/raid1/www/Hosts/bankrupt/TCR_Public/050114.mbx       T R O U B L E D   C O M P A N Y   R E P O R T E R

          Friday, January 14, 2005, Vol. 9, No. 11      

                          Headlines

5-PACK LLC: Case Summary & 11 Largest Unsecured Creditors
AEGIS COMMUNICATIONS: Begins Operations in Buenos Aires
AIR CANADA: Fidelity Discloses 12.27% Equity Stake in ACE Aviation
ALASKA COMMS: Subsidiary Launches Cash Tender Offer for Sr. Notes
AMC ENTERTAINMENT: Offering to Purchase 9-1/2% Sr. Sub. Notes

ATHEROGENICS INC: Completes Sale of $200 Million Convertible Notes
BOSS CAYMAN: Fitch Lowers $96.23MM Loan Portfolio Rating to 'BB-'
CALL-NET: Chief Strategy Officer Duncan McEwan Resigns
CAPITAL ACQUISITIONS: Federal Receiver Takes Loan Portfolio Bids
CATHOLIC CHURCH: Spokane Hires Paine Hamblen as General Counsel

CENTENNIAL COMMS: Moody's Reviews Ratings for Possible Upgrade
EAGLEPICHER INC: Moody's Junks $250 Million Sr. Debt Rating
EDGEN CORPORATION: S&P Puts B- Rating on $105 Million Senior Notes
EMERGENCY FILTRATION: Demands Delisting from the Berlin Exchange
ENER1 INC: Inks Letters of Intent to Acquire Giner Electrochemical

EXIDE TECH: Fee Auditor Recommends Reduction of Kirkland Fees
FEDERAL-MOGUL: Proponents Insist on Estimation of T&N Claims
FINOVA GROUP: To Make Partial Prepayment on Notes on Feb. 15
FLOW INT'L: Oct. 31 Balance Sheet Upside-Down by $9 Million
FRIENDS HOSPITAL: Moody's Places B2 Ratings for Possible Downgrade

HEALTH NET: Names Steve Nelson President of Northeast Division
IDI CONSTRUCTION: U.S. Trustee Picks 7-Member Creditors Committee
IDI CONSTRUCTION: Section 341(a) Meeting Slated for Jan. 20
IMAGIS TECH: Closes Private Debt Placement & Settles $331,158 Debt
INTERSTATE BAKERIES: Equity Panel Wants Trading Wall Protocol Set

INTERSTATE BAKERIES: Soliciting Consents for Retention Plan
JEAN COUTU: Failure to File Financials Prompts Default Notice
KINETICS GROUP: Fitch Withdraws 'B' Rating on $55 Million Sr. Debt
LAIDLAW INTERNATIONAL: Details Short-Term Incentive Plan
LAND O'LAKES: Inks New Pact with Qwest for Network Services

LANTIS EYEWEAR: Disclosure Statement Hearing Set for Jan. 19
LONG BEACH: Fitch Puts 'BB+' on $35 Mil. 2005-1 Certificate
LORAL SPACE: Judge Drain Approves Harrison Goldin as Examiner
MAGIC LANTERN: Completes Strategic Restructuring Plan
MID-STATE RACEWAY: Has Until Feb. 1 to File a Chapter 11 Plan

MORGAN STANLEY: S&P Puts 'B-' Rating on $2.5M Class O Certificates
NATIONAL CENTURY: Deadline to Object to Purcell Claim is Jan. 24
NATIONAL ENERGY: Court Approves Dynegy Claims Settlement
NATIONAL ENERGY: Court Permits Set-Off of ERCOT Claims
NATIONAL ENERGY: Inks Settlement Pact with Calpine Energy

ORECK CORP: Moody's Assigns B1 Ratings to $210 Million Sr. Loan
OWENS CORNING: Court Approves Valparaiso Asset Sale for $325,000
PARMALAT USA: Farmland Obtains Supplemental Postpetition Financing
PARMALAT USA: Parties Agree to Amend DIP Credit Agreement
PETERSBURG PLUMBING: Voluntary Chapter 11 Case Summary

POLYGRAPHEX SYSTEMS: Voluntary Chapter 11 Case Summary
RCN CORP: Assumes American International Group Insurance Programs
REAL MEX: Chevys Acquisition Cues S&P to Affirm 'B' Corp. Rating
SOLUTIA INC: Asks Court to Approve Springfield Wastewater Pact
SOUTH BRUNSWICK: Seven Creditors Appointed to Serve on Committee

STELCO INC: Monitor Recommends Extension of Bid Deadline
TELESYSTEM INT'L: Acquires All of Oskar Holdings
TORCH OFFSHORE: Receives Nasdaq Delisting Notice
TRICO MARINE: Section 341(a) Meeting Slated for Feb. 4
TROPICAL SPORTSWEAR: U.S. Trustee Picks 7-Member Creditors Comm.

TROPICAL SPORTSWEAR: Creditors Have Until Jan. 31 to File Claims
TRUMP HOTELS: Wants Until May 1 to Decide on Leases
TRUMP HOTELS: Asks Court to Approve Exit Financing Commitments
TRUMP HOTELS: Wants Court to Approve Solicitation Procedures
UAL CORPORATION: Court Directs $17,652,330 into Escrow

UAL CORP: Wants Court Nod on TWU Pact Reducing Wage by 9.8%
ULTIMATE ELECTRONICS: Can Access Up to $86 Mil. in DIP Financing
UNISYS CORP: Moody's Affirms Ba1 Senior Implied Ratings
US AIRWAYS: Inks New Financing Pacts for Six Regional Jets
US AIRWAYS: Inks Pact Extending Use of Cash Through June 30

US AIRWAYS: Wants to Modify Retiree Benefits
VENTAS INC: To Webcast Fourth Quarter Earnings Results on March 1
WESTAR ENERGY: S&P Affirms 'BB+' Corporate Credit Rating
WILLIAM LYON: Launches $150 Million Senior Debt Offering
XOMA LTD: Restructures Genentech Pact on Raptiva Treatment

* Stroock & Stroock Names Four New Special Counsel
* Fitch Says U.S. High Yield 2004 Default Rate is at 1.5%

* BOOK REVIEW: As We Forgive Our Debtors

                          *********

5-PACK LLC: Case Summary & 11 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: 5-Pack LLC
        1946 Coney Island Avenue
        Brooklyn, New York 11223

Bankruptcy Case No.: 05-10210

Type of Business: The Debtor owns a real property located at
                  3163 Broadway, in New York.

Chapter 11 Petition Date: January 12, 2005

Court: Southern District of New York (Manhattan)

Debtor's Counsel: Arnold Mitchell Greene, Esq.
                  Robinson Brog Leinwand Greene,
                  Genovese & Gluck, P.C.
                  1345 Avenue of the Americas, 31st Floor
                  New York, New York 10105
                  Tel: (212) 586-4050
                  Fax: (212) 956-2164

Total Assets: $1,600,200

Total Debts:  $5,915,497

Debtor's 11 Largest Unsecured Creditors:

    Entity                       Nature of Claim    Claim Amount
    ------                       ---------------    ------------
New York City                    Taxes                $2,547,225
Department of Tax & Finance
345 Adams Street
10th Floor South
Brooklyn, New York 11201

Ki Jung Kim                      Value of Security:     $793,000
34-50 71st Street                $1,600,000
Jackson Heights, New York 11372

Dominion Financial Corporation   Value of Security:     $465,000
Dominion Corporation East Tower  $1,600,000
1355 West Olympic Boulevard,
Suite 210
Los Angeles, California 90064

Dominion Financial Corporation   Value of Security:     $225,000
Dominion Corporation East Tower  $1,600,000
1355 West Olympic Boulevard,
Suite 210
Los Angeles, California 90064

Carmen Carballo                                         $182,795
3103 Broadway #21
New York, New York 10003

New York City Water Board                                $36,765
Acct. # 000147316001

Stern & Stern                                            $26,750

ECB                                                       $7,716

New York City Water Board                                 $6,934
Acct. # 1000147314001

New York City Water Board                                 $6,683
Acct. # 6000147313001

PE Electrical Contracting                                 $1,800
Corporation


AEGIS COMMUNICATIONS: Begins Operations in Buenos Aires
-------------------------------------------------------
Aegis Communications Group, Inc. (OTC Bulletin Board: AGIS),
disclosed a strategic alliance agreement that will provide native
Hispanic language support for Aegis' client base.  This alliance
provides both companies a breadth of BPO and tele-services
offerings to address the lucrative Hispanic marketplace with U.S.
and Latin America-based operations.

Hispanic Global has extensive experience offering services to the
Hispanic population in the U.S. and throughout Latin America
specializing in marketing, implementation, operation and
optimization.  The partnership will give clients an opportunity to
address a wider range of customers including English and multi-
Hispanic dialects.  The partnership is an additional step of
Aegis' expansion of a global footprint and transactional
processing while continuing to deliver on its core competencies of
inbound and outbound tele-services.

Julio Rein, VP Business Development for Hispanic Global states, "I
am excited about this strategic alliance with global Aegis
Communications Group.  This extends our reach into the important
U.S. market and establishes a strong service offering with a well
known industry leader."  Further Mr. Rein says, "By partnering
with Aegis we'll be able to offer in-language Hispanic support to
Aegis' current and future client base.  Aegis will be able to
support requests to service the booming U.S. Hispanic sector more
cost effectively and more importantly by associates who understand
the unique cultural differences between Hispanics living in the
U.S., Mexico and Latin America."

Meri Beth Banker, Sr. Vice President of Aegis adds, "We selected
Hispanic Global due to their ability to meet Aegis' high delivery
standards, similar values, and most importantly a valuable
seamless service offering.  We believe this offering enables both
companies to synergistically capitalize on the growing U.S.
Hispanic market thus reducing our time to market and increasing
our flexibility.  I have found Hispanic Global to be a very
responsive and accommodating partner to work with as we begin our
first project in Buenos Aires."

                        About the Company

Aegis Communications Group, Inc. -- http://www.aegiscomgroup.com/
-- is a worldwide transaction-based business process outsourcing
company that enables clients to make customer contact programs
more profitable as well as drive efficiency in back office
processes.  Aegis' services are provided to a client portfolio
that includes blue chip and multinational firms through a network
of client service centers employing approximately 2,500 people and
utilizing over 3,800 production workstations.

At Sept. 30, 2004, Aegis Communications' balance sheet showed a
$8,268,000 stockholders' deficit, compared to a $26,449,000
deficit at December 31, 2003.


AIR CANADA: Fidelity Discloses 12.27% Equity Stake in ACE Aviation
------------------------------------------------------------------
Fidelity Management & Research Company and Fidelity Management
Trust Company, of 82 Devonshire Street, Boston, Massachusetts,
USA, reported that certain fund and institutional accounts for
which Fidelity serves as investment adviser have purchased 39,400  
shares of ACE Aviation Holdings Inc.'s Class B stock.  Fidelity  
has control but not ownership of these shares.  As a result of  
the purchase, Fidelity holds 1,408,900 shares (or 12.27%) of ACE  
Aviation Holdings Inc.'s Class B stock.  Fidelity's purchase of  
ACE Aviation Holdings Inc.'s Class B stock was executed on the  
Toronto Stock Exchange.

Fidelity fund and institutional account purchases have been  
made for investment purposes only, and not with the purpose of  
influencing the control or direction of ACE Aviation Holdings  
Inc.  The Fidelity funds and institutional accounts may, subject  
to market conditions, make additional investments in or  
dispositions of securities of ACE Aviation Holdings Inc.,  
including additional purchases or sales of shares of Class B  
stock.  Fidelity does not, however, intend to acquire 20% of any  
class of the outstanding voting or equity securities of ACE  
Aviation Holdings Inc.

     For all inquiries, please contact:

               Kim Flood
               Vice President, External Communications
               Fidelity Investments Canada Ltd.
               (416) 217-7566

Air Canada filed for CCAA protection on April 1, 2003 (Ontario
Superior Court of Justice, Case No. 03-4932) and filed a Section
304 petition in the U.S. Bankruptcy Court for the Southern
District of New York (Case No. 03-11971).  Mr. Justice Farley
sanctioned Air Canada's CCAA restructuring plan on Aug. 23, 2004.
Sean F. Dunphy, Esq., and Ashley John Taylor, Esq., at Stikeman
Elliott LLP, in Toronto, serve as Canadian Counsel to the carrier.
Matthew A. Feldman, Esq., and Elizabeth Crispino, Esq., at Willkie
Farr & Gallagher, serve as the Debtors' U.S. Counsel.  When the
Debtors filed for protection from their creditors, they listed
C$7,816,000,000 in assets and C$9,704,000,000 in liabilities.

On September 30, 2004, Air Canada successfully completed its
restructuring process and implemented its Plan of Arrangement.  
The airline exited from CCAA protection raising $1.1 billion of
new equity capital and, as of September 30, has approximately
$1.9 billion of cash on hand.  (Air Canada Bankruptcy News, Issue
No. 56; Bankruptcy Creditors' Service, Inc., 215/945-7000)


ALASKA COMMS: Subsidiary Launches Cash Tender Offer for Sr. Notes
-----------------------------------------------------------------
Alaska Communications Systems Group, Inc.'s subsidiary, Alaska
Communications Systems Holdings, Inc., has commenced a cash tender
offer for:

   -- any and all of the $147,500,000 aggregate principal amount
      of outstanding 9-3/8% Senior Subordinated Notes due 2009
      issued by ACSH; and

   -- up to $59,350,000 aggregate principal amount of outstanding
      9-7/8% Senior Notes due 2011 issued by ACSH.  

The tender offers are scheduled to expire at 9:00 a.m., New York
City time, on Feb. 10, 2005, unless extended or earlier
terminated.

In conjunction with the tender offers, ACSH is also soliciting
consents to adopt certain amendments to the indentures under which
the senior subordinated notes and senior notes were issued.  The
solicitations of consents are scheduled to end at 5:00 p.m., New
York City time, on Jan. 25, 2005, unless extended or earlier
terminated.  Holders who tender their notes prior to the
expiration of the consent solicitations will be entitled to
withdraw their tenders and revoke their consents pursuant to the
tender offers only before 5:00 p.m., New York City time, on
Jan. 25, 2005.  The proposed amendments to the senior subordinated
notes indenture would, among other things, eliminate substantially
all of the restrictive covenants and eliminate most events of
default (other than for failure to make payments of interest or
principal).  The proposed amendments to the senior notes indenture
would, among other things, increase the amount of senior secured
bank indebtedness that ACSH and its subsidiaries may incur.

Subject to certain conditions, holders of senior subordinated
notes who validly tender and do not withdraw their senior
subordinated notes by 5:00 p.m., New York City time, on Jan. 25,
2005, will receive total consideration for their senior
subordinated notes of $1,046.88 per $1,000 principal amount of
notes tendered by such time, which includes a consent payment of
$30.00 per $1,000 principal amount of notes.

ACSH is making the tender offers and consent solicitations as part
of a refinancing of a portion of its existing debt.  ACSH intends
to finance the tender offers and consent solicitations with a
portion of the term loan borrowings under a proposed approximately
$385 million new senior secured credit facility, the proceeds of a
proposed $75 million equity offering by ACS and cash on hand.  The
tender offers and consent solicitations are subject to the valid
tender of, and delivery of consents with respect to, a majority of
the outstanding principal amount of senior subordinated notes and
senior notes, arranging the new senior secured credit facility,
successful completion of the equity offering and other customary
general conditions.

ACSH has entered into agreements with holders of approximately
$50.2 million aggregate principal amount of the senior notes,
which represents approximately 28.3 percent of the aggregate
principal amount of the outstanding senior notes, pursuant to
which the holders have agreed, subject to certain conditions, to
tender their senior notes in the tender offer and deliver their
consents pursuant to the consent solicitation.

J.P. Morgan Securities Inc. and CIBC World Markets Corp. are
acting as the dealer managers and solicitation agents, and Global
Bondholder Services Corp. is acting as depositary, in connection
with the tender offers and consent solicitations.  Copies of the
Offers to Purchase and Consent Solicitation Statements, Letters of
Transmittal and Consent, and other related documents may be
obtained from the depositary at (800) 558-3745.

                        About the Company

Alaska Communications Systems is the leading integrated
communications provider in Alaska, offering local telephone
service, wireless, long distance, data, and Internet services to
business and residential customers throughout Alaska.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 5, 2004,
Standard & Poor's Ratings Services affirmed its ratings on Alaska
Communications Systems Group, Inc., and subsidiaries, including
the 'B+' corporate credit rating.  All ratings were removed from
CreditWatch, where they were placed with negative implications
June 8, 2004, due to concern about higher financial risk
accompanying the company's proposed $400 million income deposit
securities -- IDS -- offering.  The outlook is negative.

At the same time, Standard & Poor's assigned its '1' recovery
rating to Alaska Communications' existing $250 million senior
secured credit facility.  The existing 'BB-' bank loan rating on
the facility and the '1' recovery rating indicate a high
expectation of full recovery of principal in the event of a
payment default or bankruptcy.


AMC ENTERTAINMENT: Offering to Purchase 9-1/2% Sr. Sub. Notes
-------------------------------------------------------------
AMC Entertainment, Inc., one of the world's leading theatrical
exhibition companies, has initiated an offer to purchase its
outstanding 9-1/2% Senior Subordinated Notes due 2011.  The offer
to purchase is being made in accordance with the change of control
provisions of that certain Indenture pursuant to which the 2011
Notes were issued, dated as of Jan. 27, 1999, as supplemented by
the First Supplemental Indenture, dated as of Mar. 29, 2002, and a
Second Supplemental Indenture, dated as of Dec. 23, 2004.  

The Company has retained HSBC Bank USA, National Association to
act as the depositary in connection with the offer to purchase.

                        About the Company

AMC Entertainment, Inc. -- http://www.amctheatres.com/--  
headquartered in Kansas City, Mo., is a leader in the theatrical
exhibition industry.  Through its circuit of AMC Theatres, the
Company operates 230 theatres with 3,554 screens in the United
States, Canada, France, Hong Kong, Japan, Portugal, Spain and the
United Kingdom.

                          *     *     *

As reported in the Troubled Company Reporter on Aug. 5, 2004,
Standard & Poor's Ratings Services revised its outlook on AMC
Entertainment, Inc., to stable from positive, based on the
increased leverage that will result from the pending sale and
recapitalization of the company.

At the same time, Standard & Poor's affirmed its ratings,
including its 'B' corporate credit rating, on the company.  In
addition, Standard & Poor's assigned its 'B' corporate credit
rating to Marquee Holdings, Inc., and its subsidiary Marquee, Inc.
Upon completion of the sale of AMC, Marquee, Inc., will be merged
with AMC.  All of these companies are analyzed on a consolidated
basis.


ATHEROGENICS INC: Completes Sale of $200 Million Convertible Notes
------------------------------------------------------------------
AtheroGenics, Inc. (Nasdaq: AGIX) has completed the sale of
$200 million of its 1.5% Convertible Notes due 2012, which
includes the exercise by the initial purchasers of their entire
option to purchase an additional $25 million principal amount of
the Notes.  The Notes are convertible into AtheroGenics, Inc.,
common stock at a conversion rate of 38.5802 shares per $1,000
principal amount of notes.

As previously announced, AtheroGenics expects to use the proceeds
of the offering to fund the ongoing costs of the ARISE trial of
AGI-1067 and other research and development activities, including
clinical trials, process development and manufacturing support,
and for general corporate purposes, including working capital.

                        About the Company

AtheroGenics, Inc., (Nasdaq: AGIX) is a pharmaceutical company
focused on the treatment of chronic inflammatory diseases.

As of September 30, 2004, the company had an $18,839,547
stockholders' deficit, compared to $30,377,006 in positive
equity at December 31, 2003.


BOSS CAYMAN: Fitch Lowers $96.23MM Loan Portfolio Rating to 'BB-'
-----------------------------------------------------------------
Fitch Ratings affirmed BOSS Cayman, Ltd.'s $28,700,000 floating-
rate notes due 2008 'BBB'.

Boss Cayman is a synthetic collateralized loan obligation -- CLO
-- that provides investors with leveraged exposure to a
diversified portfolio of high yield loans.  Boss Cayman utilizes a
credit default swap with Morgan Guaranty Trust Company -- MGT --
to obtain leveraged exposure to the high yield loan portfolio.
Fitch's rating addresses the ultimate payment of basic interest
and principal.

Fitch has reviewed the credit quality of the assets constituting
the portfolio.  Since it was reviewed in June of 2003, a
significant portion of the loans in the reference portfolio have
paid down, reducing the portfolio balance from $332.5 million to
$96.23 million.  The portfolio has experienced slight negative
credit migration from a weighted average rating -- WAR -- of 'BB'
to a WAR of 'BB-', and the current balance of the first loss
reserve account, which provides credit enhancement to the notes,
has increased from $5.4 million to $6 million.  Additionally, the
reference portfolio has experienced four credit events to date
totaling $3.8 million in losses; however, the notes have not
experienced any losses due to the fact that losses were paid to
the swap counterparty from the first loss reserve account.

As a result of this analysis, Fitch has determined that the
current rating assigned to the notes still reflects the current
risk to noteholders.  Fitch will continue to monitor and review
this transaction for future rating adjustments.  Additional deal
information and historical data is available on the Fitch Ratings
Web site at http://www.fitchratings.com/


CALL-NET: Chief Strategy Officer Duncan McEwan Resigns
------------------------------------------------------
Duncan McEwan will resign as executive vice president and chief
strategy officer of Call-Net Enterprises, Inc., effective
Feb. 15, 2005.  He will stay on in an advisory capacity for a
period of  six months to further develop the company's strategy.

Mr. McEwan joined Sprint Canada, a subsidiary of Call-Net, in June
of 2001 as president and chief operating officer. In October 2004,
he assumed the role of executive vice president and chief strategy
officer of Call-Net.  Prior to that, he was chief executive
officer of NorthPoint Communications Canada, a Sprint Canada joint
venture company.

"Duncan has made a significant contribution to the company and has
provided valuable leadership in the transformation of the
company," said Bill Linton, the Company's president and chief
executive officer.  "He leaves the organization well positioned
for the future and I want to thank him for his leadership and
commitment."

                        About the Company

Call-Net Enterprises, Inc., (TSX: FON, FON.NV.B) primarily through
its wholly owned subsidiary Sprint Canada Inc., is a leading
Canadian integrated communications solutions provider of home
phone, wireless, long distance and IP services to households, and
local, long distance, toll free, enhanced voice, data and IP
services to businesses across Canada.  Call-Net, headquartered in
Toronto, owns and operates an extensive national fibre network,
has over 151 co-locations in five major urban areas including
33 municipalities and maintains network facilities in the United
States and the United Kingdom.  For more information, visit
http://www.callnet.ca/and http://www.sprint.ca/

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 3, 2004,
Standard & Poor's Ratings Services lowered its ratings on Call-Net
Enterprises, Inc., to 'B-' from 'B' on continued pricing pressures
in long distance and expectations for increased competition in
residential local services beginning in 2005.  At the same time,
Standard & Poor's lowered the ratings on Call-Net's 10.625% notes
due Dec. 2008; US$223.1 million remains outstanding under the
notes.  The outlook remains negative.


CAPITAL ACQUISITIONS: Federal Receiver Takes Loan Portfolio Bids
----------------------------------------------------------------
In the face of more than 2,000 consumer complaints, the Federal
Trade Commission asked a U.S. District Court to order a halt to
the harassing, intimidating, deceptive, and illegal 'debt
collection' practices of Capital Acquisitions & Management Corp.
(CAMCO).  At the agency's request, the court froze the assets of
the company and its principals and appointed a receiver to oversee
the corporate records and assets, pending trial.  

Le Petomane XII, Inc., is the Federal Receiver appointed by the
Honorable Robert W. Gerrleman of the U.S. District Court for the
Northern District of Illinois, Eastern Division, in Case No. 04 C
7781.  Le Petomane has turned to Keefe, Bruyette & Woods, Inc., to
sell CAMCO's $1.7 billion portfolio of charged-off consumer loans
at a public outcry auction on January 19, 2005.   

KBW provides these details about the portfolio:

     $9,200,000 of Pledged accounts with cash-flow
    $23,000,000 of Not pledged accounts with cash-flow
$1,720,000,000 of Seasoned consumer charge-offs
              4 Pools
        859,863 Accounts
         $2,041 Average account balance

For additional information, contact:

         The KBW Loan Portfolio Group
         Telephone (212) 887-7760
         portfoliosales@kbw.com

In March 2004, the FTC charged that CAMCO, RM Financial, and their
principals were threatening and harassing thousands of consumers
to get them to pay old, unenforceable debts or debts they did not
owe.  The agency alleged that their abusive and deceptive
collection practices violated federal law, including the Fair Debt
Collection Practices Act.  The companies and individuals paid a
$300,000 civil penalty to settle the FTC charges, and were barred
from engaging in abusive, deceptive, and illegal collection
practices in the future.  

In the eight months since that settlement, the FTC has received
more than 2,000 consumer complaints about CAMCO's illegal tactics
-- three times more than the agency received in the two years
before the settlement.  

In papers filed with the court, the agency charged that as much as
80 percent of the money CAMCO collects comes from consumers who
never owed the original debt in the first place.  Many consumers
pay the money to get CAMCO to stop threatening and harassing them,
their families, their friends, and their co-workers.  

According to the FTC, CAMCO buys old debt lists that frequently
contain no documentation about the original debt and in many cases
no Social Security Number for the original debtor.  CAMCO makes
efforts to find people with the same name in the same geographic
area and tries to collect the debt from them - whether or not they
are the actual debtor.  In papers filed with the court, the FTC
alleges that CAMCO agents told consumers -- even consumers who
never owed the money -- that they were legally obligated to pay.
They told consumers that if they did not pay, CAMCO could have
them arrested and jailed, seize their property, garnish their
wages, and ruin their credit.  All of those threats were false,
according to the FTC.  

The FTC says that grossly abusive behavior, including shouting and
profanity, are commonplace tactics with CAMCO.  Collectors told
consumers:

    -- We're "going to hound you 'til the day you die";

    -- We will "continue to hunt you"; and

    -- "We'll get you one way or another."  

CAMCO collectors also ignored restrictions on who and when they
could call.

In addition to CAMCO, the complaint names RM Financial Services,
Inc., Capital Properties Holdings, Inc., Caribbean Asset
Management, Ltd., Reese Waugh, Jerome Kuebler, Eric Woldoff,
George Othon, and Jeffrey Garrington.  

CAMCO's offices are located in Rockford and Schaumberg, Illinois.  
RM Financial is based in Marietta, Georgia.  Caribbean Asset
Management is based in Montego Bay, Jamaica.


CATHOLIC CHURCH: Spokane Hires Paine Hamblen as General Counsel
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Washington
approves the Roman Catholic Church of the Diocese of Spokane's
request to employ Paine, Hamblen, Coffin, Brooke & Miller, LLP, as
general restructuring counsel for its Chapter 11 case.

Judge Williams clarifies that Paine, Hamblen, Coffin, Brooke &
Miller, LLP, will not perform any services for Spokane, which
services are or may be covered by insurance policies issued to
Spokane, and paid for by the insurers, without prior Court
approval.

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.  

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 Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004.  Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Archdiocese
in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed $11,162,938 in total
assets and $81,364,055 in total debts. (Catholic Church Bankruptcy
News, Issue No. 14; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


CENTENNIAL COMMS: Moody's Reviews Ratings for Possible Upgrade
--------------------------------------------------------------
Moody's Investors Service placed the ratings of Centennial
Communications Corp., and its subsidiary, Cellular Operating
Company, on review for possible upgrade.  The review is based on
the continued good operating and financial performance of the
company as well as the reduction of debt with the proceeds from
the sale of the cable television assets.

The ratings placed on review are:

   -- Senior implied B3

   -- Issuer rating:

      -- Senior secured bank credit facility B2

      -- 10.125% Senior Notes due 2013 Caa1

      -- 8.125% Senior Notes due 2014

      -- 10.75% Senior Subordinated Notes due 2008

Since Moody's last rating action in January 2004, Centennial
Communications has grown revenues and EBITDA at double digit
rates, and pro forma for the redemption of $115 million of 10.75%
sub notes, total debt will have declined materially.  Moody's
review will focus on the prospects for continued revenue and cash
flow growth, as well as Centennial's capacity to generate free
cash flow to levels more commensurate with its debt burden.

Headquartered in Wall, New Jersey, Centennial Communications is a
provider of wireless services in two rural clusters in the US, as
well as in Puerto Rico, the Dominican Republic and the US Virgin
Islands.  The Company also provides voice, data, video and
Internet service via broadband wireline networks.


EAGLEPICHER INC: Moody's Junks $250 Million Sr. Debt Rating
-----------------------------------------------------------
Moody's Investors Service downgraded the ratings for both
EaglePicher Incorporated and parent EaglePicher Holdings, Inc., in
connection with the company's Dec. 27, 2004, announcement that it
is once again revising downward earnings guidance for fiscal year
2004.  

EaglePicher additionally stated that in the event that actual
performance falls at the low end of the company's revised EBITDA
range, potential now exists for non-compliance with certain
financial covenants under its credit agreement and accounts
receivable securitization facilities by as early as the quarter
ended Nov. 30, 2004.  Moody's also revised the outlooks for both
rated entities to negative, from stable.

EaglePicher's latest revised guidance was announced only days
after the Dec. 13, 2004 execution of amendments to its credit
agreement and accounts receivable securitization facility which
materially modified the financial covenants in those agreements
for the quarter ended Nov. 30, 2004 and subsequent quarters
through the maturity of those agreements.  These amendments were
expected to ensure EaglePicher's ongoing liquidity and increase
the company's operating flexibility.

