, and we know that StarNet's customers will
immediately begin enjoying the stability and improvements that US
LEC provides," said Aaron Cowell, president and CEO for US LEC.
"As one of StarNet's largest vendors, we will leverage our
familiarity with their organization, in addition to our experience
assimilating Fastnet's data assets, to make this an ideal
integration opportunity. The resulting combination will raise the
quality of these Internet services to standards that competitors
will be hard pressed to meet."

Mr. Cowell continued, "The StarNet acquisition expands our
commitment to growing our data capabilities, and it strengthens US
LEC's business model. The transaction is expected to be almost
immediately accretive to US LEC's bottom line, adding nearly 400
new customers and more than seven million dollars in annual
revenue. We anticipate positive impacts on US LEC's revenue and
EBITDA results."

StarNet currently supplies its wholesale MegaPOP Internet service
to nearly 400 ISPs across the United States. With the acquisition
complete, US LEC will provide local dial-up Internet access across
one seamless network covering all 50 states, as well as assume
ownership and management of more than 50 StarNet Points of
Presence (POPs), StarNet's servers, equipment and Network
Operations Center (NOC) in Palatine, Ill. US LEC will retain the
majority of StarNet's current staff to ensure uninterrupted
technical and support operations.

"The StarNet team is excited to move forward in our relationship
with US LEC. StarNet has always strived for a high level of
customer satisfaction, and now we have the opportunity to show
customers what we can do with the support and commitment of US LEC
behind our network and MegaPOP services," said Russ Intravartolo,
the former CEO of StarNet, who will manage StarNet's nationwide
ISP service for US LEC. "Knowing US LEC's reputation as a leading
competitive carrier, it's easy to see that our current customers
will recognize an even greater commitment to excellence."

                           About US LEC

Based in Charlotte, NC, US LEC is a leading telecommunications
carrier providing integrated voice, data and Internet services to
medium and large businesses and enterprise organizations
throughout 15 Eastern states and the District of Columbia. US LEC
services include local and long distance calling services, Voice
over Internet Protocol (VoIP) service, advanced data services such
as Frame Relay, Multi-Link Frame Relay and ATM, dedicated and
dial-up Internet services, managed data solutions, data center
services and Web hosting. US LEC also provides selected voice
services in 27 additional states and selected data services
nationwide. For more information about US LEC, visit
http://www.uslec.com/

                          *     *     *

As reported in the Troubled Company Reporter on Sept. 17, 2004,
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating to Charlotte, North Carolina-based competitive local
exchange carrier US LEC Corp. The outlook is negative.

A 'B-' rating was assigned to the company's proposed $150 million
second-priority senior secured floating-rate notes due 2009 to be
issued under Rule 144A with registration rights. These notes are
rated at the same level as the corporate credit rating because a
potential priority obligation, in the form of a carve-out for a
maximum $10 million of first-priority lien debt under the
indenture for these notes, is nominal relative to asset value.
Proceeds from the notes will be used to refinance approximately
$120.4 million of bank debt and $6.8 million of subordinated notes
at face value. Pro forma for the refinancing, US LEC had total
debt of about $150 million ($160 million after adjusting for
operating leases) at June 30, 2004.

"Ratings primarily reflect concerns over the longer-term viability
of small CLECs like US LEC in light of the expected increase in
competitive pressure from more formidable rivals," said Standard &
Poor's credit analyst Michael Tsao. "As a result, we expect some
deterioration in currently modest leverage metrics." US LEC,
which has a "smart build" network comprising owned switches and
leased loops, focuses on providing voice, data, and Internet
services to mid- and large-size enterprises in 107 markets in
which either Verizon Communications, Inc., or BellSouth Corp.
operates as the incumbent local exchange carrier -- ILEC.


VANGUARD HEALTH: Reports $110.1 Million of Net Loss in 1st Qtr.
---------------------------------------------------------------
Vanguard Health Systems, Inc., reported results for the first
quarter ended Sept. 30, 2004.

On Sept. 23, 2004, affiliates of The Blackstone Group completed
the purchase of a majority of the equity interests in the Company
pursuant to a previously announced merger agreement. As a result
of the transaction, Vanguard has a new parent company, VHS
Holdings LLC, the equity of which, along with the equity of
Vanguard, is approximately 66% owned by Blackstone. Blackstone
financed its $494.9 million equity investment with cash. Morgan
Stanley Capital Partners rolled over $130.0 million of its
existing Vanguard shares for an approximate 17% equity interest.
Management and other investors purchased the remaining 17% equity
interest by contributing existing Vanguard shares and/or utilizing
cash proceeds from the merger.

Total revenues for the quarter ended Sept. 30, 2004, were
$493.7 million, an increase of $83.8 million or 20.4% from the
prior year quarter. Patient service revenues and health plan
premium revenues increased $63.3 million and $20.5 million,
respectively, from the prior year quarter.

For the quarter ended Sept. 30, 2004, the Company reported a loss
before income taxes of $161.0 million compared to income before
income taxes of $10.5 million during the prior year quarter. The
loss before income taxes resulted from costs directly attributable
to the Blackstone transaction, including stock compensation of
$96.7 million, debt extinguishment costs of $62.2 million and
merger expenses of $23.1 million. The net loss for the quarter
ended Sept. 30, 2004, was $110.1 million compared to net income of
$6.3 million during the prior year quarter. The costs directly
attributable to the Blackstone transaction resulted in the net
loss during the current year quarter.

Adjusted EBITDA was $52.0 million for the quarter ended Sept. 30,
2004, an increase of $17.7 million or 51.6% from the prior year
period. A reconciliation of Adjusted EBITDA to net income (loss)
as determined in accordance with generally accepted accounting
principles for the quarters ended Sept. 30, 2003, and 2004 is
included in the attached supplemental financial information.

The consolidated operating results for the quarter ended Sept. 30,
2004, reflect a 6.4% increase in discharges and a 9.5% increase in
hospital adjusted discharges compared to the prior year quarter.
These volume improvements are primarily a result of the Company's
service expansion strategies, continued volume growth at West
Valley Hospital in Phoenix and volume growth at a hospital in
Phoenix that reopened its emergency department during the prior
year quarter.

Cash flows from operating activities were $70.2 million for the
quarter ended Sept. 30, 2004, an increase of $69.8 million from
the prior year quarter. The significant increase was due to
improved operational performance during the current year quarter
combined with a decrease in working capital items of approximately
$28.6 million during the quarter. Cash used in investing
activities increased during the quarter ended Sept. 30, 2004, by
$44.9 million primarily due to the direct acquisition costs paid
in connection with the Blackstone transaction. Cash flows used in
financing activities were significantly affected by the equity and
debt transactions associated with the Blackstone transaction.

In addition to its equity investment, Blackstone funded the
purchase with a $475.0 million term loan under the Company's new
senior secured credit facilities and the issuance of $575.0
million of 9% senior subordinated notes and $216.0 million
aggregate principal amount at maturity ($124.7 million in gross
proceeds) of 11.25% senior discount notes. In connection with the
transactions, the Company repurchased substantially all of its
9.75% senior subordinated notes due 2011 and its 8.18%
subordinated convertible notes due 2013 and repaid the $300.0
million term loan outstanding under its previous senior secured
credit facilities. The Company has available approximately $223.0
million under its $250.0 revolving loan facility (after
outstanding letters of credit) and $325.0 million of additional
term loans which may be drawn for specified purposes during
periods ranging from five months to one year subsequent to the
Blackstone transaction.

As previously announced, on October 11, 2004, a subsidiary of
Vanguard signed a definitive agreement to acquire three hospitals
with a total of 768 licensed beds in Worcester, Massachusetts and
suburban Boston, Massachusetts from subsidiaries of Tenet
Healthcare Corporation. Vanguard will pay $100.3 million for the
property, plant and equipment and will acquire from the sellers or
build from operations net working capital for the hospitals of
approximately $26.4 million in the aggregate. The Company expects
the acquisition to close by December 31, 2004, subject to
regulatory approvals and certain other closing conditions.

"We are excited to begin our new partnership with Blackstone with
solid first quarter operating results," commented Charles N.
Martin, Jr., Chairman and Chief Executive Officer. "We remain
committed to our service expansion and quality of care
initiatives. Our new capital structure will provide us the
financial means to expand our presence in existing markets and
enter into other markets that fit our corporate strategy,
including our potential entrance into the Massachusetts market."

                        About the Company

At Sept. 30, 2004, Vanguard Health Systems, Inc., owned and
operated 16 acute care hospitals and complementary facilities and
services in Chicago, Illinois; Phoenix, Arizona; Orange County,
California and San Antonio, Texas. The Company's strategy is to
develop locally branded, comprehensive health care delivery
networks in urban markets. Vanguard will pursue acquisitions where
there are opportunities to partner with leading delivery systems
in new urban markets. Upon acquiring a facility or network of
facilities, Vanguard implements strategic and operational
improvement initiatives including expanding services,
strengthening relationships with physicians and managed care
organizations, recruiting new physicians and upgrading information
systems and other capital equipment. These strategies improve
quality and network coverage in a cost effective and accessible
manner for the communities it serves.

                          *     *     *

As reported in the Troubled Company Reporter on August 13, 2004,
Standard & Poor's Ratings Services assigned its 'B' rating and its
recovery rating of '3' to the proposed $1.05 billion senior
secured bank credit facility of Vanguard Health Holding Co. II LLC
and Vanguard Holding Co. II, Inc. -- the co-borrowers. The
facility is due in 2011. Vanguard Holding Co. II, Inc., is a newly
formed wholly owned subsidiary of Vanguard Health Holding Co. II
LLC. The latter, in turn, is a newly formed wholly owned
subsidiary of a new holding company that will be 100% owned by
Vanguard Health Systems, Inc.