The rating actions taken:

   -- Downgrade to Caa1, from B3, of the rating for EaglePicher
      Inc.'s $250 million of 9.75% guaranteed senior unsecured
      notes due September 2013;

   -- Downgrade to B3, from B2, of the ratings for EaglePicher
      Inc.'s $275 million of guaranteed senior secured bank credit
      Facilities consisting of:

         -- $125 million revolving credit facility due August
            2008;

         -- $150 million ($142.8 million remaining) term loan B
            due August 2009;

   -- Downgrade to C, from Ca, of the rating of EaglePicher
      Holdings' $166.9 million current balance (including dividend
      accretion) of 11-3/4% cumulative redeemable exchangeable
      preferred stock mandatorily redeemable during March 2008;

   -- Downgrade to B3, from B2, of EaglePicher Holdings' senior
      implied rating; and

   -- Downgrade to Caa3, from Caa2, of EaglePicher Holdings'
      senior unsecured issuer rating.

According to EaglePicher's December 27, 2004 revised guidance, the
company expects to report revenues for the year ending November
30, 2004 of $705-to-$712 million, adjusted EBITDA of $70-to-$77
million, and credit agreement EBITDA of $80-to-$87 million.
EaglePicher's total debt, including the investment in its accounts
receivable program, is expected to be $426.3 million.

The sudden downward adjustment to the company's 2004 performance
expectations was primarily a byproduct of information voids caused
by U.S. Defense Security Service imposed restrictions on
EaglePicher headquarters management's access to financial and
operational details within the company's Defense and Space Power
unit, which currently generates in excess of 20% of consolidated
revenues.  

As a result of the restrictions, headquarters management only
recently learned about reduced margin booking rates for two long-
term contracts accounted for under the percentage of completion
method in this unit within EaglePicher's Power Group Segment
caused by increased foreign exchange rates and reduced
productivity performance and assumptions.

The reduced forecasted ranges are also due to several lot
acceptance test failures on battery programs, an inventory
adjustment, additional vacation and severance accruals and other
miscellaneous items, all within the Defense and Space Power unit.
For the past several months, EaglePicher has been in negotiation
with the U.S. Defense Security Service with regard to obtaining
permanent headquarters access to the Defense and Space Power unit
but no long-term resolution has been achieved to this point.

Upon identification of various matters of concern, certain members
of management at EaglePicher's headquarters were granted immediate
temporary access to more detailed Defense and Space Power
information and are in the process of reviewing such information
with the recently appointed chief financial officer of the unit.

As a result of the lowered guidance almost immediately following
execution of a significant loosening of the financial covenants
within the senior secured credit agreements, EaglePicher's
effective availability under the revolving credit facility and
accounts receivable securitization is nominal and liquidity
remains a foremost concern.

It is Moody's opinion that the company's free cash flow will be
negative during both fiscal years 2004 and 2005, which will
translate into increased debt levels.  EaglePicher notably
continues to invest heavily in joint ventures as well as capital
expenditures in excess of depreciation across most business lines.
Some of the most significant investments are notably being made
within the rapidly growing Defense and Space Power unit for which
EaglePicher's headquarters management presently has either limited
information or decision-making control.

EaglePicher's Hillsdale automotive segment continues to under-
perform due to lower average selling prices, the phase-out of
certain programs, lower industry production levels, and plant
restructuring and China start-up costs. Despite revenue increases,
the company's Wolverine automotive segment has also performed
below expectations due to increased steel costs and plant closure
costs and lower industry production levels.  EaglePicher's
Filtration and Minerals segment was hurt during 2004 by higher
natural gas prices and competitive pricing pressures which
management believes will be somewhat alleviated during 2005.

EaglePicher's ratings could potentially be further downgraded in
the event that liquidity concerns escalate due to weak performance
within one or more business units combined with continued high
levels of cash invested in capital improvements, acquisitions, and
restructuring actions, or in the event that headquarters
management becomes apprised of additional negative developments
within the Defense and Space Power unit over which it has limited
visibility or control.

Other negative developments which could affect ratings potentially
could include steadily rising and unhedged commodity costs,
material uninsured product liability issues, and evidence that the
provisions designed to defer cash payment for both preferred stock
dividends and redemption absent material leverage reduction are
ineffective.

EaglePicher's ratings or outlook could potentially be upgraded
once there is evidence of sustainable improvement in the company's
credit protection measures, financial covenants are further
loosened, headquarters management wins its appeal for regular
access to the records of the company's Defense and Space Power
Unit or the company decides to spin off this unit on favorable
terms, incremental debt reduction is achieved through a
combination of improved operations, strategic asset sales, and/or
an incremental equity infusion by equity sponsor Granaria Holdings
B.V., or the company continues to generate profitable new business
awards which incorporate increased diversification of its customer
base and product lines.

EaglePicher Incorporated, headquartered in Phoenix, Arizona, is a
diversified manufacturer of products for automotive, defense and
aerospace applications, in addition to other industrial arenas.
The company is organized into three strategic business units, or
reportable business segments.  These are the Automotive Segment,
the Technologies Segment, and the Filtration and Minerals Segment.
Annual revenues currently approximate $710 million.


EDGEN CORPORATION: S&P Puts B- Rating on $105 Million Senior Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating to specialty metals distributor Edgen Corporation.

At the same time, Standard & Poor's assigned its 'B-' senior
secured rating to Edgen's proposed $105 million senior secured
notes due 2011.  The outlook is stable.

"The senior secured debt is rated the same as the corporate credit
rating, based on our expectations that the level of Edgen's
priority liabilities, relative to its assets, will not place
bondholders at a material disadvantage in a bankruptcy," said
Standard & Poor's credit analyst Paul Vastola.  These newly
assigned ratings are based on preliminary terms and conditions and
subject to review upon reception of final documentation.

Proceeds from the proposed note offering, combined with
$24 million of equity from private equity investment firm
Jefferies Capital Partners and management will be used to
purchase the company from Harvest Partners Inc., and to pay about
$5 million in fees.  Total debt outstanding at the time of closing
will be $105 million.

The ratings on Baton Rouge, Louisiana-based Edgen reflect its:

   -- vulnerable niche position in the highly cyclical,
      competitive, and volatile specialty steel pipe industry;

   -- limited scope of operations;

   -- poor inventory turnover; and

   -- very aggressive debt leverage.  

These negatives acutely overshadow successful operating
restructuring efforts to improve the cost profile and the
expectation of gradually improving end markets.

Edgen is a distributor of specialty steel pipe, fittings, and
flanges used in oil and gas production and transmission,
petrochemical refining, and power generation end markets.  The
company focuses its sales on products that are used in
environments requiring resistance to highly corrosive or abrasive
materials, extreme temperature conditions, and high pressures.


EMERGENCY FILTRATION: Demands Delisting from the Berlin Exchange
----------------------------------------------------------------
Emergency Filtration Products, Inc. (OTCBB: EMFP) has demanded
delisting of the company's common stock from the Berlin-Bremen
Stock Exchange.  The company's common stock is currently listed on
the Berlin-Bremen Stock Exchange without the company's prior
request, approval or consent.  EFP is one of numerous U.S.
companies that have been added to the Berlin-Bremen Stock Exchange
without permission.  These listings may be part of an effort by
stock traders to avoid recently enacted SEC restrictions
prohibiting "naked short selling."  Such practices may allow for
market manipulation by selling non-existent shares of a stock in
an effort to force the price down.

Douglas K. Beplate, president, EFP, said, "We believe that this
unauthorized listing on the Berlin-Bremen Stock Exchange may have
contributed to the unusually high volume and volatility in our
share price.  We have no interest in having our stock trade on any
exchange that may subject EFP's common stock to price
manipulation.  EFP has authorized only the OTC Bulletin Board to
trade our shares, which is required by federal securities laws to
have rules and regulations in place to prevent fraudulent and
manipulative practices, to promote just and equitable principles
of trade, and to protect investors.  We want our stock price to
reflect only the intrinsic value of our business."

Separately, EFP is advising its shareholders to request delivery
of their stock certificates from their brokers in an effort to
thwart the naked short selling of stock that the company believes
is negatively affecting the price of the stock.  The company
expects this process will begin to force naked short sellers to
"cover" their positions in order to deliver the actual stock
certificates to shareholders.  A form letter requesting physical
delivery of share certificates has been posted on its Web site --
http://www.emergencyfiltration.com/formletter.htm-- for  
convenience.

EFP plans to employ additional means of thwarting naked short
selling in the coming weeks.  Therefore, the company believes it
will be advantageous to shareholders to have physical possession
of their stock certificates when these activities take place.  
Shareholders are encouraged to contact their brokers to request
their stock certificates immediately, as it could take anywhere
from several days to several weeks for the stock certificates to
be delivered from the clearing house to the shareholder's broker
and ultimately to the shareholder.  

EFP has no argument with legal short selling and believes that it
can serve a valuable economic purpose.  However, naked short
selling is illegal in the United States because it can manipulate
a share price, usually to the detriment of legitimate shareholders
and the company issuing the stock.

Short selling of a stock occurs when someone borrows shares of a
company stock and sells them, planning to buy the shares back
later at a lower price and return the shares to their rightful
owner.  "Naked" short selling is selling a stock without the
borrowing of actual shares, and never delivering the shares to
cover the short position within the days prescribed by the NASD
guidelines.  This has the effect of creating an artificial supply
of stock, thus artificially reducing the price of the stock.  
Although naked short selling is illegal in the United States, the
three-day settlement system run by the National Securities
Clearing Corp.  (NSCC) does not ensure that shares that are sold
in a transaction are ever delivered.

All shareholders should be aware that they are entitled to receive
their certificates.  The shareholder or their designated broker
should hold the certificates as part of a unified effort to thwart
naked short selling.  Once shareholders have possession of their
stock certificates, they would continue to use their brokers for
stock purchases and sales and would request the physical delivery
of all of their shares.  The certificates received by the
company's transfer agent for selling by investors would be
cancelled and a new certificate for an equal number of shares
would be issued in the name of the buyer.

EFP believes it is in the best interest of all shareholders to
request their stock certificates.  Until there is pressure to
deliver the stock certificates, naked short sellers profit on the
sale of shares they don't own at 100%.  Widespread demand for
delivery of stock certificates is expected to increase the demand
for the stock as naked short sellers attempt to cover their
position -- likely causing a short-term increase in price.  
Ultimately, once the market is cleansed of naked short sellers,
the price of the stock will more accurately reflect only the
performance of the company and the systemic factors that affect
all stocks over time -- not the actions of market manipulators
taking advantage of flaws in the electronic trading system.

                        About the Company  

Emergency Filtration Products Inc. --
http://www.emergencyfiltration.com/-- is an air filtration  
products manufacturer whose patented 2H Technology(TM) filter
system has produced filtration efficiencies of "greater than
99.99%" at a particulate size of 0.027 microns.  Its initial
products were developed for the medical market: the Vapor
Isolation Valve(TM) and RespAide(R) CPR Isolation Mask used for
resuscitation of respiratory/cardiac arrest cases; and the 2H
Breathing Circuit Filter for ventilators, respirators and
anesthesia circuitry.  Each has received FDA approval.  The
company also markets an Automated External Defibrillator Prep Kit
featuring RespAide; and the NanoMask(R), a nanotechnology-enhanced
environmental mask.  In addition to filtration products, the
company supplies Superstat(R), a modified hemostatic collagen, to
the U.S. military for surgery and extreme wound care.

                          *     *     *

                       Going Concern Doubt

In its Form 10-Q for the quarterly period ended Sept. 30, 2004,
filed with the Securities and Exchange Commission, Emergency
Filtration's auditors for its most recent fiscal year ended
Dec. 31, 2003, expressed substantial doubt in their report as to
the Company's ability to continue operating as a going concern due
to an accumulated deficit of $9,166,722 as of September 30, 2004.


ENER1 INC: Inks Letters of Intent to Acquire Giner Electrochemical
------------------------------------------------------------------
Ener1, Inc., (OTC Bulletin Board: ENEI) has signed letters of
intent to acquire Giner Electrochemical Systems, LLC, a privately
held company located in Newton, Massachusetts, that specializes in
the development of fuel cell technologies and products.  GES is
currently owned by Giner, Inc., and General Motors Corp.  GES will
maintain its existing GM multi-year contracts (totaling several
million dollars) and its broad research and development
relationship with GM going forward.

GES has contributed to the development of many new patented
technologies and products for fuel cell power generation,
including proton exchange membrane high-pressure electrolyzers for
gas production, regenerative fuel cells, and direct methanol fuel
cell stacks and systems.  In addition to its research and
development activities, GES builds and sells prototypes and custom
fuel cell products.  The company operates from a 25,000 square
foot, state-of-the-art facility in Newton, Massachusetts, with
over 40 employees.  It has the internal capabilities to design,
build, test and integrate all basic components of fuel cell and
electrolyzer devices.  The GES senior management team, including
Dr. Jose Giner, Chairman and Founder, and Dr. Anthony LaConti, CEO
and Vice Chairman, will remain in place through consulting and
employment agreements extending over the next several years.

Kevin Fitzgerald, Ener1's Chairman and CEO, said, "Our acquisition
of GES fits our strategy of partnering with successful companies
that will accelerate the achievement of our business objectives.  
GES is a recognized leader in the fuel cell industry.  The
Giner/GES operation has had an established revenue base and
positive net income.  In addition, GES has numerous ongoing
contracts, a contract backlog, and a strong and growing customer
base. GES is a strong complement to our fuel cell subsidiary,
EnerFuel, and an excellent fit for us."

"We are confident that Ener1 will be able to help us capitalize on
the research and development work we have done, and will continue
to do, in fuel cells, electrolyzers and related electrochemical
technologies," added Dr. LaConti.  "We believe that our ongoing
research and development efforts will benefit from this
transaction with Ener1.  We bring our revenue and contract backlog
to the relationship and believe the combined business, as well as
the technology synergy between the two companies, will have
increased capability to offer competitive fuel cell-related
products and services."

"We are very gratified to have the opportunity to join forces with
Drs. Giner and LaConti and the other preeminent industry experts
on their team to expand our capabilities in this emerging market
sector," added Fitzgerald.  "We believe that GES' substantial
capabilities in innovative research and development and
commercialization will mesh well with our existing resources."

                       About Ener1, Inc.

Ener1, Inc. (OTC Bulletin Board: ENEI) develops and markets new
technologies and products for clean, efficient energy sources.
Ener1 markets lithium batteries and battery packs through EnerDel,
its majority-owned venture with Delphi Corp.  Ener1 also develops
and markets nanotechnology- based materials and manufacturing
processes and components through its NanoEner, Inc. subsidiary.
Ener1 develops selected fuel cell components and provides fuel
cell-related testing services through its EnerFuel, Inc.
subsidiary.  Ener1's products have applications for markets that
include power tools and industrial equipment, medical devices,
hybrid vehicle propulsion and military communications.

                          *     *     *

In its amended Form 10-Q for the quarterly period ended Sept. 30,
2004, filed with the Securities and Exchange Commission, Ener1
disclosed that it has experienced net operating losses since 1997
and negative cash flows from operations since 1999 through
Sept. 30, 2004, and has an accumulated deficit of $70 million as
of Sept. 30, 2004.  It is likely that the Company's operations
will continue to incur negative cash flows through Sept. 30, 2005.
Also, should the company not be able to meet the terms of the
Senior Secured Convertible Debentures, $19,700,000 would become
immediately due.  Additional financing will be required to fund
the Company's planned operations through Sept. 30, 2005, and the
Company intends to seek additional debt or equity financing as
required.  If additional financing is not obtained, such a
condition, among others, will give rise to substantial doubt about
the Company's ability to continue as a going concern for a
reasonable period of time.  The condensed consolidated financial
statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the
amounts and classifications of liabilities that might be necessary
should the Company be unable to continue as a going concern.


EXIDE TECH: Fee Auditor Recommends Reduction of Kirkland Fees
-------------------------------------------------------------
Kirkland & Ellis, LLP, co-counsel to Exide Technologies, Inc., and
its debtor-affiliates, seeks $17,801,703 as final compensation for
services rendered from April 15, 2002, through April 16, 2004:

    Category                                 Hours       Total
    --------                                 -----       -----
    Bankruptcy Filing                        115.3     $28,448

    Adversary Proceeding and
       Contested Matter                    9,295.0   3,364,680

    Automatic Stay Matters                   743.7     253,115

    Case Administration                    3,226.1     742,072

    Cash Collateral/DIP Financing          1,964.7     832,104

    Claims Estimate, Objection and
       Resolution                            581.0     220,378

    Corporate and Securities Matters       3,432.4   1,510,930

    Creditors/Shareholder's Inquiries      1,054.7     325,810

    Disclosure/Plan/Confirmation           9,078.8   3,025,740

    Employee Issues                          584.8     298,456

    Environmental Matters - DIP              986.7     426,100

    Executory Contracts                    2,430.7     854,745

    Hearings                                 867.5     371,892

    Insurance                                 27.7      13,674

    K&E Fee Application and Monthly
       Statements                            577.0     160,142

    Other Fee Applications                    47.8      12,346

    Reclamation                               83.1      23,590

    Retention of Professionals               370.3     129,157

    Schedules/Statements of Financial
       Affairs                               114.6      31,639

    Tax Issues                               476.5     257,782

    Travel                                   314.1      89,212

    U.S. Trustee                              46.7      25,238

    Use, Sale or Lease Property or
       Abandonment                           294.7      98,876

    Utilities                                197.2      57,870

    Keystone Leasing Adversary Proceeding    865.7     305,442

    EnerSys, Inc., Potential Complaint    10,386.2   3,021,740

    SWIB Litigation                           38.5      12,812

    Former Officers Litigation               356.0     105,954

    Margulead, Ltd. vs. GNB Technologies     459.6     219,693

    Exit Financing                         2,059.0     744,090

    FCPA Compliance Advice                   258.2      76,388

    Preference Actions                       531.9     131,914

    Level 3 Litigation                        74.1      29,646
                                          --------   ---------
                                          51,940.3 $17,801,703

Furthermore, Kirkland & Ellis seeks reimbursement of $1,867,055
for expenses incurred during the Final Fee Period:

          Expense                           Amount
          -------                           ------
          Telephone                        $37,878
          Fax Telephone Charge               1,090
          Fax Charge                        13,696
          RightFAX Charge                        4
          Standard Copies                  134,214
          Binding                              822
          Tabs/Indexes/Dividers                994
          Color Copies                      12,126
          Color Copies (11 x 17)                63
          Exhibit Labels                       568
          Scanned Images                    11,634
          CD-ROM Duplicates                  4,230
          CD-ROM Master                        660
          Postage                            4,297
          Overnight Delivery                63,668
          Overnight Delivery Refund           (249)
          Outside Messenger Services         8,541
          Local Transportation               7,611
          Travel Expense                   151,602
          Airfare                          307,343
          Transportation to/from airport    22,264
          Travel Meals                      30,173
          Car Rental                         5,952
          Other Travel Expenses              7,253
          Court Reporter Fee/Deposition     92,731
          Filing Fees                          281
          Appearance Fees                      325
          Calendar/Court Services              945
          Other Court Costs and Fees            73
          U.S. Local Counsel Fees            7,516
          Foreign Local Counsel              1,111
          Expert Fess                        1,858
          Professional Fees                  6,288
          Investigators                     21,351
          Process Server Fees                  300
          Court Reporter Fee/Trail               9
          Witness Fess                         251
          Trial Exhibits                       250
          Trail Office Expenses              4,593
          Other Trial Expenses               3,651
          Outside Computer Services            460
          Outside Paralegal Assistance      13,698
          Outside Copy/Binding Services    531,687
          Working Meals/K&E only             1,896
          Working Meals/K&E and Others      11,945
          Information Broker Doc/Svcs      117,185
          Library Document Procurement         350
          Computer Database Research       101,053
          Trademark Scan                        52
          Overtime Transportation           25,400
          Overtime Meals                     2,142
          Overtime Meals - Attorney         11,350
          Secretarial Overtime              33,595
          Word Processing Overtime          31,016
          Overtime Meals - Legal Assistant     571
          Rental Expense                     6,496
          Leased Equipment                   2,629
          Miscellaneous Office Expense       8,444
          Cash Credits                        (880)

                        U.S. Trustee Objects

The United States Trustee for Region 3 notes that "[t]he amount
of fees [$3,025,739.50] requested for the plan, disclosure
statement and confirmation process appears excessive under the
circumstances of these jointly administered cases."

To resolve the Objection, Kirkland & Ellis and the United States
Trustee have agreed to a $325,000 reduction in fees.

                        Fee Auditor's Report

Warren H. Smith of Warren H. Smith & Associates, PC, fee auditor
in the Debtors' Chapter 11 cases, recommends the approval of
Kirkland & Ellis':

    (a) fees for $17,454,985 -- $17,801,703 minus $346,718

        The Fee Auditor recommends a reduction in fees in the
        fourth interim period and the current interim period,
        which final reports have not yet been considered by the
        Court.  The Fee Auditor also recommends a reduction in
        fees for certain additional fees of $990 requested by
        Kirkland & Ellis in error.  Moreover, the total
        recommended reduction reflects the $325,000 reduction
        agreed to by Kirkland & Ellis to resolve the U.S.
        Trustee's Objection;

        and

    (b) expenses for $1,862,240 -- $1,867,055 minus $4,815

        The Fee Auditor recommends a reduction in costs in the
        fourth interim period and the current interim period,
        which final reports have not yet been considered by the
        Court.  The Fee Auditor also recommends a reduction in
        costs of $443 requested by Kirkland & Ellis in error.

Headquartered in Princeton, New Jersey, Exide Technologies, Inc.,
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. 59; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


FEDERAL-MOGUL: Proponents Insist on Estimation of T&N Claims
------------------------------------------------------------
As previously reported, Federal-Mogul Corporation and its debtor-
affiliates, the Official Committee of Unsecured Creditors, the
Official Committee of Asbestos Claimants, the Official Committee
of Equity Security Holders, the Legal Representative of Future
Asbestos Claimants, and JPMorgan Chase Bank, as Administrative
Agent for the Debtors' prepetition lenders, asked the United
States Bankruptcy Court for the District of Delaware to estimate
the claims of T&N Pension Trustee Limited and Alexander Forbes
Trustee Services Limited relating to the T&N Pension Scheme for
the purpose of:

   -- voting on the Third Amended Joint Plan of Reorganization;
      and

   -- distributions in the Debtors' cases on account of their
      claims.

But the T&N Trustees argued that the Plan Proponents' request is
aimed at an English creditor's English-law-governed claims against
English Debtors in plenary English insolvency proceedings.  
According to the T&N Trustees, the Plan Proponents have
acknowledged that the Third Amended Joint Plan does not affect the
sole and exclusive jurisdiction of the English Court in conducting
the administration of the U.K. Debtors under English law and in
relation to any Scheme of Arrangement or Company Voluntary
Arrangement affecting any of the U.K. Debtors.  The Proposed Plan
further states that if the U.K. Debtors were liquidated, the
Pension Trustees' claims would be treated in accordance with
applicable English insolvency laws.

Thus, T&N Pension Trustees asked the Court to deny the Plan
Proponents' Estimation Motion.

                          *     *     *

The Plan Proponents point out that with respect to the U.K.
Debtors, the Third Amended Plan provides in:

    -- Section 8.16.1 that the Plan Proponents will work toward an
       agreement with the Administrators to recommend parallel
       Schemes of Arrangement and Voluntary Arrangements or toward
       Consensual Marketing Procedures;

    -- Section 8.16.2 that in case the efforts stated in Section
       8.16.1 do not succeed, the Plan Proponents will solicit
       proxies from creditors to direct the Administrators to
       recommend parallel Schemes of Arrangement and Voluntary
       Arrangements or discharge the U.K. administration
       Proceedings; and

    -- Section 8.16.4 that holders of claims against the U.K.
       Debtors, other than holders of Asbestos Personal Injury
       Claims, will receive no distributions under the Plan, but
       instead will receive any and all distributions on account
       of their claims pursuant to the U.K. administration
       proceedings in accordance with U.K. insolvency laws.

Representing JPMorgan Chase Bank, one of the Plan Proponents,
Mark D. Collins, Esq., Richards, Layton & Finger, P.A., in
Wilmington, Delaware, relates that only if the efforts provided in
Sections 8.16.1 and 8.16.2 fail will the Non-Consensual Marketing
Procedures be implemented and only then will the provisions of
Section 8.16.4 be operative.

The T&N Pension Trustees concluded and would like the Bankruptcy
Court to conclude that the provisions of Section 8.16.4 will be
operative, so that they can boot strap into the argument that the
Court need not and should not estimate their claims in aid of
confirmation, Mr. Collins remarks.

Mr. Collins tells Judge Lyons that the Plan Proponents will
continue to proceed pursuant to Sections 8.16.1 and 8.16.2 of the
Plan and expect to continue to do so after the Plan is confirmed.

                  Estimation Will Aid Confirmation

An estimation of the T&N Pension Trustees' claims is necessary to
aid the Court at the Confirmation Hearing in its:

    -- feasibility determinations; and

    -- determinations whether the Unsecured Claims classes have
       accepted the Plan.

In arguing that the liquidation of their claims will not unduly
delay the bankruptcy proceedings, the Pension Trustees presented
an incomplete picture of the time period required to wind up the
T&N Pension Scheme, if indeed that is their eventual course of
action.  Even assuming a wind-up occurs, the process for winding
up the T&N Pension Scheme and liquidating the T&N Pension
Trustees' claims will only just have begun in early 2005, contrary
to the T&N Pension Trustees' assertions in the Objection.  "It
would be extraordinary, if not impossible, for the T&N Pension
Trustees to have received pricing quotes and to have identified an
insurer willing to provide annuities sufficient to cover the
liabilities of the Pension Scheme at any point in the near
future," Mr. Collins points out.

The Plan Proponents believe that even in the event of a wind-up,
the T&N Pension Trustees' claims will need to be appropriately
discounted and estimated to account for the likelihood that the
T&N Pension Trustees would have to purchase annuities over a
protracted period of time.

The T&N Pension Trustees' assertion that a wind-up of the Pension
Scheme is the appropriate course and should be assumed in
determining their claim at the Confirmation Hearing is fraught
with inconsistencies and contradictions.  The T&N Pension
Trustees have taken several positions that are irreconcilable:

    (1) The T&N Pension Trustees would run the Pension Scheme as a
        closed fund, rather than winding it up, if they received
        from the Debtors an amount commensurate with what they
        expect to receive in a controlled realization;

    (2) While the Administrator is performing a controlled
        realization, the T&N Pension Trustees will wind up the
        Pension Scheme; and

    (3) A wind-up is independent of commercial reasonableness and
        is mandated by U.K. law.

The T&N Pension Trustees said that a wind-up is mandated by U.K.
law if the T&N Pension Trustees receive a lesser value from the
Plan Proponents than that provided by the "Let it Run" proposal.
But the T&N Pension Trustees refused to take an alternative
settlement offer to the U.K. Court to ask for directions as to
whether the Plan Proponents' monetary proposal was sufficient to
avoid a wind-up.  The T&N Pension Trustees would like to debate
critical legal and factual issues related to their alleged $1.5
billion claim through an exchange of letters.  The only way to get
to the bottom of the issues plaguing a determination of the
T&N Pension Trustees' claims is through a formal discovery and
briefing process, Mr. Collins says.

In addition, the absence of a claims bar date does not indicate
that the request for estimation is not necessary or warranted,
Mr. Collins notes.  A bar date, as it pertains to the T&N Pension
Trustees' claims, would serve no purpose because the Plan
Proponents are fully aware of the existence of the claims.
However, the estimation proceeding is necessary to aid
confirmation and to force the parties' hands in an effort to
achieve resolution.

              U.K. Pension Law v. U.S. Bankruptcy Law

The primary problem of the T&N Pension Trustees' primary obligor,
Turner & Newall, is its U.S. asbestos exposure.  Mr. Collins
reiterates that the only resolution of that problem requires a
Section 524(g) trust mechanism and that is only available through
the insolvency proceeding with the level of support from asbestos
claimants required by Section 524(g).  That level of support
requires the support of U.S. asbestos claimants whose claims
constitute 95% of total asbestos claims against T&N.  Accordingly,
Mr. Collins asserts, the U.S. bankruptcy process is not the source
of the problem, but the solution.

The Debtors have not asked the Court to displace UK pension law in
estimating the T&N Pension Trustees' claims under U.S. bankruptcy
law.  Instead, in accordance with applicable U.S. bankruptcy
principles, the Plan Proponents ask the U.S. Court to make a
determination as to the allowability and amount of those claims.

The Pension Trustees allege that their claims can only be
estimated after a Scheme of Arrangement or Voluntary Arrangement
is promoted or liquidation occurs.  However, they have sought to
stop the promotion of any Scheme of Arrangement and Voluntary
Arrangements that parallel the Plan unless the Plan Proponents
meet their demands.

                Full Hearing on Estimation is a Must

The T&N Pension Trustees make a number of arguments that require a
full and fair hearing on the estimation of their claims.  By this
motion, the Plan Proponents seek procedures to address each of
these issues so that the Plan Proponents and the Pension Trustees
can fully evaluate the claim after discovery and briefing and the
Court can carefully consider the arguments and evidence presented
by each party.

"If the T&N Pension Trustees desire a candid exchange of
information then they should welcome a discovery process where
questions are answered under oath and documents are exchanged.
And as 'fiduciaries who have no pecuniary interest in augmenting
the size of their claims,' the T&N Pension Trustees should have no
objection to a court process that determines their claims,"
Mr. Collins contends.

For these reasons, the Plan Proponents ask Judge Lyons to overrule
the T&N Pension Trustees' objection to claims estimation.

Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest  
automotive parts companies with worldwide revenue of some
$6 billion.  The Company filed for chapter 11 protection on
October 1, 2001 (Bankr. Del. Case No. 01-10582).  Lawrence J.
Nyhan, Esq., James F. Conlan, Esq., and Kevin T. Lantry, Esq., at
Sidley Austin Brown & Wood, and Laura Davis Jones, Esq., at
Pachulski, Stang, Ziehl, Young, Jones & Weintraub, represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $10.15 billion in
assets and $8.86 billion in liabilities.  (Federal-Mogul
Bankruptcy News, Issue No. 70; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


FINOVA GROUP: To Make Partial Prepayment on Notes on Feb. 15
------------------------------------------------------------
The FINOVA Group, Inc., will make a partial principal prepayment
on February 15, 2005, to holders of record as of 5:00 p.m., New
York City time, on Feb. 8, 2005, on its 7.5% Senior Secured Notes
Due 2009 with Contingent Interest Due 2016.   