The new facility is rated the same as Vanguard Health Systems,
Inc.'s corporate credit rating; this and the '3' recovery rating
mean that lenders are unlikely to realize full recovery of
principal in the event of a bankruptcy, though meaningful recovery
is likely (50%-80%).

At the same time, Standard & Poor's assigned its 'CCC+' rating to
$560 million in senior subordinated notes due 2014 that are
obligations of the same co-borrowers as the bank credit
facilities. A 'CCC+' rating has been assigned to $140 million in
senior discount notes due 2015, issued by Vanguard Health Holding
Co. I LLC and Vanguard Holding Co. I Inc. -- the co-borrowers.

Standard & Poor's also lowered its corporate credit rating on
hospital operator Vanguard Health Systems Inc. to 'B' from 'B+'
and removed it from CreditWatch where it was placed on July 26,
2004. The CreditWatch listing followed the announcement that The
Blackstone Group, a private equity firm, would acquire Vanguard
Health Systems in a transaction estimated to be about $1.75
billion. As of June 30, 2004, Vanguard's total debt outstanding
was $623 million. However, pro forma for the transaction, the debt
will increase to approximately $1.2 billion. The outlook is
stable.

Upon completion of the Blackstone buyout, the ratings on Vanguard
Health Systems' existing senior secured credit facility and
subordinated notes will be withdrawn.

"The downgrade reflects the significant increase in Vanguard's
debt leverage pro forma for the Blackstone transaction and
Standard & Poor's concern that the company's aggressive business
policies will prevent it from soon earning a return consistent
with a higher level of credit quality," said Standard & Poor's
credit analyst David Peknay.


VESTA INSURANCE: Negative Events Prompt Fitch to Junk Ratings
-------------------------------------------------------------
Fitch Ratings downgraded the long-term issuer and debt ratings of
the Vesta Insurance Group to 'CCC' from 'B-'.  This action affects
approximately $55.7 million of Vesta's senior debentures.

Fitch also downgraded the insurer financial strength ratings of
VTA's property/casualty insurance subsidiaries to 'BB-' from 'BB'
and the capital securities rating of Vesta Capital Trust I to
'CCC-' from 'CCC'.

All ratings were placed on Rating Watch Negative.

The rating actions follow VTA's announcement of several events
including:

     * an adverse jury verdict in a reinsurance dispute with an
       estimated cost of $10 million to $15 million,

     * an increase in its estimate of third-quarter hurricane
       losses to $60.6 million; and

     * a cancellation of the planned sale of its life insurance
       subsidiary, American Founders Financial Corporation.

The sale of the life insurance subsidiary had been expected to
generate a gain for statutory accounting purposes.  Additionally,
Fitch had previously been anticipating net hurricane losses in a
range from $45 million to $55 million.

The losses recognized from these recent events will likely offset
the previously announced gain from the IPO of Vesta's nonstandard
auto insurance subsidiary, Affirmative Insurance Holdings, and the
$3 million gain on the resolution of another reinsurance dispute,
with Dorinco Reinsurance Company.

Fitch now expects that statutory surplus has declined moderately
in the third quarter of 2004.

Fitch understands that Vesta is developing a plan to improve the
statutory capitalization of its insurance subsidiaries and is
evaluating its alternatives related to its life insurance
business.

Key factors in resolving the Rating Watch will be Vesta's success
in its efforts to restore statutory capital and the economic
impact of its ultimate decision regarding the life insurance
subsidiary.

Vesta Insurance Group, Inc., headquartered in Birmingham, Alabama,
is a holding company for a group of insurance companies.

The following ratings are downgraded and placed on Rating Watch
Negative by Fitch:

   * Florida Select Insurance Co.

   * Hawaiian Ins. & Guaranty Co.

   * Shelby Casualty Insurance Co.

   * The Shelby Insurance Co.

   * Vesta Fire Insurance Corporation

   * Vesta Insurance Corporation

   * Texas Select Lloyds Insurance Co.

     -- Insurer financial strength downgraded to 'BB-' from 'BB'.

   * Vesta Insurance Group, Inc.

     -- Long-term issuer affirmed downgraded to 'CCC' from 'B-';

     -- Senior debentures 8.75% due July 15, 2025, downgraded to
        'CCC' from 'B-'.

   * Vesta Capital Trust I

     -- Deferrable capital securities 8.525% due Jan. 15, 2027,
        downgraded to 'CCC-' from 'CCC'.


VLASIC: Seven Experts Testify in $250M Campbell Spin-Off Suit
-------------------------------------------------------------
Vlasic Foods International, Inc., experts 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 Soup Company:

A. Robert C. Blattberg

    Professor Blattberg is a Polk Brothers Distinguished Professor
    of Retailing at the Kellogg School of Management, Northwestern
    University.

    Prof. Blattberg reviewed documents and testimony, interviewed
    VFI personnel, and looked at some road and trade information
    to evaluate the state of three major businesses for VFI --
    Vlasic Pickles, Swanson Frozen Foods and Open Pit Barbeque
    Sauce.  Prof. Blattberg was also asked to:

    -- assess shipments and consumer sales trends pre-spinoff and
       post-spinoff;

    -- describe the uses of trade promotion and trade promotion
       practices;

    -- analyze the degree and implications of product loading for
       Vlasic and Swanson;

    -- determine the retail environment faced in the U.S. pre-
       spinoff and post-spinoff; and

    -- assess the synergies and lack of synergies in VFI's
       businesses.

    During the two-hour examination, Prof. Blattberg was asked to
    explain several concepts, among them are:

    (1) Push and Pull Marketing of Consumer Package Goods Products

        What pull means is that the product is pulled through the
        channel of distribution by the consumer demanding it.
        Then the retail channel buys the product from the
        manufacturer.  Those are the manufacturer's shipments.  On
        the push side, the manufacturer pushes the product into
        the retail channel, and then wants the retail channel to
        push it to the consumer.

    (2) Brand Equity

        The concept of brand equity is the value that the firm
        places on -- the value that the consumer places on a brand
        above and beyond its product attributes.  What that means
        is that a product has specific attributes, a car has
        specific attributes.  The value above and beyond just the
        specific attributes is called brand equity.

        Brand equity allows the firm or hopefully generates
        preference by the consumer for that product above and
        beyond, again, the tangible attributes of the product.
        And then, in general, it can create higher margins for the
        firm, higher gross margins for the firm in terms of the
        price that they can charge to consumers.

        So when you have strong brand equity you can charge a
        higher price to the consumer and hopefully it translates
        to higher preference from a consumer.

        Brand equity is built through advertising, communicating
        the benefits of the product to the consumer, communicating
        the attributes of the product to the consumer, it's done
        through the product quality.

        A brand is a promise.  You promise the consumer a certain
        quality level.  So delivering that quality level to the
        consumer is critical in maintaining and building brand
        equity.

        Then constantly modifying and updating your product to the
        consumer so that the products are now more current.

        Competition can affect brand equity because competitors
        may be introducing superior products in a category, and if
        their quality and attributes are superior to the existing
        brand, then what can happen is that, even though my brand
        may be staying constant, the equity is shifting to more
        brands, more updated brands in a category.

        Discounting can affect [brand equity] adversely.  There
        are some studies that show it.  There is some controversy
        associated with it.

        The basic principle is when you have brand equity, by
        promotion, the consumer develops what is called an
        attribution of why is this brand suddenly promoting.

        If the brand is being sold at 2.49 and somebody is running
        it at 99 cents, the consumer is asking him or herself the
        question, why is that brand discounted?  What is the
        explanation?  One explanation is the quality is
        deteriorating. The products are no longer popular.  So
        heavy promotions can degrade the consumer's equity.

        As you have more and more people using the product and
        finding out the quality isn't very good, they move away
        from buying that product and it is difficult to bring the
        brand equity back.

        If a brand's image is so degraded due to poor quality, you
        may be better off putting all your energy behind HungryMan
        and saying Swanson is a dying brand and we can't continue
        to support it, we won't get enough equity back.

    (3) Loading

        The trade promotions are the vehicle used to do the
        loading.  So the manufacturer offers a trade promotion.
        And that trade promotion causes the retailer to take
        certain actions, forward buy inventories on the basis of
        forward buying inventories, that's what we are calling
        loading.

    (4) Retailer Performance

        Retailers, when manufacturers run promotions, trade
        promotions, they often require certain performance.  The
        performance most required is the retailer will discount
        the product, so they will offer a lower price to the
        consumer than is the typical price.  They will put it in
        their feature ad or weekly ad, hopefully in a prominent
        location.  And then they will put it on a display in a key
        location in the store.  So that's called performance.  The
        manufacturer wants to have the retailer perform so that
        they get what is called pass-through or the benefit of the
        trade funds that they are using or offering.

    To make the calculation of the Swanson load through March of
    1998, Prof. Blattberg built a statistical model, which
    estimated for each month what the sales would be in a given
    month as a percentage of the year.  "So, for example in
    August, I might have an estimate that it represented 5% of the
    volume of the year.  I then took the total volume for the
    year.  Fiscal 1998, which is 26 million cases, approximately,
    I took the 26 million cases, multiplied it by the 5% that
    August represents, and obtain a number that number would be
    1.3 million cases, August is slightly higher than 5%."

    Then, Prof. Blattberg looked at what actually occurred.  "My
    model predicts 1.486 million cases.  What actually occurred
    was 1.877 million cases.  The difference is 391,000 cases.
    And then I did that for every month.  I calculated that
    difference.  The difference between my prorated, which is what
    it should have been, and the actual, which is what happened.
    I then cumulated the difference.  And that's what cumulative
    difference means.  A key number is 735,000 cases.  What that
    represents is the difference in what actually occurred in
    fiscal 1998 versus what I would have predicted would have
    occurred in fiscal 1998, assuming that there are 26 million
    cases sold.  The relevance of it is that because Swanson spent
    all their trade money in the first eight months of the year,
    they shifted the volumes that they would have sold in the last
    four months into the earlier periods.  That's what the 735,000
    cases represents.  It's the loading."

    For Vlasic Pickles, Prof. Blattberg's calculation generates
    540,000 cases.  "It is exactly the same methodology, just
    different data.  That assumes there was an additional loading
    going on because sales from prior periods were loaded, prior
    years."

    Prof. Blattberg notes that all the trade money that was
    supposed to be allocated for Campbell's sales force for the
    last 12 months was spent for the first eight months.  "So when
    they turned the business over to the brokers and said how much
    money do we have at the end of the year, the answer was none
    left."

    But Vlasic counsel John A. Lee, at Andrews & Kurth, LLP, in
    Houston, Texas, notes that Campbell's expert, John Best,
    opined that based on the records he reviewed, VFI had 19
    million in trade funds left to promote Swanson during the last
    four months of fiscal 1998.

    "I think Mr. Best, if I remember correctly, he took it from
    the Hyperion reports.  I think Mr. Best didn't understand that
    those weren't real numbers.  The way it worked was that they
    were planned promotional spending numbers on a per-case basis.
    So if I planned to sell a million cases, and I had $3 per
    case, then they put into that system $3 million, $3 times a
    million, it didn't mean that those numbers actually occurred.
    And so somehow, that was the method that they used in
    Hyperion.  It wasn't about real trade spending.  It was about
    planned, accrued trade spending," Prof. Blattberg says.

    Prof. Blattberg believes that loading was taking place in the
    Vlasic and Swanson business before closing at the spinoff.
    "All the documents keep showing it.  My estimates are very
    conservative.  Campbell's documents said, for Swanson, 1.8
    million cases, 755,000 or whatever the number was in the other
    document on Vlasic.  And that was in 1997. . . .  They are
    loading.  There is no doubt about it."

    Mr. Lee points out that Campbell has claimed that Swanson was
    a leading in its category.  "Did that persuade you that it had
    great growth prospects after the spinoff?"

    Prof. Blattberg says that the statement about leadership in
    the frozen category is deceptive because there isn't a leader.
    "I don't think they are the leader.  But they are potentially
    a leader in a subcategory, but not in a category as a whole.
    Prof. Blattberg adds that Swanson is positioned in segments
    that aren't growing, affecting its growth prospects.  The
    perception on Swanson's growth prospects after the spinoff
    poses all kinds of problems because the consumers' image of
    the Swanson brand is TV dinners, 1950s, serious problems, with
    respect to being a modern, updated brand when it is up against
    things like Healthy Choice, Marie Callender and brands like
    that.

    To judge the health of the brand, Prof. Blattberg says, he
    just can't focus on total marketing spending, that would be
    deceptive because a lot of the highest percentage of marketing
    spending is on trade promotion and trade promotions are the
    push vehicles aimed at getting lower prices at the retail
    level.  "If I want to build my brand, it's in consumer brand
    building, primarily advertising, so I don't want to look at
    the total; I want to look at the ones that drive brand equity,
    not just reduced price."

    Prof. Blattberg notes that Swanson is not introducing a lot of
    new products and a high percentage of their volume is coming
    from their existing products.  "It's going to have a huge
    impact [on the post-spin sales trend].  And in the frozen
    category, it was fueled by new products."

    Mr. Lee notes that Swanson experienced a margin in creep as
    described in its 1999 operating plan.

    According to Prof. Blattberg, margin creep is when the
    manufacturer keeps the price constant.  The retailer raises
    the price, even though the manufacturer is not raising the
    price.  So retailer's margin is actually growing.  "So, even
    though Swanson was wholly fixed, their price to the retailer,
    the price to the consumer was going up, the result is that,
    because prices is an important factor in the marketplace,
    they're becoming priced less and less competitive.

    Prof. Blattberg also admits that introducing a new product is
    difficult because eight out of 10 new products have less than
    $7.5 million in sales.  Moreover, only one out of six
    advertising campaigns actually pay off.  "I think it would
    take a long time [to reverse the Swanson sales trends]."  In
    Prof. Blattberg's opinion, it was not reasonable to assume at
    the time of the spinoff that VFI could stem or end the Swanson
    sales declines that were going on at the time.  "I think that
    those sales trends were going to continue.  They had a tired
    brand.  They had a number of factors that were working against
    them."

    Based on the actual shipments of Swanson products from
    September 1993 to December 1997 and taking into account
    seasonality, Prof. Blattberg calculated a post-spin sales
    trend of minus 4.19% per year.  "The data are trending down,
    has been trending down.  If you look at the documents, it says
    the base sales are dropping 9%.  We're having problems keeping
    incremental, et cetera, et cetera.  And all the evidence is
    that this is a declining business."  The odds that the true
    trend would be positive 4.6% or higher is virtually zero based
    on the statistical matter.

    Prof. Blattberg also projected Vlasic Pickles' post-spin sales
    trend as declining approximately 2.1%.  He observes that the
    Vlasic household penetration in the 10 years prior to the
    spinoff was declining 10%.  Household penetration is the
    percentage of households by the category at least once in a
    given year.  For example, in 1987, 79.6% of the households
    bought pickles, at least once, and it declined to 71.6%.  The
    units per buyer were also declining.

    At the time of the spinoff, Vlasic sales trending was
    declining 6% and minus 12% versus its operating plan.  The
    competitive environment included Mount Olive, which was a
    regional competitor that had a price advantage, and private
    label brands like Kroger or retailers like Kroger had their
    own private labels.  "They were all growing.  There was an
    enormous price spread between the Vlasic Pickles and these
    brands, and they were emerging," Prof. Blattberg says.
    "Private label is very important to retailers.  It's part of
    the reason consumers go to the store.  But equally or more
    importantly, they can make higher absolute margin on private
    label products."

    Because Campbell had spent the Vlasic trade fund and not set
    up the promotions for the summer season in 1998, before the
    spinoff, it resulted in additional problems for Vlasic during
    the post-spin period.  "For Vlasic, the problem became that
    during the key selling season, they couldn't promote because
    they had run out of money and that is when all their key
    competitors were promoting.  That has a lot of long-term
    implications in terms of allowing consumers to try competitive
    products because of the displays, features, et cetera," Prof.
    Blattberg says.

    Prof. Blattberg believes that Campbell milked Vlasic for
    earnings before the spinoff.  Milking, he explains, is a
    strategy where one is running the business for earnings.  "You
    do it through things like raising prices and so your margins
    are going up, you don't invest in new products, you don't
    invest in advertising.  You may increase your trade spending
    just to keep the product in distribution.  So milking is a way
    to harvest or generate cash out of a business."

    In effect, Prof. Blattberg says, the brand is not necessarily
    building equity.  "It makes it more difficult to introduce new
    products and makes it more difficult to advertise, factors you
    would use if you have a long-term growth building, brand
    growth-building strategy."

    Prof. Blattberg emphasizes that at the time of the spinoff, it
    would be very difficult for VFI to stem the sales decline.  "I
    think it very unlikely it would grow at 9.9%.  Statistically,
    virtually zero probability.  Actually, if you look it's
    declining at $1.1 million, which is about 6.18%.  It doesn't
    have any new products to introduce, except for Hamburger
    Stackers.  It's advertising, that's a risky investment.  I
    think it's virtually impossible to figure out how you are
    going to get a 10% increase in this brand post-spin."  Prof.
    Blattberg notes that after Stackers, Vlasic started to come
    down rather rapidly in terms of sales due to competition.

    Open Pit is the Midwest region barbeque sauce that was one of
    the businesses included in the spinoff.  According to Prof.
    Blattberg, both General Foods and Campbell had tried to turn
    Open Pit's sales decline around.  "Nobody turned it around."

    Based on historic shipments before the spinoff and taking into
    account seasonality, Prof. Blattberg calculated a minus 6.3%
    trend for Open Pit shipments after the spinoff.

    On the subject of synergies, Prof. Blattberg explains that the
    advantage of synergies is that one can lower costs or improve
    marketing, but the focal point would be on lowering costs.
    "So if I have synergies and I have the opportunity to take
    advantage of the same headquarters in one location, plant
    efficiencies, distribution efficiencies, customer
    efficiencies, it improves my construct."  But Prof. Blattberg
    notes that he was able to identify very minor distribution,
    market or sales synergies between the businesses Campbell
    assembled with VFI.

    Upon cross-examination, Richard P. McElroy, Esq., at Blank
    Rome, LLP, in Philadelphia, Pennsylvania, points out that
    Prof. Blattberg's statistical model did not include any factor
    for trade promotions, new product innovation, price movement,
    and competitive moves.  Mr. McElroy notes that Prof.
    Blattberg's trend analysis includes only three things -- is
    shipments, seasonality and passage of time.  Mr. McElroy
    relates that Prof. Blattberg assumed that:

    -- the historical pace of new product innovations would
       continue at the same rate after the spin as before the
       spin;

    -- the competitive structure of the markets would remain the
       same before and after the spin; and

    -- the seasonal patterns would be the same.

    Prof. Blattberg's model assumed that there would be no
    systematic changes in the way VFI was operated after the
    spinoff as it was before the spinoff.

    Mr. McElroy relates that one of the principal goals of the
    spin as confirmed by Mr. Bernstock's trial testimony was to
    shake up the Swanson and Vlasic businesses and run them in a
    way that hadn't been run prior to the spinoff.

    "The question is, can he execute on that?" Prof. Blattberg
    countered.

    Mr. McElroy reminds the Court that Prof. Blattberg contended
    that before the spinoff, the businesses were milked by
    Campbell.  "So your model assumes that after the spinoff, they
    will continue to milk their businesses?"