Richard Lieberman, the Company's Senior Vice President, General  
Counsel & Secretary, says that the partial principal prepayment  
is $59,358,980, together with accrued interest on the portion of  
the principal being repaid up to but excluding the Prepayment  
Date.

On Jan. 4, 2005, FINOVA advised The Bank of New York, the Trustee
of the Notes, that it would make the partial prepayment.  
Including the February 2005 prepayment, FINOVA will have prepaid  
35.0% of the $2,967,949,000 principal amount outstanding as of  
December 31, 2003.

That prepayment plus the other prepayments of principal that  
FINOVA has made on the Notes are:

                                                     Cumulative %
                                       Principal     of Principal
Prepayment Date     Record Date        Amount        Prepaid
---------------     -----------        ---------     ------------
May 15, 2004*       May 10, 2004       $237,500,000    About 8%
August 16, 2004     August 9, 2004     $326,410,310         19%
October 15, 2004    October 7, 2004    $118,717,960         23%
November 15, 2004   November 5, 2004   $118,717,960         27%
January 18, 2005    January 10, 2005   $178,076,940         33%
February 15, 2005   February 8, 2005    $59,358,980         35%

* Paid on May 17, 2004

The Trustee has agreed to issue this Notice of Partial Prepayment  
to holders of Notes:


                   NOTICE OF PARTIAL PREPAYMENT

                       The FINOVA Group Inc.

             7.5% Senior Secured Notes Maturing 2009

                With Contingent Interest Due 2016

                       CUSIP No. 317928AA7*


     To: The Holders of the FINOVA Group Inc.'s 7.5% Senior Notes
         due (the Notes)


     NOTICE IS HEREBY GIVEN, pursuant to Sections 3.03 and 3.07
     of the Indenture dated as of August 22, 2001 (the
     "Indenture") between The FINOVA Group Inc., as Issuer, and
     The Bank of New York, as Trustee, that $59,358,980 aggregate
     principal amount (the "Partial Prepayment") of the Issuer's
     7.5% Senior Secured Notes Maturing 2009, with Contingent
     Interest Due 2016 (the "Notes") will be prepaid February 15,
     2005 (the "Prepayment Date"), together with accrued interest
     on the portion of principal being repaid up to but excluding
     the Prepayment Date.  Prepayments will be made to holders of
     record as of 5:00 p.m., New York City time, on February 8,
     2005 (the "Record Date"), which is the fifth business day
     preceding the Prepayment Date.  Payments will be made pro-
     rata on the Notes.

     Payment of the Partial Prepayment on the Notes will be
     payable without physical presentation and surrender of the
     Notes to the Trustee, as Paying Agent.  The Trustee
     can be reached at the following address:


     If by Mail:                    If by Delivery:

     The Bank of New York           The Bank of New York

     P.O. Box 396                   111 Sanders Creek Parkway

     East Syracuse, New York 13057  East Syracuse, New York 13057

     Attn: Corporate Trust          Attn: Corporate Trust
           Operations                     Operations


     Provided that the Issuer makes the Partial Prepayment, the
     portion of the Notes prepaid will no longer be outstanding
     after the Prepayment Date other than the right of holders
     thereof to receive their pro rata share of the Partial
     Prepayment, and all rights with respect to the Notes to the
     extent of the Partial Prepayment will cease to accrue on the
     Prepayment Date.  Interest on the Notes to the extent of the
     Partial Prepayment will cease to accrue on and after the
     Prepayment Date.


     IMPORTANT NOTICE

     Federal tax law requires that the Trustee withhold 30% of
     your payment unless (a) you qualify for an exemption or (b)
     you provide the Trustee with your Social Security Number or
     Federal Employer Identification Number and certain other
     required certifications.  You may provide the required
     information and certifications by submitting a Form W-9,
     which may be obtained at a bank or other financial
     institution.

     By: The Bank of New York

     as Trustee

     January __, 2005

     * The Trustee is not responsible for the selection or use of
       the CUSIP number, nor is any representation made as to its
       correctness.  The CUSIP number is included solely for
       convenience of the Holders.

Headquartered in Scottsdale, Arizona, The Finova Group, Inc.,
provides commercial financing to small and mid-sized businesses;
other services include factoring, accounts receivable management,
and equipment leasing.  The firm has three segments: Commercial
Finance, Specialty Finance, and Capital Markets. FINOVA targets
such markets as transportation, wholesaling, communication, health
care, and manufacturing. Loan write-offs had put the firm on
shaky ground.  The Company and its debtor-affiliates and
subsidiaries filed for Chapter 11 protection on March 7, 2001
(U.S. Bankr. Del. 01-00697).  Daniel J. DeFranceschi, Esq., at
Richards, Layton & Finger, P.A., represents the Debtors.  FINOVA
has since emerged from Chapter 11 bankruptcy.  Financial giants
Berkshire Hathaway and Leucadia National Corporation (together
doing business as Berkadia) own FINOVA through the almost
$6 billion lent to the commercial finance company.


FLOW INT'L: Oct. 31 Balance Sheet Upside-Down by $9 Million
-----------------------------------------------------------
Flow International Corporation (Nasdaq: FLOWE), reported results
for its fiscal 2005 second quarter ended Oct. 31, 2004.   On a
consolidated basis, FLOW reported quarterly sales of $55.5 million
and a net loss of $275,000 or $0.02 diluted loss per share.  For
comparison, in the fiscal 2004 second quarter the Company reported
revenues of $43.7 million and a net loss of $1.9 million or $0.13
diluted loss per share, as restated, which included restructuring
charges of $857,000.  As previously announced, the Company has
reviewed and reconciled certain historical inter-company
transactions and made other corrections for the fiscal years ended
Apr. 30, 2004, 2003, and 2002, and all historical financial
information for periods prior to Apr. 30, 2004 discussed herein
has been restated to reflect the impact of such corrections.

"Even as we are putting the final touches on our restructuring
efforts, we posted another strong quarter of growth and cash
generation," said Stephen R. Light, FLOW's President and Chief
Executive Officer.  "We have largely succeeded in accordance with
the aggressive restructuring plan we laid out two years ago, which
was intended to revive this company and return it to operational
and financial health, based on a solid and well-capitalized core
business.  Now we look forward to the next stage of growth for our
company, in which we intend to extricate ourselves from a weighty
burden of debt obligations, return to profitability and deliver
genuine shareholder value."

For the six months ended Oct. 31, 2004, FLOW reported sales of
$104.4 million and a net loss of $2.6 million or $0.17 diluted
loss per share.  In comparison, for the six months ended Oct. 31,
2003, revenues were $80.9 million and the net loss amounted to
$7.6 million or $0.50 diluted loss per share, as restated, which
included restructuring charges of $1.2 million.

The second quarter Form 10-Q, which the Company filed on
January 10, 2005, was late, from its due date of December 15,
2004.  The delayed filing was the result of the restatement of
historical financial statements.  On Dec. 20, 2004, the Company
filed an amended Form 10-K/A for the year ended Apr. 30, 2004,
followed by the filing of its Form 10-Q for the fiscal 2005 first
quarter on Dec. 29, 2004.  Subsequent quarterly reports will
reflect restated historical financial statements for comparable
fiscal 2004 interim periods.  The restatements include corrections
to the Company's Consolidated Statements of Operations resulting
from the completion of reconciliations of historical inter-company
account balances and review of treatment of foreign currency gains
and losses on inter-company balances.  The amended Form 10-K/A
reflects foreign currency adjustments in Other Income (Expense),
net, as well as correction of entries originally recorded as
foreign currency revaluation that should have been recorded to
Cost of Sales and Provision for Income Taxes in the Consolidated
Statement of Operations.  Finally, a correction in the value
ascribed to the warrants issued to our subordinated lender in May
2001 has resulted in a reduction in interest expense, net.  
Appropriate tax provision entries were also made.  Accordingly,
financial statements filed prior to the amended Form 10-K/A and
other communications related to the periods covered by the
restatements should no longer be relied upon.

                        Financial Guidance

In conjunction with a potential PIPE or other equity transaction,
the Company is providing selected financial guidance for the
remainder of fiscal 2005.  The Company currently expects revenues
for the full fiscal 2005 to be between $201 million and $212
million.

                        About the Company

FLOW -- http://www.flowcorp.com/-- provides total system  
solutions for various industries, including automotive, aerospace,
paper, job shop, surface preparation, and food production.

As of October 31, 2004, Flow International's stockholders' deficit
is at $9,061,000 compared to a $9,552,000 deficit at April 30,
2004.


FRIENDS HOSPITAL: Moody's Places B2 Ratings for Possible Downgrade
------------------------------------------------------------------
Moody's has placed the B2 bond rating for Friends Hospital on
Watchlist for potential downgrade, affecting $7.5 million in
outstanding debt.  The outlook at the current B2 rating is
negative.

The Watchlist action reflects Friends' very low liquidity levels,
which declined further between fiscal year end June 30, 2003, and
2004.  Moody's analysis will include an assessment of Friends'
internal and external liquidity sources for debt payments and
other initiatives to improve operating performance.  Moody's
expects to conclude its analysis in the next 90 days.


HEALTH NET: Names Steve Nelson President of Northeast Division
--------------------------------------------------------------
Health Net, Inc. (NYSE:HNT) promoted Steven Hale Nelson as
president of Health Net of the Northeast -- among the largest
health plans in the New York metropolitan area.

Mr. Nelson assumes this role from Jeff Folick who has served as
interim president of the Northeast since Feb 2004 and is executive
vice president of Regional Health Plans and Specialty Companies.  
Last June, Mr. Nelson was appointed chief operating officer of
Health Net of the Northeast, following his tenure as senior vice
president, Senior Products Division, of the company's Medicare
division. Mr. Nelson will continue to report to Mr. Folick.

"Both Jeff and Steve have been key contributors to improving the
performance of the company while building a strong foundation on
which the Northeast can realize lasting value," said Jay Gellert,
president and chief executive officer, Health Net, Inc.  "Steve
was the leading force in creating our national Senior Products
Division.  His results-driven approach attracts and empowers the
kind of team players we need in leadership roles.  In addition,
Steve embodies the commitment to this company's long-term success
and to delivering results that will get us there," Mr. Gellert
added.

"The opportunity to lead this company comes at a time when Health
Net of the Northeast is positioned to re-establish itself as a
leading regional health plan," added Mr. Nelson.  "Currently,
there is a need in the tri-state region for a strong local
insurer.  With competitive products, outstanding customer service
and dedicated associates, Health Net of the Northeast is committed
to making a difference in the lives of the people and the
communities where we live and serve."

Mr. Nelson's health care career encompasses 15 years of executive
and management-level service.  Before joining Health Net in 2003,
he was chief operating officer and vice president of Network
Management of United Health Care's Arizona market.  Prior to that,
Mr. Nelson spent 10 years with the Henry Ford Health System.  
During his time with the Ford System, he held executive positions
in its 900-bed tertiary teaching hospital, the corporate office,
the 1,000-physician multi-specialty academic group practice, and
HAP - the system's 600,000 member health plan.

Mr. Nelson received his Bachelor of Arts degree in biology from
Portland State University and two master's degrees -- in health
services administration and in business administration -- from the
University of Michigan in Ann Arbor.

                        About the Company

Health Net, Inc., based in Woodland Hills, California, reported
total revenues of $5.8 billion for the first six months of 2004.  
As of June 30, 2004, the company had total membership of
approximately 5.2 million and reported shareholders' equity of
$1.3 billion.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 4, 2004,
Standard & Poor's Ratings Services lowered its counterparty credit
rating on Health Net, Inc., to 'BB+' from 'BBB-' and removed it
from CreditWatch.

Standard & Poor's affirmed or lowered its counterparty credit and
financial strength ratings on Health Net's various operating
subsidiaries and removed them from CreditWatch.  The outlook on
all these companies is negative.


IDI CONSTRUCTION: U.S. Trustee Picks 7-Member Creditors Committee
-----------------------------------------------------------------           
The United States Trustee for Region 2 appointed seven creditors
to serve on the Official Committee of Unsecured Creditors of
IDI Construction Company, Inc.'s chapter 11 case:

   1. Broadway Houston Mack Development LLC
      c/o Macklowe Properties
      Attn: Schuyler G. Carroll, Esq.
      142 West 57th Street, 15th Floor
      New York, New York 10019
      Phone: 212-484-3955

   2. Seele, L.P.
      Attn: Allen Turek, Esq.
      401 N. Michigan Avenue, Suite 2540
      Chicago, Illinois 60611
      Phone: 212-223-3562

   3. On Par Contracting Corp.
      Attn: Jim Murray
      230 South 5th Avenue
      Mount Vernon, New York 10550
      Phone: 914-668-5424

   4. Prestige Decorating and Wallcovering, Inc.
      Attn: Barbara Wolin
      27 William Street
      New York, New York 10005
      Phone: 212-943-6777

   5. Coastal Electric Construction Corp.
      Attn: Kevin J. Tomlinson
      185 Waverly Avenue
      Patchogue, New York 11772
      Phone: 631-289-3233

   6. Sage Electrical Contracting, Inc.
      Attn: Gene Sarabella
      651 Willowbrook Road, Suite 201
      Staten Island, New York 10314
      Phone: 718-370-3000

   7. S&G Inc.
      Attn: Moshie Granit
      1155 Manhattan Avenue
      Brooklyn, NY 11222
      Phone: 718-389-5602
   
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense.  They may investigate the Debtors' business and financial
affairs.  Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.  Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest.  If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee.  If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.

Headquartered in New York, New York, IDI Construction Company,
Inc., is engaged in the construction industry.  The Company filed
for chapter 11 protection on December 15, 2004 (Bankr. S.D.N.Y.
Case No. 04-17881).  Marilyn Simon, Esq., at Marilyn Simon &
Associates, represents the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it listed
total assets of $5,645,400 and total debts of $18,550,000.


IDI CONSTRUCTION: Section 341(a) Meeting Slated for Jan. 20
-----------------------------------------------------------           
The U.S. Trustee for Region 2 will convene a meeting of IDI
Construction Company, Inc.'s creditors at 3:30 p.m., on
January 20, 2005, at Office of the U.S. Trustee, 80 Broad Street,
Second Floor, New York, New York.  This is the first meeting 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.

Headquartered in New York, IDI Construction Company, Inc., is
engaged in the construction industry.  The Company filed
for chapter 11 protection on December 15, 2004 (Bankr. S.D.N.Y.
Case No. 04-17881).  Marilyn Simon, Esq., at Marilyn Simon &
Associates, represents the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it listed
$5,645,400 in total assets and $18,550,000 in total debts.


IMAGIS TECH: Closes Private Debt Placement & Settles $331,158 Debt
------------------------------------------------------------------
Imagis Technologies, Inc. (OTCBB:IMTIF) (TSX Venture Exchange:WSI)
(DE:IGYA) has closed the private placement and debt settlement
announced on Dec. 23, 2004.  The private placement consists of
2,857,785 units at $0.35 per unit, totaling cash proceeds of
$1,000,225 less cash finders' fees of $72,771 for net cash
proceeds of $927,454.  Each unit consists of one common share and
one common share purchase warrant.  Each warrant entitles the
holder to acquire one additional common share, in the capital of
Imagis at an exercise price of $0.45 until Jan. 11, 2006, or at
$0.55 until Jan. 11, 2007.  The common shares and warrant shares
are subject to a four month hold period which expires on May 10,
2005.

The Company has settled $331,158 in debt with an arm's-length
party.  The debt has been settled through the issuance of 946,166
units at $0.35 per unit.  Each unit consists of one common share
and one common share purchase warrant.  Each warrant entitles the
holder to acquire one additional common share in the capital of
Imagis at an exercise price of $0.45 until Dec. 24, 2006, or at
$0.55 until Dec. 24, 2007.  The common shares and warrant shares
are subject to a four month hold period which expires on April 24,
2005.

With respect to both the private placement and the debt
settlement, the securities in question will not be registered
under the United States Securities Act of 1933, as amended, and
may not be offered or sold within the United States or to, or for
the account or benefit of "U.S. persons," as such term in defined
in Regulation S promulgated under the Securities Act, except in
certain transactions exempt from the registration requirements of
the U.S. Securities Act.

                  About Imagis Technologies Inc.

Based in Vancouver, British Columbia, Imagis specializes in
developing and marketing software products that enable integrated
access to applications and databases.  The company also develops
solutions that automate law enforcement procedures and evidence
handling.  These solutions often incorporate Imagis' proprietary
facial recognition algorithms and tools.  Using industry standard
"Web Services", Imagis delivers a secure and economical approach
to true, real-time application interoperability.  The
corresponding product suite is referred to as the Briyante
Integration Environment (BIE).

                          *     *     *

                       Going Concern Doubt

In its Form 10-Q for the quarterly period ended Sept. 30, 2004,
filed with the Securities and Exchange Commission, Imagis
Technologies' disclosed that:

"The Auditors' Report on the Company's Dec. 31, 2003 Financial
Statements includes additional comments by the auditor on Canada-
United States reporting differences that indicate the financial
statements are affected by conditions and events that cast
substantial doubt on the Company's ability to continue as a going
concern.

"At Sept. 30, 2004, the Company has a working capital deficiency
of $1,201,322. For the nine-month period ended Sept. 30, 2004,
the Company has incurred a loss from operations of $4,187,757 and
a deficiency in operating cash flow of $1,830,245. Also, the
Company has incurred significant operating losses and net
utilization of cash in operations in all prior periods.
Accordingly, the Company will require continued financial support
from its shareholders and creditors until it is able to generate
sufficient cash flow from operations on a sustained basis.
Failure to obtain ongoing support of its shareholders and
creditors may make the going concern basis of accounting
inappropriate, in which case the Company's assets and liabilities
would need to be recognized at their liquidation values."


INTERSTATE BAKERIES: Equity Panel Wants Trading Wall Protocol Set
-----------------------------------------------------------------
The Official Committee of Equity Security Holders of Interstate
Bakeries Corporation asks the U.S. Bankruptcy Court for the
Western District of Missouri to determine that any Equity
Committee member engaging in the trading of securities for others
or for its own account as a regular part of its business will
not:

    (1) violate its fiduciary duties as an Equity Committee
        member; and

    (2) subject their interest or claims to possible disallowance,
        subordination, or other adverse treatment,

by trading in the Debtors' stocks, notes, bonds or debentures or
buying or selling participations in any of the Debtors' debt
obligations or any other claims or interests not covered by Rule
3001(e) of the Federal Rules of Bankruptcy Procedure during the
pendency of the Debtors' Chapter 11 cases.

The Equity Committee asks the Court to allow Committee members to
trade in the Debtors' securities upon the establishment and
implementation of appropriate "Trading Walls."

A "Trading Wall" refers to procedures established by an
institution to isolate its trading activities from its activities
as a member of an official or unofficial committee.  A Trading
Wall typically involves:

    * staffing arrangements whereby the institution's personnel
      responsible for performing committee functions are different
      from the personnel responsible for performing trading
      functions;

    * physical separation of the office and file space used by
      those personnel;

    * establishment of procedures for securing committee-related
      files;

    * establishment of procedures for the delivery and posting of
      telephone messages;

    * separate telephone and facsimile lines for trading
      activities and committee activities; and

    * special common steps taken to establish a Trading Wall.

According to Brian W. Fields, Esq., at Sonnenschein Nath &
Rosenthal, LLP, in Kansas City, Missouri, the Securities Trading
Committee Member should be permitted to trade in the Debtors'
Securities as long as that Securities Trading Committee Member
establishes, effectively implements, and strictly adheres to
information blocking policies and procedures to prevent:

     (i) the Securities Trading Committee's trading personnel from
         using or misusing non-public information obtained through
         the performance of Equity Committee-related activities by
         that Securities Trading Committee Member's personnel
         engaged in Equity Committee-related activities --
         Committee Member; and

    (ii) the Committee Member from receiving information regarding
         that Securities Trading Committee Member's trading in
         the Debtors' Securities in advance of the trades.

Mr. Fields explains that if a Securities Trading Committee Member
is barred from trading Securities during the pendency of the
Debtors' bankruptcy cases because of its duties to other equity
holders, it may risk the loss of a beneficial investment
opportunity for its clients.  Alternatively, if a Securities
Trading Committee Member resigns from the Equity Committee, its
interests may be compromised by virtue of taking a less active
role in the reorganization process.

"Securities Trading Committee Members should not be forced to
choose between serving on the Equity Committee and risking the
loss of beneficial investment opportunities or foregoing service
on the Equity Committee and possibly compromising its
responsibilities by taking a less active role in the
reorganization process," Mr. Fields asserts.  "A practical and
effective solution to these problems would be to allow those
Equity Committee members that adopt the [Trading Wall] procedures
to trade in the Securities while remaining members of the Equity
Committee."

The Equity Committee proposes these information-blocking
procedures:

    (a) The Securities Trading Committee Member will cause the
        Committee Member to execute a declaration acknowledging
        that it may receive non-public information and that it is
        aware of the Trading Wall procedures, which are in effect
        with respect to the Debtors' Securities;

    (b) The Committee Member will not share non-public Equity
        Committee information with any other employees, except
        employees of the Securities Trading Committee Member that,
        due to these employees' duties and responsibilities, have
        a need to know the information, including without
        limitation:

        -- senior management having direct and indirect oversight
           responsibility over the work or activities of the
           Committee Member with respect to their participation on
           the Equity Committee;

        -- employees providing assistance to the Committee Member,
           and

        -- regulatory, compliance, auditing and legal personnel.

        These personnel will not share the non-public Equity
        Committee information with other employees;

    (c) The Committee Member will keep non-public information
        generated from the Equity Committee activities in files
        inaccessible to other employees;

    (d) The Committee Member will receive no information regarding
        Securities Trading Committee Member's trades in Securities
        in advance of the trades, except that the Committee Member
        may receive the usual and customary internal and public
        reports showing the Securities Trading Committee Member's
        purchases and sales and the amount and class of claims and
        securities owned by the Securities Trading Committee
        Member, including the Debtors' Securities; and

    (e) To the extent applicable, the Securities Trading Committee
        Member's compliance department personnel will review from
        time to time the Trading Wall procedures, as necessary, to
        insure compliance with those procedures, and keep and
        maintain records of their review.

The Equity Committee also asks the Court to confirm that any
Securities Trading Committee Member that, in the ordinary course
of their business, receives instructions from its clients to buy
or redeem all or a portion of its client's investments, may buy
or sell any securities, including the Debtors' Securities,
without violating its fiduciary duties as an Equity Committee
member.

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


INTERSTATE BAKERIES: Soliciting Consents for Retention Plan
-----------------------------------------------------------
On October 15, 2004, Interstate Bakeries Corporation and its
debtor-affiliates filed a supplement providing further information
regarding employee interim benefits, which were considered by the
Court at a hearing on October 21, 2004.  After the October
Hearing, the Court entered a supplemental Order granting certain
of the Interim Benefits on a final basis and authorizing the
Debtors to continue to provide the remaining Interim Benefits on
an interim basis until the December 14, 2004, Hearing.  The First
Supplemental Order also provides that all parties other than the
Debtors' secured lenders, the U.S. Trustee, the ad hoc group of
Equity Security Holders and the Official Committee of Unsecured
Creditors are precluded from raising further issues with or
objections to the Continued Interim Benefits.

                    Continued Interim Benefits

The Debtors have advised the Secured Lenders, the U.S. Trustee,
the Creditors Committee and the Official Committee of Equity
Security Holders that the Debtors are in the final stages of
developing a key employee retention plan.  The Debtors intend to
seek approval of the KERP at an omnibus hearing scheduled on
January 19, 2005.  In response, the Principal Parties ask the
Debtors to continue the final hearing regarding the Continued
Interim Benefits from the December Hearing to the January Hearing
to allow the Court to consider final approval of the Continued
Interim Benefits and the Debtors' KERP on the same date.
Pursuant to the request, the Debtors agreed to ask the Court to
enter a second supplemental order, which, among other things,
would continue the Continued Interim Benefits on an interim basis
through the conclusion of the January Hearing.

                       Termination Benefits

In the interest of full disclosure, the Debtors previously
disclosed the material severance obligations they expected to
incur and pay during the period from the Petition Date through
the December Hearing pursuant to the interim authority granted by
the Court with respect to the Severance Plans, including
severance pay, pension and retiree health benefits, medical
compensation benefits, vacation pay and an earned work credit:

    (a) aggregating about $60,000 to five former Employees who
        were terminated prepetition when the Debtors closed their
        bakery in Monroe, Louisiana;

    (b) aggregating about $1.6 million to Employees terminated as
        a result of the closure of the Debtors' bakery in Buffalo,
        New York;

    (c) up to $500,000 to certain other Employees that might be
        terminated in the ordinary course of the Debtors' business
        before the December Hearing; and

    (d) aggregating about $321,000 to certain route delivery
        Employees that might be terminated in the ordinary course
        of business.

According to Paul M. Hoffmann, Esq., at Stinson Morrison Hecker,
LLP, in Kansas City, the Debtors have paid the majority of the
Termination Benefits owed to the Terminated Buffalo Employees.
However, the Debtors have not yet paid Termination Benefits to
other former Employees, including the Terminated Monroe
Employees, the Other Terminated Employees or the Terminated
Delivery Employees.

The Debtors estimate that the approximate total amount of the
Termination Benefits payable to the Terminated Monroe Employees,
the Other Terminated Employees and the Terminated Delivery
Employees is $920,000:

      Terminated Monroe Employees             $62,000
      Terminated Delivery Employees           488,000
      Other Terminated Employees              381,000
                                            ---------
         Total                               $920,000

The Other Terminated Employees include:

    * certain former employees terminated in connection with the
      closure of the Buffalo facility, but who were terminated
      after the Terminated Buffalo Employees; and

    * 114 former employees who were terminated in the ordinary
      course of business when the Debtors closed certain of their
      retail stores.

Mr. Hoffmann states that the Terminated Retail Employees, which
include 73 union members who are affiliated with local unions
that are parties to collective bargaining agreements with the
Debtors, and 41 non-union Employees are entitled to receive
$177,000 in Termination Benefits, pursuant to the collective
bargaining agreements or the Severance Plans.

                  Additional Employee Termination

The Debtors anticipate that 217 Employees will be terminated as a
result of the closure of their bakery in Florence, South
Carolina.  Of the Terminated Florence Employees, 179 are union
members, who are affiliated with Bakery, Confectionary, Tobacco
Workers and Grain Millers International Union, AFL-CIO, CLC, and
38 are non-union Employees.

Pursuant to the Collective Bargaining Agreement by and between
the Debtors and the BCTWG or the Severance Plans, the Terminated
Florence Employees would be entitled to receive $2,200,000 in
Termination Benefits.

The Debtors continue to consider various opportunities to
rationalize their workforce, determine to terminate additional
Employees before the January Hearing and evaluate the magnitude
of the potential Termination Benefits for the Additional
Terminated Employees.  However, if the total amount of the
Termination Benefits payable to the Additional Terminated
Employees before the January Hearing exceeds $1,000,000, the
Debtors will confer with the Principal Parties regarding the
amount of the excess before paying any Termination Benefits to
the Additional Terminated Employees in excess of $1,000,000.

According to Mr. Hoffmann, the Debtors need to pay Termination
Benefits to Terminated Employees to avoid damaging Employee
morale.  Absent the payments, employee morale at the Debtors'
other bakeries and retail outlets, which has already been
adversely impacted by the commencement of the Debtors' Chapter 11
cases, will be adversely affected because the Employees may
believe they have no economic security with respect to potential
reductions in force.

"The problems associated with low morale, including, but not
limited to, poor job performance, increased absenteeism and
shrinkage, and the potential for employees to leave the Debtors'
employ, may result in serious disruption to ongoing operations
and hamper the Debtors' reorganization efforts," Mr. Hoffmann
says.  "The Debtors' workforce has a clear and direct day-to-day
impact [on] the success of the Debtors' business affairs."

The Debtors believe that paying the Termination Benefits to the
Terminated Employees, many of whom are union members, is a sign
of the Debtors' good-faith that will be well-received by the
unions and hopefully set an appropriate tone for the upcoming
negotiations with the unions.

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


JEAN COUTU: Failure to File Financials Prompts Default Notice
-------------------------------------------------------------
The Jean Coutu Group, Inc., confirmed that, in compliance with CSA
Staff Notice 57-301, it had filed a Notice of Default for failing
to file its financial statements for the second quarter on time.

As discussed in the Company's prior announcement, this Notice is
expected to result in a Management Cease Trading Order being
issued with effect from Jan. 12, 2005, which will preclude
officers, directors and specified insiders from trading in
securities of the Company until such time as the financial
statements are filed.  

The Company disclosed that it was not able to file its unaudited
interim financial statements for the 13-week period ended Nov. 27,
2004 which were due on Jan. 11.  The default was due to a
conversion of several distinct general ledger and reporting
systems into one integrated system following the completed
acquisition of Eckerd in July 31, 2004.  The Company expects to
file these financial statements no later than Jan. 25, 2005.

An Issuer Cease Trading Order may be imposed on March 12, 2005, if
the required financial statements are not filed by this time.  The
issuer may be imposed sooner if the Company fails to file its
Default Status Reports on a bi-weekly basis.

                        About the Company

The Jean Coutu Group (PJC) Inc. -- http://www.jeancoutu.com/-- is  
the fourth largest drugstore chain in North America and the second
largest in both the eastern United States and Canada.  The Company
and its combined network of 2,209 corporate and affiliated
drugstores (under the banners of Eckerd, Brooks, PJC Jean Coutu,
PJC Clinique and PJC Sant, Beaut,) employ more than 59,600 people.

The Jean Coutu Group's United States operations employ over 45,600
persons and comprise 1,888 corporate owned Eckerd and Brooks
drugstores located in 18 states of the Northeastern, mid-Atlantic
and Southeastern United States.  The Jean Coutu Group's Canadian
operations and the drugstores affiliated to its network employ
over 14,000 people and comprise 321 PJC Jean Coutu franchised
stores in Quebec, New Brunswick and Ontario.

                          *     *     *

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


KINETICS GROUP: Fitch Withdraws 'B' Rating on $55 Million Sr. Debt
------------------------------------------------------------------
Fitch Ratings withdrew the 'B' rating on Kinetics Group Inc.'s
$55 million senior secured bank facility.  The rating is withdrawn
following the sale of Celerity Group Inc., Kinetics' previous
outsourced manufacturing services unit, to Texas Pacific Group,
which was completed in December 2004.  The proceeds from the sale
of Celerity are expected to be used to fully repay the amounts
outstanding under the bank facility.


LAIDLAW INTERNATIONAL: Details Short-Term Incentive Plan
--------------------------------------------------------
Effective on September 1, 2004, Laidlaw International, Inc.'s  
Compensation Committee adopted, subject to stockholder approval,  
the Laidlaw International, Inc., Short-Term Incentive Plan.

The STIP is a performance-based incentive bonus plan under which  
Laidlaw employees who are designated by the Compensation  
Committee -- the covered employees -- are eligible to receive  
bonus payments.  The STIP has been adopted and is being submitted  
to Laidlaw's stockholders for approval so that bonuses payable by  
Laidlaw to its senior executives will be fully deductible for  
federal income tax purposes.  The STIP and its performance goals  
are subject to stockholder approval before any bonuses will be  
paid under the Plan.

Approval of the STIP requires a favorable vote of a majority of  
shares of Common Stock voted at the meeting in person or by  
proxy.  The STIP is not an equity compensation plan under the New  
York Stock Exchange Rules, therefore, broker non-votes will be  
considered in the vote.  Any shares of Common Stock present in  
person or by proxy at the Annual Meeting, but not voted for any  
reason, have no impact on the vote.

According to Laidlaw President and Chief Executive Officer Kevin  
E. Benson, the purpose of the STIP is to:

   -- provide an incentive for superior work;

   -- motivate Covered Employees toward even higher achievement
      and business results;

   -- tie their goals and interests to those of Laidlaw and its
      stockholders; and

   -- enable Laidlaw to attract and retain highly qualified
      employees.

                          Administration

The STIP will be administered by the Compensation Committee,  
which is appointed by the Board and which consists of at least  
two members of the Board who qualify as "outside directors" under  
Section 162(m) of the Internal Revenue Code of 1986, as amended,  
and the regulations and interpretations promulgated under the  
Code.  The Compensation Committee will have the sole discretion  
and authority to administer and interpret the STIP.

                       Bonus Determinations

A Covered Employee may receive a bonus payment under the STIP  
based on the attainment of performance objectives established by  
the Compensation Committee and related to one or more of the  
these corporate performance criteria with respect to Laidlaw or  
any of its subsidiaries:

   * earnings,
   * total stockholder return,
   * pre-tax income,
   * operating income,
   * net income,
   * cash flow,
   * earnings per share,
   * return on equity,
   * return on invested capital or assets,
   * cost reductions and savings,
   * funds from operations,
   * appreciation in the fair market value of Laidlaw's stock,
   * free cash flow,
   * cost of capital,
   * market share,
   * sales growth,
   * productivity improvements,
   * legal compliance,
   * acquisitions and dispositions,
   * corporate debt rating,
   * customer retention,
   * customer satisfaction, or
   * earnings before any one or more of:

     -- interest,
     -- taxes,
     -- depreciation or amortization.  

The Compensation Committee may establish additional criteria and  
may, at its own discretion, apply it selectively to certain  
Covered Employees.

The actual amount of future bonus payments under the STIP is not  
presently determinable.  However, the STIP provides that the  
maximum bonus for any Covered Employee will not exceed $3,000,000  
with respect to any of Laidlaw's fiscal year.

The STIP is designed to ensure that annual bonuses paid under the  
Plan to Covered Employees are deductible by Laidlaw, without  
limit under Section 162(m).  Section 162(m) places a limit of  
$1,000,000 on the amount of compensation that may be deducted by  
Laidlaw in any taxable year with respect to each "covered  
employee," within the meaning of Section 162(m).  However,  
certain performance-based compensation is not subject to the  
deduction limit.  The STIP is designed to provide this type of  
performance-based compensation to Covered Employees.  

Bonuses paid to Covered Employees under the STIP will be based on  
bonus formulas that are tied to one or more objective performance  
standards.  Bonus formulas for Covered Employees will be adopted  
in each performance period by the Compensation Committee no later  
than the latest time permitted by Section 162(m).

No bonuses will be paid to Covered Employees unless and until the  
Compensation Committee makes a certification in writing with  
respect to the attainment of the objective performance standards  
as required by Section 162(m).  Although the Compensation  
Committee may at its sole discretion, reduce a bonus payable to a  
Covered Employee, the Compensation Committee has no discretion to  
increase the amount of a Covered Employee's bonus.

Headquartered in Arlington, Texas, Laidlaw, Inc., now known as
Laidlaw International, Inc., -- http://www.laidlaw.com/-- is
North America's #1 bus operator.  Laidlaw's school buses transport
more than 2 million students daily, and its Transit and Tour
Services division provides daily city transportation through more
than 200 contracts in the US and Canada.  Laidlaw filed for
chapter 11 protection on June 28, 2001 (Bankr. W.D.N.Y. Case No.
01-14099). Garry M. Graber, Esq., at Hodgson Russ LLP, represents
the Debtors.  Laidlaw International emerged from bankruptcy on
June 23, 2003.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 27, 2004,
Moody's Investors Service has placed the long-term debt ratings of
Laidlaw International, Inc., under review for possible upgrade.
The review is prompted by the recent announcement by the company
that it had entered into a definitive agreement to sell both of
its healthcare businesses to Onex Partners LP, an affiliate of
Onex Corporation, for $820 million.  Net proceeds after fees and
assumption of a small amount of debt by the buyer is estimated at
$775 million, with a majority of the proceeds intended to be used
to repay substantial levels of Laidlaw's existing debt.  Moody's
has also assigned a Speculative Grade Liquidity Rating of SGL-2 to
Laidlaw International, Inc.  As part of the rating action, Moody's
has reassigned to Laidlaw International, Inc., certain ratings,
including the senior implied and senior unsecured issuer ratings,
originally assigned at Laidlaw, Inc., in order to reflect more
appropriately the company's current organizational structure.

As reported in the Troubled Company Reporter on Dec. 9, 2004,
Standard & Poor's Ratings Services placed its ratings, including
its 'BB' corporate credit rating, on Laidlaw International, Inc.,
on CreditWatch with positive implications.  The rating action
follows Laidlaw's announcement that it has entered into definitive
agreements to sell both of its health care companies, American
Medical Response and Emcare, to Onex Partners L.P. for
$820 million.  Laidlaw expects to receive net cash proceeds of
$775 million upon closing of the transaction, which is expected by
the end of March 2005.  Naperville, Illinois-based Laidlaw
currently has about $1.5 billion of lease-adjusted debt.


LAND O'LAKES: Inks New Pact with Qwest for Network Services
-----------------------------------------------------------
Qwest Communications International, Inc. (NYSE: Q) has expanded
its 20-year relationship with Land O'Lakes, Inc., a national
supplier of dairy foods and agricultural products, most notably
LAND O LAKES(R) butter.  Under a new, multi-year agreement, Qwest
will provide Land O'Lakes with a national frame relay network to
more than 80 locations around the country, so the company can
benefit from secure, reliable data connectivity for their business
applications.

Land O'Lakes, an Arden Hills, Minn.-based company, has been using
Qwest for local service for more than two decades.  The Qwest
portfolio of services has expanded, giving enterprise business
customers, such as Land O'Lakes, the opportunity to take advantage
of a wide range of Qwest business-class voice, data and Internet
protocol (IP solutions).

"We're pleased with our experience with Qwest because the account
team was focused on giving us the right network services to fit
our specific needs.  The project implementation process executed
well and all services were installed on time.  The reliability of
the Network and the ability of the account team to get the job
done, has confirmed we made the right choice with Qwest," said
Kirk Kluesner, Manager of Network Engineering, Land O'Lakes.

"Qwest is pleased to form this new agreement with Land O'Lakes
because it emphasizes how important our long-lasting relationships
have been to Qwest as we grow our enterprise business," said Cliff
Holtz, executive vice president, business markets group for Qwest.  
"Using new services such as voice over IP we expect to replicate
the success we've had with Land O'Lakes with other small, medium
and enterprise business customers who've worked with Qwest in the
past."

                       About Land O'Lakes

Land O'Lakes, Inc. -- http://www.landolakesinc.com/-- is a  
national farmer-owned food and agricultural cooperative with
annual sales of more than $6 billion.  Land O'Lakes does business
in all 50 states and more than 50 countries.  It is a leading
marketer of a full line of dairy-based consumer, foodservice and
food ingredient products across the United States; serves its
international customers with a variety of food and animal feed
ingredients; and provides farmers and ranchers with an extensive
line of agricultural supplies (feed, seed, crop nutrients and crop
protection products) and services.

                           About Qwest
   
Qwest Communications International Inc. (NYSE: Q) --
http://www.qwest.com/-- is a leading provider of voice, video and  
data services.  With more than 40,000 employees, Qwest is
committed to the "Spirit of Service" and providing world-class
services that exceed customers' expectations for quality, value
and reliability.

At Sept. 30, 2004, Qwest's balance sheet showed a $2,477,000,000
stockholders' deficit, compared to a $1,016,000,000 deficit at
Dec. 31, 2003.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 15, 2004,
Moody's Investors Service upgraded Land O'Lakes' speculative grade
liquidity rating to SGL-3 from SGL-4 and affirmed the company's B2
senior implied rating with a negative outlook.

The SGL upgrade reflects Moody's expectation that cash flow
generation over the next twelve months will be at levels that are
likely to cover capital spending, member payments, and required
debt amortization, though the company may need to access external
funds on an interim basis during the twelve months to cover
working capital needs.

The SGL upgrade also takes into account that Land O' Lakes'
refinancing transactions earlier this year reduced required term
loan amortization to a low level through 2008 and adjusted
financial covenants to levels that provide adequate cushion for
lower than expected earnings.

Land O'Lakes has adequate unused availability under its committed
revolver and receivables securitization facilities, which have
been extended to January 2007.


LANTIS EYEWEAR: Disclosure Statement Hearing Set for Jan. 19
------------------------------------------------------------        
The Honorable Allan L. Gropper of the U.S. Bankruptcy Court for
the Southern District of New York will convene a hearing at 11:00
a.m., on January 19, 2005, to consider the adequacy of the
Disclosure Statement explaining the Liquidating Plan of
Reorganization filed by Lantis Eyewear Corporation.

The Debtor filed its Disclosure Statement and Plan on December 10,
2004.

The Plan will establish a Creditor Trust on the Effective Date to
hold the Trust Assets for the benefit of Holders of Allowed
General Unsecured Claims pursuant to the terms of the Plan and the
Creditor Trust Agreement.  The Trust Assets consists of the cash
proceeds from the Debtor's liquidated Contributable Assets and
Excluded Assets.

The Plan contemplates the appointment by the Creditors Committee
of a Creditor Trustee who will manage the Creditor Trust and who
will be authorized to pursue claims belonging to the Debtor and
its estate for the benefit of the Holders of Allowed General
Unsecured Claims.

The Plan groups claims and interests into five classes and provide
for these recoveries:

   a) Class 1 consisting of Other Secured Claims will be paid in
      full with either deferred cash payments or the net proceeds
      from the sale of the cash collateral securing those claims;

   b) Class 2 consisting of Non-Tax Priority Claims will be paid
      in full on the Effective Date;

   c) Class 3 consisting of General Unsecured Claims will receive
      their Pro Rata Share of the assets in the Creditor Trust
      available for distribution;

   d) Class 4 consisting of Secured Lenders' Unsecured Claims will
      receive Subordinated Notes and will only be paid until all
      Allowed General Unsecured Claims are fully paid and the
      Creditor Trust Agreement is terminated; and

   e) Class 5 consisting of Equity Interests will not receive or
      retain any distribution of property under the Plan on
      account of those interests.

Full-text copies of the Disclosure Statement and Plan are
available for a fee at:

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

Objections to the Disclosure Statement, if any, must be filed and
served, today, January 14, 2005.

Headquartered in New York, New York, Lantis Eyewear Corporation --
http://www.lantiseyewear.com/-- is a leading designer, marketer
and distributor of sunglasses, optical frames and related eyewear
accessories throughout the United States.  The Company filed for
chapter 11 protection on May 25, 2004 (Bankr. S.D.N.Y. Case No.
04-13589).  Jeffrey M. Sponder, Esq., at Riker, Danzig, Scherer,
Hyland & Perretti, LLP, represents the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it listed $39,052,000 in total assets and $132,072,000 in total
debts.


LONG BEACH: Fitch Puts 'BB+' on $35 Mil. 2005-1 Certificate
-----------------------------------------------------------
Long Beach Securities Corporation's asset-backed certificates,
series 2005-1, which closed on Jan. 6, 2005, are rated by Fitch
Ratings:

     -- $2.807 billion classes I-A1, II-A1, II-A2, II-A3 'AAA';
     -- $159.25 million class M-1 'AA+';
     -- $99.75 million class M-2 'AA';
     -- $61.25 million class M-3 'AA-';
     -- $61.25 million class M-4 'A+';
     -- $43.75 million class M-5 'A';
     -- $42 million class M-6 'A-';
     -- $35 million class M-7 'BBB+';
     -- $35 million class M-8 'BBB';
     -- $35 million class M-9 'BBB-',
     -- $35 million class B-1 'BB+'
     -- $24.50 million class B-2 'not rated'.

The 'AAA' rating on the senior certificates reflects the 19.80%
credit enhancement provided by the:

     * 4.55% class M-1,
     * 2.85% class M-2,
     * 1.75% class M-3,
     * 1.75% class M-4,
     * 1.25% class M-5,
     * 1.20% class M-6,
     * 1% class M-7,
     * 1% class M-8,
     * 1% class M-9,
     * 1% class B-1 and
     * 0.70% unrated class B-2, as well as 1.75% over-
       collateralization -- OC.

Additionally, all classes have the benefit of monthly excess cash
flow to absorb losses.  The ratings also reflect the quality of
the mortgage collateral, strength of the legal and financial
structures, and Long Beach Mortgage Company's servicing
capabilities as master servicer.

Group I consists of first lien, fixed-rate (8.87%) and adjustable-
rate mortgage loans (91.13%), with principal balances that conform
to Fannie Mae and Freddie Mac guidelines.  Approximately 17.60% of
the loans are interest only for the initial two, three or five
years following origination.

The Group I mortgage loans had a cut-off date pool balance of
$2,384,632,512.69.  As of the cut-off date, Group I loans had a
weighted average original loan-to-value ratio -- OLTV -- of
80.84%.  Cash-out refinance loans accounted for approximately
39.11% of the Group I loans, condominiums accounted for
approximately 7.61%, and second homes accounted for approximately
0.78%.  The weighted average coupon -- WAC -- for the Group I
loans was 7.181%.  The average loan balance was $158,923 and the
weighted average FICO score for the Group I Loans was 630.  

The states that represent the largest portion of the Group I
mortgage loans were:

     -- California (31.55%),
     -- Illinois (7.54%),
     -- Florida (7.08%) and
     -- Texas (6.28%).

Group II consists of first lien fixed-rate (4.59%) and adjustable-
rate mortgage loans (95.41%), with principal balances that may or
may not conform to Fannie Mae or Freddie Mac guidelines.
Approximately 30.21% of the loans are interest only for the
initial two, three or five years following origination.  The Group
II mortgage loans had a cut-off date pool balance of
$1,115,368,758.86.  As of the cut-off date, Group II loans had a
weighted average OLTV of 80.43%.  Cash-out refinance loans
accounted for approximately 43.02% of the Group II loans,
condominiums accounted for approximately 4.42%, and second homes
accounted for approximately 1.61%.  The WAC for the Group II Loans
was 6.846%.  The average loan balance was $467,856 and the
weighted average FICO score for the Group II Loans was 634.

The states that represent the largest portion of the Group II
mortgage loans were:

     -- California (60.94%),
     -- New York (4.20%),
     -- Florida (3.60%) and
     -- Illinois (3.04%).

All of the mortgage loans were originated by Long Beach Mortgage
Company -- LBMC.  Long Beach Securities Corporation, a subsidiary
of LBMC, deposited the loans into the trust, which issued the
certificates.  For federal income tax purposes, one or more
elections will be made to treat the trust fund as a real estate
mortgage investment conduit.


LORAL SPACE: Judge Drain Approves Harrison Goldin as Examiner
-------------------------------------------------------------
The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York approved the appointment of Harrison
J. Goldin as the Examiner of Loral Space & Communications Ltd. and
its debtor-affiliates' bankrupt estates.

As previously reported, Judge Drain denied the Stockholders
Protective Committee's motion to appoint an examiner in December
but later reversed the order after Judge R.P. Patterson, Jr., of
the U.S. District Court sided with shareholders and directed for
the appointment of an examiner pursuant to Section 1104 of the
Bankruptcy Code.  Loral Stockholders Protective Comm. v. Loral
Space & Communications Ltd., No. 04-CV-8645 (RPP) (S.D.N.Y.
Dec. 23, 2004).

The shareholders wanted an examiner appointed to determine whether
or not Loral is undervaluing its assets.  They claim that the
Debtors have enough money to pay the shareholders contrary to what
is proposed in the Debtors' plan of reorganization.  

                          About the Plan

On Oct. 22, 2004, Loral Space filed a revised plan of
reorganization and a disclosure statement with the Bankruptcy
Court.  The Plan, which revises the terms of a plan previously
filed on Aug. 19, 2004, reflects a consensual agreement on
financial terms between Loral and the creditors' committee
appointed in the Chapter 11 Cases.  The Plan provides, among other
things, that:

      * Loral's two businesses, Satellite Manufacturing and       
        Satellite Services, will emerge intact as separate
        subsidiaries of reorganized Loral ("New Loral").  The
        Disclosure Statement establishes the enterprise value of
        New Loral at between approximately $650 million and
        approximately $800 million.

      * SS/L will emerge debt-free, but will guarantee $30 million
        of the new senior secured notes to be issued by the
        reorganized satellite services company ("New FSS").

      * The common stock of New Loral and the new senior secured
        notes of New FSS will be owned by Loral bondholders, Loral
        Orion bondholders and certain other unsecured creditors,
        as follows:

        -- Loral bondholders and certain other unsecured
           creditors will receive approximately 19.4 percent of
           the common stock of New Loral.

        -- Loral Orion unsecured creditors, including Loral Orion
           bondholders, will receive approximately 79.0 percent of
           New Loral's common stock plus $200 million in new         
           senior secured notes of New FSS.  These creditors also
           will be offered the right to subscribe to purchase
           their pro-rata share of an additional $30 million in
           new senior secured notes of New FSS.  This rights
           offering will be underwritten by certain creditors who
           will receive a fee payable in the notes.

        -- All other general unsecured creditors will have an
           option to elect to receive either their pro rata share
           of approximately 1.6 percent of New Loral common stock
           or their pro rata share of $30 million in cash, subject
           to adjustment for over-subscription or under-                
           subscription.

      * Existing common and preferred stock will be cancelled and
        no distribution will be made to current shareholders.
      
      * New Loral will emerge as a public company and will seek
        listing on a major stock exchange.

                        About the Company

Loral Space & Communications is a satellite communications
company.  It owns and operates a fleet of telecommunications
satellites used to broadcast video entertainment programming,
distribute broadband data, and provide access to Internet services
and other value-added communications services.  Loral also is a
world-class leader in the design and manufacture of satellites and
satellite systems for commercial and government applications
including direct- to-home television, broadband communications,
wireless telephony, weather monitoring and air traffic management.

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


MAGIC LANTERN: Completes Strategic Restructuring Plan
-----------------------------------------------------
Magic Lantern Group, Inc. (AMEX: GML) has completed several
restructuring initiatives to position it for future growth.  These
include:

   -- raising a total of approximately $4.2 million USD since
      September 2003;

   -- debt restructuring;

   -- the recent conversion of certain short-term debt into
      equity; and

   -- senior management appointments of seasoned entrepreneurial
      business executives, including Company CEO Bob Goddard, CFO
      Ron Carlucci and EVP of Global Sales and Marketing Jeff
      Lorenz.

President and CEO of MLG Bob Goddard stated, "Since my appointment
in Nov 2003, the Board of Directors has provided the latitude and
support for me to assemble a new team of specialists who bring a
broad and diverse professional background to the company.  Our
management now has the financial and marketing acumen to move the
company into several, new high-growth verticals.  While we will
increase our general core business, we've devoted substantial
resources and new technology to drive the profit potential of an
online, indexed video streaming component globally.  Our team is
now directing strategies to capture sales across these market
segments."

Mr. Goddard concluded, "Existing educational distribution
contracts, strong online web-sales along with new digital
streaming opportunities will push us aggressively into U.S. and
international markets.  These initiatives should propel total
revenues to $5 million CDN, or $4.1 million USD, in 2005.  The
successful completion of additional material digital sales and
other international initiatives could see our initial year-end
revenue projections significantly increase.  Our restructuring
also includes lowering costs, divesting of a non-performing analog
dubbing business, and restructuring and reducing our debt.  
Combined with our anticipated top-line growth, we expect to
generate positive EBITDA by mid year 2005."

MLG EVP of Global Sales and Marketing Jeff Lorenz, stated, "We
have streamlined our 'go to market' strategy providing greater
focus on content and technology as unique components of our
tremendous product offering.  In addition, with the implementation
of a new Customer Relationship Management (CRM) tool, a new sales
compensation structure, and an enhanced e-commerce infrastructure,
we are poised for a very exciting and very successful 2005."

                        About the Company

Magic Lantern Group, Inc. -- http://www.magiclanterngroup.com/--
operates several strategic subsidiaries and divisions, including
its core business for nearly 30 years, the global distribution of
videos and DVD's from more than 300 world-renowned producers.

                          *     *     *

                       Going Concern Doubt

In its Form 10-Q for the quarterly period ended Sept. 30, 2004,
filed with the Securities and Exchange Commission, the Company
said it has sustained substantial losses for the years ended
Dec. 31, 2003, 2002, and 2001.  The Company's working capital
deficiency at Sept. 30, 2004, was approximately $3,180,000, which
has increased since Dec. 31, 2003.

Failing additional equity financing solutions, the Company's
options for achieving a neutral cash flow portion include
factoring of accounts receivable and a corporate reduction of
discretionary investments and overall downsizing.  Also, the
Company is in negotiations to extend the terms of certain notes
previously issued by the Company, one in the amount of $500,000
Canadian dollars and certain others amounting collectively to
$950,000 U.S.  The notes due in September 2004 were extended for
an additional 90 days and the company anticipates that the
November 2004 note will be extended similarly.  The failure by the
Company to achieve any of the aforementioned goals or to raise
additional financing raises substantial doubt about its ability to
continue as a going concern.


MID-STATE RACEWAY: Has Until Feb. 1 to File a Chapter 11 Plan
-------------------------------------------------------------           
The Honorable Stephen D. Gerling of the U.S. Bankruptcy Court for
the Northern District of New York extended the period within which
Mid-State Raceway, Inc., and its debtor-affiliate, Mid-State
Development Corporation, have the exclusive right to file a
chapter 11 plan through and including February 1, 2005.  The
Debtors have until April 4, 2005, to solicit acceptances of that
plan from their creditors.

This is the Debtors' first extension of their exclusive periods.

The Debtors gave the Court three reasons militating in favor of an
extension of their exclusive periods:

   a) the Debtors' chapter 11 cases is complex and they still have
      several issues to resolve that will occupy the time and
      attention of their counsel and management;

   b) the Debtors will not use the extension to coerce or pressure
      the creditors into acceding to their reorganization demands;
      and

   c) the Debtors will use the extension to develop and pursue a
      consensual plan of reorganization in which the interests of
      all the creditors and other parties in interest will be
      considered.

Headquartered in Vernon, New York, Mid-State Raceway, Inc., --
http://www.vernondowns.com/-- operates a racetrack, restaurant
and gaming resort.  The Company and its debtor-affiliate filed for
chapter 11 protection on August 11, 2004 (Bankr. N.D. N.Y. Case
No. 04-65746).  Lee E. Woodard, Esq., at Harris Beach LLP,
represents the Debtors in their restructuring efforts.  When the
Debtor filed for protection, it listed estimated debts of $10
million to $50 million but did not disclose its assets.


MORGAN STANLEY: S&P Puts 'B-' Rating on $2.5M Class O Certificates
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Morgan Stanley Capital I Trust 2005-TOP17's
$980.8 million commercial mortgage pass-through certificates
series 2005-TOP17.

The preliminary ratings are based on information as of
Jan. 12, 2005.  Subsequent information may result in the
assignment of final ratings that differ from the preliminary
ratings.

The preliminary ratings reflect the credit support provided by the
subordinate classes of certificates, the liquidity provided by the
trustee, the economics of the underlying loans, and the geographic
and property type diversity of the loans.  Classes A-1, A-2, A-3,
A-4, A-AB, A-5, A-J, B, C, D, and E are currently being offered
publicly.  Standard & Poor's analysis determined that, on a
weighted average basis, the pool has a debt service coverage of
1.94x, a beginning LTV of 78.6%, and an ending LTV of 68.6%.

A copy of Standard & Poor's complete presale report for this
transaction can be found on RatingsDirect, Standard & Poor's Web-
based credit analysis system, at http://www.ratingsdirect.com/  
The presale can also be found on the Standard & Poor's Web site at
http://www.standardandpoors.com/  Select Credit Ratings,  
and then find the article under Presale Credit Reports.
   
   
                  Preliminary Ratings Assigned
            Morgan Stanley Capital I Trust 2005-TOP17
   
              Class         Rating           Amount
              -----         ------           ------
              A-1           AAA             $14,400,000
              A-2           AAA              23,000,000
              A-3           AAA              56,800,000
              A-4           AAA              85,600,000
              A-AB          AAA              58,200,000
              A-5           AAA             576,041,000
              A-J           AAA              74,784,000
              B             AA               20,841,000
              C             AA-               7,356,000
              D             A                11,034,000
              E             A-                9,808,000
              F             BBB+              6,129,000
              G             BBB               7,356,000
              H             BBB-              7,356,000
              J             BB+               2,452,000
              K             BB                3,678,000
              L             BB-               3,678,000
              M             B+                1,226,000
              N             B                 1,226,000
              O             B-                2,452,000
              P             N.R.              7,355,819
              X-1*          AAA             980,772,819**
              X-2*          AAA             962,024,000**
   
                      *Interest-only class
                        **Notional amount
                        N.R. - Not rated


NATIONAL CENTURY: Deadline to Object to Purcell Claim is Jan. 24
----------------------------------------------------------------
Purcell & Scott, L.P.A, has filed a proof of claim against
National Century Financial Enterprises, Inc., and its debtor-
affiliates.  Purcell & Scott, the Debtors and the Unencumbered
Assets Trust believe that it would be mutually beneficial to delay
the dispute concerning Purcell & Scott's Claim to allow an
opportunity for further investigation, dialogue and analysis.

At the parties' agreement, the Court rules that:

    (a) the Termination Date will be defined as the earlier of
        January 24, 2005, or seven calendar days after the filing
        by the Trust in any court of any claim or cause of action
        against Purcell & Scott;

    (b) any objection, response, or pleading contesting the
        Purcell & Scott Proof of Claim filed by the Debtors or the
        Trust on or before the Termination Date will be treated
        as though it had been filed on November 30, 2004; and

    (c) the parties' Stipulation is not intended and will not be
        deemed to toll or extend any filing deadline, including
        the Claims Objection Bar Date that may have expired prior
        to November 30, 2004; nor will the Stipulation cure any
        procedural defects, including without limitation any
        insufficient notice or service, in connection with any
        filing deadline, including the Claims Objection Bar Date.

Headquartered in Dublin, Ohio, National Century Financial
Enterprises, Inc. -- http://www.ncfe.com/-- through the CSFB  
Claims Trust, the Litigation Trust, the VI/XII Collateral Trust,
and the Unencumbered Assets Trust, is in the midst of liquidating
estate assets.  The Company filed for Chapter 11 protection on
November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235).  The Court
confirmed the Debtors' Fourth Amended Plan of Liquidation on
April 16, 2004.  Paul E. Harner, Esq., at Jones Day, represents
the Debtors.  (National Century Bankruptcy News, Issue No. 50;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


NATIONAL ENERGY: Court Approves Dynegy Claims Settlement
--------------------------------------------------------
In January 2004, Dynegy Marketing and Trade filed:

    (a) a $455,280 claim against NEGT Energy Trading - Gas
        Corporation; and

    (b) a $158,844 claim against NEGT Energy Trading - Power, LP.

ET Gas owes Dynegy Marketing $28,750 for prepetition services
rendered by Dynegy Marketing to ET Gas in October 2003.  The
$28,750 prepetition claim has not been included in any proofs of
claim filed by Dynegy Marketing.

Concurrently, Dynegy Power Marketing, Inc., filed a $16,765 claim
against ET Power.

The parties amicably agree to resolve all issues related to their
Claims pursuant to a stipulation, which the Court approved:

    (a) Dynegy Power is allowed:

        -- a $323,896 general unsecured claim against ET Power;
           and

        -- a $16,765 general unsecured claim against ET Power;

    (b) Dynegy Marketing is allowed:

        -- a $158,844 general unsecured claim against ET Power;
           and

        -- a $28,750 general unsecured claim against ET Gas; and

    (c) Dynegy Power and Dynegy Marketing consent to the
        disallowance of any proofs of claim filed against the NEG
        Debtors, with prejudice.  Dynegy Power and Dynegy
        Marketing will not file any additional claims in any of
        the NEG Debtors' Chapter 11 cases.