    "Well, I will assume that they are not going to invest
    significantly in advertising and some of the other factors
    that they have.  That would be the pattern to the trend,"
    Prof. Blattberg responds.

    Prof. Blattberg asserts that even if management increased the
    advertising, it doesn't necessarily mean it has an effect.
    "Management was expecting to increase it.  It did not."

    Mr. McElroy notes that the data, which formed the basis of
    Prof. Blattberg's consumption trend analysis, came from IRI.
    Mr. McElroy and Prof. Blattberg argued over the reliability of
    the data.

    Prof. Blattberg explains that the data has a lot of
    variability that is not disclosed in it.  He admits that he
    does not know the degree of reliability of the IRI data
    regarding consumption of Swanson products because IRI has to
    do two calculations.  "One calculation is they don't take a
    census, a 100% of the stores.  So they have to do a
    calculation to estimate the market.  The second is they have
    to apply coverage factors for retailers they don't include.  I
    have no idea what the degree of variability or accuracy that
    is."

    "So if the data is unreliable, which you don't know, your
    analysis is unreliable, is that right?" Mr. McElroy asked.

    Prof. Blattberg says that he didn't rely on the analysis.  "I
    provided shipment data.  I looked at all the other facts.
    This is just one analysis I put in my report."

    "According to [the] data, Swanson consumption trends are down.
    When you look at the documents, Swanson consumption trends are
    down.  These data show that Swanson consumption trends are
    down.  I don't know the degree of reliability of these data."

    Mr. McElroy pressed Prof. Blattberg if he would rely on the
    data.

    Prof. Blattberg explains that the data gives him a piece of
    information that Swanson consumption is declining.  "I look at
    additional factors to try to also ascertain are other factors
    implying that as well."  He adds that the data has some degree
    of reliability.  "I don't know the exact level of
    reliability."

    During Mr. Lee's redirect examination, Prof. Blattberg relates
    that the shipment regression was not dependent in any way on
    the IRI data.  He clarifies that when he referred to IRI data
    being unreliable, he was referring to data as he used in a
    different calculation.  "The shipments are real data," Prof.
    Blattberg asserts.

B. Peter Faber

    Mr. Faber is a partner at the law firm of McDermott Will &
    Emery, in New York City.  In his 41 years practicing tax law,
    Mr. Faber has advised clients who were contemplating or
    actively pursuing tax-free spinoff transactions on a number of
    occasions.

    Mr. Lee notes that Campbell valued Vlasic at $361 million in
    its April 1997 Project Sweet Pea work, PTX-174, and then used
    a $575 million valuation in its tax basis calculations at PTX-
    767.  Mr. Lee asked Mr. Faber about the impact on the tax
    basis calculation of using the $575 million value as set
    instead of the $371 million value.  Mr. Faber replied that it
    had the effect of increasing the basis by about $56 million.

    Mr. Lee recounts that Ralph Harris at Campbell testified that
    he came up with the $575 million valuation after about a one-
    hour sit-down with no written work product to retain behind
    evidence of calculation.  In effect, the value of the business
    was raised by 60% six months after an earlier valuation.  Mr.
    Faber comments that it's a very sharp increase to take place
    in a short period of time.  "I would have asked some pretty
    probing questions to determine whether the old valuation was
    wrong or whether events had occurred that might have led to an
    increase in value.  Frankly, if I didn't get good answers, I'd
    consider withdrawing from the representation."

    According to Mr. Faber, Campbell's spin planning documents
    suggest that perhaps there might have been increases in costs
    resulting from administrative expenses.  Section 355 of the
    Tax Code states that in order for a spinoff to be tax-free, it
    has to be motivated by a business, a corporate business
    purpose.  "That has to be the reason you undertake the
    transaction in the first place.  The fact that a benefit may
    result as an incidental consequence of the spinoff will not
    justify tax-free treatment and, in the context of [VFI's]
    case, if cost savings had, indeed, been the motivating, the
    impelling element that led to the company wanting to do a
    spinoff, that could justify tax-free treatment.  But if cost
    savings were an incidental by-product, a consequence of the
    spinoff and not a reason for doing it, that would not justify
    tax-free treatment."

    Mr. Faber asserts that the mere fact of the later failure of
    Vlasic by itself would not undermine the spinoff's
    qualification.  "That could result from unforeseen
    circumstances and so forth.  But if the causes that led, if
    the seeds that led to the failure of a plant at the time of
    the spinoff and if the parties knew about them, that could
    suggest that, again, that Vlasic was structured without a
    thought to its continuing viability and that could undermine
    the tax qualification of the spinoff."

    Mr. Faber relates that there are two possible points at which
    tax could be imposed, assuming that the spinoff is treated as
    not tax-free.  "When Campbell distributes the Vlasic stock to
    its shareholders, Campbell is treated as having sold that
    stock for its fair market value.  And if the fair market value
    is in the neighborhood of a billion dollars and that number
    has been, I've seen, from time to time, then Campbell's gain,
    you know, assuming a basis of 400 million or so, you end up
    with a tax on the gain of a couple of hundred million dollars,
    and when you add on interest and penalties, you end up in the
    neighborhood of, say, 350 million.  The second part of the
    transaction that would be taxable would be that the Campbell
    shareholders would be treated as having received a taxable
    dividend of the Vlasic stock and, again, if the parties are
    using a billion dollars as the estimated value of Vlasic
    stock, hence, a billion dollar dividend and the top individual
    rate at the time was around 40%, so you got 400 million of tax
    plus interest and somehow the two together get you about a
    billion."

    During cross-examination, Mr. Faber admitted that he has never
    given a formal opinion on a Section 355 spinoff.

C. Theodore Grossman

    Prof. Grossman is a Senior Lecturer of Information Technology,
    Management at Babson College and President of Applied
    Solutions, Inc., which is an IT consultant company.  Prof.
    Grossman was president of TRG Systems through the 1980s.  TRG
    Systems was a service bureau, outsourcer for major retailers,
    providing data processing services for all phases for both
    food and non-food retailers.  As expert witness, Prof.
    Grossman was asked to review:

    -- Did the terms of the transition services agreement comport
       to industry standards?  If not, did Campbell's know or
       should have known that it didn't conform or comport to
       industry standards?

    -- Could the fees paid by Vlasic to Campbell's under the TSA
       have been fully or partially avoided?

    -- Had Spinco or Vlasic had an IT system in place on March 30,
       1998?  What was the projectable cost and time able to
       develop tests and implement, conduct the necessary post-
       audit reviews for an IT system for Vlasic's domestic
       divisions?

    -- On March 30, 1998, at the Spinco, would the risks
       associated with the lack of an IT system at Vlasic and the
       terms of the TSA have impacted the fair market value of
       Spinco's assets?

    At the time of the spinoff, Prof. Grossman recounts, VFI had
    no IT systems and infrastructure.  VFI had no hardware, no
    software, no network, no computers, very few IT people, very
    few people centralized headquarters, user groups to implement
    any systems.  Most importantly, VFI had no systems that it
    could actually migrate from Campbell's that it could take to
    Vlasic.  While the TSA provided for a 12-month period, in
    effect, it was really only provided for a 10-month period
    because all the major service, all the major software which
    impacted the Customer Service Center had to be functional by
    January 31, 1999.

    Enterprise resource planning system is an integrated system
    which touches every part of the business, from raw materials
    through manufacturing, customer order entry, shipping,
    inventory control, accounts receivable, billing, general
    ledger, accounts payable, etc.  "You need to have the
    participation of all the managers and all the operating groups
    to be part of that implementation," Prof. Grossman says.
    Typically, he says, it will impact the financial performance
    of the company.  The company has to dedicate the best and the
    brightest to the project.  Among the risks identified in the
    KPMG proposal before the spinoff was the ability of the
    Campbell Soup Company to provide an adequate level of support
    for current operations, and most important, for the conversion
    to BPCS to meet the requirements of the project plan.

    Prof. Grossman also identified additional factors unique to
    VFI that made the installation particularly risky and
    difficult, which he calls VFI IT Co. Morbidity Factors.  "The
    fact that you had 12 plants.  You had multiple disparate
    product lines.  This is not like a company implementing an ERP
    system with one product line in one or two plants.  You have
    got 12 plants.  You have got four different product lines with
    four different sets of requirements.  You had multiple cost
    accounting methodologies.  You had poor infrastructure in the
    plants, which is they were not year 2000 compliant.  You had
    to upgrade the equipment in the plants.  There was no
    infrastructure in the farms.  There were no IT-qualified
    people in the farms.  There was no infrastructure in the
    headquarters.  There was no headquarters for that matter.  No
    IT staff in the beginning.  No staffing in the customer
    service center.  There were two people at the beginning.  The
    others weren't added until later.  The same thing, the
    business service center, you were trying to keep this company
    afloat while you were implementing the system.  And you really
    had poor Legacy data coming over from Campbell's.  And poor
    support under the TSA agreement from Campbell's."

    Data migration, Prof. Grossman says, is one of the most
    critical aspects of implementing an ERP.  "You have to move
    all your master files and all your history data from the old
    Legacy systems at Campbell's to the new ERP systems.
    Campbell's had old Legacy systems which were not documented
    well, where various people had institutional knowledge of
    where data elements were."

    One year was not a reasonable time to allow VFI -- a new
    business starting with no existing infrastructure, to complete
    the installation, Prof. Grossman says.  He notes that one of
    the most publicized examples was Hershey Foods, when it
    attempted to implement an ERP system which was scheduled to be
    a four-year implementation and Hershey tried to do it 30
    months and, as a result of that, Hershey missed the entire
    Halloween season.  Its earnings dropped 19% for that quarter.
    "What happens is you lose total control of your inventory,
    your accounts receivable, of your data.  You end up
    potentially misreporting to the SEC.  You end up with
    potential shareholder lawsuits.  And most importantly, you
    alienate customers.  And they are so hard to get back."

    Prof. Grossman asserts that the installation should have been
    a two-year process.

    Moreover, Prof. Grossman continues, VFI encountered several
    problems as a result of Campbell's inadequate performance
    under the TSA:

    -- a $3.5 million accounts receivable writeoff;

    -- a $1 million cash balance writeoff due to Campbell not
       reconciling the bank balance;

    -- over $1 million in underaccrual of payroll taxes;

    -- no raw materials purchasing reporting;

    -- inadequate assistance in translating and migrating data
       from the Campbell's systems; and

    -- loss of the critical trade spending data.

    In summary, Prof. Grossman says, a company typical of VFI's
    size, geography and product relies on its IT systems as being
    mission critical.  "Campbell's knew or should have known that
    it was virtually impossible for Vlasic to successfully
    implement all of its IT systems and infrastructure within the
    10 months to one year window.  The project was an unnecessary
    distraction for the company and the best and brightest at a
    time when Vlasic was creating a central headquarters staff and
    having to create its own functional business and getting out
    from under Campbell's umbrella.  Significant functional
    compromises were made in order to make the 10-month deadline.
    Many of the major foreseeable problems that were encountered
    could have been avoided had Vlasic been given a reasonable
    amount of time to implement the system.  The foreseeable cost
    of development and implementing the system, including
    transition costs was at least $46.5 million.  BCG had opined
    that it would cost 1% of revenue to run the IT Department.
    This was unrealistic based on both Campbell's experience and
    the grocery manufacturer's industry experience.  Campbell's
    had sufficient experience and was privy to the various GMA and
    other industry studies to know that 1% of revenue was totally
    unrealistic to run Vlasic's IT Department considering it was
    implementing an IT infrastructure and systems from scratch.
    And had a financial advisor bought Vlasic at the time of the
    spin, because of the lack of a central headquarters
    infrastructure, including IT, the investor would have had to
    deeply discount its purchase price due to the extreme risk of
    having to establish an IT system and infrastructure within one
    year.

    On cross-examination, Mr. McElroy reminds Prof. Grossman of
    Liz Shuttleworth's testimony.  Ms. Shuttleworth, who was the
    Chief Information Officer at VFI after the spinoff, testified
    that she had no objection to the BPCS and the IT
    implementation.  Prof. Grossman explains that the reason that
    Ms. Shuttleworth did not object to BPCS was because of the
    compressed time frame, because the system had to be in by
    February 1st, 1998, and because BPCS 4.0 was already in the
    factories running manufacturing.  "It was the only choice, it
    would have been impossible to succeed with any other
    alternative but BPCS.  And that's why she didn't object to
    BPCS, because it was the only path in which to try and make
    that February 1st, 1998 deadline."

    Mr. McElroy also recounts that Mr. Bernstock reported to the
    Board that as of February 1, full BPCS system is up and
    running on schedule and on budget, and that the transition to
    date accomplished through an extraordinary team effort, no
    business disruptions.

    "If he meant that Vlasic was manufacturing products and
    shipping goods to their customers, then he is right, there was
    no business disruption.  If he is not including within that
    cash flow issues and billing issues and accounts receivable
    issues and trade spending issues, then -- it all depends upon
    what he includes within that rubric of no business
    disruptions," Prof. Grossman says.

    Mr. McElroy points out the VFI won an award as the Best IT
    system in the food industry.

    "For those of us in the IT industry who knows how those awards
    are actually awarded, they are fairly meaningless.  People
    submit, you know, questionnaires and names are picked.  There
    is really no vetting of what actually happened.  I mean, I
    don't put a lot of credence on an award, but to the extent
    that, as I said earlier in my testimony, that they
    accomplished what they managed to accomplish in 10 months,
    they probably do deserve an award, because most companies
    could never have accomplished what they accomplished," Prof.
    Grossman says.

D. Greg Hallman

    Dr. Hallman is a lecturer in the Finance Department at the
    McKeon School of Business at the University of Texas in
    Austin.  He has a Ph.D. in finance.  Together with Professor
    Sheridan Titman, Dr. Hallman was retained by counsel for VFB
    to provide a rebuttal opinion to the opinion of Dr. Timothy
    Luehrman.  He was also asked to form an independent opinion as
    to the value of VFI from the date of the spinoff.

    Dr. Hallman reviewed the expert reports of Dr. Luehrman and
    Dr. Blattberg, Campbell's Form 10 describing the spinoff, the
    management operating plans for 1999 for Vlasic and Swanson,
    the loan documents, the information memorandum from the banks,
    and VFI's Form 10-Qs and 10-Ks.

    After determining trends and projecting various calculations,
    Dr. Hallman concludes that the VFI enterprise value at the
    spin date was 376.6 million.  "Our calculation was that the
    firm was worth $376.6 million. It had around $594 million of
    debt on it, a small amount of cash on the books, 5.6 million.
    So you take the 376, subtract off the debt, add back in the
    cash on the books, the calculated insolvency of the spin date
    is $211.7 million."  Dr. Hallman did not take into account any
    other obligations that were assumed by VFI from Campbell Soup
    like deferred taxes or medical benefits.

    According to Dr. Hallman, one of the major criticisms they
    have to Dr. Luehrman's report is that Dr. Luehrman took
    management projections and used those as the basis for his
    future cash flow projections for his valuation of the firm.
    "We don't believe that those management projections were the
    type of expected values he would use to value the firm.  Those
    were targets.  They were goals of management.  Nobody teaches
    that you use targets as the basis for the valuation of a
    company.  You need to use expected values."

    Dr. Hallman also notes that Dr. Luehrman's discount rate is a
    little too low.  "We believe that's related to the fact that
    he does not consider the firm to be in financial distress at
    the time that it was born."

    Dr. Hallman explains that they did not use market comparables
    because they did not think that VFI was comparable to any of
    the food companies that were suggested by Dr. Luehrman.  "We
    believed this firm had declining brands, imminently shrinking
    margins, and was in financial distress due to the amount of
    debt that it had."

E. Sheridan Titman

    Dr. Titman is the McCallister Chair of Professor of
    Financial Services at the McComb School of Management, the
    University of Texas.  Dr. Titman was asked to take a
    look at Dr. Luehrman's report on the solvency of VFI, to
    render opinion on the solvency and to come up with his own
    valuation.  Dr. Titman worked on the assignment in
    collaboration with Dr. Hallman.

    "Our overall conclusion is that VFI, at the spin date, was
    worth $376 to $377 million.   I think it was $376.6 million.
    And based on that, we concluded it was insolvent by about $212
    million.  Our basic methodology is a discounted cash flow
    methodology, which was one of three methodologies that Dr.
    Luehrman looked at."  According to Dr. Titman, Dr. Luehrman
    also looked at a comparables multiples methodology, which
    looks at other firms and comes up with various multiples, like
    an EBITDA multiple to value the firm.  "We thought that was
    inappropriate because the comparable firms are not at all
    comparable with VFI."

    Dr. Titman clarifies that he does not have any criticism of
    Dr. Luehrman's model itself, but he has very strong criticism
    of the inputs to the model.  Dr. Titman notes that Dr.
    Luehrman is using management targets as inputs.  He explains
    that management targets would be clearly at the upper end of
    that projection.  "So these are sort of best case cash flows
    rather than projected cash flows that he's using in his
    valuation."

    According to Dr. Titman, they also disagree with Dr.
    Luehrman's growth rate for the terminal value.  "I think he
    assumed a 2% sales growth rated at the terminal value, which,
    again, we think is pretty high, given the fact that this is a
    firm that we believe is in financial distress.  This is a firm
    that cannot raise cash to do a lot of marketing.  It's a firm
    that cannot raise cash to acquire new businesses.  It's a firm
    that cannot raise cash to aggressively develop and promote new
    brands."

    Moreover, Dr. Titman point out that there's clearly a
    disconnect between the Form 10 and the trial transcript.  "[In
    the Form 10], you are clearly under the impression that the
    banks have provided a $750 million credit facility, and that
    the firm has taken down $500 million already, leaving them an
    additional $250 million that they can spend on, again, product
    improvements, marketing, and acquisitions.  I think that's
    clearly stated in the Form 10.  But it's clear, if you look at
    the numbers, that they're not going to be able to borrow $750
    million.  The credit facility requires, it has a loan covenant
    that states going out a few months, that they cannot borrow
    more than 3.75 times EBITDA.  So if you look at a projection
    of EBITDA at $100 million and that's VFI's own projection at
    the spin date, and you have to add to that, I can't remember
    exactly the number, I think it's about 43 million, you're
    going to get an EBITDA of say, what?  $142 million.  If you
    want to multiply that times 3.75, you're not going to go, come
    anywhere near that $750 million.  In fact, Bill Lewis
    concluded that the firm was close to a covenant violation at
    the spin date.  So it's not that we're going to have -- it's
    not just that we're going to have difficulties raising the
    additional $250 million.  We're going to have difficulties
    with our current $500 million.  Based on that, I concluded,
    and Greg and I concluded after a lot of discussion, that this
    is a company in financial distress.  From the outset, this
    company has been structured in a way to be in financial
    distress."

    During cross-examination, Mr. Bryan questioned the amount of
    time that Dr. Titman spent reviewing documents.  Dr. Titman
    admits that he was not able to review the operating plans for
    Swanson and Vlasic but he was able to read the testimony of
    the fact trial.