Headquartered in Bethesda, Maryland, PG&E National Energy Group,
Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas
Transmission, Inc.) develops, builds, owns and operates electric
generating and natural gas pipeline facilities and provides energy
trading, marketing and risk-management services.  The Company and
its debtor-affiliates filed for Chapter 11 protection on
July 8, 2003 (Bankr. D. Md. Case No. 03-30459).  Matthew A.
Feldman, Esq., Shelley C. Chapman, Esq., and Carollynn H.G.
Callari, Esq., at Willkie Farr & Gallagher, and Paul M. Nussbaum,
Esq., and Martin T. Fletcher, Esq., at Whiteford, Taylor &
Preston, L.L.P., represent the Debtors in their restructuring
efforts.  When the Company filed for protection from its
creditors, it listed $7,613,000,000 in assets and $9,062,000,000
in debts.  NEGT received bankruptcy court approval of its
reorganization plan in May 2004, and that plan took effect on
Oct. 29, 2004. (PG&E National Bankruptcy News, Issue No. 32;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


NATIONAL ENERGY: Court Permits Set-Off of ERCOT Claims
------------------------------------------------------
Electric Reliability Council of Texas, Inc., is an independent,  
non-profit corporation that manages a portion of the Texas  
electric power grid.  The ERCOT System is a bulk electric system  
located totally within the State of Texas that serves 85% of  
Texas' geographic area.

ERCOT and NEGT Energy Trading - Power, LP, are regulated by the  
Public Utility Commission of Texas and further governed by  
certain written standards and requirements used by ERCOT to  
operate the ERCOT system.  ERCOT is not subject to the  
jurisdiction of the Federal Energy Regulatory Commission because  
the ERCOT System and the region it serves lie completely within  
the borders of the State of Texas.  ERCOT does not interconnect  
synchronously across State lines to import or export power with  
neighboring States.

ERCOT is one of 10 regional reliability councils in North  
America.  Its members include:

   -- retail consumers,
   -- investor and municipally owned utilities,
   -- rural electric cooperatives,
   -- river authorities,
   -- independent generators,
   -- power marketers, and
   -- retail electric providers

Pursuant to the ERCOT Protocols, ERCOT acts solely as an agent on  
behalf of its members in the provision, procurement, purchase,  
deployment, or dispatch of energy or ancillary services or any  
other similar action.

Effective January 2001, ERCOT and ET Power entered into a  
Standard Form Qualified Scheduling Entity Agreement providing for  
ET Power's participation in the ERCOT Region as a Qualified  
Scheduling Entity.  Pursuant to the ERCOT Protocols, the QSE  
Agreement allows ET Power to submit schedules consisting of (a)  
projected interval energy obligations, (b) projected interval  
energy supply, and including (c) its obligations for ancillary  
services within the ERCOT Region.

The QSE Agreement incorporates and is governed by the ERCOT  
Protocols.  Under the ERCOT Protocols, a QSE must satisfy ERCOT's  
creditworthiness requirements by, among others, a deposit of  
security, including letters of credit.  The ERCOT Protocols  
provide that ERCOT is entitled to draw on the letters of credit  
in the event a QSE defaults on an obligation owed to ERCOT.

                           Collateral

Before the Petition Date, ET Power provided ERCOT with a $907,000  
letter of credit as collateral under the QSE Agreement.  ERCOT  
drew on the $907,000 Letter of Credit subsequent to the Petition  
Date.

                       Prepetition Claims

Also before the Petition Date, ET Power and ERCOT owed each other  
certain amounts under the QSE Agreement.

Pursuant to the ERCOT Protocols, ERCOT nets all transactions  
within a given billing period.  Each invoice therefore reflects  
the net activity for the corresponding billing cycle.  ERCOT has  
asserted the right to set off the ERCOT Claims against the ET  
Power Claims.  ERCOT has further asserted the right to withhold  
paying amounts due ET Power that arose postpetition related to  
prepetition activity.

After applying the ERCOT Claims against the ET Power Claims,  
ERCOT still has claims against ET Power for $212,716.  The Net  
Prepetition Claims reflects amounts billed through August 19,  
2004, for the period before the Petition Date, together with any  
initial, final, true-up, resettlement, or other amounts owed  
between the parties related to the period before the Petition  
Date invoiced on January 2, 2005.  ERCOT has asserted that the  
Collateral secures the Net Prepetition Claim.

In addition, ET Power has failed to pay postpetition invoices  
relating to its activity in the ERCOT Region.  Those invoices  
yield a $110 total net amount due to ERCOT.

In January 2004, ET Power sent a letter to ERCOT requesting  
return of any excess collateral held by ERCOT after the Letter of  
Credit Draw.  ERCOT indicated a willingness to return the excess  
collateral, provided that its market participants are protected  
against any additional liability relating to resettlements or  
true-up settlements.

                          Agreed Order

Notwithstanding the parties' discussions concerning the amounts  
of the ERCOT Claims and the Net Prepetition Claims, ET Power may  
owe certain unliquidated and contingent initial, final, true-up,  
resettlement amounts, and other charges related to its  
prepetition activities in the ERCOT Region.

Accordingly, ET Power sought and obtained the Court's approval of  
an "agreed order" proposed by both parties.

The Agreed Order provides that:

   (a) The netting by ERCOT of the ERCOT Claims against the ET
       Power Claims is approved;

   (b) After application of the Collateral to the ERCOT Claims,
       ERCOT will return to ET Power the remaining portion of the
       Collateral -- $694,173 -- less $10,000;

   (c) ERCOT is entitled to the payment of any Prepetition
       Reconciliation, as determined by the terms of the QSE
       Agreement and the ERCOT Protocols.  ET Power is authorized
       and directed to pay any Prepetition Reconciliation amounts
       as they come due in the ordinary course, provided, that in
       no event will the aggregate payment of any Prepetition
       Reconciliation by ET Power exceed the amount of the Excess
       Collateral, less $10,000.  To the extent any Prepetition
       Reconciliation exceeds the Excess Collateral amount, less
       $10,000, ERCOT will be entitled to file a proof of claim
       against ET Power's estate for that unpaid Prepetition
       Reconciliation within 30 days after the final
       determination of unpaid Prepetition Reconciliation amount;

   (d) ERCOT and ET Power will satisfy all postpetition
       obligations to each other pursuant to the QSE Agreement or
       the ERCOT Protocols as they come due in the ordinary
       course;

   (e) If the Court sustains a timely filed objection to the
       Agreed Order after a hearing to consider the objection, ET
       Power will return the Excess Collateral to ERCOT and ERCOT
       will not be entitled to the adequate protection under
       Section 361(1) of the Bankruptcy Code for any Prepetition
       Reconciliation; and

   (f) Within 12 months beginning January 2, 2005, any portion of
       the Retained Collateral that has not been properly applied
       to Prepetition Reconciliation will be returned to ET
       Power.

The Set-off resolves the dispute over ERCOT's secured claim under  
the QSE Agreement and results in an immediate $684,394 cash  
payment to ET Power.

Headquartered in Bethesda, Maryland, PG&E National Energy Group,
Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas
Transmission, Inc.) develops, builds, owns and operates electric
generating and natural gas pipeline facilities and provides energy
trading, marketing and risk-management services.  The Company and
its debtor-affiliates filed for Chapter 11 protection on
July 8, 2003 (Bankr. D. Md. Case No. 03-30459).  Matthew A.
Feldman, Esq., Shelley C. Chapman, Esq., and Carollynn H.G.
Callari, Esq., at Willkie Farr & Gallagher, and Paul M. Nussbaum,
Esq., and Martin T. Fletcher, Esq., at Whiteford, Taylor &
Preston, L.L.P., represent the Debtors in their restructuring
efforts.  When the Company filed for protection from its
creditors, it listed $7,613,000,000 in assets and $9,062,000,000
in debts.  NEGT received bankruptcy court approval of its
reorganization plan in May 2004, and that plan took effect on
Oct. 29, 2004. (PG&E National Bankruptcy News, Issue No. 33;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


NATIONAL ENERGY: Inks Settlement Pact with Calpine Energy
---------------------------------------------------------
In accordance with the Court-approved Procedures for Settlement
of Trade Contracts, NEGT Energy Trading - Gas Corporation entered
into a settlement agreement and mutual release with Calpine
Energy Services, LP.

Calpine Energy will return $359,000 to ET Gas in full and final
satisfaction of all claims arising out of financial gas
transactions between the parties.  The Settlement Amount is a
portion of the $1,670,000 Collateral posted by ET Gas for Calpine
Energy's benefit as credit support for the Financial Gas
Transactions.

Additionally, the parties agree to a mutual release from any
liabilities arising out of the Financial Gas Transactions.

Martin T. Fletcher, Esq., at Whiteford, Taylor & Preston, LLP, in
Baltimore, Maryland, states that the consummation of the
Settlement Agreement is advantageous for ET Gas in that the
Agreement approximates the recovery that ET Gas could otherwise
achieve through litigation while avoiding the attendant risks and
costs.

Headquartered in Bethesda, Maryland, PG&E National Energy Group,
Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas
Transmission, Inc.) develops, builds, owns and operates electric
generating and natural gas pipeline facilities and provides energy
trading, marketing and risk-management services.  The Company and
its debtor-affiliates filed for Chapter 11 protection on
July 8, 2003 (Bankr. D. Md. Case No. 03-30459).  Matthew A.
Feldman, Esq., Shelley C. Chapman, Esq., and Carollynn H.G.
Callari, Esq., at Willkie Farr & Gallagher, and Paul M. Nussbaum,
Esq., and Martin T. Fletcher, Esq., at Whiteford, Taylor &
Preston, L.L.P., represent the Debtors in their restructuring
efforts.  When the Company filed for protection from its
creditors, it listed $7,613,000,000 in assets and $9,062,000,000
in debts.  NEGT received bankruptcy court approval of its
reorganization plan in May 2004, and that plan took effect on
Oct. 29, 2004. (PG&E National Bankruptcy News, Issue No. 33;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ORECK CORP: Moody's Assigns B1 Ratings to $210 Million Sr. Loan
---------------------------------------------------------------
Moody's Investors Service assigned first-time B1 ratings to Oreck
Corporation's proposed $210 million Senior Secured Credit
Facilities.  The ratings outlook is stable.

The ratings reflect the company's high product concentration,
risks and expenditures related with developing and marketing new
products, relatively heavy reliance on media spending, and high
pro-forma leverage and relatively low cash flow coverage.  These
risks are mitigated by the company's long history and strong brand
name, its diversified multi-channel distribution model, and its
experienced management team.

Founded by David Oreck in 1963, Oreck Corporation has established
a strong presence in the premium vacuum cleaner segment based on
its strategy of a controlled distribution model.  The majority of
its products are sold through exclusive Oreck stores as well as to
mail order, Internet, and other forms of direct-to-consumer
channels, according the company with strict control over
merchandising and pricing.

Oreck Corp. introduced air purifiers a number of years ago, but
the rapid growth in the sales of this product has been only in the
past couple of years.  Oreck's near term growth prospects depend
to a large degree on this relatively new product line.  The
controlled distribution strategy comes at the cost of very high
advertising expenditures, which have been averaging around one
quarter of the company's sales.  Following the proposed
transaction the company will operate under a high debt burden.  On
a pro-forma basis the company's debt/EBITDA will be 3.6X, with
EBIT interest coverage of 2.4X, and retained cash flow/adjusted
debt (funded debt + 8 times rent) of 8.7%.

The stable outlook reflects the strong market position attained by
Oreck Corp., the moderate assumptions for business and operations
in 2005, and the expectation that Debt/EBITDA will not exceed
3.5X, EBIT/Interest will be at least 2.5X, and retained cash
flow/adjusted debt will increase to at least 12% by the end of
fiscal 2005 (6/30/05).  Negative rating pressure could result from
a slow down in vacuum cleaner and air purifier sales and if
results fall short of the above metrics.

The ratings could move up if the company achieves its 2005 sales
plan and Debt/EBITDA declines to 3X or lower, EBIT/Interest rises
to at least 2.7X, and retained cash flow/adjusted debt increases
above 15%.

The Senior Secured Credit Facilities consist of a $190 million
7-year term loan and a $20 million 6-year revolving credit
facility guaranteed by Oreck's holding company and its domestic
subsidiaries and secured by substantially all of the assets of the
company, the holding company, and its subsidiaries.  Approximately
$190 million of the proceeds will be used to refinance existing
debt and to pay a $60.5 million dividend.  

The $20 million revolving credit will remain un-drawn at close and
be available for liquidity purposes.  The credit facilities will
represent substantially all of the company's funded debt.  It is
understood that the credit agreement will include certain
financial covenants and that room under these covenants may be
somewhat limited.  The ratings assigned are subject to the receipt
of final documentation with no material changes to the terms as
originally reviewed by Moody's.

The ratings assigned were:

   -- $190 million guaranteed secured 7 year term loan B, of B1,

   -- $20 million guaranteed secured 6 year revolving credit, of
      B1,

   -- Senior Implied rating of B1,

   -- Issuer rating of B3.

   -- The outlook is stable.

Oreck Corporation, based in New Orleans, Louisiana, is a leading
manufacturer and marketer of premium-priced vacuum cleaners, air
purifiers, and other products designed to promote a healthier
home.  The Company markets its products in multiple channels,
including the direct to consumer channels; mail, print media,
television, radio, the Internet, infomercials, and QVC and to the
exclusive Oreck retail stores and wholesale distributor channels.
For the fiscal year ended June 30, 2004, Oreck reported revenues
of approximately $311 million.


OWENS CORNING: Court Approves Valparaiso Asset Sale for $325,000
----------------------------------------------------------------
As previously reported, Owens Corning and its debtor-affiliates
received an offer from Shipshehanna, LLC, to purchase the
Valparaiso Property for $325,000.  The Debtors believe that the
offer was fair and reasonable when compared to prior offers.  
Accordingly, the Debtors proceeded to enter into a purchase and
sale agreement with Shipshehanna.

The Debtors sought and obtained the United States Bankruptcy Court
for the District of Delaware's authority to:

   (a) sell the Valparaiso Property, free and clear of all liens,
       claims, encumbrances and interests, with any liens, claims,
       encumbrances and interests to attach to the proceeds of
       sale; and

   (b) pay the Property Taxes at closing from the proceeds of
       sale.  

Headquartered in Toledo, Ohio, Owens Corning --
http://www.owenscorning.com/-- manufactures fiberglass  
insulation, roofing materials, vinyl windows and siding, patio
doors, rain gutters and downspouts.  The Company filed for chapter
11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837).
Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom,
represents the Debtors in their restructuring efforts.  At
Sept. 30, 2004, the Company's balance sheet shows $7.5 billion in
assets and a $4.2 billion stockholders' deficit.  The company
reported $132 million of net income in the nine-month period
ending Sept. 30, 2004.  (Owens Corning Bankruptcy News, Issue No.
91; Bankruptcy Creditors' Service, Inc., 215/945-7000)


PARMALAT USA: Farmland Obtains Supplemental Postpetition Financing
------------------------------------------------------------------
Farmland Dairies, LLC, sought and obtained the United States
Bankruptcy Court for the Southern District of New York's authority
to obtain supplemental postpetition financing pursuant to
Sections 363 and 364 of the Bankruptcy Code by entering into a
Supplemental Postpetition Credit Agreement dated Dec. 9, 2004,
with General Electric Capital Corporation, as administrative
agent, for itself and any lenders.

The Court authorizes Farmland to grant mortgages, security
interests, liens, and super-priority claims to GE Capital for the
benefit of the Supplemental Postpetition Lenders, including a
priority claim pursuant to Section 364(c)(1) and subordinated
primary liens pursuant to Sections 364(c)(3) and 364(d).

              Farmland's Need for Additional Funding

On March 30, 2004, the Court entered a final order:

   (1) authorizing Farmland to enter into a postpetition
       financing agreement and obtain postpetition financing;

   (2) authorizing Farmland to enter into an amendment to a
       receivables purchase agreement and sell interests in
       accounts receivable; and

   (3) providing adequate protection and granting liens, security
       interests and super-priority claims for both transactions.

Pursuant to the Existing Final DIP Order, Farmland and its
affiliates were authorized to borrow up to $35 million under a
Secured Super-Priority DIP Credit Agreement dated February 23,
2004, from a consortium of lenders syndicated by GE Capital, as
Agent.  Parmalat USA Corp. and Milk Products of Alabama L.L.C.,
served as Guarantors.

Farmland was also authorized to continue to sell receivables
interests to Citibank, N.A., London Branch pursuant to a Parmalat
Receivables Purchase Agreement dated as of November 2, 2000, among
Farmland and Milk Products, as Sellers; Initial Servicers and
Eureka Securitisation Plc, as Purchasers; and Citibank, N.A.,
London Branch, as Agent.

Farmland anticipates emerging from Chapter 11 by the end of March
2005.  Farmland, however, finds that an immediate and critical
need exists to obtain additional credit to continue the operation
of its business through the effective date of its Plan of
Reorganization.  Without additional credit, Farmland will not have
enough cash to obtain milk in an amount sufficient to carry on its
business, pay its payroll and other operating expenses, or obtain
other goods and services needed to carry on its business in a
manner that will avoid irreparable harm to its estate.

Farmland currently has made cash deposits in the aggregate amount
of approximately $5.2 million with various state regulatory milk
boards, which deposits are required to be posted under state law
to secure its payments for its milk supply in various states.  In
addition, Farmland has made a cash deposit of approximately $4.5
million with American Insurance Group, Inc., to secure payment of
Farmland's deductible obligations on its workman's compensation
and automobile insurance policies.  Farmland would like to access
the cash deposits and use the cash to fund the operations of its
business.

The Milk Boards have agreed to release the cash deposits they hold
to Farmland if Farmland replaces them with letters of credit
issued by a reputable lender.  In addition, Farmland is in
discussions with AIG to release a cash deposit it is holding if
Farmland replaces it with a letter of credit.

Farmland was also required to post a cash deposit or LC of
approximately $2 million with the New York Milk Board.  In
addition, Farmland is currently required to prepay for milk
purchased from Michigan milk suppliers and could improve its cash
position by approximately $500,000 by posting a $1 million letter
of credit with the Michigan Milk Board.  Overall, Farmland could
improve its cash position by approximately $12.2 million by
posting LCs of approximately $12.7 million with the Milk Boards
and AIG.

Farmland is pursuing other means of generating additional cash to
fund its operations.  Under the terms of the Existing Final DIP
Order, the U.S. Debtors are authorized to borrow and re-borrow
postpetition loans, and required to repay those loans with the
proceeds of any non-ordinary course transactions.  Farmland
currently anticipates that it will conduct one or more sales of
non-core assets prior to the Plan Effective Date, the proceeds of
which would be used to supplement the additional credit being
provided.  Nonetheless, the timing of those sales remains
uncertain, and in any event, they will not occur in sufficient
time to meet Farmland's cash needs for December 2004 and January
2005, giving rise to a short-term liquidity need that could not be
met by the Existing Postpetition Loans.

Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, in New
York, the U.S. Debtors' Conflicts Counsel, relates that Farmland
has been otherwise unable to obtain the required funds in the form
of unsecured credit or unsecured debt allowable under Section
503(b)(1), as an administrative expense, as unsecured debt having
the priority afforded by Section 364(c)(1), or as debt secured as
described in Section 364(c)(2).

The Supplemental Postpetition Agent, however, agreed to meet those
short-term liquidity needs under the terms of the Supplemental
Postpetition Financing Documents, but conditioned it on Farmland's
willingness to repay the Supplemental Postpetition Loans by
replacing or canceling the LCs in the event a sale or other
liquidity event makes that replacement possible.  To that end, the
supplemental financing is contingent on the Court approving a
stipulation designed to permit the issuance of LCs under the
Existing Final DIP Order.

             $15,000,000 GECC Supplemental Financing

The salient terms of the Supplemental Postpetition Credit
Agreement are:

   (a) Letters of Credit

       * Farmland may request the issuance of LCs for the benefit
         of the Milk Boards and, to the extent approved by the
         Supplemental Postpetition Agent in its sole discretion,
         any other person, in an aggregate amount up to
         $15,000,000.

       * If the Supplemental Postpetition Credit Agreement
         terminates or matures prior to the expiration of any LC,
         that LC must be replaced or returned.  To the extent
         that Farmland is unable to replace or return any of the
         LCs, the LC must be secured by a back-to-back LC or
         cash collateralized in an amount equal to 105% of the
         face amount of that LC.

       * The LCs may be replaced by Farmland at any time.

       * If Farmland receives proceeds of any non-ordinary course
         transaction in excess of $1,000,000 that are used to
         repay the Existing Postpetition Loans, Farmland may be
         required to replace the LCs with the ones issued under
         the Existing Postpetition Loans if sufficient
         availability under the Existing Postpetition Loans
         exists to replace one or more of the LCs.

       * Farmland may not agree to enter into an agreement to
         sell any assets outside the ordinary course of business,
         unless the buyer of those assets agrees to replace any
         LCs that have previously been delivered to any Milk
         Board to secure the supply of goods or services to that
         Facility, and unless that condition is waived by the
         Supplemental Postpetition Agent.

   (b) Use of Proceeds

       * The proceeds of the Supplemental Postpetition Loans or
         the collateral may only be used as permitted in the
         Existing Final DIP Order or in the Supplemental
         Postpetition Financing Documents.

       * All proceeds of the sale, collection or other
         disposition of Supplemental Postpetition Collateral are
         to be applied in accordance with the payment priorities
         set forth in the Existing Final DIP Order except that,
         following termination of the Supplemental Postpetition
         Credit Agreement, proceeds that would otherwise be made
         available to Farmland must first be used to repay or
         secure any obligations under the Supplemental Post-
         petition Credit Agreement.

       * Except for certain permitted professional fees and
         expenses, no expenses of administration of the Chapter
         11 case or any future proceeding that may result from it
         are to be charged against the Supplemental Postpetition
         Collateral pursuant to Section 506(c) without the prior
         written consent of the Supplemental Postpetition Agent.

       * Farmland is enjoined from granting liens in the
         Supplemental Postpetition Collateral or any portion to
         any other parties pursuant to Section 364 or otherwise,
         which liens are senior, or on a parity with, the liens
         being granted to the Supplemental Postpetition Agent.

       * The Supplemental Postpetition Agent is not to be subject
         to the equitable doctrine of "marshaling" with respect
         to any of the Supplemental Postpetition Collateral.

   (c) Grant of Liens

       * The Supplemental Postpetition Loan will be secured by
         priming liens under Sections 364(c)(3) and 364(d) in all
         the Supplemental Postpetition Collateral, which includes
         substantially all of Farmland's assets, except certain
         leased equipment that is owned by the Prepetition Lessor
         and avoidance actions.

       * The Supplemental Postpetition Liens will be subject and
         subordinate to the Postpetition Liens, the Adequate
         Protection Liens, the Citibank Adequate Protection
         Liens, the Second Mortgages, the Junior Liens, and the
         Permitted Fee Expenses -- each as defined in the
         Existing Final DIP Order -- but will be senior and
         superior to all other existing liens.

   (d) Superpriority Claim

       * The Supplemental Postpetition Loans will be secured by
         an allowed claim in accordance with the provisions of
         Section 364(c)(1) with priority over all other
         administrative expenses, subject and subordinate only to
         the Permitted Fee Expenses, the Super-priority Claim,
         and the Section 507(b) Claim, the Citibank Adequate
         Protection Claim, and any Junior Reimbursement Claims --
         each, as defined in the Existing Final DIP Order.

       * The Supplemental Super-priority Claim will not be
         payable from the proceeds of any avoidance actions.

   (e) Termination Event

       * Subject to the providing of notice, Farmland is not
         authorized to use cash collateral, request the issuance
         of LCs, or use any proceeds of the Supplemental
         Postpetition Collateral already received on the earliest
         to occur of any of these events if the Supplemental
         Postpetition Agent, in its sole discretion, terminates
         the Supplemental Postpetition Credit Agreement:

           (i) Material non-compliance by Farmland with any of
               the terms or provisions of the Supplemental
               Postpetition Financing Documents;

          (ii) Entry of an order authorizing the use of the
               Supplemental Postpetition Collateral in any way
               that is inconsistent with the Supplemental
               Postpetition Financing Documents, or to grant any
               liens or claims senior to the Supplemental
               Postpetition Liens or the Supplemental Super-
               priority Claim;

         (iii) Farmland files any Plan of Reorganization other
               than one providing for the indefeasible
               cancellation of the LCs;

          (iv) The entry of an order modifying the validity,
               priority, or extent of any liens of the
               Supplemental Postpetition Agent, or the validity
               and enforceability of the claims of the
               Supplemental Postpetition Agent without its
               consent; or

           (v) The occurrence of any absolute termination event
               or Citibank Absolute Termination Event under the
               Existing Final DIP Order.

   (f) Maturity Date

       * The maturity date for the Supplemental Postpetition
         facility will be the earliest of:

           (i) January 14, 2005;

          (ii) the consummation, pursuant to Section 363, of the
               sale of substantially all of Farmland's assets;

         (iii) the effective date of any plan of reorganization;

          (iv) conversion of the Chapter 11 case to a case under
               Chapter 7 of the Bankruptcy Code; or

           (v) dismissal of the Chapter 11 case.

   (g) Lenders' Exercise of Rights

       The automatic stay under Section 362(a) will be modified
       to allow the Supplemental Postpetition Agent to take
       certain actions with respect to Farmland's postpetition
       indebtedness following a Termination Event or the Maturity
       Date, provided, however, that the Supplemental Post-
       petition Agent must provide Farmland and the Official
       Committee of Unsecured Creditors with five business days'
       notice, during which time Farmland or the Committee may
       ask the Court to find that no Termination Event or
       Maturity Date has occurred.

   (h) Costs

       * Farmland is required to reimburse the Supplemental Post-
         petition Agent for its costs and expenses relating to
         the Supplemental Postpetition Credit Agreement.  None of
         those costs and expenses will be subject to Court
         approval or the U.S. Trustee guidelines, and no interim
         or final fee application need be filed with the Court,
         provided, however, that Farmland, the U.S. Trustee, and
         the Committee will be provided with a summary of those
         fees and expenses 10 days prior to the payment.

       * Farmland, the Committee, or the U.S. Trustee may object
         to those fees, provided, however, that if no objection
         is filed within the 10-day period, then those fees must
         be paid.

   (i) Fees to Supplemental Postpetition Lenders

       * Farmland is required to pay a $237,500 arrangement fee
         to the Supplemental Postpetition Agent, deemed earned on
         the Agreement's effective date and due and payable on
         the earlier to occur of the Maturity Date or the
         Termination Date.

       * Farmland is required to pay a fee equal to 4-1/2% per
         year multiplied by the maximum amount available from
         time to time to be drawn under the applicable LC for
         each month during which any LC obligation is
         outstanding.

Mr. Selbst notes that the January 14 Maturity Date under the
Supplemental Postpetition Credit Agreement is the same as the
maturity date for the Existing Postpetition Loan and the
Receivables Purchase Agreement.  Farmland anticipates, however,
that each of those facilities will be further extended through the
effective date of the Plan.  Assuming these facilities are
extended as anticipated, the funds made available from the Milk
Boards and AIG as a result of the issuance of the letters of
credit contemplated by the Supplemental Postpetition Credit
Agreement should be sufficient to fund Farmland's operations
through the confirmation and effective date of the Plan.  Farmland
does not anticipate a need for further postpetition financing.

The Supplemental Postpetition Loan Agreement also provides that,
except with respect to a carve-out for certain permitted expenses
of professionals, the surcharge provisions of Section 506(c) will
not be imposed on the Supplemental Postpetition Agent or
Supplemental Postpetition Lenders or any of their property or
collateral.

             Supplemental Financing Must Be Approved

Farmland's management has concluded after appropriate
investigation and analysis that the Supplemental Postpetition
Credit Agreement was the best and only viable alternative
available to it for supplemental postpetition financing.  Given
the complexity and immediacy of its financing needs, Farmland
moved quickly to ensure that it would be able to negotiate an
additional financing facility.  There is no reason to believe that
Farmland could have located a different postpetition lender
offering terms more favorable than the Supplemental Postpetition
Lenders, and certainly not before all of Farmland's limited cash
resources were depleted by the search.

In the absence of immediate access to cash and credit, Farmland's
suppliers and third party vendors could refuse to continue to sell
critical supplies to Farmland on reasonable trade terms, and
absent which Farmland will be unable to meet its current
obligations.  In turn, many of Farmland's otherwise loyal
customers could turn to competitors' products, thus eroding
Farmland's valuable customer base and with it its going concern
value.

The Court modifies the automatic stay to the extent necessary to
permit the Supplemental Postpetition Agent to retrieve, collect,
and apply payments and proceeds in accordance with the terms and
provisions of the Supplemental Postpetition Financing Documents.

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


PARMALAT USA: Parties Agree to Amend DIP Credit Agreement
---------------------------------------------------------
Parmalat USA Corporation, Parmalat's U.S. debtor-affiliates,
General Electric Capital Corporation, as agent and lender,
Citibank, N.A., and the Official Committee of Unsecured Creditors
agree to amend the terms of the DIP Credit Agreement to:

    1. make a letter of credit facility under the DIP Agreement
       available to Farmland; and

    2. allow Farmland to enter into a supplemental facility to
       obtain additional letters of credit.

Farmland is required to provide deposits in the form of cash or
letters of credit to certain "milk boards" of various states and
to post letters of credit in certain other situations.

                    Letter of Credit Facility

The DIP Lenders agree to incur, at Farmland's request and for
Farmland's account, Letter of Credit Obligations by causing
Letters of Credit to be issued by GE Capital or another financial
institution selected by or acceptable to GE Capital in its sole
discretion.  GE Capital will guarantee the Letters of Credit.

If the Letter of Credit Issuer is a Lender, then GE Capital will
not guarantee the Letters of Credit.  Rather each Lender will
purchase risk participations in all the Letters of Credit issued
with GE Capital's written consent.