F. Henry Owsley

    Mr. Owsley is the Chief Executive Officer of Gordian Group, a
    financial advisory firm that deals primarily in financially
    troubled situations, restructurings and other complex
    situations.  The firm was asked to undertake a significant
    review, including looking at information regarding VFI, other
    expert reports, depositions and testimonies, and give an
    opinion on whether VFI received reasonably equivalent value or
    was rendered insolvent or had unreasonably small capital or
    couldn't have paid its debts as they would have become due.
    The firm was also hired as rebuttal experts with respect to
    Dr. Luehrman's report.

    According to Mr. Owsley, he conducted due diligence, made a
    number of valuation analyses, cash flow analyses, among
    others.

    In his first of four analyses, Mr. Owsley reached an adjusted
    enterprise value of $385,000,000.  Mr. Owsley did not take
    into account any of the Swanson ownership issues like not
    owning the name and Campbell's perpetual right to approve a
    sale.

    In his second analysis, Mr. Owsley did some screens based on
    databases of food industry companies that had done
    transactions in the past couple of years and divided them into
    various groupings -- diversified, frozen, single line and
    protein sub-groups.  "[We} took a look at these in order to
    determine whether or not any of the groupings had information
    content and looked at these to apply it to the VFI situation."
    Using the first quartile multiples and applying the
    illiquidity discount and giving a transaction cost, Mr. Owsley
    derived a $371,000,000 enterprise value for VFI.

    In performing the third multiple analysis, Mr. Owsley
    attempted to try to look at the diversified group of companies
    and to try to apply category weights to the Swanson group, the
    pickle group and the other group, and to see if there was any
    meaning to be derived from using multiples that differed,
    group to group, based on the comparable merger transactions.
    Mr. Owsley attempted to weight the different multiples from
    the different product segments that he calculated by the
    proportion of those business lines reflected within VFI.
    After further calculations, Mr. Owsley derived $284,000,000 as
    the enterprise value for the minus 2% professional growth
    rate.  "The derived enterprise value with 0% was $346,000,000.
    In each case, you subtract out the $65,000,000 of transition
    costs to come to a range of $219,000,000 to $281,000,000."
    With an illiquidity discount, the total adjusted enterprise
    value is $164,000,000 to $211,000,000.

    Mr. Owsley's overall valuation of VFI at the time of the
    spinoff is $270,000,000 to $360,000,000.

    Mr. Owsley opines that it was forseeable to Campbell that VFI
    would be unable to pay its debts when due after closing.  VFI
    did not have sufficient capital to execute the turnaround and
    growth plan that Campbell had sold to Wall Street.  VFI had
    unreasonably small capital with which to conduct its business.
    Mr. Owsley believes that VFI was rendered insolvent.  "I think
    the company was burdened with excessive debts as of the spin
    date [relative to] its earning capacity, the value of its
    assets, and so forth."

G. Steve McEachern

    Mr. McEachern is the Managing Partner of Vince Roberts &
    Company, a medium-sized CPA firm in Houston, Texas.  He has
    been a CPA for 29 years.

    Mr. McEachern relates that a Form 10 is required to be filed
    by Securities and Exchange Commission by a company that is
    proposing or planning to do a spinoff transaction.

    Asked to define an impairment, Mr. McEachern says, FAS 121
    defines an impairment as a condition that exists when the
    carrying value of an asset is no longer recoverable.  FAS 121
    set this standard in 1995.  Mr. McEachern believes that
    Campbell management was aware of the requirements of FAS 121,
    leading up to the time of the spinoff.

    Mr. McEachern relates that the Sweetpea projections were
    pretty aggressive targets.  "As an auditor, I would have
    questioned whether or not those were the expected cash flows,
    or if those were not more aggressive than they should have
    been, to do a cash flow projection for impairment."

    According to Mr. McEachern, there were several other
    indicators in addition to Sweetpea that indicated that Swift
    needed to be considered for impairment because of indicators
    of cost overruns, changes in supply agreements, the hyper-
    inflation in Argentina, the mad cow disease, the effect of the
    supply and cost of the supply because of that.  "Just looking
    at Sweetpea and considering those valuations, I think it was
    easy to conclude that Swift, SonA, and Freshbake were
    impaired, and the others [Open Pit and Kattus businesses]
    probably were impaired, if you considered a more realistic
    expected cash flow than what had been shown."

    "I think that Swift, SonA, Freshbake should have been taken on
    Campbell's books for the year ended August 3, 1997.  Possibly
    the other ones, but they all would have had to have been
    written down to their net realizable value at the spin," Mr.
    McEachern says.  "The books of Campbell's were overstated and
    the books of VFI were overstated."

    Had the required impairment charges been taken, Mr. McEachern
    says, VFI's opening balance sheet would have reflected
    $153,000,000 to $203,000,000 less in assets -- meaning that
    they would have had negative equity from a books standpoint.
    From a GAAP standpoint, Mr. McEachern continues, "the assets
    would have been less than the liabilities and from -- they
    would have been book insolvent to the tune of about
    $100,000,000 and I think they started out with $134,000,000."

    Mr. McEachern notes that misrepresentations were made by
    Campbell officers, required disclosures of contract changes
    were not made.  "I think you have a situation where the
    Campbell's '97 year end and possibly quarterly financial
    statements are materially misstated, leaving information that
    was not provided to the users.  The result of that was the
    Form 10, financial statements in the Form 10, were equally
    misstated by those impairments not having been taken as well
    as the effects that should have been flowed through the pro
    forma financial statements and the lacking related party
    disclosures.  So those were very serious misstatements and
    omissions and, based on my experience, working with the SEC
    and matters of investigation, these were things that would be
    very seriously pursued, even possibly turned over to the
    Department of Justice."

VFB LLC is represented by John A. Lee, Esq., Robin Russell, Esq.,
Joseph Holzer, Esq., Hugh Ray, Esq., Scott Locher, Esq., and
David Griffith, Esq., at Andrews & Kurth, LLP, in Houston, Texas.

Campbell's attorneys are Neal C. Belgam, Esq., at Blank Rome,
LLP, in Wilmington, Delaware; Richard P. McElroy, Esq., and Mary
Ann Mullaney, Esq., at Blank Rome, LLP, in Philadelphia,
Pennsylvania; and Michael W. Schwartz, Esq., David C. Bryan,
Esq., and Forrest G. Alogna, Esq., at Wachtell, Lipton, Rosen &
Katz, in New York. (Vlasic Foods Bankruptcy News, Issue No. 49;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


W.R. GRACE: Files Chapter 11 Plan of Reorganization in Delaware
---------------------------------------------------------------
W. R. Grace & Co. (NYSE:GRA) has filed a Plan of Reorganization as
well as several associated documents, including a Disclosure
Statement, with the U.S. Bankruptcy Court in Delaware in
connection with its Chapter 11 reorganization proceeding. The Plan
describes the way Grace proposes to satisfy its asbestos and other
Chapter 11-related claims. The filing represents an important step
forward in Grace's efforts to resolve its asbestos-related
liabilities and emerge from Chapter 11. This filing is not
expected to have any impact on Grace's ongoing operations.

The Plan will become effective only after a vote of eligible
creditors and with the approval of the Bankruptcy Court. Grace is
requesting a hearing on the Disclosure Statement on Dec. 20, 2004.
Votes on the plan may not be solicited until the Court approves
the Disclosure Statement.

The filing deadline for the Plan, originally scheduled for Oct.
14, 2004, was extended until Nov. 15 to permit Grace,
representatives of the three creditors committees and the equity
holders, and the representative of future asbestos claimants, to
continue negotiations toward a consensual Plan. While these
negotiations have been constructive, and are expected to continue
following the filing of the Plan, agreement among all parties has
not been achieved. Accordingly, Grace believes it should move
forward to file its Plan with the Bankruptcy Court in compliance
with this extended deadline.

Under the terms of the Plan, Grace would satisfy claims under the
Chapter 11 cases as follows:

                  Asbestos-Related Claims and Costs

A trust would be established under Section 524(g) of the
Bankruptcy Code through which all pending and future asbestos-
related claims would be channeled for resolution. The trust would
utilize specified trust distribution procedures to satisfy the
following asbestos-related claims and costs:

    1.  Personal injury claims that meet specified exposure and
        medical criteria (Personal Injury-Symptomatic Eligible or
        "PI-SE" Claims). PI-SE claimants would have to prove that
        their health is impaired from exposure to Grace's
        asbestos-containing products.

    2.  Personal injury claims that do not meet the exposure and
        medical criteria necessary to qualify as PI-SE Claims
        (Personal Injury-Asymptomatic and Other or "PI-AO"
        Claims). This class would contain all other asbestos-
        related personal injury claims against Grace.

    3.  Property damage claims, including claims related to
        Grace's former Zonolite attic insulation product. These
        claimants would have to prove Grace liability for loss of
        property value or remediation costs related to Grace's
        asbestos-containing products.

    4.  Trust administration costs and legal expenses.

Grace has requested that the Bankruptcy Court conduct an
estimation hearing to determine the amounts that would need to be
paid into the trust on the effective date of the Plan to satisfy
the estimated liability for each class of asbestos claimants and
trust administration costs and expenses over time. The amounts to
fund PI-SE Claims, PD Claims and trust administration would be
capped at the amount determined through the estimation hearing.
Amounts required to fund PI-AO Claims would not be capped.

Asbestos personal injury claimants would have the option to
litigate their claims against the trust or, if they meet specified
eligibility criteria, accept a settlement amount based on the
severity of their disease. Asbestos property damage claimants
would be required to litigate their claims through the trust. The
Plan provides that, as a condition precedent to confirmation, the
maximum aggregate payment for all asbestos-related liabilities and
trust administrative costs and expenses cannot exceed $1,613
million, which Grace believes would fund over $2 billion in
claims, costs and expenses over time.