The aggregate amount of all Letter of Credit Obligations will not
at any time exceed the least of:

   (a) $15,000,000 -- the Letter of Credit Sublimit;

   (b) as of any date of determination, an amount equal to:

         (i) the aggregate Revolving Loan Commitment of all
             Lenders as of that date; minus

        (ii) (a) the sum of the aggregate Revolving Loans then
             outstanding and (b) the sum of the aggregate Letter
             of Credit Obligations then outstanding; and

   (c) the amounts required in the Approved Cash Budget.

No Letter of Credit will have an expiry date that is more than 12
months following the date of issuance.  A Letter of Credit,
however, may provide for automatic extensions of its expiration
date for one or more one-year periods, so long as the Issuer has
the right to terminate the Letter of Credit at the end of each
one-year period and no extension period extends past January 14,
2010.

With respect to any Letter of Credit which has not expired prior
to the termination of the DIP Credit Agreement, as amended, for
any reason, the applicable Letter of Credit applications, master
issuance agreements and the other provisions of the DIP Credit
Agreement dealing with Letters of Credit will continue to apply to
the Letters of Credit.

The DIP Lenders will continue to provide up to $17,500,000 in
financing to Farmland on a revolving credit basis.

In the event that GE Capital or any DIP Lender will make any
payment on or pursuant to any Letter of Credit Obligation, the
payment will be deemed automatically to constitute a Revolving
Credit Advance to the Borrower (y) regardless of whether a
Default or Event of Default has occurred and is continuing and
(z) notwithstanding the Debtors' failure to satisfy the
conditions precedent.  Each Lender will be obligated to pay its
Pro Rata Share in accordance with the DIP Credit Agreement.

The failure of any DIP Lender to make available to GE Capital for
GE Capital's own account its Pro Rata Share of any Revolving
Credit Advance or payment by GE Capital under or in respect of a
Letter of Credit will not relieve any other Lender of its
obligation to make available to GE Capital its Pro Rata Share, but
no Lender will be responsible for the failure of any other Lender
to make available the other Lender's Pro Rata Share of any
payment.

                             Maturity

The DIP Lenders' commitment to incur Letter of Credit Obligations
will expire on the earliest of:

   (a) January 14, 2005, as the date may be extended by GE
       Capital in its sole discretion;

   (b) the date of termination of the DIP Lenders' obligations to
       make Revolving Credit Advances or permit existing Loans to
       remain outstanding; and

   (c) the date of indefeasible prepayment in full by Farmland of
       the Loans, and the permanent reduction of all Revolving
       Loan Commitments to $0.

All Loans to Farmland and all of the other Obligations of
Farmland arising under the DIP Credit Agreement and the other
Loan Documents will constitute one general obligation of Farmland
secured, until the Termination Date, by all of the DIP
Collateral.

                         Cash Collateral

If Farmland is required to provide cash collateral for any Letter
of Credit Obligations, it will pay to GE Capital for the ratable
benefit of itself and the DIP Lenders cash or cash equivalents
equal to 105% of the maximum amount then available to be drawn
under each applicable Letter of Credit outstanding for Farmland's
benefit.  GE Capital will hold the funds or Cash Equivalents in a
cash collateral account.

Farmland pledges and grants to GE Capital, on behalf of itself and
the DIP Lenders, a security interest in all the funds and
Cash Equivalents held in the Cash Collateral Account from time to
time and all proceeds thereof, as security for the payment of all
amounts due in respect of the Letter of Credit Obligations and
other Obligations, whether or not then due.

If any Letter of Credit Obligations will, for any reason, be
outstanding on the Commitment Termination Date, Farmland will
either:

    -- provide cash collateral;

    -- cause all the Letters of Credit and guaranties thereof, if
       any, to be canceled and returned; or

    -- deliver a stand-by letter or letters of credit in guaranty
       of the Letter of Credit Obligations.  The stand-by letter
       of credit shall be of like tenor and duration -- plus
       30 additional days -- as, and in an amount equal to 105%
       of, the aggregate maximum amount then available to be
       drawn under, the Letters of Credit to which the
       outstanding Letter of Credit Obligations relate.

                        Fees and Expenses

Farmland will pay GE Capital, for the benefit of the DIP Lenders,
as compensation to the Lenders for the Letter of Credit
Obligations incurred:

     * all costs and expenses incurred by Agent or any Lender on
       account of the Letter of Credit Obligations; and

     * for each month during which any Letter of Credit
       Obligation will remain outstanding, a Letter of Credit
       Fee equal to 4-1/2% per annum multiplied by the maximum
       amount available from time to time to be drawn under the
       applicable Letter of Credit.

Farmland will also pay to any Letter of Credit Issuer, on demand,
the fees (including all per annum fees), charges and expenses of
the Issuer in respect of the issuance, negotiation, acceptance,
amendment, transfer and payment of the Letter of Credit or
otherwise payable pursuant to the application and related
documentation under which the Letter of Credit is issued.

                            Interest

Farmland will pay interest to GE Capital, for the ratable benefit
of the Lenders in accordance with the various Loans being made by
each Lender, in arrears on each applicable Interest Payment Date,
at the Index Rate plus 3.0%, per annum.

"Index Rate" means, for any day, a floating rate equal to the
higher of:

   (i) the rate publicly quoted from time to time by The Wall
       Street Journal as the "prime rate"; and

  (ii) the Federal Funds Rate plus 50 basis points per annum.

The interest rates applicable to the Loans and the Letter of
Credit Fees will be increased by 2% per annum above the rates of
interest or the rate of the Fees otherwise applicable, in the
event of a default by the Debtors.  Interest at the Default Rate
will accrue from the initial date of the Event of Default until
that Event of Default is cured or waived, and will be payable upon
demand.

                           Stipulation

The Debtors, the DIP Lenders, Citibank and the Committee further
stipulate that nothing in the amendment to the DIP Credit
Agreement and the Exiting Final DIP Order affects the claims,
liens, rights and priorities granted to Citibank under the
Receivables Purchase Agreement or any previous orders of the
United States Bankruptcy Court for the Southern District of New
York, including, without limitation, the Final DIP Order, nor
expand or modify any Collateral securing any of the DIP Loans.

The parties agree that all proceeds of the sale, collection or
other disposition of the DIP Lenders' Postpetition Collateral will
be applied by GE Capital to the reduction of the DIP Loans.

If the proceeds from the sale, collection or other disposition of
Postpetition Collateral exceed the DIP Loans, then, at the time of
receipt of the proceeds, the amount by which the proceeds exceed
the greater of (y) 105% of the amount of the commitment to make
DIP Loans, or (z) 105% of the face amount of the letters of credit
outstanding under the DIP Credit Agreement -- such amount up to
$36,750,000 -- will be available for use by the Debtors as Cash
Collateral in accordance with a Budget approved by GE Capital.

GE Capital will hold the Postpetition Commitment Reserve as
additional Postpetition Collateral until these events have
occurred:

   (a) Indefeasible repayment in full of the DIP Loans;

   (b) Expiration or cancellation of all letters of credit issued
       under the DIP Credit Agreement; and

   (c) Termination of the commitments to make DIP Loans.

If, after the commitment to make DIP Loans has been terminated and
the Letters of Credit have expired or been cancelled, there
remains Postpetition Collateral or proceeds thereof, after
repayment in full of the DIP Loans, and the Prepetition
Indebtedness to the extent of the Adequate Protection Liens and
the Section 507(b) Claim, the Postpetition Collateral and the
proceeds thereof will be retained by the Debtors, subject to
further Court order.

A full-text copy of the Amended DIP Credit Agreement is available
for free at:

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

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


PETERSBURG PLUMBING: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Petersburg Plumbing & Heating Co., Inc.
        117 North 7th Street
        Petersburg, Illinois 62675

Bankruptcy Case No.: 05-70121

Type of Business: The Debtor is a contractor for plumbing, heating
                  & air conditioning, industrial piping, and
                  underground utilities.
                  See http://www.petersburgplumbingandheating.com/

Chapter 11 Petition Date: January 12, 2005

Court: Central District of Illinois (Springfield)

Debtor's Counsel: Francis J. Giganti, Esq.
                  8 South Old State Capitol Plaza
                  Springfield, IL 62701
                  Tel: 217-492-5113
                  Fax: 217-492-5129

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

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


POLYGRAPHEX SYSTEMS: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Polygraphex Systems, Inc.
        11211 69th Street North
        Largo, Florida 33773

Bankruptcy Case No.: 05-00630

Type of Business: The Debtor provides digital graphic printing
                  services.  See http://www.polygraphex.com/

Chapter 11 Petition Date: January 12, 2005

Court: Middle District of Florida (Tampa)

Judge: Michael G. Williamson

Debtor's Counsel: Michael C. Markham, Esq.
                  Johnson Pope Bokor Ruppel & Burns LLP
                  P.O. Box 1368
                  Clearwater, FL 33757
                  Tel: 727-461-1818

Estimated Assets: Unstated

Estimated Debts:  $1 Million to $10 Million

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


RCN CORP: Assumes American International Group Insurance Programs
-----------------------------------------------------------------
American Home Assurance Company, American International Specialty
Lines Insurance Company, Illinois National Insurance Company,
National Union Fire Insurance Company of Pittsburgh, Pa., Starr
Excess Liability Insurance International Ltd., and certain other
entities related to American International Group, Inc., provided
and continues to provide RCN Corporation and its debtor-affiliates
with various insurance policies, including without limitation,
accident and health, air, general liability, property, workmen's
compensation, and other services, some of which are governed by
various payment and indemnity agreements, as amended from time to
time.

Pursuant to the Insurance Programs, the Debtors entered into
certain agreements and are obligated to pay to AIG, among other
things, certain premiums, deductibles, self-insured retention,
reimbursement obligations, fees expenses and related costs.  AIG
holds approximately $4.5 million in cash as security for the
Debtors' obligations under the Insurance Programs.

On August 10, 2004, AIG timely filed Claim No. 1276 in the
Debtors' Chapter 11 cases.

The Debtors subsequently sought and obtained the Court's
authority to assume the Insurance Programs and to renew the
programs on similar terms.

AIG and the Debtors stipulate and agree that the Reorganized
Debtors will be authorized to assume the Insurance Programs
pursuant to the order approving the Debtors' request to assume
the Insurance Programs, subject to these terms:

    (a) The parties represent that there are no material defaults
        existing under the Insurance Programs;

    (b) The Reorganized Debtors will cure all defaults and are
        authorized and directed to pay their obligations under the
        Insurance Programs, including, without limitation, premium
        and losses, in the ordinary course of business, in
        accordance with the relevant terms of the Insurance
        Programs, without requiring AIG to take any other action;

    (c) AIG will not be (i) bound by the cure amount scheduled by
        the Debtors with respect to the Insurance Programs or (ii)
        required to file a proof of claim or request for payment
        of administrative expenses, with respect to any amounts
        owed by the Debtors or the Reorganized Debtors in
        connection with the Insurance Programs;

    (d) The discharge injunction provided by the Confirmation
        Order and Sections 524 and 1141 of the Bankruptcy Code
        will be modified to permit AIG to adjust, settle and pay
        insured claims in accordance with the terms of the
        Insurance Programs, utilize insurance proceeds for that
        purpose, and otherwise carry out the terms and conditions
        of the Insurance Programs, without further Court order;

    (e) Should a dispute arise with regard to the Insurance
        Programs, the dispute may be resolved as per the
        agreements governing the Insurance Programs in any
        appropriate forum; and

    (f) The AIG Claim is withdrawn.

Judge Drain approves the parties' stipulation in its entirety.

Headquartered in Princeton, New Jersey, RCN Corporation --
http://www.rcn.com/-- provides bundled Telecommunications
services.  The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. S.D.N.Y. Case No. 04-13638) on
May 27, 2004.  Frederick D. Morris, Esq., and Jay M. Goffman,
Esq., at Skadden Arps Slate Meagher & Flom LLP, represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $1,486,782,000 in
assets and $1,820,323,000 in liabilities. (RCN Corp. Bankruptcy
News, Issue No. 18; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


REAL MEX: Chevys Acquisition Cues S&P to Affirm 'B' Corp. Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
the 'B' corporate credit rating, on casual-dining restaurant
operator Real Mex Restaurants, Inc.  All ratings were
removed from CreditWatch.  The outlook is stable.

The ratings affirmation follows Real Mex's acquisition of Chevys
Inc., for $77.9 million, to be funded through a $70 million senior
unsecured term loan and cash balances.  The acquisition of Chevys,
the second-largest casual-dining Mexican restaurant in California,
improves the company's market position in California, where its El
Torito and Acapulco concepts are the largest and third-largest
casual-dining Mexican restaurant chains, respectively.  

Standard & Poor's believes the acquisition risk is limited because
Real Mex is already adept at operating casual-dining Mexican
restaurants in California.  Moreover, the company could realize
cost savings from the consolidation of general and administrative
expenses, as well as lower food distribution costs.  Pro forma
leverage will be high, but will remain about the same as previous
levels, with total lease-adjusted debt to EBITDA at about 5.0x.

"The ratings reflect Real Mex's participation in the highly
competitive restaurant industry, its small size and regional
concentration, weak cash flow protection measures, and a highly
leveraged capital structure," said Standard & Poor's credit
analyst Robert Lichtenstein.  The company is a small player in
the highly competitive casual-dining sector of the restaurant
industry.

Although Real Mex has a leading position in California as a
casual-dining Mexican restaurant operator, the company maintains a
relatively small market share among overall casual-dining chains.
Many of its competitors have substantially greater financial and
marketing resources, and continue to expand rapidly.  Moreover,
Real Mex is regionally concentrated, with about 90% of its
restaurants in California.


SOLUTIA INC: Asks Court to Approve Springfield Wastewater Pact
--------------------------------------------------------------
Solutia, Inc.'s Performance Products Division operates a plant in
Springfield, Massachusetts, which manufactures Solutia's
profitable Saflex(R) line of polyvinyl butyrol interlayer, which
is used to make safety glass for automotive and architectural
uses.  The Plant occupies 250 acres and is the largest chemical
manufacturing facility in New England.  About 750 employees keep
the Indian Orchard Plant in continuous operation 24 hours a day,
seven days a week.

Jonathan N. Landers, Esq., at Gibson, Dunn & Crutcher LLP, in New
York, relates that to operate the Plant, Solutia must provide for
treatment of its wastewater before it is discharged to the
environment.  Solutia currently provides some on-site pretreatment
of its wastewater before it discharges it to the Springfield Water
and Sewer Commission.

The Commission is a political and corporate body that is a
subdivision of the Commonwealth of Massachusetts.  The
Commission, which is authorized by law to enter into contracts and
agreements to aid in the prevention or abatement of water
pollution, determined that it was in the public interest to
operate wastewater treatment facilities adequate to treat the
Wastewater of industrial and residential dischargers into the
Commission's facilities.

"Wastewater" is defined as the spent water of the Commission, and
of other participants of the Springfield Regional Wastewater
Treatment Facility and may be a combination of the liquid and
liquid borne wastes from residences, commercial buildings,
industrial plants and institutions, together with any groundwater
and surface water that may be present.

According to Mr. Landers, Solutia's onsite wastewater facility
cannot fully treat the wastewater to meet water quality standards
for direct discharge.  Therefore, further offsite treatment is
necessary.  Due to the volume of wastewater generated, Solutia's
only viable option is to discharge to the Commission's wastewater
facility, which serves the locale.  Solutia's prior contract with
the Commission expired over the summer, and the parties have
continued operating under the prior fee structure without a
contract.

After negotiations, Solutia and the Commission have agreed on a
renewal contract under which the Commission will receive, treat
and dispose of Wastewater from the Indian Orchard Plant site for a
term of 10 years.  Under the Wastewater Agreement, Solutia will
pay the Commission for its receipt, treatment and disposal of the
Indian Orchard Plant's Wastewater according to a formula designed
to apportion the Commission's operating costs among all of the
participants in its wastewater treatment facility based on:

    (a) the volume of Wastewater received from each participant;
        and

    (b) the strength of contaminants -- i.e., biochemical oxygen
        demand (BOD(5)) and total suspended solids (TSS) --
        present in the Wastewater.

Solutia estimates that the payment terms of the Wastewater
Agreement will result in Solutia's monthly payment amounts being
consistent with Solutia's cost for Wastewater treatment in
previous years.

Solutia may terminate the Wastewater Agreement as of July 1st of
any contract year by giving written notice of termination at any
time between March 1st and May 1st of that contract year.  If
Solutia terminates the Wastewater Agreement without cause, it must
pay to the Commission as liquidated damages an amount equal to the
proportionate share of the interest on debt and depreciation
incurred for the additional plant or facilities or the
modification of existing facilities apportioned to the Plant
remaining under the unexpired term of the agreement.  Solutia
estimates that the Termination Fee would range from $120,000, if
Solutia terminates the Wastewater Agreement during the last year
of the contract, to $1,200,000, if the termination occurs during
the first year.  In the event of a sale of all or a material part
of the business or the assets at the Indian Orchard Plant, the
contract provides Solutia the right to assign -- but not to
terminate -- the Wastewater Agreement without the prior written
consent of the Commission and without a Termination Fee or any
other additional fees.

By this motion, Solutia asks the United States Bankruptcy Court
for the Southern District of New York to approve its entry into
the Wastewater Agreement.

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


SOUTH BRUNSWICK: Seven Creditors Appointed to Serve on Committee
----------------------------------------------------------------
The Bankruptcy Administrator for North Carolina appointed seven
creditors to serve on an Official Committee of Unsecured Creditors
in South Brunswick Water & Sewer Authority's chapter 9 case:

           1. Northstar Carolina Corp.
              Attn: R. Gene Blanton
              800 Sandpiper Club Drive SW
              Sunset Beach, North Carolina 28468
              Tel: 910-579-9120

           2. URS Corporation
              Attn: Timothy H. Keener
              1600 Perimiter Park Drive, Suite 400
              Morrisville, North Carolina 27560
              Tel: 919-461-1421

           3. University of North Carolina - Wilmington
              Attn: John P. Scherer II
              North Carolina Dept. of Justice
              P.O. Box 629
              Raleigh, North Carolina 27602-0629
              Tel: 919-716-6920

           4. Joseph A. Tombro
              P.O. Box 5159
              Ocean Isle Beach, North Carolina 28469
              Tel: 910-579-3506

           5. Thistle Golf Club
              Attn: Anthony Fellback
              8840 Olde Thistle Downs Drive
              Sunset Beach, North Carolina 28468
              Tel: 910-396-9151

           6. Arcades Gareaghty Miller       
              Attn: Tom Davis
              630 Plaza Drive, Suite 2000
              Highlands Ranch, Colorado 80129
              Tel: 720-344-3724

           7. Raftelis Financial Consulting, PA
              Attn: George Raftelis
              511 East Boulevard
              Charlotte, North Carolina 28203
              Tel: 704-373-1199
    
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense.  They may investigate the Debtors' business and financial
affairs.  Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.  Those
committees will also attempt to negotiate the terms of a
consensual chapter 9 plan -- almost always subject to the terms of
strict confidentiality agreements with the Debtors and other core
parties-in-interest.  If negotiations break down, the Committee
may ask the Bankruptcy Court to replace management with an
independent trustee.  

South Brunswick Water and Sewer Authority filed for chapter 9
protection on November 19, 2004 (Bankr. E.D. N.C. Case No. 04-
09053-8).  Trawick H. Stubbs, Jr., Esq., and Laurie B. Biggs,
Esq., at Stubbs & Perdue, represent the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it estimated assets between $1 million and $10
million and debts from $10 million to $50 million.


STELCO INC: Monitor Recommends Extension of Bid Deadline
--------------------------------------------------------
The Monitor appointed in Stelco, Inc.'s CCAA restructuring
proceedings filed its Sixteenth Report on Wednesday.

In the Report, the Monitor recommends that the deadline for the
filing of binding offers for Stelco's core business, its non-core
subsidiaries, or both under the Court-approved capital raising
process be extended 14 days to Feb 14, 2005.  In support of this
recommendation, the Monitor notes the high level of interest shown
in this process by prospective bidders and the concern expressed
by certain parties that the current timeline may not provide
enough time in which to conduct their due diligence.  The Monitor
also cites the volume of work required to assist parties engaged
in the due diligence process.  This activity includes the
provision of information plus the scheduling and conduct of
meetings, management presentations, and tours of facilities.

The Monitor notes that Stelco has consulted with Deutsche Bank,
which submitted the approved 'stalking horse' bid, about the
proposed extension of the filing deadline.  The Report also notes
that the two parties have agreed to this extension and, as a
result, to the amendment of certain timelines contained in the
Deutsche Bank commitment.

The Monitor notes that two expressions of interest in Stelpipe
Ltd. were filed after the stated deadline of Dec 1, 2004.  The
Monitor evaluated those proposals and determined that it was in
the best interests of Stelpipe and its stakeholders to invite
those late parties to participate in the next phase of the process
subject to approval by the Court.

The Report notes that Stelco will seek a Court Order amending the
Capital Process Order.  The proposed amendments would extend the
deadline for filing binding offers in the capital raising process
to Feb. 14, 2005, and invite the two late potential investors in
Stelpipe to participate in Phase Two of that process.  Stelco will
apply for the Order at a hearing to be held on January 17, 2005.

                          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.


TELESYSTEM INT'L: Acquires All of Oskar Holdings
------------------------------------------------
Telesystem International Wireless, Inc. (NASDAQ: TIWI)(TSX: TIW)
has completed the transaction to increase its equity and voting
interest in Oskar Holdings N.V. from 27.1% and 52.7%,
respectively, to 100%, in exchange for approximately 46 million
shares of TIW.  Oskar Holdings holds 99.87% of Oskar Mobil a.s.

The 72.9% equity interest in Oskar Holdings was acquired from
certain private equity investors, which include funds advised or
managed by ABN AMRO Capital, Advent International Corporation,
AlpInvest Partners, EMP Europe, the European Bank for
Reconstruction and Development, JP Morgan Partners, Mediatel
Capital and Part'Com.  Funds advised or managed by JP Morgan
Partners and EMP Europe, two significant shareholders of TIW, will
receive respectively 17.4 million and 7.0 million of the TIW
shares issued in the transaction.

The terms of the agreement restrict the selling shareholders'
ability to resell or otherwise dispose of their TIW shares for a
period of 12 months following closing of the transaction.  Partial
releases from this lock-up will occur on the first business day in
each successive period of 45 days starting January 12, 2005, as to
5%, 5%, 18.75%, 18.75%, 7.5%, 7.5%, 18.75% and 18.75%,
respectively, of their TIW shares on each release date.

This transaction increased the number of TIW common shares issued
and outstanding from approximately 169.2 million common shares to
215.2 million.

                        About the Company

Telesystem International Wireless Inc. -- http://www.tiw.com/--is  
a leading provider of wireless voice, data and short messaging
services in Central and Eastern Europe with over 6.1 million
subscribers.  TIW operates in Romania through MobiFon S.A. under
the brand name Connex and in the Czech Republic through Oskar
Mobil a.s. under the brand name Oskar.

                          *     *     *

As reported in the Troubled Company Reporter on June 11, 2004,
Standard & Poor's Ratings Services placed its 'B-' long-term
corporate credit ratings on MobiFon Holdings B.V. and Telesystem
International Wireless, Inc., on CreditWatch with positive
implications.  TIW owns 99.8% of MobiFon Holdings, which in turn
owns 63.5% of MobiFon S.A., Romania's largest cellular operator.

"The CreditWatch placement follows TIW's announcement that it has
entered into an agreement in principle, which will result in
MobiFon Holdings increasing its ownership interest in MobiFon to
up to 79% from the current 63.5%," said Standard & Poor's credit
analyst Joe Morin.  This is a materially relevant ownership
threshold for this company, as the MobiFon statutes require a
supermajority approval of shareholders (75%) for certain material
financial change.  At the current ownership level of 63.5%,
MobiFon Holdings is not able to unilaterally control or access
MobiFon, and the default risk of MobiFon Holdings is separate from
that of MobiFon.  MobiFon Holdings' current credit profile and the
ratings on the company reflect its debt levels and the stability
of its proportional share of MobiFon's dividends.  Although
unrated, the stand-alone credit quality of MobiFon is currently
viewed as 'BB-'.


TORCH OFFSHORE: Receives Nasdaq Delisting Notice
------------------------------------------------
Torch Offshore, Inc. (NASDAQ: TORC) has received notice from the
staff of The NASDAQ Stock Market that the Company's common stock
will be delisted from the NASDAQ National Market, in accordance
with Marketplace Rules 4300 and 4450(f).  The Company has the
right and expects to appeal NASDAQ's determination to a NASDAQ
Listing Qualifications Panel.  NASDAQ will notify the Company when
a hearing on the Company's appeal will be held.  According to
NASDAQ's rules, the delisting process will be stayed until the
NASDAQ Listing Qualifications Panel makes a decision on the
Company's appeal.  The Company cannot predict the outcome of such
appeal.

Also, as a result of the Company's previously announced filing for
reorganization under Chapter 11 of the U.S. Bankruptcy Code on
Jan. 7, 2005, the fifth character "Q" has been added to the
Company's trading symbol effective as of Jan. 12, 2005.  The
Company's trading symbol is now TORCQ.

Headquartered in Gretna, Louisiana, Torch Offshore, Inc., provides
integrated pipeline installation, sub-sea construction and support
services to the offshore oil and gas industry, primarily in the
Gulf of Mexico.  The Company and its debtor-affiliates filed for
chapter 11 protection (Bankr. E.D. La. Case No. 05-10137) on
Jan. 7, 2005.  Jan Marie Hayden, Esq., at Heller, Draper, Hayden,
Patrick & Horn, L.L.C., and Lawrence A. Larose, Esq., at King &
Spalding LLP, represents the Debtors in their restructuring
efforts.  When the Company filed for protection from its
creditors, it listed $201,692,648 in total assets and $145,355,898
in total debts.


TRICO MARINE: Section 341(a) Meeting Slated for Feb. 4
------------------------------------------------------
The United States Trustee for Region 14 will convene a meeting of
Trico Marine Services, Inc., and its debtor-affiliates' creditors
on Feb. 4, 2005, at 2:00 p.m. in the U.S. Trustee Meeting Room
located at 230 North First Avenue, Suite 102, in Phoenix, Arizona.  
This is the first meeting of creditors required under 11 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 one 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.

The Meeting of Creditors will not be convened if:

   (a) the Plan is confirmed before February 4, and

   (b) the Court order confirming the Plan contains a provision
       waiving the requirement for a Section 341(a) meeting.

Headquartered in New York, Trico Marine Services, Inc.
-- http://www.tricomarine.com/-- provides marine support services
to the oil and gas industry around the world.  The Trico Companies
operate a large, diversified fleet of vessels used in the
transportation of drilling materials, crews and supplies necessary
for the construction, installation, maintenance and removal of
offshore drilling facilities and equipment.  Trico Marine and its
debtor-affiliates filed for chapter 11 protection on Dec. 21, 2004
(Bankr. S.D.N.Y. Case No. 04-17985).  Leonard A. Budyonny, Esq.,
and Robert G. Burns, Esq., at Kirkland & Ellis LLP, represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $535,200,000 in
assets and $472,700,000 in debts.


TROPICAL SPORTSWEAR: U.S. Trustee Picks 7-Member Creditors Comm.
----------------------------------------------------------------        
The United States Trustee for Region 21 appointed seven creditors
to serve on the Official Committee of Unsecured Creditors of
Tropical Sportswear Int'l Corporation and its debtor-affiliates'
chapter 11 cases:

   1. SunTrust Bank
      Attn: Geri Kail
      225 E. Robinson Street, #250
      Orlando, Florida 32807
      Phone: 404-237-4764

   2. GSC Partners CDO Fund II, Ltd.
      Attn: Harvey E. Siegel
      300 Campus Drive
      Florham Park, New Jersey 07932
      Phone: 973-593-5403, Fax: 973-593-5454

   3. Dalton Global Opportunity Fund
      Attn: Brian O'Neil
      12424 Wilshire Blvd., #1130
      Los Angeles, California 90025
      Phone: 310-442-5200, Fax 310-442-5225

   4. FMA CBO Funding II, LT
      Attn: Tim Somers
      1900 Avenue of the Stars, #900
      Los Angeles, California 90067
      Phone: 310-229-2940, Fax: 310-229-2975

   5. Galey & Lord Industries, LLC
      Attn: James J. Murray
      Five Concourse Parkway, Suite 2300
      Atlanta, Georgia 30328-5350
      Phone: 770-901-6312, Fax: 770-901-6309

   6. Avondale Mills, Inc.
      Attn: Norman Taylor
      133 Marshall Street
      P.O. Box 128
      Graniteville, South Carolina 29829-0128
      Phone: 803-663-2208, Fax: 803-663-2016

   7. Pak Source-Southern Source Packaging, LLC
      Attn: Thomas E. Bennett
      401 Gun Club Road
      Jacksonville, Florida 32218
      Phone: 800-940-0243, Fax: 888-548-1706

Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense.  They may investigate the Debtors' business and financial
affairs.  Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.  Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest.  If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee.  If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.

Headquartered in Tampa, Florida, Tropical Sportswear Int'l Corp.
-- http://www.savane.com/-- designs, produces and markets branded
branded apparel products that are sold to major retailers in all
levels and channels of distribution.  The Company and its debtor-
affiliates filed for chapter 11 protection on December 16, 2004
(Bankr. M.D. Fla. Case No. 04-24134).  David E. Bane, Esq., and
Denise D. Dell-Powell, Esq., at Akerman Senterfitt, represent the
Debtors in their restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed total assets of
$247,129,867 and total debts of $142,082,756.


TROPICAL SPORTSWEAR: Creditors Have Until Jan. 31 to File Claims
----------------------------------------------------------------           
The U.S. Bankruptcy Court for the Middle District of Florida set
January 31, 2005, as the deadline for all creditors owed money by
Tropical Sportswear Int'l Corporation and its debtor-affiliates,
on account of claims arising prior to December 16, 2004, to file
their proofs of claim.