The PI-SE Claims, the PD Claims and the related trust
administration costs and expenses would be funded with:

     (1) $512.5 million in cash (plus interest accrued at 5.5%
         from December 21, 2002) and nine million shares of common
         stock of Sealed Air Corporation pursuant to the terms of
         the settlement agreement resolving asbestos-related and
         fraudulent transfer claims against Sealed Air, provided
         the Bankruptcy Court approves the settlement agreement on
         terms acceptable to Grace, and

     (2) Grace common stock. The amount of Grace common stock
         required to satisfy these claims will vary depending on
         the liability measures approved by the Bankruptcy Court
         and the value of the Sealed Air settlement, which varies
         daily with the accrual of interest and the trading value
         of Sealed Air stock.

The PI-AO Claims would be funded with warrants exercisable for
such number of shares of Grace common stock that, when added to
the shares issued directly to the trust on the effective date,
would represent 50.1% of the voting securities of Grace. If the
common stock issuable upon exercise of the warrants is
insufficient to pay all PI-AO Claims, then Grace would be
obligated to pay any additional liabilities in cash.

                         Other Creditors

The Plan provides that all allowed non-asbestos claims would be
paid totally in cash (if such claims qualify as administrative or
priority) or 85% in cash and 15% in Grace common stock (if such
claims qualify as general unsecured). Grace estimates that
approximately $1,208 million of claims, including currently
accrued interest, would be satisfied in this manner, including
bank debt, environmental liabilities, non-qualified pension
claims, trade payables, litigation, and tax liabilities. Grace
would finance these payments with:

   -- $150 million of cash on hand,

   -- $115 million from Fresenius Medical Care Holdings, Inc.,
      paid in settlement of asbestos and other Grace-related
      claims,

   -- $800 million in new debt, and

   -- $143 million in value of Grace common stock.

Grace would satisfy other non-asbestos related liabilities
(estimated to be approximately $508 million), primarily
environmental, tax, pension and retirement medical obligations, as
they become due and payable over time. Proceeds from available
product liability insurance would supplement operating cash flow
to service new debt and liabilities not paid on the effective date
of the Plan.

                   Effect on Grace Common Stock

The Plan provides that Grace common stock will remain outstanding,
but that the interests of existing shareholders would be subject
to dilution for additional shares of common stock issued under the
Plan. In addition, in order to preserve significant net operating
loss carryforwards, which are subject to elimination or limitation
in the event of a change in control (as defined by the Internal
Revenue Code), the Plan places restrictions on the purchases of
Grace common stock. The restrictions would prohibit, for a period
of three years, a person or entity from acquiring more than 4.75%
of the outstanding common stock or, for those persons already
holding more than 4.75%, prohibit them from increasing their
holdings.

Grace also has filed a motion with the Bankruptcy Court that would
impose the trading restrictions described from the date of
approval of the motion to the effective date of the Plan. The
Bankruptcy Court has issued an interim order imposing such
restrictions pending a hearing on the motion scheduled for
Dec. 20, 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 Company and its debtor-affiliates
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, Young,
Jones & Weintraub, represent the Debtors in their restructuring
efforts.


WILMOT MOUNTAIN INC: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Wilmot Mountain, Inc.
        11931 Fox River Road
        PO Box 177
        Wilmot, Wisconsin 53192

Bankruptcy Case No.: 04-35989

Type of Business: The Company operates a ski park and school.
                  See http://www.wilmotmountain.com/

Chapter 11 Petition Date: November 8, 2004

Court: Eastern District of Wisconsin (Milwaukee)

Judge: Margaret D. McGarity

Debtor's Counsel: Jerome R. Kerkman, Esq.
                  Kerkman Law Office, Ltd.
                  757 North Broadway, Suite 600
                  Milwaukee, Wisconsin 53202
                  Tel: (414) 277-8200

Total Assets:   $737,229

Total Debts:  $2,321,781

Debtor's 20 Largest Unsecured Creditors:

    Entity                    Nature Of Claim       Claim Amount
    ------                    ---------------       ------------
Mills Enterprises, LLC        Mortgage Note           $1,147,186
PO Box 338
4011 80th Street
Kenosha, Wisconsin 53142

Dalbello Sports LLC           Trade Debt                 $28,808
519 Main Street
PO Box 59
Andover, New Hampshire 03216

Skis Dynastar, Inc.           Trade Debt                 $26,663
95 Wintersport Lane
Williston, Vermont 05495


Mastercard SP - 3731          Trade Debt                 $19,159
PO Box 77042
Madison, Wisconsin 53707

K2 Corporation                Trade Debt                 $17,538
PO Box 88967
Chicago, Illinois 60695

Scott USA                     Trade Debt                 $11,937
PO Box 26004
SLC, Utah 84128

Atomic Ski USA, Inc.                                     $11,834
21711 Network Place
Chicago, Illinois 60673

Spyder Active Sports, Inc.    Trade Debt                 $10,456
4725 Walnut Street
Boulder, Colorado 80301


Fisher Skis US LLC            Trade Debt                  $9,125
44 Locke Road
Concord, New Hampshire 03301

WE Energies                   Trade Debt                  $7,935
PO Box 2046
Milwaukee, Wisconsin 53201

McGuireWoods LLP                                          $7,551
c/o John F. Pollick, Esq.
150 North Michigan Avenue
Chicago, Illinois 60601

Kombi Ltd.                    Trade Debt                  $6,603
PO Box 8767
Essex, JCT, Vermont 05451

Rossignol                     Trade Debt                  $6,447

Smith Sports Optics, Inc.     Trade Debt                  $6,379

Columbia Sportswear Company   Trade Debt                  $6,355

Marker USA                    Trade Debt                  $6,171

Tirabassi Felland & Clark                                 $5,480

Obermeyer                                                 $5,028

Mastercard-Madison SP 2634                                $4,744

Jim Sharkey                                               $4,269


Z-TEL TECH: Sept. 30 Balance Sheet Upside-Down by $166.2 Million
----------------------------------------------------------------
Z-Tel Technologies, Inc. (Nasdaq:ZTELC), parent company of Z-Tel
Communications, Inc., a leading provider of local, long distance
and enhanced telecommunications services, released its financial
results for the third quarter of 2004.

For the three-month period ended September 30, 2004, the company
reported revenues of $60.9 million, compared to $82.7 million for
the prior-year period. Net loss from operations was $9.7 million
versus $2.1 million for the prior-year period. Net loss
attributable to common stockholders was $15.6 million, compared to
$6.3 million for the third quarter of 2003. The company reported
negative EBITDA (earnings before interest, taxes, depreciation and
amortization) for the latest quarter of $4.7 million, compared
with positive $3.8 million for the prior-year period.

Included within the reported negative EBITDA for the third quarter
was a non recurring charge related to a headcount restructuring
that was implemented on September 1, 2004, in the amount of
approximately $3.2 million. This reduction in force was a
fundamental component of an overall cost restructuring plan that
began to be put into place in late August.

The company is also progressing with a recapitalization
initiative. On October 29, 2004, Z-Tel announced that the window
for its preferred stock tender offer was being extended through
November 29, 2004. According to the company, as of October 29,
2004, it had received from preferred shareholders indications to
tender in excess of 80 percent of the outstanding Series D
preferred stock and in excess of 90 percent of the outstanding
Series G preferred stock. There had also been an indication to
tender all of the Series E preferred stock as of late October.

Trey Davis, acting chief executive officer and chief financial
officer remarked, "Our company has gone through significant change
over the past several months. In particular, we are in the process
of implementing a major cost restructuring. While we are less than
three months into this process, we are very pleased with the
change that we have already realized. The reduction in force that
we implemented in early September, coupled with some key actions
involving our most significant business partnerships since then,
have already facilitated a significant expense savings to our
company.

"On a parallel track to the operating improvements that we have
made and continue to make, we are very pleased with our progress
on the recapitalization initiative. We are anticipating bringing
this process successfully to a close by the end of November. By
doing so the company will likely have, in addition to a positive
operating cash flow stream once again, a much simplified capital
structure, a much reduced reported shareholder deficit and a
significantly greater market capitalization of our common stock.
The benefits of this are two fold: not only are we a more finance
friendly company with an adjusted capital structure, but we will
also likely be better positioned to address the pressing matter of
our NASDAQ SmallCap Market listing."

The company also reported that for the first time since mid 2003,
it is experiencing positive net line growth. Since late August,
the company added 5,000 net consumer lines. At September 30, Z-Tel
had approximately 537,000 total active UNE-P bundled service lines
under management. Lines under management include the end-user
lines of Z-Tel's wholesale customers as well as the lines of Z-
Tel's own customers.

The company has also continued to progress on its facility based
plans. It has deployed its first Broadband Loop Concentrators
(BLC) in the Tampa market and has begun conducting "hot-cuts" of
existing UNE-P customers to its own network. It has also begun
installation of its second soft-switch into the New York City
market along with the deployment of its initial six Broadband Loop
Concentrators there, all of which are expected to be on-line by
January 1, 2005. The company plans to begin hot-cuts of its New
York UNE-P customers over to its own network in January, along
with expanding its footprint to include approximately 40 co-
located BLCs by the end of the first quarter.

Z-Tel is also expanding its business-to-business initiative that
was launched in Tampa and Atlanta in May of this year. The company
has hired sales management to expand direct sales teams into
Miami, Orlando and Nashville, along with two sales teams in New
York City, and expects to have them fully staffed by December of
this year.

Mr. Davis added, "While the facility build continues to be a
priority for the company over the next year, we continue to
approach the legacy UNE-P business with an objective for net line
and revenue growth. Despite some regulatory setbacks and
uncertainties created earlier this year, we believe we will have
the opportunity to utilize the UNE-P platform into the foreseeable
future in creating incremental operating cash flows and value for
our shareholders. We recently announced a significant agreement
with Qwest, which will give us the ability to sell UNE-P like
services in fourteen states through 2008. We also believe that in
other non-Qwest states, at least on a selected basis, we will have
the opportunity to utilize UNE-P like platforms for a period of
time. Our position is that UNE-P will continue to be a key
component of our business over the balance of 2004 and for most,
if not all, of 2005."

The company reported that it ended the third quarter with
approximately $4.7 million in cash on hand, while capital
expenditures totaled approximately $1.6 million during the third
quarter. As of September 30, 2004, the company had drawn $5
million of the recently announced $15 million BBH standby credit
facility.

Mr. Davis concluded, "We are pleased with the short-term progress
that we have made with respect to our cost structure. While we
have already incorporated much improvement into our business at
the operating cash flow line, we still have much work to do.
However, we already have enough visibility over the balance of the
year to offer guidance for the fourth quarter. We believe that we
will report a positive EBITDA of at least $2.5 million on total
revenue in a range of $55 million to $57 million for the fourth
quarter. We also anticipate making continued progress on reducing
our accounts payable balance between now and year end. These
expected results, coupled with a successful recapitalization
initiative, should put our company in a position to create
positive value for our shareholder in 2005 and beyond, which is
our fundamental business objective."

                           About Z-Tel

Z-Tel offers consumers and businesses nationwide enhanced wire
line and broadband telecommunications services. All Z-Tel products
include proprietary services, such as Web-accessible, voice-
activated calling and messaging features, which are designed to
meet customers' communications needs intelligently and
intuitively. Z-Tel is a member of the Cisco Powered Network
Program and makes its services available on a wholesale basis to
other communications and utility companies, including Sprint. For
more information about Z-Tel and its innovative services, please
visit http://www.ztel.com/

At Sept. 30, 2004, Z-Tel Technologies' balance sheet showed a
$166,227,000 stockholders' deficit, compared to a $131,019,000
deficit at Dec. 31, 2003.


* Alvarez & Marsal Opens New Office in Sao Paulo, Brazil
--------------------------------------------------------
Alvarez & Marsal, a global professional services firm, has opened
a new office in Sao Paulo, Brazil, expanding the firm's already
significant international presence, which includes 17 locations
across the U.S., Europe, Asia and now Latin America.  Jose Diniz,
who has more than 20 years of finance and management experience,
has joined the firm as a Managing Director and head of the Sao
Paulo office.

"There is a growing need for on-the-ground restructuring,
performance improvement and creditor advisory expertise in Latin
America," said Peter Cheston, Managing Director and co-head of the
firm's Creditor Advisory Services Group.  "Over the past several
years, A&M has established a solid track record for serving
businesses in Latin America, including both local companies and
Latin American operations of U.S. companies.  The opening of our
new office in Sao Paulo underscores our commitment to this region
and will enhance our ability to help a growing number of clients
solve complex problems and advance their interests."

The firm's clients have included: secured creditors to AT&T Latin
America Corp., Parmalat (Latin American operations) and Light S.A.
(Rio de Janeiro's Public Utility), among others.  Prior to joining
A&M, Mr. Diniz served as the Chief Financial Officer of the
Andrade Gutierrez Group, a $1.3 billion revenue Brazilian
conglomerate which owns the largest telecom company in Brazil.
Previously, he worked for 10 years with McKinsey & Co. and the
Monitor Group, where he focused on Brazilian turnaround
situations.  Over the course of his career, Mr. Diniz has
developed extensive expertise in implementing long term plans
focused on increasing liquidity, developing complex tax planning
programs, negotiating long term funding using various bank sources
such as the World Bank or European development agencies, and
managing buy and sell side M&A processes.

In addition to Mr. Diniz, A&M's Latin America team includes
Director Luis de Lucio, who has been with the firm since early
2003, and Associate Ricardo Paes, who is based in Sao Paulo and
also has been with the firm since 2003.

Mr. de Lucio has advised shareholders and lenders in all of the
major Latin American markets, in a cross-section of industry
sectors including infrastructure, transportation,
telecommunications, technology, financial services, healthcare,
manufacturing and consumer products.  Prior to joining A&M, Mr. de
Lucio was involved in developing and implementing the financial
restructuring plan for the Brazilian affiliate of a major U.S.-
based technology company.  Earlier in his career he was a senior
member of Ernst & Young's Corporate Finance Group based both in
the U.S. and Latin America.

Mr. Paes has over a decade of experience with major accounting,
consulting and investment banking firms.  He has provided
financial and operational advice to several leading companies that
are based in or have operations in Brazil as well as those seeking
to enter or expand in the market.

                     About Alvarez & Marsal

Founded in 1983, Alvarez & Marsal is a global professional
services firm that helps businesses and organizations in the
corporate and public sectors navigate complex business and
operational challenges.  With professionals based in locations
across the U.S., Europe, Asia, and Latin America, Alvarez & Marsal
delivers a proven blend of leadership, problem solving and value
creation.  Drawing on its strong operational heritage and hands-on
approach, Alvarez & Marsal works closely with organizations and
their stakeholders to help address complex business issues,
implement change and favorably influence results.  Alvarez &
Marsal's service offerings include Turnaround Management
Consulting, Crisis and Interim Management, Creditor Advisory,
Financial Advisory, Dispute Analysis and Forensics, Real Estate
Advisory, Business Consulting and Tax Advisory.  For more
information about the firm, please visit
http://www.alvarezandmarsal.com/or contact Rebecca Baker, Chief
Marketing Officer at 212-759-4433.


* BOND PRICING: For the week of November 15 - November 19, 2004
---------------------------------------------------------------

Issuer                                Coupon   Maturity  Price
------                                ------   --------  -----
Adelphia Comm.                         3.250%  05/01/21    16
Adelphia Comm.                         6.000%  02/15/06    16
American & Foreign Power               5.000%  03/01/30    75
AMR Corp.                              4.500%  02/15/24    70
AMR Corp.                              9.000%  08/01/12    66
AMR Corp.                              9.000%  09/15/16    64
AMR Corp.                             10.200%  03/15/20    59
Applied Extrusion                     10.750%  07/01/11    59
Armstrong World                        6.350%  08/15/03    72
Bank New England                       8.750%  04/01/99    10
Burlington Northern                    3.200%  01/01/45    56
Calpine Corp.                          7.750%  04/15/09    61
Calpine Corp.                          7.785%  04/01/08    69
Calpine Corp.                          8.500%  02/15/11    63
Calpine Corp.                          8.625%  08/15/10    63
Comcast Corp.                          2.000%  10/15/29    44
Continental Airlines                   4.500%  02/01/07    72
Delta Air Lines                        7.711%  09/18/11    71
Delta Air Lines                        7.900%  12/15/09    50
Delta Air Lines                        8.000%  06/03/23    55
Delta Air Lines                        8.300%  12/15/29    39
Delta Air Lines                        9.000%  05/15/16    39
Delta Air Lines                        9.250%  03/15/22    39
Delta Air Lines                        9.750%  05/15/21    39
Delta Air Lines                       10.000%  08/15/08    61
Delta Air Lines                       10.125%  05/15/10    49
Delta Air Lines                       10.375%  02/01/11    49
Dobson Comm. Corp.                     8.875%  10/01/13    68
Evergreen Int'l Avi.                  12.000%  05/15/10    65
Falcon Products                       11.375%  06/15/09    62
Federal-Mogul Co.                      7.500%  01/15/09    31
Finova Group                           7.500%  11/15/09    43
Iridium LLC/CAP                       14.000%  07/15/05    15
Inland Fiber                           9.625%  11/15/07    47
Kaiser Aluminum & Chem.               12.750%  02/01/03    14
Kulicke & Soffa                        0.500%  11/30/08    75
Level 3 Comm. Inc.                     2.875%  07/15/10    72
Level 3 Comm. Inc.                     6.000%  09/15/09    58
Level 3 Comm. Inc.                     6.000%  03/15/10    56
Liberty Media                          3.750%  02/15/30    68
Liberty Media                          4.000%  11/15/29    73
Mirant Corp.                           2.500%  06/15/21    68
Mirant Corp.                           5.750%  07/15/07    69
Mississippi Chem.                      7.250%  11/15/07    56
National Vision                       12.000%  03/30/09    62
Northern Pacific Railway               3.000%  01/01/47    56
Northwest Airlines                     7.875%  03/15/08    75
Nutritional Src.                      10.125%  08/01/09    65
Oglebay Norton                        10.000%  02/01/09    51
O'Sullivan Ind.                       13.375%  10/15/09    40
Owens Corning                          7.000%  03/15/09    67
Owens Corning                          7.500%  05/01/05    64
Owens Corning                          7.500%  08/01/18    64
Pegasus Satellite                     12.375%  08/01/06    64
Pegasus Satellite                     13.500%  03/01/07     2
Pen Holdings Inc.                      9.875%  06/15/08    51
PG&E National Energy                  10.375%  05/16/11    75
Primus Telecom                         3.750%  09/15/10    65
RCN Corp.                             10.000%  10/15/07    51
RCN Corp.                             10.125%  01/15/10    52
RCN Corp.                             11.125%  10/15/07    48
Reliance Group Holdings                9.000%  11/15/00    21
Spacehab Inc.                          8.000%  10/15/07    65
Syratech Corp.                        11.000%  04/15/07    44
Trico Marine Service                   8.875%  05/15/12    50
Tower Automotive                       5.750%  05/15/24    61
United Air Lines                       9.125%  01/15/12     4
United Air Lines                      10.670%  05/01/04     6
Univ. Health Services                  0.426%  06/23/20    59
Westpoint Stevens                      7.875%  06/15/08     0
Zurich Reinsurance                     7.125%  10/15/23    65

                          *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                          *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L.
Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Jazel P.
Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence Patrick
F. Casquejo and Peter A. Chapman, Editors.

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

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

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

                *** End of Transmission ***