Creditors must file their written proofs of claim on or before the
January 31 Claims Bar Date, and those forms must be delivered to:

        Clerk of the Bankruptcy Court
        Sam M. Gibbons United States Courthouse
        801 North Florida Avenue Suite 727
        Tampa, Florida 33602

Headquartered in Tampa, Florida, Tropical Sportswear Int'l Corp.
-- http://www.savane.com/-- designs, produces and markets branded
branded apparel products that are sold to major retailers in all
levels and channels of distribution.  The Company and its debtor-
affiliates filed for chapter 11 protection on December 16, 2004
(Bankr. M.D. Fla. Case No. 04-24134).  David E. Bane, Esq., and
Denise D. Dell-Powell, Esq., at Akerman Senterfitt, represent the
Debtors in their restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed total assets of
$247,129,867 and total debts of $142,082,756.


TRUMP HOTELS: Wants Until May 1 to Decide on Leases
---------------------------------------------------
Charles A. Stanziale, Esq., at Latham & Watkins LLP, in Los
Angeles, California, relates that Trump Hotels & Casino Resorts,
Inc., and its debtor-affiliates' cases are very complicated,
involving 28 Debtors, over 30,000 creditors and debts in the
excess of $1.9 billion dollars.  In addition, during the short
period since the bankruptcy petition date, the Debtors have moved
their cases along quickly.  The Debtors have, among other things,
filed a plan and disclosure statement, obtained financing and use
of cash collateral and otherwise positioned their cases for an
expedited exit from chapter 11.  The Debtors, however, are still
evaluating which of the unexpired non-residential real property
leases to which they are a party will they assume or reject.

According to Mr. Stanziale, the Debtors are currently party to
approximately 75 Leases that are important to the operations and
continuation of their businesses.  The Debtors have not yet
determined whether to assume, assume and assign, or reject each
of the Leases.  The Debtors are current on postpetition
obligations with respect to those Leases.

Unless extended, the period during which the Debtors may assume
or reject their Leases under Section 365(d)(4) of the Bankruptcy
Code will expire on January 20, 2005.  Consequently, by this
motion, the Debtors ask the United States Bankruptcy Court for the
District of New Jersey to extend the deadline by which they must
assume, assume and assign or reject their Leases until May 1,
2005, without prejudice to their right to seek further extension.

The Debtors anticipate that the proposed extension will allow
them to decide on their leases in conjunction with, or prior to
the consummation of their proposed Plan of Reorganization.

Extending the Debtors' time to analyze each lease is important
to:

    -- maximize the value of the Debtors' businesses for the
       benefit of all creditors; and

    -- allow the Debtors to make an informal and careful decision
       with respect to each lease.

The Debtors believe that the proposed extension is reasonable,
necessary, and appropriate.

                           *     *     *

The Court will convene a hearing on Jan. 21, 2005, to consider
the Debtors' request.  In the interim, Judge Wizmur issued a
bridge order extending the Debtors' Lease Decision Period through
Jan. 24, 2005.

Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino
Resorts, Inc. -- http://www.thcrrecap.com/-- through its  
subsidiaries, owns and operates four properties and manages one
property under the Trump brand name.  The Company and its debtor-
affiliates filed for chapter 11 protection on Nov. 21, 2004
(Bankr. D. N.J. Case No. 04-46898 through 04-46925).  Robert A.
Klymman, Esq., Mark A. Broude, Esq., John W. Weiss, Esq., at
Latham & Watkins, LLP, and Charles Stanziale, Jr., Esq., Jeffrey
T. Testa, Esq., William N. Stahl, Esq., at Schwartz, Tobia,
Stanziale, Sedita & Campisano, P.A., represent the Debtors in
their restructuring efforts.  When the Debtors filed for
protection from their creditors, they listed more than
$500 million in total assets and more than $1 billion in total
debts.


TRUMP HOTELS: Asks Court to Approve Exit Financing Commitments
--------------------------------------------------------------
As a condition precedent to the effectiveness of their Plan of
Reorganization, Trump Hotels & Casino Resorts, Inc., and its
debtor-affiliates must obtain exit financing.  According to
Charles A. Stanziale, Jr., Esq., at Latham & Watkins, LLP, in Los
Angeles, California, an exit financing facility is necessary to
allow the Debtors to:

    -- repay obligations due under their DIP Financing;

    -- make cash payment required by the Plan; and

    -- provide necessary working capital for the business
       operations and the general corporate purposes of the
       reorganized Debtors.

Prior to the bankruptcy petition date, the Debtors employed UBS
Investment Bank as their financial advisors.  UBS Bank was granted
the right to lead an exit financing facility for the Debtors.  
Beginning in April 2004, UBS began a marketing and solicitation
program to identify lenders interested in funding the exit
financing facility contemplated by the Plan.  UBS Bank contacted
seven potential lending sources, including Morgan Stanley & Co.
Inc., and UBS Loan Finance, LLC, regarding their interest in
funding the Debtors' exit financing needs.

Through discussions, it became clear that Morgan Stanley and UBS
Loan, together with a syndicate of other lenders, would be
willing to fund the Debtors' exit financing.  After carefully
evaluating the Exit Lenders' proposal, the Debtors determined
that that proposal afforded the Debtors the best terms for their
exit financing needs.

Consequently, the Debtors pursued further negotiations with
Morgan Stanley and UBS, and paid to Morgan Stanley a $1,000,000
fee in connection with prepetition due diligence in respect of
the Exit Financing.  The Debtors asked Morgan Stanley to commence
their due diligence to ensure that it could provide exit
financing on the Debtors' anticipated schedule for exit from
Chapter 11.

As a result of those negotiations, on Dec. 16, 2004, the
Debtors and the Exit Lenders reached agreement on a commitment
letter, whereby Morgan Stanley, acting as administrative agent,
and UBS Securities, LLC, as syndication agent, for a syndicate of
lenders, agreed to fund the Exit Financing on the terms and
condition set forth in the Commitment Letter.

In return for the Exit Lenders' funding the Exit Financing, the
Debtors agreed to pay certain related fees to the Exit Lenders
pursuant to a fee letter agreement between the parties, dated
Dec. 16, 2004.

By this motion, the Debtors seek the U.S. Bankruptcy Court for the
District of New Jersey's authority to:

    (a) enter into the Commitment Letter, the Fee Letter, and
        other exit financing commitments with Morgan Stanley and
        UBS;

    (b) pay the related fees and expenses.

The Commitment Letter carries with it a commitment to provide
$500 million of a senior secured bank financing.  Morgan Stanley
Senior Funding, Inc., commits to provide up to 80% of the Senior
Bank Financing while UBS will provide the remaining 20%.  The
Senior Bank Financing will be in the form of:

    1) A $150 million single draw term loan facility -- Tranche
       B-1 Term Loan Facility -- the final maturity of which will
       be seven years after the Closing Date.

    2) A $150 million delayed draw term loan facility -- Tranche
       B-2 Term Loan Facility -- which final maturity will also
       occur seven years after the Closing Date.

    3) Revolving Credit Facility for $200 million, which final
       maturity will occur five  years after the Closing Date.

The Closing Date will be on or before May 1, 2005.

                    Senior Bank Financing Terms

Other pertinent terms of the Senior Bank Financing are:

A. Security

    Trump Hotels & Casino Resorts, Inc., as borrower and each of
    the other Debtors as guarantors will grant the Administrative
    Agent and the Lenders a valid and perfected first priority
    lien and security interest in:

       (i) subject to necessary regulatory approval, all shares of
           capital stock, and intercompany debt, of the Debtors,
           limited, in the case of each entity that is a
           controlled foreign corporation, to 66% of the voting
           stock of that entity;

      (ii) substantially all of the Debtors' property and assets;
           and

     (iii) all proceeds and products of the Debtors' capital
           stock, intercompany debt, property, and assets.

B. Interest Rates

    "Base Rate" will mean the higher of:

       (x) 1/2 of 1% in excess of the federal funds rate; and

       (y) the rate that Morgan Stanley announces from time to
           time as its prime or base commercial lending rate, as
           in effect from time to time.

    The "Applicable Margin" means at any time:

       (i) in respect of the Revolving Credit Facility:

           (x) for the first six months after the Closing Date,
               1.50% per annum in respect of Base Rate Loans and
               2.50% per annum in respect of Eurodollar Loans; and

           (y) after the six-month period, the applicable
               percentage determined in accordance with a pricing
               grid based on leverage to be determined; and

      (ii) in respect of the Tranche B-1 Term Loan Facility and
           the Tranche B-2 Term Loan Facility, 1.75% per annum in
           respect of Base Rate Loans and 2.75% per annum in
           respect of Eurodollar Loans.

    At the THCR's option, loans may be maintained from time to
    time as:

       (i) Base Rate Loans, which will bear interest at the
           Applicable Margin in excess of the Base Rate in effect
           from time to time; or

      (ii) Eurodollar Loans, which will bear interest at the
           Applicable Margin in excess of the Eurodollar Rate as
           determined by Morgan Stanley for the interest period,
           provided that until the earlier to occur of (x) the
           30th day after the Closing Date, and (y) that date upon
           which Morgan Stanley has determined that the primary
           syndication of the Senior Bank Financing has been
           completed, Eurodollar Loans will have an interest
           period of one month.

    During the continuance of any default under the loan
    documentation, the Applicable Margin on all obligations owing
    under the loan documentation will increase by 2% per annum.

    Interest periods of one, two, three and six months will be
    available in the case of Eurodollar Loans.

    Interest in respect of Base Rate Loans will be payable
    quarterly in arrears on the last business day of each quarter.
    Interest in respect of Eurodollar Loans will be payable in
    arrears at the end of the interest period and every three
    months in the case of interest periods in excess of three
    months.  Interest will also be payable at the time of
    repayment of any Loans, and at maturity.  All interest and
    commitment fee and other fee calculations will be based on a
    360-day year.

C. Unused Commitment Fees

    Under the Tranche B-2 Term Loan Facility fees equal to 1% per
    annum on the unused portion of each Exit Lender's share of the
    Tranche B-2 Term Loan Facility, will be payable:

       (i) quarterly in arrears during the Tranche B-2
           Availability Period; and

      (ii) on the last day of the Tranche B-2 Availability Period.

    With regards to the Revolving Credit Facility, l/2 of 1% per
    annum on the unused portion of each Exit Lender's share of the
    Revolving Credit Financing, will be payable:

       (i) quarterly in arrears; and

      (ii) on the date of termination or expiration of the
           commitments.

D. Letter of Credit Fees

    Applicable Margin for Eurodollar Loans, which are Revolving
    Loans on the aggregate outstanding stated amounts of letters
    of credit plus an additional 1/4 of 1% on the aggregate
    outstanding stated amounts of letters of credit will be paid
    as a fronting fee to the issuing bank.

E. Voluntary Commitment Reductions

    THCR may, from time to time make voluntary reductions to the
    unutilized portion of the Senior Bank Financing, including the
    Revolving Credit Facility, without premium or penalty.

F. Voluntary Prepayment

    THCR may, upon at least one business day's notice in the case
    of Base Rate Loans and three business days' notice in the case
    of Eurodollar Loans, prepay, in full or in part, the Senior
    Bank Financing without premium or penalty; provided, however,
    that each partial prepayment will be at $5,000,000 or an
    integral multiple of $1,000,000 in excess thereof; provided
    further that any prepayment of Eurodollar Loans will be made
    together with reimbursement for any resulting funding losses
    of the Lenders.

G. Mandatory Prepayment and Commitment Reduction

    THCR will prepay the Senior Bank Financing, ratably to the
    principal repayment installments of each of the Term
    Facilities on a pro rata basis and then to the Revolving
    Credit Facility, with (a) all net cash proceeds (i) from the
    Debtors' sales of property and assets, (ii) of extraordinary
    receipts, and (iii) from the issuance after the Closing Date
    of additional debt of the Debtors otherwise permitted under
    the loan documentation, in each case under this clause (a)
    with exceptions to be agreed, (b) commencing after the first
    full year of the Senior Bank Financing, 50% of Excess Cash
    Flow of the Debtors, and (c) 50% of the net cash proceeds from
    the issuance of equity.  Mandatory prepayments in respect of
    the Revolving Credit Facility will not be subject to a
    corresponding reduction in the Commitments under it.

H. Documentation

    The commitments of Morgan Stanley and UBS will be subject to
    the negotiation, execution and delivery of definitive
    financing agreements consistent with the terms of the
    Commitment Letter.

I. Representations and Warranties

    The parties agree to representations and warranties
    customarily found in credit agreements for similar
    secured financings.

J. Events of Default

    The Events of Default are those customarily found in credit
    agreements for similar secured financings, which include:

       (i) failure to pay principal when due, or to pay interest
           or other amounts within two business days after the
           same becomes due, under the loan documentation;

      (ii) any representation or warranty proving to have been
           materially incorrect when made or confirmed;

     (iii) failure to perform or observe covenants set forth in
           the loan documentation within a specified period of
           time, where customary and appropriate, after notice or
           knowledge of the failure;

      (iv) cross-defaults to other indebtedness in an amount to be
           agreed in the loan documentation;

       (v) bankruptcy and insolvency defaults;

      (vi) monetary judgment defaults in an amount to be agreed in
           the loan documentation and non-monetary judgment
           defaults that could reasonably be expected to have a
           Material Adverse Effect;

     (vii) impairment of loan documentation or security;

    (viii) change of control; and

      (ix) standard ERISA defaults.

K. Expenses

    THCR will pay all of Morgan Stanley's and UBS' due diligence,
    syndication, search, filing and recording fees and all other
    reasonable out-of-pocket expenses they incurred, whether or
    not any of the contemplated transactions are consummated, as
    well as all reasonable expenses of Morgan Stanley in
    connection with the administration of the loan documentation.
    THCR will also pay Morgan Stanley's and UBS' reasonable
    expenses in connection with the enforcement of any of the loan
    documentation.

L. Indemnity

    The Debtors will indemnify and hold harmless Morgan Stanley,
    UBS, and each of their affiliates and their officers,
    directors, employees, agents and advisors from claims and
    losses relating to the Senior Bank Financing.

M. Waivers & Amendments

    Amendments and waivers of the provisions of the loan agreement
    and other definitive credit documentation will require the
    approval of the lenders holding more than 50% of the aggregate
    amount of loans and commitments under the Senior Bank
    Financing -- Required Lenders, except that the consent of all
    affected Lenders be required with respect to:

       (i) increases in commitment amounts;

      (ii) reductions of principal, interest, or fees;

     (iii) extensions of scheduled maturities or times for
           payment;

      (iv) releases of all or substantially all of the collateral
           or the value associated with the guarantees; and

       (v) changes to the order of application of prepayments.

N. Assignments and Participations

    Assignments may be non-pro rata and must be to Eligible
    Assignees pursuant to the loan documentation, and in each case
    other than an assignment to a Lender or an assignment of the
    entirety of a Lender's interest in the Senior Bank Financing,
    in a minimum amount equal to $1 million.  Each Lender will
    also have the right, without the Debtors' and Morgan
    Stanley's consent, to assign:

       (i) as security, all or part of its rights under the loan
           documentation to any Federal Reserve Bank; and

      (ii) all or part of its rights or obligations under  the
           loan documentation to any of its affiliates.

    No participation will include voting rights, other than for
    reductions or postponements of amounts payable or releases of
    all or substantially all of the collateral.

A full-text copy of the Terms and Conditions of the Exit Financing
Commitments is available for free at:

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

                            Fee Letter

The Fee Letter provides an amount equal to 0.75% of the Exit
Financing amount or $3,750,000, which will be due and payable to
the Exit Lenders -- 80% to Morgan Stanley and 20% to UBS.  The
Debtors will reimburse, in an amount not to exceed $500,000, the
Exit Lenders' reasonable out-of-pocket expenses in connection
with the Exit Financing.

                       At Fair Market Terms

The Debtors believe that the fees and expenses provided for in
the Exit Financing Commitments are at normal and customary levels
for financing facilities comparable to the Exit Financing.
Payment of those fees and expenses is reasonable and appropriate
in the context of the Exit Lenders' agreement to fund the Exit
Financing.

The terms of the Commitment Letter and the Fee Letter have been
negotiated in good faith and at arm's length, followed on the
heels of the Debtors' own substantial market test for the Exit
Financing.  The Debtors believe that the financial terms of the
Commitment Letter and the Fee Letter represent fair market terms
for facilities of this type.

According to Mr. Stanziale, approval of the Exit Financing
Commitments at this time will allow the Debtors to promptly
commence negotiating documentation for an exit facility
consistent with the expedited schedule that the Debtors are
seeking for the Plan's confirmation.

Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino
Resorts, Inc. -- http://www.thcrrecap.com/-- through its  
subsidiaries, owns and operates four properties and manages one
property under the Trump brand name.  The Company and its debtor-
affiliates filed for chapter 11 protection on Nov. 21, 2004
(Bankr. D. N.J. Case No. 04-46898 through 04-46925).  Robert A.
Klymman, Esq., Mark A. Broude, Esq., John W. Weiss, Esq., at
Latham & Watkins, LLP, and Charles Stanziale, Jr., Esq., Jeffrey
T. Testa, Esq., William N. Stahl, Esq., at Schwartz, Tobia,
Stanziale, Sedita & Campisano, P.A., represent the Debtors in
their restructuring efforts.  When the Debtors filed for
protection from their creditors, they listed more than
$500 million in total assets and more than $1 billion in total
debts.


TRUMP HOTELS: Wants Court to Approve Solicitation Procedures
------------------------------------------------------------
Trump Hotels & Casino Resorts, Inc., and its debtor-affiliates ask
the U.S. Bankruptcy Court for the District of New Jersey to
approve procedures associated with the solicitation of votes on
their Joint Plan of Reorganization.

The Trumbull Group, LLC, as balloting agent, will inspect,
monitor and supervise the solicitation process, serve as the
tabulator of the ballots, and certify to the Court the results of
the balloting.

                            Record Date

Pursuant to Rule 3018(a) of the Federal Rules of Bankruptcy
Procedure, the Debtors ask the Court to set Jan. 17, 2005, as
the record date for determining the holders of claims and equity
security interests entitled to:

    -- receive a Solicitation Package,
    -- receive a Non-Voting Notice, and
    -- vote to accept or reject the Plan.

In determining the identity of their equity security holders as
of the Record Date, the Debtors will be entitled to rely
conclusively and exclusively on:

    1) a list of equity security holders provided by Continental
       Stock & Transfer, their equity transfer agent, dated as of
       the Record Date; and

    2) a security position report provided by Depository Trust
       Company as of the Record Date.

To ascertain the identity of the Debtors' public debt holders as
of the Record Date, the Debtors will rely conclusively and
exclusively on:

    1) a list of public debt holders provided by US Bank National
       Association, the Indenture Trustee for all of the
       Debtors' issues of public debt, as of the Record Date; and

    2) a debt security position report provided by Depository
       Trust Company as of the Record Date.

The Debtors will not be required to undertake any efforts to
determine:

    (i) which of the persons listed on the Equity List, the Equity
        Security Position Report, the Debt Security Position
        Report, or the Public Debt List hold equity security
        interests or public debt on their own behalf or on behalf
        of others; or

   (ii) the actual identity of any holder of equity security
        interests or public debt who holds the interests or debt
        in a street name or through an intermediary listed on the
        Equity List, the Equity Security Position Report, the Debt
        Security Position Report, or the Public Debt List.

                            Ballot Forms

The Debtors propose two forms of Ballots:

    1) a ballot for beneficial owners of claims and interests; and

    2) a ballot for the use of brokers, banks, or other nominees
       for beneficial owners of claims or interests -- the Master
       Ballot.

The Forms are based on the Official Form No. 14, but are modified
to meet the requirements of the Debtors' Chapter 11 cases and the
Plan.

All Ballots will be accompanied by return envelopes addressed to
Trumbull.  The Ballots will also give notice of the time within
which to accept or reject the Plan.

                       Solicitation Packages

In accordance with Bankruptcy Rule 3017(d), the Debtors will
instruct Trumbull to commence the solicitation by transmitting by
mail a Solicitation Package to holders of claims and equity
security interests as of the Record Date entitled to vote on the
Plan.  The Solicitation Package will consist of:

    1) the Order scheduling the Confirmation Hearing;
    2) the appropriate Ballot; and
    3) written notice of:

          * the Court's approval of the Disclosure Statement;

          * the deadline and procedures for filing confirmation
            objections;

          * instructions on how to obtain copies of the Disclosure
            Statement, the Plan, and other exhibits to the
            Disclosure Statement; and

          * related issues.

The Debtors will complete mailing of the Solicitation Package no
later than 10 days after the Court's approval of the Disclosure
Statement.

Robert A. Klyman, Esq., at Latham & Watkins LLP, in Los Angeles,
California, relates that much of the Debtors' public debt is held
of record in "street name" by security intermediaries who in turn
hold the debt securities for the account of beneficial owners.
To enable the Debtors to solicit the votes of the beneficial
holders, the Debtors ask the Court to authorize the appropriate
security intermediaries to obtain the votes of the beneficial
owners in this manner:

    1) the securities intermediary may either:

          * forward the Solicitation Package to each beneficial
            owner of the applicable debt security for voting and
            include a postage-prepaid, return envelope provided by
            and addressed to the security intermediary so that the
            beneficial owner may return the completed beneficial
            owner Ballot for inclusion in the appropriate Master
            Ballot; or

          * pre-validate a Ballot by:

               -- signing it and by indicating on the Ballot the
                  record holder of the Debt Securities voted, the
                  principal amount and the appropriate account
                  number; and

               -- forwarding the Solicitation Package along with
                  the pre-validated Ballot to the beneficial owner
                  of the debt security for voting, so that the
                  beneficial owner may return the completed
                  Ballot directly to the Balloting Agent in the
                  return envelope provided in the Solicitation
                  Package.

The Debtors intend to deviate from the requirements of Bankruptcy
Rule 3017(d) and Section 1125(b) of the Bankruptcy Code to allow
them to distribute Solicitation Packages that do not contain a
copy of the Disclosure Statement and its exhibits.  The Debtors
believe that the deviation is necessary because of the length of
the Disclosure Statement and the Plan, and the large volume of
their creditors and equity security holders.  With this proposal,
the Debtors expect cost savings to be at hundreds of thousands of
dollars.  Mr. Klyman assures the Court that the Debtors' impaired
creditors and equity security holders will not be prejudiced by
the provision because the Disclosure Statement and the Plan will
be easily accessible to those individuals and entities that wish
to receive a copy.

The Solicitation Notice will provide explicit instructions on how
to obtain a copy of the Disclosure Statement, the Plan, and other
exhibits of the Disclosure Statement from:

    * the Court's Web site -- http://www.njb.uscourts.gov/

    * the Debtors' Web site -- http://www.thcrrecap.com/

    * the Debtors, at the Debtors' expense, upon written request
      to:

          Latham & Watkins LLP
          633 West Fifth Street, Suite 4000
          Los Angeles, CA 90071-2007
          Facsimile: (213) 891-8763
          Attn: Kathryn Bowman

The Debtors also seek an exemption from the requirement to
transmit a Solicitation Package to the claimholders designated
under the Plan as unimpaired or to holders of impaired claims or
interests that are not entitled to receive any distribution under
the Plan.  The Non-Voting Creditors and Interest Holders are
deemed to have accepted or rejected the Plan, as applicable, and
are not entitled to vote on the Plan.  The Debtors intend to mail
each Non-Voting Creditor and Interest Holder, a notice indicating
that Non-Voting Creditors and Interest Holders are entitled to
receive a copy of the Plan and Disclosure Statement from other
sources.

              Voting Deadline & Tabulation Procedures

All Ballots must be received by the Balloting Agent, on or before
Feb. 25, 2005, at 4:00 p.m. Eastern Standard Time.

The Debtors propose to use these procedures in the tabulation of
the Ballots:

    a) the claim amount used to tabulate acceptance or rejection
       of the Plan must be the amount listed in the Debtors'
       Schedules of Liabilities, provided that the claim is not
       scheduled as contingent, unliquidated, undetermined or
       disputed, provided however, if a claim is filed for the
       contingent, unliquidated, undetermined or disputed claim,
       the claim amount used to tabulate acceptance or rejection
       of the Plan will be the amount set forth on the claim,
       unless the Debtors object to the claim for allowance or
       voting purposes;

    b) any Ballot which is properly completed, executed and timely
       returned to Trumbull that does not indicate an acceptance
       or rejection of the Plan will be deemed to be a vote to
       accept the Plan;

    c) unsigned Ballots will not be counted;

    d) whenever a holder of a claim or equity security interest
       casts more than one Ballot voting the same interests or
       claim prior to the Voting Deadline, only the last timely
       Ballot received by the Balloting Agent will be counted;

    e) if a holder of a claim or equity security interest casts
       simultaneous duplicative Ballots voted inconsistently, the
       Ballot will count as one vote accepting the Plan;

    f) only Ballots that are timely received with original
       signatures will be counted; and

    g) any Ballot received by the Balloting Agent by telecopier,
       facsimile, or other electronic communication will not be
       counted.

The Debtors believe that the proposed voting and tabulation
procedures are necessary to avoid any confusion with incomplete
Ballots and will simplify the tabulation process.

                         Solicitation Notice

Upon the commencement of the solicitation, the Debtors will mail,
or cause to be mailed, the Solicitation Package and Non-Voting
Notice.  On or before January 28, 2005, the Debtors will publish
the Solicitation Notice in:

    * the national edition of The Wall Street Journal;
    * The New York Times;
    * The Newark Star Ledger;
    * The Philadelphia Inquirer:
    * The Asbury Park Press;
    * The Atlantic City Press; and
    * The Post Tribune (Gary, Indiana).

The Solicitation Notice will also provide instructions on how to
obtain copies of the Disclosure Statement and exhibits to the
Disclosure Statement.

                    March 9 Confirmation Hearing

The Debtors ask the Court to schedule the confirmation hearing on
March 9, 2005.

Objections to confirmation of the Plan, if any, must:

       -- be in writing,

       -- comply with the Bankruptcy Code, the Bankruptcy Rules,
          and the New Jersey Local Bankruptcy Rules;

       -- set forth the name of the objector, and the nature of
          the amount of any claim or equity security interest
          asserted against the estate or property of the Debtors;

       -- state with particularity the legal and factual basis for
          the objection; and

       -- be filed with the Clerk of the U.S. Bankruptcy Court for
          the District of New Jersey, with a copy to Judge Wizmur,
          together with its proof of service, and served by
          personal service or overnight delivery, so as to be
          received no later than 4:00 p.m. Eastern Standard Time
          on February 25, 2005.

Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino
Resorts, Inc. -- http://www.thcrrecap.com/-- through its  
subsidiaries, owns and operates four properties and manages one
property under the Trump brand name.  The Company and its debtor-
affiliates filed for chapter 11 protection on Nov. 21, 2004
(Bankr. D. N.J. Case No. 04-46898 through 04-46925).  Robert A.
Klymman, Esq., Mark A. Broude, Esq., John W. Weiss, Esq., at
Latham & Watkins, LLP, and Charles Stanziale, Jr., Esq., Jeffrey
T. Testa, Esq., William N. Stahl, Esq., at Schwartz, Tobia,
Stanziale, Sedita & Campisano, P.A., represent the Debtors in
their restructuring efforts.  When the Debtors filed for
protection from their creditors, they listed more than
$500 million in total assets and more than $1 billion in total
debts.


UAL CORPORATION: Court Directs $17,652,330 into Escrow
------------------------------------------------------
On August 1, 1997, California Statewide Communities Development
Authority issued $154,845,000 Special Facilities Lease Revenue
Bonds, 1997 Series A (United Air Lines, Inc. - San Francisco
International Airport Projects).  The funds were used for
improvements at the San Francisco Airport.  In connection with
the Bond issuance, UAL Corporation and its debtor-affiliates
entered into a series of Bond Agreements, including a Facilities
Lease, a Site Sublease and a Maintenance Base Lease.

HSBC Bank USA is the indenture trustee with respect to the Bonds.

On March 21, 2003, the Debtors commenced Adversary Proceeding 03-
A-00975 captioned United Air Lines v. California Statewide
Communities et al., seeking a declaration that, among other
things, the Bond Agreements together with the Facilities Lease
are part of a "disguised" financing arrangement.

On March 30, 2004, the Bankruptcy Court entered a summary
judgment in Adversary Proceeding in the Debtors' favor.  The
Bankruptcy Court ruled that the Facilities Lease at San
Francisco was not a "true lease."

HSBC took an appeal from the Bankruptcy Court's order to the
United States District Court for the Northern District of
Illinois.  On November 16, 2004, the District Court reversed the
Bankruptcy Court's decision.  The Debtors intend to take an appeal
from the District Court's order to the Seventh Circuit Court of
Appeals.

                          *     *     *

Judge Wedoff rules that so long as UAL Corporation and its debtor-
affiliates continue to make the scheduled payments, the 1997 SFO
Bond Parties may not take any action on the Maintenance Facilities
Lease or any Bond Agreement.

Judge Wedoff directs the Debtors to place $17,652,330 into  
escrow.  The Debtors will place all additional payment  
obligations under the Bonds into escrow as they come due.  The  
escrow funds will be held in trust for the benefit of the 1997  
Bond Parties and the holders of the Series 1997A Bonds.

Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier.  The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191).  James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts. (United Airlines
Bankruptcy News, Issue No.72; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


UAL CORP: Wants Court Nod on TWU Pact Reducing Wage by 9.8%
-----------------------------------------------------------
UAL Corporation and its debtor-affiliates ask Judge Wedoff to
approve a Letter Agreement with the meteorologists represented by
the Transport Workers Union of America.

James H.M. Sprayregen, Esq., at Kirkland & Ellis, in Chicago,  
Illinois, relates that since November 5, 2004, the Debtors and  
the TWU's negotiating committee "have worked tirelessly to reach  
a consensual agreement that would achieve the cost reductions"  
needed to avoid the harsh measures of Section 1113(c) of the  
Bankruptcy Code.  These negotiations have resulted in a tentative  
agreement between the TWU and the Debtors on significant and  
necessary modifications to the TWU collective bargaining  
agreement.

The Letter Agreement was finalized on December 31, 2004, and is  
subject to membership ratification.  The TWU has commenced the  
membership voting process.  Under the TWU Letter Agreement,  
meteorologist base pay rates will be reduced by 9.8%, effective  
January 1, 2005, and will not begin increasing until July 1,  
2005.

If the Debtors seek to terminate the United Airlines Management,  
Administrative and Public Contact Defined Benefit Pension Plan,  
which governs the TWU's pension, the TWU will waive any claims  
that the termination violates its collective bargaining  
agreement.  The TWU will not oppose the Debtors' termination  
efforts.  If the Plan is terminated, the Debtors will make an  
additional monthly contribution to the TWU's defined contribution  
plan of 3.25% to 7.25% of meteorologist compensation.  The amount  
will be based on each covered employees points through  
December 31, 2009.  The Debtors will contribute 5.5% of  
meteorologist compensation after that date.  Points are based on  
full years of age plus full years of service.

The TWU will share in the Debtors' recovery.  The TWU's members  
will be rewarded through a profit-sharing program if the Debtors'  
results exceed specified profit margins.  Under any plan of  
reorganization proposed by the Debtors, the TWU will receive  
$24,000 in Convertible Notes and percentage distributions of  
equity or other consideration provided to general unsecured  
creditors.  The Debtors will also reimburse the TWU for certain  
reasonable fees and expenses.  This will motivate the Debtors'  
meteorologists to provide high quality service while  
restructuring imperatives continue.   

If the TWU Letter Agreement is terminated, the TWU will be  
entitled to an allowed administrative expense under Section  
503(b) equal to the cash savings provided to the Debtors from the  
Effective Date through termination.  The TWU will not be entitled  
to the claim if its pension is maintained.

Mr. Sprayregen says that the Court should approve the TWU Letter  
Agreement.  The terms were reached after careful deliberation and  
extensive, intense and complex negotiations.  The modifications  
equitably address the financial, transformational and labor  
relations imperatives facing the Debtors in a cooperative manner.   
The TWU Letter Agreement will help the Debtors achieve near-term  
earnings improvements, satisfy DIP financing covenants, obtain  
exit financing and cope with the current difficult airline  
industry environment.

Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier.  The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191).  James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts. (United Airlines
Bankruptcy News, Issue No.72; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


ULTIMATE ELECTRONICS: Can Access Up to $86 Mil. in DIP Financing
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has granted  
Ultimate Electronics, Inc., interim approval of the debtor-in-
possession facilities provided by Wells Fargo Retail Finance and
Mark Wattles, with immediate access of up to $86 million.  
Approximately $70 million will be used to repay the Company's
outstanding pre-bankruptcy bank debt.

The Court has also approved the Company's first-day motions to
continue normal business operations, including the payment of
employees and the continuation of customer programs such as price
guarantees, layaways, gift cards and other credits.

"We are pleased that our requests received quick approval," said
Dave Workman, Ultimate Electronics' President and Chief Executive  
Officer.  "With the investment from Mark Wattles and the
additional financing from Wells Fargo, we now have the capital we
need.  Our customers can still count on us for the same quality of
service they have come to expect from us since 1968."

Headquartered in Thornton, Colorado, Ultimate Electronics, Inc. --
http://www.ultimateelectronics.com/-- is a specialty retailer of  
consumer electronics and home entertainment products located in
the Rocky Mountain, Midwest and Southwest regions of the United
States. The Company operates 65 stores and focuses on mid-to
high-end audio, video, television and mobile electronics products.
The Company and its debtor-affiliates filed for chapter 11
protection on January 11, 2005 (Bankr. D. Del. Case No. 05-10104).
J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represents the Debtors in their restructuring efforts.  When
the Debtor filed for protection from its creditors, it listed
total assets of $329,106,000 and total debts of $160,590,000.


UNISYS CORP: Moody's Affirms Ba1 Senior Implied Ratings
-------------------------------------------------------
Moody's Investors Service revised Unisys Corporation's rating
outlook to negative from stable and affirmed the company's Ba1
senior implied rating and SGL-2 liquidity rating.  The change in
outlook reflects operational difficulties the company has faced in
recent quarters, which has diminished profitability and cash flow
generation.  

The rating outlook includes expectations that lower profitability
and increases in working capital investment will likely dampen
cash flow in the near term.  As Unisys Corp. looks to increase its
exposure to systems integration and business process outsourcing
to offset declines in its Technology hardware business,
competitive pricing and contract negotiation pressures are
expected to remain.

Unisys Corp. has announced certain underperforming outsourcing
contracts that have negatively impacted margin performance.  
Delays in expected new contract signings and in the recognition of
revenue under a large, multi-element contract have also resulted
in top line results falling below expectations.  Based on
preliminary results announcement on January 11, 2005, Unisys
expects to report a net loss between 7 and 10 cents per share for
the fourth quarter, $23 to $33 million, based on 336 million
shares of common stock outstanding as of September 30, 2004.  

The resulting full year 2004 net income would be an estimated $40
to $50 million compared to $259 million achieved in 2003.  
Included in the fourth quarter loss will be a pretax non-cash
asset impairment charge of approximately $120 million for the
write off of capitalized assets related to a particular
underperforming contract.

The rating could stabilize to the extent that Unisys is able to
demonstrate sustainable improvement in its consolidated operating
margins, which are currently below 5% on an LTM basis.  The
ability to generate free cash flow generation (cash flow from
operations less capital expenditures and cash acquisitions) at
levels in excess of 10% of adjusted debt (debt plus the present
value of operating leases) may also lead to a stabilization of the
rating outlook.  

Alternatively, the rating could face additional downward pressure
to the extent revenue declines in Technology are not offset by
growth in Services, cash flow generation attenuates, consolidated
margin levels do not show meaningful improvement or Unisys
announces further material charges from write downs or
restructurings.

Unisys Corporation, based in Blue Bell, Pennsylvania, is a
worldwide provider of IT services and technology hardware.  The
company generated $5.9 billion of revenue in 2003.


US AIRWAYS: Inks New Financing Pacts for Six Regional Jets
----------------------------------------------------------
US Airways has reached aircraft leasing and financing agreements
with Embraer, Bombardier and DVB Bank for a total of six regional
jets.  The agreements were approved by the U.S. Bankruptcy Court
for the Eastern District of Virginia, Alexandria division.

Under the agreements, US Airways is expected to take delivery of
three 72- seat Embraer 170 and three 70-seat Bombardier CRJ 700
regional jets by the end of January.  These will be the first
regional jets delivered to the company since US Airways filed for
Chapter 11 in September 2004.

The carriers operating under the US Airways Express banner,
including the wholly owned subsidiaries, affiliates and Mid
Atlantic Airlines, currently operate 169 regional jets.

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: Inks Pact Extending Use of Cash Through June 30
-----------------------------------------------------------
US Airways Group, Inc., and the Air Transportation Stabilization
Board -- ATSB -- have reached an agreement that extends the
airline's use of cash proceeds from its federally guaranteed loan
through June 30, 2005, paving the way for the airline to continue
operations while it completes its restructuring and planned
emergence from Chapter 11 this summer.

The company has been operating with the use of ATSB cash
collateral since its Chapter 11 filing on Sept. 12, 2004.  An
initial agreement was extended until Jan. 15, 2005, and the new
extension will be presented to the U.S. Bankruptcy Court for the
Eastern District of Virginia for approval.

"This long-term extension is a huge boost for our customers,
employees and business partners, as we work to complete our
transformation into a low-cost airline," said Bruce R. Lakefield,
president and chief executive officer of US Airways.  "Our
customers should book us with confidence, knowing that we have
sufficient cash to operate as well as to implement the many
changes that are already under way.  For our employees, this
extension conveys that their sacrifices are an investment in the
company's future, as we demonstrate to the ATSB and others that we
are working hard to be a competitive and successful airline.  And
for our vendors and business partners that have been working with
us throughout this restructuring, this agreement is a signal that
those efforts are well worth it, as we will remain a player in the
industry."

Details of the agreement will be filed with the court.  The
provisions are consistent with the previous agreement with the
ATSB as well as the company's agreement with the General Electric
Capital Aviation Services, that it maintain minimum weekly cash
balances and sufficient liquidity.  Achieving these cash
requirements is dependent on the company securing the cost savings
in the proposals made by the company last week to the
International Association of Machinists, either through
ratification of the proposals by IAM members or by implementing
the Bankruptcy Court's Jan. 6, 2005, decision that rejected the
IAM labor contracts.  Ratification for the three separate IAM
workgroups is to conclude on Jan. 21, 2005.

"We have worked very closely with the ATSB to provide them with
solid information and assurances about the progress we have made
in our restructuring.  Securing the GECAS agreement on aircraft
financing and labor cost reductions were significant milestones,"
said Mr. Lakefield.  "Those achievements, in combination with the
ATSB's collateral holdings and the management team's laser focus
on keeping this restructuring on track, provide the platform for
the nearly six-month extension that is an important confidence
builder so that customers can book us as they normally would --
especially during the spring, which is traditionally our most
profitable season.

"While we still have much work to do, I think our most difficult
period is behind us and my sense is that our employees are united
in working with us to complete the restructuring," said Mr.
Lakefield.  "This extension essentially builds us the necessary
runway for a take-off this summer.  In the meantime, we will
continue to work closely with the ATSB so that they remain
informed and supportive of our efforts."

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: Wants to Modify Retiree Benefits
--------------------------------------------
On October 28, 2004, pursuant to Section 1114(c) of the
Bankruptcy Code, the United States Bankruptcy Court for the
Eastern District of Virginia appointed an official committee to
represent retirees of the Air Line Pilots Association
International, the Association of Flight Attendants-Communications
Workers of America, the Communications Workers of America, AFL-
CIO, and non-union retirees.  On November 2, 2004, US Airways
Group, Inc., and its debtor-affiliates delivered their Section
1114 Proposals to the Retiree Committee, seeking cost savings of
approximately $20,700,000 annually, by reducing certain retiree
benefits related mostly to health care.  Thereafter, the Debtors
and the Retiree Committee frequently met in a good faith effort to
negotiate modifications to retiree benefits.  On January 5, 2004,
the parties reached a consensual Agreement.

The Agreement substitutes the present medical and dental coverage
provided by the Debtors to current retirees with COBRA coverage.  
The COBRA rate will be 102% of the active population's book rate.  
Retired pilots are exempted from this modification.  The Health
Coverage Tax Credit is expected to apply to most of the pre-65
retirees due to COBRA medical plan coverage and the receipt of
benefits from a defined benefit plan administered and paid for by
the Pension Benefit Guaranty Corporation.  The HCTC will reduce
the costs of COBRA coverage by 65% for many current retirees,
providing a cushion to those most affected.  To the extent that
current retirees, their spouses, or their dependants do not
qualify for COBRA and HCTC treatment, the Debtors will provide
partial compensation for the increased cost of healthcare
coverage.

Under the Agreement, the Debtors will provide payments to current
retirees who cannot take advantage of COBRA or the HCTC.  The
Debtors will supplement those who can participate, but only at an
increased cost.  Both measures will reduce the adverse impact of
increased healthcare costs on current retirees.  These payments
were not envisioned under the Debtors' 1114 Proposal.  Under the
Agreement, the Debtors will achieve less in Section 1114 cost
reductions, but the concession brings an important constituency
into the growing consensus of stakeholders supporting the
reorganization efforts.

According to Brian P. Leitch, Esq., at Arnold & Porter, in
Denver, Colorado, modification of the Debtors' cost structure is a
critical aspect of the Transformation Plan.  The Agreement between
the Debtors and the Retiree Committee is an important step in
making the Debtors a viable competitor in a challenged industry.  
The Agreement is in the best interest of the Debtors, their
bankruptcy estates and their creditors.  Therefore, the Debtors
ask the Court to approve the Agreement.

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


VENTAS INC: To Webcast Fourth Quarter Earnings Results on March 1
-----------------------------------------------------------------
Ventas, Inc. (NYSE: VTR) will issue its 2004 fourth quarter and
year-end earnings release on Monday, Feb. 28, 2005.  A conference
call to discuss those earnings will be held on Tuesday, March 1,
2005, at 10:00 a.m. Eastern Time (9:00 a.m. Central Time).

                        About the Company

Ventas, Inc. -- http://www.ventasreit.com/--is a leading  
healthcare real estate investment trust that owns and invests in
healthcare and senior housing assets in 39 states.  Its properties
include hospitals, skilled nursing facilities and assisted and
independent living facilities.

                          *     *     *

As reported in the Troubled Company Reporter on June 30, 2004,
Standard & Poor's Ratings Services raised its corporate credit
ratings on Ventas Inc., its operating partnership Ventas Realty
L.P., and Ventas Capital Corp. to 'BB' from 'BB-'.  In addition,
ratings are raised on the company's senior unsecured debt, which
totals $366 million.  Concurrently, the outlook is revised to
stable from positive.

"The upgrades acknowledge the company's steady improvement in both
its business and financial profiles," said Standard & Poor's
credit analyst George Skoufis.  "Recent acquisitions have targeted
improving Ventas' diversification, foremost its concentration with
its primary tenant Kindred Healthcare Inc.  Growing cash flow and
profits, and lower leverage have contributed to stronger debt
protection measures. Credit weaknesses remain, however, including
Ventas' continued reliance on un-rated Kindred, the risk of future
changes to government reimbursement, and constrained, but
improved, financial flexibility."


WESTAR ENERGY: S&P Affirms 'BB+' Corporate Credit Rating
--------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' corporate
credit ratings on electric generation and transmission company
Westar Energy, Inc., and subsidiary Kansas Gas & Electric Company.

At the same time, Standard & Poor's assigned its 'BBB-' rating to
Westar Energy's $250 million first mortgage bonds, which were
previously filed under a Rule 415 shelf registration.  Net
proceeds will be used primarily to redeem Westar's outstanding
$260 million 9.75% senior notes due 2007.

The outlook is positive.  As of Sept. 30, 2004, the Topeka,
Kansas-based company had about $1.73 billion of long-term debt
outstanding.

The ratings on Westar and Kansas Gas & Electric reflect an average
business profile, based on the company's core vertically
integrated electric utility operations in Kansas, and a weak but
improving financial profile.

The positive outlook on Westar recognizes the significant actions
management has taken to strengthen the company's financial
condition and reduce its business risk.  However, to make the
transition to investment grade, Westar must achieve and sustain
cash flow measures that are solidly investment grade.


WILLIAM LYON: Launches $150 Million Senior Debt Offering
--------------------------------------------------------
William Lyon Homes' (NYSE:WLS) principal operating company and
wholly-owned subsidiary, William Lyon Homes, Inc., has commenced
an offer to exchange any and all of its outstanding $150,000,000
aggregate principal amount of 7-5/8% Senior Notes due 2012, which
are not registered under the Securities Act of 1933, for a like
aggregate principal amount of its new 7-5/8% Senior Notes due
2012, which are registered under the Securities Act of 1933, upon
the terms and subject to the conditions set forth in the
prospectus dated Jan. 12, 2005, and the related letter of
transmittal, including any amendments or supplements thereto
(which, together with the prospectus, constitute the exchange
offer).  The exchange offer is scheduled to expire at 5:00 p.m.
New York City time on Feb. 14, 2005, unless extended.

The exchange agent for the exchange offer is:

         U.S. Bank National Association
         Corporate Trust Services
         60 Livingston Avenue
         St. Paul, Minnesota, 55107
         Attn: Specialized Finance
         Tel. No.: (800) 934-6802

                        About the Company

William Lyon Homes is one of the oldest and largest homebuilders
in the Southwest with development communities in California,
Arizona and Nevada.  The Company's corporate headquarters are
located in Newport Beach, California.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 26, 2004,
Moody's Investors Service assigned a B2 rating to the issue of
$150 million of 7.625% Senior Notes of William Lyon Homes, Inc.
At the same time, Moody's confirmed the company current ratings,
including its B1 senior implied rating, B2 issuer rating, and B2
ratings on the company's existing issues of senior unsecured
notes.  The ratings outlook is stable.

The stable outlook is based on Moody's expectation that William
Lyon Homes will exercise capital structure discipline as it takes
advantage of growth opportunities in California and elsewhere.
The repurchase of 1,275,000 shares of its common stock, of which
approximately $70 million of the net proceeds of this offering
were used to fund, represents a departure from this expected
discipline but the company's balance sheet and ratings can
accommodate this transaction.

The ratings reflect:

     (1) the company's healthy and growing profitability and the
         substantial growth in its equity base from the nadir
         reached in 1997;

     (2) the company's successful strategy of forming very
         profitable joint ventures in California, particularly for
         high-priced homes, in which it has to put up only minimal
         equity;

     (3) its strong shares in key California markets; and the          
         shift in its capital structure away from one that was
         top-heavy with secured debt.


XOMA LTD: Restructures Genentech Pact on Raptiva Treatment
----------------------------------------------------------
XOMA Ltd. (NASDAQ:XOMA) has restructured its collaboration
agreement with Genentech, Inc., related to RAPTIVA(R), an approved
biologic treatment for chronic moderate-to-severe plaque psoriasis
in adults age 18 or older who are candidates for systemic therapy
or phototherapy.  Key financial elements of the new, restructured
agreement include:

   -- The current cost and profit sharing arrangement in the
      United States will be modified.  XOMA will earn a mid-single
      digit royalty on worldwide sales of RAPTIVA(R) with an
      additional royalty rate on sales in the United States in
      excess of a specified level.  The original agreement
      provided XOMA with the option of electing a royalty-only
      participation in RAPTIVA(R) results, with a higher worldwide
      royalty rate structure, but required immediate repayment of
      the development loan.

   -- In return, Genentech agreed to discharge XOMA's obligation
      to pay the $40 million balance on the development loan plus
      accrued interest and to allow repayment of XOMA's fourth
      quarter share of RAPTIVA(R) operating losses by offsetting
      them against future royalties payable by Genentech.

   -- By selecting the royalty option, XOMA will no longer be
      responsible for funding any development or sales and
      marketing activities or have the right to co-promote       
      RAPTIVA(R).

This revised agreement is effective as of Jan. 1, 2005, and as a
result, RAPTIVA(R) will become immediately profitable for XOMA,
beginning in the first quarter of 2005.  No further financial
details on the restructuring were disclosed.

"Our goal over the next three years is to make XOMA profitable
while continuing to strengthen and deepen our product pipeline,"
said John L. Castello, chairman, president and chief executive
officer of XOMA.  "This is a challenging goal, but the
restructuring of our agreement with Genentech is a critical first
step.  We're enthusiastic about RAPTIVA(R) and our continuing
excellent relationship with Genentech."

"Besides strengthening our balance sheet by eliminating the $40
million loan payable, this restructuring moves XOMA to a royalty
participation on RAPTIVA(R), providing us with positive cash flow
from the product sooner than we would have experienced under the
previous profit sharing agreement" said Peter B. Davis, chief
financial officer of XOMA.  "By working closely and
collaboratively with Genentech, we've been able to restructure the
agreement in a mutually satisfactory way."

                        About the Company

XOMA -- http://www.xoma.com/-- is a biopharmaceutical company  
focused on the development and commercialization of antibody and
other protein-based biopharmaceuticals for disease targets that
include cancer, immunological and inflammatory disorders, and
infectious diseases.

At Sept. 30, 2004, XOMA Ltd.'s balance sheet showed a $7,172,000
stockholders' deficit, compared to $48,214,000 in positive
equity at Dec. 31, 2003.


* Stroock & Stroock Names Four New Special Counsel
--------------------------------------------------
Stroock & Stroock & Lavan LLP, a national law firm with offices in
New York, Los Angeles and Miami, named four new Special Counsel,
effective January 1, 2005.

The new Special Counsel and their practices are:

   -- Ayesha M. Barnett (Corporate, New York)

Ms. Barnett, 39, advises clients on a broad range of corporate
matters, including mergers and acquisitions, corporate finance and
securities transactions.  She regularly represents purchasers and
sellers in negotiated purchases and dispositions of assets and
businesses.  Ms. Barnett also counsels issuers and investment
banks in public and private offerings of debt and equity
securities, and advises private investment funds as to their
formation and investment activities.

   -- Jonathan D. Blum (Real Estate, New York)

Mr. Blum, 34, practices in all areas of real estate development
law, including the negotiation of leases, contracts of sale and
construction-related agreements.  He regularly counsels clients
involved in commercial leasing, representing landlords and tenants
in both office and retail leases.

   -- Eric M. Kay (Financial Restructuring, New York)

Mr. Kay, 40, focuses on corporate restructurings, representing
debtors, creditors' committees, secured lenders, distressed debt
investors, acquirers and other creditors in bankruptcy proceedings
and out-of-court restructurings.  He regularly represents
bondholder committees, official creditors' committees and large
individual creditors in complex Chapter 11 cases.

   -- Donald Liebman (Real Estate/Tax Certiorari, New York)

Mr. Liebman, 47, has been involved in every aspect of the tax
certiorari field, from strategic real estate tax planning to trial
and appeal.  He represents both institutional and real estate
industry clients in successfully challenging valuations, obtaining
tax exemptions for both new construction and redevelopment, and
rendering opinions on the potential taxation of various projects.

Stroock & Stroock & Lavan LLP -- http://www.stroock.com/--  
established in 1876, is a law firm providing transactional and
litigation guidance to leading multinational corporations,
investment banks, and venture capital firms in the U.S. and
abroad.  Stroock's emphasis on client service and innovation has
made it one of the nation's leading law firms for 125 years.  
Stroock's practice areas include corporate finance, legal services
to financial institutions, energy, financial restructuring,
intellectual property, litigation and real estate.  


* Fitch Says U.S. High Yield 2004 Default Rate is at 1.5%
---------------------------------------------------------
The fourth quarter of 2004 produced $3.3 billion in U.S. high
yield defaults, higher than the previous two quarters combined,
but nonetheless pushing the year's default tally no higher than
$10 billion, less than a third of 2003's $33.8 billion, according
to Fitch Ratings.  The number of issuers defaulting on their bond
obligations in 2004 fell by a nearly proportional amount to 37
from 2003's 100.  The par default rate ended the year at 1.5%,
down from 2003's 5%, and marking a return to the very low annual
default rates (2% or below) of the mid-1990s.  Many factors
contributed to 2004's dwindling defaults, chief among them, a
robust domestic economy, improving corporate fundamentals, and a
market eager to extend credit, even at the 'CCC' level.  In fact,
new issuance of bonds rated 'CCC' or lower increased 60% year over
year, the most conspicuous sign of the market's heightened risk
tolerance.

Some of this risk appetite followed from the positive turn in
rating activity in 2004.  Beginning with the second quarter of the
year and continuing through year end, par upgrades began to exceed
par downgrades for the first time since before the recession, but
the magnitude and the scope of the upgrades was not sufficient to
greatly change the market's overall rating mix.  In particular, at
year end, the concentration of bonds rated 'CCC' or lower,
although down from year-end 2003, remained stubbornly fixed at
$109 billion, continuing to exceed $100 billion and representing
more than 15% of market volume.  This lingering concentration of
low-rated issues suggests that defaults have reached a trough and
are headed higher in 2005.  Fitch believes, however, that
continued strong liquidity and projected healthy GDP growth will
keep defaults significantly below their long-term annual average
of 5.5%.

Fitch's most recent survey of aggregate financial measures for
U.S. high yield companies supports the near-term sustainability of
below-average default rates.  In particular, Fitch examined debt,
revenue, and EBITDA trends for a sample pool of 236 U.S. high
yield companies and observed that through the third quarter of
2004, revenue and EBITDA continued to grow well in excess of total
debt.  In fact, year over year, total debt for this sample was
down 2%, revenue was up 8%, and EBITDA was up 14%.

While the default rate is expected to remain low in 2005, the
outlook for 2006 and 2007 is less certain.  A combination of
events has to the potential to drive up default rates.  First,
nearly $70 billion in high yield bonds is scheduled to mature over
the two years, compared with just $20 billion in 2005.  The
ability to refinance will therefore take on greater urgency during
the two years, and in an environment of potentially higher long-
term rates and wider credit risk premiums.  The market's
enthusiasm for extending credit to high yield issuers may be
dampened by the opportunity to invest in other less risky and
better yielding investments.

Also, beginning in 2006, many high yield companies that have sold
bonds over the past several years will begin to enter the danger
zone of three to four year after issuance - the time when default
risk is most pronounced for speculative-grade companies.  This
combination of events does not necessarily mean that defaults will
spike, especially if credit quality gains continue to accumulate
in 2005 as they have in 2004, but the potential for higher
defaults is significant considering the disastrous outcome of
deteriorating fundamentals and tight credit over the period 2000-
2002, following the boom in low-quality issuance from 1997-1999.

       Highlights of 2004 U.S. High Yield Default Activity

In 2004, 37 issuers defaulted on $10 billion in bonds, down from
100 issuers and $33.8 billion in 2003 and 163 issuers and $109.8
billion in 2002.  Year over year, the number of issuers defaulting
on their bond obligations fell 63% in 2004 and the par value of
bonds affected by defaults fell 70%.

Defaults in 2004 were concentrated in the following sectors:   
      -- gaming,

      -- lodging,

      -- restaurants ($2.3 billion in defaults, sector default
         rate 5.8%),

      -- telecommunications ($1.6 billion, 2.2%),
      
      -- metals and mining ($1 billion, 5.5%), and

      -- broadcasting and media ($.8 billion, 2.9%).

The year's top defaults included:

      -- Trump Atlantic City, $1.8 billion;
      -- RCN Corp, $1.3 billion; and
      -- Pegasus Satellite, $.8 billion.


After returning to historical norms in 2003, recovery rates soared
in 2004.  The weighted average recovery rate on the year's small
batch of defaults was 62% of par compared with 44% of par in 2003
and 22% of par in 2002.

Investors lost negligible incremental dollars on the year's
defaults.  Defaulted issues in 2004 were trading at a weighted
average price of 67% of par at the beginning of the year.  One
month after default (Fitch's measure of recovery value), the
year's defaulted issues traded down to just 62% of par as noted
above.

Although Fitch expects default rates to remain low in 2005, risks
continue to be plentiful.  Among them is the potential for another
spike in energy prices, which would clearly have immediate
negative consequences for the industrial and transportation
sectors.  The significant concentration of bonds rated 'CCC' or
lower highlighted earlier certainly shows heightened vulnerability
to shocks of this kind across the board, but especially so within
certain sectors.  For example, a third of high yield
transportation bonds carried ratings of 'CCC' or lower at year end
compared with 17% for the market as a whole.

Fitch's complete analysis of 2003 default activity will be
available on the Fitch Ratings Web site at
http://www.fitchratings.comunder the 'Credit Market Research'  
link in February.

       Overview of the Fitch U.S. High Yield Default Index

Fitch's default index is based on the U.S.,-dollar-denominated,
non-convertible, speculative-grade bond market (the rating
equivalent of 'BB+' and below, as rated by Fitch or one of the two
other major rating agencies).  Fitch includes rated and non-rated
public bonds and private placements with 144A registration rights.
Defaults include missed coupon or principal payments, bankruptcy,
or distressed exchanges.  Default rates are calculated by dividing
the volume of defaulted debt by the average principal volume
outstanding for the period under observation.


* BOOK REVIEW: As We Forgive Our Debtors
----------------------------------------
Author:     Teresa A. Sullivan, Elizabeth Warren, & Jay Westbrook
Publisher:  Beard Books
Softcover:  370 pages
List Price: $34.95

Order your personal copy at
http://www.amazon.com/exec/obidos/ASIN/1893122158/internetbankrupt

Review by Susan Pannell

So you think you know the profile of the average consumer debtor:
either deadbeat slouched on a sagging sofa with a three-day growth
on his chin or a crafty lower-middle class type opting for
bankruptcy to avoid both poverty and responsible debt repayment.

Except that it might be a single or divorced female who's the one
most likely to file for personal bankruptcy protection, and her
petition might be the last stage of a continuum of crises that
began with her job loss or divorce.  Moreover, the dilemma might
be attributable in part to consumer credit industry that has
increased its profitability by relaxing its standards and
extending credit to almost anyone who can scribble his or her name
on an application.

Such are among the unexpected findings in this painstaking study
of 2,400 bankruptcy filings in Illinois, Pennsylvania, and Texas
during the seven-year period from 1981 to 1987.  Rather than
relying on case counts or gross data collected for a court's
administrative records, as has been done elsewhere, the authors
use data contained in the actual petitions.  In so doing, they
offer a unique window into debtors' lives.

The authors conclude that people who file for bankruptcy are, as a
rule, neither impoverished families nor wily manipulators of the
system.  Instead, debtors are a cross-section of America. If one
demographic segment can be isolated as particularly debt-prone, it
would be women householders, whom the authors found often live on
the edge of financial disaster.  Very few debtors (3.7 percent in
the study) were repeat filers who might be viewed as abusing the
system, and most (70 percent in the study) of Chapter 13 cases
fail and become Chapter 7s. Accordingly, the authors conclude that
the economic model of behavior--which assumes a petitioner is a
"calculating maximizer" in his in his decision to seek bankruptcy
protection and his selection of chapter to file under, a profile
routinely used to justify changes in the law--is at variance with
the actual debtor profile derived from this study.

A few stereotypes about debtors are, however, borne out.  It is
less than surprising to learn, for example, that most debtors are
simply not as well-off as the average American or that while
bankrupt's mortgage debts are about average, their consumer debts
are off the charts.  Petitioners seem particularly susceptible to
the siren song of credit card companies.  In the study sample,
creditors were found to have made between 27 percent and 36
percent of their loans to debtors with incomes below $12,500
(although the loans might have been made before the debtors'
income dropped so low).  Of course, the vigor with which consumer
credit lenders pursue their goal of maximizing profits has a
corresponding impact on the number of bankruptcy filings.

The book won the ABA's 1990 Silver Gavel Award.  A special 1999
update by the authors is included exclusively in the Beard Book
reprint edition.

                          *********

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, Dylan
Carlo Gallegos, Jazel P. Laureno, Cherry Soriano-Baaclo, Marjorie
Sabijon, Terence Patrick F. Casquejo and Peter A. Chapman,
Editors.

Copyright 2005.  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 ***